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April 23, 2020

Unilever extracts guidance as Covid-19 weighs on group sales

Unilever has extracted its financial guidance after the Anglo-Dutch consumer goods giant reported the impact of Covid-19 in the first quarter.

By Dean Best

Unilever has extracted its financial guidance after the Anglo-Dutch consumer goods giant reported the impact of Covid-19 on its business in the first quarter, when underlying sales growth was flat.

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Unilever- A Deep-dive into Product Launches and Advertising Strategy

Unilever product advertising is mainly through mainstream TV channels. Out of the products advertised so far at least 50% (over 850) of ads have been run on TV, while print media comes second with 496 ads. Unilever also utilizes social media platforms for advertisement. Unilever products are categorized by innovation ratings and tags in our product launch database. The North American region consists of almost 74 products with innovations related to the formulation of the product. Europe and other regions also have more products categorized under formulation-related innovation, followed by the packaging and positioning of the products. Most Unilever products are tagged with “High Vitamins”, “Recyclable”, and “Natural” tags to understand what the product differentiator is from other products available in the market. The majority of products belong to the personal care industry with a total of 5,788 products to date. This report, through the Unilever Example, illustrates how GlobalData Explorer enables you to:  
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Emerging markets were hit the most, with sales down 1.8%, while the performance in developed countries showed a 2.8% increase in sales.

Unilever said China “slowed significantly” during the country’s Covid-19 lock down, which began in January, as foodservice demand declined, and ice cream and retail sales tailed off. Meanwhile, Europe and North America  “saw a positive impact of household stocking in March”.

The owner of the Ben & Jerry’s and Magnum ice-cream brands added that most major markets outside China “saw normal sales patterns in January and February with Covid-19 impacting in March”. 

Chief executive Alan Jope said in the earnings statement today (23 April): “We will continue to adapt throughout this crisis. However, the unknown severity and duration of the pandemic, as well as the containment measures that may be adopted in each country, mean that we cannot reliably assess the impact across our markets and our business. We are therefore withdrawing our previous growth and margin outlook for 2020. 

“Our portfolio, our financial stability and the quality of our leadership teams around the world mean that Unilever is well-positioned during this crisis and for the changing world that will come afterwards. The fundamental drivers of growth continue to be the key principles driving our execution as we remain focused on delivering superior long-term financial performance through our sustainable business model.”

Unilever is putting up EUR500m (US$539.9m) to aid its “most vulnerable small- and medium-sized suppliers and small-scale retail customers” that rely on the FMCG giant for business.

Flat quarter-one sales resulted in a turnover of EUR12.44bn versus EUR12.42bn a year earlier, with volumes up 0.2% but pricing down 0.2%.

For Unilever’s Foods and Refreshment segment, underlying sales declined 1.7%, with volumes down 1.8% and positive pricing of 0.1%.

“The largest volume decline was in ice cream, as the seasonal sell-in for out of home consumption in key markets such as Europe, Turkey and Latin America were heavily impacted by lock-down measures and the reluctance of distributors to commit to buying ice-cream stock with an uncertain holiday and tourism season,” Unilever noted.

“There was also a sharp decline in foodservice, as restaurants in China and elsewhere closed due to Covid-19 mitigation measures. This was offset by increased in-home consumption and household stocking in some markets, particularly the USA and Europe, leading to volume-led growth in savoury and dressings. 

“Knorr saw low single-digit growth, while Hellmann’s grew double-digits as our brands helped to feed the many families at home.” 

Back in emerging markets, Unilever said India had slowed even before lock-down measures were imposed in the South Asian country at the end of March, while conditions in Latin America “remain challenging, as they were before Covid-19, although we have seen some household stocking at the end of the quarter”. 

When Unilever presented its 2019 full-year results in January, the company said sales growth for the current year was expected at the lower-end of the “multi-year 3-5% range and will be second-half weighted”.

It added: “While we expect an improvement from the fourth quarter of 2019 into the first half of 2020, first-half underlying sales growth will be below 3%”, with an improvement in the underlying operating profit margin.

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Free Report
img

Unilever- A Deep-dive into Product Launches and Advertising Strategy

Unilever product advertising is mainly through mainstream TV channels. Out of the products advertised so far at least 50% (over 850) of ads have been run on TV, while print media comes second with 496 ads. Unilever also utilizes social media platforms for advertisement. Unilever products are categorized by innovation ratings and tags in our product launch database. The North American region consists of almost 74 products with innovations related to the formulation of the product. Europe and other regions also have more products categorized under formulation-related innovation, followed by the packaging and positioning of the products. Most Unilever products are tagged with “High Vitamins”, “Recyclable”, and “Natural” tags to understand what the product differentiator is from other products available in the market. The majority of products belong to the personal care industry with a total of 5,788 products to date. This report, through the Unilever Example, illustrates how GlobalData Explorer enables you to:  
  • Track product launches by FMCG companies to get an understanding of the product-level strategies including geographic concentrations, innovation types, product claim, category focus and more
  • Monitoring the advertising strategies of various brands and gain insights into channel focus, regional focus, and more
  • Perform company-level analysis to understand business model, size, and geographic focus
Don’t miss out on key market insights that can help optimize your next investment – read the report now.
by GlobalData
Enter your details here to receive your free Report.

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