Unilever's beauty ops make progress in first half, Q2 growth accelerates
FMCG giant Unilever had a “strong” first half, it said on Thursday with underlying sales growth of 5.4% (4% by volume and 1.3% price) while price growth stepped up in Q2.
That said, overall group turnover rose only 0.3%, including a positive impact of 1.4% from acquisitions and negative impact of 6.1% from currency-related items. And underlying earnings per share fell 2%, including a negative impact of 6.3% from currency.
The Anglo-Dutch company said it's “making good progress against the strategic choices outlined earlier this year, including the development of our portfolio into high growth spaces. Prestige Beauty and Functional Nutrition grew strongly and we recently announced the acquisition of digitally-native skincare brand Paula's Choice”.
The company expects to deliver full-year underlying sales growth “well within our multi-year framework of 3-5%, despite more challenging comparators in the second half”.
Looking specifically at its beauty and personal care ops, underlying turnover rose 3.3% in H1 to €10.4 billion and in Q2, it was up 4.2% to €5.4 billion.
In H1, 1.8% of its growth came from volume and 1.4% from price, and the acceleration in underlying sales growth in Q2 was helped by “increased personal care consumption occasions as living restrictions were eased in some of our markets”.
Skincare grew in double-digits and deodorants returned to growth. In skincare, Vaseline and Ponds were both up in double-digits. And the company continued its sustainability drive with innovations like Dove's refillable deodorant in the US. But skin cleansing declined, although that was mainly because the group lapped the sharp increase in demand in the prior year that had been related to Covid-19.
Haircare grew in mid-single-digits with all aspects of the category — wash, care and styling — looking healthy. It saw good growth in China, India and Brazil and premium brand Shea Moisture grew in double-digits in the US.
Unilever’s Prestige Beauty brands operation also grew in double-digits as higher in-store footfall made an impact. The company increased pricing in response to commodity inflation across categories, particularly in Latin America and South Asia.
But its underlying operating margin declined 220bps as it boosted brand and marketing investment compared to the prior year and as its gross margin declined as a result of high cost inflation.
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