Unilever’s Personal Care business continued to gain share, but currency headwinds whipped at net sales.
For the three months ending March 31, Unilever Personal Care posted sales of $5.73 billion down 5.9% from the prior year. Underlying or organic sales rose 4.5% outpacing market growth of 3%. The gains were derived from a 2.7% volume increase and a 1.8% price increase.
Companywide sales were down 6.3% to $15.75 billion (11.4 billion euro), reflecting a negative foreign exchange impact of 8.9%. Underlying sales rose 3.6%, driven by 6.6% growth in emerging markets.
“We delivered good growth in the first quarter despite slowing markets and a tough competitive environment, further evidence that Unilever is now delivering consistently ahead of our markets,” said CEO Paul Polman in a statement.
Speaking on a conference call, chief financial officer Jean-Marc Huet noted the U.S. hair care market has become particularly competitive, and that, coupled with ongoing consumer weakness, pricing is expected to remain negative. “We have seen some positive signs in the U.S. but the gap between high income and low income continues to grow,” said Jean-Marc. “For most ordinary people it still feels like a recession.”
Overall the company’s Personal Care business, “continues to perform strongly,” said Jean-Marc. “All sub-categories grew at or close to mid-single digits; Dove, Rexona, Vaseline, TRESemme and Lifebuoy all grew particularly well and gained share.”
Despite economic challenges, the company did well in North America where it remains the hair care market leader. “From Suave to TRESemme to Dove to TIGI and even Clear, all of that portfolio is really strong and growing in terms of share and continues to do so,” said Jean-Marc. The company’s focus has been on premium, higher margin innovation.
In other news Amanda Sourry, formerly head of its U.K. and Ireland region, has been named to lead hair care. Among product news was the introduction of TRESemme 7 Day Smooth collection into the U.S. and U.K.; the addition of men’s variants to Vaseline Spray & Go and launch of Dove Advanced Care deodorants that borrow moisturizing technology from its shower gels.
Unilever is also embarking on a restructuring program intended to save $690 million (500 million euro) annually, and is expanding geographically adding 300,000 outlets to its existing 8 million retail points. Targeted areas include China, Brazil, Indonesia and India.