Unilever to step up investment in India, US: CEO – Industry News

Unilever will intensify its focus on beauty, well-being and personal care products, as well as make disproportionate investments in the US and India markets, its top two geographies, CEO Fernando Fernandez said on Thursday in an earnings call following its June quarter results. The consumer goods major and parent of brands such as Dove reported underlying sales growth of 3.8% in the June quarter. The company follows a January-December accounting year. 

Improvement in sales

The second-quarter improvement in sales was due to outperformance in developed markets and the positive impact of “decisive interventions” in emerging markets, said Fernandez, who took over the top job earlier this year after the abrupt departure of his predecessor Hein Schumacher.

Fernandez also noted the appointment of Priya Nair as the new CEO & MD of the India business. “She has successfully led our global beauty and wellbeing vertical and understands both domestic and international markets. Her appointment is aligned with the evolving consumer and channel dynamics in India.”

“Looking ahead, our priorities are clear: more beauty and well-being and personal care; disproportionate investment in the U.S. and India, and a sharper focus on premium segments and digital commerce,” Fernandez said.

Unilever, he said, was building a marketing and sales machine that would drive “desire at scale in its power brands” and ensures “execution excellence across distribution channels”. “This is aimed at  delivering consistent volume growth and gross margin expansion,” he said.

First half

In the first half, Unilever’s underlying sales totaled 30.1 billion euros, with the 3.4 percent growth marginally higher than analysts’ expectations.

At reported exchange, sales were down 3.2 percent due to the impact of disposals and a negative currency impact, the company said. Underlying operating profit was down 4.8 percent to 5.8 billion euros in the six months to June 30 due to strong comparatives with the corresponding period last year, the company said.

Fernandez believes the first-half performance positions the company well for the full year. “In the second half, we expect further acceleration in emerging markets, particularly in Asia, and sustained momentum in developed markets,” he said.
Unilever’s beauty and well-being division generated 21% of group turnover in the first half, with underlying sales growing 3.7%. Some 1.7% came from volume, with 2% coming from price.

Growth in the division was led by “continued momentum” in well-being, partially offset by “subdued” growth in beauty. Within the division, hair care sales were flat. Dove products grew mid-single digit, supported by a “significant relaunch” featuring fiber repair technology and refreshed packaging. Growth was offset by a decline in the Clear brand, which was impacted by slow market growth in China, and by a volume decline in TRESemmé hair care.

The company said its three priorities in beauty and well-being are premiumizing the core hair and skin care portfolios by emphasizing “brand superiority”; fueling the growth of the prestige beauty and well-being portfolios with “selective” international expansion, and, continuing to strengthen competitiveness “through innovation and a social-first approach to consumer engagement.”