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Unilever continues to turn to personal care after difficult Q2

By Andrew McDougall+

29-Jul-2014
Last updated on 29-Jul-2014 at 12:53 GMT

Unilever CEO Paul Polman continues to look to personal care for progress
Unilever CEO Paul Polman continues to look to personal care for progress

The Anglo-Dutch consumer giant will continue to look towards its personal care business after a difficult second quarter saw sales slow in emerging markets.

The Dove soap maker missed second-quarter expectations, as sales rose 3.8%, below analysts' expectations of 4.3%, with CFO Jean-Marc Huet commenting on a slowdown in China and Russia in particular.

In personal care Unilever saw a 4.5% expansion, whilst the foods and home care businesses grew 0.7% and 6.2% respectively.

And it is these results coupled with its ations in the past 5 years, in which it sold off €2.8bn in sales of mainly food businesses and acquired €3bn of sales from personal care acquisitions, that has seen Unilever turn its attentions more towards its beauty brands.

Speaking after the results, company CEO Paul Polman said the group would continue to tilt its portfolio towards higher-growth personal and home care and away from food.

Personal care push

Personal care continued to grow ahead of slowing markets underpinned by a strong innovation programme.

Unilever’s compressed deodorants innovation appears to be continuing its success in Europe, while Rexona and Dove saw new communication and the Axe range of products received new packaging.

In hair, Clear has been successfully introduced in Japan and re-launched in key markets such as Brazil and China, while TRESemmé and Dove both made good gains in the United States.

Skin cleansing saw continued strong growth for Lifebuoy while Dove continued to deliver broad-based growth, and Lux benefited from the re-launch in China and South East Asia.

In skin care Fair & Lovely delivered strong growth and the Dove Purely Pampering range was extended into nourishing body oil.

Challenges

This performance comes after Dave Lewis, head of personal care, was named as the chief executive of Tesco, leaving Unilever after 27 years, to take up his new post in October.

Paul Polman was full of praise for Lewis, who he believes has a tough job on his hands. Turning his attention back to his own company, the Unilever boss also believes it is a challenging time for consumer goods companies too.

He comments that the economic backdrop in the first half had been “as tough as we’ve faced in the last five years”, and indicated there would be no improvement this year, saying it would take “a few more quarters before we see the first signs of recovery.”

“We have experienced a further slowdown in the emerging countries whilst developed markets are not yet picking up.”

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