Latin America results underscores uncertainty for Unilever

By Simon Pitman

- Last updated on GMT

Getty Images
Getty Images
Unilever’s first quarter results demonstrated steady sales growth in most regions, with emerging markets proving strong, but in Latin America the results were very mixed.

The results showed that underlying sales growth grew by 3.1% to reach a total turnover of €12.4 billion, but this results showed a decrease of 1.6% when the disposal of investment and cost spreads were taken into consideration.

The strongest area of the business was emerging markets, which accounted for 5.0% sales growth, thanks mainly to performances in the Asia Pacific region, as well as throughout Latin America, with Brazil getting specific mention for its strong performance as it continues to see economic recovery.

“We have delivered a solid start that keeps us on track for our full year expectations,”  ​said Alan Jope, CEO of Unilever

“Growth was led by emerging markets and was balanced between volume and price. Accelerating growth is our number one priority. It requires both great execution and a continued strategic shift into faster growth segments and channels.

Latin American market dynamics

But aside from the encouraging performance in Latin America, continued economic problems in Argentina and volatility elsewhere in the region meant that overall results were held back.

Turnover came in at €1.7 billion for the quarter, representing a modest underlying sales growth of 0.4%, which was underlined by the fact that the volume of sales in the region was down by 4.0%.

Even in Brazil, where sales grew by mid single-digit figures, volumes were still down and in Argentina sales volumes were down by 11% as consumers continued to face very high levels of inflation.

Likewise, the company reported that the volume of its sales were down in Mexico, which it attributed to major retailers throughout the country continuing to destock throughout the quarter.

Beauty shows a strong performance

The company reported that its mainstay beauty and personal care business was the driving force of the growth, growing at a rate of 3.1% to reach a total turnover of €5.1 billion.

Home care showed the strongest performance, growing by 6.0% to reach a total sales turnover €2.7 billion, while food a refreshments was the weakest performing division, with sales growing at 1.5% to reach €4.5 billion.

Brands that did particularly well included Rexona Clinical Protection range, Ponds and Sunsilk, Dove foaming handwash and Saint Ives Facial Mist. Dollar Shave Club was also singled out for its new ‘full service model’.

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