Unilever, the multinational consumer goods company, is setting its sights on dynamic categories for future growth, with a strong emphasis on the US, India, and China. The company aims to expand its portfolio in high-growth areas and make strategic decisions about acquisitions and disposals to achieve this goal. In recent years, Unilever has already made significant acquisitions in the higher-end beauty sector, and analysts predict that it will continue to expand in this area.

Additionally, Unilever plans to accelerate its presence in the US, India, and China by leveraging its strength in emerging markets. These three countries currently account for approximately 35% of the company’s turnover. Furthermore, Unilever aims to become a leader in the channels of the future, with a specific focus on e-commerce and digitizing distribution trade using advanced shopper insights.

There has been speculation that Unilever may sell some non-core beauty brands from its portfolio, aligning with its growth strategy. However, the company has not provided any specific details about which brands might be sold.

Looking at Unilever’s financial performance, the company reported a 1.9% increase in underlying sales for the latest full year, reaching €50.7 billion. In the fourth quarter, underlying sales rose by 3.5% to €12.1 billion. However, underlying operating profit decreased by 5.8% to €9.4 billion for the year, while operating profit on a GAAP basis dropped by 4.6% to €8.3 billion.

Unilever’s largest division, Beauty & Personal Care, experienced a 3.5% increase in underlying sales in the fourth quarter, amounting to €5.2 billion, and a 1.2% increase to €21.1 billion for the year. This highlights accelerated growth in the latest quarter. The demand for hand hygiene products during the Covid-19 pandemic drove significant growth in skin cleansing, with Unilever’s Lifebuoy hygiene brand experiencing a remarkable 50% growth. However, lockdown measures and restricted living conditions affected the demand for skincare, deodorants, and hair care, leading to declines in both volume and price, particularly in the second quarter. Skincare saw a high-single-digit decline, while deodorants declined in mid-single digits. In hair care, wash and care products partially offset a decline in styling products, resulting in an overall low-single-digit decline. Unilever’s Prestige Beauty business, heavily reliant on brick-and-mortar stores, suffered from store closures. However, the division successfully shifted to over 50% e-commerce, mitigating the decline to low-single digits.

The underlying operating margin in the Beauty & Personal Care division decreased by 100 basis points due to an unfavorable product mix and additional costs associated with Covid-19. This reduction was partly offset by decreased brand and marketing investment during the lockdown periods, followed by increased investment in the second half of the year.

CEO Alan Jope acknowledged the volatility and unpredictability of the year but commended Unilever’s resilience and agility. He stated that the company had gained market share in over 60% of its business in the last quarter.

In conclusion, Unilever’s future growth strategy centers on developing its portfolio in high-growth categories, expanding its presence in key markets like the US, India, and China, and prioritizing e-commerce and digitization. Despite facing challenges due to the pandemic, Unilever has demonstrated resilience and adaptability in navigating the market.

Useful Links:
Unilever Official Website
Statista: Unilever Key Figures