Unilever’s underlying sales grew in the first three months of 2021 as locked-down consumers continued to keep their kitchen cupboards well stocked, and China’s economy began to “normalise”.
The owner of brands ranging from Ben & Jerry’s to Marmite reported on Thursday that sales increased by 5.7% in the first quarter compared to 2020 once the effects of currency moves and changes to its collection of brands were stripped out.
Overall turnover fell by 0.9%, but currency moves accounted for a decline of 8%.
Unilever emerged from 2020 mostly unscathed as its vast portfolio of products, which also includes Domestos bleach and Dove soap, allowed it to ride through the turbulence of the coronavirus pandemic. It briefly became the FTSE 100’s most valuable company during 2020.
It warned that the pandemic was still causing volatility across the world, as major markets enter and exit lockdowns at different times, causing overnight fluctuations in spending patterns.
Demand for food for consumption at home remained strong in Europe and North America during the first quarter, helping Hellman’s mayonnaise to double-digit growth.
However, spending on beauty and personal care remains “subdued”, Unilever said. Deodorant sales declined steeply because of “lower consumer usage”, despite skin care and hair care both growing year-on-year, the company said.
China’s market was returning to normal, it said, but highlighted the rise in Covid-19 cases in India, which is suffering from one of the biggest surges in cases yet seen.
Unilever’s board approved a share buyback programme of up to €3bn (£2.6bn) starting in May.
Alan Jope, Unilever’s chief executive, said it was a “good start to the year”. He highlighted “strong growth” in more expensive beauty products as well as functional nutrition brands like the recently acquired Horlicks drink.
Sales growth in the first half of the year will be at the top end of Unilever’s 3-5% expectation, Jope said, although he pointed to higher costs and an increase in marketing spending as holding back profitability.
Online spending grew by two-thirds year-on-year, and now accounts for 11% of total sales, Unilever said.