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(Alliance News) - Unilever PLC on Thursday reported flat sales in its first quarter, with demand for household goods boosted by the pandemic, but lockdowns hitting its ice cream business.
Revenue in the first three months of 2020 climbed 0.2% annually to EUR12.4 billion, though underlying sales growth was flat. Volumes rose 0.2%, the consumer goods firm said, though this was offset by prices slipping at the same rate.
"Demand patterns are changing. As the crisis hits countries around the world, we see upswings in sales of hygiene and in-home food products, combined with some household stocking, and near cessation of out of home consumption which is particularly affecting our food service and ice cream business," Unilever said.
Across the globe, governments have imposed lockdown measures as they bid to contain the spread of Covid-19. Restaurants, cafes and bars are among the businesses that have been forced to close in some countries.
By business segment, underlying sales in Unilever's Beauty & Personal Care segment were 0.3% higher year-on-year in the first quarter. Unilever is one of the major global players in beauty products, and has brands such as Dove and Rexona in its portfolio.
In Home Care, which includes laundry brands such as Persil and cleaning products giant Domestos, business has been boosted by virus stockpiling, with underlying sales climbing 2.4% annually.
Foods & Refreshment was hurt, though, with underlying sales shrinking 1.7%. Included in this segment is Unilever's ice cream division, which houses brands including Cornetto and Ben & Jerry's.
"Most major markets, outside China, saw normal sales patterns in January and February with Covid-19 impacting in March. The Chinese market slowed significantly during the lock-down period, which began in January, whilst Europe and North America, saw a positive impact of household stocking in March," Unilever added.
"The Indian market had slowed even before the strict lock-down began at the end of March. Conditions in Latin America remain challenging, as they were before Covid-19, although we have seen some household stocking at the end of the quarter."
Earlier in April, Unilever's Indian subsidiary Hindustan Unilever Ltd completed a merger with a GlaxoSmithKline PLC consumer healthcare unit.
Unilever's first quarter dividend was held at EUR0.4104 per share. It provided no comment on its decision to pay the quarterly dividend, at a time when other listed companies have been pulling theirs.
"We are adapting to new demand patterns and are preparing for lasting changes in consumer behaviour, in each country, as we move out of the crisis and into recovery," the company added.
"Our portfolio, our financial stability and the quality of our leadership teams around the world mean that Unilever is well-positioned during this crisis and for the changing world that will come afterwards."
Unilever shares were 5.7% lower at 4,003.00 pence each in London on Thursday morning.
By Eric Cunha; ericcunha@alliancenews.com
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