Unilever Warns of Tougher Conditions in 2016

Helped along by positive currency exchange rates, Unilever's 2015 sales rose 10% to €53.3 billion. Underlying sales growth was 4.1%, with volume up 2.1% and price up 1.9%. The company benefitted from a positive currency impact of 5.9%.

According to Unilever CEO Paul Polman these results further demonstrate the progress Unilever has made transforming into a more resilient company, one that is capable of consistently delivering competitive underlying sales growth, margin expansion and strong cash flow. Polman insisted that this consistency of performance shows that a focus to build Unilever for the long term is paying off.

“We are starting to see the results from sharpened category strategies that guide increased investment in our brands, our infrastructure and our people as well as extensions into attractive new markets like prestige personal care,” he maintained.

Polman warned, however, of tougher market conditions and high volatility in 2016.

“Therefore it is vital that we drive agility and cost discipline across our business,” he concluded.

By category, personal care sales improved from the slower growth of the previous year. Gains were driven by innovations and extensions into more premium segments. For example, deodorants benefited from the launch of dry sprays in North America and compressed formats in Latin America. In hair, growth was driven by the Dove Advanced Hair Series rollout and the launch of Lux Luminique in Japan. The improved Dove body wash formulation, delivering superior care and better sensorial experience, performed well in skin and is now present in over 30 countries. In oral care Unilever extended the premium toothpaste Zendium to nine markets. Finally, the company expanded its prestige business with the acquisitions of Dermalogica, Murad, Kate Somerville and Ren.

The home care division posted another year of broad-based growth driven by innovations in higher margin segments, market development and the rollout of the new Omo with enhanced formulation and improved cleaning technology. By region, Omo pre-treaters and stain removers have built further market share in Brazil. Fabric conditioners benefited from the success of Comfort intense with double-encapsulated fragrance technology that delivers long-lasting freshness. In household care, Unilever continued to scale up by the European rollout of formulations like Cif’s improved Power and Shine sprays for kitchens and bathrooms.