eCommerce Drives Unilever’s 2021 Sales

Driven by eCommerce gains, Unilever's sales rose 4.5% last year to $59.7 billion. By segment, 2021 beauty and personal care sales rose 3.8% to almost $25 billion. Home care sales rose 3.9% to $12.0 billion. Food and beverage sales increased 5.6%.

“Our 13 billion-Euro brands grew 6.4%. Priority markets of China, India and the US grew at 14.3%, 13.4% and 3.7%, respectively,” said CEO Alan Jope. “Our growth in e-commerce was 44%, ahead of global channel growth and bringing e-commerce to 13% of turnover. We have continued to re-shape our portfolio into high growth spaces, acquiring in prestige beauty and functional nutrition, and agreeing to the sale of our tea business.”

Jope acknowledged that the major challenge of 2021 was the dramatic rise in raw material costs. Unilever responded with pricing actions, delivering underlying price growth of 2.9% for the year, accelerating to 4.9% in the fourth quarter.

By category, beauty & personal care underlying sales grew 3.8%, with 3.0% from price and 0.8% from volume. The company said all categories delivered good growth apart from skin cleansing, which declined following elevated demand in the prior year. Skin care grew high single-digit with channels reopening in 2021. Vaseline performed strongly throughout the year, supported by several premium innovations across brightening, therapeutics and hydration. Deodorants grew as the market continued to recover, with good growth and restored competitiveness in North America. Dove refillable deodorant launched in the US and was well-received by consumers. Hair care grew mid-single-digit with Sunsilk, Dove and Clear contributing and styling in North America being restored to competitive growth. Oral care grew with good performance in South Asia and Africa. Prestige beauty grew double-digit with all brands benefitting from e-commerce and a recovery in beauty channels compared to the prior year. New innovations in prestige beauty included Dermalogica’s biolumin-c and sound sleep cocoon and Ren’s zero waste packaging plan.

Home care underlying sales grew 3.9%, with 3.1% from price and 0.7% from volume. In fabric care, mid-single-digit growth in fabric cleaning and low single-digit growth in fabric enhancers was led by South Asia and Latin America. Unilever credited, in part, performance from dilutable laundry liquids across Latin America, under the Omo brand. Capsule and liquid format sales continued to grow. In China, Omo became the leading capsules brand in traditional retail and second largest in e-commerce. Underlying sales in home and hygiene declined mid-single-digit as the company lapped strong demand for hygiene products in 2020. Still, overall home and hygiene continued to trade ahead of pre-pandemic levels, according to Unilever.

In 2022, Unilever forecasts sales gains of 4.5-6.5%. Pricing will continue to be strong, with some impact on volume as a result. Inflation will remain high as well. Unilever expects very high input cost inflation in the first half of over €2 billion ($2.28 billion). This may moderate in the second half to around €1.5 billion, although there is currently a wide range for this that reflects market uncertainty on the outlook for commodity, freight and packaging costs, the company added.

Last month, Unilever announced a reorganization intended to make it simpler and more category-focused. Unilever will be organized around five category-focused business groups, each responsible and accountable for their strategy, growth and profit delivery; running their businesses in all geographies. The new organization is expected to generate around €600 million ($684 million) of cost savings over two years. The company plans to maintain competitive levels of investment in marketing, R&D and capital expenditure through a period of inflation-led gross margin pressure until input costs normalize and the full extent of pricing is reflected.

The company announced a share buyback program of up to €3 billion ($3.42 billion) to be conducted during the next two years. The buyback begins this quarter.