Unilever restores targets as China and India boost sales

Unilever has restored its financial targets after scrapping them last year, as recoveries in China and India helped it increase underlying sales by 3.5 per cent in the fourth quarter.

The maker of Dove soap, Hellmann’s mayonnaise and Magnum ice cream brought back its target of 3 to 5 per cent underlying sales growth. The group plans to focus its portfolio on five “high growth” areas, including plant-based foods and high-end beauty products.

It set out the plan following the unification of its formerly Anglo-Dutch structure into a single UK company late last year, which chief executive Alan Jope says will enable more acquisitions and disposals to help meet growth targets.

Underlying sales growth for 2020 came in at 1.9 per cent, in line with analysts’ expectations. That brought underlying operating profit to €9.4bn, down 5.8 per cent from a year earlier because of unfavourable currency movements.

Mr Jope said: “While volatility and unpredictability will continue throughout 2021, we begin the year in good shape and are confident in our ability to adapt to a rapidly changing environment.”

Demand for hygiene products continued to boost sales, with sales of Domestos bleach more than 25 per cent higher than a year earlier, while sales of Lifebuoy soap rose 50 per cent during the year.

Unilever’s ice cream business, which is the world’s largest, grew slightly despite pandemic restrictions as consumers treated themselves to desserts at home.

Following the pandemic’s impact last year, China has “normalised in many categories”, while Indian economic activity picked up in the final quarter, the company said.

It said it would push to speed up growth in China, India and the US as part of a new strategy set out by Mr Jope that also includes spending €1bn on restructuring during 2021 and 2022.