Unilever reported its 2020 first-quarter report over the weekend in one of the stock exchanges’ first major earnings report for the financial year. The consumer goods company includes Food Products, Home & Personal Care has its major business segments.
In the first quarter (January to March) interim report published, the company reported a 30% drop in its topline revenues. See highlights
- Revenue from its Food Products division fell 19.5% from N9.2 billion in the corresponding quarter in 2018 to N7.4 billion this quarter.
- Profits also went from N2 billion to N948 million a 52.6% decline year on year.
- Revenue from its Home and Personal Care (HPC) division fell from N9.9 billion in Q1 of 2018 to N5.9 billion this quarter representing a massive 40% drop.
- A similar drop was observed in Q1 2019 when revenues from its HPC group fell from N13.6 billion to N9.9 billion
- Unilever Nigeria sells major brands like Close-Up toothpaste, Pepsodent toothpaste, LUX beauty soap, Lifebuoy soap, Rexona, Vaseline lotion and Vaseline Petroleum Jelly in the Personal Care Unit of the business.
- OMO Multi-Active Detergent, Sunlight washing powder, Sunlight washing bar soap and Sunlight Dishwashing liquid, Pears Baby Product ranges.
- While, Lipton Yellow Label Tea, Knorr bouillon cubes in the Foods Unit, Royco bouillon cubes, etc.
- In 2018, the company sold off its Spreads business which includes the household name brand Blueband Magarine.
Bottom Line: Unilever did was yet to provide any guidance to its recently published results. However, Nigerian based businesses faced a very tough first quarter in 2020 as the effect of the border closure took its toll on inflation and the purchasing power of Nigerians. As Nigerians grappled with rising cost, the 4 weeks lockdown induced by the COVID-19 virus has further dented demand for non-essential household products.
This could be a sign of what’s to come as more companies drop their results on the website of the Nigerian Stock Exchange. While the full effect of the lockdown will be felt in the second quarter of the year, the lull in business activities in February and March will likely have an effect on company results.
Unilever also has its own share of challenges having been dealt a huge blow by rising competition from competing for locally made substitutes and foreign imports. Nairametrics noted this in an article published in March after it released its full-year results. Last year the company Carl Raymond Cruz as the Company’s new Managing Director after its former Managing Director Yaw Nsarkoh was forced to resign.