Renewed restrictions in India hit sales in Q2 this year: Unilever

The operating environment across its markets saw improvements in the first half, but the situation is still volatile the company has said

Anglo-Dutch FMCG major Unilever on July 22 said the second wave of the coronavirus pandemic and subsequent restrictions in India impacted its sales in the country.

The operating environment across its markets in H1 (January-June) has seen some improvements, but broadly it remains ‘volatile’, the company said in its post earning statement for the first half.

South Asia witnessed double digit growth due to low base impact of last year when there were lockdowns due to the outbreak of the pandemic.

"Restrictions on daily life continue around the world, impacting channel dynamics, sales mix and consumer behaviour," Unilever said.

On the performance in India, the company said, "Although renewed restrictions in India impacted the market in the second quarter, they were less severe than in the same period last year." India comes under Asia/AMET/RUB (Africa, Middle East, Turkey; Russia, Ukraine, Belarus) market region of Unilever, which has reported a turnover of 6.1 billion euros for the second quarter and 12.1. billion euros for the first half.

"South Asia grew double digit as we lapped a period of strict lockdown measures in India in the prior year, although growth slowed from the first to the second quarter as regional restrictions were put in place. We increased prices across categories in response to commodity inflation," it said.

In China, Unilever said, "Normalisation has continued, but market growth is still below pre-COVID-19 levels." In difficult macroeconomic conditions, markets are growing in Latin America but market conditions in South East Asia remain challenging.

"In Indonesia, large parts of the country have entered into lockdown following a sharp rise in COVID-19 cases," it added.

In the second quarter, Unilever’s turnover was 13.5 billion euros with an underlying sales growth (USG) of 5%.

While for the first half, turnover of the Anglo-Dutch FMCG major was 25.8 billion euros with an USG of 5.4%, the statement said.

Commenting on the result, Unilever Chief Executive Officer Alan Jope said, "Unilever has delivered a strong first half, with underlying sales growth of 5.4% driven by our continued focus on operational excellence."

"We are making good progress against the strategic choices outlined earlier this year, including the development of our portfolio into high growth spaces. Prestige Beauty and Functional Nutrition grew strongly," he added.

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