Home cooking boom in lockdowns buoys Unilever sales

A home cooking boom in lockdowns worldwide has helped Unilever post better-than-expected sales as the household goods giant also announced it will buy back up to three billion euros (£2.6 billion) of shares.

The Dove soap to Ben & Jerry’s ice-cream maker saw underlying sales rise 5.7% in the first three months of 2021.

It said demand remained strong for ingredients and food at home across Europe and North America amid Covid-19 restrictions.

Food and refreshment sales soared 9.8% in the quarter.

A strong bounceback in China’s economy as it recovers from the pandemic also bolstered the first-quarter performance.

In a boost for investors, Unilever increased its quarterly dividend payout by 4.1% and said it will start its hefty shares buyback programme in May and complete it by the end of the year.

Shares in the group lifted 3% after the announcement.

Chief executive Alan Jope said Unilever has “made a good start to the year”.

“We are confident that we will deliver underlying sales growth in 2021 within our multi-year framework of 3%-5%, with the first half around the top of this range,” he said.

But Unilever said beauty and personal care sales remained muted – up 2.3% – due to slumping demand as consumers stayed at home.

This led to falling underlying sales of 2.3% in Europe, with lockdowns in the UK and Germany affecting the region’s results.

On a reported basis, group-wide turnover fell 0.9% as it took a knock from currency movements.

The group said its move to offload its tea business, which has UK brands including PG Tips, is “progressing well” and is set to complete later this year.

It continues to weigh up a possible flotation of the business, demerger, joint venture or sale.