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Introduction to Unilever (8.1 MB)PDF
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Introduction to Unilever March 2012
Safe harbour statement
This document may contain forward-looking statements, including „forward-looking statements‟ within the meaning of the United States Private
Securities Litigation Reform Act of 1995. Words such as „will‟, „aim‟, „expects‟, „anticipates‟, „intends‟, „believes‟, „vision‟, or the negative of these
terms and other similar expressions of future performance or results, and their negatives, are intended to identify such forward-looking
statements. These forward-looking statements are based upon current expectations and assumptions regarding anticipated developments and
other factors affecting the Group. They are not historical facts, nor are they guarantees of future performance.
Because these forward-looking statements involve risks and uncertainties, there are important factors that could cause actual results to differ
materially from those expressed or implied by these forward-looking statements, including, among others, competitive pricing and activities,
economic slowdown, industry consolidation, access to credit markets, recruitment levels, reputational risks, commodity prices, continued
availability of raw materials, prioritisation of projects, consumption levels, costs, the ability to maintain and manage key customer relationships
and supply chain sources, consumer demands, currency values, interest rates, the ability to integrate acquisitions and complete planned
divestitures, finalising fair values related to prior acquisitions, the ability to complete planned restructuring activities, physical risks,
environmental risks, the ability to manage sustainability, regulatory, tax and legal matters and resolve pending matters within current estimates,
legislative, fiscal and regulatory developments, political, economic and social conditions in the geographic markets where the Group operates,
completion of the Sustainable Development Report 2011 and new or changed priorities of the Boards. Further details of potential risks and
uncertainties affecting the Group are described in the Group‟s filings with the London Stock Exchange, Euronext Amsterdam and the US
Securities and Exchange Commission, including the Group‟s Annual Report on Form 20-F for the year ended 31 December 2011 and the Annual
Report and Accounts 2011. These forward-looking statements speak only as of the date of this document. Except as required by any applicable
law or regulation, the Group expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-
looking statements contained herein to reflect any change in the Group‟s expectations with regard thereto or any change in events, conditions
or circumstances on which any such statement is based.
Contents
Mission 1
Geographic Reach 2
Categories and Brands 3
Our Strategy 4
Sustainable Living Plan 5
Unilever in Emerging Markets 6
Financial Performance , Governance and Shares 7
Contact Information 8
Mission 1
We work to create a better future every day.
We help people feel good, look good and get more out of life with brands and
services that are good for them and good for others.
We will inspire people to take small everyday actions that can add up to a big
difference for the world.
We will develop new ways of doing business that will allow us to double the size of
our company while reducing our environmental impact.
We are a successful, growing, sustainable business
€40bn
€80bn
environmental impact
€46bn
Geographic Reach 2
Well positioned for growth
2bn consumers
worldwide use a Unilever product
on any day
54% of sales in
emerging markets
Products sold in more than
190 countries
More than
50 years experience in
Brazil, China, India and Indonesia
Balanced scale across categories
Personal care
€15.5bn Turnover
33% of sales
Home care
€8.2bn Turnover
18% of sales
Balanced scale across categories
Foods
€14.0bn Turnover
30% of sales
Refreshment
€8.8bn Turnover
19% of sales
Balanced scale across geographies
“Our deep roots in local cultures and markets around the world give us our strong relationships with consumers and are the foundation for future growth. We will bring our wealth of knowledge and
international expertise to the service of local consumers - a truly multi-local multinational” - extract from Unilever’s Corporate purpose
Asia/Africa/RUB
€17.7bn
38% Sales
The Americas
€15.3bn
33% Sales
Europe
€13.5bn
29% Sales
Categories and Brands 3
Categories - deliver global platforms
Responsible for:
Brand development
Innovation
Research and Development
Accountable for:
Medium/long term market share
Brand health
Innovation metrics
Category value creation
Regions and categories Clear, distinct, complementary roles
Responsible for:
Managing the business
Deploying brands and innovations
Customer management
Accountable for:
Short term market shares
Growth
Profit
Cash flows
Regions – in-market execution
Leadership positions across the portfolio
Local Strength
Oral Care
Household Cleaning
World Number 2
Laundry
Daily Hair Care
World Number 1
Savoury
Dressings
Tea
Ice Cream
Spreads
Deodorants
Mass Skin
Number 1 and 2 in more than 80% of the business
Great brands achieving key milestones
€3bn €2bn €4bn
Our €1bn brands
€1bn
Brands
And more coming
The next 10 bigger
brands
Our Strategy 4
It is to double the size of Unilever whilst at the same time reducing our environmental footprint.
€40bn
€80bn
environmental impact
€46bn
Our Compass strategy sets out our ambition
Unilever long term focus
1. To drive volume growth ahead of our markets
2. Steady and sustainable core operating margin improvement
3. Strong cash flow
Our Strategy 4
I. Winning with Brands and Innovation
Innovation becoming a competitive strength
Consistently high innovation rate
9
40
70
2009 2010 2011
Innovations in ten or more markets
>30%
Clear – global re-launch Dove – Nourishing oils launch Sedal – Keratinology
Innovating across the Portfolio - Hair
Rolled out to 50+ countries Now in more than 40 countries Each year new variant reaches 50+ countries
Innovating across the Portfolio - Deodorants
Dove Men+Care Rexona Axe
Radox – spa range Dove – visible care Axe – shower
Innovating across the Portfolio - Skin
Innovating across the Portfolio - Laundry
Dirt is Good
Global re-launch with enhanced cleaning perception with built in pre-treaters
Surf launch into white spaces Radiant
Patented optical whitener technology
Comfort
Superior freshness in-wear
Innovating across the Portfolio - Oral
Signal Sensitive Expert
Mentadent Maximum Protection Close Up Fire - Freeze
Signal Complete 8
Protects the tooth nerve of pain stimulus and strengthens the gums
Complete protection
Maximum protection for the family For ultimate long lasting freshness
Fruttare - Asia, LATAM Cornetto - Europe Magnum – US launch
Innovating across the Portfolio – Ice Cream
Knorr – Sauce Pur Knorr – Soups Knorr – Stockpot
Innovating across the Portfolio – Savoury
Lipton with TESS technology – Russia
Lipton – Cold Tea Lipton – Ice Tea
Innovating across the Portfolio – Tea
Latta & Luftig Rama Irresistible Flora Liquids
Innovating across the Portfolio – Spreads
Sharpening the portfolio through M&A
Hair / Skin - Alberto Culver Personal Care – Concern Kalina Personal care – Sara Lee
M&A as a growth driver: bolt-on acquisitions on core categories - €1bn - €2bn p.a.
White space: ~100 brands into new markets p.a.
Our Strategy 4
II. Winning in the Marketplace
Market development - our repeatable model
More Users
More Usage
More Benefits
Customer partnerships
Unilever has unparalleled reach across the store, bringing unique „shopper insight‟ to our partnership with customers
Customer Insight and Innovation Center roll out now
completed
Sao Paolo
Paris Shanghai
Singapore
Englewood Cliffs
London Leatherhead
Our Strategy 4
III. Winning through Continuous Improvement
We are stepping up capex investment
capex % turnover
Stage 1: under-invest Stage 2: kick-start growth Stage 3: sustainable levels
2006 2008 2010 2012 2014
%
4%
3%
2%
Investing for growth – particularly in emerging markets
Savings programmes
1.1 1.4 1.4 1.5
2008 2009 2010 2011
€bn
Total Savings
Excellent savings from continuous improvement
programme
Contribution from supply chain, overheads and A&P
Difficult macro-economic environment – no let up in
our productivity initiatives
Driving return on brand support
€6.1bn on A&P in 2011
Advertising production and fees
Reduced by
€128m in 2011
Evaluating the effectiveness of our marketing
Rapidly adopting new cost-effective models that make us
more competitive:
Improving customer management
Using handheld computers to track in-store
performance and order sizes
Better tracking of our point-of-sale materials
Driving the Virtuous Circle of Growth
Profitable Volume Growth
Innovation A&P / R&D
Cost Leverage
+ Efficiencies
Cost Savings
Our Strategy 4
IV. Winning with People
Most preferred graduate FMCG employer in
14 countries
Proud to work in Unilever
86% of managers
People are at the heart of our business
Talent for €80 business ambition
The Talent & Organisation Readiness Framework
Talent
SkillsOrganisationOrganisation
Culture
We are building the…
•Talent
•Skills
•Organisation
•Culture
…to match our
growth ambition
“Great Place, Great People” Unilever Employer Ranking 2011
We continue to improve our employer brand rankings
Various sources quoted - 2011 Universum survey, AC Nielsen reports
Number 1 FMCG employer in 14 countries
South Africa, Vietnam, Indonesia, Australia, Bangladesh, Pakistan, India Sri Lanka, Argentina, Chile, Brazil, Netherlands, Russia, Turkey
Local roots Global scale
We have local roots with global scale
• Global portfolio of brands and
categories
• Dedicated R&D investment
• Shared values and standards of
behaviour
• Understanding of the local consumer
• Brands and products across a wide range of income levels
• Critical mass on the ground
• Corporate reputation with local stakeholders and talent pool
Our heritage and local expertise mean
that D&E is in our DNA Leveraging our scale brings us
advantages over local competition
We are driving a new performance culture
internal and external appointments – 2/3rd of senior management in new roles
3+1 goals
More variable pay
Individual assessment based on rating
Top 100 required to hold 1.5x salary in shares
ULE required to hold >3x salary in shares
More stretch
More differentiation
More
reward
3+1 goals
Paul Polman
CEO
Keith Weed Marketing & Communications
Pier-Luigi Sigismondi Supply Chain
Jean-Marc Huët Finance
Geneviève Berger R & D
Tonia Lovell Legal
Doug Baillie HR
Jan Zijderveld* Europe
Dave Lewis Personal Care
Kevin Havelock Refreshment
Kees Kruythoff* North America
Alan Jope* North Asia
Harish Manwani COO
* = report to
Harish Manwani, COO
Antoine De Saint-Affrique Food
Unilever Leadership Executive
Sustainable Living Plan 5
Unilever Sustainable Living Plan
HELP 1 BILLION PEOPLE IMPROVE THEIR
HEALTH & WELLBEING
HALVE ENVIRONMENTAL IMPACTS
OF OUR PRODUCTS
SOURCE 100% OF AGRICULTURAL RAW MATERIALS SUSTAINABLY
The business case for sustainability
consumer preference win with customers sustainable innovation
100% sustainable raw
materials by 2020
grow our markets cost savings
Reached more than
130m people since 2002 aim to reach 500m
people by 2020
Pack weight reduced by 10-15%
250 metric tonnes of packaging saved
€5m savings p.a.
The business case for sustainability
USLP: launch of the Unilever Foundation
Helping more than one billion people improve their health and well-being
Unilever in Emerging Markets 6
Unilever: the emerging market company
0%
20%
40%
60%
80%
100%
1946 1956 1966 1976 1986 1998 2004 2008 2009 2010 2011
developed
emerging
54%
Emerging markets: consistent growth over 20 years
0%
4%
8%
12%
16%
90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11
Underlying sales growth
Consistent track record – 9% CAGR over the last 20 years
15% 25% 35% 45% 55%
We have the best footprint in emerging markets
54%
Source: Annual Report & Accounts, analysts estimates, Unilever estimates
Have lots
Haves
Have nots
billions of people
1.9
2.0
2.9
3.0
2.7
1.9
2010 2020
Source: Unilever estimates Globegro, updated upon LSM 2.0 baseline studies.
The opportunity - more consumers
3.0
2.7
1.9
More benefits
More usage
More users
3.0
2.7
1.9
We are ideally positioned to capture D&E growth
population
Philippines
Bangladesh
Pakistan
Brazil
Indonesia
India
China 1.4bn
1.3bn
230m
195m
170m
160m
90m
relative market share value share
>10%
>35%
>40%
>35%
>35%
>50%
>35%
0.4
>2
>1.5
>1.5
0.9
>2
>1.5
Market development is a major growth driver
inside
toilets
+100%
fridge
freezers
+190%
microwave ovens
+130%
washing
machines
+230%
in BRIC alone, by 2020
kitchen
sinks
+115%
Source: CMI
1 1 2 2 3
5 5
13 14
17
20
Vietnam Indonesia China India Turkey Mexico Argentina Australasia Brazil USA United Kingdom
Example: market development bath & shower
US$ spend per capita
Source: Euromonitor
Developed markets
Emerging markets
Example: developing our markets by increasing frequency of consumption
France Indonesia Nigeria
Oral Care Market Development Model
Most 100M+ population countries will be in emerging markets (13 out of 15) by 2020
Source: Unilever Estimates from Globegro
US
Japan
Mexico
Brazil
Vietnam
Indonesia
India Philippines
Russia
China Pakistan
Bangladesh Ethiopia Nigeria
Egypt
from 1 million (2010) to 3 million (2012)
GT MT
5m prefect stores by 2020
“Perfect Stores”: emerging markets ambition
Sustainable Palm Oil
Rainforest alliance
Empowering Women
Hygiene for all
Access to Clean Water
Less Water
Sustainability Unilever leads the agenda in emerging markets
Financial Performance, Governance and Shares 7
A more competitive Unilever
3.5% 4.1%
6.5%
2009 2010 2011
Strong growth Growth acceleration in emerging markets
2.0% 2.2%
USG
Value shares improving
USG
8.1% 7.9%
11.5%
2009 2010 2011
2.0% 2.2%
bps change
10
20
FY 2011 L12 w
Commitment to shareholder value
0
7
14
21 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
“… our road to sustainable, profitable growth, creating long term value for our shareholders, our people, and our business partners” extract from Unilever’s Corporate purpose
Unilever measures its Total Shareholder Return, over a 3 year rolling period, amongst a peer group of 20 other companies
Peer group in 2011
• Avon
• Beiersdorf
• Campbell
• Coca-Cola
• Colgate
• Danone
• General Mills
• Heinz
• Henkel
• Kao
• Kellogg‟s
• Kimberly-Clark
• Kraft
• L‟Oréal
• Nestlé
• Pepsico
• Procter & Gamble
• Reckitt Benckiser
• Sara Lee
• Shiseido
Unilever‟s TSR position relative to the peer group over a rolling 3 year period
Unilever was formed in 1930 from two companies:
It was a full business merger, operating as a single business entity
Two separate legal parent companies were maintained:
- Unilever NV (Netherlands) and Unilever PLC (UK).
This works through an equalisation agreement and other contracts between the two companies
Legal structure, governance and shares
Margarine Unie (Netherlands)
Lever Brothers (UK)
NV shareholders PLC shareholders
NV PLC Equalisation and other agreements
NV owned operating companies
Legal structure
Unilever NV and PLC have separate legal identities but operate as a single entity
Jointly owned operating companies PLC owned operating companies
Directors
Legal structure
These have evolved in response to developments in Europe (UK Combined Code, Dutch Corporate Governance Code) and
the US (Sarbanes Oxley, NYSE listing rules)
Unilever operates a unified board: the boards of NV and PLC comprise the same directors
There is a majority of independent, non-executive directors on the board. The Chairman is non-executive
The boards have ultimate responsibility for the business as a whole
Details of current arrangements can be found in the report and accounts in the investor centre at
www.unilever.com/investorrelations
Unilever firmly believes in maintaining high standards of Corporate Governance
Share listings
• Unilever NV ordinary shares or certificates (depositary receipts) are listed on the stock exchanges in Amsterdam and as
New York Registry shares on the New York Stock Exchange.
• Unilever PLC ordinary shares are listed on the London Stock Exchange and as American Depositary Receipts in New York.
Each ADR represents 1 underlying ordinary PLC share.
• There are 1,714,727,700 NV ordinary shares in issue, each with a nominal value of €0.16.
• There are 1,310,156,361 PLC ordinary shares in issue, each with a nominal value of 3 1/9 pence.
• The equalisation agreement between NV and PLC is such that each NV ordinary share has the same rights and benefits as
each PLC ordinary share.
• The combined share count excluding treasury stock, for calculating basic EPS, was 2,816 million at the end of 2011
• The combined share count excluding treasury stock, for calculating diluted EPS, was 2,908 million at the end of 2011
Further information can be found in the investor centre at www.unilever.com
Share listings
Exchange
Share
Ticker
Cash payment per share 2011
Amsterdam
Unilever NV
UNA
€0.88
London
Unilever PLC
ULVR
£0.77
New York
Unilever NV NY
UN
$1.24
Unilever PLC NY
UL
$1.24
Share listings and ownership
Share listings as a percentage of identified capital Share ownership by country at the end of 2011
Netherlands 7%
USA 25%
NV NY 9% UK
30%
PLC 39%
Other 38%
NV 47%
PLC ADR 5%
An attractive and growing dividend
€0.88
Dividend payout 1979 - today 8% CAGR
1979 1989 1999 2011
Contact Information 8
Further information and contact details
The IR team can be contacted by telephone as follows: + 44 (0) 20 7822 6830 Or by e-mail at: [email protected]
The shareholder centre at www.unilever.com/investorrelations gives information on how to
purchase Unilever stock
More information on Unilever is available at www.unilever.com/investorrelations
Download the Unilever IR app for the iPhone and iPad