Unilever Brands

Part
01
of three
Part
01

Company Analysis - Unilever: Performance

The Unilever Annual Report and Accounts 2018 Highlights provides the information about Unilever's performance over the past five years. This includes the three major divisions of Beauty and Personal Care, Home Care, and Foods & Refreshment. The performance has been given in terms of turnover, turnover growth, operating profit, operating margin, and underlying operating margin. Brands that are succeeding include Dove, LifeBuoy, Vaseline, Brooke Bond, Rin, some ice cream brands, and Ben & Jerry's. Brands that are struggling are Marmite & Magnum ice cream, Axe, Sunlight, Caress body wash, Fair & Lovely, & Dove.

THE PAST FIVE-YEAR PERFORMANCE OF UNILEVER'S THREE MAJOR DIVISIONS

2014

TURNOVER
TURNOVER GROWTH
  • We found the turnover for 2014 and that of 2013 from the source. We subtract the two and divide the answer with the turnover from the older year. We then get the answer.
  • Beauty & Personal Care: 0%
  • Home Care: 2%
  • Foods & Refreshment: -1%
OPERATING PROFIT
OPERATING MARGIN
  • Beauty & Personal Care: 18.4%
  • Home Care: 6.3%
  • Foods & Refreshment: 19.2%
UNDERLYING OPERATING MARGIN
  • Beauty and Personal Care: 19.7 %
  • Home Care: 7.1%
  • Foods & Refreshment: 15.6%

2015

TURNOVER
TURNOVER GROWTH
  • We found the turnover for 2014 and that of 2015 from the source. We subtract the two and divide the answer with the turnover from the older year. We then get the answer.
  • Beauty and Personal Care: 1.6%
  • Home Care: 9.8%
  • Foods & Refreshment: 7.5%
OPERATING PROFIT
OPERATING MARGIN
  • Beauty and Personal Care: 18.1%
  • Home Care: 7.3%
  • Foods & Refreshment: 13.6%
UNDERLYING OPERATING MARGIN
  • Beauty and Personal Care: 19.7%
  • Home Care: 8.4%
  • Foods & Refreshment: 15.2%

2016

TURNOVER
TURNOVER GROWTH
  • Beauty and Personal Care: 0.5%
  • Home Care: 1.5%
  • Foods & Refreshment: 2.2%
UNDERLYING SALES GROWTH
  • Beauty and Personal Care: 4.2%
  • Home Care: 4.9%
  • Foods & Refreshment: 2.7%
OPERATING PROFIT
OPERATING MARGIN
  • Beauty and Personal Care: 18.4%
  • Home Care: 9.5%
  • Foods & Refreshment: 14.0%
UNDERLYING OPERATING MARGIN
  • Beauty and Personal Care: 20.0%
  • Home Care: 10.9%
  • Foods & Refreshment: 15.6%

2017

TURNOVER
TURNOVER GROWTH
  • Beauty and Personal Care: 2.6%
  • Home Care: 5.6%
  • Foods & Refreshment: 0.4%
UNDERLYING SALES GROWTH
  • Beauty and Personal Care: 4.2%
  • Home Care: 4.4%^
  • Foods & Refreshment: 2.7%^
OPERATING PROFIT
OPERATING MARGIN
  • Beauty and Personal Care: 19.8%
  • Home Care: 10.8%
  • Foods & Refreshment: 16.1%
UNDERLYING OPERATING MARGIN
  • Beauty and Personal Care: 21.1%
  • Home Care: 12.2%
  • Foods & Refreshment: 16.7%

2018

TURNOVER
TURNOVER GROWTH
  • Beauty and Personal Care: 0.3%
  • Home Care: 4.2%
  • Foods & Refreshment: 9.9%
UNDERLYING SALES GROWTH
  • Beauty and Personal Care: 3.1%^
  • Home Care: 4.2%^
  • Foods & Refreshment: 2.0%^
OPERATING PROFIT
OPERATING MARGIN
  • Beauty and Personal Care: 20.0%
  • Home Care: 11.5%
  • Foods & Refreshment: 35.8%
UNDERLYING OPERATING MARGIN
  • Beauty and Personal Care: 21.9%
  • Home Care: 13.0%
  • Foods & Refreshment: 17.5%

RECENT NEWS WITHIN THE THREE MAJOR DIVISIONS

  • Unilever's purpose-led Sustainable Living Brands are growing at a rate of 69% faster than the rest of the business.
  • They are also delivering 75% of growth in the company.
  • This growth of the Sustainable Living Brands was much higher than that in 2017 which was 46%.
  • Brands such as Dove, Vaseline, and Brooke Bond are creating a huge impact in addressing environmental or social issues.
  • Dove has helped over 35 million youth around the world with education on self-esteem since 2005.
  • Lifebuoy has reached one billion people with hand washing campaigns.
  • Vaseline has reached 3 million people who are living in poverty through skin healing programs.
  • Rin has a Career Academy that works with women across rural India.
  • Ben & Jerry's campaigns for social justice.
  • However, brands such as Marmite and Magnum ice-cream have been issued with warnings that they will be sold off by Unilever since they do not contribute positively to society.
  • Manufacturers of brands such as Axe, Magnum, and Sunlight had a turnover growth of 2.9% compared to the +3.5% which had been calculated by analysts.
  • Ice cream brands had the biggest success in Western markets because of the hot summer.
  • However, rising competition also challenged these brands in the United States.
  • Caress body wash brand is struggling but the company is trying to fix it.
  • Unilever was accused of insensitivity because of a Dove ad that showed a black woman morphing to white after using its body lotion.
  • Unilever's ownership of the Fair & Lovely skin whitening brand has also put the company in jeopardy.


Part
02
of three
Part
02

Company Analysis - Unilever: Management Changes

There were two dates in the past two years in which Unilever made significant management changes. Those dates were March 14, 2019, and November 29, 2018. Unilever’s appointments of a new CEO and COO were the most notable leadership changes.

MAJOR UNILEVER MANAGEMENT CHANGES

MARCH 14, 2019

  • The former President of Foods & Refreshments, Nitin Paranjpe, was appointed as Chief Operating Officer (COO).
  • Also, the former President in Europe, Hanneke Faber, took on the newly opened role of President of Foods & Refreshments.
  • The President in Home Care, Kees Kruythoff, left Unilever to pursue other ventures after 27 years with the company.
  • The former Chief Digital Officer and EVP of South East Asia & Australasia (SEAA), Peter Ter Kulve, was appointed as the new President in Home Care.
  • Unilever's role of EVP of South East Asia & Australasia (SEAA) and President in Europe was discontinued.
  • The former EVP in South Asia, Sanjiv Mehta, was promoted to President in South Asia. He also joined the Unilever Leadership Executive team.

NOVEMBER 29, 2018

  • After being the CEO of Unilever for more than 10 years, Paul Polman, retired from his position.
  • Alan Jope was appointed as the new CEO of Unilever.

OTHER UNILEVER MANAGEMENT CHANGES

  • Sunni Jain was elected as President in Beauty & Personal Care and will be a member of the Unilever Leadership Executive (ULE).

RESEARCH STRATEGY

Your research team reviewed the press releases from the last two years that were related to leadership changes within the organization. Any significant leadership changes that were found were then searched on other media outlets to determine the media coverage on those changes.

For changes related to March 14, 2019, there were several articles published about these management changes. Some publishing media outlets were the Times UK, Livemint, and Webwire.

For changes related to November 29, 2018, there were several articles published about CEO leadership changes. Some publishing media sites were the New York Times, Financial Times, and Market Watch.
Part
03
of three
Part
03

Company Analysis - Unilever: External Factors for Success or Failure

The reaction of consumers to Unilever's Sustainable Living Plan, anti-stereotyping campaign, and blogging support for a social program for the homeless have all contributed to its success. Its immoral, illegal and ethical practices with palm oil production, child labor and slavery and corruption have all resulted in press that has caused Unilever to be seen as a failure.

External Factors — Success

UNILEVER SUSTAINABLE LIVING PLAN
  • Customer uptake of Unilever's Sustainable Living Brands has been a key to their success.
  • According to Unilever's recently departed CEO, "The USLP is a value driver in its own right. Our commitment to the USLP's three big goals of improving health and well-being for more than 1 billion people by 2020, halving our environmental footprint by 2030, and enhancing livelihoods for millions by 2020 has delivered growth for the business."
  • "In 2016, 18 of our top 40 brands qualified as Sustainable Living brands, growing 50% faster than the rest of the business, while delivering more than 60% of Unilever's growth. Their success is driven by the growing consumer demand for brands that have a purpose at their core. "

STEREOTYPING
  • Consumers, especially GenZ's, react negatively to ads they perceive as stereotypical. They only trust large corporation when they prove they are acting according to their principals.
  • Unilever has proven itself to consumers in its attempt to minimize or eradicate stereotyping in its advertisement.
  • Based on data and insights from Kantar Unilever understood that "unstereotypical advertising creates 37% more branded impact, 28% uplift in purchase intent and increases the enjoyment of ads by 35%. "
  • Customers have responded well to campaigns based on many social issues, including:
1) smashing gender stereotypes;
2) championing "acceptance and social inclusion of all with campaigns that take on topics as diverse as dwarfism, mental health, homosexuality, outdated traditions and religion";
3) inspiring youth and combating ageism with their "Never Stop Playing" campaign;
4) promoting equal parental responsibility by giving $5000 per family to a father who can't afford to take paternity leave, to name just 4 of the 12 campaigns.
  • They have been continuously working to ensure their campaigns respond to the external forces of stereotyping by ensuring their "campaigns defy outdated and harmful cultural norms and instead are underpinned by inclusive, diverse and progressive portrayals of people to inspire, support and empower the audiences we reach."
BLOGGING
  • Unilever hosts a website called Right To Shower.
  • Social activists write some blogs on a variety of issues, including homelessness, sustainability, water usage, environmentally aware gift giving and more.
  • Some blogs promote Unilever products with donations per purchase going to the Right to Shower movement, which provides mobile shower facilities for homeless people.

External Factors — Failures

PALM OIL
  • Greenpeace has criticized Unilever repeatedly for the deforestation caused by the palm oil trade in Indonesia.
  • First in 2013, and again in September 2018, Unilever is complicit with Wilmar International in damaging Indonesia's rain forests.
  • Half of the Bornean orangutan population has died from homelessness and starvation in just 16 years.
  • There has been significant press coverage in England, where Unilever is headquartered.
  • These actions can be categorized as a significant failure on the part of Unilever.
CHILD LABOR ISSUES
  • Unilever's relationship with Wilmar is not only causing lousy press about the impact of its palm oil, but also concerning Wilmar's hiring practices.
  • Amnesty International has reported that Wilmar has been profiting from both child labor from 8-14-year-olds and forced labor, i.e. slavery.
  • Wilmar also has unsafe working conditions with some workers being exposed to toxic chemicals.
  • The EU has initiated an anti-slavery initiative, and the accompanying press has not helped the Unilever brand.
CORRUPTION
  • In March 2017 the South African Competition Commission recommended the prosecution of Unilever for corruption. They were found guilty of "colluding with margarine producer Sime Darby Hudson Knight to avoid competing with each other in the spreads and oils market" from 2004 to 2013.
  • In 2018, the Commission approved the sale of Unilever South Africa to another company but insisted that part of the agreement be that Unilever is still responsible for paying any fines levied. The hearing is scheduled for September 17, 2019. An adverse judgment is expected and will cause even more bad press for Unilever.


Sources
Sources

From Part 01
Quotes
  • "Our Annual Report and Accounts provides further detail on our performance during the year and how our business model is delivering strong returns for shareholders and a more sustainable way of doing business for the benefit of all our stakeholders."
Quotes
  • "The following pages give selected financial and non-financial information, expressed in graphical form."
  • "The Group has revised its operating segments to align with the new structure under which the business is managed. Beginning 2018, operating segment information is provided based on three product areas: Beauty & Personal Care, Foods & Refreshment and Home Care."
Quotes
  • "Unilever’s Sustainable Living Brands include Dove, which has helped over 35 million young people around the world with self-esteem education since 2005; Lifebuoy, which has reached one billion people with its handwashing campaigns; Vaseline, which has reached 3 million people living on the frontline of poverty and disaster with skin healing programmes."
  • " Ben & Jerry’s, which campaigns for social justice and climate change, and Rin whose Career Academy works with women across rural India, through mentoring and careers fairs."
Quotes
  • "Unilever has warned it will sell off brands that do not contribute positively to society, with British favourite Marmite and Magnum ice-cream among the big names thought to be vulnerable to a cull linked to the company’s sustainable business agenda."
Quotes
  • "The manufacturer of brands like Axe, Cornetto, Dove, Magnum and Sunlight saw its turnover grow 'just' 2.9 %, considerably less than the + 3.5 % analysts were hoping for."
Quotes
  • "Two years ago, Unilever itself was accused of insensitivity over a Dove ad that showed a black woman apparently morphing to white after using its body lotion, and its ownership of the Fair & Lovely skin-whitening brand has also put it in the firing line."