unilever business analysis brief
TRANSCRIPT
Unilever Business AnalysisIntroduction
Unilever is one of the leading food, home care and personal care product manufacturing and
distributing FMCG (Fast moving consumer goods) companies in the world. Unilever’s
products are retailed in most parts of the world and it has manufacturing setup in 70
countries. The Unilever group operates in European, American, Asian and African continents
and employed 163,000 people. Unilever operates in four business segments namely, Savory,
Dressings and Spreads; Ice Cream and Beverages; Personal Care; and Home Care and Other.
Unilever recorded revenues of EUR 39.8 billion in December 2009 while operating profit
was EUR 5 billion. Both sales and profit showed significant decrease as compared to FY2008
(“Datamonitor” 2010).
A new innovation driver program called Genesis Program was developed in 2009. This
program spans the entire foods, home and personal care categories aiming to spark
breakthrough ideas that could drive the market share higher – some of the innovative
products from this program would launched in 2011. Unilever has 6 R&D laboratories spread
in Europe and now in India and China and it recently opened a new R&D center in China
(“Global Data” 2010)
Unilever (UL) Performance over the years
Although Unilever has performed well historically its last year performance was less than
satisfactory compared to its historical performance. ROA and Return on invested capital both
dipped sharply in FY09; gross profit margin and operating margin didn’t suffer significantly.
Leverage ratios on the other hand point out. Times Interest Earned ratio has decreased from
more than 15 to around 11 in 2009. This ratio assesses the current ability of Unilever to meet
its interest payments- this ratio has gone down severely. Similarly Cash Dividend Coverage
ratio has decreased from average of 2.07 from 2005 to 2009 to 1.82 in 2009. Although
current ratio shows improvement it is still less than 1, hence a point for concern. A good sign
if decrease in account receivable days which shows improvement in company’s ability to
convert goods into cash. Appendix lists all major balance sheet and income statement ratios.
Ratios for 2009, while comparing trend, indicate that company is not in good shape but we
have to look at events to understand the rationale behind impaired performance in 2009. The
sales for 2009 had improved by almost 30% looking at 5 year growth rates and liabilities
have reduced by 13% while assets have also reduced but by 6% comparing 2009 with 2008;
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similarly year on year sales have improved by almost 11%, so negative ratios do not tell the
whole story.
Scaling Factor : 1000000 GBP
TREND 12/31/09 12/31/08 12/31/07 12/31/06 12/31/05 12/31/04
Sales 35,347.69 31,932.12 27,407.53 27,035.84 27,123.75 27,238.60Operating Income After Depreciation 5,226.31 4,647.62 3,965.15 3,853.30 4,024.26 3,520.70NetIncome 2,991.28 3,961.28 2,597.06 2,329.03 2,251.42 1,253.13
Net Cash Flow From Operating Activities 4,915.64 2,858.86 2,499.53 2,835.07 2,669.85 3,362.02
Net Cash Flow From Investing Activities 1,364.27 -928.26 652.67 -620.62 -218.78 493.66
Net Cash Flow From Financing Activities -3,364.97 -2,088.20 -1,680.45 -4,073.59 -2,856.50 -3,393.89
TotalAssets 32,464.71 34,602.28 27,024.41 24,566.65 26,156.64 23,258.42
TotalLiabilities 21,237.57 24,344.54 17,524.25 16,651.54 20,055.24 19,090.54
5 Yr GROWTH RATES 12/31/09 12/31/08 12/31/07 12/31/06 12/31/05 12/31/04
Sales 29.77% 8.24% -9.59% -15.62% -6.40% 0.91%
NetIncome 138.70% 109.60% 98.15% 109.54% 248.44% -30.84%
Net Cash Flow From Operating Activities 314.72% -116.84% 2109.91% -39.07% -0.15% 49.07%
TotalAssets 39.58% 30.92% -4.14% -21.61% -25.16% 40.08%
Currency: GBPSource: ThomsonFinancial
PROFITABILITY RATIOS 12/31/09 12/31/08 12/31/07 12/31/06 12/31/05
Return On Assets 9.87 13.82 11.45 13.99 11.37
Return On Invested Capital 16.13 22.66 19.55 24.99 20.33
Gross Profit Margin 47.90 49.06 49.91 49.49 48.69
Operating Profit Margin 14.79 14.55 14.47 14.25 14.84
LEVERAGE RATIOS 12/31/09 12/31/08 12/31/07 12/31/06 12/31/05
Total Capital Pct Total Assets 55.22 47.27 49.71 43.80 40.35
Dividend Payout 62.49 41.50 56.12 54.84 47.61
Cash Dividend Coverage Ratio 1.82 1.82 1.67 1.56 2.07
Working Cap Pct Total Capital -2.38 -14.14 -17.56 -24.69 -25.48
LIQUIDITY RATIOS 12/31/09 12/31/08 12/31/07 12/31/06 12/31/05
Quick Ratio 0.58 0.50 0.40 0.37 0.38
Current Ratio 0.96 0.83 0.76 0.72 0.75
Accounts Receivable Days 32.88 37.71 37.60 36.36 36.55
Inventories Days Held 72.68 78.34 75.39 75.27 74.88
Currency: GBPSource: ThomsonFinancial
Ratios are by themselves not very useful unless benchmark is used to gauge efficiency. UL’s
dividend yield is more than industry average while dividend growth rate is negative – a cause
of concern, especially when industry is showing a 4.5 % growth while sector shows 7.2%
growth rate, even EPS growth is almost half that of S&P 500. Even profitability is well below
industry averages with operating margin TTM and 5 year average trailing behind industry,
sector and S&P 500 rates. Of significant concern is revenue per employee which is almost
one fourth that of S&P 500 and less than half of industry averages. These indicators show
that UL is due for drastic cost management and margin improvement exercise if it is to
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maintain its stellar status. Although UL has decreased its employees from 174,000 to 163,000
the revenue per employee suggests a further impending cut in headcount.
Peer and Competitors’ Comparison
I ndustry Sector
(Food Processing)
(Consumer/ Non-Cyclical)
P/E ratio, 5-Yr High -- 28.43 31.70 32.34
P/E ratio, 5-Yr Low -- 12.79 13.16 10.37Beta, 5 Years 0.63 0.56 0.67 1.00
Dividend Yield 3.10 3.00 3.24 2.47Dividend Yield, 5-Yr Average 0.60 2.65 2.64 2.04Dividend 5-Yr Growth rate (0.35) 4.50 7.20 4.40Payout TTM 64.23 41.35 46.47 27.87
Revenue, 5-Yr Growth 1.39 6.54 5.76 9.52EPS, 5-Yr Growth 6.83 6.42 6.79 11.36
Gross Margin 48.32 33.49 44.45 44.61Gross Margin, 5-Yr Average 48.58 32.16 44.44 44.58Operating Margin TTM 13.25 12.23 17.53 19.43
Operating Margin, 5-Yr Average 14.06 11.34 16.95 18.26
Revenue per Employee TTM 213,183 584,252 603,267 841,509Net Income per Employee TTM 21,607 39,183 74,967 108,129Receivables Turnover TTM 8.58 12.05 11.91 10.90Inventory Turnover 5.51 7.53 7.22 13.07
Source: Reuters
Profitability Ratios
Efficiency
Valuation Ratios
Dividends
Growth Rates
Company S&P 500
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Peer set by ICB Subsector [ Click to select new peer set ]
Key Financials (in millions)
CompanyUnilever PLC Peer Weight
Peer Aggregate Peer Mean Peer Median
Peer Std Dev
QuoteSymbol ULVR-LN
Current Sale USD 57,104.55 13.79% 414,148.50 51,768.56 49,489.41 22,368.72
Current EBITDA USD 9,034.55 19.05% 47,414.57 5,926.82 5,008.50 4,786.16
Current EBIT USD 7,573.94 19.74% 38,368.11 4,796.01 4,178.00 3,935.75
Current Net Income USD
Current Market Cap USD 79,407.58 17.90% 443,529.67 55,441.21 40,153.71 51,530.96
Current Total Assets USD
Current Total Liabilities USD 34,295.48 16.42% 208,823.26 26,102.91 26,190.74 15,859.04
Current Common Equity USD 17,285.12 11.97% 144,384.54 18,048.07 15,392.02 12,620.63
Net Cash & Equiv CF Stmt USD 53.03 5.16% 1,028.17 128.52 53.06 456.07
Free Cash Flow Per Share USD 0.24 -5.15% -4.74 -0.59 0.24 2.93
Company
Archer-Daniels-Midland Company
Bunge Limited
Kraft Foods Inc Nestle SA
Tyson Foods Inc
Unilever NV
QuoteSymbol ADM-N BG-N KFT-N NESN-VX TSN-N UNA-AECurrent Sale USD 69,213.00 41,926.00 40,386.00 97,083.88 26,738.00 57,052.82
Current EBITDA USD 3,549.00 871 6,468.00 15,431.67 284 9,043.00
Current EBIT USD 2,819.00 428 5,537.00 12,172.56 -212 7,581.03
(“Thomson Research”, 2010)
Key Financials (in millions)
CompanyUnilever PLC Peer Weight
Peer Aggregate Peer Mean Peer Median
Peer Std Dev
QuoteSymbol ULVR-LN
Current Sale USD 57,104.55 25.03% 228,161.10 32,594.44 19,445.49 23,441.67
Current EBITDA USD 9,034.55 19.99% 45,198.15 6,456.88 3,972.00 5,839.79
Current EBIT USD 7,573.94 20.56% 36,842.64 5,263.23 3,621.00 5,039.33
Current Net Income USD
Current Market Cap USD 79,407.58 19.10% 415,767.57 59,395.37 38,384.18 52,349.41
Current Total Assets USD
Current Total Liabilities USD 34,295.48 21.70% 158,068.80 22,581.26 13,088.03 21,874.73
Current Common Equity USD 17,285.12 14.17% 121,942.60 17,420.37 9,275.04 18,997.81
Net Cash & Equiv CF Stmt USD 53.03 1.64% 3,224.52 460.65 137.73 548.9
Free Cash Flow Per Share USD 0.24 1.94% 12.57 1.8 2.21 0.9
Company
Colgate-Palmolive Company
Henkel AG & Company Kgaa Kao Corp.
Kimberly-Clark Corp. L'Oreal
The Procter & Gamble Company
QuoteSymbol CL-N HEN-FF 4452-TO KMB-N OR-FR PG-NCurrent Sale USD 15,327.00 19,445.49 13,107.77 19,115.00 25,032.30 79,029.00
Current EBITDA USD 3,972.00 2,098.99 1,877.89 3,637.00 4,873.72 19,704.00
Current EBIT USD 3,621.00 1,502.15 992.38 2,854.00 3,677.17 16,622.00
(“Thomson Research”, 2010)
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Looking at two selection of peer companies we see that Nestle leads in sales while Kraft
foods is placed at USD 40 billion while P&G also has revenues of almost USD 80 billion
If we look at distribution of revenues across business segments savory and dressings is the
most profitable segment followed by personal care while home care has been showing
negative growth over last two years. We see that 2009 performance led to improved market
standings as price movements of UL’s shares show. By July 2010 UL had recovered almost
all of the lost value compared to 2006 standards.
Performance via Business and Geographic Segments
(“Factiva” 2010)
12/31/2009EUR
12/31/2009EUR
% chg12/31/2008
EUR
12/31/2008EUR
% chg12/31/2007
EUR
12/31/2007EUR
% chg
13,256.0 - - - - -
11,846.0 4.1 11,383.0 0.7 11,302.0 1.6
7,753.0 0.8 7,694.0 1.2 7,600.0 0.3
6,968.0 (3.4) 7,214.0 (1.1) 7,297.0 1.7
- - 14,232.0 1.7 13,988.0 1.6
Home Care & Other
Savoury, Dressings & Spreads
Savoury & Dressings
Personal Care
Ice Cream & Beverages
Business Segment
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(“Thomson One”, 2010)
Similarly sales wise Asia Pacific seems most promising with positive growth while Europe
was performing significantly below potential. Asia Pacific had outstanding 25% growth in
2008 and even in 2009 the growth, though comparatively very low still continued. The low
growth in 2009 may be due to overall economic depression however better performance
should be expected from 2010.
12/31/2009EUR
12/31/2009EUR
% chg12/31/2008
EUR
12/31/2008EUR
% chg12/31/2007
EUR
12/31/2007EUR
% chg
14,897.0 2.9 14,471.0 25.4 11,540.0 6.2
12,850.0 (2.6) 13,199.0 (1.8) 13,442.0 (2.4)
12,076.0 (6.0) 12,853.0 (15.5) 15,205.0 1.4
Asia Pacific
Americas
Europe
Geographic Segment
(“Thomson One”, 2010)
Looking at performance over 2010 second half we see the positive trend continuing with
Asian region outshining Americas and Europe; however the negative slide in Europe has
been arrested.
(“Thomson Research”, 2010)
Further the distribution of revenues has changed across the business segments with personal
care segment showing higher growth rate than Savory, Dressing and Spreads category, and
even Ice Cream category is showing a healthy 5% growth over mid year.
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(“Thomson Research”, 2010)
UL has diversified revenue streams with large scale of operations and a strong portfolio of
brands. In FY09 savory and dressings contributed one third of the total revenues; another
strong factor in UL’s favor is its presence in over 170 countries with US contributing 16 % of
the revenues and UK/Netherlands contributing 8.5% to the total revenues. UL has
manufacturing facilities spread over 6 continents and has 400 brand names distributed across
14 categories of home, personal care and food categories. Global scale of operations has
enabled UL to achieve leadership positions with top positions in savory and dressings and
laundry segments globally and its large scale operations allow cost advantages and economies
of scale. Its brand names Knorr, Lipton, Blue Band and many others are universally
recognized. Strong brands allow meeting customer requirements at several price levels thus
effectively catering to higher and lower tier customers. UL maintains dedicated focus on
environmental issues helping it to maintain sector’s leading position on Dow Jones
sustainability for last 11 years.
On the down side UL has shown decreased liquidity for last year with current asset ratio less
than 1 showing inability to meet all of its fiscal requirements in short term. UL’s cash and
equivalents stood at EUR 2.6 billion barely enough to cover short term borrowing of EUR 2.3
billion and non availability of cash for other working capital needs. Current assets are mostly
tied up in inventories and receivables showing lack of immediate liquidity so operational
efficiency might be affected forcing group to increase borrowings to maintain working capital
requirements or exercise financial discipline – in both cases the growth initiatives would be
affected. Europe continues to be a sore point over 6 percent decline in revenues in 2009 and
1.1 % in first half of 2010. Europe’s performance might affect or put pressure on group’s
performance in other regions.
In FY2008 UL launched steps to streamline its management structure with increased focus of
developing markets and reduction of 20,000 jobs across its segments to improve cost
efficiency. Further UL further developed its partnership with PepsiCo for marketing and
distribution of ready to drink products as non alcoholic ready to drink beverage market is
expected to grow faster than world’s GDP and reach USD 650 billion. Latest agreement with
PepsiCo aims to capture more of the growth opportunities from ready to drink tea market.
Developing markets pose biggest opportunity as 49% of revenues came from Asia Pacific,
Africa, Middle East, Turkey, and Latin America region in 2009. Also shifting a large portion
of R&D resources to China and India in 2008 is expected to decrease R&D costs and help
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expansion in developing economies. Both Chinese and Indian FMCG market are expected to
grow multifold as the respective population booms – so UL could be in a position to exploit
these regions opportunity in the coming years. Divesture of non core business in 2008 and
2009 allowed UL to generate cash for increasing focus on consumer business. Global food
industry is expected to reach USD 2.2 trillion by 2015 driven by outside home food market
and UL with Foodsolutions subsidiary is well positioned to tap this burgeoning market.
Economic downturn has affected customer demand forcing customers to focus on cheaper
brands plus supermarkets own brand initiatives is likely to hurt customer demand for UL
products, so UL is unlikely to sustain higher margins it enjoyed in the past because of
pressure from low cost competitors. Many consumer protection groups are voicing concerns
over carcinogenic composition ingredients of many of the cosmetic products.
Regulatory pressures are therefore likely to affect UL cost of sales as increasing public
pressure over composition of cosmetic products will force reformulation of many cosmetic
products without carcinogenic constituents increasing cosmetics’ production costs. Further
public pressures over hazardous wastes is also likely to increase cost of products as
companies like UL take measures to combat noxious wastes (“Datamonitor” 2010).
Operating Regionally or Globally
Filippaios and Rama (2007) analyze multinational firms strategy for operation. They argue
that not all multinationals have global strategy rather a mixture of local and global strategies.
Western F&B markets are suffering from lack of young populace with declining income
elasticities and increasing preference for organic produce coupled with increasing
competition from retailer’s own brands. Authors argue that only three firms (Kellog, Procter
& Gamble and Nestle´) have truly global strategies for both of their food and non food lines
of business. Unilever according to these authors has home region strategy for food line of
business while its non food line is served with bi-regional strategy for EU and Asia. Authors
contend that Multinationals would initially pursue home region strategy then a bi-region
strategy and finally as international sales take lead a global strategy may be pursued. Another
reason for pursuing regional strategy might be different behavioral symptoms of global
markets than local ones. Global markets of India and China, which might dominate rest of the
world, would be driven by higher degree of cost consciousness but driven by higher volumes
to make up for lower margins. According to Yip, Rugman and Kudina (2006) international
success is depicted by total revenues rather than exports per se. Also total profitability is a
better measure than productivity that leads to profits. In contrast to US where multinational
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like Wal-Mart derives bulk of its revenues from domestic sources UK firms, have
comparatively smaller home economy and must therefore look outside and thus for a British
company to be successful it has to be significant international player and international
revenues would deem success of such a company. Company success can be interpreted
differently by stakeholders. Also growth rates can be misleading for measuring growth over
different time periods may provide different metrics each of which might be quite different
from other especially if there has been a major change in company performances, be it
because of internal or environmental reasons. Companies spend significant portion of their
sales as advertising expenditure in order to rise above media clutter and achieve recognition
for respective brand. Media planner needs to consider all the information available on the
product and decide on that basis how best to reach audience through respective advertising
media. P&G spends more than 15% of its sales revenue on advertising while UL spends only
half as much.
(Doyle 2008 p301)
Similarly we can see how much P&G spends, compared to UL, as a percentage of operating
profit on advertising (Doyle 2008). He further opines that companies like UL have now been
able to tailor its advertising on individual customers. This is done by taking a small sample of
consumers and interviewing them about their attitudes, buying processes and strategies and
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the results filtered through demographic and lifestyle variables. Thus the consumers would be
clustered or factored into limited market segments following which products would be
targeted and communicated using identified market segments. Hence some consumers’ needs
would be met while some might be missed – depending on the size and true representation of
sample over target population the market segments would thus be a close or loose fit over the
possible target market (Doyle 2008 p337).
(Doyle 2008 p302)
UL and P&G
This industry will require continually keeping up with changing wants and needs of the
consumer in order to remain competitive in this industry hence the need for investment in
research and development becomes even more important. Increasing M&A will make the
industry more consolidated while cost and raw material availability would favor smaller firms
over larger conglomerates. P&G reported revenues of USD 79 billion with much more
limited set of brands than UL’s portfolio. It has employees half that of UL and is world leader
in most of the categories in which it competes. P&G has very strong R&D which gives it
competitive advantages. P&G’s large scale operations give it first mover advantage and
economies of scale that are unmatched by many smaller operators. P&G is well known for its
brand management and brand leadership qualities. The above graph shows how liberally
P&G spends on getting its message heard. In contrast to UL which is focusing on shedding
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brands P&G has led mergers and acquisitions remarkably well with successful acquisition of
Clairol, Wella and Gillette, so M&A seems to be well suited for P&G. Active portfolio
management, has been shown to increase stakeholder value. P&G’s R&D has enabled
addition of new lines as well as expansion in current portfolio especially to tailor products for
meting local needs. P&G is actively focusing on expansion in developing countries as well as
driving organic growth in developed countries. P&G's focuses on large-scale operations,
strong product branding, and product innovation to develop competitive advantage as part of
its business strategy. P&G uses CRM and EDI technologies as well as RFID tracking to
provide self feedback and improvement and streamlining processes and reducing costs. P&G
has made substantial investments internationally, using joint ventures, acquisitions and
alliances to improve market understanding. P&G has substantial market knowledge and
leverages insights from local shopper, consumer and use it to generate cross unit business
plans. “Their flattened organizational structure and focus on relationship management with
relevant stakeholders provides for efficient and rapid communications throughout the value
chain”(Graul, Henricks, Olp and Strohecker 2006). P&G has a well developed knowledge
base and riding on innovation P&G has successfully created ability to implement distribution
systems. P&G has been recognized for its early adoption and substantial utilization of
information technology. CIO magazine has recognized P&G for its “Corporate Standards
System application” that allows quicker and efficient collaboration between employees and
partners reducing costs and allowing shorter time cycle for getting products to market place.
“P&G’s strategy and e-business focus is three-fold: “one-to-one communications, real-time
and predictive business intelligence, and ‘virtualization’ of business processes” (Graul,
Henricks, Olp and Strohecker 2006). UL can learn from P&G to pursue careful
acquisitions, cost reduction programs and utilization of IT technologies for streamlining its
processes (Graul, Henricks, Olp and Strohecker 2006).
Growth in UL stocks and turnaround in 2009 has helped change culture at UL “from a
restructuring based growth model to one centered on top-line/volume growth and in-turn
profitability” (Pannuti 2010). The enclosed table shows that in 2009 UL was able to maintain
its market share across the various regions in which it operates.
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(Pannuti 2010)
The new incoming CEO has also been the force behind board changes over past 18 months.
UL should now maintain its cost improvement program which has allowed it to achieve EUR
1.4 billion savings from its initiatives in 2009, similar cost savings in 2010 would allow UL
better margins and more competitiveness and close the gap with major FMCG’s
(Pannuti 2010)
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Building on Strengths and Preparing for the Future
UL ROE for 2009 was 27.9% while its ROE for 2008 was 50.5%. Both of these numbers
were well above S&P averages. This shows that shareholders money is being well utilized
and investor confidence may be high for UL. UL’s brand portfolio is diversified across 400
brands spread across 14 categories of personal care, home and food products. Although the
portfolio is still higher than P&G however this selection of portfolio includes well known
brands like Dove, Rexona, Sunsilk, Pond’s, Lifebuoy and others. Its food products include
Hellmann’s, Wish- Bone, Rama/Blue Band, Amora, Ragu and Bertolli. Ice cream and
Beverages are marketed worldwide under various brands such as Magnum, Cornetto,
and Algida, Ben & Jerry’s, Breyers, Klondike and Popsicle. Tea based beverages include
Lipton, Brooke Bond and PG Tips. Such extensive product lie is helpful in launching new
products and enhancing revenues (“Global Data” 2010).
UL has geographically diversified operations thus spreading and diversifying economic and
political risks. It has been focusing on developing markets through M&A to enhance its
revenue streams. The deal volume has jumped significantly in 2009 which shows that UL is
planning significant expansion and rationalization to improve its market position. Already UL
has strong leadership position I its existent operational markets which gives it strong
springboard to improve from. UL’s strong position helps to attract and retain customer base
and to generate loyalty amongst its customers as well as supporting company’s expansion
plans through its loyal customer base.
UL has strong opportunity in snacks market. Demand for healthy organic and mineral
fortified snacks is increasing rapidly. This increasing market is a strong opportunity for UL to
capitalize on. UL has been indulging into strategic acquisitions and strategic acquisitions
allow UL to not only capture the market quickly but to capitalize on acquired company’s
goodwill to expand operations and consolidate new products under its portfolio. At the same
time UL should divest non performing or non core businesses and use cash for streamlining
operations and investment in R&D for cost efficient solutions. As retailers have started
coming in with their own low cost brands, UL needs to constantly revisit its costs to optimize
margins. UL needs to optimize its E-business strategy learn from competitors like P&G so
that it is able to achieve global efficiencies through electronic transactions and ready
communications with retailers, suppliers and distribution networks.
Investment in consumer research to better differentiate segments and identify all possible
segments is essential. Also important is ensuring that each identified segment is mapped on to
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an appropriate product or product is developed fine tuned to meet segment’s exclusive needs.
This will ensure that competitors do not get segment which do not have mapped UL brands.
Consumer research and data mining to identify trends is important for determining what
inherent characteristics differentiate one group from another. Data mining is very useful for
predicting what will happen but the tools fail to determine when the things will happen if they
do. Data mining is using the existing data to solve problems and discovering patterns in
data. Consumer shopping data might help in eliciting likely reason for customer loyalty and
churn. Also data analysis on same database may identify the reason why customer may be
attracted to other product or service thus allowing development of special targeted offers.
Data is only useful if it can be analyzed or mined, intelligence is about knowing the identity
and acting on signals that analyzed data portrays – it is also acting on information before
everyone else sees the same picture (Chakrabarti et al 2009).
(“Datamonitor Financial Deals” 2010)
As per Mr. Paul Polman the CEO of UL “Looking ahead 2009 was a good year for Unilever
despite the tough conditions. 2010 won’t be any easier, but by embedding the changes we are
already making and by fostering a sharper performance culture, there is no reason why we
can’t go on growing in line with our ambitions” (“Global Data” 2010)
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References
March 2010. Datamonitor Financial Deals. Unilever Plc – Mergers & Acquisitions
(M&A), Partnerships & Alliances and Investments. P-1-151. 151 p
2010. Unilever PLC. [www] http://banker.thomsonib.com/ta/ (06 Aug 2010)
2010. Unilever PLC. [www] http://research.thomsonib.com/ (06 Aug 2010)
2010. Unilever PLC. [www] http://factiva.com/ (06 Aug 2010)
Mar2010. DATAMONITOR: Unilever. Unilever SWOT Analysis. p1-10. 10p;
Sep2009. DATAMONITOR: Unilever. Unilever SWOT Analysis. p1-11. 11p;
Apr 2010. Global Data. Unilever PLC (ULVR) SWOT Profile. P1 -37. 37 p
Chakrabarti, S., Cox, E., Frank, E,, Güting, R, H,, Han, J,, Jiang, X,, Kamber, M,,
Lightstone, S, S., Nadeau, T, P., Neapolitan, R, E., Pyle, D. ,Refaat, M., Schneider, M.,
Teorey, T. J., Witten, I. H.. 2009. Data Mining Know It All. Morgan Kaufmann
Publishers: USA
Doyle, P. 2008. Value-based marketing : marketing strategies for corporate growth and
shareholder value. 2nd ed. John Wiley & Sons, Ltd : UK
Filippaios, F., Rama, R. 2008. Globalisation or Regionalisation. The strategies of the
world’s largest food and beverage MNEs. European Management Journal. Volume 26,
Issue 1. Pages 59-72
Graul, L. A., Henricks, S., Olp, S. and Strohecker, C. 2006. Procter & Gamble, Unilever
and the Personal Products Industry [WWW]
info.umuc.edu/mba/ep/Presentation/EP_Olp/data/GSA.pdf (06 Aug 2010)
Pannuti, C. 2010. J. P. Morgan CazeNove. Unilever NV/Plc. P 1-28. 28 p
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Appendix
CUSIP:SEDOL: B10RZP7
Company Status: Active
Price - 8/8/2010 Shrs Out (th) Mkt Cap (th)1,736.00 2,811,900 50979747
PE Ratio Tot Ret 1Yr Beta
16.95 19.04 0.60
12/31/09 12/31/08 12/31/07 12/31/06 12/31/05 12/31/04
Earnings Per Share 1.07 1.41 0.90 0.81 0.77 0.43
5 Year Average 0.99 0.87 0.71 0.62 0.54 0.432,796.30 2,809.60 2,874.60 2,883.30 1,310.84 1,300.60
1.07 1.41 0.90 1.13 0.88 0.43
Earnings Report Frequency
1 1 1 1 1 1
0.00 0.00 0.02 0.31 0.25 0.00
-0.11
-0.07 0.29 -0.01 -0.13 -0.38 -0.83
Discontinued 0.00 0.00 0.02 0.31 0.25 0.00DVFA EPS (Germany only)
Dividends Per Share 0.41 0.61 0.51 0.47 1.00 0.955 Year Average 0.49 0.49 0.45 0.42 0.87 0.80Dividends Per Share - Gross
0.46 0.67 0.57 0.53 1.11 1.05
Dividend Report Frequency
2 2 2 2 2 2
12/31/09 12/31/08 12/31/07 12/31/06 12/31/05 12/31/04
Price/Earnings Ratio - Close
18.56 11.20 21.02 17.60 16.58 26.22
5 Year Average 16.45 16.91 19.32 20.28 22.88 28.8118.85 13.80 21.37 17.62 17.41 29.85
5 Year Average 17.45 18.34 20.76 22.31 25.68 35.86
11.42 8.85 14.66 13.76 13.94 22.44
5 Year Average 12.05 13.25 15.52 16.81 19.25 22.41
5 Year Average 14.75 15.80 18.14 19.56 22.47 29.14
Earnings Yield - Close
5.39 8.93 4.76 5.68 6.03 3.81
5 Year Average 6.08 5.92 5.17 4.93 4.37 3.47Earnings Yield - High 5.31 7.24 4.68 5.68 5.74 3.35
5 Year Average 5.73 5.45 4.82 4.48 3.89 2.79
Earnings Yield - Low 8.76 11.29 6.82 7.27 7.17 4.465 Year Average 8.30 7.55 6.44 5.95 5.20 4.46
6.61 8.83 5.55 6.37 6.38 3.82
5 Year Average 6.78 6.33 5.51 5.11 4.45 3.43Dividend Yield - Close
2.07 3.84 2.70 3.31 3.52 3.74
5 Year Average 3.00 3.37 3.28 3.34 3.19 2.94
Dividend Yield - High 2.04 3.12 2.66 3.31 3.35 3.29
5 Year Average 2.83 3.11 3.05 3.03 2.84 2.36
Dividend Yield - Low 3.37 4.86 3.87 4.23 4.19 4.37
5 Year Average 4.10 4.30 4.09 4.02 3.80 3.77
2.54 3.80 3.15 3.71 3.73 3.75
5 Year Average 3.35 3.61 3.50 3.46 3.25 2.90
Total Investment Return
28.75 -13.28 36.07 16.54 16.62 1.95
5 Year Average 15.60 10.33 11.44 6.49 3.37 6.48
Dividend Payout Per Share
38.42 43.06 56.77 58.28 58.40 98.12
5 Year Average 49.41 57.02 63.41 67.67 73.05 84.56
12/31/09 12/31/08 12/31/07 12/31/06 12/31/05 12/31/04
Growth
Net Sales/ Revenues 10.70 16.51 1.37 -0.32 3.72 -7.67
5 Year Average 5.35 1.60 -2.00 -3.34 -1.31 0.18
Operating Income 12.45 17.21 2.90 -4.25 2.96 -8.92
5 Year Average 8.22 3.75 1.24 1.43 4.53 3.17
Net Income -24.44 49.33 -18.02 25.47 38.23 -33.35
5 Year Average 18.70 15.76 14.72 23.16 30.86 -6.96
Earnings Per Share -23.86 56.68 10.92 5.01 22.92 -33.28
5 Year Average 19.89 16.76 15.02 16.58 28.85 -5.58
Dividends Per Share -32.07 18.84 8.05 4.80 6.06 5.92
DJ Sector: Consumer, Non-Cyclical
DJ Industry: Food Products
Currency: GBP
UNILEVER PLC100 Victoria Embankment Unilever House
http://www.unilever.com
Exchange: LON
Source: Worldscope
Worldscope Income Statement Ratios ReportSymbol: ULVR (C000017179)
London EC4Y 0DY EC4P 4BQ GBR
Price/Earnings Ratio - High
Earnings Yield - Average Hi-Lo
Dividend Yield - Average Hi-Lo
PER SHARE DATA
STOCK PERFORMANCE
FINANCIAL RATIOS
Common Shares used to calc EPS
Earnings Per Share - As Reported
Extra Cedit(Charge) Per Shr (excl)
Extra Cedit(Charge) Per Shr (incl)
Extra Cedit(Charge) Per Shr (pretax, incl)
Price/Earnings Ratio - Average Hi-Lo
Price/Earnings Ratio - Low
(“Thomson Research”, 2010)
16
CUSIP:SEDOL: B10RZP7
Company Status: Active
Price - 8/8/2010 Shrs Out (th) Mkt Cap (th)
Exchange: LON 1,736.00 2,811,900 50,979,747
PE Ratio Tot Ret 1Yr Beta
16.95 19.04 0.60
12/31/09 12/31/08 12/31/07 12/31/06 12/31/05 12/31/04
Book Value per Share 3.82 3.49 3.19 2.61 4.43 2.20
Tangible Book Value per Share -1.58 -2.15 -1.12 -1.39 -5.14 -6.16
Long Term Liabilities per Share 3.90 3.87 2.63 2.45 7.34 6.77
Working Capital per Share -0.15 -0.83 -0.83 -0.92 -0.93 -0.91
Common Shares Outstanding 2,811,900,000 2,789,075,567 2,853,058,076 2,889,908,346 2,879,372,749 1,442,644,439
Treasury Shares 220,725,638 235,808,494 171,825,985 134,975,715 65,480,089 0
Par Value 0.14 0.16 0.12 0.11 0.01 0.01
STOCK PERFORMANCE 12/31/09 12/31/08 12/31/07 12/31/06 12/31/05 12/31/04
5.22 4.53 5.94 5.48 6.43 11.51
5 Year Average 5.42 5.97 7.00 8.27 9.87 10.89
5.30 5.59 6.04 5.48 6.75 13.10
5 Year Average 5.75 6.48 7.52 9.10 11.08 13.56
Price/Book Value Ratio - Low 3.21 3.58 4.14 4.28 5.40 9.85
5 Year Average 3.97 4.68 5.62 6.86 8.30 8.47
Price/Book Value Ratio-Avg Hi-Lo 4.26 4.58 5.09 4.88 6.08 11.48
5 Year Average 4.86 5.58 6.57 7.98 9.69 11.01
Market Capitalization % Equity 5.22 4.53 5.94 5.48 6.43 11.51
5 Year Average 5.52 6.78 8.02 9.53 10.54 11.07
12/31/09 12/31/08 12/31/07 12/31/06 12/31/05 12/31/04
Total Assets -6.18 28.04 10.00 -6.08 3.58 -12.00
5 Year Average 6.90 5.54 -0.84 -4.75 -5.63 6.97
Equity 10.05 6.93 20.66 31.30 13.80 -8.88
5 Year Average 30.29 25.46 26.19 16.72 6.65 -6.04
Book Value per Share 9.46 9.38 22.22 30.82 14.03 -8.44
Book Value per Share 5 Year Avg 31.03 26.43 26.79 17.17 7.28 -5.46
PROFITABILITY RATIOS 12/31/09 12/31/08 12/31/07 12/31/06 12/31/05 12/31/04
Return on Assets 9.87 13.82 11.45 13.99 11.37 6.54
5 Year Average 12.10 11.43 10.44 9.41 7.70 6.17
Return on Equity - Total 29.30 42.11 31.89 48.76 47.76 41.92
5 Year Average 39.96 42.49 46.73 48.65 44.72 38.37
29.42 42.28 31.07 35.28 41.32 41.97
5 Year Average 35.87 38.38 42.60 44.69 43.47 38.42
Return on Invested Capital 16.13 22.66 19.55 24.99 20.33 11.37
5 Year Average 20.73 19.78 18.16 16.22 12.84 9.96
12/31/09 12/31/08 12/31/07 12/31/06 12/31/05 12/31/04
Total Assets Turnover 1.09 0.92 1.01 1.10 1.04 1.17
5 Year Average 1.03 1.05 1.09 1.10 1.08 1.04
Inventory Turnover 5.02 4.66 4.84 4.85 4.87 4.59
5 Year Average 4.85 4.76 4.79 4.74 4.72 4.63
51.19 51.67 52.51 52.89 53.02 53.15
5 Year Average 52.26 52.65 52.67 52.45 51.70 50.83
Assets per Employee 193,242.30 198,863.70 155,312.71 137,243.87 126,974.00 104,297.86
5 Year Average 162,327.32 144,538.43 127,355.73 119,120.89 115,323.11 113,624.66
12/31/09 12/31/08 12/31/07 12/31/06 12/31/05 12/31/04
Total Debt % Total Assets 26.86 31.30 25.87 23.66 32.78 37.28
5 Year Average 28.10 30.18 32.44 36.71 41.92 45.98
32.96 28.10 33.64 30.67 21.94 12.25
5 Year Average 29.46 25.32 22.07 17.36 13.44 11.43
LEVERAGE RATIOS
ASSETS UTILIZATION RATIOS
Price/Book Value Ratio - Close
Price/Book Value Ratio - High
Return on Equity - per Share
Acc Depr % Gross Fixed Assets
Common Equity % Total Assets
SHARE DATA
GROWTH RATIOS
Currency: GBPSource: Worldscope
Symbol: ULVR (C000017179)
Worldscope Balance Sheet Ratios Report
UNILEVER PLC
DJ Sector: Consumer, Non-CyclicalDJ Industry: Food Products
100 Victoria Embankment Unilever HouseLondon EC4Y 0DY EC4P 4BQ GBRhttp://www.unilever.com
17
(“Thomson Research”, 2010)
18
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