unilever - history, evolution, present and the future

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A comprehensive background of Unilever containing its History and Origins, Early Evolution, Modern Business, Global Expansion, Company Structure, Recent Efforts and Company DNA. As one of the chapters of the book FMCG: The Power of Fast-Moving Consumer Goods by authors Greg Thain and John Bradley. For more details on their success story and that of other leading FMCG companies, check www.fmcgbook.com or Amazon http://amzn.to/1jRyd20.

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Page 1: Unilever - History, Evolution, Present and the Future
Page 2: Unilever - History, Evolution, Present and the Future

History & Origin . . . . . . . . . . . . . . . . . . . 3

Early Evolution . . . . . . . . . . . . . . . . . . . . 7

Global Expansion . . . . . . . . . . . . . . . . 12

Modern Business . . . . . . . . . . . . . . . . . 18

Company Structure . . . . . . . . . . . . . . 21

Recent Efforts . . . . . . . . . . . . . . . . . . . 23

Company DNA . . . . . . . . . . . . . . . . . . 39

Summary . . . . . . . . . . . . . . . . . . . . . . . 41

Social Media Accounts . . . . . . . . . . . 43

2

Page 3: Unilever - History, Evolution, Present and the Future

Unilever was created when British firm Lever Brothers and the

Dutch-owned Margarine Unie signed an agreement

Built on 2nd of September 1929

William Lever thought his first business lesson: there had to be

potential in improving things

Second business lesson: expansion brought success

Passing of the Trademark Act in 1875, William prompted to

trademark “Lever’s Pure Honey”

William want to package his quality soaps from several suppliers

all under the Sunlight brand name

With the help of two soap-making experts they made a winning

recipe formula based on Copra oil, tallow, cotton oil, and resin.

Production for packaging the soap with full-colour visual on the box

started in January 1885.

3

Page 4: Unilever - History, Evolution, Present and the Future

Two years later, his factory was bursting at the seams, making 450

tons a week

By the mid-1890s, Sunlight sales were at a staggering 40,000 tons

a year

Lifebuoy was launched in 1894

Launched Sunlight Flakes, a waste from the bar cutting machines

It was then rebranded as Lux Soap Flakes in 1900

Cleaning needs like scouring powder with Vim launched in 1904

Laundry powder with Omo – first conceived simply as a bleaching

powder in 1908

William never forgot the lesson as a salesman: “scale was a big

benefit”

1915 was his greatest triumph being the snaring of the famous

Pears soap company

4

Page 5: Unilever - History, Evolution, Present and the Future

In 1919, William Lever set up operations in United States,

Switzerland, Canada, Australia and Germany In 1892, he begun the integration back up of his supply chain of

Copra oil to an arduous journey to Fiji and Samoa The company began developing a palm plantations in the Solomon

Islands In 1920, an investment in Nigeria was near disastrous and terminal

for William’s leadership The Niger Company purchase had precipitated, installed one of the

company’s accountants, Francis D’Arcy Cooper, as the new

managing director In 1921, the company's head office was moved from Port Sunlight

to London William Lever passed away in 1925 In 1914, it starts to manufacture margarine, as per asked by the

British Government

5

Page 6: Unilever - History, Evolution, Present and the Future

Unilever has two holding companies with had different

shareholders:

British Unilever Ltd. listed on the London Stock Exchange and

capitalized in sterling

Dutch Unilever NV listed on the Rotterdam Stock Exchange

and capitalized in guilders

The largest U.S. manufacturer of tea, the Thomas J. Lipton

Company, was acquired

In the war years, Lifebuoy soap provided a free washing and

bathing service to bomb out civilians in Britain

The most notable acquisition in 1943 was the purchase of

Batchelor Foods

Unilever had majority stakes in Frosted Foods, owned by Birds Eye

brands according to U.K. rights

1944 was the acquisition of Pepsodent Toothpaste 6

Page 7: Unilever - History, Evolution, Present and the Future

In 1919, Crosfield was acquired

Post-war acquisitions were Chicago-based margarine manufacturer

and America’s oldest cosmetic firm, Harriet Hubbard Ayer

In 1954, they launched Sunsilk in U.K. and by the end of the

decade it was being sold in 18 countries

Purchased a French soap and toothpaste company, Thibauld Gibbs

in 1956

It then transitioned over to hair-care products under the more

alluring-sounding name of Elida Gibbs

Unilever runs the very first television advertisement for Gibbs S.R.

toothpaste

Signal was launched in the U.S. market in 1957, as a breath-

freshening toothpaste

Also launched Dove, a brand of soap containing 25% moisturizing

crème7

Page 8: Unilever - History, Evolution, Present and the Future

In 1959, Germany operation came up with the idea of selling

margarine in tubs

Netherlands Unilever bought an ice cream company

The Niger Company renamed to United African Company

By the mid-1950’s it was earning 15% of Unilever’s entire profits

In 1960, bought The Streets in Australia (now Magnum Bar) and

Frisko in Denmark

Their U.S. Operations bought the Breyer’s Good Humor brand in

1961

1962 acquisition of Italy’s Spica, with Cornetto in its portfolio

brought success into the company

Followed acquisition in Europe was a juiced up partnership with

Nestle

Cif/Jif, the first liquid abrasive household cleaner, quickly spread

around the Unilever empire 8

Page 9: Unilever - History, Evolution, Present and the Future

It is set to expand their slaughter house business for the Walls and

Hartog Meat Brands

The company was also expanding its operations in animal feeds,

chemicals, paper, packaging and transportation

Unilever had an in-house advertising agency called Lintas

Unilever was now in over twenty countries and taking on work

from any non-competing advertiser

United African Company was the main agent for Caterpillar’s

heavy earth-moving equipment

Also for Africa’s largest brewer through joint ventures with

Heineken and Guinness

United African Company was expanding beyond Africa

The company opened up operations in the Middle East and Pacifica

Islands

9

Page 10: Unilever - History, Evolution, Present and the Future

In the late 1960’s, Unilever almost merged with Allied Breweries

In the end of 1960’s, Unilever had more sales than P&G, Colgate-

Palmolive, Nestle and Henkel combined

Unilever enjoyed a 12% global market share, 50% of the market

share accounted for by butter

In personal care, the company was barely beginning has a global

share of 4%

Unilever became the world’s second-largest soup manufacturer in

a subsidiary of T.J. Lipton

The Dutch meat business Zwanenberg’s was acquired in 1970

Launched the Impulse deodorant in South African business

Bought a chemical company, National Starch for $487 million in

1978

10

Page 11: Unilever - History, Evolution, Present and the Future

It was during the U.S. production crisis low-down

In 1983, the supplier launched a brand of its own, a low-fat spread

called Country Crock

It became an immediate success

A bright spark in the ice cream R&D team was Vienetta

Vienetta is an affordable luxury ice cream dessert

It has a production technology protected by patent with many

years left to run

The French personal products division created Axe body spray

(branded Lynx in the U.K.)

By the end of the decade, Axe was Unilever’s largest deodorant

Dove had been relaunched in the United States and then became

the country’s best-selling soap bar

11

Page 12: Unilever - History, Evolution, Present and the Future

Belgium, Germany, France, Switzerland and Holland were the

thriving Lever Brothers sales agencies by 1889

In 1906, 25% of the capital employed were from Belgium,

Germany, Switzerland, Canada, Australia and US

Sunlight Soap became the largest selling soap in the world in

1880s.

Sales offices in New York and Toronto were opened in 1888

In 1899, William Lever bought an American manufacturer,

Benjamin Brooke &Co., the makers of the popular Monkey Brand

soap

After William died, operations in Thailand, Indonesia, China,

Argentina, Brazil started

One of the best example of any western company cracking an

emerging market is India

India, as a leading part of the British Empire, first sold Sunlight in

their market by 1888, soon followed by Lifebuoy in 1895

12

Page 13: Unilever - History, Evolution, Present and the Future

Other Lever bestsellers such as Pears, Lux and Vim followed

In 1918, Vanaspati was launched, a brand of hydrogenated

vegetable fat used in place of butter in Indian cooking

Vanaspati was the first Unilever brand to be manufactured in India

itself, starting up in 1932

Two years later a modern soap factory was up and running in

Bombay, followed by the setting up of third subsidiary, United

Traders Limited

The three companies merged to form Hindustan Unilever Ltd.

(HUL) in 1956

HUL, by which time has a Calcutta-based factory making a range

of personal products

By 1967, Hindustan Unilever Ltd. was one of the top five

companies in India

13

Page 14: Unilever - History, Evolution, Present and the Future

It has 7,000 employees and 6 factories producing a highly

diversified product

At the government’s request, HUL sold condoms

In the mid-1970s, the leading detergent brand Surf was decimated

due to a low cost competitor

Launched Wheel in 1987, which six years later had a market share

of over 20%

Came a merger between Hindustan Unilever Ltd. and Tata Oil Mills

Company in 1993

In 1996, HUL formed a 50:50 joint venture with another Tata

subsidiary, Lakme

In 1994, HUL and Kimberly Clark had a joint venture to market

Huggies and Kotex

HUL also set up a subsidiary in Nepal, Unilever Nepal Limited

(UNL) 14

Page 15: Unilever - History, Evolution, Present and the Future

In 1994, Brooke Bond India and Lipton India (BBILI) merged to form

Brooke Bond Lipton India Ltd.

The merger immediately launched the Wall's range of frozen

desserts

It also acquired distribution rights for other leading brands

Brooke Bond India and Lipton India (BBILI) merged with Hindustan

Unilever Ltd. in 1996

It was followed by the merger of Pond's (India) Limited with

Hindustan Unilever Ltd. in 1998

In 2000, Unilever had 74% of the government-owned bread

business, Modern Foods

HUL acquired the full control two years later

Unilever’s first soap powder brand sold in Brazil had been the

cheap and cheerful Rinso

In 1959, it was supplanted by Brazil’s first synthetic brand, Omo 15

Page 16: Unilever - History, Evolution, Present and the Future

By 1970, Unilever had 22 operating companies with an annual

sales of over £30 million a year

14 companies were based outside the U.K. and the Netherlands

Excluding North America and Europe, Unilever India was

accounting for 24%, South Africa 11% and Turkey 7%

Japan had also been a rocky road for the company

In 1913, Lever had built a soap factory in Japan but was sold after

10 years.

The company name became Nippon Lever in 1977

The breakthrough came with the ever-dependable Sunsilk,

launched in 1977

In 1985, Unilever formed a 50:50 venture to form Shanghai-Lever

Beginning with the production of Lux in 1987

16

Page 17: Unilever - History, Evolution, Present and the Future

By 1990, Unilever’s sales in China had reached a respectable $32

million a year

Though, the figure was still small in comparison to the company’s

total overseas sales (excluding Europe and North America) of

nearly £5 billion a year

In Czech Republic, Hungary and Russia by 2001 the company had

seven manufacturing sites

It included a margarine factory in Moscow, dressing, tea, home

and personal care factories in St Petersburg, and food and ice

cream factories in Tula and Omsk

17

Page 18: Unilever - History, Evolution, Present and the Future

The company embarked on its first-ever hostile takeover bid, that

is winning through in September 2004 at a price of £390 million

Unilever bought Chesebrough-Ponds in January 1987 for £2 billion

Brands such as Vaseline and Pond’s catapulted Unilever to 4th

largest global skincare company

Most notably acquisition approached to Unilever was Elizabeth

Arden-Fabergé who made their pitch in October 1988

This deal was consummated in 1989 for £996 million and soon

followed by Calvin Klein with its highly successful Obsession and

Eternity brands

One small acquisition that would pay back many times over was

that of a small U.S. margarine manufacturer, J. H. Filbert

The Becel margarine brand was proving a success

Sunsilk now selling in over 30 countries

18

Page 19: Unilever - History, Evolution, Present and the Future

The brand has 12% of the world shampoo market in 1985

Signal was sold in 18 countries and had 5% of world toothpaste

sales

The company’s Unipath subsidiary developed a successful

pregnancy testing kit called Clearblue

The Dove brand began its European rollout in 1989

The same year that the Magnum brand appeared as a response to

the entry of Mars into the ice cream category

The remaining portions of UAC - finally sold by 1994

Agribusinesses followed in 1995

The meat processing and fish businesses in 1997

The same year that the chemicals division was sold to ICI for a

hefty £4.9 billion

Significant acquisitions includes the Helene Curtis hair-care

business, Ben & Jerry’s, Slimfast in early 2000 19

Page 20: Unilever - History, Evolution, Present and the Future

Breyers ice cream was also bought which made Unilever America’s

largest ice cream company

In 2000, company’s biggest acquisition by far was Bestfoods

It took total company sales to $52 billion a year

Bestfoods brought some leading brands into the fold like Knorr and

Hellman’s

40% of Unilever sales is from outside North America, an ideal fit

with the globalized Unilever

1,000 of the brands delivered only 8% of total company sales

The collateral damage was that 100 of the 350 factories would go

along with 25,000 employees

Only a year later the company portfolio was down to 900 brands

as 87 businesses were sold off

20

Page 21: Unilever - History, Evolution, Present and the Future

Unilever was set up with two distinct capitalized entities. Those

entities shared the same board of directors and had separate

chairmen. It has an agreements in place to ensure dividends were

paid equally

The first board meeting of each year has each country delegated

executive to the Special Committee which had two British and one

Dutch member who collectively acted as the CEO

There was an understanding that the Dutch side would run

continental Europe, while the British side run the rest of the world

By 1960, an existed structure beneath the Special Committee and

the boards to manage around five hundred operating companies

The six management groups consist of UK Committee, Continental

European Group, Overseas Committee, Plantation, UAC and North

America

By 1960, Product Committees had set up for detergents, foods,

toiletries and edible fats, all based in Rotterdam 21

Page 22: Unilever - History, Evolution, Present and the Future

In 1972, McKinsey (Unilever CEO at that time) had recommended

extending co-ordination to all the other European countries

In 1989, a new Foods Executive was formed in Rotterdam

The three foods co-ordinations were replaced by five new product

groupings: spreads, oils and dressings; meat and meal

components; ice cream and sweet snacks; beverages and savoury

snacks; and professional markets

In 2001, Unilever was organized into two global divisions, Food and

Home and Personal Care, with the aim of optimizing synergies

across the product portfolio

In early 2005, this was simplified into a matrix structure, with the

two divisions responsible for strategy and brand development

The regional groups of each division were merged, with the

regional level responsible for go-to-market execution

22

Page 23: Unilever - History, Evolution, Present and the Future

2004

Twelve brands had sales in excess of €1 billion

Approximately two-thirds of total sales derived from brands larger

than €0.5 billion

That is no mean feat given a starting point of 1,600 brands

Knorr, the company’s largest brand, was sold in over 100 countries

Dove, Signal and Pepsodent were all relaunched

The Pro-Activ cholesterol-lowering spread was extended into other

dairy categories

The ever-reliable Sunsilk grew by double digits

The €1 billion+ R&D programme had been realigned behind the

new Vitality agenda

It registered 370 patents in the year

The Latin American region had an underlying sales growth in the

year 23

Page 24: Unilever - History, Evolution, Present and the Future

All the unwanted brands and businesses were being sold off

For the first time since its formation, Unilever would have one

chairman, one board, one CEO with one executive team.

There would be two category presidents, one each for Foods, and

for Home and Personal care (HPC), responsible for R&D, brand

development and category development.

Alongside would be three regional presidents (Europe, The

Americas, Asia/Africa, Middle East and Turkey)

2005

More disposals, primarily of the Unilever Cosmetics International to

Coty Inc. for $800M

Sales grow to 3.1%, US grew by 3%, Asia/Africa grew by 9% with

China up by over 20% and a strong recovery in the key Indian

market

For the first time, sales in all the developing and emerging markets

exceeded those in Europe 24

Page 25: Unilever - History, Evolution, Present and the Future

The driver of most of the good regional performances was the

personal care, up over 6%

The company assessed the nutritional profiles of over 16,000

products in the year and found many in difficulties

Fast-evolving consumer attitudes to saturated fats, sugar and

sodium were seriously compromising sales were some

Merged One Unilever single-country organizations accounted for

80% of total turnover

2006

It has a structure that enabled rather than hindered its global scale

and reach, the company could, for the first time in its history,

define a clear mission for itself:

“Our mission is to add Vitality to life. We meet everyday

needs for nutrition, hygiene and personal care with brands that

help people feel good, look good and get more out of life”

25

Page 26: Unilever - History, Evolution, Present and the Future

Top line sales grew by 3.8%

In Personal Care grow by 6% again and Omo is now over €2.5

billion

Launched Domestos 5x which killed germs in the toilet bowl for five

times longer than anything else on the market

Launched Surf Excel in India that has a low-rinse formulation, was

reducing the water needed for a wash-load by two-thirds

The Foods Division was wrestling with removing 37,000 tons of

fats, 17,000 tons of sugar and 3,000 tons of sodium from its

products without altering the flavour, initiatives

China was really the only market where Unilever was growing at a

new entrant’s pace

On the opportunity side, the company was investing €350 million in

venturing activities to develop the winners of tomorrow

26

Page 27: Unilever - History, Evolution, Present and the Future

2007

Sales grow by over 5% and even Europe pitching in with +3%

Clear, a new shampoo with enhanced proprietary anti-dandruff

technology was launched

Personal care grew by almost 7%

Rexona was the world’s largest deodorant brand and Axe the

largest male deodorant

Knorr was now almost a €4 billion brand

The top 25 brands accounted for almost 75% of turnover

44% of company sales came from developing and emerging

markets

The company’s roster of household cleaning brands grew by an

impressive 9%; Vaseline grew by 8%

Dove’s Campaign for Real Beauty was partnering with

organizations in over twenty countries 27

Page 28: Unilever - History, Evolution, Present and the Future

Hellman’s Extra Light was using citrus fibre to deliver a very low-fat

content and a very high profit margin

Launched in Turkey under the brand name, Amaze Brainfood

Acquired Russia’s leading ice cream company, Inmarko

US grow by 4.1% while Asia/Africa grew by over 11% with volume

and contributing two-thirds of the growth

Areas of strength were India, the Philippines, South Africa and

Turkey, which all grew in double digits

2007

A regionalization of head office functions to jointly serve several

country markets.

A rationalization, arrived in the same year that some countries -

Brazil, Argentina and Mexico - were still catching up with the One

Unilever single-head-office-per-country notion

28

Page 29: Unilever - History, Evolution, Present and the Future

2008

For the 3rd year in a row, Unilever increased its rate of underlying

sales growth by 7.4%

Home care charging ahead at +9.8% and ice cream and beverages

bringing up the rear at +5.9%

Savings from One Unilever and elsewhere provided over €1 billion

New CEO, Paul Polman, previously Chief Financial Officer and head

of North America for Nestlé, still felt there was more to be lost

6,000 staff were finally brought together into one organization

Launch of Signal White Now, the world’s first toothpaste

Brands were managed under four sub-groups: savoury, dressing

and spreads, ice cream and beverages, personal care; and home

care

Western Europe just had underlying growth of only 1.3% versus

6.5% for the Americas and 14.2% for Africa/Asia 29

Page 30: Unilever - History, Evolution, Present and the Future

Prices increases of 3.8% also dug deeply into European

performance and volume slipped by 2.5% while US business grew

by 3.8% and Latin America steamed ahead by 12%

The newly named Asia, Africa and Central and Eastern Europe

region (AACEE) seemed to be recession-free

Underlying sales in the region grew by an impressive 14%.

Unilever’s top five developing and emerging markets in the region

also grew by approximately 20%

For a €3 billion total, the Boursin cheese brand, Lawry’s and

Adolph’s brands of seasoning and marinades and Bertolli olive oil

and vinegar joined the North American laundry business.

2009

The company’s underlying growth was 3.5%, 2/3 of which was the

result of volume increases

30

Page 31: Unilever - History, Evolution, Present and the Future

Africa, Asia, Central and Eastern Europe was now the largest of the

three at nearly €15 billion

The region also delivered the biggest operating profit nearly €2

billion with underlying sales growth of more than 7.7%, with

volume up 4.1%

US and Brazil, were the strongest performers, helped by increases

in advertising and promotional spending paid for from cost savings

Dove Minimizing Deodorant had been launched in 37 markets

Clear shampoo was now in 35 markets

Signal White Now in 21 markets

Knorr Stockpots (using a proprietary gel formula) in 12 markets

Sales potential of greater than €50 million

With a new innovation center opened in Shanghai and a doubling of

projects in the pipeline

The company appointed its first ever Chief Global Supply Chain

Officer during 2009, a role long common elsewhere31

Page 32: Unilever - History, Evolution, Present and the Future

Acquisition of a Russian ketchup business and announcement of

the impending purchase of Sara Lee’s personal care brands, Sanex,

Radox and Duschdas would lead Unilever to take more globally

Louise Fresco, a Professor of International Development and

Sustainability at the University of Amsterdam, was appointed to

the board

Unilever was actively developing products like Comfort One Rinse

fabric conditioner, which required less rinsing.

A campaign by Lifebuoy in India was launched

The campaign expanded to Bangladesh, Sri Lanka, Pakistan,

Indonesia, Vietnam and South Africa

Campaign was grown to include backing of Global Hand-washing

Day, and reached over 133 million people.

Lifebuoy was voted one of India’s most trusted brands

32

Page 33: Unilever - History, Evolution, Present and the Future

New CEO Paul Polman announced a new strategy that would drive

the new Unilever hard

The new vision – to double the size of the business while improving

its environmental footprint winning with brands and innovation

Winning in the marketplace

Winning through continuous improvement

Winning with people

The unique aspects were in details and stressed the same theme:

overlaying world-class performance standards on Unilever’s unique

global footprint

2010

The turnover finally left the €40 billion mark, rising 11% to over

€44 billion

While 7% of the rise was due to currency changes

The remaining 4% is due an underlying volume increase of nearly

6% - the highest for more than thirty years 33

Page 34: Unilever - History, Evolution, Present and the Future

Asia, Africa, Central and Eastern Europe excelled with an increase

of 18% on the currency-enhanced top line

The growth was underpinned by a 10% volume increase

China, India, Turkey and Vietnam being well into double-digit

territory

Re-launching of Wheel detergent brand across 25 Indian states in

just 49 days

Expanding their direct delivery network to another 630,000 stores

in 110,000 new villages during the year

In the Americas, Latin America once again drove the volume

increase to nearly 5%

Gaining share in the hair and skin cleansing categories, although

losing it in spreads and weight management

Western Europe once again brought up the rear

1.4% volume growth from of Ireland, Greece and Spain, all

substantial Unilever markets 34

Page 35: Unilever - History, Evolution, Present and the Future

The company grew volume by at least 2% and grew market share

in the UK, France, Italy and the Netherlands

More than forty innovations in the year were launched into more

than ten markets

Magnum Gold and Dove Men+Care rolled out to 30 markets

Unilever won Global Supplier of the Year award from both Wal-Mart

and Tesco.

Savouries, dressings and spreads had only 35% of its turnover in

the D and E markets and delivered an over 2.5% volume increase

Ice cream and beverages had 45% exposure and grew by 5.9%,

whilst personal care had 61% of sales and grew 7.9%. At the top

was home care: 78% of D and E turnover grew by 8.2%.

Comfort gained 5.7 million new users in China

Rexona deodorant lotion picked up 5.3 million in Indonesia

35

Page 36: Unilever - History, Evolution, Present and the Future

Announcement of the blockbuster purchase of the Alberto Culver

Company for $3.7 billion

Unilever was, as the CEO described, ‘Now fit to compete’

2011

Underlying volume growth dropped back to 1.6%

Significant cost-driven price increases totaled €2.4 billion

It drove the underlying sales growth up to a recent high of more

6.5%

Performance differences between emerging and developed markets

were marked.

India, China, Turkey and South Africa again grew double digit

11.5% sales increase across all emerging markets: the company’s

developed markets trod water

Dove became the company’s first €3 billion personal care brand

More than 3 million shops signed up to Unilever Perfect Store

program

36

Page 37: Unilever - History, Evolution, Present and the Future

The combination of price increases and a further €1.5 billion in cost

savings protected the operating margin and enabling a modest

increase in the company’s €6 billion advertising budget (Unilever

are the world’s second-largest advertiser)

Axe Excite was launched in 100 markets in the year, 70 innovations

were launched into more than ten markets

TRESemmé had been launched into Brazil, Simple into the U.S.,

and Motions into South Africa

Genesis program was now producing some genuine breakthroughs

It was incorporated into PG Tips and Lipton Yellow Label

The Motionsense technology that greatly prolonged the efficacy of

Rexona deodorant

Personal care led the way with a volume growth of over 4%

Home Care delivered 2.2% more volume

37

Page 38: Unilever - History, Evolution, Present and the Future

Refreshment (the newly-named Ice cream and beverages category)

grew volumes by only 1.4%

Beleaguered foods division dropped 1.2% by volume

Spreads, dressings and soups were not D and E favorites

2012

Core operating margin increased to 13.8%, boosted by Magnum

and Sunsilk

Unilever now have 14 brands with sales of more than $1

billion/year

These key brands accounted for almost 50% of the 2012 growth

The launch of TRESemme in Brazil was also one of the company’s

most successful ever

Adding €150 million to turnover, which increased by 10.5% and

took Unilever above the €50 billion barrier for the first time

They now account for more than 55% of total business 38

Page 39: Unilever - History, Evolution, Present and the Future

Much of the uniqueness of the company was traced back to the

company’s 3 key elements:

1. William Lever himself;

2. The 1929 merger that created a multi-category, multi-national

company; and

3. The company’s remaking into a focused packaged goods

company William Lever saw almost from the very beginning that acquisitions

were the path to success in the soap and detergents battlefield Lever acquired his way to complete UK market dominance Similarly, the company’s Dutch margarine barons employed the

same before the big the merger Almost all of Unilever’s history, it has been a serial acquirer of

businesses Emerging Markets - The scale of Unilever’s emerging markets

business, accounting for 54% of the sales and rising

39

Page 40: Unilever - History, Evolution, Present and the Future

Second comes organic sales growth, which Unilever has been

achieving ever since emerging markets hit the radar with a 9%

underlying sales increase over the past twenty years in these very

fertile markets

The company has unparalleled experience of operating in

sometimes extremely basic and volatile economic conditions.

Local Roots with Global Scale - The divestment of non-

packaged goods businesses followed by the creation of a global

operating structure has created a new

Recent addition to the Unilever DNA: a superb balance of global

and local capabilities

The sharpening of Unilever’s somewhat lax historical performance

culture by the current CEO looks like being the final piece of a

now-complete puzzle that should make Unilever the very best

global-local packaged goods business

40

Page 41: Unilever - History, Evolution, Present and the Future

Unilever is the best example of how understanding a company’s

formation, roots and early evolution helps us to understand it both

today and tomorrow

The company seems to have been evolving since the day of the

merger and is only now emerging from its chrysalis.

The company has built skills and market positions that now simply

cannot be replicated.

We believe the rest of the foods division should be added too, and

for four key reasons:

The logic that brought margarine and detergents together in

the first place no longer applies: technologies and ingredients

As the company becomes global in what and how it operates,

many of the foods brand are more local in strength, with

thousands of differing recipes. 65% of sales are outside

emerging markets where the company is strategically

advantaged.41

Page 42: Unilever - History, Evolution, Present and the Future

While the benefits of green tea in the company’s Unilever

Sustainable Living Plan are plain to see, it’s hard to see how

the planet will benefit from the sale of more Hellmann’s

Mayonnaise.

We believe the Unilever of today would not buy Bestfoods if it

were still independent and up for sale

The tea and ice cream businesses have global scale, with

global and regional brands and a much clearer role in the

company’s strategy.

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Page 43: Unilever - History, Evolution, Present and the Future

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