07.30.07
1. Unilever
United Kingdom
www.unilever.com
Sales: $22.9 billion
Sales:
$22.9 billion for home and personal care products. Operating profit: $3.1 billion. Corporate sales: $49.7 billion. Net income: $6.2 billion.
Key Personnel:
Patrick Cescau, group chief executive; Kees van der Graaf, president, Europe; Harish Manwani, president, Asia Africa; John Rice, president, The Americas; Ralph Kugler, president, home and personal care; Rudy Markham, chief financial officer; Sandy Ogg, chief human resources officer.Major Products:
Personal care—Axe/Lynx, Rexona/Sure and Degree deodorants; Dove, Caress, Lux and Lever 2000 soaps; Pond’s and Vaseline skin care products; Organics, Salon Selectives, SunSilk, Suave and ThermaSilk hair care products; Close-Up and Signal oral care products. Household—Ala, All, Omo and Wisk laundry detergents; Comfort and Snuggle fabric softeners.New Products:
Sunsilk hair care, All Small & Mighty concentrated laundry detergent, Snuggle Exhilarations and Comfort Créme fabric conditioners, Dove Summer Glow.Comments:
Sales of home and personal care products rose 4% last year in local currency. Operating profit increased 3%. Company executives credit the wide-ranging organization and strategy changes made in 2004 and 2005 for the increase. The company said performance was particularly strong in two key areas: developing and emerging markets and personal care. The later rose 6.3% in sales. Meanwhile, sales in D&E markets rose more than 8% last year and already account for more than 40% of Unilever’s sales.In the U.S., Unilever expanded its share in the AP/Deo category as Degree, Dove and Axe all gained market share. The launch of Sunsilk provided a boost to hair care market shares. Unilever backed the entry with a $200 million “Get Hairapy” campaign. But it wasn’t all good news in the States. Unilever lost market share in laundry detergent, even as it initiated a move to concentrated liquids—well ahead of market leader Procter & Gamble.
The company noted that sales in Brazil were strong due to innovation-driven gains in hair, deodorant and laundry care. At the same time, Unilever posted gains in Argentina, Central America and Venezuela. They all helped Latin American sales rise 5.8%, even as Mexican sales fell.
Sales in Asia/Africa rose nearly 6%, helped along by big gains in some major markets. Sales in India “grew well in major sectors,” due to sales of Wheel and Surf Excel laundry detergent and Clinic hair care. Sales in China were up thanks to a combination of market growth, better distribution, growing popularity of global brands such as Omo, Lux and Pond’s as well as Zhonghau, a local toothpaste brand. Elsewhere, sales of home and personal care products were strong in Indonesia, Australia posted share gains in a number of areas, and laundry and household care brands were the main drivers of strong growth in Turkey. In Japan, Lux Super Rich, the leading brand, posted good gains, but Dove and Mod lost share in that country. Laundry detergent sales across the region benefited from Omo’s “Dirt is Good” campaign. In fact, Omo became Unilever’s first billion-Renminbi brand in China.
European sales rose 0.4%. The company said it has done a lot to make its business more competitive by:
• improving the valued offered to consumers;
• creating an innovation program and
• implementing the “One Unilever” program.
Sales in the UK, Unilever’s largest European business, were up in most personal care categories.
Although laundry sales declined, the company has been encouraged by the fact that Persil regained its position as the No. 1 brand in the UK. The Netherlands posted gains, driven by the growth of Dove, Rexona and Axe. France remained difficult, as laundry and hair care sales declined. Sales in Germany were better, helped along by good gains in personal care. Central and Eastern European markets continued to grow, driven by double-digit gains in Russia.
Faster to Market
The company insists that structural changes, the one Unilever program, and better collaboration across businesses, is helping get products faster to market. For example, the “Dirt is Good” positioning (includes the Omo laundry brand) helped boost sales above $3.1 billion, due to an alignment of the brand positioning and the rapid rollout in Asia, Dove Summer Glow self-tanning lotion was rolled out across four European countries in just a few weeks. Unilever called it one of its most successful personal care innovations in Europe last year.
The plan seems to be working. For the first three months of 2007, Unilever posted better margins, driven by gains in home and personal care, even as sales were flat at current exchange rates.
In May, Michael Treschow joined the company as Unilever’s first independent non-executive chairman. In June, Neal Matheson was appointed to the newly-created role of chief technology officer. Prior to this appointment, Mr. Matheson held the same position with Johnson & Johnson Consumer Companies. He will report directly to Patrick Cescau, group chief executive.
In his new wide-ranging role, Mr. Matheson will advise the Unilever board on science and technology matters, lead the cross-Unilever science platforms and will champion the development of functional excellence in R&D. In addition he will take direct responsibility for Unilever’s Safety & Environmental Assurance Centre.
“I am very pleased that Neal is joining us in this important new role. Unilever has always recognized the importance that great science and technology play in driving business success,” said Mr. Cescau. “I am confident that Neal will help drive and enhance the long term growth of Unilever through scientific innovation.”
Last month, rumors swirled that Unilever was acquiring Colgate, or the other way around. In fact, shares in Unilever rose more than 2% on July 11, on speculation in the market that Colgate-Palmolive Co. may be interested in all or part of the consumer products maker. But less than a week later, the rumor mill had ground to a halt.