Top Companies Report

1. Unilever

August 4, 2008

United Kingdom
www.unilever.com
Sales: $25.48 billion



Sales:

$25.48 billion for home and personal care products. Corporate sales: $55.1 billion.

Key Personnel:

Michael Treschow, chairman; Patrick Cescau, group chief executive; James A. Lawrence, chief financial officer; Douglas Anderson Baillie, president, Western Europe; Manvinder Singh (Vindi) Banga, president foods, home and personal care; Harish Manwani, president, Asia, Africa, Central & Eastern Europe; Sandy Ogg, chief human resources officer; Michael B. Polk, president, Americas; Geneviève Berger, chief research and development officer.


Major Products:

Personal care—Axe/Lynx, Rexona/Sure and Degree deodorants; Dove, Caress, Lux and Lifebuoy 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/Persil and Surf laundry detergents; Comfort and Snuggle fabric softeners; Sunlight dish detergent, Domestos bleach, Cif cleaners.

New Products:

Vaseline Cocoa Butter range, Clear anti-dandruff shampoo, Domestos Zero Limescale bleach.


Comments:

Corporate sales hit $55.1 billion in 2007 and with household and personal product sales topping $25 billion, Unilever tops our Top 30 list once again.
   
Bolstered by €1 billion brands such as Lux, Dove and Sunsilk, Unilever’s personal care group recorded sales of $15.5 billion, with underlying growth of 6.7%. Home care sales rose 6.1% to $9.99 billion, fueled by its own roster of blockbuster brands that include Omo, Rexona and Surf.
   
For Unilever’s household cleaning business, 2007 was a particularly successful year with brands such as Cif and Domestos helping grow sales by 9%. In skin care, the Pond’s brand went from strength to strength in southeast Asia, China and India, according to Unilever, powered in part by the launch of a new anti-aging range. Vaseline was Unilever’s fastest-growing global skin brand, with underlying sales growth of more than 8%. In addition, Vaseline’s Cocoa Butter range proved to be the brand’s most successful U.S. launch in a decade. Deodorant brands also made good progress in 2007, with Axe and Rexona both achieving double-digit growth.
   
Oral care returned to growth in Europe, while continuing its robust performance in Indonesia, China and Africa, aided by innovations such as a combined toothpaste and mouthwash. To grow its oral care operations, Unilever recognizes the value of close relationships with dental professionals. In 2007, the company extended its partnership with the FDI World Dental Federation, which represents more than 1 million dentists.
   
On a geographic basis, European sales at current rates of exchange rose by 1.4%, after the impact of acquisitions, disposals and exchange rate changes. The region sustained its improving trend in 2007 with underlying sales growth of 2.8% for the year. While Unilever said overall it saw improving trends almost everywhere, Russia was the outstanding performer.
    
The new Dove pro age range of products is growing in Europe and elsewhere, and Dove Summer Glow self-tanning and body lotions are now available in most countries. Clear anti-dandruff shampoo was launched in Russia, with good consumer response. Small & Mighty concentrated liquid laundry detergents were launched in seven European countries.
   
In the Americas, sales at current rates of exchange fell by 2.4%, after the impact of acquisitions, disposals and exchange rate change. Underlying sales grew by 4.1% throughout the year, with an increasing contribution from pricing which was up 2.6% for the year.
   
In the U.S., overall consumer demand held up well in Unilever’s categories. Market growth in home care and personal care slowed somewhat in the second half. Business in Mexico made good progress in the second half of the year and Brazil showed an improved performance in the fourth quarter. Argentina, Andina and Central America performed well throughout, according to the company.
   
In Asia/Africa, turnover at current rates of exchange rose by 6.2%, after the impact of acquisitions, disposals and exchange rate changes. Underlying growth of 11.1% for the year reflects both the vibrancy of these markets and the high priority we place on building our business in the region. Growth was consistent and broad-based across categories and countries, including established markets such as India, Indonesia, the Philippines, South Africa and Turkey, which all grew in double digits. China remains a key priority and grew strongly for the third consecutive year, the company said.
   
The company is actively bringing big-name products to this growing region. Clear anti-dandruff shampoo was launched in China, Arabia, Egypt, Pakistan and the Philippines. In Japan, Unilever launched the Axe brand and Dove pro age skin care products. An improved range of Dove shower products was extended to North East Asia, while Lifebuoy soap was launched in South Africa and a new variant added in India. In laundry, the “Dirt is Good” concept was introduced to Thailand.
   
Unilever is focused on bigger innovations and faster rollouts on a global basis. A prime example is Clear Anti-Dandruff shampoo. Formulated with Vita-ACE, a combination of amino acid and vitamin E to strengthen and nourish the scalp, along with ZPT, Climbazole and scalp care agents, Clear was simultaneously launched in three of the biggest hair care markets in the world—China, Russia and Brazil—as well as the Philippines, Pakistan, Egypt and Arabia.  Unilever also created a Clear range specifically for men, including Clear ActiveSport, HairFall Decrease and Style Express, as well as unisex varieties such as Clear Ice Cool, Itch & Dry Scalp Control and Extra Strength.
   
In February, Unilever continued to simplify its structure by combining home and personal care and foods into a single category structure.  In addition, to reflect the company’s strategic focus on growth in developing markets, Central and Eastern Europe will be managed within an enlarged region comprising Asia, Africa and Central and Eastern Europe. Western Europe will become a stand-alone region, the company said.
   
The changes came as Unilever made board and senior executive changes, with two long-time employees retiring in June. Specifically, Kees van der Graaf retired from the boards and from his role as president Europe, as did Ralph Kugler, who was president of  home and personal care.
   
Harish Manwani, who had been president Asia/Africa, is leading the newly expanded region and Doug Baillie is president of western Europe, having previously been chief executive officer of Hindustan Unilever. The roles of president home and personal care and president, foods were merged under the leadership of Vindi Banga.
   
Another staff change came in June, when Unilever tapped Geneviève Berger as its new chief research and development officer. Prof. Berger, who had been a non-executive director with the company, had most recently been professor of medicine at Pierre and Marie Curie University and at La Pitié-Salpétrière Teaching Hospital in Paris. In her new role, she will serve as the functional leader for research and development in Unilever and will directly lead all resources and major laboratories dedicated to the company’s focus on scientific discovery. In addition, she will be responsible for Unilever’s Safety and Environmental Assurance Centre (SEAC).
  
In June, Unilever Cote d’Ivoire disposed of palm-oil interests and acquired the soap business of Cosmivoire, an Ivorian producer with a market presence throughout western Africa. Cosmivoire is a subsidiary of SIFCA, an Ivorian agro-industry company.  
   
Last August, Unilever CEO Patrick Cescau said that the company was interested in ditching its U.S. laundry business. However, as of press time, no further details were announced nor had a buyer reportedly been found.