Unilever was arguably the world's first packaged goods manufacturer, and is still one of the global leaders, with operations in every corner of the globe and an especially strong profile in emerging markets. It was one of the original pioneers in household detergents - products today include Omo and Persil - and it remains the world #1 in personal wash and deodorants, with brands including Dove, Rexona and Axe/Lynx. Following a series of high-profile acquisitions, including US-based Bestfoods, it is also a major force in foods, and a global leader in sectors such as culinary foods, ice cream and tea. Key brands include Knorr, Lipton and Magnum. Yet Unilever also struggled for several years to adapt to the faster-moving business environment of the 21st century. In the late 1990s, the group initiated a strategy to prune its vast portfolio, disposing of regional products and rebadging others in order to concentrate on a smaller roster of global power brands. That mammoth task finally began to deliver results from 2005. So much so, perhaps, that in 2017, Unilever was shaken by an unexpected bid approach from fast-expanding predator Kraft Heinz. The approach was quickly defeated but has prompted an internal review of operations to deter further such attacks. The group has traditionally operated through two main divisions, Unilever Home & Personal Care and Unilever Foods. However the home and personal care divisions were separated during 2018. The resulting three divisions have each developed at widely different speeds in recent years. The biggest by some margin, as well as the strongest, is beauty & personal care, which has been steadily expanded with a succession of acquisitions in both mass-market and niche segments. Home care has proved less hardy, especially in developed markets, but the group is still a leader in laundry detergents in emerging countries, and an important global force. The weakest of the three divisions has been foods. Numerous brands have been divested, including the entire margarine portfolio, once one of the group's founding pillars. Another such pillar, tea, is under review. If divested it would effectively reduce the global foods portfolio to just two segments of culinary foods and ice cream, supported by local jewels in regional markets. Group revenues for 2020 were €50.7bn with net profit of €6.1bn. Alan Jope succeeded Paul Polman in 2018 as CEO.
Capsule checked 23rd April 2020
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Adbrands Daily Update 23rd Jul 2020: Unilever confirmed that it will proceed with plans to spin off its global tea business as a separate entity, following a strategic review. Lipton, Brooke Bond, PG Tips and other brands will all be seeking a new owner. That move, expected to complete by the end of 2021, would remove another of the traditional pillars of the Unilever global business. However, like the margarine division divested in 2017, it is also slowing down the group's overall growth. The whole business - with annual sales of around €2bn - will be divested with a few major exceptions. Unilever will retain rights to the Lipton name for ready-to-drink iced tea products, which it produces in a joint venture with PepsiCo. It will also hold on to its tea businesses in India and Indonesia.
Adbrands Daily Update 11th Jun 2020: Unilever announced the results of an 18-month review of its complex corporate structure. Currently, the group is effectively a joint venture between two separate entities based in the UK and the Netherlands respectively. Ownership of each of the group's individual country operations has a different shareholding structure between those two parent companies, with some majority owned by the Dutch parent and some by the British one. That has long created significant legal issues for the group, not least when it divested its global margarine business four years ago. Each country-specific sale required a different legal arrangement. A similar set of problems lie on the horizon with the likely disposal of Unilever's tea division. As a result, the group has taken the decision to unify its structure under a single parent company, the UK-based Unilever plc. The Dutch Unilever NV parent will be eliminated. It's a significant morale boost for Britain ahead of Brexit, although virtually nothing will change with respect to day-to-day operations.
Adbrands Daily Update 30th Jan 2020: Another pillar of Unilever's global food business is under review after attempts to resuscitate its world-leading €3bn tea business failed to deliver results. Like margarine before it, declining sales of tea are holding back the rest of the group's performance. CEO Alan Jope announced a strategic review with a view to full or partial sale of the business, whose brands include Lipton, PG Tips, Brooke Bond and others. Group full year net profit fell 38% to €6.0bn, though this year's figure included a one-off €1.3bn restructuring charge, while last year's figure benefited from a huge gain on the sale of margarine. On a comparable basis, revenues edged up 2% to just under €52.0bn. As has been the case for several years, Unilever's foods business continues to fall behind home care, and especially beauty care in both volume growth and overall sales growth. Reported sales for foods & refreshment slumped by 5% to €19.3bn, while home care rose 7% to €10.8bn and beauty by 6% to €21.9bn. The strategic review of tea could ultimately lead to a full divestment of Unilever's wider foods division.
Adbrands Daily Update 3rd Dec 2019: After a prolonged search, Unilever named Conny Braams as its new global chief digital & marketing officer. She was previously regional EVP and general manager, Unilever Middle Europe. Braams takes up her position at the beginning of 2020. The role has been vacant since Keith Weed departed in May. At the same time, the group confirmed the departure of North America president Amanda Sourry after 30 years with the company in a variety of different roles. She will be succeeded at the beginning of 2020 by former Revlon CEO Fabien Garcia.
Adbrands Daily Update 15th Mar 2019: New Unilever CEO Alan Jope announced an overhaul of the group's senior management team. Nitin Paranjpe was promoted to a newly created role as group COO with responsibility for all go-to-market capabilities worldwide. His role as president of Foods & Refreshment will be filled by Hanneke Faber, previously Europe president. She will not be directly replaced in that role, with all local country units reporting directly to Paranjpe. At the same time, Kees Kryuthoff is to depart Unilever and will be succeeded as president, home care by Peter ter Kulve. His current regional duties as EVP, South East Asia & Australasia will also be assumed by Paranjpe, while Sanjiv Mehta is promoted to president of the South Asia region.
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