Unilever 2007 Annual Report Download - page 7

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Unilever Annual Report and Accounts 2007 5
Report of the Directors continued
Group Chief Executive continued
We further shaped our portfolio through disposals and
acquisitions, including the announced sale of Boursin and Lawry’s
– brands that offered limited growth potential for Unilever. We
also announced agreements to acquire the Buavita vitality drinks
brand in Indonesia and – only recently – Inmarko, the leading ice
cream business in Russia. These transactions accelerate our
strategy of building leadership positions in fast-growing markets.
This is the right strategy for Unilever but – like any strategy – it is
only as good as the execution. That is why we also continue to
build our strengths in critical areas such as consumer marketing
and customer development. In both cases our progress was
recognised externally. In marketing, we received a clutch of
awards at the Cannes International Advertising Festival, with Dove
and Axe achieving three ‘Grand Prix’ trophies. In customer
development, Unilever was named International Supplier of the
Year by Tesco for the second year running.
We are also raising our game in research and development (R&D),
recognising the crucial role technology can play in the quality of
our innovations. Underlining the importance of R&D, we
appointed our first Chief Technology Officer, Neal Matheson, in
2007. Neal leads the development of world class capabilities in
science and technology and champions excellence in all our
innovation activity.
Of course, some changes required difficult decisions. In Europe,
the restructuring is leading to significant job losses. But painful
as these decisions have been, they are the right ones for the long-
term health of the business.
Keeping sustainability at the heart of Unilever
We believe Unilever can only continue to thrive if we conduct our
business in a sustainable manner.
Integrating social, economic and environmental considerations
therefore sits at the heart of many of our brand strategies. A
great demonstration of this was the decision to source all of our
tea from sustainable, ethical sources. To support this significant
change, we asked the Rainforest Alliance to start auditing our tea
suppliers with immediate effect. The aim is to have all Lipton
Yellow Label and PG Tips tea bags sold in Western Europe
certified by 2010 and all Lipton tea bags sold globally by 2015.
We also set the ambitious target of a further 25% reduction in
the business’s CO2emissions from energy sources used in
production by 2012. And we continued to develop our
partnerships with key retail customers, sharing our sustainability
expertise to support them in achieving their goals. Wal-Mart
responded by naming us 2007 Supplier of the Year for
Sustainable Engagement.
The year ahead
Notwithstanding some economic uncertainty and the rising costs
of many materials, we are confident that Unilever can grow
consistently, profitably and competitively in 2008.
The changes we have made in recent years leave Unilever more
resilient and better placed than ever before to meet challenges
and respond to opportunities. We have a more flexible, dynamic
structure, an increasingly powerful brand portfolio, an
unparalleled footprint in the developing world and – in 2008 –
we have another exciting programme of innovations and new
product launches. Furthermore, we operate in sectors less
susceptible than others to the effects of an economic downturn:
people will always need to eat, wash and clean their homes.
For all these reasons we remain optimistic about the year ahead
and confident of making further progress towards our longer-
term financial objectives.
On a personal note I would like to thank two members of the
Unilever Executive who will leave us in 2008 - Kees van der Graaf
and Ralph Kugler. They have been valued colleagues over many
years and I thank them for their contribution. Indeed, I would
thank the whole of my Executive team, including two great
additions during the year, Mike Polk and Jim Lawrence, the latter
joining from outside as our new Chief Financial Officer. Thanks
also to my colleagues on the Boards, under our new Chairman,
Michael Treschow, and especially to every one of our employees
around the world for their invaluable contribution to the
business's progress in 2007.
Working together, as One Unilever, I am confident that we can
look forward to delivering continued success in 2008.
Patrick Cescau
Group Chief Executive