Unilever 2008 Annual Report Download - page 25

About Unilever continued
22 Unilever Annual Report and Accounts 2008
Report of the Directors
In 2008, we combined all global categories and brands across
nutrition, hygiene and personal care into one global category
organisation. The global category team aims to develop winning
category and brand strategies, to create exciting new brand
communication, product innovation and renovation, and to
provide strategic direction for the supply chain. The category team
is responsible for medium-term value creation, considering items
such as market share, category growth, brand health and
innovation.
Our functional teams, notably Finance and Human Resources, are
responsible for providing business partnering, strategic support
and competitive services across the global business. These
functions are organised around the same principles of business
partners, shared services and expertise teams.
The top management team, called the Unilever Executive (UEx),
consists of the CEO with seven direct reports, including three
regional Presidents for Western Europe, the Americas and Asia
Africa CEE, one global President for the global categories, and
three functional heads namely the CFO, Chief HR Officer and
Chief R&D Officer.
During 2008, Paul Polman was appointed CEO, replacing Patrick
Cescau with effect from 1 January 2009, and Geneviève Berger
joined the UEx team as Chief R&D Officer, having previously been a
Non-Executive Director.
Operating environment
In our markets, we are competing with a diverse set of
competitors. Some of these competitors operate on an
international scale like ourselves, while others have a more
regional or local focus.
We aim to focus on providing consumers with added-value
products that bring Vitality to Life, in several important ways:
• creating and nurturing attractive brands that are trusted and
preferred by consumers and which seek to address consumer
needs and aspirations better than other brands;
• developing and rolling out new and better products and
concepts across our regions and product categories, supported
by innovative communication campaigns; and
• optimising and improving the productivity and efficiency of our
cost and asset base whilst ensuring a consistent high quality of
our products.
Around 70% of our turnover is in countries and categories where
we have a leadership position, as measured by the value of
turnover. We hold the global number 1 position in savoury,
spreads, dressings, tea, ice cream, deodorants and mass skin care.
We hold the global number 2 position in laundry detergents and
daily hair care. We have strong local positions in household care
and oral care.
Unilever’s products are generally sold through our own sales force
as well as through independent brokers, agents and distributors
to chain, wholesale, co-operative and independent grocery
accounts, food service distributors and institutions. Products are
physically distributed through a network of distribution centres,
satellite warehouses, company-operated and public storage
facilities, depots and other facilities.
Our products are sold in over 150 countries around the world. In
many countries we manufacture the products that we sell, while
we also export products to countries where we do not have
manufacturing operations. The manufacturing network is
generally determined by an optimised regional sourcing strategy
which takes account of requirements for innovation, quality,
service, cost and flexibility. Certain of our businesses, such as ice
cream, are subject to significant seasonal fluctuations in sales.
However, Unilever operates globally in many different markets
and product categories, and no individual element of seasonality
is likely to be material to the results of the Group as a whole.
Our products use a wide variety of raw and packaging materials
which we source internationally, and which may be subject to
price volatility. In 2008 we saw unprecedented price increases in
many of our materials, notably in edible oils, which are used in
many food products as well as some personal care products, and
of crude oil, which is relevant to our transport costs but also used
as an input for certain petrochemicals and packaging materials.
Transactions with related parties are conducted in accordance
with agreed transfer pricing policies and include sales to joint
ventures and associates. Other than those disclosed in this report,
there were no related party transactions that were material to the
Group or to the related parties concerned that are required to be
reported in 2008 or the two preceding years.
For more information about related party transactions please refer
also to note 30 on page 135.
Resources
Our brands
We have a strong and well differentiated portfolio of global and
local brands, which are positioned to meet the needs and
aspirations of our consumers across a variety of price points,
segments and channels, allowing us to compete effectively in our
key categories and countries.
In 2008 thirteen of our brands had global turnover of €1 billion
or more. These were Knorr, Hellmann’s, Lipton, Becel/Flora
(Healthy Heart), Rama/Blue Band (Family Goodness), Wall’s/Algida
(Heartbrand), Omo, Surf, Dove, Lux, Rexona (including Sure and
Degree), Axe/Lynx and Sunsilk (including Seda and Sedal).
We manage our brands under the following four category
headings: savoury, dressings and spreads; ice cream and
beverages; personal care; and home care.