Unilever 2009 Annual Report Download - page 29

Our business (continued)
26 Unilever Annual Report and Accounts 2009
Report of the Directors About Unilever
Key indicators 2010 – performance and portfolio
Throughout 2009 Unilever has consistently communicated to
shareholders that its main business objective is to restore volume
and underlying sales growth while steadily improving operating
margins and cash flow. There are a number of strategic priorities
which support this objective. It is this combination of top-line
revenue growth and bottom-line profits growth that Unilever
believes will build shareholder value over the longer term. It is our
objective to be among the best performers in our peer group.
Going forward we will therefore report our financial performance
against a revised set of key indicators, certain of which will also be
reflected in targets for executive and management remuneration.
Principal among these will be:
• Underlying sales growth (as previously reported);
• Underlying volume growth (sales growth excluding the impact
of pricing changes);
• Improvement in underlying operating margin before RDIs
(replacing reported operating margin); and
• Operating cash flow (replacing ungeared free cash flow).
Key indicators – people and sustainability
Identifying and addressing social and environmental concerns is
essential to the long-term success of Unilever, as recognised in our
new vision to double the size of the business, while reducing our
environmental impact. Handling these aspects of our operations
well not only represents sensible management of risk, but presents
new opportunities for business growth. We have many indicators
to measure our progress in these areas, however the ones we
regard as key are people’s safety and the three environmental
measures below.
We take seriously our responsibility to provide a safe workplace.
We aim to continuously improve the health, safety and well-being
of everyone working for or on behalf of Unilever. A key measure
of our progress in this area is our total recordable accident
frequency rate, which counts all employee workplace accidents
except those requiring only simple first aid treatment.
We are committed to meeting the needs of customers and
consumers in an environmentally sound and sustainable manner,
through continuous improvement in environmental performance
in all our activities. As a multinational business, it is essential that
we exercise the same concern for the environment wherever we
operate. The environmental measures that we regard as the most
significant in relation to our business are those relating to the
amounts of CO2from energy that we produce, the water that we
consume as part of our production processes, and the amount of
waste that we generate for disposal. For further information
please refer also to page 20.
The table below shows the results for the last three years.
2009 2008 2007
Total recordable accident frequency rate
(TRFR) per 1,000,000 hours (a) 1.91 2.10 2.60
CO2from energy per tonne of
production (kg) 141.61 145.92 149.18
Water per tonne of production (m3)2.80 2.97 3.05
Total waste per tonne of production (kg) 6.63 7.91 7.56
(a) As a consequence of improving our safety performance over many
years, in 2009 Unilever decided to increase the denominator used
to calculate TRFR from 100,000 to 1,000,000 hours. Using this
new higher factor has the effect of increasing our current and
historical TRFR data by a factor of ten, as shown in the table
above.
Data for 2009 is preliminary. It will be independently assured and
reported in our online Sustainable Development Report 2009 at
www.unilever.com/sustainability The data shown for 2008 and
2007 has been assured.
The type of assurance undertaken has been limited to enquiries of
company personnel and analytical procedures together with
review on a sample basis of the operation of processes relating to
performance data noted in the table above. Assurance of this
nature is substantially less in scope than a financial audit and does
not include detailed sample testing of source data, processes or
internal controls. None of the assurance services in this area is
provided by Unilever’s external financial auditors.
On pages 18 to 21 of this report we give examples of the ways in
which our brands are addressing consumers’ social and
environmental concerns. A comprehensive review of Unilever’s
social and environmental performance can be found in our annual
Sustainable Development Report, available online at
www.unilever.com/sustainability Our online Report will contain
updated and independently assured results for 2009 for the
measures above, as well as trend information that demonstrates
our performance over the longer term.
Ten-year trends in many of the measures described above,
together with a range of other indicators, are included in the
document entitled ‘Unilever Charts’ which can be found on our
website at www.unilever.com/investorrelations/annual_reports
Organisation
Unilever’s organisation comprises regions, categories and
functions.
Our regions have profit responsibility for the local go-to-market
operations in their geographic territory. The focus is primarily to
build and develop relationships with customers, to develop the
regional supply chain to deliver customer service and asset
productivity, and to deploy brands and innovations effectively,
focused on excellent execution in the market place. The
performance of the regions is measured in terms of in-year
financial results, customer service levels and market positions.