Unilever 2013 Annual Report Download - page 7

Over the last five years we have seen the
steady transformation of Unilever into a
sustainable growth company, underpinned
by an energising and purpose-driven
business model. 2013 was another year
ofprogress in that journey and the Boards
remain confident that Unilever’s strategy
will continue to generate sustainable
returns for shareholders.
Although the economic environment
remains challenging, Unilever’s financial
highlights point towards a business that is
delivering long-term financial performance.
Strong dependable cash flow has led to
steadily increasing dividends year on year.
The full-year dividend paid in 2013 rose to
€1.05, a 10% increase from 2012.
FIVE YEARS OF PRORESS
Five years ago, under a new Chief
Executive Officer, the Group set out a
new direction, captured in the Compass
strategy. The emphasis was on restoring
confidence in Unilever’s ability to deliver
consistent top and bottom line growth.
Every aspect of the business was reviewed
and wide-ranging changes followed.
The progress since has been significant.
Growth has been strong and well ahead
of Unilever’s own markets, with a majority
of the business winning share despite the
tough environment. Moreover, there has
been a marked step-up in the quality of the
performance. Significant investments have
been made, for example, behind the
long-term drivers of growth, including
R&D, brand support and people
development. Today, as a result, Unilever’s
organisational structure is stronger, its
portfolio of brands is more competitive
and Unilever is benefiting from a much
sharper focus on performance and
delivery. Around €10 billion in turnover
hasbeen added to the top line and
shareholders have undoubtedly benefited
from the changes at Unilever – with a 98%
cumulative Total Shareholder Return (TSR)
over the last five years.
At the same time, the Group has been
energised around its commitment to
sustainable and equitable growth, as set
out in the Unilever Sustainable Living Plan
(USLP). By focusing Unilever’s business
strategy around the need to develop
solutions to some of the world’s most
deep-seated social and environmental
challenges, the USLP is motivating
employees and inspiring a growing
number of customers and suppliers
to partner with us.
Five years on, the Boards believe that the
Compass and the USLP provide the right
framework for Unilever and that they will
become increasingly relevant in helping
to address tomorrow’s challenges and
ensuring long-term success for the Group.
MAINTAININ OOD OVERNANE
The Boards believe that a business built
on the principles of good governance is
more likely to succeed over the long term.
We responded constructively to an
increased number of government and
regulatory consultation exercises in 2013.
Helping to shape an environment conducive
to good governance is an important
investment for the Group. On remuneration,
we remain committed to linking pay to the
longer-term objectives of Unilever and,
inturn, the longer-term interests of
shareholders. We believe our current
remuneration framework, set out later
inthe Directors’ Remuneration Report,
reflects this.
BOARD FOUS
In 2013 the Boards continued to visit
a range of Unilever operations with
meetings held at Unilever’s international
management centre at Four Acres, UK;
inNew York, US; and in Barcelona, Spain
in addition to London and Rotterdam.
Unilever US remains our largest operation
in terms of turnover so it was a fitting
location for 2013’s corporate strategy
review which included increased
interaction between the Directors and
members of the Unilever Leadership
Executive. In Spain the Boards saw the
robustness of Unilever’s business model
in a challenging market. Visits suchas
these allow the Non-Executive Directors
to gain a deeper understanding of the
business, to gain more exposure to
Unilever’s talent pipeline and to participate
in Unilever events, sharing their experience
and meeting senior managers. Given the
volatile environment, the Boards have
during the year paid particular attention
to sharpening our focus on key risk areas.
EFFETIVENESS
2013 was the third year in our three-year
Board evaluation cycle. The interviews
with Directors coupled with the evaluation
questionnaires completed by Directors
provided the Boards with important
insights and enabled us to assess
individual contributions and areas for
improvement. The process confirmed
that no major modifications were required
and that the Boards continue to operate
in an effective manner.
You, our shareholders, have the opportunity
to vote on both the Group’s and Boards’
effectiveness at the Annual General
Meetings in May. Although we always strive
to improve, we were pleased, at our AGMs
in May 2013, to receive votes in favour on
all resolutions between 93.53% and 99.98%
for NV and between 88.50% and 99.95%
for PLC.
Unlever Annual Report and Accounts 2013Strategc report4
CHAIRMAN’S
STATEMENT