Unilever 2015 Annual Report Download - page 35

11%
12%
9%
20152014201320122011
7%
6%
OUR STRATEY FOR LONTERM
VALUE REATION OMBINES
LEAR PORTFOLIO HOIES
WITH INNOVATION, MARKET
DEVELOPMENT AND
OPERATIONAL EFFIIENY
Ths strategy s bult on the foundaton of
our Purpose – to make sustanable lvng
commonplace – brought to lfe through
the USLP Ths way, we delver to our
shareholders growth that s consstent,
compettve, proftable and responsble
However, a sustanable busness requres
a sustanable world and consumers are
ncreasngly demandng that busness plays
ts part More of our brands are meetng
that demand and delverng stronger and
faster growth Our Sustanable Lvng
brands (detaled on page 27) accounted for
half our growth n 2014 and grew at twce
the rate of Unlever’s other brands
Durng the year we contnued to mprove
returns to shareholders wth dvdends
rsng 6% and our share prce endng the
year up 23% for our NV shares and 11%
for our PL shares
Over the longer term our approach
contnues to delver consstent results
Between 2011 and 2015 underlyng sales
grew 49% per year, whch was ahead of
our markets, and core operatng margn
grew by an average of 026 percentage
ponts per year Over the same perod core
earnngs per share grew by 7% per year on
average at current exchange rates and 10%
per year at constant exchange rates We
have delvered an average free cash flow of
38 bllon and dvdends have ncreased
an average of 8% per year over ths perod
More detal on our fnancal growth model
can be found on page 34
To mprove returns we have four category
strateges wth dstnct but complementary
obectves, each fulfllng a specfc role
across the portfolo Personal are
now accounts for 38% of turnover – our
largest category – and s growng ts core
whle developng ts premum range
through acquston (see facng page
for more detals)
Home are s mprovng proftablty and
scalng ts household cleanng busness
whle Refreshment s tasked wth growng
ce cream cash flows and acceleratng
top lne growth n tea Foods’ obectve
s to accelerate growth and sustan strong
proftablty and cash flows
Innovaton s key to drvng growth and
margns Research and development s
embedded n each category wth a focused
ppelne of nnovatons We are executng
larger proects and snce 2013 the average
proect sze has ncreased by 25% In
addton, more than 70% of our nnovatons
are margn accretve We have also
sgnfcantly ncreased the applcaton
of new technologes wth more than 45%
of the value of our nnovaton portfolo
based on new technologes compared
wth 35% n 2013
Our brands beneft from award-wnnng
marketng wth an ever greater emphass
on dgtal marketng that dovetals wth
the growth n our e-commerce sales whch
are beneftng from our mprovng expertse
n executng through onlne channels
Our broader customer development
programmes are targetng new channels
such as drug stores for Personal are
and out-of-home for Refreshment,
and our Perfect Store programme has
reached almost 10 mllon executons
across stores and categores n 2015
from 69 mllon executons n 2013
Our growth model s enabled by a leaner,
more talented and effcent organsaton
Proect Half for rowth has delvered
around 500 mllon of annualsed cost
savngs and Unlever contnues to beneft
from savngs of more than 1 bllon per
year n supply chan
EMERIN MARKETS
In 2015 emergng markets demonstrated
some recovery, wth our underlyng
sales up 7% compared wth 6% n 2014
However, ths s stll below the 9%
average snce 2011 and recent years have
hghlghted the volatlty of these markets
However, we frmly beleve these
countres wll delver the best long-term
growth prospects as populatons and per
capta consumpton expand Emergng
markets now account for 58% of Unlever
turnover, up from 57% n 2014
A key element of our success s managng
through volatlty and a key reason s the
development of our local management
expertse Of our top 20 markets, 12 are
emergng markets and n those 12 markets
more than 80% of the management s local
Local understandng ensures the rght
decsons are taken for local customers
and consumers, whch helps delver our
global strategy
58%
Turnover from emergng markets
Our average emergng markets growth
over the perod was 9%
32 Unilever Annual Report and Accounts 2015Strategic Report
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