Unilever 2015 Annual Report Download - page 43

Our busness s subect to rsks and uncertantes On the followng pages we have dentfed rsks that we regard as the most relevant to
our busness These are the rsks that we see as materal to Unlever’s busness and performance at ths tme There may be other rsks
that could emerge n the future Further detals of rsks and mtgatng factors can be found on pages 53 to 57
pages 53 to 57 of the overnance and Fnancal Report
PRINIPAL RISK DESRIPTION OF RISK
BRAND PREFERENE
As a branded goods busness,
Unlever’s success depends on the
value and relevance of our brands
and products to consumers around
the world and on our ablty to
nnovate and reman compettve
onsumer tastes, preferences and behavours are constantly changng and Unlever’s ablty to
antcpate and respond to these changes and to contnue to dfferentate our brands and products
s vtal to our busness
We are dependent on creatng nnovatve products that contnue to meet the needs of our consumers If
we are unable to nnovate effectvely, Unlever’s sales or margns could be materally adversely affected
PORTFOLIO MANAEMENT
Unlever’s strategc nvestment
choces wll affect the long-term
growth and profts of our busness
Unlever’s growth and proftablty are determned by our portfolo of categores, geographes and
channels and how these evolve over tme If Unlever does not make optmal strategc nvestment
decsons then opportuntes for growth and mproved margn could be mssed
SUSTAINABILITY
The success of our busness
depends on fndng
sustanable solutons to
support long-term growth
Unlever’s vson to accelerate growth n the busness whle reducng our envronmental footprnt and
ncreasng our postve socal mpact wll requre more sustanable ways of dong busness Ths means
reducng our envronmental footprnt whle ncreasng the postve socal benefts of Unlever’s actvtes
We are dependent on the efforts of partners and varous certfcaton bodes to acheve our sustanablty
goals There can be no assurance that sustanable busness solutons wll be developed and falure to do
so could lmt Unlever’s growth and proft potental and damage our corporate reputaton
USTOMER RELATIONSHIPS
Successful customer relatonshps
are vtal to our busness and
contnued growth
Mantanng strong relatonshps wth our exstng customers and buldng relatonshps wth new
customers who serve changng shopper habts are necessary to ensure our brands are well
presented to our consumers and avalable for purchase at all tmes
The strength of our customer relatonshps also affects our ablty to obtan prcng and compettve
trade terms Falure to mantan strong relatonshps wth customers could negatvely mpact the
terms of busness wth the affected customers and reduce the avalablty of our products to
consumers
TALENT & ORANISATION
A sklled workforce and agle
organsaton are essental for the
contnued success of our busness
Our ablty to attract, develop, organse and retan the rght number of approprately qualfed people
s crtcal f we are to compete and grow effectvely
Ths s especally true n our key emergng markets where there can be a hgh level of competton
for a lmted talent pool The loss of management or other key personnel or the nablty to dentfy,
attract and retan qualfed personnel could make t dffcult to manage the busness and could
adversely affect operatons and fnancal results
SUPPLY HAIN
Our busness depends on
purchasng materals, effcent
manufacturng and the
tmely dstrbuton of products
to our customers
Our supply chan network s exposed to potentally adverse events such as physcal dsruptons,
envronmental and ndustral accdents or bankruptcy of a key suppler whch could mpact our
ablty to delver orders to our customers
The cost of our products can be sgnfcantly affected by the cost of the underlyng commodtes and
materals from whch they are made Fluctuatons n these costs cannot always be passed on to the
consumer through prcng
SAFE AND HIH
QUALITY PRODUTS
The qualty and safety of our
products are of paramount
mportance for our brands and
our reputaton
The rsk that raw materals are accdentally or malcously contamnated throughout the supply
chan or that other product defects occur due to human error, equpment falure or other factors
cannot be excluded
SYSTEMS AND INFORMATION
Unlever’s operatons are
ncreasngly dependent on IT
systems and the management
of nformaton
Increasng dgtal nteractons wth customers, supplers and consumers place ever greater
emphass on the need for secure and relable IT systems and nfrastructure and careful
management of the nformaton that s n our possesson
Dsrupton of our IT systems could nhbt our busness operatons n a number of ways, ncludng
dsrupton to sales, producton and cash flows, ultmately mpactng our results
There s also a threat from unauthorsed access and msuse of senstve nformaton Unlever’s
nformaton systems could be subect to unauthorsed access or the mstaken dsclosure of
nformaton whch dsrupts Unlever’s busness and/or leads to loss of assets
40 Unilever Annual Report and Accounts 2015Strategic Report
OUR PRINIPAL RISKS