Hello everyone, today I will present to you a financial analysis of the company Unilever, which is well known of the products like Lipton and Dove. But first I will present to you what I’m going to talk about.
I’m going to talk about the company Unilever, which products it produces and some key facts, secondly I will compare the annual reports, accounts and the shares of 2008-2009. Then, I will form my conclusion and finally I will give you my sources.
Unilever has 174000 people employed over 20 nationalities. Their society contributions contains €91 mln, an example of a project is ‘together for child vitality’ that helps children with obesitas. They are active in about 100 countries in Europe but also Africa, Asia and the US. They invested €891 mln in R&D worldwide. They have an underlying sales growth of 3.5 % and their earnings per share contains € 1.21.
The well-known multinational produces products like Lipton and Dove. A remark: they produce products From the same product category. For example Lux, Dove and Rexona, which are equal products. Is this a good marketing strategy or not? That we can conclude out of the financial analysis.
The financial analysis to compare 2008 with 2009 contains these 4 topics.
The first topic I will present is the consolidated income statement. As you see their turnover decline from €40,523 mln in 2008 to €39,823 mln, thats a descent of 700,000. That’s a relatively small descent. This can be caused by fewer retails or higher costs. Their operating profit declined also with about €2 mln so their costs increased certainly. A reason for the rise of the costs can be a consequence of the financial crisis. Unilever has to purchase raw materials to produce their products. These raw materials have to be purchased from a supplier. If due to the financial crisis the prices of these raw materials increased, their costs will have increased also.
The second topic contains the segment information. In Asia/Africa their turnover increased but in the US and Western Europe their turnover decreased. The same can be deduced from the operating profit. This can be the cause of the population which is larger in amount in Asia and Africa than in Europe.
The third topic I will present is the information by product area. As you can see they get their highest turnover out of savoury, dressings and spread. A small observation is that their operating profit of savoury, dressings and spread is hardly higher then personal care while the turnover of personal care is much lower. So the prices of the personal care products are probably higher. In general their turnover and operating profit decreased.
Their share knows its ups and downs but investors keep believing in Unilever because they keep investing in it. As you see their share was in May 2009 only €15 worth but in the last month they attracted again more investors. Their share is now about €22.945 worth. So in general their share is promising.
Their strategies consist of winning in: Brands and innovation The market place Through continuous improvement With people But are these strategies profitable?
In general their figures declined but in current times after the financial crisis they are recovering remarkably well. With strategies like innovation they keep the customer satisfied and interested. They have the advantage of the several brands they produce because with several brands they can reach several customers and market area’s. The strategy of continuous improvement is their strongest factor because they consider the wishes of their customers and adapt their products to those wishes so the customers will keep buying their products.
They still are making profit and have a good turnover so if they keep considering their strategies, they are an interesting company to invest in because they refer their strategy to the future.
A financial analysis
Eline De Roo 2AF2
1. The company Unilever
2. The financial analysis
1. Comparing annual reports and accounts 2008-
2. Comparing shares 2008-2009
THE COMPANY UNILEVER:
Contributions: € 91 mln
R&D: €891 mln
Underlying sales growth: 3.5 %
Earnings per share: €1.21
THE COMPANY UNILEVER: BRANDS
Heartbrand ice creams
THE FINACIAL ANALYSIS: A COMPARISON OF
Consolidated income statement
Information by product area