Unilever Pakistan Limited (UPL) is the largest FMCG company in Pakistan, established 50 years ago. It produces brands like Surf Excel, Sunlight, Close Up, Fair & Lovely, Lux, Ponds, Dove, Brook Bond, Lipton, Cornetto, Wall's, Knorr, Blue Band and others. UPL has seen growth through acquisitions and mergers over the years. Financial analysis of UPL from 2008-2012 shows increasing liquidity, activity, profitability, and market ratios, indicating improved financial performance and investor confidence over time.

1. UNILEVER PAKISTAN LIMITED
Ammara Abbas 014
Nasir Ali 078
Amir Ali 012

2. • Largest FMCG manufacturing company of Pakistan
which is established fifty years ago
• Town of Rahim Yar Khan was chosen to set up
vegetable oil factory in 1948
• Its Head Office was shifted to Karachi from town of
Rahim Yar Khan
INTRODUCTION

3. We help people around
the world meet every
day needs for nutrition,
hygiene and wellbeing,
with brands that help
people look good, feel
good and get more out
of life.
VISION

4. Unilever's corporate mission – to add vitality
to life – shows how clearly the business
understands 21st century-consumers and
their lives. But the spirit of this mission forms
a thread that runs throughout our history.
MISSION

5. • Unilever was created by
Merger of British saop
maker Lever Brothers and
Dutch Margarine producer
• Company grew historically
through acquisitions, it
merged with Lipton in 1989
and Brooke Bond in 1997
HISTORY
Lever Brothers
(UK)
Margarine Unie
(Netherlands)

6. • It became the largest ice-cream manufacturer
in Pakistan through an amalgamation with
Polka in May 1999
• The company operates through 4 regional
offices
• UPL is listed on all three stock exchanges of
Pakistan
CONT....

7. Home Care Products
• Surf Excel
• Sun Light
• Clear
• Close Up
• Fair & Lovely
• Lux
• Ponds
• Dove
PRODUCTS & BRANDS OF UPL

8. Beverages
• Brook Bond Supreme
• Brook Bond A1
• Lipton
CONT....

9. Ice Creams
• Cornetto
• Wall’s Desert
• Wall’s HeartBrand
• Wall’s Kid’s Range
CONT....

10. Food Brands
• Energile
• Badami
• Rafhan
• Knorr
CONT....

11. Spread
• Blue Band
CONT....

12. • Tells company’s ability to fulfil its short term liabilities
• According to financial position of UPL, in 2012, company
improves current ratio 0.3 times from previous year
2011. In recent 5 years company improves asset to
liabilities ratio.
• This ratio is very important for creditors and
shareholders because it tells position in terms of short
term obligations and shows firm has enough liquid
assets.
Liquidity Ratio
Current Ratio
= current asset/current liabilities
Ratios Unit 2012 2011 2010 2009 2008
Current Ratio Times 0.82 0.79 0.83 0.78 0.69

13. • Tells company’s ability to fulfil its short term
obligations more rigorously(accurately)
• For 2012 and 2011 its remains same (0.3 times)
• Creditors of the firm satisfied with company’s financial
position and agreed to invest their capital in company.
• financial manager can improve it in order to make
liquidity position more batter.
Quick Ratio
Ratios Unit 2012 2011 2010 2009 2008
Quick (Acid-test) Ratio Times 0.30 0.30 0.40 0.27 0.19
= (current asset - inventory)/current liabilities

15. • Tells with which speed inventory of company convert into
cash/sales
• In 2012, This ratio improves 10 times as compare to previous year
• Company should catch that inventory which was in 2008 (64
times).
To meet with that ratio:
 company should increase progress of plant
 install higher efficiency plant
 company’s HR manager should increase labour force.
Activity Ratio
Inventory turnover Ratio
= COGS/ inventory
Ratios Unit 2012 2011 2010 2009 2008
Inventory Turnover Times 59 49 46 58 64

16. • Tells in how many days company collects/receives cash
• Soon collection is better.
• Previous 5 years performance is satisfactory for financial
managers
• Company’s ACP is increased yearly due to growth of
business
Average collection period
Ratios Unit 2012 2011 2010 2009 2008
Average collection period Days 6 5 4 4 3
Receivable amount / avg. sales per day

17. • Tells in how many days company paid their liabilities to
creditors
• In 2008, capital structure of the company changed from
equity based towards more liability and debt factors.
Average payment period
Ratios Unit 2012 2011 2010 2009 2008
Average collection period Days 108 98 84 75 83
Payable amount / avg. purchase per day

18. • Reveals how efficiently total assets is utilized in making
sales
• fall in this ratio from year 2009 to 2011, which indicated
that assets have not been used efficiently
• Company maintain this downfall in year 2012
• This decline was mainly due to low demand in tea sector,
the company closed down the factory at Karachi, which
directly affected the turnover of the assets.
Total Asset turnover
Ratios Unit 2012 2011 2010 2009 2008
Total asset turnover Times 325 325 331 334 272
sales / Total assets

19. Activity Ratio
0
20
40
60
80
100
120
2008 2009 2010 2011 2012
Inventory Turnover
Average collection
period
Average payment period

20. • Calculated to assess the ability of the firm to meet its total
liabilities
• Financial structure of UPL shows that it heavily rely on long
term debts to finance its business cash flows
• important for creditors as well as shareholders along with
the management because it measure the debt position of
company.
• Management should decrease its liabilities to increase worth
of company.
Debt Ratio
Ratios Unit 2012 2011 2010 2009 2008
Debt Ratio % 71 74 74 71 80
Total liability / total assets

21. • Indicates how many times the interest charges are covered
by the profits available to pay interest charges
• Interest earned ratio is extraordinary in recent 5 years
• It satisfies the lenders in respect of interest payment
Interest earned Ratio
Ratios Unit 2012 2011 2010 2009 2008
Interest Earned Ratio Times 130 124 34 20 18
EBIT / I

22. • Measures the margin available on sales
• It reflects the efficiency with which a firm produces its
products
• In 2012, GP margin of the company has increased by 1%
• Reason:
• There was a growth in HPC and Ice cream Sector of 25%
and 8% respectively. Gross profit ratio shows increase in
performance of operation manager.
Profitability Ratio
GP margin
Ratios Unit 2012 2011 2010 2009 2008
Gross Profit Margin % 36 35 33 35 35
GP / Sales

23. • Operating Profit margin just increased by 0.5 % and
according to analysis recent 5 years ratios indicated
that the operating profit percentage is increased in
2009 and decreased in 2010.
• As operating ratio shows performance of
Administration manager, analysis shows that
administration manager performed well in 2011 and
012.
Operating Profit Margin
Ratios Unit 2012 2011 2010 2009 2008
Operating profit margin % 15 13 12 14 11
OP / Sales

24. • Net profit margin ratio is used to measure the overall
profitability. Obviously, higher the ratio the better is
the profitability.
• The sales growth of the company was increased by
32% in 2008 but the profitability in relation to sales
was not increased as much as expected.
• The operating expense of the company has increased
by 12% in 2008, this was due to aggressive
advertising cost incurred in ice cream sector, the huge
amount of expenditure was spend on innovations in the
HPC sector.
Net Profit Margin
Ratios Unit 2012 2011 2010 2009 2008
Net profit margin % 9 8 7 8 6
EBIT / Sales

25. • Ratio tells the amount of net income returned as a
percentage of shareholders equity.
• Important to the shareholders, investors and
management.
• It indicates to the shareholders that how much profit is
made available to pay dividend to them.
• Increased by 7% in 2012 as compare with 2011 mainly
due to increase in profit after tax. This shows a
constructive growth in company. The growth in ROE is
largely increased due to exceptional growth of 38% in
HPC sector.
Return on common equity (ROE)
Ratios Unit 2012 2011 2010 2009 2008
Return on common equity (ROE) % 105 98 92 93 90
Earning available for com. Stockholder / common stock equity

26. 0
20
40
60
80
100
120
2008 2009 2010 2011 2012
Gross profit margin
Operating profit margin
Net profit margin
Return on common equity (ROE)

27. • This ratio measures the profit available to the equity
share holder on a per share basis.
• Higher the ratio indicates that the company may pay
dividend at a higher rate.
• The Earning per share of the company was increased in
2012 by Rs.105 from previous year 2011. This was
mainly due to increase in profit after tax.
• It indicates that company have maximized the
shareholder’s wealth and achieving a better return
without issuing any new shares.
Earning per share (EPS)
Ratios Unit 2012 2011 2010 2009 2008
Earning per share (EPS) Rs. 413 308 246 230 149
Earning available for com. Stockholder / no. of share of com. Stock outstanding

28. 0
50
100
150
200
250
300
350
400
450
2008 2009 2010 2011 2012
Earning Per Share
EPS

29. • Measures the investor’s confidence on the company
• Willingness of investors to pay for each Rupees of
company’s earning
• As market ratio is increased every year in previous 5
years. Which shows that investors are highly willing to
invest their money in company.
• Investors are confident when they invest for company.
Market Ratio
Ratios Unit 2012 2011 2010 2009 2008
Price/earning (P/E) ratio Times 24 18 18 10 12
P/E RATIO
= Market price per share of com. Stock / EPS

30. • In 2008, capital structure of the company changed
from equity based towards more liability and debt
factors. This was because of the expansion made in Ice
Cream sector which in return affected the profit
margins.
• There were many factors which affected the company
at large, still the company was able to maintain a
strong position mainly due to stunning profits incurred
by one of its main sector Home & Personal Care
Conclusion

31. Reference: http://www.unilever.com.pk