Our global economic footprint
Our business generates wealth by adding value to the raw materials we purchase, as we manufacture products to exacting standards and market them to consumers.
Sharing the benefits of growth
In 2010 we launched an ambitious vision to double the size of our company while reducing our environmental impacts. With over half our business in fast-growing emerging markets, we are well positioned for future growth.
We work with hundreds of thousands of small businesses around the world. Some of these are smallholder farmers; others are micro-entrepreneurs who either sell or distribute our products. Most are in the developing world.
The role of multinationals in economic development has been the subject of much debate. We believe that businesses like ours can play an important role, not only in generating wealth and jobs around the world, but in sharing technology, developing best practice and setting standards of corporate behaviour.
Our performance in 2010
Against a backdrop of slow economic growth, food price volatility and geopolitical instability, our business has been resilient and Unilever has performed well in 2010. Turnover was up 11% on 2009 to €44.3bn and operating profits rose 26% to €6.3bn.
We achieved volume growth of 5.8% – the best for over 30 years. Our growth was both competitive - we gained market share in many of our leading categories – and profitable, with a steady improvement in underlying operating margin.
Our volume growth was broad based. In the developed world, where growth has been very hard to achieve over the recent past, our volumes were up by around 2%, ahead of the market, in both Western Europe and North America.
In our emerging markets business we grew volumes by around 10% over the year as a whole, with the key businesses of China, India and Turkey all delivering growth well into double digits. Only in Central & Eastern Europe did we see more subdued growth, although even here volumes were comfortably up in difficult markets. The emerging markets continued to be our growth engine and generated 53% of our sales.
We continue to take a long-term view of our business by improving efficiencies, investing in our people and our brands, strengthening our portfolio and building innovation and R&D capabilities.
Our business creates value for many people
As well as the 167 000 people that we employ directly, our business generates economic benefits for many different stakeholders around the world.
Our products are on sale in over 180 countries. This generates income and sustains employment for the many retail customers and distributors who bring our brands to consumers.
We rely on many suppliers around the world to provide the inputs for our business. In 2010, out of our sales income (turnover) of €44.3 billion, we spent €31.8 billion on purchasing goods and services, including €17.6 billion on raw materials, packaging and goods for resale from over 10 000 suppliers. We also buy many different types of non-production goods from around 160 000 suppliers.
Subtracting our purchases of goods and services from our turnover leaves €12.5 billion as the cash value our operations added in 2010.
The chart below shows how the value added was distributed among different stakeholders.
Unilever Group distribution of value added (2010)
Employees gained the largest share at €5.6 billion (46%). The providers of capital who finance our operations gained the second largest share from dividends paid, €2.9 billion (23%). This group includes individual shareholders as well as large holdings by pension funds on behalf of individual policy holders.
Governments received 11% of our value added in 2010 as we paid tax of €1.3 billion on the profits our business generated. In addition we pay local taxes in many markets and collect and pay across to governments more revenues from employment and sales taxes. Local communities also benefited from our voluntary contributions of €69 million.
We assess the benefits we bring to our shareholders through Total Shareholder Return (TSR). This measures the return received by shareholders, capturing both the value of the dividend income and the increase in share price. We measure it over a three-year rolling period, amongst a peer group of 20 other international consumer goods companies. In 2010 we were placed in the upper half of the peer group.