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Our strategy

We’ve built a strategy to help us achieve our purpose of making sustainable living commonplace.

Women at a meeting

Our strategic focus

To realise our vision we have invested in a long-term strategy of categories and brands that deliver growth to the benefit of all stakeholders.

Vision

Growing the business

  • Sales
  • Margin
  • Capital efficiency

Improving health and well-being

  • Nutrition
  • Health and hygiene

Enhancing livelihoods

  • Fairness in the workplace
  • Opportunities for women
  • Inclusive business

Reducing environmental impact

  • Greenhouses gases
  • Water
  • Waste
  • Sustainable sourcing

Our long-term strategic choices

Portfolio choices

  • Category choices
  • Active portfolio management
  • Building a Prestige business

Brands and innovation

  • A focused approach to innovation
  • Driving efficiency and margins
  • Increased investment in digital marketing

Market development

  • Routes to market
  • Emerging markets
  • E-commerce

Agility and cost

  • Zero-based budgeting
  • Manufacturing base and overheads
  • Leveraging scale

People

  • Attracting talent
  • Developing talent
  • Values-led and empowered

Growth

Consistent

We deliver consistency in underlying sales growth, core operating margin and free cash flow by continuously investing in our supply chain, our brands and marketing, our people and IT.

Competitive

By investing in innovation we can grow our market share while also seeking to enter new markets and new segments.

Profitable

We seek continuous improvement in our world-class manufacturing to drive cost savings and higher returns, providing extra fuel for growth as cash is redeployed in new strategic opportunities.

Responsible

Growth that’s responsible involves having a positive social impact and reduced environmental footprint, which is the essence of the USLP and is essential in protecting and enhancing our reputation.

Our business model

Comfort factory worker on the production line

Unilever believes profitable growth should also be responsible growth. That approach lies at the heart of our business model, driven by sustainable living and the USLP. It guides our approach to how we do business and how we meet the growing consumer demand for brands that act responsibly in a world of finite resources.

Our business model begins with consumer insight that informs brand innovation, often with partners in our supply chain, to create products we take to market supported by marketing and advertising across a range of distribution channels.

  • Consumer insight

    Societies are dynamic. We not only need insight into trends, but also the ability to predict them in order to maintain our competitive advantage.

  • Collaboration

    We work with governments, NGOs and other stakeholders to drive change that’s good for society and good for business, and we work with partners in our supply chain, to create innovations in products and packaging.

  • Innovation

    Our R&D mission is to build brands through benefit-led innovation unlocked by science and technology.

  • Sourcing

    We have a €34 billion annual procurement programme including agricultural raw materials, 51% of which are sustainably sourced.

  • Manufacturing

    Unilever has the world’s No.1 supply chain according to Gartner. 306 factories and have invested heavily in efficiency and eco-production.

  • Logistics

    We are centralising our operations with a network of global UltraLogistik control towers to improve customer service, cut costs and reduce CO2 emissions. We increasingly use hybrid vehicles and rail rather than road.

  • Marketing

    We use multiple platforms to achieve cut-through in a highly fragmented media. Effective digital marketing is essential and influences shopping at all stages of the decision-making process and through all channels.

  • Sales

    We work closely with retailers to win in the market place, making sure our brands are always available and properly displayed, in all channels from supermarkets to e-commerce.

Growing the business: Group

  • Underlying sales growth*

    2016

    3.7%

    2015: 4.1%

    Underlying sales growth averaged 4.4% over five years.

  • Underlying volume growth*

    2016

    0.9%

    2015: 2.1%

    Underlying volume growth averaged 2.0% over five years.

  • Core operating margin*

    2016

    15.3%

    2015: 14.8%

    Core operating margin has steadily increased over five years from 13.7% to 15.3%.

  • Free cash flow*

    2016

    €4.8 billion

    2015: €4.8 billion

    Unilever has generated free cash flow of €20.9 billion over five years.

* Key Financial Indicators. Underlying sales growth, underlying volume growth, core operating margin and free cash flow are non-GAAP measures. For further information about these measures, and the reasons why we believe they are important for an understanding of the performance of the business, please refer to our commentary on non-GAAP measures on pages 26 to 28 of our Annual Report.

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