Analysis of Data and Discussion

The finance department of Unilever mainly focuses on acquiring funds for the firm, managing
funds within the organization and planning for the expenditure of funds on various assets. It
ensures that employees and stakeholders of the business are given high privilege so that the
company can achieve its goals effectively and timely. The company believes that it has a big
agenda, and it needs best individuals with best talents who can outperform others to help achieve
its ambitions.
Unilever’s finance team played a key role in the success of its brands such as dove, magnum etc.
The company achieved its fourth consecutive year of accelerating organic sales growth from less
than 0.5% in 2004 to more than 7% in 2008. Its strategy is to focus on volume growth and
strengthening the competitive position of the company’s brands. While growth has slowed to 4%
in 2009, this is still strong relative to the market. More of our brands are improving share again
behind strong innovations, greater consumer value, increased marketing support, and better
execution. We continue to focus on restoring volume growth while protecting margins and cash
flow for the year. In terms of actual recent performance during this difficult economic time,
volume growth went from –1.8% in the first quarter of 2009 to +2% in the second quarter.
In 2011, we implemented our strategy with discipline, growing ahead of our markets and gaining
share overall despite a tough economic environment.
 Underlying sales growth ahead of our markets at 6.5% with price up 4.8% and volume
growth 1.6%. Emerging markets delivered 11.5% underlying sales growth
 Turnover up 5.0% at €46.5 billion despite a negative currency impact of (2.5) %.
Acquisitions and disposals delivered a positive contribution of 1.2%
 Advertising and promotions spend at €6.2 billion, up €150 million including acquisitions
 Underlying operating margin down by 10bps with a reduction in overheads offsetting
much of the pressure on gross margins from higher commodity costs
 Core earnings per share up 4% at €1.41
 Free cash flow of €3.1 billion
During recent times of pandemic due to covid 19, the finance department of Unilever faced a lot
of challenges. Unilever remain up to date with the changes in financial environment by seeing
trends of overall market, comparing ratios with other firms and changes in overall market
situation of the world and in recent times due to pandemic, Unilever was shifting to online stores
and because of it the financial statements changed drastically. The key elements to successful
financial planning are that the financial team needs to be fully aware of the market and the needs
of the market. The financial plan should be according to the IFRS requirements.
The finance department of the company is fully automated as it is a multinational company and
functions on a mass level, so an automated system is necessity for the financial works of the
firm. Unilever’s finance department is very much advance and uses latest technologies to gather
data and analyze it and make precise decisions through it.
As the pandemic hit the world and all the markets and businesses were largely affected by it but
unilever remained agile and showed resilience. The results of 2020 show the underlying sales
growth of 1.9%. it was due to the execution against Unilever’s five growth fundamentals driving
the competitive growth and step up in competitive performance. Following are some stats of the
company of 2020:
 Underlying sales growth was 1.9%, with 1.6% volume and 0.3% price
 Turnover decreased 2.4%
 Underlying operating profit decreased 5.8%, but increased by 0.7% at constant exchange
rates
 Underlying earnings per share decreased 2.4%, but increased 4.1% at constant exchange
rates
 Diluted earnings per share of €2.12
 Free cash flow up €1.5 billion to €7.7 billion
 Dividend maintained through the year and increased in the fourth quarter by 4% to
€0.4268 per share
As seen in the results, the pandemic hit Unilever as well but, due to its competitiveness and
strong resilience the impact was minor as compared to the whole market.
The future strategies and financial framework of Unilever is to become the global leader in
sustainable business. Its purposeful and futuristic business model drives superior performance,
consistency, and delivering outperforming financial results.
Unilever strengths that differentiate it from its competitors are that over the last 130 years, it has
been successful because of the competitive advantage as it has powerful portfolio of leading
brands and approximately 2.5 billion people uses its products. It has a strong presence in the
market that drives the global growth in the upcoming years the global leadership and its
sustainability is what it is recognized for.
The future financial framework of unilever is increasingly competitive with following objectives:
 Underlying sales growth ahead of our markets, delivering USG in the range of 3% to 5%
 Profit growth ahead of sales growth, on a comparable basis
 Sustained strong cash flow over the long term
 Savings of €2 billion per annum from our well-established ‘Fuel for Growth’ savings
programs
  Restructuring investment of around €1 billion for 2021 and 2022; lower thereafter
 ROIC in the mid-to-high teens
 Net Debt to Underlying EBITDA at around 2x
To conclude, financial department of unilever has done very well in maintain the financial
position of the company despite the pandemic. The results shows that the financial department is
competitive enough and is focused on company’s long-term goals and objectives. Its future
strategies and plans are also very well managed and it will do well over the years.