SUPPLY CHAIN: THE GROWTH ENGINE OF UNILEVERceapg.fgv.br/sites/ceapg.fgv.br/files/eventos/pls_fgv_external.pdf · SUPPLY CHAIN: THE GROWTH ENGINE OF UNILEVER PIER LUIGI SIGISMONDI
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SUPPLY CHAIN: THE GROWTH ENGINE OF UNILEVER
PIER LUIGI SIGISMONDICHIEF SUPPLY CHAIN OFFICER, UNILEVER
FUNDACAO GETULIO VARGAS, BRAZIL, JUNE 2013
2bnconsumers
everyday
55%sales in emerging
markets
190countries
14 € billion brands
WELL POSITIONED FOR GROWTH
BALANCED SCALE ACROSS CATEGORIES
Personal Care
35% of sales
Foods
28% of sales
Home Care
18% of sales
Refreshment
19% of sales
BALANCED SCALE ACROSS GEOGRAPHIES
Asia/Africa/RUB40% of sales
Europe27% of sales
Americas33% of sales
North
America
Europe
North
Asia
SEAASouth
Asia
NAMET &
RUB
Africa
Latin
America
IN 2009 WE SET OUT TO MAKE UNILEVER
‘FIT TO COMPETE’
Sustainable, Profitable, Growth
€40bn
€80bn
environmental impact
An inspiring visionGrowth as primary goal
GETTING UNILEVER TO GROW AGAIN:
• Drive fewer, bigger, better Innovations
• Drive basics in execution
• Make structure & organisation work
• Drive performance culture
• Drive people agenda to competitive levels
Virtuous Circle of Growth
SUSTAINABLELIVING
PROFITABLEVOLUMEGROWTH
COSTLEVERAGE +EFFICIENCY
INNOVATION +MARKETINGINVESTMENT
Underlying sales growth
120bps
2009 - 2012
€10billion
2009 - 2012
+
RESULTS SPEAK FOR THEMSELVES
Growth ahead of our markets
Core operating margin Turnover increased
3,54,1
6,5
10,5
2009 2010 2011 2012
DESPITE CHALLENGES ALONG THE WAY
Commodity Cost Inflation
Euro-zone Crisis
Slowdown in Emerging Markets
Growing Social Inequality
Threat to Planetary Boundaries
VOLATILITY & UNCERTAINTY: THE NEW NORM
Improved product quality
95% win or parity in blind tests
Innovation delivery
Average value per project up 75%
Strong in-market execution
>5M perfect stores
OUR STRATEGY IS WORKING
Perfect Stores
WE HAVE CREATED UNPRECEDENTED VALUE
FOR SHAREHOLDERS
x2
Share price double that
of early 2009
$100bn+
Added 33% & nearly $40bn over last 3 years
Share price Market capitalisation
1350
2833
2009 2012
SUPPLY CHAIN HAS BEEN THE BACKBONE
OF THIS SUCCESS...
Our contribution to sustainable & profitable growth for Unilever…
GROWTH MARGIN & CASH USLP
2009 2015
GROSS MARGIN
%TO
SA
LE
S
1 2 3
ENVIRONMENTAL IMPACT
InnovationService + Quality
Savings & Cash Sustainability
Higher perceived Quality by our consumers...
'09 '12
Incidents
- 75%
'09 '12
-28%
Complaints Product Superiority
17%
57%
Baseline '12
Win
Parity
Loss
More products on shelf = More Growth...
'08 '12
On Shelf Availability
800bps All Countries
All Channels
Joint efforts w/ Customers
OSA clearly drives tangible Top Line Growth:
Successes in D and D&E markets
2010 2012
OSA 94.3% 97.2%
Growth +3.3%
2010 2012
OSA 86.8% 95.2%
Growth +30%
Unilever is clearly ranked
No.1 in ‘Global Logistics
& Supply Chain’ 2012.
81% of respondents consider us favorably,
none consider us
unfavorably
2012 2011
2012 Advantage Global Retailer Relationships Program Ranking
Customers are rating us higher...
'08 '11
We are investing for Growth...
Focus on D&E
14 new sites built since 2008
World Class standards +76%
Capital Expenditure
‘12'08 '12
Return on Assets
+190bps
'08 '12
Powerhouse of Savings & Cash delivery...
Cash Conversion Cycle (Days)Savings Delivery (€bn)
+78%
% TO
'10 '12
1.9% 2.8%
-32 Days
'08 '12
...with less Restructuring of our asset base
Focus on Growth
Asset flexibility
Competitiveness through Manufacturing Excellence
Restructuring (€bn)
-37%
…improving Margins & Cash Flow
'09 '12
Free Cash Flow (€bn)(2009-12)
Core Operating Margin (%)
+120 bps
€15bn~
Trade Working Capital (€bn)
-1,7 -1,9 -1,6-2,6
‘09 ‘10 ‘11 ‘12
Supply Chain has played a pivotal role in Unilever’s sustainability agenda...
Taking a holistic approach to sustainability
26% 3% 2% 68% 1%GHGcontribution
- 800k tons CO2 26% energy from renewables Zero waste in 1/2 of sites
60% paper & board
certified or recycled
Over half Lipton teabags contain
Rainforest Alliance Certified™ tea
1/3 agricultural materials
sustainably sourced100% sustainable palm
Global super-sector
leader in F&B 2012-13
Our Sources of Competitive Advantage
Global Scale, Local Agility Partner to WinSpeed
USLP Talent Powerhouse
1 2 3
4 5
Global Scale
A phenomenal international operations network
GLOBAL SOURCING
Consistent Quality Standards
Cost & Speed
Capital Efficiency
LOGISTICS HUBS
Global/Regional Hubs
High Service Standards
Less Environmental impact
PROCUREMENT
€33bn spend: 95% centrally bought
Ability to absorb VUCA shocks
Industry-wide Sustainability
55%
Category
Local Agility
Unique market penetration to leverage growth opportunities
Premium Hair
Mass Hair
Geographic
Remote
Urban
Channel
Drug Channel
Mom + Pop Grocery
Portfolio
GM: 55.5%
Personal Care
Laundry Care
PC in Drugstore ChannelDrives Service, Sales Growth and
Customer SatisfactionSpecialized Distribution
1st in Advantage2011 & 2012
• Dedicated carriers and drivers• Customized picking and pallets• Special KPI´s – Perfect Delivery• Collaborative “OOS Programs”
Segmentation supply chains drive growth
Brazil Drugstore example
CCFOT:75%94%
Growth:+30%
Speed is our Currency
FASTER INNOVATIONS
Time to market: < 50%
New capabilities for speed: moulds, capacity
Innovations landing in 10+ markets: 9 in 2009 90 in 2012
Axe Apollo – 60markets in 3 months!
RAPID INDUSTRIALISATION
Ground-breaking Commissioning in 6 months Full scale production<12 months
Pre-fabricated, modular hi-tech facilities, shipped across the world- Only 20% of job done on site
Partner to Win with Suppliers
Becoming partner of choice, creating an edge.
GROWTH & INNOVATION
Suppliers engaged >74% of innovation pipeline
€1.3b investment, 40+ plants
KNOW-HOW & ASSETS
Partner of choice: 86% of suppliers
Prime access to capacity & new technologies
SUSTAINABILITY
1.3m smallholder farmers
Long-term commitments
Talent Powerhouse…ever strengthening
GLOBALLY INTER-DEPENDENT INTERNATIONAL CAREERS ADVANCED SKILLS
Highly engaged employees Integrated approach to developing skills
• Proactive recruitment• Career Roadmaps• Succession plans
…and our progress increasingly being recognised externally
Innovation Execution People
• Dove: 17 Awards
• Digital marketer of the year
• Advantage: #1
• Gartner: #4 in world , #1 FMCG
• Preferred supplier in the UK
• Linked In: #5 in demand employer
• Top employer in 27 markets
Supply Chain
Top25
We aspire to become THE BEST in the industry
STANDARDS
Strive for Perfection
Performance Culture
COMMITMENT
Determination & Discipline
Clarity of Purpose
PASSION TO WIN
Hunger for success
Winning Mindset
THANK YOU
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