The growth rate of Unilever Nigeria for the 2012 fi nancial year was very marginal in terms of revenue and other indices. The revenue growth was just two per cent despite the needy sector they found themselves. That is, personal care products sub sector of the manufacturing industry. This could be linked to the stiff competition that is very much available in the sector.
A review of the company's audited report for the period ended December 31, 2012 showed that profi t after tax rose slightly by 1.5 per cent as the company posted N5.59 billion in 2012 year-end compared to N5.52 billion recorded in year 2011. Also, profi t before tax grew slightly from N8.02 billion in year 2011 to N8.19 billion in the review period of 2012, representing a growth of 2.1 per cent.
Company's background
Unilever Nigeria Plc, was incorporated as Lever Brothers (West Africa) Limited on April 11, 1923 by Lord Leverhulme, but the company's antecedents have to be traced back to his existing trading interests in Nigeria and West Africa generally, and to the fact that he had since the 19th century been greatly involved with the soap business in Britain. Unilever Nigeria Plc started as a soap manufacturing company, and is today one of the oldest surviving manufacturing organisations in Nigeria.
After series of mergers/acquisitions, the company diversifi ed into manufacturing and marketing of foods, non-soapy detergents and personal care products. These mergers/ acquisitions brought in Lipton Nigeria Limited in 1985, Cheesebrough Ponds Industries Ltd in 1988. The company changed its name to Unilever Nigeria Plc in 2001.
Unilever Nigeria Plc is a public liability company quoted on the Nigerian Stock Exchange since 1973 with Nigerians currently having 49 per cent of equity holdings.
Business strategy
The company launched a Sustainable Living Plan (SLP) in 2010 to bring together its suppliers, consumers and employees in taking action to build a sustainable business. Through the programme, the company goals are to help 1 billion people improve their health and well being, have environmental footprint of products and source 100 per cent of agricultural raw materials sustainably.
In 2012, the company migrated to a new Enterprise Resource Planning Tool-SAP. According to the Managing Director of the company, Mr. Thabo Mabe, the tool has tremendously enhanced effi ciency and provided leverage need to win in the market place. He added that the result of the employee survey showed that the business improved across all measured dimensions. For example, reward and recognition recorded remarkable 30 per cent increase over 2010 fi gures.
Also, the company aimed to use mobile as its top marketing channel by 2020. The company said that it has already started to implement this strategy by absorbing the mobile data charges when users access Unilever brand websites.
Despite the progress, it maintains one of the biggest challenges it faces is how to encourage consumers to use its products more sustainably at home.
It has also accelerated the integration of sustainability into the heart of its biggest brands, citing the relaunch of its Dove self esteem programme for young people.
Unilever claimed that brands which have made sustainability central to their brand proposition or product innovation accelerated sales during 2012, which it said proves sustainability can drive growth.
Performance
During the year, the company's audited report for the period ended December 31, 2012 showed that profi t after tax rose slightly, while revenue increased from N54.7billion in year 2011 end to N55.5billion in the review period, representing an increase of 1.5 per cent. Consequently, the company has declared a N1.40 kobo dividend payout for investors. In 2011 end, Unilever Nigeria paid a similar dividend of N1.40 per share.
Chairman of the board of directors of the company, Mr. Nnaemeka Achebe, had, stated that 2012 was a proof that Unilever Nigeria was well positioned to continue the upward growth trend into the future. Clearly, the chairman had said: "Continued improvement in working capital, arising from better stock management also facilitated funding of investment from internal sources, and reduced fi nancial costs."
Besides, the he explained that the management has continued to improve on its working capital is far from the reality, at least for now. He said the company had to secure a N2.68 billion bank overdraft and other borrowings to operate during the third quarter of 2012, which was contrary to the situation in the similar period of 2011 when the company run its affairs without such borrowings.
Liquidity
The company benefi tted from lower inputs costs in 2012, where the trend in input cost prices helped offset headwinds on unit growth which stemmed from a squeeze on consumer spend brought about by a reduction in fuel subsidy and increased electricity tariffs amongst others. In 2013, Crude Palm Oil (CPO), prices are forecast to rise steadily. As such, there was an increasing risk that some of the gains in previous quarters will be eroded.
Pending comments from management, although products enhancement and market penetration may help to limit potential negatives, it is believed that unit growth may continue to be held back going forward.
The company total assets marginally increased by 13.2 per cent to N36.5 billion in 2012's fi nancial year, from N32.2 billion recorded in the corresponding period of 2011. Its sellable assets dropped from N16.1 billion in 2011 to N14.8 billion in the review period, while cash and balances at bank stood at N1.86 billion from N2.94 billion in 2011.
The company's inventories dipped to N7.23 billion, from N7.71 billion in 2011, while trade and other receivables and employee loan receivable stood at N5.64 billion, N52.8 billion in 2012 fi nancial year and N5.43 billion, N51.9 billion in 2011 respectively.
Further analysis showed that non- current assets rose by 38.9 per cent to N21.7 billion in the review period, from N15.6 billion in the same period of 2011. Current liabilities increased to N22.3 billion, while non- current liabilities stood at N4.12 billion in 2012, from N3.72 billion in 2011.
Outlook
The launch of Sustainable Living Plan (SLP) may enable the company to record better performance in the current fi – nancial year.
