Unilever Openflame Finance

8/13/2019 Unilever Openflame Finance

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Changing role of finance

in FMCG company

21st April 2008


2/35

Finance Depts.

Tax

Operational risks

Financial accounting

Transactional finance

Management accounting


3/35

Financial vs. Mgnt accounting

support in decision-making

Future-oriented

Non-financial measures as well

Not-regulated

Internal use only

financial position of company

past-oriented

Financial measures

Regulated by law & accounting

rules

for external purposes


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Finance role evolution

Collect, transform, analyse & support

Business Partnering

Role

Value added BUT at high cost: job attractiveness

and quality issues

50% time 50% time

Collect & Store

Data Quality

SAP BW

Produce & deliver

Finance Operations

Efficiency

Analysis & support

Business Partnering

Value added

Role

Benefit

100% time100% time


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What is the role

of

modern finance?


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External orientation


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Grow th League

% SALES GROWTH MAT VS MAT LY LEAGUE

1

2

3

4

5

6

7

8

9

10

ON 2005 DJ 2006 FM 2006 AM 2006 JJ 2006 AS 2006 ON 2006 DJ 2007 FM 2007 AM 2007

Unilever Masterfoods Bielmar Heinz Raisio

Danone Hochland Nestle Kamis Kraft


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LIQUID TOILET C LEANERS brands market shares in TOT AL BALT ICS

%MarketShare

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

MA 2007JF 2007ND 2006SO 2006JA 2006MJ 2006MA 2006JF 2006ND 2005SO 2005JA 2005MJ 2005MA 2005 DOMESTOS

HARPIC

CILLIT

BREF

YP LO N

CILLIT BANG

DOSIA

KOSLITA

PRIVATELABEL

BLUX

UNILEVER

Market shares in TCL market


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TOP TEA BRANDS SHARES BALTICS- VALUE SHARE TOP TEA BRANDS SHARES BALTICS- VOLUME SHARE

Market shares - tea


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Simple information


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33.5% 32.1% 31.6% 31.2% 32.3% 30.8% 1,569 4.8% 30.5% -3.0% 4,625 7.7% 31.2% -2.6% 9,310 7.4% 31.4% -2.9%

15.4% 13.6% 14.3% 14.2% 16.1% 15.0% 748 8 .7% 14.5% -0.9% 2,253 20.0% 15.2% 0.4% 4,332 19.9% 14.6% 0.3%

7.3% 6.7% 7.9% 7.2% 7.8% 7.9% 497 51.8% 9.7% 2.3% 1,256 43.3% 8.5% 1.6% 2,330 42.2% 7.9% 1.4%

9.1% 8.7% 9.8% 9.2% 11.7% 9.3% 478 17.3% 9.3% 0.2% 1,494 30.4% 10.1% 1.1% 2,863 21.3% 9.7% 0.3%

9.8% 9.4% 8.9% 10.1% 7.9% 10.2% 471 7 .4% 9.2% -0.7% 1,351 11.3% 9.1% -0.4% 2,757 20.9% 9.3% 0.3%

5.5% 7.5% 8.3% 8.3% 6.8% 8.5% 399 62.3% 7.8% 2.2% 1,142 51.4% 7.7% 1.8% 2,329 55.7% 7.9% 1.9%

5.1% 7.1% 7.8% 7.8% 6.3% 7.9% 373 63.0% 7.3% 2.1% 1,065 51.4% 7.2% 1.6% 2,183 55.8% 7.4% 1.8%

7.4% 8.1% 7.5% 8.5% 7.5% 6.5% 337 1.7% 6.5% -0.9% 1,012 3.1% 6.8% -0.9% 2,204 7.3% 7.4% -0.7%

6.8% 6.6% 6.2% 5.5% 5.8% 5.9% 319 5.7% 6.2% -0.6% 886 -2.7% 6.0% -1.2% 1,786 -5.1% 6.0% -1.4%

3.9% 3.5% 3.9% 3.3% 3.5% 3.9% 229 32.1% 4.4% 0.6% 587 28.5% 4.0% 0.4% 1,115 26.5% 3.8% 0.3%

2.9% 2.6% 3.1% 2.9% 3.3% 3.1% 219 71.1% 4.3% 1.4% 526 51.3% 3.5% 0.8% 950 54.4% 3.2% 0.8%

4.0% 3.5% 3.3% 3.4% 3.2% 4.0% 206 16.8% 4.0% 0.1% 556 19.3% 3.7% 0.1% 1,059 16.6% 3.6% 0.0%

3.2% 3.6% 2.8% 2.5% 2.3% 2.5% 129 -9.9% 2.5% -0.7% 364 -6.0% 2.5% -0.6% 801 10.4% 2.7% -0.2%

2.3% 2.2% 1.6% 1.7% 1.2% 1.3% 67 -33.9% 1.3% -1.0% 189 -33.0% 1.3% -0.9% 466 -25.2% 1.6% -0.9%

1.4% 1.1% 0.9% 0.8% 0.8% 0.7% 32 -50.0% 0.6% -0.8% 104 -33.5% 0.7% -0.5% 239 -24.3% 0.8% -0.4%

11.6% 10.4% 9.6% 11.6% 9.3% 8.6% 209 -9.7% 8.1% -3.5% 633 42.0% 8.6%

6.0% 5.3% 5.6% 8.0% 6.5% 5.6% 136 13.8% 5.2% -0.7% 422 82.0% 5.8%

4.7% 4.5% 3.6% 3.2% 2.4% 2.7% 63 -32.9% 2.4% -2.3% 185 0.4% 2.5%

0.9% 0.5% 0.4% 0.3% 0.4% 0.3% 10 -45.0% 0.4% - 0.5% 26 -12.5% 0.4%

16.8% 16.6% 15.3% 15.6% 12.5% 15.1% 358 7 .0% 13.9% -2.9% 1,011 57.1% 13.8%

11.5% 10.6% 12.5% 11.4% 12.3% 12.4% 376 63.9% 14.5% 3.0% 958 145.4% 13.1%

14.8% 13.3% 13.5% 12.7% 15.2% 12.2% 295 0 .0% 11.4% - 3.4% 942 73.9% 12.9%

11.2% 11.6% 10.2% 10.6% 9.4% 9.5% 236 5.5% 9.1% -2.1% 685 77.3% 9.4%

3.0% 4.2% 5.6% 5.1% 4.7% 5.9% 149 150.3% 5.7% 2.8% 400 212.4% 5.5%

3.8% 3.5% 3.1% 2.1% 2.2% 2.5% 58 -24.0% 2.2% -1.6% 169 25.6% 2.3%

17.4% 16.1% 17.0% 16.1% 16.0% 17.7% 686 38.1% 20.3% 2.8% 1,555 29.5% 18.2% 1.9% 3,009 23.9% 17.3% 1.2%

14.2% 12.7% 13.6% 13.0% 12.6% 14.3% 579 43.3% 17.1% 2.9% 1,275 33.4% 14.9% 2.0% 2,437 28.7% 14.0% 1.4%

0.7% 0.7% 0.7% 0.6% 0.6% 0.6% 18 -10.2% 0.5% -0.2% 50 -15.8% 0.6% -0.2% 109 -33.2% 0.6% -0.5%

2.5% 2.7% 2.7% 2.5% 2.8% 2.7% 89 23.8% 2.6% 0.1% 231 25.9% 2.7% 0.2% 463 31.2% 2.7% 0.3%

15.7% 16.8% 15.6% 13.8% 15.3% 16.8% 559 24.9% 16.5% 0.8% 1,388 32.9% 16.2% 2.1% 2,753 31.3% 15.8% 1.9%

12.5% 12.0% 11.0% 9.3% 11.0% 11.3% 372 4 .1% 11.0% -1.5% 947 -5.1% 11.1% -2.4% 1,896 -2.1% 10.9% -1.9%

10.2% 9.7% 9.4% 9.3% 9.5% 9.5% 340 16.9% 10.0% -0.2% 831 15.0% 9.7% -0.1% 1,670 16.5% 9.6% 0.1%

4.2% 4.7% 5.6% 8.0% 5.9% 6.1% 168 41.5% 5.0% 0.8% 477 50.9% 5.6% 1.3% 1,025 59.2% 5.9% 1.6%

22.0% 20.0% 21.9% 22.0% 20.5% 22.2% 522 39.7% 25.6% 3.6% 1,174 31.9% 23.1% 2.8% 2,234 29.4% 22.2% 2.4%17.8% 15.5% 17.3% 17.2% 15.7% 17.7% 433 43.5% 21.2% 3.4% 944 33.5% 18.5% 2.5% 1,771 29.0% 17.6% 1.9%

4.2% 4.6% 4.6% 4.8% 4.8% 4.5% 89 23.8% 4.4% 0.1% 231 25.9% 4.5% 0.4% 463 31.2% 4.6% 0.6%

21.0% 20.4% 18.9% 17.7% 19.1% 18.7% 372 4 .1% 18.2% -2.8% 947 -5.1% 18.6% -4.1% 1,896 -2.1% 18.8% -3.4%

15.4% 17.3% 15.3% 13.9% 15.5% 16.3% 322 22.9% 15.8% 0.3% 807 35.8% 15.9% 2.3% 1,580 38.0% 15.7% 2.6%

13.0% 12.2% 11.8% 12.3% 12.6% 12.5% 272 23.6% 13.3% 0.4% 654 23.1% 12.8% 0.8% 1,257 26.9% 12.5% 1.1%

4.4% 5.5% 5.0% 5.3% 4.6% 5.0% 94 26.4% 4.6% 0.2% 240 0.5% 4.7% -0.7% 504 -8.0% 5.0% -1.3%

11.2% 11.0% 10.6% 10.0% 10.3% 11.3% 164 33.3% 12.9% 1.7% 381 22.7% 11.6% 0.8% 775 10.4% 11.0% -0.4%

1.8% 1.8% 1.8% 1.3% 1.5% 1.6% 18 -10.2% 1.4% -0.4% 50 -15.8% 1.5% -0.5% 109 -33.2% 1.6% -1.1%

17.0% 16.8% 16.8% 14.3% 15.6% 18.4% 237 27.7% 18.8% 1.8% 581 29.2% 17.7% 2.0% 1,174 23.3% 16.7% 1.2%

12.7% 14.7% 13.1% 10.4% 10.6% 12.1% 158 13.1% 12.5% -0.3% 387 8.6% 11.8% -0.7% 856 1 6.2% 12.2% 0.2%

13.3% 11.5% 11.6% 10.0% 10.8% 11.0% 140 -3.8% 11.0% -2.2% 360 3.2% 11.0% -1.2% 770 13.5% 11.0% -0.1%

8.6% 9.2% 10.6% 13.9% 11.4% 10.6% 117 24.7% 9.2% 0.7% 339 34.3% 10.3% 1.5% 770 42.6% 11.0% 2.2%

9.4% 10.4% 10.0% 9.2% 8.6% 8.5% 103 0.2% 8.2% -1.3% 276 2.7% 8.4% -1.0% 644 15.0% 9.2% 0.0%

6.5% 6.4% 6.3% 6.2% 5.7% 5.2% 68 -4.0% 5.4% -1.1% 177 -7.3% 5.4% -1.3% 413 -6.9% 5.9% -1.3%


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13,1

TR '06

5,5

Price

5,5

CPP

-7,0

ToT

0,1

Vol/Mix -1,4

Costs

4,8

A&P

-1,5

Indirects

19,2

TR '07

20xx Profit Variance

14.5


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6%9%

5%

6%

1%

17%

7% 6%

26%

14%3%

5%

8%

4%

4%

1%0%

4%

29%

16%

14%

15%

Sales structure


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Media spent


15/35

Media spent per category in 20xx-20xx

TEA YF BOULLIONS&SOUPS SPREADS DRESSINGS &

SAUCES


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6P - Advertising

0

5

10

15

20

25

30

35

40

45

50

0 200 400 600 800 1000

GRPs

Awareness

increasing

returns

diminishing

returns

sharply

diminishing

returns

MAC

min

MAC

max

The awareness percentages are at the agreed frequency, assuming memory decay


17/35

Promo evaluation


18/35

Promotions


19/35

Source of incremental sales???

Cannibalization?

Other UL customers?

Stock loading? Time phasing?

SUPER

Do we want that?

New consumers?

Loyal consumers?

Increased consumption?

Competition?


20/35

Close-to-business


21/35


22/35

Economic update


23/35

Economic update Baltic countries


24/35

Innovative tools

for

Innovative Business Partnering

DMUU


25/35

DMUU

Results expectations

calibrated sensibly

Better decision-making

Key success factors

Risk awareness

Focus on key areas


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Innovation Tracking

Feb '05 Mar '05 Apr '05 May '05 Jun '05 Jul '05 Aug '05


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Buying Behaviour

Market Dynamics

and

Financial Return

6Ps

(Brand Levers)

Volume

Price

NPS/Value

Loyalty

Purchase frequency Pack size boughtPenetration

Volume Market Size Volume Share

Value Market Size Value Share

Market growthEconomy, Trends, Development

Profit

Pack ProductProposition Promotion PricePlace

Margin

6P Brand Growth Model

6P Brand HealthBrand Communication Customer Extended


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STRONG AND WEAK PROFILES

- | + - |+ - | + - |+

Weak Strong

+3.

1+9.3

0-

5.2

Conviction

Advantage

Performance

Relevance

Presence

rand VoltageThe Brand Voltage is asummary measure of

the brands growth

potential. A high

voltage indicate thebrand is likely to

maintain or grow share.

With a low voltage a

brand can still grow, but

will have to work harder

to stand still, and will

over time be more

vulnerable.

rand SignatureThe BrandSignature

helps

understanding

the brands

strengths and

weaknesses

in comparison

with brands in

the same

category.

6P - Brand Health /Activation Development Innovation Supply Chain Other

Olympic Classic Tiger Specialist

Defender Fading Weak Clean Slate

?

Purchasing Behaviour can be measured by Value share, penetration, loyalty (behavioural +

attitudinal), total turnover

Operational Factors are

Distribution, relative price, SOS / SOM, Promotional

pressure

Consumer Mind and Quality are measured by

Brand Health Check Pyramid, Brand Signature, Brand

typology, Brand Voltage

Behavioural Strength Purchasing BehaviourMeasured By

Executional Strength Operational FactorsMeasured By

Attitudinal StrengthConsumer Mind

and QualityMeasured By


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MMM

quantify effectiveness of drivers

remove trend and analyse movement around them

distinguish true cause and effect from spurious relationships

0

500 000

1 000 000

1 500 000

2 000 000

2 500 000

lis 97 maj 98 pa 98 maj 99 pa 99 kwi 00 pa 00

TVAdvertising0

500

1000

1500

Print0

10,000

20,000

30,000

40,000

Coupon0

50,000

100,000

150,000

Feature0

50

100

150

Display0

10

20

30

40

50

60

Featuresand Display

0

10

20

30

40

AveragePrice

24

26

28

30

32

Value Drivers Sales


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Marketing Mix model - what is it?

Econometric model to measure the short term impact of

different elements of the marketing mix on sales

0

5

10

15

20

25

30

35

40

1988 1990 1992 1994 1996 1998 2000

0

5

10

15

2025

30

35

40

1 988 1 990 1 99 2 19 94 19 96 19 98 2 000

Advancedeconometricanalysis

Total Sales

TV Advertising

PromotionWorks on historical data to

provide a basis for

decisions about the future

M k ti Mi M d lli


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Marketing Mix Modelling

Price drives growth?


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Price drives growth?

1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 19880

500

1,000

1,500

2,000

2,500

3,000

3,500

2,200

2,400

2,600

2,800

3,000

3,200

3,400

VOLUME Real PRICE

VOLUME Real PRICE

2,200 2,400 2,600 2,800 3,000 3,200 3,4000

500

1,000

1,500

2,0002,500

3,000

3,500

Real Price

Volume

1977

1978

1979

1980

1981

1982

1983


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Growth drivers quantified

Growth is accounted for by:

- Sampling 20%

- Distribution 15%

- Habits 15%

- Advertising 10%

- Price 40%


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Modern finance

Expertise jobs

Financial accounting

Business Partnering

Promo evaluation

MediaBusiness info

External view

Economy

Close-to-business


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The EndThank you

Unilever Openflame Finance

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Transcript of Unilever Openflame Finance