Restructuring plans centred on the ‘One Unilever’ business transformation programme are reaping benefits, the Anglo-Dutch food and household goods maker Unilever. In its fourth quarter and annual results for 2007, Unilever stated that the ‘One Unilever’ strategy of IT and manufacturing streamlining, and other cost reduction programmes had delivered €1bn in savings.
Unilever said it achieved underlying sales growth of 5.5 per cent in 2007, with an underlying sales growth of 6.1 per cent in the fourth quarter. “The fourth quarter was a strong finish to a good year,” said Patrick Cescau, group chief executive. “2007 marks the third successive year of accelerating sales growth and came with an underlying improvement in margin.
“The reshaping of the business and the acceleration of our change programme are bringing real benefit,” Cescau said of the ‘One Unilever’ programme. Highlighting its benefits, the annual report states that in Europe the roll out of a single SAP enterprise resource management (ERP) system continues and that two-thirds of Europe is on the platform, and full implementation will be completed by the end of 2008.
‘One Unilever’ aims to make Unilever a simplified organisation to work within, with a single converged IT platform. It will also standardise business processes across the three operating regions of Unilever: Asia/AMET (Africa, Middle East and Turkey), Europe and Americas. It is hoped ‘One Unilever’ will increase revenue growth and operational abilities.
In the Americas ‘One Unilever’ saw Argentina, Brazil and Mexico consolidate operations into a single head office in 2007, a move that will be followed this year in the US. In 2007 the US went over to a single SAP system, following in the wake of the Latin American countries. Four of the countries in the Asia/AMET region have also adopted the SAP platform.
The restructuring of Unilever cost €875 million (£655 million) in 2007, with ‘One Unilever’ consuming £405 million. A further £130 million was invested in restructuring the European supply chain. “In 2008 we expect to see a further underlying improvement in operating margin,” Cescau said.
In May 2007 Unilever signed a Global Enterprise Agreement with SAP, which gives the maker of Dove Soap and Knorr soups greater access to SAP technology, as well the opportunity to collaborate on best practices. “This agreement enables us not only to accelerate business transformation, but also drive significant IT simplification as we move toward our destination IT architecture,” Neil Cameron, Unilever CIO told IDG reporters in May.