Unilever Nigeria goes aggressive on cost reduction for sustainable growth

Unilever Nigeria plc has said it will be more aggressive about driving costs and actively finding savings throughout all facets of its value. This will enable the company to grow sustainably into the future.

The company’s decision is against the backdrop of the tough operating business environment, where the Nigerian consumer faced severe headwinds, which have been reflected in the average – 3 percent earnings decline for the consumer sector in 2014 with the exception of certain segments such as the non-alcoholic beverage segment, which has continued to grow in double digits.

The consumer goods sector has continued to battle with stiff competition from cheap low quality alternatives, counterfeits and grey imports.

However, in recognition of largely untapped opportunities inherent within the consumer goods sector and the ever increasing population and urbanisation trends, Unilever Nigeria has further reinforced the business for the challenges of the future.

“We remained relentless in our business bid to secure a pride of place in the fast moving consumer goods sector and took deliberate measures to step up investments in our brands and market execution while addressing operating cost more aggressively,” Nnaemeka Achebe, chairman, said at the 90^th annual general meeting held in Lagos.

He said deliberate re-focus on rout to market, consumer needs and aspirations, product quality, capacity expansion and zero business waste were already producing a sturdier business model, which enabled the company grow sustainably into the future.

The performance trend of the company from the last quarter of 2014, signifies definite progress towards realising its growth ambitions and making the business more competitive.

The short-term impact to the company’s deliberate transformation actions is a 7 percent decline in revenue, an operating margin of 8 percent in 2014 compared with 13.1 percent n 2013, and a drop in earnings per share from N1.25k in 2013 to N0.64k in 2014.

However, shareholders at the AGM approved pay out of 10 kobo gross per share. Achebe said the business environment will be daunting in 2015, if the collapse of crude oil prices, high foreign exchange rate and overall political environment, were anything to go by, saying however “by working together, keeping focus on our priorities and putting our consumers and shoppers first, we will realise our ambitions.”

 

HOPE MOSES-ASHIKE