Business Budgeting

Budgeting Challenges of Unilever



Budgeting Challenges of Unilever

Introduction

The study is related to budgeting challenges which particularly focuses on Unilever. This phenomenon is important to study as the Unilever might face budgeting challenges in the future. Unilever is a consumer goods manufacturing group based in the United Kingdom. Unilever is engaged in supplying consumer goods in the foods, home and personal product categories. Unilever supplies its consumers product for nutrition, hygiene and personal care and is active in emerging markets in Asia, Africa, Central & Eastern Europe and Latin America. Unilever's portfolio includes such well-known brands as Knorr, Lipton, Hellmann's, Magnum, Omo, Dove, Lux and Axe/Lynx. Unilever manages its brands under the following four category headings: savoury, dressings and spreads; ice cream and beverages; personal care; and home care. Unilever's products are sold in over 170 countries around the world. This paper aims to highlight the importance of the budgeting challenges of Unilever and showing it as an element of planning and control financial expressed in economic terms within the framework of a strategic plan can be an instrument or tool that promotes integration into the different areas that have the public participation as a contribution to all initiatives within each responsibility center and responsibility expressed in terms of programs for their performance in terms of a clearly defined structure for this process.

Financial Performance of Unilever

The company's personal care segment has retained slow, but steady growth. Over the five years to 2012, the global personal care revenue of the company is expected to increase at an average annual rate of 8.4% to $23.2 billion, reflecting the necessary nature of these products. Meanwhile, UK industry-specific revenue is expected to grow on average 4.8% per year to an estimated $3.0 billion. Domestic revenue suffered through the recession, stifling UK growth in 2008.

Revenue growth in the company's global personal care segment has boosted consolidated revenue during the five-year period. In 2010 alone, the personal care segment grew 10.7% to about $18.3 billion in global revenue. It is estimated that the company's total net revenue has grown at an average annual rate of 5.5% to $70.4 billion over the five years to 2012. The weakness of the domestic economy has restrained UK operations (Anthony and Marcia, 2005, 14-16). While many of Unilever's products are not discretionary, Americans' plummeting sentiment and tight budgets proved to be detrimental even to this company. In 2009, revenue from Unilever's Americas geographical segment dipped 7.8% to $17.9 billion.

Unilever completed several acquisitions during 2011. Unilever acquired a controlling stake in Russian cosmetics player Kalina. It also sold its Sanex brand to industry player Colgate-Palmolive for $940.0 million, following a European Commission requirement that Unilever sell the Sanex brand. In return, Unilever purchased Colgate's laundry detergent brands in Colombia. In May 2011, Unilever acquired Alberto Culver, a personal products company that includes brands like Alberto V05 and Noxzema. The transaction cost Unilever $3.7 billion, and Alberto Culver's net revenue in 2010 totaled about $1.6 ...