RICHARD ANTWI-BOASIAKO
13029817

ASSIGNMENT 1
SELECT ANY FIRM OR INDUSTRY OF YOUR CHOICE AND ANALYZE THE OWNERSHIP AND CONTROL EFFECT ON PROFIT MAXIMIZATION.

UNILEVER PLC as a case study

Ownership of a company may be private, collective, or common. Determining ownership involves determining who has certain rights, duties and share of dividends over the company. These rights and duties, sometimes called a 'bundle of rights', can be separated and held by different parties. The managers of a company may be different from its owners.
Profit maximization is the short run or long run process by which a firm determines the price and output level that returns the greatest profit.
Unilever PLC is a supplier of fast moving consumer goods with operations in more than 100 countries and sales in 180. Unilever PLC's product categories include savoury, dressings and spread; ice cream and beverages; personal care, and home care. The Company's brands include Axe/Lynx, Blue Band, Dove, Becel/Flora, Heartbrand ice creams, Hellmann's, Knorr, Lipton, Lux, Omo, Rexona and Sunsilk. Consumers buy 170 billion Unilever packs worldwide every year, and Unilever products are used over two billion times a day. The Company operates in five regions: Asia, Africa, Central and Eastern Europe, the Americas and Western Europe.
BOARD OF DIRECTORS (EXECUTIVE)
Paul Polman (Chief Executive Officer) and Jean-Marc Huët (Chief Financial Officer)
NON EXECUTIVE
Michael Treschow (Chairman), Laura Cha, Louise Fresco, Ann Fudge, Charles Golden, Byron Grote, Mary Ma, Hixonia Nyasulu, Sir Malcolm Rifkind, John Rishton, Kees Storm, Paul Walsh are the owners of Unilever PLC.
This means that 12.5% of unilever PLC’s ownership is actively involved in the day to day running of the company.

OPERATIONAL HIGHLIGHTS
In 2013 the company demonstrated the progress it is making in transforming Unilever into a sustainable growth company. Turnover was €49.8 billion, down 3.0% with a negative impact from foreign exchange of 5.9% and net acquisitions and disposals of 1.1%.
Underlying sales grew 4.3%. Gross margin rose 1.1 percentage points driven by better mix, margin accretive innovations and savings. Despite higher spend on advertising and promotions, core operating margin rose by 0.4 percentage points.
Unilever’s market capitalization rose from €81.9 billion at the end of 2012 to €83.8 billion at 31 December 2013. The full year dividend for 2013 rose 10% to €1.05. A final dividend of €0.2690 per ordinary share was declared on 21 January 2014. BALANCE SHEET AS AT 31st DEC 2013 €million €million 2013 2012
Goodwill and intangible assets 20,904 21,718
Other non-current assets 12,487 12,324
Current assets 12,122 12,147
Total assets 45,513 46,189
Current liabilities 17,382 15,815
Non-current liabilities 13,316 14,425
Total liabilities 30,698 30,240
Shareholders’ equity 14,344 15,392
Non-controlling interest 471 557
Total equity 14,815 15,949
Total liabilities and equity 45,513 46,189

Goodwill and intangible assets reduced by €0.8 billion mainly due to business disposals and currency movements. All material goodwill and indefinite-life intangible assets have been tested for impairment. No impairments were identified.
During 2013 the Group sold its global Skippy business to Hormel Foods for a total cash consideration of approximately US $700 million. It also sold its Wish-Bone and Western dressings brands to Pinnacle Foods Inc. for approximately US $580 million.
In July 2013 Unilever paid INR 192 billion (€2,515 million) for 319,563,398shares in Hindustan Unilever Limited (representing 14.78% of the total shareholding), increasing the Group ownership to 67%. Accordingly, €104 million previously shown as attributable to non-controlling interests within equity is now attributable to shareholders and the resulting loss on the acquisition recorded in retained earnings is €2,411 million. Current assets were flat versus 2012, with good progress in reducing inventory levels being offset by higher trade and other receivables.
TURNOVER 1
Figure 1 : Turnover down 3.0% with underlying sales growth offset by currency movements
Total dividend per share 1

Figure 2: Dividends increased 10% in 2013.
•Underlying sales growth of 4.3% was well balanced with volume 2.5% and price 1.8%.
•Emerging markets, now 57% of its business, grew underlying sales by 8.7% but were flat in current currency.
•Developed markets reported negative underlying sales growth for the year of
1.3%, with Europe down 1.1% and North
America 1.5%.

Over the last five years the company has seen the steady transformation into a sustainable growth company, underpinned by an energizing and purpose-driven business model. 2013 was another year of progress in that journey and the Boards remain confident that Unilever’s strategy will continue to generate sustainable returns for shareholders. Although the economic environment remains challenging, Unilever’s financial highlights point towards a business that is delivering long-term financial performance. Strong dependable cash flow has led to steadily increasing dividends year on year. The full-year dividend paid in 2013 rose to €1.05, a 10% increase from 2012.

FIVE YEARS OF PROGRESS
Five years ago, under a new Chief Executive Officer Paul Polman (who is part of the owners) and with the help of a chief financial officer Jean-Marc Huët, who is also a shareholder, the Group set out a different and new direction, captured in the Compass strategy. The emphasis was on restoring confidence in Unilever’s ability to deliver consistent top and bottom line growth. Every aspect of the business was reviewed and wide-ranging changes followed. The progress since has been significant. Growth has been strong and well ahead of Unilever’s own markets, with a majority of the business winning share despite the tough environment. Moreover, there has been a marked step-up in the quality of the performance. Significant investments have been made, for example, behind the long-term drivers of growth, brand support and people development. Today, as a result, Unilever’s organizational structure is stronger, its portfolio of brands is more competitive and Unilever is benefiting from a much sharper focus on performance and delivery. Around €10 billion in turnover has been added to the top line and shareholders have undoubtedly benefited from the changes at Unilever – with a 98% cumulative Total Shareholder Return over the last five years. At the same time, the Group has been energized around its commitment to sustainable and equitable growth. The Unilever Boards believe that a business built on the principles of good governance is more likely to succeed over the long term. They responded constructively to an increased number of government and regulatory consultation exercises in 2013. Shaping an environment conducive to good governance is an important investment for the Group. On remuneration, they remain committed to linking pay to the longer-term objectives of Unilever and, in turn, the longer-term interests of shareholders. Unilever US remains their largest operation in terms of turnover so it was a fitting location for 2013’s corporate strategy review which included increased interaction between the Directors and members of the Unilever Leadership Executive. In Spain the Boards saw the robustness of Unilever’s business model in a challenging market. Visits such as these allow the Non-Executive Directors to gain a deeper understanding of the business, to gain more exposure to Unilever’s talent pipeline and to participate in Unilever events, sharing their experience and meeting senior managers. Unilever believes that talent will determine their ability to become an €80 billion business. With this target in mind, the board of directors and the managers work hand in hand with employees to make them more competitive and to achieve their Vision of doubling the size of their business while reducing their environmental footprint and increasing their positive social impact. Everything they do has openness, diversity and inclusion at its heart. They believe it’s only by transparency and co-ordination amongst owners, senior managers and employees that would transform them to be the best they can be and reach their objectives. In 2013, unilever was rated the third most in-demand employer by business social network LinkedIn, behind only Google and Apple.

Conclusion
It is crystal clear from the above analysis that UNILEVER PLC has achieved this great profit maximization over the past 5 years as a result of having its 12.5% ownership directly involved in the day to day management and control of the company.