Unilever Applies Zero-Based Budgeting To Adjust Operational Margins

Unilever says it is further applying zero-based budgeting to reset its operating margin goals. The new target for the “core operating margin” will be between 40 and 80 basis points a year from 2017 to 2019. The company’s current goal is annual growth of 20 to 40 basis points. CFO Graeme Pitkethly said the company will continue to improve the mix of the business with “margin-accretive innovation” and a focus on margin in the ice cream and home-care categories. Zero-based budgeting cost savings and savings from organizational changes should be about €1 billion by 2019.