Unilever partners with PwC for consulting, M&A, sustainability, HR and cyber
British-Dutch transnational consumer goods company Unilever hired the consulting and corporate finance arm of PwC on several occasions for several projects, last year. The two firms have a long history of working together, stretching across more than three decades.
Unilever is one of the world’s largest players in the fast moving consumer goods (FMCG) market, with revenues of €53.72 billion in 2017. However, while the firm recorded a solid all-round financial performance last year, anxiety surrounding the approaching culmination of Brexit negotiations in 2019 means that the transnational organisation is keen to plan for a future on mainland Europe.
In the first quarter of 2018, Unilever consequently announced that the branch of its headquarters in the UK would be moving to the Netherlands. As a British-Dutch operation, the entity had previously split its headquarters between Rotterdam and London – an arrangement maintained since Unilever’s founding in 1930. Now, however, with the potential tightening of borders making talent acquisition more of a challenge for its UK-based office, Unilever has opted to unify its bases into a single headquarters unit in the Netherlands, and announced that it will move its second base in the UK to the Zuidas business district of Dutch capital, Amsterdam.
PwC, who have a long-standing business relationship with Unilever will surely hope to be among the beneficiaries of the move. According to a recent statement by PwC’s Chief Economist in the Netherlands, Jan Willem Velthuijsen, the set-up of any headquarters operation in the country sparked extra business for the financial services industry.
Velthuijsen also said personal contacts and networking were major factors in building up consultancy services. He added, “People know one another from university or meet at networking events. Companies needing a lawyer usually select one near their own headquarters. And the decision-makers are found at headquarters. They hire the consultants and lawyers.”
PwC initially became one of Unilever’s preferred suppliers for consulting work in 2014. The move came one year after Unilever had opted to end a 26-year relationship with PwC as auditor, after Britain’s Financial Reporting Council (FRC) prompted corporations to change their auditor at least every decade, following the 2008 financial crisis, which was to some extent blamed on cosy long-term auditing relationships. The Big Four’s grip on auditing gigs with FTSE 350 companies currently stands at 98%, and while EY did not bid for the contract, as they were already a strategic supplier to Unilever, the tender was eventually won by KPMG.
PwC may have lost out on a long-term auditing contract, meanwhile, but the firm benefitted from a new-found freedom to take up a larger consulting role with its client, demonstrating how losing an audit contract can actually be good news for other side of Big Four business. In 2017, this strong relationship continued with PwC providing support in general consultancy, such as management consulting and organisational advice.
2017 work
While the total bill on consulting spent by Unilever is likely to sit in the order of millions, suggesting there was plenty of work to be had for PwC last year, it is unclear precisely how much Unilever spent on PwC consulting services, or on which service lines Unilever most sought PwC’s assistance. For example, while Unilever likely leveraged PwC for some executive remuneration work, the FMCG company only disclosed its total spend on that area, £59,400 – approximately €67,000 – in its 2017 financial reports.
Another area that is likely to have seen action on behalf of Unilever is the corporate finance arm of PwC, which likely supported the client with M&A work. Unilever has a busy year for acquisitions in 2017, hovering up nine firms including American tea-makers Tazo, Australian firm Weis Frozen foods, and Bristol-based Pukka Herbs.
Beyond this, the hot-topic of cybersecurity is likely to have figured heavily, with PwC’s global cybersecurity revenue sitting at around $2 billion. Unilever is also working to make itself more sustainable in future – with sustainability being a line of work that many consulting firms are heavily engaged in. Launched in 2010, the group is continuing to push to meet new targets of the Unilever Sustainable Living Plan, a blueprint for achieving growth, whilst negating Unilever’s environmental footprint and increasing positive social impact. The Plan consists of wide-stretching goals, including everything from the sourcing of raw materials, to how consumers use their brands.
