Unilever PLC · LSE:ULVR
Unilever — Q2 2010 Earnings Presentation
20 slides from Unilever's earnings presentation, Aug 5, 2010
Slide 1: Q2 2010 Results
04/08/2010 Q2 2010 Results 5th August 2010 Paul Polman (CEO) – Jean-Marc Huët (CFO) James Allison (Head of IR & M&A) Safe Harbour Statement This announcement may contain forward-looking statements, including ‘forward-looking statements’ within the meaning of the United States Private Securities Liti
Slide 2: Priorities for 2010 / Building Momentum in Tough Markets
04/08/2010 Priorities for 2010 • Continue to drive profitable volume growth • Steady and sustainable improvement in full year underlying operating margin • Strong cash flow Building Momentum in Tough Markets • Volume share up around 50 bps • Winning in emerging markets where competitive intensity is
Slide 3: Q2 10: Strong Top Line Growth
04/08/2010 Jean-Marc Huët Chief Financial Officer Q2 10: Strong Top Line Growth -0.1% €11.8bn USG 3.6% 8.7% -2.0% €10.5bn 5.7% Turnover Q2 Vol/Mix Price Currency Acq/Disp Turnover '09 Q2'10 3
Slide 4: H1 10: Underlying Sales Growth / Q2 10: Improved Pricing
04/08/2010 H1 10: Underlying Sales Growth €21.9bn 0.0% USG 3.8% 5.6% -2.6% 6.6% €20.0bn Turnover H1 Vol/Mix Price Currency Acq/Disp Turnover '09 H1'10 Q2 10: Improved Pricing 6.8% 2nd quarter of flat pricing at group level 2.1% -0.2% -2.0% -3.1% -3.3% Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 4
Slide 5: Q2 10: Improved Pricing / Underlying Volume Growth
04/08/2010 Q2 10: Improved Pricing 6.8% Price growth -2.6% YTD 2.1% -0.2% -2.0% -3.1% -3.3% Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q2 10: Underlying Volume Growth Underlying Volume Growth 6.6% YTD 7.6% 5.7% 5.0% 3.6% 2.0% -1.8% Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 5
Slide 6: Volume Growth is Broad Based
04/08/2010 Volume Growth is Broad Based Categories Top Brands MCOs 11 / 11 12 / 13 18 / 22 Q2 10: Volume Growth by Region Emerging Markets Americas 11.4% 11.1% 9.5% 6.3% 5.5% 5.0% 3.8% 4.6% 3.3% 1.6% Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Asia/AMET/CEE Western Europe 4.0% 11.7%
Slide 7: Q2 10: Strong Volume Shares
04/08/2010 Q2 10: Strong Volume Shares 12-week volume share change vs. prior year 80 40 bps change 0 -40 -80 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Winning Where Markets are Toughest Market Value Share Difference Turkey Indonesia Brazil Home Care Personal Care Home Care 10% 13% 42% 45% 52% 53% 20
Slide 8: Q2 10: A&P Continued Investment
04/08/2010 China: Narrowing the Gap to Market Leaders Market Value Share Difference China China China Savoury Home Care Personal Care 20% 16% 24% 22% 11% 4% 2008 2009 2010 MAT 2008 2009 2010 MAT 2008 2009 2010 MAT Unilever Market Leader Unilever Market Leader Unilever Market Leader Q2 10: A&P Contin
Slide 9: H1 10: Strong Savings Continue
04/08/2010 H1 10: Strong Savings Continue Local • H1 Savings €0.7bn Buying efficiency €0.4bn €0.1bn • Full year savings Restructuring ahead of €1bn €0.2bn Q2 10: Continued Gross Margin Improvements 290bps 310bps 240bps 120bps -190bps -25bps Gross Margin Improvement 180bps YTD Q1 09 Q2 09 Q3 09 Q4 09
Slide 10: H1 10: Underlying Operating Margin / Earnings Per Share
04/08/2010 H1 10: Underlying Operating Margin 180bps 180bps 30bps 14.6% 14.9% +30bps H1 '09 GM % A&P % Indirects % H1 '10 Change Change Change H1 10: Earnings Per Share 3% 2% -2% 3% 5% €0.70 7% 8% Fully Diluted EPS Growth 10% 36% €0.52 EPS H1 09 Operat Restruct' Currency Pension Disposals Tax excl.
Slide 11: H1 10: Free Cash Flow
04/08/2010 Third Consecutive Quarter of Negative Trading Working Capital TWC % Turnover 5% MAT Average WC % T/over 4% Closing WC % T/over 3% 2% 1% 0% -1% -2% -3% -4% Q1 ‘09 Q2 ‘09 Q3 ‘09 Q4 ‘09 Q1 ‘10 Q2 ‘10 H1 10: Free Cash Flow €0.0bn €0.2bn €0.2bn €1.3bn €1.3bn FCF H1 2009 Net Cash Flow Net inter
Slide 12: Balance Sheet
04/08/2010 Balance Sheet • Net debt at €7.6bn, up from €6.4bn at end 2009 – €1.4bn adverse effect of exchange rates • Pension deficit €4.0bn, from €2.6bn – €1bn from lower corporate double A bond rates • Cash contributions to pensions in the first half of around €350m • Quarterly dividend of €0.208
Slide 13: Strategic Framework: The Compass
04/08/2010 Strategic Framework Winning with brands and innovation Winning with The Winning in the people Compass marketplace Winning through continuous improvement Winning with Brands and Innovation Innovation Rate Ahead of 2009 • Highest ever 33% innovation rate • Led by Personal H1 2010 Care 13
Slide 14: Innovating Category Wide: Hair
04/08/2010 Winning with Brands and Innovation Innovation Rate Ahead of 2009 Winning with Brands and Innovation Innovating Category Wide: Hair TIGI “Sleek Mystique” Sunsilk Relaunch Dove Damage Expert US 14
Slide 15: Innovation in Action - Nigeria / Brands Into New Markets
04/08/2010 Winning with Brands and Innovation Innovation in Action - Nigeria ORAL CARE HOME CARE SAVOURY Winning with Brands and Innovation Q2 10: Brands Into New Markets Sure Lifebuoy India Brazil / Bolivia / Peru / Australia 15
Slide 16: Q2 10: Brands Into New Markets
04/08/2010 Winning with Brands and Innovation Q2 10: Brands Into New Markets TIGI Walls Fruttare India / Brazil Thailand / Malaysia / Singapore Winning with Brands and Innovation Q2 10: Brands Into New Markets CIF Pepsodent Vietnam Philippines 16
Slide 17: Reshaping the Portfolio
04/08/2010 Winning with Brands and Innovation White Spaces: a Growth Opportunity Key Countries Brands present White Space 100% 50% 0% Reshaping the Portfolio Sara Lee completion Disposal of Findus Italy Disposal of Palm Oil expected in Q4’10 announced Plantation in Ghana – Brunch brand disposal comp
Slide 18: Winning in the Marketplace / Winning with People
04/08/2010 Winning in the Marketplace On-Shelf Availability Customer Insight and Innovation Centre Continues to Improve Paris Now Open. Roll-out will Continue Englewood Cliffs - LIVE London Leatherhead - LIVE +290 bps Paris – LIVE Shanghai – 2010 Singapore – 2010 Sao Paolo – 2010 Q3 Q4 Q1 Q2 2009 20
Slide 19: Priorities for 2010 / Questions
04/08/2010 Priorities for 2010 • Continue to drive profitable volume growth • Steady and sustainable improvement in full year underlying operating margin • Strong cash flow Questions 19
Slide 20: Q2 10: Underlying Operating Margin / H1 10: Free Cash Flow
04/08/2010 Q2 10: Underlying Operating Margin 120bps 140bps 30bps 14.6% +10bps 14.7% H1 '09 GM % A&P % Indirects % H1 '10 Change Change Change H1 10: Free Cash Flow Net Cash Flow from Operating Activities €2.2bn €3.1bn €0.5bn €0.6bn €0.5bn €0.2bn €0.1bn €0.8bn €1.3bn €0.2bn H1 10 Depreciation Income