Unilever PLC · LSE:ULVR
Unilever — Q1 2010 Earnings Presentation
22 slides from Unilever's earnings presentation, Apr 29, 2010
Slide 1: Unilever 2010 Q1 Results
Unilever 2010 Q1 Results London 0800 BST, Thursday 29th April, 2010 Paul Polman, Chief Executive Officer Jean-Marc Huët, Chief Financial Officer James Allison, Head of Investor Relations Paul Polman Chief Executive Officer Chart 1: Introduction Good morning and welcome to Unilever’s first quarterly
Slide 2: Priorities for 2010
But let me just remind you of our priorities for 2010. These are: • To drive profitable volume growth, ahead of our markets; • To increase underlying operating margin steadily and sustainably, and • To generate strong cash flow and lower the average working capital. And to do this whilst taking acti
Slide 3: Safe Harbour Statement; Q1 Strong Top Line Growth
Chart 3: Safe Harbour Statement As usual, I draw your attention to the disclaimer relating to forward looking statements and non-GAAP measures. Now, let me begin by looking at our Sales performance. Chart 4: Q1: Strong Top Line Growth Underlying Volume Growth for the Quarter accelerated to 7.6%. Wit
Slide 4: In-Quarter Pricing Stable; Continued Volume Growth Momentum
Chart 6: Q1 : In-Quarter Pricing Stable In-quarter price growth was flat for the Group overall, and we see an improving trend in the Americas despite high levels of price competition in Brazil. In Western Europe the overall position was stable, with improvements in some markets but substantial price
Slide 5: Broad Based Volume Growth; Bigger, Better, Faster Innovations
Chart 8: Q1: Broad Based Volume Growth In the Americas and Asia Africa CEE, volume growth has been increasing since the start of 2009. In Western Europe the trend is similar, but at a lower level. Central to this strong growth momentum is innovation. We are bringing to market bigger and better innov
Slide 6: Bigger, Better, Faster Innovations
And in India we have re-launched our Wheel laundry brand .The improved formulation is delivering strong results despite aggressive price-based competition. The chart shows just a few of our recent innovations. There are many more. In Europe for example we have launched Signal Anti- Age, the first to
Slide 7: Brands Into New Markets; Continued Investment in A&P
Chart 11: Brands Into New Markets We have also launched some of our key brands into markets where they are not yet present. In the first quarter we introduced Cif, Lifebuoy and Vaseline for Men into a wide range of our developing and emerging markets. And we have also been active in Western Europe.
Slide 8: Q1: Asia Africa CEE
So – I have gone through our volume growth, the innovation that has underpinned it and our step up in advertising and promotion. Let’s now look at performance across our regions in a bit more detail. Chart 13: Q1 : Asia Africa CEE In our Asia Africa CEE region we recorded another strong quarter of v
Slide 9: Q1: Americas; Q1: Western Europe
Chart 14: Q1 : Americas In the Americas volume growth reached 6.3%. This was led by Latin America, where growth was in double digits driven by a strong performance in Brazil. North America also had a good quarter, with both the US and Canadian businesses growing volume ahead of their markets. This d
Slide 10: Improved Gross Margins
Pro.Activ in Spreads and introduced the new TIGI Curlesque collection of hair products. Gross margins were higher, with the benefits of the European Supply Chain setup coming through strongly. A&P spend was again higher, but with lower overheads from the One Unilever restructuring programme underlyi
Slide 11: Commodity Costs Tailwind; Strong Savings Delivery
Chart 17: Q1: Commodity Costs Tailwind Continues Commodity costs continued to be a tailwind in Q1, albeit at a lower level than in Q4 last year. With a number of key input costs starting to trend upwards we expect higher commodity cost headwinds in the second half than previously anticipated. Howeve
Slide 12: Underlying Operating Margin; Double Digit Increase in EPS
Chart 19: Q1: Underlying Operating Margin Underlying Operating Margin improved by 60 basis points. This reflected strong Gross Margin development as well as good progress in overheads, which were lower by 40 basis points. This improvement came despite an increase of 220 basis points in Advertising &
Slide 13: Cash Conversion Cycle; Net Debt, Pensions and Dividends
Chart 21: Cash Conversion Cycle has improved by 18 days vs. Q1’09 Progress in improving Trading Working Capital continues to be strong. The cash conversion cycle is now 18 days better than a year ago. In fact we had negative Trading Working Capital across the Group for the second straight Quarter. T
Slide 14: Pension deficit and dividend
The pension deficit – as defined under IAS 19 - was broadly stable at around €2.7 billion. Cash expenditure on pensions in the first quarter was around €200 million. We still expect full year payments to be around €750 million, well below the €1.3 billion figure from 2009. The pension financing char
Slide 15: The Model is Working
Chart 23: Paul Polman Introduction Paul Polman Chief Executive Officer Thank you Jean-Marc. Chart 24 : The Model is Working So a solid set of results that bears out that our model is beginning to work. Volume growth of more than 7% is strongly underpinned by innovation with a step up in performance
Slide 16: Virtuous circle of growth; Winning Where Markets are Toughest
All this is being fuelled by a step up in the amount and quality of our advertising activity. This is how we are building brand equities. This is how we have been able to record double digit volume growth in Asia, including Japan and Australia, and 4% volume growth in Western Europe. At the same tim
Slide 17: Competition in India, China, Indonesia and Turkey
Because it forces us to accelerate our transformation programme – to become more competitive, faster and more externally focussed. We will use it as ‘fuel for change’ in much the same way as we used the global financial and economic crises as a catalyst to shift company performance. As Jean Marc has
Slide 18: Staying competitive in India
In India, like in other places, we are determined to stay competitive. • We have stabilised volume share in laundry powders • We are investing in superior products in a number of categories and bringing new brands to the market like Vaseline for Men, Cif, Domestos and the previously mentioned Brook
Slide 19: The Culture is Changing
Chart 26: The Culture is Changing We continue to strengthen the organisation. Jean-Marc is a great addition to the team and I look forward to welcoming Mike Polk as President Categories when Vindi retires at the end of May. Let me say that Mike has very big shoes to fill. Vindi has been instrumental
Slide 20: New compensation scheme and leadership development
At the same time we are stepping-up new training and leadership development programmes. Increasingly senior management is being benchmarked against the best in class and in- depth personal development plans are being created which allow the company and the individual to succeed. We see our progress
Slide 21: Priorities for 2010
Chart 27: Priorities for 2010 Let me conclude with a few words on outlook. You might hear increasingly bullish noises from economic commentators but recognise that for many companies the base is low and that inventory replenishment will have played its part in making current numbers look healthy. We
Slide 22: Outlook and guidance; questions
For these reasons let me be very clear: • We do not expect the environment to get better and • We do expect competition to get tougher • As Jean Marc has said the tailwind from commodity costs will turn in to a headwind and • We will see increasingly tough comparators as the year progresses. So plea