Unilever PLC · LSE:ULVR
Unilever — FY2009 Earnings Presentation
26 slides from Unilever's earnings presentation, Feb 4, 2010
Slide 1: Q4 and Full Year 2009 Results
Q4 and Full Year 2009 Results 4th February 2009 Paul Polman (CEO) - James Allison (Head of IR) Safe Harbour Statement This announcement may contain forward-looking statements, including 'forward-looking statements' within the meaning of the United States Private Securities Litigation Reform Act of 1
Slide 2: 2009 Priorities: Volume Growth Restored
2009 Priorities • Restore Volume Growth • Protect Cash Flow and Operating Margins Volume Growth Restored Underlying volume growth 5.0% for the year is 2.3% 3.6% 2.0% -1.8% Q1 09 Q2 09 Q3 09 Q4 09 2
Slide 3: Operating Margin Exceeded; Strong Cash Flow from Operating Activities
Operating Margin Exceeded Underlying Operating Margin has improved 20bps +100 bps for the full year +70 bps -30 bps -60 bps Q1 09 Q2 09 Q3 09 Q4 09 Strong Cash Flow from Operating Activities Cash flow from operating €6.8 activities increased by €1.4bn €5.3 €4.8 €3.2 €2.5 €0.9 €0.3 €0.1 Q1’08 Q1’09 Q
Slide 4: 2009 Sales Growth
James Allison Head of Investor Relations 2009 Sales Growth -2.7% +1.2% -2.4% +2.3% €40.5 bn €39.8 bn 39.4 39.3 38.5 38.5 USG +3.5% FY 08 Sales Currency Acq/Disp Vol/Mix Price FY 09 Sales 4
Slide 5: Q4 Sales Growth; Trend in Underlying Volume Growth
Q4 Sales Growth -5.7% -3.1% -0.8% +5.0% €10.2 bn 9.6 9.7 €9.7 bn 9.5 9.5USG +1.8% Q4 08 Sales Currency Acq/Disp Vol/Mix Price Q4 09 Sales Trend in Underlying Volume Growth Underlying volume growth 5.0% for the year is 2.3% 3.6% 2.3% 2.0% 0.6% -0.5% -1.6% -1.8% Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3
Slide 6: Progress on Volume Growth: Western Europe and D&E
Progress on Volume Growth Western Europe Underlying Volume Growth 1.5% 1.5% 1.0% -1.1% -2.8% -1.7% -3.7% As Reported Q3 Q4 -3.7% 2.6% -0.7% Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Progress on Volume Growth D&E FY Underlying Volume Growth is 4.2% 9.5% 6.4% 4.6% 3.3% 4.1% 2.6% -1.1% -1.2% Q1 0
Slide 7: Trends in Advertising and Promotional Spend
2009 Innovation Highlights Trends in Advertising and Promotional Spend A&P has improved by 80bps during FY 2009 + 240 bps +130 bps +50 bps -100 bps -130 bps -110 bps Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Change in A&P% *Constant currency 7
Slide 8: Price and Commodity Costs Development; Strong Savings Delivery
Price and Commodity Costs Development 1000 10% Commodity Costs 800 8% Price 600 6% 400 4% bps 200 2% 0 0% -200 -2% -400 -4% -600 -6% Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Strong Savings Delivery Full Year Local • €1.4bn total savings (including Efficiency €0.2bn Restructuring €0.5bn €0.5bn
Slide 9: One Unilever Programme Update; Gross Margin Continues to Improve
One Unilever Programme Update Plan 2007-2010 Actual to date Multi-country organisations From 100 units 22 to 20-25 MCOs (*) Factory closures / streamlining 50-60 88 Headcount reduction 20,000 c. 20,700 Restructuring savings €1.5bn €1.2bn Restructuring charges €3.0bn €2.6bn • 2010 Restructuring costs
Slide 10: Operating Margin; Earnings Per Share: Q4
Operating Margin Q4 2009 Change FY 2009 Change Operating margin 10.1% -4.3% 12.6% -5.1% Including RDIs* -2.9% -5.3% -2.2% -5.3% Operating margin before RDIs 13.0% 1.0% 14.8% 0.2% Key drivers: Gross margin 1.0% Overheads 0.0% A&P (0.8)% *Restructuring, disposals and one-off items Earnings Per Share:
Slide 11: Earnings Per Share: Full Year; Balance Sheet
Earnings Per Share: Full Year 2008 2009 Change EPS (€) 1.79 1.21 (33)% Includes RDIs*, after tax 0.36 (0.12) EPS before RDIs* 1.43 1.33 (7)% Key drivers (%) Operational performance 4 Minorities (1) Dilution from Disposals (2) Currency (2) Finance and Pension Costs (6) *Restructuring, disposals and o
Slide 12: Reflections on 2009
Paul Polman Chief Executive Officer Reflections on 2009 • First step towards consistent long term top and bottom line growth • Early action taken to protect business fundamentals - Focus on volume, operating margin and cash flow - Removing cost which did not add value and leveraging our scale - Inve
Slide 13: Environment; D&E Markets
Environment • 2010 no less difficult than 2009 – Fiscal stimulus withdrawn in many markets – Higher taxes – Continuing high levels of unemployment – Consumer confidence is weak • Customers competing on value • Competitors fighting for share D&E Markets • Half of Unilever’s Turnover • 1bn more consum
Slide 14: Strategic Priorities
Strategic Priorities • Winning with Brands and Innovations • Winning in the Market Place • Winning through Continuous Improvement • Winning with People Strategic Priorities • Winning with Brands and Innovation • Winning in the Market Place • Winning through Continuous Improvement • Winning with Peop
Slide 15: Strategic Priorities
Run video Strategic Priorities • Winning with Brands and Innovation • Winning in the Market Place • Winning through Continuous Improvement • Winning with People 15
Slide 16: Innovation Quality; Bigger, better, faster innovations
Innovation Quality Incremental Turnover; size 3-5 year funnel Turnover of key projects expected to value has doubled nearly double 88% 100% 2009 2010 2008 2009 Bigger, better, faster innovations Fast roll-out Axe Temptation Clear Minimising Deos Dove Fresh 56 markets 35 markets 37 markets 64 markets
Slide 17: Taking our Brands into New Markets
Taking our Brands into New Markets Sunlight Nigeria B&J Norway Walls Vietnam Cif Pond’s India Middle East Magnum Brazil Strategic Priorities • Winning with Brands and Innovation • Winning in the Market Place • Winning through Continuous Improvement • Winning with People 17
Slide 18: Customer Service Improving
Customer Service Improving Number of Top 20 countries achieving 20 service at the 2009 par target level 15 10 5 0 Jul Jul Jan-09 May Nov May Nov Sep Sep Mar Mar Jan-08 Customer Insight and Innovation Center Roll Out MCO UK/Ire Go-Live Jan 2010 18
Slide 19: Virtuous Circle of Volume Growth
Strategic Priorities • Winning with Brands and Innovation • Winning in the Market Place • Winning through Continuous Improvement • Winning with People Virtuous Circle of Volume Growth Re-invest in compelling Volume Amplified mixes Constantly growth by savings gives cost improve and value leverage co
Slide 20: Working Capital Reducing
Working Capital Reducing Stocks 68 Debtors 65 63 61 42 41 39 37 Q1 09 Q2 09 Q3 09 Q4 09 Q1 09 Q2 09 Q3 09 Q4 09 Creditors Total Days 76 77 77 78 33 30 25 20 Q1 09 Q2 09 Q3 09 Q4 09 Q1 09 Q2 09 Q3 09 Q4 09 Cash Conversion Cycle has improved by 14 days during 2009 Strategic Priorities • Winning with B
Slide 21: Driving Towards a Performance Culture; Still Work To Do
Driving Towards a Performance Culture • From 16,000 to 15,000 managers • Half the top management team in new roles • Performance against objectives clearly visible • Management assessments now more differentiated • Increased rewards for exceptional performance Still Work To Do • India performance is
Slide 22: Summary; Priorities for 2010
Summary • Environment in 2010 will be no less tough than 2009 • The foundations have been set: • Volume and value shares improving progressively • Brand support stepped up and equities improving • Strong delivery of savings • Operating margin increased and very strong cash generation • But more stil
Slide 23: Questions
Questions Attachments 23
Slide 24: Unilever USG Trend; Western Europe
Unilever USG Trend 8.3% 7.2% 6.8% 7.3% 4.8% 4.1% 3.4% 1.8% Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Western Europe 3.8 • Strong performance in key markets • Volume trend continues to improve • Single IT platform has had a positive impact on operations -0.1 • CiC rolled out from the US -1.8 -2
Slide 25: Americas; AACE (Asia AMET CEE)
Americas 7.4 • Volume growth accelerating • A&P investment to drive sales • Customer service levels have 2.5 improved 1.6 • Leveraging CiC to grow our customers faster -0.8 2008 2009 • Gross Margin improvement in Q4 UVG UPG higher than 300 bps • FY Operating Margin before RDI’s is up by 70 bps AACE
Slide 26: Drivers of Operating Profit
Drivers of Operating Profit* 1.0 0.8 Price Costs 0.6 Vol/Mix Acq/Disp Savings programme A&P 0.4 0.2 0 €bn 0.0 Underlying -0.2 Profit -0.4 -0.6 -0.8 -1.0 *Excl RDIs, constant currency 26