Unilever Plc · LSE:ULVR
Unilever — H1 2022 Earnings Presentation
35 slides from Unilever's earnings presentation, Jul 26, 2022
Slide 1: Unilever H1 2022 Results
Unilever H1 2022 Results Alan Jope & Graeme Pitkethly 26th July 2022
Slide 2: Safe harbour statement
Safe harbour statement This presentation may contain forward-looking statements, including ‘forward-looking statements’ within the meaning of the United States Private Securities Litigation Reform Act of 1995. Words such as ‘will’, ‘aim’, ‘expects’, ‘anticipates’, ‘intends’, ‘looks’, ‘believes’, ‘vi
Slide 3: Unilever H1 2022 Results
Unilever H1 2022 Results Alan Jope & Graeme Pitkethly 26th July 2022
Slide 4: Contents
Contents H1 2022 Overview & Strategic Priorities Alan Jope H1 2022 Results & Outlook Graeme Pitkethly 4
Slide 5: H1 Performance Summary
H1 Performance Summary First half performance builds on growth momentum of 2021 Growth delivered in line with strategic priorities Portfolio: Tea completed, Nutrafol acquired Simpler, more category focused organisation in place 5
Slide 6: Challenging environment, Unilever well positioned
Challenging environment, Unilever well positioned Strong brands with pricing power Experience in high inflation environments New, agile organisational structure Unilever Corporate Centre Beauty & Personal Home Ice Care Nutrition Wellbeing Care Cream Unilever Business Operations 6
Slide 7: Growth momentum maintained, price led
Growth momentum maintained, price led Competitive Q2 Growth H1 Growth Pricing Growth Growth 11.2% Underlying Sales Growth Underlying Sales Growth 8.3% UPG 8.8% 8.1% 4.9% 53% % Business Winning MAT1 0.0% 11.2% (2.1)% 9.8% (1.6)% -1.0% -2.1% UPG UVG UPG UVG UVG Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 1Moving An
Slide 8: Margin delivery in line with guidance
Margin delivery in line with guidance Margin Earnings Cash Underlying Operating Margin Underlying EPS Free Cash Flow 17% 1% €2.2bn (180)bps €1.34 €(0.2)bn vs 2021 Underlying EPS vs 2021 8
Slide 9: Five clear strategic priorities
Five clear strategic priorities 1. 2. 3. 4. 5. Move Accelerate Lead in Purpose -led, Win with portfolio into USA, India, channels of future-fit brands and high growth China and the future organisation innovation spaces EMs & culture 9
Slide 10: Five clear strategic priorities
Five clear strategic priorities 1. 2. 3. 4. 5. Move Accelerate Lead in Purpose -led, Win with portfolio into USA, India, channels of future-fit brands and high growth China and the future organisation innovation spaces EMs & culture 10
Slide 11: 1. Winning with brands and innovation
1. Winning with brands and innovation €1bn+ brands 52% of turnover 10% Q2’22 USG 9.4% H1’22 USG 11
Slide 12: Five clear strategic priorities
Five clear strategic priorities 1. 2. 3. 4. 5. Move Accelerate Lead in Purpose -led, Win with portfolio into USA, India, channels of future-fit brands and high growth China and the future organisation innovation spaces EMs & culture 12
Slide 13: 2. Move portfolio into high growth spaces
2. Move portfolio into high growth spaces Prestige Beauty Health & Wellbeing Divested Tea business, ekaterra Q2 USG 14% Q2 USG 28% • €4.5bn on a cash-free, debt-free basis Acquired Nutrafol • #1 dermatologist recommended hair growth supplement in the U.S • Strong clinical support 13
Slide 14: Five clear strategic priorities
Five clear strategic priorities 1. 2. 3. 4. 5. Move Accelerate Lead in Purpose -led, Win with portfolio into USA, India, channels of future-fit brands and high growth China and the future organisation innovation spaces EMs & culture 14
Slide 15: 3. Accelerate USA, India, China and Emerging Markets
3. Accelerate USA, India, China and Emerging Markets €9.9bn €5.6bn €3.3bn FY’21 TO FY’21 TO FY’21 TO USG% Q2 ‘22 8.7% 19.5% (9.3)% UVG% Q2 ‘22 (0.3)% 6.8% (10.5)% USG% H1 ‘22 8.8% 14.9% (2.2)% Consumer More shopping in Inflation impacting rural Covid impacting supply Behaviour physical stores more t
Slide 16: 3. Accelerate USA, India, China and Emerging Markets
3. Accelerate USA, India, China and Emerging Markets SEA excl. Turkey Indonesia Latin America Indonesia Q2 USG: 44% 8% 10% 17% Q2 UVG: 15% (1)% (4)% (4)% Consumer • Consumer demand • Vietnam: multi- • Trading down in • Multi-channel behaviour holding channel shopping Home Care shopping • Pantry load
Slide 17: Five clear strategic priorities
Five clear strategic priorities 1. 2. 3. 4. 5. Move Accelerate Lead in Purpose -led, Win with portfolio into USA, India, channels of future-fit brands and high growth China and the future organisation innovation spaces EMs & culture 17
Slide 18: 4. Lead in channels of the future - eCommerce
4. Lead in channels of the future - eCommerce H1 2022 eCom USG eCom TO contribution 25% 14% 2% Omni Pure play eB2B +6% Flat +69% '16 '17 '18 '19 '20 '21 H1 '22 Channel-specific Innovation Dove treatment masks Clear premium scalp care Lifebuoy bundles 18
Slide 19: Five clear strategic priorities
Five clear strategic priorities 1. 2. 3. 4. 5. Move Accelerate Lead in Purpose -led, Win with portfolio into USA, India, channels of future-fit brands and high growth China and the future organisation innovation spaces EMs & culture 19
Slide 20: 5. Future-fit organisation & culture
5. Future-fit organisation & culture • Operational from 1st July Unilever Corporate Centre • Simpler, faster, and more agile Business Beauty & Personal Home Nutrition Ice Cream Groups • Greater category focus and Wellbeing Care Care expertise €10bn €12bn €11bn €11bn* €7bn • More empowered and accoun
Slide 21: H1 Performance Summary
H1 Performance Summary First half performance builds on growth momentum of 2021 Growth delivered in line with strategic priorities Portfolio: Tea completed, Nutrafol acquired Simpler, more category focused organisation in place 21
Slide 22: Graeme Pitkethly, H1 2022 Results
Graeme Pitkethly H1 2022 Results 26th July 2022
Slide 23: Underlying Sales Growth
Underlying Sales Growth Results summary 8.1% -1.6% 9.8% H1 USG H1 UVG H1 UPG USG 5.0% 2.5% 4.9% 7.3% 8.8% • Good first half performance in a challenging environment UPG 11.2% • Broad-based growth across all divisions UVG • Pricing sequentially stepped up -2.1% • Volume impact tracking as Q2'21 Q3'21
Slide 24: Regional growth by quarter
Regional growth by quarter Asia / AMET / RUB Latin America €14bn TO China volume €4bn TO impact: (160)bps 16.8% 9.0% 9.8% USG 9.1% 8.5% 11.9% 5.7% 5.7% 8.7% 2.3% 11.9% 21.7% UPG UVG -2.6% -4.0% Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 North America Europe €6bn TO €6bn TO 8.9% 4.6%
Slide 25: H1 2022: Turnover growth
H1 2022: Turnover growth +14.9% 5.6% USG 8.1% A&D 0.6% 9.8% 0.7% (0.1)% (1.6)% €29.6bn €28.6bn €25.8bn 25
Slide 26: Beauty & Personal Care
Beauty & Personal Care Growth Segments Growth Channels H1 7.5% (1.3)% 9.0% USG UVG UPG Q2 8.0% (2.3)% 10.5% USG UVG UPG • Strong pricing across all categories Axe relaunch UI partnership with IHG Hotels • Premiumisation and innovation Growth Geographies Purposeful Brands contributed to double-digit
Slide 27: Foods & Refreshment
Foods & Refreshment Growth Segments Growth Channels H1 7.3% (0.9)% 8.3% USG UVG UPG Q2 8.1% (1.2)% 9.4% USG UVG UPG • Ice cream sales driven by strong Summer feeling in-home Magnum’s partnership with getir growth in out-of-home Growth Geographies Purposeful Brands • In-home foods grew on the back of
Slide 28: Home Care
Home Care Growth Segments Growth Channels H1 10.7% (3.4)% 14.5% USG UVG UPG Q2 12.2% (3.8)% 16.6% USG UVG UPG • Strong pricing in response to high Comfort fragrance beads China UL Professional Perfect White input costs exposure Growth Geographies Purposeful Brands • Double digit growth in Fabric Cle
Slide 29: Commodity prices remain high, with a greater impact anticipated
Commodity prices remain high, with a greater impact anticipated Commodities remain elevated Q2 ’22 Sequentially more cost inflation ahead (avg. spot price for each period) index (YoY NMI €bn) 2020 Q1’21 Q2’21 Q3’21 Q4’21 Q1’22 Q2’22 (vs ’20 at 100) 2017 2018 2019 2020 2021 2022 1,548 1,634 Crude 1,3
Slide 30: H1 2022: Underlying operating margin
H1 2022: Underlying operating margin (180)bps Gross Margin (2.1)% 6.5% (8.6)% €3.7bn* +€0.2bn vs PY 0.4% (0.1)% 18.8% 17.0% H1 2021 Price Cost Brand & Marketing Overheads H1 2022 Investment *BMI H1 spend at constant fx rates 30
Slide 31: H1 2022: Underlying earnings per share
H1 2022: Underlying earnings per share Current underlying EPS +1.0% (1.0)% (1.5)% 4.9% (3.4)% 2.4% (0.4)% € 1.33 € 1.34 € 1.32 (0.1)% € 1.31 (3.9)% € 1.29 € 1.28 € 1.29 € 1.27 Constant underlying EPS € 1.27 € 1.27 H1 2021 Turnover & Finance cost Tax Minorities SBB Other H1 2022 Currency H1 2022 oper
Slide 32: Capital allocation
Capital allocation Operational Portfolio Returns to investment reshape shareholders • Step up Capex • Bolt-on acquisitions. • Up to €3bn share investment Nutrafol completed 7th buyback over 2022/23 July – first €750m tranche completed • Competitive investment • Tea disposal completed • Attractive, s
Slide 33: Cash flow & balance sheet
Cash flow & balance sheet Cash Net Debt Pension Surplus (€bn) Free Cash Flow Net debt / EBITDA €2.2bn 2.3 5.0 €(0.2)bn €27.1bn 3.0 1.9 vs H1 2021 Net debt 0.3 FY'20 H1'21 FY'21 H1'22 33
Slide 34: Outlook: 2022 Priorities and Guidance
Outlook 2022 Priorities 2022 Guidance Expect to be above 4.5-6.5% growth range, driven Continuing growth momentum by price with some negative impact on volume Invest for growth while managing inflationary Maintain competitive levels of spend in BMI, R&D Managing inflationary pressure pressure while
Slide 35: Unilever H1 2022 Results
Unilever H1 2022 Results Alan Jope & Graeme Pitkethly 26th July 2022