Unilever Plc · LSE:ULVR
Unilever — Q3 2001 Earnings Presentation
23 slides from Unilever's earnings presentation, November 2001
Slide 1: Progress along the Path to Growth post Q3 2001
Progress along the Path to Growth post Q3 2001 Unilever Roadshow Presentation SAFE HARBOUR STATEMENT: This presentation may contain forward-looking statements (within the meaning of the U.S. Private Securities Litigation Reform Act 1995). Any forward-looking statements are based on current expectati
Slide 2: In February 2000, Unilever announced its 'Path to Growth' strategy
In February 2000, Unilever announced its ‘Path to Growth’ strategy Accelerate rate of top line growth to 5 - 6% pa by 2004 Increase operating margin to in excess of 16%* by 2004 EPS beia low double digit growth 2001 - 04 Saving €Euro 1.5bn pa by 2004 plus € €Euro 1.6bn procurement savings Acquisitio
Slide 3: Key Drivers of Value Creation
Key Drivers of Value Creation “See through the numbers” • Growth of the leading brands • The exit from the tail in a value creating way • Deliver EPS growth in a quality way • Increased gross margin partly re-invested in A&P • Restructuring is proceeding according to plan • Under-performing business
Slide 4: Path to Growth Progress of Leading Brands
Path to Growth Progress of Leading Brands Underlying • 84% in Q3 of business up from 75% in 1999 Sales Growth % • 95% of A&P behind leading brands 8.0 • MAT in Q3 5.4% up from 3.8% 7.0 6.0 Foods HPC 5.0 Total 4.0 3.0 2.0 1.0 0.0 Qtr 1 '00 Qtr 2 '00 Qtr 3 '00 Qtr 4 '00 Qtr 1 '01 Qtr 2 '01 Qtr 3 '01 *
Slide 5: Key Drivers for Value Growth
Key Drivers for Value Growth • Focus of innovation and resources behind leading brands • Bigger hit innovations, less fragmentation of resource • Developing and emerging markets • Address under-performing businesses • HPC started earlier - further ahead than Foods on brand focus and showing sustaine
Slide 6: Drive Growth through our Core Brands in Foods
Drive Growth through our Core Brands in Foods • Plant the taste banner across the World • Paint the world yellow with • Dress the globe with • Make the beat • Keep your heart ticking with • Share family moments everyday with • Enjoy Italian passion for life with • Bring fresh solutions to meal time
Slide 7: 'Big Hit' Innovations - 2001
‘Big Hit’ Innovations - 2001 • Seventy five percent of our ‘Big Hit’ innovations are now in the market • Some key innovations in the first nine months of 2001 were: Dove Range Extensions added €140m YTD Ragu Express was Liquid Capsules launched launched in the US in in Q3 - €11m sales YTD UK and Fra
Slide 8: Earnings delivered in a quality way
Earnings delivered in a quality way 225 200 175 150 125 Bps Operating Margin of sales 100 Associated Costs 75 50 25 0 Q1 '00 Q2 '00 Q3 '00 Q4 '00 Q1 '01 Q2 '01 Q3 '01 • Achieved target EPS in 2000 • Operating margin 160 bps ahead in the quarter and year to date • Advertising & Promotion: – Increase
Slide 9: Progress with Restructuring and Savings
Progress with Restructuring and Savings Total Authorised Implemented Restructuring Proposals in 2000 & Q1/Q3 2001 Restructuring Charge -*PtG Euro 5.0 bn Euro 3.6 bn Euro 2.6 bn -Bestfoods 1.2 bn 0.7 bn 0.5 bn -Total 6.2bn 4.2 bn 3.1 bn Factory Closures - *PtG 100 49 36 -Bestfoods 30 5 5 -Total 130 5
Slide 10: Bestfoods Progress
Bestfoods Progress • Priority has been integration • Integration proceeding very well and synergy will be delivered, on time and in full - for 2001 Euro 395m • Key projects 2001 • Sales force merger nearing completion • Integration of Corporate and National Head Offices well on track • Procurement p
Slide 11: Summary of progress of Path to Growth
Summary of progress of Path to Growth “A very significant change in first 7 quarters of 20 quarter plan” Organisation - In place and operational - Reward systems aligned to growth/EVA - Top team ‘reinvigorated’ Portfolio - Underperforming businesses Arden & Bakery resolved - Frozen Foods and Spreads
Slide 12: Summary of Key Messages
Summary of Key Messages • Execution of Path to Growth and Bestfoods integration on plan • We are pleased with the progress in Q3 2001
Slide 13: Backup Charts from Q2 2001 Roadshow
Backup Charts from Q2 2001 Roadshow
Slide 14: Recalibration of Leading Brands to include Bestfoods
Recalibration of Leading Brands to include Bestfoods
Slide 15: Selection of Brand Portfolio
Selection of Brand Portfolio All brands must: • Are growing and growth is sustainable • Have scale and margin structure to sustain competitive levels of investment • Are or have the potential to be no. 1 or 2
Slide 16: Management of Portfolio
Management of Portfolio • Organisation in place • Reward systems in place • Capabilities in place • consumer understanding • brand key • communication channel planning • brand health database • innovation process management
Slide 17: Recalibration of Leading Brands
Recalibration of Leading Brands • Includes migrate brands • Includes recent acquisitions • Amora Maille • Slim.Fast • Ben & Jerrys • Bestfoods
Slide 18: Q2 2001 Leading Brands - A More Powerful Core to Our Business
Q2 2001 Leading Brands - A More Powerful Core to Our Business Sales Impact of Growth Euro m Change rate % (bps) 400 Brands 9,104 5.1 Migrate 396 (20) Slim.Fast, Ben & Jerry, 549 100 Amora Maille Bestfoods 1,406 (90) New leading brands 11,455 5.0 % of Total Business 84
Slide 19: Brand Count
Brand Count • 970 brand names at the end of Q2 2001 • 300 of these brands to be managed for value • 380 - 400 brand names by 2004 • 200 brand positions by 2004 of which 40 are global brand positions • The balance are regional or local jewels
Slide 20: New Brand Portfolio
New Brand Portfolio 2001 Q2 % of total sales Top 50 69 50-100 10 100+ 5 TOTAL leading brands 84
Slide 21: New Brand Portfolio - Top Brands
New Brand Portfolio - Top 30 Brands • Brands > Euro 1 bn Knorr, Lipton, Omo, Dove, Surf, Looks Great , Hellmann’s, Lux • Brands > Euro 500m < Euro 1bn Slim.Fast, Iglo, Sunsilk Birds Eye, Signal, Suave Rexona, Breyers, Skip, Magnum, Ponds, Calvin Klein Ragu/Raguletto, Findus • Brands < Euro 500 m Cif
Slide 22: Future Shape of Business
Future Shape of Business % of sales full year basis 1999 2001 2004 Leading Brands 75 85 91 DiverseyLever 4 4 4 Tail Brands and non 21 11 5 Corporate Business Total 100 100 100
Slide 23: Progress along the Path to Growth post Q3 2001
Progress along the Path to Growth post Q3 2001 Unilever Roadshow Presentation SAFE HARBOUR STATEMENT: This presentation may contain forward-looking statements (within the meaning of the U.S. Private Securities Litigation Reform Act 1995). Any forward-looking statements are based on current expectati