Unilever PLC · LSE:ULVR
Unilever — Q1 2009 Earnings Presentation
30 slides from Unilever's earnings presentation, 2009
Slide 1: Q1 2009 Results Roadshow
Q1 2009 Results ROADSHOW Contents Page Business Performance 2–9 Our Portfolio 9 – 12 Developing & Emerging Markets 12 – 17 Innovation 17 - 27 Winning in Challenging Times 27 - 30 1
Slide 2: Safe Harbour Statement / Q1 Highlights
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 'expects', 'anticipates', 'intends' or the negative of these terms and other
Slide 3: Our Markets
Our Markets • Markets continue to be soft • Consumer behaviour changing • Strong well supported brands can do well • D&E footprint - a competitive advantage • US picking up but WE still difficult Q1 Underlying Sales Growth by Region Price Vol USG 12 10.5 9.5 10 8.3 8 7.2 6.8 6 4.8 4 2 1.0 0 -2 -0.9
Slide 4: Q1 Underlying Sales Growth by Category; Drivers of Operating Profit
Q1 Underlying Sales Growth by Category 12 10.7 10 8 6 4.3 4.0 4 2.9 2 0 Savoury Ice Cream Home Care Personal Care Spreads Beverages Dressings Q1 Drivers of Operating Profit* Price Costs Commodity cost inflation 0.5 Q1 2009 €0.6bn 0.3 0.1 Vol/Mix 0 €bn Underlying -0.1 Profit A&P Acq/Disp -0.3 Savings
Slide 5: Commodity Cost Impact on Margin; Q1 Operating Margin
Commodity Cost Impact on Margin 900 800 700 600 bps 500 400 300 200 100 0 Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q1 Operating Margin Q1 2008 Q1 2009 Change Operating margin 19.0% 13.0% (6.0)% Including RDIs* 4.1% (1.6)% (5.7)% Operating margin before RDIs 14.9% 14.6% (0.3)% Key drivers: Gross margin (1.9)% O
Slide 6: Restructuring Well on Track; Q1 Drivers of EPS Growth
Restructuring Well on Track Plan 2007-2010 Actual to date From 100 units Multi-country organisations 29 to 20-25 MCOs Factory closures / streamlining 50-60 70 Closures completed 26 Closures announced 10 Streamlining announced 34 Headcount reduction 20,000 > 10,000 Restructuring savings €1.5bn €0.8bn
Slide 7: Balance Sheet and Cash Flow
Balance Sheet and Cash Flow • Cash flow from operating activities €0.1bn – Seasonal outflow of working capital – Cash conversion days improved – Increased pension contributions • Liquidity strong – US and UK bond issuances at competitive rates • Further progress on acquisitions Actions taken to stre
Slide 8: Example - South Africa Laundry; Our Priorities
30 day fix-it plans Example - South Africa Laundry • Innovation with added value - Omo with encapsulated fragrance technology • Launch of Sunlight value powder • Moving to lower cost packaging Our Priorities • Reignite volume growth • Protect cash flow and margin 8
Slide 9: Returning Cash to Shareholders
Returning Cash to Shareholders > €7bn returned 07-08 4 Total cash amount (€bn) 3 2 1 0 2004 2005 2006 2007 2008 Dividends Share buyback One-off dividend • Dividend Policy: sustainable, attractive and growing dividends • Proposal to move to quarterly dividends • No plans for share buy-backs in 2009 O
Slide 10: Strong Leadership Positions; Big Global Brands
Strong Leadership Positions Savoury #1 Dressings #1 Tea #1 Ice Cream #1 Spreads #1 Deodorants #1 Mass Skin #1 Laundry #2 Daily Hair Care #2 Oral Care Local Strength Household Cleaning Local Strength Big Global Brands 13 billion euro + brands Top 25 brands = ¾ of Unilever’s sales 10
Slide 11: Selective Bolt-On Acquisitions; Partnerships
Selective Bolt-On Acquisitions Buavita Indonesia Inmarko Russia TIGI Global Wonderlight Sri Lanka Napoca Romania Baltimor Russia Partnerships Starbucks Ice Cream Pepsi Lipton International 11
Slide 12: Developing & Emerging Markets
Disposals completed in 2008 Including: Turnover €bn 0.1 Boursin Cheese Lawry’s Seasonings 0.1 0.7 NA Laundry Bertolli Olive Oil 0.4 Disposals completed with €1.6 billon turnover Average 1.8x sales multiple Developing & Emerging Markets 12
Slide 13: The D&E Opportunity
The D&E Opportunity D&E Population in 2008 (billions) Affluent 0.5 Aspiring 2.6 Striving 2.6 … Rapidly Evolving into a Diamond Billions of people in D&E countries 2008 2018 Change Have lots 0.5 0.9 + 0.4 Haves 2.6 3.2 + 0.6 Not yets 2.6 2.2 - 0.4 Source: Unilever estimates 13
Slide 14: Market Development Opportunity
Market Development Opportunity Per Capita Consumption (US $ per year ) Detergents 22.9 Shampoo 7.5 6.7 16.6 5.4 12.1 2.2 1.9 1.0 1.1 1.4 0.3 India China Indonesia Brazil Germany USA India China Indonesia Brazil USA Germany Ice Cream 50.9 Skin care 36.6 34.6 26.9 10.9 2.8 5.0 0.2 0.9 3.2 0.8 0.3 Indi
Slide 15: Building Markets - Uptrading; Long-Term Strength in D&E
Building Markets - Uptrading Functional Teas Pyramids Double Chamber Mid-market Teabags • Great potential for uptrading D&E Conversion Teabags • Tea has 20% share of volume vs. 12% value for total Beverages Branded Packet Tea Loose Leaf Tea conversion upgrading uptrading Long-Term Strength in D&E Si
Slide 16: D&E Growth is Profitable; Indonesia
D&E Growth is Profitable 2008 Operating margin before RDIs* Unilever average * Restructuring, disposals and one-off items Indonesia – Strengthened through Crisis Sales and profits in hard currency • Profit level recovered in one year • Profit margin increased US$ Turnover Operating profit 1998 South
Slide 17: Argentina - Strengthened through Crisis; Innovation
Argentina - Strengthened through Crisis Sales and profits in hard currency • Profit level recovered in two years US$ • Profit margin increased Turnover US$ Operating profit 2002 Peso crisis 2000 2001 2002 2003 2004 2005 2006 2007 2008 Innovation 17
Slide 18: Fewer, Bigger Innovations; Faster Roll-out
Fewer, Bigger Innovations • From 5000+ projects to 700 Number of category innovation projects 6000 5000 4000 3000 2000 1000 0 2005 2006 2007 2008 2009 • Average project size increased 10x Faster Roll-out to More Markets 20 30 40 52 55 markets markets markets markets markets 18
Slide 19: Building R&D for Competitive Advantage
Building R&D for Competitive Advantage • More focus on big wins • Leverage our unique science across our portfolio • Accelerate delivery of breakthroughs • Build world class capabilities in critical areas Science and Technology Strengths Spray Technology Skin Mildness Product Processing Deodorants a
Slide 20: Technology Focus
Prioritising our big wins Science & Unilever Big Wins Technology Prioritised ec ts Portfolio oj s Pr n esi Ge Consumer Needs Trends Brand Categories Leverage Technology Across Portfolio Home Care Personal Care Foods Genesis Project 1 Genesis Project 2 Consumer Benefit Genesis Project 3 Genesis Proje
Slide 21: Knorr Stock Pots; Bertolli Frozen Meals
Knorr Stock Pots Stock Pots with new bouillon gel technology for natural tasty stock and soups Launched in China and Europe Bertolli Frozen Meals New Bertolli Frozen Meals Restaurant Taste with your Homemade Touch 21
Slide 22: Heart Health; Hellmann's Light
Heart Health “Goodness of Margarine” Family Goodness brings better nutrition for family growth For better taste and with less fat Hellmann’s Light Delicious extra light mayonnaise with unique citrus fibre technology Now with only 3% fat 22
Slide 23: Lipton; Magnum Temptation
Lipton New Lipton pyramid teas and infusions with chunky pieces of fruits, spices and large leaves for the great tea tasting experience A unique slimming tea twice as rich in catechins to help maintain your silhouette Magnum Temptation An unrivalled multi-sensorial experience using cold roller techn
Slide 24: Clear; Axe Hair
Clear Complete antidandruff and scalp care regime Centrally developed, identically presented Axe Hair New Axe Hair launched in the US designed to create hair that guys want and girls love A complete line of shampoos, a conditioner, and styling products 24
Slide 25: Axe Chocolate; Dove Hair Minimising Deodorants
Axe Chocolate As Irresistible As Chocolate Global No.1 Axe variant Rolled out to over 55 markets Dove Hair Minimising Deodorants New Dove Hair Minimising Anti-Perspirant Put an end to that prickly feeling between shaves 25
Slide 26: Dove Go Fresh; Domestos 24HR
Dove Go Fresh Dove Go Fresh A fragrance-driven collection of products aimed at women in their 20s Rolled out to 55 markets in 2008 alone Domestos 24HR The clinging power of new thicker formula makes it flush proof, protecting you and your family from germs 26
Slide 27: Winning in Challenging Times
Surf with Essential Oils Surf Small & Mighty with Essential Oils Encapsulated Fragrance Technology Gorgeous Laundry for Less Winning in Challenging Times 27
Slide 28: More focus on value; Optimising pack sizes
Winning in Challenging Times More focus on value – adjusting messages Knorr Ragu pasta sauces campaign in the US “Feed your kids well” Dirt takes its toll on things you cherish. Cif cream’s microparticles lift dirt easily, brining back the clean and a new lease of life Cif “Rejuvenate your favourite
Slide 29: Playing the price piano - Ice Cream; Tea - UK
Winning in Challenging Times Playing the price piano – Ice Cream Build Super Premium Renovate the premium core Re-enter mass/ economy Catering to various consumer opportunities Tea - UK Green Tea Herbal Tea 218 266 Decaf Tea Special Blend Tea 113 121 Pyramid Tea Pure Tea Granules Loose leaf tea 100
Slide 30: Spreads - UK; Laundry - Brazil
Catering to various consumer opportunities Spreads - UK Pro-activ with olive oil 305 Pro-activ extra light 302 Pro-activ Bertolli Olive 302 120 Flora Buttery Flora Extra Light Flora Original 131 100 10 0 ICBINB Flora White - Baking Stork - Baking 77 93 46 *Indexed per 100g Catering to various consum