Unilever Plc · LSE:ULVR
Unilever — FY2021 Earnings Presentation
43 slides from Unilever's earnings presentation, Feb 10, 2022
Slide 1: Unilever Full Year 2021 Results & Strategic Update
Unilever Full Year 2021 Results & Strategic Update Alan Jope & Graeme Pitkethly 10th February 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: Alan Jope - Full Year Results 2021
Alan Jope Full Year Results 2021 10th February 2022
Slide 4: Contents
Contents 2021 Overview Alan Jope 2021 Results Graeme Pitkethly Strategic Priorities Alan Jope 2022 Outlook Graeme Pitkethly 4
Slide 5: 2021 Delivery
2021 Delivery Competitive Q4 Growth FY Growth Pricing Growth Growth Underlying Sales Growth Underlying Sales Growth 4.9% 4.1% 4.9% 4.5% 1.6% 53% % Business Winning MAT1 0% 1.6% 1.0% 0.3% Underlying Volume Growth Underlying Volume Growth FY'20 Q1'21 Q2'21 Q3'21 Q4'21 1Moving Annual Total / Last 52 we
Slide 6: 2021 Delivery: Margin, Earnings, Cash
2021 Delivery Margin Earnings Cash Underlying Operating Margin Underlying EPS Free Cash Flow 18.4% 5.5% €6.4bn -10bps 7.8% -€1.3bn vs 2020 Constant Underlying EPS vs 2020 6
Slide 7: Historical performance
Historical performance USG % 3.2% 2-year CAGR 4.5% 3.6% 3.2% 2.9% 2.8% 1.9% 2016 2017 2018 2019 2020 2021 %Business Winning (MAT) UOM % 53% 53% 19.1% 51% 18.6% 18.5% 18.4% 44% 44% 17.7% 42% 16.4% 2016 2017 2018 2019 2020 2021 2016 2017 2018 2019 2020 2021 USG: 2016-2018 restated due to treatment of
Slide 8: 2021 Performance summary
2021 Performance summary Growth momentum building Stepped up pricing in inflationary environment Earnings growth Competitiveness maintained 8
Slide 9: Graeme Pitkethly - Full Year Results 2021
Graeme Pitkethly Full Year Results 2021 10th February 2022 9
Slide 10: Underlying Sales Growth
4.5% 1.6% 2.9% Underlying Sales Growth FY USG FY UVG FY UPG USG 3.5% 5.7% 5.0% 2.5% 4.9% 2 year 2.8% 2.3% 3.4% 4.2% average • Step up in 2-year average growth through the year UPG • Continue to land pricing as 4.9% inflation increases UVG Flat • Some volume elasticity as a result Q4'20 Q1'21 Q2'21 Q
Slide 11: FY 2021: Turnover growth
FY 2021: Turnover growth +3.4% A&D 1.3% (0.1)% USG 4.5% 1.4% (2.4)% 2.9% €53.9bn 1.6% €52.4bn €50.7bn FY 2020 UVG UPG Acquisitions Disposals FY 2021 Currency FY 2021 (Constant) (Current) 11
Slide 12: Beauty & Personal Care
3.8% 0.8% 3.0% Beauty & Personal Care FY USG FY UVG FY UPG 4% 4% 0% Deodorant, Hair, Oral, Skin Care1 Q4 USG FY USG 2-yr CAGR • Pricing stepping-up across all categories • Social occasions return but remain below pre-Covid levels 3% (3)% 6% Skin Cleansing Q4 USG FY USG 2-yr CAGR • Prestige Beauty gr
Slide 13: Foods & Refreshment
5.6% 2.9% 2.7% Foods & Refreshment FY USG FY UVG FY UPG 0% 2% 6% In-Home Q4 USG FY USG 2-yr CAGR • In-Home growth against high base driven by strong core brands and innovation • Food Service recovery accelerating throughout the 21% 23% (4)% year (-9% vs 2019) 1 Out of Home Q4 USG FY USG 2-yr CAGR •
Slide 14: Home Care
3.9% 0.7% 3.1% Home Care FY USG FY UVG FY UPG 8% 6% 4% Laundry Q4 USG FY USG 2-yr CAGR • Significant pricing taken in H2 • Clean Future innovation landing across markets (5)% (4)% 6% Home & Hygiene Q4 USG FY USG 2-yr CAGR • Home & Hygiene lapping strong base (+13% vs 2019) 1 1Average 2020 fx rates 1
Slide 15: Regional growth by quarter
Regional growth by quarter Asia / AMET / RUB Latin America €24bn TO €6bn TO 8.5% 11.9% 9.9% 8.7% 9.0% U SG 7.2% 5.7% 5.7% 5.8% 5.8% 2.3% 13.9% U PG 2.6% 2.7% 8.9% 4.3% 3.0% U VG 1.3% 0.1% - 4.8% Q4'20 Q1'21 Q2'21 Q3'21 Q4'21 FY'21 Q4'20 Q1'21 Q2'21 Q3'21 Q4'21 FY'21 North America Europe €11bn TO €11
Slide 16: FY 2021: Underlying operating margin
FY 2021: Underlying operating margin (10)bps €7.0bn1 0.2% (1.2)% 0.9% Includes C ovid costs & mix +30bps unwind 18.5% 18.4% FY 2020 Gross Margin Brand & Marketing Overheads FY 2021 Investment 1BMI FY spend at constant fx rates 16
Slide 17: FY 2021: Underlying earnings per share
FY 2021: Underlying earnings per share C urrent underlying EPS +5.5% C onstant underlying EPS +7.8% 0.1% 0.5% 1.3% (1.8)% 0.9% (2.3)% 7.7% € 2.69 €2.68 € 2.67 € 2.66 € 2.64 € 2.64 € 2.61 € 2.62 € 2.48 € 2.48 FY 2020 Turnover & Finance cost Tax Minorities SBB Other FY 2021 Currency FY 2021 operationa
Slide 18: 2021 vs multi-year financial framework
2021 vs multi-year financial framework Growth Profit Cash Underlying sales Profit growth ahead Sustained strong cash growth ahead of our of USG flow markets 3-5% USG 4.5% -10bps €6.4bn UOM Long term value creation Growing dividend though earnings growth 5.5% +3% 18
Slide 19: 2021 vs other long term financial metrics
2021 vs other long term financial metrics Savings Restructuring Savings Restructuring Savings Restructuring ROIC Savings Restructuring Leverage Savings Restructuring investment investment investment investment Ambition €2bn €2bn Mid to 2.0x Per annum Over ‘21 and ‘22 high teens approx. 2021 €2bn €0.
Slide 20: Performance summary
Performance summary Growth momentum building Stepped up pricing in inflationary environment Earnings growth Competitiveness maintained 20
Slide 21: Alan Jope - Strategic Priorities
Alan Jope Strategic Priorities 10th February 2022
Slide 22: Five clear strategic priorities
Five clear strategic priorities 1. 2. 3. 4. 5. Accelerate Purpose -led, Move Win with Lead in future-fit USA, India, portfolio into brands and channels of organisation China and high growth innovation the future & culture EMs spaces 22
Slide 23: Five clear strategic priorities
Five clear strategic priorities 1. 2. 3. 4. 5. Accelerate Purpose -led, Move Win with Lead in future-fit USA, India, portfolio into brands and channels of organisation China and high growth innovation the future & culture EMs spaces 23
Slide 24: 1. Winning with our brands
1. Winning with our brands Product Bigger, better 13 €1bn brands superiority innovations 6.4% FY’21 USG 50% of TO 71% >€1bn of turnover tested incremental turnover winning vs competition through bigger, vs better innovations 47% in 2019 (2021) 24
Slide 25: Five clear strategic priorities
Five clear strategic priorities 1. 2. 3. 4. 5. Accelerate Purpose -led, Move Win with Lead in future-fit USA, India, portfolio into brands and channels of organisation China and high growth innovation the future & culture EMs spaces 25
Slide 26: 2. Accelerating in USA, India and China
2. Accelerating in USA, India and China €9.9bn €5.6bn €3.3bn FY’21 TO FY’21 TO FY’21 TO 13.4% 14.3% 7.7% 11.2% 7.7% 6.1% 6.9% 7.9% 3.7% USG% 4.2% 0.9% 2.0% 0% 0.2% -1.7% '17 '18 '19 '20 '21 '17 '18 '19 '20 '21 '17 '18 '19 '20 '21 >75% >55% 60% >65% %BW 20% (MAT) '17 '18 '19 '20 '21 '17 '18 '19 '20 '
Slide 27: Five clear strategic priorities
Five clear strategic priorities 1. 2. 3. 4. 5. Accelerate Purpose -led, Move Win with Lead in future-fit USA, India, portfolio into brands and channels of organisation China and high growth innovation the future & culture EMs spaces 27
Slide 28: 3. Channels - eCommerce
3. Channels - eCommerce 44% eCom 2021 eCom USG Turnover contribution Omni USA 13% +31% +13% Pure play India +24% +200% + 2% eB2B China +91% +25% '16 '17 '18 '19 '20 '21 28
Slide 29: Five clear strategic priorities
Five clear strategic priorities 1. 2. 3. 4. 5. Accelerate Purpose -led, Move Win with Lead in future-fit USA, India, portfolio into brands and channels of organisation China and high growth innovation the future & culture EMs spaces 29
Slide 30: 4. A new, future-fit organisation
4. A new, future-fit organisation Simpler, faster, more category focused Unilever Corporate Centre Business Groups Beauty & Personal Home Nutrition Ice Cream Wellbeing Care Care Unilever Business Operations 30
Slide 31: 4. A new, future-fit organisation
4. A new, future-fit organisation Corporate Centre Beauty & Home Personal Care Nutrition Ice Cream Wellbeing Care Hair Care Skin Cleansing Fabric Cleaning Scratch Cooking Ice Cream Skin Care Deodorant Fabric Enhancers Healthy Snacking Prestige Oral Care Home & Hygiene Functional Nutrition Vitamins M
Slide 32: 4. A new, future-fit organisation: Go Live
4. A new, future-fit organisation Jan 22 July 22 • Designed to further improve performance • €0.6 bn savings • 15% reduction in senior Go Live Reorganisation announced management positions • H1 reported on • 5% reduction in junior current 3 Divisions management positions • Q 3 onwards reported on 5
Slide 33: Five clear strategic priorities
Five clear strategic priorities 1. 2. 3. 4. 5. Accelerate Purpose -led, Move Win with Lead in future-fit USA, India, portfolio into brands and channels of organisation China and high growth innovation the future & culture EMs spaces 33
Slide 34: 5. Portfolio change
5. Portfolio change Acquisitions Disposals Portfolio rotation (‘17-’21 % of TO) €16bn capital invested €11bn proceeds in 29 acquisitions from 12 disposals since 2017 since 2017 17% 13% O ther 7% Functional O ther Pre stige Nutrition 2% 17% 43% Te a 98% 33% 93% Spreads BPC 65% 33% UL Peers avg 34
Slide 35: 5. Portfolio change
5. Portfolio change ‘21 USG contribution High teens ROIC maintained (bps contribution to ’21 USG from acquisitions throughout period of significant portfolio rotation and disposals since ‘17) 4.5% 19% 19% 0.4% 18% 18% 17% 0.7% 3.4% USG USG USG 2017 2018 2019 2020 2021 excl. acquisitions & acquisitio
Slide 36: 5. Portfolio change
5. Portfolio change Strong M&A track record in key growth categories (Performance and FY’21 TO of major recent acquisitions) 2016 2016 2017 2017 2017 Blueair DSC C arver Q uala Sundial €230m €230m €310m €270m €300m 2015-21 Prestige Beauty 2020-21 €1bn Functional Nutrition €1.5bn 2021 36% (4)% 2% 2%
Slide 37: 5. Portfolio change
5. Portfolio change Functional Prestige Beauty Bps contribution to Nutrition1 USG Q4 18% | FY 24% Unilever USG% USG Q4 27% | FY 22% #2 #1 60 70 Skincare brand Kids multivitamin in Sephora brand on Amazon (Tatcha) (SmartyPants) 40 40 #1 #1 10 Professional Hydration 0 skincare brand globally brand glo
Slide 38: Key messages
Key messages • Focused on maximising performance from existing portfolio • Exiting 2021 with momentum • Responding to unprecedented inflation with strong pricing • Organisational change will be an accelerant • Disciplined capital allocation will continue 38
Slide 39: Graeme Pitkethly - 2022 Outlook
Graeme Pitkethly 2022 Outlook 10th February 2022
Slide 40: Capital allocation
Capital allocation Operational investment Portfolio reshape €3bn Returns to shareholders share buyback over 2022/2023 40
Slide 41: Unprecedented inflation, margin recovers
Unprecedented inflation, margin recovers Margin to be restored after 2022, with the majority coming back in 2023 G M (bps) (150) 100 (30) (160) 30 110 10 80 50 60 50 30 (55) (120) Includes Covid costs & mix UPG% 4.5 7.2% (90)bps headwind 4.4 4.8% 8.0% 7.0% 4.3 4.2 3.3% 2.9% 6.0% 4.1 4.0 1.6% 5.0% 4.
Slide 42: Outlook: 2022 Priorities and Guidance
Outlook 2022 Priorities 2022 Guidance C ontinuing growth momentum 4.5-6.5% price led growth Maintain competitive levels of spend in BMI, R&D and Managing inflationary pressure while investing for growth C apex • FY UOM 16-17%, down by 140-240bps Implementing new operating model • H1 more heavily imp
Slide 43: Unilever Full Year 2021 Results & Strategic Update
Unilever Full Year 2021 Results & Strategic Update Alan Jope & Graeme Pitkethly 10th February 2022