Unilever Plc · LSE:ULVR
Unilever — FY2005 Earnings Presentation
15 slides from Unilever's earnings presentation, Feb 9, 2006
Slide 1: 2005 results
2005 results 9 February 2006 Patrick Cescau Group Chief Executive Officer Rudy Markham Chief Financial Officer Safe Harbour Statement This presentation may contain forward-looking statements, including ‘forward-looking statements’ within the meaning of the United States Private Securities Litigation
Slide 2: 2005 – the task: Restore competitiveness and growth
2005 – the task “Restore competitiveness and growth” 2005 – the task Make the portfolio work harder • Clearer priorities • More focused resource allocation Strengthen execution and capabilities • Marketing, customer development Simpler, more agile “One Unilever” organisation • Aligned, right p
Slide 3: 2005 – more weight behind fewer priorities
2005 – more weight behind fewer priorities Restore competitiveness and growth Build on strengths Regain momentum Personal D&E Europe Care Vitality Increased support Accelerated savings 4 Building on strengths - Personal Care Growth over 6% Broad-based share gain Strong profitability Global,
Slide 4: Building on strengths - D&E markets
Building on strengths - D&E markets Strong performance • Across the year • In all major markets • Across Foods, Home Care and Personal Care 38% of Unilever’s sales • Exceeding sales in W.Europe for the first time 6 Building on strengths - Vitality 7 4
Slide 5: Regaining momentum in Europe
Regaining momentum in Europe For consumers - value, choice and innovation For customers – improved value from doing business together For our organisation – increased agility, scale and cost-efficiency 8 Regaining momentum in Europe Underlying sales decline less than -1% against -3% in For
Slide 6: Increased investment, focus on savings
Increased investment, focus on savings Step-up in investment behind our growth priorities Focus on savings €500 million more in Higher delivering over commodity A&P than in 2004 €700 million in prices Price reductions in key 2005 categories and markets 10 Decisive action on the portfolio UCI Europea
Slide 7: Unilever's change agenda
Unilever’s change agenda Win key markets Build capabilities Brand Win with building customers Fit to compete 12 2005 progress on our change agenda Simplified and clarified at the top Flatter structure, fewer layers Clearer roles, stronger capabilities One Unilever implementation 13 7
Slide 8: 2005 – LFL sales growth
2005 – LFL sales growth 3.1% USG in 2005 Growing momentum during the year Positive pricing in Q4 5.5 4.5 like growth % Like for 3.5 2.5 1.5 0.5 -0.5 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2003 2003 2003 2003 2004 2004 2004 2004* 2005* 2005 2005 2005* -1.5 14 * adjusted for calendar days 2005 – gr
Slide 9: 2005 operating margin
2005 operating margin Change 2004 2005 (bps) Full Year Operating Margin 11.0% 13.4% 240 Includes restructuring, disposals (4.6)% (1.4)% (320) and impairments Change before these items (80) Key drivers Increased investment in A&P +€500m (110) Higher input costs + €600m (150) Savings programmes >€700m
Slide 10: Investment in A&P - quantity and quality; Key 2005 financials
Investment in A&P - quantity and quality €500m increase in A&P in 2005 – 11% year-on- year Two thirds of additional A&P spent in advertising Carefully targeted behind key priorities Improved efficiency and quality of spend More consistently weighted across the year 18 Key 2005 financials
Slide 11: Delivering value to shareholders
Delivering value to shareholders Competitive balance sheet for • Competitive cost of capital • Flexibility for business development A strong, single-A credit rating €500m share buyback in 2005 5% increase in 2005 dividend Further €500m share buyback planned in 2006 20 Unilever’s financial
Slide 12: Delivering 2006: Sustain growth momentum and improve margins
Delivering 2006 “Sustain growth momentum and improve margins” Winning in key markets Win key markets Build a winning portfolio with more strong leadership positions High growth Leading market spaces positions Sharper choices and resource allocation Structure and discipline to execute People and rewa
Slide 13: 2006 priorities
2006 priorities Sustain competitiveness and growth High growth spaces Strong market positions Personal Europe D&E Vitality Care Progress on our change agenda Improve margins 24 Building capabilities A focus for 2006 - crafting and leveraging global brand mixes Brand building Applying the same method
Slide 14: Fit to compete; 2006 outlook
Fit to compete Complete One Unilever implementation A single management team in all markets Simplified, standardised business processes Majority of top 20 businesses reporting directly to the Unilever Executive Further reduction in top management structure €700 million savings by end 2006 €1
Slide 15: Entering into 2006 in much better shape
“Entering into 2006 in much better shape, with increased competitiveness and growth” 15