Unilever PLC · LSE:ULVR
Unilever — H1 2012 Earnings Presentation
31 slides from Unilever's earnings presentation, Jul 26, 2012
Slide 1: Unilever First Half 2012 Results
Unilever First Half 2012 Results Paul Polman – CEO Jean-Marc Huët – CFO James Allison – Head of IR and M&A July 26th 2012
Slide 2: Safe Harbour Statement
Safe Harbour Statement This announcement 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’, ‘believes’, ‘vision’, or
Slide 3: The environment remains very challenging
The environment remains very challenging Market growth slowing Currencies more volatile Competition still fierce UK Fabric Solution Wash GDP growth Brazilian Real vs. € average index price 9.8% China 150 8.9% 7.6% -15% Key competitor 130 6.7% India 5.3% 110 Unilever Persil Brazil 0.8% 90 2010 Q2 ‘10
Slide 4: Commodity cost volatility continues
Commodity cost volatility continues Crude oil back over $100 Drought conditions in the US Commodities edging up Brent Crude US$ p.b. Index to 100 Corn $100 Soy bean Wheat May 2012 July 2012 May 2012 July 2012
Slide 5: Agility, discipline, performance
Agility, discipline, performance Fit to compete in a challenging environment
Slide 6: Consistent strong results
Consistent strong results Balanced growth D&E: consistent performance Unilever H1’12 Underlying sales growth 7.0% 13% 12% 12% 11% 11% 10% 4.1% 2.8% USG Volume Price Q1 '11 Q2 '11 Q3 '11 Q4 '11 Q1 '12 Q2 '12 On track to break the €50bn mark in 2012
Slide 7: Good progress in Personal Care
Good progress in Personal Care Value share – Deodorants global Value shares - Hair care US Value shares – Toilet Soaps US % % 32 % 50.1 42.4 30 39.3 28 46.5 26 2009 L12w 2009 2010 2011 2012 2009 L12w Unilever Competitor
Slide 8: Dove momentum continues - now more than €3bn turnover
Dove momentum continues - now more than €3bn turnover Turnover Dove Revolution €3bn €2bn €1bn 1955 1980 2000 2012 50 years to reach €1bn; 11 years to add another €2bn
Slide 9: Europe: Competitiveness improving
Europe: Competitiveness improving H1 ‘11 H1 ‘12 USG 1.2% 1.1% Deteriorating economic and retail environment Selective investment in good growth opportunities Price 1.2% 0.7% Gaining volume and value share 0.3% Iron discipline in costs – making tough choices 0.0% Volume
Slide 10: A new Unilever: Clearer choices, better innovation
A new Unilever: Clearer choices, better innovation Magnum – our next €1bn brand Knorr Jelly – €100m by year-end M&A: TRESemmé Brazil > €100m year 1 Allocating A&P resources behind brands and categories with higher growth potential
Slide 11: A new Unilever: Sustainable Living
A new Unilever: Sustainable Living Consumer facing innovation Customer joint activities Raw materials
Slide 12: A new Unilever: A mindset of continuous improvement
A new Unilever: A mindset of continuous improvement Complexity: Enterprise Support Consistent record of Tea formulations reduced 27% ↑ Service ↓ Cost supply chain savings €bn 1.1 1.2 1.2 2009 2010 2011
Slide 13: Jean-Marc Huët – CFO
Jean-Marc Huët – CFO
Slide 14: H1 2012 Turnover growth: healthy balance of volume and price
H1 2012 -11.5% Turnover growth: healthy balance of volume and price USG 7.0% 2.2% 1.9% 4.1% 2.8% €25.4bn €22.8bn Turnover H1'11 Vol/Mix Price FX M&A Turnover H1'12
Slide 15: Q2 2012 – 11% Turnover growth with positive FX and M&A
Q2 2012 – 11% Turnover growth with positive FX and M&A USG 5.8% 1.9% 3.1% 3.5% 2.2% €13.2bn €11.9bn Turnover Q2'11 Vol/Mix Price FX M&A Turnover Q2'12
Slide 16: Personal Care: Performing strongly
Personal Care: Performing strongly 1/3rd of Unilever’s turnover Strong growth Innovations reach >60 markets within 12 months H1’12 10.4% Foods Personal Care 6.7% 3.5% Refreshment Home Care USG Volume Price
Slide 17: Foods: Solid growth driven by price
Foods: Solid growth driven by price Volumes impacted by relative pricing Roll out of innovations continues Market development campaigns H1’12 4.2% 3.2% -1.0% USG Volume Price
Slide 18: Home Care: Strong momentum continues
Home Care: Strong momentum continues Underlying sales growth Key markets gaining share Innovation driving share gains Brazil 9.9% 10.0% 9.6% 9.2% 7.4% 6.0% India United Kingdom Q1 '11 Q2 '11 Q3 '11 Q4 '11 Q1 '12 Q2 '12
Slide 19: Refreshment: Growth driven by Ice Cream
Refreshment: Growth driven by Ice Cream Cornetto film China 280m views Refreshment volumes impacted by weather B&J’s scoop shop – Japan H1’12 4.9% 4.5% 0.3% USG Volume Price
Slide 20: H1 2012 - Gross margin at 39.7%
H1 2012 - Gross margin at 39.7% gross margin bps change Commodity cost inflation higher than mid-single digit -40 Sequential improvement in gross margin continues -130 Full year 2012 gross margin expected to be modestly higher -230 H1 ‘11 H2 ‘11 H1 ‘12 Constant exchange rate
Slide 21: H1 2012 – Again A&P investment up €320m
H1 2012 – Again A&P investment up €320m A&P €bn €3.3bn H1 '11 H2 '11 H1 '12 Constant exchange rate Strong support behind our brands Digital advertising up 50% year-to-date 2012 A&P will increase at least in line with turnover
Slide 22: H1 2012 - Core operating margin flat
H1 2012 - Core operating margin flat +50bps +20bps -40bps -10bps +30bps 13.7% 13.7% H1 2011 GM % A&P % Overheads before Business H1 2012 restructuring restructuring
Slide 23: H1 2012 - Core earnings per share €0.76
H1 2012 - Core earnings per share €0.76 €0.01 €0.01 €0.01 €0.03 €0.07 €0.76 6.2% growth €0.71 Core EPS Operational Currency Tax Pensions Minorities Core EPS H1 '11 Performance H1 '12
Slide 24: H1 2012 - Balance sheet
H1 2012 - Balance sheet Net Debt €9.2bn Pension deficit €4.1bn Up €0.4bn Up €0.9bn Cash contribution to pensions €0.3bn Quarterly dividend per share Full year expected €0.7bn €0.2430
Slide 25: H1 2012 - Free cash flow up €0.7bn
H1 2012 - Free cash flow up €0.7bn €0.1bn €0.3bn €0.0bn €0.9bn €1.5bn €0.8bn H1 '11 Operating Capex Tax Interest H1 '12 activities
Slide 26: Trading working capital negative for 11 quarters
Trading working capital negative for 11 quarters Trading Working Capital % Turnover (closing) 5% 0% -5% Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 H1 11 H2 11 H1 12
Slide 27: Paul Polman – CEO
Paul Polman – CEO
Slide 28: Driving the virtuous circle of growth, each and every year
Driving the virtuous circle of growth, each and every year Cost Profitable Leverage Volume + Growth Efficiencies Cost Innovation Savings A&P / R&D Return on Supply Chain Indirects Marketing Efficiencies Management Investment
Slide 29: Our priorities remain unchanged
Our priorities remain unchanged 1. Volume growth ahead of the market 2. Steady and sustainable core operating margin improvement 3. Strong cash flow
Slide 30: Unilever First Half 2012 Results
Unilever First Half 2012 Results Paul Polman – CEO Jean-Marc Huët – CFO James Allison – Head of IR and M&A July 26th 2012
Slide 31: H1 2012: Fully diluted earnings per share €0.75
H1 2012: Fully diluted earnings per share €0.75 €0.01 €0.01 €0.01 €0.03 €0.07 €0.04 €0.03 €0.77 -2.8% €0.75 EPS Operational Currency Tax Pensions Minorities Disposals One-off and EPS H1 '11 Performance others H1 '12