Unilever PLC · LSE:ULVR
Unilever — CAGNY 2009
29 slides from Unilever's conference presentation, Feb 17, 2009
Slide 1: 2009 CAGNY Jim Lawrence, Chief Financial Officer
2009 CAGNY Jim Lawrence, Chief Financial Officer 17 February 2009 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. These forward-looking st
Slide 2: Agenda; The essence of our vision in 1890
Agenda • Business Overview • Financial Performance • Growth Strategy • Fit for Growth • Priorities and Outlook Business Overview The essence of our vision in 1890 “To make cleanliness commonplace, to lessen the work for women; to foster health and contribute to personal attractiveness; that life may
Slide 3: Our Vitality mission today
Business Overview Our Vitality mission today Unilever’s mission is to add Vitality to life. We meet everyday needs of nutrition, hygiene and personal care. With brands that make people look good, feel good and get more out of life. Business Overview Business Overview A leading global consumer consum
Slide 4: Scale and geographic reach
Business Overview Scale and geographic reach Western Europe | $19bn | 32% The Americas | $19bn | 32% Asia Africa CEE | $21bn | 36% 2008 Unilever Turnover $59bn | 100% Business Business Overview Overview Unrivalled strength A leading global in D&E markets consumer company Unilever 48% of Unilever’s g
Slide 5: Balanced category portfolio
Business Overview Balanced category portfolio Savoury, Home Care Dressings & $10bn (18%) Spreads $21bn (35%) Ice Cream & Personal Care Beverages $17bn (28%) $11bn (19%) Business Overview Strong leadership positions Savoury #1 Dressings #1 Tea #1 Ice Cream #1 Spreads #1 Deodorants #1 Mass Skin #1 Lau
Slide 6: Big global brands
Business Overview Big global brands Top 25 brands = ¾ of Unilever’s sales Business Overview Local roots with global scale 6
Slide 7: Key financials
Agenda • Business Overview • Financial Performance • Growth Strategy • Fit for Growth • Priorities and Outlook Financial Performance Key financials 2008 2007 Turnover €40.5bn €40.2bn Change +0.8% +1.4% Acquisition / Disposal (1.4)% (0.8)% Exchange rates (4.8)% (3.1)% Underlying sales growth +7.4% +5
Slide 8: 4th year of accelerating growth
Financial Performance 4th year of accelerating growth 8% + 7.4% 7% Underlying sales growth 6% +5.5% 5% 4% +3.8% +3.1% 3% 2% 1% +0.4% 0% 2004 2005 2006 2007 2008 Financial Performance Additional €1.0b invested in A&P 1 +1.0 +0.9 Cumulative A&P investment € bn +0.8 0.8 0.6 +0.5 0.4 0.2 0 2005 2006 200
Slide 9: Sharp rise in commodity costs
Financial Performance Sharp rise in commodity costs Annual Commodity cost increases € bn 3.0 + 2.7 2.5 2.0 1.5 1.0 + 0.9 + 0.6 + 0.6 0.5 0.0 2005 2006 2007 2008 2008 FY commodity cost increases: € 2.7 billion Financial Performance Step up in cost savings delivery Buying Local initiatives Restructuri
Slide 10: 2008 Drivers of operating profit
Financial Performance 2008 Drivers of operating profit * Commodity Price costs 2.8 + 6% Operating 2.3 Profit Growth 1.8 1.3 €bn Savings 0.8 Other programme A&P Vol/Mix costs 0.3 Acq/Disp 0 -0.2 Underlying Profit -0.7 *Excl RDIs, constant currency Financial Performance Strong balance sheet and cash f
Slide 11: Strong balance sheet and cash flow
Financial Performance Strong balance sheet and cash flow • Strong single A rated balance sheet • Access to funding at attractive conditions sues 2 new US bond is ps) 170bgeneration % (+flow • Healthy and $750 5 yr at 3.65 m:consistent cash 80% (+180bps) $750m: 10 yr at 4. • Attractive, sustainable a
Slide 12: Strategic growth priorities: Vitality
Growth Strategy Strategic growth priorities Personal Developing & Vitality Care Emerging Markets (D&E) Growth Strategy: Priorities Vitality Making foods healthier Stronger functional claims Bouillon jelly Catechin rich tea helps proprietary technology to take care of your body shape Driving sustaina
Slide 13: Vitality and Personal Care priorities
Growth Strategy: Priorities Vitality Bertolli Frozen Lipton Linea VIDEO VIDEO Growth Strategy: Priorities Personal Care Stronger functional claims Sensorial experiences A unique formula Compelling which makes underarm Sensorials: hair feel finer, softer “Wake Up. Go and visibly reduced Fresh” Superi
Slide 14: Personal Care and D&E Markets
Growth Strategy: Priorities Personal Care Dove Deo Axe Hair VIDEO VIDEO Growth Strategy: Priorities D&E Markets Population growth Consumer penetration 1 billion new consumers in the next 10 years Re-closable Deo ministicks multi-use Mini cubes sachets Trading consumers up Conversion in foods Loose L
Slide 15: D&E Markets: long-term strength
Growth Strategy: Priorities D&E Markets Rama South Africa Surf Excel Hiccups VIDEO VIDEO Growth Strategy: Priorities Long-term strength in D&E Since 1990… 16 • Underlying sales growth 9% pa on average • Hard currency growth of 7% pa on average 14 • Volume growth 5% pa on average • Volume and value g
Slide 16: Fewer, bigger innovations; faster roll-out
Growth Strategy 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 Growth Strategy Faster roll-out to more markets 20 30 40 52 55 markets markets markets markets m
Slide 17: Science and Technology Strengths
Growth Strategy Science and Technology Strengths Spray Technology Skin Mildness Product Processing Deodorants and Moisturizing e.g. Ice Cream Hair Structured Science of Tea Technology Oils and Emulsions Growth Strategy Leverage technology across portfolio Home Care Personal Care Foods Genesis Projec
Slide 18: Playing the price piano
Growth Strategy Playing the price piano E.g. Ice Cream Build Super Premium Renovate the premium core Re-enter mass/ economy Growth Strategy Strengthen our value brands 18
Slide 19: Strengthen our value brands
Growth Strategy Strengthen our value brands Suave In the Motherhood Communication VIDEO Agenda • Business Overview • Financial Performance • Growth Strategy • Fit for Growth • Priorities and Outlook 19
Slide 20: Multi-country organisations; One Unilever in the UK
Fit for Growth Multi-country organisations (2008) (2005) (2007) Multi-Country Pre-One One Unilever & Multi- Unilever Category Org Country/ Category matrix Fewer touch points Improved Quicker decisions performance Fit for Growth One Unilever in the UK 2006 2008 3 Separate 1 Company Companies 3 Separa
Slide 21: Building regional supply chains
Fit for Growth Building regional supply chains Past Future Country A Region Opco Opco One U Opco Country a Country B Opco One U Opco Country b Opco Country C One U Opco Country c Opco Opco = source, make, plan, deliver Fit for Growth Radical simplification in W Europe • Past • Future A complex, 65 C
Slide 22: Number of managers almost halved
Fit for Growth Number of managers almost halved 1200 Top 3 levels of management 1000 800 600 400 200 0 2005 2008 Management headcount reduced by 45% Fit for Growth Restructuring is well on track Plan 2007-2010 Actual to date Multi-country organisations From 100 units 29 to 20-25 MCOs Factory closure
Slide 23: Disposals and acquisitions in 2008
Fit for Growth Disposals in 2008 Including: Boursin Cheese Lawry’s Seasonings NA Laundry Bertolli Olive Oil Disposals completed with €1.6 billon turnover Average 1.8x sales multiple Fit for Growth Acquisitions in 2008 Buavita in Indonesia Inmarko in Russia TIGI Global 23
Slide 24: Unilever's top management team
Agenda • Business Overview • Financial Performance • Growth Strategy • Becoming Fit for Growth • Priorities and Outlook Priorities and Outlook Unilever’s top management team P. Polman M. Treschow Chief Executive Officer Chairman M. Polk D. Baillie H. Manwani V. Banga G. Berger S. Ogg J. Lawrence Pre
Slide 25: A global management team
Priorities and Outlook A global management team Priorities and Outlook Strengthened with external top talent P. Polman M. Treschow Chief Executive Officer Chairman M. Polk D. Baillie H. Manwani V. Banga G. Berger S. Ogg J. Lawrence President President President President Chief R&D Chief HR CFO Ameri
Slide 26: Priorities for 2009
Priorities and Outlook Priorities for 2009 1. Reignite volume growth 2. Protect cash flow and margin Reignite volume growth Strengthen brands and portfolio • 30-day ‘fix-it’ plans • Drive innovation harder and faster • Strengthen offerings in value segment • Invest in D&E, such as China and Russia 2
Slide 27: Improve go-to-market capabilities
Reignite volume growth Improve go-to-market capabilities • Better customer service levels • Focus on fast-growing customers • New Customer Innovation Centers • Excellence in shopper marketing Reignite volume growth Sharpen organisation and culture • Strengthen leadership in key roles • Elevate profi
Slide 28: Protect cash flow and margin; Outlook
Priorities and Outlook Protect cash flow and margin • Accelerate restructuring savings • Management salary freeze • Reduction in travel and consultancy costs • Buying synergies and marketing efficiencies Outlook • Unpredictable economic environment • Focus on short-term priorities 1. Reignite volume
Slide 29: Questions
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