Slide 1: Unilever Full Year 2020 Results & Strategic Refresh
Unilever Full Year 2020 Results & Strategic Refresh Alan Jope & Graeme Pitkethly 4th February 2021
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’, ‘looks’, ‘believes’, ‘vi
Slide 3: Today's agenda
Full Year 2020 Results & Strategic Refresh Full Year 2020 Results Today’s agenda Strategic Refresh 3
Slide 4: Full Year 2020 Results
Full Year 2020 Results
Slide 5: 2020: Full year results
2020: Full year results Competitiveness Absolute Profit Cash UOP €9.4bn % Business Winning FY Free Cash Flow >50% +0.7% €7.7bn >60% (60)bps +€1.5bn % Business Winning Q4 UOM vs FY 2019 Absolute UOP as reported, UOP growth rate on constant basis 5
Slide 6: Competitive growth through operational excellence
Competitive growth through operational excellence Improved penetration Impactful innovation Design for channel Purposeful brands Fuel for growth 6
Slide 7: Strategic change agenda
Strategic change agenda Sustainable Legal Shaping the business simplification portfolio 7
Slide 8: FY 2020 Growth
1.9% 1.6% FY 2020 Growth FY USG FY UVG USG 0.0% (0.3)% 4.4% 3.5% • Volume-led competitive growth with >60% 0.2% business winning value share (Q4) UPG • Virus continues to cause volatility across UVG markets with channel closures and restricted 3.3% living returning • Some markets opening up economie
Slide 9: Category dynamics
€51bn Category dynamics Turnover FY 2020 €8bn Laundry TO FY 2020 FY 1% €9bn Hygiene TO FY 2020 0% (1)% 4% 2% FY 16% Q1 Q2 Q3 Q4 26% 19% €0.7bn €14bn 7% 11% Prestige TO FY 2020 Personal care TO FY 2020 FY (2)% Q1 Q2 Q3 Q4 FY (4)% 8% (2)% (5)% (2)% (3)% (2)% (10)% (10)% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 €15bn €
Slide 10: Beauty & Personal Care
1.2% 1.2% Beauty & Personal Care FY USG FY UVG Skin Cleansing Prestige Rest of BPC +15% FY USG (2)% FY USG (4)% FY USG +9% Q4 USG (5)% Q4 USG (2)% Q4 USG >50% business through ecommerce channel Rest of BPC: Hair care, Deodorants, Skin Care, Oral Care 10
Slide 11: Foods & Refreshment
1.3% 0.1% Foods & Refreshment FY USG FY UVG In Home Out of Home +12% FY USG (26)% FY USG +13% Q4 USG (20)% Q4 USG Food Service impacted by second wave lockdowns (71)% April USG (25)% Q4 USG Second lockdowns J F M A M J J A S O N D UFS included in other categories 11
Slide 12: Home Care
4.5% 5.1% Home Care FY USG FY UVG Home & Hygiene Laundry +17% FY USG +1% FY USG +14% Q4 USG +2% Q4 USG 12
Slide 13: eCommerce
eCommerce Brazil Omnichannel +44% +99% eCommerce Growth +61% China Pure play +54% +48% 9% eCommerce % of Sales USA eB2B +123% +65% eB2B excludes UFS 13 Growth rates FY
Slide 14: Asia / AMET / RUB
0.4% 0.0% Asia / AMET / RUB FY USG FY UVG USG (3.7)% (1.8)% 4.5% 2.6% • China: back to normal after strict lockdown UPG • India: economic pick-up UVG 0.5% • SEA: markets in decline 2.1% • Turkey: strong volume-led performance • Winning competitively across all regions Q1 Q2 Q3 Q4 2020 2020 2020 2020
Slide 15: Latin America
4.1% 0.9% Latin America FY USG FY UVG USG 4.9% (0.8)% 6.5% 5.8% • Brazil: growth resilient but limited mobility UPG UVG 2.9% • Argentina: growth despite restrictions 2.8% • Mexico: decline in difficult environment • Competitive in volatile region Q1 Q2 Q3 Q4 2020 2020 2020 2020 15
Slide 16: North America
7.7% 8.1% North America FY USG FY UVG USG 4.8% 9.5% 9.1% 7.1% • In Home F&R growth continues UPG UVG 8.5% • Hygiene demand high but down from peak • Food Service & Prestige impact of c.(2.4)% (1.3)% • Competitiveness improving sequentially Q1 Q2 Q3 Q4 2020 2020 2020 2020 16
Slide 17: Europe
(1.0)% 0.2% Europe FY USG FY UVG USG 1.4% (4.5)% (0.8)% 0.8% • Channel closures impacting Out of Home UPG • In home F&R demand high 1.8% UVG (1.1)% • UK & Germany: growth maintained • Italy & Spain: declines driven by Out of Home ice cream • Strong and improved competitiveness Q1 Q2 Q3 Q4 2020 2020
Slide 18: FY 2020: Turnover -2.4%
FY 2020: Turnover -2.4% USG 1.9% 1.4% (0.2)% 0.3% 1.6% A&D 1.2% €53.6 bn €52.0 bn (5.4)% €50.7 bn 18
Slide 19: FY 2020: Underlying operating margin
FY 2020: Underlying operating margin Gross Margin (0.5)% BMI H1 +1.0% H2 (1.0)% 0.4% 0.0% (0.1)% 19.1% (0.9)% 18.5% 19
Slide 20: FY 2020: Underlying earnings per share
FY 2020: Underlying earnings per share Current Underlying EPS (2.4)% 3.0% 0.3% 1.9% (1.6)% 0.5% €2.65 €2.55 Constant Underlying EPS +4.1% (6.5)% €2.48 20
Slide 21: FY 2020: Cash flow, balance sheet & returns
FY 2020: Cash flow, balance sheet & returns Cash Cash Conversion Net Debt ROIC Free Cash Flow Cash Conversion Net debt/EBITDA ROIC €7.7bn 129% 1.8x 18% +€1.5bn Above 100% since 2018 €20.9bn Maintained in high teens Vs 2019 Net debt 21
Slide 22: FY 2020: Summary
FY 2020: Summary Resilience, agility, and responsiveness Stepped-up competitiveness, profit & cash delivery Continued strategic progress 22
Slide 23: Strategic Refresh
Strategic Refresh Sustainable business driving superior performance
Slide 24: What we are going to cover
Sustainable business driving superior performance 1. Vision and purpose 2. Our differentiating strengths What we are going 3. Delivery against strategy to cover 4. Strategic choices 5. Multi-year financial framework 6. Conclusion 24
Slide 25: Our vision
Vision and Purpose Our vision is to be the global leader in sustainable business. We will demonstrate how our purpose-led, future-fit business model drives superior performance, consistently delivering financial results in the top third of our industry. 25
Slide 26: Differentiating strengths
Differentiating strengths
Slide 27: Our differentiating strengths
Our differentiating strengths 1. Powerful 2. Strong presence 3. The global portfolio of leading in growth markets leader in category and of the future sustainable brand positions business 27
Slide 28: Global category leadership
Our differentiating strengths 1. Powerful portfolio of leading category and brand positions Global category 50% leadership of turnover from 13 positions billion Euro brands 81% Most effective marketer brands #1 or #2 in their market for 4 consecutive years 28
Slide 29: Our differentiating strengths: Powerful brand portfolio
Our differentiating strengths: Powerful brand portfolio 29
Slide 30: Strong presence in growth markets of the future
Our differentiating strengths 1. Powerful portfolio of 2. Strong presence in growth leading category and markets of the future brand positions Leading 40bn position consumer reach points; more than any other in growth markets competitor Market development 93% local leaders a core capability 30
Slide 31: Strong presence in growth markets of the future
Our differentiating strengths: Strong presence in growth markets of the future Unilever market position #4 #1 #7 #1 #1 #2 #1 #2 #1 #3 Absolute GDP growth 2020 – 2030 US$trn 14.1 Unilever sales €bn 9.4 8.6 5.0 4.7 2.8 2.5 2.4 2.4 2.2 1.2 0.9 1.0 1.0 0.7 0.7 0.6 0.7 0.7 0.7 China India USA Indonesia T
Slide 32: The global leader in sustainable business
Our differentiating strengths 3. The global leader in sustainable business Top Leader of GlobeScan in Dow Jones Sustainability Leaders Sustainability Index survey for last 10 years since 2014 ‘A/A-’ Strategy Ratings in CDP: Climate, fully embedded in Water and Forest our business and brands with pur
Slide 33: Top of GlobeScan SustainAbility Leaders Survey
Our differentiating strengths: Top of GlobeScan SustainAbility Leaders Survey 42 26 14 8 8 7 6 5 4 4 3 3 3 Unilever Patagonia Ikea Interface Natura Danone Tesla Nestle Microsoft Orsted Marks & L’Oreal Tata & Co Spencer Experts, unprompted, total mentions, 2020 33
Slide 34: Purpose drives brand power
Our differentiating strengths: The global leader in sustainable business Purpose drives brand power Brand power drives volume share 90 80 70 60 Volume Share 50 40 R² = 0.76 30 R² = 0.71 20 10 0 0 10 20 30 40 50 60 70 -10 Brand Power Brand Power 34
Slide 35: The global leader in sustainable business
Our differentiating strengths: The global leader in sustainable business More Lower Less Stronger growth cost risk talent Purposeful brands €1.2bn 100% 54 of 75 since 2008 renewable Employer of choice in growing 2x electricity across our operations markets measured 35
Slide 36: Our differentiating strengths
Our differentiating strengths 1. Powerful 2. Strong presence 3. The global portfolio of leading in growth markets leader in category and of the future sustainable brand positions business 36
Slide 37: Delivery against our strategy
Delivery against our strategy
Slide 38: Our 2017 strategy scorecard
Our 2017 strategy scorecard USG in 3-5% range 3% average, 2017-19 Simpler, faster organisation Foods & Refreshment integrated, COO role, delayered organisation Accelerated margin progression UOM 16.4% 19.1% >€6bn savings 2017-19 100% cash conversion by 2020 >100% since 2018 Faster portfolio evolut
Slide 39: A flatter, leaner organisation
A flatter, leaner organisation… 2018 organisation CEO Global Functions Divisions Clusters N America Supply Chain Latin America Finance Beauty & Personal Care Europe Human Resources Home Care NAMETRUB Legal Foods Africa Global Marketing Refreshment N Asia Communications S Asia Sustainability SEAA 39
Slide 40: A flatter, leaner organisation
A flatter, leaner organisation… COO 15 performance management units North America UK and Middle Europe NAMET and RUB* North Asia South East Asia Indonesia Ireland and Thailand Vietnam Latin America Australia and Western Europe East Europe Africa South Asia New Zealand Philippines *North Africa, Midd
Slide 41: A new model for operational excellence
…and a new model for operational excellence Improved penetration 60% cells improving Impactful innovation Covid-19 response: Lifebuoy, Dove, Domestos Design for channel eComm: +61% USG FY ‘20 Purposeful brands Nearly 60% of brands seen as more purposeful Fuel for growth Free cash flow: €7.7 bn 41
Slide 42: Driving a rebound in competitiveness
Driving a rebound in competitiveness % Business winning value share since 2017 % Business winning value share during 2020 65% 53% 51% 49% 48% 48% 47% 47% 47% 44% 44% 44% 51% 42% 49% 40% 47% 46% Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Dec Mar Jun Sep Dec 17 18 18 18 18 19 19 19 19 20 20 2
Slide 43: Strategic Choices
Strategic Choices
Slide 44: Five strategic choices
Five strategic choices 1. Develop our portfolio into high growth spaces 44
Slide 45: Evolve portfolio towards higher growth segments
We will continue to evolve our portfolio towards higher growth segments in home care, beauty, personal care, and foods.
Slide 46: Clear criteria for investment choices
Clear criteria for investment choices Potential in Route to Branding & Scale High growth growth countries leadership technology sensitive Prestige Functional Plant-based Hygiene Skin care beauty nutrition foods 46
Slide 47: Portfolio evolution into higher growth spaces
Laundry Home & Hygiene Care Home Skin Cleansing Deodorants Oral Care Hair Care Beauty & Skin Care Personal Care Prestige Beauty Portfolio evolution into higher growth spaces Functional nutrition Plant-based foods Scratch cooking Foods & Refreshment Ice Cream 47
Slide 48: Portfolio evolution into higher growth spaces
Laundry Home & Hygiene Priority focus area Skin Cleansing Deodorants Oral Care Hair Care Skin Care Prestige Beauty Portfolio evolution into higher growth spaces Functional nutrition Plant-based foods Scratch cooking Ice Cream 48
Slide 49: Portfolio evolution into higher growth spaces
4 % Laundry Home & Hygiene 5 % Priority focus area Skin Cleansing Deodorants Oral Care 17% Hair Care Skin Care €16bn M&A capital deployed ‘15-20 Prestige Beauty 72% Portfolio evolution into higher growth spaces Functional nutrition Plant-based foods Scratch cooking 3 % Ice Cream 49
Slide 50: Building Prestige beauty and Functional nutrition to scale
Building Prestige beauty and Functional nutrition to scale €1.1bn* €0.7bn Prestige beauty Functional nutrition 2015 2016 2017 2018 2019 2020 2018 2019 2020 2020 Annualised *Annualised for all acquisitions 50
Slide 51: Five strategic choices
Five strategic choices 1. Develop our portfolio into high growth spaces 2. Win with our brands as a force for good, powered by purpose & innovation 51
Slide 52: Connecting with consumers of the future
Connecting with consumers of the future % of global adult population % of global adult population 2020 = 45% 2020 = 55% 75 72 63 56 Baby boomers GenX Millennial GenZ % motivated to be loyal to brands making positive impact Source: GlobeScan, Healthy & Sustainable Living Report 2019 / UN population d
Slide 53: Putting brand purpose into action
Putting brand purpose into action Improve people’s Contribute to a fairer, Improve the health Win with differentiated health, confidence and more socially inclusive of the planet science and technology wellbeing world • Clean Future: fossil- • Dove Self-Esteem • Ben & Jerry’s: • Proven effectiveness
Slide 54: Five strategic choices
Five strategic choices 1. Develop our portfolio into high growth spaces 2. Win with our brands as a force for good, powered by purpose & innovation 3. Accelerate in USA, India, China and leverage EM strength 54
Slide 55: Sharpening our focus in future growth markets
Sharpening our focus in future growth markets USA India C hina Leverage EM strength • €9bn business, 18% of • No. 1 FMCG; 10% of • €3bn business, 6% of • €1bn+ businesses in turnover turnover turnover Brazil, Indonesia, Philippines, Turkey, • 10% of global growth • 20% of global growth • 30% of glob
Slide 56: Five strategic choices
Five strategic choices 1. Develop our portfolio into high growth spaces 2. Win with our brands as a force for good, powered by purpose & innovation 3. Accelerate in USA, India, China and leverage EM strength 4. Lead in the channels of the future 56
Slide 57: A future-fit channel strategy
A future-fit channel strategy Accelerate pure-play and Develop eB2B Drive category leadership omnichannel eCommerce business platforms through shopper insight Brazil value pack image • Growing 65%, with top four • 14m distributive trade • Advanced shopper insight markets growing 77% stores in Asia /
Slide 58: Five strategic choices
Five strategic choices 1. Develop our portfolio into high growth spaces 2. Win with our brands as a force for good, powered by purpose & innovation 3 Accelerate in USA, India, China and leverage EM strength 4. Lead in the channels of the future 5. Build a purpose-led, future-fit organisation and gro
Slide 59: Driving growth through capacity, capability and culture
Driving growth through capacity, capability and culture Unlock capacity Be a beacon for diversity, Build capability Continue to generate through agility and inclusion and values- through lifelong fuel for growth digital transformation based leadership learning People shots • Leveraging • Championing
Slide 60: Five strategic choices
Five strategic choices 1. Develop our portfolio into high growth spaces 2. Win with our brands as a force for good, powered by purpose & innovation 3. Accelerate in USA, India, China and leverage EM strength 4. Lead in the channels of the future 5. Build a purpose-led, future-fit organisation and gr
Slide 61: Multi-year financial framework
Multi-year financial framework
Slide 62: Steps to higher growth
Steps to higher growth Market Operational Continued development excellence portfolio (Growing markets) (Competitive growth) evolution 62
Slide 63: Multi-year financial framework
Multi-year financial framework Growth Profit Cash Underlying sales growth ahead of our Profit growth ahead of Sustained strong cash markets sales growth flow 3 – 5%USG Delivering long term value creation Growing dividend through earnings growth 63
Slide 64: Other long term financial metrics
Other long term financial metrics Savings Restructuring ROIC Leverage investment €2bn €1bn Mid to high teens 2x per annum for 2021 and 2022, approx lower thereafter 64
Slide 65: Restructuring investments
Restructuring investments 2017 - 2020 2021 - 2022 Investment €3.6bn Investment €2bn Incremental savings €1.5bn Incremental savings €1.3bn Average cash payback 3 years Average cash payback 3 years • Investments: • Supply chain network reset • Future Fit Operations • Focused on European supply chain a
Slide 66: Capital allocation
Capital allocation Operational Portfolio Returns to investment reshape shareholders • Brand growth and • Acquisitions • Dividends innovation • Disposals • Share buybacks • Sustainability • Partnerships • Minority buybacks • Channel and digital capability 66
Slide 67: Conclusion
Conclusion
Slide 68: Sustainable business driving superior performance
Sustainable business driving superior performance • Leveraging our three Our vision differentiating strengths is to be the global leader in sustainable business. We will • Five clear strategic choices to demonstrate how our purpose-led, drive our growth future-fit business model drives superior perf
Slide 69: Q&A
Q&A