Unilever Plc · LSE:ULVR
Unilever — FY 2023 Earnings Presentation
41 slides from Unilever's earnings presentation, Feb 8, 2024
Slide 1: FY 2023 Results
Sugar Free Unilever FY 2023 Results Hein Schumacher & Fernando Fernandez 8 February 2024
Slide 2: Safe harbour statement
FY 2023 RESULTS Safe harbour statement This document may contain forward-looking statements within the meaning of the securities laws of certain jurisdictions, including 'forward-looking statements' within the meaning of the United States Private Securities Litigation Reform Act of 1995. Words and t
Slide 3: 2023 highlights, results & outlook, Growth Action Plan update, Q&A
2023 highlights 2023 results & outlook Growth Action Plan update Q&A
Slide 4: Making progress, but more to do…
FY 2023 RESULTS Making progress, but more to do… Returned to positive volumes with improved margin, driven by 30 Power Brands Tightened grip on working capital leading to strong free cash flow Increased brand and marketing investment, focused on 30 Power Brands Made significant changes in Ice Cream
Slide 5: Growth Action Plan being implemented at pace
FY 2023 RESULTS Growth Action Plan being implemented at pace Faster growth 1. Focus on 30 Power Brands Faster growth 2. Drive unmissable brand superiority 3. Scale multi-year innovation 4. Increase brand investment and returns 5. Selectively optimise portfolio Productivity & simplicity 6. Build back
Slide 6: 2023 results & outlook
2023 results & outlook Fernando Fernandez
Slide 7: Volumes improving as price growth slows
FY 2023 RESULTS Volumes improving as price growth slows Full year 2023 Price and volume 7.0% 0.2% 6.8% 13.3% 10.7% USG UVG UPG 9.2% 10.5% 8.2% UPG UVG Growth across all Business Groups 7.9% 5.8% 4.7% USG Positive volume growth for the year and Q4 5.2% 2.8% Price growth slowed as inflation eased (0.2
Slide 8: Beauty & Wellbeing
FY 2023 RESULTS Beauty & Wellbeing €12.5bn turnover | 18.7% UOM Strong full year performance with volume-led growth 8.3% USG 4.4% UVG 3.8% UPG UPG UVG USG 9.3% 8.8% 7.7% 7.4% 7.9% 6.3% 4.9% 2.6% 3.6% (0.6)% Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Volume accelerated in Q4 Health & Wellbeing and Strong growth f
Slide 9: Personal Care
FY 2023 RESULTS Personal Care €13.8bn turnover | 20.2% UOM Strong performance, fuelled by mid-teens growth in Deodorants 8.9% USG 3.2% UVG 5.5% UPG UPG UVG USG 12.7% 9.1% 9.0% 8.0% 6.4% 3.0% 3.4% 3.9% 2.5% (3.5)% Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Fourth consecutive quarter Oral Care consistent mid- Skin
Slide 10: Home Care
FY 2023 RESULTS Home Care €12.2bn turnover | 12.3% UOM Positive second half volumes, with sharp price growth deceleration 5.9% USG (0.9)% UVG 6.8% UPG UPG UVG USG 12.3% 10.2% 6.7% 5.3% 1.7% (2.1)% 0.4% 0.8% (3.8)% (2.8)% Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Fabric Cleaning negative Q4 Fabric enhancers grow
Slide 11: Nutrition
FY 2023 RESULTS Nutrition €13.2bn turnover | 18.6% UOM Price-led growth as we responded to higher input costs 7.7% USG (2.2)% UVG 10.1% UPG UPG UVG USG 11.9% 10.1% 8.9% 5.6% 4.7% (1.3)% (4.1)% (2.6)% (3.8)% (1.1)% Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Largest brands, Knorr and Double-digit growth in Food Eu
Slide 12: Ice Cream
FY 2023 RESULTS Ice Cream €7.9bn turnover | 10.8% UOM Disappointing performance reflecting poor execution and consumer downtrading 2.3% USG (6.0)% UVG 8.8% UPG UPG UVG USG 6.0% 5.6% 2.9% (2.8)% (0.4)% (9.9)% (4.1)% (5.8)% (0.8)% (10.1)% Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Stepped up promotions in Out of h
Slide 13: Regional performance
FY 2023 RESULTS Regional performance Asia Pacific Africa - €26bn turnover Europe - €12bn turnover Q4 Full year Q4 Full year 1.9% Underlying sales growth 6.5% Underlying sales growth 2.5% Underlying sales growth 4.1% Underlying sales growth 0.7% 1.1% 1.1% 5.3% (6.3)% 9.4% (7.7)% 12.8% UVG UPG UVG UPG
Slide 14: 7% underlying sales growth, with adverse currency and net disposals
FY 2023 RESULTS 7% underlying sales growth, with adverse currency and net disposals Turnover (0.8)% USG 7.0% A&D (1.7)% 6.8% 0.5% 0.2% (2.1)% (5.7)% €60.1bn €59.6bn FY 2022 UVG UPG Acquisitions Disposals Currency FY 2023 14
Slide 15: Improved margin with a significant step-up in brand investment in H2
FY 2023 RESULTS Improved margin with a significant step-up in brand investment in H2 Underlying operating margin +60 bps +2.0% (1.3)% (0.1)% Increased investment 16.1% focused on 30 Power Brands 16.7% FY 2022 Gross margin BMI Overheads FY 2023 15
Slide 16: Strong progress on gross margin recovery
FY 2023 RESULTS Strong progress on gross margin recovery Gross Margin +200bps H1: +30bps vs PY H2: +330bps vs PY vs PY (380)bps Price coverage Mix Portfolio change 2019 2020 2021 2022 2023 2023 vs 2019 16
Slide 17: Operational performance offset by currency headwinds
FY 2023 RESULTS Operational performance offset by currency headwinds Underlying earnings per share Current underlying EPS +1.4% 2.0% 1.1% 10.3% (1.6)% (0.8)% (9.6)% €2.84 €2.60 €2.57* Constant underlying EPS +11.0% FY 2022 Operational Finance Tax Share Minorities & FY 2023 Currency FY 2023 performan
Slide 18: Strong cash, improving ROIC
FY 2023 RESULTS Strong cash, improving ROIC Strong cash generation Improving ROIC Robust balance sheet €7.1bn Free cash flow* 16.2% ROIC 2.1x Closing net debt / underlying EBITDA +€1.9bn +20bps €23.7bn vs FY 2022 free cash flow vs FY 2022 ROIC Closing net debt 111% Cash conversion * Including €0.4bn
Slide 19: Investment priorities and capital allocation
FY 2023 RESULTS Investment priorities and capital allocation Organic growth Net productivity Shareholder returns +130bps Increased BMI vs PY as % of turnover 2.9% Capex as % of turnover €5.9bn Capital returned to shareholders in 2023 +10bps 0.8% €4.4bn Increased R&D spend vs PY as % of turnover Rest
Slide 20: Reallocating capital into premium segments
FY 2023 RESULTS Reallocating capital into premium segments Disposals Acquisitions 20
Slide 21: Measuring competitiveness through turnover-weighted market share
FY 2023 RESULTS Measuring competitiveness through turnover-weighted market share 90 Market-weighted share change (in bps) 60 Unilever FY2023 7.0% USG 30 0 -30 2021 2022 2023 Helped by our footprint Measured business ~70% 6.5% (UPG capped to 26% in hyper-inflation markets) turnover USG Turnover-weigh
Slide 22: 2024 outlook
FY 2023 RESULTS 2024 outlook Growth Margin Capital returns Underlying sales growth for Modest improvement in UOM Attractive, sustainable full year 2024 to be within our for the full year dividend multi-year range of 3-5% More balance between volume Further Gross Margin €1.5bn share buyback and price
Slide 23: Growth Action Plan update
FY 2023 RESULTS Growth Action Plan update Hein Schumacher 23
Slide 24: Implementing Growth Action Plan at pace
FY 2023 RESULTS Implementing Growth Action Plan at pace Faster growth Performance culture Productivity & simplicity 24
Slide 25: Faster growth
FY 2023 RESULTS Faster growth 25
Slide 26: Focus first on 30 Power Brands
FY 2023 RESULTS Faster growth Focus first on 30 Power Brands Progress 30 Power Brands now account for ~75% of turnover Growth and margin accretive Growth led by Rexona, Hellmann’s, Sunsilk, Vaseline and Liquid I.V. 2024 priorities Prioritising investment behind these brands Ensuring brilliant execut
Slide 27: Drive unmissable brand superiority
FY 2023 RESULTS Faster growth Drive unmissable brand superiority Progress From To Framework in place across all Business Groups Product Validated methodology in 29 strategic cells Proposition Identifying drivers of superiority with precision Packaging Place 2024 priorities Promotion Embedding framew
Slide 28: Scale multi-year innovation
FY 2023 RESULTS Faster growth Scale multi-year innovation 2023 innovation driving incremental turnover 2024 priorities Prioritising multi-year scalable programmes Growing R&D investment Driving market-making and premiumisation Brilliant execution fully resourced Continued increases in incremental tu
Slide 29: Leveraging winning technologies across brands, formats and markets
FY 2023 RESULTS Faster growth Leveraging winning technologies across brands, formats and markets Example: Vaseline Gluta Hya Multi-year, scalable platforms Patented GAP technology boosting skin’s antioxidant defence against damage Multi-format and benefit technology extended to new product ranges Ge
Slide 30: Leveraging winning technologies across brands, formats and markets
FY 2023 RESULTS Faster growth Leveraging winning technologies across brands, formats and markets Example: multi-brand 72h Deodorant Multi-year, scalable platforms Patented, next-generation anti-perspirant technology 72h technology scaled across our 3 largest Deodorant brands Geographical/brand expan
Slide 31: Leveraging winning technologies across brands, formats and markets
FY 2023 RESULTS Faster growth Leveraging winning technologies across brands, formats and markets Example: Hellmann’s Plant Based & Flavoured Mayo Multi-year, scalable platforms Differentiated superior technology using plant-based emulsions and flavour solutions Bigger activations in key markets: • S
Slide 32: Productivity & simplicity
FY 2023 RESULTS Productivity & simplicity 32
Slide 33: Focus on net productivity
FY 2023 RESULTS Productivity & simplicity Focus on net productivity Progress 2024 priorities Organisation geared to focus on net productivity Network optimization Business Group specific implementation plans Vertical integration in key materials Complexity reduction – reduced SKUs, materials and Fur
Slide 34: Focus sustainability commitments
FY 2023 RESULTS Productivity & simplicity Focus sustainability commitments Climate Plastic Nature Livelihoods 34
Slide 35: Performance culture
FY 2023 RESULTS Performance culture 35
Slide 36: A renewed team leading the change
FY 2023 RESULTS Performance culture A renewed team leading the change Esi Eggleston Bracey Priya Nair Chief Growth and Marketing Officer Business Group President Beauty & Wellbeing Hein Mairéad Nayager Schumacher Eduardo Campanella Chief Human Resources Officer Chief Executive Business Group Preside
Slide 37: Drive and reward outperformance
FY 2023 RESULTS Performance culture Drive and reward outperformance Our incentive framework 2024 priorities More closely aligned with shareholder interests 1 Proposed Directors’ Remuneration Policy Proposal published, for vote at 2024 AGM Senior leadership incentives: 75% Business Group – 25% Unilev
Slide 38: Moving with speed and urgency to transform Unilever
FY 2023 RESULTS Moving with speed and urgency to transform Unilever Focusing on fewer things, done better, with greater impact Benefits of the Growth Action Plan will build throughout the year To realise a consistent step up in performance, starting in 2024 38
Slide 39: Q&A
FY 2023 RESULTS Q&A 39
Slide 40: Appendix
uy Unilever FY 2023 RESULTS Appendix
Slide 41: Other financial guidance for 2024
FY 2023 RESULTS Other financial guidance for 2024 Increased absolute Brand & Marketing Investment and R&D spend Capex around 3% of turnover Restructuring around 1% of turnover At current rates, expected currency impact* of around (2)% on turnover and around (5)% on underlying EPS for FY Net finance