Unilever PLC · LSE:ULVR
Unilever — Investor Presentation (December 2003)
21 slides from Unilever's investor presentation, December 2003
Slide 1: Building the world's best food company
Building the world’s best food company Creating value by adding value Anthony Simon President Marketing UBF December 2003 SAFE HARBOUR STATEMENT This presentation may contain forward-looking statements (within the meaning of the U.S. Private Securities Litigation Reform Act 1995) based on our best c
Slide 2: Agenda; Scale & Reach
AGENDA n Unilever Bestfoods Strengths & Capabilities n Bestfoods Integration n Foods Contribution to Path to Growth n Growth Drivers CREATING VALUE DECEMBER 2003 SCALE & REACH One of the world’s largest food companies, part of one of the world’s biggest fmcg businesses n Foods sales 2002: €27 bn n 8
Slide 3: Category Leadership; Great Food Brands
CATEGORY LEADERSHIP n World leader in key categories Market share World relative to nearest position branded competitor Savoury 1st 1.3 x Dressings 1st 1.3 x Spreads 1st > 10 x Tea 1st 3.3 x Ice Cream 1st 1.5 x Frozen Food 1st in Europe 3.6 x H&W 1st in US weight management Source: Euromonitor 2002,
Slide 4: Capabilities; Industry Context
CAPABILITIES n Consumer understanding - local insights leveraged globally n Nutrition & health science n Taste & flavour - sensory science n Global innovation & development network n High quality manufacturing n Food you can trust n Established route to market across all channels n Strong partnershi
Slide 5: Bestfoods and Unilever
AGENDA n Unilever Bestfoods strengths & capabilities n Bestfoods Integration n Foods Contribution to Path to Growth n Growth Drivers CREATING VALUE DECEMBER 2003 BESTFOODS AND UNILEVER A stronger business taking the best of both CREATING VALUE DECEMBER 2003 5
Slide 6: The Integration Achievement
THE INTEGRATION ACHIEVEMENT nFast track approach paid off – Bestfoods acquisition targets being met – Businesses merged in 63 countries in 5 regions – €790m synergies delivered in-full, ahead of time – Margins improved – Strong cash delivery - cash earnings accretive in year one – Strengthening of b
Slide 7: The Integration Achievement
THE INTEGRATION ACHIEVEMENT n Disposals done with speed and at good prices – Brands to Campbell, Bestfoods baking, North American brands n Brands and market shares healthy n Cross-fertilisation of ideas and capabilities n BF brands accretive to UL foods growth CREATING VALUE DECEMBER 2003 AGENDA n U
Slide 8: Foods Contribution to Path to Growth
FOODS CONTRIBUTION TO PATH TO GROWTH n Agility & fuel for growth delivering increased profitability n Portfolio strengthened: – Tail reduction – Focus on leading brands n Delivering improved growth profile CREATING VALUE DECEMBER 2003 PROFIT, AGILITY, FUEL ◆ An integrated programme: improving effici
Slide 9: Strong Progress in Operating Margins
STRONG PROGRESS IN OPERATING MARGINS Foods operating margin (beia) growth 15.7 14.4 14.2 11.6 10.2 1999 2000 2001 2002* 9M 2003 estated for FRS17 and share option accounting, impact reduced by 40 bps CREATING VALUE DECEMBER 2003 FOODS PORTFOLIO RE-SHAPED FOR GROWTH 1997 2003 YTD Sep 9% 16% 8% 33% No
Slide 10: Effective Tail Disposal
EFFECTIVE TAIL DISPOSAL n Excellent progress - foods leading brands now greater than 90% n On track to achieve 95% of sales from leading brands by end 2004 n > 70 businesses disposed since start of Path to Growth, with proceeds of over €5bn n Increasing gross margin n Improving operating margin desp
Slide 11: Regional and Local Jewels Stepping Up Growth
REGIONAL AND LOCAL JEWELS CREATING VALUE DECEMBER 2003 STEPPING UP GROWTH 1997 to 2002 LB Foods Growth USG Growth 4.4 4.1 3.4 3.2 1.9 (0.5) (1.4) ‘97 - ‘99 2000 2001 2002 average CREATING VALUE DECEMBER 2003 11
Slide 12: 2003 - Disappointing Growth
2003 - DISAPPOINTING GROWTH 9M Leading brands growth% 2000 2001 2002 2003 Savoury & Dressings 6.0 4.2 5.1 2.8 Tea Based Beverages 4.5 3.3 3.3 7.7 Ice Cream 1.2 2.9 4.0 4.5 Spreads & Cooking (1.5) 5.5 4.3 (0.6) Frozen 3.0 0.3 0.9 0.0 Health & Wellness 17.0 25.4 9.1 (17.7) Total Foods 1.9 4.1 4.4 1.8
Slide 13: Savoury & Dressings
SAVOURY & DRESSINGS A market growing at, on average, 4% p.a. last 3 years Our growth underpinned by strong brands n Active innovation programme in place and proceeding to plan n Negative weather impact on Savoury category, market shares held or increased n Improved market position in Asia Pacific th
Slide 14: Tea Based Beverages; Ice Cream
TEA BASED BEVERAGES Lipton - average of 5% growth p.a. over the past 3 years n A pick up in momentum in first 9 months 2003 n Good progress on tail exit n Lipton/Pepsi JV to improve geographic expansion From hot tea Lipton, the world’s 3rd largest beverage brand to Ready to Drink Leading Brands €23
Slide 15: Spreads & Cooking Products; Frozen Foods
SPREADS & COOKING PRODUCTS Sustained growth of more than 4% in 2001 and 2002 n Leading brands now 75%+ of sales, growth YTD -0.6% n Growth in Heart Health brands 6% YTD n Family brands - strategy in 2003 to maintain profitability & value shares in competitive market n Two key innovations re-phased n
Slide 16: Health & Wellness; Foodsolutions
HEALTH & WELLNESS Leveraging Unilever capabilities to make the healthy choice the easy choice n Slim.Fast leading position in growing H&W category n 14% compound average growth over the last 20 years n Actions undertaken to move back to growth - 2003 innovations delivering to plan n Active marketing
Slide 17: Stepping Up Growth 1997 to 2003
STEPPING UP GROWTH 1997 to 2003 LB Foods Growth USG Growth 3.3 2.5 1.9 (0.5) (1.4) ‘97 - ‘99 2000 ‘01 - ‘03 average average CREATING VALUE DECEMBER 2003 AGENDA n Unilever Bestfoods strengths & capabilities n Bestfoods Integration n Foods Contribution to Path to Growth n Growth Drivers CREATING VALUE
Slide 18: Key Drivers of Growth
KEY DRIVERS OF GROWTH • Powerful, re-shaped portfolio of brands in fragmented markets • Build strength in the core • Innovate in fastest-growing segments - on trend with consumers • “Space for growth” - move from category to brand mindset • Extending brands across categories • Adjacent segments • Ne
Slide 19: Good for You Products; Innovation Network
“GOOD FOR YOU” PRODUCTS ACROSS THE PORTFOLIO CREATING VALUE DECEMBER 2003 INNOVATION NETWORK Global Brand Centres Regional Innovation Centres Global R&D / NL, UK, France Technology Centres Germany,Italy US NL, UK, France, Germany Thailand, India, China US Japan, Philippines India Australia Brazil, M
Slide 20: Foods Innovation 2003; Leveraging Strengths in D&E
FOODS INNOVATION 2003 - SOME EXAMPLES Brooke Bond Relaunch India Snack Sauces Across Europe Frozen Steam Fresh Vegetables Europe Salad Dressings Mealkits - Europe Knorr cooking aids innovation across the world Ice Tea eg Syria, Ecuador, Cool Peach flavour Magnum “Seven Sins” China Japan Europe LEVER
Slide 21: Leveraging Foods Strengths in D&E; Conclusion
LEVERAGING FOODS STRENGTHS IN D&E n Focus on building key brands n Target low income and young consumers n Focus on kid’s nutrition and fortification 2003 YTD n “Big 4 brands” from 40% to ca 60% of sales n Major progress on tail disposal n Low income centre established in Latin Am n Unilever Health