Unilever Plc · LSE:ULVR
Unilever — Prudential Back to School Conference 2005
53 slides from Unilever's conference presentation, Sep 8, 2005
Slide 1: Increasing Competitiveness
Increasing Competitiveness Prudential Back to School Conference, Boston September 8, 2005 Rudy Markham Ralph Kugler Chief Financial President, Home and Officer Personal Care 0
Slide 2: Rudy Markham, Chief Financial Officer
Rudy Markham Chief Financial Officer Good morning, ladies and gentlemen. I am pleased to be here in Boston, presenting at one of the year’s major investor events. Since Unilever was last here, two years ago, our performance has disappointed but I am glad to be able to say that we have begun to put t
Slide 3: Safe Harbour Statement
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 statements are based upon current expectations and assumptions regar
Slide 4: Unilever's Strong Portfolio
Unilever’s Strong Portfolio Unilever’s World Category Positions Our $1bn brands Savoury & Dressings Spreads Weight Management Tea Ice Cream Frozen Foods #1 in Europe Laundry #1 in D&E Household Care Focus on 2 brands Daily Hair Care #1 in D&E Skin Deodorants Number 1 Focus on country Oral Care stron
Slide 5: Scale and Geographic Reach
Scale and Geographic Reach 2004 Turnover: € 39.1 billion, US$48.4 billion Europe: 43% The Americas: 32% Asia/Africa: 25% 35% in Developing and Emerging markets (all countries except W Europe, US, Canada, Australia & Japan) Total sales last year were close to 50 billion dollars. We have a very broad
Slide 6: 2005 Priorities
2005 Priorities z Regain momentum in Western Europe z Drive successes harder - Build on strengths in Developing & Emerging markets - Build on strengths in Personal Care - Key Vitality launches z Cost savings to help fund increased competitiveness z Implement new organisation and keep market focus So
Slide 7: 2005 Priorities
2005 Priorities z Regain momentum in Western Europe z Drive successes harder - Build on strengths in Developing & Emerging markets - Build on strengths in Personal Care - Key Vitality launches z Cost savings to help fund increased competitiveness z Implement new organisation and keep market focus Ma
Slide 8: Increasing Competitiveness
Increasing Competitiveness Innovation Winning With Customers Marketing Pricing Investment Improvement in market share trend This chart shows the 4 key elements of competitiveness: Innovation, winning with customers – by which we mean retailers, marketing investment and pricing. Importantly these ele
Slide 9: 2005 Priorities
2005 Priorities z Regain momentum in Western Europe z Drive successes harder - Build on strengths in Developing & Emerging markets - Build on strengths in Personal Care - Key Vitality launches z Cost savings to help fund increased competitiveness z Implement new organisation and keep market focus Fi
Slide 10: Vitality Innovation
Vitality Innovation Heart Health Knorr Vie Breyers Double Churned Power of Tea Light Ice Cream Ragu Organic A clear example of this is the introduction of Knorr Vie – ‘smoothie’- style drinks in a small bottle which provide half the daily recommended intake of fruit and vegetables. They have already
Slide 11: 2005 Priorities
2005 Priorities z Regain momentum in Western Europe z Drive successes harder - Build on strengths in Developing & Emerging markets - Build on strengths in Personal Care - Key Vitality launches z Cost savings to help fund increased competitiveness z Implement new organisation and keep market focus To
Slide 12: New Organisation
New Organisation • Simpler, faster, more accountable • Proximity to market, Prioritisation of resource, Performance focus CEO Patrick Cescau President Europe Kees van der Graaf President Chief Officer HPC Finance President Ralph Kugler Rudy Markham Americas John Rice President Chief Officer Presiden
Slide 13: One Unilever
One Unilever Leveraging Unilever’s scale z Integration of HPC and Foods operations z Single face to customers and suppliers z Shared services, outsourcing z De-layered management €700 m p.a. savings by end 2006 Further opportunities beyond 2006 In each country where this is not yet the case, we are
Slide 14: Alignment
Alignment Incentives aligned with financial and business objectives Long-term incentive plans Financial objectives Total Shareholder Return (3 year rolling) Top Third Restricted stock grant conditional on 3 year performance: • Ungeared Free Cash Flow €25-30 bn by 2010 • Underlying sales growth Maint
Slide 15: Ralph Kugler, President Home and Personal Care
Ralph Kugler President Home and Personal Care 14
Slide 16: Organized to Win
Organized to Win world class brand mixes The Role of the Categories brought to market brilliantly The Role of the Regions working seamlessly and interdependently together As Unilever, we are intent on building on our historic strength of deep roots across the world, but exploiting the advantages of
Slide 17: Strong Stable of HPC Brands
Strong Stable of HPC Brands Dove Lux Omo Sunsilk Skip Rexona Surf Pond’s Radiant Axe Suave Snuggle Vaseline Comfort Lifebuoy Cif Clear Domestos Signal Close-Up We will do this with strong brands which are leaders in their segments with distinctive and insightful positioning, underpinned by unique te
Slide 18: The Challenge
The Challenge “Multi-local and multi-national” a competitive differentiator … …But how to deploy global scale without losing the benefit of deep local roots ? our destination today “mindlessly “hopelessly global” local” Our strategy is to build on our historic strength based on deep roots in local m
Slide 19: Axe Effect - Now in the US
Axe Effect - Now in the US Axe, one of our fastest growing brands, is a good illustration of what I mean. For reasons that no doubt seemed good at the time, Axe was never extended into the United States. We finally launched in 2002, - an early example of our strategy to more aggressively extend our
Slide 20: Taking the Axe Effect Global
Taking the Axe Effect Global 2001 2005 AMET Asia 3% AMET 6% 3% North America 14% Lat Am Asia 26% 9% Europe 47% Europe 65% LatAm 27% Share of Axe turnover by region Entirely incremental business for us, and a contributory factor to Axe’s continued double digit global growth, every year. 19
Slide 21: Axe Value Share US
Axe Value Share US Deodorant 12 10 ( total market ) Dollar Share 8 6 4 Bodywash 2 0 02 03 04 05 ST 20 20 20 20 TE LA The results in the US have been spectacular - with both Deodorant and Body-wash quickly taking leadership of the male segment of their respective categories. Terrific idea. First clas
Slide 22: A Heritage of Fragmentation
A Heritage of Fragmentation Let’s look at another example of how deploying our global scale is beginning to pay dividends. This time in the laundry business, and our biggest brand, Omo. Through its varied history of local launches and relaunches over the years, Omo had become highly fragmented, with
Slide 23: A Universally Relevant Idea
A Universally Relevant Idea Through an exhaustive programme of consumer research, we have identified a brand positioning that builds on the root strengths of many of these different market positions. Our global and Brazilian teams have together developed a new brand idea, which research and in-marke
Slide 24: A Unifying Factor
A Unifying Factor …for brands with local independent heritage... This idea has acted as a unifying factor for brands that come from a diverse heritage, which had had a bewildering complexity in terms of packaging, formulation, brand names, and advertising. Pragmatism must be balanced with respect fo
Slide 25: Driving Local Alignment
Driving Local Alignment 1997 2001 2003 2005 2007 Pack Idea Innovation 360º Suppliers Identity The “Dirt is Good” brand idea has allowed us to drive global alignment across all aspects of the marketing mix, - not just packaging, but also suppliers, new ideas, innovation and in the way the brand is ex
Slide 26: A single cornerstone position... working globally
2006 A single cornerstone position... …working globally For the first time ever, we have one global laundry brand, with one common proposition and a unified programme. This means that - notwithstanding our heritage, and differing brand names, our leading laundry brands can stand up to the large glob
Slide 27: A New Global Competitor
A New Global Competitor … rather than fighting the competition as a fleet of tugs. We can now put our best laundry talent globally to work on one brand with one development programme, and the opportunity to deploy ideas quickly from one region to another. Given our heritage, however, you would expec
Slide 28: Advertising: "Dirt is Good" Brand Roll Out
Advertising: “Dirt is Good” Brand Roll Out - “No Mum” (Latin America) 27
Slide 29: Brand Activation
Brand Activation ‘Sport Wave’ 360º - Brazil Pilot 2005 …bigger, replicable with unrivalled stature... One of the advantages of behaving as a $2bio brand is that you can command to your advantage the type of global talent that smaller brands cannot deploy. Like the world’s finest footballer (and by t
Slide 30: Advertising: Ronaldinho
Advertising: - “Ronaldinho” (Brazil) x 2 - “Ronaldinho” (Spain) x 1 29
Slide 31: Enhancing Performance
Enhancing Performance External Panel Attribute Data 100 “Removes any type of stains” 80 Any Omo Omo Multiação 60 40 Omo Progress Brilhante Ariel 20 Ace Omo Cores Minerva Bold Campeiro Surf 0 Pop J FM AM J J A S OND J FMAM J J A SOND J FMAM J J A S OND 2002 2003 2004 This advertising idea, although p
Slide 32: Enhancing Performance
Enhancing Performance External Panel Attribute Data 100 “Leaves clothes whiter” 80 Any Omo Omo Multiação 60 40 Omo Progress Brilhante 20 Ariel Ace Omo Cores Minerva Bold Campeiro Surf 0 Pop J FM AM J J A S OND J FMAM J J A SOND J FMAM J J A S OND 2002 2003 2004 …. and this one shows which brands con
Slide 33: Turkey Q4 05
Turkey Q4 05 Our new structure enables faster. Here is an example from Turkey. 32
Slide 34: Advertising: Omo "Basketball" (Turkey)
Advertising: - Omo “Basketball” (Turkey) 33
Slide 35: Business Results
Business Results Market Share - Turkey “Dirt is Good” Launch 30 27 24 OMO 21 ALO ARIEL 18 15 12 02 03 04 02 03 04 05 20 20 20 20 20 20 20 . . . b. b. b. b. ug ug ug Fe Fe Fe Fe l/ A l/ A l/ A n/ n/ n/ n/ Ju Ju Ju Ja Ja Ja Ja Just as in Brazil, Dirt is Good drove brand share growth, and won back mark
Slide 36: New organisation impact on Dove
But it is not only with our historically fragmented portfolios that the new organisation is having an impact. Dove, possibly our most global brand, is also benefiting from our new-found capability to deploy our best brand and advertising ideas around the world more effectively and more quickly. 35
Slide 37: New Dove Organization
New Dove Organization Personal Care Group VP Category SVP Category SVP Global Brand VP Category SVP Category VP Deodorants Skin Dove Hair Oral Global VP Global VP Global VP Dove Dove Dove Skin Hair Deo Interfacing with regions Previously the management of the brand had been in the hands of 6 separat
Slide 38: A Clear Strategy
A Clear Strategy Dove Mission To make more women feel beautiful everyday. By widening today’s stereotypical view of beauty and by inspiring women to take great care of themselves. The Dove brand mission, well aligned with the company’s Vitality mission, is “to make more women feel beautiful everyday
Slide 39: Before the New Organization
Before the New Organization Massive success in Europe in 2004: Dove Firming This was best expressed in the launch of Dove Firming Cream, developed in Europe, through this iconic advertising campaign, which celebrated real women as they are – not the artificially slim ideal that most models represent
Slide 40: Newspapers, magazines and TV picked up the Dove story
Newspapers, magazines and TV programmes all picked up the story of Dove, in tune with real women. 39
Slide 41: Popular appeal of the campaign in Europe
These pictures give you an idea of how strong the popular appeal of this campaign was in Europe over the last 12 months. This is the front cover of the London Times weekend magazine. The campaign was featured as the leading article under their own initiative. 40
Slide 42: A film made just for Wal*Mart
And a film was made just for Wal*Mart, using their own staff. 41
Slide 43: Algemeen Dagblad March 2004
Algemeen Dagblad 16 March 2004 And this is an example from the Netherlands. But it wasn’t just a PR success - sales of our body cream range in Europe increased by more than 80%. Notwithstanding this success, North America, Lat Am and Asia initially proposed reasons why the campaign would not be suit
Slide 44: One Year Later
One Year Later Rolled out in Latin America One year later, the campaign has been rolled out across the world with the same spectacular level of impact. Note that we still tailor the communication as appropriate - but use local consumer insight to adjust for real cultural differences.. 43
Slide 45: One Year Later
One Year Later Rolled out in North America …here is the US version. 44
Slide 46: One Year Later
One Year Later Rolled out in Asia So we have rolled out this big idea in less than a year worldwide - and the campaign is having the same success as it did in Europe last year. 45
Slide 47: Dove Performance
Dove Performance Turnover - Cumulative to June 2005 600 1500 1400 550 1300 +12% 500 1200 +18% 450 1100 400 +3% 1000 900 350 800 300 700 250 +7% 600 500 200 +27% 400 150 300 +22% 100 200 50 100 0 0 Total North Am Europe Asia Latin Am Africa & ME Most important of all is the impact in the market place
Slide 48: Organized for Success
Organized for Success z Vitality is in tune with consumers z Strong brand ideas work globally z Fast roll out maximises the opportunity z Unilever’s new organisation is enabling this to happen - now So the changes I have described really make a difference. W have an enviable portfolio of strong bran
Slide 49: Rudy Markham, Chief Financial Officer
Rudy Markham Chief Financial Officer Thanks, Ralph. Let me give you a brief update on progress, starting with sales. 48
Slide 50: Progress on Growth
Progress on Growth Q4 ‘04 Q1 ‘05 Q2 ‘05 Turnover +0.6% +2.3% +1.4% Like-for-like growth* +1% +2% +3.3% • Market shares stabilised • Volume based • Strong growth in Developing & Emerging markets • Solid growth in North America • But … Europe remains weak * organic sales growth, at constant exchange r
Slide 51: Profitability - H1 '05
Profitability - H1 ‘05 Operating Margin 13.7% (140)bps - underlying* (50)bps * before Slim.Fast write-down, restructuring and profits on disposals Savings and improved mix largely offset higher input costs and increased marketing investment EPS (6)% - before Slim.Fast write-down +6% The operating ma
Slide 52: Summary of Progress
Summary of Progress z Three quarters of improving growth z Increasing competitiveness z Driving cost efficiency z Implementing new organisation z Maintaining control Encouraging signs of progress… but still more work to do So, I hope we have given you some insight into the change underway in Unileve
Slide 53: Increasing Competitiveness
Increasing Competitiveness Prudential Back to School Conference, Boston September 8, 2005 Rudy Markham Ralph Kugler Chief Financial President, Home and Officer Personal Care 52