2009 CAGNY. Safe harbour statement. Jim Lawrence, Chief Financial Officer 17 February 2009

Transcription

1 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 These forward-looking statements are based upon current expectations and assumptions regarding anticipated developments and other factors affecting the Group. They are not historical facts, nor are they guarantees of future performance. Because these forward-looking statements involve risks and uncertainties, there are important factors that could cause actual results to differ materially from those expressed or implied by these forward-looking statements. Further details of potential risks and uncertainties affecting the Group are described in the Group s filings with the London Stock Exchange, Euronext Amsterdam and the US Securities and Exchange Commission, including the Annual Report & Accounts on Form 20-F. These forward-looking statements speak only as of the date of this presentation. 1

2 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 be more enjoyable and rewarding for the people who use our products. William Hesketh Lever,

3 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 A leading global consumer consumer products company company Unilever Unilever s 2008 sales: $ 59 billion Sales (in US$)* *Based on latest reported results; average 2008 exchange rates. 3

4 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 Overview Unrivalled A leading global strength consumer in D&E markets company Unilever 48% of Unilever s global sales in D&E markets Sales in D&E markets (% of total)* *Based on latest reported results; average 2007 exchange rates. 4

5 Business Overview Balanced category portfolio Home Care $10bn (18%) Savoury, Dressings & Spreads $21bn (35%) Personal Care $17bn (28%) Ice Cream & Beverages $11bn (19%) Business Overview Strong leadership positions Savoury #1 Dressings #1 Tea #1 Ice Cream #1 Spreads #1 Deodorants #1 Mass Skin #1 Laundry #2 Daily Hair Care #2 Oral Care Local Strength Household Cleaning Local Strength 5

6 Business Overview Big global brands Top 25 brands = ¾ of Unilever s sales Business Overview Local roots with global scale 6

7 Agenda Business Overview Financial Performance Growth Strategy Fit for Growth Priorities and Outlook Financial Performance Key financials Turnover Change Acquisition / Disposal Exchange rates Underlying sales growth Operating Margin Including RDI* Underlying margin change Earnings per share Including RDIs bn +0.8% (1.4)% (4.8)% +7.4% 17.7% +3.1% +10 bps bn +1.4% (0.8)% (3.1)% +5.5% 13.1% (1.4)% +20 bps 1.35 (0.07) * Restructuring, Disposals and one-off Items 7

8 Financial Performance 4th year of accelerating growth 8% + 7.4% 7% Underlying sales growth 6% 5% 4% 3% 2% +3.1% +3.8% +5.5% 1% 0% +0.4% Financial Performance Additional 1.0b invested in A&P Cumulative A&P investment bn A&P increased by 1.0 billion since

9 Financial Performance Sharp rise in commodity costs Annual Commodity cost increases bn FY commodity cost increases: 2.7 billion Financial Performance Step up in cost savings delivery Buying Local initiatives Restructuring Annual Savings bn FY cost savings delivery: 1.1 billion 9

10 Financial Performance 2008 Drivers of operating profit * Price Commodity costs % Operating Profit Growth bn Vol/Mix Acq/Disp Other costs 0 Savings programme A&P Underlying Profit *Excl RDIs, constant currency Financial Performance Strong balance sheet and cash flow Strong single A rated balance sheet Access to funding at attractive conditions Healthy and consistent cash flow generation Attractive, sustainable and growing dividend Move to quarterly dividend in

11 Financial Performance Strong balance sheet and cash flow Strong single A rated balance sheet Access to funding at attractive conditions 2 new US bond issues Healthy and consistent cash flow generation $750m: 5 yr at 3.65% (+170bps) $750m: 10 yr at 4.80% (+180bps) Attractive, sustainable and growing dividend Move to quarterly dividend in 2010 Agenda Business Overview Financial Performance Growth Strategy Fit for Growth Priorities and Outlook 11

12 Growth Strategy Strategic growth priorities Personal Care Developing & Emerging Markets (D&E) Vitality Growth Strategy: Priorities Vitality Making foods healthier Bouillon jelly proprietary technology Stronger functional claims Catechin rich tea helps to take care of your body shape Driving sustainability Rainforest Alliance certified tea Authentic quality Formulation & processing technology 12

13 Growth Strategy: Priorities Vitality Bertolli Frozen VIDEO Lipton Linea VIDEO Growth Strategy: Priorities Personal Care Stronger functional claims Sensorial experiences A unique formula which makes underarm hair feel finer, softer and visibly reduced Compelling Sensorials: Wake Up. Go Fresh Superior technology New consumer segments Superior skin whitening & antiageing technology Axe hair care range targeted at young guys 13

14 Growth Strategy: Priorities Personal Care Dove Deo VIDEO Axe Hair VIDEO Growth Strategy: Priorities D&E Markets Population growth Consumer penetration 1 billion new consumers in the next 10 years Re-closable multi-use sachets Deo ministicks Mini cubes Trading consumers up Conversion in foods Loose Leaf Tea Standard teabags Pyramid teabags Packaged food opportunity 14

15 Growth Strategy: Priorities D&E Markets Rama South Africa VIDEO Surf Excel Hiccups VIDEO Growth Strategy: Priorities Long-term strength in D&E Since 1990 Underlying sales growth 9% pa on average Hard currency growth of 7% pa on average Volume growth 5% pa on average Volume and value growth in every year UVG UPG * LATAM and Asia. From 2003 all countries excl NA, WE, Japan and Australia. 15

16 Growth Strategy Fewer, bigger innovations From projects to Number of category innovation projects Average project size increased 10x Growth Strategy Faster roll-out to more markets 20 markets 30 markets 40 markets 52 markets 55 markets 16

17 Growth Strategy Science and Technology Strengths Spray Technology Deodorants Skin Mildness and Moisturizing Product Processing e.g. Ice Cream Hair Technology Structured Oils and Emulsions Science of Tea Growth Strategy Leverage technology across portfolio Home Care Personal Care Foods Genesis Project 1 Genesis Project 2 Genesis Project 3 Genesis Project 4 Genesis Project 5 Genesis Project 6 Genesis Project 7 Genesis Project 8 Genesis 9 Genesis Project 10 Genesis Project 11 Genesis Project 12 Genesis Project 13 Genesis Project 14 Genesis Project 15 Genesis Project 16 Genesis Project 17 Consumer Benefit Focus Science & Technology Focus 17

18 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

19 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

20 Fit for Growth Multi-country organisations (2005) Pre-One Unilever (2007) One Unilever (2008) Multi-Country & Multi- Category Org Country/ Category matrix Fewer touch points Quicker decisions Improved performance Fit for Growth One Unilever in the UK Separate Companies 3 Separate Boards 1 Company 1 Board 3 Head Offices 3 Transaction systems 19 Warehouses 1620 points of contact 1 Head Office 1 Transaction system 7 Warehouses 72 points of contact 20

21 Fit for Growth Building regional supply chains Past Future Country A Region Opco Opco Opco One U Country a Country B Opco Opco Opco One U Country b Opco Opco Opco Country C One U Country c = source, make, plan, deliver Fit for Growth Radical simplification in W Europe Past Future A complex, slow moving organisation 65 Companies Simpler, cost efficient, ustomer facing operation 9 MCO s Country led factory and distribution networks 90 factories >600 depots A single European Supply Chain Company 65 factories <300 depots Multiple Finance and HR systems and processes 3 legacy systems +100 processes Single European system and standard processes 1 SAP 21

22 Fit for Growth Number of managers almost halved Top 3 levels of management Management headcount reduced by 45% Fit for Growth Restructuring is well on track Plan Actual to date Multi-country organisations Factory closures / streamlining From 100 units to MCOs Headcount reduction 20,000 10,000 Restructuring savings Restructuring charges 1.5bn 3.0bn 0.7bn 1.7bn 22

23 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

24 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 President Americas President Western Europe President Asia Africa CEE President Global Categories Chief R&D Officer Chief HR Officer CFO 24

25 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 Americas President Western Europe President Asia Africa CEE President Global Categories Chief R&D Officer Chief HR Officer CFO 25

26 Priorities and Outlook Priorities for 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 26

27 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 profile of category leadership roles New six-monthly variable pay scheme 27

28 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 growth 2. Protect cash flow and margin Confident in longer term value creation 28

29 Questions 29