1 Q2 and First Half 2009 Results ROADSHOW Contents Page Highlights 5 Business Performance 6 – 34 Our Portfolio 35 – 42 Developing & Emerging Markets 43 – 50 Innovation 51 - 72
1
Q2 and First Half 2009 ResultsROADSHOW
Contents
Page
Highlights 5
Business Performance 6 – 34
Our Portfolio 35 – 42
Developing & Emerging Markets 43 – 50
Innovation 51 - 72
2
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 'expects', 'anticipates', 'intends', 'believes' or the negative of these terms and other similar expressions of future performance or results, including any financial objectives, and their negatives are intended to identify such forward-looking statements. 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, including, among others, competitive pricing and activities, consumption levels, costs, the ability to maintain and manage key customer relationships and supply chain sources, currency values, interest rates, the ability to integrate acquisitions and complete planned divestitures, the ability to complete planned restructuring activities, physical risks, environmental risks, the ability to manage regulatory, tax and legal matters and resolve pending matters within current estimates, legislative, fiscal and regulatory developments, political, economic and social conditions in the geographic markets where the Group operates and new or changed priorities of the Boards. 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 announcement.
3
Highlights
Quality of growth is good• Market share momentum in 60% of our business
• Widespread growth across categories & countries
• Underpinned by innovation and A&P support
• Gross margin trend improving
Business Environment will remain tough• Consumer confidence low and unemployment increasing
• Competitors will raise their game
Priorities for 20091. Restore volume growth
2. Protect cash and margin for the full year
Business Performance
4
Q2 Highlights
• Underlying sales growth +4.1%
• Restored volume growth +2.0%
• Step up in A&P investments +50bps
• Underlying operating margin down 60bps, in line
with expectations
• Cash flow improved €1.6bn in H1
Unilever Volume and Price Trends
-5.0%-4.0%-3.0%-2.0%-1.0%0.0%1.0%2.0%3.0%4.0%5.0%
Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09
Volume
Price
0.0%1.0%2.0%3.0%4.0%5.0%6.0%7.0%8.0%9.0%
10.0%
Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09
5
Asia Africa CEE
• Most economies resilient and growing
• Broad based volume growth
• Central Europe remains weak
• Q2 Underlying margin up +130 bps
H1Q2Q1
UVG
H1Q2Q1
USG
3.3%
(0.9)%
1.3%
8.2%9.5% 8.8%
Americas
• Consumer confidence remains weak
• Positive volume growth continues in US consumer business
• Good performance in Latin America
• Q2 Underlying margin up +10 bps
USG
H1Q2Q1
UVG
H1Q2Q1
(1.0)%
1.6%0.4%
4.9%5.9%
7.2%
6
Western Europe
• Markets remain challenging
• Positive volume trend in key countries
• Q2 Underlying margin down (340) bps
H1Q2Q1
UVG
USG
H1Q2Q1
(3.7)%
1.0%
(1.2)%
(2.8)%
(1.1)% (1.9)%
H1 Underlying Sales Growth by Category
1.4
4.5
9.9
4.6
0
2
4
6
8
10
12
SavourySpreads
Dressings
Ice CreamBeverages
Home Care Personal Care
7
Q2 Operating Margin
(0.2)%Gross margin
0.1%Overheads
(0.5)%A&P
15.2%
(2.0)%
13.2%
Q2 2008
Key drivers:
(0.6)%14.6%Operating margin before RDIs
(0.0)%(2.0)%Including RDIs*
(0.6)%12.6%Operating margin
ChangeQ2 2009
*Restructuring, disposals and one-off items
Includes margin dilution from disposals of (0.3)%
Q2 Drivers of Operating Profit*
*Excl RDIs, constant currency
0
-0.5
-0.3
-0.1
0.1
0.3
0.5
Price
Savings programme
Costs
A&P UnderlyingProfit
€b
n
Vol/Mix
Acq/Disp
8
H1 Operating Margin
(1.0)%Gross margin
0.2%Overheads
0.3%A&P
15.1%
0.9%
16.0%
H1 2008
Key drivers:
(0.5)%14.6%Operating margin before RDIs
(2.7)%(1.8)%Including RDIs*
(3.2)%12.8%Operating margin
ChangeH1 2009
*Restructuring, disposals and one-off items
Includes margin dilution from disposals of (0.3)%
H1 Drivers of Operating Profit*
*Excl RDIs, constant currency
0
-0.8
-0.6
-0.4
-0.2
0
0.2
0.4
0.6
0.8 Price
Savings programme
Costs
A&P UnderlyingProfit
€b
n
Vol/Mix
Acq/Disp
9
Commodity Cost Development
0
100
200
300
400
500
600
700
800
900
Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 2009
Commodity Costs Currency*bp
s
• Commodity costs tailwinds in H2
• FY2009 commodity costs (including currency) up vs last year
*Note: Before Q4 08 currency effects were insignificant
Strong Savings Delivery
Buying
0.3
Restructuring
0.2
Local efficiency
0.1
• €0.6bn total savings delivered in H1
On track to deliver c. €1bn in this year
10
*Restructuring, disposals and one-off items
H1 Drivers of EPS Growth
(0.10)0.07Includes RDIs*, after tax
(13)%0.630.72EPS before RDIs*
(33)%0.530.79EPS (€)
ChangeH1 2009H1 2008
(3)Tax rate (before RDIs*)(6)Pensions finance charge (3)Dilution from disposals
Key drivers (%)
Reducing Cash Conversion Cycle
Stock days
Debtor days
Creditor days
Total days
74 61 13
44 41 3
(77) (77) 0
41 26 15
Q2 2008 Q2 2009 Improvement
11
Balance Sheet and Cash Flow
• Strong cash flow delivery - up €1.6bn in H1
• Net debt €8.9bn
• New bonds issued at attractive rates
• Acquisitions: TiGi, Baltimor, Vietnam minorities
Returning Cash to Shareholders
0
1
2
3
4
2004 2005 2006 2007 2008
Tota
l cas
h am
ount
(€b
n)
Dividends Share buyback One-off dividend
> €7bn returned 07-08
• Dividend Policy: sustainable, attractive and growing dividends
• Move to quarterly dividends
• No plans for share buy-backs in 2009
12
Key Drivers of Business Performance
Brands Categories&
In Market
Amplification
Cash and Costs
Organisation
Brands and CategoriesStronger Claims
Brands
US Soft Spreads
‘No hydrogenated oils’
Asia Pond’s Anti Ageing Creams
‘Younger skin in 7 days’
US Dove Body Wash
‘Clinically proven to reverse dryness’
Examples:
13
Brands and CategoriesFaster Roll-Out to More Markets
17 Markets 33 Markets 37 Markets 56 Markets
Examples:
Brands and CategoriesImproving Product Quality
Brands
DiG - AsiaKlondike - USAmora - France
Examples:
14
Brands and CategoriesPlaying the Full Price Piano
Brands
Value
Premium
Mid-Tier
Example: Russia Tea
• Launch of herbal infusions
• New advertising campaign
• Roll-out of fruit pyramid teas
Brands and CategoriesFocus on offering consumer value
15
In Market AmplificationPositive Customer Service Trend
Number of Top 20 countries achieving service at the 2009 par target level
0
5
10
15
20Ja
n-0
8
Feb
Mar
Apr
May Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan-0
9
Feb
Mar
Apr
May
In Market AmplificationCustomer Insight and Innovation Center
The Customer Insight & Innovation Centre in the US will be showcased at our Investor Event in 23-24 November 2009
16
28From 100 units to 20-25 MCOsMulti-country organisations
Announced
50-60Factory closures / streamlining
Actual to datePlan 2007-2010
Of which completed
70
> 35
Cash and CostsRestructuring Well on Track
Headcount reduction > 10,00020,000
Restructuring savings €0.9bn€1.5bn
Restructuring charges €2.1bn€3.0bn
OrganisationChange Programme Update
Governance,Board
Brands & Innovation
Go-to-Market
Cost Base
One CEO,Non-Exec Board
2005 2006 2007
NewChairman
2008
New CFO
2009
NewCEO
Global CategoryTeam
OneCategory
One R&D
One Unilever MCOsCustomer
Focus
Factory Simplification
Overhead
Simplification
2010
17
OrganisationAligning the Organisation
Accountability &Responsibility
Bias for Action
Consumer &Customer Focus
Consistent Winning
Organisation
• Reignite volume growth
• Protect cash flow and margin
Our Priorities
18
Our Portfolio
Scale and geographic reach
The Americas | €13.2bn | 33%
2008 Unilever Turnover €40.5bn | 100%
Western Europe | €12.9bn | 32%
Asia Africa CEE | €14.4bn | 35%
19
Personal Care€11.4bn (28%)
Ice Cream & Beverages
€7.7bn (19%)
Savoury, Dressings &
Spreads€14.2bn (35%)
Balanced category portfolio
Home Care€7.2bn (18%)
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
20
Big Global Brands
Top 25 brands = ¾ of Unilever’s sales
13 billion euro + brands
Selective Bolt-On Acquisitions
Buavita IndonesiaTIGI GlobalInmarko Russia
Baltimor RussiaNapoca RomaniaWonderlight Sri Lanka
21
Partnerships
Starbucks Ice Cream Pepsi Lipton International
Bertolli Olive Oil
NA Laundry
Lawry’s Seasonings
Boursin Cheese
Including:
Disposals completed in 2008
Disposals completed with €1.6 billon turnoverAverage 1.8x sales multiple
0.1
0.1
0.7
0.4
Turnover €bn
22
Developing & Emerging Markets
The D&E Opportunity
0.5
2.6
2.6
Affluent
Aspiring
Striving
D&E Population in 2008(billions)
23
… Rapidly Evolving into a Diamond
Have lots
Haves
Not yets
2008 2018 Change
+ 0.4
+ 0.6
- 0.4
3.2
2.2
0.9
Source: Unilever estimates
2.6
2.6
0.5
Billions of people in D&E countries
Market Development Opportunity
Per Capita Consumption (US $ per year )
Source : Euromonitor
Detergents
1.4 2.2 1.9
12.116.6
22.9
India China Indonesia Brazil Germany USA
Shampoo
0.31.0 1.1
5.46.7
7.5
India China Indonesia Brazil USA Germany
Ice Cream
0.2 0.9 2.8 5.0
34.6
50.9
India Indonesia China Brazil Germany USA
Skin care
0.3 3.2 0.8
10.9
26.9
36.6
India China Indonesia Brazil USA Germany
24
Building Markets – Driving Penetration
Shampoo sachets Re-closable multi-usesachets
Deo ministicks Mini cubes
Building Markets - Uptrading
conversion upgrading uptrading
Loose Leaf Tea
Branded Packet Tea
Mid-market Teabags
Double Chamber
Functional Teas
D&E Conversion Teabags
Pyramids
• Great potential for uptrading
• Tea has 20% share of volume vs. 12% value for total Beverages
25
-2
0
2
4
6
8
10
12
14
16
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
UVG UPG
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
*1990-2002 LATAM and Asia. From 2003 all countries excl NA, WE, Japan and Australia.
D&E Growth is Profitable
2008 Operating margin before RDIs*
* Restructuring, disposals and one-off items
Unileveraverage
26
Innovation
Building R&D for Competitive Advantage
• More focus on big wins
• Leverage our unique science across our portfolio
• Accelerate delivery of breakthroughs
• Build world class capabilities in critical areas
27
Science and Technology Strengths
Spray TechnologyDeodorants
StructuredOils and Emulsions
HairTechnology
Skin Mildness and Moisturizing
Product Processinge.g. Ice Cream
Science of Tea
More focused R&D organisation
Port Sunlight, UK
Colworth, UK
Vlaardingen, NL
Trumbull, US
Bangalore, India
Shanghai, China
• 6 Global R&D Centres
• 40% of our R&D people are in Developing & Emergingmarkets, and building ….
28
Consumer NeedsTrendsBrand
Categories
Prioritising our big wins
Science & Technology
Unilever Big Wins
Prioritised Portfolio
Genesis Projects
Leverage Technology Across Portfolio
Genesis Project 14
Genesis Project 15
Genesis Project 16Genesis Project 17
Con
sum
er B
enef
it Fo
cus
Scie
nce
&Te
chno
logy
Foc
us
Genesis Project 2
Genesis Project 7Genesis Project 8
Genesis 9
Genesis Project 10
Genesis Project 3Genesis Project 4Genesis Project 5
Genesis Project 6
Genesis Project 11Genesis Project 12
Genesis Project 13
Genesis Project 1
Home Care Personal Care Foods
29
Improving R&D capabilities
• Crossover technologies driving differentiated
innovation
• Boosting open innovation
• Strengthening clinicals
• Exploiting patents across categories
Number of category innovation projects
0
1000
2000
3000
4000
5000
6000
2005 2006 2007 2008 2009
Fewer, bigger innovations
• From 5000+ projects to 700
• Average project size increased 10x
30
Knorr Stock Pots
Stock Pots with new bouillon gel technology for natural tasty stock and soups
Launched in China and across Europe
Bertolli Frozen Meals
New Bertolli Frozen Meals
Restaurant Taste with your Homemade Touch
31
Family Goodness brings better
nutrition for family growth
For better taste and with less fat
Heart Health
“Goodness of Margarine”
Hellmann’s Light
Delicious extra light mayonnaise with unique citrus fibre technologyNow double-whisked to bring out the great taste!
32
Lipton
A unique slimming tea twice as rich in catechins
to help maintain your silhouette
New Lipton pyramid teas and infusions with chunky pieces of fruits, spices and large leaves for the great tea
tasting experience
Magnum Temptation
An unrivalled multi-sensorial experience using cold roller technology
33
Clear
Complete antidandruff and scalp care regimeCentrally developed, identically presented
Axe Hair
New Axe Hair launched in the US designed to create hair that guys want and girls love
A complete line of shampoos, a conditioner, and styling products
34
Axe Instinct
New Axe Instinctwith the ‘scent of leather’
Dove Hair Minimising Deodorants
Dove Hair Minimising DeodorantsLook and Feel Hair Free for Longer
35
Dove Go Fresh
Dove Go FreshA fragrance-driven collection of products aimed at women in their 20s
Rolled out to 55 markets in 2008 alone
Dove NUTRIUM Technology
Dove Body Wash with new NUTRIUM technology - USThe most effective natural nourishment ever delivered in a body wash
36
Surf
Surf – Cleaning & Fragrance at a Great Value Price
Domestos 24HR
The clinging power of new thicker formula makes it flush proof,
protecting you and your family from germs