Unilever - CAGE Conference Paul Polman – CEO Roger Seabrook – VP Investor Relations London - 19 th March 2012
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Unilever - CAGE Conference
Paul Polman – CEO
Roger Seabrook – VP Investor Relations
London - 19th March 2012
Contents
1
2
2011 key takeaways
Our progress over the last 3 years
3 Your questions addressed
2011 Strong performance in a challenging environment
3.5% 4.1%
6.5%
2009 2010 2011
Strong growth Growth acceleration in emerging markets
2.0% 2.2%
USG
Value shares improving
USG
8.1% 7.9%
11.5%
2009 2010 2011
2.0% 2.2%
bps change
10
20
FY 2011 L12 w
Strong results whilst defending our profitability and continuing to invest behind our brands
2011 Underlying operating margin down 10bps
€6.1bn A&P: investing for growth €100m in product quality +€3bn cost inflation
Managing the business for the long term
100
200
300
Jan/04 Jul/05 Jan/07 Aug/08 Feb/10 Sep/11
Unilever index
Jan 1st 2002=100
Personal care – Dove now a €3bn brand
Now our biggest category
2011 underlying sales growth 8.2%
Strong performance across the portfolio
Winning vs. peers: +40bps value share gains (L12w) -6%
2%
10%
Q4 08 Q3 09 Q2 10 Q1 11 Q4 11
Unilever Competitor Competitor
12 month MAT underlying sales growth
Home care – Surf now a €1bn brand
Innovation led growth global re-launch
Investing in quality Roll out to white spaces
Now in 46 countries
• Best fragrance
• Best value proposition
• Best Packaging
• Excellent advertising
Ice Cream - Magnum approaching the €1bn mark
Ice Cream value shares
2009 2010 2011
70
bps
White space opportunity : Magnum is only in 22 countries
Magnum launch in US and Indonesia
Spreads – Winning differently
Market leader
Strong cash generation
Greater focus on taste with health benefits
5-year CAGR 3.7%
A new vision for Unilever
€40bn
€80bn
environmental impact
€44bn
€46bn
Helping 1 billion people to improve their
health and well-being
Doubling the turnover whilst reducing the environmental footprint
A sharpened strategy
Magnify in
novations
Win with
winning customers
Drive up CASH and driv
e down COSTS
Improve sales fu
ndamentals
Own market d
evelopment
Step change customer service
Simplify
product / SKU ra
nge
Agree country &
category strategies
3
2
6
5
9
8
4
1
Win with
local c
onsumers
through combined power of B
B & BD
7
9 for 0
9
Sharpened our strategy with the Compass
Organisation fully aligned
More consumer and customer centric
Bias for action and performance culture
Increasing innovation rate
Bigger, better, faster innovation
Faster roll-outs to 10+ countries Launch of Lifebuoy Clini-care in India
>30% 9
40
70
2009 2011 2010
10x better germ protection, 10x more skin care
Stepping up investment over the last 3 years
€300m in improving formulations 300 more brand/market combinations €850m more in A&P
95% formulations better /
equal than competition
>
A new structure
New category led organisation Pre-One Unilever
New organisation fully implemented: 8 clusters x 4 categories. Fewer touch points, faster decision making
Chairman PLC Chairman NV
Foods / IC-FF / HPC Foods / IC-FF / HPC
12 Business Groups 12 Business Groups
3 - 5 OpCos 3 - 5 OpCos
Country 1 Country 1
Country 2 Country 2
Country 3 Country 3
. .
. .
One Unilever
2005
Pre-One
Unilever
2007
One Unilever
2009
MCO’s
South
East
Asia &
Australa
sia
Africa
North
America
Latin
America
Europe NAMET
& RUB
North
Asia
South
Asia
Refreshment Foods Home
Care
Personal
Care
Capabilities getting stronger
Centres of excellence Global supply chain
Flawless
execution
Flexible, agile
& lean
structures
World class
service
Consumer
perceived
quality
End-to-end
competitive cost SC creates
value through
Unilever Leadership Programme 4 Acres Singapore
Accelerated talent development – internal and external appointments
Capabilities more recognised: top 3 employer in 27 markets (*)
Sri Lanka
Indonesia
Australia
Russia
Thailand Philippines
(*) FMCG employer rankings. Source: FMCG Ranks from Universum, TNS & other Employer Ranking Surveys, *Japan No 1 among Foreign FMCGs , Sweden no:1 by Academic Communications, No.2 by Universum
India
China
Vietnam Bangladesh
South Africa
Pakistan
Netherlands Turkey Argentina
Chile
Brazil
Nigeria
Egypt
UK Germany
Ghana Mexico
Czech Republic Japan
Sweden
Kenya
1 2 3
On-shelf availability
Performance culture sharpened
2009 2010 2011
+450
bps
Objectives fully aligned: 3+1’s Employee assessment and rating
Delivery
1/4th of senior management in green box
Sta
nd
ard
s o
f Le
ad
ers
hip
1/
4th
2012: A challenging year
-10
-5
0
5
10
2007 2008 2009 2010 2011
GDP growth Inflation
Developed markets
%
Source: Oxford Economics
Developed markets remain weak High competitive intensity in D&E Crude oil $125 d/p
More to do
Innovation not yet differentiated enough
Need to improve mix Leverage further Enterprise Support / IT
Restructuring
Last 10 years ~200bps of restructuring p.a.
2012 business restructuring part of operating costs
2012 business restructuring estimated at ~130bps
Opportunities remain to lower costs to benchmark levels
Emerging markets growth
More consumers able to afford our products
Winning where competitive battles are toughest
Emerging markets: the growth engine for Unilever
0%
4%
8%
12%
16%
90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11
Unilever emerging markets underlying sales growth
Outstanding track record – 9% CAGR over the last 20 years
Conclusion
• Pleased with progress.
• Much more still to do.
• Our priorities remain unchanged:
Volume growth ahead of our markets
Steady and sustainable core operating margin improvement
Strong cash flow
Safe Harbour Statement
This document 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 ‘will’, ‘aim’, ‘expects’, ‘anticipates’, ‘intends’, ‘believes’, ‘vision’, or the negative of these terms and other similar expressions of future performance or results, 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, economic slowdown, industry consolidation, access to credit markets, recruitment levels, reputational risks, commodity prices, continued availability of raw materials, prioritisation of projects, consumption levels, costs, the ability to maintain and manage key customer relationships and supply chain sources, consumer demands, currency values, interest rates, the ability to integrate acquisitions and complete planned divestitures, finalising fair values related to prior acquisitions, the ability to complete planned restructuring activities, physical risks, environmental risks, the ability to manage sustainability, 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, completion of the Sustainable Development Report 2011 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 Group’s Annual Report on Form 20-F for the year ended 31 December 2011 and the Annual Report and Accounts 2011. These forward-looking statements speak only as of the date of this document. Except as required by any applicable law or regulation, the Group expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Group’s expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.
Unilever - CAGE Conference
Paul Polman – CEO
Roger Seabrook – VP Investor Relations
London - 19th March 2012
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