Q2 and First Half 2007 Roadshow - Unilever · PDF file 2020-04-10 · Dove Pro.Age Ponds Age Miracle Drivers of growth Progress on One Unilever Aligned organisation Our growth...

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Unilever Q2 and First Half 2007 Roadshow

Handout version

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41Frusi21Streamlined structures

42Lipton Linea22Overhead reduction

36Small & Mighty16Shaping our portfolio

23Supply chain efficiency3Consistent growth

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Amaze

Moo

Hellmann’s Light

Heart Health

Domestos Zero Limescale

Clear

Dove Pro.Age

Ponds Age Miracle

Drivers of growth

Progress on One Unilever

Aligned organisation

Our growth priorities

Our portfolio

Delivering long term objectives

Growth and margin

Accelerated restructuring

Benefits

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40Multicountry organisations

39Margin improvement

38North America Laundry

37Realising value through disposals

35Innovation

34Building on our growth agenda

33Building on existing programmes

Accelerating change

2007 outlook

30Balance sheet and cash flow

29First half EPS growth

28Commodity costs

Q2 operating margin

First half operating margin

25Growth by category

24Growth by region

Unilever Q2 2007 Results

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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. Words such as 'expects', 'anticipates', 'intends' or the negative of these terms and other similar expressions of future performance or results, including financial objectives to 2010, 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, 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 presentation

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Consistent growth

* days adjusted

Underlying sales growth

Annualised growth rate

0%

1%

2%

3%

4%

5%

6%

7%

Q1 2

00 5*

Q2 2

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Q3 2

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Q4 2

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Q1 2

00 6

Q2 2

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Q3 2

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Q4 2

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Q1 2

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Q2 2

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Good growth in all regions

34%

38%

28%

Americas H1 USG +4.9%

Europe H1 USG +2.6%

Asia/Africa H1 USG +11.3%

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Innovation driving category growth

34%

20%

28%

18%

Savoury, Dressings and Spreads

H1 USG +3.8%

Ice Cream and Beverages

H1 USG +5.9%

Home Care H1 USG +5.9%

Personal Care H1 USG +7.9%

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Underlying operating margin improvement in first half

(1.0)%(1.0)%-Including RDIs

0.0%A&PKey drivers:

0.3%Change before these items

2.0%Savings (1.7)%Cost/price/mix

(0.7)%13.7%14.4%Operating margin

Change20072006

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Improvement sustained in Q2

(0.5)%(1.1)%(0.6)%Including RDIs

(0.1)%A&PKey drivers:

0.2%Change before these items

2.1%Savings (1.8)%Cost/price/mix

(0.3)%13.7%14.0%Operating margin

Change20072006

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Mitigating the impact of rising commodity costs

140160150

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2003 2004 2005 2006 H1 2007

bp s

Commodity cost impact on margin

Actions taken

• Price increases • Reformulation • Hedging • Buying savings

2007 outlook ≥160 bps

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Drivers of EPS growth - First half

%

Underlying sales growth 6

Currency and disposals (5)

Operating margin pre-RDIs 2

RDIs* (6)

(3)

(1)Discontinued operations

10EPS from continuing operations

3Associates and non-current investments

1JVs

6Tax rate

9EPS

3Finance costs

(3)Operating profit

%

*restructuring, disposals and impairments

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Balance sheet and cash flow

• Net debt €8.8bn

• Share buy-back: €700m repurchased to end June

• Pension liability reduced to €1.2bn

• Cashflow from operating activities €1.7bn

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2007 outlook

• USG at upper end of 3-5% range

• Underlying improvement in operating margin

• Accelerated restructuring: €700m to €1bn

• Possible disposal gains in H2

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Accelerating change

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Building on existing programmes

• ‘One Unilever’ • c. €1bn p.a. savings during 2008

• Shared services/ outsourcing • Covering Finance, I.T., H.R : complete 2007-09

• Global buying • Savings averaging c. €400m p.a. 2005-07

• Strengthened Marketing & Customer Management • Programme roll-out 2006-08

Supported by ‘normal’ restructuring to deliver: • USG in 3-5% range • 2010 operating margin > 15%

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Building on our growth agenda

• Growth remains our number one priority • Competitive • Profitable • Consistent

• Reinforced by steps to accelerate performance • Raising the bar for innovation • More aggressive shaping of our portfolio • Cost and asset reduction to further enhance margin

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Innovation

• Increasingly global platforms • Simpler interface between categories and operations • Better technology

Applying global concepts to local markets

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Shaping our portfolio

• Organic portfolio development • Focusing resources in high potential areas

• Acquisitions • In priority areas - Personal Care, D&E, Vitality

• Disposals • In less attractive market positions

• Brands that do not benefit from global leverage and are no longer essential to ‘go to market’ operations

Building leadership positions and high growth spaces

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Realising value through disposals

• Over €2bn of turnover earmarked for disposal • Includes €0.8bn North America Laundry

• Mostly outright disposals, but other routes to value release also possible

• Impact on USG: +40bps

• Impact on operating margin: broadly neutral

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North America Laundry

• Unilever North America Laundry business - profitable but not growing

• Recent developments in US Laundry market favour consolidation and make our business an attractive asset

• Does not compromise our scale in North America or Unilever’s global ambitions in laundry

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Margin improvement

• Simplification - Multi-country organisations

• Further overhead savings

• Supply chain efficiency and responsiveness

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Multi-country organisations

Unilever Netherlands €1.1bn

Dedicated Management Team

Unilever Belgium €500m

Dedicated Management Team

Unilever Benelux €1.6bn

Single Management Team

Example - Unilever Benelux Savings c €50m

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