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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...

Apr 19, 2020

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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

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    1%

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    3%

    4%

    5%

    6%

    7%

    Q1 2

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    Q2 2

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    Q3 2

    00 5

    Q4 2

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    Q1 2

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    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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