Unilever Plc · LSE:ULVR
Unilever — Q4 2011 Earnings Presentation
39 slides from Unilever's earnings presentation, Feb 2, 2012
Slide 1: Unilever Q4 2011 Results
Unilever Q4 2011 Results Paul Polman – CEO Jean-Marc Huët – CFO James Allison – Head of IR and M&A February 2nd 2012
Slide 2: Safe Harbour Statement
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 ter
Slide 3: Paul Polman, CEO
Paul Polman CEO (MAGNU
Slide 4: Strong performance in a challenging environment
Strong performance in a challenging environment Strong growth Growth acceleration in emerging Value shares improving markets USG USG bps change 6.5% 11.5% 2.0% 2.2% 2.0% 2.2%20 4.1% 7.9% 3.5% 8.1% 10 2009 2010 2011 2009 2010 2011 FY 2011 L12 w Underlying operating margin -10bps in a year of unpreced
Slide 5: Investing in the long term
Investing in the long term New organisation Investing in our manufacturing base: Product quality improvement: 20+ new factories +€100m in 2011 Personal Care Home Care Refreshment Foods North Europe NAMET & North Asia America RUB Latin Africa South Asia South East America Asia & Australasia Our categ
Slide 6: Investing in the long term: M&A
Investing in the long term: M&A Personal Care Sara Lee Personal Care Concern Kalina Hair Alberto Culver M&A as a growth driver: bolt-on acquisitions on core categories - €1bn - €2bn p.a.
Slide 7: Clear and compelling strategy
Clear and compelling strategy Clear strategic framework Category led organisation USLP
Slide 8: Win globally - Deodorants
Win globally - Deodorants +40% global share Consistent growth driven by innovation: Rexona re-launch Dove female Axe new variants Dove Men+Care now in >40 markets
Slide 9: Win in emerging markets - Laundry
Win in emerging markets - Laundry Global value shares are up Dirt is Good re-launched in 48 markets Launch of Comfort into white spaces bps change 2.0% 2.2%30 20 FY 2011 L12 w India, Pakistan, Australia, South Africa
Slide 10: Win differently - Spreads
Win differently - Spreads Strong leadership positions Great innovation – Latta & Luftig Highly cash generative % value share 2011 underlying operating margin 40 19.1 25 14.9 Developed Emerging Unilever Spreads / Dressings / Savoury Source: Euromonitor
Slide 11: More to do in Tea
More to do in Tea Technology and innovation key to improve performance: TESS: enhanced taste and aroma (Lipton, PG Tips) Launch of non-bitter green and white tea Launch of Lipton Ice Tea 100% natural Introduction of Lipton Green superfruit range in the US
Slide 12: Strong performance in Food Solutions
Strong performance in Food Solutions 2011 Now more than €2bn turnover - 2/3rd in developed markets 8.2% 4.6% Success built on a number of building blocks: 3.4% Chefmanship at the core Expansion in China and other key emerging markets Volume Price USG Quality improvement and best-in-class r
Slide 13: Jean-Marc Huët, CFO
Jean-Marc Huét CFO (MAGNU
Slide 14: FY 2011: Strong underlying sales growth
FY 2011: Strong underlying sales growth USG 6.5% 4.8% -2.5% 1.2% €46.5bn 1.6% 5.0% €44.3bn Turnover 2010 Vol/Mix Price Currency M&A Turnover 2011 Volume growth maintained despite strong pricing
Slide 15: FY 2011: Accelerated growth in emerging markets
FY 2011: Accelerated growth in emerging markets Emerging markets underlying sales growth 13% 12% 12% 10% 11% Outstanding performance in 2011 8% 8% 8% 7% 8% 54% of turnover Mid-single digit volume growth consistent with the last 20 years Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 . FY10 FY
Slide 16: FY 2011: Developed markets growing in line with the market
FY 2011: Developed markets growing in line with the market Developed markets underlying sales growth Continued difficult consumer environment Improved overall share performance 3% 2% 1% 2% 1% Strong growth and share gains in Personal care: 0% Hair US reached leadership over L12w -1% 0% 0% -2
Slide 17: FY 2011: Broad based category growth
FY 2011: Broad based category growth Underlying sales growth Personal care: double-digit sales growth in H2 8.2% 8.1% Home care: good balance between volume and 4.9% 4.9% price and value share gains Refreshment: driven by Ice Cream innovation (e.g. Magnum launch in the US) Foods growth drive
Slide 18: Q4 '11: Strong underlying sales growth
Q4 ’11: Strong underlying sales growth USG 6.6% 2.1% 2.4% €11.6bn 6.5% 0.1% €10.8bn 6.9% Turnover Q4'10 Vol/Mix Price Currency M&A Turnover Q4'11 Volume growth around 1% excluding the impact of systems change in North America
Slide 19: FY 2011: Underlying price growth at 4.8%
FY 2011: Underlying price growth at 4.8% underlying price growth 6.5% 5.8% 5.1% 4.8% 2012 to benefit from carry-over pricing Modest incremental pricing in 2012 1.8% Q1 11 Q2 11 Q3 11 Q4 11 2011
Slide 20: FY 2011: Underlying operating margin down 10bps
FY 2011: Underlying operating margin down 10bps -180bps +100bps +70bps 15.0% 14.9% 2010 Gross Margin A&P Overheads 2011 Overheads are all costs below gross profit but excluding A&P
Slide 21: FY 2011: Gross margin down 180bps
FY 2011: Gross margin down 180bps gross margin bps change Gross margin 39.9%, after distribution costs of 6.6% Pricing lagging cost increases Inflation in factory and distribution costs (crude oil -130 related) -180 -230 2011 commodity cost inflation within guidance at €2.4bn H1’11 H2’11 M
Slide 22: FY 2011: Savings programmes €1.5bn
FY 2011: Savings programmes €1.5bn Total Savings €bn Excellent savings from continuous improvement programme 1.5 Contribution from supply chain, overheads and A&P 1.4 1.4 1.1 Difficult macro-economic environment – no let up in 2008 2009 2010 2011 our productivity initiatives
Slide 23: FY 2011: A&P investment at €6.2bn - up by €150m
FY 2011: A&P investment at €6.2bn - up by €150m A&P increase year-on-year (*) Competitive support levels €370m €330m Advertising quality much improved €150m Digital spend up15% Production costs and fees reduced, releasing funds for media spend 2009 2010 2011 (*) Comparison is in constant cur
Slide 24: FY 2011: Overheads down 100bps
FY 2011: Overheads down 100bps % turnover Excellent delivery in 2011 due to: 0bps -40bps -100bps Continuous improvement mindset Finance cost reduction 25bps 13.3 13.3 12.9 Reduction of travel expenses and consultants 11.9 One-off savings from specific initiatives Taking the right decisio
Slide 25: Core operating profit in 2012 will include business restructuring
Core operating profit in 2012 will include business restructuring 2011 Underlying Operating Profit €6.9bn deduct 14.9% Business Restructuring €0.6bn 2011 1.3% Core Operating Profit €6.3bn 13.6% Using 2011 to illustrate 2012 reporting changes
Slide 26: FY 2011: Core earnings per share growth
FY 2011: Core earnings per share growth €0.01 €0.11 €0.04 €0.01 €0.02 €1.41 €1.36 Core EPS growth 4% EPS 2010 Operational Pension Currency Interest Others EPS 2011 Performance
Slide 27: FY 2011: Strong free cash flow despite investment in capex
FY 2011: Strong free cash flow despite investment in capex €bn 0.4 2.0 1.2 0.4 0.2 6.4 3.1 Operating profit Others Capex Tax paid Interest Working capital Free Cash Flow before depreciation change 2011 and amortisation
Slide 28: 9th consecutive quarter of negative working capital
9th consecutive quarter of negative working capital Trading Working Capital % Turnover (closing) 5% 0% -5% Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 H1 11 H2 11 Cash conversion cycle negative as we exited 2011
Slide 29: Net debt increased to €8.8bn
Net debt increased to €8.8bn 0.3 €bn 0.8 1.7 2.0 8.8 5.5 6.7 2.8 2010 Cash from Dividends Net Capex M&A Interest/currency Others 2011 operating activities
Slide 30: Pension deficit up €1.1bn at €3.2bn
Pension deficit up €1.1bn at €3.2bn Pension deficit now €3.2bn (from €2.1bn at end 2010): Driven by increased liabilities due to fall in corporate AA bond rates 2011 cash contributions to pensions €550m 2012 cash contributions to pensions will be around €700m Pension interest credit of €70
Slide 31: Paul Polman, CEO
Paul Polman CEO (MAGNU
Slide 32: A new Unilever emerging
A new Unilever emerging Growth ahead of the market Protecting margins despite A faster and more agile business unprecedented headwinds 2011 Underlying operating margin 6.5% 2.0% 2.2% 14.9% 2.0% 2.2% 15.0% 5-6% 14.8% Market Unilever 2009 2010 2011 Stronger, agile, fit to compete
Slide 33: USLP: launch of the Unilever Foundation
USLP: launch of the Unilever Foundation Helping more than one billion people improve their health and well-being
Slide 34: Innovation rate above 30%
Innovation rate above 30% Deo – Axe Anarchy Vaseline – Men Face Savoury – Knorr Sauce Pur Global roll-out South East Asia Western Europe
Slide 35: We continue to roll-out our brands into more markets
We continue to roll-out our brands into more markets Clear – South Africa Simple – North America Axe Hair – Western Europe Now in 40 markets Alberto Culver brands roll-out Roll-out from the US
Slide 36: Video
Video
Slide 37: Consumer environment
Consumer environment Consumer confidence down in developed world Middle class growth driven by D&E High competitive intensity in D&E % Developed markets Middle class population 10 4.8 5 bn 0 2 -5 0.7 -10 2007 2008 2009 2010 2011 1965 2012 2030 GDP growth Inflation Middle class population Source: Oxf
Slide 38: Priorities
Priorities 1. Volume growth ahead of the market 2. Steady and sustainable core operating margin improvement 3. Strong cash flow
Slide 39: Unilever Q4 2011 Results
Unilever Q4 2011 Results Paul Polman – CEO Jean-Marc Huët – CFO James Allison – Head of IR and M&A February 2nd 2012