Unilever Plc · LSE:ULVR
Unilever — Q2 2001 Earnings Presentation
19 slides from Unilever's earnings presentation, Aug 3, 2001
Slide 1: 2001 Second Quarter & Half Year Results
U 2001 Second Quarter & Half Year Results Rudy Markham & Howard Green August 3rd, 2001 SAFE HARBOUR STATEMENT: This presentation may contain forward-looking statements (within the meaning of the U.S. Private Securities Litigation Reform Act 1995). Any forward-looking statements are based on current
Slide 2: Path to Growth Highlights
Path to Growth Highlights • Leading brands growth MAT 4.8%, and 5.1% in the quarter • Operating margin (beia) + 200 bps • ….. after Associated Costs of Euro 114 million, + 70 bps over Q2 2000 • Restructuring costs of Euro 329 million in quarter • Offset by pre-tax profit of Euro 813 million on remed
Slide 3: Breakdown of Sales Growth
Breakdown of Sales Growth Sales Sales Growth QUARTER 2 Euro % % bn Total Impact* Leading brands excluding acquisitions - Home & Personal Care 5.1 7.5 - Foods 4.3 2.4 Total leading brands 9.4 5.1 3.7 Leading brands - acquisitions/disposals 0.2 1.6 1.3 Tail and non consumer businesses 2.5 (16.3) (4.0)
Slide 4: Sales Growth on a Continuing Business Basis
Sales Growth on a Continuing Business Basis Q2 2001 % change UVG Price a/d Total Continuing Foods (0.1) 0.3 (1.7) (1.5) HPC 3.1 3.2 (1.0) 5.4 TOTAL 1.3 1.5 (1.4) 1.4 As reported Foods 1.0 0.3 23.9 25.5 HPC 3.2 3.3 (2.7) 3.7 TOTAL 2.1 1.8 10.6 14.9 Home and Personal Care : make good progress Hair +13
Slide 5: Bestfoods Sales Performance
Bestfoods Sales Performance • Planned rapid integration • The issues : • trade patterns in US and LA • sales force integration in the US • distribution arrangements in UK and France • In total some Euro 70 million in sales • Action plans all completed or in place • Bestfoods dilutes Unilever growth
Slide 6: Delivering the Bestfoods Synergy
Delivering the Bestfoods Synergy • Moved with speed to integrate face to customer • US and Canada : • combined business functions • retail sales force combined • foodservice sales force combined • IT being consolidated • Europe : • 12 national accounts teams and sales forces combined • 16 foodservic
Slide 7: Changes in Gross Margins
Changes in Gross Margins (bps of sales over total business) Q2 2001 bps Volume / mix (30) Buying savings & restructuring 140 Selling price & cost changes : HPC Foods Price 140 40 180 Cost changes (170) - (170) Total change 120 6
Slide 8: Improvement in Operating Margin
Improvement in Operating Margin (bps of sales) Q2 2001 Total Company Gross Margin 120 Advertising & Promotion 130 Others (incl. Overheads) 20 Associated Costs (70) Operating Margin (beia) 200 7
Slide 9: Key Financial Indicators for Q2
Key Financial Indicators for Q2 • Operating profit beia up 35% • EBITDA up 30+% to Euro 2.1 bn • Interest payable Euro 409m, net gearing 72% • Euro 2.2 bn cash flow from operations and Euro 1.1 bn from disposal proceeds • Pre-tax profits up 54%, including exceptionals • Minorities share in higher pr
Slide 10: Impact of Currency: Constant to Current Exchange Rates
Impact of Currency: Constant to Current Exchange Rates Constant Current % Year on Year Quarter Euro £ US$ Sales 15 15 16 8 Operating Profit (BEIA) 35 35 36 26 EPS (BEIA) 8 7 8 - Net Profit (BEIA) 8 6 7 - Half Year Sales 17 18 20 10 Operating Profit (BEIA) 35 34 36 25 EPS (BEIA) 2 1 3 (5) Net Profit
Slide 11: Path to Growth - Strategic Context
Path to Growth - Strategic Context • Unilever’s proven ability to transform itself • 1980’s to 4 industries and in the 1990’s to 3 • 1990’s from 50+ categories to the 14 of today • Driven by the early adoption of EVA principles • ….. but need to address the fourth lever of value creation Î sustained
Slide 12: Selecting our Brand Portfolio
Selecting our Brand Portfolio • Brands based on: • current consumer appeal and ability to meet future needs …. • with scale …. • with power …. • Initially they represented 75% of our sales • Acquisitions to make a “good plan better” 11
Slide 13: Unilever's Management of Brands
Unilever’s Management of Brands • A portfolio of global brands …. but local brands will always have a place • Management of the brand migration process • Global scale in balance with local sensitivity 12
Slide 14: Q2 2001 Leading Brands - A More Powerful Core to Our Business
Q2 2001 Leading Brands - A More Powerful Core to Our Business Sales Impact of Growth Euro m Change rate % (bps) 400 Brands 9,104 5.1 Migrate 396 (20) Slim.Fast, Ben & Jerry, Amora Maille 549 100 Bestfoods 1,406 (90) New leading brands 11,455 5.0 % of Total Business 84 13
Slide 15: New Brand Portfolio
New Brand Portfolio 2001 Q2 % of total sales Top 50 69 50-100 10 100+ 5 TOTAL leading brands 84 14
Slide 16: New Brand Portfolio - Top Brands
New Brand Portfolio - Top 30 Brands • Brands > Euro 1 bn Knorr, Lipton, Omo, Dove, Surf, Looks Great , Hellmann’s, Lux • Brands > Euro 500m < Euro 1bn Slim.Fast, Iglo, Sunsilk Birds Eye, Signal, Suave Rexona, Breyers, Skip, Magnum, Ponds, Calvin Klein Ragu/Raguletto, Findus • Brands < Euro 500 m Cif
Slide 17: Brand Count
Brand Count • 970 brand names at the end of Q2 2001 • 300 of these brands to be managed for value • 380 - 400 brand names by 2004 • 200 brand positions by 2004 of which 40 are global brand positions • The balance are local jewels 16
Slide 18: Future Shape of Business
Future Shape of Business (full year estimate) % of sales 1999 2001 2004 Leading Brands 75 85 91 DiverseyLever 4 4 4 Tail Brands and Non- 21 11 5 Corporate Business Total 100 100 100 17
Slide 19: 2001 Second Quarter & Half Year Results
U 2001 Second Quarter & Half Year Results Rudy Markham & Howard Green August 3rd, 2001 SAFE HARBOUR STATEMENT: This presentation may contain forward-looking statements (within the meaning of the U.S. Private Securities Litigation Reform Act 1995). Any forward-looking statements are based on current