Unilever Plc · LSE:ULVR
Unilever — Q4 2010 Earnings Presentation
40 slides from Unilever's earnings presentation, Feb 3, 2011
Slide 1: Unilever Q4 2010 Results
Unilever Q4 2010 Results February 3rd 2011 Paul Polman, CEO. Jean-Marc Huët, CFO. James Allison, Head of IR and M&A.
Slide 2: Paul Polman, Chief Executive Officer
Paul Polman Chief Executive Officer
Slide 3: 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 4: Strong Volume Growth in Difficult Markets
Strong Volume Growth in Difficult Markets underlying volume growth highest in +30 years volume share bps change moving average total 5.8% 3.7% 3.0% 2.7% 3.1% 2.1% 2.3% 0.1% 1980 1990 2000 2005 2007 2008 2009 2010 Q4 08 Q2 09 Q4 09 Q2 10 Q3 10 Q4 10 +60% of our business is growing or holding value sh
Slide 5: Broad Based Volume Growth
Broad Based Volume Growth emerging markets developed markets 11% 11% 10% 10% 9% 8% 5% 4% 4% 3% 1% 1% 3% 1% 1% 3% 1% 2% -3% -1% Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 2009 2010 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 2009 2010 all of our categories grew volume in 2010
Slide 6: We have Delivered Against our Priorities
We have Delivered Against our Priorities Volume Growth Underlying Operating Margin Free Cash Flow accelerated increased delivered €bn 0.2% 0.2% 4.1 5.8% 3.4 2.4 0.1% 0.1% 2.3% FY08 FY09 FY10 FY08 FY09 FY10 FY 08 FY 09 FY 10 Free Cash flow: net cash flow from operating activities – net interest - net
Slide 7: Bigger, Better, Faster Innovation
Bigger, Better, Faster Innovation Innovations now typically go to 30+ markets in under 12 months
Slide 8: Jean-Marc Huët, Chief Financial Officer
Jean-Marc Huët Chief Financial Officer
Slide 9: Q4 10: Strong Top Line Growth
Q4 10: Strong Top Line Growth USG 5.1% 8.0% -1.4% 5.1% 0.0% €10.8bn +12% growth €9.7bn Turnover Q4'09 Vol/Mix Price Currency Acq/Disp Turnover Q4'10
Slide 10: 2010: Strong Underlying Sales Growth
2010: Strong Underlying Sales Growth USG 4.1% -0.5% €44.3bn 7.3% -1.6% 5.8% +11% €39.8bn growth Turnover 2009 Vol/Mix Price Currency Acq/Disp Turnover 2010
Slide 11: Turnover > €50m during year 1
Bigger, Better, Faster Innovation Turnover > €50m during year 1 Axe Hair Signal White Now P.F. Chang’s
Slide 12: Bigger, Better, Faster Innovation
Bigger, Better, Faster Innovation Clear Axe New Variants AdeS
Slide 13: Q4 10: Personal Care Innovations
Q4 10: Personal Care Innovations Hair Bed Head Axe Excite Colour Combat Global
Slide 14: Q4 10: Home Care Innovations
Q4 10: Home Care Innovations DiG re-launch– China, Turkey Sunlight re-launch – AACEE
Slide 15: Q4 10: Food Innovations
Q4 10: Food Innovations Café Zero – Western Europe Season & Shake – UK
Slide 16: Q4 10: Brands into New Markets
Q4 10: Brands into New Markets Clear – Chile Dove Hair - China
Slide 17: Q4 10: Brands into New Markets
Q4 10: Brands into New Markets Knorr Soups - Bangladesh Magnum – United States and Indonesia
Slide 18: Q4 10: Positive in-quarter Price Growth
Q4 10: Positive in-quarter Price Growth underlying price growth -0.2% -1.2% 0.0% -3.1% -2.0% -3.3% Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10
Slide 19: 2010: Gross Margin Up 10bps
2010: Gross Margin Up 10bps gross margin bps change by quarter 310 290 240 120 -25 -150 -140 -190 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10
Slide 20: 2010: Strong Savings Delivery at €1.4bn
2010: Strong Savings Delivery at €1.4bn Total Savings 2010 Savings €bn €0.3bn 1.4 1.4 €0.8bn 1.1 1.0 €0.4bn 2007 2008 2009 2010 Buying Savings Restructuring Savings Regional / Local Initiatives
Slide 21: Higher, Volatile Commodity Costs
Higher, Volatile Commodity Costs Unilever Commodity Index Commodities inflation % increase vs. a year ago % 300 260 220 75 180 60 140 40 100 01/04 01/05 01/06 01/07 01/08 01/09 01/10 01/11 Palm Oil Sunflower Oil Brent Crude
Slide 22: 2010: A&P Up 30bps
2010: A&P Up 30bps advertising and promotions bps change by quarter A&P 2010 €5.6bn 240 220 (*) 130 140 + €330m during 2010 50 -60 -110 + €370m during 2009 -170 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Constant currency
Slide 23: 2010: Underlying Operating Margin up 20bps
2010: Underlying Operating Margin up 20bps 10bps -30bps 40bps 15.0% 14.8% +20bps 2009 GM % A&P % Indirects % 2010
Slide 24: Q4 10: Underlying Operating Margin down 20bps
Q4 10: Underlying Operating Margin down 20bps -50bps -140bps 170bps 13.0% 12.8% -20 bps 2009 GM % A&P % Indirects % 2010
Slide 25: 2010: Double Digit Diluted Earnings per Share Growth
2010: Double Digit Diluted Earnings per Share Growth 4% 3% 5% 5% €1.46 7% One off Items 2010: 10% M&A one-off items -€0.02 Other one-off items -€0.04 7% Disposals €0.16 Fully Diluted EPS €1.17 Growth 25% EPS 2009 Operational Restructuring Currency Pension Disposals Tax / One-off Items EPS 2010 Perfo
Slide 26: 2010: Cash Conversion Cycle down 17 days (MAT)
2010: Cash Conversion Cycle down 17 days (MAT) Trading Working Capital % Turnover 5% MAT 2010 Cash Conversion Cycle 3 days 0% Stocks 61 days Debtors 34 days Creditors 91 days -5% Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 MAT Average TWC % T/over Closing TWC % T/over
Slide 27: 2010: Healthy Free Cash Flow
2010: Healthy Free Cash Flow €bn 0.2 1.7 1.3 0.1 6.3 3.4 Operating profit before WC Change Capex Tax Others FCF 2010 depreciation and amortisation
Slide 28: Balance Sheet
Balance Sheet Net Debt €6.7bn (€0.3bn increase from 2009) Pension Deficit €2.1bn (from €2.6bn at end 2009) Cash Contributions to Pensions €0.7bn Quarterly Dividend €0.208 per NV share
Slide 29: Paul Polman, Chief Executive Officer
Paul Polman Chief Executive Officer
Slide 30: The Environment in 2011
The Environment in 2011 Difficult environment, particularly in the Developed world Emerging market growth continues Inflationary pressures and rapid rise in many key commodities Expecting a more rational approach in terms of pricing Unilever is stronger and better placed to tackle these is
Slide 31: The Organisation now Aligned
The Organisation now Aligned €80bn €44bn €40bn environmental impact
Slide 32: Sharpening the Portfolio through M&A
Sharpening the Portfolio through M&A Hair TIGI Personal Care Sara Lee Hair / Skin Alberto Culver Hair T&G Ice Cream Greece / Denmark Frozen Italy and Tomatoes Brazil Disposal
Slide 33: A More Competitive Unilever
A More Competitive Unilever volume share up highest ever innovation rate bps 20 33% 10 30% MAT '09 MAT '10 FY 2009 FY 2010
Slide 34: Brands Healthier
Brands Healthier World Number 1 World Number 2 Local Strength Savoury Laundry Oral Care Dressings Daily Hair Care Household Cleaning Tea Ice Cream Spreads Deodorants Mass Skin Number 1 and 2 in more than 80% of the business
Slide 35: ~100 Brands into New Markets in 2010
~100 Brands into New Markets in 2010 2009 2010 Series 1 ~100 2x ~50 Category 1 Category 2
Slide 36: Winning in the Market Place
Winning in the Market Place Oral Care Market Development Model France Indonesia Nigeria
Slide 37: Winning through Continuous Improvement
Winning through Continuous Improvement Global functions now in place Better equipped to manage volatile commodities • Supply Chain • Buying • Enterprise Support We are faster, more disciplined, with strong savings programmes and a leaner cost structure
Slide 38: Winning with People
Winning with People Consumer and Customer Focus Bias for Action A New Unilever: Faster, More Confident Pepsodent Philippines 6 weeks from sign off to on-shelf availability
Slide 39: Unilever Long Term Focus
Unilever Long Term Focus 1. To drive volume growth ahead of the markets 2. Steady and sustainable underlying operating margin improvement 3. Strong cash flow
Slide 40: Questions
Questions