Unilever Plc · LSE:ULVR
Unilever — FY2004 Earnings Presentation
34 slides from Unilever's earnings presentation, 2005
Slide 1: Unilever Roadshow 2004 Results
Unilever Roadshow 2004 Results 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. These forward-looking statements are based upon current expectations and assumptio
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Slide 3: 2004 Performance
2004 Performance % •Underlying Sales Growth Savoury & Dressings 2.6 Spreads & Cooking Products 1.6 % Europe Ice Cream & Frozen (3.4) (2.8) Beverages (3.9) N.America 1.5 Foods 0.3 Latin America 7.2 Africa & Middle East 3.1 Home Care (0.4) Asia & Pacific Personal Care 2.1 1.4 Total 0.4 Home & Personal
Slide 4: Unilever's Strong Portfolio
Unilever’s Strong Portfolio Unilever’s world category position Our 12 €1bn brands Savoury & Dressings Spreads Weight management Tea Ice Cream Frozen Foods #1 in Europe Laundry #1 in D&E Household Care Focus on 2 brands Daily Hair Care #1 in D&E Skin Deodorants Oral Care Focus on country Number 1 str
Slide 5: Path to Growth Scorecard
Path to Growth Scorecard Revenue Generation Target Achievement Leading Brand growth: Growth 5- 6% 0.9% in 2004 3.6% 2000-2004 Portfolio change and brand focus 95% 95% (from 1600 to 400 brand names) Advertising and Promotions +200 bps +150 bps Cash Generation Restructuring and buying savings €3.1 bn
Slide 6: What we will do differently
What we will do differently • Sustaining market aggression • Making our portfolio work harder • Sharpening execution Supported by new organisation • Single point responsibility • Faster decision-making • Clear accountability for delivery • Leadership close to customer and consumer • Balance between
Slide 7: The New Structure
The New Structure Single CEO with exclusive Responsibility for Divisional structure functional excellence operational authority eliminated and Executive and strategic support Committee restructured with Finance and HR in a smaller, represented on by performance- focused CEO CFO and Head of HR team P
Slide 8: Outlook
Outlook 2010 Overriding ambition is to be in Top Third TSR • Generation of free cash flow 2005-2010 €25-30 bn: aim for top end • Progressive improvement in ROIC • Unilever market growth at 2-4%: we aim to grow at least in line with this •2005 • Number one priority - sustainable top-line GROWTH – reg
Slide 9: 2004 Performance
2004 Performance 8
Slide 10: 2004 Key Financials
2004 Key Financials • Underlying sales growth +0.4% • Disposals (2.5)% Turnover (2.1)% • Operating margin (beia) 15.2% (down 60 bps) • Exceptional items €1672m Net restructuring+ €845m Slim*Fast Impairment €650m Brazil sales tax provision €177m • Lowered financing costs +net of profits and losses on
Slide 11: Operating Margin Development 2004
Operating Margin Development 2004 bps change Gross margin (20) – pricing for competitiveness – savings offset commodity cost increases A&P (10) – step up in Q4 Overheads (30) – dilution from disposals Change in operating margin beia (60) 10
Slide 12: Fourth Quarter Results
Fourth Quarter Results Underlying sales growth +3.2% Disposals (2.5)% Turnover 0.6% bps change Gross margin (110) A&P spend (130) Overheads (30) Operating margin (beia) (270) • Increased market competitiveness: A&P and pricing • Higher commodity costs • One-off items, e.g. asset write-offs /disposal
Slide 13: Track Record
Track Record 12
Slide 14: Free Cash Flow and ROIC
Free Cash Flow and ROIC FCF 5 4.5 4 3.5 Underlying €4.2bn € bn 3 2.5 2 1.5 1 0.5 0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 20 ROIC 18 16 14 Underlying 12 % 10 11.5% to 12% 8 6 4 2 0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 13
Slide 15: Bestfoods acquisition - meeting its objectives
Bestfoods acquisition - meeting its objectives Clear and compelling strategic rationale u Big, market leading brands in faster growing categories u Successful Foodsolutions business u Strong presence in D&E u Provides a powerful base in North America u Access to cost synergies Successful integration
Slide 16: Progress on Financial Strategy
Progress on Financial Strategy Net Debt CFO 2000* Dividends A&D Capex & Fin Currency Invest. 6.5 6.2 Retranslation Tax Net Debt 29.0 26.5 Interest Q4 04* 5.2 5.0 Other 6.8 9.7 4.9 Cost of Capital down Tax Rate down *2000 closing EUR/USD 0.93, Q4 2004 closing EUR/USD 1.366 15
Slide 17: The Winning Formula
The Winning Formula 16
Slide 18: Winning through brand innovation - pro.activ
Winning through brand innovation - pro activ We have extended the heart health benefits of the brand from our core spreads category…. …to milk and yoghurt…. …and daily yoghurt drinks… ...and created a €300m-plus business in 3 years 17
Slide 19: Winning through brand innovation - Lux
Winning through brand innovation - Lux We have developed the brand from a simple cleansing soap to a range with differentiated beauty benefits Silky bars with creamy lather Europe - Shower Gel Bars with natural ingredients you can see 18
Slide 20: Winning through portfolio management - Deodorants
Winning through portfolio management - Deodorants Active Response Axe Touch D&E Fresh Dove Sensitive Intense bars “The Changing Room Crystal for Effect” Grooming Range Men 19
Slide 21: Winning through Vitality innovation
Winning through Vitality innovation Feel Good Look Good Get More Lux “Brings Out the Star Out of Life In You” Rexona Active Response Dove Intense Care Ades YoFresh Hellmann’s Soy drink Low Cholesterol Mayonnaise CarbSmart Ice Cream Omo Dirt Is Good Dove Firming Gel 20
Slide 22: Dove Firming shapes up the UK market
Dove Firming shapes up the UK market - Real women proudly showing their curves - Sparked the rise of the “firming market” in the UK. - Sales uplift of 700% 21
Slide 23: Winning through customers - Foods & HPC in the US
BODY FROZEN CARE LAUNDRY DAIRY in the US BEVERAGES SOUP SEASONINGS RTD TEA PIZZA SAUCE MARGARINE CHECKOUTS OLIVE OIL PASTA SAUCE DRESSINGS PEANUT BUTTER SNACKS MEAT BAKERY SEAFOOD DELI WINE CAFE BEER Winning through customers - Foods & HPC 22
Slide 24: 2005 HPC Innovation
2005 HPC Innovation Dove Styling North America Dove Campaign for Real Beauty Degree Made for Men US Sunsilk Styling Europe Vaseline Derma Care “Winter Coat” Dove Cool Moisture 23
Slide 25: 2005 Foods Innovation
2005 Foods Innovation Frozen Food Carb Options Steamfresh Knorr Cubitos Hellmann’s Low Cholesterol Mayonnaise 24
Slide 26: Taking Action
Taking Action 25
Slide 27: Improving competitiveness in Europe
Improving competitiveness in Europe Pricing • Spreads family brands: Germany & Poland • Laundry price positions: Surf UK, Skip Portugal Innovation • Pro-activ yoghurt drinks: UK, Portugal, Belgium • Comfort Pearls: UK Activation • ‘Dirt is Good’ campaign • Hair brands • Knorr activities 26
Slide 28: Innovation & Activation - Europe
Innovation & Activation - Europe Comfort Pearls Cup-a-Soup roll-out Cremefine Dairy Cream Alternatives range Dirt is Good Carte d’Or and Magnum Light 27
Slide 29: Taking the Initiative in Asia
Taking the Initiative in Asia Aggressive and well supported innovation programme e.g.: • Lux Super Rich in Japan Hair • Rin ‘Advance’ in India Laundry • Clinic All Clear, Hazeline, Clear in anti-dandruff across the region • Any many others 28
Slide 30: Asia Innovation - Japan and India
Asia Innovation - Japan and India Japan Lux Spa Moist Lux Super Rich Mod’s shampoo and styling products India Lux Rin ‘Advanced’ Clinic All Clear 29
Slide 31: Organising to Win
Organising to Win 30
Slide 32: Old Management Structure
Old Management Structure Co-Chairman Co-Chairman HPC Foods Division Corporate Division HR Finance Director Development Director Director Director Director Marketing Finance Marketing Finance President SVP President SVP R&D SVP HR SVP R&D SVP HR SVP Africa S/C SVP BGP S/C SVP Latin North Latin North
Slide 33: The New Structure
The New Structure CEO Patrick Cescau Regions Categories Functions President President Europe Foods Finance Rudy Markham Kees van der Graaf Vindi Banga President President Human Resources Americas HPC Sandy Ogg John Rice Ralph Kugler President Asia / Africa Harish Manwani 32
Slide 34: Unilever Roadshow 2004 Results
Unilever Roadshow 2004 Results 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. These forward-looking statements are based upon current expectations and assumptio