Unilever Plc · LSE:ULVR
Unilever — Deutsche Bank Conference 2014
28 slides from Unilever's conference presentation, Jun 18, 2014
Slide 1: Unilever – Deutsche Bank Conference
Unilever – Deutsche Bank Conference Jean-Marc Huët – CFO June 18th 2014
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 ‘will’, ‘aim’, ‘expects’, ‘anticipates’, ‘intends’, ‘looks’, ‘believes’, ‘vi
Slide 3: Strong foundations - clear vision and strategy
Strong foundations - clear vision and strategy Energising vision Clear strategy Sustainability embedded Winning with Winning in the brands and marketplace innovation Sustainable Living Winning Winning with through people continuous improvement
Slide 4: Winning with brands and innovation
Winning with brands and innovation Bigger, better, faster innovation Continued white space rollout Investing in our brands Innovations into 10+ countries New brand/market cells (2009-13) A&P% 70 13.1% 13.2% 13.7% >350 9 2009 2013 2011 2012 2013
Slide 5: Winning in the marketplace
Winning in the marketplace Reduced consumer complaints Improved customer service Adding more perfect stores Consumer complaints On shelf availability -35% +800bps 2009 2013 2009 2013 Reaching 8m by the end of 2014
Slide 6: Winning through continuous improvement
Winning through continuous improvement Simplified systems and processes Driving working capital Delivering Project Half IT systems % turnover Achievement to date % 200 4 -2.5% -3.2% -3.8% Treasury centres 4 1 2011 2012 2013 SKU reduction Mktg FTE reduction
Slide 7: Winning with people
Winning with people Differentiated rating Fewer touch points Recruiting and retaining talent Employer of choice: No 1 FMCG in 26 countries Personal Care Home Care Refreshment Foods Standards of Leadership 25% North America North Asia Europe NAMET & RUB Employee engagement: Up 14% South East South As
Slide 8: Three recurring themes from investor meetings…
Three recurring themes from investor meetings… Is the emerging market Can Unilever grow in When are we going to opportunity intact? developed markets? see EPS growth?
Slide 9: Is the emerging market opportunity intact?
Is the emerging market opportunity intact? Can Unilever grow in When are we going to developed markets? see EPS growth?
Slide 10: Unparalleled market position
Unparalleled market position 1 1 2 1 2 1 1 1 2 Fabric Cleaning 1 2 1 2 1 1 1 1 2 1 1 Hair Care 1 1 1 2 1 1 1 1 1 Skin Cleansing 2 1 1 2 1 1 1 Face Care 1 1 1 1 1 2 1 1 2 1 Deos 2 2 2 2 2 1 Tea 2 2 2 1 1 1 1 1 1 Savoury Ice Cream 1 1 2 1 1 1 1 1 1 Brazil Russia India China Indonesia Thailand Philippi
Slide 11: Emerging markets: more consumers of our products
Emerging markets: more consumers of our products 1.3 billion new consumers Rapid urbanisation Population (bn) Urban population % total* India China 2.2 3.0 Haves lots 34% 60% 2020 2.2 2.7 Haves 32% 53% 2013 2.6 1.9 Have nots 2013 2020 *Source: Oxford Economics
Slide 12: Emerging markets: more consumption
Emerging markets: more consumption Ice cream Deodorants € per capita consumption € per capita consumption 15X 11X Russia Indonesia Brazil Turkey Source: Euromonitor
Slide 13: White space opportunity: more penetration
White space opportunity: more penetration 100% 90% White space % of total emerging market countries 80% 70% 60% 50% 40% 30% 20% 10% Present 0%
Slide 14: Africa, an underexploited opportunity
Africa, an underexploited opportunity: e.g. Ethiopia Vietnam Ethiopia 92 million Population 92 million > USD 1000 GDP > USD 1000 Zero Sales 20 yrs ago Zero > €0.5bn Sales now ~ Zero Source: UN /US Census Bureau
Slide 15: Continuing to capitalise on growth opportunities
Continuing to capitalise on growth opportunities Deepen distribution reach Trading up Innovation with local relevance China: Chicken cubes in Reaching more cities & modern Nigeria trade outlets Indonesia: Vitamin A fortified Adding 50 more bouillon in Vietnam distribution centres India: Chicken jell
Slide 16: The emerging market opportunity is intact
The emerging market opportunity is intact
Slide 17: Can Unilever grow in developed markets?
Can Unilever grow in developed markets? Is the emerging market When are we going to opportunity intact? see EPS growth?
Slide 18: Creating value in stable markets
Creating value in stable markets Flat market with pricing pressure Holding our market position Improving margin Market growth (%) % developed markets turnover ∆ core operating margin winning share* +50bps 50% 2010 2012 2014 2010 2013 est *Source: Nielsen / IR estimates
Slide 19: Reducing our dependency on Foods
Reducing our dependency on Foods Disposals Acquisitions More Personal Care weighted % developed market sales 36% Foods 46% 33% PC 24% 2009 Now
Slide 20: But there is more to be done…
But there is more to be done… Fixing spreads Further cost reduction Innovation led growth UK/IR: male & female variants Now Share gain in margarine Next Stabilising the market Double action capsules in France/UK
Slide 21: When are we going to see EPS growth?
When are we going to see EPS growth? Is the emerging market Can Unilever grow in opportunity intact? developed markets?
Slide 22: Consistent and sustainable top and bottom line growth
Consistent and sustainable top and bottom line growth Lever Revenue growth 1 Lever Operational leverage 2 Sustainable Lever Cash flow leverage Living 3 = Core EPS growth Free cash flow growth
Slide 23: 'Maxing the mix' underway
‘Maxing the mix’ underway 3/4 innovations now accretive Low cost business models Win in faster growing channels Price index 2011 – 2014 Q1 2014 underlying sales growth 100 120 E commerce: 40% Drug stores: €400m €800m 6% Realised Identified Gross margin up 140 bps over 2 years
Slide 24: Generating fuel for growth
Generating fuel for growth Lower non-working media Approaching best in class Simplification programmes in Finance overheads well on track % advertising Finance OH % vs FMCG companies* Simplification: Project Half 26% 25% Marketing Fit to Win Enterprise Technology & Solutions Mkt median: 1.3% Realise
Slide 25: Converting core operating margin to earnings
Converting core operating margin to earnings Effectively managing financial Increased ownership in Simplifying capital structure: expense India and Pakistan Leverhulme family estate Avg. interest rate on borrowings (%) Non-controlling interests Annualised impact on core EPS 3.7% 3.5% 3.3% 52% 67% +2
Slide 26: Taking the right decisions to drive continued EPS growth
Taking the right decisions to drive continued EPS growth Core EPS 3 yr growth +30% -9% Good constant rate EPS growth +20% despite commodity increases Strong currency headwinds in 2013; €1.31 €1.58 will persist in 2014 2010 Constant Currency 2013 rate
Slide 27: Outlook
Outlook Priorities remain unchanged: Volume growth ahead of our markets Steady and sustainable improvement in core operating margin Strong cash flow This will translate into earnings growth over the business cycle
Slide 28: Unilever – Deutsche Bank Conference
Unilever – Deutsche Bank Conference Jean-Marc Huët – CFO June 18th 2014