Unilever Plc · LSE:ULVR
Unilever — Investor Presentation (August 2006)
51 slides from Unilever's investor presentation, August 2006
Slide 1: Introduction to Unilever
Introduction to Unilever August 2006
Slide 2: Contents
Contents Page number Overview of Unilever Mission 3-4 Geographic reach 5 Categories and brands 6-7 Organisation and people 8-10 Social responsibility 11 Customer partnerships 12-13 Adding Vitality to Life 14-23 Local Roots and Global Scale 24-31 Financial Summary 10 year financial history 32-40 Comm
Slide 3: Safe Harbour Statement
Safe Harbour Statement 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 assumptions regar
Slide 4: Our Mission
rN — VM s WAYEN oom PT mel BS ory ion, hygie , help people feel good, look good . and get more out of life. |
Slide 5: Adding Vitality to Life
Adding Vitality to Life 150 million times a day, in 150 countries, people are using our products at key moments of their day.
Slide 6: Scale & Geographic Reach
Scale & Geographic Reach “Our deep roots in local cultures and markets around the world give us our strong relationship with consumers and are the foundation of our future growth. We will bring our wealth of knowledge and international expertise to the service of local consumers - a truly multi-loca
Slide 7: Portfolio of Categories
Portfolio of Categories Meeting everyday needs for nutrition, hygiene and personal care Spreads 11% Home Care 18% Savoury & Dressings 21% Beverages 8% Personal Care 26% Beverages 8% Ice Cream and Frozen Food 16%
Slide 8: Powerful Category Positions & Brands
Powerful Category Positions & Brands Foods Home & Personal Care Savoury & Dressings Skin Spreads Deodorants World Number 1 Laundry - #1 in D&E Weight Management World Number 2 Daily Hair Care - #1 in D&E Local strength Tea Household Care Ice Cream Oral Care Our 12 €1bn brands Source: Euromonitor, UL
Slide 9: Management Organisation
Management Organisation Three pillars: categories, regions and functions CEO Americas Asia/Africa Europe Foods Finance HPC HR Our long term success requires a total commitment to exceptional standards of performance and productivity, to working together effectively, and to a willingness to embrace n
Slide 10: Organisation – Categories & Regions
Organisation – Categories & Regions Clear, distinct and complementary roles Categories Regions Responsible for: Responsible for: Brand development Managing the business Innovation Deploying brands and innovations effectively Brand and category strategies Winning with customers Accountable for: Accou
Slide 11: Our People
Our People People are the heart of our business. Harnessing, developing and rewarding their skills, energy and commitment is our priority Unilever is one of the world’s most culturally diverse companies, with top leadership from 32 nations. More than 30% of managers worldwide are women.
Slide 12: Corporate Social Responsibility
Corporate Social Responsibility To succeed also requires, we believe, the highest standards of corporate behaviour towards everyone we work with, the communities we touch, and the environment on which we have an impact. ¾ Eco-efficiency – reducing the impacts of our operations ¾ Eco-innovation – red
Slide 13: Customer Partnerships
Customer Partnerships Unilever has unparalleled reach across the store, which can bring unique ‘shopper insight’ to the partnership with customers
Slide 14: Customer Partnerships
Customer Partnerships Unilever manages a number of partnerships globally
Slide 15: Vitality
Vitality
Slide 16: Building Vitality brands
Building Vitality brands Our portfolio of brands brings benefits in nutrition, hygiene, health and beauty, which give us a unique ability to add Vitality to all of life: inside and outside our bodies, at home and in the everyday environment. Foods Making the healthier choice the enjoyable and easy c
Slide 17: Vitality in Action
Vitality in Action Brand innovation ¾€1bn investment in research and development ¾Unilever Food and Health Research Institute Partnerships ¾Working with UNICEF on improving the health of children and their families ¾Partnership agreement between the World Heart Federation and Becel/Flora ¾Working wi
Slide 18: Flora – Becel pro.activ
Flora – Becel pro.activ We have expanded the heart health benefits of the brand from cholesterol- reducing in our core spreads category…. …to milk and yoghurt…. …and daily yoghurt drinks… ...and created a €300m-plus business in 3 years. And now we are first to market with one-a-day drinks, with natu
Slide 19: Knorr Vie
Knorr Vie A delicious “smoothie” style drink of concentrated fruit and vegetable juices At least half your daily recommended intake of fruit and vegetables crammed into one mini bottle
Slide 20: Ice Cream
Ice Cream Healthy reduced fat and lower sugar lines across Europe and North America Ben & Jerry’s Carte D’Or Light Body & Soul Breyers Smart Range and Organic Solero Orange Fresh 0% fat Klondike Slim-a-Bear Popsicle Sugar Free
Slide 21: Lipton “Tea Can Do That”
Lipton “Tea Can Do That” Lipton’s unique combination of health benefits, with antioxidants to fight free radicals
Slide 22: Dove Campaign for Real Beauty
Dove Campaign for Real Beauty Making women feel more beautiful every day by widening today’s narrow stereotypical view of beauty Brazil Singapore UK
Slide 23: Lifebuoy
Lifebuoy The Lifebuoy hand-washing programme helps save the lives of millions of children in India and Indonesia
Slide 24: Dirt is Good
Dirt is Good The “Dirt is Good” campaign, rolled out across the world, brings home the message: getting dirty is an important part of growing up
Slide 25: Local Roots and Global Scale
Local Roots and Global Scale
Slide 26: The D&E Opportunity
The D&E Opportunity • The world population is set to grow by 800m to 6.8bn by 2010: almost all of the increase will be in the developing world. • By 2010 nearly 90% of world population will be in D&E • Consumer spending is growing faster in D&E than in the developed world • D&E consumer spending is
Slide 27: Seizing the Opportunity
Seizing the Opportunity ¾ Organic growth c. 8% p.a. since 1990 ¾ Proportion of sales from D&E up from 20% to 38% in 15 years ¾ Profitable growth, without margin dilution ¾ Unbroken value creation since the early 70’s
Slide 28: A Winning Formula – Local Roots with Global Scale
A Winning Formula – Local Roots with Global Scale Our unparalleled strength comes from our unique combination of local roots and global scale Portfolio Brands Availability Community Technology reputation & reach People & Values & Affordability Cost advantage Local roots Global scale
Slide 29: Unilever’s Local Roots
Unilever’s Local Roots Our heritage and local expertise mean that D&E is in our DNA ¾ Presence in many markets for over sixty years ¾ Well-established selling and distribution capabilities ¾ Low cost local supply chain ¾ Predominantly local management ¾ Products designed for local consumers by local
Slide 30: Unilever’s Global Scale
Unilever’s Global Scale Leveraging our scale brings us advantages over local competition ¾ Global portfolio of brands and categories ¾ Dedicated R&D investment ¾ Global economies of scale ¾ Shared values and standards of behaviour Global scale
Slide 31: Drivers of Growth in D&E - Affordability
Drivers of Growth in D&E - Affordability Lifebuoy Rin/Surf Rama small soap bars with proven low price fabric cleaning affordable dairy cream sachets germ protection alternatives Knorr Cubitos low unit-price seasoning Sunsilk cubes individual wash and care Rexona Compact sachets low price roll-on deo
Slide 32: Drivers of Growth in D&E – Consumer Intimacy
Drivers of Growth in D&E – Consumer Intimacy Lipton Milk Tea Omo Baby (China) hypoallergenic for babies’ sensitive Knorr Salad Seasoning skin (Turkey) Arabia Sunsilk - tailored solutions to local hair dramas Anti Sponge Anti-Dandruff for Mestizo hair that solves dandruff without is difficult to cont
Slide 33: Financial Performance – 10 Year History
Financial Performance – 10 Year History Note: From 2005, Unilever has fully adopted International Financial Reporting Standards (IFRS). Information on this change can be found in the FAQ section of the Investor Centre at www.Unilever.com. In the following section, historic trends are shown on a pre-
Slide 34: Underlying Sales Growth
Underlying Sales Growth 5 % Sales growth, excluding acquisitions, disposals, and exchange rate movements 4 3 2 1 0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Turnover IFRS IFRS €bn* 36.2 39.8 43.1 40.6 41.3 48.1 52.2 48.8 42.9 38.6 39.7 % -3.5 10.2 8.2 -5.7 1.5 16.5 8.6 -6.6 -11.9 +3.1 c
Slide 35: Operating Margins
Operating Margins % 16 13.4 % 14 12 10 8.0 % 8 6 IFRS 4 2 Old GAAP 0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Includes Restructuring, disposals and impairments (4.6) % (1.4) %
Slide 36: Capital Efficiency
Capital Efficiency Working capital 38% 40 Fixed assets 35 30 % of sales 25 19% 20 15 10 5 0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2004 2005 IFRS IFRS
Slide 37: Return on Invested Capital
Return on Invested Capital % 20 18 16 14 12.5 % 12 10.8 % 10 8 6 IFRS 4 Impact of Bestfoods goodwill Old GAAP 2 0 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 IFRS IFRS
Slide 38: Ungeared Free Cash Flow
Ungeared Free Cash Flow € bn 8 Cash flow from operating activities 7 6 5 4 € 4.0 bn 3 Ungeared Free Cash Flow 2 Pre-IFRS 1 € 1.4 bn Re-defined post IFRS* 0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 * Includes P&L charges for stock options and pensions
Slide 39: Net Profit
Net Profit € billion 4 Net profit from continuing operations € 3.5 bn 3.5 3 2.5 2 € 1.7 bn 1.5 1 IFRS Old GAAP 0.5 0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Note: 1997 adjusted to exclude exceptional items, incl. profit on sale of chemicals. Reported net profit for 1997 was € 5.0 bn
Slide 40: Dividends
Dividends € per NV share US$ per NV share pence per PLC share CAGR +11% p.a. CAGR +10% p.a. CAGR +11% p.a. € 0.66 $ 0.82 45 p 0 0 0 '95'96'97'98'99'00'01'02'03'04'05 '95'96'97'98'99'00'01'02'03'04'05 '95'96'97'98'99'00'01'02'03'04'05 Note: based on new shares following split and consolidation on 19
Slide 41: Share price vs market index – 20 years
Share price vs market index – 20 years 2000 Unilever NV NY 20 year CAGR: 1750 + 12% p.a. 1500 1250 1000 S&P 500 750 20 year CAGR: + 9% p.a. 500 250 0 Jan-85 Jan-86 Jan-87 Jan-88 Jan-89 Jan-90 Jan-91 Jan-92 Jan-93 Jan-94 Jan-95 Jan-96 Jan-97 Jan-98 Jan-99 Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Uni
Slide 42: Commitment to Shareholder Value
Commitment to Shareholder Value “……. our road to sustainable, profitable growth, creating long term value for our shareholders, our people, and our business partners.” extract from Unilever’s Corporate purpose Unilever measures its Total Shareholder Return, Return over a 3 year rolling period, among
Slide 43: Financial Objectives
Financial Objectives Overarching ambition: Top Third Total Shareholder Return, over a 3 year rolling period out of peer group of 20 other companies. Outlook to 2010: • Ungeared free cash flow in the period 2005-2010 to be €25-30 bn • Improvement in Return on Invested Capital • Underlying sales growt
Slide 44: Legal Structure, Governance & Shares
Legal Structure, Governance & Shares Unilever was formed in 1930 from two companies: Margarine Unie (Netherlands) Lever Brothers (UK) It was a full business merger, operating as a single business entity. Two separate legal parent companies were maintained: - Unilever NV (Netherlands) and Unilever PL
Slide 45: Unilever Legal Structure
Unilever Legal Structure Unilever NV and PLC have separate legal identities but operate as a single entity. NV Share PLC Share holders holders Directors Equalisation and NV PLC Other Agreements Jointly NV Owned PLC Owned Owned Operating Operating Operating Companies Companies Companies
Slide 46: Corporate Governance
Corporate Governance Unilever firmly believes in maintaining high standards of Corporate Governance. These have evolved in response to developments in Europe (UK Combined Code, Dutch Corporate Governance Code) and the US (Sarbanes Oxley, NYSE listing rules). Unilever operates a unified board: the bo
Slide 47: Share Listings
Share Listings Unilever NV ordinary shares or certificates (depositary receipts) are listed on the stock exchanges in Amsterdam and as New York shares on the New York Stock Exchange. Unilever PLC ordinary shares are listed on the London Stock Exchange and as American Depositary Receipts in New York.
Slide 48: Share Listings
Share Listings Exchange Amsterdam New York London New York Unilever NV Unilever PLC Share Unilever NV Unilever PLC New York Share ADR (1:1) Ticker UNA UN ULVR UL 2005 Earnings €1.29 $1.61 88p $1.61 per share 2005 Dividend €0.66 $0.83 45p $0.82 per share End 2005 price €19.28 $22.88 1281p $22.29 Unil
Slide 49: Share Listings & Ownership
Share Listings & Ownership Share listings as a Share ownership* by percentage of capital country at the end of 2005 NV Ords (NL) PLC Ords (UK) USA 29% UK 29% 48% 39% NV NY Shares (US) PLC ADR’s (US) Other/ Netherlands 11% 2% Unidentified 23% 19% * estimated
Slide 50: Taxation on dividends for US Residents
Taxation on dividends for US Residents This information is intended to provide general guidance only. Actual tax treatments will depend on specific circumstances. US residents should consult their local tax advisers. The information shown is generally applicable to a typical US resident. Share Local
Slide 51: Further Information & Contact Details
Further Information & Contact Details More information on Unilever is available at www.Unilever.com The shareholder centre at Unilever.com gives information on how to purchase Unilever stock. The IR team can be contacted by telephone as follows: Europe: + 44 (0) 20 7822 6830 North America: + 1 201 8