Unilever Plc · LSE:ULVR
Unilever — Q2 2008 Earnings Presentation
27 slides from Unilever's earnings presentation, Jul 31, 2008
Slide 1: Unilever Q2 and First Half 2008 Results
Unilever Q2 and First Half 2008 Results 31 July 2008 Unilever Q2 and First Half 2008 Roadshow Patrick Cescau Clearer image to be Jim Lawrence Group Chief Chief Financial sourced Executive Officer Unilever Q2 2008 and First Half 2008 Roadshow Financial Performance Commodity Costs – Skim Milk Powder 1
Slide 2: 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. Words such as 'expects', 'anticipates', 'intends' or the negative of these terms and other
Slide 3: Key Messages for First Half 2008
Key Messages for First Half 2008 • Good performance in challenging environment • Continued strong growth in D&E countries • Determined pricing action to recover cost increases • Transformation programme delivering benefits • Further significant progress on disposals • On track to deliver full year g
Slide 4: Strong Organic Growth; Underlying Sales Growth by Region
Strong Organic Growth Q2 H1 Underlying sales growth 6.8% 7.0% Price 7.4% 6.1% Volume (0.5)% 0.8% Includes: • US SAP change end Q2 07 (70)bps (35)bps • Europe SAP, price pull-forward (20)bps (10)bps • Lower ice-cream volumes (70)bps (40)bps Underlying Sales Growth by Region America Asia Africa Q2 200
Slide 5: Underlying Sales Growth by Category; Advertising and Promotions
Underlying Sales Growth by Category Home Care Ice Cream & beverages Q2 2008 H1 2008 Q2 2008 H1 2008 USG 8.1% 8.0% USG 3.6% 5.1% 18% 20% 28% 34% Savoury, Dressings Personal Care & Spreads Q2 2008 H1 2008 Q2 2008 H1 2008 USG 9.6% 8.7% USG 5.6% 5.7% Advertising and Promotions* H1 2008 Q2 2008 2.0 1.2 1
Slide 6: Q2 and H1 Operating Margin Development
Q2 Operating Margin Development Q2 2007 Q2 2008 Change Operating margin 13.7% 13.2% (0.5)% Including RDIs* (1.0)% (2.0)% (1.0)% Underlying change 0.5% Key drivers: A&P 0.7% Savings 2.5% Cost/price/mix (2.7)% * Restructuring, disposals and one-off items H1 Operating Margin Development H1 2007 H1 2008
Slide 7: H1 Drivers of Operating Profit and EPS Growth
H1 Drivers of Operating Profit* Commodity Price costs Savings €bn Other Programme A&P Costs Volume/ Mix Underlying Profit Increase *Excluding RDIs, constant currency, before acq/disp H1 Drivers of EPS Growth 2007 2008 Change EPS (€) 0.75 0.79 6% Includes RDIs*, after tax 0.01 0.07 Key drivers (%): U
Slide 8: Business Priorities and 2008 Outlook
Business Priorities 1. Delivering competitive growth 2. Drive for sustainable margin improvement 3. Invest selectively to gain market share 2008 Outlook 2008 to mark a further step towards our 2010 goals • 2010 goals • Operating margin > 15% • Consistent, competitive growth at 3-5% p.a. • 2008 Outlo
Slide 9: Returning Cash to Shareholders
Returning Cash to Shareholders 4 30 3,5 25 3 Cash to shareholders (€bn) 20 2,5 Net Debt (€bn) 2 15 1,5 10 1 5 0,5 0 0 2001 2002 2003 2004 2005 2006 2007 Dividends One-off dividend Share buy back Net debt • Attractive dividends with payout ratio above 50% since 2000 • Share buy-back programme of at l
Slide 10: Q2 Drivers of Operating Profit; Commodity Cost Impact on Margin
Q2 Drivers of Operating Profit* Commodity Price costs €bn Savings Other Programme A&P Volume/ Costs Mix Underlying Profit Increase *Excluding RDIs, constant currency, before acq/disp Commodity Cost Impact on Margin 600 500 400 bps 300 550 200 420 330 260 100 160 120 0 Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Q
Slide 11: Commodity Costs – Crude Oil and Edible Oils
Commodity Costs – Crude oil Commodity Costs – Edible oils 11
Slide 12: Commodity Costs – Skim Milk Powder; Working Capital
Commodity Costs – Skim Milk Powder Skim Milk Powder prices EU and World 6000 5000 Euro or USD 4000 3000 2000 1000 0 5 5 5 5 5 5 6 6 6 6 6 6 3/ 7 7 7 7 7 7 8 08 01 200 01 200 01 200 01 200 01 200 01 200 01 200 01 200 01 200 01 200 01 200 01 200 0 01 200 01 200 01 200 01 200 01 200 01 200 01 /20 20 1/
Slide 13: Growth Strategy: Delivering Competitive Growth
Growth Strategy Delivering Competitive Growth Relative pricing Communication • Larger economy sizes • Price tiering • Advertising up by €100m in H1 • Adapting promotions • Share of voice maintained • Innovation • Media & promotional efficiency • 18 Cannes Awards 1kg tub Building Innovation Capabilit
Slide 14: Strong Category Positions; Big Global Brands
Strong Category Positions Savoury Spreads Dressings Deodorants World Number 1 Tea Mass Skin Ice Cream Laundry World Number 2 Daily Hair Care Oral Care Local Strength Household Cleaning Big Global Brands 12 billion euro + brands Top 25 brands = ¾ of Unilever’s sales Of which 12 grew > 10% in H1 2008
Slide 15: Unilever's Strategic Priorities; Unilever in D&E
Unilever’s Strategic Priorities Personal Care D&E Vitality Unilever in D&E As % of Unilever total turnover 2004 2007 Other Other developed developed 26% D&E 23% D&E 36% 44% Western Western Europe Europe 33% 38% 15
Slide 16: D&E Growth is Profitable; Strong Track Record in D&E
D&E Growth is Profitable 2007 Operating margin before RDIs* Unilever average Developed D&E D&E excl. Russia & China * Restructuring, disposals and one-off items Strong Track Record in D&E Since 1990… • Underlying sales growth 9%pa on average • Volume growth 5%pa on average • Volume and value growth
Slide 17: Performance through 1998 South East Asia Crisis
Performance through South East Asia 1998 Economic Crisis Gross Margin bei Underlying Volume Growth 115 25.00% 110 20.00% Underlying Volume Growth 105 Gross Margin Index 100 15.00% 95 10.00% 90 85 5.00% 80 75 0.00% 70 -5.00% 65 60 -10.00% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 97 98 99 00 Un
Slide 18: Market Leadership in Argentina; Accelerating the Transformation
Market Leadership Strengthened in Argentina throughout Crisis Market share % Category 2001 2005 Change Solution Wash 69 70 Fabric Conditioners 68 78 Hair 42 48 Deodorants 67 69 Skin Cleansing 47 49 Bouillon 84 81 Soups 89 93 Mayonnaise 69 72 Accelerating the Transformation • Raising the bar on innov
Slide 19: Shaping the Portfolio; Restructuring Progress
Shaping the Portfolio – Progress to Date Brazil France US Turkey Spreads Cheese Seasonings Olive Oil Disposals completed/ announced Turnover Italy Global Olive & Seed Oil Olive Oil Cote d’Ivoire Palm Oil North America Laundry €1.5bn JV Global Extended RTD Tea Cote d’Ivoire Acquisitions Indonesia Rus
Slide 20: Restructuring Progress; Innovation Driving Growth
Accelerated Restructuring Programme - Progress to Date • Savings from restructuring • Target of €1.5bn reduction p.a. by end 2010 • Achieved c. €0.45bn so far • Restructuring Costs • Target of c. 250bps p.a. over 2007-2009: c. €1bn p.a., €3bn total - €875m charged in 2007, cash outflow of c. €700m •
Slide 21: Clear; Upside Down Rexona Roll-on
Clear Complete antidandruff and scalp care regime Centrally developed, identically presented simultaneously across China, Brazil, Russia, Arabia and Turkey Upside down Rexona roll-on Introducing the world’s smoothest roll on Lateral seal technology and spider device so it never leaks, never gets stu
Slide 22: Rexona in China; Ponds Age Miracle
Rexona in China Don’t let body odour ruin the good impression you make. Always start your day with Rexona! Ponds Age Miracle Skin that looks and feels younger A revolutionary range of anti-ageing products designed specifically for the needs of Asian skin 22
Slide 23: Dove Go Fresh; Comfort Fresh Release
Dove Go Fresh Campaign for Real Beauty A fragrance-driven collection of products aimed at women in their 20s Comfort Fresh Release Breakthrough technology to outperform any fabric conditioner present in the marketplace Strategy Do the moves to release the freshness 23
Slide 24: Small & Mighty in Europe; Knorr Bouillon Gel
Small & Mighty in Europe A revolutionary 3-times-more concentrated laundry detergent A new breakthrough product with perceivably better cleaning, and better convenience, at the same price per wash Cleans a whole wash-load with just one small capful Knorr Bouillon Gel Launched in China with local ins
Slide 25: Heart Health; Hellmann's Light
Heart Health “Goodness of Margarine” Omega 3 plus pro.activ (Promise activ) Packed with more Spreads, milk, yoghurt omega 3 than any and mini-drinks other spread or clinically proven to minidrink lower cholesterol Hellmann’s Light Delicious extra light mayonnaise now with only 3% fat With unique cit
Slide 26: Lipton; Moo
Lipton A unique slimming tea twice as rich in catechins to help maintain your silhouette Sustainably sourced tea certified by the Rainforest Alliance Moo Delicious ice cream for kids with as much calcium as two glasses of milk + + 26
Slide 27: Magnum Temptation
Magnum Temptation An unrivalled multi-sensorial experience using cold roller technology 27