Unilever PLC · LSE:ULVR
Unilever — Q1 2007 Earnings Presentation
45 slides from Unilever's earnings presentation, 2007
Slide 1: Q1 2007 Roadshow
Q1 2007 Roadshow Handout version 0
Slide 2: Unilever Q1 2007 Results
Unilever Q1 2007 Results Growth momentum 3 Drivers of growth Broad-based growth 4 Personal Care 25 Q1 Operating margin 5 Ponds Age Miracle 26 Drivers of EPS 6 Dove Pro Age 27 Summary 7 Clear 28 Strategy – Delivering long term objectives Home Care 29 Our portfolio 9 Small & Mighty 30 Our growth prior
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. Words such as 'expects', 'anticipates', 'intends' or the negative of these terms and other
Slide 4: Growth momentum
Growth momentum Underlying sales growth 6% 5% 4% 3% 2% 1% 0% * * 05 05 06 06 06 06 07 05 05 20 20 20 20 20 20 20 20 20 Q2 Q3 Q1 Q2 Q3 Q4 Q1 Q1 Q4 Annualised growth rate * Days adjusted 3
Slide 5: Broad-based growth
Broad-based growth Q1 2007 underlying sales growth (%) Foods Europe 3.6 Savoury, Dressings 3.8 and Spreads Americas 3.2 Ice Cream and 4.9 Asia/Africa 11.8 Beverages Total 5.7 HPC Home Care 5.8 Personal Care 8.4 4
Slide 6: Q1 Operating margin
Q1 Operating margin 2007 2006 Change Operating margin 13.7% 14.8% (1.1)% Including: - RDIs (0.9)% 0.6% (1.5)% Change before these items 0.4% Includes: A&P 0.1% Savings 1.9% Cost/price/mix (1.6)% 5
Slide 7: Drivers of EPS
Drivers of EPS % Operating profit (8) Finance costs 4 % JVs 1 Underlying sales growth 6 Currency and disposals (6) Associates and non- 7 Operating margin before RDIs 3 current investments RDIs (11) (8) Tax rate 2 EPS from continuing 6 operations Discontinued operations (4) EPS 2 6
Slide 8: Summary
Summary Good start to the year Confident of achieving our 2007 guidance: • Underlying sales growth in 3-5% range • Operating margin - greater than 13.6% after 50-100bps of restructuring - ‘underlying’ improvement 7
Slide 9: Strategy: Delivering long term objectives
Strategy Delivering long term objectives 8
Slide 10: Our portfolio
Our portfolio Foods Home & Personal Care Savoury & Dressings Skin Spreads Deodorants World Number 1 Daily Hair Care - #1 in D&E Meal replacement World Number 2 Oral Care Local strength Tea Laundry - #1 in D&E Ice Cream Household Care Our 12 €1bn+ brands 9
Slide 11: Our growth priorities
Our growth priorities Deodorants, Skin, Hair Savoury, Ice Cream, Tea Vitality within Foods D&E: Foods, Home care Russia and China 10
Slide 12: Aligned organisation
Aligned organisation Unilever Executive Corporate strategy Portfolio priorities Performance management Regions Categories Functions Go to market Brand and category strategies Functional excellence Customer management Innovation Business support R&D Simplification Disciplined execution, speed, effect
Slide 13: Progress on One Unilever – Top countries
Progress on One Unilever – Top 20 countries One top team Single head office One sales force Back office integration Regional shared services 0% 20% 40% 60% 80% 100% Completed Announced 12
Slide 14: Agenda going forward
Agenda going forward • Growth our number one priority – Competitive – Profitable – Consistent • Seeking further opportunities to accelerate the transformation 13
Slide 15: Our long term ambition
Our long term ambition Overarching ambition remains top one-third TSR Long term targets: FCF €25-30bn during 2005-2010 Improved ROIC Through: Underlying sales growth of 3-5% pa Operating margin in excess of 15% by 2010 after normal restructuring Improved capital and tax efficiency 14
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Slide 17: Aligned organisation
Aligned organisation 16
Slide 18: Building capabilities - Categories
Building capabilities - Categories Unique and Brand Planning relevant Toolset innovation First choice World Class Brand for our Innovation Brands activation consumers capability capability improvements Every day great execution Integrated Brand Communication 17
Slide 19: Better category strategies, better mixes, faster delivery
Better category strategies, better mixes, faster delivery Portfolio development – US Hair Fragmented portfolio Powerful portfolio Weak brands, managed locally Big brands, global resources 18
Slide 20: Building capabilities - Regions
Building capabilities - Regions Strategic Shopper and Investing customer For Growth solutions First choice World Class for our Customer Customer Building Service Brands customers Development Excellence Through Every day Customers great execution Winning at Point of Purchase 19
Slide 21: Winning with customers – unique store reach
Winning with customers – unique store reach 20
Slide 22: Winning with customers – awards in 2006
Winning with customers – awards in 2006 Wal-Mart International Supplier Tesco Top Supplier Ranked #4 supplier in by of the year Internationally Power Retailers 21
Slide 23: Simplification
Simplification Top management numbers 1200 c. 30% headcount reduction 1000 800 600 400 200 0 2004 2005 2006 22
Slide 24: Delayered, simpler, more effective
Delayered, simpler, more effective One Unilever in China 2004 2007 Foods HPC President Division Division Asia/Africa Foods Asia HPC Asia Business Business Group Group Foods Unilever HPC Category China Category Unilever Ice Unilever Unilever Cream China Foods China HPC China c.10% growth c. 30% growt
Slide 25: Drivers of growth
Drivers of growth 24
Slide 26: Personal Care
Personal Care Q1 2007 Q1 2006 USG 8.4% 5.6% 25
Slide 27: Ponds Age Miracle
Ponds Age Miracle Skin that looks and feels younger A revolutionary range of anti- ageing products designed specifically for the needs of Asian skin 26
Slide 28: Dove Pro.Age
Dove Pro.Age Beauty has no age limit The first collection of hair, skin and deodorant beauty products designed to reflect the unique needs of women in their later years 27
Slide 29: Clear
Clear Complete antidandruff and scalp care regime Centrally developed, identically presented simultaneously across China, Brazil, Russia, Arabia and Turkey 28
Slide 30: Home Care
Home Care Q1 2007 Q1 2006 USG 5.8% 1.4% 29
Slide 31: Small & Mighty in Europe
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 30
Slide 32: Savoury, Dressings and Spreads
Savoury, Dressings and Spreads Q1 2007 Q1 2006 USG 3.8% 1.8% 31
Slide 33: Idea! from Family Goodness
Idea! from Family Goodness The first margarine to contain nutrients that support mental development A low-fat spread that is a rich source of selected brain nutrients (DHA, ALA, B-vitamins) 32
Slide 34: Heart Health
Heart Health Omega 3 plus Packed with more omega 3 than any other spread or minidrink pro.activ (Promise activ) Spreads, milk, yoghurt and mini-drinks clinically proven to lower cholesterol 33
Slide 35: Ice Cream and Beverages
Ice Cream and Beverages Q1 2007 Q1 2006 USG 4.9% 2.6% 34
Slide 36: Frusi
Frusi Great taste without the guilt A unique combination of frozen yogurt, real fruit pieces and wholegrain cereals, with less than 3g of fat per pot 35
Slide 37: AdeZ soya drinks
AdeZ soya drinks AdeZ - a Healthy Drink that combines the Goodness of Soya with the Refreshment , Taste & Health from Fruit Juice! 36
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Slide 39: Financials
Financials 38
Slide 40: Underlying sales growth
Underlying sales growth Sales growth, excluding acquisitions, disposals, and exchange rate movements 6 5 4 % 3 2 1 0 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 39
Slide 41: Commodity costs
Commodity costs Commodity cost impact on margin 180 Outlook 2007 160 Strong head wind 140 from rising agricultural 120 commodity costs 100 bps 80 60 40 20 0 2003 2004 2005 2006 Q1 2007 40
Slide 42: Tax rate development
Tax rate development Outlook 35% Long term c. 26% 2007 c. 24% 30% 25% 20% 01 02 03 04 05 06 20 20 20 20 20 20 Reported tax rate except: 2001-2004 (pre-IFRS beia) 41
Slide 43: Cash flow
Cash flow Ungeared free cash flow 6 5 4 €bn 3 2 1 0 2002* 2003* 2004 2005 2006 * pre IFRS 42
Slide 44: Return on invested capital
Return on invested capital 15% 13% 11% 9% 2002* 2003* 2004 2005 2006 Reported Excluding disposal of discontinued operations * pre IFRS 43
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