Unilever Plc · LSE:ULVR
Unilever — H1 2003 Earnings Presentation
11 slides from Unilever's earnings presentation, Jul 30, 2003
Slide 1: 2003 Second Quarter and Half Year Results
2003 Second Quarter and Half Year Results Rudy Markham 30 July, 2003 SAFE HARBOUR STATEMENT: This presentation may contain forward-looking statements (within the meaning of the U.S. Private Securities Litigation Reform Act 1995) based on our best current information and what we believe to be reasona
Slide 2: Highlights of first half 2003
Highlights of first half 2003 ◆ Leading brands grew by 3.1% : HPC 4.8%, Foods 1.7% Now 90%+ of total business ◆ Planned growth held back by 200bps : Slim.Fast; Trade destocking; Prestige and OOH Channels ◆ Underlying sales growth 2.1%, tail attrition 7.7% ◆ Operating margins ahead by 20bps, A&P +120
Slide 3: Drivers of second half EPS growth
Drivers of second half EPS growth Drivers of EPS growth in the second half ◆ Restructuring savings €100m+ per quarter ◆ Improved mix ◆ Recovery of devaluation driven cost increases ◆ Global procurement savings - ahead of plan Phasing differences compared to first half ◆ Operating margin impacted by
Slide 4: Path to Growth: Levers of Value Creation
Path to Growth: Levers of Value Creation Levers of Value Path to Growth Creation Portfolio improvement Top line 5-6% Focus on leading Free Top brands Operating margin Cash 16+% 1/3 Simplification Flow TSR Capital efficiency Growth World Class Supply 600 bps improvement Chain Optimise Enterprise Cult
Slide 5: Levers of Value Creation: Operating Margin
Levers of Value Creation: Operating Margin 2004 Operating Margin 16%+ Restructuring +100 bps Improved Mix Margin +50 to 60 bps Growth Drivers Recovery of D&E Cost +80 to 100 bps Step up A&P spend MAT Q2 ‘03 -40 bps Operating Margin 14.6% And…continued momentum in global procurement and Bestfoods int
Slide 6: Top Line: Improving the portfolio
Levers of Value Creation: Top Line: Improving the portfolio ◆ Acquired more powerful brands; Disposed of 99 businesses for €6.8bn ◆ Momentum growth rate up by 100bps from 3 to 4% ◆ Growth in nineties 3.5 - 4% - improved portfolio raises this to 4.5 - 5% ◆ Further benefit to come from tail reduction
Slide 7: Top Line: Home & Personal Care 1st Half
Levers of Value Creation: Top Line: Home & Personal Care 1st Half Leading brands growth % 2000 2001 2002 2003 Personal Care 7.5 9.0 10.8 8.6 (excl. Prestige) Prestige 2.8 (7.2) 1.3 (8.0) Total Personal Care 7.0 7.6 10.1 7.6 Laundry 3.2 5.3 1.9 1.3 Household Care 2.0 7.1 2.6 (3.6) Total HPC 5.3 6.5 6
Slide 8: Laundry: Progress; Top Line: Foods 1st Half
Levers of Value Creation: Laundry : Progress 2003 Target (Q2 MAT) end 2004 Increase Operating Margin >250 500 Reduce Operating Assets >550 10% % of Sales ➣ Closed 16 factories ➣ Exited 4 countries ➣ Reduced specifications for top 10 raw materials from 115 to 23 14 Levers of Value Creation: Top Line:
Slide 9: Top Line: Summary and Regions
Levers of Value Creation: Top Line: Summary Bps Impact of 1st Half 2003 LB growth rate Laundry focus on profitability 40 Pause in Slim.Fast 70 Growth Spreads Family Brands 20 Frozen Foods 20 Restore Growth Household Care 20 Prestige 20 16 Levers of Value Creation: Top Line: Regions Underlying Sales
Slide 10: The Outlook Statement and Updating Guidance
Levers of Value Creation: Summary Top Line - Improved business & brand Portfolio Operating Margin +350 bps Annual Free Cash Flow Capital Efficiency raised by €1bn +840 bps since 1999 Balance Sheet: Tax down 2% Cost of capital down 1% First 70 years EPS Last 10 years EPS growth 8% growth 9% Current s
Slide 11: Safe Harbour Statement
2003 Second Quarter and Half Year Results Rudy Markham 30 July, 2003 SAFE HARBOUR STATEMENT: This presentation may contain forward-looking statements (within the meaning of the U.S. Private Securities Litigation Reform Act 1995) based on our best current information and what we believe to be reasona