Unilever Plc · LSE:ULVR
Unilever — H1 2011 Earnings Presentation
35 slides from Unilever's earnings presentation, Aug 4, 2011
Slide 1: Unilever H1 2011 Results
Unilever H1 2011 Results Paul Polman – CEO Jean-Marc Huët – CFO James Allison – Head of IR and M&A August 4th 2011
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 ‘expects’, ‘anticipates’, ‘intends’, ‘believes’ or the negative of these ter
Slide 3: Paul Polman – CEO
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Slide 4: Good performance against our priorities
Good performance against our priorities Strong sales growth Volume growth remains robust Gaining value share USG H1’11 H1’11 5.7% 4.4% 2.0% 2.2% 3.8% 40% 60% winning / holding H1'09 H1'10 H1 '11 Market Volume growth
Slide 5: Another step in the transformation
Another step in the transformation One Unilever 9 for 9 The Compass Innovation led organisation 9 for 09 Personal 1 Agree country & category strategies €80bn Care 2 Magnify innovations 3 Own market development 4 Improve sales fundamentals Home Refresh Care ment 2007 5 Step change customer service €4
Slide 6: A new organisation – 4 categories
A new organisation – 4 categories Personal Care Home Care Refreshment Foods From 11 to 4 categories – driving strategy and innovation and leveraging scale
Slide 7: A new organisation – 8 clusters
A new organisation – 8 clusters North America Latin America South Asia North Asia NAMET & RUB Europe Africa South East Asia From 22 MCO’s to 8 mega clusters – focus around the consumer, faster and more cost effective
Slide 8: Jean-Marc Huët – CFO
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Slide 9: Q2'11: Highest growth since 2008
Q2’11: Highest growth since 2008 USG 7.1% 5.1% -5.6% 0.4% 1.9% €11.9bn €11.8bn 1.5% Turnover Q2'10 Vol/Mix Price Currency M&A Turnover Q2'11
Slide 10: H1'11: Healthy balance between price and volume growth
H1’11: Healthy balance between price and volume growth USG 5.7% 3.5% -1.6% 0.0% €22.8bn 2.2% €21.9bn 4.1% Turnover H1'10 Vol/Mix Price Currency M&A Turnover H1'11
Slide 11: H1'11: Western Europe stable over the first half
H1’11: Western Europe stable over the first half % 4.8 2.9 1.8 1.1 1.3 UVG 0.1 0.2 UPG USG -2.8 -2.7 Q1 '11 Q2' 11 H1 '11 Growth in H1 in line with the market
Slide 12: We are winning where competition is intense - Hair
We are winning where competition is intense - Hair Value shares (L12 weeks) >200 bps >100 bps >100 bps >20 bps China Turkey US Western Europe
Slide 13: We are winning where competition is intense - Laundry
We are winning where competition is intense - Laundry India Fabric Cleaning Price competitiveness addressed Delivering results Latest 12 weeks Laundry India price index 200 >200bps 150 >70bps 100 2009 2010 a Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Latest Value share Volume share 12wks Rin Competitor
Slide 14: Winning globally in Ice Cream
Winning globally in Ice Cream Value shares (L12 weeks) >600 bps >300 bps >250 bps >50 bps Positive Indonesia Philippines Brazil USA Western Europe
Slide 15: Innovation underpins our growth
Innovation underpins our growth Bigger projects Faster roll outs Portfolio delivering more 20% H1 '10 H1 '11 Top 10 projects incremental turnover 100 countries in 12 months Innovation rate > 30%
Slide 16: Innovations H1'11
Innovations H1‘11 Radox – Spa range Close Up – Fire Freeze Lipton – Sun Tea
Slide 17: We continue to roll-out our brands into more markets
We continue to roll-out our brands into more markets Axe - China Café Zero – Benelux, Spain, Greece Clear – Mexico
Slide 18: Integration work progressing well
Integration work progressing well Alberto Culver Sara Lee Sara Lee integration nearing completion Sanex disposal completed Synergies in line with business case Colombia laundry acquisition completed Alberto Culver completed in May ’11 Most countries fully integrated by end 2011 Synergi
Slide 19: Commodity costs guidance unchanged 500-550 bps
Commodity costs guidance unchanged 500-550 bps Unilever commodity index 300 Jan 1st 2002=100 Crude oil unchanged at ~$115 -$120 p/b 260 Edible oils softening but still very high 220 Better positioned to manage volatility 180 140 90% of materials covered through year-end 100 Jan/04 Jul/05 Jan
Slide 20: Full year savings programmes in excess of €1.3bn
Full year savings programmes in excess of €1.3bn Total Savings €bn €0.1n 0.6 1.4 1.4 €0.4bn 1.0 1.1 2007 2008 2009 2010 H1 2011 Savings delivery to step-up further in the 2nd half
Slide 21: H1'11: Price growth has accelerated
H1’11: Price growth has accelerated underlying price growth 3.5% year-to-date 5.1% 1.8% -2.0% 0.0% -3.3% -1.2% Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 H2’11 underlying price growth at or slightly above the level seen in the 2nd quarter
Slide 22: Gross margin down
Gross margin down gross margin bps change 180 Impact of commodities cost inflation ahead of pricing Higher factory and distribution costs -140 Negative mix during H1 (e.g. Japan) -230 H1'10 H2'10 H1'11 Year-on-year movement will improve as the year progresses
Slide 23: H1'11: A&P investment – flat spend for the full year
H1 ‘11: A&P investment – flat spend for the full year advertising and promotions trends €bn 2010 2011 €3.2bn €3bn €3bn €2.8bn H1'10 H2'10 H1'11 H2'11 Fcst Constant currency, excluding Alberto Culver & Sara Lee
Slide 24: H1'11: Underlying operating margin down 20bps
H1’11: Underlying operating margin down 20bps -20 bps +60bps -230bps +150bps 14.9% 14.7% H1 2010 GM % A&P % Indirects % H1 2011
Slide 25: H1'11: Diluted earnings per share growth
H1 ‘11: Diluted earnings per share growth Fully diluted earnings per share -2% 6% €0.77 4% -3% 5% €0.70 Fully diluted EPS growth 10% EPS 2010 Operational One-off Items Disposals M&A Costs Others EPS 2011 Performance
Slide 26: 7th consecutive quarter of negative working capital
7th consecutive quarter of negative working capital Trading Working Capital % Turnover 5% Closing TWC % T/over 0% -5% Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 H1 11 Working capital outflow of €1.2bn from end 2010
Slide 27: Free cash flow impacted by seasonal outflow of working capital
Free cash flow impacted by seasonal outflow of working capital €bn 1.2 0.9 3.8 0.6 0.4 0.8 Operating profit before WC Change Capex Tax Others FCF H1 2011 depreciation and amortisation
Slide 28: Balance sheet remains strong
Balance sheet remains strong Net Debt €8.1bn (€1.4bn increase Pension Deficit from 2010) €1.5bn (from €2.1bn at end 2010) Cash Contributions to Pensions Quarterly Dividend €0.2bn €0.225 per NV share €2.7bn paid for Alberto Culver in May 2011
Slide 29: Paul Polman – CEO
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Slide 30: Good progress in a difficult environment
Good progress in a difficult environment Filling white spaces Faster roll outs A new organisation >60 40 9 2009 2010 2011e ~130 new brands into markets # of projects launched in >10 markets Performance culture
Slide 31: Consumer environment remains fragile: two speed economy
Consumer environment remains fragile: two speed economy Developed markets Emerging markets Market value growth Market value growth 15% 15% 10% 10% 5% 5% 0% 0% 2009 2010 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 2009 2010 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11
Slide 32: Opportunities to raise the bar further
Opportunities to raise the bar further Sharper choices New structure implementation Sustainable Living Plan Personal Care Home Refresh Care ment Foods Driving rigour and discipline in all areas of the business
Slide 33: Priorities unchanged
Priorities unchanged 1. Drive volume growth ahead of the markets 2. Steady and sustainable underlying operating margin improvement 3. Strong cash flow Above all, ensure our brands are managed for the long term health of the business
Slide 34: Questions
Questions
Slide 35: Appendix: H1'11 Diluted earnings per share growth
Appendix: H1’11 Diluted earnings per share growth Fully diluted earnings per share Core earnings per share (fully diluted) 4% -3% -2% 6% €0.77 5% 0% -1% 5% -1% €0.71 €0.69 €0.70 Fully diluted Core EPS EPS growth growth 3% 10% EPS 2010 Operational One-off Items Disposals M&A Costs Others EPS 2011 EPS