Unilever PLC · LSE:ULVR
Unilever — H1 2018 Earnings Presentation
29 slides from Unilever's earnings presentation, Jul 19, 2018
Slide 1: Unilever First Half 2018 Results
Unilever First Half 2018 Results Paul Polman / Graeme Pitkethly 19th July 2018
Slide 2: Safe Harbour Statement
SAFE HARBOUR STATEMENT Where relevant, these actions are subject to the appropriate consultations and approvals. This document may contain forward-looking statements, including ‘forward-looking statements’ within the meaning of the United States Private Securities Litigation Reform Act of 1995. Word
Slide 3: Paul Polman
Paul Polman DESTROY” GERMS Protect Fy children, a | Buy a bottle, help change a life.
Slide 4: First half 2018: Strong volumes, high-quality margin
First half 2018: Strong volumes, high-quality margin Growth Margin Earnings Cash Underlying Sales Growth Underlying Operating Margin Underlying current EPS Free Cash Flow exc. spreads +2.7% +80 bps +7.8% €1.8 bn +2.5% +60 bps +18.6% +€0.4 bn Underlying Volume Growth Gross Margin Underlying constant
Slide 5: Good progress on our 2020 programme
Good progress on our 2020 programme • Country Category Business Teams fully in place Simpler, faster organisation • Food & Refreshment integrated, 3 Divisions • Savings programmes ZBB and 5S – on track for €6 billion by 2019 Accelerated margin progression • On track for 20% Underlying Operating Marg
Slide 6: Some challenging markets
Some challenging markets Market growth Short-term disruptions Emerging Market GDP Market value 2018 18 vs. 17 India 7.5% 3% Brazil 1.6% 1% Indonesia 5.1% Market volume Source: Nielsen, adjusted for e-commerce Source: Oxford Economics
Slide 7: Encouraging step-up in volume growth
Encouraging step-up in volume growth USG 5.4% 3.2% 3.4% 3.5% 2.7% Pricing muted, as expected: o Low commodity inflation 0.7% o Goods and Services Tax in India UPG 2.6% 0.2% o Deflation in Brazil 1.7% 3.2% 3.1% UVG 2.8% 2.5% Volume step-up despite: 1.8% 0.3% (0.1)% (0.1)% o Brazil truckers strike H1'
Slide 8: Broad-based growth and margins
Broad-based growth and margins Beauty & Personal Care Home Care Food & Refreshment Underlying Sales Growth Underlying Sales Growth Underlying Sales Growth exc. spreads +2.7% +3.5% +2.4% +70 bps +60 bps +100 bps Underlying Operating Margin Underlying Operating Margin Underlying Operating Margin
Slide 9: Graeme Pitkethly
Graeme Pitkethly DESTROY” GERMS Provect 42 children, a help change a life.
Slide 10: Asia / AMET / RUB
Asia / AMET / RUB First half Quarterly trend TO €11.7bn USG 6.9% 4.3% 6.0% 6.5% 5.9% 6.3% UPG UVG USG 6.1% UVG 5.1% Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18
Slide 11: Latin America
Latin America First half Quarterly trend TO €3.5bn USG 3.5% 6.3% 6.6% 4.6% 2.2% (6.9)% UPG UVG USG -2.6% UVG -2.1% Q1’17 Q2’17 Q3’17 Q4’17 Q1’18 Q2’18
Slide 12: North America
North America First half Quarterly trend TO €4.3bn USG (0.1)% 1.8% (2.8)% 2.8% 3.1% (1.0)% UPG UVG USG 0.9% UVG 1.1% Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Underlying Sales Growth exc. spreads
Slide 13: Europe
Europe First half Quarterly trend TO €5.8bn USG (1.0)% 1.0% (1.5)% 0.3% 1.6% 1.1% UPG UVG USG 0.6% UVG 1.1% Q1’17 Q2’17 Q3’17 Q4’17 Q1’18 Q2’18 Underlying Sales Growth exc. spreads
Slide 14: First Half 2018: Turnover
First Half 2018: Turnover USG ex-Spreads +2.7% 1.9% 2.5% 0.2% (0.2)% (8.9%) 2.2% €27.7bn €26.4bn H1 2017 UVG UPG SPREADS M&A FX H1 2018
Slide 15: First Half 2018: High-quality margin delivery
First Half 2018: High-quality margin delivery +50bps +40 bps (20) bps +60 bps (20) bps 18.6% 17.8% + 80 bps H1 2017 Gross Margin Brand & Marketing Overheads H1 2018 Investment
Slide 16: First Half 2018: Underlying Earnings Per Share
First Half 2018: Underlying Earnings Per Share 0.6% 4.6% 0.5% 2.8% (0.7%) 7.9% (0.1)% 4.6% (10.8%) 10.8% €1.22 Underlying EPS +7.8% in current rates €1.13 JVs, NCI & Operational Share Financing H1 2017 Minority Tax Currency H1 2018 performance Buyback & Pensions Interest
Slide 17: Cash flow & balance sheet
Cash flow & balance sheet Free cash flow Pension deficit Net debt € billion € billion € billion 1.8 24.8 0.6 20.3 +0.4 0.3 vs. H1’17 Dec-17 Jun-18 Dec-17 Jun-18
Slide 18: Paul Polman
Paul Polman DESTROY” GERMS Protect Fy children, a | Buy a bottle, help change a life.
Slide 19: Innovation driving our growth
Innovation driving our growth Grow our core Meet key trends
Slide 20: An M&A model that allows us to pivot our portfolio faster
An M&A model that allows us to pivot our portfolio faster 24 deals since January 2015 By 2019 these add: Primarily in Personal Care €3.5bn more turnover Prestige • €3bn HPC Premium price brands in mass • €2bn in premium positions New channels • €1.5bn emerging markets Naturals • €1bn e-commerce Disp
Slide 21: Embracing digital in everything we do
Embracing digital in everything we do Data-driven marketing Artificial Intelligence Robotic process automation Chatbots 250 Processes automated Virtual assistants 120k Data Hours Content released Technology Conversations
Slide 22: Simplify our historic dual-headed structure
Simplify our historic dual-headed structure Legal structure change Rationale NV • Simplification Netherlands 55%* incorporated New NV • Greater flexibility for strategic portfolio change PLC UK 45%* Netherlands • Stronger corporate governance incorporated incorporated Moving to an orthodox single-pa
Slide 23: Graeme Pitkethly
Graeme Pitkethly DESTROY” GERMS Provect 42 children, a help change a life.
Slide 24: Continuing with core corporate governance features
Continuing with core corporate governance features Current practice for NV and PLC Continue in New NV Applying both UK and Dutch Corporate Governance Codes Applying UK, Dutch and US listing rules* Annual re-election of directors incl. CEO Separate Chairman and CEO One-tier Board with diverse experie
Slide 25: And further strengthening our corporate governance
And further strengthening our corporate governance Current practice for NV and PLC New NV corporate governance Voting rights Shareholders of PLC vote independently from NV One constituency: One share, one vote principle Classes of shares • NV shares; NV preference shares with high-voting rights A si
Slide 26: Timeline
Timeline 15 March 18 announcement Around end Q4 18 – of proposal Anticipated implementation Engagement with shareholders, index providers, proxy agencies on proposal 25/26 Oct 18 – GMs, shareholder votes Early Sept 18 – Documentation sent to shareholders at least 6 weeks before EGMs
Slide 27: Paul Polman
Paul Polman URS dees DESTROY” GERMS Protect 4 coin help change a life.
Slide 28: 2018: Full year outlook unchanged
2018: Full year outlook unchanged ❑ Underlying Sales Growth in the 3-5% range ❑ Underlying Operating Margin: continued progress to 20% ❑ Strong cash flow
Slide 29: Unilever First Half 2018 Results
Unilever First Half 2018 Results Paul Polman / Graeme Pitkethly 19th July 2018