Unilever PLC · LSE:ULVR
Unilever — FY2008 Earnings Presentation
16 slides from Unilever's earnings presentation, Feb 5, 2009
Slide 1: 2008 Full Year and Q4 Results
2008 Full Year and Q4 Results Paul Polman (CEO) and Jim Lawrence (CFO) London, 5 February 2009 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 1
Slide 2: 2008 Key Messages and Highlights
2008 Key Messages • Increasingly challenging environment • Strong organic growth and margin improvement • Good progress with change programme 2008 Highlights • Strong organic growth +7.4% • Underlying operating margin +10bps • €5.3bn cash flow from operations • €2.7bn additional commodity costs • €1
Slide 3: Sales in 2008
Sales in 2008 2008 Q4 Turnover €40.5bn €10.2bn Change 0.8% 2.6% Acquisitions and disposals (1.4)% (2.7)% Currency effect (4.8)% (1.6)% Underlying sales growth 7.4% 7.3% Volume 0.1% (1.6)% Price 7.2% 9.1% Strong Organic Growth Underlying sales growth (%) 9% 8% 7% 6% 5% 4% 3% 2% 1% 0% 06 06 06 06 07 0
Slide 4: Western Europe and Americas
Western Europe • Consistent organic growth • Lower volumes in slowing markets 1.3% 1.3% • Excellent progress with transformation 2008 Q4 • Underlying margin up +70 bps Americas 6.6% 6.5% • US growth in line with market • Some trade de-stocking in Q4 • Double-digit growth in Latin America 2008 Q4 • U
Slide 5: Asia Africa Central & Eastern Europe; Sales Growth by Category
Asia Africa Central & Eastern Europe 14.2% 13.5% • Key countries growing around +20% • Volume growth +3.5% • Some trade de-stocking in Q4 • Underlying margin down 20bps 2008 Q4 Underlying Sales Growth by Category 2008 Q4 14 11.9 12 9.8 10 7.6 8 6.6 6.6 6.1 5.9 6.2 6 4 2 0 Savoury Ice Cream Home Care
Slide 6: Drivers of Operating Profit
2008 Drivers of Operating Profit* Commodity Price costs 2.8 2.3 1.8 1.3 €bn Savings 0.8 Other programme A&P Vol/Mix costs 0.3 Acq/Disp 0 -0.2 Underlying Profit -0.7 *Excl RDIs, constant currency Q4 Drivers of Operating Profit* 0.9 Commodity Price costs 0.7 0.5 0.3 €bn Vol/Mix Other Savings 0.1 A&P A
Slide 7: 2008 Operating Margin Development
2008 Operating Margin Development 2007 2008 Change Operating margin 13.1% 17.7% 4.6% Including RDIs* (1.4)% 3.1% 4.5% Underlying change 0.1% Key drivers: Cost/price/mix (3.4)% Savings 2.8% A&P 0.7% *Restructuring, disposals and one-off items Commodity Cost Impact on Margin 900 800 800 700 760 600 50
Slide 8: Increased A&P Investment; Drivers of EPS Growth
Increased A&P Investment • A&P investment up €50m in 2008 • Benefits from media efficiency programmes • Media rates coming down across markets • Share of advertising spend up 2008 Drivers of EPS Growth 2007 2008 Change EPS (€) 1.35 1.79 32% Includes RDIs*, after tax 0.07 (0.36) Underlying growth in
Slide 9: Balance Sheet and Cash Flow; Returning Cash to Shareholders
Balance Sheet and Cash Flow • ‘Strong single A’ balance sheet • Net debt reduced to €8.0bn • Cash flow from operating activities €5.3bn • Net pension liability increased to €3.4bn • ROIC 15.7% boosted by disposal profits Returning Cash to Shareholders > €7bn returned 07-08 4 Total cash amount (€bn)
Slide 10: Move to Quarterly Dividends in 2010
Move to Quarterly Dividends in 2010 • Aim for attractive, sustainable and growing dividend • One dividend calendar and one set of exchange rates • Requires shareholder approval at AGM’s in May 2009 • No impact on total dividend available for shareholders • More details available on www.unilever.com
Slide 11: Good progress in recent years; We are well placed
Good progress in recent years • Focused brand portfolio • More competitive cost structure • Management layers reduced • Leaner, faster organisation • Better leveraging scale We are well placed • Strong brands and category positions • Offerings covering all price points • Foods and HPC portfolio adva
Slide 12: Stepping up performance; Priorities for 2009
Stepping up performance • Consistently grow volumes • Focus energy externally • Put consumers and customers at heart • Use recession to galvanise faster action Priorities for 2009 1. Reignite volume growth 2. Protect cash flow and margin 12
Slide 13: Reignite volume growth: strengthen brands and portfolio
Priorities for 2009 Reignite volume growth 1. Strengthen our brands and portfolio 2. Sharpen our go to market capabilities 3. Evolve our organisation and culture Priority 1: Reignite volume growth Strengthen our brands and portfolio • 30-day plans to close competitive gaps • Drive innovation harder
Slide 14: Improve go-to-market capability; Sharpen organisation and culture
Priority 1: Reignite volume growth Improve our go-to-market capability • Cost efficient integrated supply chain • Better customer service levels • Focus on fast-growing customers • Excel in shopper understanding Priority 1: Reignite volume growth Sharpen organisation and culture • Strengthen leaders
Slide 15: Protect cash flow and margins; Use of cash
Priorities for 2009 Protect cash flow and margins • Create new sense of urgency • Leverage scale for buying synergies • Better return on marketing spend • Reduce overheads and working capital • Cash flow generation and conversion Use of cash 1. Reinvest in the business 2. Provide dividends to shareh
Slide 16: Outlook and Questions
Outlook • Unpredictable economic environment • Focus on short-term priorities 1. Reignite volume growth 2. Protect cash flow and margin • Confident in long term value creation Questions 16