Unilever Investor Event Graeme Pitkethly, CFO Singapore, 2 nd December 2015

Transcription

1 Unilever Investor Event Graeme Pitkethly, CFO Singapore, 2 nd December 2015

2 Agenda 1 First principles of our business model 2 Creating value through our portfolio 3 Getting to the next level on costs 4 Delivering attractive long-term returns

3 Our 4G growth model Consistent growth Competitive growth Profitable growth Responsible growth

4 Sustained investment over time Brands and Marketing Investment Supply Chain GDP growth (%) Total investment* ( bn) IT People World GDP growth 2005 weighted by our markets *B&MI+Capex+R&D

5 Global strength, leveraged locally Deep experience Strongly local Clear P&L responsibility >80% local leadership* 25% 20% 15% 10% 5% 0% 13% Unilever Indonesia 10% $0.5bn Sales (US $) 3,500 22% 3,000 $2.9bn 2,500 2,000 1,500 1, *Directors and above in our top 12 emerging markets

6 With Sustainable Living a foundation Health and hygiene Nutrition Greenhouse gases Water and waste Sustainable sourcing Less risk 55% of agricultural materials sustainably sourced More growth Brands with purpose growing 2x faster Lower costs 200m cost saving More trust No.1 employer in 32 countries

7 Agenda 1 First principles of our business model 2 Creating value through our portfolio 3 Getting to the next level on costs 4 Delivering attractive long-term returns

8 A strong, resilient portfolio Meeting a broad range of consumer needs 2 billion consumers use a product on any day Distribution strength 70% coverage via exclusive distributors in SEA +170bps growth in Thailand from LeverEdge Scale benefits across the value chain World s No. 2 advertiser e.g. social media partnerships No. 1 buyer of many materials e.g. 5bn+ annual packaging Increasing throughput 3m stores in India Global science & R&D e.g. university research centres

9 With sharper category strategies Personal Care Grow the core Build premium Home Care Step up profitability Scale household cleaning Foods Accelerate growth Strong cash flow Refreshment Grow ice cream cash flow Grow faster in tea Driving resource allocation

10 Driving more cash, and better balance What.. How.. Margin-accretive innovation FCF Premiumisation Profitable growth in EMs FCF Strong cash generation in DMs Mix improvement FCF Low Cost Business Models Premiumisation FCF ROIC focus

11 Allowing reinvestment for growth In new markets In our brands Dove Advanced Hair Series US Dry spray Squeeze bottle Zendium Baby Dove Prestige Spreads with blends of butter Iran Pre-treaters Scale household cleaning Myanmar Magnum Pink & Black Speciality teas

12 R&D and Capex aligned with strategy Embedded R&D Differentiated by Category Capex prioritisation Category R&D structure R&D budgets (%) Capex (% turnover) R&D R&D R&D R&D Deploy Design Innovation Personal Care Strategic Science Group Discover Emerging Markets

13 Active portfolio management Building premium through acquisitions Pruning through disposals Structurally addressing underperformance in Spreads

14 Portfolio delivers consistent results Underlying Sales Growth Core Operating Margin Free Cash Flow months First Half First Half 2.9% 3.8% +40bps +50bps 3.9bn * + 0.2b n vs 2014 *Adjusted for tax on disposals

15 Agenda 1 First principles of our business model 2 Creating value through our portfolio 3 Getting to the next level on costs 4 Delivering attractive long-term returns

16 Continuous improvement Best-in-class global business services Simplification 20% SKU reduction 50% fewer reports Standardised processes Low-cost locations Strategic partnerships From 400 IT applications to 25 platforms

17 Transforming costs to underpin value delivery Supply chain savings New functional models Global ZBB Cost % of turnover 1bn+ per annum Support Core locations 12 categories 80% of global expenditure Owned by Accenture Ongoing, re-invested Programme runs 2016 and 2017 FY savings c. 1bn from 2018, B&MI and Overheads

18 Agenda 1 First principles of our business model 2 Creating value through our portfolio 3 Getting to the next level on costs 4 Delivering attractive long-term returns

19 : A strong track record USG COM* Core EPS** FCF Dividend +5% p.a. +40bps p.a. +8% p.a. 18bn cum. +8% p.a. * Includes 25bps from lower restructuring

20 ROIC a longer-term guide rail for value creation 20% 18% Acquisition of Alberto Culver FX impact: US$ goodwill and debt 16% 14% ROIC definition : Core Operating Profit after Tax Average (PPE + Inventories + Trade receivables - Trade payables + Assets held for sale + Goodwill + Software)

21 Applying ROIC more deeply where required 2 business targets 2 strategic targets ROIC 2015 vs. PY +300bps

22 Pulling all levers of ROIC 4G growth Capex Working Capital Acquisitions Consistent Competitive Responsible Profitable 4% 3% Underinvestment Capex % turnover Catch-up Steady-state Annual moving average trading working capital +0.3% - 3.2% -3.8% -5.0% -5.4% 45 Disciplined criteria Strategic fit IRR > Cost of capital ROIC / WACC crossover 2% Q2 2015

23 Put together - long-term shareholder returns Sharper Category choices The Compass Grow the core Build premium Step up profitability Scale HHC Winning with brands and innovation Winning in the marketplace Winning through continuous improvement Competitive sales growth Steady margin improvement Core EPS FCF ROIC Shareholder returns Accelerate growth Strong cash flow Grow IC cash flow Grow faster in tea Winning with people Capital efficiency Sustainable Living: more growth, lower costs, less risk, more trust

24 Unilever Investor Event Graeme Pitkethly Singapore, 2 nd December 2015