Driving profitable growth. Jean-Marc Huët London, 4th December 2014

Transcription

1 Driving profitable growth Jean-Marc Huët London, 4th December 2014

2 Three themes today A sharpened strategy Enhancing agility EPS growth and cash delivery

3 A sharpened strategy over time One Unilever Cell strategy From 160 units From To 22 MCOs To Driving efficiencies Winning everywhere 4 categories x 8 clusters

4 Active portfolio management 4 strong categories Enhanced by M&A More weighted to PC % Turnover Disposal cash proceeds: 5.3bn 35% 25% Foods Acquisition investment: 5.6bn 28% 36% PC Minorities, Leverhulme: 4.0bn

5 Good overall performance Personal Care Foods Home Care Refreshment Growth Margin Varied contributions by category

6 Sharper category choices Priority 1: Spreads Priority 2: Home Care Differentiated targets Stabilize turnover Sustain strong cash flow Sustain growth Double core operating margin Growth remains our highest priority

7 Priority 1: Stabilise Spreads Important part of portfolio Highly cash generative Drag on top-line growth 7% of Unilever turnover Core operating margin 14% 20% Underlying sales growth 0.9% -3.1% -3.2% 12% of D turnover 27% of Foods turnover Unilever Spreads M 2014

8 Good progress made Initiatives underway Gaining share in Margarines Market still declining Market growth in D markets D markets Naturalness 100bps Baking 0% -4% 0bps Melange Cooking Q3 12 Q3 14 Q3 12 Continued challenges ready for the next step Q3 14

9 A standalone business unit Unilever Baking, Cooking and Spreading Key facts Benefits Dedicated management team Responsible for strategy, resource allocation & performance More focus; short decision lines Freedom to take necessary decisions Own P&L, cash flow, balance sheet Improved trade-offs Developed markets only Continue to benefit from UL scale Fully operational by mid 2015

10 Priority 2: Doubling Home Care margin Grown 2x competition Low margin Scope for improvement growth 14.0% 5.1% Ø Kick off LCBM Phase 2 Ø Radical simplification Ø Efficient media investment Unilever Peer average Unilever Home Care Balance market share gain and margin

11 Three themes today A sharpened strategy Enhancing agility EPS growth and cash delivery

12 2014: a difficult year Price deflation in Europe Slowing markets Less top-line growth UK Foods Consumer Price Inflation Market growth (%) Underlying sales growth 10% 0% 4% -2% Emerging Worldwide Developed +4.3% % 9M 2014 Sep 2012 Sep 2014 Q Q Source: ONS/ Market data

13 Agility in applying the P&L levers Project Half Realised in 2014 Reducing discretionary spend T&E expense: -20% Financial efficiency Pension changes: 250m Consultancy: -40% 2014 core tax rate: 25% Facility management in Europe: -15% Leverhulme impact: Core EPS +2%* *Annualised impact

14 Agility in the organisation Shorter decision lines Speed to market Better, faster services Organisation Smart complexity Enterprise & Technology Solutions 50% faster innovations Global specifications Now Future 70% of resources in D&E by 2016

15 Driving simplification Harmonisation No. of hair packing formats -80% Process simplification Reduced performance review steps: Fewer reports Past Now 200,000 employee hours saved Simplified recruitment process: 50% reduction in agency spend Simpler expense approval system: Now Future 20,000 employee hours saved 10,700 6,500

16 Three themes today A sharpened strategy Enhancing agility EPS growth and cash delivery

17 Driving Gross Margin Maxing the mix Price Index Continued supply chain cost improvement Annual savings 400bps gap to peers 1bn+ Unilever Peers

18 Increasing efficiency in brand and marketing investment Reducing advertising production and agency fees 100m Driving media efficiency India: advertising via mobile phones Shift to digital Digital spend % advertising 8% 19% 27m subscribers M

19 Continued discipline on overheads reduction Strong track record Delivering Project Project Half Half More to come Overhead % 2013 vs E.g. finance function costs % 1.25% <1% 0.75% 130bps less restructuring 120bps underlying OH reduction 1,700 FTEs reduction in m annualised savings

20 Driving Core EPS growth +30% +11% +10% +7% 2010 Constant FX 2011 Constant FX 2012 Constant FX 2013 Constant FX 2014

21 Delivering strong cash flow Capex investment phase Reducing stock levels Strong cash delivery Capex % Turnover Days MAT Free cash flow ( bn) 4% 3% % Goal

22 Three themes today Sharpening our strategy Enhancing agility EPS growth and cash delivery

23 Driving profitable growth Jean-Marc Huët London, 4th December 2014