Unilever - CAGE Conference Paul Polman CEO Roger Seabrook VP Investor Relations London - 19 th March 2012
Contents 1 2011 key takeaways 2 Our progress over the last 3 years 3 Your questions addressed
2011 Strong performance in a challenging environment Strong growth Growth acceleration in emerging markets Value shares improving USG USG bps change 3.5% 4.1% 6.5% 11.5% 2.0% 2.2% 7.9% 8.1% 2.0% 2.2% 20 10 2009 2010 2011 2009 2010 2011 FY 2011 L12 w Strong results whilst defending our profitability and continuing to invest behind our brands
2011 Underlying operating margin down 10bps 6.1bn A&P: investing for growth 100m in product quality + 3bn cost inflation 300 Unilever index Jan 1st 2002=100 200 100 Jan/04 Jul/05 Jan/07 Aug/08 Feb/10 Sep/11 Managing the business for the long term
Personal care Dove now a 3bn brand 10% 12 month MAT underlying sales growth Now our biggest category 2% 2011 underlying sales growth 8.2% Strong performance across the portfolio -6% Q4 08 Q3 09 Q2 10 Q1 11 Q4 11 Winning vs. peers: +40bps value share gains (L12w) Unilever Competitor Competitor
Home care Surf now a 1bn brand Innovation led growth global re-launch Investing in quality Roll out to white spaces Best fragrance Best value proposition Best Packaging Excellent advertising Now in 46 countries
Ice Cream - Magnum approaching the 1bn mark Ice Cream value shares Magnum launch in US and Indonesia 70 bps 2009 2010 2011 White space opportunity : Magnum is only in 22 countries
Spreads Winning differently Market leader Strong cash generation Greater focus on taste with health benefits 5-year CAGR 3.7%
A new vision for Unilever 80bn Helping 1 billion people to improve their health and well-being 46bn 44bn 40bn environmental impact Doubling the turnover whilst reducing the environmental footprint
A sharpened strategy Sharpened our strategy with the Compass Organisation fully aligned More consumer and customer centric Bias for action and performance culture rvice omers umers er of BB & BD OSTS
Bigger, better, faster innovation Increasing innovation rate Faster roll-outs to 10+ countries Launch of Lifebuoy Clini-care in India 70 >30% 9 40 2009 2010 2011 10x better germ protection, 10x more skin care
Stepping up investment over the last 3 years 300m in improving formulations 300 more brand/market combinations 850m more in A&P > 95% formulations better / equal than competition
A new structure Pre-One Unilever One Unilever New category led organisation Chairman PLC Foods / IC-FF / HPC Chairman NV Foods / IC-FF / HPC 2005 Pre-One Unilever Personal Care Home Care Refreshment Foods 12 Business Groups 12 Business Groups 3-5 OpCos 3-5 OpCos 2007 One Unilever North America Europe NAMET & RUB North Asia Country 1 Country 1 Country 2 Country 2 Country 3 Country 3.... 2009 MCO s Latin America Africa South Asia South East Asia & Australa sia New organisation fully implemented: 8 clusters x 4 categories. Fewer touch points, faster decision making
Capabilities getting stronger Global supply chain Unilever Leadership Programme 4 Acres Singapore Centres of excellence World class service End-to-end competitive cost SC creates value through Consumer perceived quality Flexible, agile & lean structures Flawless execution Accelerated talent development internal and external appointments
Capabilities more recognised: top 3 employer in 27 markets (*) 1 2 3 Russia Turkey Netherlands Argentina China Nigeria Mexico Ghana South Africa India Indonesia Chile Philippines Thailand UK Germany Pakistan Australia Brazil Japan Kenya Egypt Czech Republic Vietnam Bangladesh Sri Lanka Sweden (*) FMCG employer rankings. Source: FMCG Ranks from Universum, TNS & other Employer Ranking Surveys, *Japan No 1 among Foreign FMCGs, Sweden no:1 by Academic Communications, No.2 by Universum
Standards of Leadership Performance culture sharpened On-shelf availability Objectives fully aligned: 3+1 s Employee assessment and rating +450 bps 1/ 4 th 2009 2010 2011 Delivery 1/4 th of senior management in green box
2012: A challenging year Developed markets remain weak High competitive intensity in D&E Crude oil $125 d/p 10 % Developed markets 5 0-5 -10 2007 2008 2009 2010 2011 GDP growth Inflation Source: Oxford Economics
More to do Innovation not yet differentiated enough Need to improve mix Leverage further Enterprise Support / IT
Restructuring Last 10 years ~200bps of restructuring p.a. 2012 business restructuring part of operating costs 2012 business restructuring estimated at ~130bps Opportunities remain to lower costs to benchmark levels
Emerging markets growth 16% Unilever emerging markets underlying sales growth More consumers able to afford our products 12% Winning where competitive battles are toughest 8% 4% Emerging markets: the growth engine for Unilever 0% 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 Outstanding track record 9% CAGR over the last 20 years
Conclusion Pleased with progress. Much more still to do. Our priorities remain unchanged: Volume growth ahead of our markets Steady and sustainable core operating margin improvement Strong cash flow
Safe Harbour Statement 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. Words such as will, aim, expects, anticipates, intends, believes, vision, or the negative of these terms and other similar expressions of future performance or results, and their negatives, are intended to identify such forward-looking statements. These forward-looking statements are based upon current expectations and assumptions regarding anticipated developments and other factors affecting the Group. They are not historical facts, nor are they guarantees of future performance. Because these forward-looking statements involve risks and uncertainties, there are important factors that could cause actual results to differ materially from those expressed or implied by these forward-looking statements, including, among others, competitive pricing and activities, economic slowdown, industry consolidation, access to credit markets, recruitment levels, reputational risks, commodity prices, continued availability of raw materials, prioritisation of projects, consumption levels, costs, the ability to maintain and manage key customer relationships and supply chain sources, consumer demands, currency values, interest rates, the ability to integrate acquisitions and complete planned divestitures, finalising fair values related to prior acquisitions, the ability to complete planned restructuring activities, physical risks, environmental risks, the ability to manage sustainability, regulatory, tax and legal matters and resolve pending matters within current estimates, legislative, fiscal and regulatory developments, political, economic and social conditions in the geographic markets where the Group operates, completion of the Sustainable Development Report 2011 and new or changed priorities of the Boards. Further details of potential risks and uncertainties affecting the Group are described in the Group s filings with the London Stock Exchange, Euronext Amsterdam and the US Securities and Exchange Commission, including the Group s Annual Report on Form 20-F for the year ended 31 December 2011 and the Annual Report and Accounts 2011. These forward-looking statements speak only as of the date of this document. Except as required by any applicable law or regulation, the Group expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forwardlooking statements contained herein to reflect any change in the Group s expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.
Unilever - CAGE Conference Paul Polman CEO Roger Seabrook VP Investor Relations London - 19 th March 2012