Sanford C. Bernstein Strategic Decisions Conference Paul Polman - CEO

Transcription

1 Sanford C. Bernstein Strategic Decisions Conference Paul Polman - CEO

2 Safe harbour statement This announcement may contain forward-looking statements, including forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of Words such as expects, anticipates, intends, believes 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, the ability to complete planned restructuring activities, physical risks, environmental risks, the ability to manage 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 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 20-F Report and the Annual Report and Accounts 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 forward-looking 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.

3 bps change Value shares improving after years of decline Source: Euromonitor

4 bps change Driven by volume share improvements L12 MAT -80 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q week volume share change vs. prior year

5 Bigger, better innovation

6 Highest ever innovation rate 33% H1 2010

7 Faster roll outs Lifebuoy 32 markets Clear 35 markets Knorr Stock Pot 19 markets

8 Execution is improving: Customer Service On-shelf availability up Customer service levels targets on-track 20 # Top 20 countries achieving targets +290 bps Q Q Q Q Jan-08 Jul Jan-09 Jul

9 Execution is improving: Investing in Product Quality 100m incremental investment in Product Quality 2009 and 2010

10 Execution is improving: Advertising Effectiveness Communication Scores % Improving the quality of our advertising Increased use of digital media A&P up by c. 500m in H1, 300m in Advertising Q Good Satisfactory Poor

11 Simpler, leaner more cost effective No of people at manager level and above (thousands) 1,000 headcount reduction Fewer layers and fewer people Salaries frozen for 2 nd consecutive year Over 1bn savings in 2010 Taking out cost which the consumer is not prepared to pay for

12 Sharpening the performance culture Right people in the right jobs More differentiated reward More accountability More bias for action

13 Delivering what we have said Volume growth Categories 11 / 11 Top Brands 12 / 13 MCOs 18 / 22 Profitable volume growth Underlying operating margin improvement Strong cash flow

14 Delivering what we have said Your results are strong but can you continue to grow at these levels?

15 Unilever, the Emerging Market Company 52% 15% 25% 35% 45% 55% Source: Annual Report & Accounts, analysts estimates, Unilever estimates

16 Consumption levels in emerging markets are a fraction of those in developed markets US$ Consumption per capita Market Size $31 bn Market Size $17 bn Market Size $49 bn Bath and Shower Deo Laundry Detergents Asia Pacific Western Europe Source: Euromonitor

17 Consistent results: Volume growth accelerating 20% of Unilever 52% of Unilever 16% 14% 12% 10% 8% 6% 4% 2% 0% -2% -4% Volume Growth Price Growth H1 '10

18 Plenty of room in the emerging markets pie D&E market share vs key competitors Source: Euromonitor Unilever P&G L'Oréal Colgate Reckitt Beiersdorf Nestlé Danone Others Spreads Ice Cream Dressings Soups Deo Skin H&B HHC Tea CCA Skin Cleansing Hair Oral Laundry Skin Face 15% 18% 22% 26% 30% 9% 8% 17% 12% 23% 15% 12% 22% 5%

19 Number 1 or 2 positions in over 80% of turnover World Number 1 Savoury Dressings Tea Ice Cream Spreads Deodorants Mass Skin Laundry World Number 2 Daily Hair Care Oral Care Local Strength Household Cleaning

20 Consumers in developed markets will buy more if you innovate! Axe Hair United States 50m Turnover Innovation Knorr Stock Pot Western Europe UK market share +11%

21 Reshaping the portfolio in developed markets Sara Lee completion expected in Q4 10 Disposal of Findus Italy announced Brunch brand disposal completed Du Darfst licensing under way More portfolio change over time

22 Delivering what we have said Your growth is good but the quality of growth is suspect.

23 Where competition has been greatest Market Value Share Difference Turkey Home Care Indonesia Personal Care Brazil Home Care 10% 13% 42% 45% 52% 53% MAT MAT MAT Unilever Nearest Competitor Unilever Nearest Competitor Unilever Nearest Competitor our performance has been best.

24 Growth underpinned by discipline across all elements of marketing mix Pricing stable H New Channels: Digital Investment Up 77% H1 10 Gross margins increasing 290bps 310bps 240bps Underlying price growth turning positive by the -190bps -25bps 120bps end 2010 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 We will remain price competitive Brand equities increasing Bigger, Better Innovation Up 17% No change 72% Down 11%

25 Delivering what we have said The cost of competition is increasing. Can you stay the course?

26 A new competitive Unilever is emerging We will stay competitive Leveraging our global scale Managing the business with a long term focus Cost savings programmes will continue aggressively Reinvesting to build brand equities 26

27 Delivering what we have said Are you fit to compete?

28 Making good progress Unilever today 3 Regions/ 22MCO s Fewer touch points, faster decision making Compensation schemes which Global Shared Services UEx One Category Organis. reward excellence and encourage accountability Bias for action Global Support Functions

29 China: Narrowing the gap to market leaders Market Value Share Difference China Savoury China Home Care China Personal Care 20% 16% 11% 4% 24% 22% MAT MAT MAT Unilever Market Leader Unilever Market Leader Unilever Market Leader

30 Not yet best in class Competitors improving too Genesis programme to come.but we are closing the gaps to best in class

31 Our Priorities Remain Unchanged Continue to drive profitable volume growth Steady and sustainable improvement in full year underlying operating margin Strong cash flow

32 Q&A