q3 2006 roadshow - unilever global · q3 2006 roadshow underlying sales growth underlying sales...
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This presentation may contain forward-looking statements, including ‘forward-looking statements’ within the meaning of the United States Private Securities Litigation Reform Act of 1995. 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. 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 Annual Report & Accounts on Form 20-F. These forward-looking statements speak only as of the date of this presentation.
Q3 2006Roadshow
Underlying sales growth
Underlying sales growth averaged 3.5% p.a. between 1995 & 2002, was below expectation in 2003 & 2004 and improved in 2005
% Sales growth, excluding acquisitions, disposals, and exchange rate movements
Typical growth rate for markets
and categories in which Unilever
operates: 2 - 4%
0
1
2
3
4
5
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006YTD
2
Broad-based growth
Europe
Americas
Asia/Africa
Total
1.4
3.5
8.0
3.9
3.5
4.1
7.5
4.8
YTD Q3Foods
Savoury, Dressings and Spreads
Beverages and Ice Cream
HPC
Home Care
Personal Care
2.7
4.1
1.9
6.5
3.1
6.5
2.7
6.8
Underlying sales growth %
YTD Q3
Operating margin Q3 and YTD
Operating Margin
Q3YTD
(0.8)%0.3%
(0.7)%(0.7)%
Key drivers
A&P
Savings
Cost/price/mix
(0.8)%
2.4%
(2.3)%
Year-on-year change
(0.6)%
2.1%
(2.2)%
Operating Margin 14.8%14.5%- after charging RDIs of (0.8)%(0.3)%
Operating margin before RDIs
3
Drivers of EPS
Underlying sales growth 4A&P (4)Restructuring, disposals and impairments 7
Operating profit 7
Interest and pensions financing 4Other income (JVs etc.) 1Tax rate 4Preference share provision (11)
Total EPS growth 5
YTD (%)
Returning cash to shareholders
• Cash returned to shareholders in 2006 increased from €500m to €750m
• To be distributed as an additional one-off dividend
• €1.5bn share buy-back planned to start in 2007
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Progress on One Unilever –Top 20 countries
0% 20% 40% 60% 80% 100%
Regional sharedservices
Back officeintegration
One sales force
Single head office
One top team
Completed Announced
Our long term ambition
Long term targets:
FCF €25-30bn during 2005-2010
Improved ROIC
Through:
Underlying sales growth of 3-5% pa
Operating margin in excess of 15% by 2010 after normal restructuring
Improved capital and tax efficiency
Overarching ambition remains top one-third TSR
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Driving performance to the next level
Brilliant consumer marketing
Win with customers
Build a winning portfolio
Improvement in core capabilities
Local roots and global
scale
Build strength in high growth
spaces
Drive leadership
positions in key markets
Focusing resources behind business priorities
Vitality D&EPersonal Care
Build a winning portfolio
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Improvement in core capabilities
Brilliant consumer marketing
A focus for 2006 - crafting and leveraging global brand mixes
Applying the same methods and standards to all our brands
Win with customers
Strategic Investing
For Growth
Building BrandsThrough
Customers
CustomerService
Excellence
World Class Customer
Development
Winningat Point of Purchase
Improvement in core capabilities
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Scale, agility, one face to customers
Customer Management in the USA - our unique store reach
A single management team in all marketsSimplified, standardised business processesMajority of top 20 businesses reporting directlyto the Unilever ExecutiveFurther reduction in top management structure
The organisation to deliver
€700 million savings by end 2006€1bn savings by end 2007
Local roots and global
scale
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The operating executive structure
PresidentEurope
Kees van der Graaf
President AmericasJohn Rice
President Asia / Africa
Harish Manwani
PresidentFoods
Vindi Banga
FinanceRudy Markham
PresidentHPC
Ralph Kugler
Human ResourcesSandy Ogg
Distinct, complementary rolesSimpler, faster, more accountable
Group Chief ExecutivePatrick Cescau
Clear, distinct and complementary roles Categories RegionsResponsible for:
Brand development
Innovation
Brand and category strategies
Accountable for:
Medium/long term market share
Brand health
Innovation metrics
Category value creation
Responsible for:
Managing the business
Deploying brands and innovations effectively
Winning with customers
Accountable for:
Growth
Profit
Cash flows
Short term market shares
Organisation – categories and regions
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Regaining Momentum in Europe
Our European change program CUSTOMERS
Build excellence in
customer development
Rejuvenate and support the core
Rebalance our price-value equation
Focus behind fewer, bigger innovations
CONSUMERS
ONE UNILEVER
Simplify our European organization
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Rejuvenating the core - Magnum
A range of bouillons with carefully selected ingredients.
Because good food deserves Knorr
Rebalancing the price-value equation -Knorr bouillon
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The universal power of Cif Cream in a range of convenient, high-performance sprays
- for the kitchen, ideal for grease and sticky mess
- for the bathroom, optimally engineered to remove limescaleand soap scum
- and now with bleach.
Focus on fewer, bigger innovations –Cif Power Cream
Driving for Growth -Personal Care
YTD 2006• Growth of 6.5%
• Strong profitability
• Growth across all categoriesand regions
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Deodorant
Click Global Launch
Silk Dry
Teens Latin America
Fresh TouchRexonaSport for
Men World Cup
activation
A patented combination of translucent anti-perspirant ingredients that are unbeatable against white marks, while delivering protection and a light, fresh fragrance.
Dove Invisible
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DoveBecause lightened and darkened hair need different care
Hair
SunsilkCare and repair
Enriched with lipids
Clear Ultimate anti-dandruff
care
Sunsilk launch in North America
$200m national launch of the brand to solve your hair dramas
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Dove Fresh TouchWith pure cucumber extract and soothing green tea - for skin that
feels smooth, hydrated and refreshed
Skin
AxeA mind-altering range of gels for guys’ different
shower needs
A light moisturising body lotion, with a
unique combination of special Dove
moisturisersand a hint of self
tan
Dove Summer Glow
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Driving for Growth -D&E MarketsYTD 2006• Delivered 8% growth
• Focus on innovation and distribution in highgrowth spaces generating growth ahead ofthe market
• Major contribution to Unilever growth
• Broad-based progress across countries andcategories
Unilever in D&E -a sustainable growth story
Organic growth c. 8% since 1990
Profitable growth, without margin dilution
Proportion of sales from D&E up from 20% to 38% in 15 years
Unbroken value creation since the early 70’s
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Drivers of growth in D&E -availabilityReaching shoppers in rural areas….
…and through the traditional and modern trade in urban areas
Drivers of growth in D&E -affordability
Knorr Cubitoslow unit-price seasoning
cubesRexona Compact
low price roll-on deodorant
Rama affordable dairy cream
alternatives
Blue Bandmargarine sachets
Rin/Surflow price fabric cleaning
sachets
Sunsilk/Clinicindividual wash and care
sachets
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Drivers of growth in D&E -consumer intimacy
Anti-Dandruffsolves dandruff
without compromising on
beauty(across Asia)
Clean & Freshnourishes and
deep cleanses, for women who wear a jilbab (Indonesia,
Malaysia)
For Hair That Breaks and
Fallsfor hair that
grows sparse at the ends (Turkey)
Sunsilk - tailored solutions to local hair dramas
Omo Babyhypoallergenic for babies’ sensitive
skin (Turkey)Lipton Milk Tea
(China)Knorr Salad Seasoning
Arabia
Anti Spongefor Mestizo hair that is difficult
to control (across Latin
America)
Driving for Growth -Vitality in Foods
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AdeZ - a Healthy Drink that combines the Goodness of Soyawith the Refreshment , Taste & Health from Fruit Juice!
Goodness of fruit and soya –AdeZ
Salad dressings in breakthrough easy-to-use spray bottles to control the amount of dressing added to salads, with one calorie per spray
Wishbone Salad Spritzers
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Slim.Fast Vitacal delays the absorption of fat in the gut resulting in stronger ‘satisfaction signals’ to the brain, making you feel fuller for longer
Ways to a healthy heart -Flora/Becel
We have expanded the heart health benefits of the brand from cholesterol-reducing in our core spreads category….
…to milk and yoghurt….
…and daily yoghurt drinks…
...and created a €400m business.
And now we have launched a new range rich in Omega 3
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Lipton’s unique combination of health benefits, with antioxidants to fight free radicals
“Tea Can Do That” –Lipton
Driving for Growth -Vitality in HPC
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UK
Brazil
Making women feel more beautiful every day by widening today’s narrow stereotypical view of beauty
Dove Campaign for Real Beauty
Singapore
The Lifebuoy hand-washing programme helps save the lives of millions of children in India and Indonesia
Promoting hygiene in Asia -Lifebuoy
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Partnering the World Dental Federation - Signal
Encouraging oral health around the world through practical, sustainable programmes, activated locally. The 5c toothbrush also brings affordable quality to low income consumers
Freedom from cleaning -Dirt is Good
The “Dirt is Good” campaign, rolled out across the world, brings home the message: getting dirty is an important part of growing up
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Laundry tablets with a unique gel layer containing pre-treating agents that tackle even the toughest stains
Dirt Is Good –Actigel tablets
Making laundry life easier -Concentrated liquidsFirst to the US market with a liquid that is three times concentrated for a powerful clean – easier to carry, pour and store
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Domestos with C-TAC
0
1 0
2 0
3 0
4 0
5 0
6 0
7 0
8 0
number of flushes
Efficacy(Bacterial Kill)
SUPERIOR LONGER LASTING
EFFICACY
Regular bleach
Bleach with CTAC
1 flush 5 flushes
A dual action bleach with longer lasting protection from germs
Our 12 €1bn brands
World Number 1
World Number 2
Local strength
Source: Euromonitor, UL estimates
Our portfolio
Savoury & Dressings
Spreads
Weight Management
Tea
Ice Cream
Laundry - #1 in D&E
Household Care
Daily Hair Care - #1 in D&E
Skin
Deodorants
Oral Care
Foods Home & Personal Care