CAGNY 2009 - Unilever Presentation - Handout Version ... · PDF fileVol/Mix Acq/Disp Price Other costs ... and Moisturizing Product Processing e.g. Ice Cream ... • Excellence in

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2009 CAGNY

Jim Lawrence, Chief Financial Officer

17 February 2009

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.

Safe harbour statement

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Agenda

• Business Overview

• Financial Performance

• Growth Strategy

• Fit for Growth

• Priorities and Outlook

Business Overview

The essence of our vision in 1890

“To make cleanliness commonplace, to lessen the work for women; to foster health and contribute to personal attractiveness;

that life may be more enjoyable and rewarding for the people

who use our products”.

William Hesketh Lever, 1890

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Business Overview

Our Vitality mission today

Unilever’s mission is to add

Vitality to life.

We meet everyday needs of nutrition, hygiene and personal care.

With brands that make people look good, feel good and

get more out of life.

Unilever

Business OverviewA leading global consumer company

Unilever’s 2008 sales: $ 59 billion

Sales (in US$)*

*Based on latest reported results; average 2008 exchange rates.

Business Overview

A leading consumer products company

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Business Overview

Scale and geographic reach

The Americas | $19bn | 32%

2008 Unilever Turnover $59bn | 100%

Western Europe | $19bn | 32%

Asia Africa CEE | $21bn | 36%

Business OverviewA leading global consumer companyBusiness Overview

Unrivalled strength in D&E markets

Unilever

Sales in D&E markets (% of total)*

*Based on latest reported results; average 2007 exchange rates.

48% of Unilever’s global sales in D&E markets

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Personal Care$17bn (28%)

Ice Cream & Beverages

$11bn (19%)

Savoury, Dressings & Spreads

$21bn (35%)

Business Overview

Balanced category portfolio

Home Care$10bn (18%)

Business Overview

Strong leadership positions

Savoury #1

Dressings #1

Tea #1

Ice Cream #1

Spreads #1

Deodorants #1

Mass Skin #1

Laundry #2

Daily Hair Care #2

Oral Care Local Strength

Household Cleaning Local Strength

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Business Overview

Big global brands

Top 25 brands = ¾ of Unilever’s sales

Business Overview

Local roots with global scale

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Agenda



• Growth Strategy

• Fit for Growth


Financial Performance

Key financials

* Restructuring, Disposals and one-off Items

€1.35€1.79Earnings per share

+5.5%+7.4%Underlying sales growth

(3.1)%(4.8)%Exchange rates

(0.8)%(1.4)%Acquisition / Disposal

(0.07)0.36Including RDIs

+20 bps+10 bpsUnderlying margin change

(1.4)%+3.1%Including RDI*

13.1%17.7%Operating Margin

+1.4%+0.8%Change

€40.2bn€40.5bnTurnover

20072008

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4th year of accelerating growth

0%

1%

2%

3%

4%

5%

6%

7%

8%

2004 2005 2006 2007 2008

Underlying sales growth

+0.4%

+3.1%

+3.8%

+5.5%

+ 7.4%


Additional €1.0b invested in A&P

0

0.2

0.4

0.6

0.8

1

2005 2006 2007 2008

Cumulative A&P investment €bn

A&P increased by € 1.0 billion since 2004

+0.5

+0.8+0.9

+1.0

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Sharp rise in commodity costs

0.0

0.5

1.0

1.5

2.0

2.5

3.0

2005 2006 2007 2008

2008 FY commodity cost increases: € 2.7 billion

Annual Commodity cost increases €bn

+ 0.6 + 0.6

+ 0.9

+ 2.7


Step up in cost savings delivery

0.0

0.5

1.0

2005 2006 2007 2008

Annual Savings € bn

Buying Local initiatives Restructuring

2008 FY cost savings delivery: € 1.1 billion

+0.7

+0.9+1.0

+1.1

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2008 Drivers of operating profit *

*Excl RDIs, constant currency

0

-0.7

-0.2

0.3

0.8

1.3

1.8

2.3

2.8

Vol/Mix

Acq/Disp

Price

Othercosts

Savings programme

Commoditycosts

A&P

UnderlyingProfit

€bn

+ 6% Operating

Profit Growth


Strong balance sheet and cash flow

• Strong single A rated balance sheet

• Access to funding at attractive conditions

• Healthy and consistent cash flow generation

• Attractive, sustainable and growing dividend

• Move to quarterly dividend in 2010

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Strong balance sheet and cash flow

• Strong single A rated balance sheet

• Access to funding at attractive conditions

• Healthy and consistent cash flow generation

• Attractive, sustainable and growing dividend

• Move to quarterly dividend in 2010

2 new US bond issues

$750m: 5 yr at 3.65% (+170bps)

$750m: 10 yr at 4.80% (+180bps)

Agenda



• Growth Strategy

• Fit for Growth


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Growth Strategy

Strategic growth priorities

PersonalCare

Developing & Emerging

Markets (D&E)

Vitality

Growth Strategy: PrioritiesVitality

Formulation & processing technology

Bouillon jelly proprietary technology

Making foods healthier

Catechin rich tea helps to take care of your body shape

Rainforest Alliance certified tea

Driving sustainability

Stronger functional claims

Authentic quality

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Growth Strategy: Priorities

Vitality

Bertolli Frozen

VIDEO

Lipton Linea

VIDEO

Growth Strategy: PrioritiesPersonal Care

Stronger functional claims

Superior technology

Sensorial experiences

New consumer segments

Compelling Sensorials:

“Wake Up. Go Fresh”

Superior skin whitening & anti-ageing technology

A unique formula which makes underarm hair feel finer, softer and visibly reduced

Axe hair care range targeted at

young guys

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Personal Care

Dove Deo

VIDEO

Axe Hair

VIDEO

Growth Strategy: PrioritiesD&E Markets

Population growth

Trading consumers up

Consumer penetration

Conversion in foods

1 billion new consumers in the next 10

years

Loose Leaf Tea

Standard teabags

Pyramid teabags

Re-closable multi-use sachets

Deo ministicks Mini cubes

Packaged food opportunity

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D&E Markets

Surf Excel Hiccups

VIDEO

Rama South Africa

VIDEO

-2

0

2

4

6

8

10

12

14

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1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

UVG UPG


Long-term strength in D&E

Since 1990…

• Underlying sales growth 9% pa on average

• Hard currency growth of 7% pa on average

• Volume growth 5% pa on average

• Volume and value growth in every year

*1990-2002 LATAM and Asia. From 2003 all countries excl NA, WE, Japan and Australia.

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Number of category innovation projects

0

1000

2000

3000

4000

5000

6000

2005 2006 2007 2008 2009

Growth Strategy

Fewer, bigger innovations

• From 5000+ projects to 700

• Average project size increased 10x

Growth Strategy

Faster roll-out to more markets

30 markets

40 markets

52 markets

20 markets

55markets

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Growth Strategy

Science and Technology Strengths

Spray TechnologyDeodorants

StructuredOils and Emulsions

HairTechnology

Skin Mildness and Moisturizing

Product Processinge.g. Ice Cream

Science of Tea

Growth Strategy

Leverage technology across portfolio

Genesis Project 14

Genesis Project 15

Genesis Project 16

Genesis Project 17

Con

sum

er B

enef

it F

ocus

Sci

ence

&T

echn

olog

y F

ocus

Genesis Project 2

Genesis Project 7

Genesis Project 8

Genesis 9

Genesis Project 10

Genesis Project 3

Genesis Project 4

Genesis Project 5

Genesis Project 6

Genesis Project 11

Genesis Project 12

Genesis Project 13

Genesis Project 1

Home Care Personal Care Foods

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Build Super Premium

Renovate the

premiumcore

Re-enter mass/

economy

Growth Strategy

Playing the price piano

E.g. Ice Cream

Growth Strategy

Strengthen our value brands

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Growth Strategy

Strengthen our value brands

Suave In the Motherhood Communication

VIDEO

Agenda



• Growth Strategy

• Fit for Growth


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Fit for Growth

Multi-country organisations

(2005)Pre-One Unilever

Fewer touch points

Quicker decisions

Improved

performance

Country/Category

matrix

(2007)One Unilever

(2008) Multi-Country

& Multi-Category Org

Fit for Growth

One Unilever in the UK

2006 2008

3 Separate Companies

3 Separate Boards

3 Head Offices

1 Board

1 Company

1 Head Office

1620 points of contact

72 points of contact

3 Transaction systems

19 Warehouses

1 Transaction system

7 Warehouses

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Fit for Growth

Building regional supply chains

Past Future

OpcoOpco

Opco

Country A

OpcoOpco

Opco

Country B

OpcoOpco

Opco

Country C

One UCountry a

One UCountry b

One UCountry c

Region

= source, make, plan, deliver

Fit for Growth

Radical simplification in W Europe

• Past • Future

A complex, slow moving organisation

Country led factory and distribution networks

Multiple Finance and HR systems and processes

65 Companies

90 factories>600 depots

3 legacy systems+100 processes

Simpler, cost efficient, ustomerfacing operation

A single EuropeanSupply Chain Company

Single European system and standard processes

9 MCO’s

65 factories<300 depots

1 SAP

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Fit for Growth

Number of managers almost halved

Management headcount reduced by 45%

0

200

400

600

800

1000

1200

2005 2008

Top 3 levels of management

29From 100 units to 20-25 MCOs

Multi-country organisations

50-60Factory closures / streamlining

Actual to datePlan 2007-2010

Fit for Growth

Restructuring is well on track

70

Headcount reduction 10,00020,000

Restructuring savings €0.7bn€1.5bn

Restructuring charges €1.7bn€3.0bn

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Bertolli Olive Oil

NA Laundry

Lawry’s Seasonings

Boursin Cheese

Including:

Fit for Growth

Disposals in 2008

Disposals completed with €1.6 billon turnoverAverage 1.8x sales multiple

Fit for Growth

Acquisitions in 2008

Buavita in Indonesia

TIGI Global

Inmarko in Russia

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Agenda



• Growth Strategy

• Becoming Fit for Growth


Chief Executive Officer

President

Asia Africa CEEPresident

Global Categories

President

AmericasChief HR

Officer

CFO

Priorities and Outlook

Unilever’s top management team

Chairman

M. Polk H. Manwani V. Banga S. Ogg J. Lawrence

P. Polman M. Treschow

President

Western Europe

D. Baillie

Chief R&D

Officer

G. Berger

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A global management team

Chief Executive Officer

President

Asia Africa CEEPresident

Global Categories

President

AmericasChief HR

Officer

CFO


Strengthened with external top talent

Chairman

M. Polk H. Manwani V. Banga S. Ogg J. Lawrence

P. Polman M. Treschow

President

Western Europe

D. Baillie

Chief R&D

Officer

G. Berger

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Priorities for 2009

1. Reignite volume growth

2. Protect cash flow and margin

Reignite volume growth

Strengthen brands and portfolio

• 30-day ‘fix-it’ plans

• Drive innovation harder and faster

• Strengthen offerings in value segment

• Invest in D&E, such as China and Russia

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Improve go-to-market capabilities

• Better customer service levels

• Focus on fast-growing customers

• New Customer Innovation Centers

• Excellence in shopper marketing


Sharpen organisation and culture

• Strengthen leadership in key roles

• Elevate profile of category leadership roles

• New six-monthly variable pay scheme

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Protect cash flow and margin

• Accelerate restructuring savings

• Management salary freeze

• Reduction in travel and consultancy costs

• Buying synergies and marketing efficiencies

Outlook

• Unpredictable economic environment

• Focus on short-term priorities

1. Reignite volume growth

2. Protect cash flow and margin

• Confident in longer term value creation

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Questions

Documents

CAGNY 2009 - Unilever Presentation - Handout Version ... · PDF fileVol/Mix Acq/Disp Price Other costs ... and Moisturizing Product Processing e.g. Ice Cream ... • Excellence in