Unilever Adding Vitality to Life: Doing Well by Doing Good Miguel - - PDF document

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Miguel Veiga-Pestana VP Global External Affairs, Unilever November 2007

Unilever – Adding Vitality to Life:

Doing Well by Doing Good

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.

Introduction

• Unilever’s footprint as a business
• Our Vitality Mission
• Four pillars of Vitality
• Conclusion - The business rationale

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Unilever is an Anglo-Dutch company with operations in over 100 countries

Our 12 €1bn+ brands

World Number 1 World Number 2 Local strength

Savoury & Dressings Spreads Meal replacement Tea Ice Cream Laundry Household Care Daily Hair Care Skin Deodorants Oral Care

Foods Home & Personal Care

With strong brand and category leadership positions around the world

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and are present in half the households on the planet

Our brands are sold in nearly every country We have deep roots in the developing world

1903 South Africa 1933 Indonesia 1910 Congo 1930 Brazil 1918 Nigeria 1888 India 1911 China 1918 Ghana 1929 Kenya 1918 Cote d’Ivoire

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….which today accounts for 44% of our sales

Western Europe 38%

D&E 36%

As % of Unilever total turnover

2004

Other developed 26%

2007

Western Europe 32%

D&E 44%

Other developed 24%

2007 – based on YTD turnover

With a depth of distribution

from the favelas of Sao Paolo to the villages of India

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We sell to the well-off

and to those living on very low incomes

… with trusted brands …

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…that suit different pockets and lifestyles

Have lots Haves Have nots

…through a differentiated brand portfolio

Laundry, India Hair, Indonesia

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Vitality has been central to our way of doing business

Founded in 1884 by William Lever – a leading British philanthropist

since we started out making soap in 1884 Lever’s success in making low-cost soap widely available to the urban poor helped to combat disease in Victorian Britain

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It has always been part of Unilever’s corporate purpose

“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”.

Our Mission in 1890 Our Mission in 2007

“Unilever's mission is to add Vitality to life. We meet everyday needs for nutrition, hygiene and personal care with brands that help people feel good, look good and get more out of life”.

Today our approach is built on 4 pillars

Nutrition and Health Sustainable development Community engagement Hygiene

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Nutrition and Health covers four main areas

Physical activity and healthier lifestyles Nutrition enhancement Innovation Information to consumers - responsible marketing practices

In 2005 and 2006, reformulation changes eliminated 15,000 tons of trans-fats 10,000 tons of saturated fats 2,000 tons of sodium and 10,000 tons of sugars from our portfolio

Saturated fats being reduced by up to 40% in Heart brand ice creams in Europe F a m i l y G

• d

n e s s s p r e a d s t

• b

e v i r t u a l l y f r e e

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t r a n s f a t s b y 2 7 Ketchup sugar levels reduced by 10% S

• u

p s s

• d

i u m l e v e l s r e d u c e d b y 1 % ( E u r

• p

e ) 20-25% reduction in sugar levels in US RTD teas completed. S

• d

i u m i n ( U S ) R a g u O l d W

• r

l d S t y l e S a u c e r e d u c e d b y 2 5 % Many US vegetable oil spreads reformulated to 0 g trans fat per serving

Our nutrition enhancement programme (NEP) is about improving the nutritional profile of our product range

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Not only have we eliminated “baddies”…

Trans fat-free Up to 25% less sugar Up to 30% less salt Promise spreads US Lipton Ice Tea US Knorr soups Europe Improved natural ingredients:

• More vegetables and herbs
• Extra virgin olive oil
• Organic variants

…we have upgraded the profile of core ranges

Ragu sauces Knorr bouillon Now with a full serving of vegetables in every half cup

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We are also committed to a fortified foods

programme that…

Iodised salt in Ghana and Nigeria Combating Iodine Deficiency Complementary Feeding Low-cost foods for infants in Latin America Partnership for Child Nutrition Reducing child malnutrition in India

spans three regions and three age groups

Our innovation programme is targeting five key benefit areas

Beauty Heart Health

Immunity and Strength

Weight

Management

Brain

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Heart Health – Flora/Becel

Omega 3 plus Packed with more omega 3 than any other spread or minidrink pro.activ Spreads, milk, yoghurt and mini- drinks clinically proven to lower cholesterol A nutrient mix scientifically shown to improve learning and memory in school-aged children

Mental development - Amaze

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We are focusing on five natural ingredients…

Oils Tea Fruit and vegetables Soy Milk

…where we have long-standing expertise

Our brands’ heritage in tea dates back over a century We have been researching the dietary impact of vegetable oils since the 1960s Soy-based AdeS drinks were first launched in Argentina 20 years ago

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Vegetables – Knorr “fresh” soups

Healthy, premium ingredients Delicious recipes New packaging for a fresher taste Celebrating the unique combination of health benefits of tea, with antioxidants to fight free radicals

Tea – Lipton

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Oils – Family Goodness spreads

“Goodness of margarine” Communication on healthy oils and fats in Europe and Africa

Milk - Moo

+ +

Delicious ice cream for kids with as much calcium as two glasses of milk

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We are using our brands to promote physical activity and healthier lifestyles

We work in partnership with the world Heart Foundation to promote healthy lifestyles We use our brands to promote physical activity – such as the Flora London Marathon – one of the world’s biggest participatory events

• A simple consumer-friendly logo
• Works across companies and categories
• Products must meet benchmarks for

saturated fat, trans fat, sodium, sugar

• Now launched in 35 countries

We are committed to improving the information we provide our consumers Healthy choices made easy – My Choice

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In the UK GDAs are becoming standard on front of pack Responsible advertising and marketing practices

• Our guiding principles

– We sympathise with societal concerns about the advertising of food (especially to children) – We are working with regulators to find a proportionate response – We have adopted a our code of Marketing Principles that sets out limitations on advertising to children below 12yrs of age.

• For example

– In the UK we were one (of only two) manufacturers to support the FSA’s proposal to ban the advertising

• f foods high in sugar, fat and salt in children’s programmes.

– In the USA we will participate in the “Advertising Pledge” programme – where 50% of adverts targeted at children under 12 must include a healthy lifestyle message.

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Hygiene is our second key global pillar

Hand washing Laundry hygiene Home hygiene Oral hygiene

Our hand washing education programmes are broad We are reaching over 250 million people

Lifebuoy’s hand washing programme in India is reaching 20% of the population The programme has been launched in sub-Saharan Africa in 2007 The second biggest killer of children in the world is diarrhoea. Hand-washing can cut diarrhoeal diseases by 48%

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Our partnership with FDI World Dental Federation involves 700,000 dentists in a global campaign – Live, Learn, Laugh In Nigeria our Schools Campaign will educate 2 million people about oral health over 5 years Dental disease is the No.1 disease affecting children and a key cause of children missing school, especially those on low-incomes

Our oral care programmes also reach millions 80% of food poisoning happens in the home

Our household products improve domestic hygiene

Domestos works with the Red Cross in many countries to promote home hygiene

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Sustainability is our third pillar…

Agriculture Water Eco-efficiency Greenhouse Gases

Eco-efficiency is integral to our business performance

We have measured the impacts of our activities since 1995

Since then we have halved the water we use reduced our energy use by 25% and reduced waste by

• ver 50%

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We have cut CO2 emissions by a third

17% of our energy is from renewable sources We’ve developed solar ice cream cabinets with Greenpeace We’re ranked as an industry leader

but we still have a way to go to With 2/3rds of our raw materials from agriculture

we have set sustainability targets for all key crops

We are founder members of the Round Table on Sustainable Palm Oil – a multi- stakeholder initiative to ensure that palm forests are farmed sustainably Drip irrigation trials by our tomato growers in Brazil have cut water use by 30%

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Our decision to source all our tea sustainably is a big one…..

It will improve the crops, income and livelihoods of >1million people

Our water footprint is large

Our focus is on helping consumers

50% 5% 45%

in agriculture in manufacturing in washing, cooking and cleaning

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… through brand development

Pureit provides potable water that is free of viruses, parasites, bacteria and pesticides without the need for mains electricity. It’s cheaper than boiling tap water and easy to use. In India, Surf Excel has been reformulated with a low lather to save two buckets of water per wash. Sales have doubled in dry southern states where water costs more than detergent.

and product innovation For those without access to water we co-founded WSUP (Water and Sanitation for the Urban Poor)

The first projects from Water & Sanitation for the Urban Poor (WSUP) are in Bangalore, India and Naivasha, Kenya

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Community engagement

HIV/AIDS Economic impacts Local projects Self esteem

Our approach to HIV/AIDS

In 2005 40.3 million people carried HIV/AIDS – nearly two-thirds of them in sub-Saharan Africa In South Africa, working with SABCOHA and UNAIDS, our employee programmes have become the template for local businesses. In Africa we’ve helped set up 9 national HIV/AIDS business coalitions.

is to leverage our business prominence

We are now applying our experience in Africa to other regions. In Brazil our employees distribute thousands of condoms to tourists on Brazil’s beaches every summer.

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We contribute to economic development through our worldwide operations

In 2005-6 we collaborated with Oxfam to research the links between international business and poverty reduction. We’re now working with INSEAD and African NGOs to measure our impacts in Africa

These include projects to create incomes… for poor farmers and unemployed people

In Kenya, we are leaders members of the Business Alliance for Chronic Hunger (BAACH) helping increase farmer incomes and develop local capacity building. We provide a guaranteed market for herbs and spices for manufacture of our local brands. In Indonesia we are working with rice farmers to help them develop a second income by growing black soy beans needed for our Kecap Bango

• brand. We provide them with a

guaranteed market, technical assistance and access to finance.

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To reach new consumers in rural India

Most generate profit of US$15-22 a month – typically doubling household incomes. Financial independence has resulted in increased self-esteem, greater empowerment - and more daughters being educated. To reach 70 million new consumers in rural villages our Indian business has recruited 40,000 women as door-to-door sales

• distributors. The women are trained in

business and marketing skills and obtain micro-credit from local banks and self-help groups.

we’ve trained 40,000 women entrepreneurs Our community activities involve 40,000 employees

In 2005 we contributed c. €79 million to community projects – equivalent to 1.7% of pre-tax profits – benefiting 12,000 community organisations

and benefit 140 million people

Environmental projects include cleaning up the River Brantas in Indonesia and planting java noni trees whose fruit generate incomes for local people Social projects include the Lifebuoy Friendship floating hospital in Bangladesh which provides free healthcare to 30,000 river people a year HIV/AIDS projects include buying houses in South Africa where children orphaned by AIDS can stay in their communities with trained foster mothers

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Our work with WFP focuses on:

• School Feeding Programmes
• Cause-related marketing led by our

Family Goodness brand Our work with UNICEF focuses on:

• Latin America – Complementary Feeding
• Africa: Fortification with micro-nutrients &

promoting hand washing with children

• India: Providing safe drinking water in schools &

Partnership for Child Nutrition

Where possible we work in partnership with

• thers….

Unilever’s strategic partnerships include UNICEF, WFP, WWF, WHO, the World Heart Foundation, FDI World Dental Federation, WSUP & World Bank: Global Public-Private Partnership for Hand washing with Soap

focusing on nutrition & hygiene programmes Conclusion: Business Rationale

We believe Our Vitality Mission and integration of social and environmental issues into our brands and business will:

• 1. Fuel innovation
• 2. Help us win with customers
• 3. Help us win in D&E markets
• 4. Address consumers’ needs as citizens
• 5. Differentiate and build the Unilever brand