Unilever Q4 and 2007 Full Year Roadshow Handout version 0 - - PDF document

unilever q4 and 2007 full year roadshow
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Unilever Q4 and 2007 Full Year Roadshow Handout version 0 - - PDF document

Unilever Q4 and 2007 Full Year Roadshow Handout version 0 Unilever Q4 2007 Results Highlights 4 Drivers of Growth 26 Strong Organic Growth 5 Clear 27 Growth by Region 6 Ponds Age Miracle 28 Growth by Category 7 Dove Pro.Age 29


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Unilever Q4 and 2007 Full Year Roadshow

Handout version

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18 Business Priorities 36 31 Domestos Zero Limescale 9 2007 Operating Margin 37 32 17 Balance Sheet and Cash Flow 16 Lipton Linea Drivers of EPS Growth 28 Ponds Age Miracle 6 Growth by Region 26 Drivers of Growth 4 Highlights 23 Our Growth Priorities 27 Clear 5 Strong Organic Growth 11 24 22 19 15 13 12 10 8 7 Moo and Milk Time Hellmann’s Light Heart Health Knorr Bouillon Gel Knorr Eat Colour Soups Small & Mighty in Europe Dove Pro.Age Aligned Organisation Our Portfolio Delivering Long Term Objectives 2008 Outlook Accelerating Change – Progress to Date 35 Accelerated Restructuring Programme 34 Commodity Costs – Edible Oils 33 Commodity Costs Q4 Operating Margin 30 Innovation Driving Growth 29 Growth by Category

Unilever Q4 2007 Results

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Safe Harbour Statement

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. Words such as 'expects', 'anticipates', 'intends' or the negative of these terms and other

similar expressions of future performance or results, including financial objectives to 2010, 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, consumption levels, costs, the ability to maintain and manage key customer relationships and supply chain sources, currency values, interest rates, the ability to integrate acquisitions and complete planned divestitures, 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 Annual Report & Accounts on Form 20-F. These forward-looking statements speak only as of the date of this presentation

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Highlights

  • Third consecutive year of accelerating growth
  • Underlying margin improvement
  • Accelerated restructuring programme
  • Shaping the portfolio
  • Organisational simplification
  • Supply chain rationalisation
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0% 1% 2% 3% 4% 5% 6% 7% Q1 2005* Q2 2005 Q3 2005 Q4 2005* Q1 2006 Q2 2006 Q3 2006 Q4 2006 Q1 2007 Q2 2007 Q3 2007 Q4 2007

Strong Organic Growth

* days adjusted

Underlying sales growth

Annualised growth rate

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33% 38% 29%

Underlying Sales Growth by Region

Americas

Q4 2007 USG 3.7% 4.1%

Europe

Q4 2007 USG 5.5% 2.8%

Asia Africa

Q4 YTD

USG 10.0% 11.1%

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Underlying Sales Growth by Category

35% 19% 28% 18%

I ce Cream and Beverages

Q4 2007 USG 5.7% 4.2%

Home Care

Q4 2007 USG 5.6% 6.1%

Savoury, Dressings and Spreads

Q4 2007 USG 5.8% 5.0%

Personal Care

Q4 2007 USG 7.2% 6.7%

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Innovation Driving Growth

Rapid roll-outs across key markets Vitality-focused innovation Faster deployment of new technologies Better transfer of mixes

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Operating Margin Development: 2007

(0.7)% (1.4)% (0.6)% Including RDIs* 0.0% A&P Key drivers: 0.2% Underlying change 2.4% Savings (2.2)% Cost/price/mix (0.5)% 13.1% 13.6% Operating margin Change 2007 2006

* Restructuring, disposals and one-off items (2006 gains on US health care and UK pensions)

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0.0% (1.6)% (1.6)% Including RDIs* (0.6)% A&P Key drivers: 0.2% Underlying change 3.2% Savings (2.4)% Cost/price/mix 0.2% 11.1% 10.9% Operating margin Change 2007 2006

Operating Margin Development: Q4

* Restructuring, disposals and one-off items (2006 gains on US health care and UK pensions)

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Commodity Costs

330 260 160 120 220 160 150 100 80

50 100 150 200 250 300 350

2003 2004 2005 2006 2007 Q1 07 Q2 07 Q3 07 Q4 07

bps

Commodity cost impact on margin Outlook: ≥ rate of Q4 2007 well into 2008

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Commodity Costs – Edible Oils

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Accelerated Restructuring Programme

* completed 1 Jan 2008

Shaping the portfolio

Disposal Underway

NA Laundry

Acquisitions

Indonesia Fruit Drinks Russia Ice Cream

Disposals completed/ announced

*

Brazil Spreads Brands US Seasonings France Cheese

JV Extended

Global RTD Tea

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Accelerated Restructuring Programme

  • Organisational simplification
  • 14 MCOs in place
  • Announced 4 new MCOs in Europe
  • Belgium, Netherlands, Luxembourg
  • UK, Ireland
  • Germany, Austria, Switzerland
  • Czech Republic, Hungary
  • Supply chain rationalisation
  • Streamline or closure of 10 sites
  • UK, France, Spain, Sweden, Netherlands
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Accelerating Change – Progress To Date

  • Savings
  • Target of €1.5bn reduction p.a. by end 2010
  • Achieved €0.3bn in 2007
  • Other savings realised via buying and local efficiency programmes takes

total savings to €1bn

  • Restructuring Costs
  • Target of c. 250bps p.a. over 2007-2009: c. €1bn p.a., €3bn total
  • €875m charged in 2007, cash outflow of c. €700m
  • c. €1bn restructuring charges expected in 2008
  • Headcount Reduction
  • Target of 20,000 reduction by end of 2010
  • 5,000 reduction achieved during 2007
  • Turnover per employee up by 10% in 2007
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Drivers of EPS Growth

% Underlying sales growth 5 Currency and disposals (4) Operating margin pre-RDIs 2 RDIs* (6) (3)

2 Other** 5 Preference share provision (30) Discontinued operations 12 EPS from continuing

  • perations

1 JVs, associates and non- current investments 4 Tax rate (18) EPS 3 Finance costs (3) Operating profit %

*Restructuring, disposals and one-off items (2006 gains on US health care and UK pensions) **Minority interests, share buyback, etc.

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Balance Sheet and Cash Flow

  • Competitive balance sheet – ‘strong single A’
  • Cash flow from operating activities €5.2bn
  • Net debt €8.3bn
  • €1.5bn share buy-backs completed in 2007
  • 2008 share buy-back programme ≥ €1.5bn
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Business Priorities

  • 1. Maintain competitiveness
  • 2. Drive for sustainable margin improvement
  • 3. Invest selectively to gain market share
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2008 Outlook

2008 to mark a further step towards our 2010 goals

  • 2010 goals
  • Operating margin > 15%
  • Consistent, competitive growth at 3-5% p.a.
  • I n 2008
  • Underlying sales growth towards top end of 3-5% range
  • Further underlying improvement in operating margin
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Strategy

Delivering long term objectives

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22 World Number 1 World Number 2 Local strength

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

Our portfolio

Our 12 €1bn+ brands Leading Category Positions

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Our Growth Priorities

Deodorants, Skin, Hair Savoury, Ice Cream, Tea Vitality within Foods D&E: Foods, Home Care Russia and China

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Disciplined execution, speed, effectiveness Unilever Executive

Corporate strategy Portfolio priorities Performance management

Regions

Go to market Customer management

Categories

Brand and category strategies

Innovation R&D

Functions

Functional excellence Business support Simplification

Aligned Organisation

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Drivers of growth

Innovation

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Clear

Complete antidandruff and scalp care regime Centrally developed, identically presented simultaneously across China, Brazil, Russia, Arabia and Turkey

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Ponds Age Miracle

Skin that looks and feels younger A revolutionary range of anti- ageing products designed specifically for the needs of Asian skin

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Dove Pro.Age

Beauty has no age limit The first collection of hair, skin and deodorant beauty products designed to reflect the unique needs of women in their later years

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Small & Mighty in Europe

A revolutionary 3-times-more concentrated laundry detergent A new breakthrough product with perceivably better cleaning, and better convenience, at the same price per wash Cleans a whole wash-load with just

  • ne small capful
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Domestos Zero Limescale

A powerful, superior performance limescale remover Completely destroys tough, germ-filled limescale Three times thicker than any other product on the market, it grips to limescale even on vertical surfaces and under the water line, so it keeps on working

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Knorr Eat Colour Soups

‘Colour is a sign of goodness in nature, so the more colour you eat, the better it is for you’

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Knorr Bouillon Gel

Launched in China with local insight into soup preparation

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Omega 3 plus Packed with more

  • mega 3 than any other

spread or minidrink pro.activ (Promise activ) Spreads, milk, yoghurt and mini-drinks clinically proven to lower cholesterol

Heart Health

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Hellmann’s Light

With unique citrus fibre technology

Delicious light mayonnaise with only 5% fat

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Moo and Milk Time

+ +

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

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Lipton Linea

A unique slimming tea twice as rich in catechins to help maintain your silhouette