unilever q2 2010 results

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Q2 2010 Results 5 th August 2010 Paul Polman (CEO) – Jean-Marc Huët (CFO) James Allison (Head of IR & M&A)

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Presentation from the Unilever Q2 2010 financial results webcast

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Page 1: Unilever Q2 2010 results

Q2 2010 Results 5th August 2010

Paul Polman (CEO) – Jean-Marc Huët (CFO)

James Allison (Head of IR & M&A)

Page 2: Unilever Q2 2010 results

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  1995.  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 2009. 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.

Page 3: Unilever Q2 2010 results

Priorities for 2010

• Continue to drive profitable volume growth

• Steady and sustainable improvement in full year 

underlying operating margin

• Strong cash flow

Page 4: Unilever Q2 2010 results

Building Momentum in Tough Markets

• Volume share up around 50 bps

• Winning in emerging markets where competitive 

intensity is highest

• Developed markets remain tough

• Investing for the long term with A&P up 

considerably

• A new stronger Unilever is emerging

Page 5: Unilever Q2 2010 results

Jean-Marc Huët Chief Financial Officer

Page 6: Unilever Q2 2010 results

Q2 10: Strong Top Line Growth

8.7%

-0.1%

5.7%-2.0%

USG 3.6%

€11.8bn

€10.5bn

Page 7: Unilever Q2 2010 results

H1 10: Underlying Sales Growth

5.6%

0.0%

6.6%-2.6%

USG 3.8%

€21.9bn

€20.0bn

Page 8: Unilever Q2 2010 results

Q2 10: Improved Pricing

2nd quarter of flat pricing at

group level

Page 9: Unilever Q2 2010 results

Q2 10: Improved Pricing

Price growth -2.6% YTD

Page 10: Unilever Q2 2010 results

Q2 10: Underlying Volume Growth

Underlying Volume Growth

6.6% YTD

Page 11: Unilever Q2 2010 results

Volume Growth is Broad Based

Categories11 / 11

MCOs18 / 22

Top Brands12 / 13

   

Page 12: Unilever Q2 2010 results

Q2 10: Volume Growth by Region

Western Europe

Americas

Asia/AMET/CEE

Emerging Markets

Page 13: Unilever Q2 2010 results

Q2 10: Strong Volume Sharesbps change

12-week volume share change vs. prior year

Page 14: Unilever Q2 2010 results

Turkey Home Care

Indonesia Personal Care

BrazilHome Care

Continued strengthening of our share positions

Winning Where Markets are Toughest

10% 13%42% 45% 52% 53%

Market Value Share Difference

Page 15: Unilever Q2 2010 results

China Savoury

China Home Care

China Personal Care

Market Value Share Difference

China: Narrowing the Gap to Market Leaders

20% 16%11% 4%

24% 22%

Page 16: Unilever Q2 2010 results

Q2 10: A&P Continued Investment

A&P change (bps)

We will lap high comparators

during Q3 and Q4 2010

Full year A&P will be up

Page 17: Unilever Q2 2010 results

H1 10: Strong Savings Continue

Local efficiency€0.1bn

Restructuring€0.2bn

Buying€0.4bn

• H1 Savings

€0.7bn

• Full year savings

ahead of €1bn

Page 18: Unilever Q2 2010 results

Q2 10: Continued Gross Margin Improvements

Gross Margin Improvement

180bps YTD

Page 19: Unilever Q2 2010 results

H1 10: Underlying Operating Margin

+30bps

Page 20: Unilever Q2 2010 results

H1 10: Earnings Per Share

€0.52

€0.70

Fully Diluted EPS Growth

36%

Page 21: Unilever Q2 2010 results

Third Consecutive Quarter of Negative Trading Working Capital

Q1 ‘09 Q2 ‘09 Q3 ‘09 Q4 ‘09 Q1 ‘10 Q2 ‘10

MAT Average WC % T/over

Closing WC % T/over

Page 22: Unilever Q2 2010 results

H1 10: Free Cash Flow

Free Cash Flow = Net Cash Flow from Operating Activities – Net Interest – Net Capex

Page 23: Unilever Q2 2010 results

Balance Sheet

• Net debt at €7.6bn, up from €6.4bn at end 2009

– €1.4bn adverse effect of exchange rates

• Pension deficit €4.0bn, from €2.6bn

– €1bn from lower corporate double A bond rates

• Cash contributions to pensions in the first half of

around €350m

• Quarterly dividend of €0.208 per NV share

Page 24: Unilever Q2 2010 results

Paul Polman Chief Executive Officer

Page 25: Unilever Q2 2010 results

Strategic Framework

The Compass

Winning with brands and innovation

Winning in the marketplace

Winning through continuous improvement

Winning with people

Page 26: Unilever Q2 2010 results

Winning with Brands and Innovation

Innovation Rate Ahead of 2009

33%

H1 2010

• Highest ever

innovation rate

• Led by Personal

Care

Page 27: Unilever Q2 2010 results

Winning with Brands and Innovation

Innovation Rate Ahead of 2009

Page 28: Unilever Q2 2010 results

Winning with Brands and Innovation

Innovating Category Wide: Hair

TIGI “Sleek Mystique”US

Sunsilk Relaunch Dove Damage Expert

Page 29: Unilever Q2 2010 results

Winning with Brands and Innovation

Innovation in Action - Nigeria

ORAL CARE HOME CARE

SAVOURY

Page 30: Unilever Q2 2010 results

SureIndia

LifebuoyBrazil / Bolivia / Peru / Australia

Winning with Brands and Innovation

Q2 10: Brands Into New Markets

Page 31: Unilever Q2 2010 results

Walls FruttareThailand / Malaysia / Singapore

Winning with Brands and Innovation

Q2 10: Brands Into New Markets

TIGIIndia / Brazil

Page 32: Unilever Q2 2010 results

Winning with Brands and Innovation

Q2 10: Brands Into New Markets

CIFVietnam

PepsodentPhilippines

Page 33: Unilever Q2 2010 results

Winning with Brands and Innovation

White Spaces: a Growth Opportunity

Key Countries

Page 34: Unilever Q2 2010 results

Reshaping the Portfolio

Sara Lee completion expected in Q4’10

– Brunch brand disposal completed– Du Darfst licensing under way

Disposal of Findus Italy announced

Disposal of Palm Oil Plantation in Ghana

Page 35: Unilever Q2 2010 results

Winning in the Marketplace

Customer Insight and Innovation CentreParis Now Open. Roll-out will Continue

On-Shelf Availability Continues to Improve

+290 bps

Sao Paolo – 2010

Paris – LIVE

Shanghai – 2010

Singapore – 2010

Englewood Cliffs - LIVE London Leatherhead - LIVE

Page 36: Unilever Q2 2010 results

Winning with People

Organisation and Culture

More

Stretch

More

Differentiation

• More agile organisation

• Key new roles in place

– Supply Chain Officer

– Customer Officer

– Marketing Officer

• Building capability

– Enterprise Support

• New reward system in place

Page 37: Unilever Q2 2010 results

Priorities for 2010

• Continue to drive profitable volume growth

• Steady and sustainable improvement in full year 

underlying operating margin

• Strong cash flow

Page 38: Unilever Q2 2010 results

Questions

Page 39: Unilever Q2 2010 results

Q2 10: Underlying Operating Margin

+10bps

Page 40: Unilever Q2 2010 results

H1 10: Free Cash Flow

Free Cash Flow = Net Cash Flow from Operating Activities – Net Interest – Net Capex

Net Cash Flow from Operating Activities€2.2bn

€3.1bn €0.5bn €0.6bn

€0.5bn

€0.2bn €0.1bn€0.8bn

€1.3bn

€0.2bn