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2006 Full Year Roadshow
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.
Handout version
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59Small&Mighty30Agenda for 2007
60Idea! from family Goodness
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Frusi
Dove Pro.Age
Ponds Age Miracle
New for 2007
Return on invested capital
Cash flow
Tax rate development
Commodity costs
Q4 operating margin
Operating margin
Key financials
2006 Financials
AdeZ
Lipton Tea Can Do That
Slim.Fast
Ice Cream and Beverages
Heart Health
Wishbone salad spritzers
Knorr bouillon
Savoury, Dressings and Spreads
Actigel tablets
Domestos with C-Tac
Home Care
Dove Summer Glow
Sunsilk North America
Dove Clear
Personal Care
Drivers of growth in 2006
55Progress on One Unilever
Delayered, simpler, more effective
57Simplification saves money
58Changing culture and behaviour
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54Simplification
53Brilliant consumer marketing
52Winning with customers
51Building capabilities
50Bigger, better innovation
49Better category strategies
Clear, distinct, complementary roles
47Unilever’s organisation
46Reshaping the portfolio – disposals
45The relentless rollout of Dirt Is Good
44Priorities driving growth
43Sales in D&E markets
42Unilever’s growth priorities
41Our portfolio
40Building blocks of change
39Strategy – change – performance
38Our long term ambition
372007 Outlook
36Uses of cash
35Drivers of EPS growth
34Operating margin
33Broad-based growth
Consistent growth
Unilever’s 2006 Results
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Consistent growth
0%
1%
2%
3%
4%
5%
6%
2002
2003
2004
2005
2006
Q1 2
005*
Q2 2
005
Q3 2
005
Q4 2
005*
Q1 2
006
Q2 2
006
Q3 2
006
Q4 2
006
* Days adjusted
Underlying sales growth
3
Broad-based growth
Europe
Americas
Asia/Africa
Total
1.0
3.7
7.7
3.8
Foods
Savoury, Dressings and Spreads
Ice Cream and Beverages
HPC
Home Care
Personal Care
2.6
3.7
2.3
6.3
2006 Underlying sales growth (%)
4
Operating margin
Including:
Key drivers:
(0.3)%A&P
(0.3)%Change before these items
2.3%Savings
(2.3)%Cost/price/mix
(0.1)%-0.1%- Q2 2005: property sale
0.7%0.7%-- Q4 2006: US health care, UK pensions
0.2%(1.3)%(1.5)%- RDIs
0.4%13.6%13.2%Operating margin
Change20062005
5
Drivers of 2006 EPS growth
Operating profit 7
Interest and pensions financing 4JVs and associates 2Tax rate 4Preference share provision (6)
EPS growth from continuing operations 11
Discontinued operations 16
Total EPS growth 27
(%)
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Uses of cash
0
1
2
3
2001 2002 2003 2004 2005 2006
Cas
h to
sha
reho
lder
s (€
bn)
0
5
10
15
20
25
Net debt (€bn)
Dividends Share buyback One-off dividend Net debt
Net debt
Share buyback of €1.5bn planned for 2007
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Outlook 2007
• Little change to the business environment
• Underlying sales growth within 3-5% range
• Commodity cost increases easing
• Operating margin above 13.6%
• Restructuring in the 50 -100bps range
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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
Our long term ambition
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Building blocks of change
• A strategy for growth - concentrating resources behind growth opportunities
• An organisation to support the strategy
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Our 12 €1bn+ brands
World Number 1
World Number 2
Local strength
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
Our portfolio
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Build strength in high growth
spaces
Drive leadership
positions in key markets
Focusing resources behind business priorities
Vitality D&EPersonal Care
Unilever’s growth priorities
Building a winning portfolio
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Sales in D&E markets
38%
26%
36%
34%
25%
41%
As % of total turnover
D&E Western Europe
Other Developed
2004 2006
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Priorities driving growth
Underlying sales growth 2006
D&E8%
Deodorants11%
Personal Care6%
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The relentless rollout of Dirt Is Good
0
1
2
3
2004 2006
€bn
Brazil
Turkey
Latin America
Europe
Asia AMET
5%+ USG in 2006
€450m
€2.5bn
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Reshaping the portfolio - disposals
2005
Unilever Cosmetics InternationalFrozen pizzas (Europe)
Cooking oils (UK, Ireland, South Africa)
Karo corn syrup (Mexico)
2006
European Frozen FoodMora frozen snacks
(Netherlands)Finesse and Aquanet hair brands
(US, Canada)Friol cooking oil (Italy)
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CEO
Asia/AfricaAmericas Europe
Foods
HPC
Finance
HR
Unilever’s organisation
Categories Functions
Regions
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CategoriesDeliver global platforms
Responsible for:Brand development
InnovationResearch and Development
Accountable for:Medium/long term market share
Brand healthInnovation metrics
Category value creation
Clear, distinct, complementary roles
RegionsExecute on the ground
Responsible for:Managing the business
Deploying brands and innovationsCustomer management
Accountable for:GrowthProfit
Cash flowsShort term market shares
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Better category strategies, better mixes, faster delivery
Portfolio development – US Hair
Powerful portfolio Fragmented portfolio
Big brands, global resourcesWeak brands, managed locally
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Bigger, better innovation
Fewer, bigger innovation projects in the funnel
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Building capabilities
Firstchoice for our
customers
Shopper and
customer solutions
Every day great
execution
CustomerService
Excellence
World Class Customer
Development
Winningat Point of Purchase
BuildingBrandsThrough
Customers
Strategic Investing
For Growth
Firstchoice for our
consumersEvery day
great execution
Innovation capability
improvements
World Class
Brands
IntegratedBrand
Communication
Brand activation capability
Brand Planning Toolset
Unique and relevant
innovation
RegionsWin With Customers
CategoriesBrilliant Consumer
Marketing
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Brilliant consumer marketing
Winner of 37 Lions at the 2006 Cannes International Advertising Festival
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Simplification
600
700
800
900
1000
1100
1200
2004 2005 2006
Top management numbers
c. 30% headcount reduction
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0% 20% 40% 60% 80% 100%
Regional sharedservices
Back officeintegration
One sales force
Single head office
One top team
Completed Announced
Progress on One Unilever – Top 20 countries
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Delayered, simpler, more effective
20062004
One Unilever in China
c.10% growth c. 30% growth
Unilever Ice Cream China
Unilever Foods China
Unilever HPC China
HPC Division
Foods Category
Unilever China
HPC Category
President Asia/Africa
Foods Division
Foods Asia Business
Group
HPC Asia Business
Group
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Simplification saves money
0100200300400500600700800900
1000
Q1 Q2 Q3 Q4
€m
Procurement One Unilever and other
2006 Cumulative savings
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Changing culture and behaviour
• Global mindset
• Real accountability
• External orientation
• Action not debate
• Team alignment
• Build talent
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Agenda for 2007
Grow• Competitively – to gain market share
• Profitably – better margin development, further simplification
• Consistently
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A patented combination of translucent anti-perspirant ingredients that are unbeatable against white marks, while delivering protection and a light, fresh fragrance.
Dove Clear
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$200m national launch of the brand to solve your hair dramas
Sunsilk North America
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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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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
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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
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A range of bouillons with carefully selected ingredients.
Because good food deserves Knorr
Knorr bouillon
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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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Omega 3 plusPacked with more omega 3
than any other spread or minidrink
pro.activSpreads, milk, yoghurt and mini-drinks clinically proven to lower cholesterol
Heart Health
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New improved Slim.Fast: delays the absorption of fat in the gut resulting in stronger ‘satisfaction signals’ to the brain, making you
feel fuller for longer
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Lipton’s unique combination of health benefits, with antioxidants to fight free radicals
Lipton Tea Can Do That
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AdeZ - a Healthy Drink that combines the Goodness of Soya with the Refreshment ,Taste & Health from Fruit Juice!
AdeZ soya drinks
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Key financials
11%22%EPS growth (continuing operations)
€4.2bn€4.0bnUngeared free cash flow
14.6%12.5%ROIC
27%37%EPS growth (total)
(30)bps(90)bps“Underlying” movement*
13.6%13.2%Operating margin3.8%3.1%Underlying sales growth20062005
*Before restructuring, disposals and impairments and 2006 gains on US health care and UK pensions
and 2005 profit on office sale
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Operating margin
Including:
Key drivers:
(0.3)%A&P
(0.3)%Change before these items
2.3%Savings
(2.3)%Cost/price/mix
(0.1)%-0.1%- Q2 2005: property sale
0.7%0.7%-- Q4 2006: US health care, UK pensions
0.2%(1.3)%(1.5)%- RDIs
0.4%13.6%13.2%Operating margin
Change20062005
51
Q4 Operating margin
Including
0.1%Change before these items
2.7%2.7%-- Q4 2006: US health care, UK pensions
(2.3)%(4.3)%(2.0)%- RDIs
0.5%10.9%10.4%Operating margin
Change20062005
Features:• Commodity cost inflation• A&P 0.5% lower – different phasing to last year• Investment in market research and development • Continued contribution from savings
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Commodity costs
0
100
200
300
400
500
600
700
2003 2004 2005 2006
€m
Annual commodity cost impact
Outlook 2007
Further increase, but by less than 2006:
– HPC more favourable
– Foods continue to rise
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Outlook
Long term c. 26%
2007 c. 24%
Tax rate development
20%
25%
30%
35%
2001
2002
2003
2004
2005
2006
Reported tax rate except:2001-2004 (pre-IFRS beia)
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Cash flow
0
1
2
3
4
5
6
2002* 2003* 2004 2005 2006
€bn
* pre IFRS
Ungeared free cash flow
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Return on invested capital
9%
11%
13%
15%
2002* 2003* 2004 2005 2006
Reported Excluding disposal of discontinued operations* pre IFRS
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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-moreconcentrated laundry detergent
A new breakthrough product with perceivably better cleaning, andbetter convenience, at the same price per wash
Cleans a whole wash-load with just one small capful
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Idea! from Family Goodness
The first margarine to contain nutrients that support mental development
A low-fat spread that is a rich source of selected brain nutrients (DHA, ALA, B-vitamins)
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Great taste without the guiltA unique combination of frozen
yogurt, real fruit pieces and wholegrain cereals, with less than
3g of fat per pot
Frusi