Unilever Q3 and Year to Date 2007 Results · • Acquired Buavita fruit drinks in Indonesia •...

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Jim Lawrence Chief Financial Officer John Rothenberg SVP Investor Relations 1 st November 2007 Unilever Q3 and Year to Date 2007 Results Highlights • Sustained underlying sales growth • Underlying improvement in operating margin • Accelerated change programme • Organisational simplification • Supply chain rationalisation • Portfolio development

Transcript of Unilever Q3 and Year to Date 2007 Results · • Acquired Buavita fruit drinks in Indonesia •...

Page 1: Unilever Q3 and Year to Date 2007 Results · • Acquired Buavita fruit drinks in Indonesia • Agreed extension of Lipton RTD JV with Pepsi Co • Announced intention to dispose

Jim Lawrence Chief Financial Officer

John RothenbergSVP Investor Relations

1st November 2007

UnileverQ3 and Year to Date 2007 Results

Highlights

• Sustained underlying sales growth

• Underlying improvement in operating margin

• Accelerated change programme

• Organisational simplification

• Supply chain rationalisation

• Portfolio development

Page 2: Unilever Q3 and Year to Date 2007 Results · • Acquired Buavita fruit drinks in Indonesia • Agreed extension of Lipton RTD JV with Pepsi Co • Announced intention to dispose

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

Strong organic growth

(3.0)%(2.3)%Currency effect

(0.8)%(0.9)%Acquisitions and disposals

3.9%2.3%Volume

1.4%2.1%Price

5.3%

1.3%

€30.3bn

YTD

4.5%*Underlying sales growth

1.2%Change

€10.2bnTurnover

Q3

*5.2% after adjusting for sales pull-forward in US

Page 3: Unilever Q3 and Year to Date 2007 Results · • Acquired Buavita fruit drinks in Indonesia • Agreed extension of Lipton RTD JV with Pepsi Co • Announced intention to dispose

33%

38%

29%

Underlying sales growth by region

AmericasQ3 YTD

USG 2.8%* 4.2%*4.9% after adjusting for sales

pull-forward in US

EuropeQ3 YTD

USG 0.7% 1.9%

Asia/AfricaQ3 YTD

USG 11.7% 11.4%

Underlying sales growth by category

34%

20%

28%

18%

Ice Cream and Beverages

Q3 YTDUSG (0.1)% 3.8%

Home CareQ3 YTD

USG 7.1% 6.3%

Savoury, Dressingsand Spreads

Q3 YTDUSG 6.6% 4.7%

Personal CareQ3 YTD

USG 3.8% 6.5%

Page 4: Unilever Q3 and Year to Date 2007 Results · • Acquired Buavita fruit drinks in Indonesia • Agreed extension of Lipton RTD JV with Pepsi Co • Announced intention to dispose

Savoury, Dressings and Spreads

USG 4.7%6.6%

YTDQ3

Ice Cream and Beverages

USG 3.8%(0.1)%

YTDQ3

Page 5: Unilever Q3 and Year to Date 2007 Results · • Acquired Buavita fruit drinks in Indonesia • Agreed extension of Lipton RTD JV with Pepsi Co • Announced intention to dispose

Home Care

USG 6.3%7.1%

YTDQ3

Personal Care

USG 6.5%3.8%

YTDQ3

Page 6: Unilever Q3 and Year to Date 2007 Results · • Acquired Buavita fruit drinks in Indonesia • Agreed extension of Lipton RTD JV with Pepsi Co • Announced intention to dispose

Operating margin development: Year to date

(1.1)%(1.4)%(0.3)%Including RDIs

0.1%A&PKey drivers:

0.3%Change before these items

2.1%Savings(1.9)%Cost/price/mix

(0.8)%13.7%14.5%Operating margin

Change20072006

(1.3)%(2.1)%(0.8)%Including RDIs

0.4%A&PKey drivers:

0.2%Change before these items

2.4%Savings(2.6)%Cost/price/mix

(1.1)%13.7%14.8%Operating margin

Change20072006

Operating margin development: Q3

Page 7: Unilever Q3 and Year to Date 2007 Results · • Acquired Buavita fruit drinks in Indonesia • Agreed extension of Lipton RTD JV with Pepsi Co • Announced intention to dispose

Mitigating the impact of commodity costs

180

160150

10080

020406080

100120140160180200

2003 2004 2005 2006 YTD 2007

bps

Commodity cost impact on margin

Actions taken

• Price increases

• Reformulation

• Forward buying

• Buying savings

2007 outlook c.200 bps

2007 quarterly total savings (buying and other)

Savings and restructuring

0

50

100

150

200

250

300

Q1 Q2 Q3

€m

0

50

100

150

200

250

300

Q1 Q2 Q3

€m

2007 quarterly restructuring

2007 restructuring guidance: €700m to €1bn

Page 8: Unilever Q3 and Year to Date 2007 Results · • Acquired Buavita fruit drinks in Indonesia • Agreed extension of Lipton RTD JV with Pepsi Co • Announced intention to dispose

• Organisational simplification• Announced three further MCOs

- UK/Ireland- Germany/Austria/Switzerland - Central Africa

• Integration of North America Ice Cream• Consolidated businesses in South Africa and Israel

• Supply chain rationalisation• Affecting 10 sites

- UK, Netherlands, Spain, Sweden

• Portfolio development• Completed the sale of Spreads brands in Brazil• Acquired Buavita fruit drinks in Indonesia• Agreed extension of Lipton RTD JV with Pepsi Co• Announced intention to dispose of Boursin

Accelerating change –Progress to date

Drivers of YTD EPS growth

%

Underlying sales growth 5

Currency and disposals (4)

Operating margin pre-RDIs 2

RDIs* (8)

(5)

2Other**

7Preference share provision

(3)Discontinued operations

20EPS from continuing operations

3JVs, associates and non-current investments

9Tax rate

17EPS

4Finance costs

(5)Operating profit

%

*restructuring, disposals and impairments**minority interests, share buyback, etc.

Page 9: Unilever Q3 and Year to Date 2007 Results · • Acquired Buavita fruit drinks in Indonesia • Agreed extension of Lipton RTD JV with Pepsi Co • Announced intention to dispose

Balance sheet and cash flow

• Net debt €8.2bn

• Share buy-back: €1.1bn repurchased to end September

• Pension liability reduced to €0.8bn

• Cashflow from operating activities €3.5bn

UnileverQ3 and Year to Date 2007 Results

Page 10: Unilever Q3 and Year to Date 2007 Results · • Acquired Buavita fruit drinks in Indonesia • Agreed extension of Lipton RTD JV with Pepsi Co • Announced intention to dispose

Accelerating changeQuestions

Jim Lawrence Chief Financial Officer

John RothenbergSVP Investor Relations

1st November 2007

UnileverQ3 and Year to Date 2007 Results