Introduction to Unilever
February 2008
0
Contents
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•
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•
•
•
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Overview of Unilever
Mission
Geographic reach
Categories and brands
Strategic priorities
Management & organisation
Social responsibility
Customer partnerships
3-4
5
6-7
8
9-11
12-13
14-15
•
Innovation driving growth
16-23
•
Local roots and global scale
24-33
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•
•
Financial summary
10 year financial history
Commitment to shareholder value
34-40
41-44
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Legal structure, governance and shares 45-51
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Contact information
52
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. 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.
Our mission
Adding Vitality to life
150 million times a day, in 150 countries, people use our products at key
moments of their day
Scale and geographic reach
“Our deep roots in local cultures and markets around the world give us our strong
relationship with consumers and are the foundation for future growth. We will bring our
wealth of knowledge and international expertise to the service of local consumers - a truly
multi-local multinational” - extract from Unilever’s Corporate purpose
Europe | €15bn | 38%
The Americas | €13bn | 33%
Asia/Africa | €12bn | 29%
Present in 150 countries around the world
174,000 employees*
*as at end 2007
2007 Turnover €40billion
Strong category positions
Unilever’s Portfolio of Categories
Home Care
Savoury, Dressings &
Spreads
Leading Category Positions
World Number 1
Savoury
Dressings
Ice Cream
Deodorants
18%
28%
35%
19%
Spreads
Tea
Mass Skin
World Number 2
Laundry
Daily Hair Care
Personal Care
Ice Cream &
Beverages
Local strength
Household Cleaning
Oral Care
Big global brands
12 “billion € brands”
Top 25 brands = ¾ of Unilever’s sales
Unilever’s strategic priorities
Personal Care
D&E
Vitality
A global management team
Group Chief Executive
P. Cescau
Non-Executive
Chairman
M. Treschow
President
President
President
President
President
Americas
Europe
Asia Africa
HPC
Foods
M. Polk
K. Van der Graaf
H. Manwani
R. Kugler
V. Banga
CHRO
S. Ogg
CFO
J. Lawrence
Regions and Categories Clear, distinct, complementary roles
Categories
Regions
Deliver global platforms
Execute on the ground
Responsible for:
Brand development
Innovation
Research and Development
Responsible for:
Managing the business
Deploying brands and innovations
Customer management
Accountable for:
Medium/long term market share
Brand health
Innovation metrics
Category value creation
Accountable for:
Growth
Profit
Cash flows
Short term market shares
Our people
People are the heart of our business
Harnessing, developing and rewarding their skills, energy and
commitment is our priority
Unilever is one of the world’s most culturally diverse
companies, with top leadership from 21 nations.
More than 30% of managers
worldwide are women.
Corporate responsibility
To succeed also requires, we believe, the highest standards of corporate
behaviour towards everyone we work with, the communities we touch, and the
environment on which we have an impact
• Eco-efficiency – reducing the impacts of our operations
• Eco-innovation – reducing the impacts of our products
• Sustainability programmes in agriculture and water
• Our Code of Business Principles
• Supporting local communities
Unilever has led the food industry category of the Dow
Jones Sustainability Indexes (DJSI) for the past 9 years.
Products with less environmental impact
Use less water
Reduce product carbon footprint
Create less packaging
Sustainable Agriculture
Customer partnerships
• Unilever manages a number of partnerships globally
Customer partnerships
Unilever has unparalleled reach across the store, bringing unique ‘shopper
insight’ to our partnership with customers
Innovation driving growth
Transfer of
Mixes
Rapid Roll-Out
Vitality
Proprietary Technology
Rapid roll-out: Clear
Complete antidandruff and scalp care regime
Centrally developed and launched simultaneously across 7 countries
Rapid roll-out: Small & Mighty
A revolutionary concentrated
laundry detergent rolled out across
North and Latin America and Europe
Cleans a whole wash-load with just
one small capful
Proprietary technology: Pond’s Age Miracle
Skin that looks and feels younger
A revolutionary range of anti-ageing products designed specifically for the
needs of Asian skin
Strategy
Proprietary technology: Hellmann’s Light
Delicious light mayonnaise with
only 5% fat
With unique citrus fibre
technology
Vitality: Lipton
Lipton’s unique combination of health benefits,
with antioxidants to fight free radicals
Vitality: Knorr Soups
‘Colour is a sign of goodness in nature, so the more
colour you eat, the better it is for you’
Transfer of Mixes: Axe in Japan
Axe achieves great success across diverse markets
Local roots
and global scale
The D&E opportunity
• The world population is set to grow by 800m by 2010:
almost all of the increase will be in the developing world
• By 2010 nearly 90% of world population will be in D&E
• Consumer spending is growing faster in D&E than in the
developed world
• Rising per capita income gives disproportionate growth in per
capita consumption for Unilever categories
The D&E opportunity
D&E Population in 2007
(billions)
Have lots
0.5
Haves
2.6
Have nots
2.6
The opportunity in our categories
Annual per capita consumption (€)
16.8
4.9
4.4
8.9
Detergents
U
SA
Br
az
il
0.7
In
do
ne
si
a
a
0.7
C
hi
n
In
di
a
U
SA
0.2
Br
az
il
In
do
ne
si
na
C
hi
a
di
In
1.4
a
1.6
1.0
Shampoo
Source: Euromonitor 2006/7
A big foods opportunity
Packaged foods
22%
Non-packaged foods
78%
Source: Unilever estimates
% of Foods market in Asia Africa
A major driver of Unilever’s growth
D&E underlying sales growth c. 8% p.a. since early 1990s
% 2004 Sales
Other developed
3%
North
America
23%
Western
Europe
38%
% 2007 Sales
Other developed
3%
D&E
36%
North
America
21%
Western
Europe
32%
D&E
44%
D&E growth is profitable
2007 Operating margin before RDIs*
Unilever
average
Developed
D&E
D&E excl.
Russia & China
*Restructuring, Disposals, One-off Items
Local roots with global scale
Our heritage and local expertise
mean that D&E is in our DNA
• Understanding of the local
consumer
Leveraging our scale brings us
advantages over local competition
• Global portfolio of brands and
categories
• Brands and products across a wide
range of income levels
• Dedicated R&D investment
• Critical mass on the ground
• Shared values and standards of
behaviour
• Corporate reputation with local
stakeholders and talent pool
Local roots
Global scale
Building D&E markets
Building markets by
driving penetration
Knorr mini cubes
Shampoo sachets
Low price fabric
cleaning sachets
Rexona deodorant
mini-sticks
Small soap bars with
proven germ protection
Packet Tea
Building markets by
up-trading
Shampoo
Tea Bag
Conditioning & Styling
Basic Clean
Surf Excel Automatic
Micro-marketing in D&E
Understanding our consumers - customising brand activation
Financial performance
10 year history
Note: From 2005, Unilever has fully adopted International Financial
Reporting Standards (IFRS). Information on this change can be found in
the FAQ section of the Investor Centre at www.unilever.com.
In the following section, historic trends are shown on a pre-IFRS basis for
the period 1996-2003. For 2004, both pre-IFRS
and IFRS bases are shown. This section includes
non-GAAP measures. Definitions of these, and
reconciliations to the GAAP measures can be
found in the Investor Centre at www.unilever.com.
Underlying sales growth
Sales growth, excluding acquisitions, disposals, and exchange rate movements
6
5
%
4
3
2
1
0
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
Operating margin
16
14
% turnover
12
10
8
6
4
Operating margin beia/ before RDI
2
Operating margin
0
1997 1998 1999 2000 2001 2002 2003 2004
Includes restructuring, disposals and impairments and one-off gains:
2005 asset sale and 2006 US health care, UK pensions
2004 2005 2006 2007
IFRS
(4.6)% (1.5)% (0.6)% (1.4)%
Capital efficiency
40
35
Fixed assets
Working capital
as % turnover
30
25
20
15
10
5
0
1997 1998 1999 2000 2001 2002 2003 2004 2004 2005 2006 2007
IFRS
Return on invested capital
20
18
16
14
12.7
%
12
10
8
8.3
6
Excluding disposal of
discontinued operations
4
2
0
1997 1998 1999 2000 2001 2002 2003 2004 2004 2005 2006 2007
IFRS
Cash flow
9
8
7
€bn
6
5
4
3
2
2.4
1
0
1997
1998
1999
2000
Cash flow from operating activities
2001
2002
2003
2004
Ungeared free cashflow
2004
IFRS*
2005
2006
2007
*IFRS 2004 onwards:
includes P&L charges for stock options and pensions
Net profit
5
4
€bn
3
2
1
Net profit from continuing operations
Net profit excl profit on disposal of
discontinued operations
0
1997
1998
1999
2000
2001
2002
2003
2004
2004
IFRS
2005
2006
2007
Note: 1997 adjusted to exclude exceptional items, incl. profit on sale of chemicals.
Reported net profit for 1997 was € 5.0bn
Dividends
€ per NV share
CAGR +8% pa
1
£ per PLC share
CAGR +10% pa
20
07
20
06
20
05
20
04
20
03
20
02
20
01
20
00
19
99
19
98
19
97
20
07
20
06
20
05
20
04
20
03
20
02
20
01
20
00
19
99
19
98
19
97
20
07
20
06
20
05
20
04
20
03
20
02
20
01
20
00
19
99
0
19
98
19
97
0
$ per NV share
CAGR +11% pa
Note: based on new shares following split and consolidation on 19 May 2006
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Indexed
Share price vs market index
10 year history
300%
Unilever NV NY
10 year CAGR
+9% pa
250%
200%
150%
100%
S&P 500
10 year CAGR
+6% pa
50%
0%
Commitment to shareholder value
“… our road to sustainable, profitable growth, creating long term value for
our shareholders, our people, and our business partners”
extract from Unilever’s Corporate purpose
Unilever measures its Total Shareholder Return, over a 3 year rolling period,
amongst a peer group of 21 other companies.
Unilever’s TSR position relative to the peer
group over a rolling 3 year period
Peer group in 2007
Avon
Beiersdorf
Cadbury Schweppes
Clorox
Coca-Cola
Colgate
Danone
Heinz
Kao
Kraft
Kimberley Clark
Lion
L’Oréal
Nestlé
Orkla
Pepsico
Procter & Gamble
Reckitt Benckiser
Sara Lee
Shiseido
1997
0
7
14
21
1999
2001
2003
2005
2007
Financial objectives
Overarching ambition
Top Third Total Shareholder Return, over a 3 year rolling period out of peer
group of 20 other companies
Outlook to 2010
• Underlying sales growth of 3-5% p.a.
• Operating margin >15% by 2010 after normal restructuring
• Improvement in Return on Invested Capital and cash flow
Management remuneration is aligned with these objectives
Financial strategy
We intend to maintain a competitive balance sheet and to use surplus cash to
enhance shareholder returns
Legal structure, governance and shares
Unilever was formed in 1930 from two companies:
Margarine Unie
(Netherlands)
Lever Brothers
(UK)
It was a full business merger, operating as a single business entity
Two separate legal parent companies were maintained:
- Unilever NV (Netherlands) and Unilever PLC (UK).
This works through an equalisation agreement and other contracts between the
two companies
Legal structure
Unilever NV and PLC have separate legal identities but operate as a single entity
NV share
holders
PLC share
holders
Directors
NV
Equalisation
PLC
‘One Unilever’ Operating Units
Corporate governance
Unilever firmly believes in maintaining high standards of Corporate
Governance
These have evolved in response to developments in Europe (UK Combined
Code, Dutch Corporate Governance Code) and the US (Sarbanes Oxley, NYSE
listing rules)
Unilever operates a unified board: the boards of NV and PLC comprise the
same directors
There is a majority of independent, non-executive directors on the board. The
Chairman is non-executive
The boards have ultimate responsibility for the business as a whole
Details of current arrangements can be found in the report and accounts in the
investor centre at www.unilever.com
Share listings
Unilever NV ordinary shares or certificates (depositary receipts) are listed on the
stock exchanges in Amsterdam and as New York shares on the New York Stock
Exchange.
Unilever PLC ordinary shares are listed on the London Stock Exchange and as
American Depositary Receipts in New York. Each ADR represents 1 underlying
ordinary PLC share.
There are 1 714 727 700 NV ordinary shares in issue, each with a nominal value of
€0.16.
There are 1 310 156 361 PLC ordinary shares in issue, each with a nominal value of
3 1/9 pence.
The equalisation agreement between NV and PLC is such that each NV ordinary
share has the same rights and benefits as each PLC ordinary share.
The combined share count excluding treasury stock, for calculating basic EPS, was
2,853 million at the end of 2007.
Further information can be found in the investor centre at www.unilever.com
Share listings
Exchange
Amsterdam
London
New York
Share
Unilever
NV
Unilever
PLC
Unilever
NV NY
Unilever
PLC NY
Ticker
UNA
ULVR
UN
UL
Earnings per
share - 2007
€ 1.35
£ 0.92
$ 1.84
$ 1.84
Dividend per
share – 2007*
€0.75
£0.51
$1.09
$1.02
End 2007
price
€25.15
£18.90
$36.46
$37.42
Unilever normally pays two dividends per year:
- an interim dividend set at 35% of the previous year’s total dividend
- a final dividend paid after the AGM
Notes:
*Relates to regular interim and final dividends per ordinary share
Final 2007 dividends subject to AGM approval
US dividends based on exchange rate on 7 Feb 2008
Share listings and ownership
Share listings as a percentage of
capital
NV NY
11%
PLC
39%
PLC NY
2%
NV
48%
Share ownership* by country at the
end of 2007
UK
32%
Other
32%
Netherlands
14%
USA
23%
* estimated
Taxation on dividends for US residents
This information is intended to provide general guidance only. Actual tax treatments
will depend on specific circumstances. US residents should consult their local tax
advisers.
The information shown is generally applicable to a typical US resident.
Share
Local withholding tax
US tax
Effective tax on dividends
Unilever NV
(Netherlands)
15% eligible for credit
Against US income tax
Max 15%
Max 15%
Unilever PLC
(UK)
None
Max 15%
Max 15%
Further information can be found in the Unilever Annual Report & Accounts, available
on the investor centre at www.unilever.com
Further information and contact
details
More information on Unilever is available at www.unilever.com
The shareholder centre at www.unilever.com gives information
on how to purchase Unilever stock.
The IR team can be contacted by
telephone as follows:
+ 44 (0) 20 7822 6830
Or by e-mail at:
investor.relations@unilever.com