Unilever at Deutsche Bank Global Consumer Conference 2021
Deutsche Bank Global Consumer Conference 2021
Alan Jope & Sanjiv Mehta
7th June 2021 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 ‘will’, ‘aim’, ‘expects’, ‘anticipates’, ‘intends’, ‘looks’, ‘believes’, ‘vision’, 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 Unilever Group (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. Among other risks and uncertainties, the material or principal factors which could cause actual results to differ materially are: Unilever’s global brands not meeting consumer preferences; Unilever’s ability to innovate and remain competitive; Unilever’s investment choices in its portfolio management; the effect of climate change on Unilever’s business; Unilever’s ability to find sustainable solutions to its plastic packaging; significant changes or deterioration in customer relationships; the recruitment and retention of talented employees; disruptions in our supply chain and distribution; increases or volatility in the cost of raw materials and commodities; the production of safe and high quality products; secure and reliable IT infrastructure; execution of acquisitions, divestitures and business transformation projects; economic, social and political risks and natural disasters; financial risks; failure to meet high and ethical standards; and managing regulatory, tax and legal matters. A number of these risks have increased as a result of the current Covid-19 pandemic.
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.
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 in the Unilever Annual Report and Accounts 2020.
2 Agenda
1 Unilever Overview
2 Portfolio: Prestige Beauty and Functional Nutrition
3 Markets: Digitalisation in India
4 Summary
3 Key facts Unilever Overview
Top 5 markets: Home €51bn 18.5% USA Care India 21% turnover underlying operating Brazil Beauty & margin China Personal Care Indonesia 42% Foods & Refreshment 37% 190 €7.7bn countries free cash flow 14 of the top 50 global consumer brands
Most effective 60% marketer sales in emerging for 4 consecutive years markets
4 Note: all figures as of full year 2020 Unilever’s differentiating strengths Unilever Overview
Powerful portfolio of Strong presence in The global leader in leading category and growth markets of sustainable business brand positions the future
Leading 81% 50% positions 12 Top Leader brands #1 or of turnover of GlobeScan in Dow Jones in top 10 future markets with >€1bn #2 in their from 13 billion Sustainability Sustainability annual sales market Euro brands growth markets Leaders survey for Index since 2014 10 years
5 Strong start to the year Unilever Overview
Operational Competitiveness Q1 Growth excellence
Penetration Underlying Sales Growth Innovation 57% 5.7% Design for channel % Business Winning MAT
Brand purpose 4.7% Underlying Volume Growth
Fuel for growth
6 Five strategic choices Unilever Overview
1. Develop our portfolio into high growth spaces
2. Win with our brands as a force for good, powered by purpose & innovation
3. Accelerate in USA, India, China and leverage EM strength
4. Lead in the channels of the future
5. Build a purpose-led, future-fit organisation and growth culture
Operational Excellence
7 Strategic choices Portfolio
1. Develop our portfolio into high growth spaces
2. Win with our brands as a force for good, powered by purpose & innovation
3. Accelerate in USA, India, China and leverage EM strength
4. Lead in the channels of the future
5. Build a purpose-led, future-fit organisation and growth culture
Operational Excellence
8 Portfolio evolution into higher growth spaces Portfolio
Priority focus area
€16bn M&A capital deployed ‘15-20 dorants based foods based - Laundry Hair Care Skin Care Skin Oral Care Ice CreamIce Deo Skin Cleansing Prestige Beauty Scratch cooking Home & Hygiene Plant Functional nutrition
4 5 3 17% 72% % % %
9 Focus on high growth spaces Portfolio
Prestige Beauty Functional Nutrition
$156bn market, growing ~7% VMS: $140bn market, growing >7%
Scale High growth Potential in Route to Branding & growth countries leadership technology sensitive
10 Prestige Beauty: Future fit operating model Portfolio
Geography footprint €0.7bn Asia €3bn 14% ambition +21% N o rth E urope America 22% Q1 USG 63%
Category footprint
O ther
Hair 8% >50% 12%
% eCommerce S kin Care 2015 2016 2017 2018 2019 2020 80%
11 8 purpose led prestige beauty brands Portfolio
Dermalogica Kate Somerville Murad REN
Living Proof Hourglass Garancia Tatcha
12 Prestige Beauty: Framework for growth Portfolio
String of pearls model Growth channels
Purpose led Digital first Impactful innovation
13 Functional Nutrition: Building scale Portfolio
€1.1bn €3bn ambition +54% #1 Q1 USG selling multivitamin on Amazon
>80% #1 sales via eCommerce VMS brands in Target 2018 2019 2020 2020 annualised
14 6 acquired Functional Nutrition brands since 2018 Portfolio
Equilibra Olly Horlicks
Liquid I.V. SmartyPants Onnit
15 Functional Nutrition: Framework for growth Portfolio
Differentiated model Priority markets
Health & Wellbeing C hannel shift Digital and DTC
16 Strategic choices India
1. Develop our portfolio into high growth spaces
2. Win with our brands as a force for good, powered by purpose & innovation
3. Accelerate in USA, India, China and leverage EM strength
4. Lead in the channels of the future
5. Build a purpose-led, future-fit organisation and growth culture
Operational Excellence
17 HUL: India’s largest FMCG Company India
€5 bn 25% Turnover Operating margin 9 out of 10 th Households use one or more 5 Largest of our brands Indian company by + €3 bn +1000bps market capitalisation of In last decade In last decade € 66 bn c. 90% Brands in 8m+ Of our business has category Largest leadership Stores M&A in FMCG in India 1 Employer +2200bps 136k Plastic of choice Shakti women >1.3 tn litres Gender balance neutral micro Across industries in last decade By 2021 Water conservation enterpreneurs potential created India a land of opportunities India
India is reforming FMCG has huge headroom to grow
Health Food Drinks 24% Instant Coffee India X Face Wash Ease of doing Body Lotion business rank Washing Liquids Indonesia 2X improved Dishwash Liquid Soup China Hair Conditioner 3X +79 Body Wash 2% Low category FMCG per capita penetration consumption
Demographics dividend Income pyramid moving towards a diamond 2016 2025
1.05 bn working class population
N o rth America 1/3rd are millennials
80% nuclear households by 2030
19 Beauty & Personal Care €2.1 bn India
Hair care Straddling price - benefit Portfolio transformation pyramid
Hair CAGR 11%
Rs. 432 High end (€5) Relative naturals Market Share 3X Salon care
FY’10-11 FY20-21 Anti-dandruff
Daily damage care
Mass beauty
Sachet at Rs.1 Family (€0.012)
20 Home Care €1.7 bn India
Impactful Fabric Wash Upgrading with new benefits Innovations
CAGR 11% Profitability 8X
Relative Market Share FY’10-11 FY20-21 2X More benefits More
Rising income
21 Foods & Refreshment €1.6 bn India
Tea Winning in many Indias’ Market Development
CAGR 12%
Secured market Recognising leadership in Tea Heterogeneity
FY’10-11 FY20-21
Punjab & Karnataka
Same brand designed for different preferences
22 India’s Digital Evolution India
Average monthly data Internet penetration Cost of 1 GB data consumption per user
2015 2021 2015 2021 2015 2021 302 m 761m US$ 4 US$ 10c 0.8 GB 13 GB
23 Reimagining HUL: Journey to an Intelligent Enterprise India
Yesterday Tomorrow
Consumer Ecosystem
Data, Tech
Source Manufacture D i s trib ute Sales & Analytics
Operations Customer Ecosystem Ecosystem
Transforming from linear value chain to non linear and interconnected ecosystems
24 Consumer Ecosystem India
Generating Better Agile Innovation Hub In sights
Interconnected Engagement Engagement & Faster & Better Systems Feedback Innovation
N a v igate the C rafting Effective Attributing media to growth shopper to C ommunication purchase
D e p loying C ommunication Effectively
Consumer signal to launch in half the time
25 Customer Ecosystem India
Demand Generation Demand Capture Demand Fulfilment
eComm, USHOP Shikhar (DTC) & Digi Payment Data & Analytics Last mile Delivery Capability (eB2B ordering) MyKirana (B2C)
App based call & Route optimisation, Ambition to double personalised Retailer credit assortment Next day delivery Impact contribution recommendation recommendation
> 500k Kiranas (traditional grocers) connected; 2 Year plan folded in 6 months
26 Operations Ecosystem India
Plan & Source Make Deliver & Service
Artificial Intelligence led commodity and Manufacturing & distribution network Automated storage & picking demand forecasting transformation
Machine Learning powered intelligent Digitally enabled agile manufacturing Integrated routing & delivery planning for distributors
Moving towards a Hi-Tech and Intelligent Supply Chain
27 Powered by Data, Tech & Analytics India
Consumer Data Lake
External Ecosystem Data
Operations Data Customer Data Forecasting Lake Lake Basket Data Data
Fulfilment Operations Store Point of Sale Data Data Sell in Data
Augmenting decision making
28 Summary Summary
Good start to the year through continued focus on operational excellence
Clear strategic choices
Portfolio evolution underway and new businesses building well
Driving competitive advantage through digitalisation Our vision Summary
Our vision is to be the global leader in sustainable business. We will demonstrate how our purpose-led, future-fit business model drives superior performance, consistently delivering financial results in the top third of our industry. Deutsche Bank Global Consumer Conference 2021
Alan Jope & Sanjiv Mehta
7th June 2021