Presentation for Investor Roadshow meetings Post Q2 2009 results by Unilever Investor Relations

1. Q2 and First Half 2009 Results
ROADSHOW
Contents
Page
Highlights 5
Business Performance 6 – 34
Our Portfolio 35 – 42
Developing & Emerging Markets 43 – 50
Innovation 51 - 72
1

2. 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, including any financial objectives, 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, 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 Annual Report & Accounts on Form 20-F. These forward-
looking statements speak only as of the date of this announcement.
2

3. Highlights
Quality of growth is good
• Market share momentum in 60% of our business
• Widespread growth across categories & countries
• Underpinned by innovation and A&P support
• Gross margin trend improving
Business Environment will remain tough
• Consumer confidence low and unemployment increasing
• Competitors will raise their game
Priorities for 2009
1. Restore volume growth
2. Protect cash and margin for the full year
Business Performance
3

4. Q2 Highlights
• Underlying sales growth +4.1%
• Restored volume growth +2.0%
• Step up in A&P investments +50bps
• Underlying operating margin down 60bps, in line
with expectations
• Cash flow improved €1.6bn in H1
Unilever Volume and Price Trends
5.0%
Volume 4.0%
3.0%
2.0%
1.0%
0.0%
-1.0%
-2.0%
-3.0%
-4.0%
-5.0%
Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09
10.0%
Price 9.0%
8.0%
7.0%
6.0%
5.0%
4.0%
3.0%
2.0%
1.0%
0.0%
Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09
4

5. Asia Africa CEE
UVG
3.3%
1.3% • Most economies resilient and growing
(0.9)% • Broad based volume growth
Q1 Q2 H1
9.5%
USG • Central Europe remains weak
8.8%
8.2%
• Q2 Underlying margin up +130 bps
Q1 Q2 H1
Americas
UVG
1.6% • Consumer confidence remains weak
0.4%
(1.0)%
• Positive volume growth continues in
Q1 Q2 H1
US consumer business
7.2% USG
5.9% • Good performance in Latin America
4.9%
• Q2 Underlying margin up +10 bps
Q1 Q2 H1
5

6. Western Europe
UVG
1.0%
(1.2)%
• Markets remain challenging
(3.7)%
Q1 Q2 H1 • Positive volume trend in key countries
USG • Q2 Underlying margin down (340) bps
(1.1)% (1.9)%
(2.8)%
Q1 Q2 H1
H1 Underlying Sales Growth by Category
12
9.9
10
8
6 4.5 4.6
4
2 1.4
0
Savoury Ice Cream Home Care Personal Care
Spreads Beverages
Dressings
6

7. Q2 Operating Margin
Q2 2008 Q2 2009 Change
Operating margin 13.2% 12.6% (0.6)%
Including RDIs* (2.0)% (2.0)% (0.0)%
Operating margin before RDIs 15.2% 14.6% (0.6)%
Key drivers:
Gross margin (0.2)%
Overheads 0.1%
A&P (0.5)%
Includes margin dilution from disposals of (0.3)%
*Restructuring, disposals and one-off items
Q2 Drivers of Operating Profit*
0.5
Price
0.3
Vol/Mix
0.1
Acq/Disp
0
€bn
-0.1
A&P Underlying
Profit
-0.3
Costs Savings
programme
-0.5
*Excl RDIs, constant currency
7

8. H1 Operating Margin
H1 2008 H1 2009 Change
Operating margin 16.0% 12.8% (3.2)%
Including RDIs* 0.9% (1.8)% (2.7)%
Operating margin before RDIs 15.1% 14.6% (0.5)%
Key drivers:
Gross margin (1.0)%
Overheads 0.2%
A&P 0.3%
Includes margin dilution from disposals of (0.3)%
*Restructuring, disposals and one-off items
H1 Drivers of Operating Profit*
0.8 Price Costs
0.6
0.4
0.2
Vol/Mix
0
€bn
0
Acq/Disp
-0.2 A&P Underlying
Profit
-0.4
-0.6
Savings
-0.8
programme
*Excl RDIs, constant currency
8

9. Commodity Cost Development
900 Commodity Costs Currency*
800
700
600
500
bps
400
300
200
100
0
Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 2009
• Commodity costs tailwinds in H2
• FY2009 commodity costs (including currency) up vs last year
*Note: Before Q4 08 currency effects were insignificant
Strong Savings Delivery
• €0.6bn total savings delivered in H1
Local
efficiency
0.1 Restructuring
0.2
Buying
0.3
On track to deliver c. €1bn in this year
9

10. H1 Drivers of EPS Growth
H1 2008 H1 2009 Change
EPS (€) 0.79 0.53 (33)%
Includes RDIs*, after tax 0.07 (0.10)
EPS before RDIs* 0.72 0.63 (13)%
Key drivers (%)
Dilution from disposals (3)
Pensions finance charge (6)
Tax rate (before RDIs*) (3)
*Restructuring, disposals and one-off items
Reducing Cash Conversion Cycle
Q2 2008 Q2 2009 Improvement
Stock days 74 61 13
Debtor days 44 41 3
Creditor days (77) (77) 0
Total days 41 26 15
10

11. Balance Sheet and Cash Flow
• Strong cash flow delivery - up €1.6bn in H1
• Net debt €8.9bn
• New bonds issued at attractive rates
• Acquisitions: TiGi, Baltimor, Vietnam minorities
Returning Cash to Shareholders
> €7bn returned 07-08
4
Total cash amount (€bn)
3
2
1
0
2004 2005 2006 2007 2008
Dividends Share buyback One-off dividend
• Dividend Policy: sustainable, attractive and growing dividends
• Move to quarterly dividends
• No plans for share buy-backs in 2009
11

12. Key Drivers of Business Performance
Cash and Costs
Brands & Categories
In Market Organisation
Amplification
Brands and Categories
Stronger Claims
Examples:
US Soft Spreads Asia Pond’s Anti US Dove Body Wash
Ageing Creams
‘No hydrogenated ‘Clinically proven to
oils’ ‘Younger skin in 7 reverse dryness’
days’
Brands
12

13. Brands and Categories
Faster Roll-Out to More Markets
Examples:
17 Markets 33 Markets 37 Markets 56 Markets
Brands and Categories
Improving Product Quality
Examples:
Brands
Amora - France Klondike - US DiG - Asia
13

14. Brands and Categories
Playing the Full Price Piano
Example: Russia Tea
Premium
• Roll-out of fruit pyramid
teas
Brands
• New advertising
Mid-Tier campaign
• Launch of herbal
infusions
Value
Brands and Categories
Focus on offering consumer value
14

15. In Market Amplification
Positive Customer Service Trend
20 Number of Top 20 countries achieving
service at the 2009 par target level
15
10
5
0
Jan-08
Jan-09
Aug
Jun
Feb
Sep
Feb
Mar
Apr
Mar
Apr
May
Nov
May
Jul
Dec
Oct
In Market Amplification
Customer Insight and Innovation Center
The Customer Insight & Innovation Centre in the US
will be showcased at our Investor Event in 23-24 November 2009
15

16. Cash and Costs
Restructuring Well on Track
Plan 2007-2010 Actual to date
From 100 units
Multi-country organisations 28
to 20-25 MCOs
Factory closures / streamlining 50-60
Announced 70
Of which completed > 35
Headcount reduction 20,000 > 10,000
Restructuring savings €1.5bn €0.9bn
Restructuring charges €3.0bn €2.1bn
Organisation
Change Programme Update
2005 2006 2007 2008 2009 2010
One CEO, New New New
Governance, Non-Exec
Board Board Chairman CFO CEO
Global One One
Brands & Category
Innovation Team Category R&D
Go-to- Customer
One Unilever MCOs Focus
Market
Factory
Cost Base Simplification
Overhead
Simplification
16

17. Organisation
Aligning the Organisation
Accountability &
Responsibility
Consistent
Bias for Action Winning
Organisation
Consumer &
Customer Focus
Our Priorities
• Reignite volume growth
• Protect cash flow and margin
17

18. Our Portfolio
Scale and geographic reach
Western Europe | €12.9bn | 32%
The Americas | €13.2bn | 33%
Asia Africa CEE | €14.4bn | 35%
2008 Unilever Turnover €40.5bn | 100%
18

19. Balanced category portfolio
Savoury,
Home Care Dressings &
€7.2bn (18%) Spreads
€14.2bn (35%)
Ice Cream &
Personal Care Beverages
€11.4bn (28%) €7.7bn (19%)
Strong Leadership Positions
Savoury #1
Dressings #1
Tea #1
Ice Cream #1
Spreads #1
Deodorants #1
Mass Skin #1
Laundry #2
Daily Hair Care #2
Oral Care Local Strength
Household Cleaning Local Strength
19

20. Big Global Brands
13 billion euro + brands
Top 25 brands = ¾ of Unilever’s sales
Selective Bolt-On Acquisitions
Buavita Indonesia
Inmarko Russia TIGI Global
Wonderlight Sri Lanka
Napoca Romania Baltimor Russia
20

21. Partnerships
Starbucks Ice Cream Pepsi Lipton International
Disposals completed in 2008
Including:
Turnover €bn
0.1
Boursin Cheese
Lawry’s Seasonings 0.1
0.7
NA Laundry
Bertolli Olive Oil 0.4
Disposals completed with €1.6 billon turnover
Average 1.8x sales multiple
21

22. Developing & Emerging
Markets
The D&E Opportunity
D&E Population in 2008
(billions)
Affluent
0.5
Aspiring 2.6
Striving 2.6
22

23. … Rapidly Evolving into a Diamond
Billions of people in D&E countries
2008 2018 Change
Have lots 0.5 0.9 + 0.4
Haves 2.6 3.2 + 0.6
Not
yets
2.6 2.2 - 0.4
Source: Unilever estimates
Market Development Opportunity
Per Capita Consumption (US $ per year )
Detergents 22.9
Shampoo 7.5
6.7
16.6 5.4
12.1
2.2 1.9 1.0 1.1
1.4 0.3
India China Indonesia Brazil Germany USA India China Indonesia Brazil USA Germany
Ice Cream 50.9 Skin care
36.6
34.6 26.9
10.9
2.8 5.0
0.2 0.9 3.2 0.8
0.3
India Indonesia China Brazil Germany USA India China Indonesia Brazil USA Germany
Source : Euromonitor
23

24. Building Markets – Driving Penetration
Shampoo sachets Re-closable multi-use Deo ministicks Mini cubes
sachets
Building Markets - Uptrading
Functional
Teas
Pyramids
Double
Chamber
Mid-market
Teabags • Great potential for uptrading
D&E Conversion
Teabags • Tea has 20% share of volume vs.
12% value for total Beverages
Branded
Packet Tea
Loose Leaf
Tea
conversion upgrading uptrading
24

25. Long-Term Strength in D&E
Since 1990…
16 • Underlying sales growth 9% pa on average
• Hard currency growth of 7% pa on average
14
• Volume growth 5% pa on average
12
• Volume and value growth in every year
10
8
6
4
2
0
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
-2 UVG UPG
*1990-2002 LATAM and Asia. From 2003 all countries excl NA, WE, Japan and Australia.
D&E Growth is Profitable
2008 Operating margin before RDIs*
Unilever
average
* Restructuring, disposals and one-off items
25

26. Innovation
Building R&D for Competitive
Advantage
• More focus on big wins
• Leverage our unique science across our portfolio
• Accelerate delivery of breakthroughs
• Build world class capabilities in critical areas
26

27. Science and Technology Strengths
Spray Technology Skin Mildness Product Processing
Deodorants and Moisturizing e.g. Ice Cream
Hair Structured
Science of Tea
Technology Oils and Emulsions
More focused R&D organisation
• 6 Global R&D Centres
Port Sunlight,
UK
Colworth, Vlaardingen,
UK NL
Trumbull,
US Shanghai,
China
Bangalore,
India
• 40% of our R&D people are in Developing & Emerging
markets, and building ….
27

28. Prioritising our big wins
Science & Unilever Big Wins
Technology
Prioritised
ts
Portfolio jec
Pro
sis
ne
Ge
Consumer Needs
Trends
Brand
Categories
Leverage Technology Across Portfolio
Home Care Personal Care Foods
Genesis Project 1
Genesis Project 2
Consumer Benefit
Genesis Project 3
Genesis Project 4
Focus
Genesis Project 5
Genesis Project 6
Genesis Project 7
Genesis Project 8
Genesis 9
Genesis Project 10
Genesis Project 11
Technology Focus
Genesis Project 12
Genesis Project 13
Science &
Genesis Project 14
Genesis Project 15
Genesis Project 16
Genesis Project 17
28

29. Improving R&D capabilities
• Crossover technologies driving differentiated
innovation
• Boosting open innovation
• Strengthening clinicals
• Exploiting patents across categories
Fewer, bigger innovations
• From 5000+ projects to 700
Number of category innovation projects
6000
5000
4000
3000
2000
1000
0
2005 2006 2007 2008 2009
• Average project size increased 10x
29

30. Knorr Stock Pots
Stock Pots with new bouillon gel technology for natural tasty stock and soups
Launched in China and across Europe
Bertolli Frozen Meals
New Bertolli Frozen Meals
Restaurant Taste with your Homemade Touch
30

31. Heart Health
“Goodness of Margarine”
Family Goodness brings better
nutrition for family growth
For better taste and with less fat
Hellmann’s Light
Delicious extra light mayonnaise with unique citrus fibre technology
Now double-whisked to bring out the great taste!
31

32. Lipton
New Lipton pyramid teas and infusions
with chunky pieces of fruits, spices
and large leaves for the great tea
tasting experience
A unique slimming
tea twice as rich in catechins
to help maintain your silhouette
Magnum Temptation
An unrivalled multi-sensorial experience
using cold roller technology
32

33. Clear
Complete antidandruff and scalp care regime
Centrally developed, identically presented
Axe Hair
New Axe Hair launched in the US designed to create hair that guys
want and girls love
A complete line of shampoos, a conditioner, and styling products
33

34. Axe Instinct
New Axe Instinct
with the ‘scent of leather’
Dove Hair Minimising Deodorants
Dove Hair Minimising Deodorants
Look and Feel Hair Free for Longer
34

35. Dove Go Fresh
Dove Go Fresh
A fragrance-driven collection of products aimed at women in their 20s
Rolled out to 55 markets in 2008 alone
Dove NUTRIUM Technology
Dove Body Wash with new NUTRIUM technology - US
The most effective natural nourishment ever delivered in a body wash
35

36. Surf
Surf – Cleaning & Fragrance at a Great Value Price
Domestos 24HR
The clinging power of new thicker
formula makes it flush proof,
protecting you and your family
from germs
36