Unilever : Consumer Analyst Group of New York Conference 2020

Unilever at CAGNY

Graeme Pitkethly & Richard Williams

18th February 2020

Richard Williams

Unilever at CAGNY

18th February 2020

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 '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; inability to find sustainable solutions to support long-term growth including to plastic packaging; the effect of climate change on Unilever's business; 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.

These forward-looking statements speak only as of the date of this announcement. 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 Annual Report on Form 20-F 2018 and the Unilever Annual Report and Accounts 2018.

3

Unilever today

190 countries

Developed

markets

40% Emerging markets

60%

2.5 billion consumers

85% leading positions

Home
Care	Beauty &
21%
Personal
	Care
Foods &	42%
Refreshment
37%

80% local leaders. #1 CPG employer in 52 countries

4

2019 Results

Growth	Margin	Earnings	Cash
Underlying Sales Growth	Underlying Operating Margin	Underlying EPS	Free Cash Flow

+2.9%	+50 bps	+8.1%	€6.1bn
+1.2%	+30 bps	+5.8%	+€0.7bn

Underlying Volume Growth

Gross Margin

Constant Underlying EPS

vs 2018

5

Progress against 2020 strategic plan

USG in 3-5% range

Simpler, faster organisation

Accelerated margin progression

Faster portfolio evolution

Simpler capital/legal structure

Increased leverage & returns

3% CAGR 2017-19

Closer to the markets, delayered

UOM 16.4% → 19.1%, >€6bn savings 2017-19

BPC increased to > 40% of portfolio New Prestige business built to >€600m

Preference shares cancelled, trust office closed,

unification withdrawn

High teens ROIC, net debt at 2X

6

Graeme Pitkethly

Unilever at CAGNY

18th February 2020

2019: Setting foundations

Jan

April

July

Dec

Management changes

Accelerate Turnaround

growth growth

		Sustain growth Unlock
		margin
One Strategy	Delayering	Roles by cell

Role changes

Promotion

External

Top line growth: our diagnosis

• Focus on fundamentals
• • Consistent execution
  • More operational grip
  • Improve channel capability
• Strengthen innovation, particularly BPC
• Greater leverage from emerging market strongholds
• Bolder portfolio shift

9

Today's themes

FOCUSED	POWERING OUR	ACTIVE
EXECUTION	MARKETS	PORTFOLIO
		MANAGEMENT

5 growth fundamentals

Emerging markets

Reshaping the business

10

Today's themes

FOCUSED	POWERING OUR	ACTIVE
EXECUTION	MARKETS	PORTFOLIO
		MANAGEMENT

5 growth fundamentals

Emerging markets

Reshaping the business

11

2020 growth fundamentals

1

2

3

4

5

Mental and physical availability in key cells

Product superiority

Decisive choices

Focused channel capability

100% product & purpose integration

€2bn+ savings p/a

12

Improved penetration

Product	Product	Advertising
availability	superiority	superiority

Increasing mental and physical availability

13

India penetration

Surf Excel penetration

Skin cleansing penetration

2016

2017

2018

2019

2016

2017

2018

MAT 2019

Laundry business results	Skin cleansing business results
CAGR	While driving		Two biggest
10%	USG%
brands:
market
	development		Declining
	through
		penetration
	premiumization

14

Impactful innovation - rebalancing

GLOBAL: Dial up

LOCAL:More choiceful

15

Impactful innovation - technology led

2019: > 10 markets

Premium pricing

~150 index

Margin accretive

Rexona Clinical Protection

> 3% Market share of

deos market in Y1

16

Design for channel

Capturing growth in fast growing channels

• Focused channel capability
• Future fit portfolio

• 1. Agile R&D and Net Revenue Management
• Execution
• 1. Design for complexity & agile supply chain
• Content & demand creation
• 1. Data driven marketing driving conversion

E-commerce

Health & beauty

Out of home

Professional

17

Purposeful brands

% of global adult population
2020 = 55%	% of global adult population

			2020 = 45%
75	72	63	56
Gen Z	Millennial	Gen X	Baby boomers

% motivated to be brand loyal to brands making positive impact

Source: GlobeScan, Healthy & Sustainable Living Report 2019 / UN population data

18

Fuel for growth

Robust pipeline of savings programmes

€2bn
p.a.
	Change		Grow
	Programmes		Power
		Run
Savings per year
2017 - 2019
Enabled through €3.5bn restructuring spend

19

Reinvesting in the business

BrandsInnovation

Brand Power

76%

Stable or

increasing

Brand Power - Kantar Millward Brown, MAT Q4 2019

Capabilities

>1500

Digital talent recruited in 2018/19

>500

Talent in Digital Hubs & People Data Centres

>20U-Studios

>30People Data Centres

Piloting Insight Hubs

20

Today's themes

FOCUSED	POWERING OUR	ACTIVE
EXECUTION	MARKETS	PORTFOLIO
		MANAGEMENT

5 growth fundamentals

Emerging markets

Reshaping the business

21

Future market growth

16 emerging markets > €500m

21 emerging markets €100 to €500m

€bn

5

3

2

1
0
>€500m	Turnover	>€100m
>60%of global GDP growth to 2030	Seeding the future

GDP growth (PPP adjusted) 2020 - 2030. Source: IMF, IFS	22

EM powerhouses

India: 9% of turnover

10%

5%			Softer
0%			2020+
2014-16	2017-19
		Market growth	Our view

Indonesia: 5% of turnover

10%

5%

Stronger

0%

2014-16	2017-19	2020+
Market growth	Our view

Brazil:6% of turnover

15%

10%

Stronger

5%
0%			2020+
2014-16	2017-19
Our view
	Market growth

China:5% of turnover

5%

?

0%

2014-16	2017-19	2020+
Our view
Market growth
		23

Nielsen data, China adjusted for non-tracked channels

Managing through volatility

Crises are all different

Rapid responses

Competitive growth

USG 6%

Market growth

20152019

Hyper recession

Value brands

Brazil USG %

Argentina:

Volume ahead of the market

Hyper stagflation

Counter-cyclical premium

24

Developing our route to market

• Brazil B2B hub focused on small retailers

• Multi-industry marketplace

• Growing >50%

• Rolling out to Argentina

25

Today's themes

FOCUSED	POWERING OUR	ACTIVE
EXECUTION	MARKETS	PORTFOLIO
		MANAGEMENT

5 growth fundamentals

Emerging markets

Reshaping the business

26

Capital allocation

Operational investment		Portfolio reshape	Returns to shareholders
•	Brands	•	Bolt on acquisitions	•	Dividends
•	Innovation	•	Large acquisitions	•	Event driven share
•	Capital expenditure	•	Disposals		buybacks
•	Restructuring		Regular share buybacks
		•

• Capabilities
• Sustainability
• Minority buybacks

Net debt leverage ratio of approximately 2X

27

Portfolio reshape

Beauty & Personal Care

% Turnover

2009 BPC

30%

2019 BPC

42%

Foods & Refreshment	Home Care
% Turnover	% Turnover

2009	F&R	2009	HC
53%	17%

2019	F&R	2019	HC
37%	21%

€11bn outflow, €8bn inflow

28

Maintaining high ROIC while changing the portfolio

19.2%

ROIC %

18.5%

18.1%

19.2%

No of	4	9	7	8
acquisitions

Acquisition examples

2016

2017

2018

2019

2018 restated for IFRS 16

29

Future growth categories

€600m

€350m

2019

Double

digit

growth

201520172019

Luxury beauty	Health, wellness,
personal nutrition
Focus skin care	Focus VMS

30

Global tea

31

Today's themes

FOCUSED	POWERING OUR	ACTIVE
EXECUTION	MARKETS	PORTFOLIO
		MANAGEMENT

5 growth fundamentals

Emerging markets

Reshaping the business

32

Unilever at CAGNY

Graeme Pitkethly & Richard Williams

18th February 2020