Unilever in Western Europe · Unilever SAP is being ... Unilever in Western Europe. 31 Handover to Dave 32 ... Nielsen; CMI Europe; McKinsey analysis • Recession impact on overall

Unilever in Western Europe

12th November 2008

2

� A snapshot

� The journey so far

� Transformation in action –UK/IRE cluster

� Winning in challenging times


3

Western Europe in Unilever

% of Unilever *

Turnover

Contribution to Profit

29%

34%

Employees

Factories

15%

25%

* 2007 Actuals

4

Organisation

Nordics-SWE-NOR-FIN

UK/IRE DACH-Ger-Aus-CH

BNL-NL

-BEL

SpainPortItaly

Greece

France

9 managed units23,000 employees>€12 billion in sales

5

DACH

BNL

ITALY

FRANCE

UK/IRENORDICS

SPAINGREECE

Western Europe by Geography/Category

Personal Care, 16

Home Care, 14

Ice Cream, 16

Foods, 54

Geography Category

23

20

12

15

14

6

64

% Share of Turnover, 2007

6

A core portfolio with strong category positions

7

And strong leadership in key geographies

8

…and strong trusted brands

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� A snapshot





10

Where we were in 2005….

-4.0%

-3.5%

-3.0%

-2.5%

-2.0%

-1.5%

-1.0%

-0.5%

0.0%

0.5%

1.0%

Dec-0

3

Mar-0

4

Jun -0

4

Sep-0

4

Dec-0

4

Mar-0

5

Jun-

05

Sep-0

5

Dec-0

5

Mar-0

6

The need for change…

Key deliverables of the change program

•Return the business to competitive growth

•Focus investments on the core portfolio

•Radically simplify the business and reduce costs • Improve profitability

MAT USG% Trend

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MAT USG% Trend

-3

-2

-1

0

1

2

3

Dec-05 M ar-06 Jun-06 Sep-06 Dec-06 M ar-07 Jun-07 Sep-07 Dec-07 M ar-08 Jun-08

Getting back to growth

12

Catching up with market growth but not yet competitive

(source Nielsen)

2006 2007 2008 MAT

Market

Unilever

13

Increased support levels in our priority categories

MAT 2008 Share of Spend/Share of Market in Western Europe

Savoury >100

Dressings >100

SCC =100

Leaf Tea >100

Ice Cream >100

Foods >100

* Non leadership positions** but competitive in our key markets

Skin >100

Deo >100

Hair* <100

Oral* <100

Home Care** <100

HPC <100

Mindshare guidelines: >100 = investing to grow vs branded competition

14

Improving operating margins

Underlying Improvement in Operating Margin* in Western Europe

2005 2006 2007 YTD 08

+60bps+130bps

-60bps-110bps

* Operating Margin excl. RDIs

15

Unilever to reduce by 20 000 over next 4 years. 50-60 Sourcing Units closed/streamlined

Q2 ’07 Unilever Announcement

Accelerating the Transformation

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Western Europe at the forefront

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Accelerating the Western Europe Transformation

PortfolioManagement

Supply chain One UnileverNew Indirects

initiatives

Re-shape the portfolio Re-configure the business

Re-vamp capabilities- Customer & Brilliant Consumer M arketingRe-vamp capabilities- Customer & Brilliant Consumer M arketing

Re-energise the organisationRe-energise the organisation

18

UK Germany FR NOR

Re-shaping the portfolio

• Significant disposal program �

�• Increase the value from non-strategic brands

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Re-configuring the business - Supply Chain

Past Now

OpcoOpcoOpco

Country A

OpcoOpcoOpco

Country B

OpcoOpcoOpco

Country C

One UCountry a

One UCountry b

One UCountry c

USCC

= source, make, plan, deliver

Establishing Unilever Supply Chain Company in Switzerland

20

Re-configuring the business - Supply Chain

• Before Transformation • Post Transformation (2010)

>90 factories

24,000 people

>600 warehouses

<65 factories

19,500 people

<300 warehouses

21

Re-configuring the business - One U & indirects

(2005)Pre-One Unilever

(2007)One Unilever

(2007)New Strategic

Focus

(2008) Multi-Country

& Multi-Category Org

65 x 2017 x 20

17 x 159 x 15

Fewer touch points

Quicker decisions

Improved

performance

Country/Category

matrix

Total people reduction including Supply Chain: 8400

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Re-configuring the business-Transforming IT and aligning processes..

• Before Transformation • Post Transformation (2009)

Fragmented processes

High maintenance costs

1,200 persons in transactional processes

Fragmented processes

> 90 local HR systems

No measurement of HR service

Harmonised processes

Economies of scale

Faster roll out of technology

425 FTEs

Harmonised processes

1 global HR ERP system

Full visibility

HR

Fin

ance

23

Re-configuring the business- ..and externally recognised

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Re-configuring the business- …at speed..

Unilever SAP is being implemented much faster than comparable European FMCG SAP programmes

Unilever SAP implementation

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Win With Customers - Western Europe

1

2

3

4

5

Main sources of benefits from Win with Customers Western Europe

Optimising Promotional Sell-out

Unilever Trade Terms

Increased Distribution

Core assortment

In Store Execution

26

Core Assortment Case Study - Carrefour

• Higher value lines moved to eye level

• Delivered 9% Growth• European programme for accelerated growth,

acknowledged by the customer as best practice

Before After

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Complete the transformation: key jobs to be done

Organisation

One Unilever Systems and Processes

MCO/MSO structure in place

HRT

Focus now on competitive go to market execution

T- finance

Factory Transformation

Distribution Transformation

�

�

SAP implementation Q1 09

Q2 09

Supply Chain ‘09/’10

Q4 09

28

A massive agenda with significant benefit

• From • To

A complex, slow moving organisation

Country led factory and distribution networks

Multiple Finance and HR systems and processes

65 OpCos

90 factories>600 depots

3 legacy systems+100 processes

A simpler, cost efficient, customer facing operation

A single EuropeanSupply Chain Company

Single European system and standard processes

9 MCO/MSOs

65 factories<300 depots

1 SAP1 HR

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� a core portfolio of strong category and leading bra nd positions

� a region under massive transformation and making go od progress

� a region not yet back to competitive growth but poi sed to do so

� a team of really committed people determined to fin ish the transformation and win

Summary

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� A snapshot





31

Handover to Dave

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� A snapshot





33

Getting back to competitive growth

� Markets, consumers, customers

� 6 P’s toolbox

� Operational excellence

� Winning Mindset

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The perfect storm…

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2008 Trading Environment

Source: Nielsen

Markets are slowing… …with a significant impact on volumes..

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2008 Consumer Environment

…and shopper habits are changing

Source: Nielsen

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LETTER TO ENECODear Sir/Madam

I acknowledge receipt of your letter dated 1 May in which for thethird time, you request that I pay the monies owed to you. I first wantyou to know that by no means do I dispute my debt and I intend toreimburse you as soon as possible.

However, I bring to your attention that I have many more creditors,quite as honourable as you, and whom I wish to reimburse too. That iswhy, each month, I throw all the names of my creditors into a hat anddraw one randomly whom I hasten to refund immediately. I hope that yourswill come out shortly.

Sincerely Yours,

Tim

PS: I have great regret in informing you that given the unceremonioustone of your last letter, you will not be taking part in thenext three draws

But consumers have retained a sense of humour..

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Changing Consumer Behaviours..

(Private Label value share change)

Dressings

Savoury

Spreads

Ice Cream

Total Foods

Skin Cleansing

Hair

Deodorants

Fabric Cond.

Total HPC

0-30bps 30-60bps >60bps

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Discounters are growing faster than the market

Europanel - Year on Year change – Discounters (Big 6) - * Italy MAT Mar 08 vs. MAT Mar 07

FMCG - Year on Year growth (MAT Jun 08)

4.9%

2.8%

3.0%

2.7%

5.0%

5.4%

5.7%

9.5%

6.8%

5.5%

9.6%

12.8%

Netherlands

Italy

France

Germany

Spain

Great Britain

DISCOUNTERS

TOTAL MARKET

*

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..and our performance with Discounters is strong..

* Top 10 customers

** Top 10 discounters

Western Europe Growth

Growth with key discounters**

17.0%

Growth with key customers*

1.5%

1.3%

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It is not business as usual

Leading the on-line grocery market

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� 6 P’s toolbox


� Winning Mindset

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“Consumers don’t stop buying during a recession, they just buy more cleverly”

An unknown consumer marketer

Consumer and Shopper

44

Recession impact category segmentation

Recession impact on category

Source: Nielsen; CMI Europe; McKinsey analysis

• Recession impact on overall volume

Positive

Neutral

Negative

• Positive • Neutral • Negative

– Sauces– Hand &

Body

• “Trade up/ Thrive”

• “Hold”

– Oral Care– Skin

Cleansing

– CCA

– Deodorants– Shampoo– Conditioner– Leaf Tea

• “Trade down”

• “Consume less”

• Recession impact on category mix

– Fabric Cleaning

– HHC– Dressings– Fabric

Conditioner

1 3

2

4

– Ice Cream

– Meals and Dishes– Margarine

– Soups

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Recession impact category segmentation

Category response- 6Ps

Proposition

Promotion

Product Place

Pack

Price

Economic Downturn10 commandments for SCC

Savoury Response Plan

10 recipes for success

Managing Ice Cream in the “Tough

Times”

Underline Value and Quality

Protect Advertising Investment and Spend More Wisely

Do not Cut Product Quality Catch the moving Shopper

Small Packs ,Big Packs

Range-up, Range-down

Better Products are still worth paying for…

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Proposition

6P’s activities to win in challenging times

Video: Dove

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Proposition


48

Propositionand

Product


Defend quality

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Format differentiation for cheap bulk pack or lower face value.

Bulk packLower face value

8units24units

12+3 units

30units


Pack

50


Pack

Full pack size ranging in each country

250ml 500ml 750ml400ml

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Pack

Strategy for the Normal Trade: target bulk trips via multi-packs at a lower price/litre value advantage

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Pack

500 g250 gHH Pro-active Tubs

2x

100 g

1000 g

1000 g

1000 g

1000 g

1000 g

1000 g

600 g500 g250 gHeart Health (HH) Tubs

600 g500 g250 gFG Light tubs

600 g500 g250 gFamily Goodness (FG) tubs

600 g500 g250 gFG Light Wrapper

600 g500 g250 gHH Light Tubs

600 g500 g250 gLattaTubs

500 g250 gFG Wrapper

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Promotions

Aggresively increasing promotional activity

Brand activation with crisis related gifts


54

Promotions

“Take the restaurant home: cooking in crisis time”


Communication Products

55

Promotions


Value and sustainability Cross category promotions

56

Place

European Discount shopping basket


57


Price

Playing the portfolio price piano

Build Super Premium

Renovate the premium

core

Re-enter mass/

economy

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SCCSCC……Essential for lifeEssential for life

Winning in Economic Downturn.

10 commandments for SCC.

All categories/countries covered and ready to go

Winning in the downturn

Savoury Response Plan

10 recipes for successManaging Ice Cream in the “Tough Times”

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� 6 P’s toolbox


� Winning Mindset

60

Win with Customers

UK/IRE MCO

O SOP

Optimising Promotional Sell-out

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Our response- Operational Excellence “Brilliant Basics”

� Good progress but still much to do

� Customer and Shopper at forefront of all we want to do

� Focus on massive simplification – few simple KPIs

� Brilliant basics to drive winning at the point of purchase

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Operational Excellence “Brilliant Basics”

To do our job so well that the consumer at the point of purchase has to make a conscious decision

not to buy our brand

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� 6 P’s toolbox


� Winning Mindset

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“I thought about it and decided not to take part”

Sam Walton (WalMart) on the recession

Mindset

65

Our response- winning mindset

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Unilever in Western Europe - Summary

• Western Europe important to Unilever – its role is to deliver competitive profitable growth

• Massive transformation underway, nearly complete. Key task in 2009 is to finish the job

• New organisation starting to deliver and end state will be competitive

• Well placed to weather 2009/2010 market conditions - excited about opportunities

Documents

Unilever in Western Europe · Unilever SAP is being ... Unilever in Western Europe. 31 Handover to Dave 32 ... Nielsen; CMI Europe; McKinsey analysis • Recession impact on overall