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Unilever Q1 2020Trading StatementAlan Jope & Graeme Pitkethly23rd April 2020
Safe harbour statementThis announcement may contain forward-looking statements, including ‘forward-looking statements’ within the meaning of the United StatesPrivate Securities Litigation Reform Act of 1995. Words such as ‘will’, ‘aim’, ‘expects’, ‘anticipates’, ‘intends’, ‘looks’, ‘believes’, ‘vision’, or thenegative of these terms and other similar expressions of future performance or results, and their negatives, are intended to identify suchforward-looking statements. These forward-looking statements are based upon current expectations and assumptions regarding anticipateddevelopments and other factors affecting the Unilever Group (the ‘Group’). They are not historical facts, nor are they guarantees of futureperformance.Because these forward-looking statements involve risks and uncertainties, there are important factors that could cause actual results to differmaterially from those expressed or implied by these forward-looking statements. Among other risks and uncertainties, the material orprincipal 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 changeon Unilever’s business; Unilever's ability to find sustainable solutions to its plastic packaging; significant changes or deterioration in customerrelationships; the recruitment and retention of talented employees; disruptions in our supply chain and distribution; increases or volatility inthe cost of raw materials and commodities; the production of safe and high quality products; secure and reliable IT infrastructure; executionof 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 resultof the current COVID-19 pandemic. These forward-looking statements speak only as of the date of this document. Except as required by anyapplicable law or regulation, the Group expressly disclaims any obligation or undertaking to release publicly any updates or revisions to anyforward-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 aredescribed 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 2019 and the Unilever Annual Report and Accounts 2019.2
Alan JopeUnilever Q1 2020 Trading Statement23rd April 2020
Covid-19: Disruption and uncertaintyA global crisisA human crisisUnprecedentedgovernment urkey50k-900000-11000000k-1300000JanAprNumber of Covid-19 cases for 40 countriesCovid-19 cases by country, as per 20/4/20 (ECDC data). News clippings from BBC News, The Guardian.4
Managing through Covid-19: Five workstreamsPeopleSupplyDemandCommunityCashAgile markets organisation5
PeoplePeopleSupplyPeople #1 priorityDemandCommunityCashLives & livelihoodsRedeployment of teamsProtectextendedworkforcefrom drops in payfor up to threemonths6
PeopleSupplySupplyDemandNew challenges in factoriesCommunityCashAgility for new demandProcurementNew sourcing routes for 1000sof key materialsSecured alternative suppliers7
PeopleSupplyHygieneDemandCommunityCashHousehold stockingOnline shoppingIn home cookingValue8
PeopleSupplyDemandCommunityCash9
PeopleSupplyDemandPublic service messagesCommunityCash 100m product donations10
5 workstreams: CashPeopleSupplyDemandCommunityCashAgile markets organisation11
Graeme PitkethlyUnilever Q1 2020 Trading Statement23rd April 2020
Q1 Trading updateUnderlying Sales GrowthImproving momentum and competitivenessprior to MarchFood service 0.0%Food outlets closed down in many marketsOut of home ice creamLimited sell-in ahead of summer season 0.2%ChinaNegative impact from late JanuaryIndiaUnderlying Volume Growth7 days of national lockdown at end of Q1Partially offset by household stocking13
Covid-19 impactsCategories & channels impacted differentlyCountries at different stages of the cycleHousehold stockinge.g. stockpiling dried foodsIncreased consumer usageIndiae.g. increased at home cookingDecreased consumer usageUKChinaRecoveryOutbreake.g. less hair washingBrazilUSAChannel switchinge.g. offline to onlineDuration and severity of cycle differs by countryChannels mostly closede.g. food service, out of home ice creamGreater impact from country lockdowns thancategory and channel shifts14
Beauty & Personal CareAnnual size ofbusinessHairDeodorantsSkin careSkincleansing annelTravel restrictionsimpacting Carver skin 5bnOral Care 1.5bnPrestigeClosure/some switching 0.6bn(incl. in hair &skin above)Approx. FY 2019 turnover, at FY’19 average rate15
Foods & RefreshmentAnnual size ofbusinessSavoury,dressings & teaIn home icecreamOut of home ge(1.7)%UVG(1.8)%Channel 11bn 4bnSome switchingChannels mostly closed 3bnChannels mostly closed 2.5bn(incl. in savoury,dressings & tea above)Approx. FY 2019 turnover, at FY’19 average rate, UFS included in other categories16
Home CareUSGAnnual size %ChannelLaundry 8bnHome &Hygiene 2bn17
Asia / AMET / RUBUSG6.0%6.3%5.6%2.1%(3.7)%S AfricaIndiaPhilippines VietnamChinaRecoveryOutbreakUPGIndonesia TurkeyRussia'19 Q2'19 Q3'19 Q4Thailand China: Significant decline, with restricted out ofhome eating and shopping trips India: Supply chain disruption following severelockdown SEA: Philippines & Thailand most impacted so farUVG'19 Q1S Korea'20 Q118
Latin eakUPGBrazilUVG'19 Q1'19 Q2'19 Q3'19 Q4'20 Q1EcuadorRecoveryRecoveryArgentina Relatively limited impact from Covid-19 in Q1 Small positive impact from household stocking,negative from ice cream Challenging conditions and currency devaluation19
North reakRecoveryRecoveryUSAUPGUVG'19 Q1'19 Q2'19 Q3'19 Q4 US Hotspots (dressings, ice cream, hair) continueshowing signs of improvement Household stocking across most categories inMarch Social restrictions later in quarter affecting foodservice and ice cream'20 Q120
EuropeUSG0.7%(1.6)%(0.3)%(0.8)%1.4%UK Spain GermanyOutbreakOutbreakUPGRecoveryRecoveryNL France ItalyUVG'19 Q1'19 Q2'19 Q3'19 Q4'20 Q1 Limited ice cream sell-in to retail ahead of Easter Household stocking in the UK Increased consumer demand in hygiene andfoods21
Q1 2020 turnoverUSG 0.0%(0.2)%0.8% 0.2%(0.4)%(0.2)%A & D 0.6% 12.4bn 12.4bn22
Strong balance sheet and liquidity positionLow gearingTotal cash & facilitiesAccess to fundingY/E ‘19 Net debt/EBITDATotal cash & undrawn facilitiesCommercial paper at 31/03/201.9x 11bn 2bnA1/A 2.8x coverage ofdebt maturingin 1 year 7bnCredit ratingAs of Y/E ‘19Accessible undrawn standby facilities23
Managing cash through uncertaintyReview sources & uses of cash Laser focus on receivables Reviewing our spend: Capex Restructuring Brand & marketingOperational cost disciplineReduce nonessential spendHiring freezeReallocate spendDialling up key categories:Tailoring communications:investment OverheadsTravel expenses24
Alan JopeUnilever Q1 2020 Trading Statement23rd April 2020
2020 outlook withdrawn2020 unknowns Progression of the virus Duration of crisis – varies by country Scale and impact of governmentcontainment measures Long term effect on consumer trends2020 knowns Ongoing challenges for out of homeice cream and food service Short term impact on consumptionhabits Importance of agility Strong cash and liquidity position26
What’s important for our business now5 Covid-19 workstreamsPeopleSupplyDemandCommunityCash5 growth fundamentals1234527
Looking forwards: Confidence for the long term High quality leadership teams on the ground A portfolio of trusted brands Financial stability 5 fundamentals of growth driving executionDelivering superior long-term financial performancethrough our sustainable business model28
Unilever Q1 2020Trading StatementAlan Jope & Graeme Pitkethly23rd April 2020
Unilever Q1 2020 Trading Statement. Alan Jope & Graeme Pitkethly 23rdApril 2020. Safe harbour statement. 2. 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’, .
