Unilever | H1 2024 | Results | Webcast & Q&A

In the introduction, an overview of the presentation's structure is provided. The focus is on achieving high-quality sales growth and expanding gross margin, facilitating increased brand investment. Positive sales growth and volume are highlighted, alongside a strong showing from key brands. Successful cost control and profitability improvement are noted, alongside sustainability progress in climate, plastics, nature, and livelihoods. The separation of ice cream and productivity improvement efforts are underway, highlighting ongoing areas for attention such as competitiveness.

The focus shifts to deeper financial analysis. Sales growth and volume improvement continue into the second quarter, supported by various business groups. Price growth has slowed due to changes in the commodity cycle. Personal Care and Health & Wellbeing show strong results, though some market challenges like deflation in India are noted. There's a focus on innovation and market expansion, though certain areas, such as ice cream, have underperformed due to market conditions in regions like Europe and China.

Further detailed analysis across different business segments and geographic regions is provided. Positive growth is noted in developed markets, with significant volume growth in Latin America. In Asia Pacific, sequential improvements are merit attention, though challenges in Indonesia persist. Africa and Middle East regions showcase strong performance. Overall, strong performance in key markets is highlighted, while the impact on turnover and operating profit is dissected with a focus on margin expansion and strategic investments.

Unilever's financial strategies and the impacts of acquisitions and currency fluctuations are detailed, alongside net finance cost and tax challenges. The outlook for the year remains conservative, with an emphasis on sales growth between 3-5%, mainly led by volume. Steps to achieve operating margin targets are shared, including insights into the Growth Action Plan, showcasing the strategic shifts being implemented across the organization to maintain and improve competitive positioning.

The Growth Action Plan's nine months of implementation is discussed, focusing on faster growth, a more streamlined business, and embedding a performance culture. Investments in power brands and the scaling of innovation are key. The discussion moves to 'unmissable superiority' across product elements and scaling Innovations, pointing towards technological advancements like biotechnology. The emphasis is on creating high growth and quality through innovative platforms and operational changes to support structural and cultural shifts.

Efforts to embed productivity improvements are deliberated, with consultations ongoing. The separation of ice cream is part of long-term strategic goals aiming to simplify operations and enhance accountability. The benefits of the Growth Action Plan are underscored, including the ongoing transformation into a long-term, high-performing organization. A recap of successes and ongoing efforts is shared, highlighting both completed and upcoming measures to support long-term business transformation.

The Q&A session opens with questions regarding growth prospects and margin expectations. Management clarifies the volume-led growth strategy, with no major changes anticipated in its price-volume mix. Further details reveal a focus on sustaining margin improvement despite competitive pressures. The plan's reliance on cost efficiencies and strategic marketing investments is reiterated, along with expectations for cautious second-half execution due to potential market challenges.

The discussion shifts towards the U.S. beauty market and marketing investment impacts. The beauty market slowdown is noted, though seen as non-structural, with targeted strategies in place. Insights into the market share strategy and recent performance trends reflect confidence in long-term improvement. The sector's competitiveness is a focal point, as is monitoring market share improvements. Management sets realistic expectations around ongoing challenges and the trajectory of market recoveries.

In response to inquiries about emerging markets and strategic focus, management reiterates the long-term attractiveness of these regions due to population growth and the emergence of a middle class. Despite external factors, investment in North America continues, particularly in scalable brands. The focus on leveraging geographical strengths ensures the company's robust positioning, underscoring the strategic importance of both developed and emerging markets for consistent growth.

The conversation continues with a spotlight on innovation and productivity initiatives. There is emphasis on portfolio renewal through innovation, alongside achieving operational efficiency across supply chain structures. Long-term capacity utilization and resource allocation strategies are aligned with gross margin expansion goals. These efforts are aimed at enhancing competitive offerings and scaling key innovations, driving sustainability and overall business health.

Management addresses the potential of new leadership in the nutrition sector and ongoing strategies in the ice cream business. Operational improvements in ice cream are noted, as are geographical challenges like those in China. Action plans to enhance product portfolio and market position are highlighted. Strategic focus on nutrition includes core brand growth and market responsiveness, with the ongoing transformation of these sectors seen as a linchpin for future stability and success.

Economic conditions affecting pricing and consumer behavior are discussed, with forward-looking insights into maintaining competitive pricing structures. The outlook for health and well-being and prestige products remains positive, supported by international market scaling strategies. Emphasis on continued investment in key growth engines aligns with ambitions to retain strong market positions. The reflection on consumer trends emphasizes adaptability amidst changing market dynamics.