supply chain: the growth engine of...
TRANSCRIPT
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SUPPLY CHAIN: THE GROWTH ENGINE OF UNILEVER
PIER LUIGI SIGISMONDICHIEF SUPPLY CHAIN OFFICER, UNILEVER
FUNDACAO GETULIO VARGAS, BRAZIL, JUNE 2013
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2bnconsumers
everyday
55%sales in emerging
markets
190countries
14 € billion brands
WELL POSITIONED FOR GROWTH
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BALANCED SCALE ACROSS CATEGORIES
Personal Care
35% of sales
Foods
28% of sales
Home Care
18% of sales
Refreshment
19% of sales
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BALANCED SCALE ACROSS GEOGRAPHIES
Asia/Africa/RUB40% of sales
Europe27% of sales
Americas33% of sales
North
America
Europe
North
Asia
SEAASouth
Asia
NAMET &
RUB
Africa
Latin
America
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IN 2009 WE SET OUT TO MAKE UNILEVER
‘FIT TO COMPETE’
Sustainable, Profitable, Growth
€40bn
€80bn
environmental impact
An inspiring visionGrowth as primary goal
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GETTING UNILEVER TO GROW AGAIN:
• Drive fewer, bigger, better Innovations
• Drive basics in execution
• Make structure & organisation work
• Drive performance culture
• Drive people agenda to competitive levels
Virtuous Circle of Growth
SUSTAINABLELIVING
PROFITABLEVOLUMEGROWTH
COSTLEVERAGE +EFFICIENCY
INNOVATION +MARKETINGINVESTMENT
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Underlying sales growth
120bps
2009 - 2012
€10billion
2009 - 2012
+
RESULTS SPEAK FOR THEMSELVES
Growth ahead of our markets
Core operating margin Turnover increased
3,54,1
6,5
10,5
2009 2010 2011 2012
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DESPITE CHALLENGES ALONG THE WAY
Commodity Cost Inflation
Euro-zone Crisis
Slowdown in Emerging Markets
Growing Social Inequality
Threat to Planetary Boundaries
VOLATILITY & UNCERTAINTY: THE NEW NORM
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Improved product quality
95% win or parity in blind tests
Innovation delivery
Average value per project up 75%
Strong in-market execution
>5M perfect stores
OUR STRATEGY IS WORKING
Perfect Stores
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WE HAVE CREATED UNPRECEDENTED VALUE
FOR SHAREHOLDERS
x2
Share price double that
of early 2009
$100bn+
Added 33% & nearly $40bn over last 3 years
Share price Market capitalisation
1350
2833
2009 2012
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SUPPLY CHAIN HAS BEEN THE BACKBONE
OF THIS SUCCESS...
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Our contribution to sustainable & profitable growth for Unilever…
GROWTH MARGIN & CASH USLP
2009 2015
GROSS MARGIN
%TO
SA
LE
S
1 2 3
ENVIRONMENTAL IMPACT
InnovationService + Quality
Savings & Cash Sustainability
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Higher perceived Quality by our consumers...
'09 '12
Incidents
- 75%
'09 '12
-28%
Complaints Product Superiority
17%
57%
Baseline '12
Win
Parity
Loss
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More products on shelf = More Growth...
'08 '12
On Shelf Availability
800bps All Countries
All Channels
Joint efforts w/ Customers
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OSA clearly drives tangible Top Line Growth:
Successes in D and D&E markets
2010 2012
OSA 94.3% 97.2%
Growth +3.3%
2010 2012
OSA 86.8% 95.2%
Growth +30%
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Unilever is clearly ranked
No.1 in ‘Global Logistics
& Supply Chain’ 2012.
81% of respondents consider us favorably,
none consider us
unfavorably
2012 2011
2012 Advantage Global Retailer Relationships Program Ranking
Customers are rating us higher...
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'08 '11
We are investing for Growth...
Focus on D&E
14 new sites built since 2008
World Class standards +76%
Capital Expenditure
‘12'08 '12
Return on Assets
+190bps
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'08 '12
Powerhouse of Savings & Cash delivery...
Cash Conversion Cycle (Days)Savings Delivery (€bn)
+78%
% TO
'10 '12
1.9% 2.8%
-32 Days
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'08 '12
...with less Restructuring of our asset base
Focus on Growth
Asset flexibility
Competitiveness through Manufacturing Excellence
Restructuring (€bn)
-37%
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…improving Margins & Cash Flow
'09 '12
Free Cash Flow (€bn)(2009-12)
Core Operating Margin (%)
+120 bps
€15bn~
Trade Working Capital (€bn)
-1,7 -1,9 -1,6-2,6
‘09 ‘10 ‘11 ‘12
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Supply Chain has played a pivotal role in Unilever’s sustainability agenda...
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Taking a holistic approach to sustainability
26% 3% 2% 68% 1%GHGcontribution
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- 800k tons CO2 26% energy from renewables Zero waste in 1/2 of sites
60% paper & board
certified or recycled
Over half Lipton teabags contain
Rainforest Alliance Certified™ tea
1/3 agricultural materials
sustainably sourced100% sustainable palm
Global super-sector
leader in F&B 2012-13
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Our Sources of Competitive Advantage
Global Scale, Local Agility Partner to WinSpeed
USLP Talent Powerhouse
1 2 3
4 5
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Global Scale
A phenomenal international operations network
GLOBAL SOURCING
Consistent Quality Standards
Cost & Speed
Capital Efficiency
LOGISTICS HUBS
Global/Regional Hubs
High Service Standards
Less Environmental impact
PROCUREMENT
€33bn spend: 95% centrally bought
Ability to absorb VUCA shocks
Industry-wide Sustainability
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55%
Category
Local Agility
Unique market penetration to leverage growth opportunities
Premium Hair
Mass Hair
Geographic
Remote
Urban
Channel
Drug Channel
Mom + Pop Grocery
Portfolio
GM: 55.5%
Personal Care
Laundry Care
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PC in Drugstore ChannelDrives Service, Sales Growth and
Customer SatisfactionSpecialized Distribution
1st in Advantage2011 & 2012
• Dedicated carriers and drivers• Customized picking and pallets• Special KPI´s – Perfect Delivery• Collaborative “OOS Programs”
Segmentation supply chains drive growth
Brazil Drugstore example
CCFOT:75%94%
Growth:+30%
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Speed is our Currency
FASTER INNOVATIONS
Time to market: < 50%
New capabilities for speed: moulds, capacity
Innovations landing in 10+ markets: 9 in 2009 90 in 2012
Axe Apollo – 60markets in 3 months!
RAPID INDUSTRIALISATION
Ground-breaking Commissioning in 6 months Full scale production<12 months
Pre-fabricated, modular hi-tech facilities, shipped across the world- Only 20% of job done on site
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Partner to Win with Suppliers
Becoming partner of choice, creating an edge.
GROWTH & INNOVATION
Suppliers engaged >74% of innovation pipeline
€1.3b investment, 40+ plants
KNOW-HOW & ASSETS
Partner of choice: 86% of suppliers
Prime access to capacity & new technologies
SUSTAINABILITY
1.3m smallholder farmers
Long-term commitments
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Talent Powerhouse…ever strengthening
GLOBALLY INTER-DEPENDENT INTERNATIONAL CAREERS ADVANCED SKILLS
Highly engaged employees Integrated approach to developing skills
• Proactive recruitment• Career Roadmaps• Succession plans
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…and our progress increasingly being recognised externally
Innovation Execution People
• Dove: 17 Awards
• Digital marketer of the year
• Advantage: #1
• Gartner: #4 in world , #1 FMCG
• Preferred supplier in the UK
• Linked In: #5 in demand employer
• Top employer in 27 markets
Supply Chain
Top25
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We aspire to become THE BEST in the industry
STANDARDS
Strive for Perfection
Performance Culture
COMMITMENT
Determination & Discipline
Clarity of Purpose
PASSION TO WIN
Hunger for success
Winning Mindset
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THANK YOU