North America: C4G Building a Stronger, Faster Growing, More Agile Business Kees Kruythoff 1
The US leadership Team Kees Kruythoff Esi Eggleston Bracey Alfie Vivian Matthew McCarthy President North America EVP & COO Personal Care NA VP Refreshments NA VP Foods NA Gina Boswell Ivar Blanken Reginaldo Ecclissato Wendy Herrick EVP Customer Development CFO North America EVP Supply Chain NA & LA VP Supply Chain GTM US Jonathan Atwood Steve Rapp Mike Clementi Kathy O’Brien VP Comms & Sustainability NA General Counsel NA CHRO North America VP Consumer Services & Skin Care 2
North America Business Overview $9B in Turnover USA #1 UL Country 14% 15% One cluster, 2 countries 19% % of Global Contribution 90% US, 10% CA Turnover Profit Cash 20% of Global Personal Care and Refreshments 5 global brands “made in the USA” 3
US Category Shape Foods Refreshments Home Care Personal Care TO: $1bn TO: $2bn TO: <$0.3bn TO: $5bn 4
Unilever USA a true Unilever stronghold … … and future-proofing the portfolio and its capabilities 5
Objectives WINNING in America is strategically important, especially in a leading edge and fast-changing market 6
U.S. Market Context Growth Rate Polarities in Society 2-3% GDP growth Political and income polarization within the US is rising Digital Revolution Living Differently Technology is changing the consumer US identity changing with the power of engagement and expectations millennials and multicultural population 7
Hyper-fragmentation in the Marketplace Fragmentation of Consumer Media Fragmentation Channel Fragmentation Decision Journey Communication channels Retail revolution in full swing Radically changing path to changing purchase 17% of our categories already in emerging channels 8
… resulting in different Winners and bigger Swings Greater consumer Challenger brands Broader PC Alternative channels expectations and outpacing established Competitors are driving evolving trends brands and 3G in Food disproportionate growth 3G in Food 9
The Unilever U.S. Strategy Journey 2016-2020 2012-2015 Pre-2011 Unlocking Full Potential Investing Back Profit & Cash through C4G 10
Good progress with key Stakeholders Pre-Invest Back Today Market Leader in 4 of 15 Market Leader in 8 of 10 Consumers Categories Categories Customer Dispatch rate 98% Dispatch rate <92% Service #1 Gartner #27 #4 Customers Advantage Report Advantage Report Top 10 Employer of #147 #75 Choice Universum Universum Sustainable #1 #12 GlobeScan GlobeScan Living 11
Consistent improvement in Cost, Cash, and Profit UOM Supply Chain Controlled Cost +420bps >20% -440bps 2013 2014 2015 2016 2017 FC 2013 2017 FC Gross Margin Cash Conversion Cycle +460bps 10 days -12 days 2013 2017 FC 2013 2014 2015 2016 2017 FC 12
Market Share trend – 2010 / 2016 / YTD 2017 Hair Skin Cleansing Deodorants +30bps +270bps +160bps +10bps +1220bps +380bps 45.9% 43.2% 35.8% 35.7% 27.5% 27.8% 39.4% 34.1% 15.7% Mayonnaise Ice Cream +260bps +90bps +330bps -70bps 46.6% 25.2% 45.7% 24.5% 43.1% 21.9% 13
Strong Market Leadership positions in USA #1 R.M.S Brand 1 Brand 2 1.1 Hair Deo 1.3 Personal Care 3.3 Skin Cleansing Skin Care 1.5 Mayonnaise 1.4 Savoury Food & Refreshment 2.0 Tea Ice Cream 1.2 14
However, still need to Accelerate Growth USG % UL USA Core 1.6% 1.0% 0.8% <1% -1.3% 2013 2014 2015 2016 2017 FC +0.1% +0.1% +0.9% N.A total -2.4% Note: UL USA Core represents USA excl. BCS & Professional 15
Key Successes Innovation 2017 Dove Masterbrand E-commerce growth Deo Growth 9% 6% $170m 45% Incremental turnover Omni-channel D2C Note: numbers represent underlying sales growth YTD 2017 16
Key Challenges Leaf Tea Category Ice Cream Category Grocery Channel Skin Care Category -$50M 1. Core renovation 2. PC Conversion 3. Net Revenue Management 17
Missing two “1 percents ” UL USA Core 1.6% + 1.0% 0.8% <1% 2013 2014 2015 2016 2017 FC + M&A: Portfolio -0.6% going forward The first 1% The second 1% Outperform markets by 1% M&A and Channels make 1% 18
The Model: ‘Core, then more…plus M&A’ Core of the Core Beyond Core through C4G Joining Unilever 19
Bigger & Better Innovations Personal Care Refreshments Foods 20
Win in Core Channels and Build Channels for future Growth Core Channels Health & Beauty 2-3% Growth with top 2 customers Close fair share gap 25.8% 24.6% 23.0% 2013 2015 2017 YTD 21
C4G will help us Pivot to New Growth Channels Naturals Channel E-commerce to E1bn+ 2013 2017 2020 2013 2017 2020 $5m $5m $1bn+ $10m $500m $5M $55M $200M Winning with 10.8% 43.4% 33.3% UL PW #1 UL Hair #1 UL Deo #1 22
Step up Capabilities Net Revenue Management Fragmented Channel Capability Digitize Unilever Consumer Centric Data for Growth 23
ZBB Delivering $170m Efficiencies in 2017 BMI Logistics Overheads 24
The “second 1%” …… shaping our Portfolio U.S. acquisitions since 2015 Naturals Acquired turnover €1bn New channels Like for like growth 10% Premium price brands in mass 25
In Summary We invested back for Growth in America and have built a stronger business We are embracing a faster pace of change and C4G helps unlock our full potential: • Categories • Channels • Capabilities 5S, zero based budgeting and net revenue management unlock value Unilever US is BUILDING a stronger, faster growing, more agile business 26
North America: C4G Building a Stronger, Faster Growing, More Agile Business Kees Kruythoff 27
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