Core Insights - Unilever is focusing on premium segments and digital commerce, while McCormick needs to demonstrate gross margin recovery amidst ongoing challenges [1] Group 1: Company Performance - Unilever reported underlying sales growth of 3.5% and volume growth of 1.5% for FY2025, with Q4 showing an acceleration to 4.2% underlying sales growth [1] - McCormick achieved full-year revenue of $6.84 billion, up 1.73%, with its Consumer segment leading at $1.127 billion in Q4, up 3.9% [1] - Unilever's gross margin stood at 46.9%, while McCormick's gross margin contracted to 38.9% in Q4, down 130 basis points [1] Group 2: Strategic Moves - Unilever is narrowing its focus by acquiring premium personal care brands and initiating a €1.5 billion share buyback starting in Q2 2026 [1] - McCormick is expanding through the acquisition of McCormick de Mexico, which is expected to add 11-13% to reported net sales growth in FY2026 [1] Group 3: Future Outlook - McCormick's ability to recover gross margins is critical, with CEO Brendan Foley emphasizing the need for continued top-line momentum and strong operating profit performance [1] - Unilever faces currency headwinds in Latin America and India, with 2026 guidance targeting the lower end of its 4-6% growth range [1] Group 4: Valuation Comparison - McCormick's stock has dropped nearly 16% year-to-date, with a consensus target of $73.85, indicating potential upside if margins recover [1] - Unilever trades at a forward P/E of about 18x with a 3.4% dividend yield, presenting a cleaner post-demerger story and better margin visibility heading into 2026 [1]

Core Insights - Unilever PLC has initiated a transformative five-year partnership with Google Cloud to leverage advanced AI and data technologies for revolutionizing consumer goods [1][2] - The collaboration aims to enhance Unilever's brand portfolio, including brands like Dove and Vaseline, by creating a new model for consumer engagement [1][3] Strategic Alliance - The partnership will migrate Unilever's data and cloud platforms to Google Cloud, establishing an AI-first digital infrastructure [2] - This move is expected to enhance Unilever's ability to generate demand, gain insights, and adapt swiftly to market changes [3] Leadership Commentary - Unilever's chief supply chain and operations officer, Willem Uijen, highlighted AI's role in shaping brand discovery and consumer choice [4] - The collaboration is structured around three key pillars: agentic commerce, integrated data systems, and advanced AI, aimed at keeping Unilever at the forefront of technological advancements [4] Marketing Intelligence and Competitive Edge - The partnership will enhance marketing intelligence, integrate data platforms, and accelerate the use of cutting-edge AI technologies [6] - This approach is designed to maintain Unilever's competitive advantage in the fast-moving consumer goods market by combining its industry expertise with Google's technological capabilities [6][5]

Unilever Conference Call Summary Company Overview - **Company**: Unilever - **Business Size**: Approximately €51 billion with a 20% operating margin and over €10 billion in underlying operating profit [4][62] - **Global Presence**: Operates in 185 countries, serving 3.7 billion consumers daily [4] Key Changes and Strategic Focus - **Leadership Changes**: New CEO and CFO have been appointed, leading to a refreshed strategic direction [1][18] - **Portfolio Simplification**: Transitioned from a geographically-led model to a category-led organization, rotating 15% of the portfolio, including the demerger of the ice cream business [5][6] - **Volume Growth Focus**: Volume growth is now the primary metric for success, contrasting with past inconsistencies [5][6] - **Investment in Brands**: Competitive investment levels in brands have been restored, with 16% of revenue allocated to brand marketing [12][17] Market and Growth Strategy - **Target Categories**: Increased focus on beauty, personal care, and wellness, which now constitute 51% of the portfolio, with a goal to reach two-thirds [7][8] - **Geographical Focus**: The U.S. and India are identified as key markets, currently representing 33% of the business, with plans to increase this to 45% [8][9] - **U.S. Market Strategy**: The U.S. is seen as a critical market for building a scalable business and international brand portfolio [9][32] Financial Performance - **Cash Flow**: Achieved €6 billion in cash flow last year, with a 100% cash conversion rate [4] - **Shareholder Returns**: €6 billion returned to shareholders over the past two years, split 75% dividends and 25% share buybacks [4] - **Gross Margin Improvement**: Expanded gross margin by 460 basis points, with two-thirds of this increase reinvested into brand marketing [12][13] Innovation and Marketing - **Innovation Strategy**: Focus on superior science and aesthetics in product development, with significant investment in R&D [19][20] - **Digital and Social Media Engagement**: Increased content creation and engagement through social media, with 180,000 content creators in the beauty division [25][26] - **Consumer Engagement**: Shift towards a more community-driven marketing model, leveraging partnerships and cultural relevance [37][38] India Market Insights - **Market Potential**: India is projected to be the third-largest market globally, with significant growth opportunities [44][45] - **Market Leadership**: Unilever holds leading positions in various categories, with 85% of the business being number one in its segments [45] - **Digital Transformation**: Rapid digitization and a shift towards premium products are driving growth in India [46][47] Future Outlook - **Growth Projections**: Anticipated USG between 4%-6% for the upcoming year, with a focus on outperforming market growth [62] - **Continued Investment**: Plans for a €1.5 billion share buyback to enhance shareholder value [62] - **Long-term Strategy**: Emphasis on maintaining a leaner, stronger business model while leveraging emerging market advantages [63]

Core Insights - Unilever is transforming its business operations around emerging technologies, particularly focusing on agentic AI through a partnership with Google Cloud [3][4] - The company aims to enhance demand generation and create targeted marketing content by deploying AI across its operations [4][5] Group 1: AI Strategy and Implementation - Unilever's strategy includes training over 23,000 employees on generative AI tools and launching more than 500 AI projects globally [5] - The company has utilized AI to improve social engagement, enhance marketing efforts, and reduce waste in its manufacturing facility in Hefei, China [5] Group 2: Partnership with Google Cloud - The partnership with Google Cloud is a five-year initiative aimed at migrating Unilever's data and cloud platform to Google Cloud, utilizing tools like Vertex AI [6][7] - This collaboration is expected to create a new agentic model for consumers to discover and shop for packaged goods, enhancing Unilever's marketing capabilities [6][7] - The deal is designed to help Unilever remain agile and unlock value at every level of the company [7]

Core Insights - Unilever reported a turnover of EUR 50.5 billion, a decrease of 3.8% year-over-year, primarily due to a 5.9% foreign exchange headwind, but turnover rose 2.3% when excluding currency effects [1][6] - The company achieved underlying sales growth of 3.5% for the full year, with a notable improvement in the fourth quarter, where underlying sales growth reached 4.2% [3][4] Financial Performance - Free cash flow was EUR 5.9 billion, achieving 100% cash conversion, with a year-end net debt of EUR 23.1 billion, reflecting a net debt to EBITDA ratio of approximately 2x [6][16] - Unilever returned EUR 6 billion to shareholders in 2025, consisting of EUR 4.5 billion in dividends and EUR 1.5 billion in share buybacks [17] Brand and Sales Growth - Unilever's "30 Power Brands," which account for over 78% of group turnover, experienced a 4.3% underlying sales growth for the full year, with a significant acceleration to 5.8% in the fourth quarter [2] - The Beauty and Wellbeing segment delivered 4.3% underlying sales growth, with double-digit growth from brands like Dove and Vaseline [8] Regional Performance - Developed markets contributed 41% of turnover, achieving 3.6% underlying sales growth, with North America showing a standout performance of 5.3% growth [13] - Emerging markets, which made up 59% of turnover, delivered 3.5% underlying sales growth for the year, accelerating to 5.8% in the fourth quarter [14] 2026 Outlook - Management targets underlying sales growth at the bottom of the 4-6% range for 2026, with a focus on volume growth of at least 2% and modest margin improvement [5][19] - A new EUR 1.5 billion share buyback was announced for 2026, emphasizing ongoing portfolio focus in Beauty and Wellbeing, Personal Care, and premium segments [21]

Financial Data and Key Metrics Changes - For the full year, underlying sales growth was 3.5%, with volumes at 1.5% and price at 2% [5] - Turnover for the full year was EUR 50.5 billion, down 3.8% versus the prior year, primarily due to significant currency headwinds [25] - Underlying operating margin expanded by 60 basis points to 20% in 2025, reflecting a structurally strong margin profile [26] - Underlying EPS rose to EUR 3.08, up 0.7% versus the prior year, with sales growth and margin expansion contributing 6.5% to EPS growth [28] Business Line Data and Key Metrics Changes - Beauty and Wellbeing delivered underlying sales growth of 4.7% for the full year, with volumes up 2.8% [10] - Personal Care delivered underlying sales growth of 4.7% for the full year, driven by strong performance in the U.S. [11] - Home Care delivered underlying sales growth of 2.6% for the year, primarily volume-led at 2.2% [14] - Foods delivered underlying sales growth of 2.5% for the year, with 0.8% from volume and 1.7% from price [16] Market Data and Key Metrics Changes - Developed markets delivered underlying sales growth of 3.6% for the year, while emerging markets delivered underlying sales growth of 3.5% [19][21] - In North America, underlying sales grew 5.3% for the year, with volumes contributing 3.8% [20] - In Asia Pacific Africa, underlying sales growth was 4.6% for the year, with volumes contributing 3% [21] - Latin America saw underlying sales growth of 0.5% for the year, reflecting a broad-based market slowdown [23] Company Strategy and Development Direction - The company aims to focus on beauty, wellbeing, and personal care, with an emphasis on premium segments and digitally native brands [32][34] - The company completed the demerger of ice cream and 10 transactions to sharpen its portfolio and increase focus on growth [34] - The company is committed to a disciplined capital allocation strategy, focusing on growth and productivity while delivering attractive capital returns [31][44] Management's Comments on Operating Environment and Future Outlook - The management expressed confidence in emerging markets, expecting volume growth of at least 2% in 2026 [36] - The company anticipates underlying sales growth for 2026 to be at the bottom end of the multi-year range of 4%-6% [36] - Management acknowledged challenges in developed markets but emphasized the strength of their portfolio and execution [38] Other Important Information - Free cash flow for the year was EUR 5.9 billion, representing 100% cash conversion [29] - The company has delivered more than EUR 670 million of savings from its productivity program, ahead of schedule [27][59] - The company plans to continue investing in brand and marketing, with 16.1% of turnover allocated to these areas, the highest percentage in over a decade [27] Q&A Session Questions and Answers Question: Emerging market outlook for 2026 - Management expressed confidence in emerging markets, noting improvements in India and Indonesia, and a gradual recovery in China [51][52][53] Question: Pricing outlook for 2026 - Management expects pricing growth to be around 2% for 2026, with some increased promotional spending noted [64] Question: Key building blocks for margin improvement in 2026 - Management highlighted the importance of gross margin expansion, productivity savings, and disciplined pricing as key factors for margin improvement [66][68]

Financial Data and Key Metrics Changes - For the full year, underlying sales growth was 3.5%, with volumes at 1.5% and price at 2% [5] - Turnover for the full year was EUR 50.5 billion, down 3.8% versus the prior year, primarily due to significant currency headwinds [25] - Underlying operating margin expanded by 60 basis points to 20% in 2025, reflecting a structurally strong margin profile [26] - Underlying EPS rose to EUR 3.08, up 0.7% versus the prior year, with sales growth and margin expansion contributing 6.5% to EPS growth [28] Business Line Data and Key Metrics Changes - Beauty and Wellbeing delivered underlying sales growth of 4.3%, evenly split between volume of 2.2% and price at 2.1% [10] - Personal Care delivered underlying sales growth of 4.7% for the full year, with price contributing 3.6% and volumes growing 1.1% [11] - Home Care delivered underlying sales growth of 2.6% for the year, primarily volume-led at 2.2% [14] - Foods delivered underlying sales growth of 2.5% for the year, with 0.8% from volume and 1.7% from price [16] Market Data and Key Metrics Changes - Developed markets delivered underlying sales growth of 3.6% for the year, with North America being a standout performer [19] - Emerging markets delivered underlying sales growth of 3.5% for the year, accelerating to 5.8% in the fourth quarter [21] - In India, underlying sales grew 4% for the year, with volumes up 3% [22] - In China, underlying sales growth was flat for the year, but improved in the second half, including mid-single-digit growth in the fourth quarter [23] Company Strategy and Development Direction - The company aims to sharpen its portfolio, having rotated 15% of the total portfolio in 2025 through acquisitions and disposals [3] - Focus remains on beauty, wellbeing, and personal care, with an emphasis on premium segments and digitally native brands [34] - The company is committed to a disciplined capital allocation strategy, prioritizing growth and productivity while delivering attractive capital returns [31] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in emerging markets, expecting volume growth of at least 2% in 2026 [36] - The company anticipates underlying sales growth for the full year to be at the bottom end of the multi-year range of 4%-6% [36] - Management highlighted the importance of maintaining a focus on volume-led growth and margin expansion [43] Other Important Information - Free cash flow for the year was EUR 5.9 billion, representing 100% cash conversion [29] - The company completed an eight-for-nine share consolidation in December 2025 following the ice cream separation [29] - The productivity program has delivered more than EUR 670 million of savings, with a commitment to complete EUR 800 million by 2026 [27][59] Q&A Session Questions and Answers Question: Emerging market outlook for 2026 - Management expressed confidence in emerging markets, noting improvements in India and Indonesia, and a gradual recovery in China [51][52][53][54] Question: Pricing outlook for 2026 - Management expects pricing growth to be around 2% for 2026, with some increased promotional spending noted [62][64] Question: Key building blocks for margin improvement in 2026 - Management highlighted a structurally high gross margin and ongoing productivity initiatives as key factors supporting margin improvement [66][68]

Financial Data and Key Metrics Changes - For the full year, underlying sales growth was 3.5%, with volumes at 1.5% and price at 2% [4] - Turnover for the full year was EUR 50.5 billion, down 3.8% versus the prior year, primarily due to significant currency headwinds [23] - Underlying operating margin expanded by 60 basis points to 20% in 2025, reflecting a structurally strong margin profile [24] - Underlying EPS rose to EUR 3.08, up 0.7% versus the prior year, with sales growth and margin expansion contributing 6.5% to EPS growth [26] Business Line Data and Key Metrics Changes - Beauty and Wellbeing delivered underlying sales growth of 4.7% for the full year, with volumes up 2.8% [8] - Personal Care delivered underlying sales growth of 4.7% for the full year, driven by strong performance in the U.S. [9] - Home Care delivered underlying sales growth of 2.6% for the year, primarily volume-led at 2.2% [11] - Foods delivered underlying sales growth of 2.5% for the year, with 0.8% from volume and 1.7% from price [13] Market Data and Key Metrics Changes - Developed markets delivered underlying sales growth of 3.6% for the year, with North America being a standout performer [16] - Emerging markets delivered underlying sales growth of 3.5% for the year, with growth accelerating to 5.8% in the fourth quarter [18] - In India, underlying sales grew 4% for the year, with volumes up 3% [20] - In China, underlying sales growth was flat for the year, but showed improvement in the second half [21] Company Strategy and Development Direction - The company aims to focus on premium segments, digitally native brands, and dCommerce exposure, particularly in the U.S. and India [31] - The company is committed to simplifying its portfolio through targeted disposals while pursuing bolt-on acquisitions aligned to its strategy [32] - The company expects underlying sales growth for 2026 to be at the bottom end of the multi-year range of 4%-6% [34] Management's Comments on Operating Environment and Future Outlook - The management expressed confidence in emerging markets, citing improved performance and brand equity in India and Indonesia [49][50] - The management acknowledged challenges in developed markets but noted strong execution and brand performance in North America [53] - The company anticipates inflationary pressures in select commodities for 2026, but overall inflation is expected to be lower than in 2025 [34] Other Important Information - Free cash flow for the year was EUR 5.9 billion, representing 100% cash conversion [28] - The company returned EUR 6 billion to shareholders in 2025, comprising EUR 4.5 billion in dividends and EUR 1.5 billion in share buybacks [31] - The company completed the ice cream demerger and 10 transactions during the year, significantly increasing focus on growth [32] Q&A Session Questions and Answers Question: Can you talk about the emerging market outlook for 2026? - The management expressed confidence in emerging markets, highlighting improved performance in India and Indonesia, and a gradual recovery in China [49][50] Question: Can you discuss the pricing outlook for 2026? - The management expects pricing to be around 2% for 2026, with some increased promotional spending, particularly in foods [60] Question: What are the key building blocks supporting confidence in achieving margin improvement in 2026? - The management highlighted consistent gross margin expansion, productivity savings, and disciplined capital allocation as key factors supporting margin improvement [63][64]

Core Insights - Unilever's beauty and well-being division outperformed the overall company growth in 2025, with underlying sales increasing by 4.3% to 12.8 billion euros, driven by both volume and price growth [1] - The beauty and well-being segment contributed 25% to Unilever's total turnover, with an underlying operating profit of 2.5 billion euros, reflecting a 3.2% year-on-year decline [2] - Overall, Unilever's underlying sales rose by 3.5% to 50.5 billion euros, primarily due to higher prices, with power brands like Dove and Vaseline accounting for 78% of turnover [3] Financial Performance - The beauty and well-being division's growth was supported by double-digit increases in wellness products, Vaseline, and Dove, while prestige beauty and core skin care experienced low-to-mid single-digit growth [1] - The underlying operating margin for the beauty and well-being division decreased to 19.2%, impacted by a slight decline in gross margins and increased brand and marketing investments [2] - Unilever's power brands achieved a 4.3% underlying sales growth, primarily driven by volume, highlighting their significance in the company's overall performance [3] Strategic Initiatives - CEO Fernando Fernandez emphasized Unilever's transformation into a "simpler, sharper and faster company," focusing on volume growth, positive mix, and strong gross margins [4] - The company is prioritizing growth in beauty, well-being, and personal care, with a focus on premium segments and digital commerce, particularly in the U.S. and India [4] - Unilever plans to streamline operations by cutting 7,500 office-based roles globally, aiming for total cost savings of around 800 million euros between 2024 and 2027 [5]

Full Year 2025 Results 12 February 2026 Fernando Fernandez & Srinivas Phatak 1 Safe harbour statement This presentation may contain forward-looking statements within the meaning of the securities laws of certain jurisdictions, including 'forward-looking statements' within the meaning of the United States Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. Words and terminology such as 'will', 'aim' ...