Unilever(UK)(US:UL)2021-02-05 20:22Financial Data and Key Metrics Changes - Underlying operating profit was €9.4 billion, up 0.7% at constant rates, and free cash flow reached a record €7.7 billion, an increase of €1.5 billion compared to the previous year [8][41] - Turnover for the full year was €50.7 billion, a decline of 2.4% driven by currency, while underlying sales growth was up by 1.9% [36] - Underlying earnings per share decreased by 2.4% due to a negative currency impact of 6.5%, but constant underlying earnings per share were up 4.1% [40] Business Line Data and Key Metrics Changes - Beauty & Personal Care grew 1.2% in the full year, with double-digit growth in skin cleansing, while the Prestige Beauty business was impacted by door closures but saw strong e-commerce performance [18][20] - Food & Refreshment division grew 1.3%, driven by price, with retail foods business growing 12% and ice cream sales remaining level year-on-year despite channel volatility [22][23] - Home Care grew 4.5% in the full year, driven by volume, with high demand for household cleaning products [25] Market Data and Key Metrics Changes - In North America, underlying sales growth was 7.7%, driven by strong consumer demand for in-home foods and ice cream, while Food Solutions and Prestige beauty businesses were negatively impacted by channel closures [33] - Latin America saw underlying sales grow 4.1%, with resilient growth in Brazil but significant volume declines in Mexico, Colombia, and Ecuador due to restrictions [31][32] - In Europe, underlying sales were down 1% for the year, driven by a deflationary environment, although the U.K. and Germany grew strongly [35] Company Strategy and Development Direction - The company aims to be the global leader in sustainable business, focusing on operational excellence and competitive growth [47][48] - Strategic choices include evolving the portfolio towards higher growth segments in hygiene, skincare, Prestige beauty, functional nutrition, and plant-based foods [78][81] - The company is committed to building a purpose-led organization and enhancing its digital capabilities to drive growth [99][100] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the unprecedented volatility and uncertainty of 2020 but expressed confidence in the company's ability to adapt to changing environments [45][46] - The company expects underlying sales growth to be ahead of market growth, targeting a range of 3% to 5% in the coming years [108] - Management highlighted the importance of sustainability and brand purpose in driving future growth and consumer engagement [85][90] Other Important Information - E-commerce grew by 61% in the full year, now making up 9% of the company's business, with strong growth across all regions [27][28] - The company is actively managing its portfolio, including the separation of its tea business and evaluating options for smaller brands [12][13] - The company has a healthy pipeline of savings programs expected to deliver €2 billion per annum, alongside a commitment to invest €1 billion per annum in assets and capabilities [110][111] Q&A Session Summary Question: What is the outlook for Unilever's growth in key markets? - Management emphasized strong positions in the U.S., India, and China, which are expected to account for a significant portion of global economic growth by 2030 [91][92][94] Question: How is Unilever addressing the challenges in the Prestige beauty segment? - The company noted that while the Prestige beauty business faced challenges due to lockdowns, e-commerce performance remained strong, with over 50% of sales now through online channels [20][21] Question: What are the company's plans for sustainability and brand purpose? - Management reiterated the commitment to sustainability as a core part of the business strategy, linking it to brand power and consumer engagement [56][59][88]