Unilever PLC (UL) Presents at Barclays Fireside Chat Conference (Transcript)

Unilever PLC Conference Call Summary Company Overview - Company: Unilever PLC (NYSE: UL) - Date: December 14, 2023 - Participants: Hein Schumacher (CEO), Warren Ackerman (Barclays) Key Points Strategic Changes and Growth Action Plan - Unilever is implementing a Growth Action Plan (GAP) aimed at improving performance and closing the valuation discount [5][10] - The company is focusing on fewer initiatives with greater impact, prioritizing resources on the top 30 brands [4][5] - A significant leadership overhaul has occurred, with 60-70% of the team changed to drive the new strategy [4][10] Financial Performance and Market Share - Unilever reported an inflection point in gross margin at the beginning of 2023, indicating positive momentum [6][26] - The company acknowledged a decline in market share, currently at 38%, down from 58% over the past several quarters, and aims to improve this metric [21][22] - The top 30 brands, which represent over 70% of revenue, are growing faster than the company average, indicating potential for recovery [22][27] Investment and Resource Allocation - Unilever is committed to increasing investments in advertising, research and development (R&D), and capital expenditures, with a focus on the top brands [24][28] - R&D spending is set to increase from 1.6 billion to support innovation, while capital expenditure will rise from 2.7 billion to between 3 and 3.5 billion [28][29] Cultural and Organizational Changes - The company is working to change its culture to enhance accountability and speed in decision-making, moving away from a complex matrix structure [15][20] - Remuneration will be tied more closely to performance, with a shift from a narrow payout corridor to a more differentiated approach [19][20] Market Dynamics and Competitive Landscape - Unilever faces challenges in Europe, where volume has declined by 11% in the last quarter, partly due to pricing pressures and SKU reductions [49][51] - The company is focusing on premiumization strategies in both emerging and developed markets, with a cautious approach to expanding prestige brands [37][39] Regional Insights - India remains a key growth market, with expectations for continued strong performance despite short-term pricing pressures [53][56] - Indonesia has stabilized after a period of share loss, with new leadership and strategies being implemented to improve performance [60][61] - In China, Unilever is focusing on organic growth and leveraging strong brand positions without major acquisitions [63][64] Innovation and Product Development - Unilever aims to increase the size of its innovation pipeline to five times the 2020 baseline, focusing on breakthrough innovations [33][34] - The company is actively measuring consumer perceptions across various product dimensions to enhance brand superiority [30][32] Conclusion - Unilever is undergoing significant strategic and organizational changes aimed at revitalizing growth and improving market share. The focus on fewer, high-impact initiatives, along with increased investment in key areas, positions the company for potential recovery and long-term success.