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Becoming The Best
Unilever Supply Chain
Pier Luigi Sigismondi
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We are now Playing to Win
Supply ChainCreating Value
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Winning is about
Sustainable Profitable Volume Growth
2009 2015
Gross Margin
%TO
EnablingGrowth
DrivingGrowth
FundingGrowth
ImprovingMargin
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Consistent Improvement in Quality
2009 2010 2011
Product Incidents
-68%
2009 2010 2011 YTD
Consumer Complaints
1.9%
-28%
YTD
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Enabling Growth through Quality ExcellenceLifebuoy Case
Consistent Quality
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Enabling Growth through Quality ExcellenceLifebuoy Case
Market Share >+80bps
Better consumer
AttributesImproved Fragrance & BarStructure
Consistent Quality
+ =
Continuous improvement in all categories
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Consistent Product Availability improvement
2008 2011 YTD
On Shelf productAvailability More and More Stores
From 5 to 20 Countries
+700bps
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Driving growth through Service Excellence
2011 2015
On Shelf productAvailability Channels
Modern Trade
All Channels
From 20 to >150 Countries
Potential of 360bps UVG
+400bps
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Superior Service in difficult timesFlood in Thailand
Unilever Thailand
# 1
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Consistent Working Capital improvement
Top League performance
-10%
-6%
-2%
2%
-2000
-1000
0
1000
2008 2009 2010
Closing WC Mio Euros WC %TO
+2.1bn
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Consistent Working Capital improvement
Top League performance
-10%
-6%
-2%
2%
-2000
-1000
0
1000
2008 2009 2010
Closing WC Mio Euros WC %TO
Funding growth through Excellencein Cash Management
+2.1bn
Mexico Case
Integrated Business Planning
&Customer Integration
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Step-up in CapEx to fuel growth
Increased focus on D&EIncreased focus on
growth and innovation
2008
Developed D&E
2008 20112011
+70%
+30%
Infrastructure and Savings
Growth and Innovation
IT
+40%
+70%
+50%
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Increasing savings
2006-2008 2009-2011
Sustainable Step Up in SC Savings
1.9% +47%
2.8%
but not reflected in higher margin
Savings %TO(avg)
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Increasing savings
2006-2008 2009-2011
Sustainable Step Up in SC Savings
1.9% +47%
2009 2010 2011 H1
but Gross Margin down
-230bps
2.8%
but not reflected in higher margin
Savings %TO(avg)
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Improving margins through Cost ExcellenceLow Cost Business Models
ReplicableE2E Solutions Significant potential Reaping the benefits
Demand VolatilityManagement
Network Redesign
Direct Deliveries
Product Formulation
Improved A&P and TTSInvestment
Indirects Management
1100bps
900bps
1350bps
850bps
920bps
Rollout to
Other Countries
&
New Categories
*
Operating Margin Improvement for Products in scope LCBM*
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Commodity Risk Management is EssentialCommodity Risk Management
Volatility
Start 2011 End 2011 2012
Reliability &Economic Protection
Unilever spend actively
hedged
Uncertainty
Commodity Price Trend Example
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We are determined to be The Best
World Class
Value Chain
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1. Global Scale & Local Agility
2. Lean Organisation
3. Speed
4. Partnership with Suppliers
5. Unilever Sustainable Living Plan
Enabler of Unilevers Financial Growth Model
Unilevers Supply Chain is UniqueSources of Competitive Advantage
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Global Scale
31bn ProcurementGlobal Sourcing fromLow Cost Countries Scale in Logistics
76%
24%
Global Cluster
D&E >150 of 260Factories
From Europe to Asiaand Americas
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Local Agility
> 160.000 Point of Sale Served > 7.000 Islands Served
Unique Route to Market Capabilities in Growing Markets
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Local Agility: Differentiated Supply Chains
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Local Agility: Differentiated Supply ChainsIndonesia Case
in General Trade
Individual, 24hrsProduct Dispatch Drives profitable growth
New Route to Market
Before After
Normal Express Orders
>100%
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Lean Organisation
Strong TeamLean Fast Decisions
3 layers between CSCO
and factory director
Shares vs main competitors
17
Direct
Reports
One
Real Estate
Team
FourCapEx
signaturesOne
PurchasingOrder
Savoury Over 2x
Skin Over 2x
Ice Cream Over 1.5x
One
Information
PortalOne
Travel Cost &
Compliance
Report
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Speed: New launches in RECORD TIME
35 Markets
Global Sourcing7 Factories
40 Moulds9 Sizes7 Resins
Set-up in
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Speed: New production lines in RECORD TIME
New productionLines
35% faster
In 30 Markets from 6 Factories
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Speed: New Factories in RECORD TIME
20M, -6 months 7M, -3 months 10M, -12 months
* Value Delivered , Time reduction versus Original Plan
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Strategic Partnerships with Suppliers
Growing with suppliers through Innovation
Supplier Investment to
grow where Unilever grows
>1.3bnSupplier
Capacity
Investment
>90%
D&E
>70
Active supplierinitiated
innovation
projects
500.000
smallholder
farmers linkedinto our supply
chain
Unilever
Exclusive
Innovation
USLP
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20112010/112009
In Summary:
Cost DrivenSupplyChain
Building
Foundations
Supply ChaincreatingValue
Playing to Win
Lean andAgile value
chain
Fit to
Compete
Be
The Best
World ClassValue Chain
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In Summary:
1. Operational Excellence:Foundation (Not a Destination)
2. Best in the Industry
3. Enabler of Unilevers Financial
Growth Model
Live Superior Service Deliver Sustainable Profitable Growth