Unilever Technology Ventures

Phil GieslerManaging DirectorNovember 2006

Open Innovation in Unilever

We don’t have a monopoly on new concepts or solutions.

That is why we are open for business on Open Innovation.

We want to collaborate with the best minds to make the differences that no single firm could make alone.

We would rather work with someone who has the answer today than hold out in the hope we can eventually come up with it ourselves tomorrow.

Patrick Cescau, Group Chief Executive, Unilever 6th World Conference on Detergents, Montreux

10 October 2006

Closed InnovationInternalTechnologyBase

UnileverProduct base

Vertically integrated organisation that developed its technology in-house for its sole use

Open Innovation Other’sProducts

New Unilever Business Venture

Unilever Product base

Technology In sourcing

Out-Licensing

Technology Spin outsInternal TechnologyBase

ExternalTechnology Base

Commercialise internal and external ideas inside and outside of existing product/ channel base

What is Open Innovation to Unilever?

Technologyoptions

ConsumerInsight

Businessmodels

doable

profitable

desirable

Open Innovation: Expanding the space to innovate

The space to innovate

Technologyoptions

ConsumerInsight

Businessmodels

doable

profitable

Unilever objectives from Venturing

Unilever Technology Ventures: accesses emerging technology with the potential to help innovation and growth

Unilever Ventures: creates new businesses that take Unilever and its brands into new areas or that exploit unused Unilever technology

Langholm Capital: creates options for acquisition by taking stakes in businesses that could take UL and its brands into new areas

€250MM allocated 2002 to Fund I’s in these 3 areas €50MM of this to UTV

Organisation, reporting, decision making

Conscious at the start of lessons from Corporate VC failures:

Managing corporate venturing without sufficient VC experienceMaking investments VC’s would not have made, hoping for long-term strategic benefits

Each Venture Fund runs along lines as close as possible to external VC funds.

Decision making delegated to Fund managersFund managers targeted on value creation and delivery of VC type returns

UTV Managing Directors

Dion Madsen, B.Comm, CFA

• 6 years of direct venture experience in biotechnology with RBC Capital Partners

• Executive experience in three operating companies, Chiron, Cytovax, Cyberion

• Strong investment and operating track record

Phil Giesler, M.Sc., MBA• 1999-2005: Head of

Global Household Care R&D

• 1996-1999: Put in place the Personal Care Global IC network

• Strong Unilever relationships and strong understanding of the R&D Organization

UTV Venturing Objectives

• Access emerging technologies•Potential use in Unilever’s products

•Create medium to long term value

• Change culture to “open innovation”•Influence research and development process

• Access emerging technologies•Potential use in Unilever’s products

•Create medium to long term value

• Change culture to “open innovation”•Influence research and development process

Unilever Objectives

• Generate Strong Financial Returns

Generate strong deal flowDevelop professional operational capabilitiesGain industry respect for adding valueGenerate strong returnsExpand industry and academic networksUtilize internal expertise to gain investing edge

• Become self-sustaining

• Generate Strong Financial Returns

Generate strong deal flowDevelop professional operational capabilitiesGain industry respect for adding valueGenerate strong returnsExpand industry and academic networksUtilize internal expertise to gain investing edge

• Become self-sustaining

UTV Objectives

UTV Fund I - Approach

NanotechnologyBiotoolsPersonalised genetics

Packaging materialsWater

Focus on Materials Science and Life Sciences

Fund Investment

Study FocusAreas

Consumer understandingTargeted deliveryDiagnostic equipmentNutraceuticalsRFID

Invest &Manage

UTV evolution

2002 2004 2006 2008 2010

Investments in funds

Establish VC community presence

Build deal-flow

Own deal flow

Direct investments

Re-inforceleadership

LP Strategic engagement

Towards an independent GP

Funds from 2-3 other LP’s

Self-sustaining venture model

Fund I ($60m)

Fund II ($120m)

Fund III

LP Engagement

UTV Bulletins

Visiting Associate programmes

Open Innovation “receiver/dialogue” roles within Unilever

Advisory Board