Unilever Global Strategy Council Summit Recap

Transcription

1 Unilever Global Strategy Council Summit Recap 1. Iden'fied Growth Priori'es 2. Growth Priori'es Translated to Investment Plans 3. Role of M&A for Future of Unilever 4. M&A Group Recommenda'on & Presenta'on

2 Unilever High Growth Priori'es Deodorants, Skin, Hair Savoury, Ice Cream, Tea Vitality within Foods Home Care Russia, China, and Local access

3 Transla'ng Growth Priori'es Into Investment Plans Category PorOolio Growth Priori'es Current Investment Status

4 Role of M&A for Future Unilever Growth top priority transform market share towards leadership high growth APrac'veness attractiveness lower growth transform or dispose key battlegrounds generate cash weak / contested invest to grow defend and grow profitably clear leadership augment share, extend strongholds, exploit hotspots Compe''veness

5 Growth Priori'es sa'sfied by Hain Deodorants, Skin, Hair Savoury, Ice Cream, Tea Vitality within Foods Home Care Russia, China, and Local access *The color GREY represents unsa'sfied growth priority

6 Road Map Cultural Fit/ Strategic Fit Strategies Post Acquisi'on Value Offer Logis'cs of Acquisi'on

7 Cultural / Strategic Fit Be(er Future for Our Children Healthier Future More Confident Future Be(er Future for Our Planet Be(er Future for Farming/ Farmers Healthy Products Healthy Packaging Healthy Environment Healthy CommuniCes

8 Sustainability Sustainable Living Plan Cleaner Planet Together IniCaCve Fairtrade vanilla and almonds Sustainable forest project Reduced packaging by 5% Decreased CO2 by tons Award winning Belgium, UK, Canada manufacturing plants

9 Social Responsibility Flora/Becel margarine Vaseline Skin Care FoundaCon Lifebuoy soap Doves Campaign for Real Beauty Safe drinking water to 500 million people by 2020 World Food Programme Natural and Organic Over 400 gluten free products Reducing calories, fat, sodium, sugar 97% products non GMO cercfied Feed the Children, Second Harvest, Bowery Mission

10 Strategies 1. Exploit our current global footprint to encourage expansion of Hain Celes'al into interna'onal markets. 2. Gain addi'onal 1% revenue growth through incorpora'on of Hain food and beverage segments. 3. Diversify Unilever product poroolio through incorpora'on of natural and organic personal care lines. 4. Create Hain adver'sing profile equivalent to rest of Unilever family of brands.

11 Exploit our Global Footprint Currently 17.2% of net sales are in US Expected 7.03% posicve increase Unilever US sales 14% of sales in InternaConal market Expected 36% growth with expansion into Middle east, Russia, Asia, Africa, India

12 Growth in Foods & Beverages Accomplish our Sustainability Goal Tap into organic foods, tea market Revenue growth increase 1% with acquisi'on

13 Diversify Personal Care PorOolio A Hain Celes'al strength Decrease compe''on in U.S. Unilever men s personal care gaining prominence in U.S. 0.5% increase in growth rate

14 Expand Hain Adver'sing Profile Necessary increase of Hain Celestial s marketing budget Results in 2% increase in operating expenses Will stimulat future growth in brands of both companies

15 Post Acquisi'on Value $ $ $ $ $ $ $ $ $75.00 $50.00 $25.00 Entering Value Global Footprint Foods & Refreshments Personal Care Marke'ng & Advert. Cost

16 The Offer $3.62 B Cash $1.09 B Stock $2.53 B DisposiCon of Board/ Employees

17 Together we can Enter new foreign markets Strengthen our brands Con'nue to be socially responsible Increase our value

18 Discussion & Delibera'on

19 Appendices

20 Appendix A Unilever Historical Growth Analysis UN Growth Avg Revenue $53.45 $53.89 $52.96 $58.87 $61.81 $64.16 YOY Growth Cost of Goods Sold (COGS) incl. D&A $27.53 $28.61 $27.60 $30.90 $37.40 $40.52 YOY Growth Operating Exp $16.93 $16.17 $16.17 $17.85 $13.86 $12.66 YOY Growth EBITDA $8.99 $9.11 $9.19 $10.12 $10.55 $10.98 YOY Growth Unilever Stand-Alone DCF TV in Perpetuity HAIN Growth Avg TV (Using Multiple) Revenue $64.16 $66.60 $69.14 $71.77 $74.51 $77.35 Growth 1.04 CGS $40.52 $43.90 $47.57 $51.54 $55.84 $60.50 Growth 1.08 Operating Exp $12.66 $12.13 $11.63 $11.16 $10.70 $10.26 growth 0.96 EBITDA $10.98 $10.57 $9.94 $9.08 $7.97 $6.59 $87.92 $89.51 Realized Growth % PV of Cash Flow $10.98 $9.83 $8.60 $7.31 $5.97 $4.59 $61.24 $62.35 DCF $97.55 $98.66

21 Appendix B Unilever-Hain DCF (Projected growth through global expansion of all Hain product lines) TV in Perpetuity Revenue $64.16 $68.61 $71.40 $74.30 $77.33 $80.47 growth (anticipated) Revenue $64.16 $69.89 $74.13 $78.63 $83.40 $88.46 growth (+2% over anticipated) Revenue $64.16 $67.33 $68.72 $70.14 $71.59 $73.07 growth (-2% under anticipated) CGS $40.52 $44.38 $48.08 $52.09 $56.44 $61.15 growth (anticipated) Operating Exp $12.66 $12.13 $11.63 $11.16 $10.70 $10.26 growth (anticipated) EBITDA $10.98 $12.10 $11.69 $11.06 $10.19 $9.07 $ realized growth EBITDA $10.98 $13.38 $14.42 $15.38 $16.27 $17.06 $ realized growth EBITDA $10.98 $10.81 $9.00 $6.89 $4.45 $1.66 $22.19 realized growth % PV of Cash Flow $10.98 $11.25 $10.11 $8.90 $7.63 $6.32 $84.26 PV of Cash Flow $10.98 $12.44 $12.47 $12.38 $12.18 $11.89 $ PV of Cash Flow $10.98 $10.06 $7.79 $5.55 $3.34 $1.16 $15.47 Net Change DCF $ $30.93 DCF $ $ DCF $ $54.19 Notes & Assumptions: Revenue for 2013 includes annual data for UN with addition of projected Hain revenues: CGS reflects an initial increase of 36% in cost of goods sold within Hain segments as a result of expansion into UN Asia/AMET/RUB markets $1.88

22 Appendix B Revenue Growth by Geographic Region (with 36% expansion of Hain into Asia/AMET/RUB markets) Region AVG Hain $0.99 $1.07 $1.16 $1.25 $1.35 $1.46 growth United States UN $21.39 $22.20 $23.05 $23.92 $24.84 $25.78 growth Net $22.38 $23.27 $24.20 $25.17 $26.19 $27.24 growth Hain $0.39 $0.42 $0.45 $0.49 $0.53 $0.57 growth $1.08 $1.08 $1.08 $1.08 $1.08 $1.08 Canada & Europe UN $17.38 $18.05 $18.73 $19.45 $20.19 $20.96 growth Net $17.77 $18.46 $19.18 $19.93 $20.71 $21.53 grow Hain $0.00 $0.54 $0.56 $0.58 $0.60 $0.63 growth Asia/AMET/RUB UN $25.51 $26.49 $27.49 $28.54 $29.63 $30.76 growth Net $25.51 $27.02 $28.05 $29.12 $30.23 $31.38 growth Total revenue $65.66 $68.76 $71.44 $74.23 $77.13 $80.15 YOY growth Hain total revenue 2013 $2.02 growth 1.36 UN total revenue 2013 $66.73 growth 1.00 Unilever % Sales by Location Asia/AMET/RUB 40% United States 72% The Americas Europe 33% 27% United Kingdom Canada & Europe 14% 14% 2012 Revenue by Geographic Location Hain % Sales by Location in billions USD Hain UN Consolidated %of UN Sales United States $0.99 $21.39 $ % United Kingdom $0.19 $17.38 $ % Canada & Europe $0.19 Asia/AMET/RUB $0.00 $25.51 $ % Total $1.38 $64.28 $65.66

23 Appendix C Unilever-Hain DCF (with expansion of Foods & Refreshments Product Lines) TV in Perpetuity Revenue $64.16 $67.87 $71.14 $74.56 $78.14 $81.90 growth (anticipated) Revenue $64.16 $67.87 $72.49 $77.43 $82.70 $88.33 growth (+2% over anticipated) Revenue $64.16 $67.87 $70.46 $73.14 $75.93 $78.82 growth (no change over avg.) CGS $40.52 $43.90 $47.57 $51.54 $55.84 $60.50 growth (anticipated) Operating Exp $12.66 $11.56 $10.55 $9.64 $8.80 $8.04 growth (anticipated) 0.91 EBITDA $10.98 $12.41 $13.02 $13.38 $13.51 $13.37 $ realized growth EBITDA $10.98 $12.41 $14.37 $16.26 $18.07 $19.80 $ realized growth EBITDA $10.98 $12.41 $12.34 $11.97 $11.29 $10.29 $ realized growth % PV of Cash Flow $10.98 $11.54 $11.26 $10.77 $10.12 $9.32 $ PV of Cash Flow $10.98 $11.54 $12.43 $13.09 $13.53 $13.80 $ PV of Cash Flow $10.98 $11.54 $10.67 $9.63 $8.46 $7.17 $95.60 Net Change DCF $ $79.71 DCF $ $ DCF $ $45.54 Notes & Assumptions: Revenue for 2013 includes annual data for UN with addition of target product segments. Anticipated growth rate reflects 1% growth over previous growth avg. 1.27

24 Appendix C UN Product Category Foods Refreshment Personal Care Home Care Growth by Product Category Product / Growth by Company AVG Hain Grocery / Fresh Prod. $0.95 $1.03 $1.11 $1.20 $1.30 $1.40 growth 1.08 UN Foods $17.96 $18.65 $19.36 $20.10 $20.86 $21.66 growth 1.04 Net $18.92 $19.68 $20.47 $21.30 $22.16 $23.06 YOY growth Hain Tea / Snacks growth 1.08 UN Refreshments growth 1.04 Net growth Hain Pers. Care $0.11 $0.12 $0.13 $0.14 $0.15 $0.16 growth 1.08 UN Pers. Care $22.46 $23.31 $24.20 $25.12 $26.08 $27.07 growth 1.04 Net $22.57 $23.43 $24.33 $25.26 $26.23 $27.23 growth UN Home Care growth Total Revenue 1.04 $65.54 $68.09 $70.75 $73.51 $76.39 $79.37 YOY Growth HAIN Revenue by Product Category Unilever Category % Sales Value Net Value Category % Sales Value Grocery 68% $0.94 Fresh Products 1% $0.01 $0.95 Foods 28% Tea 8% $0.11 Snacks 15% $0.21 $0.32 Refreshment 19% $17.96 Growth (in current revenues) $ % Personal Care 8% $0.11 $0.11 Personal Care 35% $ % Home Care 18% $11.55 Total Revenue $1.38 Total Revenue $ %

25 Appendix D Unilever-Hain DCF (with expansion of Personal Care Product Lines) TV in Perpetuity Revenue $64.16 $66.71 $69.59 $72.59 $75.72 $78.98 growth (anticipated) Revenue $64.16 $66.71 $70.92 $75.40 $80.15 $85.21 growth (+2% over anticipated) Revenue $64.16 $66.71 $69.26 $71.89 $74.63 $77.47 growth (-0.5% under anticipated) CGS $40.52 $43.90 $47.57 $51.54 $55.84 $60.50 growth (anticipated) 1.08 Operating Exp $12.66 $12.13 $11.63 $11.16 $10.70 $10.26 growth (anticipated) 0.96 EBITDA $10.98 $10.68 $10.39 $9.90 $9.18 $8.23 $ realized growth EBITDA $10.98 $10.68 $11.72 $12.71 $13.62 $14.46 $ realized growth EBITDA $10.98 $10.68 $10.05 $9.20 $8.10 $6.72 $89.63 realized growth % PV of Cash Flow $10.98 $9.93 $8.99 $7.97 $6.88 $5.73 $76.44 PV of Cash Flow $10.98 $9.93 $10.14 $10.23 $10.20 $10.08 $ PV of Cash Flow $10.98 $9.93 $8.70 $7.41 $6.07 $4.69 $62.47 Net Change DCF $ $18.39 DCF $ $87.41 DCF $99.25 $1.71 Notes & Assumptions: Revenue for 2013 includes annual data for UN with addition of target product segments Anticipated growth rate reflects 0.5% growth over previous growth avg. 0.11

26 Appendix D UN Product Category Foods Refreshment Personal Care Home Care Growth by Product Category Product / Growth by Company AVG Hain Grocery / Fresh Prod. $0.95 $1.03 $1.11 $1.20 $1.30 $1.40 growth 1.08 UN Foods $17.96 $18.65 $19.36 $20.10 $20.86 $21.66 growth 1.04 Net $18.92 $19.68 $20.47 $21.30 $22.16 $23.06 YOY growth Hain Tea / Snacks growth 1.08 UN Refreshments growth 1.04 Net growth Hain Pers. Care $0.11 $0.12 $0.13 $0.14 $0.15 $0.16 growth 1.08 UN Pers. Care $22.46 $23.31 $24.20 $25.12 $26.08 $27.07 growth 1.04 Net $22.57 $23.43 $24.33 $25.26 $26.23 $27.23 growth UN Home Care growth Total Revenue 1.04 $65.54 $68.09 $70.75 $73.51 $76.39 $79.37 YOY Growth HAIN Revenue by Product Category Unilever Category % Sales Value Net Value Category % Sales Value Grocery 68% $0.94 Fresh Products 1% $0.01 $0.95 Foods 28% Tea 8% $0.11 Snacks 15% $0.21 $0.32 Refreshment 19% $17.96 Growth (in current revenues) $ % Personal Care 8% $0.11 $0.11 Personal Care 35% $ % Home Care 18% $11.55 Total Revenue $1.38 Total Revenue $ %

27 Appendix E Unilever-Hain DCF (with Cost Synergy for growth in Operating Expenses) TV in Perpetuity Revenue $64.16 $66.60 $69.14 $71.77 $74.51 $77.35 Growth 1.04 CGS $40.52 $43.90 $47.57 $51.54 $55.84 $60.50 Growth 1.08 Operating Exp $12.66 $12.35 $11.84 $11.36 $10.89 $10.44 intended growth Operating Exp $12.66 $12.28 $11.77 $11.29 $10.82 $10.38 limited growth Operating Exp $12.66 $12.66 $12.13 $11.63 $11.16 $10.70 aggressive growth EBITDA $10.98 $10.35 $9.73 $8.88 $7.78 $6.41 $85.45 Realized Growth EBITDA $10.98 $10.43 $9.80 $8.95 $7.85 $6.47 $86.32 Realized Growth EBITDA $10.98 $10.05 $9.44 $8.60 $7.52 $6.15 $82.04 Realized Growth % PV of Cash Flow $10.98 $9.63 $8.42 $7.15 $5.83 $4.46 $59.52 PV of Cash Flow $10.98 $9.70 $8.48 $7.21 $5.88 $4.51 $60.13 PV of Cash Flow $10.98 $9.34 $8.17 $6.93 $5.63 $4.29 $57.15 Net Change DCF $ $2.54 DCF $ $1.64 DCF $ $6.04 Notes & Assumptions: Increase in marketing and advertising budgets for Hain subsidiaries will represent a 2% growth in Unilever Operating Expenses (Increase from 4% to 15.9% of total sales from Hain)

28 Appendix F Global Footprint Expansion of Foods & Refreshments Expansion of Personal Care Cost Associated with Expansion of Hain Marketing & Advertising Summary of Value of Synergies Entering Value $97.55 Adjusted for Hain % Change Best Case $ $ Anticipated $ $ Worst Case $43.36 $ Best Case $ $ Anticipated $ $ Worst Case $ $ Best Case $ $ Anticipated $ $ Worst Case $99.25 $ Best Case $95.90 $ Anticipated $95.01 $ Worst Case $91.50 $ Consolidated Value of Synergies $ Notes & Assumptions: All values in billions USD 1 EUR = 1.33 USD EBITDA Multiple (HAIN): 13.1 WACC* for HAIN: 7% Given Value of HAIN: $2.75 EBITDA Multiple (UN): WACC* for UN: 7.50% Current Value of UN: $97.55 Assessed Value of UN: $ HAIN Relative Size 3% *From wikiwealth.com Final Valuation & Offer Current Value of Unilever Value Added Through Acquisition Post-Acquisition Value Cash & Equivalents On Hand Current Value of Hain Offer Price Structure $97.55 $30.81 $ $3.278 $2.75 $3.62 Cash $1.09 Stock $2.53