Unilever PLC ADR UL
Q1 2013 Earnings Call Transcript

Transcript Call Date 04/25/2013

Operator: Welcome to Unilever's First Quarter 2013 Conference Call. This will be presented by Mr. Jean-Marc Huet, Chief Financial Officer; and James Allison, Head of Investor Relations, M&A and Strategy concluding with a question-and-answer session.

We will now hand over to Mr. Allison, he will be with you shortly.

Jean-Marc Huet - CFO: So instead of Mr. Allison, this is Jean-Marc and a good morning and welcome to Unilever's first quarter results presentation of 2013. You will see that we are celebrating a birthday, a hundred years since the Hellmann's brand was born New York.

You might also remember that last year marks 50 years in Brazil. The milestones keep coming and the brand Hellmann's goes from strength-to-strength. Hellmann's is actually one of our EUR14 billion brands with sales now EUR2 billion and rising.

I will begin with the context for this set of results, our overall performance in the first quarter and the category highlights. James will then review our geographical performance and I will conclude with some remarks before taking your questions.

Let me draw your attention to the usual disclaimer relating to forward-looking statements and non-GAAP measures. So now let's begin and to start with the wider context for this set of results in Q1.

If anything, the economic background has deteriorated in many parts of the world. In Northern Europe, consumer sentiment continues to be eroded by fiscal tightening. In the South, countries are in varying degrees of crisis mode with no real sign of improvement anytime soon.

In the U.S. signals are mixed. Employment housing indicators suggest a pickup in the pace of growth, but consumer confidence is at a nine-month low and reduced payroll tax relief is hitting disposable incomes.

The situation in emerging markets is mixed. Brazil remains muted, India relatively stable, China improved somewhat. Growth has slowed in South Africa and Russia as examples. In a number of countries, tensions are high, and we continue to plan on the assumption of an unpredictable and volatile world.

Turning to commodity markets; they have been more subdued, less pressure from the demand side and somewhat less speculation. Crude oil has traded within a tighter range than in recent years, edging down in the last couple of weeks. Edible oil prices have eased, but on the other hand, tea and dairy are up.

There is no letup in competition in our markets, and we wouldn't expect it. Emerging market countries are where the big growth opportunities lie, and that's why major multinationals as well as locals are putting so much of their resources there. It's also where we see the rise of strong local competitors in many of our markets.

In developed countries, consumers remain focused on value and retailers continue to compete to drive footfall. As a result of this, promotional activity continues to be high.

So, in summary, it remains a challenging environment for all of us. But our strategy is working, and against the background of this macroeconomic context, we are pleased with the continued good momentum in our business. Growth of nearly 5% in this environment and against the very high prior-year comparator demonstrates the resilience of Unilever today, very different to a few years ago. In part, it reflects the inherent strengths of our geographic footprint and our brand portfolio today, but it is also clear evidence that the strategy to transform Unilever is working.

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