Unilever PLC (NYSE:UL) Q4 2014 Earnings Conference Call - Final Transcript
Jan 20, 2015 • 03:00 am ET
Good morning and welcome to Unilever's Full Year Results Presentation, which as usual will be given by Paul and Jean-Marc. Paul will share his reflections on the year as a whole and then Jean-Marc will cover the financial performance. Paul will finish by highlighting some of the areas where we want to step-up our performance in 2015 and beyond. And after that of course we'll have plenty of time for Q&As. As usual I draw your attention to the disclaimer relating to forward-looking statements and non-GAAP measures.
And with that let me hand over to Paul?
Thank you James, good morning everybody. The speed of business these days is so fast that even in a few weeks a lot can change or be accomplished. So it seems odd for me to be wishing you a Happy New Year but I do. And I hope that you will all be rewarded for your efforts in a year, which may well turn out to be just as challenging as the last one. So let me start with giving my perspective on our performance.
Over the last six years we have delivered consistent, competitive top and bottom line growth. The 2014 results again demonstrate this. We grew ahead of our markets with 2.9% underlying sales growth and 60% of our business building share. Core operating margin was up by 40 basis points. We increased EPS despite some very significant currency headwinds and we again delivered a strong cash flow. Importantly we achieved this whilst continuing to invest in the pillars of long-term growth, building our core business, expanding our foot print, investing in our operations and our people and sharpening the portfolio through M&A.
And so doing we've been building in more resilient Unilever, more able to withstand the external shocks. And it's worth reflecting for a moment on just how difficult the year it was. First the slowdown in emerging markets continued. China stands out but almost all of the major economies weakened. Growth in consumer spending in 2014 hit multi-year lows in many countries. In South Africa it is half to less than 2% and in Brazil it has fallen to just 1%. Exchange rates were again volatile, with further rounds of devaluations. It was a mixed picture, with some currency slightly recovering at least part of their losses from 2013. But even so in many markets consumers have struggled to cope with imported inflation, higher interest rates and reduced fuel subsidies. World oil prices fell towards the end of the year and looking forward this should help to build back consumer demand, but it will take some time to work through and to the cost of living. And of course it puts further pressure on the producer nations.
In other categories, market growth in emerging countries slowed to around 4% in the second half. All of this came from price. There was no volume growth in these markets. It is many years since we actually have seen that. And conditions remain