Unilever (NYSE:UL) recently reported its first quarter earnings and discussed the following topics in its earnings conference call.
North America Performance
Celine Pannuti – JPMorgan: My first question is on North America, where you’ve seen a slowdown versus where you were all of last year. I understand that Q1 was a tough comparative, but even we see deceleration versus last year, and think it’s pricing driven. Could you give us a bit of a feel of the moving parts of the performance in this area? With pricing close to zero, shall we expect this to continue for the remainder of the year and therefore, most of the growth is volume-driven in North America (up to) ’13? My second question is on raw material. You’ve spoken about less pressure on the oil and edible oil prices. There are as well moving parts there. Overall do you think there is room for you to maybe slightly see lower inflation that you were seeing at the beginning of the year, and therefore, will that mean that we will continue to see pricing reinvestment in this private category?
Jean-Marc Huet – CFO: Let me actually start off with the raw materials and then come back to your question on North America. On commodity costs, at Q4, we said we would expect low to mid-single-digit increases for 2013. Now, you’ve seen the crude oil has been more stable. It’s recently edged down to sort of the $100 range, but there are others that are more mixed, tea, dairy and the like. So what we will do is we’ll just update you in our first half year results in terms of where we stand on commodity costs, but we just stick to what we’ve said in Q4 of 2012. I would just summarize though that consistent year-on-year gross margin improvement is our priority. Going back to North America, we delivered here a positive growth despite a market declining. We’ve had some positive share and USG underlying sales growth performance from Personal Care. I would say that our shares in spreads actually have stabilized, but only somewhat and our dressings performs well as we’re taking Hellmann’s to its 100th anniversary. So if you actually look at our business improvements in Personal Care, market share is up. I would underline hair, deo, skin cleansing, skin care and face, spread shares even slightly up and then where there are some losses are ice cream and tea, which we are working on.
Celine Pannuti – JPMorgan: Next question there was on pricing. You had a good pricing component last year. We’re seeing it flat in the quarter. Is that a reflection of the environment in Australasia?
Jean-Marc Huet – CFO: Yes that’s right.
Celine Pannuti – JPMorgan: On raw material, my question was as well on spread since you’re seeing less raw material pressure or even decline, would that mean that the pricing will be lower for the year than you anticipated a few months back?
Jean-Marc Huet – CFO: Again, my comments on raw materials are just overall for the year. If you were to take spreads specifically, the real drive around pricing is the actual gaps between butter and margarine and that is the real dynamic. Obviously, there is a lot of exposure to oil related within spreads, but the real dynamic where we’re closing pricing is between spreads and butter to make sure that we are not only focused on the taste, the naturalness, but also providing a proper consumer value. So, that’s the real dynamic for this year. There are some signs of butter price increases, but those are quite recent.
Javier Escalante – Consumer Edge Research: I have two questions, one on Personal Care, whether you can comment what kind of plans do you have to keep this strong performance in addition for instance TRESemme in India and Indonesia, do you have plans to roll it out elsewhere and if you can discuss what you are doing with Schick in the blades and razor category. This is question one. Question two has to do with Maxing the Mix strategy. If you can comment whether you are getting more traction in emerging markets versus developed market and/or if you can comment the same through the category access whether this is more in Personal Care versus Home Care or Food if you can give us an update in the Maxing the Mix strategy?
Jean-Marc Huet – CFO: Let me take the second part on Maxing the Mix. This is really a global initiative, so we’re not singling out one area or the other. As you know from a gross margin perspective, there are not many differences in our portfolio between developing and emerging markets, but the most important point is that we are driving the mix pricing and savings, because growth and gross margin improvement is a priority for 2013. Likewise from a category perspective, while we have been working harder perhaps around ice cream and Home Care given just the structural components of those portfolio driving mix what we call low cost business models is throughout the portfolio. So that’s to your second question. On your first question, which are actually three questions, Schick is small experimental, so nothing to expand there. TRESemme given that we’ve talked enough about Brazil. We wanted to highlight Indonesia, India and the fact that it’s just grown by 50%. So it’s a real expression of using the Unilever platform with acquired brands and we will be launching the brand into other markets. On Personal Care, the growth continues and the same goes for Home Care, we are gaining share in many of the areas and what gives us a sense of confidence is that every part of Personal Care has been contributing, deodorants has been absolutely the star within the portfolio for the first quarter, but all parts of that portfolio are up 5% or more. So given our geographic footprint, given just the health of the overall category and it’s sub-elements, we just think that this is a very important part of our business and today James is more than 35% of total turnover.
James Allison – Head of IR & M&A: Yes and indeed and just to underpin that, I think what we continue to see in our Personal Care business is particularly strong innovation across the board, some excellent communication. So I think Javier you should expect more of the same in terms of the competitiveness of our Personal Care portfolio going forward and that’s despite the fact that we’ve seen lots of competition in a lot of markets, so we’re very confident in our Personal Care business going forward.