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Supply Chain Live Event24th November 2011

Logistics - the new rules of the game

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Our job in logistics

The business challenge

The external challenge

Unilever logistics

introduction - Our size, scale

& history

Our strategy

Our capabilities

Our results

Agenda

+GLLTGlobal Logistics Leadership Team

Marika Lindstrom, VP Indirects Procurement

Ampy Cheung-AswinVP Logistics

UAPL

Ale Eboli VP Logistics

UASCC

Simon SmithVP Logistics

USCC

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“And so, our business is a very simple one of getting the right products at the right place at the right quality at the right price—all the time…”- An excellent description of

logistics

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We have to do it for 4.5 billion cases,

delivered to 210,000 locations

+Our business challenge

+The logistics CO2 graph to deliver USLP

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 202010,000,000

15,000,000

20,000,000

25,000,000

30,000,000

35,000,000

1,500,000

1,700,000

1,900,000

2,100,000

2,300,000

2,500,000

2,700,000

2,900,000

3,100,000

3,300,000

3,500,000

Volume Tonnes CO2 BAU USLP ambition Tonnes CO2: 40% efficiency improvement

Year

Volu

me

Logi

stic

s CO

2 em

issi

ons

(tonn

es)

+Business challenge – more global sourcing

+Business challenge – success in our marketplaces

+Business Challenge E2E competitive

+Business Challenge - responsive

+The external world will provide significant challenges

We have to follow our consumers & our suppliers

Growing in number and changing location

World population (billions)

Urbanisation:1950 – 2 megacities, in 2010 – 22, by 2025 there will be 35 megacities – with 10m or more people

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Living in a more uncertain world

How to be resilient to external changes in the market or in our environment

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+Competing in a world with more trade & more international moves

1950195

2195

4195

6195

8196

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2196

4196

6196

8197

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2197

4197

6197

8198

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2198

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6198

8199

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2199

4199

6199

8200

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2200

4200

6200

8201

00

20

40

60

80

100

120

140

160

180

World Merchandise trade index 1950-2010

“Transport is the blood supply of the world economic model”

55 €billion

15 €trillio

n

Unilever Logistics- introduction

+We have a history

€300m pa

20081985

€400m pa(and growing)

€60m pa

+Unilever logistics today3.6 €bn spend on:

Raw & Pack Transport

SU warehouse

Primary Transport

Warehousing

Secondary Transport

- 0.5 1.0 1.5 Bn € spend

+ we are big

DHL..

CEVAKuehne & Nagel

WincantonHitachi

0 2 4 6 8 10 12

Worlds Largest Contract Logistics Providers Euro bn

.. Top 10 freight forwarders < 40% of global market

+...and small in the global container market

+We are 0.2% of the global container marketThat’s our one there

But we still punch above our weight...

+We are big, we manage: 442

warehouses

2400 transport providers

+We move over 34 million pallets every year

That fill 10,000 trucks every day

+We transport our materials and finished goods over 1bn km every year

That’s twice to the moon and back every

day

+But we need to become bigger, better and more efficientTo grow our volume, improve our service, reduce our costs by (10)bps per year & hold our carbon emissions @ 2010 levels.

DHL

CEVA

Wincanton

0 2 4 6 8 10 12

+We have a strategy & direction

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28

PEOPLE

VISIBILITY AND CONTROL

ENABLING TECHNOLOGIES

2015 LOGISTICS STRATEGY FRAMEWORK

NETWORKS WAREHOUSING DIFFERENTIATED LOGISTICS SERVICES

LOGISTICS PROCUREMEN

T

COLLABORATIONTRANSPORT

DELIVERABLESCarbon - 25% efficiency improvement. (40% by 2020)Customer Service – 50% reduction in W&T CCFOT losses.Cost - Reduce Logistics costs by 15% (€0.5 billion)

SUSTAINABILITY

NetworksWhat is it •Building and Refining our physical network of distribution centers, hubs and cross docking points.

What are we doing now •Established a network modelling capability that can be deployed to priority projects across the world•Network restructuring projects underway in most clusters.

What is our ambition •A globally optimised network that flows materials and products from our suppliers through our factories and to our customers. Delivered with competitive costs, superior service and lowest carbon emissions.

+ TransportWhat is it •The professional management of all of Unilever’s transport requirements (road, rail, sea & air), ensuring that we use our

scale to achieve competitive costs, superior service and leading sustainable practices.

What are we doing now •Ultralogistik Control tower established in Europe. Extension in to secondary transport in 2012/13.•Ultralogistik control towers under construction in NA, Brazil, Panama and Singapore.•Final control tower landscape proposal by Q1 2012.

What is our ambition •A network of Ultralogistik control towers, scaled for their geographies and intimate with their markets. That are integrated with each other and have world class people, processes, and systems at their core.

WarehousingWhat is it

• Adopting ‘LEAN‘ principles for continuous operational excellence

• Aligning capacity with growth and future proofing our DCs in D&E markets

What are we doing now

• Bridging operations gap vs. benchmark

• Creating core design of DCs with UEnS

• Defined Make vs. Buy approach• Elimination of overflows and

optimize space productivity

What is our ambition• Create a lean, responsive

warehousing operation for a smooth logistics flow

PeopleWhat is it

• Create a compelling people plan including hiring, training, career tracks, and development of capabilities

What are we doing now

• Launched logistics key roles and skills set with core training curriculum in Supply Chain World

• Created a Learning Board with key representation across the geography to drive an aligned logistics learning agenda globally

What is our ambition• Build a top performing organization

with world class logistics skills that is a hallmark of excellence in the industry

CollaborationWhat is it •Identifying opportunities for collaboration with suppliers, other manufacturers and retailers - both in continuous improvement and innovation

•Build a pipeline of new ideas to improve current services

What are we doing now

• Joint business plans are being developed with K&N, DJL, FM Logistics, CHEP, Maersk – supplemented with regular business reviews

• Working in collaboration with other businesses, directly or through industry bodies; supporting JBP with retailers

What is our ambition •Innovation pipeline through JBDPs•Be the preferred collaboration partner in the industry•Formalized framework for business reviews to drive continuous improvement in service, cost, quality and carbon efficiency

ProcurementWhat is it

• Increase the level of professionalism in logistics procurement to fully maximise the potential of our scale in the logistics market.

What are we doing now• Established Logistics Procurement organization

to business partner logistics managers globally.• Focus on Ultralogistik roll out in freight.• Driving standardized commercial terms globally.

What is our ambition

• Leveraging the power of the USLP, Unilever established as the customer of choice for all key logistics providers.

• Unilever develops the logistics market to ensure there are alternative suppliers in all geographies.

• Extracting full value of our scale through full compliance of harmonised ways of contracting, manging and paying our logistics providers

Differentiated Logistics ServicesWhat is it

• Different customers require different services.• Our strategy to reach down, reach up and reach

wide will demand specific solutions for the different business models

• Channel and Customer strategies require that logistics provides specific solutions aligned to the different nature of these businesses (e.g. Drug Stores, TIGI, IC, Frozen Foods, Foods Services, Wholesalers, Van Selling, Direct Sales - Purity, eCommerce, …....)

What are we doing now

• Developing the Logistics Capabilities that will deliver the business ambitions both in terms of Warehousing and Transportation

• Developing a deep understanding of the ‘Cost to Serve’ in each of the channels and customers, allowing the business to make proper trade offs through the entire portfolio- optimizing growth and profitability

What is our ambition

• Our ambition is to have a Logistics process that is Segmented based on customer and channels requirements, enabling sustainable and profitable business growth, being the Best in the Industry in understanding customers expectations

TechnologyWhat is it

• In order to manage a complex network with more than 400 DCs, shipping to more than 200k customers in every single point of the globe, integrating thousands of suppliers to hundreds of factories 7 days a week, 24 hours per day - a robust set of tools is critical to ensure not only operational excellence but also compliance to regulations and internal controls

What are we doing now

• Developing a Global ‘Footprint’ including all systems related to Warehousing &Transportation

• i.e. WMS, TMS, Transportation planning, Procurement tool, GTO

What is our ambition

• Our ambition is to have one Global IT Solution that can be leveraged across all clusters and MCO’s, enabling that Unilever can gain from its scale through the Development of one solution being Deployed everywhere

• We strongly believe that this is the best way to ensure a long lasting capability in every single point of the globe, maximizing the value of long term investments in the IT space

SustainabilityWhat is it •This is about the leading role of logistics in delivering the USLP.

What are we doing now •Logistics sustainability KPIs established in 14 top Markets. Roll-out to remaining markets in 2012. Target 5% reduction in 2012.•Logistics sustainability COPs established and driving best practices into the operations.

What is our ambition •Unilever will become the globally recognised leader of sustainable business. Unilever’s Logistics capabilities will be a clearly visible driver of that reputation.

Visibility & ControlWhat is it •This is about aligning and having visibility of all important logistic metrics across our markets and clusters.

•Facilitates faster and more effective decision making.

What are we doing now •Global harmonised logistics KPIs have been established.•Working with the ‘Connect’ program to ensure that the important logistics KPIs are available directly from our systems.

What is our ambition •Globally aligned, instantly available information and reports- to enable effective decision making and operational control of the global logistics network.

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39

PEOPLE

VISIBILITY AND CONTROL

ECHNOLOGY

2015 LOGISTICS STRATEGY FRAMEWORK

NETWORKS WAREHOUSING DIFFERENTIATED LOGISTICS SERVICES

LOGISTICS PROCUREMEN

T

COLLABORATIONTRANSPORT

DELIVERABLESCarbon - 25% efficiency improvement. (40% by 2020)Customer Service – 50% reduction in W&T CCFOT losses.Cost - Reduce Logistics costs by 15% (€0.5 billion)

SUSTAINABILITY

So have we got what it takes to be the best logistics team in the industry?

To serve the 80bn€ Unilever

+Our Results

So have we got what it takes to be the best logistics team in the industry?

To serve the 80bn€ Unilever