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. [Operator Instructions] We will now hand over to Mr. Allison who will be with you shortly. Raoul Jean-Marc Sidney Huët: 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'll see that we are celebrating a birthday, 100 years since the Hellmann’s brand was born in New York. You might also remember that last year marked 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 14 EUR 1 billion brands with sales now EUR 2 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 9-month low and reduced payroll tax relief is hitting disposable incomes. The situation in emerging markets is mixed.…

Yes, it really is me this time. Thank you, Jean-Marc. Good morning, everyone. So let me start the regional review with Asia, and at RUB that's the biggest part of our business. In a number of countries, economic growth has moderated and in parts of our portfolio which are more linked to discretionary spend, market growth has eased a little. Overall, however, the everyday nature of our products and their broad appeal has supported continued good growth. Against that background, our positive momentum continues. We've now had 10 consecutive quarters of growth at or above 9%. Growth in the quarter was 9.2%, including over 5% from volume. Hair care, oral care, laundry, household care and ice cream were particularly strong and most countries grew double digit. China, in particular, saw good volume driven growth across all our major categories despite increasing competition. Against this, sales were a bit weaker in Japan. South Africa made strong progress despite a weakening of Personal Care markets as disposable incomes came under pressure. Meanwhile, sales in Central Africa were down as we lapped the boost last year from selling ahead of the rollout of our regional SAP platform. Across the region, we've been investing in go-to-market capabilities. For example, in India, we've expanded our Shakti program with another 35,000 villages added taking the total up to more than 130,000. In Indonesia, we're extending our sales and distribution reach to the outlying islands. At the same time, we're opening up more and more Perfect Stores. In fact, we added around 800,000 over the last 12 months taking the total up to more than 3 million in this region alone. The Americas grew by 6.1% with volumes up 2% in the quarter. North America grew by 0.3% with small positives in both volume and price. As…

[Operator Instructions] The first question comes from the line of Celine Pannuti, JPMorgan. Celine A.H. Pannuti - JP Morgan Chase & Co, Research Division: 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 though we see deceleration versus last year, it seems to be pricing driven. Could you give us a bit of a feel of the moving parts of the performance in this area and with pricing close to 0, should we expect this to continue for the remainder of the year and, therefore, most of the growth being volume driven in North America in '13? My second question is on raw material. You've spoken about less pressure on the oil and edible oil prices there as with the moving parts there. Overall, do you think there is room for you to maybe slightly lower inflation that you're asking at the beginning of the year. And therefore, will that mean that we will continue to see pricing reinvestment in the Spread category? Raoul Jean-Marc Sidney Huët: Okay. Celine, let me actually start off with 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 that 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 mean, I will just summarize…

The next question comes from the line of Javier Escalante, Consumer Edge Research.

I have 2 questions. One on Personal Care, whether you can comment. What kind of plans do you have to keep this strong performance. In addition, TRESemmé 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 blade and razor category? This is question one. Question two has to do with the Maxing the Mix strategy if you can comment whether you are getting more traction in emerging markets versus developed markets and or if you can comment the same to 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? Raoul Jean-Marc Sidney Huët: Sure, 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 3 questions, Schick is small, experimental, so nothing to expand there. TRESemmé, 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 its 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.

Yes, indeed, and just to underpin that, I think what we continue to see in our Personal Care business, in particular, is 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 and a lot of markets. So very confident in our Personal Care business going forward.

The next question comes from David Hayes, Nomura.

Two things for me. Just on the Food side. Obviously, you talked at the investor back in December about looking for that to step up and sort of contribute a little bit more but obviously still struggling in particular in the Spreads business. I just wonder whether you've got a lot of margin there to play with. Should we expect that you go through a year or a couple of years of really spending behind more innovation, more communication to your point about what you're talking about in terms of margarine. I was wondering whether that sort we should be looking for the shape there? And the second question is on dividend actually, 10.7% increase. If I go back about 2 or 3 years, I think you mentioned the policy on dividend was sort of some trimming over the medium term of the payout ratio. Is that still the policy, which is quite a big dividend. I just wondered whether it's tied into that policy, what we could expect, you're thinking about earnings growth for the year being? Raoul Jean-Marc Sidney Huët: Okay. David, on dividends. I can be quite brief. No change in policy. We aim to increase our dividend broadly in line with core earnings over the long term. If you take the last 3 years, it's been up 8%. Today, we're announcing double digits. Sometimes, it will be up. Sometimes, it will be down, but we are remaining consistent with our dividend policy. But it is an expression of our business performance last year and the confidence that we have in the business today. If I then just look at Foods. So I think, yes, it is an area of focus because yes, we can do better but the way we characterize the performance of Foods is mixed. Please take into account firstly Dressings did do well and Hellmann’s, as an example, EUR 2 billion brand continues to strengthen. We are innovating in Knorr and whilst Savoury can do better in soup, sauces and the like, we are innovating, we're executing and it has a good DNA footprint. So the real issue that we're calling out today is Spreads. And I think the point is very simple, we have, to a certain extent, underestimated the time that it will take to turn that part of the business around. Reminding you, it's 7% of our turnover. But if you take a step back, margarine is healthier than butter. The category is a very profitable one and we do have excellent shares in many markets but those markets are weak, and I think we have to take responsibility for that. So this is something where it will take a while to be able to drive the core to the next level.

Just following up on that. Just in terms of that margin and growth balance, you wouldn't feel that the movement on food is more a little bit less margin to invest to get the growth coming through and to sort of close some of those gaps in terms of the perception, et cetera. Do you see the margins pretty solid still even within in that objective?

David, it's a little bit hard to hear you, but just in case Jean-Marc didn't hear you, I think I'll just pick that up. I think the fact that our Spreads business didn't performed particularly well in the first quarter is not a reflection of the fact that we didn't support it strongly enough. I think, it's just getting the communication right, persuading people who are loyal consumers to continue to buy the brand, while obviously trying to attract new consumers into the brand is not easy. We know that margarines are particularly healthy but consumers are not perceiving them to be natural versus butter. Those are the things that we need to address, make sure that the type of the communication that we provide is better rather than having to spend more in order to try and drive volume. We will have to correct prices a little bit. We've seen some promotional activity in the Western European business that we need to address where we've been a little bit behind competition and we'll do that, but it would be wrong to think that we haven't been investing in these businesses. We continue to do that but it doesn't need to be stepped up, it just needs to be directed in a better fashion.

The next question comes from Jeremy Fialko, Redburn.

Jeremy Fialko, Redburn here. Couple of questions. First one is just focusing perhaps more on the developed markets. How much of a difference would you characterize between the kind of market growth of Foods versus HPC over the quarter and obviously excluding anything kind like weather-related effects in ice cream. And the second question is just on your in-quarter pricing. Could you comment on what that was in Q1 and what you think the likely direction of that will be over the remainder of the year? Raoul Jean-Marc Sidney Huët: Jeremy, if you just take the last part, I'll ask James to take the first one. The last one on in-quarter pricing was stable essentially in the first quarter. If you actually look at pricing for the year, as you know, for Q4, we said that it would be up. But in developing markets, given what's been happening with currencies and the like, obviously, pricing has been higher, much more muted in the developed markets.

Jeremy, yes, you're asking about market growth and the difference between Food and Personal Care in the developed markets. Well, I think, first of all, we would say that we see the market growth and the developed markets is minus 1% to minus 2% overall, it's always difficult to be absolutely precise about these things. Certainly, down more in Food than in Home and Personal Care.

The next question comes from Chris Wickham, Oriel Securities.

Just on -- David earlier touched on margins. And I was wondering perhaps if you could just give us some indication about the gap between margins that you see in your mature markets and in your emerging markets and whether that's sort of widening or narrowing. And I suppose just a follow-on, I mean, you're saying sort of minus 1% to 2% market growth in developed markets overall. Just if you look at your own business and you have that unusual sort of volatility in the past 2 years and in Q1, if you strip those -- that out and obviously, the extra day last year, what is the underlying growth in your mature markets business? Raoul Jean-Marc Sidney Huët: So on the second part, we are loathe to strip things out. I think that, again, we've given you enough data points, be it ice cream down double-digit in Europe, given the markets and the like. Most importantly, as we urge you to look at the first 6 months of the year as a real demonstration of the performance of our European business. But we have been flagging for 4 years that the macroeconomic conditions for everybody, including ourselves are difficult and will remain difficult. On the first part of your question in terms of margin between emerging markets and the developed markets, I'll repeat firstly the fact that the actual gross margins between the 2 are not that different. Now we're not talking about profitability today Q1. We will do that in our first half. But if you look over the trend over the last couple of years, if anything, the gap actually has been narrowing. Obviously, when it comes to A&P and other types of investments, there are parts in emerging markets, we flagged out China and Russia over the last couple of years where we are, be it through the P&L, CapEx or M&A investing huge amounts of money. But from a gross margin and structural perspective, if anything, the gap is closing and the gap is not a wide one.

The next question comes from Iain Simpson, Barclays.

Just a couple of questions from me, if I may. Firstly, when it comes to emerging markets, we've had a number of your peers talk about [indiscernible] slowdown in the first quarter. I think you yourself sort of hinted at that, with talk of it being mix. But we haven't seen it really in your top line at all. I mean, is that just sort of white space fill in and share gain? And if so, should we be thinking that you're sort of rate about performance in emerging markets has structurally accelerated a little bit or is it just a launch phasing issue that we shouldn't get too excited about? And then secondly, just on spreads, if I may, you've talked a bit about the sort of need to do more there and how it's taken a little bit longer than you thought. Is there a sort of innovation issue that you're addressing or are you able to give us any sort of sense of pipeline or timing on that stepping up? Raoul Jean-Marc Sidney Huët: Ian, on emerging markets, I think that to use your words, what we're excited about is the ability to have performed over 8 consecutive quarters of double-digit growth. D&E is now 57% of our business, and I think that what I would focus on is the resilience within that part of our portfolio because we are not over-reliant on one market. As you heard James say, our South American business has done very well in the first quarter and we mentioned Brazil. And yes, we are very aware of the GDP growth declines in Brazil, but yet, be it through innovation, execution, market share gain, we have done double-digit growth in a place like Brazil. But it's not just there. It's also South Africa which again has performed in a very stable, healthy contributing way over the last 2 years now and the same goes for places like Vietnam as well as Indonesia and China. So they're all contributing. But make no mistake, there still is a huge amount of volatility in each and every market. And so there are areas which we're pointing out today which have worked perhaps less over a 90-day period of time. But the point is that we have a resilience, given the breadth of our portfolio and yes, we are building, be it in terms of execution, innovation under the leadership of Harish Manwani, a real power force in the emerging markets.

To your first question about what are we doing in the area of innovation in Spreads. Well, one of the things that we have to do better is to compete better with butter, and there are a range of buttery variants now which have been rolled out across the European business, so we've only just begun that but you will be able to find buttery variants of our margarine all across Europe very soon and hopefully try those and you'll see that they taste every bit as good as butter but, of course, they are healthier. And then as we continue to look to the future, we will more and more pursue the direction of naturalness, finding ways to include only a few absolutely natural ingredients into the formulations and then communicate the naturalness of margarine which is one of the things perhaps that we've been missing out on.

The next question comes from Alain Oberhuber, MainFirst.

Jean-Marc and James, Alain Oberhuber, MainFirst. Just 2 questions. The first is going on about the emerging market. You gave pretty bullish outlook for the Personal Care. As I assume a lot of the Personal Care business is done in the emerging market. We could assume double-digit growth rate also in the next couple of quarters. Could you highlight a couple of which direction we could expect some product innovation in the emerging markets in Personal Care. And the second question is about the Spread, just about strategic issue. In the investors day, you clearly said that you want to see growth rate in Food, in particular, in Spread. If the growth is not accelerating this year in the Spreads business, could you take -- or are you thinking to take strategic actions in that category? Raoul Jean-Marc Sidney Huët: So let me just take your point on Personal Care and emerging markets. I would prefer not to use the words bullish outlook but just what we are seeing is a very strong continued performance based on execution, innovation in the right markets. We will also not give you the view in terms of double digit or not for the quarters to come. I think that the performance of Personal Care and importantly, all the subsegments, be it deodorants, be it hair, be it skin cleansing, be it the assets that we've acquired are all strengthening and that's probably the most important point to make around Personal Care and the like. Yes, we are innovating a lot in emerging markets and we mentioned Lifebuoy, Clini-Care in India and Indonesia, but we're also doing it in developed markets, be it Dove Nutrium Moisture in the U.S. but also places like China. Lux which we're spending much more time in terms of new packaging and the like. TRESemmé, we talked about it, Brazil, Indonesia, India. These are all examples of a white spaces so there's innovation, yes. There's white spaces, new markets and the like and we're working all of that at the same time.

I think that's the questions that we've got on the line so perhaps Jean-Marc, you just want to sum up with a final few words. Raoul Jean-Marc Sidney Huët: Well, thank you very much for everybody, your attention and thanks for me as well as James for your time this morning. Just to sum up, we are pleased with the continued momentum in our business and despite the tough environment that we've been talking about this morning, we are confident that we are on track to deliver against the priorities that we have set out for 2013. As usual, the IR team will be happy to answer any further questions that you have and please enjoy the rest of the day.

This conference has been recorded. Details of the replay number and access codes can be found on Unilever's website. An audio webcast will also be available on Unilever's website, www.unilever.com and the Investor Relations app. Thank you.