Unilever PLC (UL) Presents at Deutsche Bank Global Consumer Conference (Transcript)

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About: Unilever PLC (UL)
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Earning Call Audio

Unilever PLC (NYSE:UL) Deutsche Bank Global Consumer Conference Call June 11, 2019 2:30 AM ET

Company Participants

Alan Jope - Chief Executive Officer

Graeme Pitkethly - Chief Financial Officer

Conference Call Participants

Operator

Good morning ladies and gentlemen. I feel [indiscernible] to welcome you to our 16th dbAccess Global Consumer Conference here in Paris. This year, we had over 100 companies with a combined market cap of $3.9 trillion presenting and 600 investors joining 38 meetings, and all of our 4,000 small and [one-one-one meetings]. Hopefully that will give you a lot of insights that answers the many questions you have on the sector at the momentum.

Before I hand over to our speakers, there are a couple of housekeeping points. You have clearly all registered already, but you will need to go back to registration every day to get your meeting scheduled for the day. Please make sure you carry your badge all the time, you will be scanned and checked. In order to get to the meeting rooms, you will need a badge.

The key presentations take place in this room and [indiscernible] around the corner. Food is served in the [indiscernible] and the post meeting drinks are in the corner over there. And then last but not least, WiFi network is consumer 2019, password global 2019!

Before I ask our first speaker on stage, I would also like to say a big thank you to our corporate access team. As you can imagine, every year they do the undoable and meet 8000 meetings requests into 4000 actual meetings [at very little sleep and very much coffee] and I think they deserve a round of applause. Thank you very much.

And with that, I would like to announce our first speaker Alan Jope, the newly appointed CEO of Unilever; and it is always better to have two Scotts than one, Graeme Pitkethly, who a lot of you will already know as the long-standing CFO. Both are veterans of this conference. I think their first appearance was back in 2016, needless to say a lot has happened since, including Alan’s appointment as the CEO and without further ado, I hand over to him to talk through his vision for the company.

Alan Jope

Thanks [Eva], and good morning everybody. Going off script straight away, it is customary for Graeme and I to begin with a joke about Scottish Football, but there is nothing funny about Scottish Football at the moment. Before we get going, let me draw your attention to your usual disclaimer around forward-looking statements and non-GAAP measures.

As I look around, I can see almost a worrying number of familiar faces. I hope I’m getting my time that I am standing right between the consumers and investors, but I am also aware that I haven’t had the chance to meet everybody.

So, let me briefly introduce myself. I joined Unilever 30 years ago as a marketing trainee. And after a few years in the UK, I spent 14 years in North America, and 13 years in Asia, 4 in Thailand, 5 in China, and 4 in Singapore, and a mixture of marketing and general management roles. My better three quarters, my wife and I are in London now and we’ve got three kids scattered all around the world.

Since taking on the role of Unilever’s Chief Exec at the start of the year, I have spent a lot of time getting out and listening to multiple stakeholders. So, customers, employees, suppliers, media, government, NGOs and of course most extensively with our investors and the analyst community. And I must say, I have taken away a couple of very clear messages from all those meetings.

First, there is a great deal of support and respect for Unilever and what we are trying to achieve. I would say there is wide appreciation for our long-term multi-stakeholder model. In fact, it is hard for us to believe in further and being a leader in responsible and sustainable business. A feeling that Unilever is quite well pleased to win in today’s changing world because we have the scale, the portfolio, the reach, and the talent.

So, that’s the first positive message, but secondly there’s a belief that we can and indeed should deliver faster market beating growth. And that’s what we’re going to be focusing on this morning. To my mind, a sustainable business is one which has performance at the core. A financial strength gives us more options, it allows us to do more. It ensures our long-term success for all stakeholders. And let me be absolutely clear, my absolute focus is on how we drive performance in Unilever top line, bottom line cash, but especially top line.

The three things that I would like to lead for at Unilever are as follows. First, I’d like to unequivocally prove that sustainable business drives superior long-term financial performance. Secondly, I want all of Unilever's brands to be known for being purpose led. Great products of course superior products, but also clear on the positive impact that our brands have on people, society, and the planet.

And thirdly, I want Unilever to recognize for being a diverse and inclusive organization of [beacon] of diversity and inclusion that is also digitally skilled and with the organizational flexibility needed to keep winning and after changing more dynamic world.

So, let me talk a little bit about each of these three areas and then I’ll hand over to Graeme. Let’s talk by looking at our recent performance. Over the last five years with market growth at 3% to 3.5%. We’ve delivered just a competitive performance with average Unilever growth of 3.5% not within that emerging markets growing at 6%.

In the same period, we’ve improved our operating margin from 15.5% to 18.4% and this has really been delivered by driving strong savings and efficiency programs, while all was carefully balancing price volume mix, and reinvesting the majority of our savings buying our brands.

Last year, we delivered 5 billion of cash and returned 10 billion to shareholders through a combination of dividends and buy backs. And this balance performance has proved to us in the top third as far as total shareholder is concerned, but its superior growth that’s the priority for a step-up and is going to be the key to delivering superior financial performance in the coming years.

Our multi-year growth range is 3% to 5%, not 3.5%. This year we’ve already guided that we expect to be in the lower half of that 3% to 5% range, but of course we aim to be firmly in the top half. And I'm going to spend the next few minutes looking at how [indiscernible] intend to drive faster growth and I’ll explain how we will seek out [higher] growth spaces along three dimensions, three axis. I’m looking for faster growth spaces.

Our portfolio axis, our channel axis, and a geographical axis. So, [a lot] going on, on this chart. To accelerate growth first and foremost we are shifting our portfolio into higher growth segments. At a macro level, we are doing this by growing the size of our beauty and personal care division, which is now over 40% of turnover. And indeed, we have consistently and strategically allocated more of our capital towards beauty and personal care.

In fact, over the last 10 years 70% of our acquired turnover has been in the beauty and personal care division, while 95% of our disposed turnover has been in foods and refreshment. So, if you like, this is our more macro strategy, but we also use M&A to shift our portfolio at a micro level, and by that, I mean within each division. So, for example acquiring into high-growth segments such as healthy snacking, vegan and organic foods and children's nutrition hands grazed, the vegetarian butcher, and Horlicks.

Food and refreshment is not intrinsically slow growth, we just need to be in higher growing segments within food and refreshment. But that’s only one lever from moving the portfolio, and the other lever of course is what we're doing organically. We continue to innovate on our products and our brands, championing market development. For example, one, removing consumers relentlessly from bars to powders to liquids and ultimately to capsules, ensuring functional superiority in our core categories like deodorants.

Introducing new value-added formats such as shower foams, body scrubs, body polishes, and so on in our skin cleansing category where we have strong global leadership, and an area where you will see more and more innovation is on sustainable products, and sustainable packaging. We’re also creating all-new brands and brand segments. For example, here you see Love Beauty & Planet, it’s an entirely new brand built on a proposition of gorgeous beauty products that also look after the environment.

Packaging, that’s a 100% recycled plastic, not including any ingredients or broad concerned consumers and partnering on things like ocean cleanups that brand will exceed $100 million of turnover this year and in fact is right now expanding into home care with Love Home & Planet. So, shifting the portfolio through acquisitions, through disposals, through innovation, and through new brand launches.

The second axis along which we were seeking higher growth is the channel axis. Consumers are changing where they shop and our customer landscape will continue an extra way to become more complex and more fragmented. And of course, hypermarkets and supermarkets and general trade grocery in emerging world remain very important to our business, but there three key chopper channels where we are strategically increasing our presence.

In e-commerce, we're working across multiple models. We're partnering with the pure play online platforms such as Alibaba, Ocado, Amazon. We're working on omnichannel with retailers like Tesco, Carrefour, and Walmart where they build their own e-commerce business alongside their bricks and mortar business, and actually the smallest of the subchannels is direct-to-consumer where brands like Dollar Shave Club and our important prestige business are doing direct-to-consumer e-commerce.

In aggregate because of our [strong] geographic footprint e-commerce is currently 5% of our turnover, but we’re growing well ahead of the market at over 30%. We have a very significant opportunity in [outer hall meeting] through our Unilever food solutions business, a much unharrowed part of Unilever €2.5 billion of turnover growing at twice Unilever's rate at Unilever's margins, and alongside that our world-class ice cream distribution networks.

And we think that Front of House presence in chain restaurants alone offers €1 billion growth opportunity. And of course, the health and beauty channel is growing up three times faster than hypermarkets and supermarkets. Especially some of the sub segments such as dedicated beauty stores and is a great space for us in terms of channel specific innovation, building brand engagement and creating powerful in-store brand experiences.

So, in total, these three channels today represent about 20% of our turnover and we expect them to grow at, at least 8% per annum for the next few years. So, that’s portfolio and channel, and the third axis of course is geography. Unilever's business as you know is already 60% in the emerging markets and 40% in developed markets, and while developed markets are and will remain an important part of the business, they’re not quite frankly where most of our growth is going to come from.

It will come from the strength and debt of Unilever's business in emerging markets. Now part of that will naturally come from population growth and positive shifts and living standards, but our real competitive advantage in these emerging markets is our history, and the reach which enabled us to connect with consumers wherever they live and with the right portfolio of brands and products that are being developed based on deep local consumer understanding.

You cannot understand Unilever by looking at us through a lens from London, Paris or New York. You have to get into the markets like Indonesia, India, Turkey, Brazil to really understand what Unilever is. And on that note, the graph on the right shows our top 38 emerging markets ranked by turnover. You can see that 16 of them, 16 countries deliver individually more than €0.5 million billion of turnover.

So, not only do we have the scale, we also have unparallel breadth, which allows us to benefit from the growth opportunity, but with some internal edge and risk diversification because of the breadth emerging markets presence. Most of you probably know Unilever well enough to know which of our big emerging markets lead the geography table. So, India, China, Brazil, and Indonesia really are our priorities. Together they make a quarter – [food at quarter] of Unilever, and those of four of our six biggest markets globally alongside the U.S. and UK and Ireland.

We have wonderful positions in places like South Africa, the Philippines, Mexico, Thailand, Turkey, Arabia, and so on. But alongside these existing priorities, I just want to call out some emerging stars, our next generation markets. These are going to be very important for the future and we are investing heavily. The combination of some quite big populations, strong underlying GDP growth, rapid acceleration and consumption of the types of categories that we sell, and very strong market shares that we enjoy today, thanks to wise decisions made 10, 20, 30 years ago.

Meaning that, countries like Vietnam, Pakistan, Bangladesh, Myanmar, even Ethiopia not up here, will be our growth stars in the next few years. And we do continue to invest behind these opportunities. For example, in the middle of $120 million continuing investment in Pakistan to invest in capacity across four factories. I only have wonderful joint venture in Myanmar, which is allowing us to drive stronger rural penetration, further grow our market shares, and really scale up our business in that beautiful country.

So, please be in no doubt that setting up our growth is the most important priority that we have to ensure we continue to deliver superior long-term financial performance. The second area that I want Unilever to be recognized for is, having our portfolio of brands that use purpose as a source of competitive advantage and purpose pays. The evidence is extremely compelling.

In April this year, Kantar published its Purpose 2020 report, which showed quite simply that brands which consumers see as having a positive impact in the world are growing at twice the rate of the rest of the brands that they were measuring. And various other pieces of third-party research have shown that two-thirds of consumers around the world say they’ll choose brands because of their stand on social issues, and over 90% of millennials say that they would switch brands to one that champions, a cause that’s important to them.

And we know quite frankly that purpose creates relevance, it derives drives stock ability, it builds penetration, it even reduces price elasticity. But the most compelling evidence we have is quite a bit closer to home. Brands being purposeful is something Unilever has known about for over 100 years. It goes back to our – one of our founders William Lever, in fact, he defined the mission of his firm as being about making cleanliness commonplace and lessening the load on women. Imagine that 130 years ago, this guy was talking about feminist issues, quite a visionary.

And for several years now, we’ve been measuring our performance of our – what we call our sustainable living brands. We’ve now got 28 shown here. Some big, some small, some global, some local, some homegrown, some acquired. And these brands are growing 69% faster than the rest of the brands in our portfolio. And by the way that number is up from 46% faster in 2017. So, our sustainable living brands are growing faster than the rest of the portfolio and the differential between them and the rest of the portfolio seems to be widening.

Now, what is the sustainable living brand? Well, they all have two defining features. They communicate a purpose, which highlights an environmental or societal issue. We call that the brand proposition or the brand say, but that’s absolutely not enough. Each brand must back up its brands say by taking compelling, meaningful, long-term action with measurable results, and we call that the brand due. Let me illustrate. Dove can only talk about girl’s self-esteem and real beauty with authority because the brand has been teaching one-hour sessions about body confidence and unrealistic beauty stereotypes to over 35 million girls now in school settings across the world.

In India, Rin’s purpose is to help people from more modest backgrounds who want to overcome some of the disadvantages that they face in life, and that’s unstable, but we back it up by equipping people with the right skills through something called the Rin Career Academy. It’s a skills-based training program, which is accessible to people across India using just their mobile phones and the curriculum offers things like spoken English lessons, interview skills, how to dress in the office, and you should see some of the stories that we get, of how this has transformed people’s lives. It’s fantastic.

No, I guess Ben & Jerry's credentials is a campaigning brand, probably need no further introduction. In fact, I was in Vermont visiting Ben & Jerry themselves. Jerry still comes to work every day, how cool is that, 20 years later. And they continue to push the limits. Their current focus is on racial and equalities in the U.S. criminal justice system. What they’ve noticed is that as marijuana gets legalized, all the white dudes are making lots of money, and all the black dudes remain locked up behind bars for procession. So, this is the latest campaign that Ben & Jerry's are on.

It’s not just so much talk. And lastly, Vaseline’s brand proposition has always been about healing. Under this brand do however, Vaseline has been partnering with a wonderful NGO organization called Direct Relief, and Vaseline and Direct Relief have together held to heal the skin of about 3 million people globally, mainly in highly distressed situations such as Syrian refugee camps or on-site following natural disasters in the Caribbean, and activating around this Vaseline healing project has turned this brand around, it’s now growing nearly 10% in 2018.

So, we believe very, very strongly and increasingly how the evidence, the purpose drives growth and so strongly do we believe this that we’re prepared to commit that in future every brand in Unilever's portfolio will be a brand that competes on purpose.

Now, coming to the third thing that I would like to lead forward the diverse digital and flexible organization, and truly inclusive and fit for the future. So, we want to continue to attract the very, very best talent and we want to inspire the passion and commitment, not just of our employees on the payroll, but also the far wider network of people who work across our expanded value chain and through the many partnerships that we have.

Diversity in Unilever is not just obviously gender diversity, well this is a good place to start. As you know of our 12 non-executive directors, we have six men, and six women and women represent 49% of Unilever's management, which is up from 38% 10 years ago. So, 1,100 basis point improvement in 10 years. And of course, diversity is about much more than just gender.

Interestingly, there is no dominant nationality in Unilever. We’ve got nine nationalities on over 12 non-Exec’s. We’ve got over 70 nationalities in our leadership teams, 80% of our country business leaders are locals, and 90% of our managers in markets are locals. But the next front that we are tackling is disability.

I really want Unilever to represent the societies that we do business in. Unilever where people can bring their [wholesales] to work, regardless of age, gender, nationality, race, religion, sexual identity, and so on. This is important for our business and it’s important for me personally. But to get the most out of that talent we need the right skills across the organization. And I already mentioned briefly digital marketing, but that’s only one element.

We’re upscaling our entire workforce in digital. Yes, of course, our marketers, but whether it’s new analytics tools in finance or robotic process automation in our factories where we are already hundreds up and running. Digital is the way we're working and it is the future.

At the same time, our cultural needs to evolve from being hierarchy led to network. Frankly our traditional organization of rigid hierarchies fixed boxes what reporting lines and in flexible resourcing that model is drawn from the military and has been around for 100 years is reaching its end of its useful life for us at Unilever. What we want to do is assemble the right network of people with the right skills to work on an opportunity. When the opportunity is realized, they will disband and move on to the next assignment.

We see a future of work that’s more inclusive. It engages our expanded teams across the value chain more. It’s much more flexible and frankly this we're working as a lot more fun. We’re already doing it. People are loving it. They’re having a ball. I should go on and on about that. So, winning in the future is going to require us to have an organization that’s fast and disciplined in execution is efficient at the right cost and is absolutely digitally native. And as you know, we’ve already started making some organizational and team changes this year.

Perhaps the most significant is to establish or re-establish the role of Chief Operating Officer. Nitin has a deep knowledge of both our markets and our divisions, looking rather dapper here I must say. He has a strong track record of delivering, and he is well placed to deliver our annual performance and health, step-up our growth ambition. Nitin has already removed all dedicated regional layers in Unilever and so he now has our 15 biggest markets reporting directly to him.

And of course, the intends on that is speed. His primary responsibility is to deliver the three differentiated divisional strategies, and for the avoidance of doubt, Nitin has the authority over end year resource reallocation. And while our focus on growth runs through the whole organization, our three divisions do continue to have differentiated strategic rules and priorities and that hasn't changed.

Let me quickly introduce them. So, Beauty & Personal Care is our largest division with 42% of the group's turnover is led by Sunny Jain, who is joining Unilever this month from Amazon, bringing added digital e-commerce experience to my leadership team. The primary strategic priority for BPC is growth. Firstly, getting more from the core by leveraging our largest brands to deliver on trend innovation with superior performing products.

Secondly, we will continue to build future fit portfolio watching new brand such as Ayush in India. I think in the last two years we’ve launched 13 new brands in Beauty & Personal Care. Some will be big hits and others will not, which is fine because we launched these new brands with quite a different model. Very low-cost launches, limited capital, brand communication that’s focused in-store and on social media, typically premium priced and with good gross margins from the get go.

The BPC division is also focused on winning in some high growth spaces. Some of which I mentioned earlier, but also emerging consumer segments and of course markets with the future continue our growth in the prestige division, which we are building through acquisition and sustained double-digit organic growth of the acquired prestige businesses, all underpinned by a new model of marketing that we don't have time to go into here, but it replaces interruption based advertising with a new model that’s built around purpose, content, and massive distribution at scale of using digital techniques.

Before I finish on Beauty & Personal Care, I should probably mention the latest acquisition in our prestige portfolio Tatcha. We invested the deal last night. It’s a modern prestige skincare brand inspired by Japanese Geisha beauty rituals. One of the absolute highest performing beauty brands in North America and we are absolutely delighted to welcome the founder Vicky Tsai, and the whole of the Tatcha business to the Unilever family.

Okay, Food & Refreshment is our second largest division. 38% of our turnover, now led by Hanneke, who was previously President of Unilever in Europe, and overarching priority in Foods & Refreshment is to get into higher growth segments. Plant-based [eating] is a megatrend and so in addition to things like acquiring the vegetarian butcher late last year, we’ve launched a number of vegan products.

I mean who would have thought that a vegan Magnum, vegan Ben & Jerry's even. And Knorr recently launched a report in partnership with WWF, which has highlighted the 50 plant foods that we should eat for healthier and better future, and this megatrend really is informing both our prioritization, our acquisition, and our innovation agendas. And so, it’s a third division homecare.

Homecare now being led by Peter, who was most recently running both Southeast Asia and our global digital transformation program. So, another digital expert that we’re welcoming to the top table of Unilever. Now our home – one unique characteristic of our homecare division is that 80% of this turnover sits in emerging markets. Quite distinct from other multinationals and we believe this gives us a unique opportunity to continue to capture the very good growth that’s coming from home care in these markets, while importantly steadily stepping up profitability. The profit squeeze on home care is higher than the other two divisions.

We’re focused on building strong foundations of superior products at the right prices, and you see here the new OMO, reached off to a great start in Brazil, but at the same time we are transforming our portfolio to be future fit. Seventh generation product that you see here is eight times concentrated, it’s being designed to be e-commerce friendly life from the get go. And finally, I must say sustainability is a big focus for this largely petrochemical derived homecare business.

So, things like time-based detergents and a major, major program around less plastic, better plastic, and no plastic is driving a reduction of single-used plastic across Unilever. In fact, our goal is to keep plastic in the economy and out of the environment. So, our vision is that Unilever will remain recognized as the leader in sustainable business. We will demonstrate how our purpose led and future fit model leads to superior financial performance, specifically by delivering consistently in the top third TSR.

And we have now integrated what previously were two separate initiatives in the business. Our business strategy and our sustainable living plan into one common strategy, which puts at the center our purpose that does not change, which is to make sustainable living commonplace. And we’ve organized all of our priorities in the company around three very deeply held believes that brands with purpose grow, that companies with purpose last, and the people with purpose thrive.

[Indiscernible] framework, it captures our agenda for the coming years. And as you can imagine there is enormous detail of activity system and KPIs sustainable below this simple superstructure, but this is the model we will be using to drive the strategic agenda of Unilever in the coming years. I’m now going to hand over to Graeme, who's going to focus on one of these strategic imperatives, which relevant for this event is to deliver long-term superior value. Graeme, over to you.

Graeme Pitkethly

Thanks Alan. And, okay, good morning everybody. I’m a bit short in time. So, I’m going to crack on a fair piece here. Long-term superior value is going to come by moving the portfolio into higher growth phases and a continued focus on reshaping the portfolio that’s both organically and inorganically, and by being a faster lower-cost and fully-digitized company. Now, there are many levers that we can use to achieve that, but today I want to focus on the levers of margin, the lever of brand investment, and acquisitions and disposals.

Let me start with the lever of margins since this has been become a focus on this recently. We’ve grown from a 16.4% underlying operating margin in 2016. We’ve added 200 basis points to 18.4% at the end of 2018, and we have a clear and sensible path as Alan and I talked about many times to reach 20% by 2020.

Now, this isn't a precise 20.00%, you know, at midnight on the 31st December 2020, but it is one that can be delivered through the savings and reinvestment programs that we have, up and running already, and very well established in the business, right. The major building blocks of margin are mix, and our three key cost and reinvestment programs, which are 5-S, ZBB and our restructuring investment. That mix comes from shifting the portfolio into higher margin product segments and channels.

For example, by growing faster in Beauty & Personal Care or in the high margin geographies, we can grow our margin through positive mix, and you might recall that emerging markets are in aggregate margin accretive for Unilever. So, that opportunity for growth that Alan mentioned earlier that in itself delivers positive mix to the margin.

Our 5-S program is a holistic program. It covers pricing, it covers product sourcing, product design at an SKU level in every single country, and with the help of 5-S, we’re well on the way to delivering €4 million of multi-year savings that come from the supply chain by 2020.

Our ZBB program is being managed really on an unprecedented scale in terms of the cost base that we’re addressing and the global reach of the program. We went from a first pilot in Thailand, back in 2015, to a full program that now runs across all of our divisions and all of our markets, and ZBB looks at to continue through 2020 and deliver beyond the €2 billion initial multi-year target that we set for it.

Now both 5-S and ZBB is important to note that we reinvested at least two thirds of the savings back in the business to fuel our growth engine, and we made available up to €3.5 billion of restructuring investment as Unilever continues the journey to being future fit. Now, the continued focus on cost and supply chain savings combined with the investments that we're making mean that the savings journey in Unilever will not simply come to a hard close following 2020, but it’ll continue each and every year as the new activity is underway, for example, end-to-end digitization of our business begins on our greater impact [into it].

Let me give you a little bit more detail now just on ZBB and 5-S. In the ZBB model, of course, we measure our sales in terms of benchmark quartiles. Of course, you can see here from the blue arrows and where the position that we are now – where we are versus those benchmarks compared to where we started back in 2015. So, in BMI branded marketing investment, for example, we sit at the top of the third quartile. So, we’re investing more than the average of the benchmarks.

But in Facilities, which you’ll also see here, you can see that we aim to spend less. We’re almost at the first quartile in terms of spend efficiency, and of course, we don’t aim to be in the first quarter everywhere, and certainly not in BMI as we’re a company of brands and those brands require support, but we do use these benchmarks very, very actively as a way to make strategic cost choices and measure our progress.

Looking now to 5-S, we’ve got two great examples here of the kinds of areas that we target for savings. In fabric sensations, we’ve been harmonizing our use of active ingredients, and that’s been done without any impact on the efficacy of the product and it allows us to make cost savings and move faster to the market. In Axe deodorants, we’ve been focusing on reducing the weight of our cans and that means we use less aluminum, which is good for the planet and good for our cost model, which leads me to the second topic I’d like to cover, brand investment.

So, we’ve invested €310 million more in media over the past two years. However, looking at just one number, we think really oversimplifies one of the deep and multi-faceted area. The world of marketing is changing as we all know. We’ve talked before about how rapidly we’re moving to digital marketing, and of course, 40% of our media is now digital. But as marketing changes, the rules of what is good spend and what is bad spend are also shifting.

Now traditionally, overheads have been seen in Unilever's bad spends. However, we're choosing to invest more in marketing expertise such as in our digital hubs and our people data centers because we believe this is the right way to grow our brands. A new investment in these important capabilities appears as overheads rather than its brand and marketing investment.

And when we are assessing the effectiveness of total spend on our brand support, the measures that are more important than just absolute euros are as follows. Asset quality, how good a particular campaign is; brand health, how our consumers view the brands; a share of voice, which is a traditional measure that one that we continue to use very actively in the business, and we continue to be competitive across all of these factors.

The third topic I’d like to touch on finally is M&A, and of course, acquisitions and disposals have been a critical part of our portfolio evolution over the last decade. Since 2015, we’ve made 32 acquisitions, we’ve invested nearly €11 million and we’ve made 11 disposals realizing just over €8 billion for a net cash outflow of about €3 billion.

In Q1 of 2019, M&A activity added some 70 basis points to our growth, and we believe it is important to acquire new brands in high growth areas such as Seventh Generation and Schmidt's. We’ve been targeting adjacent white spaces for Unilever like healthy snacking in the UK with Graze and OLLY in the U.S., a bit of [indiscernible] on supplements business, which complements our small existing VMS portfolio, portfolio which is in Pukka and Equilibra.

Like for some brands, we undertake rapid roll-outs. These are sometimes done internationally and sometimes within a country where we can often be an opportunity for growth with new retail partners. Examples of different types of roll-out include Pukka, which we rolled out to new markets across Europe, the U.S., and Australia or Quala in Latin America, for which we moved quickly into deodorants with the Savile and eGo brands across Central America. Another good example would be Seventh Generation, which Alan just spoke about.

Completing 32 acquisitions in three years requires a disciplined process, and behind all of our M&A, we have a rigorous and consistent activity system where every acquisition target is assessed against tough financial criteria, strategic fit, and business readiness. And for every acquisition that we close on, we’ll have done and investigated around 10 times more in the funnel and we have looked at those in detail but not progressed them. So, this keeps all of our teams very active in this space.

Finally, let me sum up with our investment case. Running a purpose-led business model is, we believe, more relevant today than ever before. We are leading for a company, which puts consumers at the very center of everything that we do. We want our customers, our employees and our communities to share our vision and we want you, our shareholders, to be invested in the Unilever and in how we do business. We believe that our purpose-led business together with our multi-stakeholder model will lead to superior financial performance and long-term value creation.

Thank you for listening, and now we’ll open up for some questions. If we can, one question for Alan please.

Question-and-Answer Session

A - Alan Jope

Does anyone have a question that you would like to ask Graeme or myself?

Unidentified Analyst

You talked about, you know, a company with purpose or brands with purpose, and I’ve seen a couple of your brands cross the line into political, at least, and that’s my opinion. When does purpose cross into political and become bad? I mean because what – something like what Ben & Jerry's has done in the last year and a half, two years, you cut off half your market?

Alan Jope

Yes. Let me – I agree with the – what’s buying your question. It is impossible for business leaders or brands who go down this avenue not to tackle political issues. And however, I think it is absolutely wrong to get involved in party political issues and to explicitly take sides on one side or another of the political space from. And so, where we – where one of our brands to explicitly allying with a candidate or an individual party…

Unidentified Analyst

[Indiscernible]

Alan Jope

Yes, I didn't say that. I actually said, [if he can resist] and I was resisting divisiveness in society, but I think it went too far because it started to indicate an alignment with one side of the [house] and that will not happen on my watch.

Graeme Pitkethly

Let’s go. Alright.

Alan Jope

I have to respect for – that was a good controversial question that we got. Thank you. But I have to respect for the agenda. I think we have to wrap up there. Thanks very much everybody.