Unilever 2001 Annual Report Download - page 22

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Unilever Annual Report & Accounts and Form 20-F 2001
OPERATING REVIEW BY CATEGORY – FOODS >19
Report of the Directors
The Foods division was established in January 2001 and we
have made excellent progress in building and transforming
our Foods business.
We rapidly integrated Bestfoods, together with Slim•Fast,
Ben & Jerry’s and Amora Maille. The integration achieved all
the synergy targets, realising savings of over 400 million,
and we are on course to complete most of our operational
integration by early 2002.
The new business delivered solid growth thanks to a more
focused portfolio of leading brands and despite challenging
economic conditions in many of our key markets. Overall
sales grew by 20%, with a significant increase coming from
the recent acquisitions of Bestfoods, Slim•Fast, Amora Maille
and Ben & Jerry’s. Excluding the impact of acquisitions and
disposals, underlying sales growth was 3%.
Total operating profit BEIA rose by 49% and margins
reached 14.3% reflecting the benefits from the Path
to Growth restructuring programme and Bestfoods
synergy savings.
The culinary category, thanks to the acquisitions, grew to
become Unilever’s biggest while profit margins increased
very significantly. In addition, Unilever’s spreads operations,
which returned to sales growth after a period of decline,
and our ice cream and frozen foods business, which
increased its profits sharply following restructuring,
performed particularly well. Our performance in the
fast-growing foodservice arena and in developing and
emerging markets demonstrate our increased potential
in these sectors.
The greater size, scope and global reach of the new
business enhances our ability to deliver benefits of scale
and to achieve our vision of becoming the world’s leading
food company.
On pages 20 to 23 is a review of performance in each major
product category. Included in the figures for each category
are the results of two areas that are important to Unilever:
Health and wellness
Consumers are increasingly demanding healthy food
products. In 2001, our brands grew by meeting such
needs, in both industrialised and developing markets.
The US-based Slim•Fast range, which we market as a
nutritionally responsible way to achieve and maintain a
healthy weight, delivered excellent growth. We successfully
extended the brand beyond its US heartland, with launches
in Australia and the Netherlands and relaunches in Canada
and the UK. We also extended the range into soups.
A profitable year for Annapurna in India and a successful
African roll-out from Ghana to Côte d’Ivoire shows how
we meet a very different consumer need: for nutritionally-
enhanced staples at an affordable price. Sales of
AdeS soydrinks in Latin America were hit, however,
by the economic difficulties in the region.
Foodservice
The integration of Bestfoods into Unilever created one
of the world’s leading foodservice businesses, providing
solutions for chefs, restaurateurs, caterers and fast food
retailers. Unilever Bestfoods foodservice operates in more
than 60 countries and is market leader in our target
categories.
While sales performance rallied towards the end of 2001,
there was a slight decrease in turnover in foodservice during
the year, due to a complex integration challenge, adverse
economic conditions, and setbacks in some larger countries,
including France, Germany and the UK. However, we
enjoyed double-digit growth in many smaller national
markets and we improved profit margin overall.
We are confident that foodservice will fulfil its potential as
a major growth and innovation driver for the Foods division.