Unilever 2001 Annual Report Download - page 24

Unilever Annual Report & Accounts and Form 20-F 2001
OPERATING REVIEW BY CATEGORY – FOODS >21
Report of the Directors
The dairy spread and olive oil categories are growing at an
annual rate of 4%. We are developing these categories as
part of our strategy to stimulate growth. In 2000, new
range extensions increased sales of our Brunch and Crême
Bonjour dairy spreads. In the United States, Brummel &
Brown yoghurt-based spreads achieved double-digit growth,
following the launch of creamy fruit variants.
Bertolli – the world’s leading olive oil – grew in all markets
and was launched in five new Northern European countries.
It is being extended actively into spreads, cooking products
and dressings.
In October 2000, we sold our European Bakery Supplies
business. This followed a strategic review of the business,
first announced as part of our Path to Growth strategy.
The review concluded that the interests of the business,
and its employees, would be better served by joining a
group with a core interest in bakery.
Ice cream and beverages
2001 results compared with 2000 at
current exchange rates
€million million %
2001 2000 Change
Total turnover 7 838 7 823 -%
Total operating profit 464 398 17%
Group turnover 7 695 7 601 1%
Group operating profit 423 367 15%
2001 results compared with 2000 at
constant 2000 exchange rates
€million million %
2001 2000 Change
Total turnover 7 964 7 814 2%
Total operating profit BEIA 881 683 29%
Exceptional items (375) (260)
Amortisation of goodwill
and intangibles (42) (20)
Total operating profit 464 403 15%
Total operating margin 5.8% 5.2%
Total operating margin BEIA 11.1% 8.7%
Ice cream
Our major ice cream brands performed well during 2001
and sales grew by 2%. Progress was driven by innovations,
such as Magnum snack-sizes, Cornetto miniature and multi-
packs and Cornetto-branded soft ice cream.
A positive overall picture was affected by declining wrapped
impulse sales in Germany and the UK. In North America,
our Canadian and US businesses delivered excellent sales
growth and much improved profits. The strength of our
portfolio was demonstrated by the success of Ben & Jerry’s
in the US super-premium market, during its first full year as
a Unilever business.
In line with our commitment to a world-class supply chain,
we closed eight factories that were of limited long-term
value and introduced more efficient ways of buying raw
materials and packaging. We also eliminated certain poorly
performing products and withdrew from nine countries
where our ice cream business was unprofitable, including
Colombia, Russia and Saudi Arabia.
The next significant development in the European
Commission’s investigation into our distribution
arrangements for ice cream in Ireland is expected later
in 2002. The Court of First Instance will then hear and
subsequently rule on our appeal against the Commission’s
negative decision in the matter of cabinet exclusivity.
That decision is currently suspended, pending the
outcome of the appeal.
Beverages
Our Lipton global core brand grew by 6%, led by double-
digit growth in ready-to-drink tea delivering a ‘system sales’
growth of 10% worldwide. This growth was again boosted
by our innovative ‘Paint the World Yellow’ programme,
which is now in the process of being implemented in
30 countries.
In Japan, sales of Lipton ready-to-drink tea grew strongly
due to our partnership with drinks manufacturer Suntory.
Our recent innovation, Lipton Cold Brew cold infusion
teabags, grew well and has now been rolled out across
most of the US. However, overall sales and profits declined
in that country.
The traditional tea market in Central Asia declined in value.
Fierce competition from loose leaf tea competitors in India
made our beverage sales decline, but a major cost
effectiveness drive resulted in higher profits. In Poland and
Russia, sales showed double-digit growth as we continued
to drive the consumer migration from loose leaf to tea bags.
Overall sales grew by 2% and growth in our leading brands
was over 4%. Operating profits and margins increased due
to significant savings in supply chain costs.
Total operating
profit BEIA  million
Total turnover
 million
At current exchange rates
Total operating
profit  million
6 769
7 823
7 838
632
678
870
574
398
464
99 00 01 99 00 01 99 00 01