Unilever 2004 Annual Report Download - page 31

28 Unilever Annual Report and Accounts 2004
Operating review by category – Foods
Spreads and cooking products
2004 results compared with 2003 € million € million € million € million % %
Exchange Change at Change at
2004 at rate 2004 at 2003 at actual constant
2003 rates effects 2004 rates 2003 rates current rates 2003 rates
Group turnover 4 724 (115) 4 609 4 977 (7)% (5)%
Group operating profit 621 (13) 608 782 (22)% (21)%
Turnover 4 759 (115) 4 644 5 028 (8)% (5)%
Operating profit BEIA 781 (15) 766 865 (11)% (10)%
Exceptional items (81) (4) (85) (2)
Amortisation – goodwill and intangible assets (72) 6 (66) (74)
Operating profit 628 (13) 615 789 (22)% (20)%
Operating margin 13.2% 13.3% 15.7%
Operating margin BEIA 16.4% 16.5% 17.2%
Turnover and underlying sales growth 2004
(at constant 2003 rates) vs 2003
Underlying sales growth (%) 1.6
Effect of acquisitions (%) 0.4
Effect of disposals (%) (7.2)
Turnover growth (%) (5.4)
Turnover
€ million
2004 4 644
At current exchange rates At current exchange rates
2003
2002
2004
2003
2002
766
Operating profit BEIA
€ million
At current exchange rates
2004
2003
2002
615
5 028
6 216
865
967
789
787
Operating profit
€ million
Turnover fell by 8% at current rates of exchange, with currency
movements contributing a 3% decline. Operating profit fell
by 22% and operating profit BEIA declined by 11%, with
currency movements contributing a 2% and 1% decline
respectively. The underlying performance of the business after
eliminating these exchange translation effects is discussed below
at constant exchange rates.
Underlying sales grew by 1.6% with strong momentum in the
second half of the year. Operating margin BEIA declined to
16.4% as we increased advertising and promotion behind
innovations such as dairy cream alternatives and the extension of
our healthy heart range. These brands were strengthened further
with the successful launch of Becel/Flora pro•activ milk drinks and
yoghurts in a number of European markets and continued to gain
share in spreads. There were also good performances by well-
established brands like Rama and Blue Band following the
extension into the range of Finesse cooking creams at the
end of 2003.
In North America Country Crock produced excellent results, while
the launch of Carb Options Skippy peanut butter is now being
followed by an extension into snack bars.
In Turkey, there were good results for Becel, but significant price
reductions on our Sana brand to defend our market volume
meant a decline in sales.
Overall growth in the category was held back by lower sales of
‘tail’ brands which are being managed for value and in which
investment is low.