Unilever 2004 Annual Report Download - page 33

30 Unilever Annual Report and Accounts 2004
Operating review by category – Foods
Beverages
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 3 253 (161) 3 092 3 449 (10)% (6)%
Group operating profit (470) 53 (417) 367 (213)% (228)%
Turnover 3 376 (170) 3 206 3 569 (10)% (5)%
Operating profit BEIA 409 (19) 390 527 (26)% (22)%
Exceptional items (731) 60 (671) (11)
Amortisation – goodwill and intangible assets (114) 10 (104) (113)
Operating profit/(loss) (436) 51 (385) 403 (195)% (208)%
Operating margin (12.9)% (12.0)% 11.3%
Operating margin BEIA 12.1% 12.2% 14.8%
Turnover and underlying sales growth 2004
(at constant 2003 rates) vs 2003
Underlying sales growth (%) (3.9)
Effect of acquisitions (%) 0.2
Effect of disposals (%) (1.8)
Turnover growth (%) (5.4)
Turnover
€ million
2004 3 206
At current exchange rates At current exchange rates
2003
2002
2004
2003
2002
390
Operating profit BEIA
€ million
At current exchange rates
2004
2003
2002
(385)
3 569
4 215
527
602
403
383
Operating profit
€ million
Turnover fell by 10% at current rates of exchange, with currency
movements contributing a 5% decline. Operating profit moved
from a profit position in 2003 to a loss position in 2004, a change
of 195%, and operating profit BEIA declined by 26%, with
currency movements contributing a 13% increase and a 4%
decline respectively. The underlying performance of the business
after eliminating these exchange translation effects is discussed
below at constant exchange rates.
Our beverages business performed below par in 2004, with an
underlying sales decline of 3.9%. Operating margin BEIA declined
from 14.8% to 12.1%, the decline being primarily attributable
to the cost of reorganising the production facilities for Slim•Fast.
Growth in leaf tea and good progress with AdeS soy-based drinks
were more than offset by declines in ready-to-drink tea and
Slim•Fast.
In Europe, poor summer weather resulted in reduced sales of our
ready-to-drink Lipton Ice Tea range. However, leaf teas performed
considerably better. The launch of Lipton Ice Tea Green and
Lipton green leaf teas established the brand as the market leader
in green tea, while difficult trading conditions impacted negatively
on the UK and Ireland, two of our biggest tea markets in Europe.
In Asia, Brooke Bond tea in India and Sariwangi in Indonesia both
grew strongly. In China we introduced Lipton Asian tea bags and
Lipton Milk Tea powders. However, it was a difficult year for tea
in Pakistan, which faced increased promotional activity by local
competition.
Our Pepsi Lipton International joint venture, launched in 2003 to
accelerate our growth in under-developed ready-to-drink tea
markets, is producing strong results.
Our health and wellness brands, largely made up of Slim•Fast, were
hard hit by rapidly changing dieting preferences. In the first half of
the year we stabilised market share with the launch of a low-carb
range. Towards the end of the year we relaunched the entire
Slim•Fast portfolio in the US, with improved formulations which
include up to 55% less sugar content. The weight-management
category in North America declined significantly during the second
half of 2004. Our review of the carrying value of Slim•Fast goodwill
resulted in an impairment charge of €650 million (€591 million at
current rates of exchange) being taken in the fourth quarter.
AdeS, our nutritional soy-based drink, continued to grow strongly in
Argentina, Mexico and Brazil and the product range was extended
with the launch of AdeS Yofresh, a soy-based alternative to yoghurt
drinks.