Unilever 2004 Annual Report Download - page 35

32 Unilever Annual Report and Accounts 2004
Operating review by category – Foods
Ice cream and frozen foods
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 6 632 (169) 6 463 6 994 (8)% (5)%
Group operating profit 701 (21) 680 1 024 (34)% (32)%
Turnover 6 632 (169) 6 463 6 994 (8)% (5)%
Operating profit BEIA 825 (23) 802 1 012 (21)% (19)%
Exceptional items (101) – (101) 32
Amortisation – goodwill and intangible assets (23) 2 (21) (20)
Operating profit 701 (21) 680 1 024 (34)% (32)%
Operating margin 10.6% 10.5% 14.6%
Operating margin BEIA 12.4% 12.4% 14.5%
Turnover and underlying sales growth 2004
(at constant 2003 rates) vs 2003
Underlying sales growth (%) (3.4)
Effect of acquisitions (%) –
Effect of disposals (%) (1.9)
Turnover growth (%) (5.2)
Turnover
€ million
2004 6 463
At current exchange rates At current exchange rates
2003
2002
2004
2003
2002
802
Operating profit BEIA
€ million
At current exchange rates
2004
2003
2002
680
6 994
7 456
1 012
833
1 024
569
Operating profit
€ million
Turnover fell by 8% at current rates of exchange, with currency
movements contributing a 3% decline. Operating profit fell
by 34% and operating profit BEIA declined by 21%, with
currency movements contributing a 2% decline in both cases.
The underlying performance of the business after eliminating
these exchange translation effects is discussed below at constant
exchange rates.
Underlying sales of ice cream and frozen foods were lower by
3.4%, with declines in both categories. Operating margin BEIA
declined to 12.4% with profitability affected by poor ice cream
sales in Europe and increased dairy costs in North America.
Ice cream sales in Europe were affected by a poorer summer
compared with the excellent weather conditions in the summer of
2003. Lower priced competition led to some market share loss in
take-home tubs, but this was partly offset by the roll-out of new
variants such as Magnum Intense and Cornetto Love Potions.
Our US ice cream brands Ben & Jerry’s, Breyers and Klondike
continued to grow well, gaining market share in a highly
competitive market. Key to this success has been meeting
consumer demand for health and wellness lines such as low-carb,
low-sugar, lactose-free and yoghurt products, which now
represent over 20% of our portfolio.
In Latin America we successfully launched AdeS Kibon ice cream,
extending the soy benefits of AdeS into ice cream. In Asia, there
was strong growth of our ice cream businesses, particularly in
Indonesia and China.
The frozen food business is being reorganised to focus more
on higher-growth segments of the market, while margins
continue to improve through restructuring. The relaunch of
the Iglo/Birds Eye/Findus brand family was started in the second
half of the year with Birds Eye in the UK. This has been well
received and is being rolled out to the other key European
markets in 2005, providing a common identity for the brands.
Innovations included Steam Fresh vegetables and meals, bringing
the benefits of steaming to consumers across countries in Europe.