Unilever 2004 Annual Report Download - page 39

36 Unilever Annual Report and Accounts 2004
Operating review by category – Home and Personal Care
Home care
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 7 016 (240) 6 776 7 225 (6)% (3)%
Group operating profit 613 (14) 599 908 (34)% (33)%
Turnover 7 023 (241) 6 782 7 230 (6)% (3)%
Operating profit BEIA 794 (20) 774 914 (15)% (13)%
Exceptional items (168) 5 (163) 8
Amortisation – goodwill and intangible assets (12) 1 (11) (14)
Operating profit 614 (14) 600 908 (34)% (32)%
Operating margin 8.7% 8.9% 12.6%
Operating margin BEIA 11.3% 11.4% 12.6%
Turnover and underlying sales growth 2004
(at constant 2003 rates) vs 2003
Underlying sales growth (%) (0.4)
Effect of acquisitions (%) 0.2
Effect of disposals (%) (2.7)
Turnover growth (%) (2.9)
Turnover
€ million
2004 6 782
At current exchange rates At current exchange rates
2003
2002
2004
2003
2002
774
Operating profit BEIA
€ million
At current exchange rates
2004
2003
2002
600
7 230
8 579
914
917
908
836
Operating profit
€ million
Turnover fell by 6% at current rates of exchange, with currency
movements contributing a 3% decline. Operating profit fell
by 34% and operating profit BEIA declined by 15%, 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.
In 2004, our home care business saw declining underlying sales.
Volumes grew by 1.8% but this was more than offset by price
declines, reflecting increased consumer sensitivity in this area and
resulting in reduced market sizes in the developed world.
Operating margin BEIA declined from 12.6% to 11.3% with
profitability affected by difficult trading in Western Europe.
Performance was on the whole disappointing. Despite gains in
specific territories, overall market share fell – with growth in
developing markets offset by the decline in Europe and North
America.
In laundry, our top performance fabric cleaning brand, Omo,
which is aligned to a common brand proposition across the
world, continued to perform well in difficult trading conditions.
Omo strengthened its position in a number of key markets such
as Argentina, China, Indonesia, Thailand and Vietnam. The
success of Omo was supported by the ‘Pockets’ campaign in parts
of Africa, Asia and Latin America, as well as the ‘Dirt is Good’
campaign and innovations such as Omo Aloe Vera in Latin
America.
Other brands that performed well included the Radiant family
(superior whiteness and brightness marketed as Ala and Rin), and
the fabric conditioner brand Comfort.
The household care business declined due to difficult trading
conditions in Europe, despite strong growth in developing and
emerging markets. Attention was focused on the profitability of
the business, which improved significantly.