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42 Unilever Annual Report and Accounts 2004
Operating review by region
North America
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 9 729 (821) 8 908 9 774 (9)% –%
Group operating profit 280 (21) 259 1 071 (76)% (74)%
Turnover 9 821 (829) 8 992 9 869 (9)% –%
Operating profit BEIA 1 514 (132) 1 382 1 660 (17)% (9)%
Exceptional items (783) 70 (713) (139)
Amortisation – goodwill and intangible assets (421) 38 (383) (420)
Operating profit 310 (24) 286 1 101 (74)% (72)%
Operating margin 3.2% 3.2% 11.2%
Operating margin BEIA 15.4% 15.4% 16.8%
Turnover and underlying sales growth 2004
(at constant 2003 rates) vs 2003
Underlying sales growth (%) 1.5
Effect of acquisitions (%) 0.6
Effect of disposals (%) (2.6)
Turnover growth (%) (0.5)
Turnover
€ million
2004 8 992
At current exchange rates At current exchange rates
2003 9 869
12 568
2002
2004
2003
2002
1 382
1 660
2 070
Operating profit BEIA
€ million
At current exchange rates
2004
2003
2002
286
1 101
1 573
Operating profit
€ million
Turnover fell by 9% at current rates of exchange, fully explained
by currency movements. Operating profit declined by 74% and
operating profit BEIA fell by 17% with currency movements
contributing 2% and 8% declines respectively. The underlying
performance of the business after eliminating these exchange
translation effects is discussed below at constant rates of
exchange.
Underlying sales grew by 1.5%.
Our Foods business grew well following the successful
implementation of a new ‘go-to-market’ approach in 2003 and
the rapid launch of a range of low-carb products across much of
the portfolio in the first half of 2004. Our US ice cream brands
Klondike, Breyers and Ben & Jerry’s continued to grow well,
gaining market share in a highly competitive market through
‘health and wellness’ lines such as low-carb, low-sugar, lactose-
free and yoghurt products. These good performances more than
offset the decline in sales of Slim•Fast which was relaunched
towards the end of the year.
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 a goodwill
impairment charge of €650 million (€591 million at current rates
of exchange) in the fourth quarter.
Deodorants grew strongly through the success of Axe, however
strong competition led to some loss of market share in other
home and personal care categories.
Operating margin declined from 11.2% to 3.2%, reflecting an
exceptional charge for the impairment of Slim•Fast goodwill and a
step-up in exceptional restructuring charges associated with the
One Unilever simplification project. Operating margin BEIA
declined from 16.8% to 15.4%, impacted by higher commodity
costs and the costs of reorganising production facilities for
Slim•Fast in the fourth quarter.