Unilever 2005 Annual Report Download - page 31

28 Unilever Annual Report and Accounts 2005
Operating review by region
Asia Africa
2005 results compared with 2004 € million € million € million € million % %
(continuing operations) Exchange Change at Change at
2005 at rate 2005 at 2004 at actual constant
2005 rates effects 2004 rates 2004 rates current rates 2004 rates
Turnover 10 282 (1) 10 281 9 620 6.9% 6.9%
Operating profit 1 291 6 1 297 1 040 24.1% 24.7%
Operating margin 12.6% 12.6% 10.8%
Restructuring, business disposals and impairment
charges included in operating margin (0.0)% (0.0)% (2.9)%
Turnover and underlying sales growth 2005
(at constant 2004 rates) vs 2004
Underlying sales growth (%) 8.7
Effect of acquisitions (%) 0.0
Effect of disposals (%) (1.6)
Turnover growth (%) 6.9
Turnover at current rates of exchange rose by 6.9%, with no net
impact from currency movements. Operating profit at current
rates of exchange was 24% higher than in 2004, after allowing
for an adverse impact from currency movements of 0.6%. The
underlying performance of the business after eliminating these
exchange translation effects and the impact of disposals is
discussed below at constant exchange rates.
We have capitalised on our leading positions and buoyant
consumer demand across most of the region, growing underlying
sales by nearly 9%, in a competitive environment, and increasing
market share in key battlegrounds.
The growth was broad-based in terms of both categories and
geographies. There were notable performances in all major
developing and emerging countries, including a strong recovery in
India with market share gains, and significant contributions from
China, which was up by over 20%, and from South East Asia,
South Africa, Turkey and Arabia. Japan returned to growth. After
a weak first half, Australia improved in the second half of the
year.
Most of the increase came from volume, but price growth gained
momentum through the year, as we moved to selectively recover
increased commodity costs, especially in Home Care.
Growth was underpinned by a range of innovations. In skin care
in India, Lux has been strengthened with new soap bars from the
global range and the introduction of limited editions. Innovations
in Pond’s included a new ‘mud’ range in China.
In hair care we launched Dove in Indonesia, a Sunsilk summer
range across South East Asia, a new variant for Lux Super Rich in
China and a strengthened Sunsilk range across several key
markets in Africa and the Middle East.
New formulations for our laundry products include improved
whiteness delivery for Surf in Indonesia and Omo for sensitive skin
in Turkey.
In tea, we have substantially strengthened the Brooke Bond brand
in India, while Lipton is benefiting from strong regional
innovations, including Earl Grey and Green Tea variants in markets
such as Turkey and Arabia.
The operating margin was 12.6%, 1.8 percentage points higher
than in 2004. Increased investment in advertising and promotions
was partly offset by productivity gains. The remaining difference
was due to net restructuring, disposal and impairment charges
which were insignificant in 2005 compared with a net charge of
2.9% in 2004.