Unilever 2006 Annual Report Download - page 32

Unilever Annual Report and Accounts 2006 29
Report of the Directors (continued)
Financial review (continued)
Areduced contribution was generated from our shares in joint
ventures and associates, most significantly from our associate
JohnsonDiversey. Profit from discontinued operations includes the
gain of €458 million arising from the sale of UCI.
The Group’s effective tax rate of profit for the year was 26%,
compared with 21% in 2004, which reflected resolution of a
higher level of outstanding prior year tax issues.
Net profit and earnings per share from continuing operations
increased by 22% and 23% respectively in the year. Including the
profits of the discontinued operations, total earnings per share
increased by 37% in the year.
Return on invested capital (ROIC) for the year was 12.5%, up
from 10.7% in 2004. This reflects the lower restructuring costs
and higher profits on business disposals included in net profit.
ROIC retains all goodwill and intangibles in invested capital,
regardless of impairment.
Acquisitions and disposals
2006
On 4 September 2006, Unilever announced a public offer to
purchase all ordinary shares of Elais-Unilever S.A. held by third
party shareholders. Elais-Unilever S.A. is reported as a subsidiary
and is Unilever’s main foods business in Greece. The offer price
was €24.50 per share, with the public offer closing on 25 October
2006. A total of 2 234 692 shares werepurchased by the end
of 2006, increasing Unilever’s ownership of Elais-Unilever S.A.
to 83.52%.
On 3 November 2006 we announced the completion of the sale
of the majority of our frozen foods businesses in Europe to the
Permira Funds. Unilever received proceeds of €1.7 billion, and
recorded a profit on disposal of €1.2 billion. The businesses sold
included operations in Austria, Belgium, France, Germany, Ireland,
the Netherlands, Portugal and the United Kingdom.
In 2006 we disposed of various other businesses and brands with
acombined turnover of around €280 million, including Mora in
the Netherlands and Belgium, Finesse in North America and Nihar
in India.
2005
Therewereno material acquisitions during 2005.
On 11 July 2005, we completed the sale of our Prestige fragrance
business, UCI, to Coty Inc. of the United States. Unilever received
US $800 million in cash, with the opportunity for further deferred
payments contingent upon futuresales.
Business disposals in 2005 included Stanton Oil in the UK and
Ireland, Dextro in various countries in Europe, Opal in Peru, Karo
and Knax in Mexico, spreads and cooking products in Australia
and New Zealand, Crispa, Mentadent, Marmite, Bovril and
Maizena in South Africa, frozen pizza in Austria, Biopon in
Hungary and tea plantations in India. The combined annual
turnover of these businesses was approximately €200 million.
In March 2005 Unilever carried out a restructuring of its
Portuguese foods business. Before the restructuring Unilever
Portugal held an interest in FIMA/VG – Distribuição de Produtos
Alimentares, Lda. (FIMA) foods business, a joint venture with
Jerónimo Martins Group, in addition to its wholly owned
Bestfoods business acquired in 2000. As a result of the transaction
the two foods businesses – FIMA and Unilever Bestfoods Portugal
–were unified and the joint venture stakes were re-balanced so
that Unilever now holds 49% of the combined foods business
and Jerónimo Martins Group 51%. See page 123 for further
details on the Portuguese businesses whose ownership was
further reorganised as at 1 January 2007.
2004
There were no material acquisitions during 2004.
In 2004 we disposed of more than 20 businesses with total
turnover in excess of €700 million. Significant disposals included
the sale of certain household care brands in North America, our
edible oils business under the Capullo, Inca and Mazola brands
in Mexico, the Dalda brand in Pakistan and the sale of our
European frozen pizza and baguette business. Our chemicals
business in India (Hindustan Lever Chemicals) was merged
with Tata Chemicals.
For further information on the impact of acquisitions and
disposals refer to note 26 on page 113.
Dividends and market capitalisation
Dividends per share
Per €0.16 Per 31⁄9p
NV ordinary share PLC ordinary share
€€££
2006 2005 2006 2005
Interim 0.23 0.22 15.62 15.04
Final –0.44 –30.09
Proposed final 0.47 –32.04 –
0.70 0.66 47.66 45.13
One-off 0.26 –17.66 –
0.96 0.66 65.32 45.13
Final dividends for 2006 are subject to approval at the Annual
General Meetings. If approved, this will bring the total regular
dividend, excluding the additional one-off payment, to €0.70 per
sharefor NV and 47.66p for PLC, an increase of 6% in each case.
In accordance with IFRS, no provision for the amount of this
dividend, estimated as €1 358 million, has been recognised in
the financial statements for the year ended 31 December 2006.
The additional one-off dividend of €751 million was paid during
December 2006.
Unilever’s combined market capitalisation at 31 December 2006
was €63.4 billion (2005: €57.5 billion).