Unilever 2002 Annual Report Download - page 32

Unilever Annual Report & Accounts and Form 20-F 2002
Operating review by category – Foods 29
Report of the Directors
We are determined to remain the world’s number one ice
cream company. We have transformed the cost structure of
the business and focused on profitable countries and are
now able to concentrate on innovation and growth. For
example, we took brands like Cornetto out of the static
freezer box and into the growing soft-serve out-of-home
sector, while continuing to target the in-home sector with
innovations such as mini multi-packs and Cornetto snack-
size ice cream, both of which made good progress.
We continued to widen the appeal of our ice creams to
consumers who want fun, novelty and freshness. For
example, we targeted consumers’ desire for indulgence
(Magnum), refreshment (Solero) and kids fun (Paddle Pop).
We made good progress in Latin America and North
America and, in the context of a poor summer, performed
well in Europe.
In October 2002, the European Court of First Instance heard
our appeal against the European Commission’s negative
decision in the matter of cabinet exclusivity in Ireland. That
decision remains suspended, while we await the ruling of
the Court.
Frozen foods
Convenience combined with fresh-tasting, high quality
ingredients drove the success of our Iglo, Bird’s Eye and
Findus frozen ready meal solutions, which grew by 11%.
Our overall frozen foods turnover fell by 8%, primarily
due to disposals. A strong fourth quarter driven by quality
innovations and brand support resulted in an underlying
sales growth of 1% for the year.
Sales growth in ready meals was offset by the implications
of the end of the BSE crisis, which last year drove stronger
demand for fish, especially in the UK. Our frozen foods
capability is a valuable asset across the portfolio, which
we are now starting to test with other brands.
2001 results compared with 2000 at
current exchange rates
€million €million %
2001 2000 Change
Turnover 7 727 7 869 (2)%
Operating profit 446 227 97%
Group turnover 7 727 7 848 (2)%
Group operating profit 446 225 98%
2001 results compared with 2000 at
constant 2000 exchange rates
€million €million %
2001 2000 Change
Turnover 7 748 7 866 (2)%
Operating profit BEIA 800 637 26%
Exceptional items (331) (394)
Amortisation of goodwill
and intangibles (29) (17)
Operating profit 440 226 95%
Operating margin 5.7% 2.9%
Operating margin BEIA 10.3% 8.1%
Ice cream
Our major ice cream brands performed well during 2001 and
underlying sales grew by almost 3%. Progress was driven by
innovations, such as Magnum snack-sizes, Cornetto miniature
and multi-packs and Cornetto-branded soft ice cream.
A positive overall picture was affected by declining wrapped
impulse sales in Germany and the UK. In North America our
Canadian and US businesses delivered excellent underlying
sales growth and much improved profits. The strength of our
portfolio was demonstrated by the success of Ben & Jerry’s in
the US super-premium market during its first full year as a
Unilever business.
In line with our commitment to a world-class supply chain,
we closed eight factories that were of limited long-term value
and introduced more efficient ways of buying raw materials
and packaging. We also eliminated certain poorly performing
products and withdrew from nine countries where our ice
cream business was unprofitable, including Colombia, Russia
and Saudi Arabia.