Unilever 2003 Annual Report Download - page 11

08 Unilever Annual Report & Accounts and Form 20-F 2003
Chairmen’s statement
(continued)
Home and Personal Care division (HPC)
Leading brands continued to drive growth in the Home and
Personal Care division at 4.2%. Operating profit (BEIA) rose by
4.9% and operating margin (BEIA) reached 15.8%.
Mass personal care is now a powerhouse in the HPC division and
accounts for 27% of Unilever leading brand sales. We achieved
double-digit growth for Axe,Lifebuoy,Lux, Rexona and Sunsilk,
and our largest personal care brand, Dove, grew by an
outstanding 21%.
Growth in laundry was flat as we put the priority behind value
creation through excellent improvements in our margins and
capital efficiency. Household care had a difficult first half year,
but we saw the new strategy of stronger innovations on the
core brands start to bite in the second half.
Prestige fragrances diluted the growth rate of the division by 1%.
The year ahead and Unilever 2010
In 2004, our first priority is to deliver on our promises in the final
year of Path to Growth. We intend once again to achieve low
double-digit earnings BEIA growth and will focus all the talent
and ingenuity of our people on delivering in full our commitments
on brand focus, margin improvement and capital efficiency. We
will end the year a much stronger and more agile and focused
business than at the start of the programme.
Yet as we complete Path to Growth we are also preparing
Unilever for the next phase of our strategy to 2010. The Board
has conducted a thorough review of the forces that will shape
Unilever’s world, and of what makes us unique as a business.
Our roots in hygiene, nutrition and personal care mean that
people all over the world choose our brands 150 million times
every day for the benefits they bring in helping them feel good,
look good and get more out of life. We know that these are
benefits that are wanted by more and more of the world’s
population – from those just entering the ‘consumer society’
to the more affluent, ageing, health conscious citizens of the
developed world. We sum this up in the single word, “Vitality”,
and intend the mission of Unilever, which is set out at the top
of this letter, to be to add vitality to life through our brands,
our people and the communities we serve.
Our consumers are also citizens and demanding ever higher
standards of corporate behaviour. We are proud of our reputation
for governance, transparency and engagement with communities
and the environment, and believe that the Unilever name is a
valuable asset. By the time we celebrate our 75th birthday in mid
2005, the Unilever name will be present on our packs as well as
letterheads and company signs.
For the period 2005-10 our priority continues to be sustained top-
third TSR performance and we intend to deliver shareholder value
by the generation of over €30 billion of ungeared free cash flow
and growth in economic profit, the latter translating into an
increased return on invested capital from 12.5% in 2003 to
at least 17% by 2010.
The overall objective is to build our brands and to build
sustainable value. We will continue to be flexible in how we pull
the levers of value creation as challenges and opportunities arise
from time to time. So we will not commit Unilever to any one
combination of sales and margin growth in any one year.
However, our ambitions for value creation are underpinned by
the expectation of sustained revenue growth, continued margin
expansion and further improvements in capital efficiency.
In the combination of trusted brands, talented people and an
inspiring mission we believe that Unilever is a stronger business
than it has ever been.
Antony Burgmans Niall FitzGerald KBE
Chairmen of Unilever