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30 Unilever Annual Report & Accounts and Form 20-F 2003
Operating review by region
Latin America (continued)
2002 results compared with 2001 € million € million € million € million % %
Exchange Change at Change at
2002 at rate 2002 at 2001 at actual constant
2001 rates effects 2002 rates 2001 rates current rates 2001 rates
Group turnover 7 106 (1 673) 5 433 6 591 (18)% 8%
Group operating profit 648 (143) 505 338 49% 92%
Turnover 7 119 (1 674) 5 445 6 605 (18)% 8%
Operating profit BEIA 1 022 (252) 770 882 (13)% 16%
Exceptional items (95) 37 (58) (261)
Amortisation – goodwill and intangible assets (279) 72 (207) (282)
Operating profit 648 (143) 505 339 49% 91%
Operating margin 9.1% 9.3% 5.1%
Operating margin BEIA 14.4% 14.1% 13.4%
Turnover and underlying sales growth 2002
(at constant 2001 rates) vs 2001
Underlying sales growth (%) 12.1
Effect of acquisitions (%) 0.5
Effect of disposals (%) (4.4)
Turnover growth (%) 7.8
Turnover fell by 18%, after a reduction of 26% arising from
currency movements. Weaker currencies in Argentina and Brazil
contributed 10% and 5% respectively to this decline. Operating
profit rose by 49% and operating profit BEIA fell by 13%, with
currency movements contributing reductions of 42% and 29%
respectively. The underlying performance of the business after
eliminating exchange translation effects is discussed below at
constant exchange rates.
Underlying sales grew by 12.1%, driven by pricing action to
recover devaluation-led cost increases, particularly in Argentina.
Outside Argentina, volumes grew by 2% with price ahead by 9%.
Including the impact of disposals, turnover in the region grew by
8%. Excluding the impact of acquisitions and disposals, turnover
was 14% below 2001 levels.
Personal care performed very strongly in 2002. Sunsilk shampoo
marketed in Latin America as Sedal grew well across the region.
Dove shampoo was launched in Brazil, Chile, Mexico and Peru
and made very good progress. In deodorants, Rexona was
successfully launched in Venezuela and relaunched in Colombia
and we took clear market leadership in Mexico. In laundry,
market shares have held firm against our nearest competitor and
we responded to changed economic conditions with packs which
specifically address the reduced spending power of consumers.
In Foods, ice cream grew by over 10%, mostly volume, with the
main contributions from Brazil and Mexico. Good performances
were led by the launch of Knorr noodle cups in Mexico, an
energised Hellmann’s campaign in Chile and significant growth
in Arisco in Brazil. In spreads, Becel de Capullo was launched
in Mexico, introducing the Becel brand to that country.
Lipton ready-to-drink tea continued to grow well in Brazil
and the soy-based beverage AdeS made very good progress
in both Brazil and Mexico.
In Argentina, consumer demand was considerably down and
volumes were affected as a result. We continued to hold strong
market shares and our experienced local management managed
the business in a way which preserves its long-term health.
Operating margin increased 4.0% to 9.1% and operating margin
BEIA increased by 1.0% to 14.4% in 2002, after an increase in
investment behind the leading brands.