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32 Unilever Annual Report & Accounts and Form 20-F 2003
Operating review by category – Foods
Savoury and dressings
2003 results compared with 2002 € million € million € million € million % %
Exchange Change at Change at
2003 at rate 2003 at 2002 at actual constant
2002 rates effects 2003 rates 2002 rates current rates 2002 rates
Group turnover 9 419 (868) 8 551 9 272 (8)% 2%
Group operating profit 499 (24) 475 399 19% 25%
Turnover 9 482 (873) 8 609 9 503 (9)% 0%
Operating profit BEIA 1 642 (146) 1 496 1 483 1% 11%
Exceptional items (124) 14 (110) 8
Amortisation – goodwill and intangible assets (1 016) 108 (908) (1 064)
Operating profit 502 (24) 478 427 12% 18%
Operating margin 5.3% 5.6% 4.5%
Operating margin BEIA 17.3% 17.4% 15.6%
Turnover and underlying sales growth 2003
(at constant 2002 rates) vs 2002
Underlying sales growth (%) 1.6
Effect of acquisitions (%) 1.6
Effect of disposals (%) (3.3)
Turnover growth (%) (0.2)
Turnover
€ million
2003 8 609
At current exchange rates At current exchange rates
2002 9 503
2001
2003
2002
2001
9 999
1 496
1 483
1 634
Operating profit BEIA
€ million
At current exchange rates
2003
2002
2001
478
427
765
Operating profit
€ million
Turnover fell by 9% at current rates of exchange, with currency
movements contributing a 9% decline. Operating profit grew
by 12% and operating profit BEIA grew by 1%, with currency
movements contributing a 6% and 10% decline respectively.
The underlying performance of the business after eliminating
these exchange translation effects is discussed below at constant
exchange rates.
Unilever’s world leadership of both the savoury and dressings
foods categories was maintained. The rate of growth in savoury
slowed in 2003, partially due to a hot summer in Europe and
weakness in food service markets in the first half of the year.
Brazil had a strong performance where the Cica migration to
Knorr has gone well, substantially improving overall growth.
Elsewhere, innovations responsive to consumer needs sparked
growth. The success of wet soups in France continued, with Knorr
growing and riding the ’ready-to’ and Good For You wave. Lipton
Asian side dish innovations in the US helped regain category
leadership, while the Knorr Cubitos seasonings in Latin America
is a fine example of the creative use of technology to target
low-income consumers.
Knorr frozen is gaining momentum, now having an established
presence in seven markets in Europe and with turnover now
exceeding €100 million.
Dressings had a good year, with strong performances in Europe
and the US. Results reflect good share performance in core
markets and the positive impact of innovations.
Category growth was driven by Hellmann’s, Calvé and Amora.
Hellmann’s benefited in key countries, particularly UK and Ireland,
from a successful launch of snack sauces, strong promotional
activity and favourable weather. Calvé was driven by good
performance in Russia, based on the continued relaunch of
mayonnaise and ketchup.
In North America, results were driven by a strong Hellmann’s
performance in a robust mayonnaise market, helped by additional
promotional investment.