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36 Unilever Annual Report & Accounts and Form 20-F 2003
Operating review by category – Foods
Health & wellness and beverages
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 3 910 (461) 3 449 4 064 (15)% (4)%
Group operating profit 413 (46) 367 347 6% 19%
Turnover 4 052 (483) 3 569 4 215 (15)% (4)%
Operating profit BEIA 603 (76) 527 602 (12)% 0%
Exceptional items (11) –(11) (99)
Amortisation – goodwill and intangible assets (137) 24 (113) (120)
Operating profit 455 (52) 403 383 5% 19%
Operating margin 11.2% 11.3% 9.0%
Operating margin BEIA 14.9% 14.8% 14.3%
Turnover and underlying sales growth 2003
(at constant 2002 rates) vs 2002
Underlying sales growth (%) (1.7)
Effect of acquisitions (%) 0.4
Effect of disposals (%) (2.5)
Turnover growth (%) (3.9)
Turnover
€ million
2003 3 569
At current exchange rates At current exchange rates
2002 4 215
2001
2003
2002
2001
4 299
527
602
559
Operating profit BEIA
€ million
At current exchange rates
2003
2002
2001
403
383
296
Operating profit
€ million
Turnover fell by 15% at current rates of exchange, with currency
movements contributing an 11% decline. Operating profit grew
by 5% and operating profit BEIA fell by 12%, with currency
movements contributing a 14% and 12% decline respectively.
The underlying performance of the business after eliminating
these exchange translation effects is discussed below at constant
exchange rates.
Health & wellness
In 2003, we encountered many challenges with the Slim•Fast
brand while other parts of the health & wellness category
performed well.
Turnover of Slim•Fast declined by 21% as the entire weight-loss
category was hit by an unprecedented shift in consumer
preferences towards low-carbohydrate products. The impact was
especially pronounced in the US, the largest market for Slim•Fast.
Slim•Fast has responded by focusing on the Slim•Fast Plan as a
proven and effective weight-loss programme with an expanded
range of products, including pasta and soups. Low-carbohydrate
and high-protein products were also launched at the end
of 2003.
AdeS, our healthy, nutritious drink had another very strong year
in Latin America.
Beverages
Lipton had an excellent year with underlying sales growth of 8%.
Lipton has continued to build on its natural vitality positioning
and provides healthy, refreshing beverages, including a wide
range of leaf tea offerings and ready-to-drink Lipton Ice Tea.
Growth was particularly strong in Europe where hot summer
weather provided ideal market conditions for Lipton Ice Tea.
Lipton Brewed Ice Tea was a very successful new innovation
launched by UBF Foodsolutions in the US as we continue to build
Lipton in the out-of-home segment. An improved marketing mix
for Lipton Green – in both a cold and hot format – was
successfully launched in Europe and extends Lipton into an
important segment. We also expanded our successful North
American partnership with Pepsi to include many more countries.
We continue to have strong positions in key traditional tea
markets. In 2003, we had a very successful relaunch of the
Brooke Bond brand in India.