Unilever 2003 Annual Report Download - page 42

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Unilever Annual Report & Accounts and Form 20-F 2003 39
Operating review by category – Foods
Ice cream and frozen foods (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 7 646 (190) 7 456 7 727 (4)% (1)%
Group operating profit 577 (8) 569 386 47% 49%
Turnover 7 646 (190) 7 456 7 727 (4)% (1)%
Operating profit BEIA 849 (16) 833 736 13% 15%
Exceptional items (244) 7 (237) (321)
Amortisation – goodwill and intangible assets (28) 1 (27) (29)
Operating profit 577 (8) 569 386 47% 49%
Operating margin 7.5% 7.6% 5.0%
Operating margin BEIA 11.1% 11.2% 9.5%
Turnover and underlying sales growth 2002
(at constant 2001 rates) vs 2001
Underlying sales growth (%) 2.9
Effect of acquisitions (%) –
Effect of disposals (%) (3.8)
Turnover growth (%) (1.0)
Turnover fell by 4% at current rates of exchange, with currency
movements contributing a 3% decline. Operating profit grew
by 47% and operating profit BEIA grew by 13%, with currency
movements contributing a reduction of 2% in both cases. The
underlying performance of the business after eliminating these
exchange translation effects is discussed below at constant
exchange rates.
Underlying sales growth for the year was 3%, but after the
impact of disposals, turnover fell 1%. Operating margin BEIA
improved from 9.5% to 11.1% after restructuring gains and
higher brand investment.
Ice cream
In 2002, innovations under the Heart brand, including Cornetto
Soft, Magnum 7 Sins, and others under Paddle Pop and Carte
d’Or, delivered strong growth as they gave a new twist to a
traditional favourite. North American ice cream brands Breyers
and Ben & Jerry’s also delivered good results.
In 2002 we took brands like Cornetto out of the static freezer
box and into the growing soft-serve out-of-home sector, and
continued 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 during the year.
We made good progress in Latin America and North America and,
in the context of a poor summer, performed well in Europe.
Frozen foods
Convenience combined with fresh-tasting, high quality ingredients
drove the success of our Iglo, Birds Eye and Findus frozen ready
meal solutions, which grew by 11%. Our overall frozen foods
turnover fell by 8% in 2002, 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.
In 2002, underlying sales growth in ready meals was offset by the
implications of the end of the BSE crisis, which in 2001 drove
stronger demand for fish, especially in the UK.