Unilever 2004 Annual Report Download - page 30

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Unilever Annual Report and Accounts 2004 27
Operating review by category – Foods
Savoury and dressings (continued)
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)% –%
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 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 went 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
was a fine example of the creative use of technology to target
low-income consumers.
Knorr frozen gained momentum, having an established presence
in seven markets in Europe and with turnover 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 the 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.