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38 Unilever Annual Report and Accounts 2004
2004 results compared with 2003 € million € million € million € million % %
Exchange Change at Change at
2004 at rate 2004 at 2003 at actual constant
2003 rates effects 2004 rates 2003 rates current rates 2003 rates
Group turnover 11 255 (627) 10 628 11 143 (5)% 1%
Group operating profit 1 657 (102) 1 555 1 858 (16)% (11)%
Turnover 11 262 (626) 10 636 11 153 (5)% 1%
Operating profit BEIA 1 978 (115) 1 863 1 964 (5)% 1%
Exceptional items (306) 12 (294) (94)
Amortisation – goodwill and intangible assets (12) – (12) (12)
Operating profit 1 660 (103) 1 557 1 858 (16)% (11)%
Operating margin 14.7% 14.6% 16.7%
Operating margin BEIA 17.6% 17.5% 17.6%
Turnover and underlying sales growth 2004
(at constant 2003 rates) vs 2003
Underlying sales growth (%) 2.1
Effect of acquisitions (%) 0.5
Effect of disposals (%) (1.5)
Turnover growth (%) 1.0
Turnover
€ million
2004 10 636
At current exchange rates At current exchange rates
2003
2002
2004
2003
2002
1 863
Operating profit BEIA
€ million
At current exchange rates
2004
2003
2002
1 557
11 153
12 245
1 964
2 210
1 858
2 048
Operating profit
€ million
Turnover fell by 5% at current rates of exchange, with currency
movements contributing a 6% decline. Operating profit fell
by 16% and operating profit BEIA declined by 5%, with currency
movements contributing a 5% and 6% decline respectively. The
underlying performance of the business after eliminating these
exchange translation effects is discussed below at constant
exchange rates.
In 2004, our personal care business had underlying sales growth
of 2.1%. Market share improved in Europe and Africa, Middle
East and Turkey; in a number of other regions, market share had
started to recover by the end of the year following declines earlier
in the year. Operating margin BEIA was broadly flat at 17.6%.
Deodorants saw another year of double-digit growth, with
increased market share in most regions, and we are now the
leader in 15 of the top 20 markets in the world. Axe had another
excellent year, based on its notable success in North America
where the brand now has close to 13% market share two years
after launch. Elsewhere, growth came from the new fragrance
Touch, higher consumption in Latin America through all-over-
body usage, and the deployment of award-winning advertising.
Rexona continues to build market share as the world’s largest
deodorant brand – it was relaunched in Europe, where it is now
the market leader for women, with new body-responsive
technology, and successful variants such as Rexona Ebony have
been launched in Latin America.
In 2004, Sunsilk continued its double digit growth and was
rolled out in Europe. Variant innovations as solutions to daily
hair problems were the foundation of the brand’s success,
communicated globally through the ‘Hair Dramas’ campaign.
However, overall growth in the hair category was held back by a
fierce competitive response to our previous market share gains in
Japan. This has been addressed through the relaunch of Lux and
mod’s shampoos, which restored growth towards the end of the
year. In India, volumes were well ahead, but at significantly lower
prices, whilst in North America portfolio issues have restricted
growth.
A disappointing performance in skin cleansing in North America
offset share gains in other territories. In skin care, Dove has been
successful with firming lotion in Europe, and this has been the
vehicle for the ‘Real Beauty’ communication platform. Fair &
Lovely has enjoyed a strong year in India, while Vaseline has been
relaunched in the highly active US market.
In oral care we have strong positions in a number of countries in
Europe and in developing and emerging markets, particularly with
our Signal and Close Up toothpaste brands. In 2004 we continued
to focus investment behind these brands, launching core variants
of Signal under the ‘extended protection’ proposition and
launching a top-performance toothbrush with new bristle
technology.
The prestige fragrance business met our 2004 expectations,
delivering sharply improved profitability and cash flow. The key
launch was Eternity Moment in the third quarter, which quickly
established itself as one of the leading new fragrances in Europe
this year.
Operating review by category – Home and Personal Care
Personal care