Unilever 2004 Annual Report Download - page 43

40 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 17 297 17 17 314 18 208 (5)% (5)%
Group operating profit 1 823 4 1 827 2 563 (29)% (29)%
Turnover 17 392 17 17 409 18 297 (5)% (5)%
Operating profit BEIA 2 858 6 2 864 3 032 (6)% (6)%
Exceptional items (525) – (525) 49
Amortisation – goodwill and intangible assets (498) (1) (499) (505)
Operating profit 1 835 5 1 840 2 576 (29)% (29)%
Operating margin 10.6% 10.6% 14.1%
Operating margin BEIA 16.4% 16.4% 16.6%
Turnover and underlying sales growth 2004
(at constant 2003 rates) vs 2003
Underlying sales growth (%) (2.8)
Effect of acquisitions (%) 0.1
Effect of disposals (%) (2.4)
Turnover growth (%) (4.9)
Turnover
€ million
2004 17 409
At current exchange rates At current exchange rates
2003 18 297
19 657
2002
2004
2003
2002
2 864
3 032
2 746
Operating profit BEIA
€ million
At current exchange rates
2004
2003
2002
1 840
2 576
1 620
Operating profit
€ million
Turnover fell by 5% at current rates of exchange, with currency
movements having no effect. Operating profit declined by 29%
and operating profit BEIA fell by 6% with currency movements
having no effect. The underlying performance of the business
after eliminating these exchange translation effects is discussed
below at constant rates of exchange.
Underlying sales declined by 2.8%.
In Western Europe, trading conditions were difficult due to the
continuing growth of hard discounters and the responses of
traditional retailers, looking to compete through value on both
branded and private label products. In addition, ice cream and
ready-to-drink tea suffered from a poorer summer than the
exceptional one in 2003. By contrast, our business in Central and
Eastern Europe grew well, with a particularly strong performance
in Russia.
Our spreads business grew with the successful launch of
Becel/Flora pro•activ milk drinks and yoghurts in a number of
markets and leaf teas performed considerably better than the
weather-affected ready-to-drink ice tea range.
Sales of frozen foods declined. We have been reorganising the
business to focus more on higher growth segments of the
market, including making some disposals. Margins continue to
improve through restructuring. The household care business also
declined in difficult trading conditions.
Personal Care market share improved in Europe, particularly
through Dove firming lotion in Europe, and Rexona. In prestige
fragrances the key launch was Eternity Moment in the third
quarter, which quickly established itself as one of the leading new
fragrances.
Operating margin declined from 14.1% to 10.6%, including a
step-up in exceptional restructuring charges associated with the
One Unilever simplification project. Operating margin BEIA at
16.4% was slightly below the prior year. The benefit of our
savings programmes and the net effect of business disposals,
including olive oil in France and parts of our frozen foods
businesses in the UK and Germany, was more than offset by
increased advertising and promotions.
Operating review by region
Europe