Unilever 2007 Annual Report Download - page 27

Unilever Annual Report and Accounts 2007 25
Report of the Directors continued
Financial Review continued
Dividends and market capitalisation
Dividends per share
Per €0.16 Per 31⁄9p
NV ordinary share PLC ordinary share
€€pence pence
2007 2006 2007 2006
Interim 0.25 0.23 17.00 15.62
Final –0.47 –32.04
Proposed final 0.50 –34.11 –
One-off –0.26 –17.66
Final dividends for 2007 are subject to approval at the Annual
General Meetings. If approved, this will bring the total regular
dividend to €0.75 per share for NV and 51.11p for PLC, an
increase of 7% excluding the additional one-off payment of
€751 million made in 2006. In accordance with IFRS, no provision
for the amount of this dividend, estimated as €1 427 million, has
been recognised in the financial statements for the year ended
31 December 2007. The €1.5 billion share buy-back programme
announced in March 2007 was completed by the end of the year.
A further programme of at least €1.5 billion is planned for 2008.
Unilever’s combined market capitalisation at 31 December 2007
was €72.5 billion (2006: €60.5 billion).
Balance sheet
€ million € million
2007 2006
Goodwill and intangible assets 16 755 17 206
Other non-current assets 10 619 10 365
Current assets 9 928 9 501
Current liabilities (13 559) (13 884)
23 743 23 188
Non-current liabilities 10 924 11 516
Shareholders’ equity 12 387 11 230
Minority interest 432 442
23 743 23 188
Goodwill and intangibles at 31 December 2007 were €0.5 billion
lower than in 2006. The movement was because of currency
movements and acquisition and disposal activity. Property, plant
and equipment was at a similar level to last year. The increase in
other non-current assets of €0.2 billion is principally explained by
the capital injection in the international Pepsi/Lipton partnership
which is extended, effective 1 January 2008, and by the improved
funding position of our pension funds. This improvement results
from accelerated funding contributions and increases in asset
values. Inventories and trade receivables show little movement
when compared with the prior year.
Current liabilities decreased by €0.3 billion compared with 2006.
This decrease is because of a €0.3 billion reduction in current
financial liabilities, an increase of €0.2 billion in trade payables
and other current liabilities and a decrease of €0.2 billion in
current tax liabilities.
Non-current liabilities have decreased by €0.6 billion compared
with 2006. The movement is explained by an increase of €1.1
billion in financial liabilities due after more than one year, offset
by a decrease in pensions and post-retirement healthcare liabilities
of €1.7 billion.
The increase in financial liabilities is because of the refinancing
activity during 2007, offset to some extent by the appreciation of
the euro against the US dollar, as a significant portion of our
financial liabilities are US dollar denominated. The currency
distribution of total financial liabilities was as follows: 53% in US
dollars (2006: 69%), and 32% in euros (2006: 24%), the
remainder spread across a number of countries.
The funding position of the Group’s main pension arrangements
has improved since the end of 2006 due largely to accelerated
funding contributions and reduced liabilities from higher discount
rates, net of slightly increased inflation and life expectancy
assumptions. The overall net liability for all arrangements was
€1.1 billion at the end of 2007, a reduction from €3.1 billion at
31 December 2006. Funded schemes show an aggregate surplus
of €1.2 billion, while unfunded arrangements show a liability of
€2.3 billion. During 2007, some previously unfunded
arrangements were partially funded with €0.3 billion reported as
part of contributions paid. The movement of the Group’s pension
funding position has resulted in a release of €0.5 billion of related
deferred tax asset.
Unilever manages interest rate and currency exposures based on
the net debt position. Taking into account the various cross
currency swaps and other derivatives, 61% of Unilever’s net debt
was in US dollars (2006: 81%) and 32% in euros (2006: 25%)
and ((18)% – financial assets) in sterling (2006: (33)%), with the
remainder spread over a large number of other currencies.
Unilever has committed credit facilities in place to support its
commercial paper programmes and for general corporate
purposes. The undrawn committed credit facilities in place at
the end of 2007 were: bilateral committed credit facilities
totalling US $3.6 billion, bilateral notes commitments totalling
US $0.2 billion and bilateral money market commitments totalling
US $1.7 billion. Further details regarding these facilities are given
in note 17 on page 97.
During 2007, a €750 million floating rate bond was issued with a
maturity date of 29 May 2009, a US $500 million extendible
floating rate bond was issued having an initial maturity date of
11 July 2008 and a final maturity date of 11 June 2012 and a
€750 million fixed rate 4.625% Eurobond was issued with a
maturity of five years. During 2007 Unilever repaid amongst
others the 4.25% €1 000 million euro bonds and the 5% US
$650 million bonds.
Total shareholders’ equity has increased by €1.2 billion in the year.
Net profit added €3.9 billion and currency and fair value/actuarial
gains added €0.2 billion. Dividends paid in the year totalled
€2.1 billion and there was an adverse effect of €1.1 billion as a
result of higher treasury stock, explained by the share buy-back
programme of €1.5 billion and the €(0.4) billion effect of the
exercise of share options.
Unilever is satisfied that its financing arrangements are adequate
to meet its working capital needs for the foreseeable future.
Unilever’s contractual obligations at the end of 2007 included
capital expenditure commitments, borrowings, lease commitments
and other commitments. A summary of certain contractual
obligations at 31 December 2007 is provided in the table below.
Further details are set out in the following notes to the accounts:
note 10 on page 88, note 16 on page 94, note 17 on pages 97
to 101 and note 25 on page 112.