Unilever 2008 Annual Report Download - page 36

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Unilever Annual Report and Accounts 2008 33
Report of the Directors
Performance Review continued
Asia, Africa and Central & Eastern Europe (AACEE)
2008 compared with 2007
€ million € million
2008 2007
Turnover 14 471 13 418
Operating profit 1 701 1 711
Operating margin 11.8% 12.8%
Restructuring, business disposals and impairment
charges included in operating margin 0.1% 0.9%
%
Underlying sales growth at constant rates 14.2
Effect of acquisitions 1.1
Effect of disposals (0.4)
Effect of exchange rates (6.2)
Turnover growth at current rates 7.8
%
Operating profit 2008 vs 2007
Change at current rates (0.6)
Change at constant rates 8.3
Turnover at current rates of exchange rose by 7.8%, after the
impact of acquisitions, disposals and exchange rate changes as
set out in the table above. Operating profit at current rates of
exchange fell by 0.6%, after including an adverse currency
movement of 8.9%. The underlying performance of the business
after eliminating these exchange translation effects and the
impact of acquisitions and disposals is discussed below at
constant exchange rates.
Underlying sales growth of 14.2% in 2008 was broad-based
across countries and categories. Our top five Developing and
Emerging market countries in the region grew by around 20%,
from a combination of increased prices and higher volumes.
Towards the end of the year underlying sales growth remained
strong but volumes were flat with some countries seeing signs of
a slow-down in consumption and a reduction in inventories by
retailers.
Throughout the year we saw continued strong growth in India
and Indonesia, both countries where we have tremendous scale.
In these countries we are benefiting from portfolios which span
higher and lower price tiers and from extensive micro-marketing
tailored to faster growing areas and channels. Our business in
China also grew well throughout the year.
The One Unilever organisation is in place throughout the region
and the move to a single SAP system is progressing to plan.
Supply chain management is being centralised in Singapore.
In April we acquired Inmarko, the leading ice cream company in
Russia, and it has performed strongly with both sales and profits
ahead of plan. We reshaped our portfolio in Côte d’Ivoire with
the completion of the disposal of our palm oil business and the
acquisition of soap brands in the same country.
On an underlying basis the operating margin was 0.2 percentage
points below last year reflecting increased investment in building
capabilities to drive growth and the sharp increases in input costs
partly offset by the benefits of savings programmes.
2007 compared with 2006
€ million € million
2007 2006
Turnover 13 418 12 541
Operating profit 1 711 1 443
Operating margin 12.8% 11.5%
Restructuring, business disposals and impairment
charges included in operating margin 0.9% (0.4)%
%
Underlying sales growth at constant rates 11.0
Effect of acquisitions 0.1
Effect of disposals (0.4)
Effect of exchange rates (3.3)
Turnover growth at current rates 7.0
%
Operating profit 2007 vs 2006
Change at current rates 18.5
Change at constant rates 25.0
Turnover at current rates of exchange rose by 7.0%, after the
impact of acquisitions, disposals and exchange rate changes as set
out in the table above. Operating profit at current rates of
exchange rose by 18.5%, after including an adverse currency
movement of 6.5%. The underlying performance of the business
after eliminating these exchange translation effects and the
impact of acquisitions and disposals is discussed below at
constant exchange rates.
The strong underlying growth of 11.0% for the year reflected
both the vibrancy of these markets and the high priority we place
on building our business in the region. It included a healthy
balance of volume and price, up by over 7% and 3% respectively.
Growth was consistent throughout the year and was broad-based
across categories and countries, including established markets
such as India, Indonesia, the Philippines, South Africa and Turkey,
which all grew in double digits; significant product areas such as
laundry and personal wash; and emerging product areas like ice
cream and deodorants. China grew strongly for the third
consecutive year.