Unilever 2010 Annual Report Download - page 30

Unilever Annual Report and Accounts 2010 27
Report of the Directors About Unilever
Personal Care
€ million € million %
Increase/
2010 2009 (Decrease)
Turnover 13,767
Operating profit 2,296
Underlying sales growth at constant rates (%) 6.4
Underlying volume growth (%) 7.9
Effect of price changes (%) (1.4)
11,846
1,834
16.2
25.2
Turnover at current rates of exchange grew by 16.2%. The
relative weakness of the euro in the year meant that the impact
of exchange rates was significant, contributing 8.5% of the
overall turnover growth. Operating profit at current rates of
exchange grew by 25.2%.
Underlying sales growth was 6.4% and volume growth was 7.9%.
Growth was strongest in the deodorants category, driven by the
roll-out of Dove Men+Care, the launch of Rexona Clinical, various
new market launches and continued success with the Axe brand.
Global market share continued to grow despite high levels of
competition. Good progress was also made in skin, particularly in
skin cleansing where Dove Nutrium moisture performed strongly
and several new market launches of Lifebuoy were completed.
The hair category saw improved performance through the year,
with healthy volume growth and improved market share in
several key countries including the USA, China and India.
Innovation and new market launches were again key drivers, with
Dove Damage Therapy successfully rolled out, the Clear brand
extended into Latin America and a series of new launches under
the TiGi brand. The oral category had a year of solid growth,
despite intensified competition in a number of markets. The
White Now range has proved successful across more than 30
markets, and launches of anti-age variants in Western Europe
have also made a contribution.
Underlying price growth was negative 1.4%, with similar levels
seen in each of the Personal Care categories. Operating margin
for the year was up by 120 basis points. This reflected improved
gross margins, at constant currency, particularly in the skin
category and savings in Indirects, partly offset by increased
advertising and promotions spend.
Acquisition activity in 2010 was concentrated in Personal Care,
with the announcement in September of an agreement to
acquire the Alberto Culver hair and skin business, and the
completion in December of the acquisition of the Personal Care
business of Sara Lee.
Home Care
€ million € million %
Increase/
2010 2009 (Decrease)
Turnover 7,726
Operating profit 473
Underlying sales growth at constant rates (%) 3.0
Underlying volume growth (%) 8.2
Effect of price changes (%) (4.8)
6,968
615
10.9
(23.1)
Turnover at current rates of exchange grew by 10.9%. The
relative weakness of the euro in the year meant that the impact
of exchange rates was significant, contributing 8.3% of the
overall turnover growth. Operating profit at current rates of
exchange fell by 23.1%. A significant element of this fall was
aprovision taken in relation to a European Commission
investigation into potential competition law infringements.
Underlying sales growth was 3.0%, with volume growth
significantly higher at 8.2%. This strong growth came in the
context of increasingly competitive markets, particularly in fabric
cleaning, with high levels of price-based activity in both emerging
markets such as India or Brazil and developed markets such as the
UK.
Volume growth was particularly strong in India, where the Rin
and Wheel detergents brands were successfully re-launched, and
in China, where the launch of Omo liquids helped to further close
the share gap to the market leader. Liquids were also introduced
into a number of other markets during the year, including Turkey
and Vietnam, and the roll-out of the Surf brand continued into
several new markets. Although our laundry business is strongest
in emerging markets, performance was also encouraging in a
number of Western European markets, with good volume
growth and share gains in the UK, France and the Netherlands.
Household cleaning continued to perform well, with high single
digit volume growth and share gains in a number of key markets.
New market launches played a major role, with Cif rolled out to
various countries particularly in South East Asia and Domestos
launched into Italy and the Philippines. Good progress was also
made in dishwash with the launch of Sun Turbo All-in-1
concentrated gel in Europe.
Underlying price growth was negative 4.8%, with high levels
ofprice competition in laundry for much of the year. Operating
margin for the year fell by 270 basis points. This reflected the
provision noted above, but also the impact of the highly
competitive environment in Home Care, with lower gross
margins, at constant currency, due to pricing and higher levels of
advertising and promotions spend.