Report & accounts 2002 in full - Unilever
Report & accounts 2002 in full - Unilever
Report & accounts 2002 in full - Unilever
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16 Operat<strong>in</strong>g review – highlights<br />
2001 results compared with 2000<br />
Turnover <strong>in</strong>creased by 11% to €53 400 million. This <strong>in</strong>crease<br />
was the result of an acquisition impact of 12%, a disposal<br />
impact of (5)% and underly<strong>in</strong>g growth of 4%.<br />
Operat<strong>in</strong>g profit BEIA <strong>in</strong>creased by 28% to €7 416 million,<br />
and operat<strong>in</strong>g marg<strong>in</strong> BEIA rose to an historic high of<br />
13.9% from 12.0% <strong>in</strong> 2000. The improvement <strong>in</strong> marg<strong>in</strong><br />
primarily reflects the ongo<strong>in</strong>g contribution from Path to<br />
Growth restructur<strong>in</strong>g and procurement sav<strong>in</strong>gs and the<br />
successful <strong>in</strong>tegration of Bestfoods.<br />
Operat<strong>in</strong>g profit <strong>in</strong>creased by 66% to €5 360 million, be<strong>in</strong>g<br />
primarily the net impact of acquisitions and disposals offset<br />
by an <strong>in</strong>crease <strong>in</strong> the amortisation charge.<br />
Exceptional items<br />
Exceptional items for 2001 were €620 million, which<br />
<strong>in</strong>cluded €1 564 million of restructur<strong>in</strong>g <strong>in</strong>vestment and<br />
profits on disposals of €944 million. Of the latter,<br />
€828 million related to the profit on the sale of the<br />
brands to secure regulatory approval for our acquisition<br />
of Bestfoods and €114 million related to profit on the sale<br />
of Unipath. Associated costs <strong>in</strong>cluded <strong>in</strong> operat<strong>in</strong>g profit<br />
were €393 million.<br />
Amortisation of goodwill and <strong>in</strong>tangibles<br />
The amortisation charge <strong>in</strong> 2001 was €1 436 million.<br />
This <strong>in</strong>cluded €1 186 million for Bestfoods.<br />
Acquisitions and disposals<br />
In <strong>2002</strong>, we <strong>in</strong>creased our hold<strong>in</strong>g <strong>in</strong> the Robertson’s<br />
bus<strong>in</strong>ess <strong>in</strong> South Africa and Israel to 59%, and took a<br />
one-third equity share <strong>in</strong> JohnsonDiversey Hold<strong>in</strong>gs Inc.<br />
(see below).<br />
No significant acquisitions were made dur<strong>in</strong>g 2001.<br />
On 18 February 2003, <strong>Unilever</strong> announced an agreement<br />
to acquire the rema<strong>in</strong><strong>in</strong>g unheld shares <strong>in</strong> CPC/Aji Asia, a<br />
jo<strong>in</strong>t venture with activities <strong>in</strong> six countries, from Aj<strong>in</strong>omoto<br />
Co. Inc, Japan. The acquisition will be <strong>in</strong> two parts with<br />
approximately one half of Aj<strong>in</strong>omoto’s hold<strong>in</strong>g be<strong>in</strong>g<br />
transferred on 25 March 2003 and the balance scheduled<br />
for transfer <strong>in</strong> March 2004. <strong>Unilever</strong> will pay US $381 million<br />
(approximately €360 million) for Aj<strong>in</strong>omoto’s equity hold<strong>in</strong>g.<br />
<strong>Unilever</strong> will have <strong>full</strong> management control of the entire<br />
bus<strong>in</strong>ess from 25 March 2003. The deal is subject to<br />
approval by regulatory authorities.<br />
In <strong>2002</strong> we disposed of 35 bus<strong>in</strong>esses for a total<br />
consideration of approximately €1 993 million.<br />
Significant disposals <strong>in</strong> <strong>2002</strong> were as follows:<br />
On 8 January <strong>2002</strong>, we completed the sale of our Unimills<br />
ref<strong>in</strong>ery bus<strong>in</strong>ess at Zwijndrecht, the Netherlands, to Golden<br />
Hope Plantations Berhad of Malaysia, for approximately<br />
€60 million <strong>in</strong> cash. This bus<strong>in</strong>ess had annual sales to third<br />
parties of approximately €130 million <strong>in</strong> 2001.<br />
<strong>Unilever</strong> Annual <strong>Report</strong> & Accounts and Form 20-F <strong>2002</strong><br />
In January and February <strong>2002</strong>, we completed the sale of the<br />
Mafer snacks bus<strong>in</strong>ess to Sabritas and the Clemente Jacques<br />
cul<strong>in</strong>ary bus<strong>in</strong>ess to La Costeña, both <strong>in</strong> Mexico. Together,<br />
these bus<strong>in</strong>esses had sales <strong>in</strong> 2001 of approximately<br />
€40 million.<br />
On 3 May <strong>2002</strong>, we completed the sale of our DiverseyLever<br />
<strong>in</strong>stitutional and <strong>in</strong>dustrial clean<strong>in</strong>g bus<strong>in</strong>ess to Johnson<br />
Professional for some US $0.9 billion (€1.0 billion) <strong>in</strong> cash<br />
and a loan note of US $241 million (€270 million). We also<br />
took a one-third equity share <strong>in</strong> the comb<strong>in</strong>ed bus<strong>in</strong>ess<br />
(JohnsonDiversey), with an option to exit the bus<strong>in</strong>ess from<br />
2007. A valuation of around US $300 million (€330 million)<br />
for this one-third equity share brought the total worth of<br />
the transaction to <strong>Unilever</strong> to approximately US $1.5 billion<br />
(€1.6 billion). Turnover of DiverseyLever for the 12 months<br />
to December 2001, exclud<strong>in</strong>g sales of the consumer brands<br />
which JohnsonDiversey distribute for <strong>Unilever</strong> under a<br />
separate sales agency agreement, was approximately US<br />
$1.5 billion (€1.7 billion).<br />
On 11 June <strong>2002</strong>, we completed the sale of the Nocilla<br />
chocolate spreads bus<strong>in</strong>ess <strong>in</strong> Spa<strong>in</strong> to Nutrexpa. The<br />
bus<strong>in</strong>ess had sales <strong>in</strong> 2001 of approximately €36 million.<br />
On 2 July <strong>2002</strong>, the sale of 19 food brands to ACH Food<br />
Companies, Inc., a subsidiary of Associated British Foods plc,<br />
was completed for a total of approximately US $360 million<br />
(€383 million) <strong>in</strong> cash. These brands and related assets,<br />
acquired by <strong>Unilever</strong> <strong>in</strong> connection with the October 2000<br />
acquisition of Bestfoods, had comb<strong>in</strong>ed sales of<br />
US $310 million (€350 million) <strong>in</strong> 2001.<br />
On 16 July <strong>2002</strong>, we completed the sale of Atk<strong>in</strong>sons,<br />
a fragrance bus<strong>in</strong>ess based <strong>in</strong> Italy, to Wella AG for<br />
€44 million. The bus<strong>in</strong>ess had sales <strong>in</strong> 2001 of<br />
approximately €35 million.<br />
On 30 November <strong>2002</strong>, we completed the sale of Loders<br />
Croklaan Group, an <strong>in</strong>ternational speciality oils and fats<br />
bus<strong>in</strong>ess, to IOI Corporation Berhad of Malaysia for<br />
€217 million <strong>in</strong> cash. This bus<strong>in</strong>ess had sales of<br />
€267 million <strong>in</strong> 2001.<br />
On 31 December <strong>2002</strong>, we completed the sale of our Iberia<br />
Foods bus<strong>in</strong>ess to an affiliate of the Brooklyn Bottl<strong>in</strong>g Group<br />
of Brooklyn, New York. In <strong>2002</strong> the bus<strong>in</strong>ess had sales of<br />
approximately US $43 million (€48 million).<br />
On 2 December <strong>2002</strong>, we announced an agreement to sell<br />
our hold<strong>in</strong>gs <strong>in</strong> Unipamol Malaysia Sdn. Bhd. and Pamol<br />
Plantations Sdn. Bhd. to Palmco of Malaysia, a subsidiary<br />
of IOI Corporation. The sale was completed on 17 January<br />
2003, for a cash consideration of €138 million. In <strong>2002</strong><br />
these bus<strong>in</strong>esses had comb<strong>in</strong>ed sales of approximately<br />
€51 million.<br />
In 2001 we disposed of 34 bus<strong>in</strong>esses for a total<br />
consideration of approximately €3 621 million. Disposals<br />
<strong>in</strong>cluded Unipath; the Elizabeth Arden bus<strong>in</strong>ess; the