Report & accounts 2002 in full - Unilever
Report & accounts 2002 in full - Unilever
Report & accounts 2002 in full - Unilever
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We are determ<strong>in</strong>ed to rema<strong>in</strong> the world’s number one ice<br />
cream company. We have transformed the cost structure of<br />
the bus<strong>in</strong>ess and focused on profitable countries and are<br />
now able to concentrate on <strong>in</strong>novation and growth. For<br />
example, we took brands like Cornetto out of the static<br />
freezer box and <strong>in</strong>to the grow<strong>in</strong>g soft-serve out-of-home<br />
sector, while cont<strong>in</strong>u<strong>in</strong>g to target the <strong>in</strong>-home sector with<br />
<strong>in</strong>novations such as m<strong>in</strong>i multi-packs and Cornetto snacksize<br />
ice cream, both of which made good progress.<br />
We cont<strong>in</strong>ued to widen the appeal of our ice creams to<br />
consumers who want fun, novelty and freshness. For<br />
example, we targeted consumers’ desire for <strong>in</strong>dulgence<br />
(Magnum), refreshment (Solero) and kids fun (Paddle Pop).<br />
We made good progress <strong>in</strong> Lat<strong>in</strong> America and North<br />
America and, <strong>in</strong> the context of a poor summer, performed<br />
well <strong>in</strong> Europe.<br />
In October <strong>2002</strong>, the European Court of First Instance heard<br />
our appeal aga<strong>in</strong>st the European Commission’s negative<br />
decision <strong>in</strong> the matter of cab<strong>in</strong>et exclusivity <strong>in</strong> Ireland. That<br />
decision rema<strong>in</strong>s suspended, while we await the rul<strong>in</strong>g of<br />
the Court.<br />
Frozen foods<br />
Convenience comb<strong>in</strong>ed with fresh-tast<strong>in</strong>g, high quality<br />
<strong>in</strong>gredients drove the success of our Iglo, Bird’s Eye and<br />
F<strong>in</strong>dus frozen ready meal solutions, which grew by 11%.<br />
Our overall frozen foods turnover fell by 8%, primarily<br />
due to disposals. A strong fourth quarter driven by quality<br />
<strong>in</strong>novations and brand support resulted <strong>in</strong> an underly<strong>in</strong>g<br />
sales growth of 1% for the year.<br />
Sales growth <strong>in</strong> ready meals was offset by the implications<br />
of the end of the BSE crisis, which last year drove stronger<br />
demand for fish, especially <strong>in</strong> the UK. Our frozen foods<br />
capability is a valuable asset across the portfolio, which<br />
we are now start<strong>in</strong>g to test with other brands.<br />
<strong>Unilever</strong> Annual <strong>Report</strong> & Accounts and Form 20-F <strong>2002</strong><br />
Operat<strong>in</strong>g review by category – Foods 29<br />
2001 results compared with 2000 at<br />
current exchange rates<br />
€ million € million %<br />
2001 2000 Change<br />
Turnover 7 727 7 869 (2)%<br />
Operat<strong>in</strong>g profit 446 227 97%<br />
Group turnover 7 727 7 848 (2)%<br />
Group operat<strong>in</strong>g profit 446 225 98%<br />
2001 results compared with 2000 at<br />
constant 2000 exchange rates<br />
€ million € million %<br />
2001 2000 Change<br />
Turnover 7 748 7 866 (2)%<br />
Operat<strong>in</strong>g profit BEIA 800 637 26%<br />
Exceptional items (331) (394)<br />
Amortisation of goodwill<br />
and <strong>in</strong>tangibles (29) (17)<br />
Operat<strong>in</strong>g profit 440 226 95%<br />
Operat<strong>in</strong>g marg<strong>in</strong> 5.7% 2.9%<br />
Operat<strong>in</strong>g marg<strong>in</strong> BEIA 10.3% 8.1%<br />
Ice cream<br />
Our major ice cream brands performed well dur<strong>in</strong>g 2001 and<br />
underly<strong>in</strong>g sales grew by almost 3%. Progress was driven by<br />
<strong>in</strong>novations, such as Magnum snack-sizes, Cornetto m<strong>in</strong>iature<br />
and multi-packs and Cornetto-branded soft ice cream.<br />
A positive overall picture was affected by decl<strong>in</strong><strong>in</strong>g wrapped<br />
impulse sales <strong>in</strong> Germany and the UK. In North America our<br />
Canadian and US bus<strong>in</strong>esses delivered excellent underly<strong>in</strong>g<br />
sales growth and much improved profits. The strength of our<br />
portfolio was demonstrated by the success of Ben & Jerry’s <strong>in</strong><br />
the US super-premium market dur<strong>in</strong>g its first <strong>full</strong> year as a<br />
<strong>Unilever</strong> bus<strong>in</strong>ess.<br />
In l<strong>in</strong>e with our commitment to a world-class supply cha<strong>in</strong>,<br />
we closed eight factories that were of limited long-term value<br />
and <strong>in</strong>troduced more efficient ways of buy<strong>in</strong>g raw materials<br />
and packag<strong>in</strong>g. We also elim<strong>in</strong>ated certa<strong>in</strong> poorly perform<strong>in</strong>g<br />
products and withdrew from n<strong>in</strong>e countries where our ice<br />
cream bus<strong>in</strong>ess was unprofitable, <strong>in</strong>clud<strong>in</strong>g Colombia, Russia<br />
and Saudi Arabia.<br />
<strong>Report</strong> of the Directors