meeting everyday needs of people everywhere Annual ... - Unilever

Further increase in operating
profit margins
Underlying volume growth 2%
Total return to shareholders
in top third of peer group
Morris Tabaksblat and Niall FitzGerald
Chairmen of Unilever
Our view on 1998 and the way ahead
We are pleased with Unilever’s performance in 1998. Net profits
increased by 16% at constant rates of exchange and before all
exceptional items. Net profit margin on the same basis exceeded 7%
of turnover, an all-time high. Operating margins expanded again and
return on capital improved. However, underlying growth in volume in
1998 was little more than half the rate achieved in 1997. Growth was
held back by disruption in emerging markets and by the poor summer
in Northern Europe which affected sales of ice cream. There were wide
fluctuations in the value of a number of currencies. As a consequence,
net profit improvement before all exceptional items was lower when
expressed at current exchange rates, namely 9% in £ sterling, 10% in
US dollars and 13% in Dutch guilders.
The global reach and regional balance of the Company was a significant
factor in our performance in 1998. Almost two thirds of our business is
in Western Europe and North America; this helped to maintain
momentum when developing and emerging markets faltered. We
increased market shares in most corporate categories and profits grew
faster than turnover. Margins improved by 1% of turnover in Europe
and North America with the benefits of restructuring and a more
efficient supply chain. The combination of expert local knowledge and