Unilever Annual Report & Accounts and Form 20-F 2000

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Unilever Annual Report & Accounts and Form 20-F 2000 Report of the Directors
Operating review by category
Oil and dairy based foods and bakery
Group turnover € million Group operating profit BEIA (a)
2000
1999
1998
7 930
7 278
7 692
2000 2000 1999 1998 Change at constant rates
at current at constant at current at current 2000 over 1999 over
€ million 2000 rates 1999 rates (b) 1999 rates 1998 rates 1999 1998
Group turnover 7 930 7 420 7 278 7 692 2% (5)%
Group operating profit BEIA (a) 1 044 988 783 742 26% 6%
Exceptional items (22) (13) (75) (70)
Amortisation of goodwill and intangibles (64) (55) (5) (3)
Group operating profit 958 920 703 669 31% 6%
Group operating margin 12.1% 12.4% 9.7% 8.7%
Group operating margin BEIA (a) 13.2% 13.3% 10.8% 9.6%
(a) Before exceptional items and amortisation of goodwill and intangibles. (b) See page 7.
2000 results compared with 1999
Oil and dairy based foods In 2000 we continued to be world
category leader in margarine and related spreads and in
branded olive oil.
Margins improved, reflecting lower raw material costs and
the continued benefits from supply chain improvements.
In many countries, we increased our share in margarine and
related cooking products. Against the background of a
declining market our volumes were on par with last year.
Our cholesterol-lowering spreads Flora/Becel pro•activ were
launched with great success in ten European countries,
following clearance from the European Union. By the end
of the year, the spreads were available in sixteen countries
around the world.
In margarines, consumers responded positively to the
addition of micro-nutrients and calcium to some of our
main brands, including Blue Band and Country Crock.
The dairy spread and olive oil categories are growing at an
annual rate of 4%. We are developing these categories as
part of our strategy to stimulate growth. In 2000, new
range extensions increased sales of our Brunch and Creme
Bonjour dairy spreads. In the United States, Brummel &
Brown yoghurt-based spreads achieved double digit growth,
following the launch of creamy fruit variants.
Bertolli – the world’s leading olive oil – grew in all markets
and was launched in five new Northern European countries.
It is being extended actively into spreads, cooking products
and dressings.
€ million
2000
1999
1998
783
742
1 044
Group operating profit € million
2000
1999
1998
703
669
Bakery In October 2000, we sold our European Bakery
Supplies Business. This followed a strategic review of the
business, first announced as part of our Path to Growth
strategy. The review concluded that the interests of the
business, and its employees, would be better served by
joining a group with a core interest in bakery.
1999 results compared with 1998
Oil and dairy based foods In 1999, operating profits from
our oil and dairy based foods and bakery business grew by
6% and margins improved, mainly in Europe. This reflected
lower input costs and the benefits of restructuring and
supply chain efficiencies.
Our yellow fats volumes fell in a declining market. In
Western Europe and North America, we maintained share
by continuing to stimulate consumer demand through
innovative new products. In Central and Eastern Europe
and Latin America volumes were down.
We have strong market positions in brands promoting
cardiovascular health. In 1999, we successfully added
products proven to lower blood cholesterol levels under
the Take Control and the Flora and Becel pro•activ brands.
They were launched in Australia, Switzerland, New Zealand
and the United States, where Take Control became category
market leader in its launch year.
More and more consumers are choosing liquid oils for
cooking. In North America and Northern Europe, olive oil,
in particular, is becoming increasingly popular. Unilever is the
world’s biggest marketer of branded olive oil. In 1999, our
Bertolli and Puget olive oil brands performed well, despite
increased raw material costs.
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