Unilever Annual Report & Accounts and Form 20-F 2000

18
Unilever Annual Report & Accounts and Form 20-F 2000 Report of the Directors
Operating review by category
In North America, impulse volumes rose but our packaged ice
cream sales and profits fell due to increased price competition.
We virtually completed the worldwide roll-out of our heart
logo. This provides international recognition of our brands
and enables us further to concentrate production and move
products between different markets.
In 1999, new variants of our leading brands – such as the
Magnum Double – demonstrated innovation in action.
We extended our ranges of multi-packs of impulse products
for in-home consumption and strengthened our position in
the growing scooping sector. We also reached out to lower
income consumers with more affordable products, notably
in China and South Africa.
In the United Kingdom, the Competition Commission’s
report into the ice cream industry recommended limitations
Culinary and frozen foods
Group turnover € million Group operating profit BEIA (a)
2000
1999
1998
8 367
6 424
6 605
on both our freezer cabinet and distribution arrangements.
We are confident the strength of our brands will sustain
our business.
Beverages Operating profits were up 7%. Volume was on
a par with 1998, reflecting the temporary impact of excise
duties on packaged tea in India. We enjoyed good growth
in Western Europe, Africa and Middle East and saw a strong
global volume increase of 14% in ready-to-drink tea.
We brought a range of innovations to our product and sales
channels. In Europe, we developed our portfolio with the
launch of a new harmonised range of fruit flavoured teas,
Lipton Sun Tea and the further roll-out of Tchaé green tea
and pyramid tea bags. In the United Kingdom, Brooke Bond
pyramid bags were established as the top brand. In North
America, we successfully test-marketed our patent-protected
cold infusion tea bags.
€ million
2000
1999
1998
663
665
1 058
Group operating profit € million
2000
1999
1998
410
542
613
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 8 367 7 832 6 424 6 605 22% (2)%
Group operating profit BEIA (a) 1 058 986 663 665 49% (2)%
Exceptional items (322) (314) (120) (51)
Amortisation of goodwill and intangibles (326) (291) (1) (1)
Group operating profit 410 381 542 613 (30)% (13)%
Group operating margin 4.9% 4.9% 8.4% 9.3%
Group operating margin BEIA (a) 12.6% 12.6% 10.3% 10.1%
(a) Before exceptional items and amortisation of goodwill and intangibles. (b) See page 7.
2000 results compared with 1999
Culinary Culinary volumes rose significantly – reflecting
our acquisition of Bestfoods and Amora Maille. Excluding
acquisitions, sales rose by 4%. There were improvements
in all regions except Latin America, where sales of tomatobased
products fell. Growth was particularly strong in Asia
and Pacific where sales rose by 10%. In both Western
Europe and North America sales grew by 4%.
We continued to apply innovations to our product
formulations, for example, capitalising on Sizzle & Stir’s
great success in the UK with a spicy variant Stir it Up. In
Australia, we successfully launched Continental ethnic
noodle sauces.
In Europe, our market leading position in mayonnaise and
mustard was extended by the acquisition of Amora Maille,
the major player in these categories in France. In North
America, Just 2 Good salad dressings were launched with
great success and sales of Lawry’s marinades continued
growing well. In cooking ingredients, innovations included
a range of Kissan spice blends in India.
Frozen foods Our frozen foods portfolio is now focused on a
few strong brands. In line with our strategy, we made good
progress in cutting less profitable lines. This portfolio
realignment, combined with low cost manufacturing and
new technologies, contributed to increased margins. The
category is expected to show good, sustainable growth
from the end of 2001.