Unilever Annual Report & Accounts and Form 20-F 2000

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20 Unilever Annual Report & Accounts and Form 20-F 2000 Operating review by category Home & Personal Care In Home & Personal Care, it was a year of growth across most categories and regions, with particular advances in personal care. Our success was a direct result of concentrating our resources behind fewer, stronger brands with international Home care and professional cleaning Group turnover € million Group operating profit BEIA (a) 2000 1999 1998 10 258 9 106 8 813 2000 results compared with 1999 Home care We are one of the main players in the domestic home care market which includes products for fabric and surface cleaning and domestic hygiene. Many of our brands hold market leading positions including Omo, Surf, Skip, all, Comfort/Snuggle, Wisk, Cif and Domestos. Excluding acquisitions, overall sales rose by 2% across our home care business. We performed particularly well in Asia and Pacific. Our home care operating margin was slightly down, notably in North America and Latin America. However, this decline was partly offset by improvements in margin in Asia and Pacific. In South Latin America, we were particularly pleased by the development of our laundry market share, in the face of intense competition. The investment in defending our market share was the main factor in the decline in operating margin in the region. The principal engine for growth continued to be our ability to innovate successfully and to extend that innovation throughout the world. In laundry, we have maintained our clear leadership in tablets. These are now available in more than 30 countries, having been launched most recently in South Africa and Latin America. The close of the year saw the beginning of the roll-out in the important North American market under the Wisk brand. In Europe the second generation formulation has further expanded the market. € million Report of the Directors Group operating profit € million 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 10 258 9 439 9 106 8 813 4% 6% Group operating profit BEIA (a) 917 856 858 902 -% (4)% 2000 1999 1998 917 858 902 Exceptional items (323) (297) (34) (61) Amortisation of goodwill and intangibles (16) (15) (5) (2) Group operating profit 578 544 819 839 (34)% (1)% Group operating margin 5.6% 5.8% 9.0% 9.5% Group operating margin BEIA (a) 8.9% 9.1% 9.4% 10.2% (a) Before exceptional items and amortisation of goodwill and intangibles. (b) See page 7. reach and consumer appeal. We rolled out new innovations tailored to consumer needs, with further impetus coming from the economic recovery in South East Asia and Latin America. The major portfolio change was the sale of much of our Elizabeth Arden business and the reconfiguration of our Prestige brands, scheduled for completion in early 2001. 2000 1999 1998 2000 also saw the successful roll-out of our Easy Iron fabric conditioner variant. Based on a patented silicone formulation, this product is now available throughout Europe. Other successes included rapid growth in India with Vim dishwash bar, which has a formulation relevant to markets throughout Asia and Africa and the roll-out of Domestos wipes in Europe. There was good consumer reception for the novel Refresh/Keep Fresh range of fabric and clothing fresheners and Cif Oxy-Gel general purpose cleaner, which was rolled out successfully throughout Europe. Professional cleaning DiverseyLever is a provider of cleaning and hygiene products and services. These are sold to institutional customers such as hotels, hospitals, laundries and to the food and beverage industry. During 2000 we maintained our leadership in Europe and made progress in improving our performance in North America. We entered into a strategic global partnership agreement with ISS, the world’s foremost facility services provider. We also concluded a series of long term supply and service contracts with major international customers. Implementation of a comprehensive plan for simplifying the product line, organisation and supply chain across Europe is under way. 578 819 839
Unilever Annual Report & Accounts and Form 20-F 2000 Report of the Directors Operating review by category Operations in North America have now been consolidated under a common management whose priority is to facilitate the integration of recent acquisitions. 1999 results compared with 1998 Home care Overall volumes climbed by 3% across our home care businesses. We enjoyed particular growth in Africa and Middle East and Asia and Pacific, with good progress in Western Europe and North America. Although we achieved improved results and margins in Western Europe and Asia and Pacific, operating profits declined globally by 4%. This reflected major investments behind our market leading positions in Latin America. In Europe, laundry volumes grew by almost 4% and supply chain savings boosted margins. A second generation, double-layer tablet formulation built on last year’s pioneering launch helped maintain our sector market leadership. The introduction of Surf powder in the Philippines met with great success while in Brazil Brilhiante powder became the number two brand by combining the superior cleaning properties of bleach with kindness to clothes. The popularity of liquid all helped us to a 4% rise in laundry volumes in North America. Personal care Group turnover € million Group operating profit BEIA (a) 2000 1999 1998 12 567 10 675 9 970 Some innovations, like our new Easy Iron fabric conditioner, created whole new segments in the market. Easy Iron, which will be rolled out throughout Western Europe under the Comfort and Snuggle brands, captured a 10% share of the United Kingdom market within six months. In Europe, in household care, we teamed up with a paper supplier to launch Domestos hygienic wipes. Using patented technology we created new products under the Cif brand name: Cif Oxy-Gel, a general purpose cleaner which uses bubbles to shift grime, and the Cif floor cleaning range. Sunlight dishwash bar, another recent launch, flourished in Malaysia. Professional cleaning DiverseyLever had another challenging year. Volumes were 1% ahead, with operating profits broadly in line with 1998. Europe, where the business is strongest, performed better than the previous year. In North America, sales grew but profits were adversely impacted by a reshaping of part of the sales organisation. Latin America and Asia and Pacific achieved higher sales and profits, the latter region benefiting from improved economic conditions. In Europe, we began simplifying the product portfolio and focusing on key customer segments. € million 2000 1999 1998 1 582 1 277 2 034 Group operating profit € million 2000 1999 1998 958 1 542 1 254 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 12 567 11 321 10 675 9 970 6% 7% Group operating profit BEIA (a) 2 034 1 846 1 582 1 277 17% 24% Exceptional items (1 069) (926) (37) (22) Amortisation of goodwill and intangibles (7) (7) (3) (1) Group operating profit 958 913 1 542 1 254 (41)% 23% Group operating margin 7.6% 8.1% 14.4% 12.6% Group operating margin BEIA (a) 16.2% 16.3% 14.8% 12.8% (a) Before exceptional items and amortisation of goodwill and intangibles. (b) See page 7. 2000 results compared with 1999 We are the world leader in products for skin cleansing, deodorants and antiperspirants. We also have important positions in toothpastes, skin care and hair care products in many countries. Our personal care brands include Dove, Sunsilk, Lux, Rexona/Sure, Pond’s, Suave, Axe/Lynx and Vaseline. Our personal care business enjoyed another very good year. Increases in both turnover and operating profit were recorded in all regions as the economic recovery in Asia Pacific and, more recently, Latin America, gathered momentum. Once again, the most significant contributor to growth was Dove. As well as recording a strong performance in its core category of skin care, where it remains the world’s leading cleansing product, the brand is proving to be equally robust when extended into other markets. The launch of Dove deodorant in Europe, Latin America and, more recently, North America has been a major success. In Japan, the Dove portfolio now embraces facial foam, a bar and a body wash 21
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