Meeting everyday needs of people everywhere - Unilever

14 Unilever Annual Report on Form 20-F 1999 Report of the Directors
Performance review
The information in the following tables is based on
exchange rates between pounds sterling and US dollars,
and guilders and US dollars, based on the Noon Buying
Rate in New York City for cable transfers in foreign
c u r rencies as certified for customs purposes by the Federal
Reserve Bank of New York (The Noon Buying Rate).
US $ per £1
Calendar period At 31 December Average rate High Low
00005 0111 5111 5111
1995 1.55 1.58 1.64 1.53
1996 1.71 1.57 1.71 1.49
1997 1.64 1.64 1.70 1.58
1998 1.66 1.66 1.72 1.61
1999 1.62 1.62 1.68 1.55
On 28 April 2000 the Noon Buying Rate was US $ 1.56
to £1.
Fl. per US $ 1
Calendar period At 31 December Average rate High Low
00005 0111 5111 5111
1995 1.60 1.60 1.75 1.52
1996 1.73 1.69 1.76 1.61
1997 2.03 1.95 2.12 1.73
1998 1.88 1.97 2.09 1.81
1999 2.19 2.07 2.20 1.87
On 28 April 2000 the Noon Buying Rate was Fl. 2.00 to
US $ 1.
The exchange rates used for translating US dollars into
pounds sterling and guildersin this report for the last five
years were:
US $ per £1 Fl. per US $ 1
Average Year-end Average Year-end
rates rates rates rates
0050 0111 0111 0111
1995 1.58 1.55 1.60 1.60
1996 1.56 1.70 1.68 1.74
1997 1.64 1.65 1.94 2.03
1998 1.66 1.66 1.98 1.88
1999 1.62 1.62 2.07 2.19
The exchange rate on 28 April 2000 for €1 was £0.58,
Fl. 2.20371 and US $ 0 . 9 1 .
1999 results compared with 1998
Unilever Group
Overall turnover increased by 2% to Fl. 90 890 million and
underlying volume growth of 1% was just over half that
achieved in 1998. This reflected the challenging economic
and competitive nature of some of our regional markets.
Operating profit incre a s e d 7% to Fl. 10 082 million.
Operating margins at 11% were at an historic high. There
was good margin progress in almost all regions, notably in
Europe and Asia and Pacific. Profit growth in personal care
was particularly strong.
Net profit was up 3%. This reflected lower interest
income, due to the reduction in net funds following
payment of the special dividend in mid-1999. Earnings per
share taking account of the share consolidation, which
reduced the number of shares, rose 9%.
Exceptionals and restructuring
Included in operating profit in 1999 was an exceptional
charge of Fl. 594 million. This compared with a net
benefit of Fl. 276 million in 1998, which included the
Fl. 858 million profit on the disposal of Plant Breeding
International, in Cambridge, United Kingdom.
The 1999 exceptional charge includes a restructuring
charge of Fl. 512 million (1998: Fl. 585 million). In 1999
these charges were principally in respect of our Foods
and Personal Care operations in North America, and in
Western European Foods and Latin American businesses.
In 1998 the restructuring projects were focused mainly in
Foods in Europe and the businesses in Asia and Pacific.
Details of movements in all restructuring provisions in
1999 and 1998 are shown in current money in note 18
on page 78 and the cash flows in note 26 on page 86.
Under US GAAP, certain of the restructuring charges in
each year would not have been recognised until certain
additional criteria had been met, and would then have
been included as a charge in subsequent years. Details
of the US GAAP adjustments relating to the restructuring
charges are given on page 106.
The benefits arising from the 1998 restructuring plan are
now being seen, although we expect further progress in
the coming year.
The 1997 restructuring plan is substantially implemented
and the expected headcount reductions and levels of
savings are broadly in line with the original plan.
On 22 February 2000 we announced a series of linked
initiatives as part of a programme to accelerate growth
and expand margins. These initiatives consist of focusing
resources on 400 key brands, closing certain
manufacturing sites and reorganising or divesting
underperforming businesses. The programme is estimated
to cost €5 billion in total, the majority of which is
expected to be exceptional restructuring cost. It is likely to
lead to the reduction of around 25 000 jobs over five
years, primarily in Europe and the Americas, and to deliver
annual savings of €1.5 billion by 2004.