Meeting everyday needs of people everywhere - Unilever

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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.
15 Unilever Annual Report on Form 20-F 1999 Report of the Directors Performance review – 1999 Recent acquisition and disposals During the year we made 27 small acquisitions. The most important were: Varela SA – Home & Personal Care in Colombia Mountain Cream – Ice cream in China and Hong Kong Beijing Tea Processing Factory – Tea in China Sociedad Industrial Dominicana – Home & Personal Care and ice cream in the Dominican Republic Miro Aebe – Tomato products in Greece Rossell – Tea plantation in India Selecta Dairy Products Inc.– Ice cream in Philippines Slotts & Kockens – Culinary brands in Sweden At current exchange rates, Fl. 1 101 million was invested in acquisitions, which are expected to add approximately Fl. 529 million to sales in a full year. In addition to the above the following acquisitions are expected to be completed in May 2000. – agreement was reached in 1999 to acquire two leading French culinary brands, Amora and Maille, for Fl. 1 540 million. – in April 2000 Unilever agreed to buy Slim•Fast Foods Company, a leading US-based food business, best known for its nutritionally-balanced products, for Fl. 5.3 billion (US $ 2.3 billion) cash. – in April 2000 the Board of Directors of Ben & Jerry’s Homemade Inc. approved Unilever’s offer of Fl. 750 million (US $ 326 million) for all of the outstanding shares of the company on a fully diluted basis. In 1999, we disposed of 23 businesses, including Homann, a salad and dressing business in Germany, a beverage business in Dubai and various other small businesses. At current exchange rates, Fl. 294 million was received from these disposals, with a reduction of approximately Fl. 766 million of sales in a full year. Performance review by region and category The segmental analysis which follows is based on operating results before exceptional items, at constant exchange rates, and includes the results of the speciality chemicals businesses up to 8 July 1997 but does not take account of US GAAP adjustments. Turkey, formerly reported under Africa and Middle East region, is reported within Europe from 1 January 1998. Figures for previous years have been restated on the same basis.
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Meeting everyday needs of people everywhere - Unilever

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