Meeting everyday needs of people everywhere - Unilever

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20 Unilever Annual Report on Form 20-F 1999 Report of the Directors Performance review by region and category – 1999 Latin America Fl. million 1999 1999 1998 Change at current at constant at constant rates rates rates Turnover 9 538 11 546 11 058 4% Operating profit 841 993 1 078 (8)% Operating profit before exceptional items 936 1 097 1 168 (6)% Exceptional items (net) (95) (104) (90) Operating margin 8.8% 8.6% 9.8% Operating margin before exceptional items 9.8% 9.5% 10.6% Our Latin American business proved its resilience in a challenging year, adapting to regional recession and devaluation in Brazil and responding vigorously to competitive activity. Sales rose by 4%, at constant exchange rates; sales declined 14% at current rates. Volumes fell, but much less sharply than private consumption. Home care profits were a ffected by major investments behind our market leading position in laundry. This was mostly offset by excellent results in personal care. Sales in Foods were generally l o w e r, but overall margins and profits incre a s e d , particularly in Mexico. Overall profits declined by 6%. We responded swiftly to the increased laundry competition. We reformulated our leading brands, were first to introduce tablets in Argentina and Chile and took steps to ensure brand availability across all price ranges. We maintained leading positions in all our key markets. Elsewhere in home care, our new Cif floor cleaning range met with great success following its launch in Argentina. In personal care, innovation helped deodorants, hair and oral to another good year. Overall personal care sales were up and we increased our market leadership in several categories. In particular, excellent progress was achieved in Brazil. In Foods, volumes fell in ice cream – though market share improved – and in yellow fats. To counter the recession, we accelerated cost reduction plans, focused resources on leading brands and adapted our portfolio to offer consumers more affordable products, such as a reformulated Ala soap. We advanced plans to rationalise Brazilian ice cream production and distribution and opened a low cost Mexican ice cream factory, replacing three local facilities. Across the region, cross-border sourcing became increasingly important. Joint ventures and acquisitions remained central to developing the business. In the Dominican Republic we acquired Sociedad Industrial Dominicana, an ice cream and home and personal care business with good coverage in several Caribbean countries. In Colombia we embarked on a joint venture with Varela, a leading home care company. Exceptional charges in 1999 relate mainly to restructuring in our regional Foods operations.
21 Unilever Annual Report on Form 20-F 1999 Report of the Directors Performance review by region and category – 1999 Oil and dairy based foods and bakery Fl. million 1999 1999 1998 Change at current at constant at constant rates rates rates Turnover 16 038 16 187 16 952 (5)% Operating profit 1 549 1 561 1 474 6% Operating profit before exceptional items 1 714 1 724 1 628 6% Exceptional items (net) (165) (163) (154) Operating margin 9.7% 9.7% 8.7% Operating margin before exceptional items 10.7% 10.6% 9.6% Oil and dairy based foods Consumers in more than 50 countries use our spreads, oils and cooking fats and we are market leader in margarine and related spreads in most European countries and in North America. 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 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. We will introduce these products in the European Union as soon as regulatory clearance is obtained. 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. Bakery Our bakery products business mainly provides speciality bakery fats, designed for professional bread, cake and pastry-making, and frozen bakery products for bakeries. Our operating profits in bakery improved in 1999, partly due to a programme of cost savings. The future of our European bakery business is under review; it is being restructured to improve performance significantly, or it will be divested by the end of 2000.
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Meeting everyday needs of people everywhere - Unilever

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