Meeting everyday needs of people everywhere - Unilever

27 Unilever Annual Report on Form 20-F 1999 Report of the Directors
Performance review – 1998
impact of these disposals was Fl. 1 460 million, all of
which we received in 1998.
Restructuring under our 1998 plan was much lower than
the Fl. 1 492 million in our 1997 plan, which included the
acceleration of some projects.
We focused our 1997 gross restructuring plan, mainly in
E u rope (Fl. 862 million) and North America (Fl. 533 million).
Our significant projects included continuing rationalisation
of foods operations in Europe, merger of our mass
personal care business in North America and closure of
our Lipton USA culinary factory. We were satisfied with
progress in 1998; both the timescale for implementation
of headcount reduction and the level of savings were
broadly in line with our original plan.
Savings from our 1996 restructuring plan, the total gross
cost of which was Fl. 912 million, were in line with
original expectations. By the end of 1998, the plan was
substantially implemented with significant savings and
headcount reductions already achieved.
Under United States GAAP, a proportion of these costs
w e re not recognised until 1999 and a proportion of the
1997 costs were recognised in 1998 (see pages 106 and
107). In addition, we charged a further Fl. 307 million
of non-exceptional restructuring costs to operating profit
in 1998.
The movements in restructuring provisions are shown in
note 18 on page 78 and the cash flows in note 26 on
page 86.
Acquisitions and disposals
During 1998 we made 20 acquisitions. The most
important were:
Vegetaline – White fat in France
Star – Margarine in Italy
Arua – Margarine in Spain
Moskovsky Margarinovy Zavod – Margarine in Russia
AmeriClean – Professional cleaning in the United States
Huanan Laocai – Soy sauce in China
Carrancedo – Bakery in Mexico
At current exchange rates, Fl. 783 million was invested
in acquisitions, which were expected to add approximately
Fl. 651 million to sales in a full year.
In 1998 we disposed of 24 businesses reflecting ongoing
refocusing of the portfolio and reducing the non-core
activities. This included PBI, the plant breeding business
in the UK; Bushells, a coffee business in Australia;
Puritan, a meat business in Canada; Astra Calve’s seed
oils business in France; the remaining Cutex nail polish
remover businesses in various countries, mainly Latin
America; and Harmony, a hair care brand in the UK.
At current exchange rates, Fl. 1 460 million was received
from disposals, with approximately Fl. 678 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.