Meeting everyday needs of people everywhere - Unilever

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Unilever Group Notes to the consolidated accounts 2 Operating costs 000000§00 Fl. million 111011111050 1999 1998 1997 5110001110 1110 1110 Cost of sales (49 010) (49 167) (52 358) Continuing operations (48 806) (49 167) (49 898) Acquisitions (204) Discontinued operations (2 460) Distribution and selling costs (22 312) (21 752) (22 300) Continuing operations (22 250) (21 752) (21 835) Acquisitions (62) Discontinued operations (465) Administrative expenses (9 492) (8 475) (12 376) Continuing operations (9 445) (8 475) (11 818) Acquisitions (47) Discontinued operations (558) 1110 1110 1110 (80 814) (79 394) (87 034) 1110 1110 1110 Operating costs include: Staff costs 3 (12 842) (13 370) (14 091) Raw materials and packaging Amortisation of goodwill and (38 634) (39 008) (41 519) intangibles Depreciation of tangible (50) (17) — fixed assets (2 479) (2 051) (2 336) Advertising and promotions (11 779) (11 432) (11 545) Research and development *Lease rentals: (2 060) (1 828) (1 734) Plant and machinery (241) (280) (280) Other Remuneration of auditors: (819) (678) (663) Audit fees Payments to PricewaterhouseCoopers (27) (23) (23) for non-audit services (a) (77) (66) (46) (a) 1110 1110 1110 Non-audit services include due diligence work in respect of acquisitions and disposals Fl. 7 million (1998: Fl. 7 million, 1997: Fl. 5 million); tax compliance and advisory services Fl. 30 million (1998: Fl. 10 million, 1997: Fl. 8 million) and other general consultancy Fl. 40 million (1998: Fl. 49 million, 1997: Fl. 30million). Coopers & Lybrand were paid Fl. 19 million in 1997 for services in connection with the sale of the speciality chemicals businesses. This amount was charged against the profit on disposal. *Lease rentals: Minimum lease payments (1 056) (967) (950) Contingent lease payments (25) (8) (9) 1110 1110 1110 (1 081) (975) (959) Less: Sub-lease income 21 17 16 1110 1110 1110 (1 060) (958) (943) 00000000 3 Staff costs and employees 0§0000000 Fl. million 111011111050 1999 1998 1997 5110001110 1110 1110 Staff costs: Remuneration of employees (10 794) (11 251) (11 771) Emoluments of directors as managers (24) (26) (26) Pension costs: Defined benefit schemes: Regular cost (651) (650) (733) Other (245) (245) (285) Amortisation of surpluses/deficits 32 534 626 651 Defined contribution schemes (10) (35) (80) Post-retirement health benefits (129) (154) (111) Social security costs (1 523) (1 635) (1 727) Superannuation of former directors — — (9) 1110 1110 1110 Total staff costs (12 842) (13 370) (14 091) 1110 1110 1110 Details of the remuneration of directors which form part of these accounts are given in the following sections of the Remuneration report: ‘Directors’ pensions’ on pages 50 and 51; ‘Directors’ emoluments’ on page 52; ‘Share options’ on pages 54 to 59 and ‘Advisory Directors’ on page 54. The average number of employees during the year was, in thousands: Europe 79 83 93 North America 22 23 27 Africa and Middle East 52 58 61 Asia and Pacific 72 73 76 Latin America 30 30 30 1110 1110 1110 255 267 287 00000§000 4 Exceptional items 00000§000 Included in operating profit Restructuring (512) (585) (1 492) Other including business disposals (82) 861 (308) 1110 1110 1110 (594) 276 (1 800) 1110 1110 1110 By geographical area: Europe (213) 398 (850) North America (278) 86 (808) Africa and Middle East 32 (3) (10) Asia and Pacific (40) (115) (61) Latin America (95) (90) (71) 1110 1110 1110 (594) 276 (1 800) 1110 1110 1110 By operation: Foods – Oil & dairy based foods and bakery (165) (154) (725) – Ice cream and beverages (111) (168) (248) – Culinary and frozen foods (263) (112) (465) Home care and professional cleaning (76) (135) (183) Personal care (81) (49) (177) Other Operations 102 894 — Speciality Chemicals — — (2) 1110 1110 1110 (594) 276 (1 800) 1110 1110 1110 These amounts are mainly included in administrative expenses. 5110001110111110111110
Unilever Group Notes to the consolidated accounts 4 Exceptional items (continued) 0000000§0 Exceptional items are those items within ordinary activities which, because of their size or nature, are disclosed to give a proper understanding of the underlying result for the period. These include restructuring charges associated with reorganising businesses (comprising impairment of fixed assets, costs of severance, and other costs directly attributable to the restructuring), and profits and losses on disposal of businesses. Provisions for impairment of fixed assets are recognised immediately the decision to reorganise is taken; provisions for other costs are taken when the obligation arises – normally on announcement; consequential costs within restructuring which arise in the ongoing business eg training, relocation and information technology, are recognised as they arise and are not normally treated as exceptional. On 22 February 2000, the Group announced a series of linked initiatives to align the organisation behind plans for accelerating growth and expanding margins. These initiatives are estimated to cost Fl. 11.0 billion over five years, most of which is expected to be exceptional restructuring costs. Provisions for these costs and asset write downs will be made as necessary consultations are completed and plans finalised. 5110001110111110111110 Fl. million 111011111050 1999 1998 1997 5110001110 1110 1110 Non-operating exceptional items Profit on sale of speciality chemicals businesses — — 8 482 Loss on disposal of fixed assets — — (484) 1110 1110 1110 — — 7 998 Of the above profit on sale of the speciality chemicals businesses Fl. 53 million is attributable to minority interests and is reported under this heading in the profit and loss account. 00000000§ 5 Interest 00000000§ Interest payable and similar charges: Bank loans and overdrafts (350) (424) (306) Bonds and other loans (638) (424) (686) Interest receivable and similar income 929 1 187 857 Exchange differences 29 5 (95) 1110 1110 1110 (30) 344 (230) 000000§00 6 Taxation on profit on ordinary activities 000000§00 Parent and group companies (a) (3 005) (3 333) (4 177) Joint ventures (12) (5) (8) 1110 1110 1110 (3 017) (3 338) (4 185) 1110 1110 1110 Of which: Tax on non-operating exceptional items — — (1 613) Tax on profit on sale of discontinued speciality chemicals businesses — — (1 771) Tax on loss on disposal of fixed assets in continuing businesses — — 158 Adjustments to previous years 291 146 17 6 Taxation on profit on ordinary activities (continued) 0000000§0 Fl. million 111011111050 1999 1998 1997 5110001110 1110 1110 (a) United Kingdom Corporation Tax at 30.0% (1998: 31.0%, 1997: 31.5%) (981) (803) (648) less: double tax relief 531 172 182 plus: non-United Kingdom taxes (2 555) (2 702) (3 711) 1110 1110 1110 (3 005) (3 333) (4 177) 1110 1110 1110 Deferred taxation has been included on a full provision basis for: Accelerated depreciation 187 177 298 Other 184 (125) 383 1110 1110 1110 371 52 681 1110 1110 1110 On a SSAP 15 basis the credit/(charge) for deferred taxation would be: 307 (87) 30 Profit on ordinary activities after taxation on a SSAP 15 basis would be: 6 485 6 667 10 580 1110 1110 1110 Europe is Unilever’s domestic tax base. The reconciliation between the computed rate of income tax expense which is generally applicable to Unilever’s European companies and the actual rate of taxation charged, expressed in percentages of the profit of ordinary activities before taxation, excluding both the profit and the tax on the profit on non-operating exceptional items, is as follows: 5110001110111110111110 % 111011111050 1999 1998 1997 5110001110 1110 1110 Computed rate of tax (see below) 32 32 31 Differences due to: Other rates applicable to non-European countries 2 1 2 Incentive tax credits (2) (1) (1) Withholding tax on dividends 2 1 1 Adjustments to previous years (3) (1) — Other 1 1 2 1110 1110 1110 Actual rate of tax 32 33 35 1110 1110 1110 In the above reconciliation, the computed rate of tax is the average of the standard rate of tax applicable in the European countries in which Unilever operates, weighted by the amount of profit on ordinary activities before taxation generated in each of those countries.
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Unilever N.V. 1999 Annual Report on
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1 Unilever Annual Report on Form 20
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Financial highlights • Excellent
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Chairmen’s Statement The principa
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Selected financial data Consolidate
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Selected financial data By geograph
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About Unilever History and structur
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Meeting everyday needs of people everywhere - Unilever

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