3rd Quarter Results
Unilever PLC
30 October 2002
Embargoed: Not for publication or broadcast before 0700hrs, Wednesday 30th
October
UNILEVER RESULTS
THIRD QUARTER 2002 AND INTERIM DIVIDENDS
(Unaudited)
A good performance with accelerating growth of the leading brands, a continued
advance in profitability and strong cash flow enables us to exceed our earnings
outlook for the full year.
FINANCIAL HIGHLIGHTS
Constant exchange rates (2001 average)
Third Quarter 2002 € Millions Nine Months 2002
13,106 -1 % Turnover * 38,748 -1 %
2,121 +2 % Operating profit * - beia ** 5,944 +10 %
1,343 +33 % Pre-tax profit 3,669 +19 %
803 +68 % Net profit 1,924 +20 %
1,204 +17 % Net profit - beia ** 3,208 +26 %
Per NV share (€0.51), Euro
0.81 +70 % Earnings per share (EPS) 1.93 +21 %
1.22 +18 % EPS (beia) ** 3.24 +27 %
Per PLC share (1.4p), Euro cent
12.16 +70 % EPS 28.93 +21 %
18.33 +18 % EPS (beia) ** 48.61 +27 %
* Includes our share of Joint Ventures
** before exceptional items and amortisation of goodwill and intangibles
When expressed in current rates of exchange, earnings per share (beia) were up
11% for the quarter and 21% for the year to date, while earnings per share rose
by 60% in the quarter and by 16% for the year to date.
KEY FEATURES FOR THE QUARTER
• Sales growth of the leading brands was 4.5% for the last twelve months
with 5.4% in the quarter.
• Operating margin (beia) moved ahead to 16.2% in the quarter, up by 50
basis points. This brings the margin for the year to date to 15.3%, an
increase of 160 basis points.
• Strong cash flow from operating activities combined with disposal proceeds
and lower interest rates reduced interest by 24% to €319 million.
• EPS (beia) grew by 18% due to improvements in profitability and lower tax.
• Proposed interim dividend of €0.55 per NV ordinary share and 5.21p per PLC
ordinary share.
CHAIRMEN'S COMMENT
'We continue to deliver against our Path to Growth objectives. Our savings
programmes are providing the fuel for investment behind our leading brands, the
expansion of operating margin and growth in earnings. As we move into the second
half of the Path to Growth the focus on our leading brands with sustained rates
of innovation will drive accelerating top line growth.
The third quarter saw the expected increase in the rate of underlying sales
growth. In Home and Personal Care we have sustained the improvement in leading
brand growth at a level in line with that needed to achieve the Path to Growth
targets. In particular our Personal Care brands continue to perform well and
Homecare margins are developing satisfactorily. In Foods we see the benefits of
the Bestfoods integration and the creation of the firm platform on which to
leverage innovation and marketplace activity. Savoury and Dressings, together
with continued progress in Spreads are spearheading a pick-up in growth. Our
global Ice Cream business has responded well to a difficult European summer with
a strong innovation programme and a resilient margin performance.
With this strong performance we now see the year's EPS (beia) growth being in
the high teens.'
N W A FitzGerald A Burgmans
Chairman, Unilever PLC Chairman, Unilever N.V.
30 October 2002
THIRD QUARTER AND NINE MONTHS FINANCIAL RESULTS (at constant rates of exchange)
Underlying sales grew by 4.5% in the quarter and by 3.2% for the year to date.
Including the impact of planned disposals, notably the sale of Gorton's,
Unipath, DiverseyLever and Mazola, total sales declined by 1% in the quarter.
The year to date sales are further impacted by the sale of brands to secure
regulatory approval for our acquisition of Bestfoods. The disposals particularly
impact European and North American sales.
Operating margin (beia) was 16.2% in the quarter, an increase of 50 basis
points, and was 15.3% for the first nine months of the year, an increase of 160
basis points.
Amortisation of goodwill and intangibles was €348 million in the quarter and
€1,034 million for the year to date.
Net exceptional charges for the quarter were €125 million which includes €215
million of restructuring, with the balance being the net of profits and losses
on disposals and the release of a provision following the dismissal of a court
case. This compares with a net exceptional charge of €304 million in the third
quarter of last year. Associated costs were €41 million in the quarter.
Following the disposal of DiverseyLever on 3 May 2002, our share of the
operating profit of the new Johnson Diversey associate is €12 million in the
quarter.
Net interest payable was €319 million for the quarter, a reduction of €101
million from last year through a combination of lower rates, the benefits of
strong cash flow from operations and disposal proceeds.
The underlying tax rate for normal trading operations was 30%. This is after a
favourable 2% from a prior year adjustment of €37 million (equivalent to 4
Eurocents of EPS beia). The effective tax rate for the quarter was 35% and
reflects the non-deductibility of Bestfoods goodwill amortisation partly offset
by the release of provisions on the resolution of a number of outstanding tax
matters.
Minority interests in the quarter are €14 million higher than last year, due to
lower exceptional charges this year.
Net profit increased by 68% in the quarter and by 20% for the year to date, with
positive developments in operating profit beia, exceptional items, lower
interest and more favourable tax.
Earnings per share (beia) grew by 18% in the quarter and by 27% for the year to
date. Earnings per share increased by 70% in the quarter and by 21% for the year
to date.
THIRD QUARTER PERFORMANCE BY REGION (at constant rates of exchange)
The following commentary is based on operating profit before exceptional items
and amortisation of goodwill and intangibles.
EUROPE: Continuing good underlying sales growth and enhanced margins.
Underlying sales growth was 3% with a continuing strong contribution from
Central and Eastern Europe. Sales were 4% lower than last year through the
impact of disposals.
Central and Eastern Europe grew at 7%, with particular strength in Personal
Care, Dressings, Tea and Household Care and continued good progress in Russia.
Western European Foods sales, other than Ice Cream, grew by 4%. There has been
sustained progress in branded Spreads and Cooking products which grew 5% due to
the continuing impact of innovations, especially in Flora/Becel which grew by
over 10%. In Savoury and Dressings, growth of 5% was fuelled by market place
activity behind Amora, Hellmann's, Bertolli, Knorr, and Pot Noodle. Slim•Fast
also enjoyed good growth as we continued its roll out.
Western European Ice Cream showed great resilience in difficult market
conditions. Continued success of Cornetto Soft helped to offset the impact of
poorer weather than last year and sales declined by just 1%.
In Home and Personal Care in Western Europe, good growth in Hair and Deodorants
included particularly strong performances through innovation and range extension
in Dove, Rexona and Axe. Dove shampoo and conditioner are now available in
nearly all markets with good repeat purchase. In Laundry volume grew by 4%,
which has been only partly offset by pricing in a competitive environment to
give an underlying sales growth of 1%, with market share being maintained.
Operating margin increased by 90 basis points to 18.3% with improvements from
savings programmes partly reinvested in support for the leading brands which was
up by 150 basis points.
NORTH AMERICA: Improving underlying sales growth and a further advance in
profitability.
Underlying sales grew 2%, as market place activity builds through the year.
Sales declined 7% through the impact of planned disposals. The key disposals
impacting the quarter were Unipath, Gorton's, DiverseyLever and Mazola.
In Foods, underlying sales grew 3%. Knorr, Wishbone dressings, Skippy peanut
butter, Lawry's, Slim•Fast and our Ice Cream brands all continued to grow
strongly. In addition to market place activities behind these brands, growth was
further enhanced by innovations which included Ragu Rich and Meaty sauce, Lipton
side dishes with Asian cuisine variants and Lipton Brisk lemonade. Hellmann's
mayonnaise continued to gain share but competitive pricing and promotional
activity impacted overall sales. In Spreads and Cooking products we have held
our share in a market which has declined as consumers switch to butter which is
at historically low prices.
In Home and Personal Care underlying sales grew 1% with good growth in Personal
Care partly offset by declines in Home Care. Dove body wash and Degree deodorant
continued to grow well and Axe deodorant was successfully launched in the
quarter with a promising early response. Innovations behind Calvin Klein further
supported growth. In Laundry, profitability has been greatly improved and while
sales are lower than last year, we now have a better platform to support a
stronger innovation programme and future growth.
Operating margin has progressed by 120 basis points to 16.9%. This is driven by
improvements in Laundry profitability but also widespread benefits from savings
programmes. The operating margin progression is after a 220 basis points
increase in advertising and promotions which built through the quarter.
AFRICA, MIDDLE EAST AND TURKEY: A strong performance with continued good growth.
Underlying sales grew by 8%. Sales grew by 11% including the increase in our
stake in the Robertson's business.
South Africa performed particularly strongly with good sales growth across
Savoury, Spreads and Personal Care. The Sunsilk launch is progressing well
building on experience from Latin America, including variants for black hair. In
Turkey, consumer downtrading and declining markets reflect a difficult economy
and whilst market shares in key categories were at least maintained, underlying
sales declined by 13%.
Elsewhere in the region, activities behind Sunsilk, Dove, Knorr and Lipton all
made a good contribution to growth and strengthened our market position.
Operating margin moved ahead by 100 basis points to 13.0% after an increase of
80 basis points in advertising and promotional support for the leading brands.
ASIA AND PACIFIC: Improving levels of growth after a slower first half of the
year.
Underlying sales grew by 5%. Including the impact of disposals, sales grew by
1%.
In Home and Personal Care the growth was broad based in terms of both category
and geography. Indonesia, Philippines and Vietnam were particularly strong with
innovations in Dove in Hair and Lifebuoy in Skin fuelling growth of well over
10%.
In India sales grew 4% with Fair & Lovely, Pond's and Wheel contributing
strongly. In Japan sales were flat against a strong quarter last year which
included the launch of Dove shampoo.
In Foods, South East Asia continued to grow strongly as the Bestfoods brands
benefit from the Unilever distribution system and through innovation in Knorr, a
further strengthening of the Bango soy sauce and Sariwangi tea brands in
Indonesia and Lady's Choice mayonnaise in the Philippines. This strong
performance was partly offset by declines in Tea in Central Asia as prices are
adjusted to reflect lower commodity prices and a focus on improving
profitability as we exit from low value, low growth commoditised teas.
Operating margins increased by 60 basis points to 14.2% with an additional
investment in advertising and promotions of 260 basis points, building through
the quarter.
LATIN AMERICA: Sales ahead strongly in the quarter despite difficult economic
conditions in key countries.
Underlying sales grew by 14%, with a strong contribution from price. Outside
Argentina, underlying volume growth was 5% and underlying sales grew by 11%.
Including the impact of disposals, sales for the region grew by 8%.
Mexico continues to grow very well. In Personal Care Sedal shampoo has now
reached a share of over 10%, and Axe and Dove continue to perform strongly
through an active innovation programme. Good growth in Savoury follows the
successful launch of Knorr Sazonissimo last year and Knorr Knax noodle cups in
this quarter. Ice Cream grew 10% with the launch of a new Magnum variant and
increased promotional activity.
In Brazil sales moved ahead strongly fuelled by Rexona and Axe deodorants, new
variants of Seda, the launch of Dove shampoo and the continued success of Knorr
'refoga caseira', a simmering base. Hellmann's and the Arisco value brand also
grew well while Ice Cream grew by 15%.
In Argentina consumer demand is considerably down and whilst volumes have been
affected our overall market shares remain strong. Our experienced local
management have continued to manage the business in a way which preserves its
long term health and historic strength.
Market shares are firm in Laundry in South Latin America with sales growth
driven by pricing.
Operating margins were 170 basis points lower than last year at 12.9% with an
increase in advertising and promotions of 190 basis points. We have made good
progress in recovering earlier devaluation led cost increases in Brazil, but
have seen the expected effect of the devaluation in Argentina and further
currency weakness in Brazil impacting margins in this quarter.
INTERIM DIVIDEND
In accordance with our normal practice, the interim dividend has been set at 35%
of last year's total dividend, based on the stronger of the two reporting
currencies of our parent companies, Euro and Sterling, over the first nine
months, which for this period was the Euro. The interim dividend, to be paid on
2 December 2002, is therefore fixed at €0.55 per €0.51* ordinary share of
Unilever N.V. (an increase of 10% from last year). The interim dividend per 1.4p
ordinary share of Unilever PLC is set at 5.21p (an increase of 12% from last
year). The Unilever N.V. shares will go ex-dividend on 31 October 2002, and the
Unilever PLC shares will go ex-dividend on 6 November 2002.
* The euro amounts of share capital shown above are representations in euros on
the basis of article 67c Book 2 Dutch Civil Code of underlying amounts of share
capital in Dutch guilders.
CASH FLOW / BALANCE SHEET
Cash flow from operations for the first nine months of €5.7 billion was €0.5
billion above the corresponding period last year. This was due to underlying
profit growth and lower working capital outflows, partly offset by cash refunds
from pension schemes which were received in 2001.
Returns on investment and servicing of finance reflect lower interest costs on
debt which has been reduced by cash from operations, disposal proceeds and
through lower interest rates.
Capital expenditure and financial investments are marginally higher than the
previous year, with reduced capital expenditure offset by lower proceeds from
asset disposals and increased purchases of own shares to hedge the extension of
share option schemes to more managers.
Net proceeds from disposals includes €1.1 billion cash from the disposal of
DiverseyLever and €0.4 billion from the disposal of Mazola.
Net debt has decreased by €4.4 billion since 31 December, mainly comprising
currency retranslation and other similar non cash gains of €2.0 billion on
dollar denominated liabilities, proceeds from disposals and cash flow from
operations.
Goodwill and intangibles have decreased by €3.5 billion including currency
retranslation of €(2.7) billion and amortisation for the period of €(1.0)
billion, offset by net additions of €0.2 billion.
Capital and reserves have decreased by €0.5 billion. Net profit of €1.9 billion
and goodwill writebacks of €0.4 billion following disposals are offset by a
currency retranslation of €(1.6) billion, interim dividends of €(0.6) billion
and by purchases of own shares of €(0.6) billion to hedge share options granted.
EURO REPORTING
Information in sterling and US dollars is available as a supplement to this Euro
report.
SAFE HARBOUR STATEMENT: This announcement may contain forward-looking
statements (within the meaning of the U.S. Private Securities Litigation
Reform Act 1995). Any forward-looking statements are based on current
expectations with respect to important risk factors. It is important to note
that the actual results could materially differ from the results anticipated
in any forward-looking statements which may be contained in this
announcement. Factors which might cause forward-looking statements to differ
materially from actual results include, among other things, the overall
economic, political, social and business conditions, the demand for our
goods and services, competition in the market, fluctuations in interest
rates and foreign currencies, the impact and other uncertainties of future
acquisitions and disposals and any changes in the tax laws and other
legislation and regulation, in the jurisdictions in which we operate.
We do not undertake any obligation to update any forward-looking statements
contained in or incorporated in this announcement to reflect actual results,
changes in assumptions or in other factors which may affect any
forward-looking statements.
CONSOLIDATED PROFIT AND LOSS ACCOUNT - CONSTANT EXCHANGE RATES (unaudited)
In the profit and loss account given below, the results in both years have been
translated at constant exchange rates, being the annual average exchange rates
for 2001. This reporting convention facilitates comparisons since the impact of
exchange rate fluctuations is eliminated.
Third Quarter € Millions - constant Nine months
2002 2001 % Incr./ 2002 2001 % Incr./
(Decr.)
(Decr.)
13,106 13,270 (1) % TURNOVER 38,748 39,137 (1) %
(120) (189) Less: Share of turnover of joint ventures (404) (507)
12,986 13,081 (1) % GROUP TURNOVER 38,344 38,630 (1) %
1,625 1,406 16 % GROUP OPERATING PROFIT 4,562 4,282 7 %
2,094 2,053 2 % Group operating profit beia * 5,873 5,300 11 %
(125) (304) Exceptional items (292) 14
(344) (343) Amortisation of goodwill and intangibles (1,019) (1,032)
23 17 Add: Share of operating profit of joint ventures 64 52
1,648 1,423 16 % OPERATING PROFIT 4,626 4,334 7 %
2,121 2,079 2 % Operating profit beia * 5,944 5,379 10 %
(125) (304) Exceptional items (284) 14
(348) (352) Amortisation of goodwill and intangibles (1,034) (1,059)
12 - Share of operating profit of associates 26 -
2 3 Other income from fixed investments (12) 7
(319) (420) Interest (971) (1,259)
1,343 1,006 33 % PROFIT BEFORE TAXATION 3,669 3,082 19 %
(472) (474) Taxation (1,511) (1,302)
871 532 64 % PROFIT AFTER TAXATION 2,158 1,780 21 %
(68) (54) Minority Interests (234) (182)
803 478 68 % NET PROFIT AT CONSTANT 2001 EXCHANGE RATES 1,924 1,598 20 %
1,204 1,032 17 % Net profit before exceptional items & amortisation of 3,208 2,541 26 %
goodwill and intangibles (Constant rates)
780 493 58 % NET PROFIT AT EXCHANGE RATES CURRENT IN EACH PERIOD 1,858 1,608 15 %
1,135 1,034 10 % Net profit before exceptional items & amortisation of 3,068 2,547 20 %
goodwill and intangibles (Current rates)
COMBINED EARNINGS PER SHARE (Current rates)
0.79 0.49 60 % - per €0.51 ordinary share (Euros) 1.86 1.60 16 %
0.77 0.47 60 % - per €0.51 ordinary share - diluted (Euros) 1.81 1.55 16 %
11.80 7.36 60 % - per 1.4p ordinary share (Euro cents) 27.91 23.97 16 %
11.45 7.16 60 % - per 1.4p ordinary share - diluted (Euro cents) 27.08 23.32 16 %
* beia means before exceptional items and amortisation of goodwill and
intangibles.
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES (unaudited) Nine Months
€ Millions 2002 2001
Restated
Net profit 1,858 1,608
Currency retranslation and other (2) (1,642) (969)
Total recognised gains / (losses) since last annual accounts 216 639
MOVEMENTS IN SHAREHOLDERS' EQUITY (unaudited) Nine Months
€ Millions 2002 2001
Restated
Shareholders' equity as at 1 January (1) 6,993 7,974
Net profit 1,858 1,608
Dividends (568) (520)
Goodwill movements 428 132
Currency retranslation and other (2) (1,603) (970)
Change in number of shares or certificates of shares held in (597) (418)
connection with share options
Shareholders' equity as at end period 6,511 7,806
SUMMARY BALANCE SHEET (unaudited) As at 28th As at 31st As at 29th
September December Septemberer
€ Millions 2002 2001 2001
Restated Restated
Goodwill and intangibles 21,496 25,045 25,240
Other fixed assets 8,714 10,124 10,274
Stocks 4,970 5,343 5,631
Debtors 9,418 9,953 9,774
Cash and current investments 4,476 2,301 3,388
Trade and other creditors (11,696) (12,738) (12,894)
37,378 40,028 41,413
Borrowings 23,322 25,500 26,256
Provisions for liabilities and charges 6,861 6,871 6,765
Minority interests 684 664 586
Capital and reserves 6,511 6,993 7,806
37,378 40,028 41,413
Restatements relate to the implementation of United Kingdom Financial Reporting
Standard 19 (see note on Page 13).
As at 31st As at 31st
December December
2001 2000
(1) Shareholders' equity as previously reported in 2001 Report & Accounts 7,195 8,169
Accounting policy change (202) (195)
Shareholders' equity as restated 6,993 7,974
(2) Includes gain on sale of interest in subsidiary to related party.
CASH FLOW STATEMENT (unaudited)
€ Millions Nine Months
2002 2001
Cash flow from operating activities 5,671 5,217
Dividends from joint ventures and associates 31 45
Returns on investments and servicing of finance (1,041) (1,392)
Taxation (1,427) (1,288)
Capital expenditure and financial investment (1,313) (1,138)
Acquisitions and disposals 1,484 3,219
Dividends paid on ordinary share capital (1,025) (927)
CASH INFLOW / (OUTFLOW) BEFORE MANAGEMENT OF LIQUID RESOURCES AND 2,380 3,736
FINANCING
Management of liquid resources (1,178) 398
Financing (739) (3,940)
INCREASE / (DECREASE) IN CASH IN THE PERIOD 463 194
RECONCILIATION OF CASH FLOW TO MOVEMENT IN NET DEBT
NET DEBT AT 1 JANUARY (23,199) (26,468)
INCREASE / (DECREASE) IN CASH IN THE PERIOD 463 194
Cash flow from (increase)/decrease in borrowings 744 3,935
Cash flow from increase/(decrease) in liquid resources 1,178 (398)
Change in net debt resulting from cash flows 2,385 3,731
Borrowings within group companies acquired (77) -
Borrowings within group companies sold 29 1
Liquid resources within group companies acquired - -
Liquid resources within group companies sold (1) -
Non cash movements 1,014 (24)
Currency retranslation 1,003 (108)
(INCREASE)/DECREASE IN NET DEBT IN THE PERIOD 4,353 3,600
NET DEBT AT PERIOD END (18,846) (22,868)
GEOGRAPHICAL ANALYSIS (CONSTANT)
Third Quarter € Millions Nine Months
% Incr./ % Incr./
2002 2001 (Decr.) 2002 2001 (Decr.)
13,106 13,270 (1)% TURNOVER 38,748 39,137 (1)%
5,042 5,228 (4)% Europe 14,863 15,315
3,305 3,544 (7)% North America 9,983 10,485 (5)%
1,000 902 11 % Africa, Middle East and Turkey 2,751 2,560 7 %
2,024 1,994 1 % Asia and Pacific 6,055 5,965 2 %
1,735 1,602 Latin America 5,096 4,812 6 %
2,121 2,079 2 % OPERATING PROFIT - before exceptional items and 5,944 5,379 10 %
amortisation of goodwill and intangibles
922 911 1 % Europe 2,377 2,312 3 %
559 555 1 % North America 1,593 1,390 15 %
130 108 Africa, Middle East and Turkey 343 285 20 %
286 271 6 % Asia and Pacific 878 765 15 %
224 234 Latin America 753 627 20 %
16.2 % 15.7 % OPERATING MARGIN - before exceptional items and 15.3 % 13.7 %
amortisation of goodwill and intangibles
18.3 % 17.4 % Europe 16.0 % 15.1 %
16.9 % 15.7 % North America 16.0 % 13.3 %
13.0 % 12.0 % Africa, Middle East and Turkey 12.5 % 11.1 %
14.2 % 13.6 % Asia and Pacific 14.5 % 12.8 %
12.9 % 14.6 % Latin America 14.8 % 13.0 %
OPERATIONAL ANALYSIS (CONSTANT)
Third Quarter € Millions Nine Months
% Incr./ % Incr./
2002 2001 (Decr.) 2002 2001 (Decr.)
13,106 13,270 (1)% TURNOVER 38,748 39,137 (1)%
7,345 7,349 - % Foods 21,536 21,771 (1)%
2,473 2,404 3 % Savoury and Dressings 7,304 7,325 - %
1,538 1,608 (4)% Spreads and Cooking Products 4,711 4,900 (4)%
1,140 1,100 Health & Wellness and Beverages 3,352 3,230 4
2,194 2,237 (2)% Ice Cream and Frozen Foods 6,169 6,316 (2)%
2,220 2,638 (16)% Home Care and Professional Cleaning 7,165 7,857 (9)
3,396 3,137 8 % Personal Care 9,663 9,060 7 %
145 146 - Other Operations 384 449 (14)
2,121 2,079 2 % OPERATING PROFIT - before exceptional items and 5,944 5,379 10 %
amortisation of goodwill and intangibles
1,219 1,161 5 % Foods 3,180 3,052 4
389 403 (4)% Savoury and Dressings 1,084 1,148 (6)%
237 217 10 % Spreads and Cooking Products 718 696 4 %
184 136 35 Health & Wellness and Beverages 465 394 18 %
409 405 1 % Ice Cream and Frozen Foods 913 814 12 %
256 281 (9)% Home Care and Professional Cleaning 862 699 23
656 647 1 % Personal Care 1,882 1,609 17 %
(10) (10) 6 % Other Operations 20 19 5
16.2 % 15.7 % OPERATING MARGIN - before exceptional items and 15.3 % 13.7 %
amortisation of goodwill and intangibles
16.6 % Foods 14.8 %
15.7 % 16.7 % Savoury and Dressings 14.8 % 15.7 %
15.4 % Spreads and Cooking Products 15.2 %
16.2 % Health & Wellness and Beverages 13.9 %
18.6 % Ice Cream and Frozen Foods 14.8 %
11.5 % Home Care and Professional Cleaning 12.0 %
19.3 % Personal Care 19.5 %
(6.6)% Other Operations 5.2 %
NOTES
Exchange Rates
The results for 2002 and the comparative figures for 2001 have been translated
at constant average rates of exchange, being the annual average rates for 2001.
For our reporting currencies these were €1 = £0.62 = US $0.90. In addition, the
results, earnings per share and cash flow statement have been translated at
rates current in each period. For our reporting currencies these were:
Third Quarter Nine Months
2002 €1 = £0.63 = US $0.96 €1 = £0.63 = US $0.93
2001 €1 = £0.62 = US $0.89 €1 = £0.62 = US $0.89
The balance sheet figures have been translated at period-end rates of exchange.
For our reporting currencies these were:
End September 2002 €1 = £0.63 = US $0.98
End December 2001 €1 = £0.61 = US $0.89
End September 2001 €1 = £0.62 = US $0.92
Current Rates of Exchange
For the year to date in current rates of exchange: Turnover is €36,904 million
(6% decrease); Operating profit beia is €5,658 million (5% increase); Operating
profit is €4,421 million (2% increase); Interest is a charge of €902 million
(28% decrease); Pre-tax profit is €3,531 million (14% increase); Net profit is
€1,858 million (15% increase); Net profit beia is €3,068 million (20% increase);
Earnings per share beia is €3.10 per NV share (21% increase) and €cent 46.47 per
PLC share (21% increase); Earnings per share is €1.86 per NV share (16%
increase) and €cent 27.91 per PLC share (16% increase).
Acquisitions
In the first nine months of 2002 the effect on turnover and operating profit of
acquisitions made in the period was €94 million and €10 million respectively.
Disposals
On 30 August 2002 Unilever announced that it intended to sell Loders Croklaan
Group, an international speciality oils and fats business, to IOI Corporation
Berhad of Malaysia for €217 million in cash. The sale is subject to shareholder
and works council approval, and it is expected that it will be completed by the
end of 2002.
Reporting of turnover and operating profit
Turnover means Group turnover plus our share of turnover of joint ventures net
of our share of any sales to the joint ventures already included in the Group
figures. Operating profit means Group operating profit plus our share of
operating profit of joint ventures. These measures do not include our share of
the turnover or operating profit of associates.
FRS 19
From 1 January 2002 Unilever has adopted UK Financial Reporting Standard 19 (FRS
19) 'Deferred Tax' which requires full provision to be made for deferred taxes.
The impact of adoption of this standard has been reflected in all periods
covered by this announcement by means of prior period adjustments to the balance
sheets. As Unilever has previously provided for deferred taxes on a full
provision basis in accordance with Dutch law, FRS 19 does not have a material
impact on the profit and loss account.
The implementation of FRS 19 has resulted in a restatement of €(202) million to
the opening Capital and Reserves for 2002 (2001: €(195) million). In the 2002
opening balance sheet goodwill has been reduced by €52 million (2001: nil) while
debtors have been reduced by €141 million (2001: €134 million) through a
reduction in deferred tax assets, and deferred tax liabilities have been
increased by €9 million (2001: €61 million).
Interim Dividends
The Boards today declared interim dividends in respect of 2002 on the ordinary
shares at the following rates which are equivalent in value at the rate of
exchange applied under the terms of the Equalisation Agreement between the two
companies:
N.V.
Per ordinary share €0.55 (2001: €0.50)
PLC
Per ordinary share 5.21p (2001: 4.65p)
The N.V. interim dividend will be payable as from 2 December 2002, to
shareholders registered at close of business on 30 October 2002.
The PLC interim dividend will be paid on 2 December 2002, to shareholders
registered at close of business on
8 November 2002.
DIVIDEND ON NEW YORK SHARES OF N.V.
The N.V. interim dividend, when converted at the Euro/Dollar European Central
Bank rate of exchange on 29 October 2002, represents US $0.540100 per New York
Share of €0.51* (2001: US $0.454850) before deduction of Netherlands withholding
tax. The New York shares of N.V. will go ex-dividend on 6 November 2002; US
dollar checks for the interim dividend, after deduction of Netherlands
withholding tax at the appropriate rate, will be mailed on 29 November 2002, to
holders of record of New York shares at the close of business on 8 November
2002. The interim dividend will be payable on 2 December 2002.
* The euro amounts of share capital shown above are representations in euros on
the basis of article 67c Book 2 Dutch Civil Code of underlying amounts of share
capital in Dutch guilders.
DIVIDEND ON AMERICAN SHARES OF PLC
Each American share of PLC represents four 1.4p Ordinary shares of PLC. The PLC
interim dividend will therefore be 20.84p per American Share. When converted at
the Bank of England sterling/dollar rate of exchange on 29 October 2002, the
interim dividend for holders resident in the US will therefore be US $0.3247 per
American Share (2001: US $0.2702).
The American shares of PLC will go ex-dividend on 6 November 2002; US dollar
checks for the interim dividend will be mailed on 29 November 2002 to holders of
record of American shares at the close of business on
8 November 2002. The interim dividend will be payable on 2 December 2002.
Combined earnings per share
The combined earnings per share calculations are based on the average number of
share units representing the combined ordinary shares of NV and PLC in issue
during the period, less the average number of shares held to meet options
granted under various employee share plans.
The number of combined share units is calculated from the underlying NV and PLC
shares using the exchange rate of £1 = €5.445, in accordance with the
Equalisation Agreement.
The diluted earnings per share are based on the average number of share units,
plus all shares under option, together with certain PLC shares which may be
issued in 2038 under the arrangements for the variation of the Leverhulme Trust.
The number of shares is reduced, in accordance with FRS 14, by the number of
shares that could be purchased at fair value with the expected proceeds from the
exercise of options by employees.
Constant rates Current rates
Earnings per share in Euro
(Nine months) 2002 2001 2002 2001
Thousands of units
Average number of combined share units of €0.51 978,190 983,181 978,190 983,181
Average number of combined share units of 1.4p 6,521,267 6,554,541 6,521,267 6,554,541
COMBINED EPS
Net profit 1,924 1,598 1,858 1,608
Less: Preference dividends (38) (37) (38) (37)
Net profit attributable to ordinary capital 1,886 1,561 1,820 1,571
Combined EPS per €0.51 (Euros) 1.93 1.59 1.86 1.60
Combined EPS per 1.4p (Euro cents) 28.93 23.82 27.91 23.97
COMBINED EPS - BEIA
Net profit 1,924 1,598 1,858 1,608
Add back exceptional items net of tax 288 (79) 275 (84)
Add back amortisation of goodwill / intangibles net of tax 996 1,022 935 1,023
Net profit beia 3,208 2,541 3,068 2,547
Less: Preference dividends (38) (37) (38) (37)
Net profit attributable to ordinary capital - beia 3,170 2,504 3,030 2,510
Combined EPS beia per €0.51 (Euros) 3.24 2.55 3.10 2.55
Combined EPS beia per 1.4p (Euro cents) 48.61 38.18 46.47 38.29
COMBINED EPS - Diluted
Thousands of units
Adjusted average combined share units of €0.51 1,008,251 1,010,632 1,008,251 1,010,632
Adjusted average combined share units of 1.4p 6,721,676 6,737,550 6,721,676 6,737,550
Net profit attributable to ordinary capital 1,886 1,561 1,820 1,571
Combined diluted EPS per €0.51 (Euros) 1.87 1.54 1.81 1.55
Combined diluted EPS per 1.4p (Euro cents) 28.07 23.17 27.08 23.32
Dates
The provisional results for the fourth quarter and for the year 2002 and the
proposed final dividends will be published on Thursday 13 February 2003.
30 October 2002
Internet: http://www.unilever.com
E-mail: press-office.london@unilever.com
CONSOLIDATED PROFIT AND LOSS ACCOUNT - CONSTANT EXCHANGE RATES (unaudited)
In the profit and loss account given below, the results in both years have been
translated at constant exchange rates, being the annual average exchange rates
for 2001. This reporting convention facilitates comparisons since the impact of
exchange rate fluctuations is eliminated.
Third Quarter £ Millions - constant Nine Months
2002 2001 % Incr./ 2002 2001 % Incr./
(Decr.)
(Decr.)
8,152 8,254 (1)% TURNOVER 24,101 24,343 (1)%
(74) (117) Less: Share of turnover of joint ventures (251) (315)
8,078 8,137 (1)% GROUP TURNOVER 23,850 24,028 (1)%
1,011 874 16 % GROUP OPERATING PROFIT 2,838 2,663 7 %
1,302 1,277 2 % Group operating profit beia * 3,653 3,297 11 %
(77) (190) Exceptional items (181) 8
(214) (213) Amortisation of goodwill and intangibles (634) (642)
15 11 Add: Share of operating profit of joint ventures 40 33
1,026 885 16 % OPERATING PROFIT 2,878 2,696 7 %
1,319 1,293 2 % Operating profit beia * 3,697 3,346 10 %
(77) (190) Exceptional items (176) 8
(216) (218) Amortisation of goodwill and intangibles (643) (658)
8 - Share of operating profit of associates 16 -
1 2 Other income from fixed investments (8) 4
(199) (261) Interest (604) (783)
836 626 33 % PROFIT BEFORE TAXATION 2,282 1,917 19 %
(294) (295) Taxation (940) (810)
542 331 64 % PROFIT AFTER TAXATION 1,342 1,107 21 %
(42) (34) Minority Interests (145) (113)
500 297 68 % NET PROFIT AT CONSTANT 2001 EXCHANGE RATES 1,197 994 20 %
749 642 17 % Net profit before exceptional items & amortisation of 1,995 1,581 26 %
goodwill and intangibles (Constant rates)
492 306 61 % NET PROFIT AT EXCHANGE RATES CURRENT IN EACH PERIOD 1,163 1,001 16 %
719 642 12 % Net profit before exceptional items & amortisation of 1,921 1,584 21 %
goodwill and intangibles (Current rates)
COMBINED EARNINGS PER SHARE (Current rates)
7.46p 4.57p 63 % - per 1.4p ordinary share 17.48p 14.91p 17 %
7.24p 4.44p 63 % - per 1.4p ordinary share - diluted 16.96p 14.51p 17 %
* beia means before exceptional items and amortisation of goodwill and
intangibles.
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES (unaudited) Nine Months
£ Millions 2002 2001
Restated
Net profit 1,163 1,001
Currency retranslation and other (2) (913) (601)
Total recognised gains / (losses) since last annual accounts 250 400
MOVEMENTS IN SHAREHOLDERS' EQUITY (unaudited) Nine Months
£ Millions 2002 2001
Restated
Shareholders' equity as at 1 January (1) 4,272 4,973
Net profit 1,163 1,001
Dividends (355) (324)
Goodwill movements 268 82
Currency retranslation and other (2) (880) (603)
Change in number of shares or certificates of shares held in (374) (260)
connection with share options
Shareholders' equity as at end period 4,094 4,869
SUMMARY BALANCE SHEET (unaudited) As at 28th As at 31st As at 29th
September December September
£ Millions 2002 2001 2001
Restated Restated
Goodwill and intangibles 13,516 15,300 15,745
Other fixed assets 5,479 6,185 6,409
Stocks 3,125 3,264 3,513
Debtors 5,922 6,080 6,097
Cash and current investments 2,814 1,405 2,114
Trade and other creditors (7,353) (7,781) (8,044)
23,503 24,453 25,834
Borrowings 14,665 15,578 16,378
Provisions for liabilities and charges 4,314 4,197 4,221
Minority interests 430 406 366
Capital and reserves 4,094 4,272 4,869
23,503 24,453 25,834
Restatements relate to the implementation of United Kingdom Financial Reporting
Standard 19 (see note on Page 13).
As at 31st As at 31st
December December
2001 2000
(1) Shareholders' equity as previously reported in 2001 Report & Accounts 4,396 5,095
Accounting policy change (124) (122)
Shareholders' equity as restated 4,272 4,973
(2) Includes gain on sale of interest in subsidiary to related party.
CASH FLOW STATEMENT (unaudited)
£ Millions Nine Months
2002 2001
Cash flow from operating activities 3,551 3,245
Dividends from joint ventures and associates 19 28
Returns on investments and servicing of finance (652) (866)
Taxation (893) (801)
Capital expenditure and financial investment (823) (707)
Acquisitions and disposals 929 2,001
Dividends paid on ordinary share capital (642) (577)
CASH INFLOW / (OUTFLOW) BEFORE MANAGEMENT OF LIQUID RESOURCES AND 1,489 2,323
FINANCING
Management of liquid resources (737) 247
Financing (463) (2,451)
INCREASE / (DECREASE) IN CASH IN THE PERIOD 289 119
RECONCILIATION OF CASH FLOW TO MOVEMENT IN NET DEBT
NET DEBT AT 1 JANUARY (14,173) (16,507)
INCREASE / (DECREASE) IN CASH IN THE PERIOD 289 119
Cash flow from (increase)/decrease in borrowings 466 2,448
Cash flow from increase/(decrease) in liquid resources 737 (247)
Change in net debt resulting from cash flows 1,492 2,320
Borrowings within group companies acquired (48) -
Borrowings within group companies sold 18 1
Liquid resources within group companies acquired - -
Liquid resources within group companies sold (1) -
Non cash movements 635 (15)
Currency retranslation 226 (63)
(INCREASE)/DECREASE IN NET DEBT IN THE PERIOD 2,322 2,243
NET DEBT AT PERIOD END (11,851) (14,264)
GEOGRAPHICAL ANALYSIS (CONSTANT)
Third Quarter £ Millions Nine Months
% Incr./ % Incr./
2002 2001 (Decr.) 2002 2001 (Decr.)
8,152 8,254 (1)% TURNOVER 24,101 24,343 (1)%
3,136 3,252 (4)% Europe 9,245 9,526 (3)%
2,056 2,204 (7)% North America 6,209 6,521 (5)%
622 561 11 % Africa, Middle East and Turkey 1,711 1,593 7 %
1,258 1,240 1 % Asia and Pacific 3,766 3,710 2 %
1,080 997 8 % Latin America 3,170 2,993 6 %
1,319 1,293 2 % OPERATING PROFIT - before exceptional items and 3,697 3,346 10 %
amortisation of goodwill and intangibles
574 567 1 % Europe 1,479 1,439 3 %
348 345 1 % North America 991 865 15 %
80 67 20 % Africa, Middle East and Turkey 213 177 20 %
178 169 6 % Asia and Pacific 546 476 15 %
139 145 (5)% Latin America 468 389 20 %
16.2 % 15.7 % OPERATING MARGIN - before exceptional items and 15.3 % 13.7 %
amortisation of goodwill and intangibles
18.3 % 17.4 % Europe 16.0 % 15.1 %
16.9 % 15.7 % North America 16.0 % 13.3 %
13.0 % 12.0 % Africa, Middle East and Turkey 12.5 % 11.1 %
14.2 % 13.6 % Asia and Pacific 14.5 % 12.8 %
12.9 % 14.6 % Latin America 14.8 % 13.0 %
OPERATIONAL ANALYSIS (CONSTANT)
Third Quarter £ Millions Nine Months
% Incr./ % Incr./
2002 2001 (Decr.) 2002 2001 (Decr.)
8,152 8,254 (1)% TURNOVER 24,101 24,343 (1)%
4,568 4,571 - % Foods 13,395 13,541 (1)%
1,539 1,495 3 % Savoury and Dressings 4,543 4,556 - %
956 1,000 (4)% Spreads and Cooking Products 2,930 3,048 (4)%
709 684 4 % Health & Wellness and Beverages 2,085 2,009 4 %
1,364 1,392 (2)% Ice Cream and Frozen Foods 3,837 3,928 (2)%
1,381 1,641 (16)% Home Care and Professional Cleaning 4,457 4,887 (9)%
2,112 1,952 8 % Personal Care 6,010 5,636 7 %
91 90 - % Other Operations 239 279 (14)%
1,319 1,293 2 % OPERATING PROFIT - before exceptional items and 3,697 3,346 10 %
amortisation of goodwill and intangibles
758 722 5 % Foods 1,978 1,898 4 %
242 251 (4)% Savoury and Dressings 674 714 (6)%
148 134 10 % Spreads and Cooking Products 447 432 4 %
114 85 35 % Health & Wellness and Beverages 289 245 18 %
254 252 1 % Ice Cream and Frozen Foods 568 507 12 %
159 175 (9)% Home Care and Professional Cleaning 536 435 23 %
408 402 1 % Personal Care 1,171 1,001 17 %
(6) (6) 6 % Other Operations 12 12 5 %
16.2 % 15.7 % OPERATING MARGIN - before exceptional items and 15.3 % 13.7 %
amortisation of goodwill and intangibles
16.6 % 15.8 % Foods 14.8 % 14.0 %
15.7 % 16.7 % Savoury and Dressings 14.8 % 15.7 %
15.4 % 13.5 % Spreads and Cooking Products 15.2 % 14.2 %
16.2 % 12.4 % Health & Wellness and Beverages 13.9 % 12.2 %
18.6 % 18.1 % Ice Cream and Frozen Foods 14.8 % 12.9 %
11.5 % 10.6 % Home Care and Professional Cleaning 12.0 % 8.9 %
19.3 % 20.6 % Personal Care 19.5 % 17.8 %
(6.6) % (6.3) % Other Operations 5.2 % 4.3 %
Earnings per share in Sterling Constant rates Current rates
2002 2001 2002 2001
Thousands of units
Average number of combined share units of 1.4p 6,521,267 6,554,541 6,521,267 6,554,541
COMBINED EPS
Net profit 1,197 994 1,163 1,001
Less: Preference dividends (23) (23) (23) (23)
Net profit attributable to ordinary capital 1,174 971 1,140 978
Combined EPS per 1.4p 17.99p 14.82p 17.48p 14.91p
COMBINED EPS - BEIA
Net profit 1,197 994 1,163 1,001
Add back exceptional items net of tax 179 (49) 172 (53)
Add back amortisation of goodwill / intangibles net of tax 619 636 586 636
Net profit beia 1,995 1,581 1,921 1,584
Less: Preference dividends (23) (23) (23) (23)
Net profit attributable to ordinary capital - beia 1,972 1,558 1,898 1,561
Combined EPS beia per 1.4p 30.24p 23.75p 29.10p 23.82p
COMBINED EPS - Diluted
Thousands of units
Adjusted average combined share units of 1.4p 6,721,676 6,737,550 6,721,676 6,737,550
Net profit attributable to ordinary capital 1,174 971 1,140 978
Combined diluted EPS per 1.4p 17.46p 14.41p 16.96p 14.51p
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