3rd Quarter Results
Unilever PLC
29 October 2003
Embargoed: Not for publication or broadcast before 0700hrs, Wednesday 29th
October 2003
UNILEVER RESULTS
THIRD QUARTER 2003 AND INTERIM DIVIDENDS
(Unaudited, constant 2002 average exchange rates)
Third quarter EPS (beia*) ahead by 13% with a further strong expansion in
operating margin.
FINANCIAL HIGHLIGHTS
--------------------
Third Quarter 2003 € Millions Nine months 2003
-------------------- ----------------
12,289 0 % Turnover 35,775 - 2 %
-------------------- ----------------
2,088 + 6 % Operating profit - beia* 5,519 + 2 %
-------------------- ----------------
1,416 + 10 % Pre-tax profit 3,550 - 1 %
-------------------- ----------------
866 + 15 % Net profit 2,131 + 14 %
-------------------- ----------------
1,250 + 11 % Net profit - beia* 3,124 + 6 %
-------------------- ----------------
-------------------- ----------------
1.29 + 13 % EPS NV - beia * (Euros) 3.20 + 7 %
-------------------- ----------------
19.30 + 13 % EPS PLC - beia * (Euro cents) 47.99 + 7 %
-------------------- ----------------
* Before exceptional items and amortisation of goodwill and intangibles
EPS (beia) at current rates of exchange was 6% higher than the prior year in the
quarter and 2% lower for the year to date.
KEY FEATURES
• Sales of the leading brands grew 3.2% in the quarter, by 3.1% in the year
to date and are now 92% of our business.
• Operating margin (beia) moved ahead by 100 basis points in the quarter to
17% through the Path to Growth savings programme, taking the year to date to
15.4%.
• Net borrowing costs were reduced by 20% in the quarter and by 13% for the
year to date. Net debt at the quarter end, at closing rates of exchange, had
been further reduced to €14.4 billion.
• EPS (beia) grew by 13% in the quarter and by 7% for the first nine
months.
• Interim dividend of €0.59 per NV ordinary share and 6.16p per PLC
ordinary share.
CHAIRMEN'S COMMENT
Our primary objective continues to be sustained top third Total Shareholder
Return within our peer group delivered through robust value growth. Path to
Growth is a five year strategy to transform the business and as we near the end
of the fourth year we have: improved operating margins (beia) from 11% to over
15%; reduced our operating assets from 29% to 20% of sales; raised annual free
cash flow to more than €4 billion; successfully integrated the Bestfoods
acquisition; and reshaped the portfolio including the sale of 110 businesses
such that leading brands now represent 92% of sales.
Against this background we are disappointed with our top line growth in 2003 and
that we have had to revise our outlook for leading brand growth to below 3% for
the year. Whilst we see good progress in the vast majority of our business this
is not yet sufficient to offset the weaknesses in a limited number of
under-performing businesses when taken in conjunction with some one-off factors
in the first half of the year. With over a year to go until we reach the end of
Path to Growth, the under-performing parts of the business will be progressively
improved and higher levels of leading brand growth will resume.
Notwithstanding a more difficult business environment we continue to create the
operational flexibility to invest in our leading brands and expect to achieve
another year of low double digit growth in EPS (beia), as we have throughout the
Path to Growth programme.
N W A FitzGerald A Burgmans
Chairman, Unilever PLC Chairman, Unilever N.V.
29 October 2003
THIRD QUARTER AND NINE MONTHS FINANCIAL RESULTS (at constant exchange rates)
Notes:
Unilever uses 'constant rate', 'underlying' and 'beia' measures primarily for
internal performance analysis and targeting purposes. Unilever believes that the
use of such measures provides additional information for shareholders on
underlying business performance trends. Such measures are not defined under UK,
Netherlands or US GAAP and are not intended to be a substitute for GAAP measures
of turnover and profit. Fuller definitions and reconciliations between such
measures and the equivalent GAAP measures are available on our website:
www.unilever.com.
These results include the previously announced changes in accounting for share
options and pensions in both the prior and current years. Further details are
given in the notes on page 14. The estimated impact of increased pension costs
and increased share option charges in 2003 is to reduce growth in EPS before
exceptional items and goodwill and intangibles amortisation (beia) by 6
percentage points in 2003, which is included in the outlook for the year.
Underlying sales grew by 2.3% in the quarter and by 2.2% in the first nine
months. After the impact of disposals turnover was equal to last year in the
quarter and lower by 1.7% in the first nine months.
Operating margin (beia) at 17% was ahead of last year by 100 basis points in the
quarter, another all time high. The year to date operating margin (beia) is
15.4%, 50 basis points higher than last year. The improved margin is reflected
in operating profit (beia) which was ahead by 6% for the quarter, and by 2% for
the year to date which also includes the impact of lower turnover through
disposals.
Amortisation of goodwill and intangibles was €324 million in the quarter and
€964 million for the first nine months.
Net borrowing costs were 20% lower in the quarter as we benefited from continued
cash flow from operations and proceeds of business disposals and includes a gain
of €23million on the sale of a fixed rate investment. Net borrowing costs for
the first nine months are 13% lower than last year and are in line with our plan
for the year. Financing of pension fund assets and liabilities represented a net
charge of €46 million in the quarter which compares with a credit of €27 million
in the prior year quarter.
Net exceptional charges within operating profit were €80 million in the quarter.
This includes restructuring investment costs of €100 million and net profits on
disposals of €20 million. Year to date net exceptional charges within operating
profit are €101 million which includes restructuring investment costs of €283
million and net profits on disposals of €182 million.
The effective tax rate was 34% in the quarter and reflects the
non-tax-deductibility of Bestfoods goodwill amortisation. The beia tax rate in
the quarter was 28% which includes the impact of the successful resolution of a
state income tax issue in the US. For the full year the beia tax rate is
expected to be at a level similar to last year which was 30%.
Net profit (beia) was up 11% in the quarter and 6% in the first nine months to
€1,250 million and €3,124 million respectively. Net profit was 15% higher in the
quarter and 14% higher for the first nine months mainly due to lower after-tax
exceptional items, particularly lower restructuring costs as we move into the
latter part of the Path to Growth programme.
Earnings per share (beia) rose by 13% in the quarter and by 7% in the year to
date, while earnings per share was 17% higher in the quarter and 16% higher for
the first nine months.
When expressed at current rates of exchange, earnings per share (beia) for the
quarter increased by 6% in Euros. For the first nine months on this basis,
earnings per share (beia) are 2% lower in Euros, but increase by 8% when
measured in £ Sterling and increase by 18% when measured in US $. Turnover
expressed at current rates of exchange decreased in the quarter by 7% in Euros,
while for the first nine months it decreased by 12% in Euros, decreased by 3% in
£ Sterling and increased by 6% in US$.
THIRD QUARTER PERFORMANCE BY REGION (at constant exchange rates)
Note:
The following regional commentary is based on operating profit before
exceptional items and amortisation of goodwill and intangibles. Sales growth is
stated on an underlying basis, excluding the effects of acquisitions and
disposals. Turnover includes the impact of acquisitions and disposals.
EUROPE
Underlying sales grew by 1.1% with volume ahead by 1.4%. Turnover was 2.5% lower
than last year through the impact of planned disposals as we reshape our
portfolio to faster growing and more profitable markets.
There has been continued strong growth in Personal Care partly offset by a sharp
decline in prestige fragrances and the impact on pricing in Home Care of an
increased level of trade and consumer price promotions. In Foods the effect of
the exceptionally hot weather was broadly neutral, with a boost to sales of
ready-to-drink tea and ice cream but with lower consumption in categories which
are consumed 'hot' such as savoury, frozen meals and leaf tea, and in cooking
products.
In Western Europe:
• A strong performance in Personal Care was broad based and was led by:
Dove through the introduction of the Dove Silk hand, body and shower range,
an exfoliating bar and from the continued success in daily hair care;
Sunsilk, which has been further extended to Italy and Sweden; Axe, including
the first anti-perspirant under the brand and a new shower gel variant, and
the Crystal variant of Rexona/Sure.
• In Home Care volumes are broadly in line with last year while pricing is
lower through the action of competitors and as we invest in greater in-store
consumer excitement through price related promotions. Our strategy to focus
on priority brands and markets while improving the profitability of the
portfolio as a whole is making good progress with a further increase in
trading margins.
• There has been good growth in spreads and cooking products for our heart
health brands Flora/Becel, but our family brands such as Rama and Blue Band
continue to be affected by low price competition. Overall we have held
market shares at the same time as recovering substantial increases in edible
oil costs. We have a strong innovation programme planned for both this
market and heart health brands - part of which is now expected to take place
next year rather than this as in one case we await regulatory clearance and
in another the roll-out phasing is adapted to optimise product formulations.
• After a good first half year including the successful launch of mealkits
and 'good for you' soups, Knorr declined in the quarter as consumption of
savoury products fell in the hot weather. A return to historical growth
rates is expected in the fourth quarter. Hellmann's and Bertolli both grew
strongly with the latter benefiting from the extension into pasta sauces.
• Tea based beverages have performed well with an excellent contribution
from Lipton Ready-to-Drink including green tea and fruit juice variants.
• Ice cream sales grew in line with the market which was helped by the hot
weather. Magnum grew fastest, boosted by innovations including Magnum 7
Sins, Magnum Moments and Magnum Snacking Bars. There was strong growth from
in-home products boosted by the roll out of the Fruit & Fresh mix of yoghurt
and ice cream.
• Frozen foods have yet to show broad based progress. The entry of Knorr
into frozen in Spain and France has gone well and was extended to Germany
this quarter. Birds Eye in the UK and Findus in Italy continued to grow,
however this was offset by poorer performances elsewhere, notably in
Germany.
• Foodsolutions returned to a healthy level of growth despite continued
weak markets in a number of countries.
In Central and Eastern Europe there was strong growth in skin and hair, whilst
in Foods good progress in dressings and tea was only partially offset by a
decline in spreads.
Operating margin at 18.8% was 170 basis points ahead of last year. This reflects
the contribution from our restructuring and savings programmes, improved mix
from portfolio change and our strategy for improving profitability in Home Care.
NORTH AMERICA
Underlying sales declined by 2.6% reflecting sharply lower sales in Slim•Fast
and prestige fragrances and including a positive 30 basis points from pricing.
Turnover, including the impact of disposals, declined by 3.7%.
Unilever Bestfoods grew overall sales by 1% in a competitive market, including a
good contribution from Canada. Particular strengths were Hellmann's, Lipton leaf
tea, Lawry's through the new Spice Blends steak sauce and an improvement in
spreads, which returned to growth in the quarter. These good performances were
partly offset by declines in Bertolli olive oil and Ragu pasta sauces.
In ice cream we continue to gain market share. Good Humor and Breyers performed
well including the extension of the health range and the recent introduction of
Slim-Fast, while Ben & Jerry's has been affected by continued weak out of home
channels.
Our Foodsolutions business accelerated in the quarter helped by roll-outs of a
range of products under the Hellmann's brand and good growth in Lipton
ready-to-drink and hot tea.
Slim-Fast innovations are performing as planned, however there continues to be a
greater than expected impact from current diet alternatives and total sales have
declined sharply. We remain confident in the longer term growth opportunity
based on our leadership of this large growth market, Slim-Fast's proven
scientific approach to healthy weight management and continued strong
endorsement from the medical profession.
In Home & Personal Care the sharp trade de-stocking of the first half year has
come to an end. We have continued to invest behind Dove and Axe which have made
further strong contributions. In laundry we have sustained our improvement in
profitability notwithstanding negative pricing through bonus pack promotions and
the action of competitors. The all brand has made good progress, particularly in
fabric conditioners including a new fabric refresher spray. Our prestige
fragrance business has declined in weak markets and we have lost share; we are
focussing on our strengths in North America and Europe and are restructuring the
business to release margin in order to fund a more aggressive innovation plan.
Operating margin at 17.5% is 40 basis points ahead of the prior year, a sharp
improvement from the first half which was impacted by trade de-stocking in Home
& Personal Care and the one-off accounting impact of 'go to market' in Foods.
AFRICA, MIDDLE EAST AND TURKEY
Underlying sales grew 5% with 3.5 percentage points from volume growth. Turnover
grew 1.9% including the impact of disposals.
The strengthened Surf and Omo brands continued to be the drivers of an excellent
performance in laundry. In Personal Care, Dove, Lux and Rexona were the main
contributors to growth, while Sunsilk has achieved the leading position in hair
care in Turkey.
In Foods, savoury grew strongly and Knorr was launched into a number of
countries in the Middle East. There was further solid growth in tea and ice
cream, offset by declines in non-leading brands which are being managed for
value.
Operating margin at 16% was 390 basis points ahead of last year through higher
gross margins as we improved production costs and as earlier devaluation-led
cost increases were reversed.
ASIA AND PACIFIC
Underlying sales grew by 7%, almost entirely from volume. Turnover, including
the net impact of acquisitions and disposals, increased by 6%.
In Home & Personal Care, growth has been broad based across categories.
Activities behind Lux include the recent launch of the Cool Awakening range in
China and a further variant for Lux Spa, launched earlier in the year in Japan.
Pond's growth was led by the launch of mini pack moisturisers in Indonesia and
good performances in China and India. In laundry, Surf grew particularly
strongly in the Philippines and benefitted from the launches of a variant with
fabric conditioner and a bar with bleach.
In Foods the improved momentum in leading brands which started to be evident in
quarter four of last year continued. Indonesia has made further progress with
Royco, Bango and Sariwangi as we continue to build distribution. Leaf tea
performed well through Brooke Bond in India and Lipton in Japan. China grew well
off a small base driven by Knorr. We continue to make good progress in exiting
from low margin low growth businesses although in the short term this holds back
overall growth.
Operating margin at 13.4% was 90 basis points lower than last year with savings
programmes more than offset in the quarter by the impact of a higher level of
price related promotional investment and higher palm oil costs in India.
LATIN AMERICA
Underlying sales grew by 11% through pricing as we recover devaluation-led cost
increases, while underlying volumes declined by just under 1%. Within this Home
& Personal Care sustained positive volume growth, but this was offset by
continuing market weakness in Food categories. Including the impact of
disposals, turnover increased 8%.
The key drivers of growth continue to be our Personal Care brands: Lux, which
has been relaunched with innovations in both product and presentation; Sunsilk,
including the launch of colourants in Argentina, Mexico and Brazil and the
success of the Lisage straightening variant in Central America and the
Caribbean; Rexona with the launch of a deodorant spray in Colombia; and Axe with
the launch of new variants and extension to new geographies.
In laundry we have continued to maintain our strong share positions with good
growth.
In Foods markets continue to be competitive and consumption remains weak,
especially in Brazil and Argentina. Nonetheless we have continued to improve the
base of our business. Innovations have boosted strong growth for the AdeS soya
based drink. The savoury portfolio has been strengthened through the migration
of CICA to Knorr in Brazil where Arisco has also grown well and the introduction
of Knorr to Central America. We have put in place initiatives to increase
distribution, for example in Chile, and are building on our well established
Foodsolutions business. Overall growth in Foods is impacted by our actions to
reduce the tail of non-leading brands by managing some brands for value through
a harvest strategy or through disposal.
Operating margin at 15.5% was 120 basis points ahead of last year with a strong
improvement in gross margin. We are making good progress with both savings
programmes and the recovery of devaluation-led cost increases, and are
benefitting from improved mix as we exit non-leading brands in Foods and benefit
from the rapid growth of Personal Care.
INTERIM DIVIDEND
In accordance with the interim dividend policy, 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 1 December 2003, is therefore fixed at €0.59 per €0.51* ordinary share
of Unilever N.V., an increase of 7% from last year. The interim dividend per
1.4p ordinary share of Unilever PLC is set at 6.16p, an increase of 18% from
last year. The Unilever N.V shares will go ex-dividend on 30 October 2003 and
the Unilever PLC shares will go ex-dividend on 5 November 2003.
* 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 (at current exchange rates)
Cash flow from operations for the first nine months of €4.7 billion was €1.0
billion lower than the corresponding period last year. Operating profit (beia)
was €0.5 billion lower than last year due to currency movements. Cash outflows
from restructuring costs under the Path to Growth programme were €0.2 billion
higher than the corresponding period last year. The remainder of the decrease of
€0.3 billion is due to movements in working capital and pensions payments.
The net interest outflow reduced by €0.3 billion reflecting the positive impact
of the currency movement on our US dollar-based debt and a lower overall net
debt level which decreased by €2.6 billion year to date. Capital expenditure and
cash costs of share option hedging were €0.4 billion lower than the same period
last year, with asset disposal proceeds and sale of a fixed-rate investment
contributing €0.2 billion. The net effect of acquisitions and disposals was €1.3
billion lower than the corresponding period last year, which included the sale
of the DiverseyLever business.
BALANCE SHEET (at current exchange rates)
Capital and reserves have increased by €1.8 billion. Net profit added €2.0
billion. Goodwill written back on disposals, the offset to the share option
charge and pension asset/liability movements added €0.3 billion. This was offset
by a reduction of €0.4 billion from the purchase of own shares to hedge share
options, and the interim dividend of €0.6 billion.
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)
Note: A description of the exchange rate conventions used is given on page 13.
Third Quarter € Millions - constant rates Nine Months
------------- -----------
2003 2002 % Incr./ 2003 2002 % Incr./
---- ---- -------- ---- ---- --------
Restated (Decr.) Restated (Decr.)
-------- -------- -------- --------
12,289 12,289 0% TURNOVER 35,775 36,387 (2)%
(69) (115) Less: Share of turnover of (216) (379)
------------------ joint ventures ------------------
12,220 12,174 0% Group turnover 35,559 36,008 (1)%
------------------ ------------------
1,671 1,514 10% Group operating profit 4,412 4,306 2%
13 22 Add: Share of operating 42 61
------------------ profit of joint ventures ------------------
1,684 1,536 10% OPERATING PROFIT 4,454 4,367 2%
---------------------------------------------------------------------------------------
2,088 1,967 6% Operating profit beia * 5,519 5,434 2%
(80) (110) Exceptional items (101) (111)
(324) (321) Amortisation of goodwill (964) (956)
and intangibles
---------------------------------------------------------------------------------------
11 12 Share of operating profit 16 25
of associates
- (1) Other income from fixed (11) (13)
investments
(233) (291) Interest (excluding (767) (881)
pension related amounts)
(46) 27 Net interest (cost)/return (142) 81
------------------ on pension scheme assets -----------------
and liabilities
1,416 1,283 10% PROFIT BEFORE TAXATION 3,550 3,579 (1)%
(475) (463) Taxation (1,216) (1,494)
------------------ ------------------
941 820 15% PROFIT AFTER TAXATION 2,334 2,085 12%
(75) (64) Minority interests (203) (220)
------------------ ------------------
866 756 15% NET PROFIT 2,131 1,865 14%
------------------ ------------------
---------------------------------------------------------------------------------------
1,250 1,126 11% Net profit beia * 3,124 2,960 6%
---------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------
COMBINED EARNINGS PER
SHARE
(Constant rates)
0.89 0.76 17% - per €0.51 ordinary NV 2.18 1.87 16%
share (Euros)
13.36 11.43 17% - per 1.4p ordinary PLC 32.64 28.03 16%
share (Euro cents)
1.29 1.14 13% - per €0.51 ordinary NV 3.20 2.99 7%
share - beia * (Euros)
19.30 17.12 13% - per 1.4p ordinary PLC 47.99 44.81 7%
share - beia * (Euro
cents)
0.86 0.74 17% - per €0.51 ordinary NV 2.11 1.81 17%
share - diluted (Euros)
12.98 11.09 17% - per 1.4p ordinary PLC 31.69 27.19 17%
share - diluted (Euro
cents)
---------------------------------------------------------------------------------------
* Before exceptional items and amortisation of goodwill and intangibles
Restatements relate to the implementation of United Kingdom Financial Reporting
Standard 17 'Retirement Benefits' and changes in our accounting policy for share
option costs (see notes on page 14).
NET PROFIT AND EARNINGS PER SHARE - CURRENT EXCHANGE RATES (unaudited)
Net profit and earnings per share given below are stated at current exchange
rates i.e. the results in both years have been translated at the exchange rates
prevailing during the appropriate period.
For further details of the results at current exchange rates and impact of
exchange rate movements see notes on page 13.
Third Quarter € Millions - current Nine Months
--------------- rates -------------
2003 2002 % Incr./ 2003 2002 % Incr./
----- ------ ---------- ------ ------ ----------
Restated (Decr.) Restated (Decr.)
-------- --------- ---------- ---------
831 755 10% NET PROFIT 2,032 1,884 8%
---------------------------------------------------------------------------------------
1,157 1,105 5% Net profit beia * 2,904 2,994 (3)%
---------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------
COMBINED EARNINGS PER
SHARE
(Current rates)
0.85 0.76 12% - per €0.51 ordinary NV 2.07 1.89 10%
share (Euros)
12.82 11.42 12% - per 1.4p ordinary PLC 31.10 28.31 10%
share (Euro cents)
1.19 1.12 6% - per €0.51 ordinary NV 2.97 3.02 (2)%
share - beia * (Euros)
17.88 16.80 6% - per 1.4p ordinary PLC 44.59 45.33 (2)%
share - beia * (Euro
cents)
0.83 0.74 12% - per €0.51 ordinary NV 2.01 1.83 10%
share - diluted (Euros)
12.46 11.09 12% - per 1.4p ordinary PLC 30.20 27.47 10%
share - diluted (Euro
cents)
---------------------------------------------------------------------------------------
* Before exceptional items and amortisation of goodwill and intangibles
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES (unaudited)
€ Millions - current rates Nine Months
-------------
2003 2002
------ ------
Restated
--------
Net profit 2,032 1,884
Pension gains / (losses) net of tax 61 (1,846)
Currency retranslation 349 (1,651)
--------------------
Total recognised gains/(losses) for the period 2,442 (1,613)
Adjustment related to prior year restatement (1,238) -
--------------------
Total recognised gains / (losses) since last 1,204 (1,613)
annual accounts --------------------
Restatements relate to the implementation of United Kingdom Financial Reporting
Standard 17 'Retirement Benefits' and changes in our accounting policy for share
option costs (see notes on page 14).
MOVEMENTS IN SHAREHOLDERS' EQUITY (unaudited)
€ Millions - current rates Nine Months
-------------
2003 2002
---- -----
Restated
--------
Shareholders' equity as at 1 January (1) 4,629 8,437
Net profit 2,032 1,884
Dividends (577) (568)
Goodwill written back on disposals 143 428
Currency retranslation 391 (1,612)
Change in number of shares or certificates of
shares held in
connection with share options (371) (597)
Pension gains / (losses) net of tax 61 (1,846)
Share option credit 92 70
-------------------
Shareholders' equity as at the end of the period 6,400 6,196
-------------------
SUMMARY BALANCE SHEET (unaudited)
€ Millions - current rates As at 27th As at 31st As at 28th
September December September
2003 2002 2002
------ ------ ------
Restated Restated
-------- --------
Goodwill and intangibles 19,097 20,274 21,422
Other fixed assets 7,212 8,115 8,714
Stocks 4,585 4,500 4,970
Debtors 7,458 6,951 8,065
Cash and current investments 3,027 3,478 4,476
Trade and other creditors (11,127) (11,732) (11,696)
---------------------------------
30,252 31,586 35,951
---------------------------------
Borrowings 17,390 20,444 23,322
Provisions for liabilities and 6,045 5,894 5,752
charges
Minority interests 417 619 681
Capital and reserves 6,400 4,629 6,196
---------------------------------
30,252 31,586 35,951
---------------------------------
Restatements relate to the implementation of United Kingdom Financial Reporting
Standard 17 'Retirement Benefits' and changes in the accounting policy for share
option costs (see notes on page 14).
€ Millions - current rates As at 1st As at 1st
January January
2003 2002
---- ----
(1) Shareholders' equity as previously 5,867 6,993
reported
Change in accounting policy - pensions (1,238) 1,444
----------------------
Shareholders' equity as restated 4,629 8,437
----------------------
CASH FLOW STATEMENT (unaudited)
€ Millions - current rates Nine Months
-------------
2003 2002
---- ----
Cash flow from group operating activities 4,687 5,671
Dividends from joint ventures 27 31
Returns on investments and servicing of finance (829) (1,041)
Taxation (990) (1,427)
Capital expenditure and financial investment (707) (1,313)
Acquisitions and disposals 229 1,484
Dividends paid on ordinary share capital (1,068) (1,025)
CASH INFLOW / (OUTFLOW) BEFORE MANAGEMENT OF 1,349 2,380
LIQUID
RESOURCES AND FINANCING
Management of liquid resources 13 (1,178)
Financing (1,959) (739)
-----------------
INCREASE / (DECREASE) IN CASH IN THE PERIOD (597) 463
-----------------
RECONCILIATION OF CASH FLOW TO MOVEMENT IN NET DEBT (unaudited)
€ Millions - current rates Nine Months
-----------
2003 2002
---- -----
NET DEBT AT 1 JANUARY (16,966) (23,199)
-----------------
INCREASE / (DECREASE) IN CASH IN THE PERIOD (597) 463
Cash flow from (increase) / decrease in 1,964 744
borrowings
Cash flow from increase / (decrease) in liquid (13) 1,178
resources -----------------
Change in net debt resulting from cash flows 1,354 2,385
Borrowings within group companies acquired (26) (77)
Borrowings within group companies sold 5 29
Liquid resources within group companies acquired - -
Liquid resources within group companies sold (3) (1)
Non cash movements 250 1,014
Currency retranslation 1,023 1,003
-----------------
MOVEMENT IN NET DEBT IN THE PERIOD 2,603 4,353
-----------------
NET DEBT AT PERIOD END (14,363) (18,846)
-----------------
GEOGRAPHICAL ANALYSIS (at constant rates - unaudited)
Third Quarter € Millions - constant Nine Months
------------- rates -----------
2003 2002 % Incr./ 2003 2002 % Incr./
---- ---- -------- ---- ---- --------
Restated (Decr.) Restated (Decr.)
12,289 12,289 0% TURNOVER 35,775 36,387 (2)%
----------------------------------------------------------------------------------------
4,908 5,031 (2)% Europe 14,273 14,832 (4)%
3,029 3,146 (4)% North America 8,822 9,502 (7)%
874 858 2% Africa, Middle East and 2,516 2,373 6%
Turkey
2,053 1,932 6% Asia and Pacific 6,000 5,781 4%
1,425 1,322 8% Latin America 4,164 3,899 7%
----------------------------------------------------------------------------------------
2,088 1,967 6% OPERATING PROFIT - beia * 5,519 5,434 2%
----------------------------------------------------------------------------------------
922 858 7% Europe 2,452 2,183 12%
529 539 (2)% North America 1,310 1,550 (16)%
140 104 35% Africa, Middle East and 331 287 15%
Turkey
276 276 0% Asia and Pacific 858 847 1%
221 190 16% Latin America 568 567 0%
----------------------------------------------------------------------------------------
17.0% 16.0% OPERATING MARGIN - beia * 15.4% 14.9%
---------------------------------------------------------------------------
18.8% 17.1% Europe 17.2% 14.7%
17.5% 17.1% North America 14.8% 16.3%
16.0% 12.1% Africa, Middle East and 13.1% 12.1%
Turkey
13.4% 14.3% Asia and Pacific 14.3% 14.6%
15.5% 14.3% Latin America 13.6% 14.5%
---------------------------------------------------------------------------
* Before exceptional items and amortisation of goodwill and intangibles
OPERATIONAL ANALYSIS (at constant rates - unaudited)
Third Quarter € Millions - constant Nine Months
--------------- rates -------------
2003 2002 % Incr./ 2003 2002 % Incr./
---- ---- (Decr.) ---- ---- --------
------------
Restated Restated (Decr.)
-------- --------
12,289 12,289 0% TURNOVER 35,775 36,387 (2)%
------------------------------------------------------------------------------------------------
6,858 7,007 (2)% Foods 20,059 20,569 (2)%
------------------------------------------------------------------------------------------------
2,302 2,310 0% Savoury and dressings 6,892 6,854 1%
1,322 1,475 (10)% Spreads and cooking 3,954 4,521 (13)%
products
1,045 1,078 (3)% Health & wellness and 3,078 3,170 (3)%
beverages
2,189 2,144 2% Ice cream and frozen 6,135 6,024 2%
foods
------------------------------------------------------------------------------------------------
2,018 2,007 1% Home care and 6,000 6,529 (8)%
professional cleaning
3,311 3,139 5% Personal care 9,449 8,931 6%
102 136 (24)% Other operations 267 358 (25)%
------------------------------------------------------------------------------------------------
2,088 1,967 6% OPERATING PROFIT - beia * 5,519 5,434 2%
------------------------------------------------------------------------------------------------
1,246 1,139 9% Foods 3,154 2,935 7%
------------------------------------------------------------------------------------------------
382 355 7% Savoury and dressings 1,084 967 12%
250 223 13% Spreads and cooking 627 676 (7)%
products
159 170 (7)% Health & wellness and 420 427 (1)%
beverages
455 391 16% Ice cream and frozen 1,023 865 18%
foods
------------------------------------------------------------------------------------------------
250 233 8% Home care and 752 766 (2)%
professional cleaning
597 605 (1)% Personal care 1,617 1,714 (6)%
(5) (10) (51)% Other operations (4) 19 (123)%
------------------------------------------------------------------------------------------------
17.0% 16.0% OPERATING MARGIN - beia * 15.4% 14.9%
----------------------------------------------------------------------------------
18.2% 16.3% Foods 15.7% 14.3%
----------------------------------------------------------------------------------
16.6% 15.4% Savoury and dressings 15.7% 14.1%
19.0% 15.1% Spreads and cooking 15.9% 14.9%
products
15.1% 15.7% Health & wellness and 13.6% 13.4%
beverages
20.8% 18.3% Ice cream and frozen 16.7% 14.4%
foods
----------------------------------------------------------------------------------
12.4% 11.6% Home care and 12.5% 11.7%
professional cleaning
18.0% 19.3% Personal care 17.1% 19.2%
(4.7)% (7.3)% Other operations (1.6)% 5.4%
----------------------------------------------------------------------------------
* Before exceptional items and amortisation of goodwill and intangibles
NOTES
Exchange rate conventions and impact of movements in exchange rates
The following exchange rate conventions have been applied:
In the profit and loss account information given on page 7 and the segmental
analysis on pages 11 and 12, the results for 2003 and the comparative figures
for 2002 have been translated at constant exchange rates, being the annual
average exchange rates for 2002. This reporting convention facilitates
comparisons since the impact of exchange rate fluctuations is eliminated, and is
the basis on which we measure our operational performance internally. It also
forms the basis for target setting and the annual outlook statement. For our
reporting currencies these rates were €1 = £0.63 = US $0.94.
The results and earnings per share on page 8 and the cash flow statement on page
10 are translated at rates current in each period. For our reporting currencies
these rates were €1 = £0.69 = US $1.11 for the first nine months of 2003 and €1
= £0.63 = US $0.93 for the first nine months of 2002.
As a result of the strengthening Euro, when expressed at current rates of
exchange, earnings per share (beia) for the nine months decreased by 2% in
Euros, increased by 8% in £ Sterling and increased by 18% in US$.
The balance sheet figures have been translated at period-end rates of exchange.
For our reporting currencies these were €1 = £0.69 = US $1.15 at 27 September
2003, €1 = £0.65 = US $1.05 at 31 December 2002 and €1 = £0.63 = US $0.98 at
28 September 2002.
Results at current rates of exchange
Third Quarter € Millions - current Nine Months
--------------- rates -------------
2003 2002 % Incr. 2003 2002 % Incr.
---- ---- ------- ---- ---- -------
Restated /(Decr.) Restated /(Decr.)
-------- -------- -------- --------
11,122 11,911 (7)% Turnover 32,452 36,904 (12)%
----------------- ------------------
1,568 1,500 5% Operating profit 4,112 4,426 (7)%
-----------------------------------------------------------------------------------------
1,910 1,912 0% Operating profit beia * 5,045 5,508 (8)%
-----------------------------------------------------------------------------------------
8 10 Share of operating profit 2 12
of associates & income
from fixed investments
(230) (246) Interest (including net (764) (821)
interest (cost)/return on
pension scheme assets and
liabilities)
(449) (448) Taxation (1,139) (1,511)
(66) (61) Minority interests (179) (222)
----------------- ------------------
831 755 10% Net profit 2,032 1,884 8%
----------------- ------------------
-----------------------------------------------------------------------------------------
1,157 1,105 5% Net profit beia * 2,904 2,994 (3)%
-----------------------------------------------------------------------------------------
The impact of exchange rate movements on the nine months results at current
exchange rates in Euros, £ Sterling and US $ is given below, along with the year
on year percentage change at constant rates.
Nine Months - Constant rates At current rates of exchange
Millions --------------- ----------------------------
% Incr. € % Incr. £ % Incr. US $ % Incr.
------- - ------- - ------- ---- -------
/(Decr.) 2003 /(Decr.) 2003 /(Decr.) 2003 /(Decr.)
-------- ---- -------- ---- -------- ---- --------
Turnover (2)% 32,452 (12)% 22,372 (3)% 36,054 6%
Operating 2% 5,045 (8)% 3,478 1% 5,605 10%
profit beia *
Net profit 14% 2,032 8% 1,401 19% 2,257 29%
--------------------------------------------------------------------------------------------
Net profit beia* 6% 2,904 (3)% 2,002 7% 3,226 16%
--------------------------------------------------------------------------------------------
% Change in 16% 10% 21% 32%
EPS
--------------------------------------------------------------------------------------------
% Change in EPS 7% (2)% 8% 18%
- beia *
--------------------------------------------------------------------------------------------
* Before exceptional items and amortisation of goodwill and intangibles
Acquisitions and disposals
On 25 July 2003, we announced the sale of our cheese brands and production
facilities in Kempten, Germany to Bongrain of France. The sale includes the
brands Bresso, Milkana, Ramee and Edelweiss and was completed on 31 August 2003.
On 2 September 2003, we announced the sale of the Brut brand of male personal
care products in the Americas to Helen of Troy Limited for US$55 million.
On 14 October 2003, we announced the creation of 'Pepsi Lipton International' a
50:50 joint venture between Unilever and Pepsico, to market and distribute
ready-to-drink tea in several international markets outside North America, which
is already covered by an existing joint venture, the 'Pepsi Lipton Tea
Partnership'.
FRS 17
From 1 January 2003 we have adopted United Kingdom Financial Reporting Standard
17 (FRS 17) 'Retirement Benefits' which requires that pension assets and
liabilities be stated at fair values. 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 and profit and loss accounts.
The implementation of FRS 17 has resulted in a reduction of €1,238 million in
the opening capital and reserves for 2003 (2002: increase of €1,444 million). In
the 2003 opening balance sheet pension liabilities have increased by €1,752
million (2002: decrease of €628 million). Deferred tax within liabilities has
been reduced by €1,785 million (2002: reduction of €1,383 million). The change
in debtors because of changes in pension assets and deferred tax is a net
reduction of €1,280 million in the 2003 opening balance (2002: reduction of €561
million). Minority interests have also been reduced by €9 million (2002:
increase of €6 million).
In the profit and loss account for the first nine months of 2002 operating
profit has increased by €77 million and net interest has decreased by €81
million. Total recognised gains and losses for the first nine months of 2002
have reduced by €1,846 million for actuarial gains and losses and differences
between actual and expected return on pensions plan assets.
Share options
In line with recommendations of various standard setting bodies, from 1 January
2003 we changed our accounting policy for share options. The impact of adoption
of this change has been reflected in all periods covered by this announcement by
means of prior period adjustments to the profit and loss accounts. We have been
hedging our existing share option programmes by buying shares at the time of
grant and taking the financing cost within interest. The accounting change is to
include an additional non cash charge against operating profit to reflect the
full value to the employee of the share options granted. In determining this
charge we are applying a Black-Scholes based valuation spread over the vesting
period of the option.
In the profit and loss account for the first nine months of 2002 operating
profit has been reduced by €70 million, and in the first nine months of 2003 a
charge of €90 million has been included in operating profit.
Interim dividends
The Boards have declared interim dividends in respect of 2003 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 €0.59 (2002: €0.55)
PLC
Per ordinary share 6.16p (2002: 5.21p)
The N.V. interim dividend will be payable as from 1 December 2003, to
shareholders registered at close of business on
29 October 2003.
The PLC interim dividend will be paid on 1 December 2003, to shareholders
registered at close of business on
7 November 2003.
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 28 October 2003, represents US $0.688707 per New York
Share of €0.51* (2002: US $0.540100) before deduction of Netherlands withholding
tax. The New York shares of N.V. will go ex-dividend on 5 November 2003; US
dollar checks for the interim dividend, after deduction of Netherlands
withholding tax at the appropriate rate, will be mailed on 28 November 2003, to
holders of record of New York shares at the close of business on 7 November
2003. The interim dividend will be payable on 1 December 2003.
* 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 24.64p per American Share. When converted at
the Bank of England sterling/dollar rate of exchange on 28 October 2003, the
interim dividend for holders resident in the US will therefore be US $0.4167 per
American Share (2002: US $0.3247).
The American shares of PLC will go ex-dividend on 5 November 2003; US dollar
checks for the interim dividend will be mailed on 28 November 2003 to holders of
record of American shares at the close of business on 7 November 2003. The
interim dividend will be payable on 1 December 2003.
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 year, 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.
Earnings per share in Euro for the nine months
Constant rates Current rates
-------------- -------------
2003 2002 2003 2002
---- ---- ---- ----
Restated Restated
-------- --------
Thousands of units
Average number of 969,730 978,190 969,730 978,190
combined share units of
€0.51
Average number of 6,464,865 6,521,267 6,464,865 6,521,267
combined share units of
1.4p
COMBINED EPS € Millions
------------
Net profit 2,131 1,865 2,032 1,884
Less: Preference (21) (38) (21) (38)
dividends ---------------------------------------------
Net profit attributable 2,110 1,827 2,011 1,846
to ordinary capital ---------------------------------------------
---------------------------------------------
Combined EPS per €0.51 2.18 1.87 2.07 1.89
(Euros)
Combined EPS per 1.4p 32.64 28.03 31.10 28.31
(Euro cents) ---------------------------------------------
COMBINED EPS - beia * € Millions
---------------------
Net profit 2,131 1,865 2,032 1,884
Add back exceptional 71 174 52 175
items net of tax
Add back amortisation of 922 921 820 935
goodwill / intangibles
net of tax ---------------------------------------------
Net profit beia * 3,124 2,960 2,904 2,994
Less: Preference (21) (38) (21) (38)
dividends ---------------------------------------------
Net profit attributable 3,103 2,922 2,883 2,956
to ordinary capital -
beia * ---------------------------------------------
---------------------------------------------
Combined EPS - beia* per 3.20 2.99 2.97 3.02
€0.51 (Euros)
Combined EPS - beia* per 47.99 44.81 44.59 45.33
1.4p (Euro cents) ---------------------------------------------
COMBINED EPS - Diluted Thousands of units
----------------------
Adjusted average 998,908 1,008,251 998,908 1,008,251
combined share units of
€0.51
Adjusted average 6,659,387 6,721,676 6,659,387 6,721,676
combined share units of
1.4p
€ Millions
Net profit attributable 2,110 1,827 2,011 1,846
to ordinary capital ---------------------------------------------
---------------------------------------------
Combined diluted EPS per 2.11 1.81 2.01 1.83
€0.51 (Euros)
Combined diluted EPS per 31.69 27.19 30.20 27.47
1.4p (Euro cents) ---------------------------------------------
* Before exceptional items and amortisation of goodwill and intangibles
Dates
The results for the fourth quarter and for the year 2003 and the proposed final
dividends will be published on Thursday 12 February 2004.
29 October 2003
CONSOLIDATED PROFIT AND LOSS ACCOUNT - CONSTANT EXCHANGE RATES (unaudited)
Note: A description of the exchange rate conventions used is given on page 13.
Third Quarter £ Millions - constant Nine Months
------------- rates -----------
2003 2002 % Incr./ 2003 2002 % Incr./
---- ---- -------- ---- ---- --------
Restated (Decr.) Restated (Decr.)
-------- ------- -------- -------
7,718 7,717 0% TURNOVER 22,467 22,851 (2)%
(44) (72) Less: Share of turnover of (136) (238)
---------------- joint ventures ------------------
7,674 7,645 0% Group turnover 22,331 22,613 (1)%
---------------- ------------------
1,050 950 10% Group operating profit 2,771 2,703 2%
9 14 Add: Share of operating 27 38
---------------- profit of joint ventures ------------------
1,059 964 10% OPERATING PROFIT 2,798 2,741 2%
---------------------------------------------------------------------------------------
1,311 1,235 6% Operating profit beia * 3,466 3,411 2%
(49) (69) Exceptional items (63) (69)
(203) (202) Amortisation of goodwill (605) (601)
and intangibles
---------------------------------------------------------------------------------------
6 8 Share of operating profit 9 16
of associates
- (1) Other income from fixed (7) (8)
investments
(147) (182) Interest (excluding (482) (553)
pension related amounts)
(29) 17 Net interest (cost)/return (89) 51
---------------- on pension scheme assets ------------------
and liabilities
889 806 10% PROFIT BEFORE TAXATION 2,229 2,247 (1)%
(298) (291) Taxation (763) (938)
---------------- ------------------
591 515 15% PROFIT AFTER TAXATION 1,466 1,309 12%
(46) (40) Minority interests (127) (138)
---------------- ------------------
545 475 15% NET PROFIT 1,339 1,171 14%
---------------- ------------------
---------------------------------------------------------------------------------------
784 707 11% Net profit beia * 1,961 1,858 6%
---------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------
COMBINED EARNINGS PER
SHARE
(Constant rates)
8.40 7.18 17% - per 1.4p ordinary PLC 20.50 17.60 16%
share (pence)
12.12 10.75 13% - per 1.4p ordinary PLC 30.14 28.14 7%
share - beia * (pence)
8.15 6.97 17% - per 1.4p ordinary PLC 19.90 17.08 17%
share - diluted (pence)
---------------------------------------------------------------------------------------
* Before exceptional items and amortisation of goodwill and intangibles
Restatements relate to the implementation of United Kingdom Financial Reporting
Standard 17 'Retirement Benefits' and changes in our accounting policy for share
option costs (see notes on page 14).
NET PROFIT AND EARNINGS PER SHARE - CURRENT EXCHANGE RATES (unaudited)
Net profit and earnings per share given below are stated at current exchange
rates i.e. the results in both years have been translated at the exchange rates
prevailing during the appropriate period.
For further details of the results at current exchange rates and impact of
exchange rate movements see notes on page 13.
Third Quarter £ Millions - current Nine Months
------------- rates -----------
2003 2002 % Incr./ 2003 2002 % Incr./
---- ---- -------- ---- ---- --------
Restated (Decr.) Restated (Decr.)
-------- --------- -------- -------
578 478 21% NET PROFIT 1,401 1,180 19%
---------------------------------------------------------------------------------------
805 700 15% Net profit beia * 2,002 1,875 7%
---------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------
COMBINED EARNINGS PER
SHARE
(Current rates)
8.92 7.22 23% - per 1.4p ordinary PLC 21.44 17.73 21%
share (pence)
12.44 10.64 17% - per 1.4p ordinary PLC 30.74 28.39 8%
share - beia * (pence)
8.67 7.01 24% - per 1.4p ordinary PLC 20.82 17.20 21%
share - diluted (pence)
---------------------------------------------------------------------------------------
* Before exceptional items and amortisation of goodwill and intangibles
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES (unaudited)
£ Millions - current rates Nine Months
-----------
2003 2002
---- ----
Restated
--------
Net profit 1,401 1,180
Pension gains / (losses) net of tax 42 (1,156)
Currency retranslation 430 (898)
-------------------
Total recognised gains/(losses) for the period 1,873 (874)
Adjustment related to prior year restatement (805) -
-------------------
Total recognised gains / (losses) since last 1,068 (874)
annual accounts -------------------
Restatements relate to the implementation of United Kingdom Financial Reporting
Standard 17 'Retirement Benefits' and changes in our accounting policy for share
option costs (see notes on page 14).
MOVEMENTS IN SHAREHOLDERS' EQUITY (unaudited)
£ Millions - current rates Nine Months
-----------
2003 2002
---- -----
Restated
--------
Shareholders' equity as at 1 January (1) 3,011 5,154
Net profit 1,401 1,180
Dividends (398) (355)
Goodwill written back on disposals 98 268
Currency retranslation 463 (865)
Change in number of shares or certificates of
shares held in
connection with share options (256) (374)
Pension gains / (losses) net of tax 42 (1,156)
Adjustment to cost of share options 63 44
------------------
Shareholders' equity as at the end of the period 4,424 3,896
------------------
SUMMARY BALANCE SHEET (unaudited)
£ Millions - current rates As at 27th As at 31st As at 28th
September December September
2003 2002 2002
----- ---- ----
Restated Restated
-------- --------
Goodwill and intangibles 13,202 13,188 13,470
Other fixed assets 4,985 5,279 5,479
Stocks 3,170 2,927 3,125
Debtors 5,156 4,522 5,071
Cash and current investments 2,093 2,263 2,814
Trade and other creditors (7,693) (7,632) (7,353)
--------------------------------
20,913 20,547 22,606
--------------------------------
Borrowings 12,022 13,299 14,665
Provisions for liabilities and 4,179 3,834 3,617
charges
Minority interests 288 403 428
Capital and reserves 4,424 3,011 3,896
--------------------------------
20,913 20,547 22,606
--------------------------------
Restatements relate to the implementation of United Kingdom Financial Reporting
Standard 17 'Retirement Benefits' and changes in our accounting policy for share
option costs (see notes on page 14).
£ Millions - current rates As at 1st As at 1st
January January
2003 2002
---- ----
(1) Shareholders' equity as previously 3,816 4,272
reported
Change in accounting policy - pensions (805) 882
----------------------
Shareholders' equity as restated 3,011 5,154
----------------------
CASH FLOW STATEMENT (unaudited)
£ Millions - current rates Nine Months
-----------
2003 2002
---- ----
Cash flow from group operating activities 3,229 3,551
Dividends from joint ventures 18 19
Returns on investments and servicing of finance (570) (652)
Taxation (682) (893)
Capital expenditure and financial investment (487) (823)
Acquisitions and disposals 158 929
Dividends paid on ordinary share capital (736) (642)
-----------------
CASH INFLOW/(OUTFLOW) BEFORE MANAGEMENT OF LIQUID
RESOURCES AND FINANCING 930 1,489
Management of liquid resources 8 (737)
Financing (1,350) (463)
-----------------
INCREASE / (DECREASE) IN CASH IN THE PERIOD (412) 289
-----------------
RECONCILIATION OF CASH FLOW TO MOVEMENT IN NET DEBT (unaudited)
£ Millions - current rates Nine Months
-----------
2003 2002
---- ----
NET DEBT AT 1 JANUARY (11,036) (14,173)
------------------
INCREASE / (DECREASE) IN CASH IN THE PERIOD (412) 289
Cash flow from (increase)/decrease in borrowings 1,353 466
Cash flow from increase/(decrease) in liquid (8) 737
resources ------------------
Change in net debt resulting from cash flows 933 1,492
Borrowings within group companies acquired (18) (48)
Borrowings within group companies sold 3 18
Liquid resources within group companies acquired - -
Liquid resources within group companies sold (2) (1)
Non cash movements 172 635
Currency retranslation 19 226
------------------
MOVEMENT IN NET DEBT IN THE PERIOD 1,107 2,322
------------------
NET DEBT AT PERIOD END (9,929) (11,851)
------------------
GEOGRAPHICAL ANALYSIS (at constant rates - unaudited)
Third Quarter £ Millions - constant Nine Months
--------------- rates -------------
2003 2002 % Incr./ 2003 2002 % Incr./
------ ------ ---------- ------ ------ ----------
Restated (Decr.) Restated (Decr.)
7,718 7,717 0% TURNOVER 22,467 22,851 (2)%
---------------------------------------------------------------------------------------
3,082 3,159 (2)% Europe 8,963 9,315 (4)%
1,902 1,976 (4)% North America 5,540 5,967 (7)%
550 539 2% Africa, Middle East and 1,581 1,490 6%
Turkey
1,289 1,213 6% Asia and Pacific 3,768 3,631 4%
895 830 8% Latin America 2,615 2,448 7%
---------------------------------------------------------------------------------------
1,311 1,235 6% OPERATING PROFIT - beia * 3,466 3,411 2%
---------------------------------------------------------------------------------------
579 540 7% Europe 1,540 1,370 12%
332 338 (2)% North America 822 973 (16)%
88 65 35% Africa, Middle East and 208 180 15%
Turkey
173 173 0% Asia and Pacific 539 532 1%
139 119 16% Latin America 357 356 0%
---------------------------------------------------------------------------------------
17.0% 16.0% OPERATING MARGIN - beia * 15.4% 14.9%
--------------------------------------------------------------------------
18.8% 17.1% Europe 17.2% 14.7%
17.5% 17.1% North America 14.8% 16.3%
16.0% 12.1% Africa, Middle East and 13.1% 12.1%
Turkey
13.4% 14.3% Asia and Pacific 14.3% 14.6%
15.5% 14.3% Latin America 13.6% 14.5%
--------------------------------------------------------------------------
* Before exceptional items and amortisation of goodwill and intangibles
OPERATIONAL ANALYSIS (at constant rates - unaudited)
Third Quarter £ Millions - constant Nine Months
--------------- rates -------------
2003 2002 % Incr./ 2003 2002 % Incr./
---- ---- (Decr.) ---- ---- ----------
------------
Restated Restated (Decr.)
-------- --------
7,718 7,717 0% TURNOVER 22,467 22,851 (2)%
-----------------------------------------------------------------------------------------------
4,307 4,400 (2)% Foods 12,597 12,917 (2)%
-----------------------------------------------------------------------------------------------
1,445 1,451 0% Savoury and dressings 4,328 4,305 1%
830 926 (10)% Spreads and cooking 2,483 2,840 (13)%
products
657 677 (3)% Health & wellness and 1,933 1,990 (3)%
beverages
1,375 1,346 2% Ice cream and frozen 3,853 3,782 2%
foods
-----------------------------------------------------------------------------------------------
1,267 1,261 1% Home care and 3,768 4,101 (8)%
professional cleaning
2,079 1,971 5% Personal care 5,934 5,608 6%
65 85 (24)% Other operations 168 225 (25)%
-----------------------------------------------------------------------------------------------
1,311 1,235 6% OPERATING PROFIT - beia * 3,466 3,411 2%
-----------------------------------------------------------------------------------------------
783 715 9% Foods 1,981 1,843 7%
-----------------------------------------------------------------------------------------------
239 222 7% Savoury and dressings 680 607 12%
158 140 13% Spreads and cooking 394 424 (7)%
products
100 107 (7)% Health & wellness and 264 268 (1)%
beverages
286 246 16% Ice cream and frozen 643 544 18%
foods
-----------------------------------------------------------------------------------------------
157 146 8% Home care and 473 481 (2)%
professional cleaning
374 380 (1)% Personal care 1,015 1,075 (6)%
(3) (6) (51)% Other operations (3) 12 (123)%
-----------------------------------------------------------------------------------------------
17.0% 16.0% OPERATING MARGIN - beia * 15.4% 14.9%
---------------------------------------------------------------------------------
18.2% 16.3% Foods 15.7% 14.3%
---------------------------------------------------------------------------------
16.6% 15.4% Savoury and dressings 15.7% 14.1%
19.0% 15.1% Spreads and cooking 15.9% 14.9%
products
15.1% 15.7% Health & wellness and 13.6% 13.4%
beverages
20.8% 18.3% Ice cream and frozen 16.7% 14.4%
foods
---------------------------------------------------------------------------------
12.4% 11.6% Home care and 12.5% 11.7%
professional cleaning
18.0% 19.3% Personal care 17.1% 19.2%
(4.7)% (7.3)% Other operations (1.6)% 5.4%
---------------------------------------------------------------------------------
* Before exceptional items and amortisation of goodwill and intangibles
Earnings per share in Sterling for the nine months
Constant rates Current rates
---------------- ---------------
2003 2002 2003 2002
------ ------ ------ ------
Restated Restated
---------- ----------
Thousands of units
Average number of 6,464,865 6,521,267 6,464,865 6,521,267
combined share units of
1.4p
COMBINED EPS £ Millions
--------------
Net profit 1,339 1,171 1,401 1,180
Less: Preference (13) (24) (15) (24)
dividends -----------------------------------------------
Net profit attributable 1,326 1,147 1,386 1,156
to ordinary capital -----------------------------------------------
-----------------------------------------------
Combined EPS per 1.4p 20.50 17.60 21.44 17.73
-----------------------------------------------
COMBINED EPS - beia * £ Millions
-----------------------
Net profit 1,339 1,171 1,401 1,180
Add back exceptional 44 109 36 109
items net of tax
Add back amortisation of 578 578 565 586
goodwill / intangibles -----------------------------------------------
net of tax
Net profit beia * 1,961 1,858 2,002 1,875
Less: Preference (13) (24) (15) (24)
dividends -----------------------------------------------
Net profit attributable 1,948 1,834 1,987 1,851
to ordinary capital - -----------------------------------------------
beia *
-----------------------------------------------
Combined EPS - beia * 30.14 28.14 30.74 28.39
per 1.4p -----------------------------------------------
COMBINED EPS - Diluted Thousands of units
------------------------
Adjusted average 6,659,387 6,721,676 6,659,387 6,721,676
combined share units of
1.4p
£ Millions
Net profit attributable 1,326 1,147 1,386 1,156
to ordinary capital -----------------------------------------------
-----------------------------------------------
Combined diluted EPS per 19.90 17.08 20.82 17.20
1.4p -----------------------------------------------
* Before exceptional items and amortisation of goodwill and intangibles
This information is provided by RNS
The company news service from the London Stock Exchange
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