Financial Express (Holdings) Limited (“we”, “our”, “us” and derivatives) are committed to protecting and respecting your privacy. This Privacy Policy, together with our Terms of Use, sets out the basis on which any personal data that we collect from you, or that you provide to us, will be processed by us relating to your use of any of the below websites (“sites”).

  • FEAnalytics.com
  • FEInvest.net
  • FETransmission.com
  • Investegate.co.uk
  • Trustnet.hk
  • Trustnetoffshore.com
  • Trustnetmiddleeast.com

For the purposes of the Data Protection Act 1998, the data controller is Trustnet Limited of 2nd Floor, Golden House, 30 Great Pulteney Street, London, W1F 9NN. Our nominated representative for the purpose of this Act is Kirsty Witter.

WHAT INFORMATION DO WE COLLECT ABOUT YOU?

We collect information about you when you register with us or use any of our websites / services. Part of the registration process may include entering personal details & details of your investments.

We may collect information about your computer, including where available your operating system, browser version, domain name and IP address and details of the website that you came from, in order to improve this site.

You confirm that all information you supply is accurate.

COOKIES

In order to provide personalised services to and analyse site traffic, we may use a cookie file which is stored on your browser or the hard drive of your computer. Some of the cookies we use are essential for the sites to operate and may be used to deliver you different content, depending on the type of investor you are.

You can block cookies by activating the setting on your browser which allows you to refuse the setting of all or some cookies. However, if you use your browser settings to block all cookies (including essential cookies) you may not be able to access all or part of our sites. Unless you have adjusted your browser setting so that it will refuse cookies, our system will issue cookies as soon as you visit our sites.

HOW WE USE INFORMATION

We store and use information you provide as follows:

  • to present content effectively;
  • to provide you with information, products or services that you request from us or which may interest you, tailored to your specific interests, where you have consented to be contacted for such purposes;
  • to carry out our obligations arising from any contracts between you and us;
  • to enable you to participate in interactive features of our service, when you choose to do so;
  • to notify you about changes to our service;
  • to improve our content by tracking group information that describes the habits, usage, patterns and demographics of our customers.

We may also send you emails to provide information and keep you up to date with developments on our sites. It is our policy to have instructions on how to unsubscribe so that you will not receive any future e-mails. You can change your e-mail address at any time.

In order to provide support on the usage of our tools, our support team need access to all information provided in relation to the tool.

We will not disclose your name, email address or postal address or any data that could identify you to any third party without first receiving your permission.

However, you agree that we may disclose to any regulatory authority to which we are subject and to any investment exchange on which we may deal or to its related clearing house (or to investigators, inspectors or agents appointed by them), or to any person empowered to require such information by or under any legal enactment, any information they may request or require relating to you, or if relevant, any of your clients.

You agree that we may pass on information obtained under Money Laundering legislation as we consider necessary to comply with reporting requirements under such legislation.

ACCESS TO YOUR INFORMATION AND CORRECTION

We want to ensure that the personal information we hold about you is accurate and up to date. You may ask us to correct or remove information that is inaccurate.

You have the right under data protection legislation to access information held about you. If you wish to receive a copy of any personal information we hold, please write to us at 3rd Floor, Hollywood House, Church Street East, Woking, GU21 6HJ. Any access request may be subject to a fee of £10 to meet our costs in providing you with details of the information we hold about you.

WHERE WE STORE YOUR PERSONAL DATA

The data that we collect from you may be transferred to, and stored at, a destination outside the European Economic Area (“EEA”). It may be processed by staff operating outside the EEA who work for us or for one of our suppliers. Such staff may be engaged in, amongst other things, the provision of support services. By submitting your personal data, you agree to this transfer, storing and processing. We will take all steps reasonably necessary, including the use of encryption, to ensure that your data is treated securely and in accordance with this privacy policy.

Unfortunately, the transmission of information via the internet is not completely secure. Although we will do our best to protect your personal data, we cannot guarantee the security of your data transmitted to our sites; any transmission is at your own risk. You will not hold us responsible for any breach of security unless we have been negligent or in wilful default.

CHANGES TO OUR PRIVACY POLICY

Any changes we make to our privacy policy in the future will be posted on this page and, where appropriate, notified to you by e-mail.

OTHER WEBSITES

Our sites contain links to other websites. If you follow a link to any of these websites, please note that these websites have their own privacy policies and that we do not accept any responsibility or liability for these policies. Please check these policies before you submit any personal data to these websites.

CONTACT

If you want more information or have any questions or comments relating to our privacy policy please email publishing@financialexpress.net in the first instance.

 Information  X 
Enter a valid email address

Unilever PLC (ULVR)

  Print      Mail a friend       Annual reports

Thursday 26 July, 2012

Unilever PLC

2nd Quarter Results 2012

RNS Number : 5334I
Unilever PLC
26 July 2012
 



                       

2012 FIRST HALF YEAR RESULTS

CONSISTENT PERFORMANCE SUSTAINED DESPITE CHALLENGING MARKETS

 

First half highlights

·    Turnover up 11.5% at €25.4 billion with a positive impact from foreign exchange of 1.9% and acquisitions net of disposals of 2.2%.

 

·    First half underlying sales growth 7.0% comprising volume growth of 2.8% and price growth of 4.1%. Second quarter underlying sales growth of 5.8%.

 

·    Emerging markets underlying sales growth up 11.4% in the first half; up 11.0% in the second quarter.

 

·    Core operating margin flat; increased advertising and promotions investment behind our brands.

 

·    Core earnings per share up 6% at €0.76; free cash flow at €1.5 billion.

 

Paul Polman: Chief Executive Officer statement

 

"Solid and consistent first half results provide further evidence that we are making progress in the transformation of Unilever to a sustainable growth company.

 

Despite deteriorating global economic conditions and a competitive environment which remains intense, we again delivered volume growth ahead of our markets and gained value share across the majority of our business. Our performance reflects continued investment in innovation, brand-building and people, whilst keeping discipline on both costs and execution.

 

The Unilever Sustainable Living Plan is increasingly bearing fruit by accelerating innovation and helping us build stronger relationships with consumers, customers and communities, energising our people and reducing costs. It lies at the heart of our strategy to double the size of the business whilst reducing our overall environmental footprint.

 

We continue to prepare the ground for future growth. The first half saw the completion of the acquisition of Concern Kalina, Russia's leading local personal care business, Tresemmé made excellent progress in Brazil and we launched Magnum in the Philippines, all evidence that we are further strengthening our position as the emerging markets consumer goods company. We are also investing in developed markets: during the first half we successfully launched Clear in the United States and Axe Hair in Europe.

 

Looking forward we expect continued volatility, especially in commodity costs and economic conditions. We remain focused on profitable volume growth ahead of our markets, steady and sustainable core operating margin improvement and strong cash flow, driven by increased capital discipline. For 2012 we remain on track to deliver a modest improvement in core operating margin."

 

Key Financials (unaudited)

Current Rates

First Half 2012

Underlying Sales Growth (*)

7.0%

Turnover

€25.4bn

+11.5%

Operating Profit

€3.4bn

+4%

Net Profit

€2.4bn

+1%

Core earnings per share (*)

€0.76

+6%

Diluted earnings per share

€0.75

-3%

Quarterly dividend payable in September 2012           €0.243 per share

 

 

 (*) Underlying sales growth and core earnings per share are non-GAAP measures see note 2 on page 12.                26 July 2012


OPERATIONAL REVIEW: CATEGORIES

 

 
Second Quarter 2012
First Half 2012
(unaudited)
Turnover
USG
UVG
UPG
Turnover 
USG
UVG
UPG
Change in core operating margin
 
€bn
%
%
%
€bn
%
%
%
bps
Unilever Total
13.3
5.8
2.2
3.5
25.4
7.0
2.8
4.1
0
Personal Care
4.5
10.4
7.2
3.0
8.7
10.4
6.7
3.5
(140)
Foods
3.6
0.6
(2.4)
3.1
7.1
3.2
(1.0)
4.2
50
Home Care
2.2
9.6
5.9
3.5
4.4
9.8
5.3
4.3
50
Refreshment
3.1
3.2
(1.4)
4.7
5.2
4.9
0.3
4.5
70

 

The first half results reflect a strong performance in markets that remain challenging. Consumer confidence remains fragile and the competitive environment intense. The value growth of our markets is driven largely by pricing and reflects the combination of strong growth in emerging markets and sluggish growth in the developed markets where volume growth continues to be negative.

 

In this context, all of our Categories grew, driven by strong innovations and the roll-out of our brands into new markets. As expected, second quarter growth was lower than the first quarter which benefited from the extra leap year day and Easter falling earlier than in 2011. Emerging markets continued to deliver double digit underlying sales growth, reaching 11.4% over the first half year. Dove continues to grow strongly, with annual turnover now in excess of €3 billion whilst Magnum is well on track to become a €1 billion brand.

 

Higher commodity costs were partially offset by increased prices and our disciplined savings programmes. Gross margins declined by 40bps, albeit on an improving trend, to 39.7% at constant exchange rates. We continued to invest strongly behind our brands and the level of advertising and promotions increased by 10bps. Tight control over overhead costs led to a reduction of 50bps, including a reduction of 20bps in business restructuring. Core operating margin was therefore flat at 13.7% in the first half.

 

Personal Care

Hair delivered strong double digit growth driven by Dove, with the continuing success of Dove Damage Therapy, and Clear, benefiting from the continuing success of its relaunch as a premium scalp expert. The expansion of our brands into new markets is also contributing strongly, with the launch of Clear in the United States, Tresemmé in Brazil, Dove Hair in the Philippines, and the introduction of Axe Hair in Europe.

 

Skin cleansing delivered strong growth ahead of our markets, with Dove, Lux and Lifebuoy all performing well. Dove benefited from the continuing success of Nutrium Moisture shower gels and the Dove Men+Care range, which was recently extended to Brazil. Dove bars were launched in Indonesia and Lifebuoy Clini-Care 10 has made an excellent start in India. In skin care, the launch of Simple in the United States is making good progress and Vaseline maintained strong momentum, underpinned by the success of the Total Moisture range. Concern Kalina in Russia is performing well.

 

Deodorants growth reflected a good performance from Dove on the back of successful innovations and consistent advertising and a good performance from Axe Anarchy. Oral care growth was mid-single digit, reflecting in-market activities which are weighted to the second half. In the second quarter our new Expert Protection range was launched under the Signal brand in France and under the Pepsodent brand in India.

 

Core operating margin was down 140bps, primarily due to lower gross margins and the phasing of marketing investments.

 

Foods

Savoury growth was underpinned by strong performances in Knorr cooking products and soups. Knorr jelly bouillon continued to grow as we supported the latest innovation, gravy, and through successful market development programmes such as the "Steak Challenge" initiative in Latin America. Knorr baking bags also delivered good growth and are now available in 40 countries. Our Food Solutions business, which serves professional chefs, is helping drive savoury growth by working with our customers to create healthy menus and through the "wise up on waste" initiatives, working with chefs to reduce energy consumption and food wastage.

 

In spreads we have increased prices to keep pace with significant commodity cost inflation and this impacted volumes in the second quarter. We delivered positive growth in the first half and we continued to innovate with the successful Latta aerated product now launched in the Netherlands. Liquid margarines continued to do well in Europe. Dressings delivered another quarter of growth, reflecting a strong performance by Hellmann's in Latin America driven by the 'Inspire' campaign to encourage new uses of mayonnaise.

 

Core operating margin was up 50bps, reflecting lower gross margin more than compensated by lower overheads.

 

Home Care

Laundry grew ahead of our markets, reflecting the success of our innovations and the actions taken to improve the product performance. Omo has been re-formulated to deliver faster stain removal and is already available in nine countries. Comfort Anti-Bacterial has been launched in Indonesia and Vietnam.

 

Household care growth reflected the strong performance of Sunlight hand dishwash. Sunlight was relaunched with an improved degreasing formulation in Vietnam, Indonesia and Malaysia. Domestos was launched in the Gulf, including Saudi Arabia. Cif was launched in Mexico and was extended to affordable pouches in Indonesia.

 

Core operating margin was up 50bps, primarily due to lower overheads.

 

Refreshment

Ice cream performed well in the quarter despite the adverse weather conditions in northern Europe and the high prior year comparator. This reflects good progress in expanding our global footprint. Magnum delivered high single-digit growth, building on the successful launch in the United States with the introduction of Magnum Minis, and with the recent launch of Magnum in the Philippines and Thailand. Cornetto also grew strongly on the back of the Angels & Devils innovation and a successful digital campaign in China. Ben & Jerry's opened its first premium ice cream shop in Japan.

 

Beverages saw a strong performance in Africa and the Middle East, improved performance in Russia driven by the Lipton re-launch and a good initial response to the launch of Lipton Tea & Honey powdered ready-to-drink tea sachets in the United States.

 

The 70bps improvement in core operating margin was driven by lower overheads.

 

OPERATIONAL REVIEW: GEOGRAPHIES

 

 
Second Quarter 2012
First Half 2012
(unaudited)
Turnover
USG
UVG
UPG
Turnover
USG
UVG
UPG
Change in core operating margin
 
€bn
%
%
%
€bn
%
%
%
bps
Unilever Total
13.3
5.8
2.2
3.5
25.4
7.0
2.8
4.1
0
Asia/AMET/RUB
5.2
10.7
5.8
4.7
10.0
11.0
5.4
5.3
80
The Americas
4.4
7.5
2.7
4.7
8.5
7.7
2.0
5.6
(30)
Europe
3.7
(2.2)
(2.7)
0.5
6.9
1.1
0.3
0.7
(80)

 

 

Asia/AMET/RUB

The second quarter saw another strong performance with a fourth consecutive quarter of double digit growth. This growth, ahead of our markets, reflected a good balance between price and volume and was driven by strong performances in India, Turkey, Indonesia and Vietnam. Growth rates in Russia continued to improve with a strong contribution from the recently acquired Concern Kalina business. Thailand is recovering well after the floods late in 2011 and the business is back to healthy growth rates. The regional SAP platform was successfully implemented in Central Africa during the quarter.

 

Core operating margin was up 80bps, benefiting from higher prices and lower overheads.

 

The Americas 

North America grew at 3.3% in the quarter and 4.1% in the half year, driven by increased price. Volumes were slightly negative with positive growth in Personal Care more than offset by declines in Foods, most notably spreads.

 

Latin America growth in the quarter accelerated to 12.2%, achieving 11.6% in the half year, with a good balance between volume and price. Brazil, Argentina and Colombia all performed well. The integration of the newly acquired laundry business in Colombia is progressing to plan.

 

Core operating margin, down 30bps, was driven by the increase in advertising and promotions expenditure.

 

Europe

Growth in the first half of 1.1% with stable volume is a creditable performance given continued sluggish economies and fragile consumer confidence. Whilst volumes in the quarter were negative, this was no surprise given the high prior year comparator and the impact of the poor summer weather in northern Europe on the ice cream business. Taking the first half overall, we grew volumes ahead of our markets and gained value share. We saw continuing good performances in France and the UK.

 

Core operating margin was down 80bps, mainly due to the impact of higher commodity costs.

 

ADDITIONAL COMMENTARY ON THE FINANCIAL STATEMENTS - FIRST HALF 2012

 

Finance costs and tax                      

 

The cost of financing net borrowings in the first half 2012 was €201 million versus €195 million in 2011.  Whilst the average level of net debt increased, interest rate movements were favourable: the average interest rate on borrowings was 3.7% and the average return on cash deposits was 3.4%. Pensions financing was a debit of €5 million compared with a credit of €30 million in the prior year.

 

The effective tax rate was 26.1%, the same as 2011. Our longer-term expectation for the tax rate remains around 26%.

 

Joint ventures, associates and other income from non-current investments

 

Net profit from joint ventures and associates, together with other income from non-current investments contributed €49 million compared to €87 million in 2011. The income from joint ventures and associates was broadly stable. Income from non-current investments fell, mainly due to the impairment of warrants associated with the disposal of the US laundry business in the current year versus a prior year positive fair value adjustment for warrants associated with the disposal of Johnson Diversey.

 

Earnings per share

 

Core earnings per share for the first half was up 6% at €0.76, driven by the improvement in core operating profit, partially offset by higher minority interests. This measure excludes the impact of business disposals, acquisition and disposal related costs, impairments and other one-off items.

 

Fully diluted earnings per share for the first half was down 3% at €0.75. Higher core operating profit and positive currency were offset by lower profits from business disposals and lower one-off items, principally the pension credit in the prior year.

 

Restructuring and disposals

 

Business restructuring spend in the first half was 90bps of turnover, 20bps lower than the same period in 2011. We continue to expect full year business restructuring, expressed as a percentage of turnover, to be at a similar level to 2011. This reflects our determination to make the business fit to compete in the current environment and excludes the restructuring associated with acquisitions and disposals.

 

Acquisitions-related one-off costs and restructuring amounted to €48 million, significantly lower than the €101 million in 2011 and mainly relating to the integration of Alberto Culver. Business disposals contributed €10 million, lower than the €144 million in 2011 which reflected the disposal of our Brazilian tomatoes business.

 

Free cash flow and net debt

 

Free cash flow was €1.5 billion, up from €0.8 billion in 2011. This is mainly due to improved trade working capital performance. Trade working capital as a percentage of sales has now been negative for eleven consecutive quarters.

 

Closing net debt at €9.2 billion was up from €8.8 billion as at 31 December 2011. The outflow from dividends, acquisitions and the negative impact of foreign exchange rates on net debt together exceeded free cash flow.

 

Closing cash and cash equivalents was €4.1 billion, up from €3.5 billion as at 31 December 2011. This largely reflects a cautious approach in the context of the ongoing volatility in financial markets.

 

Pensions

 

The net pensions deficit was €4.1 billion at the end of June 2012 versus €3.2 billion at the end of 2011. This is mainly due to an increase in liabilities resulting from the decrease in discount rates over the period. Cash expenditure on pensions was €305 million and is still expected to be around €700 million in 2012.

 

Principal risk factors

 

On pages 28 to 32 of our 2011 Report and Accounts we set out our assessment of the principal risk issues that would face the business through 2012 under the headings: consumer preference; competition; portfolio management; sustainability; customer relationships; people; supply chain; systems and information; business transformation; external economic and political risks, and natural disasters; financial; ethical and legal, regulatory and other risks. In our view, the nature and potential impact of such risks remain essentially unchanged as regards our performance over the second half of 2012.

 

Other information

 

This document represents Unilever's half-yearly report for the purposes of the Disclosure and Transparency Rules (DTR) issued by the UK Financial Services Authority (DTR 4.2) and the Dutch Act on Financial Supervision, section 5:25d (8)/(9) (Half-yearly financial reports). In this context: (i) the condensed set of financial statements can be found on pages 7 to 17; (ii) pages 2 to 6 comprise the interim management report; and (iii) the Directors' responsibility statement can be found on page 18. No material related parties transactions have taken place in the first six months of the year.

 

 

CAUTIONARY STATEMENT

 

This announcement may contain forward-looking statements, including 'forward-looking statements' within the meaning of the United States Private Securities Litigation Reform Act of 1995. Words such as 'will', 'aim', 'expects', 'anticipates', 'intends', 'believes', 'vision', or the negative of these terms and other similar expressions of future performance or results, and their negatives, are intended to identify such forward-looking statements. These forward-looking statements are based upon current expectations and assumptions regarding anticipated developments and other factors affecting the Group. They are not historical facts, nor are they guarantees of future performance.

Because these forward-looking statements involve risks and uncertainties, there are important factors that could cause actual results to differ materially from those expressed or implied by these forward-looking statements. Among other risks and uncertainties, the material or principal factors which could cause actual results to differ materially are; Unilever's global brands not meeting consumer preferences; increasing competitive pressures; Unilever's investment choices in its portfolio management; finding sustainable solutions to support long-term growth; customer relationships; the recruitment and retention of talented employees; disruptions in our supply chain; the cost of raw materials and commodities; secure and reliable IT infrastructure; successful execution of acquisitions, divestitures and business transformation projects; economic and political risks and national disasters; the sovereign debt crisis in Europe; financial risks; and failure to meet high product safety and ethical standards; managing regulatory, tax and legal matters. Further details of potential risks and uncertainties affecting the Group are described in the Group's filings with the London Stock Exchange, Euronext Amsterdam and the US Securities and Exchange Commission, including the Group's Annual Report on Form 20-F for the year ended 31 December 2011 and the Annual Report and Accounts 2011. These forward-looking statements speak only as of the date of this announcement. Except as required by any applicable law or regulation, the Group expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Group's expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.

ENQUIRIES

 

Media: Media Relations Team

Investors: Investor Relations Team 

UK +44 20 7822 6719  trevor.gorin@unilever.com

+44 20 7822 6830 investor.relations@unilever.com

NL +31 10 217 4844    flip.dotsch@unilever.com


 

There will be a web cast of the results presentation available at:

www.unilever.com/ourcompany/investorcentre/results/quarterlyresults/default.asp

 

The web cast can also be viewed from the Unilever Investor Relations app which you can download from:

http://itunes.apple.com/us/app/unilever-investor-centre-app/id483403509?mt=8&ign-mpt=uo%3D4

 

INCOME STATEMENT

(unaudited)

 

€ million

First Half

2012

2011

Increase/
(Decrease)

Current

rates

Constant

rates






Turnover

25,398

22,788

11.5%

9.3%






Operating profit

3,429

3,308

4%

2%

 After (charging)/crediting non-core items

(38)

194








Net finance costs

(206)

(165)



   Finance income

82

42



   Finance costs

(283)

(237)



   Pensions and similar obligations

(5)

30








Share of net profit/(loss) of joint ventures and associates

60

64



Other income/(loss) from non-current investments

(11)

23








Profit before taxation

3,272

3,230

1%

0%






Taxation

(837)

(825)








Net profit

 

2,435

2,405

1%

0%

Attributable to:





     Non-controlling interests

254

170



     Shareholders' equity

2,181

2,235

(2)%

(4)%

 

 

Combined earnings per share

     Basic earnings per share (euros)

0.77

0.79

(3)%

(4)%

     Diluted earnings per share (euros)

0.75

0.77

(3)%

(4)%

 

 

 

STATEMENT OF COMPREHENSIVE INCOME

(unaudited)

 

€ million

First Half


2012

2011

 

Net profit

2,435

2,405




Other comprehensive income



Fair value gains/(losses) on financial instruments net of tax

(69)

(57)

Actuarial gains/(losses) on pension schemes net of tax

(722)

95

Currency retranslation gains/(losses) net of tax

(204)

(270)

Total comprehensive income

1,440

2,173




Attributable to:



     Non-controlling interests

242

132

     Shareholders' equity

1,198

2,041

 

 

 

STATEMENT OF CHANGES IN EQUITY

(unaudited)

 

€ million

First Half


2012

2011

 

Equity at 1 January

14,921

15,078

Total comprehensive income for the period

1,440

2,173

Dividends on ordinary capital

(1,323)

(1,221)

Movement in treasury stock

31

(43)

Share-based payment credit

66

66

Dividends paid to non-controlling interests

(99)

(93)

Currency retranslation gains/(losses) net of tax

1

(10)

Other movements in equity

(89)

(94)

Equity at the end of the period

14,948

15,856

 

 

BALANCE SHEET

(unaudited)

 

€ million

As at

30 June

2012

As at

31 December

2011

As at

30 June

2011





Non-current assets




Goodwill

15,012

14,896

14,133

Intangible assets

7,249

7,017

6,124

Property, plant and equipment

9,113

8,774

8,018

Pension asset for funded schemes in surplus

599

1,003

1,130

Deferred tax assets

366

421

235

Financial assets

574

478

493

Other non-current assets

562

632

548


33,475

33,221

30,681





Current assets




Inventories

5,003

4,601

4,633

Trade and other current receivables

5,462

4,513

5,421

Current tax assets

702

219

231

Cash and cash equivalents

4,097

3,484

2,332

Other financial assets

564

1,453

568

Non-current assets held for sale

143

21

169


15,971

14,291

13,354





Total assets

49,446

47,512

44,035





Current liabilities




Financial liabilities

6,564

5,840

3,153

Trade payables and other current liabilities

11,977

10,971

10,849

Current tax liabilities

1,474

725

650

Provisions

352

393

395

Liabilities associated with assets held for sale

-

-

32


20,367

17,929

15,079





Non-current liabilities




Financial liabilities

7,248

7,878

7,852

Non-current tax liabilities

188

258

200

Pensions and post-retirement healthcare liabilities:




      Funded schemes in deficit

2,685

2,295

932

      Unfunded schemes

1,981

1,911

1,746

Provisions

962

908

887

Deferred tax liabilities

725

1,125

1,219

Other non-current liabilities

342

287

264


14,131

14,662

13,100





Total liabilities

34,498

32,591

28,179





Equity




Shareholders' equity

14,234

14,293

15,275

Non-controlling interests

714

628

581

Total equity

14,948

14,921

15,856





Total liabilities and equity

49,446

47,512

44,035

 

CASH FLOW STATEMENT

(unaudited)

 

€ million

First Half


2012

2011




Net profit

2,435

2,405

Taxation

837

825

Share of net profit of joint ventures/associates and other income



    from non-current investments

(49)

(87)

Net finance costs

206

165

Operating profit

3,429

3,308




Depreciation, amortisation and impairment

582

505

Changes in working capital

(488)

(1,191)

Pensions and similar obligations less payments

(163)

(240)

Provisions less payments

38

97

Elimination of (profits)/losses on disposals

(128)

(132)

Non-cash charge for share-based compensation

66

66

Other adjustments

4

10

Cash flow from operating activities

3,340

2,423




Income tax paid

(801)

(552)




Net cash flow from operating activities

2,539

1,871




Interest received

81

43

Net capital expenditure

(826)

(906)

Acquisitions and disposals

(94)

(1,381)

Other investing activities

996

(43)




Net cash flow (used in)/from investing activities

157

(2,287)




Dividends paid on ordinary share capital

(1,324)

(1,220)

Interest and preference dividends paid

(257)

(204)

Change in financial liabilities

(13)

1,695

Other movements on treasury stock

31

(48)

Other financing activities

(85)

(208)




Net cash flow (used in)/from financing activities

(1,648)

15







Net increase/(decrease) in cash and cash equivalents

1,048

(401)




Cash and cash equivalents at the beginning of the period

2,978

1,966




Effect of foreign exchange rate changes

(260)

161




Cash and cash equivalents at the end of the period

3,766

1,726

 

 

 

NOTES TO THE FINANCIAL STATEMENTS

(unaudited)

 

1     ACCOUNTING INFORMATION AND POLICIES

 

Except for the revised policy on operating segments and the replacement of underlying operating profit with core operating profit as a non-GAAP measure (see below), the accounting policies and methods of computation are consistent with the year ended 31 December 2011 and are in compliance with IAS 34 'Interim Financial Reporting'. The condensed interim financial statements are based on International Financial Reporting Standards (IFRS) as adopted by the EU and IFRS as issued by the International Accounting Standards Board.

 

The Group has revised its operating segments to align with the new structure under which the business is managed. Beginning 2012, operating segment information is provided based on four product areas: Personal Care, Foods, Home Care and Refreshment. Additional information is provided by geographies.

 

From 2012 the Group refers to core operating profit and core operating margin as non-GAAP measures. This means operating profit and operating margin, respectively, before the impact of business disposals, acquisition and disposal related costs, impairments and other one-off items, which we collectively term non-core items, on the grounds that the incidence of these items is uneven between reporting periods. The Group also refers to core earnings per share (core EPS).  In calculating core EPS, net profit attributable to shareholders' equity is adjusted to eliminate the post tax impact of non-core items.

 

After making appropriate enquiries, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the half year financial statements.

 

The condensed interim financial statements are shown at current exchange rates, while percentage year-on-year changes are shown at both current and constant exchange rates to facilitate comparison. The income statement on page 7, the statements of comprehensive income and changes in equity on page 8, the cash flow statement on page 10, and the free cash flow note on page 15 are translated at exchange rates current in each period. The balance sheet on page 9 and the net debt note on page 16 are translated at period-end rates of exchange.

 

The condensed interim financial statements attached do not constitute the full financial statements within the meaning of Section 434 of the UK Companies Act 2006. Full accounts for Unilever for the year ended 31 December 2011 have been delivered to the Registrar of Companies. The auditors' reports on these accounts were unqualified and did not contain a statement under Section 498 (2) or Section 498 (3) of the UK Companies Act 2006.

 

2     NON-GAAP MEASURES

 

In our financial reporting we use certain measures that are not recognised under IFRS or other generally accepted accounting principles (GAAP). We do this because we believe that these measures are useful to investors and other users of our financial statements in helping them to understand underlying business performance. Wherever we use such measures, we make clear that these are not intended as a substitute for recognised GAAP measures. Wherever appropriate and practical, we provide reconciliations to relevant GAAP measures. Unilever uses 'constant rate' and 'underlying' measures primarily for internal performance analysis and targeting purposes.

 

The principal non-GAAP measure which we apply in our quarterly reporting is underlying sales growth (abbreviated to 'USG' or 'growth'), which we reconcile to changes in the GAAP measure turnover in notes 4 and 5. Underlying sales growth represents turnover growth at constant exchange rates, excluding the effects of acquisitions and disposals. Turnover includes the impact of exchange rates, acquisitions and disposals.

 

Other non-GAAP measures are core operating profit, core operating margin and core EPS, as explained in note 1. Core EPS is further discussed on page 4 and in note 9. We also discuss free cash flow, which we reconcile in note 7 to the amounts in the cash flow statement, and net debt, which we reconcile in note 8 to the amounts reported in our balance sheet and cash flow statement.

 

 

3     SIGNIFICANT ITEMS WITHIN THE INCOME STATEMENT

 

In our income statement reporting we disclose the total value of non-core items that arise within operating profit.

 

€ million

First Half


2012

2011

Acquisition and disposal related costs

(48)

(101)

Gain/(loss) on disposal of group companies

10

144

Impairments and other one-off items

-

151




Non-core items before tax

(38)

194

Tax impact of non-core items

11

(30)

Non-core items after tax

(27)

164

Attributable to:



Non-controlling interests

-

-

Shareholders' equity

(27)

164

 

 

The following table shows the impact of non-core items on profit attributable to shareholders.

 

€ million

First Half


2012

2011

Net profit attributable to shareholders' equity

2,181

2,235

Post tax impact of non-core items

27

(164)




Core profit attributable to shareholder's equity

2,208

2,071

 

 

4     SEGMENT INFORMATION - CATEGORIES 

 

Second Quarter 

Personal

Care

Foods

Home

Care

 

Refreshment

Total








Turnover (€ million)







     2011


3,711

3,452

2,005

2,763

11,931

     2012


4,455

3,563

2,180

3,056

13,254

Change (%)


20.0

3.2

8.7

10.6

11.1

Impact of:







     Exchange rates (%)


3.1

3.3

(0.5)

5.4

3.1

     Acquisitions (%)


5.9

0.0

1.1

1.0

2.4

     Disposals (%)


(0.4)

(0.8)

(1.4)

0.6

(0.4)








Underlying sales growth (%)


10.4

0.6

9.6

3.2

5.8

     Price (%)

3.0

3.1

3.5

4.7

3.5

     Volume (%)

7.2

(2.4)

5.9

(1.4)

2.2

 

 

First Half

Personal Care

Foods

Home

Care

 

Refreshment

Total








Turnover (€ million)







     2011


7,236

6,834

4,018

4,700

22,788

     2012


8,715

7,131

4,378

5,174

25,398

Change (%)


20.4

4.3

9.0

10.1

11.5

Impact of:







     Exchange rates (%)


2.1

2.2

(0.6)

3.4

1.9

     Acquisitions (%)


7.4

0.0

1.0

0.8

2.8

     Disposals (%)


(0.4)

(1.1)

(1.2)

0.6

(0.5)








Underlying sales growth (%)


10.4

3.2

9.8

4.9

7.0

     Price (%)


3.5

4.2

4.3

4.5

4.1

     Volume (%)


6.7

(1.0)

5.3

0.3

2.8








Operating profit (€ million)







     2011


1,216

1,384

215

493

3,308

     2012


1,406

1,264

219

540

3,429








Core operating profit (€ million)







      2011


1,302

1,176

178

458

3,114

      2012


1,448

1,264

215

540

3,467








Operating margin (%)







     2011


16.8

20.3

5.4

10.5

14.5

     2012


16.1

17.7

5.0

10.4

13.5

Core operating margin (%)







      2011


18.0

17.2

4.4

9.7

13.7

      2012


16.6

17.7

4.9

10.4

13.7








 

5     SEGMENT INFORMATION - GEOGRAPHIES

 

Second Quarter

Asia /

AMET /

RUB

The

Americas

Europe

Total

 

Turnover (€ million)





     2011   

4,444

3,783

3,704

11,931

     2012

5,154

4,388

3,712

13,254

Change (%)

16.0

16.0

0.2

11.1

Impact of:





     Exchange rates (%)

3.1

4.9

1.0

3.1

     Acquisitions (%)

1.8

3.3

2.1

2.4

     Disposals (%)

(0.2)

(0.4)

(0.7)

(0.4)






Underlying sales growth (%)

10.7

7.5

(2.2)

5.8

     Price (%)

4.7

4.7

0.5

3.5

     Volume (%)

5.8

2.7

(2.7)

2.2

 

 

First Half

Asia /

AMET /

RUB

The

Americas

Europe

Total

 

Turnover (€ million)





     2011

8,697

7,368

6,723

22,788

     2012

9,977

8,479

6,942

25,398

Change (%)

14.7

15.1

3.3

11.5

Impact of:





     Exchange rates (%)

1.7

3.2

0.6

1.9

     Acquisitions (%)

1.9

4.3

2.3

2.8

     Disposals (%)

(0.3)

(0.7)

(0.7)

(0.5)

Underlying sales growth (%)

11.0

7.7

1.1

7.0

     Price (%)

5.3

5.6

0.7

4.1

     Volume (%)

5.4

2.0

0.3

2.8

 

Operating profit (€ million)





     2011

1,080

1,146

1,082

3,308

     2012

1,337

1,115

977

3,429






Core operating profit (€ million)





     2011

1,098

1,016

1,000

3,114

     2012

1,341

1,148

978

3,467






Operating margin (%)





     2011

12.4

15.6

16.1

14.5

     2012

13.4

13.2

14.1

13.5






Core operating margin (%)





     2011

12.6

13.8

14.9

13.7

     2012

13.4

13.5

14.1

13.7

 

 

Additional geographical information

 


First Half 2012

First Half 2011


Turnover

USG

UVG

UPG

Turnover 

USG

UVG

UPG


€m

%

%

%

€m

%

%

%

Unilever Total

25,398

7.0

2.8

4.1

22,788

5.7

2.2

3.5

Developed markets

11,550

1.9

(0.1)

2.0

10,544

0.8

(0.9)

1.6

Emerging markets

13,848

11.4

5.4

5.8

12,244

10.3

4.9

5.1

 


First Half 2012

First Half 2011


Turnover

USG

UVG

UPG

Turnover 

USG

UVG

UPG


€m

%

%

%

€m

%

%

%

The Americas

8,479

7.7

2.0

5.6

7,368

5.3

0.3

5.0

North America

4,471

4.1

(0.5)

4.6

3,766

(1.5)

3.1

Latin America

4,008

11.6

4.7

6.6

3,602

9.7

2.4

7.1

 

 

6     TAXATION

 

The effective tax rate for the first half was 26.1%, the same level as 2011. The tax rate is calculated by dividing the tax charge by pre-tax profit excluding the contribution of joint ventures and associates. 

 

Tax effects of components of other comprehensive income were as follows:

 

€ million

First Half 2012

First Half 2011


Before

tax

Tax

(charge)/

credit

After

tax

Before

tax

Tax

(charge)/

credit

After

tax










Fair value gains/(losses) on financial instruments

(74)

5

(69)

(66)

9

(57)

Actuarial gains/(losses) on pension schemes

(935)

213

(722)

145

(50)

95

Currency retranslation gains/(losses)

(208)

4

(204)

(278)

8

(270)

Other comprehensive income

(1,217)

222

(995)

(199)

(33)

(232)

 

 

7     FREE CASH FLOW

 

€ million

First Half


2012

2011




Cash flow from operating activities

3,340

2,423

Income tax paid

(801)

(552)

Net capital expenditure

(826)

(906)

Net interest and preference dividends paid

(176)

(161)

Free cash flow

1,537

804

 

8     NET DEBT

 

€ million

As at

30 June

2012

As at

31 December

2011

As at

30 June

2011





Total financial liabilities

(13,812)

(13,718)

(11,005)

Current financial liabilities

(6,564)

(5,840)

(3,153)

Non-current financial liabilities

(7,248)

(7,878)

(7,852)

Cash and cash equivalents as per balance sheet

4,097

3,484

2,332

Cash and cash equivalents as per cash flow statement

3,766

2,978

1,726

Add bank overdrafts deducted therein

331

506

606

Other financial assets

564

1,453

568

Net debt

(9,151)

(8,781)

(8,105)

 

9     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 as treasury stock.

 

In calculating diluted earnings per share and core earnings per share, a number of adjustments are made to the number of shares, principally: (i) conversion into PLC ordinary shares in the year 2038 of shares in a group company under the arrangements for the variation of the Leverhulme Trust and (ii) the exercise of share options by employees.

 

Earnings per share for total operations for the six months were calculated as follows:

 


2012

2011


Combined EPS - Basic


Net profit attributable to shareholders' equity (€ million)

2,181

2,235

Average number of combined share units (millions of units)

2,826.9

2,814.2

Combined EPS - basic (€)

0.77

0.79




Combined EPS - Diluted

Net profit attributable to shareholders' equity (€ million)

2,181

2,235

Adjusted average number of combined share units (millions of units)

2,916.8

2,906.3

Combined EPS - diluted (€)

0.75

0.77

 

Core EPS



Core profit attributable to shareholder's equity (see note 3) (€ million)

2,208

2,071

Adjusted average number of combined share units (millions of units)

2,916.8

2,906.3

Core EPS - diluted (€)

0.76

0.71

 

In calculating core earnings per share, net profit attributable to shareholders' equity is adjusted to eliminate the post tax impact of business disposals, acquisition and disposals and related costs, impairments, and other one-off items.

 

During the period the following movements in shares have taken place:



Millions

Number of shares at 31 December 2011 (net of treasury stock)


2,820.4

Net movements in shares under incentive schemes


9.4

Number of shares at 30 June 2012


2,829.8

 

10     ACQUISITIONS AND DISPOSALS

 

There were no material acquisitions or disposals for the period ended 30 June 2012.

 

 

11    DIVIDENDS

 

The Boards have declared a quarterly interim dividend for Q2 2012 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:

 

Per Unilever N.V. ordinary share:

€ 0.2430

Per Unilever PLC ordinary share:

£ 0.1892

Per Unilever N.V. New York share:

US$ 0.2938

Per Unilever PLC American Depositary Receipt:

US$ 0.2938

 

The quarterly interim dividends have been determined in euros and converted into equivalent sterling and US dollar amounts using exchange rates issued by the European Central Bank on 24 July 2012.

 

The quarterly dividend calendar for the remainder of 2012 will be as follows:

 


Announcement Date

Ex-Dividend Date

Record Date

Payment Date

Quarterly dividend - for Q2 2012

26 July 2012

8 August 2012

10 August 2012

12 September 2012

Quarterly dividend - for Q3 2012

25 October 2012

7 November 2012

9 November 2012

12 December 2012

 

US dollar cheques for the quarterly interim dividend will be mailed on 11 September 2012 to holders of record at the close of business on 10 August 2012. In the case of the NV New York shares, Netherlands withholding tax will be deducted.

 

 

12   EVENTS AFTER THE BALANCE SHEET DATE

 

There were no material post balance sheet events other than those mentioned elsewhere in this report.

 

 

RESPONSIBILITIES OF DIRECTORS

 

The Directors declare that, to the best of their knowledge:

 

·      this condensed set of interim financial statements, which have been prepared in accordance with IAS 34 'Interim Financial Reporting', gives a true and fair view of the assets, liabilities, financial position and profit or loss of Unilever; and

·      the interim management report gives a fair review of the information required pursuant to UK DTR regulations 4.2.7 and 4.2.8 and section 5:25d (8)/(9) of the Dutch Act on Financial Supervision (Wet op het financieel toezicht).

 

Unilever's Directors are listed in the Annual Report and Accounts for 2011.

 

Details of all current Directors are available on our website at www.unilever.com.

 

 

 

By order of the Board

 

Paul Polman                                                          Jean-Marc Huët

Chief Executive Officer                                       Chief Financial Officer

 

26 July 2012


This information is provided by RNS
The company news service from the London Stock Exchange
 
END
 
 
IR BIGDRCSDBGDU