1st Quarter Results
Unilever PLC
26 April 2002
UNILEVER FIRST QUARTER RESULTS 2002
(Unaudited)
Strong margin expansion and an increase in sales momentum through the quarter
underpin confidence in the achievement of our full year targets.
FINANCIAL HIGHLIGHTS
€ Millions Constant exchange rates (2001
average)
First Quarter 2002
Total Turnover 12,290 -1%
Total Operating profit - beia* 1,825 +18%
Pre-tax profit 962 +62%
Net profit 463 +94%
Net profit - beia* 927 +35%
Per NV share (€0.51), Euro
Earnings per share (EPS) 0.46 +100%
EPS (beia) * 0.93 +37%
Per PLC share (1.4p), Euro cents
Earnings per share (EPS) 6.88 +100%
EPS (beia) * 13.96 +37%
* before exceptional items and amortisation of goodwill and intangibles
At current rates of exchange, EPS beia grew by 33% and EPS grew by 90%.
KEY FEATURES FOR THE QUARTER
• Sales of the leading brands accelerated through the quarter giving 3%
growth, and 4.6% for the last twelve months.
• Operating margin (beia), driven by gross margin improvement, moved ahead
strongly by 250 basis points to 14.9%.
• Net interest fell by 26% to €320 million through a combination of lower
rates, the benefits of strong cash flow from operations, and disposal
proceeds.
• EPS (beia) grew by 37% primarily reflecting the improvement in underlying
profitability, but also some later phasing of marketing activity and costs
associated with restructuring.
CHAIRMEN'S COMMENT
'We have made a sound start to the year. Continuing expansion in underlying
operating margin reflects our determination to grow our business profitably. Our
operational plans have addressed the improvement in profitability in key parts
of our business such as Laundry, Tea and Ice Cream and a continued focus on
extracting value from the tail of our business. In addition we have taken
pricing action in countries where there have been substantial devaluations.
Together these activities re-inforce our planned delivery of low double digit
growth in EPS beia for the year.
Through the quarter we have seen an increase in sales momentum which is in line
with our target for the year of sustaining the growth of our leading brands. We
are confident of delivering our innovation and market place activities for the
year, which support this target. In Foods we have a step-up in market
initiatives, while in Home and Personal Care we continue with a strong
innovation programme. We foresee leading brands approaching 90% of sales by the
end of 2002, up from 84% today'.
N W A FitzGerald A Burgmans
Chairman, Unilever PLC Chairman, Unilever N.V.
26th April, 2002
FIRST QUARTER FINANCIAL RESULTS (at constant rates of exchange)
Underlying sales grew by 2%. The impact of disposals was 3% leading to a
reduction in total sales of 1%.
Operating profit, before exceptional items and amortisation of goodwill and
intangibles (beia), increased by 18% to €1,825 million. Operating margin (beia)
increased by 250 basis points to 14.9%.
Within the operating margin progression, a re-phasing of advertising, promotions
and costs associated with restructuring into the second quarter contributed 50
basis points. This added some 6 percentage points to earnings per share (beia),
which grew by 37%.
Amortisation of goodwill and intangibles was €344 million.
Net interest was €320 million, down from €434 million last year.
Exceptional items for the quarter were €197 million which includes €222 million
of restructuring and €25 million profit on disposals. Associated costs included
in operating profit (beia) were €40 million in the quarter.
The effective tax rate for the quarter was 45% and reflects the
non-deductibility of Bestfoods goodwill amortisation. The underlying tax rate
for normal trading operations is 34%.
Net profit for the quarter grew by 94% to €463 million. Before exceptional items
and goodwill amortisation, net profit was ahead by €242 million to €927 million,
an increase of 35%. In both cases the growth came from increases in underlying
profit and lower interest.
Earnings per share grew by 100%.
FIRST QUARTER PERFORMANCE BY REGION (at constant rates of exchange)
The following regional commentary is based on operating profit before
exceptional items and amortisation of goodwill and intangibles.
EUROPE: Broad based growth in underlying sales and profits
Underlying sales growth was 2.4%, including a continuing strong contribution
from Central and Eastern Europe. Lower sales of non-leading brands diluted the
overall growth rate as these were managed for value. Total sales were 2.2% lower
than last year through the impact of disposals.
The key highlights in the sales development of our business in Western Europe
were:
• Growth of 5% in Spreads and Cooking Products driven by the sustained
progress of our innovations, especially in Becel which grew in double
digits.
• Good growth in Savoury and Dressings approaching 4%, with strong
contributions from Amora, Knorr and from Hellmann's in the UK.
• Sales of Dove grew over 60%, with encouraging initial sales for shampoo
and conditioner which is now available in 12 markets.
• Strong growth in Rexona and Axe strengthened our market position in
deodorants.
• Laundry sales grew 1% with volume growth being partially offset by
competitive pricing.
In Central and Eastern Europe we have seen growth of over 10% with particular
strength in Russia in Tea, Skin and Hair and in Savoury & Dressings and
Household Care across the region.
Operating margins are nearly two percentage points ahead of last year reflecting
the benefits of supply chain restructuring and Bestfoods synergy.
NORTH AMERICA: Excellent profits growth with a solid sales performance against a
strong quarter last year
Total sales were 3.5% lower from the effect of disposals. Flat underlying sales
reflect later phasing of innovation this year and the impact on turnover of
increased promotional investment in Foods. A one-off effect on trade stocks of
K-Mart store closures particularly impacted our Home and Personal Care business.
In Foods, underlying sales grew 2%. Slim•Fast and Ice Cream, through Breyers and
Ben & Jerry's, continued to grow very strongly, and our leading Spreads brands
also performed well. Ragu Express snack pots continue to make progress and
Lipton Brisk Lemonade was successfully launched in March. However, overall sales
growth was held back by the impact on turnover of trade investment behind a
Wishbone product launch, the migration of Five Brothers to Bertolli and
promotions behind the Hellmann's brand to match competitive pricing initiatives.
Tail brands declined, reducing Foods underlying sales growth by just over 1%.
In Home and Personal Care underlying sales declined 2.5%, with good performances
by Pond's, Dove, Suave and Lever 2000 being offset by:
• Our innovation programme is phased to later in the year, while the first
quarter of last year benefited strongly from launches under the Dove, Suave,
Caresse and Wisk brands.
• In Laundry and Oral we are focusing on improving profitability, and this
has reduced overall sales growth in the quarter.
Operating margins increased strongly by almost 4 percentage points to 15% driven
by supply chain savings and Bestfoods synergy. Margins were also higher because
of lower advertising and promotion as a result of the later phasing of
innovation and lower media rates.
AFRICA, MIDDLE EAST AND TURKEY: Good sales increase in difficult market
conditions
Total sales increased 4% with underlying sales growth of 5%. A key feature of
the quarter has been determined price action to restore margins in a number of
countries where there have been devaluations. This has enabled us to protect
operating margins at 9% compared with 10% a year ago.
South Africa performed strongly, with good volume growth across Dressings,
Spreads, Tea and Personal Care. Sunsilk was succesfully launched, building on
our experience from Latin America.
In Turkey markets declined in a difficult economy. Whilst market shares in key
categories were maintained we have seen underlying sales decline by 10% but with
significantly improved profitability. Good sales growth in Egypt and Arabia was
offset by difficult trading conditions in much of West and Sub-Saharan Africa.
ASIA AND PACIFIC: Increased profitability and strong momentum in sales growth
through the quarter reflecting phasing of innovation
Total sales were in line with last year. Underlying sales were flat, with a
rapid acceleration through the quarter.
In South East Asia, Indonesia continued to show strong, broad based growth,
partly offset by lower sales in both the Philippines and Thailand against a
strong quarter in the previous year due to phasing of innovation.
In Japan we continue to see high single digit growth in Home & Personal Care
driven by Pond's, and Dove following the launch of shampoo last year. However,
in Foods sales were lower against the strong quarter in 2001 which included the
initial sales associated with the launch of our Ready-to-Drink Tea alliance with
Suntory.
In India underlying sales in the quarter declined 5%. This reflects reduction in
distributor stocks as we introduced continuous replenishment and the impact of
lower duties on Skin and Hair products which prompted rebates to the trade for
duties already paid. In Foods, determined action has been taken to improve
profitability and we have shed volume in low margin business.
Operating margins are 3 percentage points ahead with a strong improvement in
results in both China and India.
LATIN AMERICA: Sales and profits move ahead despite further economic turbulence
Sales grew by 1.3% with underlying sales ahead by 3.5%. Pricing is still the
main driver as we recover devaluation led cost increases.
Mexico continues to show very good growth, particularly in Personal Care through
Sedal which has now reached a share of almost 10%, through Axe and Dove, and in
Savoury following the successful launch of Knorr Sazonisimo seasoning last year.
We also see good growth in Andina led by the launch of Sedal.
In Brazil, underlying sales moved ahead strongly. Deodorants, through Rexona and
Axe and Hair, through Sedal, both grew at more than 20%, while Spreads also
performed well with strong contributions from Doriana and Becel, including Becel
pro•activ. Unprofitable volume in tail businesses has been shed as we manage
them for value.
The current situation in Argentina has severely reduced consumer demand and
volumes have been affected as a result. However our management has deep local
experience and is taking the appropriate actions to preserve the long-term value
of the business. Market shares are firm in declining markets.
Across South Latin America we have maintained our market share position in
Laundry.
Operating margins increased by 2 percentage points through the benefits of our
savings programmes and pricing action to recover devaluation driven cost
increases.
CASH FLOW / BALANCE SHEET
Cash flow from operations of €1.1 billion was €0.1 billion higher than the
corresponding period in 2001, primarily reflecting the growth in operating
profit.
Capital expenditure and financial investment is lower due to a different phasing
of share purchases to cover share option obligations.
Capital and reserves increased by €0.1 billion reflecting profits for the period
offset by negative currency retranslation of €0.3 billion, primarily as a
consequence of the devaluation of the Argentinian peso.
United Kingdom Financial Reporting Standard 19, implemented during this quarter,
has resulted in a restatement of €(202) million to the opening Capital and
Reserves for 2002 (2001: €(195) million). Further details on page 10.
EURO REPORTING
Information in sterling and US dollars is available as a supplement to this Euro
report.
SAFE HARBOUR STATEMENT: This announcement may contain forward-looking
statements (within the meaning of the U.S. Private Securities Litigation
Reform Act 1995). Any forward-looking statements are based on current
expectations with respect to important risk factors. It is important to note
that the actual results could materially differ from the results anticipated
in any forward-looking statements which may be contained in this
announcement. Factors which might cause forward-looking statements to differ
materially from actual results include, among other things, the overall
economic, political, social and business conditions, the demand for our
goods and services, competition in the market, fluctuations in interest
rates and foreign currencies, the impact and other uncertainties of future
acquisitions and disposals and any changes in the tax laws and other
legislation and regulation, in the jurisdictions in which we operate.
We do not undertake any obligation to update any forward-looking statements
contained in or incorporated in this announcement to reflect actual results,
changes in assumptions or in other factors which may affect any
forward-looking statements.
CONSOLIDATED PROFIT AND LOSS ACCOUNT - CONSTANT EXCHANGE RATES (unaudited)
In the profit and loss account given below, the results in both years have been
translated at constant exchange rates, being the annual average exchange rates
for 2001. This reporting convention facilitates comparisons since the impact of
exchange rate fluctuations is eliminated.
€ Millions - constant First Quarter
2002 2001 % Incr./
(Decr.)
TOTAL TURNOVER 12,290 12,455 (1) %
Less: Share of turnover of joint ventures (156) (151)
GROUP TURNOVER 12,134 12,304 (1) %
GROUP OPERATING PROFIT 1,268 1,007 26 %
Group operating profit beia * 1,801 1,516 19 %
Exceptional items (197) (159)
Amortisation of goodwill and intangibles (336) (350)
Add: Share of operating profit of joint ventures 16 17
TOTAL OPERATING PROFIT 1,284 1,024 25 %
Total operating profit beia * 1,825 1,543 18 %
Exceptional items (197) (159)
Amortisation of goodwill and intangibles (344) (360)
Other income from fixed investments (2) 5
Interest (320) (434)
PROFIT BEFORE TAXATION 962 595 62 %
Taxation (432) (306)
PROFIT AFTER TAXATION 530 289 83 %
Minority Interests (67) (50)
NET PROFIT AT CONSTANT 2001 EXCHANGE RATES 463 239 94 %
Net Profit before exceptional items & amortisation of goodwill and intangibles 927 685 35 %
(Constant rates)
NET PROFIT AT EXCHANGE RATES CURRENT IN EACH PERIOD 450 244 84 %
Net Profit before exceptional items & amortisation of goodwill and intangibles 903 684 32 %
(Current rates)
COMBINED EARNINGS PER SHARE (Current rates)
- per €0.51 ordinary share (Euros) 0.45 0.23 90 %
- per €0.51 ordinary share - diluted (Euros) 0.43 0.23 90 %
- per 1.4p ordinary share (Euro cents) 6.68 3.51 90 %
- per 1.4p ordinary share - diluted (Euro cents) 6.50 3.42 90 %
* beia means before exceptional items and amortisation of goodwill and
intangibles.
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES (unaudited) First Quarter
€ Millions 2002 2001
Restated
Net profit 450 244
Currency retranslation (303) (671)
Total recognised gains / (losses) since last annual accounts 147 (427)
MOVEMENTS IN SHAREHOLDERS' EQUITY (unaudited) First Quarter
€ Millions 2002 2001
Restated
Shareholders' equity as at 1 January (1) 6,993 7,974
Net profit 450 244
Dividends (10) (11)
Goodwill movements 1 63
Currency retranslation (306) (698)
Change in number of shares or certificates of shares held in (17) (328)
connection with share options
Shareholders' equity as at end period 7,111 7,244
SUMMARY BALANCE SHEET (unaudited) As at 30th As at 31st As at 31st
March December March
€ Millions 2002 2001 2001
Restated Restated
Goodwill and intangibles 24,668 25,045 26,931
Acquired businesses held for resale - - 1,781
Other fixed assets 10,014 10,124 10,731
Stocks 5,506 5,343 5,781
Debtors 10,341 9,953 10,276
Cash and current investments 2,182 2,301 1,813
Trade and other creditors (12,913) (12,738) (12,995)
39,798 40,028 44,318
Borrowings 25,220 25,500 29,620
Provisions for liabilities and charges 6,740 6,871 6,783
Minority interests 727 664 671
Capital and reserves 7,111 6,993 7,244
39,798 40,028 44,318
Restatements relate to the implementation of United Kingdom Financial Reporting
Standard 19 (see note on Page 10).
As at 1st As at 1st
January January
2002 2001
(1) Shareholders' equity as previously reported 7,195 8,169
Accounting policy change (202) (195)
Shareholders' equity as restated 6,993 7,974
CASH FLOW STATEMENT (unaudited)
€ Millions First Quarter
2002 2001
Cash flow from operating activities 1,138 1,027
Dividends from joint ventures 6 1
Returns on investments and servicing of finance (275) (274)
Taxation (295) (285)
Capital expenditure and financial investment (248) (440)
Acquisitions and disposals 90 172
Dividends paid on ordinary share capital - -
CASH INFLOW / (OUTFLOW) BEFORE MANAGEMENT OF LIQUID RESOURCES AND 416 201
FINANCING
Management of liquid resources 34 1,135
Financing (278) (1,609)
INCREASE / (DECREASE) IN CASH IN THE PERIOD 172 (273)
RECONCILIATION OF CASH FLOW TO MOVEMENT IN NET FUNDS / (DEBT) (unaudited)
NET FUNDS / (DEBT) AT 1 JANUARY (23,199) (26,468)
INCREASE / (DECREASE) IN CASH IN THE PERIOD 172 (273)
Cash flow from (increase)/decrease in borrowings 276 1,604
Cash flow from increase/(decrease) in liquid resources (34) (1,135)
Change in net funds resulting from cash flows 414 196
Borrowings within group companies acquired - -
Borrowings within group companies sold 14 1
Liquid resources within group companies acquired - -
Liquid resources within group companies sold - -
Non cash movements (15) (554)
Currency retranslation (252) (982)
MOVEMENT IN NET FUNDS / (DEBT) IN THE PERIOD 161 (1,339)
NET FUNDS / (DEBT) AT PERIOD END (23,038) (27,807)
GEOGRAPHICAL ANALYSIS (at constant rates)
€ Millions First Quarter
% Incr./
2002 2001
(Decr.)
TOTAL TURNOVER 12,290 12,455 (1)%
Europe 4,680 4,786 (2)%
North America 3,231 3,348 (4)%
Africa, Middle East and Turkey 803 771 4 %
Asia and Pacific 1,942 1,937 - %
Latin America 1,634 1,613 1 %
TOTAL OPERATING PROFIT - before exceptional items and amortisation of 1,825 1,543 18 %
goodwill and intangibles
Europe 685 606 13 %
North America 484 371 31 %
Africa, Middle East and Turkey 73 77 (6) %
Asia and Pacific 321 262 23 %
Latin America 262 227 16 %
TOTAL OPERATING MARGIN - before exceptional items and amortisation of 14.9% 12.4%
goodwill and intangibles
Europe 14.6% 12.7%
North America 15.0% 11.1%
Africa, Middle East and Turkey 9.0% 10.0%
Asia and Pacific 16.5% 13.5%
Latin America 16.1% 14.1%
OPERATIONAL ANALYSIS (at constant rates)
€ Millions First Quarter
% Incr./
2002 2001 (Decr.)
TOTAL TURNOVER 12,290 12,455 (1)%
Foods 6,645 6,866 (3)%
Savoury and Dressings 2,376 2,487 (4)%
Spreads and Cooking Products 1,571 1,633 (4)%
Health & Wellness and Beverages 1,052 1,030 2 %
Ice Cream and Frozen Foods 1,646 1,716 (4)%
Home Care and Professional Cleaning 2,534 2,584 (2)%
Personal Care 2,984 2,859 4 %
Other Operations 127 146 (13)%
TOTAL OPERATING PROFIT - before exceptional items and amortisation of 1,825 1,543 18 %
goodwill and intangibles
Foods 878 790 11 %
Savoury and Dressings 345 351 (2)%
Spreads and Cooking Products 237 242 (2)%
Health & Wellness and Beverages 184 127 45 %
Ice Cream and Frozen Foods 112 70 58 %
Home Care and Professional Cleaning 297 238 25 %
Personal Care 637 505 26 %
Other Operations 13 10 42 %
TOTAL OPERATING MARGIN - before exceptional items and amortisation of 14.9% 12.4%
goodwill and intangibles
Foods 13.2% 11.5%
Savoury and Dressings 14.5% 14.1%
Spreads and Cooking Products 15.1% 14.8%
Health & Wellness and Beverages 17.5% 12.3%
Ice Cream and Frozen Foods 6.8% 4.1%
Home Care and Professional Cleaning 11.7% 9.2%
Personal Care 21.3% 17.6%
Other Operations 10.4% 6.4%
NOTES
Exchange Rates
The results for 2002 and the comparative figures for 2001 have been translated
at constant average rates of exchange, being the annual average rates for 2001.
For our reporting currencies these were €1 = £0.62 = US $0.90. In addition, the
results, earnings per share and cash flow statement have been translated at
rates current in each period. These are based on €1 = £0.61 = US $0.88 for first
quarter 2002 and €1 = £0.63 = US $0.92 for first quarter 2001.
The balance sheet figures have been translated at period-end rates of exchange.
For our reporting currencies these were:
End March 2002 €1 = £0.61 = US $0.87
End December 2001 €1 = £0.61 = US $0.89
End March 2001 €1 = £0.62 = US $0.88
Current Rates of Exchange
For the first quarter in current rates of exchange: Total turnover is €12,238
million (1% decrease); Operating profit beia is €1,789 million (17% increase);
Operating profit is €1,262 million (23% increase); Interest is a charge of €321
million (compared with a charge of €427 million last year); Pre-tax profit is
€939 million (56% increase); Net profit is €450 million (84% increase); Net
profit beia is €903 million (32% increase); Earnings per share beia is €0.91 per
NV share (33% increase) and €cent 13.60 per PLC share (33% increase); Earnings
per share is €0.45 per NV share (90% increase) and €cent 6.68 per PLC share (90%
increase).
Acquisitions
In the first three months of 2002 the effect on turnover and operating profit of
acquisitions made in the period was not material.
Disposals
On 20 November 2001, we announced a definitive agreement to sell our
DiverseyLever institutional and industrial cleaning business to Johnson Wax
Professional for some US $1.0 billion (€1.1 billion) in cash and a loan note of
US $279 million (€310 million). We will also take a one-third equity share in
the combined business. A valuation of around US $300 million (€330 million) for
this one-third equity share brings the total worth of the transaction to
Unilever to approximately US $1.6 billion (€1.75 billion). Total turnover of
DiverseyLever for the 12 months to December 2001, excluding sales of the
consumer brands which Johnson Wax Professional will distribute for Unilever
under a separate sales agency agreement, was approximately US $1.5 billion (€1.7
billion). This sale is expected to be completed in the second quarter of 2002.
On 23 April 2002, we announced that we had signed a definitive agreement to sell
19 food brands sold across North America to ACH Food Companies, Inc., of
Memphis, Tennessee, a subsidiary of Associated British Foods plc. Unilever will
receive €406 million (US $360 million) in cash in a transaction expected to be
completed in the third quarter of 2002, subject to regulatory approvals and
certain other conditions. These brands and related assets, acquired by Unilever
in connection with the October 2000 acquisition of Bestfoods, had combined sales
of €350 million (US $310 million) in 2001.
FRS 19
From 1 January 2002 Unilever has adopted UK Financial Reporting Standard 19 (FRS
19) 'Deferred Tax' which requires full provision to be made for deferred taxes.
The impact of adoption of this standard has been reflected in all periods
covered by this announcement by means of prior period adjustments to the balance
sheets. As Unilever has previously provided for deferred taxes on a full
provision basis in accordance with Dutch law, FRS 19 does not have a material
impact on the profit and loss account.
The implementation of FRS 19 has resulted in a restatement of €(202) million to
the opening Capital and Reserves for 2002 (2001: €(195) million). In the 2002
opening balance sheet goodwill has been reduced by €52 million (2001: nil) while
debtors have been reduced by €141 million (2001: €134 million) through a
reduction in deferred tax assets, and deferred tax liabilities have been
increased by €9 million (2001: €61 million).
Combined earnings per share
The combined earnings per share calculations are based on the average number of
share units representing the combined ordinary shares of NV and PLC in issue
during the period, less the average number of shares held to meet options
granted under various employee share plans.
The number of combined share units is calculated from the underlying NV and PLC
shares using the exchange rate of £1 = €5.445, in accordance with the
Equalisation Agreement.
The diluted earnings per share are based on the average number of share units,
plus all shares under option, together with certain PLC shares which may be
issued in 2038 under the arrangements for the variation of the Leverhulme Trust.
The number of shares is reduced, in accordance with FRS 14, by the number of
shares that could be purchased at fair value with the expected proceeds from the
exercise of options by employees.
Earnings per share in Euros
Constant rates Current rates
2002 2001 2002 2001
Thousands of units
Average number of combined share units of €0.51 981,988 985,879 981,988 985,879
Average number of combined share units of 1.4p 6,546,584 6,572,526 6,546,584 6,572,526
COMBINED EPS
Net profit 463 239 450 244
Less: Preference dividends (13) (13) (13) (13)
Net profit attributable to ordinary capital 450 226 437 231
Combined EPS per €0.51 (Euros) 0.46 0.23 0.45 0.23
Combined EPS per 1.4p (Euro cents) 6.88 3.45 6.68 3.51
COMBINED EPS - BEIA
Net profit 463 239 450 244
Add back exceptional items net of tax 135 99 129 95
Add back amortisation of goodwill / intangibles net of tax 329 347 324 345
Net profit beia 927 685 903 684
Less: Preference dividends (13) (13) (13) (13)
Net profit attributable to ordinary capital - beia 914 672 890 671
Combined EPS beia per €0.51 (Euros) 0.93 0.68 0.91 0.68
Combined EPS beia per 1.4p (Euro cents) 13.96 10.23 13.60 10.21
COMBINED EPS - Diluted
Thousands of units
Adjusted average combined share units of €0.51 1,009,836 1,012,564 1,009,836 1,012,564
Adjusted average combined share units of 1.4p 6,732,239 6,750,429 6,732,239 6,750,429
Net profit attributable to ordinary capital 450 226 437 231
Combined diluted EPS per €0.51 (Euros) 0.45 0.22 0.43 0.23
Combined diluted EPS per 1.4p (Euro cents) 6.69 3.35 6.50 3.42
Dates
The results for the second quarter and first half-year of 2002 will be announced
on Wednesday, 31 July 2002.
26 April 2002
Internet: http://www.unilever.com
CONSOLIDATED PROFIT AND LOSS ACCOUNT - CONSTANT EXCHANGE RATES (unaudited)
In the profit and loss account given below, the results in both years have been
translated at constant exchange rates, being the annual average exchange rates
for 2001. This reporting convention facilitates comparisons since the impact of
exchange rate fluctuations is eliminated.
£ Millions - constant First Quarter
2002 2001 % Incr./
(Decr.)
TOTAL TURNOVER 7,644 7,747 (1) %
Less: Share of turnover of joint ventures (97) (94)
GROUP TURNOVER 7,547 7,653 (1) %
GROUP OPERATING PROFIT 788 626 26 %
Group operating profit beia * 1,120 943 19 %
Exceptional items (123) (99)
Amortisation of goodwill and intangibles (209) (218)
Add: Share of operating profit of joint ventures 10 11
TOTAL OPERATING PROFIT 798 637 25 %
Total operating profit beia * 1,135 960 18 %
Exceptional items (123) (99)
Amortisation of goodwill and intangibles (214) (224)
Other income from fixed investments (1) 3
Interest (199) (270)
PROFIT BEFORE TAXATION 598 370 62 %
Taxation (269) (190)
PROFIT AFTER TAXATION 329 180 83 %
Minority Interests (41) (31)
NET PROFIT AT CONSTANT 2001 EXCHANGE RATES 288 149 94 %
Net Profit before exceptional items & amortisation of goodwill and intangibles 576 426 35 %
(Constant rates)
NET PROFIT AT EXCHANGE RATES CURRENT IN EACH PERIOD 277 154 79 %
Net Profit before exceptional items & amortisation of goodwill and intangibles 555 432 28 %
(Current rates)
COMBINED EARNINGS PER SHARE (Current rates)
- per 1.4p ordinary share 4.11p 2.22p 85 %
- per 1.4p ordinary share - diluted 3.99p 2.16p 84 %
* beia means before exceptional items and amortisation of goodwill and
intangibles.
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES (unaudited) First Quarter
£ Millions 2002 2001
Restated
Net profit 277 154
Currency retranslation (177) (457)
Total recognised gains / (losses) since last annual accounts 100 (303)
MOVEMENTS IN SHAREHOLDERS' EQUITY (unaudited) First Quarter
£ Millions 2002 2001
Restated
Shareholders' equity as at 1 January (1) 4,272 4,973
Net profit 277 154
Dividends (6) (7)
Goodwill movements 1 40
Currency retranslation (179) (473)
Change in number of shares or certificates of shares held in (10) (207)
connection with share options
Shareholders' equity as at end period 4,355 4,480
SUMMARY BALANCE SHEET (unaudited) As at 30th As at 31st As at 31st
March December March
£ Millions 2002 2001 2001
Restated Restated
Goodwill and intangibles 15,107 15,300 16,654
Acquired businesses held for resale - - 1,101
Other fixed assets 6,133 6,185 6,636
Stocks 3,372 3,264 3,575
Debtors 6,333 6,080 6,355
Cash and current investments 1,336 1,405 1,121
Trade and other creditors (7,909) (7,781) (8,036)
24,372 24,453 27,406
Borrowings 15,445 15,578 18,317
Provisions for liabilities and charges 4,127 4,197 4,194
Minority interests 445 406 415
Capital and reserves 4,355 4,272 4,480
24,372 24,453 27,406
Restatements relate to the implementation of United Kingdom Financial Reporting
Standard 19 (see note on Page 10).
As at 1st As at 1st
January January
2002 2 001
(1) Shareholders' equity as previously reported 4,396 5,095
Accounting policy change (124) (122)
Shareholders' equity as restated 4,272 4,973
CASH FLOW STATEMENT (unaudited)
£ Millions First Quarter
2002 2001
Cash flow from operating activities 699 648
Dividends from joint ventures 4 1
Returns on investments and servicing of finance (169) (173)
Taxation (181) (180)
Capital expenditure and financial investment (152) (278)
Acquisitions and disposals 55 109
Dividends paid on ordinary share capital - -
CASH INFLOW / (OUTFLOW) BEFORE MANAGEMENT OF LIQUID RESOURCES AND 256 127
FINANCING
Management of liquid resources 21 717
Financing (171) (1,018)
INCREASE / (DECREASE) IN CASH IN THE PERIOD 106 (174)
RECONCILIATION OF CASH FLOW TO MOVEMENT IN NET FUNDS / (DEBT) (unaudited)
NET FUNDS / (DEBT) AT 1 JANUARY (14,173) (16,507)
INCREASE / (DECREASE) IN CASH IN THE PERIOD 106 (174)
Cash flow from (increase)/decrease in borrowings 170 1,014
Cash flow from increase/(decrease) in liquid resources (21) (717)
Change in net funds resulting from cash flows 255 123
Borrowings within group companies acquired - -
Borrowings within group companies sold 9 1
Liquid resources within group companies acquired - -
Liquid resources within group companies sold - -
Non cash movements (9) (350)
Currency retranslation (191) (463)
MOVEMENT IN NET FUNDS / (DEBT) IN THE PERIOD 64 (689)
NET FUNDS / (DEBT) AT PERIOD END (14,109) (17,196)
GEOGRAPHICAL ANALYSIS (at constant rates)
£ Millions First Quarter
% Incr./
2002 2001
(Decr.)
TOTAL TURNOVER 7,644 7,747 (1)%
Europe 2,911 2,977 (2)%
North America 2,009 2,082 (4)%
Africa, Middle East and Turkey 500 480 4 %
Asia and Pacific 1,208 1,205 - %
Latin America 1,016 1,003 1 %
TOTAL OPERATING PROFIT - before exceptional items and amortisation of 1,135 960 18 %
goodwill and intangibles
Europe 426 377 13 %
North America 301 231 31 %
Africa, Middle East and Turkey 45 48 (6) %
Asia and Pacific 200 163 23 %
Latin America 163 141 16 %
TOTAL OPERATING MARGIN - before exceptional items and amortisation of 14.9% 12.4%
goodwill and intangibles
Europe 14.6% 12.7%
North America 15.0% 11.1%
Africa, Middle East and Turkey 9.0% 10.0%
Asia and Pacific 16.5% 13.5%
Latin America 16.1% 14.1%
OPERATIONAL ANALYSIS (at constant rates)
£ Millions First Quarter
% Incr./
2002 2001 (Decr.)
TOTAL TURNOVER 7,644 7,747 (1)%
Foods 4,133 4,271 (3)%
Savoury and Dressings 1,477 1,547 (4)%
Spreads and Cooking Products 977 1,016 (4)%
Health & Wellness and Beverages 655 641 2 %
Ice Cream and Frozen Foods 1,024 1,067 (4)%
Home Care and Professional Cleaning 1,576 1,607 (2)%
Personal Care 1,856 1,778 4 %
Other Operations 79 91 (13)%
TOTAL OPERATING PROFIT - before exceptional items and amortisation of 1,135 960 18 %
goodwill and intangibles
Foods 546 492 11 %
Savoury and Dressings 215 218 (2)%
Spreads and Cooking Products 147 151 (2)%
Health & Wellness and Beverages 114 79 45 %
Ice Cream and Frozen Foods 70 44 58 %
Home Care and Professional Cleaning 185 148 25 %
Personal Care 396 314 26 %
Other Operations 8 6 42 %
TOTAL OPERATING MARGIN - before exceptional items and amortisation of 14.9% 12.4%
goodwill and intangibles
Foods 13.2% 11.5%
Savoury and Dressings 14.5% 14.1%
Spreads and Cooking Products 15.1% 14.8%
Health & Wellness and Beverages 17.5% 12.3%
Ice Cream and Frozen Foods 6.8% 4.1%
Home Care and Professional Cleaning 11.7% 9.2%
Personal Care 21.3% 17.6%
Other Operations 10.4% 6.4%
Earnings per share in Sterling
Constant rates Current rates
2002 2001 2002 2001
Thousands of units
Average number of combined share units of 1.4p 6,546,584 6,572,526 6,546,584 6,572,526
COMBINED EPS
Net profit 288 149 277 154
Less: Preference dividends (8) (8) (8) (8)
Net profit attributable to ordinary capital 280 141 269 146
Combined EPS per 1.4p 4.28p 2.14p 4.11p 2.22p
COMBINED EPS - BEIA
Net profit 288 149 277 154
Add back exceptional items net of tax 84 61 79 60
Add back amortisation of goodwill / intangibles net of tax 204 216 199 218
Net profit beia 576 426 555 432
Less: Preference dividends (8) (8) (8) (8)
Net profit attributable to ordinary capital - beia 568 418 547 424
Combined EPS beia per 1.4p 8.69p 6.36p 8.36p 6.46p
COMBINED EPS - Diluted
Thousands of units
Adjusted average combined share units of 1.4p 6,732,239 6,750,429 6,732,239 6,750,429
Net profit attributable to ordinary capital 280 141 269 146
Combined diluted EPS per 1.4p 4.16p 2.09p 3.99p 2.16p
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