Final Results
Unilever PLC
12 February 2004
UNILEVER RESULTS
FOURTH QUARTER AND ANNUAL RESULTS 2003
(Unaudited and provisional, at constant exchange rates unless stated)
Delivery of 11% growth in EPS (beia*) with continuing strong expansion of
operating margin.
FINANCIAL HIGHLIGHTS
€ Millions
Constant exchange rates (2002 average) Current exchange rates
-------------------------------------- ----------------------
Fourth Quarter 2003 Full Year 2003 Full Year 2003
------------------ ------------------ -----------------
11,925 -4 % Turnover 47,700 - 2 % 42,942 - 12 %
------------------ ------------------ -----------------
1,982 +22 % Operating profit - beia* 7,501 + 6 % 6,772 - 4 %
------------------ ------------------ -----------------
1,334 +182 % Pre-tax profit 4,884 + 21 % 4,538 + 12 %
------------------ ------------------ -----------------
811 +199 % Net profit 2,942 + 38 % 2,762 + 29 %
------------------ ------------------ -----------------
1,153 + 22% Net profit - beia* 4,277 + 10 % 3,923 + 1 %
------------------ ------------------ -----------------
1.19 +23 % EPS NV - beia * (Euros) 4.39 + 11 % 4.02 + 2 %
------------------ ------------------ -----------------
17.80 +23 % EPS PLC - beia * (Euro cents) 65.79 + 11 % 60.31 + 2 %
------------------ ------------------ -----------------
* Before exceptional items and amortisation of goodwill and intangibles
EPS (beia) at current rates of exchange was 13% higher than the prior year in
the quarter and 2% higher for the year. EPS at current rates of exchange was
192% higher for the quarter and 32% higher for the year.
Amounts for 2002 reported in the financial statements have been restated
following changes in our accounting policies for pensions and other
post-employment benefits and share options.
KEY FEATURES FOR THE YEAR (at constant exchange rates)
• Sales of the leading brands grew by 2.5% and are now 93% of our business.
• Operating margin (beia) moved strongly ahead by 120 basis points to 15.7%
through improved gross margins and overheads and after a further increase in
brand investment.
• Net borrowing costs were reduced by 13%. Net debt at the year end, at
closing 2003 exchange rates, fell to €12.6 billion.
• EPS (beia) grew by 11% reflecting the continuing improvement in
profitability and sustained benefits of a lower tax rate.
• Proposed final dividend of €1.15 per NV ordinary share and 11.92p per PLC
ordinary share, increases the total dividend per share by 2% for NV and by
13% for PLC.
CHAIRMEN'S COMMENT & OUTLOOK
We have continued to generate significant cost savings which has allowed
increased investment in our leading brands and another healthy increase in
operating margins. There has been a further reduction in debt, net borrowing
costs and tax rate, and we have again delivered low double digit growth in EPS
(beia).
This has been achieved in spite of it being a difficult year, with growth of our
leading brands below plan. Action is being taken to correct the disappointing
sales performance in specific areas, including Slim•Fast and prestige
fragrances.
Our 2004 outlook is for low double digit growth in EPS (beia). We expect both
improved growth of our leading brands and an increased operating margin, to over
16%, to contribute to this. By the end of the year, the leading brands should
represent 95% of our business.
CORPORATE GOVERNANCE
We announced last year that we would review our current structure and processes
in the light of developments in our main reporting countries. These are
principally contained in the Combined Code, the Tabaksblat Code and
Sarbanes-Oxley legislation. That review is largely complete and we will be
proposing changes at the AGMs on 12 May.
The most important change is a move to a unitary board for both parent
companies, Unilever N.V. and Unilever PLC. Our current Advisory Directors will
be proposed as Non-Executive Directors, ensuring that both Boards will be
identical in composition and will be comprised of a majority of independent
Directors. All Directors will stand for election each year. This governance
structure will further enhance transparency and will be, at all times, subject
to shareholder choice.
'UNILEVER 2010'
Through Path to Growth we have greatly strengthened the business. We have a much
more focused brand portfolio, while major reductions in costs and streamlining
of the asset base have resulted in sharply higher margins and improved capital
efficiency. As a consequence, over the period 2000 to 2003 we have generated €16
billion of ungeared free cash flow. This creates a strong foundation for the
next phase of our development and sustained growth from anticipating evolving
consumer trends. We will continue to drive efficiency in the cost and asset base
through the scale and scope of Unilever.
Looking to financial performance beyond 2004, our priority continues to be
consistent top-third total shareholder return within our peer group. In support
of this we manage the business to deliver robust value growth, maximised through
growth in economic profit and cash flow. We believe that our approach to value
creation can be best expressed externally through the combination of ungeared
free cash flow and return on invested capital. Over the period 2005 to 2010 we
expect to generate over €30 billion of ungeared free cash flow and to increase
return on invested capital to at least 17% compared with the 12.5% achieved in
2003. Our current plans are based on organic growth.
Continued strong cash flow and particularly favourable currency movements have
allowed us to reduce net debt ahead of schedule. When net debt has reached
around €10 billion, and in line with our intention to optimise our balance sheet
structure, surplus cash flow will be applied to enhance shareholder return.
N W A FitzGerald A Burgmans
Chairman, Unilever PLC Chairman, Unilever N.V.
12 February 2004
FOURTH QUARTER AND FULL YEAR 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 15.
Underlying sales grew by 1.5% in the year and declined by 0.5% in the quarter
against a particularly strong fourth quarter in the prior year (+7%). As part of
the reshaping of our portfolio within Path to Growth we have continued to pursue
an active programme of business disposals. After the impact of these disposals,
turnover was 2.2% lower for the year and 3.6% lower in the quarter.
Operating margin (beia) for the year was 15.7%, an increase of 120 basis points
over last year, through the benefits of the Path to Growth savings programmes,
an improved mix, and after an increase of 20 basis points in advertising and
promotions.
Operating margin (beia) in the quarter was 16.6%, an increase of 350 basis
points over the prior year. Within this, 160 basis points came from a lower
level of advertising and promotions, which is particularly influenced by the
high comparator in the fourth quarter of 2002.
The improved margins are also reflected in operating profit (beia) which was
ahead by 6% for the year, and by 22% for the quarter.
Amortisation of goodwill and intangible assets within operating profit was
€1,298 million in the year and €334 million in the quarter.
Net borrowing costs were 13% lower for the year, and 11% lower for the quarter
through the impact of a lower level of net debt. Pension financing represented a
charge of €187 million for the year which compares with a credit of €108 million
in the prior year.
Net exceptional charges within operating profit were €137 million in the year.
This includes restructuring costs of €507 million and net profits on disposals
of €370 million. Within the quarter, exceptional charges of €36 million comprise
restructuring costs of €224 million and net profits on disposals of €188
million.
The effective tax rate for the year was 34% and reflects the
non-tax-deductibility of Bestfoods goodwill amortisation. The beia tax rate for
the year was 29%, compared with 30% last year, with sustained benefits flowing
from the Path to Growth programme.
Net profit (beia) was up 10% in the year and 22% in the quarter to €4,277
million and €1,153 million respectively. Net profit was 38% higher for the year
and 199% higher for the quarter mainly due to lower after-tax exceptional items,
with higher net profits on disposals and lower restructuring costs.
Earnings per share (beia) rose by 11% in the year and by 23% in the quarter,
while earnings per share was 40% higher for the year and 203% higher in the
quarter.
When expressed at current rates of exchange, earnings per share (beia) for the
year increased by 2% in Euros, by 12% in £ Sterling and by 22% in US$. Turnover,
including the impact of disposals and expressed at current rates of exchange,
decreased by 12% in Euros, decreased by 3% in £ Sterling, and increased by 5% in
US$.
FULL YEAR 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
Difficult economic conditions in a number of countries have been reflected in
the consumer, retail and competitive environment in 2003 and in general market
growth rates have slowed significantly. Against this background, underlying
sales grew by 0.6%, with volume ahead by 0.4%. Turnover was 4% lower than last
year through the impact of planned disposals.
There has been continued strong growth in mass personal care partly offset by a
sharp decline in prestige fragrances and the impact of price competitive markets
in laundry. In foods, growth by category in part reflects the exceptionally hot
summer weather with strong gains in ready-to-drink tea and ice cream, but lower
consumption in savoury, frozen meals and cooking products.
Highlights of another good year in personal care were the launch of Sunsilk
across the region and the roll out of Dove shampoo. Other key innovations
included the Dove Silk hand, body and shower range, Dove exfoliating bar, new
variants of Axe and the Crystal variant of Rexona/Sure.
In laundry, good progress has been made in improving the profitability of our
business through cost reduction and a strategy of focus on priority brands and
markets. This has allowed us both to increase margins and generate the funds to
respond to increased levels of price competition which had led to the loss of
one market share point in the year, primarily to retailer own brands.
There has been good growth in spreads and cooking products for our heart health
brands Becel/Flora. For our family brands such as Rama and Blue Band we adopted
a strategy of recovering substantial increases in edible oil costs which some
competitors have not followed. However overall we have held market share. We
have a strong innovation programme planned for both family and heart health
brands into 2004. This includes the roll out of the Rama/Blue Band Finesse range
of cream alternatives and the extension of the Pro•activ brand to adjacent
categories, for which we now have regulatory clearance.
Knorr Mealkits and 'good for you' soups were successfully launched though
overall growth for the year was held back by low consumption in the very hot
summer months. Hellmann's and Bertolli both grew strongly with the latter
benefiting from extensions into pasta sauces, dressings and toppings. Growth in
Foodsolutions accelerated through the year, returning to a good level in the
second half, particularly through soups in the UK, the Bertolli range in Italy
and the launch of Knorr dairy cream alternatives in the fourth quarter.
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 also grew strongly, helped by the hot summer weather and innovations
including Magnum 7 sins, Magnum Moments, Magnum snacking bars and the roll out
of the Fruit & Fresh mix of yoghurt and ice cream.
In frozen foods we have been reshaping around faster growing segments of the
market and have been restructuring with further gains in profitability. Our
priority going forward will be to return the business to a consistent level of
sales growth through a more rapid transfer of successful concepts across
markets, including Knorr frozen, which is now in seven markets, and through
planned innovations in the areas of kids' nutrition, convenience meals and
concepts based on fresh and natural ingredients such as the recently launched
range of Steam Fresh vegetables.
The regional operating margin at 16.5% was 250 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 3.1%, including a positive 20 basis points from
pricing. The performance of Slim•Fast and prestige fragrances, in combination
with the one-off impacts of trade de-stocking and weak out of home channels in
the first half of the year diluted underlying sales growth by 3.6 percentage
points. Turnover, including the impact of disposals, declined by 7%.
In mass personal care we improved our overall market position through Axe
deodorants, and have established the Dove brand in daily hair care. In laundry
we have further improved profitability notwithstanding negative pricing through
bonus pack promotions in a competitive market in which we have lost a little
under one percentage point of market share.
Our prestige fragrance business has declined in weak markets. Our priority has
been to restructure the business onto a more robust footing. We have refocused
the brand portfolio and we are reducing costs to release funds for future
investment behind innovation in the leading brands.
Unilever Bestfoods sales grew in a competitive market and in a year in which we
succesfully introduced a new 'go to market' approach. Particular strengths were
Hellmann's, Lipton and Bertolli through pasta sauces and frozen foods, Becel
margarine in Canada and Lawry's through the new Spice Blends steak sauce. These
good performances were partly offset by declines in spreads consumption because
of lower butter prices, and by declines in Bertolli olive oil and in Ragu pasta
sauces due to changes in our approach to promotional plans and timing.
In ice cream we continue to grow well and gain market share, notwithstanding
weak out of home markets. Good Humor and Breyers performed strongly in grocery
channels including the extension of the health range and the introduction of
Slim•Fast.
Our Foodsolutions business moved ahead despite weak market conditions with a
stronger performance in the second half of the year.
Slim•Fast has been heavily affected by changing consumer tastes and dieting
choices. We have responded with the launch of a range of new products in the
second half of the year, and a relaunch of the brand at the start of 2004. We
remain confident in the longer term growth opportunity based on our leadership
of this large growth market and the proven approach of Slim•Fast to healthy
weight management underpinned by clinical studies and continued strong
endorsement from the medical profession.
The regional operating margin at 16.9% was 40 basis points ahead of the prior
year.
AFRICA, MIDDLE EAST AND TURKEY
Underlying sales grew 7% with 5 percentage points from volume growth. Turnover
grew 5% including the net impact of acquisitions and disposals.
Innovations behind the Surf and Omo brands were the drivers of an excellent
performance in laundry. In personal care, Dove, Lux and Rexona all grew at over
20%, while Sunsilk has achieved the leading position in hair care in Turkey.
In Foods, growth in savoury was led by Knorr, including the launch into a number
of countries in the Middle East. Ice cream and Lipton tea also grew well, while
volumes declined in cooking oils, especially in French West Africa.
The regional operating margin at 13.3% was 250 basis points ahead of last year
mainly through higher gross margins from production cost reduction, the benefits
of volume growth and the reversal of previous devaluation-led cost increases.
ASIA AND PACIFIC
Underlying sales grew by 3.7%, almost entirely from volume. Turnover, including
the net impact of acquisitions and disposals, increased by 2.7%.
In our Home & Personal Care consumer business, growth has been strong and
broad-based across categories. Activities behind Lux included the launch of the
Lux Spa range in Japan and Lux Super Rich shampoo in a number of markets.
Lifebuoy was relaunched in India with new variants and the distribution of
Lifebuoy shampoo was extended in Indonesia. Pond's growth was led by the launch
of mini pack moisturisers in Indonesia and good performances in China and India.
The launch of the 'no marks' variant boosted growth of Fair & Lovely in India.
Laundry benefited from activities including the relaunch of Breeze Colour in
Thailand, improved formulations in Vietnam and launches of variants of Surf with
fabric conditioner, and a Surf bar with bleach in the Philippines. Sales in low
margin, non-consumer businesses were sharply lower, as planned.
In Foods the main focus in the year was improving the overall shape of the
business. This included acquiring the outstanding part of the CPC/Ajinomoto
joint venture, disposing of, or withdrawing from, several non-leading brands and
improving the distribution system in the Philippines. This was reflected in a
progressive pick up in the growth of the leading brands over the year. Indonesia
has made further progress with Royco, Bango and Sariwangi as we improved
distribution. In leaf tea Brooke Bond was relaunched in India and Lipton green
tea bags were launched in China. Knorr Soupy Snax were launched in India and the
Knorr brand has grown well in China.
The regional operating margin at 14.4% was 20 basis points ahead of the previous
year after a 40 basis points increase in advertising and promotions.
LATIN AMERICA
Underlying sales grew by 8%, entirely through pricing as we recovered earlier
devaluation-led cost increases. The speed of economic recovery is, however,
uneven and Brazil in particular remains weak whilst we have seen a strong
improvement in Argentina. Home & Personal Care moved back into positive volume
growth in the second half of the year, but this was offset by continuing market
declines in Food categories resulting in a 2.2% overall volume decline for the
year. Including the impact of disposals, turnover increased 5%.
The key drivers of growth have been our Personal Care brands: Lux, which has
been relaunched with innovations in both product and packaging; Sunsilk,
including the test launch of hair colourants in Argentina, Mexico and Brazil and
the success of the Lisage hair straightening variant; Rexona with the launch of
a deodorant spray in Colombia and Venezuela; and Axe with the launch of new
variants and extension to new geographies.
In laundry we have continued to hold strong share positions and have delivered
good growth. A series of innovations were introduced under the Omo, Radiant and
Surf brands and fabric conditioners in Argentina performed particularly well.
In Foods, markets continue to be competitive and consumption remains weak,
especially in Brazil. Nonetheless we have continued to improve the base of our
business. Innovations have boosted strong growth for the AdeS soya based drink.
Arisco has grown well in Brazil, showing the value of alternative 'smart choice'
brands in a difficult economy. The savoury portfolio has been strengthened
through the migration of the CICA brand to Knorr in Brazil and the introduction
of Knorr to Central America. 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.
The regional operating margin at 14.2% was 10 basis points ahead of last year
with an improvement in gross margin partly reinvested in increased advertising
and promotions. We are making good progress with savings programmes and have
been progressively recovering the impact of devaluation-led cost increases.
RESULTS AT CURRENT EXCHANGE RATES
During the year the average exchange rate for the Euro strengthened by 10%
against a representative basket of currencies for Unilever. Reported at current
exchange rates, turnover and operating profit beia were 10% lower than at
constant exchange rates. EPS beia growth for the year was 9% lower, at 2%.
FINAL DIVIDEND
The Boards will recommend to the Annual General Meetings, to be held on 12 May
2004, a final dividend of €1.15 per €0.51* ordinary share of Unilever N.V. and a
final dividend of 11.92p per 1.4p ordinary share of Unilever PLC. This will
bring the total dividend to €1.74 per ordinary share of €0.51*, an increase of
2% over last year and 18.08p per ordinary share of 1.4p, an increase of 13% over
last year.
* 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 operating activities for the year at €6.8 billion was €1.1
billion lower than last year. Group operating profit was €0.5 billion higher,
however this includes depreciation charges lower by €0.5 billion and a benefit
of €0.5 billion from non-cash provision movements and profits on disposal.
Working capital outflows of €0.2 billion in the year compare with inflows of
€0.4 billion in the prior year. This was largely due to a different pattern of
brand investment and sales development between the two years. Notwithstanding
these timing differences we continue to make good progress in reducing average
working capital for the year, from 4.9% of turnover in 2002 to 3.7% in 2003.
Net interest payments reduced by €0.3 billion due to lower debt. This was offset
by a €0.1 billion increase in dividends paid to minority shareholders. Capital
expenditure and costs of purchasing shares to hedge share options were €0.4
billion lower than last year, with the sale of a fixed-rate investment
contributing a further €0.3 billion. The net effect of acquisitions and
disposals was €1.1 billion lower than last year, which included the sale of the
DiverseyLever business.
BALANCE SHEET (at current exchange rates)
Goodwill and intangible assets decreased by €2.6 billion this year, with €1.9
billion due to currency movements. Amortisation of €1.1 billion was offset by a
net addition to goodwill of €0.4 billion from acquisition and disposal activity
in the year. Net debt decreased by €2.1 billion through cash flow from
operations and proceeds of disposals with a further €2.3 billion reduction
through currency movements, mainly on our US dollar debt. The net liability for
pensions, accounted for under FRS 17, decreased by €0.2 billion to €3.8 billion.
Capital and reserves have increased by €1.2 billion, of which the net profit for
the year was €2.8 billion. Dividends were €1.7 billion and purchases of own
shares to hedge share options were € 0.4 billion. Currency retranslation added a
net €0.2 billion to reserves this year, with the positive impact of a stronger
euro on negative book reserves in the US more than offsetting the negative
impact of the stronger euro on reserves elsewhere.
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 Private Securities Litigation Reform Act
of 1995. Words such as 'expects', 'anticipates', 'intends' and other similar
expressions of future performance or results 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. Because of the risks and uncertainties that
always exist in any operating environment or business, the Group cannot give any
assurance that the expectations expressed in these statements will prove
correct. Actual results may differ materially from those included in these
statements due to a variety of factors, including, among others, competitive
pricing and activities, consumption levels, costs, the ability to maintain and
manage key customer relationships and supply chain sources, currency values,
interest rates, the ability to integrate acquisitions and complete planned
divestitures, physical risks, environmental risks, the ability to manage
regulatory, tax and legal matters and resolve pending matters within current
estimates, legislative, fiscal and regulatory developments, and political,
economic and social conditions in the geographic markets where the Group
operates. The Group undertakes no obligation to publicly update any
forward-looking statement, whether as a result of new information, future events
or otherwise, and you are cautioned not to place undue reliance on these
forward-looking statements. Further details of potential risks and uncertainties
affecting the Group are described in the Group's filings with the Securities and
Exchange Commission, including the Annual Report and Accounts on Form 20-F.
CONSOLIDATED PROFIT AND LOSS ACCOUNT - CONSTANT EXCHANGE RATES (unaudited)
Note: A description of the exchange rate conventions used is given on page 14.
Fourth Quarter € Millions - constant rates Full Year
---------------------------- ----------------------------
2003 2002 % Incr./ 2003 2002 % Incr./
Restated (Decr.) Restated (Decr.)
11,925 12,373 (4)% TURNOVER 47,700 48,760 (2)%
(63) (111) Less: Share of turnover of (279) (490)
------------------ joint ventures ------------------
11,862 12,262 (3)% Group turnover 47,421 48,270 (2)%
------------------ ------------------
1,602 701 128% Group operating profit 6,014 5,007 20%
10 23 Add: Share of operating 52 84
profit of joint ventures
------------------ ------------------
1,612 724 122% OPERATING PROFIT 6,066 5,091 19%
----------------------------------------------------------------------------------------
1,982 1,620 22% Operating profit beia * 7,501 7,054 6%
(36) (591) Exceptional items (137) (702)
(334) (305) Amortisation of goodwill (1,298) (1,261)
and intangibles
----------------------------------------------------------------------------------------
14 9 Share of operating profit 30 34
of associates
12 6 Other income from fixed 1 (7)
investments
(259) (292) Interest (1,026) (1,173)
(45) 27 Other finance income/ (187) 108
(cost) - pensions and
similar obligations
------------------- -------------------------- ------------------
1,334 474 182% PROFIT BEFORE TAXATION 4,884 4,053 21%
(440) (111) Taxation (1,656) (1,605)
------------------- ------------------
894 363 146% PROFIT AFTER TAXATION 3,228 2,448 32%
(83) (92) Minority interests (286) (312)
------------------- ------------------
811 271 199% NET PROFIT 2,942 2,136 38%
------------------- ------------------
----------------------------------------------------------------------------------------
1,153 942 22% Net profit beia * 4,277 3,902 10%
----------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------
COMBINED EARNINGS PER
SHARE
(Constant rates)
0.83 0.27 203% - per €0.51 ordinary NV 3.01 2.14 40%
share (Euros)
12.48 4.13 203% - per 1.4p ordinary PLC 45.12 32.16 40%
share (Euro cents)
1.19 0.96 23% - per €0.51 ordinary NV 4.39 3.95 11%
share - beia * (Euros)
17.80 14.46 23% - per 1.4p ordinary PLC 65.79 59.27 11%
share - beia * (Euro cents)
0.81 0.27 202% - per €0.51 ordinary NV 2.92 2.08 40%
share - diluted (Euros)
12.11 4.01 202% - per 1.4p ordinary PLC 43.80 31.20 40%
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
options (see notes on page 15).
CONSOLIDATED PROFIT AND LOSS ACCOUNT - 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 14.
Fourth Quarter € Millions - current rates Full Year
---------------------------- -------------------------
2003 2002 % Incr./ 2003 2002 % Incr./
Restated (Decr.) Restated (Decr.)
10,490 11,856 (12)% TURNOVER 42,942 48,760 (12)%
(55) (106) Less: Share of turnover of (249) (490)
joint ventures
------------------ ------------------
10,435 11,750 (11)% Group turnover 42,693 48,270 (12)%
------------------ ------------------
1,409 642 119% Group operating profit 5,483 5,007 10%
8 23 Add: Share of operating 46 84
profit of joint ventures
1,417 665 113% OPERATING PROFIT 5,529 5,091 9%
-----------------------------------------------------------------------------------------
1,727 1,546 12% Operating profit beia * 6,772 7,054 (4)%
(22) (592) Exceptional items (100) (702)
(288) (289) Amortisation of goodwill (1,143) (1,261)
and intangibles
-----------------------------------------------------------------------------------------
12 9 Share of operating profit 25 34
of associates
8 6 Other income from fixed (3) (7)
investments
(210) (271) Interest (847) (1,173)
(39) 27 Other finance income/(cost) (166) 108
- pensions and similar
obligations
------------------ ------------------
1,188 436 173% PROFIT BEFORE TAXATION 4,538 4,053 12%
(388) (94) Taxation (1,527) (1,605)
------------------ ------------------
800 342 134% PROFIT AFTER TAXATION 3,011 2,448 23%
(70) (90) Minority interests (249) (312)
------------------ ------------------
730 252 189% NET PROFIT AT EXCHANGE 2,762 2,136 29%
RATES
CURRENT IN EACH PERIOD
------------------ ------------------
---------------------------------------------------------------------------------------
1,019 908 12% Net profit beia * 3,923 3,902 1%
---------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------
COMBINED EARNINGS PER SHARE
(Current rates)
0.75 0.25 192% - per €0.51 ordinary NV 2.82 2.14 32%
share (Euros)
11.23 3.85 192% - per 1.4p ordinary PLC 42.33 32.16 32%
share (Euro cents)
1.05 0.93 13% - per €0.51 ordinary NV 4.02 3.95 2%
share - beia * (Euros)
15.72 13.94 13% - per 1.4p ordinary PLC 60.31 59.27 2%
share - beia * (Euro cents)
0.73 0.25 192% - per €0.51 ordinary NV 2.74 2.08 32%
share - diluted (Euros)
10.89 3.73 192% - per 1.4p ordinary PLC 41.09 31.20 32%
share - diluted (Euro cents)
---------------------------------------------------------------------------------------
Preference dividends (27) (42)
Dividends on ordinary (1,682) (1,659)
capital
------------------
Result for the year 1,053 435
retained
------------------
* Before exceptional items and amortisation of goodwill and intangibles
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES (unaudited)
€ Millions - current rates Full Year
------------------
2003 2002
Restated
Net profit 2,762 2,136
Unrealised gain on partial disposal of a group - 56
company
Pensions - actuarial gains/(losses) net of tax (28) (2,811)
Currency retranslation 159 (1,567)
-------------------
Total recognised gains/(losses) for the period 2,893 (2,186)
--------
Adjustment related to prior year restatement (1,165)
--------
Total recognised gains/(losses) since last annual 1,728
accounts
--------
MOVEMENTS IN SHAREHOLDERS' EQUITY (unaudited)
€ Millions - current rates Full Year
-------------------
2003 2002
Restated
Shareholders' equity as at 1 January (1) 4,702 8,437
Net profit 2,762 2,136
Dividends (1,709) (1,701)
Goodwill written back on disposals 135 458
Unrealised gain on partial disposal of a group - 56
company
Currency retranslation 250 (1,502)
Change in number of shares or certificates of (400) (556)
shares held in connection with share options
Pensions - actuarial gains/(losses) net of tax (28) (2,811)
Share option credit 208 185
--------------------
Shareholders' equity as at 31 December 5,920 4,702
--------------------
SUMMARY BALANCE SHEET (unaudited)
€ Millions - current rates As at 31
December
-------------------
2003 2002
Restated
Goodwill and intangible assets 17,713 20,274
Other fixed assets 6,854 8,115
Stocks 4,175 4,500
Debtors 5,881 6,571
Cash and current investments 3,345 2,904
Trade and other creditors (10,304) (11,659)
--------------------
27,664 30,705
--------------------
Borrowings 15,900 19,870
Provisions for liabilities and charges (excluding 1,645 1,578
pensions and similar obligations)
Net pension asset for funded schemes in surplus (490) (381)
Net pension liability for funded schemes in 4,249 4,317
deficit and unfunded schemes
Minority interests 440 619
Capital and reserves 5,920 4,702
-------------------
27,664 30,705
-------------------
Restatements relate to the implementation of FRS 17 'Retirement Benefits', a
change in the accounting policy for share option costs and in the presentation
of securities held as collateral (see notes on page 15).
€ Millions - current rates As at 1 January
------------------
2003 2002
(1) Shareholders' equity as previously reported 5,867 6,993
Change in accounting policy - pensions (1,238) 1,444
Change in accounting policy - share options 73 -
------------------
Shareholders' equity as restated 4,702 8,437
------------------
CASH FLOW STATEMENT (unaudited)
€ Millions - current rates Full Year
---------------
2003 2002
Restated
Cash flow from group operating activities 6,780 7,883
Dividends from joint ventures 52 83
Returns on investments and servicing of finance (1,180) (1,386)
Taxation (1,423) (1,817)
Capital expenditure and financial investment (1,024) (1,706)
Acquisitions and disposals 622 1,755
Dividends paid on ordinary share capital (1,715) (1,580)
CASH INFLOW / (OUTFLOW) BEFORE MANAGEMENT OF 2,112 3,232
LIQUID RESOURCES AND FINANCING
Management of liquid resources (41) (592)
Financing (2,917) (3,078)
--------------------
INCREASE / (DECREASE) IN CASH IN THE PERIOD (846) (438)
--------------------
RECONCILIATION OF CASH FLOW TO MOVEMENT IN NET DEBT (unaudited)
€ Millions - current rates Full Year
---------------------
2003 2002
Restated
NET DEBT AT 1 JANUARY (16,966) (23,199)
---------------------
INCREASE / (DECREASE) IN CASH IN THE PERIOD (846) (438)
Cash flow from (increase) / decrease in 2,909 3,087
borrowings
Cash flow from increase / (decrease) in liquid 41 592
resources
---------------------
Change in net debt resulting from cash flows 2,104 3,241
Borrowings within group companies acquired (25) (77)
Borrowings within group companies sold 5 20
Liquid resources within group companies sold (3) (1)
Non cash movements 690 1,467
Currency retranslation 1,640 1,583
---------------------
MOVEMENT IN NET DEBT IN THE PERIOD 4,411 6,233
---------------------
NET DEBT AT 31 DECEMBER (12,555) (16,966)
---------------------
GEOGRAPHICAL ANALYSIS (unaudited)
Fourth Quarter € Millions Full Year
-------------------------- -----------------------------------------
Constant Rates Current Constant Rates
Rates
-------------------------- -----------------------------
2002 % Incr./ 2002 % Incr./
2003 Restated (Decr.) 2003 2003 Restated (Decr.)
----------------------------------------------------------------------------------------------------------
11,925 12,373 (4)% TURNOVER 42,942 47,700 48,760 (2)%
----------------------------------------------------------------------------------------------------------
4,536 4,825 (6)% Europe 18,297 18,809 19,657 (4)%
2,888 3,066 (6)% North America 9,869 11,710 12,568 (7)%
874 852 3% Africa, Middle East & Turkey 3,302 3,390 3,225 5%
2,076 2,084 0% Asia and Pacific 7,094 8,076 7,865 3%
1,551 1,546 0% Latin America 4,380 5,715 5,445 5%
----------------------------------------------------------------------------------------------------------
1,982 1,620 22% OPERATING PROFIT - beia * 6,772 7,501 7,054 6%
----------------------------------------------------------------------------------------------------------
649 563 15% Europe 3,032 3,101 2,746 13%
665 520 28% North America 1,660 1,975 2,070 (5)%
119 62 93% Africa, Middle East 438 450 349 29%
& Turkey
308 272 13% Asia and Pacific 1,024 1,166 1,119 4%
241 203 19% Latin America 618 809 770 5%
----------------------------------------------------------------------------------------------------------
16.6% 13.1% OPERATING MARGIN - beia * 15.8% 15.7% 14.5%
----------------------------------------------------------------------------------------------------------
14.3% 11.7% Europe 16.6% 16.5% 14.0%
23.1% 17.0% North 16.8% 16.9% 16.5%
13.6% 7.2% America
Africa, Middle East
& Turkey
14.8% 13.0% Asia and Pacific 14.4% 14.4% 14.2%
15.6% 13.1% Latin America 14.1% 14.2% 14.1%
----------------------------------------------------------------------------------------------------------
* Before exceptional items and amortisation of goodwill and intangibles
OPERATIONAL ANALYSIS (unaudited)
Fourth Quarter € Millions Full Year
-------------------------------- ----------------------------------------
Constant Rates Current Constant Rates
Rates
2002 % Incr./ 2002 % Incr./
2003 Restated (Decr) 2003 2003 Restated (Decr.)
-------------------------------------------------------------------------------------------------------------------
11,925 12,373 (4)% TURNOVER 42,942 47,700 48,760 (2)%
-------------------------------------------------------------------------------------------------------------------
6,411 6,821 (6)% Foods 24,200 26,470 27,390 (3)%
-------------------------------------------------------------------------------------------------------------------
2,590 2,649 (2)% Savoury and 8,609 9,482 9,503 0%
Dressings
1,465 1,695 (14)% Spreads and Cooking 5,028 5,419 6,216 (13)%
Products
974 1,045 (7)% Health & Wellness and 3,569 4,052 4,215 (4)%
Beverages
1,382 1,432 (4)% Ice Cream and Frozen 6,994 7,517 7,456 1%
-------------------------------------------------------------------------------------------------------------------
2,034 2,050 (1)% Home Care 7,230 8,034 8,579 (6)%
3,335 3,314 1% Personal Care 11,153 12,784 12,245 4%
145 188 (23)% Other Operations 359 412 546 (25)%
-------------------------------------------------------------------------------------------------------------------
1,982 1,620 22% OPERATING PROFIT - beia * 6,772 7,501 7,054 6%
-------------------------------------------------------------------------------------------------------------------
1,072 950 13% Foods 3,900 4,226 3,885 9%
-------------------------------------------------------------------------------------------------------------------
558 516 8% Savoury and 1,496 1,642 1,483 11%
Dressings
284 291 (2)% Spreads and Cooking 865 911 967 (6)%
Products
183 175 5% Health & Wellness and 527 603 602 0%
Beverages
47 (32) 245% Ice Cream and Frozen 1,012 1,070 833 28%
Foods
-------------------------------------------------------------------------------------------------------------------
244 151 62% Home Care 914 996 917 9%
666 496 34% Personal Care 1,964 2,283 2,210 3%
- 23 (97)% Other Operations (6) (4) 42 (109)%
-------------------------------------------------------------------------------------------------------------------
16.6% 13.1% OPERATING MARGIN - beia * 15.8% 15.7% 14.5%
-------------------------------------------------------------------------------------------------------------------
16.7% 13.9% Foods 16.1% 16.0% 14.2%
21.5% 19.5% Savoury and Dressings 17.4% 17.3% 15.6%
19.4% 17.2% Spreads and Cooking 17.2% 16.8% 15.5%
Products
18.8% 16.7% Health & Wellness and 14.8% 14.9% 14.3%
Beverages
3.4% (2.2)% Ice Cream and Frozen 14.5% 14.2% 11.2%
Foods
-------------------------------------------------------------------------------------------------------------------
12.0% 7.4% Home Care 12.6% 12.4% 10.7%
20.0% 15.0% Personal Care 17.6% 17.9% 18.1%
0.4% 12.5% Other Operations (1.9)% (0.9)% 7.8%
-------------------------------------------------------------------------------------------------------------------
* 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 8 and the segmental
analysis on pages 12 and 13, 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 profit and loss account information given on page 9 and the cash flow
statement on page 11 are translated at rates current in each period. For our
reporting currencies these rates were €1 = £0.69 = US $1.13 for 2003 and €1 =
£0.63 = US $0.94 for 2002. Additional segmental analysis translated at current
exchange rates is given on pages 12 and 13.
As a result of the strengthening Euro, when expressed at current rates of
exchange, earnings per share (beia) for the year increased by 2% in Euros,
increased by 12% in £ Sterling and increased by 22% in US$.
The balance sheet figures have been translated at period-end rates of exchange.
For our reporting currencies these were
€1 = £0.71 = US $1.26 at 31 December 2003 and €1 = £0.65 = US $1.05 at 31
December 2002.
Results at current rates of exchange
The impact of exchange rate movements on the results at current exchange rates
in Euros, £ Sterling and US $ is given below, along with the year on year
percentage change at constant rates.
Full Year - Constant rates At current rates of exchange
Millions
-------------------------------------------------------------
% Incr. € % Incr. £ % Incr. US $ % Incr.
/(Decr.) 2003 /(Decr.) 2003 /(Decr.) 2003 /(Decr.)
-------------------------------------------------------------------------------------------
Turnover (2)% 42,942 (12)% 29,682 (3)% 48,353 5%
Operating
profit beia * 6% 6,772 (4)% 4,681 6% 7,625 15%
Net profit 38% 2,762 29% 1,909 42% 3,109 55%
-------------------------------------------------------------------------------------------
Net profit beia * 10% 3,923 1% 2,712 11% 4,417 20%
-------------------------------------------------------------------------------------------
% Change in EPS 40% 32% 45% 58%
% Change in EPS - beia * 11% 2% 12% 22%
* Before exceptional items and amortisation of goodwill and intangibles
Acquisitions
During the fourth quarter we bought out the minority interest in Bestfoods
Guangzhao (China) for €5.7 million.
Disposals
During the fourth quarter we sold a number of brands as part of our Path to
Growth programme. These included Ambrosia (UK and Ireland) for €145 million, Bio
Presto (Italy) for €45 million and oral care brands (North America) for €92
million.
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 net pension liabilities have increased by €1,162
million (2002: decrease of €2,817 million). Deferred tax within pension assets
and liabilities has been reduced by €1,575 million (2002: reduction of €643
million). The change in debtors because of changes in pension assets and
deferred tax is a net reduction of €1,660 million in the 2003 opening balance
(2002: reduction of €2,010 million). Minority interests have also been reduced
by €9 million (2002: increase of €6 million).
In the profit and loss account for 2002, operating profit has increased by €65
million and net interest has decreased by €108 million. Total recognised gains
and losses for 2002 have reduced by €2,811 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 generally applying a Black-Scholes based valuation spread over the
vesting period of the option.
Operating profit for 2002 now includes a charge of €185 million, an increase of
€99 million. In 2003, a charge of €208 million (at current exchange rates) has
been included in operating profit. In the 2003 opening balance sheet, €73
million has been reclassified from creditors to capital and reserves.
Securities held as collateral
During 2003 Unilever changed its presentation of securities received and held as
collateral in respect of derivative financial instruments. Until 2002 Unilever
presented such collateral under cash and borrowings respectively. Because, in
normal circumstances, Unilever has to return the securities in the same form as
the original security received, and Unilever does not retain the benefit of any
dividends or interest on those securities, they are not presented as assets and
liabilities of the Group. As a result, both cash and borrowings at 31 December
2002 have been reduced by €574 million.
Definitions
Ungeared free cash flow is defined as cash flow from group operating activities,
less capital expenditure and financial investment and less a tax charge adjusted
to reflect an ungeared position.
Return on invested capital is defined as profit before interest and amortisation
of goodwill and after tax, divided by invested capital. Invested capital is
defined as fixed assets plus working capital plus goodwill, including goodwill
written off under previous accounting standards or since amortised.
The financial statements attached have been prepared in accordance with the
accounting policies set out in the company's accounts for the year ended 31
December 2002, except that the company has adopted FRS 17 (Retirement Benefits)
and a new accounting policy for share based payments in its 2003 financial
statements. The financial statements do not constitute the full financial
statements within the meaning of S240 of the Companies Act 1985. Figures
relating to the year ended 31 December 2002 are abridged. Full accounts for
Unilever for that period have been delivered to the Registrar of Companies. The
auditors' report on these accounts was unqualified and did not contain a
statement under S237(2) or S237(3) of the Companies Act 1985.
DIVIDENDS
The Boards have resolved to recommend to the Annual General Meetings to be held
on 12 May 2004 the declaration of final dividends in respect of 2003 on the
Ordinary capitals at the following rates which are equivalent in value at the
rate of exchange applied in terms of the Equalisation Agreement between the two
companies:
N.V.
€1.15 per ordinary share (2002: €1.15), bringing the total of N.V.'s dividend
for 2003 to €1.74 per ordinary share
(2002: €1.70).
PLC
11.92p per ordinary share (2002: 10.83p), bringing the total of PLC's dividend
for 2003 to 18.08p per ordinary share (2002: 16.04p).
The N.V. final dividend will be paid on 14 June 2004, to shareholders registered
at close of business on 13 May 2004.
The PLC final dividend will be paid on 14 June 2004, to shareholders registered
at close of business on 21 May 2004.
Dividend on New York shares of N.V.
US dollar cheques for the final dividend on the New York Shares of €0.51*
nominal amount after deduction of Netherlands withholding tax at the appropriate
rate, converted at the euro/dollar European Central Bank rate of exchange on 12
May 2004 will be mailed on 11 June 2004 to holders of record at the close of
business on 18 May 2004. If converted at the euro/dollar rate of exchange on 11
February 2004, the final dividend would be US $1.456766 per New York share (2002
final dividend: US $1.314105 actual payment) before deduction of Netherlands
withholding tax. With the interim dividend in respect of 2003 of US $0.688707 at
the actual euro/dollar conversion rate, already paid, this would result in a
total for interim and final dividends in respect of 2003 of US $2.145473 per New
York Share (2002: US $1.854205 actual payment).
* 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
US Dollar cheques for the final dividend on the American Depositary Receipts in
PLC converted at the sterling/dollar rate of exchange current in London on 12
May 2004 will be mailed on 11 June 2004 to holders of record at the close of
business on 21 May 2004. Each American Depositary Receipt in PLC represents four
1.4p ordinary shares in PLC. The PLC final dividend will therefore be 47.68p per
American Depositary Receipt in PLC. If converted at the sterling/dollar rate of
exchange on 11 February 2004, the PLC final dividend would be US $0.8918 per
American Depositary Receipt in PLC (2002 final dividend: US $0.6959 actual
payment). With the interim dividend in respect of 2003 of US $0.4167 at the
actual sterling/dollar conversion rate, already paid, this would result in a
total for interim and final dividends in respect of 2003 of US $1.3085 per
American Depositary Receipt in PLC (2002: US $1.0206 actual payment).
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 year
Constant rates Current rates
--------------------------------------------------
2003 2002 2003 2002
Restated Restated
Thousands of units
Average number of 968,907 976,743 968,907 976,743
combined share units
of €0.51
Average number of 6,459,377 6,511,620 6,459,377 6,511,620
combined share units
of 1.4p
COMBINED EPS € Millions
--------------
Net profit 2,942 2,136 2,762 2,136
Less: Preference (27) (42) (27) (42)
dividends
-------------------------------------------------
Net profit attributable 2,915 2,094 2,735 2,094
to ordinary capital
-------------------------------------------------
-------------------------------------------------
Combined EPS per €0.51 3.01 2.14 2.82 2.14
(Euros)
Combined EPS per 1.4p 45.12 32.16 42.33 32.16
(Euro cents)
-------------------------------------------------
COMBINED EPS - beia * € Millions
-----------------------
Net profit 2,942 2,136 2,762 2,136
Add back exceptional 96 550 67 550
items net
of tax
Add back amortisation of 1,239 1,216 1,094 1,216
goodwill / intangibles
net of
tax
-------------------------------------------------
Net profit beia * 4,277 3,902 3,923 3,902
Less: Preference (27) (42) (27) (42)
dividends
-------------------------------------------------
Net profit attributable
to ordinary capital - beia * 4,250 3,860 3,896 3,860
-------------------------------------------------
-------------------------------------------------
Combined EPS - beia* per 4.39 3.95 4.02 3.95
€0.51 (Euros)
Combined EPS - beia* per 65.79 59.27 60.31 59.27
1.4p (Euro cents)
-------------------------------------------------
COMBINED EPS - Diluted Thousands of units
------------------------
Adjusted average 998,141 1,006,627 998,141 1,006,627
combined share units
of €0.51
Adjusted average 6,654,276 6,710,844 6,654,276 6,710,844
combined share units
of 1.4p
€ Millions
Net profit attributable 2,915 2,094 2,735 2,094
to ordinary capital
-------------------------------------------------
Combined diluted EPS per 2.92 2.08 2.74 2.08
€0.51 (Euros)
Combined diluted EPS per 43.80 31.20 41.09 31.20
1.4p (Euro cents)
-------------------------------------------------
* Before exceptional items and amortisation of goodwill and intangibles
Dates
The Annual Report & Accounts 2003 will be published on 26 March 2004.
The provisional results for the first quarter 2004 will be published on
Wednesday 28 April 2004.
Salient figures for the above results will be published in the Financial Times
and Daily Telegraph on Friday, 13 February 2004.
12 February 2004
CONSOLIDATED PROFIT AND LOSS ACCOUNT - CONSTANT EXCHANGE RATES (unaudited)
Note: A description of the exchange rate conventions used is given on page 14.
Fourth Quarter £ Millions - constant Full Year
rates
--------------------------- -----------------------------
2003 2002 % Incr./ 2003 2002 % Incr./
Restated (Decr.) Restated (Decr.)
7,489 7,770 (4)% TURNOVER 29,956 30,621 (2)%
(39) (70) Less: Share of turnover of (175) (308)
joint ventures
------------------ ------------------
7,450 7,700 (3)% Group turnover 29,781 30,313 (2)%
------------------ ------------------
1,006 440 128% Group operating profit 3,777 3,143 20%
6 15 Add: Share of operating 33 53
------------------ profit of joint ventures ------------------
1,012 455 122% OPERATING PROFIT 3,810 3,196 19%
---------------------------------------------------------------------------------------
1,245 1,018 22% Operating profit beia * 4,711 4,429 6%
(23) (372) Exceptional items (86) (441)
(210) (191) Amortisation of goodwill (815) (792)
and intangibles
---------------------------------------------------------------------------------------
10 5 Share of operating profit 19 21
of associates
8 4 Other income from fixed 1 (4)
investments
(163) (184) Interest (645) (737)
(29) 17 Other finance income/ (118) 68
(cost) - pensions and
similar obligations
------------------ ------------------
838 297 182% PROFIT BEFORE TAXATION 3,067 2,544 21%
(277) (69) Taxation (1,040) (1,007)
------------------ ------------------
561 228 146% PROFIT AFTER TAXATION 2,027 1,537 32%
(52) (58) Minority interests (179) (196)
------------------ ------------------
509 170 199% NET PROFIT 1,848 1,341 38%
------------------ ------------------
---------------------------------------------------------------------------------------
725 592 22% Net profit beia * 2,686 2,450 10%
---------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------
COMBINED EARNINGS PER
SHARE
(Constant rates)
7.84 2.59 203% - per 1.4p ordinary PLC 28.34 20.19 40%
share (pence)
11.17 9.08 23% - per 1.4p ordinary PLC 41.31 37.22 11%
share - beia * (pence)
7.61 2.51 202% - per 1.4p ordinary PLC 27.51 19.59 40%
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 15).
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 14.
Fourth Quarter £ Millions - current Full Year
rates
---------------------------- ----------------------------
2003 2002 % Incr./ 2003 2002 % Incr./
Restated (Decr.) Restated (Decr.)
7,310 7,512 (3)% TURNOVER 29,682 30,621 (3)%
(39) (68) Less: Share of turnover of (172) (308)
joint ventures
----------------- ------------------
7,271 7,444 (2)% Group turnover 29,510 30,313 (3)%
----------------- ------------------
982 411 139% Group operating profit 3,790 3,143 21%
6 14 Add: Share of operating 32 53
profit of joint ventures
----------------- ------------------
988 425 132% OPERATING PROFIT 3,822 3,196 20%
----------------------------------------------------------------------------------------
1,203 980 23% Operating profit beia * 4,681 4,429 6%
(15) (371) Exceptional items (69) (441)
(200) (184) Amortisation of goodwill (790) (792)
and intangibles
----------------------------------------------------------------------------------------
8 5 Share of operating profit 17 21
of associates
6 4 Other income from fixed (2) (4)
investments
(147) (172) Interest (586) (737)
(27) 17 Other finance income/ (114) 68
(cost) - pensions and
similar obligations
------------------- ------------------
828 279 196% PROFIT BEFORE TAXATION 3,137 2,544 23%
(271) (61) Taxation (1,056) (1,007)
------------------- ------------------
557 218 155% PROFIT AFTER TAXATION 2,081 1,537 35%
(49) (57) Minority interests (172) (196)
------------------- ------------------
508 161 214% NET PROFIT AT EXCHANGE 1,909 1,341 42%
RATES
CURRENT IN EACH PERIOD
------------------- ------------------
---------------------------------------------------------------------------------------
710 575 23% Net profit beia * 2,712 2,450 11%
---------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------
COMBINED EARNINGS PER
SHARE
(Current rates)
7.82 2.46 217% - per 1.4p ordinary PLC 29.26 20.19 45%
share (pence)
10.95 8.83 24% - per 1.4p ordinary PLC 41.69 37.22 12%
share - beia * (pence)
7.58 2.39 217% - per 1.4p ordinary PLC 28.40 19.59 45%
share - diluted (pence)
---------------------------------------------------------------------------------------
Preference dividends (19) (27)
Dividends on ordinary (1,163) (1,042)
capital
-----------------
Result for the year 727 272
retained
-----------------
* Before exceptional items and amortisation of goodwill and intangibles
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES (unaudited)
£ Millions - current rates Full Year
------------------
2003 2002
Restated
Net profit 1,909 1,341
Unrealised gain on partial disposal of a group - 35
company
Pensions - actuarial gains/(losses) net of tax (20) (1,765)
Currency retranslation 403 (720)
-------------------
Total recognised gains/(losses) for the period 2,292 (1,109)
---------
Adjustment related to prior year restatement (758)
--------
Total recognised gains/(losses) since last annual 1,534
accounts --------
MOVEMENTS IN SHAREHOLDERS' EQUITY (unaudited)
£ Millions - current rates Full Year
-----------------
2003 2002
Restated
Shareholders' equity as at 1 January (1) 3,058 5,154
Net profit 1,909 1,341
Dividends (1,182) (1,069)
Goodwill written back on disposals 93 288
Unrealised gain on partial disposal of a group 35
company
Currency retranslation 464 (693)
Change in number of shares or certificates of (276) (349)
shares held in connection with share options
Pension - actuarial gains/(losses) net of tax (20) (1,765)
Share option credit 144 116
---------------------
Shareholders' equity as at 31 December 4,190 3,058
---------------------
SUMMARY BALANCE SHEET (unaudited)
£ Millions - current rates As at 31
December
---------------------
2003 2002
Restated
Goodwill and intangible assets 12,535 13,188
Other fixed assets 4,850 5,279
Stocks 2,955 2,927
Debtors 4,162 4,274
Cash and current investments 2,367 1,889
Trade and other creditors (7,292) (7,585)
--------------------
19,577 19,972
--------------------
Borrowings 11,252 12,925
Provisions for liabilities and charges (excluding 1,164 1,026
pensions and similar obligations)
Net pension asset for funded schemes in surplus (347) (248)
Net pension liability in respect of funded schemes 3,007 2,808
in deficit and unfunded schemes
Minority interests 311 403
Capital and reserves 4,190 3,058
--------------------
19,577 19,972
--------------------
Restatements relate to the implementation of FRS 17 'Retirement Benefits', a
change in the accounting policy for share option costs and in the presentation
of securities held as collateral (see notes on page 15).
£ Millions - current rates As at 1 January
-----------------
2003 2002
(1) Shareholders' equity as previously reported 3,816 4,272
Change in accounting policy - pensions (805) 882
Change in accounting policy - share options 47 -
-------------------
Shareholders' equity as restated 3,058 5,154
-------------------
CASH FLOW STATEMENT (unaudited)
£ Millions - current rates Full Year
----------------
2003 2002
Restated
Cash flow from group operating activities 4,689 4,951
Dividends from joint ventures 36 52
Returns on investments and servicing of finance (816) (871)
Taxation (983) (1,141)
Capital expenditure and financial investment (708) (1,071)
Acquisitions and disposals 429 1,102
Dividends paid on ordinary share capital (1,186) (992)
------------------
CASH INFLOW/(OUTFLOW) BEFORE MANAGEMENT OF LIQUID 1,461 2,030
RESOURCES AND FINANCING
Management of liquid resources (29) (372)
Financing (2,016) (1,933)
-------------------
INCREASE / (DECREASE) IN CASH IN THE PERIOD (584) (275)
-------------------
RECONCILIATION OF CASH FLOW TO MOVEMENT IN NET DEBT (unaudited)
£ Millions - current rates Full Year
------------------
2003 2002
Restated
NET DEBT AT 1 JANUARY (11,036) (14,173)
------------------
INCREASE / (DECREASE) IN CASH IN THE PERIOD (584) (275)
Cash flow from (increase) / decrease in 2,011 1,938
borrowings
Cash flow from increase / (decrease) in liquid 29 372
resources
-----------------
Change in net debt resulting from cash flows 1,456 2,035
Borrowings within group companies acquired (18) (48)
Borrowings within group companies sold 3 12
Liquid resources within group companies sold (2) (1)
Non cash movements 477 921
Currency retranslation 235 218
-------------------
MOVEMENT IN NET DEBT IN THE PERIOD 2,151 3,137
-------------------
NET DEBT AT 31 DECEMBER (8,885) (11,036)
-------------------
GEOGRAPHICAL ANALYSIS (unaudited)
Fourth Quarter £ Millions Full Year
---------------------------- ----------------------------------------
Constant Rates Current Constant Rates
Rates
---------------------------- --------------------------------
2002 % Incr./ 2002 % Incr./
2003 Restated (Decr) 2003 2003 Restated (Decr.)
---------------------------------------------------------------------------------------------------------------
7,489 7,770 (4)% TURNOVER 29,682 29,956 30,621 (2)%
---------------------------------------------------------------------------------------------------------------
2,849 3,030 (6)% Europe 12,647 11,812 12,345 (4)%
1,814 1,926 (6)% North America 6,822 7,354 7,893 (7)%
548 535 3% Africa, Middle East & Turkey 2,282 2,129 2,025 5%
1,304 1,308 0% Asia and Pacific 4,903 5,072 4,939 3%
974 971 0% Latin America 3,028 3,589 3,419 5%
---------------------------------------------------------------------------------------------------------------
1,245 1,018 22% OPERATING PROFIT - beia * 4,681 4,711 4,429 6%
---------------------------------------------------------------------------------------------------------------
408 354 15% Europe 2,096 1,948 1,724 13%
419 327 28% North America 1,147 1,241 1,300 (5)%
74 39 93% Africa, Middle East & 303 282 219 29%
Turkey
193 171 13% Asia and Pacific 707 732 703 4%
151 127 19% Latin America 428 508 483 5%
---------------------------------------------------------------------------------------------------------------
16.6% 13.1% OPERATING 15.8% 15.7% 14.5%
MARGIN - beia *
---------------------------------------------------------------------------------------------------------------
14.3% 11.7% Europe 16.6% 16.5% 14.0%
23.1% 17.0% North America 16.8% 16.9% 16.5%
13.6% 7.2% Africa, Middle East & 13.3% 13.3% 10.8%
Turkey
14.8% 13.0% Asia and Pacific 14.4% 14.4% 14.2%
15.6% 13.1% Latin America 14.1% 14.2% 14.1%
---------------------------------------------------------------------------------------------------------------
* Before exceptional items and amortisation of goodwill and intangibles
OPERATIONAL ANALYSIS (unaudited)
Fourth Quarter £ Millions Full Year
------------------------ -------------------------------------------------
Constant Rates Current Rates Constant Rates
------------------------ -----------------------------------
2002 % Incr./ 2002 % Incr./
2003 Restated (Decr.) 2003 2003 Restated (Decr.)
--------------------------------------------------------------------------------------------------------------------
7,489 7,770 (4)% TURNOVER 29,682 29,956 30,621 (2)%
--------------------------------------------------------------------------------------------------------------------
4,026 4,284 (6)% Foods 16,727 16,623 17,201 (3)%
--------------------------------------------------------------------------------------------------------------------
1,627 1,663 (2)% Savoury and Dressings 5,950 5,955 5,968 0%
920 1,064 (14)% Spreads and Cooking 3,475 3,403 3,904 (13)%
Products
612 657 (7)% Health & Wellness and 2,468 2,545 2,647 (4)%
Beverages
867 900 (4)% Ice Cream and Frozen 4,834 4,720 4,682 1%
Foods
--------------------------------------------------------------------------------------------------------------------
1,277 1,287 (1)% Home Care 4,998 5,045 5,388 (6)%
2,095 2,081 1% Personal Care 7,709 8,029 7,689 4%
91 118 (23)% Other Operations 248 259 343 (25)%
--------------------------------------------------------------------------------------------------------------------
1,245 1,018 22% OPERATING PROFIT - beia * 4,681 4,711 4,429 6%
--------------------------------------------------------------------------------------------------------------------
673 596 13% Foods 2,696 2,654 2,439 9%
--------------------------------------------------------------------------------------------------------------------
351 324 8% Savoury and Dressings 1,034 1,031 931 11%
178 182 (2)% Spreads and Cooking 598 572 606 (6)%
Products
115 110 5% Health & Wellness and 364 379 378 0%
Beverages
29 (20) 245% Ice Cream and Frozen 700 672 524 28%
Foods
--------------------------------------------------------------------------------------------------------------------
153 95 62% Home Care 632 626 576 9%
419 312 34% Personal Care 1,357 1,434 1,387 3%
- 15 (97)% Other Operations (4) (3) 27 (109)%
--------------------------------------------------------------------------------------------------------------------
16.6% 13.1% OPERATING MARGIN - beia * 15.8% 15.7% 14.5%
--------------------------------------------------------------------------------------------------------------------
16.7% 13.9% Foods 16.1% 16.0% 14.2%
21.5% 19.5% Savoury and Dressings 17.4% 17.3% 15.6%
19.4% 17.2% Spreads and Cooking 17.2% 16.8% 15.5%
Products
18.8% 16.7% Health & Wellness and 14.8% 14.9% 14.3%
Beverages
3.4% (2.2)% Ice Cream and Frozen 14.5% 14.2% 11.2%
Foods
-----------------------------------------------------------------------------------------------------
12.0% 7.4% Home Care 12.6% 12.4% 10.7%
20.0% 15.0% Personal Care 17.6% 17.9% 18.1%
0.4% 12.5% Other Operations (1.9)% (0.9)% 7.8%
-----------------------------------------------------------------------------------------------------
* Before exceptional items and amortisation of goodwill and intangibles
Earnings per share in Sterling for the year
Constant rates Current rates
---------------- ---------------
2003 2002 2003 2002
------ ------ ------ ------
Restated Restated
Thousands of units
Average number of 6,459,377 6,511,620 6,459,377 6,511,620
combined share units
of 1.4p
COMBINED EPS £ Millions
--------------
Net profit 1,848 1,341 1,909 1,341
Less: Preference (17) (27) (19) (27)
dividends
------------------------------------------------
Net profit attributable 1,831 1,314 1,890 1,314
to ordinary capital
------------------------------------------------
Combined EPS per 1.4p 28.34 20.19 29.26 20.19
------------------------------------------------
COMBINED EPS - beia * £ Millions
-----------------------
Net profit 1,848 1,341 1,909 1,341
Add back exceptional 60 346 47 346
items net of tax
Add back amortisation of 778 763 756 763
goodwill / intangibles
net of tax
------------------------------------------------
Net profit beia * 2,686 2,450 2,712 2,450
Less: Preference (17) (27) (19) (27)
dividends
------------------------------------------------
Net profit attributable 2,669 2,423 2,693 2,423
to ordinary capital - beia *
------------------------------------------------
Combined EPS - beia * 41.31 37.22 41.69 37.22
per 1.4p
------------------------------------------------
COMBINED EPS - Diluted Thousands of units
------------------------
Adjusted average
combined 6,654,276 6,710,844 6,654,276 6,710,844
share units of 1.4p
£ Millions
Net profit attributable 1,831 1,314 1,890 1,314
to ordinary capital
-----------------------------------------------
Combined diluted EPS per 27.51 19.59 28.40 19.59
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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