Exhibit 99
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Unilever United States, Inc.
Media Relations Contact: Investor Relations Contact:
Nancy Goldfarb Leigh Ferst
212-906-4690 212-906-3430
FOR RELEASE AT 2:00 A.M. (EST)
UNILEVER RESULTS
FIRST QUARTER 2004
(Unaudited, constant 2003 average exchange rates, unless stated)
New York, NY - April 28, 2004 - Despite a disappointing sales performance in the
first quarter, EPS (beia) grew by 8%. The benefits of savings programmes and an
improved product mix have boosted operating margins and enabled a further
increase in brand investment designed to stimulate growth.
FINANCIAL HIGHLIGHTS
Millions
First Quarter 2004
Turnover 9,788 -2 %
Operating profit - beia* 1,455 -1 %
Pre-tax profit 931 -8 %
Net profit 530 -15 %
Net profit - beia* 851 + 7 %
EPS NV - beia * (Euros) 0.87 + 8 %
EPS PLC - beia * (Euro cents) 13.10 + 8 %
* Before exceptional items and amortisation of goodwill and intangible assets
At current rates of exchange EPS (beia) was 2% higher than the previous year and
EPS was 19% lower due to a higher level of profits on disposals in the previous
year.
KEY FEATURES OF THE QUARTER
• Sales of the leading brands grew by 1.3%, with pricing flat.
• Gross margins again moved ahead strongly despite an increased level of
consumer related price promotions. This was partly offset by phasing of
overheads and increased advertising and promotional support for our
brands.
• Operating margin (beia) moved ahead by 30 basis points to 14.9%.
• Net borrowing costs and the financing cost of pensions were reduced by 22%
and 49% respectively. Net debt, at quarter end exchange rates, was 12.6
billion, with benefits of cash flow offset by currency movements.
• EPS (beia) grew by 8%.
CHAIRMENS COMMENT
Our strategy is designed to deliver robust long-term value growth. It is strong
brands that best take advantage of our category knowledge and the scale benefits
of Unilever; they have the margin structure to support a sustained programme of
innovation and competitive levels of support. However, we are not happy with the
short-term sales performance and action is being taken to address this.
In the first quarter we have seen a continuation of the tough business
environment that we saw for much of 2003 with lower than historical market
growth. Whilst there are clear signs of an improving economic outlook we are
also currently seeing an increased level of competitor activity in some key
markets. However, with the benefit of continuing Path to Growth savings, we are
taking the appropriate tactical actions while implementing our planned
innovation and brand building activities. All this is consistent with sustaining
long-term business health and the principles of value creation outlined in
Unilever 2010.
N W A FitzGerald A Burgmans
Chairman, Unilever PLC Chairman, Unilever N.V.
28 April 2004
FIRST QUARTER 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.
Underlying sales grew by 0.4%. Within this, leading brands grew by 1.3% in
markets that have grown below their historical rate. The first quarter growth
was also influenced by one less trading day in the quarter and by lower market
shares in SlimFast and prestige as a result of the disappointing performance in
2003.
As part of the reshaping of our portfolio within Path to Growth we have
continued to pursue an active programme of business disposals. Including the
impact of these disposals, turnover declined by 2.2%.
Operating margin (beia) was 14.9%, an increase of 30 basis points. Gross margins
moved ahead strongly, by 110 basis points, through continuing benefits of
savings programmes and an improved mix and despite an increased level of
consumer related price promotions. This was partly offset by an increase of 20
basis points in advertising and promotions and an increase of 60 basis points in
overheads. The latter includes a different phasing of project related items this
year compared with last and the short-term under-recovery of shared costs
following disposals.
Operating profit (beia) was 1% lower than last year as the loss of contribution
from businesses sold more than offset the underlying improvement in operating
margin.
Net borrowing costs were 22% lower than last year through a lower level of net
debt and lower interest rates as we pay off older borrowings at higher fixed
rates. Pension financing costs were reduced to 22 million, from 43 million in
the first quarter of last year.
Net exceptional charges within operating profit were 67 million, including
restructuring charges of 95 million partly offset by profits on disposals of 28
million. This compares with a positive 67 million of exceptional items in the
prior year which included profits on disposals of 135 million.
The effective tax rate was 37% and reflects the non-tax-deductibility of
Bestfoods goodwill amortisation. The beia tax rate was 29%, 0.3 percentage
points lower than last year with sustained benefits flowing from the Path to
Growth programme.
Net profit (beia) was up 7% to 851 million. Net profit was 15% lower mainly due
to the lower after tax profits on disposals.
Earnings per share (beia) rose by 8%, after absorbing over 3 percentage points
of dilution from disposals, while earnings per share were 15% lower.
When expressed at current rates of exchange, earnings per share (beia) increased
by 2% in Euros, by 4% in Sterling and by 19% in US$. Turnover, including the
impact of disposals and expressed at current rates of exchange, decreased by 8%
in Euros and by 6% in Sterling, but increased by 7% in US$.
2
FIRST QUARTER PERFORMANCE BY REGION (at constant exchange rates)
Note:
The following regional commentary is based on operating profit before
exceptional items and amortisation of goodwill and intangible assets. Sales
growth is stated on an underlying basis, excluding the effects of acquisitions
and disposals. Turnover includes the impact of acquisitions and disposals.
EUROPE
Continued difficult economic conditions in a number of countries were again
reflected in the consumer, retail and competitive environment with overall
market growth remaining very sluggish. Germany, France and the Netherlands have
been particularly difficult and we have lost some market share in spreads and
laundry. Against this background, underlying sales declined by 1.4%, including
0.8% from the decline in the tail of non-leading brands as we manage them for
value and with negative pricing of 0.4%. Turnover was 5% lower than last year
including the impact of planned disposals.
Our mass personal care brands gained further share with good volume growth. Key
innovations which we will be building on through the year include: Touch, the
new global variant of Axe and the roll-out of the Axe brand in Central and
Eastern Europe; the re-launch of Lux soap bars and bath and shower products; new
Dove firming lotion and Dove shampoo for coloured hair; and new variants of
Sunsilk.
Sales in Home and Personal Care overall were held back by an increased level of
consumer related price promotions and by the decline in prestige fragrances
through the course of last year.
In home care we have extended the successful fizzing laundry product with
improved cleaning performance for powders, tablets and liquids, while the fast
drying product for fabric conditioners also performed well.
In Foods, Bertolli grew strongly, sustaining its leadership in olive oil and
successfully extending into pasta sauces, dressings and toppings. Lipton also
grew well, led by ready-to-drink tea and leaf tea in Russia.
Family spreads brands continued to be held back by competitive pricing, and
particularly the growth of discount retailers in Germany. We have taken
appropriate action and have a strong innovation programme this year in spreads
with the roll-out of the Cremefine range of dairy cream alternatives under the
family brand and launch of proactiv milk and yoghurt line extensions.
As part of managing the frozen foods business to a more consistent growth
profile and to further improve its profitability, actions are being taken to
rationalise the product portfolio and focus on higher growth and profitable
segments, and sales are reduced as a result. The launch of Knorr frozen in a
number of countries and SlimFast frozen in the UK made good contributions in the
first quarter.
In dressings, there was good growth for Hellmanns in the UK and Calv in Russia,
but competitor activities in France affected growth. Knorr started slowly in
tough trading conditions in Germany and the Netherlands but improved through the
quarter including a good contribution from a new wet sauces range in Poland.
The regional operating margin at 15.6% was 50 basis points lower than last year.
A substantial improvement in gross margin from savings programmes and a better
mix was fully re-invested in increased advertising and promotion support.
3
NORTH AMERICA
Underlying sales declined by 1.8% in weak markets, including a positive 0.6%
from price. Within this, SlimFast and prestige fragrances diluted growth by
2.1%. Turnover, including the impact of disposals, declined by 4%.
In mass personal care, Axe continues to contribute strongly, including the
addition of Axe sticks to the range at the end of last year. In hair care, sales
were down against a strong comparator last year with the launch of Dove which
has established a 5% share in shampoo; in a highly competitive market some of
our weaker hair care brands have lost share.
With a new leadership team in place in prestige fragrances we have continued to
make good progress with our restructuring programme. The first phase of this
years more extensive innovation plan was introduced towards the end of the
quarter. While in the first quarter there is still a year on year decline, our
focus on a core portfolio of brands and more profitable channels and the tougher
comparator in the early part of the year is expected to lead to an improved
performance in the second half.
In laundry, we have stabilised market share after a loss of around 1 share point
in 2003 as we focused on the Surf/All brand, Wisk liquid and on fabric
conditioners.
Unilever Bestfoods started the year strongly with good growth from the launch of
the Carb Options range under the Wishbone, Lipton, Hellmanns and Skippy brands.
A second phase launch is under way with extensions to the range. Spreads growth
was also driven by Country Crock although market consumption remains weak.
The weight management category continues to redefine itself in response to the
consumer trend in low-carbohydrate products which now account for almost 50% of
the category. SlimFast launched its first five low-carbohydrate products at the
end of 2003. These already represent nearly 20% of SlimFast turnover and a
further 17 products are being launched. However this has not yet compensated for
the decline in share of the traditional products through the course of 2003
which is being addressed through their re-launch later in the year.
Ice cream performed well, with a further gain in market share. The Breyers,
Klondike and Ben & Jerrys brands all grew well. Particular strengths were in
grocery multipacks and the health range of products including low-carbohydrate
alternatives.
The regional operating margin, at 13.0%, was 10 basis points lower than last
year. Advertising and promotions were 150 basis points lower, reflecting the
timing of innovation in Home and Personal Care and lower expenditure in prestige
fragrances. However this was offset by the negative mix effect on gross margins
of lower sales in prestige fragrances and from higher overheads including the
short-term impact of unrecovered fixed costs following disposals.
AFRICA, MIDDLE EAST AND TURKEY
Underlying sales grew by 0.4% with positive volume growth of 1.5% against a
stretching comparator last year when sales grew by 9%. Supply disruption in both
West and East Africa and negative pricing in Turkey as we adjusted to a lower
inflation environment reduced regional growth by 4 percentage points. Turnover,
including the impact of disposals, declined 3.2%.
There was good growth in laundry in South Africa but a weaker performance in
Nigeria with a reduction in trade stocks ahead of the introduction of new
formula Omo and in South East Africa with economic difficulties across that
region. The launch of a new white variant of Domestos, together with price
repositioning of Cif boosted household cleaning in Turkey.
Growth in hair care was led by Dove and Sunsilk, while deodorants benefited from
an increased focus on Rexona. Dove face care was launched in Arabia.
Savoury, dressings and ice cream got off to a good start but spreads and cooking
oils were affected by lower priced imports.
The regional operating margin, at 12.1%, was 120 basis points ahead of last year
with a strong improvement in gross margins partly re-invested in increased
advertising and promotions.
4
ASIA AND PACIFIC
Underlying sales grew 1.8%, with volume growth of 3.1% but negative pricing of
1.3% in competitive markets. Turnover, including the net impact of disposals and
acquisitions, grew 1%.
In Japan, we have doubled our share in hair care over the last 4 years and this
success has produced an aggressive response through new product launches by
locally based competitors. The skin care category has also seen intense levels
of competition. This diluted overall regional growth by 1.5 percentage points.
In a market which is very sensitive to innovation we are stepping up our own
activity with launches of colorants and styling products under the mods hair
brand to be followed by further initiatives later in the year.
India achieved good volume growth in Home and Personal Care partly offset by
negative pricing in competitive markets. Recent innovations introduced under the
Lifebuoy, Axe and Fair & Lovely brands are all doing well and Vim bar and Domex
were launched towards the end of the quarter.
Elsewhere there was good growth in Home and Personal Care in Thailand, China and
Vietnam.
In Foods there was a further step-up in the growth of leading brands,
particularly through Royco, Bango and Sariwangi in Indonesia, Brooke Bond tea in
India and through Knorr.
Overall growth was affected 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 14.4% was 110 basis points lower than last year
with improved gross margins more than offset by an increase in advertising and
promotions and the impact of unrecovered fixed costs in overheads.
LATIN AMERICA
Underlying sales grew 10%, with a strong pick-up in volume, to 7%, and a lower
contribution from pricing than last year. After the impact of disposals,
turnover grew by 9%.
Our personal care brands grew especially well. Dove benefited from the launch of
a combing cream in Brazil and in Argentina where the exfoliating bar also made a
major contribution. Sunsilk was extended last year into colorants and a dyed
hair treatment has been launched in Mexico. Axe continues strongly through the
global Touch variant and from the launch of the Axe brand last year in Colombia
and Venezuela. Lux is building further with a range of products that appeal to
all consumers no matter what their income level, with new product forms and
packaging.
In laundry the migrations of the local Campeiro brand into the Surf smart
shopper position has produced excellent results in Brazil and has been followed
by similar activities in Chile and Ecuador.
In Foods, Knorr is growing well in Brazil and Mexico, and the successful low
unit price Knorr cubitos have been extended from the Caribbean to North East
Brazil. Hellmanns cholesterol free mayonnaise was successfully launched in
Chile, while SlimFast is making good progress in Mexico following its launch
last year.
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. Oils in Chile have declined particularly fast following the
devaluation in Argentina which has affected competitiveness.
Operating margin, at 18.6%, showed a marked step-up of 500 basis points over
last year. This mainly comes from improved gross margins reflecting the benefits
of volume growth, savings programmes, an improved mix and earlier action to
recover devaluation led cost increases in countries where currencies have since
stabilised.
5
CASH FLOW (at current exchange rates)
Cash flow from group operating activities in the quarter was 970 million, an
increase of 147 million over the corresponding period last year. Operating
profit (beia) at current exchange rates was 104 million lower, mainly through
the impact of currency movements. This was more than offset by lower seasonal
working capital outflows (207 million) and lower cash restructuring costs (45
million).
Capital expenditure and financial investments were 130 million higher than last
year due to earlier timing of the purchase of own shares to hedge our share
option programmes.
There was a net outflow from acquisitions and disposals of 89 million this
quarter, compared with 15 million last year. This reflects lower disposals
proceeds compared with last year, which included the sale of Frigedoc in France
and plantations in Malaysia. Both years included payments for the acquisition of
CPC/Ajinomoto.
Net debt at the quarter end was 12.6 billion, in line with the level at the end
of 2003, with the benefits of cash flow being offset by currency movements of
0.4 billion, particularly the impact of a strengthening dollar during the
quarter.
BALANCE SHEET (at current exchange rates)
Goodwill and intangible assets increased by 119 million, with the effect of
amortisation more than offset by currency movements. Higher stocks, debtor and
creditor balances reflect seasonal movements, particularly as the ice cream
business prepares for the summer season.
Capital and reserves increased by 481 million in the quarter. Net profits added
515 million with a further 96 million coming from movements in net pension
assets and liabilities and the credit in respect of share option costs. These
were offset by purchases of own shares to hedge share options.
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 US 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 Groups filings with the Securities and Exchange Commission,
including the Annual Report & Accounts on Form 20-F.
6
CONSOLIDATED PROFIT AND LOSS ACCOUNT - CONSTANT EXCHANGE RATES (unaudited)
Note: A description of the exchange rate conventions used is given on page 13.
Millions - constant rates First Quarter
2004 2003 % Incr./
(Decr.)
TURNOVER 9,788 10,004 (2 )%
Less: Share of turnover of (45 ) (72 )
joint ventures
Group turnover 9,743 9,932 (2 )%
Group operating profit 1,096 1,263 (13 )%
Add: Share of operating 10 12
profit of joint ventures
OPERATING PROFIT 1,106 1,275 (13 )%
Operating profit beia * 1,455 1,465 (1 )%
Exceptional items (67 ) 67
Amortisation of goodwill (282 ) (257 )
and intangible assets
Share of operating profit 10 (11 )
of associates
Other income from fixed 2 3
investments
Interest (165 ) (211 )
Other finance (22 ) (43 )
income/(cost) - pensions
and similar obligations
PROFIT BEFORE TAXATION 931 1,013 (8 )%
Taxation (348 ) (320 )
PROFIT AFTER TAXATION 583 693 (16 )%
Minority interests (53 ) (67 )
NET PROFIT 530 626 (15 )%
Net profit beia * 851 798 7 %
COMBINED EARNINGS PER
SHARE
(Constant rates)
- per 0.51 ordinary NV 0.54 0.64 (15 )%
share (Euros)
- per 1.4p ordinary PLC 8.12 9.53 (15 )%
share (Euro cents)
- per 0.51 ordinary NV 0.87 0.81 8 %
share - beia * (Euros)
- per 1.4p ordinary PLC 13.10 12.17 8 %
share - beia * (Euro
cents)
- per 0.51 ordinary NV 0.53 0.62 (15 )%
share - diluted (Euros)
- per 1.4p ordinary PLC 7.88 9.25 (15 )%
share - diluted (Euro
cents)
* Before exceptional items and amortisation of goodwill and intangible assets
7
NET PROFIT AND EARNINGS PER SHARE - CURRENT EXCHANGE RATES (unaudited)
Net profit and earnings per share given below are stated at current exchange
rates i.e. the results in both years have been translated at the exchange rates
prevailing during the appropriate period.
For further details of the results at current exchange rates and impact of
exchange rate movements see notes on page 13.
Millions - current rates First Quarter
2004 2003 % Incr./
(Decr.)
NET PROFIT 515 637 (19 )%
Net profit beia * 822 815 1 %
COMBINED EARNINGS PER SHARE
(Current rates)
- per 0.51 ordinary NV share (Euros) 0.53 0.65 (19 )%
- per 1.4p ordinary PLC share (Euro cents) 7.89 9.69 (19 )%
- per 0.51 ordinary NV share - beia * (Euros) 0.84 0.83 2 %
- per 1.4p ordinary PLC share - beia * (Euro cents) 12.65 12.44 2 %
- per 0.51 ordinary NV share - diluted (Euros) 0.51 0.63 (19 )%
- per 1.4p ordinary PLC share - diluted (Euro cents) 7.65 9.42 (19 )%
* Before exceptional items and amortisation of goodwill and intangible assets
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES (unaudited)
Millions - current rates First Quarter
2004 2003
Net profit 515 637
Pensions - actuarial gains / (losses) net of tax 40 (264 )
Currency retranslation 39 112
Total recognised gains since last annual accounts 594 485
8
MOVEMENTS IN SHAREHOLDERS' EQUITY (unaudited)
Millions - current rates First Quarter
2004 2003
Shareholders' equity as at 1 January 5,920 4,702
Net profit 515 637
Dividends (5 ) (6 )
Goodwill written back on disposals - 10
Change in number of shares or certificates of shares held in
connection with share options (139 ) (4 )
Actuarial gains / (losses) on pension schemes net of tax 40 (264 )
Share option credit 56 29
Currency retranslation 14 124
Shareholders' equity as at the end of the period 6,401 5,228
SUMMARY BALANCE SHEET (unaudited)
Millions - current rates As at 27 As at 31 As at 29 March
March December 2003
2004 2003 Restated
Goodwill and intangible 17,832 17,713 20,268
assets
Other fixed assets 6,961 6,854 7,694
Stocks 4,505 4,175 4,818
Debtors 6,456 5,881 7,249
Cash and current 3,577 3,345 2,930
investments
Trade and other creditors (10,928 ) (10,304 ) (11,913 )
28,403 27,664 31,046
Borrowings 16,144 15,900 19,211
Provisions for liabilities
and charges (excluding
pensions and similar
obligations) 1,545 1,645 1,904
Net pension asset for (574 ) (490 ) (359 )
funded schemes in surplus
Net pension liability for 1,709 1,629 2,596
funded schemes in deficit
Net pension liability for 2,698 2,620 1,816
unfunded schemes
Minority interests 480 440 650
Capital and reserves 6,401 5,920 5,228
28,403 27,664 31,046
Amounts for March 2003 have been restated following a number of
reclassifications, principally the presentation for securities held as
collateral in connection with derivative financial instruments as disclosed in
our 2003 Annual Report & Accounts and Form 20-F.
9
CASH FLOW STATEMENT (unaudited)
Millions - current rates First Quarter
2004 2003
Restated
Cash flow from group operating activities 970 823
Dividends from joint ventures 1 3
Returns on investments and servicing of finance (109 ) (99 )
Taxation (241 ) (255 )
Capital expenditure and financial investment (290 ) (160 )
Acquisitions and disposals (89 ) (15 )
CASH INFLOW / (OUTFLOW) BEFORE MANAGEMENT OF LIQUID
RESOURCES AND FINANCING 242 297
Management of liquid resources (624 ) 225
Financing 233 (432 )
INCREASE / (DECREASE) IN CASH IN THE PERIOD (149 ) 90
RECONCILIATION OF CASH FLOW TO MOVEMENT IN NET DEBT (unaudited)
Millions - current rates First Quarter
2004 2003
Restated
NET DEBT AT 1 JANUARY (12,555 ) (16,966 )
INCREASE / (DECREASE) IN CASH IN THE PERIOD (149 ) 90
Cash flow from (increase) / decrease in borrowings (89 ) 432
Cash flow from increase / (decrease) in liquid resources 624 (225 )
Change in net debt resulting from cash flows 386 297
Borrowings within group companies acquired - (26 )
Liquid resources within group companies sold - (3 )
Non cash movements (328 ) (123 )
Currency retranslation (70 ) 540
MOVEMENT IN NET DEBT IN THE PERIOD (12 ) 685
NET DEBT AT PERIOD END (12,567 ) (16,281 )
10
GEOGRAPHICAL ANALYSIS (at constant rates - unaudited)
Millions - constant rates First Quarter
2004 2003 % Incr./
(Decr.)
TURNOVER 9,788 10,004 (2 )%
Europe 4,005 4,205 (5 )%
North America 2,271 2,368 (4 )%
Africa, Middle East and Turkey 727 750 (3 )%
Asia and Pacific 1,678 1,661 1 %
Latin America 1,107 1,020 9 %
OPERATING PROFIT - beia * 1,455 1,465 (1 )%
Europe 624 678 (8 )%
North America 295 310 (5 )%
Africa, Middle East and Turkey 88 82 7 %
Asia and Pacific 242 257 (6 )%
Latin America 206 138 49 %
OPERATING MARGIN - beia * 14.9 % 14.6 %
Europe 15.6 % 16.1 %
North America 13.0 % 13.1 %
Africa, Middle East and Turkey 12.1 % 10.9 %
Asia and Pacific 14.4 % 15.5 %
Latin America 18.6 % 13.6 %
* Before exceptional items and amortisation of goodwill and intangible assets
11
OPERATIONAL ANALYSIS (at constant rates - unaudited)
Millions - constant rates First Quarter
2004 2003 % Incr./
(Decr.)
TURNOVER 9,788 10,004 (2 )%
Foods 5,354 5,537 (3 )%
Savoury and dressings 2,025 2,000 1 %
Spreads and cooking products 1,106 1,207 (8 )%
Health & wellness and beverages 823 858 (4 )%
Ice cream and frozen foods 1,400 1,472 (5 )%
Home care 1,752 1,785 (2 )%
Personal care 2,604 2,599 0 %
Other operations 78 83 (5 )%
OPERATING PROFIT - beia * 1,455 1,465 (1 )%
Foods 767 738 4 %
Savoury and dressings 354 347 2 %
Spreads and cooking products 186 183 1 %
Health & wellness and beverages 116 120 (3 )%
Ice cream and frozen foods 111 88 27 %
Home care 245 230 6 %
Personal care 446 504 (11 )%
Other operations (3 ) (7 ) 53 %
OPERATING MARGIN - beia * 14.9 % 14.6 %
Foods 14.3 % 13.3 %
Savoury and dressings 17.5 % 17.3 %
Spreads and cooking products 16.8 % 15.2 %
Health & wellness and beverages 14.1 % 14.0 %
Ice cream and frozen foods 7.9 % 5.9 %
Home care 14.0 % 12.9 %
Personal care 17.1 % 19.4 %
Other operations (4.1 )% (8.1 )%
* Before exceptional items and amortisation of goodwill and intangible assets
12
NOTES
Exchange rate conventions and impact of movements in exchange rates
The following exchange rate conventions have been applied:
In the profit and loss account information given on page 7 and the segmental
analysis on pages 11 and 12, the results for 2004 and the comparative figures
for 2003 have been translated at constant exchange rates, being the annual
average exchange rates for 2003. 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 = 0.69 = US $1.13.
The results and earnings per share on page 8 and the cash flow statement on page
10 are translated at rates current in each period. For our reporting currencies
these rates were 1 = 0.68 = US $1.25 for the first three months of 2004 and
1 = 0.67 = US $1.07 for the first three months of 2003.
The lower Euro EPS and turnover at current rates of exchange reflects the
progressive strengthening of the Euro through 2003, particularly against the US
$. For illustrative purposes, if the first quarter 2004 exchange rates were to
remain in place through the remainder of the year, then growth for the year
would be around 4% lower at current rates than at constant rates.
The balance sheet figures have been translated at period-end rates of exchange.
For our reporting currencies these were 1 = 0.67 = US $1.22 at 27 March 2004, 1
= 0.71 = US $1.26 at 31 December 2003 and 1 = 0.69 = US $1.07 at 29 March 2003.
Results at current rates of exchange
Millions - current rates First Quarter
2004 2003 % Incr.
/(Decr.)
Turnover 9,357 10,182 (8 )%
Operating profit 1,057 1,302 (19 )%
Operating profit beia * 1,392 1,496 (7 )%
Share of operating profit 11 (9 )
of associates & income
from fixed investments
Interest (including net (171 ) (262 )
interest (cost)/return on
pension scheme assets and
liabilities)
Taxation (333 ) (325 )
Minority interests (49 ) (69 )
Net profit 515 637 (19 )%
Net profit beia * 822 815 1 %
The impact of exchange rate movements on the three months results at current
exchange rates in Euros, Sterling and US $ is given below, along with the year
on year percentage change at constant rates.
First At current rates of exchange
Quarter -
Millions
Constant ------ - - -------- -- - ------ - - -------- -- - ------ - - --------
rates
% Incr. % Incr. % Incr. US $ % Incr.
/(Decr.) 2004 /(Decr.) 2004 /(Decr.) 2004 /(Decr.)
Turnover (2 )% 9,357 (8 )% 6,382 (6 )% 11,697 7 %
Operating (1 )% 1,392 (7 )% 949 (5 )% 1,740 9 %
profit
beia *
Net (15 )% 515 (19 )% 352 (18 )% 644 (6 )%
profit
Net 7 % 822 1 % 560 3 % 1,027 18 %
profit
beia *
% Change (15 )% (19 )% (17 )% (5 )%
in EPS
% Change 8 % 2 % 4 % 19 %
in EPS -
beia *
* Before exceptional items and amortisation of goodwill and intangible assets
13
Acquisitions and Disposals
In the first quarter, we continued the disposal of tail brands, mainly home care
brands in North America. On 9 March 2004, we announced the sale of our edible
oils and white fats business in Mexico to a Mexican subsidiary of Associated
British Foods plc, for US $110 million cash. Subject to regulatory approval, the
transaction is expected to be completed in the second quarter.
Preference shares
On 24 March 2004, Unilever announced that it intends to exercise its option to
convert its 0.05* N.V. preference shares into ordinary Unilever N.V. shares
during the first quarter of 2005. The conversion will follow the terms
stipulated in the original information memorandum and in Unilever N.V.s Articles
of Association.
The conversion will be met out of existing shares and will not involve the issue
of any new shares. The maximum number of ordinary Unilever N.V. shares involved
is 18.9 million.
The preference shares were offered to holders of ordinary Unilever N.V. shares
at the time of the special dividend payment in 1999. The decision to convert
reflects the current ordinary Unilever N.V. share price, respects the interests
of all Unilever shareholders, and is consistent with the conditions of the
original issue.
The conversion timing takes into account fiscal considerations reflecting
changes to Dutch taxation in recent years and allows for the purchase of
ordinary N.V. shares from the market to the extent that this is required for the
conversion.
Following conversion, the preference shares will retain a 0.05 residual notional
value, which Unilever intends to redeem for cash in 2005, subject to approval at
the 2005 AGM of Unilever N.V.
The normal preference dividend will accrue up to the date of conversion and
thereafter will accrue on the residual notional value until redemption of the
preference shares.
Unilever has agreed with Euronext that the listing of the preference shares will
be continued until, at the latest, the moment of redemption. The listing of the
preference shares originally ended on 31 December 2004.
* This amount is a representation in euros on the basis of Article 67c Book 2 of
the Dutch Civil Code, rounded to two decimal places, of underlying Dutch
guilders, as these have not been converted into euros in Unilever N.V.s Articles
of Association.
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.
14
Earnings per share in Euro for the quarter
Constant rates Current rates
2004 2003 2004 2003
Thousands of units
Average number 966,182 973,339 966,182 973,339
of combined
share units of
0.51
Average number 6,441,217 6,488,927 6,441,217 6,488,927
of combined
share units of
1.4p
COMBINED EPS Millions
Net profit 530 626 515 637
Less: Preference (7 ) (8 ) (7 ) (8 )
dividends
Net profit 523 618 508 629
attributable to
ordinary capital
Combined EPS per 0.54 0.64 0.53 0.65
0.51 (Euros)
Combined EPS per 8.12 9.53 7.89 9.69
1.4p (Euro
cents)
COMBINED EPS - Millions
beia *
Net profit 530 626 515 637
Add back 54 (71 ) 54 (74 )
exceptional
items net of tax
Add back 267 243 253 252
amortisation of
goodwill /
intangible
assets net of
tax
Net profit beia 851 798 822 815
*
Less: Preference (7 ) (8 ) (7 ) (8 )
dividends
Net profit 844 790 815 807
attributable to
ordinary capital
- beia *
Combined EPS - 0.87 0.81 0.84 0.83
beia* per 0.51
(Euros)
Combined EPS - 13.10 12.17 12.65 12.44
beia* per 1.4p
(Euro cents)
COMBINED EPS - Thousands of units
Diluted
Adjusted average 996,324 1,002,138 996,324 1,002,138
combined share
units of 0.51
Adjusted average 6,642,158 6,680,920 6,642,158 6,680,920
combined share
units of 1.4p
Millions
Net profit 523 618 508 629
attributable to
ordinary capital
Combined diluted 0.53 0.62 0.51 0.63
EPS per 0.51
(Euros)
Combined diluted 7.88 9.25 7.65 9.42
EPS per 1.4p
(Euro cents)
* Before exceptional items and amortisation of goodwill and intangible assets
Dates
The results for the second quarter and for the first half-year 2004 will be
published on Wednesday 28 July 2004.
ENQUIRIES: UNILEVER PRESS OFFICE +44 (0) 20 7822 6805
Internet: http://www.unilever.com
E-mail: press-office.london@unilever.com
28 April 2004
15
CONSOLIDATED PROFIT AND LOSS ACCOUNT - CONSTANT EXCHANGE RATES (unaudited)
Note: A description of the exchange rate conventions used is given on page 13.
US $ Millions - constant First Quarter
rates
2004 2003 % Incr./
(Decr.)
TURNOVER 11,022 11,265 (2 )%
Less: Share of turnover (51 ) (81 )
of joint ventures
Group turnover 10,971 11,184 (2 )%
Group operating profit 1,234 1,422 (13 )%
Add: Share of operating 12 13
profit of joint ventures
OPERATING PROFIT 1,246 1,435 (13 )%
Operating profit beia * 1,639 1,650 (1 )%
Exceptional items (75 ) 75
Amortisation of goodwill (318 ) (290 )
and intangible assets
Share of operating 10 (12 )
profit of associates
Other income from fixed 2 3
investments
Interest (186 ) (237 )
Other finance income / (24 ) (48 )
(cost) - pensions and
similar obligations
PROFIT BEFORE TAXATION 1,048 1,141 (8 )%
Taxation (391 ) (361 )
PROFIT AFTER TAXATION 657 780 (16 )%
Minority interests (60 ) (75 )
NET PROFIT 597 705 (15 )%
Net profit beia * 958 898 7 %
COMBINED EARNINGS PER
SHARE
(Constant rates)
- per 0.51 ordinary NV 0.61 0.72 (15 )%
share (US $)
- per 5.6p ordinary PLC 0.37 0.43 (15 )%
share (US $)
- per 0.51 ordinary NV 0.98 0.91 8 %
share - beia * (US $)
- per 5.6p ordinary PLC 0.59 0.55 8 %
share - beia * (US $)
- per 0.51 ordinary NV 0.59 0.69 (15 )%
share - diluted (US $)
- per 5.6p ordinary PLC 0.35 0.42 (15 )%
share - diluted (US $)
* Before exceptional items and amortisation of goodwill and intangible assets
16
NET PROFIT AND EARNINGS PER SHARE - CURRENT EXCHANGE RATES (unaudited)
Net profit and earnings per share given below are stated at current exchange
rates i.e. the results in both years have been translated at the exchange rates
prevailing during the appropriate period.
For further details of the results at current exchange rates and impact of
exchange rate movements see notes on page 13.
US $ Millions - current rates First Quarter
2004 2003 % Incr./
(Decr.)
NET PROFIT 644 683 (6 )%
Net profit beia * 1,027 874 18 %
COMBINED EARNINGS PER SHARE
(Current rates)
- per 0.51 ordinary NV share (US $) 0.66 0.69 (5 )%
- per 5.6p ordinary PLC share (US $) 0.39 0.42 (5 )%
- per 0.51 ordinary NV share - beia * (US $) 1.05 0.89 19 %
- per 5.6p ordinary PLC share - beia * (US $) 0.63 0.53 19 %
- per 0.51 ordinary NV share - diluted (US $) 0.64 0.67 (5 )%
- per 5.6p ordinary PLC share - diluted (US $) 0.38 0.40 (5 )%
* Before exceptional items and amortisation of goodwill and intangible assets
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES (unaudited)
US $ Millions - current rates First Quarter
2004 2003
Net profit 644 683
Pensions - actuarial gains / (losses) net of tax 49 (283 )
Currency retranslation (231 ) 234
Total recognised gains since last annual accounts 462 634
17
MOVEMENTS IN SHAREHOLDERS' EQUITY (unaudited)
US $ Millions - current rates First Quarter
2004 2003
Shareholders' equity as at 1 January 7,465 4,932
Net profit 644 683
Dividends (7 ) (7 )
Goodwill written back on disposals - 11
Change in number of shares or certificates of shares held in
connection with share options (174 ) (4 )
Actuarial gains / (losses) on pension schemes net of tax 49 (283 )
Share option credit 70 32
Currency retranslation (245 ) 250
Shareholders' equity as at the end of the period 7,802 5,614
SUMMARY BALANCE SHEET (unaudited)
US $ Millions - current As at 27 As at 31 As at 29 March
rates March December 2003
2004 2003 Restated
Goodwill and intangible 21,737 22,336 21,768
assets
Other fixed assets 8,486 8,642 8,263
Stocks 5,492 5,265 5,175
Debtors 7,869 7,416 7,785
Cash and current 4,360 4,218 3,147
investments
Trade and other creditors (13,321 ) (12,993 ) (12,795 )
34,623 34,884 33,343
Borrowings 19,680 20,050 20,633
Provisions for liabilities
and charges (excluding
pensions and similar
obligations) 1,884 2,074 2,045
Net pension asset for (701 ) (618 ) (385 )
funded schemes in surplus
Net pension liability for 2,083 2,054 2,788
funded schemes in deficit
Net pension liability for 3,289 3,304 1,950
unfunded schemes
Minority interests 586 555 698
Capital and reserves 7,802 7,465 5,614
34,623 34,884 33,343
Amounts for March 2003 have been restated following a number of
reclassifications, principally the presentation for securities held as
collateral in connection with derivative financial instruments as disclosed in
our 2003 Annual Report & Accounts and Form 20-F.
18
CASH FLOW STATEMENT (unaudited)
US $ Millions - current rates First Quarter
2004 2003
Restated
Cash flow from group operating activities 1,212 883
Dividends from joint ventures 1 3
Returns on investments and servicing of finance (136 ) (107 )
Taxation (302 ) (273 )
Capital expenditure and financial investment (362 ) (172 )
Acquisitions and disposals (111 ) (16 )
CASH INFLOW / (OUTFLOW) BEFORE MANAGEMENT OF LIQUID
RESOURCES AND FINANCING 302 318
Management of liquid resources (779 ) 240
Financing 293 (463 )
INCREASE / (DECREASE) IN CASH IN THE PERIOD (184 ) 95
RECONCILIATION OF CASH FLOW TO MOVEMENT IN NET DEBT (unaudited)
US $ Millions - current rates First Quarter
2004 2003
Restated
NET DEBT AT 1 JANUARY (15,832 ) (17,797 )
INCREASE / (DECREASE) IN CASH IN THE PERIOD (184 ) 95
Cash flow from (increase) / decrease in borrowings (112 ) 463
Cash flow from increase / (decrease) in liquid resources 779 (240 )
Change in net debt resulting from cash flows 483 318
Borrowings within group companies acquired - (28 )
Liquid resources within group companies sold - (3 )
Non cash movements (410 ) (131 )
Currency retranslation 439 155
MOVEMENT IN NET DEBT IN THE PERIOD 512 311
NET DEBT AT PERIOD END (15,320 ) (17,486 )
19
GEOGRAPHICAL ANALYSIS (at constant rates - unaudited)
US $ Millions - constant rates First Quarter
2004 2003 % Incr./
(Decr.)
TURNOVER 11,022 11,265 (2 )%
Europe 4,510 4,735 (5 )%
North America 2,557 2,666 (4 )%
Africa, Middle East and Turkey 818 845 (3 )%
Asia and Pacific 1,890 1,870 1 %
Latin America 1,247 1,149 9 %
OPERATING PROFIT - beia * 1,639 1,650 (1 )%
Europe 703 763 (8 )%
North America 333 349 (5 )%
Africa, Middle East and Turkey 99 93 7 %
Asia and Pacific 272 289 (6 )%
Latin America 232 156 49 %
OPERATING MARGIN - beia * 14.9 % 14.6 %
Europe 15.6 % 16.1 %
North America 13.0 % 13.1 %
Africa, Middle East and Turkey 12.1 % 10.9 %
Asia and Pacific 14.4 % 15.5 %
Latin America 18.6 % 13.6 %
* Before exceptional items and amortisation of goodwill and intangible assets
20
OPERATIONAL ANALYSIS (at constant rates - unaudited)
US $ Millions - constant rates First Quarter
2004 2003 % Incr./
(Decr.)
TURNOVER 11,022 11,265 (2 )%
Foods 6,029 6,235 (3 )%
Savoury and dressings 2,280 2,252 1 %
Spreads and cooking products 1,246 1,359 (8 )%
Health & wellness and beverages 926 966 (4 )%
Ice cream and frozen foods 1,577 1,658 (5 )%
Home care 1,973 2,010 (2 )%
Personal care 2,932 2,927 0 %
Other operations 88 93 (5 )%
OPERATING PROFIT - beia * 1,639 1,650 (1 )%
Foods 864 831 4 %
Savoury and dressings 399 391 2 %
Spreads and cooking products 209 206 1 %
Health & wellness and beverages 131 135 (3 )%
Ice cream and frozen foods 125 99 27 %
Home care 276 260 6 %
Personal care 503 567 (11 )%
Other operations (4 ) (8 ) 53 %
OPERATING MARGIN - beia * 14.9 % 14.6 %
Foods 14.3 % 13.3 %
Savoury and dressings 17.5 % 17.3 %
Spreads and cooking products 16.8 % 15.2 %
Health & wellness and beverages 14.1 % 14.0 %
Ice cream and frozen foods 7.9 % 5.9 %
Home care 14.0 % 12.9 %
Personal care 17.1 % 19.4 %
Other operations (4.1 )% (8.1 )%
* Before exceptional items and amortisation of goodwill and intangible assets
21
Earnings per share in US Dollars for the quarter
Constant rates Current rates
2004 2003 2004 2003
Thousands of units
Average number 966,182 973,339 966,182 973,339
of combined
share units of
0.51
Average number 1,610,304 1,622,232 1,610,304 1,622,232
of combined
share units of
5.6p
COMBINED EPS US $ Millions
Net profit 597 705 644 683
Less: Preference (8 ) (9 ) (9 ) (9 )
dividends
Net profit 589 696 635 674
attributable to
ordinary capital
Combined EPS per $0.61 $0.72 $0.66 $0.69
0.51
Combined EPS per $0.37 $0.43 $0.39 $0.42
5.6p
COMBINED EPS - US $ Millions
beia *
Net profit 597 705 644 683
Add back 60 (81 ) 67 (80 )
exceptional
items net of tax
Add back 301 274 316 271
amortisation of
goodwill /
intangible
assets net of
tax
Net profit beia 958 898 1,027 874
*
Less: Preference (8 ) (9 ) (9 ) (9 )
dividends
Net profit 950 889 1,018 865
attributable to
ordinary capital
- beia *
Combined EPS - $0.98 $0.91 $1.05 $0.89
beia* per 0.51
Combined EPS - $0.59 $0.55 $0.63 $0.53
beia* per 5.6p
COMBINED EPS - Thousands of units
Diluted
Adjusted average 996,324 1,002,138 996,324 1,002,138
combined share
units of 0.51
Adjusted average 1,660,539 1,670,230 1,660,539 1,670,230
combined share
units of 5.6p
US $ Millions
Net profit 589 696 635 674
attributable to
ordinary capital
Combined diluted $0.59 $0.69 $0.64 $0.67
EPS per 0.51
Combined diluted $0.35 $0.42 $0.38 $0.40
EPS per 1.4p
* Before exceptional items and amortisation of goodwill and intangible assets
22