The principal feature of the quarter was the planned acceleration of our Path to Growth strategy. This brought significant cost savings which has allowed us to increase marketing investment behind the growth of our leading brands and post another strong increase in operating profit.
FINANCIAL HIGHLIGHTS
----------------------------------------------------------------------
Constant exchange rates (1999 average)
--------------------------
Third Quarter 2000 Euro Millions
--------------------------
10,976 +5 % Turnover
--------------------------
Operating profit - before exceptional
1,557 +10 % items and amortisation of
goodwill/intangibles
--------------------------
1,403 +7 % Pre-tax profit
--------------------------
806 (5)% Net profit
--------------------------
894 - % Net profit - before exceptional items
--------------------------
Per NV share (Fl. 1.12), euro(1)
-------------------------- --------------------------------
0.80 (2)% EPS
--------------------------
0.89 +2 % EPS - before exceptional items
--------------------------
Per PLC share (1.4p), eurocent(1)
-------------------------- ---------------------------------
12.04 (2)% EPS
--------------------------
13.42 +2 % EPS - before exceptional items
--------------------------
--------------------------
Nine Months 2000
--------------------------
31,587 +3 %
--------------------------
Current exchange
3,883 +11 % rates
-------------------------- ------------------------
3,287 (3)% Nine Months 2000
-------------------------- ------------------------
1,979 (8)% 2,089 (2)%
-------------------------- ------------------------
2,309 +2 % 2,441 +9 %
-------------------------- ------------------------
-------------------------- ------------------------
1.97 (2)% 2.08 +4 %
-------------------------- ------------------------
2.30 +9 % 2.44 +16 %
-------------------------- ------------------------
-------------------------- ------------------------
29.52 (2)% 31.18 +4 %
-------------------------- ------------------------
34.52 +9 % 36.53 +16 %
-------------------------- ------------------------
(1) See note on exchange rates
Interim dividend: N.V. ordinary share 0.48 euro +20%, PLC ordinary
share 4.40p +12%
KEY FEATURES
Go deeper with GlobalData
– Sales of our leading brands grew 8.1% in the third quarter, including 4.3% from acquisitions.
– Cash flow from operations at 4.5 billion euros for the year to date well ahead of 1999.
– Strong innovation led sales growth across Home and Personal Care.
– Foods sales held back by a poor European summer season in ice cream and ready to drink tea.
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By GlobalData– Gross margins continue to move ahead allowing us to invest additional funds in marketing support; operating margin beia now at 14.2%.
– Path to Growth restructuring accelerated to 304 million euros for the quarter.
CHAIRMEN’S COMMENT
“Last month the Bestfoods acquisition was completed on schedule. The top appointments have been made and we are moving ahead rapidly with the integration of the businesses. The earlier acquisitions of Slimo Fast and Ben & Jerry’s have both made a promising start in their first full quarter under our ownership with results ahead of plan.
The realignment of the portfolio has continued with the recent sale of our European Bakery businesses and the agreement to sell much of the Elizabeth Arden operation. We have also announced our intention to sell the Bestfoods Baking Company.
Management is now focused on successfully implementing the new divisional structure, another step toward attaining our Path to Growth objectives.”
N W A FitzGerald A Burgmans Chairman, Unilever PLC Chairman, Unilever N.V.
UNILEVER BACKGROUND: Unilever is one of the world’s largest consumer products companies with sales of $52 billion. It produces and markets a wide range of foods, home and personal care products. Unilever operates in 88 countries around the globe and employs 300,000 people.
In the United States, Unilever sales were $10 billion in 1999. It employs 38,000 people and has 104 offices and manufacturing sites in 27 states. Two of Unilever’s 12 global Business Groups are headquartered in the United States. Some of their major products are: Foods – North America: Lipton teas, soups, recipe products and side dishes; Wish-Bone salad dressings; Lawry’s seasonings and specialty sauces; Imperial, Promise, Country Crock, “I Can’t Believe It’s Not Butter!”, Brummel & Brown spreads and sprays; Ragu pasta and pizza sauces; Five Brothers premium pasta sauces; Knorr soups, sauces and bouillons; Hellmann’s mayonnaise and dressings; Skippy peanut butter; Mazola oils; Entenmann’s, Thomas’ and Arnold baked goods; Klondike, Good-Humor, Popsicle, Breyers and Ben & Jerry’s ice cream products; Gorton’s frozen seafood products and Slim-Fast nutritional and health snack products. Unilever Home and Personal Care – North America: Wisk, “all” and Surf laundry detergents; Snuggle and Final Touch fabric softeners; Sunlight dish detergents; Lever 2000, Caress, Dove and Shield bar soaps; Pond’s and Vaseline skin care products; Q-tips cotton swabs and cotton balls; Mentadent, Aim, Close-up and Pepsodent oral care products; Degree, Suave and Brut deodorant/toiletry products; Finesse, Salon Selectives, Suave, ThermaSilk, Aqua Net and Rave hair care products; and Calvin Klein, Nautica, Vera Wang and Elizabeth Arden cosmetic and fragrance products. In addition, DiverseyLever, a global professional cleaning business, operates in North America, supplying professional cleaning materials and services to institutional and industrial markets.
THIRD QUARTER AND FIRST NINE MONTHS FINANCIAL RESULTS
Operating profit, at constant exchange rates and before exceptional items and amortization of goodwill and intangibles, increased by 10% in the quarter and by 11% for the first nine months.
Amortization of goodwill and intangibles was 49 million euros in the quarter reflecting the Slimo Fast, Ben & Jerry’s, Cressida and Amora Maille acquisitions. Interest costs were 18 million euros higher than last year, reflecting the cost of increased borrowings offset by a strong cash flow from operations. Exceptional items in the quarter include a 304 million euros charge for Path to Growth related restructuring. The exceptional profits include those coming from the disposal of our European Bakery businesses. The effective tax rate from trading operations in the quarter was 34.7%. Tax on exceptional items raised this by 3.8 percentage points to 38.5%. In consequence net profit at constant exchange rates decreased by 5% in the quarter, and by 8% for the first nine months. Net profit at constant exchange rates and before exceptional items remained flat in the quarter and increased by 2% for the first nine months.
At constant exchange rates and taking account of the benefits of the 1999 share consolidation, earnings per share before exceptional items rose 2% in the quarter and 9% for the first nine months. When expressed in current rates of exchange, earnings per share in the quarter rose 10% before exceptional items and 4% after exceptional items. On the same basis, earnings per share for the first nine months rose 16% before exceptional items and 4% after.
THIRD QUARTER PERFORMANCE BY REGION
The following commentary is based on operating profit before exceptional items and amortization of goodwill and intangibles, at constant rates of exchange.
EUROPE: Strong growth in home and personal care offset by poor summer season in ice cream and ready-to-drink tea.
In Western Europe, sales from the leading brands in our home and personal care business grew by more than 7%. In laundry, there was continued success for tablets and the Easy Iron variant of Comfort fabric conditioner. Growth in skincare was led by Dove and in household cleaning, sales were boosted by the introduction of easy- to-use wipes under the Domestos and Jif brands.
Volumes rose in spreads and cooking products due to the launch of Pro.activ, the cholesterol-reducing spread, and the extension of the Bertolli range. In culinary, there was an excellent performance from Amora Maille where year-on-year sales increased by 9%. In frozen foods, volumes were up more than 3%, reflecting the success of meal solutions under the Quattro Salti in Padella brand.
A poor summer season meant volumes in our ice cream and ready-to-drink businesses were down by 10% and 15% respectively, representing a sales shortfall of 120 million euros.
In Central and Eastern Europe, volumes grew 7%, driven by tea, laundry and household cleaning. There were signs of recovery in Russia led by our personal care and tea businesses.
NORTH AMERICA: Sales and profits rise reflecting acquisitions and growth in home and personal care.
Sales rose by 13% of which 10 percentage points come from the acquisition of Slimo Fast and Ben & Jerry’s. Operating margins moved well ahead reflecting the benefits of restructuring, portfolio changes and buying savings.
In home and personal care, sales were 5% higher, driven by innovations in hair, fragrances and skin. In the skin category, Dove continues to be a major success. Laundry volumes were up 6%. In hair, the relaunching of Salon Selectives, and the Suave line extensions have begun well. Fragrances sales were up 13%, with launches of Nautica’s Latitude/Longitude, Truth by Calvin Klein, and Cerruti Image for Women.
In foods, ice cream sales were up more than 10%, before the contribution from Ben & Jerry’s, with a strong result from Breyers Parlour. In spreads, our market share has moved ahead, with the contribution from Brummel & Brown Creamy Fruit Spread and Take Control. There were gains in tea volumes with Lipton Cold Brew, but the quarter also saw higher promotional pricing in both this category and culinary. Frozen foods sales declined but we held share in a rapidly shrinking market.
AFRICA AND MIDDLE EAST: Sales and profits improved despite difficult business conditions.
Sales were up 5%, notwithstanding the sale of the liquor distribution business in the Middle East. Volume growth strengthened to 4%, while price increases in home and personal care further enhanced sales growth. Higher gross margins produced a good increase in operating profit.
Among the country highlights, there were positive home and personal care performances in Morocco and Ghana, while in Egypt and Arabia our Lipton tea operations did well. In our largest regional business, South Africa, there were sales gains in most categories, resulting in a good overall performance.
ASIA AND PACIFIC: Double digit sales growth continues in Southeast Asia and Japan.
The region recorded another good quarter as sales rose 8% and profits increased by 15%.
Our businesses in Southeast Asia and Japan continue to perform well, with excellent volume growth and firmer pricing resulting in higher operating profit. In Japan, Dove and Pond’s in skin, and Mods and Lux in hair have again been the principal successes. Growth in Southeast Asia was broad based, and in hair, where volumes grew 19%, Vaseline shampoo achieved market leadership in the Philippines. Sales in Australia, however, were flat.
In China the laundry and oral care businesses had another good quarter. The price repositioning of the Omo brand has proved successful and the Zhonghua brand of toothpaste has benefited from the introduction of new variants. In the hair category intense competition from both international and local players slowed growth.
In India, although the Surf brand recorded strong sales growth, there was increased competition at the lower end of the market, particularly in personal care and tea. This, coupled with the effect of lower fertilizer sales, impacted both sales and profits.
LATIN AMERICA: Early signs of recovery led by growth in laundry and improvement in profitability.
Sales growth in the third quarter was 8%, including 5% from acquisitions. Operating profits were well ahead of last year, reflecting the firmer prices and an aggressive cost savings program.
Volumes in laundry were up 3%, with Brazil contributing most, with the relaunch of our “top clean” brands. Our personal care businesses continued to prosper throughout the region, led by the Dove, Axe and Rexona personal wash and deodorant brands. In foods, the ice cream business had mixed results with a good performance in Mexico, but disappointment in Brazil. Our Brazilian ice cream operation is currently being reorganized.
There are clear signs of a recovery beginning in the region, however against this must be set the continuing difficult trading conditions in Central and North Latin America.
INTERIM DIVIDEND
In accordance with the interim dividend policy, the interim dividend has been set at 35% of last year’s total dividend, based on the stronger of the two reporting currencies of our parent companies, euro and sterling, over the first nine months, which for this period was sterling. The interim dividend, to be paid on December 18, 2000, is therefore fixed at 4.40p per 1.4p ordinary share of Unilever PLC, an increase of 12% from last year. The interim dividend per Fl. 1.12 ordinary share of Unilever N.V. is set at 0.48 euros, an increase of 20% from last year. The Unilever PLC shares will go ex-dividend on November 13, 2000, and the Unilever N.V. shares will go ex-dividend on November 6, 2000.
CASH FLOW
Cash flow from operations for the first nine months was 4.5 billion euros compared with 3.8 billion euros in the corresponding period last year. This is the result of strong underlying earnings and improved management of working capital.
Cash flow from operations would have been even stronger were it not for the 0.7 billion euros in debtors relating to the disposal consideration for our European Bakery businesses, subsequently settled on October 2, 2000.
The purchase of Slimo Fast, Amora Maille, Ben & Jerry’s, Cressida and other acquisitions impacted cash flow by some 4 billion euros.
Returns from investment and financing were lower following payment of the special dividend in 1999 and the funding of acquisitions made in the first nine months of 2000.
BALANCE SHEET
Net debt at 1.8 billion euros compares to net funds of 0.7 billion euros at the end of 1999.
Net gearing is 15%.
Goodwill and intangibles have increased by 3.8 billion euros through the above acquisitions.
The acquisitions have also affected debtors, which increased by 2.2 billion euros. Debtors also includes the outstanding sale consideration for the European Bakery businesses.
Provisions for liabilities and charges have increased by 0.9 billion euros. This is also mainly due to the effect of the acquisitions and a cash refund from the Netherlands pension fund. This cash refund represents deferred income which will be recognized in the profit and loss account over approximately 14 years.
Borrowings and cash and current investments were both significantly higher in preparation for settlement of the consideration due in respect of the Bestfoods acquisition.
Capital and reserves increased by 2.0 billion euros to 9.8 billion euros. This mainly reflects profits for the first nine months, together with favorable currency retranslations, less the accrued interim dividend and shares purchased in respect of employee share option plans.
EURO REPORTING
Information in sterling and U.S. dollars is available as a supplement to this euro report.
CONSOLIDATED PROFIT AND LOSS ACCOUNT - CONSTANT EXCHANGE RATES
--------------------------------------------------------------
(unaudited)
-----------
In the profit and loss account given below, the results in both
years have been translated at constant exchange rates, being the
annual average exchange rates for 1999. This reporting convention
facilitates comparisons since the impact of exchange rate fluctuations
is eliminated.
Third Quarter Euro Millions - constant Nine Months
------------- -----------
2000 1999 % Incr./ 2000 1999 % Incr./
---- ---- -------- ---- ---- --------
(Decr.) (Decr.)
------- -------
10,976 10,491 5 % TURNOVER 31,587 30,749 3 %
----------------------------------------------------------------------
1,456 1,341 9 % OPERATING PROFIT 3,385 3,319 2 %
----------------------------------------------------------------------
Operating Profit
1,557 1,418 10 % BEIA (2) 3,883 3,503 11 %
(52) (71) Exceptional items (428) (169)
Amortization of
goodwill and
(49) (6) intangibles (70) (15)
----------------------------------------------------------------------
Income from
8 13 fixed investments 31 40
(61) (43) Interest (129) 15
-------------- --------------
PROFIT BEFORE
1,403 1,311 7 % TAXATION 3,287 3,374 (3)%
(540) (411) Taxation (1,168) (1,081)
-------------- --------------
PROFIT AFTER
863 900 (4)% TAXATION 2,119 2,293 (8)%
(57) (56) Minority Interests (140) (148)
-------------- --------------
NET PROFIT AT
CONSTANT 1999
806 844 (5)% EXCHANGE RATES 1,979 2,145 (8)%
-------------- --------------
----------------------------------------------------------------------
Net Profit before
exceptional items
894 892 0 % (Constant rates) 2,309 2,259 2 %
----------------------------------------------------------------------
NET PROFIT AT
EXCHANGE RATES
CURRENT IN EACH
854 846 1 % PERIOD 2,089 2,135 (2)%
----------------------------------------------------------------------
Net Profit before
exceptional items
957 893 7 % (Current rates) 2,441 2,248 9 %
----------------------------------------------------------------------
COMBINED EARNINGS
PER SHARE (3)
(Current rates)
- per Fl. 1.12
ordinary share
0.85 0.83 4 % (euros) 2.08 2.00 4 %
- per Fl. 1.12
ordinary share -
0.83 0.80 4 % diluted (euros) 2.03 1.95 4 %
- per 1.4p
ordinary share
12.77 12.32 4 % (eurocents) 31.18 29.93 4 %
- per 1.4p
ordinary share
- diluted
12.45 12.00 4 % (eurocents) 30.41 29.18 4 %
----------------------------------------------------------------------
(2) Operating profit before exceptional items and amortisation of
goodwill and intangibles. See note on 'Goodwill and intangibles'.
(3) See note on 'Share consolidation'.
STATEMENT OF TOTAL RECOGNIZED GAINS AND LOSSES (unaudited)
----------------------------------------------------------
Euro Millions Nine Months
-----------
2000 1999
---- ----
Net profit 2,089 2,135
Currency retranslation 437 95
----------------------
Total recognized gains 2,526 2,230
----------------------
SUMMARY BALANCE SHEET (unaudited)
Euro Millions
As at 30th As at 31st
September December
2000 1999
---- ----
Goodwill and intangibles 4,452 643
Fixed assets 9,289 8,963
Stocks 5,230 5,124
Debtors 9,869 7,685
Cash and current investments 20,981 5,473
Trade & other creditors (11,027) (10,177)
----------------------
38,794 17,711
----------------------
Borrowings 22,806 4,789
Provisions for liabilities
and charges 5,538 4,582
Minority interests 665 579
Capital and reserves 9,785 7,761
----------------------
38,794 17,711
----------------------
CASH FLOW STATEMENT (unaudited)
-------------------------------
Euro Millions Nine Months
-----------
2000 1999
---- ----
Cash flow from operating activities 4,468 3,831
Dividends from joint ventures 19 18
Returns on investments and
servicing of finance (238) (134)
Taxation (1,116) (862)
Capital expenditure and
financial investment (849) (1,021)
Acquisitions and disposals (3,327) (289)
Dividends paid on ordinary
share capital (877) (6,816)
----------------------
CASH INFLOW / (OUTFLOW)
BEFORE MANAGEMENT OF LIQUID
RESOURCES AND FINANCING (1,920) (5,273)
Management of liquid resources (13,273) 4,647
Financing 17,406 866
----------------------
INCREASE / (DECREASE)
IN CASH IN THE PERIOD 2,213 240
----------------------
RECONCILIATION OF CASH FLOW TO MOVEMENT IN NET FUNDS/(DEBT)(unaudited)
----------------------------------------------------------------------
----------------------
NET FUNDS AT JANUARY 1 684 5,778
----------------------
INCREASE / (DECREASE) IN CASH
IN THE PERIOD 2,213 240
Cash flow from (increase) /
decrease in borrowings (17,425) (859)
Cash flow from increase /
(decrease) in liquid resources 13,273 (4,647)
----------------------
Change in net funds / (debt)
resulting from cash flows (1,939) (5,266)
Borrowings within group
companies acquired (92) (1)
Borrowings within group
companies sold - -
Liquid resources within group
companies acquired 8 2
Liquid resources within group
companies sold - -
Non cash movements (145) (1)
Currency retranslation (341) 52
----------------------
MOVEMENT IN NET FUNDS /
(DEBT) IN THE PERIOD (2,509) (5,214)
----------------------
----------------------
NET FUNDS / (DEBT) AT PERIOD END (1,825) 564
----------------------
GEOGRAPHICAL ANALYSIS (unaudited)
---------------------------------
Third Quarter Euro Millions Nine Months
------------- -----------
% Incr./ % Incr./
-------- --------
2000 1999 (Decr.) 2000 1999 (Decr.)
---- ---- ------- ---- ---- -------
TURNOVER
--------
4,852 4,917 (1)% Europe 14,141 14,358 (2)%
2,572 2,270 13 % North America 7,096 6,600 8 %
607 578 5 % Africa and Middle East 1,722 1,692 2 %
1,800 1,669 8 % Asia and Pacific 5,328 4,945 8 %
1,145 1,057 8 % Latin America 3,300 3,154 5 %
---------------------- ----------------------
10,976 10,491 5 % TURNOVER 31,587 30,749 3 %
---------------------- ----------------------
Operating profit - before
exceptional items and
amortization of goodwill
and intangibles
----------------------
748 810 (8)% Europe 1,934 1,839 5 %
401 278 44 % North America 824 642 28 %
75 69 9 % Africa and Middle East 190 202 (6)%
227 198 15 % Asia and Pacific 622 531 17 %
106 63 69 % Latin America 313 289 8 %
---------------------- ----------------------
1,557 1,418 10 % OPERATING PROFIT BEIA 3,883 3,503 11 %
(52) (71) Exceptional Items (428) (169)
Amortization of goodwill
(49) (6) and intangibles (70) (15)
---------------------- ----------------------
1,456 1,341 9 % OPERATING PROFIT 3,385 3,319 2 %
---------------------- ----------------------
Operating margin - before
exceptional items and
amortization of goodwill
and intangibles
----------------------
15.4% 16.5% Europe 13.7% 12.8%
15.6% 12.3% North America 11.6% 9.7%
12.5% 12.0% Africa and Middle East 11.1% 11.9%
12.6% 11.8% Asia and Pacific 11.7% 10.7%
9.3% 6.0% Latin America 9.5% 9.2%
-------------- --------------
14.2% 13.5% OPERATING MARGIN BEIA 12.3% 11.4%
-------------- --------------
13.3% 12.8% OPERATING MARGIN 10.7% 10.8%
-------------- --------------
OPERATIONAL ANALYSIS (unaudited)
--------------------------------
Third Quarter Euro Millions Nine Months
------------- -----------
% Incr./ % Incr./
-------- --------
2000 1999 (Decr.) 2000 1999 (Decr.)
---- ---- ------- ---- ---- -------
TURNOVER
--------
5,426 5,284 3 % Foods 15,698 15,576 1 %
----------------------------------------------------------------------
Oil and dairy based
1,874 1,796 4 % foods and bakery 5,225 5,355 (2)%
Ice cream and
1,962 2,012 (2)% beverages 5,635 5,511 2 %
Culinary and frozen
1,590 1,476 8 % products (4) 4,838 4,710 3 %
----------------------------------------------------------------------
Home Care and
2,422 2,277 6 % Professional Cleaning 7,038 6,813 3 %
2,938 2,751 7 % Personal Care 8,281 7,820 6 %
190 179 5 % Other Operations (4) 570 540 5 %
---------------------- ----------------------
10,976 10,491 5 % TURNOVER 31,587 30,749 3 %
---------------------- ----------------------
OPERATING PROFIT - before
exceptional items and
amortization of goodwill
and intangibles
----------------------
749 691 8 % Foods 1,906 1,619 18 %
----------------------------------------------------------------------
Oil and dairy based
266 193 38 % foods and bakery 691 534 29 %
Ice cream and
295 331 (11)% beverages 698 623 12 %
Culinary and frozen
188 167 12 % products (4) 517 462 12 %
----------------------------------------------------------------------
Home Care and
260 208 25 % Professional Cleaning 662 673 (2)%
541 501 8 % Personal Care 1,301 1,146 14 %
7 18 (53)% Other Operations (4) 14 65 (78)%
---------------------- ----------------------
1,557 1,418 10 % OPERATING PROFIT BEIA 3,883 3,503 11 %
(52) (71) Exceptional items (428) (169)
Amortization of goodwill
(49) (6) and intangibles (70) (15)
---------------------- ----------------------
1,456 1,341 9 % OPERATING PROFIT 3,385 3,319 2 %
---------------------- ----------------------
OPERATING MARGIN - before
exceptional items and
amortization of goodwill
and intangibles
----------------------
13.8% 13.1% Foods 12.1% 10.4%
----------------------------------------------------------------------
Oil and dairy based
14.2% 10.7% foods and bakery 13.2% 10.0%
Ice cream and
15.0% 16.4% beverages 12.4% 11.3%
Culinary and frozen
11.9% 11.4% products (4) 10.7% 9.8%
----------------------------------------------------------------------
Home Care and
10.8% 9.2% Professional Cleaning 9.4% 9.9%
18.4% 18.2% Personal Care 15.7% 14.7%
4.0% 9.0% Other Operations (4) 2.5% 12.0%
-------------- --------------
14.2% 13.5% OPERATING MARGIN BEIA 12.3% 11.4%
-------------- --------------
13.3% 12.8% OPERATING MARGIN 10.7% 10.8%
-------------- --------------
(4) Includes a prior year restatement, 130m euros of turnover and 0m
euros of operating profit for the first nine months, relating to a
reclassification of Indian food categories which have been
transferred from Culinary and frozen products to Other Operations.
CONSOLIDATED PROFIT AND LOSS ACCOUNT - CONSTANT EXCHANGE RATES
--------------------------------------------------------------
(unaudited)
-----------
In the profit and loss account given below, the results in both
years have been translated at constant exchange rates, being the
annual average exchange rates for 1999. This reporting convention
facilitates comparisons since the impact of exchange rate fluctuations
is eliminated.
Third Quarter U.S. $ Millions - constant Nine Months
------------- -----------
2000 1999 % Incr./ 2000 1999 % Incr.
---- ---- -------- ---- ---- -------
(Decr.) /(Decr.)
------- --------
11,693 11,175 5 % TURNOVER 33,652 32,754 3 %
----------------------------------------------------------------------
1,552 1,428 9 % OPERATING PROFIT 3,607 3,536 2 %
----------------------------------------------------------------------
Operating Profit
1,660 1,510 10 % BEIA (5) 4,137 3,731 11 %
(56) (76) Exceptional items (456) (180)
Amortization of goodwill
(52) (6) and intangibles (74) (15)
----------------------------------------------------------------------
Income from fixed
9 14 investments 33 42
(65) (45) Interest (137) 16
-------------- --------------
1,496 1,397 7 % PROFIT BEFORE TAXATION 3,503 3,594 (3)%
(577) (438) Taxation (1,245) (1,152)
-------------- --------------
919 959 (4)% PROFIT AFTER TAXATION 2,258 2,442 (8)%
(60) (60) Minority Interests (149) (157)
-------------- --------------
NET PROFIT AT CONSTANT
859 899 (5)% 1999 EXCHANGE RATES 2,109 2,285 (8)%
----------------------------------------------------------------------
Net Profit before
exceptional items
954 951 0 % (Constant rates) 2,460 2,406 2 %
----------------------------------------------------------------------
NET PROFIT AT EXCHANGE
RATES CURRENT IN
780 891 (12)% EACH PERIOD 1,962 2,292 (14)%
----------------------------------------------------------------------
Net Profit before
exceptional items
872 940 (7)% (Current rates) 2,292 2,412 (5)%
----------------------------------------------------------------------
COMBINED EARNINGS PER
SHARE (6)
$ $ (Current rates) $ $
- per Fl. 1.12 of
0.78 0.87 (10)% ordinary share 1.95 2.14 (9)%
- per Fl. 1.12 of
ordinary share -
0.75 0.85 (10)% diluted 1.90 2.09 (9)%
- per 5.6p ordinary
0.47 0.53 (10)% share 1.17 1.29 (9)%
- per 5.6p ordinary
share -
0.45 0.51 (10)% diluted 1.14 1.25 (9)%
(5) Operating profit before exceptional items and amortisation of
goodwill and intangibles. See note on page 10 on 'Goodwill and
intangibles'.
(6) See note on 'Share consolidation'.
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES (unaudited)
----------------------------------------------------------
U.S. $ Millions Nine Months
-----------
2000 1999
---- ----
Net profit 1,962 2,292
Currency retranslation (542) (387)
----------------------
Total recognized gains 1,420 1,905
----------------------
SUMMARY BALANCE SHEET (unaudited)
---------------------------------
U.S. $ Millions
As at 30th As at 31st
September December
2000 1999
---- ----
Goodwill and intangibles 3,916 646
Fixed assets 8,169 9,004
Stocks 4,600 5,147
Debtors 8,680 7,720
Cash and current investments 18,453 5,498
Trade & other creditors (9,698) (10,223)
----------------------
34,120 17,792
----------------------
Borrowings 20,058 4,811
Provisions for liabilities
and charges 4,871 4,603
Minority interests 585 581
Capital and reserves 8,606 7,797
----------------------
34,120 17,792
----------------------
CASH FLOW STATEMENT (unaudited)
-------------------------------
U.S. $ Millions
Nine Months
-----------
2000 1999
---- ----
Cash flow from operating activities 4,193 4,112
Dividends from joint ventures 17 19
Returns on investments and
servicing of finance (224) (145)
Taxation (1,048) (925)
Capital expenditure and
financial investment (797) (1,097)
Acquisitions and disposals (3,123) (309)
Dividends paid on ordinary
share capital (823) (7,315)
----------------------
CASH INFLOW / (OUTFLOW)
BEFORE MANAGEMENT OF LIQUID
RESOURCES AND FINANCING (1,805) (5,660)
Management of liquid resources (12,459) 4,988
Financing 16,339 929
----------------------
INCREASE / (DECREASE)
IN CASH IN THE PERIOD 2,075 257
----------------------
RECONCILIATION OF CASH FLOW TO MOVEMENT IN NET FUNDS/(DEBT)(unaudited)
----------------------------------------------------------------------
----------------------
NET FUNDS AT JANUARY 1 687 6,788
----------------------
INCREASE / (DECREASE) IN CASH
IN THE PERIOD 2,075 257
Cash flow from (increase) /
decrease in borrowings (16,357) (922)
Cash flow from increase /
(decrease) in liquid resources 12,459 (4,988)
----------------------
Change in net funds / (debt)
resulting from cash flows (1,823) (5,653)
Borrowings within group
companies acquired (86) (1)
Borrowings within group
companies sold - -
Liquid resources within group
companies acquired 7 2
Liquid resources within group
companies sold - -
Non cash movements (136) (2)
Currency retranslation (254) (532)
----------------------
MOVEMENT IN NET FUNDS /
(DEBT) IN THE PERIOD (2,292) (6,186)
----------------------
----------------------
NET FUNDS / (DEBT) AT PERIOD END (1,605) 602
----------------------
GEOGRAPHICAL ANALYSIS (unaudited)
---------------------------------
Third Quarter U.S. $ Millions Nine Months
------------- -----------
% Incr./ % Incr./
-------- --------
2000 1999 (Decr.) 2000 1999 (Decr.)
---- ---- ------- ---- ---- -------
TURNOVER
--------
5,169 5,237 (1)% Europe 15,065 15,294 (2)%
2,740 2,417 13 % North America 7,560 7,030 8 %
647 617 5 % Africa and Middle East 1,835 1,803 2 %
1,917 1,778 8 % Asia and Pacific 5,676 5,268 8 %
1,220 1,126 8 % Latin America 3,516 3,359 5 %
-------------------- ---------------------
11,693 11,175 5 % TURNOVER 33,652 32,754 3 %
-------------------- ---------------------
OPERATING PROFIT - before
exceptional items and
amortization of goodwill
and intangibles
797 863 (8)% Europe 2,060 1,959 5 %
427 296 44 % North America 878 684 28 %
81 74 9 % Africa and Middle East 203 215 (6)%
241 210 15 % Asia and Pacific 662 565 17 %
114 67 69 % Latin America 334 308 8 %
-------------------- ---------------------
1,660 1,510 10 % OPERATING PROFIT BEIA 4,137 3,731 11 %
(56) (76) Exceptional Items (456) (180)
Amortization of goodwill
(52) (6) and intangibles (74) (15)
-------------------- ---------------------
1,552 1,428 9 % OPERATING PROFIT 3,607 3,536 2 %
-------------------- ---------------------
OPERATING MARGIN - before
exceptional items and
amortization of goodwill
and intangibles
15.4% 16.5% Europe 13.7% 12.8%
15.6% 12.3% North America 11.6% 9.7%
12.5% 12.0% Africa and Middle East 11.1% 11.9%
12.6% 11.8% Asia and Pacific 11.7% 10.7%
9.3% 6.0% Latin America 9.5% 9.2%
------------- ---------------
14.2% 13.5% OPERATING MARGIN BEIA 12.3% 11.4%
------------- ---------------
13.3% 12.8% OPERATING MARGIN 10.7% 10.8%
------------- ---------------
OPERATIONAL ANALYSIS (unaudited)
--------------------------------
Third Quarter U.S. $ Millions Nine Months
------------- -----------
%Incr./ %Incr./
------ -------
2000 1999 (Decr.) 2000 1999 (Decr.)
---- ---- ------ ---- ---- -----
TURNOVER
--------
5,780 5,627 3 % Foods 16,724 16,592 1 %
----------------------------------------------------------------------
1,996 1,913 4 % Oil and dairy based 5,567 5,704 (2)%
foods and bakery
2,090 2,144 (2)% Ice cream and beverages 6,003 5,871 2 %
1,694 1,570 8 % Culinary and frozen 5,154 5,017 3 %
products (7)
----------------------------------------------------------------------
2,581 2,425 6 % Home Care and Professional 7,498 7,257 3 %
Cleaning
3,130 2,931 7 % Personal Care 8,823 8,330 6 %
202 192 5 % Other Operations (7) 607 575 5 %
----------------------------------------------------------------------
11,693 11,175 5 % TURNOVER 33,652 32,754 3 %
----------------------------------------------------------------------
OPERATING PROFIT - before
exceptional items and
amortization of goodwill
and intangibles
-------------------------
798 736 8 % Foods 2,031 1,725 18 %
----------------------------------------------------------------------
283 205 38 % Oil and dairy based 736 568 29 %
foods and bakery
314 353 (11)% Ice cream and beverages 743 664 12 %
201 178 12 % Culinary and frozen 552 493 12 %
products (7)
----------------------------------------------------------------------
277 222 25 % Home Care and Professional 705 717 (2)%
Cleaning
577 535 8 % Personal Care 1,386 1,221 14 %
8 17 (53)% Other Operations (7) 15 68 (78)%
----------------------------------------------------------------------
1,660 1,510 10 % OPERATING PROFIT BEIA 4,137 3,731 11 %
(56) (76) Exceptional items (456) (180)
(52) (6) Amortization of goodwill (74) (15)
and intangibles
----------------------------------------------------------------------
1,552 1,428 9 % OPERATING PROFIT 3,607 3,536 2 %
----------------------------------------------------------------------
OPERATING MARGIN - before
exceptional items and
amortization of goodwill
and intangibles
-------------------------
13.8% 13.1% Foods 12.1% 10.4%
----------------------------------------------------------------------
14.2% 10.7% Oil and dairy based 13.2% 10.0%
foods and bakery
15.0% 16.4% Ice cream and beverages 12.4% 11.3%
11.9% 11.4% Culinary and frozen 10.7% 9.8%
products (7)
----------------------------------------------------------------------
10.8% 9.2% Home Care and Professional 9.4% 9.9%
Cleaning
18.4% 18.2% Personal Care 15.7% 14.7%
4.0% 9.0% Other Operations (7) 2.5% 12.0%
------------- ---------------
14.2% 13.5% OPERATING MARGIN BEIA 12.3% 11.4%
------------- ---------------
13.3% 12.8% OPERATING MARGIN 10.7% 10.8%
------------- ---------------
(7) Includes a prior year restatement, U.S. $139m of turnover and
U.S. $0m of operating profit for the first nine months, relating
to a reclassification of Indian food categories which have been
transferred from Culinary and frozen products to Other
Operations.
NOTES
Acquisitions
In the first nine months of 2000 the effect on turnover and operating profit of acquisitions made in the period was 622 million euros and 41 million euros, respectively.
Exchange Rates
The results for 2000 and the comparative figures for 1999 have been translated at constant average rates of exchange, being the annual average rates for 1999. For our reporting currencies these were 1 euro = (pound)0.66 = U.S. $1.07. In addition, the results, earnings per share and cash flow statement have been translated at rates current in each period. For our reporting currencies these were:
Third Quarter
2000 1 euro =(pound)0.61 = U.S. $0.91
1999 1 euro =(pound)0.65 = U.S. $1.05
Nine Months
2000 1 euro =(pound)0.61 = U.S. $0.94
1999 1 euro =(pound)0.66 = U.S. $1.07
The balance sheet figures have been translated at period-end rates of exchange. For our reporting currencies these were 1 euro = (pound)0.60 = U.S. $0.88 at the end of the first nine months (December 31, 1999: 1 euro = (pound)0.62 = U.S. $1.00).
Share consolidation
On May 10, 1999 the 1.25p ordinary shares of PLC and the Fl. 1 ordinary shares of N.V. were consolidated, so that every 112 ordinary shares were replaced by 100 1.4p PLC ordinary shares or 100 Fl. 1.12 N.V. ordinary shares. This consolidation was associated with the payment on June 9, 1999, of a special dividend of 66.13p per 1.25p share and Fl. 14.50 per Fl. 1 share, so that the economic impact was that of a share buy back at fair value at that date and therefore, in accordance with U.K. Accounting Standard FRS 14, earnings per share for prior periods have not been restated.
Goodwill and intangibles
In accordance with FRS 10, goodwill and identifiable intangible assets purchased as from January 1, 1998 are capitalized and amortized in operating profit over the period of their expected useful life.
Sale of Elizabeth Arden
On October 31, 2000 Unilever announced the signing of a definitive agreement to sell its Elizabeth Arden business, brands and certain assets to FFI Fragrances based in Miami Lakes, Florida, for a consideration of approximately $225 million (268 million euros approx.). The transaction, subject to customary conditions including regulatory approvals, is expected to be completed around the year end.
The cash inflow, after tax, on disposal will be $160 million (190 million euros approx.). As a result of the write-back of $830 million (988 million euros approx.) of goodwill which was charged direct to shareholders funds on the acquisition of the business in 1989, the loss on disposal, after tax, will be $790 million (940 million euros approx.). The impact on the balance sheet will be to increase overall capital and reserves by some $40 million (48 million euros approx.).
This transaction will be included in Unilever’s fourth quarter results and falls within the restructuring charges of 5 billion euros announced in February as part of Unilever’s Path to Growth strategy.
Interim dividends
The Boards today declared interim dividends in respect of 2000 on the ordinary shares at the following rates which are equivalent in value at the rate of exchange applied under the terms of the Equalization Agreement between the two companies:
N.V.
Per ordinary share 0.48 euros (1999: 0.40 euros (Fl. 0.88))
PLC
Per ordinary share 4.40p (1999: 3.93p)
The N.V. interim dividend will be payable as from December 18, 2000, to shareholders registered at close of business on November 3, 2000.
The PLC interim dividend will be paid on December 18, 2000, to shareholders registered at close of business on November 17, 2000.
Dividend on New York shares of N.V.
The N.V. interim dividend, when converted at the euro/dollar European Central Bank rate of exchange on November 2, 2000, represents U.S. $0.415008 per New York Share of Fl. 1.12 (1999: U.S. $0.415624) before deduction of Netherlands withholding tax. U.S. dollar checks for the interim dividend, after deduction of Netherlands withholding tax at the appropriate rate, will be mailed on December 17, 2000, to holders of record of New York shares at the close of business on November 10, 2000.
Dividend on American shares of PLC
Each American share of PLC represents four 1.4p ordinary shares of PLC. The PLC interim dividend will therefore be 17.60p per American share. If converted at the noon sterling/dollar rate of exchange in London on November 2, 2000, the interim dividend for holders resident in the U.S. would therefore be U.S. $0.2558 per American Share. (1999: U.S. $0.2515).
U.S. dollar checks for the interim dividend converted at the sterling/dollar rate of exchange current in London on December 18, 2000 will be mailed on December 22, 2000 to holders of record of American shares at the close of business on November 17, 2000.
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 N.V. 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 N.V. and PLC shares using the exchange rate of (pound)1 = Fl. 12, in accordance with the Equalization Agreement, taking into account the share consolidation.
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 first nine months
----------------------------------------------------
Constant rates Current rates
-------------- -------------
2000 1999 2000 1999
---- ---- ---- ----
Thousands of units
Average number of
combined share units
of Fl. 1.12 989,573 1,063,020 989,573 1,063,020
Average number of
combined share units
of 1.4p 6,597,155 7,086,800 6,597,155 7,086,800
COMBINED EPS
------------
Net profit 1,979 2,145 2,089 2,135
less: Preference
dividends 31 14 32 14
Net profit attributable
to ordinary capital 1,948 2,131 2,057 2,121
---------------------------------------------
Combined EPS per
Fl. 1.12 (euros) 1.97 2.00 2.08 2.00
---------------------------------------------
Combined EPS per
1.4p (eurocents) 29.52 30.06 31.18 29.93
---------------------------------------------
COMBINED EPS - Before exceptional items
---------------------------------------
Net profit 1,979 2,145 2,089 2,135
Add back exceptional
items net of tax 330 114 352 113
Net profit before
exceptional items 2,309 2,259 2,441 2,248
less: Preference
dividends 31 14 32 14
Net profit attributable
before exceptional items 2,278 2,245 2,409 2,234
---------------------------------------------
Combined EPS before
exceptional items
per Fl. 1.12 (euros) 2.30 2.11 2.44 2.10
---------------------------------------------
Combined EPS before
exceptional items per
1.4p (eurocents) 34.52 31.68 36.53 31.51
---------------------------------------------
COMBINED EPS - Diluted
----------------------
Thousands of units
Adjusted average
combined share units
of Fl. 1.12 1,014,722 1,090,414 1,014,722 1,090,414
Adjusted average
combined share units
of 1.4p 6,764,814 7,269,425 6,764,814 7,269,425
Net profit attributable
to ordinary capital 1,948 2,131 2,057 2,121
---------------------------------------------
Combined diluted EPS
per Fl. 1.12 (euros) 1.92 1.95 2.03 1.95
---------------------------------------------
Combined diluted EPS
per 1.4p (Eurocents) 28.79 29.30 30.41 29.18
---------------------------------------------
Earnings per share in U.S. dollars for the first nine months
------------------------------------------------------------
Constant rates Current rates
-------------- -------------
2000 1999 2000 1999
---- ---- ---- ----
Thousands of units
Average number of
combined share units
of Fl. 1.12 989,573 1,063,020 989,573 1,063,020
Average number of
combined share units
of 5.6p 1,649,289 1,771,700 1,649,289 1,771,700
COMBINED EPS
------------
Net profit 2,109 2,285 1,962 2,292
less: Preference
dividends 34 15 30 16
Net profit attributable
to ordinary capital 2,075 2,270 1,932 2,276
---------------------------------------------
Combined EPS
per Fl. 1.12 $ 2.10 $ 2.13 $ 1.95 $ 2.14
---------------------------------------------
Combined EPS per
5.6p $ 1.26 $ 1.28 $ 1.17 $ 1.29
---------------------------------------------
COMBINED EPS - Before exceptional items
---------------------------------------
Net profit 2,109 2,285 1,962 2,292
Add back exceptional
items net of tax 351 121 330 120
Net profit before
exceptional items 2,460 2,406 2,292 2,412
less: Preference
dividends 34 15 30 16
Net profit attributable
before exceptional items 2,426 2,391 2,262 2,396
---------------------------------------------
Combined EPS before
exceptional items
per Fl. 1.12 $ 2.45 $ 2.25 $ 2.29 $ 2.25
---------------------------------------------
Combined EPS before
exceptional items per
5.6p $ 1.47 $ 1.35 $ 1.37 $ 1.35
---------------------------------------------
COMBINED EPS - Diluted
----------------------
Thousands of units
Adjusted average
combined share units
of Fl. 1.12 1,014,722 1,090,414 1,014,722 1,090,414
Adjusted average
combined share units
of 5.6p 1,691,203 1,817,356 1,691,203 1,817,356
Net profit attributable
to ordinary capital 2,075 2,270 1,932 2,276
---------------------------------------------
Combined diluted EPS
per Fl. 1.12 $ 2.04 $ 2.08 $ 1.90 $ 2.09
---------------------------------------------
Combined diluted EPS
per 5.6p $ 1.23 $ 1.25 $ 1.14 $ 1.25
---------------------------------------------
Dates
The provisional results for the fourth quarter and for the year 2000 and the proposed final dividends for 2000 will be published on Thursday, February 8, 2001
