3rd Aug 2006 07:02
Unilever PLC03 August 2006 SECOND QUARTER AND HALF YEAR RESULTS 2006 Broad-based growth in first half year, outlook for 2006 reaffirmed. FINANCIAL HIGHLIGHTS (unaudited) Second Quarter 2006 • million Half Year 2006-------------------------- --------------------------Current Current Constant Current Current Constantrates rates rates rates rates rates Continuing operations:------- ------- ------- ------- ------- -------10 258 3% 3% Turnover 19 793 6% 3%------- ------- ------- ------- ------- -------1 435 20% 21% Operating profit 2 845 13% 10%------- ------- ------- ------- ------- -------1 351 28% 29% Pre-tax profit 2 661 19% 16%------- ------- ------- ------- ------- -------1 007 37% 38% Net profit from continuing 2 008 22% 19%------- ------- ------- operations ------- ------- -------1 044 33% 34% Net profit from total 2 103 19% 17%------- ------- ------- operations ------- ------- -------------- ------- ------- ------- ------- ------- 0.33 42% 42% EPS from continuing 0.65 23% 20%------- ------- ------- operations (Euros) ------- ------- ------- 0.34 37% 38% EPS from total operations 0.69 20% 18%------- ------- ------- (Euros) ------- ------- ------- KEY FEATURES • Underlying sales growth of 3.4% in the first half year and 3.9% in the quarter, with sustained volume momentum and a pick-up in price.• Increased investment in advertising and promotions.• Operating margin of 14.4% in the first half year and 14.0% in the quarter.• EPS from continuing operations up by 23% in the first half year, and by 8% excluding the impact of last year's impairment of Slim Fast. GROUP CHIEF EXECUTIVE'S COMMENT The first half year results give me confidence that we have largely succeeded inrestoring competitiveness. All regions and categories contributed to growth andwe continue to maintain market share in aggregate. Investment in support of ourpriorities has been rewarded by sustained progress in personal care, developingand emerging markets and Vitality innovation. I am also particularly encouragedby the resumption of growth in Europe. I fully expect that we will achieve our outlook for this year of sustainedgrowth and an operating margin above last year. This is in spite of a harsherthan expected commodity cost environment which has impacted margins in the firsthalf. We are accelerating our savings programmes and have an increasingcontribution from price, while a strong innovation programme is driving improvedmix. We are now moving to the next phase of our strategy. Our new organisation isalready focusing resources more effectively behind our priorities. We now needto drive harder to build a winning portfolio by extending our leadershippositions and our presence in high growth spaces. At the same time we areimproving our consumer marketing and customer development to deliver outstandingexecution. Bringing all this together as 'One Unilever' will ensure that wecapitalise on both our local roots and global scale. This strategy will enable us to grow ahead of our markets with sustainablemargin improvement. I am confident that this will lead to sustainable underlyingsales growth of 3-5%, and an operating margin in excess of 15% by 2010. Patrick Cescau, Group Chief Executive 3 August 2006 In the following commentary, sales growth is stated on an underlying basis atconstant exchange rates and excluding the effects of acquisitions and disposals.Turnover includes the impact of exchange rates and acquisitions and disposals.Unilever uses 'constant rate' and 'underlying' measures primarily for internalperformance analysis and targeting purposes. Unilever believes that suchmeasures provide additional information for shareholders on underlying businessperformance trends. Such measures are not defined under IFRS or US GAAP and arenot intended to be a substitute for GAAP measures of turnover, profit and cashflow. SECOND QUARTER AND HALF YEAR FINANCIAL RESULTS Turnover increased by 5.8% in the first half year, with 3.4% underlying salesgrowth including 0.7% from price. Favourable currency movements added 3.2%,while disposals account for the remainder of the change in turnover. In thesecond quarter underlying sales grew by 3.9% including pricing of 0.8%. The operating margin for the first half year at 14.4% was 1.0 percentage pointhigher than a year ago, while the quarter at 14.0% was 2.0 percentage pointshigher. Before the impact of restructuring, disposals and impairment, theoperating margin would have been 0.6 percentage points lower than a year ago forthe first half and 1.0 percentage point lower in the second quarter. Investment behind our brands has been stepped up in priority categories andregions. Advertising and promotions as a percentage of turnover increased by 0.5points in the first half year and by 0.6 points in the second quarter. Gross margins were in line with last year throughout the first half. Savingsprogrammes are accelerating and innovation continues to drive an improved mixHowever input costs, particularly mineral oil-based, edible oils and tea havecontinued to rise and pricing has lagged. Overhead costs were higher in the second quarter than the same period last year,which included the benefit of the profit on sale of an office building in the US. Net profit from continuing operations increased by 22% in the first half yearand by 37% in the quarter. Total net profit, including discontinued operations,increased by 19% in the first half year and by 33% in the quarter. EPS from continuing operations increased by 23% in the first half year and by42% in the quarter. Excluding the impact of the Slim Fast impairment charge inthe second quarter of last year, EPS from continuing operations increased by 8%in the first half year and by 6% in the quarter. The growth in net profit andEPS included important contributions from improvements in tax, financing,associates and joint ventures for both the half year and the quarter. Net finance costs benefited from a lower level of net debt and the effect ofhigher asset values on pensions financing. The tax rate was 25% for the firsthalf year compared with 26% last year. In the quarter the tax rate was also 25%,against 30% last year. The lower rates include better country mix and otherimprovements. Share of net profit from joint ventures increased due to strong growth in thepartnerships between Lipton and Pepsi for ready-to-drink tea. OUTLOOK The outlook for the year of sustained top line growthand an operating margin of greater than 13.4% is reconfirmed. Support forinnovation is expected to be strongest in the middle of the year, while lastyear's heavier weighting of market research and development costs towards theend of the year contribute to an easier margin comparator in the fourth quarter.We now expect gross restructuring costs ahead of one percentage point of salesas savings programmes are accelerated. The outlook for ungeared free cash flow of €25-30 billion over the period2005-2010 and an improvement in return on invested capital over the 2004 base of11% is also reaffirmed. This is expected to be achieved with underlying salesgrowth of 3-5%, representing growth ahead of our markets, and an operatingmargin in excess of 15% by 2010 after a normal level of restructuring. CASH FLOW Net cash flow from operating activities was €0.1 billion higher than last year,with lower tax payments more than offsetting a slightly higher seasonal outflowof working capital. Net cash flow used in investing and financing activities was€0.3 billion higher than last year including €0.1 billion higher dividends.During the first half there was a net reduction in cash and cash equivalents of€0.2 billion. BALANCE SHEET The euro has strengthened against a number of currencies since the start of theyear, resulting in a significant lowering in balance sheet values. Assets andliabilities held for sale include items related to the frozen foods businesses. Closing net debt was €10.3 billion, a reduction of €0.2 billion since the startof the year. Total equity has increased by €0.4 billion. Net profit for theperiod of €2.1 billion is netted by dividends of €1.3 billion and currencytranslation losses of €0.4 billion. PERFORMANCE BY REGION EUROPE Underlying sales grew by 0.3% in the half year and by 1.0% in the secondquarter, with volume growth partly offset by a small reduction in price.Conditions in Western Europe remain tough, but demand has picked up slightly andwe are growing in line with our markets in aggregate. There has been a steady improvement in performance over the past six quartersacross most countries and categories. The Netherlands grew strongly, benefitingfrom being a first mover in the One Unilever programme, and the UK and Italyhave returned to modest levels of growth. However sales were still down in thequarter in France, despite an improvement over the very slow start to the year,and in Germany. Central and Eastern Europe continues to grow well. A key driver of the overall improvement has been the impact of Vitality ledinnovation in savoury, in heart health spreads and in leaf tea. There have alsobeen encouraging share gains in skin care, deodorants and household cleaners.The ice cream season started slowly because of the later Easter but picked upwell in the second quarter, although sales were still slightly behind a strongsecond quarter last year. We have lost some share in laundry and hair care incompetitive markets and sales of ready-to-drink tea were lower. The theme of Vitality runs clearly through the innovation programme. AdeZdrinks, combining the goodness of soya with the refreshment, taste and health offruit juice have just been launched in the UK, building on success in LatinAmerica. A range of Knorr bouillon cubes with selected natural ingredients and abetter, richer taste is being rolled out across the region and Vie 'one shot'fruit and vegetable drinks have been launched into two new countries. 'Fresh'soups in pouches with premium ingredients and tasty recipes are re-invigoratingmarkets in the Netherlands, Russia and Poland. New Lipton see-through pyramidtea bags with a unique and healthy mix of the best tea leaves, spices and driedfruit have been launched in France and the Netherlands. Product launches in Home and Personal Care with clear functional or emotionalbenefits are being rolled out rapidly across the region. Dove 'summer glow',offers gentle self-tanning from a trusted brand and the latest Axe fragrance'Click' is being introduced globally. Comfort Creme blended with natural oilsbrings premium indulgence to fabric conditioning while Cif Power Cream combinesconvenience with high performance. The operating margin for the first half year at 15.0% was 1.7 percentage pointslower than last year. This is mainly due to higher restructuring costs, lowerprofits on disposals and the impact of input cost increases, particularly inedible oils, tea and mineral oil based costs. These were only partly offset bysavings programmes and a better mix. THE AMERICAS Underlying sales grew by 3.2% in the first half year and by 3.6% in the secondquarter with a slight acceleration over the first quarter in both volume andprice. Markets in the US continue to grow well and we are maintaining our share.In the rest of the region demand in Home and Personal Care markets remainssolid, but there has been a further slowdown in market growth in Foods. Sales in the US improved after a slow start and were 2.7% ahead in the firsthalf year. This included the continued success of Bertolli frozen meals andCountry Crock side dishes, and a second quarter of growth for Slim Fast. Therewas further innovation driven growth in deodorants and skin cleansing and goodresults from the initial sell-in of Sunsilk. In Brazil there was good growth in hair care, deodorants and laundry but skincleansing and spreads faced tough price competition. In Mexico, new regionallyharmonised transaction systems were successfully implemented in April. Tradestocks had been built up ahead of this and, as expected, sales in the secondquarter were substantially down as a result. There was strong growth elsewhere,particularly in Canada, Venezuela, Central America and the Caribbean. Recently introduced products in the US include Wishbone salad 'spritzers', withone calorie per spray, and Lipton pyramid tea bags, as in Europe. Launches underthe Breyer's ice cream brand include 'cyclone' with pieces of confectionery in aswirl and more creamy varieties of 'double churn'. New Knorr soups and bouillons across the region cater for local flavour andtastes while sharing common product platforms. The highly succesful AdeSnutritional drink has been extended with a 'light' variant, new fruit flavoursand the launch of Soymilk in Brazil. We have been reshaping our hair care portfolio in the US. Sunsilk, with rangestailored to tackle individual hair 'dramas', was launched in the US and Canadain June with a strong initial support programme starting in July. Dove has beenfurther extended throughout the region with three new skin care ranges in the USand 'cool moisture' deodorants and hair care products in Latin America. Laundryinnovations include 'baby' and 'foam control' variants of Omo in Brazil and thelaunch of a second concentrated detergent, Wisk dual action, in the US. The operating margin for the first half year at 15.3%was 5.6 percentage points higher than last year which included the impairmentcharge for Slim Fast in the second quarter, equivalent to 5.7 percentage points.The second quarter last year also included a profit on the sale of an officebuilding in the US. Price increases, savings programmes and an improved mix morethan offset the impact of higher input costs. ASIA AFRICA Underlying sales grew by 8% in the first half year and by 9% in the secondquarter. Volume continued to be the major driver, although price increases havebeen taken in some categories, particularly in laundry to mitigate the effectsof higher input costs. Markets remain buoyant and we have capitalised on our strong market positions todeliver good growth across all categories. India sustained double-digit sales increases across almost all categories.Growth was driven by a mix of global, regional and local brands, notably Surf,Lux, Lifebuoy, Clinic and Fair and Lovely. China continued to grow very strongly through a healthy combination of marketgrowth and share gains from better distribution and innovation behind brandssuch as Omo, Zonghua, Lux and Pond's. Lipton leaf and powder teas both performedwell. Other highlights of the first half year included good performances in Indonesia,Vietnam, Turkey, Egypt and Arabia with Thailand also coming through well in thesecond quarter. Sales in Nigeria were lower as we work to restructure ourdistribution model in the country. Australia has sustained an improved performance, while Japan had a weaker secondquarter after a promising start to the year. Increasingly, innovation activity has been driven globally and regionally ratherthan locally. The new Sunsilk range has been introduced in most major marketsand in laundry the global 'Dirt is Good' positioning is now in place across theregion. The latest Axe/Lynx fragrance, 'Click' has been introduced in Australiaand New Zealand. In Foods, low unit priced Knorr bouillon cubes, already successful in LatinAmerica, have been brought to the region and Green Tea innovations are beingrolled out extensively. In South Africa, communication behind new Ramacommunicates the healthy oils in the product, a theme being used well elsewherearound the world. The operating margin for the first half year at 12.3% was 0.9 percentage pointslower than a year ago, due to increased investment in advertising andpromotions. Selected price increases, savings programmes and the benefit ofincreased volumes more than offset the impact of higher input costs. SAFE HARBOUR STATEMENT: This announcement may contain forward-lookingstatements, including 'forward-looking statements' within the meaning of theUnited States Private Securities Litigation Reform Act of 1995. Words such as'expects', 'anticipates', 'intends' or the negative of these terms and othersimilar expressions of future performance or results and their negatives areintended to identify such forward-looking statements. These forward-lookingstatements are based upon current expectations and assumptions regardinganticipated developments and other factors affecting the Group. They are nothistorical facts, nor are they guarantees of future performance. Because theseforward-looking statements involve risks and uncertainties, there are importantfactors that could cause actual results to differ materially from thoseexpressed or implied by these forward-looking statements, including, amongothers, competitive pricing and activities, consumption levels, costs, theability to maintain and manage key customer relationships and supply chainsources, currency values, interest rates, the ability to integrate acquisitionsand complete planned divestitures, physical risks, environmental risks, theability to manage regulatory, tax and legal matters and resolve pending matterswithin current estimates, legislative, fiscal and regulatory developments,political, economic and social conditions in the geographic markets where theGroup operates and new or changed priorities of the Boards. Further details ofpotential risks and uncertainties affecting the Group are described in theGroup's filings with the London Stock Exchange, Euronext Amsterdam and the USSecurities and Exchange Commission, including the Annual Report and Accounts onForm 20-F. These forward-looking statements speak only as of the date of thisdocument. Except as required by any applicable law or regulation, the Groupexpressly disclaims any obligation or undertaking to release publicly anyupdates or revisions to any forward-looking statements contained herein toreflect any change in the Group's expectations with regard thereto or any changein events, conditions or circumstances on which any such statement is based. CONDENSED FINANCIAL STATEMENTS INCOME STATEMENT(unaudited) Second Quarter • million Half Year---------------------------------------------- -------------------------------------------- 2006 2005 Increase/ 2006 2005 Increase/ (Decrease) (Decrease) Current rates Constant rates Current rates Constant rates Continuing operations: 10 258 9 926 3% 3% Turnover 19 793 18 709 6% 3% 1 435 1 191 20% 21% Operating profit 2 845 2 511 13% 10%------ ------ ------ ------ -------------------- ------ ------ ------ ------ After (charging)/ crediting: (100) (28) Restructuring (161) (49) 36 (326) Business disposals 155 (255) and impairments ------ ------ ------ ------ -------------------- ------ ------ ------ ------ (114) (152) Net finance costs (235) (303) ------ ------ ------ ------ -------------------- ------ ------ ------ ------ (19) 4 Finance income 68 101 (108) (144) Finance costs (324) (377) 13 (12) Pensions and similar 21 (27) obligations ------ ------ ------ ------ -------------------- ------ ------ ------ ------ 16 9 Share in net profit/ 34 19 (loss) of joint ventures 6 (8) Share in net profit/ 6 (8) (loss) of associates 8 13 Other income from 11 21 ------ ------ non-current ------ ------ investments 1 351 1 053 28% 29% Profit before 2 661 2 240 19% 16% taxation (344) (317) Taxation (653) (591) ------ ------ ------ ------ 1 007 736 37% 38% Net profit from 2 008 1 649 22% 19% continuing operations 37 48 Net profit/(loss) 95 116 ------ ------ from discontinued ------ ------ operations 1 044 784 33% 34% Net profit for the 2 103 1 765 19% 17% period ------ ------ ------ ------ -------------------- ------ ------ ------ ------ Attributable to: 58 53 Minority interests 127 100 986 731 35% 36% Shareholders' equity 1 976 1 665 19% 16% ------ ------ ------ ------ -------------------- ------ ------ ------ ------ ------ ------ ------ ------ -------------------- ------ ------ ------ ------ Combined earnings per share 0.34 0.25 37% 38% Total operations 0.69 0.57 20% 18% (Euros) 0.34 0.24 38% 39% Total operations - 0.67 0.55 21% 18% diluted (Euros) 0.33 0.23 42% 42% Continuing operations 0.65 0.53 23% 20% (Euros) 0.32 0.23 43% 43% Continuing operations 0.63 0.51 23% 21% - diluted (Euros) ------ ------ ------ ------ -------------------- ------ ------ ------ ------ STATEMENT OF RECOGNISED INCOME AND EXPENSE (unaudited)• million Half Year ---------------- 2006 2005 Fair value gains/(losses) on financial instruments net of tax 5 12Actuarial gains/(losses) on pension schemes net of tax 7 12Currency retranslation gains/(losses) net of tax (368) 482 --------- --------- Net income/(expense) recognised directly in equity (356) 506 Net profit for the period 2 103 1 765 --------- --------- Total recognised income and expense for the period 1 747 2 271----------------------------------------- --------- ---------Attributable to:Minority interests 103 146Shareholders' equity 1 644 2 125----------------------------------------- --------- --------- MOVEMENTS IN EQUITY (unaudited)• million Half Year --------------- 2006 2005 Equity at 1 January 8 765 6 515Total recognised income and expense for the period 1 747 2 271Dividends (1 266) (1 229)Conversion of preference shares - 930(Purchase)/sale of treasury stock (14) (285)Share option credit 63 85Dividends paid to minority shareholders (97) (106)Currency retranslation gains/(losses) net of tax (11) 15Other movements in equity 6 - --------- ---------Equity at the end of the period 9 193 8 196 BALANCE SHEET(unaudited) --------- --------- ---------• million As at As at As at 1 July 31 December 2 July 2006 2005 2005 --------- --------- --------- Non-current assets--------------------Goodwill and intangible assets 17 428 18 055 17 876Property, plant and equipment 6 139 6 492 6 451Pension asset for funded schemes in surplus 1 099 1 036 720Deferred tax assets 1 469 1 703 1 633Other non-current assets 1 068 1 072 1 243 --------- --------- ---------Total non-current assets 27 203 28 358 27 923 Assets held for sale 488 217 373 Current assets----------------Inventories 3 893 4 107 4 282Trade and other current receivables 5 043 4 830 5 370Other financial assets 297 335 372Cash and cash equivalents 1 590 1 529 1 594 --------- --------- ---------Total current assets 10 823 10 801 11 618 Current liabilities---------------------Borrowings due within one year (5 939) (5 942) (7 506)Trade payables and other current liabilities (7 989) (8 658) (8 613)Restructuring and other provisions (497) (644) (983) --------- --------- ---------Total current liabilities (14 425) (15 244) (17 102) --------- --------- ---------Net current assets/(liabilities) (3 602) (4 443) (5 484) --------- --------- ---------Total assets less current liabilities 24 089 24 132 22 812 Non-current liabilities-------------------------Borrowings due after one year 6 111 6 457 6 085Pension liability for funded schemes indeficit 2 305 2 415 2 428Pension liability for unfunded schemes 3 931 4 202 4 002Restructuring and other provisions 783 732 366Deferred tax liabilities 951 933 855Other non-current liabilities 583 602 761 --------- --------- ---------Total non-current liabilities 14 664 15 341 14 497 Liabilities held for sale 232 26 119 Equity--------Shareholders' equity 8 788 8 361 7 782Minority interests 405 404 414 --------- --------- ---------Total equity 9 193 8 765 8 196 --------- --------- ---------Total capital employed 24 089 24 132 22 812 CASH FLOW STATEMENT(unaudited)• million Half Year --------------- 2006 2005 Operating activities----------------------Cash flow from operating activities 1 894 2 127Income tax paid (435) (777) --------- ---------Net cash flow from operating activities 1 459 1 350 Investing activities----------------------Interest received 49 79Net capital expenditure (440) (335)Acquisitions and disposals 186 117Other investing activities 45 299 --------- ---------Net cash flow from/(used in) investing activities (160) 160 Financing activities----------------------Dividends paid on ordinary share capital (1 194) (1 093)Interest and preference dividends paid (278) (364)Change in borrowings and finance leases 49 327Purchase of treasury stock (14) (285)Other financing activities (72) (101) --------- ---------Net cash flow from/(used in) financing activities (1 509) (1 516) --------- --------- Net increase/(decrease) in cash and cash equivalents (210) (6) Cash and cash equivalents at the beginning of the year 1 265 1 406 Effect of foreign exchange rate changes 269 (36) --------- ---------Cash and cash equivalents at the end of period 1 324 1 364 ANALYSIS OF NET DEBT(unaudited) --------- ---------• million As at As at 1 July 31 December 2006 2005 --------- --------- Total borrowings (12 050) (12 399) ------------------------Borrowings due within one year (5 939) (5 942)Borrowings due after one year (6 111) (6 457) ------------------------Cash and cash equivalents as per balance sheet 1 590 1 529 ------------------------Cash and cash equivalents as per cash flow statement 1 324 1 265Add bank overdrafts deducted therein 266 265Less cash and cash equivalents in assets/liabilitiesheld for sale - (1) ------------------------Other financial assets 297 335Derivatives and finance leases included in otherreceivables and other liabilities (184) 33 --------- ---------Net debt (10 347) (10 502) GEOGRAPHICAL ANALYSIS(unaudited) Continuing operations - Second Quarter• million Europe Americas Asia Africa Total -------- -------- -------- -------- Turnover2005 4 011 3 301 2 614 9 9262006 4 009 3 478 2 771 10 258Change 0.0% 5.4% 6.0% 3.3%Impact of:Exchange rates (0.1)% 2.5% (1.4)% 0.4%Acquisitions 0.0% 0.0% 0.0% 0.0%Disposals (0.9)% (0.7)% (1.1)% (0.9)%Underlying sales growth 1.0% 3.6% 8.7% 3.9%---------------------- -------- -------- -------- --------Price (0.2)% 1.6% 1.4% 0.8%Volume 1.2% 1.9% 7.2% 3.0%---------------------- -------- -------- -------- -------- Operating profit2005 683 167 341 1 1912006 539 556 340 1 435Change current rates (21.0)% 232.7% (0.4)% 20.5%Change constant rates (21.0)% 237.5% 0.6% 20.8% Operating margin2005 17.0% 5.1% 13.0% 12.0%2006 13.4% 16.0% 12.3% 14.0%Includes restructuring, businessdisposals and impairments2005 0.1% (11.0)% 0.2% (3.6)%2006 (1.6)% 0.4% (0.5)% (0.6)% Continuing operations -Half Year• million Europe Americas Asia Africa Total -------- -------- -------- -------- Turnover2005 7 517 6 249 4 943 18 7092006 7 480 6 896 5 417 19 793Change (0.5)% 10.4% 9.6% 5.8%Impact of:Exchange rates 0.2% 7.5% 2.3% 3.2%Acquisitions 0.0% 0.0% 0.0% 0.0%Disposals (1.0)% (0.5)% (1.1)% (0.9)%Underlying sales growth 0.3% 3.2% 8.3% 3.4%---------------------- -------- -------- -------- --------Price (0.4)% 1.5% 1.2% 0.7%Volume 0.7% 1.7% 7.0% 2.7%---------------------- -------- -------- -------- -------- Operating profit2005 1 253 606 652 2 5112006 1 121 1 056 668 2 845Change current rates (10.5)% 74.3% 2.3% 13.3%Change constant rates (10.7)% 60.7% (0.2)% 9.8% Operating margin2005 16.7% 9.7% 13.2% 13.4%2006 15.0% 15.3% 12.3% 14.4%Includes restructuring, businessdisposals and impairments2005 0.4% (5.8)% 0.6% (1.6)%2006 (0.4)% 0.0% 0.5% 0.0% Operating profit of discontinued operations - Second Quarter• million Europe Americas Asia Africa Total -------- -------- -------- -------- 2005 70 3 - 732006 58 - - 58 Operating profit of discontinued operations - Half Year• million Europe Americas Asia Africa Total -------- -------- -------- -------- 2005 149 20 - 1692006 139 - - 139 PRODUCT AREA ANALYSIS(unaudited) Continuing operations - Second Quarter -------- -------- -------- -------- -------- -------- --------• million Savoury, Ice cream and Foods Personal care Home care Home and Total dressings and beverages and Personal Care spreads other -------- -------- -------- -------- -------- -------- -------- Turnover 2005 3 267 2 294 5 561 2 595 1 770 4 365 9 926 2006 3 338 2 362 5 700 2 764 1 794 4 558 10 258Change 2.2% 2.9% 2.5% 6.5% 1.3% 4.4% 3.3%Impact of:Exchange 0.5% 0.4% 0.4% 0.5% 0.1% 0.4% 0.4%ratesAcquisitions 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%Disposals (1.5)% (0.4)% (1.0)% (1.1)% (0.3)% (0.7)% (0.9)%Underlyingsales growth 3.2% 3.0% 3.1% 7.1% 1.4% 4.8% 3.9% Operatingprofit 2005 519 73 592 418 181 599 1 191 2006 463 383 846 451 138 589 1 435Changecurrent (10.7)% 429.6% 43.2% 7.8% (24.3)% (1.9)% 20.5%ratesChangeconstant (10.9)% 502.0% 45.3% 6.6% (25.3)% (3.0)% 20.8%rates Operatingmargin 2005 15.9% 3.2% 10.6% 16.1% 10.2% 13.7% 12.0% 2006 13.9% 16.3% 14.9% 16.2% 7.6% 12.8% 14.0% -------- -------- Continuing operations - Half Year -------- -------- -------- -------- -------- -------- --------• million Savoury, Ice cream and Foods Personal care Home care Home and Total dressings and beverages and Personal Care spreads other -------- -------- -------- -------- -------- -------- -------- Turnover 2005 6 503 3 789 10 292 4 973 3 444 8 417 18 709 2006 6 737 3 992 10 729 5 466 3 598 9 064 19 793Change 3.6% 5.3% 4.2% 9.9% 4.5% 7.7% 5.8%Impact of:Exchange 2.5% 2.8% 2.6% 4.1% 3.5% 3.8% 3.2%ratesAcquisitions 0.0% 0.0% 0.0% 0.0% 0.1% 0.0% 0.0%Disposals (1.5)% (0.3)% (1.0)% (0.8)% (0.5)% (0.7)% (0.9)%Underlyingsales growth 2.5% 2.8% 2.6% 6.4% 1.4% 4.4% 3.4% Operatingprofit 2005 1 087 196 1 283 853 375 1 228 2 511 2006 1 037 544 1 581 950 314 1 264 2 845Changecurrent (4.6)% 178.3% 23.3% 11.3% (16.3)% 2.9% 13.3%ratesChangeconstant (6.5)% 179.2% 21.3% 5.9% (20.0)% (2.0)% 9.8%rates Operatingmargin 2005 16.7% 5.2% 12.5% 17.2% 10.9% 14.6% 13.4% 2006 15.4% 13.6% 14.7% 17.4% 8.7% 13.9% 14.4% -------- -------- NOTES(unaudited) Basis of Preparation The condensed interim financial statements have been prepared in accordance withInternational Financial Reporting Standards (IFRS) as adopted by the EU. Theseare the same accounting policies as those used for preparation of the AnnualReport and Accounts for the year ended 31 December 2005. The condensed interim financial statements, which comply with IAS 34, are shownat current exchange rates, while percentage year-on-year changes are shown atboth current and constant exchange rates to facilitate comparison. Discontinued operations In line with the requirements of IFRS 5, the frozen foods businesses in WesternEurope which are planned to be sold are treated as discontinued operations,together with the results of Unilever Cosmetics International, which was sold inthe middle of last year. Restated figures for all quarters of 2005 are available at www.unilever.com/ourcompany/investorcentre. The net cash flows attributable to the discontinued operations in respect ofoperating, investing and financing activities for the half year were €63million, •(2) million and •(2) million respectively (2005:•(37) million, €19 million and •(5) million). Earnings per share fordiscontinued operations are given on page 12. Taxation The charge for the year to date includes €76 million (2005: €76 million)relating to United Kingdom taxation. Issuances and repayments of debt and purchase of own shares On 7 June 2006 Unilever repaid on maturity a €1.0 billion bond with a fixedinterest rate of 5.125%. Also in June we repaid three floating rate bondsdenominated in Japanese yen for a total of Y 37 billion (approximately €250million) and issued a new floating rate bond for a similar amount with amaturity date of June 2008. Exchange rate conventions The income statement on page 5, the statement of recognised income and expenseand the movements in equity on page 6 and the cash flow statement on page 8 aretranslated at rates current in each period. The balance sheet on page 7 and the analysis of net debt on page 8 aretranslated at period-end rates of exchange. Supplementary information in US dollars and sterling is available on our websiteat www.unilever.com/ourcompany/investorcentre. The financial statements attached do not constitute the full financialstatements within the meaning of Section 240 of the UK Companies Act 1985. Fullaccounts for Unilever for the year ended 31 December 2005 have been delivered tothe Registrar of Companies. The auditors' report on these accounts wasunqualified and did not contain a statement under Section 237(2) or Section 237(3) of the UK Companies Act 1985. EARNINGS PER SHARE(unaudited) Combined earnings per share At the Annual General Meetings of NV and PLC held on 8 May and 9 May 2006respectively, shareholders approved proposals that the NV ordinary shares besplit 3 to 1 and that the PLC ordinary shares be consolidated 9 to 20.Corresponding changes have also been made to the NV New York shares and PLCADRs, so that these units now also represent equivalent value to the sharestraded in the UK and the Netherlands. These changes are aimed at improving transparency for investors and establishinga one-to-one equivalence in their economic interests in the Unilever Group. Thecombined earnings per share calculations are based on the average number ofshare units representing the combined ordinary shares of NV and PLC in issueduring the period, less the average number of shares held as treasury stock. In calculating diluted earnings per share, a number of adjustments are made tothe number of shares, principally the following: (i) conversion into PLCordinary shares in the year 2038 of shares in a group company under thearrangements for the variation of the Leverhulme Trust; (ii) conversion of the€0.05 NV preference shares (up to the point of conversion); and (iii) theexercise of share options by employees. Earnings per share attributable to discontinued operations were as follows: 2006 2005 ------ ------Second quarter:Basic EPS • 0.01 • 0.02Diluted EPS • 0.02 • 0.01 First half year:Basic EPS • 0.04 • 0.04Diluted EPS • 0.04 • 0.04 Earnings per share for total operations for the first half year 2006 2005 --------- --------- Combined EPS Thousands of units ---------------Average number of combined share units 2 881 632 2 922 018 • million ----------------------Net profit attributable to shareholders' equity 1 976 1 665 ----------------------Combined EPS (Euros) 0.69 0.57 ---------------------- Combined EPS - Diluted Thousands of units ---------------Adjusted average number of combined share units 2 966 729 3 019 830 • million ---------------Adjusted net profit attributable to shareholders'equity 1 976 1 668 ----------------------Combined EPS - diluted (Euros) 0.67 0.55 ---------------------- Earnings per share in US Dollars and Sterling ----------------------Combined EPS (Dollars) 0.84 0.73Combined EPS - diluted (Dollars) 0.82 0.71 ---------------------- ----------------------Combined EPS (Pounds) 0.47 0.39Combined EPS - diluted (Pounds) 0.46 0.38 ---------------------- DATES The results for the third quarter and the announcement of interim dividends willbe published on 2 November 2006. ENQUIRIES: UNILEVER PRESS OFFICE+44 (0) 20 7822 6805/6010Internet: www.unilever.comE-mail: [email protected] 3 August 2006 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Unilever