London/ Rotterdam--(Marketwire - August 2, 2007) - SECOND QUARTER AND HALF YEAR RESULTS 2007
KEY FINANCIALS
(unaudited)
Second Quarter 2007 EUR million
Current Current Constant
rates rates rates
Continuing operations:
10 526 3 % 5 % Turnover
1 443 1 % 3 % Operating profit
1 412 4 % 6 % Pre-tax profit
1 153 14 % 17 % Net profit from continuing operations
1 207 16 % 18 % Net profit from total operations
0.38 15 % 17 % EPS from continuing operations
(Euros)
0.40 16 % 18 % EPS from total operations (Euros)
EUR million Half Year 2007
Current Current Constant
rates rates rates
Continuing operations:
Turnover 20 054 1 % 5 %
Operating profit 2 745 (4)% 0 %
Pre-tax profit 2 744 3 % 6 %
Net profit from continuing operations 2 205 10 % 13 %
Net profit from total operations 2 281 8 % 11 %
EPS from continuing operations 0.72 10 % 13 %
(Euros)
EPS from total operations (Euros) 0.75 9 % 12 %
Strong first half growth and underlying improvement in margins. Plans to
accelerate change.
HIGHLIGHTS
Financial Highlights of the Half Year
- Underlying sales growth of 5.8%.
- Operating margin of 13.7%, with an underlying improvement of 0.3
percentage points (before higher charges for restructuring and
lower disposal profits).
- Earnings per share from continuing operations up 10%, including
good contributions from joint ventures and associates, reduced
finance costs and a lower tax rate.
Operational Highlights
- Broad-based sales growth across all regions and categories. A
step-up in innovation driving strong growth in priority areas of
personal care, developing and emerging markets and Vitality.
Sales ahead of a systems change in the US contribute 0.4
percentage points to first half growth.
- Increased pricing to offset rising commodity costs. Sustained
contribution from 'One Unilever' and other savings.
Outlook for the year
- Underlying sales growth now expected to be at the upper end
of the 3-5% range, together with an underlying improvement
in operating margin.
Accelerating change
- Plans to step up innovation, shaping the portfolio and margin
improvement.
- Planned disposals of over EUR2 billion of turnover including
North American laundry.
- Accelerated programme to generate savings of EUR1.5 billion.
GROUP CHIEF EXECUTIVE COMMENT
"Our first half performance reflects the success of the strategy initiated in
2005 and keeps us on track towards achieving our objectives. We set out this
year to sustain our growth momentum and deliver an underlying improvement in
operating margin. Despite rising commodity costs, we have started to see the
benefits of growth coming through in the bottom line.
Our growth strategy, investment in core capabilities, new operating model and
'One Unilever' programme have all been integral to our improved performance. We
are now announcing plans to build on this platform and accelerate our
performance.
Growth remains our number one priority: growth ahead of our markets, with better
margin development, and greater resilience to internal and external changes. The
steps we are taking now support this agenda by enhancing innovation, more
aggressively shaping our portfolio and driving still harder towards a more
efficient cost and asset base.
I am pleased with the progress we have made to date, and the plans announced
today reassure me of further progress to 2010 and beyond."
Patrick Cescau, Group Chief Executive 2 August 2007
ACCELERATING CHANGE
Building on the progress made since 2005, the programme announced today includes
the following key features:
Shaping the portfolio
- Planned disposals of more than EUR2 billion of turnover,
including North American laundry.
- Disposals increase Unilever's growth rate by around 0.4
percentage points and are neutral to operating margin after
removal of uncovered costs.
Accelerating margin improvement
- Simplifying the organisation by grouping countries in
clusters and streamlining regional structures.
- Reducing supply chain costs and assets, while improving
on-shelf availability.
- Reduction in annual cost base by around EUR1.5 billion by
exit 2010 (compared with the 2006 base). This includes both
new plans and the completion of 'One Unilever' and other
existing initiatives.
- Additional benefits in speed of decision making and
innovation roll-out.
- Restructuring costs to average around 2.5% of sales over the
period 2007-2009.
2007 OUTLOOK
- Underlying sales growth at the upper end of the 3-5% range.
- Underlying improvement in operating margin.
- Higher restructuring costs. Profits on disposals depend on
timing and outcome of the disposal programme. Reported
operating margin will reflect this.
LONGER TERM TARGETS
Current progress and existing plans keep Unilever on track
to achieve growth and margin objectives:
- Underlying sales growth of 3-5% p.a.
- Operating margin in excess of 15% by 2010 after charging
50-100 bps of ongoing restructuring.
New plans announced today are expected to:
- Strengthen the portfolio growth potential over time.
- Enable operating margin target to be exceeded.
Ungeared free cash flow (UFCF):
- Against the base of EUR25-30 billion (2005-2010),
disposals already made reduce UFCF by EUR1.2 billion.
- Planned disposals would lead to a further reduction
of EUR0.8 billion (proceeds of disposals are not included
in UFCF).
- Additional planned restructuring reduces UFCF by around
EUR0.5 billion in the period, while enhancing the ongoing
cash generating capacity of the business.
ENQUIRIES
Media: Media Relations Team
UK +44 20 7822 6805 tim.johns@unilever.com
NL +31 10 217 4844
tanno.massar@unilever.com
Investors: Investor Relations Team
UK +44 20 7822 6830 investor.relations@unilever.com
US +1 201 894 2615 investor.relations-NewYork@unilever.com
There will be a web cast of the results presentation available at:
www.unilever.com/ourcompany/investorcentre/results/quarterlyresults/default.asp
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