News Column

Unilever Announces Final Results

Jan 23 2013 12:00AM

Marketwire

Tracker

LONDON/ ROTTERDAM -- (Marketwire) -- 01/23/13 --

2012 FULL YEAR AND FOURTH QUARTER RESULTS STRONG, BROAD-BASED GROWTH IN 2012Full year highlights- Turnover increased by 10.5% to EUR51.3 billion with a positiveimpact from foreign exchange of 2.2% and acquisitions net of disposalsof 1.1%.- Underlying sales growth 6.9% comprising volume growth of 3.4% andprice growth of 3.3%.- Emerging markets underlying sales growth 11.4% now representing55% of turnover.- Core operating margin up 30bps to 13.8%; gross margin up 10bps,advertising and promotions up EUR470million at constant exchange rates.- Core earnings per share increased by 11% to EUR1.57; free cash flowof EUR4.3 billion.Fourth quarter highlights- Underlying sales growth 7.8% with volume growth of 4.8% and pricegrowth of 2.9%. Paul Polman: Chief Executive Officer statement"We continue to makegood progress in transforming Unilever into asustainable growth company. We have reported another quarter of goodquality, profitable growth ahead of our markets. All categories and allgeographies grew with a good overall balance between volume and price.Emerging markets again contributed double-digit growth helping usexceed EUR50 billion turnover, an important milestone in our journey todouble the size of Unilever from EUR40 to EUR80 billion whilst reducingour environmental impact.These results have been achieved in tough economic conditions, withvolatile commodity costs and in an intensely competitive environment.They reflect the progress made in delivering bigger, better innovationsand rolling them out faster, improving our execution in the marketplace and increased discipline driving savings in all areas of thebusiness. We continued to invest behind our brands, again increasingadvertising and promotions spend. I am pleased to report that Magnumand Sunsilk have joined the group of EUR1 billion brands in ourportfolio, bringing the total to fourteen. This gives us confidencethat Unilever is becoming fit to win. Importantly, we achieved theseresults whilst continuing to lay the foundations for the long term. TheUnilever Sustainable Living Plan is becoming embedded across thebusiness.However there is no room for complacency: markets will remainchallenging, with intense competition and volatile commodity costs. Weremain focused on achieving another year of profitable volume growthahead of our markets, steady and sustainable core operating marginimprovement and strong cash flow."Key Financials (unaudited)Current Rates Full Year 2012Underlying Sales Growth (*) 6.9%Turnover EUR51.3bn +10.5%Operating Profit EUR7.0bn +9%Net Profit EUR4.9bn +7%Core earnings per share (*) EUR1.57 +11%Diluted earnings per share EUR1.54 +5%Quarterly dividend payable in March 2013 EUR0.243 per share(*) Underlying sales growth and core earnings per share are non-GAAPmeasures, see note 2 on page 10. 23 January 2013 OPERATIONAL REVIEW: CATEGORIES Fourth Quarter 2012(unaudited) Turnover USG UVG UPG EURbn % % %Unilever Total 12.6 7.8 4.8 2.9Personal Care 4.7 11.5 7.2 4.0Foods 3.8 1.3 (0.1) 1.4Refreshment 1.9 9.8 6.7 2.9Home Care 2.3 10.4 7.0 3.1 Full Year 2012 Change in core operating(unaudited) Turnover USG UVG UPG margin EURbn % % % bpsUnilever Total 51.3 6.9 3.4 3.3 30Personal Care 18.1 10.0 6.5 3.3 (50)Foods 14.4 1.8 (0.9) 2.7 -Refreshment 9.7 6.3 2.4 3.9 170Home Care 9.1 10.3 6.2 3.9 50Our markets: Throughout 2012 our markets experienced markedly differentdynamics as emerging markets grew in both volume and value terms whilstdeveloped market value remained subdued, with volumes lower than prioryear.Unilever performance: In this context Unilever delivered anotherquarter of solid growth. All of our categories grew, driven by thecombination of strong innovations, sharpened in-market execution andthe rollout of our brands to new markets. Emerging markets underlyingsales growth was 10.8% in the quarter, evenly split between volume andprice, taking the full year underlying sales growth to 11.4%. Thedeveloped markets grew 4.0% in the quarter and were up 1.6% in the fullyear.Higher commodity costs were offset by increased prices, our strongsavings programmes and the benefits of mix. Full year gross marginimproved 10bps to 40.0% at constant exchange rates. We continued toinvest strongly behind our brands and we increased absolute advertisingand promotions spend by EUR470 million. Lower overhead costs were due toa reduction of 20bps in business restructuring. Core operating marginwas therefore up 30bps at 13.8%.Personal CareHair finished the year with a strong quarter of double-digit growth.Tresemme had an excellent quarter, reflecting strength in Brazil andthe impact of the recent launches in Indonesia and India. Dove Hairbenefited from the continuing success of Dove Damage Therapy. Clearalso grew strongly, completing a good first year in the highlycompetitive US market. Sunsilk became a EUR1 billion brand driven bythe growth of the core business coupled with the success of recentinnovations such as the natural oils range.Skin performance reflected the success of innovations across theportfolio. Dove Nutrium Moisture continues to drive growth in body washand the Dove Purely Pampering range, successful in skin cleansing, isnow being extended to hand & body. Dove Men+Care continued to buildsales and was extended to male face care in the UK. Lifebuoy hadanother strong quarter reflecting good progress on the core products,the success of Lifebuoy Clini-Care 10 and the recent launch ofcolour-changing germ protection hand wash in Indonesia and India. Thebroad-based growth of the Lux brand in emerging markets reflected thesuccessful relaunch with improved product quality, winning finefragrances and strong advertising. The acquired Kalina brands continuedto make good progress in Russia.Deodorants growth reflected a good performance from Rexona with thenotable success of Maximum Protection in Latin America and theextension of the MotionSense technology to North America. Dovedeodorant was underpinned by a strong innovation programme and therollout of Dove Men+Care. Competitive intensity in oral was high butSignal Expert Protection continued to do well and we launched White NowGold in France and Italy.Core operating margin was down 50bps, reflecting stable gross marginand the investment that we are making to build beauty capabilities andinfrastructure.FoodsFoods growth in the quarter was weak, in part due to difficult markets.In spreads we saw a decline in sales although volume shares improved inresponse to actions we took to ensure that our pricing was competitive.There is still more to do to drive category growth, for example oursuccessful liquid margarines for use in cooking. During the quarter,Becel Gold was extended to the Nordics and Bertolli Gold was launchedin the UK. Dressings continued to perform well despite a step-up incompetitive intensity. We continued to benefit from our campaign toinspire new uses of mayonnaise and we are also seeing the impact ofsuccessful digital activities.Despite sluggish growth in the core savoury business, new productinnovations continued to perform well. Knorr jelly bouillon grewstrongly driven by new variant launches such as Borsch and WhiteMushroom in Russia and Herbs and Spices in Austria and Switzerland.Knorr baking bags also grew rapidly and gained share in most marketsdespite intense competition. Our Food Solutions business, servingprofessional chefs, delivered solid results despite challengingdeveloped markets, underpinned by double digit growth in key emergingmarkets.Core operating margin was flat with lower gross margin, reflecting theimpact of higher commodity costs, offset by lower advertising andpromotions and overheads.RefreshmentIce cream saw double-digit growth in the quarter, primarily driven byvolume. Magnum completed a successful year by passing the EUR1 billionmilestone on the back of Magnum Infinity and the recent launches intonew countries such as the Philippines. Cornetto and Max both grewstrongly in 2012. Ben & Jerry's also performed well although we sawintense competition in take home ice cream, particularly in the US.Beverages growth continued to improve in the quarter with Liptonprogressing well, underpinned by the success of teapot bags in Turkeyand the relaunch of the brand in Russia. India delivered a strongperformance on Brooke Bond with double-digit growth in both the premiumand value segments of the market.The 170bps improvement in core operating margin was driven by highergross margin, reflecting a strong savings programme, and improvedoverheads leverage.Home CareFabrics cleaning grew ahead of our markets, reflecting the continuingsuccess of Omo, relaunched to deliver faster stain removal, and therapid growth of liquids across our brands and countries. Fabricconditioners also performed well driven largely by the new concentratedproducts and super-sensorial variants.Household care growth continued to reflect strong performances bySunlight hand dishwash and Domestos. Cif performance also improveddriven for example by a strong innovation programme in Argentina andthe success of the new Cif sprays and wipes with new Easy Lifttechnology in the UK.Successful new business models underpinned the 50bps improvement incore operating margin. OPERATIONAL REVIEW: GEOGRAPHIES Fourth Quarter 2012(unaudited) Turnover USG UVG UPG EURbn % % %Unilever Total 12.6 7.8 4.8 2.9Asia/AMET/RUB 5.0 9.9 5.9 3.8The Americas 4.2 11.8 6.9 4.6Europe 3.3 0.2 0.7 (0.6) Full Year 2012 Change in core operating(unaudited) Turnover USG UVG UPG margin EURbn % % % bpsUnilever Total 51.3 6.9 3.4 3.3 30Asia/AMET/RUB 20.4 10.6 5.7 4.6 110The Americas 17.1 7.9 3.1 4.8 30Europe 13.9 0.8 0.9 (0.1) (90)Asia/AMET/RUBBalanced growth in the fourth quarter, with volumes ahead of ourmarkets, reflected continuing strong performances in Indonesia,Thailand and Pakistan. Growth in India was broad-based, acrosscategories and channels. Russia implemented the regional SAP platformduring the quarter and we saw good progress from the recently acquiredKalina business.Core operating margin was up 110bps, benefiting from improved grossmargin and lower overheads. The overheads result comprised anunderlying improvement combined with the profit on disposal ofproperties in India.The AmericasNorth America grew mid single-digit in the quarter, adjusting for theimpact of the sales brought forward in the prior year prior to asystems upgrade. The growth was mainly volume driven. Magnum continuedto do well in ice cream and the launch of Clear helped drive a strongperformance in hair. In January 2013 we announced the disposal of theSkippy peanut butter business.Latin America grew by 11.6% in the quarter, the sixth successivequarter of double-digit growth, driven by Argentina and Brazil, thelatter benefiting from a strong ice cream performance and the successof Tresemme in hair.Core operating margin, up 30bps, was driven by improved gross marginand overheads offset by higher advertising and promotions expenditure.EuropeEuropean performance was sluggish reflecting the fragile state ofconsumer confidence and intensely competitive markets. However, despitethis difficult environment, we delivered positive growth for the yearwith the UK and France continuing to perform well. We have responded tothe needs of hard-pressed consumers by providing good quality productsat low price points.Core operating margin was down 90bps against a strong prior yearcomparator. Gross margin was negative reflecting the impact of highercommodity costs. ADDITIONAL COMMENTARY ON THE FINANCIAL STATEMENTS - FULL YEARFinance costs and taxThe cost of financing net borrowings in 2012 was EUR390 million versusEUR448 million in 2011. Whilst the average level of net debt increased,interest rate movements were favourable: the average interest rate onborrowings was 3.5% and the average return on cash deposits was 2.9%.The pensions finance cost was a charge of EUR7 million compared withincome of EUR71 million in the prior year.The effective tax rate was 26.4% versus 26.5% in 2011.Joint ventures, associates and other income from non-currentinvestmentsNet profit from joint ventures and associates, together with otherincome from non-current investments contributed EUR91 million comparedto EUR189 million in 2011. The income from joint ventures andassociates was broadly similar to the prior year.Income from non-current investments fell as a result of two significantbut unrelated items. The current year includes the negative impact ofthe impairment of warrants associated with the US laundry businesswhich was sold previously. Separately, in the prior year we benefittedfrom a positive fair value adjustment for warrants associated with theprevious disposal of our interest in JohnsonDiversey.Earnings per shareCore earnings per share for the full year was up 11% at EUR1.57, drivenby the improvement in core operating profit, lower financing costs,lower tax rates and currency which were partially offset by higherprofits attributable to non-controlling interests and lower income fromnon-current investments. This measure excludes the impact of businessdisposals, acquisition and disposal related costs, impairments andother one-off items.Fully diluted earnings per share for the full year was up 5% atEUR1.54. This increase is less than that for core earnings per sharedue to a lower profit from business disposals and lower one-off items,principally the pension credit in the prior year.Restructuring and disposalsBusiness restructuring spend at 110bps of turnover for the year was20bps lower than the same period in 2011. This reflects increaseddiscipline in managing restructuring expenditure. We have continued toinvest where necessary to make the business fit to compete in thecurrent environment. This excludes the restructuring associated withacquisitions and disposals.Acquisition and disposal related costs amounted to EUR190 million,lower than the EUR234 million in 2011 and mainly relating to theintegration of Alberto Culver. Profit on business disposals contributedEUR117 million, mainly relating to the disposal of the US frozen foodsbusiness, lower than the EUR221 million in 2011.Free cash flow and net debtFree cash flow was EUR4.3 billion, up from EUR3.1 billion in 2011. Thisis mainly due to higher operating profit and improved trade workingcapital performance. Consistent management attention has enabled us todeliver a third year in which average trade working capital as apercentage of sales has been negative.Closing net debt at EUR7.4 billion was down from EUR8.8 billion as at31 December 2011. Closing cash and cash equivalents was EUR2.5 billion,down from EUR3.5 billion as at 31 December 2011.PensionsThe net pensions deficit was EUR3.7 billion at the end of 2012 versusEUR3.2 billion at the end of 2011. This is due to an increase inliabilities resulting from the decrease in discount rates, offset tosome extent by good investment performance increasing pension assets.Cash expenditure on pensions was EUR721 million, in line withexpectations, versus the EUR553 million in the prior year.This announcement may contain forward-looking statements, including'forward-looking statements' within the meaning of the United StatesPrivate Securities Litigation Reform Act of 1995. Words such as 'will','aim', 'expects', 'anticipates', 'intends', 'believes', 'vision', or thenegative of these terms and other similar expressions of future performanceor results, and their negatives, are intended to identify suchforward-looking statements. These forward-looking statements arebased upon current expectations and assumptions regarding anticipateddevelopments and other factors affecting the Group. They are nothistorical facts, nor are they guarantees of future performance. CAUTIONARY STATEMENTBecause these forward-looking statements involve risks anduncertainties, there are important factors that could cause actualresults to differ materially from those expressed or implied by theseforward-looking statements. Among other risks and uncertainties, thematerial or principal factors which could cause actual results todiffer materially are: Unilever's global brands not meeting consumerpreferences; increasing competitive pressures; Unilever's investmentchoices in its portfolio management; finding sustainable solutions tosupport long-term growth; customer relationships; the recruitment andretention of talented employees; disruptions in our supply chain; thecost of raw materials and commodities; secure and reliable ITinfrastructure; successful execution of acquisitions, divestitures andbusiness transformation projects; economic and political risks andnational disasters; the debt crisis in Europe; financial risks; failureto meet high product safety and ethical standards; and managingregulatory, tax and legal matters. Further details of potential risksand uncertainties affecting the Group are described in the Group'sfilings with the London Stock Exchange, Euronext Amsterdam and the USSecurities and Exchange Commission, including the Group's Annual Reporton Form 20-F for the year ended 31 December 2011 and the Annual Reportand Accounts 2011. These forward-looking statements speak only as ofthe date of this announcement. Except as required by any applicable lawor regulation, the Group expressly disclaims any obligation orundertaking to release publicly any updates or revisions to anyforward-looking statements contained herein to reflect any change inthe Group's expectations with regard thereto or any change in events,conditions or circumstances on which any such statement is based. ENQUIRIESMedia: Media Relations Team Investors: Investor Relations TeamUK +44 20 7822 6719 +44 20 7822 6830trevor.gorin@unilever.com investor.relations@unilever.comNL +31 10 217 4844flip.dotsch@unilever.comThere will be a web cast of the results presentation available at:www.unilever.com/ourcompany/investorcentre/results/quarterlyresults/default.aspThe web cast can also be viewed from the Unilever Investor Relationsapp which you can download from:http://itunes.apple.com/us/app/unilever-investor-centre-app/id483403509?mt=8&ign-mpt=uo%3D4To view the full text of this press release, paste the following linkinto your web browser:http://www.rns-pdf.londonstockexchange.com/rns/1433W_1-2013-1-22.pdf This information is provided by RNS The company news service from the London Stock ExchangeEND





Contacts:
RNS
Customer
Services
0044-207797-4400
Email Contact
http://www.rns.com





Source: Marketwire