FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
REPORT OF FOREIGN ISSUER
Pursuant to Rule 13a-16 or 15d-16
of the Securities Exchange Act of 1934
For the month of May, 2007
UNILEVER PLC
(Translation of registrant's name into English)
UNILEVER HOUSE, BLACKFRIARS, LONDON, ENGLAND
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports
under cover Form 20-F or Form 40-F.
Form 20-F..X.. Form 40-F.....
Indicate by check mark if the registrant is submitting the Form 6-K in paper
as permitted by Regulation S-T Rule 101(b)(1):_____
Indicate by check mark if the registrant is submitting the Form 6-K in paper
as permitted by Regulation S-T Rule 101(b)(7):_____
Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes ..... No .X..
If "Yes" is marked, indicate below the file number assigned to the registrant
in connection with Rule 12g3-2(b): 82- _______
Exhibit 99 attached hereto is incorporated herein by reference.
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
UNILEVER PLC
/S/ S G WILLIAMS
By S G WILLIAMS
SECRETARY
Date: May 03, 2007
EXHIBIT INDEX
-------------
EXHIBIT NUMBER EXHIBIT DESCRIPTION
99 Notice to London Stock Exchange dated
03 May 2007, 1st Quarter Results
Exhibit 99
FIRST QUARTER RESULTS 2007
KEY FINANCIALS
(unaudited)
EUR million First Quarter 2007
Current Current Constant
rates rates rates
Continuing operations:
Turnover 9 528 0 % 5 %
Operating profit 1 302 (8)% (3)%
Pre-tax profit 1 332 2 % 5 %
Net profit from continuing operations 1 052 5 % 9 %
Net profit from total operations 1 074 1 % 5 %
EPS from continuing operations (Euros) 0.34 6 % 9 %
EPS from total operations (Euros) 0.35 2 % 5 %
HIGHLIGHTS
Financial Highlights
- Underlying sales growth of 5.7%, mostly volume.
- Operating margin of 13.7%, with an improvement of 0.4 percentage points
before restructuring, disposals and impairments.
- Earnings per share from continuing operations up 6%, with good results from
joint ventures and associates, reduced finance costs and a lower tax rate.
- Currency movements reduced turnover by 5% and earnings per share by 3%.
Operational Highlights
- Broad-based sales growth across regions and categories.
- Better margin development driven by home and personal care.
- Continuing improvement in Europe with underlying sales growth of 3.6%.
- Strong first quarter innovation with bigger launches driving growth in
personal care and developing and emerging markets.
- Continued pace in the implementation of One Unilever and supply chain
improvement programmes.
GROUP CHIEF EXECUTIVE COMMENT
We have had a good start to 2007, with broad-based sales growth across regions
and categories and improved margin development driven by home and personal care.
Sales benefited from a strong innovation programme, especially in personal care,
with several major launches in the quarter. Our European business performed
well, aided by a strong start in ice cream, the timing of price increases in
some key markets and a favourable comparator. Sales growth has been accompanied
by an underlying improvement in our operating margin.
This performance builds on the progress made in 2006 and is further evidence of
the breadth and depth of our change programme. Our growth strategy is focusing
resources behind clear priorities and delivering bigger, better innovation,
faster roll-outs and more effective marketing mixes. New ways of working are
transforming our ability to deploy these innovations and to service customers in
a more efficient way.
Looking forward, we face a significant headwind from rising agricultural
commodity costs which may require further pricing action. I am confident,
however, that the combined benefit of organic growth in our 3-5% guidance range
and improved efficiency leaves us well placed to achieve our margin objectives
for 2007.
The scale of change that has taken place in our business is very significant and
is showing through in our results. Nevertheless we continue to look for
opportunities to speed up the development of our portfolio through acquisitions
and disposals and to accelerate margin improvement towards world class
benchmarks.
Patrick Cescau, Group Chief Executive
3 May 2007
ENQUIRIES
Media: Media Relations Team Investors: Investor Relations team
UK +44 20 7822 6805 tim.johns@unilever.com UK +44 20 7822 6830 investor.relations@unilever.com
NL +31 10 217 4844 US +1 201 894 2615 investor.relations-NewYork@unilever.com
tanno.massar@unilever.com
There will be a web cast of the results presentation available at:
www.unilever.com/ourcompany/investorcentre/results/quarterlyresults/default.asp
UNILEVER FIRST QUARTER RESULTS 2007
In the following commentary we report underlying sales growth (USG) at constant
exchange rates, 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 internal
performance analysis and targeting purposes. We also use the movements in
Ungeared Free Cash Flow and Return On Invested Capital to measure progress
against our longer-term value creation goals. Unilever believes that such
measures provide additional information for shareholders on underlying business
performance trends. Such measures are not defined under IFRS or US GAAP and are
not intended to be a substitute for GAAP measures of turnover, profit and cash
flow. Further information about these measures is available on our website at
www.unilever.com/ourcompany/investorcentre.
1. SUMMARY OF BUSINESS PERFORMANCE FOR THE FIRST QUARTER
Underlying sales grew by 5.7%, mostly from volume and with 0.8% of price
increase.
Europe had a good start to the year with growth of 3.6%, helped by strong sales
ahead of the new ice cream season and a favourable comparator. The Americas
grew 3.2%. Sales in the US were ahead by 3.7% and there were good performances
in most countries in Latin America but Mexico declined against a strong quarter
last year and local competition held back growth in Brazil. Asia Africa grew
11.8% boosted by a strong personal care innovation programme.
All our categories grew in the quarter, with personal care particularly strong,
at 8.4%, but notable contributions also from laundry, household cleaning,
savoury and tea.
Productivity has improved considerably as a result of our savings programmes,
especially the move to 'One Unilever' business in each country around the world,
and the benefit of volume leverage. These gains more than offset a continued
sharp rise in commodity costs, especially in Foods.
Investment in advertising and promotions was maintained and continues to be
focused behind our priorities for growth.
2. FINANCIAL COMMENTARY
2.1 Turnover
Underlying sales growth of 5.7% was fully offset by adverse exchange rate
movements of 4.5% and net disposals of 1.0%. As a result, turnover was in line
with last year.
2.2 Operating profit
Operating profit was 8% below the first quarter of last year, with the operating
margin at 13.7%, 1.1 percentage points lower. Last year included significant
profits on business disposals, while this year included higher restructuring
charges and less disposal profits. Before these items the operating margin was
0.4 percentage points higher.
Advertising and promotions was at a similar level to last year.
Our savings programmes continue to deliver at a consistently high rate. The
combined benefit of these, positive pricing, mix improvement and volume leverage
more than offset cost increases in the quarter.
2.3 Finance costs and tax
Costs of financing net borrowings were 19% lower than last year through a
reduced level of net debt, which at the end of the quarter was EUR7.7 billion.
The credit on pensions financing improved from EUR8 million to EUR34 million as
a result of the better funding position of our schemes and higher expected
equity returns.
The tax charge was lower than last year, reflecting a better country mix. We
continue to expect a tax rate of around 24% for the year, with a particularly
low rate in the second quarter from the favourable completion of tax audits, and
higher rates in the second half.
2.4 Joint Ventures, associates and other income from non-current investments
Our share in net profit from joint ventures increased from EUR18 million to
EUR27 million, mainly from good growth in the partnerships between Lipton and
Pepsi for ready-to-drink tea. This profit now also includes our share of the
full results from Portugal which has been restructured as a single company in
which we have joint control.
Share of net profit from associates was EUR48 million, mostly due to the
placement of further equity by one of our venture capital fund investments.
Profit on other non current investments of EUR25 million includes a one-off gain
in Indonesia.
2.5 Net profit and earnings per share
Net profit from continuing operations grew by 5%, while EPS on the same basis
was up 6%.
Discontinued operations mainly relate to the business results of frozen foods
(which was sold in the fourth quarter of 2006). In addition, the first quarter
of both years includes performance-based contributions resulting from the sale
of UCI in 2005.
2.6 Share buy-backs
On 12 March 2007 we started the EUR1.5 billion share buy-back programme planned
for 2007. By the end of April we had bought back shares to a value of EUR265
million.
2.7 Cash flow
Net cash flow from operating activities was EUR0.1 billion lower than last year,
mainly due to higher cash restructuring costs. Capital expenditure outflow was
at a similar level to the first quarter of 2006.
Cash and cash equivalents increased from EUR0.7 billion at the start of the year
to EUR1.2 billion at the end of the quarter while borrowings increased by a
similar amount.
2.8 Balance sheet
We have evaluated the effects of market movements in the value of assets and
liabilities of our major pension schemes, and now incorporate them in the
balance sheet each quarter in line with common practice. There was an
improvement of EUR0.8 billion in the quarter.
Working capital increases follow the normal seasonal pattern, some of the rise
in inventories being in ice cream.
The changes in deferred tax balances are largely in response to movements in
pension schemes.
2.9 Pensions
The aggregate pension liability, net of assets and before tax, reduced further
from EUR3.1 billion at the start of the year to EUR2.3 billion at the end of the
first quarter reflecting higher interest rates. Within the combined balance,
there is now an aggregate surplus of EUR1.0 billion on funded schemes, and a
slightly reduced liability of EUR3.3 billion on unfunded schemes.
3. OPERATIONAL REVIEW
3.1 Europe
First Quarter 2007
%
% Underlying
2007 2006 change sales growth
Turnover (EUR million) 3 544 3 471 2.1 3.6
Operating Margin (%) 14.4 16.8
Includes:
- Restructuring, business disposals and impairments (1.3) 1.0
Growth
Europe had a strong start to the year, building on the progress made in 2006.
We are now more competitive and are executing better as a result of the changes
that have been made over the past two years. Consumer demand picked up through
last year and this has been sustained in the first quarter.
Underlying sales grew by 3.6%, with volumes ahead by over 4% and a price decline
of 0.7%. Sales in all categories were up. The highest growth rates were in ice
cream, where we anticipated an early start to the season with a strong '
sell-in', and in personal care from an extensive first quarter innovation
programme.
The return to growth in the UK was sustained with share gains in tea and
dressings and good results from personal care innovation and in household care.
These more than offset weaker performances in spreads, laundry and hair care.
It was a good quarter in Germany, particularly in personal care, ice cream and
spreads, and sales were additionally boosted by buying-in ahead of list price
increases at the end of the quarter. The Netherlands continues to grow strongly
demonstrating the benefits of a well established 'One Unilever' approach.
Sales in France were slightly ahead of last year, against a favourable
comparator. It remains a difficult market for us with flat consumer demand and
pressure on pricing, and we are still managing through some operational issues.
Growth in Russia of 10% was fuelled by excellent performances in household
cleaning and personal care.
Innovation
The current innovation programme clearly shows the way in which Vitality is
reshaping our portfolio.
Blue Band/Rama Idea!, a spread with extra nutrients that are good for the brain,
built on its launch in most countries at the end of 2006 and Knorr Vie fruit and
vegetable 'shots' were rolled out to Germany in the first quarter. Flora/Becel
spreads fortified with Omega 3 were launched across the region, while Omega 3
mini-drinks have been introduced to France, Greece and the Netherlands. In
dressings, Hellmann's light with citrus fibre now offers the same taste but in
an even lighter form. This year's ice cream range includes 'Milk-time' tubs,
high in calcium - following a similar concept successful in Asia, Solero exotic,
and Frusi, a healthy yoghurt and fruit snack.
In personal care, Dove continues to broaden its appeal. Just launched, the Dove
pro-age range of skin, deodorants and shampoos is specifically designed
for the over 50's, and the Dove range of 'glow' lotions with subtle self-tanners
has been extended. The latest Axe deodorants come in a 'telescoping' can with
updated graphics and the addition of a new fragrance. 'Small and Mighty'
concentrated liquid laundry detergents, which have been leading the move to the
more efficient and environmentally friendly form in the US market, have been
launched under the Persil and Surf brands in the UK and Skip in France.
Profitability
The operating margin at 14.4% was 2.4 percentage points lower than a year ago
due to a higher level of restructuring and less profit on disposals. Before
these items, the margin was 0.1 percentage points lower than a year ago. The
negative impacts of price reductions and higher commodity costs were largely
offset by cost savings.
3.2 The Americas
First Quarter 2007
%
% Underlying
2007 2006 change sales growth
Turnover (EUR million) 3 231 3 418 (5.5) 3.2
Operating Margin (%) 14.4 14.6
Includes:
- Restructuring, business disposals and impairments (0.6) (0.5)
Growth
Underlying sales grew by 3.2%, mostly from volume and with a good performance in
the US, but growth in Latin America was held back by Brazil and Mexico. The
environment has continued much as in 2006, with healthy market growth overall
but some slowdown in demand in Foods in parts of the region.
The US grew by 3.7% and market shares are steady in aggregate. Growth was
boosted by a full innovation programme in personal care and a favourable
comparator in the first quarter last year when trade stocks were reduced.
Bertolli frozen meals and innovations in tea performed particularly well.
However sales in ice cream were lower, with further trade de-stocking as the
market adjusts to a lower level of promotional activity. We have also lost some
share in ice cream and our marketing plan is directed at correcting this.
In Mexico, sales were well down on a very strong comparator last year which
included the sell-in of product ahead of the implementation of new systems at
the end of the first quarter of 2006. This should reverse in the second
quarter. Looking behind this timing effect, the return to growth in consumer
sales in the second half of last year has been sustained with good growth of
AdeS soy-based drinks and Knorr bouillons.
Sales in Brazil were only slightly ahead, with volume gains largely offset by
negative pricing as we have repositioned our laundry brands against local
competitors. Elsewhere in Latin America, there has been sustained strong growth
across all categories.
Innovation
First quarter foods innovations built on last year's programme. The premium
frozen meals range has been further developed with new dishes under the Bertolli
brand in the US and Knorr in Canada. In Latin America, Knorr has been building
its 'Vitality' credentials with new varieties of bouillons and improved soups.
Hellmann's 'real' campaign highlights its simple ingredients, naturally rich in
Omega 3. In ice cream, we have extended Breyers 'double churn' in the US to fat
free, light and no sugar added variants, while innovations in Latin America
address both Vitality and low income consumer opportunities.
Innovation in personal care highlights the new more global approach. Axe has
been given the same new look in the US as elsewhere in the world, while new
variants of Degree/Rexona 'no white marks' deodorant have been introduced,
including a version for men. The Dove pro-age range of skin, deodorants
and shampoos has been launched in the US at the same time as in Europe and the
new global mix of Clear anti-dandruff shampoo was introduced to Brazil at the
end of the quarter.
Profitability
The operating margin of 14.4% was 0.2 percentage points lower than a year ago as
a result of sharp increases in agricultural commodity costs. Investment in
advertising and promotions was held at last year's level in absolute terms, and
was slightly lower as a percentage of sales.
3.3 Asia Africa
First Quarter 2007
%
% Underlying
2007 2006 change sales growth
Turnover (EUR million) 2 753 2 646 4.0 11.8
Operating Margin (%) 11.9 12.4
Includes:
- Restructuring, business disposals and impairments (0.7) 1.5
Growth
The region continues to be a major driver of growth, with underlying sales ahead
by 11.8% in markets which remain generally buoyant. Our growth is broad-based
across all categories and all major countries. The first quarter also reflected
some pipeline filling for an extensive innovation programme in personal care,
including the launches of Clear in China and Axe in Japan.
India returned to strong growth after a relatively weaker quarter at the end of
2006. Highlights were good performances in laundry led by Surf and Wheel, skin
powered by Lux and hair care with all the major brands contributing. There were
also improved sales in tea.
In China, most categories grew well, especially hair care. Indonesia showed
continued strong growth momentum and there was a much improved performance in
Thailand.
Sales in Japan were ahead in the quarter, boosted by personal care innovations.
Australia had a good start to the year although individual category performance
remains mixed with ice cream, tea and deodorants well up, but lower market
pricing depressing sales in hair care.
In South Africa, Flora, Knorr and our personal care brands led an improving
growth trend. In Turkey, we have raised prices, which held back volumes in a
number of categories.
Innovation
The strong personal care innovation programme in the first quarter reflects our
global priorities.
The new global mix of Clear anti-dandruff shampoo is being launched in a number
of key markets around the world, with the brand being introduced for the first
time in China and Arabia in the first quarter. In Turkey, the brand was updated
including a premium male range.
Another major initiative has been the launch of Axe for the first time in Japan,
where we also brought out new products in the Dove facial self-foaming facial
wash and Lux hair styling ranges.
Pond's anti-ageing face care products have been introduced in several countries,
while in Indonesia we have launched two new hair care products: Dove
anti-dandruff and Clear scalp oil control.
The programme in foods was focused on Vitality initiatives. For example, in
Turkey we have launched Amaze snacks which are good for the brain and a
cholesterol-lowering margarine with plant sterols under the Becel brand.
Meanwhile, in Asia we have extended the 'Moo' range of ice creams containing
super absorbent calcium for children's development.
Profitability
The operating margin, at 11.9%, was 0.5 percentage points lower than a year ago
with higher restructuring costs and no profits on disposals. Before these items
there was an improvement of 1.7 percentage points. This reflects the benefits
of volume growth, savings programmes and price increases to recover rising input
costs. Investment in advertising and promotions was increased to support key
innovation activities.
SAFE HARBOUR STATEMENT: This announcement may contain forward-looking
statements, including 'forward-looking statements' within the meaning of the
United States Private Securities Litigation Reform Act of 1995. Words such as '
expects', 'anticipates', 'intends' or the negative of these terms and other
similar expressions of future performance or results, including financial
objectives to 2010, and their negatives are intended to identify such
forward-looking statements. These forward-looking statements are based upon
current expectations and assumptions regarding anticipated developments and
other factors affecting the Group. They are not historical facts, nor are they
guarantees of future performance. Because these forward-looking statements
involve risks and uncertainties, there are important factors that could cause
actual results to differ materially from those expressed or implied by these
forward-looking statements, including, among others, competitive pricing and
activities, consumption levels, costs, the ability to maintain and manage key
customer relationships and supply chain sources, currency values, interest
rates, the ability to integrate acquisitions and complete planned divestitures,
physical risks, environmental risks, the ability to manage regulatory, tax and
legal matters and resolve pending matters within current estimates, legislative,
fiscal and regulatory developments, political, economic and social conditions in
the geographic markets where the Group operates and new or changed priorities of
the Boards. Further details of potential risks and uncertainties affecting the
Group are described in the Group's filings with the London Stock Exchange,
Euronext Amsterdam and the US Securities and Exchange Commission, including the
Annual Report on Form 20-F. These forward-looking statements speak only as of
the date of this document. Except as required by any applicable law or
regulation, the Group expressly disclaims any obligation or undertaking to
release publicly any updates or revisions to any forward-looking statements
contained herein to reflect any change in the Group's expectations with regard
thereto or any change in events, conditions or circumstances on which any such
statement is based.
CONDENSED FINANCIAL STATEMENTS
INCOME STATEMENT
(unaudited)
EUR million First Quarter
2007 2006 Increase/
(Decrease)
Current Constant
rates rates
Continuing operations:
Turnover 9 528 9 535 0 % 5 %
Operating profit 1 302 1 410 (8)% (3)%
After (charging)/crediting:
Restructuring (121) (61)
Business disposals and impairments 35 119
Net finance costs (70) (121)
Finance income 27 87
Finance costs (131) (216)
Pensions and similar obligations 34 8
Share in net profit/(loss) of joint ventures 27 18
Share in net profit/(loss) of associates 48 -
Other income from non-current investments 25 3
Profit before taxation 1 332 1 310 2 % 5 %
Taxation (280) (309)
Net profit from continuing operations 1 052 1 001 5 % 9 %
Net profit/(loss) from discontinued operations 22 58
Net profit for the period 1 074 1 059 1 % 5 %
Attributable to:
Minority interests 61 69
Shareholders' equity 1 013 990 2 % 5 %
Combined earnings per share
Continuing operations (Euros) 0.34 0.32 6 % 9 %
Continuing operations - diluted (Euros) 0.33 0.31 7 % 10 %
Discontinued operations (Euros) 0.01 0.02
Discontinued operations - diluted (Euros) 0.01 0.02
Total operations (Euros) 0.35 0.34 2 % 5 %
Total operations - diluted (Euros) 0.34 0.33 3 % 6 %
STATEMENT OF RECOGNISED INCOME AND EXPENSE
(unaudited)
EUR million First Quarter
2007 2006
Fair value gains/(losses) on financial instruments net of tax 1 (191)
Actuarial gains/(losses) on pension schemes net of tax 450 10
Currency retranslation gains/(losses) net of tax (13) 183
Net income/(expense) recognised directly in equity 438 2
Net profit for the period 1 074 1 059
Total recognised income and expense for the period 1 512 1 061
Attributable to:
Minority interests 61 69
Shareholders' equity 1 451 992
MOVEMENTS IN EQUITY
(unaudited)
EUR million First Quarter
2007 2006
Equity at 1 January 11 672 8 765
Total recognised income and expense for the period 1 512 1 061
Movement in treasury stock (494) (21)
Share-based payment credit 30 28
Dividends paid to minority shareholders (6) (11)
Currency retranslation gains/(losses) net of tax (3) (4)
Other movements in equity 94 7
Equity at the end of the period 12 805 9 825
BALANCE SHEET
(unaudited)
EUR million As at As at As at
31 March 31 December 1 April
2007 2006 2006
Non-current assets
Goodwill and intangible assets 17 137 17 206 17 892
Property, plant and equipment 6 165 6 276 6 428
Pension asset for funded schemes in surplus 1 779 1 697 1 026
Deferred tax assets 1 164 1 266 1 602
Other non-current assets 1 240 1 126 1 043
Total non-current assets 27 485 27 571 27 991
Current assets
Inventories 4 140 3 796 4 217
Trade and other current receivables 4 833 4 254 4 962
Current tax assets 160 125 144
Other financial assets 266 273 759
Cash and cash equivalents 1 535 1 039 1 969
Non-current assets held for sale 17 14 403
Total current assets 10 951 9 501 12 454
Current liabilities
Financial liabilities (5 102) (4 458) (6 575)
Trade payables and other current liabilities (8 096) (7 838) (7 776)
Current tax liabilities (664) (579) (544)
Provisions (874) (1 009) (562)
Liabilities associated with non-current assets held for sale - - (183)
Total current liabilities (14 736) (13 884) (15 640)
Net current assets/(liabilities) (3 785) (4 383) (3 186)
Total assets less current liabilities 23 700 23 188 24 805
Non-current liabilities
Financial liabilities due after one year 4 353 4 377 6 402
Pensions and post-retirement healthcare benefits liabilities:
Funded schemes in deficit 785 1 379 2 342
Unfunded schemes 3 305 3 398 4 096
Provisions 881 826 787
Deferred tax liabilities 1 108 1 003 931
Other non-current liabilities 463 533 422
Total non-current liabilities 10 895 11 516 14 980
Equity
Shareholders' equity 12 234 11 230 9 365
Minority interests 571 442 460
Total equity 12 805 11 672 9 825
Total capital employed 23 700 23 188 24 805
CASH FLOW STATEMENT
(unaudited)
EUR million First Quarter
2007 2006
Operating activities
Cash flow from operating activities 451 540
Income tax paid (249) (237)
Net cash flow from operating activities 202 303
Investing activities
Interest received 11 76
Net capital expenditure (194) (190)
Acquisitions and disposals 14 143
Other investing activities 64 (36)
Net cash flow from/(used in) investing activities (105) (7)
Financing activities
Dividends paid on ordinary share capital (157) (70)
Interest and preference dividends paid (85) (152)
Change in financial liabilities 647 275
Movement on treasury stock (79) (19)
Other financing activities (36) (9)
Net cash flow from/(used in) financing activities 290 25
Net increase/(decrease) in cash and cash equivalents 387 321
Cash and cash equivalents at the beginning of the year 710 1 265
Effect of foreign exchange rate changes 63 (16)
Cash and cash equivalents at the end of period 1 160 1 570
Reconciliation of net profit to cash flow from operating activities
(unaudited)
EUR million First Quarter
2007 2006
Net profit 1 074 1 059
Taxation 282 331
Share of net profit of joint ventures/associates and other income from non-current (100) (22)
investments
Net finance costs 70 123
Operating profit (continuing and discontinued operations) 1 326 1 491
Depreciation, amortisation and impairment 242 220
Changes in working capital (956) (967)
Pensions and similar provisions less payments (78) (42)
Restructuring and other provisions less payments (63) (51)
Elimination of (profits)/losses on disposals (55) (149)
Non-cash charge for share-based compensation 37 28
Other adjustments (2) 10
Cash flow from operating activities 451 540
ANALYSIS OF NET DEBT
(unaudited)
EUR million As at As at
31 March 31 December
2007 2006
Total financial liabilities (9 455) (8 835)
Financial liabilities due within one year (5 102) (4 458)
Financial liabilities due after one year (4 353) (4 377)
Cash and cash equivalents as per balance sheet 1 535 1 039
Cash and cash equivalents as per cash flow statement 1 160 710
Add bank overdrafts deducted therein 375 329
Financial assets 266 273
Net debt (7 654) (7 523)
GEOGRAPHICAL ANALYSIS
(unaudited)
Continuing operations - First Quarter
EUR million Europe Americas Asia Africa Total
Turnover
2006 3 471 3 418 2 646 9 535
2007 3 544 3 231 2 753 9 528
Change 2.1 % (5.5)% 4.0% (0.1)%
Impact of:
Exchange rates 0.4 % (7.9)% (6.6)% (4.5)%
Acquisitions 0.3 % 0.0 % 0.2 % 0.2 %
Disposals (2.1)% (0.6)% (0.6)% (1.2)%
Underlying sales growth 3.6 % 3.2 % 11.8 % 5.7 %
Price (0.7)% 0.8 % 2.9 % 0.8 %
Volume 4.3 % 2.3 % 8.6 % 4.8 %
Operating profit
2006 582 500 328 1 410
2007 510 465 327 1 302
Change current rates (12.5)% (6.9)% (0.3)% (7.7)%
Change constant rates (12.8)% 1.3 % 7.4 % (3.3)%
Operating margin
2006 16.8 % 14.6 % 12.4 % 14.8 %
2007 14.4 % 14.4 % 11.9 % 13.7 %
Includes restructuring, business disposals and
impairments
2006 1.0 % (0.5)% 1.5 % 0.6 %
2007 (1.3)% (0.6)% (0.7)% (0.9)%
Operating profit of discontinued operations (excluding profit/loss on disposals) - First Quarter
EUR million Europe Americas Asia Africa Total
2006 68 - - 68
2007 - - - -
PRODUCT AREA ANALYSIS
(unaudited)
Continuing operations - First Quarter
Savoury, Ice cream Home care Home and
dressings and Personal and Personal
EUR million and spreads beverages Foods care other Care Total
Turnover
2006 3 399 1 630 5 029 2 702 1 804 4 506 9 535
2007 3 375 1 614 4 989 2 749 1 790 4 539 9 528
Change (0.7)% (1.0)% (0.8)% 1.7 % (0.8)% 0.7 % (0.1)%
Impact of:
Exchange rates (3.7)% (4.6)% (4.0)% (5.3)% (4.9)% (5.1)% (4.5)%
Acquisitions 0.0 % 0.3 % 0.1 % 0.2 % 0.2 % 0.2 % 0.2 %
Disposals (0.8)% (1.4)% (1.0)% (1.2)% (1.6)% (1.3)% (1.2)%
Underlying sales growth 3.8 % 4.9 % 4.2 % 8.4 % 5.8 % 7.4 % 5.7 %
Operating profit
2006 574 161 735 498 177 675 1 410
2007 457 114 571 542 189 731 1 302
Change current rates (20.3)% (29.4)% (22.3)% 8.7 % 7.0 % 8.3 % (7.7)%
Change constant rates (17.5)% (24.6)% (19.1)% 14.3 % 13.3 % 14.1 % (3.3)%
Operating margin
2006 16.9 % 9.9 % 14.6 % 18.4 % 9.8 % 15.0 % 14.8 %
2007 13.5 % 7.1 % 11.4 % 19.7 % 10.6 % 16.1 % 13.7 %
NOTES
(unaudited)
Basis of Preparation
The condensed interim financial statements have been prepared in accordance with
International Financial Reporting Standards (IFRS) as adopted by the EU. The
basis of preparation is consistent with the year ended 31 December 2006 except
that:
- Finance lease creditors and funding-related derivatives have been
reclassified in the balance sheet in order to facilitate the presentation of net
debt. Comparatives for 31 December 2006 and 1 April 2006 have been restated
accordingly; and
- Line items relating to borrowings in the balance sheet have been
renamed to financial liabilities to align with the requirements of IFRS 7
'Financial Instruments - Disclosures' which Unilever has adopted as at 1 January
2007.
The condensed interim financial statements, which comply with IAS 34, are shown
at current exchange rates, while percentage year-on-year changes are shown at
both current and constant exchange rates to facilitate comparison.
Acquisitions and disposals
On 1 January 2007, Unilever completed the restructuring of its Portuguese
businesses into a single entity in which Unilever now holds 55% and Jeronimo
Martins owns 45%. The combined business includes the foods and home and
personal care businesses. The structure of the agreement is such that there is
joint control of the newly formed entity and so it is accounted for by Unilever
as a joint venture.
Discontinued operations
The net cash flows attributable to the discontinued operations in respect of
operating, investing and financing activities for the first quarter were
EUR(2) million, EUR24 million and EUR0 million respectively
(2006: EUR(9) million, EUR5 million and EUR(1) million).
Taxation
The tax rate in the quarter was 22% compared with 24% in the first quarter of
last year. The tax rate is calculated by dividing the tax charge by pre-tax
profit excluding the contribution of joint ventures and associates. The tax
charge for the quarter includes EUR61 million (2006: EUR17 million) relating to
United Kingdom taxation.
Exchange rate conventions
The income statement on page 9, the statement of recognised income and expense
and the movements in equity on page 10 and the cash flow statement on page 12
are translated at rates current in each period.
The balance sheet on page 11 and the analysis of net debt on page 12 are
translated at period-end rates of exchange.
Supplementary information in US dollars and sterling is available on our website
at www.unilever.com/ourcompany/investorcentre.
The financial statements attached do not constitute the full financial
statements within the meaning of Section 240 of the UK Companies Act 1985. Full
accounts for Unilever for the year ended 31 December 2006 will be delivered to
the Registrar of Companies. The auditors' report on these accounts was
unqualified 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
The earnings per share information given below, including the comparative
amounts for 2006, is expressed in terms of the nominal share values which have
applied since 22 May 2006 following the split of NV shares and the consolidation
of PLC shares which were approved at the 2006 AGMs.
The combined earnings per share calculations are based on the average number of
share units representing the combined ordinary shares of NV and PLC in issue
during the period, less the average number of shares held as treasury stock.
In calculating diluted earnings per share, a number of adjustments are made to
the number of shares, principally the following: (i) conversion into PLC
ordinary shares in the year 2038 of shares in a group company under the
arrangements for the variation of the Leverhulme Trust and (ii) the exercise of
share options by employees.
Earnings per share for total operations for the first quarter
2007 2006
Combined EPS Thousands of units
Average number of combined share units 2 890 542 2 880 783
EUR million
Net profit attributable to shareholders' equity 1 013 990
Combined EPS (Euros) 0.35 0.34
Combined EPS - Diluted Thousands of units
Adjusted average number of combined share units 2 984 902 2 996 271
Combined EPS - diluted (Euros) 0.34 0.33
Earnings per share in US Dollars and Sterling
Combined EPS (Dollars) 0.46 0.41
Combined EPS - diluted (Dollars) 0.44 0.40
Combined EPS (Pounds) 0.23 0.24
Combined EPS - diluted (Pounds) 0.23 0.23
ANNUAL GENERAL MEETING MATTERS
The Annual General Meetings (AGM's) for Unilever N.V. and PLC will be held on 15
May and 16 May respectively.
Appointment of new Chief Financial Officer
The process of appointing a new Chief Financial Officer is well under way.
However, we do not anticipate having a successor to Rudy Markham in place until
after the forthcoming AGM's. In these circumstances, Rudy will step down, as
planned, from the Boards at the 2007 AGM's, but has agreed to continue to act as
Unilever's Chief Financial Officer until such time as his successor is in place.
The Unilever Global Share Incentive Plan 2007
One of the resolutions being put to the AGM's is the adoption of The Unilever
Global Share Incentive Plan 2007 (the Plan). The Boards of Unilever have now
agreed the performance conditions for 2007-9, with target ranges for the three
components as follows:
- Average Underlying Sales Growth: 3.5% to 5.5% p.a.
- Ungeared Free Cash Flow: EUR12.2 billion to EUR13.6 billion
- Total Shareholder Return (relative to peer group): from the mid-point
(position 11 out of 21) to top three (position 1 to 3 out of 21)
Further details can be found in the appendices to the AGM Notices. There has
been no change to Unilever's long-term financial targets.
SECOND QUARTER RESULTS
The results for the second quarter and for the first half year 2007 will be
published on 2 August 2007.
3 May 2007