-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, TIteSW26pa6w0b34bzyfXrqFi/Y+Q/1nMlHVfYFXoMxkp87WO7+Sb71lIY3+NdYk HNJnYYYZLtsgsNdGgUuYAQ== 0001191638-07-001288.txt : 20070503 0001191638-07-001288.hdr.sgml : 20070503 20070503094544 ACCESSION NUMBER: 0001191638-07-001288 CONFORMED SUBMISSION TYPE: 6-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20070503 FILED AS OF DATE: 20070503 DATE AS OF CHANGE: 20070503 FILER: COMPANY DATA: COMPANY CONFORMED NAME: UNILEVER PLC CENTRAL INDEX KEY: 0000217410 STANDARD INDUSTRIAL CLASSIFICATION: FOOD & KINDRED PRODUCTS [2000] IRS NUMBER: 000000000 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 6-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-04546 FILM NUMBER: 07813163 BUSINESS ADDRESS: STREET 1: UNILEVER HOUSE STREET 2: BLACKFRIARS CITY: LONDON ENGLAND STATE: X0 ZIP: EC4P 4BQ BUSINESS PHONE: 201-894-2790 MAIL ADDRESS: STREET 1: C/O UNILEVER UNITED STATES INC STREET 2: 700 SYLVAN AVENUE (ATTN.: M MONTAGNINO) CITY: ENGLEWOOD CLIFFS STATE: NJ ZIP: 07632 FORMER COMPANY: FORMER CONFORMED NAME: UNILEVER LTD DATE OF NAME CHANGE: 19820429 6-K 1 ulvr200705036k.txt 1ST QUARTER RESULTS 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 -----END PRIVACY-ENHANCED MESSAGE-----