SOURCE: Unilever

August 03, 2006 02:01 ET

Unilever announces Second Quarter and Half Year Results 2006

London/ Rotterdam -- (MARKET WIRE) -- August 3, 2006 --


SECOND QUARTER AND HALF YEAR RESULTS 2006

Broad-based growth in first half year, outlook for 2006 reaffirmed.

FINANCIAL HIGHLIGHTS
(unaudited)



  Second Quarter 2006        EUR million          Half Year 2006     
Current Current Constant                     Current Current Constant
  rates   rates    rates                       rates   rates    rates
                         Continuing                                  
                         operations:                                 
 10 258      3%       3% Turnover             19 793      6%       3%
  1 435     20%      21% Operating profit      2 845     13%      10%
  1 351     28%      29% Pre-tax profit        2 661     19%      16%
  1 007     37%      38% Net profit from       2 008     22%      19%
                         continuing                                  
                         operations                                  
  1 044     33%      34% Net profit from       2 103     19%      17%
                         total operations                            
                                                                     
   0.33     42%      42% EPS from continuing    0.65     23%      20%
                         operations (Euros)                          
   0.34     37%      38% EPS from total         0.69     20%      18%
                         operations (Euros)                          

 

KEY FEATURES

*  Underlying sales growth of 3.4% in the first half year and   
   3.9% in the quarter, with sustained volume momentum and a    
   pick-up in price.                                            
*  Increased investment in advertising and promotions.          
*  Operating margin of 14.4% in the first half year and 14.0% in
   the quarter.                                                 
*  EPS from continuing operations up by 23% in the first half   
   year, and by 8% excluding the impact of last year's          
   impairment of Slim Fast.                                     

GROUP CHIEF EXECUTIVE'S COMMENT

The first half year results give me confidence that we have largely succeeded in restoring competitiveness. All regions and categories contributed to growth and we continue to maintain market share in aggregate. Investment in support of our priorities has been rewarded by sustained progress in personal care, developing and emerging markets and Vitality innovation. I am also particularly encouraged by the resumption of growth in Europe.

I fully expect that we will achieve our outlook for this year of sustained growth and an operating margin above last year. This is in spite of a harsher than expected commodity cost environment which has impacted margins in the first half. We are accelerating our savings programmes and have an increasing contribution from price, while a strong innovation programme is driving improved mix.

We are now moving to the next phase of our strategy. Our new organisation is already focusing resources more effectively behind our priorities. We now need to drive harder to build a winning portfolio by extending our leadership positions and our presence in high growth spaces. At the same time we are improving our consumer marketing and customer development to deliver outstanding execution. Bringing all this together as 'One Unilever' will ensure that we capitalise on both our local roots and global scale.

This strategy will enable us to grow ahead of our markets with sustainable margin improvement. I am confident that this will lead to sustainable underlying sales growth of 3-5%, and an operating margin in excess of 15% by 2010.

Patrick Cescau, Group Chief Executive

3 August 2006

In the following commentary, sales growth is stated on an underlying basis at constant exchange rates and excluding the effects of acquisitions and disposals. Turnover includes the impact of exchange rates and acquisitions and disposals. Unilever uses 'constant rate' and 'underlying' measures primarily for internal performance analysis and targeting purposes. 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.

SECOND QUARTER AND HALF YEAR FINANCIAL RESULTS

Turnover increased by 5.8% in the first half year, with 3.4% underlying sales growth including 0.7% from price. Favourable currency movements added 3.2%, while disposals account for the remainder of the change in turnover. In the second quarter underlying sales grew by 3.9% including pricing of 0.8%.

The operating margin for the first half year at 14.4% was 1.0 percentage point higher than a year ago, while the quarter at 14.0% was 2.0 percentage points higher. Before the impact of restructuring, disposals and impairment, the operating margin would have been 0.6 percentage points lower than a year ago for the first half and 1.0 percentage point lower in the second quarter.

Investment behind our brands has been stepped up in priority categories and regions. Advertising and promotions as a percentage of turnover increased by 0.5 points in the first half year and by 0.6 points in the second quarter.

Gross margins were in line with last year throughout the first half. Savings programmes are accelerating and innovation continues to drive an improved mix However input costs, particularly mineral oil-based, edible oils and tea have continued to rise and pricing has lagged.

Overhead costs were higher in the second quarter than the same period last year, which included the benefit of the profit on sale of an office building in the US.

Net profit from continuing operations increased by 22% in the first half year and by 37% in the quarter. Total net profit, including discontinued operations, increased by 19% in the first half year and by 33% in the quarter.

EPS from continuing operations increased by 23% in the first half year and by 42% in the quarter. Excluding the impact of the Slim Fast impairment charge in the second quarter of last year, EPS from continuing operations increased by 8% in the first half year and by 6% in the quarter. The growth in net profit and EPS included important contributions from improvements in tax, financing, associates and joint ventures for both the half year and the quarter.

Net finance costs benefited from a lower level of net debt and the effect of higher asset values on pensions financing. The tax rate was 25% for the first half year compared with 26% last year. In the quarter the tax rate was also 25%, against 30% last year. The lower rates include better country mix and other improvements.

Share of net profit from joint ventures increased due to strong growth in the partnerships between Lipton and Pepsi for ready-to-drink tea.

OUTLOOK

The outlook for the year of sustained top line growth and an operating margin of greater than 13.4% is reconfirmed. Support for innovation is expected to be strongest in the middle of the year, while last year's heavier weighting of market research and development costs towards the end of the year contribute to an easier margin comparator in the fourth quarter. We now expect gross restructuring costs ahead of one percentage point of sales as savings programmes are accelerated.

The outlook for ungeared free cash flow of EUR25-30 billion over the period 2005-2010 and an improvement in return on invested capital over the 2004 base of 11% is also reaffirmed. This is expected to be achieved with underlying sales growth of 3-5%, representing growth ahead of our markets, and an operating margin in excess of 15% by 2010 after a normal level of restructuring.

CASH FLOW

Net cash flow from operating activities was EUR0.1 billion higher than last year, with lower tax payments more than offsetting a slightly higher seasonal outflow of working capital. Net cash flow used in investing and financing activities was EUR0.3 billion higher than last year including EUR0.1 billion higher dividends. During the first half there was a net reduction in cash and cash equivalents of EUR0.2 billion.

BALANCE SHEET

The euro has strengthened against a number of currencies since the start of the year, resulting in a significant lowering in balance sheet values. Assets and liabilities held for sale include items related to the frozen foods businesses.

Closing net debt was EUR10.3 billion, a reduction of EUR0.2 billion since the start of the year. Total equity has increased by EUR0.4 billion. Net profit for the period of EUR2.1 billion is netted by dividends of EUR1.3 billion and currency translation losses of EUR0.4 billion.

PERFORMANCE BY REGION

EUROPE

Underlying sales grew by 0.3% in the half year and by 1.0% in the second quarter, with volume growth partly offset by a small reduction in price. Conditions in Western Europe remain tough, but demand has picked up slightly and we are growing in line with our markets in aggregate.

There has been a steady improvement in performance over the past six quarters across most countries and categories. The Netherlands grew strongly, benefiting from being a first mover in the One Unilever programme, and the UK and Italy have returned to modest levels of growth. However sales were still down in the quarter in France, despite an improvement over the very slow start to the year, and in Germany. Central and Eastern Europe continues to grow well.

A key driver of the overall improvement has been the impact of Vitality led innovation in savoury, in heart health spreads and in leaf tea. There have also been encouraging share gains in skin care, deodorants and household cleaners. The ice cream season started slowly because of the later Easter but picked up well in the second quarter, although sales were still slightly behind a strong second quarter last year. We have lost some share in laundry and hair care in competitive markets and sales of ready-to-drink tea were lower.

The theme of Vitality runs clearly through the innovation programme. AdeZ drinks, combining the goodness of soya with the refreshment, taste and health of fruit juice have just been launched in the UK, building on success in Latin America. A range of Knorr bouillon cubes with selected natural ingredients and a better, richer taste is being rolled out across the region and Vie 'one shot' fruit and vegetable drinks have been launched into two new countries. 'Fresh' soups in pouches with premium ingredients and tasty recipes are re-invigorating markets in the Netherlands, Russia and Poland. New Lipton see-through pyramid tea bags with a unique and healthy mix of the best tea leaves, spices and dried fruit have been launched in France and the Netherlands.

Product launches in Home and Personal Care with clear functional or emotional benefits are being rolled out rapidly across the region. Dove 'summer glow', offers gentle self-tanning from a trusted brand and the latest Axe fragrance 'Click' is being introduced globally. Comfort Creme blended with natural oils brings premium indulgence to fabric conditioning while Cif Power Cream combines convenience with high performance.

The operating margin for the first half year at 15.0% was 1.7 percentage points lower than last year. This is mainly due to higher restructuring costs, lower profits on disposals and the impact of input cost increases, particularly in edible oils, tea and mineral oil based costs. These were only partly offset by savings programmes and a better mix.

THE AMERICAS

Underlying sales grew by 3.2% in the first half year and by 3.6% in the second quarter with a slight acceleration over the first quarter in both volume and price. Markets in the US continue to grow well and we are maintaining our share. In the rest of the region demand in Home and Personal Care markets remains solid, but there has been a further slowdown in market growth in Foods.

Sales in the US improved after a slow start and were 2.7% ahead in the first half year. This included the continued success of Bertolli frozen meals and Country Crock side dishes, and a second quarter of growth for Slim Fast. There was further innovation driven growth in deodorants and skin cleansing and good results from the initial sell-in of Sunsilk.

In Brazil there was good growth in hair care, deodorants and laundry but skin cleansing and spreads faced tough price competition. In Mexico, new regionally harmonised transaction systems were successfully implemented in April. Trade stocks had been built up ahead of this and, as expected, sales in the second quarter were substantially down as a result. There was strong growth elsewhere, particularly in Canada, Venezuela, Central America and the Caribbean.

Recently introduced products in the US include Wishbone salad 'spritzers', with one calorie per spray, and Lipton pyramid tea bags, as in Europe. Launches under the Breyer's ice cream brand include 'cyclone' with pieces of confectionery in a swirl and more creamy varieties of 'double churn'.

New Knorr soups and bouillons across the region cater for local flavour and tastes while sharing common product platforms. The highly succesful AdeS nutritional drink has been extended with a 'light' variant, new fruit flavours and the launch of Soymilk in Brazil.

We have been reshaping our hair care portfolio in the US. Sunsilk, with ranges tailored to tackle individual hair 'dramas', was launched in the US and Canada in June with a strong initial support programme starting in July. Dove has been further extended throughout the region with three new skin care ranges in the US and 'cool moisture' deodorants and hair care products in Latin America. Laundry innovations include 'baby' and 'foam control' variants of Omo in Brazil and the launch of a second concentrated detergent, Wisk dual action, in the US.

The operating margin for the first half year at 15.3% was 5.6 percentage points higher than last year which included the impairment charge for Slim Fast in the second quarter, equivalent to 5.7 percentage points. The second quarter last year also included a profit on the sale of an office building in the US. Price increases, savings programmes and an improved mix more than offset the impact of higher input costs.

ASIA AFRICA

Underlying sales grew by 8% in the first half year and by 9% in the second quarter. Volume continued to be the major driver, although price increases have been taken in some categories, particularly in laundry to mitigate the effects of higher input costs.

Markets remain buoyant and we have capitalised on our strong market positions to deliver good growth across all categories.

India sustained double-digit sales increases across almost all categories. Growth was driven by a mix of global, regional and local brands, notably Surf, Lux, Lifebuoy, Clinic and Fair and Lovely.

China continued to grow very strongly through a healthy combination of market growth and share gains from better distribution and innovation behind brands such as Omo, Zonghua, Lux and Pond's. Lipton leaf and powder teas both performed well.

Other highlights of the first half year included good performances in Indonesia, Vietnam, Turkey, Egypt and Arabia with Thailand also coming through well in the second quarter. Sales in Nigeria were lower as we work to restructure our distribution model in the country.

Australia has sustained an improved performance, while Japan had a weaker second quarter after a promising start to the year.

Increasingly, innovation activity has been driven globally and regionally rather than locally. The new Sunsilk range has been introduced in most major markets and in laundry the global 'Dirt is Good' positioning is now in place across the region. The latest Axe/Lynx fragrance, 'Click' has been introduced in Australia and New Zealand.

In Foods, low unit priced Knorr bouillon cubes, already successful in Latin America, have been brought to the region and Green Tea innovations are being rolled out extensively. In South Africa, communication behind new Rama communicates the healthy oils in the product, a theme being used well elsewhere around the world.

The operating margin for the first half year at 12.3% was 0.9 percentage points lower than a year ago, due to increased investment in advertising and promotions. Selected price increases, savings programmes and the benefit of increased volumes more than offset the impact of higher input costs.

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 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 and Accounts 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 INTERIM FINANCIAL STATEMENTS


INCOME STATEMENT
(unaudited)



 
         Second Quarter                   EUR million          
   2006    2005    Increase/                                   
                   (Decrease)                                  
                                                               
                Current Constant                               
                  rates    rates                               
                                                               
                                                               
                                                               
                                                               
                                 Continuing operations:        
                                                               
                                                               
                                                               
                                                               
                                                               
 10 258   9 926      3%       3% Turnover                      
                                                               
                                                               
                                                               
  1 435   1 191     20%      21% Operating profit              
                                 After (charging)/crediting:   
                                                               
                                                               
  (100)    (28)                  Restructuring                 
                                                               
                                                               
     36   (326)                  Business disposals and        
                                 impairments                   
                                                               
                                                               
                                                               
                                                               
  (114)   (152)                  Net finance costs             
                                                               
                                                               
   (19)       4                  Finance income                
                                                               
                                                               
  (108)   (144)                  Finance costs                 
                                                               
                                                               
     13    (12)                  Pensions and similar          
                                 obligations                   
                                                               
     16       9                  Share in net profit/(loss) of 
                                 joint ventures                
                                                               
      6     (8)                  Share in net profit/(loss) of 
                                 associates                    
                                                               
      8      13                  Other income from non-current 
                                 investments                   
                                                               
                                                               
                                                               
                                                               
  1 351   1 053     28%      29% Profit before taxation        
                                                               
                                                               
                                                               
  (344)   (317)                  Taxation                      
                                                               
                                                               
                                                               
                                                               
                                                               
  1 007     736     37%      38% Net profit from continuing    
                                 operations                    
                                                               
                                                               
                                                               
     37      48                  Net profit/(loss) from        
                                 discontinued operations       
                                                               
                                                               
                                                               
                                                               
  1 044     784     33%      34% Net profit for the period     
                                                               
                                                               
                                                               
                                 Attributable to:              
                                                               
                                                               
     58      53                  Minority interests            
                                                               
                                                               
    986     731     35%      36% Shareholders' equity          
                                                               
                                                               
                                                               
                                 Combined earnings per share   
                                                               
                                                               
   0.34    0.25     37%      38% Total operations (Euros)      
   0.34    0.24     38%      39% Total operations - diluted    
                                 (Euros)                       
                                                               
                                                               
                                                               
   0.33    0.23     42%      42% Continuing operations (Euros) 
   0.32    0.23     43%      43% Continuing operations -       
                                 diluted (Euros)               


 

 
         EUR million                      Half Year            
                                  2006    2005    Increase/    
                                                  (Decrease)   
                                                               
                                               Current Constant
                                                 rates    rates
                                                               
                                                               
                                                               
                                                               
Continuing operations:                                         
                                                               
                                                               
                                                               
                                                               
                                                               
Turnover                        19 793  18 709      6%       3%
                                                               
                                                               
                                                               
Operating profit                 2 845   2 511     13%      10%
After (charging)/crediting:                                    
                                                               
                                                               
Restructuring                    (161)    (49)                 
                                                               
                                                               
Business disposals and             155   (255)                 
impairments                                                    
                                                               
                                                               
                                                               
                                                               
Net finance costs                (235)   (303)                 
                                                               
                                                               
Finance income                      68     101                 
                                                               
                                                               
Finance costs                    (324)   (377)                 
                                                               
                                                               
Pensions and similar                21    (27)                 
obligations                                                    
                                                               
Share in net profit/(loss) of       34      19                 
joint ventures                                                 
                                                               
Share in net profit/(loss) of        6     (8)                 
associates                                                     
                                                               
Other income from non-current       11      21                 
investments                                                    
                                                               
                                                               
                                                               
                                                               
Profit before taxation           2 661   2 240     19%      16%
                                                               
                                                               
                                                               
Taxation                         (653)   (591)                 
                                                               
                                                               
                                                               
                                                               
                                                               
Net profit from continuing       2 008   1 649     22%      19%
operations
                                                               

                                                               
Net profit/(loss) from              95     116                 
discontinued operations                                        
                                                               
                                                               
                                                               
                                                               
Net profit for the period        2 103   1 765     19%      17%
                                                               
                                                               
                                                               
Attributable to:                                               
                                                               
                                                               
Minority interests                 127     100                 
                                                               
                                                               
Shareholders' equity             1 976   1 665     19%      16%
                                                               
                                                               
                                                               
Combined earnings per share                                    
                                                               
                                                               
Total operations (Euros)          0.69    0.57     20%      18%
Total operations - diluted        0.67    0.55     21%      18%
(Euros)                                                        
                                                               
                                                               
                                                               
Continuing operations (Euros)     0.65    0.53     23%      20%
Continuing operations -           0.63    0.51     23%      21%
diluted (Euros)                                                

 


STATEMENT OF RECOGNISED INCOME AND EXPENSE
(unaudited)
EUR million                                              Half Year     
                                                      2006      2005
                                                                    
                                                                    
                                                                    
                                                                    
                                                                    
Fair value gains/(losses) on financial                   5        12
instruments net of tax                                              
Actuarial gains/(losses) on pension schemes net          7        12
of tax                                                              
Currency retranslation gains/(losses) net of tax     (368)       482
                                                                    
                                                                    
                                                                    
Net income/(expense) recognised directly in          (356)       506
equity                                                              
                                                                    
                                                                    
                                                                    
Net profit for the period                            2 103     1 765
                                                                    
                                                                    
                                                                    
Total recognised income and expense for the          1 747     2 271
period                                                              
                                                                    
                                                                    
                                                                    
Attributable to:                                                    
                                                                    
                                                                    
Minority interests                                     103       146
Shareholders' equity                                 1 644     2 125

 

MOVEMENTS IN EQUITY
(unaudited)
EUR million                                             Half Year     
                                                      2006      2005
                                                                    
                                                                    
                                                                    
                                                                    
                                                                    
Equity at 1 January                                  8 765     6 515
Total recognised income and expense for the          1 747     2 271
period                                                              
Dividends                                          (1 266)   (1 229)
Conversion of preference shares                          -       930
(Purchase)/sale of treasury stock                     (14)     (285)
Share option credit                                     63        85
Dividends paid to minority shareholders               (97)     (106)
Currency retranslation gains/(losses) net of tax      (11)        15
Other movements in equity                                6         -
Equity at the end of the period                      9 193     8 196

 

 


BALANCE SHEET
(unaudited)
EUR million                                  As at    As at    As at
                                                 1       31        2
                                              July December     July
                                              2006     2005     2005
                                                                    
                                                                    
                                                                    
Non-current assets                                                  
                                                                    
                                                                    
Goodwill and intangible assets              17 428   18 055   17 876
Property, plant and equipment                6 139    6 492    6 451
Pension asset for funded schemes in          1 099    1 036      720
surplus                                                             
Deferred tax assets                          1 469    1 703    1 633
Other non-current assets                     1 068    1 072    1 243
Total non-current assets                    27 203   28 358   27 923
                                                                    
                                                                    
                                                                    
Assets held for sale                           488      217      373
                                                                    
                                                                    
                                                                    
Current assets                                                      
                                                                    
                                                                    
Inventories                                  3 893    4 107    4 282
Trade and other current receivables          5 043    4 830    5 370
Other financial assets                         297      335      372
Cash and cash equivalents                    1 590    1 529    1 594
Total current assets                        10 823   10 801   11 618
                                                                    
                                                                    
                                                                    
Current liabilities                                                 
                                                                    
                                                                    
Borrowings due within one year             (5 939)  (5 942)  (7 506)
Trade payables and other current           (7 989)  (8 658)  (8 613)
liabilities                                                         
Restructuring and other provisions           (497)    (644)    (983)
Total current liabilities                 (14 425) (15 244) (17 102)
Net current assets/(liabilities)           (3 602)  (4 443)  (5 484)
Total assets less current liabilities       24 089   24 132   22 812
                                                                    
                                                                    
                                                                    
Non-current liabilities                                             
                                                                    
                                                                    
Borrowings due after one year                6 111    6 457    6 085
Pension liability for funded schemes in      2 305    2 415    2 428
deficit                                                             
Pension liability for unfunded schemes       3 931    4 202    4 002
Restructuring and other provisions             783      732      366
Deferred tax liabilities                       951      933      855
Other non-current liabilities                  583      602      761
Total non-current liabilities               14 664   15 341   14 497
                                                                    
                                                                    
                                                                    
Liabilities held for sale                      232       26      119
                                                                    
                                                                    
                                                                    
Equity                                                              
                                                                    
                                                                    
Shareholders' equity                         8 788    8 361    7 782
Minority interests                             405      404      414
Total equity                                 9 193    8 765    8 196
Total capital employed                      24 089   24 132   22 812


CASH FLOW STATEMENT
(unaudited)
EUR million                                              Half Year 
                                                      2006      2005
                                                                    
                                                                    
                                                                    
                                                                    
                                                                    
Operating activities                                                
                                                                    
                                                                    
Cash flow from operating activities                  1 894     2 127
Income tax paid                                      (435)     (777)
Net cash flow from operating activities              1 459     1 350
                                                                    
                                                                    
                                                                    
Investing activities                                                
                                                                    
                                                                    
Interest received                                       49        79
Net capital expenditure                              (440)     (335)
Acquisitions and disposals                             186       117
Other investing activities                              45       299
Net cash flow from/(used in) investing               (160)       160
activities                                                          
                                                                    
                                                                    
                                                                    
Financing activities                                                
                                                                    
                                                                    
Dividends paid on ordinary share capital           (1 194)   (1 093)
Interest and preference dividends paid               (278)     (364)
Change in borrowings and finance leases                 49       327
Purchase of treasury stock                            (14)     (285)
Other financing activities                            (72)     (101)
Net cash flow from/(used in) financing             (1 509)   (1 516)
activities                                                          
                                                                    
                                                                    
                                                                    
Net increase/(decrease) in cash and cash             (210)       (6)
equivalents                                                         
                                                                    
                                                                    
                                                                    
Cash and cash equivalents at the beginning of        1 265     1 406
the year                                                            
                                                                    
                                                                    
                                                                    
Effect of foreign exchange rate changes                269      (36)
                                                                    
                                                                    
                                                                    
Cash and cash equivalents at the end of period       1 324     1 364
                                                                    
                                                                    

 

ANALYSIS OF NET DEBT
(unaudited)
EUR million                                           As at    As at
                                                          1       31
                                                       July December
                                                       2006     2005    
                                                                
                                                                    
                                                                    
                                                                    
Total borrowings                                   (12 050) (12 399)
Borrowings due within one year                      (5 939)  (5 942)
Borrowings due after one year                       (6 111)  (6 457)
Cash and cash equivalents as per balance sheet        1 590    1 529
Cash and cash equivalents as per cash flow            1 324    1 265
statement                                                           
Add bank overdrafts deducted therein                    266      265
Less cash and cash equivalents in assets/                 -      (1)
liabilities held for sale                                           
Other financial assets                                  297      335
Derivatives and finance leases included in other      (184)       33
receivables and other liabilities                                   
Net debt                                           (10 347) (10 502)


GEOGRAPHICAL ANALYSIS
(unaudited)

Continuing operations - Second Quarter
EUR million                    Europe Americas     Asia    Total
                                                 Africa         
                                                                
                                                                
                                                                
Turnover                                                        
                                                                
                                                                
2005                            4 011    3 301    2 614    9 926
2006                            4 009    3 478    2 771   10 258
Change                           0.0%     5.4%     6.0%     3.3%
Impact of:                                                      
                                                                
                                                                
Exchange rates                 (0.1)%     2.5%   (1.4)%     0.4%
Acquisitions                     0.0%     0.0%     0.0%     0.0%
Disposals                      (0.9)%   (0.7)%   (1.1)%   (0.9)%
Underlying sales growth          1.0%     3.6%     8.7%     3.9%
Price                          (0.2)%     1.6%     1.4%     0.8%
Volume                           1.2%     1.9%     7.2%     3.0%
                                                                
                                                                
                                                                
Operating profit                                                
                                                                
                                                                
2005                              683      167      341    1 191
2006                              539      556      340    1 435
Change current rates          (21.0)%   232.7%   (0.4)%    20.5%
Change constant rates         (21.0)%   237.5%     0.6%    20.8%
                                                                
                                                                
                                                                
Operating margin                                                
                                                                
                                                                
2005                            17.0%     5.1%    13.0%    12.0%
2006                            13.4%    16.0%    12.3%    14.0%
Includes restructuring,                                         
business disposals and                                          
impairments                                                     
2005                             0.1%  (11.0)%     0.2%   (3.6)%
2006                           (1.6)%     0.4%   (0.5)%   (0.6)%

 

Continuing operations -Half Year
EUR million                      Europe Americas     Asia    Total
                                                   Africa         
                                                                  
                                                                  
                                                                  
Turnover                                                          
                                                                  
                                                                  
2005                              7 517    6 249    4 943   18 709
2006                              7 480    6 896    5 417   19 793
Change                           (0.5)%    10.4%     9.6%     5.8%
Impact of:                                                        
                                                                  
                                                                  
Exchange rates                     0.2%     7.5%     2.3%     3.2%
Acquisitions                       0.0%     0.0%     0.0%     0.0%
Disposals                        (1.0)%   (0.5)%   (1.1)%   (0.9)%
Underlying sales growth            0.3%     3.2%     8.3%     3.4%
Price                            (0.4)%     1.5%     1.2%     0.7%
Volume                             0.7%     1.7%     7.0%     2.7%
                                                                  
                                                                  
                                                                  
Operating profit                                                  
                                                                  
                                                                  
2005                              1 253      606      652    2 511
2006                              1 121    1 056      668    2 845
Change current rates            (10.5)%    74.3%     2.3%    13.3%
Change constant rates           (10.7)%    60.7%   (0.2)%     9.8%
                                                                  
                                                                  
                                                                  
Operating margin                                                  
                                                                  
                                                                  
2005                              16.7%     9.7%    13.2%    13.4%
2006                              15.0%    15.3%    12.3%    14.4%
Includes restructuring,                                           
business disposals and                                            
impairments                                                       
2005                               0.4%   (5.8)%     0.6%   (1.6)%
2006                             (0.4)%     0.0%     0.5%     0.0%

 

Operating profit of discontinued operations - Second Quarter
EUR million                      Europe Americas     Asia    Total
                                                   Africa         
                                                                  
                                                                  
                                                                  
2005                                 70        3        -       73
2006                                 58        -        -       58

 

Operating profit of discontinued operations - Half Year
EUR million                      Europe Americas     Asia    Total
                                                   Africa         
                                                                  
                                                                  
                                                                  
2005                                149       20        -      169
2006                                139        -        -      139


PRODUCT AREA ANALYSIS
(unaudited)

Continuing operations - Second Quarter
EUR million                 Savoury,   Ice cream       Foods
                           dressings         and            
                         and spreads   beverages            
                                                            
                                                            
                                                            
Turnover                                                    
                                                            
                                                            
2005                           3 267       2 294       5 561
2006                           3 338       2 362       5 700
Change                          2.2%        2.9%        2.5%
Impact of:                                                  
                                                            
                                                            
Exchange rates                  0.5%        0.4%        0.4%
Acquisitions                    0.0%        0.0%        0.0%
Disposals                     (1.5)%      (0.4)%      (1.0)%
Underlying sales growth         3.2%        3.0%        3.1%
                                                            
                                                            
                                                            
Operating profit                                            
                                                            
                                                            
2005                             519          73         592
2006                             463         383         846
Change current rates         (10.7)%      429.6%       43.2%
Change constant rates        (10.9)%      502.0%       45.3%
                                                            
                                                            
                                                            
Operating margin                                            
                                                            
                                                            
2005                           15.9%        3.2%       10.6%
2006                           13.9%       16.3%       14.9%

 
EUR million             Personal Home care  Home and     Total
                            care       and  Personal          
                                     other      Care          
                                                              
                                                              
                                                              
Turnover                                                      
                                                              
                                                              
2005                       2 595     1 770     4 365     9 926
2006                       2 764     1 794     4 558    10 258
Change                      6.5%      1.3%      4.4%      3.3%
Impact of:                                                    
                                                              
                                                              
Exchange rates              0.5%      0.1%      0.4%      0.4%
Acquisitions                0.0%      0.0%      0.0%      0.0%
Disposals                 (1.1)%    (0.3)%    (0.7)%    (0.9)%
Underlying sales            7.1%      1.4%      4.8%      3.9%
growth                                                        
                                                              
                                                              
                                                              
Operating profit                                              
                                                              
                                                              
2005                         418       181       599     1 191
2006                         451       138       589     1 435
Change current rates        7.8%   (24.3)%    (1.9)%     20.5%
Change constant rates       6.6%   (25.3)%    (3.0)%     20.8%
                                                              
                                                              
                                                              
Operating margin                                              
                                                              
                                                              
2005                       16.1%     10.2%     13.7%     12.0%
2006                       16.2%      7.6%     12.8%     14.0%

 

 


 

 

Continuing operations - Half Year
EUR million                 Savoury,   Ice cream       Foods
                           dressings         and            
                         and spreads   beverages            
                                                            
                                                            
                                                            
Turnover                                                    
                                                            
                                                            
2005                           6 503       3 789      10 292
2006                           6 737       3 992      10 729
Change                          3.6%        5.3%        4.2%
Impact of:                                                  
                                                            
                                                            
Exchange rates                  2.5%        2.8%        2.6%
Acquisitions                    0.0%        0.0%        0.0%
Disposals                     (1.5)%      (0.3)%      (1.0)%
Underlying sales growth         2.5%        2.8%        2.6%
                                                            
                                                            
                                                            
Operating profit                                            
                                                            
                                                            
2005                           1 087         196       1 283
2006                           1 037         544       1 581
Change current rates          (4.6)%      178.3%       23.3%
Change constant rates         (6.5)%      179.2%       21.3%
                                                            

Operating margin                                            
                                                            
                                                            
2005                           16.7%        5.2%       12.5%
2006                           15.4%       13.6%       14.7%


 

 
EUR million              Personal  Home care   Home and     Total
                             care        and   Personal          
                                       other       Care          
                                                                 
                                                                 
                                                                 
Turnover                                                         
                                                                 
                                                                 
2005                        4 973      3 444      8 417    18 709
2006                        5 466      3 598      9 064    19 793
Change                       9.9%       4.5%       7.7%      5.8%
Impact of:                                                       
                                                                 
                                                                 
Exchange rates               4.1%       3.5%       3.8%      3.2%
Acquisitions                 0.0%       0.1%       0.0%      0.0%
Disposals                  (0.8)%     (0.5)%     (0.7)%    (0.9)%
Underlying sales             6.4%       1.4%       4.4%      3.4%
growth                                                           
                                                                 
                                                                 
                                                                 
Operating profit                                                 
                                                                 
                                                                 
2005                          853        375      1 228     2 511
2006                          950        314      1 264     2 845
Change current rates        11.3%    (16.3)%       2.9%     13.3%
Change constant rates        5.9%    (20.0)%     (2.0)%      9.8%
                                                                 
                                                                 
                                                                 
Operating margin                                                 
                                                                 
                                                                 
2005                        17.2%      10.9%      14.6%     13.4%
2006                        17.4%       8.7%      13.9%     14.4%

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. These are the same accounting policies as those used for preparation of the Annual Report and Accounts for the year ended 31 December 2005.

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.

Discontinued operations

In line with the requirements of IFRS 5, the frozen foods businesses in Western Europe which are planned to be sold are treated as discontinued operations, together with the results of Unilever Cosmetics International, which was sold in the middle of last year.

Restated figures for all quarters of 2005 are available at www.unilever.com/ ourcompany/investorcentre.

The net cash flows attributable to the discontinued operations in respect of operating, investing and financing activities for the half year were EUR63 million, EUR(2) million and EUR(2) million respectively (2005: EUR(37) million, EUR19 million and EUR(5) million). Earnings per share for discontinued operations are given on page 12.

Taxation

The charge for the year to date includes EUR76 million (2005: EUR76 million) relating to United Kingdom taxation.

Issuances and repayments of debt and purchase of own shares

On 7 June 2006 Unilever repaid on maturity a EUR1.0 billion bond with a fixed interest rate of 5.125%. Also in June we repaid three floating rate bonds denominated in Japanese yen for a total of Y 37 billion (approximately EUR250 million) and issued a new floating rate bond for a similar amount with a maturity date of June 2008.

Exchange rate conventions

The income statement on page 5, the statement of recognised income and expense and the movements in equity on page 6 and the cash flow statement on page 8 are translated at rates current in each period.

The balance sheet on page 7 and the analysis of net debt on page 8 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 2005 have been 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

At the Annual General Meetings of NV and PLC held on 8 May and 9 May 2006 respectively, shareholders approved proposals that the NV ordinary shares be split 3 to 1 and that the PLC ordinary shares be consolidated 9 to 20. Corresponding changes have also been made to the NV New York shares and PLC ADRs, so that these units now also represent equivalent value to the shares traded in the UK and the Netherlands.

These changes are aimed at improving transparency for investors and establishing a one-to-one equivalence in their economic interests in the Unilever Group. 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; (ii) conversion of the EUR0.05 NV preference shares (up to the point of conversion); and (iii) the exercise of share options by employees.

Earnings per share attributable to discontinued operations were as follows:


 
                                2006              2005
                                                      
                                                      
Second quarter:                                       
                                                      
                                                      
Basic EPS                   EUR 0.01          EUR 0.02
Diluted EPS                 EUR 0.02          EUR 0.01
First half year:                                      
                                                      
                                                      
Basic EPS                   EUR 0.04          EUR 0.04
Diluted EPS                 EUR 0.04          EUR 0.04


 

 

Earnings per share for total operations for the first half year

                                                   2006     2005
                                                                
                                                                
                                                                
                                                                
                                                                
Combined EPS                                        Thousands of
                                                           units
Average number of combined share units            2 881    2 922
                                                    632      018
                                                                
                                                                
                                                                
                                                     EUR million
                                                                
                                                                
Net profit attributable to shareholders'          1 976    1 665
equity                                                          
                                                                
                                                                
                                                                
Combined EPS (Euros)                               0.69     0.57
                                                                
                                                                
                                                                
Combined EPS - Diluted                              Thousands of
                                                           units
Adjusted average number of combined share         2 966    3 019
units                                               729      830
                                                                
                                                                
                                                                
                                                     EUR million
                                                                
                                                                
Adjusted net profit attributable to               1 976    1 668
shareholders' equity                                            
                                                                
                                                                
                                                                
Combined EPS - diluted (Euros)                     0.67     0.55
                                                                
                                                                
                                                                
                                                                
                                                                
                                                                
Earnings per share in US Dollars and Sterling                   
                                                                
                                                                
Combined EPS (Dollars)                             0.84     0.73
Combined EPS - diluted (Dollars)                   0.82     0.71
                                                                
                                                                
                                                                
Combined EPS (Pounds)                              0.47     0.39
Combined EPS - diluted (Pounds)                    0.46     0.38

DATES

The results for the third quarter and the announcement of interim dividends will be published on 2 November 2006.

ENQUIRIES: UNILEVER PRESS OFFICE +44 (0) 20 7822 6805/6010

Internet: www.unilever.com

E-mail: press-office.london@unilever.com

3 August 2006

                      This information is provided by RNS
            The company news service from the London Stock Exchange