London/ Rotterdam -- (MARKET WIRE) -- February 8, 2007 --
FOURTH QUARTER AND ANNUAL RESULTS 2006
KEY FINANCIALS
(unaudited)
Fourth Quarter 2006 EUR million
Current Current Constant
rates rates rates
Continuing operations:
9 727 0% 3% Turnover
1 062 5% 10% Operating profit
1 042 20% 25% Pre-tax profit
898 30% 35% Net profit from continuing operations
2 100 185% 195% Net profit from total operations
0.29 31% 35% EPS from continuing operations (Euros)
0.71 196% 206% EPS from total operations (Euros)
EUR million Full Year 2006
Current Current Constant
rates rates rates
Continuing operations:
Turnover 39 642 3% 3%
Operating profit 5 408 7% 6%
Pre-tax profit 4 831 7% 7%
Net profit from continuing
operations 3 685 10% 10%
Net profit from total
operations 5 015 26% 26%
EPS from continuing
operations (Euros) 1.19 11% 10%
EPS from total
operations (Euros) 1.65 27% 27%
HIGHLIGHTS
Focus on business priorities results in growth across all regions
Change programme delivering improved operational effectiveness
Full Year Financials
* Underlying sales growth of 3.8%.
* Operating margin of 13.6%, up from 13.2% in 2005.
* Savings delivered ahead of plan, but commodity
costs higher than expected. Further increase in
advertising and promotions.
* Net profit from continuing operations up 10%. Net
profit from total operations up by 26% including a
profit of EUR1.2 billion from the sale of
European frozen foods businesses in the fourth quarter.
* Strong ungeared free cash flow of EUR4.2 billion.
* Proposed final dividend of EUR0.47 per NV ordinary
share and 32.04p per PLC ordinary share, raising the
total regular dividend per share by 6% for both NV and PLC.
Additional 'one-off' dividend of EUR750 million paid in the
fourth quarter as previously announced.
Fourth Quarter Financials
* Underlying sales growth of 3.4% against a strong
comparator.
* Operating margin of 10.9%, after charging EUR469 million
of restructuring costs, partly offset by one-time gains
of EUR266 million from changes in pension plans and
healthcare plans. High investment in market research and
development in support of another strong innovation
programme for 2007.
Operational Highlights of the Year
* Focus on personal care, developing and emerging markets,
and Vitality delivering strong growth and share gains
in priority areas.
* Growth in Europe of 1%.
* Market competitiveness restored - market shares stable
in aggregate.
* Change programme delivering tangible results - better
execution in customer management and marketing; good
progress in the move to 'One Unilever' around the world;
faster roll-out of high impact innovations; research and
development capabilities being enhanced.
GROUP CHIEF EXECUTIVE COMMENT
The improved performance in 2006 shows that the wide-ranging changes made to the
business over the last two years are working. I am particularly pleased that
this improvement is broad-based, with every region and category contributing.
The new organisation and the implementation of 'One Unilever' are improving
Unilever's operational effectiveness; bringing faster decision making, better
local execution and enabling us to allocate resources more effectively across
our portfolio.
The work we have done in setting clear priorities and implementing change has
made Unilever a stronger business, able to build on its local strengths and
better exploit the power of being global. However, there is much more to be
done and there are many exciting opportunities ahead of us.
In 2007 we will continue to focus on our growth priorities in order to build
sustainable advantage for our portfolio and a structural improvement in our
growth rate in the long term; and we intend to go further, faster and deeper in
our drive to improve margins.
I am confident that we are well on track to achieve our long-term targets.
2007 Outlook
We expect the business and competitive environment in 2007 to be broadly
unchanged, with consumer demand remaining modest in Europe but robust elsewhere.
Prospects for home and personal care input costs are more favourable than in
2006 but there has been no let-up in the rise of foods commodity prices.
Against this background, and with a strong innovation programme, we expect to
deliver underlying sales growth in 2007 within our 3-5% longer term target
range. Savings programmes are expected to drive an improvement in operating
margin to over 13.6%, after charging restructuring costs of 0.5 to 1 percent of
sales.
Strategy and long term financial targets
At the heart of Unilever's strategy is a concentration of resources on areas
where we have leading positions and on high growth spaces, especially in
personal care, in developing and emerging markets and in Vitality. While the
focus is on developing the business organically, acquisitions and disposals also
have a role to play in accelerating the portfolio development.
To execute this strategy the business has been reorganised to simplify the
management structure and to improve capabilities in marketing, customer
management and research and development. The result is better allocation of
resources, better execution, faster decision-making and greater focus on
efficiency. The new organisation, augmented by the successful 'One Unilever'
project, allows us to leverage our scale both globally and locally.
Unilever's long term ambition is to achieve top-third total shareholder return
and our targets reflect this. Over the period 2005 - 2010 we target ungeared
free cash flow of EUR25-30 billion. Disposals made in the past two years, with no
significant acquisitions to date, have reduced the cash generation over the
period by just over EUR1 billion. Return on invested capital is targeted to
increase over the 2004 base of 11%. We expect underlying sales growth of 3-5%
and an operating margin in excess of 15% by 2010 after a normal level of
restructuring of 0.5 to 1 percent of sales. We are lowering our longer term
guidance for the tax rate from around 28% to around 26%.
Patrick Cescau, Group Chief Executive 8 February 2007
ENQUIRIES
Media: Contacts
UK +44 20 7822 6805 tim.johns@unilever.com
NL +31 10 217 4844
tanno.massar@unilever.com
Investors: Investor Relations team
UK +44 20 7822 6830 investor.relations@unilever.com
US +1 201 894 2615 investor.relations-NewYork@unilever.com
There will be a web cast of the results presentation available at:
www.unilever.com/ourcompany/investorcentre/results/quarterlyresults/default.asp
UNILEVER FOURTH QUARTER AND ANNUAL
RESULTS 2006:
PRELIMINARY STATEMENT
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 YEAR
Underlying sales grew by 3.8% in the year and by 3.4% in the fourth quarter
against a strong comparator. Each quarter of the year has seen growth in the
3-5% range, in line with our markets and with market shares broadly maintained
in each region. Most of the growth continues to come from volume increases, but
the year saw a return to positive pricing (+0.9%).
Our business in Europe returned to growth of 1% in 2006. We are now more
competitive and have also benefited from a modest pick-up in consumer demand.
There were encouraging improvements in the UK and Germany. The Netherlands grew
well, but France remains a difficult market for us.
The Americas grew by 3.7%. Sales in the US were ahead by 2.4% with good
progress in hair care and deodorants, but lower sales in laundry and ice cream.
Our businesses in South America grew strongly, but Mexico was disappointing.
Asia Africa continues to be a major driver of Unilever's growth across both
foods and home and personal care with sales up 7.7% in the year. Almost all
countries contributed, with very strong performances from China, India and
Indonesia.
Savings programmes delivered slightly ahead of plan, but significantly higher
costs held back profitability. Commodity costs rose more sharply than expected
and were up by over EUR600 million in the year. Productivity savings and a return
to positive pricing ensured gross margins were maintained at last year's levels,
although this was below our expectations.
Overhead costs were broadly in line with our plans for the year. The move to a
single operating company in each market, under the 'One Unilever' programme, is
bringing simpler, lower-cost, structures. However, savings from the programme
in the year were offset by cost inflation, especially in Asia Africa and planned
investments in infrastructure. Substantial further savings opportunities have
been identified and as we go forward we expect to see overheads fall as a
percentage of turnover.
Investment in advertising and promotions was increased by nearly EUR300 million,
mainly in advertising, and was carefully focused behind our priorities for
growth.
There were significant one-time gains reflecting changes in pension plans and
healthcare plans in the fourth quarter. These were offset by additional
restructuring, largely in order to move quickly to eliminate overheads in Europe
following the frozen foods disposal.
The sale of European frozen foods businesses was completed in the quarter with a
net profit of EUR1.2 billion.
2. FINANCIAL COMMENTARY
2.1 Turnover
Turnover increased by 3.2% in the year. This included 3.8% of underlying sales
growth and 0.3% from favourable currency movements, with disposals accounting
for the difference.
In the fourth quarter, turnover was lower by 0.3%. Underlying sales grew by
3.4%, while currency effects, particularly the weakening of the US dollar,
reduced turnover by 3.0%, again with disposals accounting for the difference.
2.2 Operating profit
Full Year
Operating profit increased by 7% in the year.
The operating margin for the year was 13.6%, up by 0.4 percentage points on
2005. This was after charging restructuring, disposals and impairment costs
equivalent to 1.3 percentage points of sales (compared with 1.5 percentage
points last year). It also included EUR266 million of one-off gains from changes
to US healthcare and UK pensions plans in the fourth quarter, equivalent to 0.7
percentage points of sales. Before these items, and the profit on the US office
sale in the second quarter of 2005, the operating margin would have been 0.3
percentage points lower than last year.
Gross margins have been held steady through the year, with supply chain savings
programmes, pricing action and a positive mix fully offsetting around EUR600
million of higher input costs.
Investment in advertising and promotions increased by nearly EUR300 million, from
12.8% to 13.1% of sales.
Fourth Quarter
Operating profit increased by 5% in the fourth quarter.
The operating margin was 10.9%, with a high charge for restructuring, disposals
and impairments, equivalent to 4.4 percent of sales, offset by the gains on
healthcare and pension plans equivalent to 2.7 percent of sales. Before these
items the operating margin would have been 0.1 percentage point higher than last
year.
Advertising and promotion was 0.5 percentage points lower in the fourth quarter
than last year, reflecting the planned different phasing this year. Market
research and development costs were again high in the fourth quarter, in support
of another strong innovation programme for 2007.
2.3 Finance costs and tax
Costs of financing net borrowings were 17% lower for the year than in 2005,
benefiting from a lower overall level of net debt.
Pensions financing, which was a net expense of EUR53 million in 2005, showed a net
income of EUR41 million in 2006, reflecting an improved asset base.
As already announced, in the third quarter we took a provision of EUR300 million
relating to preference shares, and this is included in financing costs.
The tax rate for the year was 24%, compared with 26% last year, and including
the benefits of a better country mix. The fourth quarter rate was unusually low
at 14% and included a substantial benefit from higher tax deductibility on the
provision taken in the third quarter in relation to preference shares. We
expect a rate of around 24% again in 2007 and are lowering our longer term
guidance from around 28% to around 26%.
2.4 Joint Ventures and Associates
Share of net profit from joint ventures was ahead of last year due to continued
growth in the partnerships between Lipton and Pepsi for ready-to-drink tea.
Share of net profit from associates included a profit from a placement of equity
by one of our venture capital fund investments in the fourth quarter.
2.5 Net profit and Earnings per share
For the full year, net profit from continuing operations grew by 10% and EPS on
the same basis was up by 11%.
In the fourth quarter, net profit and EPS from continuing operations increased
by 30% and 31% respectively helped by the low tax rate in the quarter.
Net profit including discontinued operations increased by 26% in the year, with
a net profit of EUR1 170 million on the sale of frozen foods businesses in the
fourth quarter. EPS on this basis increased by 27% for the year.
2.6 Dividends and share buy-backs
The 2006 interim dividend was paid on 4 December 2006 at EUR0.23 per share for NV
and 15.62p for PLC. In addition a one-off dividend of EUR750 million was paid at
the same time. The Boards will recommend to the Annual General Meetings final
dividends of EUR0.47 per ordinary share of Unilever N.V. and 32.04p per ordinary
share of Unilever PLC. This will bring the total regular dividend, excluding
the additional one-off payment, to EUR0.70 per share for NV and 47.66p for PLC, an
increase of 6% in each case.
We are planning to buy back EUR1.5 billion of shares in 2007.
2.7 Cash flow
Cash from operating activities was EUR0.3 billion lower than in 2005 due to
significantly higher contributions to pension schemes. There was a further
improvement in the level of working capital, with a reduction of EUR0.1 billion,
in addition to a EUR0.2 billion reduction last year.
Income tax paid was substantially lower through a combination of tax relief on
the higher pension contributions, structural improvements in the tax rate and
timing differences. As a result, net cash flow from operating activities was
EUR0.2 billion higher than last year.
Net capital expenditure was EUR0.1 billion higher than a year ago as investment
was stepped up behind growth priorities.
Ungeared Free Cash Flow increased by EUR0.2 billion to EUR4.2 billion.
Net debt reduced from EUR10.5 billion at the start of the year, to EUR7.5 billion at
the end of the year. This was driven by the combination of cash generated by
the business, proceeds of disposals (particularly of frozen foods businesses in
the fourth quarter), and the effect of the weaker US dollar.
2.8 Return on Invested Capital
Return on invested capital increased from 12.5% in 2005 to 14.6% in 2006. Both
years included significant profits on disposals of discontinued operations.
Excluding these, the return on invested capital increased from 11.3% to 11.5%.
2.9 Balance sheet
The two most significant changes to the shape of the balance sheet are the
reduction in net funding deficit on pensions and post retirement healthcare
schemes, and the reduction in net debt.
Improvements in asset yields and increased contributions have caused pension
assets for funded schemes in surplus to rise by EUR0.7 billion. Net pensions and
post retirement liabilities have declined by EUR1.8 billion mainly due to the
combination of increases in discount rates and changes to scheme benefits,
offset by higher life expectancies. There have been consequent movements in
deferred tax balances.
Cash generated by the business and from the sale of the frozen foods business
has funded an additional one-off dividend of EUR0.75 billion in December and a
reduction in net borrowings.
For most other items, changes in translation rates had a greater impact than
underlying movements. Most notably, goodwill and intangible assets were reduced
by EUR0.8 billion largely due to exchange rates.
2.10 Pensions and healthcare plans
The overall funding shortfall before tax has significantly reduced from EUR5.6
billion at the end of 2005 to EUR3.1 billion at the end of 2006. Within this,
there is now an aggregate surplus of EUR0.3 billion on our funded plans,
reflecting a combination of strong equity returns, increased contributions and
higher real interest rates, partly offset by increased life expectancy
assumptions. The value of our unfunded obligations has reduced from
EUR4.2 billion to EUR3.4 billion due to the rise in interest rates, favourable
exchange rate movements and changes to various retiree medical benefits.
We made a number of changes in 2006. In particular, in the US retiree
healthcare plan we introduced an annual cap on the benefits which each
participant can claim. In the UK we updated assumptions on pension commutations
and now reduce some deferred pensions if they are taken early, to align with
market practice.
3. OPERATIONAL REVIEW
3.1 Full Year Performance - Europe
Fourth Quarter 2006
2006 2005 % %
change Underlying
sales growth
3 615 3 618 (0.1) 0.1 Turnover (EUR million)
5.3 4.4 Operating Margin (%)
Includes:
(7.3) (3.7) - RDIs*
3.3 - Gain on UK Pensions
* Restructuring, business disposals and impairments.
Full Year 2006
2006 2005 % %
change Underlying
sales growth
Turnover (EUR million) 15 000 14 940 0.4 1.0
Operating Margin (%) 12.7 13.8
Includes:
- RDIs* (2.2) (0.9)
- Gain on UK Pensions 0.8
* Restructuring, business disposals and impairments.
Growth
Much work has been done to make our business in Europe more competitive. There
has been a single-minded drive to improve the value we offer to consumers and
stronger innovation, more targeted at the core of our portfolio. At the same
time, the implementation of 'One Unilever', the building of capabilities and
changes in leadership are resulting in better execution.
These changes, together with improved consumer demand, returned the region to
modest growth. Underlying sales grew by 1% in the year, entirely from volume,
and by 0.1% in the fourth quarter, against a relatively strong comparator.
Market shares were broadly stable, with gains in ice cream, soups, deodorants
and body-care but losses in laundry, hair care and tea.
The UK, our largest European business, returned to growth in the year, with good
results across most foods and personal care categories. Laundry sales declined
but there were promising signs of progress in recent market shares with Persil
regaining its position as the country's leading laundry brand.
The Netherlands had a strong year as it benefited from going to market as a
single company being a pioneer of the 'One Unilever' programme. Highlights were
rapid growth for Lipton, Dove, Rexona and Axe. France remained a difficult
market for us and sales were lower in spreads, laundry and hair care. New
management is in place and there was an improvement in the second half year.
Sales in Germany held up better in 2006, and there was good growth in personal
care, but some turnover in Lipton ice tea was lost following changes in rules
for bottle returns.
Central and Eastern Europe continued to do well, driven by double-digit growth
in Russia.
Innovation
Our 2006 innovation programme in foods has seen our brands embrace Vitality
across all categories, with new products designed to deliver the health benefits
that our consumers are seeking. Rama/BlueBand Idea!, a spread with added
nutrients that are beneficial to children's mental development, was launched in
nine countries. The AdeS brand of healthy soya-based drinks has been brought
from Latin America to the UK as AdeZ. A range of Knorr bouillon cubes with
selected natural ingredients and a better, richer taste has been rolled out
across the region and Vie 'one shot' fruit and vegetable drinks are now
available in ten countries. Meanwhile, the global 'Choices' programme is being
rolled out. The front-of-pack logo helps people identify products which meet
international benchmarks for trans fat, saturated fat, salt and sugar content.
Product launches in home and personal care with clear functional or emotional
benefits are being rolled out rapidly across the region. A range of new Dove
launches in several categories in 2006 included 'Summer Glow', a light
moisturising body lotion with a unique combination of special Dove moisturisers
and a hint of self tan. In household care, Domestos 5X with C-TAC kills germs
on first contact and continues to do so even after flushes, while the power of
Cif has been applied to a series of power sprays.
Profitability
The operating margin, at 12.7%, was 1.1 percentage point lower than a year ago,
with higher net costs for restructuring, disposals and impairments, and a
one-time gain of EUR120 million in the fourth quarter of 2006 from changes to the
UK pensions plan. Before these items, the operating margin would have been 0.6
percentage points lower than in 2005. Margins in foods were lower than in 2005
as we absorbed significant increases in commodity costs which were only partly
compensated by savings programmes.
3.2 Full Year Performance - The Americas
Fourth Quarter 2006
2006 2005 % %
change Underlying
sales growth
3 448 3 521 (2.1) 4.3 Turnover (EUR million)
16.7 16.7 Operating Margin (%)
Includes:
(3.4) (1.6) - RDIs*
4.2 - US Healthcare gain
* Restructuring, business disposals and impairments.
Full Year 2006
2006 2005 % %
change Underlying
sales growth
Turnover (EUR million) 13 779 13 179 4.6 3.7
Operating Margin (%) 15.8 13.0
Includes:
- RDIs* (1.0) (3.4)
- US Healthcare gain 1.0
* Restructuring, business disposals and impairments.
Growth
Underlying sales growth accelerated progressively through the quarters, with
3.7% for the year, and a healthy balance of volume and price.
Overall, we have maintained share in the US in markets which are growing at
around 3%. Underlying sales growth in the US was 2.4%, additionally reflecting
trade de-stocking in personal care in the first half of the year and in ice
cream in the second half. Degree, Dove and Axe, our three main deodorants
brands, all gained share, while the launch of Sunsilk drove growth in hair care.
In laundry we initiated the move to concentrated liquids, but have lost
further share in conventional detergents.
Bertolli frozen meals and Slim Fast gained share in the US as did Lipton
ready-to-drink tea, in our joint venture with Pepsi. Our share for the year as
a whole was also up in ice cream, but sales were down. The category has been
heavily promoted in recent years but in 2006 the level of promotional intensity
reduced. As a result, the trade bought less as they used up stocks.
Brazil picked up well after a slow start with very good innovation-driven
performances in hair, deodorants and laundry, with Omo shares at their highest
level for many years. Sales in Mexico were lower for the year, affected by a
combination of a decline in the traditional retail trade and local low priced
competition. In addition there were several operational issues which have been
addressed and the business returned to growth in the fourth quarter. Elsewhere
there was good growth in Argentina, Central America and Venezuela. Taken
together, sales in Latin America were ahead by 5.8% with home and personal care
continuing to do well but more modest growth in foods in the face of tough local
competition.
Innovation
Products introduced in the year in the US included Wishbone salad 'spritzers',
with one calorie per spray, further development of the Bertolli premium frozen
meal range, and Lipton pyramid tea bags. Across the region, new Knorr soups and
bouillons cater for local flavour and tastes and the highly successful AdeS
nutritional drink has been extended with a 'light' variant, new fruit flavours
and the launch of Soymilk in Brazil and Mexico.
We have strengthened our hair portfolio in the US with the launch of Sunsilk.
This followed improvements to both the Suave and Dove hair care lines and the
sale of the Aquanet and Finesse brands. After a good response to all Small &
Mighty concentrated liquid detergents, we have applied the same technology to
fabric conditioners to create Snuggle Exhilarations, a three-times more
concentrated premium sub-range delivering superior fragrance. In Brazil, the
Omo laundry brand has been further strengthened with a new top performance
product and 'baby' and 'foam control' variants.
Profitability
The operating margin, at 15.8%, was 2.8 percentage points higher than a year
ago, with lower costs for restructuring, disposals and impairments, and a
one-time benefit in the fourth quarter of 2006 of EUR146 million from changes to
US healthcare plans. In 2005 there was a gain on the sale of an office in the
second quarter. Before these items the operating margin would have been 0.3
percentage points lower than last year. Innovation-driven mix, pricing and
productivity offset higher commodity costs. Advertising and promotions was
increased behind key launches.
3.3 Full Year Performance - Asia Africa
Fourth Quarter 2006
2006 2005 % %
change Underlying
sales growth
2 664 2 618 1.8 7.0 Turnover (EUR million)
11.1 10.2 Operating Margin (%)
Includes:
(1.6) (0.3) - RDIs*
* Restructuring, business disposals and impairments.
Full Year 2006
2006 2005 % %
change Underlying
sales growth
Turnover (EUR million) 10 863 10 282 5.7 7.7
Operating Margin (%) 12.2 12.6
Includes:
- RDIs* (0.3) -
* Restructuring, business disposals and impairments.
Growth
Markets remained buoyant in most of the key countries, though there was a
slow-down in consumer spending in Thailand during the year.
Underlying sales growth of 7.7% was broadly based and our aggregate market
shares remained stable.
India grew well across all major categories. A mix of global, regional and
local brands are driving growth, notably Wheel and Surf Excel in laundry and
Clinic in hair care. A second year of excellent growth in China stemmed from a
combination of market growth, better distribution and innovations behind global
brands such as Omo, Lux, Ponds, and the local toothpaste brand, Zhonghua.
Indonesia sustained good momentum, not only in the large home and personal care
categories, but also in foods, through strong performances in ice cream and
savoury. Thailand had a disappointing year through weak demand and intense
competition, and a major programme of activities is under way to correct this.
There was a much improved performance in Australia with share gains in a number
of categories. In Japan, the hair care market has seen another major brand
launched by competition. Against this, Lux Super Rich, the leading brand,
performed well, but Dove and mod's, our other two brands, lost share.
Savoury, ice cream, laundry and household care were the main drivers of strong
growth in Turkey, while sales in Arabia were well ahead in every category.
In South Africa, aggressive price promotions by a local competitor have reduced
our sales in laundry, but there was strong growth and share gains in foods
categories.
Innovation
Innovation is increasingly being driven globally and regionally, rather than
locally. The new Sunsilk range has been introduced in most major markets and in
laundry the 'Dirt is Good' positioning is now in place across the region.
Pond's age miracle cream, incorporating unique technology and designed
specifically for the needs of Asian skin has been launched in the Philippines,
Indonesia, Thailand and China. Meanwhile the latest global Axe/Lynx fragrance,
'Click' has been introduced in Australia and New Zealand.
As in the rest of the world, the foods innovation programme picked up the
Vitality theme. Moo, a delicious vanilla and chocolate ice cream, with its high
calcium content and fun packaging and shape, is both a wholesome and appealing
option for kids. Healthy green tea innovations are being rolled out
extensively, while in South Africa, Rama magarine now communicates the healthy
oils in the product. At the same time, addressing the needs of lower income
consumers, low-unit priced Knorr bouillon cubes, already successful in Latin
America, were introduced to the region.
Profitability
The operating margin at 12.2% was 0.4 percentage points lower than a year ago.
Before the impact of restructuring, disposals and impairments, the operating
margin would have been in line with last year. The benefits to margin of strong
volume growth and savings programmes were fully offset by higher commodity costs
and other cost inflation which could not be fully recovered in pricing.
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 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.
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