Annual Report 1999 on Form 20-F for Unilever NV
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Unilever N.V. 1999 Annual Report on Form 20-F Reverse for Unilever PLC Report Meeting everyday needs of people everywhere U A truly multi-local multinational Unilever is dedicated to meeting the everyday needs of people everywhere. Around the world our Foods and Home & Personal Care brands are chosen by many millions of individual consumers each day. Earning their trust, anticipating their aspirations and meeting their daily needs are the tasks of our local companies. They bring to the service of their consumers the best in brands and both our international and local expertise. Unilever’s Corporate Purpose Our purpose in Unilever is to meet the everyday needs of people everywhere – to anticipate the aspirations of our consumers and customers and to respond creatively and competitively with branded products and services which raise the quality of life. Our deep roots in local cultures and markets around the world are our unparalleled inheritance and the foundation for our future growth. We will bring our wealth of knowledge and international expertise to the service of local consumers – a truly multi-local multinational. Our long-term success requires a total commitment to exceptional standards of performance and productivity, to working together effectively and to a willingness to embrace new ideas and learn continuously. We believe that to succeed requires the highest standards of corporate behaviour towards our employees, consumers and the societies and world in which we live. This is Unilever’s road to sustainable, profitable growth for our business and long-term value creation for our shareholders and employees. 1 Unilever Annual Report on Form 20-F 1999 Contents Cross reference to Form 20-F 2 Financial Statements Shareholder Information Report of the Directors Statement of directors’ responsibilities 60 Control of Unilever 118-121 Financial highlights 3 Report of independent auditors 61 Analysis of shareholding 122 Chairmen’s statement 4-5 Accounting information Information about exchange controls Selected financial data 6-10 and policies 62-65 affecting security holders 122 Consolidated profit and loss account About Unilever 11-12 Nature of the trading market 123 and Statement of total recognised Taxation for US residents 124-125 Performance review 13 gains and losses 66 1999/98 14-25 Dividends 126 Consolidated balance sheet 67 1998/97 26-34 Signature 126 Consolidated cash flow statement 68 Financial review 35-38 Financial calendar and addresses 127 Notes to the consolidated accounts 69-104 Operating review 39-42 Publications 128 Schedules – Unilever Group 105 Corporate governance 43-48 Web site 128 Key divergence statements from Remuneration report 49-59 United States GAAP 106 Differences from United States GAAP 107 Principal group companies and fixed investments 108-110 Company accounts 111-117 Unilever N.V. (NV) is a public limited company registered in The brand names shown in italics in this Form 20-F are the Netherlands which has listings of shares or certificates trade marks owned by or licensed to companies within (depositary receipts) of NV on the stock exchanges in the Unilever Group. Amsterdam, London and New York and in Belgium, In addition, there is the Unilever Annual Report & France, Germany, Luxembourg and Switzerland. Accounts for the year ended 31 December 1999, which Unilever PLC (PLC) is a public limited company registered is produced as two separate documents – the Unilever in England which has shares listed on the London Stock Annual Review 1999 and the Unilever Annual Accounts Exchange and, as American Depositary Receipts, on 1999. These documents comply with the Netherlands and the New York Stock Exchange. the United Kingdom regulations. Both documents are made available to all shareholders but, unless they have The two parent companies, NV and PLC, operate as nearly elected to receive the full Annual Report & Accounts, only as is practicable as a single entity, together referred to as the Annual Review document is mailed to them. the Group or the Unilever Group. NV and PLC and their group companies constitute a single group under There are three versions of both these documents: Netherlands and United Kingdom legislation for the – figures expressed in guilders, in Dutch; purposes of presenting consolidated accounts. – figures expressed in pounds sterling, in English; Accordingly, the accounts of the Unilever Group are – figures expressed in guilders, in English. presented by both NV and PLC as their respective The effect of exchange rate fluctuations over time may consolidated accounts. result in the trends shown in the guilder accounts differing This report is the Unilever Annual Report on Form 20-F significantly from those shown in the sterling accounts. to the Securities and Exchange Commission in the United States of America for the year ended 31 December 1999. There are two versions, expressed in guilders for NV and pounds sterling for PLC. 2 Unilever Annual Report on Form 20-F 1999 Cross reference to Form 20-F Item page 1 Description of the business Selected financial data 9-10 About Unilever 11-12 Recent acquisitions and disposals 15 Operating review 39-42 2 Description of property 42 3 Legal proceedings 42 4 Control of Unilever 118-121 5 Nature of trading market 123 6 Exchange controls and other limitations affecting security holdings 122 7 Taxation 124-125 8 Selected financial data Selected financial data 6-8 Dividends 126 9 Management’s discussion and analysis of financial condition and results of operations Performance review 13-34 Financial review 35-38 9a Quantitative and qualitative disclosures about market risk Managing market risks 37-38 10 Directors and other officers of Registrant Corporate governance 43-48 11 Compensation of directors and officers Remuneration report 49-54 12 Options to purchase securities from Registrant or subsidiaries Remuneration report – Share options 54-59 13 Interest of management in certain transactions n/a 14 Description of securities to be registered n/a 15 Defaults upon senior securities n/a 16 Changes in securities and changes in security for registered securities n/a 17 Financial statements n/a 18 Financial statements Report of independent auditors 61 Accounting information and policies 62-65 Consolidated profit and loss account 66 Statement of total recognised gains and losses 66 Consolidated balance sheet 67 Consolidated cash flow statement 68 Notes to the consolidated accounts 69-104 Schedules – Unilever Group 105 Key divergence statements from United States GAAP 106 Differences from United States GAAP 107 Principal group companies and fixed investments 108-110 Cautionary Statement The Annual Report includes forward-looking statements within the meaning of section 27A of the US Securities Act of 1933, as amended, and section 21E of the US Securities and Exchange Act of 1934, as amended. We believe that the expectations reflected in these statements are reasonable. However, no assurance can be given that such expectations will prove to have been correct. Accordingly, results could differ materially from those set out in the forward-looking statements as a result of, among other factors, price fluctuations; currency fluctuations; loss of market; environmental risks; physical risks; and legislative, fiscal and regulatory developments. Financial highlights • Excellent personal care results • Food profits* rise on slightly lower volumes • Home care volumes up but market investment reduces profit • Strong progress in Asia and Pacific as regional economies recover • Home & Personal Care profits* up in North America – Foods results lower • Good performance in Western Europe and Africa and Middle East *before exceptional items Chairmen’s Statement – 1999 and the path to growth sales, continue to grow faster than the business as a Operating margins before exceptional whole. In 1999 they grew 3%, whereas turnover in other items rise to 11% categories fell by 2%, largely due to disposals. We remain committed to improving the performance of these other Excellent progress in personal care businesses or exiting those that are not able to deliver sustained value. Focus on 400 leading brands to accelerate top line growth Our personal care businesses had another outstanding year. Turnover and profits grew strongly in all categories and regions with total sales up 7% and profits increasing We have made good progress pursuing our strategy by 24%. Home care and professional cleaning also of category focus and margin improvement against a showed good sales growth but profits declined by 4% as challenging economic and competitive background. higher expenditure to protect our strong market position Our Home & Personal Care categories all grew strongly and in Latin America offset increases in profits in Western we saw further improved margins in Foods. We are pleased Europe and Asia and Pacific. with the developments in Western Europe and the recovery Foods profitability improved but overall foods sales in South East Asia. Marketing investments in Latin America declined partly due to disposals. Beverages profits were reduced profits. up, led by double digit volume growth in the ready-to- Margins before exceptional items further increased by drink sector. Oil and dairy based foods showed a good half a percentage point to over 11%, a record. increase in profits but markets in Europe and North America continue to contract. Ice cream sales increased The fourth quarter saw the business achieve the highest but profits overall were slightly below 1998. level of underlying growth for two years. This included good performances from businesses which are already Regions advanced in implementing our strategy of focusing on The global reach of the Company was again an important fewer brands. This is early evidence the strategy is working. factor. We were able to benefit from the good economic However, sales growth of 2% at constant exchange rates conditions in western markets. Sales and profits rose and underlying volume growth of 1% strongly in Asia and Pacific region as economies recovered for the full year were disappointing. from the crisis in late 1997 and 1998.