Regional performance: Europe

• Print page
• Email a link
• Download page

Growth

The region sustained its improving trend in 2007 with underlying sales growth of 2.8% for the year. The improvement was driven by relentless focus on better in-market execution, rejuvenation of the quality and value of our core products, and an introduction of new innovations. Consumer demand in our categories was steady throughout the year.

Overall we saw improving trends almost everywhere. Russia was the outstanding performer, but all major countries grew in the year, including the UK, Germany, Italy and the Netherlands. In France sales were slightly up in a challenging market.

Profitability

The operating margin, at 11.0% for the year, reflects a higher net charge for restructuring, disposals and one-off items compared with 2006. Before these items, the operating margin showed an underlying improvement of 0.9 percentage points, driven by lower overheads as a result of the One Unilever programme and reduced advertising and promotions costs.

Accelerating change

We made substantial progress with portfolio development and restructuring.

At the start of 2008 we completed the expansion of the successful international partnership for Lipton ready-to-drink tea with PepsiCo to include all countries in Europe. We also completed the sale of Boursin, and announced the acquisition of the leading Russian ice cream company Inmarko.

We formed four new multi-country organisations and announced the streamlining or closure of ten factories. The roll-out of a single SAP system across the region continues with two-thirds of turnover in the region now on stream and full implementation expected to be largely completed by the end of 2008.

Innovation

We continued to target innovations mainly at Vitality opportunities. In ice cream, we introduced Frusì frozen yoghurt with wholegrain cereals and real fruit pieces and low calorie Solero smoothies. Lipton Linea slimming teas were launched in France, Switzerland and Portugal. Growth in Hellmann’s was boosted by new extra light mayonnaise with citrus fibre technology.

The new Dove pro·age range of products is building well in Europe as well as elsewhere, and Dove Summer Glow self-tanning and body lotions are now available in most countries. Clear anti-dandruff shampoo was launched in Russia, with good consumer response. Small & Mighty concentrated liquid laundry detergents were launched in seven European countries.

Highlights - Europe

at current rates of exchange

€ million	2007	2006	Change
Turnover	15 205	15 000	1.4%
Operating profit	1 678	1 903	(11.9)%
Operating margin	11.0%	12.7%
£ million	2007	2006	Change
Turnover	10 373	10 227	1.4%
Operating profit	1 145	1 298	(11.8)%
$ million	2007	2006	Change
Turnover	20 740	18 810	10.3%
Operating profit	2 289	2 387	(4.1)%

at constant 2006 rates of exchange

	Change
Turnover	1.3%
Underlying sales	2.8%
Operating profit	(11.7)%