2004 Difficult Year for Unilever Nederland

2004 Difficult Year for Unilever Nederland

    Business Editors

    ROTTERDAM, Netherlands--(BUSINESS WIRE)--Feb. 10, 2005--The past year was not an easy one for Unilever Nederland. Under the influence of deteriorating market conditions the sales of Unilever in the Netherlands decreased last year by almost 5% to EUR 1,218 million. The operating margin also declined, but is above the target level of 16% that was set in the Path to Growth strategy. Net profit before exceptional items decreased to EUR 140 million. In 2004 Unilever remained the biggest advertiser in the Netherlands with a gross media spend of around EUR 162 million. 2004 was also a year of major changes and preparations for the future. As a result of Unilever's decision to set up one single operating company in each country, it was also decided in the Netherlands to combine the three existing operating companies. In the second quarter of 2005 these will be integrated within the new operating company Unilever Nederland B.V., which will be located in Rotterdam.
    Kees van der Waaij, chairman of Unilever Nederland Holdings B.V., was clear in his comments. "The year 2004 did not bring what we had expected of it. For the first time in many years the Dutch foods market decreased in value - as a result of the price war. This has, for instance, made it more difficult for us to organise campaigns together with retailers to underline the added value that our products have to offer. At the moment our customers are focusing almost exclusively on price. For premium brands it is more than just the price that is relevant", said Van der Waaij. "The recent developments in the Netherlands do show, however, that it was good that we initiated the Path to Growth strategy in 2000. That now enables us to concentrate our efforts on fewer brands in this tough market. We will increasingly focus on defending and expanding our market share. In that way we aim to safeguard the long-term position of our company."

    Integration of operating companies

    On 18 August 2004 Unilever in the Netherlands announced that its three existing operating companies would be amalgamated within a single new operating company. This operating company - which will be called Unilever Nederland B.V. - will be located in the building known as 'De Brug' that is currently being built at the Nassaukade in Rotterdam. This amalgamation fits in with the aim of setting up one single operating company in each country throughout the world. The operating company comprises four new business units, each of which has its own profit responsibility. The names and managing directors of these business units are

--	Unilever Nederland Foods (headed by Harry Brouwer)
--	Unilever Nederland Home and Personal Care (headed by Kees Ekelmans)
--	Unilever Nederland Ice Cream and Frozen Food (headed by Peter ter Kulve)
--	Unilever Nederland Foodsolutions (headed by Harry Stofberg)

    Day-to-day management of the new operating company will be the responsibility of Harry Brouwer. In addition to his role as Managing Director of Unilever Nederland Foods, he is also Chairman of Unilever Nederland B.V. That means that he is also responsible for all matters involving facilities, including a number of 'shared services'. In total the new organisation with the four business units consists of 750 employees.
    Since the new name of the operating company is Unilever Nederland B.V., the name of the overall holding company was changed with effect from 1 January 2005 into Unilever Nederland Holdings B.V. As its chairman, Kees van der Waaij is responsible for such areas as financial reporting, the human resources policy of Unilever in the Netherlands, corporate communication and the representation of Unilever in the Netherlands.
    Although the media spend in 2004 was lower than in the previous year, Unilever Nederland was again the biggest advertiser in the Netherlands in 2004. The gross media spend amounted to around EUR 162 million. All three of the consumer products companies had a place in the top of the rankings of individual advertisers last year. These rankings make separate mention of Unilever Bestfoods (EUR 62 million), Lever Faberge (EUR 66 million) and IgloMora Groep (EUR 32 million).

    Unilever Bestfoods Nederland

    Sales of Unilever's biggest operating company in the Netherlands, Unilever Bestfoods Nederland, decreased slightly in 2004 as a consequence of the difficult trading conditions. This also brought pressure to bear on profitability. A number of brands performed well, resulting in a growth in sales. This growth is a consequence of the focus on key products in combination with a selected number of strong innovations.
    Blue Band, for example, had a relatively good year. Innovations such as Blue Band Finesse (cream alternatives) and Blue Band Goede Start! Brood (white bread) contributed to the growth in sales. Unox, the biggest brand of Unilever Bestfoods Nederland, also profited from strong innovations such as Broodje Unox and Soep in Zak. Both of these are a very big success, which meant that Unox grew by several per cent. In addition, Conimex, Becel and Cup-a-Soup performed respectably. During the course of 2004 the decision was also announced to terminate the activities of the factory in Baarn. Closure of this sourcing unit became unavoidable following the decision to transfer a part of the production to Unilever factories in other European countries. The factory will definitively close down during 2005. The other factories of Unilever Bestfoods Nederland are located in Delft, Loosdrecht, Oss and Rotterdam.

    Lever Faberge Nederland

    The performance of Lever Faberge Nederland was mixed. On the one hand sales decreased by several per cent but, on the other, strong innovations resulted in share gains in most markets. As many as six out of the ten most successful innovations in the home and personal care market and six out of the seven biggest innovations in the personal care market were introduced by Lever Faberge Nederland. Four of these originated from Andrelon, which enjoyed a very strong year and further reinforced its number 1 market position. Successful products such as Zomerblond Shampoo and Glad & Steil Shampoo were launched under this brand name. Dove also made many headlines. Under the Dove brand a remarkable campaign was launched, in which Dove triggered a discussion about what real beauty is and who decides what is beautiful. Within home care the introduction of Glorix Geurbleek brought an increase in the value of the market for bleach products for the first time in a long while. Robijn, the biggest Dutch brand in laundry care, strengthened its market share further. Cif's launch of Cif Citroen gave a new impulse to the market for all-purpose cleaners.

    IgloMora Groep

    The IgloMora Groep had a difficult year. Here again, the focus - in the face of decreasing sales - was on stabilising the market share. In ice cream, partly as a result of the poor summer, there was a considerable decline in sales as compared to the successful previous year. However, the market share of Ola remained stable. And, although Cornetto Love Potions put in a respectable performance, this did not offset the loss of the sales of Magnum 7 Sins, which had been a great success in 2003. Within the scooping ice segment innovations such as Hertog Light and Hertog Hoogstandjes ensured that Hertog's market share remained stable in volume terms. Ben & Jerry's and Swirl's achieved an excellent result, despite the poor summer. Mora launched successful innovations such as Broodje Carrero and Broodje Kroketburger. At the end of the year it was announced that all pizza activities would be sold to Dr. Oetker with effect from 1 January 2005. 2004 was also the year in which the Iglo brand was relaunched in the Dutch market. The brand has been given a new image in which greater emphasis is placed on the freshness and naturalness of the products. The meals category again showed excellent growth. As part of the Zelfmaakgerechten (frozen mealkits) range, Tijdelijke Toppers were launched and these gave a further stimulus to sales. Stoomgroenten (Steam Fresh vegetables) also performed well.
    Broodje Carrero and Broodje Kroketburger. At the end of the year it was announced that all pizza activities would be sold to Dr. Oetker with effect from 1 January 2005. 2004 was also the year in which the Iglo brand was relaunched in the Dutch market. The brand has been given a new image in which greater emphasis is placed on the freshness and naturalness of the products. The meals category again showed excellent growth. As part of the Zelfmaakgerechten (frozen mealkits) range, Tijdelijke Toppers were launched and these gave a further stimulus to sales. Stoomgroenten (Steam Fresh vegetables) also performed well.

    UBF Foodsolutions

    UBF Foodsolutions, the Unilever group that focuses on the out-of-home market, had an excellent year, booking a growth of several per cent in a shrinking market. Profitability also improved further. Unox Soup Factory grew again by a few dozen per cent. The number of company restaurants using this system increased substantially. Broodje Unox also showed considerable growth. As Broodje Unox is now also sold in Dutch supermarkets and is being supported by advertising, there was rapid growth in consumer awareness of this roll with a Unox sausage inside it. This was reflected in higher sales in the out-of-home market. Another success was the cooperation with the KLM and Transavia airline companies for the sale of Bertolli Tramezzini sandwiches.

    Unilever Research & Development

    Unilever Research & Development in Vlaardingen invested EUR 140 million in 2004 in research into and development of new - and improvement of existing - products and processes. For the Dutch market a contribution was made to the further development of several cook-chill products such as Conimex Afhaalmenu (take-away menu), Bertolli fresh pasta and sauce, improved Bertolli Tramezzini and Becel pro--activ yoghurt and milk. In the Netherlands Robijn Color, featuring a new colour protection technology, was introduced. For the machine dishwash market the stain removal properties of Sun 3-in-1 tablets were improved and the tablets now have built-in protection against glass corrosion (the dulling of glasses). The Foods Research Centre, which comprises all scientific disciplines in the area of foods, is working on several new inventions which fit perfectly within Unilever's new Vitality mission. The emphasis here, for example, is on products that contain less salt, fewer saturated fats and less added sugar.

--30--AH/ny*

CONTACT: Unilever Press: Tim Johns, +44 20 7822 6805 Tom Gordijn, +31 10 217 4844 Trevor Gorin, +44 20 7822 6010 Richard van der Eijk, +31 10 217 4844 or Investors: John Rothenberg, +44 20 7822 6825 Philip de Klerk, +31 10 217 3859 Charles Nichols, +44 20 7822 5527

KEYWORD: NETHERLANDS INTERNATIONAL EUROPE INDUSTRY KEYWORD: CONSUMER/HOUSEHOLD FOODS/BEVERAGES RETAIL SOURCE: Unilever

Copyright Business Wire 2005