聯合利華 (UL) 2003 Q3 法說會逐字稿

Ladies and gentlemen, please stand by. Your Unilever conference call will begin shortly. Once again, the Unilever conference call will begin shortly. Thank you.

Welcome to Unilever's 2003 Third Quarter Results conference call. This conference will begin with a presentation by Mr. Howard Green, Senior Vice-President Investor Relations, followed by a question and answer session. At any time during the presentation, you may indicate your desire to ask a question by pressing 1 on your telephone touch pads. Should you wish to cancel your question, simply press 2. This conference is being recorded, and will be available for a period of two weeks. Details of the replay numbers and access codes can be found on Unilever's website. An audio web cast of the tele-conference will also be available on Unilever's website, www.unilever.com. We will now hand you over to Mr. Green.

Ladies and gentlemen, good morning, and welcome to this presentation of Unilever's Third Quarter results. A transcript, which contains the usual formal disclosures to forward-looking statements within the meaning of relevant US legislation can be accessed via our website at www.unilever.com and this presentation and discussions are conducted subject to that disclaimer. I will not read out the disclaimer, but propose that we take it as read into the record for the purpose of this presentation and conference call. Can I remind you that unless otherwise stated, the financial numbers used in this presentation are in Euros at constant rates of exchange, that is, average 2002 rates.

On Chart 1, you will see the quarter's key features. Leading brands have grown by 3.2% in the quarter, with some 1.9% percentage points from underlying volume growth. HPC leading brands grew by 5.1% with some 4.8% percentage points from underlying volume growth, whilst Foods leading brands grew by 1.8%, with a decline of some 40 basis points in underlying volume.

Leading brands are now 92% of the total business. We have seen a continued improvement in operating margins, driven by our procurement and restructuring program and through improved mix. Operating margin before exceptional items and goodwill amortization at 17% is 100 basis points ahead of last year.

Pre-cash flow, which is in current money and excludes disposal proceeds, is running at €4.3b for the last twelve months.

Net borrowing costs have reduced by €58m or by 20%, and reflect the benefits of cash flow from operating activities and the sale of businesses, and includes a gain of €23m on the sale of a fixed rate investment. Year to date interest on net borrowing costs are in line with our operating count for the year, with a lower charge in this quarter offsetting higher than expected costs from the second quarter which included the effect of a strengthening [indiscernible] on US denominated deposits in Brazil.

Reported interest charge includes €46m relating to the net FRS17 cost of financing pensions.

Net debt at closing rates is €14.4b. Our financial strategy is based on achieving two key metrics: firstly, a pre-exceptional EBITDA interest cover of greater than 8, and secondly, funds from operations to lease-adjusted net debt of greater than 40%. We are making good progress on each, with interest cover of 9.5 for the year to date; whilst funds from operations to lease-adjusted net debt is 32% also for the year to date.

EPS BEIA is ahead by 12.8% in the quarter, and by 7.1% in the year to date. Exceptional items in operating profit were a charge of €80m, and include €100m of restructuring investment costs, and €20m of net profits from disposals. EPS grows by 17% in the quarter, and by 16% for the first nine months of the year, reflecting lower after-tax exceptional items, particularly lower structuring costs as we move into the latter part of the Path to Growth program.

At current exchange rates, EPS BEIA has risen in the quarter by 6% in Euros, by 23% in US dollars, and by 17% in Pounds Sterling. For the year to date, there is a decline of 2% in Euros, an increase of 18% in US dollars, and of 8% in Pounds Sterling.

Let me now turn to Chart 2 where I've showed the build-up of our sales growth for the quarter.

Underlying sales grew by 2.3% with 1.3 percentage points coming from price. The difference between this growth rate and that for the leading brands derives from our strategy of managing the tail for value. This has two aspects to it: firstly, extracting value via harvest strategy, and in the quarter we saw an underlying sales decline of 7.3% which has impacted underlying sales growth by some 60 basis points, and secondly, realizing value through the sale of businesses. In this quarter, the effect is to reduce turnover by the equivalent of 270 basis points, or just over €300m. Acquisitions add some 40 basis points.

Altogether, this gives total sales in the quarter of €12.3b flat against last year.

At the half-year, a limited number of factors were highlighted as having impacted growth. Chart 3 shows the progress with each of them. Firstly, there's been no further sharp retailing de-stocking in Home and Personal Care in the US. Secondly, Food Solutions is showing a continuation of the pick-up in sales growth momentum seen progressively through the second quarter, and progress is broad-based. Thirdly, there has been continued weakness in the performance of Prestige Fragrances and whilst there has been some improvement in the performance of Household Care and Frozen Foods, they both continue to trend below ambition and previous expectations. These three businesses represent approaching 10% of the leading brands, and have diluted leading brand growth in the third quarter by 90 basis points.

Finally, in Slimfast, which represents less than 2% of Unilever, whilst recent innovations have been well received and trade related issues have been resolved, the continued impact of current diet alternatives has been above expectations. In the third quarter, it declined by nearly 30% and diluted Unilever leading brand growth by 90 basis points and that of Foods by 150 basis points. We remain confident in the long-term opportunity for Slimfast, based on the size of the market, its growth rate, and by the fact that the efficacy of the Slimfast brand is based on a proven scientific approach to healthy weight management and of the strong body of professional opinion underpins the Slimfast program. Slimfast has faced these challenges before. In 18 of the last 25 years it has registered positive growth. In the remainder, it was facing challenges similar to those of today. Notwithstanding, it has shown a compound average growth rate of 14% per annum over the last 20 years.

Chart 4 contrasts the pick-up we are seeing in the majority of our business with the impact of businesses, which are not yet delivering the performance we expect of them. As the chart shows, in nearly 90% of the leading brand portfolio, growth has moved from 4.3% in the first half of the year back into the target range of 5.1% in the third quarter.

In Household Care and Frozen Foods, which are 8% of the leading brand portfolio, we have seen an improvement, albeit below ambition and expectation, with a first half decline of 1.4% moving to a growth in the third quarter of 0.6%. Whilst in Slimfast and Prestige Fragrances, which are 3% of the leading brand portfolio, we have seen a faster rate of decline, from 13.7% in the first half to 27.6% in Q3.

I will now look at the performance of our leading brands in the context of our strategy, starting with Home and Personal Care on Chart 5.

In Personal Care, which represents around 28% of leading brands, growth in the quarter was 6.9%. In the mass-market business, growth was 9.6%, as we continue to build on our strong brands with a [indiscernible] circle of growth, investment, and a superior margin structure, benefiting from Unilever Scale.

We are delivering exceptional value by focusing on consumer insights and innovation, and using our organization to roll out new ideas and concepts across the Unilever world with speed. A particular strength of our business is its position in developing in emerging markets where we generate 55% of our turnover.

The Prestige Fragrance market continues to be difficult, and we have seen an underlying sales decline in the third quarter of 25.8%. Under new management, the team is re-focusing the business to concentrate on its strength in fragrances in both Europe and North America, they are restructuring the business model to release margin to invest behind the brands, and they are reinvigorating the Innovation Program.

In Household Care, which represents close to 3% of leading brands, we are focusing on Cif and Domestos across the world, and the selected development of other brands where we have country strength or potential. In the third quarter, we have seen a small improvement in performance, as we focus on the core attributes of our brands. As a result, we have seen good growth in both Cif general-purpose cleaners, and Domestos thick bleach, which give us confidence that we have the right strategy.

In Laundry, which represents 14% of leading brands, we also see the benefits of our strategy with a further small step-up in the rate of growth. Importantly, we are maintaining the improvement in operating margins, notwithstanding our response to pricing and price related promotions to competitive markets in both Europe and North America. Operating margins are running some 300 basis points above the level in 2000, and we have made further progress in improving asset efficiency with a reduction of 700 basis points since the start of Path to Growth. Thus, overall, we see leading brand growth for Home and Personal Care at 5.1% for the quarter, and 4.9% for the year to date.

In the mass business, growth has been 6.6% in the quarter, and 5.7% for the year to date. As you can also see from the chart, Home and Personal Care has been a consistent performer over the period of Path to Growth, reflecting the benefits of their earlier experience with brand focus, the access this has given them to scale advantages in both cost and asset efficiency, and underpinned by the strength of their developing and emerging market exposure.

Let me now turn to our Foods businesses, firstly, with an overview of the third quarter, and then with a review of our strategy by category.

The impact of the exceptional summer weather in Europe has been broadly neutral for our business. Ice cream market share has been improved in a market that has grown by around 7% whilst the performance of ready-to-drink tea, which was ahead by over 40%, clearly shows that in such heat, the consumer's priority was to quench their thirst. However, at the same time, there were negative impacts on foods and beverages that are consumed hot, such as Savoury and Frozen Meals, Leaf Tea and cooking products used for baking. In these businesses, we have seen market size declines in the third quarter of between 2% and 3%, and whilst Unilever's market share positions are stable, there has been a short-term dilution to the expected rate of top-line growth.

Turning now to our categories: in Savoury and Dressings, we continued to build on the strong brands which we have acquired, in a market that has grown, on average, by 4% per annum over the last three years. Performance in the third quarter has been impacted by the market conditions in Europe, with leading brand growth of 2% in the quarter, and 2.8% year to date. However, we have continued to build capability, and the underlying performance and improving market position reflects a wide-ranging Innovation Plan.

In Knorr we have been reaching out to new consumers, occasions and channels. We have launched the brand into nine new countries this year, we have broadened the offering, for example, through the launch of salad dressings in Europe and the extension into frozen formats continues to make excellent progress. We have also been improving the reach of the brand by driving growth through affordability and availability, such as Knorr's seasoning cubes in Latin America, or liquid seasonings in Indonesia. Finally, we have been introducing higher added value products with a focus on nutrition, fresh, ethnic and high quality convenience foods such as Knorr Meal Kits, available in seven countries in Europe, Knorr Good for You soups, available in ten European countries, and Knorr Soupy Snacks, rolled out to three new countries in Asia, including India.

In dressings, our strategy focuses on innovating in the core, for example, through new packaging, formats and new flavors, and with an emphasis on variants aimed at more health-conscious consumers. In addition, we are extending the brand into new categories, such as ketchup, mustard, dipping sauces and snack sauces, and using specific geographic strength of other brands, such as Knorr and Bertolli, to extend geographic coverage.

In Food Solutions, we continue to see the strength of our business model, with a good performance in a tough market. Growth in the third quarter has been back to mid-single digit range, driven by the rollout of soup solutions across the world, a range of initiatives in Savoury and Dressings, and extending the distribution of Ben and Jerry and Slimfast in North America. Savoury and Dressings is 35% of our Foods business. Above market growth rates will be sustained by continuing to build momentum in Food Solutions, revitalizing Hellmans, continuing to develop the strength and breadth of the momentum we are building behind Knorr, and using the opportunity the acquired brands give us for accelerated growth in developing and emerging markets.

In tea-based beverages, we see the benefits both of the exceptional summer weather in Europe, and the improvements to the leaf-tea portfolio, particularly in Asia Pacific. The improved leaf-tea portfolio, the strength of our market position in ready-to-drink tea, boosted by the recently announced JV with Pepsi, and the umbrella of the Lipton Paint the World Yellow campaign will enable us to achieve a more consistent pattern of growth, including the benefits of geographic expansion.

In Spreads and Cooking Products, we have seen a pause in growth, partly through re-phasing of innovation. Previous innovations such as Pro-Activ, Crème Bonjour and [indiscernible] in Mexico continue to perform well, and new value added products have been added under the Family and Crème Bonjour brands. However, in our Family brands, for example, Rama and Blue Band, we are facing strong price competition in Europe. Our strategy, in which we have been successful, has been to preserve absolute levels of gross profit by focusing on efficiency, albeit that we have seen some underlying sales decline. We will reverse the sales decline as we bring innovation to the core brands, and as we broaden our business to deliver a range of health benefits across new categories.

In Health and Wellness, we seek good growth in a range of brands, including Ardez and Marzina, which partly offset the impact of Slimfast.

In ice cream, we have strengthened our position with an overall gain in global market share. This is based on our performance in Europe; further gains in the US, and a strong gain in Latin America led by Brazil and Mexico.

Finally, in Frozen Foods, we have seen some improvement with innovations such as steamed vegetables, new children's products under the Captain's Range, and in addition, the launch of Knorr into frozen is doing well in Spain and France, and it has now been extended to Germany. In terms of geography, Bird's Eye in the UK and Findus in Italy continue to grow; however, this was offset by poorer performances elsewhere, particularly in Germany. All this leaves Foods leading brand at 1.8%, in line with that achieved in the first half of the year. Whilst this performance is below our ambition, I think it is also important to look at it in the context of the improvement we have made to the portfolio through Path to Growth. In the three years leading up to the start of the program, underlying sales growth in Foods averaged just under 1%. Since the start of 2001, growth has averaged at around 2.5%. Within this, the leading brands have grown at an average of around 3.5%, and closer to 4% if we separate out the performance of Slimfast.

Whilst the category challenges are clear, we have the plans in place to address them.

Let me now turn to the progress we have made with operating margin, which is on Chart 7. The basis points quotes are all expressed as an effect on total Unilever operating margin, which in the quarter has moved ahead by 100 basis points. Gross margins moved ahead by 80 basis points, with the key drivers being, firstly, an improvement in mix, which contributed to 60 basis points, through portfolio change, and a larger proportion of higher margin categories. A year on year mix improvement has now been sustained around this level over the last seven quarters.

Secondly, continued benefits from our Path to Growth restructuring programs, which contributed some 30 basis points. And finally, the remaining shortfall between cost increases and price was reduced to some 10 basis points in the quarter. The major improvements are in developing and emerging markets, where the balance in the quarter is positive, as we start to see the benefits of the recovery of earlier devaluation led cost increases. At the same time, we see in a number of developed markets increased investment in trade and consumer price promotions of so-called above the line expenditure, which we deduct from sales, and therefore impact gross margin as opposed to increasing advertising promotions as some others may report.

A 10 basis points reduction in advertising and promotions needs to be seen in the context of 120 basis points increase in above the line expenditure. Associated costs at €33m are in line with last year. Overheads of 10 basis points lower than last year, with continued benefits from the Path to Growth restructuring program, partly reinvested in increased market research and product development.

For the year to date, operating margin of 15.4% is ahead by 50 basis points and reflects combined savings in gross margin and overheads of 120 basis points, partially offset by a 70 basis point increase in advertising and promotion. Above the line expenditure is ahead by around 100 basis points.

I will now review the key sales and operating margin numbers by region. These are shown on Chart 8. The regional review sections, including a fuller description of performance drivers, are included in this morning's results announcement and can be accessed via our website.

In Europe, the turnover is 2.5% lower than last year, primarily reflecting the disposal of businesses, as part of reshaping the portfolio within the Path to Growth program. Underlying sales were 110 basis points ahead of last year, with underlying volume growth ahead by 140 basis points. Pricing reflects the impact of a higher level of trade and consumer price related promotions, in Home and Personal Care as we respond to a competitive environment. Operating margin at 18.8% is 170 basis points ahead of last year, reflecting the contribution from our restructuring and savings programs, improved mix from portfolio change, and our strategy of improving profitability in homecare.

In North America, turnover was 3.7% lower than last year. Underlying sales declined by 260 basis points, including positive price of 30 basis points, with Slimfast and Prestige depressing the underlying sales growth number by 380 basis points. Operating margin of 17.5%, is 40 basis points ahead of last year, with a sharp improvement from the first half, which was impacted by trade de-stocking in Home and Personal Care, and the one-off accounting impact of Go to Market in Foods.

For Africa, Middle East and Turkey, underlying sales growth of 5.2% includes underlying volume growth of 350 basis points. The net of acquisitions and disposals have been to reduce sales growth by the equivalent of 320 basis points, to give total sales growth of 1.9%. Operating margin at 16% is 390 basis points ahead of last year, through higher gross margins as we improve production costs, and as earlier devaluation led cost increases were recovered.

In Asia Pacific, underlying sales growth was 6.8%, with underlying volume growth of 6.5%. The net of acquisitions and disposals was to reduce sales growth by the equivalent of 50 basis points, to give a reported sales increase of 6.2%. Operating margin at 13.4% was 90 basis points below the prior year, with savings programs more than offsetting the quarter by the impact of a higher level of price related promotion investment, and higher palm oil costs in India.

Finally, Latin America, where underlying sales growth was 10.5%. Pricing, at 11.4%, continues to be the main driver, as we recover devaluation led cost increases. Disposals equivalent to 240 basis points reduced reported sales growth to 7.8%. Operating margin of 15.5% is 120 basis points ahead of last year, with a strong improvement in gross margin. We are making good progress with both savings programs and the recovery of devaluation led cost increases and we are benefiting from improved mix as we exit non-leading brands in Foods and benefit from the rapid growth in Personal Care. It is perhaps worth noting that in developing and emerging markets as a whole, we continue to see good progress with underlying sales growth in the leading brands of nearly 9%, in line with the historical performance and with more than half of the growth coming from underlying volume as markets show signs of recovery.

That completes my review of the regions. Before we move to q and a, let me summarize performance, looking at its implications for both leading brands and EPS BEIA growth in 2003.

Firstly, leading brand growth as set out on Chart 9. After leading brand growth of 5.3% and 5.4% in 2001 and 2002, growth in 2003 has been impacted by three main factors. Firstly, one-off effects such as sharp de-stocking in HPC North America or weak out-of-home channels, which were evidenced in the first half of the year. Secondly, businesses that are not meeting their performance objective in the shape of Prestige Fragrances, Household Care and Frozen Foods, and thirdly, the performance of Slimfast. In combination, they are now expected to reduce leading brand growth for the year by an estimated 220 basis points, with each contributing roughly one third of the shortfall. As a result, it has been necessary to reduce the full year's outlook for leading brand growth to below 3%. However, Unilever has always adopted a robust approach to business planning which enables it to respond to challenges. At the start of the year, we showed you how we created headroom in our operating plans, to enable delivery of profit targets, and to be able to respond to what was seen as a more challenging business environment. The lower than planned top line growth has used this up. However, and as set out on Chart 10, additional headroom has been generated through the year, enabling us to re-confirm that for the full year, we continue to expect to achieve low double digit EPS growth before exceptional items and goodwill amortization. The additional headroom has been generated through higher than planned benefits from global procurement, which we communicated at the half-year, and which will contribute an additional €100m of after tax profit in the full year.

Secondly, at the start of the year, we said that we had taken a cautious view on the BEIA tax rate which we expected to be around 32%, compared with a 30% in 2002. With continued benefits in tax management flowing from the Path to Growth program each quarter, we now expect a rate for this year to again be at the bottom range of the 30% to 32% rate, given as guidance for the medium term. Each percentage point of improvement to the BEIA tax rate is equivalent to an increase in after-tax profit of around €70m. These two factors alone offset the impact of lower sales and allow continuing investment behind the leading brands. The total investment behind our brands in 2003, the aggregate of advertising and promotions, plus trade and consumer price related promotions: so-called above the line expenditure, is expected to be ahead of the previous year. The total investment has, and will continue to support key innovations and market place activities in line with the original operating plan. Of the plan's major market place initiatives in 2003, only two have been delayed, one as we await regulatory clearance, and the second as we adapted the roll-out phasing to optimize product formulations.

Both initiatives underpin the 2003 growth plans for Spread and Cooking Products. The advertising promotions spend associated with these products have been re-phased in line with the new launch plans. In addition, in those markets experiencing less buoyant consumer demand, investment is being adjusted to focus more resource on in-store consumer excitement. As a result, for Unilever in total, the advertising promotions spend rate in 2003 is expected to be similar to last year's, with increases in above the line expenditure.

It also remains consistent with the overall Path to Growth objective, to raise investment by around 200 basis points over the period of the plan. Looking at the phasing through the year, we expect that the fourth quarter advertising and promotions spend rate would be lower this year, against a relatively high rate in the prior year quarter comparator. Quarter Four is usually a relatively low quarter for advertising spend for Unilever, as media rates are significantly higher than in the rest of the year, and in the lead-up to Christmas, there is a lot of competing noise from more seasonal offerings. To illustrate this, over the four years from 1998 to 2001, Unilever's advertising and promotions spend rate in Quarter Four was on average, 100 basis points lower than for the year. By contrast, because of the back-end loading of our innovation plans in 2002, Quarter Four of 2002 had a relatively high level of upfront brand building investment. For example, in bringing Axe to North America, taking Dove into Hair in Latin America, south east Asia and central and eastern Europe, and introducing Knorr into frozen. As a result, the fourth quarter spend rate in 2002 was 300 basis points above the Q4 2001 comparator. In 2003, with a more even phasing innovation and market place activity, and with some rebalancing to above the line expenditure, fourth quarter advertising and promotion is expected to be below the Q4 2002 rate, but above that for Q4 2001.

Putting all this in the context of the EPS growth delivery for the year as a whole, I have summarized as follows: The main driver of EPS growth is operating margin, with the benefits of improved mix and saving from Path to Growth restructuring, and buying programs, partly reinvested in the increased competitiveness through additional expenditure on trade and consumer price related promotions. We are benefiting from the impact of our reduced debt level on net borrowing costs, however this is offset by the impact of increased pension costs, including the adoption of FRS17 accounting and increased stock option charges. We are also absorbing some 2% of dilution from disposals. Furthermore, and notwithstanding a more difficult business environment, I hope I have shown you how we continue to create the operational flexibility to invest in our leading brands, whilst at the same time being able to re-confirm our outlook for another year of low double digit growth and EPS BEIA as we have achieved throughout the Path to Growth program. That completes my presentation, and I'll now be happy to take your questions.

Thank you, Mr. Green. We will now pause for questions from analysts. If you have a question, please press the number 1 on your telephone. If you are listening to the conference call on a speakerphone, please use the handset while asking your question. Should you wish to cancel your question, please press 2. At any time, should you need to speak to an operator, please press 0. Our first question comes from John MacMillan of Prudential Equity Group. Please go ahead.

Oh, good morning, Howard, or good afternoon for you.

Hi, John.

I don't want to shoot the messenger, but I guess the game plan, or the goal, is still 5% to 6% leading growth, a leading brand growth in 2004. Is that correct?

I mean, there's no change to the Path to Growth Targets, John. We continue to improve the underlying growth profile of our portfolio, by exiting the tail of low growth businesses and brands, and we are addressing the under-performing businesses. I guess, and Niles certainly said this when he was through after the second quarter results that with hindsight we could have created greater space or flexibility by having a broader range to target, but the target was set in the context of our view of the world in 1999. We're following that same process with the so-called post Path to Growth strategy and the timetable for that announcement remains as we previously said, you know, the first quarter 2004. Until then, we will continue to focus on delivering the value creation embedded within Path to Growth, and do that by pulling the appropriate combination of value levers in any given situation and Path to Growth continues and remains our strategy.

Well you know a lot has changed since 99, the customers have gotten a lot tougher, and the level of competition, you know, what Kraft's doing over here and what, you know, Proctor's doing, it just seems to... you seem to have an unrealistic target that I think is working to hurt you, and I think the sooner, and this is advice, or comment, I think the sooner you revise things and set the bace, I think the better it will be for your shareholder base.

I will certainly ensure, John, that your comments are passed on to our Ex Co, I mean, I daresay you might find it strange that somebody from Ex Co's not here today, but they're actually off on a board conference with the external directors considering the new strategy and it was impossible to change agendas. I think one thing I would say is that I think that there is... Path to Growth has to be seen as a whole listed program. The inference in your comment is that somehow Path to Growth has failed. Path to Growth, at the end of the day, was an integrated program to step up our performance on all the levers of value and we have been successful. Our operating margins up 380 basis points. We've delivered on the EPS in each of the years. Capital efficiency has been improved with 900 basis points reduction in operating assets. Pre-cash flow increased to over four billion. Leading brands, 92% of the business. Leading brand growth in 2001 and 2002, 5.3% and 5.4% respectively. Yes, we've had a stumble in 2003, but we're not yet at the end of the program and I would ask people to actually judge us at the end of 2004 on all of the elements of Path to Growth. Our issue in 2003 is that we've not yet created resilience right across the portfolio to be able to head off one-off impacts as we saw in the first half of the year, when it's in combination with a significant degree of under-performance in key businesses. And resumption of higher levels of growth in leading brands will be achieved as we address those under-performing businesses, and as the first half impacts are mitigated.

Your comments about, yes, the environment is different, again, I take on board. Path to Growth was developed in the context of the world we saw in 1998 and 1999, looking forward and the articulation of a range of metrics necessary to deliver top-third TSR on a consistent basis. One of the strengths of Path to Growth has been the tremendous internal alignment we've achieved, and I don't think that's been seen before for a strategy in Unilever, and whilst I understand the comment about where the market is, as we build up to the announcement of the next phase of our strategy, we're going through the same process of analyzing and building up internal alignment, and it would be wrong to pre-judge that process or its output. In the meantime we'll continue to focus our intention on building a faster-growing business by tackling the under-performers, and building on the momentum, and we're going to do what we've always done well within Unilever, and Path to Growth is no different, and integrate a program across all the levers of value creation. We will step up growth, but it's going to be profitable growth.

Then listen, a number of companies seem to be implementing similar programs so certainly your program is being imitated, which is... The problem, Howard, is you know, and I'll end here, is that the market kind of judges you every day, every minute and every second and obviously they're roughing you up today. I think part of it is that... thanks a lot.

OK. Thanks, John.

Once again, if you would like to ask a question, please press the number 1 on your telephone. If you are listening to the conference call on a speakerphone, please use the handset while asking your question. Sir, there are no further questions at this time. We will now pass back to Howard Green.

OK. Thanks very much. We in fact had a couple of US-based analysts, including Jason Gere and Andrew Wood on the conference call this morning, and the questions they asked and the audio archive is available. I know that all of you know our telephone numbers and should you have any further questions, we would be only too happy to help you and we look forward to hearing from you. Thanks very much for your interest and good morning to you.

This conference has been recorded. Details of the replay number and access codes can be found on Unilever's website. An audio archive web cast will also be available on Unilever's website, www.unilever.com.