聯合利華 (UL) 2003 Q4 法說會逐字稿

Welcome to the replay of Unilever’s presentations on the review of 2003 full-year results, Path to Growth progress and delivery of value beyond 2004 for Unilever 2010.

This will be followed by a question and answer session approximately one hour after we start the conference. The question and answer session will be hosted by Mr. Niall FitzGerald Chairman and Niall FitzGerald, Chief Financial Officer.

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 archive copy of the teleconference will also be available on Unilever’s website www.unilever.com.

We will now hand you over.

Ladies and gentlemen, good morning and welcome to Unilever’s 2003 result presentation. A transcript which contains the usual formal disclaimer as 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, I am sure you’re glad to hear, but propose we take it as read into the record for the purpose of this presentation and conference call.

We will divide the presentation into two parts. Firstly operating performance in 2003 and to look at this in the broader context of the transformation of our business through the Path to Growth program and secondly to look at the evolution of our business beyond Path to Growth, including our expectations for financial performance.

I’ll start with the review of 2003 and remind you that unless otherwise stated, the financial numbers used in this part of the presentation are in euros at constant rates of exchange, that is average 2002 rates.

On chart 1 you will see the year’s key features. Leading brands are now 93% of our business. They have grown by 2.5% in the year, with some 1.1 percentage points from underlying volume growth. Home and Personal Care leading brands grew by 4.2% with some 3.2 percentage points from underlying volume growth, whilst Foods leading brands grew by 1.2% with a decline of some 70 basis points in underlying volume.

We have seen a continuing strong improvement in operating margins driven by procurement and restructuring program and through improved mix. Operating margin before exceptional items and goodwill amortization at 15.7% is 120 basis points ahead of last year, after a 20 basis point increase in advertising and promotion.

Net borrowing costs have reduced by €147m or by 13% and reflect the benefit of cash flow from operating activities and the sale of businesses as we focus the portfolio.

The net FRS17 financing cost for pensions was €187m. Net debt at closing rates is €12.6b. To remind you, our financial strategy is based on achieving two key metrics. Firstly, an EBITDA interest cover of greater than 8 and secondly funds from operations to least adjusted net debt of greater than 40%. We are making good progress on each with an interest cover of 10, whilst funds from operations to least adjusted net debt was 37% or applying new SEC regulations for calculating liquidity ratios 31%.

We have seen further benefits in tax flowing from the Path to Growth program and the beia tax rate was 29% compared with 30% in 2002. We expect to sustain the rate in the range 29% to 30% in 2004 and around 30% thereafter.

EPS beia is ahead by 11%, again delivering low double digit growth. Exceptional items in operating profit were a charge of €137m and include €507m of restructuring investment costs of €370m of net profits from disposals. EPS grows by 40% reflecting lower after tax exceptional items with higher net profits on disposals and lower restructuring costs as we move into a latter part of the Path to Growth program.

At current exchange rates, EPS beia has risen by 2% in euros, by 22% in US dollars and by 12% in pounds sterling.

Let me turn to chart 2, where I show the build-up of our sales growth for the year.

Underlying sales grew by 1.5% with volume growth flat. The difference between this growth rate and that of the leading brands comes from our strategy of managing the tail on non-leading brands for value. This has two aspects to creating value. Firstly, via a harvesting strategy, in the year we have seen an underlying sales decline of 9.1% impacting underlying sales growth by some 70 basis points.

Secondly, through the sale of businesses. In 2003 the affect has been to reduce turnover by the equivalent of 430 basis points or just over €2b. Acquisitions add some 60 basis points. Altogether this gives total sales in the year of €47.7b, some 220 basis points below last year.

We are obviously disappointed with the leading brand growth number of 2.5% in 2003 after 5.3% in 2001 and 5.4% in 2002. There are three main underlying causes for this, as set out on chart 3.

In the first half of the year we had several one-off effects, including sharp de-stocking in Home and Personal Care North America and weak Out of Home channels, which reduced growth by 60 basis points. These problems are behind us.

Secondly, the performance of Slim Fast where we were certainly slow to respond to changes in consumer habit. Total leading brand growth was reduced by 60 basis points and Foods leading brand growth by 100 basis points.

Thirdly, the performance of Prestige Fragrances. We started 2003 with a plan based on a traditional full brand approach to the market. In the first half of the year trading conditions became yet more difficult and it was clear that a different solution was required. Under new management we started to implement a restructuring plan. The consequence is a dilution to leading brand growth of 40 basis points.

Two other parts of our business, Household Care and Frozen Foods, whose growth is below our expectations, diluted leading brand growth by 30 basis points. Normally we would expect an offset to this from elsewhere within our portfolio, but we have found 2003 has been a tougher business environment than we expected.

Market growth rates at around 3% were lower than in the recent past, with the weaker economies in key markets being further impacted by weak Out of Home and Travel Retail channels, particularly in the first half of the year. Within this, we have seen aggressive price base competition in a limited number of markets, to which we have responded in order to maintain market position.

However, against this background and with the exception of Prestige Fragrances and Slim Fast, we have maintained aggregate market share. So, whilst we are disappointed with the top line, we have, at the same time, continued to invest in the long-term development of our business.

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”, which are deducted from revenue to arrive at our reported sales, has again been increased. It has supported our key innovations and market activation in line with our original operating plan, with only two planned major initiatives being re-phased and those for operational reasons.

Let me look at how this has influenced the development of our categories, starting with the performance of our Home and Personal Care leading brands on chart 4.

Our record in mass Personal Care, which represents around 27% of total leading brands speaks for itself. The leading brands grew by nearly 8%, similar to their average growth rate since the start of Path to Growth. I will deal with Prestige Fragrances in a moment.

Laundry, which represents 14% of leading brands grew at 1.8%, still below our historical growth rate. However, we have seen the benefits of our value enhancement strategy. We have further improved operating margins, which are now running nearly 400 basis points above the level in 2000, notwithstanding our response through pricing and price related promotions in competitive markets in both Europe and North America.

We have also improved our asset efficiency by some 900 basis points since the start of Path to Growth. With improving market conditions in developing and emerging markets and with 55% of our category turnover in those markets, reinforced by market leadership, we expect to see further progress in 2004.

In Household Care, which represents less than 3% of leading brands and following a couple of years of good growth, 2003 was a disappointing year, with leading brand sales decline of 1.7%. This was due to our lack of innovation behind the core of our brands as we prioritized brand extensions in 2001 and 2002.

During 2003 we have refocused all our innovation resources behind the core of the key brands, Cif and Domestos across the world and on other brands where we have leading country positions. This is starting to work. With low growth in the second half of the year at 0.3% compared to a decline of 3.6% in the first half. Whilst we still have more to do including the implementation of a strong innovation plan for 2004, we already see an improvement in the core of Cif and Domestos as 2003 innovations make progress.

Let me now turn to chart 5 to look at the development of our Foods leading brands. In Savory and Dressings, which represent 20% of leading brands, we continue to build on our strong brand portfolio. Market growth in 2003 has been a little below 3%, which compares to an average growth rate of 4% per annum over the previous four years.

However, as those of you who visited [Harlebon] will have seen, we continue to build capability and our underlying performance improving market position, reflects a wide ranging innovation plan.

In Knorr we have launched the brand into 13 new countries this year. We have broadened the footprint of the brand, for example through the launch of salad dressings in Europe and the extension into frozen formats. We have been increasing the brand’s reach by driving growth through affordability and availability, such as seasoning cubes in Latin America or liquid seasonings in Indonesia.

Finally we have been introducing higher added value products with the focus on nutrition, fresh, ethnic and high quality convenience foods such as Knorr Meal Kits, now available in 10 countries in Europe. Knorr Good for You Soups available in 8 European countries and Knorr Soupy Snacks rolled out to 3 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, with an emphasis on variants aimed at more health conscious consumers. Again we have extended the footprint of the brands into new categories, such as ketchup, mustard, dip-in sauces and snack sauces and using the 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. Our growth has accelerated through the year and in the second half has been in the mid single-digit range, driven by the roll out of Soup Solutions across the world, Dairy Cream Alternatives in Europe, of our wide range of initiatives in savory and dressings.

In tea based Beverages, which are 6% of leading brands, we see the benefits of the improvements to the leaf tea portfolio, particularly in Asia Pacific and the exceptional summer weather in Europe on Ready to Drink Tea. We expect further progress in 2004 particularly driven by the recently announced JB with Pepsi and under the umbrella of the Lipton Paint the World Yellow Campaign.

In Spreads and Cooking Products, which are 9% of leading brands we have seen a pause in growth, partly through re-phasing of innovation. Previous innovations such as Pro-Active and Basel de [indiscernible] continue to perform well and new value added products have been launched under the family in Crème Bonjour brands.

However, in our Family brands for example Rama(ph) and Blue Band, we have experienced strong price competition in parts of Europe. We have focused on preserving profitability, albeit that this has meant we have accepted some loss of sales. We plan to reverse the sales decline with more innovation to the core brands as we broaden our business to deliver a range of Heart Health and Nutritional Benefits across new and existing categories.

Our 2004 growth plans are further underpinned by the launch of Dairy Cream Alternatives, which is off to a good start and the planned launch of a Pro-Active range extensions in the early part of this year.

We have continued to make good progress with exiting low value businesses. In Ice Cream, which is 11% of leading brands, we have strengthened our position with an overall gain in market share and profitability. Performance was particularly strong in North America in spite of market weaknesses in the Out of Home channel in Latin America and Europe, which benefited from the hot summer and the strong contribution from innovations in Magnum and Carte Dor.

Finally in Frozen Foods, which are 5% of leading brands, we have continued to reshape our business around faster growing segments of the market, but to address specific geographic issues by restructuring the business model. Whilst we present Frozen as a reporting category, it is in fact a preservation methodology for delivering food at its freshest to the consumer. We increasingly want to enjoy natural food with great taste, as the technology remains relevant to our business and consumer eating trends.

Generation of economic value in recent years has been significant, driven by improvements in margin and capital efficiency and the exit from most of the low value parts of our portfolio. We are confident that we will continue to add value as we leverage scale efficiencies by optimizing our manufacturing and supplier base, fuelled by a simplified and more focused portfolio.

Our brands are strong, distinctively positioned and coherent across countries. What we now have to achieve through brand focus and innovation is a more consistent pattern of growth with a more rapid transfer of successful concepts across geographies in order to further leverage the +30% return on capital employed that we achieve in this part of our business.

Our plans going forward include moving Knorr further into frozen meals and to re-energize our master brands through innovation in the areas of kid’s nutrition, convenience meals, and concepts based on fresh and natural ingredients, such as the recently launched range of steamed vegetables.

That completes my category review. However, it is obvious from these last two charts that the performance of Slim Fast and Prestige Fragrances had a significant impact on our leading brand growth in 2003. What are we going to do about them? Let us first look at Prestige Fragrances on chart 6.

The Prestige Fragrance market has been difficult for a couple of years for well known reasons. In 2003 we saw a further deterioration early in the year and decided that in these circumstances and with what we see as longer term changes to market dynamics that we needed to refocus and restructure the business. This has four aspects to it.

Firstly a refocusing of the portfolio onto those brands where we have strong market presence and through which we can bring sustained innovation to the market.

Secondly, the refocusing of innovation to make us less dependent upon the traditional annual big hit initiative.

Thirdly, a refocusing of the way we go to market, to concentrate on the most profitable channels.

Lastly, by taking costs out of our supply chain and overhead structures to release funds for investment behind the key brands and to improve operating returns. All of this being executed by a new leadership team.

As we have restructured we have seen a sales decline of 18%, but expect to see the benefits of our actions in the second half of 2004.

I can report that as we were restructuring we continued to emphasize value creation. In 2003 Prestige has generated strong free cash flow and over the last five years it had generated free cash flow of €0.4b. We will continue to ensure that we execute the appropriate strategy to maximize long-term value.

Let me now turn to Slim Fast on chart 7. Over the course of 2003 we have said much about the performance of Slim Fast, but here let me focus on what we’re doing about it as this continues to represent an attractive and growing market, which is fully on trend with the consumer.

Our first priority was to ensure that our new initiatives were true to the roots of Slim Fast, whose credentials are based on balanced nutrition and calorie control underpinned by clinical studies and the support of a wide range of medical experts. In deed in addition to the wide range of supporting clinical studies there have been over 20 peer review publications indicating the value of Slim Fast in the science of nutrition and weight management since 1996, our medical credentials, and an important differentiator as we move forward.

Consumers confirm that they like and trusted the brand but that the range had become too narrow. The consumer wanted an effective weight management regime, but also wanted more variety and more food enjoyment.

So we started on the relaunch of the brand with a range of new products, new advertising and a relaunch of the Slim Fast website. We have also strengthened our trade relationships to get excitement in store and we have strengthened management and fully integrated Slim Fast into local operating units.

During 2004 we expect a progressive return to modest growth as we rebuild consumer loyalty in a market that is expected to continue to grow in the high single digits. Further growth momentum is expected in the second half of the year, as we restart our geographic expansion program based on the relaunch range.

Let me now turn to chart 8 and look at the progress we have been making with operating margin.

The basis points quoted are all expressed as an effect on total Unilever operating margin. This has been another year of strong high quality margin improvement with the gain of 120 basis points, to 15.7%. Gross margins moved ahead by 70 basis points with the key drivers being firstly, an improvement in mix, which contributed 70 basis points, through portfolio change and a larger proportion of higher margin categories.

Secondly, continued benefits from our Path to Growth restructuring programs, which contributed some 40 basis points.

Finally, cost increases exceeded pricing by 40 basis points. This includes the impact in price of an extra 100 basis points of investment in trade and consumer value activities, which is largely investment in our brands. There was a strong improvement in the balance of cost and price in the second half of the year, through a higher level of savings from our ongoing procurement program as we benefited from earlier pricing actions to recover cost increases in some developing and emerging markets which had suffered devaluations.

Advertising and promotions increased by 20 basis points. This was marginally lower than the 40 basis points increase we had indicated at the start of the year as some funds were redirected to the increased level of trade and consumer activities within pricing and from the delay in two planned launches in the Spreads categories, which are now proceeding.

Overheads are 70 basis points lower, including 10 basis points from lower associated costs, with continued benefits from the Path to Growth restructuring program, partly reinvested in the increased market research and product developments.

The regional review sections including a fuller description of performance drivers are included in this morning’s results announcement and can also be accessed via our website.

Before we move to looking at 2003 in the context of Path to Growth, let me first briefly review the specific key indicators for Q4 set out on chart 9.

Leading brands grew by 0.7% reflecting the very strong Q4 in 2002 when a heavy innovation program had driven growth of 8.5%. Underlying sales declined by 0.5% with a faster rate of tail attrition particularly through the progressive exit from fertilizers in India.

Operating margins moved ahead by 350 basis points with 190 basis points from gains in gross margin and overheads including 30 basis points from lower associated costs.

Advertising and promotions were 160 basis points lower than the particularly high level in Q4 2002, but 140 basis points higher than in Q4 2001.

Earnings per share beia grew by 23%, mainly reflecting the strong operating margin expansion, partly offset by a higher tax charge in the quarter.

So, in concluding this section, what can we say about 2003? I summarize on chart 10.

It has been a tough year both in terms of the trading environment in some of our key markets and because of the specific portfolio challenges we’re dealing with. We have responded flexibly based on the specific needs of individual markets. We have tackled the causes of weakness in Slim Fast performance and are moving to a smaller, more focused and more agile business model for Prestige Fragrances. We have refocused Household Care and Frozen Foods towards growth.

We expect all four businesses to show progress in 2004 and there will be no panic action at a cost to shareholders simply to make the numbers look better.

During 2003 we have also continued to demonstrate the natural resilience of our business. We have increased investment behind our brands, we have continued to support all our key innovations and market place activities to build long-term brand and business health. We have generated more savings in procurement, restructuring and tax in order to offset the loss of profit contribution from lower sales. As a result we have delivered our original outlook for low double digit growth in EPS beia, which has been achieved after absorbing short-term dilution of 2 percentage points through the disposal of tail businesses and the equivalent of a further 6 percentage points of dilution from the impact of increased pension costs and increased share option charges.

Executing Path to Growth has made us a simpler, more resilient, responsive and profitable business. So let me now hand you over to Niall who will look at our overall performance in the context of our strategy.

Thank you Howard. You’re allowed one deep intake of breath and then we’re off again.

Before reviewing the Path to Growth let me first step through the context. As you can see on chart 11 Unilever has consistently delivered long-term value ahead of all market averages. Of course there have been fluctuations and moments of disappointment but the long-term direction is clear.

This has been achieved through a continuous process of deep consumer connection and ensuring that the portfolio is relevant to consumers’ ever changing needs. This is also the result of relentless focus on cost and capital efficiency.

Periodically during our history it has been necessary to reset the clock in order to refresh, to re-energize and to redirect this business for future value growth. This was the challenge we faced in 1999 from which was born the Path to Growth strategy announced four years ago in February 2000.

Path to Growth set out integrated targets across all the key value drivers, as set out on chart 12.

Now it is easy I guess in the short-term focus of day-to-day and even annual activity, to lose sight of the scale of what we were seeking to achieve. Reduce our brands from 1,600 plus to 400 or 200 brand positions. Ensure that by 2004 95% of our turnover came from these leading brands, compared with the starting 75% and these be growing at over 5%. Radically simplify our operations, costs and capital structure by reducing factories, positions, and costs and so on and add 500 basis points to our margins and reduce asset intensity by 600 basis points.

Added to this was the challenge of integrating €30b of acquisitions, managing €7b of disposals, implementing a fundamental reorganization into a divisional structure, better formulated to execute regional strategies and a concerted drive to build a strong spirit of enterprise across the business. I remember some of you telling me we’d be lucky if we achieved half of it.

So, how are we doing? Ian Marshall [indiscernible] observed no plan survives contact with the enemy. Path to Growth set a number of rigid performance measures. These were necessary to guide the market through what was a very complex and lengthy process. Milestones were needed to judge success in execution of the plan, but sometimes they assumed a life of their own and they became the message. This was not good for our shareholders, or our employees.

So, as I take you through the individual elements, please see them as they were intended, as a set of integrated measures, which in combination deliver increasing and sustainable economic value and judge them on the overall results rather than the individual elements.

Let me start at the brand portfolio on chart 13. One of the key elements – maybe the key element of Path to Growth program has been strengthening of the brand portfolio. Our focus is around 200 brand positions represented by 400 brand names. Our leading brands have moved from 75% of sales in 1999 to 93% by the end of 2003.

Apart from acquiring powerful brands we have also sold some 140 businesses with proceeds of €7.3b. We have 12 brands with sales of +€1b. We only have four brands with sales over €1b in 1999 and only one ten years ago.

We believe powerful brands are a critical success factor for our business as we move forward and Path to Growth has significantly enhanced our competitive edge in this respect.

With regard to our HPC brands we see a record of good consistent growth and even in 2003 as Howard has shown you, we see sustained progress after allowing for the 100 basis points dilution in Prestige Fragrance.

Growth in Foods has been variable. We certainly have more work to do. However, that said, we have improved the overall quality of the brand portfolio and this is reflected in the average growth rate between 2001 and 2003 as a little over 3% compared to under 2% in 2000.

Now, let me turn to the other drivers of value. Remembering that it was brand focus that enabled us to access the next level of scale advantages within Unilever and so release the fuel for growth.

Where relevant I will also show the comparative information back to 1995 in order to demonstrate our record in consistently delivering increasing economic value, this was not new to Unilever.

I’ll start with operating margin on chart 14. Progress has been excellent. Global procurement programs and the cost synergy from the acquisition and integration of Best Goods have delivered benefits in full and ahead of schedule. Indeed they continue to deliver with a further excellent contribution from procurement in 2003.

Restructuring benefits are also delivering to plan with just over 80% delivered by the end of 2003 with the current running rate that suggests we will also fully achieve this target.

We have stepped up our investments in advertising and promotion by 140 basis points. We also get more impact from our marketing spend through a range of efficiency measures including better targeting of consumers, changing agency remuneration to a performance related fee basis, developing global alliances, [media onus] and by leveraging our scale in areas such as media buying.

We have also upgraded the overall quality of margin delivery. Progress with achieving savings has enabled us to include the cost of stock options as our operating expense and beyond 2004 to include the costs of normal business restructuring within our original operating margin target.

At the end of 2003 a little over 50% of savings from our restructuring and buying programs had been taken to operating profit, with the balance reinvested in the support and competitiveness of our brands.

Turning to chart 15 and operating asset efficiency, we have also made excellent progress. We have already significantly exceeded our target for a reduction of 600 basis points and the dramatic reduction in factories and positions has been achieved without one day’s loss of production over four years.

We have identified opportunities to increase outsourcing plus continuing investment in inventory management and replenishment processes. We will be very disappointed not to see our operating asset percentage at 18% by the end of 2004.

Improvement in cash flow follows from this. We have reduced annual capital expenditure on fixed assets from 3.1% of sales, the average over the five years to 2001, to 2.7% in 2002 and 2.4% in 2003.

Increased profitability and asset efficiency have significantly raised free cash flow and, together with the proceeds from the sale of businesses that did not meet the Path to Growth criteria, this has contributed to strong cash flow performance over the period, as shown in chart 16.

We have reduced our debt from €26.5b at the end of 2000 to €12.6b at the end of 2003. Cash flow has been further enhanced by a number of structural improvements we have made to our business, which means we have been able to reduce our tax rate by some 200 basis points. Ungeared free cash flow has totaled €16.4b since the start of Path to Growth.

So, let me summarize. Against the integrated program that we put together we have made broad based progress as set out in chart 17. Operating margin is up by 460 basis points, capital efficiency has been increased by 880 basis points, and we have achieved a consistent rate of growth in Home and Personal Care. We have improved the growth profile of Foods, albeit that it is not yet up to our ambition. We have delivered low double-digit EPS growth throughout the period and we have put in place a competitive cost to capital.

The business is today lean, sharply focused, high margin, strongly cash generating and delivering significant incremental value each year.

We have also integrated one of the largest acquisitions made in our industry and a fundamental organizational change has been implemented seamlessly.

However, it is clear that with a share price that has underperformed the market in 2003, and which is trading at a discount to much of our peer group, that we still have something to do to convince the market of the sustainability of our value growth.

Turning to chart 18, what are the lessons from Path to Growth?

Firstly, that reconciling short-term performance metrics and longer-term measures of value creation is not easy, whoever said it would be? In setting out the objectives for Path to Growth we described the destination based upon our view of the world in 1999. Through a desire for transparency during a significant change program, we asked our shareholders to fund a large investment in restructuring and acquisitions. We ended up with a focus in our communication on shorter term performance metrics and a dialogue with the market eight times a year.

In reality, our business model is based around optimizing economic returns by ensuring that we pull the right combination of value drivers in any given situation. This business is dynamic, this means that plans and priorities can and do constantly change.

Of course, we also set expectations and it is therefore our problem that we have not yet been able to strike the right balance of messages in 2003 and show how our development has been consistent with long-term value delivery.

Secondly, on reflecting upon the reality of business, it is clear that we did not give ourselves sufficient flexibility on the key metrics to cater for changes in market conditions or to allow for the fact that periodically business can move off track and plans need to be revised. The need for flexibility is also clear where businesses that undergo structural challenge can have a disproportionate effect on short-term metrics, even when they are a relatively small part of the total.

We will show you how we intend to apply this learning in the second half of our program.

Having taken you through our performance for 2003 and reviewed our progress to date on Path to Growth, let me now outline our views on the next phase of Unilever’s development.

Whilst in 2004 our clear priority is to complete Path to Growth, we have been giving considerable thought to what comes after. 2005 is the 75th anniversary of Unilever. Since our foundation in 1930 the business has evolved through a number of different phases and it is timely to ask the question – “what next?”

What is going to be the foundation of success that will take us to our centenary and beyond?

Clearly the idea that is going to take the business forward must satisfy some simple criteria, it must build on our heritage, it must credibly explain much of what we do today, but most importantly it must open up exciting opportunities where we have competitive advantage for developing our business into the future.

The starting point for such an idea lies in our existing portfolio. We will see that there is a common factor that unites Unilever brands and describes what Unilever stands for.

Everyday people pick up one of our products, one of our brands 150 million times in 150 countries. This rather straightforward observation is picked up in our corporate purpose in chart 2.

It may not rank high in the great dramas of the world, but it is not trivial either, that individuals are choosing our brands daily on such a scale, for the help they bring to their everyday lives.

By understanding how our brands are helping consumers in their lives, we can identify the unifying concepts. To do this, I am going back all the way to our roots. Chart 3 shows how William Lever described the role of Sunlight Soap more than 100 years ago.

Now of course with the statement being made in 1890 some of the words and phrasings are not appropriate, not even maybe politically appropriate today, who knows. Nonetheless, I do find this a remarkable statement, an extraordinary vision of what Sunlight Soap added to life. These words give broad insight into the lives of these consumers. It is worth noting that his ambition was to make life more rewarding for the people who used his products.

Look at the variety of ways in which people could get more out of life from Sunlight Soap, cleanliness, health, personal attractiveness, less work, more enjoyment and all of this from a bar of soap.

If William Lever were writing today he might be obliged, as the brilliant copy writer he was, to use the somewhat snappier language we are accustomed to as in chart 4.

Now, if you look at that list from the perspective of present day Unilever, you would have to conclude if soap can do all that, think what a business which combines cleaning, hygiene, personal care and nutrition and a wide range of foods can contribute to life along these lines.

At Unilever we have a very disciplined approach to defining the essence of a brand and what makes that brand unique. You can think of it as the DNA of the brand or how our brands are designed and positioned to appeal to consumers.

As we look across these today, it is striking how consistently these statements echo the feel good, look good, and get more out of life sentiment. However, we really should not be surprised by this. A unique strength of being able to understand the consumer has enabled us successfully to develop brands, which have met these consumer needs for the last 75 years.

So, so much for the consumer of the past, we live in the present. Is feel good, look good, get more out of life relevant tomorrow?

Over recent years we have identified some important trends, environmental, demographic, societal, which will fundamentally influence the consumer landscape of the future. The way in which the habits, attitudes and motivations of consumers adapt to these changes gives rise to three consumer mega trends as summarized in chart 6.

First personal healthiness. This is not the sort of healthiness that is concerned with clinical medicine. It deals with emotional and mental fitness as well as physical fitness. It is a search for ways to improve stamina and move and is expressed not as an absence of disease, but as a positive state of well being.

Secondly, convenience. In a world where time is increasingly precious, consumers will seek out products and services which deliver benefits at the right time, in the right place and with minimal personal investment in time and effort.

Through the indulgence, consumers’ interest in personal healthiness and their need for convenience will not [want] their desire for the pleasures of life, sensuality, excitement and variety.

These hotspots tell us much about how you live and our brands must be positioned if we are to maintain as well as be as relevant to tomorrow’s consumers as we are to today’s. You will recognize many of the trends as we enforce these consumer hotspots. For example, all regions are ageing and these populations want to feel good and look good for the whole of their lives. The growth of purchasing power in developing and emerging markets, particularly in Asia will have far reaching consequences for consumption patterns.

All the time new populations are entering the consumer society, while others are shifting from the necessities of life to the [aspirational]. Meanwhile the rising cost of primary medical care, together with the emergence of new life style illnesses, such as obesity, will encourage the promotion of healthy living.

Personal healthiness, convenience and indulgence. Of course these words summarize how we expect consumers to behave, but they do not tell us why, what motivates them to behave in this way.

Or, in other words, what is it that drives each consumer to improve mental and physical fitness, try new things, spend less time on the things they don’t like and more time on the things they do. Let their hair down once in a while, treat themselves, achieve and maintain a positive state of wellbeing. The answer is in chart 7.

As we have seen, our brands deliver the promise of looking good, feeling good and getting more out of life and are therefore absolutely relevant and perfectly positioned to address the consumers’ needs for personal healthiness, convenience and indulgence.

The reason to get excited about this goes further still as seen in chart 8. Because of our history going all the way back to William Lever we have real expertise in the science, in the consumer understanding, in managing the value chain across these three areas, nutrition, hygiene and personal care. There are few, if any companies that can embrace the consumer in this way and exploit the inter-relationships between these elements.

In other words, how looking good relates to feeling good, how feeling good is linked to looking good. We are what we eat, which influences how we look and how we feel.

As consumers increasingly take a holistic view, so Unilever has the opportunity to engage the consumer in this same holistic way. Because we are involved in such large sectors of the whole and across so much of the world.

Mrs. Maria de Silva in San Paolo gets up in the morning and uses Lux in the shower and Sunsilk to do her hair. Before washing her son’s clothes with Omo, while he sprays on Axe to seduce girls (or he hopes). Later she prepares the family dinner with Knorr and treats her younger son to a Kebon(ph) ice lolly.

As you can see, we know quite a lot about Mrs. Maria de Silva, what she needs, what she wants for her family, how she lives and indeed her aspirations.

Now of course, many consumer products companies around the world like to align their purpose with life. Well we believe none can address it in the way that we can and thus we are going to take ownership of the word about life, which we believe captures the essence of our consumer promise. Feel good, look good and get more out of life and that word is vitality.

Vitality links our brands and what they stand for. Our singular position through our combined strength in hygiene, nutrition and personal care sums up the major opportunity presented to us by the consumer of today and tomorrow. What it means can be summed up as a mission statement for our business as set out in chart 10.

So the mission statement reads “Unilever’s mission is to add vitality to life, we meet the everyday needs for nutrition, hygiene and personal care with brands that help people feel good, look good and get more out of life”. This is a mission which is full of promise for the future and it will act as a guiding principle for our brands and our science.

We build that mission on the strong foundation that comes from Path to Growth. Indeed it is those foundations that we will need in order to compete effectively in line with our mission.

Beyond 2004 our external scan tells us the factors that separate winners and losers in today’s market place will be equally, if not more important in the future, as we show on chart 11.

We continue to believe in a business that combines the benefits of global scale in harmony with local touch. Local touch comes from consumer intimacy or being connected and is also expressed in the power of the local shopping basket.

Consumers own the brand equity and our responsibility is to manage it on their behalf and to their satisfaction. It is strong brands that build trust with the consumer and it is those same strong brands that generate the financial resources to invest in competitive levels of innovation and communication.

It is to those brands to which we can bring technology to support differentiation and build the necessary functional benefits to the brand offering. But the brand needs to go beyond functional. It needs to create an emotional bond with the consumer and through this they become the brand that the retailer must have to drive traffic through his store.

We also support the ambition for our brands by working with retailers to build value adding relationships, whilst also recognizing that the consumer will decide where they wish to consume. So we must be prepared to make our brands available wherever they may be.

Path to Growth has given us a focused number of categories expressed through our leading brands and through those brands we satisfy consumer needs, to feel good, to look good and to get more out of life.

If there is one development that does mark a break from the past, it is the extent to which society as a whole has become weary about big business. In fact it is probably true to say that the reputation of large companies has never been at such a low ebb. A succession of corporate scandals, product safety scares and the more general unease about the impact of business on public health and the environment have focused attention on the behavior of corporates and the integrity of their products.

We are proud in Unilever of our high standards of corporate governance, transparency and engagement with communities and the environment. We have a wide range of initiatives covering sustainability and we play an active role in society. All of this is an essential investment in our corporate reputation which will continue to be important for our success.

Of course corporate reputation is not just about responsible behavior. It also depends upon our success as a company in the eyes of our shareholders, our employees and indeed our consumers.

We will be turning to our financial model in a moment. However, we have confidence in the power of our corporate reputation. We believe that the Unilever name would lend real strength across all aspects of our business through association with the consumer brands, products and companies and through higher visibility to our suppliers, customers, employees and other stakeholders.

In short we have the confidence to identify Unilever with everything we do across the world everywhere. We have therefore decided that the Unilever name will appear on pack, on letterheads on company signs everywhere. We will start to see this from the middle of this year.

Now, let me turn to chart 12 and summarize. Path to Growth gave us focused portfolio brands meeting the consumers’ needs for nutrition, hygiene and personal care. We are able to marry our portfolio with the consumers’ desire for feeling good, looking good and getting more out of life. We do that by claiming ownership of vitality and through our mission statement.

In 2004 we will complete the Path to Growth program thus cementing the foundation for the next evolution of our strategy.

Before I take you through our financial model going forward, let me turn to chart 13 and say a few words on management guidance going forward.

Following the experience of Path to Growth, we believe it is important to distinguish between the longer-term expectations built into our financial model and the intermediate metrics such as EPS and its component parts.

With Path to Growth we did not get this balance right in our communication and we confined ourselves in too narrow a range for the metrics we were using. We wish to move away from this in any given situation, such as we have seen in 2003 and the right approach may be a different balance, up for example top line growth or profit margin.

So, with this in mind, from 2005 onwards we do not intend to give any specific annual guidance with regard to top line growth or EPS. We will update the market on developments in the business environment as we see it, comment on our progress, and show the longer-term metrics in our financial model and point out specific attributes to the particular year which would influence them.

We believe that this will allow us to build communication around the drivers of robust long-term value growth and, in this regard, we are also responding to the preferences of many of our key shareholders.

That said, let me now take you through our financial model for 2005 – 2010 starting with the framework on chart 14.

Shareholder value creation remains the central objective. Our priority continues to be sustained top third GSR performance. At the same time our approach will recognize that long-term shareholder value creation revolves around the health of our brands and their ability to deliver sustained free cash flow growth and grow returns above the cost of capital.

Emphasizing the long-term means that we must become more flexible. Sometimes we need to attack aggressively, sometimes to secure the mid-field and sometimes to defend as if our life depends upon it. Flexibility is essential of sustainability. Indeed we have a long history and a deep capability in pulling the right combination of value drivers in any given circumstances to sustain robust value growth.

Our strategic planning and decision making is based on maximizing value creation, this in turn is determined by the combination of three factors. Firstly, ungeared free cash flows over the period. These by nature are somewhat lumpy from one year to the next and are subject to currency fluctuations, but over time they are the only real basis for returns to shareholders.

Secondly, growth in economic profit, which is the basis for the generation of future cash flows. It is also the prime short-term profit metrics which we use internally as a basis for decision making and for determining part of the variable element of management remuneration. This is taken after tax and after a financing charge on operating assets. Internally we call this measure trading contribution. While there is no direct equivalent of this measure in general use in the market, the combination of operating profit, tax and capital efficiency is perhaps most usually seen in the measure of return on invested capital.

Thirdly, the weighted average cost of capital of the business, which depends on the sources of finance. We calculate an optimum level as being one consistent with the strong single A credit rating. The effect on value can be seen either through the rate at which expected future cash flows are discounted or the spread between returns on investment and the cost of the investment. In other words the value created.

So let me now turn to chart 15 and the development of the key measures, starting with free cash flow.

The measure we use for free cash flow is ungeared, that is the cash flow available to providers of finance before acquisitions and disposals. It is calculated as the cash flow from operating activities, less capital expenditure and financial investment and after charging tax. On the chart you can see our record of delivery.

As you can also see, we expect to generate over €30b over the six years 2005 – 2010 based on the current euro/dollar exchange rate. As the chart shows, free cash flow has limited use from us as a short-term performance measure for the reasons I have already given. These include the effect of currency movements, where we see the impact of the strengthening of the euro against the US dollar over the last two years.

To provide some calibration for free cash flow development, we would expect, on average, an annual conversion rate for net operating profit after tax of over 90%. Conversion rate from net operating profit to cash of over 90%. This conversion rate is made possible by a program of further improvements in capital efficiency as shown on chart 16.

We will continue to invest to increase capital utilization and increase productivity. Taking this together with investment behind innovation, we expect capital expenditure on tangible assets to average around 2.5% of sales through 2005 to 2010.

We will continue to raise the asset efficiency and bring innovation to market faster through inter-regional and in some cases, cross-regional sourcing.

We will take advantage of opportunities to increase outsourcing from the current level of around 15% towards 25%.

In respect of working capital we will continue to implement replenishment systems with more direct response to the demand signal and common coding systems with customers. Here we intend to be in the forefront of industry developments.

Finally, we will extend our program of simplifying the business through the harmonization and SKU reduction, giving benefit in asset utilization, working capital as well as cost reduction.

As a result of these programs we expect a further improvement of up to 500 basis points in our operational asset ratio by 2010.

We now turn to chart 17 and the second of our key matrices, return on invested capital. Again, let me be clear on the definition. The return side of the calculation is profit before amortization of goodwill, before net interest payable and after tax. Invested capital is defined as fixed assets, working capital and all acquired goodwill, including that previously written off on the earlier accounting standards or since amortized.

In the mid 1990s the ROIC was running at around 9%. By 1999 this had risen to 16.7%, including the benefit of portfolio change with the exit from the chemicals business in 1997.

With the acquisition of pet foods the ROIC dropped to 6.4% in 2000 for the inclusion of the acquired goodwill. However, by 2003 the return on invested capital had moved back up to 12.5% as we gained the benefits of the Best Foods synergy, improved operating margins through procurement and restructuring savings and reduced our capital base through greater efficiency.

Taking this forward, we would expect to see further improvements in ROIC to at least 17% by 2010. The drivers of the improving ROIC are the capital efficiency program already described and growth in operating profit.

It is important for you to understand our assumptions on the key drivers of operating profit growth, but I would emphasize that we are dealing with averages. We are not using them to provide short-term guidance.

The first element of operating profit growth is sales growth as shown on chart 18. The market volume growth for our existing category and geographic mix is close to 3%. We expect this to develop positively as our highest growth areas are D&E markets and Personal Care, which are substantial, a substantial and growing proportion of our portfolio.

On average we would expect to gain market share equivalent to underlying sales growth of 50 to 100 basis points through innovation and entry into new geographies. However, we have also assumed that this will be partly offset by a normal level of retailer de-stocking.

As with Path to Growth, we continue to expect pricing below inflation, which with our mix of categories and geography means pricing growth of some 1%. In combination this gives us an underlying sales growth in the range 3% to 5% over the period.

Let me now turn to operating margin on chart 19. We expect a 2 to 2.5 percentage point’s improvement in operating margin over the period. This reflects the strength of our brand portfolio and the further gains to be made as we exploit the scale benefits that come from brand focus and the divisional operating model.

Without giving a specific target for each element, our plans are based around the following key elements. Firstly the contribution from restructuring savings in both gross margin and overheads. On average through Path to Growth we have achieved a +30% DCF yield on our investment in restructuring and we would, as a minimum expect to achieve this going forward. We have allowed for between 50 and 100 basis points of normal business restructuring costs per annum with 100 basis points in the early years.

Secondly, continued progress with procurement both through the scale advantages, and simplification and harmonization programs. To the end of 2003 global procurement programs covered about half of our purchased inputs and we expect to extend this to around two thirds in the next few years.

Taking these first two elements in combination, we expect a retention rate of savings from restructuring procurement to operating margin of around 40%.

Thirdly, the benefits of operational leverage and improved mix from the faster growing higher margin categories and from higher value innovations, these are expected to run at around half the current rate, which is currently being boosted by our disposal program.

Against these contributors to margin growth, we expect to continue to increase investment in the market place, so the difference between the underlying cost increases and prices and ongoing investment in brand building.

The remaining operational part of our financial plan is tax. We expect to continue to benefit from sound tax management as we have done through the Path to Growth program. We expect to sustain a tax rate of around 30% through the period.

That gives you the general shape of our operating model in financial terms and the underlying rationale.

The final element of delivering value, as I described earlier, is managing our weighted average cost of capital and the implications this has for the immediate uses of free cash flow as set out in chart 20.

Let me start by saying our strategy and plans for 2005 – 2010 are based on organic growth. We have previously explained that our financial strategy, following the acquisition of Best Foods was based on reducing debt to the level consistent with a strong single A credit rating. Net debt of €12.6b at the end of 2003 is now well within the target range of €12b to €15b, which we had previously indicated, this is considerably ahead of schedule.

However, as we have already shown, some €4.4b of the debt reduction has come from favorable exchange rate movements, principally strengthening of the euro against the US dollar. As we stand today and following, and allowing for bandwidths on both projected interest rates and exchange rates, a target net debt level of around €10b will be more consistent with our financial strategy.

We therefore expect to use surplus cash generation first to reduce debt to around €10b and thereafter it will be applied to enhance shareholder return.

Taking all these various elements in combination gives an average growth in EPS before amortization of goodwill in the range of 8% to 12% per annum over the period.

Now let me summarize the key points of our financial plan, which are shown in chart 21. The key focus is on delivering robust value growth through the generation of free cash flow, the development of our return on invested capital and managing our weighted average cost of capital.

Our commitment is to create value in support of our ambition to sustain top third total shareholder return. In any one year the balance of value drivers may change.

Having looked into the future, let me finish with our outlook for 2004, which is given on chart 22.

2004 is the last year of Path to Growth and our outlook is for low double digit growth in EPS beia. We expect both an improved growth rate of our leading brands and an increased operating margin to over 16% to contribute to this. By the end of the year the leading brands should represent 95% of our business. This will be achieved by a combination of harvesting the tail brands for value, the impact of disposals already announced, and our ongoing disposal program.

Within our outlook dilution from announced disposals is expected to be around 2 percentage points of EPS growth. We will complete the charging of exceptional items on the Path to Growth and expect gross exceptional restructuring costs of around €1b in 2004.

Let me also comment on the popular subject of corporate governance.

We announced last year that we would review our current structure and processes in the light of developments in our main reporting countries. They are principally contained in the combined code, the [indiscernible] code and the [Sarbines] [indiscernible] legislation. That review is largely complete and we will be proposing changes at the AGM’s on May 12.

The most important change is a move to unitary Boards for both Unilever N.V. and Unilever PLC. Our current advisory directors will be proposed as non-executive directors, ensuring that both Boards will be identical in composition and will be comprised of a majority of independent directors. All directors will stand for election each year.

This governance structure will further enhance transparency and will be at all times subject to shareholder choice.

Finally, you will of course have seen the separate announcement with regard to my decision to retire from Unilever on September 30 of this year. By then I will have been eight years as Chairman and CEO, 18 years as a director and in all 37 years with Unilever.

I have been planning a smooth and hopefully seamless succession for some time. No more of course than you would expect from Unilever.

As we come to the close of Path to Growth and move onto the next stage of Unilever’s strategic evolution, this is absolutely the right time to pass on the responsibility for leadership.

My colleagues and our shareholders are fortunate to have such an outstanding candidate as Patrick Cescau, who can lead the business as it develops to 2010.

We will now be happy to take your questions.

Your first question comes from the line of Neil Goldner(ph) with Steep Street Global Advisors. Please go ahead.

I have two questions. My first question deals with brand extensions. If you could talk about Knorr which seems to be the most obvious example, how does that work? I don’t mean brand extension geographically, I mean brand extension across categories. That’s number one.

My second question compare and contrast what Lever was in the 1900s versus where you are in this century? One considerable difference obviously is the competitive sect. You have got some extremely powerful global competitors. I am curious where you believe Unilever fits competitively. You can break this out by region, you can break it out by category, or you can break it out by D&E versus the developed market, however you want to do it. I am just curious how you view Unilever’s competitive position today.

Let me start with that one and we’ll come back to Knorr. Again the competitive position of course depends on who it is we’re competing against. Traditionally people would have seen us as competing against Proctor and a little against Nestle and then a great disparate group of local competitors.

Still Proctor continues to be a very significant competitor. Obviously, particularly in laundry. On the laundry side they are clearly the market leaders in North America, we’re number two.

For the last few years we have been focusing all of our attention on improving our margin structure in North America at some loss of share, which has been quite deliberate and planned.

We have also been sorting out the portfolio which was too widely dispersed and coming down to a smaller number of more powerful brands.

If you look at Europe it is a three way battle between Proctor, us and Henkel. Again it depends on which market within Europe you look at. If you look to the UK of course we’re clearly have the brand leadership. If you look to Germany Henkel have brand leadership. If you look in some of the other markets Proctor have brand leadership.

This is a sort of ebbing and flowing battle within Europe where you win some and some you lose.

Where there is perhaps the most important differences in the developing and emerging markets, where over 50%, 55%/60% of our laundry business is, so it is by far the biggest part of our laundry business. It is also the fastest growing and it is where we have the strongest market positions.

It is also where we are going to see most growth in the future, because in the developing and emerging markets is where most of the world’s people are, 85%, it is where most of the world’s population growth is going to be over the next 20 years, maybe 100% of it and where on the consumption curve people are coming into more sophisticated cleaning practices, which are already well established in the developed world.

So there is a strong growth in terms of extension of product, product form and product usage.

So if I take laundry just as one, then I could range through the whole lot, but I am not going to do that. I will just take two or three examples.

With laundry we are battling away in Europe. We are number two in North America and we are by far the number one player in the fastest growing D&E markets.

If I take then, what you call Health & Beauty, where 15 years ago we had a very small position in that. First in the Care market with about 5% of Unilever’s turnover, today it is 27% of Unilever’s turnover, which makes us just about as big as L’Oreal in this sector. Therefore, that means that L’Oreal is a very important competitor.

Again our position is strong in particular sectors like Hair with the brand like Dove, which of course ranges across many categories. It is strong across the board. It is strong in North America, strong in Europe and it is strong in developing and emerging markets.

If I switch over to Food for a moment and take a couple of sectors there. In Spreads we are clearly, across the world wherever you look, we are the market leaders and, if anything, that position has strengthened over the last 10 to 15 years.

In Ice Cream we are the clear market leaders in Europe and in most, not every, but most developing markets. With the combination of [indiscernible] Briars and Ben & Jerry we have leadership and a strong growth profile in North America.

That has given you four. I could talk for the rest of the afternoon on all the rest. But if you’re just trying to dip in and get a sense of competitive positions, that’s one.

Now that we’re entering the end of Path to Growth, if you look back to where you were when you started and where you are now, not talking about categories again, but just collectively speaking. Do you believe, first a) your categories are more competitive or less competitive than they were say five years ago and b) are you more comfortable with your competitive position now that you’ve got down to about 400 brands versus 1,600?

[indiscernible] the second one, we’re clearly much more comfortable with that. When you have 1600 plus brands, so many that you can’t even count them, that’s why we said 1600 plus because we weren’t sure how many and we brought it down now to 400. Of which in that there are about 35 or 40 global brands, which represent two thirds of our turnover. Even within that again there are 12 brands which individually have turnover of more than €1b, this ranges from €1b to €3.5b. Whereas four years ago we only had four brands like that and in fact ten years ago we only had 1.

So our brand portfolio is much more focused, much fewer brands, much stronger brands, which has all sorts of competitive economies that it brings to it in terms of supply chain, in terms of how we use our marketing support and in terms of media buying and so on and so forth.

So from the point of our brand portfolio our competitive position has been significantly [indiscernible].

As far as the markets themselves are concerned I would say today they are tougher than they were four years ago. That’s the nature of how these things go. You get intensified competitive activity at some stages and then you get it more relaxed at other stages. But just now I would say it is a bit tougher.

Now I’m going to ask Rudy, just to give my voice a rest for the moment to talk on the Knorr brand extensions issue.

Thanks Niall. We said a little bit in the speech that you’ll have heard a little bit earlier about progressing the expansion of Knorr around the world. Although you said don’t talk about geography it is still an important part of the development of the Knorr brand and one of the main reasons why we bought the Best Foods business back in 2000.

The reason I said don’t talk about geography is because when you look at your global competitors they’re all kind of doing the same thing theoretically. They are all kind of expanding their brands geographically, expanding their footprint.

But you’re somewhat unique in the way you’re taking a brand that represented one thing and one category and really spreading it across many other categories. There are very few examples of that happening, anybody trying that.

Yes, true. I’ll give you a couple of comments in that in a minute, but I just want to finish this one point. Because it is one thing to say you want to spread your brands all around the world, and as you rightly point out many people are trying that. It is another to have the existing business capability to do that.

One of the major opportunities for us is our existing business infrastructure in most countries or almost all countries of Africa, Asia and Latin America, through which we can expand Knorr as we go forward.

The key is perhaps about Knorr and what does it represent, because it is a brand, it is not just a category. It is about simple chefmanship. It is about bringing real taste to food.

Let me give you some examples of how we’re doing that. We are taking it into the launch of salad dressings in Europe. We have taken it into Frozen foods both in Europe and some other countries. We have also looked very importantly, not just at the brand, but the way it is expressed and available to our consumers. Because a consumer in Europe in North America has enough money to buy a Knorr meal kit for example and they are interested in the convenience and the taste that that offers.

On the other hand, a consumer with similar ambition for great tasting food, but with much less money to do it, in say Indonesia or in say Ghana, is looking for a form of seasoning or addition to their food products that enable them to do that. Knorr cubes, [indiscernible] cubes, and Knorr liquid seasonings as we have launched them in Indonesia, do just that.

We have taken also Knorr into the snacks range and launched in a number of countries Knorr Soupy Snacks, that’s a sort of combination of soup, but a quick shot product. Finally we have taken also Knorr strongly into the region of Health & Vitality and launched for example a range of soups called Good for You, available now in eight countries.

They all rest on two key things, firstly the essence of the brand that I described earlier. The simple chefmanship, this quality taste and secondly the technology to deliver that taste and freshness in a wide variety of product forms with the consistent footprint, which is recognizable by our consumers everywhere.

I hope that gives you a flavor, for the way in which we have been able to broaden Knorr across the range of what the trade would call “categories”.

It does, thank you very much.

Thank you Neil.

Gentlemen it appears that we have no further questions at this time.

Okay, let me then, before we sign off, just summarize what we have been talking about for the last hour and a bit. By going back to our plan for value delivery to the year 2010. The message is how we’re going to achieve this and the key building blocks remain sharp brand focus, efficient supply chain and aligned organization.

We will bias our plans towards long-term brand strength, of growing cash flow and enhancing our return on invested capital.

Why am I confident we can achieve our goals? Firstly the execution of Path to Growth has been mostly good. Our brands are now in better shape in aggregate than at any time in our history. Our supply chain has been transformed and our management is ready to go. Path to Growth is a journey, not a destination. It has taken us to a position that we could not have dreamed of when we set out. We know we still have work to do and this, of course, is our immediate focus. Executing it will create another major increase in value, but we’ll only be successful if we’re single minded about building our brands to last and last and last. Path to Growth has given us that opportunity and provides us with the firm foundations for building the next phase of the Unilever journey.

Thank you all very much for participating with us today.

This concludes the presentation.