Unilever reported that its 2013 turnover was down 3% to €49.8 billion with foreign exchange 5.9% and net acquisitions and disposal 1.1%
Finance costs and tax
The cost of financing net borrowings in 2013 was €397 million versus €390 million in 2012. The average level of net debt increased following the acquisition of additional shares in Hindustan Unilever Limited whilst interest rate movements were favourable. The average interest rate on borrowings was 3.3% and the average return on cash deposits was 2.9%. Pensions financing, restated for the impact of the revision to the accounting standard IAS 19, was a debit of €133 million versus a debit of €145 million in the prior year.
The effective tax rate was 26.4%, the same as 2012. Our longer term expectation for the tax rate remains around 26%.
Joint ventures, associates and other income from non-current investments
Net profit from joint ventures and associates was broadly stable at €113 million despite higher investment behind the Lipton ready-to-drink tea brand. Income from non-current investments was higher by €28 million, mainly due to the low prior year comparator which contained an impairment of warrants associated with the disposal of the US laundry business.
Earnings per share
Core earnings per share increased by 3% to €1.58 for the full year, driven by the growth in core operating margin, partially offset by negative foreign exchange movements. In constant currency core earnings per share increased by 10.6%. This measure excludes the impact of business disposals, acquisition and disposal related costs, impairments and other one-off items.
Fully diluted earnings per share for the full year was up 11% at €1.66. This included the profits on disposal of the Skippy and Wish-Bone brands partly offset by a provision for competition investigations.
Pensions
The net pension deficit was €2.0 billion at the end of December 2013 versus €3.3 billion as at 31 December 2012, all numbers restated for the revisions to IAS 19. The reduction in the net pension deficit reflects the impact of investment returns, in excess of the interest cost on liabilities, and cash contributions.
Disposals
Business disposals contributed €733 million to non-core profits versus €117 million for the full year 2012. This primarily relates to the disposal of the Skippy and Wish-Bone brands.
Acquisitions and disposal related costs amounted to €112 million, against €190 million in the full year 2012.
Free cash flow
Free cash flow was €3.9 billion, slightly lower than 2012. The reduction is due to a lower inflow from working capital which is measured against a strong performance in 2012 and currency headwinds. Net capital expenditure was slightly lower than 2012 at 4.1% of turnover.
Net debt
Closing net debt was €8.5 billion versus €7.4 billion as at 31 December 2012. The main factor driving the increase was the impact of a €2.5 billion cash outflow to increase the Group's interest in Hindustan Unilever Limited from 52.48% to 67.28%.
Finance and liquidity
During the year the following bonds matured and were repaid: (i) US $450 million 3.125% and (ii) €750 million 4.875%.
On 5 August 2013 we issued a 7 year €750 million bond at 1.75% and on 6 September we issued US $750 million 2.20% fixed rate notes due March 2019.
