By  on August 3, 2007

LONDON — Unilever, which said Thursday second-quarter profits from continuing operations spiked 14 percent year-on-year at 1.15 billion euros, or $1.55 billion at average exchange, outlined plans meant to make the firm more profitable, including the elimination of 20,000 jobs over the next four years.

The Anglo-Dutch consumer-goods giant said Thursday it plans to further cluster country organizations and streamline regional structures. It also intends to improve supply chain efficiency with the closure, or substantial streamlining, of 50 to 60 manufacturing sites worldwide. Currently the company has about 300 manufacturing sites.

"This will reduce costs and assets employed," said Patrick Cescau, group chief executive officer Thursday. "But it will also entail investment in a more flexible, customer-responsive supply chain, capable of supporting faster rollout of innovation and better on-shelf availability."

Nonstrategic business, including Unilever's North American laundry business, will be considered for disposal — either outrightly or through joint ventures or licensing deals. It announced planned disposals weighing in at more than 2 billion euros, or $2.73 billion at current exchange, and steps to accelerate margin improvement.

"We are not giving an estimate at this stage of either sales proceeds or profits on disposals," said Cescau. "But let me be clear, these are not forced sales and, as always, we will manage the timing and execution of this program to maximize value creation for Unilever. However, as mentioned in our 2007 outlook, we do expect at least some disposal profits in the second half of 2007."

Sales in the quarter ended June 30 totaled 10.53 billion euros, or $14.19 billion, an increase of 3 percent over the year-ago period. At constant rates of exchange, profits gained 17 percent and sales 5 percent.

For the half, profits rose 10 percent to 2.21 billion euros, or $2.93 billion, while sales were up 1 percent to 20.05 billion euros, or $26.66 billion.

"All our categories grew well in the first half year," the company said in a statement. "The strongest performances have been in personal care, tea and household cleaning. Savory, ice cream and laundry also contributed strongly."

Unilever's personal care business comprises brands including Dove, Sunsilk, Axe and Lynx.The company said it expects its full-year sales growth to be at the upper end of the 3 to 5 percent range.

In other Unilever news, the company Wednesday named James Lawrence as its chief financial officer starting Sept. 1. He will replace Rudy Markham, who is retiring.

Lawrence, 54, is vice chairman and chief financial officer of General Mills.

His career has also included stints as executive vice president and chief financial officer of Northwest Airlines and president of Pepsi-Cola, Asia, Middle East and Africa. He will be proposed for election to the boards of Unilever NV and PLC no later than the firm's annual general meetings scheduled for May 2008, according to the company.

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