Sales and operating profit

Sales in the year increased 10 per cent to € 3 717 million. This increase includes unusually high rates of growth in the first two months of the financial year, when sales grew by more than 20 per cent. These high rates reflect the negative impact of the SARS epidemic in the comparative period. The improvement in sales continued for the rest of the year, albeit at a more moderate rate, including the important pre-Christmas quarter, when sales increased by 9 per cent.

The gross margin percentage increased from 62.0 per cent to 64.4 per cent, reflecting both changes in product mix and a higher utilisation rate within the Group's manufacturing facilities. In addition, price increases had a positive influence on the gross margin percentage, offsetting the negative impact of the weaker dollar seen during the latter part of the financial year.

Net operating expenses increased by 5 per cent, largely due to increased communication, selling and distribution costs; communication costs having increased by 14 per cent to € 414 million. As a percentage of sales, however, communication costs represented 11.1 per cent, a marginal increase over the prior year. Administration and other expenses decreased by 5 per cent to € 550 million, partly offsetting the increases described above. There were no material, exceptional charges in either period.

Operating profit increased by 71 per cent to € 505 million and the operating margin improved by 4.8 percentage points to 13.6 per cent.