SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 20-F

(Mark one)

 

(Mark one)
¨REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

OR
xANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2011

OR

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2013
OR
¨TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

OR
¨

SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of event requiring this shell company report

For the transition period fromto                to

Commission file number 001-04546

UNILEVER PLC

 

(Exact name of Registrant as specified in its charter)

ENGLAND

 

(Jurisdiction of incorporation or organization)

Unilever House, Blackfriars, London, England

 

(Address of principal executive offices)

T. E. Lovell, Group Secretary

Tel: +44(0)2078225252, Fax: +44(0)20782261082078225464

Unilever House, 100 Victoria Embankment, London EC4Y 0DY, UK

(Name, telephone number, facsimile number and address of Company Contact)

Securities registered or to be registered pursuant to Section 12(b) of the Act:

 

Title of each class

  

Name of each exchange on which registered

American Shares (evidenced by Depositary Receipts) each representing one ordinary share of the nominal amount of 3 1/9p each  New York Stock Exchange

Securities registered or to be registered pursuant to Section 12(g) of the Act:None

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:None

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.

The total number of outstanding shares of the issuer’s capital stock at the close of the period covered by the annual report was:1,310,156,361 ordinary shares

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act:

Yesx      No¨

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934:

Yes¨      Nox

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yesx      No¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes¨      No¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.

Large Accelerated filer x      Accelerated filer ¨      Non-accelerated filer ¨

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

 

U.S. GAAP¨  

International Financial Reporting Standards as issued by the International Accounting

Standards Boardx

  Other¨

If ‘Other’ has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow. Item 17¨     Item 18¨

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act):

Yes¨      Nox


Cautionary statementCAUTIONARY STATEMENT

This document may contain forward-looking statements, including ‘forward-looking statements’ within the meaning of the United States Private Securities Litigation Reform Act of 1995. Words such as ‘will’, ‘aim’, ‘expects’, ‘anticipates’, ‘intends’, ‘looks’, ‘believes’, ‘vision’, or the negative of these terms and other similar expressions of future performance or results, and their negatives, are intended to identify such forward-looking statements. These forward-looking statements are based upon current expectations and assumptions regarding anticipated developments and other factors affecting the Group. They are not historical facts, nor are they guarantees of future performance.

Because these forward-looking statements involve risks and uncertainties, there are important factors that could cause actual results to differ materially from those expressed or implied by these forward-looking statements, including, among others, competitive pricingstatements. Among other risks and activities, economic slowdown, industry consolidation, accessuncertainties, the material or principal factors which cause actual results to credit markets,differ materially are: Unilever’s global brands not meeting consumer preferences; Unilever’s ability to innovate and remain competitive; Unilever’s investment choices in its portfolio management; inability to find sustainable solutions to support long-term growth; customer relationships; the recruitment levels, reputational risks, commodity prices, continued availabilityand retention of talented employees; disruptions in our supply chain; the cost of raw materials prioritisationand commodities; the production of projects, consumption levels, costs, the abilitysafe and high quality products; secure and reliable IT infrastructure; successful execution of acquisitions, divestitures and business transformation projects; economic and political risks and natural disasters; financial risks; failure to maintainmeet high and manage key customer relationshipsethical standards; and supply chain sources, consumer demands, currency values, interest rates, the ability to integrate acquisitions and complete planned divestitures, finalising fair values related to prior acquisitions, the ability to complete planned restructuring activities, physical risks, environmental risks, the ability to manage sustainability,managing regulatory, tax and legal matters and resolve pending matters within current estimates, legislative, fiscal and regulatory developments, political, economic and social conditions in the geographic markets where the Group operates, completion of the Sustainable Development Report 2011 and new or changed priorities of the Boards.matters. Further details of potential risks and uncertainties affecting the Group are described in the Group’s filings with the London Stock Exchange, Euronext Amsterdam and the US Securities and Exchange Commission, including in the Group’s Annual Report on Form 20-F for the year ended 31 December 20112013 and the Annual Report and Accounts 2011.2013. These forward-looking statements speak only as of the date of this document. Except as required by any applicable law or regulation, the Group expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Group’s expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.


LOGOLOGO

ANNUAL REPORT ON FORM 20-F 2013             

UNILEVER N.V. AND UNILEVER PLC

MAKING SUSTAINABLE

LIVING COMMONPLACE

  Unilever N.V. and Unilever PLC

ANNUAL REPORT ON

FORM 20-F2011

Creating a better future every day

 

LOGOLOGO


CONTENTS

Form 20-F

Contents
Item 1 Identity of Directors, Senior Management and Advisers   1  
Item 2 Offer Statistics and Expected Timetable   21  
Item 3 Key Information   2  
Item 4 Information on the Company   8  
Item 4A Unresolved Staff Comments   8  
Item 5 Operating and Financial Review and Prospects   89  
Item 6 Directors, Senior Management and Employees   13  
Item 7 Major Shareholders and Related Party Transactions   14  
Item 8 Financial Information   1514  
Item 9 The Offer and Listing   15  
Item 10 Additional Information   1716  
Item 11 Quantitative and Qualitative Disclosures About Market Risk   2018  
Item 12 Description of Securities Other than Equity Securities   2018  
Item 13 Defaults, Dividend Arrearages and Delinquencies   2119  
Item 14 Material Modifications to the Rights of Security Holders and Use of Proceeds   2120  
Item 15 Controls and Procedures   2220  
Item 16 Reserved   2220  
Item 17 Financial Statements   2321  
Item 18 Financial Statements   2422  
Item 19 Exhibits   3028  

LOGO


References in this Report on Form 20-F

References set forth below are to certain references in the Group’s Annual Report and Accounts 2013 that include pages incorporated therein, including any page references incorporated in the incorporated material, unless specifically noted otherwise.

The following pages and sections of the Group’s Annual Report and Accounts 2011,2013 and specified information referenced therein, regardless of their inclusion in any cross-reference below, are hereby specifically excluded and are not incorporated by reference into this report on

Form 20-F:

pages 2 to 5;

‘Operational highlights’ on page 6;

2;

pages 4 to 7;

Additional statutory disclosures’Five-year historical Total Shareholder Return (TSR) Performance’ on page 59;

82;

pages 6286 to 89;

pages 136 to 145; and 63;
information on our website or any other website or social media site, including our Facebook, Twitter and

pages 111 to 122.

LinkedIn pages.

This report on Form 20-F Report and the Group’s Annual Report and Accounts 20112013 (furnished separately on 27 March 20122014 under Form 6-K) contain certain measures that are not defined by generally accepted accounting principles (GAAP) such as IFRS. We believe this information, along with comparable GAAP measurements, is useful to investors because it provides a basis for measuring our operating performance, ability to retire debt and invest in new business opportunities. Our management uses these financial measures, along with the most directly comparable GAAP financial measures, in evaluating our operating performance and value creation. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information presented in compliance with GAAP. Non-GAAP financial measures as reported by us may not be comparable with similarly titled amounts reported by other companies. In addition, there are limitations on the usefulness of our reported non-GAAP financial measures.

We report on the following non-GAAP measures:

underlying sales growth;

underlying volume growth;

underlyingcore operating profit and core operating margin (including explanationacquisition and disposal related costs, gain/(loss) on disposal of restructuring, business disposals,group companies, impairments and other one-off items (RDIs)costs (non-core items));

core earnings per share (core EPS);

free cash flow; and

net debt.

The information set forth under the heading ‘Non-GAAP measures’ on pages 2632 to 2733 of the Group’s Annual Report and Accounts 20112013 furnished separately on 27 March 20122014 under Form 6-K is incorporated by reference. Within these pages further information about the above measures can be found.

The Unilever GroupTHE UNILEVER GROUP

Unilever N.V. (NV) is a public limited company registered in the Netherlands, which has listings of shares and depositary receipts for shares on Euronext Amsterdam and of New York Registry Shares on the New York Stock Exchange. Unilever PLC (PLC) is a public limited company registered in England and Wales which has shares listed on the London Stock Exchange and, as American Depositary Receipts, on the New York Stock Exchange.

The two parent companies, NV and PLC, together with their Groupgroup companies, operate as a single economic entity (the Unilever Group, also referred to as ‘Unilever’ or ‘the Group’). NV and PLC and their Groupgroup companies constitute a single reporting entity for the purposes of presenting consolidated accounts. Accordingly, the accounts of the Unilever Group are presented by both NV and PLC as their respective consolidated accounts.

This document contains references to our website. Information on our website or any other website referenced in this document is not incorporated into this document and should not be considered part of this document. We have included any website as an inactive textual reference only.

ItemITEM 1. Identity of Directors, Senior Management and AdvisersIDENTITY OF DIRECTORS,

SENIOR MANAGEMENT AND ADVISERS

Not applicable.

ITEM 2. OFFER STATISTICS AND

EXPECTED TIMETABLE

Not applicable.

 

 

UnileverAnnual Report on Form 20-F 20112013

  Form 20-F                1


Form 20-FITEM 3. KEY INFORMATION

A. SELECTED FINANCIAL DATA

The schedules below provide the Group’s selected financial data for the five most recent financial years.

 

Item 2. Offer Statistics and Expected Timetable

Not applicable.

Item 3. Key Information

A. Selected financial data

In the schedules below, figures within the income statement and for earnings per share reflect the classification between continuing and discontinued operations which has applied for our reporting during 2007–2011.

   million    million  million  million  million 
Consolidated income statement   million
2011
  million
2010
  million
2009
  million
2008
  million
2007
    2013     

 

2012

(Restated)

  

(a) 

  

 

2011

(Restated)

  

(a) 

  

 

2010

(Restated)

  

(a) 

  

 

2009

(Restated)

  

(a) 

Continuing operations:

      
Turnover   46,467    44,262    39,823    40,523    40,187     49,797     51,324   46,467   44,262   39,823  
Operating profit   6,433    6,339    5,020    7,167    5,245     7,517     6,977   6,420   6,325   5,006  

Net finance costs

   (377  (394  (593  (257  (252   (530   (535 (543 (561 (596

Income from non-current investments

   189    187    489    219    191  

Share of net profit/(loss) of joint ventures and associates and other income/(loss) from non-current investments

   127     91   189   187   489  
Profit before taxation   6,245    6,132    4,916    7,129    5,184     7,114     6,533   6,066   5,951   4,899  

Taxation

   (1,622  (1,534  (1,257  (1,844  (1,128   (1,851   (1,697 (1,575 (1,486 (1,253
Net profit from continuing operations   4,623    4,598    3,659    5,285    4,056  

Net profit from discontinued operations

                   80  
Net profit   4,623    4,598    3,659    5,285    4,136     5,263     4,836   4,491   4,465   3,646  

Attributable to:

             

Non-controlling interests

   371    354    289    258    248     421     468   371   354   289  

Shareholders’ equity

   4,252    4,244    3,370    5,027    3,888     4,842     4,368   4,120   4,111   3,357  

Combined earnings per share(a)

  

2011

 

2010

 

2009

 

2008

 

2007

 

Continuing operations:

      
Combined earnings per share(b)  

2013

   

2012

 

2011

 

2010

 

2009

 

Basic earnings per share

   1.51    1.51    1.21    1.79    1.32     1.71     1.54   1.46   1.46   1.20  

Diluted earnings per share

   1.46    1.46    1.17    1.73    1.28     1.66     1.50   1.42   1.42   1.16  

Total operations:

      

Basic earnings per share

   1.51    1.51    1.21    1.79    1.35  

Diluted earnings per share

   1.46    1.46    1.17    1.73    1.31  

(a) For the basis of the calculations of combined earnings per share see note 7 on page 83 of the Group’s Annual Report and Accounts 2011 furnished separately on 2 March 2012 under Form 6-K and incorporated here by reference.

      

(a) For an explanation of the restatement see note 1 ‘Accounting information and policies – Recent accounting developments – Adopted by the Group’ on page 95 of the

Group’s Annual Report and Accounts 2013 furnished separately on 7 March 2014 under Form 6-K and incorporated here by reference.

(b) For the basis of the calculations of combined earnings per share see note 7 ‘Combined earnings per share’ on page 108 of the Group’s Annual Report and Accounts

2013 furnished separately on 7 March 2014 under Form 6-K and incorporated here by reference.

(a) For an explanation of the restatement see note 1 ‘Accounting information and policies – Recent accounting developments – Adopted by the Group’ on page 95 of the

Group’s Annual Report and Accounts 2013 furnished separately on 7 March 2014 under Form 6-K and incorporated here by reference.

(b) For the basis of the calculations of combined earnings per share see note 7 ‘Combined earnings per share’ on page 108 of the Group’s Annual Report and Accounts

2013 furnished separately on 7 March 2014 under Form 6-K and incorporated here by reference.

     

       

     

       

   million    million  million  million  million 
  2013   2012 2011 2010 2009 

Consolidated balance sheet

    million
2011
   million
2010
   million
2009
   million
2008
   million
2007
        (Restated) (Restated) (Restated) (Restated) 

Non-current assets

   33,221    28,683    26,205    24,967    27,374     33,391     34,042   33,245   28,706   26,224  

Current assets

   14,291    12,484    10,811    11,175    9,928     12,122     12,147   14,291   12,484   10,811  
Total assets   47,512    41,167    37,016    36,142    37,302     45,513     46,189   47,536   41,190   37,035  

Current liabilities

   17,929    13,606    11,599    13,800    13,559     17,382     15,815   17,929   13,606   11,599  

Non-current liabilities

   14,662    12,483    12,881    11,970    10,924     13,316     14,425   14,489   12,322   12,728  
Total liabilities   32,591    26,089    24,480    25,770    24,483     30,698     30,240   32,418   25,928   24,327  

Shareholders’ equity

   14,293    14,485    12,065    9,948    12,387     14,344     15,392   14,491   14,669   12,237  

Non-controlling interests

   628    593    471    424    432     471     557   628   593   471  
Total equity   14,921    15,078    12,536    10,372    12,819     14,815     15,949   15,119   15,262   12,708  
Total liabilities and equity   47,512    41,167    37,016    36,142    37,302     45,513     46,189   47,537   41,190   37,035  
   million    million  million  million  million 
Consolidated cash flow statement  2013   2012 2011 2010 2009 

Net cash flow from operating activities

   6,294     6,836   5,452   5,490   5,774  

Net cash flow from/(used in) investing activities

   (1,161   (755 (4,467 (1,164 (1,263

Net cash flow from/(used in) financing activities

   (5,390   (6,622 411   (4,609 (4,301

Net increase/(decrease) in cash and cash equivalents

   (257   (541 1,396   (283 210  

Cash and cash equivalents at the beginning of the year

   2,217     2,978   1,966   2,397   2,360  

Effect of foreign exchange rates

   84     (220 (384 (148 (173

Cash and cash equivalents at the end of the year

   2,044     2,217   2,978   1,966   2,397  
      2012 2011 2010 2009 
Key performance indicators  2013   (Restated) (Restated) (Restated) (Restated) 

Underlying sales growth (%)(c)

   4.3     6.9   6.5   4.1   3.5  

Underlying volume growth (%)(c)

   2.5     3.4   1.6   5.8   2.3  

Core operating margin (%)(c)

   14.1     13.7   13.5   13.6   12.5  

Free cash flow ( million)(c)

   3,856     4,333   3,075   3,365   4,072  

 

 

2                Form 20-F UnileverAnnual Report on Form 20-F 20112013


ITEM 3. KEY INFORMATIONForm 20-FCONTINUED

 

Consolidated cash flow statement    million
2011
    million
2010
    million
2009
    million
2008
    million
2007
 

Net cash flow from operating activities

   5,452    5,490    5,774    3,871    3,876  

Net cash flow from/(used in) investing activities

   (4,467  (1,164  (1,263  1,415    (623

Net cash flow from/(used in) financing activities

   411    (4,609  (4,301  (3,130  (3,009
Net increase/(decrease) in cash and cash equivalents   1,396    (283  210    2,156    244  

Cash and cash equivalents at the beginning of the year

   1,966    2,397    2,360    901    710  

Effect of foreign exchange rates

   (384  (148  (173  (697  (53
Cash and cash equivalents at the end of the year   2,978    1,966    2,397    2,360    901  

 

Key performance indicators

  2011  2010  2009  2008  2007 

Underlying sales growth (%)(b)

   6.5    4.1    3.5    7.4    5.5  

Underlying volume growth (%)(b)

   1.6    5.8    2.3    0.1    3.7  

Underlying operating margin (%)(b)

   14.9    15.0    14.8    14.6    14.5  

Free cash flow ( million)(b)

   3,075    3,365    4,072    2,390    2,487  

 

Ratios and other metrics

  2011  2010  2009  2008  2007 

Operating margin (%)

   13.8    14.3    12.6    17.7    13.1  

Net profit margin (%)(c)

   9.2    9.6    8.5    12.4    9.7  

Net debt ( million)(b)

   8,781    6,668    6,357    8,012    8,335  

Ratio of earnings to fixed charges (times)(d)

   10.0    10.7    8.8    11.7    8.3  

(b)

Non-GAAP measures are defined and described on pages 26 and 27 of the Group’s Annual Report and Accounts 2011 furnished separately on 2 March 2012 under Form 6-K and incorporated here by reference.

(c)

Net profit margin is expressed as net profit attributable to shareholders’ equity as a percentage of turnover from continuing operations.

(d)

In the ratio of earnings to fixed charges, earnings consist of net profit from continuing operations excluding net profit or loss of joint ventures and associates increased by fixed charges, income taxes and dividends received from joint ventures and associates. Fixed charges consist of interest payable on debt and a portion of lease costs determined to be representative of interest. This ratio takes no account of interest receivable although Unilever’s treasury operations involve both borrowing and depositing funds.

Dividend record

The following tables show the dividends declared and dividends paid by NV and PLC for the last five years, expressed in terms of the revised share denominations which became effective from 22 May 2006. Differences between the amounts ultimately received by US holders of NV and PLC shares are the result of changes in exchange rates between the equalisation of the dividends and the date of payment.

Following agreement at the 2009 AGMs and separate meetings of ordinary shareholders, the Equalisation Agreement was modified to facilitate the payment of quarterly dividends from 2010 onwards.

    2011   2010   2009   2008   2007 

Dividends declared for the year

          
NV dividends          

Dividend per0.16

   0.90     0.83     0.46     0.77     0.75  

Dividend per0.16 (US Registry)

   US $1.25     US $1.13     US $0.67     US $1.02     US $1.13  
PLC dividends          

Dividend per 3 1/9p

   £0.78     £0.71     £0.41     £0.61     £0.51  

Dividend per 3 1/9p (US Registry)

   US $1.25     US $1.13     US $0.67     US $0.94     US $1.01  

Dividends paid during the year

          
NV dividends          

Dividend per0.16

   0.88     0.82     0.78     0.76     0.72  

Dividend per0.16 (US Registry)

   US $1.24     US $1.11     US $1.09     US $1.11     US $1.00  
PLC dividends          

Dividend per 3 1/9p

   £0.77     £0.71     £0.64     £0.55     £0.49  

Dividend per 3 1/9p (US Registry)

   US $1.24     US $1.11     US $1.00     US $0.99     US $0.99  

   2013   2012   2011   2010   2009 
Ratios and other metrics       (Restated)   (Restated)   (Restated)   (Restated) 

Operating margin (%)

   15.1     13.6     13.8     14.3     12.6  

Net profit margin (%)(d)

   9.7     8.5     8.9     9.3     8.4  

Net debt ( million)(c)

   8,456     7,355     8,781     6,668     6,357  

Ratio of earnings to fixed charges (times)

   11.8     10.2     9.8     10.4     8.8  

(c)  Non–GAAP measures are defined and described on pages 32 and 33 of the Group’s Annual Reports and Accounts 2013 furnished separately on 7 March 2014 under Form 6-K and incorporated here by reference. Reconciliations of non-GAAP measures to relevant GAAP measures are detailed below and should be read in conjunction with pages 32 and 33 of the Group’s Annual Report and Accounts 2013.

(d)  Net profit margin is expressed as net profit attributable to shareholders’ equity as a percentage of turnover.

       

     

   2013   2012   2011   2010   2009 
Underlying sales growth (%)  vs 2012   vs 2011   vs 2010   vs 2009   vs 2008 

Underlying sales growth (%)

   4.3     6.9     6.5     4.1     3.5  

Effect of acquisitions (%)

        1.8     2.7     0.3     0.6  

Effect of disposals (%)

   (1.1   (0.7   (1.5   (0.8   (3.0

Effect of exchange rates (%)

   (5.9   2.2     (2.5   7.3     (2.7

Turnover growth (%)

   (3.0   10.5     5.0     11.1     (1.7
   2013   2012   2011   2010   2009 
Underlying volume growth (%)  vs 2012   vs 2011   vs 2010   vs 2009   vs 2008 

Underlying volume growth (%)

   2.5     3.4     1.6     5.8     2.3  

Effect of price changes (%)

   1.8     3.3     4.8     (1.6   1.2  

Underlying sales growth (%)

   4.3     6.9     6.5     4.1     3.5  
    million    million    million    million    million 
   2013   2012   2011   2010   2009 
Core operating margin and core operating profit       (Restated)   (Restated)   (Restated)   (Restated) 

Operating profit

   7,517     6,977     6,420     6,325     5,006  

Acquisition and disposal related cost

   112     190     234     50     11  

(Gain)/loss on disposal of group companies

   (733   (117   (221   (468   (4

Impairments and other one-off items

   120          (157   110     (25

Core operating profit

   7,016     7,050     6,276     6,017     4,988  

Turnover

   49,797     51,324     46,467     44,262     39,823  

Operating margin (%)

   15.1     13.6     13.8     14.3     12.6  

Core operating margin (%)

   14.1     13.7     13.5     13.6     12.5  
    million    million    million    million    million 
   2013   2012   2011   2010   2009 
Free cash flow (FCF) to net profit       (Restated)   (Restated)   (Restated)   (Restated) 

Net profit

   5,263     4,836     4,491     4,465     3,646  

Taxation

   1,851     1,697     1,575     1,486     1,253  

Share of net profit of joint ventures/associates and other income from non-current investments

   (127   (91   (189   (187   (489

Net finance costs

   530     535     543     561     596  

Depreciation, amortisation and impairment

   1,151     1,199     1,029     993     1,032  

Changes in working capital

   200     822     (177   169     1,701  

Pensions and similar provisions less payments

   (383   (369   (540   (458   (1,014

Restructuring and other provisions less payments

   126     (43   9     72     (258

Elimination of (profits)/losses on disposals

   (725   (236   (215   (476   13  

Non-cash charge for share-based compensation

   228     153     105     144     195  

Other adjustments

   (15   13     8     49     58  

Cash flow from operating activities

   8,099     8,516     6,639     6,818     6,733  

Income tax paid

   (1,805   (1,680   (1,187   (1,328   (959

Net capital expenditure

   (2,027   (2,143   (1,974   (1,701   (1,258

Net interest and preference dividends paid

   (411   (360   (403   (424   (444

Free cash flow

   3,856     4,333     3,075     3,365     4,072  

Net cash flow (used in)/from investing activities

   (1,161   (755   (4,467   (1,164   (1,263

Net cash flow (used in)/from financing activities

   (5,390   (6,622   411     (4,609   (4,301

 

 

UnileverAnnual Report on Form 20-F 20112013

   Form 20-F                3  


ITEM 3. KEY INFORMATIONForm 20-FCONTINUED

    million    million    million    million    million 
Net debt to total financial liabilities  2013   2012   2011   2010   2009 

Total financial liabilities

   (11,501   (10,221   (13,718   (9,534   (9,971

Financial liabilities due within one year

   (4,010   (2,656   (5,840   (2,276   (2,279

Financial liabilities due after one year

   (7,491   (7,565   (7,878   (7,258   (7,692

Cash and cash equivalents as per balance sheet

   2,285     2,465     3,484     2,316     2,642  

Cash and cash equivalents as per cash flow statement

   2,044     2,217     2,978     1,966     2,397  

Add bank overdrafts deducted therein

   241     248     506     350     245  

Financial assets

   760     401     1,453     550     972  

Net debt

   (8,456   (7,355   (8,781   (6,668   (6,357

RATIO OF EARNINGS TO FIXED CHARGES (TIMES)

For a calculation of our ratio of earnings to fixed charges see Item 19: Exhibits-Calculation of Ratio of Earnings to Fixed Charges.

 

DIVIDEND RECORD

The following tables show the dividends declared and dividends paid by NV and PLC for the last five years, expressed in terms of the revised share denominations which became effective from 22 May 2006. Differences between the amounts ultimately received by US holders of NV and PLC shares are the result of changes in exchange rates between the equalisation of the dividends and the date of payment.

 

Following agreement at the 2009 AGMs and separate meetings of ordinary shareholders, the Equalisation Agreement was modified to facilitate the payment of quarterly dividends from 2010 onwards.

 

  

  

  

    

   

    2013   2012   2011   2010   2009 

Dividends declared for the year

          
NV dividends          

Dividend per0.16

   1.08     0.97     0.90     0.83     0.46  

Dividend per0.16 (US Registry)

   US $1.44     US $1.25     US $1.25     US $1.13     US $0.67  
PLC dividends          

Dividend per 31/9p

   £0.91     £0.79     £0.78     £0.71     £0.41  

Dividend per 31/9p (US Registry)

   US $1.44     US $1.25     US $1.25     US $1.13     US $0.67  

Dividends paid during the year

          
NV dividends          

Dividend per0.16

   1.05     0.95     0.88     0.82     0.78  

Dividend per0.16 (US Registry)

   US $1.40     US $1.23     US $1.24     US $1.11     US $1.09  
PLC dividends          

Dividend per 31/9p

   £0.89     £0.77     £0.77     £0.71     £0.64  

Dividend per 31/9p (US Registry)

   US $1.40     US $1.23     US $1.24     US $1.11     US $1.00  

 

 

4                Form 20-FUnilever Annual Report on Form 20-F 2013


ITEM 3. KEY INFORMATIONCONTINUED

Exchange ratesEXCHANGE RATES

Unilever reports its financial results and balance sheet position in euros. Other currencies which may significantly impact our financial statements are sterling and US dollars. Average and year-end exchange rates for these two currencies for the last five years are given below.

 

  2011   2010   2009   2008   2007   2013   2012   2011   2010   2009 

Year end

                    

1 = US $

   1.294     1.337     1.433     1.417     1.471     1.378     1.318     1.294     1.337     1.433  

1 = £

   0.839     0.862     0.888     0.977     0.734     0.833     0.816     0.839     0.862     0.888  

Average

                    

1 = US $

   1.396     1.326     1.388     1.468     1.364     1.325     1.283     1.396     1.326     1.388  

1 = £

   0.869     0.858     0.891     0.788     0.682     0.849     0.811     0.869     0.858     0.891  

On 28 February 20123 March 2014 the exchange rates between euros and US dollars and between euros and sterling as published in the Financial Times in London were as follows:1 = US $1.340$1.377 and1 = £0.846.£0.824

Noon Buying Rates in New York for cable transfers in foreign currencies as certified for customs purposes by the Federal Reserve Bank of New York were as follows:

 

  2011   2010   2009   2008   2007   2013   2012   2011   2010   2009 

Year end

                    

1 = US $

   1.297     1.327     1.433     1.392     1.460     1.378     1.319     1.297     1.327     1.433  

Average

                    

1 = US $

   1.393     1.326     1.394     1.473     1.371     1.328     1.286     1.393     1.326     1.394  

High

                    

1 = US $

   1.488     1.454     1.510     1.601     1.486     1.382     1.346     1.488     1.454     1.510  

Low

                    

1 = US $

   1.293     1.196     1.255     1.245     1.290     1.277     1.206     1.293     1.196     1.255  

High and low exchange rate values for each of the last six months:

 

  September
2011
   October
2011
   November
2011
   December
2011
   January
2012
   February(a)
2012
   September
2013
   October
2013
   November
2013
   December
2013
   January
2014
   February
2014
 

High

                        

1 = US $

   1.428     1.417     1.380     1.349     1.319     1.345     1.354     1.381     1.361     1.382     1.368     1.381  

Low

                        

1 = US $

   1.345     1.328     1.324     1.293     1.268     1.307     1.312     1.349     1.336     1.355     1.350     1.351  

(a)Through 24 February 2012

Share capitalSHARE CAPITAL

The information set forth under the heading ‘Note 1915A Share capital’ on pages 101 to 102page 116 of the Group’s Annual Report and Accounts 20112013 furnished separately on 27 March 20122014 under Form 6-K is incorporated by reference.

B. Capitalisation and indebtednessCAPITALISATION AND INDEBTEDNESS

Not applicable.

C. Reasons for the offer and use of proceedsREASONS FOR THE OFFER AND USE OF PROCEEDS

Not applicable.

D. Risk factorsRISK FACTORS

Our principal risks, as described on pages 2834 to 3239 of the Group’s Annual Report and Accounts 20112013 furnished separately on 27 March 20122014 under Form 6-K are incorporated by reference. The information set forth under the heading ‘Note 16 Capital and treasuryTreasury risk management’ on pages 93120 to 99125 of the Group’s Annual Report and Accounts 20112013 furnished separately on 27 March 20122014 under Form 6-K is incorporated by reference.

Risk factorsRISK FACTORS

Our business is subject to risks and uncertainties. The risks that we regard as the most relevant to our business are set out below. There may be other risks which are unknown to Unilever or which are currently believed to be immaterial. We have undertaken certain mitigating actions that we believe help us to manage the risks identified below. However, we may not be successful in deploying some or all of these mitigating actions. If the circumstances in these risk factors occur or are not successfully mitigated, our cashflow, operating results, financial position, business and reputation could be materially adversely affected. In addition, risks and uncertainties could cause actual results to vary from those described in this document, or could impact on our ability to meet our targets or be detrimental to our profitability or reputation. This list is not intended to be exhaustive and there may be other risks and uncertainties that are not mentioned below that could impact our future performance or our ability to meet published targets. The risks and uncertainties discussed below should be read in conjunction with the Group’s consolidated financial statements and related notes and the portions of the Strategic Report of the Directorsand Governance section that are incorporated by reference from the Group’s Annual Report and Accounts 20112013 (furnished separately on 27 March 20122014 on Form 6-K) and other information included in or incorporated by reference in this Report on Form 20-F.

4UnileverAnnual Report on Form 20-F 2011


Form 20-F

 

 

Principal riskUnilever Annual Report on Form 20-F 2013   Form 20-F                5Description of risk


ITEM 3. KEY INFORMATIONCONTINUED

 

Consumer PreferencePRINCIPAL RISK

    

DESCRIPTION OF RISK

  

BRAND PREFERENCE

 

As a branded goods business, Unilever’s success depends on the value and relevance of our brands and products to consumers across the world and on our ability to innovate.innovate and remain competitive.

    

Consumer tastes, preferences and behaviours are constantly changing and Unilever’s ability to anticipate and respond to these changes and to continue to differentiate our brands and products is vital to our business.

 

We are dependent on creating innovative products that continue to meet the needs of our consumers. If we are unable to innovate effectively, Unilever’s sales or margins could be materially adversely affected.

 

PORTFOLIO MANAGEMENT

  

Competition

The activities of our competitors may adversely impact our business.

Unilever operates globally in competitive markets where other local, regional and global companies are targeting the same consumer base.

Our retail customers frequently compete with us through private label offerings.

Industry consolidation amongst our direct competitors and in the retail trade can bring about significant shifts in the competitive landscape.

Portfolio Management

 

Unilever’s strategic investment choices will determineaffect the long-term growth and profits of our business.

    

Unilever’s growth and profitability are determined by our portfolio of categories, geographies and channels and how these evolve over time. If Unilever does not make optimal strategic investment decisions then opportunities for growth and improved margin could be missed.

SUSTAINABILITY

  

Sustainability

 

The success of our business depends on finding sustainable solutions to support long-term growth.

    

Unilever’s vision to double the size of our business while reducing our environmental footprint and increasing our positive social impact will require more sustainable ways of doing business. This means reducing our environmental footprint while increasing the positive social benefits of Unilever’s activities while reducingactivities. We are dependent on the efforts of partners and various certification bodies to achieve our environmental impact.sustainability goals. There can be no assurance that sustainable business solutions will be developed and failure to do so could limit Unilever’s growth and profit potential and damage our corporate reputation.

CUSTOMER RELATIONSHIPS

  

Customer Relationships

 

Successful customer relationships are vital to our business and continued growth.

    

Maintaining strong relationships with our customers is necessary for our brands to be well presented to our consumers and available for purchase at all times.

 

The strength of our customer relationships also affects our ability to obtain pricing and secure favourable trade terms. Unilever may not be able to maintain strong relationships with customers and failure to do so could negatively impact the terms of business with the affected customers and reduce the availability of our products to consumers.

TALENT

  

People

 

A skilled workforce is essential for the continued success of our business.

    

Our ability to attract, develop and retain the right number of appropriately qualified people is critical if we are to effectively compete and grow.grow effectively.

 

This is especially true in our key emerging markets where there can be a high level of competition for a limited talent pool. The loss of management or other key personnel or the inability to identify, attract and retain qualified personnel could make it difficult to manage the business and could adversely affect operations and financial results.

SUPPLY CHAIN

  

Supply Chain

 

Our business depends on securing high qualitypurchasing materials, efficient manufacturing and the timely distribution of products to our customers.

    

Our supply chain network is exposed to potentially adverse events such as physical disruptions, environmental and industrial accidents or bankruptcy of a key supplier which could impact our ability to deliver orders to our customers.

The quality and safety of our products are of paramount importance for our brands and our reputation.

 

The cost of our products can be significantly affected by the cost of the underlying commodities and materials from which they are made. Fluctuations in these costs cannot always be passed on to the consumer through pricing.

  

SAFE AND HIGH QUALITY PRODUCTS

  

The quality and safety of our products are of paramount importance for our brands and our reputation.

The risk that raw materials are accidentally or maliciously contaminated throughout the supply chain or that other product defects occur due to human error, equipment failure or other factors cannot be excluded.

  

 

Systems and InformationSYSTEMS AND INFORMATION

    
  

 

Unilever’s operations are increasingly dependent on IT systems and the management of information.

    

We interact electronically with customers, suppliers and consumers in ways which place ever greater emphasis on the need for secure and reliable IT systems and infrastructure and careful management of the information that is in our possession.

 

ThisDisruption of our IT systems could inhibit our business operations in a number of ways, including disruption to sales, production and cash flows, ultimately impacting our results.

There is also increases thea threat from unauthorised access and misuse of sensitive information. Unilever’s information systems could be subject to unauthorised access or the mistaken disclosure of information which disrupts Unilever’s business and/or leads to loss of assets.

 

6                Form 20-F Unilever Annual Report on Form 20-F 2013


ITEM 3. KEY INFORMATIONCONTINUED

 

UnileverAnnual Report on Form 20-F 2011

  5


Form 20-F

 

Principal riskDescription of risk

Business Transformation

PRINCIPAL RISK

    

DESCRIPTION OF RISK

  

BUSINESS TRANSFORMATION

Successful execution of business transformation projects is key to delivering their intended business benefits and avoiding disruption to
other business activities.

    

Unilever is continually engaged in major change projects, including acquisitions and disposals and outsourcing, to drive continuous improvement in our business and to strengthen our portfolio and capabilities.

 

Failure to execute such transactions or change projects successfully, or performance issues with third party outsourced providers on which we are dependent, could result in under-delivery of the expected benefits. Furthermore, disruption may be caused in other parts of the business.

  

In 2011, this included several significant acquisitions (Alberto Culver, Concern Kalina), IT system implementations, the roll-out of Enterprise Support and changes to our management organisation.

EXTERNAL ECONOMIC AND POLITICAL RISKS AND NATURAL DISASTERS

  

External economic and political risks, and natural disasters

 

Unilever operates across the globe and is exposed to a range of external economic and political risks and natural disasters that may affect the execution of our strategy or the running of our operations.

    

Adverse economic conditions may result in reduced consumer demand for our products, and may affect one or more countries within a region, or may extend globally.

 

Government actions such as fiscal stimulus, changes to taxation and price controls can impact on the growth and profitability of our local operations.

 

Social and political upheavals and natural disasters can disrupt sales and operations.

 

In 2011,2013, more than half of Unilever’s turnover came from emerging markets including Brazil, India, Indonesia, Turkey, South Africa, China, Mexico and Russia. These markets offer greater growth opportunities but also expose Unilever to economic, political and social volatility in these markets.

 

Eurozone risk

Issues arising out of the sovereign debt crisis in Europe could have a material adverse effect on Unilever’s business in a number of ways.

Uncertainty, lack of confidence and any further deterioration in the situation could lead to lower growth and even recession in Europe and elsewhere.

Our operations would be affected if Eurozone countries were to leave the euro. In particular:

•      our European supply chain would face economic and operational challenges;

•      our customers and suppliers may be adversely affected, leading to heightened counterparty credit risk; and

•      our investment in the country concerned could be impaired and may be subject to exchange controls and translation risks going forward.

The likely contraction in the availability of credit from financial institutions and the impact this will have on Unilever’s liquidity risk are described under ‘Financial’ below.

  

TREASURY AND PENSIONS

  

 

6UnileverAnnual Report on Form 20-F 2011


Form 20-F

Principal riskDescription of risk

Financial

Unilever is exposed to a variety of external financial risks.risks in relation to Treasury and Pensions.

    

Changes to the relative value of currencies can fluctuate widely and could have a significant impact on business results. Further, because Unilever consolidates its financial statements in euros it is subject to exchange risks associated with the translation of the underlying net assets and earnings of its foreign subsidiaries.

 

We are also subject to the imposition of exchange controls by individual countries which could limit our ability to import materials paid in foreign currency or to remit dividends to the parent company.

 

Currency rates, along with demand cycles, can also result in significant swings in the prices of the raw materials needed to produce our goods.

 

Unilever may face liquidity risk, i.e. difficulty in meeting its obligations, associated with its financial liabilities. A material and sustained shortfall in our cash flow could undermine Unilever’s credit rating, impair investor confidence and also restrict Unilever’s ability to raise funds.

 

We are exposed to market interest rate fluctuations on our floating rate debt. Increases in benchmark interest rates could increase the interest cost of our floating rate debt and increase the cost of future borrowings.

 

In times of financial market volatility, we are also potentially exposed to counter partycounter-party risks with banks, suppliers and customers.

 

Certain businesses have defined benefit pension plans, most now closed to new employees, which are exposed to movements in interest rates, fluctuating values of underlying investments and increased life expectancy. Changes in any or all of these inputs could potentially increase the cost to Unilever of funding the schemes and therefore have an adverse impact on profitability and cash flow.

 

  

ETHICAL

  

Ethical

 

Acting in an ethical manner, consistent with the expectations of customers, consumers and other stakeholders, is essential for the protection of the reputation of Unilever and its brands.

    

Unilever’s brandbrands and reputation are valuable assets and the way in which we operate, contribute to society and engage with the world around us is always under scrutiny both internally and externally. Despite the commitment of Unilever to ethical business and the steps we take to adhere to this commitment, there remains a risk that activities or events cause us to fall short of our desired standard, resulting in damage to Unilever’s corporate reputation and business results.

 

  

LEGAL AND REGULATORY

  

Legal, Regulatory and Other

 

Compliance with laws and

regulations is an essential part of Unilever’s business operations.

    

Unilever is subject to local, regional and global laws and regulations in such diverse areas as product safety, product claims, trademarks, copyright, patents, competition, employee health and safety, the environment, corporate governance, listing and disclosure, employment and taxes.

 

Failure to comply with laws and regulations could expose Unilever to civil and/or criminal actions leading to damages, fines and criminal sanctions against us and/or our employees with possible consequences for our corporate reputation.

 

Changes to laws and regulations could have a material impact on the cost of doing business. Tax, in particular, is a complex area where laws and their interpretation are changing regularly, leading to the risk of unexpected tax exposure.

 

Unilever is also exposed to varying degrees of risk and uncertainty related to other factors including environmental, political, social and fiscal risks. All these risks could materially affect Unilever’s business. There may be other risks which are unknown to Unilever or which are currently believed to be immaterial.

  

LOGO

 

 

UnileverAnnual Report on Form 20-F 20112013

   Form 20-F                7  


Form 20-F

ItemITEM 4. Information on the CompanyINFORMATION ON THE COMPANY

A. History and development of the CompanyHISTORY AND DEVELOPMENT OF THE COMPANY

The information set forth under the following headings of the Group’s Annual Report and Accounts 20112013 furnished separately on 27 March 20122014 under Form 6-K is incorporated by reference:

‘About Unilever’ on page 42;

‘Financial Review 2011’2013’ on pages 2026 to 27;

33;

Our requirementsRequirements and compliance’ on pages 4347 to 45;

50;

‘Note 10 Property, Plant and Equipment’ on pages 111 and 112;

‘Note 21 Acquisitions and disposals’ on pages 104 to 106;131 and

132;

‘Share Capital’ on pages 51 and 52;

‘Analysis of shareholding’ on pages 51 and 52; and
‘Shareholder information’ on pages 123 to 126.

146 and 147 (other than ‘Website’).

Please refer also to ‘Financial Review 2010’2012’ within Item 5A of this report and ‘The Unilever Group’ on page 1 of this report.

B. Business overviewBUSINESS OVERVIEW

The information set forth under the following headings of the Group’s Annual Report and Accounts 20112013 furnished separately on 27 March 20122014 under Form 6-K is incorporated by reference:

‘Note 2 Segment information’ on pages 70 to 71;96 and

97;

Better service’Reaching more consumers’ on page 16.18;

‘Financial Review 2013’ on pages 26 to 33; and
‘Legal and Regulatory’ on page 39.

Please refer also to ‘Financial Review 2012’ within Item 5A of this report.

Please also refer to ‘The Unilever Group’ on page 1 of this report.

Marketing channelsMARKETING CHANNELS

Unilever’s products are generally sold through our own sales force as well as through independent brokers, agents and distributors to chain, wholesale, co-operative and independent grocery accounts, food service distributors and institutions. Products are physically distributed through a network of distribution centres, satellite warehouses, company-operated and public storage facilities, depots and other facilities.

Raw materialsRAW MATERIALS

Our products use a wide variety of raw and packaging materials which we source internationally, and which may be subject to price volatility. We sawAlthough we have seen rather more stable conditions in key commodity prices rise during the second halfmarkets in 2013 we remain watchful for further periods of 2011 and this looks set to continue into 2012.volatility in 2014.

SeasonalitySEASONALITY

Certain of our businesses, such as ice cream, are subject to significant seasonal fluctuations in sales. However, Unilever operates globally in many different markets and product categories, and no individual element of seasonality is likely to be material to the results of the Group as a whole.

Intellectual propertyINTELLECTUAL PROPERTY

We have a large portfolio of patents and trademarks, and we conduct some of our operations under licences that are based on patents or trademarks owned or controlled by others. We are not dependent on any one patent or group of patents. We use all appropriate efforts to protect our brands and technology.

CompetitionCOMPETITION

As a FMCG (fast moving consumer goods) company, we are competing with a diverse set of competitors. Some of these operate on an international scale like ourselves, while others have a more regional or local focus. Our business model centres on building brands which consumers know, trust, like and buy in conscious preference to competitors’. Our brands command loyalty and affinity and deliver superior performance.

INFORMATION PRESENTED

Unless otherwise stated, share refers to value share. The market data and competitive set classifications are taken from independent industry sources in the markets in which Unilever operates.

IRAN-RELATED REQUIRED DISCLOSURE

Unilever operates in Iran through a non-US subsidiary. In 2013, sales in Iran were significantly less than one percent of Unilever’s worldwide turnover. This non-US subsidiary had2,426 in gross revenues and679 in net profits attributable to the sale of home, personal care and food products to local pharmacies controlled by the Government of Iran or affiliated entities in 2013. This non-US subsidiary stopped making these sales in October 2013 and does not intend to resume that business. In addition, we advertised our products on television networks that are owned by the Government of Iran or affiliated entities. Income, payroll and other taxes, duties and fees (including for utilities) were payable to the Government of Iran and affiliated entities in connection with our operations. Our non-US subsidiary maintains bank accounts in Iran to facilitate our business in the country and make any required payments to the Government of Iran and affiliated entities. Our activities in Iran comply in all material respects with applicable laws and regulations, including US and other international trade sanctions, and except as described above, we plan to continue these activities.

C. Organisational structureORGANISATIONAL STRUCTURE

The information set forth under the heading ‘Principal‘Note 26 Principal group companies and non-current investments’ on pages 109134 and 110135 of the Group’s Annual Report and Accounts 20112013 furnished separately on 27 March 20122014 under Form 6-K is incorporated by reference:reference.

Please also refer to ‘The Unilever Group’ on page 1 of this report.

D. Property, plant and equipmentPROPERTY, PLANT AND EQUIPMENT

We have interests in properties in most of the countries where there are Unilever operations. However, none is material in the context of the Group as a whole. The properties are used predominantly to house production and distribution activities and as offices. There is a mixture of leased and owned property throughout the Group. We are not aware of any environmental issues affecting the properties which would have a material impact upon the Group, and there are no material encumbrances on our properties. Any difference between the market value of properties held by the Group and the amount at which they are included in the balance sheet is not significant. We believe our existing facilities are satisfactory for our current business and we currently have no plans to construct new facilities or expand or improve our current facilities in a manner that is material to the Group.

The information set forth under the following headings of the Group’s Annual Report and Accounts 20112013 furnished separately on 27 March 20122014 under Form 6-K is incorporated by reference:

‘Note 10 Property, plant and equipment’ on pages 86111 and 87;112; and

Note 26 Principal group companies and non-current investments’ on  pages 109134 and 110.

135.

ItemITEM 4A. Unresolved Staff CommentsUNRESOLVED STAFF COMMENTS

Not applicable.

 

 

8                Form 20-FUnilever Annual Report on Form 20-F 2013


ItemITEM 5. Operating and Financial Review and ProspectsOPERATING AND FINANCIAL

REVIEW AND PROSPECTS

A. Operating resultsOPERATING RESULTS

The information set forth under the following headings of the Group’s Annual Report and Accounts 20112013 furnished separately on 27 March 20122014 under Form 6-K is incorporated by reference:

‘Our key performance indicators’ on page 3;

‘Outlook’ on page 28;

34;

‘Financial review 2011’2013’ on pages 2026 to 27; and

33;

‘Currency risk’ on pages 122 to 123; and

‘Legal and Regulatory’ on page 94.

39.

FINANCIAL REVIEW 2012

8UnileverAnnual Report on Form 20-F 2011


Form 20-F

Financial Review 2010

Basis of reportingBASIS OF REPORTING

The information set forth under the heading ‘Basis of reporting’reporting and critical accounting policies’ on page 2531 of the Group’s Annual Report and Accounts 20112013 furnished separately on 27 March 20122014 under Form 6-K is incorporated by reference.

Group results and earnings per shareGROUP RESULTS AND EARNINGS PER SHARE

The following discussion summarises the results of the Group during the years 20102012 and 2009.2011. The figures quoted are in euros, at current rates of exchange, being the average rates applying in each period as applicable, unless otherwise stated. Information about exchange rates between the euro, pound sterling and US dollar is given on page 45 of this report.

In 20102012 and 2009,2011, no disposals qualified to be disclosed as discontinued operations for purposes of reporting.

 

      million
2010
     million
2009
   %
Change
 

Turnover

   44,262     39,823     11.1  

Operating profit

   6,339     5,020     26  

Underlying operating profit

   6,620     5,888     12  

Net profit

   4,598     3,659     26  

Diluted EPS

   1.46     1.17     25  
   2012   2011   % change 
    (Restated)   (Restated)      

Turnover ( million)

   51,324     46,467     10.5

Operating profit ( million)

   6,977     6,420     9

Core operating profit
( million)

   7,050     6,276     12

Profit before tax ( million)

   6,533     6,066     8

Net profit ( million)

   4,836     4,491     8

Diluted earnings per
share ()

   1.50     1.42     6

Core earnings per share ()

   1.53     1.37     12

Turnover at44.351.3 billion increased 11.1%10.5%, with 7.3% due to currency.including a positive impact from foreign exchange of 2.2% and acquisitions net of disposals of 1.1%. Underlying sales growth increased to 4.1%6.9%, driven in particular by an improvement in performance in Western Europe. Underlyingwell balanced between volume growth of 5.8% was partially offset by the full year3.4% and price effectcontributions of negative 1.6%, though3.3%. As in the fourth quarter pricing turned positive on an in-quarter basis.prior year, emerging markets grew strongly, with underlying sales up 11.4% and now representing 55% of total turnover.

Operating profit was6.37.0 billion, compared with5.06.4 billion in 2009, with2011, up 9%. The increase was driven by higher one-off profits arising from the disposal of group companiesgross profit and lower restructuring costs. Underlyingimproved cost discipline. Core operating profit increased bywas7.1 billion, up 12% tofrom6.66.3 billion with underlying operating margin increasing by 0.2% to 15.0%.in 2011, reflecting the additional impact of lower one-off credits within non-core items.

The cost of financing net borrowings was414390 million,1558 million lowerless than 2009, asin 2011. The average level of net debt increased by0.7 billion to8.9 billion, reflecting the adversefull-year impact of currency was more than offset by lowerfinancing prior year acquisitions such as Alberto Culver. The average net debt. The interest rate was 3.5% on borrowings was 4.4%debt and 2.9% on cash deposits was 1.7%.deposits. The charge for pensions financing cost was a credit of20 million compared with a net charge of164145 million, compared to95 million in 2009.2011.

The effective tax rate was 25.5%26.0% compared with 26.2%26.0% in 2009 reflecting the geographic mix of profits and the impact of the Italian frozen foods disposal. The underlying tax rate excluding the effect of restructuring, disposals and impairments was 27.1%.2011.

Net profit from joint ventures and associates, together with other income from non-current investments, contributed18791 million in 2012, compared to489189 million in the prior year which benefited from the327 million gain on disposal of the majority of the equityyear. Assets related to businesses sold in JohnsonDiversey.previous years recorded positive adjustments to fair value in 2011, whilst similar but unrelated assets were impaired in 2012.

Fully diluted earnings per share increased 25%, towere1.46. This was driven by improved underlying1.50, up 6% from1.42 in the prior year. Higher operating profit was the key driver with lower restructuring charges, lower pension costs, the favourable impact of foreign exchangeprofits from business disposals and higher profit on business disposalone-off items, partially offset by higher minority interests and pension costs and a provisionlower contribution from non-current investments. Core earnings per share were1.53, up 12% from1.37 in respect2011, reflecting the additional impact of the European Commission investigationlower one-off credits within non-core items.

EXPENSES WHICH MATERIALLY IMPACTED OPERATING PROFIT IN 2012

Absolute turnover grew by4.9 billion which translated into consumer detergents. Business disposals include the disposala core operating profit increase of the Italian frozen foods business.

LOGO

UnileverAnnual Report on Form 20-F 2011

9


774 million and an operating profit increase ofForm 20-F

Turnover by regionsOperating profit by regions

LOGO

LOGO

Asia Africa CEE

    

 million

2010

  

 million

2009

   

%

Change

 

Turnover

   17,685    14,897     18.7  

Operating profit

   2,253    1,927     16.9  

Underlying operating margin (%)

   13.4    13.9     (0.5

Underlying sales growth (%)

   7.7    7.7    

Underlying volume growth (%)

   10.2    4.1    

Effect of price changes (%)

   (2.2  3.4       

Key developments

The relative strength of most major currencies557 million due to cost increases in the region againstfollowing key areas.

Costs of raw and packaging materials and goods purchased for resale increased by1.7 billion, driven primarily by increased business volume of1.3 billion and input costs increase of1.1 billion offset by other items including material cost savings of0.7 billion during the euro meant thatyear. Additionally, distribution costs increased by184 million. Despite these increases, due to higher selling prices and benefit from customers buying products with higher margins, gross margin improved by 0.1% to 40.0% at constant exchange rates.

Staff costs increased by0.9 billion due to salary inflation, particularly in emerging markets, higher pensions charge as a result of one-off credits taken in the prior year and higher bonuses.

Advertising and promotional expenses increased by694 million as we continue to invest behind our brands.

The impact of exchange rates was significant, contributing 10.1% of the overall turnover growth.

Competitive intensity reached new heights in several key countries in 2010, with increased levels of mostly price-based competition. Against this competitive background, underlying sales growthinput costs and volume growth represent strong and fully competitive performance.

Negative price growth reflects actions taken to ensure that market position were protected against high levels of price based competition.

Underlying operating margin was down by 0.5%, with stable gross margin, but investment in advertising and promotions significantly increased.

Other key developments included the continued successful roll-out of the regional IT platform to a variety of countries.

The Americas

    

 million

2010

  

 million

2009

   

%

Change

 

Turnover

   14,562    12,850     13.3  

Operating profit

   2,169    1,843     17.7  

Underlying operating margin (%)

   16.0    16.1     (0.1

Underlying sales growth (%)

   4.0    4.2    

Underlying volume growth (%)

   4.8    2.5    

Effect of price changes (%)

   (0.7  1.6       

Key developments

The relative strength of most major currenciespromotional expenses are discussed further in the region against the euro meant thatour segmental disclosures, which also provide additional details on the impact of exchange rates was significant, contributing 9.0%brands, products and subcategories on driving top line growth.

Out of the overall turnover growth.

Market conditionsincrease of774 million in North America remained challenging throughoutcore operating profit, the year, with consumer confidence at low levels and competition proving increasingly intense. Latin American markets were generally much stronger, although levelsmajority of competition again increased, particularly in Brazil.

Underlying sales growth of 4.0%it was drivencontributed by strong performance in Latin America supported by encouraging levels of growth in North America. Strong progress in the food categories in Brazil and Mexico, and Personal Care in Argentina contributed to positive volume market share performance.(365 million) and Refreshments (235 million).

Underlying price growth was negative reflecting actions taken to ensure market positions were protected against high levelsIMPACT OF COMMODITY COSTS ON GROSS MARGIN

During 2012, the Unilever Group faced cost inflation of over1.5 billion. The Unilever Group actively mitigates the impact of cost inflation through a combination of price competition.

Underlying operatingincreases and costs savings to protect its margin. Hence, despite cost increases, the Unilever Group was able to improve its gross margin by 0.1 percentage points during 2012. Specifically gross margin was down 0.1% with investmentprotected in advertising and promotions increased from 2009.

A key development in 2010 was the announcement of an agreement to acquire the Alberto Culver business. The transaction was completed in 2011.

Western Europe

    

 million

2010

  

 million

2009

  

%

Change

 

Turnover

   12,015    12,076    (0.5

Operating profit

   1,917    1,250    53.4  

Underlying operating margin (%)

   16.1    14.4    1.7  

Underlying sales growth (%)

   (0.4  (1.9 

Underlying volume growth (%)

   1.4    (0.1 

Effect of price changes (%)

   (1.8  (1.8    

Key developments

Competition continued to be intense in most parts3 out of the region throughout 2010.4 categories. In some marketsour Foods category the impact of high vegetable oil prices was not fully recovered as described below. Petrochemicals materially affect our Home Care category, where we have protected our margins. There are no other commodities that have a material impact.

Part of our commodity risk, principally vegetable oils and categories levelspetrochemicals, is hedged using a combination of price promotional activity accelerated towards the end of the year. Against this competitive background, underlying sales growth of negative 0.4% represented robust performance.physical contracts as well as derivatives (futures and options).

Underlying price growth was negative 1.8%, reflecting actions taken to ensure market positions were protected against high levels of price competition.

The major factor behind the significant increase in operating profit was the profit on disposal of the Italian frozen foods business. Underlying operating margin was up sharply by 1.7% reflecting success of cost saving initiatives which reduced indirect costs significantly.

In other developments, the acquisition of the Sara Lee Personal Care business was completed in the fourth quarter. Other smaller bolt-on acquisitions were announced during the year in ice cream.

 

 

 

10UnileverAnnual Report on Form 20-F 20112013Form 20-F                9


ITEM 5. OPERATING AND FINANCIAL

REVIEW AND PROSPECTSForm 20-FCONTINUED

LOGO

PERSONAL CARE

    million    million   % 
   2012   2011   Change 
    (Restated)   (Restated)      

Turnover

   18,097     15,471     17.0  

Operating profit

   2,925     2,533     15.5  

Core operating profit

   3,085     2,720     13.4  

Core operating margin (%)

   17.0     17.6     (0.6

Underlying sales growth (%)

   10.0     8.2    

Underlying volume growth (%)

   6.5     4.2    

Effect of price changes (%)

   3.3     3.8       

KEY DEVELOPMENTS

Personal Care turned in yet another year of strong performance with turnover growth of 17%. Underlying sales growth of 10.0% was driven by both underlying volume growth of 6.5% and a positive price contribution of 3.3%. This was spurred by innovations like Dove Nutrium Moisture and the roll-out of our brands in new markets like TRESemmé in Brazil and complemented by a strong contribution of the recently acquired brands from the Kalina acquisition.
Core operating profit at3.1 billion was higher by365 million over the prior year. Out of the365 million, turnover growth contributed465 million which was offset by100 million from a reduction in core operating margin by 0.6 percentage points primarily due to continued investments in building beauty capabilities and infrastructure, while gross margins remained stable.

REFRESHMENT

    million    million   % 
   2012   2011   Change 
    (Restated)   (Restated)      

Turnover

   9,726     8,804     10.5  

Operating profit

   908     720     26.1  

Core operating profit

   908     673     34.9  

Core operating margin (%)

   9.3     7.7     1.6  

Underlying sales growth (%)

   6.3     4.9    

Underlying volume growth (%)

   2.4     1.4    

Effect of price changes (%)

   3.9     3.4       

KEY DEVELOPMENTS

Refreshment performance improved in growth momentum and profitability. Turnover grew by a strong 10.5% with underlying sales growth of 6.3% reflecting good contribution from underlying volume growth of 2.4% and underlying price growth of 3.9%. In ice cream, growth momentum was driven by powerful performance in Latin America, Asia, North America and Europe and benefited from innovation behind our global brands such as Magnum, which is now a brand with sales in excess of1 billion. In tea, innovation improved growth momentum in particular in emerging markets, such as Russia, Arabia and India.
Core operating profit at908 million improved by235 million over the previous year. Out of the235 million, turnover growth contributed70 million while improvement in core operating margin by 1.6 percentage points contributed165 million. Core operating margin improvement was driven primarily by higher gross margin arising from a strong savings programme and cost discipline.

FOODS

    million   million  % 
   2012  2011  Change 
    (Restated)  (Restated)     

Turnover

   14,444    13,986    3.3  

Operating profit

   2,601    2,688    (3.2

Core operating profit

   2,528    2,444    3.4  

Core operating margin (%)

   17.5    17.5      

Underlying sales growth (%)

   1.8    4.9   

Underlying volume growth (%)

   (0.9  (1.2 

Effect of price changes (%)

   2.7    6.2      

KEY DEVELOPMENTS

Foods turnover grew by 3.3% during the year. Underlying sales growth in Foods was 1.8%. Underlying volume growth was (0.9)%, continuing to reflect the impact of a contracting spreads market and the price rises we took in 2011 to counter significant increases in input prices. Growth was supported by the roll-out of innovations such as Knorr jelly bouillon and Knorr baking bags, as well as solid results delivered by our Food Solutions business.
Core operating profit at2.5 billion increased by84 million over previous year. This increase was entirely due to increase in turnover. Core operating margin was in line with previous year as the impact of higher commodity costs on gross margins was offset by improved cost discipline and savings delivery.

HOME CARE

    million    million   % 
   2012   2011   Change 
    (Restated)   (Restated)      

Turnover

   9,057     8,206     10.4  

Operating profit

   543     479     13.4  

Core operating profit

   529     439     20.5  

Core operating margin (%)

   5.8     5.4     0.4  

Underlying sales growth (%)

   10.3     8.1    

Underlying volume growth (%)

   6.2     2.2    

Effect of price changes (%)

   3.9     5.8       

KEY DEVELOPMENTS

Home Care delivered a strong performance with turnover growth of 10.4% driven by underlying sales growth of 10.3%, balanced between volume growth of 6.2% and price changes contributing 3.9%. We improved our market position in highly competitive markets such as the UK, France, China and South Africa on the back of continued innovation and continuing success of our brands like Omo and Comfort. Household care growth was equally supported by the roll-out of new and improved products, driving strong growth momentum for our global brands Domestos, Cif and Sunlight.
Core operating profit at529 million improved by90 million over previous year. Out of the90 million, turnover growth contributed45 million, while improvement in core operating margin by 0.4 percentage points contributed45 million primarily due to better gross margins benefiting from successful new business models.

 

 

10                Form 20-FUnilever Annual Report on Form 20-F 2013


ITEM 5. OPERATING AND FINANCIAL

REVIEW AND PROSPECTSCONTINUED

Non-GAAP measuresNON-GAAP MEASURES

The information set forth under the heading ‘Non-GAAP measures’ on pages 2632 and 2733 of the Group’s Annual Report and Accounts 20112013 furnished separately on 27 March 20122014 under Form 6-K is incorporated by reference.

Underlying sales growthUNDERLYING SALES GROWTH (USG)

The reconciliation of USG to changes in the GAAP measure turnover is as follows:

Total GroupTOTAL GROUP

    2010
vs 2009
  2009
vs 2008
 

Underlying sales growth (%)

   4.1    3.5  

Effect of acquisitions (%)

   0.3    0.6  

Effect of disposals (%)

   (0.8  (3.0

Effect of exchange rates (%)

   7.3    (2.7

Turnover growth (%)

   11.1    (1.7

Asia Africa CEE

    2010
vs 2009
  2009
vs 2008
 

Underlying sales growth (%)

   7.7    7.7  

Effect of acquisitions (%)

   0.2    0.5  

Effect of disposals (%)

   (0.1  (0.9

Effect of exchange rates (%)

   10.1    (4.0

Turnover growth (%)

   18.7    2.9  

The Americas

    2010
vs 2009
  2009
vs 2008
 

Underlying sales growth (%)

   4.0    4.2  

Effect of acquisitions (%)

   0.3    0.7  

Effect of disposals (%)

   (0.4  (6.0

Effect of exchange rates (%)

   9.0    (1.2

Turnover growth (%)

   13.3    (2.6

Western Europe

  2010
vs 2009
 2009
vs 2008
   

2012

vs 2011

 

2011

vs 2010

 

Underlying sales growth (%)

   (0.4  (1.9   6.9   6.5  

Effect of acquisitions (%)

   0.5    0.5     1.8   2.7  

Effect of disposals (%)

   (2.0  (2.2   (0.7 (1.5

Effect of exchange rates (%)

   1.4    (2.5   2.2   (2.5

Turnover growth (%)

   (0.5  (6.0   10.5   5.0  
PERSONAL CARE   
  

2012

vs 2011

 

2011

vs 2010

 

Underlying sales growth (%)

   10.0   8.2  

Effect of acquisitions (%)

   4.4   7.3  

Effect of disposals (%)

   (0.5 (0.2

Effect of exchange rates (%)

   2.3   (2.9

Turnover growth (%)

   17.0   12.4  
FOODS   
  

2012

vs 2011

 

2011

vs 2010

 

Underlying sales growth (%)

   1.8   4.9  

Effect of acquisitions (%)

      0.2  

Effect of disposals (%)

   (1.5 (4.3

Effect of exchange rates (%)

   3.0   (1.9

Turnover growth (%)

   3.3   (1.3
REFRESHMENT   
  

2012

vs 2011

 

2011

vs 2010

 

Underlying sales growth (%)

   6.3   4.9  

Effect of acquisitions (%)

   0.8   0.3  

Effect of disposals (%)

   0.7   (0.3

Effect of exchange rates (%)

   2.4   (2.5

Turnover growth (%)

   10.5   2.3  
HOME CARE   
  

2012

vs 2011

 

2011

vs 2010

 

Underlying sales growth (%)

   10.3   8.1  

Effect of acquisitions (%)

   0.6   1.3  

Effect of disposals (%)

   (1.1 0.1  

Effect of exchange rates (%)

   0.6   (3.1

Turnover growth (%)

   10.4   6.2  

Underlying volume growthUNDERLYING VOLUME GROWTH (UVG)

Underlying Volume Growth or “UVG” is part of USG and means, for the applicable period, the increase in turnover in such period calculated as the sum of (1) the increase in turnover attributable to the volume growth is underlying sales growth after eliminatingof products sold; and (2) the increase in turnover attributable to the composition of products sold during such period. UVG therefore excludes any impact of price changes.to USG due to changes in prices. The relationship between the two measures is set out below:

 

  2010
vs 2009
 2009
vs 2008
   

2012

vs 2011

   

2011

vs 2010

 

Underlying volume growth (%)

   5.8    2.3     3.4     1.6  

Effect of price changes (%)

   (1.6  1.2     3.3     4.8  

Underlying sales growth (%)

   4.1    3.5     6.9     6.5  

Underlying operating marginFREE CASH FLOW (FCF)

The reconciliation of underlying operating profit to operating profit is as follows:

      million
2010
    million
2009
 

Operating profit

   6,339    5,020  

Restructuring costs

   589    897  

Business disposals

   (468  (4

Impairments and other one-off items

   160    (25

Underlying operating profit

   6,620    5,888  

Turnover

   44,262    39,823  

Operating margin (%)

   14.3    12.6  

Underlying operating margin (%)

   15.0    14.8  

FreeWithin the Unilever Group, free cash flow (FCF)

FCF represents the cash generation from the operation and financing of the business. The movement in FCF measures our progress against the commitment to deliver strong cash flows. FCF is not useddefined as a liquidity measure within Unilever.

FCF includes the cash flow from Group operating activities, less income taxtaxes paid, net capital expenditure,expenditures and net interest payments and preference dividends paid. It does not represent residual cash flows entirely available for discretionary purposes; for example, the repayment of principal amounts borrowed is not deducted from FCF. Free cash flow reflects an additional way of viewing our liquidity that we believe is useful to investors because it represents cash flows that could be used for distribution of dividends, repayment of debt or to fund our strategic initiatives, including acquisitions, if any.

The reconciliation of FCF to net profit is as follows:

 

                                      
    million
2010
   million
2009
   

million

2012

(Restated)

 

million

2011

(Restated)

 

Net profit

   4,598    3,659     4,836    4,491  

Taxation

   1,534    1,257     1,697   1,575  

Share of net profit of joint ventures/associates and other income from non-current investments

   (187  (489   (91 (189

Net finance cost

   394    593     535   543  

Depreciation, amortisation and impairment

   993    1,032     1,199   1,029  

Changes in working capital

   169    1,701     822   (177

Pensions and similar obligations less payments

   (472  (1,028   (369 (540

Provisions less payments

   72    (258   (43 9  

Elimination of (profits)/losses on disposals

   (476  13     (236 (215

Non-cash charge for share-based compensation

   144    195     153   105  

Other adjustments

   49    58     13   8  

Cash flow from operating activities

   6,818    6,733     8,516    6,639  

Income tax paid

   (1,328  (959   (1,680 (1,187

Net capital expenditure

   (1,701  (1,258   (2,143 (1,974

Net interest and preference dividends paid

   (424  (444   (360 (403

Free cash flow

   3,365    4,072     4,333    3,075  

Net cash flow (used in)/from investing activities

   (755 (4,467

Net cash flow (used in)/from financing activities

   (6,622 411  

Net debtCORE OPERATING MARGIN AND CORE OPERATING PROFIT

Core operating profit and core operating margin mean operating profit and operating margin, respectively, before the impact of business disposals, acquisition and disposal related costs, impairments and other one-off items, which we collectively term non-core items, on the grounds that the incidence of these items is uneven between reporting periods.

The reconciliation of core operating profit to operating profit is as follows:

                                      
    

million

2012

(Restated)

  

million

2011

(Restated)

 

Operating profit

   6,977    6,420  

Acquisition and disposal related costs

   190    234  

(Gain)/loss on disposal of group companies

   (117  (221

Impairments and other one-off items

       (157

Core operating profit

   7,050    6,276  

Turnover

   51,324    46,467  

Operating margin (%)

   13.6    13.8  

Core operating margin (%)

   13.7    13.5  

Unilever Annual Report on Form 20-F 2013Form 20-F                11


ITEM 5. OPERATING AND FINANCIAL

REVIEW AND PROSPECTSCONTINUED

NET DEBT

The reconciliation of net debt to the GAAP measure total financial liabilities is as follows:

 

      million
2010
    million
2009
 

Total financial liabilities

   (9,534  (9,971
   

Financial liabilities due within one year

   (2,276  (2,279

Financial liabilities due after one year

   (7,258  (7,692

Cash and cash equivalents as per balance sheet

   2,316    2,642  
   

Cash and cash equivalents as per cash flow statement

   1,966    2,397  

Bank overdrafts deducted therein

   350    245  
   

Financial assets

   550    972  

Net debt

   (6,668  (6,357

     million
2012
   million
2011
 

Total financial liabilities

   (10,221  (13,718
   

Financial liabilities due within one year

   (2,656  (5,840

Financial liabilities due after one year

   (7,565  (7,878

Cash and cash equivalents as per balance sheet

   2,465    3,484  
   

Cash and cash equivalents as per cash flow statement

   2,217    2,978  

Bank overdrafts deducted therein

   248    506  

Financial assets

   401    1,453  

Net debt

   (7,355  (8,781

UnileverAnnual Report on Form 20-FACQUISITIONS AND DISPOSALS – 2011

11


Form 20-F

Acquisitions and disposals - 2009

On 2 April 2009 weMarch 2011 the Group announced a binding agreement to sell the completion of ourglobal Sanex business to Colgate-Palmolive for672 million. The deal was completed on 20 June 2011.

On 10 May 2011 the Group completed the purchase of the global TIGI professional hair product business and its supporting advanced education academies. TIGI’s major brands include Bed Head, Catwalk and S-Factor. Turnover100% of the business worldwide in 2008 was around US $250 million. The cashAlberto Culver at a consideration of US $411.52,689 million was made on a cash and debt free basis. In addition, further limited payments related to future growth may be made contingent upon meeting certain thresholds.in cash.

On 3 July 2009 we6 December 2011 the Group completed the acquisition of Baltimor Holding ZAO’s sauces business in Russia. The acquisition includes the ketchup, mayonnaise and tomato paste business under the Baltimor, Pomo d’Oro and Vostochniy Gourmand brands – and a production facility at Kolpino, near St Petersburg.

On 24 November 2009 we completed the sale of our interest in JohnsonDiversey. The cash consideration received was US $390 million, which included both the originally announced cash consideration of US $158 million plus the proceeds82% of the saleoutstanding shares of the 10.5% senior notes in JohnsonDiversey Holdings, Inc. We retain a 4% interest in JohnsonDiversey in the formConcern Kalina, one of warrants.Russia’s leading local personal care companies.

B. LIQUIDITY AND CAPITAL RESOURCES

B. Liquidity and capital resources

(i) Information regarding the Group’s liquidity(I) INFORMATION REGARDING THE GROUP’S LIQUIDITY

The information set forth under the following headings of the Group’s Annual Report and Accounts 20112013 furnished separately on 27 March 20122014 under Form 6-K is incorporated by reference:

‘Finance and liquidity’ and ‘Treasury’‘Financial Instruments and Risk’ on pages 2430 and 31;

‘Management of market risk’ on pages 122 to 25;

124;

MarketManagement of liquidity risk’ on page 94;

120 to 122;

‘Liquidity risk’ on page 95;

‘Capital management’and funding’ on page 93;

pages 115 to 116;

‘Going concern’ on page 61;

85;

‘Cash flow’ on page 25;

29;

‘Consolidated cash flow statement’ on page 67; and

93;

Note 15 Financial assets and liabilities’ on page 118 and 119;

‘Financial assets’ on page 126 and 127; and
‘Note 17 Investment and return’ on pages 90125 to 92.

126.

(ii) Information regarding the type of financial instruments used, the maturity profile of debt, currency and interest rate structure(II) INFORMATION REGARDING THE TYPE OF FINANCIAL INSTRUMENTS USED, THE MATURITY PROFILE OF DEBT, CURRENCY AND INTEREST RATE STRUCTURE

The information set forth under the following headings of the Group’s Annual Report and Accounts 20112013 furnished separately on 27 March 20122014 under Form 6-K is incorporated by reference:

‘Note 15 Capital and funding’ on pages 115 and 116;

Financial assets and liabilities’ on pages 90 to 92;

118 and 119;

‘Financial assets’ on pages 126 and 127;

‘Note 16 Capital and treasuryTreasury risk management’ on pages 93120 to 99;125;
‘Note 17 Investment and

return’ on pages 126 and 127;

Treasury’Note 18 Financial instruments fair value risk’ on pages 127 to 129;

‘Financial instruments and risk’ on page 25.

31; and
‘Our risk appetite and approach to risk management’ on page 34.

(iii) Information regarding the Group’s material commitments for capital expenditure(III) INFORMATION REGARDING THE GROUP’S MATERIAL COMMITMENTS FOR CAPITAL EXPENDITURE

The information set forth under the following headings of the Group’s Annual Report and Accounts 20112013 furnished separately on 27 March 20122014 under Form 6-K is incorporated by reference:

‘Note 20 Commitments and contingent liabilities’ on pages 102129 to 103;131; and

‘Note 10 Property, plant and equipment’ on pages 86111 and 87.

112.

C. Research and development, patents and licences, etcRESEARCH AND DEVELOPMENT, PATENTS AND LICENCES, ETC.

The information set forth under the heading ‘Bigger, better, faster innovation’‘Fewer, Bigger Innovations’ on pages 10 to 13page 12 and ‘Innovating Together’ on page 21 and ‘Note 3 Gross profit and operating costs’ (first table) on page 7298 of the Group’s Annual Report and Accounts 20112013 furnished separately on 27 March 20122014 under Form 6-K is incorporated by reference.

D. Trend informationTREND INFORMATION

Please refer also to Item 3D ‘Risk Factors’factors’ on pages 45 to 7 of this report.

The information set forth under the following headings of the Group’s Annual Report and Accounts 20112013 furnished separately on 27 March 20122014 under Form 6-K is incorporated by reference:

‘Financial review 2011’2013’ on pages 2026 to 27;33; and

‘Outlook’ on page 28.

34.

Please refer also to ‘Financial Review 2010’review 2012’ within Item 5A of this report on pages 89 to 12.

E. Off-balance sheet arrangementsOFF-BALANCE SHEET ARRANGEMENTS

The information set forth under the following headings of the Group’s Annual Report and Accounts 20112013 furnished separately on 27 March 20122014 under Form 6-K is incorporated by reference:

‘Off-balance sheet arrangements’ on page 24;

‘Note 16 Capital and treasuryTreasury risk management’ on pages 93120 to 99;125;

‘Note 18 Financial instruments fair value risk’ on pages 127 to 129; and

‘Note 20 Commitments and contingent liabilities’ on pages 102129 to 103.

131.

F. Tabular disclosure of contractual obligationsTABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONS

The information set forth under the heading ‘Contractual obligations at 31 December 2011’2013’ on page 2431 of the Group’s Annual Report and Accounts 20112013 furnished separately on 27 March 20122014 under Form 6-K is incorporated by reference.

G. Safe harbourSAFE HARBOUR

This document may contain forward-looking statements, including ‘forward-looking statements’ within the meaning of the United States Private Securities Litigation Reform Act of 1995. Words such as ‘will’, ‘aim’, ‘expects’, ‘anticipates’, ‘intends’, ‘looks’, ‘believes’, ‘vision’, or the negative of these terms and other similar expressions of future performance or results, and their negatives, are intended to identify such forward-looking statements. These forward-looking statements are based upon current expectations and assumptions regarding anticipated developments and other factors affecting the Group. They are not historical facts, nor are they guarantees of future performance.

Because these forward-looking statements involve risks and uncertainties, there are important factors that could cause actual results to differ materially from those expressed or implied by these forward-looking statements, including, among others, competitive pricingstatements. Among other risks and activities, economic slowdown, industry consolidation, accessuncertainties, the material or principal factors which could cause actual results to credit markets,differ materially are: Unilever’s global brands not meeting consumer preferences; Unilever’s ability to innovate and remain competitive; Unilever’s investment choices in its portfolio management; inability to find sustainable solutions to support long-term growth; customer relationships; the recruitment levels, reputational risks, commodity prices, continued availabilityand retention of talented employees; disruptions in our supply chain; the cost of raw materials prioritisationand commodities; the production of projects, consumption levels, costs, the abilitysafe and high quality products; secure and reliable IT infrastructure; successful execution of acquisitions, divestitures and business transformation projects; economic and political risks and natural disasters; financial risks; failure to maintainmeet high ethical standards; and manage key customer relationshipsmanaging regulatory, tax and supply chain sources, consumer demands, currency values,legal matters.

 

 

 

12                Form 20-F UnileverAnnual Report on Form 20-F 20112013


ITEM 5. OPERATING AND FINANCIAL

REVIEW AND PROSPECTSForm 20-FCONTINUED

 

interest rates, the ability to integrate acquisitions and complete planned divestitures, finalizing fair values related to prior acquisitions, the ability to complete planned restructuring activities, physical risks, environmental risks, the ability to manage sustainability, regulatory, tax and legal matters and resolve pending matters within current estimates, legislative, fiscal and regulatory developments, political, economic and social conditions in the geographic markets where the Group operates, completion of the Sustainable Development Report 2011 and new or changed priorities of the Boards. Further details of potential risks and uncertainties affecting the Group are described in the Group’s filings with the London Stock Exchange, Euronext Amsterdam and the US Securities and Exchange Commission, including in the Group’s Annual Report on Form 20-F for the year ended 31 December 20112013 and the Annual Report and Accounts 2011.2013. These forward-looking statements speak only as of the date of this document. Except as required by any applicable law or regulation, the Group expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Group’s expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.

ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

A. DIRECTORS AND SENIOR MANAGEMENT

Item 6. Directors, Senior Management and Employees

A. Directors and senior management

(i) Name, experience and functions(I) NAME, EXPERIENCE AND FUNCTIONS

The information set forth under the following headings of the Group’s Annual Report and Accounts 20112013 furnished separately on 27 March 20122014 under Form 6-K is incorporated by reference:

‘Unilever Leadership Executive’ on pages 34 and 35;

‘Non-Executive Directors’Executive (ULE)’ on page 34;

41;

‘Board of Directors’ on pages 34;page 40; and

Our Directors’ and ‘Our Committees’The Boards’ on pages 3842 to 40.

45.

(ii) Activities outside the issuing company(II) ACTIVITIES OUTSIDE THE ISSUING COMPANY

The information set forth under the headings ‘Board of Directors’, Non-Executive Directors’ and ‘Unilever Leadership Executive (ULE)’ on pages 3440 and 3541 of the Group’s Annual Report and Accounts 20112013 furnished separately on 27 March 20122014 under Form 6-K is incorporated by reference.

(iii) Age(III) AGE

The information set forth under the headings ‘Board of Directors’, Non-Executive Directors’ and ‘Unilever Leadership Executive (ULE)’ on pages 3440 and 3541 of the Group’s Annual Report and Accounts 20112013 furnished separately on 27 March 20122014 under Form 6-K is incorporated by reference.

(iv) Family relationship(IV) FAMILY RELATIONSHIP

The information set forth under the heading ‘Executive Directors’ (first‘Independence and Conflicts’ (third paragraph) on page 3945 of the Group’s Annual Report and Accounts 20112013 furnished separately on 27 March 20122014 under Form 6-K is incorporated by reference.

(v) Other arrangements(V) OTHER ARRANGEMENTS

The information set forth under the following headings of the Group’s Annual Report and Accounts 20112013 furnished separately on 27 March 20122014 under Form 6-K is incorporated by reference:

Executive Directors’ (first paragraph)Independence and Conflicts’ (second and third paragraphs) on page 39; and

45.

‘Non-Executive Directors – Independence’ on page 38.

B. CompensationCOMPENSATION

The information set forth under the following headings of the Group’s Annual Report and Accounts 20112013 furnished separately on 27 March 20122014 under Form 6-K is incorporated by reference:

Remuneration policy for new hires’ on page 69;

Remuneration policy description on pages 62 to 72;
‘Elements of remuneration’ on pages 79 and 80;
‘Single Figure of Remuneration and Implementation of the Remuneration Policy in 2013 for Executive Directors’ on pages 5073 to 51;

79;

The supporting policies’Single Figure of Remuneration in 2013 for Non-Executive Directors (Audited)’ on page 51;

81;

‘Our remuneration practices’ on pages 52 to 54;

‘Proposed changes from 2012 onwards’ on page 55;

‘Executive Directors’ remuneration in 2011’ on pages 55 to 57;

‘Non-Executive Directors’ on page 58 to 59;

‘Note 4C Share-based compensation plans’ on pages 79104 and 80;

105;

‘Note 4A Staff and management costs – Key management compensation’ on page 73;99; and

‘Note 4B Pensions and similar obligations’ on pages 7399 to 78.

104.

C. Board practicesBOARD PRACTICES

The information set forth under the following headings of the Group’s Annual Report and Accounts 20112013 furnished separately on 27 March 20122014 under Form 6-K is incorporated by reference:

‘Board of Directors’ and ‘Unilever Leadership Executive (ULE)’ on pages 3440 and 35;

41;

‘Appointment of Directors’ on page 37;

43;

‘Executive Directors’ on page 38 and 39;

42;

‘Non-Executive Directors’ on page 38;

42;

OurBoard Committees’ on pages 39 and 40;

page 45;

‘Report of the Audit Committee’ on pages 4653 to 55; and 47; and

‘Directors’ Remuneration Report’ on pages 5060 to 59.

83.

D. EmployeesEMPLOYEES

The information set forth under the following headings of the Group’s Annual Report and Accounts 20112013 furnished separately on 27 March 20122014 under Form 6-K is incorporated by reference:

‘Note’Note 4A Staff and management costs’costs – Average number of employees during the yearyear’ on page 73;99.

The average number of employees during 2013 included 8,744 seasonal and

‘Employee number’ on page 7.

25,764 plantation workers. We believe our relationship with our employees and any labour unions of which they may be part is satisfactory in all material respects.

E. Share ownershipSHARE OWNERSHIP

The information set forth under the following headings of the Group’s Annual Report and Accounts 20112013 furnished separately on 27 March 20122014 under Form 6-K is incorporated by reference:

Our remuneration practices’Single Figure of Remuneration and Implementation of the Remuneration Policy in 2013 for Executive Directors’ on pages 5273 to 54;

79;

Executive Directors’ remuneration in 2011’Elements of Remuneration’ on pages 55 to 58;

79 and 80;

Single Figure of Remuneration in 2013 for Non-Executive Directors’Directors (Audited)’ on page 58 to 59;81; and

‘Note 4C Share-based compensation plans’ on pages 79104 and 80.

105.
 

 

 

UnileverAnnual Report on Form 20-F 20112013

   Form 20-F                13  


Form 20-F

ItemITEM 7. Major Shareholders and Related Party TransactionsMAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

A. Major shareholdersMAJOR SHAREHOLDERS

The information set forth under the following headings of the Group’s Annual Report and Accounts 20112013 furnished separately on 27 March 20122014 under Form 6-K is incorporated by reference:

FoundationMargarine Union (1930) Limited: Conversion Rights’ and ‘Foundation Unilever NVN.V. Trust office’ on pages 46 and ‘Margarine Union (1930) Limited’ on page 4147; and 42; and

‘Analysis of shareholding’ on page 124.

pages 51 and 52.

The principal trading markets upon which Unilever shares are listed are Euronext Amsterdam for NV ordinary and preference shares and the depositary receipts of these NV ordinary and preference shares, and the London Stock Exchange for PLC ordinary shares. NV ordinary shares mainly trade in the form of depositary receipts for shares.

In the United States, NV New York Registry Shares and PLC American Depositary Receipts are traded on the New York Stock Exchange. Citibank, N.A. acts for NV and PLC as issuer, transfer agent and, in respect of the PLC American Depositary Receipts, depositary.

There have not been any significant trading suspensions in the past three years.

At 28 February 20123 March 2014 there were 5,4995,218 registered holders of NV New York Registry Shares and 9771,010 registered holders of PLC American Depositary Receipts in the United States. We estimate that approximately 17%12% of NV’s ordinary shares were held in the United States (approximately 16%13% in 2010)2012), while most holders of PLC ordinary shares are registered in the United Kingdom – approximately 98% in 20112013 and 99% in 2010.2012.

NV and PLC are separate companies with separate stock exchange listings and different shareholders. Shareholders cannot convert or exchange the shares of one for shares of the other and the relative share prices on the various markets can, and do, fluctuate. Each NV ordinary share represents the same underlying economic interest in the Unilever Group as each PLC ordinary share (save for exchange rate fluctuations).

If you are a shareholder of NV, you have an interest in a Dutch legal entity, your dividends will be paid in euros (converted into US dollars if you have shares registered in the United States) and you may be subject to tax in the Netherlands. If you are a shareholder of PLC, your interest is in a UK legal entity, your dividends will be paid in sterling (converted into US dollars if you have American Depositary Receipts) and you may be subject to UK tax. Nevertheless, the Equalisation Agreement means that as a shareholder of either company you effectively have an interest in the whole of Unilever. You have largely equal rights over our combined net profit and capital reserves as shown in the consolidated accounts.

The information set forth under the heading ‘Equalisation Agreement’ on page 4247 of the Group’s Annual Report and Accounts 20112013 furnished separately on 27 March 20122014 under Form 6-K is incorporated by reference.

B. Related party transactionsRELATED PARTY TRANSACTIONS

The information set forth under the heading ‘Note 23 Related party transactions’ on page 107133 of the Group’s Annual Report and Accounts 20112013 furnished separately on 27 March 20122014 under Form 6-K is incorporated by reference.

Transactions with related parties are conducted in accordance with agreed transfer pricing policies and include sales to joint ventures and associates. Other than those disclosed in the Group’s Annual Report and Accounts (and incorporated herein as above), there were no related party transactions that were material to the Group or to the related parties concerned that are required to be reported in 20112013 or the two preceding years.

C. Interest of experts and counselINTEREST OF EXPERTS AND COUNSEL

Not applicable.

14UnileverAnnual Report on Form 20-F 2011


Form 20-F

ItemITEM 8. Financial InformationFINANCIAL INFORMATION

A. Consolidated statements and other financial informationCONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION

Please refer also to Item 18 ‘Financial Statements’ on page 2422 to 3028 of this report.

The information set forth under the following headings of the Group’s Annual Report and Accounts 20112013 furnished separately on 27 March 20122014 under Form 6-K is incorporated by reference:

‘Financial statements’ on page 6185 and pages 6490 to 110;

135;

‘Legal proceedings’ on page 103;131; and

‘Financial calendar’ on page 125.

146.

Also see ‘Dividend record’ on page 34 of this report.

B. Significant changesSIGNIFICANT CHANGES

The information set forth in ‘Note 25 Events after the balance sheet date’ on page 108133 of the Group’s Annual Report and Accounts 2013 furnished separately on 27 March 20122014 under Form 6-K is incorporated by reference.

14                Form 20-FUnilever Annual Report on Form 20-F 2013


ItemITEM 9. The Offer and ListingTHE OFFER AND LISTING

A. Offer and listing detailsOFFER AND LISTING DETAILS

Please refer to information given on page 14 under Item 7A ‘Major7A’ Major shareholders’.

Share prices atSHARE PRICES AT 31 December 2011DECEMBER 2013

The share prices of the ordinary shares at the end of the year were as follows:

 

NV per0.16 ordinary share in Amsterdam

  26.5729.28
  

NV per0.16 ordinary share in New York

  US $34.37
$40.23  

PLC per 31/9p ordinary share in London

  £21.63
 £24.82  

PLC per 31/9p ordinary share in New York

US $33.52

Monthly high and low prices for the most recent six months

         September
2011
   October
2011
   November
2011
   December
2011
   January
2012
   February(a)
2012
 

 

NV per0.16 ordinary share in Amsterdam (in)

   High     23.90     24.97     25.30     26.58     27.11     25.89  
    Low     22.08     23.36     23.32     24.75     25.20     24.78  

 

NV per0.16 ordinary share in New York (in US $)

   High     34.01     35.06     34.59     34.41     34.92     34.21  
    Low     30.39     30.82     31.47     32.53     32.09     32.85  

 

PLC per 31/9p ordinary share in London (in £)

   High     20.81     21.14     21.37     21.73     21.89     20.90  
    Low     19.22     19.86     19.77     20.67     20.41     19.94  

 

PLC per 31/9p ordinary share in New York (in US $)

   High     33.68     34.16     33.95     33.58     34.02     33.07  
    Low     30.27     30.56     31.14     32.02     31.50     31.85  

(a)Through 24 February 2012.

LOGO

UnileverAnnual Report on Form 20-F 2011

   15US $41.20  


Form 20-FMONTHLY HIGH AND LOW PRICES FOR THE MOST RECENT SIX MONTHS

 

         September
2013
   October
2013
   November
2013
   December
2013
   January
2014
   February
2014
 

NV per0.16 ordinary share in Amsterdam (in)

   High       30.09     29.24     29.39     29.28     29.94     28.92  
    Low       28.25     27.50     28.64     27.72     27.71     27.16  

NV per0.16 ordinary share in New York (in US $)

   High       40.49     40.28     39.65     40.25     40.55     39.57  
    Low       37.28     37.27     38.38     38.26     37.34     36.72  

PLC per 31/9p ordinary share in London (in £)

   High       25.88     25.48     25.35     24.82     25.05     24.74  
    Low       24.30     23.19     24.59     23.68     23.39     23.06  

PLC per 31/9p ordinary share in New York (in US $)

   High       41.47     41.06     40.77     41.20     41.71     41.34  
    Low       38.06     37.67     39.65     39.09     38.61     37.85  

Quarterly high and low prices for 2011 and 2010QUARTERLY HIGH AND LOW PRICES FOR 2013 AND 2012

 

         1st
Quarter
2011
   2nd
Quarter
2011
   3rd
Quarter
2011
   4th
Quarter
2011
 

 

NV per0.16 ordinary share in Amsterdam (in)

   High     23.77     23.10     23.90     26.58  
    Low     21.00     22.05     21.65     23.32  

 

NV per0.16 ordinary share in New York (in US $)

   High     31.72     33.50     34.24     35.06  
    Low     29.07     31.35     30.39     30.82  

 

PLC per 31/9p ordinary share in London (in £)

   High     19.72     20.06     20.81     21.73  
    Low     17.93     18.85     18.92     19.77  

 

PLC per 31/9p ordinary share in New York (in US $)

   High     31.03     32.96     34.30     34.16  
    Low     28.65     30.59     30.27     30.56  
          
         1st
Quarter
2010
   2nd
Quarter
2010
   3rd
Quarter
2010
   4th
Quarter
2010
 

 

NV per0.16 ordinary share in Amsterdam (in)

   High     23.00     23.89     24.11     24.08  
    Low     20.82     21.17     20.68     20.82  

 

NV per0.16 ordinary share in New York (in US $)

   High     33.10     31.36     31.03     32.13  
    Low     28.35     26.02     26.22     28.20  

 

PLC per 31/9p ordinary share in London (in £)

   High     20.07     20.03     19.60     20.09  
    Low     18.08     17.72     16.62     17.58  

 

PLC per 31/9p ordinary share in New York (in US $)

   High     32.41     30.75     30.26     31.46  
    Low     28.20     25.74     25.90     27.72  

Annual high and low prices

         2011   2010   2009   2008   2007 

 

NV per0.16 ordinary share in Amsterdam (in)

   High     26.58     24.11     22.88     25.61     25.72  
    Low     21.00     20.68     13.59     16.20     18.89  

 

NV per0.16 ordinary share in New York (in US $)

   High     35.06     33.10     32.80     37.18     37.31  
    Low     29.07     26.02     17.04     21.27     24.94  

 

PLC per 31/9p ordinary share in London (in £)

   High     21.73     20.09     20.15     19.47     19.24  
    Low     17.93     16.62     12.30     12.49     13.20  

 

PLC per 31/9p ordinary share in New York (in US $)

   High     34.30     32.41     32.19     38.02     38.25  
    Low     28.65     25.74     17.04     20.22     25.57  

B. Plan of distribution

Not applicable.

C. Markets

This information is set forth under the heading ‘The Unilever Group’ on page 1 of this report.

D. Selling shareholders

Not applicable.

E. Dilution

Not applicable.

F. Expenses of the issue

Not applicable.

              

1st

Quarter

2013

   

2nd

Quarter

2013

   

3rd

Quarter

2013

   

4th

Quarter

2013

 

NV per0.16 ordinary share in Amsterdam (in)

     High       31.96     32.89     31.84     29.39  
         Low       28.58     28.82     28.25     27.50  

NV per0.16 ordinary share in New York (in US $)

     High       41.19     42.78     41.58     40.28  
         Low       37.95     37.94     37.28     37.27  

PLC per 31/9p ordinary share in London (in £)

     High       27.84     28.85     28.20     25.48  
         Low       23.78     25.16     24.30     23.19  

PLC per 31/9p ordinary share in New York (in US $)

     High       42.24     43.54     42.67     41.20  
         Low       38.38     39.00     38.06     37.67  
              

1st

Quarter

2012

   

2nd

Quarter

2012

   

3rd

Quarter

2012

   

4th

Quarter

2012

 

NV per0.16 ordinary share in Amsterdam (in)

     High       27.11     26.39     28.79     29.50  
         Low       24.78     24.56     26.42     27.53  

NV per0.16 ordinary share in New York (in US $)

     High       34.92     35.00     36.35     38.75  
         Low       32.09     30.79     32.11     35.58  

PLC per 31/9p ordinary share in London (in £)

     High       21.89     21.44     23.34     24.29  
         Low       19.94     20.05     21.27     22.62  

PLC per 31/9p ordinary share in New York (in US $)

     High       34.02     34.74     37.29     39.37  
         Low       31.50     31.04     32.88     36.11  

 

ANNUAL HIGH AND LOW PRICES

 

            
         2013   2012   2011   2010   2009 

NV per0.16 ordinary share in Amsterdam (in)

   High       32.89     29.50     26.58     24.11     22.88  
    Low       27.50     24.56     21.00     20.68     13.59  

NV per0.16 ordinary share in New York (in US $)

   High       42.78     38.75     35.06     33.10     32.80  
    Low       37.27     30.79     29.07     26.02     17.04  

PLC per 31/9p ordinary share in London (in £)

   High       28.85     24.29     21.73     20.09     20.15  
    Low       23.19     19.94     17.93     16.62     12.30  

PLC per 31/9p ordinary share in New York (in US $)

   High       43.54     39.37     34.30     32.41     32.19  
    Low       37.67     31.04     28.65     25.74     17.04  

 

 

16UnileverAnnual Report on Form 20-F 20112013Form 20-F                15


ITEM 9. THE OFFER AND LISTINGForm 20-FCONTINUED

B. PLAN OF DISTRIBUTION

Not applicable.

C. MARKETS

This information is set forth under the heading The Unilever Group’ on page 1 of this report.

D. SELLING SHAREHOLDERS

Not applicable.

E. DILUTION

Not applicable.

F. EXPENSES OF THE ISSUE

Not applicable.

ItemITEM 10. Additional InformationADDITIONAL INFORMATION

A. Share capitalSHARE CAPITAL

Not applicable.

B. Memorandum and articles of associationARTICLES OF ASSOCIATION

The information set forth under the following headings of the Group’s Annual Report and Accounts 20112013 furnished separately on 27 March 20122014 under Form 6-K is incorporated by reference.

‘Corporate governance’ on pages 3642 to 45;52; and

‘Note 1915A Share Capital’ on pages 101page 116; and 102.

‘Minimum shareholding requirement’ on page 69.

Please also refer to ‘The Unilever Group’ on page 1 of this report.

C. Material contractsMATERIAL CONTRACTS

The information set forth under the following headings of the Group’s Annual Report and Accounts 20112013 furnished separately on 27 March 20122014 under Form 6-K is incorporated by reference:

‘Financial Review 2011 – Acquisitions and disposals’ on page 21;

‘Note 21 Acquisition and disposals – 2010 and 2009’disposals’ on pages 104 to 106;131 and

132; and

‘Our Foundation agreements’Agreements’ on page 42.

47.

D. Exchange controlsEXCHANGE CONTROLS

Under the NetherlandsDutch External Financial Relations Act on Financial Supervision (Wet op het financieel toezicht (Wft))of 25 March 1994 the Minister of Finance is authorised to issue regulations relating to financial transactions.transactions concerning the movement of capital to or from other countries with respect to direct investments, establishment, the performing of financial services, the admission of negotiable instruments or goods with respect to which regulations have been issued under the Import and Export Act in the interest of the international legal system or an arrangement relevant thereto. These regulations may contain a prohibition to perform any of the actions indicated in those regulations without a licence. To date no regulations of this type have been issued which are applicable to Unilever N.V.

ThereOther than certain economic sanctions which may be in place from time to time, there are currently no exchange controlsUK laws, decrees or regulations restricting the import or export of capital or affecting PLC shareholders.the remittance of dividends or other payments to holders of the company’s shares who are non-residents of the UK. Similarly, other than certain economic sanctions which may be in force from time to time, there are no limitations relating only to non-residents of the UK under English law or the company’s Articles of Association on the right to be a holder of, and to vote in respect of, the company’s shares.

E. TAXATION

E. Taxation

Taxation forTAXATION FOR US persons holding shares inPERSONS HOLDING SHARES IN NV

The following notes are provided for guidance. US persons should consult their local tax advisers, particularly in connection with potential liability to pay US taxes on disposal, lifetime gift or bequest of their shares. A US person is a US individual citizen or resident, a corporation organised under the laws of the United States, or any other legal person subject to US federal income taxUnited States Federal Income Tax on its worldwide income.

Taxation on dividends in the NetherlandsTAXATION ON DIVIDENDS IN THE NETHERLANDS

As of 1 January 2007 dividends paid by companies in the Netherlands are in principle subject to dividend withholding tax of 15%. Where a shareholder is entitled to the benefits of the current Income Tax Convention (‘the Convention’) concluded on 18 December 1992 between the United States and the Netherlands, when dividends are paid by NV to:

a corporation organised under the laws of the United States (or any territory of it) having no permanent establishment in the Netherlands of which such shares form a part of the business property; or

any other legal person subject to United States Federal income tax with respect to its worldwide income, having no permanent establishment in the Netherlands of which such shares form a part of the business property, these dividends qualify for a reduction of withholding tax on dividends in the Netherlands from 15% to 5% if the beneficial owner is a company which directly holds at least 10% of the voting power of NV shares. The Convention provides, subject to certain conditions, for a complete exemption from, or refund of, Dutch dividend withholding tax if the beneficial owner is a qualified ‘Exempt Organisation’ as defined in Article 36 of the Convention.

Where a United States person has a permanent establishment in the Netherlands, which has shares in NV forming part of its business property, dividends it receives on those shares are included in that establishment’s profit. They are subject to income tax or corporation tax in the Netherlands, as appropriate, and tax on dividends in the Netherlands will generally be applied at the full rate of 15%. This with, as appropriate, the possibility to claim a credit for that tax shouldon dividends in the Netherlands against the income tax or corporation tax in the Netherlands. The net tax suffered may be treated as foreign income tax eligible for credit against the shareholder’s United States income taxes.

The Convention provides, subject to certain conditions, for a complete exemption from, or refund of, Dutch dividend withholding tax if the beneficial owner is a qualified ‘Exempt Pension Trust’ as defined in Article 35 of the Convention or a qualified ‘Exempt Organisation’ as defined in Article 36 of the Convention. It is noted that, subject to certain conditions, foreign (non-Dutch) tax exempt entities may also be entitled to a full refund of any Dutch dividend withholding tax suffered based on specific provisions in the Dividend Tax Act in the Netherlands. This tax refund opportunity under Dutch domestic tax law already applied to European Union and European Economic Area entities as of 1 January 2007 and has been extended as of 1 January 2012 to all foreign tax exempt entities including, if appropriate, United States tax exempt entities.

Under the Convention, qualifying United States organisations that are generally exempt from United States taxes and that are constituted and operated exclusively to administer or provide pension, retirement or other employee benefits may be exempt at source from withholding tax on dividends received from a Dutch corporation. A Competent Authority Agreement between the US and Dutch Tax Authorities on 6 August 2007, published in the US as Announcement 2007-75, 2007-2 Cumulative Bulletin 540 as amended by a Competent Authority Agreement published in the United States as Announcement 2010-26, 2010-1 Cumulative Bulletin 604, describes the eligibility of these US organisations for benefits under the Convention and procedures for claiming these benefits.

A

16                Form 20-FUnilever Annual Report on Form 20-F 2013


ITEM 10. ADDITIONAL INFORMATION

CONTINUED

Under the Convention, a United States trust, company or organisation that is operated exclusively for religious, charitable, scientific, educational or public purposes is subject to an initial 15% withholding tax rate. Such an exempt organisation ismay be entitled to reclaim from Tax Authoritiestax authorities in the Netherlands a refund of the Dutch dividend tax, if and to the extent that it is exempt from United States Federal Income Tax and it would be exempt from tax in the Netherlands if it were organised and carried on all its activities there.

UnileverAnnual Report on Form 20-F 2011

17


Form 20-F

If you are an NV shareholder resident in any country other than the United States or the Netherlands, any exemption from, or reduction or refund of, dividend withholding tax in the Netherlands may be governed by specific provisions in Dutch tax law, the ‘Tax Regulation for the Kingdom of the Netherlands’, or by the tax convention or any other agreement for the avoidance of double taxation, if any, between the Netherlands and your country of residence.

United States taxation on dividendsUNITED STATES TAXATION ON DIVIDENDS

If you are a United States person, the dividend (including the withheld amount) up to the amount of ourNV earnings and profits for United States Federal income taxIncome Tax purposes will be ordinary dividend income. Dividends received by an individual during taxable years before 2013 will be taxed at a maximum rate of 15% or 20%, depending on the income level of the individual, provided the individual has held the shares for more than 60 days during the 121-day period beginning 60 days before the ex-dividend date, that NV is a qualified foreign corporation and that certain other conditions are satisfied. NV is a qualified foreign corporation for this purpose. Dividends received by an individual for taxable years after 2012 will be subject to tax at ordinary income rates andIn addition, an additional tax of 3.8% will apply to dividends and other investment income received by individuals with incomes exceeding certain thresholds. The dividends are not eligible for the dividends received deduction allowed to corporations.

For US foreign tax credit purposes, the dividend is foreign source income, and withholding tax in the Netherlands is a foreign income tax that is eligible for credit against the shareholder’s United States income taxes. However, the rules governing the US foreign tax credit are complex, and additional limitations on the credit apply to individuals receiving dividends eligible for the 15% maximum tax rate on dividends described above.

Any portion of the dividend that exceeds ourNV’s United States earnings and profits is subject to different rules. This portion is a tax free return of capital to the extent of your basis in ourNV’s shares, and thereafter is treated as a gain on a disposition of the shares.

Under a provision of the Dividend Tax Act in the Netherlands and provided certain conditions are satisfied, NV is entitled to a credit (up to a maximum of 3% of the gross dividend from which dividend tax is withheld) against the amount of dividend tax withheld before remittance to tax authorities in the Netherlands. The United States tax authority may take the position that withholding tax in the Netherlands eligible for credit should be limited accordingly.

Disclosure requirements forDISCLOSURE REQUIREMENTS FOR US individual holdersINDIVIDUAL HOLDERS

Beginning with the 2011 tax year, US individuals that hold certain specified foreign financial assets, including stock in a foreign corporation, with values in excess of certain thresholds are required to file Form 8938 with their USUnited States Federal income taxIncome Tax return. Such Form requires disclosure of information concerning such foreign assets, including the value of the assets. Failure to file the form when required is subject to penalties. An exemption from reporting applies to foreign assets held through a US financial institution, generally including a non-US branch or subsidiary of a US institution and a US branch of a non-US institution. Investors are encouraged to consult with their own tax advisors regarding the possible application of this disclosure requirement to their investment in the shares.

Taxation on capital gains in the NetherlandsTAXATION ON CAPITAL GAINS IN THE NETHERLANDS

Under the Convention, if you are a United States person and you have capital gains on the sale of shares of a Dutch company, these are generally not subject to taxation by the Netherlands. An exception to this rule generally applies if you have a permanent establishment in the Netherlands and the capital gain is derived from the sale of shares which form part of that permanent establishment’s business property.

Succession duty and gift taxes in the NetherlandsSUCCESSION DUTY AND GIFT TAXES IN THE NETHERLANDS

Under the Estate and Inheritance Tax Convention between the United States and the Netherlands of 15 July 1969, individual US persons who are not Dutch citizens who have shares will generally not be subject to succession duty in the Netherlands on the individual’s death, unless the shares are part of the business property of a permanent establishment situated in the Netherlands.

A gift of shares of a Dutch company by a person who is not a resident or a deemed resident of the Netherlands is generally not subject to gift tax in the Netherlands. A non-resident Netherlands citizen, however, is still treated as a resident of the Netherlands for gift tax purposes for ten years and any other non-resident person for one year after leaving the Netherlands.

Taxation forTAXATION FOR US persons holding shares inPERSONS HOLDING SHARES IN PLC

The following notes are provided for guidance. US persons should consult their local tax advisers, particularly in connection with potential liability to pay US taxes on disposal, lifetime gift or bequest of their shares. A US person is a US individual citizen or resident, a corporation organised under the laws of the United States, or any other legal person subject to US federal income taxUnited States Federal Income Tax on its worldwide income.

United Kingdom taxation on dividendsUNITED KINGDOM TAXATION ON DIVIDENDS

Under United Kingdom law, income tax is not withheld from dividends paid by United Kingdom companies. Shareholders, whether resident in the United Kingdom or not, receive the full amount of the dividend actually declared.

United States taxation on dividendsUNITED STATES TAXATION ON DIVIDENDS

If you are a US person, the dividend up to the amount of ourPLC’s earnings and profits for United States Federal income taxIncome Tax purposes will be ordinary dividend income. Dividends received by an individual during taxable years before 2013 will be taxed at a maximum rate of 15% or 20%, depending on the income level of the individual, provided the individual has held the shares for more than 60 days during the 121-day period beginning 60 days before the ex-dividend date, that PLC is a qualified foreign corporation and certain other conditions are satisfied. PLC is a qualified foreign

18UnileverAnnual Report on Form 20-F 2011


Form 20-F

corporation for this purpose. Dividends received by an individual for taxable years after 2012 will be subject to tax at ordinary income rates, andIn addition, an additional tax of 3.8% will apply to dividends and other investment income received by individuals with incomes exceeding certain thresholds. The dividend is not eligible for the dividends received deduction allowable to corporations. The dividend is foreign source income for US foreign tax credit purposes.

Any portion of the dividend that exceeds ourPLC’s United States earnings and profits is subject to different rules. This portion is a tax free return of capital to the extent of your basis in ourPLC’s shares, and thereafter is treated as a gain on a disposition of the shares.

Disclosure Requirements forDISCLOSURE REQUIREMENTS FOR US individual holdersINDIVIDUAL HOLDERS

Beginning with the 2011 tax year, US individuals that hold certain specified foreign financial assets, including stock in a foreign corporation, with values in excess of certain thresholds are required to file Form 8938 with their USUnited States Federal income taxIncome Tax return. Such Form requires disclosure of information concerning such foreign assets, including the value of the assets. Failure to file the form when required is subject to penalties. An exemption from reporting applies to foreign assets held through a US financial institution, generally including a non-US branch or subsidiary of a US institution and a US branch of a non-US institution. Investors are encouraged to consult with their own tax advisors regarding the possible application of this disclosure requirement to their investment in the shares.

Unilever Annual Report on Form 20-F 2013Form 20-F                17


ITEM 10. ADDITIONAL INFORMATION

CONTINUED

UK taxation on capital gainsTAXATION ON CAPITAL GAINS

Under United Kingdom law, when you sell shares you may be liable to pay capital gains tax. However, if you are either:

an individual who is neither resident nor ordinarily resident in the United Kingdom; or

a company which is not resident in the United Kingdom

you will generally not be liable to United Kingdom tax on any capitalcapitaI gains made on disposal of your shares.

Two exceptions are: if the shares are held in connection with a trade or business which is conducted in the United Kingdom through a branch or an agency; and if the shares are held by an individual who has left the UK for a period of non-residence of less than five tax years having been resident for at least four of the seven tax years prior to leaving the UK.

UK inheritance taxINHERITANCE TAX

Under the current estate and gift tax convention between the United States and the United Kingdom, ordinary shares held by an individual shareholder who is:

domiciled for the purposes of the convention in the United States; and

is not for the purposes of the convention a national of the United Kingdom

will not be subject to United Kingdom inheritance tax on:

tax:

on the individual’s death; or

on a gift of the shares during the individual’s lifetime.

The exception is if the shares are part of the business property of a permanent establishment of the individual in the United Kingdom or, in the case of a shareholder who performs independent personal services, pertain to a fixed base situated in the United Kingdom.

F. Dividends and paying agentsDIVIDENDS AND PAYING AGENTS

Not applicable.

G. Statement by expertsSTATEMENT BY EXPERTS

Not applicable.

H. Documents on displayDOCUMENTS ON DISPLAY

The information set forth under the heading ‘Shareholder information’headings ‘Contact details’ and ‘Publications’ on pages 123 to 126146 and 147 of the Group’s Annual Report and Accounts 20112013 furnished separately on 27 March 20122014 under Form 6-K is incorporated by reference.

Unilever Annual Report on FormUNILEVER ANNUAL REPORT ON FORM 20-F 20112013

Filed with the SEC on the SEC’s website. Printed copies are available, free of charge, upon request to Unilever PLC, Investor Relations Department, Unilever House, 100 Victoria Embankment, London EC4Y 0DY, United Kingdom.

Documents on display in the United StatesDOCUMENTS ON DISPLAY IN THE UNITED STATES

Unilever files and furnishes reports and information with the United States SEC. Such reports and information can be inspected and copied at the SEC’s public reference facilities in Washington DC, Chicago and New York. Certain of our reports and other information that we file or furnish to the SEC are also available to the public over the internet on the SEC’s website.

I. Subsidiary informationSUBSIDIARY INFORMATION

Not applicable.

UnileverAnnual Report on Form 20-F 2011

19


Form 20-F

ItemITEM 11. Quantitative and Qualitative Disclosures About Market RiskQUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Please refer also to Item 3D ‘Risk Factors’ of this report.

The information set forth under the following headings of the Group’s Annual Report and Accounts 20112013 furnished separately on 27 March 20122014 under Form 6-K is incorporated by reference:

‘Outlook’ on page 28;

34;

‘Note 4B Pensions and similar obligations’ on pages 99 to 104;

‘Note 13 Trade and other current receivables’ on pages 88113 to 89;

114;

‘Note 14 Trade payables and other liabilities’ on page 89;

114;

‘Note 15 Financial assetsCapitaI and liabilities’funding’ on pages 90 to 92;115 and

116;

‘Note 16 Capital and treasuryTreasury risk management’ on pages 93120 to 99.

125;
‘Note 17 Investment and return’ on pages 125 and 126; and
‘Note 18 Financial instruments fair value risk’ on pages 127 to 129.

ItemITEM 12. Description of Securities Other than Equity SecuritiesDESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

The Unilever Group has appointed Citibank, N.A. (‘Citibank’) as both its transfer agent and registrar pursuant to the New York Registered Share program for Unilever N.V. and as its depositary pursuant to its American Depositary Receipt program for Unilever PLC. Any fee arrangement with Citibank will therefore cover both programs.

D.3 Transfer Agent Fees and Charges for UnileverTRANSFER AGENT FEES AND CHARGES FOR UNILEVER N.V.

Although items 12.D.3 and 12.D.4 are not applicable to Unilever N.V. the following fees, charges and transfer agent payments are listed, as any fee arrangement with Citibank will cover both programs.

Under the terms of the Transfer Agent Agreement for the Unilever N.V. New York Registered Share program, a New York Share (NYS) holder may have to pay the following service fees to the transfer agent:

Issuance of NYSs: Up to US 5¢ per NYS issued.

Cancellation of NYSs: Up to US 5¢ per NYS cancelled.

An NYS holder will also be responsible to pay certain fees and expenses incurred by the transfer agent and certain taxes and governmental charges such as:

Fees for the transfer and registration of Shares charged by the registrar and transfer agent for the Shares in the Netherlands (i.e. upon deposit and withdrawal of Shares);

Expenses incurred for converting foreign currency into US dollars;

Expenses for cable, telex and fax transmissions and for delivery of securities;

Taxes and duties upon the transfer of securities (i.e. when shares are deposited or withdrawn from deposit); and

Fees and expenses incurred in connection with the delivery or servicing of shares on deposit.

Transfer agent fees payable upon the issuance and cancellation of NYSs are typically paid to the transfer agent by the brokers (on behalf of their clients) receiving the newly-issued NYSs from the transfer agent and by the brokers (on behalf of their clients) delivering the NYSs to the transfer agent for cancellation. The brokers in turn charge these transaction fees to their clients.

Note that the fees and charges an investor may be required to pay may vary over time and may be changed by us and by the Transfer Agent. Notice of any changes will be given to investors.

18                Form 20-FUnilever Annual Report on Form 20-F 2013


ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIESCONTINUED

D.3 Depositary Fees and Charges for UnileverDEPOSITARY FEES AND CHARGES FOR UNILEVER PLC

Under the terms of the Deposit Agreement for the Unilever PLC American Depositary Shares (ADSs), an ADS holder may have to pay the following service fees to the depositary bank:

Issuance of ADSs: Up to US 5¢ per ADS issued.

Cancellation of ADSs: Up to US 5¢ per ADS cancelled.

An ADS holder will also be responsible to pay certain fees and expenses incurred by the depositary bank and certain taxes and governmental charges such as:

Fees for the transfer and registration of Shares charged by the registrar and transfer agent for the Shares in the United Kingdom (i.e., upon deposit and withdrawal of Shares);

Expenses incurred for converting foreign currency into US dollars;

Expenses for cable, telex and fax transmissions and for delivery of securities;

Taxes and duties upon the transfer of securities (i.e.(ie when shares are deposited or withdrawn from deposit); and

Fees and expenses incurred in connection with the delivery or servicing of shares on deposit.

deposit; and

20UnileverAnnual Report on Form 20-F 2011


Form 20-F

Fees incurred in connection with the distribution of dividends.

Depositary fees payable upon the issuance and cancellation of ADSs are typically paid to the depositary bank by the brokers (on behalf of their clients) receiving the newly-issued ADSs from the depositary bank and by the brokers (on behalf of their clients) delivering the ADSs to the depositary bank for cancellation. The brokers in turn charge these transaction fees to their clients.

Note that the fees and charges an investor may be required to pay may vary over time and may be changed by us and by the depositary bank. Notice of any changes will be given to investors.

D.4 Transfer Agent PaymentsTRANSFER AGENT PAYMENTSFiscal Year 2011 for UnileverFISCAL YEAR 2013 FOR UNILEVER N.V.

In 2011,2013, we received the following payments from Citibank, N.A., the Transfer Agent and Registrar for our New York Registered Share program:

 

    US $ 

Reimbursement of listing fees (NYSE/NASDAQ)

   236,651.00  251,964.00  

Reimbursement of settlement infrastructure fees (including DTC feeds)

   46,071.20  118,091.17  

Reimbursement of proxy process expenses (printing, postage and distribution)

   457,798.68  283,396.23  

Tax reclaim services

   30,000.00  33,474.47  

Program-related expenses (that include expenses incurred from the requirements of the Sarbanes-Oxley Act of 2002)

   579,479.12  
663,074.13  

Indirect paymentsINDIRECT PAYMENTS

As part of its service to the Company,Unilever N.V., Citibank, N.A. has agreed to waive fees for the standard costs associated with the administration of the ADR Program, associated operating expenses and investor relations advice estimated to total US $150,000.$150,000.00.

D.4 Depositary PaymentsDEPOSITARY PAYMENTSFiscal Year 2011 for UnileverFISCAL YEAR 2013 FOR UNILEVER PLC

In 2011,2013, we received the following payments from Citibank, N.A., the Depositary Bank for our American Depositary Receipt program:Program:

 

    US $ 

Reimbursement of listing fees (NYSE/NASDAQ)

   110,529.00  180,486.00  

Reimbursement of settlement infrastructure fees (including DTC feeds)

   25,747.10  74,279.46  

Reimbursement of proxy process expenses (printing, postage and distribution)

   252,804.91  286,519.78  

Program-related expenses (that include expenses incurred from the requirements of the Sarbanes-Oxley Act of 2002)

   960,918.99  
808,714.76  

Indirect paymentsINDIRECT PAYMENTS

As part of its service to the Company,Unilever PLC, Citibank, N.A. has agreed to waive fees for the standard costs associated with the administration of the ADR Program, associated operating expenses and investor relations advice estimated to total US $150,000.$150,000.00.

ItemITEM 13. Defaults, Dividend Arrearages and DelinquenciesDEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

A. DefaultsA.DEFAULTS

There has been no material default in the payment of principal, interest, a sinking or purchase fund instalments or any other material default relating to indebtedness of the Group.

B. Dividend arrearages and delinquenciesDIVIDEND ARREARAGES AND DELINQUENCIES

There have been no arrears in payment of dividends on, and material delinquency with respect to, any class of preferred stock of any significant subsidiary of the Group.

Unilever Annual Report on Form 20-F 2013Form 20-F                19


ItemITEM 14. Material Modifications to the Rights of Security Holders and Use of ProceedsMATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS

Not applicable.

UnileverAnnual Report on Form 20-F 2011

21


Form 20-F

ItemITEM 15. Controls and ProceduresCONTROLS AND PROCEDURES

The information set forth under the headings ‘Report of Independent Registered Public Accounting Firm’ in Item 18 on page 2422 of this report,’Our and ‘Our Risk Appetite and Approach to Risk Management’ on page 33, ‘The34, ‘Requirements – The United States’ on pages 44 and 45page 50 and ‘Risk management and internal control arrangements’ on page 4654 of the Group’s Annual Report and Accounts 20112013 furnished separately on 27 March 20122014 under Form 6-K is incorporated by reference.

Management’s report on internal control over financial reportingMANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

In accordance with the requirements of Section 404 of the US Sarbanes-Oxley Act of 2002, the following report is provided by management in respect of the Company’sGroup’s internal control over financial reporting (as defined in rule 13a–15(f) or rule 15d–15(f) under the US Securities Exchange Act of 1934):

Unilever’s management is responsible for establishing and maintaining adequate internal control over financial reporting for the Group;

Unilever’s management has used the Committee of Sponsoring Organizations of the Treadway Commission (COSO) framework (1992) to evaluate the effectiveness of our internal control over financial reporting. Management believes that the COSO framework (1992) is a suitable framework for its evaluation of our internal control over financial reporting because it is free from bias, permits reasonably consistent qualitative and quantitative measurements of internal controls, is sufficiently complete so that those relevant factors that would alter a conclusion about the effectiveness of internal controls are not omitted and is relevant to an evaluation of internal control over financial reporting;

Management has assessed the effectiveness of internal control over financial reporting as of 31 December 2011,2013, and has concluded that such internal control over financial reporting is effective; and

PricewaterhouseCoopers LLP and PricewaterhouseCoopers Accountants N.V., who have audited the consolidated financial statements of the Group for the year ended 31 December 2011,2013, have also audited the effectiveness of internal control over financial reporting as at 31 December 20112013 and have issued an attestation report on internal control over financial reporting. For the Auditors’ Reportreport please refer to Item 18 on page 2422 of this report.

ItemITEM 16. ReservedRESERVED

A. Audit Committee financial expertAUDIT COMMITTEE FINANCIAL EXPERT

The information set forth under the heading ‘Report of the Audit Committee’ on pages 46 and 4753 to 55 of the Group’s Annual Report and Accounts 20112013 furnished separately on 27 March 20122014 under Form 6-K is incorporated by reference.

B. Code of EthicsCODE OF ETHICS

The information set forth under the following headings of the Group’s Annual Report and Accounts 20112013 furnished separately on 27 March 20122014 under Form 6-K is incorporated by reference:

‘Foundation and principles’ on page 33;pages 34 and

35; and

Requirements – The United States’ on pages 44 and 45.

page 50.

LOGO

22UnileverAnnual Report on Form 20-F 2011


Form 20-F

C. Principal accountant fees and servicesPRINCIPAL ACCOUNTANT FEES AND SERVICES

The information set forth under the heading ‘Report of the Audit Committee’ on pages 46 and 4753 to 55 of the Group’s Annual Report and Accounts 20112013 furnished separately on 27 March 20122014 under Form 6-K is incorporated by reference.

 

    million
2011
     million
2010
     million
2009
   

 million

2013

   

 million

2012

   

 million

2011

 

Audit fees(a)

   18     18     19     16     18     18  

Audit-related fees(b)

   2     1          3     2     2  

Tax fees

   1     1     2     1     1     1  

All other fees

   1     3     1     1          1  

 

(a) 

Excludes1 million fees paid in respect of services supplied for associated pension schemes. (2012:

1 million; 2011:1 million).
(b)

Includes other audit services which comprise audit and similar work that regulations or agreements with third parties require the auditors to undertake.

D. Exemptions from the Listing Standards for Audit CommitteesEXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES

Not applicable.

E. Purchases of equity securities by the issuer and affiliated purchasers

Share purchases during 2011

 

    Total number of
shares purchased
   Average price
paid per share ()
   

Of which, numbers of
shares purchased

as part of publicly
announced plans

    million
Maximum value that
may yet be purchased
as part of publicly
announced plans
 

January

                    

February

                    

March (ordinary shares)(a)

   56,762     21.23            

April

                    

May

                    

June (ordinary shares)(a)

   4,500,000     22.26            

July

                    

August

                    

September

                    

October (6% preference shares)(b)

   37,611     806.23            

October (7% preference shares)(b)

   7,546     940.61            

November

                    

December (6% preference shares)(b)

   58     806            

Total

   4,601,977     30.17            

 

20                Form 20-FUnilever Annual Report on Form 20-F 2013


ITEM 16. RESERVEDCONTINUED

E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS

SHARE PURCHASES DURING 2013

                million 
    

Total number of

shares purchased

   

Average price

paid per share ()

   

Of which, numbers of

shares purchased

as part of publicly

announced plans

   

Maximum value that

may yet be purchased

as part of publicly

announced plans

 

January

                    

February(a)

   160,400     30.21            

March(a)

   203,677     30.70            

April

                    

May

                    

June

                    

July

                    

August

                    

September

                    

October

                    

November

                    

December

                    

Total

   364,077     30.48            

(a)

Shares were purchased to satisfy commitments to deliver shares under our share-based plans as described in note 4C ‘Share-Based Compensation Plans’ on pages 79104 and 80105 of the Group’s Annual Report and Accounts 20112013 furnished separately on 27 March 20122014 under Form 6-K and incorporated by reference.

(b)

The repurchase was undertaken under the public cash offer for all outstanding 6% and 7% cumulative preference shares as announced on 19 October 2011.

Between 26 February and 3 March 2014 Unilever N.V. purchased 527,958 shares with an average price of Euro 28.91 per share to facilitate grants in connection with its employee compensation programs.

F. ChangeCHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT

In 2013 we conducted a tender process for the Unilever Group’s statutory audit contract. The change in Registrant’s Certifying Accountantauditors is being made in order to remain at the forefront of good governance and in recognition of regulatory changes in Europe and elsewhere. Accordingly the engagement of PricewaterhouseCoopers LLP and PricewaterhouseCoopers Accountants N.V. (together, ‘PricewaterhouseCoopers’), Unilever’s current auditor, will not be renewed in 2014. As a result of the audit tender process we announced on 2 December 2013 that following completion of the audit of the Unilever Group financial statements for the year ended 31 December 2013 and the audit of the effectiveness of internal control over financial reporting as of 31 December 2013, KPMG LLP and KPMG Accountants N.V. (together, ‘KPMG’) will become Unilever’s statutory auditor, subject to approval by shareholders at the 2014 Annual General Meeting of Unilever PLC and Unilever N.V. The approval for this was delegated by the Board to a Board Committee comprising the Chairman, the Chief Financial Officer, the Chairman of the Audit Committee and the Vice-Chairman/Senior Independent Director.

Not applicable.During the two years prior to 31 December 2013, (1) PricewaterhouseCoopers has not issued any reports on the financial statements of the Unilever Group or on the effectiveness of internal control over financial reporting that contained an adverse opinion or a disclaimer of opinion, nor were the auditors’ reports of PricewaterhouseCoopers qualified or modified as to uncertainty, audit scope, or accounting principles, (2) there has not been any disagreement over any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedures, which disagreements if not resolved to PricewaterhouseCooper’s satisfaction would have caused it to make reference to the subject matter of the disagreement in connection with its auditors’ reports, or any “reportable event” as described in Item 16F(a)(1)(v) of Form 20-F.

Further in the two years prior to 31 December 2013 we have not consulted with KPMG regarding either (i) the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered with respect to the consolidated financial statements of the Unilever Group; or (ii) any matter that was the subject of a disagreement as that term is used in Item 16F(a)(1)(iv) of Form 20-F or a “reportable event” as described in Item 16F(a)(1)(v) of Form 20-F.

G. Corporate governanceCORPORATE GOVERNANCE

The information set forth under the heading ‘Corporate governance’ on pages 3642 to 4552 of the Group’s Annual Report and Accounts 20112013 furnished separately on 27 March 20122014 under Form 6-K is incorporated by reference.

ItemITEM 17. Financial StatementsFINANCIAL STATEMENTS

The CompanyUnilever has responded to Item 18 in lieu of this item.

 

 

UnileverAnnual Report on Form 20-F 20112013

   23Form 20-F                21  


Form 20-F

ItemITEM 18. Financial StatementsFINANCIAL STATEMENTS

The information set forth under the heading ‘Financial statements’ on page 6185 and pages 6490 to 110135 of the Group’s Annual Report and Accounts 20112013 furnished separately on 27 March 20122014 under Form 6-K is incorporated by reference.

To the Directors and shareholders

Report of Independent Registered Public Accounting FirmREPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMS

In our opinion, the consolidated income statements and the related consolidated balance sheets, consolidated cash flow statements, consolidated statements of comprehensive income and consolidated statements of changes in equity set forth under the heading ‘Financial Statements’ on pages 6490 to 108135 (excluding Note 24 on page 108133) of Unilever Group’s Annual Report and Accounts 20112013 and the Guarantor financial information included in Item 18 of this Form 20-F present fairly, in all material respects, the financial position of the Unilever Group at 31 December 20112013 and 31 December 20102012 and the results of its operations and its cash flows for each of the three years in the period ended 31 December 2011,2013, in conformity with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board and in conformity with IFRS as adopted by the European Union. Also in our opinion, the Group maintained, in all material respects, effective internal control over financial reporting as of 31 December 2011,2013, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) (1992). The Group’s Directors and management are responsible for these consolidated financial statements.

The Group’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying ‘Management’s report on internal control over financial reporting’ included in Item 15 of this Form 20-F. Our responsibility is to express opinions on these consolidated financial statements and on the Group’s internal control over financial reporting based on our integrated audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the consolidated financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall consolidated financial statements presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of consolidated financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and Directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company’s assets that could have a material effect on the consolidated financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

 

/s/ PricewaterhouseCoopers LLPAmsterdam, The Netherlands, 28 February 20124 March 2014
London, United Kingdom  PricewaterhouseCoopers LLP
PricewaterhouseCoopers Accountants N.V.London, United Kingdom
As auditors of Unilever N.V.PLC  As auditors of Unilever PLCN.V.
R A J Swaak RA4 March 2014  28 February 2012Original has been signed by P J van Mierlo RA

 

 

2422                Form 20-F UnileverAnnual Report on Form 20-F 20112013


ITEM 18. FINANCIAL STATEMENTSForm 20-FCONTINUED

 

Guarantor statementsGUARANTOR STATEMENTS (audited)(AUDITED)

On 1 November 2011, NV and Unilever Capital Corporation (UCC) filed a US Shelf registration, which is unconditionally and fully guaranteed, jointly and severally, by NV, PLC and Unilever United States, Inc. (UNUS). This superseded the previous NV and UCC US Shelf registration filed on 18 November 2008, which is unconditionally and fully guaranteed, jointly and severally, by NV, PLC and UNUS. UCC and UNUS are each indirectly 100% owned by the Unilever parent entities (as defined below). Of the US Shelf registration, US $4.0$5.8 billion of Notes were outstanding at 31 December 2011 (2010:2013 (2012: US $2.5 billion, 2009:$5.0 billion; 2011: US $4.25$4.0 billion) with coupons ranging from 2.75%0.45% to 5.9%. These Notes are repayable between 15 February 2014 and 15 November 2032.

Provided below are the income statements, cash flow statements and balance sheets of each of the companies discussed above, together with the income statement, cash flow statement and balance sheet of non-guarantor subsidiaries. These have been prepared under the historical cost convention and, aside from the basis of accounting for investments at net asset value (equity accounting), comply in all material respects with International Financial Reporting Standards. The financial information in respect onof NV, PLC and UNUS has been prepared with all subsidiaries accounted for on an equity basis. Information on NV and PLC is shown collectively as Unilever parent entities. The financial information in respect of the non-guarantor subsidiaries has been prepared on a consolidated basis.

 

   million  million  million  million  million  million     million     million     million     million     million     million  

Income statement

for the year ended 31 December 2011

  Unilever
Capital
Corporation
subsidiary
issuer
 Unilever(a)
parent
entities
 

Unilever
United

States Inc.
subsidiary
guarantor

 Non-
guarantor
subsidiaries
 Eliminations Unilever
Group
 

Income statement

for the year ended 31 December 2013

   
 
 
 
 
Unilever
Capital
Corporation
subsidiary
issuer
  
  
  
  
  
  

 

 

Unilever

parent

entities

(a) 

  

  

  
 
 
 
 
Unilever
United
States Inc.
subsidiary
guarantor
  
  
  
  
  
  
 
 
Non-
guarantor
subsidiaries
  
  
  
  Eliminations    
 
Unilever
Group
  
  

Turnover

               46,467        46,467                 49,797        49,797  

Operating profit

       155    (12  6,290        6,433         296    4    7,217        7,517  

Finance income

               92        92                 103        103  

Finance costs

   (127  (203      (210      (540   (150  (111      (239      (500

Pensions and similar obligations

       (5  (15  91        71         (4  (29  (100      (133

Inter-company finance income/(costs)

   128    61    (11  (178           150    32    (190  8          

Dividends

       2,631        (2,631               2,945        (2,945        

Share of net profit/(loss) of joint ventures and associates

               113        113                 113        113  

Other income from non-current investments

               76        76                 14        14  

Profit before taxation

   1    2,639    (38  3,643        6,245         3,158    (215  4,171        7,114  

Taxation

       50    (237  (1,435      (1,622       (13  (419  (1,419      (1,851

Net profit

   1    2,689    (275  2,208        4,623         3,145    (634  2,752        5,263  

Equity earnings of subsidiaries

       1,934    898        (2,832           2,118    1,395        (3,513    

Net profit

   1    4,623    623    2,208    (2,832  4,623         5,263    761    2,752    (3,513  5,263  

Attributable to:

              

Non-controlling interests

               371        371                 421        421  

Shareholders’ equity

   1    4,623    623    1,837    (2,832  4,252         5,263    761    2,331    (3,513  4,842  

Total comprehensive income

   (15  3,234    (209  2,057        5,067  

 

(a) 

The term ‘Unilever parent entities’ includes Unilever N.V. and Unilever PLC. Though Unilever N.V. and Unilever PLC are separate legal entities, with different shareholder constituencies and separate stock exchange listings, they operate as nearly as practicable as a single economic entity. Debt securities issued by entities in the Unilever Group are fully and unconditionally guaranteed by both Unilever N.V. and Unilever PLC.

LOGO

 

 

UnileverAnnual Report on Form 20-F 20112013

   25Form 20-F                23  


ITEM 18. FINANCIAL STATEMENTSForm 20-FCONTINUED

 

    million   million   million   million   million   million 

Income statement

for the year ended 31 December 2010

  Unilever
Capital
Corporation
subsidiary
issuer
  Unilever(a)
parent
entities
  Unilever
United
States Inc.
subsidiary
guarantor
  Non-
guarantor
subsidiaries
  Eliminations  Unilever
Group
 

Turnover

               44,262        44,262  

Operating profit

       280    (21  6,080        6,339  

Finance income

               77        77  

Finance costs

   (182  (183      (126      (491

Pensions and similar obligations

       (5  (24  49        20  

Inter-company finance income/(costs)

   184    71    (10  (245        

Dividends

       2,285     (2,285        

Share of net profit/(loss) of joint ventures and associates

               111        111  

Other income from non-current investments

               76        76  

Profit before taxation

   2    2,448    (55  3,737        6,132  

Taxation

   (1  (83  434    (1,884      (1,534

Net profit

   1    2,365    379    1,853        4,598  

Equity earnings of subsidiaries

       2,233    96        (2,329    

Net profit

   1    4,598    475    1,853    (2,329  4,598  

Attributable to:

       

Non-controlling interests

               354        354  

Shareholders’ equity

   1    4,598    475    1,499    (2,329  4,244  

   million  million  million  million  million  million    million  million  million  million  million  million 

Income statement

for the year ended 31 December 2009

  Unilever
Capital
Corporation
subsidiary
issuer
 Unilever(a)
parent
entities
 

Unilever
United
States Inc.

subsidiary
guarantor

 Non-
guarantor
subsidiaries
 Eliminations Unilever
Group
 
  

Unilever

Capital

   

Unilever

United

       
Income statement   

 

 

Corporation

subsidiary

issuer

  

  

  

  

 

 

Unilever

parent

entities

(a) 

  

  

  

 

 

States Inc.

subsidiary

guarantor

  

  

  

  

 

 

Non-

guarantor

subsidiaries

  

  

  

 Eliminations    

 

Unilever

Group

  

  

for the year ended 31 December 2012      (Restated)   (Restated)     (Restated)  

Turnover

               39,823        39,823                51,324       51,324  

Operating profit

       128    (31  4,923        5,020        334   7   6,636       6,977  

Finance income

               75        75                136       136  

Finance costs

   (183  (183      (138      (504   (153 (169     (204     (526

Pensions and similar obligations

       1    (61  (104      (164      (5 (32 (108     (145

Inter-company finance income/(costs)

   185    16    (10  (191           153   (6 (110 (37        

Dividends

       2,433     (2,433              2,851   676   (3,527        

Share of net profit/(loss) of joint ventures and associates

               115        115                105       105  

Other income from non-current investments

               374        374                (14     (14

Profit before taxation

   2    2,395    (102  2,621        4,916        3,005   541   2,987       6,533  

Taxation

   (1  (35  (245  (976      (1,257      (29 (192 (1,476     (1,697

Net profit

   1    2,360    (347  1,645        3,659        2,976   349   1,511       4,836  

Equity earnings of subsidiaries

       1,299    643        (1,942          1,860   728       (2,588    

Net profit

   1    3,659    296    1,645    (1,942  3,659        4,836   1,077   1,511   (2,588 4,836  

Attributable to:

              

Non-controlling interests

               289        289                468       468  

Shareholders’ equity

   1    3,659    296    1,356    (1,942  3,370        4,836   1,077   1,043   (2,588 4,368  

Total comprehensive income

   (9 2,824   438   645       3,898  
   million  million  million  million  million  million 
  

Unilever

Capital

   

Unilever

United

       
Income statement   

 

 

Corporation

subsidiary

issuer

  

  

  

  

 

 

Unilever

parent

entities

(a) 

  

  

  

 

 

States Inc.

subsidiary

guarantor

  

  

  

  

 

 

Non-

guarantor

subsidiaries

  

  

  

 Eliminations    

 

Unilever

Group

  

  

for the year ended 31 December 2011      (Restated)   (Restated)     (Restated)  
Turnover              46,467       46,467  
Operating profit      155   (12 6,277       6,420  

Finance income

              92       92  

Finance costs

   (127 (203     (210     (540

Pensions and similar obligations

      (5 (26 (64     (95

Inter-company finance income/(costs)

   128   61   (11 (178        

Dividends

      2,631       (2,631        

Share of net profit/(loss) of joint ventures and associates

              113       113  

Other income from non-current investments

              76       76  
Profit before taxation   1   2,639   (49 3,475       6,066  

Taxation

      50   (233 (1,392     (1,575
Net profit   1   2,689   (282 2,083       4,491  

Equity earnings of subsidiaries

      1,802   898       (2,700    
Net profit   1   4,491   616   2,083   (2,700 4,491  

Attributable to:

       

Non-controlling interests

              371       371  

Shareholders’ equity

   1   4,491   616   1,712   (2,700 4,120  

Total comprehensive income

   9   2,542   (290 262       2,523  

 

(a) 

The term ‘Unilever parent entities’ includes Unilever N.V. and Unilever PLC. Though Unilever N.V. and Unilever PLC are separate legal entities, with different shareholder constituencies and separate stock exchange listings, they operate as nearly as practicable as a single economic entity. Debt securities issued by entities in the Unilever Group are fully and unconditionally guaranteed by both Unilever N.V. and Unilever PLC.

 

 

2624                Form 20-F UnileverAnnual Report on Form 20-F 20112013


ITEM 18. FINANCIAL STATEMENTSForm 20-FCONTINUED

 

   million    million  million  million  million  million    million  million  million  million  million  million 
Balance sheet at 31 December 2011  Unilever
Capital
Corporation
subsidiary
issuer
   Unilever(a)
parent
entities
 Unilever
United
States Inc.
subsidiary
guarantor
 Non-
guarantor
subsidiaries
 Eliminations Unilever
Group
 
Balance sheetat 31 December 2013   

 

 

 

 

Unilever

Capital

Corporation

subsidiary

issuer

  

  

  

  

  

  

 

 

Unilever

parent

entities

(a) 

  

  

  

 

 

 

 

Unilever

United

States Inc.

subsidiary

guarantor

  

  

  

  

  

  

 

 

Non-

guarantor

subsidiaries

  

  

  

  Eliminations    

 

Unilever

Group

  

  

Assets

               

Non-current assets

               

Goodwill and intangible assets

        162        21,751        21,913         1,726        19,178        20,904  

Property plant and equipment

                8,774        8,774  

Property, plant and equipment

               9,344        9,344  

Pension asset for funded schemes in surplus

        5        998        1,003         1        990        991  

Deferred tax assets

            373    48        421         163    38    883        1,084  

Financial assets

                478        478                 505        505  

Other non-current assets

                632        632             1    562        563  

Amounts due from group companies

   5,498                 (5,498       7,896            30    (7,926    

Net assets of subsidiaries (equity accounted)

        39,816    14,213    (17,992  (36,037           41,740    17,841    (20,528  (39,053    
   5,498     39,983    14,586    14,689    (41,535  33,221     7,896    43,630    17,880    10,964    (46,979  33,391  

Current assets

               

Inventories

                4,601        4,601                 3,937        3,937  

Amounts due from group companies

        8,562    2,042    (10,604               5,112    2,103    (7,215        

Trade and other current receivables

        70    3    4,440        4,513         91    13    4,727        4,831  

Current tax assets

        256    109    (146      219         18        199        217  

Cash and cash equivalents

        1        3,483        3,484         3        2,282        2,285  

Other financial assets

        1        1,452        1,453                 760        760  

Non-current assets held for sale

                21        21                 92        92  
        8,890    2,154    3,247        14,291         5,224    2,116    4,782        12,122  

Total assets

   5,498     48,873    16,740    17,936    (41,535  47,512     7,896    48,854    19,996    15,746    (46,979  45,513  

Liabilities

               

Current liabilities

               

Financial liabilities

   1,526     2,087    3    2,224        5,840     885    2,132    3    990        4,010  

Amounts due to group companies

   573     25,638    14    (26,225           3,101    29,747        (32,848        

Trade payables and other current liabilities

   42     170    11    10,748        10,971     45    170    31    11,489        11,735  

Current tax liabilities

        187        538        725         (17  155    1,116        1,254  

Provisions

        13        380        393         11        368        379  

Liabilities associated with assets held for sale

                                         4        4  
   2,141     28,095    28    (12,335      17,929     4,031    32,043    189    (18,881      17,382  

Non-current liabilities

               

Financial liabilities

   3,068     3,207        1,603        7,878     3,600    2,326        1,565        7,491  

Amounts due to group companies

        3,091    5,498    (3,091  (5,498               7,937    (11  (7,926    

Pensions and post-retirement healthcare liabilities

               

Funded schemes in deficit

            187    2,108        2,295             12    1,393        1,405  

Unfunded schemes

        96    608    1,207        1,911         102    480    981        1,563  

Provisions

        33    1    874        908         5    2    885        892  

Deferred tax liabilities

        53        1,072        1,125         18        1,506        1,524  

Other non-current liabilities

        5    138    402        545         16        425        441  
   3,068     6,485    6,432    4,175    (5,498  14,662     3,600    2,467    8,431    6,744    (7,926  13,316  

Total liabilities

   5,209     34,580    6,460    (8,160  (5,498  32,591     7,631    34,510    8,620    (12,137  (7,926  30,698  

Equity

               

Shareholders equity

        

Shareholders’ equity

       

Called up share capital

        484                484         484                484  

Share premium account

        137    942    (942      137         138    942    (942      138  

Other reserves

   14     (6,004  (791  (1,428  2,205    (6,004   (10  (6,746  (381  (2,680  3,071    (6,746

Retained profit

   275     19,676    10,129    27,838    (38,242  19,676     275    20,468    10,815    31,034    (42,124  20,468  
   289     14,293    10,280    25,468    (36,037  14,293     265    14,344    11,376    27,412    (39,053  14,344  

Non-controlling interests

                628        628                 471        471  

Total equity

   289     14,293    10,280    26,096    (36,037  14,921     265    14,344    11,376    27,883    (39,053  14,815  

Total liabilities and equity

   5,498     48,873    16,740    17,936    (41,535  47,512     7,896    48,854    19,996    15,746    (46,979  45,513  

 

(a)

The term ‘Unilever parent entities’ includes Unilever N.V. and Unilever PLC. Though Unilever N.V. and Unilever PLC are separate legal entities, with different shareholder constituencies and separate stock exchange listings, they operate as nearly as practicable as a single economic entity. Debt securities issued by entities in the Unilever Group are fully and unconditionally guaranteed by both Unilever N.V. and Unilever PLC.

 

 

UnileverAnnual Report on Form 20-F 20112013

   27Form 20-F                25  


ITEM 18. FINANCIAL STATEMENTSForm 20-FCONTINUED

 

   million    million  million  million  million  million    million    million  million  million  million  million 
Balance sheet at 31 December 2010  Unilever
Capital
Corporation
subsidiary
issuer
   Unilever(a)
parent
entities
 Unilever
United
States Inc.
subsidiary
guarantor
 Non-
guarantor
subsidiaries
 Eliminations Unilever
Group
 
  

Unilever

Capital

     

Unilever

United

       
   

 

 

Corporation

subsidiary

issuer

  

  

  

   

 

 

Unilever

parent

entities

(a) 

  

  

  

 

 

States Inc.

subsidiary

guarantor

  

  

  

  

 

 

Non-

guarantor

subsidiaries

  

  

  

 Eliminations    

 

Unilever

Group

  

  

Balance sheetat 31 December 2012       (Restated)   (Restated)     (Restated)  

Assets

                

Non-current assets

                

Goodwill and intangible assets

        120        18,113        18,233          1,330       20,388       21,718  

Property, plant and equipment

                7,854        7,854                 9,445       9,445  

Pension asset for funded schemes in surplus

        6    14    890        910                 758       758  

Deferred tax assets

            383    224        607          103   251   696       1,050  

Financial assets

                511        511             1   534       535  

Other non-current assets

                523        523             7   529       536  

Amounts due from group companies(b)

   5,060     3,912        (3,912  (5,060    

Amounts due from group companies

   6,642            (26 (6,616    

Net assets of subsidiaries (equity accounted)

        38,986    11,662    (15,939  (34,709            40,627   15,710   (17,981 (38,356    
   5,060     43,024    12,059    8,264    (39,769  28,638     6,642     42,060   15,969   14,343   (44,972 34,042  

Current assets

                

Inventories

                4,307        4,307                 4,436       4,436  

Amounts due from group companies

        2,495    1,968    (4,463                5,050   2,087   (7,137        

Trade and other current receivables

        69    6    4,067        4,142          80   12   4,344       4,436  

Current tax assets

        213    77    8        298          287   98   (168     217  

Cash and cash equivalents

        3       2,462       2,465  

Other financial assets

                550        550                 401       401  

Cash and cash equivalents

            (3  2,319        2,316  

Non-current assets held for sale

                921        921                 192       192  
        2,777    2,048    7,709        12,534          5,420   2,197   4,530       12,147  

Total current assets

   5,060     45,801    14,107    15,973    (39,769  41,172  
Total assets   6,642     47,480   18,166   18,873   (44,972 46,189  

Liabilities

                

Current liabilities

                

Other financial liabilities

   224     560        1,492        2,276  

Amounts due to group companies(b)

   2,678     21,538    13    (24,229        

Financial liabilities

   691     1,250   3   712       2,656  

Amounts due to group companies

   1,859     28,132       (29,991        

Trade payables and other current liabilities

   24     171    16    10,028        10,239     46     181   33   11,408       11,668  

Current tax liabilities

   1     266    6    369        642          304       825       1,129  

Provisions

        126        295        421          34       327       361  

Liabilities associated with assets held for sale

                30        30                 1       1  
   2,927     22,661    35    (12,015      13,608     2,596     29,901   36   (16,718     15,815  

Non-current liabilities

                

Financial liabilities

   1,853     4,099        1,306        7,258     3,766     2,058       1,741       7,565  

Amounts due to group companies(b)

        4,407    5,062    (4,409  (5,060    

Amounts due to group companies

           6,701   (85 (6,616    

Pensions and post-retirement healthcare liabilities

                

Funded schemes in deficit

                1,081        1,081          2   174   1,884       2,060  

Unfunded schemes

        95    610    1,194        1,899          110   580   1,350       2,040  

Provisions

        21    2    863        886          12   1   833       846  

Deferred tax liabilities

        29        851        880                 1,414       1,414  

Other non-current liabilities

        4    119    359        482          5   81   414       500  
   1,853     8,655    5,793    1,245    (5,060  12,486     3,766     2,187   7,537   7,551   (6,616 14,425  

Total liabilities

   4,780     31,316    5,828    (10,770  (5,060  26,094     6,362     32,088   7,573   (9,167 (6,616 30,240  

Equity

                

Shareholders’ equity

                

Called up share capital

        484                484          484               484  

Share premium account

        134    106    (106      134          140   942   (942     140  

Other reserves

   6     (5,406  (619  (981  1,594    (5,406   5     (6,196 (612 (1,695 2,302   (6,196

Retained profit

   274     19,273    8,792    27,237    (36,303  19,273     275     20,964   10,263   30,120   (40,658 20,964  

Total equity

   280     14,485    8,279    26,150    (34,709  14,485  
   280     15,392   10,593   27,483   (38,356 15,392  

Non-controlling interests

                593        593                 557       557  

Total equity

   280     14,485    8,279    26,743    (34,709  15,078     280     15,392   10,593   28,040   (38,356 15,949  

Total liabilities and equity

   5,060     45,801    14,107    15,973    (39,769  41,172     6,642     47,480   18,166   18,873   (44,972 46,189  

 

(a) 

The term ‘Unilever parent entities’ includes Unilever N.V. and Unilever PLC. Though Unilever N.V. and Unilever PLC are separate legal entities, with different shareholder constituencies and separate stock exchange listings, they operate as nearly as practicable as a single economic entity. Debt securities issued by entities in the Unilever Group are fully and unconditionally guaranteed by both Unilever N.V. and Unilever PLC.

(b)

Figures revised from 2010 20-F to reflect amounts due from/to group companies. These figures are eliminated on consolidation.

In addition, the 2010 balance sheet for Unilever Group and non guarantor subsidiaries have been restated to include further facts and circumstances relating to the Sara Lee acquisition which if known would have affected the measurement of the amounts recognised at that date. The information set forth under the heading’ Note 21 Acquisitions and disposals’ on pages 105 to 106 of the Group’s Annual Report and Accounts 2011 furnished separately on 2 March 2012 under Form 6-K is incorporated by reference.

 

 

2826                Form 20-F UnileverAnnual Report on Form 20-F 20112013


ITEM 18. FINANCIAL STATEMENTSForm 20-FCONTINUED

 

   million  million  million  million  million  million    million  million  million  million  million  million 

Cash flow statement

for the year ended 31 December 2011

  Unilever
Capital
Corporation
subsidiary
issuer
 Unilever(a)
parent
entities
 Unilever
United
States Inc.
subsidiary
guarantor
 Non-
guarantor
subsidiaries
 Eliminations Unilever
Group
 

Cash flow statement

for the year ended 31 December 2013

   

 

 

 

 

Unilever

Capital

Corporation

subsidiary

issuer

  

  

  

  

  

  

 

 

Unilever

parent

entities

(a) 

  

  

  

 

 

 

 

Unilever

United

States Inc.

subsidiary

guarantor

  

  

  

  

  

  

 

 

Non-

guarantor

subsidiaries

  

  

  

  Eliminations    

 

Unilever

Group

  

  

Cash flow from operating activities

   1    512    56    7,530        8,099  

Income tax

       (110  (223  (1,472      (1,805
Net cash flow from operating activities   1    402    (167  6,058        6,294  

Interest received

               100        100  

Net capital expenditure

       (464      (1,563      (2,027

Acquisitions and disposals

       21        932        911  

Other investing activities

   (1,465  (1,042  (107  1,004    1,465    (145
Net cash flow from/(used in) investing activities   (1,465  (1,527  (107  473    1,465    (1,161

Dividends paid on ordinary share capital

       (41  (1,092  (1,860      (2,993

Interest and preference dividends paid

   (152  (128      (231      (511

Acquisition of non-controlling interest

       (2,515      (386      (2,901

Change in financial liabilities

   275    1,192        (203      1,264  

Other movement in treasury stocks

       163    (32  (107      24  

Other finance activities

   1,337    2,402    1,398    (3,945  (1,465  (273
Net cash flow from/(used in) financing activities   1,460    1,073    274    (6,732  (1,465  (5,390

Net increase/(decrease) in cash and cash equivalents

   (4  (52      (201      (257
Cash and cash equivalents at the beginning of the year       3    (3  2,217        2,217  

Effect of foreign exchange rate changes

   4    52        28        84  
Cash and cash equivalents at the end of the year       3    (3  2,044        2,044  
   million  million  million  million  million  million 

Cash flow statement

for the year ended 31 December 2012

   

 

 

 

 

Unilever

Capital

Corporation

subsidiary

issuer

  

  

  

  

  

  

 

 

Unilever

parent

entities

(a) 

  

  

  

 

 

 

 

Unilever

United

States Inc.

subsidiary

guarantor

  

  

  

  

  

  

 

 

Non-

guarantor

subsidiaries

  

  

  

 Eliminations    

 

Unilever

Group

  

  

Cash flow from operating activities

   (1  61    (56  6,635        6,639        478   3   8,035       8,516  

Income tax

       (71  (84  (1,032      (1,187      (89 (135 (1,456     (1,680

Net cash flow from operating activities

   (1  (10  (140  5,603        5,452        389   (132 6,579       6,836  

Interest received

   128    56    108    (77  (122  93                146       146  

Net capital expenditure

       (27      (1,947      (1,974      (1,176     (967)       (2,143

Acquisitions and disposals

       (37      (1,683      (1,720              113       113  

Other investing activities

   (2,362  (1,134  (927  726    2,831    (866   (1,181 5,838   (98 (4,575 1,145   1,129  

Net cash flow from/(used in) investing activities

   (2,234  (1,142  (819  (2,981  2,709    (4,467   (1,181 4,662   (98 (5,283 1,145   (755

Dividends paid on ordinary share capital

       137        (2,622      (2,485      (1,368 (917 (414)       (2,699

Interest and preference dividends paid

   (112  (217  (119  (170  122    (496   (147 (177     (182     (506

Change in borrowing and finance leases

   2,345    648    281    764    (281  3,757     (93 (1,866     (1,050     (3,009

Other movement in treasury stocks

       151    (37  (84      30        187   (64 (75     48  

Other finance activities

       475    836    844    (2,550  (395   1,421   (1,814 1,210   (128 (1,145 (456

Net cash flow from/(used in) financing activities

   2,233    1,194    961    (1,268  (2,709  411     1,181   (5,038 229   (1,849 (1,145 (6,622

Net increase/(decrease) in cash and cash equivalents

   (2  42    2    1,354        1,396        13   (1 (553     (541

Cash and cash equivalents at the beginning of the year

           (3  1,969        1,966        1   (3 2,980       2,978  

Effect of foreign exchange rate changes

   2    (41  (2  (343      (384      (11 1   (210     (220

Cash and cash equivalents at the end of the year

       1    (3  2,980        2,978        3   (3 2,217       2,217  
       
   million  million  million  million  million  million 

Cash flow statement

for the year ended 31 December 2010

  Unilever
Capital
Corporation
subsidiary
issuer
 Unilever(a)
parent
entities
 Unilever
United
States Inc.
subsidiary
guarantor
 Non-
guarantor
subsidiaries
 Eliminations Unilever
Group
 

Cash flow from operating activities

       447    (81  6,452        6,818  

Income tax

       (82  (148  (1,098      (1,328

Net cash flow from operating activities

       365    (229  5,354        5,490  

Interest received

   184    82        (385  189    70  

Net capital expenditure

       (10      (1,691      (1,701

Acquisitions and disposals

       (54      (307      (361

Other investing activities

   1,073    (9  2,564    (1,059  (1,741  828  

Net cash flow from/(used in) investing activities

   1,257    9    2,564    (3,442  (1,552  (1,164

Dividends paid on ordinary share capital

       (55  (2,276  8        (2,323

Interest and preference dividends paid

   (198  (104  (10  7    (189  (494

Change in borrowing and finance leases

   (1,062  (147  (52  (1,853  1,741    (1,373

Other movement in treasury stocks

       (130      6        (124

Other finance activities

               (295      (295

Net cash flow from/(used in) financing activities

   (1,260  (436  (2,338  (2,127  1,552    (4,609

Net increase/(decrease) in cash and cash equivalents

   (3  (62  (3  (215      (283

Cash and cash equivalents at the beginning of the year

       14    (3  2,386        2,397  

Effect of foreign exchange rate changes

   3    48    3    (202      (148

Cash and cash equivalents at the end of the year

           (3  1,969        1,966  

 

(a) 

The term ‘Unilever parent entities’ includes Unilever N.V. and Unilever PLC. Though Unilever N.V. and Unilever PLC are separate legal entities, with different shareholder constituencies and separate stock exchange listings, they operate as nearly as practicable as a single economic entity. Debt securities issued by entities in the Unilever Group are fully and unconditionally guaranteed by both Unilever N.V. and Unilever PLC.

 

 

UnileverAnnual Report on Form 20-F 20112013

   29Form 20-F                27  


ITEM 18. FINANCIAL STATEMENTSForm 20-FCONTINUED

 

   million  million  million  million  million  million    million  million  million  million  million  million 

Cash flow statement

for the year ended 31 December 2009

  Unilever
Capital
Corporation
subsidiary
issuer
 Unilever(a)
parent
entities
 Unilever
United
States Inc.
subsidiary
guarantor
 Non-
guarantor
subsidiaries
 Eliminations Unilever
Group
 

Cash flow statement

for the year ended 31 December 2011

   

 

 

 

 

Unilever

Capital

Corporation

subsidiary

issuer

  

  

  

  

  

  

 

 

Unilever

parent

entities

(a) 

  

  

  

 

 

 

 

Unilever

United

States Inc.

subsidiary

guarantor

  

  

  

  

  

  

 

 

Non-

guarantor

subsidiaries

  

  

  

 Eliminations    

 

Unilever

Group

  

  

Cash flow from operating activities

   13    98    71    6,551        6,733     (1 61   (56 6,635       6,639  

Income tax

       (128  (52  (779      (959      (71 (84 (1,032     (1,187

Net cash flow from operating activities

   13    (30  19    5,772        5,774     (1 (10 (140 5,603       5,452  

Interest received

   186    61    (10  27    (191  73     128   56   108   (77 (122 93  

Net capital expenditure

       (6      (1,252      (1,258      (27     (1,947     (1,974

Acquisitions and disposals

               (139      (139      (37     (1,683     (1,720

Other investing activities

       403        (292  (50  61     (2,362 (1,134 (927 726   2,831   (866

Net cash flow from/(used in) investing activities

   186    458    (10  (1,656  (241  (1,263   (2,234 (1,142 (819 (2,981 2,709   (4,467

Dividends paid on ordinary share capital

       307        (2,413      (2,106      137       (2,622     (2,485

Interest and preference dividends paid

   (167  (201      (340  191    (517   (112 (217 (119 (170 122   (496

Change in borrowing and finance leases

   (31  (694  3    (895  50    (1,567   2,345   648   281   764   (281 3,757  

Other movement in treasury stocks

       167    (11  (53      103        151   (37 (84     30  

Other finance activities

               (214      (214      475   836   844   (2,550 (395

Net cash flow from/(used in) financing activities

   (198  (421  (8  (3,915  241    (4,301   2,233   1,194   961   (1,268 (2,709 411  

Net increase/(decrease) in cash and cash equivalents

   1    7    1    201        210     (2 42   2   1,354       1,396  

Cash and cash equivalents at the beginning of the year

   (3  7    (4  2,360        2,360            (3 1,969       1,966  

Effect of foreign exchange rate changes

   2            (175      (173   2   (41 (2 (343     (384

Cash and cash equivalents at the end of the year

       14    (3  2,386        2,397        1   (3 2,980       2,978  

 

(a) 

The term ‘Unilever parent entities’ includes Unilever N.V. and Unilever PLC. Though Unilever N.V. and Unilever PLC are separate legal entities, with different shareholder constituencies and separate stock exchange listings, they operate as nearly as practicable as a single economic entity. Debt securities issued by entities in the Unilever Group are fully and unconditionally guaranteed by both Unilever N.V. and Unilever PLC.

ItemITEM 19. ExhibitsEXHIBITS

Please refer to the exhibit list located immediately following the signature page for this Form 20-F as filed with the SEC.

 

 

3028                Form 20-F UnileverAnnual Report on Form 20-F 20112013


Form 20-F

Designed and produced by Addison Group at www.addison-group.net.

UnileverAnnual Report on Form 20-F 2011

31


Form 20-F

32UnileverAnnual Report on Form 20-F 2011


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FOR FURTHER INFORMATION ON OUR

SOCIAL, ECONOMIC AND ENVIRONMENTAL

PERFORMANCE, PLEASE VISIT OUR WEBSITE:

Unilever N.V.WWW.UNILEVER.COM

  Unilever PLC registered office
Weena 455, PO Box 760Unilever PLC
3000 DK RotterdamPort Sunlight
The NetherlandsWirral
T +31 (0)10 217 4000Merseyside CH62 4ZD
F +31 (0)10 217 4798United Kingdom
Commercial Register RotterdamRegistered in England and Wales
Number: 24051830Company Number: 41424
Unilever PLCwww.unilever.com
Unilever House
100 Victoria Embankment
London EC4Y 0DY
United Kingdom
T +44 (0)20 7822 5252
F +44 (0)20 7822 5951

 

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SIGNATURES

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorised the undersigned to sign this Annual Report on its behalf.

 

Unilever PLC.PLC

(Registrant)

/s/ T. E. Lovell

T. E. LOVELL,

Group Secretary

Date: 27 March, 20122014


UNILEVER PLC — 20-F EXHIBIT LIST

UNILEVER PLC — 20-F EXHIBIT LIST

 

Exhibit Number

 

Description of Exhibit

1.1 Articles of Association of Unilever PLC 1
2.1 Indenture dated as of August 1, 2000, among Unilever Capital Corporation, Unilever N.V., Unilever PLC, Unilever United States, Inc. and The Bank of New York, as Trustee, relating to Guaranteed Debt Securities 12
2.2 Trust Deed dated as of July 22, 1994, among Unilever N.V., Unilever PLC, Unilever Capital Corporation, Unilever United States, Inc. and The Law Debenture Trust Corporation p.l.c., relating to Guaranteed Debt Securities 23
4.1 Equalisation Agreement between Unilever N.V. and Unilever PLC 34
4.2 Service Contracts of the Executive Directors of Unilever PLC 45
4.3 Letters regarding compensation of Executive Directors of Unilever PLC
4.4 Unilever North America 2002 Omnibus Equity Compensation Plan 56
4.5 The Unilever PLC International 1997 Executive Share Option Scheme 67
4.6 The Unilever Long Term Incentive Plan 78
4.7 Global Share Incentive Plan 2007 89
4.8 The Management Co-Investment Plan 910
7.1Calculation of Ratio of Earnings to Fixed Charges
8.1 List of Subsidiaries 1011
12.1 Certifications of the Chief Executive Officer and Financial Director/Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
13.1 Certifications of the Chief Executive Officer and Financial Director/Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
15.1 Annual Report and Accounts sections incorporated by reference
15.2 Consent of PricewaterhouseCoopers Accountants N.V. and PricewaterhouseCoopers LLP
15.3Letter dated 7 March, 2014 of PricewaterhouseCoopers LLP and PricewaterhouseCoopers Accountants N.V.

Certain instruments which define rights of holders of long-term debt of the Company and its subsidiaries are not being filed because the total amount of securities authorized under each such instrument does not exceed 10% of the total consolidated assets of the Company and its subsidiaries. The Company and its subsidiaries hereby agree to furnish a copy of each such instrument to the Securities and Exchange Commission upon request.

 

 

 

1Incorporated by reference to Exhibit 1.1 of Form 20-F filed with the SEC on March 08, 2013.

2Incorporated by reference to the Form 6-K furnished to the SEC on October 23, 2000.

 

23Incorporated by reference to Exhibit 2.2 of Form 20-F filed with the SEC on March 28, 2002.

 

34Incorporated by reference to Exhibit 4.1 of Form 20-F filed with the SEC on March 5, 2010.


45Incorporated by reference to Exhibit 4.2 of Form 20-F filed with the SEC on March 4, 2011.


56Incorporated by reference to Exhibit 99.1 of Form S-8 filed with the SEC on February 27, 2003.

 

67Incorporated by reference to Exhibit 4.5 of Form 20-F filed with the SEC on March 28, 2002.

 

78Incorporated by reference to Exhibit 4.6 of Form 20-F filed with the SEC on March 28, 2002.

 

89Incorporated by reference to Exhibit 4.7 of Form 20-F filed with the SEC on March 26, 2008.

 

910Incorporated by reference to Exhibit 4.8 of Form 20-F filed with the SEC on March 4, 2011.

 

1011The required information is set forth on pages 109 to 110134 and 135 of the 20112013 Annual Report and Accounts.