Unilever Annual Report 2018

FY2018 Annual Report · Unilever

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This is a PDF version of the Annual Report on Form 20-F 2018 and is an exact
copy of the document filed with the SEC at www.sec.gov.

Certain sections of the Annual Report on Form 20-F 2018 have been audited.
These are on pages 75 to 127 and the Guarantor Statements on pages 158 to 162.

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The information is given as of the dates specified, is not updated, and any
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MAKING
SUSTAINABLE LIVING
COMMONPLACE

ANNUAL REPORT ON
FORM 20-F 2018

ANNUAL REPORT ON
FORM 20-F 2018
This document is made up of the Strategic Report, the Governance
Report, the Financial Statements and Notes, and Additional
Information for US Listing Purposes.

The Unilever Group consists of Unilever N.V. (NV) and Unilever PLC
(PLC) together with the companies they control. The terms “Unilever”,
the “Group”, “we”, “our” and “us” refer to the Unilever Group.

Our Strategic Report, pages 1 to 35, contains information about
us, how we create value and how we run our business. It includes
our strategy, business model, market outlook and key performance
indicators, as well as our approach to sustainability and risk. The
Strategic Report is only part of the Annual Report and Accounts 2018.
The Strategic Report has been approved by the Boards and signed
on their behalf by Ritva Sotamaa – Group Secretary.

Our Governance Report, pages 36 to 65 contains detailed corporate
governance information, our Committee reports and how we
remunerate our Directors.

Our Financial Statements and Notes are on pages 66 to 127.

Pages 1 to 147 constitute the Unilever Annual Report and Accounts
2018 for UK and Dutch purposes, which we may also refer to as
‘this Annual Report and Accounts’ throughout this document.

The Directors’ Report of PLC on pages 36 to 49, 66 (Statement
of Directors’ responsibilities), 97 (Dividends on ordinary capital),
110 to 115 (Treasury Risk Management), 133 and 137 (Post balance
sheet event) and 145 (branch disclosure) has been approved by the
PLC Board and signed on its behalf by Ritva Sotamaa – Group Secretary.

The Strategic Report, together with the Governance Report,
constitutes the report of the Directors within the meaning of Article
2:391 of the Dutch Civil Code and has been approved by the NV Board
and signed on its behalf by Ritva Sotamaa – Group Secretary.

Pages 148 to 167 are included as Additional Information for
US Listing Purposes.

ONLINE
You can find more information about Unilever online at

www.unilever.com

For further information on the Unilever Sustainable Living Plan
(USLP) visit

www.unilever.com/sustainable-living

The Annual Report on Form 20-F 2018 along with other relevant
documents can be downloaded at

www.unilever.com/ara2018/downloads

CONTENTS
Strategic Report ............................................................................... 1

About us .................................................................................................... 1

Chairman’s statement .............................................................................. 2

Board of Directors .................................................................................... 3

Chief Executive Officer’s review ............................................................... 4

Unilever Leadership Executive (ULE) ...................................................... 5

Our performance ...................................................................................... 6

Financial performance .......................................................................... 6

Unilever Sustainable Living Plan .......................................................... 7

A changing world ...................................................................................... 8

Our value creation model ......................................................................... 9

Our strategy ............................................................................................ 10

Delivering long-term value for our stakeholders ................................. 11

Our consumers .................................................................................... 11

Society and environment ..................................................................... 13

Sustainable Development Goals ......................................................... 15

Our people ............................................................................................ 16

Our partners ........................................................................................ 17

Our shareholders ................................................................................. 18

Non-financial information statement .................................................... 19

Financial Review ..................................................................................... 20

Risks ....................................................................................................... 27

Governance Report ..........................................................................36

Corporate Governance ........................................................................... 36

Report of the Audit Committee .............................................................. 43

Report of the Corporate Responsibility Committee .............................. 46

Report of the Nominating and
Corporate Governance Committee ........................................................ 48

Directors’ Remuneration Report ........................................................... 50

Financial Statements .......................................................................66

Statement of Directors’ responsibilities ................................................ 66

Independent auditors’ reports ............................................................... 67

Consolidated financial statements ........................................................ 75

Consolidated income statement ............................................................ 75

Consolidated statement of comprehensive income .............................. 75

Consolidated statement of changes in equity ....................................... 76

Consolidated balance sheet ................................................................... 77

Consolidated cash flow statement ........................................................ 78

Notes to the consolidated financial statements ................................... 79

Group Companies ..........................................................................138

Shareholder Information ...............................................................146

Index ..............................................................................................147

Additional Information for US Listing Purposes ............................148

ABOUT US

AT A GLANCE
OUR BRANDS ARE AVAILABLE IN OVER 190 COUNTRIES.
THIS GIVES US A UNIQUE OPPORTUNITY TO POSITIVELY
IMPACT THE LIVES OF PEOPLE ALL OVER THE WORLD.

OUR PURPOSE
UNILEVER’S PURPOSE IS TO MAKE SUSTAINABLE LIVING
COMMONPLACE. WE BELIEVE THIS IS THE BEST WAY TO
DELIVER LONG-TERM SUSTAINABLE GROWTH.

Every day, 2.5 billion people use our products to feel good, look good
and get more out of life. Our range of around 400 household brands
includes Lipton, Knorr, Dove, Rexona, Hellmann’s and Omo. We are
one of the largest fast moving consumer goods (FMCG) companies
globally. In 2018 we had 12 brands with turnover of over a billion euros
or more. The strength of our global brands is reflected in Kantar’s
Brand Footprint report published in May 2018. It found that 13 of
the world’s top 50 FMCG brands – based on market penetration and
consumer interactions – are owned by Unilever with these brands
chosen 36 billion times each year. This is significantly more than any
other FMCG company in the study.

Our portfolio also includes iconic local brands designed to meet the
specific needs of consumers in their home market such as Brooke
Bond in India and Brilhante in Brazil. We are increasingly seeing our
local brands and innovations being rolled out to more markets such
as Lakme and Breyers Delights. Our geographic reach gives us an
unparalleled global presence, including a unique position in emerging
markets which generate 58% of our turnover.

From the beginning of 2018, Unilever began operating across three
new Divisions created as part of our efforts to accelerate shareholder
value creation. The largest by turnover is Beauty & Personal Care
followed by Foods & Refreshment then Home Care. Details of each
can be found on pages 11 to 12. The sale of our spreads business was
also completed in mid-2018. These changes create a strong platform
to accelerate our strategy of long-term, sustainable shareholder value
creation. Our strategy is explained in detail on page 10.

Our business activities span a complex global value chain which
is described on page 9. At the heart of our business is a workforce
of 155,000 people (as at 31 December 2018) who are driven by our
purpose and empowered to excel in our fast-changing markets. The
combination of global scale and local agility has become yet more
effective through the continued implementation of our Connected 4
Growth (C4G) change programme to meet consumer trends which are
detailed on page 8. Our employees are supported by leadership teams
with representatives from over 70 countries. Of our business leaders,
80% are local to their markets reflecting the deep local expertise at
the heart of our business. This rises to more than 90% when we include
managers who support those teams.

In this volatile and uncertain world, protecting Unilever through the
fostering of business integrity is a non-negotiable for all employees.
Our Code of Business Principles (the Code), and the 24 policies
that support it (Code Policies), set out the behaviour standards
required from all our people. The Code Policies cover a number
of areas, including anti-bribery and corruption, respect, dignity
and fair treatment of people and personal data and privacy. Together,
the Code and Code Policies help us put our values of Integrity,
Respect, Responsibility and Pioneering into practice. See page 16
for more on our Code and Code Policies.

During the year the Boards withdrew proposals to simplify Unilever’s
dual-headed legal structure after extensive engagement with
shareholders. We remain firmly committed to our 2020 financial
programme and are confident of meeting its key targets and objectives
as our faster, simpler organisation delivers more efficiency, lower costs
and significant operational and financial benefits.

This Annual Report and Accounts provides further detail on our
performance during the year and how our business model is delivering
strong returns for shareholders and a more sustainable way of doing
business for the benefit of all our stakeholders. Find out more about
our performance on pages 6 and 7.

We believe long-term sustainable growth is best delivered through
brands that offer great performance and have a genuine purpose.
Washing shirts whiter or making hair healthier and shinier is still
vitally important, but product performance by itself is no longer
enough. Consumers are looking for more.

At Unilever, we encourage our brand managers to take a stance and
make a positive difference to society. Purpose defines a brand in
people's minds and is best delivered through action. It's only through
action that consumers will see purpose as more than marketing.

Our company purpose ‘To make sustainable living commonplace’
is unequivocal. We want to help create a world where everyone can
live well within the natural limits of the planet. We put sustainable
living at the heart of everything we do, including our brands and
products, our standards of behaviour and our partnerships which
drive transformational change across our value chain.

Purpose takes many forms amongst our brands. Some, like Lifebuoy,
take on life-threatening diseases associated with poor hygiene with
programmes to change handwashing behaviour. Domestos' purpose
is to improve sanitation for millions of people who do not have access
to a toilet. Our brands can also be a catalyst to promote positive
cultural norms. Brooke Bond's purpose 'Common ground is only
a cup away' is highly relevant in an increasingly divided world and
can be applied well locally. In India, it addresses religious tensions.
In the Gulf, divorce. In Canada, same-sex relationships.

Some of our brands take an activist stance, mobilising citizens to
change policy or create social movements. For example, Ben &
Jerry's builds movements around issues such as climate change
and the refugee crisis. Seventh Generation – with its plant-based
products – campaigns for renewable energy. Deodorant brand
Rexona's purpose is to help reverse physical inactivity, a big issue
for societies facing increasingly sedentary lifestyles. Rexona believes
'the more you move, the more you live' supported by Motion Sense
technology which works through movement. Radiant believes everyone
deserves an opportunity to shine. It goes beyond bright clothes and
helping consumers 'dress to progress', enhancing skills through its
Career Academies. Each market focuses on the skills that matter
locally. In Brazil that's entrepreneurial and business skills. In India,
English language skills.

All of Unilever's brands are on a journey to becoming purposeful.
Sustainable Living brands are those that are furthest ahead. In 2017,
26 of our brands qualified as Sustainable Living brands including our
B-Corp certified brands such as Ben & Jerry's, Seventh Generation
and Pukka Herbs, which means that they meet high standards of
social and environmental performance, transparency and legal
accountability. Our Sustainable Living brands grew 46% faster than the
rest of the business and delivered more than 70% of Unilever’s growth,
driven by consumer demand for brands with purpose at their core.

However volatile and uncertain the world is, Unilever’s purpose –
supported by the Unilever Sustainable Living Plan (USLP) and brands
with purpose – will remain steadfast because managing for the
benefit of multiple stakeholders is the best way for us to grow.

We are now looking beyond the current USLP as many of our
targets end in 2020. We carried out an extensive listening exercise
on the future of sustainable business. We spoke to approximately
300 stakeholders, including more than 130 external experts, and
heard from over 40,000 employees through a ‘Have Your Say’
survey. They gave us their views on the priorities that they would
like Unilever to focus on. The results will be used to co-create
Unilever’s future agenda.

Strategic ReportAnnual Report on Form 20-F 2018CHAIRMAN’S STATEMENT

2018 PERFORMANCE
I am pleased to report that 2018 was another year of consistent top
and bottom line performance for Unilever. Solid revenue growth was
combined with good profitability and cash flow delivery. This despite
a challenging year for the global economy, with subdued growth and
high levels of volatility undermining consumer confidence in many
parts of the world.

Unilever is also operating in a sector that is experiencing widespread
change and disruption. Although challenging, these changes offer
significant opportunities to companies able to move with speed
and agility and who can tailor their offering to changing consumer
preferences. To that end, the Boards are very confident that Unilever's
strategy and the measures it has taken to strengthen its organisation,
sharpen its portfolio and digitise its operations make it well placed
to capture new and emerging growth opportunities.

The Boards also believe that the Unilever Sustainable Living Plan
continues to set Unilever apart as a business highly attuned to the
growing desire among consumers for companies and brands that
serve a wider societal and environmental need.

In 2018 we also completed successfully the complex disposal of the
spreads business. Our Share Buy-back programme delivered on
its intention to buy back shares with an aggregate market value of
€6 billion, in line with Unilever's objective to return the after-tax
proceeds of the spreads disposal to shareholders.

SIMPLIFICATION
Following a thorough review and widespread consultation, the Boards
put forward proposals in 2018 to simplify Unilever’s dual-headed
structure under a new single holding company.

In developing the proposal – including a recommendation to
incorporate in the Netherlands while maintaining listings in the
Netherlands, the UK and the US – the Boards were motivated by the
opportunity to unlock value by simplifying Unilever and giving it added
flexibility to compete effectively over the longer-term.

We recognised however that the proposal did not receive support
from a significant group of shareholders and therefore considered
it appropriate to withdraw. The Boards still believe that simplifying
Unilever’s dual-headed structure would, over time, provide opportunities
to further accelerate value creation and would serve Unilever’s best
long-term interests.

Since withdrawing the proposal, I have met with a significant number
of PLC and NV shareholders to discuss further ideas and possible next
steps. It is clear from all these meetings that there is widespread support
for the principles and strategic rationale behind Simplification. In these
meetings, I also took the opportunity to reaffirm our commitment
to further strengthen our corporate governance. Accordingly, in
February 2019, we followed through on our commitment to cancel the
NV Preference Shares, in itself a major step towards simplifying the
company’s share capital.

BOARD COMPOSITION AND SUCCESSION
The 2018 AGMs marked the retirement of Ann Fudge as a Non-Executive
Director and Vice-Chairman of the Boards. On behalf of the Boards,
I would like to thank Ann for her outstanding and valued contribution
to Unilever.

I was also delighted that you elected Andrea Jung as a Non-Executive
Director at the same AGMs. Andrea brings highly relevant experience
and expertise to Unilever and is a very welcome addition to the Boards.

CEO SUCCESSION
A key focus for the Boards last year was to manage the CEO
succession, with Paul Polman stepping down as CEO after 10 years
with the Group.

After a rigorous and wide-ranging selection process, the Boards were
unanimous in its decision to appoint Alan Jope to the role. Alan became
CEO on 1 January 2019 and is being proposed as an Executive Director
at the 2019 AGMs.

Alan has led Unilever's largest Division, Beauty & Personal Care,
for the last four years and he has been a member of the Group's
Leadership Executive since 2011. His previous roles include running
Unilever’s business in North Asia. Alan has deep understanding and
wide experience of Unilever’s business and markets. He is a strong,
dynamic and values-driven leader with an impressive track record of
delivering consistent high-quality performance across both developed
and emerging markets. The Boards warmly welcome Alan to the role
and look forward to working closely with him in the years ahead.

Unilever has been transformed under the leadership of Paul Polman.
He has overseen ten years of consistent top and bottom line growth
and very competitive returns to shareholders. He leaves with the
company’s geographic footprint and brand portfolio stronger and
well positioned for future growth.

Paul’s pioneering commitment to sustainable and equitable growth have
marked him – and the company – out as leaders in the field. Thanks to
his visionary leadership and tireless efforts, Unilever is not only one of
the most admired and respected companies in the world today, but also
one of the most desired employers.

Paul retired as CEO and as a Board member on 31 December 2018.
He will support the transition process in the first half of 2019 and
will leave the Group in early July. We thank him for his remarkable
contribution to the company and wish him every success in the future.

REMUNERATION
During 2018 we also continued to consult with shareholders on our
Remuneration Policy, particularly for the Executive Directors. At the
2017 AGMs you provided your strong support to the implementation
of a reward framework that encourages and enhances a strong
performance culture by enabling Unilever managers to have an even
stronger personal commitment to Unilever share ownership.

At the 2018 AGMs, we asked shareholders to approve a new
Remuneration Policy that would align the pay of our Executive
Directors fully with the Reward Framework we introduced following
the 2017 AGMs. Whilst shareholders approved the new Remuneration
Policy, we recognised that a significant minority of NV and PLC
shareholders voted against the proposal. On pages 50 and 51 of
the 2018 Directors' Remuneration Report, we describe in detail the
principal concerns and how we responded to them and other changes
to the implementation of the Remuneration Policy.

EVALUATION
Following the external Board evaluation in 2017, we used a simplified
internal evaluation this year. While we concluded that the Boards
continued to operate in an effective manner overall, the Boards decided
that it will maintain a particular focus on portfolio and channel strategies
and digitisation. Each Board Committee also performed its own
self-evaluation, agreeing areas where it could enhance its effectiveness
further. These are described within each Committee Report.

LOOKING AHEAD
Even though trading conditions are likely to remain challenging in
2019, the Boards remain confident both in the outlook and in the
strategy for the Group, reflected by an 8% increase in the dividend
for the 2018 financial year.

Over the year, Board members have visited Unilever operations in
several parts of the world, including China and the United States. We
have seen first-hand the depth of talent that exists within the company,
as well as the commitment of Unilever people to go on improving the
lives of consumers and the societies in which the company operates.
On behalf of the Boards, I want to thank all of the 155,000 employees
of Unilever for their remarkable efforts.

Equally we have been pleased to engage with many of the company’s
other stakeholders, without whom Unilever could not be successful.
That includes our shareholders, who I also want to thank for their
continued support of the company.

MARIJN DEKKERS
CHAIRMAN

Strategic ReportAnnual Report on Form 20-F 2018BOARD OF DIRECTORS

OVERVIEW OF EXECUTIVE & NON-EXECUTIVE DIRECTORS

MARIJN DEKKERS Chairman

Previous experience: Bayer AG (CEO); Thermo Fisher Scientific Inc. (CEO).
Current external appointments: Novalis LifeSciences LLC (Founder and Chairman); Quanterix Corporation (Director); Georgetown University (member Board of Directors); Foundation for the National
Institutes of Health (Director).

YOUNGME MOON
Vice-Chairman/Senior
Independent Director

Previous experience: Harvard Business
School (Chairman and Senior Associate
Dean for the MBA Program); Massachusetts
Institute of Technology (Professor);
Avid Technology (NED).
Current external appointments: Sweetgreen
Inc (Board Member); Jand Inc (Board
Member); Harvard Business School
(Professor).

ALAN JOPE
CEO

GRAEME PITKETHLY
CFO

NILS SMEDEGAARD
ANDERSEN

Nationality British Age 54, Male. Appointed
CEO: January 2019. Appointed Director:
Alan Jope will be proposed for election as an
Executive Director at the 2019 AGMs.
Previous experience: Beauty and Personal
Care Division (President); Unilever Russia,
Africa and Middle East (President); Unilever
North Asia (President); SCC and Dressings
(Global Category Leader); Home and Personal
Care North America (President).

Nationality British Age 52, Male. Appointed
CFO: October 2015. Appointed Director: April
2016. Attended 6/6 planned Board Meetings
and 4/4 ad hoc Board Meetings.
Previous experience: Unilever UK and Ireland
(EVP and General Manager); Finance Global
Markets (EVP); Group Treasurer; Head of M&A;
FLAG Telecom (VP Corporate Development); PwC.
Current external appointments: Financial
Stability Board Task Force on Climate
Related Financial Disclosure (Vice Chair).

Previous experience: A.P. Moller – Maersk
A/S (Group CEO); Carlsberg A/S and Carlsberg
Breweries A/S (CEO); European Round Table
of Industrialists (Vice-Chairman); Unifeeder
S/A (Chairman).
Current external appointments: AKZO
Nobel N.V. (Chairman); BP Plc (NED); Dansk
Supermarked A/S (Chairman); Faerch Plast
(Chairman).

LAURA CHA

VITTORIO COLAO

JUDITH HARTMANN

ANDREA JUNG

Previous experience: Securities and Futures
Commission, Hong Kong (Deputy Chairman);
China Securities Regulatory Commission
(Vice Chairman); China Telecom Corporation
Limited (NED); 12th National People’s
Congress of China (Hong Kong Delegate).
Current external appointments: HSBC
Holdings plc (NED); Hong Kong Exchanges
and Clearing Ltd (Non-Executive Chairman);
Foundation Asset Management Sweden
AB (Senior international adviser); Executive
Council of the Hong Kong Special
Administrative Region (Non-official member).

Previous experience: Vodafone Group plc
(CEO); RCS MediaGroup SpA (CEO); McKinsey
& Company (Partner); Finmeccanica Group
Services SpA (renamed to Leonardo SpA)
(NED); RAS Insurance SpA (merged with
Allianz AG) (NED).
Current external appointments: Bocconi
University (NED and Executive Committee
member); Oxford Martin School (Advisor).

Previous experience: General Electric
(various roles); Bertelsmann SE & Co. KGaA
(CFO); RTL Group SA (NED); Penguin Random
House LLC (NED).
Current external appointments: ENGIE Group
(CFO and EVP North America and UK/Ireland);
Suez (NED).

Previous experience: Avon Products Inc
(CEO); General Electric (Board Member);
Daimler AG (Board Member).
Current external appointments: Grameen
America Inc (President and CEO); Apple Inc
(NED); Wayfair Inc (NED).

MARY MA

STRIVE MASIYIWA

JOHN RISHTON

FEIKE SIJBESMA

Previous experience: TPG Capital, LP
(Partner); TPG China Partners (Co-Chairman).
Current external appointments: Lenovo
Group Ltd. (NED); Boyu Capital Consultancy
Co. Ltd (Managing Partner); MXZ Investment
Limited (Director); Securities and Futures
Commission, Hong Kong (NED).

Previous experience: Africa Against Ebola
Solidarity Trust (Co-Founder and Chairman);
Grow Africa (Co-Chairman); Nutrition
International (formerly known as Micronutrient
Initiative) (Chairman).
Current external appointments: Econet
Group (Founder and Group Executive
Chairman); Econet Wireless Zimbabwe Ltd
(Director); The Alliance for a Green Revolution
in Africa (AGRA) Not-for-Profit Corporation
(Chairman); Rockefeller Foundation (Trustee).

Previous experience: Rolls-Royce Holdings
plc (CEO); Koninklijke Ahold NV (merged
to Koninklijke Ahold Delhaize NV) (CEO,
President and CFO); ICA (now ICA Gruppen
AB) (NED).
Current external appointments: Informa plc
(NED); Serco Group plc (NED); Associated
British Ports Holdings Ltd. (NED).

Previous experience: Supervisory Board of
DSM Nederland B.V. (Chairman); Utrecht
University (Supervisory Director); Stichting Dutch
Cancer Institute/ Antoni van Leeuwenhoek
Hospital NKI/AVL) (Supervisory Director).
Current external appointments: Koninklijke
DSM NV (CEO and Chairman of the Managing
Board); De Nederlandsche Bank NV (Member
of the Supervisory Board); Carbon Pricing
Leadership Coalition (High Level Assembly
Co-Chairman), Climate Leader for the World
Bank Group.

NON-EXECUTIVE DIRECTORS

Age

Gender

Nationality

Appointment date

Committee membership*

Leadership of complex global entities

Broad Board experience

Geo-political exposure

Financial expertise

FMCG/consumer insights

Emerging markets experience

Digital insights

Marketing and sales expertise

Science, technology and innovation expertise

CSR experience

HR and remuneration in international firms

Attendance at planned Board Meetings

Attendance at ad hoc Board Meetings

Tenure as at 2018 AGMs

MARIJN
DEKKERS

NILS
ANDERSEN

LAURA
CHA

VITTORIO
COLAO

JUDITH
HARTMANN

ANDREA
JUNG

MARY
MA

STRIVE
MASIYIWA

YOUNGME
MOON

JOHN
RISHTON

FEIKE
SIJBESMA

Male

Female

Male

Female

Male

Female

Male

Dutch /
American

April
2016

CC, NCGC
(Chairman)



6/6

4/4

Danish

Chinese

Italian

Austrian

April
2015

May
2013

July
2015

NCGC

CC
(Chairman)



6/6

2/4



6/6

2/4



6/6

4/4

April
2015



6/6

3/4

American /
Canadian

May
2018

Chinese

Zimbabwean American

British

Dutch

May
2013

April
2016

CRC
(Chairman)

April
2016

CRC

May
2013

November
2014

AC
(Chairman)

CRC, NCGC



3/3



6/6

4/4



6/6

3/4



6/6

4/4



6/6

3/4



6/6

4/4

AC refers to the Audit Committee; CC refers to the Compensation Committee; CRC refers to the Corporate Responsibility Committee; and NCGC refers to the
Nominating and Corporate Governance Committee.

Strategic ReportAnnual Report on Form 20-F 2018CHIEF EXECUTIVE OFFICER’S REVIEW

Widespread economic and geopolitical uncertainty meant that the
global business environment remained challenging in 2018. Currency
depreciation in a number of key markets fuelled inflationary pressures
and dampened consumer demand, while input costs rose steadily on
the back of escalating commodity prices.

new and faster-growing channels. Our e-commerce sales were up
by 47%, ahead of global e-commerce market growth and putting
us well on the road to building a scale e-commerce business. We
also accelerated the growth of our business with Discounters, in the
Health and Beauty channel and in the out-of-home eating market.

A SOLID PERFORMANCE
Against this backdrop, Unilever delivered a solid performance.
Underlying sales grew by 3.1%, excluding the recently-divested
spreads business (2.9% including spreads). Growth was profitable,
bringing our underlying operating margin to 18.4%, up 90 basis points,
which also drove a healthy free cash flow of €5 billion for the year.

Importantly, the overall shape and quality of the performance was
encouraging. We achieved a good balance of price and volume growth.
Growth was broad-based, across each of our three global Divisions –
Beauty & Personal Care, Home Care and Foods & Refreshment. Our
continuing margin progression was underpinned by well-embedded
savings and efficiency programmes, and an improving mix from
underlying sales growth in Beauty & Personal Care.

Inspired by the Unilever Sustainable Living Plan, we also saw
our brands with the most distinct and well-articulated social and
environmental purpose grow significantly faster than our other brands.

The performance last year demonstrates I believe that our strategy is
working. By empowering our three global Divisions, we are allowing
for more strategic allocation of resource and for greater differentiation
in meeting changing consumer needs. Beauty & Personal Care, for
example, made good progress in moving to more premium positions
and expanding in the high growth segments. Home Care built on its
already strong emerging market footprint with a strategy of market
development and benefit-led innovation for emerging needs. Whilst
Foods & Refreshment was combined into a single division bringing
more scale and focus to allow faster transformation of our portfolio.

The results in 2018 re-affirm the enduring strength of Unilever’s
brands and the growing resilience of our organisational model, as well
as underlining Unilever’s ability to deliver consistent top and bottom
line performance even in very challenging conditions. Nevertheless,
we are determined to step up the proportion of our business that
is winning market share as part of moving our sales growth more
consistently into the middle of our multi-year 3-5% targeted range.

A YEAR OF PROGRESS
As well as delivering a solid set of results, we also made good
progress in 2018 in strengthening the overall business to be ready
for future opportunities:

• By empowering those closest to the marketplace, and by linking

our global brand teams across the world, our Connected for Growth
(C4G) organisational model is helping to increase speed and agility,
as well as giving rise to a greater entrepreneurial spirit inside
the company. As an illustration of this, time to market with new
innovations to meet local trends is now 40%-50% faster compared
to 2016. We also launched 19 new brands, including Love Home
and Planet, a range of plant-based, home-cleaning products and
a follow-up to our successful launch of the natural and sustainable
hair and skincare product range, Love Beauty and Planet.

• In line with our strategy, we continued to move the portfolio in the

direction of the faster-growing segments of the market, especially
those that speak to consumers’ growing desire for more natural
products and purpose-driven brands. The vast majority of
businesses we have acquired over recent years are now growing by
double digits on a yearly basis and we were delighted at the end of
last year to announce the acquisition of GlaxoSmithKline's Health
Food Drinks portfolio, including its iconic Horlicks brand in India
and the rest of Asia, further increasing our presence in the highly
attractive health-food category. We also completed successfully the
complex disposal of the spreads business, returning the after-tax
proceeds to shareholders.

• The digital transformation of the company also continues apace. We
are working successfully with leading global technology companies
to build world-class technology and data analytics infrastructure.
Through the sophisticated and responsible leveraging of our data
insights, we are close to reaching our goal of being able to connect
directly with a billion of our consumers. In our operations, we have
already automated over 700 processes – saving time and reducing
cost – and our in-house training programmes are increasingly
focussed on the digital up-skilling of our own people.

• Our attractiveness as an employer of choice grew still further in

2018. Unilever is now the number one FMCG graduate employer of
choice in almost 50 countries. That is a remarkable achievement,
and testament to Unilever’s values and commitment to be a force for
good in the world.

Strengthened by these measures, we are good in shape for the future.
We ended 2018 with 58% of our turnover in the emerging markets
and enjoying number 1 or 2 positions in 85% of the key markets and
categories in which we compete. Our Beauty & Personal Care
business – where some of the biggest growth opportunities exist
– now represents 40% of our turnover. All of this makes us well placed
to capture the many opportunities that exist across our markets.

LOOKING AHEAD
Building on these strong foundations, I have already made clear that
my first priority as CEO will be to accelerate quality growth. For us,
that means an investment-led approach based on delivering our 4G
growth model – consistent growth, competitive growth, profitable
growth and responsible growth, with an equal focus on each.

In particular, I want to leave no doubt that I intend to build further
on Unilever’s century-old commitment to responsible business.
'Making Sustainable Living Commonplace' will remain our purpose
as a company and we will use this to keep Unilever at the forefront of
ensuring business is a force for good. More and more of our brands
will become explicit about the positive social and environmental
impact they have. This is entirely aligned to the instincts of our people
and to the expectations of our consumers. It is not about putting
purpose ahead of profits, it is purpose that drives profits.

Despite the progress we have made in recent years, I am also clear
that – in a world where the speed of change is relentless – we need to
quicken the pace of everything we do still further. I want to make speed
and skills for a digital age a hallmark of Unilever under my leadership.

If we can do all this then I am confident we can achieve our strategic
aims and deliver many years of solid cash flow, further underlying
operating margin improvement and good quality growth.

AND FINALLY…
I want to thank my colleagues throughout the whole company for
their hard work in delivering these results. Unilever is fortunate to
have such talented and dedicated people and I am deeply aware of
my responsibilities to them – and to our many other stakeholders
– in being asked to lead this wonderful company.

I especially want to thank my predecessor, Paul Polman. Unilever has
been transformed under his inspiring leadership. He has worked tirelessly
to make the company stronger and the world a better place. It has been
a privilege to serve with him and an honour now to succeed him.

I also want to thank the Unilever Board of Directors for their
confidence and invaluable guidance as I take on the role. And, finally,
to our shareholders, thank you for your ongoing support and belief
in the company, which we will always work hard to retain.

• The way people shop and access brands is changing rapidly and we
made good progress in 2018 in positioning ourselves effectively in

ALAN JOPE
CHIEF EXECUTIVE OFFICER

Strategic ReportAnnual Report on Form 20-F 2018UNILEVER LEADERSHIP EXECUTIVE (ULE) OVERVIEW
FOR ALAN JOPE AND GRAEME PITKETHLY SEE PAGE 3

DAVID BLANCHARD
Chief R&D Officer

MARC ENGEL
Chief Supply Chain Officer

HANNEKE FABER
President, Europe

KEES KRUYTHOFF
President, Home Care

Nationality British Age 54, Male
Appointed to ULE January 2013 (will retire
in April 2019)
Joined Unilever 1986
Previous Unilever posts include: Unilever
Research & Development (SVP); Unilever
Canada Inc. (Chairman); Foods America
(SVP Marketing Operations); Global Dressings
(VP R&D); Margarine and Spreads (Director
of Product Development).
Current external appointments:
Ingleby Farms and Forests (NED).

Nationality Dutch Age 52, Male
Appointed to ULE January 2016
Joined Unilever 1990
Previous Unilever posts include:
Unilever East Africa and Emerging
Markets (EVP); Chief Procurement Officer;
Supply Chain, Spreads, Dressings and
Olive Oil Europe (VP); Ice Cream Brazil
(Managing Director); Ice Cream Brazil (VP);
Corporate Strategy Group; Birds Eye Wall’s,
Unilever UK (Operations Manager).
Current external appointments:
PostNL (Supervisory Board member).

Nationality Dutch Age 49, Female
Appointed to ULE January 2018
Joined Unilever 2018
Previous posts include:
Royal Ahold Delhaize (CEIO & EC);
Royal Ahold (CCO); P&G (VP & GM).
Current external appointments:
Bayer AG (Supervisory Board member),
Leading Executives Advancing Diversity
(LEAD) (advisory board member).

Nationality Dutch Age 50, Male
Appointed to ULE November 2011
Joined Unilever 1993
Previous Unilever posts include: President,
North America and Global Head of Customer
Development; Brazil (EVP); Unilever Foods
South Africa (CEO); Unilever Bestfoods Asia
(SVP and Board member).
Current external appointments:
Enactus (Chairman).

LEENA NAIR
Chief Human Resources Officer

NITIN PARANJPE
President, Foods and
Refreshment

RITVA SOTAMAA
Chief Legal Officer and
Group Secretary

AMANDA SOURRY
President, North America & Global
Head of Customer Development

Nationality Indian Age 55, Male
Appointed to ULE October 2013
Joined Unilever 1987
Previous Unilever posts include: President
Home Care; EVP South Asia and Hindustan
Unilever Limited (CEO); Home and Personal
Care, India (Executive Director); Home Care
(VP); Fabric Wash (Category Head); Laundry
and Household Cleaning, Asia (Regional
Brand Director).

Nationality Finnish Age 55, Female
Appointed to ULE February 2013
Joined Unilever 2013
Previous posts include: Siemens AG –
Siemens Healthcare (GC); General Electric
Company – GE Healthcare (various positions
including GE Healthcare Systems (GC));
Instrumentarium Corporation (GC).
Current external appointments:
Fiskars Corporation (NED).

Nationality British Age 55, Female
Appointed to ULE October 2015
Joined Unilever 1985
Previous Unilever posts include:
President Foods; Global Hair (EVP); Unilever
UK and Ireland (EVP and Chairman); Global
Spreads and Dressings (EVP); Unilever US
Foods (SVP).
Current external appointments:
PVH Corporation. (NED).

Nationality Indian Age 49, Female
Appointed to ULE March 2016
Joined Unilever 1992
Previous Unilever posts include: HR
Leadership and Organisational Development
and Global Head of Diversity (SVP); Hindustan
Unilever Limited (Executive Director HR);
Hindustan Lever (various roles).

KEITH WEED
Chief Marketing &
Communications Officer

Nationality British Age 57, Male
Appointed to ULE April 2010 (will retire
in May 2019).
Joined Unilever 1983
Previous Unilever posts include:
Global Home Care and Hygiene (EVP); Lever
Fabergé (Chairman); Hair and Oral Care (SVP).
Current external appointments:
Business in the Community (Board member);
Effie (Board member); Historical Advertising
Trust (President); Advertising Association
(President); Grange Park Opera (Trustee).

Strategic ReportAnnual Report on Form 20-F 2018OUR PERFORMANCE

FINANCIAL PERFORMANCE

GROWING THE BUSINESS

GROUP

TURNOVER GROWTH
Turnover growth averaged 0.6% over five years

UNDERLYING SALES GROWTH*
Underlying sales growth averaged 3.3% over five years

UNDERLYING VOLUME GROWTH*
Underlying volume growth averaged 1.3% over five years

OPERATING MARGIN
Operating margin averaged 17.3% over five years

UNDERLYING OPERATING MARGIN*
Underlying operating margin has steadily increased over five years from 15.5% to 18.4%

FREE CASH FLOW*
Unilever has generated free cash flow of €23.0 billion over five years

DIVISIONS

BEAUTY & PERSONAL CARE
Turnover

Turnover growth

Underlying sales growth

Operating margin

Underlying operating margin

FOODS & REFRESHMENT
Turnover

Turnover growth

Underlying sales growth

Operating margin

Underlying operating margin

HOME CARE
Turnover

Turnover growth

Underlying sales growth

Operating margin

Underlying operating margin

2018

2017

2016

(5.1%)

2.9%^

1.9%

24.6%

18.4%

1.9%

3.1%^

0.8%

16.5%

17.5%

(1.0%)

3.7%

0.9%

14.8%

16.4%

€5.0 billion

€5.4 billion

€4.8 billion

€20.6 billion
(0.3%)
3.1%^
20.0%
21.9%

€20.2 billion
(9.9%)
2.0%^
35.8%
17.5%

€10.1 billion
(4.2%)
4.2%^
11.5%

€20.7 billion
2.6%
2.9%^
19.8%
21.1%

€22.4 billion
(0.4%)
2.7%^
16.1%
16.7%

€10.6 billion
5.6%
4.4%^
10.8%

€20.2 billion
0.5%
4.2%
18.4%
20.0%

€22.5 billion
(2.2%)
2.7%
14.0%
15.6%

€10.0 billion
(1.5%)
4.9%
9.5%

13.0%

12.2%

10.9%

* Key Financial Indicators.
^

Wherever referenced in this document, 2018 underlying sales growth does not include price growth in Venezuela for the whole of 2018 and in Argentina from July
2018. 2017 underlying sales growth does not include Q4 price growth in Venezuela. See pages 23 and 24 on non-GAAP measures for more details.

◊ The Group has revised its operating segments to align with the new structure under which the business is managed. Beginning 2018, operating segment

information is provided based on three product areas: Beauty & Personal Care, Foods & Refreshment and Home Care.

Underlying sales growth, underlying volume growth, underlying operating margin and free cash flow are non-GAAP measures. For further information about these
measures, and the reasons why we believe they are important for an understanding of the performance of the business, please refer to our commentary on non-GAAP
measures on page 23.

Strategic ReportAnnual Report on Form 20-F 2018UNILEVER SUSTAINABLE LIVING PLAN

TARGET

2018

2017

2016

IMPROVING HEALTH & WELL-BEING
BIG GOAL: By 2020 we will help more than a billion people take action to improve their health and well-being. See page 13.

HEALTH & HYGIENE
Target: By 2020 we will help more than a billion people to improve their health and
hygiene. This will help reduce the incidence of life-threatening diseases like diarrhoea.

NUTRITION
Target: By 2020 we will double (ie up to 60%) the proportion of our portfolio that meets
the highest nutritional standards, based on globally recognised dietary guidelines.
This will help hundreds of millions of people to achieve a healthier diet.

1 billion

653 million

601 million

538 millionФ

60%

48%

39%∞

35%

REDUCING ENVIRONMENTAL IMPACT
BIG GOAL: By 2030 our goal is to halve the environmental footprint of the making and use of our products as we grow our business. See pages 13 to 14.

GREENHOUSE GASES
Target: Halve the greenhouse gas impact of our products across the lifecycle (from the
sourcing of the raw materials to the greenhouse gas emissions linked to people using
our products) by 2030 (greenhouse gas impact per consumer use).+

Target: By 2020 CO2 emissions from energy from our factories will be at or below 2008
levels despite significantly higher volumes (reduction in CO2 from energy per tonne of
production since 2008).**

WATER
Target: Halve the water associated with the consumer use of our products by 2020 (water
impact per consumer use).

Target: By 2020 water abstraction by our global factory network will be at or below 2008
levels despite significantly higher volumes (reduction in water abstraction per tonne of
production since 2008).**

WASTE
Target: Halve the waste associated with the disposal of our products by 2020 (waste
impact per consumer use).

Target: By 2020 total waste sent for disposal will be at or below 2008 levels despite
significantly higher volumes (reduction in total waste per tonne of production since 2008).**

SUSTAINABLE SOURCING
Target: By 2020 we will source 100% of our agricultural raw materials sustainably
(% of tonnes purchased).

(50%)

6%Θ

9%∞

≤145.92

70.46†

76.77∞

83.52Ф

(50%)

(2%)Θ

(2%)∞

(7%)

≤2.97

1.67†

1.80∞

1.85Ф

(50%)

(31%)†Θ

(29%)

≤7.91

0.20†

0.18∞

(28%)Ф

0.35Ф

100%

56%

51%

ENHANCING LIVELIHOODS
BIG GOAL: By 2020 we will enhance the livelihoods of millions of people as we grow our business. See page 14.

FAIRNESS IN THE WORKPLACE
Target: By 2020 we will advance human rights across our operations and extended
supply chain, by:

• Sourcing 100% of procurement spend from suppliers meeting the mandatory
requirements of the Responsible Sourcing Policy (% of spend of suppliers
meeting the Policy).

• Reducing workplace injuries and accidents (Total Recordable Frequency Rate

of workplace accidents per million hours worked)**.

OPPORTUNITIES FOR WOMEN
Target: By 2020 we will empower 5 million women, by:

• Promoting safety for women in communities where we operate.
• Enhancing access to training and skills (number of women).
• Expanding opportunities in our value chain (number of women).

• Building a gender-balanced organisation with a focus on management

(% of managers that are women)**.

INCLUSIVE BUSINESS
Target: By 2020 we will have a positive impact on the lives of 5.5 million people by:

• Enabling small-scale retailers to access initiatives aiming to improve their

income (number of small-scale retailers).

• Enabling smallholder farmers to access initiatives aiming to improve their

agricultural practices.

100%

61%‡†

0.69†

55%‡∞

0.89∞

–

1.01Ф

5 million 1.85 million†ж 1.26 million

∞ 0.92 million

50%

49%†

47%∞

46%

5 million 1.73 millionж 1.60 million

1.53 million

0.5 million 0.75 million ж 0.72 million

∞ 0.65 million

Baseline 2010 unless otherwise stated
** Key Non-Financial Indicators.
† PricewaterhouseCoopers assured in 2018. For details and 2018 basis of preparation see www.unilever.com/investor-relations/annual-report-and-accounts/
∞ PricewaterhouseCoopers assured in 2017. For details and 2017 basis of preparation see www.unilever.com/sustainable-living/our-approach-to-reporting/reports-

and-publications-archive

Ф PricewaterhouseCoopers assured in 2016. For details and 2016 basis of preparation see www.unilever.com/sustainable-living/our-approach-to-reporting/reports-

and-publications-archive

‡ During 2017 and 2018 we amended how we assessed compliance with the Responsible Sourcing Policy, hence year-on-year data is not comparable.
ж Around 490,000 women have accessed initiatives under both the Inclusive Business and the Opportunities for Women pillars in 2018.
( ) In the table above, brackets around numbers indicate a negative trend which, for environmental metrics, represents a reduction in impact.
+ Target approved by the Science Based Targets Initiative.
Θ

The spreads business was sold in mid-2018 and is excluded from the performance measure (including the baseline) to ensure alignment with the existing business structure.

Strategic ReportAnnual Report on Form 20-F 2018
A CHANGING WORLD

UNILEVER OPERATES IN THE FAST-MOVING CONSUMER
GOODS (FMCG) INDUSTRY, ONE OF THE WORLD’S LARGEST,
MOST COMPETITIVE AND DYNAMIC.

MARKET OVERVIEW
The top 25 global FMCG players generate sales of over €700 billion
in markets characterised by their dynamic nature. A global, digital
economy is fuelling rapid change characterised by fragmentation
throughout the value chain. This requires fast, innovative, profitable
global and local responses in areas such as supply chain, customer
development, marketing and brand innovation.

In response, Unilever has reorganised into three Divisions: Beauty
& Personal Care, Foods & Refreshment and Home Care. Each has
implemented our C4G change programme which was introduced in 2016
to create a simpler organisation capable of innovating more quickly to
evolve our brand portfolios and meet changing trends more effectively
– harnessing our global scale and local expertise. Acquisitions of new
brands have further supplemented our core portfolios.

The use and threat of tariffs for political leverage continues to drive
uncertainty in our markets. Currency volatility in Argentina, Turkey
and Pakistan as well as major political disruption in markets such as
Brazil, continues to demand rapid local responses from our brands.

Our business is shaped by systemic macro forces. We periodically
review these to ensure our strategy remains relevant. We believe
there are four distinct but overlapping macro trends that will shape
the world over the next ten years.

DIGITAL AND TECHNOLOGY REVOLUTION
Business is evolving at a faster pace than ever. Traditional understanding
and engagement with consumers is being redefined. Digital technology
is transforming relationships with consumers – from connectivity and
the Internet of Things, to robotics, artificial intelligence and augmented
reality. All are linked by more targeted and data-driven marketing.

Fragmentation remains a principal driver of change, impacting
consumer journeys, route-to-market channels and media, and brand
spend. Consumers are taking different paths to purchase, often
combining offline and online channels where influencers are
a growing force. Younger consumers continue to prioritise meaning
over materialism and are demanding more authenticity, transparency
and natural ingredients. The talkability of brands is vital in a
fragmented digital media landscape, favouring those with a strong
point of view, or purpose, relevant to consumers. The growth of
the global workforce and middle class consumers, especially in
emerging markets, has resulted in long-term shifts favouring greater
convenience and time-saving attributes.

Channels to reach consumers are equally fragmented. There is
less reliance on ‘big box’ retailers with e-commerce growing 13%
globally, driven by direct-to-consumer models and platforms such as
Amazon and Alibaba. The market is also polarising between specialist
channels and discounters and convenience stores, creating both risks
and opportunities for FMCG companies.

The proliferation of digital and social media channels has resulted in
media fragmentation, with digital advertising now about 40% of the
market. However, improving standards and tackling fraud to protect
the integrity of digital marketing are major challenges.

POLARISED WORLD
Slow and uneven economic growth, rising inequality, political
polarisation and the rise of nationalism within countries is impacting
consumer confidence. At the same time, consumers continue
to have low confidence in government, business, media and NGOs,
according to the Edelman Trust Barometer. However, according to the
same study, three out of four people agree a company can take action
to both increase profits while improving economic and social conditions
in the community it operates in.

ENVIRONMENT UNDER PRESSURE
According to a 2018 Intergovernmental Panel on Climate Change
report, the world is on course for warming of 1.5 degrees Celsius by as
early as 2030. Drought, floods, extreme heat and poverty for hundreds
of millions are threatened if no action is taken to curb emissions. The
cost of inaction will be profound, estimated to be about $44 trillion
in lost GDP. But the rewards for positive action are substantial and
thanks to the Paris Agreement, nearly 200 countries are pursuing
carbon reforms. This is helping to open about $23 trillion in opportunities
for climate-smart investments in 21 emerging markets alone by 2030.

Climate change also threatens our food system which must produce
50% more food to feed over 9 billion people by 2050. However,
changing weather patterns and growing seasons threaten suitable
cultivation areas around the world. Business can spur positive change
and achieving food security could create 80 million jobs and business
opportunities worth $2.3 trillion annually by 2030. Linked to climate
change is water scarcity, a threat to 3.2 billion people. If current usage
continues the world will have only 60% of its required water by 2030.
See pages 30 and 33 to 35 for more on climate change risks.

Other environmental concerns are growing in significance, such as
plastic packaging. The Ellen MacArthur Foundation found that 95%
of the value of plastic packaging is lost to the economy after one short
use, equivalent of $80-120 billion lost to the global economy each
year. See pages 14 to 15 and 30 for more on plastic packaging risks
and opportunities.

PEOPLE LIVING DIFFERENTLY
Concerns about the planet and society are matched by concerns about
our own health and what we eat. Growing urbanisation is shaping new
health priorities while the cost of care is also rising, placing health
services under increased pressure. Obesity kills more people than
hunger, while many populations struggle to find sufficient nourishment
in their diets. Sugar is seen as a major threat which has resulted in
a number of countries choosing to implement a tax on it. For food
companies, this presents a mix of challenges and opportunities.
Meanwhile, public awareness around mental health issues continues
to grow, particularly with digital connectivity.

Consumers are now living in communities that are becoming more
diverse with fragmented identities. Younger generations, especially
Millennials and Generation Z, continue to have a powerful influence
on cultural norms – on issues such as diversity and discrimination.
Meanwhile, older generations are exerting a strong economic
influence. The number of people aged 80 or over is expected
to triple by 2050.

Migration is having a profound effect on national identity. One in 30
people are international migrants living abroad, a 40% rise since
2000. People are encouraged to move, in part, by the rise of global
megacities with more than ten million inhabitants. The number of
these will rise from 31 to 41 by 2030. Such urbanisation is expected
to create an additional 500 million one-person households between
2016 and 2030. Climate change looks set to increase migration even
further as populations are displaced due to rising sea levels and
changing climates.

The #MeToo movement has encapsulated a major shift in women’s
rights. The global gender gap in primary school completion and
enrolment in secondary school has closed, however barriers and
opportunities remain, particularly on equal pay. According to the
World Bank, gender equality would enrich the global economy by
an estimated $160 trillion if women were earning as much as men
in the workplace. Men themselves face changing roles. Time spent
with children has almost quadrupled for men since 1965 and in some
countries the burden of care is changing in response to improved
paternity leave entitlements and shared parental leave. Changing
demographics and societal expectations present significant risks and
opportunities for FMCG companies.

Find out more about how we are responding to the trends outlined
in this section in delivering value for our stakeholders (pages 11 to 18).

Strategic ReportAnnual Report on Form 20-F 2018OUR VALUE CREATION MODEL

UNILEVER HAS A PROVEN BUSINESS MODEL THAT
SUPPORTS LONG-TERM, SUSTAINABLE VALUE CREATION.

Our business activities span a complex, global and cyclical value chain.
The start of our value chain is consumer insight. We track changing
consumer sentiment through our 27 People Data Centres around
the world. Through close collaboration between marketing and R&D,
we use our insights to inform product development, leveraging our
€900 million annual R&D spend. Our research aims to bring together
the best thinking and ideas from wherever they exist – within Unilever
and beyond, including universities and specialist companies.

We work with tens of thousands of suppliers and spend around €34
billion on goods and services. Our supply chain sources the materials
and ingredients that make up our products. Our global manufacturing
operations across more than 300 factories in 69 countries turn these raw
materials into products with a total volume of nearly 19 million tonnes.

Our products are then distributed via a network of around 400 globally
coordinated distribution centres to 26 million retail stores, from large
supermarkets, hypermarkets, wholesalers and cash and carry, to
small convenience stores, as well as other fast-growing channels such
as e-commerce, out-of-home and direct-to-consumer.

We are the second largest advertiser in the world, based on media
spend. We create an increasing amount of tailored content ourselves
to market our brands, using digital channels.

Underpinning our value chain is a set of defining strengths which set
us apart from our competitors: our portfolio of global, purpose-led
brands and local jewels; a geographic presence in more than 190
countries with 58% of our turnover in emerging markets; deep
distribution capability through ever more complex channels; and
a talent pool of local leaders – over 80% of our business leaders are
local to their markets.

Our strategy (see page 10) and our Divisional strategies (see pages
11 to 12) harness these strengths to deliver competitive top and

bottom-line growth, and capital efficiency which in turn drives
underlying operating margin, free cash flow and return on invested
capital – and ultimately attractive returns for shareholders.

To respond further to the increasing pace of change and accelerate
value creation, we have embedded our C4G programme across
all Divisions so we are a faster, simpler organisation. We are also
rapidly embracing new digital technologies such as the Internet
of Things, AI and robotics to get even closer to our value chain
partners and consumers.

Our strategy and business model continue to deliver solid growth.
From 2014 to 2018 we have delivered average underlying sales growth
of 3.3% a year while underlying operating margin increased by an
average 70 basis points per year to 18.4%. Longer term, Unilever has
grown dividends by an average of 8% per year over the last 38 years,
with no reductions.

We are on track to meet a number of targets to accelerate shareholder
value since 2017. These include underlying sales growth ahead of our
markets, which we expect to translate into underlying sales growth of
3-5% each year up to 2020, projected cumulative savings of €6 billion
by 2019 and an expansion of underlying operating margin from 18.4%
in 2018 to 20% by 2020. Return on Invested Capital is expected to be
sustained in the high teens and dividends will continue to rise, reflecting
confidence in the outlook for profit growth and cash generation.

Sustainable value creation also means creating value for the many
stakeholders Unilever relies on. The Unilever Sustainable Living Plan
(USLP) is at the heart of our multi-stakeholder business model and
vision to grow our business, whilst decoupling our environmental
footprint from our growth and increasing our positive social impact –
in turn contributing to the United Nations Sustainable Development
Goals (see page 15). The USLP helps us to deliver more growth
through our brands with purpose, less risk by future proofing our
supply chain, lower costs through eco-efficiency practices and more
trust from the stakeholders who we rely on.

WHAT WE
DEPEND ON

PURPOSEFUL PEOPLE
155,000 talented people who
contribute their skills and
purpose to our business Page 16

NATURAL RESOURCES
Renewable and non-renewable
materials and ingredients for
our products Page 14

FINANCIAL RESOURCES
Cash, equity and debt to invest
for the long term Pages 104 to 109

INTANGIBLE ASSETS
R&D capabilities and intellectual
property such as patents, trade
marks and know-how Pages 97 to 99, 130

TANGIBLE ASSETS
Physical assets such as
manufacturing, logistics and
office facilities as well as our
vehicle fleet and stock Page 100

SUPPLIERS
Source the materials and ingredients
that make up our products and provide
services to support our business.
Page 17

STAKEHOLDERS
& PARTNERS
Relationships with governments
and other organisations to drive
systems change Page 17

SUSTAINABLE
DEVELOPMENT GOALS

R U
E
M
U
S
N
O
C

R I N S I G H T

INNOVATION

OUR PURPOSE
To Make Sustainable Living Commonplace

OUR VISION
To grow our business, whilst decoupling our environmental
footprint from our growth and increasing our positive social impact
delivered through the Unilever Sustainable Living Plan:

E C

IMPROVING HEALTH
AND WELL-BEING
for more than

1 BILLION

REDUCING
ENVIRONMENTAL
IMPACT

by 1/2

ENHANCING
LIVELIHOODS
for

MILLIONS

OUR STRATEGY
To deliver long-term growth and sustainable value creation by:

Winning with
brands and
innovation
Page 10

Winning in the
marketplace
Page10

Winning through
continuous
improvement
Page 10

Winning with
people
Page 10

Supported by Division strategies:

Foods &
Refreshment
Pages 11 to 12

Beauty &
Personal Care
Page 11

MARKETING

Home Care
Page 12

T I C

G I S

G
N
I
R
U
T
C
A
F
U
N
A

S M

VALUE WE CREATE

CONSUMER BENEFITS
We sell products that help people
to feel good, look good and get
more out of life Page 1

TOP & BOTTOM LINE
GROWTH
We deliver consistent, competitive,
profitable and responsible growth
Page 6

IMPROVED HEALTH
& WELL-BEING
We are helping hundreds of millions
of people take action to improve their
health & well-being Page 13

SUSTAINABLE DEVELOPMENT GOALS

REDUCED
ENVIRONMENTAL IMPACT
We are working to halve the
environmental footprint of the
making and use of our products
as we grow our business Pages 13 to 14

SUSTAINABLE DEVELOPMENT GOALS

ENHANCED LIVELIHOODS
We are enhancing the livelihoods
of millions of people as we grow
our business Page 14

SUSTAINABLE DEVELOPMENT GOALS

Strategic ReportAnnual Report on Form 20-F 2018

OUR STRATEGY

GROWING THE CORE, EVOLVING THE PORTFOLIO AND DEVELOPING CHANNELS ARE AT THE HEART OF OUR STRATEGY.

Our strategy helps us deliver top and bottom line growth in a fast-changing world. It is underpinned by C4G which aims to create a faster,
simpler organisation.

WINNING WITH BRANDS AND INNOVATION

WINNING THROUGH CONTINUOUS IMPROVEMENT

Rapid innovation is critical to respond effectively to the fragmentation
we are experiencing in consumer segments, routes to market and media
channels. Innovation varies by Division based on market requirements
and brand strategies but we split projects into three separate groups.
Firstly, we have global roll-outs, such as the Sunsilk Natural Recharge
launched in 5 markets in 2018. Secondly, we have local innovations
marketed through global brands, such as our partnership with Kinder
(owned by Ferrero) which was launched in several European countries
following success in France. Finally, we have local brands with local
innovation, such as Vim bars with mint extract launched in India.

Our faster response to consumer trends is due to different ways of
working to meet the needs of local consumers and customers, and quick
decision-making. Global marketing networks called Brand Communities
work hand in hand with more than 230 Country Category Business
Teams (CCBTs) that operate as multifunctional entrepreneurial units.
This allows for more experimentation, responsiveness and scaling up
of innovation across markets. We are already seeing an improvement in
time to market across our portfolio as a result of a range of initiatives to
speed up the innovation process. For example, time to market with new
innovations to meet local trends is now 40-50% faster compared to 2016.

Our portfolios are evolving to meet consumer demand for brands
that take a stand on issues they care about. Unilever’s purpose and
our Sustainable Living brands are key to driving purchase preference.
Consumer trust in brands is also driven by their experiences of
marketing. In 2018 we took a key role in the industry ensuring digital
responsibility covering content, platforms and measurement while also
campaigning to improve influencer marketing and combat fraud in the
digital ecosystem.

Related principal risks (pages 29 to 32): Brand preference, Economic
and political instability, Portfolio management, Safe and high-quality
products, Sustainability, Climate change, Plastic packaging

C4G plays a significant role in driving growth, but is also responsible
for margin expansion for profitable growth. Through sharper financial
discipline governing overhead spending, and our zero-based budgeting
(ZBB) approach, we are reducing costs and uncovering innovative ways
of working.

We are applying the 5S 'smart' programme across the Group which
cuts costs and examines the business case for improvements more
broadly driving savings through smart buying, smart sourcing and
a smart product portfolio, as well as leveraging our supplier Partner
to Win programme. 5S also drives revenue and margin through smart
mix and smart pricing delivered through our Net Revenue Management
programme. 5S is delivering over €1 billion of savings per year, with the
aim to reinvest two-thirds of these savings.

Brand and Marketing Investment is focused on maximising return on
spend. We are increasing spend in the areas driving growth, such as
digital media and in-store, whilst reducing production and promotional
spend. In 2018 we generated savings in BMI of over €500 million. We are
creating more content in-house while making existing assets go further.
Our 16 U-Studios in 13 countries create brand content faster and more
efficiently than external agencies. Improvements to measurement and
verification of digital audiences ensure we maximise value in digital
advertising alongside improvements in the measurement of influencer
follower data.

Related principal risks (pages 29 and 31): Brand preference,
Supply chain

WINNING IN THE MARKETPLACE

WINNING WITH PEOPLE

Every day, 2.5 billion people use our products. We evolve our portfolio
to reach consumers in all income brackets from our prestige range in
Beauty & Personal Care, built from carefully selected acquisitions, to the
roll-out of affordable products, such as Domex Toilet Cleaning Powder in
India, for low income consumers. We reach wide into new geographies,
with brands expanding into new pockets of growth such as launching
Ben & Jerry’s Moo-phoria low calorie ice cream in the US and Premium
Cif sprays in 15 European markets in 2018.

Data is key and our ambition is to build one billion one-to-one consumer
relationships through our People Data Centres which connect us with
consumers in a responsible way through real-time analytics. Our 27
People Data Centres identify trends from social listening alongside
engaging with consumers on ideas for new launches. Our contact with
consumers is governed by our Code Policy on Personal Data & Privacy
which sets out the steps we take to protect personal data.

Alongside innovation, customer development is key to growth, ensuring
products are available when and where consumers want them, in the
format they prefer, at the right price. E-commerce remains a crucial
channel. Online is now around 5% of Unilever turnover. In China
e-commerce accounts for over 20% of turnover. We are building our
business through online channels such as Amazon, Taobao in China,
online grocery websites, and direct-to-consumer models deployed by
Dollar Shave Club, T2 and our prestige brands.

Related principal risks (pages 29, 30 and 32): Customer relationships,
Economic and political instability, Portfolio management, Sustainability,
Climate change

With unprecedented change happening externally, we are taking action
in a number of areas to ensure we are more agile, digitally focused
and networked. Our C4G programme is empowering our people
with an owner’s mindset and gives them the licence to take greater
responsibility. Through C4G we are already seeing higher levels of
empowerment, collaboration, experimentation and increased speed
in decision-making.

To develop the capabilities, skills and leadership which support new
ways of working, we are investing in continuous, ‘always-on’ learning
programmes. We are particularly focused on digital capabilities. To
develop purpose-led and future-fit leaders, in 2018 we launched new
Standards of Leadership. Developed in collaboration with thought
leaders and groups of young and senior leaders, the new Standards
recognise the need for leaders to embrace both the inner and outer
aspects of leadership. The 'outer game' is what leaders need to do
to succeed; the 'inner game' is about their inner purpose which guides
their behaviours and actions.

Attracting and retaining talent is vital to support our growth ambitions.
Purpose and our Unilever Sustainable Living Plan (USLP) remain key
talent attractors with 75% of employees in our 2018 UniVoice survey
believing their role contributes to the USLP and 70% believing they can
fulfil their purpose at work. To reinforce this link and give more people
a stake in the business we are developing our approach to reward
by including more long-term share-based incentives for business
performance and progress on our USLP targets.

Related principal risks (pages 29, 31 and 32): Talent, Business
transformation, Sustainability

Strategic ReportAnnual Report on Form 20-F 2018DELIVERING LONG-TERM VALUE FOR OUR STAKEHOLDERS

OUR CONSUMERS
Our three Divisions meet the constantly changing needs of consumers
by harnessing our global scale and local expertise. Innovation is the fuel,
creating great products that consumers love, from nutritionally balanced
foods and refreshments, to affordable soaps that combat disease, luxurious
shampoos and everyday household care products. Whatever the brand,
wherever it is bought, we’re working to ensure that it plays a part in helping
fulfil our purpose as a business – making sustainable living commonplace.

BEAUTY & PERSONAL CARE
BEAUTY & PERSONAL CARE (BPC) GENERATED TURNOVER
OF €20.6 BILLION, ACCOUNTING FOR 40% OF UNILEVER’S
TURNOVER AND 33% OF OPERATING PROFIT IN 2018.

The Division is our largest and includes five global brands with
turnover of €1 billion or above, namely Axe, Dove, Lux, Rexona and
Sunsilk, as well as other household names such as TRESemmé,
Signal, Lifebuoy and Vaseline. BPC has leading global positions in
hair care, skin cleansing and deodorants, and strong local positions in
skin care and oral care. The prestige business leads in premiumising
our portfolio with turnover of €490 million from brands including
Dermalogica and Hourglass.

BPC’s strategic ambition is to become the most valuable and admired
BPC company, led by its purpose ‘Beauty that cares for people, society
and our planet’. Its priorities are to continue to grow its core brands,
build a future-fit portfolio, lead in high-growth spaces and adopt a new
model of marketing. The priorities reflect and respond to key trends
shaping the Division. 2018 saw increasing fragmentation across route
to market, retail channels and media, alongside growing data, analytic
and automation capabilities. Together these trends are creating a
more dynamic, complex and sophisticated landscape with greater
segmentation, differentiation and personalisation.

BPC’s core brands are introducing new innovations and formats quickly and
at scale, such as the new shower mousses from Axe, Dove and Radox as
well as a growing range of products which respond to the trend for natural
and wellbeing products. During 2018 we launched Vaseline Clinical Care
and Dove Derma Series in the fast-growing therapeutics segment and
Dove Facial Cleansing Series infused with 100% plant-derived botanical oils
in Japan. Hair care has created and launched multiple naturals products,
creating a business with over €300 million in turnover in 2018.

Succeeding in the hyper-fragmented world demands greater consumer
responsiveness and we are proud to have launched nine new brands over
the past two years: ApotheCARE Essentials, Hijab Fresh, K-Bright, K-JU,
Korea Glow, Love Beauty and Planet, Pure Derm, Purifi and Skinsei.
Love Beauty and Planet has expanded from North America into four
markets in Europe and is now active across several categories including
skin cleansing, deodorants, skin care and hair care.

Our acquisitions play a key role in building the future-fit portfolio. In the
last four years, BPC has acquired 13 companies including wellbeing
focused Equilibra in 2018. AHC (Carver Korea), acquired in 2017, showed
strong e-commerce performance and in 2018, we rolled it out to Taiwan,
Hong Kong, Singapore, Malaysia and Russia. Schmidt’s Naturals,
also acquired in 2017, has extended beyond deodorants into more
categories. The acquisition of Quala S.A completed in February 2018.
Within two months of acquisition, its Savile and Ego extensions had
brought to market multiple new products in five categories. Strong
progress has been made building a highly attractive prestige portfolio
which is on track to becoming a €1 billion business. Our most recent
acquisition in prestige, Hourglass, is growing fast, expanding into new
geographies and with a commitment to become entirely vegan by 2020.

Future growth will depend on accelerating the adoption of a new model
of marketing focused on brands with purpose, generating great content,
delivered via digital channels using advanced data and analytics. The
model is creating many new consumer touchpoints. For instance, Axe
collaborated with DJ Martin Garrix to launch his Burn Out video with
over 40 million YouTube views to date, celebrating the brand's message
of individuality. In Latin America, Sunsilk partnered with an online
influencer to co-create products for curly hair.

Our purpose-led brands are well positioned to meet growing concerns
about the fragility of the planet and consumer preference for more

sustainable products. In October we joined calls from consumers, NGOs
and politicians for a worldwide ban on animal testing of cosmetics and
Dove, the Division’s biggest brand, achieved PETA accreditation as ‘cruelty
free’. The PETA cruelty-free logo will start appearing on many packs
in 2019 and more brands are set to follow. We are also developing new
packaging solutions with less plastic, better plastic and no plastic.
REN launched a sea kelp and magnesium body wash in a bottle made
from 100% recycled plastic, with 20% from recovered ocean plastic.
Simple launched biodegradable face wipes made from renewable plant
fibres and sustainable wood pulp. More packaging innovations will be
launched in 2019.

Overall, underlying sales growth was 3.1%, driven by skin care and
skin cleansing, but partly offset by slower growth in deodorants
and oral care due to market and competitive pressures. Profitability
progressed with underlying operating margin improving 80 basis
points to 21.9%. Geographically, a number of countries grew above
the market including US, Canada and the UK while emerging markets
such as Pakistan and Bangladesh also had high growth. Brazil
underperformed as did Japan and parts of Western Europe, where
markets were flat to declining. In our channels, e-commerce remains
a key driver of growth alongside the Health & Beauty channel where
we would like to see faster growth following a slow year, especially in
North America.

Looking ahead, we will continue to build our future-fit portfolio
while adopting the new model of marketing, to deliver strong growth,
making an accretive contribution to Unilever’s top and bottom line.

FOODS & REFRESHMENT
FOODS & REFRESHMENT (F&R) GENERATED TURNOVER
OF €20.2 BILLION, ACCOUNTING FOR 40% OF UNILEVER’S
TURNOVER AND 58% OF OPERATING PROFIT IN 2018.

The Division launched in January 2018 after the previous Foods and
Refreshment Categories merged. The integration and relocation of the
global teams to Rotterdam is complete. The disposal of the spreads
business was also completed in July. F&R now includes the foods, ice
cream and beverages categories, as well as Unilever Food Solutions,
our dedicated foodservice business. F&R is home to five global brands
with turnover of €1 billion or above, namely Knorr, Hellmann’s,
Magnum, Lipton and Heart brand (eg Wall’s) as well as other famous
global brands including Brooke Bond and Ben & Jerry’s. It also includes
local jewels such as Bango and Robertson's plus recent B Corp
acquisitions such as Pukka Herbs, Sir Kensington’s and Mãe Terra.
F&R's ambition is to accelerate growth while improving underlying
operating margin. F&R’s purpose 'Taste good, Feel good, Force for good'
underpins our strategic priorities which are to: transform the portfolio;
organise for agility and lower costs; and transform capabilities.

Our efforts to transform the F&R portfolio are driven by consumer
insights. For example, we are seeing stronger preference for healthier
products with more natural and organic ingredients. F&R has launched
a number of products addressing this trend, including Magnum and
Hellmann’s vegan variants in Europe, meat-free Knorr launches in the
Nordics and Ben & Jerry’s non-dairy alternatives. Knorr also expanded
its organic and 100% natural ranges in Europe. In our beverages
category, we continue to grow our ‘good for me tea’ ranges. Lipton’s
range, which includes variants such as detox and stress-less, continued
its global roll-out with strong performance. Recently acquired brands
such as Pukka Herbs are being rolled out at pace. However, given
continuous acceleration of the external landscape, we have to step
up portfolio transformation further and increase the speed of our
response to trends.

Our market-focused organisation and agility supports our portfolio
transformation and delivered several new brands in 2018 such as
RED RED (UK), Culture Republick (US), and Jawara (Indonesia). We
announced an agreement to acquire Horlicks and other consumer
healthcare nutrition products in India and other Asian markets from
GlaxoSmithKline (GSK), and also acquired the Vegetarian Butcher
(Netherlands) and three ice cream brands – Adityaa (India), Betty
(Romania) and Denny (Bulgaria). After success in the US, Breyers
Delights was launched in Europe. In addition, we introduced innovative
licensed ice cream brands including Kinder in Europe and Cornetto
Oreo in India.

Strategic ReportAnnual Report on Form 20-F 2018DELIVERING LONG-TERM VALUE FOR OUR STAKEHOLDERS CONTINUED

Consumers’ shopping habits continue to change. We launched the
IceCreamNow platform in partnership with restaurant delivery services,
building a new home-delivery channel. We have also launched a global
front-of-house programme to showcase our teas and condiments
in restaurants, hotels and bars, and to capitalise on the growth of
eating out and out-of-home consumption. These represent significant
business opportunities.

The second F&R strategic priority is to organise for agility and lower
costs. In 2018, our 5S and ZBB programmes stepped up fuelling our
gross margin and marketing support. We will continue our savings
programme to reduce structural costs, while providing funding for
portfolio transformation and margin expansion. Our speed to market
has improved by almost a third, reflecting how C4G is helping to
unlock speed and agility. We are also piloting new ways of working
across our teams.

Our final strategic priority is to transform our capabilities with a focus
on R&D, lean innovation and precision marketing. The creation of
our state-of-the art global Foods Innovation Centre in Wageningen
(Netherlands) will further strengthen our innovation capability. It is
scheduled to open in 2019. We are also enhancing our capabilities in
digital-driven marketing through extra resourcing across key markets,
upskilling our current teams and hiring digital savvy marketeers.

These strategic priorities are underpinned by the development of
more purpose-led brands. Knorr, Hellmann’s, Lipton, Brooke Bond
and Ben & Jerry’s continued to grow, each fuelled by a unique purpose
which is resonating with consumers. Brooke Bond for example
continued its work tackling cultural taboos through its campaigns,
addressing same-sex relationships in Canada and divorce in the Gulf
markets. Meanwhile, Hellmann’s launched a major focus on food
waste with an activation in Brazil to inspire people to use Hellmann’s
to transform leftovers into tasty meals. Action on plastic packaging is
another priority for F&R. We have partnered with Ioniqa and Indorama
Ventures to pioneer a technology which converts PET waste into virgin
grade material for use in food packaging. In the UK, PG tips started
to introduce 100% biodegradable plant-based pyramid bags. More
innovations and new technologies are in the pipeline.

During 2018 F&R turnover declined 9.9% to €20.2 billion, due to the
sale of spreads and currency devaluation. Underlying sales growth
was 2.0% while our underlying operating margin improved by 80 basis
points to reach 17.5%. Europe returned good results in ice cream,
underpinned by good weather and innovations such as Magnum pints
and Kinder ice cream. However, developed markets overall remain
difficult and are seeing slower volume growth due to increasing
segmentation of consumer preferences, especially in foods, where
our efforts on portfolio transformation were not enough to offset the
headwinds. Traditional channels in Europe such as supermarkets and
hypermarkets continue to discount, creating deflationary pressure.
Latin America had a challenging year due to tough economic
conditions, a truckers’ strike in Brazil and currency headwinds in
Argentina which affected growth in these two markets. Excluding Latin
America, emerging markets generally delivered a strong performance.
Several key markets including India, China and Turkey saw double-
digit growth reflecting the strong potential in emerging markets.

F&R will continue to drive growth and margin by focusing on its strategic
priorities. Our portfolio transformation, step-up in capabilities and shift
in culture are of paramount importance to meet these objectives.

HOME CARE
HOME CARE GENERATED TURNOVER OF €10.1 BILLION,
ACCOUNTING FOR 20% OF UNILEVER’S TURNOVER AND
9% OF OPERATING PROFIT IN 2018.

Home Care is home to two global brands with turnover of €1 billion or
above, namely Dirt is Good (eg Omo and Persil) and Surf. Other leading
brands include Comfort, Domestos, Sunlight, Cif, Seventh Generation as
well as our air and water purification brands Blueair, Pureit and Truliva/
Qinyuan. 79.5% of our turnover is in developing and emerging countries.
Home Care’s ambition is to deliver sustained underlying sales growth and
step up underlying operating margin.

The rapid change of consumer habits, media, competitors and channels,
as well as heightened environmental stress, has redefined Home Care’s

growth opportunities. The Division responded to these changes by creating
four consumer-centric categories: Fabric solutions which focuses on ready
to wear clothes (eg Omo, Surf, Radiant); Fabric sensations which focuses
on fabrics, fashion and lifestyle (eg Comfort, Snuggle); Home & hygiene
(eg Sunlight, Sun) which focuses on delivering care for a cleaner world;
and life essentials which unites our air and water purification brands (eg
Pureit, Truliva, Blueair). Home Care’s purpose 'Making your home a better
world. Making our world a better home' underpins the Division’s strategic
priorities: strengthening further the foundation of the business; making
Home Care fit for the future; and investing in capabilities.

Home Care strengthened the foundations of the business by delivering
superior products and benefits. We launched Cif Specialist sprays
across 15 countries in Europe whilst continuing to roll-out our toilet
blocks to 11 more markets. We expanded our product portfolio into
high potential geographies, building on our most established brands
such as Omo-branded floor cleaners in Brazil. Our Comfort Intense
ultra-concentrated fabric conditioners are now in 20 markets and
continue to enjoy strong growth.

Our brands made progress in embracing purpose to connect more
meaningfully with consumers – in particular millennials. In India,
Domex enrolled renowned movie stars in its 'Pick up the brush'
campaign to help overcome the social stigma associated with cleaning
toilets, a key barrier to improve sanitation. Seventh Generation,
acquired in 2016, stepped up its advocacy for Climate Justice together
with the Sierra Club to move cities to commit to 100% renewable
energy. Home Care’s biggest brand, Omo/Persil, joined forces with
National Geographic, IKEA and Lego to promote the developmental
benefits of play in children.

The second pillar of our strategy is to future-proof our business to lead
new trends. We intensified our efforts and increased our footprint in the
fast-growing natural segment through the launch of Omo naturals in
New Zealand, France and Brazil among others, the roll-out of Seventh
Generation in more markets and the launch of Sunlight Naturals across
South-East Asia and South Africa. Our brands such as Cif, Omo/Persil
and Seventh Generation responded to growing concerns about plastic by
including recycled plastic in their packaging. Home Care launched Day2,
a dry wash spray that revives clothes between washes – saving time and
water. Our ultra-concentrated laundry gems, a new format launched in
the UK in 2017, performed below expectations. In South Africa we reacted
quickly to the drought in Cape Town with Domestos Flush Less, a toilet
spray that disinfects and eliminates odours without the need to flush.
We increased our presence in e-commerce, crossing €500 million of
sales and continued to experiment with new business models such as
peer-to-peer laundry services.

The third strategic pillar is investing in our capabilities. This includes
partnering to tap into the opportunities that data brings to make Home
Care more efficient and better able to seize growth opportunities. In
China, our water purification brand, Truliva, partnered with Alibaba to
develop an online leasing market for water purifiers. We also joined
forces with Ms Paris, the Chinese dress rental platform, that allows
consumers to hire designer dresses and return without laundering.
To support our R&D efforts, we have inaugurated the Materials
Innovation Factory at the University of Liverpool, a world-class centre
of excellence in advanced material chemistry and an ecosystem that
brings together innovation partners and leading academics to develop
more sustainable and superior formula and packaging for our brands.

Home Care delivered underlying sales growth of 4.2% while our
underlying operating margin improved by 80 basis points to reach 13.0%.
Key drivers of growth were North and South Asia with South East Asia,
Middle-East, Turkey and the US also performing strongly. By contrast,
our performance in Latin America was challenged by a trucker’s strike
and extreme inflationary pressures. Our home & hygiene and fabric
sensations categories delivered strong, broad-based profitable growth
whereas life essentials performed below expectations largely driven by
a significant decline in category growth in air purification in China and
intense competitive pressures. Margin expansion in fabric solutions was
hampered by inflationary headwinds and competitive pressures on pricing.

Home Care will continue to drive growth and margin by shifting our
portfolio and footprint towards the higher growth, more profitable
market segments, formats, channels and geographies while
continuing to address with agility changing consumer preferences.

Strategic ReportAnnual Report on Form 20-F 2018SOCIETY AND ENVIRONMENT
OUR MULTI-STAKEHOLDER MODEL AIMS TO REWARD OUR
SHAREHOLDERS WHILE POSITIVELY IMPACTING SOCIETY.

Our impact on society starts with our 155,000 employees who received
€5.3 billion in pay in 2018, and extends across our value chain including
the millions of retailers and distributors who sell our products in more
than 190 countries, generating income and employment for many more.
Our suppliers also benefit from the €34 billion we spent on goods and
services in 2018. The taxes we pay are another important contribution
to society. Total tax borne by Unilever in 2018 was €3.7 billion, of which
€2.3 billion was corporation tax. Unilever fully complies with the tax laws
in the countries where we operate. Where tax law is unclear, or has not
kept pace with modern business practice, we interpret our obligations in
a responsible way, guided by our Tax Principles.

UNILEVER SUSTAINABLE LIVING PLAN
Our impact on society is significant but we want our impact to go beyond
business as usual, delivering value for multiple stakeholders at the
same time as growing our business. This idea is encapsulated in the
Unilever Sustainable Living Plan (USLP) which represents a simple idea
– that business growth and sustainability are not mutually exclusive. By
focusing on sustainable growth, we believe we will generate consistent
and profitable long-term shareholder returns. The USLP has three big
goals: improving the health and well-being of more than one billion
people by 2020; halving our environmental footprint by 2030; and
enhancing livelihoods for millions by 2020. These goals are supported
by over 50 time-bound stretching targets and a transformational
change agenda which aims to create change on a systemic scale. We
are making good progress overall against our targets although some
remain a challenge to achieve by the end of 2020. Our Sustainable
Living Report includes extensive disclosure on progress against our
USLP targets including challenges we have faced, some of which are
summarised in this section of the Annual Report & Accounts.

Our actions on sustainability are creating value in numerous ways,
generating more growth, lower costs, less risk and more trust in the
business. Our Sustainable Living brands, which combine a powerful
purpose with products contributing to the USLP, are a key driver
of growth. In 2017, 26 of our top 40 brands were Sustainable Living
brands including Ben & Jerry’s, Dove and Lifebuoy. Our Sustainable
Living brands grew 46% faster than our other brands and accounted
for 70% of total growth. Product innovations which respond to water
scarcity and climate change at the same time as helping consumers,
continue to create growth opportunities for us. Recent sustainability
innovations which deliver consumer benefits include our new Love
Beauty and Planet range in the US which uses fast-rinse technology
in its conditioners thereby requiring less water. Domestos Flush Less,
available in water-scarce South Africa, keeps toilets clean while saving
nine litres of water per flush.

The USLP strengthens our business by helping us to save costs. Since
our baseline year of 2008 we have saved over €600 million on energy
costs in our factories; and by using fewer materials and producing less
waste we have avoided costs of approximately €234 million.

Through the USLP, we are also responding directly to a number of
macro forces (see page 8) that are both risks and opportunities in our
markets – such as a lack of access to water and sanitation, strains
on the food system, climate, the environment, and rising inequality.
We have identified the broad issue of sustainability, related to the
achievement of our goals in the USLP, as a principal risk (page 29)
as well as a number of specific risks including climate change (page
30) and plastic packaging (page 30). Mitigating the physical impacts
of climate change is critical because we depend on raw materials
sourced from countries that are particularly vulnerable to rising sea
temperatures and changing weather patterns. See pages 33 to 35 for
our response to the risks and opportunities from a low-carbon economy.

Trust is essential for any business, but it must be earned. The USLP is a
key driver of trust among our employees and potential recruits. We are the
number one FMCG graduate employer of choice in around 50 countries
where we recruit. We have been ranked first in the annual GlobeScan
survey of sustainability leaders for eight years and also came top of the
Dow Jones Sustainability Index Personal Products sector in 2018.

IMPROVING HEALTH & WELL-BEING
Our activities impact the health and well-being of millions of people
– through brand-led health and hygiene, and nutrition interventions.
Significant progress has been made against our first USLP goal of
helping more than one billion people improve their health and well-
being by 2020. By the end of 2018, we had reached 653 million people,
making a significant contribution to the Sustainable Development Goal
on Clean Water and Sanitation (SDG6).

In order to increase the reach and social impact of some of our biggest
health & hygiene programmes we continue to explore the potential of using
mass media and digital to drive behaviour change at greater scale, as well
as scaling up partnerships to increase the reach of more conventional
on-ground programmes. Dove, one of Unilever’s biggest brands which grew
at 7.8% in 2018, has reached around 35 million young people since 2004
through its Self-Esteem Project. To expand its reach, Dove has partnered
with the Cartoon Network to create Steven Universe mini episodes which
bring to life the proven themes from our on-ground programmes to boost
self-esteem for young people. Our aim is that this will reach 20 million
young people over the next two years. This series is supported by a music
video which has so far received over 1.8 million views on YouTube. As well as
reaching more young people with body confidence messaging, this activity
is helping to raise overall awareness of Dove’s work to improve self-esteem
which correlates with higher purchase intent.

Since 2010, Lifebuoy's programmes have reached 458 million people
through schools, health clinics and community outreach. Lifebuoy
has recently expanded its behaviour change programme on the
importance of handwashing with soap using mobile technology.
The new service aims to reach out to women in media dark areas,
providing free advice to mothers on their child’s health. Another recent
Lifebuoy partnership with Gavi (the Vaccine Alliance) ties together the
importance of handwashing with soap and immunisation, using a variety
of channels including home visits and mobile communications. While
our programmes have focused on reaching children and mothers on-
ground, we have long believed that TV advertising can drive behaviour
change. To test this, we ran a study in India to assess the effectiveness
of specific Lifebuoy TV adverts. The study showed a significant increase
in the frequency of handwashing with soap after people watched the
adverts. We are progressing with peer review publication of our study.

For more than a decade, we have been working to make our products
even healthier by increasing goodness and reducing nutrients
of concern like sugar, salt and saturated fat. We aim to double
the proportion of our portfolio that meets the highest nutritional
standards, based on globally recognised dietary guidelines. So far
48% of our products have reached this standard and we are on track
to meet our 2020 commitment. We are also using the power of our
brands to empower people to make responsible choices. In support
of our Code Policy on Responsible Marketing, in 2018 95% of our
Foods and Refreshment portfolio had full nutrition labelling on pack
that aligned with Unilever’s product labelling criteria (based on 96%
of global sales from 1 April 2018 to 30 June 2018). We continued
our efforts to improve the goodness in our products and set out the
ambition to provide 200 billion servings by 2022 containing at least one
of the 5 key micronutrients: iron, iodine, zinc, vitamin A or D. We are
developing plans to deliver against the ambition.

REDUCING ENVIRONMENTAL IMPACT
Our activities impact the environment, principally through the use of water,
energy and land as well as the production of waste and greenhouse gas
emissions, largely as a result of consumer use. These impacts are reflected
in the USLP environmental pillar and are supported by our Environmental
Policy which is available on our website. Our environmental big goal is by
2030 to halve the environmental footprint of the making and use of our
products as we grow our business. This is a challenging target requiring
action across our value chain on waste, water and greenhouse gas
emissions – in turn contributing to the Sustainable Development Goals.

As a consumer goods company, we are acutely aware of the causes
and consequences of the linear 'take-make-dispose' model of
consumption. We are taking action across our value chain to reduce,
reuse, recycle and recover post-consumer waste and move towards
a more circular model. Our manufacturing operations have seen a
reduction in total waste disposed to landfill, or incineration without
energy recovery, of around 97% per tonne of production since 2008.

Strategic ReportAnnual Report on Form 20-F 2018DELIVERING LONG-TERM VALUE FOR OUR STAKEHOLDERS CONTINUED

Furthermore, we achieved zero non-hazardous waste to landfill
across our global factory network in 2015 and have maintained this
every year since. We are more than half way towards meeting our
2020 commitment to reduce waste associated with the disposal of
our products. This has reduced by about 31% since 2010 due to
increases in consumer recycling and changes in our portfolio.

In 2017, we made a further commitment on waste, ensuring that all our
plastic packaging will be fully reusable, recyclable or compostable by
2025. We are moving in the right direction to make all of our packaging
recyclable but there is more work to do. Find out more on page 15.
Seventh Generation is eliminating virgin petroleum plastic (new plastic
made from oil) and virgin fibre (virgin wood pulp) from its packs and has
committed that all its packaging will be fully recyclable or compostable
by 2020. In Brazil, Omo is launching its first plant-based detergent in a
100% recyclable pack containing recycled plastic.

We have reduced the water used in manufacturing by 44% per tonne
of production since 2008. Our biggest water impact occurs when
consumers shower, bathe and clean clothes with our products. In
2018, our water impact per consumer use reduced by around 2%
compared to 2010. We recognise that we are a long way short of
halving our water impact and we will not achieve this very challenging
target by the end of 2020. This is due in part to our portfolio being
made up of more products that have a higher than average water
footprint than in 2010 and the significant consumer behaviour change
needed to reduce water consumption when our products are used,
where the vast majority of our water footprint resides. Going forward
we want to broaden our water strategy by recognising the role of water
in our consumers’ lives and its importance as a growth driver for our
business. We are developing and launching innovative products which
deliver the benefits people need with less water, or even no water at
all, as well as products that improve the quality of water.

As with water, our biggest greenhouse gas impact comes through
consumer use. The greenhouse gas impact of our products across
their lifecycle has increased by about 6% since 2010. We are having
more success in areas that are within our direct control such as
manufacturing where we have cut CO2 from energy by 52% per tonne
of production compared to 2008. Similarly, we continue to make
savings through the ongoing roll-out of freezer cabinets that use
more climate-friendly natural (hydrocarbon) refrigerants. Our ability
to meet our target partly depends on changes in the energy markets
worldwide, such as the rate of installation of renewable electricity
in many countries. We have a role to play as an industry leader to
help shape those markets. We are committed to implementing the
recommendations of the Taskforce on Climate-related Financial
Disclosures (see pages 33 to 35). Two of our carbon reduction targets
have been officially approved by the Science-Based Targets Initiative.

Our sustainable sourcing strategy focuses on a set of key agricultural
crops, which are not only crucial to our brands, but also where we
can drive measurable impact for sustainable transformation of the
industry. By the end of 2018, the total volume of our agricultural raw
materials that were sustainably sourced was 56%. In line with our
strategy, sustainably sourced volumes for our 12 key crops increased
by over 4% including significant increases for palm oil and tea, whilst
our sustainably sourced volumes for non-key crops reduced. As a
result, our performance versus 2017 was flat. The sale of our spreads
business during 2018 had a slight downward impact on overall
sustainable sourcing performance given the substantial volume
of sustainable palm oil used by our spreads business.

A number of key activities moved our sustainable sourcing agenda
forward in 2018. We deepened our commitment to transparency with
the publication of our palm oil mill list and the creation of a grievance
tracker for our palm oil supply; and we, along with key NGOs including
WWF, initiated a new jurisdictional approach to palm oil in Malaysia.
The additional programmes were also supported by digital solutions
like leveraging satellite data for deforestation detection and risk
assessments, mapping of smallholder parcels in Indonesia, sending
critical weather alerts to farmers' mobiles in India, and using the
Internet of Things to optimise tea production in Kenya. We are also
piloting innovative approaches to achieving upstream traceability in
several supply chains.

ENHANCING LIVELIHOODS
Our activities have the potential to positively impact the livelihoods of
not only our employees, but the millions of people who are involved
in our value chain – notably smallholder farmers and small-scale
retailers. By 2020, we aim to enhance the livelihoods of millions of
people as we grow our business. In 2018, we made steady progress
across the three pillars of our Enhancing Livelihoods goal.

We believe that women's empowerment is the single greatest enabler
of development and economic growth. We are building a gender-
balanced organisation (page 16) while improving women’s safety in
the communities in which we operate, and developing employment
opportunities through the Shakti programme which has provided work
for around 113,000 women, equipping them to sell Unilever products
in low income rural communities. Shakti continues to scale up in India,
Sri Lanka, Pakistan and Nigeria and is now being rolled out to new
countries, including Colombia. By 2018, we had also enabled about
1,724,000 women to access initiatives aiming to develop their skills.

As well as directly creating wealth and jobs, our business supports
millions of people who source, make and sell our products – we call
this inclusive business. By 2018, we had enabled 746,000 smallholder
farmers and over 1.7 million small-scale retailers to access initiatives
to improve agricultural practices or increase incomes. The Philippines
Kabisig programme, for example, has reached over 165,000 small
retailers, training them in stock control, financial management, sales
and customer service – increasing the earning potential of small-scale
retailers at the same time as growing turnover for Unilever.

Our Responsible Sourcing Policy (RSP) is at the heart of our ambition
to source 100% of procurement spend responsibly and through
suppliers that meet our RSP requirements. In 2018, we focused on
completing the onboarding of high risk suppliers into our compliance
database and programme. Over 20,000 suppliers have now completed
their registration and are undergoing review processes allowing us to
verify their compliance to the RSP and identify areas for remediation.
In 2018, 61% of procurement spend was through suppliers who were
assessed as meeting the mandatory requirements of the RSP.

We continued to embed human rights with a focus on our eight
salient issues (ie those at risk of the most severe negative impact
through Unilever’s activities or business relationships). We also began
a process to review these through a series of global and regional
consultations. This year, one of our primary areas of focus has been
on the eradication of forced labour in our supply chain through
training, capacity building and driving a robust vetting process for
temporary labour agencies. We launched and are rolling out our Land
Rights Principles and Implementation Guidance. Human rights risks
are included as part of our sustainability and ethical principal risks
(see pages 29 and 33). See our website and our latest Human Rights
report for more on our activities and due diligence processes.

Safety is a critically important part of our USLP. Our Vision Zero
strategy continues to aim for: Zero Fatalities; Zero Injuries; Zero Motor
Vehicle Accidents; Zero Process Incidents; and Zero Tolerance of
Unsafe Behaviour and Practices. This is supported by our Code Policy
on Occupational Health & Safety. Our Total Recordable Frequency Rate
from 1 October 2017 to 30 September 2018 went from 0.89 accidents
per 1 million hours worked in 2017 to 0.69, thanks to a continuous
focus in high risk areas. See page 47 for more on safety.

DRIVING TRANSFORMATIONAL CHANGE
Our USLP is a bold ambition to achieve change within our company.
However, we are just one company among many and the problems
our society faces are urgent, large and complex. Our 'transformational
change' agenda combines direct action on the SDGs with partnerships
and external advocacy to create change on a systemic scale – while
unlocking business opportunities at the same time.

We are working on a number of areas where we believe we can
make the biggest difference: climate change and forests; sustainable
agriculture, land use and food security; health and well-being including
water, sanitation and hygiene; and improving livelihoods and creating
more opportunities for women. Many of these issues relate directly to
the SDGs. We are stepping up our engagement with governments, NGOs
and others in our industry on these issues. We are also developing a
range of partnerships that will accelerate and scale new solutions.

Strategic ReportAnnual Report on Form 20-F 2018UNLOCKING GROWTH OPPORTUNITIES FROM THE SUSTAINABLE DEVELOPMENT GOALS
The Sustainable Development Goals (SDGs) are fundamental to future economic and business growth. The Business & Sustainable Development
Commission, co-founded by Unilever, concluded that successful delivery of the SDGs will create market opportunities of at least $12 trillion
a year. By using our resources as a business to address issues such as sanitation, hygiene, nutrition, gender equality and climate change –
among other interconnected growth opportunities covered by the SDGs – we are delivering benefits for our business, shareholders and society.
Partnerships (SDG17) play a key role in unlocking these opportunities. Business, governments and civil society must work together, through
innovative partnerships, with new types of funding and new business models. We are working with a range of partners across many of the SDGs,
often through our brands. Below we provide three examples where we have taken action in 2018. There are many more on our website.

SDG1 – NO POVERTY: EMPOWERING SMALL-SCALE RETAILERS FOR GROWTH

Our products are sold in more than 190 countries, generating income and employment for millions of retailers and distributors who bring our
brands to consumers. Inclusive distribution models such as Shakti and our retailer training programmes such as Kabisig in the Philippines
help small-scale retailers to grow while strengthening our own sales and supply networks.

For any small retailer, selling out of a product line is a missed opportunity. But for retailers who are stuck in cash economies without access to credit,
especially in the developing world, running out of stock can be a routine event.

In 2017, we began a strategic partnership with Mastercard in Kenya. Together, we've launched the Jaza Duka ('fill up your store') initiative, which uses
a combination of innovative technology, targeted training and the strength of our relationships with our distribution network to free retailers from the
constraints of cash, helping them fulfil their potential.

By digitising the processes of buying supplies and selling goods, small-scale retailers can build the credentials they need to access short-term working
capital loans from Kenya Commercial Bank. This gives them better control of their inventory, so they can keep their shelves full and meet consumer
demand. They are also able to access training and essential financial tools to help them grow their sales and incomes. Our research found that
stores that fully moved to the new platform grew their sales of Unilever products by up to 20%. These are still early days. But if the partnership keeps
succeeding, we believe it could help drive growth and improve incomes.

Our partnership with Mastercard is just one of a number of exciting new innovative last-mile distribution projects which harness the power of digital
and e-commerce to create positive social impact at the same time as helping retailers grow.

SDG6 – CLEAN WATER AND SANITATION: ADDRESSING BASIC NEEDS THROUGH OUR PRODUCTS

Nearly a billion people defecate in the open and around 2.3 billion people live without adequate sanitation. Addressing water, sanitation and
hygiene needs is a significant opportunity for Unilever. A number of our health and hygiene brands directly address these needs through products
and innovative partnerships which drive growth and deliver positive impact at scale, including Lifebuoy, Domestos, Vaseline, Signal and Pureit.

Domestos, which is one of our fastest growing brands, has committed to help 25 million people gain improved access to a toilet by 2020 in countries
such as India. By partnering with UNICEF, over 16 million people between 2012 and 2017 gained access to a toilet through behaviour-change
interventions and capacity-building initiatives. In 2018, Domestos went one step further and refocused its brand and marketing investment around
its purpose. The new ‘Unstoppable’ campaign, now live in the UK and Poland, is showcasing how Domestos is helping to fight germs while improving
sanitation conditions for millions around the world.

Pureit, our water purification business, is another brand that is well positioned to address clean water needs in South Asia. It has provided 106 billion
litres of safe drinking water since 2005 through the sale of water purifiers. Pureit is looking at different models to serve communities with accessible
and affordable clean drinking water where it is most needed. One model is community water plants, which provide 20 litres of clean drinking water from
a central point for just 8 to 10 rupees. In 2017, we began partnering with Water Health International (WHI) who are global experts in community water
systems. So far, we have set up four pilot plants in the city of Tumkur in India, managed by WHI.

These examples show that everyday products can help prevent disease and improve people’s wellbeing, while helping us grow our business.

SDG12 – RESPONSIBLE CONSUMPTION AND PRODUCTION: RETHINKING PLASTIC PACKAGING

Plastic has become an integral part of our lives. It protects products and makes them easy to dispense or reseal after use. But with that has
emerged the enormous – and growing – problem of plastic waste. It is littering our environment, polluting our seas and killing aquatic life. The
challenge is that so little plastic packaging is currently recycled, recyclable or reusable. The result is a significant economic loss for society and
business. It is for these reasons that we have singled out plastic packaging as a principal risk for our business in 2018 (see page 30 for more).

In 2017, we were one of the first multinational companies to make a public commitment to address plastic packaging waste. By 2025, all our plastic
packaging will be reusable, recyclable or compostable and at least 25% of it will come from recycled plastic content. To help deliver these commitments
we have an internal framework: Less plastic. Better plastic. No plastic. 'Less plastic' is about cutting down how much we use in the first place. Since
2010 we've reduced the weight of our packaging by 18% through lightweighting and design improvements. For example, several years ago we launched
MuCell technology which uses gas-injection to create gas bubbles in the middle layer of a bottle wall. This cuts the amount of plastic by at least 15%.

'Better plastics' is about making our products recyclable and eliminating problematic materials. Specifically, how we get recycled content in our
packaging – a number of our brands are working to incorporate post-consumer recycled (PCR) plastic in their products including Love Beauty and
Planet, TRESemmé, Sunlight and Omo. Better plastics is also about how we work with governments and partners to build infrastructure so we can help
keep plastic in the economy and out of the natural environment. Our Community Waste Banks and CreaSolv® Sachet recycling technology pilot plant in
Indonesia are at the heart of these efforts. The plant is currently processing around three tonnes of discarded sachets per day with an aim to scale up
this process.

'No plastics' is about thinking differently – using alternative materials such as aluminium, glass, paper and board where possible and removing plastic
where it is not necessary, such as plastic stiffeners from soap bars. We're also looking at reuse, encouraging shoppers to refill or reuse through vending
machines. It's early days but we are committed to finding non-plastic packaging solutions.

We're putting significant resource into tackling the issues associated with plastic packaging. It makes business sense to keep plastic in the economy
and is imperative for the planet.

Strategic ReportAnnual Report on Form 20-F 2018DELIVERING LONG-TERM VALUE FOR OUR STAKEHOLDERS CONTINUED

OUR PEOPLE
UNILEVER EMPLOYEES ARE EMPOWERED TO ACT LIKE
BUSINESS OWNERS IN A PURPOSEFUL CULTURE.
The world of work is rapidly changing. Automation, flexible resourcing
and new business models continue to impact our business and
workforce. The workforce expects more flexibility and is increasingly
freelance. A job for life is no longer the norm. Once employed, people
must regularly reinvent themselves with new skills. The digital
transformation of work and growth of automation is bringing both
great benefits, but also great disruption. The composition of the
workforce is changing too. By 2020, Millennials will make up around
35% of the global workforce. Just over half of Unilever's own workforce
in 2018 were Millennials.

CREATING A FUTURE-FIT WORKFORCE
In response to the trends outlined above, we are taking action across
our business, including simplifying processes and ways of working
to free people from non-value adding tasks so they can focus on key
priorities. 2018 saw the continued implementation of Connected
4 Growth (C4G), our organisational change programme, and the
creation of three new Divisions to bring further focus and simplicity.
Our regular surveys show that 74% of our people now feel more
empowered to make decisions. Our time to bring innovations to
market is now 40-50% faster than in 2016.

With the advance of AI and robotics, it is more important than ever that
we strike the right balance between the use of technology and more
human-centred approaches. We have invested in Una Hub, an AI-based
platform, which automates responses to all general employee
enquiries so People Experience Leads and HR Business Partners
can focus on more complex queries, and provide face-to-face support
where relevant.

Our research shows that a focus on purpose helps attract talent
and binds us together for growth. Through our People with Purpose
programme, more than 30,000 employees have joined workshops to
help them define their purpose, with 50,000 targeted by 2019. Our
global Univoice survey results reinforce the importance of these
workshops – 92% of employees who believe they can live their purpose
at Unilever, also say that their job inspires them to go the extra mile.

As the workplace changes it is important that we continue to prioritise
mental wellbeing. In 2018, we officially recognised World Mental
Health Day in October and continue to invest in the mental wellbeing
of our people, alongside their physical wellbeing. This builds on the
roll-out of a mental wellbeing framework globally several years ago
which guides us in tackling the health risks across our business.

Another area of focus is on personalising training and capability
building to develop the right leaders and teams who are fit for
the future. We are responding to demands for new skills through
continuous learning. Since the launch of Degreed, our online learning
platform in 2017, 76,000 people have access to 2.3 million pieces of
learning content, with 55,000 pieces being consumed on a monthly
basis, including PowerUp, our digital upskilling programme. We are
also accelerating impact through new agile ways of working. In the UK
and US we are piloting more agile team structures to ensure we have
the right people, doing the right job at the right time, while breaking
down silos.

RECRUITMENT AND RETENTION
Our attractiveness as an employer is improving amongst Millennial
and Generation Z recruits. We are the number one FMCG graduate
employer of choice in around 50 countries and the most followed
FMCG employer on LinkedIn with over 4 million followers as at the
end of 2018.

In 2018 we introduced more ways to give our employees a voice,
through monthly pulse surveys and global and local surveys on a range
of topics, reaching around 70,000 people. Our largest listening exercise
is the annual engagement survey called UniVoice which covered
a representative sample of almost 25,000 office-based employees
in 2018. We maintained high levels of employee engagement – 90%
of employees said they were proud to work for Unilever and our
Engagement Index remained at 74%. The survey also reinforced the

importance of focusing on speed and responsiveness to the market.
We use survey results to help us take action in areas where there is
room for improvement. For example, last year we implemented the
new Standards of Leadership in response to feedback we received.
Alongside our UniVoice survey, we use Glassdoor to benchmark our
employee experience. As at 31 December 2018, our rating of 3.9 out
of 5 was above the site average of 3.2.

DIVERSITY AND INCLUSION
We want our culture to be inclusive, promoting gender balance and
respecting the contribution of all employees regardless of gender, age,
race, disability or sexual orientation – as set out in our Code Policy on
Respect, Dignity and Fair Treatment.

The USLP sets out clear targets for expanding opportunities and
enhancing access to skills and training for women in our value chain.
It also sets out our ambition to build a gender-balanced workforce
within Unilever, with 50% of women in management positions by 2020.
By the end of 2018, 49% of total management were women (47% in
2017). Among the top 92 executives, 23% were women (22% in 2017).
If you include employees who are statutory directors of the corporate
entities whose financial information is included in the Group’s 2018
consolidated accounts in this Annual Report and Accounts, the
number increases to 474 (71%) males and 190 (29%) females. 38%
(5 out of 13) of the Board were female (38% in 2017). Of our total
workforce of 154,848, 101,383 (65%) were male and 53,465 (35%)
were female at the end of 2018.

We run programmes across Unilever aimed at attracting, retaining
and developing female talent. This includes developing candidates for
potential future roles, aiming for 'balanced slates' so that we interview
equal numbers of men and women for roles, and practical help such
as a minimum 16 weeks paid maternity leave as a global standard –
more than the regulatory requirement in over 50% of countries where
we operate. In 2018, we also committed to introduce by the end of
2019, three weeks of fully paid paternity leave as a benefit to all new
fathers, adopting partners and parents in same-sex couples.

Unilever has a commitment to gender equality and fairness in the
workplace based on equal pay for equal work and achieving greater
gender balance. Pay and overall reward is intended to be gender
neutral, with any differences between employees in similar jobs
reflecting performance and skill. Gender pay gaps develop where
there is a representational imbalance between genders. When we look
at our worldwide business as a whole, in countries with more than
250 employees, the average female pay was 26% higher than male
pay in 2018 (2017: 25%). This is largely due to the fact that 80% of our
lower paying blue-collar roles are held by male employees. ‘Equal pay
for equal work’ is our primary ambition and is a crucial part of fair
compensation. Our Framework for Fair Compensation reviews the
average pay differences between genders at each work level and in
each country. The most recent analysis highlights that there is more
work to do to continue improving our gender balance, and related
gender pay gaps, at various levels and in various countries throughout
the business.

BUSINESS INTEGRITY
Our principles and values apply to all our employees through our
Code and Code Policies. Our employees undertake mandatory annual
training on these Policies via online training modules and an annual
business integrity pledge. Our Business Integrity guidelines include
clear processes for managing Code breaches. For more information
on Business Integrity see our website.

In 2018 1,206 whistleblowing incidents were opened (defined as Code
Policy cases raised). We closed 1,252 incidents across all areas of
our Code and Code Policies, with 662 confirmed breaches. In 2018,
we terminated the employment of 330 people. Business integrity risks
are included as part of our ethical and legal and regulatory principal
risks (see page 30). The Code and Code Policies reflect our desire to
fight corruption in all its forms. We are committed to eradicating any
practices or behaviours though our zero-tolerance policy.

Our Responsible Sourcing Policy and Responsible Business Partner
Policy help to give us visibility of our third parties to ensure their
business principles are consistent with our own.

Strategic ReportAnnual Report on Form 20-F 2018OUR PARTNERS
WE WORK WITH MANY PARTNERS TO SUPPORT THE
SUSTAINABLE GROWTH OF OUR BUSINESS.

ENGAGING STAKEHOLDERS
We have many interactions with our stakeholders on a daily basis.
Our Code of Business Principles and Code Policies guide how we
interact with suppliers, customers, governments, Non-Governmental
Organisations (NGOs) and trade associations in particular. Only
authorised and appropriately trained employees or representatives can
engage with these groups and we require that a record should be kept
of all interactions and that all engagement must be conducted: in a
transparent manner with honesty, integrity and openness; in compliance
with laws and in accordance with Unilever’s values. Our website contains
further disclosure on how we engage with our stakeholders.

SUPPLIERS
Our supply chain is very diverse and highly dynamic as we respond
to changing consumer preferences, in line with our C4G programme.
Our suppliers help us meet consumer needs by innovating, creating
capacity and delivering quality materials and services for our products.
We work with a large range of suppliers in over 160 countries – from
multinational companies through to SMEs and smallholder farmers.

We screen suppliers in relation to their supply chain capabilities
and the level of associated environmental and social risk. Managing
supplier risk is a key role of our Supply Chain function. All suppliers
must complete our registration process to assess compliance with the
mandatory requirements of our Responsible Sourcing Policy which
includes anti-bribery and corruption. We conduct audits and follow
up issues identified where necessary.

Partner to Win is our approach to building long-term relationships
with selected key strategic supplier partners in order to achieve
mutual growth. It focuses on five key areas: quality and service,
innovation, value, sustainability and capacity and capability. Partner
to Win helps us strengthen supplier and customer collaboration
and improves operational efficiency. In 2018, we had 175 Partner
to Win suppliers, representing 35% of total procurement spend.

We came first in the annual Gartner Supply Chain Top 25 for the third
year running, emphasising our leading practices in the area of supply
chain management, in particular on sustainability and digitalisation.

CUSTOMERS
In a fragmented channel landscape, those companies that best serve
their shoppers and customers with bespoke solutions will benefit
most. Unilever serves consumers through ten different channels:
hyper and supermarkets, e-commerce, out of home, drug stores,
small stores, discounters, Food Solutions, Unilever International,
prestige channel and global retail.

We serve around 26 million retail stores globally of which we cover
eight million directly and another 18 million indirectly through
wholesale and cash & carry.

In 2018 we focused on developing our e-commerce channels, digitising
our value chain to respond to the rapid fragmentation of traditional
routes to market. We are actively driving B2C and B2B e-commerce
in our top 30 markets. Our focus is to build a balanced e-commerce
business model, growing across e-retailers, bricks and mortar
online sales and direct-to-consumer businesses. In 2018 we signed
a logistics partnership with JD.com, China's largest retailer. JD will
help to bring our most popular products to the most hard-to-reach
communities in China, securely and quickly.

Health & Beauty channels have been an area of focus for Beauty
& Personal Care. In Europe we have been increasing our presence
and share with the discounter channel, which continues to see
growth, contributing to top line growth for Unilever while delivering
incremental gross profit.

We are collaborating with hyper and supermarkets to win with
omni-channel shoppers and evolve new experiential concepts with
these large-scale retailers to ensure Unilever brands enjoy the best
positioning in store and online.

We continue to engage with small-scale retailers by professionalising
their store operations through capability training. Our Rise Sales
Academy is currently being piloted in Nigeria and Sri Lanka to deliver
store operations retail training for micro retailers across the world.
In turn, this will help contribute to our USLP target to improve the
incomes of 5 million small-scale retailers in our distribution network.

GOVERNMENTS
We co-operate and engage with governments, regulators and
legislators, both directly and through trade associations, in the
development of proposed legislation and regulation which may affect
our business interests. All employees involved in political engagement
must comply with our Code of Business Principles and Code Policies.
We do not support or fund political parties or candidates or any groups
that promote party interests.

Our participation in policy discussions is varied, covering macro topics
such as climate change, nutrition and plastic packaging. We engage
with government stakeholders directly or through membership of
representative organisations, including trade associations.

TRADE ASSOCIATIONS
We are members of and support a number of trade associations
and similar organisations which help us to advance our public policy
interests. We keep a record of our trade association memberships
and membership fees, which is regularly updated. We also engage
with peer companies, both individually and in coalitions, on issues
of mutual interest. This includes working together to implement
sustainable business strategies and drive change.

These associations reflect our global scale and presence across
several product categories. We list our global memberships in the
Engaging with stakeholders section on our website. We are registered
in the Transparency Register of the European Union. Our US trade
association memberships can be found on the FAQ section of the
Unilever USA website.

NON-GOVERNMENTAL ORGANISATIONS
We are building transformational partnerships in collaboration with
NGOs who share our vision for a more sustainable future. These
partnerships are instrumental in improving the quality of people’s
lives, driving growth, achieving our USLP targets and contributing to
the Sustainable Development Goals.

In collaboration with NGOs, we build programmes on the ground to
implement our brands’ purpose in addition to advancing our efforts in
areas such as sustainable sourcing and distribution – often in partnership
with governments and other businesses. We drive scale through new
business models, digital technologies and external financing.

Our leadership engages with stakeholders through platforms such as
the World Economic Forum, UN Global Compact, the World Business
Council for Sustainable Development and the Consumer Goods Forum,
championing a more inclusive model of capitalism and the pursuit
of long-term value creation for the benefit of multiple stakeholders.
Partnerships with NGOs are crucial to deliver the United Nations
Sustainable Development Goals (see page 15).

Strategic ReportAnnual Report on Form 20-F 2018DELIVERING LONG-TERM VALUE FOR OUR STAKEHOLDERS CONTINUED

OUR SHAREHOLDERS
WE DELIVERED SOLID PERFORMANCE IN 2018 AND REMAIN
ON TRACK FOR OUR 2020 TARGETS.
We aim to build long-term relationships with our shareholders
through positive engagement for the benefit of all our stakeholders.
We engage directly with our shareholders on a broad range of financial
and environmental, social and governance (ESG) matters. During 2018
we engaged with shareholders on a number of topics including our
Remuneration Policy and on the simplification of Unilever. See page
39 and our website for more details. In addition to direct engagement
we regularly engage indirectly via ESG ratings organisations such as
MSCI, Sustainalytics and ISS, as well as investor-focused sustainability
rankings such CDP and the Dow Jones Sustainability Index.

PERFORMANCE IN 2018
Underlying sales growth for 2018 was 2.9% and underlying operating
margin was 18.4%, a rise of 90 basis points. Turnover declined by 5.1%
due to the sale of spreads and currency devaluation; operating margin
was 24.6% due to profit on the spreads disposals.

Emerging markets saw a good performance in underlying sales
growth of 4.6% including improved price growth in response to
commodity inflation. Notable improvements were in India, which was
strong across all categories, and China where strong volume growth
was seen particularly in e-commerce. Argentina was classified as
hyper-inflationary and price growth was excluded from underlying
figures from July; any volume growth or decline is included within
underlying figures. North America saw an improvement in underlying
sales growth and there was acceleration in the US, helped by our
acquisition programme in recent years, particularly in BPC. Europe
remains challenged by a deflationary environment generally. We
delivered solid volume-driven growth across our business with good
margin progression.

We generated €5.0 billion of free cash flow and 18.8% return on capital.
Underlying earnings per share was €2.36, a rise of 5.2%, and dividends
were increased 8%, reflecting Unilever’s confidence in future profit
growth and cash generation. Diluted earnings per share was €3.48.
Our share price has fallen 0.42% for PLC shareholders and risen 0.98%
for NV shareholders. For information on our non-GAAP measure, see
pages 23 to 26.

PROGRESS AGAINST OUR 2020 FINANCIAL TARGETS
In April 2017, we set out financial targets for 2020 to further accelerate
shareholder value. In 2018 we maintained a strong delivery of savings
with over €2 billion of savings from the supply chain, ZBB and change
programmes. As a result, we are on track to meet our cumulative
savings target of €6 billion by 2019 and a 2020 underlying operating
margin target of 20%, compared to 16.4% in 2016.

We continue to maintain our leverage by targeting a Net Debt to
underlying EBITDA ratio of 2x, consistent with a credit rating of at least
A/A2. During 2018, we returned €6 billion to shareholders through our
share buyback programme following the sale of spreads.

During the year the Boards decided to withdraw proposals to revise
Unilever’s dual-headed legal structure after extensive engagement
with shareholders. We remain firmly committed to our 2020
improvement programme and are confident of meeting its key
goals. To simplify our capital structure, we cancelled the NV
preference shares in February 2019 (see page 38).

BUSINESS TRANSFORMATION
Our brand portfolio continues to evolve to match our Divisions' strategic
priorities, resulting in the sale of assets that no longer fit our growth
model or the acquisition of assets that take us into new market segments
and build new market positions. This active portfolio management means
that in the past nine years we have sold €6.8 billion of turnover, mainly
in the lower growth foods businesses. During that same period, we have
acquired approximately €5.3 billion of turnover. The spreads disposals
in July allow Foods & Refreshment to focus on growth.

Actively managing our brand portfolio through acquisitions and
disposals remains an important strategic growth driver. In December
we announced an agreement to acquire the Health Food Drinks
portfolio of GlaxoSmithKline (GSK) in India, Bangladesh and 20 other
predominantly Asian markets. Further details of the transaction can
be found on our website. The acquisition includes iconic brands such
as Horlicks and Boost, and a product portfolio supported by strong
nutritional claims. The transaction is aligned with our strategy to
increase our presence in health-food categories and in high-growth
emerging markets. The transaction is subject to customary regulatory
and shareholder approvals, with expected completion around
12 months from the announcement.

In October we completed the acquisition of a 75% stake in the Italian
personal care business Equilibra which has a growing presence
in the natural skin and hair care segments. We also completed
the acquisition of Quala’s Beauty & Personal Care and Home Care
brands. We acquired a number of exciting new businesses including
the Vegetarian Butcher (Netherlands) which expands our portfolio
into plant-based foods, and three ice cream brands – Adityaa (India),
Betty (Romania) and Denny (Bulgaria). With the exception of brands
launched in countries where they were not previously sold, acquisitions
and disposals only contribute to underlying sales growth from
12 months after completion.

A key part of our 2020 programme is faster portfolio evolution in order
to focus Unilever on more rapidly growing segments. This process
continued at pace during 2018 with the focus on new brand launches
and evolving our core brands. Our C4G organisation means we can
respond to consumer trends more quickly. We have launched nearly
30 brands in the last two years. Local brands are also being launched
more quickly followed by rapid global roll-out, for instance Breyers
Delights, Love Beauty and Planet and Lakme all responding to the
trend for more natural and healthy products.

Evolving our core brands has also accelerated. Brands such as Dove,
Lifebuoy and Sunsilk in Beauty & Personal Care all launched new
variants responding to consumer trends. In Home Care there were new
launches of Domestos, Cif and Comfort while Foods & Refreshment
extended the Knorr, Hellmann’s and Lipton brands with new on-trend
variants (for more information on brand launches see pages 11 to 12).

Realising the opportunities from digital technology to help deliver
further growth and margin improvement is another key part of our
business transformation. We have launched a digital transformation
programme across all aspects of our value chain. We have 30
platforms across Unilever which power our business using digital
technologies. Our Enterprise & Technology Solutions team is set
up to deliver a technologically enabled Unilever for the future while
ensuring that processes and activities are shared and scaled across
the business. This will allow us to use technology as a competitive
advantage rather than a cost.

Digital technology changed our approach to marketing some time ago
but the transformation of Unilever more broadly has begun at pace.
AI, machine learning and voice related technologies are being used
to deliver personalised and immersive experiences to our consumer
platforms such as Recipedia and Cleanipedia websites. We are also
driving digital through our R&D organisation, introducing new tools to
increase the speed, efficiency and quality of our innovation processes.

Strategic ReportAnnual Report on Form 20-F 2018NON-FINANCIAL INFORMATION STATEMENT

In accordance with sections 414CA and 414CB of the Companies Act 2006 which outline new requirements for non-financial reporting, the table
below is intended to provide our stakeholders with the content they need to understand our development, performance, position and the impact of
our activities with regards to specified non-financial matters. Further information on these matters can be found in our online Sustainable Living
Report, Human Rights Report as well as policy documents contained on our website.

Non-financial matter and relevant sections
of Annual Report

Environmental matters
Relevant sections of Annual Report & Accounts:

• Reducing environmental impact
• In focus: climate change risks and opportunities

Social and community matters
Relevant sections of Annual Report & Accounts:

• Improving health and well-being
• Enhancing livelihoods
• Safety
• Engaging stakeholders

Employee matters
Relevant sections of Annual Report & Accounts:

• Developing a future-fit workforce
• Diversity and inclusion
• Recruitment and retention
• Enhancing livelihoods

Human rights matters
Relevant sections of Annual Report & Accounts:

• Diversity and inclusion
• Enhancing livelihoods

Anti-corruption and bribery matters
Relevant section of Annual Report & Accounts:

• Business integrity

Annual Report page reference

• Policy: Pages 13 and 33 to 35
• Position and performance: Pages 7 and 13 to 14
• Risk: Pages 30 and 33 to 34
• Impact: Pages 13 to 15 and 33 to 35

• Policy: Pages 13 and 15
• Position and performance: Pages 7, 13 to 15
• Risk: Page 31
• Impact: Pages 13 to 15

• Policy: Pages 14 and 16
• Position and performance: Pages 10 and 16
• Risk: Page 29
• Impact: Page 14 and 16

• Policy: Pages 14 and 17
• Position and performance: Pages 7 and 14
• Risk: Page 29
• Impact: Pages 14 and 17

• Policy: Page 16
• Position and performance: Page 16
• Risk: Pages 29 and 31
• Impact: Page 16

Strategic ReportAnnual Report on Form 20-F 2018FINANCIAL REVIEW

FINANCIAL OVERVIEW 2018

CONSOLIDATED INCOME STATEMENT
Turnover declined by 5.1% to €51.0 billion including an unfavourable currency impact of 6.7% (2017: 2.1% unfavourable currency impact)
mainly due to weakening of currencies in key emerging markets such as Brazil, Argentina and India. Underlying sales growth^ was 2.9% (2017:
3.1%), with a positive contribution from all divisions. Underlying volume growth was 1.9% (2017: 0.8%) and underlying price growth was 0.9%
(2017: 2.3%). The net impact of acquisitions and disposals was a reduction in turnover of 1.0% (2017: 0.9% increase) with the impact of recent
acquisitions such as Carver Korea and Quala outweighed by the disposal of the spreads businesses. Emerging markets contributed 58% of total
turnover (2017: 58%) with underlying sales growth of 4.6% (2017: 5.9%) coming from price growth of 1.7% and volume growth of 2.8%. Developed
markets underlying sales growth was 0.5% coming from volume growth of 0.7% slightly offset by price decline of 0.2%.

Underlying operating margin improved by 0.9 percentage points to 18.4%. Gross margin improved by 0.5 percentage points driven by margin-
accretive innovations and continued strong delivery from our ‘5-S’ savings programmes. As a percentage of turnover, overheads and brand and
marketing investment were down by 0.3 percentage points and 0.1 percentage points respectively as a result of productivity gains from zero-based
budgeting.

Operating profit was up 41.5% to €12.5 billion (2017: €8.9 billion) as a result of €3,176 million from non-underlying items. Non-underlying items
within operating profit comprised a gain on spreads disposal of €4,331 million, a credit from the early settlement of contingent consideration
related to the Blueair acquisition of €277 million, partially offset by restructuring costs of €914 million, acquisition and disposal related costs of
€201 million and impairment and one-off items of €317 million.

Highlights for the year ended 31 December

Turnover (€ million)

Operating profit (€ million)

Underlying operating profit (€ million)*

Profit before tax (€ million)

Net profit (€ million)

Diluted earnings per share (€)

Underlying earnings per share (€)*

2018

2017 % change

50,982

12,535

9,359

12,383

9,808

3.48

2.36

53,715

8,857

9,400

8,153

6,486

2.15

2.24

(5.1)

41.5

(0.4)

51.9

51.2

62.0

5.2

Net finance costs were €481 million in 2018 compared with €877 million in 2017, which included a one-off cost of €382 million for the buyback of
the Unilever NV preference shares. The cost of financing net borrowings was €57 million higher than 2017. The increase was primarily driven by
an increase in net debt which was partially offset by lower interest rates and a prior year one-off in Brazil relating to the interest element of an
indirect tax amnesty programme. The average interest rate on net debt reduced to 2.2% from 2.7% in 2017. The pensions financing charge was
€25 million, down from €96 million in 2017 reflecting a lower pension deficit at the beginning of 2018.

A monetary gain of €122 million was recorded following adoption of IAS 29 ‘Financial Reporting in Hyperinflationary Economies’ in Argentina (see
note 1) from 1 July 2018.

The effective tax rate was 21.1% compared with 20.8% in the prior year. In both years the rate was low relative to longer term norms, due to the
significant impact on tax of the disposals of our spreads businesses in 2018 and US tax reform in 2017.

Net profit from joint ventures and associates was up 19% at €185 million, with the increase coming mainly from a gain on disposal of the spreads
business of the Portuguese joint venture. Other income from non-current investments was €22 million versus €18 million in the prior year.

Diluted earnings per share were up 62.0% at €3.48. The increase was mainly driven by the €4,331 million gain on disposal for the spreads
businesses, improvement in operating margin and the impact of the share buyback programmes.

The independent auditors’ reports issued by KPMG Accountants N.V. and KPMG LLP on the consolidated results of the
Group, as set out in the financial statements, were unqualified and contained no exceptions or emphasis of matter. For
more details see pages 67 to 74.

The consolidated financial statements have been prepared in accordance with IFRS as adopted by the EU and IFRS
as issued by the International Accounting Standards Board. The critical accounting policies and those that are most
significant in connection with our financial reporting are set out in note 1 on pages 79 to 82 and are consistent with
those applied in 2017.

Certain measures used in our reporting are not defined under IFRS. For further information about these measures, please refer to the commentary on non-GAAP
measures on pages 23 to 26.

^ Wherever referenced in this report, underlying sales growth (USG) and underlying price growth (UPG) do not include price growth in Venezuela for the whole of 2018
and in Argentina from July 2018. USG and UPG for 2017 do not include Q4 2017 price growth in Venezuela. See pages 23 and 24 on non-GAAP measures for further
details.

Strategic ReportAnnual Report on Form 20-F 2018range. In savoury, Knorr was helped by good performance of cooking
products in emerging markets and more organic and natural innovations
such as a new ‘soup in glass’ range. In dressings, campaigns centred
around Hellmann’s purpose to fight food waste helped to increase brand
equity, but sales were held back by promotional intensity particularly
in the US. Our actions to transform the portfolio are working: strong
innovations including Knorr rice and pasta pots as well as our new
brands Red Red, PrepCo and Mãe Terra helped us build scale in the fast
growing snacking segment.

• Underlying operating profit declined by €203 million including a

€236 million adverse contribution from exchange rate movements.
Underlying operating margin improvement added €247 million and
underlying sales growth contributed €56 million. Acquisition and
disposal related activities had an overall negative impact of €270
million mainly due to loss of profit of the spreads business from
the date of its disposal on 2 July 2018. Underlying operating margin
improvement reflects strong gross margin improvement and lower
overheads despite an adverse impact from the spreads disposal.

HOME CARE

Turnover (€ million)

10,131

10,574

(4.2)

2018

2017 % change

Operating profit (€ million)

Underlying operating profit (€ million)

Operating margin (%)

Underlying operating margin (%)

Underlying sales growth (%)

Underlying volume growth (%)

Underlying price growth (%)

1,160

1,317

11.5

13.0

4.2

2.3

1.9

1,138

1,288

10.8

12.2

4.4

2.1

2.3

1.9

2.3

0.7

0.8

KEY DEVELOPMENTS
• Turnover declined by 4.2% including an adverse currency impact of

8.3%. Underlying sales growth was 4.2%, coming from volume growth
of 2.3% and price growth of 1.9%. Home and hygiene grew strongly
led by Sunlight which was helped by a new communication focussed
on building functional awareness, as well as the continued success
of Domestos toilet blocks. In fabric sensations, Comfort was helped
by market development in India and China as well as the launch into
Germany. Fabric solutions grew strongly helped by our strategy to
encourage consumers in emerging markets to uptrade to premium
formulations like Surf Excel Matics in India, and innovations such as Omo
eco active with recycled packaging, plant extracts and naturally derived
fragrances. Seventh Generation also grew well.

• Underlying operating profit increased by €29 million, including a

€144 million adverse contribution from exchange rate movements.
Underlying operating margin improvement contributed €113 million.
Underlying sales growth and acquisition and disposal related
activities added €55 million and €5 million respectively. Underlying
operating margin improvement was mainly due to lower overheads
and brand and marketing efficiencies.

The Group has revised its operating segments to align with the new
structure under which the business is managed. Operating segment
information is now provided based on three product areas: Beauty &
Personal Care, Foods & Refreshment and Home Care.

BEAUTY & PERSONAL CARE

Turnover (€ million)

20,624

20,697

(0.3)

2018

2017 % change

Operating profit (€ million)

Underlying operating profit (€ million)

Operating margin (%)

Underlying operating margin (%)

Underlying sales growth (%)

Underlying volume growth (%)

Underlying price growth (%)

4,130

4,508

20.0

21.9

3.1

2.5

0.6

4,103

4,375

19.8

21.1

2.9

1.4

1.5

0.7

3.0

0.2

0.8

KEY DEVELOPMENTS
• Turnover declined by 0.3% including a negative currency impact of 7.0%.
Acquisitions contributed 3.9% and underlying sales growth was 3.1%.
Dove delivered another year of broad-based growth. Skin care grew
strongly helped by innovations such as the new Vaseline range with
clinical strength moisturisation and other brands addressing the fast
growing naturals trend including Love, Beauty & Planet. Growth in skin
cleansing was helped by innovations such as the relaunch of Lifebuoy
with active silver, new premium formats including Dove exfoliating body
polishes and our new cleansing brands such as Korea Glow. Deodorants
delivered good volume growth helped by strong performance on Dove but
pricing was muted. The newly acquired Schmidt’s grew strongly. Sales
in oral care were flat due to ongoing competitive pressures. Prestige
performed well with double digit growth on Hourglass, Ren, Living Proof
and Kate Sommerville as well as improved momentum on Dermalogica
and Murad. Dollar Shave Club grew double digits and continued to build
scale in the US.

• Underlying operating profit increased by €133 million. Underlying
operating margin and underlying sales growth improvement added
€302 million and €136 million respectively, offset by a €484 million
adverse impact from exchange rate movements. Acquisition related
activities contributed €179 million. Underlying operating margin

improvement reflects brand and marketing efficiencies from zero based

budgeting.

FOODS & REFRESHMENT

2018

2017 % change

Turnover (€ million)

20,227

22,444

Operating profit (€ million)

Underlying operating profit (€ million)

Operating margin (%)

Underlying operating margin (%)

Underlying sales growth (%)

Underlying volume growth (%)

Underlying price growth (%)

7,245

3,534

35.8

17.5

2.0

1.3

0.7

3,616

3,737

16.1

16.7

2.7

(0.2)

3.0

(9.9)

100.4

(5.4)

19.7

0.8

KEY DEVELOPMENTS
• Turnover declined by 9.9% including a negative currency impact of 5.6%.
Acquisitions and disposals had an unfavourable impact of 6.4% reflecting
the disposal of the spreads business. Underlying sales growth was 2.0%
coming from volume growth of 1.3% and price growth of 0.7%. Ice cream
had another strong year helped by innovations on our premium brands
which included a new Magnum praline variant and a non-dairy range of
Ben & Jerrys. The launch of Kinder® ice cream and good weather helped
to drive strong ice cream growth in Europe. Sales in tea grew modestly:
emerging markets growth was driven by good performance on core
brands like Brooke Bond in India whilst in developed markets challenges
in black tea offset good growth from Pukka and the new organic Lipton

Strategic ReportAnnual Report on Form 20-F 2018
Current assets decreased from €17.0 billion to €15.5 billion mainly
reflecting the reduction in assets held for disposals as a result of
the completion of the spreads transactions on 2 July 2018. Current
liabilities were €19.8 billion, a decrease of €3.4 billion compared to the
prior year. The decrease was due to repayment of short-term liabilities
which were replaced by long term borrowings. Non-current liabilities
were €27.4 billion, an increase of €4.7 billion on the prior year. During
the year the Group issued bonds worth over €6.0 billion and repaid
notes of about €1.0 billion. See note 15C for analysis of bonds and
other loans.

The table below shows the movement in net pension liability during the
year. The increase from €0.6 billion at the beginning of the year to €0.9
billion at the end of 2018 was primarily due to reduced pension assets,
driven by adverse equity markets towards the end of 2018.

1 January

Current service cost

Employee contributions

Actual return on plan assets (excluding interest)

Net interest cost

Actuarial gain

Employer contributions

Currency retranslation
Other movements(a)

€ million
2018

(561)

(220)

(1,108)

(25)

671

383

(57)

31 December
(a) Other movements relate to special termination benefits, past service costs
including losses/(gains) on curtailment, settlements and other immaterial
movements. For more details see note 4B on pages 87 to 92.

(874)

FINANCE AND LIQUIDITY
Approximately €0.8 billion (or 26%) of the Group’s cash and cash
equivalents are held in the parent and central finance companies,
for maximum flexibility. These companies provide loans to our
subsidiaries that are also funded through retained earnings and third
party borrowings. We maintain access to global debt markets through
an infrastructure of short and long-term debt programmes. We make
use of plain vanilla derivatives, such as interest rate swaps and foreign
exchange contracts, to help mitigate risks. More detail is provided in
notes 16, 16A, 16B and 16C on pages 110 to 115.

The remaining €2.4 billion (74%) of the Group’s cash and cash
equivalents are held in foreign subsidiaries which repatriate
distributable reserves on a regular basis. For most countries, this is
done through dividends free of tax. This balance includes €154 million
(2017: €206 million, 2016: €240 million) of cash that is held in a few
countries where we face cross-border foreign exchange controls
and/or other legal restrictions that inhibit our ability to make these
balances available in any means for general use by the wider business.
The cash will generally be invested or held in the relevant country
and, given the other capital resources available to the Group, does not
significantly affect the ability of the Group to meet its cash obligations.

FINANCIAL REVIEW CONTINUED

CASH FLOW
Cash flow from operating activities was €9.0 billion, a decline of
€0.5 billion compared to the prior year. Free cash flow was €5.0 billion,
a reduction of €0.4 billion on the prior year. The reductions reflected
the impact of currency devaluation and higher working capital,
including a €0.4 billion increase arising from the disposal of spreads.
€ million
2017

€ million
2018

Operating profit
Depreciation, amortisation and impairment
Changes in working capital
Pensions and similar obligations less payments
Provisions less payments
Elimination of (profits)/losses on disposals
Non-cash charge for share-based
compensation
Other adjustments

Cash flow from operating activities

Income tax paid
Net capital expenditure
Net interest and preference dividends paid

Free cash flow*

12,535

1,747
(793)
(128)
55
(4,299)

196

(266)
9,047

(2,294)
(1,424)

(367)
4,962

Net cash flow (used in)/from investing activities

4,644

8,857

1,538
(68)
(904)
200
(298)

284

(153)
9,456

(2,164)
(1,621)

(316)
5,355

(5,879)

Net cash flow (used in)/from financing activities

(11,548)

(1,433)

Certain measures used in our reporting are not defined under IFRS. For
further information about these measures, please refer to the commentary
on non-GAAP measures on pages 23 to 26.

Net inflow from investing activities was €4.6 billion, an increase
of €10.5 billion compared to the prior year. The increase reflects
proceeds of €7.2 billion from the disposal of spreads and higher spend
on acquisitions during the prior year.

The net outflow from financing activities was €11.5 billion, compared
with €1.4 billion in the prior year. In 2018 there were repayments of
financial liabilities of €6.6 billion compared with €2.6 billion in 2017;
and an outflow from changes in short-term borrowings of €4.0 billion,
compared with an inflow of €2.7 billion in 2017. The cash outflow in
respect of the repurchase of shares in 2018 was €6.0 billion, compared
with €5.0 billion in the prior year.

BALANCE SHEET
At 31 December 2018, Unilever’s combined market capitalisation was
€121.8 billion compared with €127.9 billion at the end of 2017.

Goodwill and intangible assets increased by €1.1 billion mainly
coming from the acquisition of Quala and restatement of goodwill in
relation to adoption of IAS 29 'Financial Reporting in Hyperinflationary
Economies' in Argentina (see note 1 and note 9). The increase was
partially offset by impairment of Blueair. All material goodwill and
indefinite-life intangible assets have been tested for impairment with
no charge recognised during the year other than for Blueair. Other
non-current assets decreased by €0.4 billion mainly due to a reduction
in the value of pension assets.

€ million
2018

€ million
2017

29,493
14,482
15,481
59,456

19,772

27,392
47,164

11,572
720
12,292

59,456

28,401
14,901
16,983
60,285

23,177

22,721
45,898

13,629
758
14,387

60,285

Goodwill and intangible assets
Other non-current assets
Current assets
Total assets

Current liabilities

Non-current liabilities
Total liabilities

Shareholders’ equity
Non-controlling interest
Total equity

Total liabilities and equity

Strategic ReportAnnual Report on Form 20-F 2018
CONTRACTUAL OBLIGATIONS AT 31 DECEMBER 2018
€
million
Due in
3-5
years

€
million
Due in
1-3
years

€
million
Due
within
1 year

€
million

Total

€
million
Due in
over
5 years

Long-term debt

24,428

2,950

4,533

4,683 12,262

Interest on financial liabilities 3,723

Operating lease obligations
Purchase obligations(a)

Finance leases

Other long-term
commitments

Other financial liabilities

2,464

520

187

1,390

150

467

481

421

678

149

800

758

590

628

501

1,828

724

–

Total

32,862

5,166

6,813

5,942 14,941

(a) For raw and packaging materials and finished goods.

Further details are set out in the following notes to the consolidated
financial statements: note 10 on pages 100 and 101, note 15C on page
108 and 109, and note 20 on pages 120 to 122. Unilever is satisfied that
its financing arrangements are adequate to meet its working capital
needs for the foreseeable future. In relation to the facilities available to
the Group, borrowing requirements do not fluctuate materially during
the year and are not seasonal.

AUDIT FEES
Included within operating profit is €21 million (2017: €20 million) paid
to the external auditor, of which €16 million (2017: €14 million) related
to statutory audit services.

NON-GAAP MEASURES
Certain discussions and analyses set out in this Annual Report
and Accounts (and the Additional Information for US Listing
Purposes) include measures which 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, and our 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. Wherever appropriate and practical, we provide reconciliations
to relevant GAAP measures.

EXPLANATION AND RECONCILIATION
OF NON-GAAP MEASURES
Unilever uses ‘constant rate’ and ‘underlying’ measures primarily for
internal performance analysis and targeting purposes. We present
certain items, percentages and movements, using constant exchange
rates, which exclude the impact of fluctuations in foreign currency
exchange rates. We calculate constant currency values by translating
both the current and the prior period local currency amounts using
the prior period average exchange rates into euro, except for countries
where the impact of consumer price inflation rates has escalated to
extreme levels. In these countries, the local currency amounts before
the application of IAS 29 are translated into euros using the period
closing exchange rate.

The table below shows exchange rate movements in our key markets.
Annual
average
rate in
2017

Annual
average
rate in
2018

Brazilian real (€1 = BRL)

Chinese yuan (€1 = CNY)

Indian rupee (€1 = INR)

Indonesia rupiah (€1 = IDR)

Philippine peso (€ 1 = PHP)
UK pound sterling (€1 = GBP)
US dollar (€1 = US$)

4.282

7.807

80.730

16831

62.379
0.884

1.185

3.573

7.608

73.258

15011

56.596
0.876

1.123

In the following sections we set out our definitions of the following
non-GAAP measures and provide reconciliations to relevant
GAAP measures:
• underlying sales growth;
• underlying volume growth;
• underlying price growth;
• non-underlying items;
• underlying earnings per share;
• underlying operating profit and underlying operating margin;
• underlying effective tax rate;
• constant underlying earnings per share;
• free cash flow;
• return on assets;
• net debt; and
• return on invested capital.

UNDERLYING SALES GROWTH
Underlying Sales Growth (USG) refers to the increase in turnover
for the period, excluding any change in turnover resulting from
acquisitions, disposals and changes in currency. We believe this
measure provides valuable additional information on the underlying
sales performance of the business and is a key measure used
internally. The impact of acquisitions and disposals is excluded from
USG for a period of 12 calendar months from the applicable closing
date. Turnover from acquired brands that are launched in countries
where they were not previously sold is included in USG as such
turnover is more attributable to our existing sales and distribution
network than the acquisition itself. Also excluded is the impact of price
growth from countries where the impact of consumer price inflation
(CPI) rates has escalated to extreme levels.

There are two countries where we have determined extreme levels
of CPI exist. The first is Venezuela where in Q4 2017 inflation rates
exceeded 1,000% and management considered that the situation
would persist for some time. Consequently, price growth in Venezuela
has been excluded from USG since Q4 2017. The second is Argentina,
which from Q3 2018 has been accounted for in accordance with IAS
29, and thus from Q3 2018 Argentina price growth is excluded from
USG. The adjustment made at Group level as a result of these two
exclusions was a reduction in price growth of 32.4% for the year. This
treatment for both countries will be kept under regular review.

Prior to Q3 2018 USG only excluded the impact of price changes in
countries where consumer price inflation has escalated to extreme
levels of 1,000% or more. However, given the need to account for our
Argentinian business in accordance with IAS 29, we have now also
excluded price changes in countries that need to be accounted for in
accordance with IAS 29. Prior to Q3 2018 there were no countries that
were accounted for under IAS 29, so no restatements are necessary.

Strategic ReportAnnual Report on Form 20-F 2018

2018
vs 2017

2017
vs 2016

Refer to page 21 for the relationship between USG, UVG and UPG for
each of the categories.

UNDERLYING PRICE GROWTH
Underlying price growth (UPG) is part of USG and means, for the
applicable period, the increase in turnover attributable to changes
in prices during the period. UPG therefore excludes the impact to
USG due to (i) the volume of products sold; and (ii) the composition
of products sold during the period. In determining changes in price
we exclude the impact of price growth in Argentina and Venezuela as
explained in USG above.

The relationship between USG, UVG and UPG is set out below:

Underlying volume growth (%)
Underlying price growth (%)(a)

Underlying sales growth (%)

2018
vs 2017

2017
vs 2016

1.9

0.9

2.9

0.8

2.3

3.1

(a) For 2018 underlying price growth in Venezuela (from January 2018) and
Argentina (from July 2018) has been excluded from underlying price in
the table above and an equal and opposite adjustment made in the effect
of exchange rates. For 2017 only Q4 price growth in Venezuela has been
excluded.

NON-UNDERLYING ITEMS
Several non-GAAP measures are adjusted to exclude items defined as
non-underlying due to their nature and/or frequency of occurrence.
• Non-underlying items within operating profit are: gains or losses

on business disposals, acquisition and disposal related costs,
restructuring costs, impairments and other significant one-off items
within operating profit

• Non-underlying items not in operating profit but within net profit
are: significant and unusual items in net finance cost, monetary
gain/(loss) arising from hyperinflationary economies, share
of profit/(loss) of joint ventures and associates and taxation
• Non-underlying items are both non-underlying items within

operating profit and those non-underlying items not in operating
profit but within net profit

Refer to note 3 for details of non-underlying items.

UNDERLYING EARNINGS PER SHARE
Underlying earnings per share (underlying EPS) is calculated as
underlying profit attributable to shareholders’ equity divided by the
diluted combined average number of share units. In calculating
underlying profit attributable to shareholders’ equity, net profit
attributable to shareholders’ equity is adjusted to eliminate the
post-tax impact of non-underlying items. This measure reflects
the underlying earnings for each share unit of the Group.

Refer to note 7 on page 96 for reconciliation of net profit attributable to
shareholders’ equity to underlying profit attributable to shareholders’
equity.

FINANCIAL REVIEW CONTINUED

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

2018
vs 2017

2017
vs 2016

Turnover growth (%)(a)

Effect of acquisitions (%)

Effect of disposals (%)
Effect of exchange rates (%)(b)
Underlying sales growth (%)(b)

BEAUTY & PERSONAL CARE

Turnover growth (%)(a)

Effect of acquisitions (%)

Effect of disposals (%)
Effect of exchange rates (%)(b)
Underlying sales growth (%)(b)

FOODS & REFRESHMENT

Turnover growth (%)(a)

Effect of acquisitions (%)

Effect of disposals (%)
Effect of exchange rates (%)(b)
Underlying sales growth (%)(b)

HOME CARE

Turnover growth (%)(a)

Effect of acquisitions (%)

Effect of disposals (%)
Effect of exchange rates (%)(b)
Underlying sales growth (%)(b)

(5.1)

2.0

(3.0)

(6.7)

2.9

1.9

1.3

(0.4)

(2.1)

3.1

2018
vs 2017

2017
vs 2016

(0.3)

3.9

–

(7.0)

3.1

2.6

1.8

(0.1)

(1.9)

2.9

(9.9)

0.8

(7.2)

(5.6)

2.0

(0.4)

0.2

(0.8)

(2.4)

2.7

2018
vs 2017

2017
vs 2016

(4.2)

0.5

(0.2)

(8.3)

4.2

5.6

3.1

(0.2)

(1.7)

4.4

(a) Turnover growth is made up of distinct individual growth components,
namely underlying sales, currency impact, acquisitions and disposals.
Turnover growth is arrived at by multiplying these individual components
on a compounded basis as there is a currency impact on each of the other
components. Accordingly, turnover growth is more than just the sum of the
individual components.

(b) For 2018 underlying price growth in Venezuela (from January 2018) and

Argentina (from July 2018) has been excluded from underlying sales growth
and an equal and opposite adjustment made in effect of exchange rate. For
2017 only Q4 price growth in Venezuela has been excluded.

UNDERLYING VOLUME GROWTH
Underlying volume growth (UVG) is part of USG and means, for the
applicable period, the increase in turnover in such period calculated
as the sum of (i) the increase in turnover attributable to the volume
of products sold; and (ii) the increase in turnover attributable to the
composition of products sold during such period. UVG therefore
excludes any impact on USG due to changes in prices.

Strategic ReportAnnual Report on Form 20-F 2018
UNDERLYING OPERATING PROFIT AND UNDERLYING
OPERATING MARGIN
Underlying operating profit and underlying operating margin mean
operating profit and operating margin before the impact of non-underlying
items within operating profit. Underlying operating profit represents
our measure of segment profit or loss as it is the primary measure
used for making decisions about allocating resources and assessing
performance of the segments.

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

Operating profit

Non-underlying items within operating profit
(see note 3)

Underlying operating profit

Turnover

Operating margin

Underlying operating margin

€ million
2018

€ million
2017

12,535

8,857

(3,176)

9,359

543

9,400

50,982

53,715

24.6%

18.4%

16.5%

17.5%

Further details of non-underlying items can be found in note 3 on page
85 of the consolidated financial statements.

UNDERLYING EFFECTIVE TAX RATE
The underlying effective tax rate is calculated by dividing taxation
excluding the tax impact of non-underlying items by profit before
tax excluding the impact of non-underlying items and share of net
profit/(loss) of joint ventures and associates. This measure reflects
the underlying tax rate in relation to profit before tax excluding
non-underlying items before tax and share of net profit/(loss) of joint
ventures and associates. Tax impact on non-underlying items within
operating profit is the sum of the tax on each non-underlying item,
based on the applicable country tax rates and tax treatment. This is
shown in the following table:

€ million
2018

€ million
2017

2,575

1,667

(259)

(29)

2,287

12,383

(3,176)

(122)

578

2,322

8,153

543

382

Taxation

Tax impact of:
Non-underlying items within operating profit(a)

Non-underlying items not in operating profit
but within net profit(a)

Taxation before tax impact of non-underlying

Profit before taxation

Non-underlying items within operating profit
before tax(a)

Non-underlying items not in operating profit but
within net profit before tax(b)

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

Profit before tax excluding non-underlying
items before tax and share of net profit/
(loss) of joint ventures and associates

Underlying effective tax rate

The reconciliation of underlying profit attributable to shareholders’
equity to constant underlying earnings attributable to shareholders’
equity and the calculation of constant underlying EPS is as follows:

Underlying profit attributable to shareholders’
equity(a)

Impact of translation from current to constant
exchange rates and translational hedges

Impact of Venezuela and Argentina price
inflation(b)

Constant underlying earnings attributable to
shareholders’ equity

Diluted combined average number of share
units (millions of units)

Constant underlying EPS (€)

(a) See note 7.
(b) See pages 23 and 24 for further details.

€ million
2018

€ million
2017

6,365

6,315

7,112

(6,551)

–

6,926

6,410

2,694.8

2,814.0

2.57

2.28

From 2018, in our reporting of growth in constant underlying EPS,
we translate the prior period using an annual average exchange rate
rather than monthly averages. This change has been made to align
with the prior period constant exchange rate used for calculating USG.
The impact of this is an increase of €0.01 per share in 2017 constant
underlying EPS.

FREE CASH FLOW
Free cash flow (FCF) is defined as cash flow from operating activities,
less income taxes paid, net capital 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. FCF 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 net profit to FCF is as follows:

Net profit

Taxation

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

Net monetary gain arising from
hyperinflationary economies

Net finance costs

€ million
2018

€ million
2017

9,808

2,575

6,486

1,667

(207)

(173)

(122)

481

–

877

Depreciation, amortisation and impairment

1,747

1,538

Changes in working capital

(185)

(155)

Pensions and similar obligations less payments

Provisions less payments

Elimination of (profits)/losses on disposals

(4,299)

8,900

8,923

25.7%

26.0%

Non-cash charge for share-based
compensation

(a) Refer to note 3 for further details on these items.
(b) 2018 amount excludes €32 million gain on disposal of spreads business by the
joint venture in Portugal which is included in the share of net profit/(loss) of joint
ventures and associates line. Including the €32 million, total non-underlying items
not in operating profit but within net profit before tax is €154 million. See note 3.

Other adjustments

Cash flow from operating activities

Income tax paid

Net capital expenditure

CONSTANT UNDERLYING EARNINGS PER SHARE
Constant underlying earnings per share (constant underlying EPS) is
calculated as underlying profit attributable to shareholders’ equity at
constant exchange rates and excluding the impact of both translational
hedges and price inflation in Venezuela (for the whole of 2018) and
Argentina (from July 2018) divided by the diluted average number
of ordinary shares. This measure reflects the underlying earnings
for each ordinary share of the Group in constant exchange rates.

Net interest and preference dividends paid

Free cash flow

Net cash flow (used in)/from investing activities

Net cash flow (used in)/from financing activities

(11,548)

(793)

(128)

196

(266)

9,047

(2,294)

(1,424)

(367)

4,962

4,644

(68)

(904)

200

(298)

284

(153)

9,456

(2,164)

(1,621)

(316)

5,355

(5,879)

(1,433)

Strategic ReportAnnual Report on Form 20-F 2018

FINANCIAL REVIEW CONTINUED

RETURN ON ASSETS
Return on assets is a measure of the return generated on assets for each division. This measure provides additional insight on the performance
of the divisions and assists in formulating long-term strategies with respect to allocation of capital, across divisions. Division return on assets is
calculated as underlying operating profit after tax for the division divided by the annual average of: property, plant and equipment, net assets held for
sale (excluding goodwill and intangibles), inventories, trade and other current receivables, and trade payables and other current liabilities,
for each division. The annual average is computed by adding the amounts at the beginning and the end of the calendar year and dividing by two.

2018

Underlying operating profit before tax

Tax on underlying operating profit

Underlying operating profit after tax

Property plant and equipment

Net assets held for sale

Inventories

Trade and other receivables

Trade payables and other current liabilities

Period end assets (net)

Average assets for the period (net)

Division return on assets

2017

Underlying Operating Profit before tax

Tax on underlying operating profit

Underlying Operating Profit after tax

Property plant and equipment

Net assets held for sale

Inventories

Trade and other receivables

Trade payables and other current liabilities

Period end assets (net)

Average assets for the period (net)

Division return on assets

€ million
Beauty &
Personal Care

€ million
Foods &
Refreshment

€ million
Home
Care

4,508

(1,159)

3,349

3,631

1,737

2,319

(5,478)

2,210

2,178

3,534

(908)

2,626

4,783

1,761

3,027

(5,984)

3,612

3,830

154%

69%

4,375

(1,139)

3,236

3,520

1,590

2,018

(4,984)

2,145

2,122

3,737

(972)

2,765

5,104

742

1,637

2,172

(5,606)

4,049

4,201

152%

66%

1,317

(338)

979

1,933

803

1,139

(2,995)

880

799

123%

1,288

(335)

953

1,787

–

735

1,032

(2,836)

718

778

122%

€ million
Total

9,359

(2,405)

6,954

10,347

4,301

6,485

(14,457)

6,702

6,807

102%

9,400

2,446

6,954

10,411

743

3,962

5,222

(13,426)

6,912

7,101

98%

NET DEBT
Net debt is defined as the excess of total financial liabilities,
excluding trade payables and other current liabilities, over cash,
cash equivalents and other current financial assets, excluding trade
and other current receivables. It is a measure that provides valuable
additional information on the summary presentation of the Group’s
net financial liabilities and is a measure in common use elsewhere.

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

RETURN ON INVESTED CAPITAL
Return on invested capital (ROIC) is a measure of the return generated
on capital invested by the Group. The measure provides a guide rail for
long-term value creation and encourages compounding reinvestment
within the business and discipline around acquisitions with low returns
and long payback. ROIC is calculated as underlying operating profit after
tax divided by the annual average of: goodwill, intangible assets, property,
plant and equipment, net assets held for sale, inventories, trade and other
current receivables, and trade payables and other current liabilities.

Total financial liabilities

Current financial liabilities

Non-current financial liabilities

€ million
2018

€ million
2017

(24,885)

(24,430)

(3,235)

(7,968)

(21,650)

(16,462)

Cash and cash equivalents as per balance sheet

3,230

3,317

Cash and cash equivalents as per cash flow
statement

Add bank overdrafts deducted therein

Less cash and cash equivalents held for sale

Other current financial assets

Net debt

3,090

3,169

140

–

874

167

(19)

770

(20,781)

(20,343)

Underlying operating profit before tax(a)
Tax on underlying operating profit(b)

Underlying operating profit after tax

Goodwill

Intangible assets

Property, plant and equipment

Net assets held for sale

Inventories

Trade and other current receivables

€ million
2018

€ million
2017

9,359

9,400

(2,405)

(2,446)

6,954

17,341

12,152

10,347

108

4,301

6,485

16,881

11,520

10,411

3,054

3,962

5,222

Trade payables and other current liabilities

(14,457)

(13,426)

Period-end invested capital

36,277

37,624

Average invested capital for the period

36,951

36,222

Return on average invested capital

18.8%

19.2%

(a) See reconciliation of operating profit to underlying operating profit on page 25.
(b) Tax on underlying operating profit is calculated as underlying operating profit
before tax multiplied by underlying effective tax rate of 25.7% (2017: 26.0%)
which is shown on page 25.

Strategic ReportAnnual Report on Form 20-F 2018
RISKS

OUR RISK APPETITE AND APPROACH
TO RISK MANAGEMENT
Risk management is integral to Unilever’s strategy and to the
achievement of Unilever’s long-term goals. Our success as an
organisation depends on our ability to identify and exploit the
opportunities generated by our business and the markets we are in.
In doing this we take an embedded approach to risk management
which puts risk and opportunity assessment at the core of the Board
agenda, which is where we believe it should be.

Unilever adopts a risk profile that is aligned to our vision to grow
our business, while decoupling our environmental footprint from
our growth and increasing our positive social impact. Our appetite
for risk is driven by the following:
• Our growth should be consistent, competitive, profitable

and responsible.

• Our behaviours must be in line with our Code of Business

Principles and Code Policies.

• We strive to continuously improve our operational efficiency

and effectiveness.

• We aim to maintain a single A credit rating on a long-term basis.

Our approach to risk management is designed to provide reasonable,
but not absolute, assurance that our assets are safeguarded, the
risks facing the business are being assessed and mitigated and
all information that may be required to be disclosed is reported
to Unilever’s senior management including, where appropriate,
the Chief Executive Officer and Chief Financial Officer.

ORGANISATION
The Boards assume overall accountability for the management of risk
and for reviewing the effectiveness of Unilever’s risk management and
internal control systems.

The Boards have established a clear organisational structure with well
defined accountabilities for the principal risks that Unilever faces in
the short, medium and long term. This organisational structure and
distribution of accountabilities and responsibilities ensure that every
country in which we operate has specific resources and processes
for risk reviews and risk mitigation. This is supported by the Unilever
Leadership Executive, which takes active responsibility for focusing
on the principal areas of risk to Unilever. The Boards regularly review
these risk areas, including consideration of environmental, social and
governance matters, and retain responsibility for determining the
nature and extent of the significant risks that Unilever is prepared
to take to achieve its strategic objectives.

FOUNDATION AND PRINCIPLES
Unilever’s approach to doing business is framed by our Purpose
and values (see page 1). Our Code of Business Principles sets out
the standards of behaviour that we expect all employees to adhere
to. Day-to-day responsibility for ensuring these principles are applied
throughout Unilever rests with senior management across categories,
geographies and functions. A network of Business Integrity Officers
and Committees supports the activities necessary to communicate the
Code, deliver training, maintain processes and procedures (including
support lines) to report and respond to alleged breaches, and to
capture and communicate learnings.

We have a framework of Code Policies that underpins the Code
of Business Principles and set out the non-negotiable standards
of behaviour expected from all our employees.

For each of our principal risks we have a risk management framework
detailing the controls we have in place and who is responsible for
managing both the overall risk and the individual controls mitigating
that risk.

Unilever’s functional standards define mandatory requirements across
a range of specialist areas such as health and safety, accounting and
reporting and financial risk management.

PROCESSES
Unilever operates a wide range of processes and activities across all
its operations covering strategy, planning, execution and performance
management. Risk management is integrated into every stage of this
business cycle. These procedures are formalised and documented and
are increasingly being centralised and automated into transactional
and other information technology systems.

ASSURANCE AND RE-ASSURANCE
Assurance on compliance with the Code of Business Principles and all
of our Code Policies is obtained annually from Unilever management
via a formal Code declaration. In addition, there are specialist
awareness and training programmes which are run throughout the
year and vary depending on the business priorities. These specialist
compliance programmes supplement the Code declaration. Our
Corporate Audit function plays a vital role in providing to both
management and the Boards an objective and independent review of
the effectiveness of risk management and internal control systems
throughout Unilever.

BOARDS’ ASSESSMENT OF COMPLIANCE WITH
THE RISK MANAGEMENT FRAMEWORKS
The Boards, advised by the Committees where appropriate, regularly
review the significant risks and decisions that could have a material
impact on Unilever. These reviews consider the level of risk that
Unilever is prepared to take in pursuit of the business strategy and
the effectiveness of the management controls in place to mitigate
the risk exposure.

The Boards, through the Audit Committee, have reviewed the
assessment of risks, internal controls and disclosure controls and
procedures in operation within Unilever. They have also considered
the effectiveness of any remedial actions taken for the year covered
by this Annual Report and Accounts and up to the date of its approval
by the Boards.

Details of the activities of the Audit Committee in relation to this can
be found in the Report of the Audit Committee on pages 43 to 45.

Further statements on compliance with the specific risk management
and control requirements in the Dutch Corporate Governance Code,
the UK Corporate Governance Code, the US Securities Exchange Act
(1934) and the Sarbanes-Oxley (2002) Act can be found on pages 41
and 42.

Strategic ReportAnnual Report on Form 20-F 2018RISKS CONTINUED

VIABILITY STATEMENT
The Directors have reviewed the long-term prospects of the Group in order to assess its viability. This review incorporated the activities and
key risks of the Group together with the factors likely to affect the Group’s future development, performance, financial position, cash flows,
liquidity position and borrowing facilities as described on pages 1 to 26. In addition, we describe in notes 15 to 18 on pages 104 to 120 the Group’s
objectives, policies and processes for managing its capital, its financial risk management objectives, details of its financial instruments and
hedging activities and its exposures to credit and liquidity risk.

ASSESSMENT
In order to report on the long-term viability of the Group, the Directors reviewed the overall funding capacity and headroom available to withstand
severe events and carried out a robust assessment of the principal risks facing the Group, including those that would threaten its business
model, future performance, solvency or liquidity. The assessment assumes that any debt maturing in the next three years can be re-financed at
commercially acceptable terms or via our current standby facility. This assessment also included reviewing and understanding the mitigation
factors in respect of each of those risks. The risk factors are summarised on pages 29 to 33.

The viability assessment has two parts:
• First, the Directors considered the period over which they have a reasonable expectation that the Group will continue to operate and meet

its liabilities, taking into account current debt facilities and debt headroom; and

• Second, they considered the potential impact of severe but plausible scenarios over this period, including:

• assessing scenarios for each individual principal risk, for example the termination of our relationships with the three largest global

customers; the loss of all material litigation cases; a major IT data breach and the lost cost and growth opportunities from not keeping
up with technological changes; and

• assessing scenarios that involve more than one principal risk including the following multi risk scenarios:

Multi risk
scenarios modelled

Level of
severity reviewed

Link to
principal risk

Contamination issue with one of our products
leading to lower sales of products of this brand and
the temporary closure of our largest sourcing unit.

A fine equal to 1% of Group turnover was
considered along with damage to our largest
brand and disruption to supply chain.

• Safe and high-quality products
• Brand preference
• Supply chain

Major global incident affecting one or more of
the Group’s key locations resulting in an outage
for a year in a key sourcing unit and significant
water shortages in our key developing markets.

The complete loss of all of our turnover in our
largest geographic market was considered along
with destruction of a key sourcing unit and reduced
demand for our products that require water.

• Economic and political instability
• Supply chain
• Climate change

Global economic downturn leading to an
increase in funding costs and the loss of
our three largest customers.

Significant business disruption in our largest
emerging market was considered with the impact
of losing our three key customers.

• Economic and political instability
• Treasury and pensions
• Customer relationships

FINDINGS
• Firstly, a three-year period is considered appropriate for this viability assessment because it is the period covered by the strategic plan;

and it enables a high level of confidence in assessing viability, even in extreme adverse events, due to a number of factors such as:
• the Group has considerable financial resources together with established business relationships with many customers and suppliers

in countries throughout the world;

• high cash generation by the Group’s operations and access to the external debt markets;
• flexibility of cash outflow with respect to significant marketing programmes and capital expenditure projects which usually have

a 2-3 year horizon; and

• the Group’s diverse product and geographical activities which are impacted by continuously evolving technology and innovation.
• Secondly, for each of our 14 principal risks, worst case plausible scenarios have been assessed together with multiple risk scenarios.

None of the scenarios reviewed, either individually or in aggregate would cause Unilever to cease to be viable.

CONCLUSION
On the basis described above, the Directors have a reasonable expectation that the Group will be able to continue in operation and meet its
liabilities as they fall due over the three-year period of their assessment.

PRINCIPAL RISK FACTORS
Our business is subject to risks and uncertainties. On the following pages we have identified the risks that we regard as the most relevant to our
business. These are the risks that we see as most material to Unilever’s business and performance at this time. There may be other risks that
could emerge in the future.

All the principal risks could impact our business within the next two years (ie short-term risks), or could impact our business over the next three
to five years (ie medium-term risks). Some principal risks, such as climate change, could also impact over the longer term (ie beyond five years).

Our principal risks have not fundamentally changed this year apart from the addition of a plastic packaging risk. Given the nature of our business,
a reduction in the amount of plastic packaging and increase in the use of recyclable content in our packaging is critical to our future success.

Strategic ReportAnnual Report on Form 20-F 2018As well as identifying the most relevant risks for our business we reflect on whether we think the level of risk associated with each of our principal
risks is increasing or decreasing. In addition to our plastic packaging risk there are three areas where we believe there is an increased level of risk:
• Customer Relationships: technology is changing our channel landscape and hence changing the nature of the relationships with our traditional

customers as well as requiring us to develop relationships with new customers who are driving e-commerce development;

• Systems and Information: the number of cybersecurity attacks is still increasing significantly, and incidents are becoming more sophisticated

as technology further evolves; and

• Business Transformation: this risk has increased as a result of the speed of technological change which means the pressure to digitalise our

business to take advantage of the opportunities it presents, both in terms of growth and cost efficiency, is increasing.

If the circumstances in these risks occur or are not successfully mitigated, our cash flow, 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,
which may include forward-looking statements, or could impact on our ability to meet our targets or be detrimental to our profitability or
reputation.

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 around the world and on our ability to innovate
and remain competitive.

Consumer tastes, preferences and behaviours are changing more
rapidly than ever before, and Unilever’s ability to identify and
respond to these changes is vital to our business success.

Technological change is disrupting our traditional brand
communication models. Our ability to develop and deploy the right
communication, both in terms of messaging content and medium
is critical to the continued strength of our brands.

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

PORTFOLIO MANAGEMENT
Unilever’s strategic investment choices will affect 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
The success of our business depends on finding sustainable
solutions to support long-term growth.

Unilever’s vision to grow our business, while decoupling our
environmental footprint from our growth and increasing our positive
social impact, will require more sustainable ways of doing business.
In a world where resources are scarce and demand for them
continues to increase, it is critical that we succeed in reducing our
resource consumption and converting to sustainably sourced supplies.
In doing this we are dependent on the efforts of partners and various
certification bodies. We are also committed to improving health and
well-being and enhancing livelihoods around the world so Unilever
and our communities grow successfully together. 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.

Strategic ReportAnnual Report on Form 20-F 2018RISKS CONTINUED

DESCRIPTION OF RISK

CLIMATE CHANGE
Climate changes and governmental actions to reduce such changes
may disrupt our operations and/or reduce consumer demand for
our products.

Climate changes are occurring around the globe which may impact
our business in various ways. They could lead to water shortages
which would reduce demand for those of our products that require
a significant amount of water during consumer use. They could also
lead to an increase in raw material and packaging prices or reduced
availability. Governments may take action to reduce climate change
such as the introduction of a carbon tax or zero net deforestation
requirements which could impact our business through higher costs
or reduced flexibility of operations.

Increased frequency of extreme weather (storms and floods) could
cause increased incidence of disruption to our manufacturing and
distribution network. Climate change could result therefore in
making products less affordable or less available for our consumers
resulting in reduced growth and profitability.

PLASTIC PACKAGING
A reduction in the amount of plastic and an increase in the use of
recyclable content in our packaging is critical to our future success.

Both consumer and customer responses to the environmental impact
of plastic waste and emerging regulation by governments to tax or
ban the use of certain plastics requires us to find solutions to reduce
the amount of plastic we use; increase recycling post-consumer use;
and to source recycled plastic for use in our packaging. We are also
dependent on the work of our industry partners to create and improve
recycling infrastructures throughout the globe.

Not only is there a risk around finding appropriate replacement
materials, due to high demand the cost of recycled plastic or other
alternative packaging materials could significantly increase in the
foreseeable future and this could impact our business performance.
We could also be exposed to higher costs as a result of taxes or fines
if we are unable to comply with plastic regulations which would again
impact our profitability and reputation.

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

Maintaining strong relationships with our existing customers
and building relationships with new customers who have built new
technology-enabled business models to serve changing shopper
habits are necessary to ensure our brands are 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 competitive trade terms. Failure to maintain
strong relationships with customers could negatively impact our
terms of business with affected customers and reduce the
availability of our products to consumers.

Strategic ReportAnnual Report on Form 20-F 2018DESCRIPTION OF RISK

TALENT
A skilled workforce and agile ways of working are 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 compete
and 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
Our business depends on purchasing 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,
trade restrictions or disruptions at a key supplier, which could impact
our ability to deliver orders to our customers.

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.

Changes in trade relationships between Europe and the UK as a result
of Brexit could give rise to both a supply and cost issue.

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

The cyber-attack threat of unauthorised access and misuse of
sensitive information or disruption to operations continues to
increase. Such an attack could inhibit our business operations
in a number of ways, including disruption to sales, production
and cash flows, ultimately impacting our results.

In addition, increasing digital interactions with customers, suppliers
and consumers 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 to ensure data privacy.

Strategic ReportAnnual Report on Form 20-F 2018RISKS CONTINUED

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, disposals and organisational transformation, to drive
continuous improvement in our business and to strengthen our
portfolio and capabilities. A number of key projects were announced
in 2017 to accelerate sustainable shareholder value creation. Failure
to execute such initiatives successfully could result in under-delivery
of the expected benefits and there could be a significant impact on
the value of the business.

Continued digitalisation of our business models and processes
together with enhancing data management capabilities is a
critical part of our transformation. Failure to keep pace with
such technological change would significantly impact our growth
and profitability.

ECONOMIC AND POLITICAL INSTABILITY
Unilever operates around the globe and is exposed to economic
and political instability that may reduce consumer demand for our
products, disrupt sales operations and/or impact the profitability
of our operations.

Adverse economic conditions may affect one or more countries
within a region, or may extend globally.

Government actions such as foreign exchange or price controls
can impact on the growth and profitability of our local operations.

Unilever has more than half its turnover in emerging markets which
can offer greater growth opportunities but also expose Unilever to
related economic and political volatility.

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

The relative values 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.

Unilever may face liquidity risk, ie 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-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.

Strategic ReportAnnual Report on Form 20-F 2018DESCRIPTION OF RISK

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 brands 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
Compliance with laws and regulations is an essential part
of Unilever’s business operations.

Unilever is subject to national and regional laws and regulations in
such diverse areas as product safety, product claims, trademarks,
copyright, patents, competition, employee health and safety, data
privacy, 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 exposures. International tax reform remains a
key focus of attention with the OECD’s Base Erosion & Profit Shifting
project and further potential tax reform in the EU and Switzerland.

IN FOCUS: CLIMATE CHANGE RISKS
AND OPPORTUNITIES
UNILEVER HAS PUBLICLY COMMITTED TO IMPLEMENTING
THE RECOMMENDATIONS OF THE TASK FORCE ON
CLIMATE-RELATED FINANCIAL DISCLOSURES.
Unilever recognises the importance of disclosing climate-related
risks and opportunities. Adopting the Taskforce on Climate-Related
Financial Disclosures (TCFD) recommendations is an important step
forward in enabling market forces to drive efficient allocation of
capital and support a smooth transition to a low-carbon economy.

In this Annual Report and Accounts, we continue to integrate climate-related
disclosures throughout the Strategic Report narrative. However, in
recognition of the growing significance of the impacts of climate change
on our business, we have also summarised the risks and opportunities
arising from climate change, and our response below.

The Boards take overall accountability for the management of climate
change risks and opportunities with support from the ULE and the
USLP Steering Team (see page 46). Chaired by Keith Weed in 2018, the
USLP Steering Team includes nine members of the ULE and meets
five times a year. During 2018, there were numerous agenda items on
topics related to climate change including our overall climate strategy
and our renewable electricity target.

For management employees (including the ULE), incentives include
fixed pay, a bonus as a percentage of fixed pay and a long-term
management co-investment plan (MCIP) linked to financial and USLP
performance. The USLP component accounts for 25% of total MCIP
award. The sustainability component of MCIP includes consideration
of our progress against climate change, water and palm oil targets,
which among others, underpin our climate strategy. See pages 52 to
54 for more on MCIP.

UNDERSTANDING IMPACT
Climate change has been identified as a principal risk to Unilever
which has the potential to impact our business in the short, medium
and long-term. Further details on the nature of climate risks and
opportunities for Unilever can be found in our 2018 CDP Climate
submission (see further climate change disclosures on pages 7 and 14).

To further understand the impact that climate change could have
on Unilever’s business we performed a high-level assessment of
the impact of 2°C and 4°C global warming scenarios. The 2°C and
4°C scenarios are constructed on the basis that average global
temperatures will have increased by 2°C and 4°C in the year 2100.

Between today and 2100 there will be gradual changes towards
these endpoints and we have looked at the impact on our business
in 2030 assuming we have the same business activities as we do today.
We also made the following simplifying assumptions:
• In the 2°C scenario, we assumed that in the period to 2030 society
acts rapidly to limit greenhouse gas emissions and puts in place
measures to restrain deforestation and discourage emissions (for
example implementing carbon pricing at $75-$100 per tonne, taken
from the International Energy Agency’s 450 scenario). We have
assumed that there will be no significant impact to our business
from the physical ramifications of climate change by 2030 – ie from
greater scarcity of water or increased impact of severe weather
events. The scenario assesses the impact on our business from
regulatory changes.

• In the 4°C scenario, we assumed climate policy is less ambitious

and emissions remain high so the physical manifestations of climate
change are increasingly apparent by 2030. Given this we have not
included impacts from regulatory restrictions but focus on those
resulting from the physical impacts.

Strategic ReportAnnual Report on Form 20-F 2018We identified the material impacts on Unilever’s business arising
from each of these scenarios based on existing internal and external
data. The impacts were assessed without considering any actions that
Unilever might take to mitigate or adapt to the adverse impacts or to
introduce new products which might offer new sources of revenue as
consumers adjust to the new circumstances.

The main impacts of the 2°C scenario were as follows:
• Carbon pricing is introduced in key countries and hence there are

increases in both manufacturing costs and the costs of raw materials
such as dairy ingredients and the metals used in packaging.

• Zero net deforestation requirements are introduced and a shift to
sustainable agriculture puts pressure on agricultural production,
raising the price of certain raw materials.

The main impacts of the 4°C scenario were as follows:
• Chronic and acute water stress reduces agricultural productivity

in some regions, raising prices of raw materials.

• Increased frequency of extreme weather (storms and floods)

causes increased incidence of disruption to our manufacturing
and distribution networks.

• Temperature increase and extreme weather events reduce
economic activity, GDP growth and hence sales levels fall.

Our analysis shows that, without action, both scenarios present
financial risks to Unilever by 2030, predominantly due to increased
costs. However, while there are financial risks which would need to
be managed, we would not have to materially change our business
model. The most significant impacts of both scenarios are on our
supply chain where costs of raw materials and packaging rise, due
to carbon pricing and rapid shift to sustainable agriculture in a 2°C
scenario and due to chronic water stress and extreme weather in
a 4°C scenario. The impacts on sales and our own manufacturing
operations are relatively small.

The results of this analysis confirm the importance of doing further
work to ensure that we understand the critical dependencies of
climate change on our business and to ensure we have action plans
in place to help mitigate these risks and thus prepare the business
for the future environment in which we will operate.

During 2018 we developed and piloted an approach to assess the impact
of climate change on our key commodities. We selected soy for this pilot
based on its importance to Unilever (large purchased volume), it being
a high-profile crop in the countries where it is grown and the availability
of good historical price data and suitable climate models.

We developed a methodology which combined forecasting future
yields and quantifying the impact on commodity prices of soybean oil.
Climate change was the only price factor accounted for in the model
used to calculate the impact. Other factors which impact price, such as
technology and acreage, were excluded. The model considered the direct
risks from climate change to the price of soybean oil, such as change
in yield and change in supply. Three modelling steps were performed:
• Yield estimation: We analysed multiple agriculture and climate
models to provide a forecast range of expected yields in key
growing regions.

• Price relationship: An econometric model was developed, based
on an analysis of the soybean oil market and historical trends, to
estimate the impact of climate-induced yield changes on future
prices. This model considered the importance of co-products
eg soybean meal, substitution potential eg with sunflower oil and
industrial uses of soybean oil, as well as the impact of yield on price.

• Impact estimation: Future yields and price impacts were then
translated into an estimated financial exposure from climate
change for our business, using our forecast procurement volumes.

Our pilot analysis showed that soybean yields may increase over
the 2030 and 2050-time horizon and that subsequent lower prices
may then lead to small potential reductions in our procurement
spend on soy. While the results may indicate a low financial risk
to our business, we would need to consider a wider range of risk
factors when determining our strategic response. Indirect risks
from climate change, such as catastrophic events or external policy
response and adaptation could also have an impact but were not
included in our modelling. Furthermore, these pilot results are

specific to soy and can’t be applied to other crops. We have therefore
decided to get broader understanding on the climate change risks
to our agricultural sourcing and extend our analysis to two other
important crops to Unilever: Palm Oil and Tea, for which suitable
climate change models for yield predictions will be available in 2019.

RESPONDING TO RISKS AND OPPORTUNITIES
Unilever’s vision is to grow our business whilst decoupling our growth
from our environmental footprint and increasing positive social impact.
This vision explicitly recognises that sustainable growth – including
management of climate-related risks and opportunities – is the only
way to create long-term value for all our stakeholders.

The Unilever Sustainable Living Plan (USLP) was developed to deliver
our vision. It is fully integrated with our business strategy. Climate-
related issues are integral to the USLP. Two of our GHG reduction
targets included in the USLP are recognised as science-based:
• Halve the greenhouse gas impact of our products across the
lifecycle by 2030 (this target covers all the phases across the
lifecycle of our products: ingredients/raw materials, manufacturing,
distribution, retail, packaging, consumer use and disposal)

• Reduce scope 1 and 2 greenhouse gas emissions by 100% from
our own operations by 2030 (this is part of our ambition to be
become carbon positive in our manufacturing by 2030)

We are taking action across our value chain to reduce our emissions,
creating growth opportunities and minimising risk. Our commitment
to source 100% of our palm oil from sustainable sources is helping
to avoid emissions from deforestation (see pages 14 and 47). Our
efforts to reduce energy and GHG emissions in manufacturing are
helping us to save costs. For example, by using less energy, we have
already avoided energy costs in our factories of over €600 million since
our baseline year of 2008.

Our divisions are taking action to reduce emissions. In Home Care we
are focusing on concentrated liquid laundry detergents such as Persil,
Omo and Surf Small & Mighty which help consumers to wash clothes
at lower temperatures, reducing GHG by up to 50% per load. We have
removed phosphates from all laundry powders worldwide, resulting in
lower greenhouse gas emissions of up to 50% per consumer use. Our
Foods & Refreshment division has prioritised reducing greenhouse
gas emissions from ice cream freezers since 2008. As the world’s
largest producer of ice cream, we have committed to accelerating the
roll-out of freezer cabinets that use more climate-friendly natural
(hydrocarbon) refrigerants. By 2018 our total purchase of these
cabinets had increased to around 2.9 million.

Detailed Lifecycle Analysis has shown that our GHG contribution from
animal-based agriculture, including fats and proteins, is relatively
low: 7.5% for Foods & Refreshment and 2.5% for total Unilever.
While emissions are comparatively low, the business opportunity is
significant for natural and plant-based foods and beverages. We have
a range of vegan and vegetarian variants such as Hellmann’s vegan
mayonnaise, Ben & Jerry’s non-dairy ice creams, Magnum vegan and
other options (see pages 11 to 12). We continue to actively promote
vegetarian and vegan recipes, notably via our Knorr brand websites.

A number of our targets directly address risks and opportunities
related to water scarcity caused by climate change. We estimate
that the sale of products which address water scarcity issues could
increase in our Home Care and Beauty & Personal Care divisions where
a number of products are available which address water scarcity and/
or have a lower GHG in use. For example, our Beauty & Personal Care
division is investing in water smart product innovations such as dry
shampoo and cleansing conditioner which help consumers use less
water while also offering relevant benefits such as reduced colour
loss and damage which can arise from frequent washing. Home Care
is combining insights in consumer behaviour and water consumption
with innovative technology to develop new market opportunities,
launching products and formulations that address water scarcity
and help our consumers save water. Day2, the world's first dry wash
spray is made with only 0.02% of the water in a normal laundry load.
Sunlight 2-in-1 Handwashing Laundry Powder and Rin (Radiant)
detergent bar are also helping to reduce water consumption at point
of use in water-stressed countries.

Strategic ReportAnnual Report on Form 20-F 2018Home Care is home to three brands, Pureit, Truliva/Qinyuan and Blueair,
which are responding directly to issues related to climate change. Pureit
and Truliva, our water purification businesses, offer products which
provide safe drinking water to millions of people with a lower carbon
footprint than alternatives. Our detailed lifecycle analysis shows that
Pureit’s total carbon footprint is at least 80% lower than boiled or bottled
water. Blueair, our indoor air purification business acquired in 2016,
removes contaminants from the air, including hazardous sooty particles
associated with the combustion of fossil fuels.

Several other targets in our USLP indirectly address climate risk and
opportunities by aiming to support groups who are vulnerable to the
effects of climate change and who are critical to our future growth,
notably smallholder farmers and women in low income countries.

Unilever continues to support a number of policy measures to
accelerate the transition to a low-carbon economy, including the
pricing of carbon and removal of fossil fuel subsidies which act
as negative carbon prices. We believe that carbon pricing is a
fundamental part of the global response to climate change and
without it, the world is unlikely to meet its greenhouse gas reduction
targets. We have publicly supported calls for carbon pricing and are
members of The Carbon Pricing Leadership Coalition, hosted by the
World Bank. In 2016, we implemented an internal price on carbon
as part of the business case appraisal for large capital expenditure
projects. The carbon price is also applied to emissions from our
manufacturing sites to raise a clean-tech fund. So far, €73 million
has been allocated to this fund for energy and water saving projects.
In January 2018 the price of carbon was €40 per tonne.

MEASURING AND REPORTING
We have been measuring and reporting on our energy and water
consumption and carbon emissions since 1995. The USLP includes
a number of stretching targets which relate to climate risks and
opportunities across our value chain. Performance against key targets
can be found on page 7 with commentary on page 13 and 14. Our
website contains detailed commentary on our USLP targets as well
as actions we are taking to achieve them.

Our ability to meet our climate-related targets partly depends on
changes in the energy markets worldwide, such as the rate of installation
of renewable electricity in many countries. We have a role to play
as an industry leader to help shape those markets. We are working
collaboratively with partners, suppliers and others to achieve our ambition.

We’ve created a detailed plan to annually assess the feasibility for Unilever
to reach our target to halve the greenhouse gas impact of our products
across the lifecycle by 2030, taking both external transitions towards a
low-carbon economy as well as the latest available data and assumptions
about our GHG footprint into account. The basis of this plan is the set of
around 2,800 products representative of our global portfolio across all
divisions for which we have full value-chain lifecycle analysis results.

We recalculated the footprint of these products using the latest 2030
projections on external transitions to a low-carbon economy (eg
International Energy Agency 2030 projection on grid changes to renewable
energy), low-carbon transition plans in our operations (eg achieving zero
net deforestation by 2020, using 100% renewable energy by 2020) and
Innovation Roadmaps (eg redesign for lower embedded carbon emissions,
transforming the temperature-controlled supply chain).

In line with the Large and Medium sized Companies and Groups
(Accounts and Reports) Regulations 2008 as amended by the Companies
Act 2006 (Strategic Report and Directors’ Report) Regulations 2013 our
greenhouse gas (GHG) emissions are set out below. For Scope 1 and 2
we report our CO2 emissions only but not other GHG emissions as
these are considered to be not material. For Scope 3 we report our
GHG emissions (eg CO2, CH4, N2O) in terms of CO2 equivalents.

We report our emissions with reference to the latest Greenhouse
Gas Protocol Corporate Accounting and Reporting Standard
(GHG Protocol) to calculate emissions of carbon dioxide from the
combustion of fuels and the operation of facilities (Scope 1) and from
purchased electricity, heat, steam and cooling (Scope 2, market-based
method). Each year PwC assure selected manufacturing environmental
metrics including carbon emissions from energy use and energy use
per tonne of production.

The GHG data below relates to emissions during the 12-month period
from 1 October to 30 September. This period is different from the
Strategic Report, Directors' Report and Financial Statements which
are calendar year.

UNILEVER GREENHOUSE GAS EMISSIONS BY ACTIVITY^

Manufacturing (scope 1 and 2)
Scope 1 (tonnes CO2)
Scope 2* (tonnes CO2)
Total Scope 1 & 2* (tonnes CO2)
Intensity ratio (kg CO2 per tonne
of production)

2018

2017

711,875

726,167

773,856

793,472

1,438,042

1,567,328

70.46

76.77

Distribution centres, research laboratories, marketing and sales
offices (scope 1 and 2)
Scope 1 (tonnes CO2)
Scope 2* (tonnes CO2)
Total Scope 1 & 2* (tonnes CO2)

100,924

120,976

20,052

102,292

122,331

20,039

Upstream and downstream of Unilever operations
– top 3 emissions sources (scope 3)

Consumer use
(downstream) (tonnes CO2e)θ
Ingredients and packaging
(upstream) (tonnes CO2e)‡
Distribution and retail
(downstream) (tonnes CO2e) ж

39,895,946 38,697,432

14,985,897 15,000,941

4,368,626

3,895,589

^ Carbon emission factors are used to convert energy used in our operations
to emissions of CO2. Carbon emission factors for fuels are provided by the
Intergovernmental Panel on Climate Change (IPCC).

+ For manufacturing we have selected an intensity ratio based on production.
This aligns with our long-standing reporting of manufacturing performance.
Emissions from the combustion of biogenic fuels (biomass, fuel crops
etc) within our operations are reported separately to other Scope 1 and
2 emissions, as recommended by the GHG Protocol, and excluded from
our intensity ratio calculation. The data also excludes Scope 3 emissions
(including consumer use of our products) which we report as part of our
Unilever Sustainable Living Plan.

* Carbon emission factors for grid electricity calculated according to the ‘market-
based method’ are supplier-specific emissions factors reflecting contractual
arrangements with electricity suppliers. Where supplier-specific emissions
factors are not available, carbon emissions factors reflect the country where each
operation is located and are provided by the International Energy Agency (IEA).
Θ We measure the full GHG footprint of our product portfolio and annual sales

using an LCA method compliant with the ISO 14040 standard. We measure the
consumer use phase using a combination of primary habits data and on pack
recommendations of use combined with lifecycle inventory data. We measure
a representative sample of products across 14 countries which account for
around 60-70% of our annual sales volume.

‡ We use a combination of external lifecycle inventory databases (secondary
data) and supplier specific data (primary data eg for surfactants, perfumes
and some of food ingredients) to measure the GHG emissions of purchased
ingredients and packaging materials used in the production of our products.

ж Downstream distribution is calculated using average distances and modes
of transport derived from data collected from our distribution network and
logistic providers.

FURTHER CLIMATE CHANGE DISCLOSURES
This Annual Report and Accounts contains additional disclosures
on our climate change risks and opportunities:
• Governance and remuneration: pages 46 to 47 and 52 to 54
• Strategy for climate change: page 14
• Risk management: page 30
• Metrics and targets: pages 7 and 13 to 14

Our website contains disclosures on our greenhouse gas and water
USLP targets.

www.unilever.com/sustainable-living/our-sustainable-living-
report-hub

Our CDP Climate submission contains extensive disclosure on
our climate risks, opportunities, impacts and mitigating actions
(password required).

www.cdp.net

Strategic ReportAnnual Report on Form 20-F 2018

A list of our current Directors, their roles on the Boards, their dates
of appointment, tenure and their other major appointments is set
out on page 3.

The Boards have delegated the operational running of the Unilever
Group to the CEO with the exception of the following matters which
are reserved for the Boards: structural and constitutional matters,
corporate governance, approval of dividends, approval and monitoring
of overall strategy for the Unilever Group, approval of significant
transactions or arrangements in relation to mergers, acquisitions,
joint ventures and pensions. The CEO is responsible to the Boards
in relation to the operational running of the Group and other powers
delegated to him by the Boards. The CEO can delegate any of his
powers and discretions, and he does so delegate to members of the
Unilever Leadership Executive (ULE) (with power to sub-delegate).
The ULE is composed of the CEO, CFO and other senior executives
who assist the CEO in the discharge of the powers delegated to
the CEO by the Boards. Members of the ULE report to the CEO,
and the CEO supervises and determines the roles, activities and
responsibilities of the ULE. While ULE members (other than the CEO
and the CFO) are not part of the Boards’ decision-making process, to
provide the Boards with deeper insights, ULE members often attend
those parts of the Board meetings which relate to the operational
running of the Group. The ULE currently consists of the CEO,
CFO, the Division Presidents, the Presidents for Europe and North
America, and the Chief Research and Development Officer, Chief HR
Officer, Chief Legal Officer and Group Secretary, Chief Marketing and
Communications Officer and Chief Supply Chain Officer.

The biographies of ULE members are on page 5.

BOARD COMMITTEES
The Boards have established four Board Committees: the Audit
Committee, the Compensation Committee, the Corporate Responsibility
Committee and the Nominating and Corporate Governance Committee.
The terms of reference of these Committees can be found on our
website and the reports of each Committee, including attendance
at meetings in 2018, can be found on pages 43 to 65.

www.unilever.com/investor-relations/agm-and-corporate-
governance/board-and-management-committees/

THE GOVERNANCE OF UNILEVER
Further details of the roles and responsibilities of the Chairman, Senior
Independent Director/Vice-Chairman, CEO, CFO and other corporate
officers and how our Boards effectively operate as one board, govern
themselves and delegate their authorities are set out in the document
entitled ‘The Governance of Unilever’, which can be found on our website.

The Governance of Unilever also describes the Foundation
Agreements, Directors’ appointment, tenure, induction and training,
Directors’ ability to seek independent advice at Unilever’s expense
and details about Board and Management Committees (including
the Disclosure Committee).

www.unilever.com/investor-relations/agm-and-corporate-
governance/our-corporate-governance/

GOVERNANCE REPORT
CORPORATE GOVERNANCE

UNILEVER’S STRUCTURE
Since its formation in 1930, the Unilever Group has operated as nearly
as practicable as a single economic entity. This is achieved by special
provisions in the Articles of Association of NV and PLC, together with
a series of agreements between NV and PLC which are together
known as the Foundation Agreements (described below). These
agreements enable Unilever to achieve unity of management,
operations, shareholders’ rights, purpose and mission and can
be found on our website.

The Equalisation Agreement makes the economic position of the
shareholders of NV and PLC, as far as possible, the same as if they
held shares in a single company and also regulates the mutual rights
of the shareholders of NV* and PLC. Under this agreement, NV and
PLC must adopt the same financial periods and accounting policies.

The Deed of Mutual Covenants provides that NV and PLC and their
respective subsidiary companies shall co-operate in every way for
the purpose of maintaining a common operating policy. They shall
exchange all relevant information about their respective businesses
– the intention being to create and maintain a common operating
platform for the Unilever Group throughout the world. This Deed
also contains provisions for the allocation of assets within the
Unilever Group.

Under the Agreement for Mutual Guarantees of Borrowing between
NV and PLC, each company will, if asked by the other, guarantee
the borrowings of the other and the other’s subsidiaries. These
arrangements are used, as a matter of financial policy, for certain
significant borrowings. They enable lenders to rely on our combined
financial strength.

Each NV ordinary share represents the same underlying economic
interest in the Unilever Group as each PLC ordinary share. However,
NV and PLC remain separate legal entities with different shareholder
constituencies and separate stock exchange listings. Shareholders
cannot convert or exchange the shares of one for the shares of the
other. More information on the exercise of voting rights can be found in
NV’s and PLC’s Articles of Association and in the Notices of Meetings
for our NV and PLC AGMs, all of which can be found on our website.

Throughout this report, when referring to NV shares or shareholders, the
term ‘shares’ or ‘shareholder’ also encompasses a depositary receipt or
a holder of depositary receipts.

www.unilever.com/investor-relations/agm-and-corporate-
governance/legal-structure-and-foundation-agreements/

BOARDS
The Boards of NV and PLC have ultimate responsibility for the
management, general affairs, direction, performance and long-term
success of our business as a whole. The Boards are one-tier boards,
the same people are on both Boards and the responsibility of the
Directors is collective, taking into account their respective roles
as Executive Directors and Non-Executive Directors. The majority
of the Directors are Non-Executive Directors who essentially have
a supervisory role. In the normal course Unilever has two Executive
Directors, the Chief Executive Officer (CEO) and the Chief Financial
Officer (CFO). On 31 December 2018 the current CEO resigned and his
successor, Alan Jope, was appointed on 1 January 2019. Alan will be
proposed to be appointed as an Executive Director at the 2019 AGMs.
Consequently, between 1 January 2019 and the 2019 AGMs in May we
have one Executive Director.

Governance ReportAnnual Report on Form 20-F 2018

BOARD EFFECTIVENESS

BOARD MEETINGS
A minimum of five face-to-face meetings are planned throughout the
calendar year to consider important corporate events and actions,
for example, the half-year and full-year results announcements of
the Unilever Group; the development of and approval of the overall
strategy of the Unilever Group; oversight of the performance of the
business; review of risks and internal risk management and control
systems; authorisation of major transactions; declaration of dividends;
convening of shareholders’ meetings; succession planning; review
of the functioning of the Boards and their Committees; culture; and
review of corporate responsibility and sustainability, in particular the
Unilever Sustainable Living Plan. Other ad hoc Board meetings are
convened to discuss strategic, transactional and governance matters
that arise. In 2018 the Boards met physically in January, March,
May, July, October and November. Meetings of the Boards may be
held either in London or in Rotterdam or such other locations as
the Boards think fit, with one or two off-site Board meetings a year.
The Chairman sets the Boards’ agenda, ensures the Directors
receive accurate, timely and clear information, and promotes effective
relationships and open communication between the Executive and
Non-Executive Directors.

ATTENDANCE
The table showing the attendance of current Directors at Board
meetings in 2018 can be found on page 3. If Directors are unable
to attend a Board meeting they have the opportunity beforehand to
discuss any agenda items with the Chairman. Ann Fudge attended
four of the Board meetings she was eligible to attend before retiring
from the Boards on 3 May 2018.

NON-EXECUTIVE DIRECTOR MEETINGS
The Non-Executive Directors usually meet as a group, without the
Executive Directors present, when there is a face-to-face Board
meeting. In 2018 they met five times. The Chairman, or in his
absence the Senior Independent Director/Vice-Chairman, chairs
such meetings.

BOARD EVALUATION
Each year the Boards formally assess their own performance with
the aim of helping to improve the effectiveness of both the Boards
and the Committees. At least once every three years an independent
third party facilitates the evaluation. The last external evaluation was
performed in 2017. The evaluation consists of individual interviews
with the Directors by the Chairman and, when relevant, by the external
evaluator. These interviews are complemented by the completion by
all Directors of three confidential online evaluation questionnaires
on the efficiency and effectiveness of our Boards, CEO and Chairman.
The Boards evaluation questionnaire this year focused on a number
of key areas including Strategy, Risk/Financial Controls, Board
Effectiveness and Information/Knowledge. The Chairman's statement
on page 2 describes the key actions agreed by the Boards following
the evaluation.

The evaluation of the performance of the Chairman and CEO is led
by the Senior Independent Director/Vice-Chairman and Chairman
respectively, and the bespoke questionnaires will be used to support
these evaluations. Committees of the Boards evaluate themselves
annually under supervision of their respective Chairs taking into
account the views of respective Committee members and the Boards.
The key actions agreed by each Committee in the 2018 evaluations
can be found in each Committee Report.

APPOINTMENT
In seeking to ensure that NV and PLC have the same Directors, the
Articles of Association of NV and PLC contain provisions which are
designed to ensure that both NV and PLC shareholders are presented
with the same candidates for election as Directors. Anyone being
elected as a Director of NV must also be elected as a Director of
PLC and vice versa. Therefore, if an individual fails to be elected
to both companies he or she will be unable to take his or her place
on either Board.

The report of the Nominating and Corporate Governance Committee
(NCGC) on pages 48 and 49 describes the work of the NCGC in Board
appointments and recommendations for re-election. In addition,
shareholders are able to nominate Directors. The procedure for
shareholders to nominate Directors is contained within the document
entitled ‘Appointment procedure for NV and PLC Directors’ which is
available on our website. To do so they must put a resolution to both
the NV and PLC AGMs in line with local requirements. Directors are
appointed by shareholders by a simple majority vote at each AGM.

www.unilever.com/investor-relations/agm-and-corporate-
governance/board-and-management-committees/

DIRECTOR INDUCTION AND TRAINING
All new Directors participate in a comprehensive induction programme
when they join the Boards. The Chairman ensures that ongoing
training is provided for Directors by way of site visits, presentations
and circulated updates at (and between) Board and Board Committee
meetings on, among other things, Unilever’s business, environmental,
social, corporate governance, regulatory developments and investor
relations matters. For example, in 2018 the Directors received
presentations on Information Security, Digital, the Supply Chain
and Simplification.

INDEPENDENCE AND CONFLICTS
As the Non-Executive Directors make up the Committees of the
Boards, it is important that they can be considered to be independent.
Each year the Boards conduct a thorough review of the Non-Executive
Directors’, and their related or connected persons’, relevant relationships
referencing the criteria set out in ‘The Governance of Unilever’
which is derived from the relevant best practice guidelines in the
Netherlands, UK and US. The Boards currently consider all our
Non-Executive Directors to be independent of Unilever.

We attach special importance to avoiding conflicts of interest between
NV and PLC and their respective Directors. The Boards ensure that
there are effective procedures in place to avoid conflicts of interest
by Board members. A Director must without delay report any conflict
of interest or potential conflict of interest to the Chairman and to the
other Directors, or, in case any conflict of interest or potential conflict
of interest of the Chairman, to the Senior Independent Director/Vice-
Chairman and to the other Directors. The Director in question must
provide all relevant information to the Boards, so that the Boards can
decide whether a reported (potential) conflict of interest of a Director
qualifies as a conflict of interest within the meaning of the relevant
laws. A Director may not vote on, or be counted in a quorum in relation
to, any resolution of the Boards in respect of any situation in which he
or she has a conflict of interest. The procedures that Unilever has put
in place to deal with conflicts of interest operate effectively.

Unilever recognises the benefit to the individual and the Unilever
Group of senior executives acting as directors of other companies
but, to ensure outside directorships of our Executive Directors do not
involve an excessive commitment or conflict of interest, the number
of outside directorships of listed companies is generally limited to one
per Executive Director and approval is required from the Chairman.

INDEMNIFICATION
The terms of NV Directors’ indemnification are provided for in NV’s
Articles of Association. The power to indemnify PLC Directors is
provided for in PLC’s Articles of Association and deeds of indemnity
have been agreed with all PLC Directors. Third-party directors’ and
officers’ liability insurance was in place for all Unilever Directors
throughout 2018 and is currently in force.

In addition, PLC provides indemnities (including, where applicable,
a qualifying pension scheme indemnity provision) to the Directors
of three subsidiaries each of which acts as trustee of a Unilever UK
pension fund. Appropriate trustee liability insurance is also in place.

Governance ReportAnnual Report on Form 20-F 2018
CORPORATE GOVERNANCE CONTINUED

In addition, NV conducted a share buyback programme during 2018
with an aggregate market value of approximately €3 billion bought
back in the form of 62,202,168 NV ordinary shares (or depositary
receipts in respect of such ordinary shares).

Following a public offer and a subsequent squeeze out procedure,
Unilever Corporate Holdings Nederland B.V. (UCHN), an indirect wholly
owned subsidiary of PLC, acquired all 6% cumulative preference shares
and 7% cumulative preference shares. Unilever N.V. purchased these
6% cumulative preference shares and 7% cumulative preference shares
on 2 October 2018. The resolutions of the General Meeting of NV and
the Board of NV to cancel these shares were filed on 29 November 2018,
as described within the Share Capital section above.

Further information on these purchases can be found in note 4C to the
consolidated accounts on page 93.

NV SPECIAL ORDINARY SHARES
To ensure unity of management, the provisions within the NV Articles
of Association containing the rules for appointing NV Directors cannot
be changed without the permission of the holders of the special
ordinary shares numbered 1 – 2,400 inclusive. These NV special
ordinary shares may only be transferred to one or more other holders
of such shares. The joint holders of these shares are N.V. Elma and
United Holdings Limited, which are subsidiaries of NV and PLC
respectively. The Boards of N.V. Elma and United Holdings Limited
comprise three Directors of the Unilever Boards.

TRUST OFFICE
The Foundation Unilever N.V. Trust Office (Stichting
Administratiekantoor Unilever N.V.) is a trust office with a board
independent of Unilever. As part of its corporate objects, the Trust
Office issues depositary receipts in exchange for the NV ordinary
shares. These depositary receipts are listed on Euronext Amsterdam,
as are the NV ordinary shares themselves

Holders of depositary receipts can under all circumstances exchange
their depositary receipts for the underlying shares (and vice versa) and
are entitled to dividends and all economic benefits on the underlying
shares held by the Trust Office. There are no limitations on the
holders’ voting rights, they can attend all General Meetings of NV,
either personally or by proxy, and have the right to speak. The Trust
Office only votes shares that are not represented at a General Meeting.
The Trust Office votes in such a way as it deems to be in the long-term
interests of the holders of the depositary receipts. This voting policy
is laid down in the Conditions of Administration that apply to the
depositary receipts.

The Trust Office’s shareholding fluctuates daily. Its holdings on
31 December 2018 were 1,268,051,254 NV ordinary shares (73.95%).
At the 2018 NV AGM, the Trust Office represented 36.95% of all votes
present at the meeting.

The current members of the board at the Trust Office are Mr J H Schraven
(Chairman), Mr P M L Frentrop, Mr A Nühn and Ms C M S Smits-Nusteling.
The Trust Office reports periodically on its activities. Further information
on the Trust Office, including its Articles of Association, Conditions
of Administration and Voting Policy, can be found on its website.

www.administratiekantoor-unilever.nl/eng/home

OUR SHARES

NV SHARES

SHARE CAPITAL
NV’s issued share capital on 31 December 2018* was made up of:

• €274,356,432 split into 1,714,727,700 ordinary shares of €0.16

each; and

• €1,028,568 split into 2,400 special ordinary shares numbered

1 – 2,400 known as special ordinary shares.

When referred to the issued share capital on 31 December 2018 also
€62,065,550 split into two classes (6% and 7%) of cumulative preference
shares was outstanding. All 6% and 7% cumulative preference shares were
held in treasury as a result of which these shares cannot be voted upon in the
General Meeting of NV. The resolutions of the General Meeting of NV and the
Board of NV to cancel these shares were filed on 29 November 2018 with the
Dutch Trade Register and an announcement thereof in a daily and nationally
distributed newspaper in the Netherlands was made on 5 December 2018.
These shares were cancelled on 6 February 2019.

LISTINGS
NV has ordinary shares (UNIA) and depositary receipts for such
ordinary shares (UNA) listed on Euronext Amsterdam and, as US
New York Registry Shares* (UN) on the New York Stock Exchange.

One New York Registry Share represents one NV ordinary share with
a nominal value of €0.16.

VOTING RIGHTS
NV shareholders can cast one vote for each €0.16 nominal capital they
hold and can vote in person or by proxy. The voting rights attached to
NV’s outstanding shares are split as follows:

Total number
of votes

% of issued
capital

1,714,727,700 ordinary shares

1,714,727,700(a)

2,400 special shares

6,428,550

99.63

0.37

As at 31 December 2018:
(a) 254,012,896 shares were held in treasury and 9,336,215 shares were held to
satisfy obligations under share-based incentive schemes. These shares and
the special shares are not voted on. All 6% and 7% cumulative preference
shares were held in treasury as a result of which these shares cannot be
voted upon, as described within the Share Capital section above.

SHARE ISSUES AND PURCHASE OF SHARES
At the NV AGM held on 3 May 2018 the Board of NV was designated
as the corporate body authorised to resolve on the issue of, or on
the granting of rights to subscribe for, shares not yet issued and to
restrict or exclude the statutory pre-emption rights that accrue to
shareholders upon issue of shares, on the understanding that this
authority is limited to 33% of NV’s issued ordinary share capital and
to disapply pre-emption rights to 5% of NV’s issued share capital for
general corporate purposes and an additional 5% authority only in
connection with an acquisition or specified capital investment.

In addition, at NV’s 2018 AGM the NV Board was designated as
the corporate body authorised to purchase (i) ordinary shares with
a maximum of 10% of the issued share capital as well as (ii) any and
all 6% and 7% cumulative preference shares.

These authorities expire on the earlier of the conclusion of the 2019 NV
AGM or the close of business on 30 June 2019 (the last date by which NV
must hold an AGM in 2019). Such authorities (other than with respect to
the 6% and 7% cumulative preference shares) are renewed annually.

During 2018 companies within the Unilever Group purchased 4,000,000
NV ordinary shares, representing 0.23% of the issued ordinary share
capital, for €183,380,649. These purchases were made to facilitate
grants made in connection with Unilever’s employee compensation
programmes. Further information on these purchases can be found
in note 4C to the consolidated accounts on page 93.

Governance ReportAnnual Report on Form 20-F 2018

PLC SHARES

OUR SHAREHOLDERS

SHARE CAPITAL
PLC’s issued share capital on 31 December 2018 was made up of:
• £36,934,840 split into 1,187,191,284 ordinary shares of 31/9p each;

and

• £100,000 of deferred stock of £1 each.

LISTINGS
PLC has ordinary shares (ULVR) listed on the London Stock Exchange
and, as American Depositary Receipts* (UL), on the New York
Stock Exchange.

One American Depository Receipt represents one PLC ordinary share with
a nominal value of 31/9p.

VOTING RIGHTS
PLC shareholders can cast one vote for each 31/9p nominal capital they
hold and can vote in person or by proxy. The voting rights attached to
PLC’s outstanding shares are split as follows:

Total number
of votes

% of issued
capital

1,187,191,284 ordinary shares

1,187,191,284

£100,000 deferred stock

3,214,285

99.73

0.27

As at 31 December 2018:
(a) 18,660,634 shares were held by PLC in treasury and 5,645,392 shares were
held by NV group companies. These shares and the deferred stock are not
voted on.

SHARE ISSUES AND PURCHASE OF SHARES
At the 2018 PLC AGM held on 2 May 2018 the PLC Directors were
authorised to issue new shares, up to a maximum of £12,755,555
nominal value (which at the time represented approximately 33%
of PLC’s issued ordinary share capital) and to disapply pre-emption
rights up to approximately 5% of PLC’s issued ordinary share capital
for general corporate purposes and an additional 5% authority only
in connection with an acquisition or specified capital investment.

In addition, at PLC’s 2018 AGM the PLC Board was authorised to make
market purchases of its ordinary shares, up to a maximum of just
under 10% of PLC’s issued ordinary share capital and within the limits
prescribed in the resolution until the earlier of the conclusion of PLC’s
2019 AGM and 30 June 2019. These authorities are renewed annually
and authority will be sought at PLC’s 2019 AGM.

During 2018 companies within the Unilever Group purchased 2,222,000
PLC ordinary shares, representing 0.19% of the issued share capital,
for £87,978,671. These purchases were made to facilitate grants
made in connection with its employee compensation programmes.
Further information on these purchases can be found in note 4C
to the consolidated accounts on page 93.

In addition, PLC conducted a share buyback programme during 2018
with an aggregate market value of approximately £3 billion bought
back in the form of 63,236,433 PLC ordinary shares.

On 31 July 2018, PLC cancelled 110,493,623 PLC ordinary shares of
31/9p each held in treasury, representing 8.43% of the issued share
capital. On 19 September 2018, PLC cancelled a further 12,471,454
PLC ordinary shares of 31/9p each held in treasury, representing 1.04%
of the issued share capital.

PLC DEFERRED STOCK
To support unity of management, the holders of PLC’s deferred
stock have rights within PLC’s Articles of Association relating to any
changes in the rules for appointing PLC Directors. The joint holders
of the PLC deferred stock are N.V. Elma and United Holdings Limited,
which are subsidiaries of NV and PLC respectively. The Boards of N.V.
Elma and United Holdings Limited comprise three Directors of the
Unilever Boards.

SIGNIFICANT SHAREHOLDERS OF NV
As far as Unilever is aware, the only holder of more than 3% of, or
3% of voting rights attributable to, NV’s share capital (‘Disclosable
Interests’) on 31 December 2018 (apart from the Foundation Unilever
N.V. Trust Office, see page 38) is BlackRock, Inc. (BlackRock) as
indicated in the table below.

Shareholder

Class of shares

Total number
of shares held

% of relevant
class

BlackRock

ordinary shares

66,947,018

3.90

BlackRock notified the AFM that its holding changed to 4.02% on
19 February 2019. Between 1 January 2016 and 21 February 2019,
BlackRock, NN Group N.V. (NN), ASR Nederland N.V. (ASR) and UCHN,
see page 38, have held more than 3% in the share capital of NV.

SIGNIFICANT SHAREHOLDERS OF PLC
As far as Unilever is aware, the only holders of more than 3% of,
or 3% of voting rights attributable to, PLC’s ordinary share capital
on 31 December 2018 (apart from shares held in treasury by PLC,
see page 39), are BlackRock and the Leverhulme Trust as indicated
in the table below.

Shareholder

Class of shares

Total number
of shares held

% of relevant
class

BlackRock

ordinary shares

77,176,319

The Leverhulme
Trust

ordinary shares

46,931,182

6.60

4.02

As far as Unilever is aware, no new Disclosable Interests have been
notified to PLC between 1 January 2019 and 21 February 2019 (the
latest practicable date for inclusion in this report). Between 1 January
2016 and 21 February 2019, (i) BlackRock, and (ii) the aggregated
holdings of the trustees of the Leverhulme Trust and the Leverhulme
Trade Charities Trust, have held more than 3% of, or 3% of voting
rights attributable to, PLC’s ordinary shares.

STAKEHOLDER ENGAGEMENT
We value open and effective communication with our stakeholders.
The primary responsibility for stakeholder engagement, which is
generally related to the operations of the business, rests with our
Executive Directors. Non-Executive Directors also actively engage
with stakeholders as part of their oversight duties and responsibilities
that have not been delegated to the Executive Directors.

SHAREHOLDERS
The CFO has lead responsibility for shareholder engagement, with
the active involvement of the CEO and supported by the Investor
Relations department.

The Executive Directors’ investor relations programme continued
in 2018 with meetings held with institutional shareholders in major
cities globally. The Executive Directors and members of the Investor
Relations team also meet a large number of investors at the industry
conferences they attend. In 2018 industry conferences attended by
Unilever representatives included events in London, Paris, Stockholm,
Boston and New York.

Our annual investor seminar in December also allowed investors to
meet the Chairman, CEO, CEO-designate, CFO and other members
of senior management. The event was held at the offices of Hindustan
Unilever in Mumbai and focused on Unilever’s emerging markets
expertise as well as the digital transformation of the business.

In 2018, as part of the strategic review of options to accelerate
sustainable value creation and our proposal to simplify the Unilever
corporate structure, the Chairman met and spoke with global
investors during the year. The Chair of the Compensation Committee
also extensively engaged with and sought feedback from investors
in relation to our Remuneration Policy.

Governance ReportAnnual Report on Form 20-F 2018
CORPORATE GOVERNANCE CONTINUED

On an ongoing basis, the Boards are briefed on investor reactions
to the Unilever Group’s quarterly results announcements and on any
issues raised by shareholders that are relevant to their responsibilities.

We maintain a frequent dialogue with our principal institutional
shareholders and regularly collect feedback. Private shareholders are
encouraged to give feedback via shareholder.services@unilever.com.
Our shareholders are also welcome to raise any issues directly with
the Chairman or the Senior Independent Director/Vice-Chairman, and
the Chairman, Executive Directors and Chairs of the Committees are
also generally available to answer questions from the shareholders
at the AGMs each year.

The 2018 AGMs were held in Rotterdam and London in May
and the topics raised by shareholders included: e-commerce,
mergers & acquisitions, sustainability, Simplification, remuneration,
total shareholder return, Brexit and data protection.

Shareholders of NV may propose resolutions if they individually
or together hold at least 1% of NV’s issued capital in the form of
shares or depositary receipts issued for NV shares. Shareholders
who together represent at least 10% of the issued capital of NV can,
under certain circumstances, also requisition the District Court to
allow them to convene an Extraordinary General Meeting to deal
with specific resolutions.

OTHERS
Our Executive Directors and Non-Executive Directors also engage with
a wide-ranging group of stakeholders during specific Unilever events.
For example, we annually organise one or more Board Relationship
meetings offering our Directors the opportunity to directly meet our
key customers, suppliers, agencies, NGOs, trade associations and
advisers. In 2018, such meetings were held in the Netherlands and
the UK.

EMPLOYEES
In order to allow our Non-Executive Directors to gain first-hand
experience of our operations and to engage in a broader context,
we organise one or more site visits annually. During these site visits,
Non-Executive Directors are informed about local market conditions
and operations as well as relevant local matters. Typically, the
programme allows Non-Executive to meet management and young
talent at these sites. In 2018, such site visits were held in China,
Germany, the Netherlands and the US. In terms of engaging with
employees, our Non-Executive Directors actively participate in our
management development programme sharing knowledge and
insight on a mutual basis.

www.unilever.com/investor-relations/

GENERAL MEETINGS
Both NV and PLC hold an AGM each year. At the AGMs the Chairman
gives his thoughts on governance aspects of the preceding year and
the CEO gives a detailed review of the performance of the Unilever
Group over the last year. Shareholders are encouraged to attend the
relevant meeting and to ask questions at or in advance of the meeting.
Indeed, the question and answer session forms an important part of
each meeting. The external auditors are welcomed to the AGMs and
are entitled to address the meetings.

Provision 4.1.8 of the Corporate Governance Code in the Netherlands
(Dutch Code) and Code Provision E.2.3 of the UK Corporate
Governance Code (UK Code) require all Directors to attend both the
NV and PLC AGMs. As questions asked at our AGMs tend to focus
on business related matters, governance and the remit of our Board
Committees, the Chairman, CEO, CFO and the Chairs of our four
Committees of the Board attend both our AGMs and the remaining
members of the Board attend at least one AGM.

Shareholders of PLC may propose resolutions if they individually
or together hold shares representing at least 5% of the total voting
rights of PLC, or 100 shareholders who hold on average £100 each
in nominal value of PLC share capital can require PLC to propose
a resolution at a General Meeting. PLC shareholders holding in
aggregate 5% of the issued PLC ordinary shares are able to convene
a General Meeting of PLC.

Information on the 2019 AGMs can be found within the NV and PLC
AGM Notices which will be published in March 2019.

REQUIRED MAJORITIES
Resolutions are usually adopted at NV and PLC General Meetings by
an absolute majority of votes cast, unless there are other requirements
under the applicable laws or NV’s or PLC’s Articles of Association. For
example, there are special requirements for resolutions relating to the
alteration of the Articles of Association, the liquidation of NV or PLC
and the alteration of the Equalisation Agreement.

A proposal to alter the Articles of Association of NV can only be made
by the NV Board. A proposal to alter the Articles of Association of PLC
can be made either by the PLC Board or by requisition of shareholders
in accordance with the UK Companies Act 2006. Unless expressly
specified to the contrary in PLC’s Articles of Association, PLC’s Articles
of Association may be amended by a special resolution. Proposals
to alter the provisions in the Articles of Association of NV and PLC
respectively relating to the unity of management require the prior
approval of meetings of the holders of the NV special ordinary shares
and the PLC deferred stock. The Articles of Association of both NV
and PLC can be found on our website.

www.unilever.com/investor-relations/agm-and-corporate-
governance/legal-structure-and-foundation-agreements/

RIGHT TO HOLD AND TRANSFER SHARES
Unilever’s constitutional documents place no limitations on the right to
hold or transfer NV and PLC ordinary shares. There are no limitations
on the right to hold or exercise voting rights on the ordinary shares of
NV and PLC imposed by Dutch or English law.

Governance ReportAnnual Report on Form 20-F 2018

THE UNITED KINGDOM
In 2018, PLC complied with all UK Code provisions with the exception
of UK Code Provision E.2.3 as noted in the General Meetings section
above. The UK Code is available on the Financial Reporting Council’s
(FRC) website.

Risk Management and Control: Our approach to risk management
and systems of internal control is in line with the recommendations
in the FRC’s revised guidance ‘Risk management, internal control
and related financial and business reporting’ (the Risk Guidance).
It is Unilever’s practice to review acquired companies’ governance
procedures and to align them to the Unilever Group’s governance
procedures as soon as is practicable.

Greenhouse Gas (GHG) Emissions: Information on GHG emissions
can be found on page 35.

Employee Involvement and Communication: Unilever’s UK companies
maintain formal processes to inform, consult and involve employees
and their representatives. A National Consultative Forum comprising
employees and management representatives from key locations meets
regularly to provide a forum for discussing issues relating to Unilever
sites in the United Kingdom. We recognise collective bargaining on
a number of sites and engage with employees via the Sourcing Unit
Forum, which includes national officer representation from the three
recognised trade unions. A European Works Council, embracing
employee and management representatives from countries within
Europe, has been in existence for several years and provides a forum
for discussing issues that extend across national boundaries.

Equal Opportunities and Diversity: Consistent with our Code of
Business Principles, Unilever aims to ensure that applications for
employment from everyone are given full and fair consideration and
that everyone is given access to training, development and career
opportunities. Every effort is made to retrain and support employees
who become disabled while working within the Group.

www.frc.org.uk/

www.unilever.com/sustainable-living/values-and-values/

CORPORATE GOVERNANCE COMPLIANCE

GENERAL
We conduct our operations in accordance with internationally accepted
principles of good governance and best practice, while ensuring
compliance with the corporate governance requirements applicable
in the countries in which we operate. Unilever is subject to corporate
governance requirements (legislation, codes and/or standards) in the
Netherlands, the UK and the US and in this section we report on our
compliance against these.

MATERIAL CONTRACTS
Under the European Takeover Directive as implemented in the
Netherlands and the UK, the UK Companies Act 2006 and rules of
the US Securities and Exchange Commission, Unilever is required to
provide information on contracts and other arrangements essential
or material to the business of the Unilever Group. Other than the
Foundation Agreements referred to on page 36, we believe we do
not have any such contracts or arrangements.

THE NETHERLANDS
In 2018, NV complied with almost all the principles and best practice
provisions of the Dutch Code, with the exception of Dutch Code
Provision 4.1.8 as noted in the General Meetings section above and
the best practice provision set out below. The Dutch Code is available
on the Monitoring Committee Corporate Governance Code’s website.

Best Practice Provision 3.2.3
The Dutch Code provides that in case of dismissal, the remuneration
of an Executive Director should not exceed one year’s salary.

It is our policy to set the level of severance payments for Executive
Directors at no more than one year’s salary, unless the Boards, on the
recommendation of the Compensation Committee, find this manifestly
unreasonable given circumstances or unless otherwise dictated by
applicable law.

Corporate Governance Statements:
In addition to an explanation of non-compliance to the Dutch Code,
as set out above, the Dutch Code also requires the Board to confirm,
and the Board hereby confirms that:
• this Annual Report and Accounts provides sufficient insights into
any failings in the effectiveness of the internal risk management
and control systems;

• the systems mentioned above provide reasonable assurance that
the financial reporting does not contain any material inaccuracies;
• based on the current state of affairs, it is justified that the financial

reporting is prepared on a going concern basis; and

• this Annual Report and Accounts states those material risks and

uncertainties that are relevant to the expectation of NV’s continuity
for the period of 12 months after the preparation of this Annual
Report and Accounts.

The statements in this paragraph are not statements in accordance with
the requirements of Section 404 of the US Sarbanes-Oxley Act of 2002.

Furthermore, NV is required to make a statement concerning corporate
governance as referred to in article 2a of the decree on the content of
the management report (Besluit inhoud bestuursverslag) (the Decree).

The information required to be included in this corporate governance
statement as described in articles 3, 3a and 3b of the Decree can be
found on our website.

www.commissiecorporategovernance.nl
www.unilever.com/corporategovernance

Governance ReportAnnual Report on Form 20-F 2018

CORPORATE GOVERNANCE CONTINUED

All senior executives and senior financial officers have declared their
understanding of and compliance with Unilever’s Code of Business
Principles and the related Code Policies. No waiver from any provision
of the Code of Business Principles or Code Policies was granted
in 2018 to any of the persons falling within the scope of the SEC
requirements. The Code of Business Principles and related Code
Policies are published on our website.

Risk Management and Control: Following a review by the Disclosure
Committee, Audit Committee and Boards, the CEO and the CFO
concluded that the design and operation of the Unilever Group’s
disclosure controls and procedures, including those defined in the
United States Securities Exchange Act of 1934 – Rule 13a – 15(e),
as at 31 December 2018 were effective.

Unilever is required by Section 404 of the US Sarbanes-Oxley Act of
2002 to report on the effectiveness of its internal control over financial
reporting. This requirement is reported on within the section entitled
‘Management’s Report on Internal Control over Financial Reporting’
on page 156.

In February 2017, the Group received a public potential offer by The
Kraft Heinz Company for $50 per share in respect of all of NV and
PLC shares. Unilever rejected the proposal.

www.unilever.com/investor-relations/agm-and-corporate-
governance/our-corporate-governance/

THE UNITED STATES
Both NV and PLC are listed on the New York Stock Exchange (NYSE).
As such, both companies must comply with the requirements of US
legislation, regulations enacted under US securities laws and the
Listing Standards of the NYSE, that are applicable to foreign private
issuers, copies of which are available on their websites.

We are substantially compliant with the Listing Standards of the
NYSE applicable to foreign private issuers except as set out below.

We are required to disclose any significant ways in which our
corporate governance practices differ from those typically followed
by US companies listed on the NYSE. Our corporate governance
practices are primarily based on the requirements of the UK Listing
Rules, the UK Code and the Dutch Code but substantially conform
to those required of US companies listed on the NYSE. The only
significant way in which our corporate governance practices differ
from those followed by domestic companies under Section 303A
Corporate Governance Standards of the NYSE is that the NYSE rules
require that shareholders must be given the opportunity to vote on
all equity-compensation plans and material revisions thereto, with
certain limited exemptions. The UK Listing Rules require shareholder
approval of equity-compensation plans only if new or treasury
shares are issued for the purpose of satisfying obligations under the
plan or if the plan is a long-term incentive plan in which a director
may participate. Amendments to plans approved by shareholders
generally only require approval if they are to the advantage of the plan
participants. Furthermore, Dutch law and NV’s Articles of Association
require shareholder approval of equity-compensation plans only if the
Executive Directors are able to participate in such plans. Under Dutch
law, shareholder approval is not required for material revisions to
equity-compensation plans unless the Executive Directors participate
in a plan and the plan does not contain its own procedure for revisions.

Attention is drawn to the Report of the Audit Committee on pages 43
to 45. In addition, further details about our corporate governance
are provided in the document entitled ‘The Governance of Unilever’
which can be found on our website.

www.nyse.com/index

www.sec.gov

Governance ReportAnnual Report on Form 20-F 2018

REPORT OF THE AUDIT COMMITTEE

COMMITTEE MEMBERS AND ATTENDANCE

John Rishton Chair
Nils Andersen
Judith Hartmann

ATTENDANCE

8/8
8/8
8/8

This table shows the membership of the Committee together with
their attendance at meetings during 2018. If Directors are unable to
attend a meeting, they have the opportunity beforehand to discuss any
agenda items with the Committee Chair. Attendance is expressed as the
number of meetings attended out of the number eligible to be attended.

HIGHLIGHTS OF 2018

• Annual Report and Accounts
• Tax regulations, provisions and disclosure
• Information security, including Cyber, and IT resilience
• Supply Chain flexibility and continuity of supply
• Accounting for significant Mergers and Acquisitions
• Acquisition Review
• Spreads Disposal
• IFRS 15 ‘Revenue from Contracts with Customers’

and IFRS 16 ‘Leases’

PRIORITIES FOR 2019

• Tax regulations, provisions and disclosure
• Information Security, including Cyber, and IT resilience
• IFRS 16 ‘Leases’
• Accounting for significant Mergers and Acquisitions

MEMBERSHIP OF THE COMMITTEE
The Audit Committee is comprised only of independent Non-Executive
Directors with a minimum requirement of three such members. It is
chaired by John Rishton and the other members are Nils Andersen
and Judith Hartmann. For the purposes of the US Sarbanes-Oxley Act
of 2002 John Rishton is the Audit Committee’s financial expert. The
Boards have satisfied themselves that the current members of the
Audit Committee are competent in financial matters and have recent
and relevant experience. Other attendees at Committee meetings
(or part thereof) were the Chief Financial Officer, Chief Auditor, EVP
Financial Control, Risk Management, Pensions & Sustainability,
Chief Legal Officer and Group Secretary and the external auditors.
Throughout the year the Committee members periodically met without
others present and also held separate private sessions with the Chief
Financial Officer, Chief Auditor and the external auditors, allowing
the Committee to discuss any issues in more detail.

ROLE OF THE COMMITTEE
The role and responsibilities of the Audit Committee are set out
in written terms of reference which are reviewed annually by the
Committee, taking into account relevant legislation and recommended
good practice. The terms of reference are contained within ‘The
Governance of Unilever’ which is available on our website at
www.unilever.com/corporategovernance. The Committee’s
responsibilities include, but are not limited to, the following matters,
and relevant issues are brought to the attention of the Boards:
• oversight of the integrity of Unilever’s financial statements;
• review of Unilever’s quarterly and annual financial statements

(including clarity and completeness of disclosure) and approval
of the quarterly trading statements for quarter 1 and quarter 3;
• oversight of risk management and internal control arrangements;
• oversight of compliance with legal and regulatory requirements;
• oversight of the external auditors’ performance, objectivity,

qualifications and independence; the approval process of non-audit
services; recommendation to the Boards of the nomination of the
external auditors for shareholder approval; and approval of their
fees, refer to note 25 on page 126;

• the performance of the internal audit function; and
• approval of the Unilever Leadership Executive (ULE) expense policy

and the review of Executive Director expenses.

In order to help the Committee meet its oversight responsibilities,
each year management organise knowledge sessions for the
Committee on subject areas within its remit. In 2018, a session was
held with Unilever Management on the acquisition of the Dollar
Shave Club, which included a briefing on the acquisition case,
recent performance, and key learnings that might be relevant for
future acquisitions. In addition, John Rishton visited the Indian MCO
in Mumbai, where the developments of routes to market, controls
automation and centralisation were reviewed and discussed in
detail. Mr Rishton also visited the Indian finance and IT hub
in Bangalore where progress being made on monitoring systems
of potential cyber threat and access controls were reviewed.

HOW THE COMMITTEE HAS DISCHARGED
ITS RESPONSIBILITIES
During the year, the Committee’s principal activities were as follows:

FINANCIAL STATEMENTS
The Committee reviewed prior to publication the quarterly financial
press releases together with the associated internal quarterly reports
from the Chief Financial Officer and the Disclosure Committee and,
with respect to the half-year and full-year results, the external
auditors’ reports. It also reviewed this Annual Report and Accounts
and the Annual Report on Form 20-F 2018. These reviews incorporated
the accounting policies and significant judgements and estimates
underpinning the financial statements as disclosed within note 1
on pages 79 to 82. Particular attention was paid to the following
significant issues in relation to the financial statements:
• revenue recognition – estimation of discounts, incentives on sales

made during the year, refer to note 2 on pages 82 to 84;
• direct tax provisions, refer to note 6 on pages 94 to 96; and
• indirect tax provisions and contingent liabilities, refer to note 19

on page 120.

Governance ReportAnnual Report on Form 20-F 2018REPORT OF THE AUDIT COMMITTEE CONTINUED

The external auditors have agreed the list of significant issues
discussed by the Audit Committee. In addition to these risks KPMG, as
required by auditing standards, also consider the risk of management
override of controls. Nothing has come to either our attention or the
attention of KPMG to suggest any material suspected or actual fraud
relating to management override of controls.

For each of the above areas the Committee considered the key facts
and judgements outlined by management. Members of management
attended the section of the meeting of the Committee where their
item was discussed to answer any questions or challenges posed
by the Committee. The issues were also discussed with the external
auditors and further information can be found on pages 67 to 74. The
Committee was satisfied that there are relevant accounting policies
in place in relation to these significant issues and management have
correctly applied these policies.

At the request of the Boards the Committee undertook to:
• review the appropriateness of adopting the going concern basis
of accounting in preparing the annual financial statements; and

• assess whether the business was viable in accordance with
the requirement of the UK Corporate Governance Code. The
assessment included a review of the principal risks facing Unilever,
their potential impact, how they were being managed, together with
a discussion as to the appropriate period for the assessment. The
Committee recommended to the Boards that there is a reasonable
expectation that the Group will be able to continue in operation
and meet its liabilities as they fall due over the three-year period
(consistent with the period of the strategic plan) of the assessment.

At the request of the Boards the Committee also considered whether
the Unilever Annual Report and Accounts 2018 was fair, balanced and
understandable and whether it provided the necessary information
for shareholders to assess the Group’s position and performance,
business model and strategy. The Committee was satisfied that, taken
as a whole, the Unilever Annual Report and Accounts 2018 is fair,
balanced and understandable.

RISK MANAGEMENT AND INTERNAL CONTROL
ARRANGEMENTS
The Committee reviewed Unilever’s overall approach to risk management
and control, and its processes, outcomes and disclosure. It reviewed:
• the Controller’s Quarterly Risk and Control Status Report, including
Code of Business Principles cases relating to frauds and financial
crimes and significant issues received through the Unilever Code
Support Line;

• the 2018 corporate risks for which the Audit Committee had oversight

and the proposed 2019 corporate risks identified by the ULE;
• management’s improvements to reporting and internal financial

control arrangements, through further automation and centralisation;

• processes related to information security, including cyber security;
• tax planning, and related risk management;
• treasury policies, including debt issuance and hedging; and
• litigation and regulatory investigations.

The Committee reviewed the application of the requirements under Section
404 of the US Sarbanes-Oxley Act of 2002 with respect to internal controls
over financial reporting. In addition, the Committee reviewed the annual
financial plan and Unilever’s dividend policy and dividend proposals.

During 2018 the Committee continued its oversight of the independent
assurance work that is performed on a number of our USLP metrics
(selected on the basis of their materiality to the USLP).

In fulfilling its oversight responsibilities in relation to risk
management, internal control and the financial statements, the
Committee met regularly with senior members of management
and is satisfied with the key judgements taken.

INTERNAL AUDIT FUNCTION
The Committee reviewed Corporate Audit’s audit plan for the year
and agreed its budget and resource requirements. It reviewed interim
and year-end summary reports and management’s response. The
Committee engaged an independent third party to perform an
effectiveness review of the function. The review concluded that the
function is compliant with the IIA (Chartered Institute of Internal
Auditors) Standards in all material aspects. The Committee also
carried out an evaluation of the performance of the internal audit
function and was satisfied with the effectiveness of the function. The
Committee met independently with the Chief Auditor during the year
and discussed the results of the audits performed during the year.

AUDIT OF THE ANNUAL ACCOUNTS
KPMG, Unilever’s external auditors and independent registered public
accounting firm, reported in depth to the Committee on the scope and
outcome of the annual audit, including their audit of internal controls
over financial reporting as required by Section 404 of the US Sarbanes-
Oxley Act of 2002. Their reports included audit and accounting matters,
governance and control, and accounting developments.

The Committee held independent meetings with the external auditors
during the year and reviewed, agreed, discussed and challenged
their audit plan, including their assessment of the financial reporting
risk profile of the Group. The Committee discussed the views
and conclusions of KPMG regarding management’s treatment of
significant transactions and areas of judgement during the year.
The Committee considered these views and comments and is satisfied
with the treatment in the financial statements.

EXTERNAL AUDITORS
KPMG have been the Group’s auditors since 2014 and shareholders
approved their re-appointment as the Group’s external auditors at the
2018 AGMs. On the recommendation of the Committee, the Directors
will be proposing the re-appointment of KPMG at the AGMs in May 2019.

Both Unilever and KPMG have safeguards in place to avoid the
possibility that the external auditors’ objectivity and independence
could be compromised, such as audit partner rotation and the
restriction on non-audit services that the external auditors can
perform as described below. Both the KPMG partners with overall
responsibility for the audit of NV and PLC will rotate off the assignment
after completion of the 2018 year-end financial statements. One of the
new partners already has experience of the Unilever global audit, and
the other partner underwent an induction programme through much
of this year-end to ensure a smooth transition. KPMG has issued a
formal letter to the Committee outlining the general procedures to
safeguard independence and objectivity, disclosing the relationship
with the Company and confirming their audit independence.

Each year, the Committee assesses the effectiveness of the external
audit process which includes discussing feedback from the members
of the Committee and stakeholders at all levels across Unilever.
Interviews are also held with key senior management within both
Unilever and KPMG.

The Committee also reviewed the statutory audit, audit related and
non-audit related services provided by KPMG and compliance with
Unilever’s documented approach, which prescribes in detail the
types of engagements, listed below, for which the external auditors
can be used:
• statutory audit services, including audit of subsidiaries;
• audit related engagements – services that involve attestation,
assurance or certification of factual information that may be
required by external parties;

• non-audit related services – work that our external auditors

are best placed to undertake, which may include:
• audit and assurance certificates / statements
• bond issue comfort letters
• internal control reviews.

Governance ReportAnnual Report on Form 20-F 2018Unilever has for many years maintained a policy which prescribes
in detail the types of engagements for which the external auditors
can be used and prohibits several types of engagements, including:
• bookkeeping or similar services;
• design and/or implementation of systems or processes related

to financial information or risk management;

• valuation, actuarial and legal services;
• internal audit;
• broker, dealer, investment adviser or investment bank services;
• transfer pricing advisory services
• staff secondments of any kind;
• Payroll tax;
• Customs duties; and
• Tax services (except in exceptional and rare circumstances such

as where they are the only firm able to provide the service).

All audit related engagements over €250,000 and non-audit related
engagements over €100,000 required specific advance approval by
the Audit Committee Chairman. The Committee further approved all
engagements below these levels which have been authorised by the
EVP Financial Control, Risk Management, Pension & Sustainability.
These authorities are reviewed regularly and, where necessary,
updated in the light of internal developments, external developments
and best practice. Since the appointment of KPMG in 2014 to 2016
the level of non-audit fees has been below 7% of the annual audit fee.
In 2017 and 2018 the level of non-audit fees has been higher at 41%
and 31% respectively due to assurance work relating to the disposal
of our Spreads business and the Simplification project.

The Committee confirms that the Group is in compliance with The
Statutory Audit Services for Large Companies Market Investigation
(Mandatory use of Competitive Tender Processes and Audit Committee
Responsibilities) Order 2014. The last tender for the audit of the
annual accounts was performed in 2013.

EVALUATION OF THE AUDIT COMMITTEE
As part of the internal Board evaluation carried out in 2018, the Boards
evaluated the performance of the Committee. The Committee also
carried out an assessment of its own performance in 2018. While
overall the Committee members concluded that the Committee is
performing effectively, the Committee agreed that to further enhance
its effectiveness it needed to ensure the Committee members
continued to develop their knowledge of the Group’s operations
which would involve further knowledge sessions and site visits.

John Rishton
Chair of the Audit Committee

Nils Andersen
Judith Hartmann

Governance ReportAnnual Report on Form 20-F 2018REPORT OF THE CORPORATE
RESPONSIBILITY COMMITTEE

COMMITTEE MEMBERS AND ATTENDANCE

Strive Masiyiwa (Member since April 2017) Chair
Youngme Moon
Feike Sijbesma

ATTENDANCE

4/4
4/4
3/4

HIGHLIGHTS OF 2018

• Competition and anti-bribery compliance
• Third-party compliance
• Product quality and safety
• Unilever Sustainable Living Plan (USLP)

PRIORITIES FOR 2019

• Compliance with Unilever policies on fair competition and

anti-bribery and requirements for third parties

• Product quality and safety
• Unilever Sustainable Living Plan (USLP) including plastic packaging

ROLE OF THE COMMITTEE
The Corporate Responsibility Committee oversees Unilever’s conduct
as a responsible global business. As the Unilever Sustainable Living
Plan (USLP) is at the heart of Unilever’s vision to grow its business
whilst decoupling its environmental footprint from its growth and
increasing its positive social impact, the Committee tracks the
progress and potential risks associated with the USLP.

The Committee is also charged with ensuring that Unilever’s reputation is
protected and enhanced. Therefore a central element of its role is the need to
identify any external developments that are likely to have an influence upon
Unilever’s standing in society, and to ensure that appropriate and effective
communications policies are in place to support the company’s reputation.

The Committee’s discussions are informed by the experience of the senior
leaders invited to the Committee to share their views on a variety of topics
and external trends. Many of these leaders are members of the Unilever
Sustainable Living Plan Steering Team, the group of senior executives
accountable for driving sustainable growth through Unilever’s brands and
operations. These discussions ensure the Committee stays abreast of current
and emerging trends and any potential risks arising from sustainability
issues. This enables the Boards to draw on a well-rounded view of issues.

During 2018 the Committee reviewed its terms of reference and
approved minor changes to the terms.

The Committee’s responsibilities are complemented by those of the Audit
Committee, which is responsible for reviewing significant breaches of the
Code of Business Principles as part of its remit to review risk management
and for overseeing the independent assurance programme for the USLP.

The Committee’s terms of reference are set out www.unilever.com/
corporategovernance and details of the USLP Steering Team at
www.unilever.com/sustainable-living/our-strategy/our-sustainability-
governance/

MEMBERS OF THE COMMITTEE
The Corporate Responsibility Committee comprises three Non-Executive
Directors: Strive Masiyiwa (Chair), Feike Sijbesma and Youngme Moon. The
Chief Marketing & Communications Officer and the Chief Sustainability
Officer attend the Committee’s meetings. The Chief Business Integrity
Officer also attends to present Unilever’s company report that covers
cases under Unilever's Code of Business Principles (the Code) as well
as updates on third-party compliance, product quality and safety.

MEETINGS
Meetings are held quarterly and ad hoc as required – four were held
in 2018. The Committee Chairman is responsible for reporting the
findings from meeting to the Boards, thus ensuring that the Boards
can fulfil their oversight responsibilities.

Following the Committee’s terms of reference and Unilever’s
principal risks and priorities, the Committee’s agenda covers the
Code and third-party compliance, alongside litigation, occupational
and product safety, the USLP and corporate reputation as well as a
range of strategic and current issues. In addition to the areas listed
below, in 2018 the Committee also reviewed topics such as media
communications, the process for integrating business acquisitions
and progress on alternatives to animal testing.

CODE OF BUSINESS PRINCIPLES
The Code and associated Code Policies set out the standards
of conduct expected of all Unilever employees in their business
endeavours. Compliance with these is an essential element in
ensuring Unilever’s continued business success and is identified
as an ethical and legal and regulatory risk to Unilever.

While the Chief Executive Officer is responsible for implementing
these principles, supported by the Global Code and Policy Committee,
the Corporate Responsibility Committee is responsible for oversight
of the Code and Code Policies, ensuring that they remain fit for
purpose and are appropriately applied. It maintains close scrutiny of
the mechanisms for implementing the Code and Code Policies. This
is vital as compliance is essential to promote and protect Unilever’s
values and standards, and hence the good reputation of the Group.
At each meeting the Committee reviews an analysis of investigations
into non-compliance with the Code and Code Policies and is alerted
to any trends arising from these investigations.

The Chief Legal Officer and Group Secretary reports to the Committee
on litigation and regulatory matters which may have a reputational
impact including environmental issues, bribery and corruption
compliance and competition law compliance. The Committee studied
how compliance was achieved during 2018. For further information
please see notes 19 and 20 to the consolidated financial statements.

As another of its other priorities in 2018, the Committee also scrutinised
the mechanisms for anti-bribery compliance. The primary mechanism
is to understand the profiles of the markets Unilever operates in and
to ensure that there are robust internal and third-party compliance
programmes in place. These are complemented by training for all
employees in tandem with advanced capacity building for those in the
Business Integrity and Legal functions.

PRINCIPLES AND STANDARDS FOR THIRD PARTIES
The Committee retained its focus on third-party compliance in 2018.
Extending Unilever’s values to third parties remains a priority, not only
to generate continued responsible growth and a positive social impact
on the industry, but to counter the significant risk that non-compliance
by third parties can pose, particularly in the context of increasing
regulation around the world.

The Committee tracks compliance with Unilever’s Responsible
Sourcing Policy (RSP) for suppliers and its Responsible Business
Partner Policy (RBPP) for customers and distributors. Together they
set out Unilever’s requirements that third parties conduct business
with integrity, openness and respect for universal human rights and
core labour principles. Sourcing 100% of Unilever’s procurement
spend in line with the RSP is also a target within the USLP.

The policies enable Unilever to evaluate risk and provide the right
measures to address the diversity of market conditions in which it
operates and the range of third parties it works with. The Committee
was briefed on progress. For the RSP, this detailed the number of
suppliers making a positive commitment to the policy, greater alignment
on industry standards via the process of mutual recognition and a
substantial increase in site audits and resulting corrective action plans.
Enhanced anti-bribery and corruption screening was also put in place.
The training and enhancements developed for the RBPP include
new IT tools launched in over 180 countries, simpler assessment
processes, enhanced due diligence and risk mitigation plans.

Governance ReportAnnual Report on Form 20-F 2018SAFETY
Sustainable growth is only achieved if Unilever also grows responsibly
– by providing safe, high quality products, and protecting employees
and the people and communities in which it operates. Safe and high
quality products are one of Unilever's principal risks, see page 31.

Occupational safety continues to be the personal and everyday responsibility
of all those working at Unilever. Reducing Unilever’s Total Recordable
Frequency Rate (TRFR) is also a target within the USLP. In 2018 TRFR
continued to decrease – from 0.89 accidents per 1 million hours worked in
2017 to 0.69 in 2018 (measured 1 October 2017 to 30 September 2018).

In factories, Unilever’s World Class Manufacturing programme
hardwires safety into all aspects of the production process – by
enabling good design principles, engineering and operating practices
to be applied from the start of any project. This focus drove a reduction
of 39.5% in process safety incidents in 2018. Capacity building and
leadership also improved safety for contractors (those who work on
Unilever sites under the direct supervision of their own management),
reducing their recordable injuries by half 51% over 2014-2018
(measured by Lost-Time Injuries Frequency Rate, LTIFR).

Unilever’s approach to product safety is based on risk identification
and mitigation. This approach covers all aspects of the value chain –
from development, sourcing, manufacture and transport to consumer
use and disposal of the product – and is centred on the application of
rigorous standards based on sound science and the principle of Safe
by Design and Safe in Execution. Thanks to a strong focus on product
quality, a significant improvement was achieved in 2018 with potentially
serious marketplace incidents reduced by 40%. Over 2017-2018,
potentially serious marketplace incidents originating in manufacturing
have been reduced by 88% and those originating in suppliers of raw
and packing materials have been halved.

HUMAN RIGHTS
By addressing strategic human rights issues and helping the business
tackle and prevent endemic abuses in global value chains, Unilever is
seeking to deliver a positive social impact alongside business growth.

Unilever’s human rights aims are part of the Enhancing Livelihoods
goal of the USLP and human rights are included within the company's
sustainability and ethical risks. See pages 29 and 33.

In 2018 Unilever continued to embed human rights with a focus on its
eight salient issues (ie those at risk of the most severe negative impact
through Unilever’s activities or business relationships). These are set out in
Unilever’s Human Rights Report 2017, with an update on further progress
at the end of 2018. The Committee noted that Unilever’s approach to this
work is sophisticated and that while there is still much to do, it is making
good progress in this complex field. See page 14 for more.

PALM OIL
Palm oil is one of Unilever’s most significant raw materials and Unilever
is one of the world’s major buyers of palm oil. Alongside sustainability and
supply chain, Unilever has identified climate change as one of its principal
risks (see page [29]) and is committed to eliminating the deforestation
associated with unsustainable palm oil production. Securing supplies of
sustainable palm oil is therefore a critical element in Unilever’s business
and climate strategy and represents a significant target in the USLP.

The Committee was briefed on plans for driving transformational
change in the palm oil sector. Unilever’s Sustainable Palm Oil Sourcing
Policy has a focus on the implementation of No Deforestation, No Peat,
No Exploitation of people or communities (NDPE) commitments by
2020. However, implementation and enforcement remain challenging.
To support the transformation of the sector and the implementation of
its Policy, Unilever is investing in multiple initiatives. One example is the
&Green Fund which is designed to kick-start investments in deforestation-
free agriculture in countries that are working to reduce deforestation and
peat degradation. Unilever was announced as the first investor. The Fund
aims to protect over 5 million hectares of forest and peatlands by 2020, by
de-risking private capital investments into large-scale deforestation-free
production, protection and inclusion initiatives. With an aim to trigger $1.6
billion in private capital investments, the Fund is an opportunity to jointly
shape solutions to mitigate deforestation and a good illustration of the
collaborative, transformational approaches the company is seeking to scale.

To promote transparency and traceability of palm oil sourcing,
in 2018 Unilever was also the first consumer goods company to
publish the names of its suppliers and a map of the 1,400 palm
oil mills in its extended supply chain on its website. This was
accompanied by a more visible grievance mechanism to facilitate
the reporting of issues of non-compliance in the supply chain.

Another important step was an industry-first partnership with
Indonesian government-owned palm oil plantation company PT
Perkebunan Nusantara (PTPN). The partnership is designed to
support local mills and smallholder farmers to produce palm
oil according to the NDPE standards that are key to multi-sector
efforts to transform the palm oil industry.

PACKAGING WASTE
Packaging waste, particularly post-consumer plastic packaging waste
in oceans and waterways, has never been higher on the global agenda
than in 2018. Plastic packaging now sits alongside climate change
as a major environmental challenge and is identified as a risk for
Unilever's business, see page 30.

Unilever has reduced the waste associated with the disposal of its
products by 31% since 2010 (measured as impact per consumer use,
towards a target of 50%) and is making strong progress in its own
operations and product design. However, the challenge for post-
consumer waste is in having the right infrastructure in place to ensure
materials are collected and processed, while encouraging consumers
to segregate and recycle them.

To support its specific, time-bound targets, at the beginning of 2018
Unilever introduced a new three-part framework designed to sharpen
thinking on plastic packaging and innovation: i) Less Plastic means using
lighter, stronger and better materials which have a lower environmental
impact; ii) Better Plastic entails eliminating problematic materials and
using recyclable plastics with a minimum 25% recycled content; iii) No
Plastic involves using alternative materials, new packaging formats and
alternative models of consumption such as vending – to help reduce use
of single-use plastics through innovation, behaviour change and new
business models. See page 15 for more.

MCIP
Unilever’s Reward Framework includes the Management Co-investment
Plan (MCIP), a long-term incentive plan that is linked to financial and
USLP performance (see page 53). Corporate Responsibility Committee
members shared their views on the context and progress of the USLP
and sustainability initiatives with the Compensation Committee to help
inform its recommendation on MCIP.

EVALUATION OF THE CORPORATE RESPONSIBILITY
COMMITTEE
As part of the internal board evaluation carried out in 2018, the Boards
evaluated the performance of the Committee. The Committee also
carried out an assessment of its own performance in 2018. While
overall the Committee members concluded that the Committee is
performing effectively, the Committee has agreed to further enhance
its effectiveness by keeping close track on progress on the ambitious
Unilever Sustainable Living Plan. This will ensure the Group maintains
its sustainability momentum and leadership.

Strive Masiyiwa
Chair of the Corporate Responsibility Committee

Youngme Moon
Feike Sijbesma

Further details on the USLP will be set out in Unilever’s online
Sustainable Living Report 2018, to be published in April 2019.

Governance ReportAnnual Report on Form 20-F 2018REPORT OF THE NOMINATING AND
CORPORATE GOVERNANCE COMMITTEE

COMMITTEE MEMBERS, MEMBERSHIP STATUS
AND ATTENDANCE

Marijn Dekkers Chair
Laura Cha
Feike Sijbesma (Chair until May 2018)

ATTENDANCE

5/5
5/5
5/5

HIGHLIGHTS OF 2018

• Continued focus on development of a strong pipeline of

potential Non-Executive and Executive Director candidates
and managing succession

• CEO succession
• Follow up on actions agreed from the 2017 external

Board evaluation

• Continued focus on Board Diversity

PRIORITIES FOR 2019

• Continued focus on development of a strong pipeline

of potential Non-Executive and Executive Director candidates
and managing succession, with focus on Board Diversity

• Follow up on actions agreed from the 2018 external

Board evaluation

• Continued focus on Corporate Governance

ROLE AND MEMBERSHIP OF THE COMMITTEE
The Nominating and Corporate Governance Committee is responsible
for evaluating the balance of skills, experience, independence, diversity
and knowledge on the Boards and for drawing up selection criteria,
ongoing succession planning and appointment procedures for both
internal and external appointments. It also has oversight of all matters
relating to corporate governance and brings any issues in this respect
to the attention of the Boards.

The Committee’s terms of reference are set out in ‘The
Governance of Unilever’ which can be found on our website at
www.unilever.com/corporategovernance. During the year, the
Committee reviewed its own terms of reference to determine
whether its responsibilities are properly described. The amended
terms became effective on 1 January 2019.

The Committee is comprised of two Non-Executive Directors and the
Chairman. The Group Secretary acts as secretary to the Committee.
Other attendees at Committee meetings in 2018 (or part thereof) were
the Chief Executive Officer and the Chief HR Officer.

In 2018 the Committee met five times. At the start of the year the
Committee considered the results of the Committee’s annual
self-evaluation for 2017 and its priorities for the year and used
these to help create an annual plan for meetings for 2018.

APPOINTMENT AND REAPPOINTMENT OF DIRECTORS
AND ULE
Reappointment: All Directors (unless they are retiring) are
nominated by the Boards for re-election at the AGMs each year on
the recommendation of the Committee who, in deciding whether
to nominate a Director, take into consideration the outcomes of the
Chairman’s discussions with each Director on individual performance,
the evaluation of the Boards and its Committees and the continued
good performance of individual Directors. Non-Executive Directors
normally serve for a period of up to nine years. The average tenure
of the Non-Executive Directors who have retired from the Boards over
the past ten years has been seven years. The schedule the Committee
uses for orderly succession planning of Non-Executive Directors can
be found on our website at unilever.com/committees. Ann Fudge did
not put herself forward for re-election at the AGMs in May 2018. She
had served nine years on the Boards. The Committee proposed the
reappointment of all other Directors and the Directors were appointed
by shareholders by a simple majority vote at the AGMs.

The Committee also recommends to the Boards candidates for election
as Chairman and Senior Independent Director/Vice-Chairman. After
being reappointed as Non-Executive Directors at the 2018 AGMs,
Youngme Moon became the Senior Independent Director/Vice-Chairman
and John Rishton and Strive Masiyiwa remained Chairs of the Audit
Committee and the Corporate Responsibility Committee respectively.
Vittorio Colao became Chair of the Compensation Committee and Marijn
Dekkers became Chair of the Nominating and Corporate Governance
Committee .

Succession Planning and Appointment: In consultation with the
Committee, the Boards review the adequacy of succession planning
processes and the actual succession planning at Board level.

When recruiting, the Committee will take into account the profile
of Unilever’s Boards of Directors set out in ‘The Governance of
Unilever’ which is in line with the recommendations of applicable
governance regulations and best practice. Pursuant to the profile
the Boards should comprise a majority of Non-Executive Directors
who are independent of Unilever, free from any conflicts of interest
and able to allocate sufficient time to carry out their responsibilities
effectively. With respect to composition and capabilities, the Boards
should be in keeping with the size of Unilever, its strategy, portfolio,
consumer base, culture, geographical spread and its status as a
listed company and have sufficient understanding of the markets
and business where Unilever is active in order to understand the key
trends and developments relevant for Unilever. The objective pursued
by the Boards is to have a variety of nationality, race, gender, ethnicity
and relevant skills and expertise. It is important that the Boards have
sufficient global experience and outlook, and financial literacy. As
discussed later in this Report, Unilever currently has diverse Boards in
terms of gender and nationality and, as can be seen from the subset of
the mapping that this Committee has done of the current Non-
Executive Directors’ skills and capabilities on page 3, composition and
capabilities in line with our Board profile described above.

2018 appointments: The Committee recommended to the Boards to
nominate Andrea Jung as a new Non-Executive Director at the 2018
AGMs taking into account the views of Egon Zehnder. In May 2018 the
AGMs resolved to appoint Andrea Jung with immediate effect. She
has further strengthened the Boards in the areas of consumer/FMCG
insights, sales & marketing and leadership of global entities.

Upon Paul Polman's notice of retirement as CEO and Executive
Director effective 31 December 2018, the Committee recommended
to appoint Alan Jope as his successor. In forming its recommendation,
the Committee had reviewed the selection criteria which had been
developed as part of succession planning and the extensive slate of
potential candidates and their respective capabilities by reference
to those criteria. Considering Alan Jope's skills set, depth of
understanding and experience of Unilever and the sector and markets
in which the Group operates, as well as his track record of delivering
high quality performance, the Committee recommended that Alan
Jope be nominated by the Boards as the new CEO effective 1 January
2019, which appointment was approved by the Board of Directors
in November 2018. Alan Jope will be proposed to be appointed as
Executive Director at the AGMs in May 2019.

Governance ReportAnnual Report on Form 20-F 2018Unilever Leadership Executive (ULE) Succession Planning and
Appointment: In consultation with the Committee, the Boards
review the adequacy of succession planning processes and the
actual succession planning at ULE level. In 2018 the Boards were
consulted by the Chief Executive Officer upon the selection criteria
and appointment procedures for senior management changes.

DIVERSITY POLICY
Unilever has long understood the importance of diversity within
our workforce because of the wide range of consumers we connect
with globally. This goes right through our organisation, starting
with the Boards. Unilever’s Board Diversity Policy, which is reviewed
by the Committee each year, is reflected on our website at
www.unilever.com/boardsofunilever. The Boards feel that, while
gender and ethnicity are an important part of diversity, Unilever
Directors will continue to be selected on the basis of their wide-
ranging experience, backgrounds, skills, knowledge and insight.

In 2018 the Committee also reviewed and considered relevant
recommendations on diversity and remains pleased that 45%
of our Non-Executive Directors are women and that there are
nine nationalities represented on the Boards.

CORPORATE GOVERNANCE DEVELOPMENTS
The Committee reviews relevant proposed legislation and changes
to relevant corporate governance codes at least twice a year.
It carefully considers whether and how the proposed laws/rules
would impact upon Unilever and whether Unilever should participate
in consultations on the proposed changes. For example, during 2018,
developments of the Dutch and the UK Corporate Governance Codes,
the EU Shareholders Rights Directive and Boardroom diversity were
discussed by the Committee.

EVALUATION
As part of the Board evaluation carried out in 2018, the Boards
evaluated the performance of the Committee. The Committee also
carried out an assessment of its own composition and performance
in 2018. The Committee members concluded that the Committee
is performing effectively.

Marijn Dekkers
Chair of the Nominating and Corporate
Governance Committee

Laura Cha
Feike Sijbesma

Governance ReportAnnual Report on Form 20-F 2018DIRECTORS' REMUNERATION REPORT

COMPENSATION COMMITTEE
MEMBERS AND ATTENDANCE

HIGHLIGHTS OF 2018

ATTENDANCE

• Review and adaptation of Unilever’s new Reward Framework

Vittorio Colao Chair (since May 2018)
Marijn Dekkers
Mary Ma
Andrea Jung (Member since May 2018)
Ann Fudge (Member and Chair until May 2018)

5/5
5/5
5/5
2/2
3/3

for our Executive Directors, with an emphasis on alignment with
strategy and long-term value creation, personal investment in
Unilever shares, and simplified variable pay with safeguards to
prevent high levels of pay not justified by performance.

• Constructive engagement with shareholders and shareholder
representative bodies during the year both before and after
the implementation of this new Reward Framework for our
Executive Directors.

• Executive Director changes, with the announcement of Paul

Polman's retirement and his replacement by Alan Jope as CEO.

LETTER FROM THE CHAIR

DEAR SHAREHOLDERS,
As the new Compensation Committee Chair, I am pleased to present
Unilever’s Directors’ Remuneration Report (DRR) 2018. In the
sections below, I set out the Committee’s activities in 2018, including
remuneration outcomes for 2018 and describe our Executive Director
changes. I also reflect on the feedback we received on our new
Remuneration Policy which was approved at the 2018 AGMs and detail
our remuneration decisions for 2019.

BUSINESS PERFORMANCE AND REMUNERATION
OUTCOMES FOR 2018

ANNUAL BONUS
In determining the Underlying Sales Growth (USG) target for the
annual bonus plan we assumed a full year of Argentinian price growth.
Due to the application of IAS 29 hyperinflationary accounting from
1 July and the consequent removal of Argentinian pricing in our
reported USG of 2.9%, we have included the Argentinian pricing to give
a sales growth of 3.4% for the bonus calculation. Underlying Operating
Margin (UOM) improved by 90bps to 18.4% driven by 50bps gross
margin improvement and 30 bps of overheads reduction reflecting
both the impact of our innovations and ongoing savings programmes.
In 2018 we delivered over €2 billion of savings. In determining the
Free Cash Flow (FCF) target for the annual bonus plan we assumed
that Unilever would retain the working capital balances related to the
Spreads business at closing. However as part of the deal we received
payment for the working capital, thus the reported FCF of €5.0 billion
was adjusted to €5.6 billion for the bonus calculation to both include
the cash tax on disposals (€0.2 billion) per the definition and cash
received (€0.4 billion) in respect of the transfer of working capital
to KKR at closing.

These results are solid, demonstrating Unilever’s ability to continue
to grow profitably and keep generating value in challenging market
conditions. Performance against 2018 targets resulted in an outcome
for the 2018 annual bonus of 76% of target. Accordingly, having assessed
the quality of results and satisfied itself that this outcome reflected
the underlying performance of the business in 2018, the Committee
confirmed a bonus of 76% of target opportunity (114% of Fixed Pay
against a target of 150%) for the former CEO, Paul Polman, and of 76%
of target opportunity (91% of Fixed Pay against a target of 120%) for the
CFO, Graeme Pitkethly, as detailed on page 55.

GLOBAL SHARE INCENTIVE PLAN (GSIP) AND MANAGEMENT
CO-INVESTMENT PLAN (MCIP)
Unilever has delivered consistent top and bottom line growth with
USG at an average of 3.4% over the past three years, and margin
improvement at an average of +83 basis points. Unilever also
generated strong cumulative operating cash flow of €19.1 billion and
finished 5th out of 19 in our peer group for total shareholder return
(TSR). This performance against 2016-2018 targets resulted in an
outcome for GSIP and MCIP of 132%. Having confirmed that this
outcome reflected the underlying performance of the business over

the plan duration, the Committee confirmed a vesting ratio of 132%
(corresponding to 66% of maximum for GSIP and 88% of maximum for
MCIP, which is capped at 150% for the Executive Directors), as detailed
on page 56.

The Committee did not apply any discretionary adjustments to annual
bonus or GSIP/MCIP outcomes.

EXECUTIVE DIRECTOR CHANGES
Paul Polman stepped down from the role of CEO and Executive
Director on 31 December 2018 and will retire from employment on
2 July 2019. He will continue to be paid in line with our Remuneration
Policy during this period. Paul was awarded a bonus for 2018, and his
GSIP and MCIP 2016-2018 awards vested on 11 February 2019, as set
out below. His other inflight long-term incentive awards will vest on
their normal timeframe based on Unilever’s performance and will be
pro-rated to his retirement date. No new incentive awards (neither
bonus nor MCIP) will be made to Paul Polman. Further details are
set out on page 60.

Alan Jope has been appointed CEO effective 1 January 2019 and will
be proposed for election as Executive Director to the Boards at the
AGMs in May 2019. Alan Jope’s Fixed Pay for his role as CEO has been
set at €1,450,000, with annual bonus and MCIP opportunity in line with
our Remuneration Policy. Further details of Alan Jope’s remuneration
package are set out on page 52.

UNILEVER’S REMUNERATION POLICY
Unilever’s Remuneration Policy is based on simplicity and
transparency with just three elements: Fixed Pay, annual bonus and
the MCIP through which executives must invest their bonus (after
having paid tax) in Unilever shares to receive match shares that may
vest based on Unilever’s performance over the following four years.

The Policy was approved at our May 2018 AGMs with a significant minority
voting against. Through the year we undertook extensive consultation
with our shareholders and their representative bodies to ensure we fully
understood the concerns that some investors had with our Policy.

I was very encouraged that most shareholders appreciated the
direction our Remuneration Policy is taking in terms of simplification,
increased share ownership commitment and lengthened timeframes
for performance measurement. However, the extent of the changes
we made over the previous two years clearly led to an impression of
complexity, which we underestimated.

The Committee carefully considered all of the feedback received, both
negative and positive. I summarise below the principal issues together
with the Committee’s decisions, highlighting where we have made
changes to the implementation of the Remuneration Policy to reflect
shareholders’ feedback and where we concluded that the Policy supports
the achievement of Unilever’s strategy and shareholders’ interests.

• Increase of 2018 fixed pay, annual bonus and maximum pay

opportunity of former CEO Paul Polman:
This concern was largely addressed by Paul’s decision not to accept
the proposed 5% increase in Fixed Pay. Alan Jope has been appointed
CEO at a Fixed Pay level 14% lower than Paul’s previous rate.

Governance ReportAnnual Report on Form 20-F 2018
www.unilever.com/investor-relations/agm-and-corporate-
governance/ (Statement on Remuneration Policy)

In addition, the Committee retains the additional safeguard
outlined in the 2017 DRR: if the result of combined annual bonus
and MCIP performance outcomes exceeds 75% of the maximum
total opportunity (excluding the effects of share price change and
dividends on share awards) the Committee will review rigorously the
quality and sustainability of underlying performance and then may
apply its discretion to reduce or cap the MCIP performance outcome
applicable to the Executive Directors. For Alan Jope, this ‘handbrake
test’ consequently would apply when his total pay level reaches
approximately €8.8m (a level more than 20% below Paul Polman’s
previous maximum pay opportunity), as indicated in the CEO Pay
Comparison table below.

The Committee has decided to apply no increases to Executive
Directors’ Fixed Pay levels for 2019. It is the Committee’s intention
to review remuneration levels and award Fixed Pay increases in
future years subject to the development and performance of the
Executive Directors in their role.

CEO Pay Comparison table:

CEO Target Total Pay €m p.a.

Alan
Jope

Paul
Polman

Paul Polman
Previous Policy

Fixed Pay

Annual Bonus

MCIP* Match Share Award

GSIP Share Award

1.450

2.175

1.689

2.534

Total

5.800

6.757

Personal MCIP* Investment
in Unilever shares

1.450

1.689

1.487

0.892

2.478

6.546

0.892

CEO Maximum Total Pay €m p.a.

Alan
Jope

Paul
Polman

Paul Polman
Previous Policy

Fixed Pay

Annual Bonus

MCIP* Match Share Award

GSIP Share Award

1.450

3.263

6.525

1.689

3.801

7.602

1.689

2.478

2.230

4.956

Total

11.238

13.092

11.353

Personal MCIP* Investment
in Unilever shares

75% Safeguard
Test ('Handbrake')

* MCIP at maximum investment

2.175

2.534

1.652

8.791

10.241

• Consolidation of pension and allowances into a single Fixed Pay

number: The consolidation of all fixed pay elements into one single
number provides simplicity and transparency and since 2017 applies
across the Unilever Leadership Executive (ULE) and our ‘Top 100’
managers. We continue to position Fixed Pay levels for our Executive
Directors conservatively against our peer group. The Committee will
therefore continue with the consolidated Fixed Pay approach.

• Mandatory minimum threshold of 33% of bonus investment into

MCIP: In response to feedback received, the Committee will reintroduce
a requirement for members of the ULE, including CEO and CFO to
invest at least 33% of their bonus in Unilever shares through MCIP.

• Sustainability Progress Index assessment: Many investors wanted
to know how we will assess our progress on sustainability, which
was introduced as a performance measure for MCIP from 2017.
The Committee will provide an annual progress report in the DRR
providing transparency on the assessment of the Sustainability
Progress Index, based on a joint assessment conducted with the
Corporate Responsibility Committee. On page 53 we report the
update for 2017 and 2018 performance.

• Buy-out awards for Executive Directors: The Committee’s intention

in normal circumstances is to use only transition awards when
hiring executive directors from outside Unilever to replace awards
forgone. The Committee intends to state this position formally in the
Remuneration Policy when it is next renewed.

Overall, the Committee has concluded that the Remuneration Policy
supports the reshaping of our business and acceleration of our
transformation as we move towards achieving our strategic 2020
objectives. In implementing the Policy, the Committee will continue to
seek investors’ feedback and review any concerns. We will ensure that
the Policy continues to provide strong and clear links between Unilever’s
business strategy, shareholders’ interests and executives’ incentives.

During the coming year, the Committee will continue to monitor
developments in remuneration policy and prevailing market practice,
including the implementation of the changes to the UK Corporate
Governance Code and remuneration reporting regulations. We value
a continuing dialogue with institutional investors, employees and other
stakeholders to make sure that our Remuneration Policy remains fit
for purpose and aligned to support the delivery of Unilever’s strategy.

ENGAGING WITH EMPLOYEES
The Committee is aware of and takes into consideration reward conditions
elsewhere in the Group. We are proud of the Framework for Fair
Compensation introduced by Unilever as part of the USLP, which includes
the target to achieve living wage compliance for all our employees globally
by 2020, a goal we are on track to complete earlier than planned:

www.unilever.com/sustainable-living/the-sustainable-living-
plan/enhancing-livelihoods/fairness-in-the-workplace/fair-
compensation/

The Committee welcomes recent UK corporate governance
developments, which apply from 1 January 2019 and we are working
towards implementing and reporting against these new standards. We
have decided to adopt early the key features of the new remuneration
reporting regulations including disclosure of the CEO pay ratio,
which can be found on page 63. We already comply with many of the
principles of the new UK Corporate Governance Code.

The Boards decided to share the responsibility for workforce
engagement among all Non-Executive Directors as a collective point of
contact. We have developed a number of initiatives to ensure that the
Non-Executive Directors are able to engage with the workforce and get
a sense of employee sentiment. These will include the chance to meet
and hear from cohorts of employees of all levels, face-to-face, allowing
for an open discussion on issues important to our employees.

We are also looking at ways we can use technology to give the Committee
clear visibility of all employees’ pay across the Unilever Group, so that the
Committee can better consider colleagues’ pay and their views on it to
provide for the best possible alignment with Executive pay.

IMPLEMENTATION REPORT
The Annual Remuneration Report overleaf describes the
implementation of our Remuneration Policy in 2018 and our
remuneration decisions for 2019. Both PLC and NV shareholders will
have an advisory vote on the implementation of our Remuneration
Policy at the 2019 AGMs.

On behalf of the Committee and the entire Board, I thank all
shareholders and their representatives for the constructive
engagement in 2018 and 2019 and the valuable feedback and
suggestions. We are grateful for your continuing support and
welcome any future guidance.

Vittorio Colao
Chair of the Compensation Committee

Governance ReportAnnual Report on Form 20-F 2018DIRECTORS' REMUNERATION REPORT CONTINUED

ANNUAL REMUNERATION REPORT
The following sets out how Unilever’s remuneration policy (which was approved by shareholders at the May 2018 AGMs and is available on our
website) was implemented in 2018, and how it will be implemented in 2019.

www.unilever.com/remuneration-policy

IMPLEMENTATION OF THE REMUNERATION POLICY IN 2019 FOR OUR CEO (ALAN JOPE) AND CFO (GRAEME PITKETHLY)

ELEMENTS OF REMUNERATION

ALAN JOPE
Alan Jope became CEO on 1 January 2019. He will be proposed for election as an Executive Director of the Boards of NV and PLC at the AGMs
in May 2019. The Committee approved the remuneration package for Alan Jope set out in the table below (shown as for “CEO”), which came
into effect from 1 January 2019, and will remain unchanged if he is appointed as an Executive Director at the May 2019 AGMs. His remuneration
package is in accordance with the approved Remuneration Policy. The Committee believes that the positioning of the package represents an
acceptable balance in view of various considerations, such as Paul Polman’s package, competitive external market pay rates across Unilever’s
peer group and Alan’s previous package and experience.

ELEMENTS OF
REMUNERATION AT A GLANCE

ADDITIONAL INFORMATION

Annual Fixed Pay effective from
January 2019:
• CEO: €1,450,000
• CFO: €1,102,874

Details of the rationale for our Executive Directors' Fixed Pay amounts can be
found above and in the Chair Letter on page 51.

Implemented in line with the
2018 Remuneration Policy.

n/a

• Implemented in line with the
2018 Remuneration Policy.
• Target annual bonus of 150%
of Fixed Pay for the CEO and
120% of Fixed Pay for the CFO.

• Business Performance

Multiplier of between 0% and
150% based on achievement
against business targets over
the year.

• Maximum annual bonus is
225% of Fixed Pay for the
CEO and 180% for the CFO.

• Implemented in line with the
2018 Remuneration Policy.
• With effect from the 2018

bonus Executive Directors are
required to invest a minimum of
33% of their bonus into MCIP.
• Matching shares are awarded
based on performance up to
a maximum of 3 x matching
shares.

• MCIP award to be made on

23 April 2019, vesting
9 February 2023 (with a
requirement to hold vested
matching shares for a further
one-year retention period).

• Alan Jope and Graeme

Pitkethly both elected to
invest the maximum value of
their 2018 bonus into MCIP
investment shares, giving
a maximum value from the
matching shares for the
CEO of €1,748,972 and for
the CFO of €2,021,700.

For 2019, the Business Performance Multiplier will be based on the following
metrics:

Underlying
Sales Growth
(1/3)

Underlying Operating
Margin Improvement
(1/3)

Free Cash
Flow Growth
(1/3)

A 0% multiplier will be applied for threshold performance, and up to 150%
multiplier for maximum performance. Performance target ranges are
considered to be commercially sensitive and will be disclosed in full with
the corresponding performance outcomes retrospectively following the end
of the relevant performance year.

Performance conditions are assessed over a four-year period. The performance
conditions and target ranges for 2019 awards under the MCIP will be as follows:

MCIP 2019 AWARDS

Weighting

Min

Underlying Sales Growth
(CAGR, constant rates)

25%

1.5%

0 x matching

3 x matching

Max

5.5%

Underlying EPS growth
(CAGR, current rates)

25%

2.0%

10.0%

0 x matching

3 x matching

Return on Invested Capital
(exit year %)

25%

16.5%

20.5%

0 x matching

3 x matching

Sustainability Progress Index
(Committee assessment
of USLP progress)

25%

Evaluated basis

0 x matching

3 x matching

Performance at threshold results in no matching shares being awarded, target
performance results in an award of 1.5 x matching shares, up to a maximum
award of 3 x matching shares, with straight-line vesting between threshold
and maximum. Participants are required to hold all their own investment
shares and remain employed by Unilever for the duration of the relevant
performance period.

FIXED PAY

OTHER BENEFIT
ENTITLEMENTS

ANNUAL BONUS

MCIP

Governance ReportAnnual Report on Form 20-F 2018ELEMENTS OF
REMUNERATION AT A GLANCE

MCIP (CONTINUED)

ADDITIONAL INFORMATION

The target range for ROIC has been reduced by 50bps from the MCIP 2018-
21 cycle to reflect the dilutive impact of IFRS16 Lease Accounting. The target
range for UEPS was increased in previous MCIP cycles to reflect the benefit of
the Share Buyback programmes in 2017 and 2018 and the significant step up in
margin required to achieve an Underlying Operating Margin of 20% by 2020. The
target range has now been normalised to reflect the reduction in operational
leverage following the earlier years of margin improvement and the reduction in
benefit from the Share Buyback programmes over the 2019-2022 performance
cycle. Accordingly, the UEPS target range returns towards the levels originally
set for MCIP 2017-2020 of 5% to 10%. The range has been widened to reflect
the impact of exchange rate volatility in delivering current currency UEPS over
a four-year plan cycle. The Committee views 6% compound annual growth in
UEPS as a stretching but achievable target for 2019-2022. It should also be
noted that the Remuneration Policy provides the Committee with the ability
to adjust the formulaic outcome of MCIP by +/- 10% to reflect the underlying
performance of the business.

Performance update on Sustainability Progress Index for MCIP:
With effect from 2017, one of the performance measures for MCIP is our
progress on sustainability, measured by the sustainability progress index (SPI).
The SPI is an assessment made jointly by the Compensation Committee and the
Corporate Responsibility Committee (CRC) taking into account Unilever’s wider
progress on sustainability together with progress towards the targets in our
reported USLP scorecard. The Committees determine a numerical rating for
the previous year’s SPI in the range of zero to 200%; annual ratings will then
be tallied as an average SPI Index for each four-year MCIP performance period.
At the end of the year, the Committees will disclose a progress report on the
year’s SPI performance assessment. At the end of the MCIP performance
period the Committee will disclose a narrative setting out the SPI performance
achieved and the corresponding outcome that the Committee has determined
for the SPI over the four-year cycle.

The SPI score for MCIP performance years 2017 and 2018 (relating to the USLP
reports of 2016 and 2017 respectively) is set out below.

To avoid over-focus on a small number of elements, the 2017 SPI assessment
was undertaken on a holistic basis. USLP targets were assessed on progress
towards the target’s end date, rather than in the year. Each target was rated as:
on-plan for target date achievement; off-plan for target date; and percentage
achieved by target date (where the target date has already passed).

For the 2018 assessment, the SPI was reviewed in terms of: (i) progress towards
the 10 USLP pillar targets; (ii) Unilever’s transformational change agenda; (iii) our
performance on sustainable living brands; and (iv) the impact of Unilever’s activity
on Sustainability. Thereby, the SPI assessment included progress of important
workstreams as well as towards wider ambitions which flow from the USLP
about how we should lead industry and coalition groups to drive change. This
recognises major problems that are central to our business, such as for example
the contribution of Palm Oil to deforestation and climate change, or the damage
to the oceans, food chains and fresh water supplies from single use plastics.

MCIP
performance
year (USLP
Report year)

SPI
score Summary of rationale for SPI score

2017 (USLP
Report 2016)

120

2016 saw good progress across the USLP with 80% of
our detailed targets ‘on track’, and seven of the nine
pillar targets on track. We continued to pursue our
transformational change agenda with impact, driving
action on Water Sanitation and Hygiene (WASH), climate
change, sustainable agriculture and empowering women
at the same time as driving business growth through
more purpose-led brands. Our Sustainable Living Brands
grew 50% faster than the rest of the business. We had
the top position in the most important independent
rankings and indices worldwide.

Governance ReportAnnual Report on Form 20-F 2018DIRECTORS' REMUNERATION REPORT CONTINUED

ELEMENTS OF
REMUNERATION AT A GLANCE

MCIP (CONTINUED)

ADDITIONAL INFORMATION

MCIP
performance
year (USLP
Report year)

SPI
score Summary of rationale for SPI score

2018 (USLP
Report 2017)

120

In 2017 we made significant progress on our
transformational change agenda with impact, driving
action on WASH, climate change, sustainable agriculture,
empowering women and responsible digital marketing. We
also improved our progress on brands with purpose, with
Sustainable Living Brands contributing 70% of turnover
growth. Unilever’s activities remained highly influential
with consistently high scores on independent rankings and
indices worldwide. Internally our employee engagement
scores showed very strong affiliation with our USLP and
sustainable growth. We remained ‘on track’ for seven of the
nine pillar targets (except Water and the Inclusive Business
pillar) and around 80% of our 50+ USLP targets. A number
have been achieved well in advance of their target date.

For 2019, the CRC will again review which elements should be included in the
SPI performance assessment. Throughout 2019 the CRC will review progress
on sustainability with a view to providing the Committee with their annual SPI
assessment and recommendation.

ULTIMATE REMEDY/MALUS AND CLAW-BACK
Grants under the GSIP and MCIP are subject to ultimate remedy as explained in the Remuneration Policy. Malus and claw-back apply to all
performance-related payments as explained in the Remuneration Policy.

In 2018, the Committee did not reclaim or claw back any of the value of awards of performance-related payments to Executive Directors.

SINGLE FIGURE OF REMUNERATION AND IMPLEMENTATION OF THE REMUNERATION POLICY IN 2018 FOR OUR CEO
(PAUL POLMAN) AND CFO (GRAEME PITKETHLY)
The table below shows a single figure of remuneration for each of our Executive Directors for the years 2017 and 2018. The year-on-year
comparison reflects the implementation of our new Reward Framework for Executive Directors in May 2018, and so is impacted by both mid-year
structural change (with prior figures refreshed to provide a comparison point as detailed in the explanatory footnotes) and ongoing fluctuation in
the exchange rates used to convert pay elements denominated in pounds sterling to euros for reporting purposes. A full overview of our ‘Fixed
Pay’ model as it now applies to our Executive Directors is set out in the Chair Letter on page 50.

Fixed Pay elements

(A) Fixed Pay(a)
(B) Conditional supplemental pension(b)

Fixed Pay elements (sub-total)

(D) Annual bonus

Long-term incentives

(E) MCIP matching shares – (required by UK law)

(F) GSIP performance shares – (required by UK law)

Long-term incentives (sub-total)

Total remuneration paid – (required by UK law) (A+B+C+D+E+F)

(G) Share awards (required by Dutch law)

Total remuneration paid – (required by Dutch law) (A+B+C+D+G)

Paul Polman
CEO (UK) (€’000)

Graeme Pitkethly
CFO (UK) (€’000)

2018

1,602

1,646

526

1,926

2,742

4,886

7,628

11,726

4,535

8,633

2017

1,439

134

1,573

613

2,307

2,042

5,126

7,168

11,661

7,154

11,647

2018

1,058

–

1,058

1,006

683(c)
2,267(c)

2,950

5,040

1,774

3,864

2017

978

–

978

1,124

285(c)
704(c)

989

3,115

2,187

4,313

(a) ‘Fixed Pay’ for these purposes comprises each individual’s basic salary and fixed allowance paid in the period prior to May 2018 and each individual’s Fixed Pay paid
thereafter following the implementation of our new Reward Framework for Executive Directors. 2017 numbers are restated to provide a comparison point, with the
2017 figure for Fixed Pay comprising base salary plus fixed allowance accordingly (with 2017 Fixed Pay of 1,439 for Paul Polman comprising 1,154 base salary plus
285 fixed allowance, and 2017 Fixed Pay of 978 for Graeme Pitkethly comprising 750 base salary plus 228 fixed allowance (all figures in €'000)).

(b) ‘Conditional Supplemental Pension’ for these purposes comprises the conditional supplemental pension paid to Paul Polman in the period prior to May 2018,

at which point it was incorporated into his ‘Fixed Pay’ as described in last year’s Directors’ Remuneration Report.

(c) Graeme Pitkethly’s GSIP and MCIP values in the above single figure table for 2017 include GSIP performance shares and MCIP matching shares previously granted

to him in 2015 before his appointment as an Executive Director, and include gross delivery costs (including tax and social security).

Where relevant, amounts for 2018 have been translated into euros using the average exchange rate over 2018 (€1 = £0.8835 / CHF 1.1573), excluding
amounts in respect of MCIP and GSIP which have been translated into euros using the exchange rate at vesting date of 11 February 2019 (€1 = £0.8784).
Amounts for 2017 have been translated into euros using the average exchange rate over 2017 (€1 = £0.8756 / CHF 1.1061), excluding amounts in respect
of MCIP and GSIP which have been translated into euros using the exchange rate at vesting date of 13 February 2018 (€1 = £0.8882).

We do not grant our Executive Directors any personal loans or guarantees.

Governance ReportAnnual Report on Form 20-F 2018ELEMENTS OF SINGLE FIGURE REMUNERATION 2018

(A) FIXED PAY
For 2018, this comprises each individual’s base salary and fixed allowance paid prior to 1 May 2018 (translated into euros where necessary using
the average exchange rate over 2018 of €1 = £0.8835), and each individual’s Fixed Pay paid from 1 May 2018 onwards following the implementation
of our new Reward Framework for Executive Directors (paid in euros), for a total of:
• CEO – €1,601,582
• CFO – €1,058,298

(B) CONDITIONAL SUPPLEMENTAL PENSION
CEO (Paul Polman): Conditional supplemental pension provision agreed with Paul Polman on hiring, which will be paid on his retirement (or his
death or total disability prior to retirement). Contributions were made for the period up to 1 May 2018 (when this item was discontinued upon the
implementation of our new Reward Framework for Executive Directors) at the rate of 12% of a capped salary equivalent to £976,028, resulting in
contributions for 2018 of £39,041.

Medical insurance cover and actual tax return preparation costs

Provision of death-in-service benefits and administration

Payment to protect against difference between employee social security obligations in country
of residence versus UK

Total

Paul Polman
CEO (UK)

Graeme Pitkethly
CFO (UK)

(€)(a)

2018

44,896

11,707

469,788

526,391

(€)(a)

2018

17,702

8,340

26,042

(a) The numbers in this table are quoted in euros (translated where necessary using the average exchange rate over 2018 of €1 = £0.8835 / CHF 1.1573.

(D) ANNUAL BONUS
Annual bonus 2018 actual outcomes

• CEO – €1,925,810 (which is 51% of maximum, 114% of Fixed Pay).
• CFO – €1,005,821 (which is 51% of maximum, 91% of Fixed Pay).

This includes cash and the portion of annual bonus that Executive Directors have indicated will be re-invested in shares under the MCIP
(satisfying the requirement now effective to invest at least 33%). See below for details. Performance against targets:

Performance metrics

Threshold

Target

Maximum

PERFORMANCE: ANNUAL BONUS

Underlying sales growth (1/3)

1.5%

3.4%

Free cash ﬂow (€bn) (1/3)

€4.9bn

€5.6bn

€6.6bn

Underlying operating margin
improvement compared to prior year (1/3)

percentage
points

+0.4

+0.9

percentage
points

+1.30

Overall performance ratio (based on
actual performance bonus formula)
and endorsed by the Committee after
quality of results assessment

76%

150%

Result vesting
(% of target)

81%

63%

83%

76%

Further details of the annual bonus outcomes are described in the Chair Letter on page 50. The calculated pay-out for Unilever’s 2018
performance ratio of 76% was endorsed by the Committee as representing a balanced assessment of underlying performance of the business.

• Paul Polman

Target bonus: 150% of
Fixed Pay (€1,689,307*) = €2,533,961

Unilever’s 2018
performance ratio = 76%

€1,925,810
(114% of Fixed Pay)

* Figure reflects Paul Polman's decision not to accept the 5% increase in Fixed Pay proposed at the 2018 AGMs.

• Graeme Pitkethly

Target bonus: 120% of
Fixed Pay (€1,102,874) = €1,323,449

Unilever’s 2018
performance ratio = 76%

€1,005,821
(91% of Fixed Pay)

Governance ReportAnnual Report on Form 20-F 2018DIRECTORS' REMUNERATION REPORT CONTINUED

Annual bonus measures are not impacted by share price growth. Paul Polman’s annual bonus was paid to him wholly in Unilever N.V. shares
(after deduction for tax withholding) which he will be required to hold until the second anniversary of his retirement date (see page 60 for further
details about leaving arrangements for Paul Polman).

(E) MCIP – UK LAW REQUIREMENT

2018 OUTCOMES
This includes MCIP matching shares granted on 11 February 2016 (based on the percentage of 2015 annual bonus that Paul Polman and Graeme
Pitkethly had invested in Unilever shares, as well as performance in the three-year period to 31 December 2018) which vested on 11 February
2019. Further details of the performance measures (including the impact of our April 2017 toughening of performance measures to align the non-
GAAP margin measure from COM to UOM) are disclosed below in note (F).

The values included in the single figure table for 2018 are calculated by multiplying the number of shares granted on 11 February 2016 (including
additional shares in respect of accrued dividends through to 31 December 2018) by the level of vesting (132% of target award) and the share
prices on the date of vesting (NV €48.55 and PLC £42.06). Performance measures and performance against them are as set out in the table under
heading (F) below. These have been translated into euros using the exchange rate on the date of vesting (€1 = £0.8784). These results indicate a
value of €669,930 delivered through performance and €2,072,491 delivered through share price growth for Paul Polman, and a value of €188,506
delivered through performance and €492,950 delivered through share price growth for Graeme Pitkethly.

(F) GSIP – UK LAW REQUIREMENT

2018 OUTCOMES
This includes GSIP performance shares granted on 11 February 2016, based on performance in the three-year period to 31 December 2018, which
vested on 11 February 2019.

The values included in the single figure table for 2018 are calculated by multiplying the number of shares granted on 11 February 2016 (including
additional shares in respect of accrued dividends through to 31 December 2018) by the level of vesting (132% of target award) and the share price
on the date of vesting (NV €48.55 and PLC £42.06). These have been translated into euros using the exchange rate on the date of vesting (€1 =
£0.8784). These results indicate a value of €1,347,596 delivered through performance and €3,524,011 delivered through share price growth for
Paul Polman, and a value of €625,424 delivered through performance and €1,635,506 delivered through share price growth for Graeme Pitkethly.

Performance against targets:

Performance metrics

Threshold

Maximum

Result vesting
(% of target)

Underlying sales growth (p.a.) (25%)

3.4%

74%

PERFORMANCE: MCIP/GSIP

Margin improvement (25%)

percentage
points

+0.3

+0.83

percentage
points

+1.1

142%

Cumulative operating cash ﬂow (25%)

€16bn

€19.1bn

€20bn

161%

Total shareholder return (25%)(a)

10th

5th

3rd

Overall vesting

132%

150%

132%

(a) For the relative TSR measure, Unilever’s TSR is measured against a comparator group of other consumer goods companies. TSR measures the return received by
a shareholder, capturing both the increase in share price and the value of dividend income (assuming dividends are reinvested). The TSR results are measured on
a common currency basis to better reflect the shareholder experience. The current TSR peer group consists of 18 companies (19 including Unilever) as follows:

Avon

Beiersdorf

Campbell Soup

Coca-Cola

Colgate-Palmolive

Danone

General Mills

Estée Lauder

Henkel

Kao

Kellogg’s

L’Oréal

Nestlé

PepsiCo

Kimberly-Clark

Procter & Gamble

Reckitt Benckiser

Shiseido

The Committee may change the TSR vesting levels set out above if the number of companies in the TSR comparator group changes (eg via M&A activity etc).

Further details of the GSIP and MCIP outcomes are described in the Chair Letter on page 50, with details of our stepped-up plans for shareholder
value creation (and related treatment of inflight legacy awards) available on our website:

www.unilever.com/ara2017/downloads (Compensation Committee Statement: Alignment of Performance Measures for 2017)

On the basis of this performance, the Committee determined that the GSIP and MCIP awards to the end of 2018 will vest at 132% of initial target
award levels (ie 66% of maximum for GSIP and 88% of maximum for MCIP (which is capped at 150% for the Executive Directors)).

(G) SHARE INCENTIVES – DUTCH LAW REQUIREMENT
As per the Dutch requirements, these costs are non-cash costs and relate to the expenses recognised for the period following IFRS 2. This is
based on share prices on grant dates and a 98% adjustment factor for GSIP shares and MCIP matching shares awarded in 2018, 2017 and 2016.

Governance ReportAnnual Report on Form 20-F 2018

SCHEME INTERESTS AWARDED IN THE YEAR

PLAN

MCIP
Conditional matching share award made
on 3 May 2018

GSIP
Conditional share award made
on 16 February 2018

BASIS OF AWARD

Based on the level of 2017 annual bonus paid in 2018
invested by the CEO and CFO. The following numbers
of matching shares were awarded on 3 May 2018(a):

The CEO received a target award of 200%
of base salary at the time (as disclosed in the Directors'
Remuneration Report 2017).

CEO:
PLC – 0
NV – 50,519

CFO:
PLC – 12,408
NV – 12,408

CEO:
PLC – 26,209
NV – 26,209

The CFO received a target award of 150% of base salary
at the time (as disclosed in the Directors' Remuneration
Report 2017).

Maximum vesting results in 150% of the above
awards vesting.

CFO:
PLC – 12,772
NV – 12,772

Maximum vesting results in 200% of target awards
vesting, which translates to a maximum vesting of 400%
of base salary for the CEO and 300% of base salary for
the CFO.

MAXIMUM FACE
VALUE OF AWARDS

CEO: €3,469,898(b)
CFO: €1,685,412(b)

CEO: €4,560,247(c)
CFO: €2,222,270(c)

THRESHOLD VESTING
(% OF TARGET AWARD)

Four equally weighted long-term performance
measures. 0% of the target award vests for
threshold performance.

Four equally weighted long-term performance
measures. For the three business-focused metrics,
25% of the target award vests for threshold
performance. For the TSR measure, 50% of the
target award vests for threshold performance.

PERFORMANCE
PERIOD

DETAILS OF
PERFORMANCE
MEASURES

1 January 2018 – 31 December 2021
(with a requirement to hold vested matching shares
for a further one-year retention period).

1 January 2018 – 31 December 2020
(with a requirement to hold vested shares for a further
one-year retention period).

Subject to four equally weighted performance measures:

MCIP- 2018 – 2021 awards

Underlying Sales Growth
(CAGR)

Underlying EPS Growth
(CAGR, current rates)

Return on Invested Capital
(exit year %)

Sustainability Progress Index**

Min

1.5%

6.0%

17.0%

2018 – 2021 MCIP

Opportunity
0-200%*
Max

5.5%

200%

11.0%

200%

21.0%

200%

* Please note for Executive Directors only, the maximum outcome is capped at 1.5 x matching not 2
** Committee Assessment of USLP Progress (with input from the Corporate Responsibility Committee)

Participants are required to hold all their own investment
shares and normally to remain employed by Unilever for
the duration of the relevant performance period.

GSIP- 2018 – 2020 awards

Underlying Sales Growth
(CAGR)

Underlying Operating Margin
average (bps vs. PY) @ current rates

Cumulative Operating
Cash Flow (€bn)

Total Shareholder Return

Min

2.0%

25%

+50

25%

19.0

25%

10th

50%

2018 – 2020 GSIP

Max

6.0%

200%

+140

200%

24.0

200%

3rd

200%

(a) Under MCIP, Executive Directors invest in NV or PLC shares, and receive a corresponding number of performance-related matching shares. On 3 May 2018,

the CEO invested 67% (£1,353,400) and the CFO invested 67% (£659,531) of their 2017 annual bonus in MCIP investment shares (the CEO elected to invest fully
in NV shares, and the CFO elected to receive an equal number of shares in each of PLC and NV, in line with the share choice provisions in operation at the time).
(b) Face values are calculated by multiplying the number of shares granted on 3 May 2018 by the share price on that day of PLC £39.55 and NV €45.79 respectively,
assuming maximum performance and therefore maximum vesting of 150% for MCIP and then translating into euros using an average exchange rate over 2018
of €1 = £0.8835.

(c) Face values are calculated by multiplying the number of shares granted on 16 February 2018 by the share price on that day of PLC £38.02 and NV €43.97

respectively, assuming maximum performance and therefore maximum vesting of 200% for GSIP and then translating into euros using an average exchange
rate over 2018 of €1 = £0.8835.

Governance ReportAnnual Report on Form 20-F 2018MINIMUM SHAREHOLDING REQUIREMENT AND EXECUTIVE DIRECTOR SHARE INTERESTS (UNAUDITED)
The remuneration arrangements applicable to our Executive Directors require them to build and retain a personal shareholding in Unilever (by
the later of 2018 or five years from their date of appointment) to align their interests with those of Unilever’s shareholders. Incoming Executive
Directors will be required to retain all shares vesting from any share awards made since their appointment until their minimum shareholding
requirements have been met in full.

The table below shows the Executive Directors’ share ownership against the minimum shareholding requirements as at 31 December 2018
and the interest in NV and PLC ordinary shares of Executive Directors and their connected persons as at 31 December 2018.

When calculating an Executive Director’s personal shareholding the following methodology is used:
• Fixed Pay at the date of measurement, in line with the application of the new Reward Framework to our Executive Directors (resulting in

a de facto increase in the share ownership requirement applicable to them from the previous multiple of base salary).

• Shares in either Unilever PLC or Unilever N.V. (or a combination of both) will qualify provided they are personally owned by the Executive

Director, by a member of his (immediate) family or by certain corporate bodies, trusts or partnerships as required by law from time to time
(each a ‘connected person’).

• Shares purchased under the MCIP, whether from the annual bonus or otherwise, will qualify as from the moment of purchase as these are

held in the individual’s name and are not subject to further restrictions.

• Shares or entitlements to shares that are subject only to the Director remaining in employment will qualify on a net of tax basis.
• Shares awarded on a conditional basis by way of the GSIP or MCIP will not qualify until the moment of vesting (ie once the precise number

of shares is fixed after the three-year vesting period for the GSIP, or a four-year vesting period for the MCIP, has elapsed).

• The shares will be valued on the date of measurement or, if that outcome fails the personal shareholding test, on the date of acquisition.

The share price for the relevant measurement date will be based on the average closing share prices and the euro/sterling/US dollar exchange
rates from the 60 calendar days prior to the measurement date.

Executive Directors are required to hold shares to the value of 100% of their shareholding requirement for 12 months post cessation of
employment at Unilever, and 50% of these shares for 24 months post cessation of employment with Unilever. ULE members are required to build
a shareholding of 400% of Fixed Pay (500% for the CEO). This requirement is 150% of Fixed Pay for the ‘Top 100’ management layer below ULE.

EXECUTIVE DIRECTORS’ AND THEIR CONNECTED PERSONS’ INTERESTS IN SHARES AND SHARE OWNERSHIP

Share
ownership
guideline as %
of Fixed Pay (as
at 31 December
2018)

Have guidelines
been met (as at
31 December
2018)?

500

400

Yes

Shares held as at
1 January 2018(b)

Shares held as at
31 December 2018(b)

Actual share
ownership as
a % of Fixed
Pay (as at 31
December

2018)(a)

4,116%

471%

952,374

44,496

PLC

314,130

55,797

1,118,459

35,340

PLC

324,351

73,495

CEO: Paul Polman

CFO: Graeme Pitkethly

(a) Calculated based on the minimum shareholding requirements and methodology set out above and the headline Fixed Pay for the CEO and CFO as at 31 December

2018 (ie €1,689,307 for the CEO and €1,102,874 for the CFO).

(b) NV shares are ordinary €0.16 shares and PLC shares are ordinary 31/9p shares.

During the period between 31 December 2018 and 21 February 2019, the following changes in interests have occurred:
• Graeme Pitkethly purchased 6 PLC shares under the Unilever PLC ShareBuy Plan: 3 on 9 January 2019 at a share price of £40.88, and

a further 3 on 8 February 2019 at a share price of £41.75; and

• as detailed under headings (E) and (F) on page 56, on 11 February 2019:

• Paul Polman acquired 56,487 NV shares following the vesting of his 2016 MCIP award, and 101,887 NV shares following the vesting of his

2016 GSIP award; and

• Graeme Pitkethly acquired 7,057 NV shares and 7,118 PLC shares following the vesting of his 2016 MCIP award, and 46,729 PLC shares

following the vesting of his 2016 GSIP award.

The voting rights of the Directors (Executive and Non-Executive) and members of the ULE who hold interests in the share capital of NV and PLC
are the same as for other holders of the class of shares indicated. As at 21 February 2019 none of the Directors’ (Executive and Non-Executive)
or other ULE members’ shareholdings amounted to more than 1% of the issued shares in that class of share, excluding the holdings of the
Leverhulme Trust and the Leverhulme Trade Charities Trust, which amounted to 4.19%. All shareholdings in the table above are beneficial. In
addition, 46,931,182 shares are held by the Leverhulme Trust and 2,035,582 shares are held by the Leverhulme Trade Charities Trust, of which
Paul Polman is a director.

INFORMATION IN RELATION TO OUTSTANDING SHARE INCENTIVE AWARDS
As at 31 December 2018, Paul Polman held awards over a total of 317,936 shares which are subject to performance conditions, and Graeme
Pitkethly held awards over a total of 139,570 shares which are subject to performance conditions. There are no awards of shares without
performance conditions and no awards in the form of options.

Governance ReportAnnual Report on Form 20-F 2018MANAGEMENT CO-INVESTMENT PLAN
The following conditional shares vested during 2018 or were outstanding at 31 December 2018 under the MCIP:

Balance of
conditional shares
at 1 January 2018

Conditional shares

awarded in 2018(a)

Paul Polman

Graeme Pitkethly

Share
type

PLC

Original
award

100,071(b)
0(b)

10,678(c)
13,154(c)

Performance period
1 January 2018 to
31 December 2021

Price at
award

Dividend
shares
accrued
during
the year(d)

Additional
shares
earned
in 2018

Vested in

2018(e)

50,519

€45.79

3,477

46,878

15,204

£39.55

12,408

€45.79

£39.55

653

688

3,454

1,023

Balance of
conditional shares
at 31 December 2018

Price at
vesting

€43.57

£37.91

€43.57

£37.91

Shares
lapsed

No. of
shares

122,393

23,739

23,819

(a) Each award of conditional matching shares vests four years after the date of the award, subject to performance conditions and an additional retention period

(further details can be found on page 57). Awards are all subject to continued employment and maintenance of the underlying investment shares. Under MCIP,
Executive Directors are able to choose whether they invest in PLC or NV shares or an equal number of shares in each, and receive a corresponding number of
performance-related matching shares (currently 1.5 x matching shares for each investment share purchased). Matching shares will be awarded in the same form
as the investment shares (ie in PLC shares, NV shares or an equal number of shares in each). On 3 May 2018, Paul Polman and Graeme Pitkethly each invested in
the MCIP 67% of their annual bonus earned during 2017 and paid in 2018, and received a corresponding award of 1.5 x matching shares (which will vest, subject to
performance, on 16 February 2022).

(b) This includes a grant of 29,128 NV shares made on 13 February 2015 (which vested on 13 February 2018), a grant of 39,318 NV shares made on 11 February

2016 (which vested on 11 February 2019), a grant of 26,578 NV shares made on 17 May 2017 (vesting on 16 February 2021), and 5,047 NV shares from reinvested
dividends accrued in prior years in respect of awards.

(c) This includes grants that were made to Graeme Pitkethly before his appointment as Executive Director on 21 April 2016 (being a grant of 2,215 PLC shares made on
13 February 2015 (which vested on 13 February 2018) and a grant of 4,912 of each of NV and PLC shares made on 11 February 2016 (which vested on 11 February
2019), a grant of 5,423 of each of NV and PLC shares made on 17 May 2017 (vesting on 16 February 2021) and 343 NV shares and 604 PLC shares from reinvested
dividends accrued in prior years in respect of awards.

(d) Reflects reinvested dividend equivalents accrued during 2018 and subject to the same performance conditions as the underlying matching shares.
(e) The 13 February 2015 grant vested on 13 February 2018 at 148% for Paul Polman and 142% for Graeme Pitkethly. In accordance with Unilever’s existing

remuneration policy, Executive Directors are able to choose whether they receive any shares due to vest under MCIP in PLC or NV shares or an equal number of
shares in each. Paul Polman elected for share choice and chose to receive his shares in the form of 100% NV shares, and Graeme Pitkethly elected to receive his
shares in the form of an equal number of shares in each of PLC and NV.

GLOBAL SHARE INCENTIVE PLAN
The following conditional shares vested during 2018 or were outstanding at 31 December 2018 under the GSIP:

Balance of
conditional shares
at 1 January 2018

Conditional shares

awarded in 2018(a)

Paul Polman

Graeme Pitkethly

Share
type

PLC

Original
award

107,885(b)
108,583(b)

35,149(c)
35,332(c)

Performance period
1 January 2018 to
31 December 2020

Price at
award

26,209 €43.970

26,209

£38.015

12,772 €43.970

12,772

£38.015

Dividend
shares
accrued
during
the year(d)

3,100

3,309

1,459

1,557

Additional
shares
earned
in 2018

19,051

19,231

1,469

1,482

Vested in

2018(e)

58,738

59,294

4,966

5,013

Balance of
conditional shares
at 31 December 2018

Price at
vesting

€43.57

£37.91

€43.57

£37.91

Shares
lapsed

No. of
shares

97,507

98,038

45,883

46,130

(a) Each award of conditional shares vests three years after the date of the award, subject to performance conditions (further details can be found on page 57). The

2018 award was made on 16 February 2018 (vesting 17 February 2021).

(b) This includes a grant of 36,497 of each of NV and PLC shares made on 13 February 2015 (which vested on 13 February 2018), a grant of 35,115 of each of NV and

PLC shares made on 11 February 2016 (which vested on 11 February 2019), a grant of 30,532 of each of NV and PLC shares made on 13 February 2017 (vesting on
13 February 2020) and 5,741 NV shares and 6,439 PLC shares from reinvested dividends accrued in prior years in respect of awards.

(c) This includes grants that were made to Graeme Pitkethly before his appointment as Executive Director on 21 April 2016 (being a grant of 3,216 of each of NV and
PLC shares made on 13 February 2015 (which vested on 13 February 2018) and a grant of 16,297 of each of NV and PLC shares made on 11 February 2016 (which
vested on 11 February 2019)), a grant of 14,171 of each of NV and PLC shares made on 13 February 2017 (vesting on 13 February 2020), and 1,465 NV shares and
1,648 PLC shares from reinvested dividends accrued in prior years in respect of awards.

(d) Reflects reinvested dividend equivalents accrued during 2018, subject to the same performance conditions as the underlying GSIP shares.
(e) The 13 February 2015 grant vested on 13 February 2018 at 148% for Paul Polman and 142% for Graeme Pitkethly. In accordance with Unilever’s existing

remuneration policy, Executive Directors are able to choose whether they receive any shares due to vest under GSIP in PLC or NV shares or an equal number of
shares in each. Paul Polman elected for share choice and chose to receive his shares in the form of 100% NV shares. Therefore, upon vesting, his 13 February 2015
PLC award was cancelled and converted and delivered to him as 58,234 NV shares (resulting in a total vesting for the 13 February grant of 116,972 NV shares).
Graeme Pitkethly elected to receive his shares in the form of an equal number of shares in each of PLC and NV.

Governance ReportAnnual Report on Form 20-F 2018EXECUTIVE DIRECTORS’ SERVICE CONTRACTS
Starting dates of our Executive Directors’ service contracts:
• Paul Polman (CEO and Executive Director to 31 December 2018): 1 October 2008 (signed on 7 October 2008, and terminated due to retirement

with effect from 2 July 2019); and

• Graeme Pitkethly: 1 October 2015 (signed on 16 December 2015).

Arrangements for Alan Jope will be in line with our Remuneration Policy and effective from his date of appointment as CEO on 1 January 2019.

Service contracts are available to shareholders to view at the AGMs or on request from the Group Secretary, and can be terminated with
12 months’ notice from Unilever or six months’ notice from the Executive Director. A payment in lieu of notice can be made of no more than
one year’s base salary, fixed allowance and other benefits. Other payments that can be made to Executive Directors in the event of loss of office
are disclosed in our Remuneration Policy which is available on our website.

www.unilever.com/remuneration-policy

PAYMENTS TO FORMER DIRECTORS / PAYMENTS FOR LOSS OF OFFICE
There have been no payments to former Directors or payments for loss of office during the year.

Paul Polman stepped down as CEO and Executive Director with effect from 31 December 2018, and will retire from employment with Unilever
effective 2 July 2019 (the “Retirement Date”). Until his Retirement Date he will assist with an orderly transition and handover of responsibilities.

In accordance with his service agreement and our Remuneration Policy, Paul Polman:
• will continue to receive Fixed Pay and benefits up to the Retirement Date;
• remained eligible to receive a discretionary bonus in respect of 2018, determined by the Compensation Committee in the normal way and at

the normal time dependent on the Company’s performance, and paid to him wholly in Unilever N.V. shares (after deduction for tax withholding)
which he will be required to hold until the second anniversary of the Retirement Date (see pages 55 to 56 for details);

• will not participate in the MCIP 2019-2022 and will not receive any bonus in respect of the 2019 financial year;
• as he is retiring, will be treated as a good leaver and hence his outstanding awards under the MCIP and GSIP long term share incentive

plans will remain capable of vesting in accordance with the rules of the relevant plan. Consequently, it is anticipated that these awards will
be pro-rated as follows reflecting Paul Polman’s actual length of service within the vesting period:

a) GSIP and MCIP 2016 – 2018 vested on 11 February 2019: 100% (see page 56 for details);
b) GSIP 2017 – 2019 vesting around 13 February 2020: 79%;
c) MCIP 2017 – 2020 vesting around 17 February 2021: 57%;
d) GSIP 2018 – 2020 vesting around 17 February 2021: 46%; and
e) MCIP 2018 – 2021 vesting around 16 February 2022: 31%;
and will then vest, subject to Company performance, on the respective vesting dates;
• will remain subject to the Company’s minimum shareholding requirements and needs to retain Unilever shares worth at least 5 times his

annual Fixed Pay level until the first anniversary of the Retirement Date and 50% of that amount until the second anniversary of the Retirement
Date. Additionally, the Company will continue to pay Paul Polman’s social security obligation in his country of residence on all Unilever source
income arising to protect him against the difference between the employee social security obligations in his country of residence versus the UK.
The precise cost of this provision will depend on Paul Polman’s total earnings (which will primarily be influenced by the value of his outstanding
MCIP and GSIP share awards when they vest) and applicable rates of social security;

• will continue to receive tax return preparation services in respect of total Unilever earnings;
• through to the Retirement Date or to the later date as specified below, after which such benefits will cease, will continue to receive:

• Family Medical Cover to 31 December 2019; and
• Death & Disability Insurance Cover.

Details of all payments made to and receivable by Paul Polman will be disclosed in the Directors’ Remuneration Report within the Annual Report
and Accounts as required going forward.

IMPLEMENTATION OF THE REMUNERATION POLICY IN 2019 FOR NON-EXECUTIVE DIRECTORS
The current Non-Executive Director fee levels will not be changed for 2019, and we will review fee levels for 2020 during the course of the year.
The table below outlines the current fee structure with fees paid 50% by each of Unilever N.V. and Unilever PLC (at a constant exchange rate of
£1 = €1.2817):

Roles and responsibilities

Basic Non-Executive Director Fee

Chairman (all inclusive)

Vice Chairman (modular)

Member of Nominating and Corporate Governance Committee

Member of Compensation Committee

Member of Corporate Responsibility Committee

Member of Audit Committee

Chair of Nominating and Corporate Governance Committee

Chair of Compensation Committee

Chair of Corporate Responsibility Committee

Chair of Audit Committee

Current Annual Fee €

108,949

801,092

51,270

19,226

25,635

38,452

51,270

All reasonable travel and other expenses incurred by Non-Executive Directors in the course of performing their duties are considered to be
business expenses. Non-Executive Directors also receive expenses relating to the attendance of the Director’s spouse or partner, when they
are invited by Unilever.

Governance ReportAnnual Report on Form 20-F 2018SINGLE FIGURE OF REMUNERATION IN 2018 FOR NON-EXECUTIVE DIRECTORS
The table below shows a single figure of remuneration for each of our Non-Executive Directors, for the years 2017 and 2018.

Non-Executive Director

Marijn Dekkers(c)

Nils Andersen

Laura Cha
Vittorio Colao(d)
Louise Fresco(e)
Ann Fudge(f)

Judith Hartmann
Andrea Jung(g)

Mary Ma
Strive Masiyiwa(h)

Youngme Moon
John Rishton(i)

Feike Sijbesma

Total

2018

Benefits(b)
€’000

–

Fees(a)
€’000

744

121

115

127

–

121

115

131

147

143

135

Total
remuneration
€’000

757

130

115

127

–

128

115

131

147

143

135

2017

Benefits(b)

–

Total
remuneration
€’000

740

112

107

103

175

112

–

105

111

103

127

Fees(a)
PLC

727

109

107

103

151

109

–

105

111

103

127

2,029

2,058

1,917

1,960

(a) This includes fees received from NV in euros and PLC in sterling for 2017 and 2018 respectively. Includes basic Non-Executive Director fee and Committee

chairmanship and/or membership. Where relevant, amounts for 2018 have been translated into euros using the average exchange rate over 2018 (€1 = £0.8835).
Amounts for 2017 have been translated into euros using the average exchange rate over 2017 (€1 = £0.8756).

(b) The only benefit received relates to travel by spouses or partners where they are invited by Unilever.
(c) Chairman and Chair of the Nominating and Corporate Governance Committee.
(d) Chair of the Compensation Committee from 3 May 2018.
(e) Chair of the Corporate Responsibility Committee until 27 April 2017 (retired from the Boards at the April 2017 AGMs).
(f) Vice Chairman and Chair of the Compensation Committee until 3 May 2018 (retired from the Boards at the May 2018 AGMs).
(g) Appointed at the May 2018 AGMs.
(h) Chair of the Corporate Responsibility Committee.
(i) Chair of the Audit Committee.

We do not grant our Non-Executive Directors any personal loans or guarantees, nor are they entitled to any severance payments.

NON-EXECUTIVE DIRECTORS’ INTERESTS IN SHARES
Non-Executive Directors are encouraged to build up a personal shareholding of at least 1 x their annual fees over the five years from 1 January
2012 (or appointment, if later). The table shows the interests in NV and PLC ordinary shares of Non-Executive Directors and their connected
persons as at 31 December 2018. There has been no change in these interests between 31 December 2018 and 21 February 2019.

Marijn Dekkers

Nils Andersen

Laura Cha

Vittorio Colao

Ann Fudge

Judith Hartmann

Shares held at
1 January 2018

Shares held at
31 December
2018

Share type

Shares held at
1 January 2018

Shares held at
31 December
2018

20,000

–

6,014

–

660

858

4,600

–

282

5,000

2,500

–

20,000

Andrea Jung

–

6,014 Mary Ma

–

2,660

Strive Masiyiwa

858

4,600

Youngme Moon

–

282(a) John Rishton

5,000(a)

2,500

Feike Sijbesma

–

PLC

NV NY

PLC ADRs

PLC

4,576(b)

4,576

–

860

–

1,130

2,000

–

3,340

2,000

10,000

–

860

–

1,130

2,000

–

3,340

2,000

10,000

–

Share type

NV NY

PLC ADRs

PLC

NV NY

PLC ADRs

PLC

(a) Shares held at 3 May 2018 (the date by which Ann Fudge retired from the Boards).
(b) Shares held at 3 May 2018 (the date when Andrea Jung was appointed to the Boards).

Governance ReportAnnual Report on Form 20-F 2018DIRECTORS' REMUNERATION REPORT CONTINUED

NON-EXECUTIVE DIRECTORS’ LETTERS OF APPOINTMENT
All Non-Executive Directors were reappointed to the Boards at the 2018 AGMs, with the exception of Andrea Jung (who was appointed for the first
time) and Ann Fudge (who retired from the Boards).

Non-Executive Director

Marijn Dekkers

Nils Andersen

Laura Cha

Vittorio Colao

Ann Fudge

Judith Hartmann

Andrea Jung

Mary Ma

Strive Masiyiwa

Youngme Moon

John Rishton

Feike Sijbesma

Date first appointed
to the Boards

Effective date of
current appointment(a)

21 April 2016

30 April 2015

15 May 2013

1 July 2015

14 May 2009

30 April 2015

3 May 2018

15 May 2013

21 April 2016

15 May 2013

1 November 2014

3 May 2018

n/a

3 May 2018

(a) The unexpired term for all Non-Executive Directors’ letters of appointment is the period up to the 2019 AGMs, as they all, unless they are retiring, submit

themselves for annual reappointment.

OTHER DISCLOSURES RELATED TO DIRECTORS’ REMUNERATION

SERVING AS A NON-EXECUTIVE ON THE BOARD OF ANOTHER COMPANY
Executive Directors serving as non-executive directors on the boards of other companies are permitted to retain all remuneration and fees
earned from outside directorships subject to a maximum of one outside listed directorship (see ‘Independence and Conflicts’ on page 37 for
further details).

Paul Polman is a non-executive director of DowDuPont Inc. (formerly The Dow Chemical Company) and received an annual fee of €97,051
($115,000) based on the average exchange rate over the year 2018 of €1 = $1.1850. In addition, he received a restricted award of 2,680 ordinary
shares with a nominal value of $2.50 per share in the capital of DowDuPont Inc. The shares include the rights to vote and to receive dividends
thereon. The shares cannot be sold or transferred until Paul Polman leaves the board of directors of DowDuPont Inc., and in any case not earlier
than 25 April 2020.

TEN-YEAR HISTORICAL TOTAL SHAREHOLDER RETURN (TSR) PERFORMANCE
The graph below includes:
• growth in the value of a hypothetical £100 holding over ten years’ FTSE 100 comparison based on 30-trading-day average values; and
• growth in the value of a hypothetical €100 investment over ten years’ AEX comparison based on 30-trading-day average values.

The Committee has decided to show Unilever’s performance against the FTSE 100 Index, London and also the Euronext 100 index (AEX),
Amsterdam as these are the most relevant indices in the UK and the Netherlands where we have our principal listings. Unilever is a constituent
of both these indices.

TEN-YEAR HISTORICAL TSR PERFORMANCE

400

350

300

250

200

150

100

g
n
d
l
o
h
€
/
£
l
a
c
i
t
e
h
t
o
p
y
h
f
o
e
u
l
a
V

50
Dec 08

Dec 09

Dec 10

Dec 11

Dec 12

Dec 13

Dec 14

Dec 15

Dec 16

Dec 17

Dec 18

Unilever NV

Unilever PLC

FTSE 100

AEX

Governance ReportAnnual Report on Form 20-F 2018

CEO SINGLE FIGURE TEN-YEAR HISTORY
The table below shows the ten-year history of the CEO single figure of total remuneration:

CEO
Single figure of total remuneration (€‘000)

Annual bonus award rates against
maximum opportunity

GSIP performance shares vesting rates
against maximum opportunity

MCIP matching shares vesting rates against
maximum opportunity

Share Matching Plan vesting rates against
maximum opportunity(a)

(a) Shown in year of award.

n/a

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

3,859

6,292

6,010

7,852

7,740

9,561

10,296

8,370

11,661

11,726

82%

80%

68%

100%

78%

66%

92%

100%

51%

47%

44%

55%

64%

61%

49%

35%

74%

66%

n/a

100%

n/a

81%

65%

47%

99%

88%

n/a

PERCENTAGE CHANGE IN REMUNERATION OF EXECUTIVE DIRECTORS (CEO/CFO)
The table below shows the percentage change from 2017 to 2018 for Fixed Pay, other benefits (excluding pension) and bonus for the CEO, CFO
and all UK and Dutch management in Unilever. The subset of UK and Dutch management has been used as a fair representation of our dual
listing status.

% change from 2017 to 2018

CEO(a)(b)
CFO(a)(c)
UK and Dutch management(d)

Fixed Pay

11.3%

8.2%

8.0%

Bonus

-16.5%

-10.5%

4.9%

Other benefits
(not including
pension)

-19.2%

8.3%

-0.2%

(a) Calculated using the data from the Executive Directors’ single figure table on page 54 (for information on exchange rates please see the footnotes in that table).
(b) The CEO Fixed Pay and other benefits figures reflect the implementation of our new Reward Framework in 2018, including the consolidation of conditional

supplemental pension accrual into Fixed Pay from the 2018 AGMs, and changes in the relevant sterling:euro exchange rates. The reduction in benefits value
is also due to variations in charges for social security and tax return preparation fees, both of which decreased in 2018.

(c) The increase in Fixed Pay shown for the CFO reflects the implementation of our new Reward Framework in 2018, including a 5% increase in Fixed Pay with
effect from the 2018 AGMs, and changes in the relevant sterling:euro exchange rates. The increase in benefits value is due to an increase in private medical
insurance costs.

(d) For the UK and Dutch management population, Fixed Pay numbers have been restated to include cash-related benefits employees receive as part of their total
compensation, to ensure we can accurately compare Fixed Pay for the management population against that of the CEO and CFO. Figures are also affected by
changes in the average sterling:euro exchange rates for 2017 and 2018, as well as a lower bonus performance ratio in 2018 compared to 2017.

EXECUTIVE DIRECTORS (CEO/CFO) PAY RATIO COMPARISON
The table below shows how pay for the CEO compares to our UK employees at the 25th percentile, median and 75th percentile.

Year

25th Percentile

Median Percentile

75th Percentile

Mean Pay Ratio

Year ending 31 December 2018

Salary:

Pay and benefits
(excluding pension):

Pay ratio (Option A):

£28,804

£34,400

301

£37,000

£41,443

250

£50,021

£57,800

179

147

Figures for the CEO are calculated using the data from the Executive Directors’ single figure table on page 54 (where relevant, translated into
pounds using the average exchange rate over 2018 (€1 = £0.8835)).

Option A was used to calculate the pay and benefits (excluding pension) of the 25th percentile, median and 75th percentile UK employees because
the data was readily available for all UK employees of the group and Option A is the most accurate method (as it is based on total full-time
equivalent total reward for all UK employees for the relevant financial year). Figures are calculated by reference to 31 December 2018, and the
respective salary and pay and benefits (excluding pension) figures for each quartile are set out in the table above. Full-time equivalent figures are
calculated on a pro-rated basis.

Annual bonus and long-term incentives (GSIP and MCIP) were not calculated following the statutory method for single-figure pay. Instead,
variable pay figures were calculated using:
• target annual bonus values multiplied by the actual bonus performance ratio for the respective year (so disregarding personal performance

multipliers, which equal out across the population as a whole);

• target GSIP values (multiplied by the actual GSIP performance ratio for the respective year, based on closing share prices on the vesting

date); and

• MCIP values calculated at an appropriate average for the relevant Work Level of employees, ie an average 45% investment of bonus for WL3

employees; 60% for WL4-5 employees (with vesting again at actual MCIP performance ratio, based on closing share prices on the vesting date);
and for WL6, based on actual variable pay awards and corresponding vesting rates.

The reason for this is it would be unduly onerous to recalculate these figures when, based on a sample, the impact of such recalculation is
expected to be limited.

We expect to report on trends in these figures and links to wider pay, reward and progression policies in future years in line with relevant
reporting requirements.

Governance ReportAnnual Report on Form 20-F 2018DIRECTORS' REMUNERATION REPORT CONTINUED

The table below provides a more detailed breakdown of the fixed and variable pay elements for each of our UK and Dutch Work Levels,
showing how each Work Level compares to the CEO and CFO in 2018 (with equivalent figures from 2017 included for comparison purposes).

CEO/CFO PAY RATIO COMPARISON (split by ﬁxed/variable pay)

CEO = 264.8 x WL1 | CFO = 113.8 x WL1

CEO = 134.3 x WL2 | CFO = 37.3 x WL2
CEO = 142.0 x WL2 | CFO = 61.0 x WL2

CEO = 45.5 x WL3 | CFO = 12.6 x WL3

CEO = 48.5 x WL3 | CFO = 20.8 x WL3

CEO = 18.9 x WL4 | CFO = 5.2 x WL4

CEO = 22.8 x WL4 | CFO = 9.8 x WL4

CEO = 5.8 x WL5 | CFO = 1.6 x WL5

CEO = 7.5 x WL5 | CFO = 3.2 x WL5

CEO = 3.2 x WL6 | CFO = 0.9 x WL6

CEO = 3.8 x WL6 | CFO = 1.6 x WL6

CEO = 3.6 x CFO

CEO = 2.3 x CFO

WL1

WL2

WL3

WL4

WL5

WL6

CFO

CEO

€0m

€1m

€2m

€3m

€4m

€5m

€6m

€7m

€8m

€9m

€10m

€11m

€12m

2018 Fixed

2018 Variable

2017 Fixed

2017 Variable

Figures for the CEO and CFO are calculated using the data from the Executive Directors’ single figure table on page 54. Accordingly, the year-on-
year comparison reflects the implementation of our new Reward Framework for Executive Directors in May 2018, and so is impacted by both mid-
year structural change and ongoing fluctuation in the exchanges rates used to convert pay elements denominated in pounds sterling to euros for
reporting purposes.

For our other Work Levels, variable pay figures are calculated on the basis set out in the preceding paragraphs. Fixed Pay figures reflect all
elements of pay (including allowances) and benefits paid in cash, but exclude pensions. This year, we have also expanded the table to include data
for our WL1 (non-management) staff in the UK and Netherlands.

Changes in pay ratios between 2017 and 2018 reflect a lower bonus performance ratio in 2018 (90%, compared to 122% in 2017), and lower
GSIP and MCIP vesting outcomes (which play an increasing part in total reward from WL3 upwards, particularly with the introduction of the new
Reward Framework for our WL4-6 employees in 2017 and our WL3 employees in 2018, with an invitation to participate in MCIP extended to WL2
employees in 2018 as well). Year-on-year comparisons also reflect changes in the average sterling:euro exchange rates for 2017 and 2018; where
relevant, amounts for 2018 have been translated using the average exchange rate over 2018 (€1 = £0.8835), and amounts for 2017 have been
translated using the average exchange rate over 2017 (€1 = £0.8756).

RELATIVE IMPORTANCE OF SPEND ON PAY
The chart below shows the relative spend on pay compared with dividends paid to Unilever shareholders and underlying earnings. Underlying
earnings represent the underlying profit attributable to Unilever shareholders, adjusted to eliminate various items, and provides a good reference
point to compare spend on pay.

RELATIVE IMPORTANCE OF SPEND ON PAY

Underlying
earnings*

Dividends paid
to Unilever
shareholders

Total
staff costs

4.2%

0.8%

-2.4%

€0m

€1,000m

€2,000m

€3,000m

€4,000m

€5,000m

€6,000m

€7,000m

2018

2017

In calculating underlying profit attributable to shareholders’ equity, net profit attributable to shareholders' equity is adjusted to eliminate the post-tax impact of
non-underlying items in operating profit and any other significant unusual terms within net profit but not operating profit (see note 7 on page 96 for details).

Governance ReportAnnual Report on Form 20-F 2018
THE COMPENSATION COMMITTEE
The Committee’s membership was further refreshed in 2018. Vittorio Colao, Marijn Dekkers and Mary Ma served throughout this period, with
Vittorio Colao being appointed Chair on 3 May 2018, upon Ann Fudge’s retirement; Andrea Jung joined the Committee on the same date.

The Committee reviewed its terms of reference during the year. The Committee’s revised terms of reference are contained within ‘The Governance
of Unilever’, and are also set out on our website.

www.unilever.com/investor-relations/agm-and-corporate-governance/

As part of the Board evaluation carried out in 2018, the Boards evaluated the performance of the Committee. The Committee also carried out
an assessment of its own performance in 2018. While overall the Committee members concluded that the Committee is performing effectively,
the Committee has agreed to further enhance its effectiveness by monitoring the responsiveness of the Reward Framework to rapidly evolving
market conditions and adding a finance briefing session on the continued appropriateness of performance measures for incentive plans.

ADVISERS
While it is the Committee’s responsibility to exercise independent judgement, the Committee does request advice from management and
professional advisers, as appropriate, to ensure that its decisions are fully informed given the internal and external environment.

Tom Gosling of PricewaterhouseCoopers (PwC) provided the Committee with independent advice on various matters it considered. During 2018,
the wider PwC firm has also provided tax and consultancy services to Unilever including tax compliance, transfer pricing, other tax-related
services, contract compliance reviews, internal audit advice and secondees, third-party risk and compliance advice, cyber security advice,
sustainability assurance and consulting; PwC has also been assisting with financial due diligence on M&A transactions undertaken by the
Unilever Group. PwC is a member of the Remuneration Consultants Group and, as such, voluntarily operates under the code of conduct in
relation to executive remuneration consulting in the UK, which is available online.

www.remunerationconsultantsgroup.com (Code of Conduct: Executive Remuneration Consulting)

The Committee is satisfied that the PwC engagement partner and team, which provide remuneration advice to the Committee, do not have
connections with Unilever N.V. or Unilever PLC that might impair their independence. The Committee reviewed the potential for conflicts of
interest and judged that there were appropriate safeguards against such conflicts. The fees paid to PwC in relation to advice provided to the
Committee in the year to 31 December 2018 were £146,650. This figure is calculated based on time spent and expenses incurred for the majority
of advice provided, but on occasion for specific projects a fixed fee may be agreed.

During the year, the Committee also sought input from the CEO (Paul Polman), the Chief Human Resources Officer (Leena Nair) and the EVP
Global Head of Reward (Peter Newhouse) on various subjects including the remuneration of senior management. No individual Executive
Director was present when their own remuneration was being determined to ensure a conflict of interest did not arise, although the Committee
has separately sought and obtained Executive Directors’ own views when determining the amount and structure of their remuneration before
recommending individual packages to the Boards for approval. The Committee also received legal and governance advice from the Chief Legal
Officer and Group Secretary (Ritva Sotamaa) and the General Counsel – Executive Remuneration & Employment (Margot Fransen).

SHAREHOLDER VOTING
Unilever remains committed to ongoing shareholder dialogue and takes an active interest in voting outcomes. In the event of a substantial vote
against a resolution in relation to Directors’ remuneration, Unilever would seek to understand the reasons for any such vote and would set out in
the following Annual Report and Accounts any actions in response to it (as set out in the Letter from the Chair on page 50 in relation to our further
engagement with shareholders following last year’s voting on our Remuneration Policy). The following table sets out actual voting in respect of
our previous report:

Voting outcome (% of votes)

2017 Directors’ Remuneration Report (excluding the Directors’ Remuneration Policy) (2018 AGM)(a)
2017 Directors’ Remuneration Policy (2018 AGM)(b)
2017 Directors’ Remuneration Policy (2018 AGM)(c)

PLC

(a) 18,758,929 votes were withheld (approximately 2.09% of share capital represented on 2 May 2018).
(b) 38,734,868 votes were withheld (approximately 4.31% of share capital represented on 2 May 2018).
(c) 15,018,135 votes were withheld (approximately 1.03% of share capital represented on 3 May 2018).

For

Against

97.19%

64.19%

73.06%

2.81%

35.81%

26.94%

The Directors’ Remuneration Report is not subject to a shareholder vote in the Netherlands. It has been approved by the Boards, and signed on
their behalf by Ritva Sotamaa, Chief Legal Officer and Group Secretary.

Governance ReportAnnual Report on Form 20-F 2018FINANCIAL STATEMENTS
STATEMENT OF DIRECTORS’ RESPONSIBILITIES

ANNUAL ACCOUNTS
The Directors are required by Part 9 of Book 2 of the Civil Code in the
Netherlands and by the UK Companies Act 2006 to prepare accounts
for each financial year which give a true and fair view of the state of
affairs of the Unilever Group, and the NV and PLC entities, as at the
end of the financial year and of the profit or loss and cash flows for
that year.

The Directors consider that, in preparing the accounts, the Group
and the NV and PLC entities have used the most appropriate
accounting policies, consistently applied and supported by reasonable
and prudent judgements and estimates, and that all International
Financial Reporting Standards as adopted by the EU and as issued
by the International Accounting Standards Board (in the case of the
consolidated financial statements), Financial Reporting Standard 101
‘Reduced Disclosure Framework’ (FRS 101) and Dutch law (in the
case of the NV parent company accounts) which they consider to be
applicable have been followed.

The Directors have responsibility for ensuring that NV and PLC keep
accounting records which disclose with reasonable accuracy their
financial position and which enable the Directors to ensure that the
accounts comply with the relevant legislation. They also have a general
responsibility for taking such steps as are reasonably open to them to
safeguard the assets of the Group, and to prevent and detect fraud and
other irregularities.

This statement, which should be read in conjunction with the
Independent Auditors’ reports, is made with a view to distinguishing
for shareholders the respective responsibilities of the Directors and
of the auditors in relation to the accounts.

A copy of the financial statements of the Unilever Group is placed on
our website at www.unilever.com/investorrelations. The maintenance
and integrity of the website are the responsibility of the Directors, and
the work carried out by the auditors does not involve consideration of
these matters. Accordingly, the auditors accept no responsibility for
any changes that may have occurred to the financial statements since
they were initially placed on the website. Legislation in the UK and the
Netherlands governing the preparation and dissemination of financial
statements may differ from legislation in other jurisdictions.

INDEPENDENT AUDITORS AND DISCLOSURE OF
INFORMATION TO AUDITORS
UK law sets out additional responsibilities for the Directors of PLC
regarding disclosure of information to auditors. To the best of each
of the Directors’ knowledge and belief, and having made appropriate
enquiries, all information relevant to enabling the auditors to provide
their opinions on PLC’s consolidated and parent company accounts
has been provided. Each of the Directors has taken all reasonable
steps to ensure their awareness of any relevant audit information
and to establish that Unilever PLC’s auditors are aware of any
such information.

DIRECTORS’ RESPONSIBILITY STATEMENT
Each of the Directors confirms that, to the best of his or her knowledge:
• The Unilever Annual Report and Accounts 2018, taken as a whole,
is fair, balanced and understandable, and provides the information
necessary for shareholders to assess the Group’s position and
performance, business model and strategy;

• The financial statements which have been prepared in accordance
with International Financial Reporting Standards as adopted by the
EU and as issued by the International Accounting Standards Board
(in the case of the consolidated financial statements) and Financial
Reporting Standard 101 ‘Reduced Disclosure Framework’ (FRS 101)
and UK accounting standards and Part 9 of Book 2 of the Dutch Civil
Code (in the case of the NV parent company accounts), give a true
and fair view of the assets, liabilities, financial position and profit or
loss of the Group and the undertakings included in the consolidation
taken as a whole; and

• The Strategic Report includes a fair review of the development and
performance of the business and the position of the Group and
the undertakings included in the consolidation taken as a whole,
together with a description of the principal risks and uncertainties
that they face.

The Directors and their roles are listed on pages 3 and 36.

GOING CONCERN
The activities of the Group, together with the factors likely to affect
its future development, performance, the financial position of the
Group, its cash flows, liquidity position and borrowing facilities are
described on pages 1 to 26. In addition, we describe in notes 15 to 18
on pages 104 to 120 the Group’s objectives, policies and processes
for managing its capital; its financial risk management objectives;
details of its financial instruments and hedging activities and its
exposures to credit and liquidity risk. Although not assessed over
the same period as going concern, the viability of the Group has
been assessed on page 28.

The Group has considerable financial resources together with
established business relationships with many customers and
suppliers in countries throughout the world. As a consequence, the
Directors believe that the Group is well placed to manage its business
risks successfully despite the current uncertain outlook.

After making enquiries, the Directors consider it appropriate to adopt
the going concern basis of accounting in preparing this Annual Report
and Accounts.

INTERNAL AND DISCLOSURE CONTROLS AND PROCEDURES
Please refer to pages 28 and 29 for a discussion of Unilever’s principal
risk factors and to pages 29 to 33 for commentary on the Group’s
approach to risk management and control.

Financial StatementsAnnual Report on Form 20-F 2018INDEPENDENT AUDITORS’ REPORTS

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMS

To the Shareholders and Board of Directors
Unilever N.V. and Unilever PLC:

OPINIONS ON THE CONSOLIDATED FINANCIAL STATEMENTS AND INTERNAL CONTROL OVER FINANCIAL REPORTING
We have audited the accompanying consolidated balance sheets of the Unilever Group (Unilever N.V. and Unilever PLC, together with their
subsidiaries) as of 31 December 2018 and 2017, the related consolidated income statements, consolidated statements of comprehensive
income, consolidated statements of changes in equity, and consolidated cash flow statements for each of the years in the three-year period
ended 31 December 2018, and the related notes on pages 75 to 127 of the Unilever Group’s Annual Report (excluding note 25 on page 126)
and the Guarantor financial information included in the Guarantor Statements on pages 158 to 162 of this Form 20-F (hereafter referred to as
Consolidated Financial Statements). We also have audited the Unilever Group’s internal control over financial reporting as of 31 December 2018,
based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the
Treadway Commission.

In our opinion, the Consolidated Financial Statements referred to above present fairly, in all material respects, the financial position of the
Unilever Group as of 31 December 2018 and 2017, and the results of its operations and its cash flows for each of the years in the three-year
period ended 31 December 2018, 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 Unilever Group maintained, in all
material respects, effective internal control over financial reporting as of 31 December 2018, based on criteria established in Internal Control –
Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

The Unilever Group acquired Adityaa Milk, Equilibra, Betty Ice, Denny Ice and Vegetarian Butcher on 27 September 2018, 1 October 2018,
1 November 2018, 3 December 2018 and 31 December 2018, respectively, and management excluded from its assessment of the effectiveness of
the Unilever Group’s internal control over financial reporting as of 31 December 2018, Adityaa Milk, Equilibra, Betty Ice, Denny Ice and Vegetarian
Butcher’s internal control over financial reporting associated with approximately 0.5% of the Unilever Group’s total assets and approximately
0.02% of the Unilever Group’s turnover included in the Consolidated Financial Statements of the Unilever Group as of and for the year ended
31 December 2018. Our audit of internal control over financial reporting of the Unilever Group also excluded an evaluation of the internal control
over financial reporting of Adityaa Milk, Equilibra, Betty Ice, Denny Ice and Vegetarian Butcher.

BASIS FOR OPINIONS
The Unilever Group’s management is responsible for these Consolidated Financial Statements, 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 on page 156 of this Form 20-F. Our responsibility is to express
an opinion on the Unilever Group’s Consolidated Financial Statements and an opinion on the Unilever Group’s internal control over financial
reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States)
(PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable
rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. 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, whether due to error or fraud,
and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the Consolidated Financial Statements included performing procedures to assess the risks of material misstatement of the
Consolidated Financial Statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures
included examining, on a test basis, evidence regarding the amounts and disclosures in the Consolidated Financial Statements. Our audits also
included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation
of the Consolidated Financial Statements. 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.

DEFINITION AND LIMITATIONS OF INTERNAL CONTROL OVER FINANCIAL REPORTING
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 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 (1) pertain to the maintenance of records that, in
reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance
that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting
principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and
directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use,
or disposition of the company’s assets that could have a material effect on the 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.

KPMG LLP
London, United Kingdom

KPMG Accountants N.V.
Amsterdam, the Netherlands

We have served as the Unilever Group’s auditors since 2014.

6 March 2019

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Financial StatementsAnnual Report on Form 20-F 2018CONSOLIDATED FINANCIAL STATEMENTS
UNILEVER GROUP

CONSOLIDATED INCOME STATEMENT
for the year ended 31 December

Turnover

Operating profit

After (charging)/crediting non-underlying items

Net finance costs

Finance income
Finance costs
Pensions and similar obligations
Net finance cost non-underlying items

Net monetary gain/(loss) arising from hyperinflationary economies

Share of net profit/(loss) of joint ventures and associates
After crediting non-underlying items

Other income/(loss) from non-current investments and associates

Profit before taxation

Taxation
After (charging)/crediting tax impact of non-underlying items

Net profit

Attributable to:
Non-controlling interests
Shareholders’ equity

Combined earnings per share
Basic earnings per share (€)
Diluted earnings per share (€)

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31 December

Net profit

Other comprehensive income

Items that will not be reclassified to profit or loss, net of tax:
Gains/(losses) on equity instruments measured at fair value through other comprehensive income(a)
Remeasurement of defined benefit pension plans

Items that may be reclassified subsequently to profit or loss, net of tax:
Gains/(losses) on cash flow hedges
Currency retranslation gains/(losses)
Fair value gains/(losses) on financial instruments(a)

Total comprehensive income

Attributable to:
Non-controlling interests
Shareholders’ equity

Notes

€ million
2018

€ million
2017

€ million
2016

50,982

53,715

52,713

12,535

8,857

7,801

3,176

(481)

135
(591)
(25)
–

122

185
32

(543)

(877)

157
(556)
(96)
(382)

–

155
–

(823)

(563)

115
(584)
(94)
–

–

127
–

104

12,383

8,153

7,469

(2,575)
(288)

(1,667)
655

(1,922)
213

9,808

6,486

5,547

419
9,389

3.50
3.48

433
6,053

2.16
2.15

363
5,184

1.83
1.82

Notes

€ million
2018

€ million
2017

€ million
2016

9,808

6,486

5,547

15B

51
(328)

(55)
(861)
–

–
1,282

(68)
(983)
(7)

–
(980)

–
217
(15)

8,615

6,710

4,769

407
8,208

381
6,329

374
4,395

(a) Classification has changed following adoption of IFRS 9. See note 1 for further details.

References in the consolidated income statement, consolidated statement of comprehensive income, consolidated statement of changes in
equity, consolidated balance sheet and consolidated cash flow statement relate to notes on pages 79 to 127, which form an integral part of the
consolidated financial statements.

Financial StatementsAnnual Report on Form 20-F 2018
CONSOLIDATED FINANCIAL STATEMENTS
UNILEVER GROUP CONTINUED

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Consolidated statement of changes in equity

31 December 2015

Profit or loss for the period

Other comprehensive income net of tax:
Fair value gains/(losses) on financial instruments(a)
Remeasurement of defined benefit pension plans net of tax
Currency retranslation gains/(losses)

Total comprehensive income
Dividends on ordinary capital
Movements in treasury shares(d)
Share-based payment credit(e)
Dividends paid to non-controlling interests
Currency retranslation gains/(losses) net of tax
Other movements in equity

31 December 2016

Profit or loss for the period

Other comprehensive income net of tax:
Fair value gains/(losses) on financial instruments(a)
Remeasurement of defined benefit pension plans net of tax
Currency retranslation gains/(losses)

Total comprehensive income
Dividends on ordinary capital
Repurchase of shares(b)
Other movements in treasury shares(d)
Share-based payment credit(e)
Dividends paid to non-controlling interests
Currency retranslation gains/(losses) net of tax
Other movements in equity

31 December 2017

Hyperinflation restatement to 1 January 2018 (see note 1)

1 January 2018 after restatement

Profit or loss for the period

Other comprehensive income,net of tax:
Gains/(losses) on:(a)
Equity instruments

Cash flow hedges
Remeasurement of defined benefit pension plans
Currency retranslation gains/(losses)

Total comprehensive income
Dividends on ordinary capital
Repurchase of shares(b)
Cancellation of treasury shares(c)
Other movements in treasury shares(d)
Share-based payment credit(e)
Dividends paid to non-controlling interests
Currency retranslation gains/(losses) net of tax
Hedging gain/(loss) transferred to non-financial assets
Other movements in equity(f)
31 December 2018

€ million
Called
up share
capital

€ million
Share
premium
account

Other
reserves

Retained
profit

€ million

484

152

(7,816)

22,619

–

–
–
–

–
–
–
–
–
–
–

–

–
–
–

–
–
–
–
–
(18)
–

–

5,184

(15)
–
189

174
–
(45)
–
–
–
244

–
(980)
17

4,221
(3,600)
(213)
198
–
–
(46)

484

134

(7,443)

23,179

–

–
–
–

–
–
–
–
–
–
(4)
–

–

6,053

(76)
–
(903)

(979)
–
(5,014)
(30)
–
–
–
(167)

–
1,282
(27)

7,308
(3,916)
–
(174)
284
–
–
(33)

Total

15,439

5,184

(15)
(980)
206

4,395
(3,600)
(258)
198
–
(18)
198

16,354

6,053

(76)
1,282
(930)

6,329
(3,916)
(5,014)
(204)
284
–
(4)
(200)

130

(13,633)

26,648

13,629

–

393

130

(13,633)

27,041

14,022

–

–
–
–

–
–
–
–
–
–
–
(1)
–
–
129

–

9,389

(56)
–
(836)

(841)
–
(6,020)
5,069
(8)
–
–
–
71
76
(15,286)

–

–
(330)
(10)

9,049
(4,081)
–
(5,049)
(245)
196
–
–
–
(646)
26,265

(56)
(330)
(846)

8,208
(4,081)
(6,020)
–
(253)
196
–
(1)
71
(570)
11,572

–

–
–
–

–
–
–
–
–
–
–
–

484

–

484

–

–
–
–

–
–
–
(20)
–
–
–
–
–
–
464

€ million
Non-
controlling
interests

643

363

–
–
11

374
–
–
–
(364)
–
(27)

626

433

1
–
(53)

381
–
–
–
–
(345)
–
96

758

–

758

419

–

1
2
(15)

407
–
–
–
–
–
(342)
–
–
(103)
720

€ million

Total
equity

16,082

5,547

(15)
(980)
217

4,769
(3,600)
(258)
198
(364)
(18)
171

16,980

6,486

(75)
1,282
(983)

6,710
(3,916)
(5,014)
(204)
284
(345)
(4)
(104)

14,387

393

14,780

9,808

(55)
(328)
(861)

8,615
(4,081)
(6,020)
–
(253)
196
(342)
(1)
71
(673)
12,292

(a) Classification in 2018 has changed following adoption of IFRS 9. See note 1 for further details.
(b) Repurchase of shares reflects the cost of acquiring ordinary shares as part of the share buyback programmes announced on 19 April 2018 and 6 April 2017.
(c) During 2018 122,965,077 PLC ordinary shares were cancelled. The amount paid to repurchase these shares was initially recognised in other reserves and is

transferred to retained profit on cancellation.

(d) Includes purchases and sales of treasury shares other than the share buyback programme, transfer from treasury shares to retained profit of share-settled

schemes arising from prior years and differences between exercise and grant price of share options.

(e) The share-based payment credit relates to the non-cash charge recorded in operating profit in respect of the fair value of share options and awards granted to

employees.
Includes a €662 million premium paid for purchase of the non-controlling interest in Unilever South Africa from Remgro.

(f)

Financial StatementsAnnual Report on Form 20-F 2018CONSOLIDATED BALANCE SHEET
as at 31 December

Assets
Non-current assets
Goodwill
Intangible assets
Property, plant and equipment
Pension asset for funded schemes in surplus
Deferred tax assets
Financial assets
Other non-current assets

Current assets
Inventories
Trade and other current receivables
Current tax assets
Cash and cash equivalents
Other financial assets
Assets held for sale

Total assets

Liabilities
Current liabilities
Financial liabilities
Trade payables and other current liabilities
Current tax liabilities
Provisions
Liabilities held for sale

Non-current liabilities
Financial liabilities
Non-current tax liabilities
Pensions and post-retirement healthcare liabilities:
Funded schemes in deficit
Unfunded schemes
Provisions
Deferred tax liabilities
Other non-current liabilities

Total liabilities

Equity
Shareholders’ equity

Called up share capital
Share premium account
Other reserves
Retained profit

Non-controlling interests

Total equity

Total liabilities and equity

These financial statements have been approved by the Directors.

The Board of Directors
6 March 2019

Notes

€ million
2018

€ million
2017

17A

15C

15A

15B

17,341
12,152
10,347
1,728
1,117
642
648

43,975

4,301
6,485
472
3,230
874
119

16,881
11,520
10,411
2,173
1,085
675
557

43,302

3,962
5,222
488
3,317
770
3,224

15,481

59,456

16,983

60,285

3,235
14,457
1,445
624
11

19,772

7,968
13,426
1,088
525
170

23,177

21,650
174

16,462
118

1,209
1,393
697
1,923
346

1,225
1,509
794
1,913
700

27,392

47,164

22,721

45,898

464
129
(15,286)
26,265

11,572
720

12,292

59,456

484
130
(13,633)
26,648

13,629
758

14,387

60,285

Financial StatementsAnnual Report on Form 20-F 2018CONSOLIDATED FINANCIAL STATEMENTS
UNILEVER GROUP CONTINUED

CONSOLIDATED CASH FLOW STATEMENT
for the year ended 31 December

Net profit
Taxation
Share of net profit of joint ventures/associates and other income/(loss) from
non-current investments and associates
Net monetary gain arising from hyperinflationary economies
Net finance costs

Operating profit
Depreciation, amortisation and impairment
Changes in working capital:

Inventories
Trade and other receivables
Trade payables and other liabilities

Pensions and similar obligations less payments
Provisions less payments
Elimination of (profits)/losses on disposals
Non-cash charge for share-based compensation
Other adjustments(a)

Cash flow from operating activities
Income tax paid

Net cash flow from operating activities

Interest received
Purchase of intangible assets
Purchase of property, plant and equipment
Disposal of property, plant and equipment
Acquisition of group companies, joint ventures and associates
Disposal of group companies, joint ventures and associates
Acquisition of other non-current investments
Disposal of other non-current investments
Dividends from joint ventures, associates and other non-current investments
(Purchase)/sale of financial assets

Net cash flow (used in)/from investing activities

Dividends paid on ordinary share capital
Interest and preference dividends paid
Net change in short-term borrowings
Additional financial liabilities
Repayment of financial liabilities
Capital element of finance lease rental payments
Buyback of preference shares
Repurchase of shares
Other movements on treasury shares
Other financing activities

Net cash flow (used in)/from financing activities

Net increase/(decrease) in cash and cash equivalents

Cash and cash equivalents at the beginning of the year

Effect of foreign exchange rate changes

Cash and cash equivalents at the end of the year

Notes

€ million
2018

€ million
2017

€ million
2016

9,808
2,575

(207)
(122)
481

12,535
1,747
(793)

(471)
(1,298)
976

(128)
55
(4,299)
196
(266)

9,047
(2,294)

6,753

110
(203)
(1,329)
108
(1,336)
7,093
(94)
151
154
(10)

4,644

(4,066)
(477)
(4,026)
10,595
(6,594)
(10)
–
(6,020)
(257)
(693)

(11,548)

6,486
1,667

(173)
–
877

8,857
1,538
(68)

(104)
(506)
542

(904)
200
(298)
284
(153)

9,456
(2,164)

7,292

154
(158)
(1,509)
46
(4,896)
561
(317)
251
138
(149)

(5,879)

(3,916)
(470)
2,695
8,851
(2,604)
(14)
(448)
(5,014)
(204)
(309)

(1,433)

(151)

(20)

3,169

3,198

(9)

17A

3,090

3,169

5,547
1,922

(231)
–
563

7,801
1,464
51

190
142
(281)

(327)
65
127
198
(81)

9,298
(2,251)

7,047

105
(232)
(1,804)
158
(1,731)
30
(208)
173
186
135

(3,188)

(3,609)
(472)
258
6,761
(5,213)
(35)
–
–
(257)
(506)

(3,073)

786

2,128

284

3,198

(a) 2018 includes a non-cash credit of €277 million from early settlement of contingent consideration relating to Blueair.

The cash flows of pension funds (other than contributions and other direct payments made by the Group in respect of pensions and similar
obligations) are not included in the Group cash flow statement.

Financial StatementsAnnual Report on Form 20-F 2018NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
UNILEVER GROUP

1. ACCOUNTING INFORMATION AND POLICIES
The accounting policies adopted are the same as those which were
applied for the previous financial year, except as set out below under
the heading ‘Recent accounting developments’.

UNILEVER
The two parent companies, NV and PLC, together with their group
companies, operate as a single economic entity (the Unilever Group,
also referred to as Unilever or the Group). NV and PLC have the same
Directors and are linked by a series of agreements, including an
Equalisation Agreement, which are designed so that the positions of
the shareholders of both companies are as closely as possible the
same as if they held shares in a single company.

The Equalisation Agreement provides that both companies adopt the
same accounting principles. It also requires that dividends and other
rights and benefits attaching to each ordinary share of NV, be equal in
value to those rights and benefits attaching to each ordinary share of
PLC, as if each such unit of capital formed part of the ordinary share
capital of one and the same company.

BASIS OF CONSOLIDATION
Due to the operational and contractual arrangements referred to
above, NV and PLC form a single reporting entity for the purposes
of presenting consolidated financial statements. Accordingly, the
financial statements of Unilever are presented by both NV and PLC as
their respective consolidated financial statements. Group companies
included in the consolidation are those companies controlled by NV
or PLC. Control exists when the Group has the power to direct the
activities of an entity so as to affect the return on investment.

The net assets and results of acquired businesses are included in
the consolidated financial statements from their respective dates of
acquisition, being the date on which the Group obtains control. The
results of disposed businesses are included in the consolidated financial
statements up to their date of disposal, being the date control ceases.

Intra-group transactions and balances are eliminated.

COMPANIES LEGISLATION AND ACCOUNTING STANDARDS
The consolidated financial statements have been prepared in
accordance with International Financial Reporting Standards (IFRS)
as adopted by the European Union (EU) and IFRIC Interpretations.
They are also in compliance with IFRS as issued by the International
Accounting Standards Board (IASB).

These financial statements are prepared under the historical cost
convention unless otherwise indicated.

These financial statements have been prepared on a going concern
basis. Refer to the going concern statement on page 66.

ACCOUNTING POLICIES
Accounting policies are included in the relevant notes to the
consolidated financial statements. These are presented as text
highlighted in grey on pages 79 to 127. The accounting policies below
are applied throughout the financial statements.

FOREIGN CURRENCIES
The consolidated financial statements are presented in euros. The
functional currencies of NV and PLC are euros and sterling respectively.
Items included in the financial statements of individual group companies
are recorded in their respective functional currency which is the currency
of the primary economic environment in which each entity operates.

Foreign currency transactions in individual group companies are
translated into functional currency using exchange rates at the date of
the transaction. Foreign exchange gains and losses from settlement
of these transactions, and from translation of monetary assets and
liabilities at year-end exchange rates, are recognised in the income
statement except when deferred in equity as qualifying hedges.

In preparing the consolidated financial statements, the balances
in individual group companies are translated from their functional
currency into euros. Apart from the financial statements of group
companies in hyperinflationary economies (see below), the income

statement, the cash flow statement and all other movements in assets
and liabilities are translated at average rates of exchange as a proxy for
the transaction rate, or at the transaction rate itself if more appropriate.
Assets and liabilities are translated at year-end exchange rates.

The financial statements of group companies whose functional currency
is the currency of a hyperinflationary economy are adjusted for inflation
and then translated into euros. Amounts shown for prior years for
comparative purposes are not modified. To determine the existence
of hyperinflation, the Group assesses the qualitative and quantitative
characteristics of the economic environment of the country, such as the
cumulative inflation rate over the previous three years.

The ordinary share capital of NV and PLC is translated in accordance
with the Equalisation Agreement. The difference between the value for
PLC and the value by applying the year-end rate of exchange is taken
to other reserves (see note 15B on page 106).

The effect of exchange rate changes during the year on net assets of
foreign operations is recorded in equity. For this purpose net assets
include loans between group companies and any related foreign
exchange contracts where settlement is neither planned nor likely to
occur in the foreseeable future.

The Group applies hedge accounting to certain exchange differences
arising between the functional currencies of a foreign operation and
NV or PLC as appropriate, regardless of whether the net investment
is held directly or through an intermediate parent. Differences arising
on retranslation of a financial liability designated as a foreign currency
net investment hedge are recorded in equity to the extent that the
hedge is effective. These differences are reported within profit or loss
to the extent that the hedge is ineffective.

Cumulative exchange differences arising since the date of transition
to IFRS of 1 January 2004 are reported as a separate component of
other reserves. In the event of disposal or part disposal of an interest
in a group company either through sale or as a result of a repayment of
capital, the cumulative exchange difference is recognised in the income
statement as part of the profit or loss on disposal of group companies.

CLASSIFICATION OF ARGENTINA AS
A HYPER-INFLATIONARY ECONOMY
The Argentinian economy was designated as hyperinflationary from
1 July 2018. As a result, application of IAS 29 ‘Financial Reporting in
Hyperinflationary Economies’ has been applied to all Unilever entities
whose functional currency is the Argentinian Peso. IAS 29 requires
that adjustments are applicable from the start of the relevant entity’s
reporting period. For Unilever that is from 1 January 2018. The
application of IAS 29 includes:
• Adjustment of historical cost non-monetary assets and liabilities for
the change in purchasing power caused by inflation from the date of
initial recognition to the balance sheet date;

• Adjustment of the income statement for inflation during the

reporting period;

• The income statement is translated at the period end foreign

exchange rate instead of an average rate; and

• Adjustment of the income statement to reflect the impact of

inflation and exchange rate movement on holding monetary assets
and liabilities in local currency.

The main effects on the Group consolidated financial statements for
2018 are:
• Total assets increased by €538 million driven by an increase of €369
million to goodwill (see note 9) and €171 million due to property,
plant and equipment (see note 10);

• Opening retained profit increased by €393 million reflecting the

impact of adjusting the historical cost of non-monetary assets and
liabilities from the date of their initial recognition to 1 January 2018
for the effect of inflation;

• Turnover is reduced by €75 million;
• Operating profit is reduced by €37 million; and
• A net monetary gain of €122 million is recognised from the inflation

and exchange rate movements in the year on the net monetary
items held in Argentinian Peso.

Financial StatementsAnnual Report on Form 20-F 2018NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
UNILEVER GROUP CONTINUED

1. ACCOUNTING INFORMATION AND POLICIES CONTINUED

CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
The preparation of financial statements requires management to
make judgements and estimates in the application of accounting
policies that affect the reported amounts of assets, liabilities, income
and expenses. Actual results may differ from these estimates.
Estimates and judgements are continuously evaluated and are based
on historical experience and other factors, including expectations
of future events that are believed to be reasonable. Revisions to
accounting estimates are recognised in the period in which the
estimate is revised and in any future period affected.

The following judgements are those that management believe have
the most significant effect on the amounts recognised in the Group’s
financial statements:

• Separate presentation of items in the income statement – certain
items of income or expense are presented separately as non-
underlying items. These are excluded in several of our performance
measures, including underlying operating profit and underlying
earnings per share due to their nature and/or frequency of
occurrence. See note 3 for further details.

• Utilisation of tax losses and recognition of other deferred tax assets
– The Group operates in many countries and is subject to taxes in
numerous jurisdictions. Management uses judgement to assess the
recoverability of tax assets such as whether there will be sufficient
future taxable profits to utilise losses – see note 6B.

• Likelihood of occurrence of provisions and contingent liabilities – events
can occur where there is uncertainty over future obligations. Judgement
is required to determine if an outflow of economic resources is probable,
or possible but not probable. Where it is probable, a liability is recognised
and further judgement is used to determine the level of the provision.
Where it is possible but not probable, further judgement is used to
determine if the likelihood is remote, in which case no disclosures

are provided; if the likelihood is not remote then judgement is used
to determine the contingent liability disclosed. Unilever does not have
provisions and contingent liabilities for the same matters. External
advice is obtained for any material cases. See notes 6A, 19 and 20.

The following estimates are those that management believe have the
most significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next financial year are:

• Measurement of defined benefit obligations – the valuations of the

Group’s defined benefit pension plan obligations are dependent on a
number of assumptions. These include discount rates, inflation and
life expectancy of scheme members. Details of these assumptions
and sensitivities are in note 4B.

• Assumptions used in discounted cash flow projections – estimates

of future business performance, cash generation, long-term growth
and discount rates are used in our assessment of impairment of
assets at the balance sheet date. Details of the estimates used in
the impairment reviews for significant cash generating units are set
out in note 9; no reasonably plausible changes in a key assumption
would cause an impairment.

• Measurement of consideration and assets and liabilities acquired

as part of business combinations – contingent consideration
depends on an acquired business achieving targets within a fixed
period. Estimates of future performance are required to calculate
the obligations at the time of acquisition and at each subsequent
reporting date. See note 21 for further information. Additionally,
estimates are required to value the assets and liabilities acquired
in business combinations. Intangible assets such as brands are
commonly a core part of an acquired business as they allow us to
obtain more value than would otherwise be possible.

RECENT ACCOUNTING DEVELOPMENTS

ADOPTED BY THE GROUP
The Group applied for the first-time amendments to the following standards from 1 January 2018.

APPLICABLE
STANDARD

KEY REQUIREMENTS

IMPACT ON GROUP

IFRS 9
‘Financial Instruments’

This standard introduces new requirements
in three areas:

Classification and measurement:
Financial assets are now classified based on
1) the objective of the Group in holding the
asset and
2) the contractual cash flows.

Impairment:
A new expected credit loss model is used for
calculating impairment on financial assets.
A loss event does not have to occur before
credit losses are recognised.

Hedge accounting:
New general hedge accounting
requirements allow hedge accounting based
on the Group’s risk management policies
rather than only prescribed scenarios.

On 1 January 2018, the Group adopted IFRS 9 ‘Financial Instruments’,
which replaced IAS 39 ‘Financial Instruments – Recognition and
Measurement’. As there was no material impact from the adoption
of this standard, the Group has not restated the comparative
information relating to prior years.

Classification and measurement:
On 1 January 2018, the Group reclassified its financial assets to the
new categories based on the Group’s reason for holding the assets
and the nature of the cash flows from the assets. See note 17A for
further information. There were no changes to the classification or
measurement of the Group’s financial liabilities.

Impairment:
From 1 January 2018, the Group implemented an expected credit
loss impairment model for financial assets. For trade receivables, the
calculation methodology has been updated to consider expected losses
based on ageing profile. The adoption of the expected loss approach
has not resulted in a material change in impairment provision for any
financial asset.

Hedge accounting:
The Group applied the hedge accounting requirements of IFRS 9
prospectively. At the date of initial application all of the Group’s
existing hedge relationships were eligible to be treated as
continuing hedge relationships.

Financial StatementsAnnual Report on Form 20-F 20181. ACCOUNTING INFORMATION AND POLICIES CONTINUED

APPLICABLE
STANDARD

IFRS 15 ‘Revenue
from Contracts with
Customers’

KEY REQUIREMENTS

IMPACT ON GROUP

The standard clarifies the accounting for
bundled services and identifying each
‘performance obligation’ in contractual
arrangements. It also provides more guidance
on the measurement of revenue contracts
which have discounts, rebates, payments
to suppliers and consignment stock.

On 1 January 2018 the Group adopted IFRS 15 ‘Revenue from
Contracts with Customers’ with no impact as the accounting
policies were already in line with the new standard.

All other standards or amendments to standards that have been issued by the IASB and were effective by 1 January 2018 were not applicable
to Unilever.

NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS OF EXISTING STANDARDS THAT ARE NOT YET EFFECTIVE
AND HAVE NOT BEEN EARLY ADOPTED BY THE GROUP
The following new standards have been released but are not yet adopted by the Group. The expected impact and progress is shown below.

APPLICABLE
STANDARD

KEY REQUIREMENTS OR
CHANGES IN ACCOUNTING POLICY

IMPLEMENTATION PROGRESS
AND EXPECTED IMPACT

IFRS 16 ‘Leases’

Effective from the
year ended
31 December 2019

The standard has been
endorsed by the EU

This standard changes the recognition,
measurement, presentation and disclosure
of leases. In particular it requires lessees
to record all leases on the balance sheet
with exemptions available for low value and
short-term leases. At the commencement
of a lease, a lessee will recognise lease
payments (lease liability) and an asset
representing the right to use the asset
during the lease term (right-of-use asset).
Lessees will subsequently reduce the
lease liability when paid and recognise
depreciation on the right-of-use asset.

A lease liability is remeasured upon the
occurrence of certain events such as a
change in the lease term or a change in
an index or rate used to determine lease
payments. The remeasurement normally
also adjusts the right-of-use asset.

The standard has no impact on the actual
cash flows of a group. However the
standard requires the capitalisation, and
subsequent depreciation, of costs that are
currently expensed as paid which impacts
disclosures of cash flows within the cash
flow statement. The amounts currently
expensed as operating cash outflows which
will instead be capitalised are presented as
financing cash outflows.

The preparations for this standard are substantially complete.
The Group intends on adopting the ‘full retrospective’ approach and
in our 2019 reporting the comparative information relating to prior
years will be restated.

The Group has reviewed all relevant contracts to identify leases. This
review included an assessment about whether the contract depends
on a specific asset, whether the Group obtains substantially all the
economic benefits from the use of that asset and whether the Group
has the right to direct the use of that asset. Based on this assessment,
we calculated the restatement impact as at the transition date. From
1 January 2019 the Group will focus on ensuring that the revised
process for identifying and accounting for leases is followed.

The Group intends to use the exemptions provided by IFRS 16 for
short-term leases (less than a year) and leases for low-value assets.

The estimated impact of IFRS 16 on the Group’s financial
statements at 31 December 2018 is as follows:

Balance sheet:
The Group estimates that the adoption of IFRS 16 will result in
an increase in total assets of approximately €1.7 billion, split
between land and buildings of €1.3 billion and plant and machinery
of €0.4 billion.

Based on the geographies, this is approximately €0.5 billion in
Europe, €0.5 billion in The Americas and €0.7 billion in Asia/AMET/
RUB.

Financial liabilities are expected to increase by approximately
€1.9 billion.

Income statement:
The Group estimates that the adoption of IFRS 16 will result in
increased depreciation of approximately €470 million from the
right-of-use assets. This will offset the reduction in operating
lease expenses of around €550 million per year, resulting in an
overall increase in operating profit of €80 million. Finance costs are
expected to increase by approximately €90 million per year due
to the interest recognised on lease liabilities.

Statement of Cash Flows:
The Group estimates that the adoption of IFRS 16 will increase cash
flows from operating activities by approximately €550 million with
a related increase in cash flows used in financing activities of €550
million which relates to lease payments previously expensed as
paid.

Financial StatementsAnnual Report on Form 20-F 2018
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
UNILEVER GROUP CONTINUED

1. ACCOUNTING INFORMATION AND POLICIES CONTINUED

In addition to the above, based on an initial review the Group does not currently believe adoption of the following standard/amendments will have
a material impact on the consolidated results or financial position of the Group.

APPLICABLE
STANDARD

KEY REQUIREMENTS OR
CHANGES IN ACCOUNTING POLICY

IFRIC 23 ‘Uncertainty
over income tax
treatments’

This interpretation clarifies how entities should reflect uncertainties over income tax treatments, in particular
when assessing the outcome a tax authority might reach with full knowledge and information if it were to make
an examination. Based on preliminary work, the impact is estimated to be immaterial.

Effective from
the year ended
31 December 2019

The IFRIC Interpretation
has been endorsed by
the EU

IFRS 17 ‘Insurance
Contracts’

Effective from
the year ended
31 December 2021

The standard is not yet
endorsed by the EU

Amendments to IAS 19
‘Employee Benefits’

Effective from the year
ended 31 December 2019

The standard is not yet
endorsed by the EU

This standard introduces a new model for accounting for insurance contracts. Work continues to review existing
arrangements to determine the impact on adoption. Based on preliminary work the impact is estimated to
be immaterial.

The change requires that following plan amendments, curtailments or settlements, current service and net
interest costs for the remainder of the reporting period should be calculated in line with updated actuarial
assumptions. The amendment is to be applied prospectively.

All other standards or amendments to standards that have been issued by the IASB and are effective from 1 January 2019 onwards are not
applicable to Unilever.

2. SEGMENT INFORMATION

SEGMENTAL REPORTING
Beauty & Personal Care
Foods & Refreshment

Home Care

– primarily sales of skin care and hair care products, deodorants and oral care products.
– primarily sales of soups, bouillons, sauces, snacks, mayonnaise, salad dressings, margarines and spreads,
ice cream and tea-based beverages
– primarily sales of home care products, such as powders, liquids and capsules, soap bars and a wide range
of cleaning products.

REVENUE
Turnover comprises sales of goods after the deduction of discounts, sales taxes and estimated returns. It does not include sales between
group companies. Discounts given by Unilever include rebates, price reductions and incentives given to customers, promotional couponing and
trade communication costs. Accumulated experience is used to estimate the provision for discounts, using the most likely amount method;
revenue is only recognised to the extent that it is highly probable a significant reversal will not occur.

Turnover is recognised when control of the products being sold has transferred to our customer and when there are no longer any unfulfilled
obligations to the customer. This is generally on delivery to the customer but depending on individual customer terms, this can be at the time
of dispatch, delivery or upon formal customer acceptance. This is considered the appropriate point where the performance obligations in our
contracts are satisfied as Unilever no longer have control over the inventory.

Our customers have the contractual right to return goods only when authorised by Unilever. At 31 December 2018, an estimate has been made
of goods that will be returned and a liability has been recognised for this amount. An asset has also been recorded for the corresponding
inventory that is estimated to return to Unilever using a best estimate based on accumulated experience.

Some of our customers are distributors who may be able to return unsold goods in consignment arrangements. A liability is recognised where
we receive payment from a customer before transferring control of the goods being sold.

UNDERLYING OPERATING PROFIT
Underlying operating profit means operating profit before the impact of non-underlying items within operating profit (see note 3). Underlying
operating profit represents our measure of segment profit or loss as it is the primary measure used for the purpose of making decisions about
allocating resources and assessing performance of segments. Underlying operating margin is calculated as underlying operating profit divided
by turnover.

Financial StatementsAnnual Report on Form 20-F 20182. SEGMENT INFORMATION CONTINUED

The Group has revised its operating segments to align with the new structure under which the business is managed. Beginning 2018, operating
segment information is provided based on three product areas: Beauty & Personal Care, Foods & Refreshment and Home Care.

€ million
Beauty &
Personal Care

€ million
Foods &

Refreshment(a)

Notes

€ million
Home
Care

€ million

Total

2018

Turnover

Operating profit

Non-underlying items

Underlying operating profit

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

Significant non-cash charges:

Within underlying operating profit:

Depreciation and amortisation
Share-based compensation and other non-cash charges(b)

Within non-underlying items:
Impairment and other non-cash charges(c)

2017

Turnover

Operating profit

Non-underlying items

Underlying operating profit

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

Significant non-cash charges:

Within underlying operating profit:

Depreciation and amortisation
Share-based compensation and other non-cash charges(b)

Within non-underlying items:
Impairment and other non-cash charges(c)

2016

Turnover

Operating profit

Non-underlying items

Underlying operating profit

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

Significant non-cash charges:

Within underlying operating profit:

Depreciation and amortisation
Share-based compensation and other non-cash charges(b)

Within non-underlying items:
Impairment and other non-cash charges(c)

20,624

4,130

378

4,508

(1)

510

102

122

20,227

7,245

(3,711)

3,534

183

773

102

164

10,131

1,160

157

1,317

256

263

50,982

12,535

(3,176)

9,359

185

1,539

250

549

20,697

22,444

10,574

53,715

4,103

272

4,375

488

164

20,172

3,704

329

4,033

(5)

437

134

3,616

121

3,737

143

802

174

191

1,138

150

1,288

248

8,857

543

9,400

155

1,538

417

319

22,532

10,009

52,713

3,148

357

3,505

131

791

135

124

949

137

1,086

236

7,801

823

8,624

127

1,464

355

243

(a) Foods & Refreshment is reported together from 2018. For the prior year figures, Foods and Refreshment have been combined to align with the current structure.
(b) Other non-cash charges within underlying operating profit include movements in provisions from underlying activities, excluding movements arising from non-

underlying activities.

(c) Other non-cash charges within non-underlying items includes movements in restructuring provisions, movements in certain legal provisions (in 2018 and 2017),

and foreign exchange losses resulting from remeasurement of the Argentinian business (2016).

Transactions between the Unilever Group’s reportable segments are immaterial and are carried out on an arm’s length basis.

The Unilever Group is not reliant on revenues from transactions with any single customer and does not receive 10% or more of its revenues from
transactions with any single customer.

Segment assets and liabilities are not provided because they are not reported to or reviewed by our chief operating decision-maker, which is
Unilever Leadership Executive (ULE) as explained in the Corporate Governance Section.

Financial StatementsAnnual Report on Form 20-F 2018NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
UNILEVER GROUP CONTINUED

2. SEGMENT INFORMATION CONTINUED

The home countries of the Unilever Group are the Netherlands and the United Kingdom. Turnover and non-current assets for these two countries
combined, for the United States (being the largest country outside the home countries) and for all other countries are:

2018

Turnover
Non-current assets(d)

2017

Turnover
Non-current assets(d)

2016

Turnover
Non-current assets(d)

€ million
Netherlands/
United
Kingdom

€ million

United
States

Others

Total

3,679

4,070

8,305

38,998

50,982

12,193

24,225

40,488

3,849

3,781

8,532

11,820

41,334

23,768

53,715

39,369

3,819

4,770

8,263

11,696

40,631

23,358

52,713

39,824

(d) Non-current assets excluding financial assets, deferred tax assets and pension assets for funded schemes in surplus.

No other country had turnover or non-current assets (as shown above) greater than 10% of the Group total.

ADDITIONAL INFORMATION BY GEOGRAPHIES
Although the Group’s operations are managed by product area, we provide additional information based on geographies. The analysis of turnover
by geographical area is stated on the basis of origin.

2018

Turnover

Operating profit

Non-underlying items

Underlying operating profit

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

2017

Turnover

Operating profit

Non-underlying items

Underlying operating profit

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

2016

Turnover

Operating profit

Non-underlying items

Underlying operating profit

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

(e) Refers to Asia, Africa, Middle East, Turkey, Russia, Ukraine and Belarus.

€ million
Asia/

€ million
The
AMET/RUB(e) Americas

€ million € million

Europe

Total

22,868

16,020

12,094

50,982

4,777

(437)

4,340

3,586

4,172

12,535

(892)

(1,847)

(3,176)

2,694

2,325

9,359

–

114

185

23,266

3,802

306

4,108

17,525

3,086

(23)

3,063

112

12,924

53,715

1,969

260

2,229

8,857

543

9,400

155

22,445

17,105

13,163

52,713

3,275

254

3,529

(2)

2,504

401

2,905

108

2,022

168

2,190

7,801

823

8,624

127

Transactions between the Unilever Group’s geographical regions are immaterial and are carried out on an arm’s length basis.

Financial StatementsAnnual Report on Form 20-F 20183. OPERATING COSTS AND NON-UNDERLYING ITEMS

BRAND AND MARKETING INVESTMENT
Brand and marketing investment includes costs incurred for the purpose of building and maintaining brand equity and awareness. These include media,
advertising production, promotional materials and engagement with consumers. These costs are charged to the income statement as incurred.

RESEARCH AND DEVELOPMENT
Expenditure on research and development includes staff costs, material costs, depreciation of property, plant and equipment and other costs
directly attributable to research and product development activities. These costs are charged to the income statement as incurred, except for
those development costs which meet the criteria for capitalisation - see note 9.

NON-UNDERLYING ITEMS
Non-underlying items are costs and revenues relating to gains and losses on business disposals, acquisition and disposal-related costs,
restructuring costs, impairments and other one-off items within operating profit, and other significant and unusual items within net profit but
outside of operating profit, which we collectively term non-underlying items due to their nature and/or frequency of occurrence. These items
are significant in terms of nature and/or amount and are relevant to an understanding of our financial performance.

Restructuring costs are charges associated with activities planned by management that significantly change either the scope of the business
or the manner in which it is conducted.

Turnover
Cost of sales

of which: Distribution costs

Gross profit
Selling and administrative expenses

of which: Brand and marketing investment

Research and development

Operating profit

€ million
2018

€ million
2017

€ million
2016

50,982
(28,769)

53,715
(30,547)

52,713
(30,229)

(3,098)

(3,241)

(3,246)

22,213
(9,678)

23,168
(14,311)

22,484
(14,683)

(7,164)

(7,566)

(7,731)

(900)

(978)

12,535

8,857

7,801

NON-UNDERLYING ITEMS
Non-underlying items are disclosed on the face of the income statement to provide additional information to users to help them better
understand underlying business performance.

Non-underlying items within operating profit before tax

Acquisition and disposal-related costs(a)

Gain/(loss) on disposal of group companies(b)

Restructuring costs
Impairments and other one-off items(c)

Tax on non-underlying items within operating profit

Non-underlying items within operating profit after tax

Non-underlying items not in operating profit but within net profit before tax

Premium paid on buyback of preference shares

Share of gain on disposal of Spreads business in Portugal JV

Net monetary gain arising from hyperinflationary economies

Tax impact of non-underlying items not in operating profit but within net profit

Tax on premium paid on buyback of preference shares (non deductible)
Impact of US tax reform(d)

Non-underlying items not in operating profit but within net profit after tax

Non-underlying items after tax(e)

Attributable to:
Non-controlling interest
Shareholders' equity

€ million
2018

€ million
2017

€ million
2016

3176

4,331

(914)

(317)

(259)

2,917

154

–

122

(29)

–

(29)

125

(543)

(159)

334

(638)

(80)

(466)

(382)

–

578

–

578

196

(823)

(132)

(95)

(578)

(18)

213

(610)

–

3,042

(270)

(610)

18
3,024

(8)
(262)

(9)
(601)

(a) 2018 includes a credit of €277 million from early settlement of contingent consideration relating to Blueair.
(b) 2018 includes a gain of €4,331 million on disposal of spreads business. 2017 includes a gain of €309 million from the sale of AdeS soy beverage business in Latin America.
(c) 2018 includes a charge of €208 million relating to impairment of Blueair intangible asset. Also included is a charge of €98 million for litigation matters comprised
of €48 million for UK pension obligations and €50 million for legal cases in relation to investigations by national competition authorities. 2017 includes an €80
million charge for legal cases in relation to investigations by national competition authorities including those within Italy and South Africa. 2016 includes €18
million in foreign exchange losses resulting from remeasurement of the Argentinian business.

(d) On 22 December 2017, HR1, formerly known as the Tax Cuts and Jobs Act was signed into law in the United States. As a result, tax benefit of €578 million was

recognised in 2017, primarily due to re-measurement of deferred tax assets and liabilities at the new lower 21% federal tax rate.

(e) Non-underlying items after tax is calculated as non-underlying items within operating profit after tax plus non-underlying items not in operating profit but within

net profit after tax.

Financial StatementsAnnual Report on Form 20-F 2018NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
UNILEVER GROUP CONTINUED

3. OPERATING COSTS AND NON-UNDERLYING ITEMS CONTINUED

OTHER
Other significant cost items within operating costs include:

Staff costs

Raw and packaging materials and goods purchased for resale

Amortisation of finite-life intangible assets and software

Depreciation of property, plant and equipment

Exchange gains/(losses):

On underlying transactions

On covering forward contracts

Lease rentals:

Minimum operating lease payments

Less: Sub-lease income relating to operating lease agreements

4. EMPLOYEES
4A. STAFF AND MANAGEMENT COSTS

Staff costs

Wages and salaries

Social security costs

Other pension costs

Share-based compensation costs

Average number of employees during the year

Asia/AMET/RUB

The Americas

Europe

Key management compensation

Salaries and short-term employee benefits

Post-employment benefits

Share-based benefits(a)

Of which: Executive Directors
Other(b)

Non-Executive Directors’ fees

Notes

€ million
2018

€ million
2017

€ million
2016

(6,552)

(6,712)

(6,523)

(20,526)

(21,579)

(21,122)

(348)

(365)

(310)

(1,191)

(1,173)

(1,154)

(49)

(116)

(556)

(568)

(214)

(51)

(163)

(557)

(568)

(209)

(28)

(181)

(531)

(536)

€ million
2018

€ million
2017

€ million
2016

(5,346)

(5,416)

(5,347)

(571)

(439)

(196)

(613)

(399)

(284)

(606)

(372)

(198)

(6,552)

(6,712)

(6,523)

’000
2018

158

’000
2017

165

’000
2016

169

€ million
2018

€ million
2017

€ million
2016

(40)

–

(19)

(59)

(15)

(44)

(2)

(61)

(34)

–

(20)

(54)

(14)

(40)

(2)

(56)

(31)

(1)

(17)

(49)

(13)

(36)

(2)

(51)

(a) Share-based benefits are shown on a vesting basis.
(b) Other includes all members of the Unilever Leadership Executive, other than Executive Directors.

Key management are defined as the members of Unilever Leadership Executive (ULE) and the Non-Executive Directors. Compensation
for the ULE includes the full-year compensation for ULE members who joined part way through the year.

Financial StatementsAnnual Report on Form 20-F 20184B. PENSIONS AND SIMILAR OBLIGATIONS

For defined benefit plans, operating and finance costs are recognised separately in the income statement. The amount charged to operating cost
in the income statement is the cost of accruing pension benefits promised to employees over the year, plus the costs of individual events such
as past service benefit changes, settlements and curtailments (such events are recognised immediately in the income statement). The amount
charged or credited to finance costs is a net interest expense calculated by applying the liability discount rate to the net defined benefit liability or
asset. Any differences between the expected interest on assets and the return actually achieved, and any changes in the liabilities over the year
due to changes in assumptions or experience within the plans, are recognised immediately in the statement of comprehensive income.

The defined benefit plan surplus or deficit on the balance sheet comprises the total for each plan of the fair value of plan assets less the
present value of the defined benefit liabilities (using a discount rate based on high-quality corporate bonds, or a suitable alternative where
there is no active corporate bond market).

All defined benefit plans are subject to regular actuarial review using the projected unit method, either by external consultants or by actuaries
employed by Unilever. The Group policy is that the most material plans, representing approximately 84% of the defined benefit liabilities, are
formally valued every year. Other material plans, accounting for a further 12% of the liabilities, have their liabilities updated each year. Group
policy for the remaining plans requires a full actuarial valuation at least every three years. Asset values for all plans are updated every year.

For defined contribution plans, the charges to the income statement are the company contributions payable, as the company’s obligation is
limited to the contributions paid into the plans. The assets and liabilities of such plans are not included in the balance sheet of the Group.

DESCRIPTION OF PLANS
The Group increasingly operates a number of defined contribution plans, the assets of which are held in external funds. In certain countries the
Group operates defined benefit pension plans based on employee pensionable remuneration and length of service. The majority of defined benefit
plans are either career average, final salary or hybrid plans and operate on a funded basis. Benefits are determined by the plan rules and are
linked to inflation in some countries. Our largest plans are in the UK and Netherlands. In the UK, we operate a combination of an open career
average defined benefit plan with a salary limit for benefit accrual, and a defined contribution plan. In the Netherlands, we operate a collective
defined contribution plan for all new benefit accrual and a closed career average defined benefit plan for benefits built up to April 2015.

The Group also provides other post-employment benefits, mainly post-employment healthcare plans in the United States. These plans are
predominantly unfunded.

GOVERNANCE
The majority of the Group’s externally funded plans are established as trusts, foundations or similar entities. The operation of these entities is governed
by local regulations and practice in each country, as is the nature of the relationship between the Group and the Trustees (or equivalent) and their
composition. Where Trustees (or equivalent) are in place to operate plans, they are generally required to act on behalf of the plan’s stakeholders.
They are tasked with periodic reviews of the solvency of the fund in accordance with local legislation and play a role in the long-term investment
and funding strategy. The Group also has an internal body, the Pensions and Equity Committee, that is responsible for setting the company’s
policies and decision-making on plan matters, including but not limited to design, funding, investments, risk management and governance.

INVESTMENT STRATEGY
The Group’s investment strategy in respect of its funded plans is implemented within the framework of the various statutory requirements of
the territories where the plans are based. The Group has developed policy guidelines for the allocation of assets to different classes with the
objective of controlling risk and maintaining the right balance between risk and long-term returns in order to limit the cost to the Group of the
benefits provided. To achieve this, investments are well diversified, such that the failure of any single investment would not have a material impact
on the overall level of assets. The plans continue to invest a good proportion of the assets in equities, which the Group believes offer the best
returns over the long term, commensurate with an acceptable level of risk. The plans expose the Group to a number of actuarial risks such as
investment risk, interest rate risk, longevity risk and, in certain markets, inflation risk. There are no unusual entity or plan-specific risks to the
Group. For risk control, the pension funds also have significant investments in liability matching assets (bonds) as well as in property and other
alternative assets; additionally, the Group uses derivatives to further mitigate the impact of the risks outlined above. The majority of assets are
managed by a number of external fund managers with a small proportion managed in-house. Unilever has a pooled investment vehicle (Univest)
which it believes offers its pension plans around the world a simplified externally managed investment vehicle to implement their strategic asset
allocation models, currently for bonds, equities and alternative assets. The aim is to provide high-quality, well diversified, cost-effective, risk-
controlled vehicles. The pension plans’ investments are overseen by Unilever’s internal investment company, the Univest Company.

ASSUMPTIONS
With the objective of presenting the assets and liabilities of the pensions and other post-employment benefit plans at their fair value on the
balance sheet, assumptions under IAS 19 are set by reference to market conditions at the valuation date. The actuarial assumptions used to
calculate the benefit liabilities vary according to the country in which the plan is situated. The following table shows the assumptions, weighted
by liabilities, used to value principal defined benefit plans (representing approximately 96% of total pension liabilities and other post-employment
benefit liabilities).

Discount rate

Inflation

Rate of increase in salaries

Rate of increase for pensions in payment (where provided)

Rate of increase for pensions in deferment (where provided)

Long-term medical cost inflation

31 December 2018

31 December 2017

Defined
benefit
pension plans

Other post-
employment
benefit plans

Defined
benefit
pension plans

Other post-
employment
benefit plans

2.7%

2.5%

2.8%

2.4%

2.6%

n/a

4.8%

n/a

3.0%

n/a

5.3%

2.5%

2.8%

2.4%

2.6%

n/a

4.2%

n/a

3.0%

n/a

5.3%

The valuations of other post-employment benefit plans generally assume a higher initial level of medical cost inflation, which falls from 7% to the
long-term rate within the next five years. Assumed healthcare cost trend rates have a significant effect on the amounts reported for healthcare plans.

Financial StatementsAnnual Report on Form 20-F 2018NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
UNILEVER GROUP CONTINUED

4B. PENSIONS AND SIMILAR OBLIGATIONS CONTINUED

For the UK and Netherlands pension plans, representing approximately 68% of all defined benefit pension liabilities, the assumptions used
at 31 December 2018 and 2017 were:

Discount rate

Inflation

Rate of increase in salaries

Rate of increase for pensions in payment
(where provided)

Rate of increase for pensions in deferment
(where provided)

Number of years a current pensioner is
expected to live beyond age 65:

Men

Women

Number of years a future pensioner currently
aged 45 is expected to live beyond age 65:

Men

Women

United Kingdom

Netherlands

2018

2017

2018

2017

2.8%

3.2%

3.1%

22.1

24.0

22.7

25.6

2.5%

3.1%

3.0%

22.1

24.0

22.6

25.6

1.8%

1.6%

2.1%

1.6%

22.5

24.0

24.4

26.1

1.8%

1.7%

2.2%

1.7%

22.5

24.3

24.6

26.6

Demographic assumptions, such as mortality rates, are set with having regard to the latest trends in life expectancy (including expectations of
future improvements), plan experience and other relevant data. These assumptions are reviewed and updated as necessary as part of the periodic
actuarial valuation of the pension plans. The years of life expectancy for 2018 above have been translated from the following tables:

UK: The year of use S2 series all pensioners (‘S2PA’) tables have been adopted, which are based on the experience of UK pension schemes over the
period 2004-2011. Scaling factors are applied reflecting the experience of our pension funds appropriate to the member’s gender and status. Future
improvements in longevity have been allowed for in line with the 2016 CMI core projections (Sk = 7.5) and a 1% pa long-term improvement rate.

Netherlands: The Dutch Actuarial Society’s AG Prognosetafel 2018 table is used with correction factors (2017) to allow for the typically longer life
expectancy for fund members relative to the general population. This table has an in-built allowance for future improvements in longevity.

The remaining defined benefit plans are considered immaterial. Their assumptions vary due to a number of factors including the currency and
long-term economic conditions of the countries where they are situated.

INCOME STATEMENT
The charge to the income statement comprises:

Charged to operating profit:

Defined benefit pension and other benefit plans:

Current service cost

Employee contributions

Special termination benefits

Past service cost including (losses)/gains on curtailments

Settlements

Defined contribution plans

Total operating cost

Finance income/(cost)

Net impact on the income statement (before tax)

Notes

€ million
2018

€ million
2017

€ million
2016

(220)

(16)

(41)

–

(179)

(439)

(25)

(464)

(245)

(226)

(4)

(195)

(399)

(96)

(495)

(6)

(2)

(187)

(372)

(94)

(466)

STATEMENT OF COMPREHENSIVE INCOME
Amounts recognised in the statement of comprehensive income on the remeasurement of the net defined benefit liability.

Return on plan assets excluding amounts included in net finance income/(cost)

Actuarial gains/(losses) arising from changes in demographic assumptions

Actuarial gains/(losses) arising from changes in financial assumptions

Experience gains/(losses) arising on pension plan and other benefit plan liabilities

Total of defined benefit costs recognised in other comprehensive income

€ million
2018

(1,108)

611

(437)

€ million
2017

€ million
2016

1,475

222

(210)

133

1,620

1,877

(217)

(2,963)

(1,221)

Financial StatementsAnnual Report on Form 20-F 20184B. PENSIONS AND SIMILAR OBLIGATIONS CONTINUED

BALANCE SHEET
The assets, liabilities and surplus/(deficit) position of the pension and other post-employment benefit plans at the balance sheet date were:

€ million 2018

€ million 2017

Fair value of assets

Present value of liabilities

Pension liability net of assets

Of which in respect of:

Funded plans in surplus:

Liabilities

Assets

Pension asset net of liabilities

Funded plans in deficit:

Liabilities

Assets

Pension liability net of assets

Unfunded plans:

Pension liability

Pension
plans

20,867

(21,288)

(421)

(16,182)

17,909

1,727

(4,149)

2,958

(1,191)

Other post-
employment
benefit plans

(466)

(453)

–

(30)

(18)

Pension
plans

22,361

(22,420)

(59)

(17,132)

19,302

2,170

(4,267)

3,059

(1,208)

Other post-
employment
benefit plans

(523)

(502)

–

(35)

(17)

(957)

(436)

(1,021)

(488)

A surplus is deemed recoverable to the extent that the Group can benefit economically from the surplus. Unilever assesses the maximum
economic benefit available through a combination of refunds and reductions in future contributions in accordance with local legislation and
individual financing arrangements with each of our funded defined benefit plans.

RECONCILIATION OF CHANGE IN ASSETS AND LIABILITIES
Movements in assets during the year:

The group of plans within "Rest of world" category in the tables below are not materially different with respect to their risks that would require
disaggregated disclosure.

1 January

Employee contributions

Settlements

Actual return on plan assets (excluding amounts
in net finance income/charge)

Interest income

Employer contributions

Benefit payments

Currency retranslation

Others

31 December

UK Netherlands

Rest of
world

€ million
2018
Total

UK Netherlands

Rest of
world

€ million
2017
Total

11,038

5,357

5,987

22,382

9,963

5,116

6,104

21,183

–

(459)

274

(472)

(147)

–

(1)

(303)

(346)

(1,108)

182

274

551

383

(166)

(561)

(1,199)

–

(1)

(9)

(135)

(10)

–

863

270

778

(457)

(379)

–

275

(169)

–

(8)

337

179

284

(613)

(312)

(1)

(8)

1,475

540

1,105

(1,239)

(691)

(1)

10,329

4,996

5,555

20,880

11,038

5,357

5,987

22,382

Financial StatementsAnnual Report on Form 20-F 2018NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
UNILEVER GROUP CONTINUED

4B. PENSIONS AND SIMILAR OBLIGATIONS CONTINUED

Movements in liabilities during the year:

8
–
(87)

444
(4)
–
–

8
–

(303)
(87)
95

37
14
–
–
(9)

1 January
Current service cost
Employee contributions
Special termination benefits
Past service costs including (losses)/gains
on curtailments
Settlements
Interest cost
Actuarial gain/(loss) arising from changes
in demographic assumptions
Actuarial gain/(loss) arising from changes
in financial assumptions
Actuarial gain/(loss) arising from experience
adjustments
Benefit payments
Currency retranslation
Others
31 December

Movements in (deficit)/surplus during the year:

UK Netherlands

(10,255)
(109)
–
–

(4,913)
(4)
–
–

(46)
–
(254)

–

351

(45)
472
147
–
(9,739)

UK Netherlands

Rest of
world

(7,775)
(107)
–
(16)

(3)
1
(235)

€ million
2018
Total

(22,943)
(220)
–
(16)

(41)
1
(576)

(10,981)
(114)
–
–

5
–
(286)

(11)

312

Rest of
world

(8,498)
(125)
–
(4)

6
12
(264)

€ million
2017
Total

(24,356)
(245)
–
(4)

23
12
(636)

222

(4,877)
(6)
–
–

12
–
(86)

(96)

176

611

(189)

–

(21)

(210)

37
166
–
(8)
(4,664)

26
561
14
18
(7,351)

18
1,199
161
10
(21,754)

144
457
397
–
(10,255)

(37)
169
–
8
(4,913)

26
613
474
–
(7,775)

133
1,239
871
8
(22,943)

1 January
Current service cost
Employee contributions
Special termination benefits
Past service costs including (losses)/gains
on curtailments
Settlements
Actual return on plan assets (excluding amounts
in net finance income/charge)
Interest cost
Interest income
Actuarial gain/(loss) arising from changes
in demographic assumptions
Actuarial gain/(loss) arising from changes
in financial assumptions
Actuarial gain/(loss) arising from experience
adjustments
Employer contributions
Benefit payments
Currency retranslation
Others

31 December

783
(109)
–
–

(46)
–

(459)
(254)
274

–

351

(45)
95
–
–
–

590

UK Netherlands

Rest of
world

(1,788)
(107)
17
(16)

(3)
–

€ million
2018
Total

(561)
(220)
17
(16)

(41)
–

(346)
(235)
182

(1,108)
(576)
551

(1,018)
(114)
–
–

5
–

863
(286)
270

(11)

312

Rest of
world

(2,394)
(125)
17
(4)

6
4

337
(264)
179

€ million
2017
Total

(3,173)
(245)
18
(4)

23
4

1,475
(636)
540

222

239
(6)
1
–

12
–

275
(86)
91

(96)

176

611

(189)

–

(21)

(210)

26
274
–
26
9

18
383
–
26
–

144
778
–
18
–

783

(37)
43
–
–
8

26
284
–
162
(1)

133
1,105
–
180
7

444

(1,788)

(561)

332

(1,796)

(874)

The actual return on plan assets during 2018 was €(557) million, being €(1,108) million of asset returns and €551 million of interest income
shown in the tables above (2017: €2,015 million).

Financial StatementsAnnual Report on Form 20-F 20184B. PENSIONS AND SIMILAR OBLIGATIONS CONTINUED

The duration of the principal defined benefit plan liabilities (representing 96% of total pension liabilities and other post-employment benefit
liabilities) and the split of liabilities between different categories of plan participants are:

Duration (years)

Active members
Deferred members
Retired members

UK Netherlands

12%
33%
55%

15%
38%
47%

Rest of

world(a)

2018
Total

7 to 23

21%
16%
63%

15%
29%
56%

UK Netherlands

14%
32%
54%

22%
30%
48%

Rest of
world

16%
15%
69%

2017
Total

8 to 24

18%
26%
56%

(a) Rest of world numbers shown are weighted averages by liabilities.

PLAN ASSETS
The fair value of plan assets, which are reported net of fund liabilities that are not employee benefits, at the end of the reporting period for each
category are as follows:

The group of plans within "Rest of world" category in the tables below are not materially different with respect to their risks that would require
disaggregated disclosure.

Total plan assets

Assets
Equities total
Europe
North America
Other

Fixed income total
Government bonds
Investment grade corporate bonds
Other fixed income

Private equity
Property and real estate
Hedge funds
Other

Other plans

€ million
31 December 2018

Rest of
world

2018
Total

UK Netherlands

€ million
31 December 2017

Rest of
world

2017
Total

UK Netherlands

10,329

4,996

5,542

20,867

11,038

5,357

5,966

22,361

3,182
731
1,723
728

4,963
2,474
984
1,505

363
852
663
435

–

1,594
480
714
400

2,595
769
502
1,324

82
451
–
293

–

1,505
451
682
372

2,947
1,253
1,167
527

2
276
120
389

312

6,281
1,662
3,119
1,500

10,505
4,496
2,653
3,356

447
1,579
783
1,117

312

4,538
1,093
2,320
1,125

4,210
2,162
1,368
680

401
810
673
463

–

1,876
703
668
505

2,500
879
485
1,136

89
411
–
427

–

1,909
594
842
473

2,954
1,376
1,207
371

3
246
297
274

312

8,323
2,390
3,830
2,103

9,664
4,417
3,060
2,187

493
1,467
970
1,164

312

Fund liabilities that are not employee benefits
Derivatives

(129)

(19)

(9)

(157)

(57)

(29)

(32)

The fair values of the above equity and fixed income instruments are determined based on quoted market prices in active markets. The fair value
of private equity, properties, derivatives and hedge funds are not based on quoted market prices in active markets. The Group uses derivatives and
other instruments to hedge some of its exposure to inflation and interest rate risk – the degree of this hedging of liabilities was 55% for interest
rate and 55% for inflation for the UK plan and 32% for interest rate and 29% for inflation for the Netherlands plan. Foreign currency exposures
in part are also hedged by the use of forward foreign exchange contracts. Assets included in the Other category are commodities, cash and
insurance contracts which are also unquoted assets.

Equity securities include Unilever securities amounting to €12 million (0.1% of total plan assets) and €14 million (0.1% of total plan assets) at
31 December 2018 and 2017 respectively. Property includes property occupied by Unilever amounting to €28 million at 31 December 2018 (2017:
€32 million).

The pension assets above exclude the assets in a Special Benefits Trust amounting to €59 million (2017: €63 million) to fund pension and similar
liabilities in the United States (see also note 17A on page 117). In 2017, as a result of the triennial valuation of the UK fund, the monies held in
escrow (€68 million at the end of 2016) were returned to the Group.

SENSITIVITIES
The sensitivity of the overall pension liabilities to changes in the weighted key assumptions are:

Discount rate
Inflation rate
Life expectancy
Long-term medical cost inflation(b)

Change in liabilities

Change in assumption

Netherlands

Increase by 0.5%
Increase by 0.5%
Increase by 1 year
Increase by 1.0%

-8%
7%
4%
0%

-9%
9%
4%
0%

(b) Long-term medical cost inflation only relates to post-retirement medical plans.

An equivalent decrease in each assumption would have an equal and opposite impact on liabilities.

Total

-7%
6%
4%
2%

Financial StatementsAnnual Report on Form 20-F 2018NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
UNILEVER GROUP CONTINUED

4B. PENSIONS AND SIMILAR OBLIGATIONS CONTINUED

The sensitivity analyses above have been determined based on reasonably possible changes of the respective assumptions occurring at the
end of the reporting period and may not be representative of the actual change. It is based on a change in the key assumption while holding
all other assumptions constant. When calculating the sensitivity to the assumption, the same method used to calculate the liability recognised
in the balance sheet has been applied. The methods and types of assumptions used in preparing the sensitivity analysis did not change compared
with the previous period.

CASH FLOW
Group cash flow in respect of pensions and similar post-employment benefits comprises company contributions paid to funded plans and benefits
paid by the company in respect of unfunded plans. The table below sets out these amounts:

Company contributions to funded plans:

Defined benefit

Defined contributions

Benefits paid by the company in respect of unfunded plans:

Defined benefit

Group cash flow in respect of pensions and similar benefits

€ million
2019
Estimate

230

185

150

565

€ million
2018

€ million
2017

€ million
2016

238

179

144

561

954

195

151

1,300

355

187

157

699

Following the conclusion of the 2016 triennial valuation of the UK pension fund the Group in agreement with the trustees, decided to contribute
£600 million into the fund in 2017. Deficit contributions to the UK pension fund are expected to be nil for the next few years

The Group’s funding policy is to periodically review the contributions made to the plans while taking account of local legislations.

4C. SHARE-BASED COMPENSATION PLANS

The fair value of awards at grant date is calculated using appropriate pricing models. This value is expensed over their vesting period, with
a corresponding credit to equity. The expense is reviewed and adjusted to reflect changes to the level of awards expected to vest, except where
this arises from a failure to meet a market condition. Any cancellations are recognised immediately in the income statement.

As at 31 December 2018, the Group had share-based compensation plans in the form of performance shares, share options and other share awards.

The numbers in this note include those for Executive Directors and key management shown in note 4A on page 86. Non-Executive Directors do
not participate in any of the share-based compensation plans.

The charge in each of the last three years is shown below, and relates to equity-settled plans:

Income statement charge

Performance share plans

Other plans

€ million
2018

€ million
2017

€ million
2016

(183)

(13)

(196)

(273)

(11)

(284)

(185)

(13)

(198)

PERFORMANCE SHARE PLANS
Performance share awards are made in respect of the Global Share Incentive Plan (GSIP) and the Management Co-Investment Plan (MCIP). The
awards of each plan will vest between 0 and 200% of grant level, subject to the level of satisfaction of performance measures (limits for Executive
Directors may vary, and are detailed in the Directors’ Remuneration Report on pages 50 to 65).

Under the GSIP, Unilever’s managers receive annual awards of NV and PLC shares. The performance measures for GSIP are underlying sales
growth, underlying operating margin, and cumulative operating cash flow for the Group, although GSIP awards to certain managers below
Unilever Leadership Executive level may be subject to similar performance measures specific to their business unit. There is an additional
target based on relative total shareholder return for senior executives. GSIP awards will vest after three years.

The MCIP allows Unilever’s managers to invest a proportion of their annual bonus (a maximum of 67% for Executive Directors, 100% for other
managers) in shares in Unilever, and to receive a corresponding award of performance-related shares. The performance measures for MCIP
are underlying sales growth, underlying EPS growth, and sustainability progress index for the Group. There is an additional target of return on
invested capital for senior executives. MCIP awards will vest after four years.

A summary of the status of the Performance Share Plans as at 31 December 2018, 2017 and 2016 and changes during the years ended on these
dates is presented below:

Outstanding at 1 January
Awarded
Vested
Forfeited

Outstanding at 31 December

2018
Number
of shares

13,684,747
6,870,882
(5,854,388)
(1,066,723)

2017
Number
of shares

14,818,060
4,962,345
(4,723,861)
(1,371,797)

2016

Number
of shares

15,979,140
7,016,274
(6,983,053)
(1,194,301)

13,634,518

13,684,747

14,818,060

Financial StatementsAnnual Report on Form 20-F 20184C. SHARE-BASED COMPENSATION PLANS CONTINUED

Share award value information

2018

2017

2016

Fair value per share award during the year

€42.44

€42.59

€35.43

ADDITIONAL INFORMATION
At 31 December 2018, shares and options in NV or PLC totalling 14,595,111 (2017: 14,760,786) were outstanding in respect of share-based
compensation plans of NV, PLC and its subsidiaries, including North American plans.

To satisfy the options and awards granted, certain NV group companies hold 15,010,429 (2017: 15,802,464) ordinary shares of NV or PLC. Shares
acquired during 2018 represent 0.21% of the Group’s called up share capital. The balance of shares held in connection with share plans at
31 December 2018 represented 0.5% (2017: 0.5%) of the Group’s called up share capital.

The book value of €704 million (2017: €695 million) of all shares held in respect of share-based compensation plans for both NV and PLC is
eliminated on consolidation by deduction from other reserves. Their market value at 31 December 2018 was €700 million (2017: €739 million).

At 31 December 2018, the exercise price of Nil PLC options (2017: Nil) were above the market price of the shares.

Shares held to satisfy options and awards are accounted for in accordance with IAS 32 ‘Financial Instruments: Presentation’. All differences
between the purchase price of the shares held to satisfy options and awards granted and the proceeds received for the shares, whether on
exercise or lapse, are charged to reserves. The basis of the charge to operating profit for the economic value of options granted is discussed
on page 92.

Between 31 December 2018 and 21 February 2019 (the latest practicable date for inclusion in this report), Nil shares were granted, 5,534,564
shares were vested and 92,699 shares were forfeited related to the Performance Share Plans.

5. NET FINANCE COSTS

Net finance costs are comprised of finance costs and finance income, including net finance costs in relation to pensions and similar obligations.

Finance income includes income on cash and cash equivalents and income on other financial assets. Finance costs include interest costs
in relation to financial liabilities.

Borrowing costs are recognised based on the effective interest method.

Net finance costs

Finance costs

Bank loans and overdrafts
Interest on bonds and other loans(a)
Dividends paid on preference shares(b)
Net gain/(loss) on transactions for which hedge accounting is not applied(c)

On foreign exchange derivatives

Exchange difference on underlying items

Finance income

Pensions and similar obligations

Net finance costs before non-underlying items(d)

Premium paid on buyback of preference shares

Notes

€ million
2018

€ million
2017

€ million
2016

(591)

(44)

(560)

–

144

(131)

135

(25)

(481)

–

(481)

(556)

(46)

(519)

(4)

384

(371)

157

(96)

(495)

(382)

(877)

(584)

(67)

(501)

(4)

(12)

(215)

203

115

(94)

(563)

–

(563)

(a) Interest on bonds and other loans' includes the impact of interest rate derivatives that are part of hedge accounting relationships and the related recycling of

results from the hedge accounting reserve. Includes an amount of €(15) million (2017: €(26) million) relating to unwinding of discount on deferred consideration for
acquisitions and €38 million (2017: €65 million) release of provision for interest on indirect tax cases in Brazil.

(b) Preference shares were repurchased in 2017.
(c) For further details of derivatives for which hedge accounting is not applied, please refer to note 16C.
(d) See note 3 for explanation of non-underlying items.

Financial StatementsAnnual Report on Form 20-F 2018NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
UNILEVER GROUP CONTINUED

6. TAXATION
6A. INCOME TAX

Income tax on the profit for the year comprises current and deferred tax. Income tax is recognised in the income statement except to the
extent that it relates to items recognised directly in equity.

Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the balance
sheet date, and any adjustments to tax payable in respect of previous years.

Current tax in the consolidated income statement will differ from the income tax paid in the consolidated cash flow statement primarily
because of deferred tax arising on temporary differences and payment dates for income tax occurring after the balance sheet date.

Unilever is subject to taxation in the many countries in which it operates. The tax legislation of these countries differs, is often complex and
is subject to interpretation by management and the government authorities. These matters of judgement give rise to the need to create
provisions for tax payments that may arise in future years with respect to transactions already undertaken. Provisions are made against
individual exposures and take into account the specific circumstances of each case, including the strength of technical arguments, recent case
law decisions or rulings on similar issues and relevant external advice. The provision is estimated based on the individual most likely outcome
approach.

Tax charge in income statement

Current tax

Current year

Over/(under) provided in prior years

Deferred tax

Origination and reversal of temporary differences

Changes in tax rates

Recognition of previously unrecognised losses brought forward

€ million
2018

€ million
2017

€ million
2016

(2,647)

(10)

(2,657)

(13)

(2,398)

(21)

(2,419)

609

752

(2,026)

158

(1,868)

(65)

(7)

(54)

(2,575)

(1,667)

(1,922)

The reconciliation between the computed weighted average rate of income tax expense, which is generally applicable to Unilever companies, and
the actual rate of taxation charged is as follows:

Reconciliation of effective tax rate

Computed rate of tax(a)

Differences between computed rate of tax and effective tax rate due to:

Incentive tax credits

Withholding tax on dividends

Expenses not deductible for tax purposes

Irrecoverable withholding tax

Income tax reserve adjustments – current and prior year

Transfer to/(from) unrecognised deferred tax assets

Others

Underlying effective tax rate
Non-underlying items within operating profit(b)
Premium paid on Buyback of preference shares(b)
Impact of US tax reform(b)

Impact of Spreads disposal(b)

Effective tax rate

%
2018

(3)

–

(1)

–

(4)

%
2017

(4)

–

(1)

(7)

–

%
2016

(4)

(1)

–

(a) The computed tax rate used is the average of the standard rate of tax applicable in the countries in which Unilever operates, weighted by the amount of underlying
profit before taxation generated in each of those countries. For this reason, the rate may vary from year to year according to the mix of profit and related tax rates.

(b) See note 3 for explanation of non-underlying items.

Our tax rate is reduced by incentive tax credits, the benefit from preferential tax regimes that have been legislated by the countries and provinces
concerned in order to promote economic development and investment. The tax rate is increased by business expenses which are not deductible
for tax, such as entertainment costs and some interest expense and by irrecoverable withholding taxes on dividends paid by subsidiary companies
and on other cross-border payments such as royalties and service fees, which cannot be offset against other taxes due. In 2018 the effective tax
rate was reduced by the impact of the spreads disposals where a significant part of the disposals benefited from the participation exemption in
the Netherlands.

The Group’s future tax charge and effective tax rate could be affected by several factors, including changes in tax laws and their interpretation
and still to be determined tax reform proposals in the EU, Switzerland and the continuing OECD international tax reform work, as well as the
impact of acquisitions, disposals and any restructuring of our businesses.

Financial StatementsAnnual Report on Form 20-F 20186B. DEFERRED TAX

Deferred tax is recognised using the liability method on taxable temporary differences between the tax base and the accounting base of items
included in the balance sheet of the Group. Certain temporary differences are not provided for as follows:
• goodwill not deductible for tax purposes;
• the initial recognition of assets or liabilities that affect neither accounting nor taxable profit; and
• differences relating to investments in subsidiaries to the extent that it is probable that they will not reverse in the foreseeable future.

The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and
liabilities, using tax rates enacted, or substantively enacted, at the year end.

A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can
be utilised. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be realised.

Movements in 2018 and 2017

Pensions and similar obligations

Provisions and accruals

Goodwill and intangible assets

Accelerated tax depreciation

Tax losses

Fair value gains

Fair value losses

Share-based payments

Other

€ million
As at
1 January
2018

316

653

(1,652)

(679)

130

100

194

(828)

€ million

Income
statement

(26)

193

(154)

(2)

(14)

Other

114

(25)

(105)

(5)

(11)

(3)

–

(5)

(20)

(60)

€ million

€ million
As at
31 December
2018

As at
1 January
2017

Income
statement

As at
31 December
2017

316

653

(1,652)

(679)

130

100

194

Other

(434)

(115)

(378)

(70)

(26)

752

(873)

(828)

404

821

766

922

(1,911)

(1,928)

(679)

130

155

175

(806)

(870)

131

(7)

169

(707)

(16)

(154)

654

109

(36)

104

(5)

At the balance sheet date, the Group had unused tax losses of €5,346 million (2017: €4,676 million) and tax credits amounting to €570 million
(2017: €612 million) available for offset against future taxable profits. Deferred tax assets have not been recognised in respect of unused tax
losses of €4,914 million (2017: €4,179 million) and tax credits of €570 million (2017: €612 million), as it is not probable that there will be future
taxable profits within the entities against which the losses can be utilised. Many of these tax losses and credits arise in tax jurisdictions where
they do not expire with the exception of €4,752 million (2017: €2,934 million) comprising mainly corporate income tax losses in the Netherlands
which expire between now and 2027.

Other deductible temporary differences of €48 million (2017: €51 million) have not been recognised as a deferred tax asset. There is no expiry
date for these differences.

At the balance sheet date, the aggregate amount of temporary differences associated with undistributed earnings of subsidiaries for which
deferred tax liabilities have not been recognised was €2,681 million (2017: €1,719 million). No liability has been recognised in respect of these
differences because the Group is in a position to control the timing of the reversal of the temporary differences, and it is probable that such
differences will not reverse in the foreseeable future.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and
when the deferred income taxes relate to the same fiscal authority. The following amounts, determined after appropriate offsetting, are shown in
the consolidated balance sheet:

Deferred tax assets and liabilities

Pensions and similar obligations

Provisions and accruals

Goodwill and intangible assets

Accelerated tax depreciation

Tax losses

Fair value gains

Fair value losses

Share-based payments

Other

Of which deferred tax to be recovered/(settled)

after more than 12 months

€ million
Assets
2018

€ million
Assets
2017

€ million
Liabilities
2018

€ million
Liabilities
2017

€ million
Total
2018

€ million
Total
2017

334

578

(64)

126

294

465

(21)

125

243

188

404

821

316

653

(1,952)

(1,738)

(1,911)

(1,652)

(615)

(658)

(679)

143

116

120

130

155

175

130

100

194

1,117

1,085

(1,923)

(1,913)

(806)

(828)

840

730

(2,046)

(1,868)

(1,206)

(1,138)

Financial StatementsAnnual Report on Form 20-F 2018

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
UNILEVER GROUP CONTINUED

6C. TAX ON OTHER COMPREHENSIVE INCOME

Income tax is recognised in other comprehensive income for items recognised directly in equity.

Tax effects of the components of other comprehensive income were as follows:

€ million

Before
tax
2018

€ million
Tax
(charge)/
credit
2018

(70)

–

(437)

(869)

(1,325)

–

109

132

€ million

After
tax
2018

(55)

–

(328)

(861)

(1,193)

Before
tax
2017

–

(62)

1,620

(1,024)

535

€ million
Tax
(charge)/
credit
2017

–

(6)

(8)

(338)

(311)

€ million

After
tax
2017

–

(68)

(7)

1,282

(983)

224

Gains/(losses) on:(a)

Equity instruments at fair value through other comprehensive income

Cash flow hedges

Other financial instruments

Remeasurements of defined benefit pension plans

Currency retranslation gains/(losses)

(a) Classification has changed following adoption of IFRS 9. See note 1 for further details.

7. COMBINED EARNINGS PER SHARE

The combined earnings per share calculations are based on the average number of share units representing the combined ordinary shares
of NV and PLC in issue during the period, less the average number of shares held as treasury shares.

In calculating diluted earnings per share and underlying earnings per share, a number of adjustments are made to the number of shares,
principally, the exercise of share options by employees.

Underlying earnings per share is calculated as underlying profit attributable to shareholders’ equity divided by the diluted combined average
number of share units. In calculating underlying profit attributable to shareholders’ equity, net profit attributable to shareholders’ equity is
adjusted to eliminate the post-tax impact of non-underlying items in operating profit and any other significant unusual items within net profit
but not operating profit.

Earnings per share for total operations for the 12 months were as follows:

Basic earnings per share

Diluted earnings per share

Underlying earnings per share

Calculation of average number of share units

Average number of shares: NV

PLC

Less treasury shares held by employee share trusts and companies

Combined average number of share units – used for basic earnings per share

Add dilutive effect of share-based compensation plans

€
2018

3.50

3.48

2.36

€
2017

2.16

2.15

2.24

€
2016

1.83

1.82

2.03

Millions of share units

2018

2017

2016

1,714.7

1,264.0

1,714.7

1,310.2

1,714.7

1,310.2

(295.4)

(223.3)

(184.7)

2,683.3

2,801.6

2,840.2

11.5

12.4

13.7

Diluted combined average number of share units – used for diluted and underlying earnings per share

2,694.8

2,814.0

2,853.9

Calculation of earnings

Net profit

Non-controlling interests

Net profit attributable to shareholders’ equity – used for basic and diluted earnings per share

Post tax impact of non-underlying items

Underlying profit attributable to shareholders’ equity – used for underlying earnings per share

Notes

€ million
2018

€ million
2017

€ million
2016

9,808

(419)

9,389

(3,024)

6,365

6,486

(433)

6,053

262

6,315

5,547

(363)

5,184

601

5,785

Financial StatementsAnnual Report on Form 20-F 20188. DIVIDENDS ON ORDINARY CAPITAL

Dividends are recognised on the date that the shareholder’s right to receive payment is established. This is generally the date when the
dividend is declared.

Dividends on ordinary capital during the year

NV dividends

PLC dividends

€ million
2018

€ million
2017

€ million
2016

(2,262)

(1,819)

(4,081)

(2,154)

(1,762)

(3,916)

(1,974)

(1,626)

(3,600)

Four quarterly interim dividends were declared and paid during 2018 totalling €1.52 (2017: €1.40) per NV ordinary share and £1.33 (2017: £1.22)
per PLC ordinary share.

Quarterly dividends of €0.39 per NV ordinary share and £0.34 per PLC ordinary share were declared on 31 January 2019, to be paid in March 2019.
See note 26 ‘Events after the balance sheet date’ on page 127. Total dividends declared in relation to 2018 were €1.55 (2017: €1.43)
per NV ordinary share and £1.35 (2017: £1.26) per PLC ordinary share.

9. GOODWILL AND INTANGIBLE ASSETS

GOODWILL
Goodwill is initially recognised based on the accounting policy for business combinations (see note 21). Goodwill is subsequently measured
at cost less amounts provided for impairment. The Group has nine cash generating units (CGUs) based on the three geographical areas and
three divisions. Global Spreads business which was recognised as a separate CGU in 2017 has been disposed off in 2018.

Goodwill acquired in a business combination is allocated to the Group’s CGUs, or groups of CGUs, that are expected to benefit from the
synergies of the combination. These might not always be the same as the CGUs that include the assets and liabilities of the acquired business.
Each unit or group of units to which the goodwill is allocated represents the lowest level within the Group at which the goodwill is monitored
for internal management purposes, and is not larger than an operating segment.

INTANGIBLE ASSETS
Separately purchased intangible assets are initially measured at cost, being the purchase price as at the date of acquisition. On acquisition of
new interests in group companies, Unilever recognises any specifically identifiable intangible assets separately from goodwill. These intangible
assets are initially measured at fair value as at the date of acquisition.

Development expenditure for internally-produced intangible assets is capitalised only if the costs can be reliably measured, future economic
benefits are probable, the product is technically feasible and the Group has the intent and the resources to complete the project. Research
expenditure to support development of internally-produced intangible assets is recognised in profit or loss as incurred.

Indefinite-life intangibles mainly comprise trademarks and brands, for which there is no foreseeable limit to the period over which they are
expected to generate net cash inflows. These are considered to have an indefinite life, given the strength and durability of our brands and the
level of marketing support.These assets are not amortised but are subject to a review for impairment annually, or more frequently if events or
circumstances indicate this is necessary. Any impairment is charged to the income statement as it arises.

Finite-life intangible assets mainly comprise software, patented and non-patented technology, know-how and customer lists. These assets
are amortised on a straight-line basis in the income statement over the period of their expected useful lives, or the period of legal rights
if shorter. None of the amortisation periods exceeds ten years.

Financial StatementsAnnual Report on Form 20-F 2018NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
UNILEVER GROUP CONTINUED

9. GOODWILL AND INTANGIBLE ASSETS CONTINUED

Movements during 2018

Cost

1 January 2018

Hyperinflation restatement to 1 January 2018

Acquisitions of group companies

Disposals of group companies
Reclassification to held for sale(a)

Reclassification from held for sale

Additions

Disposals

Currency retranslation

Hyperinflationary adjustment

31 December 2018

Accumulated amortisation and impairment

1 January 2018

Hyperinflation restatement to 1 January 2018

Amortisation/impairment for the year

Disposals

Currency retranslation

Hyperinflationary adjustment

31 December 2018

Net book value 31 December 2018(b)

Movements during 2017

Cost

1 January 2017

Acquisitions of group companies
Reclassification to held for sale(a)

Reclassification from held for sale

Additions

Disposals

Currency retranslation

31 December 2017

Accumulated amortisation and impairment

1 January 2017

Amortisation/impairment for the year

Disposals

Currency retranslation

31 December 2017

Net book value 31 December 2017(b)

€ million

Finite-life intangible assets

Indefinite-life
intangible
assets

Goodwill

Software

Other

Total

18,042

10,275

2,499

1,090

31,906

244

470

(1)

(227)

–

(151)

125

825

(1)

(55)

–

156

–

(1)

–

201

–

(15)

–

(15)

–

272

1,307

(2)

(283)

203

(15)

140

18,502

11,247

2,689

1,103

33,541

(1,161)

–

(14)

–

(198)

–

(1,161)

17,341

(212)

11,035

(1,637)

(3)

(297)

–

(2)

(1,927)

762

(693)

(3,505)

–

(61)

(8)

–

(748)

355

(3)

(556)

(2)

(4,048)

29,493

€ million

Finite-life intangible assets

Indefinite-life
intangible
assets

Goodwill

Software

Other

Total

18,789

2,557

(2,228)

–

(1,104)

18,042

(1,165)

–

(1,161)

16,881

8,358

2,622

(82)

–

(623)

10,275

(13)

–

(1)

(14)

10,261

2,578

–

(1)

–

153

(78)

(153)

2,499

(1,484)

(324)

(1,637)

862

1,068

–

(1)

(66)

1,090

(698)

(41)

(693)

397

30,793

5,267

(2,311)

154

(79)

(1,946)

31,906

(3,360)

(365)

141

(3,505)

28,401

(a) Goodwill and intangibles amounting to €283 million has been reclassified as held for sale in relation to the Spreads and Alsa baking and dessert businesses. In

2017 €2,311 million goodwill and intangibles related to Spreads business were reclassified as held for sale.

(b) Within the indefinite-life intangible assets there are three brands that have a significant carrying value: Knorr €1,789 million (2017: €1,770 million), Carver Korea

€1,534 million (2017: € 1,520 million) and Hellmann’s €1,195 million (2017: €1,160 million).

There are no significant carrying amounts of goodwill and intangible assets that are allocated across multiple cash generating units.

Goodwill acquired in a business combination is allocated to Unilever’s cash generating units for the purposes of impairment testing. The assets
acquired in business combinations are also assessed to determine the impact on the Group’s cash generating units, particularly whether new
cash generating units are created. This assessment and allocation has not been completed for any of the acquisitions completed during 2018
except for goodwill and assets acquired in the Quala acquisition which are included in the Beauty & Personal Care The Americas and Home Care
The Americas cash generating units. At 31 December 2018, there is no indication that the acquired goodwill and assets are impaired.

The impact of applying IAS 29 for Argentina has increased goodwill by €369 million. The goodwill that relates to our business in Argentina was
initially recognised in 2000 when Unilever acquired Bestfoods. In accordance with IAS 29 this goodwill has been adjusted for inflation from the
date of recognition until 31 December 2018. Our impairment testing included this inflated amount.

Financial StatementsAnnual Report on Form 20-F 20189. GOODWILL AND INTANGIBLE ASSETS CONTINUED

IMPAIRMENT CHARGES
We have tested all material goodwill and indefinite-life intangible assets for impairment. No impairments were identified except for the Blueair
intangibles. The Blueair acquisition included an element of deferred consideration payable in 2021. The terms relating to this element allowed the
sellers to request an early settlement for a reduced sum. Such a request was made in 2018 and the payment was made to the sellers, reducing
the consideration payable by €277 million and generating a credit in non-underlying items within the line ‘acquisition & disposal related costs’.
This early termination has been considered as a trigger event for an impairment review for Blueair intangible assets and a €208 million charge
has been recognised in non-underlying items within the line ‘impairments and other one-off items’ (see note 3)

SIGNIFICANT CGUS
The goodwill and indefinite-life intangible assets held in the CGUs relating to Foods & Refreshment Europe, Foods & Refreshment The Americas,
Beauty & Personal Care The Americas and Beauty & Personal Care Asia/AMET/RUB are considered significant within the total carrying amounts of
goodwill and indefinite-life intangible assets at 31 December 2018 in terms of size, headroom and sensitivity to assumptions used.

The goodwill and indefinite-life intangible assets held in the significant CGUs are:

2018 CGUs

Foods & Refreshment Europe

Foods & Refreshment The Americas

Beauty & Personal Care The Americas

Beauty & Personal Care Asia/AMET/RUB

2017 CGUs

Foods (excluding spreads) Europe

Foods (excluding spreads) The Americas

Foods (excluding spreads) Asia/AMET/RUB

Beauty & Personal Care The Americas

€ billion

Goodwill

€ billion
Indefinite-life
intangible
assets

3.9

4.0

1.7

1.6

2.1

2.8

2.0

€ billion

Goodwill

€ billion
Indefinite-life
intangible assets

4.5

2.8

1.5

2.5

1.6

1.4

0.4

1.5

In 2017 the global spreads CGU was also considered significant, with a carrying value of €2,228 million in goodwill and €82 million in indefinite-
life intangible assets. These were classified as assets held for sale.

Value in use has been calculated as the present value of projected cash flows. A pre-tax discount rate of 7.4% (2017: 7.4%) was used.

For the significant CGUs, the following key assumptions were used in the discounted cash flow projections:

Longer-term sustainable growth rates

Average near-term nominal growth rates

Average operating margins

Foods &
Refreshment

Europe

The Americas

Beauty &
Personal Care
The
Americas

Beauty &
Personal Care
Asia/
AMET/RUB

1.2%

0.0%

16%

1.6%

0.7%

15%

1.6%

2.8%

20%

3.8%

3.9%

22%

The projections cover a period of five years, as we believe this to be the most appropriate timescale over which to review and consider annual
performances before applying a fixed terminal value multiple to the final year cash flows.

The growth rates and margins used to estimate future performance are based on the conservative end of the range of estimates from past
performance, our annual forecast and three year strategic plan extended to year 4 and 5.

We have performed sensitivity analyses around the base assumptions. There are no reasonably possible changes in a key assumption that would
cause the carrying amount to exceed the recoverable amount.

Financial StatementsAnnual Report on Form 20-F 2018NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
UNILEVER GROUP CONTINUED

10. PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment is measured at cost including eligible borrowing costs less depreciation and accumulated impairment losses.

Depreciation is provided on a straight-line basis over the expected average useful lives of the assets. Residual values are reviewed at least
annually. Estimated useful lives by major class of assets are as follows:
• Freehold buildings (no depreciation on freehold land)
• Leasehold land and buildings
• Plant and equipment

40 years
40 years (or life of lease if less)
2–20 years

Property, plant and equipment is subject to review for impairment if triggering events or circumstances indicate that this is necessary. If an
indication of impairment exists, the asset’s or cash generating unit’s recoverable amount is estimated and any impairment loss is charged to
the income statement as it arises.

Movements during 2018

Cost

1 January 2018

Hyperinflation restatement to 1 January 2018

Acquisitions of group companies

Additions

Disposals

Hyperinflationary adjustment

Currency retranslation

Reclassification as held for sale

31 December 2018

Accumulated depreciation

1 January 2018

Hyperinflation restatement to 1 January 2018

Depreciation charge for the year

Disposals

Hyperinflationary adjustment

Currency retranslation

Reclassification as held for sale

31 December 2018

Net book value 31 December 2018(a)

Includes capital expenditures for assets under construction

(a) Includes €302 million of freehold land.

€ million
Land and
buildings

€ million
Plant and
equipment

€ million

Total

4,462

14,936

249

(97)

(91)

(17)

182

1,091

(607)

(351)

(54)

19,398

219

1,340

(704)

142

(442)

(71)

4,603

15,321

19,924

(1,429)

(10)

(125)

(7)

(1,484)

3,119

130

(7,558)

(106)

(1,066)

529

(53)

128

(8,093)

7,228

956

(8,987)

(116)

(1,191)

591

(60)

143

(9,577)

10,347

1,086

The Group has commitments to purchase property, plant and equipment of €324 million (2017: €323 million).

100

Financial StatementsAnnual Report on Form 20-F 201810. PROPERTY, PLANT AND EQUIPMENT CONTINUED

Movements during 2017

Cost

1 January 2017

Acquisitions of group companies

Disposals of group companies

Additions

Disposals

Currency retranslation

Reclassification as held for sale(a)

31 December 2017

Accumulated depreciation

1 January 2017

Disposals of group companies

Depreciation charge for the year

Disposals

Currency retranslation

Reclassification as held for sale

31 December 2017

Net book value 31 December 2017(b)

Includes capital expenditures for assets under construction

(a) Includes €548 million in property plant and equipment related to the Spreads business.

(b) Includes €247 million of freehold land.

11. OTHER NON-CURRENT ASSETS

€ million
Land and
buildings

€ million
Plant and
equipment

€ million

Total

4,745

16,462

21,207

(16)

314

(19)

(384)

(191)

4,462

(1,483)

(142)

100

(1,429)

3,033

(78)

1,218

(440)

(1,283)

(972)

14,936

(8,051)

(1,031)

400

543

552

(7,558)

7,378

972

(94)

1,532

(459)

(1,667)

(1,163)

19,398

(9,534)

(1,173)

414

643

633

(8,987)

10,411

1,065

Joint ventures are undertakings in which the Group has an interest and which are jointly controlled by the Group and one or more other
parties. Associates are undertakings where the Group has an investment in which it does not have control or joint control but can exercise
significant influence.

Interests in joint ventures and associates are accounted for using the equity method and are stated in the consolidated balance sheet at cost,
adjusted for the movement in the Group’s share of their net assets and liabilities. The Group’s share of the profit or loss after tax of joint
ventures and associates is included in the Group’s consolidated profit before taxation.

Where the Group’s share of losses exceeds its interest in the equity accounted investee, the carrying amount of the investment is reduced to
zero and the recognition of further losses is discontinued, except to the extent that the Group has an obligation to make payments on behalf
of the investee.

Biological assets are measured at fair value less costs to sell with any changes recognised in the income statement.

Interest in net assets of joint ventures

Interest in net assets of associates
Long-term trade and other receivables(a)

Operating lease prepayments for land

Fair value of biological assets

Other non-current assets(b)

(a) Mainly relates to indirect tax receivables where we do not have the contractual right to receive payment within 12 months.
(b) Mainly relates to tax assets.

€ million
2018

€ million
2017

307

118

151

648

265

116

557

101

Financial StatementsAnnual Report on Form 20-F 2018NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
UNILEVER GROUP CONTINUED

11. OTHER NON-CURRENT ASSETS CONTINUED

Movements during 2018 and 2017

Joint ventures(a)

1 January

Additions
Dividends received/reductions(b)

Share of net profit/(loss)

Currency retranslation

31 December

Associates(c)

1 January

Additions

Dividend received/reductions

Share of net profit/(loss)

Currency retranslation

31 December

€ million
2018

€ million
2017

(216)

190

–

(5)

(2)

–

(155)

155

(4)

(10)

–

(2)

(a) Our principal joint ventures are Unilever FIMA LDA for Portugal, the Pepsi/Lipton Partnership for the US and Pepsi Lipton International for the rest of the world.
(b) In 2018, includes capital reduction in joint venture of Unilever FIMA LDA for €64 million.
(c) Associates as at 31 December 2018 primarily comprise our investments in Langholm Capital Partners.

The joint ventures and associates have no contingent liabilities to which the Group is exposed, and the Group has no contingent liabilities in
relation to its interests in the joint ventures and associates.

The Group has no outstanding capital commitments to joint ventures.

Outstanding balances with joint ventures and associates are shown in note 23 on page 126.

12. INVENTORIES

Inventories are valued at the lower of weighted average cost and net realisable value. Cost comprises direct costs and, where appropriate,
a proportion of attributable production overheads. Net realisable value is the estimated selling price less the estimated costs necessary
to make the sale.

Inventories

Raw materials and consumables

Finished goods and goods for resale

€ million
2018

1,365

2,936

4,301

€ million
2017

1,274

2,688

3,962

Inventories with a value of €124 million (2017: €92 million) are carried at net realisable value, this being lower than cost. During 2018 €92 million
(2017: €109 million) was charged to the income statement for damaged, obsolete and lost inventories. In 2018 €72 million (2017: €90 million) was
utilised or released to the income statement from inventory provisions taken in earlier years.

13. TRADE AND OTHER CURRENT RECEIVABLES

Trade and other current receivables are initially recognised at fair value plus any directly attributable transaction costs. Subsequently these
assets are held at amortised cost, using the effective interest method and net of any impairment losses.

We do not consider the fair values of trade and other current receivables to be significantly different from their carrying values. Concentrations of
credit risk with respect to trade receivables are limited, due to the Group’s customer base being large and diverse. Our historical experience of
collecting receivables, supported by the level of default, is that credit risk is low across territories and so trade receivables are considered to be a
single class of financial assets. Impairment for trade receivables are calculated for specific receivables with known or anticipated issues affecting
the likelihood of recovery and for balances past due with a probability of default based on historical data as well as relevant forward-looking
information.

102

Financial StatementsAnnual Report on Form 20-F 201813. TRADE AND OTHER CURRENT RECEIVABLES CONTINUED

Trade and other current receivables

Due within one year
Trade receivables(a)
Prepayments and accrued income
Other receivables

€ million
2018

€ million
2017

4,350
693
1,442

6,485

3,439
452
1,331

5,222

(a) 2018 includes €677 million due from KKR as a result of an arrangement following the sale of the global spreads business (excluding Southern Africa). Unilever will
provide services to KKR including IT infrastructure, bookkeeping, payroll, marketing and co-packing for up to two years from completion of the disposal and KKR
pays Unilever for materials sourced on its behalf. See also trade payables on page 104.

Included within trade receivables are rebates payable to customers of €3,062 million (2017: €2,766 million). Other receivables comprise financial
assets of €299 million (2017: €281 million), and non-financial assets of €1,142 million (2017: €1,050 million). Financial assets include supplier
and customer deposits, employee advances and certain derivatives. Non-financial assets mainly consist of reclaimable sales tax.

Ageing of trade receivables

Total trade receivables
Less impairment provision for trade receivables

Of which:
Not overdue
Past due less than three months
Past due more than three months but less than six months
Past due more than six months but less than one year
Past due more than one year
Impairment provision for trade receivables

Impairment provision for total trade and other receivables

1 January
Charge to income statement
Reduction/releases
Currency translations

31 December

€ million
2018

€ million
2017

4,538
(188)

4,350

3,440
747
132
74
145
(188)

4,350

3,599
(160)

3,439

2,714
621
95
59
110
(160)

3,439

€ million
2018

€ million
2017

184
65
(29)
(6)

214

166
51
(21)
(12)

184

The total impairment provision includes €188 million (2017: €160 million) for current trade receivables, €13 million (2017: €10 million) for other
current receivables and €13 million (2017: €14 million) for non-current trade and other receivables.

14. TRADE PAYABLES AND OTHER LIABILITIES

TRADE PAYABLES
Trade payables are initially recognised at fair value less any directly attributable transaction costs. Trade payables are subsequently measured
at amortised cost, using the effective interest method.

OTHER LIABILITIES
Other liabilities are initially recognised at fair value less any directly attributable transaction costs. Subsequent measurement depends on the
type of liability:
• Accruals are subsequently measured at amortised cost, using the effective interest method.
• Social security and sundry taxes are subsequently measured at amortised cost, using the effective interest method.
• Deferred consideration is subsequently measured at fair value with changes in the income statement as explained below.
• Others are subsequently measured either at amortised cost, using the effective interest method or at fair value, with changes being

recognised in the income statement.

Deferred Consideration
Deferred consideration represents any payments to the sellers of a business that occur after the acquisition date. These typically comprise of
contingent consideration and fixed deferred consideration:
• Fixed deferred consideration is a payment with a due date after acquisition that is not dependent on future conditions
• Contingent consideration is a payment which is dependent on certain conditions being met in the future and is often variable

All deferred consideration is initially recognised at fair value as at the acquisition date, which includes a present value discount. Subsequently,
deferred consideration is measured to reflect the unwinding of discount on the liability, with changes recognised in finance cost within the
income statement. In the balance sheet it is remeasured to reflect the latest estimate of the achievement of the conditions on which the
consideration is based; changes in value other than the discount unwind are recognised as acquisition and disposal-related costs within
non-underlying items in the income statement.

We do not consider the fair values of trade payables and other liabilities to be significantly different from their carrying values.

103

Financial StatementsAnnual Report on Form 20-F 2018NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
UNILEVER GROUP CONTINUED

14. TRADE PAYABLES AND OTHER LIABILITIES CONTINUED

Trade payables and other liabilities

Current: due within one year
Trade payables(a)
Accruals
Social security and sundry taxes
Deferred consideration
Others

Non-current: due after more than one year
Accruals
Deferred consideration
Others

Total trade

€ million
2018

€ million
2017

9,121
3,724
498
14
1,100

8,217
3,666
539
26
978

14,457

13,426

121
173
52

346

146
485
69

700

14,803

14,126

(a) 2018 includes €311 million due to KKR as a result of an arrangement following the sale of the global spreads business (excluding Southern Africa). Unilever will
provide certain services for up to two years from completion of the disposal and pays KKR for amounts collected on its behalf. See also trade receivables on page
103.

Included in others are certain derivatives, withholding tax on dividends and third-party payables related to audit and agency fees.

Deferred Consideration
At 31 December 2018 the total balance of deferred consideration for acquisitions is €187 million (2017: €511 million), of which contingent
consideration is €142 million (2017: €445 million). These contingent consideration payments fall due up until 2024 with a maximum possible total
payment of €1,082 million. The movement during 2018 is mainly due to release of contingent consideration relating to Blueair which arose from
early settlement through cash payment of €122 million and a non-cash credit to operating profit of €277 million.

15. CAPITAL AND FUNDING

ORDINARY SHARES
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares are recognised as a deduction
from equity, net of any tax effects.

INTERNAL HOLDINGS
The ordinary shares numbered 1 to 2,400 (inclusive) in NV (‘Special Shares’) and deferred stock of PLC are held as to one half of each class by
N.V. Elma – a subsidiary of NV – and one half by United Holdings Limited – a subsidiary of PLC. This capital is eliminated on consolidation.

SHARE-BASED COMPENSATION
The Group operates a number of share-based compensation plans involving options and awards of ordinary shares of NV and PLC. Full details
of these plans are given in note 4C on pages 92 and 93.

OTHER RESERVES
Other reserves include the fair value reserve, the foreign currency translation reserve, the capital redemption reserve and treasury shares.

SHARES HELD BY EMPLOYEE SHARE TRUSTS AND GROUP COMPANIES
Certain PLC trusts, NV and group companies purchase and hold NV and PLC shares to satisfy performance shares granted, share options granted
and other share awards (see note 4C). The assets and liabilities of these trusts and shares held by group companies are included in the consolidated
financial statements. The book value of shares held is deducted from other reserves, and trusts’ borrowings are included in the Group’s liabilities.
The costs of the trusts are included in the results of the Group. These shares are excluded from the calculation of earnings per share.

FINANCIAL LIABILITIES
Financial liabilities are initially recognised at fair value, less any directly related transaction costs. Certain bonds are designated as being part
of a fair value hedge relationship. In these cases, the bonds are carried at amortised cost, adjusted for the fair value of the risk being hedged,
with changes in value shown in profit and loss. Other financial liabilities, excluding derivatives, are subsequently carried at amortised cost,
with the exception of:
• Financial liabilities which the group has elected to measure at fair value through profit or loss;
• Derivative financial liabilities – see note 16 on page 110

The Group’s Treasury activities are designed to:
• maintain a competitive balance sheet in line with at least A/A2 rating (see below);
• secure funding at lowest costs for the Group’s operations, M&A activity and external dividend payments (see below);
• protect the Group’s financial results and position from financial risks (see note 16);
• maintain market risks within acceptable parameters, while optimising returns (see note 16); and
• protect the Group’s financial investments, while maximising returns (see note 17).

The Treasury department provides central deposit taking, funding and foreign exchange management services for the Group’s operations. The
department is governed by standards and processes which are approved by Unilever Leadership Executive (ULE). In addition to guidelines and
exposure limits, a system of authorities and extensive independent reporting covers all major areas of activity. Performance is monitored closely
by senior management. Reviews are undertaken periodically by corporate audit.

104

Financial StatementsAnnual Report on Form 20-F 201815. CAPITAL AND FUNDING CONTINUED

Key instruments used by the treasury department are:
• short-term and long-term borrowings;
• cash and cash equivalents; and
• plain vanilla derivatives, including interest rate swaps and foreign exchange contracts.

The Treasury department maintains a list of approved financial instruments. The use of any new instrument must be approved by the Chief
Financial Officer. The use of leveraged instruments is not permitted.

Unilever considers the following components of its balance sheet to be managed capital:
• total equity – retained profit, other reserves, share capital, share premium, non-controlling interests (notes 15A and 15B);
• short-term debt – current financial liabilities (note 15C); and
• long-term debt – non-current financial liabilities (note 15C).

The Group manages its capital so as to safeguard its ability to continue as a going concern and to optimise returns to our shareholders through
an appropriate balance of debt and equity. The capital structure of the Group is based on management’s judgement of the appropriate balance of
key elements in order to meet its strategic and day-to-day needs. We consider the amount of capital in proportion to risk and manage the capital
structure in light of changes in economic conditions and the risk characteristics of the underlying assets.

Our current long-term credit rating is A+/A1 and our short-term credit rating is A1/P1. We aim to maintain a competitive balance sheet which we
consider to be the equivalent of a credit rating of at least A/A2 in the long term. This provides us with:
• appropriate access to the debt and equity markets;
• sufficient flexibility for acquisitions;
• sufficient resilience against economic and financial uncertainty while ensuring ample liquidity; and
• optimal weighted average cost of capital, given the above constraints.

Unilever monitors the qualitative and quantitative factors utilised by the rating agencies. This information is publicly available and is updated
by the credit rating agencies on a regular basis.

15A. SHARE CAPITAL

Unilever N.V.

NV ordinary shares of €0.16 each

NV ordinary shares of €428.57 each (shares numbered 1 to 2,400 – ‘Special Shares’)

Internal holdings eliminated on consolidation (€428.57 shares)

Unilever PLC

PLC ordinary shares of 31/9p each

PLC deferred stock of £1 each

Internal holding eliminated on consolidation (£1 stock)

Cancellation of treasury shares(c)

Euro equivalent in millions (at £1.00 = €5.143)(d)

Unilever Group

Ordinary share capital of NV

Ordinary share capital of PLC

Issued,
called up and

Authorised(a)

fully paid(b)

Authorised(a)

fully paid(b)

2018

2017

€ million

480

–

481

274

(1)

274

480

–

481

274

(1)

274

£ million

€ million

40.8

0.1

(0.1)

(3.8)

37.0

€ million

190

€ million

274

190

464

40.8

0.1

(0.1)

–

40.8

€ million

210

€ million

274

210

484

(a) At 31 December 2018 Unilever N.V. had 3,000,000,000 (2017: 3,000,000,000) authorised ordinary shares. The requirement for a UK company to have an authorised

share capital was abolished by the UK Companies Act 2006. In May 2010 Unilever PLC shareholders approved new Articles of Association to reflect this.
(b) At 31 December 2018 the following quantities of shares were in issue: 1,714,727,700 of NV ordinary shares; 2,400 of NV Special Shares; 1,187,191,284 of PLC

ordinary shares and 100,000 of PLC deferred stock. At 31 December 2017, 1,714,727,700 of NV ordinary shares; 2,400 of NV Special Shares; 1,310,156,361 of PLC
ordinary shares and 100,000 of PLC deferred stock were in issue.

(c) At 31 December 2018 122,965,077 of PLC ordinary shares that were repurchased as part of the share buyback programme in 2018 and prior years, were cancelled.

And 24,334,848 shares have not been cancelled and are recognised as treasury shares.

(d) Conversion rate for PLC ordinary shares nominal value to euros is £1 = €5.143 (which is calculated by dividing the nominal value of NV ordinary shares by the nominal value

of PLC ordinary shares).

For information on the rights of shareholders of NV and PLC and the operation of the Equalisation Agreement, see the Corporate Governance
report on pages 36 to 42.

A nominal dividend of 6% per annum is paid on the deferred stock of PLC.

105

Financial StatementsAnnual Report on Form 20-F 2018NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
UNILEVER GROUP CONTINUED

15B. EQUITY

BASIS OF CONSOLIDATION
Unilever is the majority shareholder of all material subsidiaries and has control in all cases. Information in relation to significant subsidiaries is
provided on page 127.

SUBSIDIARIES WITH SIGNIFICANT NON-CONTROLLING INTERESTS
Unilever has one subsidiary company which has a material non-controlling interest, Hindustan Unilever Limited (HUL). Summary financial
information in relation to HUL is shown below.

HUL balance sheet as at 31 December

Non-current assets

Current assets

Current liabilities

Non-current liabilities

HUL comprehensive income for the year ended 31 December

Turnover

Profit after tax

Total comprehensive income

HUL cash flow for the year ended 31 December

Net increase/(decrease) in cash and cash-equivalents

HUL non-controlling interest

1 January

Share of (profit)/loss for the year ended 31 December

Other comprehensive income

Dividend paid to the non-controlling interest

Other changes in equity

Currency translation

31 December

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY: ANALYSIS OF OTHER RESERVES

Fair value reserves
Equity instruments(a)
Cash flow hedges
Available-for-sale financial assets
Currency retranslation of group companies – see following table
Adjustment on translation of PLC's ordinary capital at 31/9p = €0.16
Capital redemption reserve
Book value of treasury shares – see following table
Hedging gains/(losses) transferred to non-financial assets(a)
Other(b)

€ million
2018

881

1,333

(1,130)

(190)

€ million
2017

819

1,274

(1,030)

(135)

4,527

617

576

4,464

595

529

(71)

(288)

(203)

(4)

183

–

(299)

(282)

(195)

(3)

172

–

(288)

€ million
Total
2017

€ million
Total
2016

(189)

–

(236)

(3,927)

(164)

(9,208)

–

(177)

(113)

–

(168)

(3,034)

(164)

(4,164)

–

€ million
Total
2018

(194)

(292)

–

(4,764)

(150)

(10,181)

(100)

(a) Classification has changed following adoption of IFRS 9. See note 1 for further details.
(b) Relates to option on purchase of subsidiary for non-controlling interest and hyperinflation adjustment arising on current year profit translated at closing exchange

rate.

Unilever acquired 66,202,168 (2017: 53,003,099) NV ordinary shares and 65,458,433 (2017: 53,359,284) PLC shares through purchases on the
stock exchanges during the year, which includes the share buyback programme as explained in note 24. 122,965,077 of PLC ordinary shares were
cancelled and the remaining shares were held as treasury shares as a separate component of other reserves.

The total number of treasury shares held at 31 December 2018 was 263,349,111 (2017: 201,538,909) NV shares and 24,334,848 (2017: 84,463,561)
PLC shares. Of these, 9,336,215 NV shares and 5,674,214 PLC shares were held in connection with share-based compensation plans (see note 4C
on pages 92 to 93).

(15,286)

(13,633)

(7,443)

106

Financial StatementsAnnual Report on Form 20-F 201815B. EQUITY CONTINUED

Treasury shares – movements during the year

1 January

Repurchase of shares (see note 24)

Cancellation of NV and PLC shares

Other purchases and utilisations

31 December

Currency retranslation reserve – movements during the year

1 January

Currency retranslation during the year

Movement in net investment hedges and exchange differences in net investments in foreign operations

Recycled to income statement

31 December

STATEMENT OF COMPREHENSIVE INCOME: OTHER COMPREHENSIVE INCOME RECONCILIATION

Fair value gains/(losses) on financial instruments – movement during the year

1 January

Equity instruments

Cash flow hedges

Available for sale financial assets

31 December

€ million
2018

(9,208)

(6,020)

5,055

(8)

€ million
2017

(4,164)

(5,014)

–

(30)

(10,181)

(9,208)

€ million
2018

(3,927)

(843)

(71)

€ million
2017

(3,034)

(50)

(909)

(4,764)

(3,927)

€ million
2018

€ million
2017

(189)

(55)

–

(193)

(113)

–

(68)

(8)

(189)

Refer to the consolidated statement of comprehensive income on page 75, the consolidated statement of changes in equity on page 76, and note
6C on page 96.

Remeasurement of defined benefit pension plans net of tax

1 January

Movement during the year

31 December

€ million
2018

(1,171)

(328)

(1,499)

€ million
2017

(2,453)

1,282

(1,171)

Refer to the consolidated statement of comprehensive income on page 75, the consolidated statement of changes in equity on page 76, note 4B
from page 87 to 92 and note 6C on page 96.

Currency retranslation gains/(losses) – movement during the year

1 January

Currency retranslation during the year:

Other reserves

Retained profit

Non-controlling interest

31 December

€ million
2018

€ million
2017

(4,278)

(3,295)

(836)

(10)

(15)

(903)

(27)

(53)

(5,139)

(4,278)

107

Financial StatementsAnnual Report on Form 20-F 2018NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
UNILEVER GROUP CONTINUED

15C. FINANCIAL LIABILITIES

Financial liabilities(a)

Bank loans and overdrafts(b)

Bonds and other loans

Finance lease creditors

Derivatives

Other financial liabilities(c)

€ million

Note

Current
2018

€ million
Non-
current
2018

525

289

Total
2018

814

2,422

20,969

23,391

126

149

115

276

128

402

150

€ million
Non-
current
2017

479

€ million

Total
2017

992

15,528

22,709

120

335

–

131

421

177

Current
2017

513

7,181

177

(a) For the purposes of this note and note 17A, financial assets and liabilities exclude trade and other current receivables and trade payables and other liabilities which

3,235

21,650

24,885

7,968

16,462

24,430

are covered in notes 13 and 14 respectively.

(b) Financial liabilities include €5 million (2017: €1 million) of secured liabilities.
(c) Includes options and other financial liabilities to acquire non-controlling interests in EAC Myanmar, refer to note 21.

RECONCILIATION OF LIABILITIES ARISING FROM FINANCING ACTIVITIES

Movements in 2018 and 2017

2018
Bank loans and overdrafts(a)
Bonds and other loans(a)

Finance lease creditors

Derivatives

Other financial liabilities

Total

2017

Preference shares
Bank loans and overdrafts(a)
Bonds and other loans(a)

Finance lease creditors

Derivatives

Other financial liabilities(a)

Total

Opening
balance at
1 January
€ million

Cash
movement

€ million

Business
acquisitions/
disposals
€ million

Foreign
exchange
changes
€ million

Fair
value
changes
€ million

Other
movements

€ million

Closing
balance at
31 December
€ million

Non-cash movement

(992)

(22,709)

(131)

(421)

(177)

(24,430)

(68)

(1,146)

(15,053)

(143)

(185)

–

158

(135)

–

(9,008)

–

(10)

–

(543)

–

(10)

(515)

–

(3)

–

1,346

–

(16,595)

(8,860)

(3)

1,450

–

(4)

–

(2)

–

(236)

–

(238)

(4)

(8)

–

(30)

(29)

–

(7)

(8)

–

(177)

(184)

(814)

(23,391)

(128)

(402)

(150)

(24,885)

–

(992)

(22,709)

(131)

(421)

(177)

(24,430)

(a) These cash movements are included within the following lines in the consolidated cash flow statement: net change in short-term liabilities, additional financial
liabilities and repayment of financial liabilities. The difference of €2 million (2017: €1 million) represents cash movements in overdrafts that are not included in
financing cash flows.

108

Financial StatementsAnnual Report on Form 20-F 2018

15C. FINANCIAL LIABILITIES CONTINUED

ANALYSIS OF BONDS AND OTHER LOANS

Unilever N.V.
Floating Rate Notes 2018 (€)
1.625% Notes 2033 (€)
1.750% Bonds 2020 (€)
0.500% Notes 2022 (€)
1.375% Notes 2029 (€)
1.125% Bonds 2027 (€)
1.125% Bonds 2028 (€)
0.875% Notes 2025 (€)
0.500% Bonds 2025 (€)
1.375% Notes 2030 (€)
0.375% Notes 2023 (€)
1.000% Notes 2027 (€)
1.000% Notes 2023 (€)
0.000% Notes 2021 (€)
0.500% Notes 2023 (€)
0.500% Notes 2024 (€)
0.000% Notes 2020 (€)
Commercial paper

Total NV

Unilever PLC
1.125% Notes 2022 (£)
2.000% Notes 2018 (£)(a)
1.375% Notes 2024 (£)
1.875% Notes 2029 (£)
Total PLC

Other group companies
Switzerland
Other
United States
4.250% Notes 2021 ($)
5.900% Bonds 2032 ($)
2.900% Notes 2027 ($)
2.200% Notes 2022 ($)
1.800% Notes 2020 ($)
3.500% Notes 2028 ($)
4.800% Bonds 2019 ($)
2.200% Notes 2019 ($)
2.000% Notes 2026 ($)
1.375% Notes 2021 ($)
3.125% Notes 2023 ($)
2.100% Notes 2020 ($)
3.000% Notes 2022 ($)
3.250% Notes 2024 ($)
3.100% Notes 2025 ($)
2.600% Notes 2024 ($)
3.500% Bonds 2028 ($)
2.750% Bonds 2021 ($)
3.375% Notes 2025 ($)
7.250% Bonds 2026 ($)
6.625% Bonds 2028 ($)
5.150% Notes 2020 ($)
5.600% Bonds 2097 ($)
Commercial paper ($)
Other countries

€ million
Total 2018

€ million
Total 2017

–
791
749
746
743
696
693
647
642
642
599
598
497
497
497
494
300
–

750
–
748
744
742
–
693
646
–
–
598
597
497
496
–
493
299
3,655

9,831

10,958

386
–
276
274
936

873
865
860
738
698
687
656
655
602
478
477
436
434
433
432
432
431
348
302
254
200
134
80
1,070
39

390
283
280
278
1,231

834
826
821
704
666
–
627
625
575
456
–
416
–
–
413
413
–
–
–
243
190
129
76
2,421
79

Total other group companies

Total bonds and other loans

12,624

23,391

10,520

22,709

(a) Of which €Nil (2017: €2 million) relates to a fair value adjustment following the fair value hedge accounting of a fixed-for-floating interest rate swap.

Information in relation to the derivatives used to hedge bonds and other loans within a fair value hedge relationship is shown in note 16.

109

Financial StatementsAnnual Report on Form 20-F 2018NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
UNILEVER GROUP CONTINUED

16. TREASURY RISK MANAGEMENT

DERIVATIVES AND HEDGE ACCOUNTING
Derivatives are measured at fair value with any related transaction costs expensed as incurred. The treatment of changes in the value of
derivatives depends on their use as explained below.

(I) FAIR VALUE HEDGES(a)
Certain derivatives are held to hedge the risk of changes in value of a specific bond or other loan. In these situations, the Group designates
the liability and related derivative to be part of a fair value hedge relationship. The carrying value of the bond is adjusted by the fair value of the
risk being hedged, with changes going to the income statement. Gains and losses on the corresponding derivative are also recognised in the
income statement. The amounts recognised are offset in the income statement to the extent that the hedge is effective. When the relationship
no longer meets the criteria for hedge accounting, the fair value hedge adjustment made to the bond is amortised to the income statement
using the effective interest method.

(II) CASH FLOW HEDGES(a)
Derivatives are also held to hedge the uncertainty in timing or amount of future forecast cash flows. Such derivatives are classified as being
part of cash flow hedge relationships. For an effective hedge, gains and losses from changes in the fair value of derivatives are recognised
in equity. Cost of hedging, where material and opted for, is recorded in a separate account within equity. Any ineffective elements of the
hedge are recognised in the income statement. If the hedged cash flow relates to a non-financial asset, the amount accumulated in equity is
subsequently included within the carrying value of that asset. For other cash flow hedges, amounts deferred in equity are taken to the income
statement at the same time as the related cash flow.

When a derivative no longer qualifies for hedge accounting, any cumulative gain or loss remains in equity until the related cash flow occurs.
When the cash flow takes place, the cumulative gain or loss is taken to the income statement. If the hedged cash flow is no longer expected to
occur, the cumulative gain or loss is taken to the income statement immediately.

(III) NET INVESTMENT HEDGES(a)
Certain derivatives are designated as hedges of the currency risk on the Group’s investment in foreign subsidiaries. The accounting policy for
these arrangements is set out in note 1.

(IV) DERIVATIVES FOR WHICH HEDGE ACCOUNTING IS NOT APPLIED
Derivatives not classified as hedges are held in order to hedge certain balance sheet items and commodity exposures. No hedge accounting is
applied to these derivatives, which are carried at fair value with changes being recognised in the income statement.

(a) Applying hedge accounting has not led to material ineffectiveness being recognised in the income statement for both 2018 and 2017.

The Group is exposed to the following risks that arise from its use of financial instruments, the management of which is described in the following
sections:
• liquidity risk (see note 16A);
• market risk (see note 16B); and
• credit risk (see note 17B).

16A. MANAGEMENT OF LIQUIDITY RISK

Liquidity risk is the risk that the Group will face in meeting its obligations associated with its financial liabilities. The Group’s approach to
managing liquidity is to ensure that it will have sufficient funds to meet its liabilities when due without incurring unacceptable losses. In doing
this, management considers both normal and stressed conditions. A material and sustained shortfall in our cash flow could undermine the
Group’s credit rating, impair investor confidence and also restrict the Group’s ability to raise funds.

The Group maintained a cautious funding strategy. This was the result of cash delivery from the business, coupled with the proceeds from bond
issuances. This cash has been invested conservatively with low risk counter-parties at maturities of less than six months.

Cash flow from operating activities provides the funds to service the financing of financial liabilities on a day-to-day basis. The Group seeks to
manage its liquidity requirements by maintaining access to global debt markets through short-term and long-term debt programmes. In addition,
Unilever has committed credit facilities for general corporate use.

On 31 December 2018 Unilever had undrawn revolving 364-day bilateral credit facilities in aggregate of $7,865 million (2017: $7,865 million) with a
364-day term out. As part of the regular annual process, the intention is that these facilities will again be renewed in 2019.

110

Financial StatementsAnnual Report on Form 20-F 201816A. MANAGEMENT OF LIQUIDITY RISK CONTINUED

The following table shows Unilever’s contractually agreed undiscounted cash flows, including expected interest payments, which are payable
under financial liabilities at the balance sheet date:

Undiscounted cash flows

Note

2018

Non-derivative financial liabilities:

Bank loans and overdrafts

Bonds and other loans

Finance lease creditors

Other financial liabilities

Trade payables, accruals and other liabilities

(13,945)

Deferred consideration

(14)

€ million

Due
within
1 year

Due
between
1 and
2 years

Due
between
2 and
3 years

Due
between
3 and
4 years

Due
between
4 and
5 years

Due
after
5 years

Total

€ million
Net
carrying
amount as
shown in
balance
sheet

(529)

(12)

(1)

(278)

–

(820)

(814)

(2,888)

(2,748)

(2,572)

(2,646)

(2,387)

(14,090)

(27,331)

(23,391)

(20)

(149)

(19)

(1)

(140)

(79)

(18)

–

(10)

(70)

(17)

–

(5)

(6)

(17)

–

(4)

–

(96)

–

(14)

(45)

(187)

(150)

(128)

(150)

(14,118)

(214)

(187)

Derivative financial liabilities:

Interest rate derivatives:

Derivative contracts – receipts

Derivative contracts – payments

Foreign exchange derivatives:

Derivative contracts – receipts

Derivative contracts – payments

Commodity derivatives:

Derivative contracts – receipts

Derivative contracts – payments

Total

2017

Non-derivative financial liabilities:

Preference shares

Bank loans and overdrafts

Bonds and other loans

Finance lease creditors

Other financial liabilities

Trade payables, accruals and other liabilities

Deferred consideration

Derivative financial liabilities:

Interest rate derivatives:

Derivative contracts – receipts

Derivative contracts – payments

Foreign exchange derivatives:

Derivative contracts – receipts

Derivative contracts – payments

Commodity derivatives:

Derivative contracts – receipts

Derivative contracts – payments

(17,545)

(2,999)

(2,671)

(2,952)

(2,408)

(14,245)

(42,820)

(38,788)

(23)

760

(756)

163

(138)

788

(797)

(17)

1,406

3,221

(1,423)

(3,154)

17,108

(17,317)

–

(74)

(239)

–

(9)

(17)

17,108

(17,317)

–

(74)

(216)

(542)

(17,784)

(2,995)

(2,646)

(2,961)

(2,388)

(14,262)

(43,036)

(39,330)

–

(522)

–

(221)

–

(1)

–

(1)

–

(260)

–

(1,005)

–

(992)

(7,558)

(1,577)

(2,546)

(2,026)

(2,058)

(9,953)

(25,718)

(22,709)

(20)

(177)

(12,861)

(26)

(18)

–

(215)

(36)

(17)

(16)

(17)

(118)

–

(27)

(515)

–

(3)

–

(9)

(206)

(177)

(131)

(177)

(13,076)

(616)

(511)

(21,164)

(2,067)

(2,591)

(2,558)

(2,338)

(10,080)

(40,798)

(37,596)

349

(319)

(19)

727

(753)

(19)

754

(797)

1,380

(1,440)

3,325

(3,347)

24,935

(25,258)

–

(19)

(312)

–

(26)

(43)

(60)

24,935

(25,258)

–

(19)

(364)

(534)

Total

(21,476)

(2,022)

(2,617)

(2,526)

(2,381)

(10,140)

(41,162)

(38,130)

111

Financial StatementsAnnual Report on Form 20-F 2018NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
UNILEVER GROUP CONTINUED

16A. MANAGEMENT OF LIQUIDITY RISK CONTINUED

The following table shows cash flows for which cash flow hedge accounting is applied. The derivatives in the cash flow hedge relationships are
expected to have an impact on profit and loss in the same periods as the cash flows occur.

€ million

Due
within
1 year

€ million
Due
between
1 and
2 years

€ million
Due
between
2 and
3 years

€ million
Due
between
3 and
4 years

€ million
Due
between
4 and
5 years

Due
after
5 years

€ million
Net carrying
amount of
related

Total

derivatives(a)

€ million

2018

Foreign exchange cash inflows

Foreign exchange cash outflows

Interest rate swaps cash inflows

Interest rate swaps cash outflows

Commodity contracts cash flows

2017

Foreign exchange cash inflows

Foreign exchange cash outflows

Interest rate swaps cash inflows

Interest rate swaps cash outflows

Commodity contracts cash flows

(a) See note 16C.

3,426

(3,435)

103

(23)

(74)

3,510

(3,536)

349

(319)

(19)

–

795

(756)

–

(19)

–

3,426

(3,435)

433

1,158

525

1,406

4,420

(347)

(1,147)

(464)

(1,423)

(4,160)

–

(74)

–

727

(753)

–

(19)

–

753

(797)

–

1,380

(1,440)

–

3,510

(3,536)

3.323

(3,347)

(19)

–

(199)

(74)

–

(8)

–

(351)

(7)

16B. MANAGEMENT OF MARKET RISK

Unilever’s size and operations result in it being exposed to the following market risks that arise from its use of financial instruments:
• commodity price risk;
• currency risk; and
• interest rate risk.

The above risks may affect the Group’s income and expenses, or the value of its financial instruments. The objective of the Group’s management
of market risk is to maintain this risk within acceptable parameters, while optimising returns. Generally, the Group applies hedge accounting to
manage the volatility in profit and loss arising from market risk.

The Group’s exposure to, and management of, these risks is explained below. It often includes derivative financial instruments, the uses of which
are described in note 16C.

POTENTIAL IMPACT OF RISK

MANAGEMENT POLICY AND
HEDGING STRATEGY

SENSITIVITY TO THE RISK

(I) COMMODITY PRICE RISK
The Group is exposed to the risk of changes in
commodity prices in relation to its purchase
of certain raw materials.

At 31 December 2018, the Group had hedged
its exposure to future commodity purchases
with commodity derivatives valued at €580
million (2017: €382 million).

(II) CURRENCY RISK
Currency risk on sales, purchases and
borrowings
Because of Unilever’s global reach, it is
subject to the risk that changes in foreign
currency values impact the Group’s sales,
purchases and borrowings.

At 31 December 2018, the exposure to the
Group from companies holding financial
assets and liabilities other than in their
functional currency amounted to €105 million
(2017: €45 million).

The Group uses commodity forward
contracts to hedge against this risk. All
commodity forward contracts hedge
future purchases of raw materials and the
contracts are settled either in cash or by
physical delivery.

Commodity derivatives are generally
designated as hedging instruments in
cash flow hedge accounting relations. All
commodity forward contracts are done in line
with approvals from the Global Commodity
Executive which is chaired by the Unilever
Chief Supply Chain Officer (CSCO).

The Group manages currency exposures within
prescribed limits, mainly through the use of
forward foreign currency exchange contracts.

Operating companies manage foreign
exchange exposures within prescribed limits.
Local compliance is monitored centrally.

Exchange risks related to the principal
amounts of the US$ and Swiss franc
denominated debt either form part of
hedging relationships themselves, or are
hedged through forward contracts.

The aim of the Group’s approach to
management of currency risk is to leave the
Group with no material residual risk. This
aim has been achieved in all years presented.

112

A 10% increase in commodity prices
as at 31 December 2018 would have led
to a €51 million gain on the commodity
derivatives in the cash flow hedge reserve
(2017: €38 million gain in the cash flow hedge
reserve). A decrease of 10% in commodity
prices on a full-year basis would have the
equal but opposite effect.

As an estimation of the approximate impact
of the residual risk, with respect to financial
instruments, the Group has calculated the
impact of a 10% change in exchange rates.

Impact on income statement
A 10% strengthening of the euro against key
currencies to which the Group is exposed
would have led to approximately an additional
€11 million gain in the income statement
(2017: €5 million gain). A 10% weakening of
the euro against these currencies would have
led to an equal but opposite effect.

Financial StatementsAnnual Report on Form 20-F 2018

MANAGEMENT POLICY AND
HEDGING STRATEGY

SENSITIVITY TO THE RISK

16B. MANAGEMENT OF MARKET RISK CONTINUED

POTENTIAL IMPACT OF RISK

Currency risk on the Group’s
net investments
The Group is also subject to exchange
risk in relation to the translation of the
net investments of its foreign operations
into euros for inclusion in its consolidated
financial statements.

These net investments include Group
financial loans, which are monetary items
that form part of our net investment in foreign
operations, of €7.5 billion (2017: €7.3 billion),
of which €3.3 billion (2017: €3.4 billion) is
denominated in GBP. In accordance with
IAS 21, the exchange differences on these
financial loans are booked through reserves.

Part of the currency exposure on the Group’s
investments is also managed using US$
and Swiss franc net investment hedges with
a nominal value of €4.4 billion (2017: €3.9
billion) for US$ and €(1.3) billion (2017: €(1.1)
billion) for Swiss francs.

At 31 December 2018, the net exposure of
the net investments in foreign currencies
amounts to €14.5 billion (2017: €16.2 billion).

Unilever aims to minimise this foreign
investment exchange exposure by borrowing
in local currency in the operating companies
themselves. In some locations, however, the
Group’s ability to do this is inhibited by local
regulations, lack of local liquidity or by local
market conditions.

Where the residual risk from these
countries exceeds prescribed limits,
Treasury may decide on a case-by-case
basis to actively hedge the exposure. This is
done either through additional borrowings in
the related currency, or through the use of
forward foreign exchange contracts.

Where local currency borrowings, or forward
contracts, are used to hedge the currency
risk in relation to the Group’s net investment
in foreign subsidiaries, these relationships
are designated as net investment hedges for
accounting purposes.

Unilever’s interest rate management
approach aims for an optimal balance
between fixed and floating-rate interest
rate exposures on expected net debt. The
objective of this approach is to minimise
annual interest costs after tax and
to reduce volatility.

This is achieved either by issuing fixed or
floating-rate long-term debt, or by modifying
interest rate exposure through the use of
interest rate swaps.

Furthermore, Unilever has interest rate
swaps for which cash flow hedge accounting
is applied.

(III) INTEREST RATE RISK(a)
The Group is exposed to market interest rate
fluctuations on its 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. The
Group’s ability to manage interest costs also
has an impact on reported results.

Taking into account the impact of interest
rate swaps, at 31 December 2018, interest
rates were fixed on approximately 99% of
the expected net debt for 2019, and 85%
for 2020 (76% for 2018 and 63% for 2019 at
31 December 2017).

For interest management purposes,
transactions with a maturity shorter than six
months from inception date are not included
as fixed interest transactions.

The average interest rate on short-term
borrowings in 2018 was 0.9% (2017: 0.9%).

(a) See the weighted average amount of net debt with fixed rate interest shown in the following table.

Impact on equity – trade-related cash flow
hedges
A 10% strengthening of the euro against other
currencies would have led to €146 million loss
(out of which €93 million loss would relate to
strengthening against US Dollar) [2017: €210
million (out of which €152 million loss would
relate to strengthening against US Dollar)] on
hedges used to cover future trade cash flows to
which cash flow hedge accounting is applied.

A 10% weakening of the euro against other
currencies would have led to an equal but
opposite effect.

Impact on equity – net investment hedges
A 10% strengthening of the euro against other
currencies would have led to a €312 million
(2017: €277 million) loss on the net investment
hedges used to manage the currency exposure
on the Group's investments.

A 10% weakening of the euro against other
currencies would have led to an equal but
opposite effect.

Impact on equity – net investments in group
companies
A 10% strengthening of the euro against all
other currencies would have led to a €1,455
million negative retranslation effect (2017:
€1,619 million negative retranslation effect).
A 10% weakening of the euro against those
currencies would have led to an equal but
opposite effect. In line with accepted hedge
accounting treatment and our accounting
policy for financial loans, the retranslation
differences would be recognised in equity.

Impact on income statement
Assuming that all other variables remain
constant, a 1 percentage point increase in
floating interest rates on a full-year basis as
at 31 December 2018 would have led to an
additional €8 million of finance income (2017:
€41 million additional finance costs).

A 1 percentage point decrease in floating
interest rates on a full-year basis would have
an equal but opposite effect.

Impact on equity – cash flow hedges
Assuming that all other variables remain
constant, a 1 percentage point increase in
interest rates on a full-year basis as at 31
December 2018 would have led to an additional
€17 million credit in equity from derivatives
in cash flow hedge relationships (2017: €23
million credit).

A 1 percentage point decrease in interest
rates on a full-year basis would have led to
an additional €19 million debit in equity from
derivatives in cash flow hedge relationships
(2017: €28 million debit).

113

Financial StatementsAnnual Report on Form 20-F 2018NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
UNILEVER GROUP CONTINUED

16B. MANAGEMENT OF MARKET RISK CONTINUED

The following table shows the split in fixed and floating-rate interest exposures, taking into account the impact of interest rate swaps and
cross-currency swaps:

Cash and cash equivalents

Current other financial assets

Current financial liabilities

Non-current financial liabilities

Net debt

Of which:

€ million
2018

3,230

874

(3,235)

(21,650)

(20,781)

€ million
2017

3,317

770

(7,968)

(16,462)

(20,343)

Fixed rate (weighted average amount of fixing for the following year)

(21,586)

(16,216)

16C. DERIVATIVES AND HEDGING

The Group does not use derivative financial instruments for speculative purposes. The uses of derivatives and the related values of derivatives are
summarised in the following table. Derivatives used to hedge:

31 December 2018

Foreign exchange derivatives

Fair value hedges

Cash flow hedges

Hedges of net investments in foreign operations

Hedge accounting not applied

Cross-currency Interest rate swaps

Fair value hedges

Cash flow hedges

Hedge accounting not applied

Commodity contracts

Cash flow hedges

Hedge accounting not applied

31 December 2017

Foreign exchange derivatives

Fair value hedges

Cash flow hedges

Hedges of net investments in foreign operations

Hedge accounting not applied

Cross-currency Interest rate swaps

Fair value hedges

Cash flow hedges

Hedge accounting not applied

Commodity contracts

Cash flow hedges

Hedge accounting not applied

€ million

Trade
and other
receivables

Financial
assets

€ million
Trade
payables
and other
liabilities

€ million

Current
financial
liabilities

€ million
Non-
current
financial
liabilities

–

–
58(a)
67(a)

–

(25)

–

(41)

–

(74)

–

–
(21)(a)
(105)(a)

–

(268)

(8)

–

194

(140)

(126)

(276)

Total assets 276

Total liabilities (542)

–

–
9(a)
73(a)

–

116

–

(40)

–

(54)

–

(19)

–

(113)

–

–
(103)(a)
35(a)

–

(18)

–

(335)

–

(86)

(335)

Total assets 173

Total liabilities (534)

€ million

Total

–

(37)

–

(199)

(8)

(74)

(266)

–

(8)

(94)

(351)

(7)

–

(361)

(a) Swaps that hedge the currency risk on intra-group loans and offset ‘Hedges of net investments in foreign operations’ are included within ‘Hedge accounting not

applied'. See below for further details.

114

Financial StatementsAnnual Report on Form 20-F 2018
16C. DERIVATIVES AND HEDGING CONTINUED

MASTER NETTING OR SIMILAR AGREEMENTS
A number of legal entities within our Group enter into derivative transactions under International Swap and Derivatives Association (ISDA) master
netting agreements. In general, under such agreements the amounts owed by each counter-party on a single day in respect of all transactions
outstanding in the same currency are aggregated into a single net amount that is payable by one party to the other. In certain circumstances,
such as when a credit event such as a default occurs, all outstanding transactions under the agreement are terminated, the termination value is
assessed and only a single net amount is payable in settlement of all transactions.

The ISDA agreements do not meet the criteria for offsetting the positive and negative values in the consolidated balance sheet. This is because
the Group does not have any currently legally enforceable right to offset recognised amounts, between various Group and bank affiliates, because
the right to offset is enforceable only on the occurrence of future credit events such as a default.

The column ‘Related amounts not set off in the balance sheet – Financial instruments’ shows the netting impact of our ISDA agreements,
assuming the agreements are respected in the relevant jurisdiction.

(I) FINANCIAL ASSETS
The following financial assets are subject to offsetting, enforceable master netting arrangements and similar agreements.

€ million

Gross
amounts of
recognised
financial
assets

€ million
Gross
amounts of
recognised
financial
assets set
off in the
balance
sheet

Related amounts not set
off in the balance sheet

€ million

Net amounts
of financial
assets
presented
in the
balance
sheet

Financial
instruments

Cash
collateral
received

Net amount

339

(63)

276

(164)

(10)

102

276

(103)

173

(108)

(6)

As at 31 December 2018

Derivative financial assets

As at 31 December 2017

Derivative financial assets

(II) FINANCIAL LIABILITIES
The following financial liabilities are subject to offsetting, enforceable master netting arrangements and similar agreements.

As at 31 December 2018

Derivative financial liabilities

As at 31 December 2017

Derivative financial liabilities

Related amounts not set
off in the balance sheet

€ million

Gross
amounts of
recognised
financial
liabilities

€ million
Gross
amounts of
recognised
financial
liabilities set
off in the
balance
sheet

Net amounts
of financial
liabilities
presented
in the
balance
sheet

Financial
instruments

Cash
collateral
pledged

(605)

(542)

164

(637)

103

(534)

108

–

Net amount

(378)

(426)

115

Financial StatementsAnnual Report on Form 20-F 2018NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
UNILEVER GROUP CONTINUED

17. INVESTMENT AND RETURN

CASH AND CASH EQUIVALENTS
Cash and cash equivalents in the balance sheet include deposits, investments in money market funds and highly liquid investments. To be
classified as cash and cash equivalents, an asset must:
• be readily convertible into cash;
• have an insignificant risk of changes in value; and
• have a maturity period of three months or less at acquisition.

Cash and cash equivalents in the cash flow statement also include bank overdrafts and are recorded at amortised cost.

OTHER FINANCIAL ASSETS
The Group classifies its financial assets into the following measurement categories:
• those to be measured subsequently at fair value (either through other comprehensive income, or through profit or loss), and
• those to be measured at amortised cost.

This classification depends on our business model for managing the financial asset and the contractual terms of the cash flows.

At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit
or loss, transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at
fair value through profit or loss are expensed in profit or loss.

All financial assets are either debt instruments or equity instruments. Debt instruments are those that provide the Group with a contractual
right to receive cash or another asset. Equity instruments are those where the Group has no contractual right to receive cash or another asset.

Debt instruments
The subsequent measurement of debt instruments depends on the Groups business model for managing the asset and the cash flow
characteristics of the asset. There are three measurement categories that debt instruments are classified as:
• amortised cost;
• financial assets at fair value through other comprehensive income; or
• financial assets at fair value through profit or loss.

(I) Amortised cost
Assets measured at amortised cost are those which are held to collect cash flows on the repayment of principal or interest. A gain or loss on
a debt investment recognised at amortised cost on de-recognition or impairment is recognised in profit or loss. Interest income is recognised
within finance income using the effective interest rate method.

(II) Fair value through other comprehensive income
Assets that are held at fair value through other comprehensive income are those that are held to collect cash flows on the repayment of
principal and interest or which are held to recognise a capital gain through the sale of the asset. Movements in the carrying amount are
recognised in other comprehensive income except for the recognition of impairment, interest income and foreign exchange gains or losses
which are recognised in profit or loss. On de-recognition, the cumulative gain or loss recognised in other comprehensive income is reclassified
from equity to profit or loss. Interest income is included in finance income using the effective interest rate method.

(III) Fair value through profit or loss
Assets that do not meet the criteria for either amortised cost or fair value through other comprehensive income are measured as fair value
through profit or loss. Related transaction costs are expensed as incurred. Unless they form part of a hedging relationship, these assets are held
at fair value, with changes being recognised in the income statement. Interest income from these assets is included within finance income.

Equity instruments
The Group subsequently measures all equity instruments at fair value. Where the Group has elected to present fair value gains and losses
on equity investments in other comprehensive income, there is no subsequent reclassification of fair value gains or losses to profit or loss.
Dividends from these investments continue to be recognised in profit or loss.

IMPAIRMENT OF FINANCIAL ASSETS
Financial instruments classified as amortised cost and debt instruments classified as fair value through other comprehensive income are
assessed for impairment. The Group assesses the probability of default of an asset at initial recognition and then whether there has been
a significant increase in credit risk on an ongoing basis.

To assess whether there is a significant increase in credit risk the Group compares the risk of a default occurring on the asset as at the
reporting date with the risk of default as at the date of initial recognition. It considers available reasonable and supportive forwarding-looking
information. Macroeconomic information (such as market interest rates or growth rates) is also considered

Financial assets are written off when there is no reasonable expectation of recovery, such as a debtor failing to engage in a repayment plan
with the company. Impairment losses on assets classified as amortised cost are recognised in profit or loss. When a later event causes the
impairment losses to decrease, the reduction in impairment loss is also recognised in profit or loss. Permanent impairment losses on debt
instruments classified as fair value through other comprehensive income are recognised in profit or loss.

116

Financial StatementsAnnual Report on Form 20-F 201817. INVESTMENT AND RETURN CONTINUED

17A. FINANCIAL ASSETS

The Group’s Treasury function aims to protect the Group’s financial investments, while maximising returns. The fair value of financial assets is the
same as the carrying amount for 2018 and 2017. The Group’s cash resources and other financial assets are shown below.

Financial assets(a)

Cash and cash equivalents

Cash at bank and in hand

Short-term deposits with maturity of less than three months

Other cash equivalents

Other financial assets
Amortised cost(b)
Financial assets at fair value through other comprehensive income(c)

Financial assets at fair value through profit or loss:

Derivatives
Other(d)

Held-to-maturity investments

Loans and receivables

Available-for-sale financial assets

Total

€ million

Current
2018

€ million
Non-
current
2018

€ million

Total
2018

Current
2017

€ million
Non-
current
2017

€ million

Total
2017

2,174

1,024

3,230

382

154

194

144

–

2,174

1,024

1,904

1,333

3,230

3,317

247

175

–

220

–

629

329

194

364

–

116

137

277

202

770

4,087

–

125

186

362

675

1,904

1,333

3,317

–

116

139

163

463

564

1,445

4,762

874

4,104

642

1,516

4,746

(a) For the purposes of this note and note 15C, financial assets and liabilities exclude trade and other current receivables and trade payables and other liabilities which

are covered in notes 13 and 14 respectively.

(b) Current amortised cost assets include short-term deposits with banks with maturities of longer than three months. These are reclassified from loans and

receivables under IAS 39, on adoption of IFRS9.

(c) Current financial assets at fair value through other comprehensive income include Indian government securities. Included within non-current financial assets at

fair value through other comprehensive income are equity investments of €148 million. These investments are not held by Unilever for trading purposes and hence
the Group has opted to recognise fair value movements through other comprehensive income. These assets are reclassified from available-for-sale financial assets
on adoption of IFRS 9. The fair value movement in 2018 of these equity investments was €(9) million.

(d) Current other financial assets at fair value through profit or loss include A- or higher rated money and capital market instruments. Included within non-current

financial assets at fair value through profit or loss are assets in a trust to fund benefit obligations in the US (see also note 4B) of €59 million (2017: €63 million) and
investments in a number of companies and financial institutions in Europe, Australia, India and the US.

Other than changes arising on adoption of IFRS 9, there were no significant changes on account of change in business model in classification of
financial assets since 31 December 2017.

ADOPTION OF IFRS 9 – IMPACT ON MEASUREMENT OF OTHER FINANCIAL ASSETS
On the date of initial application of IFRS 9, 1 January 2018, financial assets of €207 million previously measured at fair value through equity were
reclassified as fair value through profit or loss. Fair value gains or losses on these financial assets were immaterial in 2017 and 2018. Financial
assets of €6 million previously measured at fair value through profit or loss were reclassified to amortised cost under IFRS 9.

Cash and cash equivalents and trade receivables, which were classified as loans and other receivables under IAS 39, are classified as amortised
cost under IFRS 9.

Cash and cash equivalents reconciliation to the cash flow statement

Cash and cash equivalents per balance sheet

Less: bank overdrafts

Add: cash and cash equivalents included in assets held for sale

Cash and cash equivalents per cash flow statement

€ million
2018

€ million
2017

3,230

(140)

–

3,090

3,317

(167)

3,169

Approximately €0.8 billion (or 26%) of the Group’s cash and cash equivalents are held in the parent and central finance companies, for maximum
flexibility. These companies provide loans to our subsidiaries that are also funded through retained earnings and third party borrowings. We maintain
access to global debt markets through an infrastructure of short and long-term debt programmes. We make use of plain vanilla derivatives, such as
interest rate swaps and foreign exchange contracts, to help mitigate risks. More detail is provided in notes 16, 16A, 16B and 16C on pages 110 to 115.

The remaining €2.4 billion (74%) of the Group’s cash and cash equivalents are held in foreign subsidiaries which repatriate distributable reserves
on a regular basis. For most countries, this is done through dividends which are in some cases subject to withholding or distribution tax. This
balance includes €154 million (2017: €206 million, 2016: €240 million) of cash that is held in a few countries where we face cross-border foreign
exchange controls and/or other legal restrictions that inhibit our ability to make these balances available for general use by the wider business.
The cash will generally be invested or held in the relevant country and, given the other capital resources available to the Group, does not
significantly affect the ability of the Group to meet its cash obligations.

117

Financial StatementsAnnual Report on Form 20-F 2018NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
UNILEVER GROUP CONTINUED

17. INVESTMENT AND RETURN CONTINUED

17B. CREDIT RISK

Credit risk is the risk of financial loss to the Group if a customer or counter-party fails to meet its contractual obligations. Additional information
in relation to credit risk on trade receivables is given in note 13. These risks are generally managed by local controllers. Credit risk related to
the use of treasury instruments, including those held at amortised cost and at fair value through other comprehensive income, is managed on a
Group basis. This risk arises from transactions with financial institutions involving cash and cash equivalents, deposits and derivative financial
instruments. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets. To reduce this
risk, Unilever has concentrated its main activities with a limited number of counter-parties which have secure credit ratings. Individual risk limits
are set for each counter-party based on financial position, credit rating and past experience. Credit limits and concentration of exposures are
actively monitored by the Group’s treasury department. Netting agreements are also put in place with Unilever’s principal counter-parties. In the
case of a default, these arrangements would allow Unilever to net assets and liabilities across transactions with that counter-party. To further
reduce the Group’s credit exposures on derivative financial instruments, Unilever has collateral agreements with Unilever’s principal counter-
parties in relation to derivative financial instruments. Under these arrangements, counter-parties are required to deposit securities and/or cash
as a collateral for their obligations in respect of derivative financial instruments. At 31 December 2018 the collateral held by Unilever under such
arrangements amounted to €10 million (2017: €6 million), of which €10 million (2017: €6 million] was in cash, and €Nil (2017: €Nil) was in the
form of bond securities. The non-cash collateral has not been recognised as an asset in the Group’s balance sheet.

Further details in relation to the Group’s exposure to credit risk are shown in note 13 and note 16A.

18. FINANCIAL INSTRUMENTS FAIR VALUE RISK
The Group is exposed to the risks of changes in fair value of its financial assets and liabilities. The following table summarises the fair values and
carrying amounts of financial instruments.

Fair values of financial assets and financial liabilities

Financial assets

Cash and cash equivalents
Held-to-maturity investments(a)
Loans and receivables(a)
Available-for-sale financial assets(a)
Amortised cost(a)
Financial assets at fair value through other comprehensive income(a)

Financial assets at fair value through profit or loss:

Derivatives

Other

Financial liabilities

Bank loans and overdrafts

Bonds and other loans

Finance lease creditors

Derivatives

Other financial liabilities

€ million

Fair value
2018

Fair value
2017

€ million
Carrying
amount
2018

€ million
Carrying
amount
2017

3,230

3,317

3,230

3,317

–

629

329

194

364

4,746

(816)

(23,691)

(141)

(402)

(150)

163

463

564

–

116

139

4,762

(995)

(23,368)

(147)

(421)

(177)

–

629

329

194

364

4,746

(814)

(23,391)

(128)

(402)

(150)

163

463

564

–

116

139

4,762

(992)

(22,709)

(131)

(421)

(177)

(25,200)

(25,108)

(24,885)

(24,430)

(a) Classification has changed following adoption of IFRS 9. See page 117 and note 1 for further details.

The fair value of trade receivables and payables is considered to be equal to the carrying amount of these items due to their short-term nature.

The instruments that have a fair value that is different from the carrying amount are classified as Level 2 for both 2017 and 2018.

FAIR VALUE HIERARCHY
The fair values shown in notes 15C and 17A have been classified into three categories depending on the inputs used in the valuation technique.
The categories used are as follows:
• Level 1: quoted prices for identical instruments;
• Level 2: directly or indirectly observable market inputs, other than Level 1 inputs; and
• Level 3: inputs which are not based on observable market data.

118

Financial StatementsAnnual Report on Form 20-F 2018
18. FINANCIAL INSTRUMENTS FAIR VALUE RISK CONTINUED
For assets and liabilities which are carried at fair value, the classification of fair value calculations by category is summarised below:

Assets at fair value

Financial assets at fair value through other
comprehensive income

Available-for-sale financial assets

Financial assets at fair value through profit
or loss:
Derivatives(a)

Other

Liabilities at fair value
Derivatives(b)

Contingent consideration

€ million

Notes

Level 1
2018

Level 1
2017

Level 2
2018

Level 2
2017

Level 3
2018

Level 3
2017

€ million
Total fair
value
2018

€ million
Total fair
value
2017

17A

16C

17A

16C

160

–

145

–

215

–

137

–

276

–

173

–

(542)

–

(534)

–

164

–

219

–

342

–

(142)

(445)

329

–

276

364

–

564

173

139

(542)

(142)

(534)

(445)

(a) Includes €82 million (2017: €57 million) derivatives, reported within trade receivables, that hedge trading activities.
(b) Includes €(140) million (2017: €(113) million) derivatives, reported within trade payables, that hedge trading activities.

Other than changes arising on adoption of IFRS 9, there were no significant changes in classification of fair value of financial assets and financial
liabilities since 31 December 2017. There were also no significant movements between the fair value levels since 31 December 2017.

The impact in 2018 income statement due to level 3 instruments is a gain of €272 million (2017: gain of €26 million).

Reconciliation of Level 3 fair value measurements of financial assets and financial liabilities is given below:

Reconciliation of movements in Level 3 valuations

1 January

Gains and losses recognised in profit and loss

Gains and losses recognised in other comprehensive income

Purchases and new issues

Sales and settlements

Transfers into Level 3

31 December

€ million
2018

€ million
2017

(101)

272

(9)

–

241

(106)

(89)

(17)

(101)

SIGNIFICANT UNOBSERVABLE INPUTS USED IN LEVEL 3 FAIR VALUES
The largest asset valued using Level 3 techniques is an executive Life Insurance of €17 million (2017: €22 million). A change in one or more of the
inputs to reasonably possible alternative assumptions would not change the value significantly.

The gains and losses recognised in profit and loss includes a credit from early settlement of contingent consideration for Blueair.

CALCULATION OF FAIR VALUES
The fair values of the financial assets and liabilities are defined as the price that would be received to sell an asset or paid to transfer a liability
in an orderly transaction between market participants at the measurement date. Methods and assumptions used to estimate the fair values are
consistent with those used in the year ended 31 December 2017.

ASSETS AND LIABILITIES CARRIED AT FAIR VALUE

• The fair values of quoted investments falling into Level 1 are based on current bid prices.
• The fair values of unquoted financial assets at fair value through other comprehensive income and at fair value through profit or loss are based
on recent trades in liquid markets, observable market rates, discounted cash flow analysis and statistical modelling techniques such as the
Monte Carlo simulation. If all significant inputs required to fair value an instrument are observable, the instrument is included in Level 2. If one
or more of the significant inputs is not based on observable market data, the instrument is included in Level 3.

• Derivatives are valued using valuation techniques with market observable inputs. The models incorporate various inputs including the credit

quality of counter-parties, foreign exchange spot and forward rates, interest rate curves and forward rate curves of the underlying commodities.
• For listed securities where the market is not liquid, and for unlisted securities, valuation techniques are used. These include the use of recent

arm’s length transactions, reference to other instruments that are substantially the same and discounted cash flow calculations.

119

Financial StatementsAnnual Report on Form 20-F 2018NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
UNILEVER GROUP CONTINUED

18. FINANCIAL INSTRUMENTS FAIR VALUE RISK CONTINUED

OTHER FINANCIAL ASSETS AND LIABILITIES (FAIR VALUES FOR DISCLOSURE PURPOSES ONLY)
• Cash and cash equivalents, trade and other current receivables, bank loans and overdrafts, trade payables and other current liabilities have fair

values that approximate to their carrying amounts due to their short-term nature.
• The fair values of preference shares and listed bonds are based on their market value.
• Non-listed bonds, other loans, bank loans and non-current receivables and payables are based on the net present value of the anticipated future
cash flows associated with these instruments using rates currently available for debt on similar terms, credit risk and remaining maturities.

• Fair values for finance lease creditors have been assessed by reference to current market rates for comparable leasing arrangements.

POLICIES AND PROCESSES USED IN RELATION TO THE CALCULATION OF LEVEL 3 FAIR VALUES

Assets valued using Level 3 valuation techniques are primarily made up of long-term cash receivables and unlisted investments. Valuation
techniques used are specific to the circumstances involved. Unlisted investments include €254 million (2017: €195 million) of investments within
Unilever Ventures companies.

19. PROVISIONS

Provisions are recognised where a legal or constructive obligation exists at the balance sheet date, as a result of a past event, where the
amount of the obligation can be reliably estimated and where the outflow of economic benefit is probable.

Provisions

Due within one year
Due after one year
Total provisions

€ million

Movements during 2018

Restructuring

1 January 2018
Income Statement:
Charges
Releases
Utilisation
Reclassification(a)
Currency translation

31 December 2018

352

320
(51)
(161)
(7)
(8)

445

Legal

192

90
(10)
(130)
16
(15)

143

€ million
2018

624
697
1,321

€ million
2017

525
794
1,319

€ million

Other

419

164
(116)
(26)
76
13

530

Total

1,319

600
(232)
(327)
–
(39)

1,321

€ million
Brazil
indirect taxes

356

26
(55)
(10)
(85)
(29)

203

(a) Includes amounts transferred between classes of provisions.

Restructuring provisions primarily include people costs such as redundancy costs and cost of compensation where manufacturing, distribution,
service or selling agreements are to be terminated. The group expects these provisions to be substantially utilised within the next few years.

The Group is involved from time to time in legal and arbitration proceedings arising in the ordinary course of business. As previously disclosed, along
with other consumer products companies and retail customers, Unilever is involved in a number of ongoing investigations by national competition
authorities. These proceedings and investigations are at various stages and concern a variety of product markets. Where specific issues arise,
provisions are made to the extent appropriate. Due to the nature of the legal cases, the timing of utilisation of these provisions is uncertain.

In 2018 the group paid €104 million for legal cases in relation to investigations by national competition authorities, of which €76 million was
provided in previous years.

Provisions for Brazil indirect taxes are comprised of disputes with Brazilian authorities, in particular relating to tax credits that can be taken for the PIS
and COFINS indirect taxes. These provisions are separate from the matters listed as contingent liabilities in note 20; Unilever does not have provisions
and contingent liabilities for the same matters. Due to the nature of disputed indirect taxes the timing of utilisation of these provisions is uncertain.

20. COMMITMENTS AND CONTINGENT LIABILITIES

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership. All other
leases are classified as operating leases.

Assets held under finance leases are initially recognised at the lower of fair value at the date of commencement of the lease and the present value of
the minimum lease payments. Subsequent to initial recognition, these assets are accounted for in accordance with the accounting policy relating to
that specific asset. The corresponding liability is included in the balance sheet as a finance lease obligation. Lease payments are apportioned between
finance costs in the income statement and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of the
liability. Lease payments under operating leases are charged to the income statement on a straight-line basis over the term of the lease.

Contingent liabilities are either possible obligations that will probably not require a transfer of economic benefits, or present obligations that
may, but probably will not, require a transfer of economic benefits. It is not appropriate to make provisions for contingent liabilities, but there
is a chance that they will result in an obligation in the future. Assessing the amount of liabilities that are not probable is highly judgemental so
contingent liabilities are disclosed on the basis of the known maximum exposure.

120

Financial StatementsAnnual Report on Form 20-F 201820. COMMITMENTS AND CONTINGENT LIABILITIES CONTINUED

Long-term finance lease commitments

Buildings(a)

Plant and machinery

The commitments fall due as follows:

Within 1 year

Later than 1 year but not later than 5 years

Later than 5 years

(a) All leased land is classified as operating leases.

€ million
Future
minimum
lease
payments
2018

€ million

Finance
Cost
2018

Present
value
2018

€ million
Future
minimum
lease
payments
2017

€ million

Finance
cost
2017

Present
value
2017

174

187

117

128

195

206

118

206

–

120

131

The table below shows the net book value of property, plant and equipment under a number of finance lease agreements.

Net book value

Cost

Accumulated depreciation

31 December 2018

Cost

Accumulated depreciation

31 December 2017

€ million

Buildings

€ million
Plant and
equipment

216

(94)

122

206

(84)

122

106

(95)

125

(108)

€ million

Total

322

(189)

133

331

(192)

139

The Group has sublet part of the leased properties under finance leases. Future minimum sublease payments of €26 million (2017: €29 million)
are expected to be received.

Long-term operating lease commitments

Land and buildings

Plant and machinery

Operating lease and other commitments fall due as follows:

Within 1 year

Later than 1 year but not later than 5 years

Later than 5 years

€ million
2018

€ million
2017

1,803

661

2,464

1,885

569

2,454

€ million
Operating
leases
2018

€ million
Operating
leases
2017

€ million
Other
commitments
2018

€ million
Other
commitments
2017

481

1,259

724

2,464

418

1,250

786

2,454

1,099

780

1,910

1,274

935

2,240

The Group has sublet part of the leased properties under operating leases. Future minimum sublease payments of €10 million (2017: €12 million)
are expected to be received.

Other commitments principally comprise commitments under contracts to purchase materials and services. They do not include commitments to
purchase property, plant and equipment, which are reported in note 10 on pages 100 and 101.

CONTINGENT LIABILITIES
Contingent liabilities are possible obligations that are not probable. They arise in respect of litigation against group companies, investigations by
competition, regulatory and fiscal authorities and obligations arising under environmental legislation. In many markets, there is a high degree of
complexity involved in the local tax regimes. The majority of contingent liabilities are in respect of fiscal matters in Brazil.

Assessing the amount of liabilities that are not probable is highly judgemental. Contingent liabilities are disclosed on the basis of the known
maximum exposure. In the case of fiscal matters the known maximum exposure is the amount included on a tax assessment.

121

Financial StatementsAnnual Report on Form 20-F 2018NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
UNILEVER GROUP CONTINUED

20. COMMITMENTS AND CONTINGENT LIABILITIES CONTINUED

A summary of our contingent liabilities is shown in the table below:

Corporate reorganisation – IPI, PIS and COFINS taxes and penalties(a)
Inputs for PIS and COFINS taxes
Goodwill amortisation
Other tax assessments – approximately 600 cases

Total Brazil Tax
Brazil other
Contingent liabilities outside Brazil

Total contingent liabilities

€ million
2018

€ million
2017

2,032
52
177
916

3,177
67
414

3,658

2,092
16
121
1,095

3,324
19
324

3,667

(a) During 2004, and in common with many other businesses operating in Brazil, one of our Brazilian subsidiaries received a notice of infringement from the Federal
Revenue Service in respect of indirect taxes. The notice alleges that a 2001 reorganisation of our local corporate structure was undertaken without valid business
purpose. The 2001 reorganisation was comparable with restructurings done by many companies in Brazil. The original dispute was resolved in the courts in the
Group’s favour. However, in 2013 a new assessment was raised in respect of a similar matter. Additionally, during the course of 2014 and again in 2017 and in 2018
other notices of infringement were issued based on the same grounds argued in the previous assessments. The total amount of the tax assessments in respect of
this matter is €2,032 million (2017: €2,092 million). The judicial process in Brazil is likely to take a number of years to conclude.

The Group believes that the likelihood that the tax authorities will ultimately prevail is low, however there can be no guarantee of success in court.
In each case we believe our position is strong so they have not been provided for and are considered to be contingent liabilities. Due to the fiscal
environment in Brazil the possibility of further tax assessments related to the same matters cannot be ruled out.

The contingent liabilities reported for indirect taxes relating to disputes with the Brazilian authorities are separate from the provisions listed in
note 19; Unilever does not have provision and contingent liabilities for the same matters.

21. ACQUISITIONS AND DISPOSALS

Business combinations are accounted for using the acquisition accounting method as at the acquisition date, which is the date at which control
is transferred to the Group.

Goodwill is measured at the acquisition date as the fair value of consideration transferred, plus non-controlling interests and the fair value
of any previously-held equity interests less the net recognised amount (which is generally fair value) of the identifiable assets and liabilities
assumed. Goodwill is subject to an annual review for impairment (or more frequently if necessary) in accordance with our accounting policies. Any
impairment is charged to the income statement as it arises. Detailed information relating to goodwill is provided in note 9 on pages 97 to 99.

Transaction costs are expensed as incurred, within non-underlying items.

Changes in ownership that do not result in a change of control are accounted for as equity transactions and therefore do not have any impact
on goodwill. The difference between consideration and the non-controlling share of net assets acquired is recognised within equity.

2018
In 2018 the Group completed the following business acquisitions and disposals as listed below. In each case 100% of the businesses were
acquired unless stated otherwise. Total payment for 2018 acquisitions is €1,294 million (2017: €4,912 million for acquisitions completed during
that year). More information related to the 2018 acquisitions is provided on pages 123 and 124.

DEAL COMPLETION DATE ACQUIRED/DISPOSED BUSINESS

15 January 2018

28 February 2018

2 July 2018

27 September 2018

1 October 2018

1 November 2018

Acquired the remaining 2% non-controlling interest of Carver Korea bringing the Group’s ownership to 100%.

Acquired Quala beauty & personal and home care business in Latin America.

Sold the global Spreads business (excluding Southern Africa) to KKR.

Sold the Spreads business in Southern Africa to Remgro plus a cash consideration of €306 million in
exchange for Remgro’s 25.75% shareholding in Unilever South Africa.

Acquired Adityaa Milk, an ice cream business in India. The acquisition strengthens Unilever front end
distribution reach in India.

Acquired 75% of Equilibra, the Italian personal care and wellbeing business. The acquisition complements
Unilever's product range through its presence in the ‘natural’ personal care segment.

Acquired Betty Ice, a leading ice cream business in Romania. The acquisition enriches Unilever product range
through local offerings and price tiers.

3 December 2018

Acquired Denny Ice, an ice cream business in Bulgaria to strengthen local product knowledge.

31 December 2018

Acquired Vegetarian Butcher, a vegetarian meat replacement, foods business in the Netherlands. The
acquisition fits with Unilever’s strategy to expand its portfolio into plant-based foods responding to the growing
trend of vegetarian and vegan meals.

122

Financial StatementsAnnual Report on Form 20-F 201821. ACQUISITIONS AND DISPOSALS CONTINUED

In addition to the completed deals in the table above:
– On 3 December 2018 the Group announced that it had signed an agreement to acquire the health food drinks portfolio of GlaxoSmithKline in
India and 20 other predominantly Asian markets. The consideration is payable via a combination of cash and shares of Hindustan Unilever
Limited and estimated to be approximately €3.3 billion based on the share price of Hindustan Unilever Limited and exchange rates at the time
of the agreement. The transaction is expected to complete in Q4 2019. In 2018 the health food drinks portfolio of GlaxoSmithKline delivered
turnover of around €550 million primarily from products under the Horlicks and Boost brands.

– On 27 January 2019 the Group completed the acquisition of The Laundress, a premium eco-friendly laundry care business in the US. The

acquisition expands Unilever's portfolio into the home care premium market and fits with Unilever's Sustainable Living Plan.

– On 5 February 2019 the Group completed the acquisition of Graze, a healthy snacking business in the UK. The acquisition accelerates Unilever's

presence in the healthy snacking and out of home markets.

– On 1 March 2019 the Group completed the sale of its Alsa baking and dessert business to Dr. Oetker.

EFFECT ON CONSOLIDATED INCOME STATEMENT
The acquisition deals completed in 2018 have contributed €253 million to Group revenue and €55 million to Group operating profit since the
relevant acquisition dates.

If the acquisition deals completed in 2018 had all taken place at the beginning of the year, Group revenue would have been €51,140 million and
Group operating profit would have been €12,551 million.

2017
In 2017 the Group completed the following business acquisitions and disposals listed below. For the businesses acquired, the acquisition
accounting has been finalised and subsequent changes to the provisional numbers published last year were immaterial.

DEAL COMPLETION DATE ACQUIRED/DISPOSED BUSINESS

1 February 2017

28 March 2017

1 May 2017

1 August 2017

7 September 2017

9 September 2017

1 November 2017

1 December 2017

11 December 2017

18 December 2017

31 December 2017

Acquired Living Proof, an innovative premium hair care business, using patented technology and breakthrough
science. Living Proof forms part of our prestige Personal Care business.

Sold the AdeS soy beverage business in Latin America to Coca-Cola FEMSA and The Coca-Cola Company.

Acquired Kensington’s, a condiment maker. Kensington's is a mission-driven company with a leading brand
sold in the organic and naturals marketplace.

Acquired 60% of EAC Myanmar, a home care business to form Unilever EAC Myanmar Company Limited.

Acquired Hourglass, a luxury colour cosmetics business, known for innovation and exceptional product.
Hourglass forms part of our prestige Personal Care business.

Acquired Pukka Herbs, an organic herbal tea business, that enhances our presence in the Naturals segment
of Refreshment.

Acquired Weis, an ice cream business. Weis is a second-generation Australian ice cream and frozen dessert
manufacturer with the original iconic Fruito Bar and aims to increase our market position in Refreshment.

Acquired 98% of Carver Korea, a leading skincare business in North Asia from Bain Capital Private Equity
and Goldman Sachs. The brands acquired provide Unilever a presence in South Korea. Further details are
provided below.

Acquired Mãe Terra, a Brazilian naturals and organic food business. Mãe Terra is a fast-growing and well-
loved brand in Brazil and adds to the Foods business by providing health-conscious consumers with organic
and nutritious food products.

Acquired TAZO, the leading brand in the speciality tea category, which enhances our presence in the Black,
Green and Herbal tea segments of Refreshment.

Acquired Sundial Brands, a leading haircare and skincare company recognised for its innovative use of
high-quality and culturally authentic ingredients.

Acquired Schmidt’s Naturals, a personal care company. Schmidt’s Naturals is a strong, innovative brand in the
fast-growing naturals category, that will complement our existing portfolio of US deodorants.

EFFECT ON CONSOLIDATED BALANCE SHEET

ACQUISITIONS
The following table sets out the effect of the acquisitions in 2018, 2017 and 2016 on the consolidated balance sheet. The fair values currently
used for opening balances of all acquisitions made in 2018 are provisional, with the exception of Quala, whose opening balance sheet was
finalised within 2018. Balances remain provisional due to missing relevant information about facts and circumstances that existed as of the
acquisition date and where valuation work is still ongoing, notably for acquisitions which completed in the second half of 2018.

123

Financial StatementsAnnual Report on Form 20-F 2018NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
UNILEVER GROUP CONTINUED

21. ACQUISITIONS AND DISPOSALS CONTINUED

Detailed information relating to goodwill is provided in note 9 on pages 97 to 99. The value of goodwill which is expected to be tax deductible
is €5 million.

€ million
2018

€ million
2017

€ million
2016

Net assets acquired

Non-controlling interest

Goodwill

Total payment for acquisition

Exchange rate gain/(loss) on cash flow hedge

Total consideration

In 2018 the net assets acquired and total payment for acquisition consist of:

815

(17)

496

1,294

(100)

1,194

2,423

(50)

2,539

4,912

4,963

Intangible assets

Other non-current assets

Trade and other receivables

Other current assets

Non-current liabilities

Current liabilities

Net assets acquired

Non-controlling interest

Goodwill

Exchange rate gain/(loss) on cash flow hedges(a)

Cash consideration

Deferred consideration

Total consideration

929

–

1,140

2,069

2,083

€ million
2018

859

(134)

(25)

815

(17)

496

(100)

1,172

1,194

(a) Exchange rate gain/(loss) on the cash flow hedge in relation to the acquisition of Quala.

No contingent liabilities were acquired in the acquisitions described above. In 2018 a credit to acquisition and disposal related costs of €277
million was recognised as a result of the early settlement of the contingent consideration for Blueair. This credit more than offset an impairment
charge of €208 million related to a Blueair intangible asset.

Goodwill represents the future value which the Group believes it will obtain through operational synergies and the application of acquired
company ideas to existing Unilever channels and businesses.

DISPOSALS
The following table sets out the effect of the disposals in 2018, 2017 and 2016 on the consolidated balance sheet. The results of disposed
businesses are included in the consolidated financial statements up to their date of disposal.

Goodwill and intangible assets

Other non-current assets

Current assets

Trade creditors and other payables

Net assets sold

(Gain)/loss on recycling of currency retranslation on disposal

Profit/(loss) on sale attributable to Unilever

Consideration

Cash

Cash balances of businesses sold

Non-cash items and deferred consideration

€ million
2018

€ million
2017

€ million
2016

2,510

666

261

(107)

3,330

(71)

4,331

7,590

7,135

321

134

7,590

(8)

165

332

563

560

–

563

–

119

–

(95)

–

On 2 July 2018 Unilever sold the global Spreads business (excluding Southern Africa) to KKR for €7,144 million cash consideration and the
Southern Africa Spreads business to Remgro for a non-cash consideration of €446 million. The intangible assets sold include brands such as
Becel, Flora, Country Crock, Blue Brand, I Can’t Believe It’s Not Butter, Rama, and Pro-Activ. Goodwill of €2,429 million was allocated from the
Foods CGUs. Manufacturing assets in 28 countries were disposed. Profit on these disposals was €4,331 million, recognised as a non-underlying
item (see note 3).

124

Financial StatementsAnnual Report on Form 20-F 201822. ASSETS AND LIABILITIES HELD FOR SALE

Non-current assets and groups of assets and liabilities which comprise disposal groups are classified as ‘held for sale’ when all of the
following criteria are met: a decision has been made to sell; the assets are available for sale immediately; the assets are being actively
marketed; and a sale has been agreed or is expected to be concluded within 12 months of the balance sheet date.

Immediately prior to classification as held for sale, the assets or groups of assets are remeasured in accordance with the Group’s accounting
policies. Subsequently, assets and disposal groups classified as held for sale are valued at the lower of book value or fair value less disposal
costs. Assets held for sale are neither depreciated nor amortised.

Property, plant and equipment held for sale

Disposal groups held for sale(a)(b)

Non-current assets

Goodwill and intangibles

Property, plant and equipment

Deferred tax assets

Other non-current assets

Current assets

Inventories

Trade and other receivables

Current tax assets

Cash and cash equivalents

Other

Assets held for sale

Current liabilities

Trade payables and other current liabilities

Current tax liabilities

Provisions

Non-current liabilities

Pensions and post-retirement healthcare liabilities

Provisions

Financial liabilities

Deferred tax liabilities

Liabilities held for sale

(a) In 2018, disposal groups held for sale consists of assets mainly relating to Alsa baking and dessert business.
(b) In 2017, disposal groups held for sale were primarily related to the Spreads business which was disposed during the year.

€ million
2018
Total

€ million
2017
Total

–

101

–

119

–

2,311

552

145

3,009

130

185

3,224

106

118

–
42

170

125

Financial StatementsAnnual Report on Form 20-F 2018NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
UNILEVER GROUP CONTINUED

23. RELATED PARTY TRANSACTIONS

A related party is a person or entity that is related to the Group. These include both people and entities that have, or are subject to, the
influence or control of the Group.

The following related party balances existed with associate or joint venture businesses at 31 December:

Related party balances

Trading and other balances due from joint ventures

Trading and other balances due from/(to) associates

€ million
2018

€ million
2017

121

–

124

–

JOINT VENTURES
Sales by Unilever group companies to Unilever FIMA, LDA (formerly known as Unilever Jerónimo Martins) and Pepsi Lipton joint ventures were
€107 million and €65 million in 2018 (2017: €117 million and €65 million) respectively. Sales from Unilever FIMA, LDA and from Pepsi Lipton joint
ventures to Unilever group companies were €83 million and €51 million in 2018 (2017: €68 million and €65 million) respectively. Royalties and
service fee paid by Unilever FIMA LDA to Unilever group companies were €16 million (2017: €17 million). Balances owed by/(to) Unilever FIMA,
LDA and Pepsi Lipton joint ventures at 31 December 2018 were €127 million and €(6) million (2017: €130 million and €(6) million) respectively.

ASSOCIATES
Langholm Capital Partners invests in private European companies with above-average longer-term growth prospects.

Langholm Capital II was launched in 2009. Unilever has invested €62 million in Langholm II, with an outstanding commitment at the end of 2018
of €13 million (2017: €17 million). During 2018, Unilever received €0.3 million (2017: €10 million) from its investment in Langholm Capital II.

24. SHARE BUYBACK
During 2018 the group repurchased 62,202,168 Unilever N.V. ordinary shares (2017: 50,250,099) and 63,236,433 Unilever PLC ordinary shares
(2017: 51,692,284). Consideration paid for the repurchase of these shares including transaction costs was €6,020 million (2017: €5,014 million)
which was initially recorded in other reserves.

25. REMUNERATION OF AUDITORS
This note includes all amounts paid to the Group’s auditors, whether in relation to their audit of the Group or otherwise. During the year the Group
(including its subsidiaries) obtained the following services from the Group auditors and its associates:

Fees payable to the Group’s auditors for the audit of the consolidated and parent
company accounts of Unilever N.V. and Unilever PLC(a)

Fees payable to the Group’s auditors for the audit of accounts of subsidiaries of
Unilever N.V. and Unilever PLC pursuant to legislation(b)

Total statutory audit fees(c)

Audit-related assurance services

Other taxation advisory services

Services relating to corporate finance transactions

Other assurance services

All other non-audit services

€ million
2018

€ million
2017

€ million
2016

16
–(d)
–(d)

–
5(e)
–(d)

14
–(d)
–(d)

–
5(e)
–(d)

14
–(d)
–(d)

–
–(d)
–(d)

(a) Of which €1 million was payable to KPMG Accountants N.V. (2017: €1 million; 2016: €1 million) and €5 million was payable to KPMG LLP (2017: €4 million; 2016:

€3 million).

(b) Comprises fees payable to the KPMG network of independent member firms affiliated with KPMG International Cooperative for audit work on statutory financial

statements and Group reporting returns of subsidiary companies.

(c) Amount payable to KPMG in respect of services supplied to associated pension schemes was less than €1 million individually and in aggregate (2017: less than

€1 million individually and in aggregate; 2016: less than €1 million individually and in aggregate).

(d) Amounts paid in relation to each type of service are individually less than €1 million. In aggregate the fees paid were less than €1 million (2017: €1 million;

2016: €1 million).

(e) 2018 includes €4 million (2017: €5 million) for audits and reviews of carve-out financial statements of the Spreads business and €1 million (2017: €Nil) for

assurance work on Simplification.

126

Financial StatementsAnnual Report on Form 20-F 2018

26. EVENTS AFTER THE BALANCE SHEET DATE

Where events occurring after the balance sheet date provide evidence of conditions that existed at the end of the reporting period, the impact
of these events is adjusted within the financial statements. Otherwise, events after the balance sheet date of a material size or nature are
disclosed below.

On 31 January 2019 Unilever announced a quarterly dividend with the 2018 fourth quarter results of €0.3872 per NV ordinary share and £0.3361
per PLC ordinary share.

27. SIGNIFICANT SUBSIDIARIES
The following represents the significant subsidiaries of the Group as 31 December 2018, that principally affect the turnover, profit, and net assets
of the Group. The percentage of share capital is shown below represents the aggregate percentage of equity capital directly or indirectly held by
NV or PLC in the company. The companies are incorporated and principally operated in the countries under which they are shown except where
stated otherwise.

Country

Name of company

Argentina
Australia
Brazil
Canada
China
China
England and Wales
England and Wales
England and Wales
France
Germany
Germany
Germany
Germany
Germany
India
Indonesia
Italy
Japan
Mexico
Netherlands
Netherlands
Netherlands
Netherlands
Pakistan
Philippines
Poland
Russia
Singapore
South Africa
Spain
Switzerland
Switzerland
Switzerland
Thailand
Turkey
USA
USA
USA
Vietnam

Unilever de Argentina S.A.
Unilever Australia Limited
Unilever Brasil Ltda.
Unilever Canada Inc.
Walls (China) Co. Ltd.
Unilever Services (Hefei) Co Ltd
Unilever UK & CN Holdings Limited
Unilever U.K. Holdings Limited
Unilever UK Limited
Unilever France S.A.S
Maizena Grundstücksverwaltung GmbH & Co. OHG
Pfanni GmbH & Co. OHG Stavenhagen
Unilever Deutschland GmbH
Unilever Deutschland Holding GmbH
Unilever Deutschland Produktions GmbH & Co. OHG
Hindustan Unilever Limited
PT Unilever Indonesia, Tbk.
Unilever Italia Mkt Operations S.R.L
Unilever Japan Customer Marketing K.K.
Unilever de Mexico, S. de R.I. de C.V.
Mixhold B.V.
Unilever Finance International B.V.
Unilever Nederland B.V.
UNUS Holding B.V.
Unilever Pakistan Limited
Unilever Philippines, Inc.
Unilever Polska Sp. z o.o.
OOO Unilever Rus
Unilever Asia Private Limited
Unilever South Africa (Pty) Limited
Unilever Espana S.A.
Unilever ASCC AG
Unilever Finance International AG
Unilever Supply Chain Company AG
Unilever Thai Trading Limited
Unilever Sanayi ve Ticaret Turk A.S
Conopco, Inc.
Unilever Capital Corporation
Unilever United States, Inc.
Unilever Vietnam International Company Limited

NV %

64.55
–
64.55
64.55
100.00
100.00
–
–
5.61
64.54
63.61
64.55
64.55
64.55
64.55
–
54.86
100.00
100.00
64.55
64.55
100.00
100.00
55.40
–
64.55
–
11.89
100.00
8.98
100.00
100.00
100.00
100.00
64.55
64.54
55.40
55.40
55.40
100.00

PLC %

35.45
100
35.45
35.45
–
–
100
100
94.39
35.45
36.39
35.45
35.45
35.45
35.45
67.19
30.13
–
–
35.45
35.45
–
–
44.60
99.23
35.45
100.00
88.11
–
91.02
–
–
–
–
35.45
35.44
44.60
44.60
44.60
–

Due to the inclusion of certain partnerships in the consolidated group financial statements of Unilever, para 264(b) of the German trade law grants
an exemption from the duty to prepare individual statutory financial statements and management reports in accordance with the requirements for
limited liability companies and to have these audited and published.

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137

Financial StatementsAnnual Report on Form 20-F 2018GROUP COMPANIES

AS AT 31 DECEMBER 2018

In accordance with Articles 2:379 and 2:414 of the Dutch Civil Code and Section 409 of the Companies Act 2006 a list of subsidiaries, partnerships,
associates, and joint ventures as at 31 December 2018 is set out below. All subsidiary undertakings are subsidiary undertakings of their
immediate parent undertaking(s) pursuant to section 1162 (2) (a) of the Companies Act 2006 unless otherwise indicated – see the notes on
page 145. All subsidiary undertakings not included in the consolidation are not included because they are not material for such purposes. All
associated undertakings are included in the Unilever Group’s financial statements using the equity method of accounting unless otherwise
indicated – see the notes on page 145. See page 127 of the Annual Report and Accounts for a list of the significant subsidiaries.

Companies are listed by country and under their registered office address. The aggregate percentage of capital held by the Unilever Group is
shown after the subsidiary company name, except where it is 100%. If the Nominal Value field is blank, then the Share Class Note will identify
the type of interest held in the entity.

SUBSIDIARY UNDERTAKINGS INCLUDED IN THE CONSOLIDATION

Name of
Undertaking

% holding
as
between
NV /PLC

Nominal
Value

Share
Class
Note

Name of
Undertaking

% holding
as
between
NV /PLC

Nominal
Value

Share
Class
Note

72.50/0

Algeria – Zone Industrielle Hassi Ameur Oran 31000
Unilever Algérie SPA (72.50)
Argentina – Tucumán 1, Piso 4°, Cdad. de Buenos Aires
Arisco S.A.
Unilever De Argentina S.A.
S.A.G.R.A. S.A. (98)
Argentina – Mendoza km 7/8 – Pocitos, San Juan
Helket S.A.
Australia – Level 17, 2-26 Park Street, Sydney, NSW 2000
Ben & Jerry’s Franchising Australia Limited
Tea Too Pty Limited
TIGI Australia Pty Limited

64.55/35.45
64.55/35.45
63.26/34.74

64.55/35.45

Unilever Australia (Holdings) Pty Limited
Unilever Australia Group Partnership
Unilever Australia Group Pty Limited

DZD1,000.00

ARA1.00
ARA1.00
ARA1.00

ARA1.00

AUD1.00
AUD1.00
AUD1.00
AUD1.00
AUD1.00

AUD2.00
AUD1.00
AUD1.00
AUD1.00
AUD1.00
AUD1.00

1
1
1

1
1
2
3
1
4
1
2
3
1
1
1

0/100
0/100
0/100
0/100
0/100
0/100
0/100
0/100
0/100
0/100
0/100
0/100

1
1

100/0

0/60.75

1
1
1
1
1

AUD1.00

BDT100.00

55.40/44.60

EUR185.50

0/100
0/100

AUD1.00
AUD2.00

100/0
100/0
100/0
100/0
100/0

EUR36,337.00
EUR36,336.00
EUR36,336.00
EUR218,019.00
EUR10,000,000.00

Unilever Australia Limited
Unilever Australia Supply Services Limited
Unilever Australia Trading Limited
Australia – 111 Chandos Street, Crows Nest, NSW 2065
Dermalogica Holdings Pty Limited
Dermalogica Pty Limited
Australia – DLA Piper - Australia. Level 22, No. 1 Martin Place, Sydney NSW 2000
Dollar Shave Club Australia Pty Limited
Austria -Stella-Klein-Löw Weg 13, 1023 Wien
Delico Handels GmbH
Kuner Nahrungsmittel GmbH
TIGI Handels GmbH
ULPC Handels GmbH
Unilever Austria GmbH
Bangladesh – 51 Kalurghat Heavy Industrial Area, Kalurghat, Chittagong
Unilever Bangladesh Limited (60.75)
Belgium – Rond-Point Schuman, 6 Box 5, 1040 Ettebeek
Intuiskin SPRL
Belgium – Humaniteitslaan 292, 1190 Brussels
Unilever Belgium NV/SA
Unilever Belgium Services SA/NV
Unilever Lipton Tea NV/SA
Bolivia – Av. Blanco Galindo Km. 10.4 Cochabamba
Unilever Andina Bolivia S.A.
Brazil – Rua Caio Prado, 267 – Room 13, São Paulo/SP
Alberto-Culver do Brasil Cosmeticos Limitada
5
Brazil – Rua Oscar Freire, n. 957, mezanino, room 1, Cerqueira Cesar, Zip Code 01426-003,
São Paulo/SP
Euphoria Ice Cream Comercio de Alimentos
Limitada
Brazil – Rod. BR 101-Norte, s/n, km. 43,6 – Room 4, Igarassu /PE
Cicanorte Industria de Conservas Alimenticas S.A. 64.55/35.45
1
Brazil – Av. das Nações Unidas, n. 14.261, 8th floor, qd 10, Wing B, Vila Gertrudes, ZIP Code
04794-000 – São Paulo/SP
RGG – Comércio E Representações
De Produtos De Higiene Pessoal Limitada
Brazil – Rua Pedroso Alvarenga, 1046, Suit 146, Itaim Bibi, Sao Paulo
Sorvete Escola Comercio de Alimentos Limitada
Brazil – Av. Dr. Cardoso de Melo, nº 1855, Room A, Suite 152, 15th floor, Vila Olímpia, São
Paulo/SP CEP 04548-005.
E-UB Comércio Ltda
Brazil – Av. das Nações Unidas, n. 14.261, 8th floor, qd 7, Wing B, Vila Gertrudes, ZIP Code
04794-000 – São Paulo/SP
UBA 2 – Comércio e Representação de
Alimentos Limitada
Brazil – Av. das Nações Unidas, n. 14.261, 8th floor, qd 8, Wing B, Vila Gertrudes, ZIP Code
04794-000 – São Paulo/SP

No Par Value
No Par Value
No Par Value

100/0
100/0
100/0

55.40/44.60

64.55/35.45

BOB10.00

BRL1.00

BRL2.80

BRL1.00

100/0

1
1
1

138

BRL1.00

64.55/35.45

63.90/35.10

64.55/35.45

32.28/17.72

64.55/35.45
64.55/35.45

No Par Value
No Par Value

UBI 2 – Comercio de Alimentos Limitada
Brazil – Av. das Nações Unidas, n. 14.261, 8th floor, qd 9, Wing B, Vila Gertrudes, ZIP Code
04794-000 – São Paulo/SP
UBI 4 – Comércio de Alimentos Limitada
Brazil – Rod. BR 232, s/n, km. 13 – Jaboatão dos Guararapes/PE
Unilever Brasil Gelados do Nordeste S.A.

2
3
Brazil – Av. das Nações Unidas, n. 14.261, 7th floor, Wing B, Vila Gertrudes, Zip Code 04794-
000, São Paulo/SP
Unilever Brasil Gelados Limitada
Brazil – Av. das Nações Unidas, n. 14.261, 3rd to 6th and 8th to 10th floors, Wing B Vila
Gertrudes, Zip Code 04794-000, São Paulo/SP
Unilever Brasil Limitada
5
Brazil – Av. das Nações Unidas, n. 14.261, 3rd floor, Wing A, Vila Gertrudes, ZIP Code 04794-
000, São Paulo/SP
Unilever Brasil Industrial Limitada
Brazil – Rua Hungria, n. 1400, 5th floor, room 5C, Jardim Europa, Zip Code 03178-200 São
Paulo/SP
UP1 Alimentos Limitada (50) (In Liquidation)
Brazil – Av. Marechal Floriano, 19 – Room 1001 Part – Rio de Janeiro/RJ
Veritas do Brazil Limitada (99)
Brazil – Rua Sabiá, 45, Jardim Marieta, Osasco/SP
SOLO ATS Participações do Brasil S.A
Mãe Terra Produtos Naturais Ltda.
British Virgin Islands – Pasea Estate, Road Town, Tortola
Aromatel Brands Inc.
Aromatel South Inc.
Ego Brands Inc.
Ego South Inc.
Savital Brands Inc.
Savital South Inc.
Fortident Brands Inc.
Fortident South Inc.
Bulgaria -City of Sofia, Borough Mladost, 1, Business Park, Building 3, Floor 1
Unilever Bulgaria EOOD
Cambodia – No. 443A Street 105, Sangkat Boeung Pralit, Khan 7 Makara Phnom Penh Capital
Unilever (Cambodia) Limited
Canada – 3081, 3rd Avenue, Whitehorse, Yukon Territory, Y1A 4Z7
Dermalogica Canada Limited
Canada – P.O. Box 49130, 2900 – 595 Burrard Street, Vancouver BC V7X 1J5
Dollar Shave Club Canada, Inc
Canada -195 Belfield Road, Rexdale, Toronto, Ontario M9W 1G9
Rexdale Property Inc.
55.40/44.60
Canada -800-885 West Georgia Street, Vancouver BC V6C 3H1
Seventh Generation Family & Home ULC
55.40/44.60
Canada – 1000 rue de la Gauchetière Ouest, Bureau 2500, Montreal H3B 0A2
4012208 Canada Inc.
Canada – 160 Bloor Street East, Suite 1400, Toronto ON M4W 3R2
Unilever Canada Inc.

USD1.00
USD1.00
USD1.00
USD1.00
USD1.00
USD1.00
USD1.00
USD1.00

100/0
100/0
100/0
100/0
100/0
100/0
100/0
100/0

No Par Value
BRL1.00

64.55/35.45
64.55/35.45

KHR20,000.00

No Par Value

BGN1,000.00

No Par Value

1
1
1
1
1
1
1
1

55.40/44.60

64.55/35.45

CAD0.01

100/0

0/100

1
5

64.55/35.45
64.55/35.45
0/100
64.55/35.45
64.55/35.45

No Par Value
No Par Value
No Par Value
No Par Value
No Par Value

8
9
10
11
12

55.40/44.60

No Par Value

Canada – Lawson Lundell LLP, 925 W Georgia St, Vancouver, BC V6C 3L2
Hourglass Cosmetics Canada Limited
Chile- Av. Carrascal N°3351, Quinta Normal, Santiago
Unilever Chile Limitada
Unilever Chile SCC Limitada
China – 10th floor No.398, North Cao Xi Road, Xuhui District, Shanghai
Blueair Shanghai Sales Co. Limited
1
China – 1st Floor, No. 78 Binhai 2nd Road, Hangzhou Bay, New District, Ningbo City, Zhejiang
Province
Ningbo Hengjing Inspection Technology Co., Ltd
(67.71)
China – 358, Ci Yi Road, Hangzhou Bay New Zone

64.55/35.45
64.55/35.45

CNY1.00

67.71/0

13
13

100/0

Group CompaniesAnnual Report on Form 20-F 2018Name of
Undertaking

% holding
as
between
NV /PLC

Nominal
Value

Share
Class
Note

Name of
Undertaking

% holding
as
between
NV /PLC

Nominal
Value

Share
Class
Note

100/0

0/100

100/0

67.71/0

USD1.00

CNY1.00

CNY 1.00

USD1.00

USD 1.00

RMB2,000,000

100/0
100/0

USD1.00
CNY1.00

COP100.00
COP100.00

Ningbo Qinyuan Water Equipment Co. Limited
(67.71)
China – Seaside Avenue, Cixi Econimce and Technical Development Zone (Hangzhou Bay New
Zone)
Qinyuan Group Co. Limited (67.71)
1
China – Room 23, Hall 5, No. 38, Lane 168, Xing Fu Li Road, Fenjing Town, Jinsham District,
Shanghai 201100
Shanghai Qinyuan Environment Protection
Technology Co. Limited (67.71)
China – No.33 North Fuquan Road, Shanghai, 200335
Unilever (China) Investing Company Limited
1
China -88 Jinxiu Avenue, Hefei Economic and Technology Development Zone, Hefei, 230601
1
Unilever (China) Limited
1
Unilever Services (Hefei) Co. Limited
China – No. 225 Jingyi Road, Tianjin Airport Economic Area, Tianjin
Unilever (Tianjin) Company Limited
China – 1068 Ting Wei Road, Jinshanzui Industrial Region, Jinshan District, Shanghai
Unilever Foods (China) Co. Limited
China – No. 1 Unilever Avenue, Pengshan Country, Sichuan Province 610016
Unilever (Sichuan) Company Limited
China – No.16 Wanyuan Road, Beijing E&T Development, Beijing 100076
Walls (China) Co. Limited
China – 358, Ci Yi Road, Hangzhou Bay New Zone
Zhejiang Qinyuan Water Treatment Technology
Co. Limited (67.71)
China – Unit 1A, Building B5, Zhaoshangju Guangming Science and Technology Park,
Guanguang Road, Guangming New District, Shenzhen City
Blueair Technology (Shenzen) Co. Limited
China – Room 326, Xinmao Building, No.2 South Tainana Road, Shanghai Free Trade Zone
Unilever Trading (Shanghai) Co. Ltd
China – Seaside Avenue, Cixi Economic and Technological Development Zone (Hangzhou
Bay New Zone)
Ningbo Hengjing Inspection Technology Co. Ltd
China – Floor 1, Building 2, No.33 North Fuquan Road, Shanghai, 200335
Shanghai CarverKorea Limited
Colombia – Av. El Dorado, No. 69B-45. Bogota Corporate Center Piso 7, Bogotá
Unilever Colombia SCC S.A.S.
Unilever Andina Colombia Limitada
Costa Rica – La Asunción de Belén, Planta Industrial Lizano, Autopista Bernardo Soto
Unilever de Centroamerica S.A.
1
Costa Rica – Provincia de Heredia, Cantón Belén, Distrito de la Asunción, de la intersección
Cariari- Belén, 400 Mts. Oeste, 800 Mts., al Norte
UL Costa Rica SCC S.A.
Cote D’Ivoire -01 BP 1751 Abidjan 01, Boulevard de Vridi
Unilever-Cote D’Ivoire (89.98)
Cote D’Ivoire – Abidjan-Marcory, Boulevard Valery Giscard d’Estaing, Immeuble Plein Ciel,
Business Center, 26 BP 1377, Abidjan 26
Unilever Afrique de l’Ouest
Croatia – Strojarska cesta 20, 10000 Zagreb
Unilever Hrvatska d.o.o.
Cuba – Zona Especial de Desarrollo Mariel, Provincia Artemisa
Unilever Suchel, S.A. (60)
Cyprus – Head Offices, 195C Old Road Nicosia Limassol, CY-2540 Idalion Industrial Zone –
Nicosia
Unilever Tseriotis Cyprus Limited (84)
Czech Republic – Rohanské nábřeží 670/17, Karlín, Praha 8, 186 00
Unilever ČR, spol. s r.o.
Denmark – Ørestads Boulevard 73, 2300 København S
Unilever Danmark A/S
Denmark – Petersmindevej 30, 5000 Odense C
Unilever Produktion ApS
Djibouti-Haramous, BP 169
Unilever Djibouti FZCO Limited
Dominican Republic – Ave. Winston Churchill, Torre Acrópolis Piso 17, Santo Domingo
Unilever Caribe, S.A.
Ecuador – Km 25 Vía a Daule, Guayaquil
Unilever Andina Ecuador S.A.
Egypt- Bourg El-Arab City, Alexandria1
Fine Tea Co (SAE)
Unilever Mashreq – Foods (SAE)
Egypt – 6th of October City, 4th Industrial Zone, Piece Number 68, Giza
Unilever Mashreq – Home Care (SAE)
Unilever Mashreq – Personal Care (SAE)
Egypt – 14th May Bridge, Ezbet Hegazy, Alexandria
Unilever Mashreq International Company
Egypt – Industrial Zone – 14th May Bridge, Smouha, Alexandria
Unilever Mashreq Trading LLC (60)
Egypt – Bourg El-Arab City, 1st Industrial Zone, Block 11, Piece Number 5, Alexandria
Unilever Mashreq – Tea (SAE)
1
Egypt – Flat no.4, third floor, building no. 78, Tereat Al Mariouteyya street, Faisal Al Haram,
Gizah
Unilever Mashreq for Import and Export LLC

EGP2.00
EGP20.00

EGP2.00
EGP10.00

CZK210,000.00

XOF 10,000.00

DKK1,000.00

DOP1,000.00

USD1,000.00

0/100
0/100

XOF5,000.00

DKK100.00

EGP100.00

USD20.00

EGP10.00

HRK1.00

USD1.00

CRC1.00

EUR1.00

0/89.98

100/0

0/100

100/0

0/100

60/0

0/ 84

0/60

1
1

El Salvador – Nivel 19 Edificio Torre Futura, 87 av. Norte y calle El Mirador, Colonia Escalón,
San Salvador
USD1.00
Unilever El Salvador SCC S.A. de C.V.
Unilever de Centro America S.A. de C.V
USD1.00
England and Wales – Unilever House, 100 Victoria Embankment, London, EC4Y 0DY
Accantia Group Holdings
GBP0.01
(unlimited company)
Alberto-Culver (Europe) Limited
Alberto-Culver Group Limited
Alberto-Culver UK Holdings Limited
Alberto-Culver UK Products Limited

100/0
100/0

5.61/94.39

1
1

Associated Enterprises Limited°
BBG Investments (France) Limited
Brooke Bond Assam Estates Limited
Brooke Bond Group Limited°
Brooke Bond South India Estates Limited°

CPC (UK) Pension Trust Limited
Hourglass Cosmetics UK Limited
Margarine Union (1930) Limited°

MBUK Trading Limited
Mixhold Investments Limited
Pukka Herbs Limited

T2 Tea (UK) Limited
TIGI Limited
TIGI Holdings Limited
Toni & Guy Products Limited°
UAC International Limited
UML Limited
Unidis Forty Nine Limited
Unilever Australia Investments Limited

Unilever Australia Partnership Limited

Unilever Australia Services Limited

Unilever Company for Industrial Development
Limited
Unilever Company for Regional Marketing and
Research Limited
Unilever Corporate Holdings Limited°
Unilever Employee Benefit Trustees Limited
Unilever S.K. Holdings Limited
Unilever Innovations Limited

Unilever Overseas Holdings Limited°
Unilever Superannuation Trustees Limited
Unilever U.K. Central Resources Limited
Unilever U.K. Holdings Limited°
Unilever UK & CN Holdings Limited

Unilever UK Group Limited

Unilever US Investments Limited°
United Holdings Limited°

55.40/44.60
55.40/44.60
55.40/44.60
55.40/44.60
55.40/44.60
0/100
0/100
0/100
0/100
0/100
0/100
0/100
55.40/44.60
0/100
0/100
0/100
0/100
0/100
0/100
0/100
0/100
0/100
0/100
0/100
0/100
0/100
0/100
0/100
0/100
0/100
0/100
0/100
0/100
0/100

0/100

0/100
0/100
0/100
0/100
0/100
0/100
0/100
0/100
0/100
0/100
0/100
0/100
0/100
49.86/50.14
1.67/98.33
5.61/94.39
0/100
0/100
99.67/0.33

GBP1.00
GBP1.00
GBP1.00
GBP1.00
GBP5.00
GBP1.00
GBP1.00
GBP1.00
GBP0.25
GBP1.00
GBP1.00

GBP1.00
GBP1.00
GBP1.00
GBP1.00
GBP1.00
GBP1.00
GBP1.00
GBP0.01
GBP0.01
GBP1.00
GBP1.00
GBP1.00
GBP0.001
GBP1.00
GBP1.00
GBP1.00
AUD10.00
GBP1.00
AUD10.00
GBP1.00
AUD10.00
GBP1.00

GBP1.00

GBP1.00
GBP1.00
GBP1.00
GBP0.10
GBP1.00
GBP1.00
GBP1.00
GBP1.00
GBP1.00
GBP1.00
GBP1.00
GBP10.00
GBP10.00
GBP1.00
GBP1.00
GBP1.00
GBP1.00
GBP1.00
GBP500.00

1
1
1
1
14
1
1
1
1
1
15
16
1
1
18
68
69
1
1
2
3
1
1
1
1
1
1
1
2
1
2
1
2
1

1
1
1
1
20
1
1
1
1
2
3
23
24
2
3
21
1
1
22

GBP1.00
GBP1.00
GBP1.00
GBP1.00
GBP1.00
GBP1.00

5.61/94.39
0/100
0/100
5.61/94.39
0/100
0/100

England and Wales – Unilever House, Springfield Drive, Leatherhead, KT22 7GR
Alberto-Culver Company (U.K.) Limited
TIGI International Limited
Unilever Pension Trust Limited
Unilever UK Limited
Unilever UK Pension Fund Trustees Limited
USF Nominees Limited
England and Wales – The Manser Building, Thorncroft Manor, Thorncroft Drive, Dorking,
KT22 8JB
Dermalogica (UK) Limited
England and Wales – 1st Floor, 16 Charles II Street, London, SW1Y 4QU
Unilever Ventures III Limited Partnership (86.25)
England and Wales – Union House, 182-194 Union Street, London, England, England, SE1 0LH
REN Skincare Limited
REN Limited
Murad Europe Limited
England and Wales – 1 More Place, London, SE1 2AF

GBP1.00
GBP1.00
GBP1.00

0/100
0/100
0/100

57.50/28.75

1
1
1
1
1
1

GBP1.00

0/100

1
1
1

139

Group CompaniesAnnual Report on Form 20-F 2018GROUP COMPANIES CONTINUED

Name of
Undertaking

% holding
as
between
NV /PLC

Nominal
Value

Share
Class
Note

Name of
Undertaking

% holding
as
between
NV /PLC

Nominal
Value

Share
Class
Note

0/100

100/0

100/0
100/0

0/100
0/100
5.61/94.39

Accantia Health and Beauty Limited (In
Liquidation)
Simple Toiletries Limited (In Liquidation)
Unidis Nineteen Limited (In Liquidation)
Unilever Bestfoods UK Limited (In Liquidation)
England and Wales – 5th floor, 6 St Andrew Street, London, EC4A 3AE,
Unilever Ventures Limited
Estonia – Kalmistu tee 28a, Tallinna linn, Harju maakond, 11216
Unilever Eesti AS
Ethiopia – Bole Sub City, Kebele 03/05, Lidiya Building, Addis Ababa
Unilever Manufacturing PLC
Finland – Post Box 254, 00101 Helsinki
Unilever Finland Oy
Unilever Ingman Production Oy
France – 20, rue des Deux Gares, 92500, Rueil-Malmaison
Alsa France S.A.S. (99.99)
Bestfoods France Industries S.A.S. (99.99)
Cogesal-Miko S.A.S. (99.99)
Fralib Sourcing Unit S.A.S. (99.99)
Saphir S.A.S. (99.99)
Sfejer S.A.S. (99.99)
Tigi Services France S.A.S. (99.99)
Unilever France S.A.S. (99.99)
Unilever France Holdings S.A.S. (99.99)
Unilever France HPC Industries S.A.S. (99.99)
Unilever Retail Operations France (99.99)
France – 81 Rue De Seine, 75006 Paris
Grom France S.a.r.l
France – Parc Activillage des Fontaines – Bernin 38926 Crolles Cedex
Intuiskin S.A.S.
France – ZI de la Norge – Chevigny Saint-Sauveur, 21800 Quetigny
Amora Maille Societe Industrielle S.A.S. (99.99)
Germany – Wiesenstraße 21. 40549 Düsseldorf
Dermalogica GmbH
Germany – Am Strandkai 1, 20457 Hamburg
DU Gesellschaft für Arbeitnehmerüberlassung
mbH (99.99)
Unilever Deutschland Gmbh

64.54/35.45
64.54/35.45
64.54/35.45
64.54/35.45
64.54/35.45
64.54/35.45
64.54/35.45
64.54/35.45
64.54/35.45
64.54/35.45
64.54/35.45

64.54/35.45

100/0

GBP0.25

GBP1.00
GBP1.00
GBP1.00

GBP1.00

EUR6.30

ETB1,000.00

EUR16.82
EUR1.00

No Par Value
No Par Value
No Par Value
No Par Value
EUR1.00
No Par Value
No Par Value
No Par Value
EUR1.00
EUR1.00
No Par Value

EUR10.00

EUR1.00

No Par Value

EUR25,000.00

Unilever Deutschland Holding Gmbh

64.54/35.45
64.55/35.45
64.55/35.45
64.55/35.45
64.55/35.45
64.55/35.45
64.55/35.45
64.55/35.45
64.55/35.45

64.55/35.45

64.45/35.55

66.22/33.78

63.61/36.39

64.55/35.45
96.45/3.55
100/0
64.55/35.45
64.55/35.45
64.74/35.26

66.33/33.67

64.55/35.45

Unilever Deutschland Produktions Gmbh & Co.
Ohg∞
Unilever Deutschland Produktions Verwaltungs
GmbH
Unilever Deutschland Supply Chain Services
GmbH
Unilever BCS IP Deutschland GmbH & Co. OHG∞
Unilever BCS Deutschland Immobilien Leasing
GmbH & Co. OHG∞
Dollar Shave Club GmbH
T2 Germany GmbH
Germany – Schultetusstraße 37, 17153 Stavenhagen
Maizena Grundstücksverwaltung Gmbh & Co.
Ohg∞
Pfanni Gmbh & Co. Ohg Stavenhagen∞
Rizofoor Gesellschaft mit beschränkter Haftung

Schafft GmbH

UBG Vermietungs GmbH
Unilever Deutschland Immobilien Leasing GmbH
& Co. OHG∞
Unilever Deutschland IPR GmbH & Co. OHG∞
Germany – Hertzstraße 6, 71083 Herrenberg-
Gϋlstein
TIGI Eurologistic GmbH
TIGI Haircare GmbH
Ghana -Swanmill, Kwame Nkrumah Avenue, Accra
Millers Swanzy (Ghana) Limited
Ghana – Plot No. Ind/A/3A-4, Heavy Industrial Area, Tema
Unilever Ghana Limited (66.56)
Ghana - Plot No. Ind/A/3A-4, P O Box 721, Tema
Unilever Oleo Ghana Limited
Greece – Kymis ave & 10, Seneka str. GR-145 64 Kifissia
Elais Unilever Hellas SA
Unilever Knorr SA
Unilever Logistics SA

0/100
0/100

0/100

0/66.56

0/100

100/0
100/0
100/0

140

DEM50,000.00
EUR90,000,000.00
EUR2,000,000.00
EUR1,000,000.00
EUR39,000.00
EUR18,000.00
EUR14,300.00
EUR5.200.00
EUR6,500.00

EUR179,000.00

EUR51,150.00

EUR15,350.00
EUR138,150.00
EUR63,920.00
EUR100,000.00
EUR8,090,190.00

EUR100.00
EUR25,600.00

GHC1.00

GHC0.0192

No Par Value

EUR10.00
EUR10.00
EUR10.00

100/0
100/0

EUR25,000.00
EUR1.00

1
1
1

1
1

1
1
1
1
1
1
1
1
1
1
1

1
1
1
1
1
1
1
1
1

1
1

4
1
1
1
1
1

1
1

1
1
1

0/100

100/0

HKD1.00

HUF1.00

HKD1.00

HKD0.10

HKD0.01

HNL10.00

55.40/44.60

64.55/35.45

No Par Value

Guatemala – Diagonal 6. 10-50 zona 10, Ciudad de Guatemala. Nivel 17 Torre Norte Ed.
Interamericas World Financial Center
Unilever de Centroamerica S.A.
GTQ60.00
Guatemala – 24 Avenida, Calzada Atanacio Tzul, 35-87 Zona 12 Ciudad de Guatemala
Unilever Guatemala SCC S.A.
GTQ100.00
Honduras – Anillo Periférico 600 metros después de la colonia, Residencial, Las Uvas
contigua acceso de residencial Roble Oeste, Tegucigalpa M.D.C.
Unilever de Centroamerica S.A.
Hong Kong -Suite 1106-8, 11/F, Tai Yau Building, 181 Johnston Road, Wanchai
Blueair Asia Limited
100/0
Hong Kong – 6/F Alexandra House, 18 Charter Road, Central
T2 Hong Kong
100/0
Hong Kong – 6 Dai Fu Street, Tai Po Industrial Estate, N.T.
Unilever Hong Kong Limited
Hong Kong – Suite 907, 9/F, Silvercord Tower 2, 30 Canton Road, Tsim Sha Tsui, Kowloon
Hourglass Cosmetics Hong Kong Limited
Hong Kong – Room 1808, 18/F, Tower II Admiralty Centre, 18 Harcourt Road, Admiralty
Hong Kong CarverKorea Limited
Hungary – 1138-Budapest, Váci u. 182 út 121-127.
Unilever Magyarország Kft
India – Unilever House, B. D. Sawant Marg, Chakala, Andheri (E), Mumbai 400 099
0/67.19
Daverashola Estates Private Limited (67.19)
0/67.19
Hindlever Trust Limited (67.19)
0/67.19
Hindustan Unilever Limited° (67.19)
0/67.19
Jamnagar Properties Private Limited (67.19)
0/67.19
Levers Associated Trust Limited (67.19)
0/67.19
Levindra Trust Limited (67.19)
0/67.19
Pond’s Exports Limited (67.19)
0/67.19
Unilever India Exports Limited (67.19)
0/100
Unilever Industries Private Limited°
Unilever Ventures India Advisory Private Limited
0/100
India – S-327, Greater Kailash – II, New Delhi – 110048, Delhi
Blueair India Pvt. Limited
99.99/0.01
India – 1st Floor, Shreeniwas House, H. Somani Marg, (behind Bombay Gymkhana) Fort,
Mumbai 40001
Lakme Lever Private Limited (67.19)
Indonesia – Grha Unilever, Green Office Park Kav 3, Jalan BSD Boulevard Barat, BSD City,
Tangerang, 15345
PT Unilever Indonesia Tbk (84.99)
PT Unilever Enterprises Indonesia (99.26)
PT Unilever Trading Indonesia
Indonesia – KEK Sei Mangkei, Nagori Sei Mangkei, Kecamatan Bosar Maligas, Kabupaten
Simalungun 21183, Sumatera Utara
PT Unilever Oleochemical Indonesia
Iran – No. 23, Corner of 3rd Street, Zagros Street, Argentina Square, Tehran
Unilever Iran (Private Joint Stock Company)
(99.35)
Ireland – 20 Riverwalk, National Digital Park, Citywest Business Campus Dublin 24
EUR1.26
Lipton Soft Drinks (Ireland) Limited
EUR1.26
Unilever Ireland (Holdings) Limited
Unilever Ireland Limited
EUR1.26
Isle of Man – Bridge Chambers, West Quay, Ramsey, Isle of Man, IM8 1DL
Rational International Enterprises Limited
Israel – 3 Gilboa St. Airport City, Ben Gurion Airport
Beigel & Beigel Mazon (1985) Limited
Israel – 52 Julius Simon Street, Haifa, 3296279
Bestfoods TAMI Holdings Ltd
Israel Vegetable Oil Company Ltd
Unilever Israel Foods Ltd

INR10.00
INR10.00
INR1.00
INR10.00
INR10.00
INR10.00
INR1.00
INR10.00
INR10.00
INR1.00

IDR10.00
IDR1,000.00
IDR1,003,875.00

54.86/30.13
64.07/35.19
100/0

0/100
0/100
0/100

IDR1,000,000.00

IRR1,000,000.00

12.80/87.20

INR10. 00

USD1.00

INR10.00

ILS1.00

0/67.19

99.35/0

100/0

0/100

1
1
1
1
1
1
1
1
1
1

1
1
1

25.11/74.89
25.11/74.89
25.11/74.89
25.11/74.89
25.11/74.89
25.11/74.89
0/100
25.11/74.89
25.11/74.89

ILS0.001
ILS0.0001
ILS0.10
ILS0.10
ILS0.10
ILS0.0002
ILS1.00
ILS0.0001
ILS1.00

1
1
35
79
17
25
1
1
1

0/100
0/100
0/0

ILS1.00
ILS1.00
ILS1.00

100/0

EUR1,815,800.00

51/0

EUR40,000.00

100/0

EUR40,000.00

100/0

EUR10,000.00

100/0

EUR70,000.00

100/0

EUR600,000.00

30
1
31

Unilever Israel Home and Personal Care Limited
Unilever Israel Marketing Ltd
Unilever Shefa Israel Ltd
Israel – Haharoshet 1, PO Box 2288, Akko, 2451704
Glidat Strauss Limited

Italy – Piazza Paleocapa 1/D, 10100, Torino
Gromart S.R.L.
Italy – Via Crea 10, 10095, Grugliasco
G.L.L. S.R.L. (51)
Italy – Via Roma 101, 35122, Padova
Grom-PD S.R.L.
Italy - Via Tortona 25, cap 20144 – Milano
Intuiskin S.R.L.
Italy – Piazzale Biancamano n.8, 20121, Milano
Unilever Italia Administrative Services S.R.L.
Italy – Via Paolo di Dono 3/A 00142 Roma
Unilever Italia Logistics S.R.L.

Group CompaniesAnnual Report on Form 20-F 2018Name of
Undertaking

% holding
as
between
NV /PLC

Nominal
Value

Share
Class
Note

Name of
Undertaking

Nominal
Value

Share
Class
Note

100/0

100/0
100/0
100/0

100/0
100/0
100/0
100/0
100/0

EUR10,000,000.00
EUR25,000,000.00
EUR200,000.00

JPY50,000.00
JPY50,000.00
JPY10,000.00
JPY50,000.00
JPY50,000.00

Unilever Italia Manufacturing S.R.L.
Unilever Italia Mkt Operations S.R.L.
Unilever Italy Holdings S.R.L.
Italy – Business Center Monte Napoleone, Via Monte Napoleone 8, 20121 – Milano
UPD Italia
EUR 10,000.00
Japan – 2-1-1, Kamimeguro, Meguro-ku, Tokyo 153-8578
Unilever Japan Beverage K.K.
Unilever Japan Customer Marketing K.K.
Unilever Japan Holdings K.K.
Unilever Japan K.K.
Unilever Japan Service K.K.
Jersey – 13 Castle Street, St Helier, Jersey, JE4 5UT
Unilever Chile Investments Limited
Jordan – Amman
Unilever Jordan LLC
Kazakhstan – Raimbek, Avenue 160 A, Office 401, Almaty
Unilever Kazakhstan LLP
Kenya – Head Office, Kericho-Nakuru Road, P.O. BOX 20, 20200, Kericho
Brooke Bond Mombasa Limited (98.20)
Mabroukie Tea & Coffee Estates Limited (98.20)
The Limuru Tea Company Limited (51.08)
Unilever Tea Kenya Limited (98.20)
Kenya – Commercial Street, Industrial Area, P.O. BOX 30062-00100, Nairobi
Unilever Kenya Limited°
0/100
Korea – 443 Taeheran-ro, Samsung-dong, Kangnam-gu, Seoul
100/0
Unilever Korea Chusik Hoesa
100/0

KES1.00
KES1.00
KES20.00
KES1.00

0/98.20
0/98.20
0/51.08
0/98.20

KRW10,000.00
KRW10,000.00

64.55/35.45

KES20.00

JOD10.00

GBP1.00

100/0

5
5
5

1
1
1
1
1

1
1
1
1

1
14

1
1

0/100

100/0

0/100

100/0

1
1
1
1

EUR1.00

MWK2.00

KRW500.00

100/0
100/0

LAK800,000.00

LBP1,000,000.00

0/70
0/70
0/100
0/100

EUR3,620.25
EUR3,620.25

No Par Value
No Par Value
No Par Value
No Par ValueB

Korea – 81, Tojeong 31-gil, Mapo-gu, Seoul
Carver Korea Co., Ltd
Laos – Viengvang Tower, 4th Floor, Room no. 402A, Boulichan Road, Dongpalan Thong Village,
Sisattanak District, Vientiane Capital
Unilever Services (Lao) Sole Co Limited
Latvia – Kronvalda bulvāris 3-10, Rīga, LV-1010
Unilever Baltic LLC
Lebanon – Sin El Fil, Zakher Building, Floor 4, Beirut
Unilever Levant s.a.r.l.
Lithuania – Skuodo st. 28, Mazeikiai, LT-89100
UAB Unilever Lietuva distribucija
UAB Unilever Lietuva ledu gamyba
Malawi – Room 33, Gateway Mall, Area 47, Lilongwe Malawi
Unilever South East Africa (Private) Limited
Malaysia – Level 34, Menara TM, Jalan Pantai Baru, 59200 Kuala Lumpur
Unilever (Malaysia) Holdings Sdn. Bhd. (70)
Unilever (Malaysia) Services Sdn. Bhd. (70)
Unilever Foods (Malaysia) Sdn. Bhd.
Unilever Malaysia Aviance Sdn. Bhd.
Mexico – Av. Tepalcapa No.2, Col. Rancho Santo Domingo, C.P. 54900 Tultitlán, Estado de
México
64.55/35.45
Unilever de Mexico S.de R.l. de C.V.
64.55/35.45
Unilever Holding Mexico S.de R.L. de C.V.
Unilever Manufacturera S.de R.L. de C.V.
64.55/35.45
Servicios Professionales Unilever S.de R.L. de C.V. 64.55/35.45
64.55/35.45
Unilever Mexicana S.de R.L. de C.V.
Unilever Real Estate Mexico S.de R.L. de C.V.
64.55/35.45
Unilever Servicios de Promotoria, S.de R.L. de C.V. 64.55/35.45
Morocco – Km 10, Route Cotiere, Ain Sebaa, Casablanca
Unilever Maghreb S.A. (99.98)
Mozambique – Avenida 24 de Julho, Edifício 24, nº 1097, 4º andar, Maputo
Unilever Mocambique Limitada
Myanmar – No (40,41,47), Min Thate Hti Kyaw Swar Street, 39 Ward, Shwe Pyi Thar Industrial
Zone (2), Shwe Pyi Thar Township, Yangon
Unilever (Myanmar) Limited
Myanmar – No (196), West Shwe Gone Dine 5th Street, Bahan Township, Yangon
Unilever (Myanmar) Services Limited
1
Myanmar – Lot No.28,30,31, Hlaing Thar Yar Industrial Zone (3), Hlaing Thar Yar Township,
Yangon
Unilever EAC Myanmar Company Limited (60)
Nepal – Basamadi, Hetanda – 3, Makwanpur
Unilever Nepal Limited (53.75)
Netherlands- Weena 455, 3013 AL Rotterdam
Alberto-Culver Netherlands B.V.*

60/0 MAMK1,000,000.00

MMK8,200.00

MAD100.00

NPR100.00

4
4
4
4
4
4
4

USD10.00

USD0.01

99.98/0

0/53.75

100/0

Argentina Investments B.V.*
BFO Holdings B.V.*
BFO TWO B.V.*
BrazH1 B.V.*
BrazH2 B.V.*
Brazinvest B.V.*
Brazinvestee B.V.*
Chico-invest B.V.*
Dollar Shave Club B.V.*

55.40/44.60
55.40/44.60
64.55/35.45
64.55/35.45
55.40/44.60
64.55/35.45
64.55/35.45
64.55/35.45
64.55/35.45
64.55/35.45
100/0

EUR1.00
EUR1.00
EUR454.00
EUR1.00
EUR1.00
EUR1.00
EUR1.00
EUR1.00
EUR1.00
EUR455.00
EUR1.00

2
3
1
1
1
1
1
1
1
1
1

Doma B.V.*
Handelmaatschappij Noorda B.V.°*
Unilever Foods & Refreshments Global B.V.*
Itaho B.V.*
Lipoma B.V.°*
Marga B.V.°*
Mavibel (Maatschappij voor Internationale
Beleggingen) B.V.°*
Mexinvest B.V.*
Mixhold B.V.*

Naamlooze Vennootschap Elma°*†

New Asia B.V.*
Nommexar B.V.*
Ortiz Finance B.V.*
Pabulum B.V.*
Rizofoor B.V.*
Rolf von den Baumen’s Vetsmelterij B.V.*
Rolon B.V.*
Saponia B.V.°*
ThaiB1 B.V.*
ThaiB2 B.V.*
Unilever Administration Centre B.V.*
Unilever Alser B.V.*
Unilever Berran B.V.*
Unilever Canada Investments B.V.*
Unilever Caribbean Holdings B.V.*
Unilever Corporate Holdings Nederland B.V.
Unilever Employee Benefits Management B.V.*
Unilever Employment Services B.V.*
Unilever Europe B.V.*
Unilever Europe Business Center B.V.*

Unilever Finance International B.V.°*
Unilever Foodsolutions B.V.*
Unilever Global Services B.V.*
Unilever Holdings B.V.*
Unilever Home & Personal Care Nederland B.V.*
Unilever Indonesia Holding B.V.*
Unilever Netherlands Retail Operations B.V.*
Unilever Nederland Holdings B.V.°*
Unilever Pilot B.V.
Unilever Turkey Holdings B.V.*
Unilever US Investments B.V.°*
Unilever Ventures Holdings B.V.
Unilever UK Holdings B.V.*
Unilever International Holdings B.V.*
Unilever UK Holdings N.V.˚*
Unilever International Holdings N.V.˚*
Univest Company B.V.
UNUS Holding B.V.*

% holding
as
between
NV /PLC

100/0
100/0
100/0
100/0
100/0
100/0

100/0

64.55/35.45
100/0
0/100
55.40/44.60
100/0
0.25/99.75
64.55/35.45
64.55/35.45
64.55/35.45
100/0
0/100
100/0
64.55/35.45
100/0
64.55/35.45
64.55/35.45
100/0
100/0
100/0
64.55/35.45
100/0
100/0
0/100
100/0
100/0
100/0
100/0
100/0
100/0
100/0
100/0
100/0
64.55/35.45
100/0
100/0
100/0
64.55/35.45
100/0
100/0
100/0
100/0
100/0
100/0
100/0
100/0
0/100
0/0

NLG1,000.00
NLG1,000.00
EUR453.78
EUR1.00
NLG1,000.00
EUR1.00

EUR1.00

EUR1.00
EUR1.00
EUR1.00
EUR1.00
NLG1,000.00
NLG1,000.00
EUR1.00
EUR1.00
NLG100.00
NLG1,000.00
NLG1,000.00
EUR454.00
NLG1,000.00
NLG1,000.00
NLG1,000.00
NLG1,000.00
EUR1.00
EUR1.00
EUR1.00
EUR1.00
EUR1,800.00
EUR0.01
NLG1,000.00
NLG1,000.00
EUR1.00
EUR454.00
EUR454.00
EUR1.00
EUR1.00
EUR1.00
EUR454.00
EUR100.00
EUR1.00
EUR1.00
EUR454.00
EUR1.00
EUR1.00
EUR1.00
EUR453.79
EUR1.00
EUR1.00
EUR1.00
EUR1.00
EUR1.00
EUR0.10
EUR0.10
EUR0.10
Non-voting†
NLG1,000.00
NLG1,000.00

100/0

EUR453.78

100/0
100/0

100/0
100/0
100/0

EUR1.00
EUR454.00
EUR46.00

Verenigde Zeepfabrieken B.V.*
Wemado B.V.°*
Netherlands – Nassaukade 5, 3071 JL Rotterdam
Tessa B.V.*
Unilever Nederland B.V.*
Unilever Nederland Foods Factories B.V.*
Netherlands – Reggeweg 15, 7447 AN Hellendoorn
Ben en Jerry’s Hellendoorn B.V.*
Netherlands – Deltaweg 150, 3133 KM Vlaardingen
Lever Faberge Europe-Sourcing Unit Vlaardingen
B.V.*
Netherlands – Olivier van Noortlaan 120, 3133 AT Vlaardingen
Unilever Research and Development Vlaardingen
B.V.*
Netherlands – Nassaukade 3, 3071 JL Rotterdam
Unilever Nederland Services B.V.*
Netherlands – Unilever House, 100 Victoria Embankment, London, EC4Y 0DY (Registered
Seat: Rotterdam)
Unilever Overseas Holdings B.V.*
New Zealand – Level 4, 103 Carlton Gore Rd, Newmarket, Auckland 1023
T2 NZ Limited
Unilever New Zealand Limited
Unilever New Zealand Superannuation Trustee
Limited
Unilever New Zealand Trading Limited

NZD1.00
NZD2.00

NLG1,000.00

0/100
0/100

EUR460.00

NZD1.00

100/0

0/100

1
1
1
1
1
1

1
2
3
26
1
27
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
14
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
2
3
28

1
1

1
1
1

1
1

141

Group CompaniesAnnual Report on Form 20-F 2018
GROUP COMPANIES CONTINUED

Name of
Undertaking

% holding
as
between
NV /PLC

Nominal
Value

Share
Class
Note

Name of
Undertaking

1
1

0/100

100/0

0/56.27

NIC50.00

NOK100.00

No Par Value

XOF10,000.00

0/67.90
0/51

NGN0.50
NGN1.00

Ben & Jerry’s Franchising New Zealand Limited
Nicaragua – Km 11.5, Carretera Vieja a León, 800 Mts Norte, 100 Mts Este, 300 Mts Norte,
Managua
Unilever de Centroamerica S.A.
Niger – BP 10272 Niamey
Unilever Niger S.A. (56.27)
Nigeria – 1 Billings Way, Oregun, Ikeja, Lagos
Unilever Nigeria Plc (67.90)
West Africa Popular Foods Nigeria Limited (51)
Norway – Martin Linges vei 25, Postbox 1, 1331 Fornebu
Unilever Norge AS
Pakistan – Avari Plaza, Fatima Jinnah Road, Karachi – 75530
0/100
Lever Associated Pakistan Trust (Private) Limited
0/100
Lever Chemicals (Private) Limited
Sadiq (Private) Limited
0/100
Unilever Birds Eye Foods Pakistan (Private)
Limited
Unilever Pakistan Foods Limited (76.50)
Unilever Pakistan Limited (99.23)
(71.78)
Palestine – Ersal St. Awad Center P.O.B 3801 Al-Beireh, Ramallah
Unilever Market Development Company
Panama – Punta Pacífica, Calle Isaac Hanoro Missri, P.H. Torre de las Américas, Torre C,
Oficina 32, corregimiento de San Francisco, Distrito y Provincia de Panamá
Unilever Regional Services Panama S.A.
1
Panama – Calle Isaac Honoro, Torre de las Americas, torre C, piso 32, corregimiento de San
Francisco, distrito y provincia de Panamá
Unilever de Centroamerica S.A.
Paraguay – 4544 Roque Centurión Miranda N° 1635 casi San Martin. Edificio Aymac II,
Asunción
Unilever de Paraguay S.A.
Peru – Av. Paseo de la Republica 5895 OF. 401, Miraflores, Lima 18
Unilever Andina Perú S.A.
Philippines – Linares Road, Gateway Business Park, Gen. Trias, Cavite
Metrolab Industries, Inc.

PKR10.00
PKR50.00
PKR100.00

42.38/34.12
0/99.23
0/71.78

PKR10.00
PKR10.00
PKR10.00

PYG1,000,000.00

No Par Value

PKR10.00

PEN1.00

USD1.00

1
1
14

ILS1.00

100/0

0/100

100/0

1
1
1

0/100

100/0

PHP1.00

PHP50.00

32.28/17.72

64.55/35.45

USD100.00

PHP100.00

RWF4270.00

0/100
0/100
0/100

PHP1.00
PHP10.00

64.55/35.45
64.55/35.45

PLN50.00
PLN50.00
PLN10.00

7
14
Philippines – 7th Floor, Bonifacio Stopover Corporate Center, 31st Street corner 2nd Avenue,
Bonifacio Global City, Taguig City
Unilever Philippines, Inc.
Philippines – 11th Avenue corner 39th Street, Bonifacio Triangle, Bonifacio Global City, Taguig
City
Unilever Philippines Body Care, Inc.
7
Philippines – Manggahan Light Industrial Compound, A. Rodriguez Avenue, Bo. Manggahan,
Pasig City
Unilever RFM Ice Cream, Inc. (50)
Poland – Jerozolimskie 134, 02-305, Warszawa
Unilever Polska Sp. z o.o.
Unilever Poland Services Sp. z o.o.
Unilever Polska S.A.
Puerto Rico – Professional Services Park 997, San Roberto St., Suite 7, San Juan
Unilever de Puerto Rico, Inc°
Rwanda – Nyarugenge, Nyarungenge, Umujyi wa Kigali, Rwanda, P.O. BOX 6428 Kigali
Unilever Tea Rwanda Limited
Romania – Ploiesti, 291 Republicii Avenue, Prahova County
Unilever Romania S.A. (99)
Unilever Distribution SRL
Unilever South Central Europe S.A.
Betty Ice SRL
Russia – 644031, 205, 10 let Oktyabrya, Omsk
Inmarko Trade LLC
Russia – 123022, 13, Sergeya Makeeva Street, Moscow
OOO Unilever Rus
Saudi Arabia – P.O. Box 5694, Jeddah 21432
Binzagr Unilever LimitedX (49)
Saudi Arabia – 8770 King Abudlaziz Branch Road, Ash Shati, Jeddah 23514-3261
Binzagr Unilever Distribution (73.50)
Serbia – Belgrade, Serbia, Omladinskih brigada 90b – Novi Beograd
Unilever Beograd d.o.o.
Singapore – 20E Pasir Panjang Road, #06-22 Mapletree Business City, 117439
T2 Singapore PTE Limited
Singapore – 20 Pasir Panjang Road, #06-22 Mapletree Business City, 117439
Unilever Asia Private Limited
Unilever Singapore Pte. Limited
UPD Singapore Private Limited
Slovakia – Karadzicova 10, 821 08 Bratislava
Unilever Slovensko spol. s r.o.
South Africa -15 Nollsworth Crescent, Nollsworth Park, La Lucia Ridge Office Estate,
La Lucia, 4051
Nollsworth Park Properties (Pty) Limited
Unilever Market Development (Pty) Limited
Unilever South Africa (Pty) Limited
Unilever South Africa Holdings (Pty) Limited

8.98/91.02
0/100
8.98/91.02
13.53/86.47

ROL0.10
ROL20.00
ROL260.50
RON10.00

ZAR2.00
ZAR1.00
ZAR2.00
ZAR1.00

SGD1.00
SGD1.00
SGD1.00

99/0
100/0
100/0
100/0

100/0
0/100
100/0

SAR1,000.00

11.89/88.11

SGD1.00

EUR1.00

24.50/49

1
1
1
1

100/0

0/100

100/0

1
1
1

0/49

142

% holding
as
between
NV /PLC

25.10/74.90
0/100

Nominal
Value

ZAR1.00
ZAR1.00

Share
Class
Note

100/0

ZAR1.00

EUR1.00

SEK1.00

8.98/91.02

EUR600.00

CHF100.00

100/0
100/0

EUR48.00
EUR60.00

SEK100.00
SEK100.00

CHF1,000.00
CHF100,000.00

SEK100.00
SEK100.00
SEK50.00
SEK100.00

55.40/44.60
100/0
100/0
100/0

0/100
0/100
0/100
0/100
0/100
0/100
0/100
0/100
0/100

LKR100.00
LKR10.00
LKR2.00
LKR10.00
LKR10.00
LKR10.00
LKR10.00
LKR10.00
LKR10.00

South Africa – 4 Merchant Place, CNR Fredman Drive and Rivonia Road Sandton, 2196
Aconcagua 14 Investments (RF) (Pty) Limited
(74.25)
Spain – PA / Reding, 43, Izda 1, 29016 Malaga
Intuiskin S.L.U.
Spain – C/ Tecnología 19, 08840 Viladecans
Unilever Espana S.A.
Unilever Services Espana S.A.
Spain – C/ Felipe del Río, 14 – 48940 Leioa
Unilever Foods Industrial Espana, S.L.U.
Spain – C/Condesa de Venadito 1, planta 4, 28028 Madrid
Unilever HPC Industrial Espana S.L.U.
Sri Lanka – 258 M Vincent Perera Mawatha, Colombo 14
Brooke Bond Ceylon Limited
Ceytea Limited
Lever Brothers (Exports and Marketing) Limited°
Maddema Trading Co. Limited
Premium Exports Ceylon (Pvt) Limited
R.O. Mennell & Co. (Ceylon) Limited
Unilever Ceylon Services Limited
Unilever Lipton Ceylon Limited
Unilever Sri Lanka Limited°
Sweden – Box 1056, Svetsarevägen 15, 171 22, Solna Stockholm
Alberto Culver AB
Unilever Holding AB
Unilever Produktion AB
Unilever Sverige AB
Sweden -Karlavagen 108, 115 26 Stockholm
Blueair AB
Blueair Cabin Air AB
Sweden – Karlavagen 108, 115 26, Stockholm
Jonborsten AB
Switzerland – Chemin Frank-Thomas 34, 1208 Genève
Intuiskin SARL (In Liquidation)
Switzerland – Bahnhofstrasse 19, CH 8240 Thayngen
Knorr-Nährmittel Aktiengesellschaft
Unilever Schweiz Gmbh
Switzerland – Spitalstrasse 5, 8200, Schaffhausen
Helmsman Capital AG
Unilever Supply Chain Company AG
Unilever ASCC AG
Unilever Finance International AG
Unilever Business and Marketing Support AG
Unilever Overseas Holdings AG
Unilever Schaffhausen Service AG
Unilever Swiss Holdings AG
Switzerland – Hinterbergstr. 30, CH-6312 Steinhausen
Oswald Nahrungsmittel GmbH
Switzerland – Schochenmühlestrasse 2, 6340 Baar
Unilever Reinsurance AG
Taiwan – 3F., No. 550, Sec. 4, Zhongxiao East Rd., Xinyi District, Taipei City
Unilever Taiwan Limited (99.92)
Tanzania – Plot No.4A Pugu Road, Dar Es Salaam
Distan Limited
UAC of Tanzania Limited
Uniafric Trust Tanzania Limited
Unilever Tanzania Limited
Tanzania – P.O. Box 40, Mufindi
Unilever Tea Tanzania Limited
Thailand – 161 Rama 9 Road, Huay Kwang, Bangkok 10310
Unilever Thai Holdings Limited
Unilever Thai Services Limited
Unilever Thai Trading Limited
UPD (Thailand) Co., Ltd
Trinidad & Tobago – Eastern Main Road, Champs Fleurs
Unilever Caribbean Limited (50.01)
Tunisia – Z.I. Voie Z4-2014 Mégrine Erriadh – Tunis
Unilever Tunisia S.A. (97.61)
Unilever Maghreb Export S.A. (97.59)
Tunisia – Z.I. Voie Z4, Megrine Riadh, Tunis, 2014
UTIC Distribution S.A.X (47.82)
Turkey – Saray Mahallesi Dr. Adnan Büyükdeniz Cad. No.13 34768 Ümraniye – İstanbul
Unilever Gida Sanayi ve Ticaret AŞ° (99.98)
Unilever Sanayi Ve Ticaret Türk Aş° (99.98)
Besan Besin Sanayi ve Ticaret AŞ (99.99)
Dosan Konserve Sanayi ve Ticaret AŞ (99.64)
Uganda – Plot 10/12 Nyondo Close, Industrial Area, P.O. Box 3515 Kampala
Unilever Uganda Limited
Ukraine – 04119, 27-T, Dehtyarivska Str., Kyiv

CHF1,000.00
CHF1,000.00
CHF1,000.00
CHF1,000.00
CHF1,000.00
CHF1,000.00
CHF1,000.00
CHF1,000.00

100/0
100/0
100/0
100/0
100/0
0/100
100/0
100/0

THB100.00
THB100.00
THB100.00
USD1.00

0.05/99.93
64.54/35.44
64.55/35.44
64.32/35.32

64.55/35.45
64.55/35.45
64.55/35.45
100/0

TZS20.00
TZS20.00
TZS20.00
TZS20.00

TRY0.01
TRY0.01
TRY0.01
TRY0.01

0/100
0/100
0/100
0/100

TND6.00
TND5.00

97.61/0
97.59/0

CHF800,000.00

CHF1,000.00

64.50/35.42

TWD10.00

TND10.00

UGX20.00

TZS20.00

TTD1.00

47.82/0

0/50.01

100/0

0/100

2
3

1
1

1
1
1
1
1
1
1
1
1

1
1
1
1

1
1

1
1
1
1
1
1
1
1

1
1
1
1

1
1

1
1
1
1

Group CompaniesAnnual Report on Form 20-F 2018Name of
Undertaking

% holding
as
between
NV /PLC

Nominal
Value

Share
Class
Note

Name of
Undertaking

% holding
as
between
NV /PLC

Nominal
Value

Share
Class
Note

1
1

0/49

13
13

USD1.00

USD0.01

USD1.00

50/0
0/100

AED1,000.00

100/0
100/0

1
1
1
1
7
13
7
7
1
7
13
13
13
13
1
13
1
7
13
13
1
13
1
1
13
1
13
1
7
1
34
13
7
13

AED100,000.00
AED1,000.00

No Par Value
USD1.00
No Par Value
No Par Value
USD1.00

Pallada Ukraine LLC
Unilever Ukraine LLC
United Arab Emirates – PO Box 17053, Jebel Ali, Dubai
Severn Gulf FZCOX (50)
Unilever Gulf FZE
United Arab Emirates – Easa Saleh Al Gurg Building, Karama, Office M01, P.O. Box 17055, Dubai
Unilever General Trading LLCX (49)
AED1,000.00
United Araba Emirates – Warehouse No. 1.2, Dubai Industrial Park – Seeh Shwaib 2
Unilever Home & Personal Care Products
Manufacturing LLCX (49)
United States – 700 Sylvan Avenue, Englewood Cliffs, New Jersey 07632-3201
Alberto-Culver Company
Alberto-Culver International, Inc
Alberto-Culver (P.R.), Inc
Alberto-Culver Usa, Inc
Ben & Jerry’s Franchising, Inc
Ben & Jerry’s Gift Card, LLC
Ben & Jerry’s Homemade, Inc
Bestfoods International (Holdings) Inc
Chesebrough-Pond’s Manufacturing Company
Conopco, Inc
Dermalogica, LLC
Food Service Direct Logistics, LLC
Kate Somerville Holdings, LLC
Kate Somerville Skincare LLC
Lipton Industries, Inc
Murad LLC
Pantresse, Inc
REN USA Inc
Skin Health Experts, LLC
Kensington & Sons, LLC
St. Ives Laboratories, Inc
T2 US LLC
TIGI Linea Corp
Unilever AC Canada Holding, Inc
Unilever Bestfoods (Holdings) LLC
Unilever Capital Corporation
Unilever Illinois Manufacturing, LLC
Unilever Manufacturing (US), Inc
Unilever Trumbull Holdings, Inc
Unilever Trumbull Research Services, Inc

USD0.01
USD100.00
No Par Value
USD1.00

No Par Value
USD10.00

USD120.00
No Par Value

55.40/44.60
55.40/44.60
55.40/44.60
55.40/44.60
55.40/44.60
55.40/44.60
55.40/44.60
55.40/44.60
55.40/44.60
55.40/44.60
55.40/44.60
55.40/44.60
55.40/44.60
55.40/44.60
55.40/44.60
55.40/44.60
55.40/44.60
0/100
55.40/44.60
55.40/44.60
55.40/44.60
55.40/44.60
55.40/44.60
55.40/44.60
25.10/74.90
55.40/44.60
55.40/44.60
55.40/44.60
42.54/57.46
55.40/44.60
55.40/44.60
55.40/44.60
55.40/44.60
55.40/44.60

13
13
13
13
13
13

No Par Value
USD.001
USD.001

Unilever United States Foundation, Inc
Unilever United States, Inc
Unilever Ventures Advisory LLC
United States – 125 S Clark, Suite 2000, Chicago, IL 60603
Blueair Inc.
United States – 233 Bleecker Street, New York, 10014
100/0
Carapina LLC
100/0
Grom Columbus LLC
100/0
Grom Malibu LLC
100/0
Grom USA LLC
100/0
Hollywood LLC
Spatula LLC
100/0
United States – 60 Lake Street, Suite 3N, Burlington, VT 05401
55.40/44.60
Seventh Generation Canada, Inc.
55.40/44.60
Seventh Generation, Inc.
Seventh Generation Ventures, Inc.
55.40/44.60
United States – 13335 Maxella Ave. Marina del Rey, CA 90292
55.40/44.60
Dollar Shave Club, Inc.
Personal Care Marketing & Research Inc
55.40/44.60
United States – 2711 Centerville Road, Suite 400, Wilmington, Delaware
Grom Franchising LLC
United States – 55 East 59th Street, New York, 10022
Intuiskin Inc
100/0
United States – CTC 1209 Orange Street Wilmington, DE19801
Living Proof, Inc.
55.40/44.60
United States – 1241 Electric Avenue, Venice CA 90291
Kingdom Animalia, LLC
13
United States – 2711 Centreville Road, Suite 400, Wilmington, New Castle County, Delaware
19808
Pukka Herbs Inc
United States – 251 Little Falls Drive, Wilmington, DE, New Castle 19808
Cocotier, Inc
United States – 11 Ranick Drive South, Amityville, NY 11701
BC Cadence Holdings, Inc
Sundial Brands LLC
Madam C.J. Walker Enterprises, LLC
Nyakio LLC
Uruguay – Camino Carrasco 5975, Montevideu
Unilever Uruguay SCC S.A.

55.40/44.60
55.40/44.60
55.40/44.60
55.40/44.60

USD0.01
No Par Value

USD.001
USD 1.00

USD1.00
USD1.00
USD1.00
USD1.00

No Par Value

7
66
13
13

USD0.3333

55.40/44.60

USD 0.001

USD0.001

UYU1.00

USD0.01

100/0

13
7

100/0

0/100

7
7
7

UYP0.10
UYP1.00
UYU1.00

100/0
64.55/35.45
100 /0

1
Lever S.A.
1
Arisco Productos Alimenticios Uruguay S.A.
Unilever del Uruguay S.R.L.
1
Venezuela -Edificio Torre Corp Banca, Piso 15, entre Avenidas Blandín y Los Chaguaramos,
Urbanización La Castellana, Caracas
Unilever Andina Venezuela S.A.
Vietnam – Lot A2-3, Tay Bac Cu Chi Industry Zone, Tan An Hoi Ward, Cu Chi District, Ho Chi Minh City
13
Unilever Vietnam International Company Limited
Zambia – Stand 2375, Corner Addis Ababa Drive & Great East Road, Show Grounds, Lusaka
34
Unilever South East Africa Zambia Limited
1

ZMK2.00
ZMK2.00

0/100
0/100

VEB1,000.00

100/0

35
36
2
37
14
1

100/0

0/100

100/0

BRL1.00

GBP1.00

USD1.00

ZWD2.00

BGN 50.00

64.55/35.45

BGN 100.00

67.39/0
99.47/0
0/97.67
0/45.25
0/96.67
0/100

GBP0.001
GBP1.00
GBP0.01
GBP0.01
GBP0.01
GBP1.00

Zimbabwe – 2 Stirling Road, Workington, Harare
Unilever – Zimbabwe (Pvt) Limited∆
SUBSIDIARY UNDERTAKINGS NOT INCLUDED IN THE CONSOLIDATION
Brazil- Pouso Alegre, Minas Gerais, Brazil Av, Prefeito Olavo Gomes, 3701, Suite Repensar,
Jardim Mariosa, 37550-000
UBI 3 Participacoes Ltda
Bulgaria – 3 Ulitsa Na Uslugite ST, 5000 Veliko Tarnovo
Sladoledena Fabrika EOOD
Bulgaria – Ilyu Voyvoda No. 10, Veliko Tarnovo district, 5000 Veliko Tarnovo
Slimfood EOOD
Ecuador – Km 25 Vía a Daule, Guayaquil
Visanuasa S.A.
England and Wales – 5th Floor, 6 St Andrew Street, London, EC4A 3AE
Big Sync Music Limited∆◊ (67.39)
(99.47)
Catexel Limited∆◊ (97.67)
(45.25)
(96.67)
Unilever Ventures General Partner Limited◊
England and Wales – 100 Victoria Embankment, Blackfriars, London, EC4Y 0DY
0/100
Dollar Shave Club Limited
England and Wales – 1 More London Place, London, SE1 2AF
Unidis Twenty Six Limited (In Liquidation)
0/100
Lever Brothers Port Sunlight Limited
(in liquidation)
Greece – Kymis ave & 10, Seneka str. GR-145 64 Kifissia
Lipoma Management Consulting SA
Haiti – Port-au-Prince
Unilever Haiti S.A.
India – Unilever House, B. D. Sawant Marg, Chakala, Andheri (E), Mumbai 400 099
Bhavishya Alliance Child Nutrition Initiatives
(67.19)
Hindustan Unilever Foundation (67.21)
Israel – Park Zvaim Industrial Area, Beit Shean / Correspondance: P.O.B. 787, Beit Shean,
1090000
PCMR International Limited
Iran – No.32, Mokhberb Blvd, Ashrafi Esfashani Exo,.Tehran, Iran Postal Code: 1476785475
Golestan Co. (50.66)
Italy – Via Plava, 74 10135 Torino
Equilibra S.R.L.
Jamaica – White Marl Street, Spanish Town, PO Box 809, Parish Saint Catherine
Unilever Jamaica Limited
Kenya – Commercial Street, P.O. BOX 40592-00100, Nairobi
Union East African Trust Limited*
Moldova – 6A Uzinelor Street, Kishinev, MD -2023
Betty Ice Moldova
Morocco – Km 10, Route Cotiere, Ain Sebaa, Casablanca
Societe Commerciale du Rif
Societe Tangeroise de Parfumerie et d’Hygiene
S.A.R.L.
Netherlands – Weena 455, 3013 AL Rotterdam
Unilever International Holding B.V.*
Unilever Insurances N.V.
Netherlands – Jagerskade 17,3552 TL Utrecht
De Korte Weg B.V.

EUR1.00
EUR454.00

100/0 MDL 7,809,036.00

100/0
100/0

HTG500,000

55.40/44.60

MAD50.00

EUR10.00

KES20.00

INR10.00

JMD1.00

EUR 7.80

GBP1.00

NIS0.10

0/67.19

50.66/0

0/67.21

100/0

0/100

1
1

100/0
100/0

EUR1.00
EUR1.00

1
26

0/100

67.39/0

GBP1.00

Scotland – 15 Atholl Crescent, Edinburgh, EH3 8HA
Unilever Ventures (SLP) General Partner Limited
Singapore – 50 Raffles Place #06-00 Singapore Land Tower, Singapore 048623
Big Sync Music Pte. Limited◊ (67.39)
Sudan – Kafoury, Area (4), Industrial Zone, Khartoum
Unilever Sudanese Investment Company
0/100
United States – 13335 Maxella Ave. Marina del Rey, CA 90292
DSC Distribution, Inc.
55.40/44.60
United States – 233 Bleecker Street, New York, 10014
Grom WTC LLC
Grom Century City LLC
United States – Harvard Business Services, Inc. 16192 Coastal Highway, Lewes DE, USA
Big Sync Music Inc. ◊ (67.39)

100/0
100/0

SDF10.00

USD1.00

USD0.01

67.39/0

13
13

143

Group CompaniesAnnual Report on Form 20-F 2018GROUP COMPANIES CONTINUED

Name of
Undertaking

% holding
as
between
NV /PLC

Nominal
Value

Share
Class
Note

Name of
Undertaking

% holding
as
between
NV /PLC

Nominal
Value

Share
Class
Note

0/49

0/55

100/0

39
1

1
57

0/49.53

46.30/0

BRL1.00

BRL 1.00

EUR1.71

GBP0.01

BHD50.00

25.82/14.18

35
40
41
42

No Par Value

GBP0.01
GBP0.01

GBP0.001
GBP0.001

GBP0.00001
GBP0.00001

5.98/0
74.60/0
25.19/0
5.78/0

GBP0.001
GBP0.001
GBP0.001
GBP0.001

ASSOCIATED UNDERTAKINGS
Australia – 1-3 Newton Street, Cremorne, VIC 3121
SNDR PTY LTD∆◊
Australia – 3 Moss Place, North Melbourne, Victoria 3051
Group 14 Holdings Limited
Bahrain – 161, Road 328, Block 358, Zinj, Manama
Unilever Bahrain Co. W.L.L. (49)
0/49
Brazil – Rod. Dom Gabriel Paulino Bueno Couto, km. 66 – Part
ITB Ice Tea do Brazil Limitada (50)
5
32.28/17.72
Brazil – Avenue Engenheiro Luiz Carlos Berrini, 105, 16º andar, Ed. Berrini One, Itaim Bibi,
CEP 0471/001-00, City of São Paulo, State of São Paulo
Gallo Brasil Distribuição e comércio Limitada (55)
Canada – Suite 300-171 West Esplanade, North Vancouver, British Columbia Canada V7M 3K9
A&W Root Beer Beverages Canada Inc. (40)
Cyprus – 2 Marcou Dracou str., Engomi Industrial Estate, 2409 Nicosia
Unilever PMT Limited∆ (49)
3
England and Wales – Chesterford Research Park, Little Chesterford, Saffron, Waldon CB10 1XL
1
0/24.22
Arecor Limited∆◊ (24.22)
(36.23)
35
0/36.23
England and Wales – 10 Bloomsbury Way, London, WC1A 2SL
30.67/0
Blis Media Limited∆◊ (30.67)
(0.20)
0.20/0
England and Wales – 81 Farringdon Street, London, EC4A 4BL
6.97/0
Blow Limited◊ (6.97)
(49.77)
49.77/0
England and Wales – First Floor, 59-61 High Street West, Glossop SK13 8AZ
CDDM Technology Limited∆◊ (49.53)
England and Wales – 2nd Floor, 17 Waterloo Place, London, SW1Y 4AR
Langholm Capital II L.P.
England and Wales – Unit 1.8 & 1.9 The Shepherds Building, Charecroft Way, London,
England, W14 0EE
SCA Investments Limited∆◊ (5.98)
(74.60)
(25.19)
(5.78)
England and Wales – 167 Wimbledon Park Road, London SW18 5RH
THENUDECO LIMITEDΔ◊ (38.95)
England and Wales – Cambridge House, 16 High Street, Saffron Walden, Essex CB10 1AX
Trinny London LimitedΔ◊ (59.43)
(35.82)
England and Wales – 5th Floor, 6 St Andrew Street, London EC4A 3AE
Voltea LimitedΔ◊ (35.58)
(66.83)
(12.44)
(18.14)
(3.56)
England and Wales – Chiswick Green, 610 Chiswick High Road, London W4 5RU
Brand Evanglist for Beauty Limited Δ◊
England and Wales – 127 North Milton Park, Abingdon, Oxfordshire OX14 4SA
12.89/0
P2i Limited∆◊ (12.89)
5.47/0
(5.47)
5.47/0
(5.47)
(50)
50/0
England and Wales – 1-2 Hatfields, London, England, SE1 9PG
1
9.69/0
Limitless Technology Limited∆◊ (9.69)
35
28.88/0
(28.88)
England and Wales – Studio 311, Record Hall, 16-16a Baldwin's Gardens, London, EC1N 7RJ
Clean Beauty Co Ltd∆◊ (38.75)
22
England and Wales – 170 Finchley Road, London, NW3 6BP
GALLINEE LTD∆◊ (85.11)
France – 7 rue Armand Peugeot, 92500 Rueil-Malmaison
Relais D’or Centrale S.A.S. (49.99)
Germany – Beerbachstraße 19, 91183 Abenberg
Hans Henglein & Sohn GmbH (50)
Henglein & Co. Handels-und Beteiligungs GmbH
& Co. KG◊ (50)
Henglein Geschäftsführungs GmbH◊ (50)
Nürnberger Kloßteig NK GmbH & Co. KG◊ (50)
Germany – Bad Bribaer Straße, 06647 Klosterhäseler
Henglein GmbH◊ (50)
Germany – Beerbachstruße 37, 17153 Stavenhagen
Hochreiter Frischteigwaren GmbH (50)
Indonesia - Wisma Bango Lt.05, Jl.Sulaiman No.32 Sukabumi Utara Kec. Kebon Jeruk,
Jakarta Barat 11540
PT Anugrah Mutu Bersama (40)
India – Plot No B-9-10 - Near Huda Market, Sector 32, Gurugram, Gurgaon HR 122001
AAIDEA Solutions Private Limited∆◊ (1.08)

EUR0.10
EUR0.10
EUR0.10
EUR0.10
EUR0.10

GBP0.0001
GBP0.0001
GBP0.0001
GBP1.00

0/35.58
0/66.83
0/12.44
0/18.14
0/3.56

GBP0.001
GBP0.001

GBP0.01
GBP0.01

59.43/0
35.82/0

IDR1,000,000.00

DEM250,000.00

EUR100,000.00

35
44
46
52
50

DEM 50,000.00

No Par Value

32/18
32/18

1
44
46
80

32.27/17.72

32.78/17.22

26.22/13.78

GBP0.0001

GBP0.001

GBP1.00

GBP0.01

38.95/0

85.11/0

38.75/0

43
77

100/0

32/18

1
4

(5.72)
(8.19)
India – 7th Floor, 703/704, Marathon Icon, Off Ganpatrao Kadam Marg, Vir Santaji Marg,
Lower Parel, Mumbai-400013

1.08/0
100/0
5.72/0
8.19/0

INR100.00
INR100.00
INR100.00
INR100.00

75
72
73
74

144

63
70

48.15/0
16.67/0

Peel-Works Private Limited∆◊ (48.15)
INR30.00
INR30.00
(16.67)
India – 403 Valentina, Hiranandani Estate Thane, Thane West, 400607, Maharashtra
Pureplay Skin Sciences (India) Private Limited
(0.10)
(100)
India – 135 Hubtown Solaris, N.S. Phadke Marg, Andheri East-West Flyover Junction, Andheri
(East) Mumbai 400069
O(1) India Private Limited (dba Shop101) (0.001)
(29.15)
Ireland – 70 Sir John Rogersons Quay, Dublin 2
Pepsi Lipton International Limited∆

INR10.00
INR100.00

0.001/0
29.15/0

INR100.00

0.10/0

75
76

100/0

100/0
100/0
100/0
100/0

EUR1.00
EUR1.00
EUR1.00
EUR1.00

52
53
54
55

1
5

0/55

0/49

34/0

29
29

40.47/0

98.57/0

99.74/0

ILS1.00

EUR1.00

USD0.01

OMR10.00

EUR27,500

JPY50,000.00

0/54
0/55
0/55

PHP1.00
PHP10.00

EUR4,125,000
EUR550,000

EUR27,000
EUR14,462,336.00
EUR275.00

64.55/35.45
64.55/35.45
22.66/12.44
64.55/35.45
29.30/16.1

PHP1.00
PHP1.00
PHP1.00
PHP10,000.00
PHP1.00

Israel – Kochav Yokneam Building, 4th Floor, P.O. Box 14, Yokneam Illit 20692
IB Ventures Limited∆ (99.74)
Japan – #308, 5–4–1, Minami Azabu, Tokyo
Grom Japan K.K◊ (34)
Luxembourg – 5 Heienhaff, L-1736 Senningerberg
Helpling Group Holding S.à r.l.∆◊ (98.57)
Mauritius – c/o Apex Fund Services (Mauritius) Ltd, 4th Floor, 19 Bank Street, Cyber City,
Ebene 72201
Capvent Asia Consumer Fund Limited∆ (40.47)
Oman – Po Box 1711, Ruwi, Postal code 112
Towell Unilever LLC (49)
Philippines – 11th Avenue corner 39th Street, Bonifacio Triangle, Bonifacio Global City, Taguig
City, M.M
Sto Tomas Paco Land Corp∆◊
Paco Platform 7.5 Inc.∆◊
Cavite Horizons Land, Inc.◊ (35.10)

7
7
7
14
Industrial Realties, Inc.◊ (45.40)
7
Philippines – Manggahan Light Industrial Compound, A. Rodriguez Avenue, Bo. Manggahan,
Pasig City
64.55/35.45
WS Holdings Inc.∆◊
Selecta Walls Land Corp∆◊
64.55/35.45
Portugal – Largo Monterroio Mascarenhas, 1,1099–081 Lisboa
0/55
Fima Ola – Produtos Alimentares, S.A. (55)
Gallo Worldwide, Limitada(55)
0/55
Grop – Gelado Retail Operation Portugal,
Unipessoal, LDA (55)
Transportadora Central do Infante, Limitada (54)
Unilever Fima, Limitada (55)
Victor Guedes – Industria e Comercio, S.A. (55)
Sweden – No 18 Office & Lounge, Briger Jarlsgatan 18,114 34 Stockholm
SachaJuan Haircare AB∆◊ (76.51)
United Arab Emirates – P.O. Box 49, Dubai
Al Gurg Unilever LLC (49)
United Arab Emirates – Po Box 49, Abu Dhabi
Thani Murshid Unilever LLC (49)
United States -1679 South Dupont Highway, Suite 100, Dover, Kent County, Delaware 19901
Beauty Bakerie Cosmetics Brand Inc∆◊ (64.69)
United States – 2600 Tenth St #101, Berkeley CA 94710
7
Machine Vantage◊ (9.86)
58
(49.93)
United States – c/o Law Traders Inc., 300 Delaware Ave., Suite 210, in the City of Wilmington,
County of New Castle
Quantbiome Inc. (dba Thryve)∆◊ (23.26)
59
United States – C/O National Registered Agents, Inc.160 Green Tree Drive, Suite 101, Dover,
Delaware 19904
Discuss.io Inc∆◊ (8.76)
(15.36)
(56.59)
United States – 700 Sylvan Avenue, Englewood Cliffs, New Jersey 07632-3201
Pepsi Lipton Tea Partnership (50)
United States – 548 Market St #70998, San Francisco, CA 94104-5401
Physic Ventures L.P.◊ (57.27)
United States – 1170 Olinder Court, San Jose, CA 95122
Sunbasket Inc∆◊ (2.93)
(89.03)
(1.92)
United States – 251 Little Falls Drive, Wilmington, Delaware, New Castle 19808
Nutraceutical Wellness Inc (dba Nutrafol)∆◊
(41.70)
(56.82)
True Botanicals, Inc∆◊ (37.17)
(12.27)
(25.59)
United – States 850 New Burton Road, in the City of Dover, County of Kent, Delovare, USA
Volition Beauty Inc∆◊ (66.44)

USD0.0001
USD0.0001
USD0.0001
USD0.0001

USD0.0001
USD0.0001
USD0.0001

8.76/0
15.36/0
43.64/12.95

USD0.0001
USD0.0001
USD0.0001

56.82/0
37.17/0
12.27/0
0/25.59

2.93/0
89.03/0
1.92/0

9.86/0
49.93/0

AED1,000.00

51
81
82
83

USD0.00001

27.70/22.30

USD0.0001

USD0.001

SEK1.00

7
55
58

7
60
61

76.51/0

64.69/0

57.27/0

23.26/0

41.70/0

66.44/0

1
5
1

0/49

Group CompaniesAnnual Report on Form 20-F 2018Notes:

1: Ordinary, 2: Ordinary-A, 3: Ordinary-B, 4: Partnership, 5: Quotas, 6: Class- A Common, 7: Common, 8: Class A, 9: Class B, 10: Class C, 11: Class II Common,
12: Class III Common, 13: Membership Interest, 14: Preference, 15: Redeemable Preference, 16: Limited by Guarantee, 17: C Ordinary Shares, 18: Viscountcy, 19:
Redeemable Golden Share, 20: Deferred, 21: Ordinary-C, 22: Preferred, 23: Redeemable Preference Class A, 24: Redeemable Preference Class B, 25: Special, 26:
Cumulative Preference, 27: 5% Cumulative Preference, 28: Non-Voting Ordinary B, 29: Common B, 30:Management, 31: Dormant, 32: A, 33: B, 34: Cumulative
Redeemable Preference, 35: A-Ordinary, 36: Preferred Ordinary, 37: Ordinary-G, 38: Class Common-B, 39: Series A Participating Preference, 40: H-Ordinary, 41:
I-Ordinary, 42: J-Ordinary, 43: Series A Preferred Convertible, 44: A Preferred, 45: A1 Preferred, 46: B Preferred, 47: Series 2 Preferred, 48: Series 3 Preferred,
49:Series A2 Convertible Redeemable Preference, 50: D Preferred, 51: Series A-3 Preferred, 52: C Preferred, 53:E Ordinary, 54: G Preferred, 55: Series Seed, 56:
Nominal, 57: Preferred A, 58: Series A Preferred, 59: Series Seed-2 Preferred, 60: Series C-2, 61: Series D, 62: Series A1 Preferred, 63: Series B-2 Preference,
64: Class A Interests, 65: Class B Interests, 66. Ownership Units, 67. Seed B CCPS, 68. Office Holders, 69. Security, 70. Series B-3 Preference, 71. Series B
Preferred, 72. Series Seed B CPPS, 73. Series A CPPS, 74. Series A2 CPPS, 75. Equity, 76. Series B CPPS, 77. Series B Preferred Convertible, 78. Class A Ordinary
Redeemable Non Voting Ordinary, 79. B Ordinary Shares, 80. N Preferred, 81. A-1 Com, 82. A-2 Com, 83. A-3 Com.
Indicates an undertaking for which Unilever N.V. has issued a declaration of assumption of liability in accordance with Article 2:403 of the Dutch Civil Code.
Indicates an undertaking directly held by N.V. or PLC. All other undertakings are indirectly held. In the case of Hindustan Unilever Limited 51.48% is directly held and
the remainder of 15.70% is indirectly held. In the case of Unilever Kenya Limited 39.13% is directly held and the remainder of 60.87% is indirectly held. In the case of
Unilever Sri Lanka Limited 5.49% is directly held and the remainder of 94.51% is indirectly held. In the case of Mixhold B.V. 27.71% is directly held and the remainder
of 72.29% is indirectly held. In the cases of each of Unilever Gida Sarayi ve Ticaret A.Ş. and Unilever Sarayi ve Ticaret Turk A.Ş. a fractional amount is directly held and
the remainder is indirectly held. In the case of United Holdings Limited, the ordinary shares are directly held and the preferred shares are indirectly held. In the case of
Mixhold N.V., 55.37% of the ordinary – A shares are directly held, the remainder of 44.63% are indirectly held and the other share classes are indirectly held. In the case
of Naamlooze Vernootschap Elma the ordinary shares are directly held and the cumulative preference shares are indirectly held.

*
o

† Shares the undertaking holds in itself.
∆ Denotes an undertaking where other classes of shares are held by a third party.
X

Unilever Trading LLC, Binzagr Unilever Limited, Unilever Home and Personal Care Products Manufacturing LLC and UTIC Distribution S.A. are subsidiary
undertakings pursuant to section 1162(2)(b) Companies Act 2006. Servern Gulf FZCO is a subsidiary undertaking pursuant to section 1162(4)(a) Companies Act
2006. The Unilever Group is entitled to 50% of the profits made by Binzagr Unilever Limited. The Unilever Group is entitled to 80% of the profits made by Unilever
Trading LLC, Unilever Home and Personal Care Products Manufacturing LLC and Unilever General Trading LLC.

◊ Accounted for as non-current investments within non-current financial assets.
∞ Exemption pursuant to Section 264b German Commercial Code.

Further to the above disclosures (1) due to the unified board of Unilever N.V. and Unilever PLC, Unilever N.V. and Unilever PLC are each considered to be
a subsidiary undertaking of the other in accordance with section 1162 (4) (b) of the Companies Act 2006 and (2) details of holdings of subsidiary undertakings
in the share capitals of Unilever N.V. and Unilever PLC are given under the heading Our Shares on pages 38 to 40.
In addition, we have revenues either from our own operations or otherwise in the following locations: Afghanistan, Albania, Andorra, Angola, Antigua, Armenia,
Azerbaijan, Bahamas, Barbados, Belarus, Belize, Benin, Bhutan, Bosnia and Herzegovina, Botswana, Brunei Darussalam, Burkina Faso, Burundi, Cameroon,
Cape Verde, Central African Republic, Chad, Comoros, Congo, Democratic Republic of Congo, Dominica, Equatorial Guinea, Eritrea, Fiji, Gabon, Gambia, Georgia,
Grenada, Guinea, Guinea-Bissau, Guyana, Iceland, Iraq, Kiribati, Kuwait, Kyrgyzstan, Lesotho, Liberia, Libya, Liechtenstein, Luxembourg, Macedonia, Madagascar,
Maldives, Mali, Malta, Marshall Islands, Martinique, Mauritania, Mauritius, Micronesia (Federated States of), Monaco, Mongolia, Montenegro, Namibia, Nauru,
Palau, Papua New Guinea, Qatar, Saint Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines, Samoa, San Marino, Senegal, Seychelles, Sierra Leone,
Slovenia, Solomon Islands, Somalia, South Sudan, Sudan, Suriname, Swaziland, Syrian Arab Republic, Tajikistan, Timor Leste, Togo, Tonga, Turkmenistan, Tuvalu,
Uzbekistan, Vanuatu and Yemen.
The Group has established branches in Argentina, Azerbaijan, Cote d'Ivoire, Cuba, the Dominican Republic, Kazakhstan, Moldova, the Netherlands, the Philippines,
Rwanda, Saudi Arabia, Slovenia, Turkey and United Kingdom.

145

Group CompaniesAnnual Report on Form 20-F 2018

SHAREHOLDER INFORMATION
FINANCIAL CALENDAR

ANNUAL GENERAL MEETINGS

PLC

Date

Voting Record date

1 May 2019

2 May 2019

3 April 2019

–

Voting and
Registration date

24 April 2019

30 April 2019

QUARTERLY DIVIDENDS
Dates listed below are applicable to all four Unilever listings (NV ordinary shares, PLC ordinary shares, NV New York shares, and PLC ADRs).

Quarterly dividend announced
with the Q4 2018 results

Quarterly dividend announced
with the Q1 2019 results

Quarterly dividend announced
with the Q2 2019 results

Quarterly dividend announced
with the Q3 2019 results

Announcement date

Ex-dividend date

Record date

Payment date

31 January 2019

14 February 2019

15 February 2019

20 March 2019

18 April 2019

2 May 2019

3 May 2019

5 June 2019

25 July 2019

8 August 2019

9 August 2019

11 September 2019

17 October 2019

31 October 2019

1 November 2019

4 December 2019

WEBSITE
Shareholders are encouraged to visit our website which has a wealth
of information about Unilever.

There is a section on our website designed specifically for investors.
It includes detailed coverage of the Unilever share price, our quarterly
and annual results, performance charts, financial news and investor
relations speeches and presentations. It also includes details of the
2018 Share Buyback programme and conference and investor/analyst
presentations.

You can also view the Unilever Annual Report and Accounts 2018 (and
the Additional Information for US Listing Purposes) on our website,
and those for prior years.

www.unilever.com

www.unilever.com/investorrelations

www.unilever.com/investor-relations/annual-report-and-accounts/

PUBLICATIONS
Copies of the Unilever Annual Report and Accounts 2018 (and the
Additional Information for US Listing Purposes) and the Annual Report
on Form 20-F 2018 can be accessed directly or ordered via the website.

www.unilever.com/investorrelations

UNILEVER ANNUAL REPORT AND ACCOUNTS 2018
The Unilever Annual Report and Accounts 2018 (and the Additional
Information for US Listing Purposes) forms the basis for the Annual
Report on Form 20-F that is filed with the United States Securities
and Exchange Commission, which is also available free of charge
from their website.

www.sec.gov

QUARTERLY RESULTS ANNOUNCEMENTS
Are in English with figures in euros.

CONTACT DETAILS
Unilever N.V. and Unilever PLC
100 Victoria Embankment
London EC4Y 0DY
United Kingdom
Institutional Investors telephone +44 (0)20 7822 6830
Any queries can also be sent to us electronically via
Contact Us
Private Shareholders telephone +44 (0)20 7822 5500
Private Shareholders can email us at
shareholder.services@unilever.com

SHARE REGISTRATION

THE NETHERLANDS
SGG Financial Services B.V.
Hoogoorddreef 15
1101 BA Amsterdam
Telephone
Telefax
Website
Email

+31 (0)20 522 25 10
+31 (0)20 522 25 00
www.sgggroup.com
registerunilever@sgggroup.com

UK
Computershare Investor Services PLC
The Pavilions
Bridgwater Road
Bristol BS99 6ZZ
Telephone
Telefax
Website
FAQ and Contact Form

+44 (0)370 600 3977
+44 (0)370 703 6101
www.investorcentre.co.uk
computershare.co.uk/contactus

US
American Stock Transfer & Trust Company
Operations Center
6201 15th Avenue
Brooklyn, NY 11219
Toll-free number
Direct dial
Email

+1 866 249 2593
+1 718 921 8124
db@astfinancial.com

146

Shareholder InformationAnnual Report on Form 20-F 2018
INDEX

Accounting policies ...................................................79-82, 130-131, 135
Acquisitions ..................................................................................122-124
Americas, The .......................................................................84, 86, 98-99
Annual General Meetings .................................................................... 146
Asia/AMET/RUB ......................................................................... 84, 86, 99
Associates ..........................................................83-84, 101-102, 126, 144
Audit Committee ...........................................................................3, 43-45
Auditors .................................................................................20, 44, 66-74
Balance sheet ................................................... 22, 77, 129, 134, 160-161
Beauty & Personal Care ........................ 6, 11, 21, 24, 26, 82-83, 164-165
Biographies .......................................................................................... 3, 5
Board committees ......................................................................36, 43-65
Boards ...........................................................................................3, 36-51
Bonds and other loans ........................................................................ 109
Brands .......................................................... 10-18, 23, 122-123, 164, 166
Capital expenditure ........................................................ 22, 100-101, 166
Cash ....................................................... 22, 25, 77-78, 116-117, 157, 166
Cash flow statement ..................................................................... 78, 162
Cautionary statement /safe harbour ........................... Inside back cover
Chairman ............................................................................................. 2-3
Chief Executive Officer ....................................................... 4-5, 36, 50-65
Commitments ..................................................23, 100, 120-122, 133, 137
Company accounts ........................................................................128-137
Compensation Committee ...........................................................3, 50-65
Comprehensive income .................................................. 75, 128, 158-159
Connected 4 Growth .............................................................................. 16
Constant underlying earnings per share ...................................... 25, 165
Contingent liabilities .................................................... 120-122, 133, 137
Corporate governance ......................................................................36-49
Corporate responsibility ...................................................................46-48
Corporate Responsibility Committee ..............................................46-48
Deferred tax ............................................................................95, 130, 132
Depreciation ...................................................................... 83, 85, 100-101
Directors’ responsibilities ..................................................................... 66
Directors’ remuneration ...................................................................50-65
Disposals .......................................................................... 20-25, 122-124
Diversity ........................................................................................... 16, 19
Dividends ..........................................................................18, 97, 146, 151
Divisions .................................................................... 11-12, 21, 24, 83, 99
Earnings per share ............................................... 18, 20, 75, 96, 157, 163
Employees ............................................................. 16, 31, 40, 86, 133, 150
Equalisation Agreement ......................................... 36, 105, 133, 151-152
Equity ...................................................................76-77, 96, 105-107, 134
Europe ........................................................................................ 84, 86, 99
Exchange rates ........................................................................ 23, 79, 112
Executive Directors ......................................................... 3, 50-65, 86, 150
Finance and liquidity ...................................................... 22, 100-115, 165
Finance costs and finance income ........................................................ 93
Financial assets ......................................................................77, 116-117
Financial calendar ............................................................................... 146
Financial instruments .................................................... 80, 104-120, 166
Financial liabilities .......................................................................104-109
Financial review ................................................................ 20-26, 163-166
Foods & Refreshment ........................... 6, 11, 21, 24, 26, 82-83, 164-165
Free cash flow ....................................................................18, 22, 25, 166
Geographies ........................................................................................... 84
Goodwill ....................................................................................97-99, 130
Gross profit ............................................................................................ 85
Group companies ..........................................................................138-145

Home Care .....................................................6, 12, 21, 24, 26, 82-83, 164
Impairment ...............................................................................97-99, 116
Income statement ............................................................20, 75, 128, 157
Innovation ............................................................................................... 10
Intangible assets ..............................................................................97-99
International Financial Reporting Standards ..................66, 79, 130, 135
Inventories ........................................................................................... 102
Joint ventures ............................................................83-84, 101-102, 126
Key management ............................................................................. 86, 92
Key Performance Indicators ............................................................... 6-7
Leases ...........................................................................................120-122
Market capitalisation ............................................................................. 22
Net debt .......................................................................... 26, 113-114, 166
Nominating and Corporate Governance Committee ......................48-49
Non-underlying items ..................................................................... 24, 85
Non-Executive Directors .................................................. 3, 37, 50-65, 86
Non-GAAP measures ....................................................... 23-26, 165-166
Operating costs .................................................................................85-86
Operating profit ........................................................... 20-22, 75, 128, 159
Organisational Structure ....................................................................... 36
Outlook ................................................................................................. 166
Payables ........................................................................................103-104
Pensions and similar obligations ....................................................87-92
Property, plant and equipment .............................................100-101, 167
Provisions ............................................................................................ 120
Receivables ................................................................... 102-103, 132, 136
Related party transactions .......................................................... 126, 151
Research and development ................................................................... 85
Reserves ......................................................... 76, 104, 106, 128, 133, 136
Restructuring ................................................................................. 85, 120
Return on assets ................................................................................... 26
Return on invested capital .................................................................... 26
Revenue ......................................................................................43, 81-82
Risk management and control ........................................................ 27, 44
Risks .................................................................................................27-35
Segment information .......................................................................82-84
Share-based payments ....................................................................92-93
Share buyback programme........................38-39, 105, 126, 133, 137, 156
Share capital ..................................................38-39, 76-77, 105, 132, 136
Shareholders ...................................................................... 18, 38-39, 151
Share registration ................................................................................ 146
Significant subsidiaries ....................................................................... 127
Simplification ......................................................................................... 18
Staff costs .............................................................................................. 86
Strategy .................................................................................................. 10
Taxation .............................................................................................94-96
Total shareholder return ....................................................................... 62
Treasury ..................................................................................32, 110-115
Turnover ................................................... 20-21, 75, 82-84, 128, 157, 160
Underlying earnings per share ............................................... 24, 96, 163
Underlying effective tax rate ................................................... 25, 94, 165
Underlying operating margin ........................................................ 25, 165
Underlying operating profit .........................................25, 82-84, 163-164
Underlying sales growth .................................................. 23-24, 163-165
Underlying volume growth ............................................... 23-24, 163-165
Unilever Leadership Executive ................................................................ 5
Voting ................................................................................................38-39
Website ................................................................................................. 146
Zero based budgeting ...................................................................... 10, 18

147

IndexAnnual Report on Form 20-F 2018ADDITIONAL INFORMATION FOR US LISTING PURPOSES

FORM 20-F REFERENCES
Item 1 Identity of Directors, Senior Management and Advisers ..................................................................................................................... n/a

Item 2 Offer Statistics and Expected Timetable .............................................................................................................................................. n/a

Item 3 Key Information

Selected Financial Data ............................................................................................................................................... 105, 151, 157 – 158

Capitalisation and Indebtedness ...........................................................................................................................................................n/a

Reasons for the offer and use of proceeds ...........................................................................................................................................n/a

Risk factors ..................................................................................................................................................................................... 27 – 33

Item 4 Information on the Company

History and development of the company .....................2, 4, 11 – 18, 20 – 26, 36, 38 – 39, 42, 78, 100 – 101, 122 – 124, 146, 163 – 166

Business overview ................................................................................................................. 1, 8 – 18, 20 – 26, 31, 36, 95 – 97, 163 – 167

Organisational structure ............................................................................................................................................... 36, 127, 138 – 145

Property, plant and equipment ............................................................................................................................................100 – 101, 167

Item 4A Unresolved Staff Comments ...............................................................................................................................................................................n/a

Item 5 Operating and Financial Review and Prospects

Operating results ............................................................................................................................6, 8, 20 – 26, 31, 112 – 119, 163 – 166

Liquidity and capital resources .......................................................................................... 22, 27, 66, 78, 100 – 101, 104, 108 – 122, 166

Research and development, patents and licences, etc. ............................................................................................... 9, 11 – 14, 85 – 86

Trend information ........................................................................................................................................ 4 – 5, 8, 20 – 26, 28 – 33, 166

Off-balance sheet arrangements .............................................................................................................................. 110 – 115, 118 – 122

Tabular disclosure of contractual obligations ....................................................................................................................................... 23

Safe harbour ...................................................................................................................................................................inside back cover

Item 6 Directors, Senior Management and Employees

Directors and senior management .................................................................................................................................................. 3, 150

Compensation ....................................................................................................................................................................50 – 64, 86 – 93

Board practices ...............................................................................................................................3, 36 – 37, 43 – 45, 48, 50, 60, 62, 150

Employees ....................................................................................................................................................................................... 86, 150

Share ownership ......................................................................................................................................................... 52 – 59, 92 -93, 150

Item 7 Major Shareholders and Related Party Transactions

Major shareholders .................................................................................................................................................................38 – 40, 151

Related party transactions ...........................................................................................................................................................126 , 151

Interest of experts and counsel ............................................................................................................................................................n/a

Item 8 Financial Information

Consolidated statements and other financial information ........................................................................ 66 – 137, 146, 151, 158 – 162

Significant changes .............................................................................................................................................................................. 127

Item 9 The Offer and Listing

Offer and listing details .................................................................................................................................................................. 38 – 39

Plan of distribution ................................................................................................................................................................................n/a

Markets ........................................................................................................................................................................................... 38 – 39

Selling shareholders .............................................................................................................................................................................n/a

Dilution ...................................................................................................................................................................................................n/a

Expenses of the issue ............................................................................................................................................................................n/a

Item 10 Additional Information

Share capital ..........................................................................................................................................................................................n/a

Articles of association ................................................................................................................................................. 36 – 42, 48, 58, 152

Material contracts ............................................................................................................................................................................ 36, 41

Exchange controls ................................................................................................................................................................................ 152

Taxation ........................................................................................................................................................................................153 – 154

Dividends and paying agents .................................................................................................................................................................n/a

Statement by experts ............................................................................................................................................................................n/a

Documents on display ...................................................................................................................................................................146, 152

Subsidiary information ..........................................................................................................................................................................n/a

148

Additional Information for US Listing PurposesAnnual Report on Form 20-F 2018

Item 11 Quantitative and Qualitative Disclosures About Market Risk ................................................................................. 87 – 92, 102 – 120, 166

Item 12 Description of Securities Other than Equity Securities

D.1

D.2

D.3

D.4

Description of debt securities ...............................................................................................................................................................n/a

Description of warrants and rights .......................................................................................................................................................n/a

Description of other securities .............................................................................................................................................................n/a

Name of depositary and address of principal executive ......................................................................................................................n/a

Title of ADRS and brief description of provisions .................................................................................................................................n/a

Transfer agent fees and charges ......................................................................................................................................................... 155

Transfer agent payments ...................................................................................................................................................................... 155

Item 13 Defaults, Dividend Arrearages and Delinquencies

Defaults ................................................................................................................................................................................................. 155

Dividend arrearages and delinquencies .............................................................................................................................................. 155

Item 14 Material Modifications to the Rights of Security Holders and Use of Proceeds ................................................................................... n/a

Item 15 Controls and Procedures ................................................................................................................................................. 42, 67 – 74, 156

Item 16 Reserved

Audit Committee Financial Expert ................................................................................................................................................... 37, 43

Code of Ethics ..............................................................................................................................................................................27, 42, 46

Principal Accountant Fees and Services ....................................................................................................................................... 45, 156

Exemptions From The Listing Standards For Audit Committees ........................................................................................................n/a

Purchases Of Equity Securities By The Issuer and Affiliated Purchasers ....................................................................38 – 39, 126, 156

Change in Registrant’s Certifying Accountant ......................................................................................................................................n/a

Corporate Governance ............................................................................................................................................................................ 42

Mine Safety Disclosures ........................................................................................................................................................................n/a

Item 17 Financial Statements ............................................................................................................................................. 67, 75 – 127, 158 – 162

Item 18 Financial Statements ............................................................................................................................................. 67, 75 – 127, 158 – 162

Item 19 Exhibits ............................................................................... Please refer to the Exhibit list located immediately following the signature
page for this document as filed with the SEC.

149

Additional Information for US Listing PurposesAnnual Report on Form 20-F 2018

ADDITIONAL INFORMATION FOR US LISTING PURPOSES CONTINUED

DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
EMPLOYEES
The average number of employees for the last three years is provided in note 4A on page 86. The average number of employees during 2018
included 7,996 seasonal workers. We believe our relationship with our employees and any labour unions of which they may be part is satisfactory
in all material respects.

GLOBAL EMPLOYEE SHARE PLANS (SHARES)
In November 2014, Unilever’s global employee plan ‘SHARES’ was launched in 17 countries. SHARES gives eligible Unilever employees below
senior management level the opportunity to invest between €25 and €200 per month from their net salary in Unilever shares. For every three
shares our employees buy (Investment Shares), Unilever will give them one free Matching Share, which will vest if employees hold their
Investment Shares for at least three years. The Matching Shares are not subject to any performance conditions. In 2015, SHARES was rolled out
globally and is now offered in more than 100 countries. Executive Directors are not eligible to participate in SHARES. As of 21 February 2019,
awards for 291,657 NV and 219,423 PLC shares were outstanding under SHARES.

NORTH AMERICAN SHARE PLANS
Unilever also maintains share plans for its North American employees that are governed by an umbrella plan referred to as the Unilever North
America Omnibus Equity Compensation Plan. These plans are the North American equivalents of the Unilever Share Plan 2017 and the GSIP,
MCIP and SHARES plans. The rules governing these share plans are materially the same as the rules governing the Unilever Share Plan 2017,
GSIP, MCIP and SHARES plans, respectively. However, the plans contain non-competition and non-solicitation covenants and they are subject
to US and Canadian employment and tax laws. The plans are administered by the North America Compensation Committee of Unilever United
States Inc. and they are governed by New York law.

The foregoing description of the Unilever North America Omnibus Equity Compensation Plan does not purport to be complete and is qualified
in its entirety by reference to the Unilever North America Omnibus Equity Compensation Plan, including all amendments thereto, filed as Exhibit
99.1 to the Form S-8 (File No. 333-185299) filed with the SEC on 6 December 2012, which is incorporated herein by reference.

COMPENSATION COMMITTEE
The Committee is concerned with the remuneration of the Executive and Non-Executive Directors and the tier of management directly below
the Boards. It also has responsibility for the cash and executive and all employee share-based incentive plans, the Remuneration Policy and
performance evaluation of the Unilever Leadership Executive.

DIRECTORS AND SENIOR MANAGEMENT

FAMILY RELATIONSHIP
There are no family relationships between any of our Executive Directors, members of the ULE or Non-Executive Directors.

OTHER ARRANGEMENTS
None of our Non-Executive Directors, Executive Directors or other key management personnel are elected or appointed under any arrangement
or understanding with any major shareholder, customer, supplier or others.

150

Additional Information for US Listing PurposesAnnual Report on Form 20-F 2018MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

MAJOR SHAREHOLDERS
The voting rights of the significant shareholders of NV and PLC are the same as for other holders of the class of share held by such significant shareholder.

The principal trading markets upon which Unilever shares are listed are Euronext Amsterdam for NV ordinary shares and the depositary receipts
thereof, 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. Deutsche Bank Trust
Company Americas (Deutsche Bank) acts for NV and PLC as issuer, transfer agent and, in respect of the PLC American Depositary Receipts, depositary.

At 21 February 2019 (the latest practicable date for inclusion in this report), there were 4,134 registered holders of NV New York Registry Shares
and 841 registered holders of PLC American Depositary Receipts in the United States. We estimate that approximately 10% of NV’s ordinary shares
(including shares underlying NV New York Registry shares) were held in the United States (approximately 11% in 2017) and approximately 11% of
PLC’s ordinary shares (including shares underlying PLC American Depositary Receipts) were held in the United States (approximately 10% in 2017).

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.
On a going concern basis, you have largely equal rights over our combined net profit and capital reserves as shown in the consolidated accounts.

To Unilever’s knowledge, the Unilever Group is not owned or controlled, directly or indirectly, by another corporation, any foreign government or by
any other legal or natural person, severally or jointly. The Group is not aware of any arrangements the operation of which may at any subsequent
date result in a change of control of Unilever.

RELATED PARTY TRANSACTIONS
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 Notes 23 to 24 to the consolidated financial statements (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 2018 up to
21 February 2019 (the latest practicable date for inclusion in this report).

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 Annual General Meetings (AGMs) and separate meetings of ordinary shareholders, the Equalisation Agreement
was modified to facilitate the payment of quarterly dividends from 2010 onwards.

Dividends declared for the year

NV dividends

Dividend per €0.16

Dividend per €0.16 (US Registry)

PLC dividends

Dividend per 31/9p

Dividend per 31/9p (US Registry)

Dividends paid during the year

NV dividends

Dividend per €0.16

Dividend per €0.16 (US Registry)

PLC dividends

Dividend per 31/9p

Dividend per 31/9p (US Registry)

2018

2017

2016

2015

2014

€1.55

$1.82

€1.43

$1.66

£1.35

$1.82

£1.26

$1.66

€1.52

$1.83

€1.40

$1.56

£1.33

$1.83

£1.22

$1.56

€1.28

$1.42

€1.09

$1.42

€1.26

$1.40

€1.04

$1.40

€1.21

$1.32

€1.14

$1.47

£0.88

$1.32

£0.90

$1.47

€1.19

$1.32

€1.12

$1.51

£0.87

$1.32

£0.91

$1.51

151

Additional Information for US Listing PurposesAnnual Report on Form 20-F 2018ADDITIONAL INFORMATION FOR US LISTING PURPOSES CONTINUED

MATERIAL CONTRACTS
The descriptions of the foundation agreements set forth in the Unilever
Annual Report and Accounts 2018 do not purport to be complete
and are qualified in their entirety by reference to the Equalisation
Agreement between NV and PLC, the Deed of Mutual Covenants
and the Agreement for Mutual Guarantees of Borrowing, including
all amendments thereto, filed as Exhibits 4.1(a), 4.1(b) and 4.1(c),
respectively, to this report, which are incorporated herein by reference.

EXCHANGE CONTROLS
Under the Dutch External Financial Relations Act of 25 March 1994,
the Minister of Finance is authorised to issue regulations relating to
financial 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 NV.

Other than certain economic sanctions which may be in place from
time to time, there are currently no UK laws, decrees or regulations
restricting the import or export of capital or affecting the remittance
of dividends or other payments to holders of the PLC’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 PLC’s Articles of Association on the right to be a holder
of, and to vote in respect of, the company’s shares.

UNILEVER ANNUAL REPORT ON FORM 20-F 2018
Filed with the SEC on the SEC’s website. Printed copies are available,
free of charge, upon request to Unilever PLC, Investor Relations
department, 100 Victoria Embankment, London, EC4Y 0DY United Kingdom.

DOCUMENTS ON DISPLAY IN THE UNITED STATES
Unilever files and furnishes reports and information with the United
States SEC. 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.

ARTICLES OF ASSOCIATION
NV’s Articles of Association contain, among other things, the objects
clause, which sets out the scope of activities that NV is authorised to
undertake. They are drafted to give a wide scope and provide that the
primary objectives are: to carry on business as a holding company,
to manage any companies in which it has an interest and to operate
and carry into effect the Equalisation Agreement. At the 2010 PLC
AGM, the shareholders agreed that the objects clause be removed
from PLC’s Articles of Association so that there are no restrictions
on its objects.

DIRECTORS’ BORROWING POWERS
The borrowing powers of NV Directors on behalf of NV are not limited
by NV’s Articles of Association. PLC Directors have the power to
borrow on behalf of PLC up to three times the PLC proportion of the
adjusted capital and reserves of the Unilever Group, as defined in
PLC’s Articles of Association, without the approval of shareholders
(by way of an ordinary resolution).

ALLOCATION OF PROFITS
Under NV’s Articles of Association, available profits after reserves
have been provided for by virtue of law, the Equalisation Agreement
or deemed necessary by the Board, are distributed first to 7% and
6% cumulative preference shareholders by a dividend of 7% and 6%,
respectively, calculated on the basis of the original nominal value of
1,000 Dutch guilders converted to euros at the official conversion
rate. The remaining profits are distributed to ordinary shareholders
in proportion to the nominal value of their holdings.

Distributable profits of PLC are paid first at the rate of 5% per year on
the paid-up nominal capital of 31/9p of the ordinary shares, in a further
such dividend at a rate of 5% per year on the paid-up nominal capital
of 31/9p of the ordinary shares and then at the rate of 6% per year on
the paid-up nominal capital of the deferred stock of £100,000. The
surplus is paid by way of a dividend on the ordinary shares.

LAPSE OF DISTRIBUTIONS
The right to cash and the proceeds of share distributions by NV lapses
five and 20 years, respectively, after the first day the distribution
was obtainable. Unclaimed amounts revert to NV. Any PLC dividend
unclaimed after 12 years from the date of the declaration of the
dividend reverts to PLC.

REDEMPTION PROVISIONS AND CAPITAL CALL
Under Dutch law, NV may only redeem treasury shares (including
shares underlying depositary receipts) or shares whose terms permit
redemption. Outstanding PLC ordinary shares and deferred shares
cannot be redeemed. NV and PLC may make capital calls on money
unpaid on shares and not payable on a fixed date. NV and PLC only
issue fully paid shares.

MODIFICATION OF RIGHTS
Modifications to NV’s or PLC’s Articles of Association must be
approved by a general meeting of shareholders. Any modification
of the NV Articles of Association that prejudices the rights of 7% or
6% cumulative preference shareholders of NV must be approved by
three quarters of votes cast (excluding treasury shares) at a meeting
of affected holders.

Modifications that prejudicially affect the rights and privileges of
a class of PLC shareholders require the written consent of three
quarters of the affected holders (excluding treasury shares) or a
special resolution passed at a general meeting of the class at which
at least two persons holding or representing at least one third of the
paid-up capital (excluding treasury shares) must be present. Every
shareholder is entitled to one vote per share held on a poll and may
demand a poll vote. At any adjourned general meeting, present
affected class holders may establish a quorum.

152

Additional Information for US Listing PurposesAnnual Report on Form 20-F 2018
TAXATION
TAXATION FOR US PERSONS 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 United States Federal Income Tax on
its worldwide income.

TAXATION 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.

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% with, as
appropriate, the possibility to claim a credit for that tax on 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 shareholders’ 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.

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 may be entitled to reclaim
from tax 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. 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 DIVIDENDS
If you are a United States person, the dividend (including the withheld
amount) up to the amount of NV earnings and profits for United
States Federal Income Tax purposes will be ordinary dividend income.
Dividends received by an individual 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.
In 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 maximum tax rate
on dividends described above.

Any portion of the dividend that exceeds NV’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 NV’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 FOR US INDIVIDUAL HOLDERS
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 United
States Federal Income 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 advisers
regarding the possible application of this disclosure requirement
to their investment in the shares.

153

Additional Information for US Listing PurposesAnnual Report on Form 20-F 2018
ADDITIONAL INFORMATION FOR US LISTING PURPOSES CONTINUED

TAXATION 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 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 FOR US PERSONS HOLDING SHARES OR
AMERICAN DEPOSITARY 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 or American Depositary Shares (ADSs). 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 United
States Federal Income Tax on its worldwide income.

UNITED 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 DIVIDENDS
If you are a US person, the dividend up to the amount of PLC’s
earnings and profits for United States Federal Income Tax purposes
will be ordinary dividend income. Dividends received by an individual
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 or ADSs 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 corporation for this purpose. In 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.

DISCLOSURE REQUIREMENTS FOR US INDIVIDUAL
HOLDERS
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 United
States Federal Income 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 advisers
regarding the possible application of this disclosure requirement
to their investment in the shares or ADSs.

UK TAXATION ON CAPITAL GAINS
Under United Kingdom law, when you dispose of shares you may be
liable to pay United Kingdom tax in respect of any gain accruing on
the disposal. However, if you are either:
• an individual who is not resident in the United Kingdom for the year

in question; or

• a company which is not resident in the United Kingdom when the

gain accrues

you will generally not be liable to United Kingdom tax on any capital
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,
agency or permanent establishment; or if the shares are held by an
individual who becomes resident in the UK having left the UK for a
period of non-residence of five years or less and who was resident for
at least four of the seven tax years prior to leaving the UK.

UK INHERITANCE 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 generally not be subject to United Kingdom inheritance tax:
• on the individual’s death; or
• on a gift of the shares during the individual’s lifetime.

Where ordinary shares are held on trust, they will generally not be
subject to United Kingdom inheritance tax where the settlor at the
time of the settlement:
• was domiciled for the purposes of the convention in the United

States; and

• was not for the purposes of the convention a national of the

United Kingdom.

Any portion of the dividend that exceeds PLC’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 PLC’s shares or ADSs, and
thereafter is treated as a gain on a disposition of the shares or ADSs.

An exception is if the shares are part of the business property of a
permanent establishment of the shareholder 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.

Where ordinary shares are subject to United Kingdom inheritance tax
and United States federal gift or federal estate tax, the amount of the
tax paid in one jurisdiction can generally be credited against the tax
due in the other jurisdiction.

Where a United Kingdom inheritance tax liability is prima facie not
payable by virtue of the convention, that tax can become payable if
any applicable federal gift or federal estate tax on the shares in the
United States is not paid.

154

Additional Information for US Listing PurposesAnnual Report on Form 20-F 2018DESCRIPTION OF SECURITIES OTHER THAN
EQUITY SECURITIES
Deutsche Bank serves as both the transfer agent and registrar
pursuant to the NV New York Registered Share Program and
the depositary (Depositary) for PLC’s American Depositary
Receipt Program.

TRANSFER AGENT FEES AND CHARGES FOR NV
Although Items 12.D.3 and 12.D.4 are not applicable to NV the
following fees, charges and transfer agent payments are listed, as
any fee arrangement with Deutsche Bank will cover both programs.

Under the terms of the Transfer Agent Agreement for the NV New York
Registered Share program, a New York Registry Share (NYRS) holder
may have to pay the following service fees to the transfer agent:
• Issuance of NYRSs: up to US 5¢ per NYRS issued.
• Cancellation of NYRSs: up to US 5¢ per NYRS cancelled.

An NYRS 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
(ie 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 (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.

Transfer agent fees payable upon the issuance and cancellation of
NYRSs are typically paid to the transfer agent by the brokers (on behalf
of their clients) receiving the newly-issued NYRSs from the transfer
agent and by the brokers (on behalf of their clients) delivering the
NYRSs 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.

DEPOSITARY FEES AND CHARGES FOR PLC
Under the terms of the Deposit Agreement for the 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.
• Processing of dividend and other cash distributions not made

pursuant to a cancellation or withdrawal: up to US 5¢ per ADS held.

An ADS holder will also be responsible for paying 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
(ie 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 (ie when shares

are deposited or withdrawn from deposit);

• fees and expenses incurred in connection with the delivery or

servicing of shares on deposit; and

• 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.

TRANSFER AGENT PAYMENTS – FISCAL YEAR 2018 FOR NV
In relation to 2018, NV received $612,500.00 from Deutsche Bank,
the transfer agent and registrar for its New York Registered Share
program since 1 July 2014, including the reimbursement of listing fees
(NYSE), reimbursement of settlement infrastructure fees (including
DTC feeds), reimbursement of proxy process expenses (printing,
postage and distribution), tax reclaim services and program-related
expenses (that include expenses incurred from the requirements of
the Sarbanes-Oxley Act of 2002).

DEPOSITARY PAYMENTS – FISCAL YEAR 2018 FOR PLC
In relation to 2018, PLC received $1,774,188.02 from Deutsche Bank,
the depositary bank for its American Depositary Receipt Program
since 1 July 2014, including processing of cash distributions,
reimbursement of listing fees (NYSE), reimbursement of settlement
infrastructure fees (including DTC feeds), reimbursement of proxy
process expenses (printing, postage and distribution), dividend fees
and program-related expenses (that include expenses incurred from
the requirements of the Sarbanes-Oxley Act of 2002).

DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

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

DIVIDEND 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.

155

Additional Information for US Listing PurposesAnnual Report on Form 20-F 2018
ADDITIONAL INFORMATION FOR US LISTING PURPOSES CONTINUED

PURCHASES OF EQUITY SECURITIES

SHARE PURCHASES DURING 2018
Please also refer to ‘Our shares’ section on pages 38 to 39.

Total number of
shares purchased

Average price
paid per share (€)

Of which, number of
shares purchased
as part of publicly
announced plans(b)

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

January

February

March
April(a)

May

June

July

August

September

October

November

December

Total

6,222,000

26,547,961

26,492,822

20,461,397

20,971,789

15,866,919

8,591,175

6,506,538

45.63

47.62

47.16

48.41

49.50

48.16

46.67

47.75

–

26,547,961

26,492,822

20,461,397

20,971,789

15,866,919

8,591,175

6,506,538

131,660,601

125,438,601

(a) 6,222,000 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 92 and 93.

(b) On 19 April 2018 Unilever announced a share buyback programme of €6 billion in 2018.

Between 31 December 2018 and 21 February 2019 (the latest practicable date for inclusion in this report) neither NV or PLC conducted any
share repurchases.

MANAGEMENT’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 Group’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 (2013) to evaluate

the effectiveness of our internal control over financial reporting. Management believes that the COSO framework (2013) 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 2018, and has concluded that such
internal control over financial reporting is effective. Management’s assessment and conclusion excludes Adityaa Milk, Equilibra, Betty Ice,
Denny Ice, and Vegetarian Butcher from this assessment, as they were acquired on 27 September 2018, 1 October 2018, 1 November 2018, 3
December 2018, and 31 December 2018 respectively. These entities are included in our 2018 consolidated financial statements, and together
they constituted approximately 0.5% of our total assets as at 31 December 2018 and approximately 0.02% of total turnover for the year ended 31
December 2018; and

• KPMG LLP and KPMG Accountants N.V., who have audited the consolidated financial statements of the Group for the year ended 31 December
2018, have also audited the effectiveness of internal control over financial reporting as at 31 December 2018 and have issued an attestation
report on internal control over financial reporting.

PRINCIPAL ACCOUNTANT FEES AND SERVICES

Audit fees(a)
Audit-related fees(b)

Tax fees

All other fees

€ million
2018

€ million
2017

€ million
2016

16
5(d)
–(c)
–(c)

14
5(d)
–(c)
–(c)

14
–(c)
–(c)
–(c)

(a) Amount payable to KPMG in respect of services supplied to associated pension schemes was less than €1 million individually and in aggregate (2017: less than €1

million individually and in aggregate; 2016: less than €1 million individually and in aggregate).

(b) Includes other audit services which comprise audit and similar work that regulations or agreements with third parties require the auditors to undertake.
(c) Amounts paid in relation to each type of service are individually less than €1 million. In aggregate the fees paid were less than €1 million (2017: €1 million, 2016:

€1 million).

(d) 2018 includes €4 million (2017: €5 million) for audits and reviews of carve-out financial statements of the Spreads business and €1 million (2017: €Nil) for

assurance work on Simplification.

156

Additional Information for US Listing PurposesAnnual Report on Form 20-F 2018SELECTED FINANCIAL DATA
The schedules below provide the Group’s selected financial data for the five most recent financial years.

Consolidated income statement

Turnover

Operating profit

Net finance costs

Net monetary gain arising from hyperinflationary economies

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

Profit before taxation

Taxation

Net profit

Attributable to:

Non-controlling interests

Shareholders’ equity

Combined earnings per share(a)

Basic earnings per share

Diluted earnings per share

€ million
2018

€ million
2017

€ million
2016

€ million
2015

€ million
2014

50,982

53,715

52,713

53,272

48,436

12,535

8,857

7,801

7,515

7,980

(481)

122

(877)

–

(563)

–

(493)

–

(477)

–

207

173

231

198

143

12,383

(2,575)

8,153

(1,667)

7,469

(1,922)

7,220

(1,961)

7,646

(2,131)

9,808

6,486

5,547

5,259

5,515

419

9,389

433

6,053

363

5,184

350

4,909

344

5,171

€ million
2018

€ million
2017

€ million
2016

€ million
2015

€ million
2014

3.50

3.48

2.16

2.15

1.83

1.82

1.73

1.72

1.82

1.79

(a) For the basis of the calculations of combined earnings per share see note 7 ‘Combined earnings per share’ on page 96.

Consolidated balance sheet

Non-current assets

Current assets

Total assets

Current liabilities

Non-current liabilities

Total liabilities

Share Capital

Reserves

Non-controlling interests

Total equity

Total liabilities and equity

Consolidated cash flow statement

Net cash flow from operating activities

Net cash flow from/(used in) investing activities

Net cash flow from/(used in) financing activities

Net increase/(decrease) in cash and cash equivalents

Cash and cash equivalents at the beginning of the year

Effect of foreign exchange rates

Cash and cash equivalents at the end of the year

€ million
2018

€ million
2017

€ million
2016

€ million
2015

€ million
2014

43,975

15,481

59,456

19,772

27,392

47,164

43,302

16,983

60,285

23,177

22,721

45,898

42,545

13,884

56,429

20,556

18,893

39,449

39,612

12,686

52,298

20,019

16,197

36,216

35,680

12,347

48,027

19,642

14,122

33,764

464

484

11,108

13,145

15,870

14,955

13,167

720

12,292

59,456

758

14,387

60,285

626

16,980

56,429

643

16,082

52,298

612

14,263

48,027

€ million
2018

€ million
2017

€ million
2016

€ million
2015

€ million
2014

6,753

4,644

(11,548)

(151)

3,169

7,292

(5,879)

(1,433)

(20)

3,198

(9)

3,090

3,169

7,047

(3,188)

(3,073)

786

2,128

284

3,198

7,330

(3,539)

(3,032)

759

1,910

(541)

2,128

5,543

(341)

(5,190)

2,044

(146)

1,910

157

Additional Information for US Listing PurposesAnnual Report on Form 20-F 2018

ADDITIONAL INFORMATION FOR US LISTING PURPOSES CONTINUED

Ratios and other metrics

Operating margin (%)
Net profit margin (%)(a)

Number of Shares issued

Unilever N.V. ordinary shares (Millions of units)

Unilever N.V. special shares (units)

Unilever PLC ordinary shares (Millions of units)

Unilever PLC deferred stock (units)

2018

24.6

18.4

1,715

2,400

1,187

2017

16.5

11.3

1,715

2,400

1,310

2016

14.8

9.8

1,715

2,400

1,310

2015

14.1

9.2

1,715

2,400

1,310

2014

16.5

10.7

1,715

2,400

1,310

100,000

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

GUARANTOR STATEMENTS (AUDITED)
On 27 July 2017, Unilever N.V. and Unilever Capital Corporation (UCC) filed a US Shelf registration, which is unconditionally and fully guaranteed,
jointly and severally, by Unilever N.V., Unilever PLC and Unilever United States, Inc. (UNUS) and that superseded the NV and UCC US Shelf
registration filed on 30 September 2014, which was 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, $12.5 billion of Notes were
outstanding at 31 December 2018 (2017: $8.9 billion; 2016: $6.3 billion) with coupons ranging from 1.375% to 5.9%. These Notes are repayable
between 15 February 2019 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 of 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

Income statement
for the year ended 31 December 2018

Turnover

Operating profit

Net finance income/(costs)

Pensions and similar obligations

Other income/(losses)

Premium paid on buyback of preference shares

Net monetary gain arising from
hyperinflationary economies

Profit before taxation

Taxation

Net profit before subsidiaries

Equity earnings of subsidiaries

Net profit

Attributable to:

Non-controlling interests

Shareholders’ equity

Other comprehensive income

Total comprehensive income

€ million
Unilever
Capital
Corporation
subsidiary
issuer

€ million

Unilever(a)
parent
entities

€ million
Unilever
United
States Inc.
subsidiary
guarantor

–

1,985

(104)

(2)

–

(382)

–

1,497

(199)

1,298

8,091

9,389

–

9,389

(24)

9,365

(449)

11,335

Non-
guarantor
subsidiaries

50,982

10,554

(4)

207

382

122

(2,376)

8,959

(20,326)

(11,367)

Eliminations

–

10,448

419

–

(11,786)

10,448

(1,194)

–

(12,561)

10,448

–

(4)

(426)

(19)

–

(449)

1,787

1,338

–

1,338

1,363

Unilever
Group

50,982

12,535

(456)

(25)

207

–

122

12,383

(2,575)

9,808

–

9,808

419

9,389

(1,193)

8,615

(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.

158

Additional Information for US Listing PurposesAnnual Report on Form 20-F 2018

Income statement
for the year ended 31 December 2017

Turnover

Operating profit

Net finance income/(costs)

Pensions and similar obligations

Other income/(losses)

Premium paid on buyback of preference shares

Profit before taxation

Taxation

Net profit before subsidiaries

Equity earnings of subsidiaries

Net profit

Attributable to:

Non-controlling interests

Shareholders’ equity

Other comprehensive income

Total comprehensive income

Income statement
for the year ended 31 December 2016

Turnover

Operating profit

Net finance income/(costs)

Pensions and similar obligations

Other income/(losses)

Premium paid on buyback of preference shares

Profit before taxation

Taxation

Net profit before subsidiaries

Equity earnings of subsidiaries

Net profit

Attributable to:

Non-controlling interests

Shareholders’ equity

Other comprehensive income

Total comprehensive income

€ million
Unilever
Capital
Corporation
subsidiary
issuer

€ million

Unilever(a)
parent
entities

€ million
Unilever
United
States Inc.
subsidiary
guarantor

Non-
guarantor
subsidiaries

Eliminations

€ million

–

997

(109)

(2)

–

886

(165)

721

5,332

6,053

–

6,053

(75)

5,978

–

(4)

(379)

(24)

–

(407)

–

(407)

1,721

1,314

–

1,314

(156)

1,158

53,715

7,864

(70)

173

(382)

7,673

(1,502)

6,171

(10,298)

(4,127)

433

(4,560)

455

(3,672)

–

3,245

–

3,245

–

3,245

–

269

(110)

(3)

–

156

(114)

5,142

5,184

–

5,184

(14)

5,170

–

(5)

(331)

(27)

–

(363)

–

(363)

804

441

–

441

468

52,713

7,537

(29)

(64)

231

–

7,675

(1,808)

5,867

(4,559)

1,308

363

945

(791)

517

–

(1,387)

–

(1,387)

–

(1,387)

Unilever
Group

53,715

8,857

(399)

(96)

173

(382)

8,153

(1,667)

6,486

–

6,486

433

6,053

224

6,710

Unilever
Group

52,713

7,801

(469)

(94)

231

–

7,469

(1,922)

5,547

–

5,547

363

5,184

(778)

4,769

€ million
Unilever
Capital
Corporation
subsidiary
issuer

€ million

Unilever(a)
parent
entities

€ million
Unilever
United
States Inc.
subsidiary
guarantor

Non-
guarantor
subsidiaries

Eliminations

€ million

159

Additional Information for US Listing PurposesAnnual Report on Form 20-F 2018

ADDITIONAL INFORMATION FOR US LISTING PURPOSES CONTINUED

Balance sheet
at 31 December 2018

Assets

Non-current assets

Goodwill and intangible assets

Deferred tax assets

Other non-current assets

Amounts due from group companies

Net assets of subsidiaries (equity accounted)

Current assets

Amounts due from group companies

Trade and other current receivables

Current tax assets

Other current assets

Total assets

Liabilities

Current liabilities

Financial liabilities

Amounts due to group companies

Trade payables and other current liabilities

Current tax liabilities

Other current liabilities

Non-current liabilities

Financial liabilities

Amounts due to group companies

Pensions and post-retirement healthcare
liabilities:

Funded schemes in deficit

Unfunded schemes

Other non-current liabilities

Total liabilities

Shareholders’ equity

Non-controlling interests

Total equity

Total liabilities and equity

€ million
Unilever
Capital
Corporation
subsidiary
issuer

€ million

Unilever(a)
parent
entities

€ million
Unilever
United
States Inc.
subsidiary
guarantor

€ million

Non-
guarantor
subsidiaries

Eliminations

Unilever
Group

–

17,211

–

17,211

–

17,217

2,381

4,895

–

3,058

–

10,379

22,299

35,756

–

22,463

22,469

11,883

5,413

155

12,060

47,816

25,010

327

–

5,417

27,886

3,127

–

7,372

25,369

3,216

9,525

–

9,525

16,897

320

–

320

17,217

10,767

–

141

11,002

36,371

11,445

–

11,445

47,816

–

13,290

136

388

13,815

17,031

10,855

–

10,855

27,886

26,435

1,113

13,343

–

40,891

33,032

6,326

457

8,511

48,326

89,217

822

17,296

14,019

1,373

633

34,143

1,358

14,300

1,066

918

2,998

20,640

54,783

33,714

720

34,434

89,217

–

(27,590)

(44,762)

(72,352)

(50,328)

–

(50,328)

(122,680)

–

(50,328)

–

(50,328)

–

(27,590)

–

(27,590)

(77,918)

(44,762)

–

(44,762)

(122,680)

29,493

1,117

13,365

–

43,975

–

6,485

472

8,524

15,481

59,456

3,235

–

14,457

1,445

635

19,772

21,650

–

1,209

1,393

3,140

27,392

47,164

11,572

720

12,292

59,456

160

Additional Information for US Listing PurposesAnnual Report on Form 20-F 2018

Balance sheet
at 31 December 2017

Assets

Non-current assets

Goodwill and intangible assets

Deferred tax assets

Other non-current assets

Amounts due from group companies

Net assets of subsidiaries (equity accounted)

Current assets

Amounts due from group companies

Trade and other current receivables

Current tax assets

Other current assets

Total assets

Liabilities

Current liabilities

Financial liabilities

Amounts due to group companies

Trade payables and other current liabilities

Current tax liabilities

Other current liabilities

Non-current liabilities

Financial liabilities

Amounts due to group companies

Pensions and post-retirement healthcare
liabilities:

Funded schemes in deficit

Unfunded schemes

Other non-current liabilities

Total liabilities

Shareholders’ equity

Non-controlling interests

Total equity

Total liabilities and equity

€ million
Unilever
Capital
Corporation
subsidiary
issuer

€ million

Unilever(a)
parent
entities

€ million
Unilever
United
States Inc.
subsidiary
guarantor

€ million

Non-
guarantor
subsidiaries

Eliminations

Unilever
Group

–

17,132

–

17,132

–

17,132

2,420

6,964

–

2,143

7,099

35,933

45,271

–

21,568

21,618

6,119

5,318

6,266

51,537

4,685

25,457

215

–

5,330

26,948

–

14,517

103

439

15,060

15,096

11,852

–

11,852

26,948

9,449

30,362

7,377

–

7,377

16,826

306

–

306

17,132

7,571

–

7,677

38,039

13,498

–

13,498

51,537

26,258

947

13,808

–

41,013

32,445

5,168

422

11,234

49,269

90,282

862

11,437

13,135

1,088

690

27,212

1,514

9,714

1,114

977

3,519

16,838

44,050

45,474

758

46,232

90,282

–

(24,231)

(57,501)

(81,732)

(43,882)

–

(43,882)

(125,614)

–

(43,882)

–

(43,882)

–

(24,231)

–

(24,231)

(68,113)

(57,501)

–

(57,501)

(125,614)

28,401

1,085

13,816

–

43,302

–

5,222

488

11,273

16,983

60,285

7,968

–

13,426

1,088

695

23,177

16,462

–

1,225

1,509

3,525

22,721

45,898

13,629

758

14,387

60,285

161

Additional Information for US Listing PurposesAnnual Report on Form 20-F 2018

ADDITIONAL INFORMATION FOR US LISTING PURPOSES CONTINUED

Cash flow statement
for the year ended 31 December 2018

Net cash flow from/(used in) operating
activities

Net cash flow from/(used in) investing
activities

Net cash flow from/(used in) financing
activities

Net increase/(decrease) in cash and cash
equivalents

Cash and cash equivalents at beginning of year

Effect of foreign exchange rates

Cash and cash equivalents at end of year

Cash flow statement
for the year ended 31 December 2017

Net cash flow from/(used in) operating
activities

Net cash flow from/(used in) investing
activities

Net cash flow from/(used in) financing
activities

Net increase/(decrease) in cash and cash
equivalents

Cash and cash equivalents at beginning of year

Effect of foreign exchange rates

Cash and cash equivalents at end of year

Cash flow statement
for the year ended 31 December 2016

Net cash flow from/(used in) operating
activities

Net cash flow from/(used in) investing
activities

Net cash flow from/(used in) financing
activities

Net increase/(decrease) in cash and cash
equivalents

Cash and cash equivalents at beginning of year

Effect of foreign exchange rates

Cash and cash equivalents at end of year

€ million
Unilever
Capital
Corporation
subsidiary
issuer

€ million

Unilever(a)
parent
entities

€ million
Unilever
United
States Inc.
subsidiary
guarantor

–

945

1,088

1,196

(1,097)

(2,183)

(9)

–

(42)

(6)

(63)

–

(1)

–

(1)

€ million
Unilever
Capital
Corporation
subsidiary
issuer

€ million

Unilever(a)
parent
entities

€ million
Unilever
United
States Inc.
subsidiary
guarantor

€ million

Non-
guarantor
subsidiaries

Eliminations

5,814

4,619

–

(2,196)

Unilever
Group

6,753

4,644

(10,533)

2,196

(11,548)

(100)

3,147

3,078

–

(151)

3,169

3,090

€ million

Non-
guarantor
subsidiaries

Eliminations

Unilever
Group

–

941

(40)

(3,884)

(7,123)

(1,062)

6,391

5,136

–

7,292

1,054

(5,879)

3,873

6,261

1,103

(11,616)

(1,054)

(1,433)

(11)

–

(61)

(2)

–

(1)

(89)

3,195

3,147

–

(20)

3,198

(9)

3,169

€ million
Unilever
Capital
Corporation
subsidiary
issuer

€ million

Unilever(a)
parent
entities

€ million
Unilever
United
States Inc.
subsidiary
guarantor

€ million

Non-
guarantor
subsidiaries

Eliminations

Unilever
Group

–

(1,053)

1,048

(5)

–

(679)

621

(13)

(177)

(783)

959

(1)

–

(2)

7,179

–

7,047

(1,712)

1,039

(3,188)

(4,662)

(1,039)

(3,073)

805

2,126

264

3,195

–

786

2,128

284

3,198

162

Additional Information for US Listing PurposesAnnual Report on Form 20-F 2018

The effective tax rate was 20.8% versus 26.2% in 2016. The change
was mainly due to the impact of US tax reform that led to a one-off tax
benefit coming from restating deferred tax balances at the new lower
federal tax rate, partially offset by the tax impact of the AdeS business
disposal.

Net profit from joint ventures and associates was up 22% at €155
million, an increase coming from growth in profits from the Pepsi
Lipton joint venture and profit from disposal of an investment in
a joint venture in India. Other income from non-current investments
was €18 million compared to €104 million in the prior year which
included a gain of €107 million from the sale of financial assets.

Diluted earnings per share increased by 18.4% to €2.15 reflecting
improved operating margins, €578 million US tax reform and a €309
million gain on disposal of the AdeS business. Underlying earnings per
share increased by 10.7% to €2.24. This measure excludes the post tax
impact of non-underlying items.

ADDITIONAL COMMENTS ON 2017 EXPENSES AND
OPERATING PROFIT
Underlying operating profit increased by €0.8 billion compared to
2016 driven by an improvement across all divisions, with an increase in
Beauty & Personal Care by €0.4 billion and Home Care and Foods and
Refreshment by €0.2 billion each. Operating profit increased by €1.1
billion, including a gain on disposal of AdeS Soy beverage business in
Latin America of €0.3 billion.

Cost of raw and packing material and goods purchased for resale
(material costs) increased by €0.5 billion. This included a favourable
exchange rate impact of €0.4 billion; at constant exchange rates
it was up by €0.9 billion. At constant exchange rates, gross total
input costs (including material costs, distribution and supply chain
indirects) increase of €1.9 billion was more than offset by favourable
price changes of €1.2 billion, and material costs savings of €1.4
billion during the year, resulting in gross margin improvement of 0.5
percentage points to 43.1%.

Staff costs increased by €0.2 billion despite a decrease in the average
number of employees, primarily due to share based compensation
and bonuses, which were higher due to stronger performance against
targets as compared to 2016. There were also higher redundancy
costs incurred during the year. These were partially offset by savings
delivered through the C4G programme. The absolute level of our brand
and marketing investment in local currencies was flat versus 2016. At
current rates, the brand and marketing investment as a percentage of
turnover was down by 0.6 percentage points to 14.1%.

The impact of input costs and investment in our brands is discussed
further in our segmental disclosures, which also provide additional
details of the impact of brands, products and sub categories on driving
top-line growth.

OPERATING AND FINANCIAL REVIEW
AND PROSPECTS

FINANCIAL REVIEW 2017

GROUP RESULTS AND EARNINGS PER SHARE
The following discussion summarises the results of the Group during
the years 2017 and 2016. The figures quoted are in euros, at current
rates of exchange, being the average rates applying in each period as
applicable, unless otherwise stated.

In 2017 and 2016, no disposals qualified to be disclosed as
discontinued operations for purposes of reporting.

2017

2016 % change

Turnover (€ million)

Operating profit (€ million)

Underlying operating profit (€ million)

Profit before tax (€ million)

Net profit (€ million)

Diluted earnings per share (€)

Underlying earnings per share (€)

53,715

52,713

8,857

9,400

8,153

6,486

2.15

2.24

7,801

8,624

7,469

5,547

1.82

2.03

Turnover increased by 1.9% to €53.7 billion including an unfavourable
currency impact of 2.1% (2016: 5.1% unfavourable currency impact)
mainly due to strengthening of the euro. Underlying sales growth was
3.1% (2016: 3.7%), with a positive contribution from all categories.
Underlying volume growth was 0.8% (2016: 0.9%) and underlying
price growth was 2.3% (2016: 2.8%). Acquisitions and disposals had
a favourable contribution of 0.9% (2016: 0.6%) reflecting acquisitions
including Blueair, Living Proof and Carver Korea. Emerging markets
contributed 58% of total turnover (2016: 57%) with underlying sales
growth of 5.9% (2016: 6.5%) coming from price growth of 4.2% and
volume growth of 1.6%. Developed markets underlying sales declined
by 0.6% evenly balanced between price and volume.

Underlying operating margin improved by 1.1 percentage points to
17.5%. Gross margin improved by 0.4 percentage points driven by
positive mix and the roll-out of the ‘5-S’ savings programme that more
than offset increases in commodity costs. The absolute level of brand
and marketing investment was flat in local currencies versus 2016,
as savings from advertising production were re-invested in increased
media spend. As a percentage of turnover, brand and marketing
investment was down by 0.6 percentage points. Overheads reduced by
0.1 percentage points, driven by a further reduction in the cost base
partially offset by investment in capabilities including new business
models and e-commerce.

Operating profit was up 13.5% to €8.9 billion (2016: €7.8 billion)
including €543 million of non-underlying items. Non-underlying items
within operating profit are €638 million restructuring costs, acquisition
and disposal-related costs of €159 million and one-off costs of €80
million partly offset by gain on disposal of group companies of €334
million.

Net finance costs increased by €314 million to €877 million (2016:
€563 million) as they included a one-off finance charge of €382 million
relating to the book premium paid on the buyback of preference shares
in Unilever N.V. The net cost of financing borrowings was €399 million,
€70 million lower than 2016. The decrease was due to a lower average
interest rate of 2.7% compared to 3.5% in 2016, and to lower other
interest costs from one-off credits in Brazil. Pension financing was a
charge of €96 million compared to €94 million in 2016.

163

Additional Information for US Listing PurposesAnnual Report on Form 20-F 2018ADDITIONAL INFORMATION FOR US LISTING PURPOSES CONTINUED

BEAUTY & PERSONAL CARE

HOME CARE

2017

2016 % change

2017

2016 % change

Turnover (€ million)

20,697

20,172

Operating profit (€ million)

Underlying operating profit (€ million)

Operating margin (%)

Underlying operating margin (%)

Underlying sales growth (%)

Underlying volume growth (%)

Underlying price growth (%)

4,103

4,375

19.8

21.1

2.9

1.4

1.5

3,704

4,033

18.4

20.0

4.2

1.6

2.6

10.8

8.5

1.4

1.1

Turnover (€ million)

10,574

10,009

Operating profit (€ million)

Underlying operating profit (€ million)

Operating margin (%)

Underlying operating margin (%)

Underlying sales growth (%)

Underlying volume growth (%)

Underlying price growth (%)

1,138

1,288

10.8

12.2

4.4

2.1

2.3

949

1,086

9.5

10.9

4.9

1.3

3.6

5.6

19.9

18.6

1.3

KEY DEVELOPMENTS
• Turnover grew 5.6% including a negative currency impact of 1.7%.
Underlying sales growth was 4.4% coming from volume growth
of 2.1% and price growth of 2.3%. Acquisitions and disposals
contributed a favourable 2.9%. The roll-outs of Surf into Central
and Eastern Europe and Omo into Iran performed well. In laundry,
growth was driven by strong performances of the fabric conditioner
Comfort in Asia and Europe, and the value brand Brilhante in Latin
America. In 2017, the portfolio benefited from the acquisition of EAC
Myanmar.

• The acquisition of Seventh Generation in 2016 with its natural

proposition performed well and started to contribute to underlying
sales growth towards the end of the year.

• Underlying operating profit increased by €202 million including a
€56 million adverse contribution from exchange rate movements.
Underlying operating margin added €141 million and underlying
sales growth contributed €48 million. Acquisition and disposal
related activities contributed €70 million. Underlying operating
margin improvement reflects strong delivery of the 5-S programme
and zero-based budgeting.

KEY DEVELOPMENTS
• Turnover growth of 2.6% included a negative currency impact of

1.9%. Acquisitions and disposals contributed 1.7% and underlying
sales growth was 2.9%. Beauty & Personal Care benefited from a
strong set of innovations that included five new brand launches. The
portfolio continued to grow organically and through acquisitions in
attractive segments and channels. Acquisitions of 2017 included
Living Proof, Hourglass, Carver Korea, Sundial Brands and
Schmidt’s Naturals. Previous acquisitions of Dollar Shave Club
and Kate Somerville grew in double digits, while Dermalogica grew
5%. Growth was negatively impacted by difficult market conditions
particularly in Brazil and Indonesia. Skin cleansing delivered good
growth helped by Dove shower foam, and Baby Dove which was
rolled-out to 26 countries. In hair care, the global expansion into
natural propositions contributed to volume-led growth.

• Underlying operating profit increased by €342 million. Underlying

operating margin and underlying sales growth improvement added
€237 million and €116 million respectively, offset by a €11 million
adverse impact from exchange rate movements. Acquisition and
disposal related activities had no net impact. Underlying operating
margin improvement was principally driven by higher gross margins
and brand and marketing efficiencies from zero based budgeting.

FOODS & REFRESHMENT

2017

2016 % change

Turnover (€ million)

22,444

22,532

Operating profit (€ million)

Underlying operating profit (€ million)

Operating margin (%)

Underlying operating margin (%)

Underlying sales growth (%)

Underlying volume growth (%)

Underlying price growth (%)

3,616

3,737

16.1

16.7

2.7

(0.2)

3.0

3,148

3,505

14.0

15.6

2.7

0.1

2.6

(0.4)

14.8

6.6

2.1

0.3

KEY DEVELOPMENTS
• Turnover declined by 0.4% including an adverse currency impact

of 2.4%. Underlying sales growth was 2.7% after an adverse effect
from a 2.4% underlying sales decline of the spreads business which
was divested in 2018. The division continued to modernise the
portfolio through innovations and acquisitions such as Mae Terra.
Innovations behind premium ice cream brands performed well,
including Magnum pints that deliver the ultimate chocolate and ice
cream experience in a tub. T2 continued to show double-digit growth
while Pure Leaf was introduced to Canada and the United Kingdom
after successful launch in the United States.

• Underlying operating profit was €232 million higher, mainly from
underlying operating margin improvement, which contributed
€242 million. Underlying sales growth added €80 million, while
acquisition and disposal related activities and exchange rate
movements had a negative impact of €23 million and €67 million
respectively. Underlying operating margin was up primarily due to
gross margin improvement and efficiencies in brand and marketing
investment and overheads.

164

Additional Information for US Listing PurposesAnnual Report on Form 20-F 2018FINANCE AND LIQUIDITY
Approximately €1.0 billion (or 31%) of the Group’s cash and cash
equivalents were held in the parent and central finance companies, for
ensuring maximum flexibility. These companies provide loans to our
subsidiaries that are also funded through retained earnings and third
party borrowings. We maintain access to global debt markets through
an infrastructure of short and long-term debt programmes. We make
use of plain vanilla derivatives, such as interest rate swaps and foreign
exchange contracts, to help mitigate risks.

The remaining €2.3 billion (69%) of the Group’s cash and cash
equivalents were held in foreign subsidiaries which repatriate
distributable reserves on a regular basis. For most countries, this is
done through dividends free of tax. This balance included €206 million
(2016: €240 million, 2015: €284 million) of cash that was held in a
few countries where we face cross-border foreign exchange controls
and/or other legal restrictions that inhibit our ability to make these
balances available in any means for general use by the wider business.
The cash is generally invested or held in the relevant country and,
given the other capital resources available to the Group, does not
significantly affect the ability of the Group to meet its cash obligations.

We closely monitor all our exposures and counter-party limits.
Unilever has committed credit facilities in place for general corporate
purposes. The undrawn bilateral committed credit facilities in place
on 31 December 2017 were $7,865 million. In addition, Unilever had
undrawn revolving 364-day bilateral credit facilities in aggregate of
€4,000 million.

NON-GAAP MEASURES

UNDERLYING SALES GROWTH (USG)
The reconciliation of USG to changes in the GAAP measure turnover
is as follows:

TOTAL GROUP

Turnover growth (%)(a)

Effect of acquisitions (%)

Effect of disposals (%)
Effect of exchange rates (%)(b)
Underlying sales growth (%)(b)

BEAUTY & PERSONAL CARE

Turnover growth (%)(a)

Effect of acquisitions (%)

Effect of disposals (%)

Effect of exchange rates (%)

Underlying sales growth (%)

FOODS & REFRESHMENT

Turnover growth (%)(a)

Effect of acquisitions (%)

Effect of disposals (%)

Effect of exchange rates (%)

Underlying sales growth (%)

HOME CARE

Turnover growth (%)(a)

Effect of acquisitions (%)

Effect of disposals (%)

Effect of exchange rates (%)

Underlying sales growth (%)

2017
vs 2016

2016
vs 2015

1.9

1.3

(0.4)

(2.1)

3.1

(1.0)

0.8

(0.2)

(5.1)

3.7

2017
vs 2016

2016
vs 2015

2.6

1.8

(0.1)

(1.9)

2.9

0.5

1.7

(0.3)

(4.9)

4.2

2017
vs 2016

2016
vs 2015

(0.4)

0.2

(0.8)

(2.4)

2.7

(2.2)

0.1

(0.2)

(4.7)

2.7

2017
vs 2016

2016
vs 2015

5.6

3.1

(0.2)

(1.7)

4.4

(1.5)

0.6

(0.2)

(6.5)

4.9

UNDERLYING VOLUME GROWTH
The relationship between UVG and USG is set out below:

Underlying volume growth (%)

Underlying price growth (%)

Underlying sales growth (%)

2017
vs 2016

2016
vs 2015

0.8

2.3

3.1

0.9

2.8

3.7

UNDERLYING EFFECTIVE TAX RATE
The reconciliation of taxation to taxation before tax impact of non-
underlying items is as follows:

Taxation

Tax impact of:

Non-underlying items within operating profit

Non-underlying items not in operating profit

but within net profit

Taxation before tax impact of
non-underlying items

Profit before taxation

Non-underlying items within operating profit
before tax

Non-underlying items not in operating profit
but within Net profit before tax

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

Profit before tax excluding non-underlying
items before tax and share of net profit/
(loss) of joint ventures and associates

Underlying effective tax rate

€ million
2017

€ million
2016

1,667

1,922

578

213

–

2,322

8,153

2,135

7,469

543

382

823

–

(155)

(127)

8,923

8,165

26.0%

26.1%

CONSTANT UNDERLYING EARNINGS PER SHARE
The reconciliation of underlying profit attributable to shareholders’
equity to constant underlying earnings attributable to shareholders’
equity and the calculation of constant underlying EPS is as follows:

Underlying profit attributable to shareholders'
equity

Impact of translation from current to constant
exchange rates and translational hedges

Impact of Q4 Venezuela price inflation

Constant underlying earnings attributable to
shareholders' equity

Diluted combined average number of share
units (millions of units)

Constant underlying EPS (€)

€ million
2017

€ million
2016

6,315

5,785

310

(153)

128

–

6,472

5,913

2,814.0

2,853.9

2.30

2.07(a)(b)

(a) Represents 2016 underlying EPS as adjusted for translational hedges and the
impact of translation of earnings using annual average 2016 exchange rates

(b) From 2018, in our reporting of growth in constant underlying EPS, we

translate the prior period using an annual average exchange rate rather than
monthly averages. This change has been made to align with the prior period
constant exchange rate used for calculating USG. The impact of this is €0.00
per share in 2016 constant underlying EPS.

165

Additional Information for US Listing PurposesAnnual Report on Form 20-F 2018ADDITIONAL INFORMATION FOR US LISTING PURPOSES CONTINUED

FREE CASH FLOW (FCF)
The reconciliation of FCF to net profit is as follows:

Net profit

Taxation

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

Net finance costs

€ million
2017

€ million
2016

6,486

1,667

(173)

877

5,547

1,922

(231)

563

Depreciation, amortisation and impairment

1,538

1,464

Changes in working capital

Pensions and similar obligations less payments

Provisions less payments

Elimination of (profits)/losses on disposals

Non-cash charge for share-based
compensation

Other adjustments

Cash flow from operating activities

Income tax paid

Net capital expenditure

Net interest and preference dividends paid

Free cash flow

Net cash flow (used in)/from investing activities

Net cash flow (used in)/from financing activities

(68)

(904)

200

(298)

284

(153)

9,456

(2,164)

(1,621)

(316)

5,355

(5,879)

(1,433)

(327)

127

198

(81)

9,298

(2,251)

(1,878)

(367)

4,802

(3,188)

(3,073)

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

Total financial liabilities

Current financial liabilities

Non-current financial liabilities

€ million
2017

€ million
2016

(24,430)

(16,595)

(7,968)

(5,450)

(16,462)

(11,145)

Cash and cash equivalents as per balance sheet

3,317

3,382

2016 ACQUISITIONS AND DISPOSALS
On 31 March 2016 the Group sold the bread and bakery business under
the brand ‘Modern’ in India to Nimman Foods Private Limited, part of
the Everstone Group.

On 7 April 2016 the Group acquired Indulekha and Vayodha brands
from Mosons Group.

On 6 May 2016 the Group sold local Alberto Culver brands Antiall,
Farmaco, Veritas, the rights for VO5 in Argentina and a manufacturing
plant to Santiago Saenz.

On 31 July 2016 the Group sold the Rice Exports business in India to LT
Foods Middle East DMCC, a Group company of LT Foods Limited.

On 10 August 2016 the Group acquired Dollar Shave Club, a
subscription-based direct-to-consumer male grooming business.

On 20 October 2016 the Group acquired Seventh Generation, a North
American home and personal care eco-friendly naturals business.

1 December 2016 the Group acquired Blueair, a supplier of innovative
mobile indoor air purification technologies and solutions.

FINANCIAL INSTRUMENTS AND RISK
The key financial instruments used by Unilever are short-term and
long-term borrowings, cash and cash equivalents, and certain plain
vanilla derivative instruments, principally comprising interest rate
swaps and foreign exchange contracts. Treasury processes are
governed by standards approved by the Unilever Leadership Executive.
Unilever manages a variety of market risks, including the effects of
changes in foreign exchange rates, interest rates, commodity costs
and liquidity.

OUTLOOK
Looking forward, our priority is to accelerate quality growth. That
means an investment-led approach based on delivering our 4G growth
strategy – consistent growth, competitive growth, profitable growth and
responsible growth, with an equal focus on each. In 2019 we expect
market conditions to remain challenging. We anticipate underlying
sales growth will be in the lower half of our multi-year 3-5% range,
with continued improvement in underlying operating margin and
another year of strong free cash flow. We remain on track for our 2020
goals.

3,169

3,198

OTHER INFORMATION ON THE COMPANY

Cash and cash equivalents as per cash flow
statement

Bank overdrafts deducted therein

Less cash and cash equivalents held for sale

Current financial assets

Net debt

167

(19)

770

184

–

599

(20,343)

(12,614)

UNDERLYING OPERATING PROFIT AND UNDERLYING
OPERATING MARGIN
The reconciliation of underlying operating profit to operating profit
is as follows:

Operating profit

Non-underlying items within operating profit

Underlying operating profit

Turnover

Operating margin

Underlying operating margin

€ million
2017

€ million
2016

8,857

543

9,400

7,801

823

8,624

53,715

52,713

16.5%

17.5%

14.8%

16.4%

166

RAW MATERIALS
Our products use a wide variety of raw and packaging materials which
we source internationally and which may be subject to price volatility
either directly or as a result of movements in foreign exchange rates.
In 2018 we saw higher market inflation than in 2017 with price rises in
crude-derived materials including plastic packaging and surfactants.
Foreign exchange rates deteriorated over the second half of the
year across most emerging markets, with significant impact from
Argentina, India, Brazil and Turkey. Looking ahead to 2019 we remain
watchful for volatility in commodity and foreign exchange markets.

SEASONALITY
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 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.

Additional Information for US Listing PurposesAnnual Report on Form 20-F 2018PROPERTY, PLANT AND EQUIPMENT
We have interests in properties in most of the countries where there
are Unilever operations. However, none are 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.

COMPETITION
As a fast-moving consumer goods (FMCG) 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 2018, sales
in Iran were significantly less than one percent of Unilever’s worldwide
turnover. During the year, this non-US subsidiary had approximately
€1,528 in gross revenues and less than €382 in net profits attributable
to the sale of food, personal care and home care products to the Hotel
Homa Group, which is owned by the Social Security Organization of
Iran, and IRR Mohammad Rasoullah Pharmacy, which is affiliated with
the Islamic Revolutionary Guard Corps. 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 with various banks 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 we plan to
continue these activities.

167

Additional Information for US Listing PurposesAnnual Report on Form 20-F 2018NOTES

168

NotesAnnual Report on Form 20-F 2018CAUTIONARY 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 Unilever Group (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. Among other risks and uncertainties, the material or principal
factors which could cause actual results to 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 including to plastic packaging; the effect of climate change on Unilever’s business; significant changes or deterioration in
customer relationships; the recruitment and retention of talented employees; disruptions in our supply chain and distribution; increases or
volatility in the cost of raw materials and commodities; the production of safe and high quality products; secure and reliable IT infrastructure;
execution of acquisitions, divestitures and business transformation projects; economic, social and political risks and natural disasters; financial
risks; failure to meet high and ethical standards; and managing regulatory, tax and legal matters.

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.

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 Unilever Annual Report and Accounts 2018.

This document is not prepared in accordance with US GAAP and should not therefore be relied upon by readers as such.

In addition, a printed copy of the Annual Report on Form 20-F 2018 is available, free of charge, upon request to Unilever, Investor Relations
Department, 100 Victoria Embankment, London EC4Y 0DY, United Kingdom.

This document comprises regulated information within the meaning of Sections 1:1 and 5:25c of the Act on Financial Supervision (‘Wet op het
financieel toezicht (Wft)’) in the Netherlands.

The brand names shown in this report are trademarks owned by or licensed to companies within the Group.

References in this document to information on websites (and/or social media sites) are included as an aid to their location and such information
is not incorporated in, and does not form part of, the Annual Report on Form 20-F 2018.

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