Unilever Annual Report 2021

FY2021 Annual Report · Unilever

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This is a PDF version of the Unilever Annual Report and Accounts 2021 and is an exact
copy of the printed document provided to Unilever’s shareholders.

The Annual Report and Accounts 2021 was filed with the National Storage
Mechanism and the Dutch Authority for the Financial Markets in European Single
Electronic Format, including a human readable XHMTL version of the Annual Report
and Accounts 2021 (the ESEF Format). The Annual Report and Accounts 2021 in ESEF
Format is also available on Unilever’s website at www.unilever.com. Only the Annual
Report and Accounts 2021 in ESEF Format is the official version for purposes of the
ESEF Regulation.

Certain sections of the Unilever Annual Report and Accounts 2021 have been audited.
These are on pages 114 to 166, and those parts noted as audited within the Directors’
Remuneration Report on pages 84 to 104.

The maintenance and integrity of the Unilever website is the responsibility of the
Directors; 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
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and dissemination of financial statements may differ from legislation in other
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The information is given as of the dates specified, is not updated, and any forward-
looking statements are made subject to the reservations specified in the cautionary
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Unilever accepts no responsibility for any information on other websites that may be
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Purpose-led,
future-fit

Unilever Annual Report
and Accounts 2021

Making sustainable living commonplace

We make household brands used by
3.4 billion consumers every day.

We are 148,000 people working in factories,
labs, offices and homes around the world.

We are determined to prove that our
purpose-led, future-fit business model
delivers superior performance.

We are Unilever.

In this report

Strategic Report

Pages 2-13
Introducing Unilever

At a glance

Chair's introduction

Chief Executive Officer's review

Our strategy

Our business model

Governance Report

Pages 67-104
Running a responsible
and effective business

Pages 14-66
Review of the year

Shareholders

Our people

Consumers

Customers

Suppliers & business partners

Planet & society

Our performance

Financial review

Our risks

Additional non-financial information

- Climate change disclosures

- Other non-financial disclosures

Financial Statements

Pages 105-198
Our full financial results
and notes for the year

Corporate governance

Report of the Audit Committee

106

107

Statement of Directors' responsibilities

Independent Auditor's Report

Report of the Corporate Responsibility Committee

114 Consolidated financial statements

Report of the Nominating and Corporate
Governance Committee

118 Notes to the consolidated financial statements

167 Unilever PLC Company Accounts and notes

Directors' Remuneration Report

176 Group Companies

187

Shareholder information

188 Additional Information for US Listing Purposes

Online

About this Annual Report

You can find more information about Unilever online at

www.unilever.com

The Unilever Annual Report and Accounts 2021 (and the
Additional Information for US Listing Purposes) along with
other relevant documents can be downloaded at

www.unilever.com/ara2021/downloads

For more on our sustainability commitments

www.unilever.com/planet-and-society

Unilever Annual Report and
Accounts 2021
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 PLC (PLC) together with the companies
it controls. The terms 'Unilever', the 'Group', 'we', 'our' and 'us' refer to the Unilever
Group.

Our Strategic Report on pages 2 to 66, 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 2021. The Strategic Report has been approved by the Board and signed on
its behalf by Ritva Sotamaa – Group Secretary.

Our Governance Report on pages 67 to 104 contains detailed corporate governance
information, our Committee reports and how we remunerate our Directors.

Our Financial Statements and Notes are on pages 105 to 175.

Pages 1 to 187 constitute the Unilever Annual Report and Accounts 2021, which we
may also refer to as ‘this Annual Report and Accounts' throughout this document.

The Directors' Report of PLC on pages 67 to 83, 106 (Statement of Directors'
responsibilities), 136 (Dividends on ordinary capital), 149 to 155 (Treasury Risk
Management), 175 (Post balance sheet events) and 186 (Branch disclosure) has
been approved by the PLC Board and signed on its behalf by Ritva Sotamaa – Group
Secretary.

Pages 188 to 198 are included as Additional Information for US Listing Purposes.

STRATEGIC REPORT – INTRODUCING UNILEVERUnilever Annual Report and Accounts 20212

At a glance

Strong brands with purpose
Our 400+ brands are on a mission to offer superior
products while doing good for people and planet
13 brands with turnover of over €1bn in 2021
13 of the top 50 consumer goods brands(b)

Read more about our brands and consumers on pages 20 to 24

A truly global business
Our brands are available in around 190 countries
3.4bn people use our products every day(a)
58% of turnover in emerging markets

Powered by our people
Our purposeful and inclusive culture attracts the
best talent in our markets
52/48 gender balance management
(female/male)(c)
148,000 employees
92% of our leaders in markets are local(d)

Read more about our people on pages 18 to 19

Using our scale for good
Our leading sustainability agenda is delivering significant impact
64% reduction in Scope 1 and 2 GHG emissions since 2015
53% of our plastic packaging is reusable, recyclable or compostable
€445m spend with diverse businesses owned by under-
represented groups

Read more about planet & society on pages 29 to 31

(a) Based on a Europanel 2021 project (in partnership with Kantar & GfK). Includes consumers who use

at least one Unilever product every day.

(b) Based on market penetration and consumer interactions (Kantar Brand Footprint report 2021).
(c) Based on a total management population of 16,787 Unilever employees.
(d) Leaders defined as all managers up to senior management reporting to ULE.

Unilever Annual Report and Accounts 20213

Foods & Refreshment
Turnover €20.0bn
What we stand for:

To be a world-class force for good in food

Our largest categories:

Ice cream, Savoury, Dressings, Tea

Beauty & Personal Care
Turnover €21.9bn
What we stand for:

To be the most positive beauty business
in the world for people and the planet

Our largest categories:

Skin cleansing, Hair care, Deodorants,
Skin care

Home Care
Turnover €10.6bn
What we stand for:

Making people's homes a better world,
and our world a better home

Our largest categories:

Fabric solutions, Home and hygiene

Read more about our Divisions on pages 20 to 24

2021 financial highlights

Turnover

€52.4bn

2020: €50.7bn

Underlying
sales growth(a)

4.5%

2020: 1.9%

Operating margin

16.6%

2020: 16.4%

Underlying
operating margin(a)

18.4%

2020: 18.5%

Dividends paid

€4.5bn

2020: €4.3bn

Free cash flow(a)

€6.4bn

2020: €7.7bn

For more detail, see our Financial review on pages 36 to 43
(a) Underlying sales 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 pages 39
to 43.

STRATEGIC REPORT – INTRODUCING UNILEVERUnilever Annual Report and Accounts 2021
of Unilever’s Tea business, for €4.5 billion, which is expected
to complete in the second half of 2022. Selective disposals of
brands and assets will continue to play a role going forwards.

The Board also expects the new organisation to support
growth over the coming years. Having reviewed the changes,
the Board is confident they will help make Unilever a simpler,
faster and more accountable business, and at lower cost.

Board composition and succession

During the year, the Board appointed Adrian Hennah and
Ruby Lu as independent Non-Executive Directors, both
appointments took effect from 1 November 2021. Adrian joined
the Board after a long and successful executive career, most
recently in the consumer goods sector. Adrian’s extensive
financial experience, gained from CFO positions with leading
UK-based businesses, together with his deep industry
knowledge, is a major asset to the Board. The Board will also
benefit enormously from Ruby Lu’s appointment. Ruby is a
venture capitalist with a long and successful track record of
investing in start-up businesses in China and the US, markets
she knows very well.

Following the 2021 AGM, Youngme Moon stood down from
her role as Senior Independent Director (SID). I want to thank
Youngme for the valuable contribution she made in that role.
Equally, I am delighted that Andrea Jung was appointed to
succeed Youngme as SID. Andrea also took over as Chair
of the Compensation Committee, in February 2021, when
Vittorio Colao stepped down from the Board to join the Italian
government as Minister for Technological Innovation and
Digital Transition.

Chair's introduction

Performance

Unilever’s operating performance improved in 2021, with the
company recording its fastest year-on-year underlying sales
growth for nine years, at 4.5%. Underlying operating profit
also increased, by 2.9%. This represented a good outcome in
what were unusually difficult trading conditions. Spiralling
cost inflation presented the biggest challenge and impacted
underlying operating margin, which was down 10bps,
although the company’s determined response in landing
customer price increases certainly helped to limit the impact.
This ability to raise prices in a tough, inflationary environment
is testament to the strength and quality of Unilever’s brands.

Unilever’s business is benefiting from the focus and investment
being put behind its five Compass strategic choices – see
pages 8 to 9. The Board was particularly encouraged to see
Unilever’s top 13 brands – each with a turnover in excess of
€1 billion – grow in aggregate last year by 6.4%, well above the
company average. These brands account for 50% of Unilever’s
total turnover. The focus behind key long-term growth markets
is also driving improved results, with strong performances last
year in the US, India and China. Together, these markets now
represent 36% of Unilever’s turnover.

The good operating performance in 2021 was the main driver
of earnings growth, with earnings per share (EPS) up by 5.5%.

Following the completion of the programme to buy back
shares with an aggregate market value equivalent to
€3 billion, the company announced a further €3 billion
programme of share buybacks, which we expect to see
completed over 2022 and 2023.

Portfolio

The Board is convinced that the continued evolution of
Unilever’s portfolio into higher growth spaces is key to
accelerating the company’s long-term growth profile and
in delivering enhanced value to shareholders. To that end,
unifying the Group’s legal structure in 2020 was an important
milestone in allowing the Board to consider a wider range
of strategic options, including scope for larger and more
transformative acquisitions.

It was in this context that the Board viewed a possible
acquisition of GSK Consumer Health as one route to
accelerate Unilever’s presence in a very attractive part of the
market. However, while there was some recognition among
shareholders of the strategic merits of pursuing such a move,
many voiced their strong opposition to the size and timing
of such a deal. Consequently, and having listened closely to
shareholder concerns, the Board and management of the
company have made clear that we do not intend to pursue
similar large-scale acquisitions in the foreseeable future.

Instead, the focus will be on improving Unilever’s value
creation through accelerated organic growth – driven by
the five Compass strategic choices. We will also continue
to strengthen the portfolio through the kind of bolt-on
acquisitions that have enabled Unilever to build fast-growing
businesses in Prestige beauty and Functional nutrition. As part
of strengthening the portfolio, last year we announced the sale

Unilever Annual Report and Accounts 20215

Further detail on the evaluation process this year, together
with the Board’s remit, operations and the topics regularly
discussed by the Board can be found in the Governance
section on pages 67 to 83.

Remuneration

During 2021, we continued to consult with shareholders on
our Remuneration Policy and were pleased at the 2021 AGM to
receive your strong support for the implementation of a reward
framework based on a new Performance Share Plan, delinked
from the annual bonus. The new Policy seeks to improve the
overall effectiveness of Unilever’s incentives by helping drive
sustainable long-term growth and enabling the Compensation
Committee to set stretching but achievable performance
targets over realistic timeframes. Further information on the
Policy can be found on page 84.

Looking ahead

Trading conditions will undoubtedly be challenging
throughout 2022 as the world continues to come through
the effects of the Covid pandemic and all the consequent
economic aftershocks – and in particular, extraordinarily high
levels of cost inflation. Unilever is well prepared to meet these
challenges through a combination of customer prices and the
delivery of cost savings, which will help to mitigate inflationary
impacts on the business. Moreover, the company enters 2022
with good momentum, and with a clear set of strategic choices
that the Board is confident will help deliver another positive
year of top-line growth for Unilever.

Against a particularly challenging backdrop, Unilever
delivered a good set of results for 2021. This could not have
been achieved without the efforts of the 148,000 people
who make up this great company, some of whom it was
a privilege to spend time with over the last year, albeit in
most cases virtually. Their hard work, ingenuity and integrity
have once again shone through and on behalf of the
Board, I want to thank them for everything they have done,
and continue to do, for Unilever. I also want to thank and
acknowledge our shareholders and other stakeholders for
their continued support.

Section 172 statement

Under Section 172 of the UK Companies Act 2006 (‘Section
172’) directors must act in the way that they consider, in
good faith, would be most likely to promote the success of
their company. In doing so, our Directors must have regard
to stakeholders and the other matters set out in Section 172.
Pages 63 and 69 to 71 comprise our Section 172 statement.
Page 63 of our Strategic Report identifies our key stakeholders
and provides examples of how the business engaged them
during 2021, with cross references to the stakeholder review
section for more detail. Pages 69 to 71 of our Governance
Report details how our Directors have taken steps to
understand the needs and priorities of these stakeholders
when setting Unilever’s strategy and taking decisions
concerning the business, including by direct engagement or
via their delegated committees and forums. The relevance of
each stakeholder group may vary depending on the matter
at hand.

"Unilever’s business is
undoubtedly benefiting
from the focus and
investment being put
behind its five Compass
strategic choices."

Nils Andersen
Chair

The 2022 AGM will mark the retirement of both Laura Cha and
John Rishton as Non-Executive Directors having both served for
nine years. On behalf of the Board, I would like to thank them
for their much-valued contribution to Unilever.

Corporate Governance

Tackling climate change is a key priority for the Group and
we were pleased to put our Climate Transition Action Plan
(CTAP) to shareholders for an advisory vote at the 2021 AGM.
The plan sets out our climate strategy, defines our net zero
and emission reduction goals, and sets out the actions we
intend to take to meet them. The plan also describes how the
company is integrating climate change considerations into its
products and brands, as well as the role that advocacy and
partnership can play in meeting goals. This was the first time a
global company of our size voluntarily put its climate transition
plans before a shareholder vote, and we were delighted
to see it receive overwhelming backing, with over 99% of
shareholders voting in favour. Work remains to be done but we
do believe that the CTAP can help Unilever make an important
contribution to tackling climate change while growing our
brands. Read more about our progress in the CTAP Progress
Report on pages 51 to 56.

Regular Board evaluation is an important element in
maintaining high standards of corporate governance and
Board effectiveness. In 2021, the Board conducted a thorough
internal evaluation exercise. The results, which were reviewed
at the November 2021 Board meeting, confirmed that the
Board continues to perform effectively and with a high degree
of Director engagement.

In addition to our six planned Board meetings, three
additional meetings were held in 2021 to consider the Group’s
portfolio and the growth opportunities within it. Non-Executive
Directors also attended 14 virtual employee engagement
events during the year across a wide range of the workforce.
In addition, Andrea Jung attended a global town hall webcast
in July 2021, providing an opportunity for all employees to
engage with one of our Board members.

The evaluation and Board engagements also re-affirmed the
Board’s focus on growth and portfolio strategy evolution as
keys to unlocking value in Unilever.

STRATEGIC REPORT – INTRODUCING UNILEVERUnilever Annual Report and Accounts 20216

Chief Executive Officer's review

Context

Our five strategic choices

2021 was another turbulent year for the world economy and
for global markets. Output rebounded strongly, if unevenly,
after the sharp Covid-related declines of 2020. However,
surging demand, triggered by significant fiscal and monetary
stimulus, gave rise to widespread labour shortages, supply
bottlenecks and soaring energy costs, stoking significant
inflationary pressures.

For Unilever, this steep rise in input cost inflation was one
of the defining features of the year, impacting each of our
product categories.

Performance 2021

Against this challenging backdrop, we delivered a strong set
of results in 2021. Underlying sales growth of 4.5% represented
Unilever’s fastest year-on-year growth in nine years, well
into the upper end of our 3-5% multi-year framework. We
responded to rising input costs with pricing actions, delivering
underlying price growth of 2.9% for the year. While never easy,
raising customer prices in response to inflationary pressures is
vital and necessary if we are to preserve our ability to invest in
Unilever’s brands. Underlying volume growth for the full year
was 1.6%.

Growth was broad-based, with each of our three global
Divisions – Beauty & Personal Care, Foods & Refreshment and
Home Care – performing well. Growth was also competitive. We
ended the year with 53% of the business winning market share
by value, a second consecutive year of competitive growth and
a marked improvement in our competitive performance from
just a few years ago.

While top-line growth remains the number one priority, margin
progression is also an important component of value creation.
Underlying operating margin for the year was 18.4%, down
10bps on the previous year. Although pricing stepped up, it
wasn’t enough to fully offset the impact of inflation across our
raw materials, packaging and distribution costs.

Free Cash Flow remained strong at €6.4 billion, albeit down
year-on-year versus a record delivery in 2020, when the
business was focused on delivering cash in a period of huge
uncertainty. For 2021, we declared a 3% increase to the full-
year dividend, taking the dividend for the year to €4.5 billion.

Overall, we made good progress in 2021. Unilever’s growth
momentum is building. We stepped up pricing significantly
in a heavily inflationary environment while delivering strong
earnings and maintaining our restored competitiveness.

"We made good progress
in 2021 and our growth
momentum is building."

Alan Jope
Chief Executive Officer

One of the most encouraging aspects of our growth in 2021
was the extent to which it followed the five Compass strategic
choices we called out a year ago. These choices sit at the heart
of our strategy for value creation – see pages 8 to 9.

The first of these is winning with brands and innovation,
ensuring that our top brands deliver superior performance.
Today, we have 13 brands with sales in excess of €1 billion.
Together they make up over half of our total turnover. Last
year, they grew in aggregate by 6.4%. This included some
particularly strong individual performances. Dove, for
example, grew by 8%, its best performance in eight years;
Hellmann’s grew 11%; and our Ice Cream brands Magnum and
Ben & Jerry’s each grew 7%.

Behind the success of these brands is product superiority and
great innovation and we continue to step up our performance
in both areas. Product superiority in tests versus Unilever’s
competition is now over 70% of tested turnover, up from less
than 50% in 2019, and our focus on driving bigger, better
and more impactful innovation delivered over €1 billion of
incremental turnover in 2021, double the delivery in 2020.

It is no surprise or coincidence that our top-performing brands
also happen to be those with the most clearly defined – and
powerfully articulated – commitment to purpose as a driver
of brand growth.

As well as focusing on winning with our biggest and strongest
brands, we have also chosen to prioritise investment in the key
growth markets for the future, including most notably the US,
India and China.

All three countries delivered strong and competitive growth in
2021. The US, for example, grew almost 4% on top of a record
growth year in 2020, while India and China grew well into
double-digits, albeit against weaker comparators.

Other markets also performed well, but not all. Indonesia, for
example, a key geography for Unilever, struggled last year and
was down by 7.4%. We are fully focused on restoring growth in
this, our sixth-largest market.

Our next strategic choice is to invest in the capabilities needed
to lead in channels of the future. Today, that means winning
in eCommerce, and in 2021 we delivered another strong year,
on the back of record growth in 2020. In total, the eCommerce
business was up 44% with growth coming from all the main
sub-channels – pure-play, omnichannel, and business-to-
business (eB2B). In just five years, this channel has gone from
2% of our turnover to 13% in 2021.

Developing Unilever’s portfolio into the higher growth spaces
of Hygiene, Skin care, Prestige beauty, Functional nutrition and
Plant-based foods is another strategic choice. It is also one
that made a meaningful contribution to performance in 2021.
While organic growth is our first priority, acquisitions also play
an important role. Indeed, since 2017, 93% of M&A capital has
gone into either Prestige beauty, Functional nutrition or Skin
care and other areas of Beauty & Personal Care. By contrast,
98% of disposals by turnover were in slower growth food
segments such as Spreads and more recently Tea.

The benefits of this portfolio rotation were very apparent last
year – which including eketerra will be equivalent to 17% of our

Unilever Annual Report and Accounts 20217

of delivering an improvement in underlying operating margin,
having chosen – in the face of spiralling inflation – to continue
investing in advertising, R&D and other long-term drivers
of growth.

We will continue to take this approach in 2022, when we expect
input cost inflation to ratchet up still further. This means that
we expect our underlying operating margin will be down in
2022, although we anticipate that the effect of pricing action
and well-established savings programmes to help reverse this
decline over the course of 2023 and 2024.

Importantly, we have entered 2022 with good growth
momentum and with our biggest brands, our most important
markets, and our priority channel all performing strongly. The
five strategic choices that we have put in place will guide us in
the years ahead, and are having a positive and demonstrable
impact on performance. The introduction of a new operating
model during the year will help accelerate our progress
still further.

Stakeholders

Together with our world-leading brands, our biggest strength
remains the dedication and professionalism of our employees
around the world, plus the millions more who make up
Unilever’s extended family across the value chain. To all of
them, I offer my sincere appreciation for their hard work and
commitment over a year characterised by many challenges but
also a lot of progress.

We remain fully wedded to Unilever’s multi-stakeholder model
and I want to thank all of those with whom we have partnered
over the last year, and all those whose needs and interests
we are committed to serving. We deliberately cite the planet
as one of our stakeholders and in the year of COP26, it was
a source of particular pride to see Unilever – in its words and
actions – living up to its ambitious climate commitments.

Finally, I want to thank and acknowledge our shareholders for
their continued support of our business. We are working hard
to repay that support and are fully focused on delivering long-
term value for shareholders in line with our 4G growth model.

2021 turnover since 2017. Prestige beauty, for example, now a
€1 billion business, grew over 20%. Functional nutrition, which
includes Horlicks in South Asia as well as our largely US-based
Vitamins, Supplements & Minerals (VMS) business, grew 22% in
2021 and now enjoys leadership positions across its portfolio.

Together, Functional nutrition and Prestige beauty contributed
60bps to our underlying sales growth last year.

We will go on building Unilever’s portfolio in this way, while
recognising that not all acquisitions have performed equally
well. Dollar Shave Club, for example, has not delivered in the
way that we had hoped or expected, mainly due to changes in
the economics of the direct-to-consumer model.

In considering the evolution of our portfolio, Consumer
Health and Wellbeing undoubtedly represents an attractive
space. It is also one in which we are increasingly well
positioned. Last year, after a long period of careful review,
the Board concluded that moving Unilever’s portfolio even
more decisively into this area would position the company for
faster growth in the coming decades. This is what lay behind
confidential discussions with GSK and Pfizer about the possible
acquisition of GSK Consumer Health. We listened carefully to
shareholders in the wake of those discussions becoming public
and heard the message that many did not support a deal on
this scale at this time. We remain resolved in the direction of
our portfolio evolution, but we have made clear that we do
not intend to pursue similar large-scale acquisitions in the
foreseeable future.

Instead, we will continue to accelerate Unilever’s growth
through a rigorous focus on organic growth and by continuing
to strengthen the portfolio through bolt-on acquisitions and
selective disposals. Guided by our five Compass strategic
choices, we are fully committed to stepping up the growth
of our existing business.

We will be aided significantly in this process by our fifth
strategic choice – building a purpose-led, future-fit
organisation and growth culture.

Having operated for some time under a relatively heavy
matrix structure, with three global Divisions and 15 regional
performance management units, we are now modernising
Unilever’s organisation with the introduction – from 1 July 2022
– of five Business Groups with full, end-to-end responsibility for
setting strategy and for delivering results.

The five Business Groups – Beauty and Wellbeing; Personal
Care; Home Care; Nutrition; and Ice Cream – will have the
power to drive performance by responding more quickly
and directly to the consumer and channel dynamics that
are unique to their Business Group. This is a big change for
Unilever, one that we are confident will result in a simpler,
faster and more agile way of operating, with more focused
and expert categories and with greater empowerment and
accountability flowing through the business.

We are alive to the risks of a change management programme
on this scale and have put in place a number of mitigating
measures, including the creation of a well-resourced
Transformation Office to oversee the detailed delivery of the
programme in line with ambitious but achievable timescales.

Outlook – 4G Growth

Our overarching goal remains the delivery of 4G growth –
that is, growth which is consistent, competitive, profitable
and responsible. All four are key to our long-term value
creation model. On profitable growth, in 2021 we fell short

STRATEGIC REPORT – INTRODUCING UNILEVERUnilever Annual Report and Accounts 20218

Our strategy

The Unilever Compass is our strategy to deliver growth that
is consistent, competitive, profitable and responsible.

Our vision is to be the global leader
in sustainable business. We will demonstrate
how our purpose-led, future-fit business
model drives superior performance,
consistently delivering financial results
in the top third of our industry.

Our strategic choices and actions will help us fulfil our purpose and vision

Develop our portfolio into high growth spaces

Hygiene

Skin care

Prestige beauty

Pages 15-16,
20, 24, 37

Pages 15-16,
20-21, 37

Pages 15-16,
21, 36-37

Functional
nutrition
Pages 15-16,
36-37

Plant-based
foods
Pages 15,
22, 37

Win with our brands as a force for good, powered by purpose and innovation

Improve the health
of the planet

Improve people's
health, confidence
and wellbeing

Contribute to a
fairer, more socially
inclusive world

Win with
differentiated science
and technology

Pages 21, 23, 29-30

Pages 20-21, 31

Pages 21, 30

Pages 15, 20-24

Accelerate in USA, India, China and key growth markets

Build further scale in USA,
India and China

Pages 16, 36-37

Leverage emerging
market strength

Pages 16, 36-37

Lead in the channels of the future

Accelerate pure-play and
omnichannel eCommerce
Pages 16, 25-26

Develop eB2B business
platforms
Pages 16, 26

Drive category leadership
through shopper insight
Pages 25-26

Build a purpose-led, future-fit organisation and growth culture

Unlock capacity through
agility and digital
transformation

Be a beacon for diversity,
inclusion and value-based
leadership

Build capability through
lifelong learning

Pages 17-18

Page 19

Unilever Annual Report and Accounts 2021
9

Operational excellence through the 5 Growth Fundamentals

1
Purposeful
brands

2
Improved
penetration

3
Impactful
innovation

4
Design for
channel

5
Fuel for
growth

Our growth creates value through a multi-stakeholder model

Shareholders

See pages 15-17

Our people

See pages 18-19

Consumers

See pages 20-24

Customers

See pages 25-26

Suppliers & business
partners

See pages 27-28

Planet & society

See pages 29-31

Our Multi-year Financial Framework

Competitive
growth

Profit
growth

Cash
generation

Savings

Restructuring
investment

Return on
invested capital

Net debt

STRATEGIC REPORT – INTRODUCING UNILEVERUnilever Annual Report and Accounts 2021
10

Our strategy continued

Our Compass sustainability commitments
will help us deliver our purpose and vision.

Win with our brands as a force for good, powered by purpose and innovation

Improve the health
of the planet

Climate action

Pages 28, 29, 34, 51-56

Net zero emissions
across our value
chain by 2039

Halve greenhouse
gas impact of our
products across the
lifecycle by 2030

Zero emissions in our
operations by 2030

Replace fossil fuel-
derived carbon with
renewable or recycled
carbon in all our cleaning
and laundry product
formulations by 2030

Communicate a carbon
footprint for every
product we sell

Protect and
regenerate nature

Pages 21, 23, 30, 34, 51

Deforestation-free supply
chain in palm oil, paper
and board, tea, soy and
cocoa by 2023

Help protect and
regenerate 1.5 million
hectares of land, forests
and oceans by 2030

100% sustainable
sourcing of our key
agricultural crops

Empower farmers and
smallholders to protect
and regenerate farm
environments

Implement water
stewardship programmes
in 100 locations in water-
stressed areas by 2030

100% of our ingredients
will be biodegradable
by 2030

Supported by our €1 billion Climate & Nature Fund

Improve people’s health,
confidence and wellbeing

Waste-free world

Pages 21-23, 29, 34, 52-53

Positive nutrition
Pages 22, 31, 34-35

€1 billion annual sales
from plant-based meat
and dairy alternatives
by 2025-2027

Double the number
of products sold that
deliver positive nutrition
by 2025

70% of our portfolio
to meet WHO-aligned
nutritional standards
by 2022

95% of packaged ice
cream to contain no
more than 22g total
sugar per serving by 2025

95% of packaged ice
cream to contain no
more than 250 kcal per
serving by 2025

85% of our Foods
portfolio to help
consumers reduce their
salt intake to no more
than 5g per day by 2022

50% virgin plastic
reduction by
2025, including an
absolute reduction
of 100,000 tonnes

25% recycled plastic
by 2025

Collect and process
more plastic than we
sell by 2025

100% reusable,
recyclable or
compostable plastic
packaging by 2025

Halve food waste in our
operations by 2025

Maintain zero non-
hazardous waste to
landfill in our factories

Respect human rights

Respect and promote human rights and the effective implementation of the UN Guiding Principles,
and ensure compliance with our Responsible Sourcing Policy
Pages 28, 31

Unilever Annual Report and Accounts 202111

Win with our brands as a force for good, powered by purpose and innovation

Improve people’s health,

confidence and wellbeing

Contribute to a fairer and
more socially inclusive world

Health and wellbeing
Pages 21, 31, 35

Equity, diversity
and inclusion
Pages 28, 30, 35

Raise living standards

Future of work

Pages 30, 35

Pages 19, 30, 35

Help equip 10 million
young people with
essential skills by 2030

Pioneer new models to
provide our employees
with flexible employment
options by 2030

Reskill or upskill our
employees with future-fit
skills by 2025

Achieve an equitable
and inclusive culture
by eliminating
any bias and
discrimination in our
practices and policies

Ensure that everyone
who directly provides
goods and services to
Unilever will earn at
least a living wage or
income by 2030

Help 5 million small
and medium-sized
enterprises grow their
business by 2025

Take action through
our brands to improve
health and wellbeing
and advance equity
and inclusion, reaching
1 billion people per year
by 2030. We will focus on:

▪ Gender equity
▪ Race and ethnicity equity
▪ Body confidence and

self-esteem

▪ Mental wellbeing
▪ Hand hygiene
▪ Sanitation
▪ Oral health
▪ Skin health and healing

Accelerate diverse
representation at all
levels of leadership

5% of our workforce
to be made up
of people with
disabilities by 2025

Spend €2 billion
annually with
diverse businesses
worldwide by 2025

Increase
representation of
diverse groups in
our advertising

Our responsible business fundamentals

Business
integrity

Safety
at work

Employee
wellbeing

Product safety
and quality

Responsible
innovation

Responsible
advertising and
marketing

Safeguarding
data

Engaging with
stakeholders

Responsible
taxpayer

Committed to
transparency

STRATEGIC REPORT – INTRODUCING UNILEVERUnilever Annual Report and Accounts 2021

Our business model

Building on our relationships and resources, our business model
allows us to create sustained value for our key stakeholders.

What we depend on...

What we do...

Relationships

Purposeful people

Our 148,000 talented people give
their skills and time in Unilever offices,
factories, R&D laboratories and tea
estates – increasingly working in more
flexible and agile ways. Pages 18-19

Trusted suppliers

Around 53,000 supplier partners
in 150 countries source materials
and provide critical services for us.
Pages 27-28

Committed partners

Our relationships with governments,
customers, NGOs and other
organisations around the world help
us to increase our impact. Pages 25-31

Resources

Input materials

We use thousands of tonnes of
agricultural raw materials, packaging
materials and chemicals for our
products. Pages 29-30, 141

Financial resources

Capital from our financial
stakeholders allows us to invest for
the long term. Pages 144-148

Intangible assets

The strength of our 400+ brands, our
R&D capabilities and intellectual
property such as patents and trade
marks set us apart. Pages 136-138, 172

Owned and leased assets

We occupy around 280 factories, 270
offices and 450 logistics warehouses
globally. Pages 138-141

Consumer insights

Innovation

Our marketing and R&D
teams use these insights
plus the best ideas and
thinking from specialists
outside Unilever to develop
our brands and products.
We spent €847 million on
R&D in 2021.

We track changing
consumer sentiment
through our 37 People
Data Centres around the
world, combining social
listening with traditional
consumer research.

Consumer use

3.4 billion people use our
products every day.

Sales

We use many channels
to make our brands
available to consumers
in around 190 countries
wherever and whenever
they shop.

Marketing

We're one of the largest
advertisers globally,
based on media spend.
Our purposeful and
inclusive brands connect
with consumers.

All underpinned by the management of our principal risks Pages 46 to 50

Unilever Annual Report and Accounts 202113

What we do...

The value we create for...

Sourcing

Each year we buy raw
materials and packaging
materials worth €21 billion
to make our products,
as well as €14 billion in
services (including
media) to help
our business run.

Manufacturing

Our factories and third-
party manufacturers
turn materials into the
products we sell.

Logistics

A global network of logistics
warehouses deliver our
products to millions
of retail outlets.

Shareholders

We aim to deliver consistent, competitive,
profitable and responsible growth.

Contributing to
the Sustainable
Development Goals

Pages 15-17

Our people

We aim to reward people fairly for the
work they do, while helping them find
their purpose so they become the best
they can be at Unilever.

Pages 18-19

Consumers

We aim to provide superior-quality
products and purposeful brands that
take action on the issues that matter
to people and planet.

Pages 20-24

Customers

We partner with large and small retailers
around the world to grow our business
and theirs.

Pages 25-26

Suppliers & business partners

We partner with thousands of suppliers
to help innovate our products and
support mutual and sustainable growth.

Pages 27-28

Planet & society

We aim to improve the health of the
planet while contributing to a fairer
and more socially inclusive world.

Pages 29-31

STRATEGIC REPORT – INTRODUCING UNILEVERUnilever Annual Report and Accounts 2021Review of the year
Here we describe the value we created for
our stakeholders in 2021, our performance
and how we’re managing the key risks to
our business.

Review of the year

Shareholders

Our people

Consumers

Customers

Suppliers & business partners

Planet & society

Our performance

Financial review

Our risks

Additional non-financial information

- Climate change disclosures

- Other non-financial disclosures

Shareholders

We're delivering competitive growth by focusing
on our strategic choices.

2021 was an unpredictable and challenging year, with cost
inflation and continued disruption from Covid-19. As Covid
rates spiked and restrictions were imposed and then eased in
different countries at different times, we worked to manage
disruption to our supply chains, building on our experience
from 2020.

Our performance in 2021

We delivered underlying sales growth of 4.5% in 2021. Our
growth was broad-based, with all three Divisions growing. We
achieved this while maintaining our competitiveness with 53%
of our business winning share. While our pricing and savings
programmes helped to offset some of the impact of mounting
input costs, our underlying operating margin was down 10bps
at 18.4%. Free cash flow remained healthy at €6.4 billion, albeit
down from record levels last year. For more details on our
performance see the Financial review on pages 36 to 43.

Five strategic choices for growth

In early 2021, we set out in detail the Unilever Compass
strategy to deliver our vision. The five clear, sharpened choices
we have made in our Compass strategy – portfolio, brands,
markets, channels and culture – along with the continued
delivery of our 5 Growth Fundamentals, have been playing an
important role in building momentum across the business.

"We're focused on
driving faster growth
from our strong portfolio
of brands and markets."

Alan Jope
Chief Executive Officer

Developing our portfolio into high growth spaces

Our investments in high growth spaces continued in 2021.
As well as our established businesses in hygiene and skin
care where we continue to drive science-based innovation
(see pages 20 to 24), we’re building sizeable new businesses
in areas such as Prestige beauty, Functional nutrition and
Plant-based foods, which are contributing to our growth.
Our Prestige beauty business, now including the digitally-led
cruelty-free Paula’s Choice brand which we acquired in 2021,
delivered strong double-digit growth in 2021 and reached
€1 billion turnover if we include a full year of Paula’s Choice.(a)

Functional nutrition is another area of focus for our portfolio
transformation into high growth spaces. It includes Horlicks
and our Vitamins, Minerals & Supplements (VMS) brands
such as Olly, Liquid I.V., and Onnit, a leading brand in the
fast-growing area of nootropics, acquired in 2021. Functional
nutrition grew double-digit in 2021 and reached €1.5
billion turnover if we include a full year of Onnit.(a) We're
also expanding our plant-based portfolio to meet growing
consumer demand – see page 22.

In November 2021, we announced that we had entered into
an agreement to sell our global Tea business, now known as
ekaterra, to CVC Capital Partners Fund VIII for €4.5 billion on a
cash-free, debt-free basis. The transaction excludes Unilever’s
tea business in India, Nepal and Indonesia as well as the
Pepsi Lipton ready-to-drink tea joint ventures and associated
distribution businesses. We expect to complete this transaction
in the second half of 2022, subject to receiving regulatory
approvals and completing works council consultation
processes. Once we dispose of eketerra, our portfolio rotation
will be equivalent to 17% of our 2021 turnover since 2017.(b)

Winning with our brands as a force for good, powered
by purpose and innovation

We hold clear global leadership positions in seven categories;
and in a further two, we lead in terms of volume sold but
not yet value. We’ve stepped up our investments in science
and technology to strengthen the quality and efficacy of our
products – 95% of the turnover we've tested was equal or
better than the main competitor product, with 71% winning
outright. (c) Insights from testing help us improve product
performance through innovation. Focusing our R&D activities
on fewer and bigger projects is also bringing innovations to
market faster. In total, our innovation programme helped
to deliver €1 billion in incremental turnover in 2021 – double
that of 2020. See pages 20 to 24 for more on our brands and
innovation.

STRATEGIC REPORT – REVIEW OF THE YEARUnilever Annual Report and Accounts 202116

Shareholders continued

Our focus on winning with brands and innovation saw our 13
€1 billion brands – also among our most purposeful – grow in
aggregate by over 6% in 2021. These brands now make up half
of our total turnover. See pages 20 to 24 for more on brands
with purpose and how we're building our marketing capability.

Accelerating in USA, India, China and key growth
markets

Around 36% of our turnover is from three markets: the US, India
and China. Having a strong brand and category presence here
is key to our future growth, as these countries are predicted
to account for well over half of global economic growth by
2030. To strengthen and expand our business in these priority
markets, we’re growing our core brands, transforming our
portfolio to capitalise on high growth opportunities and
growing our digital and eCommerce channel presence.

US
The US is our largest market and we grew 3.7% in 2021 against
a very strong prior year comparator. Delivering breakthrough
technology innovations through our purposeful brands such
as Dove, and scaling our recently acquired brands such as
Olly and SheaMoisture, has helped to drive the growth of
our US business. Data-driven customer partnerships are also
unlocking further opportunities, such as exclusive bath range
launches with two US retailers.

Our US business continues to benefit from our portfolio
transformation into higher growth areas such as Functional
nutrition and Prestige beauty – building on the strength of
brands such as Liquid I.V. and Living Proof. The growth of
eCommerce in the US continued in 2021 – enabled by an
increased focus on innovations designed for channel and
strengthened digital capabilities.

India
Our Hindustan Unilever (HUL) business is India’s largest FMCG
company. We delivered a strong all-round performance,
growing at 13.4%.

We made significant progress on the integration of the
Horlicks portfolio. Our focus now is on building category
relevance and growing penetration – through innovations in
the high science range, such as Diabetes Plus, as well as a step
up in marketing and communications, home visits to promote
products and the introduction of affordable packs.

Our eCommerce sales in India saw double-digit growth in
2021. We're also reaching more small retail stores through
digital channels – our eB2B app Shikhar is now used by over
700,000 retailers. Through direct-to-consumer platforms, we’re
expanding our digital footprint further. The iconic beauty
brand Lakme, for instance, is the most followed Indian beauty
brand on Instagram with around 30% of its sales in 2021
through digital channels.

China
China has grown into our third-largest market by fulfilling
diverse and constantly changing consumer needs – doubling
in size over the last decade. We grew by 14.3% in 2021.

Our success in China is built on our core brands – including
Knorr, OMO, Dove and CLEAR – which are combining product
superiority and brand purpose to expand penetration and
sales. Transforming the portfolio is also key to unlocking future
growth opportunities, such as in personal and home hygiene
and masstige, and by premiumising brands such as Vaseline
which has evolved from a basic body care range to cover
whole body expert skin healing. We’re also expanding our
Prestige beauty and VMS offerings with a selective roll-out of
brands such as SmartyPants.

Sales through eCommerce in China grew double-digit in
2021. Further eCommerce growth is expected as penetration
increases in lower-tier cities. Partnerships with eCommerce
platforms such as JD.com and Alibaba (see page 25) and
expanding reach to newer channels such as live streaming
and social commerce, will continue this upward trend.

Leading in the channels of the future

We’re growing our core brands by focusing on superior
products and purpose. Surf excel, for instance, continued to
build relevance through our iconic ‘Dirt is Good’ campaign and
delivered strong performance. And Lifebuoy strengthened our
market leadership as the number one soap brand in India,
building on its hygiene credentials (see page 31). HUL has a
strong track record of building scale in new categories through
market development, by moving consumers to new products
with added benefits – such as liquid detergents, functional tea
with wellness benefits and body wash.

We’re increasingly designing products and organising our
business for eCommerce by working with partners such
as Amazon and Alibaba as well as large retailers who are
expanding their footprint across a range of digital commerce
channels. Our eCommerce sales grew by 44% in 2021 and
accounted for 13% of our total turnover – we see no sign of
this shift reversing (see page 37 for a definition of eCommerce
sales). We sell around 50% of our Prestige beauty products, for
example, through eCommerce channels, including direct to
consumer. See page 25 for more.

Brands such as Surf excel, Dove and TRESemmé are responding
to the needs of consumers and leading premiumisation. The
newly formed Premium Beauty Business unit within HUL will
strengthen our presence in the fast-growing masstige beauty
segment. The premium portfolio performed well in 2021.

With our innovation and merchandising strategies firmly
rooted in shopper insights, we'll continue to adapt at speed
to trends, such as consumers wanting quick and delicious
food delivered to their door. Our Ice Cream Now platform for
instant ice cream delivery, for example, grew by 60% in 2021.
We’re also increasingly using digital sales platforms with our
customers, both large and small. See page 26 for more on our
eB2B growth.

Unilever Annual Report and Accounts 202117

Building a purpose-led, future-fit organisation and
growth culture

We believe that when employees are clear on their purpose
in life and how this connects to the work they do, they’re
more engaged and willing to go the extra mile. Working with
purpose is at the heart of our culture – see page 19. This also
helps us attract the very best people, as evidenced by our
status as number one FMCG employer of choice for graduates
and early career talent in over 50 markets.

More agile application of technology alongside simpler ways
of working will help us stay one step ahead of consumer
trends. We’re continuing to speed up our ways of working,
building our eCommerce capabilities and automating back-
office processes – see pages 19 and 25 for examples. We’re
also reskilling and upskilling our people, and embracing
hybrid ways of work to prepare for the future of work – see
pages 18 to 19.

In January 2022 we announced changes to our organisational
model to make us a simpler, more category-focused business –
see pages 6 to 7 for more.

(a) Prestige beauty and Functional nutrition turnover for 2021 calculated as if

Paula's Choice and Onnit respectively, had been acquired on 1 January 2021.
(b) Portfolio rotation is the 2021 turnover from any acquisitions completed since

2017 (including a full year of turnover for 2021 acquisitions) plus the last twelve
months' of turnover from our disposals since 2017 (including eketerra) as a
percentage of our 2021 turnover.

benchmark product superiority (turnover weighted).

STRATEGIC REPORT – REVIEW OF THE YEARUnilever Annual Report and Accounts 202118

Our people

Our people are the heartbeat of Unilever –
when they thrive, our business thrives.

This year reinforced the importance of being a safe, inclusive
and supportive place to work for our 148,000 employees.
Around 90,000 people took part in our UniVoice employee
survey this year. We sustained very high engagement levels
– 82% in offices and 83% in factories – which places us in
the top quartile for employee engagement compared to
industry benchmarks.

Protecting health, safety and wellbeing

Alongside safety at work, supporting our people’s
physical, mental and emotional wellbeing has never been
more important.

Supporting our people through the pandemic

We’ve continued to help our people protect themselves
from the virus by working to remove barriers to testing and
encouraging vaccinations to keep our workplaces as safe and
productive as possible. We ensured that thousands of our
employees received medical care through our own facilities
and healthcare resources, telehealth options or connections
to community resources, and supported the colleagues and
families of those we sadly lost to Covid.

We continued promoting healthy living and working for all
our employees. To help people get the medical support they
need, for example we now offer triage services in India and
the UK. We launched a new digital tool in four countries that
helps people identify their risk of type 2 diabetes, followed by a
12-month programme to reduce those risks. Participants in our
Brazil and Mexico pilots have reported improvements to their
quality of life and sleep, as well as less stress and time off work
due to ill health.

We also intensified our focus on mental health, introducing
online training in ten languages to help our people
understand the impact of Covid on their mental health. More
people used our Employee Assistance Programme this year,
and our global network of mental health champions more
than doubled to around 4,000 people. Our teams are using a
new tool to assess their energy levels and better support each
other. Due to these and other initiatives, the percentage of our
people who feel Unilever cares about their wellbeing is rising:
85% in offices (81% in 2020) and 83% in factories (70% in 2019).

Safety at work

We continue to prioritise the safety of our people and
contractors in everyday work situations – from using
mechanical equipment to staying safe on the roads. Our 2021
UniVoice survey showed that over 90% of employees feel that
Unilever is committed to their safety. We rolled out a new
incident management tool which connects our sites around

the world on a single digital platform. We also increased
resources to ensure appropriate oversight for safety.

Our Total Recordable Frequency Rate (TRFR) improved from
0.63 to 0.55 accidents per million hours worked (1 October
2020 to 30 September 2021), partly related to fewer accidents
at Unilever offices due to continued working from home. Sadly
however, fatalities continued to rise. In the reporting period,
three contractors and four employees lost their lives. Two
contractors were fatally electrocuted at one of our sites in
Pakistan in one event; and a contractor in Hungary lost their
life in a construction incident. Two employees were struck by
lightning in separate incidents in Kenya and Tanzania. And
two employees were involved in a fatal car accident in India.

When fatalities occur, our first priority is to support the
emotional and physical needs of the families and team
members of the individuals involved. We work with local law
enforcement, communities and regulators to fully investigate
the root cause and determine further preventative measures.

See our website for more on safety at work

New ways of working

The world of work is changing. Our 2021 employee survey
showed that around three-quarters of our people believe
we have become simpler, faster and more agile in the last
12 months. Covid-19 has been a catalyst to expand flexible
and more inclusive ways of working.

We’re rethinking how we work as an employer. The fact that
the satisfaction and connection levels of new employees
have risen since our last pre-Covid survey is testament to
the effectiveness of our evolved ways of working. So we’ve
moved to a hybrid model for our office-based employees. This
means thinking about work as what people do, not where
they do it – with our offices as collaboration spaces and
people able to work where they’ll be most effective. Our global
guiding principles for hybrid working state that we expect our
employees to spend at least 40% of their time in the office.

We’re also pioneering new ways of working which both unlock
capacity and help individuals find a meaningful and balanced
way of working. Our AI-powered internal talent marketplace,
Flex, allows us to match the skills needed for projects to
people, regardless of where they sit in the organisation. It
helped us reprioritise more than 110,000 hours to around
1,350 critical projects in 2021. In addition we have flexible
working options like job-sharing or paid learning sabbaticals.
Our people now have the option to work as a contractor on a
project-by-project basis through the 'U-Work' programme in
seven countries. This gives them the flexibility associated with
contract roles and they are paid a monthly retainer fee with a
core set of benefits.

Unilever Annual Report and Accounts 202119

Skills for the future

We’re creating a culture of learning across Unilever, upskilling
and reskilling our people for jobs of the future. Our employees
accessed the Degreed learning platform over 4.2 million times
during 2021. In our latest employee survey, 83% of our people
in offices and 77% of our people in factories said they believe
Unilever gives them a chance to upgrade their skills for a
successful future.

In 2021, we focused on building critical digital commerce
skills throughout our business, including an eCommerce
accelerator hub and bootcamp for our customer development
teams and enhancing digital access in our factories to ensure
our people have future-fit capabilities. Our Future of Work
in Manufacturing programme gave frontline workers access
to technology that enables shared learning on the job and
better processes and communications. This is an important
step towards our factories becoming the efficient digital
workplaces we’ll need for our future growth.

Our ultimate goal is for no one to be left behind as the world of
work continues to change. In December 2021, we held our first
Future of Work conference to share our progress and learnings
and build alliances with forward-thinking companies. We’re
also aiming to help equip 10 million young people with
essential skills for jobs by 2030 – see page 30 for more.

See our website for more on the future of work

Nurturing our growth culture

We see a human, purposeful and accountable culture that
is rooted in our values as essential to our purpose-led and
future-fit organisation. Using our future-fit plans, our people
are shaping development and career plans based on their
purpose – we've made a good start by upskilling or reskilling
7% of our people in 2021. We now have statistical evidence
from ongoing research led by the London School of Economics
of the link between purpose and intrinsic motivation, based on
data from 3,500 employees across 14 countries.

Equity, diversity and inclusion

We also want to be a workplace in which everyone feels they
belong and are able to thrive. This means creating an inclusive
culture free from the barriers that limit people in reaching
their true potential. We've identified four equity, diversity
and inclusion priorities – gender, race and ethnicity, people
with disabilities and LGBTQI+ communities. This is where we
will put our global focus to address under-representation
and overcome possible challenges in career progression
and to foster a greater sense of inclusion. We’re building the
capabilities of our business leaders and HR practitioners
to support equity advocacy, diversity awareness and
psychological safety in their teams.

We’re working to build a better understanding of the diversity
of our workforce in order to identify specific community needs.
For example, we've conducted a cultural assessment and
focus groups with over 2,000 employees in Brazil, India and the
UK to explore attitudes and barriers around disability inclusion
in Unilever. Our LGBTQI+ employee network has increased
to over 1,000 members, and we're continuing to expand it

No1 FMCG employer of choice for

graduates and early career
talent in over 50 markets

to increase advocacy for human rights and safe havens for
this community.

Our race and ethnicity strategy is focused on four markets
(Brazil, South Africa, the UK and US). These are leading our
work to make our recruitment practices more equitable by
increasing the representation of black and brown people,
building more inclusive and equitable cultures, and expanding
local partnerships and advocacy.

Our gender balance at management level changed slightly in
2021, with women now accounting for 52% of all management
employees. Our work continues to increase the representation
of women, particularly at senior levels. This year, we
reintroduced a tool that uses a mix of behavioural science
and data to raise awareness of senior leaders’ hiring patterns
and unconscious bias in decision-making. See page 64 for our
gender balance statistics.

See our website for more on equity, diversity and inclusion

Working with integrity

Our focus is on growth in line with our values, not on growth at
any cost. We review our Code of Business Principles and Code
Policies every year to ensure they reflect the current operating
context and the latest legal requirements. In 2021, we further
strengthened our Code Policies on data security and fraud. Our
zero-tolerance approach to bribery continues to be supported
through mandatory training and initiatives delivered to
all employees.

We train our people every year to prevent compliance
breaches, and they’re able to report in confidence any
concerns around business integrity through our 24/7 Speak Up
platform. In 2021, we continued to simplify and improve the
whistleblowing process for users through expansion of local
hotlines and interpreting services.

On our website, we report the number of Code cases and
subsequent actions for each of our five Code themes including
countering corruption – covering amongst other things anti-
bribery and avoiding conflicts of interest. This year, across
all areas of our Code of Business Principles, we received
1,275 Code reports, closed 1,246 reports (including some from
prior years) and confirmed 694 reports as breaches, which
led to 369 people leaving the business. Our data on Code
breaches provides insights into issues and where they happen
so that we can prevent behaviours that lead to them.

See our website for more on business integrity

STRATEGIC REPORT – REVIEW OF THE YEARUnilever Annual Report and Accounts 202120

Consumers

Our brands are evolving to meet the changing needs
of consumers all over the world.

Value and values

With some countries emerging from lockdown and others
living with Covid-related restrictions in 2021, many of the
consumer trends we saw last year continued.

Consumers are thinking more carefully about everything
from what they put in, and on, their bodies to what they
use to clean their homes with. Shoppers also continue to
be increasingly discerning – looking for highly effective
products, with ingredients that are good for them and good
for the environment. There is now compelling evidence that
brands with purpose grow. Our own research shows a strong
correlation between brand purpose and brand attractiveness –
referred to as brand power – which in turn drives market share
and growth. Other independent research from Kantar shows
that the category of most sustainable shoppers who are highly
concerned about the environment, is now around 1 in 5 of the
global adult population – with the potential to reach 1 in 3
by 2024.

Even as some countries relaxed restrictions and people started
to spend more time out of the home, online shopping and the
demand for convenience stayed strong – e-everything is here
to stay. Many people chose to stay home even when they had
other options – continuing to cook at home instead of eating
out, for example. The varying impact of the pandemic has also
led to some shoppers treating themselves to more premium
products while others are increasingly cost-conscious, looking
for the best-performing products they can afford. Despite the
price increases brought about by commodity inflation, we
continued to offer value for everyone.

In focus
Saying no to normal

As part of our commitment to challenging
narrow beauty ideals, we’re eliminating the
use of the word ‘normal’ across all our Beauty &
Personal Care products and communications,
globally. We'll end any digital alteration to
change a person’s body shape, size, proportion
or skin colour across all advertising material,
and increase the number of advertisements
portraying people from diverse groups. Our
brands are already putting this commitment
into action. Dove’s Reverse Selfie campaign
launched in 2021 to highlight the effect
retouching apps have on girls’ self-esteem.
And Sunsilk released a music video in Turkey
featuring inspiring women who are breaking
the mould.

To capitalise on these consumer trends, we’re building our
marketing capability to support the growth of our brands.
We're particularly focused on digital marketing which now
makes up to 40% of our media spend. And we’re harnessing
new AI-powered innovation tools to spot trends early and test
new product concepts. Against this dynamic backdrop, our
three Divisions worked to anticipate and meet consumers’
needs with their products and purpose-led brands.

Beauty & Personal Care

We want to be the most positive beauty business in the world
for people and the planet.

We believe in beauty that not only does less harm, but
also does more good – beauty that’s both inclusive and
sustainable. To achieve our new Positive Beauty vision, we’re
using our scale to create positive change and drive growth
through our big brands, impactful innovation and portfolio
transformation.

Growing our core brands

Dove grew strongly this year reaching €5 billion turnover,
supported by renovation of its core products, such as Dove
Care & Protect which is now available in 50 countries with
clinically proven, superior moisturisation. Dove also launched
the premium Hair Therapy range, combining expert hair care
solutions with skin care-inspired ingredients.

The pandemic has highlighted the importance of hygiene, and
our brands continued to meet this need, despite the slowdown
in the sale of hand sanitisers which affected the growth of
Lifebuoy and Suave. Lifebuoy’s handwashing campaigns
continued to raise awareness and contributed to a large
increase in brand power – a measure of brand attractiveness
– and its ranking as the third most chosen FMCG brand in the
world by Kantar. Lux relaunched its core soap bars and body
washes with superior benefits, such as long-lasting fragrance.

Rexona relaunched its core deodorant range with 72-hour
non-stop protection against sweat and body odour. And our
male grooming brand Axe refreshed its identity to celebrate
and represent all types of attraction, in addition to a major
reformulation that fights odour instead of masking it.

Impactful innovation

We’re anticipating future consumer needs by focusing our
innovations on fewer projects with bigger impact. This year,
we’ve scaled our industry-leading pro-lipid technology
which helps to nourish skin from within. Developed by our
dermatology scientists, it's now available across our biggest
skin care brands such as Dove, Vaseline, and Pond’s.

Unilever Annual Report and Accounts 202121

With over 100 patents on the human microbiome, a number
of our product innovations in 2021 focused on enhancing the
body’s own repair and defences by using natural ingredients.
For example, our reformulated Dove Body Wash uses a gentle
formulation to support a healthy skin microbiome.

We’re also dialling up our innovation partnerships to
anticipate future consumer needs. The digital Uni-Excubator
we launched in 2020 in China has been giving start-ups
unique access to our insights and expertise in areas such as
technology, sustainability and distribution networks. In return
we've harnessed their skills and agility to help our brands
grow. We're partnering with Alibaba’s Tmall platform which is
hosting the Uni-Excubator’s flagship store, Uni-Topia Planet,
showcasing exclusive new beauty and personal care products
and driving sales through its channel.

Portfolio transformation

We're building a sizeable Prestige beauty business, a key part
of our strategy to evolve our portfolio into high growth spaces.
Prestige is growing fast, with turnover of €1 billion in 2021 if we
include a full year of Paula’s Choice, a digitally led, cruelty-
free skin care brand. The growth of Prestige was supported
by new innovations from Dermalogica, REN – and Hourglass
with a breakthrough red lipstick that offers consumers a
vegan alternative to the red pigment traditionally made from
crushed beetles.

Skin care grew single-digit in 2021. Potential in the category is
high, but there is more we need to do to fully capitalise on the
opportunity. By targeting our top markets with breakthrough
innovations such as pro-lipids, as well as locally relevant
brand purpose activities, we’re already seeing strong growth
of brands such as Vaseline which performed strongly in 2021,
supported by a number of premium innovations across skin
brightening, therapeutics and hydration. Good growth also
came from brands such as Pond's which continues to offer
more premium ranges.

We continued to expand our presence across eCommerce
channels – eCommerce sales accounted for 16% of our Beauty
& Personal Care turnover in 2021. We're also looking at digital
commerce and capitalising on this growth in a number of

"Positive Beauty isn’t
just about doing
the right thing for
the planet, it’s also
helping to grow our
business too."

Sunny Jain
President, Beauty & Personal Care

€5bn

Dove grew high single-digit in 2021 and reached
another turnover milestone

ways. For example, through our new Positive Beauty Growth
Platform which aims to partner with start-ups and scale-ups
from around the world on cutting-edge projects. Our initial
invitation for pitches focused on the emerging channel of
social commerce – from livestream shopping to gaming. We’re
now working with the shortlisted applicants to partner with
our brands.

People positive

We know that consumers want health and beauty products
which they feel represent them. So we’re focused on growing
our global portfolio of brands that are inclusive and care for all
skin, hair and body types, championing the diversity of beauty.

As well as saying ‘no to normal’, our Beauty & Personal
Care brands are using their power to serve more diverse
communities and break down stereotypes and prejudice. As
hair can be a source of discrimination for people from different
races and ethnicities, we’re working to help people make the
most of all hair types. By pinpointing the proteins that differ in
curly and straight hair, we were able to launch one of the first
product ranges – Nexxus Curl Define in the US – which caters to
each hair type's specific needs.

In line with its purpose to give people the confidence to move
more, Degree piloted the world’s first prototype deodorant
designed to be easier for people with disabilities to use.
Alongside this, to get audiences thinking differently about
sportspeople, the brand also released short films featuring
diverse athletes defying stereotypes.

See page 30 for more on how Beauty & Personal Care brands
worked to improve health and wellbeing and advance equity
and inclusion in 2021.

Planet positive

We’re committed to doing less harm and more good for the
natural world by protecting and regenerating 1.5 million
hectares of land, forests and oceans by 2030. Consumers are
increasingly concerned about the effect of the products they
buy on the environment – and especially plastic pollution.
Towards our goal to use less, better and no plastic, our oral
care ranges, starting with France in 2021, began rolling out
recyclable toothpaste tubes. And Dove launched 'buy once,
refill for life' aluminium deodorant sticks. For more on plastic,
see page 29.

STRATEGIC REPORT – REVIEW OF THE YEARUnilever Annual Report and Accounts 202122

Consumers continued

As part of our support for a global ban on animal testing for
cosmetics, we’ve continued to work alongside regulatory
authorities, NGOs and like-minded companies to share science
and advocate the use of non-animal approaches for safety
testing. Requests for new animal tests in Europe threaten the
European Union’s ban on animal testing for cosmetics. Dove
and our other 27 PETA-approved brands united with The Body
Shop and animal protection organisations to campaign to
save cruelty-free cosmetics. Regulatory changes in China have
allowed for the import of more cosmetic products without the
requirement for animal testing, meaning more consumers will
be able to enjoy our beauty products.

in all 55 markets, both in foodservice and retail. The latest
addition to its meat alternatives is the Patty on the Back
burger, a breakthrough plant-based burger. Not only is the
burger lower in calories and fat than meat, it’s higher in fibre
and iron and has similar salt levels.

Our plant-based ice cream range continued to grow with
brands like Ben & Jerry’s, Magnum, Breyers, Cornetto, Carte
D’Or and Swedish Glace offering non-dairy options. With
Magnum’s Vegan Sea Salt Caramel winning a PETA Vegan Food
Award in 2021, all the brand’s vegan flavours are now award-
winning. Certified vegan non-dairy now makes up over 25% of
Ben & Jerry’s pint flavours in the US.

Foods & Refreshment

We're on a mission to be a world-class force for good in food.

Our brands continue to provide great-tasting, nutritious and
sustainable foods for consumers all over the world – using our
world-class innovation and brand purpose to inspire change.

Irresistible innovation

During 2021 we continued to grow our core brands. Knorr,
our biggest Foods & Refreshment brand grew high single-
digit, supported by bigger innovations and a clear purpose. It
launched its first zero salt bouillon in Europe – now available
in ten markets, offering cooks unique blends of vegetables,
herbs and spices, while supporting our goal to reduce salt
intake. Its purpose to ‘reinvent food for humanity’, inspired the
inaugural Eat for Good day, which aims to empower 'Eativists'
who want to make a difference to the world through their food
choices, as well as building brand awareness. And the ‘future-
proof your recipe’ platform on Recipedia, where consumers
can share Future 50 Foods recipe ideas, is expanding to other
countries after a successful launch in Mexico.

Hellmann’s, the world’s number one mayonnaise, grew
double-digit for the second year in succession. Continuing its
mission to inspire 100 million people to waste less food, its
2021 Superbowl campaign led to increased brand awareness
and a boost in sales. And Hellmann’s vegan mayonnaise,
now available in 33 markets, launched three new flavours –
Baconnaise, Chipotle and Garlic.

While varying levels of restrictions around the world affected
our sales of out-of-home ice cream in 2021, our ice cream
brands grew mid-single digit – as Ben & Jerry’s (now a €1
billion brand), Wall's and Magnum continued to offer much-
loved favourites and new flavours, such as Magnum's Double
Gold Caramel Billionaire – available in 35 markets. Not only
an indulgent ice cream, it comes in 100% recycled plastic tubs
developed with advanced recycling technology which is now
being rolled out to other brands.

Expanding our plant-based portfolio

We continued to step up our plant-based offerings through
a number of our brands. Our plant-based meat and dairy
replacement business saw strong double-digit growth in 2021
in pursuit of €1 billion annual sales by 2025-2027. This was
primarily driven by The Vegetarian Butcher, which is growing

We’re also using cutting-edge food science to find alternative
proteins and new ways to cook without meat. In Argentina,
Colombia and Mexico, we launched Rinde Más, a blend of
herbs, spices, vegetables and protein that gives cooks an
affordable way to reduce the meat in their dishes. We’ve also
begun working with food-tech company ENOUGH to develop
new plant-based products based on mycoprotein – from a
process that uses 93% less water, 97% less feed and 97% less
carbon than meat.

We were again named by investor network FAIRR as a pioneer
in sustainable protein research and innovation and ranked
number one in its protein transition index for 2021.

See our website for more on plant-based foods

Growing our channel footprint

We’re finding new ways to make our brands available to
consumers, wherever they are. Sales through eCommerce
continue to grow, and accounted for 9% of our Foods &
Refreshment turnover in 2021. Our Ice Cream Now business
caters to the rise of 'in-home' eating, by quickly delivering our
brands to consumers in 35 countries, growing 60% in 2021. And
our out-of-home professional foodservices business, Unilever
Food Solutions (UFS), grew double-digit in 2021 despite the
ongoing impact of restrictions. UFS is now working with cloud
kitchens – commercial kitchens that prepare and cook food
purely for delivery – such as Casper, a cloud kitchen pioneer
in Belgium, where we provide a range of products from our
Vegetarian Butcher portfolio, as well as specific ingredients
and flavours.

"We’re improving the
health of the planet
by changing what’s
on our plates."

Hanneke Faber
President, Foods & Refreshment

Unilever Annual Report and Accounts 202123

A world-class force for good in food

Home Care

As one of the biggest consumer goods companies in the world,
with a large Foods & Refreshment portfolio, we want to use our
scale and reach to transform the food system – from the fields
and farms where ingredients are grown, to the packaging that
keeps food fresh.

Our brands are working to protect and preserve natural
habitats in the places their ingredients are produced. Knorr
continues its work with farmers and growers through a new
series of 50 projects. Part of our Climate & Nature Fund, it aims
to establish regenerative agriculture sourcing for 80% of its key
raw materials over five years. One project, for example, is using
satellite data and digital sensors to help tomato farmers in the
south of Spain optimise their water use and improve soil health
through cover cropping. In Côte d’Ivoire, where the cocoa used
by Magnum is grown by Rainforest Alliance farmers, the brand
has planted 465,000 native trees and is working with farmers
to tackle deforestation. For more on nature see pages 30
and 52.

We’re meeting consumer demand for more sustainable
packaging by using less, better or no plastic. Many of our foods
brands already use 100% recycled plastic, such as Hellmann’s
and Bango. And we’re now making progress in finding better
ways to overcome technical challenges with sachets that are
hard to recycle, for example by bringing out groundbreaking
paper-based recyclable pouches for our Colman’s range in the
UK. For more on plastic see page 29.

In focus
Knorr: building a greener
food future

Our largest food brand continues to take bold
and innovative steps towards healthier eating
and a healthier planet. Through its new zero
salt bouillon, its promotion of Future 50 Foods
– a collection of nutritious and sustainable
plant-based foods – and its new World Eat for
Good day, the brand is encouraging people to
swap out traditional ingredients for healthier
ones. And now, through its new Grown for Good
initiative, Knorr will create 50 regenerative
agriculture projects to transform how its key
ingredients are grown. The first three projects
are looking at water preservation and soil
health with key suppliers of tomatoes, rice
and vegetables. Knorr grew high single-digit
in 2021.

We're making people’s homes a better world, and our world
a better home.

As we work to make the lives of the people who buy our
products easier, cleaner and safer, we’re also leading our
industry towards a cleaner future through the power of science
and innovation. Our relentless focus on meeting consumer
needs with superior products has fuelled the steady and
competitive growth of many of our brands.

Powering growth through Clean Future

We know people want to clean their homes and clothes
without damaging the planet. We’re making good progress in
transforming some of the world's most well-known household
brands to disinfect, clean, freshen up and remove stains better
than ever while lowering their carbon emissions and waste,
in line with our ‘Clean Future’ strategy.

Our biggest Home Care brand, Dirt is Good (also known as
OMO, Surf Excel, Persil or Skip) is key to our Clean Future
ambitions – and leads the transformation of our entire Home
Care business. It launched a successful new liquid range that
uses plant-based stain removers without compromising on
performance. It’s suitable for low-temperature washing, with a
lower GHG impact than laundry powders, and is packaged in
mostly recycled plastic bottles.

To help reduce its use of plastic packaging, Dirt is Good also
rolled out a six times concentrated OMO dilute-at-home
laundry liquid in our biggest laundry market, Latin America. It
quickly became a top-seller in Argentina and Brazil. Not only
does this make the brand affordable to more consumers, it
also uses around 70% less plastic than a conventional 3-litre
bottle, and is now more biodegradable. Dirt is Good grew
mid single-digit in 2021 and increased its global brand power
score, also winning WARC and Effie awards for the effective
communication of its brand purpose to consumers. For more
on our Clean Future innovations, see pages 31 and 52.

Sunlight, one of our €1 billion brands, started to roll out a new
plant-based formulation for its hand dishwash products across
the world. With biodegradable active ingredients, it’s also
proven to deliver a superior cleaning experience.

In 2021, we entered a multi-year partnership with Arzeda to
design new enzymes for our laundry and cleaning products,
including OMO, Surf and Sunlight. Applying the latest
advances in digital biology, the new enzymes have the
potential to significantly reduce the number of ingredients we
use, while delivering superior products, new cleaning benefits
and a lower environmental footprint.

See our website for more on our Clean Future strategy

STRATEGIC REPORT – REVIEW OF THE YEARUnilever Annual Report and Accounts 2021"We’re radically
transforming some of the
most popular cleaning
and laundry brands in the
world to deliver great
cleaning experiences
with lower environmental
impact."

Peter ter Kulve
President, Home Care

Consumers continued

Responding to fast-changing hygiene habits

People’s hygiene habits continued to evolve during the year,
and with this came unpredictable and challenging market
conditions for our cleaning and disinfecting brands. In this
context, we decided to evolve and expand our portfolio to
continue to meet consumers’ existing and future needs.

Our leading toilet-cleaning brand Domestos now offers
around-the-house disinfection with a range of sprays, foams,
cleaning liquids and wipes – making these available to
consumers in our top 30 markets. Lifebuoy home disinfectants,
delivering 24 hours of disinfection with 100% natural cleaning
ingredients, are now available in the UK, Germany, Vietnam,
Malaysia and Singapore. And in Indonesia we rolled out a new
antibacterial Sunlight washing-up liquid that can be used
without water and rinsing.

Our air purification brand Blueair enjoyed a particularly
strong year in 2021. Its latest innovation, HealthProtect, which
provides protection against viruses and bacteria, supported a
record year of growth for Blueair. The brand also made great
strides in its Freedom to Breathe campaign which supports
children’s right to clean air, after the Committee of the UN
Convention on the Rights of the Child acknowledged children’s
right to clean air.

Value through more convenient formats and channels

Our Home Care brands have a long track record of helping
consumers access more convenient formats which offer
superior benefits and create more value in the market. Our
market development activities have accelerated liquid
detergent growth to double-digit in most of our key developing
and emerging markets. And we’re moving consumers from
laundry liquids to laundry capsules, so that they get the right
dose of detergent every time. Our capsules business enjoyed
strong growth, gaining share in most markets. And our OMO
capsules became the second most popular laundry capsules
in China, ranking first in offline channels.

As more people turned to online shopping to conveniently buy
their cleaning and laundry products during the pandemic,
we’ve renewed our focus on growing our home care digital
commerce business. We’ve also invested in a digital capability
team, including a dedicated unit in the UK to create and
launch ‘design for eCommerce’ innovations. Sales through
eCommerce accounted for 16% of our Home Care turnover
in 2021.

We continue to focus on taking unproductive costs out of our
business. Our 5S programme delivered €190 million of savings,
helping us to invest in future shopping channels, product
formats, media, consumer needs and sustainable innovation.

Unilever Annual Report and Accounts 2021Customers

We work with our many retail partners to help them
grow sustainably alongside Unilever.

Our products reach the hands of consumers through millions
of retail outlets in around 190 countries. Our customer partners
range from large traditional stores to online-only retailers,
and from small family-owned shops to value retailers. As our
gateway to the people who buy and use our products, these
customer partners are critical to our success.

A shifting retail landscape

Our customers had to adapt throughout the year to changes
in people’s buying habits as Covid-related restrictions came
and went and shopping patterns shifted in different ways at
different times around the world. One consistency was the
ongoing growth of online retail – with consumers shopping
more and more online and new groups of shoppers, such as
older age groups, joining them. During the year, global supply
chain and logistics challenges made it harder for retailers to
predict product availability. So we focused on offering more
proactive planning and strategic support and establishing
new ways to help our partners of all sizes grow.

Partnering for growth

We survey our customers using the Advantage Group Survey
to understand our strengths and where we need to improve.
This year across the 34 markets we surveyed, we continued to
improve customer satisfaction. We were told that customers
value the quality of our consumer insights and that we’re
improving in our service and supply. We were also rated
leaders in sustainability. Based on these findings, we continue
to improve our capabilities for closer collaboration, smoother
processes, more powerful insights and solid business planning
and execution. For instance, we're transforming our core
business processes across functions by using technology and
data to create a superior customer experience.

Digital acceleration

Despite the recent surge in digital commerce, only around a
third of the world’s population shop online – which represents
a huge opportunity for growth. We’re seeing the rise of new
models like social commerce, where people shop through
social media platforms, and quick commerce, where people
expect to receive their orders in less than an hour. And
we’re seeing continued growth through some of our biggest
eCommerce partners, Amazon and Alibaba.

Our eCommerce sales grew by 44% in 2021 and now represent
13% of our turnover. We’re investing significantly in our ability
to fulfil online customer orders and our own technology, skills
and capabilities in digital commerce. Our aim is to be the
digital commerce partner of choice, helping our customers
grow in the channels of the future. The power of our brands
and marketing, our inclusive content and design, the strength
of our supply chain and our focus on sustainability allows us to
form unique partnerships.

We’re a launch partner for Amazon as they expand into new
markets – most recently Egypt and Poland where our products
were available on the day of launch. As one of a select group
of manufacturers in Amazon’s Tier 1 Global Vendor Program,
we work closely together on retail, supply chain, media and
sustainability initiatives around the world. Our offering under
their Climate Pledge Friendly programme continues to expand,
with over 700 items in the programme in 2021. More than half
of these are certified as compact by design – lighter products
that use less water and packaging, so need less energy to
deliver and use. Our Amazon US Climate Pledge Friendly
selection online accounted for 7% of our US eCommerce
turnover in 2021 – and this will continue to be a key focus for
the future.

We partner with Alibaba across 13 markets. In China, our
collaboration goes beyond core commerce into digital
transformation across the value chain: from suppliers to
marketing to consumer recycling. In March 2021, we launched
a joint innovation centre in Hangzhou, China to quickly test,
refine and scale product innovations. Our strategic partnership
with Alibaba’s Lazada platform has helped our products reach
consumers across South East Asia since 2017. We also see
huge potential in Europe through AliExpress, Alibaba’s new
local marketplace.

STRATEGIC REPORT – REVIEW OF THE YEARUnilever Annual Report and Accounts 202126

Customers continued

Strategic growth for large retail partners

Most of our large retail partners are evolving from traditional
‘bricks and mortar’ stores to selling across a blend of channels
(omnichannel), with digital commerce playing a significant
role. This change in business model requires new ways of
thinking about and reaching consumers.

The shift has led to challenges around product distribution,
availability, visibility and promotion for many of our large
retail customers. In 2021, we ran pilots of location-based
analytics in the US, UK and Netherlands allowing us to track
how our products were performing store by store to help
customers meet these challenges.

We also launched a strategic growth initiative for our large
retail customers. Through the Partners4Growth programme,
we’re harnessing insights and foresights from our advanced
shopper data analytics to help our customers create growth
plans and make sure they have the right products in the
right places at the right time. After piloting this approach to
mutual growth with Walmart, Carrefour, Target and Ahold-
Delhaize Benelux, we plan to expand to other key customers
and ultimately bring all of the elements of our collaboration
together in an integrated digital platform.

Closer collaboration and insight-driven initiatives like these
with our most valuable customers, alongside a focus on
our biggest purpose-led brands, are helping us to further
accelerate mutual growth.

In focus
Empowering small retailers
through apps

We’re expanding our e-business-to-business
(eB2B) platforms to give our small retail
customers a safe, non-contact way of
interacting with us at convenient times to
place orders, track stock and shipments, and
see prices and promotions. Not only does this
create a better experience for our customers,
it helps them increase sales – our digitally
enrolled customers grew by 4% more than
offline-only stores in 2021. And we can use the
data from these apps to predict sales, manage
inventory, offer insight-based advice to
retailers and improve our customer experience.

"In this rapidly changing
environment, we are
partnering with our
customers big and small,
digital and physical, to
drive shopper loyalty
and conversion."

Keith Higgins
Chief Customer Development Officer

Helping small retailers become future-fit

We believe that by helping smaller retailers engage with
the digital economy, we can help them build more resilient
and profitable businesses that also grow our sales. In 2021,
we expanded our e-business-to-business (eB2B) platforms
co-created and owned by Unilever, such as Shikhar in India,
Compra Agora in Brazil and GoToko in Indonesia, to help small
retailers meet the changing needs of today’s shoppers. We've
added thousands of new customers each month to reach half
of the 4.7 million small stores in the Asia, Latin America and
Africa markets we directly serve. They also offer many of our
smaller customers access to things like extended payment
terms and cashless payments that help them keep their
shelves stocked and increase their profits.

We’re working with external researchers to independently
assess the impact of three of our initiatives providing small-
scale retailers in our value chain with access to finance,
technology and training. These include Jaza Duka in Kenya,
Siparis Direkt in Turkey and Kabisig Summits in the Philippines.
The studies found that 68% of participants reported that their
business grew as a result of being in the programmes. As the
retail world moves more and more online, we’ll continue to
invest in digital and financial inclusion for our small retailers
everywhere. See page 30 for more on how we’re creating
economic opportunities throughout our retail value chain.

Selling with purpose

With sustainability an important consideration in many
consumers’ buying decisions, we’re working with our customers
to deliver on our strategic priorities – such as climate action
and health and wellbeing – while engaging consumers
on these important issues. One example is our continued
partnership with Alibaba to create China’s first large-scale
closed-loop system of recycling machines. These use artificial
intelligence to sort plastic packaging so that it can be fast-
tracked for reuse – and consumers get ‘green points’ for their
deposits, which they can use to plant trees or protect land.

Another is the Hygiene 101 sale in the Philippines with Lazada,
Shopee and Grab, where popular brands such as Lifebuoy
handwash and Domex cleaner were sold with hygiene tips and
vouchers to help spread good habits. This was part of a bigger
campaign in partnership with the Philippine Public Health
Association to create better hygiene behaviours.

We’re also bringing our brands’ purposes to life in retail
outlets. Through in-store campaigns and materials, we've
now reached over 8 million points of sale display units.

Unilever Annual Report and Accounts 2021Suppliers & business partners

We’re working more closely with our many suppliers and
partners around the world to deliver our strategy.

Partnerships fit for the future

Our ongoing success rests on working with many innovative
and purposeful businesses and offering them a great
experience. We know that while our suppliers value our
sustainability ambitions and the relationships they have
with us, they want Unilever to be quicker, simpler and easier
to work with. In 2021, we improved our partner experience
through a new integrated supplier helpdesk with a single point
of contact and faster query resolution times. We’ll be rolling
out the helpdesk globally in 2022.

We continue to invest in technology to enhance our supply
chain, with digital transformation allowing us to re-engineer
production lines and apply automation and AI to be more
responsive and resilient. We developed an award-winning
Covid-19 dashboard which uses real-time data and machine
learning to monitor and predict trends down to site level. This
helped us identify and manage risks in our operations. We’ve
also created a version of the dashboard to share with our
supply chain partners.

Our Virtual Ocean Control Tower also proved indispensable
in mitigating the effects of the Suez Canal blockage in 2021,
giving us real-time visibility of sea cargo location, container
details and estimated time of arrival. This helps our logistics,
planning and procurement teams minimise delays and makes
our cross-border supply chain more efficient and resilient.

Increases in speed and agility must not, of course, come at
the expense of product quality. So we also introduced a new
digital process for addressing quality defects with our raw
ingredient and packaging supply partners. This is allowing us
to better track, analyse and manage quality issues, and we’ll
be rolling this out to all factories and supply partners in 2022.
We know we need to bring more collaborative technology
to our relationships with our suppliers, and are working to
increase the speed and scale of platforms and processes
like this one.

Our supplier ecosystem includes millions of people around the
world – from large multinationals to start-ups and small local
producers who provide us with goods and services such as
raw materials, logistics, advertising, professional services and
much more. We also work with a range of business partners,
including industry peers, innovation agencies, universities and
joint ventures, to help unlock growth and find solutions that
benefit our stakeholders.

Stronger together

Covid-related restrictions continued to challenge supply
chains in 2021, with lockdowns affecting our suppliers’
businesses in many parts of the world. Commodities,
packaging and transport all experienced high levels of
inflation. There were shortages of agricultural raw materials,
such as tomatoes, soybean oil and rapeseed oil, caused by
extreme weather conditions. And globally, supply chains and
services were put under pressure due to labour shortages.
Meanwhile, consumer demand rebounded in many areas,
calling for deeper collaboration, agility and innovation with
our network of partners to secure supplies and stay resilient.

To overcome these challenges, we spread production of
products across our manufacturing network and held
inventory closer to the consumer to ensure availability. We
also enhanced our procurement approach: partnering with
scoutbee, for example, to bring AI into our supplier discovery
process to quicken, streamline and strengthen our search for
partners – giving us a more resilient network.

"Through purpose-led
partnerships, we’re
innovating and finding
new opportunities
to accelerate growth
and scale industry
transformation."

Reginaldo Ecclissato
Chief Business Operations Officer

STRATEGIC REPORT – REVIEW OF THE YEARUnilever Annual Report and Accounts 202128

Suppliers & business partners continued

From strategy to action

Our direct suppliers are the gateway to the millions of
people in our wider supply chain. So they’re critical to
building a more inclusive world, slowing climate change, and
protecting natural resources. We simply can’t do these things
without them.

We’ve started to turn our strategy into action by working with
our partners on pilots, roadmaps, capability building and
information sharing. At the very end of 2020, we launched our
Partner with Purpose programme to help us find innovative
and impactful ways to deliver on our ambitious commitments
with our supply partners and generate mutual growth.

Throughout 2021, we held a series of global and market-
specific virtual events to share our strategy and commitments
and recognise supplier contributions. In August, we launched
our Partner Promise Programme to encourage suppliers to
begin their own sustainability journeys, initially in three critical
areas: climate, supplier diversity and living wage.

Reducing emissions through our supply chain

In 2020, we set out our ambition to achieve net zero emissions
across our value chain by 2039.(a) This is a collective challenge,
and an urgent one. Our suppliers bring critical climate action
innovations to us. Through our partnership with Neste, for
example, we’re exploring new sources of renewable and
recycled carbon for our cleaning product formulations. In
June, we joined forces with Coca-Cola and Colgate-Palmolive
in AB InBev’s 100+ accelerator to push sustainable innovation
in climate, water, packaging and sustainable agriculture
in supply chains. We began five pilots to test innovations
in sustainable packaging, water and energy – for example,
converting food waste into animal feed in East Africa and
repurposing brewery grains for packaging materials in China.
We also take part in groups with similar ambitions, such as
Transform to Net Zero and the Exponential Roadmap Initiative,
to learn from others and share our own experience to help
accelerate climate action in supply chains. For more on how
we're working with our suppliers see page 53.

See our website for more on partnering with suppliers to deliver net zero

Dialling up diversity

Having a more diverse supply chain not only helps shape a
fairer and more socially inclusive world – it allows us to unlock
innovation and agility and better address the needs of our
diverse consumers. Despite the volatility of the year, we made
progress on our commitment to help our suppliers improve
their own diversity and increase our spend with diverse
suppliers. Our first step was to understand where we’re starting
from and begin tracking our spend. We ran our first global
survey to map our spending with diverse businesses and are
now working on validating our data and assessing which
procurement categories should be prioritised. Our technology
partner for finding new suppliers, scoutbee, has also added

diversity to its search criteria – reinforcing this as a critical
element we look for in all potential suppliers.

We expanded our supplier diversity programmes in North
America and South Africa and began new ones in seven
other countries – the UK, Ireland, India, Thailand, Australia,
Brazil and Kenya – where we’d identified conditions for good
progress. For example, in the UK we’re working with Google,
Dow and WPP on an accelerator programme to empower
diverse businesses. And in Kenya, we began partnering with
International Finance Corporation (IFC) on Sourcing2Equal, a
three-year project helping women-owned small and medium
businesses access corporate procurement opportunities.

We spent €445 million with diverse suppliers in 2021, the
first year of our ambitious goal to spend €2 billion annually
by 2025. As a global commitment, this covers all markets –
many with little or no infrastructure for supporting diverse
businesses. So in 2021, we also invited 450 of our closest
supply partners to commit to growing their own workforce
and supplier diversity in order to start growing the demand for
more diverse businesses.

Responsible sourcing

Partnerships based on clear standards of responsible sourcing
strengthen our supply chain and the businesses within it. Our
Responsible Sourcing Policy (RSP) sets out our commitment
to conduct business with integrity, and with respect for
universal human and labour rights as well as environmental
sustainability. It’s a crucial part of the due diligence we
undertake to identify and encourage remediation by suppliers
of issues within our extended supply chain.

In 2021, the proportion of our suppliers meeting the
requirements of our RSP reached 81%. Our 2021 performance
is not comparable to previous years as we now include new
acquisitions that are not yet fully integrated into our systems.
We risk-assess our suppliers against the RSP and require those
we identify as high-risk to undergo an independent audit
verifying they can meet our requirements. We require suppliers
to put in place corrective actions to remedy any identified
non-conformances so that they can remain compliant. This
year, we improved the compliance process for new suppliers
by ensuring that they only work with us once they confirm they
can meet the requirements of our RSP. We’re strengthening
our process for existing suppliers to ensure we only raise new
purchase orders for those who remain RSP compliant.

We’re launching a refreshed RSP in 2022 with an expanded
focus on climate and nature – and a new requirement for
suppliers to pay a living wage, which will be introduced
progressively across different portfolios until it is mandatory
for all by 2030 – see page 30 for more on living wage.

See our website for more on responsible sourcing

(a) The definition of ‘net zero’ is outlined in our Climate Transition Action Plan.

See page 53 for further details on the scope of this goal.

Unilever Annual Report and Accounts 2021Planet & society

Our business simply will not prosper without
a healthy planet and society.

Our approach to sustainability continues to recognise
the interconnection of the planet and society – and that
sustainable business can be a driver of business performance.

Improving the health of our planet

As the UN announced ‘code red for humanity’ in 2021, the
urgency of our work to tackle climate change, reduce plastic
waste and protect nature has never been greater.

Climate action

We put our Climate Transition Action Plan (CTAP) to a
shareholder vote at our AGM in May 2021. The plan received
overwhelming support, with 99.59% of votes in favour. For
more detail on progress against our CTAP during 2021 and our
Task Force on Climate-related Financial Disclosures (TCFD)
statement, see pages 51 to 62.

See our website for more on climate action

A waste-free world

We’re making progress towards our ambitious goals around
virgin plastic reduction, recycled plastic use, making our
packaging recyclable, and collection and processing of
plastic. However, we know there is still a lot more to do. In
just three years, we've increased our use of recycled plastic to
approximately 17% of our total packaging portfolio (July 2020
to June 2021 – the reporting period for all our plastic metrics).
Our end of 2021 forecast was around 20%, putting us well on
track to meet our commitment of at least 25% recycled plastic
by 2025.

Many of our brands are now using high levels of recycled
plastic in their packaging. In 2021, Hellmann’s launched 100%
recycled packaging in almost two-thirds of its markets. In
Europe, Knorr has introduced bouillon tubs and lids made
from 100% recycled material, Swedish Glace now offers its
plant-based ice cream in food-grade and freezable recycled
plastic tubs, and Persil comes in lighter bottles made with 70%
recycled plastic. Dove uses 100% recycled plastic in its bottles
in Europe and North America (where technically feasible) and
98% of its new refillable deodorant packaging in the US is
made from recycled plastic.

Due to our step up on recycled plastic, we've reduced our total
virgin plastic packaging footprint since 2018 by around 16%
to 599,000 tonnes. We have more projects than ever exploring

less or no plastic. We’re working with Pulpex to create the
first- ever paper-based laundry detergent bottle, piloting this
with OMO in Brazil. And we’re expanding our in-store refill
programmes, now in 11 countries, including refill stations in
Asda and Co-op stores in the UK, and vending machines in
India for Surf Excel, Comfort and Vim refills.

Currently, 53% of our packaging is recyclable, reusable or
compostable. This is our actual recyclability rate (which
is based on the EMF Global Commitment definition of
'recyclable'), which is significantly less than the 70% of
our packaging portfolio that is technically recyclable with
existing technology. This gap is an industry-wide challenge
and is primarily driven by a lack of collection and recycling
infrastructure. We’re working with local governments and
partners to close this gap, while we continue to deploy new
materials and technologies. For instance, Signal, Pepsodent
and Closeup are shifting to fully recyclable toothpaste tubes.
In 2021 we rolled out recyclable flexibles in North America
for Dove and Love Beauty and Planet. And in Vietnam, we
launched a trial of recyclable sachets for CLEAR shampoo, with
the aim of collecting and recycling the sachets for other uses.

We’re also ramping up our collection and processing of post-
consumer plastic waste. Our business in India was one of
the first to help collect and process more plastic than it sold,
and we have roadmaps for achieving this in other markets.
We have more work to do to scale up our collection efforts.
Industry partnerships will be key, such as our work with Mars,
Mondelēz, Nestlé, PepsiCo and UK retailers to incentivise the
recycling of flexible packaging. In the US, we've made a $15
million investment in the Closed Loop Partners’ Leadership
Fund to help improve recycling. Advocacy is an important part
of our plastics strategy. In January 2022, alongside more than
70 other businesses, we called for an ambitious and legally
binding UN treaty to tackle plastic pollution on a global scale,
similar in intent to the Paris Agreement.

See our website for more on plastic

We’re also focused on reducing food waste. We’re using
predictive analytics and automation to better manage stock
as well as apps to help chefs and caterers become more aware
of food waste. Hellmann’s continues its efforts to cut waste in
homes and hospitality. Its #MakeTasteNotWaste campaign
encourages quick and easy ways to use up leftovers, reaching
more than 150 million people around the world. Hellmann’s
grew double-digit in 2021. See page 52 for more on food waste.

See our website for more on food waste

STRATEGIC REPORT – REVIEW OF THE YEARUnilever Annual Report and Accounts 202130

Planet & society continued

Protect and regenerate nature

Raising living standards

We continue to work towards a deforestation-free supply chain
for palm oil, paper and board, tea, soy, and cocoa. We’ve
made progress in moving our sourcing footprint to areas of
lower risk of deforestation. We’re working towards reporting of
low-risk deforestation volumes from 2022 and independently
verified deforestation-free volumes from 2023. Our efforts in
tackling deforestation and sustainable sourcing have been
recognised by CDP, through our inclusion on the A List for
Forests in 2021.

During the year, we strengthened our contractual framework
with key suppliers in palm and soy so we are working on
aligned commitments. We created independent verification
protocols and piloted these in our sourcing of palm oil,
cocoa, and soy. We also expanded the coverage of our palm
oil monitoring platform, which uses satellite imagery and
geolocation data to measure deforestation in our supply
chain. And along with NASA, Google, and others, we developed
the Forest Data Partnership to collect data on forests and
ecosystems.

Our People & Nature Policy enhances our supplier
requirements around no deforestation and human rights for
our key commodities. We also published our Regenerative
Agriculture Principles, guiding our suppliers and farmers,
including smallholders, on how to nourish soil and water,
capture carbon and restore land. By the end of 2021, we
had 53,000 hectares under protection and regeneration in
partnership with others. Brands like Knorr are playing a leading
role in driving our regenerative agriculture programmes (see
page 52).

Water is essential for our business – the crops we grow, how
we make our products, and how consumers use our brands.
We’re expanding our focus on water beyond our factory
gates, starting with 12 factories in a number of water-stressed
countries. We’re also working with the 2030 Water Resources
Group to address water security for consumers in Bangladesh,
India, Brazil, South Africa and Vietnam. Ensuring our Home
Care and Beauty & Personal Care products are biodegradable
is another key part of our approach to water stewardship.
We’re working with suppliers and innovation partners to find
alternative biodegradable ingredients that don’t compromise
on product performance. See page 23 for more.

See our website for more on nature and water

Since 2020, we’ve continued to pay all our employees a living
wage, and in 2021 were awarded our first global independent
accreditation as a living wage employer from the Fair Wage
Network.

In 2021, we made a groundbreaking commitment that
everyone who directly provides goods and services to us will
earn at least a living wage or living income by 2030. We’re
starting with our manufacturing and agriculture supply chain,
where workers tend to be the most vulnerable. We’re engaging
our teams in the four markets with the biggest gap between
the legal minimum wage and living wage in our supply chain.
And we’ve begun engaging with our suppliers to understand
their living wage position and how best to support and
engage them.

In addition, we know there are many barriers to small
businesses thriving, such as lack of access to skills, finance
and technology. We’ve launched new programmes to move
towards our goal to help 5 million small and medium-sized
businesses in our retail value chain grow by 2025, reaching
1.2 million in 2021.

See our website for more on raising living standards

Equity, diversity and inclusion

Our research shows that more progressive advertising has
the potential to deliver 74% better brand power – a key
measure of consumer attraction for brands. Through our Act 2
Unstereotype programme, we're integrating more diverse and
inclusive thinking at every point of our marketing – to ensure
it reflects the diversity of society. For examples of how our
brands are working to shape a fairer and more inclusive world,
see pages 21 and 31, and for diversity and inclusion in our
workforce and supply chain, see pages 19 and 28.

The future of work

We’re working to help young people find their purpose and
match it with skills that will prepare them for the future of
work – giving us access to talented young workers. Our LevelUp
programme in South Africa for example, aims to break barriers
to employment through purpose workshops, digital learning,
mentoring and work experience. For more on how we’re
preparing our own people for the future of work, see pages 18
to 19.

A fairer, more inclusive world

See our website for more on the future of work

We’re helping to build more resilient and equitable
communities by raising living standards, advancing equity,
diversity and inclusion and preparing people for the future
of work.

Improving health, confidence and wellbeing

Our brands continued their work to promote health and
wellbeing, inclusive beauty and positive nutrition – finding
ways to power growth through purpose.

Unilever Annual Report and Accounts 202131

nutrition by 2025 – including impactful amounts of vegetables,
fruits, protein and fibre as well as micronutrients. At the end
of 2021, 41% of our products delivered positive nutrition (per
serving), keeping us on track towards our goal – see page
35 for more including our progress in reducing salt, sugar
and calories.

We’re using our voice to push for a sustainable food system,
for example at the UN Food Systems Summit in 2021 where
we called for a move to more plant-based proteins and more
action on food loss and waste. We know there is more to
do, but we’re proud that our efforts are being recognised.
We ranked first in the World Benchmarking Alliance’s Food
and Agriculture Benchmark and number two in the global
Access to Nutrition Initiative (ATNI) Index, which ranks the
nutrition programmes of the top 25 global food and beverage
manufacturers.

See our website for more on positive nutrition

Respecting and promoting human rights

Respect for human rights is at the heart of our business and
the responsibility of every person in Unilever. We work with
suppliers, peers, industry bodies, trade unions and civil society
to address human rights impacts so that everyone connected
to our value chain is treated with respect, dignity and fairness.

In support of our commitment to respect and promote human
rights and the effective implementation of the UN Guiding
Principles, in 2021 we created a framework to enable us to
address human rights issues consistently and effectively. We're
using it to define a theory of change, and action plans which
include capability building and impact assessment metrics
to measure progress. We used the framework to implement
capability building on responsible recruitment for our suppliers
– which includes an e-learning platform and toolkit – and our
procurement teams.

Our Human Rights Reports explain our progress and the due
diligence we've undertaken in tackling the many human rights
challenges such as forced labour, gender-based violence and
living wages.

We continued to work on women’s inclusion and safety in
agriculture, manufacturing and last-mile distribution. We'll be
introducing safety frameworks in priority regions and making
sure our direct suppliers have policies and processes in place
to support inclusion and address sexual and gender-based
violence.

See our website for more on human rights

Health and wellbeing

Covid has brought the importance of hygiene into sharp
relief. Lifebuoy's purpose is preventing illness and saving
lives through handwashing with soap. Its H for Handwashing
education campaign has been teaching children about the
importance of handwashing since its launch in 2020. And the
Hygiene & Behaviour Change Coalition created by Lifebuoy,
Domestos, the UK government and others has equipped
many more to practise better hygiene. Lifebuoy also began
offering free doctor teleconsultations on pack and through
its communications across India, Indonesia, Bangladesh,
Pakistan and Vietnam. Our Pepsodent/Signal toothpaste
brand also expanded its oral health services in Indonesia
by providing free dental consultations via WhatsApp during
Covid-19 restrictions, with other markets to follow in 2022.
We see access to healthcare services as an important way to
grow household penetration of our brands by providing vital
services to communities.

Our brands also expanded their efforts to improve confidence
and wellbeing. Rexona deodorant extended its Breaking Limits
programme to help young people in Brazil, the US and the UK
overcome barriers to being active – funding community sports
projects and access to coaches. Sunsilk continued its work to
empower girls and young women through its Explore More
programme with Girl Rising, which has reached more than
56,000 young people from underserved communities in six
countries. Our brand-led initiatives helped to improve health
and wellbeing and advance equity and inclusion for almost
700 million people in 2021.

See our website for more on improving health and wellbeing

Positive nutrition

We’re continuing to increase the nutritional value and reduce
salt, sugar and calories in our foods and refreshments. 63%
of our portfolio met our WHO-aligned nutrition standards.
Fortifying foods with micronutrients is another long-standing
priority, now linked to our goal to double the number of
products sold that deliver Unilever's standards for positive

In focus
OMO: Purple carbon cleaning
power

We’ve teamed up with biotech partners
LanzaTech and India Glycols to capture
carbon dioxide waste from steel factories
and turn it into a climate-friendly cleaning
ingredient. This ‘purple carbon’ technology
– carbon captured from industrial emissions
– has so far been used in OMO laundry
liquid capsules in China and in Sunlight
dishwashing liquid in South Africa. This is
just one example of how we’re reinventing
the chemistry of our Home Care products to
create growth opportunities for our brands
while cutting the use of fossil fuels.

STRATEGIC REPORT – REVIEW OF THE YEARUnilever Annual Report and Accounts 202132

Our performance
Financial performance

Group performance

Unilever

Turnover growth

Underlying sales growth*

Underlying volume growth*

Operating margin

Underlying operating margin*

Free cash flow*

Cash flow from operating activities

Net cash flow (used in)/from investing activities

Net cash flow (used in)/from financing activities

Divisional performance

Beauty & Personal Care

Turnover

Turnover growth

Underlying sales growth

Operating margin

Underlying operating margin

2021

2020

2019

3.4%

4.5%

1.6%

16.6%

18.4%

€6.4bn

€10.3bn

€(3.2)bn

€(7.1)bn

(2.4%)

2.0%

1.9%

1.6%

2.9%

1.2%

16.4%

16.8%

18.5%

19.1%

€7.7bn

€6.1bn

€10.9bn

€10.6bn

€(1.5)bn

€(2.2)bn

€(5.8)bn

€(4.7)bn

2021

2020

2019

€21.9bn

€21.1bn

€21.9bn

3.7%

3.8%

20.4%

21.7%

(3.4%)

1.2%

6.0%

2.6%

20.4%

20.7%

21.7%

22.7%

Unilever Annual Report and Accounts 202133

2021

2020

2019

€20.0bn

€19.1bn

€19.3bn

4.3%

5.6%

14.7%

17.4%

(0.8%)

(4.6%)

1.3%

1.5%

14.4%

14.6%

17.0%

17.5%

2021

2020

2019

€10.6bn

€10.5bn

€10.8bn

1.1%

3.9%

12.2%

13.4%

(3.4)%

4.5%

6.9%

6.1%

11.9%

12.7%

14.5%

14.8%

Divisional performance continued

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

* Key Financial Indicators.

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 pages 39 to 43.

STRATEGIC REPORT – REVIEW OF THE YEARUnilever Annual Report and Accounts 2021

Our performance continued

Non-financial performance

We're at the early stages of delivering against our Compass
commitments. Further commentary can be found on pages 18 to 31.

Improve the health of the planet

Climate action

Target

2021

2020

2019

Zero GHG emissions in our operations by 2030
(% change in tonnes of GHG emissions from
energy and refrigerant use since 2015)(a)

-100% -64% -58%

-42%

Halve GHG impact of our products across the
lifecycle by 2030 (% change in grams of CO2e
per consumer use since 2010)

-50% -14%†

-10%

-8%

Protect and regenerate nature

Target

2021

2020

2019

Help protect and regenerate 1.5 million

hectares of land, forests and oceans by 2030 1.5m 0.1m

100% sustainable sourcing of our key
agricultural crops (% purchased)(b)

100%

79%

–

Waste-free world

Target

2021

2020

2019

50% virgin plastic reduction by 2025,
including an absolute reduction of 100,000
tonnes (% change in total tonnes of virgin
plastic used vs 2018 baseline)(c)(d)

100% reusable, recyclable or compostable
plastic packaging by 2025 (% of total tonnes
of reusable, recyclable or compostable plastic
packaging used)(c)(e)

-50% -16%

–

100%

53%

52%

50%

Maintain zero non-hazardous waste to
landfill in our factories (% disposed)

Halve food waste in our operations by 2025
(% change since 2019)

-50%

-3%

–

Improve people’s health, confidence and wellbeing

Positive nutrition

Target

2021

2020

2019

Double the number of products sold that
deliver positive nutrition by 2025 (% of
servings sold)

54%

41%

–

Unilever Annual Report and Accounts 202135

Improve people’s health, confidence and wellbeing continued

Positive nutrition

Target

2021

2020

2019

70% of our portfolio to meet WHO-aligned
nutritional standards by 2022 (% of sales
by volume)

70%

63%†

61%◊

56%Δ

95% of packaged ice cream to contain no
more than 22g total sugar per serving by 2025
(% of sales by volume)

95%

89%

–

95% of packaged ice cream to contain no
more than 250 kcal per serving by 2025
(% of sales by volume)

95%

94%

93%

85% of our Foods portfolio to help consumers
reduce their salt intake to no more than
5g per day by 2022 (% of sales by volume)

85%

81%†

77%

70%

Health and wellbeing

Target

2021

2020

2019

Take action through our brands to improve
health and wellbeing and advance equity
and inclusion, reaching 1 billion people
per year by 2030 (number of people
reached through brand communications
and initiatives)

1bn

686m

–

Contribute to a fairer and more socially inclusive world

Equity, diversity and inclusion

Target

2021

2020

2019

Spend €2 billion annually with diverse
businesses worldwide by 2025

€2bn €445m

–

Future of work

Target

2021

2020

2019

Reskill or upskill our employees with future-fit
skills by 2025 (% of employees with future-fit
skills)

100%

–

†

◊

This metric was subject to external independent limited assurance by PriceWaterhouseCoopers LLP (‘PwC’) in 2021. For PwC's 2021 Limited Assurance report and the
2021 Unilever Basis of Preparation for assured metrics see www.unilever.com/planet-and-society/sustainability-reporting-centre/independent-assurance.
This metric was subject to external independence limited assurance by PwC in 2020. For details and 2020 Basis of Preparation, see www.unilever.com/planet-and-
society/sustainability-reporting-centre/reporting-archive.
This metric was subject to external independence limited assurance by PwC in 2019. For details and 2019 Basis of Preparation, see www.unilever.com/planet-and-
society/sustainability-reporting-centre/reporting-archive.

(a) Restated 2020 and 2019 figures due to a change in alignment of our renewable electricity reporting with the updated RE100 guidance. See page 51 for more

information.

(b) This is a new metric which reflects the revised scope of our sustainable sourcing programmes. Previously reported sustainable sourcing metrics are not comparable.
(c) For the vast majority of products in scope, we have used the actual weight of plastic packaging sold to calculate this metric. For the remainder, we estimate the weight

using the average packaging weight of similar products.

(d) For our 2018 baseline, we calculated the weight of plastic packaging sold for around half of products in scope. For the remainder, we estimated the weight of

packaging sold by extrapolation using sales volumes.

(e) Refers to ‘actual recyclability’ of plastic packaging, meaning that it is both technically possible to recycle the material; and that there are established examples to

recycle the material in the region where it is sold.

STRATEGIC REPORT – REVIEW OF THE YEARUnilever Annual Report and Accounts 202136

Financial review

Good performance in a challenging operating environment.

2021 performance

The Group generated turnover of €52.4 billion, operating profit
of €8.7 billion, net profit of €6.6 billion and free cash flow of
€6.4 billion.

Turnover increased 3.4%. Underlying sales growth was 4.5%,
there was a net positive impact of 1.3% from acquisitions
and disposals and a negative currency impact of 2.4% driven
by weakening of currencies in our key markets such as US,
Turkey, Brazil and India. The growth was competitive and was
delivered through focus on our strategic choices. Our thirteen
€1 billion brands grew 6.4%. The US, India and China, three
of our key growth markets, grew at 3.7%, 13.4% and 14.3%
respectively. Our underlying sales growth in eCommerce(a)
was 44%. The major challenge of 2021 was the significant rise
of input costs. We responded with pricing actions, delivering
underlying price growth of 2.9%. Covid-19 continued to impact
the operating environment, with new variants resulting
in restrictions in some of our key markets which impacted
consumer and channel dynamics.

Acquisition and disposal activities made a positive
contribution of 1.3% to turnover. Our 2021 acquisitions included
Paula's Choice and Onnit, helping to re-shape our portfolio
into the high growth spaces of Prestige beauty and Functional
nutrition respectively. On 18 November 2021, we entered into
an agreement to sell our global tea business, ekaterra, to CVC
Capital Partners Fund VIII for €4.5 billion on a cash-free, debt-
free basis. More details on acquisitions and disposals are in
note 21 on pages 161 to 163.

Emerging markets underlying sales grew by 6.7%, driven
by India and China. Latin America grew high-single digit,
led by price. South East Asia declined following tough
Covid-19 restrictions throughout the year. Developed
markets underlying sales grew by 1.5% led by a competitive
performance in US. Europe grew slightly from both price
and volume.

Operating profit was €8.7 billion which included €0.9 billion
of non-underlying items, primarily restructuring costs and
acquisition and disposal related costs. Restructuring costs
of €0.6 billion are comprised of supply chain optimisation
projects to improve gross margin and improve network agility,
and organisational change projects to reduce overheads.

Underlying operating profit was €9.6 billion, an increase of
2.9%. This included an unfavourable currency impact of 4.3%.
Underlying operating margin decreased by 10bps. Gross
margin decreased by 120bps reflecting very high inflation
in raw material, packaging and distribution costs globally.
Brand and marketing investment and overheads contributed
90bps and 20bps to underlying operating margin respectively.
There was an improvement in underlying operating margin
when excluding currency impact. In line with our multi-year
financial framework, we delivered savings of €2 billion and our
profit growth was ahead of our underlying sales growth on a
comparable basis.

Free cash flow was €6.4 billion compared to €7.7 billion in the
prior year. Low levels of capital expenditure and favourable
working capital movements in 2020 were not repeated.

(a) eCommerce sales are defined as online sales made by Unilever to our
consumers or customers either directly or through platforms as well as
an estimate of our brands' sales through our customers' own websites.

Highlights for the year ended

Turnover (€ million)

21,901

21,124

19,971

19,140

10,572

10,460

52,444

50,724

Beauty & Personal Care

Foods & Refreshment

Home Care

Group

2021

2020

2021

2020

2021

2020

2021

2020

Underlying sales growth (%)

Underlying volume growth (%)

Underlying price growth (%)

Operating profit (€ million)

Underlying operating profit (€ million)

Operating margin (%)

Underlying operating margin (%)

Return on assets (%)

Free cash flow (€ million)

3.8

0.8

3.0

4,471

4,742

20.4

21.7

166

1.2

—

4,311

4,591

20.4

21.7

140

5.6

2.9

2.7

2,937

3,477

14.7

17.4

1.3

0.1

1.1

2,749

3,257

14.4

17.0

3.9

0.7

3.1

1,294

1,417

12.2

13.4

172

4.5

5.1

-0.6

1,243

1,519

11.9

14.5

129

4.5

1.6

2.9

8,702

9,636

16.6

18.4

123

1.9

1.6

0.3

8,303

9,367

16.4

18.5

102

6,393

7,671

Unilever Annual Report and Accounts 2021
Divisional review

Beauty & Personal Care

Turnover increased 3.7%. Underlying sales growth was 3.8%,
there was a net positive impact of 2.7% from acquisitions and
disposals and a negative currency impact of 2.8%.

All categories delivered good growth apart from skin
cleansing which declined following the elevated demand in
the prior year. Skin care grew high-single digit with channels
reopening in 2021. Vaseline performed strongly throughout
the year, supported by several premium innovations across
brightening, therapeutics and hydration. Deodorants grew
as the market continued to recover, with good growth and
restored competitiveness in North America. Rexona relaunched
its core deodorant range with 72-hour non-stop protection
against sweat and body odour. Hair care grew mid-single digit,
with Sunsilk, Dove and CLEAR contributing and styling in North
America restored to competitive growth. Dove grew high-
single digit and is now a €5 billion brand. Oral care grew with
good performance in South Asia and Africa. Prestige beauty
delivered strong double-digit growth in 2021 benefiting from
eCommerce and a recovery in beauty channels compared
to the prior year. New innovations in Prestige beauty include
Dermalogica's biolumin-c and sound sleep cocoon and REN’s
zero waste packaging. Prestige beauty reached €1.0 billion
turnover in 2021 if we include a full year of Paula’s Choice.
Functional nutrition(a) grew double-digit with good growth
in Liquid I.V. and Olly, and reached €1.5 billion turnover if we
include a full year of Onnit.

(a)

Includes vitamins, minerals & supplements which is reported in Beauty
& Personal Care and Health Foods Drinks which is reported in Foods
& Refreshment.

In focus
Our multi-year financial
framework

We will deliver long-term value creation
by continuing to evolve our portfolio and
driving earnings growth, a strong cash flow
and a growing dividend. We expect to do
this through:

▪ Underlying sales growth ahead of our

markets, delivering USG in the range of 3%
to 5%

▪ Profit growth ahead of sales growth, on a

comparable basis

▪ Sustained strong cash flow over the long

term

▪ Savings of €2 billion per year from our

well-established Fuel for Growth savings
programmes

▪ Restructuring investment of around €1

billion for 2021 and 2022; lower thereafter

▪ Return on invested capital (ROIC) in the

mid-to-high teens

▪ Net debt to underlying EBITDA at around 2x

Underlying operating profit increased by €151 million. This was
due to a €169 million impact from the growth in turnover and
€18 million due to negative gross margin particularly impacted
by high material inflation in palm oil. This was partially offset
by reduction in brand and marketing investment although we
benefited from efficiencies in advertising production costs.
Non-underlying items were €271 million, €9 million lower than
the prior year due to lower restructuring costs. Operating profit
increased by €160 million.

Foods & Refreshment

Turnover increased 4.3%. Underlying sales growth was 5.6%,
there was a net positive impact of 0.6% from acquisitions and
disposals and a negative currency impact of 1.8%.

Ice cream grew mid-single digit. Growth was driven by out-
of-home products, with in-home ice cream flat as we lapped
double-digit prior year growth. Magnum and Ben & Jerry’s
each grew high-single digit. Ben & Jerry's is now a €1 billion
brand. Our Ice Cream Now business which catered to the
rise of 'in-home' eating by quickly delivering our brands to
consumers in 35 countries, grew 60% in 2021. Food solutions
recovered well, with double-digit growth, although Covid-19
variants continued to drive uncertainty in the out-of-home
channel. In-home savoury saw a slight decline in growth,
following elevated demand in the prior year. Our largest food
brand Knorr grew high-single digit across in-home and out-
of-home channels through innovations such as zero salt stock
cubes and Rinde Más in Latin America, a plant-based product
that extends the yield of meat dishes while adding flavour.
Dressings brand Hellmann's grew double-digit for the second
consecutive year. Our retained tea business grew double-digit.

Underlying operating profit increased by €220 million. This
was due to a €141 million impact from the growth in turnover
and €79 million driven by lower overheads and brand
and marketing investment as a percentage of turnover,
despite a reduction in gross margin as a result of high input
cost inflation. Non-underlying items were €540 million,
€32 million higher than prior year due to step up in
acquisition and disposal related costs partially offset by lower
restructuring costs. Operating profit increased by €188 million.

Home Care

Turnover increased 1.1%. Underlying sales growth was 3.9%
with a negative currency impact of 2.6%.

In fabric care, mid single-digit growth in fabric cleaning and
low-single digit growth in fabric enhancers was led by South
Asia and Latin America. We continued to see good innovation
performance from dilutable laundry liquids across Latin
America, under the OMO brand. Capsule and liquid formats
continued to grow well, and in China OMO became the
leading capsules brand in traditional retail and second-largest
in eCommerce. Underlying sales in home and hygiene declined
mid-single digit as we lapped strong performance for hygiene
products in 2020, but home and hygiene continued to trade
ahead of pre-pandemic levels.

Underlying operating profit decreased by €102 million. This
was due to a €16 million positive impact from the growth in
turnover which was more than offset by €118 million impact
from reduction in gross margin as a result of high cost inflation.
This was partially offset by lower brand and marketing
investment, following a step up in 2020 as we invested behind
high demand hygiene categories. Non-underlying items were
€123 million, €153 million lower than prior year due to lower
restructuring costs. Operating profit increased by €51 million.

STRATEGIC REPORT – REVIEW OF THE YEARUnilever Annual Report and Accounts 202138

Financial review continued

Cash flow

Cash flow from operating activities decreased by €0.6 billion
primarily as a result of an unfavourable working capital
movement. While we maintained our enhanced working capital
discipline, the favourable working capital we saw due to the
focus on receivables in 2020 during the Covid-19 pandemic was
not repeated.

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*

€ million

2021

8,702

1,763

(47)

(183)

(61)

161

(53)

2020

8,303

2,018

680

(182)

(53)

108

(1)

10,305

10,933

(2,333)

(1,875)

(1,239)

(340)

6,393

(932)

(455)

7,671

Net cash flow (used in)/from investing activities

(3,246)

(1,481)

Net cash flow (used in)/from financing activities

(7,099)

(5,804)

* 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 39 to 43.

Income tax paid increased by €0.5 billion compared to the prior
year due to country tax rate mix effect, early payment of tax in a
few countries relating to the ekaterra separation, and a one-off
tax audit payment to the UK tax authorities.

Net cash flow used in investing activities was €3 billion
compared to €1.5 billion in the prior year driven by acquisitions,
capital expenditure and purchase of financial assets. Capital
expenditure increased in 2021 following investment returning to
normal levels.

Net cash flow used in financing activities was €7.1 billion
compared to €5.8 billion in the prior year primarily due to
€3 billion share buybacks. In 2021 borrowings net of repayments
was €1.6 billion higher than in the prior year primarily to support
the share buybacks.

Goodwill and intangible assets were €38.6 billion. This was
an increase of €3.7 billion compared to the prior year. The
increase was driven by acquisitions which contributed €2.5
billion and a positive impact from currency of €1.9 billion offset
by movement of €0.9 billion of goodwill and intangible assets
relating to classifying ekaterra as held for sale. The Paula's Choice
acquisition was the primary driver of the increase in goodwill and
intangible assets. Total consideration paid was €1,832 million
comprised of €1,818 million cash paid on the completion date
and €14 million of deferred consideration. Intangible assets and
goodwill arising from this acquisition were €1.6 billion and €0.6
billion respectively. See note 21 on pages 161 to 163 for more.

Other non-current assets increased by €2.5 billion primarily as a
result of positive investment returns on pension assets. Current
assets increased by €1.2 billion primarily due to the classification
of ekaterra assets under held for sale offset by a decrease in cash
and cash equivalents of €2.1 billion driven by share buybacks.

Non-controlling interest increased by €0.3 billion driven by an
increase in profits.

Net debt

Closing net debt was €25.5 billion compared to €20.9 billion
as at 31 December 2020 driven by lower free cash flow, the
share buybacks and acquisitions including Paula’s Choice.
Net debt to underlying earnings before interest, taxation,
depreciation and amortisation (UEBITDA) was 2.2x as at
31 December 2021 versus 1.8x in the prior year. Underlying
EBITDA means operating profit before the impact of
depreciation, amortisation and non-underlying items within
operating profit. This is primarily used to assess our leverage
level as referenced in the multi-year financial framework.

Movement in net pension liability/asset

The table below shows the movement in net pension liability/
asset during the year. Pension assets net of liabilities were
in surplus of €3.0 billion at the end of 2021 compared with a
surplus of €0.3 billion at the end of 2020. The increase was
driven by positive investment returns on pension assets.
Liabilities remained unchanged overall, with a decrease
from higher interest rates offsetting an increase due to
higher inflation.

Balance sheet

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

1 January

Current service cost

Employee contributions

Actual return on plan assets (excluding interest)

Net interest cost

Actuarial loss

Employer contributions

Currency retranslation

Other movements(a)

31 December

€ million

2021

287

(228)

1,958

(10)

464

394

127

(12)

2,993

(a) Other movements relate to special termination benefits, changes in asset

ceiling, past service costs including losses/(gains) on curtailment, settlements
and other immaterial movements. For more details see note 4B on pages 125
to 131.

€ million

2021

2020

38,591

34,941

19,103

16,561

17,401

16,157

75,095

67,659

24,778

20,592

30,571

29,412

55,349

50,004

17,107

15,266

2,639

2,389

19,746

17,655

75,095

67,659

Unilever Annual Report and Accounts 202139

Further details are set out in the following notes to the
consolidated financial statements: note 10 on pages 138 to 140,
note 15C on page 147 and 148, and note 20 on page 160 and 161.
We are satisfied that our financing arrangements are adequate
to meet our short term and long term cash requirements. In
relation to the facilities available to the Group, borrowing
requirements do not fluctuate materially during the year and
are not seasonal.

Guaranteed US debt securities

At 31 December 2021 the Group had in issue US$12.1 billion (2020:
US$11.5 billion; 2019: US$12.35 billion) bonds in connection with a
US shelf registration. See page 198 for more information on these
bonds and related commentary on guarantor information.

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 reconciliation
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 year average
exchange rates into euro, except for the local currency of entities
that operate in hyperinflationary economies. These currencies are
translated into euros using the prior year closing exchange rate
before the application of IAS 29.

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

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$)

Annual average
rate in 2021

Annual average
rate in 2020

6.366

7.663

87.599

16983

58.401

0.861

1.187

5.781

7.862

84.100

16557

56.447

0.888

1.135

Finance and liquidity

Approximately €0.4 billion (or 11%) 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 149 to 155. The remaining €3 billion
(or 89%) 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 €83 million (2020: €98 million, 2019:
€146 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. 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 2021 were
$7,965 million. Additional bilateral undrawn revolving 364-day
credit facilities of €1,500 million were signed in December 2021.
Further information on liquidity management is set out in note
16A to the consolidated financial statements.

Material cash commitments from contractual and other
obligations

The following table shows the amount of our contractual and
other obligations as at 31 December 2021. The material cash
commitments from contractual and other obligations arise
from our borrowings which include bonds, commercial paper,
bank and other loans, interest on these borrowings and trade
payables and accruals.

€ million
Due
within 1
year

€ million
Due in
1-3 years

€ million
Due in
3-5 years

€ million
Due in
over 5
years

€ million
2021

Bonds

23,892

2,359

5,091

4,529

11,913

Lease liabilities

1,939

426

14,443

14,320

Commercial paper,
bank and other
loans

Interest on
financial liabilities

Trade payables
and accruals

Other lease
commitments

Purchase
obligations(a) &
other long-term
commitments

Others (b)

Total

4,357

4,338

—

3,564

451

797

639

1,677

621

715

218

404

488

460

208

501

—

159

2,561

589

885

163

51,504

22,998

7,576

6,289

14,641

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

Includes other financial liabilities and deferred consideration for acquisitions.

STRATEGIC REPORT – REVIEW OF THE YEARUnilever Annual Report and Accounts 202140

Financial review continued

In the following sections we set out our definitions of the
following non-GAAP measures and provide reconciliation
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, changes in currency and price growth in
excess of 26% in hyperinflationary economies. Inflation of 26% per
year compounded over three years is one of the key indicators
within IAS 29 to assess whether an economy is deemed to be
hyperinflationary. 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.

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

2021 vs 2020 (%)

Turnover growth(a)

Effect of acquisitions

Effect of disposals

Effect of currency-related items,

of which:

Exchange rate changes

Extreme price growth in hyperinflationary markets(b)

Underlying sales growth(b)

2020 vs 2019 (%)

Turnover growth(a)

Effect of acquisitions

Effect of disposals

Effect of currency-related items,

of which:

Exchange rate changes

Extreme price growth in hyperinflationary markets(b)

Underlying sales growth(b)

2019 vs 2018 (%)

Turnover growth(a)

Effect of acquisitions

Effect of disposals

Effect of currency-related items,

of which:

Exchange rate changes

Extreme price growth in hyperinflationary markets(b)

Underlying sales growth(b)

Beauty &
Personal Care

Foods &
Refreshment

Home Care

3.7

2.7

—

(2.8)

(3.0)

0.2

3.8

(3.4)

0.9

—

(5.4)

(5.6)

0.2

1.2

6.0

0.9

—

2.4

1.7

0.6

2.6

4.3

0.8

(0.2)

(1.8)

(2.1)

0.3

5.6

(0.8)

2.7

(0.4)

(4.2)

(4.6)

0.5

1.3

(4.6)

0.6

(7.5)

1.0

(3.5)

4.7

1.5

1.1

—

(0.1)

(2.6)

(2.9)

0.3

3.9

(3.4)

0.2

(0.2)

(7.5)

(7.8)

0.3

4.5

6.9

0.3

—

0.4

(0.3)

0.7

6.1

Group

3.4

1.4

(0.1)

(2.4)

(2.6)

0.3

4.5

(2.4)

1.4

(0.2)

(5.4)

(5.7)

0.3

1.9

2.0

0.7

(3.0)

1.5

(0.7)

2.2

2.9

(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) Underlying price growth in excess of 26% per year in hyperinflationary economies has been excluded when calculating the underlying sales growth in the tables

above, and an equal and opposite amount is shown as extreme price growth in hyperinflationary markets.

Underlying price growth

Underlying volume 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 excess
of 26% per year in hyperinflationary economies as explained in
USG above.

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.

Unilever Annual Report and Accounts 2021The relationship between USG, UVG and UPG is set out below:

Underlying earnings per share

Underlying volume growth (%)

Underlying price growth (%)

Underlying sales growth (%)

2021 vs
2020

2020 vs
2019

2019 vs
2018

1.6

2.9

4.5

1.6

0.3

1.9

1.2

1.6

2.9

Refer to page 36 for the relationship between USG, UVG and UPG
for each of the Divisions.

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
items within operating profit classified here due to their
nature and frequency.

▪ Non-underlying items not in operating profit but within

net profit are: net monetary gain/(loss) arising from
hyperinflationary economies and significant and unusual
items in net finance cost, 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 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 Group reconciliation of operating profit to underlying
operating profit is as follows:

Underlying earnings per share (underlying EPS) is calculated as
underlying profit attributable to shareholders’ equity divided by
the diluted average number of ordinary shares. 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 for reconciliation of net profit attributable to shareholders’
equity to underlying profit attributable to shareholders' equity.

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 table:

Taxation

Tax impact of:

€ million

2021

1,935

2020

1,923

Non-underlying items within operating profit(a)

219

272

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

(41)

2,113

8,556

(146)

2,049

7,996

934

1,064

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

(191)

(175)

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

9,363

22.6%

8,921

23.0%

€ million

Underlying effective tax rate

Operating profit

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

Underlying operating profit

Turnover

Operating margin

Underlying operating margin

2021

8,702

934

9,636

2020

8,303

1,064

9,367

2019

8,708

1,239

9,947

52,444

50,724

51,980

16.6%

18.4%

16.4%

18.5%

16.8%

19.1%

Further details of non-underlying items can be found in note 3 on
page 124 of the consolidated financial statements.

Refer to note 2 on page 121 for the reconciliation of operating
profit to underlying operating profit by division. For each division,
operating margin is computed as operating profit divided by
turnover and underlying operating margin is computed as
underlying operating profit divided by turnover.

(a) Refer to note 3 for further details on these items.

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 growth in
excess of 26% per year in hyperinflationary economies divided by
the diluted average number of ordinary share units. This measure
reflects the underlying earnings for each ordinary share unit of
the Group in constant exchange rates.

STRATEGIC REPORT – REVIEW OF THE YEARUnilever Annual Report and Accounts 202142

Financial review continued

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 price growth in excess of 26% per year in
hyperinflationary economies(b)

Constant underlying earnings attributable to
shareholders’ equity

€ million

2021

2020

6,839

6,532

210

(42)

7,007

6,551

Diluted average number of share units (millions
of units)

2,609.6

2,629.8

Total financial liabilities

Current financial liabilities

Non-current financial liabilities

Cash and cash equivalents as per
balance sheet

Cash and cash equivalents as per
cash flow statement

Add: bank overdrafts deducted
therein

Less: cash and cash equivalents
held for sale(a)

Other current financial assets

Non-current financial assets
derivatives that relate to financial
liabilities

€ million

2021

(30,133)

(7,252)

(22,881)

3,415

3,387

106

(78)

1,156

2020

(27,305)

(4,461)

(22,844)

5,548

5,475

808

Constant underlying EPS (€)

2.68

2.49

Net debt

(25,510)

(20,928)

(a) See note 7.
(b) See pages 39 and 40 for further details.

Free cash flow

Free cash flow (FCF) is defined as cash flow from operating
activities, less income taxes paid, net capital expenditure and net
interest payments. 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 cash flow from operating activities to FCF is
as follows:

(a) Cash and cash equivalents held for sale of €78m are net of bank overdraft of

€12m.

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.

€ million

Cash flow from operating activities

10,305

10,933

10,641

€ million

2021

2020

2019

Operating profit

(2,333)

(1,875)

(2,532)

(1,239)

(340)

6,393

(932)

(455)

7,671

(1,429)

(548)

6,132

(3,246)

(1,481)

(2,237)

(7,099)

(5,804)

(4,667)

Intangible assets

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

Underlying operating profit before
tax

Tax on underlying operating profit(a)

Underlying operating profit after
tax

Goodwill

Property, plant and equipment

Net assets held for sale

Inventories

Trade and other current receivables

Trade payables and other current
liabilities

Period-end invested capital

Average invested capital for the
period

Return on average invested
capital

2021

8,702

934

9,636

(2,175)

7,461

20,330

18,261

10,347

1,581

4,683

5,422

2020

8,303

1,064

9,367

(2,154)

7,213

18,942

15,999

10,558

4,462

4,939

(14,861)

45,763

(14,132)

40,795

43,279

40,029

17.2%

18.0%

(a) Tax on underlying operating profit is calculated as underlying operating profit
before tax multiplied by underlying effective tax rate of 22.6% (2020: 23.0%)
which is shown on page 41.

Net debt 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.

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, and non-current financial
asset derivatives that relate to financial liabilities.

Income tax paid

Net capital expenditure

Net interest payments

Free cash flow

Net cash flow (used in)/from
investing activities

Net cash flow (used in)/from
financing activities

Net debt

Unilever Annual Report and Accounts 202143

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.

2021

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

€ million
Beauty &
Personal Care

€ million
Foods &
Refreshment

4,742

(1,070)

3,672

3,956

2,157

2,264

3,477

(785)

2,692

4,424

678

1,761

2,065

Trade payables and other current liabilities

(5,957)

(5,726)

Period-end assets (net)

Average assets for the period (net)

Division return on assets

2020

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

2,422

2,206

166%

4,591

(1,056)

3,535

3,763

1,817

2,057

3,202

3,219

84%

3,257

(749)

2,508

4,895

1,894

1,864

Trade payables and other current liabilities

(5,649)

(5,428)

Period-end assets (net)

Average assets for the period (net)

Division return on assets

1,990

2,523

140%

3,235

3,614

69%

€ million
Home
Care

1,417

(320)

1,097

1,967

—

765

1,093

(3,178)

647

638

172%

1,519

(349)

1,170

1,900

751

1,018

(3,055)

629

906

129%

€ million
Total

9,636

(2,175)

7,461

10,347

680

4,683

5,422

(14,861)

6,271

6,063

123%

9,367

(2,154)

7,213

10,558

4,462

4,939

(14,132)

5,854

7,043

102%

Other information

Auditor's report

Accounting standards and critical accounting policies

The consolidated financial statements have been prepared in
accordance with IFRS as adopted by the UK and IFRS as issued by
the International Accounting Standards Board. The accounting
policies are consistent with those applied in 2020 except for the
recent accounting developments as set out in note 1 on pages
118 to 119. The critical accounting estimates and judgements
and those that are most significant in connection with our
financial reporting are set out in note 1 on pages 118 to 119.

The Independent Auditor’s Report issued by KPMG LLP on the
consolidated results of the Group, as set out in the financial
statements, was unqualified and contained no exceptions or
emphasis of matter. For more details see pages 107 to 113.

2020 financial review

The financial review for the year ended 31 December 2020 can
be found on pages 36 to 43 of our Annual Report and Accounts
on Form 20-F filed with the United States Securities and Exchange
Commission on 3 March 2021.

STRATEGIC REPORT – REVIEW OF THE YEARUnilever Annual Report and Accounts 202144

Our 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 in
our markets. 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.

We have a framework of Code Policies that underpins the
Code of Business Principles and sets 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, which are key controls in mitigating
these risks. Examples include health and safety, accounting
and reporting, and financial risk management.

Unilever’s appetite for risk is driven by the following:
▪ Our growth should be consistent, competitive, profitable

and responsible.

▪ Our actions on issues such as plastic and climate change
must reflect their urgency, and not be constrained by the
uncertainty of potential impacts.

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

Principles and Code Policies.

▪ Our ambition to continuously improve our operational

efficiency and effectiveness.

▪ Our aim to maintain a minimum A/A2 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 CEO and CFO.

Organisation
The Board has overall accountability for the management
of risk and for reviewing the effectiveness of Unilever’s risk
management and internal control systems. The Board has
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 ULE, which takes active responsibility for
focusing on the principal areas of risk to Unilever. The Board
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 pages 8 to 9). 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 rests with senior
management across Divisions, geographies and functions.

Our assessment of risk considers both short- and long-term
risks, including how these risks are changing, together with
emerging risk areas. These are reviewed on an ongoing basis,
and formally by senior management and the Board at least
once a year.

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.

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 Board an objective and independent review of the
effectiveness of risk management and internal control systems
throughout Unilever.

Board assessment of compliance with the risk
management frameworks
The Board, 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 Board, through the Audit Committee, has 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 Board.

Details of the activities of the Audit Committee in relation to
this can be found in the Report of the Audit Committee on
pages 78 to 79.

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.

Further statements on compliance with the specific risk
management and control requirements in the UK Corporate
Governance Code and the US Securities Exchange Act (1934)
and the US Sarbanes-Oxley Act (2002) can be found on
page 77.

Unilever Annual Report and Accounts 202145

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 43. These
factors have also carefully considered potential further
implications of Covid-19. In addition, we describe in notes
15 to 18 on pages 144 to 159 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. This assessment
also included reviewing and understanding the mitigation
factors in respect of each principal risk. The potential financial
impact of further Covid-19 related restrictions on both our

overall funding capacity and our principal risks has also been
considered given the wide range of potential outcomes. The
risks and mitigating factors are summarised on pages 46 to 50.

The viability assessment has three 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,

▪ Second, they considered the current debt facilities and debt
headroom over the viability period, assuming that any debt
maturing can be re-financed at commercially acceptable
terms; and

▪ Third, they considered the potential impact of severe but
plausible scenarios over this period which included the
potential ramifications that Covid-19 could have across the
different areas of the Group, 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, reputational
damage from not progressing against our plastic
packaging commitments, the lost cost and growth
opportunities from not keeping up with technological
changes and increased operational costs from climate
change; 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 major global incident affecting a key
sourcing unit and significant water shortages
in our key developing markets.

Reduced sales in two of our Divisions was
considered along with damage to our largest
brand and disruption to supply chain.

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

The complete loss of all of our turnover in our
largest geographic market was considered
along with destruction of a key sourcing
unit and increased operational costs due to
water shortage.

• Economic and political instability
• Supply chain
• Climate change

Lack of progress against our plastic
packaging ambitions and the loss of our
three largest customers.

Significant reputational damage was
considered with the impact of losing our
three key customers.

• Plastic packaging
• Brand preference
• Customer

Cyber-attack causing a temporary shutdown
of our systems and the impact on profit
if management failed to deliver a major
transformation project.

Loss of turnover for two weeks and ongoing
reputational damage and loss of confidence
from our customers and consumers.
Potential higher cost on delayed
transformation.

• System and information
• Business transformation

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, the Group’s debt headroom and funding profile
was assessed. None of the future outlooks considered
resulted in significant liquidity headroom issues,
primarily because:

▪ the Group has a healthy balance of short-term and

long-term debt programmes, with repayment profiles
ensuring short-term commercial paper maturities do not
exceed €0.5 billion in any given week and long-term debt
maturities do not exceed €4 billion in any given year
▪ the Group has $8.0 billion of committed credit facilities

with a maturity of 364 days which are used for backing up
our commercial paper programmes. Additional revolving
364 day facilities of €1.5 billion have also been taken out
in 2021 to support liquidity headroom.

▪ Thirdly, 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.

STRATEGIC REPORT – REVIEW OF THE YEARUnilever Annual Report and Accounts 202146

Our risks continued

Principal risks
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. Climate change is a principal risk to Unilever
as described on page 47.

Our principal risks include risks that could impact our business
in the short term (i.e. the next two years), medium term (i.e. the
next three to ten years) or over the longer term (i.e. beyond
ten years).

Our principal risks have not changed this year. We also reflect
on whether we think the level of risk associated with each of
our principal risks is increasing or decreasing. There are three
principal risks where we believe there is an increased level of
risk compared with last year:
▪ Business transformation: there is an increase in the scale

of projects in 2022, e.g. the disposal of ekaterra, new
organisational model and the transformation of our core
business processes to create a superior customer experience.

▪ Economic and political instability: heightened risk due to

inflationary and supply chain pressures, possible withdrawal
of state fiscal stimulus and differing recoveries from Covid-19
between countries.

▪ Systems and information: the cyber-attack industry is

becoming increasingly professionalised.

The potential impact and likelihood of certain principal risks
remain heightened due to the Covid-19 pandemic. These risks
are the safety and wellbeing of our employees, continuity
of operations, product relevance, channel capabilities and
IT availability.

Biodiversity loss has the characteristics of an emerging risk. A
loss of forests and soil due to potential physical and regulatory
risks could make future harvests more difficult and expensive
in the long term (see pages 59 to 60).

We set out below certain mitigating actions that we believe
help us to manage our principal risks. However, we may not
be successful in deploying some or all of these mitigating
actions. 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.

Risk

Brand
preference

Risk description

Management of risk

Our 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. We see
a growing trend for consumers preferring brands
which both meet their functional needs and have
an explicit social or environmental purpose.

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.

The Covid-19 pandemic has driven significant
changes in consumer habits and demand (for
example, an increase in hygiene-related products
and a reduction in out-of-home food products),
which is requiring a continuing and rapid evolution
of our brands to ensure we remain competitive.

Level of risk

No change

We monitor external market trends and collate
consumer, customer and shopper insights in
order to develop category and brand strategies.
We invest in markets and segments where we
have built, or are confident that we can build,
competitive advantage.

Our brand communication strategies are
designed to optimise digital communication
opportunities. We develop and customise
brand messaging content specifically for each
of our chosen communication channels (both
traditional and digital) to ensure that our brand
messages reach our target consumers. Brand
teams are driving social purpose into their
brand’s proposition and communication.

Our Research and Development function actively
searches for ways in which to translate the
trends in consumer preference and taste into
new technologies for incorporation into future
products.

Our innovation management process converts
category strategies into projects which deliver
new products to market. We develop product
ideas both in-house and with selected partners
to enable us to respond to rapidly changing
consumer trends with speed.

Our strategy and our business plans are
designed to ensure that resources are prioritised
towards those categories and markets having
the greatest long-term potential for Unilever.
Our acquisition and disposal activity is driven
by our portfolio strategy with a clear, defined
evaluation process.

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 Divisions, 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.

Unilever Annual Report and Accounts 202147

Level of risk

No change

Risk

Risk description

Management of risk

Climate change

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

Climate change could impact our business in
various ways. Government action to reduce climate
change such as the introduction of a carbon tax,
land use regulations or product composition
regulations which restrict or ban certain GHG
intensive ingredients, could impact our business
through higher costs or reduced flexibility of
operations. Market risks associated with the energy
transition and rising energy prices could disrupt our
operations and increase costs.

Physical environment risks such as water scarcity
could impact our operations or reduce demand for
our products that require water during consumer
use. Increased frequency of extreme weather events
such as high temperatures, hurricanes or floods
could cause increased incidence of disruption to
our supply chain, manufacturing and distribution
network. If we do not take action, climate change
could result in increased costs, reduced profit and
reduced growth.

We monitor climate change and in 2021
we published our Climate Transition Action
Plan which provides details on how we are
reducing the carbon intensity of our operations,
developing products with a lower carbon
footprint or that require less water during
consumer use including details of how we will
achieve our GHG reduction targets which include
net zero emissions across our value chain and
zero emissions in our operations.

We are decarbonising our operations through
eco-efficiency measures, powering our factories
with renewable electricity, transitioning to
renewable energy for heating and cooling and
replacing climate harmful refrigerants. We invest
in new products and formulations so that our
products work with less water, poor quality water
or no water.

We monitor trends in raw material availability
and pricing due to short-term weather
impacts to ensure continued availability of
input materials and integrate weather system
modelling into our forecasting process.

We also monitor government policy and actions
to combat climate change and take proactive
action to minimise the impact on our business
and advocate for changes to public policy
frameworks consistent with the 1.5°C ambition
of the Paris Agreement.

Plastic
packaging

We use a significant amount of plastic to package
our products. A reduction in the amount of virgin
plastic we use, the use of recycled plastic and an
increase in the recyclability of our packaging are
critical to our future success.

We are committed to reducing the amount of
post-consumer plastic packaging waste going to
landfill. We have committed to ensuring 100% of
our plastic packaging is reusable, recyclable or
compostable by 2025.

No change

Both consumer and customer responses to the
environmental impact of plastic waste and
emerging regulations 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 source
recycled plastic for use in our packaging. We are
also dependent on the work of our industry partners
to create and improve recycling infrastructure
throughout the world.

Not only is there a risk around finding appropriate
replacement materials, but also 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

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.

The Covid-19 pandemic has driven a rapid increase
in online shopping, which means we need to
accelerate development of eCommerce capabilities
to remain competitive.

We aim to halve our use of virgin plastic by both
reducing usage and accelerating use of recycled
plastic. This requires us to redesign products
by considering multiple-use packs, wider use
of refills, recycling and using post-consumer
recycled materials in innovative ways.

We are working on innovative solutions through
new business models. We aim to collect
and process more plastic packaging than
we sell, enabled through driving systematic
change in circular thinking at an industry
level working with partners such as the Ellen
MacArthur Foundation. We are also working
with governments, industry partners, suppliers
and consumers to raise awareness and find
solutions to improve the recycling infrastructure
for plastics. We are helping consumers to
understand disposal methods and supporting
collection schemes and facilities.

We build and maintain trading relationships
across a broad spectrum of channels ranging
from centrally managed multinational
customers through to small traders accessed
via distributors in many emerging markets. We
identify changing shopper habits and build
relationships with new customers, such as those
serving the eCommerce channel.

We develop joint business plans with our key
customers that include detailed investment
plans and customer service objectives and we
regularly monitor progress.

We have developed capabilities for customer
sales and outlet design which enable us to find
new ways to improve customer performance
and enhance our customer relationships. We
invest in technology to optimise order and stock
management processes for our distributive
trade customers.

No change

STRATEGIC REPORT – REVIEW OF THE YEARUnilever Annual Report and Accounts 2021Risk description

Management of risk

Our risks continued

Risk

Talent

Supply chain

A skilled workforce and agile ways of working are
essential for the continued success of our business.

With the rapidly changing nature of work and skills,
there is a risk that our workforce is not equipped
with the skills required for the new environment.

Our ability to attract, develop and retain a diverse
range of skilled 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.

The wellbeing of our employees is vital to the
success of our business. Covid-19 continues to have
a significant impact on their wellbeing, therefore
helping our employees manage the impact of
Covid-19 on their lives and their ability to work
effectively requires continued focus.

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 Covid-19 pandemic is an adverse event that
has challenged and continues to challenge
the continuity of our supply chain. Maintaining
manufacturing operations whilst adhering to
changing local regulations and meeting enhanced
health and safety standards has proven possible but
has required significant management. In addition,
ensuring the operation of a global logistics network
for both input materials and finished goods has
presented challenges and requires continued focus
and flexibility.

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

Safe and high-
quality products

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

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

Labelling errors can have potentially serious
consequences for both consumer safety and brand
reputation. Therefore, on-pack labelling needs to
provide clear and accurate ingredient information in
order that consumers can make informed decisions
regarding the products they buy.

Level of risk

No change

We have an integrated management
development process which includes regular
performance reviews underpinned by a
common set of leadership behaviours, skills and
competencies. We have development plans to
upskill and reskill employees for future roles and
will bring in flexible talent to access new skills.

We have targeted programmes to attract and
retain top talent and we actively monitor our
performance in retaining a diverse talent pool
within Unilever.

We regularly review our ways of working to
drive speed and simplicity through our business
in order to remain agile and responsive to
marketplace trends.

We are moving to agile ways of working to
unlock internal capacity and prioritise work
based on growth and impact.

We have contingency plans designed to enable
us to secure alternative key material supplies
at short notice, to transfer or share production
between manufacturing sites and to use
substitute materials in our product formulations
and recipes.

We have policies and procedures designed to
ensure the health and safety of our employees
and the products in our facilities, and to
deal with major incidents including business
continuity and disaster recovery.

Commodity price risk is managed through
forward buying of traded commodities, other
appropriate hedging mechanisms and product
pricing. Trends are monitored and modelled
regularly and integrated into our forecasting
process.

Our product quality processes and controls
are comprehensive, from product design to
customer shelf. They are verified annually and
regularly monitored through performance
indicators that drive improvement activities.
Our key suppliers are externally certified and
the quality of material received is regularly
monitored to ensure that it meets the rigorous
quality standards that our products require.

In the event of an incident relating to the safety
of our consumers or the quality of our products,
incident management teams are activated in
the affected markets under the direction of our
product quality, science and communications
experts, to ensure timely and effective
marketplace action.

We have processes in place to ensure that the
data used to generate on-pack labelling is
compliant with applicable regulations and with
relevant Unilever labelling policies in order to
provide the clarity and transparency needed
for consumers.

Unilever Annual Report and Accounts 202149

Level of risk

Increase

Risk

Risk description

Management of risk

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.

Given the changes in the ways of working of all our
employees as well as our customers and suppliers
as a result of Covid-19, there has been an increased
reliance on certain elements of our IT infrastructure.
We are particularly reliant on third-party experts in
this space and thus the impact of Covid-19 on their
operations also poses a risk for us.

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. Continued digitalisation
of our business models and processes, together
with enhancing data management capabilities,
is a critical part of our transformation.

We have an extensive programme of transformation
projects. 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.

Business
transformation

To reduce the impact of external cyber-attacks
impacting our business we have firewalls and
threat monitoring systems in place, complete
with immediate response capabilities to mitigate
identified threats. We also maintain a global
system for the control and reporting of access
to our critical IT systems. This is supported by an
annual programme of testing of access controls.

We have policies covering the protection of
both business and personal information, as
well as the use of IT systems and applications
by our employees. Our employees are trained to
understand these requirements.

We also have a set of IT security standards
and closely monitor their operation to protect
our systems and information. Hardware that
runs and manages core operating data is fully
backed up with separate contingency systems to
provide real-time backup operations should they
ever be required.

We have standardised ways of hosting
information on our public websites and have
systems in place to monitor compliance with
appropriate privacy laws and regulations, and
with our own policies.

All acquisitions, disposals and global
organisational transformation projects are
sponsored by a member of the ULE. All such
projects have steering groups in place led by a
senior executive and regular progress updates
are provided to the ULE. Sound project disciplines
are used in all transformation projects and
these projects are resourced by dedicated and
appropriately qualified personnel.

The digitalisation of our business is led by
a dedicated specialist team together with
representatives from all parts of the business
to ensure an integrated and holistic approach.
A significant part of the organisational
transformation involves the transfer of activities
to third parties on and offshore. New ways of
working are being developed to manage this
new business model.

Unilever also monitors the volume of change
programmes under way in an effort to stagger
the impact on current operations and to ensure
minimal disruption.

Economic
and political
instability

Adverse economic conditions may affect one or
more countries, regions or may extend globally.
Unilever operates around the world 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.

The breadth of Unilever’s portfolio and our
geographic reach help to mitigate our exposure
to any particular localised risk. Our flexible
business model allows us to adapt our portfolio
and respond quickly to develop new offerings
that suit consumers’ and customers’ changing
needs during economic downturns.

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

We regularly update our forecast of business
results and cash flows and, where necessary,
rebalance investment priorities.

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

We believe that many years of exposure to
emerging markets have given us experience
of operating and developing our business
successfully during periods of economic and
political volatility.

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Our risks continued

Risk

Risk description

Management of risk

Treasury and
Tax

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

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

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

A material shortfall in our cash flow could
undermine Unilever’s credit rating, impair investor
confidence and restrict Unilever’s ability to raise
funds. In times of financial crisis, there is a further
risk that we may not be able to raise funds due to
market illiquidity.

We are exposed to counter-party risks with banks,
suppliers and customers, which could result in
financial losses.

Tax is a complex and evolving 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 and Profit
Shifting project, and the Digitalising Economy
Project, and further potential tax reform in
the European Union and the US.

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.

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.

A key element of our ethical approach to business
is to reduce inequality and promote fairness. Our
activities touch the lives of millions of people and it
is our responsibility to protect their rights and help
them live well.

The safety of our employees and the people and
communities we work with is critical. Failure to meet
these high standards could result in damage to
Unilever’s corporate reputation and business results.

Ethical

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.

Currency exposures are managed within
prescribed limits and by the use of financial
hedging instruments. Further, operating
companies borrow in local currency except
where inhibited by local regulations, lack of local
liquidity or local market conditions.

We seek to maintain access to global debt
markets through short-term and long-term
debt programmes. In addition, we maintain
significant undrawn committed credit facilities
for general corporate purposes as disclosed in
note 16A.

Group treasury regularly monitors exposure
to our banks, tightening counter-party limits
where appropriate. Unilever actively manages its
banking exposures on a daily basis. We regularly
assess and monitor counter-party risk in our
suppliers and customers and take appropriate
action to manage our exposures.

Our Global Tax Principles provide overarching
governance and we have a process in place
to monitor compliance with the Tax Principles.
We have a Tax Risk Framework in place which
sets out the controls established to assess
and monitor tax risk for direct and indirect
taxes. We monitor proposed changes in
taxation legislation and ensure these are taken
into account when we consider our future
business plans.

Our Code of Business Principles and our
Code Policies govern the behaviour of our
employees, suppliers, distributors and other
third parties who work with us. Our processes for
identifying and resolving breaches of our Code
of Business Principles and our Code Policies are
clearly defined and regularly communicated
throughout Unilever. Data relating to such
breaches is reviewed by the ULE and by relevant
Board Committees and helps to determine
the allocation of resources for future policy
development, process improvement, training
and awareness initiatives.

Our Responsible Sourcing Policy and Responsible
Business Partners Policy help us improve the lives
of the people in our supply chains by ensuring
human rights are protected and makes a healthy
and safe workplace a mandatory requirement
for our suppliers. We have detailed safety
standards and monitor safety incidents at the
highest level.

Through our Brands with Purpose agenda, a
number of our brands are taking action on
societal issues such as fairness and equality.

Unilever is committed to complying with the laws
and regulations of the countries in which we
operate. In specialist areas the relevant teams at
global, regional or local levels are responsible
for setting detailed standards and ensuring that
all employees are aware of and comply with
regulations and laws specific and relevant to
their roles.

Our legal and regulatory specialists are heavily
involved in monitoring and reviewing our
practices to provide reasonable assurance that
we remain aware of and in line with all relevant
laws and legal obligations.

Level of risk

No change

Unilever Annual Report and Accounts 2021Additional non-financial information
Climate change disclosures

Our Climate Transition Action
Plan: Annual Progress Report
Our Climate Transition Action Plan (CTAP) sets out our climate
strategy, defines our net zero and emission reduction goals,
and the actions we intend to take to meet them. Our goals
are to:
▪ Reduce in absolute terms our operational (Scope 1 and 2)
emissions by 100% by 2030 against a 2015 baseline;(a) with
an interim goal to achieve a 70% reduction by 2025 against
a 2015 baseline.

▪ Halve the full value chain emissions of our products on a

per consumer use basis by 2030 against a 2010 baseline.(b)

▪ Achieve net zero emissions covering Scope 1, 2 and 3

emissions by 2039.(c)

In the 2020s and 2030s, our primary focus will be to eliminate
emissions in our operations and reduce emissions across
our value chain(d) rather than purchasing carbon credits. It
is too early to estimate the amount of any residual value
chain emissions but our plan is to balance these with carbon
removals to achieve and maintain our net zero emissions goal.

We fully expect our approach to delivering our commitments
to evolve as science progresses and the societal debate on
net zero matures. For example, we’re currently considering
the recently issued guidance from the Science Based Targets
initiative on net zero targets.

See our website for our Climate Transition Action Plan

Our progress

To deliver the ambitious goals set out in our CTAP, we're
focusing our actions in four key areas, which form the basis of
this Annual Progress Report: our operations, our brands and
products, our value chain and our wider influence on society.

Our operations

Our first ambition is to eliminate operational Scope 1 and
2 emissions from our factories, offices and research labs
which make up approximately 2% of our GHG footprint. We've
reduced our operational emissions by 64% since 2015. This puts
us on track to achieve our interim milestone of a 70% reduction
by 2025 – see page 34 for our three-year performance. We're
taking action in a number of areas to decarbonise our
operations.

Eco-efficiency
For years we’ve invested in eco-efficiency projects across our
factories, reducing CO2 from energy per tonne of production
by 77% compared to 2008 and by 14% versus 2020. Recent
investments include improving energy efficiency of lighting
and manufacturing equipment, and installing heat recovery
systems. We've committed to align our future capital
expenditure with the Paris Agreement. As a first step, in 2021
we developed a bespoke digital tool to capture the GHG, water
and waste impact data of all capital expenditure projects.

Renewable electricity
Transitioning to renewable electricity is a significant driver of
emissions reduction in our operations. Our preference is to
support local renewable energy markets through purchasing
renewable electricity contracts called Power Purchase
Agreements (PPAs), or green tariffs/bundled Renewable Energy
Certificates (RECs) to match our grid power demand, where
these are available and can be sourced in a cost competitive
way. Where this is not possible, and as the next best option,
we seek to purchase unbundled RECs sold separately from
electricity in the same market.

Only as a last resort, and when unbundled RECs are not
available in a market where we buy electricity, do we buy
unbundled RECs in an adjacent market.

In January 2020, we reached our target of purchasing 100%
renewable grid electricity for our operations through a
combination of PPAs and RECs (bundled and unbundled). Since
we set this target, we've worked with the RE100 campaign to
evolve industry best practice in renewable electricity reporting.
From 2021, we're aligning our reporting with the updated
RE100 guidance which requires us to make two changes.

First, for renewable electricity certified with RECs, we
will only report as 'renewable' the electricity where the
accompanying RECs originate in the same market. While we
intend to maintain our commitment to ensure our purchase
of renewable grid electricity is matched by an equivalent
volume of renewable electricity generation, we’ll no longer
count the purchase of unbundled RECs from an adjacent
market in our renewable electricity reporting. While this will
lower our reported renewable electricity percentage, we
support the aims of RE100 to increase transparency in the
global renewable power landscape, which we hope will help
to accelerate the provision of renewable power in all markets.

The second change is to include non-grid sourced electricity.
Currently, we use biomass in combined heat and power
(CHP) boilers at a limited number of sites. As well as providing
thermal energy (see below), they also supply our sites with
electricity. From 2021 we'll include this within our renewable
electricity reporting. We'll also include the renewable electricity
generated at our factory sites, for example, the on-site solar
installations in 24 countries. In 2021 we generated almost 3%
of our total electricity from on-site renewable sources. Taking
into account the updated definition and widened scope of
our renewable electricity reporting, in 2021, 86% of our total
electricity was from renewable sources. Against the new scope
and definitions, the prior year would have been 80%. See page
56 for a more detailed breakdown of our electricity by source.

Renewable thermal energy
In addition to renewable electricity, we aim to transition
heating sources (typically fossil-fuel-burning CHP boilers for
hot air, water and steam) to renewable energy alternatives.
By early 2020, we had stopped using direct coal on-site for
thermal energy, except for three factories acquired in 2020

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Additional non-financial information continued

as part of our acquisition of the Horlicks portfolio in India and
other predominantly Asian markets. In 2021, we eliminated
direct coal from these three factories through the use of
biomass and biodiesel. We're exploring options to eliminate
indirect coal from steam supplied by third parties by 2030.

We're phasing out gas-fired boilers and exploring new
renewable heating technologies such as heat pumps,
concentrated solar power and lower carbon biogenic-derived
sources. These technologies could provide up to half of our
thermal energy needs by 2025. We have strict criteria to ensure
we deliver genuine lifecycle carbon reductions. In 2022, we will
publish details on how we’ll ensure any biofuels we use do not
lead to deforestation, compete with food supplies, and are
sourced from local waste materials where possible.

Many of the low-carbon heating options we’re exploring
are not yet commercially viable or widely available, so we're
supporting innovation and looking for ways to trial them.
We see hydrogen produced using renewable energy as a
potential industrial scale low-carbon alternative to natural
gas. Our Port Sunlight factory in the UK is supporting a trial of
hydrogen technology.

Refrigerants
We're phasing out high-impact refrigerants from our operations,
starting with the most harmful hydrochlorofluorocarbons (HCFCs).
When replacing these, we aim to use the greenest version
available for the purpose needed. By the end of 2021 we had
replaced HCFCs at 29 sites.

Food waste
Our first priority is to reduce the amount of food waste we
generate in the first place – we're aiming to halve food waste
in our operations by 2025. This will also help to reduce our
GHG emissions. By the end of 2021, we’d reduced food waste
per tonne of food handled in our operations by 3% versus
2019. Our progress in reducing manufacturing food waste has
been hampered by Covid-related disruptions. We're exploring
solutions with our engineering teams such as anaerobic
digestion, using the biogas generated on-site, composting
and using the waste as fertiliser.

Our brands and products

Designing our products to be lower carbon will help us to
reduce our indirect Scope 3 footprint and strengthens the
appeal of our brands to consumers. In some cases, it can also
help consumers reduce their own footprint (see page 53). We’re
focusing on concentration and compaction, transitioning away
from fossil fuels in our cleaning products, growing our portfolio
of plant-based products and investing in climate and nature
projects through our Climate & Nature Fund.

Concentration and compaction
In the last decade we’ve made significant emissions reductions
by removing or reducing carbon-intensive materials such
as inorganics and surfactants, and by concentrating and
compacting our products. In 2021 we continued to develop
concentrated formulas for our laundry liquids, including
OMO in-home refills available in six markets and Seventh
Generation’s ultraconcentrated laundry formulation in the US.
Lifebuoy also rolled out ten times concentrated ecorefill home
cleaning spray in Europe.

Recycled and renewable carbon in formulations
Through our Clean Future programme, our Home Care laundry
and cleaning brands are identifying new opportunities to
shift to renewable and recycled ingredients, moving away
from fossil-fuel-based ingredients. This year we launched an
OMO liquid laundry capsule made from captured industrial
carbon. Lifebuoy launched a cleaning range with plant-based
ingredients in five countries. And OMO/Persil launched a new
laundry liquid in 16 countries with plant-based stain removers.
Read more about Clean Future on page 23.

Plant-based foods
Alternative proteins, plant-based eating and meat and dairy
alternatives are strategic pillars for our Foods & Refreshment
division and all contribute to lowering carbon emissions. We’re
aiming to achieve €1 billion in sales from plant-based meat
and dairy alternatives by 2025-2027 – through brands such as
The Vegetarian Butcher, Wall’s, Ben & Jerry’s, Magnum, Knorr
and Hellmann’s. We’re also encouraging people to use more
plant-based ingredients in their cooking, through Knorr’s
‘Future 50’ inspired plant-based recipes. Read more about
plant-based foods on page 22.

Helping consumers make lower carbon choices
As well as ingredient transparency on product packs, we want
our consumers to have clear information about the carbon
footprint of the products they buy and we're exploring ways
to provide this. After more than a decade of work assessing
the carbon footprint of our products, we're now working with
others across the value chain to standardise data collection
protocols and communication frameworks. For example,
we’re part of the World Business Council for Sustainable
Development Value Chain Carbon Transparency Pathfinder
initiative. And we’re working with the Cosmetics Consortium
to develop an industry-standard environmental impact
assessment and scoring system.

Climate & Nature Fund
Our €1 billion Climate & Nature Fund will help brands invest
in projects that positively address climate change and
protect nature – for example, through forest protection and
regeneration. In 2021, we recruited a specialised team to
lead this work, formulate the strategy and get started on
project implementation. In this first year, we've committed

Unilever Annual Report and Accounts 202153

€40 million and are now building a pipeline of further projects.
For example, Knorr will use the fund to support 50 regenerative
agriculture projects. These are predicted to reduce GHG
emissions and water use by an estimated 30% while improving
biodiversity, soil health and livelihoods. As part of our Beauty
& Personal Care’s Positive Beauty strategy (see page 21), the
Fund is working on innovative financing and collaboration
partnerships to support the delivery of our commitment to
protect and regenerate 1.5 million hectares of land, forests
and oceans by 2030. This is more land than we use to grow
renewable ingredients for the Division’s products.

Our value chain

Our value chain encompasses upstream and downstream
Scope 3 emissions, excluding indirect consumer use-phase
emissions (see page 53 for more on consumer use). Our focus
is on tackling emissions from raw materials (including aerosol
propellants), packaging materials, logistics and distribution
networks, ice cream cabinets, and the disposal of waste
products and packaging.

Raw materials
We've developed GHG reduction roadmaps for key materials
and ingredients which contribute to our upstream Scope 3
GHG emissions, including dairy. Our roadmaps identify how
we can reduce emissions through product reformulations,
different raw materials and supplier innovation partnerships.
It is particularly critical that we work in partnership with our
suppliers as 1.5°C-aligned emission reduction pathways for
the majority of these materials are still unclear and it is only
through collaboration that we will find solutions.

In 2021, we invited our suppliers to commit to setting a public
target to halve absolute GHG emissions by 2030, report
their progress and share their data with us. We’re exploring
new ways to support suppliers through guidance, tools and
resources, particularly for the 300 suppliers who have the
most significant GHG emissions. In 2021, we began working
with a small group to help us shape the programme, and
we‘ll launch a pilot in 2022, before further roll-out in 2023.
We’re also encouraging other companies to work with their
suppliers, for example through the 1.5°C Supplier Engagement
Guide, launched by the 1.5°C Supply Chain Leaders initiative
at COP26.

We cannot achieve our climate goals if our operations or
supply chain contribute to deforestation. Our suppliers and
other partners will play a critical role in helping us achieve a
deforestation-free supply chain for five key commodities by
2023. Read more on tackling deforestation on page 30.

Packaging materials
We’ve set ambitious plastic commitments including to halve
our virgin plastic footprint by 2025. Key to achieving this will be
by increasing our use of recycled plastic. Our goal is to use at
least 25% recycled plastic by 2025, and this year we achieved
approximately 17%. We’re also reducing our use of virgin

plastic by shifting to refillable, reusable or naked (unwrapped)
products which use less or no plastic. In 2021, we saw strong
sales of concentrated home refill laundry and we continue to
expand our in-store and at-home refill pilots, with about 15 in
progress around the world. We're also exploring materials like
paper and board, using life cycle analysis to ensure any switch
away from plastic doesn’t end up increasing our GHG footprint.
Read more about plastic on page 29.

Logistics and distribution
More than 90% of our logistics emissions come from our
logistics suppliers. We've begun using lower carbon alternative
fuels such as liquified natural gas (LNG) or compressed natural
gas (CNG) in 12 countries and piloted zero emission electric
trucks with partners in three countries with plans to scale to
more. We also signed up to a new shipping coalition, Cargo
Owners for Zero Emission Vessels (coZEV) to help accelerate
the decarbonisation of the shipping industry.

In our own car fleet, we developed country roadmaps to
achieve 100% electric vehicles (EVs) or hybrids by 2030, taking
into account the availability of EVs, charging infrastructure and
financial support or subsidies. In 2021, across six of the most
EV-ready countries, EVs and hybrids made up 6% of the fleet.

Retail emissions
In 2021, all the new freezers we purchased to cool our ice
creams in-store used lower carbon natural hydrocarbon
refrigerants. We estimate that over 90% of the 3 million freezers
in our fleet now use these refrigerants. We’re investing in
energy-efficient freezers, with the average energy use per
cabinet falling by 3% compared to 2020. We're also looking at
‘warming up’ the cold chain so that less energy is needed to
refrigerate products across their life.

Aerosol propellants
We typically use hydrocarbon propellant gases in hairsprays,
body sprays and deodorants. In the US, our largest deodorant
and hair market, Volatile Organic Compound (VOC)
regulations restrict the use of formulations used elsewhere.
Our primary focus has been to find regulatory solutions in the
US to enable the use of alternative propellant systems which
have a lower GHG footprint compared to hydrocarbon and
hydrofluorocarbon propellants and help improve air quality.
Provisions have been added to the US VOC regulations to allow
the use of compressed gas propellants. We’re now exploring
alternative formulations and formats in key markets.

Disposal of waste products
Our products have a GHG impact at the end of their life,
as fossil-fuel-based ingredients break down and release
emissions. We're switching to plant-based 100% biodegradable
formulations across our Home Care portfolio. For example,
Lifebuoy’s BotaniTech range made from naturally derived
and 100% biodegradable cleaning ingredients launched in
five markets in 2021. And Comfort launched its Ultimate Care
range, which contains new biodegradable technology to
extend the life of clothes.

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Additional non-financial information continued

Our wider influence on society

We’re advocating for changes that will ultimately reduce the
impact of our products when used by consumers as well as
accelerating progress in other areas of our value chain.

Consumer use
Around two-thirds of our products' GHG impact comes
from their use by consumers (indirect downstream Scope
3 emissions), for instance from energy used by washing
machines or hot water used for showering. There’s a limit to
how much we can influence emissions from product use as
consumers make their own choices on how long they shower,
which energy provider they use, and how efficient their home
appliances are. We’re therefore reliant, as many companies
are, on the decarbonisation of the energy grid to reduce our
downstream Scope 3 footprint. We’re using our influence to
advocate for system-wide change, such as acceleration of
renewable energy globally, which will help reduce emissions
in consumers’ homes – see below for more on our advocacy.

In addition, we're committed to using technology and
innovation to provide consumers with superior and lower
carbon products while growing our business. This is already
visible in Home Care’s Clean Future strategy (with a focus on
renewable and recycled carbon ingredients – see page 23),
in Foods & Refreshment’s Future Foods strategy (with a focus
on plant-based foods – see page 22), and Beauty & Personal
Care’s Positive Beauty strategy (with a focus on sustainable
sourcing, deforestation-free palm oil and nature-based
solutions – see page 21).

Our product lifecycle GHG emissions per consumer use have
reduced by 14% since 2010 and by 4% since 2020, while our
absolute Scope 3 emissions (from consumer use, ingredients
and packaging and distribution and retail) increased by 1%
versus 2020, as our sales increased over the same period.
The reduction in GHG emissions per consumer use is driven
by our Foods & Refreshment and Home Care Divisions, where
emissions have fallen by 32% and 43% respectively since 2010.
This is mainly due to grid decarbonisation, portfolio changes
and product reformulation, such as the removal of phosphates
in our laundry products. Over the same period, GHG emissions
per consumer use from our Beauty & Personal Care Division
have increased by 6% despite ongoing grid decarbonisation
– driven primarily by the acquisition of brands with hair,
bath and shower products which have high GHG emissions
associated with consumer hot water use.

Advocacy
We were an early signatory to the We Mean Business open
letter to G20 leaders calling for higher ambition ahead of the
COP26 conference in 2021. Subsequently we partnered with
the UK government as a Principal Partner of COP26 in Glasgow.
Alan Jope served as a member of the COP26 Business Leaders
Group to rally UK and international businesses. During the
conference, we participated in numerous events including the
World Leaders Summit, the Forest, Agriculture, Commodities
and Trade (FACT) dialogue to reduce emissions in commodity
value chains and events on creating high integrity standards
for voluntary carbon markets. We also developed a climate
advocacy toolkit to support our market teams to push for
higher climate ambition.

Trade association policy alignment
We've committed to ensuring that all direct lobbying relevant
to climate policy is consistent with the Paris Agreement. At the
end of 2021 we published our climate policy position on our
website for indirect climate lobbying. In 2021 we rejoined the
European Chemical Industry Council (CEFIC) to help accelerate
the European chemical industry’s transition towards circular
chemistry. We will clearly indicate when CEFIC submissions
on climate change-related policies do not align with our own
climate positions.

See our website for our climate policy position

Industry partnerships
We continued our engagement with a selected group of
international climate leadership strategic partners – the
United Nations Global Compact, the World Economic Forum,
the World Business Council for Sustainable Development, and
the Consumer Goods Forum (CGF). We initiated and co-chaired
with Walmart a Race to Zero Task Force within the CGF to
encourage other consumer goods and retail companies to join
the UN’s Race to Zero. This succeeded in doubling the number
of CGF Board members making such commitments. We also
helped to create a Transform to Net Zero guide for businesses.

(a) Our medium-term emissions reduction target has been recognised as science-

based and consistent with the 1.5°C ambition of the Paris Agreement by the
Science Based Targets initiative.

(b) Our medium-term full value chain emissions reduction target has been

recognised as science-based and consistent with a 2°C temperature increase
by the Science Based Targets initiative. It was set in 2010 and was validated by
the Science Based Targets initiative before the 1.5°C validation was introduced.
We plan to review this goal in the near future.

(c) Our long-term net zero value chain target covers upstream Scope 3 emissions,
Scope 1 and 2 emissions, and mandatory downstream Scope 3 emissions.
Mandatory downstream emissions include direct emissions from aerosol
propellants and the biodegradation of chemicals in the disposal phase, but
excludes indirect consumer use-phase emissions, such as emissions associated
with hot water used with our products. This approach is consistent with the
Science Based Targets initiative’s approach to net zero targets. Our medium-
term value chain emissions reduction target covers indirect consumer use-
phase emissions. The definition of ‘net zero’ is outlined in our CTAP.
In this CTAP Progress Report, as in the CTAP, references to ‘our value chain’
encompasses upstream and downstream Scope 3 emissions, but excludes
indirect consumer use-phase emissions and operational Scope 1 and 2
emissions, unless stated otherwise. References to ‘full value chain’ in the
context of our goal to halve our full value chain GHG emissions by 2030,
additionally includes operational Scope 1 and 2 emissions and indirect
consumer-use phase emissions.

(d)

Unilever Annual Report and Accounts 202155

Governance, data and disclosure

Our CTAP was put before shareholders for a non-binding
advisory vote in May 2021 at our Annual General Meeting.
Shareholders overwhelmingly supported the plan, with 99.59%
of votes in favour. We'll continue to seek an advisory vote at
our AGM every three years and will report on progress against
the plan every year.

The Board take overall accountability for the management of
all risks and opportunities, including climate change. Our CEO
Alan Jope is ultimately responsible for overseeing our climate
change agenda.

External assurance ensures that our data is robust and
reliable. For details of assurance in 2021, see the PwC
Independent Limited Assurance Report 2021 on our website.

This Annual Report and Accounts contains additional climate
change disclosures, including in our TCFD statement:
▪ Governance: pages 4, 57, 80 to 81, 88 and 91 to 93
▪ Strategy: pages 8 to 11 and 57 to 62
▪ Risk management: pages 44 to 47 and 57 to 62
▪ Metrics and targets: pages 10, 34 and 62

See our website for more on climate action
Our CDP submissions contain further disclosures on climate, water
and forests

GHG emissions

The table below provides a detailed breakdown of our Scope 1, 2 and 3 GHG emissions by activity.

2021

2020

2019

Unilever operations (Scope 1 and 2)(a)
Total Scope 1 and 2 (tonnes CO2e)
Scope 1 (tonnes CO2e)
Renewable energy

Non-renewable energy

Refrigerants
Scope 2 (tonnes CO2e)
Purchased renewable electricity

Purchased non-renewable electricity

Purchased renewable thermal energy

Purchased non-renewable thermal energy

Reduction in Scope 1 and 2 GHG emissions from energy and refrigerant
use in our operations since 2015 (%)

Upstream and downstream of Unilever operations (Scope 3)(b)
Total Scope 3 (tonnes CO2e)
Consumer use (tonnes CO2e)
Ingredients and packaging (tonnes CO2e)
Distribution and retail (tonnes CO2e)
Full value chain (Scope 1, 2, 3)(c)
GHG impact per consumer use (grams CO2e)

823,511

1,128,091

606,771

659,028

710,740

565,988

542,620

592,342

23,368

14,429

144,752

216,740

632,560

26,468

469,063

57,033

128,442

382,057

87,719

88,298

87,006

-64%

-58%

-42%

61,007,131 60,388,592

61,020,357

43,187,538 42,093,341

41,743,454

14,860,832 14,239,918

14,897,174

2,958,761

4,055,333

4,379,729

43.6†

45.6

46.7

(a) Scope 1 encompasses direct GHG emissions from energy generated from fossil fuels such as gas and oil, as well as emissions from refrigerants at a small number of
sites where we have reliable data; Scope 2 encompasses indirect GHG emissions from the on-site generation and purchase of electricity according to the ‘market-
based method’ and purchased thermal energy. 2020 and 2019 Scope 2 figures have been restated to align our renewable electricity reporting with updated RE100
guidance. See page 51 for more information.

(b) Scope 3 encompasses indirect GHG emissions in Unilever’s value chain (upstream and downstream). Our Scope 3 emissions were recalculated in 2020 to include

biodegradability of organic materials. We also recalculated consumer use to include disposal, and ingredients and packaging to include inbound transport of raw
materials. However, the direction of change of our GHG impact per consumer use over the past three years remains the same. See the Basis of Preparation on our
website for more details on how we measure our GHG footprint www.unilever.com/planet-and-society/sustainability-reporting-centre/independent-assurance.
(c) We measure the Scope 1, 2 and 3 GHG footprint of our product portfolio using an LCA method. Our environmental targets are expressed against a baseline of 2010
and on a 'per consumer use' basis. This means a single use, portion or serving of a product. We continuously review our GHG footprint estimations to ensure we are
using the best available data. These changes can affect both the 2010 baseline and the annual emissions that we report.
This metric was subject to external independent limited assurance by PriceWaterhouseCoopers LLP (‘PwC’) in 2021. For PwC's 2021 Limited Assurance report and the
2021 Unilever Basis of Preparation for assured metrics see www.unilever.com/planet-and-society/sustainability-reporting-centre/independent-assurance.

†

STRATEGIC REPORT – REVIEW OF THE YEARUnilever Annual Report and Accounts 2021
56

Additional non-financial information continued

Renewable and non-renewable electricity

The table below provides a breakdown of our renewable and non-renewable electricity by source.

Renewable (% of kWh)(a)

On-site renewable self-generation

Purchased renewable electricity:

On-site Purchase Power Agreements

Off-site Purchase Power Agreements

Green electricity products from an energy supplier (green tariffs/bundled RECs)

Green electricity purchased in markets with greater than 95% renewable grid

Unbundled RECs bought in market

Total renewable electricity

Non-renewable (% of kWh)

On-site non-renewable electricity generation (e.g. gas-fired on-site CHP)

Purchased non-renewable electricity (e.g. non-grid transfer of CHP)

Unbundled RECs bought in an adjacent market(b)

Total non-renewable electricity

(a) The renewable sources listed align with the RE100 Reporting Guidance 2021. See page 51 for more information.
(b) Previously counted as 'renewable grid electricity'. See page 51 for more information.

2021

2020

2019

2.5%

83.8%

0.3%

9.8%

24.5%

0.2%

65.2%

86.3%

7.5%

0.1%

6.1%

1.0%

78.7%

0.5%

15.3%

18.8%

0.1%

65.4%

79.7%

7.7%

5.8%

6.7%

13.7%

20.2%

0.4%

66.1%

0.5%

18.8%

21.9%

0.1%

58.7%

66.5%

8.0%

22.6%

2.9%

33.5%

Unilever Annual Report and Accounts 202157

Task Force on Climate-related
Financial Disclosures statement
The following statement, which Unilever believes is consistent
with the Task Force on Climate-related Financial Disclosures
(TCFD) Recommendations and Recommended Disclosures,
details the risks and opportunities arising from climate
change, the potential impact on our business and the actions
we’re taking to respond. We also integrate climate-related
disclosures throughout this Annual Report and Accounts,
including in our Climate Transition Action Plan (CTAP) Progress
Report on pages 51 to 56.

See our website for our Climate Transition Action Plan

Governance

The Board takes overall accountability for the management
of all risks and opportunities, including climate change
(see page 44). Our CEO and Executive Board member, Alan
Jope, is ultimately responsible for oversight of our climate
change agenda. The Corporate Responsibility Committee and
Audit Committee review our climate reporting and receive
presentations from sustainability experts, including the
Sustainability Advisory Council. The Board is supported by the
ULE. The ULE meet quarterly to discuss key strategic matters.
During 2021, three agenda items relating to climate change
were discussed, including progress against our Compass
climate goals.

Additional specialist governance groups are in place
to support our climate agenda and ULE decision-
making, including:
▪ Climate Action Committee: Drives delivery of our carbon

ambition at corporate and country level and leads strategic
partnerships and policy on renewables. Chaired by our
Chief Business Operations Officer, Reginaldo Ecclissato.

▪ Sustainable Sourcing Steering Group: Supports our strategy
focusing on long-term, sustainable access to our key crops.
Chaired by our Chief Procurement Officer, David Ingram.

This year we engaged with shareholders on our climate
strategy by seeking an advisory vote on our CTAP. We will
continue to seek an advisory vote on our CTAP at our AGM
every three years.

Executive remuneration for management employees – up to
and including the ULE – continues to be linked to performance
against climate change goals. Their reward packages include
fixed pay, a bonus as a percentage of fixed pay and eligibility
to participate in a long-term Performance Share Plan (PSP).
The PSP is linked to financial and sustainability performance,
guided by our Sustainability Progress Index (SPI), which
accounts for 25% of the total PSP award. The SPI in 2021 is tied
to a number of sustainability targets, including our progress
on reducing Scope 1 and 2 emissions in manufacturing,
sustainable sourcing and recycled plastic – see page 92 for
details. From 2022, the SPI will be linked to a new set of targets,
including replacing fossil-fuel-derived ingredients in our

laundry and cleaning products with renewable or recycled
carbon and our deforestation-free supply chain and recycled
plastic commitments. See pages 87 to 88 for more on PSP
including the role of the Board’s Compensation Committee
and Corporate Responsibility Committee in determining how
the PSP operates, and the SPI outcome each year.

Strategy and risk management

Climate change is a principal risk to Unilever which has the
potential – to varying degrees – to impact our business in
the short, medium and long term. We face potential physical
environment risks from the effects of climate change on our
business, including extreme weather and water scarcity.
Potential regulatory and transition market risks associated
with the shift to a low-carbon economy include changing
consumer preferences and future government policy and
regulation. These also present opportunities. The potential
impacts of climate change are taken into account in
developing the overall strategy and financial plans.

More detail on these risks, opportunities and the mitigating
actions we’re taking can be found on pages 59 to 60.

The process for assessing and identifying climate-related risks
is the same for the principal risks and is described on page
44. The risks are reviewed and assessed on an ongoing basis
and formally at least once per year. For each of our principal
risks we have a risk management framework detailing the
controls we have in place, who is responsible for managing
both the overall risk and the individual controls mitigating it.
We monitor risks throughout the year to identify changes in the
risk profile.

We regularly carry out climate-related risk assessments at
site level, supplier level, as well as innovation-project level.
Climate-related risks are managed by the team relevant to
where the risk resides. For example, climate risks in relation
to commodities in the supply chain are managed by our
procurement team.

Understanding financial impact: scenario analysis

We have conducted several high-level scenario analyses on
the potential impacts of climate change to help us consider
and adapt our strategies and financial planning. In prior years,
we have reported the potential financial impacts of climate
change on our business in 2030 if average global temperatures
were to rise by 2°C and 4°C above pre-industrial levels by 2100.
This analysis led us to understand that limiting warming to
2°C would primarily expose us to economic and regulatory
transition risks, whereas a 4°C warming level would expose
us to unprecedented physical risks. In 2021, as new scientific
evidence was released by the UN’s Intergovernmental Panel on
Climate Change (IPCC) and the global consensus around the
need of governments to commit to a 1.5°C world strengthened,
we extended our scenario analyses to assess the impacts of a
1.5°C temperature increase above pre-industrial levels by 2100
on our business in 2030, 2039 and 2050.

STRATEGIC REPORT – REVIEW OF THE YEARUnilever Annual Report and Accounts 2021Climate scenarios: 1.5°C, 2°C and 4°C

Pathways to 1.5°C: Proactive and Reactive

Proactive route

Reactive route

▪ Aggressive and persistent
regulation from today
▪ Dramatic changes to
lifestyle from today,
towards minimising
climate impact and
social inequality

▪ Reliance on available and

proven technologies

▪ Lower reliance on carbon
removal technologies

▪ Gradual regulation by 2030,
very aggressive post-2030
▪ Continuation of historical
societal trends until 2030,
then rapid pivot
▪ Major reliance on

technologies that are not
yet proven to scale

▪ Higher reliance on carbon

removal technologies

Additional non-financial information continued

Understanding and modelling the potential financial
impact on the business in 2030, 2039 and 2050 of
limiting global warming to 1.5°C

The IPCC’s sixth assessment report (AR6), the most up-to-
date compendium from the global scientific community
on climate change, states that limiting warming to 1.5°C
above pre-industrial levels is necessary to prevent the severe
environmental consequences that are likely to occur in a
2°C warmer world, and the catastrophic impacts that would
materialise if temperatures rose by 4°C. However, it also noted
that achieving a 1.5°C world would still imply major disruption
and would necessitate a fast and aggressive transition of
our global economy, encompassing policy and regulation,
production and consumption systems, societal and economic
structures and behaviours, and infrastructure development
and deployment of new technologies.

The IPCC also sets out multiple pathways that the world
could take to limit global warming to 1.5°C. The nature
of the pathway taken significantly impacts the risks and
opportunities that a business will face.

In assessing the material risks and opportunities Unilever
would face in a world focused on achieving 1.5°C we have
reviewed in detail two pathways, ‘proactive’ and ‘reactive’, that
we assessed as more likely than other more extreme possible
pathways. In the ‘proactive’ route, there is an early and steady
reduction of emissions as a result of a fast response from
all economic actors, meaning there is less dependence on
technological advancements to remove carbon from the
atmosphere in the second half of the century. Conversely, in
the ‘reactive’ route, significant action by economic actors is
delayed to 2030, after which a very rapid transition across all
actors is required, accompanied by deployment at a very large
scale of low-carbon energy and carbon removal activities
and technology.

Risks and opportunities assessed in creating our
1.5°C scenario

In creating our 1.5°C scenario analysis, we took the two
pathways and considered the five broad types of risks and
opportunities using the TCFD risk framework: Regulatory risks;
Market risks; Physical environment risks; Innovative products
and services opportunities; and Resource efficiency, resilience,
and market opportunities. We identified approximately 40
specific risk and opportunity areas which could impact us in
2030, 2039 and 2050, each of which we assessed qualitatively,
supported where possible with high-level quantitative
assessments. The assessments are based on financial
scenarios and do not represent financial forecasts. They
exclude any actions that we might undertake to mitigate or
adapt to these risks.

The quantitative assessments were developed to understand
high-level materiality and order of magnitude financial impact
rather than perform detailed simulations or forecasts on the
long-term future of markets and products. The data used
was from internal environmental, operational, and financial
data and external science-based data and assumptions from
reputable and broadly used sources such as the IPCC or the
International Energy Agency.

Unilever Annual Report and Accounts 2021Regulatory and economic risks4°C world1.5°C world2°C worldPhysical environmental risksLOWHIGHLOWHIGHSpeed of Innovation1.5°C “Proactive”routeExtent of regulationLOWHIGHLOWHIGH1.5°C “Reactive”route
Key risks and opportunities

Out of all the risks and opportunities we assessed, there are
11 which we believe are significant and we summarise these
below. We have combined the outputs from the ‘proactive’
and ‘reactive’ analyses since the risks and opportunities are
similar, with differences in the size and timing of impact. Where
we have been able to quantify the risk, the ranges represent
potential impacts of the different pathways.

Actions to mitigate the risks and capitalise on the
opportunities have been consolidated into our Compass
strategy (pages 8 to 11) and our CTAP (pages 51 to 56). Below
we summarise the actions we're taking for each of the areas
considered in our 1.5°C scenario assessments.

Regulatory risks:
▪ Carbon pricing includes carbon taxes and voluntary removal
or offset costs. Tightening regional or national regulations
as well as climate commitments across individual businesses
could drive widespread implementation of these taxes
or market schemes. This could translate into rising direct
and indirect costs linked to carbon emissions, where the
strongest impact would likely be on costs of sales linked
to raw materials, production, and distribution emissions.
Carbon taxes on household emissions or costs passed
through to our consumers linked to household emissions
may impact their disposable income and ultimately their
purchasing power.

▪ Land use regulation could drive reforms to radically

restructure current global land use patterns to conserve
and expand forest land, serving as the main natural carbon
removal solution. This could reduce land available for food
crops, pasture, and timber and hence access to our primary
commodities which could drive reduced crop output and
increase raw material prices.

▪ Product composition regulations could restrict or ban the
use of certain GHG intensive components and ingredients
in everyday products. This would require the redesign
of products and packaging to comply, which could
increase costs.

▪ Sourcing transparency and product labelling regulations

could increase significantly through pressure from
regulators, consumers, and investors. This could lead
to disclosure compliance risks and rising commodity
costs linked to radical transition to transparent supply
chains, as well as a potential loss of market share to more
transparent competitors.

▪ Extended producer responsibility (EPR) would mean that
producers are held accountable for their environmental
and social impacts across the product value chain. This
could lead to improvements of lifecycle traceability from
sourcing to managing end-of-life treatment of products
and packaging. Circular product design and manufacturing
practices could become a requirement in many regions to
incentivise efficient and responsible resource extraction,
and pass waste management costs through higher disposal
and recycling fees to producers.

Actions taken: We're mitigating regulatory risks through
ongoing progress against the goals in our Compass and
CTAP, notably our commitments on climate, deforestation
and plastic packaging – see pages 10, 29 to 30 and 51 to 56.
We support the use of carbon pricing as an important tool to
help us achieve our zero emissions goal. Our carbon pricing
approach is a mechanism which creates a sustainable capital
investment fund which is then used to fund capital investments
to decarbonise our operations. We support EPR policies and
schemes and we’re investing directly in waste collection,
processing and capacity-building projects to recycle more
plastic.

Market risks:
▪ Energy transition and rising energy prices could be driven
by increased electrification, the deployment of renewable
energy solutions, associated transmission, distribution and
storage infrastructure, as well as the adoption of emerging
low-carbon technologies such as biogas, green hydrogen
and ammonia. This could impact our operations, suppliers,
and end-consumers’ utility costs.

▪ Energy and commodity market volatility could potentially
lead to increased uncertainty in financial planning and
forecasting for key commodities, as well as a higher cost
associated with risk management. Other considerations
include potential manufacturing or supply disruptions
linked to availability or higher cost of energy and
sourced commodities.

Actions taken: We're mitigating market risks by decarbonising
our operations through eco-efficiency measures in our
factories, powering our operations with renewables and
transitioning heating and cooling for our factories to lower
emission and renewable sources (see page 51). We manage
commodity price risks through forward-buying of traded
commodities and other hedging mechanisms.

Physical environment risks:
▪ Water scarcity would lead to increased droughts while

limited resources to irrigate soils could reduce crop outputs.
Water shortages could also impact our manufacturing
sites and our ability to supply water-based products. Our
consumers could also face water shortages in their everyday
activities in certain regions, creating a need for water-smart
or waterless products or services.

▪ Extreme weather events could significantly disrupt our

entire value chain. Sustained high temperatures could lead
to reduced crop outputs due to reduction in soil productivity
which could translate into higher raw material prices.
Weather events such as hurricanes or floods, which would
become increasingly common and intense, could cause
plant outages or disrupt our distribution infrastructure.
Additionally, macroeconomic negative shocks among
affected communities could reduce or destroy consumer
demand and purchasing power.

Actions taken: We're mitigating physical environment risks
by investing in new products and formulations that work
with less water, poor quality water or no water. Many of
our hair care products now have fast-rinse technology as
standard, using less water. We're expanding our water
stewardship programme to 100 locations in water-stressed
areas by 2030 (see page 30). We monitor changing weather
patterns on a short-term basis and integrate weather system

STRATEGIC REPORT – REVIEW OF THE YEARUnilever Annual Report and Accounts 202160

Additional non-financial information continued

modelling into our forecasting process. To mitigate negative
effects from extreme weather we have contingency plans to
secure alternative key material supplies at short notice or
transfer or share production between manufacturing sites.
We manage commodity price risks through forward-buying
of traded commodities and other hedging mechanisms.
Our Regenerative Agriculture Principles and Sustainable
Agriculture Code encourage our agricultural raw material
suppliers to adopt practices which increase their productivity
and resilience to extreme weather.

In addition to these risks inherent in the pathways to a 1.5°C
world, there are also opportunities which would arise from
emerging needs for products and services which are delivered
sustainably at an appropriate price. There are two specific
opportunities which this scenario analysis highlighted:

Innovative products and services opportunities:
▪ Growth in plant-based or lab-grown foods could increase

rapidly in the coming years. As people become more
environmentally conscious and there is regulation on land
use, we could see a rise in plant-based diets away from
animal-based protein.

Actions taken: We're capitalising on innovative product
and service opportunities by offering a range of vegan and
vegetarian products. We have a target to grow sales from
our plant-based meat and dairy alternatives business to €1
billion per annum by 2025-2027 (see page 22).

Resource efficiency, resilience and market opportunities:
▪ Investment in energy transition technologies represents
a shift to efficient and less centralised energy supply and
consumption (e.g. through on-site renewable energy
generation and storage), zero-emission logistics and
designing products for resource-efficient consumption. This
could drive decarbonisation across the value chain, while

opening up the opportunity to access the utility market as an
off-grid generator and create new revenue streams from grid
balancing or demand side response services or providing
excess renewable power of oversized capacity to supply
chain partners.

Actions taken: We're capitalising on resource efficiency
opportunities by generating renewable electricity at our
factory sites where feasible (see page 51), targeting emissions
reduction from our logistics suppliers and own vehicle fleet
(see page 53) and through product reformulations which make
our products more resource efficient in use – for example,
many of our laundry products are now low-temperature
washing as standard (see page 23).

Summary of high-level quantitative assessment

For those risks and opportunities where we have undertaken
high-level quantitative assessments, the results are shown in
the tables below. These assessments show the gross impact
before any action which Unilever might take to respond. The
ranges reflect the different results from the reactive and
proactive pathways assessed.

We first undertook scenario analysis in 2017 on 2°C and 4°C
scenarios. This year we have completed a 1.5°C scenario
analysis. The results of this work on the way to 1.5°C is
consistent with this previous work. The key differences are due
to: the more extreme measures that would need to be taken
to achieve a 1.5°C outcome; the evolution of the scientific
assumptions contained within the IPCC's AR6 report; and a
more detailed approach to the scenario analysis. The financial
impact in 2030 is more significant in the 1.5°C scenario.
However, the scenario avoids the greater negative impacts
from the physical risks associated with higher temperature rise
scenarios in 2050 and beyond.

Unilever Annual Report and Accounts 20211.5°C scenario analysis financial quantification in current money

Financial quantification of the assessed regulatory and market risks

Potential financial impact on profit in the year
if no actions to mitigate risks are taken(a)

Risk

2030

2039

Carbon tax and voluntary carbon
removal costs

-€3.2bn to
-€2.4bn

-€5.2bn to
-€4.8bn

2050

-€6.1bn

We quantified how high prices from
carbon regulations and voluntary
offset markets for our upstream
Scope 3 emissions might impact
our raw and packaging materials
costs, our distribution costs and
the neutralisation of our residual
emissions post 2039.

Land use regulation impact on
food crop outputs

-€0.8bn to
-€0.3bn

-€2.1bn to
-€0.7bn

-€5.1bn to
-€1.7bn

Key assumptions

▪ Absolute zero Scope 1 and 2 emissions by 2030
▪ Scope 3 emissions exclude consumer use emissions
▪ Carbon price would reach 245 USD/tonne by 2050,

rising more aggressively in early years in a proactive
scenario

▪ The price of carbon offsetting would reach 65 USD/

tonne by 2050

▪ Offsetting 100% of emissions on and after 2039

▪ By 2050, in a proactive scenario, land use regulation

would increase prices by:
▪ Palm: ~28%
▪ Commodities and food ingredients: ~33%

▪ By 2050, in a reactive scenario, land use regulation

would increase prices by:
▪ Palm: ~10%
▪ Commodities and food ingredients: ~11%

-€0.6bn

-€1.5bn

-€3.4bn

▪ High uncertainty surrounds possible shifts to energy

prices during a transition to 1.5°C world

▪ Analysis assumes that by 2050 average electricity

prices would:
▪ Rise ~16% in The Americas
▪ Rise ~18% in Europe
▪ Decline ~1% in ASIA/AMET/RUB(b)

▪ By 2050 average global gas prices would rise by ~141%

We quantified how changing land
use regulation to promote the
conversion of current and future
food crops to forests could drive
reduced crop output and lead to
increased raw material prices,
impacting sourcing costs.

Impact of rising energy prices for
suppliers and in manufacturing

We quantified how electricity
and gas price increases could
impact both total energy annual
spend as well as indirect cost
increases passed through from raw
material suppliers.

Financial quantification of the assessed physical environment risks

Potential financial impact on profit in the year
if no actions to mitigate risks are taken(a)

Risk

2030

2039

2050

Key assumptions

Water scarcity impact on
crop yields

-€0.3bn to
-€0.2bn

-€0.7bn to
-€0.5bn

-€1.7bn to
-€1.2bn

We quantified how increased
water-stressed areas and
prolonged droughts would reduce
crop outputs due to water scarcity
in agricultural regions, decreasing
crop viability, and impacting raw
material prices.

Extreme weather (temperature)
impact on crop yields

-€0.4bn to
-€0.3bn

-€1.1bn to
-€0.8bn

-€2.8bn to
-€1.9bn

We quantified how extreme
weather events such as sustained
high temperatures could impact
crop output and therefore sourcing
costs across key commodities.

▪ By 2050, in a proactive scenario, water scarcity would

increase prices by:
▪ Palm: ~10%
▪ Commodities and food ingredients: ~11%

▪ By 2050, in a reactive scenario, water scarcity would

increase prices by:
▪ Palm: ~14%
▪ Commodities and food ingredients: ~16%

▪ By 2050, in a proactive scenario, extreme weather

would increase prices by:
▪ Palm: ~12%
▪ Commodities and food ingredients: ~14%

▪ By 2050, in a reactive scenario, extreme weather would

increase prices by:
▪ Palm: ~18%
▪ Commodities and food ingredients: ~21%

STRATEGIC REPORT – REVIEW OF THE YEARUnilever Annual Report and Accounts 202162

Additional non-financial information continued

Financial quantification of the assessed opportunities

Potential financial impact in the year if actions
to capitalise on opportunities are taken(a)

Opportunity

2030

2039

2050

Key assumptions

Growth in plant-based
foods category

We quantified the potential
revenue opportunity from
anticipated growth in the global
plant-based foods market and
possible market share in 2025.

+€0.5bn

+€1.7bn

+€6.4bn

▪ By 2050, the total global market for plant based

products would rise to~USD 1.6 trillion

▪ Maintain a constant market share
▪ Product mix and product margins would remain

constant

(a) These potential financial impacts are based on high-level quantitative assessments of certain risk and opportunity areas which could impact us in 2030, 2039 and 2050.
(b) Refers to Asia, Africa, Middle East, Turkey, Russia, Ukraine and Belarus.

In summary and next steps

The analysis suggests that policy interventions and changing socio-economic trends, such as regulations related to carbon
pricing, land use, product composition, sourcing transparency and product labelling, and EPR would have the most significant
impact on our value chain along the journey to a 1.5°C world. The next level of impact would be as a result of the transition of
the energy system with rising energy prices and market volatility. We would also experience the impact of physical environment
risks associated with a warmer climate, even in a 1.5°C world. While the potential risks and financial impact of limiting global
warming to 1.5°C are significant if no mitigating actions are taken, the impact of the potential risks that would exist if we were
not to reduce warming to 1.5°C are potentially even more significant.

The outcomes from our analysis provide us with initial high-level insights into these potential business and financial impacts.
These form an important input to our strategic planning process.

In summary, the radical and disruptive system-wide transformation we could face in the journey to limit warming to 1.5°C by
2100, would present a significant range of material risks, where regulatory and economic risks would be the most disruptive.
However, many opportunities would also emerge, which we would be well placed to seize given our ambitious commitments are
aligned with a proactive route towards net zero by 2039.

There is still much to do to advance our understanding of the risk and opportunities facing our business and our industry, and
our strategic responses to such a radically different future. This analysis represents an important step to continue to engage and
challenge our business and our stakeholders to define how we can make sustainable living commonplace.

Metrics and targets

Our CTAP includes key metrics and targets to assess and manage climate risks and opportunities across our value chain. Two of
the targets have been recognised as science-based by the Science Based Targets initiative – see page 55 for more details. The
table below provides a high-level overview of our Scope 1, 2 and 3 GHG emissions. A more detailed breakdown of emissions by
source can be found in our CTAP Progress Report on page 55.

Absolute GHG emissions

2021

2020

2019

Scope 1 (tonnes CO2e)(a)
Scope 2 (tonnes CO2)(b)
Scope 3 (tonnes CO2e)(c)
(a) Scope 1 encompasses direct GHG emissions from energy generated from fossil fuels such as gas and oil, as well as emissions from refrigerants at a small number

61,007,131 60,388,592

565,988

144,752

216,740

606,771

659,028

469,063

61,020,357

of sites where we have reliable data; Scope 2 encompasses indirect GHG emissions from the on-site generation and purchase of electricity according to the ‘market-
based method’ and purchased thermal energy.

(b) 2020 and 2019 figures have been restated to align our renewable electricity reporting with updated RE100 guidance. See page 51 for more information.
(c) Scope 3 encompasses indirect GHG emissions in Unilever’s value chain (upstream and downstream). Our Scope 3 emissions were recalculated in 2020 to include

biodegradability of organic materials. We also recalculated consumer use to include disposal, and ingredients and packaging to include inbound transport of raw
materials. See the Basis of Preparation on our website for more details on how we measure our GHG footprint www.unilever.com/planet-and-society/sustainability-
reporting-centre/independent-assurance.

Unilever Annual Report and Accounts 2021
Additional non-financial information continued

Other non-financial disclosures

Unilever is subject to a number of mandatory reporting requirements. In the following pages, we provide part of our Section
172 disclosure, our Streamlined Energy and Carbon Reporting disclosure, employee gender reporting in alignment with the
UK Corporate Governance Code, our non-financial information statement in line with the UK Companies Act 2006, and our EU
Taxonomy disclosure.

Section 172: Engaging with our stakeholders
The information set out below, together with the information on pages 69 to 71 of our Governance Report which explains how
the Board considers and engages with stakeholders, forms our section 172 statement under the UK Companies Act 2006. The
Unilever Compass on page 9 details the six stakeholder groups we have identified as critical to our future success: shareholders,
our people, consumers, customers, suppliers & business partners and planet & society. Throughout the Strategic Report we
explain how we’ve worked to create value for each in 2021, as well as how our business benefits from these vital relationships.

Stakeholder

How we engaged in 2021

Shareholders
We engage with our
shareholders on our
strategy and business
performance.

Our people
148,000 talented people
in more than 100 countries
give their skills and time in
Unilever offices, factories,
R&D laboratories and tea
estates.

Consumers
3.4 billion people use our
products every day.

Customers
We partner with global
retailers and eCommerce
marketplaces through to
small family-owned stores.

Suppliers & business
partners
We work with around
53,000 supplier partners
in 150 countries to source
materials and provide
critical services for us.

Planet & society
As a global business
with a global footprint,
we consider the planet
and all its citizens to be
a key stakeholder.

Find out
more

Page 15-17

▪ We speak directly to shareholders through quarterly results broadcasts and conference

presentations, as well as through meetings and calls about aspects of business performance and
consumer trends.

▪ Senior leaders and our Board speak directly to shareholders on a broad range of issues. For
example, in 2021 we presented to investors on innovation and alternative approaches to
animal testing.

▪ As part of our engagement activities in 2021, we put our Climate Transition Action Plan before

our shareholders for them to vote on.

• Through our UniVoice survey we engaged with around 90,000 employees in 2021 and we

Page 18-19

continued to run monthly UniPulse surveys for more frequent feedback, helping us understand
employee sentiment on specific topics.

• We continued our bi-weekly ‘Your call’ sessions with our CEO and ULE members to give our

workforce direct and regular access to our leadership team where they answered questions from
our people on issues of concern to them as employees, such as employee attrition, our approach
to equity, diversity and inclusion, returning to the workplace and company financial performance.

• At a market level, we held regular local leader-led virtual townhall meetings to engage with

employees on locally relevant topics and issues.

• We held a virtual Compass Live event, inviting key senior leaders across our business to engage
with and inform our employees on our Compass strategy and our progress during the year, to
ensure common awareness of the factors affecting our performance.

▪ We use our 37 People Data Centres to draw insights from social media coupled with consumer
research from partners such as Kantar, Nielsen and Ipsos who we engage with through their
regular surveys and panels.

▪ We use our Consumer Carelines to give us insights into the experiences of consumers when using
our products – during 2021 we had around 4 million interactions through calls, emails, letters,
social media and webchats. The feedback is shared with relevant parts of the business to take
appropriate action.

▪ We are members of the Advantage Group Survey to help us understand how we can improve our
customers’ experience. This year we engaged with nearly 800 customers across 34 countries.
▪ Our larger retail partners have direct channels into us. We actively manage these relationships
through our Customer Development team who regularly meet customers to discuss a range of
issues including shopper insights and ways to drive category growth and sales. Through these
relationships we produce Joint Business Plans for mutual benefit.

▪ We use an online platform to provide shopper insights and research for our smaller retailer
customers. In 2021 we engaged with small shop owners and micro-entrepreneurs who have
undertaken our financial and inclusion training programmes to understand how they have
benefited from them.

Page 20-24

Page 25-26

▪ Through our Supply Chain and Procurement teams, we communicate with our suppliers and

Page 27-28

business partners frequently.

▪ We conduct an annual Partner with Purpose survey to understand how our suppliers feel about

▪

working with Unilever and areas for improvement.
In 2021, we continued the roll-out of the Covid-19 information site we built in 2020 for suppliers
to share protocols and useful information to help keep them running safely.

▪ As part of our sustainability materiality process, we analyse insights from our key stakeholders to
make sure we’re focusing on the most important sustainability issues and to inform our reporting
(see our website for more details).

▪ We engage with NGOs such as Greenpeace and the Ellen MacArthur Foundation on common

issues of concern, such as plastic packaging, as well as local NGOs.

▪ We conduct an annual survey of citizens who have a strong interest in social and environmental

issues, to understand their evolving interests, concerns and expectations.

▪ We engage with industry groups and forums on the sustainability issues most important to

Unilever, with ULE members leading our engagement in the areas most relevant to their field
of responsibility.
In 2021, Unilever was a Principal Partner of COP26, giving us the opportunity to engage with
a wide range of stakeholders to drive a higher level of climate ambition.

▪

Page 29-31

STRATEGIC REPORT – REVIEW OF THE YEARUnilever Annual Report and Accounts 202164

Additional non-financial information continued

Employee diversity
As part of our disclosure to comply with the UK Corporate Governance Code 2018, the table below shows our workforce diversity
by gender and work level for the reporting period ending 31 December 2021.

2021

Male

Unspecified(b)

Female

Male

Gender statistics

Board

Female

Unilever Leadership Executive (ULE)

Senior management (reporting to ULE)

Management(a)

Total workforce

(46)%

(54)%

(31)%

(27)%

8,733

(52)%

52,925

(36)%

(69)%

(73)%

8,047

(48)%

95,087

(64)%

—%

(0.04)%

(0.02)%

(42)%

(31)%

(22)%

7,636

50%

51,967

35%

2020

(58)%

(69)%

(78)%

7,525

50%

96,982

65%

(a) Based on a total management population of 16,875 including ULE and senior management.
(b) In 2021 we expanded our reporting to include those who are not identified as male or female in our systems.
Employees who are statutory directors of the corporate entities included in this Annual Report and Accounts: 494 (65%) males and 265 (35%) females (see pages 176 to 186).

Streamlined Energy and Carbon Reporting (SECR)
In line with the requirements set out in the UK Government’s guidance on Streamlined Energy and Carbon Reporting, the table
below represents Unilever’s energy use and associated GHG emissions from electricity and fuel in the UK (1 October to 30
September), calculated with reference to the Greenhouse Gas Protocol. The scope of this data includes eight manufacturing sites
and 11 non-manufacturing sites based in the UK. In 2021, the UK accounted for 7% of our global total Scope 1 and 2 emissions
as well as 5% of our global energy use, outlined in the table below. See page 51 for more on energy efficiency measures.

UK operations

Biogas (kWh)

Natural gas (kWh)

LPG (kWh)

Fuel oils (kWh)

Coal (kWh)

Electricity (kWh)

Heat and steam (kWh)

Total UK energy (kWh)(a)

Total global energy (kWh)

Total UK Scope 1 emissions (tonnes CO2)(b)

UK Scope 1 emissions (kg CO2) per tonne of production

Total UK Scope 2 emissions (tonnes CO2)(b)(c)

UK Scope 2 emissions (kg CO2) per tonne of production

2021

2020

2019

10,025,000

9,420,000

17,045,000

226,110,000

231,832,000

238,081,000

1,411,000

1,464,000

59,000

866,000

580,000

171,897,000

190,790,000

195,797,000

192,738,000

201,709,000

212,483,000

364,635,000

392,499,000

408,280,000

7,002,482,000

7,037,674,000

7,181,904,000

45,740

56.9

46,918

48,178

49.1

527

0.6

55.6

702

0.8

(a) Fleet and associated diesel use excluded as it is not material. Transportation is operated by a third party and accounted for under Scope 3.
(b) We report our emissions with reference to the latest Greenhouse Gas Protocol Corporate Accounting and Reporting Standard (GHG Protocol). Our only material GHG
from energy is CO2, reported as required by the GHG Protocol. Other gases are immaterial. Energy use data is taken from meter reads and energy invoices from each
site and then converted to kWh using standard conversion factors as published by the IPCC.

(c) Carbon emission factors for grid electricity calculated according to the ‘market-based method’. Total Scope 2 emissions reported as zero in 2021 as we now use 100%

renewable grid electricity across all our sites in the UK & Ireland.

Unilever Annual Report and Accounts 202165

Non-financial information statement
In accordance with sections 414CA and 414CB of the Companies Act 2006 which outline 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 on our website and in our Human Rights Report, including relevant policies.

Non-financial matter and relevant sections
of Annual Report

Environmental matters

Improving the health of our planet

Relevant sections of Annual Report and Accounts:
▪
▪ Climate action
▪ A waste-free world
▪ Protect and regenerate nature
▪ Climate Transition Action Plan Progress Report
▪ Task Force on Climate-related Financial Disclosures statement

Social and community matters

Relevant sections of Annual Report and Accounts:
▪ A fairer, more inclusive world
▪

Improving health, confidence and wellbeing

Employee matters

Relevant sections of Annual Report and Accounts:
▪ Equity, diversity and inclusion
▪ Protecting health, safety and wellbeing
▪ New ways of working
▪ Skills for the future
▪ Nurturing our growth culture

Human rights matters

Relevant sections of Annual Report and Accounts:
▪ Respecting and promoting human rights
▪ Raising living standards

Anti-corruption and bribery matters

Relevant sections of Annual Report and Accounts:
▪ Working with integrity

Annual Report page reference

▪ Policy: pages 29 to 30
▪ Position and performance: pages 29 to 30, 34, 51 to 62 and 64
▪ Risk: pages 47, 57 to 61
▪

Impact: pages 29 to 30, 57 to 62

▪ Policy: pages 26, 30 to 31
▪ Position and performance: pages 26, 30 to 31 and 34 to 35
▪ Risk: pages 48 and 50
▪

Impact: pages 26, 30 to 31

▪ Policy: pages 18 to 19
▪ Position and performance: pages 18 to 19 and 35
▪ Risk: page 48
▪

Impact: pages 18 to 19

▪ Policy: pages 28, 31
▪ Position and performance: pages 28, 30 to 31
▪ Risk: page 50
▪

Impact: pages 28, 30 to 31

▪ Policy: page 19
▪ Position and performance: page 19
▪ Risk: page 50
▪

Impact: page 19

STRATEGIC REPORT – REVIEW OF THE YEARUnilever Annual Report and Accounts 202166

Additional non-financial information continued

EU Taxonomy disclosures
New legislation has been introduced this year to support the transition to a more sustainable economy and will continue to be
augmented and amended. This includes the European Union’s Sustainable Finance Disclosure Regulation which incorporates
new reporting obligations including the EU Taxonomy. The Taxonomy sets out certain economic activities which are deemed
to be environmentally sustainable – referred to as ‘eligible activities’. It requires European businesses to disclose certain
information about these eligible activities.

The EU Taxonomy is work in progress and in creating the current list of eligible activities the European Commission have not
yet considered our industry, focusing instead on those industries where they believe there is most potential for climate change
mitigation or adaptation. However, certain European companies are required to report against the current list of eligible
activities for this year end. On the basis of the current eligible activity list and in accordance with the legislation, we have
undertaken a review of the Group’s turnover, capital expenditure and operating expenditure (as defined by the EU Taxonomy)
to identify the extent of any eligible activities within our business.

Turnover

▪ None of our turnover as detailed in our consolidated income statement (page 114) for the year ended 31 December 2021 is derived from

eligible activities.

Capital expenditure (intangible assets and property, plant and equipment)

▪ 1% of our capital expenditure as detailed in our consolidated financial statements (pages 114 to 117) for the year ended 31 December 2021
is in respect of eligible activities. The activities identified are related to: (i) Construction and real estate; (ii) Water supply, sewerage, waste
management and remediation; and (iii) Energy.

Operating expenditure

▪ Operating expenditure as per the EU Taxonomy is defined as directly incurred, non-capitalised costs relating to research and development,
building renovations, short-term leases and the repair and maintenance of property, plant and equipment. 0% of our operating expenditure
for the year ended 31 December 2021 is in respect of eligible activities.

WEF/IBC metrics
The World Economic Forum (WEF) and the International Business Council (IBC) have defined a number of metrics and disclosures
to help standardise environmental, social and governance reporting. Our Annual Report and Accounts includes a number of
the 'core' WEF/IBC metrics and disclosures, including: Governing purpose (pages 8 to 9 and 72 to 73), Ethical behaviour (page
19), Risk and opportunity oversight (pages 44 to 46), Climate change (pages 51 to 62), and Employment and wealth generation
(pages 112, 121 to 130, 163). Further information on core metrics will be available on our website in May.

See our website for more information on reporting standards

Unilever Annual Report and Accounts 2021Governance
Unilever is subject to corporate governance
requirements in the UK and as a foreign
private issuer in the US. Here we describe
how Unilever is governed, the role of our
Board and its committees, and how our
Directors are remunerated.

Governance review

Corporate governance

Report of the Audit Committee

Report of the Corporate Responsibility Committee

Report of the Nominating and Corporate Governance Committee

Directors' Remuneration Report

Corporate Governance

Unilever's structure

The Governance of Unilever

Unilever PLC (PLC) is the parent company of the Unilever Group, which
was incorporated under the laws of England and Wales in 1894. PLC’s
shares are traded through its listings on the London Stock Exchange
and Euronext in Amsterdam, with its securities also traded on the New
York Stock Exchange under its American Depositary Share programme.

The Board of PLC has implemented standards of corporate governance
and disclosure policies applicable to a UK incorporated company, with
listings in London, Amsterdam and New York.

Articles of association

The current Articles of Association (Articles) were approved by
shareholders at the 2021 AGM and adopted with effect from 5 May 2021.
The amendments made to the Articles at the 2021 AGM brought the
Articles up to date in a number of areas, including providing the ability to
hold AGMs and general meetings in a hybrid format, meaning a combined
physical and electronic general meeting enabling shareholders to choose
whether they attend and vote in person or remotely through an electronic
platform. PLC also retains the ability to hold AGMs and general meetings
in the traditional way as a physical meeting without attendance via an
electronic platform. No decision has been taken on how best to hold AGMs
or general meetings in the future, but the Directors of PLC believe that
it is important to have flexibility to hold AGMs or general meetings in a
different format, which is what the changes to the Articles achieved. There
were also a number of other changes to the Articles to reflect changes to
company law and market practice.

A comprehensive description of Unilever's corporate governance
arrangements, including further details on the structure of the Unilever
Group, is set out in ‘The Governance of Unilever'. It further details the roles
and responsibilities of the Chair, Senior Independent Director (SID), CEO,
CFO and other corporate officers and how our Board effectively operates,
governs itself and delegates its authorities.

The Governance of Unilever also describes 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). Unilever’s strong governance makes
it well-placed to meet its strategic targets by ensuring it has effective risk
management and internal controls, a diverse board, and high levels of
engagement with stakeholders.

www.unilever.com/board-and-management-committees

Board

The Board of PLC has ultimate responsibility for the management,
general affairs, direction, culture, performance and long-term success
of our business as a whole. The Directors lead by example, promoting
Unilever's culture and acting with integrity. The majority of the Directors are
independent Non-Executive Directors who essentially have a supervisory
role, providing constructive challenges, strategic guidance and specialist
advice. In the normal course, Unilever has two Executive Directors, the CEO
and the CFO. A list of our current Directors can be found on pages 72 to 73.

Lapse of distributions

Board Committees

Any PLC dividend unclaimed after 12 years from the date of the declaration
of the dividend by PLC reverts to PLC. Any unclaimed dividends may
be invested or otherwise applied for the benefit of PLC while they are
unclaimed. PLC may also cease to send any cheque for any dividend on
any shares normally paid in that manner if the cheques in respect of at
least two consecutive dividends have been returned to PLC or remain
uncashed.

Unilever N.V., the former parent company of the Unilever Group alongside
PLC, was merged in to PLC and dissolved in November 2020 (Unification).
The time periods for the right to claim cash dividends or the proceeds
of share distributions declared by Unilever N.V. before Unification will
remain at 5 and 20 years, respectively, after the first day the dividend or
share distribution was obtainable from Unilever N.V. Any such unclaimed
amounts will revert to Unilever PLC after the expiry of these time periods.

Redemption provisions and capital call

Outstanding PLC ordinary shares cannot be redeemed. PLC may make
capital calls on money unpaid on shares and not payable on a fixed date.
PLC has only fully paid shares in issue.

Modification of rights

Modifications to PLC's Articles of Association must be approved by a
general meeting of shareholders.

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.

Indemnification

The power to indemnify PLC Directors, together with former Directors,
the Company Secretary and the directors of subsidiary companies, 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 such individuals throughout 2021
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 or acted as trustee of a Unilever UK
pension fund. Appropriate trustee liability insurance is also in place.

The Board has 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 2021,
can be found on pages 73 and 78 to 104.

www.unilever.com/boardsofunilever

Board meetings

In the ordinary course, six Board meetings are planned throughout
the calendar year to consider important corporate events and actions,
for example, the half-year and full-year results announcements; the
development and approval of our strategy; oversight of the performance
of the business; review of the risk framework; authorisation of major
transactions; declaration of dividends; review of the financial plan;
succession planning; review of the functioning of the Board and its
Committees; culture; workforce engagement; and review of corporate
responsibility. Other ad hoc Board meetings are convened to discuss
strategic, transactional and governance matters that arise. A majority
of Board meetings are held in the UK.

In 2021, due to the Covid-19 pandemic, the Board met physically in
October and November only and these Board meetings took place in
the UK. The Board held all other meetings in 2021 virtually, these being in
February, March, May, June, July and September.

The Chair leads the Board and is responsible for its overall effectiveness in
directing the Unilever Group. The Chair sets the Board’s agenda, ensures
the Directors receive accurate, timely and clear information, promotes
and facilitates constructive relationships and effective contribution of
all the Executive and Non-Executive Directors, and promotes a culture of
openness and debate. The Group Secretary supports the Board to ensure
that it has the policies, processes, information, time and resources it needs
to function effectively and efficiently.

When there is a Board meeting, the Non-Executive Directors usually meet
also as a group, without the Executive Directors present. In 2021 they met
six times. The Chair, or in his absence the SID, chairs such meetings.

The table showing the attendance of current Directors at Board meetings
in 2021 can be found on page 73. If Directors are unable to attend a Board
meeting, they have the opportunity beforehand to discuss any agenda
items with the Chair.

Unilever Annual Report and Accounts 202169

Board evaluation

Each year the Board formally assesses its own performance, including
with respect to its composition, diversity and how effectively its members
work together, with the aim of helping to improve the effectiveness of
both the Board and the Committees. At least once every three years,
an independent third party facilitates the evaluation. The last external
evaluation was performed at the end of 2019 by No.4, an independent
third party consultant, and consisted of individual interviews with the
Directors followed by a Board discussion in January 2020, covering both
the outcome of the evaluation and the proposed actions to enhance the
effectiveness of the Board.

At the end of 2021, the Board performed an internal evaluation which
consisted of the Directors completing a questionnaire that focused on
a number of key areas including strategy, risk/financial controls, Board
effectiveness, virtual ways of working, and information/knowledge. The
Chair’s statement on pages 4 to 5 describes the key actions agreed by the
Board following the internal evaluation.

The evaluation of the performance of the Chair and CEO is led by the SID
and Chair respectively, and bespoke questionnaires are used to support
these evaluations.

Committees of the Board evaluate themselves annually under supervision
of their respective Chairs taking into account the views of respective
Committee members and the Board. The key actions agreed by each
Committee in the 2021 evaluations can be found in each Committee
Report.

Board appointment

The report of the Nominating and Corporate Governance Committee
(NCGC) on pages 82 to 83 describes the work of the NCGC in Board
appointments and recommendations for re-election. The procedure
for the nomination and appointment of Directors is contained within
the document entitled ‘Appointment procedure for PLC Directors' which
is available on our website. Directors may be appointed by a simple
majority vote of shareholders at a general meeting, or on an interim basis
by the Board (in which case they will offer themselves for reappointment at
the next AGM).

www.unilever.com/boardsofunilever

Board induction and training

All new Directors participate in a comprehensive induction programme
when they join the Board. The Chair 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. The
training covers, among other things, Unilever’s business, environmental,
social, corporate governance, regulatory developments and investor
relations matters. For example, in 2021 the Directors received
presentations on our sustainability strategy, our people strategy,
progress on our 5 Growth Fundamentals, and eCommerce.

Independence and conflicts

It is important that the Non-Executive Directors can be considered to
be independent. Each year the Board conducts 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
UK and US. The Board currently considers all our Non-Executive Directors
to be independent of Unilever for the purposes of the UK Corporate
Governance Code.

We attach special importance to avoiding conflicts of interest between PLC
and its Directors. The Board ensures 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 Chair and to the other Directors, or, in case any conflict of interest
or potential conflict of interest of the Chair, to the SID and to the other
Directors. The Director in question must provide all relevant information
to the Board, so that the Board 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 take part in the decision-
taking process of the Board in respect of any situation in which he or she
has a conflict of interest. We consider 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 Chair.

Unilever, through the NCGC, assesses and monitors the structure of the
Board including the other directorships held or proposed to be held by
Non-Executive Directors. Unilever aims to have a Board with a diverse
range of skills and capabilities and works to the principle that each
Director shall have sufficient time available for the performance of his or
her duties. Unilever considers that the other board responsibilities of its
Non-Executive Directors, including those taken on during 2021, are fully
consistent with these aims.

How the Board engages with employees

As in previous years, given Unilever’s global footprint and scope of
operations, the Board decided that the most effective way of organising
its engagement with employees was to share the responsibility among all
Non-Executive Directors as a collective point of contact. In 2021, Unilever
published a Workforce Engagement Policy (further details can be found
on our website) setting out our approach to workforce engagement,
which is endorsed by the Board. A number of workforce engagement
activities are provided for in the policy including face-to-face engagement
sessions with Non-Executive Directors, engaging with employee
representatives, townhall meetings, site visits, employee engagement
surveys and Code of Business Principles reports. We believe that taking into
account feedback from our workforce widens the diversity of our Board’s
views when making business decisions.

At the start of the year, the Board discussed the progress on workforce
engagement in 2020 and endorsed the programme for 2021. The Board
considered workforce engagement valuable, offering the ability to tap
into and understand different aspects of Unilever globally and to hear
from people at all organisational levels, including junior employees.
The engagements gave the Non-Executive Directors the ability to be
systematically closer to markets and other parts of the business.

In 2021, the continuing Covid-19 pandemic meant we were required to
hold workforce engagement activities virtually. Non-Executive Directors
attended 14 virtual workforce engagement events across a diverse range
of the workforce. This method of engagement provided Non-Executive
Directors with the opportunity to meet and hear directly from cohorts of
employees at all levels, geographies and Divisions across the business and
allowed for discussions covering a wide range of topics.

Non-Executive Directors engaged with topics that are personal to the
workforce including health and wellbeing, equity, diversity and inclusion,
and compensation and incentives. Non-Executive Directors heard from
employees on strategic initiatives during sessions dedicated to the
Unilever Compass and sustainability, innovation, eCommerce, and a
specific geography visit with employees in North Asia. Sessions were
dedicated to ways of working with two sessions focused on the future
of work initiatives hearing from employees on Unilever’s alternative
employment models and those upskilling their teams and colleagues in
future-fit skills. New hybrid ways of working were discussed with employees
who had returned to offices. Non-Executive Directors connected with
factory workers across three sessions hearing from employees in factories
in Indonesia, Nigeria and Hungary as well as employee representatives
from Italy. Lastly, Non-Executive Directors engaged with employees in the
cyber security team to hear about their activities in managing this topic.

We collaborated with the European Works Council (EWC) in a number
of areas. An engagement session was held with the EWC to share
Unilever’s social commitments. We co-developed and hosted a future
of work conference with the EWC, which was attended by a member of
the ULE. The conference highlighted best practices, outlined future plans
and committed to drive the future of work agenda across Europe through
site visits and engagements. Throughout the year, we worked in a small
group with the EWC focused on equity, diversity and inclusion, exploring
opportunities to achieve a better gender balance in supply chain, for
example, in relation to shift patterns and flexible working. In 2022, we
intend to hold a joint conference with the EWC to promote the equity,
diversity and inclusion agenda across Europe.

Perspectives from the workforce were taken into consideration in
decision-making. For example:
• Employee engagement survey (UniVoice) results from 2020 showed
a need to focus more on career development, so this was added to
the HR priorities for 2021.

Unilever Annual Report and Accounts 2021GOVERNANCE REPORT70

Corporate governance continued

• In the health and wellbeing engagement session, attendees

suggested providing more training in this area. Line managers
have access to training sessions, webinars, supporting material,
bereavement guidance, Covid mental health guidebook, policies,
online training plans, and a team energy tool.

• Our Senior Independent Director attended a town hall meeting in July
2021, which was an opportunity for all employees globally to engage
with one of our Non-Executive Directors. Employees were able to ask
questions and receive feedback on topics, such as gender diversity
pipeline for the Board, hearing employee perspectives, growth
opportunities, CEO pay ratio, living wage and gender pay equity.

• In an engagement session on the Unilever Compass, employees were
able to ask Non-Executive Directors to leverage their networks to help
expand Unilever's ability to influence stakeholders on sustainability.

• An engagement session on the U-work employment model

(employees engaged on assignments) identified a need to further
consider IT access and aspects of compensation based on stage of
career. The Non-Executive Directors remain committed to ensuring
employment rights continue for workers under the U-work model.
• In a session focused on North Asia, employees asked for feedback

from the Non-Executive Directors on the business in China. The Non-
Executive Directors confirmed that demand and production in China
are both powerful and important to Unilever. They also confirmed
business focus on sustainability and local product solutions in China.
• The Board believes that ensuring a culture that embraces differences

without bias is key to stepping up diverse talent representation.
This has been facilitated, for example, by inclusion workshops and
catalyst conversations, starting with the ULE. The engagement
activities in 2021 continue to be a success with positive feedback
from employees and Non-Executive Directors alike. A survey of
employees who attended found that 59% felt their session topic was
extremely relevant to them, all felt they were given the opportunity to
raise matters of interest to them and felt listened to, and all felt the
sessions are an effective way for Unilever to engage with employees.

Non-Executive Directors found the virtual sessions allowed for
effective dialogue with a broad range of employees. Therefore, we
intend to continue with virtual connects in 2022 to access hard-to-
reach sites and diverse Unilever communities.

Based on feedback from Non-Executive Directors, we will also look to carry
out some in-person engagement sessions in 2022, subject to any travel
restrictions caused by Covid-19.

Board discussions and decision-making

Within our business model we have identified six stakeholder groups that
are crucial to our ongoing success, see page 9. As part of our Section 172 of
the UK Companies Act 2006 disclosure, below we detail how our Directors
engaged with stakeholders and had regard to their interests when setting
Unilever’s strategy and taking decisions concerning the business. This,
along with the information on page 63 which explains how we engaged
with our stakeholders in 2021 and the information on pages 69 to 70 which
explains how we engaged with our employees in 2021, form our Section
172 statement.

With clear roles and responsibilities defined by the Governance of Unilever,
the Board and the ULE work in tandem to ensure the success of the
business, informed by the individual knowledge and experience Board
members bring. Board meetings, knowledge sessions covering Unilever
Compass topics, visits and an agreed programme of engagement with
employees ensure the Board and ULE can come to a rounded view of the
interests of stakeholders when making strategic decisions. In 2021, the
ten Board visits were held virtually due to Covid-19 and included sessions
with a number of key markets as well as detailed discussions on Unilever’s
largest brands, Dove and Knorr.

The following section illustrates the key discussions and decisions of
the Board in 2021, including highlighting how the Board considered the
interests of stakeholders in the context of the strategic choices set out in
the Unilever Compass.

Unilever Compass strategic choices Board discussions

Stakeholders considered

Develop our portfolio into high growth spaces Our disposals and acquisitions: ekaterra and

Paula’s Choice

Win with our brands as a force for good,
powered by purpose and innovation

Our approach to innovation and the Climate
Transition Action Plan (CTAP)

Accelerate in USA, India, China and key
growth markets

Growth strategies in USA, India and China

Lead in the channels of the future

Accelerating eCommerce and becoming
the digital commerce partner of choice
for customers

Build a purpose-led, future-fit organisation
and growth culture

Our strategy for equity, diversity and inclusion
(EDI)

Shareholders, our people, consumers,
customers, planet & society

Shareholders, our people, consumers,
customers, suppliers & business partners,
planet & society

Shareholders, our people, consumers,
customers

Shareholders, our people, consumers,
customers, suppliers & business partners,
planet & society

Develop our portfolio into high growth spaces

The evolution of our portfolio into high growth spaces is an important
part of our growth strategy. As one of the steps to deliver this strategy, the
Board endorsed proposals to separate Unilever’s global tea brands into a
new entity, to place them into a new company called ekaterra and then to
sell ekaterra via an agreement reached in 2021 (see page 15). The Board
concluded that ekaterra’s strong portfolio and positive momentum would
enable it to prosper under new ownership, while the interests of Unilever
would be served through a portfolio more focused on high-growth spaces.

We have also acquired new brands in pursuit of our strategy. Our most
recent is Paula’s Choice, a digitally-led cruelty-free brand (see page 15).
The acquisition represents a strong addition to Beauty & Personal Care’s
Prestige beauty portfolio and supports Unilever’s expansion into this fast-
growing market.

In June, the Board approved the acquisition of Paula’s Choice, noting its
potential for growth and the strength it would bring to the business in
terms of its appeal to consumers, particularly those seeking cruelty-free
options and transparency on ingredients. The company’s long experience
in digital commerce will also be invaluable as we pursue another of our
strategic ambitions to become a leader in channels of the future.

Win with our brands as a force for good, powered by
purpose and innovation

We rely on our world class R&D capability to evolve our portfolio and
capitalise on high growth opportunities. We’ve developed a number of
focused science and technology initiatives to position the business for
the future – based on clear priorities and disciplined execution of bigger
projects. A number of these focus on opportunities from the low carbon
transition. Home Care’s Clean Future strategy is already demonstrating the
potential of our ambitious approach with high-performance renewable
and recycled ingredients (see page 23). And through our Future Foods
strategy we're developing lower carbon, plant-based foods alternatives
(see page 22).

Our comprehensive Climate Transition Action Plan (CTAP) sets out how
through our business, our purpose-led brands and our value chain
partners we will transition to net zero emissions by 2039 and zero
emissions in our operations by 2030. Innovation will play a key role in
achieving these goals. The Board approved the CTAP’s creation in 2020
and supported our proactive stance in setting out this ambitious agenda,
agreeing that it was a critical move for the long-term benefit of the
business and society.

Unilever Annual Report and Accounts 202171

We published the CTAP in 2021, with reference to a number of climate-
related investor initiatives to ensure that it met investor expectations. The
views of investors were canvassed by the Chair, CEO and CFO. Investors
supported the publication of the CTAP, agreeing that it represented a well-
considered approach to managing risk and opportunity.

The Board studied the cost assumptions underlying the CTAP and
considered the long-term commercial gain from emissions reductions,
noting that leveraging the power of Unilever’s value chain will be essential
to drive the scale and pace of the change required. They also emphasised
that citizens and consumers have increasing expectations of company
action on climate change. The Board concluded that the CTAP will prove
valuable in the future, particularly plans to communicate the carbon
footprint of products. These footprints – which will require in-depth GHG
lifecycle analysis by our R&D teams – will ultimately help consumers make
lower carbon choices.

Digital commerce also featured prominently in the Board’s virtual
visit programme during the year as business leaders, from markets as
disparate as Brazil to Benelux, explained its importance in winning in the
marketplace. For example, the Board discussed how the Chinese business
is investing in people to deliver on this fast-moving agenda: recruiting
from a highly competitive market and equipping existing employees with
specialist skillsets such as data science. This visit reinforced a discussion
in the workforce engagement programme, where earlier in the year the
Board had emphasised the vital role of the Chinese business in delivering
Unilever’s growth strategy.

The Board was pleased to see that Unilever’s initiatives are paying off,
with eCommerce growing by 44% to reach 13% of turnover in 2021. Board
members considered that accelerating this momentum remains crucial to
the future success of the business.

In March 2021, the Board agreed that the CTAP should be put to a non-
binding advisory vote at the AGM in May, where it received overwhelming
support with over 99% of votes in favour.

Build a purpose-led, future-fit organisation and
growth culture

The Board reviewed Unilever’s plans for a new organisational model
during its annual strategy discussions in 2021. It noted that the objectives
of the simplified model were to create a leaner and faster organisation
that is better able to respond to a fast-changing and intensely competitive
environment. Employee feedback had also echoed the need for greater
speed and agility. Five new category-focused Business Groups will equip
Unilever to be more responsive to consumer and channel trends as each
Group will be accountable for its strategy, growth, and profit delivery.

Through its Compass goals, Unilever is driving equity, diversity
and inclusion in its culture and workforce, through its brands, in its
advertising and among its suppliers.

The Board considers that a bias-free culture is crucial if we are to benefit
from the talent of a diverse workforce, a view that was reinforced through
our workforce engagement where gender diversity and gender pay equity
were raised by employees.

The CEO chairs Unilever’s Global Diversity Board and the Board’s Corporate
Responsibility Committee (CRC) also regularly reviews the topic. The
Committee welcomed Unilever’s comprehensive strategy and supported
Unilever’s drive to maximise the use of tools and data-driven insights to
inform decision-making, for example to ensure fairness in recruitment and
appointments. To support this improved decision-making, we are using a
mix of behavioural science and data to shed light on our senior leaders’
hiring patterns.

Unilever’s equity, diversity and inclusion strategy focuses on four
areas: gender; race and ethnicity; people with disabilities; and LGBTQI+
communities. The CRC probed the detail of this strategy, enabling it to see,
for example, how we are determining a baseline on people with disabilities
to inform our future steps and how we are equipping eight countries to
support advocacy on human rights and freedom from discrimination.
And through a Board knowledge session, our objective to increase the
representation of women across the business was also discussed.

Further illustrations of this strategy in action were shared in many of the
Board virtual visits, for instance Unilever’s team in Brazil explained their
targets to ensure equality of opportunity for Black and mixed-race people
(who make up half of the Brazilian population) in leadership roles – so that
leaders reflect the societies they live in and the consumers they serve. And
at a brand level, the Board engaged with Dove’s team who shared their
work to challenge systemic race-based hair discrimination through The
CROWN Act.

Accelerate in USA, India, China and key growth markets

During the year the Board scrutinised progress against the Unilever
Compass strategy. Underpinning the success of the Unilever Compass are
the 5 Growth Fundamentals (see page 9) – which are being driven with
discipline throughout Unilever to improve the operation of the business. In
addition, they held in-depth discussions with our three biggest businesses
– the USA, India and China – to analyse progress on growth in these
important markets.

In discussions with the US leadership team, the Board noted that the USA
represents a very competitive and volatile market. The US business is
building its competitiveness, and growing the proportion of the business
sold through eCommerce remains a priority. It is working closely with
customers, for example by creating customised product ranges for them,
while boosting its premium product portfolio. Ensuring its brands serve
the varying needs of consumers, for example the Hispanic population, has
also been identified as a priority.

The Board’s discussion with our Indian business focused on the continued
resilience of Hindustan Unilever during 2021 and the opportunities over
the next decade as internet access increases and the Indian economy
expands. Hindustan Unilever is pursuing growth in line with the Unilever
Compass – with a particular focus on making good nutrition accessible
and building our beauty brands. Recognising that these plans respond
to consumer needs, the Board endorsed Hindustan Unilever’s strategic
growth ambitions.

In China, consumers’ passion for digital commerce continues to rise.
The Board spoke to the Unilever China leadership team and studied an
example of how the Chinese business had benefited from improving its
digital capabilities. By connecting real-time social media advertising to
eCommerce sites, it was able to track the effectiveness of its advertising
in converting to sales, and ultimately to derive a bigger return on its
marketing investment. Integrating digital processes is a company-wide
imperative to support growth, and Unilever has placed a high priority on
training for employees, particularly for those in marketing (see page 19).

From its workforce engagement discussions with employees (see page 69),
the Board recognised the importance of localised products and solutions
for Chinese consumers, and urged Unilever China to continue developing
its portfolio of in-home foods, hygiene, and health and wellbeing brands.

Lead in the channels of the future

Online commerce continues to grow, a trend that accelerated as people
switched to digital channels during the pandemic. The Board keeps close
track of Unilever’s strategic choice to lead in the channels of the future,
which goes hand in hand with the strategic choice to accelerate growth in
key markets.

The Board focused on eCommerce during its July meeting and Unilever’s
aim to become the digital commerce partner of choice for customers.
To achieve this, we are developing our capabilities across business-to-
business (B2B) and business-to-consumer (B2C) channels. At the same
time, we are exploring new business models and new routes to market in
our aim to help customers – both large and small – grow their businesses.

Unilever Annual Report and Accounts 2021GOVERNANCE REPORT72

Our Board of Directors

Our Non-Executive Directors bring diverse experience to the Board’s
strategic discussions and decision-making

Nils Andersen
Chair

Nationality Danish
Age 63, Male
Appointed April 2015
CC NC

Andrea Jung
Vice Chair/Senior
Independent Director

Nationality
American/Canadian
Age 62, Female
Appointed May 2018
CC

Alan Jope
CEO

Nationality British
Age 57, Male
Appointed CEO
January 2019
Appointed Director
May 2019

Current external appointments: AKZO Nobel
N.V. (Chair); Worldwide Flight Services (Chair);
Salling Foundation (NED); European Round Table
of Industrialists (Member).

Previous experience: Faerch Plast (Chair);
Salling Group (Chair); BP plc (NED); 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:
Grameen America Inc. (President and CEO);
Apple Inc. (NED); Wayfair Inc. (NED).

Previous experience: Avon Products Inc. (CEO);
General Electric (Board member); Daimler AG
(Board member).

Current external appointments: Generation
Unlimited (Chair).

Previous experience: Beauty & 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).

Graeme Pitkethly
CFO

Nationality British
Age 55, Male
Appointed CFO
October 2015
Appointed Director
April 2016

Laura Cha
Non-Executive
Director

Nationality Chinese
Age 72, Female
Appointed May 2013
NC CC

Judith Hartmann
Non-Executive
Director

Nationality Austrian
Age 52, Female
Appointed April 2015
AC

Current external appointments: Pearson Plc
(NED); Financial Stability Board Task Force on
Climate-related Financial Disclosures (Vice
Chair); The 100 Group Main Committee (Vice
Chair); UN Global Compact CFO Task Force.

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: Hong Kong
Exchanges and Clearing Ltd (Chair); Foundation
Asset Management Sweden AB (Senior
International Adviser); Executive Council of the
Hong Kong Special Administrative Region (Non-
official member); CSRC International Advisory
Council (Vice Chair).

Previous experience: HSBC Holdings plc (NED);
Securities and Futures Commission, Hong Kong
(Deputy Chair); China Securities Regulatory
Commission (Vice Chair); China Telecom
Corporation Limited (NED); 12th National
People’s Congress of China (Hong Kong
Delegate).

Current external appointments: None

Previous experience: ENGIE Group (Deputy
CEO); Suez (NED); General Electric (various roles);
Bertelsmann SE & Co. KGaA (CFO); RTL Group SA
(NED); Penguin Random House LLC (NED).

Adrian Hennah
Non-Executive
Director

Nationality British
Age 64, Male
Appointed November
2021
AC

Susan Kilsby
Non-Executive
Director

Nationality
American/British

Age 63, Female
Appointed August
2019
AC

Ruby Lu
Non-Executive
Director

Nationality Chinese
Age 51, Female
Appointed November
2021
NC CC

Current external appointments: J Sainsbury
plc (NED); Oxford Nanopore Technologies plc
(NED).
Previous experience: Reckitt Benckiser Group
plc (Executive Director); RELX plc (NED).

Current external appointments: Fortune
Brands Home & Security Inc. (Chair); Diageo plc
(Senior Independent Director); NHS England
(Board Member).

Previous experience: BHP plc (NED); L’Occitane
International (NED); Keurig Green Mountain
(NED); Coca-Cola HBC AG (NED); Goldman Sachs
International (NED); Shire plc (Chair); Mergers
and Acquisitions, EMEA – Credit Suisse (Chair).

Current external appointments: Uxin Limited
(NED); Yum China Holdings Inc. (NED).
Previous experience: iKang Healthcare Group,
(NED); Blue City Holdings Limited (NED).

Committee membership key

Chair

Audit Committee

Compensation Committee

Corporate Responsibility Committee

Nominating and Corporate Governance Committee

Unilever Annual Report and Accounts 202173

Based on ONS categorisation.

Strive Masiyiwa
Non-Executive
Director

Nationality
Zimbabwean
Age 61, Male
Appointed April 2016
CR

Youngme Moon
Non-Executive
Director

Nationality American
Age 57, Female
Appointed April 2016
CR

Current external appointments: Econet
Group, privately held (Founder and Executive
Chairman); Econet Wireless Zimbabwe Ltd (NED);
Netflix Inc. (NED); International Advisory Board
of Bank of America (Board member); Stanford
University Advisory Board (Board member);
National Geographic Society (Board member).
Previous experience: Africa Against Ebola
Solidarity Trust (Co-Founder and Chairman);
Grow Africa (Co-Chairman); Nutrition
International (formerly known as Micronutrient
Initiative) (Chairman); Rockefeller Foundation
(Trustee).

Current external appointments: Mastercard
Inc. (Board member); Sweetgreen Inc. (Board
member); Jand Inc. (Warby Parker) (Board
member); Harvard Business School (Professor).

Previous experience: Harvard Business School
(Chair and Senior Associate Dean for the MBA
Program); Massachusetts Institute of Technology
(Professor); Avid Technology (NED); Rakuten Inc.
(NED).

John Rishton
Non-Executive
Director

Nationality British
Age 64, Male
Appointed May 2013
AC

Feike Sijbesma
Non-Executive
Director

Nationality Dutch
Age 62, Male
Appointed
November 2014
CR NC

Current external appointments: Informa plc
(Chairman); Serco Group plc (Chairman); Majid
al Futtaim Properties LLC (Board member).
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);
Associated British Ports Holdings Ltd. (NED).

Current external appointments: Royal Philips
(Chairman); Royal DSM NV (Honorary Chairman);
De Nederlandsche Bank NV (Member of the
Supervisory Board); Trustees of the World
Economic Forum (Board member); Board of the
Global Center on Adaptation (Co-Chair); Advisor
Africa Improved Foods.
Previous experience: Royal DSM NV (Former
CEO); Utrecht University (Supervisory Director);
Stichting Dutch Cancer Institute/Antoni van
Leeuwenhoek Hospital NKI/AVL (Supervisory
Director); CPLC WBG (Chair).

Non-Executive Directors

Nils
Andersen

Laura
Cha

Judith
Hartmann

Adrian
Hennah

Andrea
Jung

Susan
Kilsby

Ruby Lu

Strive
Masiyiwa

Youngme
Moon

John
Rishton

Feike
Sijbesma

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

Investment banking and
transaction expertise
Science, technology and
innovation expertise
Purposeful business and
sustainability experience
HR and remuneration in
international firms

Attendance at Board Meetings

Planned

Adhoc

Planned

Adhoc

Nils Andersen

Laura Cha

Judith Hartmann

Adrian Hennah

Alan Jope

6/6

1/1

6/6

3/3 Andrea Jung

3/3 Susan Kilsby

3/3 Ruby Lu

N/A Strive Masiyiwa

3/3

6/6

1/1

6/6

3/3 Youngme Moon

3/3 Graeme Pitkethly

N/A John Rishton

3/3 Feike Sijbesma

Planned

Adhoc

6/6

3/3

2/3

Board tenure38%6-9 years31%0-3 years31%3-6 yearsBoard ethnicity61%White31%Asian8%BlackBoard gender diversity54%Male46%FemaleUnilever Annual Report and Accounts 2021GOVERNANCE REPORT

Unilever Leadership Executive (ULE)

Our executive management team is responsible for the day-to-day running
of the business and the execution of our strategy.

The Board has delegated the operational running of the Unilever Group
to the CEO with the exception of the following matters which are reserved
for the Board, as more fully set out in the Governance of Unilever::
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 Board in relation to the operational running of the Group and other
powers delegated to him by the Board. The CEO can delegate any of his
powers and discretions, and he does so delegate to members of the 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
Board. 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 Board
decision-making process, to provide the Board 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 and those listed below. As announced on 25 January 2022, there
will be some changes to the leadership team with effect from 1 April 2022.
These are indicated below.

For Alan Jope and Graeme Pitkethly, see page 72
ULE as at December 31 2021
*For ULE changes and new appointments, see page 75

Conny Braams
Chief Digital &
Marketing Officer

Nationality Dutch
Age 56, Female
Appointed to ULE
January 2020
Joined Unilever 1990

Reginaldo
Ecclissato*
Chief Business
Operations Officer

Nationality Brazilian
Age 53, Male
Appointed to
ULE January 2022
(replacing Marc
Engel)
Joined Unilever 1991

Hanneke Faber*
President, Foods
& Refreshment

Nationality Dutch
Age 52, Female
Appointed to ULE
January 2018
Joined Unilever 2018

Previous Unilever posts include: EVP for Mexico,
Caribbean, and Central America; EVP Supply
Chain for North America and Latin America; VP
Supply Chain, Home Care for the Americas.

Current external appointments: Kröller-Müller
Museum (Advisory Board member); Rotterdam
School of Management, Erasmus University
(Advisory Board member).
Previous Unilever posts include: Unilever
Middle Europe (EVP); Unilever Benelux (Chair
and EVP); Home Care Europe (EVP); Unilever
Food Solutions Asia, Africa and Middle East
(EVP); various Unilever marketing and general
management roles.

Fabian Garcia*
President, North
America

Nationality American
Age 62, Male
Appointed to ULE
January 2020
Joined Unilever 2019

Sunny Jain*
President, Beauty &
Personal Care

Nationality Canadian
Age 46, Male
Appointed to ULE
June 2019
Joined Unilever 2019

Current external appointments: Council of
Foreign Relations in the US (member); Arrow
Electronics (Board member).

Previous posts include: Revlon (President and
CEO); Colgate Palmolive (COO; President of the
Asia/Pacific Division, EVP Latin America); P&G
(President of Asia Pacific, General Manager of
Venezuela).

Previous posts include: Amazon.com Inc.
(Head of Core Consumables/FMCG Retail; VP
Consumables/FMCG Innovation); P&G US and
P&G Canada (various roles in New Business
Creation, Marketing, Sales and Information
Technology).

Current external appointments: Tapestry
Inc. (NED); FoodDrinkEurope (Board member);
Leading Executives Advancing Diversity (LEAD)
(Advisory Board member); Pepsi/Lipton JV (Board
member).
Previous posts include: Bayer AG (Supervisory
Board member); Royal Ahold Delhaize (CEIO & EC
member); Royal Ahold (CCO & EC member); P&G
(VP & GM).
Previous Unilever posts include: Europe
(President).

Sanjiv Mehta
President, Unilever,
South Asia and Chair
and Managing
Director, Hindustan
Unilever

Nationality Indian
Age 61, Male
Appointed to ULE
May 2019
Joined Unilever 1992

Current external appointments: Board of
Indian School of Business (Director); Federation
of Indian Chambers of Commerce and Industry
(Senior Vice President); Breach Candy Hospital
Trust (member); South Asia Advisory Board of
Harvard Business School (member); Xynteo’s
‘India 2022’ (Chair); Advisory Network to the High
Level Panel for a Sustainable Ocean Economy
(Co-Chair).
Previous Unilever posts include: Advisory
Network to the High Level Panel for a
Sustainable Ocean Economy (Co-Chair);
Unilever North Africa and Middle East (Chair
and CEO); Unilever Philippines Inc. (Chair and
CEO); Unilever Bangladesh Limited (Chair and
Managing Director).

Unilever Annual Report and Accounts 202175

Leena Nair*
Chief HR Officer

Nationality British
Age 52, Female
Appointed to ULE
March 2016
Joined Unilever 1992
(left on 31 January
2022)

Nitin Paranjpe*
Chief Operating
Officer

Nationality Indian
Age 58, Male
Appointed to ULE
October 2013
Joined Unilever 1987

Richard Slater
Chief R&D Officer

Nationality British
Age 44, Male
Appointed to ULE
April 2019
Joined Unilever 2019

Current external appointments: BT Plc (NED).

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).

Current external appointments: Heineken N.V.
(Member of the Supervisory Board).

Previous Unilever posts include: Foods &
Refreshment (President); Home Care (President);
Unilever South Asia (EVP) and Hindustan Unilever
Limited (CEO); Home and Personal Care India
(EVP); Home Care India (VP); senior positions in
Laundry and Household Care.

Previous posts include: GSK (Head of R&D,
Consumer Healthcare); Reckitt Benckiser (Head
of R&D, Consumer Healthcare); Reckitt Benckiser
(Global Group Director/VP R&D Personal Care;
Global Director R&D Aircare, Analgesics and New
Brands); Boots Healthcare (various roles).

Ritva Sotamaa*
Chief Legal Officer
& Group Secretary

Nationality Finnish
Age 58, Female
Appointed to ULE
February 2013
Joined Unilever 2013

Peter ter Kulve*
President, Home Care

Nationality Dutch
Age 57, Male
Appointed to ULE
May 2019
Joined Unilever 1988

Current external appointments: Fiskars
Corporation (NED).
Previous posts include: Siemens AG – Siemens
Healthcare (GC); General Electric Company –
GE Healthcare (various positions including GE
Healthcare Systems (GC)); Instrumentarium
Corporation (GC).

Previous Unilever posts include: Unilever
South East Asia & Australasia (President) and
Chief Digital Transformation & Growth Officer;
EVP Corporate Transformation; Unilever Benelux
(Chair and EVP); Unilever Ice Cream (Global Head
& EVP); various Brand and Channel Management
roles.

ULE changes and new appointments with the new
Compass organisation

Matt Close

Appointed as Business Group President Ice Cream
(newly created role)

Reginaldo Ecclissato

Appointed as Chief Business Operations Officer
(newly created role)

Marc Engel

Hanneke Faber

Left role as Chief Supply Chain Officer
(on 31 December 2021)

Appointed as Business Group President Nutrition
(newly created role)

Fernando Fernandez

Appointed as Business Group President Beauty and
Wellbeing (newly created role)

Fabian Garcia

Sunny Jain

Leena Nair

Nitin Paranjpe

Ritva Sotamaa

Peter ter Kulve

Maria Varsellona

Appointed as Business Group President Personal Care
(newly created role)

Leaving role as President, Beauty & Personal Care
(will leave Unilever on 1 April 2022)

Left role as Chief HR Officer
(on 31 January 2022)

Appointed as Chief Transformation Officer & Chief People
Officer (newly created role)

Leaving role as Chief Legal Officer and Group Secretary
(will leave Unilever on 1 April 2022)

Appointed as Business Group President Home Care
(newly created role)

Appointed as Chief Legal Officer & Group Secretary
(replacing Ritva Sotamaa from 1 April 2022)

Based on ONS categorisation.
Other Ethnic Group include:
1 ULE member identified as Hispanic
1 ULE identified as White/Latin

ULE gender diversity31%Female69%MaleULE ethnicity Hisp/Latino54%White31%Asian15% Otherethnic groupUnilever Annual Report and Accounts 2021GOVERNANCE REPORT76

Corporate Governance continued

Our shares

Share capital

Our shareholders

Significant shareholders of PLC

PLC’s issued share capital on 31 December 2021 was made up of
£81,798,695 split into 2,629,243,772 ordinary shares of 31/9p each and
each carrying one vote. A total of 62,976,145 PLC ordinary shares were
held in treasury as at 31 December 2021.

As far as Unilever is aware, the only holder of more than 3% of,
or 3% of voting rights attributable to, PLC’s ordinary share capital
(‘Disclosable Interests’) on 31 December 2021, was BlackRock, Inc. with
a shareholding of 8.3% and voting interest of 8.5%.

Listings

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

* One American Depositary Receipt represents one

PLC ordinary share with a nominal value of 31/9p.

Share issues and purchase of shares

At the 2021 PLC AGM held on 5 May 2021, the PLC Directors were
authorised to:
• issue new shares, up to a maximum of £27,212,500 nominal value
(which at the time represented approximately 33% of PLC’s issued
ordinary share capital);

• disapply pre-emption rights up to a maximum of £4,086,711 nominal

value (which at the time represented approximately 5% of PLC’s
issued ordinary share capital) for general corporate purposes and an
additional 5% authority in connection with an acquisition or specified
capital investment; and

• make market purchases of its ordinary shares, up to a maximum of

262,811,000 ordinary shares (which at the time represented just under
10% of PLC’s issued ordinary share capital) and within the price limits
prescribed in the resolution.

PLC conducted a share buyback programme during 2021 with an
aggregate market value of approximately €3 billion, pursuant to which
PLC bought back 62,976,145 PLC ordinary shares of 31/9 p each in two
tranches. The purpose of the share buyback programme was to reduce the
capital of PLC and the total consideration paid for the repurchased shares
(excluding transaction costs) was €2,999,999,879. The 62,976,145 PLC
ordinary shares that have been repurchased were held in treasury as at 31
December 2021, representing 2.4% of PLC’s issued share capital. Outside
of this share buyback programme, no other company within the Unilever
Group purchased any PLC ordinary shares or American Depositary Shares
during 2021.

At the 2021 AGM, the Directors were also authorised to reduce the share
premium account of the Company by £18,400,000,000. Immediately prior to
Unification becoming effective, Unilever N.V. had distributable reserves of
some €20.6bn (£18.4bn at the prevailing exchange rate). Upon Unification
becoming effective, these distributable reserves of Unilever N.V. could not
be legally recognised as realised profits (or distributable reserves) of PLC.
Accordingly, the purpose of the reduction in PLC’s share premium account
was effectively to reinstate the distributable reserves of Unilever N.V. prior
to Unification in PLC’s accounts, so that PLC’s distributable reserves were
equivalent to those available prior to Unification. The share premium
account reduction was approved by the court and became effective on
15 June 2021.

Trust Office

The Trust Office of Unilever N.V. operated a depositary receipts system
whereby shareholders in Unilever N.V. could alternatively have their
shares held and managed by the Trust Office. Following Unification, the
Trust Office was dissolved on 19 January 2022. The ordinary shares in PLC
held by the Trust Office have been sold and the proceeds transferred into
consignment (in consignatie) in the deposit fund (consignatiekas) at the
Dutch Ministry of Finance.

As far as Unilever is aware, no new Disclosable Interests have been
notified to PLC between 1 January 2022 and 24 February 2022 (the latest
practicable date for inclusion in this report). Between 1 January 2019 and
24 February 2022, (i) BlackRock, Inc., 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.

Shareholder engagement

We value open and effective communication with our shareholders.

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

In 2021, meetings were held with institutional shareholders based across
the world. Members of the ULE and Investor Relations team also met a
large number of investors at industry conferences. In October 2021, the
Chair and the Chairs of the Board committees met with investors in order
to further establish the relationship between the Directors and our largest
investors and to cement the understanding on how the Board and its
Committees operate. During this event, the Chair and Committee Chairs
each presented before concluding with a Q&A session.

The Chair of the Compensation Committee also extensively engaged
with and sought feedback from investors in relation to our new Directors’
Remuneration Policy, which was renewed at the 2021 PLC AGM. Further
details can be found on page 84 of the Directors’ Remuneration Report.
This new Policy was approved at the 2021 AGM with over 93% of votes in
favour of the Policy.

On an ongoing basis, the Board is 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 Chair
or the SID, and the Chair, Executive Directors and Chairs of the Committees
are also generally available to answer questions from the shareholders at
the AGM each year. More information on shareholder engagement can be
found on page 76.

www.unilever.com/investor-relations

General meetings

At the AGM, the Chair 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. In the ordinary course, shareholders
are encouraged to attend the 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
AGM and are entitled to address the meeting on any part of the business
of the meeting which concerns them as auditors.

As a result of the Covid-19 pandemic and the UK government’s restrictions
on gatherings, the 2021 PLC AGM was held as a closed meeting and
shareholders were unable to attend the meeting in person. However,
recognising that the AGM also serves as a forum for shareholders to
engage with Directors, following the conclusion of the PLC AGM, a live
shareholder webcast was held on Unilever’s corporate website with
statements by the Chair and CEO. The Senior Independent Director and all
Committee Chairs were also present and following the statements from
the Chair and CEO, the questions submitted by shareholders prior to the
webcast and received during the webcast were responded to.

Unilever Annual Report and Accounts 202177

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 2022 PLC AGM can be found within the PLC AGM Notice
which will be published in March 2022.

Required majorities

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

A proposal to alter the Articles 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, PLC’s
Articles may be amended by a special resolution. The Articles of PLC can be
found on our website.

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

Right to hold and transfer shares

Unilever’s constitutional documents place no limitations on the right to
hold or transfer PLC ordinary shares. There are no limitations on the right
to hold or exercise voting rights on the ordinary shares of PLC imposed by
English law.

Corporate governance
compliance

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 UK and the US
and in this section, we report on our compliance against these.

The United Kingdom

In 2021, PLC has applied the Principles and complied with the Provisions of
the UK Corporate Governance Code. Further information on how Unilever
has applied the five overarching categories of Principles can be found on
the following pages – (i) Board Leadership and Company Purpose: pages 8
and 68 to 71; (ii) Division of Responsibilities: pages 68 to 69 and 78 to 83;
(iii) Composition, Succession and Evaluation: pages 82 and 83; (iv) Audit,
Risk and Internal Control: pages 78 to 79; and (v) Remuneration: pages 84
to 104. 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.

Under 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. We believe we do not have any such contracts
or arrangements.

Greenhouse Gas (GHG) Emissions: Information on GHG emissions can be
found on pages 55 and 64.

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 discuss issues relating to Unilever sites in the UK. 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. Further
details on how the Board has engaged with the workforce can be found on
pages 69 and 70.

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 reskill and support employees who become disabled while
working within the Group.

The United States

PLC is listed on the New York Stock Exchange (NYSE). As such, PLC 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 and the UK Corporate
Governance 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.

Attention is drawn to the Report of the Audit Committee on pages 78 to 79.
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.

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 2021 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 Board, 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 US Securities Exchange Act
of 1934 – Rule 13a – 15(e), as at 31 December 2021were 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 197.

www.unilever.com/corporategovernance

Unilever Annual Report and Accounts 2021GOVERNANCE REPORT78

Report of the Audit
Committee

Committee members and attendance

John Rishton Chair

Judith Hartmann

Adrian Hennah
(member since 1 November 2021)

Susan Kilsby

Attendance

7/7

1/1

7/7

This table shows the membership of the Committee together with their
attendance at meetings during 2021. Attendance is expressed as the
number of meetings attended out of the number eligible to be attended.

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 current members are Judith Hartmann,
Susan Kilsby and Adrian Hennah. Adrian joined the Board and the Audit
Committee on 1 November 2021. For the purposes of the US Sarbanes-
Oxley Act of 2002, John Rishton is the Audit Committee’s financial expert.

The Board is satisfied that the members of the Audit Committee are
competent in financial matters and have recent and relevant experience.
Other attendees at Committee meetings were the Chief Financial Officer,
Chief Auditor, EVP Financial Control and Risk Management, Chief Legal
Officer, Group Secretary, EVP Sustainable Business Performance and
Reporting 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 issues in more detail.

The majority of the meetings have been held virtually, while the last
meeting in the year was held as a hybrid meeting adopting similar ways of
working as the rest of the business.

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/investors/corporate-governance

The Committee’s responsibilities include, but are not limited to, the
following matters:
▪ oversight of the integrity of Unilever’s financial statements;
▪

review of Unilever’s half-yearly 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 Board of the nomination of the
external auditors for shareholder approval; and approval of their
fees, refer to note 25 on page 165; and
▪ performance of the internal audit function.

All relevant matters arising are brought to the attention of the Board.

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 2021, sessions were held with
management on cyber security, data privacy, major transformation
projects and the management of third parties, particularly service
providers and the increased dependency on those. The Committee also
had presentations from management and discussions on the business's
risk management activities, the preparation of the financial statements,
the overall control environment, and the operation of the financial
reporting controls.

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 full-year results, the external auditor’s report. It also reviewed
the Annual Report and Accounts and the Annual Report on Form 20-F
2021. These reviews incorporated the accounting policies and significant
judgements and estimates underpinning the financial statements as
disclosed within note 1 on pages 118 to 119. Particular attention was paid
to the following significant matters in relation to the financial statements:
▪

indirect tax provisions and contingent liabilities, refer to notes 19 and
20 on pages 159 to 161;
▪
revenue recognition – including discounts and incentives;
▪ accounting treatment of assets held for sale (e.g. ekaterra).

These matters were also highlighted by our external auditors as being
important in their audit.

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 matters were also discussed with the external auditors
and further information can be found on pages 107 to 113. The Committee
specifically discussed with the external auditor how management’s
judgement and assertions were challenged and how professional
scepticism was demonstrated during their audit of these areas; this
included the disclosures for each matter noted above. The Committee is
satisfied that there are relevant accounting policies in place in relation to
these significant matters and management have correctly applied these
policies.

In addition to the matters noted above, our external auditors, as required
by auditing standards, also consider the risk of management override of
controls. Nothing has come to our attention or their attention to suggest
any material misstatement with respect to suspected or actual fraud
relating to management override of controls.

At the request of the Board, the Committee undertook to:
▪

review the appropriateness of adopting the going concern
basis of accounting in preparing the annual and half-yearly
financial statements;

▪ 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 and emerging 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 Board 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; and

▪ consider whether the Unilever Annual Report and Accounts 2021
was fair, balanced and understandable, and whether it provided
the necessary information for shareholders to assess the Group’s
year-end position and performance, business model and strategy. To
make this assessment, the committee received copies of the annual
report and financial statements to review during the drafting process
to ensure that the key messages being followed in the annual report
were aligned with the company’s position, performance and strategy.
The Committee also reviewed the processes and controls that are
the basis for its preparation. The Committee was satisfied that, taken
as a whole, the Unilever Annual Report and Accounts 2021 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.
The assessment was undertaken through a review of:
▪

the yearly report detailing the risk identification and assessment
process, together with any emerging risks identified by management;
reports from senior management on those 2021 corporate risks for

▪

Unilever Annual Report and Accounts 2021which the Audit Committee had oversight responsibility: treasury, tax
and pensions, information security, legal and regulatory compliance,
and business transformation;
the proposed 2022 corporate risks identified by the ULE;
the Quarterly Risk and Control Status Reports, including Code of
Business Principles cases relating to frauds and financial crimes;

▪
▪

▪ a summary of control deficiencies identified through controls testing
activities together with action plans to address underlying causes;

▪ management’s improvements to reporting through further

▪

automation and centralisation; and
the annual financial plan and Unilever’s dividend policy and dividend
proposals.

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

The Committee has completed its review for 2021 on both risk management
and internal control and was satisfied that the process had worked effectively
and where specific areas for improvement were identified, there was
adequate mitigation or alternative controls and that processes were under
way to ensure sustainable improvements. The key area of focus has been to
ensure that the controls impacted by the transformation programmes are
appropriately designed and are being implemented effectively. Through
its review, it also ensured that appropriate procedures are in place for the
detection and prevention of fraud.

During 2021, the Committee continued to review the sustainability
assurance provided by PwC and plan for the assurance on non-financial
Compass metrics going forward.

The Committee is monitoring and taking a proactive approach in
anticipating and preparing for legislative or regulatory changes which
may be required following the outcome of the Department for Business,
Energy & Industrial Strategy (BEIS) consultation paper. As part of this, the
Committee reviewed the formal response of the company into the BEIS
consultation process mid-year 2021.

Internal audit function
The Committee reviewed internal audit’s plan for the year which is focused
on Unilever’s corporate risks, and ensured the necessary resources are
in place to perform effectively. The pandemic has impacted the way the
audits have been completed since April 2020. The audits were mainly
conducted remotely and there has been more focus on data analysis
and the use of remote video technology. Data and analytics has made
the internal audits more efficient and effective, increasing the coverage.
The Committee reviewed interim and year-end summary reports and
management’s response together with the completion status of agreed
actions.

Every five years, the Committee engages an independent third party to
perform an effectiveness review of the function. This was last completed
in 2018 and is planned for 2022. In 2021, the Committee evaluated the
performance of the internal audit function through a questionnaire.
The feedback was reviewed, and the Committee was satisfied with the
effectiveness of the internal audit function. During the year, the Committee
also met independently with the Chief Auditor and discussed the results of the
audits performed and any additional insights obtained from the Chief Auditor.

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 the materiality applied, scope and 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 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 reappointment as the Group’s external auditors at the

2021 AGM. On the recommendation of the Committee, the Directors will be
proposing the reappointment of KPMG at the AGM in May 2022.

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, which requires Unilever to tender the audit every ten years.
The last tender for the audit of the Annual Report and Accounts was
performed in 2013 with respect to the audit for the financial year 2014. The
Committee has commenced planning for a tender process during 2022
with respect to the audit for the financial year 2024. This would allow time
for the transition of non-audit services ahead of any change in auditor that
may be made. At present, we are satisfied with the effectiveness of our
current auditors and hence have no plans to retender the external auditor
appointment for an earlier period. This position is re-evaluated each year.

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.
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.
During 2021, as part of routine partner rotation, Jonathan Mills of KPMG
replaced Nicholas Frost as lead audit partner.

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.
During the year, KPMG presented to the Committee the key findings from
the review of their 2019 audit files by the FRC’s Audit Quality Review (AQR)
team. KPMG confirmed that they had acknowledged the AQR comments
and had addressed all of them in the 2020 audit through a combination of
additional procedures and improved documentation.

The Committee also reviewed the statutory audit, other audit and
non-audit 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;
▪ other audit services - audits that are not required by law or

regulation; and

▪ non-audit services - work that our external auditors are best placed

to undertake, which may include:
▪ services required by law or regulation to be performed by the audit

firm; and

▪ services where knowledge obtained during the audit is relevant to

the service such as bond issue comfort letters.

Unilever has for many years maintained a policy which prescribes in detail the
types of engagements for which the external auditors can be used with all
other engagements being prohibited. The policy is aligned with both UK and
SEC regulations and is updated in line with these regulations.

All engagements over €250,000 require specific advance approval by the Audit
Committee Chair. The Committee further approve all engagements which
have been authorised by the EVP Financial Control and Risk Management.
These authorities are reviewed regularly and, where necessary, updated in the
light of internal and external developments. Since the appointment of KPMG
in 2014, the level of non-audit fees has been below 7% of the annual statutory
audit fee. The level of other audit fees has been below 6% of the annual
statutory audit fee except for 2017 (41%), 2018 (24%), 2020 (32%) and 2021
(21%) due to assurance work relating to the disposal of our Spreads business
(2017 and 2018) and assurance work relating to the separation of our Tea
business (2020 and 2021).

Evaluation of the Audit Committee

As part of the internal Board evaluation carried out in 2021, the Board
evaluated the performance of the Committee. The Committee also carried
out a self assessment. While overall the members concluded that the
Committee is performing effectively, they agreed to ensure continued
engagement with the Group’s operations by organising (virtual) site visits
and to allocate time to transformation projects.

John Rishton
Chair of the Audit Committee

Judith Hartmann

Adrian Hennah

Susan Kilsby

Unilever Annual Report and Accounts 2021GOVERNANCE REPORT80

Report of the Corporate
Responsibility Committee

Committee members and attendance

Strive Masiyiwa Chair

Youngme Moon

Feike Sijbesma

Attendance

3/4

4/4

The Corporate Responsibility Committee comprises three Non-Executive
Directors: Strive Masiyiwa (Chair), Youngme Moon and Feike Sijbesma.

The Chief Supply Chain Officer, the Chief Sustainability Officer and
the Chief Business Integrity Officer attend the Committee’s meetings.
The Chief Legal Officer and Group Secretary may also join the
Committee’s discussions.

Role of the Committee

The Corporate Responsibility Committee oversees Unilever’s conduct
as a responsible global business. Core to this remit is its governance of
progress on Unilever’s sustainability agenda, as set out in the company’s
integrated business strategy, the Unilever Compass (see pages 8 to 11).
Core to this remit is reviewing sustainability-related risks, developments
and opportunities.

The Committee is also charged with ensuring that Unilever’s reputation is
protected and enhanced, so it must consider the company’s influence and
impact on stakeholders. Central to this is the need to identify any external
developments that are likely to have an influence on Unilever’s standing
in society, and to ensure that appropriate and effective communication
policies are in place to support the company’s reputation. This remit also
extends to overseeing Unilever’s Code of Business Principles and third-
party compliance, ensuring that both Unilever’s direct employees and
those working within the company’s value chain comply with the expected
standards of conduct.

The Committee’s discussions are informed by the experience of the
Unilever Leadership Executive – as those accountable for driving
responsible and sustainable growth through Unilever’s operations, value
chain and brands. Other senior leaders are invited to the Committee
to share their perspectives and insights on key issues and external
developments. These in-depth discussions ensure the Committee stays
alert to current and emerging trends and any potential risks arising from
sustainability issues. The Committee captures these insights for the Board
through formal feedback and the ongoing sharing of knowledge.

Complementing the Committee’s role, the Audit Committee 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 of Unilever’s sustainability commitments within the
Unilever Compass.

The Committee’s terms of reference are set out at:

www.unilever.com/corporategovernance

Meetings are held quarterly and ad hoc as required – four were held in
2021. The Committee Chair is responsible for reporting the findings from
the meetings to the Board, thus ensuring that the Board can fulfil its
oversight responsibilities.

Following the Committee’s terms of reference and Unilever’s principal
risks, in 2021 the Committee’s agenda covered the new sustainability
commitments of the Unilever Compass strategy and in addition the Code
and third-party compliance, safety, plastic packaging, setting the new
Sustainability Progress Index (SPI) KPIs aligned with the Unilever Compass,
corporate reputation and litigation.

During the year, the Committee also addressed a range of other strategic
and current issues, including occupational health and human rights. How
Unilever handled the Covid-19 pandemic remained topical.

How the Committee has discharged its
responsibilities

In 2021, the Committee's principal activities were as follows:

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, legal and
regulatory risk to Unilever (see page 50).

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 discusses any trends
arising from these investigations.

The Committee also considers litigation and regulatory matters which
may have a reputational impact and reviews a summary of any significant
developments at each meeting. These matters include environmental
issues, anti-bribery and corruption and competition law compliance.

In 2021, human rights was a focus for the Committee's Code oversight.
The Committee was updated on and discussed a summary of the
legislation enacted and/or proposed in the UK, EU and US in relation to
supply chain transparency and mandatory due diligence. This deep dive
included the deforestation related proposals in all three jurisdictions,
and the German and broader EU proposals on Corporate Sustainability
Reporting, mandatory human rights and environmental due diligence
and governance risks. Although it was acknowledged that much of the
proposed legislation was still to be passed and uncertainties existed in the
final requirements and related implications, it was concluded that Unilever
is well placed to meet any new requirements through its commitment and
work previously under Unilever's Sustainable Living Plan and currently,
the Compass. A number of actions are underway to put Unilever in a
position to comply with any new requirements including the establishment
of a cross-functional workshop to define the implementation roadmap.
The Committee also reviewed Unilever's Modern Slavery Statement and
Human Rights Report, before the Statement was put to the Board and
published.

It also reviewed the EU’s Whistleblower Protection Directive, concluding
that the impact on the company would be minimal given Unilever’s
already comprehensive standards in this area.

Principles and standards for third parties

Extending Unilever’s values to third parties is essential if Unilever is
to generate responsible growth and a positive social impact on the
industry.

A lack of third-party compliance can pose a significant risk to the business,
(see principal risks, page 50), so the Committee examines Unilever’s
compliance programmes in detail to ensure risks are minimised.

At each meeting, 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 and respect for human rights and core labour principles. In 2021,
the Committee scrutinised Unilever’s roll-out of the RSP First programme
that ensures that no new supplier can be onboarded to Unilever’s systems
without first formally agreeing to the requirements of the RSP.

Safety and security

The need to keep people safe remained a priority in the face of Covid-19.
Due to the pandemic, in 2021 mental health continued as a focus for the
Committee’s oversight of employee wellbeing.

Unilever Annual Report and Accounts 202181

The Committee also reviewed the impact on Unilever of the decision made
by the independent Board of Ben & Jerry’s about sales in the West Bank,
which attracted media and political attention. The Committee noted that
Unilever has a strong and long-standing commitment to its business in
Israel, and has been clear that it does not support the Boycott, Divestment,
Sanctions (BDS) movement.

Performance Share Plan

Unilever’s Reward Framework includes the Performance Share Plan (PSP),
a long-term incentive plan that is linked to financial performance, as well
as performance against sustainability targets, defined in the Sustainability
Progress Index (SPI).

SPI was based on a selection of key performance indicators (KPIs) from our
Unilever Sustainable Living Plan (USLP) which ran until 2020, reflected in
the PSP up to and including the 2021 award.

In 2021, Unilever introduced the Compass, which includes a series of
sustainability commitments for the business, and as such, we have
updated the SPI incentive performance measure to reflect the Compass
from the 2022 PSP award onwards.

The role of the Committee in 2021 with regards to SPI was therefore two-
fold: 1) assessment of Unilever’s 2020 SPI performance for 2021 reward,
and 2) agreement of the new SPI targets based on the Unilever Compass.

To come to a view on Unilever’s 2020 performance on its sustainability
commitments, the Corporate Responsibility Committee and the
Compensation Committee jointly evaluate performance against the
SPI targets.

The SPI is a two-fold assessment that captures quantitative and qualitative
elements. Firstly, the Committee considered the 2020 targets reported in
the 2020 Annual Report and Accounts alongside performance evidenced
in a number of sustainability ratings and indices. The second part of the
assessment takes into account the overall sustainability performance
across the strategic actions of the Unilever Compass strategy.

Following an in-depth discussion of the SPI, the Corporate Responsibility
Committee agreed a performance rating which was endorsed by the
Compensation Committee. This joint assessment forms part of the
Compensation Committee’s overall recommendation on the SPI outcome
(see pages 91 to 93 for the SPI outcome for the 2021 PSP award).

In addition to the performance assessment, the Committee, also jointly
with the Compensation Committee, agreed a new set of KPI, which reflect
the three overarching strategic actions under the Unilever Compass: to
improve the health of the planet; improve people’s health, confidence and
wellbeing; and to contribute to a fairer, more socially inclusive world.

These three strategic actions are underpinned by eight key pillars, all
of which are represented in new SPI KPIs. Each of the eight equally
weighted SPI KPIs has specific annual KPIs that are fixed for the next three
years. These enable the meaningful evaluation of progress against the
overarching mid- to long-term Unilever Compass target.

See page 88 for the SPI KPIs for the 2022 PSP award as agreed between the
Corporate Responsibility Committee and the Compensation Committee.

Evaluation of the Corporate Responsibility
Committee

As part of the internal Board evaluation carried out in 2021, the Board
evaluated the performance of the Committee. The Committee also carried
out an assessment of its own performance in 2021 and concluded that it
was working effectively.

Strive Masiyiwa
Chair of the Corporate Responsibility Committee

Youngme Moon

Feike Sijbesma

Unilever’s approach centred on ensuring business continuity and ensuring
people were physically equipped and felt psychologically secure in the
workplace or when working from home. Unilever has long-standing
employee assistance programmes, which are accessible to all employees.

In 2021, programmes were expanded to include tools to help line
managers to support team wellbeing, dedicated support for families
of bereaved employees and the continuation of the Mental Health
Champions Network. The Committee commended the newly created
dashboard tracking Unilever’s occupational health ambitions and the
level of the company’s attention on employee health and wellbeing.

The Committee has continued to receive an ongoing update of Unilever’s
Covid preparations and actions across its business and supply chain.

The Committee continued to review Unilever's safety standards and
Unilever continues to protect people from accidents. Sadly three
contractors and four employees lost their lives (see page 18), but the Total
Recordable Frequency Rate (TRFR) improved.

The Committee also examined Unilever’s approach to security. As a global
business, Unilever operates in many countries, some of which suffer from
a weak rule of law or from growing social and political unrest. Similarly,
cyber threats continue to expand. The business continues to upgrade its
resilience programmes to protect its people and assets.

Improving the health of the planet

The effects of climate change and nature loss are becoming ever more
apparent and increasingly urgent. Following the launch of Unilever’s
new commitments on climate and nature in 2020 (see page 10), in May
2021 Unilever put its Climate Transition Action Plan (CTAP, see pages 51
to 56) before shareholders and sought a non-binding advisory vote on
our ambitious emissions reduction targets and our plans to reach them.
The Corporate Responsibility Committee studied the plan ahead of its
publication and presentation to the Board. The Committee reviewed and
supported the company’s CTAP which the Committee considered reflects
Unilever's leadership on sustainability matters.

Packaging waste and single-use plastic continued as high priorities
for the business and society in 2021. Unilever’s goals cover using more
recycled and less virgin plastic, improving the recyclability of plastic and
an industry-leading commitment to an absolute reduction in plastic (see
page 29).

Members noted the progress made on Unilever’s plastic goals with more
recycled material, a step-up in plastic collection and processing, an
increase in the proportion of the portfolio that is now technically recyclable
and a framework for absolute plastic reduction projects and innovation.
However, it was noted that the reduction of virgin plastics remains
Unilever’s biggest challenge, the CRC urged Unilever to continue its efforts.

Contributing to a fairer and more socially
inclusive world

In January 2021, Unilever launched new social goals to complement its
environmental goals, recognising the interdependence of people and
planet. The new goals set out to contribute to a fairer and more socially
inclusive world which leaves no one behind.

Alongside its new social goals, Unilever has strengthened its focus on
equity, diversity and inclusion in gender, race, people with disabilities
and LGBTQI+ across the company’s value chain (see pages 19 and 28). In
2021, the Committee in particular reviewed and welcomed the progress
made with regards to improving equity, diversity and inclusion strategies
in Unilever’s own operations, such as workforce representation, inclusive
recruitment and career progression policies. The Committee counselled
Unilever to maintain its data-driven monitoring on the progress made.

Protecting and enhancing Unilever’s reputation

Ensuring its good reputation is vital to Unilever’s ongoing success. As
activism rises, commentary on issues such as deforestation for palm oil or
animal testing can travel faster and wider than ever before, while social
media continues to amplify and accelerate issues. In 2021, the Committee
considered the impact of Unilever’s brands engaging with activist citizens
and consumers on these topics.

As the Committee charged with overseeing Unilever’s reputation, members
scrutinised Unilever’s processes for managing issues. These processes are
defined within a clear governance framework and have been enhanced
with more sophisticated forecasting techniques, and tracking and
measurement tools, to gauge likely future issues and extended training.

Unilever Annual Report and Accounts 2021GOVERNANCE REPORT82

Report of the Nominating and
Corporate Governance Committee

Committee members and attendance

Nils Andersen Chair

Laura Cha

Andrea Jung

Ruby Lu
(member since 1 November 2021)

Feike Sijbesma

Attendance

4/4

1/1

4/4

This table shows the membership of the Committee together with
their attendance at meetings during 2021. Attendance is expressed
as the number of meetings attended out of the number eligible to
be attended.

The Committee is comprised of three Non-Executive Directors and
the Chair. In anticipation of Laura Cha’s retirement at the 2022 AGM,
Ruby Lu joined the Committee upon her appointment on 1 November
2021. The Group Secretary acts as secretary to the Committee. Other
attendees at Committee meetings in 2021 were the Chief Executive
Officer and the Chief HR Officer.

Role of the Committee

The Nominating and Corporate Governance Committee is primarily
responsible for periodically assessing the structure, size and
composition of the Board; evaluating the balance of skills, experience,
independence, diversity and knowledge on the Board; ongoing
succession planning (including the development of a diverse pipeline
for succession); drawing up selection criteria and appointment
procedures for Directors; reviewing the feedback in respect of the
role and functioning of the Board Committees arising from Board
and Board Committee evaluations; and periodically reviewing and
assessing Unilever’s practices and procedures in relation to workforce
engagement. It also has oversight of all matters relating to corporate
governance and brings any issues in this respect to the attention of
the Board.

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 2022.

In 2021 the Committee met four times. In November, the Committee
considered the results of the Committee’s annual self-evaluation for
2021 and its priorities for the year and used these to help create an
annual plan for meetings for 2022.

Appointment and reappointment of Directors
and ULE

Reappointment of Directors

All Directors (unless they are retiring) are nominated by the Board
for re-election at the AGM each year on the recommendation of the
Committee who, in deciding whether to recommend nomination
of a Director, take into consideration the outcomes of the Chair's
discussions with each Director on individual performance, the
evaluation of the Board 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 Board 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:

www.unilever.com/committees

On 18 February 2021, Vittorio Colao stepped down as a Director. The
Committee proposed the reappointment of all other Directors and the
Directors were appointed by shareholders by a simple majority vote at
the 2021 AGM, bringing the then number of Non-Executive Directors
from ten to nine.

In anticipation of the retirement of both Laura Cha and John Rishton at
the 2022 AGM following the completion of their nine-year tenure, Adrian
Hennah and Ruby Lu were appointed to the Board on 1 November
2021. The Committee also recommends to the Board candidates for
election as Chair and Senior Independent Director. Following the 2021
AGM, Youngme Moon decided to step down from her role as Senior
Independent Director due to other commitments. Andrea Jung was
appointed by the Board to succeed Youngme as Senior Independent
Director, and Youngme continues to serve as a Non-Executive Director.

Following Vittorio Colao stepping down as a Director, Andrea Jung
replaced Vittorio Colao as Chair of the Compensation Committee. All
other Committee Chairs remained in place in 2021, with John Rishton
as Chair of the Audit Committee, Strive Masiyiwa as Chair of the
Corporate Responsibility Committee, and Nils Andersen as Chair of the
Nominating and Corporate Governance Committee.

Succession planning and Board changes

In consultation with the Committee, the Board reviews the adequacy
and effectiveness of succession planning processes and the actual
succession planning at Board level, including ensuring that succession
plans are based on merit and objective criteria, and that they
promote diversity.

When recruiting, the Committee will take into account the profile of
Unilever’s Board 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 Board should

Unilever Annual Report and Accounts 202183

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 Board 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 Board is to have a variety of
nationality, race, gender, ethnicity, social background and relevant
skills and expertise. It is important that the Board has sufficient global
experience and outlook, and financial literacy. As discussed later in this
report, Unilever currently has a diverse Board 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 73, composition and capabilities are in line
with our Board profile described above.

At each Committee meeting there is a standing agenda item to review
the succession plan for the Board and discuss short and long-term
action plans on succession. Through these discussions the Committee
reflects on whether the plans need to be updated or whether new
requirements for potential candidates need to be implemented,
ensuring we continue to adapt our succession planning to the skills
and experience required on the Board. Reflecting its role in respect
of board succession planning, early in 2021, the Committee’s priority
was to identify new non-executive directors to succeed two of the
longer-serving members of the board – Laura Cha and John Rishton.
Candidates were sought in line with the skills, experience and diversity
requirements of the Board, with particular focus on the technical and
professional skills required to take on certain committee responsibilities
and who would also enhance the strategic discussion in the boardroom.
Due to the successful previous experience with Egon Zehnder and
Russell Reynolds, both agencies were engaged to support the process
and identify candidates, with the search process leading to the
appointments of Adrian Hennah and Ruby Lu during 2021.

ULE succession planning and appointment

In consultation with the Committee, the Board reviews the adequacy
and effectiveness of succession planning processes and the actual
succession planning at ULE level, including ensuring that succession
plans are based on merit and objective criteria, and that they
promote diversity.

The Board believes that the composition and quality of the Board
should be in keeping with the size and geographical spread of Unilever,
its portfolio, culture and status as a listed company. A diverse Board
with a range of views enhances decision-making which is beneficial
to the company’s long-term success and in the interests of Unilever’s
stakeholders. Thus, the Board believes that Unilever Directors must
be selected using objective and merit-based criteria, including on the
basis of wide-ranging experience, backgrounds, skills, knowledge
and insight with a continuing emphasis on diversity of its members.

In 2021, the Committee also reviewed and considered relevant
recommendations on diversity and remains pleased that 55% of our
Non-Executive Directors and 46% of all Directors were women and that
eight nationalities were represented on the Board. As regards ethnicity,
in 2021 eight directors identified themselves as White, four Directors
identified themselves as Asian and one Director identified himself as
Black. Further details on our approach to diversity and inclusion as well
as gender balance of our workforce can be found on pages 19 and 64.

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 2021, new EU proposals
for a Corporate Sustainability Reporting Directive and a UK White paper
on audit and corporate governance reform, alongside stakeholder
interests, corporate reporting and overboarding were discussed by
the Committee.

Evaluation of the Nominating and Corporate
Governance Committee

As part of the Board evaluation carried out in 2021, the Board evaluated
the performance of the Committee. The Committee also carried out
an assessment of its own composition and performance in 2021. The
Committee members concluded that the Committee is performing
effectively.

Nils Andersen
Chair of the Nominating and Corporate Governance Committee

Board Diversity Policy

Unilever has long understood the importance of diversity and inclusion
within our workforce because of the wide range of consumers and other
stakeholders we connect with globally. This goes right through our
organisation, starting with the Board.

Unilever’s Board Diversity Policy, which is reviewed by the Committee
each year, is reflected on our website at:

www.unilever.com/boardsofunilever

Laura Cha

Andrea Jung

Ruby Lu

Feike Sijbesma

Unilever Annual Report and Accounts 2021GOVERNANCE REPORT84

Directors' Remuneration Report

Committee members and attendance

Andrea Jung
Chair (Chair from 18 February 2021)

Vittorio Colao
(Member and Chair until 18 February 2021)

Nils Andersen

Laura Cha

Ruby Lu
(Member from 1 November 2021)

Attendance

5/5

1/1

5/5

1/1

This table shows the membership of the Compensation Committee
(Committee) together with their attendance at meetings during 2021.
Attendance is expressed as the number of meetings attended out of
the number each member was eligible to attend.

Letter from the Chair

Dear shareholders,

As the Committee Chair, I am pleased to present Unilever’s Directors’
Remuneration Report (DRR) 2021. In the sections below, I set out
the Committee’s activities in 2021, including Unilever’s business
performance in 2021 and how it links to key remuneration outcomes
for the year. I also reflect on the feedback we received on our new
Directors’ Remuneration Policy, which was approved at the May 2021
AGM (referred to as the Remuneration Policy).

Business performance and remuneration

2021 was a year of volatility with continued impact from the Covid-19
pandemic and unprecedented global commodity inflation driven by
supply constraints and demand spikes.

In this context, we delivered Underlying Sales Growth (USG) of +4.5%,
above our par target of 3.5%, driven by strong pricing of +2.9% and
volume growth of 1.6%. Our growth was competitive with 53% of our
business gaining market share on a Moving Annual Total basis.

The severe mismatch between supply and demand resulted in a once in
a two-decade spike in commodity and logistics cost inflation. Prices of
core ingredients have risen significantly versus early 2020 levels; Brent
Crude Oil +60%, Soyabean Oil +90% and Palm Oil +130%. We accelerated
pricing action and stepped up savings, which helped to offset much
of the inflation challenge. We delivered Underlying Operating Margin
(UOM) of 18.4%; -10bps versus prior year, below the threshold range of
-5bps. Overall, Underlying Operating Profit grew 2.9%.

Free Cash Flow (FCF) (excluding taxes paid on disposals) delivery
remained strong at €6.5 billion ahead of our par target of €6.3 billion.

Underlying Earnings per Share (EPS) grew by +5.5% at current rates
and included +0.9% from the €3 billion share buy-back programme
announced in April 2021.

Return on Invested Capital (ROIC) was 17.2%, being sustained in the
mid to high teens, and Unilever's sustainability performance measure
for the long-term incentive plan, the Sustainability Progress Index (SPI),
achieved a 125% outcome, as detailed on page 92.

Incentive outcomes and wider stakeholder
considerations

2021 Annual Bonus
After careful consideration, the Committee decided neither to change
the targets in response to volatile business conditions nor to exercise
discretion on the formulaic outcome, which will set the global bonus
pool for all eligible Unilever employees.

Accordingly, the Committee confirmed a bonus of 81% of target
opportunity for both the CEO Alan Jope (resulting in a bonus of 122%
of fixed pay against a target of 150%), and the CFO Graeme Pitkethly
(resulting in a bonus of 97% of fixed pay against a target of 120%), as
detailed in the chart on page 90.

Under the Remuneration Policy, 50% of the net bonus award will be
deferred in shares for three years.

2018-2021 Management Co-Investment Plan (MCIP)
Similarly, no discretion was applied to the MCIP vesting based on
performance in 2021.

Accordingly, the Committee confirmed the formulaic outcome for the
2018-2021 MCIP was 87% of target, which will be applied to all eligible
Unilever employees. This outcome is detailed in the chart on page 91,
and corresponds to a vesting of 44% of the maximum of 200% for our
two Executive Directors.
Wider stakeholder considerations
When considering the annual bonus and MCIP outcomes, the
Committee carefully took into account the experiences of our wider
stakeholders in order to ensure that outcomes were aligned.

In particular, our decision not to amend targets mid-year in light of
significant inflationary conditions was taken to ensure that employees
and Executive Directors are treated commensurately with the interests
of our shareholders. The final outcomes of 81% of target for annual
bonus and 87% of target for MCIP are below our expectations. However,
the Committee believes these outcomes represent the performance
delivered to shareholders in challenging trading circumstances.

Our Remuneration Policy for 2021

We are delighted the Remuneration Policy was approved at the
May 2021 AGM with 93.51% votes in favour, which is available on
our website.

As detailed in full in last year’s DRR, the key changes to the
Remuneration Policy for the Executive Directors were to:
▪

replace the former long-term incentive plan, MCIP, with a new
Performance Share Plan (PSP) that is entirely separate from the
annual bonus plan;
replace the voluntary investment of bonus through MCIP with a
mandatory deferral of 50% of the net annual bonus in shares for
three years;

▪

▪ set performance measures for the PSP that are strategically aligned

▪

with the business; and
reduce the long-term performance period for the PSP from four
to three years while maintaining a five-year period from award to
release by increasing the retention period from one year to two years.

The Remuneration Policy is operating as intended and, following the
high level of support, no material changes are proposed in relation to
how we implement the Remuneration Policy in 2022.

Remuneration arrangements are determined throughout Unilever
based on the same principles as for the Board, as set out in the
Remuneration Policy.

Unilever Annual Report and Accounts 202185

Sustainability Progress Index
▪ SPI has been an established feature of our long-term incentive (LTI)

scheme since it was introduced in 2017, in recognition of our vision to
be the global leader in sustainable business and the importance of
sustainability KPIs in driving business performance. SPI was based on
a selection of KPIs from our Unilever Sustainable Living Plan (USLP)
which ran until 2020, reflected in the PSP up to and including the
2021 award.
In 2021, Unilever introduced the Compass, which includes a series of
new sustainability commitments for the business, and as such, we
have updated the SPI incentive performance measure to reflect the
Compass from the 2022 PSP award onwards.

▪

▪ Within the Unilever Compass strategy, we have three overarching
strategic actions: to improve the health of the planet; to improve
people’s health and wellbeing; and to contribute to a fairer, more
socially inclusive world.

▪ These three strategic actions are underpinned by eight key pillars, all
of which are represented in new SPI KPIs. Each of the eight KPIs are
equally weighted and have specific annual KPIs that are fixed for the
next three years. These enable the meaningful evaluation of progress
against the overarching mid- to long-term Unilever Compass KPI.
▪ The eight KPIs are agreed between the Unilever Board’s Corporate
Responsibility Committee (CRC) and the Committee. The CRC and
the Committee work together to review a detailed quantitative and
qualitative update on performance against each KPI. The CRC and
the Committee also look at the overall sustainability performance
across the strategic actions of the Unilever Compass strategy. This
information together is used to make a recommendation on the
performance outcome for each year in the range of 0–200% for the
Committee to consider.

▪ Because performance against the SPI incentive performance measure

is calculated after the performance year has ended, the previous
year’s SPI applies to the performance year for LTI. For example, the
2020 SPI KPIs (based on USLP) were used for the 2021 performance
year for LTI whereas the 2021 SPI KPIs (based on the Unilever Compass
strategy) will be used for the 2022 performance year for LTI.

▪ The SPI KPIs for the 2021 PSP award are set out on page 92 and the SPI

KPIs for the 2022 PSP award are set out on page 88.

See the remuneration topics section of our website for a video
explanation on SPI.

Non-Executive Director fees

There was no increase to Non-Executive Director fees in 2021. Following
a review in 2021, the Committee decided to keep Non-Executive Director
fees the same for 2022. The Committee will review the fees again
in 2022.

Executive Director fixed pay increases

2021 increases
As set out in last year’s DRR, we did not conduct a fixed pay review
for the Executive Directors in the first half of 2021, and we planned
to undertake such a review in the second half of 2021. This review
was conducted taking into account business performance, external
circumstances and salary increases awarded to the wider workforce.

The Committee conducted a review of the CEO and CFO packages
against external market data* in the second half of 2021, as planned,
which shows the CEO is between lower quartile and median on a fixed
pay and target total compensation basis and the CFO is between
median and upper quartile on fixed pay and just below median on a
target total compensation basis.

The Committee approved a 2021 fixed pay increase of 3.5% for both
the CEO and the CFO, effective from 1 July 2021. This is in line with the
average increase awarded to the wider Unilever workforce in 2020.

Given the fixed pay increases were delayed and took place mid-year,
they also reduced the incentives for 2021 compared to if the increases
were awarded at the start of the year: PSP grants in 2021 were based on
previous salary levels; and annual bonus opportunities for 2021 were
based on the actual salary received during the year.

2022 increases
There will be no fixed pay review for the Executive Directors in the
first half of 2022. Such a review will take place in the second half of
2022, with any potential changes based on performance, external
circumstances and with any increase below the level applied for the
wider workforce.

In line with the Remuneration Policy and subject to the performance
and workforce alignment, the Committee will, over time, continue to
review the CEO’s fixed pay positioning and progress towards the market
median benchmark.

*Our benchmarking peer group consists of other global companies of a similar
financial size and complexity to Unilever and is set out in full in the Remuneration
Policy.

Engaging with shareholders

In 2020, the Committee engaged extensively with shareholders and
major advisory bodies (including the Investment Association, ISS, Glass
Lewis, Hermes and Eumedion) on the Remuneration Policy. In the run-
up to the 2021 AGM, we had further consultation with some of these
shareholders and advisory bodies on the Remuneration Policy.

On behalf of the Committee, I spoke with investors and advisory
bodies in the autumn of 2021 on how the Remuneration Policy landed
in the organisation and wider investor community. Through this
engagement, shareholders and major advisory bodies requested to
better understand the performance measure on competitiveness, which
was introduced for 2021, and how SPI targets are calculated. We have
shared additional information and explanation with shareholders,
advisory bodies and on our website, including:

Competitiveness: % Business Winning Market Share (% Business
Winning)
▪ Competitiveness, measured as % Business Winning, was introduced
as a new measure for the PSP. Growing competitively ahead of our
markets is a key strategic driver of long-term growth.

▪ % Business Winning incentivises all country/category cells (e.g. UK

deodorant) to win share, not just the big cells, thus supporting broad-
based competitive growth.

▪ There is an end-to-end governance framework in place consisting
of a cross-function steering committee and regular updates to,
and evaluation by, the Committee.

See the remuneration topics section of our website under investors,
corporate governance and other governance information for more
on Business Winning Market Share.

Unilever Annual Report and Accounts 2021GOVERNANCE REPORT86

Directors’ Remuneration Report continued

Engaging with employees

As previously announced, the Board decided to share the responsibility
for workforce engagement among all Non-Executive Directors to ensure
that all Directors have a collective responsibility for bringing employee
views into relevant Board discussion. We continued these engagements
in 2021, see page 69 for a summary of the discussions that took place.

In July 2021, I attended a virtual town hall meeting open to all
employees globally. This was an opportunity for employees to ask me
questions, including in relation to Unilever’s approach to remuneration.
I was able to share that the Board considers topics on pay, such as
living wage and pay equity, because the Board understands the issue
of income equality, how it is expressed in society and what corporations
can do to address it.

We sought feedback from employees globally who were eligible for the
new PSP and 71% of respondents answered positively that PSP offers a
more valuable reward for them personally. In addition, 85% understood
how their role can impact the long-term business performance
measures that determine final PSP pay-out. Overall, the Committee is
pleased to receive such positive feedback.

One of the Non-Executive Directors attended an engagement session
with employees on the subject of compensation and benefits.
Employees shared feedback on progression within pay bands,
differentiation of annual bonus, benefits of PSP over MCIP and
competitiveness of Unilever’s pension schemes.

See the Board and management committees section of our website
under investors and corporate governance for a copy of Unilever's
workforce engagement policy introduced in 2021.

Implementation report

The annual report on remuneration in this report describes 2021
remuneration in detail as well as the planned implementation of
the Remuneration Policy in 2022.

On behalf of the Committee and the entire Board, I thank all
shareholders and their representatives for their constructive
engagement in 2021. Shareholders will have an advisory vote
on the DRR at the 2022 AGM.

Andrea Jung
Chair of the Compensation Committee

Unilever Annual Report and Accounts 202187

Annual report on remuneration

This section sets out how the Remuneration Policy (which was approved by shareholders at the May 2021 AGM and is available on our website)
was implemented in 2021 and how it will be implemented in 2022.

See the remuneration topics section of our website for a copy of the Remuneration Policy.

Implementation of the Remuneration Policy for Executive Directors

The Remuneration Policy was implemented with effect from the May 2021 AGM as set out below.

Elements of remuneration
Fixed Pay

Purpose and link to strategy

Supports the recruitment and retention of Executive Directors of the calibre required to implement our strategy.
Reflects the individual’s skills, experience, performance and role within the Group. Provides a simple competitive
alternative to the separate provision of salary, fixed allowance and pension.

At a glance

Details of the rationale for our Executive Directors’ fixed pay amounts can be found on page 85.

Implementation in 2021

Planned for 2022

Annual Bonus

Purpose and link to strategy

At a glance

Effective from 1 January 2021:
▪ CEO: €1,508,000
▪ CFO: €1,135,960
Effective from 1 January 2022:
▪ CEO: €1,560,780 (no change)
▪ CFO: €1,175,719 (no change)

Effective from 1 July 2021:
▪ CEO: €1,560,780 (3.5% increase)
▪ CFO: €1,175,719 (3.5% increase)

Incentivises year-on-year delivery of rigorous short-term financial, strategic and operational objectives selected to
support our annual business strategy and the ongoing enhancement of shareholder value.

In 2021, a new requirement was introduced to defer 50% of the net annual bonus into shares or share awards to
link to long-term performance.

▪ Target annual bonus of 150% of fixed pay for the CEO and 120% of fixed pay for the CFO.
▪ Maximum annual bonus is 225% of fixed pay for the CEO and 180% for the CFO.
▪ Business performance multiplier of between 0% and 150% based on achievement against business targets over

the year.

▪ Performance target ranges are considered commercially sensitive and will be disclosed in full with the

corresponding performance outcomes retrospectively following the end of the relevant performance year.

Implementation in 2021

▪ Requirement to defer 50% net annual bonus into shares, as set out in the Remuneration Policy.
▪ Subject to ultimate remedy/malus and claw-back provisions, as set out in the Remuneration Policy.
Implemented in line with the Remuneration Policy:
▪ Underlying Sales Growth: 1/3
▪ Underlying Operating Margin Improvement: 1/3
▪ Free Cash Flow: 1/3
The performance measures for 2022 will remain the same. However, USG will be up-weighted to 50% to reflect
Unilever's focus on delivering growth as a key priority. It is the Committee's intention to keep these weightings
unchanged for the duration of the Remuneration Policy.
▪ Underlying Sales Growth: 50%
▪ Underlying Operating Margin Improvement: 25%
▪ Free Cash Flow: 25%
Long-Term Incentive: Performance Share Plan

Planned for 2022

Purpose and link to strategy

From 2021, the PSP replaced the MCIP as the sole LTI plan. The PSP aligns senior management’s interests with
shareholders by focusing on the sustained delivery of high-performance results over the long-term.

At a glance

▪ As approved by shareholders at the May 2021 AGM, the new PSP grants rights to receive free shares (awards) on
vesting. Awards normally vest after three years, to the extent performance conditions are achieved. The first PSP
award was made on 7 May 2021, vesting on 15 February 2024 (with a requirement to hold vested shares for a
further two-year retention period).

▪ The normal maximum award for the CEO is 400% of fixed pay and for the CFO is 320% of fixed pay. At target, 50%

of maximum vests, equating to 200% and 160% of fixed pay respectively.

▪ Upon vesting, Executive Directors will have a further two-year retention period to ensure there is a five-year

duration between the grant of the award and release of the shares.

▪ The PSP is subject to ultimate remedy, discretion, malus and claw-back provisions, as set out in the

Remuneration Policy.

Implementation in 2021

The PSP was implemented in line with the Remuneration Policy. Details of the performance measures for the 2021
PSP awards can be found on page 93.

Unilever Annual Report and Accounts 2021GOVERNANCE REPORT88

Directors’ Remuneration Report continued

Elements of remuneration continued
Planned for 2022

As detailed in the Remuneration Policy, the performance conditions for PSP awards are assessed over a three-
year period with a further two-year retention period. The performance conditions and target ranges for 2022
awards under the PSP will be as follows:

PSP 2022 – 2024 awards

Competitiveness:
% Business Winning

Cumulative Free Cash Flow (€bn)
(Current rates ex cash tax on
disposal)

Return On Invested Capital
(Exit year %)

Sustainability Progress Index (€bn)
(Committee assessment of SPI
progress)

Weighting

Threshold

Max

25%

45%

€16.0bn

15%

60%

200%

€22.0bn

200%

19%

200%

Performance at threshold results in nil PSP awards vesting, target performance results in an award equal to
200% of fixed pay (at time of award) for the CEO and 160% for the CFO, up to a maximum of 400% for the CEO
and 320% for the CFO, with straight-line vesting between threshold and maximum. A retention period of two
years applies from vesting.

PSP awards (based on target performance) to be made on 11 March 2022 as follows:
▪ CEO 200% Fixed Pay: €3,121,560
▪ CFO 160% Fixed Pay: €1,881,150

Cumulative FCF from operating activities in current currency ensures sufficient cash is available to fund a range
of strategic capital allocation choices.

ROIC measures the return generated on capital invested by the Group and 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. The target range of a threshold of 15% and maximum of 19% expresses our commitment to deliver
ROIC at a level of mid to high teens, whilst continuing to reshape our portfolio through acquisitions and
disposals.

Competitiveness measured by % Business Winning was introduced as a new metric for the PSP in 2021 and is
explained in more detail in the Chair letter on page 85. % Business Winning will be assessed each year as the
aggregate turnover of the portfolio components (country/category cells) gaining value market share as a %
of the total turnover measured by market data. As such, it assesses what percentage of our revenue is being
generated in areas where we are gaining market share. The outcome for the 2022-2024 PSP is the average of the
three years % Business Winning performance. With intense competition and changing shopper trends, winning
share in each portfolio or geography segment presents a challenge for all players; repeating these wins over
successive years is even more demanding. At consolidated Group level delivering consistently in the range of
50% Business Winning will enable us to grow with our markets, delivering above 50% Business Winning over
successive years supports our objective of growing ahead of our markets. Keeping this in mind, the Committee
believes that a stretch goal of 60% and threshold performance of 45% resulting in a zero pay out for this
performance measure to be appropriate.

SPI KPI setting under the Unilever Compass

SPI is explained in the Committee Chair’s letter on page 85. The eight SPI KPIs agreed between the CRC and
Committee for 2022 PSP awards are as follows:
▪ Climate action: The total number of suppliers with whom we have signed agreements to develop renewable

or recycled carbon surfactants (surface active agent).

▪ Protect and regenerate nature: % of volume of supply of palm oil, soy, paper and board, cocoa and tea

purchased and/or contracted from low-risk sources.

▪ Waste-free world: Total tonnes of recycled plastic material content ('recycled plastic') used in our plastic

packaging portfolio as a percentage of total tonnes of plastic packaging used in products sold.

▪ Health and wellbeing: Number of people reached by brand communications and initiatives that help

improve health and wellbeing, and help advance equity and inclusion.

▪ Positive nutrition: Total sales (euros) of Unilever’s products containing plant-based meat and dairy

alternatives.

▪ Raise living standards: Value of contracts including the living wage requirement.
▪ Equity, diversity and inclusion: Monetary value (euros) of all invoices received from Tier 1 suppliers that
are either verified as a diverse business by an approved certification body or have self-declared as
a diverse business.

▪ Future of work: % of employees with a future-fit skills set.

In addition to the three elements mentioned above, our Executive Directors are provided with non-monetary benefits. These include medical
insurance cover, actual tax return preparation costs and provision of death-in-service benefits and administration.

Unilever Annual Report and Accounts 202189

Ultimate remedy/malus and claw-back

Grants under the PSP and the legacy MCIP are subject to ultimate remedy and discretion as explained in the Remuneration Policy. Malus and claw-
back apply to all performance-related payments as explained in the Remuneration Policy.

In 2021, the Committee did not reclaim or claw-back any of the value of awards of performance-related payments to current or former
Executive Directors.

Single figure of remuneration and implementation of the Remuneration Policy in 2021
for Executive Directors (Audited)

The table below shows a single figure of remuneration for each of our Executive Directors for the years 2020 and 2021.

(A) Fixed pay(a)

Total fixed pay

(B) Other benefits

Fixed pay & benefits subtotal

LTI: MCIP Match Shares

LTI: GSIP Performance Shares(c)

Variable Remuneration subtotal

(D) LTI subtotal

Total Remuneration (A+B+C+D)

Alan Jope CEO (€’000)

Graeme Pitkethly CFO (€’000)

Proportion
of Fixed and
Variable
Rem

32.9%

66.9%

2021

1,534

1,610

1,864

1,416

n/a

3,280

1,416

4,890

Proportion
of Fixed and
Variable
Rem

45.4%

54.6%

2020

1,508

1,564

1,086

797

n/a

1,883

797

3,447

Proportion
of Fixed and
Variable
Rem

2020

1,136

35.0%

1,174

39.6%

65.0%

654

463

670

1,787

1,133

2,962

60.3%

2021

1,156

1,203

1,123

1,114

n/a

2,237

1,114

3,440

(a) Fixed pay increased by 3.5% to €1,560,780 for CEO and €1,175,719 for CFO from 1 July 2021 and pro-rated for annual bonus i.e. the maximum amount of 2021 bonus

increased by 1.75%.
In line with the Remuneration Policy, 50% of the 2021 net annual bonus will be deferred into Unilever shares that must be held for a period of three years.

(b)
(c) Alan Jope received his last GSIP award in 2017 that vested on 13 February 2020 as disclosed in the 2019 DRR. Graeme Pitkethly received his last GSIP award in 2018 that

vested on 17 February 2021, as disclosed in the 2020 DRR.

Where relevant, amounts for 2021 have been translated into euros using the average exchange rate over 2021 (€1 = £0.8605), excluding amounts
in respect of MCIP, which have been translated into euros using the exchange rates at the vesting date at 16 February 2022 (€1 = £0.8379 and
€1 = $1.1354).

Amounts for 2020 have been translated into euros using the average exchange rate over 2020 (€1 = £0.8877), excluding amounts in respect of MCIP
and GSIP, which have been translated into euros using the exchange rates at the vesting date on 16 February 2021 (€1 = £0.8711 and €1 = $1.2136)
for MCIP and 17 February 2021 (€1 = £0.8703) for GSIP.

We do not grant our Executive Directors any personal loans or guarantees.

Elements of single figure remuneration 2021

(A) Fixed pay (Audited)

Fixed pay set in euros and paid in 2021: CEO – €1,534,390, CFO – €1,155,840.

(B) Other benefits (Audited)

For 2021 this comprises:

Medical insurance cover and actual tax return preparation costs

Provision of death-in-service benefits and administration

Total

(a) The numbers in this table are translated where necessary using the average exchange rate over 2021 of €1 = £0.8605.

Alan Jope
CEO(€)(a)

Graeme Pitkethly
CFO(€)(a)

2021

59,522

16,000

75,522

2021

34,983

12,000

46,983

Unilever Annual Report and Accounts 2021GOVERNANCE REPORT90

Directors’ Remuneration Report continued

Annual bonus 2021 actual outcomes: CEO – €1,864,284 (which is 54% of maximum, 122% of fixed pay). CFO – €1,123,476 (which is 54% of maximum,
97% of fixed pay).

Alan Jope

Graeme Pitkethly

Annual bonus measures are not impacted by share price growth.

50% of the net annual bonus earned is deferred into shares (€494,035 for Alan Jope and €297,721 for Graeme Pitkethly). Shares are deferred for
three years and not subject to performance or service conditions, in line with the Remuneration Policy.

The annual bonus measures and performance against targets are set out below. All performance ranges are straight-line between threshold
and maximum:

Further details of the annual bonus outcomes are described in the Committee Chair's letter on page 84.

Unilever Annual Report and Accounts 202191

(D) MCIP – UK law requirement (Audited)

2021 Outcomes
This includes MCIP match shares (operated under the Unilever Share Plan 2017) granted to Alan Jope on 23 April 2018 and Graeme Pitkethly on
3 May 2018, based on performance in the four-year period to 31 December 2021, which vested on 16 February 2022.

The values included in the single figure table for 2021 are calculated by multiplying the number of shares granted to Alan Jope on 23 April 2018
and Graeme Pitkethly on 3 May 2018 (including additional shares in respect of accrued dividends through to 31 December 2021) by the level of
vesting (% of target award) and the share price on the date of vesting (PLC £38.18 and PLC ADS $51.88). These have been translated into euros
using the exchange rate on the date of vesting (€1 = £0.8379 and €1 = $1.1354).

Performance against targets:

(a) Excludes share buy-back of +110bps in 2018 and +90bps in 2021.

Further details of the MCIP outcome are described in the Committee Chair's letter on page 84. Further detail on the SPI outcome is set out below.
On the basis of this performance, the Committee determined that the MCIP awards at the end of 2021 will vest at 87% of initial target award levels
(i.e. 44% of maximum for MCIP).

Outcome of SPI for MCIP cycle 2018-2021:
As explained in the Committee Chair’s letter on page 85, the SPI is an assessment of the business’s sustainability performance by the CRC and
the Committee that captures quantitative and qualitative elements (see page 92). The CRC and the Committee agree on a SPI achievement level
against the KPI taking into account performance across the entire SPI pillar.

The 2021 SPI performance (based on 2020 USLP performance) is set out below. The SPI index for the four-year MCIP performance period is
calculated by taking a simple average and is set out at the bottom of the table for MCIP 2018-2021 (see page 92).

The USLP was our 10-year plan to make sustainable living commonplace by halving our environmental footprint and increasing our social impact
through our brands, innovation, sourcing and operations.

Since 2010, we helped 1.3 billion people improve their health, wellbeing and hygiene through programmes led by some of our biggest brands:
Lifebuoy, Dove, Domestos, SMILE, Pepsodent and Vaseline. We enhanced the livelihoods of millions of people by driving fairness and human rights
in our operations and extended supply chain. We achieved our commitment to pay every direct Unilever employee at or above a living wage.

We have made progress on our ambition to halve the environmental footprint of the making and use of our products. We have achieved a
75% reduction of CO2 emissions from energy in our factories per tonne of production and decreased the waste per consumer by 34%. Through
innovation, R&D expertise, and partnerships with suppliers, we are finding lower carbon solutions for our everyday products, which has resulted in
good progress, particularly in Foods & Refreshment and Home Care where we have reduced emissions by 30% and 37% respectively since 2010.

Through our 'less plastic, better plastic, no plastic' framework, we have continued to progress against our waste-free world plastic packaging
goals. We have scaled the use of recycled material in our packaging, achieving 16% of our packaging using recycled plastic or 112,000 tonnes
across the portfolio. Our brands played a major part in increasing our use of recycled plastic. Dove and Sunlight for example, moving to 100%
recycled material bottles in their biggest markets, and innovations in Foods & Refreshment using ice cream tubs made with food-grade recycled
plastic in key markets in Europe.

We also continue in our journey to deforestation-free supply chains, where in 2020, we purchased and/or contracted 83% of volume of supply of
palm oil, soy, and paper and board from low-risk sources.

We maintained our leading status by achieving top ratings in industry indexes and continue to use our scale and influence to drive wider changes
on issues that are relevant to our business.

2021 marks the final year of reporting against the USLP commitments. In 2022, the SPI indicators will be based on progress made against the
Unilever Compass commitments (see page 88 for details).

Unilever Annual Report and Accounts 2021GOVERNANCE REPORT92

Directors’ Remuneration Report continued

The average SPI outcome for MCIP 2018-2021 is set out at the bottom of the table and is audited.

SPI Category

USLP
Health &

Wellbeing

Reducing Environmental
Impact

Enhancing

Livelihoods

KPIs

SPI 2021

Judgement (a)

2020 actuals

SPI 2020
2019 actuals

SPI 2019
2018 actuals

SPI 2018
2017 actuals

With our Dove brand, we'll help young
people build up positive body confidence
and self-esteem through educational
programme (millions)

Reduce CO2 emissions from energy from
our factories per tonne of production vs
2008 baseline (%)

Increase the recycled plastic material
content in our packaging (% purchased)

Source our procurement spend through
suppliers meeting the mandatory
requirements of our Responsible Sourcing
Policy (%)

Reduce our Total Recordable Frequency
Rate (TRFR) for accidents in our factories
and offices (# per million hours worked)

Partly
achieved

Over-
achieved

Partly
achieved

Over-
achieved

69m

>60m

35m

29m

-75%

-65%

-52%

-47%

16%

4,845
tonnes
(<1%)

4,850
tonnes
(<1%)

83%

70%

61%

55%

0.63

0.76

0.69

0.89

Transformational change agenda

Sustainable Sourcing

External recognition

Purchase and/or contract volume of our
supply of palm oil, soy and paper and
board from low risk sources (%)(b)

Rankings and ratings

Achieve Leader/A ratings (number)

Annual SPI outcome

Average SPI outcome for
MCIP 2018-2021

Achieved

83%

95%

81%

56%

Over-
achieved

125%

6 of 6(c)

5 of 5

130%

3 of 5

125%

4 of 5

120%

(a) Judgement of the Committee and CRC.
(b) Measure for 2020 actuals. Measure for 2017-2019 actuals was: 'purchase crude palm oil from physically certified sustainable sources (%)'.
(c) DJSI, CDP Climate, CDP Water, CDP Forests, GlobeScan plus Bloomberg Equality Index in 2020.

Share price growth MCIP 2018-2021

(a) The conditional number of shares awarded (including decimals) at the share price on the award date.
(b) The business performance ratio applied to the original conditional share award (including decimals) at the share price on the award date.
(c) The dividends accrued on the original conditional share award (including decimals) at the share price on the award date.
(d) The nominal movement in share price between the award date and the vesting date applied to the original conditional share award plus accrued dividends

(including decimals) multiplied by the business performance ratio.

(e) The final value of the award on the vesting date using the exchange rate on the day of vesting of €1 = £0.8379 and €1 = $1.1354. The actual number of vested shares

can be found on page 94. The share values for Alan Jope are grossed up for tax and social security.

Unilever Annual Report and Accounts 2021Graeme Pitkethly2,000,0001,600,0001,200,000800,000400,0000PLC SharesOriginal(a)Performance(b)Dividends(c)Share price growth(d)2,400,000-400,000-800,000-1,200,000Alan JopePLC ADS Shares24,816 shares €1,169,114(a)€1,114,335(e)-3.2%(d)31,422 shares €1,521,826(a)€1,415,671(e)-5.6%(d)93

Scheme interests awarded in the year (Audited)

PSP performance share award made in 2021
Basis of award

The following numbers of performance shares were awarded on 7 May 2021 (vesting on 7 May 2024):

Maximum face value
of awards(a)

Threshold vesting
(% of target award)

Performance period

CEO:
▪ PLC - 61,233
Maximum vesting results in 200% of the above awards vesting. Dividend equivalents may be earned
(in cash or additional shares) on the award when and to the extent that the award vests.

CFO:
▪ PLC - 36,901

▪ CEO: €6,081,295
▪ CFO: €3,664,799
Four equally weighted long-term performance measures. 0% of the target award vests for threshold performance.

1 January 2021 – 31 December 2023 (with a requirement to hold vested shares for a further two-year
retention period).

Details of performance
measures

Performance measures:

PSP 2021 – 2023 awards

Weighting

Threshold

Max

Competitiveness: % Business Winning

25%

Cumulative Free Cash Flow
(Current FX)

Return On Invested Capital
(Exit year %)

Sustainability Progress Index (Committee
assessment of SPI progress)

25%

45%

€16.7bn

15%

60%

200%

22.7bn

200%

19%

200%

(a) Face values are calculated by multiplying the number of shares granted on 7 May 2021 (including decimals) by the share price on that day of PLC £42.73, assuming

maximum performance and therefore maximum vesting of 200% and then translating into euros using an average exchange rate over 2021 of €1 = £0.8605.

Annual bonus deferral share award made in 2021
Basis of award

The following numbers of annual bonus deferral shares were awarded on 7 May 2021:

CEO:
▪ PLC - 5,743
Annual bonus deferral shares accrue dividends, which are reinvested.

CFO:
▪ PLC - 3,461

Face value of awards(a)

CEO: €285,181

CFO: €171,864

Deferral period

7 May 2021 – 7 May 2024.

Details of performance
measures

No performance measures.

(a) Face values are calculated by multiplying the number of shares granted on 7 May 2021 (including decimals) by the share price on that day of PLC £42.73 and then

translated into euros using an average exchange rate over 2021 of €1 = £0.8605.

Unilever Annual Report and Accounts 2021GOVERNANCE REPORT94

Directors’ Remuneration Report continued

Minimum shareholding requirement and Executive Director share interests (Unaudited)

Executive Directors are required to build and retain a personal shareholding in Unilever within five years of 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 (after deduction of tax) 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 2021 and the
interest in PLC ordinary shares of the Executive Directors and their connected persons as at 31 December 2021.

When calculating an Executive Director’s personal shareholding, the following methodology is used:
▪
▪ shares in PLC will qualify provided they are personally owned by the Executive Director, by a member of their (immediate) family or by certain

fixed pay at the date of measurement;

corporate bodies, trusts or partnerships, as required by law from time to time (each a ‘connected person’);

▪ shares purchased under the legacy MCIP or legacy GSIP, 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 Executive Director remaining in employment will qualify on a net of tax basis

(including deferred bonus awards);

▪ shares awarded on a conditional basis by way of the legacy MCIP or legacy GSIP will not qualify until the moment of vesting (i.e. once the precise

number of shares is fixed after the four-year vesting period for the legacy MCIP or three-year vesting period for the legacy GSIP has elapsed);
▪ shares awarded on a conditional basis under the PSP will not qualify until the moment of vesting (i.e. once the precise number of shares is fixed

after the three-year vesting period for PSP has elapsed); and
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.

Any Executive Director who leaves after the date of the Remuneration Policy took effect will be required to maintain at least 100% of their minimum
shareholding requirement for two years after leaving (or if less, their actual shareholding on the date of leaving). ULE members are required to
build a shareholding of 400% of fixed pay (500% for the CEO). This requirement is 250% of fixed pay for the management layer below ULE.

Executive Directors’ shareholdings are ring-fenced to ensure they meet the minimum shareholding requirement, including for two years after
leaving. This means that even if the shares are vested, they are blocked until the end of the minimum shareholding requirement period (excluding
any shares above the minimum shareholding requirement).

Executive Directors’ and their connected persons’ interests in shares and share ownership (Audited)

Share ownership
guideline as % of
fixed pay (as at 31
December 2021)

Have guidelines
been met (as at 31
December 2021)

Actual share
ownership as a %
of fixed pay (as
at 31 December
2021)(a)

CEO: Alan Jope

CFO: Graeme Pitkethly

500%

400%

Yes

789%

717%

Shares held as at

1 January 2021

Shares held as at
31 December 2021(b)

PLC

37,508

144,366

PLC ADS

214,714

—

PLC

43,251

182,058

PLC ADS

223,140

—

(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

2021 (€1,560,780 for the CEO and €1,175,719 for the CFO).

(b) PLC shares are ordinary 31/9p shares. Includes annual bonus deferral shares dividend accrual, which is reinvested.

During the period between 31 December 2021 and 24 February 2022, the following changes in interests have occurred:

▪ Graeme Pitkethly purchased 6 PLC shares under the PLC ShareBuy Plan: 3 on 11 January 2022 at a share price of £39.20, and a further 3 on

8 February 2022 at a share price of £38.64; and

▪ as detailed under heading (D) on page 91, on 16 February 2022:

▪ Alan Jope acquired 14,252 PLC ADS shares following the vesting of his 2018 MCIP award; and
▪ Graeme Pitkethly acquired 13,280 PLC shares following the vesting of his 2018 MCIP award.

The voting rights of the Directors (Executive and Non-Executive) and members of the ULE who hold interests in the share capital of PLC are the
same as for other holders of the class of shares indicated. As at 24 February 2022, 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. All shareholdings in the table above are beneficial.
On page 76 the full share capital of PLC has been described. Pages 131 and 132 set out how many shares Unilever held to satisfy the awards under
the share plans.

Information in relation to outstanding share incentive awards

As at 31 December 2021, Alan Jope held awards over a total of 139,664 shares which are subject to performance conditions and a total of
5,743 shares which are not subject to performance conditions, and Graeme Pitkethly held awards over a total of 112,343 shares which are subject
to performance conditions and a total of 3,461 shares which are not subject to performance conditions. There are no awards of shares in the form
of options.

Unilever Annual Report and Accounts 202195

Balance of
bonus deferral
shares at 31
December
2021(a)

Share type

PLC

5,743(b)

3,461(c)

Balance of
conditional shares
at 31 December 2021

Annual bonus deferral shares (Audited)

The following bonus deferral shares were outstanding at 31 December 2021 under the Unilever Share Plan 2017:

Alan Jope

Graeme Pitkethly

(a) Annual bonus deferral shares accrue dividends, which are reinvested.
(b) This includes a grant of 5,743 PLC shares made on 7 May 2021 (vesting 7 May 2024).
(c) This includes a grant of 3,461 PLC shares made on 7 May 2021 (vesting 7 May 2024).

PSP (Audited)

The following conditional shares were outstanding at 31 December 2021 under the PSP:

Balance of
conditional
shares at January
2021

Alan Jope

Graeme
Pitkethly

Share
type

No. of
shares

PLC

—

Conditional
shares
awarded
in 2021

Performance
period
1 January
2021 to
31 December
2023

61,233(a)

Price at
award

£42.73

36,901(b)

£42.73

Dividend

accrued

during the
year(c)

1,680

1,012

Vested in

Additional
shares
earned in

2021(d) Price at vesting

2021 Shares lapsed

No. of shares

—

62,913

37,913

(a) This includes a grant of 61,233 PLC shares made on 7 May 2021 (vesting 7 May 2024).
(b) This includes a grant of 36,901 PLC shares made on 7 May 2021 (vesting 7 May 2024).
(c) Reflects reinvested dividend equivalents accrued during 2021 and subject to the same performance conditions as the underlying performance shares.
(d) First year of grant, no vesting to take place until 2024.

MCIP (Audited)

The following conditional shares vested during 2021 or were outstanding at 31 December 2021 under the MCIP:

Balance of
conditional
shares at
January 2021

Balance of conditional shares at 31 December 2021

Alan Jope

Graeme Pitkethly

Share
type

PLC

PLC ADS

PLC

No. of shares

58,233(a)

25,414(a)

83,914(b)

Dividend
shares accrued
during the
year(c)

2,137

587

2,653

Vested in

2021(d) Price at vesting

—

7,985

US$55.74

10,074

£40.06

Additional
shares earned
in 2021(e)

Shares lapsed

No. of shares

—

1,635

2,063

60,370

16,381

74,430

(a) This includes a grant of 8,607 PLC ADS shares made on 17 May 2017 (which vested on 16 February 2021), a grant of 14,454 PLC ADS shares made on 23 April 2018

(vesting on 16 February 2022), a grant of 16,668 PLC shares on 23 April 2019 (vesting on 9 February 2023) and a grant of 39,594 PLC shares on 24 April 2020 (vesting on
15 February 2024) and 2,353 PLC ADS shares and 1,971 PLC shares from reinvested dividends accrued in prior years in respect of awards. Please note, any Unilever N.V.
shares were converted to PLC shares on unification in November 2020, which is why only Unilever PLC shares are provided in this table.

(b) This includes a grant of 5,423 each NV and PLC shares made on 17 May 2017 (which vested on 16 February 2021), a grant of 12,408 of each NV and PLC shares made
on 3 May 2018 (vesting on 16 February 2022), a grant of 19,196 PLC shares on 23 April 2019 (vesting on 9 February 2023) and a grant of 23,795 PLC shares on 24 April
2020 (vesting on 15 February 2024), 5,261 PLC shares from reinvested dividends accrued in prior years in respect of awards. Please note, any Unilever N.V. shares were
converted to PLC shares on unification in November 2020, which is why only Unilever PLC shares are provided in this table.

(c) Reflects reinvested dividend equivalents accrued during 2021, subject to the same performance conditions as the underlying matching shares.
(d) The 17 May 2017 grant vested on 16 February 2021 at 83% for both Alan Jope and Graeme Pitkethly.
(e) This includes any additional shares earned and accrued dividends as a result of a business performance multiplier on vesting below 100%.

GSIP (Audited)

The following conditional shares vested during 2021 or were outstanding at 31 December 2021 under the GSIP:

Balance of conditional shares at
January 2021(a)

Balance of conditional shares at 31 December 2021

Share
type

n/a

PLC

No. of shares

n/a

28,149(b)

Dividend
shares accrued
during the year

Vested in

Additional
shares earned

2021 Price at vesting

in 2021 Shares lapsed

No. of shares

n/a

—

n/a

14,638(c)

n/a

£39.80

n/a

—(d)

n/a

13,511

n/a

—

Alan Jope

Graeme Pitkethly

(a)

In accordance with the Remuneration Policy adopted by shareholders in May 2018, no GSIP award has been granted after 2018. Alan Jope’s last GSIP vested in 2020.
Graeme Pitkethly’s last GSIP vested in 2021.

(b) This includes a grant of 12,772 of each NV and PLC shares made on 16 February 2018 (which vested on 17 February 2021), 1,298 PLC EUR and 1,307 PLC shares from

reinvested dividends accrued in prior years in respect of awards. Please note, any Unilever N.V. shares were converted to PLC shares on unification in November 2020,
which is why only Unilever PLC shares are provided in this table.

(c) The 16 February 2018 grant vested on 17 February 2021 at 52% for Graeme Pitkethly.
(d) This includes any additional shares earned and accrued dividends as result of a business performance multiplier on vesting above 100%.

Unilever Annual Report and Accounts 2021GOVERNANCE REPORT96

Directors’ Remuneration Report continued

Executive Directors' service contracts

Starting dates of our Executive Directors’ service contracts:
▪ Alan Jope: 1 January 2019 (signed on 16 December 2020); and
▪ Graeme Pitkethly: 1 October 2015 (signed on 16 December 2015).

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 fixed pay 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.

See the remuneration topics section of our website for a copy of the Remuneration Policy.

Payments to former Directors (Audited)

The table below shows the 2021 payments to Paul Polman in accordance with arrangements made with him upon his stepping down as CEO on
31 December 2018 and his retirement from employment with Unilever effective 2 July 2019. These arrangements were disclosed in the 2018 DRR.

Paul Polman

Benefits(a)

MCIP 2018-2021 (pro-rated)(b)

Total Remuneration

(€'000)

779

853

(a) This includes tax preparation fees and social security.
(b) Actual time pro-rated MCIP vesting (87%) on 16 February 2022 of 17,095 Unilever PLC shares at a closing share price of €45.58 on vesting date. Vesting based on MCIP

2021 outcomes on page 91.

There have been no other payments to former Directors nor have there been any payments for loss of office during the year.

Implementation of the Remuneration Policy for Non-Executive Directors

There was no increase to Non-Executive Director fees in 2021. Following a review in 2021, the Committee decided to keep Non-Executive Director
fees the same for 2022. The Committee will review the fees again in 2022.

The table below outlines the current fee structure with fees set in euros and paid by Unilever PLC (in sterling) shown using the average exchange
rate over the year of £1 = €0.8605 (rounded).

Roles and responsibilities

Basic Non-Executive Director Fee

Chair (all-inclusive)

Senior Independent Director (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

2022

2021

Annual Fee €

95,753

732,225

45,060

16,898

20,277

16,898

25,910

33,795

45,060

95,753

732,225

45,060

16,898

20,277

16,898

25,910

33,795

45,060

All reasonable travel and other expenses incurred by Non-Executive Directors in the course of performing their duties are considered to be business
expenses and so are reimbursed. Non-Executive Directors also receive expenses relating to the attendance of their spouse or partner, when they
are invited by Unilever.

Note, the Committee decided to update the foreign exchange (FX) rate used to disclose Non-Executive Director fees from 1 January 2022 to align
with the FX rate used for other reporting in the DRR (i.e. average FX rate for the reporting year (€1 = £0.8605 for 2021) rather than a fixed exchange
rate). This explains the change to the 2021 annual fees set out above compared to the 2020 DRR. Non-Executive Director fees are paid in GBP,
therefore, actual pay to Non-Executive Directors will remain consistent.

Unilever Annual Report and Accounts 202197

2020

Single figure of remuneration in 2021 for Non-Executive Directors (Audited)

The table below shows a single figure of remuneration for each of our Non-Executive Directors, for the years 2020 and 2021.

Non-Executive Director

Nils Andersen(c)

Laura Cha(d)

Vittorio Colao(e)

Marijn Dekkers(f)

Judith Hartmann(g)

Adrian Hennah(h)

Andrea Jung(i)

Susan Kilsby(j)

Ruby Lu(k)

Strive Masiyiwa(l)

Youngme Moon(m)

John Rishton(n)

Feike Sijbesma(o)

Total

Fees(a)
€'000

Benefits(b)
€'000

2021

Total
remuneration
€'000

Fees(a)
€'000

Benefits(b)
€'000

Total remuneration
€'000

755

137

–

126

180

126

134

132

145

134

1,935

–

755

137

–

126

180

126

134

132

145

134

778

134

138

129

–

135

129

–

138

168

150

138

1,935

2,084

–

778

134

138

129

–

135

129

–

138

168

150

138

2,084

(a) This includes fees received from Unilever for 2020 and 2021 respectively. Includes basic Non-Executive Director fee and committee chairship and/or membership.

Where relevant, amounts for 2020 have been translated into euros using the average exchange rate over 2020 (€1 = £0.8877). Amounts for 2021 have been translated
into euros using the average exchange rate over 2021 (€1 = £0.8605).

(b) The only benefit received relates to travel by spouses or partners where they are invited by Unilever. There was no travel by the spouses or partners in 2021 due to the

Covid-19 pandemic.

(c) Chair, Chair of the Nominating and Corporate Governance Committee and member of the Compensation Committee.
(d) Member of the Compensation Committee and Nominating and Corporate Governance Committee.
(e) Stepped down from the Board and Chair of the Compensation Committee on 18 February 2021.
(f) Retired from the Board at the May 2020 AGM.
(g) Member of the Audit Committee.
(h) Member of the Audit Committee and appointed to the Board with effect from 1 November 2021.
(i) Senior Independent Director and member of the Nominating and Corporate Governance Committee from the May 2021 AGM and Chair of the Compensation

Committee from 18 February 2021.

(j) Member of the Audit Committee.
(k) Member of the Compensation Committee and Nominating and Corporate Governance Committee and appointed to the Board with effect from 1 November 2021.
(l) Chair of the Corporate Responsibility Committee.
(m) Member of the Corporate Responsibility Committee. Stepped down as Senior Independent Director from the May 2021 AGM.
(n) Chair of the Audit Committee.
(o) Member of the Corporate Responsibility Committee and Nominating and Corporate Governance Committee.

We do not grant our Non-Executive Directors any personal loans or guarantees or any variable remuneration, nor are they entitled to any
severance payments.

Percentage change in remuneration of Non-Executive Directors

The table below shows the five-year history year-on-year percentage change for fees and other benefits for the current Non-Executive Directors.

Non-Executive Director

Nils Andersen

Laura Cha

Vittorio Colao(b)

Judith Hartmann

Adrian Hennah(c)

Andrea Jung(d)

Susan Kilsby

Ruby Lu(e)

Strive Masiyiwa

Youngme Moon(f)

John Rishton

Feike Sijbesma

% change from
2020 to 2021

% change from
2019 to 2020

% change from
2018 to 2019

% change from
2017 to 2018

% change from
2016 to 2017

Total Remuneration(a)

-3.0%

2.3%

-83.8%

-3.0%

–

32.8%

-3.0%

–

-3.0%

-21.4%

-3.0%

253.9%

10.8%

-19.9%

-11.4%

–

11.8%

144.0%

–

-0.9%

-0.8%

-10.9%

-0.9%

69.2%

5.2%

35.4%

14.1%

–

51.3%

–

6.1%

15.0%

17.5%

3.0%

16.1%

7.5%

23.3%

14.3%

–

18.0%

42.7%

12.6%

6.3%

-12.5%

-10.1%

-3.7%

-8.2%

–

56.3%

45.1%

-9.3%

-3.8%

(a) Non-Executive Directors receive an annual fixed fee and do not receive any Company performance-related payment. Therefore, the year-on-year % changes are mainly
due to changes in committee chair or memberships, mid-year appointments of Non-Executive Directors, fee increases as disclosed in earlier directors’ remuneration
reports and changes in the average sterling: euro exchange rates. Susan Kilsby joined Unilever in August 2019 and therefore her change from 2019 to 2020 shows a
larger % change than for a usual mid-year joiner. Nils Andersen became Chair in November 2019, hence his larger % increase from 2019 to 2020.

(b) Stepped down as Director on 18 February 2021.
(c) Member of the Audit Committee and appointed to the Board with effect from 1 November 2021.
(d) Senior Independent Director and member of the Nominating and Corporate Governance Committee with effect from May 2021 AGM and Chair of the Compensation

Committee from 18 February 2021.

(e) Member of Compensation Committee and Nominating and Corporate Governance Committee and appointed to the Board with effect from 1 November 2021.
(f) Stepped down as Senior Independent Director with effect from May 2021 AGM.

Unilever Annual Report and Accounts 2021GOVERNANCE REPORT98

Directors’ Remuneration Report continued

Non-Executive Directors’ interests in shares (Audited)

Non-Executive Directors are encouraged to build up a personal shareholding of at least 100% of their annual fees over the five years from
appointment. The table shows the interests in Unilever PLC ordinary shares as at 1 January 2021 and Unilever PLC ordinary shares as at
31 December 2021 of Non-Executive Directors and their connected persons. This is set against the minimum shareholding recommendation. There
has been no change in these interests between 31 December 2021 and 24 February 2022 (other than Adrian Hennah, who bought 4,000 PLC shares
on 11 February 2022 at a share price of £37.63 and Strive Masiyiwa, who bought 520 PLC shares on 15 February 2022 at a share price of £38.34).

Non-Executive Director

Nils Andersen

Laura Cha

Vittorio Colao(a)

Judith Hartmann

Adrian Hennah(b)

Andrea Jung

Susan Kilsby

Ruby Lu(c)

Strive Masiyiwa

Youngme Moon

John Rishton

Feike Sijbesma

Share type

Shares held at
31 December 2021

Share type

PLC

PLC ADS

PLC

21,014

3,518

5,600

2,500

—

4,576

2,250

—

3,010

3,500

6,596

10,000

PLC

n/a

PLC

n/a

PLC

PLC ADS

PLC

Actual share
ownership as a %
of NED fees
(as at 31
December 2021)

129%

119%

1,177%

92%

—%

118%

83%

—%

104%

125%

210%

345%

Shares held at
1 January 2021

21,014

3,518

5,600

2,500

n/a

4,576

1,250

n/a

1,130

3,500

5,340

10,000

(a) Stepped down as Director on 18 February 2021. Shares held as at 18 February 2021.
(b) Appointed with effect from 1 November 2021.
(c) Appointed with effect from 1 November 2021.

Non-Executive Directors' letters of appointment

All Non-Executive Directors were reappointed to the Board at the 2021 AGM.(a)

Non-Executive Director

Date first appointed to the Board

Effective date of current appointment(a)

Nils Andersen

Laura Cha

Vittorio Colao

Judith Hartmann

Adrian Hennah

Andrea Jung

Susan Kilsby

Ruby Lu

Strive Masiyiwa

Youngme Moon

John Rishton

Feike Sijbesma

30 April 2015

15 May 2013

1 July 2015

30 April 2015

1 November 2021

3 May 2018

1 August 2019

1 November 2021

21 April 2016

15 May 2013

1 November 2014

5 May 2021

n/a

5 May 2021

1 November 2021

5 May 2021

1 November 2021

5 May 2021

(a) With the exception of Adrian Hennah and Ruby Lu who were appointed by the Board with effect from 1 November 2021 and appointment to be confirmed at the

2022 AGM and Vittorio Colao who stepped down as Director on 18 February 2021. The unexpired term for all Non-Executive Directors’ letters of appointment is the
period up to the 2022 AGM, as they all, unless they are retiring, submit themselves for annual reappointment.

Unilever Annual Report and Accounts 202199

Other disclosures related to Directors' remuneration (Unaudited)

Unilever regularly looks at pay ratios throughout the Group, and the pay ratio between each work level, and we have disclosed this for a number
of years. The table below provides a detailed breakdown of the fixed and variable pay elements for each of our UK work levels, showing how each
work level compares to the CEO and CFO in 2021 (with equivalent figures from 2020 included for comparison purposes).

CEO/CFO Pay Ratio Comparison (split by fixed/variable pay)

Figures for the CEO and CFO are calculated using the data from the Executive Directors’ single figure table on page 89. The year-on-year
comparison reflects an increase in total compensation for the Executive Directors in 2021 following the significant drop in total compensation for
the Executive Directors as a result of the lower performance outcomes on bonus and LTI in 2020. The numbers are further impacted by fluctuation
in the exchange rates used to convert pay elements denominated in pounds sterling to euros for reporting purposes. Where relevant, amounts
for 2020 have been translated using the average exchange rate over 2020 (€1 = £0.8877), and amounts for 2021 have been translated using the
average exchange rate over 2021 (€1 = 0.8605).

Annual bonus and LTI for the UK employees 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 (disregarding personal performance
multipliers, which equal out across the population as a whole); and

▪ MCIP values calculated at an appropriate average for the relevant work level of employees, i.e. an average 20% investment of bonus for
WL2 employees; 45% for WL3 employees; 60% for WL4-5 employees; and 100% for WL6 employees, multiplied by the actual MCIP business
performance ratio.

Fixed pay figures reflect all elements of pay (including allowances) and benefits paid in cash.

Unilever Annual Report and Accounts 2021GOVERNANCE REPORTWL1WL2WL3WL4WL5WL6CFOCEO€0m€1m€2m€3m€4m€5m€6m€7m€8m€9m€10m€11m€12m2021 Fixed2021 Variable2020 Fixed2020 VariableCEO = 77.7 x WL1 | CFO = 54.6 x WL1 CEO = 26.2 x WL2 | CFO = 22.5 x WL2 CEO = 43.8 x WL2 | CFO = 30.8 x WL2 CEO = 14.1 x WL3 | CFO = 12.1 x WL3 CEO = 18.8 x WL3 | CFO = 13.2 x WL3 CEO = 7.1 x WL4 | CFO = 6.1 x WL4 CEO = 9.0 x WL4 | CFO = 6.3 x WL4 CEO = 2.9 x WL5 | CFO = 2.5 x WL5 CEO = 3.5 x WL5 | CFO = 2.5 x WL5 CEO = 1.6 x WL6 | CFO = 1.3 x WL6 CEO = 1.5 x WL6 | CFO = 1.1 x WL6 CEO = 1.2 x CFO CEO = 1.4 x CFO CEO = 56.0 x WL1 | CFO = 48.1 x WL1 100

Directors’ Remuneration Report continued

CEO pay ratio comparison

The table below is included to meet UK requirements and 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 ended 31 December 2021

Salary:

£34,560

£42,668

£58,869

Pay and benefits
(excluding pension):

Pay ratio (Option A):

Year ended 31 December 2020

Salary:

Pay and benefits
(excluding pension):

Pay ratio (Option A):

Year ended 31 December 2019

Salary:

Pay and benefits
(excluding pension):

Pay ratio (Option A):

£48,229

£60,306

£90,335

£34,298

£41,010

£55,000

£45,713

£55,751

£80,670

£38,510

£45,154

£59,988

£50,689

£61,086

£87,982

Figures for the CEO are calculated using the data from the Executive Directors’ single figure table on page 89 translated into sterling using the
average exchange rate over 2020 (€1 = £0.8877) and 2021 (€1 = £0.8605).

Option A was used to calculate the pay and benefits (including 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 2021, and the
respective salary and pay and benefits figures for each quartile are set out in the table above. Full-time equivalent figures are calculated on a pro-
rated basis.

Variable pay figures for the UK employees are calculated on the basis set out in the paragraph for other work levels below the ‘CEO/CFO pay ratio
comparison’ table. 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 minimal.

Year-on-year comparisons reflects the increase in performance related pay outcomes in 2021 compared to 2020. CEO total pay in 2021 increased
by 42% from 2020, notably due to performance related pay, which form a larger portion of CEO pay. In comparison, total pay for UK employees
increased by 8% (at median percentile) given a high proportion of UK employees are below management level and therefore have a lower
weighting on performance related pay compared to the CEO. For the overall UK employee calculation, total pay has increased by approximately
8% (at median percentile), which is aligned to our defined peer group at the 50th percentile (market median), that we benchmark against on a
yearly basis. The median ratio is considered to be consistent with the pay, reward and progression policies within Unilever as the Remuneration
Policy is applicable across our 14,300+ managers throughout the whole business worldwide.

Additionally, in the UK we are required to show additional disclosures on the rates of change in pay year on year. The pay ratios set out above are
more meaningful as they compare to the pay of all of our UK employees. By contrast, the UK regulations require us to show the percentages below
based on employees of our PLC top company only, which forms a relatively small proportion of our total UK workforce. So, whilst operationally we
may pay greater attention to our internal pay ratios (included above in the ‘CEO/CFO pay ratio comparison’ table), these required figures are set
out on the following page.

Unilever Annual Report and Accounts 2021101

Percentage change in remuneration of Executive Directors (CEO/CFO)

The table below shows the five-year history of year-on-year percentage change for fixed pay, other benefits (excluding pension) and bonus for
the CEO, CFO and PLC’s employees (based on total full-time equivalent total reward for the relevant financial year) pursuant to UK requirements.
The respective changes in percentages in fees for our Non-Executive Directors are included in the table ‘Percentage change in remuneration
of Non-Executive Directors’ on page 97.

% change from 2020 to 2021

% change from 2019 to 2020

% change from 2018 to 2019

% change from 2017 to 2018

% change from 2016 to 2017

% change from 2015 to 2016

CEO(a)(b)

CFO(a)(c)

PLC employees(d)

CEO(a)(b)

CFO(a)

PLC employees(d)

CEO(a)

CFO(a)

PLC employees(d)

CEO(a)

CFO(a)

PLC employees(d)

CEO(a)

CFO(a)(c)

PLC employees(d)

CEO(a)

CFO(a)(c)

PLC employees(d)

Fixed pay

1.7%

1.8%

-19.3%

4.0%

3.0%

1.7%

-9.5%

4.2%

15.0%

11.3%

8.2%

8.4%

-6.9%

-2.2%

-6.8%

-11.0%

-30.8%

10.1%

Other benefits
(not including
pension)

35.7%

23.7%

-2.2%

36.6%

40.7%

30.2%

-92.3%

4.8%

-5.2%

-19.2%

8.3%

-5.0%

5.0%

-5.5%

-7.0%

-5.1%

-32.2%

19.1%

Bonus

71.6%

71.7%

-10.6%

-39.1%

-39.7%

-3.0%

-7.4%

7.9%

9.7%

-16.5%

-10.5%

-3.9%

0.8%

21.1%

14.5%

-11.0%

14.3%

16.6%

(a) Calculated using the data from the Executive Directors’ single figure table on page 89 (for information on exchange rates, please see the footnotes in that table).
(b) The increase in fixed pay for the CEO and CFO in 2021 reflects the pay increase awarded from 1 July 2021, as explained in the Committee Chair's letter on page 85.

As a result of a higher formulaic outcome for the 2021 bonus, the bonus increased compared to the previous year (2020). Conversely, a lower formulaic outcome for
the 2020 bonus resulted in the bonus from 2019 to 2020 decreasing. As at 1 January 2020, the tax gross-up has been added in the cost instead of in base salary and
therefore the other benefits increased from 2019 to 2020 compared to prior years. As at 1 January 2019, Alan Jope succeeded Paul Polman as CEO and therefore the
CEO remuneration from 2018 to 2019 decreased compared to prior years as Alan Jope’s fixed pay was set at a level lower than Paul Polman’s.

(c) The increase in fixed pay for the CEO and CFO in 2021 reflects the pay increase awarded from 1 July 2021, as explained in the Committee Chair's letter on page 85.

As a result of a higher formulaic outcome for the 2021 bonus, the bonus increased compared to the previous year (2020). Conversely, a lower formulaic outcome for
the 2020 bonus resulted in the bonus from 2019 to 2020 decreasing. As at 1 January 2020, the tax gross-up has been added in the cost instead of in base salary and
therefore the other benefits increased from 2019 to 2020 compared to prior years. Graeme Pitkethly succeeded Jean-Marc Huet as an Executive Director as per 21 April
2016, although he assumed the role of CFO as from October 2015. As a result, the figure for 2016 includes payments from May 2016 onwards.

(d) For the PLC employees, 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 them against that of the CEO and CFO. Such cash-related benefits include car allowance, acting-up allowance, transport
allowance, training instructor allowance and fixed pay protection allowance. Figures are also affected by changes in the average sterling: euro exchange rates, as well
as changes in the number of employees, including more junior employees than in 2020.

Unilever Annual Report and Accounts 2021GOVERNANCE REPORT102

Directors’ Remuneration Report continued

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 and provides a good reference point to compare spend on pay.
The chart below shows the percentage of movement in underlying earnings, dividends and total staff costs versus the previous year.

(a)

(b)

In calculating underlying profit attributable to shareholders, net profit attributable to shareholders 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 135 for details).
Includes share buy-back of €3,018m in 2021.

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

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

7,852

7,740

9,561

10,296

8,370

11,661

11,726

4,894

3,447

4,890

100%

78%

66%

92%

100%

51%

55%

32%

54%

55%

64%

61%

49%

35%

74%

66%

60%

n/a

81%

65%

47%

99%

88%

n/a

42%

44%

Unilever Annual Report and Accounts 2021103

Ten-year historical Total Shareholder Return (TSR) performance

The graph below includes growth in the value of a hypothetical £100 investment over ten years’ FTSE 100 comparison based on 30-trading-day
average values.

The table below shows Unilever’s performance against the FTSE 100 Index, which is the most relevant index in the UK where we have our principal
listing. Unilever is a constituent of this index.

Ten-year historical TSR performance

Serving as a Non-Executive Director on the board of another company

Unilever recognises the benefit to the individual and the Group of senior executives acting as directors of other companies in terms of broadening
Directors’ knowledge and experience, but the number of outside directorships of listed companies is generally limited to one per Executive
Director. The remuneration and fees earned from that particular outside listed directorship may be retained (see ‘Independence and Conflicts’
on page 69 for further details).

For the reason above, Graeme Pitkethly is permitted to be a Non-Executive Director of Pearson PLC since 1 May 2019. In 2021, he received an annual
fee of €108,077 (£93,000) (2020: €104,014 (£92,333)) (of which 25% of his basic fee was, in accordance with Pearson’s remuneration policy, delivered
in Pearson shares) based on an average exchange rate over 2021 of €1 = £0.8605. Figures for 2020 have been translated in euros based on an
average exchange rate over 2020 of €1 = £0.8877.

Unilever Annual Report and Accounts 2021GOVERNANCE REPORTValue of hypothetical £ holdingDec 21Dec 20Dec 19Dec 18Dec 17Dec 16Dec 15Dec 14Dec 13Dec 1250150100200250300350400Unilever PLCFTSE 100Dec 11104104

Unilever Annual Report and Accounts 2021

Directors’ Remuneration Report continued

The Compensation Committee

finalising the Remuneration Policy;

During 2021, the Committee met five times and its activities included:
▪
▪ determining the 2020 annual bonus outcome;
▪ determining vesting of the MCIP awards for the CEO, CFO and the ULE;
▪ determining vesting of the GSIP award for the CFO;
▪ setting the 2021 annual bonus and PSP 2021-2023 performance measures and targets;
▪
▪

reviewing fixed pay for the CEO and CFO and fees for the Non-Executive Directors;
tracking external developments and assessing their impact on Unilever’s Remuneration Policy and its implementation, in particular in the
context of Covid-19;
retrospectively reviewing how the Remuneration Policy landed with stakeholders;
reviewing underlying reward principles, workforce pay, including pay philosophy and pay positioning;
reviewing gender pay gap data;

▪
▪
▪
▪ considering progress on the living wage commitment that is now extended to the wider supply chain; and
▪ assessing performance against 2021 SPI targets and setting 2022 SPI targets along with the CRC.

The Committee operates within its terms of reference which were last updated on 29 November 2020. The Committee’s terms of reference are
contained within ‘The Governance of Unilever’.

See the Board and Management Committees section of our website for a copy of the Committee's terms of reference.

As part of the Board evaluation carried out in 2021, the Board evaluated the performance of the Committee. The Committee also carried out
an assessment of its own performance in 2021. Overall, the Committee members concluded that the Committee is performing effectively. The
Committee has agreed to further enhance its effectiveness by continuing to monitor the effectiveness of performance measures for incentives
and their link to Company strategy and the assessment of the Company's talent bank and suitability for growth initiatives.

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.

Fiona Camenzuli of PricewaterhouseCoopers (PwC) provided the Committee with independent advice on various matters it considered. During
2021, the wider PwC firm has also provided tax and consultancy services to Unilever including tax compliance, transfer pricing, other tax-
related services, managed legal services, internal audit advice and secondees, third-party risk and compliance advice, cyber security advice,
sustainability assurance and consulting, merger and acquisition support, and media assurance support. 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 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 2021 were £137,100. 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 (Alan Jope), the Chief Human Resources Officer (Leena Nair) and the VP Global
Head of Reward (Constantina Tribou) 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 Board for approval. The Committee also received legal and governance advice from the Chief Legal Officer and Group
Secretary (Ritva Sotamaa) and the Chief Counsel Executive Compensation & 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. The following table sets out actual voting in respect of this and
previous report:

Voting outcome (% of votes)

2020 Directors' Remuneration Report (2021 AGM)
(excluding the Directors' Remuneration Policy)

2021 Directors' Remuneration Policy (2021 AGM)

For

Against

Withheld

96.88%

93.51%

3.12%

6.49%

7,962,282

8,161,369

The Directors’ Remuneration Report has been approved by the Board, and signed on their behalf by Ritva Sotamaa, Chief Legal Officer and
Group Secretary.

Unilever Annual Report and Accounts 2021

Financial statements

106 Statement of Directors’ responsibilities

107 Independent Auditor’s report

114 Consolidated financial statements

118 Notes to the consolidated financial statements

167 Unilever PLC company accounts and notes

176 Group Companies

187 Shareholder information

188 Additional Information for US Listing Purposes

106

Unilever Annual Report and Accounts 2021

Statement of Directors’
responsibilities

Annual accounts

The Directors are responsible for preparing the Annual Report and
Accounts in accordance with applicable law and regulations. The
Directors are also required 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 PLC 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
PLC 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
(IFRS) as issued by the International Accounting Standards Board (IASB),
and UK-adopted international accounting standards, which they
consider to be applicable have been followed. The Directors are
responsible for preparing the Annual Report and Accounts including the
consolidated financial statements in the European single electronic
format in accordance with the requirements as set out in Commission
Delegated Regulation (EU) 2019/815 with regard to regulatory technical
standards on the specification of a single electronic reporting format.

The Directors have responsibility for ensuring that PLC keep accounting
records which disclose with reasonable accuracy their financial position
and which enable the Directors to ensure that the accounts comply
with all 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 Auditor's Report, 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 2021, taken as a whole, is
fair, balanced and understandable, and provides the information
necessary for shareholders to assess the Company’s position and
performance, business model and strategy;

▪ The financial statements which have been prepared in accordance
with international financial reporting standards (IFRS) as issued by
the International Accounting Standards Board (IASB), and UK-
adopted international accounting standards give a true and fair view
of the assets, liabilities, financial position and profit or loss of the
Company 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 PLC 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 72 to 73.

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 43. In addition, we describe in notes 15 to 18 on pages 144
to 159 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 45.

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 for at least twelve months from the date of approval of
the financial statements.

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 46 to 50 for a discussion of Unilever’s principal risk
factors and to pages 44 to 50 for commentary on the Group’s approach
to risk management and control.

Unilever Annual Report and Accounts 2021

107

Independent Auditor's Report

Independent Auditor's report to the members of Unilever PLC

1. Our opinions are unmodified

What we have audited
We have audited the financial statements (“the Financial Statements”) of Unilever PLC (“the Company”) for the year ended 31 December 2021
which comprise the Consolidated Financial Statements on pages 114 to 166 and the Company Accounts on pages 167 to 175, and the related
notes, including the accounting policies in note 1.

Our opinions
In our opinion the Financial Statements:
▪ give a true and fair view of the state of the Group’s and of the Company’s affairs as at 31 December 2021 and of the Group’s and of the

Company’s profit for the year then ended;

▪ have been properly prepared in accordance with UK-adopted international accounting standards; and
▪ have been prepared in accordance with the requirements of the Companies Act 2006.

Additional opinion in relation to IFRS as issued by the IASB
As explained in the accounting policies set out in the Consolidated Financial Statements, in addition to complying with its legal and regulatory
obligation to apply UK-adopted international accounting standards, the Group has also applied IFRS as issued by the International Accounting
Standards Board (IASB). In our opinion, the Consolidated Financial Statements have been properly prepared in accordance with IFRS as issued
by the IASB.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our responsibilities are
described below. We believe that the audit evidence we have obtained is a sufficient and appropriate basis for our opinion. Our audit opinion is
consistent with our report to the Audit Committee.

We were appointed as auditor by the shareholders on 14 May 2014. The period of total uninterrupted engagement is for the eight financial years
ended 31 December 2021. We have fulfilled our ethical responsibilities under, and we remain independent of the Group in accordance with, UK
ethical requirements including the FRC Ethical Standard as applied to listed public interest entities. No non-audit services prohibited by that
standard were provided.

Overview

Materiality

Consolidated Financial Statements as a whole

Coverage

€380 million (2020: €380 million)
4.4% (2020: 4.8%) of Group profit
before taxation

77% (2020: 78%) of revenue

Key Audit Matters – Consolidated Financial Statements

Recurring Key Audit Matters

Revenue recognition – Discounts

Indirect tax contingent liabilities in Brazil

↔

New Key Audit Matters

Disposal of Tea business - Presentation of Assets held for Sale

Accounting for swap transaction of intellectual property
rights (applicable to Company Accounts only)

↔ Similar risk to last year

Prior to the merger of Unilever PLC and Unilever N.V. on 29 November 2020, and as reported in previous years, the Unilever Group consisted of
Unilever PLC, Unilever N.V. and the entities they controlled and the Consolidated Financial Statements of the Group were audited by both KPMG LLP
(KPMG LLP) and KPMG Accountants N.V. (KPMG NL). Following Unification in November 2020 the Group is represented by Unilever PLC and the
entities controlled by Unilever PLC and the Consolidated Financial Statements are therefore solely audited by KPMG LLP (Unilever N.V. ceased to
exist as of the merger date).

2. Key audit matters: Our assessment of risks of material misstatement

Key audit matters are those matters that, in our professional judgement, were of most significance in the audit of the Financial Statements and
include the most significant assessed risks of material misstatement (whether or not due to fraud) identified by us, including those which had the
greatest effect on: the overall audit strategy; the allocation of resources in the audit; and directing the efforts of the engagement team. We
summarise below the key audit matters, in decreasing order of audit significance, in arriving at our audit opinions above, together with our key
audit procedures to address those matters and, as required, for public interest entities, our results from those procedures. These matters were
addressed, and our results are based on procedures undertaken, in the context of, and solely for the purpose of, our audit of the Financial
Statements as a whole, and in forming our opinion thereon, and consequently are incidental to that opinion, and we do not provide a separate
opinion on these matters.

FINANCIAL STATEMENTS108

Unilever Annual Report and Accounts 2021

Revenue recognition –
Discounts

As discussed in the report
of the Audit Committee
(page 78), note 2, note 13
and note 14 to the
Consolidated Financial
Statements, the rebate
accrual was €4,004 million
as of 31 December 2021
and €3,852 million as of
31 December 2020.

The key audit matter
Revenue is measured net of rebates, price
reductions, incentives given to customers,
promotional couponing and trade
communication costs (‘’discounts’’).

Certain discounts for goods sold in the year
are only finalised when the precise amounts
are known and revenue therefore includes an
estimate of variable consideration. The
variable consideration represents the portion
of discounts that are not directly deducted
on the invoice and is complex as a result
of diversity in the terms in contractual
arrangements with customers. The unsettled
portion of the variable consideration results in
discounts due to customers at 31 December
2021 (“rebate accrual”).

Our response and results
The following are the primary procedures we performed to
address this key audit matter in a selected number of markets:
• We evaluated the design and tested the operating

effectiveness of certain internal controls related to the
revenue process including controls over the rebate
agreements, calculation of the rebate accrual and controls
over rebate claims.

• Within the Group’s relevant markets, used the prior year

rebate accrual together with our understanding of current
year developments to form an expectation of the rebate
accrual at 31 December 2021. We compared this expectation
against the actual rebate accrual, completing further
corroborative inquiries and obtained underlying
documentation as appropriate.

• Tested a selection of recorded rebate accruals after

31 December 2021 and assessed whether the accrual is
recorded in the proper period.

Therefore, there is a risk of revenue being
misstated as a result of incorrect calculation
of the variable consideration.

• Tested a selection of payments made after 31 December 2021
and assessed whether the original accrual was recorded in
the proper period.

Within revenue recognition we identified the
rebate accrual as a key audit matter, as in
a number of markets the rebate accrual is
significant and the terms in contractual
arrangements with customers are not uniform.

This is considered to be an area which had a
significant effect on our overall audit strategy
and allocation of resources in planning and
completing our audit as significant effort
was required in evaluating the contractual
arrangements and the related rebate accrual.

There is also a risk that revenue may be
overstated due to fraud through manipulation
of the rebate accrual recognised resulting
from the pressure management may feel to
achieve performance targets.

We identified the assessment of indirect tax
contingent liabilities in Brazil related to a
2001 corporate reorganisation as a key
audit matter.
In Brazil, there is a high degree of complexity
involved in the local indirect tax regimes (both
state and federal) and jurisprudence, related
to certain corporate reorganisations. Due to
these complexities, there is a high degree of
judgement applied by the Group with respect
to the uncertainty of the outcome of this
matter. Complex auditor’s judgement and
specialised skills were also required in
assessing the outcome of investigations by the
authorities, if a liability exists and in making
an estimate of any economic outflows.

• Critically assessed manual journals recorded to revenue to
identify unusual or irregular items and obtained underlying
documentation.

• Assessed the adequacy of Group’s disclosures in respect of

the rebate accrual.

Our results

The results of our testing were satisfactory (2020: satisfactory)
and we considered the rebate accrual disclosures to be
acceptable (2020: acceptable).

The following are the primary procedures we performed to
address this key audit matter:
• We evaluated the design and tested the operating

effectiveness of certain internal controls related to the
indirect tax process including controls around the assessment
of the outcome of investigations if a liability exists and the
quantification of the potential economic outflow.

• We involved local indirect tax professionals with specialised

skills and knowledge who assisted in:
• assessing the appropriateness of the contingent liabilities

compared to the nature of the exposures, applicable
regulations and related correspondence with the tax
authorities; and

• assessing the impact of historical and recent judgements
passed by the court authorities in considering any legal
precedent or case law by inquiring of the Group’s external
lawyers and inspection of relevant information, on the
likelihood of an outflow of economic resources.

• We inspected legal opinions from third party lawyers and
obtained formal confirmations from the Group’s external
lawyers and, where relevant, compared to the underlying
exposure.

Our results

The results of our testing were satisfactory (2020: satisfactory)
and we considered the Brazilian indirect tax contingent liability
disclosures to be acceptable (2020: acceptable).

Indirect tax contingent
liabilities in Brazil

As discussed in the Report
of the Audit Committee
(page 78) and note 20
to the Consolidated
Financial Statements,
there are contingent
liabilities reported for
indirect taxes relating to
disputes with the Brazilian
authorities related
to a 2001 corporate
reorganisation. The
total amount of the tax
assessments in respect
of this matter is €2,549
million as of 31 December
2021 and €2,040 million as
of 31 December 2020.

Unilever Annual Report and Accounts 2021

109

Disposal of Tea business -
Presentation of Assets
held for Sale

As discussed in the Report
of the Audit Committee
(page 78) and note 22
to the Consolidated
Financial Statements, the
assets held for sale and
liabilities held for sale
were €2,375 million and
€820 million, respectively
as of 31 December 2021.

Accounting for swap
transaction of intellectual
property rights

(Applicable to Company
Accounts only)

As discussed in the critical
accounting estimates and
judgements section on
page 171 and in note 4 of
the Company Accounts,
the unrealised gain
recorded in income
statement was £2,815
million and increase in
investment in Unilever
Global IP Limited was
£2,259 million for the year
ended 31 December 2021.

The key audit matter
On 18 November 2021, Unilever announced
that it had entered into an agreement to sell
their global Tea business, ekaterra, to CVC
Capital Partner Fund VIII for €4.5 billion and
expects that the divestment will be completed
within the next 12 months of the balance sheet
date. ekaterra continues to be reported within
continuing operations and is recognised
as assets held for sale under IFRS 5, as at
31 December 2021. Liabilities closely
associated with such assets held for sale have
been recognised as liabilities held for sale
under IFRS 5, as at 31 December 2021.

Our response and results
The following are the primary procedures we performed to
address this key audit matter:
• We evaluated the design and tested the operating

effectiveness of the Group’s controls over the determination
of the timing of the classification of the ekaterra assets and
liabilities as held for sale;

• We assessed the Group’s application of the IFRS 5 criteria to
present the ekaterra assets and liabilities as held for sale by
evaluating compliance with IFRS 5 classification criteria;

• We inspected the terms of the Share Purchase Agreement to
identify the assets and liabilities relating to ekaterra; and
• We assessed the adequacy of Group’s disclosures in respect

of the assets and liabilities held for sale.

We identified the presentation of assets and
liabilities held for sale as a Key Audit Matter as
the application of IFRS 5 has higher complexity
relative to other areas of the audit and
requires additional auditor effort, particularly
in evaluating the timing of when the asset
held for sale criteria has been met. This is
considered to be an area which had a
significant effect on our overall audit strategy
and allocation of resources in planning and
completing our audit.

On 1 January 2021, an intellectual property
swap transaction occurred between the
Company and certain Group entities resulting
in transfer of intellectual property related to
Foods and Refreshment by the Company to
a Group entity in exchange for intellectual
property related to Home Care and Beauty
and Personal Care (HC BPC). Thereafter the
Company transferred the intellectual property
related to HC BPC to another Group entity. The
Directors applied judgement to determine that
the transaction had commercial substance
and therefore was recorded at fair value.

We identified the accounting for the
transaction as a key audit matter due to the
magnitude of the unrealised gain in the
context of the Company Accounts. We spent a
significant amount of time and resources on
the transaction to assess the fair value of the
intangible assets, the interpretation of UK and
Dutch tax law as well as the interpretation of
financial reporting standards.

Our results

The results of our testing were satisfactory and we found the
presentation of assets held for sale to be acceptable.

The following are the primary procedures we performed to
address this key audit matter:
• We assessed the accounting for the transaction considering
the requirements under the applicable financial reporting
standards.

• We involved tax professionals with specialised skills and
knowledge to assist in evaluating the tax impact of the
transaction, based on the applicable laws and regulations.
• We involved valuation professionals with specialised skills
and knowledge to assist in evaluating the methodology
applied to determine the fair value.

• We assessed the adequacy of disclosures in respect of this

transaction in the Company Accounts.

We performed the tests above rather than seeking to rely on any
of the Company's controls because the nature of the balance is
such that we would expect to obtain audit evidence primarily
through the detailed procedures described.

Our results

We found the accounting for the transaction to be acceptable.

In the prior year, we reported key audit matters in respect of uncertain direct tax transfer pricing provisions, valuation of Horlicks Brand acquired
from GSK and accounting for the Unification of Unilever’s Corporate structure. We continue to perform procedures over uncertain direct tax transfer
pricing provisions. However, pursuant to settlements with tax authorities in FY 2020 resulting in a reduction in the value and quantum of the
exposure, we have not assessed this as one of the most significant risks in our current year audit and, therefore, it is not separately identified in
our report this year. The key audit matters in relation to the valuation of Horlicks Brand acquired from GSK and accounting for the Unification of
Unilever’s Corporate structure related to transactions in 2020.

3. Our application of materiality and an overview of the scope of our audit

Materiality
Materiality for the Consolidated Financial Statements as a whole was set at €380 million (2020: €380 million), determined with reference to a
benchmark of Group profit before taxation, of which it represents 4.4% (2020: 4.8%). Materiality for the Company Accounts as a whole was set at
£296 million (2020: £298 million), determined with reference to a benchmark of Company Net Assets, of which it represents 0.4% (2020: 0.4%).

In line with our audit methodology, our procedures on individual account balances and disclosures were performed to a lower threshold,
performance materiality, so as to reduce to an acceptable level the risk that individually immaterial misstatements in individual account balances
add up to a material amount across the financial statements as a whole.

Performance materiality for the Consolidated Financial Statements and the Company Accounts set at 75% (2020: 75%) of materiality for the
financial statements as a whole, which equates to €285 million for the Group (2020: €285 million) and £222 million (2020: £224 million) for the
Company. We applied this percentage in our determination of performance materiality because we did not identify any factors indicating an
elevated level of risk.

We agreed with the Audit Committee that any corrected or uncorrected identified misstatements exceeding €20 million (2020: €20 million) and
£14 million (2020: £15 million) which are identified during the audit of the Consolidated Financial Statements and Company Accounts respectively,
would be reported to them, as well as smaller misstatements that in our view must be reported on qualitative grounds.

Overall scope of our audit
The Group operates through a significant number of legal entities and these form reporting components that are primarily country based. To
provide sufficient coverage over the Group’s key audit matters, we performed audits of 15 components (2020: 15), which are included within ‘Audit
for group reporting purposes’ below, as well as audits of account balances including revenue and the related accounts receivables balances at a
further 22 (2020: 22) components which are included within ‘Audit of account balances’ below. The latter were not individually financially significant
enough to require an audit for group reporting purposes but were included in the scope of our group reporting work in order to provide
additional coverage.

The Group operates centralised operating centres in China, India, Mexico, Philippines and Poland that perform accounting and reporting activities
alongside related controls. Together, these operating centres process a substantial portion of the Group’s transactions. The outputs from the
centralised operating centres are included in the financial information of the reporting components they service and therefore they are not
separate reporting components. Each of the operating centres is subject to specified audit procedures. Further audit procedures are performed at
each reporting component to cover matters not covered at the centralised operating centres and together this results in audits for group reporting
purposes on those reporting components.

FINANCIAL STATEMENTS110

Unilever Annual Report and Accounts 2021

The components within the scope of our work accounted for the following percentages of the Group’s results:

2021

Audits for group reporting purposes

Audits of account balances

Total

2020

Audits for group reporting purposes

Audits of account balances

Total

Number of
components

Group revenue

Total profits and
losses that made
up Group profit
before taxation

Group total assets

54%

23%

77%

52%

26%

78%

47%

22%

69%

50%

25%

75%

72%

11%

83%

72%

80%

The remaining 23% (2020: 22%) of Group revenue, 31% (2020: 25%) of total profits and losses that made up Group profit before taxation and 17%
(2020: 20%) of Group total assets is represented by a significant number of reporting components, none of which individually represented more
than 3% (2020: 3%) of any of Group revenue, total profits and losses that made up Group profit before taxation or Group assets. A substantial
portion of these components utilise the operating centres and are therefore subject to audit procedures performed at these operating centres.
For these components, we performed analysis at an aggregated Group level to re-examine our assessment that there were no significant risks of
material misstatement within these.

The Group audit team instructed component auditors as to the significant areas to be covered, including the key audit matters detailed above and
the information to be reported back. The Group audit team approved the component materialities, which ranged from €4 million to €344 million
(2020: €1 million to €328 million), having regard to the mix of size and risk profile of the Group across the components. The work on components
was performed by component auditors.

In view of the continued restrictions on the movement of people across borders the Group audit team’s planned audit approach involved using
video conferencing to oversee the component auditor work and to hold video discussions with management of selected component locations in
scope of the Group audit. Furthermore, to evaluate the component auditors’ communications and the adequacy of their work, we requested those
component auditors to provide us with remote access to audit workpapers to perform these evaluations, subject to local law and regulations.
In addition, due to the inability to arrange in-person meetings with such component auditors, we increased the use of alternative methods of
communication with them, including through written instructions, exchange of emails and virtual meetings.

The Group audit team held virtual meetings with local management in Brazil, China, France, Germany, India, Indonesia, Italy, Netherlands, UK,
USA, UAE and South Africa (2020: virtual meetings with local management in Brazil, China, France, Germany, India, Indonesia, Italy, Netherlands,
UK and USA). Online meetings were also held with the component auditors in these locations and majority of the other locations in scope for group
reporting. The findings reported to the Group audit team were discussed in more detail with component auditors and any further work required by
the Group audit team was then performed by the component auditors.

The work on 36 of the 37 components (2020: 36 of the 37 components) was performed by component auditors (KPMG member firms). The audit of
the company was performed by the Group audit team.

We were able to rely upon the Group's internal control over financial reporting in all areas of our audit, and where our controls testing supported
this approach, which enabled us to reduce the scope of our substantive audit work.

4. The impact of climate change on our audit

In planning our audit, we considered the potential impacts of risks arising from climate change on the Group’s business and its financial
statements. The Group has set out its targets under its Climate Transition Action Plan (CTAP) to reduce operational emissions by 100% by 2030;
with an interim goal to achieve a 70% reduction by 2025 against a 2015 baseline, to halve the full value chain emissions of its products on a per
consumer use basis by 2030 against a 2010 baseline and to achieve net zero emissions covering Scope 1, 2 and 3 emissions by 2039. Detailed
information is provided in the Strategic Report on page 34 and in the CTAP and TCFD sections on pages 51 to 62.

Whilst the Group has set these targets, in note 1 to the Consolidated Financial Statements the Directors have stated that they have considered the
impact of climate change risks and that they do not believe that there is a material impact on the financial reporting judgements and estimates
and as a result the valuations of the Group’s assets and liabilities have not been significantly impacted by these risks as at 31 December 2021.

As a part of our audit we have performed a risk assessment to determine if the potential impacts of climate change may materially affect the
financial statements and our audit. We did this by making inquiries of management and inspecting internal and external reports in order to
independently assess the climate-related risks and their potential impact. We held discussions with our own climate change professionals to
challenge our risk assessment.

The most likely potential impact of climate risk and plans on these financial statements would be on the forward-looking assessments of long-
term assets.

We have considered the sensitivity of the assumptions used in the impairment testing of goodwill and indefinite-life intangible assets. Given that
the assumptions are not considered a major source of estimation uncertainty, the carrying amounts of these assets in the financial statements are
not considered to be sensitive to the impact of risks arising from climate change. As a result of this, and the relative size of other long-term assets
which could be impacted by climate change risks, we determined that climate related risks did not have a significant impact on our audit and there
is no significant impact of these risks on our key audit matters.

We have also read the Group’s disclosures of climate related information in the Strategic Report and considered consistency with the financial
statements and our audit knowledge.

5. Going concern

The Directors have prepared the Financial Statements on the going concern basis as they do not intend to liquidate the Group or the Company or
to cease their operations, and as they have concluded that the Group’s and the Company’s financial position means that this is realistic. They have
also concluded that there are no material uncertainties that could have cast significant doubt over their ability to continue as a going concern for
at least a year from the date of approval of the financial statements (“the going concern period”).

We used our knowledge of the Group, its industry, and the general economic environment to identify the inherent risks to its business model and
analysed how those risks might affect the Group’s and Company’s financial resources or ability to continue operations over the going concern
period. The risks that we considered most likely to adversely affect the Group’s and the Company’s available financial resources over this
period were:
▪ continued slowdown in the broader macro-economic environment and therefore market growth;
▪
▪ external pressures on gross margin through cost price inflation.

increased global and local competition; and

We also considered realistic second order impacts, such as a major IT data breach and the loss of all material litigation cases which could result in
a rapid reduction of available financial resources. We considered whether these risks could plausibly affect the liquidity in the going concern period
by assessing the degree of downside assumptions that, individually and collectively, could result in a liquidity issue, taking into account the

Unilever Annual Report and Accounts 2021

111

Group’s current and projected cash and facilities and the outcome of their reverse stress testing. We considered whether the going concern
disclosure in note 1 to the financial statements gives a full and accurate description of the Directors’ assessment of going concern.

Our conclusions based on this work:
▪ we consider that the Directors’ use of the going concern basis of accounting in the preparation of the Financial Statements is appropriate;
▪ we have not identified, and concur with the Directors’ assessment that there is not, a material uncertainty related to events or conditions

that, individually or collectively, may cast significant doubt on the Group’s or Company’s ability to continue as a going concern for the going
concern period;

▪ we have nothing material to add or draw attention to in relation to the Directors’ statement on page 106 to the Financial Statements on the
use of the going concern basis of accounting with no material uncertainties that may cast significant doubt over the Group and Company’s
use of that basis for the going concern period, and we found the going concern disclosure on page 106 to be acceptable; and
the related statement under the Listing Rules set out on page 106 is materially consistent with the financial statements and our
audit knowledge.

▪

However, as we cannot predict all future events or conditions and as subsequent events may result in outcomes that are inconsistent with
judgements that were reasonable at the time they were made, the above conclusions are not a guarantee that the Group or the Company will
continue in operation.

6. Fraud and breaches of laws and regulations – ability to detect

Identifying and responding to risks of material misstatement due to fraud
To identify risks of material misstatement due to fraud (“fraud risks”) we assessed events or conditions that could indicate an incentive or pressure
to commit fraud or provide an opportunity to commit fraud. Our risk assessment procedures included:
▪ Enquiring of directors, the audit committee, internal audit and inspection of policy documentation as to the Group’s high-level policies and

procedures to prevent and detect fraud, including the internal audit function, and the Group’s channel for “whistleblowing”, as well as whether
they have knowledge of any actual, suspected or alleged fraud.

▪ Reading Board and audit committee minutes.
▪ Considering remuneration incentive schemes and performance targets for directors.
▪ Using analytical procedures to identify any unusual or unexpected relationships.
▪ Using our own forensic professionals with specialised skills and knowledge to assist us in identifying the fraud risks based on discussions of the

circumstances of the Group.

We communicated identified fraud risks throughout the audit team and remained alert to any indications of fraud throughout the audit. This
included communication from the group to in-scope component audit teams of relevant fraud risks identified at the Group level and request to in-
scope component audit teams to report to the Group audit team any instances of fraud that could give rise to a material misstatement at group.

As required by auditing standards, and taking into account possible pressures to meet profit targets, we performed procedures to address the risk
of management override of controls and the risk of fraudulent revenue recognition. Further detail in respect of Revenue recognition – Discounts is
set out in the key audit matter disclosures in section 2 of this report. We did not identify any additional fraud risks.

In determining the audit procedures we took into account the results of our evaluation and testing of the operating effectiveness of the Group-wide
fraud risk management controls. For further details in respect to the Group-wide risk management controls refer to the report of the Audit
Committee on page 78.

We also performed procedures including:
▪

Identifying manual journal entries to test for all in-scope components based on risk criteria and comparing the identified entries to supporting
documentation.

▪ Evaluating the business purpose of significant unusual transactions.
▪ Assessing significant accounting estimates for bias.

Identifying and responding to risks of material misstatement due to non-compliance with laws and regulations
We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our
general commercial and sector experience, through discussion with the Directors and other management (as required by auditing standards) and
from inspection of the Group’s regulatory and legal correspondence. We discussed with the Directors and other management the policies and
procedures regarding compliance with laws and regulations and we made use of our own forensic professionals with specialised skills and
knowledge to assist us in evaluating the facts and circumstances.

We communicated identified laws and regulations throughout our team and remained alert to any indications of non-compliance throughout the
audit. This included communication from the group to in-scope component audit teams of relevant laws and regulations identified at the Group
level, and a request for in-scope component auditors to report to the group team any instances of non-compliance with laws and regulations that
could give rise to a material misstatement at the Group level.

The potential effect of these laws and regulations on the financial statements varies considerably.

Firstly, the Group is subject to laws and regulations that directly affect the financial statements including financial reporting legislation (including
related companies legislation), distributable profits legislation and taxation legislation and we assessed the extent of compliance with these laws
and regulations as part of our procedures on the related financial statement items.

Secondly, the Group is subject to many other laws and regulations where the consequences of non-compliance could have a material effect on
amounts or disclosures in the financial statements, for instance through the imposition of fines or litigation. We identified the following areas as
those most likely to have such an effect:
▪ Competition legislation (reflecting the Group’s involvement in a number of ongoing investigations by national competition authorities),
▪ Employment legislation (reflecting the Group’s significant and geographically diverse work force).
▪ Health and safety regulation (reflecting the nature of the Group’s production and distribution processes).
▪ Consumer product law such as product safety and product claims (reflecting the nature of the Group’s diverse product base).
▪ Contract legislation (reflecting the Group’s extensive use of trademarks, copyright and patents).
▪ Data privacy (requirements from existing data privacy laws).
▪ Environmental regulation (reflecting nature of the Group’s production and distribution processes).

Auditing standards limit the required audit procedures to identify non-compliance with these laws and regulations to enquiry of the directors and
other management and inspection of regulatory and legal correspondence, if any. Therefore, if a breach of operational regulations is not disclosed
to us or evident from relevant correspondence, an audit will not detect that breach.

Context of the ability of the audit to detect fraud or breaches of law or regulation
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the
financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the
further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely
the inherently limited procedures required by auditing standards would identify it.

In addition, as with any audit, there remained a higher risk of non-detection of fraud, as these may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal controls. Our audit procedures are designed to detect material misstatement. We are not
responsible for preventing non-compliance or fraud and cannot be expected to detect non-compliance with all laws and regulations.

FINANCIAL STATEMENTS112

Unilever Annual Report and Accounts 2021

7. We have nothing to report on the other information

The Directors are responsible for the other information presented in the Unilever Annual Report and Accounts 2021 together with the Financial
Statements. Our opinion on the Financial Statements does not cover the other information and, accordingly, we do not express an audit opinion or,
except as explicitly stated below, any form of assurance conclusion thereon.

Our responsibility is to read the other information and, in doing so, consider whether, based on our financial statements audit work, the
information therein is materially misstated or inconsistent with the Financial Statements or our audit knowledge. Based solely on that work we
have not identified material misstatements in the other information.

Strategic report and Directors’ report
Based solely on our work on the other information:
▪ we have not identified material misstatements in the Strategic report and the Directors’ report;
▪
▪

in our opinion the information given in those reports for the financial year is consistent with the Financial Statements; and
in our opinion those reports have been prepared in accordance with the Companies Act 2006.

Directors’ remuneration report
In our opinion the part of the Directors’ Remuneration Report to be audited has been properly prepared in accordance with the Companies
Act 2006.

Disclosures of emerging and principal risks and longer-term viability
We are required to perform procedures to identify whether there is a material inconsistency between the Directors’ disclosures in respect of
emerging and principal risks and the viability statement, and the financial statements and our audit knowledge.

Based on the knowledge we acquired during our audit, we have nothing material to add or draw attention to in relation to:
▪

the Directors’ confirmation within the Viability Statement on page 45 that they have carried out a robust assessment of the emerging and
principal risks facing the Group, including those that would threaten its business model, future performance, solvency and liquidity;
the Principal Risk Factors disclosures describing these risks and how emerging risks are identified, and explaining how they are being managed
and mitigated; and
the Directors’ explanation in the Viability Statement of how they have assessed the prospects of the Group, over what period they have done so
and why they considered that period to be appropriate, and their statement as to whether they have a reasonable expectation that the Group
will be able to continue in operation and meet its liabilities as they fall due over the period of their assessment, including any related disclosures
drawing attention to any necessary qualifications or assumptions.

▪

We are also required to review the Viability Statement, set out on page 45 under the Listing Rules. Based on the above procedures, we have
concluded that the above disclosures are materially consistent with the financial statements and our audit knowledge.

Our work is limited to assessing these matters in the context of only the knowledge acquired during our financial statements audit. As we cannot
predict all future events or conditions and as subsequent events may result in outcomes that are inconsistent with judgements that were
reasonable at the time they were made, the absence of anything to report on these statements is not a guarantee as to the Group’s and
Company’s longer-term viability.

Corporate governance disclosures
We are required to perform procedures to identify whether there is a material inconsistency between the Directors’ corporate governance
disclosures and the financial statements and our audit knowledge.

Based on those procedures, we have concluded that each of the following is materially consistent with the financial statements and our audit
knowledge:
▪

the directors’ statement that they consider that the annual report and financial statements 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 section of the annual report describing the work of the Audit Committee, including the significant issues that the audit committee considered
in relation to the financial statements, and how these issues were addressed; and
the section of the annual report that describes the review of the effectiveness of the Group’s risk management and internal control systems.

▪

We are required to review the part of Corporate Governance Statement relating to the Group’s compliance with the provisions of the UK Corporate
Governance Code specified by the Listing Rules for our review. We have nothing to report in this respect.

8. We have nothing to report on the other matters on which we are required to report by exception

Under the Companies Act 2006, we are required to report to you if, in our opinion:
▪ adequate accounting records have not been kept by the Company, or returns adequate for our audit have not been received from branches

▪

not visited by us; or
the Company Accounts and the part of the Directors’ Remuneration Report to be audited are not in agreement with the accounting records
and returns; or

▪ certain disclosures of Directors’ remuneration specified by law are not made; or
▪ we have not received all the information and explanations we require for our audit.

We have nothing to report in these respects.

9. Respective Responsibilities

Directors’ responsibilities
As explained more fully in their statement set out on page 106, the Directors are responsible for the preparation of the Financial Statements
including being satisfied that they give a true and fair view. They are also responsible for: such internal control as they determine is necessary to
enable the preparation of Financial Statements that are free from material misstatement, whether due to fraud or error; assessing the Group and
Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and using the going concern basis
of accounting unless they either intend to liquidate the Group or the Company or to cease operations, or have no realistic alternative but to do so.

Auditor’s responsibilities
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement,
whether due to fraud, or error, and to issue our opinion in an auditor’s report. Reasonable assurance is a high level of assurance, but does not
guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists.

Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of the financial statements.

A fuller description of our responsibilities is provided on the FRC’s website at

www.frc.org.uk/auditorsresponsibilities

Unilever Annual Report and Accounts 2021

113

10. The purpose of our audit work and to whom we owe our responsibilities

This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit
work has been undertaken so that we might state to the Company’s members those matters we are required to state to them in an auditor’s report
and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and
the Company’s members, as a body, for our audit work, for this report, or for the opinions we have formed.

Jonathan Mills

(Senior Statutory Auditor)
for and on behalf of KPMG LLP, Statutory Auditor

Chartered Accountants
15 Canada Square
London, E14 5GL
2 March 2022

FINANCIAL STATEMENTS114

Unilever Annual Report and Accounts 2021

Consolidated Financial Statements
Unilever Group
Consolidated income statement

for the year ended 31 December

Turnover

Operating profit

Which includes non-underlying item credits/(charges) of

Net finance costs

Pensions and similar obligations

Finance income

Finance costs

Which includes non-underlying costs of

Non-underlying item net monetary gain/(loss) arising from hyperinflationary
economies

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

Which includes non-underlying item credits/(charges) of

Other income/(loss) from non-current investments and associates

Profit before taxation

Taxation

Which includes tax impact of non-underlying items of

Net profit

Attributable to:

Non-controlling interests

Shareholders’ equity

Combined earnings per share

Basic earnings per share (€)

Diluted earnings per share (€)

Notes

1,3

€ million

2021

52,444

8,702

(934)

(354)

(10)

147

(491)

(74)

191

—

8,556

(1,935)

178

6,621

572

6,049

2.33

2.32

€ million

2020

50,724

8,303

(1,064)

(505)

(9)

232

(728)

(56)

175

—

7,996

(1,923)

126

6,073

492

5,581

2.13

2.12

€ million

2019

51,980

8,708

(1,239)

(627)

(30)

224

(821)

—

176

—

8,289

(2,263)

113

6,026

401

5,625

2.15

2.14

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

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)

Total comprehensive income

Attributable to:

Non-controlling interests

Shareholders’ equity

Notes

15B

€ million

2021

6,621

2020

6,073

2019

6,026

166

1,734

279

1,177

9,977

749

9,228

215

(2,590)

3,836

286

3,550

353

176

(15)

6,569

407

6,162

Note 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 118 to 166, which form an integral part of the consolidated financial statements.

Unilever Annual Report and Accounts 2021

115

Consolidated statement of changes in equity

for the year ended 31 December

€ million

€ million € million

Consolidated statement of changes in equity
31 December 2018
Impact of adopting IFRIC 23
1 January 2019 (restated)
Profit or loss for the period
Other comprehensive income, net of tax:

Gains/(losses) on:

Equity instruments
Cash flow hedges

Remeasurements of defined benefit pension plans
Currency retranslation gains/(losses)

Total comprehensive income
Dividends on ordinary capital
Cancellation of treasury shares(a)
Other movements in treasury shares(b)
Share-based payment credit(c)
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
31 December 2019
Profit or loss for the period
Other comprehensive income, net of tax:

Gains/(losses) on:

Equity instruments
Cash flow hedges

Remeasurements of defined benefit pension plans
Currency retranslation gains/(losses)

Total comprehensive income
Dividends on ordinary capital
Issue of PLC ordinary shares as part of Unification(d)
Cancellation of NV ordinary shares as part of Unification(d)
Other effects of Unification(e)
Movements in treasury shares(b)
Share-based payment credit(c)
Dividends paid to non-controlling interests
Currency retranslation gains/(losses) net of tax
Hedging gain/(loss) transferred to non-financial assets
Net gain arising from Horlicks acquisition(f)
Other movements in equity(g)
31 December 2020
Profit or loss for the period
Other comprehensive income, net of tax:

Gains/(losses) on:

Equity instruments
Cash flow hedges

Remeasurements of defined benefit pension plans
Currency retranslation gains/(losses)

Total comprehensive income
Dividends on ordinary capital
Share capital reduction(h)
Repurchase of shares(i)
Movements in treasury shares(b)
Share-based payment credit(c)
Dividends paid to non-controlling interests
Hedging gain/(loss) transferred to non-financial assets
Other movements in equity(g)
31 December 2021

Called
up share
capital
464
—
464
—

Share
premium
account
129
—
129
—

Unification
reserve
—
—
—
—

Other
reserves

Retained
profit
(15,218) 26,022

Total
11,397

—

(38)

(15,218) 25,984
5,625

—

11,359
5,625

Non-
controlling
interests
720
—
720
401

Total
equity
12,117
(38)
12,079
6,026

—
—
—
—
—
—
(44)
—
—
—
—
—
—
420
—

—
—
—
—
—
—
—
—
—
—
5
—
—
134
—

—
—
—
—
—
—
—
(20)

—
—
—
—
—
—
51
(233)
(146) 73,364
—
—
—
(6)
—
—
—
73,472
—

—
—
—
—
—
—
—
92
—

—
—
—
—
—

—
—
—
—
—
—
—
—
92

—
—
—
—
—

—

(20,626)

—
—
—
—
—
(2)

52,844

—
—
—
—
—
—
—
—
—
—
—
—
—
—
—

—
—
—
—
—
—
—
—

(73,364)

—
—
—
—
—
—
—

(73,364)

25
176
—
(18)
183
—
9,416
64
—
—
—
32
(51)

6,162

25
176
352
(16)

—
—
352
2
5,979
(4,223) (4,223)
(9,372)
(231)
151
—
—
—
(76)

—
(167)
151
—
5
32
(127)

(5,574) 18,212
5,581

—

13,192
5,581

68
62
—

(2,356)
(2,226)

—
—
—
132
220
—
—
—
10
—
(44)

—
—
217
(22) (2,378)

68
62
217

5,776
(4,300) (4,300)

3,550

(51)
253
14
(158)
108
—
—
—
2,930

—
—
—
62
108
—
(6)
10
2,930

(236)

(280)

(7,482) 22,548
6,049

—

15,266
6,049

—

—
—
—
—
—

—
—
—
—
—
—
—
—

147
276
—
1,025
1,448

—
—

—
—
1,728
3
7,780

147
276
1,728
1,028
9,228

(4,458) (4,458)

—

(3,018)

20,626
—
(143)
161
—
—
231
(73,364) (9,210) 46,745

95
—
—
(171)
(82)

(3,018)
(48)
161
—
(171)
147
17,107

4
—
1
1
407
—
—
—
—
(435)
—
—
2
694
492

29
176
353
(15)
6,569
(4,223)
—
(167)
151
(435)
5
32
(125)
13,886
6,073

10
(2)
(2)

78
60
215
(212) (2,590)
3,836
286
(4,300)
—
—
—
—
—
—
—
62
—
108
—
(559)
(559)
(6)
—
12
2
4,848
1,918
(232)
48
17,655
2,389
6,621
572

19
3
6
149
749

166
279
1,734
1,177
9,977

—
—
—
—
—
(503)
(3)
7
2,639

(4,458)
—
(3,018)
(48)
161
(503)
(174)
154
19,746

(a) During 2019, 254,012,896 NV ordinary shares and 18,660,634 PLC ordinary shares were cancelled. The amount paid to repurchase these shares was initially recognised

(b)

(c)

in other reserves and is transferred to retained profit on cancellation.
Includes purchases and sales of treasury shares, other than the share buyback programme and the 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 in 2019 and 2020.
The share-based payment credit relates to the non-cash charge recorded against operating profit in respect of the fair value of share options and awards granted
to employees.

(d) As part of Unification, NV shareholders were issued new PLC ordinary shares, all issued NV shares were cancelled. The impact is recognised in retained profit.
(e)

Includes the reduction of PLC’s share capital following the cessation of the Equalisation Agreement. Prior to Unification, a conversion rate of £1= €5.143 was used in
accordance with the Equalisation Agreement to translate PLC’s share capital. Following Unification, PLC’s share capital has been translated using the exchange rate at
the date of Unification. To reflect the legal share capital of the PLC company, an increase to share premium of €73,364 million and a debit unification reserve for the
same amount have been recorded as there is no change in the net assets of the Group. This debit is not a loss as a matter of law.

(f) Consideration for the Horlicks Acquisition included the issuance of shares in a group subsidiary, Hindustan Unilever Limited, which resulted in a net gain being

recognised within equity. See note 21 for further details.

(g) 2021 includes a hyperinflation adjustment of €280 million and €82 million related to the Welly acquisition. 2020 includes €163 million paid for purchase of the non-

controlling interest in Unilever Malaysia.

(h) Share premium has been adjusted to reflect the legal share capital of the PLC company, which reduced by £18,400 million following court approval on 15 June 2021.
(i)

Repurchase of shares reflects the cost of acquiring ordinary shares as part of the share buyback programme announced on 29 April 2021.

FINANCIAL STATEMENTS

116

Unilever Annual Report and Accounts 2021

Consolidated Financial Statements Unilever Group continued
Consolidated balance sheet

for the year ended 31 December

Notes

€ million

2021

€ million

2020

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

Non-controlling interests

Total equity

Total liabilities and equity

17A

15C

20,330

18,261

10,347

5,119

1,465

1,198

974

18,942

15,999

10,558

2,722

1,474

876

931

57,694

51,502

4,683

5,422

324

3,415

1,156

2,401

17,401

75,095

7,252

14,861

1,365

480

820

4,462

4,939

372

5,548

808

16,157

67,659

4,461

14,132

1,451

547

24,778

20,592

22,881

148

831

1,295

611

4,530

275

30,571

55,349

17,107

2,639

19,746

75,095

22,844

149

1,109

1,326

583

3,166

235

29,412

50,004

15,266

2,389

17,655

67,659

These financial statements have been approved by the Directors.

The Board of Directors
2 March 2022

Unilever Annual Report and Accounts 2021

117

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

Net monetary (gain)/loss 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

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

Notes

€ million

2021

6,621

1,935

(282)

354

8,702

1,763

(47)

(458)

(307)

718

(183)

(61)

161

(53)

10,305

(2,333)

7,972

148

(232)

(1,108)

101

2020

6,073

1,923

(178)

(20)

505

8,303

2,018

680

(587)

1,125

142

(182)

(53)

108

(1)

10,933

(1,875)

9,058

169

(158)

(863)

2019

6,026

2,263

(176)

(32)

627

8,708

1,982

(9)

313

(445)

123

(260)

151

10,641

(2,532)

8,109

146

(210)

(1,316)

Acquisition of businesses and investments in joint ventures and associates

(2,131)

(1,426)

(1,122)

Disposal of businesses, 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 paid

Net change in short-term borrowings

Additional financial liabilities

Repayment of financial liabilities

Capital element of lease rental payments

Repurchase of shares

Other movements on treasury shares
Other financing activities (a)

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

17A

(142)

137

185

(247)

(3,246)

(4,483)

(488)

656

4,748

(3,550)

(464)

(3,018)

—

(500)

(7,099)

(2,373)

5,475

285

3,387

(128)

188

558

(1,481)

(4,279)

(624)

722

3,117

(3,577)

(443)

—

(720)

(5,804)

1,773

4,116

(414)

5,475

177

(160)

164

(68)

(2,237)

(4,209)

(694)

337

5,911

(4,912)

(435)

—

(201)

(464)

(4,667)

1,205

3,090

(179)

4,116

(a) Other financing activities include cash paid for the purchase of non-controlling interests and dividends paid to minority interests.

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 STATEMENTS

118

Unilever Annual Report and Accounts 2021

Notes to the Consolidated Financial
Statements Unilever Group

1. Accounting information and
policies

Basis of consolidation

Group companies included in the consolidated financial statements for
2021 are PLC and all subsidiary undertakings, which are those entities
controlled by 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.

On 29 November 2020, the Unilever Group underwent a reorganisation
so that there were no longer two parent companies, Unilever N.V. ('NV')
and Unilever PLC ('PLC'), but one parent company PLC. This
reorganisation is referred to as 'Unification' in the Group consolidated
financial statements.

Prior to 29 November 2020, the Group operated with two parent
companies, NV and PLC, who together with the group companies
operated as a single economic entity.

Company legislation and accounting standards

The consolidated financial statements have been prepared in
accordance with international financial reporting standards (IFRS)
as issued by the International Accounting Standards Board (IASB),
and UK-adopted international accounting standards. The consolidated
financial statements comply with Companies Act 2006.

These financial statements are prepared under the historical cost
convention unless otherwise indicated.

These financial statements have been prepared on a going
concern basis. 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
Group is well placed to manage its business risks successfully for at
least twelve months from the date of approval of the financial
statements.

Accounting 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’.

Accounting policies are included in the relevant notes to the
consolidated financial statements. These are presented as text
highlighted in grey on pages 118 to 166. The accounting policies
below are applied throughout the financial statements.

Foreign currencies

The consolidated financial statements are presented in euros. The
functional currency of PLC is pound sterling. 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 using the balance sheet exchange rate.
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 PLC is translated to euro using the
historical rate at the date the shares were issued (see note 15B on
page 146).

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
the functional currency of the parent entity, 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.

Hyperinflationary economies

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. 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 of the Group consolidated financial statements for
2021 are:
▪ Total assets are increased by €106 million.
▪ Turnover is increased by €124 million.
▪ Operating profit is reduced by €2 million.
▪ A net monetary loss of €74 million is recognised.

Climate change

In preparing these consolidated financial statements we have
considered the impact of both physical and transition climate change
risks on the current valuation of our assets and liabilities. We do not
believe that there is a material impact on the financial reporting
judgements and estimates arising from our considerations and as
a result the valuations of our assets or liabilities have not been
significantly impacted by these risks as at 31 December 2021. In
concluding, we specifically considered the impact of climate change
on the growth rates and projected cash flows as part of our goodwill
impairment testing (see note 9). As government policies evolve as a
result of commitments to limit global warming to 1.5°C, we will continue
to monitor implications on the valuations of our assets and liabilities
that could arise in future years.

Critical accounting estimates and judgements

The preparation of financial statements requires management to make
estimates and judgements in the application of accounting policies
that affect the reported amounts of assets, liabilities, income and

Unilever Annual Report and Accounts 2021

119

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 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.

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.

• Disclosure of ekaterra assets and liabilities – following the

announcement to dispose of part of our Tea business ('ekaterra'),
management has assessed whether this would meet the criteria for
presentation as a discontinued operation. As the contribution of

ekaterra to the overall Group is approximately 4% of Group turnover
and 3% of total assets, management has concluded that it does not
represent a separate major line of business, nor separate component
of the Group and so should not be presented as a discontinued
operation. ekaterra assets and liabilities have been presented in the
financial statements as held for sale – see note 22.

▪ 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.

▪ Recognition of pension surplus – where there is an accounting surplus

on a defined benefit plan, management uses judgement to
determine whether the Group can realise the surplus through
refunds, reductions in future combinations or a combination of both.

Recent accounting developments adopted by the Group

The Group applied for the first-time amendments to the following standards from 1 January 2021.

Applicable standard
Interest Rate Benchmark
Reform (Phase 2)

Amendments to IFRS 9, IAS
39, IFRS 7, IFRS 4 and IFRS 16

Key requirements
The amendments are applicable when an existing
interest rate benchmark is replaced by another interest
rate benchmark. The amendments provide a practical
expedient that modifications to asset and liability
values as a direct consequence of the interest rate
benchmark reform and made on an economically
equivalent basis (i.e. where the basis for determining
contractual cash flows is the same), can be accounted
for by only updating the effective interest rate.

Additionally, hedge accounting is not discontinued
solely because of the replacement of another interest
rate benchmark. Hedging relationships (and related
documentation) must instead be amended to reflect
modifications to the hedged item, hedging instrument
and hedged risk.

Impact on Group
We do not have significant financial instruments
that refer to an interest rate benchmark so these
amendments have not had a material impact
on Unilever.

All other standards or amendments to standards that have been issued by the IASB and were effective by 1 January 2021 were not applicable or
material to Unilever.

New standards, amendments and interpretations of existing standards that are not yet effective and have not
been early adopted by the Group

IFRS 17 ‘Insurance Contracts’ has been released but is not yet adopted by the Group. The standard is effective from the year ended 31 December
2023 and introduces a new model for accounting for insurance contracts. We have reviewed existing arrangements and concluded that IFRS 17 is
not expected to be material for Unilever.

All other new standards or amendments that are not yet effective that have been issued by the IASB are not applicable or material to Unilever.

FINANCIAL STATEMENTS120

Unilever Annual Report and Accounts 2021

Notes to the Consolidated Financial Statements Unilever Group continued

2. Segment information

Segmental reporting

Beauty & Personal Care

▪ primarily sales of skin cleansing (soap, shower), hair care (shampoo, conditioner, styling), skin care (face,

hand and body moisturisers) and deodorant categories.

Foods & Refreshment

▪ primarily sales of ice cream, savoury (soups, bouillons, seasoning), dressings (mayonnaise, ketchup) and

tea (including ekaterra) categories.

Home Care

Revenue

• primarily sales of fabric care (washing powders and liquids, rinse conditioners) and a wide range of

cleaning products.

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 and are based on the contractual arrangements with each customer. Discounts can either be immediately deducted from
the sales value on the invoice or off-invoice and settled later through credit notes when the precise amounts are known. Rebates are generally
off-invoice. Amounts provided for discounts at the end of a period require estimation; historical data and accumulated experience is used to
estimate the provision using the most likely amount method and in most instances, the discount can be estimated using known facts with a high
level of accuracy. Any differences between actual amounts settled and the amounts provided are not material and recognised in the subsequent
reporting period.

Customer contracts generally contain a single performance obligation and turnover is recognised when control of the products being sold has
transferred to our customer as 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 has control over the inventory.

Our customers have the contractual right to return goods only when authorised by Unilever. At 31 December 2021, 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.

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.

Our segments are comprised of similar product categories. 10 categories (2020: 10; 2019: 9) individually accounted for 5% or more of our revenue in
one or more of the last three years. The following table shows the relevant contribution of these categories to Group revenue for the periods shown:

Category

Fabric

Ice Cream

Skin Cleansing

Hair Care

Savoury

Deodorant

Skin Care

Dressings

Tea*

Home & Hygiene

Other

Segment

Home Care

Foods & Refreshment

Beauty & Personal Care

Foods & Refreshment

Beauty & Personal Care

Foods & Refreshment

Home Care

* Tea includes ekaterra as well as the retained tea business.

2021

14%

13%

11%

10%

11%

2020

14%

13%

12%

11%

2019

15%

13%

10%

12%

11%

Unilever Annual Report and Accounts 2021

121

2. Segment information continued

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

€ million

Notes

Beauty &
Personal Care

Foods &
Refreshment

€ million

Home
Care

€ million

Total

2021

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(a)

Within non-underlying items:

Impairment and other non-cash charges(b)

2020

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(a)

Within non-underlying items:

Impairment and other non-cash charges(b)

2019

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(a)

Within non-underlying items:

Impairment and other non-cash charges(b)

21,901

19,971

10,572

52,444

4,471

271

4,742

621

102

2,937

540

3,477

174

816

103

1,294

123

1,417

309

8,702

934

9,636

191

1,746

249

21,124

19,140

10,460

50,724

4,311

280

4,591

710

2,749

508

3,257

163

946

1,243

276

1,519

362

8,303

1,064

9,367

175

2,018

203

150

21,868

19,287

10,825

51,980

4,520

440

4,960

693

105

2,811

571

3,382

171

902

159

1,377

228

1,605

369

8,708

1,239

9,947

176

1,964

168

310

(a) Other non-cash charges within underlying operating profit include movements in provisions from underlying activities, excluding movements arising from non-

underlying activities.

(b) Other non-cash charges within non-underlying items includes movements in restructuring provisions and movements in certain legal provisions.

FINANCIAL STATEMENTS

122

Unilever Annual Report and Accounts 2021

Notes to the Consolidated Financial Statements Unilever Group continued

2. Segment information continued

The Unilever Group is not reliant on turnover from transactions with any single customer and does not receive 10% or more of its turnover 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 the
Unilever Leadership Executive (ULE).

Turnover and non-current assets for the country of domicile, the United States and India (being the two largest countries outside the home country)
and for all other countries are:

2021

Turnover
Non-current assets(a)

2020

Turnover
Non-current assets(a)

2019

Turnover
Non-current assets(a)

€ million

United
Kingdom

United
States

India

Others

Total

2,443

3,858

9,864

5,618

34,519

52,444

16,692

6,755

22,607

49,912

2,391

3,587

9,363

12,946

4,993

6,264

33,977

50,724

23,633

46,430

2,306

3,891

8,702

13,326

4,964

1,137

36,009

51,980

25,391

43,744

(a) For the purpose of this table, non-current assets include goodwill, intangible assets, property, plant and equipment and other non-current assets as shown on the

consolidated balance sheet. Goodwill is attributed to countries where acquired business operated at the time of acquisition; all other assets are attributed to the
countries where they were acquired.

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.

2021

Turnover

Operating profit

Non-underlying items

Underlying operating profit

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

2020

Turnover

Operating profit

Non-underlying items

Underlying operating profit

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

2019

Turnover

Operating profit

Non-underlying items

Underlying operating profit

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

€ million

Asia/
AMET/RUB

€ million

The
Americas(a)

€ million

Europe

Total

24,264

16,844

11,336

52,444

4,536

297

4,833

(3)

2,696

284

2,980

127

1,470

353

1,823

8,702

934

9,636

191

23,440

16,080

11,204

50,724

4,137

409

4,546

2,723

249

2,973

122

1,443

406

1,848

8,303

1,064

9,367

175

24,129

16,482

11,369

51,980

4,418

439

4,857

(5)

2,683

395

3,078

126

1,607

405

2,012

8,708

1,239

9,947

176

(a) Americas sales in North America were €10,627 million (2020: €10,117 million; 2019: €9,411 million) and in Latin America were €6,217 million (2020: €5,963 million; 2019:

€7,071 million).

The Group's turnover classified by markets are:

Emerging markets

Developed markets

€ million

2021

30,407

22,037

€ million

2020

29,281

21,443

€ million

2019

31,021

20,959

Transactions between the Unilever Group’s geographical regions are immaterial and are carried out on at arm’s length basis.

Unilever Annual Report and Accounts 2021

123

3. Operating costs and non-underlying items

Operating costs

Operating costs include cost of sales, brand and marketing investment and overheads.

(i) Cost of sales

Cost of sales includes the cost of inventories sold during the period and distribution costs. The cost of inventories are raw and packaging
materials and related production costs. Distribution costs are charged to the income statement as incurred.

(ii) Brand and marketing investment

Brand and marketing investment include costs related to creating and maintaining brand equity and brand awareness. This includes media,
advertising production, promotional materials and engagement with consumers. These costs are charged to the income statement as incurred.

(iii) Overheads

Overheads include staff costs associated with sales activities and central functions such as finance, human resources, and research and
development costs. Research and development costs are staff costs, material costs, depreciation of property, plant and equipment, patent
costs and other costs that are directly attributable to research and product development activities. These costs are charged to the income
statement as incurred.

Non-underlying items

These items are relevant to an understanding of our financial performance due to their nature and/or frequency of occurrence.

(i) Non-underlying items within operating profit

These are gains and losses on business disposals, acquisition and disposal-related costs, restructuring costs, impairments and other items
within operating profit classified here due to their nature and/or frequency. 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.

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

These are net monetary gain or loss arising from hyperinflationary economies and significant and unusual items in net finance cost, share of
profit/(loss) of joint ventures and associates and taxation.

Turnover

Cost of sales

of which:

Distribution costs

Production costs

Raw and packaging materials and goods purchased for resale

Other

Gross profit

Selling and administrative expenses

of which:

Brand and marketing investment

Overheads

of which: Research and development(a)

Non-underlying items within operating profit before tax

Operating profit

€ million

2021

52,444

€ million

2020

50,724

€ million

2019

51,980

(30,259)

(28,684)

(29,102)

(3,313)

(3,678)

(3,104)

(3,696)

(3,089)

(3,701)

(21,799)

(20,400)

(20,769)

(1,469)

22,185

(1,484)

22,040

(1,543)

22,878

(12,549)

(12,673)

(12,931)

(6,873)

(5,676)

(847)

(934)

8,702

(7,091)

(5,582)

(800)

(1,064)

8,303

(7,272)

(5,659)

(840)

(1,239)

8,708

(a) From 2021, research and development costs include patent costs of €27 million. The prior year comparators have not been restated. Patent costs in 2020 and 2019 were

€27 million in each year.

Exchange losses within operating costs in 2021 are nil (2020: €45 million; 2019: €41 million).

FINANCIAL STATEMENTS

124

Unilever Annual Report and Accounts 2021

Notes to the Consolidated Financial Statements Unilever Group continued

3. Operating costs and non-underlying items continued

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 on disposal of group companies(b)
Restructuring costs(c)
Impairments(d)
Other(e)

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

Share of gain on disposal of Spreads business in Portugal JV

Interest related to the UK tax audit of intangible income and centralised services

Net monetary gain/(loss) arising from hyperinflationary economies

Tax impact of non-underlying items not in operating profit but within net profit

Taxes related to the reorganisation of our European business

Taxes related to share buyback as part of Unification

Taxes related to the UK tax audit of intangible income and centralised services

Hyperinflation adjustment for Argentina deferred tax

Non-underlying items not in operating profit but within net profit after tax
Non-underlying items after tax(f)

Attributable to:

Non-controlling interest

Shareholders' equity

€ million

2021

(934)

(332)

(632)

(17)

219

(715)

(64)

—

(74)

(41)

—

(29)

(43)

(105)

(820)

(30)

(790)

€ million

2020

(1,064)

(69)

(916)

—

(87)

272

(792)

(36)

—

(56)

(146)

(58)

(30)

(53)

(5)

(182)

(974)

(23)

(951)

€ million

2019

(1,239)

(132)

(1,159)

(18)

—

309

(930)

—

(196)

(175)

—

(21)

(161)

(1,091)

(28)

(1,063)

(a) 2021 includes a charge of €196 million relating to the planned disposal of ekaterra and other acquisition and disposal activities.
(b) 2021 gain relates to several small disposal of brands in Foods and Refreshment. The 2020 gain relates to the disposal of a laundry bar business in Latin America. 2019

includes a gain of €57 million relating to the disposal of Alsa.

(c) Restructuring costs are comprised of various supply chain optimisation projects and organisational change programmes across markets.
(d) 2021 relates to the write down of leased land and building assets. 2019 includes a charge of €18 million relating to an impairment of goodwill for a local business

classified to held for sale.

(e) 2020 includes a charge of €87 million for litigation matters in relation to investigations by national competition authorities including those in Turkey and France.
(f) 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.

Unilever Annual Report and Accounts 2021

125

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
Share-based benefits(a)

Of which: Executive Directors

Other(b)

Non-Executive Directors’ fees

€ million

2021

€ million

2020

(5,062)

(5,051)

(529)

(401)

(161)

(519)

(419)

(108)

€ million

2019

(5,364)

(541)

(334)

(151)

(6,153)

(6,097)

(6,390)

‘000

2021

149

‘000

2020

150

‘000

2019

153

€ million

2021

€ million

2020

€ million

2019

(29)

(10)

(39)

(8)

(31)

(2)

(41)

(28)

(5)

(33)

(6)

(27)

(2)

(35)

(42)

(16)

(58)

(9)

(49)

(2)

(60)

(a) Share-based benefits are expenses recognised for the period. Share-based benefits compensation on a vesting basis is €6 million (2020: €10 million; 2019: €17 million).
(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.

Details of the remuneration of Directors are given in the parts noted as audited in the Directors’ Remuneration Report on pages 84 to 104.

4B. 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 by external consultants. The Group policy is that
the most material plans, representing approximately 86% of the defined benefit liabilities, are formally valued every year. Other material plans,
accounting for a further 10% 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 with assets held in external funds. Benefits are
determined by the plan rules and are linked to inflation in some countries. Our largest plans are in the UK and the Netherlands. In the UK, we
operate a career average defined benefit plan (with a salary limit for benefit accrual) which is closed to new entrants, 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 US. 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 plan 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.

FINANCIAL STATEMENTS

126

Unilever Annual Report and Accounts 2021

Notes to the Consolidated Financial Statements Unilever Group continued

4B. Pensions and similar obligations continued

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 expose the Group to a number of actuarial risks such as investment risk, interest rate risk, longevity risk and, in
certain countries, inflation risk. There are no unusual entity or plan-specific risks to the Group. The plans invest a reducing proportion of assets
in equities and, for risk control, an increasing proportion in liability matching assets (bonds). There are also investments 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 the 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 2021
Other post-
employment
benefit plans

Defined benefit
pension plans

31 December 2020
Other post-
employment
benefit plans

Defined benefit
pension plans

1.8 %

2.6 %

3.2 %

2.5 %

2.7 %

n/a

3.6 %

n/a

3.0 %

n/a

5.1 %

1.3 %

2.2 %

2.9 %

2.1 %

2.3 %

n/a

3.3 %

n/a

3.0 %

n/a

5.1 %

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 after five years. Assumed healthcare cost trend rates have a significant effect on the amounts reported for healthcare plans.

During 2021, changes were made to our discount rate assumption setting methodology to reflect changes made more generally by corporates and
their advisers which resulted in a €200 million higher liability.

For the UK and Netherlands pension plans, representing approximately 70% of all defined benefit pension liabilities, the assumptions used at 31
December 2021 and 2020 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

2021

1.9 %

3.2 %

3.7 %

3.1 %

21.8

23.6

22.8

24.8

2020

1.4%

2.7%

3.3%

2.7%

21.7

23.4

22.7

24.6

2021

1.1%

1.9%

2.4%

1.9%

21.6

23.7

23.5

25.5

2020

0.7%

1.5%

2.0%

1.5%

21.5

23.6

23.4

25.4

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 2021 above have been translated from the following tables:

UK: Standard life expectancy tables Series S3, adjusted to reflect the experience of our plan members analysed as part of the 2019 actuarial
valuation. Future improvements in longevity have been allowed for in line with the core CMI 2018 Mortality Projections Model with a 1% p.a. long-
term improvement rate.
Netherlands: The Dutch Actuarial Society’s AG Prognosetafel 2020 table is used with correction factors (2020) 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 impact from changes to the assumptions of 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.

Unilever Annual Report and Accounts 2021

127

4B. Pensions and similar obligations continued

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)(a)
Net impact on the income statement (before tax)

(a) This includes the impact of interest on asset ceiling.

Notes

€ million

2021

€ million

2020

€ million

2019

(228)

(15)

(190)

(401)

(10)

(411)

(223)

(37)

(203)

(419)

(9)

(428)

(216)

(5)

(2)

(193)

(334)

(30)

(364)

Statement of comprehensive income
Amounts recognised in the statement of comprehensive income on the remeasurement of the net defined benefit liability/asset.

Return on plan assets excluding amounts included in net finance income/(cost)

Change in asset ceiling excluding amounts included in finance 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

2021

1,958

(17)

(4)

342

126

2,405

2020

1,494

246

2019

2,385

(37)

183

(1,414)

(2,138)

(78)

250

(12)

381

Balance sheet
The assets, liabilities and surplus/(deficit) position of the pension and other post-employment benefit plans at the balance sheet date were:

Fair value of assets

Present value of liabilities

Computed net assets/(liabilities)
Irrecoverable surplus(a)

Net pension assets/(liabilities)

Of which in respect of:

Funded plans in surplus:

Liabilities

Assets

Aggregate surplus

Irrecoverable surplus(a)

Pension asset net of liabilities

Funded plans in deficit:

Liabilities

Assets

Pension liability net of assets

Unfunded plans:

Pension liability

€ million 2021
Other post-
employment
benefit plans

Pension plans

€ million 2020
Other post-
employment
benefit plans

Pension plans

26,686

(23,219)

3,467

(50)

3,417

(18,071)

23,240

5,169

(50)

5,119

(4,245)

3,446

(799)

(431)

(424)

—

(424)

—

(39)

(32)

24,023

(23,272)

751

(26)

725

(18,043)

20,790

2,747

(26)

2,721

(4,310)

3,233

(1,077)

(447)

(438)

—

(438)

—

(40)

(32)

(903)

(392)

(919)

(407)

(a) A surplus is deemed recoverable to the extent that the Group is able to 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.

FINANCIAL STATEMENTS

128

Unilever Annual Report and Accounts 2021

Notes to the Consolidated Financial Statements Unilever Group continued

4B. Pensions and similar obligations continued

Reconciliation of change in assets and liabilities
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.

Movements in assets during the year:

1 January

Employee contributions

Settlements
Actual return on plan assets (excluding
amounts in net finance income/charge)
Change in asset ceiling excluding
amounts included in interest expenses
Interest income(a)

Employer contributions

Benefit payments

Other

Currency retranslation

31 December

(a) This includes the impact of interest on asset ceiling.

Movements in liabilities during the year:

UK Netherlands

world

2021 Total

UK Netherlands

world

2020 Total

Rest of

€ million

Rest of

€ million

12,499

5,587

5,920

24,006

12,122

5,522

6,082

23,726

—

(67)

1,092

560

306

1,958

1,109

206

—

181

100

—

(17)

124

222

344

394

—

230

104

—

179

146

282

1,494

436

398

(501)

(159)

(475)

(1,135)

(467)

—

961

—

(47)

166

(47)

1,127

(645)

(166)

(47)

(507)

(1,140)

—

(235)

(880)

14,332

6,099

6,212

26,643

12,499

5,587

5,920

24,006

1 January

Current service cost

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

Other

Currency retranslation

31 December

Rest of

€ million

Rest of

€ million

UK Netherlands

world

2021 Total

UK Netherlands

world

2020 Total

(11,148)

(5,060)

(7,511)

(23,719)

(11,001)

(5,097)

(7,824)

(23,922)

(127)

(4)

—

(1)

—

(97)

(15)

(228)

(15)

(114)

(3)

—

(106)

(37)

(223)

(37)

(161)

(35)

(158)

(354)

(208)

(55)

(182)

(445)

(2)

(6)

(4)

(1)

245

246

225

501

—

(835)

(23)

140

342

(806)

(354)

(254)

(1,414)

159

—

(1)

475

126

1,135

(165)

(1,000)

(67)

467

(44)

609

(6)

166

—

(5)

507

(38)

349

(78)

1,140

(38)

958

(11,453)

(4,937)

(7,260)

(23,650)

(11,148)

(5,060)

(7,511)

(23,719)

Unilever Annual Report and Accounts 2021

129

4B. Pensions and similar obligations continued

Movements in (deficit)/surplus during the year:

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)
Change in asset ceiling, excluding
amounts included in interest expenses

Interest cost
Interest income(a)
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

Other

Currency retranslation

31 December

Rest of

€ million

Rest of

€ million

UK Netherlands

world

2021 Total

UK Netherlands

world

2020 Total

1,351

(127)

—

(1)

—

527

(1,591)

287

1,121

425

(1,742)

(4)

(97)

(228)

(114)

(3)

(106)

—

(15)

—

(37)

(196)

(223)

(37)

1,092

560

306

1,958

1,109

206

179

1,494

—

(161)

181

—

(35)

(17)

(158)

124

(17)

(354)

344

—

(208)

230

—

(55)

(182)

146

(445)

436

(2)

(6)

(4)

(1)

245

246

225

100

—

126

2,879

(23)

140

—

(1)

222

—

342

126

394

—

127

(806)

(354)

(254)

(1,414)

(67)

104

—

(36)

(6)

—

(3)

—

527

(5)

282

—

(17)

114

(1,591)

(78)

398

—

(18)

287

1,162

(1,048)

2,993

1,351

(a) This includes the impact of interest on asset ceiling.

The actual return on plan assets during 2021 was €2,302 million, being €1,958 million of asset returns and €344 million of interest income shown in
the tables above (2020: €1,930 million).

Movements in irrecoverable surplus during the year:

1 January

Interest income

Change in irrecoverable surplus in excess
of interest

Currency retranslations

31 December

UK Netherlands

world

2021 Total

UK Netherlands

world

2020 Total

Rest of

€ million

Rest of

€ million

—

(26)

(2)

(17)

(5)

(50)

(26)

(2)

(17)

(5)

(50)

—

(37)

(1)

(26)

(37)

(1)

(26)

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%

36%

52%

12%

43%

45%

Rest of
world(a)

20%

17%

63%

2021 Total

7 to 21

14%

33%

53%

UK Netherlands

12%

35%

53%

12%

43%

45%

Rest of
world(a)

20%

17%

63%

2020 Total

7 to 22

14%

32%

54%

(a) Rest of world numbers shown are weighted averages by liabilities.

FINANCIAL STATEMENTS

130

Unilever Annual Report and Accounts 2021

Notes to the Consolidated Financial Statements Unilever Group continued

4B. Pensions and similar obligations continued

Plan assets
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.

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:

Total 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

Assets/Fund (Liabilities) that are not
employee benefits

UK Netherlands

14,332

6,099

1,714

352

1,030

332

8,875

6,243

1,160

1,472

424

1,021

381

1,823

—

1,676

271

1,001

404

3,353

1,179

537

1,637

517

—

322

—

Rest of
world

6,255

1,835

569

829

437

3,176

1,396

1,109

671

356

359

421

€ million

31 December 2021

2021 Total

UK Netherlands

26,686

12,499

5,587

€ million

31 December 2020

Rest of
world

5,937

2020 Total

24,023

5,225

1,192

2,860

1,173

15,404

8,818

2,806

3,780

518

1,894

456

2,504

421

4,653

921

2,740

992

5,819

3,292

1,167

1,360

274

835

318

470

—

1,837

1,694

437

894

506

2,766

798

540

1,428

456

—

320

—

506

747

441

3,108

1,367

1,111

630

332

377

370

8,184

1,864

4,381

1,939

11,693

5,457

2,818

3,418

347

1,623

380

1,167

370

Derivatives

154

264

130

144

(15)

259

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 100% for both
interest rate and inflation for the UK plan and 35% for interest rate and 19% 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 cash and insurance contracts
which are also unquoted assets.

Equity securities include Unilever securities amounting to €1 million (0.002% of total plan assets) and €9 million (0.04% of total plan assets) at 31
December 2021 and 2020 respectively. Property includes property occupied by Unilever amounting to €74 million and €29 million at 31 December
2021 and 2020 respectively.

The pension assets above exclude the assets in a Special Benefits Trust amounting to €38 million (2020: €44 million) to fund pension and similar
obligations in the US (see also note 17A on page 157).

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(a)

Change in assumption

Increase by 0.5%

Increase by 1 year

Increase by 1.0%

Change in liabilities

-8 %

7 %

6 %

0 %

Netherlands

-8 %

9 %

5 %

0 %

Total

-8 %

6 %

5 %

3 %

(a) Long-term medical cost inflation only relates to post-retirement medical plans and its impact on these liabilities.

An equivalent decrease in each assumption would have an equal and opposite impact on liabilities.

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.

Unilever Annual Report and Accounts 2021

131

4B. Pensions and similar obligations continued

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(a)

Defined Contribution

Benefits paid by the Company in respect of unfunded plans:

Defined Benefit

Group cash flow in respect of pensions and similar benefits

€ million

2022 Estimate

2021

€ million

2020

€ million

2019

190

215

110

515

286

190

108

584

266

203

132

601

244

193

157

594

(a) Following the conclusion of the 2019 Funding valuation of the US Unicare Pension Plan, the Group contributed $100 million into the plan in 2020. Deficit contributions to

the US Pension Plan are expected to be nil for the following few years.

The Group’s funding policy is to periodically review the contributions made to the plans while taking account of local legislation.

4C. Share-based compensation plans

The fair value of awards at grant date is calculated using observable market price. 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 2021, the Group had share-based compensation plans in the form of performance shares and other share awards.

The numbers in this note include those for Executive Directors shown in the Directors’ Remuneration Report on pages 84 to 104 and those for key
management shown in note 4A on page 125. 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

Performance share plans

€ million

2021

(150)

(11)

(161)

2020

(98)

(10)

(108)

2019

(142)

(9)

(151)

Performance share awards are made in respect of the Management Co-Investment Plan (MCIP) and Performance Share Plan (PSP). Awards for the
Global Share Incentive Plan (GSIP) were last made in February 2018 and vested in February 2021. No further MCIP or GSIP awards will be made. 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 84 to 104).

The MCIP allowed Unilever’s managers to invest up to 100% of their annual bonus (a minimum of 33% and maximum of 67% for Executive Directors)
in shares in Unilever, and to receive a corresponding award of performance-related shares. From 2021, under the PSP, Unilever’s managers receive
annual awards of PLC shares. The performance measures for MCIP and PSP are underlying sales growth, underlying EPS growth, return on invested
capital and sustainability progress index for the Group. MCIP awards made will vest after four years, while PSP awards vest after three years.

A summary of the status of the Performance Share Plans as at 31 December 2021, 2020 and 2019 and changes during the years ended on these
dates is presented below:

Outstanding at 1 January

Awarded

Vested

Forfeited

Outstanding at 31 December

Share award value information

Fair value per share award during the year

2021

Number
of shares

2020

Number
of shares

2019

Number
of shares

11,371,436

11,137,801

13,634,518

7,667,929

4,395,633

4,538,771

(3,425,232)

(3,240,738)

(6,041,011)

(1,295,569)

(921,260)

(994,477)

14,318,564

11,371,436

11,137,801

2021

2020

2019

€47.64

€43.91

€48.22

Additional information
At 31 December 2021, shares in PLC totalling 15,370,746 (2020: 12,283,872) were outstanding in respect of share-based compensation plans of PLC
and its subsidiaries, including North American plans.

At 31 December 2021, the employee share ownership trust held 4,453,244 (2020: 5,884,511) PLC shares and PLC and its subsidiaries held 847,914
(2020: 1,382,155) PLC shares which are held as treasury shares.

FINANCIAL STATEMENTS

132

Unilever Annual Report and Accounts 2021

Notes to the Consolidated Financial Statements Unilever Group continued

4C. Share-based compensation plans continued

The book value of €388 million (2020: €483 million) of the shares held by the trust and by Unilever PLC and its subsidiaries in respect of share-based
compensation plans is eliminated on consolidation by deduction from other reserves. Their market value at 31 December 2021 was €250 million
(2020: €357 million).

Shares held to satisfy awards are accounted for in accordance with IAS 32 ‘Financial Instruments: Presentation’. All differences between the
purchase price of the shares held to satisfy awards granted and the proceeds received for the shares, whether on exercise or lapse, are charged
to reserves.

Between 31 December 2021 and 24 February 2022 (the latest practicable date for inclusion in this report), nil shares were granted, 2,567,252 shares
vested and 211,164 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. This includes interest on lease liabilities which represents the unwind of the discount rate applied to
lease 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)

Interest on lease liabilities
Net gain/(loss) on transactions for which hedge accounting is not applied(b)

On foreign exchange derivatives

Exchange difference on underlying items

Finance income(c)

Pensions and similar obligations

Net finance costs before non-underlying items(d)

Interest related to the UK tax audit of intangible income and centralised
services

Notes

€ million

2021

(501)

(34)

(402)

(72)

(68)

147

(10)

2020

(672)

(32)

(533)

(82)

(25)

275

(300)

232

(9)

(364)

(449)

(354)

(56)

(505)

2019

(821)

(46)

(617)

(100)

(58)

(321)

263

224

(30)

(627)

—

(627)

(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 €(19) million (2020: €(21) million) relating to unwinding of discount on deferred consideration for
acquisitions.

(b) For further details of derivatives for which hedge accounting is not applied, please refer to note 16C.
(c)

Includes an amount of €8 million (2020: €90 million) that relates to interest on tax settlement in Brazil and €7 million (2020: €27 million) related to interest on corporate
income tax refund in India.

(d) See note 3 for explanation of non-underlying items.

Unilever Annual Report and Accounts 2021

133

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 one of two methods, the expected value
method (the sum of the probability weighted amounts in a range of possible outcomes) or the single most likely amount method, depending on
which is expected to better predict the resolution of the uncertainty.

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

2021

€ million

2020

€ million

2019

(2,399)

245

(2,154)

189

219

(2,128)

(154)

(2,282)

344

(19)

359

(1,935)

(1,923)

(2,098)

119

(1,979)

(255)

(59)

(284)

(2,263)

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
Taxes related to the UK tax audit of intangible income and centralised services(b)
Taxes related to the reorganisation of our European business(b)
Hyperinflation adjustment for Argentina deferred tax(b)

Effective tax rate

% 2021

% 2020

% 2019

(2)

(1)

—

(2)

—

(1)

(2)

(1)

—

(1)

—

(2)

—

(2)

—

(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. Uncertain tax provisions
including the related interest and penalties amounted to €858 million (2020: €879 million). In 2020, a provision of €186 million was established in
respect of the tax amortisation of intangible assets, including goodwill, related to Horlicks in India. In 2021, the law was changed to exclude
goodwill from the definition of tax depreciable assets effective 1 April 2020. We are therefore now only providing for the amortisation of other
intangibles, and our expectation is that we will continue to provide for this until the matter is resolved.

The Group's future tax charge and effective tax rate could be affected by several factors, including changes in tax laws and their interpretation,
the implementation of the OECD Pillars 1 and 2, EU and US tax changes, as well as the impact of acquisitions, disposals and restructuring of
our business.

FINANCIAL STATEMENTS

134

Unilever Annual Report and Accounts 2021

Notes to the Consolidated Financial Statements Unilever Group continued

6B. 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;
▪
▪ differences relating to investments in subsidiaries to the extent that it is probable that they will not reverse in the foreseeable future.

the initial recognition of assets or liabilities that affect neither accounting nor taxable profit; and

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 2021 and 2020

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

Lease liability

Right of use asset
Other(a)

€ million

As at

1 January
2021

Income
statement

As at

Other

31 December
2021

31 December
2020

Income
statement

Other

31 December
2020

698

(2,734)

(641)

190

(52)

146

294

(244)

526

(73)

(11)

249

(2)

(16)

(9)

(661)

(654)

726

272

756

(963)

(3,448)

(2,096)

(16)

(27)

(44)

(21)

(600)

172

(60)

166

295

(685)

184

(50)

156

319

(244)

(269)

580

161

(1,692)

219

(1,592)

(3,065)

(1,237)

(97)

(6)

(30)

(4)

373

359

(95)

(96)

698

(661)

(2,734)

(26)

(14)

(34)

(8)

(641)

190

(52)

146

294

(244)

526

(814)

(1,692)

(a) The deferred tax-other includes the recognition of an asset of €345 million (2020: €345 million) relating to the impact of the expected outcome of the Mutual

Agreement Procedure which Unilever applied for following the conclusion of the UK tax audit for the tax years 2011-2018.

At the balance sheet date, the Group had unused tax losses of €4,649 million (2020: €4,808 million) and tax credits amounting to €440 million (2020:
€454 million) available for offset against future taxable profits. Deferred tax assets have not been recognised in respect of unused tax losses of
€4,247 million (2020: €4,246 million) and tax credits of €418 million (2020: €429 million), as it is not probable that there will be future taxable profits
within the entities against which the losses and credits can be utilised. Of these losses, €254 million (2020: €4,195 million) have expiry dates, being
corporate income tax losses in the USA, Korea and China which expire between now and 2041. In 2020 the majority of the €4,195 million figure
related to the Netherlands; in 2021 there has been a change in legislation in the Netherlands and losses can now be carried forward indefinitely.

Deferred tax assets have not been recognised in respect of other deductible temporary differences of €1,651 million (2020: €1,445 million) as it is
not expected they will be utilised. Of these differences, €1,583 million (2020: €1,193 million) relates to limitation on the deduction of interest
expenses. 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 €2,247 million (2020: €2,097 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

Lease liability

Right of use asset

Other

Of which deferred tax to be recovered/(settled) after more than 12 months

€ million

Assets
2021

Assets
2020

Liabilities
2021

Liabilities
2020

Total 2021

Total 2020

322

426

453

404

408

330

(976)

(324)

(654)

300

290

726

698

(3,901)

(3,064)

(3,448)

(2,734)

(66)

(37)

(534)

(604)

(600)

(641)

148

(15)

142

161

(1)

157

(45)

(3)

128

153

172

(51)

(60)

120

137

166

295

190

(52)

146

294

(119)

(128)

(125)

(116)

(244)

131

1,465

1,194

127

1,474

1,230

449

399

580

526

(4,530)

(3,166)

(3,065)

(1,692)

(4,684)

(3,311)

(3,490)

(2,081)

Unilever Annual Report and Accounts 2021

135

6C. Tax on items recognised in equity or other comprehensive income

Income tax is recognised in equity or other comprehensive income for items recognised directly in equity or other comprehensive income.

Tax effects directly recognised in equity or other comprehensive income were as follows:

Movements in 2021 and 2020

Gains/(losses) on:

Equity instruments at fair value through other comprehensive income

Cash flow hedges

Remeasurement of defined benefit pension plans

Currency retranslation gains/(losses)

7. Combined earnings per share

€ million

Tax
(charge)/
credit
2021

Before tax
2021

After tax
2021

Before tax
2020

Tax
(charge)/
credit
2020

After tax
2020

178

291

2,405

1,237

4,111

(12)

166

279

(671)

1,734

250

(27)

(35)

215

(60)

1,177

(2,646)

(2,590)

(755)

3,356

(2,232)

(5)

(2,237)

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 plans by employees.

Underlying earnings per share is calculated as underlying profit attributable to shareholders’ equity divided by the diluted average number of
ordinary shares. 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: PLC

Less treasury shares held by employee share trusts and companies

Average number of shares - used for basic earnings per share

Add dilutive effect of share-based compensation plans

Diluted average number of shares - used for diluted and underlying earnings per share

€

2021

2.33

2.32

2.62

2021

2,629.2

0.0

(29.3)

2,599.9

9.7

2,609.6

€

2020

2.13

2.12

2.48

€

2019

2.15

2.14

2.55

Millions of share units

2020

1,351.1

1,278.1

(8.9)

2,620.3

9.5

2,629.8

2019

1,175.5

1,598.0

(157.0)

2,616.5

10.2

2,626.7

(a)

In the calculation of the weighted average number of share units, NV shares were included only for the period they were issued (until 29 November 2020). Following
Unification, all NV shares were cancelled and the shareholders of NV were issued PLC ordinary shares on a 1:1 ratio. Accordingly, there was no significant impact on the
average number of share units as a result of Unification.

Calculation of earnings

Net profit

Non-controlling interests

Notes

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

€ million

2021

6,621

(572)

6,049

790

2020

6,073

(492)

5,581

951

2019

6,026

(401)

5,625

1,063

6,839

6,532

6,688

FINANCIAL STATEMENTS

136

Unilever Annual Report and Accounts 2021

Notes to the Consolidated Financial Statements Unilever Group continued

8. 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

PLC dividends

NV dividends

€ million

2021

(4,458)

—

(4,458)

€ million

2020

(1,911)

(2,389)

(4,300)

€ million

2019

(1,871)

(2,352)

(4,223)

Four quarterly interim dividends were declared and paid during 2021, totalling £1.48 (2020: £1.45) per PLC ordinary share.

A quarterly dividend of €1,137 million (2020: €1,125 million) was declared on 10 February 2022, to be paid in March 2022; £0.36 per PLC ordinary
share (2020: £0.38). Total dividends declared in relation to 2021 were £1.46 (2020: £1.48) 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.

Goodwill acquired in a business combination is assessed to determine whether new cash generating units are created, and if not, 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.

The Group has eleven cash generating units (CGUs) based on the three Divisions by geography and a Health & Wellbeing CGU. In 2021, a new
CGU has been recognised following the announcement of the separation of ekaterra.

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.

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 exceed ten years.

Movements during 2021

Cost

1 January 2021
Additions through business combinations(a)

Disposal of businesses
Reclassification to held for sale(b)

Additions

Disposals and other movements

Hyperinflationary adjustment

Currency retranslation

31 December 2021

Accumulated amortisation and impairment

1 January 2021

Amortisation/impairment for the year

Disposals and other movements

Currency retranslation

31 December 2021
Net book value 31 December 2021(c)

€ million

Goodwill

Indefinite-life
intangible assets

Finite-life intangible assets

Software

Other

Total

20,118

741

(2)

(534)

—

(18)

1,088

21,489

15,420

1,753

—

(362)

—

863

17,681

2,819

1,074

—

(7)

229

(44)

—

192

—

(3)

—

3,189

1,114

39,431

2,495

(2)

(903)

231

(65)

103

2,183

43,473

(1,176)

(211)

(2,282)

(821)

(4,490)

—

(1)

(1,159)

20,330

—

(222)

(1)

(153)

(52)

(32)

(274)

(187)

(211)

(2,609)

(903)

(4,882)

17,470

580

211

38,591

Unilever Annual Report and Accounts 2021

137

9. Goodwill and intangible assets continued

Movements during 2020

Cost

1 January 2020

Additions through business combinations

Disposal of businesses

Additions

Disposals and other movements

Hyperinflationary adjustment

Currency retranslation

31 December 2020

Accumulated amortisation and impairment

1 January 2020

Amortisation/impairment for the year

Disposals and other movements

Currency retranslation

31 December 2020
Net book value 31 December 2020(c)

€ million

Goodwill

Indefinite-life
intangible assets

Finite-life intangible assets

Software

Other

Total

2,991

1,161

19,246

2,407

(1)

—

(38)

(1,496)

20,118

12,121

4,244

—

(5)

(940)

15,420

—

156

(144)

—

(184)

2,819

(1,179)

(212)

(2,292)

—

(279)

139

150

—

(1,176)

18,942

(31)

—

35,519

6,620

(1)

158

(144)

(43)

(58)

(2,678)

1,074

39,431

(807)

(54)

—

(4,490)

(333)

139

194

(211)

(2,282)

(821)

(4,490)

15,209

537

253

34,941

(a)

Includes the provisional fair value of goodwill and intangibles for acquisitions made in 2021 as well as subsequent changes to the fair value of goodwill and
intangibles for acquisitions made in 2020 where the initial acquisition accounting was provisional at the end of 2020. See note 21 for further details.

(b) Goodwill and intangibles in relation to ekaterra amounting to €899 million have been reclassified to assets held for sale. Please refer to note 22 for further details.
(c) Within indefinite-life intangible assets, there are five existing brands that have a significant carrying value: Horlicks €2,898 million (2020: €2,718), Knorr €1,803 million
(2020: €1,744 million), Paula's Choice €1,660 million (2020: nil), Carver Korea €1,452 million (2020: €1,468 million) and Hellmann’s €1,196 million (2020: €1,112 million).
The Paula's Choice brand was acquired in 2021 and the valuation is provisional.

Impairment

We have tested goodwill and indefinite-life intangible assets for impairment. No impairment was identified.

Significant CGUs

The goodwill and indefinite-life intangible assets held in the CGUs relating to Foods & Refreshment Europe, Foods & Refreshment The Americas,
Foods & Refreshment Asia/AMET/RUB, 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 2021.

Foods & Refreshment Europe(a)
Foods & Refreshment The Americas(a)
Foods & Refreshment Asia/AMET/RUB(a)
Beauty & Personal Care The Americas(b)

Beauty & Personal Care Asia/AMET/RUB

Total Significant CGUs
Others(c)

Total CGUs

€ billion

2021 CGUs

€ billion

2020 CGUs

€ billion

Goodwill

Indefinite-life
intangible assets

Goodwill

Indefinite-life
intangible assets

3.9

3.5

3.9

4.7

1.7

17.7

2.6

20.3

1.7

1.8

4.0

5.0

1.9

14.4

3.1

17.5

4.0

3.4

3.7

3.8

1.6

16.5

2.4

18.9

1.7

1.9

3.7

3.1

1.9

12.3

2.9

15.2

(a) 2020 values contain ekaterra related goodwill and indefinite-life intangible assets. Goodwill of €0.5 billion has been allocated based on the fair value of the respective
CGUs. Goodwill of €0.2 billion is included in Europe, €0.2 billion in The Americas and €0.1 billion in Asia/AMET/RUB. Indefinite-life intangible assets of €0.3 billion are
included in The Americas.

(b) The Paula's Choice Acquisition increased goodwill by €0.6 billion and indefinite-life intangible assets by €1.6 billion in 2021. These values are provisional.
(c)

Included within Others are individually insignificant amounts of goodwill and intangible assets that have been allocated between multiple cash generating units.

Key assumptions

The recoverable amount of each CGU has been calculated based on its value in use, estimated as the present value of projected future cash flows.

The growth rates and margins for the significant CGUs are set out below:

For the year 2021

Longer-term sustainable growth rates

Average near-term nominal growth rates

Average operating margins

Foods &
Refreshment
Europe

Foods &
Refreshment
The Americas

Foods &
Refreshment
Asia/AMET/RUB

Beauty &
Personal Care
The Americas

Beauty &
Personal Care
Asia/AMET/RUB

2.1%

(0.7) %

15%

4.0%

2.6%

14%

5.3%

3.0%

19%

4.0%

1.6%

20%

5.3%

2.7%

23%

FINANCIAL STATEMENTS

138

Unilever Annual Report and Accounts 2021

Notes to the Consolidated Financial Statements Unilever Group continued

9. Goodwill and intangible assets continued

For the year 2020

Longer-term sustainable growth rates

Average near-term nominal growth rates

Average operating margins

Foods &
Refreshment
Europe

Foods &
Refreshment
The Americas

Foods &
Refreshment
Asia/AMET/RUB

Beauty &
Personal Care
The Americas

Beauty &
Personal Care
Asia/AMET/RUB

1.1%

(1.0%)

13%

1.7%

0.1%

15%

3.9%

4.9%

16%

1.7%

2.5%

22%

3.9%

3.4%

22%

Projected cash flows include specific estimates for a period of five years. The growth rates and operating margins used to estimate cash flows for
the first five years are based on past performance and on the Group’s three-year strategic plan, which includes the impact on our business of
climate change and activities we are undertaking to reduce carbon emissions, extended to years four and five.

The estimated cash flows after year five are extrapolated using a longer-term sustainable growth rate, which is determined as the lower of our own
three-year average market growth projection and external forecasts for the relevant market.

In 2021, the projected cash flows are discounted using pre-tax discount rates of between 6.4% and 7.6% (2020: 6.0% and 7.4%). The discount rates
are specific to each CGU and are determined based on the weighted average cost of capital, including a market risk premium.

There are no reasonably possible changes in key assumptions that would cause the carrying amount of a CGU to exceed its recoverable amount.

10. Property, plant and equipment

The Group’s property, plant and equipment is comprised of owned assets (note 10A) and leased assets (note 10B). Property, plant and
equipment is measured at cost including eligible borrowing costs less depreciation and accumulated impairment losses.

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.

Owned assets

Owned assets are initially measured at historical cost. 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)

40 years

leasehold land and buildings

▪
▪ plant and equipment
Leased assets

40 years (or life of lease if less)

2-20 years

The cost of a leased asset is measured as the lease liability at inception of the lease contract and other direct costs less any incentives granted
by the lessor. The Group has not capitalised leases which are less than 12 months or leases of low-value assets. These mainly relate to IT
equipment, office equipment, furniture and fitting and other peripheral items. When a lease liability is remeasured, the related lease asset is
adjusted by the same amount.

Depreciation is provided on a straight-line basis from the commencement date of the lease to the end of the lease term.

Property, plant and equipment

Owned assets

Leased assets

Total

Notes

10A

10B

€ million

2021

8,833

1,514

10,347

2020

8,909

1,649

10,558

Unilever Annual Report and Accounts 2021

139

10A. Owned assets

Movements during 2021

Cost

1 January 2021

Additions through business combinations

Additions

Disposals and other movements

Hyperinflationary adjustment

Reclassification as held for sale

Currency retranslation

31 December 2021

Accumulated depreciation

1 January 2021

Depreciation charge for the year

Disposals and other movements

Hyperinflationary adjustment

Reclassification as held for sale

Currency retranslation

31 December 2021
Net book value 31 December 2021(a)

Includes capital expenditures for assets under construction

(a)

Includes €380 million of freehold land.

€ million

Land and
buildings

4,203

100

(136)

(131)

183

4,266

(1,440)

(137)

(6)

(64)

(1,508)

2,758

€ million

Plant and
equipment

14,305

1,008

(764)

109

(731)

533

Total

18,508

1,108

(900)

155

(862)

716

14,462

18,728

(8,159)

(905)

650

(50)

398

(321)

(8,387)

6,075

881

(9,599)

(1,042)

743

(56)

444

(385)

(9,895)

8,833

974

The Group has commitments to purchase property, plant and equipment of €386 million (2020: €251 million).

Movements during 2020

Cost

1 January 2020

Additions through business combinations

Additions

Disposals and other movements

Hyperinflationary adjustment

Reclassification as held for sale

Currency retranslation

31 December 2020

Accumulated depreciation

1 January 2020

Depreciation charge for the year

Disposals and other movements

Hyperinflationary adjustment

Reclassification as held for sale

Currency retranslation

31 December 2020
Net book value 31 December 2020(a)

Includes capital expenditures for assets under construction

(a)

Includes €347 million of freehold land.

€ million

Land and
buildings

€ million

Plant and
equipment

Total

4,498

122

107

(90)

(18)

(19)

(397)

4,203

15,844

20,342

756

(901)

(27)

(81)

166

863

(991)

(45)

(100)

(1,330)

14,305

(1,727)

18,508

(1,479)

(135)

(8,614)

(1,093)

(10,093)

(1,228)

103

814

654

868

757

(1,440)

(8,159)

(9,599)

2,763

6,146

660

8,909

735

FINANCIAL STATEMENTS

140

Unilever Annual Report and Accounts 2021

Notes to the Consolidated Financial Statements Unilever Group continued

10B. Leased assets

Movements during 2021

Cost

1 January 2021

Additions through business combinations

Additions

Disposals and other movements

Hyperinflationary adjustment

Reclassification as held for sale

Currency retranslation

31 December 2021

Accumulated depreciation

1 January 2021

Depreciation charge for the year

Disposals and other movements

Reclassification as held for sale

Currency retranslation

31 December 2021

Net book value 31 December 2021

Movements during 2020

Cost

1 January 2020

Additions through business combinations

Additions

Disposals and other movements

Hyperinflationary adjustment

Currency retranslation

31 December 2020

Accumulated depreciation

1 January 2020

Depreciation charge for the year

Disposals and other movements

Currency retranslation

31 December 2020

Net book value 31 December 2020

€ million

Land and
buildings

2,639

263

(259)

(18)

(61)

2,667

(1,311)

(307)

177

(53)

(1,461)

1,206

€ million

Land and
buildings

2,874

390

(436)

(3)

(216)

2,639

(1,397)

(315)

300

101

(1,311)

1,328

€ million

Plant and
equipment

768

110

(245)

—

(3)

661

(447)

(123)

233

(18)

(353)

308

Total

3,407

373

(504)

(18)

(64)

130

3,328

(1,758)

(430)

410

(71)

(1,814)

1,514

€ million

Plant and
equipment

827

189

(188)

—

(63)

768

(491)

(142)

150

(447)

321

Total

3,701

579

(624)

(3)

(279)

3,407

(1,888)

(457)

450

137

(1,758)

1,649

Our leases mainly comprise of land and buildings and plant and equipment. The Group leases land and buildings for manufacturing, warehouse
facilities and office space and also sublets some property. Plant and equipment includes leases for vehicles.

The Group has recognised in the income statement, a charge of €96 million (2020: €96 million) for short-term leases and €71 million (2020: €77
million) on leases for low-value assets.

During the year, the Group recognised income of €16 million (2020: €19 million) from sublet properties.

The total cash outflow relating to leases was €535 million (2020: €525 million).

Lease liabilities are shown in note 15 on pages 144 and 147.

11. Other non-current assets

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.

Unilever Annual Report and Accounts 2021

141

11. Other non-current assets continued

Interest in net assets of joint ventures

Interest in net assets of associates
Long-term trade and other receivables(a)
Fair value of biological assets(b)
Other non-current assets(c)

€ million

2021

499

—

415

974

2020

465

391

931

(a) Mainly relates to indirect tax receivables where we do not have the contractual right to receive payment within 12 months.
(b) All biological assets are part of Unilever's global tea business, ekaterra. As such, these have been moved to assets held for sale during 2021.
(c)

Includes direct tax assets, withholding tax assets, interest on tax assets and contingent assets.

Movements during 2021 and 2020
Joint ventures(a)
1 January

Additions

Dividends received/reductions

Share of net profit/(loss)

Currency retranslation

31 December

Associates

1 January

Additions

Dividend received/reductions

Share of net profit/(loss)

Currency retranslation

31 December

€ million

2021

€ million

2020

(171)

176

(32)

(1)

(182)

177

(2)

—

(2)

(a) Our principal joint ventures are Unilever FIMA LDA in Portugal, Binzagr Unilever Distribution in the Middle East, the Pepsi Lipton Tea Partnership in the US and Pepsi

Lipton International Ltd for the rest of the world.

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 164.

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

Total inventories

Provision for inventories

1 January

Charge to income statement

Reduction/(releases)

Currency translations
Others(a)

31 December

€ million

2021

1,598

3,393

4,991

(308)

4,683

2020

1,523

3,223

4,746

(284)

4,462

€ million

2021

284

(56)

308

2020

288

116

(97)

(26)

284

(a) Others include the amount relating to the acquisition/disposal of businesses and transfers.

Inventories with a value of €163 million (2020: €204 million) are carried at net realisable value, this being lower than cost. During 2021, a total
expense of €281 million (2020: €381 million) was recognised in the income statement for inventory write-downs and losses.

In 2021, inventory of €258 million related to ekaterra has been reclassified to assets held for sale, refer to note 22 for further details.

FINANCIAL STATEMENTS

142

Unilever Annual Report and Accounts 2021

Notes to the Consolidated Financial Statements Unilever Group continued

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. Discounts payable to customers are
shown as a reduction in trade receivables when there is a legal right and intent to settle them on a net basis.

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.

Trade and other current receivables

Due within one year

Trade receivables

Prepayments and accrued income

Other receivables

€ million

2021

€ million

2020

3,582

492

1,348

5,422

3,433

423

1,083

4,939

Included within trade receivables are discounts due to our customers of €2,126 million (2020: €2,082 million). Other receivables comprise financial
assets of €354 million (2020: €214 million) and non-financial assets of €994 million (2020: €869 million). Financial assets include supplier and
customer deposits, employee advances and certain derivatives. Non-financial assets mainly consist of reclaimable sales tax of €598 million (2020:
€561 million).

Ageing of trade receivables

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

Total trade receivables

Impairment provision for trade receivables

€ million

2021

3,070

470

124

3,783

(201)

3,582

2020

2,849

481

124

3,626

(193)

3,433

The total impairment provision includes €201 million (2020: €193 million) for current trade receivables, €22 million (2020: €20 million) for other
current receivables and €63 million (2020: €63 million) for non-current trade and other receivables.

Impairment provision for total trade and other receivables

1 January

Charge to income statement

Reduction/releases

Reclassifications

Currency translations

31 December

€ million

2021

276

(31)

(3)

286

2020

321

(68)

(44)

276

Unilever Annual Report and Accounts 2021

143

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; and
▪ 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
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; and
▪
▪ 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.

Trade payables and other liabilities

Current: due within one year

Trade payables

Accruals

Social security and sundry taxes

Deferred consideration

Others

Non-current: due after more than one year

Accruals

Deferred consideration

Others

€ million

2021

8,896

4,429

447

1,045

14,861

152

275

€ million

2020

8,375

4,266

401

1,047

14,132

121

235

Total trade payables and other liabilities

15,136

14,367

Included within trade payables and other liabilities are discounts due to our customers of €1,878 million (2020: €1,770 million).

Included within others are IT and consulting services.

Deferred consideration
At 31 December 2021, the total balance of deferred consideration for acquisitions is €196 million (2020: €164 million), which includes contingent
consideration of €180 million (2020: €140 million). These contingent consideration payments are dependent on acquired businesses achieving
contractually agreed financial targets (mainly relates to cumulative increases in turnover and profit before tax) and fall due up until 2025, with a
maximum contractual amount of €635 million.

Supplier financing arrangements for trade payables
Some of our suppliers elect to factor some of their receivables from the Group with financial institutions. In some instances, we provide suppliers
and/or banks with visibility of invoices approved for payment, which helps them receive cash from the bank before the invoice due date, if they
choose to do so. Payment dates and terms for Unilever do not vary based on whether the supplier chooses to factor their receivable. If a receivable
is purchased by a third-party bank, that third-party bank does not benefit from additional security when compared to the security originally
enjoyed by the supplier. The Group evaluates these arrangements to assess if the payable holds the characteristics of a trade payable or should be
classified as a financial liability. At 31 December 2021 and 31 December 2020, all such liabilities were classified as trade payables.

FINANCIAL STATEMENTS

144

Unilever Annual Report and Accounts 2021

Notes to the Consolidated Financial Statements Unilever Group continued

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.

Share-based compensation

The Group operates a number of share-based compensation plans involving awards of ordinary shares. Full details of these plans are given in
note 4C on pages 131 and 132.

Unification reserve

The Group recognised a separate Unification Reserve within Equity as a result of PLC Share Premium that arose from Unification.

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

An employee share trust and group companies purchase and hold shares to satisfy performance shares granted and other share awards (see
note 4C). The assets and liabilities of the trust and shares held by the trust and group companies are included in the consolidated financial
statements. The book value of shares held is deducted from other reserves, and the trust’s borrowings are included in the Group’s liabilities. The
costs of the trust are included in the results of the Group. The shares held by the trust and group companies 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. When bonds are designated as being part of a
fair value hedge relationship, in those cases 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:
▪
▪ derivative financial liabilities – see note 16 on page 149; and
▪ contingent consideration recognised by an acquirer in a business combination to which IFRS 3 applies. Such contingent consideration is

financial liabilities which the Group has elected to measure at fair value through profit or loss;

subsequently measured at fair value through profit or loss.

Lease liabilities

Lease liabilities are initially measured at the present value of the lease payments that are not yet paid at the start of the lease term. This is
discounted using an appropriate borrowing rate determined by the Group, where none is readily available in the lease contract. The lease
liability is subsequently reduced by cash payments and increased by interest costs. The lease liability is remeasured when the Group assesses
that there will be a change in the amount expected to be paid during the lease term.

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.

Key instruments used by the Treasury department are:
▪ short-term and long-term borrowings;
▪ cash and cash equivalents; and
▪ plain vanilla derivatives, including cross-currency 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.

total equity – retained profit, other reserves, share capital, share premium, non-controlling interests (notes 15A and 15B);

Unilever considers the following components of its balance sheet to be managed capital:
▪
▪ 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 resilience against economic and financial uncertainty while ensuring ample liquidity; and
▪ optimal weighted average cost of capital, given the above constraints.

sufficient flexibility for acquisitions;

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.

Unilever Annual Report and Accounts 2021

15A. Share capital

Unilever PLC
PLC ordinary shares of 31/9 p each(a)
Shares issued to NV shareholders(b)

Unilever Group
Euro equivalent in millions(c)

145

2020

£ million

36.4

45.4

81.8

€ million

2021

£ million

81.8

—

81.8

€ million

(a) At 31 December 2021, 2,629,243,772 of PLC ordinary shares were in issue. No NV shares were in issue, with NV shares and PLC deferred stock cancelled before

Unification in 2020. At 31 December 2020, 2,629,243,772 of PLC ordinary shares were in issue.

(b) As a result of Unification during 2020, the shareholders of NV were issued 1,460,713,122 PLC ordinary shares, and all NV shares in issue were cancelled.
(c) The ordinary share capital of PLC is translated using the conversion rate as at the date of Unification of £1 = €1.121.

For information on the rights of shareholders of PLC see the Corporate Governance report on pages 67 to 77.

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 166.

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

Currency translation

Net gain arising from Horlicks acquisition

Other movements in equity

31 December

€ million

2021

6,616

1,454

(1,212)

(1,231)

5,581

977

1,334

2020

6,173

1,258

(1,127)

(1,139)

4,957

866

374

€ million

2021

(176)

2020

(1,978)

(372)

(3)

326

(131)

—

(328)

(319)

392

192

(1,918)

—

(2,146)

(1,978)

FINANCIAL STATEMENTS

146

Unilever Annual Report and Accounts 2021

Notes to the Consolidated Financial Statements Unilever Group continued

15B. Equity continued

Analysis of other reserves

Fair value reserves - see following table

Currency retranslation of group companies - see following table
Adjustment on translation of PLC's ordinary capital(a)

Capital redemption reserve

Book value of treasury shares - see following table

Repurchase of shares
Other(b)

€ million

Total 2021

Total 2020

Total 2019

502

250

(6,043)

(7,068)

—

(388)

(3,018)

(284)

(9,210)

—

(483)

—

(202)

(7,482)

110

(4,712)

(148)

(703)

—

(158)

(5,574)

(a) Prior to Unification, a conversion rate of £1 =€5.143 was used in accordance with the Equalisation Agreement, which ceased to exist as a result of Unification. The

ordinary share capital of PLC is now translated using the conversion rate at 29 November 2020 of £1 = €1.121. The difference between the conversion rates was released
through other reserves as presented in the 'Other effects of Unification' line in the Statement of Changes in Equity.

(b) Relates primarily to options to purchase non-controlling interest in subsidiaries.

Unilever acquired 62,976,145 of its own shares (2020: nil) through purchases on stock exchanges during the year. Out of the 7,266,666 shares held
as treasury shares in connection with share-based compensation plans and which formed part of other reserves as at 29 November 2020, 5,884,511
shares were transferred to an employee share trust at their carrying value, prior to Unification. The shares held by the employee share trust are
shown as a deduction from other reserves.

At 31 December 2021, 4,453,244 shares were held by employee share ownership trust and 847,914 shares were held by other group companies in
connection with share-based compensation plans. The total number of treasury shares held in connection with share-based compensation plans
at 31 December 2020 was 7,266,666 shares. (See note 4C on pages 131 and 132).

€ million

Treasury shares – movements during the year

1 January

Repurchase of shares

Other purchases and utilisations
31 December(a)

2021

(483)

(3,018)

(3,406)

(a) Shortly before Unification in 2020, 4,523,367 NV and PLC ordinary shares, 892,155 NV NYRSs and 468,989 PLC ADSs held by NV in connection with share-based

compensation plans were transferred to an employee share ownership trust at their carrying value. See note 4C for details.

Currency retranslation reserves – movements during the year

1 January

Currency retranslation of group companies net assets and liabilities during the year

Movement in net investment hedges and exchange differences in net investments in foreign operations

31 December

€ million

2021

(7,068)

176

849

(6,043)

2020

(703)

—

220

(483)

€ million

2020

(4,712)

(1,490)

(866)

(7,068)

Fair value reserves – movements during the year

1 January

Movements in Other comprehensive income, net of tax

Gains/(losses) on equity instruments

Gains/(losses) on cash flow hedges

Hedging gains/(losses) transferred to non-financial assets

31 December

€ million

2021

250

147

276

(171)

502

2020

110

250

Refer to the consolidated statement of comprehensive income on page 114, the consolidated statement of changes in equity on page 115, and
note 6C on page 135.

Remeasurement of defined benefit pension plans net of tax

1 January

Movement during the year

31 December

€ million

2021

(931)

1,734

803

2020

(1,146)

215

(931)

Refer to the consolidated statement of comprehensive income on page 114, the consolidated statement of changes in equity on page 115, note 4B
from pages 125 to 131 and note 6C on page 135.

Unilever Annual Report and Accounts 2021

Currency retranslation gains/(losses) – movements during the year

1 January

Currency retranslation during the year:

Other reserves

Retained profit

Non-controlling interest

31 December

15C. Financial liabilities

Financial liabilities(a)
Bank loans and overdrafts(b)

Bonds and other loans

Lease liabilities

Derivatives
Other financial liabilities(c)

147

€ million

2020

(5,084)

(2,356)

(22)

(212)

€ million

2021

(7,674)

1,025

149

(6,497)

(7,674)

€ million

Current
2021

Non-
Current
2021

383

Total
2021

402

Current
2020

407

Non-
Current
2020

Total
2020

411

6,313

21,308

27,621

3,499

21,086

24,585

365

106

1,284

1,649

171

184

277

380

117

1,391

1,771

257

106

315

223

7,252

22,881

30,133

4,461

22,844

27,305

(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

are covered in notes 13 and 14 respectively.

(b) Bank loans and overdrafts include Nil (2020: €2.6 million) of secured liabilities.
(c)

Includes options and financial liabilities to acquire non-controlling interests in Myanmar, USA, Japan, Italy and Hong Kong refer to note 21.

Reconciliation of liabilities arising from financing activities

Movements in 2021 and 2020

2021
Bank loans and overdrafts(a)
Bonds and other loans(a)
Lease liabilities(b)

Derivatives
Other financial liabilities(a)

Total

2020
Bank loans and overdrafts(a)
Bonds and other loans(a)
Lease liabilities(b)

Derivatives
Other financial liabilities(a)

Total

Non-cash movement

Opening
balance
at
1 January

Cash
movement

Business
acquisi-
tions/
disposals

Foreign
exchange
changes

Fair
value
changes

Other
movements(c)

Closing
balance at
31 December

€ million

(411)

(16)

(2)

—

(24,585)

(1,877)

—

(1,145)

(1,771)

471

(315)

(223)

—

(5)

—

(65)

(3)

(27,305)

(1,422)

(7)

(1,200)

(853)

386

(25,032)

(658)

(1,919)

473

(270)

(183)

—

(1)

—

(27)

—

1,131

142

—

(2)

(28,257)

201

(28)

1,325

—

124

—

161

—

(45)

(15)

(402)

(51)

(27,621)

(279)

(1,649)

(67)

(184)

(277)

(360)

(30,133)

(411)

(36)

(24,585)

(440)

(1,771)

—

(58)

(315)

(223)

(531)

(27,305)

(a) These cash movements are included within the following lines in the consolidated cash flow statement: net change in short-term borrowings, additional financial

liabilities and repayment of financial liabilities. The difference of €39 million (2020: €10 million) represents cash movements in overdrafts that are not included in
financing cash flows.

(b) Lease liabilities cash movement is included within capital element of lease payments in the consolidated cash flow statement. The difference of €7 million (2020: €30

million) represents gain or loss from termination and modification of lease contracts.

(c) Other movements includes financial liabilities of €80 million (2020: nil), classified as held for sale, refer note 22 for further details.

FINANCIAL STATEMENTS

148

Unilever Annual Report and Accounts 2021

Notes to the Consolidated Financial Statements Unilever Group continued

15C. Financial liabilities continued

Analysis of bonds and other loans

Unilever PLC

1.125% Notes 2022 (£)

1.375% Notes 2024 (£)

1.875% Notes 2029 (£)

1.500% Notes 2026 (£)

1.500% Notes 2039 (€)

Commercial Paper (£)

Total PLC

Other group companies

The Netherlands

1.625% Notes 2033 (€)

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 (€)

1.250% Notes 2025 (€)

1.750% Notes 2030 (€)

Commercial Paper (US $)

Switzerland

Other

United States

4.250% Notes 2021 (US $)

5.900% Bonds 2032 (US $)

2.900% Notes 2027 (US $)

2.200% Notes 2022 (US $)

3.500% Notes 2028 (US $)

2.000% Notes 2026 (US $)

3.125% Notes 2023 (US $)

3.000% Notes 2022 (US $)

3.250% Notes 2024 (US $)

3.100% Notes 2025 (US $)

2.600% Notes 2024 (US $)

3.500% Bonds 2028 (US $)

2.750% Bonds 2021 (US $)

3.375% Notes 2025 (US $)

7.250% Bonds 2026 (US $)

6.625% Bonds 2028 (US $)

5.600% Bonds 2097 (US $)

2.125% Notes 2029 (US $)

2.600% Notes 2024 (US $)
1.375% Notes 2030 (US $)(a)
0.375% Notes 2023 (US $)

0.626% Notes 2024 (US $)

2.625% Notes 2051 (US $)
1.750% Notes 2031 (US $)(a)
Commercial Paper (US $)

Other countries

Total other group companies

Total bonds and other loans

€ million

Total 2021

Total 2020

417

298

296

592

647

238

387

276

274

550

646

—

2,488

2,133

793

750

745

697

695

648

646

644

600

598

499

—

499

497

999

995

1,320

—

875

873

750

697

612

484

441

440

439

437

—

307

259

206

743

448

409

441

563

727

793

749

744

697

695

648

645

643

599

598

498

499

498

496

999

994

—

812

809

803

689

641

563

445

406

404

403

404

402

324

283

238

189

683

415

395

405

—

2,370

—

25,133

27,621

1,848

22,452

24,585

(a) 1.375% Notes 2030 (US $) includes €(31) million (2020: €(10) million) and 1.750% Notes 2031 (US $) includes €(16) million (2020: Nil) fair value adjustment following the

fair value hedge accounting of fixed-for-floating interest rate swaps.

Information in relation to the derivatives used to hedge bonds and other loans within a fair value hedge relationship is shown in note 16.

Unilever Annual Report and Accounts 2021

149

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. Ineffectiveness may
occur if the critical terms do not exactly match, or if there is a value adjustment resulting from a change in credit risk (in either the Group or the
counter-party to the derivative) that is not matched by the hedged item. 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. Ineffectiveness may occur if there are changes to the expected timing of the hedged transaction. 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 2021 and 2020. Fair value changes on basis

spread is recorded in a separate account within equity.

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).

The Group’s risk management framework is established to set appropriate risk limits and controls, and to maintain adherence to these limits.

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’s funding strategy was supported by cash delivery from the business, coupled with the proceeds from bond issuances. Surplus cash
balance has been invested conservatively with low-risk counter-parties at maturities of less than six months. In its liquidity assessment, the Group
does not consider any supplier financing arrangements as these arrangements are non-recourse to Unilever and supplier payment dates and
terms for Unilever do not vary based on whether the supplier chooses to use such financing arrangements.

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 2021, Unilever had undrawn revolving 364-day bilateral credit facilities in aggregate of $7,965 million (2020: $7,965 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 2022. In December 2021,
Unilever signed additional undrawn revolving 364-day bilateral credit facilities of €1,500 million.

FINANCIAL STATEMENTS150

Unilever Annual Report and Accounts 2021

Notes to the Consolidated Financial Statements Unilever Group continued

16A. 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:

Derivative contracts – receipts

7,371

100

Derivative contracts – payments

(7,505)

(103)

Undiscounted cash flows

2021

Non-derivative financial liabilities:

Bank loans and overdrafts

Bonds and other loans

Lease liabilities

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:

Commodity derivatives:

Derivative contracts – receipts

Derivative contracts – payments

Total

2020

Non-derivative financial liabilities:

Bank loans and overdrafts

Bonds and other loans

Lease liabilities

Other financial liabilities

Trade payables, accruals and other
liabilities

Deferred consideration

Derivative financial liabilities:

Interest rate derivatives:

€ 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

Net carrying
amount as
shown in
balance
sheet

Total

(389)

(1)

(14)

—

(7)

(411)

(402)

(6,759)

(2,944)

(2,942)

(3,382)

(1,786)

(13,589)

(31,402)

(27,621)

(426)

(106)

(14,319)

(57)

(345)

(33)

(48)

(69)

(276)

(25)

(20)

(91)

(228)

(199)

(12)

(9)

(176)

(488)

(1,939)

(1,649)

—

(363)

(277)

(10)

—

(33)

(14,442)

—

(226)

(196)

(22,056)

(3,440)

(3,368)

(3,830)

(1,972)

(14,117)

(48,783)

(44,587)

815

(811)

492

(38)

(499)

(39)

986

2,439

(39)

(1,043)

(2,469)

—

(7)

—

7,471

(7,608)

—

(1)

(57)

(168)

(235)

—

(1)

(131)

—

(22,187)

(3,425)

(3,375)

(3,824)

(1,966)

(14,174)

(48,951)

(44,822)

(413)

(2)

(1)

—

(1)

(417)

(411)

(3,926)

(2,626)

(2,824)

(2,326)

(3,278)

(13,020)

(28,000)

(24,585)

(442)

(117)

(13,585)

(60)

(352)

(12)

(46)

(12)

(292)

(33)

(15)

(76)

(234)

(23)

(17)

(35)

(187)

(51)

(4)

(8)

(591)

(2,098)

(1,771)

—

(236)

(223)

(32)

(13,699)

—

(191)

(164)

(18,543)

(3,050)

(3,241)

(2,635)

(3,528)

(13,644)

(44,641)

(40,853)

(121)

(113)

(1)

(257)

(158)

(3)

Derivative contracts – receipts

174

1,069

441

877

2,630

Derivative contracts – payments

(134)

(1,148)

(21)

(479)

(19)

(977)

(2,778)

Foreign exchange derivatives:

Derivative contracts – receipts

Derivative contracts – payments

Commodity derivatives:

Derivative contracts – receipts

Derivative contracts – payments

6,163

(6,333)

—

(3)

—

(133)

(79)

—

(38)

—

6,163

(6,333)

—

(3)

(100)

(321)

(418)

Total

(18,676)

(3,129)

(3,222)

(2,673)

(3,518)

(13,744)

(44,962)

(41,271)

The Group has sublet a small proportion of leased properties. Related future minimum sublease payments are €53 million (2020: €63 million).

Unilever Annual Report and Accounts 2021

151

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

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

Net carrying
amount of
related
derivatives(a)

Total

2021

Foreign exchange cash inflows

Foreign exchange cash outflows

Interest rate swaps cash inflows

3,118

(3,073)

1,170

—

530

—

473

—

3,118

(3,073)

896

3,121

Interest rate swaps cash outflows

(1,147)

(464)

(473)

(13)

(923)

(3,033)

Commodity contracts cash inflows

Commodity contracts cash outflows

2020

Foreign exchange cash inflows

Foreign exchange cash outflows

(1)

3,136

(3,205)

—

Interest rate swaps cash inflows

403

1,077

488

436

—

(1)

3,136

(3,205)

849

3,277

(19)

(1)

—

(50)

—

Interest rate swaps cash outflows

(347)

(1,147)

(464)

(473)

(13)

(936)

(3,380)

(221)

Commodity contracts cash inflows

Commodity contracts cash outflows

(3)

—

(3)

(a) See note 16C.

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.

Where the Group uses hedge accounting to mitigate the above risks, it is normally implemented centrally by either the Treasury or Commodity Risk
Management teams, in line with their respective frameworks and strategies. Hedge effectiveness is determined at the inception of the hedge
relationship, and through periodic prospective effectiveness assessments to ensure that an economic relationship continues to exist between the
hedged item and hedging instrument. The Group generally enters into hedge relationships where the critical terms of the hedging instrument
match exactly with the hedged item, meaning that the economic relationship between the hedged item and hedging instrument is evident, so only
a qualitative assessment is performed. When a qualitative assessment is not considered sufficient, for example when the critical terms of the
hedging instrument do not match exactly with the hedged item, a quantitative assessment of hedge effectiveness will also be performed. The
hedge ratio is set on inception for all hedge relationships and is dependent on the alignment of the critical terms of the hedging instrument to the
hedged item (in most instances these are matched, so the hedge ratio is 1:1).

FINANCIAL STATEMENTS

152

Unilever Annual Report and Accounts 2021

Notes to the Consolidated Financial Statements Unilever Group continued

16B. Management of market risk continued

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.

Management policy and
hedging strategy
The Group uses commodity forwards, futures,
swaps and option 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.

The Group also hedges risk components of
commodities where it is not possible to hedge
the commodity in full. This is done with
reference to the contract to purchase the
hedged commodity.

Commodity derivatives are generally
designated as hedging instruments in cash
flow hedge accounting relations. All
commodity derivative contracts are done in
line with approvals from the Global
Commodity Executive which is chaired by the
Unilever Chief Supply Chain Officer (CSCO) or
the Global Commodity Operating Team which
is chaired by the Chief Procurement Officer.

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.

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.

Potential impact of 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 2021, the Group had hedged
its exposure to future commodity purchases
with commodity derivatives valued at
€570 million (2020: €276 million).

Hedges of future commodity purchases
resulted in cumulative gain of €153 million
(2020: losses of €89 million) being reclassified
to the income statement and gain of
€114 million (2020: losses of €66 million)
being recognised as a basis adjustment to
inventory purchased.

(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.

The Group manages the foreign currency risk
by hedging forecasted sales and purchase
transactions that are expected to occur within
a maximum 12-month period through layered
hedging.

At 31 December 2021, the exposure to the
Group from companies holding financial
assets and liabilities other than in their
functional currency amounted to €230 million
(2020: €274 million).

Sensitivity to the risk
A 10% increase in commodity prices as at
31December 2021 would have led to a
€61 million gain on the commodity
derivatives in the cash flow hedge reserve
(2020: €35 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 foreign currencies
against the respective functional currencies
of group companies would have led to
approximately an additional €23 million
loss in the income statement (2020:
€27 million loss).

A 10% weakening of the foreign currencies
against the respective functional currencies
of group companies would have led to an
equal but opposite effect.

As at year end, the Group had the below
notional amount of currency derivatives
outstanding to which cash flow hedge
accounting is applied:

Currency

EUR*

GBP

USD

SEK

CAD

PLN

Others

Total

2021

(922)

(449)

699

(98)

(105)

(54)

(205)

2020

(920)

(414)

588

(100)

(110)

(70)

(176)

(1,134)

(1,202)

* Euro exposure relates to group companies having

non-euro functional currencies.

Unilever Annual Report and Accounts 2021

153

Sensitivity to the risk
Impact on equity – trade-related cash flow
hedges

A 10% strengthening of foreign currencies
against the respective functional currencies
of group companies hedging future trade
cash flows and applying cash flow hedge
accounting, would have led to €113 million
loss (2020: €120 million loss) in equity.

A 10% weakening of the same 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
€303 million (2020: €404 million) loss in the
equity 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 €2,363
million negative retranslation effect (2020:
€2,461 million negative retranslation effect).

A 10% weakening of the euro against all
other 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 1.0 percentage point increase in
floating interest rates on a full-year basis as
at 31 December 2021 would have led to an
additional €77 million of finance cost (2020:
€40 million additional finance costs).

A 1.0 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 1.0 percentage point increase in
interest rates on a full-year basis as at 31
December 2021 would have led to an
additional €3 million credit in equity from
derivatives in cash flow hedge relationships
(2020: €11 million credit).

A 1.0 percentage point decrease in interest
rates on a full-year basis would have led to
an additional €4 million debit in equity from
derivatives in cash flow hedge relationships
(2020: €12 million debit).

16B. Management of market risk continued

Potential impact of risk

Management policy and
hedging strategy

Unilever aims to minimise this currency risk on
the Group’s net investment 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.

Exchange risk related to the principal amount
of the US$ denominated debt either forms part
of hedging relationship itself, or is hedged
through forward contracts.

Unilever’s interest rate management approach
aims for an optimal balance between fixed
and floating-rate interest rate exposures on
expected financial liabilities. The objective of
this approach is to minimise annual
interest costs.

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.

The majority of the Group’s existing interest
rate derivatives are designated as cash flow
hedges and are expected to be effective. The
fair value movement of these derivatives is
recognised in the income statement, along
with any changes in the relevant fair value of
the underlying hedged asset or liability.

Currency risk on the Group’s net investments

The Group is also subject to currency 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 €9.9 billion (2020: €9.2 billion),
of which €5.9 billion (2020: €5.5 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$ net
investment hedges with a nominal value of
€3.0 billion (2020: €4.0 billion) for US$.

At 31 December 2021, the net exposure of the
net investments in foreign currencies amounts
to €23.6 billion (2020: €24.6 billion).

(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.

The Group does not have any material floating
interest-bearing financial assets or any
significant long-term fixed interest-bearing
financial assets. Consequently, the Group’s
interest rate risk arises mainly from financial
liabilities other than lease liabilities.

Taking into account the impact of interest rate
swaps, at 31 December 2021, interest rates
were fixed on approximately 75% of the
expected financial liabilities (excluding lease
liabilities) for 2022, and 70% for 2023 (87% for
2021 and 75% for 2022 at 31 December 2020).

As at 31 December 2021, the Group had USD
3,300 million (2020: USD 3,700 million) of
outstanding cross-currency interest rate
swaps (on which cash flow hedge accounting
is applied).

As at 31 December 2021, the Group had USD
1,350 million (2020: USD 500 million) of
outstanding fixed to float interest rate swaps
(on which fair value hedge accounting is
applied).

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 2021 was 0.7% (2020: 1.6%).

(a) See the weighted average amount of financial liabilities with fixed-rate interest shown in the following table.

FINANCIAL STATEMENTS154

Unilever Annual Report and Accounts 2021

Notes 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:

Current financial liabilities

Non-current financial liabilities

Total financial liabilities

Less: lease liabilities

Financial liabilities (excluding lease liabilities)

Of which:

€ million

2021

(7,252)

(22,881)

(30,133)

(1,649)

(28,484)

€ million

2020

(4,461)

(22,844)

(27,305)

(1,771)

(25,534)

Fixed rate (weighted average amount of fixing for the following year)

(20,787)

(21,561)

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:

€ million

Trade
and other
receivables

Current
financial
assets

Non-Current
financial
assets

Trade
payables
and other
liabilities

Current
financial
liabilities

Non-Current
financial
liabilities

31 December 2021

Foreign exchange derivatives

Fair value hedges

Cash flow hedges

Hedges on the net investment in foreign
operations

Hedge accounting not applied

Interest rate derivatives

Fair value hedges

Cash flow hedges

Hedge accounting not applied

Commodity contracts

Cash flow hedges

Hedge accounting not applied

31 December 2020

Foreign exchange derivatives

Fair value hedges

Cash flow hedges

Hedges on the net investment in foreign
operations

Hedge accounting not applied

Interest rate derivatives

Fair value hedges

Cash flow hedges

Hedge accounting not applied

Commodity contracts

Cash flow hedges

Hedge accounting not applied

—

100

—

161

Total assets

—

(a)

112
(47) (a)

—

(a)

—

(33)

—

(17)

—

(1)

—

—
(61) (a)

—

(24)

—

(2)

—

(39)

(58)

—

289

(51)

(85)

Total liabilities

(99)

(235)

—

(74)

—

(26)

—

(3)

—

(149) (a)

(a)

—

(103)

(58)

—

(10)

(247)

—

(257)

(418)

Total

—

112

(111)

—

(39)

(19)

—

(50)

(149)

133

(10)

(221)

—

(260)

(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.

Total assets

158

Total liabilities

Unilever Annual Report and Accounts 2021

155

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 currently having any 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.

As at 31 December 2021

Derivative financial assets

As at 31 December 2020

Derivative financial assets

Related amounts not set
off in the balance sheet

€ million

Gross amounts of
recognised
financial assets

Gross amounts
of recognised
financial assets
set off in the
balance sheet

Net amounts of
financial assets
presented in the
balance sheet

Financial
instruments

Cash
collateral

received Net amount

401

306

(112)

289

(107)

(27)

155

(148)

158

(91)

(16)

(ii) Financial liabilities
The following financial liabilities are subject to offsetting, enforceable master netting arrangements and similar agreements.

Related amounts not set
off in the balance sheet

€ million

Gross amounts
of recognised
financial
liabilities

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

received Net amount

(347)

(566)

112

148

(235)

107

(418)

—

(128)

(327)

As at 31 December 2021

Derivative financial liabilities

As at 31 December 2020

Derivative financial liabilities

FINANCIAL STATEMENTS

156

Unilever Annual Report and Accounts 2021

Notes 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 typically 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 Group’s 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:
▪ financial assets at 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 contractual cash flows on the repayment of principal or interest (SPPI). A
gain or loss on a debt investment recognised at amortised cost on derecognition 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 contractual cash flows on the
repayment of principal and interest and 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 derecognition, 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.

Unilever Annual Report and Accounts 2021

157

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 2021 and 2020. 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(b)

Other cash equivalents

Other financial assets
Financial assets at amortised cost(c)

Financial assets at fair value through other comprehensive
income(d)

Financial assets at fair value through profit or loss:

Derivatives
Other(e)

Total

€ million

Current Non-current

2021

Total

2021

Current Non-current

2020

2,505

811

3,415

750

329

1,156

4,571

—

208

526

412

1,198

2,505

811

3,415

958

527

128

741

2,354

5,769

2,764

5,548

468

272

808

6,356

—

138

361

356

876

Total

2020

2,764

5,548

606

370

628

1,684

7,232

(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) Short-term deposits typically have maturity of up to 3 months.
(c) Current financial assets at amortised cost include short-term deposits with banks with maturities longer than three months excluding deposits which are part of a
recognised cash management process and loans to joint venture entities. Non-current financial assets at amortised cost include judicial deposits of €157 million
(2020: €101 million).
Included within non-current financial assets at fair value through other comprehensive income are equity investments of €521 million (2020: €356 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.
The fair value movement in 2021 of these equity investments was €174 million (2020: €78 million).

(d)

(e) Current Other Financial assets at fair value through profit or loss include Money market funds, marketable securities and other 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 €38 million (2020:
€44 million), option over non-controlling interest in a subsidiary in Hong Kong of €43 million (2020: €44 million) and investments in a number of companies and
financial institutions in North America, North Asia, South Asia and Europe.

There were no significant changes on account of change in business model in classification of financial assets since 31 December 2020.

There are no financial assets that are designated at fair value through profit or loss, which would otherwise have been measured at fair value
through other comprehensive income.

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

Less: Bank overdraft included in liabilities held for sale

Cash and cash equivalents per cash flow statement

€ million

2021

3,415

(106)

(12)

2020

5,548

(73)

—

3,387

5,475

The remaining €3 billion (or 89%) 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 €83 million (2020: €98 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.

FINANCIAL STATEMENTS

158

Unilever Annual Report and Accounts 2021

Notes to the Consolidated Financial Statements Unilever Group 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 2021, the collateral held by Unilever under such arrangements amounted to €52
million (2020: €18 million), of which €27 million (2020: €16 million) was in cash, and €25 million (2020: €2 million) 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

Financial assets at amortised cost

Financial assets at fair value through other comprehensive income

Financial assets at fair value through profit or loss

Derivatives

Other

Financial liabilities

Bank loans and overdrafts

Bonds and other loans

Lease liabilities

Derivatives

Other financial liabilities

€ million

Fair value

2021

2020

3,415

958

527

128

741

5,769

5,548

606

370

628

7,232

€ million

Carrying
amount

2021

3,415

958

527

128

741

5,769

(402)

(411)

(402)

(29,133)

(26,936)

(27,621)

(1,649)

(1,771)

(1,649)

(184)

(277)

(315)

(223)

(184)

(277)

€ million

Carrying
amount

2020

5,548

606

370

628

7,232

(411)

(24,585)

(1,771)

(315)

(223)

(31,645)

(29,656)

(30,133)

(27,305)

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.

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.

For assets and liabilities which are carried at fair value, the classification of fair value calculations by category is summarised below:

€ million

Notes

Level 1
2021

Level 1
2020

Level 2
2021

Level 2
2020

Level 3
2021

Level 3
2020

€ million
Total fair
value
2021

€ million
Total fair
value
2020

Assets at fair value

Financial assets at fair value
through other

Comprehensive income

17A

518

362

527

370

Financial assets at fair value
through profit or loss :
Derivatives(a)

Other

Liabilities at fair value
Derivatives(b)

Contingent consideration

16C

17A

—

331

16C

—

300

—

289

—

158

—

410

—

328

289

741

158

628

(235)

(418)

—

(180)

(140)

(235)

(180)

(418)

(140)

(a)
(b)

Includes €161 million (2020: €78 million) derivatives, reported within trade receivables, that hedge trading activities.
Includes €(51) million (2020: €(103) million) derivatives, reported within trade payables, that hedge trading activities.

Unilever Annual Report and Accounts 2021

159

18. Financial instruments fair value risk continued

There were no significant changes in classification of fair value of financial assets and financial liabilities since 31 December 2020. There were also
no significant movements between the fair value levels since 31 December 2020.

The impact in 2021 income statement due to Level 3 instruments is a gain of €40 million (2020: loss of €22 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 income statement

Gains and losses recognised in other comprehensive income

Purchases and new issues

Sales and settlements

31 December

€ million

2021

550

190

(62)

748

2020

373

(22)

550

Significant unobservable inputs used in Level 3 fair values

Assets valued using Level 3 techniques include €736 million (2020: €494 million) relating to a number of unlisted investments within Unilever
Ventures companies, none of which are individually material; €115 million (2020: €106 million) of long-term cash receivables under life insurance
policies and €43 million (2020: €51 million) for an option over a non-controlling interest. Valuation techniques used are specific to each asset and
for all assets a change in one or more of the inputs to reasonably possible alternative assumptions would not change the value significantly.

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 2020.

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.

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 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.

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 €736 million (2020: €494 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

Movements during 2021

1 January 2021

Additions through business combinations

Income statement:

Charges

Releases

Utilisation

Currency translation

31 December 2021

€ million

2021

480

611

1,091

2020

547

583

1,130

€ million

Restructuring

264

—

153

(78)

(118)

227

Legal

227

(9)

(60)

223

Brazil
indirect taxes

—

(26)

(2)

Other

565

126

(67)

(58)

584

Total

1,130

344

(180)

(238)

1,091

FINANCIAL STATEMENTS

160

Unilever Annual Report and Accounts 2021

Notes to the Consolidated Financial Statements Unilever Group continued

19. Provisions continued

Restructuring provisions primarily include people costs such as redundancy costs and the 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.

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.

Other includes provisions for indirect taxes in countries other than Brazil, interest on tax provisions and provisions for various other matters. The
timing of utilisation of these provisions is uncertain.

20. Commitments and contingent liabilities

Commitments

Lease commitments are the future cash outflows from the lease contracts which are not recorded in the measurement of lease liabilities. These
include potential future payments related to leases of low-value assets, leases which are less than twelve months, variable leases, extension
and termination options and leases not yet commenced but which we have committed to.

Other commitments principally comprise commitments under contract to purchase materials and services. They do not include commitments to
purchase property, plant and equipment, which are reported in note 10 on pages 138 to 140.

Lease commitments 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

Leases

2021

169

Leases

2020

158

€ million
Other
Commitments

€ million
Other
Commitments(a)

2021

1,233

1,554

501

3,288

2020

844

694

1,556

(a) Other commitments now include additional items, primarily volume commitments that were not included in 2020. The total figure on a comparable basis for 2020 is

€3,530 million (of which €1,150 million was current).

Contingent liabilities

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.

Contingent liabilities arise in respect of litigations 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.

In the case of fiscal matters, the known maximum exposure is the amount included in a tax assessment.

Summary of contingent liabilities

Corporate reorganisation – IPI, PIS and COFINS taxes and penalties

Inputs for PIS and COFINS taxes

Goodwill amortisation

Other tax assessments – approximately 700 cases

Total Brazil Tax

Other contingent liabilities

Total contingent liabilities

€ million

2021

2,549

137

749

3,471

656

4,127

2020

2,040

137

650

2,862

648

3,510

Brazil tax
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 regarding corporate reorganisation. The notice alleges that a 2001 reorganisation of
our local corporate structure was undertaken without a valid business purpose. The 2001 reorganisation was comparable with restructuring 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 between 2017 and 2022, 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 €2,549 million (2020:
€2,040 million).

The Group believes that the likelihood that the Brazilian 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. We expect that two of
our largest tax litigation cases, which represent around €904 million of contingent liabilities, will move from the Administrative to the Judicial
Courts during 2022, although the exact timing is uncertain. When this happens, we will be required to make a judicial deposit or provide a
guarantee in respect of the disputed tax, interest and penalties. The judicial process in Brazil is likely to take a number of years to conclude.

Unilever Annual Report and Accounts 2021

161

Contingent liabilities continued

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 hold provisions 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 136
to 138.

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.

2021

In 2021, the Group completed the business acquisitions and disposals as listed below. 100% of the businesses were acquired unless stated
otherwise. Total consideration for 2021 acquisitions is €2,117 million (2020: €6,337 million for acquisitions completed during that year). In November
2021, Unilever announced that it has entered into an agreement to sell its global tea business with disposal is expected to be completed in the
second half of 2022. Further details can be found in Note 22.

Deal completion date
29 January 2021

Acquired business
Acquired 51% of Welly Health, a producer of bandages and other healthcare-related items. The acquisition helps
to expand Unilever’s existing Health and Wellbeing portfolio.

28 May 2021

2 August 2021

Acquired Onnit Lab Inc. a holistic wellness and lifestyle company based in the US. Onnit complements our
growing portfolio of innovative wellness and supplement brands.

Acquired Paula's Choice Inc., a Prestige Skin Care company based in the U.S. The acquisition strengthens our
presence in Prestige Skin Care, with an established direct to consumer eCommerce business.

Paula's Choice Acquisition
On 2 August 2021, the Group acquired 100% of the shares of Paula's Choice Inc., a U.S. based Prestige Skin Care company. The total consideration
paid was €1,832 million which comprised of €1,818 million cash paid on the completion date and €14 million of deferred consideration. The
provisional fair value of net assets recognised on the balance sheet is €1,223 million. Currently all balances remain provisional as we finalise our
review of the asset valuations. The main assets acquired were brands which were valued using an income approach model by estimating future
cash flows generated by the brand and discounting them to present value using rates in line with a market participant expectation. As part of the
acquisition, goodwill of €609 million has been recognised and which is not deductible for tax purposes. Since the acquisition date, the goodwill
balance has increased by €37 million as a result of foreign exchange effects.

More information related to each major class of assets and liabilities acquired is provided on page 162.

Effect on consolidated income statement

The acquisition deals completed in 2021 have contributed €196 million to Group turnover and €16 million to Group operating profit since the date
of acquisition. If the acquisition deals completed in 2021 had all taken place at the beginning of the year, Group turnover would have been
€52,637 million, and Group operating profit would have been €8,738 million. In 2020, the impact of acquisitions completed in the year was
€476 million to Group turnover and €124 million to Group operating profit. If all of the acquisitions had taken place at the beginning of 2020, Group
turnover for 2020 would have been €51,116 million and Group operating profit would have been €8,371 million.

2020

In 2020 the Group completed the business acquisitions and disposals listed below. In each case (unless otherwise stated), 100% of the businesses
were acquired. For all businesses acquired, the acquisition accounting has been finalised. Subsequent changes to the provisional numbers
published last year are immaterial.

FINANCIAL STATEMENTS162

Unilever Annual Report and Accounts 2021

Notes to the Consolidated Financial Statements Unilever Group continued

21. Acquisitions and disposals continued

Deal completion date
1 April 2020

25 June 2020

30 June 2020

15 July 2020

1 October 2020

Acquired/disposed business
Acquired the health food drinks business of GlaxoSmithKline plc in India and 20 other predominantly Asian
markets (“the Main Horlicks Acquisition”). The acquisition added leading brands such as Horlicks and Boost in
certain markets to the Unilever portfolio, increasing our presence in functional nutrition.

Acquired Vwash, a leading intimate hygiene business in India. The acquisition complements our beauty and
personal care portfolio and increases our presence in fast-growing segments in India.

The Group acquired 82% of GlaxoSmithKline Bangladesh Limited, a health food drink business in Bangladesh.
The Bangladesh Horlicks Acquisition was a separate transaction to the Main Horlicks Acquisition.

Sold the Ice Cream business in Chile to Carozzi.

Acquired Liquid IV, a US-based health-science nutrition and wellness company, known for its portfolio of
electrolyte drink mixes that enhance rapid hydration. This acquisition increases our presence in vitamins,
minerals & supplements.

23 December 2020

Acquired SmartyPants Vitamins, a vitamin, mineral and supplement company based in the US. The acquisition
complements our existing portfolio in functional nutrition.

Effect on consolidated balance sheet

Acquisitions

The following table sets out the overall impact of the Paula’s Choice acquisition and the other acquisitions in 2021 as well as comparative years on
the consolidated balance sheet. The fair values currently used for opening balances of the Paula's Choice acquisition are provisional. These
balances remain provisional due to there being outstanding relevant information in regards to the facts and circumstances that existed as of the
acquisition date and/or where valuation work is still ongoing.

Net assets acquired

Non-controlling interest

Goodwill

Total payment for acquisition

Total consideration

€ million

2021

1,372

€ million
2020(a)

3,857

(14)

(27)

759

2,117

2,507

6,337

€ million

2019

771

(25)

421

1,167

(a)

In 2020, we acquired the Horlicks and Boost Brands from GlaxoSmithKline Consumer Healthcare Limited. Of the net assets acquired, €3,345 million related to brands,
€746 million related to deferred tax liabilities and €2,090 million related to goodwill. The total consideration paid was €5,294 million comprised of €449 million in cash
and €4,845 million in shares of Hindustan Unilever Limited. This resulted in a dilution of Unilever’s interest in Hindustan Unilever Limited from 67.2% to 61.9%.

In 2021, the net assets acquired and total payment for acquisitions consist of:

Intangible assets

Other non-current assets

Trade and other receivables
Other current assets(a)
Non-current liabilities(b)
Current liabilities(c)

Net assets acquired

Non-controlling interest

Goodwill

Total consideration

Of which:

Cash consideration paid

Deferred consideration

Paula's Choice
acquisition

Other
acquisitions

1,584

(385)

(43)

1,223

—

609

1,832

1,818

160

(43)

(13)

149

(14)

150

285

270

€ million
2021

1,744

(428)

(56)

1,372

(14)

759

2,117

2,088

(a) Other current assets include inventories of €29 million, cash of €17 million in Paula's Choice with the remaining €35 million split between cash of €14 million and

inventories of €13 million in Onnit.

(b) Non-current liabilities include deferred tax of €384 million related to Paula’s Choice.
(c) Current liabilities include trade and other payable of €36 million in Paula’s Choice.

Goodwill represents the future value that the Group believes it will obtain through operational synergies and the application of acquired company
ideas to existing Unilever channels and businesses. Detailed information relating to goodwill is provided in note 9 on pages 136 to 138.

Disposals

Total consideration for 2021 disposals is €49 million (2020: €35 million for disposals completed during that year). The following table sets out the
effect of disposals in 2021 and comparative years on the consolidated balance sheet. The results of disposed businesses are included in the
consolidated financial statements up until their date of disposal.

In 2021, we disposed of the tomato business in Greece to Minerva, and the Russian dressings business to the KDV Group.

Unilever Annual Report and Accounts 2021

163

21. Acquisitions and disposals continued

Goodwill and intangible assets

Other non-current assets

Current assets

Trade creditors and other payables

Net assets sold

Profit/(loss) on sale attributable to Unilever

Consideration

Cash

Cash balances of businesses sold

Non-cash items and deferred consideration

€ million

2021

€ million

2020

€ million

2019

(3)

(1)

—

(12)

104

169

168

—

169

22. 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 non-current assets or groups of assets are remeasured in accordance with the Group’s
accounting policies. Subsequently, non-current 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.

Non-current assets and liabilities held for sale are recognised as current on the balance sheet.

In November 2021, Unilever announced that it has entered into an agreement to sell its global Tea business, ekaterra, to CVC Capital Partners Fund
VIII for €4.5 billion on a cash-free, debt-free basis with completion expected in the second half of 2022.

As a result, the assets and liabilities are held for sale as at 31 December 2021. ekaterra includes brands such as PG tips, Pukka, Tazo, Lipton and T2,
with 11 production factories across 4 continents and tea estates in 3 countries.

ekaterra excludes Unilever’s Tea business in India, Nepal and Indonesia as well as Unilever’s interests in the Pepsi Lipton ready-to-drink Tea joint
ventures and associated distribution businesses. ekaterra forms part of the Foods and Refreshment segment across AAR, Europe and Americas.

FINANCIAL STATEMENTS

164

Unilever Annual Report and Accounts 2021

Notes to the Consolidated Financial Statements Unilever Group continued

22. Assets and liabilities held for sale continued

Property, plant and equipment held for sale(b)

€ million

2021

ekaterra

—

€ million

2021
Others(a)

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 current assets

Assets held for sale

Current liabilities

Trade payables and other current liabilities

Current tax liabilities

Financial liabilities due within one year

Provisions

Non-current liabilities

Pension and post-retirement healthcare liabilities

Financial liabilities due after one year

Other non-current liabilities

Deferred tax liabilities

Liabilities held for sale

899

425

329

1,678

258

336

697

2,375

652

718

102

820

—

€ million

2021

Total

901

447

329

1,702

258

336

697

2,401

652

718

102

820

2020

Total

—

(a)
(b)

Includes assets related to the disposal of the Calve and Baltimore brands in Russia.
Includes manufacturing assets held for sale.

On disposal of an asset or disposal group, the associated currency translation difference, including amounts previously reported within equity, is
reclassified to the income statement as part of the gain or loss on disposal. This is estimated to be a €99 million loss.

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.

Joint ventures

The following related party balances existed with joint venture businesses at 31 December:

Related party balances

Sales to joint ventures

Purchases from joint ventures

Receivables from joint ventures

Payables to joint ventures

Loans to joint ventures

Royalties and service fees

€ million

2021

Total

1,060

127

241

2020

Total

1,004

118

255

Significant joint ventures are Unilever FIMA LDA in Portugal, Binzagr Unilever Distribution in the Middle East, the Pepsi Lipton Tea Partnership in the
US and Pepsi Lipton International Ltd for the rest of the world.

Associates

There are no trading balances due to or from associates.

Langholm Capital II was launched in 2009. Unilever has invested €65 million in Langholm II, with an outstanding commitment at the end of 2021 of
€1 million (2020: €2 million). During 2021, Unilever received €32 million (2020: €nil) from its investment in Langholm Capital II.

Unilever Annual Report and Accounts 2021

165

24. Share Buyback

On 29 April 2021 we announced a share buyback programme of up to €3 billion, which was completed on 3 December 2021. The Group has
repurchased 62,976,145 ordinary shares as part of the programme which are held by Unilever as treasury shares. Consideration paid for the
repurchase of shares including transaction costs was €3,018 million which is recorded within other reserves.

25. Remuneration of auditors

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)(c)

Total statutory audit fees

Fees payable to the Group’s auditors for the audit of non-statutory
financial statements(d)
Audit-related assurance services(e)

Other taxation advisory services

Services relating to corporate finance transactions
Other assurance services(f)
All other non-audit services(e)

Total fees payable

€ million

2021

€ million

2020

€ million

2019

—

(a) Of which €5 million was payable to KPMG LLP (2020: €6 million; 2019: €4 million) and nil was payable to KPMG Accountants N.V. (2020: nil; 2019: €1 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 (2020: less than €1

million individually and in aggregate; 2019: less than €1 million individually and in aggregate).
(d) 2021 includes €5 million (2020: €6 million) for the audit of carve-out financial statements of ekaterra.
(e) Amounts paid in relation to each type of service are less than €1 million individually and in aggregate (2020: less than €1 million and in aggregate; 2019: less than €1

million and in aggregate).
2021 includes various services, each less than €1 million individually. 2020 includes €1 million for assurance work on Unification.

(f)

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.

Dividend

On 10 February 2022, Unilever announced a quarterly dividend with the 2021 fourth-quarter results of £0.3602 per PLC ordinary share. The total
value of the announced dividend is €1,137 million.

Organisational model

On 25 January 2022, Unilever announced changes to its organisational model to make it simpler and more category focused. The company will
move away from its current matrix structure and will be organised around five distinct Business Groups: Beauty & Wellbeing, Personal Care, Home
Care, Nutrition, and Ice Cream. Each Business Group will be fully responsible and accountable for their strategy, growth, and profit delivery
globally. We expect the new structure to be fully operational from the middle of the year. All costs related to setting up the new organisation will be
managed within the existing restructuring investment plans of €2 billion across 2021 and 2022.

Debt issuance

On 23 February 2022, Unilever issued £300 million 2.125% notes maturing in 2028, €500 million 0.75% notes maturing in 2026 and €650 million 1.25%
notes maturing in 2031.

FINANCIAL STATEMENTS

166

Unilever Annual Report and Accounts 2021

Notes to the Consolidated Financial Statements Unilever Group continued

27. Significant subsidiaries

The following represents the significant subsidiaries of the Group at 31 December 2021, that principally affect the turnover, profit and net assets of
the Group. The percentage of share capital shown below represents the aggregate percentage of equity capital directly or indirectly held by
Unilever PLC in the company. The companies are incorporated and principally operated in the countries under which they are shown except where
stated otherwise.

Country

Argentina

Australia

Bangladesh

Brazil

Canada

China

Name of company

Unilever de Argentina S.A.

Unilever Australia Limited

Unilever Bangladesh Limited

Unilever Brasil Ltda.

Unilever Canada Inc.

Unilever Services (Hefei) Co. Ltd

Walls (China) Co. Limited

England and Wales

Unilever UK & CN Holdings Limited

England and Wales

Unilever Global IP Ltd

England and Wales

Unilever U.K. Holdings Limited

England and Wales

Unilever UK Limited

England and Wales

Unilever U.K. Central Resources Limited

France

Germany

India

Indonesia

Italy

Mexico

Netherlands

Pakistan

Philippines

Russia

Singapore

South Africa

Switzerland

Thailand

Turkey

Unilever France S.A.S.

Unilever Deutschland Gmbh

Unilever Deutschland Holding Gmbh

Hindustan Unilever Limited

PT Unilever Indonesia Tbk

Unilever Italia Mkt Operations S.R.L.

Unilever de Mexico, S.de R.l. de C.V.

Ekaterra B.V.

ekaterra Group Finance B.V.

ekaterra Group IP Holdings B.V.

Mixhold B.V.

Unilever Finance Netherlands B.V.

Unilever IP Holdings B.V.

Unilever Nederland B.V.

Unilever Europe B.V.

Unilever Nederland Services B.V.

UNUS Holding B.V.

Unilever Pakistan Limited

Unilever Philippines, Inc.

OOO Unilever Rus

Unilever Asia Private Limited

Unilever South Africa (Pty) Limited

Unilever Finance International AG

Unilever Thai Trading Limited

Unilever Sanayi ve Ticaret Turk A.S

United States of America

Conopco, Inc

United States of America

Unilever Capital Corporation

United States of America

Unilever North America Supply Chain Company LLC

United States of America

Unilever United States, Inc

United States of America

Ben & Jerry's Homemade, Inc.

United States of America

Paula's Choice, Inc.

Vietnam

Unilever Vietnam International Company Limited

See pages 176 to 186 for a complete list of subsidiary undertakings, associates and joint ventures.

Shareholding %

100%

61%

100%

62%

85%

100%

99%

100%

Unilever Annual Report and Accounts 2021

167

Company Accounts
Unilever PLC
Income statement

for the year ended 31 December

Turnover

Royalties and services charged out to group companies

Incurred costs and royalties paid

Amortisation of finite-life intangible assets and software

Other (expenses)/income

Operating profit

Net finance costs

Finance income

Finance costs

Income from shares in group companies

Profit/(loss) on disposal of intangible assets

(Impairment)/Reversal of impairment of intangible assets

Profit before taxation

Taxation

Net profit

Statement of comprehensive income

Net profit

Other comprehensive income

Items that will not be reclassified to profit or loss, net of tax:

Remeasurement of defined benefit pension plans net of tax

Items that may be reclassified subsequently to profit or loss, net of tax

Total comprehensive income

Notes

£ million

2021

396

(474)

—

(54)

(29)

(58)

2,421

2,815

—

5,153

(773)

4,380

£ million

2021

4,380

—

4,380

2020

2,281

(2,024)

(11)

(5)

241

(58)

(89)

456

—

(12)

627

(173)

454

£ million

2020

454

—

455

FINANCIAL STATEMENTS

168

Unilever Annual Report and Accounts 2021

Statement of changes in equity

1 January 2020

Profit or loss for the period

Other comprehensive income net of tax:

Remeasurement of defined benefit pension plan net of tax

Total comprehensive income

Dividends on ordinary capital
Issuance of shares(a)
Other movements in treasury shares(a)

Other movements in equity

31 December 2020

Profit or loss for the period

Other comprehensive income net of tax:

Remeasurement of defined benefit pension plan net of tax

Total comprehensive income

Dividends on ordinary capital

Issuance of shares
Share capital reduction(b)
Repurchase of shares(c)

Cancellation of treasury shares
Other movements in treasury shares(d)

Other movements in equity

31 December 2021

£ million

Called up
Share capital

Share
premium
account

Capital
redemption
reserve

Other
reserves

Retained
profit

Total equity

—

65,431

—

65,525

—

(18,400)

—

(271)

—

(271)

—

(2,581)

—

7,071

454

—

455

7,216

454

—

455

(1,698)

—

5,828

4,380

65,477

(271)

—

71,179

4,380

—

4,380

(3,841)

—

18,400

—

(16)

—

(2,581)

—

(16)

47,125

(2,794)

24,751

69,179

(a) As part of Unification, the shareholders of N.V. were issued PLC ordinary shares, and all NV shares in issue were cancelled and treasury stock held by Unilever N.V. was

transferred to Unilever PLC.

(b) On 15 June 2021, the High Court of Justice of England and Wales approved the reduction of share premium by an amount of £18,400 million which has led to a

decrease in share premium and a corresponding increase in the amount of profit retained.

(c) During 2021, Unilever PLC repurchased 62,976,145 PLC ordinary shares (2020: nil). Consideration paid for the repurchase of these shares including transaction costs was

£2,581 million (2020: nil) which was initially recorded in other reserves.

(d) At 31 December 2021, 4,453,244 (2020: 5,884,511) treasury shares are held at an employee share ownership trust and nil shares (2020: 50,000) shares were held by PLC.

Unilever Annual Report and Accounts 2021

169

Balance sheet

as at 31 December

Assets

Non-current assets

Intangible assets

Investments in subsidiaries

Other non-current assets

Deferred tax assets

Pension assets

Current assets

Trade and other current receivables

Total assets

Liabilities

Current liabilities

Trade payables and other current liabilities

Financial liabilities

Non-current liabilities

Financial liabilities

Provisions

Total liabilities

Equity

Shareholders’ equity

Called up share capital

Share premium account

Capital redemption reserve

Other reserves

Retained profit

Total liabilities and shareholders’ equity

The financial statements on pages 167 to 175 were approved by the Board of Directors on 2 March 2022.

On behalf of the Board of Directors

A Jope

G Pitkethly

2 March 2022

Chief Executive Officer

Chief Financial Officer

£ million

Notes

2021

2020

—

76,057

1,537

—

146

73,798

1,578

77,596

75,533

154

77,750

6,483

550

7,033

1,536

1,538

8,571

47,125

(2,794)

24,751

69,179

77,750

1,770

77,303

4,196

—

4,196

1,926

1,928

6,124

65,525

(271)

5,828

71,179

77,303

FINANCIAL STATEMENTS

170

Unilever Annual Report and Accounts 2021

Statement of cash flows

For the year ended 31 December

Net profit

Taxation

Net finance costs

Impairment of intangibles

(Profit)/loss on disposal of Intangible asset

Income from share in group companies

Operating profit

Amortisation

Changes in working capital

Trade and other current receivables

Trade payables and other current liabilities

Cash flow from operating activities

Income tax paid

Net cash flow from operating activities

Interest received

Investment in subsidiaries

Purchase of intangible assets

Loans given to subsidiaries

Dividends from subsidiaries

Net cash flow from investing activities

Dividends paid on ordinary share capital

Interest paid

Additional financial liabilities

Repayment of financial liabilities

Repurchase of shares

Other movements in treasury shares

Net cash flow from financing activities
Net increase/(decrease) in current account(a)

Net increase/(decrease) in cash and cash equivalents

Cash and cash equivalents at the beginning of the year

Cash and cash equivalents at the end of the year

£ million

Notes

2021

4,380

773

—

(2,815)

(2,421)

(54)

—

3,912

1,616

2,296

3,858

(28)

3,830

—

2,421

2,450

(3,841)

(58)

400

(200)

(2,581)

—

2020

454

173

—

(456)

241

1,174

2,683

(1,509)

1,426

(84)

1,342

—

(42)

—

456

445

(1,698)

(89)

—

(6,280)

(1,787)

—

(a) Unilever PLC does not have cash and cash equivalents. Instead, Unilever PLC has a current account with Unilever UK Central Resources Limited and Unilever UK Central

Resources Limited makes and collects payments on behalf of Unilever PLC.

Unilever Annual Report and Accounts 2021

171

Notes to the Company Accounts
Unilever PLC

Accounting information and policies

Basis of preparation

Critical accounting estimates and judgements

The Company accounts of PLC are prepared on the going concern basis
and in accordance with International Financial Reporting Standards
(IFRS) as issued by the International Accounting Standards Board (IASB),
and UK-adopted international accounting standards. The Company
accounts comply with Companies Act 2006.

The accounts are prepared under the historical cost convention, except
for the revaluation of financial assets classified as ‘fair value through
other comprehensive income’ or ‘fair value through profit or loss’, as
well as derivative financial instruments, which are reported in
accordance with the accounting policies set out below.

Unilever PLC is included within the consolidated financial statements of
the Group. The consolidated financial statements of the Group are
prepared in accordance with IFRS.

Accounting policies

The accounting policies of PLC Company Accounts are the same as the
Unilever Group, refer to pages 118 and 119, except for the accounting
policies included below.

Foreign currency
The Company’s functional and presentational currency is pound
sterling. Transactions in foreign currencies are translated to the
Company’s functional currency at the foreign exchange rate ruling at
the date of the transaction. Monetary assets and liabilities
denominated in foreign currencies at the balance sheet date are
retranslated to the functional currency at the foreign exchange rate
ruling at that date. Non-monetary assets and liabilities that are
measured in terms of historical cost in a foreign currency are translated
using the exchange rate at the date of the transaction. Non-monetary
assets and liabilities denominated in foreign currencies that are stated
at fair value are retranslated to the functional currency at foreign
exchange rates ruling at the date the fair value was determined.
Foreign exchange differences arising on translation of monetary assets
and liabilities are recognised in the income statement.

Turnover
Turnover excludes value added tax and includes royalties and service
fees received from group companies. Royalty income from brand and
technology licence arrangements is recognised at the time sales are
made by group companies. Revenue from services is recognised over
time based on the usage of these services by group companies.

Operating profit
The operating profit is stated after deducting the costs that are mainly
related to the royalties and delivered services. Expenses are allocated
to the period in which they relate.

Investment in subsidiaries
Shares in group companies are stated at cost less any amounts written
off to reflect an impairment.

Financial guarantees
Where PLC enters into financial guarantee contracts to guarantee the
indebtedness of other companies within its group, they consider these
to be insurance arrangements and account for them as such. In this
respect, PLC treats the guarantee contracts as a contingent liability
until such time as it becomes probable that it will be required to make a
payment under the guarantee. IFRS 17 ‘Insurance Contracts’ has been
released but is not yet adopted by the Company. The standard is
effective from the year ended 31 December 2023 and introduces a new
model for accounting for insurance contracts. We are currently
assessing the impact of this new standard on this accounting policy.

Capital Redemption Reserve
The nominal value of shares cancelled is transferred from share capital
to the capital redemption reserve.

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 periodically 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 and estimates are what management believe
have the most significant effect on the amounts recognised in the PLC
Company Accounts as indicated below:

On 1 January 2021, a swap transaction of intellectual property rights
occurred between PLC, Unilever Global IP Limited and Unilever IP
Holdings B.V. (IP Swap) where :
▪ PLC transferred its intellectual property related to Foods and

Refreshment to Unilever IP Holdings B.V. and in exchange received
intellectual property related to Home Care and Beauty and Personal
Care (HC BPC). Accordingly, PLC derecognised £139 million of
intangible assets, recognised the acquired intellectual property at a
fair value of £2,954 million and an unrealised gain in the income
statement of £2,815 million for the difference. A deferred tax charge
of £702 million was also recognised.

▪ PLC then transferred the intellectual property related to HC and BPC
to Unilever Global IP Limited. For this transfer, PLC derecognised the
intangible assets of £2,961 million and deferred tax liability of £702
million with a corresponding increase in the investment in Unilever
Global IP Limited for the net amount.

The IP swap had economic substance and therefore the acquired
intellectual property is recognised at fair value. Management used
judgement to estimate the fair value and employed the Relief from
Royalty method. The key assumptions included revenue growth,
remaining useful life, arm’s length royalty rate and discount rate.

1. Turnover

Royalties (point in time)

Services (over time)

Turnover

£ million

2021

111

285

396

2020

562

1,719

2,281

The significant reduction in turnover in 2021 is due to the transfer of
intellectual property to subsidiaries (including the swap transaction
described in note 4) which has resulted in reduced royalty income. In
addition, the ongoing transfer of service contracts to other group
companies has resulted in a decline in service turnover.

2. Income from shares in group companies

Dividends received from shares in Group
undertakings

£ million

2021

2020

2,421

456

FINANCIAL STATEMENTS

172

3. Taxation

Current tax

Current year

Double taxation relief

Adjustments in respect of prior years

Deferred tax

Current year

Change in tax rate

Adjustments in respect of prior years

£ million

2021

2020

(39)

(133)

—

(22)

(61)

(718)

(712)

(67)

(175)

(5)

Tax (charge)/credit on profits on ordinary
activities

(773)

(173)

The current UK corporate tax rate is 19% (2020: 19%). In the 3rd of March
2021 UK Budget, it was announced that the UK rate of corporation tax
will increase from 19% to 25% effective from 1 April 2023. The change
received Royal Ascent on 10 June 2021 and therefore has been applied
to these accounts for deferred tax purposes.

4. Intangible assets

Cost

At 1 January 2020

Additions

Disposals

At 31 December 2020

Additions
Disposals(a)
At 31 December 2021

Amortisation and
impairment

At 1 January 2020

Amortisation and impairment
for the year

At 31 December 2020
Amortisation and impairment
for the year

£ million

Disposals

2021

5,153

2020

627

(979)

(119)

At 31 December 2021
Net book value at 31
December 2021
Net book value at 31
December 2020

Unilever Annual Report and Accounts 2021

£ million

£ million
Indefinite-
life
intangible
assets

Finite-life
intangible
assets

Total

268

(56)

254

2,954

102

(53)

2,696

166

—

(3)

163

258

(2,787)

(421)

(3,208)

—

(85)

(23)

(108)

(23)

(108)

—

108

—

108

—

146

Reconciliation of tax expense

Profit/(loss) for the year
Tax using the UK corporation tax rate of 19%
(2020: 19%)

Tax effects of:

Income not subject to tax (primarily tax-
exempt dividends)

Non-deductible expenses

Effects of tax rates in foreign jurisdictions

Permanent differences - other

(Under)/over provided in prior years
Impact of change in tax rate on deferred tax
balances

Total tax expense

(773)

(173)

460

(2)

(64)

(171)

(20)

(13)

(57)

—

(72)

(a) On 1 January 2021, a swap transaction of intellectual property
occurred between PLC, Unilever Global IP Limited and Unilever IP
Holdings B.V.in which PLC transferred its intellectual property related to
Foods and Refreshment to Unilever IP Holdings B.V. and in exchange
received intellectual property related to Home Care and Beauty and
Personal Care (HC BPC). Accordingly, PLC derecognised £139 million of
intangible assets and recognised the acquired intellectual property at a
fair value of £2,954 million which was then transferred to Unilever
Global IP Limited, along with the remainder intellectual property in
PLC’s books. For this transfer, PLC has derecognised intangible assets of
£2,961 million and deferred tax liability of £702 million and increased
the investment in Unilever Global IP Limited by the net amount of
£2,259 million.

Unilever Annual Report and Accounts 2021

173

5. Investments in subsidiaries

7. Trade and other current receivables

Cost

At 1 January 2020

At 31 December 2020

Additions

Disposals

At 31 December 2021

Impairment losses

At 1 January 2020

At 31 December 2020

At 31 December 2021

Net book value at 31 December 2021

Net book value at 31 December 2020

£ million

8,370

73,803

2,259

—

76,062

(5)

76,057

73,798

Amounts due from group companies(c)

£ million

31 Dec 2021

31 Dec 2020

154

1,770

are repayable on demand. Other amounts are interest-free and settled
monthly.

PLC does not consider the fair value of amounts due from group
companies to be significantly different from their carrying values. As
these are amounts due from other entities within the Group, PLC has
estimated the expected credit losses to be immaterial. Our historical
experience of collecting these balances supported by the level of
default confirms that the credit risk is low.

8. Trade payables and other current liabilities

The increase in investments in subsidiaries relates to transfer of
intangible assets to Unilever Global IP Limited. See note 4 for
more details.

Investments include the subsidiary company Hindustan Unilever Limited
(HUL), with a cost of £2,197 million (2020: £2,197 million). The shares of
HUL are listed on the Bombay Stock Exchange and have a market value
of £26,195 million (2020: £26,789 million) as at 31 December 2021.
Information on the non-controlling interest in HUL is given in note 15B of
the consolidated financial statements.

Investments in subsidiaries comprise equity shares of group companies.
These investments only generate cash inflows in combination with other
assets within the group. Accordingly cash inflows are not independent
at any level below the cash generating units (CGUs) used for group
impairment testing purposes. There have been no impairments
recorded against the group CGUs at the end of the reporting periods
and therefore there is no indication that any of the investments in
subsidiaries would be subject to impairment.

6. Other non-current assets

Loans to group companies(b)

£ million

31 Dec 2021

31 Dec 2020

1,537

1,578

(b) Loans to group companies are interest-bearing at market rates and are

unsecured and repayable on demand.

PLC does not consider the fair value of loans to group companies to be
significantly different from their carrying values. As these are amounts
due from other entities within the Group, PLC has estimated the
expected credit losses to be immaterial. Our historical experience of
collecting these balances supported by the level of default confirms
that the credit risk is low.

Loans from group companies(d)
Amounts owed to group companies(d)
Taxation and social security

Accruals and deferred income

£ million

31 Dec 2021

31 Dec 2020

3,000

3,447

3,000

1,070

102

6,483

4,196

(d) Amounts due to group companies are mainly interest-bearing amounts that
are repayable on demand. Other amounts are interest-free and settled
monthly. Loans from group companies are all interest-bearing at market rates
and are unsecured, repayable on demand and supported by
formal agreements.

9. Financial liabilities

Current
Bonds and other loans(e)

Non-current
Bonds and other loans(e)
Total

£ million

31 Dec 2021

31 Dec 2020

550

1,536

2,086

1,926

(e) This includes £350 million 1.125% note (year-end amortised cost £350 million),
£250 million 1.375% note (year-end amortised cost £250 million), £250 million
1.875% note (year-end amortised cost £248 million), £500 million 1. 5% note
(year-end amortised cost £497 million) and £650 million 1. 5% note (year-end
amortised cost £542 million) maturing in 2022, 2024, 2029, 2026 and
2039 respectively.

The fair value of the bonds at 31 December 2021 was £1,965 million
(2020: £2,124 million).

10. Capital and funding

The Company’s capital and funding strategy is described in note 15 of
the consolidated financial statements.

10A. Called up share capital
The called up share capital amounting to £82 million at 31 December
2021 (31 December 2020: £82 million) consists of 2,629,243,772 (2020:
2,629,243,772) ordinary shares.

Information on the called up and paid up capital is given in note 15A of
the consolidated financial statements.

FINANCIAL STATEMENTS

174

Unilever Annual Report and Accounts 2021

10B. Share premium account

10E. Profit appropriation

1 January

Change during the year:

£ million

2021

65,525

2020

Profit for the year(h)
Dividends(i)

Issuance of ordinary shares

—

65,431

To profit retained

£ million

2021

4,380

2020

454

(2,855)

(1,292)

1,525

(838)

Decrease due to share capital reduction

(18,400)

31 December

47,125

65,525

Share premium is the excess of the consideration received over the
nominal value of the shares issued.

On 15 June 2021, the High Court of Justice of England and Wales
approved the reduction of share premium by an amount of £18,400
million which has led to a decrease in share premium and a
corresponding increase in the amount of profit retained.

10C. Other reserves
Other reserves relate to treasury shares and shares held in trust.

Treasury shares

1 January

Change during the year:

Acquired as part of Unification

Repurchase of shares

Utilisations and transfer of shares

31 December

£ million

2021

(2)

2020

—

(2,581)

(2)

—

(2)

During 2021, as part of a share buyback programme, Unilever PLC
repurchased 62,976,145 ordinary shares which are held as treasury
shares. Consideration paid for the repurchase including transaction
costs was £2,581 million which is recorded within other reserves.

PLC holds 62,976,145 (31 December 2020: 50,000) of its own ordinary
shares. These were held as treasury shares within other reserves.

Shares held in trust

1 January

Change during the year:

Transferred from NV

Other purchases and utilisations

£ million

2021

(269)

—

2020

(269)

—

31 December

(213)

(269)

PLC holds 4,453,244 (2020: 5,884,511) of its own ordinary shares via the
employee share ownership trust.

10D. Retained profit

1 January
Profit for the year(f)

Cancellation of shares

Other movements
Dividends paid(g)

31 December

£ million

2021

5,828

4,380

—

2020

7,071

454

—

(16)

(3,841)

(1,698)

24,751

5,828

Increase due to share capital reduction

18,400

(h) Profit for the year includes £2,815 million pertaining to unrealised gain on
swap/disposal of intangible assets with group companies as explained in
note 4.

(i) The dividend to be paid in March 2022 (see note 16) is not included in the 2021

dividend amount.

11. Treasury and risk management

Financial assets and liabilities in the Company's balance sheet
comprise amounts due from and due to group companies, loans due
from and due to group companies and bonds. The Company does not
consider the fair value of financial assets and liabilities at 31 December
2021 to be significantly different to their carrying value.

The Company is exposed to market risks from its use of financial
instruments, the management of which is described in note 16B on
pages 151 to 154 in the consolidated financial statements.

Market risks
Currency risk

The Company's functional and presentational currency is pound
sterling, however the Company is exposed to intercompany loans
receivable, intercompany loans payable and bonds that are
denominated in other currencies. The Company's exposure for holding
financial assets and liabilities in currencies other than its functional
currency is £45 million (2020: £180 million). The Company entered into
derivatives to mitigate the foreign currency risk but does not apply
hedge accounting.

Currency sensitivity analysis

The sensitivity analysis below details the company's sensitivity to a 10%
increase (2020: 10% increase) in the pound sterling against the foreign
currencies. These percentages represent management's assessment of
the possible changes in the foreign exchange rates at the respective
year-ends. The sensitivity analysis includes only outstanding foreign
currency denominated monetary items and adjusts their translation at
the period-end for the above percentage change in foreign
currency rates.

A 10% strengthening of the foreign currencies against the pound
sterling would have led to approximately an additional £5 million gain
in the income statement (2020: £18 million gain).

A 10% weakening of the foreign currencies against the pound sterling
would have led to an equal but opposite effect.

Interest rate risk

The Company is exposed to interest rate risks on its intercompany loans
receivable, intercompany loans payable and commercial papers as
these are floating. Increases in benchmark interest rates could increase
the interest income and interest cost. The intercompany loans
receivables and loans payables were initially recognised at their fair
value. The fair value of these assets is the same as their carrying
amount at 31 December 2021.

Interest rate sensitivity analysis

The sensitivity analysis below has been determined based on the
exposure to interest rates at the statement of financial position date.

The following changes in the interest rates represent management's
assessment of the possible change in interest rates at the respective
year-ends:

(f)

Profit for the year includes £2,815 million pertaining to unrealised gain on
swap/disposal of intangible assets with group companies as explained in
note 4.

(g) Further details are given in note 8 to the consolidated financial statements on

Assuming that all variables remain constant, a 1.0 percentage point
increase in floating interest rates on a full-year basis as at 31 December
2021 would have led to an additional £12 million of finance cost (2020:
£30 million additional finance cost).

page 136.

A 1.0 percentage point decrease in floating interest rate on a full-year
basis would have an equal but opposite effect.

12. Transactions with related parties

A related party is a person or entity that is related to PLC. These include
both people and entities that have, or are subject to, the influence or
control of PLC. Information on key management personnel has been
given in note 23 of the consolidated financial statements.

Unilever Annual Report and Accounts 2021

175

The following related party balances existed with group companies at
31 December.

Trading and other balances due from/(to)
subsidiaries

(3,312)

681

£ million

31 Dec 2021

31 Dec 2020

14. Remuneration of auditors

The parent company accounts of Unilever PLC are required to comply
with the Companies (Disclosure of Auditor Remuneration and Liability
Limitation Agreements) Regulations 2008. For details of the
remuneration of the auditors, please refer to note 25 of the
consolidated financial statements.

Loans due from/(to) subsidiaries

(1,463)

(1,423)

15. Remuneration of Directors

Refer to notes 6, 7, 8 and 9 for an explanation of these balances.

The following related party transactions took place during the year
with subsidiaries:

Information about the remuneration of Directors is given in the tables
noted as audited in the Directors' Remuneration Report on pages 84 to
104. Information on key management compensation is provided in note
4A to the consolidated financial statements on page 125.

Turnover

Royalties

Services

Others

Dividends received

Loans and related interest

Global IPR and service cost

£ million

2021

111

285

2020

16. Post-balance sheet events

562

1,719

Dividend
On 10 February 2022 the Directors announced a dividend of £0.3602 per
PLC ordinary share. Dividends will be paid out of retained profit. The
dividend is payable on 22 March 2022 to shareholders registered at the
close of business on 25 February 2022.

2,421

(44)

456

Debt issuance
On 23 February 2022, Unilever PLC issued £300 million 2.125% notes
maturing in 2028.

(474)

(2,024)

Information on guarantees given by PLC to group companies is given in
note 13 of the Company Accounts.

13. Contingent liabilities and financial commitments

The total amount of guarantees is £30,942 million (2020: £30,374
million).

This consists of guarantees relating to:

▪ The long-term debt and commercial paper issued by Group
companies such as Unilever Finance Netherlands B.V. and
Unilever Capital Corporation, which are joint with Unilever United
States, Inc.

▪ Group companies obligations to the UK and Netherlands pension

funds and of the Group captive insurance company; and

▪ Certain borrowings and derivatives of the other group companies.

There are also certain financial commitments which are not included in
the total amount of guarantees because they do not currently relate to
existing liabilities or cannot be quantified:

▪ PLC and Unilever United States, Inc. have guaranteed the standby
facilities of $7,965 million (2020: $7,965 million) and €1,500 million
(2020: Nil) for the group companies which were undrawn as at 31
December 2021 and 2020;

▪ The joint and several liability undertakings issued by NV in

accordance with Article 2:403 of the Dutch Civil Code for almost all
of its Dutch group companies were withdrawn by means of filings
with the Dutch Trade Register on 27 November 2020, being the last
practicable date prior to the effective date of the cross-border
merger between NV and PLC. With effect from the date of the cross-
border merger, PLC issued a guarantee confirming PLC’s liability
for any residual liability referred to in Article 2:404 (2) of the Dutch
Civil Code of NV remaining after the withdrawal of such
undertakings, to the extent that such liability did not transfer in the
cross-border merger; and

▪ PLC has guaranteed some contingent consideration of Group

companies relating to past business acquisitions and financial
commitments including indemnities arising from past business
disposals; and certain global and regional contracts

The likelihood of all of these guarantees and financial commitments
being called upon is considered to be remote and so the fair value is
deemed to be immaterial.

FINANCIAL STATEMENTS

176

Unilever Annual Report and Accounts 2021

Group Companies

As at 31 December 2021

In accordance with Section 409 of the Companies Act 2006, a list of subsidiaries, partnerships, associates and joint ventures as at 31 December
2021 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 186. 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 186.

See page 166 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

Nominal

Class

Value

Note

Name of
Undertaking

Algeria – Zone Industrielle Hassi Ameur Oran 31000

Unilever Andina Bolivia S.A.

Nominal

Class

Value

Note

BS100.00

Unilever Algérie SPA (72.50)

DZD1,000.00

Argentina – Tucumán 1, Piso 4°, Cdad. de Buenos Aires

Arisco S.A.

Unilever De Argentina S.A.

Club de beneficios S.A.U.

Argentina – Mendoza km 7/8 – Pocitos, San Juan

Helket S.A.

ARS1.00

Argentina- Juana Manso 205, 7mo. Piso, Ciudad Autónoma de Buenos Aires

Gronextar S.A.

Australia – 219 North Rocks Road, North Rocks NSW 2151

Ben & Jerry’s Franchising Australia Limited

Tea Too Pty Limited

TIGI Australia Pty Limited

Unilever Australia (Holdings) Pty Limited

Unilever Australia Group Pty Limited

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

ARS1.00

AUD1.00

AUD2.7414

AUD1.00

AUD2.00

Australia- Level 12, 60 Castlereagh Street, Sydney, New South Wales, 2000

Paula's Choice International Australia Pty Limited

AUD1.00

Austria – Stella-Klein-Löw Weg 13, 1023 Wien

Delico Handels GmbH

Kuner Nahrungsmittel GmbH

TIGI Handels GmbH

ULPC Handels GmbH

EUR36,336.42

EUR218,018.50

Unilever Austria GmbH

EUR10,000,000.00

Bangladesh – 51 Kalurghat Heavy Industrial Area, Kalurghat, Chittagong

Unilever Bangladesh Limited (60.75)

BDT100.00

Bangladesh – Fouzderhat Industrial Area, North Kattali, Chattogram 4217

Unilever Consumer Care Limited (81.98)

BDT10.00

Bangladesh – 83 Nasirabad Industrial Area, Chattogram

Unilever Tea MSO Bangladesh Limited

BDT1.00

Belgium – Industrielaan 9, 1070 Brussels

Unilever Belgium NV/SA

Unilever Lipton Tea NV/SA

Bolivia – Av. Blanco Galindo Km. 10.4 Cochabamba

No Par Value

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

BRL1.00

Brazil – Rod. BR 101-Norte, s/n, km. 43,6 – Room 4, Igarassu /PE

Cicanorte Industria de Conservas Alimenticas S.A.

BRL2.80

Brazil – Cidade de São Paulo, Estado de São Paulo, na Avenida Presidente
Juscelino Kubitscheck,1.309, 13o andar, Zip Code 04543-011

RGG – Comércio E Representações De Produtos De
Higiene Pessoal Limitada

BRL1.00

Brazil – Rua Professor José Leite e Oticica, nº 530, Vila Gertrudes, CEP
04.705-080, São Paulo/SP

E-UB Comércio Limitada

BRL1.00

Brazil – Cidade de Valinhos, Estado de São Paulo Rua Campos Salles, nº 20,
Parte, Centro, Zip Code 13.271-900

Unilever Logistica Serviços Limitada

BRL1.00

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

BRL1.00

Brazil – Rod. BR 232, s/n, km. 13 – Jaboatão dos Guararapes/PE

Unilever Brasil Gelados do Nordeste S.A.

No Par Value

Brazil – Av. das Nações Unidas, n. 14.261, 3rd floor, Parte – Gelados SP, Wing B,
Vila Gertrudes,Zip Code 04794-000, São Paulo/SP

Unilever Brasil Gelados Limitada

BRL1.00

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

BRL1.00

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

BRL1.00

Brazil – Rua Harmonia, 271, Sumarezinho, São Paulo/SP, CEP 05435-000

Mãe Terra Produtos Naturais Limitada

BRL1.00

Brazil – Rua Tenente Pena, No. 156, Bom Retiro, CEP 01127-020, São Paulo

Smart Home Comércio E Locação De
Equipamentos S.A (50.01)

No Par Value

Brazil – São Paulo, Estado de São Paulo na Rua Demóstenes nº 1072, Bairro
Campo Belo CEP 04614-010

Ole Franquia Limitada

Brazil – Rua Tito, 479, Vila Romana, CEP 05051-000, São Paulo

Compra Agora Serviços Digitais Limitada

BRL1.00

Bulgaria – City of Sofia, Borough Mladost, 1, Business Park, Building 3, Floor 1

Unilever Bulgaria EOOD

BGN1,000.00

Bulgaria- District Veliko Tarnovo, 5030, Debelets city, Promishlena Zona

Unilever Ice Cream Bulgaria EOOD

BGN 5,000.00

Cambodia – No. 443A Street 105, Sangkat Boeung Pralit, Khan 7 Makara
Phnom Penh Capital

Unilever (Cambodia) Limited

KHR20,000.00

Canada – 3081, 3rd Avenue, Whitehorse, Yukon Territory, Y1A 4Z7

Dermalogica Canada Limited

No Par Value

Unilever Annual Report and Accounts 2021

Name of
Undertaking

Nominal

Class

Value

Note

Name of
Undertaking

177

Nominal

Class

Value

Note

China – 1st Floor, No. 78 Binhai 2nd Road, Hangzhou Bay, New District, Ningbo
City, Zhejiang Province

Croatia – Strojarska cesta 20, 10000 Zagreb

Canada – PO Box 49130, 2900 – 595 Burrard Street, Vancouver BC V7X 1J5

Dollar Shave Club Canada, Inc.

CAD0.01

Canada – 800-885 West Georgia Street, Vancouver BC V6C 3H1

Seventh Generation Family & Home ULC

No Par Value

Canada – 1000 rue de la Gauchetière Ouest, Bureau 2500, Montreal H3B 0A2

4012208 Canada Inc.

No Par Value

Canada – 160 Bloor Street East, Suite 1400, Toronto ON M4W 3R2

Unilever Canada Inc.

No Par Value

Canada – McCarthy Tetrault LLP, 745 Thurlow Street, Suite 2400, Vancouver,
BC, V6E 0C5

Hourglass Cosmetics Canada Limited

No Par Value

Chile – Av. Las Condes 11.000 Piso 4-5, Vitacura

Unilever Chile Limitada

Chile – Av. de Las Condes, 11000 OF 501 A, Vitacura

Unilever Tea MSO Chile SpA

EUR 5000

China –3F No.66, Lin Xin Road, Changning District, Shanghai, 200335

Blueair Shanghai Sales Co. Limited

CNY1.00

Ningbo Hengjing Inspection Technology Co.,
Limited (67.71)

CNY1.00

China – Seaside Avenue, Cixi Economic and Technical Development Zone
(Hangzhou Bay New Zone)

Qinyuan Group Co. Limited (67.71)

CNY1.00

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)

CNY1.00

China – No.33 North Fuquan Road, Shanghai, 200335

Unilever (China) Investing Company Limited

USD1.00

China – 88 Jinxiu Avenue, Hefei Economic and Technology Development Zone,
Hefei, 230601

Unilever (China) Company Limited

Unilever Services (Hefei) Co. Limited

USD1.00

CNY1.00

China – No. 225 Jingyi Road, Tianjin Airport Economic Area, Tianjin

Unilever (Tianjin) Company Limited

USD1.00

China – 1068 Ting Wei Road, Jinshanzui Industrial Region, Jinshan District,
Shanghai

Unilever Foods (China) Co. Limited

USD1.00

China – No. 166 Unilever Avenue West, Qinglong Town, Pengshan District,
Meishan City, Sichuan province 620800

Unilever (Sichuan) Company Limited

USD1.00

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)

USD1.00

CNY1.00

China – Room 326, 3rd Floor, Xinmao Building, No.2 South Taizhong Road
South, Shanghai Free Trade Zone

Unilever Trading (Shanghai) Co. Limited

CNY1.00

China – Floor 1, Building 2, No.33, North Fuquan Road, Shanghai, 200335

Shanghai CarverKorea Limited

USD1.00

China- Room 302, No. 3, Lane 168, Linhong Road, Changning District,
Shanghai

ekaterra (Shanghai) Plant-based Company
Limited

USD 2000000

China- Room 301, No. 3, Lane 168, Linhong Road, Changning District,
Shanghai

ekaterra (Shanghai) Botanical Research &
Development Company Limited

CNY 200000

China- 2F, No. 10, Lane 255, Xiaotang Road, Fengxian District, Shanghai

Paula's Choice (Shanghai) Trading Co. Limited

CNY10,000,000

China- Room 1436, No.1256\1258, Wanrong Road, Jing'an District, Shanghai

Paula's Choice (Shanghai) Technology Co. Limited

CNY20,000,000

China- Zibian 2105, No.63, Mingzhu Avenue (North), Conghua District,
Guangzhou City

Unilever (Guangzhou) Co. Limited

CNY1.00

China- 5/F, Qunjia Building 1, No. 366 Shengkang Road, Jiubao Sub-district,
Shangcheng District, Hangzhou, Zhejiang Province

GoUni (Hangzhou) Trading Co., Limited

CNY20,000,000

Colombia – Av. El Dorado, No. 69B-45. Bogota Corporate Center Piso 7, Bogotá

Unilever Colombia SCC S.A.S.

Unilever Andina Colombia Limitada

Colombia – Carrera 11B # 99 - 25 Of 10-123 Bogota

ULeX Colombia S.A.S.

COP100.00

Costa Rica – De la intersección Cariari, 400 mts. Oeste y 800 mts al Norte,
frente a sede Testigos de Jehová, Planta Industrial Lizano, Heredia, Belén, La
Asunción de Belén

Unilever de Centroamerica S.A.

CRC1.00

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.

CRC1.00

Cote D’Ivoire -01 BP 1751 Abidjan 01, Boulevard de Vridi

Unilever-Cote D’Ivoire (99.78)

XOF5,000.00

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

XOF10,000.00

Unilever Hrvatska d.o.o.

HRK1.00

Cuba – Zona Especial de Desarrollo Mariel, Provincia Artemisa

Unilever Suchel, S.A. (60)

USD1,000.00

Cyprus – Head Offices, 195C Old Road Nicosia Limassol, CY-2540 Idalion
Industrial Zone – Nicosia

Unilever Tseriotis Cyprus Limited (84)

EUR1.00

Czech Republic – Voctářova 2497/18, 180 00 Praha 8

Unilever ČR, spol. s r.o.

UNILEVER RETAIL ČR, spol. s r.o.

CZK210,000.00

CZK100,000.00

Denmark – Ørestads Boulevard 73, 2300 København S

Unilever Danmark A/S

DKK1,000.00

Denmark – Petersmindevej 30, 5000 Odense C

Unilever Produktion ApS

Djibouti-Haramous, BP 169

Unilever Djibouti FZCO Limited

DKK100.00

USD20.00

Dominican Republic – Av. Winston Churchill, Torre Acropolis, Piso 16, Santo
Domingo

Unilever Caribe, S.A.

DOP1,000.00

Ecuador – Km 25 Vía a Daule, Guayaquil

Unilever Andina Ecuador S.A.

USD1.00

Egypt – 5th Floor, North Tower, Galleria 40 Business Complex, Sheikh Zayed,
6th of October City, Giza

Unilever Mashreq for Manufacturing and Trading
(SAE)

EGP10.00

Egypt – Public Free Zone, Alexandria

Unilever Mashreq International Company

USD1,000.00

Egypt – 14 May Bridge, Sidi Gaber, Smouha – Alexandria

Unilever Mashreq Trading LLC (60)

Commercial United for Import and Export LLC

Egypt – 15 Sphinx Square, El-Mohandsin, Giza

EGP1000.00

Unilever Mashreq for Import and Export LLC

EGP100.00

Egypt- Galleria 40 Business Complex, 5th and 6th Floors, Crazy Water
Corridor, Sheikh Zayed City, Giza

Unilever Tea MSO Egypt

EGP 100

Egypt- Plot No.5, Block 11, Industrial Zone 1, New Borg El Arab City, Alexandria

Unilever Tea Manufacturing Egypt

EGP 100

El Salvador – Local 19 Nivel 19, Edificio Torre Futura, Calle El Mirador y 87
avenida norte, Colonia Escalón, San Salvador

Unilever El Salvador, SCC S.A. de C.V.

Unilever de Centro America S.A. de C.V.

USD1.00

USD11.00

England and Wales – Unilever House, 100 Victoria Embankment, London,
EC4Y 0DY

Accantia Group Holdings (unlimited company)

GBP0.01

FINANCIAL STATEMENTS178

Unilever Annual Report and Accounts 2021

Name of
Undertaking

Alberto-Culver (Europe) Limited

Alberto-Culver Group Limited

Alberto-Culver UK Holdings Limited

Alberto-Culver UK Products Limited

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

Dollar Shave Club Limited

Elida Beauty Limited

GroNext Technologies Limited°

Hourglass Cosmetics UK Limited

Margarine Union (1930) Limited°

MBUK Trading Limited

Mixhold Investments Limited

ND4A 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°

ekaterra Holdco UK Limited

ekaterra Manufacturing UK Limited

Nominal

Class

Value

Note

GBP1.00

GBP5.00

Name of
Undertaking

Unilever Pension Trust Limited

Unilever UK Limited

Unilever UK Pension Fund Trustees Limited

USF Nominees Limited

Nominal

Class

Value

Note

GBP1.00

England and Wales – The Manser Building, Thorncroft Manor, Thorncroft
Drive, Dorking, KT22 8JB

Dermalogica (UK) Limited

GBP1.00

England and Wales – 1st Floor, 16 Charles II Street, London, SW1Y 4QU

Twenty Nine Capital Partners Limited Partnership
∞ (80)

Unilever Ventures III Limited Partnership ∞ (86.25)

England and Wales – Union House, 182-194 Union Street, London, SE1 0LH

REN Skincare Limited

REN Limited

Murad Europe Limited

GBP1.00

GBP0.032

GBP1.00

England and Wales – 3 St James's Road, Kingston Upon Thames, Surrey, KT1
2BA

Nature Delivered Limited

Marshfield Bakery Limited

England and Wales – 1 More Place, London, SE1 2AF

Accantia Health and Beauty Limited (in
liquidation)

Unidis Sixty Four Limited (in liquidation)

Unilever Bestfoods UK Limited (in liquidation)

GBP0.001

GBP0.01

GBP0.25

GBP1.00

England and Wales – C/O TMF Group, 8th Floor, 20 Farringdon Street, London,
EC4A 4AB

Unilever Ventures Limited

GBP1.00

England and Wales – Port Sunlight, Wirral, Merseyside, CH62 4ZD

Unilever Global IP Limited °

GBP1.00

England and Wales- Suite 1, 3rd Floor, 11-12 St. James` Square, London, SW1Y
4LB

Paula`s Choice UK Limited

USD1.00

Estonia – Kalmistu tee 28a, Tallinna linn, Harju maakond, 11216

Unilever Eesti AS

EUR6.30

Ethiopia – Bole Sub City, Kebele 03/05, Lidiya Building, Addis Ababa

Unilever Manufacturing PLC

ETB1,000.00

Finland – Post Box 254, 00101 Helsinki

Unilever Finland Oy

Unilever Ingman Production Oy

France – 20, rue des Deux Gares, 92500, Rueil-Malmaison

Bestfoods France Industries S.A.S. (99.99)

Cogesal-Miko S.A.S. (99.99)

ekaterra France

Fralib Sourcing Unit S.A.S. (99.99)

Saphir S.A.S. (99.99)

Tigi Services France S.A.S. (99.99)

U-Labs 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)

EUR16.82

EUR100.00

No Par Value

EUR1.00

No Par Value

EUR1.00

No Par Value

EUR1.00

Unilever Retail Operations France (99.99)

No Par Value

France – Parc Activillage des Fontaines – Bernin 38926 Crolles Cedex

Intuiskin S.A.S. (96.16)

EUR1.00

France – ZI de la Norge – Chevigny Saint-Sauveur, 21800 Quetigny

Amora Maille Societe Industrielle S.A.S. (99.99)

No Par Value

France – 42, rue Jean de La Fontaine , Paris, 75016

Laboratoire Garancia

UPD EU

Germany – Wiesenstraße 21. 40549 Düsseldorf

Dermalogica GmbH

Germany – Spitaler Straße 16, 20095 Hamburg

ProCepta Service GmbH

EUR62.50

EUR1.00

EUR25,000.00

EUR28,340.00

EUR2.00

GBP1.00

GBP0.25

GBP1.00

GBP0.01

GBP1.00

GBP0.001

GBP1.00

GBP0.10

GBP1.00

GBP10.00

GBP1.00

GBP500.00

GBP1.00

ekaterra Research and Development UK Limited

GBP1.00

ekaterra UK Limited

GBP1.00

England and Wales – Unilever House, Springfield Drive, Leatherhead, KT22
7GR

Alberto-Culver Company (U.K.) Limited

TIGI International Limited

GBP1.00

Unilever Annual Report and Accounts 2021

Name of
Undertaking

Nominal

Class

Value

Note

Germany – Neue Burg 1, 20457 Hamburg

DU Gesellschaft für Arbeitnehmerüberlassung
mbH (99.99)

NU Business GmbH

Unilever Deutschland GmbH

Unilever Deutschland Holding GmbH

EUR2.00

DEM50,000.00

EUR25,000.00

EUR90,000,000.00

EUR2,000,000.00

EUR1,000,000.00

EUR 100.000,00

EUR39,000.00

EUR18,000.00

EUR14,300.00

EUR5.200.00

EUR6,500.00

Unilever Deutschland Produktions GmbH & Co.
OHG

Unilever Deutschland Produktions Verwaltungs
GmbH

EUR179,000.00

Unilever Deutschland Supply Chain Services
GmbH

Dollar Shave Club GmbH

ekaterra Germany GmbH

T2 Germany GmbH

Germany – Langnesestraße 1, 64646 Heppenheim

Maizena Grundstücksverwaltung GmbH & Co.
OHG

EUR51,150.00

EUR25,000.00

EUR1.00

Rizofoor Gesellschaft mit beschränkter Haftung

EUR15,350.00

Schafft GmbH

UBG Vermietungs GmbH

EUR138,150.00

EUR63,920.00

EUR100,000.00

EUR8,090,190.00

EUR136.377,489.00

Unilever Deutschland Immobilien Leasing
GmbH & Co. OHG

Germany – Rotebühlplatz 21, 70178 Stuttgart

TIGI Eurologistic GmbH

TIGI Haircare GmbH

Germany - Wiesenstr. 21, D-40549 Düsseldorf

Kate Somerville GmbH

Living Proof GmbH

Murad GmbH

Ren GmbH

Ghana – Swanmill, Kwame Nkrumah Avenue, Accra

Millers Swanzy (Ghana) Limited

EUR100.00

EUR24,900.00

EUR25,600.00

EUR1.00

GHC1.00

Ghana – Plot No. Ind/A/3A-4, Heavy Industrial Area, Tema, P O Box 721, Tema

Unilever Ghana PLC (74.50)

Unilever Tea Distribution Ghana Limited

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

GHC0.0192

GHS1.00

GHC2.50

EUR10.00

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

Haiti – 115, Rue Panamericaine, Estabissement Número 1, Petion Ville

Les Condiments Alimentaires, S.A. (61)

HTG1000.00

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.

HNL10.00

Hong Kong – Suite 1106-8, 11/F, Tai Yau Building, 181 Johnston Road,
Wanchai

179

Nominal

Class

Value

Note

HKD0.10

HKD1.00

HKD0.10

Name of
Undertaking

Blueair Asia Limited

Hong Kong – 6/F Alexandra House, 18 Charter Road, Central

T2 Hong Kong Limited

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

HKD 1.00

Hong Kong – Room 1808, 18/F, Tower II Admiralty Centre, 18 Harcourt Road,
Admiralty

Hong Kong CarverKorea Limited

HKD1.00

Hong Kong – 14th Floor, One Taikoo Place, 979 King’s Road, Quarry Bay

UPD Hong Kong Limited

HKD100.00

Hong Kong – 14/F, One Taikoo Place, 979 King’s Road, Quarry Bay

Go-Uni Limited (67)

USD14,376,000.00

Hong Kong- Unit B, 17/F, United Centre, 95 Queensway, Admiralty

Paula's Choice Hong Kong Limited

HKD100.00

Paula's Choice Hong Kong Distribution Services
Limited

HKD1,000.00

Hungary – 1138-Budapest, Váci út 121-127.

Unilever Magyarország Kft

HUF1.00

India – Unilever House, B. D. Sawant Marg, Chakala, Andheri (E), Mumbai 400
099

Daverashola Estates Private Limited (61.90)

Hindlever Trust Limited (61.90)

Hindustan Unilever Limited° (61.90)

Jamnagar Properties Private Limited (61.90)

Lakme Lever Private Limited (61.90)

Levers Associated Trust Limited (61.90)

Levindra Trust Limited (61.90)

Pond’s Exports Limited (61.90)

Unilever India Limited (61.90)

Unilever India Exports Limited (61.90)

Unilever Industries Private Limited°

Unilever Ventures India Advisory Private Limited

India – S-327, Greater Kailash – II, New Delhi – 110048, Delhi

INR10.00

INR1.00

INR10.00

INR1.00

INR10.00

Blueair India Private Limited

INR10. 00

India- 64 Main Road, Whitefield, Bangalore, Karnataka

Ekaterra Research and Development India Private
Limited

Ekaterra Service India Private Limited

INR10. 00

India- C/o.Vaish Associates, 106, Peninsula Centre, Dr S.S. Rao Road, Parel,
Mumbai, Maharashtra, 400012

Jech India Private Limited

INR10. 00

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 (99.99)

IDR2.00

IDR1,000.00

PT Unilever Trading Indonesia

IDR1,003,875.00

Indonesia – Gedung Pasaraya Blok M Gedung B Lantai 6 dan 7 Jalan
Iskandarsyah II no. 2, DKI Jakarta

PT Gerai Cepat Untung (75)

IDR100,000.00

Indonesia – KEK Sei Mangkei, Nagori Sei Mangkei, Kecamatan Bosar Maligas,
Kabupaten Simalungun 21183, Sumatera Utara

PT Unilever Oleochemical Indonesia

IDR1,000,000.00

Iran – No. 23, Corner of 3rd Street, Zagros Street, Argentina Square, Tehran

Unilever Iran (Private Joint Stock Company)

IRR1,000,000.00

Ireland – 20 Riverwalk, National Digital Park, Citywest Business Campus,
Dublin 24

Lipton Soft Drinks (Ireland) Limited

Unilever Ireland (Holdings) Limited

Unilever Ireland Limited

EUR1.26

Ireland- 2nd Floor, Palmerston House, Denzille Lane, Dublin, D02 WD37

ekaterra Ireland Limited

EUR1.00

Isle of Man – Bridge Chambers, West Quay, Ramsey, Isle of Man, IM8 1DL

Rational International Enterprises Limited

USD1.00

Israel – 3 Gilboa St., Airport City, Ben Gurion Airport

Beigel & Beigel Mazon (1985) Limited

ILS1.00

FINANCIAL STATEMENTS180

Name of
Undertaking

Unilever Annual Report and Accounts 2021

Nominal

Class

Value

Note

Name of
Undertaking

Nominal

Class

Value

Note

Israel – 52 Julius Simon Street, Haifa, 3296279

Kenya – Commercial Street, Industrial Area, P.O. BOX 30062-00100, Nairobi

Bestfoods TAMI Holdings Ltd

Israel Vegetable Oil Company Ltd

Unilever Israel Foods Ltd

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

ILS0.001

ILS0.0001

ILS0.10

ILS0.0002

ILS1.00

ILS0.0001

ILS1.00

Italy – Piazza Paleocapa 1/D, 10100, Torino

Gromart S.R.L.

EUR1,815,800.00

Italy – Via Crea 10, 10095, Grugliasco

G.L.L. S.R.L. (51)

EUR1.00

Italy - Via Tortona 25, cap 20144 – Milano

Intuiskin S.R.L. (95.81)

EUR10,000.00

Italy – Viale Sarca 235, 20126 Milan

Unilever Italia Administrative Services S.R.L.

EUR70,000.00

Italy – Via Paolo di Dono 3/A 00142 Roma

Unilever Italia Logistics S.R.L.

Unilever Italia Manufacturing S.R.L.

Unilever Italia Mkt Operations S.R.L.

Unilever Italy Holdings S.R.L.

ekaterra Italy S.r.l.

Italy – Via Plava, 74 10135 Torino

Equilibra S.R.L. (75)

Armores Srl (75)

EUR600,000.00

EUR10,000,000.00

EUR25,000,000.00

EUR1,000.00

EUR500,000.00

EUR1.00

Italy- Via Bernardino Drovetti 16, 10138 Torino

Syrio Srl (75)

Italy - Via Quercette, n.a. 81016, San Potito Sannitico (CE)

P2P S.r.l (50)

Italy – Business Center Monte Napoleone, Via Monte Napoleone 8, 20121 –
Milano

UPD Italia S.r.l.

EUR10,000.00

Japan – 2-1-1, Kamimeguro, Meguro-ku, Tokyo 153-8578

Unilever Japan Customer Marketing K.K.

JPY100,000,001.00

Unilever Japan Holdings G.K.

Unilever Japan K.K.

Unilever Japan Service K.K.

ekaterra Japan Service K.K.

ekaterra Japan K.K.

JPY10,000,000.00

JPY100,000,001.00

JPY50,000,000.00

JPY1.00

Japan - 1-8-1 Shinjuku, Shinjuku-ku, Tokyo

Rafra Japan K.K. (70)

JPY20,000,000.00

Japan -Marnouchi Trust Tower 20F, 1-8-3, Marunouchi, Chiyoda-ku, Tokyo

UPD Japan K.K.

JPY109,850.00

Jersey – 13 Castle Street, St Helier, Jersey, JE4 5UT

Unilever Chile Investments Limited

GBP1.00

Jordan – Ground floor- Office No.1, GH24 Building, Business Park,
Development Zone, Amman

Unilever Jordan for Marketing Services

JOD1000.00

Jordan – King Hussein Business Park, Building No. 24, ground floor, Amman

Unilever Jordan LLC

JOD1000.00

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 (99.99)

Mabroukie Tea & Coffee Estates Limited

Limuru Tea PLC (51.99)

Ngoina Tea Estate Limited

Unilever Tea Kenya PLC (98.30)

KES1.00

KES10.00

KES1.00

Unilever Kenya Limited°

KES20.00

Kenya- Dedan Kimathi Avenue, Imaara Building Mombasa, P.O Box 83067,
Mombasa G.P.O

Unilever Tea MSO Kenya Limited

KES100.00

Korea – 443 Taeheran-ro, Samsung-dong, Kangnam-gu, Seoul

Unilever Korea Chusik Hoesa

KRW10,000.00

Korea – 81, Tojeong 31-gil, Mapo-gu, Seoul

CARVERKOREA Co., Limited (97.47)

KRW500.00

Korea- #313,314, 3rd Floor, 48, Achasan-ro 17-gil, Seongdong-gu, Seoul

Paula's Choice Korea, Limited

KRW 500,000,000

Laos – Viengvang Tower, 4th Floor, Room no. 402A, Boulichan Road,
Dongpalan Thong Village, Sisattanak District, Vientiane Capital

Unilever Services (Lao) Sole Co. Limited

LAK80,000.00

Latvia – Kronvalda bulvāris 3-10, Rīga, LV-1010

Unilever Baltic LLC

EUR1.00

Lebanon – Sin El Fil, Zakher Building, Floor 4, Beirut

Unilever Levant s.a.r.l.

LBP1,000,000.00

Lithuania – Skuodo st. 28, Mazeikiai, LT-89100

UAB Unilever Lietuva distribucija

UAB Unilever Lietuva ledu gamyba

EUR3,620.25

Malawi – Room 33, Gateway Mall, Area 47, Lilongwe Malawi

Unilever South East Africa (Private) Limited

MWK2.00

Malaysia – Level 34, Menara TM, Jalan Pantai Baru, 59200 Kuala Lumpur

Unilever (Malaysia) Holdings Sdn. Bhd.

Unilever (Malaysia) Services Sdn. Bhd.

Unilever Foods (Malaysia) Sdn. Bhd.

Unilever Malaysia Aviance Sdn. Bhd.

No Par Value

ekaterra Malaysia Sdn. Bhd.

MYR1,000,000.00

Mexico – Av. Tepalcapa No.2, Col. Rancho Santo Domingo, C.P. 54900 Tultitlán,
Estado de México

Unilever de Mexico S.de R.L. de C.V.

Unilever Holding Mexico S.de R.L. de C.V.

Unilever Manufacturera S.de R.L. de C.V.

Servicios Professionales Unilever S.de R.L. de C.V.

Unilever Mexicana S.de R.L. de C.V.

Unilever Real Estate Mexico S.de R.L. de C.V.

Unilever Servicios de Promotoria, S.de R.L. de C.V.

Moldova – 6A Uzinelor Street, Kishinev, MD -2023

Betty Ice Moldova S.R.L.

MDL7,809,036.00

Morocco – Km 10, Route Cotiere, Ain Sebaa, Casablanca

Unilever Maghreb S.A.

MAD100.00

Mozambique – Avenida 24 de Julho, Edifício 24, nº 1097, 4º andar, Maputo

Unilever Mocambique Limitada

USD0.01

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

MMK8,200.00

Myanmar – No (196), West Shwe Gone Dine 5th Street, Bahan Township,
Yangon

Unilever (Myanmar) Services Limited

USD10.00

Myanmar – Lot No. 28,30,31, Hlaing Thar Yar Industrial Zone (3), Hlaing Thar
Yar Township, Yangon

Unilever EAC Myanmar Company Limited (60)

MMK1,000,000.00

Nepal – Basamadi, Hetanda – 3, Makwanpur

Unilever Nepal Limited (53.75)

Netherlands – Weena 455, 3013 AL Rotterdam

Alberto-Culver Netherlands B.V.

Argentina Investments B.V.

BFO Holdings B.V.

BFO TWO B.V.

Brazinvest B.V.

NPR100.00

EUR1.00

EUR454.00

EUR1.00

Unilever Annual Report and Accounts 2021

Name of
Undertaking

Chico-invest B.V.

Doma B.V.

ekaterra B.V.

ekaterra Export B.V.

ekaterra Global Operations B.V.

ekaterra Group Holdings B.V.

ekaterra Group Holdings 2 B.V.

ekaterra Group Holdings 3 B.V.

ekaterra Group IP Holdings B.V.

ekaterra Group Finance B.V.

ekaterra Netherlands B.V.

Handelmaatschappij Noorda B.V.

Hourglass Cosmetics Europe 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.°

N.V. 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 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 Finance Netherlands B.V.o

FoodServiceHub B.V.

Unilever Global Services B.V.

Unilever Holdings B.V.

Unilever Home & Personal Care Nederland B.V.

Unilever IP Holdings B.V.

Unilever Indonesia Holding B.V.

Unilever Insurances N.V.

Unilever International Holdings B.V. °

Unilever International Holding B.V.

Unilever International Holdings N.V.

Unilever Netherlands Retail Operations B.V.

Unilever Nederland Holdings B.V.

Unilever Nederland Services B.V.

Unilever PL Netherlands B.V.

Unilever Pilot B.V.

Unilever Turkey Holdings B.V.

Unilever US Investments B.V.°

Unilever Ventures Holdings B.V.

Nominal

Class

Value

Note

EUR455.00

NLG1,000.00

EUR1.00

NLG1,000.00

EUR1.00

EUR453.78

EUR1.00

NLG1,000.00

EUR1.00

NLG1,000.00

EUR1.00

NLG100.00

NLG1,000.00

EUR454.00

NLG1,000.00

EUR1.00

EUR1,800.00

NLG1,000.00

EUR1.00

EUR454.00

EUR1.00

EUR454.00

EUR100.00

EUR1.00

EUR454.00

EUR1.00

EUR454.00

EUR460.00

EUR1.00

EUR453.79

Name of
Undertaking

Unilever UK Holdings B.V.

Univest Company B.V.

UNUS Holding B.V.

Verenigde Zeepfabrieken B.V.

Wemado B.V.

Netherlands – Hofplein 19 3032 AC Rotterdam

Lever Faberge Europe-Sourcing Unit Vlaardingen
B.V.

Tessa B.V.

Unilever Nederland B.V.

Unilever Nederland Foods Factories B.V.

Netherlands – Valkweg 2 7447JL Hellendoorn

181

Nominal

Class

Value

Note

EUR1.00

EUR0.10

Non-voting†

NLG1,000.00

EUR1.00

EUR454.00

EUR46.00

Ben en Jerry’s Hellendoorn B.V.

EUR453.78

Netherlands – Markhek 5, 4824 AV Breda

De Korte Weg B.V.

EUR1.00

Netherlands – Bronland 14, 6708 WH Wageningen

Unilever Innovation Centre Wageningen B.V.

EUR460.00

Netherlands- Grote Koppel 7, 3813 AA Amsersfoort

Paula's Choice Europe B.V.

EUR1.00

Netherlands – Unilever House, 100 Victoria Embankment, London, EC4Y 0DY
(Registered Seat: Rotterdam)

Unilever Overseas Holdings B.V.
Unilever UK Holdings N.V.o

NLG1,000.00

EUR1.00

New Zealand – Level 4, 103 Carlton Gore Rd, Newmarket, Auckland 1023

Ben & Jerry’s Franchising New Zealand Limited

No Par Value

T2 NZ Limited

Unilever New Zealand Limited

NZD1.00

NZD2.00

Nicaragua – Km 11.5, Carretera Vieja a León, 800 Mts Norte, 100 Mts Este, 300
Mts Norte, Managua

Unilever de Centroamerica S.A.

NIC50.00

Niger – BP 10272 Niamey

Unilever Niger S.A. (88.42)

Nigeria – 1 Billings Way, Oregun, Ikeja, Lagos

Unilever Nigeria Plc (76.41)

West Africa Popular Foods Nigeria Limited (51)

Unilever Tea MSO Nigeria Limited

Norway – Martin Linges vei 25, Postbox 1, 1331 Fornebu

Unilever Norge AS

XOF10,000.00

NGN0.50

NGN1.00

NOK100.00

Pakistan – Avari Plaza, Fatima Jinnah Road, Karachi – 75530

Unilever Pakistan Foods Limited (76.57)

Unilever Pakistan Limited (99.29)

PKR10.00

PKR50.00

(71.78)

PKR100.00

Unilever Tea Pakistan Limited (99.98)

Delivery Hub (Private) Limited (64.13)

PKR10.00

Palestine – Ersal St. Awad Center P.O. Box 3801 Al-Beireh, Ramallah

Unilever Market Development Company (in
liquidation)

ILS1.00

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.

USD1.00

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.

No Par Value

Paraguay – 4544 Roque Centurión Miranda N° 1635 casi San Martin. Edificio
Aymac II, Asunción

Unilever de Paraguay S.A.

PYG1,000,000.00

Peru – Av. Paseo de la Republica 5895 OF. 401, Miraflores, Lima 18

Unilever Andina Perú S.A.

Unilever Tea Distribution Peru S.A.

PEN1.00

Philippines – Linares Road, Gateway Business Park, Gen. Trias, Cavite

Metrolab Industries, Inc.

PHP1.00

PHP10.00

Philippines – 7th Floor, Bonifacio Stopover Corporate Center, 31st Street
corner 2nd Avenue, Bonifacio Global City, Taguig City

FINANCIAL STATEMENTS182

Name of
Undertaking

Unilever Annual Report and Accounts 2021

Nominal

Class

Value

Note

Name of
Undertaking

Nominal

Class

Value

Note

Puerto Rico – Professional Services Park 997, San Roberto St., Suite 7, San Juan

Maddema Trading Company (Private) Limited

Unilever Philippines, Inc.

PHP50.00

Philippines – 11th Avenue corner 39th Street, Bonifacio Triangle, Bonifacio
Global City, Taguig City

Universal Philippines Body Care, Inc

PHP100.00

Philippines – Manggahan Light Industrial Compound, A. Rodriguez Avenue,
Bo. Manggahan, Pasig City

Unilever RFM Ice Cream, Inc. (50)

PHP1.00

Philippines – Four/Neo, 12th Floor, Fourth Avenue, Bonifacio Global City,
Barangay Fort Bonifacio, Taguig 1634, Metro Manila

Gronext Technologies Phils., Inc.

Poland – Jerozolimskie 134, 02-305, Warszawa

Unilever Polska Sp. z o.o.

Unilever Poland Services Sp. z o.o.

Unilever Polska S.A.

Unilever Tea Manufacturing Poland Sp. z o.o.

Unilever Tea MSO Poland Sp. z o.o.

Unilever Tea Service Co Poland Sp. z o.o.

PHP1.00

PLN50.00

PLN10.00

PLN50.00

Unilever de Puerto Rico, Inc°

Romania – Ploiesti, 291 Republicii Avenue, Prahova County

Unilever Romania S.A. (99)

Unilever South Central Europe S.A.

Romania – 121 Cernăuţi Street, Suceava 720089

Betty Ice SRL

USD100.00

ROL0.10

ROL260.50

RON10.00

Romania – 9-9A Dimitrie Pompei Blvd, Iride Business Park Buildings 5 and 6,
2nd District, Bucuresti

Good People SA (75)

Russia – 644031, 205, 10 let Oktyabrya, Omsk

Inmarko-Trade LLC

RON10.00

RUB
1,000,000.00

Russia – 123022, Floor 7, Premise 19, Room 36, 13, Sergeya Makeeva Street,
Moscow

Unilever Rus LLC

OOO Unilever Tea LLC

RUB
28,847,390, 269.19

RUB
4,500,000.00

Russia – Tula region, Leninsky district, Ilyinskoye rural settlement, Varvarovka
village, Varvarovsky pass, Building 15-F, Room 406, Floor 3

Gourmand LLC

RUB10,000.00

Rwanda – Sanlam Towers, P.O.Box 973, Kigali

Unilever Rwanda Limited

RWF 1,000

Rwanda – Nyarugenge, Nyarungenge, Umujyi wa Kigali, Rwanda, P.O. BOX
6428 Kigali

Unilever Tea Rwanda Limited

RWF1000.00

Saudi Arabia – P.O. Box 5694, Jeddah 21432
Binzagr Unilever LimitedX (49)

SAR1,000.00

Serbia – Belgrade, Serbia, Omladinskih brigada 90b – Novi Beograd

Unilever Beograd d.o.o.

Singapore – 18 Nepal Park, 139407

Unilever Asia Private Limited

Unilever Singapore Pte. Limited

UPD Singapore Pte. Limited

Gronext Technologies Pte. Ltd.

T2 Singapore Pte. Limited

No Par Value

Slovakia – Karadzicova 10, 821 08 Bratislava

Unilever Slovensko, spol. s. r.o.

EUR1.00

South Africa -15 Nollsworth Crescent, Nollsworth Park, La Lucia Ridge Office
Estate, La Lucia, 4051

Nollsworth Park Properties (Pty) Limited (in
liquidation)

Unilever Market Development (Pty) Limited

Unilever South Africa (Pty) Limited

Unilever South Africa Holdings (Pty) Limited

ZAR2.00

ZAR1.00

ZAR2.00

ZAR1.00

Tea Manufacturing South Africa (Pty) Limited

Tea MSO South Africa (Pty) Limited

No Par Value

South Africa – 4 Merchant Place, CNR Fredman Drive and Rivonia Road
Sandton, 2196

Aconcagua 14 Investments (RF) (Pty) Limited

ZAR1.00

South Korea- 443 Taeheran-ro, Samsung-dong, Kangnam-gu, Seoul

Unilever Tea Distribution Korea Co., Limited

Spain – PA / Reding, 43, Izda 1, 29016 Malaga

Intuiskin S.L.U. (95.81)

Spain – C/ Tecnología 19, 08840 Viladecans

Unilever Espana S.A.

Unilever Services Espana S.A.

Spain – C/ Felipe del Río, 14 – 48940 Leioa

KRW
10000.00

EUR1.00

EUR48.00

EUR60.00

Unilever Foods Industrial Espana, S.L.U.

EUR600.00

Sri Lanka – 258 M Vincent Perera Mawatha, Colombo 14

Brooke Bond Ceylon (Private) Limited

Ceytea (Private) Limited

Lever Brothers (Exports and Marketing) (Private)
Limited°

Premium Exports Ceylon (Private) Limited

R.O. Mennell & Co. (Ceylon) (Private) Limited

Unilever Ceylon Services (Private) Limited

Unilever Lipton Ceylon Limited

Unilever Sri Lanka Limited°

Unilever Tea MSO Ceylon (Private) Limited

Sudan – Property no. 125, block 2, Industrial Area, Kafuri District, Bahri, Kafori

Unilever Sudanese Investment Company

SDG10,000.00

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

Sweden – Karlavagen 108, 115 26, Stockholm

Jonborsten AB

Sweden – Nordenskioldgatan 19, 413 09 Goteborg

Nature Delivered Sweden AB

Sweden- Östra Varvsgatan 4, Malmö, 211 75

ekaterra Tea Sweden AB

Switzerland – Bahnhofstrasse 19, CH 8240 Thayngen

Knorr-Nährmittel Aktiengesellschaft

Unilever Schweiz GmbH

ekaterra Switzerland AG

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

CHF800,000.00

Taiwan – 3F, No. 550, Sec. 4, Zhongxiao East Rd., Xinyi District, Taipei City

Unilever Taiwan Limited (99.92)

Unilever Tea Distribution Taiwan Limited

TWD10.00

Taiwan- 8F., No.186, Sec.1, Zhangmei Rd., Changhua City 500, Taipei (R.O.C.)

Paula's Choice Taiwan Co., Limited

NTD10.00

Tanzania – Plot No.4A, Pugu Road, Dar Es Salaam

Unilever Tanzania Limited

Tanzania – P.O. Box 40, Mufindi, Iringa, 6423

Unilever Tea Tanzania Limited

TZS20.00

Thailand – 161 Rama 9 Road, Huay Kwang, Bangkok 10310

Unilever Thai Holdings Limited

THB100.00

LKR10.00

LKR2.00

LKR10.00

SEK100.00

SEK50.00

SEK100.00

SEK1.00

CHF1,000.00

CHF100,000.00

CHF1.00

CHF1,000.00

Unilever Annual Report and Accounts 2021

Name of
Undertaking

Unilever Thai Services Limited

Unilever Thai Trading Limited

Nominal

Class

Value

Note

THB100.00

Thailand – 12 A Floor Unit B1-B2, Office No. 1225, Siam Piwat Tower, 989 Rama
I Road, Pathumwan, Bangkok 10330

UPD (Thailand) Co., Limited

THB100.00

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. (97.44)

Unilever Maghreb Export S.A.

Tunisia – Z.I. Voie Z4, Megrine Riadh, Tunis, 2014
UTIC Distribution S.A.X (49)

TTD1.00

TND6.00

TND5.00

TND10.00

Turkey – Saray Mahallesi Dr. Adnan Büyükdeniz Cad. No.13 34768 Ümraniye –
İstanbul
Unilever Gida Sanayi ve Ticaret AŞo (99.98)
Unilever Sanayi Ve Ticaret Türk Aşo (99.98)

TRY0.01

Besan Besin Sanayi ve Ticaret AŞ (99.99)

Dosan Konserve Sanayi ve Ticaret AŞ (99.64)

Unilever Hizli Tuketim Urunleri Satis Pazarlama ve
Ticaret Anonim Sirketi

Unilever Tea Gıda Satış ve Pazarlama Anonim
Şirketi

TRY0.01

TRY1.00

Turkey – İçerenköy Mahallesi, Topçu İbrahim Sokak, Quick Tower
Sitesi, No:8-10D, Ataşehir, İstanbul

Gronext Teknoloji Bilişim Ticaret A.Ş.

TRY1.00

Uganda – Plot 10/12 Nyondo Close, Industrial Area, P.O. Box 3515 Kampala

Unilever Uganda Limited

UGX20.00

Ukraine – 04119, 27-T, Letter A, Dehtyarivska Str., Kyiv

Pallada Ukraine LLC (in liquidation)

Unilever Ukraine LLC

UAH
335,010,360.00

UAH
1,151,329,851

Ukraine- 141 C Sviato-Pokrovska Str., Urban Type Village Hostomel, Irpin City,
Kyiv, 08290

Unilever Tea Ukraine LLC

United Arab Emirates – PO Box 17053, Jebel Ali, Dubai
Severn Gulf FZCOX (50)

Unilever Gulf FZE

UAH
1,600,000.00

AED100,000.00

AED1,000,000.00

United Arab Emirates –Plot number MO0401, PO box 17055, JAFZA

Unilever Binzagr Gulf General Trading LLCX (50)

Unilever General Trading LLC

AED1,000.00

United Arab Emirates – Warehouse No. 1.2, Dubai Industrial Park – Seeh
Shwaib 2

Unilever Home & Personal Care Products
Manufacturing LLCX (49)

AED1,000.00

United Arab Emirates- MO0401, Jebel Ali Free Zone, Dubai

Unilever Tea Gulf FZE

Unilever Tea Procurement FZE

AED1.00

United States – 700 Sylvan Avenue, Englewood Cliffs, New Jersey 07632-3201

Alberto-Culver Company

Alberto-Culver International, Inc.

Alberto-Culver (P.R.), Inc. (in liquidation)

Alberto-Culver USA, Inc.

Ben & Jerry’s Franchising, Inc.

Ben & Jerry’s Gift Card, LLC

Ben & Jerry’s Homemade, Inc.

Chesebrough-Pond’s Manufacturing Company (in
liquidation)

Conopco, Inc.

Dermalogica, LLC

Kate Somerville Holdings, LLC

Kate Somerville Skincare LLC

The Laundress, LLC

No Par Value

USD1.00

No Par Value

USD1.00

USD0.01

No Par Value

USD1.00

Name of
Undertaking

Lipton Industries, Inc.

Murad LLC

Pantresse, Inc.

REN USA Inc.

Skin Health Experts, LLC

Kensington & Sons, LLC

St. Ives Laboratories, Inc

Kirei Intermediate Holdings, 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.

Unilever United States Foundation, Inc.

Unilever United States, Inc.

Unilever Ventures Advisory LLC

183

Nominal

Class

Value

Note

USD1.00

USD120.00

No Par Value

USD0.01

No Par Value

USD10.00

USD1.00

USD0.3333

United States – 125 S Clark, Suite 2000, Chicago, IL 60603

Blueair Inc.

No Par Value

United States – 233 Bleecker Street, New York, 10014

Carapina LLC (in liquidation)

Grom Columbus LLC (in liquidation)

Grom Malibu LLC (in liquidation)

Grom USA LLC (in liquidation)

Hollywood LLC (in liquidation)

Spatula LLC (in liquidation)

United States – 60 Lake Street, Suite 3N, Burlington, VT 05401

Seventh Generation Canada, Inc.

Seventh Generation, Inc.

No Par Value

USD0.001

United States – 13335 Maxella Ave. Marina del Rey, CA 90292

Dollar Shave Club, Inc.

Personal Care Marketing & Research Inc

USD0.001

USD 1.00

United States – 2711 Centerville Road, Suite 400, Wilmington, Delaware

Grom Franchising LLC (In Liquidation)

United States – 55 East 59th Street, New York, 10022

Intuiskin Inc (95.81)

No Par Value

United States – CTC 1209 Orange Street Wilmington, DE19801

Living Proof, Inc.

Nature Delivered, Inc.

T2 US LLC

Unilever Tea HoldCo USA Inc.

ekaterra HoldCo 2 USA Inc.

Unilever Tea Manufacturing USA LLC

Unilever Tea MSO USA LLC

United States – 1241 Electric Avenue, Venice CA 90291

Kingdom Animalia, LLC

USD0.01

USD0.00

USD0.01

USD 1.00

United States – 2711 Centreville Road, Suite 400, Wilmington, New Castle
County, Delaware 19808

Pukka Herbs Inc

USD0.001

United States – 11 Ranick Drive South, Amityville, NY 11701

BC Cadence Holdings, Inc.

Sundial Brands LLC

Madam C.J. Walker Enterprises, LLC

Nyakio LLC

USD0.01

No Par Value

United States – 1169 Gorgas Avenue, Suite A, San Francisco CA 94129

Olly Public Benefit Corporation

USD0.00001

United States – 208 Utah Street, Suite 300, San Francisco, CA, 94103

Tatcha, LLC

FINANCIAL STATEMENTSSmartyPants, Inc.

USD0.00001

Unilever Ventures General Partner Limited◊

United States- 705 5th Avenue, #200, Seattle, WA 98104

England and Wales- 1st Floor, 16 Charles II Street, London, SW1Y 4QU

Twenty Nine Capital Partners (General Partner)
Limited◊

184

Name of
Undertaking

Nominal

Class

Value

Note

United States – 127 Nevada Street, El Segundo, CA 90245

The LIV Group, Inc.

No Par Value

United States – 1209 Orange Street, Wilmington, DE 19801

Unilever North America Supply Chain Company,
LLC

United States – 4056 Del Rey Avenue, Marina Del Rey, CA 90292

Beautypedia, LLC

Paula's Choice, Inc.

Paula's Choice Acquisitionco, Inc.

Paula's Choice Holdings, Inc.

Paula's Choice, LLC

USD0.001

United States - 415 Jackson Street, San Francisco, California 64111

Onnit Academy, LLC

Onnit Labs, Inc.

The Uncovery, LLC

Welly Health PBC

Uruguay – Camino Carrasco 5975, Montevideu

Unilever Uruguay SCC S.A.

Uruguay- Luis Bonavita 1294, Montevideo

Unilever America Latina S.A.

USD0.0001

USD0.00001

UYU1.00

Venezuela – Edificio Torre Corp Banca, Piso 15, entre Avenidas Blandín y Los
Chaguaramos, Urbanización La Castellana, Caracas

Unilever Andina Venezuela S.A.

Bs1.00

Vietnam – Lot A2-3, Tay Bac Cu Chi Industry Zone, Tan An Hoi Ward, Cu Chi
District, Ho Chi Minh City

Unilever Vietnam International Company Limited

VND863,104,820,0
00.00

Vietnam- No.156, Nguyen Luong Bang Street, Tan Phu Ward, District 7, Ho Chi
Minh City

Unilever Tea Distribution Vietnam SMLLC

VND
1,395,000,000.00

Unicorn Market Place Vietnam Company Limited

Zambia – Stand 2375, Corner Addis Ababa Drive & Great East Road, Show
Grounds, Lusaka

Unilever South East Africa Zambia Limited

Zimbabwe – 2 Stirling Road, Workington, Harare

Unilever – Zimbabwe (Pvt) Limited∆

ZMK2.00

ZWD2.00

SUBSIDIARY UNDERTAKINGS NOT INCLUDED IN THE CONSOLIDATION

Austria – Rochusgasse 4, 5020, Salzburg

NATURAL EVOLUTION GmbH

EUR100.00

Brazil – Av Das Nacoes Unidas, 14261 4º Andar Ala B, Vila Gertrudes, Cep
04792-000, Sao Paulo

Unileverprev Sociedade De Previdencia Privada

Bulgaria – Debelets city, Promishlena zona st. 5030 Veliko Tarnovo

Sladoledena Fabrika EOOD

BGN50.00

China – Room 604-48, Building 1, No. 38 Debao Road, Waigaoqiao bonded
zone, Shanghai

UPD China Limited

CNY1.00

England and Wales – 100 Victoria Embankment, Blackfriars, London, EC4Y
0DY

Unilever Annual Report and Accounts 2021

Name of
Undertaking

Lever Brothers Port Sunlight Limited (in
liquidation)

Nominal

Class

Value

Note

GBP1.00

England and Wales – c/o TMF Group, 8th Floor, 20 Farringdon Street, London,
EC4A 4AB

GBP1.00

EUR10.00

HTG500,000

Twenty-Nine Capital Partners General Partner
Limited◊

Greece – Kymis ave & 10, Seneka Street, GR-145 64 Kifissia

Lipoma Management Consulting SA

ULBCS Logistics 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
(61.90)

Hindustan Unilever Foundation (61.90)

INR10.00

Israel – Park Zvaim Industrial Area, Beit Shean / Correspondance: P.O.B. 787,
Beit Shean, 1171601

Dollar Shave Club Israel Limited

NIS0.10

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

Morocco – Km 10, Route Cotiere, Ain Sebaa, Casablanca

Societe Commerciale du Rif S.A.R.L.

Societe Tangeroise de Parfumerie et d’Hygiene
S.A.R.L.

JMD1.00

KES20.00

MAD50.00

Myanmar – Shwe Gon Daing (West) 5th Street, No. 196, Mimosa Tower, Shwe
Gon Daing (West) Ward, Bahan Township, Yangon, Myanmar 11201

Lever Brothers (Burma) Limited

MMK0.5

Palestine – Jamil Center, Al-Beireh, Ramallah

Unilever Agencies Limited (99) (in liquidation)

JOD1.00

Qatar – Almana & Partners WLL Building, Area No. 43, Al Mamoura, PO BOX 49

Unilever Qatar LLC

QAR1,000.00

Scotland – c/o Brodies LLP, 15 Atholl Crescent, Edinburgh, EH3 8HA

Unilever Ventures (SLP) General Partner Limited◊

GBP1.00

United States – 13335 Maxella Ave. Marina del Rey, CA 90292

DSC Distribution, Inc.

United States – 233 Bleecker Street, New York, 10014

Grom WTC LLC

Grom Century City LLC

United States – c/o The Corporation Trust Company, Coporation Trust Center,
1209 Orange Street, Wilmington, Delaware, 19801. New Castle County

Cocotier, Inc

ASSOCIATED UNDERTAKINGS

USD0.001

Australia – 47 Dover Street, Cremorne, VIC, 3121, Australia

SNDR PTY LTD∆◊

No Par Value

Bahrain – 161, Road 328, Block 358, Zinj, Manama

Unilever Bahrain Co. W.L.L. (49)

BHD50.00

Uflexreward Limited

GBP0.001

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

England and Wales – Nightingale House, 46-48 East Street, Epsom, Surrey,
KT17 1HQ

Brand Evangelists for Beauty Limited ∆◊ (80.30)

(100)

(66.47)

GBP1.00

England and Wales – 1 More London Place, London, SE1 2AF

Unidis Twenty Six Limited (in liquidation)

GBP1.00

Gallo Brasil Distribuição e comércio Limitada (55)

BRL1.00

Canada – Suite 300-171 West Esplanade, North Vancouver, British Columbia
Canada V7M 3K9

A&W Root Beer Beverages Canada Inc ◊ (40)

No Par Value

Cyprus – 2 Marcou Dracou str., Engomi Industrial Estate, 2409 Nicosia

Unilever PMT Limited∆ (49)

EUR1.71

England and Wales – 85 Great Portland Street, London, W1W 7LT

Unilever Annual Report and Accounts 2021

Name of
Undertaking

Blis Global Plc∆◊ (30.67)

(0.20)

Nominal

Class

Value

Note

GBP0.00001

Name of
Undertaking

(100)

(6.54)

185

Nominal

Class

Value

Note

INR100.00

India- 55 2nd Floor Community Centre, East of Kailash, New Delhi, East Delhi,
DL 110065

England and Wales – 2nd Floor, 17 Waterloo Place, London, SW1Y 4AR

Langholm Capital II L.P. (46.30)

England and Wales – 100 Victoria Embankment, Blackfriars, London, EC4Y
0DY

Convosight Analytics Private Limited∆◊ (17.96)

Uflexreward Holdings LimitedΔ (99.1)

GBP0.001

(100.00)

INR10.00

INR1.00

England and Wales – Unit 1.8 & 1.9 The Shepherds Building, Charecroft Way,
London, W14 0EE

India- S-2 Plot no. 21, Kartarpura Industrial Area, 22 Godam, Jaipur, RJ 302006

SCA Investments Limited ∆◊ (60.49)

(25.19)

(3.65)

GBP0.001

England and Wales – 2nd Floor, 5 Jubilee Place, Chelsea, London, SW3 3TD

Trinny London Limited ∆◊ (54.88)

(32.32)

GBP0.01

England and Wales – 127 North Milton Park, Abingdon, Oxfordshire OX14 4SA

P2i Limited ∆◊ (12.89)

(5.44)

(4.20)

(2.44)

(50)

GBP0.0001

GBP1.0000

England and Wales – Level 1 Brockbourne House, 77 Mount Ephraim,
Tunbridge Wells, Kent, TN4 8BS

Clean Beauty Co Ltd∆◊ (99.66)

(26.72)

GBP0.0001

102

Uprising Science Private Limited ∆◊ (2.5)

(27.27)

INR10.00

INR100.00

Indonesia– Jalan Srengseng Raya Nomor 55A, Rukun Tetangga 001, Rukun
Warga 002, Kelurahan Srengseng, Kecamatan Kembangan, Jakarta Barat
11630, Provinsi Daerah Khusus Ibukota

PT Anugrah Mutu Bersama ◊ (40)

IDR1,000,000.00

Iran – Second floor, No. 23, Corner of 3rd Street, Zagros Street, Argentina
Square, Tehran

Unilever-Golestan Foods (Private Joint Stock
Company)(50.66)

IRR1,000,000.00

Ireland – 70 Sir John Rogersons Quay, Dublin 2

Pepsi Lipton International Limited∆

EUR1.00

Israel – Kochav Yokneam Building, 4th Floor, P.O. Box 14, Yokneam Illit 20692

IB Ventures Limited∆ (99.74)

ILS1.00

Japan – #308, 5–4–1, Minami Azabu, Tokyo

Grom Japan K.K.◊ (34)

JPY50,000.00

England and Wales – 170 Finchley Road, London, NW3 6BP

Luxembourg – 5 Heienhaff, L-1736 Senningerberg

GALLINEE LTD∆◊ (51.89)

GBP0.01

Helpling Group Holding S.à r.l.∆◊ (98.57)

England and Wales – C4 Lab Psc Building Unilever R&D Port Sunlight, Quarry
Road East, Bebington, Wirral, CH63 3JW

(2.34)

EUR1.00

Penhros Bio Limited◊ (50)

GBP1.00

England and Wales- First Floor, 59-61 High Street West, Glossop, SK13 8AZ

Mauritius – c/o Apex Fund Services (Mauritius) Ltd, 4th Floor, 19 Bank Street,
Cyber City, Ebene 72201

CDDM Technology Limited∆◊ (49.53)

GBP0.01

England and Wales- C/O Bcs Windsor House, Station Court, Station Road,
Great Shelford, Cambridge, Cambridgeshire, CB22 5NE

VHSquared Limited◊ (39.47)

(1.79)

(17.86)

GBP0.01

101

France – 13, avenue Morane Saulnier, 78140 Velizy Villacoublay

Pegase S.A.S. (25)

EUR5,000.00

France – 7 rue Armand Peugeot, 92500 Rueil-Malmaison

Relais D’or Centrale S.A.S. (49.99)

No Par Value

Germany – Beerbachstraße 19, 91183 Abenberg

Hans Henglein & Sohn GmbH ◊ (50)

EUR100,000.00

Henglein & Co. Handels-und Beteiligungs GmbH &
Co. KG◊ (50)

Henglein Geschäftsführungs GmbH◊ (50)

DEM50,000.00

Nürnberger Kloßteig NK GmbH & Co. KG◊ (50)

Germany – Beerbachstruße 37, 17153 Stavenhagen

Henglein NRW GmbH◊ (50)

DEM250,000.00

Germany – Bad Bribaer Straße, 06647 Klosterhäseler

Henglein GmbH◊ (50)

DEM50,000.00

India – 1st & 2nd Floor, Kagalwala House, Plot No. 175, CST Road, Kalina,
Bandra Kurla, Santacruz East Mumbai, Mumbai 400098

Peel-Works Private Limited∆◊ (48.15)

(16.67)

(14.65)

INR30.00

India – 1st Floor Lodha, i-Think Techno Campus, A Wing, Chirak Nagar, Thane.
MH 400607

Capvent Asia Consumer Fund Limited∆ (40.41)

USD0.01

Oman – Po Box 1711, Ruwi, Postal code 112

Towell Unilever LLC (49)

OMR10.00

Philippines – 11th Avenue corner 39th Street, Bonifacio Triangle, Bonifacio
Global City, Taguig City, M.M

Sto Tomas Paco Land Corp∆◊ (40)

(40)

Cavite Horizons Land, Inc.◊ (35.10)

PHP1.00

PHP10.00

PHP20.00

PHP1.00

PHP10,000.00

Philippines – Manggahan Light Industrial Compound, A. Rodriguez Avenue,
Bo. Manggahan, Pasig City

WS Holdings Inc.∆◊

Selecta Walls Land Corp∆◊

PHP1.00

PHP10.00

103

Portugal – Largo Monterroio Mascarenhas, 1,1099–081 Lisboa

Fima Ola – Produtos Alimentares, S.A. (55)

Gallo Worldwide, Limitada (55)

Grop – Gelado Retail Operation Portugal,
Unipessoal, Limitada (55)

EUR4,125,000

EUR550,000

EUR27,500

Transportadora Central do Infante, Limitada (54)

EUR27,000

Unilever Fima, Limitada (55)

EUR14,462,336.00

Victor Guedes – Industria e Comercio, S.A. (55)

EUR275,000

Fima Dressings Unipessoal, Limitada (55)

EUR27,500

Saudi Arabia – P.O.Box 22800, Jeddah 21416

Binzagr Unilever Distribution Company Limited
(49)

SAR1,000.00

Pureplay Skin Sciences (India) Private Limited∆◊
(0.1)

INR10.00

SachaJuan Haircare AB∆◊ (69.5)

SEK1.00

Sweden – No 18 Office & Lounge, Briger Jarlsgatan 18,114 34 Stockholm

FINANCIAL STATEMENTS186

Unilever Annual Report and Accounts 2021

Name of
Undertaking

United Arab Emirates – P.O. Box 49, Dubai

Nominal

Class

Value

Note

Al Gurg Unilever LLC (49)

AED1,000.00

United Arab Emirates – Po Box 49, Abu Dhabi

Thani Murshid Unilever LLC (49)

AED1,000.00

United States - c/o URS Agents LLC, 614 N Dupont HWY Suite 210, Dover, Kent,
DE, 19901

Beauty Bakerie Cosmetics Brand Inc∆◊(50.05)

(16.24)

(24.88)

USD0.001

United States – 2600 Tenth St #101, Berkeley CA 94710

Machine Vantage Inc◊ (9.86)

(49.93)

United States – c/o Resident Agents Inc. 8 The Green, STE R, Dover, Kent,
Delaware, 19901

Discuss.io Inc◊ (7.79)

(16.78)

(50.53)

USD0.0001

United States – 700 Sylvan Avenue, Englewood Cliffs, New Jersey 07632-3201

Pepsi Lipton Tea Partnership (50)

Food Service Direct Logistics, LLC (40)

(17.83)

USD0.0001

United States – 548 Market St #70998, San Francisco, CA 94104-5401

Physic Ventures L.P.◊ (57.27)

United States – c/o The Company Corporation, 251 Little Falls Drive,
Wilmington, DE, New Castle 19808

Equilibria, Inc∆◊ (20.00)

FabFitFun Inc. ∆◊ (68.18)

(7.48)

Nutraceutical Wellness Inc∆◊ (41.70)

USD0.00001

USD0.001

USD0.0001

100

Name of
Undertaking

(56.82)

(10.95)

(49.72)

True Botanicals, Inc∆◊ (3.75)

(41.97)

(14.62)

(29.43)

(16.63)

Yati Inc.∆◊ (4.00)

(100.00)

Nominal

Class

Value

Note

USD0.0001

USD0.00001

United States – c/o Cogency Global Inc, 850 New Burton Road, in the City of
Dover, County of Kent, Delaware

Volition Beauty Inc∆◊ (66.44)

USD0.0001

United States – c/o The Corporation Trust Company, Coporation Trust Center,
1209 Orange Street, Wilmington, Delaware, 19801. New Castle County

Koco Life LLC∆◊(23.81)

(39.24)

United States – c/o Cogency Global Inc, 850 New Burton Road, in the City of
Dover, County of Kent, Delaware

Zitsticka Inc ∆◊ (26.63)

USD0.0001

United States – c/o New Voices Partners, LLC, 7 Witch Lane, Rowayton,
Connecticut 06853

New Voices Fund LP ◊ (32.90)

United States – c/o Paracorp Incorporated, 2140 S Dupont HWY, Camden,
Kent, DE, 19934

Keli Network, Inc ∆◊ (31.34)

USD0.0001

United States- A registered agent, Inc, 8 The Green, Ste A, Dover, Kent, DE,
19901

Clean Beauty for All, Inc.∆◊ (23.96)

(41.84)

(61.61)

(67.86)

USD0.0001

Notes:

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: B3 Ordinary, 20: Series
C-1 Pref, 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: Series C1 Preference, 33: Series D-2, 34: Cumulative Redeemable Preference, 35: A-
Ordinary, 36: Preferred Ordinary, 37: Com, 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: Series B1 CPPS, 46: B Preferred, 47: Series A-5 , 48: Series C-2 Preferred, 49: A-4 Com, 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: Pre Series B CPPS, 65: Series B CPPS, 66: Series C1 CPPS, 67: Series C2, 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 Redeemable Non
Voting Ordinary, 79: B Ordinary, 80: N Ordinary, 81: A-1 Com, 82: A-2 Com, 83: A-3 Com, 84: Series A EIS, 85: Series A Convertible Preferred, 86: Series A2 Preferred, 87: Series B
Preferred, 88: Series C Preferred, 89: Series A1 CPPS, 90: D1 Preferred, 91: Series E, 92: Series C-2 Pref, 93: Series B-1 Preferred, 94: Series B-2 Preferred, 95: Series A-2 Preferred,
96: Series A-4 Preferred, 97: Preferred Seed, 98: Seed-3 Preferred, 99: INR 1 Series A Common,100: Series A Preferred Stock, 101: Ordinary Preferred, 102: E Preferred, 103:
Common A

𐩲𐩲 Indicates an undertaking directly held by PLC. All other undertakings are indirectly held. In the case of Hindustan Unilever Limited 47.43% is directly held and the
remainder of 14.47% 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 Mixhold B.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.

† Shares the undertaking holds in itself.

Δ Denotes an undertaking where other classes of shares are held by a third party.

𐰓𐰓 Binzagr Unilever Limited, Severn Gulf FZCO, Unilever Binzagr Gulf General Trading LLC, 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. The Unilever Group is entitled to 50% of the profits made by Binzagr
Unilever Limited, Severn Gulf FZCO and Unilever Binzagr Gulf General Trading LLC. The Unilever Group is entitled to 80% of the profits made by Unilever Home and Personal
Care Products Manufacturing LLC .

◊ Accounted for as non-current investments within non-current financial assets.

∞ Exemption pursuant to Regulation 7 of the Partnership (Accounts) Regulations 2008.

In addition, we have revenues either from our own operations or otherwise in the following locations: Afghanistan, Albania, Aland Islands, Americas, Andorra, Angola,
Antigua, Anguilla, Armenia, Aruba,Azerbaijan, Bahamas, Barbuda, Barbados, Belarus, Belize, Benin, Bhutan, Bosnia and Herzegovina, Botswana, British Virgin Islands,
Brunei Darussalam, Burkina Faso, Burundi, Cameroon, Cape Verde, Cayman Islands, Central African Republic, Chad, Comoros, Congo, Cook Islands, Curacao, Democratic
Republic of Congo, Dominica, Equatorial Guinea, Eritrea, Fiji, French Guiana, French Polynesia, Gabon, Gambia, Georgia, Gibraltar, Greenland, Grenada, Guam, Guinea,
Guinea-Bissau, Guyana, Iceland, Iraq, Kiribati, Kosovo, Kuwait, Kyrgyzstan, Lesotho, Liberia, Libya, Liechtenstein, Luxembourg, Macao, Macedonia, Madagascar, Maldives,
Mali, Malta, Martinique, Mauritius, Monaco, Mongolia, Montenegro, Montserrat, Namibia, New Caledonia, Niue, Norfolk Islands, Papua New Guinea, Saint Kitts and Nevis,
Saint Lucia, Saint Maarten, Saint Vincent and the Grenadines, Samoa, San Marino, Senegal, Seychelles, Sierra Leone, Slovenia, Solomon Islands, Somalia, Sudan, Suriname,
Swaziland, Tajikistan, Timor Leste, Togo, Tokelau, Tonga, Turkmenistan, Tuvalu, Uzbekistan, Vanuatu and Yemen.

The Unilever Group has established branches in Azerbaijan, Bosnia-Herzegovina, Cote d’Ivoire, Cuba, Jordan, Kazakhstan, Lebanon, Northern Ireland, the Philippines, Saudi
Arabia, Turkey, UAE and the UK.

Unilever Annual Report and Accounts 2021

187

Shareholder information
Financial calendar

Annual general meeting

Date

Voting and Registration date

4 May 2022

2 May 2022

Quarterly dividends
Dates listed below are applicable to all Unilever listings (PLC ordinary shares and PLC ADSs).

Quarterly dividend announced with the Q4 2021 results

10 February 2022

24 February 2022

25 February 2022

22 March 2022

Quarterly dividend announced with the Q1 2022 results

28 April 2022

19 May 2022

20 May 2022

16 June 2022

Quarterly dividend announced with the Q2 2022 results

26 July 2022

4 August 2022

5 August 2022

1 September 2022

Quarterly dividend announced with the Q3 2022 results

27 October 2022

17 November 2022

18 November 2022

9 December 2022

Announcement date

Ex-dividend date

Record date

Payment date

Contact details

Website

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

www.unilever.com/contact/

Private Shareholders telephone +44 (0)20 7822 5500
Private Shareholders can email us at
shareholder.services@unilever.com

Shareholder Services

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
conference and investor/analyst presentations.

You can also view the Unilever Annual Report and Accounts 2021 (and
the Additional Information for US Listing Purposes) on our website, and
those for prior years.

Find out more at www.unilever.com

www.unilever.com/investorrelations

www.unilever.com/investor-relations/annual-report-and-accounts

Computershare Investor Services PLC

Publications

The Pavilions

Bridgwater Road

Bristol BS99 6ZZ

Telephone +44 (0) 370 600 3977

Website

FAQ and Contact Form

The Netherlands

ABN AMRO Bank N.V.

Gustav Mahlerlaan 10

1082 PP Amsterdam

Telephone +31 (0) 230 344 2000

www.investorcentre.co.uk

www.investorcentre.co.uk/
contactus

Copies of the Unilever Annual Report and Accounts 2021 (and the
Additional Information for US Listing Purposes) and the Annual Report
on Form 20-F 2021 can be accessed directly or ordered via the website.

www.unilever.com/investorrelations

Unilever Annual Report and Accounts 2021

The Unilever Annual Report and Accounts 2021 (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

corporate.broking@nl.abnamro.com

Unilever’s quarterly results announcements are in English with figures
in euros.

American Stock Transfer & Trust Company

Operations Center

6201 15th Avenue

Brooklyn, NY 11219

Toll-free number +1 866 249 2593

Direct dial +1 718 921 8124

db@astfinancial.com

FINANCIAL STATEMENTS188

Unilever Annual Report and Accounts 2021

Additional information for
US listing purposes

Form 20-F references

Item 1

Identity of Directors, Senior Management and Advisers

Item 2

Offer Statistics and Expected Timetable

Item 3

Key Information

Capitalisation and Indebtedness

Reasons for the offer and use of proceeds

Risk factors

Item 4

Information on the Company

n/a

44–50

History and development of the company

4–7, 14-66, 68, 76–77, 118, 138–140, 161–164, 176, 187, 192

Business overview

Organisational structure

Property, plant and equipment

Item 4A

Unresolved Staff Comments

Item 5

Operating and Financial Review and Prospects

2-3, 8-31, 36–37, 44–62, 120, 192

68, 166, 176–186

138–140, 193

n/a

Operating results

Liquidity and capital resources

Research and development, patents and licences, etc.

Trend information

38–39, 42, 50, 106, 117, 138–140, 144, 147–161

32–43, 50, 151–154

12–13, 20-31, 123–124, 192

4–5, 6–7, 36–43, 46–50

Item 6

Directors, Senior Management and Employees

Directors and senior management

Compensation

Board practices

Employees

Share ownership

Item 7

Major Shareholders and Related Party Transactions

Major shareholders

Related party transactions

Interest of experts and counsel

Item 8

Financial Information

72–75, 190

84–104, 125–132

72–75, 78, 92, 94, 96, 98, 104, 190

18-19, 125, 190

87–103, 131–132, 190

76, 191

174, 191

n/a

Consolidated statements and other financial information

39, 106–166, 187, 191, 198

Significant changes

Item 9

The Offer and Listing

Offer and listing details

Plan of distribution

Markets

Selling shareholders

Dilution

Expenses of the issue

Item 10

Additional Information

Share capital

Articles of association

Material contracts

Exchange controls

Taxation

Dividends and paying agents

Statement by experts

Documents on display

Subsidiary information

Item 11

Quantitative and Qualitative Disclosures About Market Risk

Item 12

Description of Securities Other than Equity Securities

Description of debt securities

165

76, 191

n/a

76, 191

n/a

68–69, 76–77, 82, 94

192

193–194

n/a

187, 192

n/a

142–159, 199

n/a

Unilever Annual Report and Accounts 2021

D.1

D.2

D.3

D.4

Description of warrants and rights

Description of other securities

Name of depositary and address of principal
executive

Title of ADRS and brief description of provisions

Depositary fees and charges

Depositary payments

Item 13

Defaults, Dividend Arrearages and Delinquencies

Defaults

Dividend arrearages and delinquencies

Item 14

Material Modifications to the Rights of Security Holders and Use of Proceeds

Item 15

Controls and Procedures

Item 16

Reserved

Audit Committee Financial Expert

Code of Ethics

Principal Accountant Fees and Services

Exemptions From The Listing Standards For Audit
Committees

Purchases Of Equity Securities By The Issuer and
Affiliated Purchasers

Change in Registrant’s Certifying Accountant

Corporate Governance

Mine Safety Disclosures

Item 17

Financial Statements

Item 18

Financial Statements

Item 19

Exhibits Please refer to the Exhibit list located immediately following the signature page for this
document as filed with the SEC.

189

n/a

195–196

196

n/a

77, 197

69, 78

18–19, 77, 80

78–79, 197

n/a

76, 165, 197

n/a

106–166

FINANCIAL STATEMENTS190

Unilever Annual Report and Accounts 2021

Directors, senior management and employees

Employees

The average number of employees for the last three years is provided in note 4A on page 125. The average number of employees during 2021
included 7,837 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
management level the opportunity to invest between €10 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 24 February 2022 (the latest practicable date for
inclusion in this report), awards for 385,489 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, which was amended and restated as of 2 February 2021 to make appropriate changes in light of
Unification. These plans are the North American equivalents of the Unilever Share Plan 2017 and SHARES plans, as amended from time to time. The
rules governing these share plans are materially the same as the rules governing the Unilever Share Plan 2017 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
Board. The Committee 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 and the periodic review of the remuneration and related policies of the wider
workforce to assess alignment to PLC’s purpose, value and strategy.

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.

Unilever Annual Report and Accounts 2021

191

Major shareholders and related party transactions

Major shareholders

The voting rights of the significant shareholders of PLC are the same as for other holders of the class of share held by such significant shareholder.

The principal trading market upon which PLC ordinary shares are listed is the London Stock Exchange. PLC ordinary shares are also listed and
traded on Euronext Amsterdam.

In the United States, PLC American Depositary Receipts are traded on the New York Stock Exchange. Deutsche Bank Trust Company Americas
(Deutsche Bank) acts for PLC as depositary.

At 24 February 2022 (the latest practicable date for inclusion in this report), there were 2,035 registered holders of PLC American Depositary
Receipts in the United States. We estimate that approximately 12% of PLC’s ordinary shares (including shares underlying PLC American Depositary
Receipts) were held in the United States (approximately 11% in 2020).

If you are a shareholder of PLC, your interest is in a UK legal entity, your dividends will be paid in pound sterling (converted into US dollars if you
have American Depositary Receipts) and you may be subject to UK tax.

To Unilever’s knowledge, PLC 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. PLC is not aware of any arrangements the operation of which may at any subsequent date result in a change
of control of PLC.

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 note 23 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 2021 up to
24 February 2022 (the latest practicable date for inclusion in this report).

Dividend record

The following tables show the dividends declared and dividends paid by PLC for the last five years, expressed in terms of the revised share
denominations which became effective from 22 May 2006.

Dividends declared for the year

PLC dividends
Dividend per 31/9 p
Dividend per 31/9 p (US Registry)
Dividends paid during the year

PLC dividends
Dividend per 31/9 p
Dividend per 31/9 p (US Registry)

2021

2020

2019

2018

2017

£1.46

$2.00

£1.48

$2.03

£1.48

$1.91

£1.45

$1.85

£1.43

$1.83

£1.42

$1.82

£1.35

$1.82

£1.33

$1.83

£1.26

$1.66

£1.22

$1.56

FINANCIAL STATEMENTS

192

Unilever Annual Report and Accounts 2021

Material contracts

Raw materials

At the date of this Annual Report and Accounts, Unilever is not party to
any contracts that are considered material to its results or operations.

Exchange controls

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.

Our products use a wide variety of raw and packaging materials which
we source locally and internationally, and which may be subject to price
volatility either directly or as a result of movements in foreign exchange
rates.

In 2021, we witnessed broad-based inflation across commodities as
global demand recovering from the pandemic and exacerbated by
persistent production and logistical disruptions particularly during the
second and third wave of the pandemic. Weakening currencies in many
emerging markets, such as Turkey, Argentina, and Brazil, meant further
challenges.

Looking ahead to 2022, we expect continued volatility in commodity
markets. We remain watchful of the impact of Covid, supply
stabilisation and how the global economy recovers in the new normal.

Unilever Annual Report on Form 20-F 2021

Seasonality

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.

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.

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.

Other information on the Company

Innovation, Research and Development

We have over 20,000 patents protecting the ideas, discoveries and
breakthroughs that our global team of 5,000 world-leading experts
produce. We invest around €1 billion in R&D each year.

Technology sits at the heart of our approach to innovation. We are
building automated technology into our innovation centres. Our UK
Materials Innovation Factory has the highest concentration of robots
doing material chemistry work in the world. It delivers data ten times
faster than traditional methods. We run virtual tests and scenarios to
optimise products before the lab stage, thereby innovating sooner
and cutting time to market - in one year we can perform 12,000 rapid
product tests. Shanghai, China is home to our AI Hub where we use
insights from real time data to prototype innovations and test them via
eCommerce in just a matter of days. Fast, efficient, effective innovating.

Research and development is powering our move away from petro-
chemicals, stopping plastic pollution, in collaboration with our partners.
Our goal is to make a Clean Future. One of the ways we will do this is by
replacing 100% of the carbon derived from fossil fuels in our Home Care
products with renewable or recycled carbon.

Innovation in biology unlocks significant benefits and will be a driver in
achieving our climate and nature goals. We are a world leader in the
microbiome space and have more than 100 patents in this area alone.
We are exploring its influence on all aspects of health and wellbeing.
We are also deepening our understanding of the skin and innovating
accordingly. One example of this is a new pro-lipids technology that
helps the skin to repair its barrier from the inside out.

Every Unilever product is based on an innovation crafted by our experts
in collaboration with our network of partners. We translate our scientific
discoveries into everyday products that care for the planet and improve
people’s health, confidence and wellbeing. Some of our focus areas are
hygiene, skin care, prestige beauty, plant-based foods and functional
nutrition, such as vitamins, minerals and supplements, and we're
constantly evolving alongside our consumers’ ever-changing lives
and tastes.

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.

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 those of
our competitors. Our brands command loyalty and affinity and deliver
superior performance.

Information on market share

Unless otherwise stated, market share refers to value share as
opposed to volume share. The market data and competitive position
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 2021, sales
in Iran were less than one per cent of Unilever’s worldwide turnover.
During the year, this non-US subsidiary had approximately €2,375,543
in gross revenues and less than €1,021,483 in net profits attributable
to the sale of food, personal care and home care products to entities
affiliated with the Government of Iran. These entities were
the Shahrvand Group, which is owned by the municipality of Tehran
and Refah, which is a chain of 200 state-owned department stores.
This non-US subsidiary has donated a de minimus amount of personal
care products to Firoozgar Hospital, which is a hospital affiliated with
goverment, to assist with the Covid-19 pandemic. 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. While we currently continue our activities in Iran, we are
continuously evaluating such activities in light of the evolving
regulatory environment.

Unilever Annual Report and Accounts 2021

193

Property, plant and equipment

The Group has interests in properties in most of the countries where
there are Unilever operations. None of these interests are individually
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.

Taxation

The comments below in relation to United Kingdom and United States
taxation are based on current United Kingdom and United States
federal income tax law as applied in England and Wales and the United
States respectively, and HM Revenue & Customs ('HMRC') and Internal
Revenue Service (“IRS”) practice (which may not be binding on HMRC
or the IRS) respectively, in each case as at the latest practicable date
before the date of this document.

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, any state or the District of Columbia, or any other
legal person subject to US 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 most United Kingdom companies, including PLC. Shareholders
of PLC, whether resident in the United Kingdom or not, receive the full
amount of the dividend actually declared.

A non-UK resident shareholder or ADS holder holding their shares
or ADSs otherwise than in connection with any trade, profession
or vocation carried on through a branch, agency or permanent
establishment in the UK will not generally be subject to UK tax in
respect of dividends paid by PLC.

United States taxation on dividends

If you are a US person, the distribution up to the amount of PLC’s
earnings and profits for US Federal Income Tax purposes will be
ordinary dividend income.

Any portion of the distribution that exceeds PLC’s 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. PLC does not
maintain calculations of its earnings and profits in accordance with US
Federal Income Tax accounting principles. You should therefore assume
that any distribution by PLC with respect to the shares will be reported
as ordinary dividend income. You should consult your own tax advisers
with respect to the appropriate US Federal Income Tax treatment of any
distribution received from us.

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.

For US Federal Income Tax purposes, the amount of any dividend paid
in a non-US currency will be included in income in a US dollar amount
calculated by reference to the exchange rate in effect on the date the
dividends are received by you or the depositary (in the case of ADSs),
regardless of whether they are converted into US dollars at that time.
If the non-US currency is converted into US dollars on the day they are
received, you generally will not be required to recognise foreign
currency gain or loss in respect of this dividend income.

UK taxation on capital gains

Under United Kingdom law, when you dispose of shares or ADSs 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 gains
made on disposal of your shares or ADSs.

There are exceptions to this general rule, two of which are: if the shares
or ADSs 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 or ADSs 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. In such cases,
you may be liable to United Kingdom tax in respect of the disposal of
shares or ADSs.

United States taxation on capital gains

A US person generally will recognise capital gain or loss for US Federal
Income Tax purposes equal to the difference, if any, between the
amount realised on the sale and the US person’s adjusted tax basis in
the shares or ADSs, in each case as determined in US dollars. US persons
should consult their own tax advisers about how to determine the US
dollar value of any foreign currency received as proceeds on the sale of
shares or ADSs and the treatment of any foreign currency gain or loss
upon conversion of the foreign currency into US dollars. The capital gain
or loss recognised on the sale will be long-term capital gain or loss if
the US person’s holding period in the shares or ADSs exceeds one year.
Non-corporate US persons are subject to tax on long-term capital
gain at reduced rates. The deductibility of capital losses is subject
to limitations.

UK inheritance tax

Under the current estate and gift tax convention between the United
States and the United Kingdom, shares or ADSs (regardless of whether
they are situated in the United Kingdom for inheritance tax purposes)
held by an individual shareholder who is:
▪ domiciled for the purposes of the convention in the United States;

and

▪ 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 shares or ADSs 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.

An exception is if the shares or ADSs 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 shares or ADSs 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.

FINANCIAL STATEMENTS194

Unilever Annual Report and Accounts 2021

Issue of shares

Subject to the points noted below in respect of shares issued to
clearance services (such as Euroclear Nederland) or which are issued
into a depositary receipt system where the shares are to be held in
ADS form, no stamp duty or SDRT will arise on the issue of shares in
registered form by PLC.

Transfer of shares

Except in relation to clearance services and depositary receipt systems
(to which special rules outlined below apply), stamp duty at the rate of
0.5 per cent (rounded up to the next multiple of £5) of the amount or
value of the consideration given will generally be payable on an
instrument transferring PLC shares. A charge to SDRT will also generally
arise on an unconditional agreement to transfer PLC shares (at the rate
of 0.5 per cent of the amount or value of the consideration payable).
However, if within six years of the date of the agreement becoming
unconditional, an instrument of transfer is executed pursuant to the
agreement, and stamp duty is paid on that instrument, any SDRT
already paid will be refunded (generally, but not necessarily, with
interest) provided that a claim for repayment is made, and any
outstanding liability to SDRT will be cancelled. The liability to pay stamp
duty or SDRT is generally satisfied by the purchaser or transferee.

Shares held through clearance services including
Euroclear Nederland

Special rules apply where shares are issued or transferred to, or to a
nominee or agent for, a person providing a clearance service. In such
circumstances, SDRT or stamp duty may be charged at a rate of 1.5 per
cent, with subsequent transfers within the clearance service then being
free from SDRT and stamp duty (except in relation to clearance service
providers that have made an election under section 97A(1) of the
Finance Act 1986 which has been approved by HM Revenue & Customs,
to which the special rules apply).

In light of EU case law, HMRC accepted that the 1.5 per cent charge is in
breach of EU law so far as it applies to issues of shares or to transfers of
shares that are an integral part of a share issue. This EU case law will
continue to be recognised and followed pursuant to the provisions of
the European Union (Withdrawal) Act 2018 (the 'EUWA').

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 or ADSs
in the United States is not paid.

Where shares are dealt with through a clearing system or in the form of
ADSs, the situs of the shares may not be determinative of the situs of the
interests held by holders through such system or of such ADSs for United
Kingdom inheritance tax purposes. Where shares are dealt with through
Euroclear Nederland, there are arguments that the interests of
participants in Euroclear Nederland will be situated outside the United
Kingdom for the purposes of United Kingdom inheritance tax so long as
Euroclear Nederland maintains the book-entry register of such
participants’ interests outside the United Kingdom, although HMRC may
not accept this analysis. Similarly, there are arguments that ADSs
registered on a register outside the United Kingdom will be situated
outside the United Kingdom for the purposes of United Kingdom
inheritance tax, although again HMRC may not accept this analysis.
Shareholders to whom this may be relevant should consult an
appropriate professional adviser.

If the ADSs or the shares dealt with through Euroclear Nederland or
both are not situated in the United Kingdom, a gift of such ADSs or such
shares by, or the death of, an individual holder of such assets who is
neither domiciled nor deemed to be domiciled (under certain rules
relating to long residence or previous domicile) in the United Kingdom
will not generally give rise to a liability to United Kingdom inheritance
tax regardless of whether the estate and gift tax convention between
the United States and the United Kingdom applies. Special rules may
also apply to such ADSs or such shares dealt with through Euroclear
Nederland which are held on trust.

UK stamp duty and stamp duty reserve tax

The statements in this section are intended as a general guide to the
current United Kingdom stamp duty and stamp duty reserve tax ('SDRT')
position. Special rules apply to certain transactions such as transfers of
the shares to a company connected with the transferor and those rules
are not described below. Investors should also note that certain
categories of person are not liable to stamp duty or SDRT and others
may be liable at a higher rate or may, although not primarily liable for
tax, be required to notify and account for SDRT under the Stamp Duty
Reserve Tax Regulations 1986.

Backup withholding and information reporting

Payments of dividends and other proceeds with respect to ordinary
shares or ADSs by US persons will be reported to you and to the IRS as
may be required under applicable regulations. Backup withholding may
apply to these payments if you fail to provide an accurate taxpayer
identification number or certification of exempt status or fail to comply
with applicable certification requirements. Some holders are not subject
to backup withholding. You should consult your tax adviser as to your
qualification for an exemption from backup withholding and the
procedure for obtaining an exemption.

Disclosure requirements for US individual holders

US individuals that hold certain specified non-US financial assets,
including stock in a non-US corporation, with values in excess of certain
thresholds are required to file Form 8938 with their US Federal Income
Tax return. Such Form requires disclosure of information concerning
such non-US assets, including the value of the assets. Failure to file
the Form when required is subject to penalties. An exemption from
reporting applies to non-US 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.

Unilever Annual Report and Accounts 2021

195

HMRC’s published view is that the 1.5 per cent. SDRT or stamp duty
charge continues to apply to other transfers of shares into a clearance
service, although this has been disputed. In view of the continuing
uncertainty, specific professional advice should be sought before
incurring a 1.5 per cent stamp duty or SDRT charge in any circumstances.
Any liability for stamp duty or SDRT in respect of a transfer of shares into
a clearance service, or in respect of a transfer of shares within such a
service, which does arise will strictly be accountable by the clearance
service or its nominee but may, in practice, be payable by the relevant
participant in the clearance service.

Shares held in ADS form

On the basis of EU case law referred to above and the EUWA, there
should be no stamp duty or SDRT on an issuance of shares into a
depositary receipt system where such transfer is an integral part of the
raising of capital by the company concerned. A transfer of shares into a
depositary receipt system may be subject to SDRT or stamp duty may be
charged at a rate of 1.5 per cent, with subsequent transfers of
depositary receipts then being free from SDRT.

Any liability for stamp duty or SDRT in respect of a transfer of shares into
a depositary receipt system which does arise will strictly be accountable
by the depositary receipt system operator or its nominee but may, in
practice, be payable by the relevant holder of the depositary receipts.

An issue of ADSs by Deutsche Bank Trust Company Americas as
depositary in respect of the ADSs will not be subject to stamp duty or
SDRT. An agreement for the transfer of ADSs will not be subject to SDRT
but a charge to stamp duty will technically arise on the transfer of ADSs
if it is executed in the UK or relates to any property situated, or to any
matter or thing done or to be done, in the UK. However, the only
sanction for failing to pay such stamp duty is that the instrument of
transfer cannot be produced as evidence in a UK court. Therefore, no UK
stamp duty should in practice be payable on the acquisition or transfer
of existing ADSs or transfer of beneficial ownership of ADSs.

Description of securities other than equity securities

Deutsche Bank serves as the depositary (Depositary) for PLC’s American
Depositary Receipt Programme.

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:
▪
▪ Cancellation of ADSs: up to US 5¢ per ADS cancelled.
▪ Processing of dividend and other cash distributions not made

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

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
(i.e. upon deposit and withdrawal of shares);

▪ expenses incurred for converting foreign currency into US dollars;
▪ expenses for cable, telex and fax transmissions and for delivery of

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

FINANCIAL STATEMENTS196

Unilever Annual Report and Accounts 2021

Depositary payments – fiscal year 2021

Deutsche Bank has been the depositary bank for its American
Depositary Receipt Programme since 1 July 2014. Under the terms of the
Deposit Agreement, PLC is entitled to certain reimbursements, 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 US Sarbanes-Oxley
Act of 2002). In relation to 2021, PLC received $3,830,334 from
Deutsche Bank.

Defaults, dividend arrearages and delinquencies

Defaults Programme

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.

Unilever Annual Report and Accounts 2021

197

Purchases of equity securities

Share purchases during 2021

Please also refer to ‘Our shares’ section on page 76.

62,976,145 PLC ordinary shares or ADSs were purchased by or on behalf of PLC or any 'affiliated purchaser', as defined in Section 10b-18(a)(3) of the
US Securities Exchange Act of 1934, during the period covered by this annual report on Form 20-F.

Between 31 December 2021 and 24 February 2022 (the latest practicable date for inclusion in this report), PLC did not conduct 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 2021, and has concluded that such
internal control over financial reporting is effective. Management’s assessment and conclusion excludes the Paula's Choice, Welly and Onnit
from this assessment, as they were acquired on 2 August 2021, 29 January 2021 and 28 May 2021 respectively. These entities are included in our
2021 consolidated financial statements, and together they constituted approximately 3.8% of our total assets as at 31 December 2021 (of which
94% represented goodwill and intangible assets acquired) and approximately 0.4% of total turnover for the year ended 31 December 2021; and
▪ KPMG LLP, who have audited the consolidated financial statements of the Group for the year ended 31 December 2021, have also audited the
effectiveness of internal control over financial reporting as at 31 December 2021 and have issued an attestation report on internal control over
financial reporting.

Principal accountant fees and services

Our independent registered public accounting firm is KPMG LLP, London, United Kingdom, Auditor Firm ID: 1118

Audit fees(a)
Audit-related fees(b)
Tax fees(c)
All other fees(c)

€ million

2021

6 (d)

—

2020

2019

(d)

—

(a) Amount payable to KPMG in respect of services supplied to associated pension schemes was less than €1 million individually and in aggregate (2020: less than €1

million individually and in aggregate; 2019: less than €1 million individually and in aggregate).
Includes other audit services which comprise audit and similar work that regulations or agreements with third parties require the auditors to undertake.

(b)
(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 (2020: less than €1 million,

2019: less than €1 million).

(d) 2021 includes €5 million (2020: €6 million) for audits and reviews of carve-out financial statements of ekaterra. 2020 also includes €1 million for assurance work on

Unification.

FINANCIAL STATEMENTS198

Unilever Annual Report and Accounts 2021

Guarantor statements

On 13 August 2020, Unilever N.V. (NV) and Unilever Capital Corporation (UCC) filed a US Shelf registration, which was unconditionally and fully
guaranteed, jointly and severally, by NV, Unilever PLC (PLC) and Unilever United States, Inc. (UNUS) and that updated the NV and UCC US Shelf
registration filed on 27 July 2017, which was unconditionally and fully guaranteed, jointly and severally, by NV, PLC and UNUS.

As a result of Unification, PLC assumed NV’s liabilities in relation to debt issued under the US shelf registration programme. UCC and UNUS are each
indirectly 100% owned by PLC and consolidated in the financial statements of the Unilever Group. In relation to the US Shelf registration, US$12.1
billion of Notes were outstanding at 31 December 2021 (2020: US$11.5 billion; 2019: US$12.35 billion) with coupons ranging from 0.375% to 5.900%.
These Notes are repayable between 07 March 2022 and 12 August 2051.

All debt securities issued by UCC are senior, unsecured, and unsubordinated and are fully and unconditionally guaranteed, on a joint and several
basis, by PLC and UNUS.

In March 2020, the SEC amended Rule 3-10 of Regulation S-X and created Rule 13-01 to simplify disclosure requirements related to certain
registered securities, which we have adopted effective immediately. As noted above UCC and UNUS are 100% subsidiaries of Unilever PLC and are
consolidated in the financial statements of the Unilever Group. In addition, there are no material assets in the guarantor entities apart from
intercompany investments and balances. Therefore, as allowed under Rule 13-01, we have excluded the summarised information for each issuer
and guarantor.

The guarantees provide that, in case of the failure of the relevant issuer to punctually make payment of any principal, premium or interest, each
guarantor agrees to ensure such payment is made when due whether at the stated maturity or by declaration of acceleration, call for redemption
or otherwise. The guarantees also provide that the Trustee shall be paid any and all amounts due to it under the guarantee upon which the debt
securities are endorsed.

Unilever Annual Report and Accounts 2021

199

Cautionary 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. Forward-looking statements also include, but are not limited to, statements and information regarding the Unilever Group’s (the
‘Group’) emissions reduction targets and other climate change related matters (including actions, potential impacts and risks associated
therewith). These forward-looking statements are based upon current expectations and assumptions regarding anticipated developments and
other factors affecting the Group. They are not historical facts, nor are they guarantees of future performance or outcomes.

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; the effect of climate change on Unilever’s business;
Unilever’s ability to find sustainable solutions to its plastic packaging; 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. A number of these risks have increased as a result of the current Covid-19 pandemic.

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.

This document also contains data on the Group’s Scope 1, 2 and 3 emissions. Scope 1 and 2 emissions data is relatively easy to gather as it relates
to emissions from the Group’s own activities and supplied heat, power and cooling. Scope 3 emissions relate to other organisations’ emissions and
is therefore subject to a range of uncertainties, including that data used to model lifecycle footprints is typically industry-standard data rather than
relating to individual suppliers; lifecycle models such as the Group’s cover many but not all products and markets; and international standards and
protocols governing emissions calculations and categorisations evolve, as do accepted norms regarding terminology such as carbon neutral and
net zero. As value chain emissions data improves, shifting over time from generic modelled data to more specific data, the data reported in this
document is likely to evolve.

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 Annual Report on Form 20-F 2021.

This document is not prepared in accordance with US GAAP and should not therefore be relied upon by readers as such. The Annual Report on Form
20-F 2021 is separately filed with the US Securities and Exchange Commission and is available on our corporate website.

www.unilever.com

In addition, a printed copy of the Annual Report on Form 20-F 2021 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 Unilever Annual Report and Accounts 2021.

FINANCIAL STATEMENTSCautionary Statement
Cautionary 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; the effect of climate change on Unilever’s business; Unilever's ability to find
sustainable solutions to its plastic packaging; 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 Annual Report on Form 20-F 2019 and the Unilever Annual Report and
Accounts 2019.

This document is not prepared in accordance with US GAAP and should not therefore be relied upon by readers as such. The Annual Report
on Form 20-F 2019 is separately filed with the US Securities and Exchange Commission and is available on our corporate website

www.unilever.com

In addition, a printed copy of the Annual Report on Form 20-F 2019 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 Unilever Annual Report and Accounts 2019 or the Annual Report on Form 20-F 2019.

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For further information about
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Unilever PLC
Head Office
100 Victoria Embankment
London EC4Y 0DY
United Kingdom
T +44 (0)20 7822 5252

Registered Office
Unilever PLC
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Wirral
Merseyside CH62 4ZD
United Kingdom

Registered in England and Wales
Company Number: 41424