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In this report
Strategic Report
About Unilever
2
Unilever at a glance
4
Our strategy & Growth Action Plan
Review of the Year
6
Chair’s statement
8
Chief Executive Officer’s statement
10 Unilever Group Financial Review
14
Business Group Review
34 Our People & Culture
38
Planet & Society
Our Performance
56
Financial performance
65 Non-financial performance
Our Principal Risks
70
71
Risk management approach
Principal risks
79
Viability statement
Governance Report
82 Chair’s Governance statement
84
Board of Directors
86 Unilever Leadership Executive (ULE)
88 Corporate Governance overview
102 Report of the Nominating and Corporate
Governance Committee
107 Report of the Audit Committee
112 Report of the Corporate Responsibility Committee
116 Directors’ Remuneration Report
Financial Statements
156 Statement of Directors’ responsibilities
157 KPMG LLP’s Independent Auditor’s Report
173 Consolidated Financial Statements Unilever Group
177 Notes to the Consolidated Financial Statements
227 Company Accounts Unilever PLC
230 Notes to the Company Accounts Unilever PLC
234 Group Companies
245 Shareholder information – Financial calendar
246 Additional Information for US Listing Purposes
Online
You can find more information about Unilever online at
www.unilever.com
The Unilever Annual Report and Accounts 2023 (and the
Additional Information for US Listing Purposes) along with other
relevant documents can be downloaded at
www.unilever.com/investors/annual-report-and-accounts
References to information on websites in this document are
included as an aid to their location and such information is not
incorporated in, and does not form part of this document. Any
website URL is included as text only and is not an active link.
Realising our full potential
Unilever is a company with many strengths. We have
a portfolio of iconic global and local brands serving
consumers in almost every part of the world. Our
talent base is engaged and diverse. And we have
industry-leading capabilities in science, innovation
and sustainability.
Our category-focused organisation is fully operational,
with our five Business Groups organised to accelerate
our growth, supported by a digital and technology-
enabled Business Operations team.
Nevertheless, our business performance in recent
years has not matched our full potential, and so we
have set out a Growth Action Plan to close that gap.
Our action plan outlines the steps we will take to
deliver faster growth, drive productivity and simplicity,
and dial up our performance culture. We are stepping
up our execution across each area, with relentless
focus: fewer things, done better, with greater impact.
This Annual Report and Accounts sets out the work
we have already started and our priorities for the
year ahead.
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
About Unilever
Unilever at a glance
We are a global consumer goods business with strong
fundamentals and differentiated capabilities.
Category-focused organisation to accelerate growth
Beauty & Wellbeing
Personal Care
Home Care
Nutrition
Ice Cream
€12.5bn
Turnover
€13.8bn
Turnover
€12.2bn
Turnover
€13.2bn
Turnover
€7.9bn
Turnover
Powered by strong fundamentals and capabilities
Global footprint & reach
We are a global consumer goods business, with a portfolio serving
consumers in almost every part of the world.
Worldwide
geographic reach
Strong distributive
trade footprint
Emerging market
strength
190
countries where our
products are sold
4.4m
retail stores served by
distributors in top 10
emerging markets
58%
of Group turnover in
emerging markets
Iconic global & local brands
We have about 400 brands meeting consumers’ daily needs,
from household staples to premium indulgence.
High household
penetration
3.4bn
people use our
products every day
30 Power Brands
~75%
Marketing
powerhouse
€8.6bn
turnover from our Power
Brands
spend on brand and
marketing investment
Engaged & diverse talent base
Our people work in factories, offices, distribution warehouses,
R&D centres and customer-facing roles across 100+ countries.
Global talent
Highly engaged
Gender diverse
128,000 84%
55%
people employed by
Unilever
engagement score in
UniVoice employee survey
of our managers
are women
2
Unilever Annual Report and Accounts 2023
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
About Unilever
Digital & technology-enabled operations
Our Business Operations organisation is making our end-to-end
value chain more efficient and agile.
Global supply chain Future-fit
manufacturing
Digitally connected
logistics
57,000 280+
suppliers in around
150 countries
factories operated
by Unilever
23m
customer orders
serviced
Differentiated science & technology
Our 5,000+ R&D team are working to create innovations to help
drive unmissable superiority.
Investment in R&D
Leading science
Innovating for
growth
€949m 20,000+ €1.8bn
spend on R&D
patents protecting
our discoveries and
breakthrough innovations
incremental turnover
from innovation
Deep sustainability expertise
We have been pioneers in sustainable business for over
a decade, building resilience and creating strong foundations
for responsible growth.
Recognised
industry leader
AAA-
2023 rating in CDP
Forests, Water and
Climate
Climate
Livelihoods
-74%
1.9m
reduction in GHG
emissions in our
operations since 2015
SMEs use our digital
platforms to help grow
their businesses
Creating value for our stakeholders
Our business model leverages our organisational structure, deep operational
know-how and industry-leading expertise to create value.
Shareholders
Our People
Consumers
Customers
Suppliers &
Business
Partners
Planet &
Society
All numbers above for 2023 reporting period
Unilever Annual Report and Accounts 2023
3
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
About Unilever
Our strategy & Growth Action Plan
We are stepping up our execution to deliver improved
performance – focusing on faster growth, productivity
and simplicity, and performance culture.
Our purpose
Making sustainable living commonplace
Our financial ambition
Consistent and competitive growth driving top third Total Shareholder Return(a)
Where to play
Build a consistently high growth portfolio
Win with our brands, powered by unmissable superiority
Accelerate growth in key markets and categories(b)
Lead in key channels
How to win
Our Growth Action Plan
Strong fundamentals and a
focused action plan to unlock
potential and deliver consistent
value creation:
■ Faster growth: driving
unmissable brand superiority,
innovation and investment
behind our 30 Power Brands.
■ Productivity & simplicity: building
back gross margin and leveraging
the full benefits of our organisation.
■ Performance culture: dialling
up our performance edge and
rewarding out-performance.
(a) See pages 116 to 153 for details on TSR.
(b) Key markets and categories determined by the
growth potential in each of our Business Groups.
4
Unilever Annual Report and Accounts 2023
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
About Unilever
Faster growth
1 Focus first on 30 Power Brands
■ Ensure consistent in-market execution and brand support for Power Brands.
■ Apply same focused blueprint to other brands in the future.
2 Drive unmissable brand superiority
■ Address all elements of consumer
4 Increase brand investment and returns
■ Focus incremental investment on bigger
preference.
■ Measure six superiority attributes: product,
proposition, packaging, place, promotion,
pricing.
multi-channel platforms, including digital.
■ Ensure increased effectiveness of investment.
3 Scale multi-year innovation
■ Prioritise scalable innovations that drive
5 Selectively optimise portfolio
■ Continued portfolio optimisation.
category growth and market development.
■ No transformational acquisitions in the
■ Leverage our strong science and
technology platforms.
foreseeable future.
See Business Group Review pages 14-33
Productivity & simplicity
6 Build back
gross margin
■ Shift focus from gross savings
7 Focus sustainability
goals
■ Four key priorities: climate,
to net productivity.
■ Step up capital expenditure
and apply disciplined approach
to restructuring.
nature, plastics and
livelihoods.
■ Focus on short-term
roadmaps.
8 Drive benefits of the
category-focused
organisation
■ Further simplify operating
model.
■ Strengthen frontline customer
development roles.
See Group Financial Review pages 10-13
See Planet & Society pages 38-55
See Our People & Culture pages 34-37
Performance culture
9 Renewed team
■ Dial up performance edge.
10 Drive and reward out-performance
■ Set simpler, more visible in-year targets.
■ Drive fewer, clearer priorities with more
single-point accountability.
■ Clearly link new reward framework to
value creation.
See Governance Report pages 88-101
See Directors' Remuneration Report pages 116-153
Unilever Annual Report and Accounts 2023
5
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Review of the Year
Chair’s statement
"
I believe we
have the resource
and expertise
needed to get our
brands growing
consistently and
competitively
again.
"
Ian Meakins
Chair
It is an honour to be writing to you for the first time as Chair
of Unilever PLC. Unilever is a great company with a long and
distinguished history. There are many strengths on which
we can build for the future: great brands, well positioned in
fast-growing markets; a geographic footprint that reaches
across the developed and emerging world; and a talented
and committed workforce. With these strengths, I believe
we can deliver attractive levels of growth over both the short
and the long term to meet the needs of all our stakeholders.
Unfortunately, results going back several years have not met
our and the markets' expectations. We have underperformed
relative to a number of our principal competitors. We see
this reflected in the share price, with Unilever shares down
compared to five years ago, having performed unfavourably
against both the FTSE100 and our peer group average.
While there were positive and encouraging aspects to the
Group’s financial results in 2023, as covered in this report,
our performance overall was variable. In some areas we are
doing reasonably well, such as Beauty & Wellbeing in the US
and Home Care in Latin America. Our global Deodorants and
Food Solutions businesses also both did well last year. But Ice
Cream performed poorly, while Home Care European volumes
declined double-digit. Nutrition also saw volumes in Europe
decline in the face of rising costs and increased competition.
I do believe we have the resource and expertise needed to
get our brands growing consistently and competitively.
Demonstrating this ability will be a key priority for all of
us in 2024 and beyond.
Results
The Group delivered underlying sales growth in 2023 of
7%. This was driven mainly by price growth in response to
continuing high levels of inflation, although the year did
see a welcome return to volume growth as prices began to
moderate. Turnover growth was down (0.8)% due to adverse
currency and net disposals. Underlying operating margin was
up 60bps on the prior year, to 16.7%, driven by improvements
in gross margin. However, overheads were up by 10bps –
highlighting the opportunity to drive further productivity.
Operating margin was down 150bps due to the one-off gain
on disposal of the global tea business in 2022.
Underlying earnings per share (EPS) was up only 1.4% because
of a negative currency impact of 9.6%, driven by our exposure
to emerging markets. The lack of EPS growth is the primary
reason why our share price has been flat over recent years.
Cash flow performance was strong. We returned €5.9 billion to
shareholders in 2023 through dividends and share buybacks,
having completed the final two €750 million tranches of our
€3 billion buyback programme during the year. We have
announced a further buyback programme of €1.5 billion for 2024.
Growth Action Plan
Organic growth of our brands is the number one priority and
our CEO, Hein Schumacher – who took over on 1 July 2023 –
has wasted no time in putting into effect a concrete action
plan to accelerate growth, drive productivity and simplicity,
and sharpen Unilever’s performance edge.
The plan will drive action by focusing on fewer, bigger priorities
and by applying a more rigorous approach to execution and
delivery. For example, our Power Brands will be prioritised for
investment, particularly when it comes to delivering large-scale,
differentiated, science-backed innovations. The unmissable
brand superiority process will also be rolled out rapidly to
ensure we have the right diagnosis and action plans to deliver
brand growth and share gains. We will continue to increase
brand investment, funded by cost savings and productivity
gains. Changes to the organisation will give greater clarity in
driving P&L accountability into the five Business Groups. Better
management of costs, including a switch to measuring net
productivity – rather than gross savings – will help to fund
the investments needed to accelerate growth while ensuring
we also meet our objective of margin expansion.
6
Unilever Annual Report and Accounts 2023
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Review of the Year
While organic growth is the number one priority, the Board
will continue to evaluate opportunities to improve Unilever’s
portfolio to deliver faster growth, as we have done most
recently, for example, with the agreement to acquire the fast-
growing K18 prestige hair care brand in the US and with the
planned disposal of the non-strategic Elida Beauty personal
care brands. Until we have delivered faster organic growth,
we do not think we should be considering large-scale
acquisitions. We know that accelerated growth through
the disciplined implementation of the Growth Action Plan
is by far the best route to value creation.
Climate Transition Action Plan
We will continue to work hard to become a more sustainable
business having made progress again in 2023. We go into
2024 with a sharpened focus around four major platforms that
most support our sustainability agenda and our commercial
objectives – climate, nature, plastics and livelihoods. Our plans
are now fully integrated into the Business Group strategies,
which we believe will enable us to make progress on
sustainability while also delivering better performance.
Climate change represents one of the biggest threats to the
global economy and in March 2024 we published our updated
Climate Transition Action Plan (CTAP), in advance of an
advisory shareholder vote at our Annual General Meeting in
May 2024. While there was overwhelming support for our first
CTAP at our AGM in 2021, we take nothing for granted and
know that the updated CTAP will need to measure up to the
higher levels of accelerated delivery now demanded.
Board and Governance
Responsibility for transforming Unilever’s performance will
be driven by Hein Schumacher and his Executive team. The
Board’s role will be to provide appropriate support and
challenge to Hein and his team. Ensuring we have a high-
calibre Board that approaches this task with energy and
conviction will be a key priority for me in 2024 and beyond.
Good governance is vital for all businesses. At times of
geopolitical and economic instability like this, it plays a
particularly important role in building and retaining trust
among a diverse base of stakeholders. Unilever operates
to a high level of governance and the Board will maintain
this approach going forward.
Following widespread consultation, we will bring forward
a revised Remuneration Policy for shareholders to consider
at the 2024 AGM. The proposals address the constructive
feedback we have received, and will form an important part of
the measures being taken to sharpen Unilever’s performance.
I would like to thank the Board members for their work in 2023.
A special thank you to those colleagues who will be stepping
down from the Board at the 2024 AGM: Nils Andersen as our
former Chair, Judith Hartmann, Youngme Moon and Strive
Masiyiwa. Thanks also to Feike Sijbesma, who stepped down in
October 2023. Finally, thank you to our two Executive Directors
who stood down in 2023: Alan Jope as CEO, on 30 June, and
Graeme Pitkethly as Chief Financial Officer, on 31 December.
The Board is delighted to be working with the new Executive
team that Hein has put together, and especially our new CFO,
Fernando Fernandez, who was appointed after an extensive
internal and external search. From 1 March 2024, we are also
very pleased to welcome Judith McKenna to the Board. Judith
brings a wealth of experience, most recently as President and
CEO of Walmart International.
Looking ahead
The Board and management of the company are all totally
committed to deliver a significant step-up in Unilever’s long-
term performance, starting in 2024. We have the necessary
talent and resources and by focusing hard on driving growth,
I am confident we can achieve the step-up required.
I am delighted and honoured to be taking up this role and
excited about the possibilities ahead. Unilever is a business
with great assets, not least our talented and dedicated
workforce. I want to thank each and every one of them for
their considerable efforts in 2023. I look forward to meeting
more of our Unilever team and working alongside them
in 2024.
Ian Meakins
Chair
Unilever Annual Report and Accounts 2023
7
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Review of the Year
Chief Executive Officer’s statement
"
The Growth Action
Plan is highly
operational,
reflecting the
need to step up
the quality and
the consistency of
our execution.
"
Hein Schumacher
Chief Executive Officer
I began my career at Unilever and it is great to be back thirty
years later as CEO. I have returned to a company possessing
many of the qualities needed to win in today’s consumer
goods environment: great brands, leading market positions
and talented people.
Today, Unilever is also one of the world’s most global fast-
moving consumer goods businesses, with nearly 60% of
turnover in 2023 coming from emerging markets. That
is a huge strength in such a highly competitive global
environment. A sharpening of the portfolio over recent
years and an overhaul of the company’s organisational
structure have underpinned these strengths further.
This is key because there is an urgent need now to transform
performance in line with Unilever’s potential. After a lengthy
period in which the share price has underperformed, it is
important that we move fast to rebuild investor confidence.
That means delivering higher quality, competitive, top- and
bottom-line growth, year in, year out. Work to achieve this is
well underway with early signs of progress apparent in the
results delivered for 2023.
Results and performance 2023
Underlying sales growth of 7% was broad-based, across each
of the five Business Groups, with two – Beauty & Wellbeing and
Personal Care – also delivering good volume growth. Managing
the balance of price and volume growth in a period of more
normalised inflation will be a key priority for the year ahead.
Turnover was €59.6 billion, down (0.8)% versus the prior year,
including (5.7)% adverse foreign exchange translation and
(1.7)% from disposals net of acquisitions.
On the bottom line, underlying operating margin was up
60bps, driven by an improvement of 200bps in gross margin,
with 330bps coming in the second half of the year. This
enabled us to step up much needed investment behind
our brands, by €0.7 billion in 2023. Free cash flow delivery
was strong, at €7.1 billion, with 111% cash conversion,
8
Unilever Annual Report and Accounts 2023
re-affirming the financial health of the business. Cash flow
from operating activities increased by €1.5 billion compared
to the prior year.
The quality of growth varied across the Business Groups.
Taken across the Group, growth was not competitive. We lost
market share and finished the year with the percentage of
the business winning share – an imperfect but nevertheless
important measure of competitiveness – at only 37% (see
page 12). We know this is not good enough and we are moving
quickly to address it.
To that end, we set out a comprehensive and detailed
action plan in October to accelerate Unilever’s growth
and strengthen our competitive position (see pages 4-5).
Growth Action Plan
The plan is highly operational, reflecting the need to step up
both the quality and the consistency of our execution. It is
divided into three elements but is underpinned by one simple
premise: the need to do fewer things, better, with greater
impact. This idea of greater focus permeates everything we
are doing and will remain our lodestar in the months and years
ahead. It applies first and foremost to our most important
objective – faster growth.
Faster growth
Our top 30 Power Brands represent our biggest opportunity.
They account for around three-quarters of turnover and
delivered underlying sales growth of 8.6% in 2023. We are
therefore devoting more of our energy and resource to these
proven drivers of growth.
We are not only prioritising these brands for investment –
whether in marketing support, R&D or in the building of digital
capabilities and platforms – but also in ensuring they appeal
to consumers across multiple dimensions, making them what
we are calling ‘unmissably superior’. The initial focus on these
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Review of the Year
30 brands is to ensure our plans are executed brilliantly. We
will then drive the plans across the wider portfolio.
Under the Growth Action Plan, we will also scale our
innovations more systematically and over longer time
horizons, leveraging Unilever’s strengths in science and
technology more effectively. This will help to fuel the growth
of our brands, not least by ensuring we develop and expand
the categories in which they compete.
We have world-leading brands, which we are convinced –
with the right focus and attention – can drive accelerated levels
of growth. Hence, we see no need to pursue transformational
acquisitions at this stage. However, we will continue to take
opportunities wherever we can to optimise the portfolio.
We did this last year with the acquisition of the premium ice
cream brand, Yasso, and with the agreement to acquire the
prestige hair care brand, K18 (completed in February 2024).
We sharpened the portfolio further in 2023 with the disposal of
Suave in North America and Dollar Shave Club, and we expect
to complete the sale of the Elida Beauty brands by the middle
of 2024.
Fernando is one of a number of changes to the executive
team. We have assembled a top team eminently capable
of unlocking Unilever’s potential through a combination of
promoting exceptionally capable internal candidates, by
matching experience closely to requirements, as with Peter ter
Kulve’s appointment as President Ice Cream, and by bringing
in world leading talent from outside – such as the announced
appointments of Heiko Schipper as President Nutrition and
Mairead Nayager as Chief People Officer. See page 87 for more
on ULE appointments.
Leadership changes are a necessary condition for achieving
the step-up in performance we need, but are not enough by
themselves. A key task for the new executive team will be to
oversee a dialling-up of Unilever’s performance edge. We will
do this by making some important shifts in the way we think
about, approach and reward performance. Going forward,
the emphasis will be on a series of actions designed to achieve
a stronger link between performance and reward. Our work
here will also be shaped and guided by a streamlined set of
leadership behaviours. Again, fewer things, done better,
with greater impact.
Productivity and simplicity
Stronger growth will be enabled through a combination of
higher productivity and reduced complexity – the second
pillar of our action plan.
We are making a number of interventions here, first by
restoring gross margin to pre-pandemic levels. This is being
done through tighter cost control, including shifting focus
from gross savings to net productivity, thereby enabling us
to determine more accurately the true level – and impact –
of costs on profitability. We made progress towards this
objective last year with gross margin rising to 42.2%, but have
a lot more to do to meet our ambitions and return to more
competitive levels.
By highlighting more clearly where the accountability for
costs lies, our new organisational structure is facilitating the
delivery of this goal. The implementation of the changes to the
organisation are now complete and we are squarely focused
on reaping the full benefits of the new simplified model.
The concept of fewer things, done better, with greater impact
applies equally to our sustainability goals. That is why we are
honing our sustainability efforts around four critical platforms
– climate, nature, plastics and livelihoods – and doing so on
the basis of exacting, short-term, measurable and transparent
goals, complementing our more long-term objectives.
In many ways this is a natural extension of the pioneering
work led by my predecessors, which has established Unilever
as a leader in the field. I am determined we should retain that
leadership role, primarily through enhancing our reputation
for delivery and for demonstrating even more clearly how
progress on sustainability drives business performance.
Leadership changes and performance culture
We are approaching the opportunities and challenges ahead
with a refreshed leadership team having made a significant
number of changes at the most senior levels of the company.
I am excited to be working alongside our new and highly
experienced Chair, Ian Meakins. We share a belief in
Unilever’s potential, as well as a desire to turn potential
into performance as soon as possible. I am also delighted to
be partnered by our new CFO, Fernando Fernandez, whose
experience and knowledge of the consumer goods industry
make him well placed to help lead a step-up in Unilever’s
performance.
Outlook
It is likely the world economy will remain in a state of flux
over the year ahead. The increased volatility brought about
by geopolitical tensions and the effects of climate change
will continue to bear down on global growth. Consumers across
the world will continue to feel the effects of multi-year inflation,
although we see inflation easing to more normalised and
historic levels in most of our markets. Some of our emerging
market geographies were hit last year by significant currency
devaluations. We expect to see a slow recovery there in 2024.
In Europe, growth will remain subdued, although we remain
positive in our outlook for this important Unilever market.
Despite these pressures and uncertainties, we expect
underlying sales growth for 2024 to be within our multi-year
3-5% growth range, with more balance between volume and
price growth. We have a robust plan and set of responses in
place, not just to weather the economic storms, but to put
Unilever on the road to more sustained levels of volume-led,
competitive growth. The potential at Unilever is significant.
We are all focused on doing what is needed to unlock that
potential and ensure we deliver improved returns to
shareholders.
Acknowledgements
Finally, I want to thank my predecessor, Alan Jope, and our
outgoing CFO, Graeme Pitkethly, for all their support and for
their long service to Unilever. My thanks also to Nils Andersen
for his guidance and support during his time as Chair.
In re-joining Unilever, I have received a very warm and
generous reception from colleagues across the company.
My appreciation goes to everyone at Unilever for that, as
well as for the hard work and commitment that went into
delivering the results for 2023. I am confident that together
we can go on to achieve great things in the years ahead.
Hein Schumacher
Chief Executive Officer
Unilever Annual Report and Accounts 2023
9
Review of the Year
Unilever Group Financial Review
Improving financial performance through implementing
the Growth Action Plan at pace, with positive 2023
delivery against our multi-year financial framework.
10
Unilever Annual Report and Accounts 2023
Performance highlights
Turnover in 2023
€59.6bn
2022: €60.1bn 2021: €52.4bn
Turnover growth
Underlying sales growth
Operating margin
Underlying operating margin
Pages 11 to 32 use GAAP and non-GAAP measures to explain the performance
of our business. See page 59 to 64 for further information.
Unilever Annual Report and Accounts 2023
11
Review of the Year
Group Financial
Review
"
2023 saw a return to
volume growth and gross
margin expansion, however
our competitiveness was
disappointing. We are now
focused on executing the
Growth Action Plan, to realise
Unilever's full potential.
"
Fernando Fernandez
Chief Financial Officer
Highlights
Turnover growth down 0.8% due to
adverse currency and net disposals.
USG of 7.0% with a return to positive
volumes of 0.2%.
30 Power Brands accretive to growth and
margins, with underlying sales up 8.6%
and increased brand and marketing
investment behind them.
Strong cash conversion of 111% with Free
Cash Flow up €1.9 billion to €7.1 billion.
12
Unilever Annual Report and Accounts 2023
Year in summary
Economic volatility, continued inflationary and cost of living
pressures continued in 2023. While these eased in the second half
of the year, uncertainty remained amid geopolitical tensions.
Against this backdrop, we delivered an improving financial
performance, with the return to volume growth and margin
rebuilding. The Group generated turnover of €59.6 billion,
operating profit of €9.8 billion, net profit of €7.1 billion and
free cash flow of €7.1 billion during the year.
Growth
Turnover for the year was €59.6 billion, down (0.8)% versus
2022. Underlying sales growth contributed 7.0%, and we saw
a negative impact from acquisitions and disposals of (1.7)%,
with the disposals of Tea and Suave partially offset by the
inclusion of Nutrafol and Yasso.
Beauty & Wellbeing grew underlying sales by 8.3%, with strong
volume growth of 4.4%. Prestige Beauty and Health & Wellbeing
continued to grow double-digit and now account for a quarter
of Beauty & Wellbeing’s turnover. Personal Care grew underlying
sales 8.9%, with 3.2% from volume and 5.5% from price, led by
strong sales growth of Deodorants. Home Care grew underlying
sales 5.9%, driven by 6.8% from price and (0.9)% from volume, with
positive volumes in emerging markets offset by a double-digit
decline in Europe. Nutrition grew underlying sales 7.7%, with 10.1%
from price and volumes down (2.2)% as we responded to higher
input costs and a challenging European market. Ice Cream’s
underlying sales growth was disappointing at 2.3%, with price
growth of 8.8% and a volume decline of (6.0)%, reflecting the
impact of downtrading in the in-home channels. See page 14
to 33 for more on Business Group performance.
Our 30 Power Brands, identified as a key focus in the Growth Action
Plan, contributed around 75% of the Group’s turnover and grew
8.6%. The percentage of our business winning market share(a) on
a rolling 12-month basis was disappointing at 37%. This poor
performance reflects share losses to private label in Europe,
consumer shifts to super-premium segments in North America and
a significant reduction of unprofitable active SKUs globally. Our
competitiveness is not good enough and we are moving quickly
to address it.
Acquisition and disposal activities had a negative impact of (1.7)%
to turnover, driven by the Tea business disposal, partly offset by
strong growth in Nutrafol, which we acquired in 2022. More details
on acquisitions and disposals are in note 21 on pages 220 to 222.
Emerging markets (58% of Group turnover) grew underlying sales
8.5%, with 1.6% from volume and 6.9% from price. Latin America,
Turkey and Africa delivered double-digit growth. India grew mid-
single digit led by volume, with lower input costs that led to
negative pricing in the fourth quarter. Sales in China grew low-
single digit led by volume while the market recovery continued to
be uneven and slower than expected. Growth in South East Asia
was impacted by a sales decline in Indonesia in the fourth quarter
as consumers avoided the brands of multinational companies in
response to the geopolitical situation in the Middle East.
Underlying sales in developed markets (42% of Group turnover)
grew 4.8% in the full year with 6.7% from price and (1.8)% from
volume. North America delivered strong growth of 5.8% with 2.5%
from volume and 3.3% from price, with continued double-digit
underlying sales growth in Prestige Beauty and Health &
Wellbeing. Volume growth in North America accelerated
throughout the year leading to volume growth of 6.3% in the
fourth quarter. In Europe, underlying sales growth was 4.1%,
driven by 12.8% from price given its higher exposure to categories
with significant cost inflation, and a volume decline of (7.7)%.
(a)
Competitiveness % Business Winning measures the aggregate turnover of the
portfolio components (country/category cells) gaining value market share as a
% of the total turnover measured by market data. It assesses what percentage
of our revenue is being generated in areas where we are gaining market share.
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Review of the Year
Margin
Operating profit was €9.8 billion which included a gain on
disposal of €0.5 billion mainly related to the disposal of our
Suave portfolio spread across Beauty & Wellbeing and
Personal Care categories. Meanwhile, there were €0.5 billion
in restructuring costs from transformation technology and
supply chain projects, and continued investment to embed the
Group’s category-focused organisation model. This was down
(9.3)% from the prior year primarily due to a gain of €2.3 billion
recognised on the disposal of the global tea business in 2022.
Underlying operating profit was €9.9 billion, up 2.6% versus
the prior year. Underlying operating margin increased 60bps
to 16.7%, with gross margin improving by 200bps to 42.2%. The
impact of net material inflation, of around €1.8 billion was more
than mitigated through improved productivity, price and mix.
Brand and marketing investment was 14.3% of turnover which
was an increase of 130bps. Overheads marginally increased as
we continued to invest in the expansion of our Prestige Beauty
and Health & Wellbeing businesses.
Cash, capital allocation and earnings
We delivered strong cash conversion of 111% and generated
free cash flow of €7.1 billion, an increase of €1.9 billion
compared to 2022. This increase was largely driven by higher
underlying operating profit and improved working capital,
and included €0.4 billion linked to a tax refund in India.
In 2023, we returned €5.9 billion to shareholders through
dividends and share buybacks. We completed the final
two €750 million tranches of our €3 billion share buyback
programme. Dividend payments were maintained in line
with prior year. Reflecting the Group's continued strong cash
generation we announced a share buyback programme of
€1.5 billion to be conducted during 2024.
Diluted earnings per share were €2.56, a (14.2)% reduction
versus prior year which included the gain on the disposal
of our Tea business. Underlying earnings per share increased
1.4% to €2.60, including (9.6)% of adverse currency. Constant
EPS increased by 11.0%, reflecting strong operational
performance, lower net finance costs and a reduction
in the number of shares as a result of the share buyback
programme, partially offset by a higher underlying effective
tax rate of 25.6%.
Portfolio reshaping
We continued to reshape the portfolio, allocating capital to
premium segments through selective bolt-on acquisitions
and divesting lower-growth businesses while balancing
investment in the business and shareholder returns.
We acquired Yasso Holdings, Inc., a premium frozen Greek
yogurt brand in the US, which completed on 1 August, and
K18, a premium biotech hair care brand, which completed on
1 February 2024. We also announced three disposals during
the year: Suave in North America, which completed on 1 May;
Dollar Shave Club, which completed on 1 November; and Elida
Beauty, which is expected to complete by mid-2024.
Looking forward
We are confident that the Growth Action Plan, which we set out in
October 2023, will strengthen our performance within our multi-
year financial framework. We will focus on further rebuilding
gross margin to reinvest behind our 30 Power Brands, stepping
up volume growth and delivering improved competitiveness.
Our financial ambition is to deliver Total Shareholder Return (TSR)
in the top third of our peer group.
Our Multi-Year Financial Framework
Our financial framework is to deliver long-term value creation through our Growth Action Plan which will drive
earnings growth, a strong cash flow and a growing dividend. Our 2023 results against the framework are below:
USG of 3-5%
7.0%
Modest margin
expansion
'+60bps
100% cash
conversion
111%
See pages 56 to 64
See pages 56 to 64
See pages 56 to 64
Mid-teens ROIC
EPS growth and an
attractive dividend
Delivering TSR in top
third of our peer group
16.2%
UEPS
growth
Dividend
payout*
1.4%
66%
Bottom
third
See pages 56 to 64
See pages 56 to 64
See pages 116 to 153
*Calculated as dividend per share / underlying earnings per share
Unilever Annual Report and Accounts 2023
13
Review of the Year
Beauty & Wellbeing
We want to shape a new era of inclusive beauty
and wellbeing. Our commitment to ‘Purpose, Science,
Desire’ sits at the heart of our brands and guides
us in delivering high-performing and appealing
products for consumers.
14
Unilever Annual Report and Accounts 2023
Performance highlights
Turnover in 2023
€12.5bn
2022: €12.3bn 2021: €10.1bn
Turnover growth
Underlying sales growth
Operating margin
Underlying operating margin
Pages 11 to 32 use GAAP and non-GAAP measures to explain the performance
of our business. See page 59 to 64 for further information.
Unilever Annual Report and Accounts 2023
15
Review of the Year
Purpose, Science,
Desire
"
We continued to embed
our 'Purpose, Science,
Desire' framework into our
brand propositions this year,
alongside a focus on volume
growth and premiumisation.
"
Priya Nair
President, Beauty & Wellbeing*
Highlights
Hair Care grew mid-single digit through
a combination of price and volume
led growth.
Prestige Beauty and Health & Wellbeing
grew double-digit and now represent
25% of turnover.
Vaseline, one of our Power Brands,
reached €1 billion of turnover in 2023.
* Fernando Fernandez, now CFO, was President of Beauty
& Wellbeing until 31st December 2023.
16
Unilever Annual Report and Accounts 2023
About Beauty & Wellbeing
We are a global player in the fast-growing beauty and health
& wellbeing markets. In Hair Care we compete for global
leadership, and our Skin Care portfolio is particularly strong in
Asia. Our Prestige Beauty and Health & Wellbeing businesses
have a strong presence in high-growth areas including
Prestige Skin Care and Hair Care, Colour Cosmetics, and
Vitamins, Minerals and Supplements.
Our performance in 2023
In 2023 we delivered a strong full year performance. Turnover
increased by 1.8%, while underlying sales growth was 8.3%
balanced between good volume growth at 4.4% and price at
3.8%, with an unfavourable currency impact of (6.2)% driven
by the weakening of currencies in key markets such as India
and US.
The strong full year performance reflects continued double-
digit growth in Prestige Beauty and Health & Wellbeing as
well as innovations in our Skin Care and Hair Care brands.
Europe delivered strong growth driven by price with slightly
negative volume.
Operating profit was €2.2 billion, which was flat compared to
the prior year. Non-underlying items were €122 million from
acquisition and disposal related costs, and restructuring
spend, offset by a gain from the disposal of our Suave business
in North America. Underlying operating profit was flat
compared to the prior year at €2.3 billion.
Our strategic priorities
The enduring consumer trends which make beauty and wellbeing
an attractive industry remained in 2023, notably demand for more
premium science-backed products, and a desire for inclusive
beauty. Our strategy is firmly rooted in these trends and focuses
on three key priorities: premiumising our core Hair Care and Skin
Care brands; accelerating our high-growth Prestige Beauty and
Health & Wellbeing portfolios; and ongoing focus on gross margin
through productivity, complexity reduction and strengthening
operational execution. Improving our competitiveness in terms of
value is a key priority for the year ahead.
Premiumising our Power Brands
Our Hair Care and Skin Care Power Brands – Sunsilk,
TRESemmé, Dove, Clear, POND's and Vaseline – continue
to use science and technology to elevate their superiority
credentials, alongside market making to scale innovations.
This year we prioritised investment in these brands across our
key markets. Sunsilk’s strong multi-market execution shows the
effectiveness of this approach, with strong growth this year.
Breakthrough science
Multi-year innovations which support premiumisation provide
a key growth platform for our brands – and will help to restore
competitiveness in Hair Care, especially in the US and India.
This year we rolled out a number of new breakthrough
innovations to support the ongoing premiumisation of our Hair
Care and Skin Care portfolios.
Clear continued its transformation to a premium holistic scalp
care offering with a new anti-dandruff formula – Clear Men
Scalp Pro Anti-Hair Fall – which was first launched in China
last year leading to market share gains. Along with Clear
Scalpceuticals Hair Fall Resist, the brand has now expanded
the range to three other key markets – Thailand, Turkey and
Brazil. POND’s also successfully launched an innovation
in Indonesia, with further launches in 2024 planned. The
POND'S Bright Miracle range includes patented technology
for micro-repair.
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Review of the Year
Market-making at scale
Alongside landing new innovations, we are stepping up
our focus on market development. The success of Vaseline
in recent years exemplifies our approach, following the
launch of patented and clinically-proven Gluta Glow skin care
technology in South East Asia two years ago. We have now
expanded the range to India and a number of Middle Eastern
markets, alongside launching another variant, Vaseline Pro-
Age Restore, in Thailand and other South East Asian markets.
In the US, Vaseline extended its offering to address the
needs of melanin-rich skin, building on the award-winning
‘See My Skin’ initiative. Radiant X uses specially formulated
premium skin care ingredients to fortify the skin and restore
its natural radiance.
Accelerating high-growth portfolios
We have built our fast-growing Prestige Beauty and Health &
Wellbeing portfolios over a number of years, through carefully
selected bolt-on acquisitions. Our focus is on accelerating
growth in the US, alongside selective international expansion.
Prestige Beauty
Our Prestige Beauty business continues to deliver consistent
double-digit growth and is growing ahead of the premium
beauty market globally. We have a strong presence in high-
growth areas such as Prestige Skin Care, Colour Cosmetics
and Hair Care, as well as digital commerce channels which
accounted for over half of sales this year.
Our Prestige Beauty portfolio includes science-backed skin
care Power Brands such as Paula’s Choice and Dermalogica,
which continue to expand their ranges across specialist beauty
and digital channels. Paula’s Choice has one of the top selling
products in the Amazon US beauty category, with strong growth
momentum this year. Dermalogica strengthened its presence in
the professional skin care therapist channel, supported by top
tier media investment and the launch of new innovations in key
markets – such as the LuminFusion treatment which restores
skin luminosity and diminishes signs of skin ageing.
Health & Wellbeing
Our Health & Wellbeing business continued its strong
growth momentum in 2023. Liquid I.V. is the biggest health
and wellbeing Power Brand in our portfolio. It is the number
one functional hydration powder brand in the US, with an
expanding range of products such as new sugar-free and kids’
variants with essential vitamins, which launched this year. The
brand also extended its presence outside of the US for the first
time, following a successful launch in Canada – with further
international roll-outs planned.
Acquired in 2022, Nutrafol is the number one dermatologist
recommended hair growth supplement brand in the US. As
a Power Brand, it has strong value creation fundamentals
and high-growth potential. To capitalise on this, we have
initiated international expansion, starting with China. Nutrafol’s
brand proposition is supported by ‘Shed the Silence’, a social
mission focused on destigmatising female hair thinning.
Optimising our portfolio
We have begun to unlock margin improvement opportunities
for our acquired brands by providing access to our technology
expertise, international expansion know-how and operational
synergies. Our portfolio strategy is designed to increase
exposure to higher growth areas and we continue to optimise
our portfolio. In February, we made a major divestment through
the sale of Suave (which included a Hair Care and Skin Care
portfolio). And at the end of 2023, we signed an agreement to
acquire the premium biotech hair care brand K18.
Focused on gross margin
This year we delivered a step up in gross margin, supported
by our end-to-end productivity and savings programmes, and
the new category-focused organisation. We are focused on
ensuring that all our brands, and especially our Power Brands,
have strong bottom line value creation fundamentals.
Productivity and savings
In our supply chain, we have achieved savings through
competitive buying of key ingredients such as silicones, as
well as vertical integration of supply for surfactants and
palm oil. We have also begun work to optimise our North
America factory network, alongside investment in our logistics
operations to improve customer service and productivity.
As part of our simplification agenda, we reduced active SKUs
in our portfolio by 27% in 2023.
Strengthening operational execution
Improving the consistency of our execution and the
capabilities that underpin this, remains an important area
of focus. In line with our strategy to deliver unmissable
superiority, we are investing in competitively differentiated
product experience capabilities that are critical to winning in
the market – such as packaging and product sensorials – with
the support of strategic partners.
This year, we formed a dedicated team of digital commerce
experts to drive growth across our Hair Care and Skin Care Power
Brands globally. We are also using our expertise in social and live
commerce in China to create new growth opportunities in other
key markets, such as Indonesia and the US. And in the modern
retail channel, we are working closely with strategic retail partners
to create multi-year value creation roadmaps which leverage our
portfolio, data, supply chain and digital capabilities.
Accelerating action on sustainability
Our sustainability agenda is focused on climate, nature
and plastic. This year, we initiated a number of long-term
partnerships to develop lower GHG alternative ingredients
alongside a series of strategic investments through the
Climate & Nature Fund to support our brands – see page 40.
We continue to explore alternative packaging materials and
formats to reduce our use of virgin plastic, leveraging our
enhanced packaging and design capabilities.
POND's successfully launched the Bright Miracle range this
year, a multi-market innovation with patented technology.
Unilever Annual Report and Accounts 2023
17
Review of the Year
Personal Care
We have been at the forefront of personal care
product innovation for over 100 years. Supported by
our science and technology capabilities, our portfolio
of Power Brands offers personal hygiene, wellbeing
and body confidence to consumers across the world.
18
Unilever Annual Report and Accounts 2023
Performance highlights
Turnover in 2023
€13.8bn
2022: €13.6bn 2021: €11.7bn
Turnover growth
Underlying sales growth
Operating margin
Underlying operating margin
Pages 11 to 32 use GAAP and non-GAAP measures to explain the performance
of our business. See page 59 to 64 for further information.
Unilever Annual Report and Accounts 2023
19
Review of the Year
Reinventing the
Power of Care
"
We delivered positive
growth momentum,
resetting our business
fundamentals by focusing on
our key categories and Power
Brands. We will continue to
unlock investment in science
and technology to deliver
unmissable superiority.
"
Fabian Garcia
President, Personal Care
Highlights
Skin Cleansing delivered mid-single-digit
growth with a return to volume growth.
Deodorants grew double-digit led by
strong volume growth.
Oral Care grew mid-single digit led
by price.
Balanced double-digit growth of the
Dove Personal Care portfolio.
20
Unilever Annual Report and Accounts 2023
About Personal Care
As one of the world’s leading Personal Care businesses, we
have a strong portfolio across emerging and developed
markets. We are the number one Skin Cleansing and
Deodorants business, and in Oral Care, we are number
four globally, with strong positions in our key markets.
Our performance in 2023
In 2023, we delivered positive growth momentum. Turnover
increased by 1.4% and we delivered underlying sales growth
of 8.9%, good volume growth of 3.2% and 5.5% from price,
including an unfavourable currency impact of 6.1% driven by
weakening currencies in key markets such as the US and India.
Latin America, Middle East & Turkey, South East Asia and
Europe delivered accelerated growth. The turnaround in
Europe was particularly notable, following increased focus
and investment in key categories.
Operating profit increased by 30.6% compared to the prior
year, to €3.0 billion. A net gain in non-underlying items of
€165 million included a gain on disposal of Suave business
in North America offset by restructuring costs. Underlying
operating profit increased by 4.2% to €2.8 billion, driven by
a recovery in gross margin from price growth and a slowdown
in inflation – partially offset by an increase in brand and
marketing investment.
Our strategic priorities
Our strategic priorities are to: premiumise our portfolio
through superior science and technology which meets the
needs of our consumers; leverage partnerships for category
growth; and step up our impact through gross margin,
portfolio optimisation and our sustainability priorities.
Restoring competitiveness in the US and India is also
a key priority.
Winning with science-led brands
We continue to develop our portfolio using breakthrough
innovations, supported by science-backed claims and
superior fragrance. Our focus is on premium products that
offer enhanced functional benefits such as health and
hygiene, superior skin cleansing, as well as more tailored
benefits including sweat protection.
Premiumising through superior science and technology
Skin Cleansing is our largest category. This year, we continued
to assert our market-leading position through superior
technology and value-adding consumer benefits. We
launched Dove Body Wash in the US, with 24-hour Renewing
MicroMoisture – powered by proprietary technology with
moisturising microdroplets which helps to retain moisture
and nourish the skin for 24 hours. Lifebuoy, the world’s number
one hygiene soap brand consolidated its category leadership
with the launch of a new Vitamin+ range of hand wash and
body wash in South East Asia which boosts the skin’s natural
immunity.
Our Deodorants portfolio continued to cement its market-
leading positions through science-backed technologies
and an expanded range of products with tailored benefits.
Powered by patented micro-technology, Rexona’s multi-year
72-hour sweat protection innovation is now available in
multiple markets across the world. Dove Men+Care’s new
range of deodorants now uses a version of this technology,
and is available across a number of North American, European
and Latin American markets.
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Review of the Year
Dove’s Advanced Care antiperspirant range for women also
launched in the UK and Europe with a patented formula and
triple moisturising technology, while Axe launched a Fine
Fragrance Collection to compete with super premium branded
variants in North America and a number of European markets.
Our Oral Care brands, which include Pepsodent and Closeup,
continued to focus on strengthening their core anti-cavity and
freshness propositions. Pepsodent relaunched its toothpaste
range in a number of key South East Asian markets, supported
by science-backed dental claims and free teledentistry. The
brand is also expanding its premium range to offer more
advanced benefits such as therapeutics and whitening.
Partnerships for category growth
We are working with our customers and strategic partners
to create category growth opportunities for our brands.
Growing with key customers
Modern retail is our largest channel. We are now consistently
recognised as top third tier by the majority of customers in
most of the key markets surveyed by an independent customer
service benchmark – a significant improvement versus the
prior year. This was achieved through more focus on creating
category growth opportunities, using our enhanced customer
and strategy planning capabilities, as well as building supply
chain capacity to support engagement with key hypermarket
and supermarket customers.
Strategic brand partnerships
To drive category growth with our customers, we have put in
place a number of strategic partnerships to support deeper
collaboration on brand innovations and in-store activations.
For example, we have rolled out a new deodorant category
initiative – from premium to value. And in Indonesia,
Pepsodent is working with a number of local stores and
larger supermarkets through in-store Oral Care Centres to
build brand awareness.
This year, we significantly stepped up our brand and marketing
investment through several high-profile football sponsorships.
Our first sponsorship deal was with the Fédération Internationale
de Football Association (FIFA) for the FIFA Women’s World Cup
2023TM. Rexona, Dove, Lux and Lifebuoy worked with over
30,000 retail stores globally to create a multi-brand, multi-
channel marketing campaign – engaging a global audience to
inspire the next generation of female footballers. The campaign
delivered strong results, raising brand awareness and driving
incremental growth. Further activations are planned in 2024.
In late 2023, Rexona, Dove Men+Care, Axe and Radox were
also announced as Official Sponsors of UEFA EURO 2024TM,
along with several Nutrition brands.
Accelerating digital commerce
Digital commerce remains a priority focus in the US, China,
India and our largest emerging markets. In China, where
around a third of our Personal Care sales come from digital
commerce platforms, we launched our new Dove scrub range
with a ‘social-first’ approach, using social platforms and
influencer collaborations.
End-to-end productivity
Our gross margin recovered this year, following a period
of high inflation. Ongoing Net Revenue Management and
a focus on our end-to-end productivity programme continue
to support margin progression. We have delivered savings
across a number of areas, including competitive buying
and operational efficiencies in our factories and logistics
warehouses. To support the transformation of our end-to-end
customer experience, we have implemented new tools and
automated systems such as a promotion planning tool.
Optimising our portfolio
This year, we made significant progress in the ongoing
optimisation of our portfolio. In February, we made a major
divestment following the sale of Suave (which included a Skin
Cleansing and Deodorant portfolio) and in October we
announced the sale of Dollar Shave Club to Nexus Capital
Management LP. We also received a binding offer from Yellow
Wood Partners LLC to acquire Elida Beauty, with completion
expected by mid-2024. We have further simplified our portfolio
by delisting a number of brands, as well as reducing active
SKUs by around 29% in 2023.
Innovation-focused sustainability
Sustainability is an important part of our strategy and includes
a focus on palm oil, plastic and climate. Building on Unilever’s
goal to deliver a deforestation-free supply chain for five key
commodities, including palm oil (see page 40), we are
exploring new technology which has the potential to reduce
the amount of palm-derived ingredients in our soap bars
as well as lowering GHG emissions – without compromising
superiority for consumers. Plastic remains an important priority
and we continue to focus on reducing the amount of virgin
plastic in our portfolio focused on packaging innovations.
See page 41 and 46 for more on climate and plastic.
Some of our biggest brands are leveraging their long-term
commitment to social issues to drive impact, as a core part
of their brand propositions. Dove, Lifebuoy and Pepsodent
continued to engage consumers on self-esteem, handwashing
and oral hygiene issues this year, through powerful TV
advertising, digital activations and on-ground education
programmes. Dove's Emmy Awards-nominated ‘Cost of Beauty’
campaign highlighted the mental health impacts of toxic
beauty among young people. See page 66 for the combined
reach of our brand purpose programmes.
Stepping up our impact
We continue to drive savings programmes to support gross
margin, as well as optimising our portfolio through disposals.
Rexona, Dove, Lux and Lifebuoy worked with customers
to create category growth opportunities, as part of our
sponsorship of the FIFA Women’s World Cup 2023TM.
Unilever Annual Report and Accounts 2023
21
Review of the Year
Home Care
We are on a mission to deliver a Clean Future through
superior, sustainable and great value household
cleaning and laundry products. Our global brands
provide the foundation to deliver this ambition.
22
Unilever Annual Report and Accounts 2023
Performance highlights
Turnover in 2023
€12.2bn
2022: €12.4bn 2021: €10.6bn
Turnover growth
Underlying sales growth
Operating margin
Underlying operating margin
Pages 11 to 32 use GAAP and non-GAAP measures to explain the performance
of our business. See page 59 to 64 for further information.
Unilever Annual Report and Accounts 2023
23
Review of the Year
Clean Home, Clean
Planet, Clean Future
"
Our Clean Future strategy
helped deliver another
year of consistent and
competitive growth in 2023,
despite high commodity
inflation and localised
competitive pressure.
"
Eduardo Campanella
President, Home Care
Highlights
Fabric Cleaning saw mid-single-digit
growth.
Fabric Enhancers delivered mid-single
digit growth.
Home & Hygiene grew mid-single digit.
Good 2023 performance, balanced
across growth and profit.
24
Unilever Annual Report and Accounts 2023
About Home Care
We are the second-largest global home care business with
a leading position in emerging markets and a proven model
for competitive growth. Our focus is on three key categories
– Fabric Cleaning, Fabric Enhancers and Home & Hygiene.
Our performance in 2023
In 2023, we delivered good performance across growth and
profile. Turnover decreased by 1.8%. Underlying sales growth was
5.9%, driven by 6.8% from price and offset by volume (0.9)%, with
an unfavourable currency impact of (7.2)% driven by weakening of
currencies in key markets such as Argentina, India, and Turkey.
Emerging markets growth was led by a strong delivery in South
Asia and Latin America. India grew volumes despite high pricing.
Growth in developed markets was muted as consumers tightened
their spending and competitive pressures stepped up, especially
in Europe which was flat with double-digit price growth offset by
volume declines.
Operating profit for the year was €1.4 billion, an improvement
of 33% compared to the prior year. Non-underlying items were
€77 million, mostly driven by restructuring spends on significant
network optimisation with strong delivery of our savings
programme. Underlying operating profit was €1.5 billion, an
improvement of 11% compared to the prior year, driven by gross
margin expansion with a step-up in brand and marketing
investment, and continued R&D investment to drive our
Clean Future strategy.
Our strategic priorities
Our track record of consistent performance provides strong
foundations as we respond to increasing competitive
pressures and high inflation which are particularly acute in
Europe. These challenges, coupled with changing consumer
expectations of home care products, demand an even more
compelling offering. As well as stain removal and hygiene,
consumers are looking for superior, sustainable products, at
a price they can afford. Far from seeing cleaning as a chore,
a growing number of people actively enjoy it – evidenced by
the rise of ‘cleanfluencers’.
Clean Future is our strategy to tap into the large segment of
consumers who want superior products that are sustainable
and great value. This is an integrated strategy to drive growth
through our biggest brands, in our key markets and across
traditional and modern retail, and digital commerce channels.
Unmissable superiority
We know that consumers want more than just functional
cleaning and hygiene benefits, so our focus is on the whole
product offering – from the ingredients and packaging, through
to how people use and experience the products in their home.
OMO encapsulates our approach to unmissable superiority.
This year, we continued to expand our range of laundry liquids
with superior benefits, launching the premium OMO Ultimate
Liquid with naturally derived stain removers and enzymes
that enhance efficacy, in three European markets. In Brazil,
we successfully launched two new OMO variants – OMO
Ultra Power with its high level of active ingredients, and OMO
Expert Branco Absoluto (Absolute White) which includes shade
whitening technology with sensorial fragrance and standout
packaging for on-shelf appeal.
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Review of the Year
Standout innovation
With innovation sitting at the heart of unmissable superiority,
this year we stepped up our R&D investment to drive category
growth. Domestos Power Foam – a category-defining innovation
designed to spray upside down for improved cleaning and
convenience – was successfully launched in the UK. Supported
by strong customer collaboration to ensure high penetration
across the country’s top retailers, it provides a blueprint for
future roll-outs.
We are also using our science and technology capabilities to
bring new consumer benefits to our products. For example,
Comfort Beauty Perfume – which uses a fragrance innovation
from our Beauty & Wellbeing Skin Care category – has performed
well since its launch in Thailand. We expect to see more cross-
category fertilisation of innovation in the coming years.
Partnering for impact
An important driver of unmissable superiority is targeted
brand and marketing across a wide range of consumer
touchpoints. In 2023, Dirt Is Good, which includes OMO
and Persil, signed a two-year commercial partnership with
Arsenal men’s and women’s football teams. We also launched
an exclusive multi-market partnership for our brands to
reach new and next generation consumers in the #CleanTok
cleaning community. This is one of TikTok's largest dedicated
communities for its users and a source of home cleaning hacks
and entertainment for millions of people who see cleaning as
an enjoyable experience.
Great value
We are significantly affected by commodity inflation due to
the nature of ingredients we use in our products. Creating top
and bottom-line value is therefore an important area of focus.
Firstly, by offering a range of products to consumers, from
affordable to more premium formats, and secondly, through
cost management and productivity improvements.
Value to consumers
Creating a ‘good-better-best’ portfolio is a core element of
our strategy to build a resilient business – from entry-level
functional products like laundry soap bars, to laundry liquids
and capsules. In India for example, our detergent range
includes Wheel which is our mass market value brand, Rin
which offers consumers a mid-tier option, and Surf Excel
which offers advanced expert cleaning for the premium tier.
We are expanding our laundry range through new innovative
formats. Laundry sheets are convenient, sensorial and made
with plant-based and highly biodegradable ingredients. This
year, we rolled out laundry sheets through our Robijn brand in
the Netherlands, followed by Persil in the UK with an Amazon
‘Climate Pledge Friendly’ exclusive.
Focusing on productivity
In the face of ongoing macroeconomic and competitive
pressures, it is imperative that we continue to focus on cost
savings across our value chain. In the last two years we have
removed around €1.5 billion in costs, reinvesting the savings
to support our brands and innovation programme.
The Business Group structure has improved visibility of
our overheads and created opportunities to become leaner
and more agile. This year, we simplified our portfolio by
removing around 19% of active SKUs, primarily in Latin America
and Europe. Our integrated end-to-end business now also
includes procurement, which puts us in a stronger position to
buy more competitively.
Our Home Care factories are embracing automation and
artificial intelligence to improve productivity. In Brazil, our
laundry detergent factory achieved the coveted World
Economic Forum Lighthouse status for incorporating Fourth
Industrial Revolution practices into its operations. Through
digital twinning and machine learning, the factory has
improved cost efficiency and agility, while cutting its
environmental footprint. Beyond the factory gate, we are
also making investments in our supply chain to bring further
productivity improvements in the coming years. This includes
improving our dispatch capabilities to reduce the distance our
products travel to customers.
Growing with retail customers
Creating value for customers goes beyond efficiencies – it
is about partnering to drive mutual growth. According to
Advantage Group, a leading benchmark of retailer and
customer perceptions for the consumer goods industry,
Unilever Home Care was top tier versus industry competitors
for driving category growth in 16 out of 21 markets in scope.
The digitalisation of our customer operations is crucial to
optimise the availability of our products in-store and online.
In India, we continue to use the B2B Shikhar digital commerce
platform to support our market development efforts with
traditional ‘mom and pop’ stores.
More sustainable
We are determined to lead an industry-wide transition in the
use of more renewable ingredients for our products. This year,
we stepped up engagement with our suppliers, including
through our first Clean Future Summits in India and China –
see page 44 for more information. Our multi-year partnership
with Arzeda also made good progress with the development
of new low carbon, naturally derived enzymes with increased
stability, performance and sustainability benefits.
Reducing virgin plastic use remains an important area of focus
and we continue to develop innovative packaging formats,
including recycled plastic and plastic alternatives. We have
now rolled out cardboard packaging for Persil and Skip
laundry capsules in France and the UK.
Domestos Power Foam launched this year – a category-
defining innovation designed to spray upside down for
improved cleaning and convenience.
Unilever Annual Report and Accounts 2023
25
Review of the Year
Nutrition
We are experts in food and nutrition. Our ambition
is to deliver superior tasting products that are
healthier for people and planet, through our global
and local brands, and Unilever Food Solutions.
26
Unilever Annual Report and Accounts 2023
Performance highlights
Turnover in 2023
€13.2bn
2022: €13.9bn 2021: €13.1bn
Turnover growth
Underlying sales growth
Operating margin
Underlying operating margin
Pages 11 to 32 use GAAP and non-GAAP measures to explain the performance
of our business. See page 59 to 64 for further information.
Unilever Annual Report and Accounts 2023
27
Review of the Year
A world-class force
for good in food
"
We delivered a solid
performance this year,
driven primarily by Knorr
and Hellmann’s, with
a sharpened focus on
superior products and
unmissable marketing
campaigns.
"
Robbert de Vreede
Chief Marketing and Business Development
Officer, Nutrition*
Highlights
Scratch Cooking Aids delivered
high single-digit growth.
Dressings grew double-digit driven
by price.
Unilever Food Solutions grew
double-digit with positive volume
and price growth.
Knorr and Hellmann's accounted for
60% of Nutrition turnover, with Knorr
reaching €5 billion.
* Heiko Schipper has been appointed Nutrition Business Group
President with effect from 1 May 2024.
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Unilever Annual Report and Accounts 2023
About Nutrition
We are one of the world’s largest foods businesses with a well-
balanced global footprint across categories. Our biggest
brands are Knorr and Hellmann’s which focus on the Scratch
Cooking and Dressings categories respectively. Together,
they accounted for 60% of Nutrition’s turnover this year.
Our regional and local brands are focused on four other
categories: Functional Nutrition, Healthier Snacking, Plant-
based Meat, and Beverages. A number of our brands are
sold through Unilever Food Solutions (UFS) which serves
professional customers in away-from-home channels.
Our performance in 2023
While turnover decreased by 5.0%, underlying sales growth
was 7.7% driven by strong price of 10.1% and offset by volume
decline of (2.2)%, with a negative impact of (6.9)% from
disposals following the sale of the Tea business. Weakening
of currencies in key markets such as Argentina, India, and the
US resulted in an unfavourable currency impact of (5.2)%.
Growth continued to be price-led as we responded to higher
food ingredient input costs especially in Europe where volumes
were impacted by downtrading from our pricing actions,
while South East Asia and South Asia were impacted by local
markets factors in India and Indonesia respectively. However,
other markets grew strongly including North America and
Latin America.
Operating profit was €2.4 billion, a decrease of (46.3)%
compared to the prior year which included a €2.3 billion gain
on the sale of our Tea business. Non-underlying items were
€47 million, primarily driven by restructuring costs. Underlying
operating profit was €2.5 billion, an increase of 0.4% compared
to the prior year, driven by gross margin improvement which
funded an increase in brand and marketing investment.
Our strategic priorities
As part of our multi-year portfolio transformation, over the last
five years we have disposed of a number of under-performing
businesses. We now have a more advantageous footprint,
including a strong presence across faster-growing segments,
channels and emerging markets.
This is reflected in our ambition to be ‘a world-class force
for good in food’ – a growth strategy that aims to deliver
consistent, profitable and responsible growth while reasserting
our competitiveness. Our growth model is centred on reaching
more consumers in strategic channels through our biggest
brands offering holistically superior products which aim to satisfy
consumer preference on taste, health, trusted ingredients and
sustainability. In 2023, we evaluated approximately half of our
turnover on these four measures versus competition with more
than 80% delivering holistic superiority.(a) Growing profitability
ahead of the top line is another important part of our strategy,
delivered through end-to-end productivity, supply chain efficiency
and strategic pricing.
(a) We will be evolving our approach to measuring superiority to align with
the Unilever-wide focus on 'unmissable superiority' – see page 5.
Leveraging our Power Brands
Knorr is a global powerhouse in Scratch Cooking Aids. It
achieved €5 billion in turnover this year, largely due to the
double-digit growth of bouillon and stock cubes, as well as
introducing products tailored to local and regional taste profiles.
In India for example, we launched Knorr K-Pots, offering a range
of on-trend Korean-inspired mini meals to meet the growing
appetite for convenient snacking options. We continue to
develop targeted campaigns that inspire healthier diets,
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Review of the Year
such as ‘Knorr Taste Combos’ in the US, which was supported
by a Grammy award-winning US rapper.
Hellmann’s is our iconic Dressings brand and the world’s number
one mayonnaise in terms of global market share, with leading
positions in the US, the UK, Brazil and a number of other key
markets. With disproportionate pricing required to offset input
cost headwinds, Hellmann’s market shares came under pressure
in 2023, particularly in the US. To address this, we stepped up
our investment with a focus on high consumption festivities and
seasons as well as popular culture events. This year, for example,
was our third consecutive US Super Bowl ‘Make Taste, Not Waste’
campaign, with around 9.8 billion earned media impressions.
We have been rolling out this model to other markets such as
in Brazil where Hellmann’s signed a new partnership with the
NBA – helping to deliver share gains as well as contributing to
strong in-market turnover growth.
Boldly healthier diets
At the core of our holistic superiority framework is an ambition
to be boldly healthier for people and the planet. We continue
to increase the nutritional value of our products to align with
Unilever Science-based Nutrition Criteria (USNC). This year, we
reduced the salt content of Knorr Veggie Bouillon in France by
around a quarter, improving its Nutri-Score profile from C to B.
We also launched USNC-compliant Knorr Rice Cups in North
America. In addition, we are working to double the number
of products sold that deliver positive nutrition – foods and
beverages that contain meaningful amounts of ingredients
such as vegetables and fruits, or micronutrients. At the end of
2023, 81% of our Nutrition and Ice Cream servings sold met
USNC and 52% of servings sold delivered positive nutrition.
See page 66 for our progress.
We have also further strengthened our leading market share
position in Functional Nutrition in India and returned to growth
– with both our Horlicks and Boost brands contributing.
Growing plant-based
While the meat replacement market growth has slowed
down in the last year, driven partly by inflationary pressures,
consumer interest in wider plant-based lifestyle and diets
coupled with the strength of our plant-based portfolio make
this an important area of focus that continues to deliver
disproportionate growth for us.
We continued to expand our range of vegan and plant-based
alternatives, such as Hellmann’s Vegan Mayo which has
doubled its turnover over the last three years and is now
available in close to 40 markets. Together with our Ice Cream
Business Group, we achieved €1.2 billion in sales from products
in scope for our plant-based goal, growing double-digit before
applying currency corrections – see page 66 for more. The
Vegetarian Butcher grew strongly, supported by partnerships
with fast food outlets such as Burger King and Domino’s, a
strong offer to professional kitchens through Unilever Food
Solutions, and novel innovations – such as NoBacon 2.0 with a
new plant protein technology and a plant-based meat skewer
for restaurants and kebab chains in Europe.
Accelerating in strategic channels
We continue to focus on growing our key categories through
retailer partnerships – including strong category-specific
execution through our Customer Strategy & Planning capability.
For example, this year Knorr and Hellmann’s worked with Kroger
in the US to inspire shoppers to create new recipes with leftover
ingredients. And in Europe, we continued to partner with Albert
Heijn on growing our share within the plant-based category.
Unilever Food Solutions accounts for around 20% of Nutrition
sales and grew double-digit this year with positive volume –
driven by our strong presence in Europe, North America
and North Asia, despite the slow post-pandemic economic
recovery in China. End-to-end UFS digitisation continued to
deliver greater productivity. In 2023, we further increased the
number of professional operators we reach and serve, while
continuing to optimise sales force overheads through digital
selling scale and efficiencies.
In addition to foodservice, we further scaled our sales in digital
commerce channels, which grew a solid double-digit in 2023,
and now represents more than 10% of Nutrition turnover. This
was driven by ‘top dish’ penetration, an important part of our
marketing approach which targets consumers with content
on how our products can be used in popular local recipes.
Growing profitability and resilience
Inflationary pressures impacted agricultural commodity costs
in 2023. The new category-focused organisation with full end-
to-end accountability and ownership has helped us counteract
these pressures at scale – through our comprehensive savings
programme and targeted pricing guided by Net Revenue
Management – especially in Europe where inflation was
particularly high. The savings generated have helped to
increase our investment in growth areas – such as our
snack pot and noodle factory in Poland to capitalise
on the burgeoning premium noodle market in Europe.
Additionally, we continued to simplify our portfolio. In 2023,
we delivered a further 14% reduction in active SKUs. We also
reduced food waste in our factories and warehouses – see
page 66.
Adopting regenerative agriculture practices helps to build a
more resilient supply chain and also reduces GHG emissions.
We have initiated a number of projects for our key crops –
see page 40. Our efforts on nature and agriculture have been
recognised externally. We achieved number one ranking in
the World Benchmarking Alliance’s Food and Agriculture
Benchmark for the second consecutive time, and number
two ranking in its first Nature Benchmark.
Hellmann's US Super Bowl activation entered its third year,
generating 9.8 billion earned media impressions in 2023.
Unilever Annual Report and Accounts 2023
29
Review of the Year
Ice Cream
We have strong fundamentals, with innovations that have
led the industry for many years. Our portfolio is designed
for in-home and out-of-home consumption and includes
premium indulgence and iconic mainstream brands.
30
Unilever Annual Report and Accounts 2023
Performance highlights
Turnover in 2023
€7.9bn
2022: €7.9bn 2021: €6.9bn
Turnover growth
Underlying sales growth
Operating margin
Underlying operating margin
Pages 11 to 32 use GAAP and non-GAAP measures to explain the performance
of our business. See page 59 to 64 for further information.
Unilever Annual Report and Accounts 2023
31
Review of the Year
Building the Ice
Cream category
"
2023 was a challenging year
for Ice Cream. We are focused
on expanding operating
profit and recovering our
global market share,
alongside building our
brands and accelerating
market development.
"
Peter ter Kulve
President, Ice Cream
Highlights
Volumes impacted by high price
elasticities and less favourable summer
weather mainly in Europe.
Out-of-home Ice Cream grew high
single-digit driven by pricing moderately
offset by volume decline.
Marginal decline in In-home Ice Cream,
with volumes down high single-digit
broadly offset by pricing.
Continued investment behind the four
Ice Cream Power Brands, which generate
almost 85% of Ice Cream turnover.
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Unilever Annual Report and Accounts 2023
About Ice Cream
We are a global market leader in the Ice Cream category
across developed and emerging markets, accounting for
approximately one-fifth of the market. Our portfolio includes
premium Power Brands, such as Magnum and Ben & Jerry’s,
which have a turnover in excess of €1 billion. The acquisition of
Yasso – a premium frozen Greek yogurt brand in the US – adds
to our portfolio strength. Our iconic mainstream brand
portfolio includes Wall’s and Breyers.
Our performance
Turnover increased by 0.5%. Underlying sales growth was
2.3%, with a (6.0)% from volume and 8.8% from price, with an
unfavourable currency impact of (2.7)% driven by the weakening
of currencies in key markets such as Turkey, the US, and Russia.
2023 was a challenging year with a second year of double-
digit material inflation impacting our input costs. The pricing
actions we took to protect our margins led to volume decline,
while consumer downtrading accelerated competitive
pressure from private labels, impacting our overall grocery
market share especially in Europe. In the latter part of the year,
we started to regain market share in the US. Emerging markets
delivered mid-single-digit growth, driven by a strong
performance in Turkey.
Operating profit was €760 million, a decrease of (2.1)% compared
to the prior year. Non-underlying items were €92 million which
included primarily restructuring items. Underlying operating profit
was €852 million, a decrease of (7.3)% compared to the prior year
driven by lower gross margin due to continued input cost inflation,
while brand and marketing investment increased.
Our strategic priorities
Our innovations have led the industry for many years, and we are
convinced our strong fundamentals can sustain our leadership
as category builders. Ice cream remains an attractive market
with solid growth rates driven by new consumers, omni-channel
distribution and a significant premiumisation opportunity – with
new entrants accelerating market growth opportunities. Our
immediate strategic priority is on global market share and the
expansion of operating profit. We will do this by: building our
brands; accelerating market development in emerging markets;
and by stepping up our performance and productivity.
Building our Power Brands
We have a strong premium brand portfolio which is well
positioned to meet consumers' desire for superior and indulgent
ice cream products and experiences. With competitive pressures
ongoing in our markets, we continue to prioritise growth
opportunities for our biggest premium brands.
Premium indulgence
We have been at the forefront of ice cream innovation for
many years and our aim is to continue to lead the category,
especially on premium indulgence. Our focus is on creating
bigger multi-year innovation platforms for our biggest brands
such as Magnum. This year, we launched our biggest ever ice
cream innovation: Magnum Double Sunlover and Magnum
Double Starchaser – new flavour combinations for ‘day and
night-time indulgence’. A number of Magnum's product ranges
were impacted by consumers temporarily trading down in
a high inflationary environment. Our focus for 2024 is to
reinforce Magnum’s superiority credentials. We are also
investing in technologies that allow us to keep our competitive
edge – such as Ben & Jerry's newly launched Sundae range. Ben &
Jerry's regained growth compared to 2022.
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Our premium Talenti brand consolidated its presence in
the fast-growing US premium frozen snacking space, following
the launch of four new Talenti Mini Gelato & Sorbetto Bars –
expanding the range from pints into snacking novelties. Our
acquisition of Yasso in mid-2023, now also gives us a foothold
in the fast-growing market for healthier and indulgent snacks.
Yasso’s indulgent low-carbohydrate brand proposition has
shown its value creation potential and we see further growth
opportunities.
Differentiated innovation
As market pressures persist, we are stepping up investment
in technologies to help maintain our competitive edge. One area
of focus is our expanding non-dairy range, fruit lollies and plant-
based alternatives. This year we launched Ben & Jerry’s Caramel
Café Sundae range, and Magnum Vegan Raspberry Swirl in
Europe. Our plant-based portfolio continued to grow in 2023
– see page 66 for more. We continue to drive global innovation
in our mini & bite-sized ice cream portfolio to generate new
consumption occasions. This year we launched a new Cornetto
& Magnum Minis range and expanded our Mochi portfolio with
new flavours in several Asian markets.
Growing our iconic mainstream brands
Our portfolio includes iconic favourites such as Cornetto. We
are the market leader in cones in several key markets and
continued to expand this format in Asia this year – notably
India and China. We are also repositioning some of our
heritage brands, including Wall’s Viennetta, with the launch
of Mini Viennetta on sticks and in cups in China.
important to manage the seasonal variation in consumption
and profitability. We have already started to implement plans
to address these gaps and will continue to prioritize productivity
in the coming year.
Optimising our operating model
We have put in place a new leadership team to drive competitive
intensity and to unlock profitable growth. They have deep
operational performance track records, and over half have
multi-year Ice Cream category expertise. One of our key priorities
is to reduce overheads and we have started work on a plan to
deliver best-in-class overhead levels. We are also leveraging the
end-to-end organisation launched in 2022 to run our Ice Cream
supply chain as a more integrated function. Alongside this work,
we are redesigning our distribution networks and optimising our
portfolio through active SKU simplification.
Accelerating our digitalisation programmes
As the global leader in out-of-home ice cream, we continue to
accelerate our digitalisation programmes to help drive faster
growth and higher levels of productivity. While we have made
some progress, there is more work to do and further value
creation opportunities to capitalise on. One area of focus is on
the digital interface with our retailers. Digital demand creation
and order taking show promise and have already helped to
increase the availability of our products in-store – as well as
optimising deliveries and reducing costs. This year, we also
extended the roll-out of AI image capturing within our cabinets
to monitor stock levels and trigger automatic replenishment,
as well as an AI tool to optimise the allocation of cabinets.
Growing consumption and market development
We are the number one player in out-of-home consumption,
and a first mover in the direct-to-consumer quick commerce –
and we see further growth potential. Our Ice Cream Now platform
(ICNOW) continues to play a key role in creating consumption
occasions throughout the year, and grew double-digit this year.
We are working in partnership with digital aggregators and
grocery players to ensure our mainstream brands are available,
supported by joint retailer promotions. Our Ice Cream business
in China is also capitalising on the growing trend of social
commerce to create new sales opportunities for our brands.
A commercial sustainability agenda
Sustainability has been an integral part of our Ice Cream
brand for a number of years, and underpins our strategic
priorities. Our focus is on commercial opportunities which
create value for our business and our customers. For example,
we are targeting electricity use in freezer cabinets and have
seen encouraging results from our 'warming up the cold chain'
pilots. To support wider efforts on decarbonisation, we have
also shared some formulation patents with the industry and
continue to work with dairy producers to reduce GHG emissions
– see page 44 for more.
Around a third of our total Ice Cream turnover is from emerging
markets, which had mid-single-digit growth in 2023. Low
per-capita consumption coupled with a large consumer base,
offer significant future growth opportunities for our iconic
mainstream brands.
We are accelerating market development programmes in our
eight biggest emerging markets. Despite currency devaluation
and high inflation in Turkey, we are growing competitively
and increasing volumes sold – by leveraging our portfolio
and through strong sales execution. In China, against a
challenging macroeconomic backdrop, we strengthened our
competitive position by increasing availability of our brands,
with a focus on digital commerce. And in Brazil, we delivered
strong sales and margin progression following a multi-year
transformation programme.
Stepping up performance and productivity
A difficult year calls for reflection. Functional integration and
especially productivity are the core drivers of our future growth
and profitability. Through competitor benchmarking, we have
identified significant productivity gaps. Tackling this is especially
The acquisition of Yasso, a premium frozen Greek yogurt
brand in the US, adds to our portfolio strength.
Unilever Annual Report and Accounts 2023
33
Review of the Year
Our People & Culture
Our business is powered by over 128,000 people
who work in factories, offices, distribution
warehouses, R&D centres and across a variety of
customer-facing roles. We have a clear plan to dial
up the performance edge in our culture, to deliver
consistent and competitive performance.
34
34
Unilever Annual Report and Accounts 2023
Unilever Annual Report and Accounts 2023
Performance highlights
Employee engagement
% engagement rate in annual UniVoice survey
Gender diversity in senior management
% employees in senior leadership roles one work level below ULE
Gender diversity in management
% employees in management roles including senior management and ULE
Total Recordable Frequency Rate
Accidents per million hours worked
Unilever Annual Report and Accounts 2023
35
Review of the Year
Dialling up our
performance culture
"
We have a diverse talent
base, highly engaged
people and a vibrant
culture. We are now dialling
up the performance edge in
our culture to accelerate
growth.
"
Nitin Paranjpe
Chief People and Transformation Officer
Highlights
Began work to dial up our performance
edge focused on goal setting, reward
and leadership behaviours.
Launched a global initiative equipping
and empowering our people to shape
their careers.
Embedded gender and diversity
representation requirements into our
executive search contracts for senior
leadership roles.
Invested in targeted capability building
in our biggest markets including customer
strategy and planning, digital marketing
and generative AI.
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Unilever Annual Report and Accounts 2023
Our transformation agenda
Last year, we began an important transformation initiative
to unlock the potential of our business. 2023 was our first full
year operating under the new category-focused organisation
structure and we have made good progress so far – but there
is more work to do. To support the next critical stage of our
transformation, we have set out a clear Growth Action Plan to
dial up the performance edge of our culture. We already have
a strong and identifiable culture. Building on this foundation,
we believe that a greater focus on performance will help us to
ultimately deliver more consistent and competitive growth.
This year, we relaunched our people strategy to harness the
many positives of the new category-focused organisation and
to target the areas that require further work. Our strategy
focuses on four priority areas: dialling up the performance
edge in our culture, creating a faster and simpler organisation,
building a diverse talent powerhouse, and developing
capabilities to sharpen our competitive edge.
Strong culture fundamentals
Our annual UniVoice survey is a key measure of employee
sentiment – and a helpful diagnostic of our culture today – to
ensure we take the right actions for the future. The response
rate increased this year, with 106,000 office-based and factory
employees completing the survey. The results confirmed that
employee engagement has increased to 84%(a) – versus 83% in
2022 – well above the industry benchmark. This demonstrates
that Unilever has many enduring qualities, such as: belief in our
products; trust in senior leadership; and support for our strategy.
This year’s survey results also pointed to the many positive aspects
of our culture: a strong commitment to safety, sustainability and
integrity, and concern for inclusion and wellbeing. However, it
also highlighted areas that have prevented us from executing
consistently at scale, notably on aspects of our performance
culture and operational effectiveness.
Linking behaviours to performance
This year, we began to take the first steps to dial up the
performance edge in our culture. Our first priority has been
to simplify our standards of leadership to make it clear what
behaviours we expect of our people. We are now being more
explicit about how these relate to business performance –
emphasising performance enablers such as agility versus
our competitors, getting closer to consumers and partnering
with customers. Our focus next year will be to embed these
behaviours into our talent acquisition and management
processes as well as continuing our work to foster psychological
safety – a key enabler of performance culture. We will also be
refining some of our reward mechanisms to increase the line
of sight between reward and performance.
Faster and simpler organisation
We have seen tangible evidence in the past year that the
new category-focused organisation we have put in place is
starting to deliver quicker, more empowered decision-making by
our leadership. For example, we have been able to take decisive
action to reduce the number of active SKUs across our portfolio
and have started to unlock efficiency improvements from the
integration of end-to-end value chains into our Business Groups.
While the latest UniVoice survey showed signs of improvement
on the speed of our decision-making, we know there is more
work to do in some critical parts of our business. One area of
focus next year will be on making our go-to-market customer
development operations as effective as possible.
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Review of the Year
Building a diverse talent powerhouse
Our talent base is strong and diverse, and we are focused on
continuing to develop this further. To support the development
of our internal talent pipeline, we launched ‘Shape Your Own
Adventure’ – a global initiative to empower employees to
develop the skills, performance edge and leadership they
need to progress in their careers. Our recent UniVoice survey
showed that employee perceptions of career development
opportunities have since improved.
Securing a strong pipeline of future talent is an important area
of focus. We are the FMCG employer of choice for graduates
and early career talent in 10 out of our 20 biggest markets,
as well as having the highest number of followers on LinkedIn
for our industry. Access to hybrid working is a key requirement
for a growing number of jobseekers and so we continue to
refine our hybrid approach, to strike the right balance
between in-person time and remote working arrangements.
We are also developing our approach to flexibility for
employees to increase our access to talent and support
business agility. Our ‘U-Work’ flexible employment model –
which combines the security of regular employment with the
flexibility of contract work – is now active in 10 markets.
Creating an inclusive and equitable workplace underpins
our talent strategy – and supports our aim to become more
consumer-centric. We continue to pilot our new Equity &
Inclusion Advancement Framework and through this work
have identified specific interventions to eliminate any
unintended bias and discrimination in our people practices
and policies across under-represented groups. This year, we
maintained gender balance at management level and we
are aiming to increase representation of women at more
senior levels – which now stands at 36% – through targeted
interventions such as embedding gender and diversity
requirements into executive search for senior leadership roles.
Capabilities to sharpen competitive edge
Our focus this year has been on senior leadership capabilities,
including a bespoke multi-year programme for our top 140
leaders. This aims to drive a higher appetite for risk-taking and
a focus on speed and agility. We are also investing in targeted
capability building in our biggest markets to step up expertise
in customer strategy and planning, digital marketing and
generative AI. We also continue to roll out programmes to reskill
and upskill our frontline workforce on digital capabilities.
Business integrity
Unilever’s Code of Business Principles and Code Policies are
the non-negotiable expectations we set to ensure we grow
responsibly. Our employees are required to submit an annual
pledge to confirm they have understood, and commit to, and
adhere to, the Code. It is embedded through comprehensive
business integrity training programmes, covering issues such
as countering corruption and harassment. Our zero-tolerance
approach to bribery is supported by targeted mandatory training,
including for those in frontline customer and supplier roles.
Across all areas of our Code, we received 1,390 Code reports
this year – an increase of 21% versus last year. This reflects
our efforts to encourage people to ‘speak up’ when they see
Code breaches. We have also strengthened our procedures to
check that employees have not experienced retaliation after
reporting a breach of the Code. Following investigations by
our Business Integrity teams, we closed 969 Code reports and
confirmed 507 reports as breaches, resulting in 337 people
leaving the business.
In November, employees from around the world joined a global
Unilever Live webcast to learn more about the Growth Action
Plan and the critical role they play in delivering this.
Safety-first
Health and Safety is a key part of our Code and ways of
working. It is deeply embedded in our culture, governance
and operating structures, with accountability at all levels.
Our programmes and standards cover all employees and
contractors who work on our sites. Strong safety leadership is
key to our work. Since 2022, over 100 leaders have visited 30
countries as part of a safety leadership site visit programme –
showing their commitment to safety and encouraging people
to speak up when they witness unsafe behaviour.
We have dedicated programmes to address key safety risks,
including road safety which is a primary cause of injury among
our employees. For example, we upgraded our global fleet
procurement policy to ensure that all new Unilever vehicles
purchased have the most advanced safety features, such as
blind spot detection and anti-collision systems.
By continuing to strengthen our safety-first mindset and targeting
key safety risks, our employee Total Recordable Frequency Rate
(TRFR) improved by 13% versus 2022, to 0.58 accidents per million
hours worked. Accidents involving our people are addressed with
the utmost care and attention. A contractor sadly passed away
while working at one of our factories. We responded with a full
investigation and applied the lessons learned to sites worldwide
to prevent a similar reoccurrence.
Alongside our work on safety, we continue to support
employees who are experiencing occupational and mental
health challenges. This year, we grew our 4,000-strong network
of trained Mental Health Champion volunteers as well as
offering a wide range of mental health support resources.
(a) Engagement is a composite score of four other metrics focused on: pride
in working for Unilever; job satisfaction; willingness to recommend Unilever
for employment; and intention to remain employed by Unilever. This year,
106,000 employees took part in the survey.
Unilever Annual Report and Accounts 2023
37
Review of the Year
Planet & Society
We continue to embed sustainability into the core
of our business. Our focus from 2024 will be on
accelerating progress against our four key priorities:
climate, nature, plastics and livelihoods.
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Performance highlights
GHG emissions reduction in our operations
% change in GHG emissions from energy and refrigerant use since 2015
Scope 3 GHG emissions
Million tonnes CO2e in scope of our net zero ambition
Deforestation-free supply chain
% of palm oil, paper and board, tea, soy and cocoa order volumes
which were deforestation-free by the end of 2023(a)
97.5%
Virgin plastic reduction
% change in total tonnes of virgin plastic used vs 2019 baseline
Diverse supplier spend
Total spend in €
For additional information on these metrics see page 65.
(a) Deforestation-free refers to the meeting of Unilever's deforestation-free
requirements.
Unilever Annual Report and Accounts 2023
39
Review of the Year
More focus for
bigger impact
"
Our approach to sustainability
is evolving to accelerate
progress on four key priorities:
climate, nature, plastics and
livelihoods. We will focus on
short-term actions to deliver
more impact.
"
Rebecca Marmot
Chief Sustainability Officer
Highlights
Achieved interim GHG emissions reduction
target in our operations and continued
to build supplier capability to enable
future Scope 3 emissions reduction.
Set up infrastructure, monitoring
and verification systems to manage
a deforestation-free supply chain by
the end of 2023.
Reduced use of virgin plastic,
alongside investment in new
Packaging R&D Centre.
Supplier diversity programme is now
active in 25 markets, broadening access
to suppliers with the potential to benefit
our business.
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Unilever Annual Report and Accounts 2023
Building on our sustainability commitment
We have been driving an ambitious and wide-reaching
sustainability agenda since 2010. During that time, we have
taken decisive action to embed sustainability into the core
of our business. This Annual Report provides a review of our
progress this year against the goals we set in 2021.
We are more certain than ever that it is the right time to focus
our sustainability efforts on the four key priorities where we
are best placed to drive impact: climate, nature, plastics
and livelihoods. We will focus our resources on accelerating
progress against these, and we intend to publish a smaller
number of new or updated medium-term goals in 2024.
Human rights will continue to underpin our sustainability
agenda and we remain committed to issues such as Equity,
Diversity & Inclusion – see page 42.
Climate
Our Climate Transition Action Plan (CTAP) outlines the actions
we are taking to reduce GHG emissions in our business and
across our value chain, to reach net zero by 2039. This Annual
Report contains our third CTAP Progress Report – see pages 43
to 47. We published our updated CTAP in March 2024, in
advance of an advisory shareholder vote at our Annual
General Meeting in May 2024.
Nature
Our business depends on nature, including land, forests
and water systems. We also recognise biodiversity loss as
an emerging risk, so protecting these systems is important
to ensure the resilience of our business and the communities
where we operate. This year, we stepped up our efforts to
deliver a deforestation-free supply chain and continued
to make investments to protect and regenerate nature.
Deforestation-free supply chain
In 2020, we set a goal to achieve a deforestation-free supply
chain in palm oil, paper and board, tea, soy and cocoa. By the
end of 2023, we had put in place the infrastructure, monitoring
and verification systems to manage a deforestation-free
supply chain. For example, we have strengthened the
traceability and transparency of our palm oil supply chain
by using satellite imagery and geolocation data to measure
deforestation. Additionally, 97.5% of our palm oil, paper and
board, tea, soy and cocoa order volumes were deforestation-
free by the end of 2023, based on Unilever's deforestation-free
requirements.
We initiated a large-scale transformation programme within
our supply chain to reach this milestone, including independently
verifying our suppliers through audits. Strategic investments
have helped to drive change – including a €131 million ($142
million) total investment in our Unilever Oleochemicals facility
to source deforestation-free palm oil and palm kernel oil
directly in the coming years. We have also worked with
suppliers to support the transformation in our soy supply
chain, including investment in a ‘Green Refinery’ in Brazil which
will increase the availability of deforestation-free soy for our
business and the wider industry.
Protecting and regenerating nature
Our Climate & Nature Fund continues to support our work to
protect and regenerate 1.5 million hectares of land, forests
and oceans by 2030. By the end of 2023, the Fund had spent
and committed €0.3 billion, which has helped to protect and
regenerate 0.3 million hectares since 2021 – an increase of
0.1 million hectares since 2022. In partnership with the Rimba
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Collective, Dove aims to enhance and protect rainforests in
South East Asia as part of the ‘Dove Nature Regeneration
Project’. Hellmann’s, in partnership with others, continues to
work with soybean farmers in the US to encourage adoption of
regenerative agriculture practices.
Empowering smallholder farmers to embrace new agricultural
practices is another important part of our nature agenda.
Magnum is creating a more resilient supply chain by working with
cocoa farmers in Côte d’Ivoire to adopt agroforestry practices –
improving soil health, increasing yields and boosting farmers’
incomes. Our work to protect and regenerate nature is
underpinned by sustainable sourcing. In 2023, 79% of our 12 key
agricultural commodities were sourced sustainably versus 81%
in 2022. As part of our work to improve supply chain traceability
in support of our deforestation-free goal, we have invested in
buying palm oil directly from smaller suppliers. This has impacted
our certified palm oil volumes in the short-term.
Protecting water
Water is a critical resource used to grow agricultural crops,
and in the manufacture and use of our products. This year,
we continued to roll out our water stewardship programmes
to more water-stressed areas. By the end of 2023 we had
implemented 13 programmes. We are also building long-term
partnerships with suppliers to replace ingredients that do not
meet our biodegradability standards with biodegradable
alternatives that continue to deliver superior performance.
In 2023, we continued to roll-out products with more
biodegradable formulations such as Dove Body Wash in
the US and Canada, and Simple Facial Cleansers in India.
Plastics
Tackling plastic waste and pollution is a critical priority for our
business. Although there is more work to do, we continue to
make progress against our goals. To accelerate action, we are
refining our programmes and have invested in our Packaging
R&D Centre which brings together materials scientists,
packaging experts and digital modellers to develop next-
generation packaging materials and formats.
Reducing virgin plastic
We have reduced the amount of virgin plastic in our packaging
by 18% since 2019, an improvement of 5% versus last year.
Using recycled plastic in our packaging is one of the biggest
levers to reduce our virgin plastic footprint – as well as
lowering Scope 3 GHG emissions (see page 44). In 2023, we
increased our use of recycled plastic in our packaging to 22%.
Some of our biggest Power Brands – such as Hellmann’s, Dove
and Sunlight – continue to drive the transition to recycled
plastic across our portfolio. We are also finding new packaging
solutions, such as ice cream wrappers which include 50%
certified food-grade recycled plastic, with plans to roll this
out further in 2024.
Alternative packaging materials and formats also play an
important role in reducing or removing plastic entirely. Our
laundry brands have rolled out cardboard boxes for their
3-in-1 capsules across several European markets. And Pot
Noodle is trialling paper-based pots in the UK, with an
estimated 4,000-tonne saving of virgin plastic per year
once fully launched.
Making our packaging lighter also supports our virgin plastic
reduction efforts, while also lowering transport emissions.
This year, we launched new lightweight packaging formats for
our Sure, Rexona and Dove roll-on deodorants, using around
a third less plastic. And our new toothpaste tubes in Indonesia
and France are now designed for recycling and use less plastic
than other toothpaste tubes in the market.
We have invested €[325] million at our Unilever Oleochemicals
facility in Indonesia to help us source deforestation-free palm
kernel oil.
We are investing in our Packaging R&D Centre to develop
next-generation packaging materials and formats.
Designing for recycling and reuse
We continue to design our packaging formats for recycling,
such as using mono-material alternatives for our rigid packaging.
In 2023, the ‘actual recyclability’ rate of our plastic packaging
portfolio was 53%, compared to 55% in 2022. This decrease
was primarily driven by lower sales volume of recyclable rigid
packaging formats, such as bottles and jars in North America
and Europe. The proportion of our plastic packaging which was
'technically recyclable' using existing technology, increased
marginally to 72% versus 71% in 2022. We recognise that ‘actual
recyclability’ at scale relies on the development of infrastructure
to collect, sort and process the materials. We are also working
with industry partners and other stakeholders to overcome
challenges in the development of viable and scalable solutions to
replace hard-to-recycle plastic sachets – with alternative formats,
materials and business models.
We are working to increase the number of reusable and refillable
formats, as well as strengthen refill business models. This year,
we expanded our network of refill outlets in Indonesia to around
800, with our dish wash brands Rinso, Sunlight and Wipol now
available. We are also collaborating with partners such as the
Ellen MacArthur Foundation and the Consumer Goods Forum to
advocate for the systemic changes that will help make reuse-refill
models scalable and economically viable. And with the World
Economic Forum's Consumers Beyond Waste initiative, we are
developing a standardised approach for reuse measurement
and reporting to inform future policy.
Collecting and processing plastic
This year, we helped to collect and process 61% of our global
plastic packaging footprint. Our businesses in Indonesia and
Vietnam continued to collect and process more plastic than
they sold, through physical collection and the inclusion of
recycled plastic in packaging. In Latin America, we have
invested in the Circulate Capital Ocean Fund to help scale
waste management systems in the region and improve access
to recycled materials.
Advocating for a global plastics treaty
Voluntary initiatives alone will not solve the challenge of
plastic pollution – policymakers play a key role in driving
systemic change. As part of the Business Coalition for a
Global Plastics Treaty, we are campaigning for an ambitious
and effective UN treaty to end plastic pollution. This includes
advocating for the establishment of well-designed extended
producer responsibility (EPR) schemes.
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Opportunities for under-represented groups
Our supplier diversity programme aims to enhance access
to new capabilities at the same time as supporting our
livelihoods work – and is focused on diverse businesses that
are owned, managed and controlled by members of under-
represented or minority groups. The programme is now active
in 25 markets following expansion to Colombia, Chile and
the Philippines, with our total spend reaching €1.1 billion in
2023. In Latin America, we have partnered with an accelerator
programme that supports diverse suppliers who are
developing sustainability solutions, with potential to benefit
our business.
We are one of the world’s largest advertisers by spend. Our
long-running Act 2 Unstereotype initiative aims to strengthen
the participation of under-represented communities in our
advertising. In 2023, we have focused on under-representation
of people with disabilities in advertising production, launching
an Inclusive Set Commitment to increase access and
opportunities across the industry.
Human Rights
Respecting human rights is fundamental to how we operate
and underpins our four sustainability priorities. The United
Nations Guiding Principles (UNGPs) on Business and Human
Rights continue to inform our approach.
This year, we commissioned an external review of our human
rights issues and concluded that the eight we identified in 2015
remain the most salient. However, we have broadened the
scope of some salient issues such as harassment which now
includes bullying, and health and safety which considers
impacts beyond the workplace. We now also formally
recognise the human rights impact of climate and gender
across all our salient issues.
In response to growing pressure on human rights defenders we
published new Principles in support of human rights defenders
in our agriculture supply chain. Alongside targeted policy
interventions, our RPP continues to play a key role in setting
mandatory requirements for our suppliers across a range of
human rights and sustainability issues. In 2023, 85% of our
spend was with suppliers meeting RPP requirements, up from
76% in 2022.
We have helped 1.9 million small and medium-sized retailers
grow by providing access to our digital commerce platforms
such as Shikhar in India.
Livelihoods
Our Livelihoods agenda aims to positively impact the
lives of people across our value chain, including suppliers,
and small and medium-sized businesses. In 2023, our
livelihoods priorities were to: ensure our suppliers pay their
employees a living wage; helping small and medium-sized
businesses grow; and to advance equity, diversity and
inclusion through our advertising and with our suppliers.
Underpinning our livelihoods agenda is an ongoing
commitment to embedding and promoting respect for
human rights throughout our value chain.
Championing a living wage
One of the most impactful ways we can improve livelihoods is
by ensuring workers who directly provide goods and services
to us are paid a living wage. Since 2021, we have focused our
efforts on ensuring that the contracts we sign with dedicated
collaborative manufacturers include a requirement to pay
a living wage. We plan to make a living wage a mandatory
requirement in our Responsible Partner Policy (RPP). In advance
of this, we have asked priority suppliers to voluntarily sign our
Living Wage Promise. To help create a level playing field and
mainstream living wage, we are also advocating for change
through industry forums such as the UN Global Compact as
well as supporting free, publicly accessible living wage data.
Helping small retailers grow
Our work with small and medium-sized retailers focuses on
scaling our digital commerce platforms so that they can buy
directly from us. In 2023, 1.9 million small retailers across
eight emerging markets were active on these platforms
– for example, our long-running Shakti initiative now includes
digital ordering through the Shikhar platform.
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Climate Transition Action Plan: Annual Progress Report
Putting in place the foundations for net zero
Our first Climate Transition Action Plan (CTAP) was published in
2021, detailing our climate targets and some of the key actions
to reduce greenhouse gas (GHG) emissions in our business and
across our value chain, towards our net zero ambition by 2039.
We published our updated CTAP in March 2024. This will be
subject to an advisory shareholder vote at the Annual General
Meeting in May 2024.
This report sets out the actions we have taken and progress
we made towards our climate targets in 2023. It also explains
how we continued to improve the measurement and accuracy
of our GHG emissions for the reporting period 2021-2023. An
analysis of our emissions and details of this revision are set
out on page 47.
Our progress this year
In 2023, we reduced our Scope 1 and 2 GHG emissions in our
operations by 74% against a 2015 baseline. This means we
have achieved our interim target to reduce Scope 1 and 2 GHG
emissions by 70% by 2025, two years ahead of our ambition.
GHG emissions in scope of our net zero ambition (referred to
as 'our GHG emissions', which excludes emissions from indirect
consumer use) decreased by 1% in 2023 versus 2022. This
reduction is net of increased emissions related to greater media
and marketing spend, and increased HFC propellant emissions
due to volume growth in US and Canadian aerosol products.
In addition, our full value chain Scope 1, 2 and 3 GHG
emissions reduced by 3%, on a per consumer use basis,
versus 2022, and by 21% against a 2010 baseline.
More detail on performance against our climate metrics and
targets can be found on page 46.
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Raw materials and ingredients
Raw materials and ingredients account for 52% of our GHG
emissions and represent our largest emissions source. Raw
material and ingredient emissions from Forest, Land and
Agriculture (FLAG) decreased by 1% in 2023 while Energy
and Industrial (E&I) related emissions decreased by 2%.
In 2023, we started to establish the foundations for
accelerated GHG emissions reductions in future years by
scaling up our Supplier Climate Programme, reaching a key
milestone in our deforestation-free goal, and by continuing
to develop lower-emission ingredients in our cleaning and
laundry products.
Supplier Climate Programme
We continue to support suppliers of raw materials, ingredients
and packaging to deliver long-term reductions in GHG
emissions. In 2023, we expanded our Supplier Climate
Programme to reach more than 100 suppliers, with around
80 delivering on our asks. Our focus is on providing suppliers
with access to tools and expert support to build key climate
capabilities and to better measure their impact.
Our suppliers with more mature climate programmes have
now sent us around 240 Product Carbon Footprint (PCF) data
points that meet industry standards and can be incorporated
into our GHG measurement in the future. Alongside this, we are
helping to shape industry standards for PCF data through the
World Business Council for Sustainable Development’s
Partnership for Carbon Transparency programme.
Deforestation-free supply chain and regenerative
agriculture
To achieve our goal of a deforestation-free supply chain, we
have fundamentally reshaped the way we source the five key
commodities in scope – palm oil, paper and board, tea, soy and
cocoa. By the end of 2023, we had put in place the infrastructure,
monitoring and verification systems to manage a deforestation-
free supply chain. Additionally, by the end of 2023 97.5% of palm
oil, paper and board, tea, soy and cocoa order volumes were
deforestation-free, based on Unilever's deforestation-free
requirements.
Our regenerative agriculture programme plays an important
role in transforming our value chain and reducing land-based
emissions from raw material production, as well as increasing
resilience within our supply chain.
Some of our climate actions including deforestation-free
supply chain and regenerative agriculture are closely linked
to delivering our nature goals. See pages 40 to 41 for more
information on the progress we have made this year.
Lower-carbon dairy
Reducing emissions from dairy products is a priority for our
Ice Cream Business Group. Through our Ben & Jerry’s brand,
we have expanded a lower-carbon dairy pilot to 17 farms,
to further test new technology and regenerative agricultural
practices. The initiative, which began in 2022, aims to reduce
GHG emissions from these dairy farms to half the industry
average by 2025. We are supporting each farm to build a
tailored roadmap based on their knowledge and experience
of emissions reduction and the farming conditions at each
location. We have also tested a feed additive that has the
potential to reduce total GHG emissions by 12-15% per
kilogram of milk.
Chemical ingredients
Our Home Care Business Group relies on chemicals derived
from fossil fuels and is working to reduce emissions by
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Unilever Annual Report and Accounts 2023
transitioning to ingredients that use renewable or recycled
carbon. In 2023, we successfully launched hand dish wash
products with plant-based surfactants and zero petrochemical
active agents in Indonesia. We also made good progress in
developing lower carbon proteins and enzymes for use in our
products in the future.
In August, we ran an event with suppliers based in India –
including a number who are part of our Supplier Climate
Programme – to accelerate research into innovative
ingredients and production processes. 18 of these suppliers
pledged to reduce their GHG emissions and develop GHG-
reduction roadmaps. We are also working with two chemical
companies to develop lower GHG soda ash and surfactants for
use in laundry powders. Initial findings suggest that this could
result in significant GHG emissions reductions.
Packaging materials
Emissions associated with our packaging materials account
for 11% of our GHG emissions. In 2023, GHG emissions from
packaging decreased by 4% versus 2022, driven by a reduction
in product volumes for the period measured (1 October 2022
to 30 September 2023), increased use of recycled plastic (PCR)
and further lightweighting in our packaging formats. See page
41 for more on plastic.
Indirect procurement
Emissions associated with indirect procurement make up 16%
of our GHG emissions – and include emissions from media and
marketing suppliers. In 2023, we conducted a more detailed
review of our indirect procurement spend and the associated
emissions in this category. The largest category of spend here
is our advertising and media spend. We need to work with third
parties and suppliers in these areas to reduce these emissions.
Unilever has been encouraging the advertising industry to
reduce media and marketing related emissions, helping to
establish and continuing to support the industry initiatives
Ad Net Zero with the Advertising Association, and the Planet
Pledge with the World Federation of Advertisers.
Our operations
Although our operations represent just 1% of our overall GHG
emissions, it is the area where we have the most direct impact.
By moving to renewable electricity and renewable heat, and
focusing on energy efficiency improvements, we have reduced
Scope 1 and 2 emissions by 74% versus our 2015 baseline.
Since 2015, energy efficiency in our manufacturing sites has
improved by 15%. In 2023, we spent an additional €42 million of
capital expenditure on sustainability investments in our factories,
including energy efficiency and renewable energy projects.
Renewable electricity
In 2023, 92% of our electricity came from renewable sources,
a decrease of 1% versus 2022. This was partly driven by more
accurate data from our combined heat and power plants and
increased on-site non-renewable electricity generation at
some sites due to market conditions – such as grid electricity
rationing in South Asia (known as ‘load shedding’). We have
also improved the quality of our Energy Attribute Certificate
(EAC) sourcing and continue to align with RE100 criteria,
meaning we only report electricity as ‘renewable’ when the
certificate is issued from the same market in which the energy
is used. In markets where EACs are not available, we purchase
the equivalent amount of EACs from neighbouring markets to
cover the energy used.
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Renewable thermal energy
In 2023, 37% of our thermal energy came from renewable
sources. We continue to switch to electric-powered heating
technologies, such as heat pumps and to biofuels sourced in
line with our Biofuel Sourcing Principles. For example, in 2023,
we commissioned a new biomass-fuelled hot air generator at
our Min Buri factory in Thailand which is expected to deliver
a reduction in Scope 1 GHG emissions of over 8,000 tonnes
per year.
Logistics
Logistics emissions from upstream transport and distribution
accounts for 3% of our GHG emissions and decreased by 13%
versus 2022. In 2023 we reduced our total logistics emissions
by 14% versus 2020. We are working to minimise the number
and length of journeys, as well as maximising the number
of pallets carried per truck – shipping directly to consumers
where possible. This has resulted in a 7% reduction in
kilometres travelled per tonne of products sold in 2023,
versus 2022. We have reduced total kilometres travelled by
19% since 2020. We have started to transition the fuel used for
some of our truck fleet in the US, UK, Netherlands, Italy and
the United Arab Emirates to alternatives such as biofuels.
Ice cream cabinets
The ice cream cabinets that we lease to retail stores account
for 4% of our GHG emissions. In 2023, cabinet emissions
decreased by 22% versus 2022. This was partly driven by
energy grid decarbonisation in the US, UK and some countries
in the European Union. Reductions also came from the
purchase of EACs to cover some of our cabinet electricity
consumption in Turkey and Indonesia – which accounts for
approximately half of the emission reduction from cabinets in
2023. We will continue to evaluate EACs and other options to
support the transition of our cabinet fleet towards renewable
energy sources.
Additionally, we continue to invest in more energy-efficient
freezers, which has reduced average cabinet energy
consumption by around 2% in 2023. We have launched a guide
for our operating sales teams to train customers on how to run
our freezers more efficiently, helping them to cut energy use
and reduce their running costs.
Direct consumer use
In the majority of our markets, we use natural hydrocarbon
propellant gases with a low global warming potential (GWP)
– primarily in hairsprays, body sprays and spray deodorant.
However, in the US and Canada, regulation on Volatile
Organic Compounds (VOCs) restricts the use of these
propellants. Instead, hydrofluorocarbon (HFC) propellants with
a higher GWP tend to be used by industry to lower VOC levels.
HFC propellant accounted for 3% of our GHG emissions in 2023,
and make up the majority of our GHG emissions from direct
consumer use of sold products.
In 2023, GHG emissions from direct consumer use of sold
products increased by 1% versus 2022. This was driven by
product volume growth in the US and Canada, and the use of
a propellant system in our dry shampoo products, to comply
with 2023 reduction VOC regulation targets in the USA. After
many years of working with the California Air Resources Board
to advocate for change, VOC regulations were updated in
the US in 2022 to include provisions permitting the use of
alternative propellant systems with lower GWPs.
This will allow us to begin reformulating some of our aerosol
products in the US and will be a priority action to deliver GHG
emission reductions in the future.
Product end of life
The disposal of product residuals and packaging, including
the biodegradation of product formulations after their use,
accounts for 6% of our GHG emissions. In 2023, our product
end-of-life emissions fell by 2% versus 2022. We remain focused
on increasing the use of renewable and recycled ingredients
which lower GHG emissions as our products biodegrade. See
chemical ingredients and packaging on page 44.
Indirect consumer use
Around a half of our products’ full value chain GHG emissions
are indirect emissions associated with consumer use of our
products. In 2023, indirect consumer use emissions decreased
by 18% from 2022, as a result of reductions in product volumes
for the period measured (1 October 2022 to 30 September
2023) and ongoing grid energy decarbonisation in the US, UK
and European Union. In the run-up to COP28, we advocated for
greater investment in renewable electricity generation to triple
current capacity by the end of the decade.
GHG impact of products across product lifecycle
Our full value chain GHG emissions target includes both direct
and indirect consumer use emissions across the product
lifecycle. This is calculated using Scope 1, 2 and 3 emissions
across the full value chain, and the number of consumer uses
of our products (expressed as ‘per consumer use’ – single use,
portion or serving). In 2023, our GHG emissions per consumer
use reduced by 3% versus 2022, and by 21% since 2010 –
primarily due to reductions in indirect consumer use emissions.
Using our influence
We continue to engage on policy areas that will help limit
global temperature rise to 1.5°C and unlock faster emissions
reduction in our value chain. In 2023, this included:
■ Working with RE100 to advocate for investment in zero
carbon electricity grids and the introduction of market-
based renewable electricity mechanisms.
■ Commissioning research by the University of Oxford
identifying the policy interventions needed to address the
carbon emissions of everyday cleaning, laundry, and home
care products.
■ Ahead of COP28, we endorsed a 'call to action' with other
organisations for the transition to include food systems
in national climate plans. We also announced the Action
Agenda on Regenerative Landscapes to accelerate the
transition of large agri-food businesses to regenerative
agriculture.
Governance and disclosure
Details on climate governance can be found in our TCFD
statement on page 48. In addition to the climate disclosures
in our Annual Report and Accounts, we provide annual
submissions to CDP. In 2023, we received a rating of AAA- for
our CDP Forests, Water and Climate disclosures (based on
2022 data).
Unilever Annual Report and Accounts 2023
45
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Review of the Year
Our climate metrics and targets
We use several key metrics and targets to assess and manage climate risks and opportunities across our full value chain.
Two of our near-term targets are validated as science-based by the Science Based Targets initiative ('SBTi'):
■ Reduce in absolute terms our operational (Scope 1 and 2) emissions by 100% by 2030 against a 2015 baseline and;
■ Halve the full value chain emissions (Scope 1 to 3) of our products on a per consumer use basis by 2030 against a 2010
baseline.
In addition, we have an interim target to reduce in absolute terms our operational emissions (Scope 1 and 2) by 70% by 2025
against a 2015 baseline.
While our operational target is validated by the SBTi as aligned with the 1.5°C ambition of the Paris Agreement, our full value
chain target is validated by SBTi as aligned with limiting temperature increase to 2°C. This is because it was set in 2010 and
validated by the SBTi before the 1.5°C validation was introduced. We intend to retire this target in 2024 once our new, more
ambitious near-term 1.5°C-aligned Scope 3 targets have been validated by the SBTi. These are as follows:
■ Reduce absolute energy and industrial Scope 3 GHG emissions from Purchased Goods and Services (associated with
ingredients and packaging), Fuel and Energy Related Activities, Upstream Transport and Distribution, direct emissions from
Use of Sold Products (associated with HFC propellants), End-of-Life Treatment of Sold Products, and Downstream Leased
Assets (associated with ice cream retail cabinets) by 42% by 2030 from a 2021 baseline year.
■ Reduce absolute Scope 3 Forest, Land and Agriculture (FLAG) GHG emissions from Purchased Goods and Services (associated
with ingredients) by 30.3% by 2030 from a 2021 baseline year.
For more details about this change, see our updated CTAP which is available on our website, and will be subject to an advisory
shareholder vote at our 2024 AGM.
We also set an ambition to achieve net zero emissions by 2039 and have additional nature and plastic goals which play an
important role in tackling climate change.
Progress against climate metrics and targets
The table below shows our progress against the key climate metrics and targets – see pages 43 to 45 for progress commentary.
Additionally, see page 66 for progress against our plant-based and food waste goals.
Metrics and targets
GHG emissions in scope of net zero ambition (million tonnes CO2e)(a)
Scope 1 and 2 GHG emissions (Unilever operations)
Reduce GHG emissions in our operations by 100% by 2030 (reduction in emissions from
energy and refrigerant use in our operations since 2015)(a)(c)
100% renewable electricity in our operations(a)(d)
100% renewable heat in our operations by 2030(a)(e)
Energy use in GJ per tonne of production in our manufacturing sites(a)
CO2 emissions from energy use in kg per tonne of production in our manufacturing sites(a)
Scope 1, 2 and 3 GHG emissions (Unilever operations, upstream and downstream)
40%-50% reduction in logistics emissions by 2030 (% change since 2020)
Halve GHG impact of our products across the lifecycle by 2030 (% change since 2010)(f)
Nature
Deforestation-free supply chain in palm oil, paper & board, tea, soy and cocoa by 2023(g)
100% sustainable sourcing for key agricultural crops(i)
Implement water stewardship programmes in 100 locations in water-stressed areas by 2030
Help protect and regenerate 1.5 million hectares of land, forests and oceans by 2030 (hectares)
Plastics
25% recycled plastic by 2025(a)(j)
Supported by:
Note
1
2023
52.86
2022
53.63(b)
2021
56.25(b)
3
-74%
92%†
37%
1.15†
25.94†
-14%
-21%
97.5%†(h)
79%
13
0.3m†
22%†
'-68%Θ
93%
–
1.22Θ
30.35Θ
-9%
'-19%
–
81%
8
0.2m
-64%
86%
–
1.23
34.06
–
'-14%△
–
79%
–
0.1m
21%
18%
€1 billion Climate & Nature Fund – spent and committed
€0.3bn
€0.2bn
0
† This metric was subject to independent limited assurance by PricewaterhouseCoopers LLP (‘PwC’) in 2023. For PwC's 2023 Limited Assurance report and the 2023
Unilever Basis of Preparation for assured metrics, see Independent Assurance in the Sustainability Reporting Centre on unilever.com.
Θ This metric was subject to independent limited assurance by PwC in 2022. For PwC's 2022 Limited Assurance report and the 2022 Unilever Basis of Preparation for
assured metrics, see Reporting Archive in the Sustainability Reporting Centre on unilever.com.
Δ This metric was subject to independent limited assurance by PwC in 2021. For PwC's 2021 Limited Assurance report and the 2021 Unilever Basis of Preparation for
assured metrics, see Reporting Archive in the Sustainability Reporting Centre on unilever.com.
(a) Measured for the 12-month period ended 30 September.
Restated for 2021 and 2022. See Note 1 for further detail.
(b)
These emissions exclude Scope 1 & 2 emissions related to small office and logistics sites, fuel consumption from company vehicles, methane and N2O from both fossil
(c)
fuels and biofuels, and SF6 from electrical insulators in grid connections.
Excludes electricity related to small office and logistic sites.
Excludes heat related to small office and logistic sites.
(d)
(e)
(f) Measured for the 12-month period ended 30 June.
(g) Deforestation-free refers to the meeting of Unilever's deforestation-free requirements.
(h) Measured for all commodity volumes ordered for the 3-month period October to December 2023 except for order volumes of palm oil for India measured only for
December 2023.
Comprising 66% key agricultural crops purchased from suppliers that comply with the requirements set out in Unilever’s Sustainable Agriculture Code 2017 (71% in
2022, 69% in 2021) and, 13% purchased from non-sustainable suppliers but have been matched by Credits purchased for raw materials (10% in 2022, 10% in 2021).
Scope of reporting on our plastic goals is 27 countries.
(i)
(j)
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Review of the Year
Notes on metrics and targets
Note 1: Analysis of GHG emissions
GHG emissions (million tonnes CO2e)
Scope 1 and 2 GHG emissions: Unilever operations (Note 2)(a)
Scope 3 GHG emissions in scope of our net zero ambition(a)
Purchased goods and services
Raw materials and ingredients – Forest Land and Agriculture (FLAG)
Raw materials and ingredients – Energy and Industrial (E&I)
Packaging materials
Indirect procurement
Upstream transport and distribution (logistics)
Ice cream cabinets
Direct consumer use
Product end of life
Others(c)
Total Scope 1, 2 and 3 GHG emissions in scope of net zero ambition
Scope 3 GHG emissions – indirect consumer use
Total Scope 1, 2 and 3 GHG emissions
2023
0.73
52.13
41.47
12.18
15.35
5.60
8.34
1.57
2.30
1.48
3.25
2.06
52.86
47.07
99.93
2022
0.81(b)
52.82(b)
41.15
12.32
15.71
5.84
7.28
1.81
2.93
1.46
3.32
2.15
2021
0.91(b)
55.34(b)
43.35
13.09
16.93
6.06
7.27
1.91
3.09
1.23
3.54
2.22
53.63
57.54
111.17
56.25
64.87
121.12†
2023 – 2022
% change
-10%
-1%
1%
-1%
-2%
-4%
15%
-13%
-22%
1%
-2%
-4%
-1%
-18%
-10%
† This metric was subject to independent limited assurance by PricewaterhouseCoopers LLP (‘PwC’) in 2023. For PwC's 2023 Limited Assurance report and the 2023
Unilever Basis of Preparation for assured metrics, see Independent Assurance in the Sustainability Reporting Centre on unilever.com.
(a) Measured for the 12-month period ended 30 September.
Restated for 2021 and 2022. See below for further detail.
(b)
Includes Fuel and Energy related services, Capital goods, Waste generated in operations, Employee commuting, Business travel, Franchises, Downstream Transport
(c)
and Distribution.
In 2023, we implemented improvements in our GHG emissions measurement and restated our 2021 and 2022 GHG emissions
measurement to reflect these changes. The revised 2021 emissions are the baseline for our new 2030 Scope 3 emissions
reduction targets.
We improved our Scope 1 and 2 emissions measurement with more complete and accurate data related to small office and
logistics sites, fuel consumption from company vehicles, methane and N2O gases from both fossil fuels and biofuels and SF6 gas
from electrical insulators in grid connections. We also implemented a new measurement system for our most material Scope 3
emission categories which measures emissions from procured goods and services, using data on real volumes of procured raw
materials/packaging and services combined with standard emissions factors for these materials, applying the latest guidance
on the use of emissions factors (IPCC AR6) and the draft GHG Protocol Land Sector guidance.
As well as measuring emissions on a procurement basis, we are still using product footprint data – based on a representative
sample of products including the impact on indirect consumer use emissions – as part of our product innovation decisions. Over
time, we expect the new measurement system to be able to incorporate this data and provide product footprint information.
Note 2: Analysis of GHG emissions in our operations
Scope 1 and 2 GHG emissions (million tonnes CO2e)
Scope 1 GHG emissions(a)
Renewable energy
Non-renewable energy
Refrigerants and other gases (c)
Scope 2 GHG emissions(a)
Purchased renewable electricity
Purchased non-renewable electricity
Purchased renewable thermal energy
Purchased non-renewable thermal energy
Total Scope 1 and 2 GHG emissions
(a) Measured for the 12-month period ended 30 September.
Restated for 2021 and 2022. See Note 1 for further detail.
(b)
(c) Other gases include SF6, PFCs and NF3.
Note 3: Analysis of GHG emissions per consumer use
GHG per consumer use
GHG impact per consumer use (grams CO2e)(a)
Reduction in GHG impact per consumer use since 2010 (%)(a)
2023
0.62
0.04
0.56
0.02
0.11
0
0.03
0
0.08
0.73
2022
0.66(b)
0.03
0.61
0.02
0.15(b)
0
0.06
0
0.09
0.81
2021
0.73(b)
0.04
0.67
0.02
0.18(b)
0
0.09
0
0.09
0.91
2023
40.0
-21%
2022
41.4
'-19%
2021
43.6
'-14%△
△
This metric was subject to independent limited assurance by PwC in 2021. For PwC's 2021 Limited Assurance report and the 2021 Unilever Basis of Preparation for
assured metrics, see Reporting Archive in the Sustainability Reporting Centre on unilever.com.
(a) Measured for the 12-month period ended 30 June.
Unilever Annual Report and Accounts 2023
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Task Force on Climate-related Financial Disclosures statement
Additional ULE subcommittees are also in place to support
our climate agenda and ULE decision-making, including:
■ Business Operations Sustainability Steering Committee:
Provides strategic guidance on implementation of our
climate, nature and livelihoods goals within our extended
supply chain. Chaired by our Chief Business Operations
Officer, attended together with our Chief Sustainability
Officer (CSO), Chief Procurement Officer and Head
of Sustainable Business and Reporting.
■ Climate and Nature Investment Committee: Evaluates and
approves investment proposals and reviews progress against
key milestones for the Climate & Nature Fund, our €1 billion
commitment to fund disruptive transformations across our
value chain. Chaired by our Chief Business Operations Officer
together with our CSO, Chief R&D Officer, Head of Sustainable
Business and Reporting, and our five Business Group Presidents.
Each Business Group has a sustainability lead to ensure that
sustainability risks and opportunities are embedded into their
strategies and performance is monitored.
We also have a specialist corporate team, the Global
Sustainability Function, led by our CSO. This team supports the
Business Group teams in developing their business strategies
whilst also driving transformational change across markets
through advocacy and partnerships.
In addition, included within the Supply Chain, R&D and Finance
corporate functions, we have teams of experts who are
focused on the sustainability agenda which includes climate-
related matters. Their activities include developing relevant
policies and procedures, e.g. responsible sourcing and metric
definitions (scope and calculation methodologies).
We regularly engage with our investors on a wide range of
sustainability matters including our climate strategy. In 2021,
we achieved shareholder support for our CTAP through an
advisory vote at our AGM. During the fourth quarter of 2023, we
commenced our engagement with investors on our updated
CTAP. We engaged with more than 20 of our largest institutional
investors and have used their feedback to help shape the
updated CTAP.
Remuneration for management employees – up to and
including the ULE – continues to be formally 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 2023 was
determined by considering performance against a number
of sustainability goals – see page 136 for details.
See pages 136 to 137 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.
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 are taking to respond. We also integrate climate-related
disclosures throughout this Annual Report and Accounts,
including in our Climate Transition Action Plan (CTAP) Annual
Progress Report on pages 43 to 47. A detailed breakdown of
our emissions can be found on page 47. We have updated our
CTAP, in advance of an advisory shareholder vote at our Annual
General Meeting in May 2024. See our website for the latest CTAP.
Governance
The overall governance structure for managing Unilever’s
climate risks and opportunities is the same as for any of
Unilever’s other key risks and opportunities i.e. all of the
following play a key role in governance: the Board, the Board
subcommittees, ULE, ULE subcommittees, Business Group
leadership teams, specialist management governance groups
and specialist teams together with the support of relevant
policies and procedures applied by everyone in the business
(see page 88).
Whilst the Board takes overall accountability for the
management of all risks and opportunities, including climate
change (see page 70), our CEO is ultimately responsible for
oversight of our climate change agenda. The Board delegates
specific climate change matters to each of the Board
subcommittees:
■ The Corporate Responsibility Committee – oversees the
development of Unilever’s sustainability agenda (which
includes climate matters), and the progress against that
agenda, including performance against specific targets,
whilst also reviewing sustainability-related risks,
developments and opportunities (see page 114).
■ The Audit Committee – oversees the non-financial
disclosures in our Annual Report and Accounts, which
includes climate-related disclosures. This includes reviewing
the scope and results of any internal and external assurance
activities obtained over the disclosures (see page 109).
■ The Compensation Committee – supports the sustainability
strategy which includes the climate strategy through
alignment of Unilever’s incentive plan to the sustainability
agenda and ambitions (see page 128).
■ The Nominating and Corporate Governance Committee –
is responsible for ensuring that the composition of the
Board provides sufficient skills and experience in
sustainability matters including climate change to deliver
on the sustainability agenda (see page 105).
■ The Board is supported by the ULE and the Sustainability
Advisory Council. The Council is made up of seven
independent external specialists in social and
environmental matters, and it convened in 2023 to guide
and critique our strategy. The ULE discuss key strategic
sustainability matters at least quarterly. During 2023,
climate change matters were discussed at each meeting
including progress against our climate-related Compass
goals. The specific topics discussed included our GHG
emissions measurement and setting a new baseline for
our total emissions, GHG reduction plans for our Business
Groups, and implications of the changes in the SBTi
guidelines on setting new targets.
48
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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, our Business Group strategies and financial plans.
More detail on these risks, opportunities and the mitigating
and adaptation actions we are taking can be found on pages
50 to 55.
The process for assessing and identifying climate-related risks
is the same for each of the principal risks and is described on
page 70. 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, where appropriate, 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 for
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.
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.
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
Unilever Annual Report and Accounts 2023
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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 (IEA).
Key risks and opportunities
Out of all the risks and opportunities we assessed as part
of our 1.5°C scenario assessment, there are 11 which we
believe are significant and could at some time in the future
be material to our business. We have combined the outputs
from the ‘proactive’ and ‘reactive’ analyses since the risks and
opportunities are similar, with the differences only being in the
size and timing of impact. Due to the nature of climate risks
and opportunities we are monitoring them across a number
of time horizons. Short term (up to three years) – this aligns
with our three-year strategic plans, medium term (three to
ten years) and long term (beyond ten years).
Where we have been able to quantify the risk, the ranges
represent potential impacts of the different pathways.
Actions to mitigate and adapt to the risks and to capitalise
on the opportunities have been consolidated into our
sustainability goals (pages 65 to 66) and our CTAP progress
update (pages 43 to 47).
Below we summarise the 11 risks and opportunities. Given
the nature of our products, all of the risks noted below are
applicable to all our Business Groups and there are only
modest variations in their relative significance for each
Business Group. For more details on key targets and goals,
see pages 65 to 66.
Regulatory risks
Risk
Carbon tax
Management of risk
This includes carbon taxes and voluntary removal 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.
Actions: We have a CTAP which sets out in detail activities to
reduce our carbon emissions. For example, our eco-design
programmes will reformulate our products with alternative
less carbon-intensive ingredients and, through our Supplier
Climate Programme, we are working with our largest suppliers
to help them build plans to decarbonise the products they
supply to us. We also aim to cut emissions from energy use
in more than 3 million point-of-sale ice cream cabinets.
In 2023, we submitted a new 2030 absolute emissions
reduction target to the SBTi which is awaiting approval.
Impact on Business Groups: All Business Groups could be
impacted by carbon taxes or voluntary removal costs. Per unit
of consumption, our Ice Cream business has the highest
carbon emissions from the use of dairy ingredients and the
energy used in ice cream storage/transport/point-of-sale
freezer cabinets. The highest absolute carbon emissions
from sourcing materials, production and distribution is in
Home Care whereas it is lowest in Beauty & Wellbeing.
Timeframe: Medium term to long term
We support the use of internal carbon pricing as a tool
to help us achieve our net zero emissions goal. We use
an internal carbon price of €70 per tonne to inform our
investment decision-making.
Key targets:
■ Zero GHG emissions in our operations by 2030
■ Reduce absolute Scope 3 energy and industrial GHG
emissions from Purchased Goods and Services (direct
procurement), Fuel and Energy related activities, Upstream
Transport and Distribution, direct emissions from Use of
Sold Products (HFC propellants), End-of-Life Treatment
of Sold Products, and Downstream Leased Assets (ice
cream cabinets) by 42% by 2030 from a 2021 base year.
■ Reduce absolute Scope 3 FLAG (Forest, Land and
Agriculture) GHG emissions from Purchased Goods and
Services (ingredients) by 30.3% by 2030 from a 2021
base year.
■ Net zero GHG emissions ambition across our value chain
by 2039
50
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Regulatory risks continued
Risk
Land use regulations
These 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.
Impact on Business Groups: All Business Groups could be
impacted by land use regulation. The majority of our products
are derived from agricultural raw materials and thus any
limitations placed on land use would have a similar impact
across each Business Group. Specific land use regulations vis-
à-vis certain usages/crops could impact the Business Groups
differently e.g. if dairy farming land was restricted and nothing
else, then the Ice Cream business would be most impacted.
Timeframe: Medium term to long term
Product composition regulations
These 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.
Impact on Business Groups: All Business Groups could be
impacted by product composition regulations. If there was
a ban on the use of GHG-intensive ingredients/components,
then there is a greater likelihood that the impact on our
Personal Care and Home Care businesses would be greater
than on our other businesses, as some personal care products
in certain countries use HFC propellants and in home care,
various chemicals such as soda ash are used.
Timeframe: Medium term to long term
Sourcing transparency and product labelling regulations
These 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.
Impact on Business Groups: All Business Groups could be
impacted by sourcing transparency and product labelling
regulations and, given the nature of all the raw materials
used, the risk to each Business Group is equal.
Timeframe: Medium term to long term
Management of risk
Actions: We monitor potential land use regulations to ensure
we understand their implications so that we can adapt our
raw material supply strategy. By the end of 2023 we had put in
place the infrastructure, monitoring and verification systems
to manage a deforestation-free supply chain. In addition, we
are working with farmers across our supply chain to drive
sustainable sourcing and regenerative agriculture.
Key goals:
■ 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
Actions: We monitor regulatory developments to ensure
that our product composition is compliant and that future
innovations/products are designed to consider forthcoming
climate-related legislation. As part of our CTAP, we are
committed to reducing the GHG impact of our products and as
part of this, we are reviewing our intensive GHG components
and ingredients and looking for substitutions or how changes
in their production processes can reduce their GHG emissions.
We have a diverse portfolio of products and offer a range of
formats to meet consumers' needs and this helps mitigate
the potential impact of restrictions or bans on specific GHG-
intensive materials. Specifically, on HFC propellants, we have
successfully advocated for a change in regulations in the US to
allow the use of alternative less carbon-intensive propellants.
Key goals:
■ Reduce emissions from aerosol propellants in the US and
Canada
Actions: We monitor regulatory developments to ensure that
our product labelling is compliant and that future innovations/
products are designed to consider forthcoming climate- related
legislation. As part of our CTAP we are committed to improving
sourcing transparency, through collaboration with our
suppliers, and transparency with consumers through product
labelling. We are currently working with the EcoBeautyScore
Consortium to develop a common labelling convention that
will allow consumers to compare the environmental impact
of products. We have a diverse portfolio of products and offer
a range of formats to meet consumers' needs and this helps
mitigate the potential impact of product labelling regulations.
Key goals:
■ 100% sustainable sourcing for key agricultural crops
Unilever Annual Report and Accounts 2023
51
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FINANCIAL STATEMENTS
Review of the Year
Regulatory risks continued
Risk
Extended producer responsibility (EPR)
This means 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.
Impact on Business Groups: All Business Groups could be
impacted by the extended producer responsibility risk. Given
the nature of our products and their packaging, the risk to
each Business Group is equal with the exception of the Ice
Cream business which does not sell product in single-use
sachets. These sachets are difficult to collect and recycle.
Timeframe: Short term to long term
Energy transition and rising energy prices
Management of risk
Actions: We support EPR policies and schemes and we are
investing directly in waste collection, processing and capacity-
building projects to recycle more plastic.
Innovation is also critical to help develop:
■ Suitable packaging that is fully recyclable and more widely
recyclable.
■ Product formats suitable for refill and reusable packaging
solutions.
■ Higher levels of recycled material into our packaging and
components.
Key goals:
■ 50% virgin plastic reduction by 2025
■ 100% reusable, recyclable or compostable plastic packaging
by 2025
■ 25% recycled plastic by 2025
■ Collect and process more plastic than we sell by 2025
This 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 increase
our operations, suppliers, and end-consumers’ utility costs.
Actions: We mitigate our 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 44).
Impact on Business Groups: All Business Groups could be
impacted by energy transition and rising energy prices and the
likely impact would be equal across all the Business Groups.
Key goals:
■ 100% renewable electricity by 2030
■ Transition to 100% renewable heat by 2030
Timeframe: Short term to long term
Energy and commodity market volatility
This 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.
Impact on Business Groups: All Business Groups could be
impacted by energy and commodity market volatility and the
likely impact would be equal across all the Business Groups.
Timeframe: Short term to long term
Actions: We manage commodity price risks through forward-
buying of traded commodities and other hedging
mechanisms.
Key goals:
■ 100% sustainable sourcing for key agricultural crops
Physical environment risks
Risk
Water scarcity
Management of risk
This could 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.
Impact on Business Groups: All Business Groups could be
impacted by water scarcity. Given the nature of our products,
the impact of drought on crop production would be equal
across all Business Groups. However, the impact of water
shortages on consumers would likely impact their washing
behaviours and hence impact the Personal Care and Home
Care businesses to a greater extent.
Timeframe: Medium term to long term
Actions: We mitigate 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 and
we have developed concentrated home care products which
reduce water use at our sites but also contribute to reduced
packaging and distribution costs. We are working with local
communities to develop water stewardship programmes.
We monitor changing weather patterns on a short-term
basis and integrate weather system modelling into our
forecasting process.
Key goals:
■ Implement water stewardship programmes in 100 locations
in water-stressed areas by 2030
52
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FINANCIAL STATEMENTS
Review of the Year
Physical environment risks continued
Risk
Extreme weather events
This 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, caused by extreme weather events, could
reduce or destroy consumer demand and purchasing power
among affected communities.
Impact on Business Groups: All Business Groups could be
impacted by extreme weather, the most likely significant impact
being the reduction of crop outputs which, given the nature of
our products, would impact the Business Groups equally.
Timeframe: Medium term to long term
Management of risk
Actions: We have extreme weather contingency plans which
we implement as necessary 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 and we aim to
increase the hectares of protected and regenerated land.
Key goals:
■ Help protect and regenerate 1.5 million hectares of land
Innovative products and services opportunities
Opportunity
Capitalisation of opportunity
Growth in plant-based or lab-grown foods
This 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.
Timeframe: Short term to long term
Actions: We are capitalising on innovative product and service
opportunities by offering a range of vegan and vegetarian
products in our Nutrition and Ice Cream Business Groups.
Key goals:
■ €1.5 billion of sales per annum from plant-based products
in categories whose products are traditionally using animal-
derived ingredients by 2025
Resource efficiency, resilience, and market opportunities
Opportunity
Capitalisation of opportunity
Investment in energy transition technologies
This 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.
Timeframe: Short term to long term
Actions: We capitalise on resource efficiency opportunities by
generating renewable electricity at our factory sites where
feasible (see page 44), targeting emissions reduction from our
logistics suppliers and own vehicle fleet (see page 45) 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 25).
Key targets:
■ Zero GHG emissions in our operations by 2030
Unilever Annual Report and Accounts 2023
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FINANCIAL STATEMENTS
Review of the Year
Summary of high-level quantitative assessment
We have undertaken high-level quantitative assessments for six risks and opportunities. 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 (r) and proactive (p) pathways assessed. We first undertook scenario analysis in 2017 on
2°C and 4°C scenarios. In 2021, we 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. In 2023, we updated our financial impact assessment of carbon tax and
voluntary carbon removal costs based on i) restated 2021 baseline emissions, ii) an assumption that we achieve 90% reduction
by 2050 and iii) only carbon removals are used to achieve net zero goals (no offsets).
Our current internal carbon price of €70 per tonne, reviewed annually, is based on the range and expected increase from the
High-Level Commission on Carbon Pricing’s report, released in 2017, concluding on a carbon price of $40-$80 per tonne of CO2e
by 2020, rising to $50-$100 per tonne by 2030. The carbon prices used for our 1.5°C scenario analysis for the medium to long term
(2030–2050) range from $90/tonne to $250/tonne across the proactive and reactive pathways. These are based on the IEA’s
Global Energy and Climate ('GEC') 2023 Model 'Net Zero Emissions by 2050 Scenarios' which assume that carbon prices rise
rapidly across all advanced economies as well as in emerging economies with net zero emissions pledges. Our carbon pricing
progression thus reflects the expectation from IEA modelling that carbon prices will increase from current prevailing levels.
Financial quantification of assessed risks and opportunities
Potential financial impact on profit in the
year (€bn)(a)
Regulatory and Market Risks
Key assumptions
Sensitivity
2030
2039
2050
1. Carbon tax and voluntary carbon
removal costs
We quantified how high prices from
carbon regulations and voluntary removal
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.
■ Absolute zero Scope 1 and 2 emissions
by 2030
■ Scope 3 emissions taxes exclude
indirect consumer use emissions
■ 90% reduction of emissions by 2050 from
2021 baseline
■ Carbon price would reach 250 USD/
tonne by 2050, rising more aggressively
in early years in a proactive scenario
■ The price of carbon removals would
reach 88 USD/ tonne by 2050
■ Removal of 100% emissions on and after
2039
■ 100% of emissions on or after 2039
exposed to both removal costs and
carbon taxes
p
-5.4 -10.4
-1.8
r
-3.5
-9.3
-1.8
2. Land use regulation impact on food
crop outputs
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.
■ 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%
3. 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.
■ 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%
p
r
p
r
-0.8
-2.1
-5.1
-0.3
-0.7
-1.7
-0.6
-1.5
-3.4
-0.6
-1.5
-3.4
(a)
(b)
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 and assume no actions to mitigate risk are taken and if no actions to capitalise on opportunities are taken.
Refers to Asia, Africa, Middle East, Turkey, Ukraine and Belarus.
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FINANCIAL STATEMENTS
Review of the Year
Financial quantification of assessed risks and opportunities
Potential financial impact on profit in the
year (€bn)(a)
Physical Environmental Risks
Key assumptions
Sensitivity
2030
2039
2050
4. Water scarcity impact on crop yields
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.
5. Extreme weather (temperature)
impact on crop yields
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%
p
r
p
r
-0.2
-0.5
-1.2
-0.3
-0.7
-1.7
-0.3
-0.8
-1.9
-0.4
-1.1
-2.8
Opportunities
Key assumptions
Sensitivity
2030
2039
2050
6. 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.
■ 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
p
r
0.5
1.7
6.4
0.5
1.7
6.4
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 is 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 and updated CTAP.
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 goals and targets
are aligned with a proactive route towards net zero by 2039.
There is still much to do to advance our understanding of the risks 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 are recognised as science-based targets by the Science Based Targets initiative (SBTi). We intend to retire our
target to halve our greenhouse gas impact across the lifecycle by 2030 in 2024. Therefore, we have submitted two new Scope 3
near-term targets to the SBTi during 2023 which are awaiting approval – see page 46 for more details. A summary of the climate
metrics and targets we are currently able to measure can be found on pages 46 to 47, and form part of these TCFD disclosures.
Unilever Annual Report and Accounts 2023
55
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Our Performance
Financial performance
Unilever Group performance
Unilever
Turnover growth
Underlying sales growth*
Underlying volume growth*
Operating margin
Underlying operating margin*
Cash flow from operating activities
Free cash flow*
Net cash flow (used in)/from investing activities
Net cash flow (used in)/from financing activities
Business Group performance
2023
(0.8) %
7.0 %
0.2 %
16.4 %
16.7 %
€11.6bn
€7.1bn
€(2.3)bn
€(7.2)bn
2022
14.5 %
9.0 %
(2.1) %
17.9 %
16.1 %
€10.1bn
€5.2bn
€2.5bn
€(8.9)bn
2021
3.4 %
4.5 %
1.6 %
16.6 %
18.4 %
€10.3bn
€6.4bn
€(3.2)bn
€(7.1)bn
Beauty & Wellbeing
Turnover
Turnover growth
Underlying sales growth*
Operating margin
Underlying operating margin*
Personal Care
Turnover
Turnover growth
Underlying sales growth*
Operating margin
Underlying operating margin*
2023
€12.5bn
2022
2021
€12.3bn
€10.1bn
1.8 %
8.3 %
17.7 %
18.7 %
20.8 %
7.8 %
17.6 %
18.7 %
11.6 %
8.5 %
21.1 %
22.1 %
2023
€13.8bn
2022
2021
€13.6bn
€11.7bn
1.4 %
8.9 %
21.4 %
20.2 %
15.9 %
7.9 %
16.6 %
19.6 %
(2.3) %
0.3 %
19.9 %
21.3 %
56
Unilever Annual Report and Accounts 2023
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Our Performance
Business Group performance continued
Home Care
Turnover
Turnover growth
Underlying sales growth*
Operating margin
Underlying operating margin*
Nutrition
Turnover
Turnover growth
Underlying sales growth*
Operating margin
Underlying operating margin*
Ice Cream
Turnover
Turnover growth
Underlying sales growth*
Operating margin
Underlying operating margin*
∗ Key Financial Indicators.
2023
€12.2bn
(1.8) %
5.9 %
11.6 %
12.3 %
2023
€13.2bn
(5.0) %
7.7 %
18.3 %
18.6 %
2023
€7.9bn
0.5 %
2.3 %
9.6 %
10.8 %
2022
2021
€12.4bn
€10.6bn
17.3 %
11.8 %
8.6 %
10.8 %
1.1 %
3.9 %
12.2 %
13.4 %
2022
2021
€13.9bn
€13.1bn
6.1 %
8.6 %
32.4 %
17.6 %
2022
€7.9bn
14.8 %
9.0 %
9.8 %
11.7 %
4.9 %
5.5 %
16.1 %
19.3 %
2021
€6.9bn
3.2 %
5.7 %
12.1 %
13.9 %
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 59 to 64.
Unilever Annual Report and Accounts 2023
57
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Our Performance
Additional financial disclosures
Cash flow
Cash flow from operating activities increased by €1.5 billion.
This included a €0.8 billion favourable working capital
movement in 2023 compared to a €0.4 billion outflow in
2022. This was partly driven by a reduction of inventories of
€(0.8) billion due to the disposal of Dollar Shave Club and
Suave and an improvement in the average inventory days on
hand. Receivables also decreased by €(0.8) billion offset by
reduced payables of €(0.3) billion. The drivers included the exit
of the TSA arrangement relating to the disposal of the global
tea business.
€ million
Operating profit
Depreciation, amortisation and impairment
Changes in working capital
2023
2022
9,758
10,755
1,579
1,946
814
(422)
Pensions and similar obligations less payments
(281)
(119)
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 paid
Free cash flow*
(185)
203
(433)
(2,335)
212
97
177
(116)
11,561
10,089
(2,135)
(2,807)
(1,703)
(1,627)
(632)
(457)
7,091
5,198
2,453
Net cash flow (used in)/from investing activities
(2,294)
Net cash flow (used in)/from financing activities
(7,193)
(8,890)
Income tax paid decreased by €(0.7) billion compared to the
prior year due to tax refunds, lower tax on disposals, changes
in geographical profit footprint and other one-off items.
Net cash flow used in investing activities was €(2.3) billion
compared to €2.5 billion in the prior year. This variance was
primarily due to the cash proceeds received from the disposal
of the global tea business in 2022 of €4.6 billion. The net cash
outflow in 2023 was primarily the result of capital expenditure,
purchase of financial assets and acquisitions, partly offset by
proceeds from the disposals of Suave and Dollar Shave Club.
Capital expenditure was at a similar level as the prior year.
Net cash flow used in financing activities was €(7.2) billion
compared to €(8.9) billion in the prior year primarily due to a
lower net repayment of borrowings of €1.7 billion. The impact
from share buybacks was consistent with the prior year.
Balance sheet
€ million
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
58
Unilever Annual Report and Accounts 2023
2023
2022
39,466
40,489
17,898
18,175
17,902
19,157
75,266
77,821
23,507
25,427
30,995
30,693
54,502
56,120
18,102
19,021
2,662
2,680
Goodwill and intangible assets were €39.5 billion. This was
a decrease of €(1.0) billion compared to the prior year. The
decrease was due to an adverse currency impact of €1.0
billion, with other movements from the acquisitions of Yasso
and OZiva offset by the disposal of Suave and classification of
Elida Beauty as held for sale. See note 21 on pages 220 to 222
and note 9 on pages 195 to 197 for more.
Other non-current assets decreased by €(0.3) billion with a
reduced net pension surplus mainly due to lower interest rates
leading to increased pension liabilities, partly offset by the
increased value of bonds and similar assets. Current assets
decreased by €(1.3) billion led by trade and other current
receivables, inventories and cash and cash equivalents, partly
offset by an increase in other financial assets and assets held
for sale following the announcement on the sale of the Elida
Beauty business. Inventories decreased by €(0.8) billion due to
currency movements, improved inventory days on hand and
the impact of business disposals. Receivables decreased by
€(1.3) billion, including the impact of €(0.6) billion due to
currency movements and €(0.7) billion due to the exit of the
TSA relating to the disposal of our global tea business. Cash
and cash equivalents decreased by €(0.2) billion.
Non-controlling interest was flat versus the prior year.
Net debt*
Closing net debt was €23.7 billion, in line with 31 December
2022. Capital returns of €4.4 billion in dividends and €1.5 billion
in share buybacks to PLC shareholders, as well as net spend
on acquisition and disposal activity, were fully funded by the
free cash flow delivery of €7.1 billion. Net debt to underlying
earnings before interest, taxation, depreciation and
amortisation (UEBITDA) was 2.1 as at 31 December 2023, in line
with 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.
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 €2.4 billion at the end of 2023 compared with a
surplus of €2.6 billion at the end of 2022. The decrease was
primarily driven by reductions in interest rates increasing
liabilities more than assets.
€ million
1 January
Gross service cost
Employee contributions
Actual return on plan assets (excluding interest)
Net interest income/(cost)
Actuarial gain/(loss)
Employer contributions
Currency retranslation
Other movements(a)
31 December
2023
2,569
(128)
11
131
110
(870)
407
186
(15)
2,401
(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 185
to 190.
20,764
21,701
75,266
77,821
*
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 59 to 64.
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Our Performance
Finance and liquidity
Approximately €0.9 billion (or 21%) of the Group’s cash and
cash equivalents are held in 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 208 to 214. The remaining €3.3 billion
(or 79%) 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 €98 million (2022: €449
million, 2021: €83 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 2023 were $5,200 million and €2,600
million. 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 2023. 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.
Due
within 1
year
2023
Due in
1-3 years
Due in
3-5 years
Due in
over 5
years
25,782
2,595
5,048
5,932
12,207
1,973
1,972
1
—
—
4,268
607
1,032
805
1,824
291
64
42
37
148
4,370
1,510
1,806
715
306
407
789
—
265
2
55,335
23,574
8,998
7,929
14,834
(a)
(b)
For raw and packaging materials and finished goods.
Includes other financial liabilities and deferred consideration for acquisitions.
€ million
Bonds
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
Further details are set out in the following notes to the
consolidated financial statements: note 10 on pages 197 to
199, note 15C on pages 206 to 207, and note 20 on pages 219
and 220. 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 2023, the Group had in issue US$11.2 billion
(2022: US$10.8 billion; 2021: US$12.1 billion) bonds in
connection with a US shelf registration. See page 255 for
more information on these bonds and related commentary
on guarantor information.
Non-GAAP measures
Certain discussions and analyses set out in this Annual Report
and Accounts (and the Additional Information for US Listing
Purposes) include measures which are not defined by
generally accepted accounting principles (GAAP) such as IFRS.
We believe this information, along with comparable GAAP
measurements, is useful to investors because it provides a
basis for measuring our operating performance, and our
ability to retire debt and invest in new business opportunities.
Our management uses these financial measures, along with
the most directly comparable GAAP financial measures, in
evaluating our operating performance and value creation.
Non-GAAP financial measures should not be considered in
isolation from, or as a substitute for, financial information
presented in compliance with GAAP. Wherever appropriate
and practical, we provide reconciliation to relevant
GAAP measures.
Explanation and reconciliation of non-GAAP
measures
Unilever uses ‘constant rate’ and ‘underlying’ measures
primarily for internal performance analysis and targeting
purposes. We present certain items, percentages and
movements, using constant exchange rates, which exclude
the impact of fluctuations in foreign currency exchange rates.
We calculate constant currency values by translating both the
current and the prior period local currency amounts using the
prior year average exchange rates into euro, except for the
local currency of entities that operate in hyperinflationary
economies. These currencies are translated into euros using
the prior year closing exchange rate before the application
of IAS 29.
Brazilian real (€1 = BRL)
Chinese yuan (€1 = CNY)
Indian rupee (€1 = INR)
Indonesia rupiah (€1 = IDR)
Philippine peso (€1 = PHP)
UK pound sterling (€1 = GBP)
US dollar (€1 = US$)
Annual average
rate in 2023
Annual average
rate in 2022
5.405
7.635
89.232
16,457
60.110
0.870
1.081
5.414
7.047
82.303
15,535
57.194
0.851
1.050
Unilever Annual Report and Accounts 2023
59
Lease liabilities
1,691
407
16,245
16,113
86
576
20
346
26
362
The table below shows exchange rate movements in our
key markets.
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Our Performance
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 price growth;
■ underlying volume growth;
■ non-underlying items;
■ underlying operating profit and underlying operating
margin;
■ underlying earnings per share;
■ underlying effective tax rate;
■ constant underlying earnings per share;
■ free cash flow;
■ cash conversion;
■ net debt;
■ underlying return on invested capital; and
■ underlying return on assets.
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:
2023 vs 2022 (%)
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)
2022 vs 2021 (%)
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)
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)
Beauty &
Wellbeing Personal Care
Home Care
Nutrition
Ice Cream
Group
1.8
1.9
(1.7)
(6.2)
(7.5)
1.5
8.3
20.8
3.8
(0.1)
8.1
6.9
1.0
7.8
11.6
6.0
—
(3.0)
(3.1)
0.2
8.5
1.4
—
(0.9)
(6.1)
(8.0)
2.1
8.9
15.9
—
—
7.4
6.2
1.1
7.9
(2.3)
—
—
(2.6)
(2.9)
0.3
0.3
(1.8)
—
—
(7.2)
(10.3)
3.4
5.9
17.3
—
—
4.9
2.6
2.2
11.8
1.1
—
(0.1)
(2.6)
(2.9)
0.3
3.9
(5.0)
—
(6.9)
(5.2)
(6.8)
1.7
7.7
6.1
0.3
(7.1)
4.9
3.6
1.2
8.6
4.9
1.3
(0.3)
(1.5)
(1.8)
0.3
5.5
0.5
0.9
—
(2.7)
(5.4)
2.8
2.3
14.8
—
—
5.4
3.9
1.5
9.0
3.2
—
(0.1)
(2.3)
(2.6)
0.4
5.7
(0.8)
0.5
(2.1)
(5.7)
(7.8)
2.2
7.0
14.5
0.8
(1.8)
6.2
4.7
1.4
9.0
3.4
1.4
(0.1)
(2.4)
(2.6)
0.3
4.5
(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.
60
Unilever Annual Report and Accounts 2023
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Our Performance
Underlying volume growth
Underlying volume growth (UVG) is part of USG and means,
for the applicable period, the increase in turnover in such
period calculated as the sum of (i) the increase in turnover
attributable to the volume of products sold; and (ii) the
increase in turnover attributable to the composition of
products sold during such period. UVG therefore excludes
any impact on USG due to changes in prices.
Underlying price growth
Underlying price growth (UPG) is part of USG and means, for
the applicable period, the increase in turnover attributable to
changes in prices during the period. UPG therefore excludes
the impact to USG due to (i) the volume of products sold; and
(ii) the composition of products sold during the period. In
determining changes in price we exclude the impact of price
growth in excess of 26% per year in hyperinflationary
economies as explained in USG above.
The relationship between USG, UVG and UPG is set out below:
Underlying volume growth (%)
Underlying price growth (%)
Underlying sales growth (%)
2023 vs 2022
2022 vs 2021
2021 vs 2020
0.2
6.8
7.0
(2.1)
11.3
9.0
1.6
0.3
1.9
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.
The breakdown of non-underlying items is shown below:
€ million
€ million
€ million
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
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
Tax related to the separation of the Tea business
Taxes related to the reorganisation of our European business
Taxes related to the UK tax audit of intangible income and centralised services
Hyperinflation adjustment for Argentina and Turkey 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
2023
(173)
(242)
489
(499)
(1)
80
207
34
(153)
(11)
(142)
12
(4)
–
(5)
21
(141)
(107)
(6)
(101)
2022
1,072
(50)
2,335
(777)
(221)
(215)
273
1,345
(164)
(7)
(157)
(121)
(35)
–
(5)
(81)
(285)
1,060
(14)
1,074
2021
(934)
(332)
36
(632)
(17)
11
219
(715)
(64)
10
(74)
(41)
–
31
(29)
(43)
(105)
(820)
(30)
(790)
(a)
(b)
(c)
(d)
(e)
(f)
2023 includes a charge of €104 million for the revaluation of the minority interest liability of Nutrafol, €43 million relating to the disposal of Elida Beauty and €10
million (2022: €42 million) relating to the disposal of the global tea business.
2023 includes a gain of €497 million related to the disposal of Suave business in North America. 2022 includes a gain of €2,303 million related to the disposal of the
global tea business.
Restructuring costs are comprised of strategic organisational change programmes (including Compass), and transformational technology and supply chain projects.
2022 includes an impairment charge of €192 million relating to Dollar Shave Club.
2023 includes €28 million net release after utilisation to the provision (2022: €89 million charge) relating to a product recall and market withdrawal by The Laundress,
€107 million release (2022: €82 million charge) relating to legal provisions for ongoing competition investigations and €54 million charge (2022: €42 million charge)
relating to our businesses in Russia and Ukraine.
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 2023
61
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Our Performance
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:
€ million
Operating profit
2023
2022
9,758
10,755
2021
8,702
Non-underlying items within operating
profit
173
(1,072)
934
Underlying operating profit
9,931
9,683
9,636
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:
€ million
Taxation
Tax impact of:
2023
2022
2,199
2,068
Non-underlying items within operating profit
207
273
Non-underlying items not in operating profit but
within net profit(a)
Taxation before tax impact of non-underlying
Profit before taxation
12
(121)
2,418
2,220
9,339
10,337
(231)
(208)
9,108
10,129
173
(1,072)
153
164
9,434
9,221
24.1
25.6
20.4
24.1
Turnover
Operating margin
Underlying operating margin
59,604
60,073
52,444
16.4%
16.7%
17.9%
16.1%
16.6%
18.4%
Share of net (profit)/loss of joint ventures and
associates
Profit before tax excluding share of net profit/
(loss) of joint ventures and associates
Further details on non-underlying items can be found on page
61 of the consolidated financial statements.
Non-underlying items within operating profit
before tax(a)
Refer to note 2 on page 181 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.
Underlying earnings per share
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.
The reconciliation of net profit attributable to shareholders’
equity to underlying profit attributable to shareholders' equity
is as follows:
Non-underlying items not in operating profit but
within net profit before tax
Profit before tax excluding non-underlying items
before tax and share of net profit/(loss) of joint
ventures and associates
Effective tax rate
Underlying effective tax rate
(a)
See page 61 for further details.
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.
€ million
Net profit
Non-controlling interests
Net profit attributable to shareholders’
equity – used for basic and diluted
earnings per share
Post-tax impact of non-underlying
items
Underlying profit attributable to
shareholders’ equity – used for
underlying earnings per share
Adjusted average number of shares
(millions of share units)
Diluted EPS (€)
Underlying EPS – diluted (€)
2023
2022
2021
7,140
8,269
6,621
(653)
(627)
(572)
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:
6,487
7,642
6,049
€ million
101
(1,074)
790
Underlying profit attributable to shareholders’
equity
Impact of translation from current to constant
exchange rates and translational hedges
2023
2022
6,588
6,568
992
(10)
6,588
6,568
6,839
Impact of price growth in excess of 26% per year in
hyperinflationary economies(a)
(378)
—
2,532.4
2,559.8
2,609.6
2.56
2.60
2.99
2.57
2.32
2.62
Constant underlying earnings attributable to
shareholders’ equity
Diluted average number of share units (millions of
units)
7,202
6,558
2,532.4
2,559.8
2.84
2.56
Constant underlying EPS (€)
(a)
See pages 59 to 61 for further details.
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.
62
Unilever Annual Report and Accounts 2023
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Our Performance
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:
€ million
2023
2022
2021
Cash flow from operating activities
11,561
10,089
10,305
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
(2,135)
(2,807)
(2,333)
(1,703)
(1,627)
(1,239)
(632)
(457)
(340)
7,091
5,198
6,393
(2,294)
2,453
(3,246)
(7,193)
(8,890)
(7,099)
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.
€ million
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
Other current financial assets
Non-current financial assets
derivatives that relate to financial
liabilities
Net debt
2023
(29,622)
(5,087)
(24,535)
4,159
4,045
116
(2)
1,731
2022
(29,488)
(5,775)
(23,713)
4,326
4,225
101
0
1,435
75
51
(23,657)
(23,676)
Cash conversion
Unilever defines cash conversion as free cash flow excluding
tax on disposal as a proportion of net profit, excluding P&L
on disposal and income from joint ventures, associates and
non-current investments. This reflects our ability to convert
profit to cash.
€ million
Net profit
Gain on disposal of group companies
2023
2022
7,140
8,269
(489)
(2,335)
Share of net profit of joint ventures and associates
(231)
(208)
Other loss/(income) from non-current investments
and associates
Tax on gain on disposal of group companies
Net profit excluding P&L on disposals, JV,
associates, NCI
Free cash flow
Cash impact of tax on disposal
Free cash flow excluding cash impact of tax on
disposal
Cash conversion (%)
22
(69)
(24)
(1)
6,373
7,091
14
5,701
5,198
330
7,105
5,528
111
97
Net debt
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.
Underlying return on invested capital
Underlying 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. Underlying 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
Operating profit
Non-underlying items within
operating profit
Underlying operating profit before
tax
Tax on underlying operating profit
Underlying operating profit after
tax
Goodwill
Intangible assets
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
Underlying return on invested
capital (%)
2023
9,758
2022
10,755
173
(1,072)
9,931
(2,545)
7,386
21,109
18,357
10,707
516
5,119
5,775
9,683
(2,331)
7,352
21,609
18,880
10,770
24
5,931
7,056
(16,857)
44,726
(18,023)
46,247
45,487
46,005
16.2
16.0
(a)
Tax on underlying operating profit is calculated as underlying operating profit
before tax multiplied by underlying effective tax rate of 25.6% (2022: 24.1%)
which is shown on page 62.
Unilever Annual Report and Accounts 2023
63
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Our Performance
Underlying return on assets
Underlying return on assets is a measure of the return
generated on assets for each Business Group. This measure
provides additional insight on the performance of the Business
Groups and assists in formulating long-term strategies with
respect to allocation of capital across Business Groups.
Business Group underlying return on assets is calculated as
underlying operating profit after tax for the Business Group
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
Business Group. The annual average is computed by adding
the amounts at the beginning and the end of the calendar
year and dividing by two.
Beauty &
Wellbeing Personal Care
Home Care
Nutrition
Ice Cream
€ million
2023
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
2,331
(597)
1,734
1,773
—
1,179
1,208
2,792
(716)
2,076
2,340
(31)
1,128
1,340
Trade payables and other current liabilities
(3,439)
(3,746)
Period-end assets (net)
Average assets for the period (net)
Underlying return on assets (%)
2022
Underlying operating profit before tax
Tax on underlying operating profit
Underlying operating profit after tax
Property plant and equipment
Net assets held for sale
Inventories
Trade and other receivables
Trade payables and other current liabilities
Period-end assets (net)
Average assets for the period (net)
Underlying return on assets (%)
721
880
197
2,292
(552)
1,740
1,775
—
1,386
1,439
(3,562)
1,038
979
178
1,031
1,164
178
2,679
(644)
2,035
2,259
2
1,352
1,601
(3,918)
1,296
1,403
145
1,496
(383)
1,113
1,979
—
785
1,180
(3,626)
318
420
265
1,344
(324)
1,020
2,112
—
909
1,457
(3,955)
523
558
183
2,460
(631)
1,829
1,976
15
1,090
1,279
852
(218)
634
2,639
—
937
768
Total
9,931
(2,545)
7,386
10,707
(16)
5,119
5,775
(3,646)
(2,400)
(16,857)
714
866
211
2,449
(590)
1,859
2,196
20
1,267
1,632
1,944
1,910
33
919
(221)
698
2,428
—
1,017
927
4,728
5,241
141
9,683
(2,331)
7,352
10,770
22
5,931
7,056
(4,095)
(2,493)
(18,023)
1,020
1,295
144
1,879
1,780
39
5,756
6,015
122
Other information
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 2022
except for the recent accounting developments as set out in
note 1 on pages 177 to 179. 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 177 to 179.
Auditor's report
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 157 to 172.
2022 financial review
The financial review for the year ended 31 December 2022 can
be found on pages 54 to 59 of our Annual Report and Accounts
on Form 20-F filed with the United States Securities and
Exchange Commission on 13 March 2023.
64
Unilever Annual Report and Accounts 2023
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Our Performance
Non-financial performance
Climate
Goal
2023
2022
2021
Zero GHG emissions in our operations by 2030 (% change in
tonnes of GHG emissions from energy and refrigerant use
since 2015)(a)(b)
Halve GHG impact of our products across the lifecycle by
2030 (% change in grams of CO2e per consumer use since
2010)(c)
-100%
'-74% '-68%Θ
-64%
-50%
'-21%
-19%
'-14%△
Nature
Goal
2023
2022
2021
Deforestation-free supply chain in palm oil, paper & board,
tea, soy and cocoa by 2023 (% of palm oil, paper and board,
tea, soy and cocoa order volumes which were deforestation-
free by the end of 2023)(d)
Help protect and regenerate 1.5 million hectares of land,
forests and oceans by 2030 (hectares)
100% sustainable sourcing of our key agricultural crops
(% purchased)(f)
Implement water stewardship programmes in 100 locations
in water-stressed areas by 2030 (number of water
stewardship programmes)
100% 97.5%†(e)
–
–
1.5m
100%
100
0.3m†
79%
0.2m
0.1m
81%
79%
13
8
–
Plastics
Goal
2023
2022
2021
50% virgin plastic reduction by 2025 (% change in total
tonnes of virgin plastic used vs 2019 baseline)(a)(g)
-50%
-18%
'-13%
'-8%
100% reusable, recyclable or compostable plastic
packaging by 2025 (% of total tonnes of reusable, recyclable
or compostable plastic packaging used)(a)(g)(h)
25% recycled plastic by 2025 (% of total used
in packaging)(a)(g)
Collect and process more plastic than we sell by 2025
(tonnes of plastic packaging collected and processed,
% of tonnes of plastic sold)(a)(g)
100%
25%
100%
53%
22%†
61%
55%Θ
53%
21%
18%
58%
–
Livelihoods
Goal
2023
2022
2021
Spend €2 billion annually with diverse businesses
worldwide by 2025 (€ spend)
€2bn
€1.1bn†
€818m €445m
Help 5 million SMEs to grow their business by 2025
(number of SMEs)(i)
5m
1.9m 1.8mΘ
1.2m
Δ This table provides an overview of progress against the goals we set in 2021, aligned with our four sustainability focus areas announced as part of the Growth Action Plan.
See page 38 to 47 for progress commentary. Additional non-financial metrics can be found on page 66.
† This metric was subject to independent limited assurance by PricewaterhouseCoopers LLP (‘PwC’) in 2023. For PwC's 2023 Limited Assurance report and the 2023
Unilever Basis of Preparation for assured metrics, see Independent Assurance in the Sustainability Reporting Centre on unilever.com.
Θ This metric was subject to independent limited assurance by PwC in 2022. For PwC's 2022 Limited Assurance report and the 2022 Unilever Basis of Preparation for
assured metrics, see Reporting Archive in the Sustainability Reporting Centre on unilever.com.
Δ This metric was subject to independent limited assurance by PwC in 2021. For PwC's 2021 Limited Assurance report and the 2021 Unilever Basis of Preparation for
assured metrics, see Reporting Archive in the Sustainability Reporting Centre on unilever.com.
(a) Measured for 12-month period ended 30 September.
(b)
These emissions exclude Scope 1 & 2 emissions related to small office and logistics sites, fuel consumption from company vehicles, methane and N2O from both fossil
fuels and biofuels, and SF6 from electrical insulators in grid connections.
(c) Measured for the 12-month period ended 30 June.
(d) Deforestation-free refers to the meeting of Unilever's deforestation-free requirements.
(e) Measured for all commodity volumes ordered for the 3-month period October to December 2023 except for order volumes of palm oil for India measured only for
(f)
December 2023.
Comprising 66% key agricultural crops purchased from suppliers that comply with the requirements set out in Unilever’s Sustainable Agriculture Code 2017 (71% in
2022, 69% in 2021) and, 13% purchased from non-sustainable suppliers but have been matched by credits purchased for raw materials (10% in 2022, 10% in 2021).
Scope of reporting on our plastic goals is 27 countries.
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.
(i) Measured for the 3-month period October to December.
(g)
(h)
Unilever Annual Report and Accounts 2023
65
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Our Performance
Additional 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, our non-financial and sustainability information statement
in line with the UK Companies Act 2006, our EU Taxonomy disclosure, and our employee gender reporting in alignment with the
UK Corporate Governance Code.
Additional non-financial metrics
The following table details our progress against a number of the goals we set in 2021. Progress against our non-financial KPIs
can be found on page 65.
Additional non-financial metrics
Goal
2023
2022
€1.5 billion of sales per annum from plant-based products in categories
whose products are traditionally using animal-derived ingredients by
2025 (€ sales)
Double the number of products sold that deliver positive nutrition by
2025 (% of servings sold)(a)
85% of our portfolio to meet Unilever’s Science-based Nutrition Criteria
by 2028 (% of servings sold) (a)
95% of packaged ice cream to contain no more than 22g total sugar per
serving by 2025 (% of sales by volume)(a)
95% of packaged ice cream to contain no more than 250 kcal per serving
by 2025 (% of sales by volume)(a)
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)(b)
Reskill or upskill our employees with future-fit skills by 2025 (% of
employees with future-fit skills)
Halve food waste in our operations by 2025 (% change since 2019)
Maintain zero non-hazardous waste to landfill in our factories (%
disposed)
54%
85%
95%
95%
1bn
100%
-50%
0%
€1.5bn
€1.2bn
€1.2bn
52%
81%
89%†
94%†
48%Θ
–
89%
94%
2021
–
41%
–
89%
94%
638m
667m
686m
24%
'-30%†
0%
15%
-17%
0%
7%
-4%
0%
† This metric was subject to independent limited assurance by PricewaterhouseCoopers LLP (‘PwC’) in 2023. For PwC's 2023 Limited Assurance report and the 2023
Unilever Basis of Preparation for assured metrics, see Independent Assurance in the Sustainability Reporting Centre on unilever.com.
Θ This metric was subject to independent limited assurance by PricewaterhouseCoopers LLP (‘PwC’) in 2022. For PwC's 2022 Limited Assurance report and the 2022
Unilever Basis of Preparation for assured metrics, see Reporting Archive in the Sustainability Reporting Centre on unilever.com.
(a) Measured for 12-month period ended 30 September.
(b)
Lifebuoy, Dove, Signal/Pepsodent and Vaseline contribute to this goal.
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. Our Section 172 statement includes the information set out on pages 91 to 94 of the
Governance Report. Pages 91 to 92 identifies our key stakeholders and provides examples of how the business engaged them
during 2023, with cross references to the Review of the Year section for more detail. Pages 93 to 94 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.
66
Unilever Annual Report and Accounts 2023
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Our Performance
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 seven manufacturing
sites and 11 non-manufacturing sites based in the UK. In 2023, the UK accounted for 9% of our global total Scope 1 and 2 GHG
emissions as well as 6% of our global energy use, outlined in the table below. See page 44 for more on energy efficiency
measures taken during 2023.
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
2023
2022
2021
9,354,000
13,520,000
10,025,000
226,742,000
242,688,000
226,110,000
0
937,000
1,411,000
716,000
0
0
0
0
0
129,300,000
107,309,000
171,897,000
236,294,000
255,480,000
192,738,000
365,594,000
362,788,000
364,635,000
5,971,759,000
6,609,692,000
7,002,482,000
41,594
64.2
0
0
39,545
50.5
0
0
45,740
56.9
0
0
Fleet and associated diesel use excluded as it is not material. Transportation is operated by a third party and accounted for under Scope 3.
(a)
(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.
Carbon emission factors for grid electricity calculated according to the ‘market-based method’. Total Scope 2 emissions reported as zero as we now use 100%
renewable grid electricity across all our sites in the UK.
(c)
Employee diversity
As part of our disclosure to comply with the UK Corporate Governance Code 2018 and the Companies Act 2006, the table below
shows our workforce diversity by gender and work level as at 31 December 2023.
Gender statistics
Board
Unilever Leadership Executive (ULE)
Senior management(a)
Management(b)
Total workforce
2023
Male Unspecified(c)
0
7
Female
5
42%
2
15%
29
36%
9,468
55%
58%
11
85%
52
64%
7,885
45%
47,633
80,718
37%
63%
0
0
3
0.02%
26
0.02%
Female
Male Unspecified
2022
5
38%
3
23%
27
31%
8,740
54%
46,014
36%
8
62%
10
77%
60
69%
7,583
46%
80,974
64%
0
0
0
18
0.1%
68
0.06%
Employees who are statutory directors of the corporate entities included in this Annual Report and Accounts: 523 (63%) males and 309 (37%) females (see pages
234 to 244).
(a)
(b)
(c)
Employees in senior management roles one work level below ULE (based on internal reporting definitions).
Employees in management roles Including ULE and senior management.
'Unspecified' includes those who are not identified as male or female in our systems.
Unilever Annual Report and Accounts 2023
67
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Our Performance
Non-financial and sustainability 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. Our business model
can be found on pages 2 to 3, which identifies our stakeholder groups, and our principal risks can be found on pages 70 to 78.
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
Annual Report page reference
Environmental matters
Relevant sections of Annual Report and Accounts:
■ Climate
■ Plastics
■ Nature
■ Our Climate Transition Action Plan: Annual Progress Report
■ Task Force on Climate-related Financial Disclosures
statement
■ EU Taxonomy disclosures
Social and community matters
Relevant sections of Annual Report and Accounts:
■ Livelihoods
Employee matters
Relevant sections of Annual Report and Accounts:
■ Our People & Culture
■ Equity, diversity and inclusion
■ Livelihoods
■ Future of work
■ Employee health and wellbeing
■ Safety at work
Human rights matters
Relevant sections of Annual Report and Accounts:
■ Livelihoods
■ Human Rights
Anti-corruption and bribery matters
Relevant sections of Annual Report and Accounts:
■ Our People & Culture
■ Policies and due diligence: pages 40 to 41 and 43 to 47
■ Position and performance (including relevant non-
financial KPIs): pages 46 to 47 and 65 to 66
■ Risk: pages 48 to 55 and 72 and 73
■ Impact: pages 40 and 41 and 48 to 55
■ Policies and due diligence: page 42
■ Position and performance (including relevant
non-financial KPIs): page 65
■ Risk: pages 42 and 77
■ Impact: page 42
■ Policies and due diligence: pages 34 to 37
■ Position and performance (including relevant
non-financial KPIs): pages 34 to 37 and 65 and 66
■ Risk: pages 34 to 37 and 74
■ Impact: pages 34 to 37
■ Policies and due diligence: page 42
■ Position and performance (including relevant
non-financial KPIs): pages 42 and 65
■ Risk: pages 42 and 77
■ Impact: page 42
■ Policies and due diligence: page 37
■ Position and performance (including relevant
non-financial KPIs): page 37
■ Risk: pages 37 and 77
■ Impact: page 37
68
Unilever Annual Report and Accounts 2023
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Our Performance
EU Taxonomy disclosures
The EU Taxonomy sets out reporting obligations for certain European businesses. It outlines certain activities deemed to be
environmentally sustainable and refers to them as “eligible” and “aligned” activities. For financial year 2023, businesses need
to assess whether they have eligible activities within each of the six environmental objectives: i) climate change mitigation,
ii) climate change adaptation, iii) sustainable use and protection of water and marine resources, iv) transition to a circular
economy, v) pollution prevention and control, and vi) protection and restoration of biodiversity and ecosystems. Eligibility
reporting for objectives iii) to vi) is a new requirement for the financial year 2023 reporting.
If the eligible activities are considered to make a substantial contribution and do no significant harm in accordance with the
criteria set out in the regulations, then the eligible activities are designated as “aligned” as long as the business also meets
a minimum set of criteria with respect to human rights, bribery and corruption, taxation and fair competition.
The EU Taxonomy remains a work in progress, and in creating the current list of environmentally sustainable activities, the
European Commission have not yet considered our industry, focusing instead on the more carbon intensive industries where
they believe there is the most potential for climate change mitigation or adaptation.
Using the current list of eligible activities and the alignment criteria, we have reviewed the Group’s turnover, capital expenditure
and operating expenditure (as defined by the EU Taxonomy) to identify the extent of any eligible and aligned activities within
our business. The outcome of our review is presented below.
As the EU Taxonomy is not yet applicable to us and we are providing these disclosures voluntarily, we have chosen to set out the extent
of our eligible and aligned activities in a simplified format instead of showing them in the tables prescribed by the EU Taxonomy.
Turnover
None of our turnover as detailed in our consolidated income statement (page 173) for the year ended 31 December 2023 is
derived from eligible activities. As a consequence, none of our turnover can be classified as aligned.
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. None
of our operating expenditure for the year ended 31 December 2023 is in respect of eligible activities. As a consequence, none of
our operating expenditure can be classified as aligned.
Capital expenditure (intangible assets and property, plant and equipment)
17.7% of our capital expenditure for the year ended 31 December 2023, as detailed in our consolidated financial statements
(pages 195 and 197 to 199) is in respect of eligible activities. There are eligible activities in respect to i) climate change
mitigation, ii) climate change adaptation. The majority of this relates to the acquisition of buildings as shown in the tables
below. There are no eligible activities in respect of iii) sustainable use and protection of water and marine resources, iv)
transition to a circular economy, v) pollution prevention and control, and vi) protection and restoration of biodiversity and
ecosystems. We have determined that none this eligible capital expenditure can be classified as aligned. The principal reason
is because we do not have sufficient detailed documentation to support that this expenditure makes a substantial contribution
to either the climate change mitigation or climate change adaptation environmental objectives. It should be noted that we do
meet the minimum set of criteria with respect to human rights, bribery and corruption, taxation and fair competition.
Taxonomy-eligible but not Taxonomy-aligned activities
4. Energy
4.1 – Electricity generation using solar photovoltaic technology
4.2 – Electricity generation using concentrated solar power (CSP) technology
4.9 – Transmission and distribution of electricity
4.14 – Transmission and distribution networks for renewable and low-carbon gases
4.15 – District heating/cooling distribution
4.16 – Installation and operation of electric heat pumps
4.24 – Production of heat/cool from bioenergy
5. Water supply, sewerage, waste management and remediation activities
5.1 – Construction, extension and operation of water collection, treatment and supply systems
5.2 – Renewal of water collection, treatment and supply systems
5.3 – Construction, extension and operation of waste water collection and treatment
5.4 – Renewal of wastewater collection and treatment
6. Transport
6.5 – Transport by motorbikes, passenger cars and light commercial vehicles
7. Construction and real estate
7.2 – Renovation of existing buildings
7.3 – Installation, maintenance and repair of energy efficiency equipment
7.4 – Installation, maintenance and repair of charging stations for electric vehicles in buildings (and parking spaces attached
to buildings)
7.7 – Acquisition and ownership of buildings
Total Taxonomy-eligible but not Taxonomy-aligned activities
€ million
12.7
0.2
0.1
1.2
0.1
1.7
3.8
0.5
1.0
0.8
0.5
1.7
4.9
8.2
0.6
366.0
404.0
Unilever Annual Report and Accounts 2023
69
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Our Principal Risks
Our Principal Risks
Our risk appetite and approach to risk
management
Risk management is integral to Unilever’s strategy and 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 at the core of the Board
agenda, which is where we believe it should be.
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 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. In this structure, the Board
has delegated the overall accountability for risk management
to both the CEO and CFO. The distribution of accountabilities
and responsibilities ensures that every segment (either
Business Group or country) through 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, including any emerging areas of risks. 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 page 4). 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 Business Groups, geographies
and functions.
A network of Business Integrity Officers and Committees
supports the activities necessary to communicate the Code,
deliver training, maintain processes and procedures (including
support lines) to report and respond to alleged breaches, and
to capture and communicate learnings. We have a framework
of Code Policies that underpins the Code of Business Principles
and sets out the non-negotiable standards of behaviour
expected from all our employees.
70
Unilever Annual Report and Accounts 2023
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, cyber, accounting
and reporting, and financial risk management.
Our assessment of risk considers both short-term 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 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. An integrated assurance
map is maintained across the principal risks to confirm the
mitigation in place through the three lines of defence. 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 107 to 111.
Further statements on compliance with the specific risk
management and control requirements in the UK Corporate
Governance Code (2018), the US Securities Exchange Act (1934)
and the US Sarbanes-Oxley Act (2002) can be found on
pages 100 to 101.
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Our Principal Risks
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
material to Unilever’s business and performance at this time.
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). As part of our process to review our principal risks, we also
consider any additional risks that could emerge in the future.
Our principal risks have remained consistent with previous years. 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:
■ Consumer preference: consumer choices and the manner in which they shop is rapidly evolving requiring us to be ahead of
our competition.
■ Climate change: this risk has further intensified during 2023, as actions to address global warming are not moving at the pace
anticipated and there has been an increase in physical climate risks seen by increased flooding and droughts together with
the ongoing global energy crisis.
■ Systems and information: technology is disrupting the way we do business and we need to accelerate innovation to keep pace
with the developments. The cyber threat landscape has increased in the recent past and continues to remain volatile.
Biodiversity loss continues to be monitored as 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 51 to 53). Refer to our
Climate Transition Action Plan: Annual Progress Report (pages 43 to 47) for steps taken to improve biodiversity. Technological
advancements such as artificial intelligence, machine learning and augmented reality are disrupting the way we do business
and connect with consumers. We do not consider this as a principal risk yet but do acknowledge that it is both a risk and an
opportunity. We have an executive-level task force set up to identify the risks, opportunities and, at the same time, take
responsible action to keep pace with technology.
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.
Level of risk
Increase
Risk
Risk description
Management of risk
Consumer
preference
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 in times of economic
instability and volatility. We also need to be
competitive, bringing innovation to market
with speed in areas such as personalised
and premium beauty offerings, health,
and hygiene.
We monitor external market trends and
collate consumer, customer and shopper
insights in order to develop brand strategies
and build competitive advantage. We are
focused on developing superior products with
a particular focus on our Power Brands.
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
strategies into projects to launch new
products in the market, scale technology
across categories, and build up the multi-year
innovation pipeline. This enables us to
respond to rapidly changing consumer trends
with speed.
Our brand communication strategies are
designed to optimise digital communication
opportunities. We develop and customise
brand messaging content specifically to
ensure that our brand messages reach our
target consumers, including social purpose
where appropriate.
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Our Principal Risks
Level of risk
No change
Increase
Risk
Risk description
Management of risk
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 Business
Groups, 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.
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 is already impacting 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.
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.
Our Business Group strategies 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.
We monitor climate change and in 2021
we published our Climate Transition Action
Plan (update on progress in 2023 included
on pages 43 to 47).
We are developing products with a lower
carbon footprint, decarbonising our
operations through eco-efficiency measures,
powering our factories with renewable
electricity, 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 integrate weather system modelling
into our forecasting process to consider
the impact on raw material availability
and pricing.
We also monitor government policy and
actions to combat climate change and
advocate for changes to public policy
frameworks consistent with the 1.5°C
ambition of the Paris Agreement.
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Our Principal Risks
Level of risk
No change
Risk
Risk description
Management of risk
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.
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.
There is 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.
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 and
are working with partners and consumers
to raise awareness and find solutions to
improve the recycling infrastructure for
plastics. This includes supporting infrastructure
development and optimising EPR schemes,
as well as helping consumers to understand
disposal and collection methods.
Work continues to progress in the main
themes for rigid packaging (e.g. recyclable
pumps, recyclable tubes). For flexibles,
we continue to explore new material
developments, to support improving our
recyclability profile. We aim to halve our use
of virgin plastic by both reducing usage and
accelerating use of recycled plastic through
the redesign of products and increasing our
use of post-consumer recycled materials.
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.
Customer and
channel
Successful customer relationships and
expanding in channels of the future 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. Digital commerce
continues to be a critical channel for growth.
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.
No change
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 digital commerce
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.
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Our Principal Risks
Risk
Talent
Level of risk
No change
Risk description
Management of risk
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.
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.
A move to more agile ways of working is
ongoing to unlock internal capacity and
prioritise work based on growth and impact.
No change
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.
Business
Operations
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
geopolitical sanctions, 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.
Geopolitical tensions have continued to
challenge the continuity and cost of our
supply chain in 2023.
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 continues to
present challenges and requires continued
focus and flexibility.
The cost of our products is being 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
and will need to be carefully managed.
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Our Principal Risks
Level of risk
No change
Increase
Risk
Risk description
Management of risk
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 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.
Systems and
information
Unilever’s operations are increasingly
dependent on IT systems and safeguarding
the confidentiality, integrity of data and the
management of information.
The cyber-attack threat of unauthorised
access and misuse of sensitive information
or disruption to operations continues to
increase with the level of incidents rising
year-on-year. 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.
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 raw material suppliers are externally
certified and the materials received are
monitored to ensure that they meet the
rigorous quality standards that our products
require. We also have stringent requirements
for the design, manufacture and delivery of
our products, to ensure we consistently supply
the safe and high-quality products which our
customers and consumers expect.
In the event of a marketplace incident relating
to the safety of our consumers or the quality
of our products, incident management teams
are activated in the affected business units
and markets, supported by our product
quality, science and communications experts,
to ensure timely and effective action.
We have processes in place to ensure that
the data used to generate on-pack labelling
and the final labels themselves are compliant
with applicable regulations and with relevant
Unilever labelling policies in order to provide
the clarity and transparency needed for
consumers.
To reduce the impact of cyber-attacks on our
business, we are following a defence in-depth
strategy, guided by industry standards
frameworks. We have many Protect, Detect
and Respond capabilities in place which are
continuously being monitored and improved.
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.
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.
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Our Principal Risks
Level of risk
No change
No change
Risk
Risk description
Management of risk
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 and Board
(where relevant). 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 it involves use of
technology for better data management and
automation of business processes. 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.
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.
We regularly update our forecast of business
results and cash flows and, where necessary,
rebalance investment priorities.
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.
Business
transformation
Successful execution of business
transformation projects is key to
delivering their intended business
benefits and avoiding disruption to
other business activities.
Economic
and political
instability
We are in the second year of a significant
organisational transformation, operating
through five new Business Groups, with
some key changes still to be delivered. We
are also continually engaged in major
change projects, including acquisitions and
disposals. These changes drive continuous
improvement in our business and
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.
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.
In 2023, organisations have continued to see
geopolitical and economic volatility leading
to significant disruption and cost inflation
impacting parts of the business. Further
potential trade and economic sanctions risk
global supply chain disruption and deep
recession. Risks associated with the global
energy crisis are leading to significantly
higher energy prices and could disrupt our
operations.
Government actions such as trade and
economic sanctions, foreign exchange or
price controls can impact on the growth
and profitability of our local operations.
Unilever has more than half of its turnover
in emerging markets which can offer
greater growth opportunities but also
exposes Unilever to related economic and
political volatility.
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Our Principal Risks
Level of risk
No change
No change
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.
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
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 Partner Policy helps us
to 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
business partners. 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.
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Our Principal Risks
Level of risk
No change
Risk
Risk description
Management of risk
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 regulations relating to environmental
compliance (e.g. greenwashing), product
safety, product claims, trademarks, copyright,
patents, competition, health and safety, data
privacy, 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.
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.
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Our Principal Risks
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 64. In
addition, we describe in notes 15 to 18 on pages 203 to 218
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 includes consideration of
external factors such as rises in inflation and slowing GDP growth.
The assessment also included reviewing and understanding the
mitigation factors in respect of each principal risk. The risks and
mitigating factors are summarised on pages 71 to 78.
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 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; the lost cost
and growth opportunities from not keeping up with
technological changes and increase in physical climate
risks including its impact on operational costs; 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
brands caused by regulated ingredients
and the temporary closure of three of
our largest factories.
Significant reduction in sales for some of the
Business Groups along with percolating impact
on other brands and closure of three of our
largest factories for a period of six months.
■ Safe and high-quality products
■ Brand preference
■ Supply chain
Geopolitical tensions leading to a major
global incident affecting the availability
of key materials from a location and
increasing polarisation of issues leading
to loss of reputation.
Climate change-related flooding
driving closure of a key sourcing unit
and significant water shortages in
key markets.
Cyber-attack causing a sustained
shutdown of manufacturing systems and
the impact on profit if management failed
to deliver a major transformation project.
Closure of a key geographic market impacting
availability of raw materials and impact on
turnover arising from reputational loss due to
polarisation of issues.
■ Economic and political
instability
■ Supply chain
Closure of a sourcing unit for a period of six
months and significant water shortages causing
supply chain disruption in water-stressed sites
and changing consumer preference towards
water-efficient products.
Loss of turnover coupled with reduced margins
and ongoing reputational damage and loss of
confidence from our customers and consumers.
■ Climate change
■ Supply chain
■ Brand preference
■ Systems 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
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 two-to-three 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 €4.0 billion in any given calendar year
■ the Group has the equivalent of €7.3 billion in committed
credit facilities with a maturity of 364 days which are used
for backing up our commercial paper programmes.
■ Thirdly, for each of our 14 principal risks, one of which is
climate, worst-case plausible scenarios have been assessed
together with multi-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.
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Governance Report
82 Chair’s Governance Statement
84
Board of Directors
86 Unilever Leadership Executive (ULE)
88 Corporate Governance overview
102 Report of the Nominating and Corporate
Governance Committee
107 Report of the Audit Committee
112 Report of the Corporate Responsibility Committee
116 Directors’ Remuneration Report
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Chair's Governance statement
Ian Meakins
Chair
We have a continued
commitment to strong
corporate governance
I am pleased to present the Governance Report for 2023. In
doing so I must give further thanks to Nils Andersen, as Chair
of the Company until the end of November, for the legacy of
strong corporate governance at Unilever that he passes on to me.
The priority of the Board in relation to governance in the past
year has been establishing effective succession and providing
support to the Board changes. As I mentioned in my Chair's
statement, Hein Schumacher became CEO on 1 July 2023 and
I became Chair on 1 December 2023. We are also delighted
that Fernando Fernandez became CFO on 1 January 2024. I am
grateful for all the support that I have received and continue to
receive from the other Board members in my new role and the
Board gives its full support to Hein and Fernando.
Alongside succession, the Board has conducted a review
of strategy and approved the Growth Action Plan for the
business as already set out in this report. The Growth Action
Plan is designed to take Unilever on the next stage of its
growth journey. Alongside this our sustainability goals have
been clarified which are key to good stewardship and these
are set out in our updated Climate Transition Action Plan which
we are putting to shareholders at the 2024 AGM.
The culture of strong governance within Unilever is a
strength that I will strive to maintain. Looking externally
we have consulted with shareholders this year on executive
remuneration, including the revised Remuneration Policy,
and the revised Climate Transition Action Plan and this has
informed the changes that are being put to shareholders at
the 2024 AGM. In addition, our Code of Business Principles
establishes the foundation of our culture within the company,
strengthened by our historical roots, and informs our way
of working in everything that we do. We are committed to
diversity and inclusion as not only reflecting our values but
also what is best for the business.
My responsibility as Chair is to provide the leadership to ensure
that the Board works effectively with the executive team to
focus on the forward looking strategy of the Company and
achieving high standards of corporate governance. I believe
that the Board changes we have made together with the
Growth Action Plan for performance provide a strong basis
for success. Our refocused work on sustainability is designed
to support both our corporate governance and our Growth
Action Plan.
Ian Meakins
Chair
82
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FINANCIAL STATEMENTS
Chair's Governance statement
The Board of Unilever has implemented standards of corporate governance and disclosure policies
applicable to a UK incorporated company, with listings in London, Amsterdam and New York.
Application of the provisions of the 2018 UK Corporate Governance Code (the ‘Code’)
In respect of the year ended 31 December 2023, Unilever was subject to the Code (available from www.frc.org.uk). The Board is
pleased to confirm that Unilever applied the principles and complied with all the provisions of the Code throughout the year.
Further information on compliance with the Code can be found as follows:
Board leadership and Company purpose
Long-term value and sustainability
Culture
Shareholder engagement
Other stakeholder engagement
Conflicts of interest
Role of the Chair
Division of responsibilities
Non-Executive Directors
Independence
page
109
Audit, risk and internal control
Committee
36, 82, 90
Integrity of financial statements
97
91
95
89
89
95
Fair, balanced and understandable
Internal controls and risk management
External auditor
Principal and emerging risks
Remuneration
Policies and practices
Alignment with purpose, values and long-term
strategy
Independent judgement and discretion
page
108
108
109
109, 110
110
109
116-153
130, 131
116
Composition, succession and evaluation
Appointments and succession planning
103, 104
Skills, experience and knowledge
Length of service
Evaluation
Diversity
105
106
96
104
Unilever also complied with the Listing Standards
of the New York Stock Exchange applicable to
foreign private issuers.
Please see page 101 for further information.
Ian Meakins (third from the left)
Unilever Annual Report and Accounts 2023
83
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FINANCIAL STATEMENTS
Board of Directors
The Board has ultimate responsibility for the management, general affairs,
culture, direction, performance and long-term success of Unilever.
1
3
5
2
4
6
Key
NCGC is the Nominating and
Corporate Governance Committee
AC is the Audit Committee
CC is the Compensation Committee
CRC is the Corporate Responsibility
Committee
84
Unilever Annual Report and Accounts 2023
1 Ian Meakins
2 Hein Schumacher
Chair and Non-Executive Director
CEO
Nationality British Age 67
Nationality Dutch Age 52
Appointed 1 September 2023
Appointed Director 4 October 2022
Appointed Chair 1 December 2023
Appointed CEO 1 July 2023
Chair of NCGC and member of CC
Current external appointments
Compass Group PLC (Chair).
Previous experience
Rexel SA (Chair); Ferguson PLC
(CEO); Travelex Holdings Ltd
(CEO); Alliance Unichem (CEO).
Current external appointments
None.
Previous experience
Royal FrieslandCampina (CEO);
Global Dairy Platform (Chair);
Royal FrieslandCampina (CFO);
C&A AG (Board member); Heinz
China (CEO); Kraft Heinz Company
(senior management positions);
Ahold NV (Corporate Controller
Asia & Central America).
3 Fernando Fernandez
4 Nils Andersen
CFO
Non-Executive Director
Nationality Argentinian Age 57
Nationality Danish Age 65
Appointed Director 1 January 2024
Appointed April 2015
Appointed CFO 1 January 2024
Member of CC and NCGC
Current external appointments
Current external appointments
None.
Previous experience
President, Beauty & Wellbeing;
Latin America (EVP); Brazil (EVP);
Philippines (SVP); Global Hair Care
(SVP).
ASML Holdings N.V. (Chair); Salling
Foundation (NED); European Round
Table of Industrialists (member).
Previous experience
Unilever PLC (Chair); AkzoNobel
(Chair); Worldwide Flight Services
(Chair); 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).
5 Andrea Jung
Vice Chair/Senior Independent
Director
Nationality American/Canadian
Age 64
Appointed May 2018
Chair of CC and member of NCGC
Current external appointments
Apple Inc. (NED); Wayfair Inc. (NED);
Rockfeller Capital Management
(Director); Grameen America Inc.
(President and CEO).
Previous experience
Avon Products Inc. (CEO); General
Electric (Board member); Daimler
AG (Board member).
6 Dr Judith Hartmann
Non-Executive Director
Nationality Austrian Age 54
Appointed April 2015
Member of NCGC and CC
Current external appointments
Marsh McLennan (NED);
Sandbrook Capital (Operating
Partner).
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).
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Board of Directors
7 Adrian Hennah
8 Susan Kilsby
Non-Executive Director
Nationality British Age 66
Appointed November 2021
Chair AC
Current external appointments
J Sainsbury plc (NED); Oxford
Nanopore Technologies plc (NED).
Previous experience
Reckitt Benckiser Group plc
(Executive Director & CFO); RELX
plc (NED).
Non-Executive Director
Nationality American/British
Age 64
Appointed August 2019
Member of AC
Current external appointments
COFRA Holding AG (NED); Fortune
Brands Innovations (Chair); Diageo
plc (SID); UK Takeover Panel.
Previous experience
NHS England (NED); BBA Aviation
(SID); BHP plc (SID); 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).
9 Ruby Lu
10 Strive Masiyiwa
Non-Executive Director
Non-Executive Director
Nationality Chinese Age 53
Nationality Zimbabwean Age 63
Appointed November 2021
Appointed April 2016
Member of AC
Chair CRC
Current external appointments
Uxin Limited (NED); Yum China
Holdings Inc. (NED); Volvo Car AB
(Board Member).
Previous experience
iKang Healthcare Group (NED);
Blue City Holdings Limited (NED).
Current external appointments
Econet Global (Executive Chairman);
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
(Chairman); Rockefeller
Foundation (Trustee).
11 Professor Youngme Moon
Non-Executive Director
12 Nelson Peltz
Non-Executive Director
Nationality American, Age 59
Nationality American, Age 81
Appointed April 2016
Member of CRC
Appointed July 2022
Member of CC
Current external appointments
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).
Madison Square Garden Sports Corp.
(NED); Trian Fund Management, L.P.
(CEO & Founding Partner); The
Wendy's Company (Non-Executive
Chairman); Legg Mason, Inc. (NED).
Previous experience
Janus Henderson Group plc (NED);
Invesco Ltd. (NED); The Procter &
Gamble Company (NED); Sysco
Corporation (NED); Ingersoll Rand
plc (NED); H.J. Heinz Company
(NED); Triarc Companies, Inc. (CEO
& Chairman).
7
9
8
10
11
12
Changes to the Board effective
31 December 2023
Graeme Pitkethly left role as
Chief Financial Officer and
retired as a Director. He remains
with Unilever until 31 May 2024.
Changes to the Board effective
1 March 2024
Judith McKenna joined the Board
as a Non-Executive Director.
Unilever Annual Report and Accounts 2023
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Unilever Leadership Executive (ULE)
The ULE is responsible for execution of strategy and day-to-day management of Unilever. The ULE comprises:
2
5
3
6
1
4
7
3 Esi Eggleston Bracey
Chief Growth & Marketing Officer
4 Eduardo Campanella
President, Home Care
Nationality American Age 53
Nationality Brazilian Age 43
Joined ULE January 2024
Joined Unilever 2018
Joined ULE January 2024
Joined Unilever 2003
Current external appointments
Six Flags Entertainment
Corporation (NED);
Williams-Sonoma, Inc. (NED).
Previous experience
Unilever USA (President); Unilever
North America Personal Care
(CEO); Unilever North America
Beauty & Personal Care (EVP &
COO); Coty (President, Consumer
Beauty); P&G (SVP & General
Manager, Global Cosmetics).
6 Fabian Garcia
President, Personal Care
Current external appointments
None.
Previous experience
Chief Marketing Officer Home Care;
VP Home Care Latin America &
Brazil; VP Personal Care and Digital
Champion Mexico & Caribbean;
Personal Care Marketing Director
and Digital Champion Brazil;
Regional Marketing Director Ice
Cream; Marketing Manager Hair
Care, Regional Spreads Marketing
Manager.
Nationality American Age 64
Previous experience
Joined ULE January 2020
Joined Unilever 2020
Current external appointments
Council on Foreign Relations in the
US (member); Arrow Electronics
(Board member).
Unilever North America
(President); Revlon (President
and CEO); Colgate-Palmolive
(COO; President of the Asia/Pacific
Division, EVP Latin America);
P&G (President of Asia Pacific
Fragrance and Beauty Category,
General Manager of Taiwan,
General Manager of Max Factor,
Japan); Kimberly Clark
Corporation (NED).
86
Unilever Annual Report and Accounts 2023
1 Hein Schumacher
CEO
Nationality Dutch Age 52
Joined ULE July 2023
Joined Unilever October 2022
Current external appointments
None.
Additional biographical information
can be found on page 84.
2 Fernando Fernandez
CFO
Nationality Argentinian Age 57
Joined ULE January 2024
Joined Unilever 1988
Additional biographical information
can be found on page 84.
5 Reginaldo Ecclissato
Chief Business Operations
& Supply Chain Officer
Nationality Brazilian/Italian
Age 55
Joined ULE January 2022
Joined Unilever 1991
Current external appointments
IDH (Supervisory Board Member).
Previous experience
Mexico, Caribbean, and Central
America (EVP); North America and
Latin America (EVP Supply Chain);
Home Care for the Americas (VP
Supply Chain).
7 Rohit Jawa
President of Unilever, South Asia
and CEO & Managing Director,
Hindustan Unilever
Nationality Indian Age 57
Joined ULE April 2023
Joined Unilever 1988
Current external appointments
Breach Candy Hospital Trust
(Nominee Director).
Previous experience
Unilever (Chief of Transformation);
Unilever China (EVP North Asia
and Chair); Unilever Philippines
(Chair and CEO).
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Unilever Leadership Executive (ULE)
8 Priya Nair
9 Nitin Paranjpe
8
9
President, Beauty & Wellbeing
Nationality Indian Age 51
Joined ULE January 2024
Joined Unilever 1995
Chief People and Transformation
Officer, and Chair of Hindustan
Unilever
Nationality Indian Age 60
Joined ULE October 2013
Joined Unilever 1987
Current external appointments
Current external appointments
10
11
CEAT Tyres (Independent Director).
Previous experience
Unilever Beauty & Wellbeing
(Global CMO); Beauty & Personal
Care (EVP South Asia); Home Care
(Director & CCVP South Asia).
Heineken N.V. (Member of the
Supervisory Board); Infosys
(Independent Director).
Previous experience
Chief Operating Officer (COO),
Unilever; 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.
12
10 Richard Slater
Chief R&D Officer
11 Peter ter Kulve
President, Ice Cream
Nationality British Age 46
Nationality Dutch Age 59
Joined ULE April 2019
Joined Unilever 2019
Joined ULE May 2019
Joined Unilever 1988
12 Maria Varsellona
Chief Legal Officer & Group
Secretary
Nationality Italian Age 53
Joined ULE April 2022
Joined Unilever 2022
Current external appointments
Current external appointments
Current external appointments
Future Origins, Inc. (NED).
None.
Previous experience
Previous experience
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; Global Director R&D
Analgesics and New Brands);
Boots Healthcare (various roles).
President of Home Care; Unilever
South East Asia & Australasia
(President) and Chief Digital
Transformation & Growth Officer;
Corporate Transformation (EVP);
Unilever Benelux (Chair and EVP);
Unilever Ice Cream (Global Head
& EVP); various brand and channel
management roles.
Sandoz (NED).
Previous experience
ABB (Chief Legal Officer & Company
Secretary); Nokia Group (Chief Legal
Officer); Nokia Siemens (General
Counsel); Tetra Laval Group
(General Counsel); General Electric
Oil & Gas (variety of senior global
legal roles); Nordea Bank (NED).
ULE membership changes in 2024
Heiko Schipper joins Unilever as
President, Nutrition on 1 May.
Mairéad Nayager joins Unilever
as Chief People Officer on 1 June.
Nitin Paranjpe, Chief People and
Transformation Officer will leave
later in the year.
ULE membership changes
during 2023
Alan Jope, Chief Executive Officer,
left at the end of June. Conny
Brahms, Chief Digital &
Commercial Officer left in August.
Matt Close, President Ice Cream
left Unilever at the end of
December. Hanneke Faber,
President Nutrition, left Unilever at
the end of November. Sanjiv
Mehta left Unilever in June. As at
31 December 2023 there were 11
ULE members. The biographies on
pages 86 and 87 show active ULE
members from 1 January 2024.
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87
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FINANCIAL STATEMENTS
Corporate Governance overview
Corporate Governance overview
Unilever's structure
Unilever PLC (Unilever), incorporated in England and Wales in
1894, is the parent company of the Unilever Group. Unilever’s
shares are traded through its premium listing on the London
Stock Exchange and its listing on the Amsterdam Exchange
Index on Euronext. Unilever’s shares are also traded on the New
York Stock Exchange in the form of American Depositary Shares.
Unilever’s governance framework
To facilitate its oversight role, and to ensure that it retains
decision-making power over material matters, the Board has
put in place a governance framework to support the creation
of long-term value for stakeholders. The Board discharges
some of its responsibilities directly and others through
four principal Committees ( Nominating and Corporate
Governance Committee, Audit Committee, Compensation
Committee, and the Corporate Responsibility Committee)
which it has established to provide dedicated focus on
particular areas. The Reports of each of these Committees
can be found on pages 102, 107, 112 and 116. The Report
of the Audit Committee includes a description of the risk
management and internal control arrangements for the
Group. In addition, there are two management committees
of the Board, the Disclosure Committee and the Global Code
and Policy Committee. The Unilever Leadership Executive (ULE)
supports the CEO in his work and members of the ULE attend
Board meetings on relevant items by invitation.
Board
The Board's primary role is to ensure the long-term sustainable success
of Unilever for the mutual benefit of all our stakeholders.
Independent oversight and rigorous challenge
Audit
Committee (AC)
Corporate
Responsibility
Committee (CRC)
Responsible for
monitoring the integrity
of Unilever's financial
statements and for
ensuring the
effectiveness of the
internal audit function,
internal controls and risk
management processes,
and managing the
relationship with the
external auditor.
Oversees Unilever's
conduct as a responsible
and ethical global
business, reviews
sustainability-related
risks and reputational
matters and provides
guidance and
recommendations to the
Board on sustainability
and reputational
matters.
Nominating
and Corporate
Governance
Committee (NCGC)
Reviews the composition
of the Board and
Committees and makes
recommendations to the
Board on suitable
candidates for
appointment to the
Board and Committees.
Assists the Board on
Board and senior
management succession
planning including
appointments to the ULE,
conflicts of interest and
independence.
Compensation
Committee (CC)
Determines the
remuneration
framework/policy for
the Executive Directors
and ULE. Considers
alignment with
regulation, market
practice and principles
of good governance and
ensuring remuneration
is linked to corporate
and individual
performance. Also
reviews remuneration-
related workforce
policies and practices.
CEO & ULE
The CEO, supported by the ULE, is responsible for ensuring delivery of the Group's
strategy, business plans and financial performance.
Disclosure Committee
Responsible for overseeing the accuracy, materiality and timeliness of disclosure of financial
and other public announcements and evaluates and oversees the adequacy
of Unilever's disclosure controls and procedures.
Global Code and Policy Committee
Responsible for ensuring that all employees of Unilever and third parties working with or on behalf
of Unilever do so in compliance with the requirements of Unilever's Code of Business Principles.
88
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Corporate Governance overview
The Board has ultimate responsibility for the development
of strategy, material acquisitions and divestments, material
capital expenditure, the Company’s capital structure and
other financing matters, oversight of policies, procedures
and internal controls, setting and monitoring the Group’s
culture and promoting ethical behaviour.
A summary of the activities of the Board during the year is
provided on the following pages. In addition, the schedule of
matters reserved for the Board, a comprehensive summary
of how the Board operates and the terms of reference for the
four principal Committees and the Disclosure Committee are
available in the Governance of Unilever on the Company’s
website (www.unilever.com/board-and-management-
committees).
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 Non-Executive Directors provide
constructive challenge, strategic guidance, specialist advice
and hold management to account. 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.
Board and Committee meetings
There were six scheduled Board meetings in 2023. Two
scheduled Board meetings were held outside the UK in the
Netherlands and the US. Whilst the Board was in the US trade
visits were organised alongside the local management team.
The remainder of the meetings were held in the UK or virtually.
Board and Committee attendance
When there is a Board meeting, the Non-Executive Directors
usually also meet without the Executive Directors present.
The Chair, or in his absence the Senior Independent Director
(SID), chairs such meetings.
Attendance during the year at each of the Committee
meetings is also set out below. Further information is
provided in the relevant Committee reports.
Site visits
In addition to the formal Board meetings, several
Non-Executive Directors visited Unilever sites in the UK,
Brazil and Argentina in order to better understand the
businesses in these countries. These site visits allow the
Non-Executive Directors to observe the Group's operations
in action, they reinforce their knowledge and enable
them to experience first-hand the culture of the Group.
The site visits involve intensive itineraries. The Non-
Executive Directors receive presentations on a variety
of topics, including financial performance, strategy,
research and development, manufacturing, distribution
and marketing. The Non-Executive Directors meet with
local management teams, they visit markets and stores
where Unilever products are sold, and meet, where
possible, with external stakeholders. Local workforce
engagement sessions are also organised wherever
possible. Such sessions took place in the Netherlands
and the UK in 2023 and others were held virtually.
Position
Chair
Ian Meakins1
Non-Executive Directors
Nils Andersen2
Judith Hartmann
Adrian Hennah
Andrea Jung
Susan Kilsby
Ruby Lu
Strive Masiyiwa
Youngme Moon
Nelson Peltz
Executive Directors
Hein Schumacher3
Graeme Pitkethly
Former Directors
Alan Jope4
Feike Sijbesma5
Board
NCGC
AC
CRC
2/2
6/6
6/6
6/6
5/6
6/6
6/6
6/6
6/6
6/6
6/6
6/6
3/3
5/5
–
6/6
3/3
–
5/6
–
3/3
–
–
–
–
–
–
5/5
–
–
5/5
8/8
–
8/8
3/3
–
–
–
5/5
8/8
–
–
–
–
–
–
–
–
–
5/5
5/5
–
–
–
–
4/4
CC
–
6/6
2/2
–
6/6
–
4/4
–
–
6/6
–
–
–
–
1.
2.
3.
4.
5.
Joined the Board as a Non-Executive Director on 1 September 2023 and, on 1 December 2023, became Chair and was appointed to the NCGC and CC
Stepped down as Chair on 30 November 2023
Became an Executive Director on 1 June 2023
Stepped down as an Executive Director on 30 June 2023
Stepped down as a Non-Executive Director on 31 October 2023
Unilever Annual Report and Accounts 2023
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Corporate Governance overview
■ approved two share buy-back tranches in 2023 totalling
€1.5bn and comprising the remaining part of the share
buyback programme of up to €3bn in 2022 and 2023; and
■ considered and approved the issuance of new shares
to be used to settle the vesting of share awards granted
to employees under various employee share plans.
Governance and external reporting
■ considered feedback from the Audit Committee in relation to
significant judgements, fair, balanced and understandable
assessment, going concern basis of preparation, viability
statement and the reporting of non-financial KPIs in relation
to sustainability reporting;
■ approved each of the quarterly results and the Annual
Report and Accounts and Form 20-F;
■ approved the notice of meeting for the AGM;
■ following the 2023 AGM, where the resolution to receive
and adopt the Directors’ Remuneration report had not
been passed, oversaw consultation and communication
with shareholders on executive pay; and
■ considered the work of the Nominating and Corporate
Governance Committee on Board composition and
succession planning and approved the appointments
of Hein Schumacher as CEO, Ian Meakins as the Chair
of the Company and Fernando Fernandez as the CFO.
Culture and stakeholders
■ reviewed the 2023 workforce engagement programme
covering both employees and employee representatives
and considered feedback from the sessions; and
■ regularly reviewed investor feedback reports and analysts'
reports.
Society and sustainability
■ considered and approved the Modern Slavery Act Statement;
■ considered and supported preparation of the revised
Climate Transition Action Plan to be put to shareholders
at the 2024 AGM; and
■ reviewed the sustainability strategy and performance,
including review of the regulatory development of
sustainability reporting requirements and the Group's
sustainability KPIs.
Political and regulatory environment
■ received updates from external speakers on the macro
environment from social and political perspectives and
global security issues; and
■ received updates on emerging legislation and regulation.
Risk and internal controls
■ considered feedback from the Audit Committee on its
assessment of the ongoing effectiveness of the Group’s
internal controls; and
■ reviewed the findings from the assessment of the Group’s
register of principal risks and focus risks and approved the
related risk management plans.
Andrea Jung, Vice Chair and Senior Independent Director
Board focus
During the year, the Board considered a comprehensive
programme of regular matters drawn from the schedule
of matters reserved for the Board and the immediate and
prospective operating environment. The Board also conducted
a two day Strategy Review exercise in October 2023 including
presentations and engagement sessions with both ULE
members and other senior members of management. This
focused in particular on:
■ the Company’s proposed Growth Action Plan and the
constituent elements of this including business performance,
the prioritisation of our power brands, productivity and
simplicity, a more focused sustainability agenda and
performance culture;
■ a review of each of our Business Groups;
■ the portfolio and a review of acquisitions;
■ the Company’s approach to research and development; and
■ our supply chain.
The schedule below is not exhaustive and demonstrates
the breadth of oversight provided by the Board. Some of the
Board's key decisions in 2023 are discussed in more detail
on pages 93 and 94.
Strategy and business plan
■ Approved the Company’s Growth Action Plan to unlock
potential through faster growth, productivity and simplicity
including a new reward framework to dial up our
performance culture;
■ Approved the acquisitions of Yasso Holdings, Inc., a
premium frozen Greek yoghurt brand in the USA, the
premium haircare brand K18, and the disposals of Dollar
Shave Club and Elida Beauty;
■ reviewed the Unilever strategy at Business Group level; and
■ reviewed the R&D strategy including the Group's innovation
pipeline.
Operational performance and financial management
■ regularly reviewed Unilever Group operational and financial
performance and delivery against strategic objectives,
business plans including budget and forecast, financial
and non-financial KPIs and against analysts’ consensus
and market guidance;
■ considered and approved quarterly dividends;
90
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FINANCIAL STATEMENTS
Corporate Governance overview
Stakeholder engagement
Section 172: Company and Board engagement with stakeholders
The information set out below, together with the information on pages 93 and 94 of this Governance Report, explains how the
Board considers and engages with stakeholders. Together, these form our section 172 statement under the UK Companies Act
2006. Unilever at a glance on page 3 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 have provided examples of how we engage with, and create value for, our stakeholders.
How Unilever engages with stakeholders How the Board interacts
Unilever
stakeholders
Shareholders
We aim to deliver
consistent, competitive,
profitable and
responsible growth.
■ Quarterly results broadcasts
■ Conference presentations
■ Meetings and calls about aspects of business
performance, consumer trends and
sustainability issues.
■ Senior leaders and our Board speak directly
to shareholders on a broad range of issues.
For example, in 2023 we discussed our
directors’ remuneration policy, our proposed
updated Climate Transaction Plan and our
Growth Action Plan with investors.
Our People
■ Through our UniVoice survey we engaged
Our 128,000 talented
people give their skills
and time in Unilever
offices, factories and
R&D laboratories –
working in flexible
and agile ways.
with around 106,000 office and factory-based
employees in 2023 on topics such as culture,
engagement, strategy, safety, careers and
sustainability.
■ Continued our ‘Unilever Live’ sessions with our
CEO and ULE members to give our workforce
direct and regular access to our leadership
team to ask questions on issues of concern
to them as employees, such as financial
performance strategy and reward.
■ At a market level, we held regular local,
leader-led virtual townhall meetings to
engage with employees on locally relevant
topics and issues.
■ Under our Code of Business Principles
we maintain whistleblowing procedures
available to all employees wherever they
are and however they work including
anonymous helplines.
Further
information
See pages 93, 94
and 97
See pages 34 to
37, and pages 96
and 97
on stakeholder issues
■ AGM
■ Meetings with shareholders
on performance and key
issues
■ The Board approve all
quarterly results
announcements and
dividends
■ Unilever Investor Relations
provide analysts' reports
and investor feedback to
the Board.
■ Review of UniVoice survey
2023 results and feedback
to ULE on key issues
■ The CEO, together with
other senior members of
management including
the CFO and ULE members,
provide direct answers on
the 'Unilever Live' open
Questions sessions
■ Metrics on our Code of
Business Principles cases are
reviewed by the Corporate
Responsibility Committee
and the Board as
appropriate.
Consumers
We aim to provide
superior-quality
products and
purposeful brands that
take action on the
issues that matter to
people and planet.
■ We use consumer research from partners
such as Kantar, NielsenIQ and Ipsos, who
we engage through their regular surveys
and panels as well as ad hoc research.
■ We engage over three million consumers
through our various consumer engagement
platforms annually.
■ Board papers and
See pages 14 to 33
presentations capturing
consumer trends
■ Regular updates from
Business Groups on
opportunities and portfolio
choices in line with
consumer trends.
Unilever Annual Report and Accounts 2023
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CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Corporate Governance overview
Unilever
stakeholders
Customers
We partner with large
and small retailers
across different trading
environments around
the world to grow
categories through
market making
innovations and
brilliant execution to
build our business
and theirs.
How Unilever engages with stakeholders How the Board interacts
on stakeholder issues
■ We are members of the Advantage Group
Survey to help us understand how we can
improve our customers’ experience.
■ Our customers across different channels and
■ Business Group feedback
to the Board on customer
landscape and priorities
■ Direct engagement with
Further
information
See pages 14 to 33
trading environments partner with our
customer business development teams to
grow categories by meeting regularly on
turning shopper insights into growth action
plans. These relationships create Joint
Business Plans for mutual benefit.
■ We use an online platform to provide shopper
insights and research for our smaller retailer
customers.
key customers during region
and market visits by Board
members
Suppliers & Business
Partners
Around 57,000 supplier
partners in 150 countries
source materials and
provide critical services
for us.
■ Through our Supply Chain and Procurement
teams, we communicate with our suppliers
and 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.
■ We operate a Responsible Suppliers Policy
to define the mandatory requirements that all
our supply chain partners must confirm they
can meet.
■ The Board receives regular
reports in relation to supply
chain matters.
See pages 29, 39
to 42, 44 and 45
Planet & Society
■ As part of our sustainability materiality
■ Our Chief Sustainability
See pages 38 to 55
We aim to improve the
health of the planet
while contributing to a
fairer and more socially
inclusive world.
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 continued our partnerships with other
businesses throughout the year, advocating
for policy change on a range of sustainability
topics, including increased levels of national
climate ambition and access to finance for
the vulnerable communities most affected
by the impacts of climate change.
■ We produce an annual statement in relation
to modern slavery.
Officer provides reports to
the Board
■ The Board reviews updates
to the Climate Transition
Action Plan and progress
with respect to it
■ Our senior business leaders
attended COP28 in
November/December 2023
■ The Board reviews and
approves the annual
modern slavery statement.
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STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Corporate Governance overview
Key decisions by the Board including Section 172 considerations
The table below shows some of the key decisions of the Board in 2023. The Directors confirm that the deliberations of the Board
incorporated appropriate consideration of the matters detailed in Section 172 of the Companies Act 2006. The Board recognises
that having regard to the needs and expectations of stakeholders is crucial, as it ensures that Unilever is well positioned to
deliver long-term sustainable growth for the benefit of all its stakeholders.
Strategy and business plan
Background
A Strategic Review of Unilever’s business was carried out by the Board led by the CEO and announced to the markets on 26th
October 2023. The Strategic Review concluded that the business would implement an action plan for faster growth, greater
productivity and simplicity with a stronger performance culture. The Board also reviewed M&A activity and confirmed that the
approach of bolt-on acquisitions and strategic disposals of lesser performing businesses would continue.
Stakeholder considerations
The Strategic Review took into account the interests of shareholders in its aims to create value for shareholders. It also took in to
account customers, consumers and employees in unlocking the potential for the business and in the continued development of
a business model for long-term sustainable growth.
Faster growth will involve greater focus on Unilever’s top 30 Power Brands to drive brand superiority and increase brand investment
and returns. The move to greater productivity and simplicity will assist in the delivery of gross margin and a more focused
sustainability agenda. A stronger performance culture will involve clearer priorities and accountability and alongside this more
differentiated reward.
Together these measures are intended to deliver greater returns for shareholders both in the short to medium term and also assist in
building long-term sustainable brand positions through the investment in our brands.
Society and sustainability
Background
Unilever has a long standing commitment to being at the forefront of global leadership in sustainable business and this is at
the heart of what Unilever stands for. The Strategic Review by the Board looked at Unilever’s societal and climate approach as
an integral part of our way of doing business. Our Climate Transition Action Plan, first publicised and approved by shareholders
in 2021, has been updated and is being put again to shareholders at the 2024 AGM. The Strategic Review and the revised
Climate Transition Action Plan have been reviewed by and have the full support of the Board and the Unilever Leadership
Executive.
Stakeholder considerations
Climate change and environmental sustainability impact the lives and livelihoods of people all around the world and, as
such, impact on all of the stakeholders of the Company from suppliers to customers and consumers. As stakeholders our
employees wish to work in a company which values the environment and our shareholders benefit from best business practice
in the area of sustainability. As a result of the Strategic Review, the Company will focus its sustainability efforts on areas of
critical importance with the aim of achieving greater impact in a shorter time, the pillars of this focus being Climate, Nature,
Plastics and Livelihoods. All of our brands will participate in this with each brand focusing its efforts on what is most
meaningful for its brand purpose. Our approach to society and sustainability will therefore continue to assist, for example,
our suppliers in the development of sustainable agriculture and our customers and consumers will continue to benefit from
products that aim for the highest standards in sustainability. Ultimately we believe this will be good for our business with
shareholders benefiting as a result.
Unilever Annual Report and Accounts 2023
93
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FINANCIAL STATEMENTS
Corporate Governance overview
Appointments of new Non-Executive Director and Chair and new Chief Financial Officer
Background
The Board approved the appointment of Ian Meakins as a Non-Executive Director with effect from 1 September 2023 and Chair
of the Company with effect from 1 December 2023. The Board also approved the appointment of Fernando Fernandez as an
Executive Director and Chief Financial Officer of the Company with effect from 1 January 2024.
Stakeholder considerations
The Board considered Ian Meakins' significant global business experience leading companies as Chair and CEO across a
diverse range of industries. The Board concluded that Unilever would benefit from this experience and that Ian would bring
strong and effective leadership. The Board looked at Fernando Fernandez’s impressive track record in his Unilever career with
his deep financial and business experience. The strategic acumen and leadership qualities that Fernando would bring to the
role of CFO would be key in delivering the action plan that the Board had approved. Overall the Board concluded that both of
these appointments would be beneficial to Unilever, its shareholders and wider stakeholders.
Executive Pay
Background
At the 2023 AGM, the resolution to approve the advisory vote on the Directors’ Remuneration Report received 42% of the vote
and was not passed. In accordance with the UK Corporate Governance Code 2018, the Company included in its AGM results
announcement a commitment to listen to shareholder feedback and to publish a further statement detailing the outcome
of such shareholder engagement and any actions taken as a result. The Company proceeded to conduct a wide ranging
consultation with shareholders to understand the reasons behind this vote and the views of shareholders on executive
remuneration. In addition further consultation with shareholders took place in relation to the proposed Directors'
Remuneration Policy.
Stakeholder considerations
Following the shareholder consultation it was decided that the fixed pay of the CEO would not be increased in 2024 and
2025 and this was announced on 30 October 2023. This is also included in the Directors' Remuneration Policy to be put to
shareholders at the 2024 AGM. The additional consultation with shareholders was also used in preparing the Directors'
Remuneration Policy.
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STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Corporate Governance overview
Board leadership &
shareholder engagement
Non-Executive Directors’ role and time commitment
The Non-Executive Directors exercise objective judgement in
respect of Board decisions, providing scrutiny and challenge so
as to hold management to account. Non-Executive Directors
offer strategic guidance and specialist advice based on the
breadth of experience and knowledge they bring to the Board.
On appointment, our Non-Executive Directors complete
an induction process including meetings with the Unilever
Leadership Executive and senior members of management.
These include understanding key risk areas in the business and
providing an understanding of the culture of the organisation.
There is also the opportunity to visit Unilever’s operations in
person. Non-Executive Directors are required to have sufficient
time available to discharge their responsibilities effectively
and to continuously develop their knowledge of the business.
The role of the Non-Executive Directors incorporates the review
of information in advance of Board meetings to ensure that
thorough preparation for, and debate at, Board meetings is
possible. Non-Executive Directors have full access to senior
management and take opportunities to meet them on a
regular basis. Site visits also give Non-Executive Directors the
ability to meet members of the workforce from different levels
of the organisation.
All Directors are expected to attend each Board meeting
and each Committee meeting of which they are members,
unless there are exceptional reasons preventing them from
participating. Only members of the Committees are entitled
to attend Committee meetings, but others may attend at
the Committee Chair’s discretion. Executive Directors attend
Committee meetings by invitation only.
If Directors are unable to attend a Board or Committee
meeting, they have the opportunity beforehand to discuss
any agenda items with the Chair or the Committee Chair.
Board appointment
The report of the Nominating and Corporate Governance
Committee on pages 102 to 106 describes the work of
the Committee including in relation to Board appointments
and recommendations for re-election. The procedure for the
nomination and appointment of Directors is also 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 election at the next AGM).
Composition, balance and independence
of the Board
As at 31 December 2023, the Unilever Board comprised
12 Directors: the Chair, two Executive Directors and nine
independent Non-Executive Directors.
The balance of Directors on the Board ensures that no
individual or small group of Directors can dominate the
decision-making process. The biographies on pages 84 to 85
and the table on page 105 in the Nominating and Corporate
Governance Committee Report demonstrate a diverse Board
with a broad range of sector experience, skills and knowledge.
The Board carries out an annual review of the performance
of the Directors in addition to a thorough review of the Non-
Executive Directors’ and their related or connected persons’
relevant relationships in line with the best practice guidelines
in the UK and US. The criteria chosen by the Board to assess the
independence of the Non-Executive Directors, which is set out
in detail in the Governance of Unilever, includes in summary:
■ no additional remuneration or other benefits from any
Group company;
■ no material business relationships within the last three
years, including shareholder, customer, adviser and supplier
relationships, with any Group company;
■ no cross-directorships or significant links with other Directors
through involvement in other companies or bodies;
■ not more than nine years of service on the Board in normal
circumstances;
■ not a former employee of any Group company within the last
five years;
■ no close family ties with any of Unilever’s advisers, Directors
or senior management; and
■ no significant shareholdings in Unilever or any Group
company.
All the Non-Executive Directors are considered to have the
appropriate skills, knowledge, experience and character to
bring objective and constructive judgement and valuable
insights to the Board’s deliberations. The Board has concluded
that all the Non-Executive Directors were independent during
the period covered by this report.
The Chair was considered to be independent on appointment
and is committed to ensuring that the Board continues to
comprise a majority of independent Non-Executive Directors.
Adrian Hennah, Chair of Audit Committee (centre)
Ruby Lu, member of the Audit Committee (left)
Conflicts of interest
Directors have a statutory duty to avoid actual or potential
conflicts of interest. The Board ensures that there are effective
procedures in place to avoid conflicts of interest by Directors.
A Director must without delay report any conflict of interest
or potential conflict of interest to the Chair and to the other
Directors and the Group Secretary, or, in case any conflict of
interest or potential conflict of interest of the Chair, to the SID,
the other Directors and the Group Secretary. 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.
Unilever Annual Report and Accounts 2023
95
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Corporate Governance overview
Unless authorised by the Board, together with compliance with any
restrictions that have been required of such a Director, 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.
The Board consider the procedures that have been put in place to
deal with conflicts of interest operate effectively.
The interests of new Directors are reviewed during the recruitment
process and authorised (if appropriate) by the Board at the time
of their appointment. Directors have a continuing duty to update
the Board on any changes to their external appointments which
are also reviewed by the Board on a regular basis.
Unilever recognises that the Executive Directors acting as
directors of other companies is beneficial from a personal
development perspective and therefore also beneficial to
the Group. The number of external directorships of listed
companies is generally limited to one per Executive Director
to reduce the risk of excessive commitment and prior approval
is required from the Chair.
Hein Schumacher, CEO
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 to achieve objectives.
In 2023 a self-evaluation of the Board’s effectiveness was
conducted.
The evaluation consisted of a questionnaire completed by
each of the Directors followed by a Board discussion in
November 2023, covering both the outcome of the evaluation
and the proposed actions to enhance the effectiveness of the
Board. The outcome of such discussions is taken into account
in the assessment of Directors when proposals for the re-
election of Directors is considered.
The evaluation looked at key areas of the functioning and
operation of the Board. The directors considered the level
of information provided to the Board and the timing and
frequency of meetings. In particular the financial controls and
risk assessments carried out by the Board and its Committees
were reviewed. As succession planning had been a key part of
the Board’s business in 2023, with the appointment of a new
Chair, Chief Executive Officer and Chief Financial Officer, the
Board succession procedures were also reviewed. The overall
composition of the Board was also considered together with
the relevant expertise of Board members in relation to the
strategic and other material issues facing the Company.
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Unilever Annual Report and Accounts 2023
It was concluded that the Board operated effectively and that
the Board processes on the provision of information worked
well. The Board’s knowledge and assessment of financial
controls and key risks was strong and the processes for
succession planning and the execution of those plans had
been effective in 2023. With the ongoing development of the
business from a strategic and simplicity perspective and the
continued external challenges from digital commerce and
geopolitical events in key markets, there was the opportunity
to develop Board composition further. An initial step on this
was the enhancement of the skills and experience matrix for
directors which is included in the report of the Nominating and
Corporate Governance Committee on page 105. The Board
would also like to focus more on the key performance
indicators used in the business to support the new
performance culture that has been introduced.
The evaluation of the Board’s principal Committees was
performed under the supervision of the respective Chairs and
the Chief Legal Officer & Group Secretary, taking into account
the views of respective Committee members and the Board
members. The key actions arising from these Committee
evaluations can be found in each of the Committee Reports.
Board induction and training
All new Directors participate in a comprehensive induction
programme when they join the Board. The induction
programme typically includes site visits, meetings with
the Group’s businesses, with other Board Directors, senior
executives and managers, advisers and the Group's internal
and external auditors. This is supplemented with a wide range
of information including historical Board and Committee
papers, internal and external reports and presentations
covering the key commercial, operational, financial and
functional areas of the Group and relevant policies and
governance procedures.
The Chair ensures that ongoing training is provided for
Directors by way of presentations and circulated updates
at and between Board and Committee meetings. The
training covers, among other things, Unilever’s business,
environmental, social, corporate governance, regulatory
developments and investor relations matters. For example,
in 2023 the Directors received presentations on corporate
governance reforms and Unilever's Code of Business Principles.
In addition, outside of the scheduled Board meetings, several
Directors visited Unilever businesses and met with local
management in the UK, Brazil and Argentina.
Workforce engagement
The Board believes that taking into account feedback from
the workforce widens the diversity of its views when making
business decisions. In view of Unilever’s global footprint and
scope of operations, the Board decided that the most effective
way of organising its engagement with employees is to share
the responsibility among all Non-Executive Directors.
Unilever’s Workforce Engagement Policy provides for workforce
engagement in a variety of ways both face-to-face and
virtually through sessions with Non-Executive Directors,
engaging with employee representatives, site visits, and
employee surveys such as UniVoice (see below for further
information). These engagement activities cover the entire
workforce demographic in terms of geography, all Business
Groups, length of service, work level/seniority and supply chain
and office staff.
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Corporate Governance overview
In 2023, Non-Executive Directors participated in eight
workforce engagement events, both virtually and in person,
in the UK as well as in the Netherlands. A wide range of topics
were discussed including those that are personal to the
workforce and those of a more business and strategic nature.
Topics included: future fit skills; safety; equality, diversity and
inclusion; sustainability; and research and development.
Perspectives from the workforce have been taken into
consideration in decision making. For example, employee
survey results from 2023 indicated some ambiguity in
experience of our operational model. Management intends to
further clarify decision rights and cost ownership to address
some of these concerns and speed up decision-making.
Further action has been taken in response to feedback
collected in workforce engagement sessions. For example
in Nutrition, cross-functional working groups have been
established to co-create the 2024 innovation strategy in
response to feedback from the workforce to speed up ways
of working and increase collaboration between teams.
The Board evaluates the effectiveness of workforce
engagement on an annual basis and feedback is also
sought from employees who take part in the workforce
engagement sessions, thereby creating a feedback loop
between the Board and employees.
Shareholder engagement
The Board values open and meaningful discussions with our
shareholders on all matters.
The CFO has lead responsibility for shareholder engagement,
with the active involvement of the CEO and supported by the
Investor Relations department.
In 2023 the new Chair had introductory meetings with
key shareholders comprising over 25% of the issued share
capital of the Company. Following the announcement of the
Company’s Growth Action Plan in October 2023, the CEO held a
series of roadshows with investors in the Netherlands, the UK
and the US. In addition the SID had meetings with a wide
number of investors in relation to the remuneration of the
executive directors and the CFO held a roadshow
with investors following the first half-year results.
The Board receives regular briefings on investor reactions to
Unilever’s quarterly, half- and full-year results
announcements, on key issues such as the Climate Transition
Action Plan 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. The Chair, the SID, the Executive Directors and other
Directors are also available to answer questions from the
shareholders at the AGM each year.
General meetings
At the AGM, the Chair and CEO give their thoughts on
governance aspects of the preceding year, the Group’s
strategy together with a review of the performance of the
Group over the last year. Shareholders are encouraged to
attend the meeting and to ask questions at or in advance of
the meeting. The external auditors attend the AGM and are
entitled to address the meeting on any part of the business
of the meeting which concerns them as auditors.
Unilever’s AGM in 2023 was a physical meeting and the
proceedings were also streamed via a live webcast for
shareholders. The Chair, CEO, CFO, SID, Committee Chairs,
Susan Kilsby and Hein Schumacher were present and following
the statements from the Chair and CEO, questions submitted
by shareholders prior to the meeting and received during the
meeting were addressed.
All 23 resolutions were put to a poll at the 2023 AGM to
ensure an exact and definitive result and to facilitate
maximum participation by Unilever’s geographically spread
shareholders. Of these 22 resolutions were passed with in
excess of 80% votes cast in favour. Resolution 2 was not
passed as noted on page 94. The Company consulted
with shareholders on this and issued a statement on this on
30 October 2023. This confirmed that CEO fixed pay would not
be increased in 2024 or 2025. In addition the Remuneration
Policy will be put to shareholders at the AGM in 2024.
The 2024 AGM will be held on 1 May 2024 at Hilton, London
Bankside, 2-8 Great Suffolk Street, London, SE1 0UG. The
Notice of AGM and other documentation are enclosed with
this Annual Report and Accounts and are available on
the Company’s website at www.unilever.com for those
shareholders who have opted for electronic communication.
Strive Masiyiwa, Chair of the Corporate Responsibility Committee
and Professor Youngme Moon, member of the Corporate
Responsibility Committee
Unilever Annual Report and Accounts 2023
97
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Corporate Governance overview
Additional disclosures
The following disclosures are made in compliance with the Financial Conduct Authority’s Listing Rule 9.8.4C R:
Listing Rule 9.8.4C R
Interest capitalised by the Group during the year
Publication of unaudited financial information
None
Not applicable
Details of any long-term incentive schemes
See pages 116, 117, 130 to 132 and 135 to 144
Director waiver of emoluments
Director waiver of future emoluments:
Not applicable
Not applicable
Allotments for cash of equity securities made during the year
None
Allotment for cash of equity securities made by a major unlisted
subsidiary during the year
Details of participation of parent undertaking in any placing made
during the year
Details of relevant material contracts in which a Director or controlling
shareholder was interested during the year
Contracts for the provision of services by a controlling shareholder
during the year
Details of any arrangement under which a shareholder has waived or
agreed to waive any dividends
Not applicable
Not applicable
Not applicable
Not applicable
Unilever PLC holds 16,181,572 ordinary shares of 31/9p each as Treasury
shares. No dividends are payable on these shares. As at 1 March 2024
Fidelity held 507,462 ordinary shares of 31/9p of Unilever PLC on behalf of
the Company to be used in satisfaction of employee share scheme
obligations. Fidelity has agreed to waive on an ongoing basis any
dividends payable in respect of such shares. As at 1 March 2024 the
Trustee of the Company's Employee Benefit Trust ('EBT') held 2,348,355
ordinary shares of 31/9p of Unilever PLC. The Trustee of the Company’s
EBT has agreed to waive, on an ongoing basis,any dividends payable on
shares it holds in trust for use under the Company’s employee share
schemes. The practice of Fidelity and the Trustees of the EBT is to abstain
from voting on the shares that they hold. Details of the employee share
schemes can be found on pages 116, 117, 130 to 132 and 135 to 144.
Details of where a shareholder has agreed to waive future dividends
See below
Statements relating to controlling shareholders and ensuring company
independence
Not applicable
Results and dividends
Unilever PLC publishes financial information on a quarterly
basis and these reports can be found at www.unilever.com.
Details of the quarterly dividends for the financial year ended
31 December 2023 are provided on page 194.
Future developments
Information on likely future developments in our business and
an indication of our research and development activities is set
out in the Strategic Report on pages 6 to 55.
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 Articles may only be amended by a special
resolution of the shareholders. The Articles can be found on
the Company's website at www.unilever.com.
Disclosure of information to the external auditor
Each of the Directors who held office at the date of approval
of this report confirm that, 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 the Company’s consolidated and parent company
accounts has been provided, and each of the Directors has taken
all reasonable steps to ensure their awareness of any relevant
audit information and to establish that the Company’s auditors
are aware of any such information. This confirmation is given
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Unilever Annual Report and Accounts 2023
and should be interpreted in accordance with the provisions of
Section 418 of the Companies Act 2006.
Directors
The Company’s Directors who served during the financial year
ending 31 December 2023 are provided on pages 84 and 85.
Details of director changes in the year are provided in the
report of the Nominating and Corporate Governance
Committee on pages 102 to 104.
Appointment of Directors
The rules governing the appointment and retirement of
Directors are set out in the appointment procedure for PLC
Directors available on the Company’s website and are
summarised in the report of the Nominating and Corporate
Governance Committee.
All Directors must submit themselves for election or re-election
as the case may be each year at the AGM. At the 2024 AGM,
seven Directors will offer themselves for election or re-election.
Details of the Directors standing for election or re-election are
set out in the 2024 Notice of AGM. Information on the service
agreements of Executive Directors can be found in the
Directors’ Remuneration Report on pages 116 to 118 and 129
to 153. The letters of appointment of the Non-Executive
Directors are available for inspection at the Company’s
registered office.
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Corporate Governance overview
Directors’ share interests
Details of the Directors’ interests in shares can be found in
the Directors’ Remuneration Report on pages 132, 138 to 143
and 148.
Contracts of significance
During the year, no Director had any interest in any shares or
debentures in the Company’s subsidiaries, or any material
interest in any contract with the Company or a subsidiary being a
contract of significance in relation to the Company’s business. No
member of the Group is party to any significant agreement that
takes effect, alters or terminates upon a change of control or
following a takeover of Unilever PLC. In addition, there are no
agreements providing for compensation for loss of office or
employment as the result of a takeover of Unilever PLC.
There are no controlling shareholders of Unilever PLC.
Powers of the Directors
The Board of Directors is responsible for the management of
the business of the Company and may exercise all powers of
the Company subject to applicable legislation and regulation
and the Company’s Articles.
The Board has delegated certain of its powers, authorities
and discretions to the CEO, CFO and to the Board Committees.
Detailed information on the responsibilities and authorities
of each of these is available in the Governance of Unilever
on the Company's website. In addition, information on the
Board's and the Committee's responsibilities and activities in
the year to 31 December 2023 are available on pages 90, 103,
108 and 113.
Directors’ indemnities and Directors’ and
Officers' insurance
The power to indemnify Directors, together with former
Directors, the Company Secretary and the directors of
subsidiary companies, is provided for in the Company's
Articles of Association.
Unilever maintains appropriate D&O insurance to the extent
permitted by law. In addition, Unilever has granted indemnities
to each Director and the Group Secretary, together with former
Directors and Company Secretaries of Unilever and the
directors of subsidiary companies, whereby the Company
indemnifies these individuals in respect of any proceedings
brought by third parties against them personally in their
capacity as Directors or Officers of the Company or any Group
company. These ''qualifying third party indemnity provisions''
were in force during the course of the financial year ended 31
December 2023 and remained in force at the date of this
report. The Company would also fund ongoing costs in
defending a legal action as they are incurred rather than after
judgement has been given. In the event of an unsuccessful
defence in an action against them, individual Directors would
be liable to repay the Company for any damages and to repay
defence costs to the extent funded by the Company. Neither
the indemnity, nor the D&O insurance cover provides cover
in the event a Director or Officer is proved to have acted
fraudulently or dishonestly.
In addition, the Company 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.
As above, these indemnities were in force during the course
of the financial year ended 31 December 2023 and remained
in place at the date of this report.
Political donations
At the 2023 AGM, shareholders passed a resolution to
authorise the Company and its subsidiaries to make political
donations to political parties or independent election
candidates, to other political organisations, or to incur
political expenditure (in each case as defined in the
Companies Act 2006). As the authority granted at the 2023
AGM will expire, renewal of this authority will be sought at
this year’s AGM. Further details are available in the Notice of
AGM, available on the Company’s website.
It is the policy of the Company not to make such political
donations or to incur political expenditure (within the ordinary
meaning of those words) and the Directors have no intention
of changing that policy. However, as the definitions used in
the Companies Act 2006 are broad, it is possible that normal
business activities, which might not be thought to be political
donations or expenditure in the usual sense, could be caught.
On that basis, the authority is sought purely as a precaution.
The Board members have each confirmed compliance with
Unilever's Code of Business Principles, as is required on an
annual basis, and that there has been no political activity
or payments by the Unilever Group.
Shares
Share capital
Unilever’s issued share capital on 31 December 2023 was
made up of £78,294,139 split into 2,516,597,338 ordinary
shares of 31/9p each and each carrying one vote. A total of
16,181,572 Unilever ordinary shares were held in treasury as
at 31 December 2023 representing 0.64% of Unilever’s issued
share capital. A total of 49,770,289 ordinary Unilever PLC
shares held in Treasury from share buy-backs were cancelled
on 2 August 2023.
Share issues and purchase of shares
At the 2023 AGM held on 3 May 2023, Unilever’s Directors were
authorised to:
■ issue new shares, up to a maximum of £26,226,666 nominal
value (which at the time represented approximately 33% of
Unilever’s issued ordinary share capital);
■ disapply pre-emption rights up to a maximum of £3,935,735
nominal value (which at the time represented approximately
5% of Unilever’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 253,000,000 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.
In 2022, Unilever commenced a €3bn share buyback
programme over two years. The purpose of the share buyback
programme was to reduce the capital of Unilever and in 2022
Unilever bought back 34,217,605 Unilever ordinary shares of
31/9p each in two tranches, the total consideration for which
was €1.5bn. Further in 2023, Unilever bought back 31,734,256
Unilever ordinary shares of 31/9p each in two tranches, the
total consideration for which was €1.5bn to complete such
share buyback programme. The shares repurchased in 2023
comprised 1.26% of Unilever's issued share capital as at
31 December 2023. Outside of this share buyback programme,
no other company within the Group purchased any Unilever
ordinary shares or American Depositary Shares during 2023.
During 2023 there were 100,000 Unilever ordinary shares
of 31/9p each issued in satisfaction of employee share
scheme awards.
Unilever Annual Report and Accounts 2023
99
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Corporate Governance overview
Right to hold and transfer ordinary shares
Unilever’s constitutional documents place no limitations on the
right to hold or transfer Unilever ordinary shares. There are no
limitations on the right to hold or exercise voting rights on the
ordinary shares of Unilever imposed by English law. Unilever is
not aware of any agreements between holders of securities
which may result in restrictions on transfer or voting rights.
Right to receive dividends
The employee benefit trust, established by the Company to
facilitate the settlement of various share plan awards, waives
its entitlement to receive dividends in respect of shares that
are the beneficial property of the trust.
Listings
Unilever has ordinary shares listed on the London Stock
Exchange (ULVR), on Euronext Amsterdam (UNA) and, as
American Depositary Receipts1 (UL), on the New York
Stock Exchange.
1. One American Depositary Receipt represents one PLC ordinary share with
a nominal value of 31/9p.
Significant shareholders of Unilever
As far as Unilever is aware, the only holders of more than 3%
of, or 3% of voting rights attributable to, Unilever’s ordinary
share capital (‘Disclosable Interests’) on 31 December 2023,
were BlackRock, Inc. with a shareholding of 9.1% and Vanguard
Holding with a shareholding of 4.9%.
No Disclosable Interests have been notified to Unilever
between 1 January 2024 and 22 February 2024 (being a date
not more than one month prior to the date of the Company's
Notice of Annual General Meeting). As far as Unilever is aware,
between 1 January 2021 and 22 February 2024, only BlackRock,
Inc. and Vanguard Holding have held more than 3% of, or 3%
of voting rights attributable to, Unilever’s ordinary shares.
Susan Kilsby, member of the Audit Committee
Accounting policies, financial instruments
and risk
Details of the Group’s accounting policies, together with post
balance sheet events and details of financial instruments and
risk, are provided in Notes 1, 16, 18 and 26 to the Financial
Statements.
100
Unilever Annual Report and Accounts 2023
Branch offices
Details of the Unilever Group's branches are listed on page
244.
Employment of disabled people
Disability inclusion is deeply important to Unilever. It is critical
that our brands live up to our values by understanding the lives,
experiences and stereotypes facing persons with disabilities and
reflecting their stories in our brand communications. In addition,
Unilever has a range of employment policies which clearly detail
the standards, processes, expectations and responsibilities of
its people and the organisation. These policies are designed
to ensure that everyone – including those with existing or new
disabilities and people of all backgrounds – is dealt with in
an inclusive and fair way from the recruiting process and
ongoing through their career at Unilever. This includes access
to appropriate training, development opportunities or job
progression. Further details can be found on page 37.
Employee share plans
The Company operates a number of employee share plans,
details of which are set out in note 4C and in the Directors’
Remuneration Report on pages 116, 117, 130 to 132 and 135
to 144.
Stakeholder engagement
The Group’s stakeholders are our shareholders, our workforce,
consumers, customers, our suppliers and business partners,
and the planet and society as a whole. The Board is aware that
its actions and decisions impact our stakeholders. Effective
engagement with stakeholders is important to the Board as it
strengthens the business and helps to deliver a positive result
for all our stakeholders. In order to comply with Section 172
of the Companies Act, the Board is required to take into
consideration the interests of stakeholders and it must also
include a statement setting out the way in which Directors
have discharged this duty during the year. The Group’s
stakeholders are identified on pages 91 and 92 and
information on how the Directors have had regard to the
matters set out in Section 172 can be found on pages 93 and
94. Further information on workforce engagement can also
be found on pages 96 and 97.
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 2023 up
to 22 February 2024 (the latest practicable date for inclusion in
this report).
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.
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Corporate Governance overview
United Kingdom
In 2023, Unilever 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: pages 82, 89, 93 to 95 and 97; (ii) Division
of Responsibilities: pages 89 and 95; (iii) Composition,
Succession and Evaluation: pages 95 to 97 and 103 to 104;
(iv) Audit, Risk and Internal Controls: pages 107 to 111; and
(v) Remuneration: pages 116 to 153. The UK Corporate
Governance Code is available on the Financial Reporting
Council’s (FRC) website.
but substantially conform to those required of US domestic
companies listed on the NYSE. The only significant way in which
our corporate governance practices differ from those required
of US 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.
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 Group’s governance
procedures as soon as is practicable.
Greenhouse Gas (GHG) Emissions:
Information on GHG emissions can be found on page 47.
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 96 and 97.
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.
United States
Unilever is listed on the New York Stock Exchange (NYSE).
As such, Unilever 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 comply with the Listing Standards of the NYSE applicable
to foreign private issuers.
We are required to disclose any significant ways in which our
corporate governance practices differ from those required of
US domestic 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
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 107 to 111. 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 2023 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 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
2023 were effective. Unilever is required by Section 404 of the
US Sarbanes-Oxley Act of 2002 to report on the effectiveness of
its internal control over financial reporting. This requirement is
reported on within the section entitled ‘Management’s Report
on Internal Control over Financial Reporting’ on page 254.
Ian Meakins, Chair (third from the left)
The Directors' Report has been approved by The Board, and
signed on its behalf by Maria Varsellona, Chief Legal Officer
and Group Secretary.
Unilever Annual Report and Accounts 2023
101
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Report of the Nominating and
Corporate Governance Committee
The Committee was
engaged in Board
succession and talent
development in the
Unilever Leadership
Executive
A number of changes to the Unilever Leadership Executive
were also announced on 26 October 2023 and were
effective on 1 January 2024. The Committee was involved
in the consideration of the candidates for the Unilever
Leadership positions.
A diverse and inclusive workplace is a priority for the Board
and Committee, and it underpins the appointment and
recruitment processes at all levels in Unilever. Diversity
and inclusion metrics for the Board and ULE are included
in the report and, as at 31 December 2023, the Board was
42% female with one third ethnic minority representation.
In 2024 the Committee will continue to embed the new
leadership and also continue to review Board succession
in respect of independent Non-Executive Directors. The
Committee will also monitor ongoing succession planning
for the Unilever Leadership Executive.
I would like to thank the members of the Committee through
the year for their commitment and contribution.
Ian Meakins
Chair of the Nominating and Corporate
Governance Committee
Ian Meakins
Chair of the Nominating and Corporate
Governance Committee
I am pleased to present the report of the Nominating and
Corporate Governance Committee for the year ended
31 December 2023.
It has been a busy year for the Committee overseeing a
number of Board changes. The Committee itself was led by
Nils Andersen until my appointment on 1 December 2023
and Nils will continue as a valued member of the Committee
until he steps down from the Board at the AGM in 2024, as
previously announced.
In 2023, the Committee had overseen the appointment of
Hein Schumacher as CEO and this change became effective
on 1 July 2023 with the retirement of Alan Jope at that time.
In May 2023, Graeme Pitkethly informed the Board of his
intention to retire from Unilever. The Committee has therefore
also overseen the appointment of a new CFO, Fernando
Fernandez, whose appointment took effect on 1 January
2024. Fernando has an extensive track record in a variety
of financial, marketing and general management roles in
Unilever. His deep financial and business experience, strategic
acumen and leadership qualities will be critical in helping to
drive the step-up in Unilever’s performance that we are all
determined to deliver.
Graeme Pitkethly remained as CFO until 31 December 2023,
at which point he also stood down as a Director. Graeme is
assisting with the transition of Fernando in to his new role
until the end of May 2024.
At the end of October 2023, Feike Sijbesma stepped down
as a Non-Executive Director having served nine years on the
Board. On behalf of the Committee, I would like to thank
Feike for his service to Unilever.
Further details of these Board changes are provided in this
report on pages 103 and 104.
102
Unilever Annual Report and Accounts 2023
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Report of the Nominating and Corporate Governance Committee
Committee members and attendance
Ian Meakins Chair
Nils Andersen
Judith Hartmann
(member from 3 May 2023)
Andrea Jung
Ruby Lu
(member up to and including 3 May 2023)
Feike Sijbesma (stepped down as a Non-
Executive Director on 31 October 2023)
Attendance
-
6/6
3/3
5/6
3/3
5/5
The Chair of the Board, Ian Meakins, chairs the Nominating
and Corporate Governance Committee. Nils Andersen, Judith
Hartmann and Andrea Jung are independent Non-Executive
Dircetors and members of the Committee. The Chief Legal
Officer and Group Secretary is secretary to the Committee.
Other attendees, including the CEO, the Chief People and
Transformation Officer and Deputy Secretary, attend the
meetings when invited to do so.
There were six meetings of the Committee in 2023 and the
table above shows attendance at meetings of the Committee
in the year. Given changes in the Committee membership this
year, attendance is expressed as the number of meetings
attended out of the number able to be attended during each
director’s respective tenure on the Committee during the year.
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;
■ periodically reviewing and assessing Unilever’s practices
and procedures in relation to workforce engagement; and
■ considering current and developing corporate governance
matters, which it brings to the attention of the Board where
deemed necessary.
The Committee’s terms of reference are set out in the Governance
of Unilever, which can be found on the Company’s website.
Activities of the Committee
During the year, the Committee’s key areas of focus included:
■ following a review of the performance of the Directors and,
where relevant their independence, the Committee
recommended the election and re-election of all Directors
at the AGM in May 2023;
■ review of the composition of the Board and its Committees
taking into account the experience, skills, knowledge,
diversity and attributes of the Directors and the length of
tenure of the Non-Executive Directors resulting in changes
to the Committee memberships;
■ appointed Spencer Stuart to support the Committee in
the search for a new Chair of the Board, culminating in the
appointment of Ian Meakins;
■ appointed Russell Reynolds to support the Committee in the
search for a new Chief Financial Officer, culminating in the
appointment of Fernando Fernandez;
■ assessed best practice guidelines and preferences of certain
institutional investors in relation to overboarding;
■ reviewed the ULE succession plan and talent pipeline;
■ conducted an annual review of the diversity policy
applicable to the Board and more widely, the workforce
engagement activities in the year and the plan for the
following year, the terms of reference for the Committee
and the annual workplan for the Committee;
■ considered the process and timetable for the Board
evaluation and maintained oversight of the process (see
page 96 for further information on the Board evaluation);
■ received updates on current and emerging corporate
governance legislation, regulation and best practice
guidelines including in relation to directors’ duties; and
■ considered the Committee’s draft report for inclusion in the
2022 Annual Report and Accounts.
Appointment and reappointment of Directors
to the Board
All Directors (unless they are retiring) are nominated by the
Board for election or re-election at the AGM each year on the
recommendation of the Committee. The Committee takes into
consideration the outcomes of the Chair's discussions with
each Director on individual performance and the evaluation
of the Board and its Committees. Non-Executive Directors
normally serve for a period of up to nine years.
The Committee proposed the election or re-election of all
Directors at the 2023 AGM.
Nelson Peltz and Hein Schumacher had been appointed by
the Board as independent Non-Executive Directors on 20 July
2022 and 4 October 2022 respectively and were therefore put
forward for election by shareholders for the first time at the
2023 AGM.
All the Directors were appointed by shareholders by a simple
majority vote at the 2023 AGM.
Subsequent to the 2023 AGM, Alan Jope stood down as a
director and CEO on 1 July 2023. Hein Schumacher became
an Executive Director on 1 June 2023 and took up the role of
CEO on 1 July 2023 following a one month handover period.
The Committee also reviews the composition of the Board
Committees. During the year, the Committee recommended
in May that Ruby Lu be appointed a member of the Audit
Committee and that Judith Hartmann be appointed a member
of the Nominating and Corporate Governance Committee
and the Compensation Committee. The Committee further
recommended in October that Ian Meakins be appointed
as Chair of the Nominating and Corporate Governance
Committee, as a member of the Compensation Committee
and the Chair of the Company effective from 1 December 2023.
On 31 October 2023, Feike Sijbesma stepped down as a
Non-Executive Director of the Company, having served nine
years on the Board.
During the year, Graeme Pitkethly confirmed that he intended to
step down from the Board as a Director and CFO by the end of
2023. The Committee appointed Russell Reynolds to assist it
to identify suitable candidates for the position of CFO. Russell
Reynolds is an independent executive search firm which has
undertaken several executive, non-executive and management
searches for the Group. Russell Reynolds do not have any
connection to or provide any other services to the Directors
or the Group except for normal course recruitment processes.
Unilever Annual Report and Accounts 2023
103
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Report of the Nominating and Corporate Governance Committee
In January 2023, Unilever announced the appointment of
Fernando Fernandez as a director and CFO with effect from
1 January 2024. Graeme Pitkethly stepped down from the
Board on 31 December 2023.
The process to search for and appoint a new CFO was
managed by the Committee, as summarised below:
■ the Committee agreed the appointment of a search firm
which would be best placed to deliver a comprehensive
candidate list;
■ a detailed candidate specification was agreed, setting out
key responsibilities, experience and personal attributes
together with a clearly defined search strategy;
■ a candidate longlist was mapped against the candidate
specification taking into account Unilever's Board Diversity
Policy; and
■ candidates with the strongest fit were reviewed by the
Committee and met with the Chair and SID and preferred
candidates were nominated to meet with members of
the Board.
Overboarding
As part of the annual evaluation process for each Director, full
consideration was given to the number of external positions
held to ensure that the time commitment required did not
compromise the Director’s commitment to Unilever. The
Committee took into account the views of various investor
bodies and certain institutional investors to anticipate any
perception of overboarding.
The Committee did not identify any instances of overboarding
and concluded that all individual Directors had sufficient time
to commit to their appointment as a Director of Unilever.
The full list of external appointments held by our Directors
can be found in their biographies on pages 84 and 85.
Board Diversity Policy
Unilever has long understood and actively promoted the
importance of diversity and inclusion within our workforce.
This commitment forms part of Unilever’s Code of Business
Principles and is embedded in the way we do business and
conduct ourselves at all levels in the organisation.
Unilever’s Board Diversity policy, which is reviewed by the
Committee each year, is available on the Company’s website.
The objective of the Board Diversity policy is to guide 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. The Board Diversity
policy is taken into account when making appointments to
the Board by considering candidates on merit, on the basis
of wide-ranging experience, backgrounds, skills, knowledge
and insight with a continuing emphasis on diversity including,
but not limited to, factors set out by applicable regulation,
guidance and industry and government best practice.
The Board supports the recommendations of the FTSE Women
Leaders Review on gender diversity and the Parker Review on
ethnic diversity. Specifically:
■ As at 31 December 2023, we are proud to have a female
Senior Independent Director and 42% female Board
members (including Executive Directors). 11% of the Unilever
Leadership Executive are female (excluding Executive
Directors), due to two females stepping down from their
roles prior to the end of 2023. However, as announced on
26 October 2023, two females have been appointed to the
Unilever Leadership Executive from 1 January 2024. These
appointments increase the female members of the Unilever
104
Unilever Annual Report and Accounts 2023
Leadership Executive to 30% (excluding Executive Directors).
There is also a promising pipeline of talent, with 45% of
Senior Management (direct reports to the Unilever
Leadership Executive) being female as at 31 October 2023.
■ We have 33% ethnic minority Board membership (including
Executive Directors), exceeding the Parker Review
recommendation of one ethnic minority Board member.
Our ethnic minority membership of the ULE stands at 67%
(excluding Executive Directors). In accordance with the
extended scope of the Parker Review for 2023, we carried out
an anonymous survey of Senior Management (direct reports
to the Unilever Leadership Executive) via an independent
third-party company to determine ethnicity. 24% responded
as minority ethnic, 24% as white and 52% undisclosed
(including those based in countries where there are legal
or cultural restrictions on collecting ethnicity data). Under
the extended scope of the Parker Review, we set an ethnic
minority target of 24% for the Board, Unilever Leadership
Executive and Senior Management by 31 December 2027.
This is based on our available baseline data, 2021 UK census
statistics, the global nature of Unilever’s business and
benchmarking. We will keep this target under review and
disclose progress against, and any revision of, the target in
future annual reports. Our focus for 2024 is to increase the
response rate for ethnicity data from Senior Management.
Succession planning
Board
The Committee reviews the adequacy and effectiveness of
succession planning processes and the Board reviews the
succession plan in conjunction with the Committee.
The succession plan is based on merit and objective criteria
and is designed to promote diversity. The Board should
comprise a majority of Non-Executive Directors who are
independent of Unilever, free from any conflicts of interest
and able to allocate sufficient time to carry out their
responsibilities effectively. With respect to composition and
capabilities, the 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 Board believes
that a diverse Board with a range of views enhances decision-
making which is beneficial to the Company’s long-term
success and is in the interests of Unilever’s stakeholders.
The Board seeks to promote its diversity by objectively
considering candidates on the basis of their experience, skills,
knowledge, expertise, gender, race, ethnicity, cultural and
geographical background and age. As can be seen in the
biographies on pages 84 and 85 and the tables on page 105,
the Board meets this profile.
ULE
In conjunction with the Committee, the Board reviews the
succession plan for the ULE. In line with the approach to the Board
succession plan, the succession plan for the ULE is also based on
merit and objective criteria and is designed to promote diversity.
Developing an internal talent pipeline for leadership roles is
critical for Unilever. The succession plan identifies potential
successors who are considered able to fulfil the roles in the short
term and those in the longer term. Development initiatives for
senior executives are put in place and usually include executive
mentoring and coaching. Senior managers and executives are
encouraged to take on a non-executive directorship role as part
of their personal development.
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Report of the Nominating and Corporate Governance Committee
Skills and experience matrix
Nils
Andersen
Fernando
Fernandez
Judith
Hartmann
Adrian
Hennah
Andrea
Jung
Susan
Kilsby
Ruby
Lu
Strive
Masiyiwa
Ian
Meakins
Youngme
Moon
Nelson
Peltz
Hein
Schumacher
Business growth
and leadership
of large global
corporations
Strategy, corporate
transactions and
transformation
International
experience
including emerging
markets
Financial
expertise
FMCG and
consumer insights
Technology, digital
and innovation
Marketing and
sales channels
Risk management
and operational
excellence
(including
sustainability and
community)
Society, politics
and geopolitics
Science and
innovation
People, culture
and reward
Corporate
governance
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
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In compliance with the FCA Listing Rules, the tables set out
below show that as at 31 December 2023 we have 42% female
Board members against the target of 40%. The position of
Senior Independent Director is held by a female and at least
one Board member is from a minority ethnic background. The
changes to the ULE effective on 1 January 2024 resulted in a
12 member ULE of which 3 (25%) are women.
We collect both gender and ethnicity data direct from
Board and ULE members annually on a self-identifying basis
in a questionnaire. This data is used for statistical reporting
purposes and provided with consent. Board members are
asked to identify their gender and ethnicity based on the
categories set out in the tables below.
Gender representation on the Board and ULE as at 31 December 2023
Men
Women
Other
Not specified/prefer not to say
Number of
Board members
Percentage of the
Board
Board (CEO, CFO,
SID and Chair)
Number of ULE
members
Percentage
of the ULE
7
5
–
–
58
42
–
–
3
1
–
–
10
1
–
–
91
9
–
–
Ethnicity representation on the Board and ULE as at 31 December 2023
White British or other White (including
minority-white groups)
Mixed/Multiple Ethnic Groups
Asian/Asian British
Black/African/Caribbean/Black British
Other ethnic group, including Arab
Not specified/prefer not to say
Number of
Board members
Percentage of the
Board
Board (CEO, CFO,
SID and Chair)
Number of ULE
members
Percentage
of the ULE
8
–
3
1
–
–
67
–
25
8
–
–
3
–
1
–
–
–
5
1
2
–
3
–
46
9
18
–
27
–
Unilever Annual Report and Accounts 2023
105
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Report of the Nominating and Corporate Governance Committee
Board tenure as at 31 December 2023
Board independence as at 31 December 2023
Committee evaluation
A self-assessment was carried out, overseen by the Chief
Legal Officer and Group Secretary, which involved completion
of a questionnaire which was reviewed by the Chairs of the
Committees. The Committee considered the questionnaires
and the Board agreed with the Committee's proposal for the
Board and Committee evaluation in 2023.
The Board and each of the Committees considered their
respective feedback in November 2023.
The Committee concluded it was performing effectively.
The evaluation confirmed that the Committee should continue
to focus on the skills, experience and diversity of the Board in
maintaining its overview of Board composition. In addition,
continued clear communication on succession planning with
the Board was essential. These areas would be considered in
the Committee's workplan for 2024.
Ian Meakins
Chair of the Nominating and Corporate
Governance Committee
Nils Andersen
Judith Hartmann
Andrea Jung
106
Unilever Annual Report and Accounts 2023
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Report of the Audit Committee
In addition to our reporting
and control responsibilities,
we focused this year on risks
relating to cyber security,
supply chain resilience and
data privacy.
We dedicated time and resources to enhancing our
understanding of the Group’s continuously evolving
regulatory and legal landscape, and how the Group is
adapting to it. The Committee also reviewed all significant
ethical and compliance matters.
In addition to the formal meetings, the Committee members
have been engaging with the business through market
visits and during the year visited USA, Brazil, Argentina and
the Netherlands.
In 2024, our primary focus, beyond our core responsibilities,
will remain on the evolving cyber security threat landscape
and strengthening our supply chain resilience. We will also
oversee the preparation for new compliance requirements,
in particular enhanced sustainability reporting pursuant to
CSRD and the ESRSs.
Adrian Hennah
Chair of the Audit Committee
Adrian Hennah
Chair of the Audit Committee
On behalf of the Audit Committee, I am pleased to present
the Committee’s report for the year ended 31 December 2023.
In 2023, the Committee concluded the year with three
members. Hein Schumacher was appointed as CEO of Unilever,
Judith Hartmann moved to another committee, and we
welcomed Ruby Lu. Her insights and experiences especially in
evolving technology, are valuable additions to our Committee.
The Committee believes it has carried out its duties effectively
throughout the year and to a high standard, providing
independent oversight. It has had good support from
management and the internal audit team.
The core of the work of the Committee has been to ensure the
integrity of Unilever’s financial and non-financial reporting,
the adequacy of its internal control framework and to oversee
how the company manages its principal and emerging risks.
The committee also participated in the selection of Fernando
Fernandez as Unilever’s new Chief Financial Officer.
In the area of risk management, we continued to focus this
year on cyber security, supply chain resilience, and data
privacy. The Committee commissioned an independent
assessment of our cyber security maturity to ensure
adequacy of our capabilities and controls. The Committee
engaged on the organisational changes the company is going
through and their impact on reporting and the management
of controls. We also met with management to discuss
emerging developments in international taxation, pensions
and sustainability reporting including pursuant to the
Corporate Sustainability Reporting Directive (CSRD) and the
new European Sustainability Reporting Standards (ESRSs).
Unilever Annual Report and Accounts 2023
107
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Report of the Audit Committee
Committee membership and attendance
All relevant matters arising are brought to the attention
of the Board.
Adrian Hennah Chair
Susan Kilsby
Judith Hartmann (member up to and
including 2 May 2023 )
Hein Schumacher (member up to and
including 2 May 2023)
Ruby Lu (member from 3 May 2023)
Attendance
8/8
8/8
5/5
5/5
3/3
The Audit Committee is comprised only of independent Non-
Executive Directors with a minimum requirement of three such
members. The Audit Committee was chaired by Adrian Hennah.
The other Committee members are Susan Kilsby, and Ruby Lu
who was appointed in July 2023 replacing Judith Hartmann
who transitioned to another committee. Hein Schumacher
was appointed to become CEO of Unilever as of July 2023.
The Board is satisfied that the members of the Audit
Committee are competent in financial matters and have
recent and relevant experience. For the purposes of the US
Sarbanes-Oxley Act of 2002, Adrian Hennah is the Audit
Committee’s financial expert.
Other attendees at Committee meetings included the Chief
Financial Officer (CFO), Chief Auditor, Deputy CFO & Controller,
Chief Legal Officer & Group Secretary, Deputy Group Secretary
& Head of Corporate Legal, General Counsel Corporate
Governance and Group Corporate Legal, Head of Secretariat,
EVP Sustainable Business Performance and Reporting and
the external auditors. Throughout the year, the Committee
members met periodically without others present and also
held separate private sessions with the Chief Financial Officer,
Chief Auditor and the external auditors.
There were eight scheduled meetings of the Committee during
the year. Attendance at the scheduled meetings is shown
above. Given changes in the Committee membership this year,
attendance is expressed as the number of meetings attended
out of the number able to be attended during each director’s
respective tenure on the Committee during the year.
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, considering relevant legislation, and
recommended good practices. The terms of reference are
contained within the document entitled "The Governance of
Unilever" which is available on our website.
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 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 225; and
■ performance of the internal audit function.
108
Unilever Annual Report and Accounts 2023
Committee Reviews
To help the Committee meet its oversight responsibilities,
focused knowledge sessions are organised for committee
members throughout the year. In 2023, sessions were held
to review the impact of cost inflation, a review of group litigation,
sustainability reporting and M&A performance and plans.
In addition, Committee members visited the local businesses
in the US, Argentina, Brazil, and the Netherlands providing
them with an insight into local market challenges and local
risk and control management. In Brazil special focus was given
to existing tax liabilities, please refer to note 19 and 20 on
page 219-220. In Argentina management’s approach to the
challenges arising from the hyperinflationary economic
context was focused on, and in the Netherlands the
Committee spent time to understand the capabilities of the
new R&D center co-located within the local University campus
in Wageningen.
The Committee also received presentations from management
and held 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. Special focus has been given to critical IT
systems and cyber security, data privacy, major transformation
projects, management of manufacturing third parties as well
as management of third-party service providers. In addition,
the Committee has had engagements with management with
regard to their assurance work on sustainability as well as the
work done in the areas of tax, treasury and pension matters.
Reporting and 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 Form 20-F 2023. These reviews
incorporated the accounting policies and significant
judgements and estimates underpinning the financial
statements as disclosed within note 1 on page 178.
Particular attention was paid to the following significant
matters in relation to the financial statements:
■ indirect tax provisions and contingent liabilities related to
Brazil, refer to notes 19 and 20 on pages 219-220. The
Committee agreed that the tax provisions and judgements
around the likelihood as well as the disclosures are
appropriate in the Annual Report and Accounts;
■ revenue recognition. The Committee reviewed the adequacy
of the policy around the cut off and appropriateness of
discounts accruals;
■ impairment risk in Russia. The committee reviewed the
disclosure of the impairment risk related to Russia;
■ the presentation of non-underlying items. The Committee
took account of management’s responses to its review and
of the reporting received from and observations made by the
external Auditor.
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 Committee's
feedback has been incorporated into the final approach. The
matters were also discussed with the external auditors and further
information can be found on pages 157 to 172.
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Report of the Audit Committee
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 has
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
2023 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 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 2023 is fair, balanced, and understandable.
Historically, reporting on environmental and social matters
has mostly been voluntary but this is rapidly changing and
there is more and more mandatory reporting on these matters.
The UK has required premium listed companies to disclose
climate-related information based on the Taskforce on
Climate-Related Financial Disclosures (TCFD) framework for
the last couple of years. For the financial year beginning
on 1 January 2024 we will also need to comply with the CSRD
and disclose material sustainability information in accordance
with the European Sustainability Reporting Standards. This is
an extensive suite of disclosures on a range of environmental,
social and governance matters which will be included in our
2024 Annual Report and Accounts. The Committee will be
responsible together with the Corporate Responsibility
Committee for overseeing compliance with these disclosure
requirements. In future years there are also likely to be further
mandatory non-financial reporting standards which will be
applicable to the group as the International Sustainability
Standards Board (ISSB) has issued a number of sustainability
reporting standards and is working on additional ones, and
these are currently going through the endorsement process for
use in the UK. During 2023, the Committee reviewed the limited
assurance work performed by PwC on certain sustainability
metrics and also reviewed the 2023 to 2026 sustainability
assurance plan.
Risk Management & Internal Controls
(Assurance)
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 risk areas for which
the Committee had oversight responsibility: treasury, tax
and pensions, information security, data privacy, legal
and regulatory compliance, supply chain and key suppliers
and business transformation;
■ the proposed risk areas identified by the ULE;
■ the Quarterly Risk and Control Status Reports, including
Code of Business Principles cases relating to frauds and
financial crimes;
Regulator Correspondence
In 2023, Unilever did not receive any formal notifications or
communications from either the U.S. Securities and Exchange
Commission (SEC) or the UK Financial Reporting Council (FRC).
■ 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
Sustainability
The Committee continued to oversee the reporting of
sustainability performance, keeping itself updated on the
changing regulatory requirements in this area by having
separate knowledge sessions with management and PwC
during the year. This included updates on changes in
sustainability reporting requirements and changes in
sustainability assurance.
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.
Unilever Annual Report and Accounts 2023
109
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Report of the Audit Committee
The Committee has completed its review for 2023 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. An 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, the Committee
also ensured that appropriate procedures are in place for
the detection and prevention of fraud.
The Committee continued to prepare for legislative or
regulatory changes. Whilst many of the proposed audit and
corporate governance reforms in the UK are not going to
proceed in the short-term, changes to the UK's Corporate
Governance, principally in relation to internal controls
requirements, were published in January 2024 (with
strengthened requirements relating to material internal
controls coming into effect for financial years starting on/after
1 January 2026). The Committee will continue to monitor any
upcoming legislation and their impact to Unilever.
Internal Audit
The Committee reviewed internal audit’s plan which is focused
on Unilever’s risk areas including sustainability, cyber security,
data privacy, financial control processes, product safety and
supply chain resilience. The Committee ensured the necessary
resources were in place to perform the audits effectively.
Enhanced use of data and analytics has made the internal
audits more efficient and effective, increasing the coverage.
The Committee reviewed quarterly and year-end summary
reports which included the results of audit activities and
completion status of agreed actions. During the year, the Chief
Auditor and his team undertook business visits in person, in
particular in a number of the Group's more strategic markets.
Most audits have been conducted as hybrid (combination of
virtual and physical).
Every five years, the Committee engages an independent
third party to perform an effectiveness review of the function.
This was last completed in 2022 and is planned for 2026.
In 2023, 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 an 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 has been the Group’s auditors since 2014 and
shareholders approved their reappointment as the Group’s
external auditors at the 2023 AGM. On the recommendation
of the Committee, the Directors will be proposing the
reappointment of KPMG at the AGM in May 2024.
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 2022 where the decision to
reappoint KPMG was unanimously recommended by the
Committee and approved by the Board of Unilever. At present,
we are satisfied with the effectiveness of our current auditors
and hence have no plans to re-tender 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.
Each year, the Committee assesses the effectiveness of the
external audit process which includes discussing feedback
from the members of the Committee and stakeholders at all
levels across Unilever. Interviews are also held with key senior
management within both Unilever and KPMG.
The Committee also reviewed the statutory audit, 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;
■ 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.
110
Unilever Annual Report and Accounts 2023
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Report of the Audit Committee
Audit Fees
All engagements over €250,000 require specific advance
approval by the Audit Committee Chair. The Committee
further review all engagements which have been authorised
by the Deputy CFO & Controller. 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 8% of
the annual statutory audit fee, this is also the case for 2023.
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 Committee
The Committee carried out an assessment of its effectiveness
and performance in the year. The process was overseen by the
Chief Legal Officer & Group Secretary.
The Committee considered the output from that process at
its meeting in November 2023. Feedback was also provided to
the Board as part of its evaluation of the overall effectiveness
of the Board. The Committee concluded that it is performing
effectively.
Adrian Hennah
Chair of the Audit Committee
Susan Kilsby
Ruby Lu
Unilever Annual Report and Accounts 2023
111
STRATEGIC REPORT
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FINANCIAL STATEMENTS
Report of the Corporate
Responsibility Committee
As a Committee, we
guide Unilever’s strategy
on sustainability,
from climate change
and plastics, to living
wage and human rights.
Strive Masiyiwa
Chair of the Corporate Responsibility Committee
On behalf of the Corporate Responsibility Committee (CRC),
I am pleased to present our report for 2023.
On reflection, this has been a year of progress despite an ever-
changing and increasingly complex operating environment.
The CRC is responsible for the oversight of Unilever’s conduct
regarding its corporate and societal obligations, its reputation
as a responsible corporate citizen and its culture. To execute
this duty, the Committee worked closely with Unilever and the
Board on a range of topics including climate litigation, Human
Rights, and Equity, Diversity, and Inclusion (ED&I), and non-
financial reporting, as well as Unilever’s performance against
the Sustainability Progress Index (SPI), one of the performance
measures for our long-term incentive plans.
This year, external challenges reinforced the importance of
the Committee’s role in protecting and enhancing Unilever’s
reputation, a foundational element to the business's success.
The Committee and management discussed at length
geopolitical tensions and conflict as well as rising activism,
and Unilever’s position, ensuring the business had robust
processes in place to respond to such risks, especially those
that emerge quickly. From these discussions, the CRC made
recommendations to the Board to ensure that Unilever
maintains the highest level of oversight of material issues.
The Committee also focused on the Climate Transition Action
Plan (CTAP) and specifically the Business Group emissions
reduction roadmaps to 2030. With the external landscape
a challenging mixture of activism, disclosure and physical
climate risks, the Committee guided management ahead
of the presentation of the CTAP to Unilever’s stakeholders.
Throughout the year, it was clear Unilever’s leadership remains
committed to delivering resilient, sustainable and superior
performance. With the appointment of Hein Schumacher as
CEO, and sustainability a key tenet of the Growth Action Plan,
there is no doubt that the company remains committed to
being a leader in sustainable business.
In 2024, with the sustainability focus areas defined, the
business is well positioned to use its scale and expertise
to make progress on its most material issues. The CRC will
continue to support the business to do so, by reviewing the
sustainability strategy and challenging management to
remain focussed on long-term impact and resilience.
Lastly, on behalf of the Committee, thank you to Feike
Sijbesma who retired from the CRC after eight years. I look
forward to welcoming a new Corporate Responsibility
Committee member in 2024. My thanks also go to Unilever’s
leadership and the whole organisation for the commitment
and drive to deliver sustainable, responsible growth. I look
forward to the year ahead and further honest and constructive
engagements with my fellow Committee members.
Strive Masiyiwa
Chair of the Corporate Responsibility Committee
112
Unilever Annual Report and Accounts 2023
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Report of the Corporate Responsibility Committee
Committee members and attendance
Strive Masiyiwa Chair
Youngme Moon
Feike Sijbesma
Attendance
5/5
5/5
4/4
This table shows the membership of the Committee together
with their attendance at meetings up to and including
31 October 2023. If Directors are unable to attend a meeting,
they have the opportunity to discuss any agenda items
beforehand with the Committee Chair.
The Corporate Responsibility Committee comprises three
Non-Executive Directors: Strive Masiyiwa (Chair), Youngme
Moon and Feike Sijbesma. Feike Sijbesma retired from the
Committee in October 2023.
The Chief Research & Development Officer, the Chief
Sustainability Officer and the Chief Business Integrity Officer
attend the Committee’s meetings. The Chief Legal Officer &
Group Secretary, and Head of Communications 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. Part of this responsibility is reviewing and managing
sustainability-related risks, opportunities and trends material
to Unilever. The Committee also provides reviews and
recommendations to the Board about the CTAP which sets
out the actions we intend to take to reduce emissions in our
business and progress on our net zero goal by 2039.
The Committee is 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 impact Unilever’s corporate reputation, and to ensure
that appropriate and effective communication policies are in
place to support this. The Committee also oversees employee
safety, security and wellbeing alongside Unilever’s Code of
Business Principles and third-party compliance with our
Responsible Partner Policy, 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 which is accountable
for driving responsible and sustainable growth through
Unilever’s operations, Business Groups, value chain and
brands. Senior leaders are invited to the Committee to share
their perspectives and insights on key issues, challenges and
external developments.
Complementing the Committee’s role, the Audit Committee
is responsible for reviewing the independent assurance
programme of Unilever’s sustainability commitments, and
significant breaches of the Code of Business Principles.
The Committee’s terms of reference are set out at:
www.unilever.com/corporategovernance
During 2023, the Committee had detailed discussions
on occupational health, non-financial reporting, climate
litigation, the roadmap to net zero, CTAP 2.0, Human Rights,
and Equity, Diversity, and Inclusion (ED&I).
How the Committee has discharged its
responsibilities
In 2023, the Committee’s principal activities were as follows:
Navigating an uncertain and volatile world
The world is an increasingly turbulent place, facing
unprecedented and mutually reinforcing environmental
and social risks that impact our business, both directly and
indirectly. Campaigners are leveraging technology and
diverse strategic approaches – from shareholder activism
to litigation – to amplify messages and mobilise people in
support of their causes.
Committee members closely scrutinised the processes for
managing issues that present material risks to the reputation
of the business, urging the business to remain proactive and
transparent. The Committee also reviewed the risks and
mitigating actions relating to climate activism, litigation and
regulatory pressure, including the accuracy and completeness
of climate disclosure, and the adequacy of the business’s
climate strategy. Meanwhile, both new and on going
geopolitical tensions and conflict created unique challenges
for Unilever in 2023. The Committee discussed matters ranging
from the war in Ukraine, safety on tea plantations, and
activism by Ben & Jerry’s. The Committee remained in close
consultation with management on these matters, escalating
their recommendations to the Board when necessary.
Overseeing Code of Business Principles compliance
The Code and associated Code Policies set out the standards
of conduct expected of all Unilever employees in their business
endeavours. Compliance with these standards is an essential
element of ensuring Unilever’s continued business success. Any
breach is identified as an ethical, legal, and regulatory risk to
the business (see pages 77 and 78).
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 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 business.
At each meeting, the Committee reviews an analysis of
investigations into non-compliance with the Code and Code
Policies and discusses any trends or learnings 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 anti-bribery and corruption measures
and competition law compliance. Human rights continued to
be a focus of the Committee’s Code oversight.
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Responsible Partner Policy (RPP) compliance
Extending Unilever’s values to third parties is essential if
Unilever is to generate responsible growth and a positive
social impact on the industry and wider society. Breaches of
third-party compliance can pose a risk to the business, so
the Committee rigorously examines Unilever’s compliance
programmes to minimise risks.
At each meeting, the Committee tracks compliance with
Unilever’s RPP. This policy sets out Unilever’s requirements that
third parties conduct business with integrity and respect for
human rights and core labour principles. In 2023, particular
focus was given to compliance by some of our smaller
businesses which are on stand-alone systems.
Promoting safety and security
Safety, Health and Environment (SHE) are key priorities at
Unilever.
Unilever remains focused on promoting a safety-first culture,
evidenced by our UniVoice Survey where the top-rated
statement for the last several years is “Unilever is committed
to my safety”. Our employee-only TRFR was 0.58 accidents per
million hours worked (1 October 2022 to 30 September 2023)
versus 0.67 in 2022, which shows continued improvement.
In 2023, we very sadly lost one contractor due to a steam
exposure. The Committee oversaw Unilever’s approach to
safety with particular emphasis on road safety, process safety
and contractor management risks. The Committee noted the
implementation of appropriate programmes to further reduce
these risks.
The Committee also examined Unilever’s approach to security.
As a global business, Unilever operates in many countries,
some of which have a high degree of vulnerability given
their diminished capacity to absorb external shocks or tackle
domestic challenges. Accordingly, Unilever must remain agile
to the increased market volatility created by geopolitics,
conflict, inflation, and environmental and social crises.
Improving the health and wellbeing of employees
The Committee focused on the progress of the health and
wellbeing status of Unilever employees and commended
the actions taken by the business to support employees.
The Committee oversaw Unilever’s Healthier U programme
which focuses on chronic conditions and has engaged over
13,000 frontline workers across different geographies. The
programme showed significant improvements in biomedical
parameters, nutrition, quality of life, sleep, mental health,
and work productivity. The programme is moving from pilot
to scale by expanding to office-based employees including
those in Western Europe and North America.
Psychological safety remains a foundation for the
organisation. The business actively monitors perceptions
of psychological safety among the workforce. Programmes
focused on psychological safety include a Mental Health
Champion programme and team energy assessments.
Equity, diversity and inclusion
Our approach to equity, diversity and inclusion is focused on
building a strong, inclusive culture with our own workforce; on
diversifying our supply chain and increasing our procurement
spend with diverse businesses; on ending harmful stereotypes
through our brands with consumers; and on building stronger,
more equitable communities through partnerships and
advocacy.
Unilever is working to remove barriers to opportunity based
on factors that have been used to exclude people around the
world: gender, race and ethnicity, disability, socioeconomic
status, and sexual orientation. We are developing new
initiatives across the business which impact a wide range
of communities. The Committee encouraged continual
consultation to ensure a range of views on this work and
requested that they be kept up to date with the Equity
Advancement Framework, an enterprise-wide tool to help
uncover systemic inequities within our business, identify
their root causes, and understand how they are impacting
our employees’ experiences, once this is finalised.
Overseeing the Climate Transition Action Plan
The impacts of climate change and nature loss are becoming
ever more apparent, and the imperative to reduce emissions
in our societies and protect and restore nature increasingly
urgent.
Unilever's first CTAP was approved by shareholders at the
2021 AGM. The CTAP set out Unilever's suite of climate targets,
an analysis of our value chain emissions, and the actions we
intended to take to address them. It also covered aspects
such as portfolio evolution (e.g. plant-based foods), external
advocacy and engagement, and governance. The Corporate
Responsibility Committee is responsible for overseeing
CTAP progress.
The Board committed to develop the CTAP in line with
best practice, reflecting external guidance such as the
recommendations of the UK Transition Plan Taskforce and
considering the European Sustainability Reporting Standards
and International Financial Reporting Standards. An updated
CTAP will be presented to our shareholders at the 2024 AGM
for an advisory vote.
The Committee also reviewed and approved the 2023 CTAP
Progress Report which is set out in the Annual Report and
Accounts, as well as our two new Scope 3 emissions reduction
targets. As part of the Committee’s oversight of the CTAP,
members also reviewed the Business Groups’ roadmaps that
aim to achieve interim 2030 targets aligned to our net zero
ambition.
Complying with mandatory sustainability reporting
Reporting on environmental and social matters is increasingly
becoming mandatory.
The UK has required premium listed companies to make
climate-related financial disclosures based on the TCFD
framework since 2021. From January 2024, we will also need to
comply with the Corporate Sustainability Reporting Directive
(CSRD) and disclose material sustainability information in
accordance with the European Sustainability Reporting
Standards (ESRS). This is an extensive suite of disclosures on
a range of environmental, social and governance matters
which will be included in our 2024 Annual Report and Accounts.
Together with the Audit Committee, the Committee will be
responsible for overseeing compliance with these disclosure
requirements.
In future years, there are likely to be further mandatory non-
financial reporting standards which will apply to the Group.
The International Sustainability Standards Board (ISSB) has
issued a number of sustainability reporting standards which
are currently going through the endorsement process for use
in the UK.
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Sustainability Progress Index
Unilever’s Reward Framework includes a Performance Share
Plan (PSP). This long-term incentive plan is linked to financial
performance, as well as performance against sustainability
goals (see page 65).
In 2023, as part of the Directors’ Remuneration Policy review,
the Sustainability Progress Index (SPI) was revised to ensure it
remains a relevant performance measure, in line with investor
and best practice expectations, and drives the right internal
behaviours and decisions.
To come to a view on Unilever’s performance on its
sustainability goals for the purposes of reward, the Corporate
Responsibility Committee and the Compensation Committee
jointly evaluate performance against a Sustainability Progress
Index (SPI).
2023 SPI outcome
In 2023, as in years before, this included a selection of
eight equally weighted KPIs and targets, with one ‘anchor’
KPI/target from each of the pillars which underpin Unilever’s
sustainability commitments. In making their rounded
assessment, the Committees review both qualitative and
quantitative progress across multiple elements of the pillar
and delivery against the respective anchor KPI.
This year, the assessment of the SPI performance moved to in-
year reporting for two KPIs to close the gap between delivery
and assessment. As a result, the Committees assessed six
SPI KPIs based on performance in 2022 and two SPI KPIs on
performance in 2023. The nutrition KPI was updated to reflect
the updated Compass commitment scope, and the health and
wellbeing target was revised to ensure it remained stretching.
Following an in-depth discussion on the SPI, the Corporate
Responsibility Committee agreed on 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 page 136).
2024-2026 SPI KPIs and targets
Unilever’s historic approach to incorporating sustainability into
employee long-term incentives has been at the forefront of
market practice. The SPI has been an established feature of our
Long-Term Incentive Plan (LTIP), the Performance Share Plan,
and previously the Management Co-Investment Plan (MCIP)
scheme since it was introduced in 2017.
The Corporate Responsibility Committee, in collaboration with
the Compensation Committee, reviewed the compensation
plans of our peers, and conducted an investor consultation,
to inform the new SPI scheme. As a result, the Committees
selected four metrics that align with Unilever’s four
sustainability focus areas. The targets and ranges are all
numeric and will drive the outcome; however, the Committee
will retain the ability to make a rounded assessment.
The outcome of the PSP 2024-2026 will be assessed using
2026 actuals. In the meantime, for in-flight PSP schemes, the
Corporate Responsibility Committee and Compensation
Committee will determine the annual SPI outcome using
interim KPIs and targets aligned to the 2024-2026 scorecard
and in-year data.
Evaluation of the Corporate Responsibility
Committee
The Committee carried out an assessment of its effectiveness
and performance in the year. The process was administered
by a questionnaire and overseen by the Chief Legal Officer &
Group Secretary.
The Committee considered the output from that process in
January 2023. The Committee concluded that it is performing
effectively and highlighted the importance of retaining
flexibility to discuss emerging topics. This was incorporated
into the Committee’s annual workplan for 2023.
The feedback was also provided to the Board as part of its
evaluation of the overall performance and effectiveness of
the Board.
Strive Masiyiwa
Chair of the Corporate Responsibility Committee
Youngme Moon
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I would like to express
my gratitude for the
valuable feedback
received during
the shareholder
consultation process.
Andrea Jung
Vice Chair/Senior Independent Director and
Chair of the Compensation Committee
On behalf of the Compensation Committee, I am pleased
to present Unilever’s Directors’ Remuneration Report 2023.
Unilever's Remuneration Policy is being presented for
shareholder approval at the 2024 AGM and therefore the
proposal is set out below. I have included the Committee’s
activities in 2023, a summary of Unilever’s business
performance in 2023 and how it links to key remuneration
outcomes for the year.
Business performance and remuneration
Unilever delivered an improving financial performance, with
the return to volume growth and margins rebuilding. However,
our competitiveness remains disappointing, which we are
working at speed to address.
We achieved underlying sales growth (USG) of 7.0% in 2023,
with positive volumes, up 0.2% for the financial year.
Underlying operating margin (UOM) increased by 60bps
to 16.7%, significantly ahead of target of 16.3%.
Free cash flow (FCF) increased €1.9bn to €7.1bn (€6.7bn
excluding €0.4bn linked to a tax refund in India), driven by
higher underlying operating profit (UOP) and significantly
improved working capital. €6.7bn is the figure used for
remuneration purposes.
Underlying earnings per share increased by 1.4% to €2.60,
despite a (9.6%) adverse currency impact.
Underlying return on invested capital (ROIC) improved to
16.2%, compared to 16.0% in the prior year. This reflected the
working capital improvement achieved over the year.
Competitiveness expressed as % business winning market
share (% Business Winning) on a rolling 12-month basis was
disappointing at 37%. % Business Winning measures the
aggregate turnover of the portfolio components (country/
category cells) gaining value market share as a percentage
of the total turnover measured by market data. As such, it
assesses what percentage of turnover is being generated
in areas where we are gaining market share. For more
information on % Business Winning and how it is calculated,
please see the remuneration section of our website.
The Committee agreed an outcome of 115% for the
Sustainability Progress Index (SPI) for 2023 in conjunction with
the Corporate Responsibility Committee. Please see page 136
to 137 for more information on the SPI outcome for 2023 and
page 131 for the SPI targets for Performance Share Plan (PSP)
2024-2026.
Our reported financial outcomes include a contribution from
our business operations in Russia. For remuneration purposes,
the Committee have excluded the impact of our Russia
business from performance outcomes resulting in lower
payouts for Management Co-Investment Plan (MCIP) and
PSP for the Executive Directors, as outlined below.
Incentive outcomes and wider stakeholder
considerations
2023 annual bonus
Under the formulaic outcomes, a bonus outcome of 150% of
target opportunity was determined for the Executive Directors,
as detailed in the chart on page 135.
However, after careful consideration, the Committee decided
to exercise discretion to adjust the formulaic outcome
downwards to 115% of target. Each year, the Committee
carefully reviews performance in the round to determine
whether the formulaic outcome fully reflects performance.
Whilst the Committee believe that performance delivered in
the year was strong, we believe there is scope to improve our
competitiveness. The Committee considered numerous data
points when assessing our competitiveness performance and
concluded that we are not winning sufficient market share in
a number of key markets. The Committee also concluded that
our share price performance was below expectations. Taking
both factors into account led to the reduction from 150% of
target to 115% of target, which we believe is reasonable and
aligns the experience of shareholders, stakeholders and the
Executive Directors. The annual bonus pool for eligible
managers within the wider workforce will also be 115%.
2020-2023 MCIP
The formulaic outcome for the 2020-2023 MCIP was 88% of
target, as detailed in the chart on page 135.
After exercising discretion to adjust the formulaic outcome
to remove the contribution of business operations in Russia,
the outcome was lowered to 87% of target for the Executive
Directors. The formulaic outcome of 88% will apply to eligible
managers within the wider workforce.
The Committee considered whether any further discretion
was needed to reflect any windfall gains and determined that
no such reduction was warranted. This was on the basis that
the share price used to determine the 2020 award was not
materially below the equivalent share price used to determine
the 2019 award.
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2021-2023 PSP
The PSP was introduced in 2021 to replace MCIP. The
performance period for the PSP is three years, compared to
four years for MCIP. Therefore, there is a vesting of both the
2020-2023 MCIP and the 2021-2023 PSP in 2024 based on
performance period to the end of 2023.
The formulaic outcome for the 2021-2023 PSP was 65% of
target, as detailed in the chart on page 136.
Similarly to MCIP, after adjusting the formulaic outcome to
remove the contribution from our business operations in
Russia, this was reduced from 65% to 63% of target for the
Executive Directors. The formulaic outcome of 65% will apply
to eligible managers within the wider workforce.
The Committee also considered whether any further discretion
was needed to reflect any windfall gains and determined that
no such reduction was warranted for the same reasons as for
the 2020-2023 MCIP.
Wider stakeholder considerations
When considering the annual bonus, MCIP and PSP outcomes,
the Committee carefully took into account the experiences
of our wider stakeholders in order to ensure that outcomes
were aligned. These considerations directly led to the
discretionary adjustments as outlined above.
Our new Directors' Remuneration Policy for 2024
Our Remuneration Policy was last approved at the May 2021
AGM. Consequently, it reaches the end of its three-year
approval period, and a new remuneration policy is being
presented for shareholder approval at the May 2024 AGM
(New Remuneration Policy).
The Committee carried out extensive consultation with
shareholders and proxy advisers in June and September to
discuss the 2023 AGM voting outcome on acceptance of the
2022 Directors' remuneration report and the proposed New
Remuneration Policy. The feedback received during the
consultation was valued by the Committee and taken into
account in developing the proposed New Remuneration Policy.
The Committee also monitored the external environment
on pay and sought feedback from all management level
employees on the current remuneration structure of fixed pay,
benefits, annual bonus and PSP. 82% of respondents stated
that PSP is competitive, 76% for retirement benefits, 74% for
health benefits and 73% for annual bonus.
Our New Remuneration Policy was developed in light of this
process and feedback and provides for continuity in policy,
but refinement of implementation.
The key updates we are proposing to make to the
implementation of our New Remuneration Policy are to:
■ freeze the CEO’s fixed pay for 2024 and 2025;
■ refocus the remuneration benchmarking peer group; and
■ update performance measures and weightings for annual
bonus and PSP, as follows:
■ Annual bonus: USG 40%, UOP growth (adjusted for
restructuring costs for the Executive Directors) 30% and
FCF 30%.
■ PSP: USG 25%, relative total shareholder return (TSR) 30%,
average underlying ROIC 30% and SPI 15%.
The Committee is making these updates to:
■ retain the current remuneration structure of fixed pay,
benefits, annual bonus and PSP, which is simple, previously
approved by shareholders and reflects market norms of a
European-listed company;
■ maintain incentive quantum, noting this results in overall
pay for the Executive Directors at median level compared
to peers;
■ narrow sector focus of remuneration benchmarking peer
group to only include consumer goods companies and to
reflect Unilever's talent pool;
■ support strong strategic alignment of incentive performance
measures for 2024 and beyond;
■ simplify targets under the SPI performance measure; and
■ incorporate valued feedback received from shareholders
during consultation.
Having undertaken an extensive consultation exercise before
finalising the New Remuneration Policy, the Committee
believes it can be fully supported by the great majority of
our shareholders.
As with our previous reward framework, Unilever will cascade
the same approach across our 15,000+ managers worldwide.
However, to focus on individual performance for our managers
at work levels 2 and 3, PSP will be replaced with restricted stock
units and the size of the award linked to in-year performance.
Executive Director changes
As previously announced, Alan Jope stepped down as CEO
and Executive Director on 30 June 2023 and retired from
employment on 31 December 2023. Details of his remuneration
are in line with the Remuneration Policy and were disclosed in
last year's Directors' remuneration report. In particular, Alan
remained eligible to receive a pro rata annual bonus from
1 January to 30 June 2023. As he was employed for the entirety
of the performance periods, the Committee determined that
his 2020-2023 MCIP and 2021-2023 awards would vest in full,
subject to performance outcomes, as outlined above.
Graeme Pitkethly stepped down as CFO and Executive
Director with effect from 1 January 2024 and will retire from
employment on 31 May 2024. He will continue to be paid in
line with the Remuneration Policy until his retirement. Further
details of Graeme’s leaving arrangements are set out on
page 145.
As announced on 26 October 2023, Fernando Fernandez was
promoted to the role of CFO with effect from 1 January 2024.
Fernando's fixed pay has been set at €1,175,000 with annual
bonus and PSP opportunity in line with our Remuneration
Policy. The Committee believes that the current positioning
of the package represents an acceptable balance in view of
various considerations, such as competitive external market
pay rates across Unilever’s peer group, Fernando's extensive
skills and experience with Unilever and salary increases
awarded to the wider workforce. We also took on board
previous feedback from shareholders in relation to the fixed
pay of the incoming CEO and positioned Fernando's fixed pay
lower than Graeme's fixed pay as current CFO.
Fernando will receive a relocation allowance and the cost of
temporary accommodation for a maximum of six months to
support his move to the UK. Further details of Fernando's
appointment are set out on page 144.
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Executive Director fixed pay increases
The Committee considered investor feedback carefully and,
as a result, the Board has decided to freeze the CEO’s fixed
pay for 2024 and 2025.
Given the announcement of Graeme to retire from
employment at the end of May 2024, the Committee decided
not to review his fixed pay for 2024. As outlined above, the
Committee set the fixed pay for Fernando Fernandez as the
incoming CFO, effective from 1 January 2024.
The average wider workforce pay increase in 2023 was 7.62%.
Non-Executive Director fees
Non-Executive Director fees are in line with market rate and
given the increase in fees in 2023, the Board decided not to
further increase fees in 2024. We will keep Non-Executive
Director fees under regular review.
Engaging with shareholders
As mentioned above, the Committee conducted
comprehensive consultation with shareholders and proxy
advisers in 2023 in respect of the 2022 Directors' remuneration
report and the renewal of the Remuneration Policy. The
Committee has taken into account their views, which have
been invaluable in developing the final proposals.
In particular, we took into account feedback in relation to
the fixed pay of the incoming CEO and CFO, simplification of
the SPI performance measure for PSP, introduction of relative
TSR as a performance measure for PSP, UOP adjusted for
restructuring costs for Executive Directors for annual bonus,
composition of the benchmarking peer group, and weightings
of performance measures.
The Committee is committed to ensuring that remuneration
performance measures for the Executive Directors align
with the interests of shareholders. The Committee hopes
that shareholders will be supportive of these changes and
would very much welcome any further engagement on
these proposals.
Engaging with employees
The Board shares the responsibility for workforce engagement
among all the 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 2023, see page 96 for a summary of the
discussions that took place.
In November 2023, the proposed New Remuneration Policy
was shared with the European Works Council, followed by
discussions with local works councils and trade unions where
applicable. We took on board feedback to ensure Unilever
focuses on long-term goals like sustainability, remains
competitive to attract and retain talent, and extends share
ownership to employees below management level.
Along with another member of the Committee, I attended
an engagement session with employees on the subject of
reward and the proposed New Remuneration Policy in January
2024. Employees shared feedback on flexibility of variable
remuneration, reward structures during high inflation, reward
for work level 1 employees, communication of long-term
incentives and culture of rewarding performance. Employees
shared feedback that there has been an improvement in
differentiation based on performance, which was a topic
raised in the previous engagement session on reward.
The Committee is periodically updated on matters impacting
the workforce, including operation of annual bonus schemes,
the talent review process, pay review budgets, distribution of
performance ratings, diversity, living wage, the new long-term
incentive plan for work levels 2 and 3, and alignment of
incentives and rewards with Unilever's culture.
In light of the above, the Committee believes the
implementation of remuneration in 2023 is a fair reflection
of employee experience.
Implementation report
The annual report on remuneration describes 2023
remuneration in detail as well as the planned implementation
of the proposed New Remuneration Policy in 2024.
On behalf of the Committee and the entire Board, I thank all
shareholders and their representatives for their constructive
engagement in 2023 and I hope we can rely on your vote at the
2024 Annual General Meeting.
Andrea Jung
Chair of the Compensation Committee
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Directors’ Remuneration Policy 2024
Policy report
The following sets out our New Directors’ Remuneration Policy. It fundamentally continues our existing policy with some key
proposed updates to how the policy is implemented, which are discussed below.
The New Remuneration Policy will be presented for approval by shareholders at the 2024 AGM and, if approved, will apply to
payments made after that date and will replace the existing Remuneration Policy in its entirety. It is intended that the New
Remuneration Policy will apply for three years, although the Committee may seek approval for a new policy at an earlier
point if it is considered appropriate. The supporting information section provides the rationale for updates to the existing
remuneration policy where appropriate as well as some information as to any changes to our approach to implementation.
Remuneration payments and payments for loss of office to Directors can only be made if they are consistent with the
approved Remuneration Policy or if an amendment to that remuneration policy authorising the payment has been approved
by shareholders.
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 seniority within the Group and the
size and complexity of the role.
Operation
Set by the Board on the recommendation of the Committee and
generally reviewed once a year, with any changes usually effective from
1 January (although changes may be made at any other time if the
Committee considers that is appropriate).
Fixed pay is paid in cash and is generally paid monthly. Fixed pay is set
at an appropriate level to attract and retain Executive Directors of the
required calibre, taking into account:
■ our policy generally to pay total compensation at around the median
of an appropriate peer group of other global consumer companies of
a similar financial size and complexity to Unilever;(a)
■ the individual’s skills, experience and performance;
■ the size and complexity of the role;
■ individual’s time in role; and
■ pay and conditions across the wider organisation.
Performance measures
n/a
Opportunity
Any increases will normally be in line with or below the range of
increases awarded to other employees within the Group.
Increases may be above this level or applied more frequently in certain
circumstances, such as:
■ where there is, in the Committee’s opinion, a significant change in an
Executive Director’s scope or role;
■ where a new Executive Director has been appointed to the Board at a
rate lower than the typical market level for such a role and becomes
established in the role; and
■ where it is considered necessary to reflect significant changes in
market practice.
The maximum aggregate increase for the current Executive Directors
during the time in which this policy applies will be no higher than 25%
for each Director.
Supporting information
There are no material changes relative to the previous Remuneration
Policy.
The peer group used to benchmark pay has been updated to better
reflect the global footprint of the Group and to focus more narrowly on
consumer companies.
As previously communicated, the Committee has decided to freeze the
fixed pay of Hein Schumacher as the incoming CEO up to the end of
2025. The Committee will next review his fixed pay level in 2026.
(a)
The proposed remuneration peer group for 2024 includes Anheuser-Busch InBev, Beiersdorf, British American Tobacco, Coca-Cola, Colgate-Palmolive, Danone, Diageo,
Haleon, Heineken, Henkel, Kimberly-Clark, Kraft Heinz, L’Oréal, LVMH, Mondelēz, Nestlé, PepsiCo, Pernod Ricard, Procter and Gamble, and Reckitt Benckiser. The peer
group used for pay benchmarking purposes is reviewed regularly and companies are added and/or removed at the Committee’s discretion to ensure that it remains
appropriate.
Benefits
Purpose and link to strategy
Provides certain benefits on a cost-effective basis to aid attraction and
retention of Executive Directors.
Opportunity
Based on the cost to Unilever of providing the benefit and dependent
on individual circumstances.
Operation
Benefits include provision of death, disability and medical insurance
cover, Directors’ liability insurance and actual tax return preparation
costs. Other benefits may be provided in the future where it is
considered necessary by the Committee and/or required by legislation.
In the event that Unilever were to require an existing or new Executive
Director to relocate, Unilever may pay appropriate relocation
allowances for a specified time period of no more than three years. This
may cover costs such as (but not limited to) relocation, cost of living,
housing benefit, home leave, tax and social security equalisation and
education assistance.
Executive Directors are entitled to participate on the same terms as all
UK employees in the Unilever PLC Sharebuy Plan.
Relocation allowances – the level of such benefits would be set at an
appropriate level by the Committee, taking into account the
circumstances of the individual and typical market practice.
Awards under the all-employee Unilever PLC Sharebuy Plan may be up
to HMRC-approved limits. The only change in the value of the current
benefits (for single figure purposes) will reflect changes in the costs of
providing those benefits.
There is no separate benefit or allowance provided in respect of
pension which is deemed to be included in fixed pay.
Performance measures
n/a
Supporting information
There are no changes relative to the previous Remuneration Policy.
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Annual bonus
Purpose and link to strategy
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.
The ability to recognise performance through annual bonus enables
us to manage our cost base flexibly and react to events and market
circumstances.
Operation
Each year, the Executive Directors may have the opportunity to
participate in the annual bonus plan. The Executive Directors are set a
target opportunity that is assessed against the business performance
multiplier of up to 150% of target opportunity at the end of the year.
Directors are required to defer 50% of their bonus into shares or share
awards for three years. Deferred bonus awards can earn dividends or
dividend equivalents during the vesting period and may be satisfied in
cash and/or shares. Deferral may be effected under the Unilever Share
Plan 2017, or by such other method as the Committee determines.
Recovery, discretion, ultimate remedy, malus and claw-back provisions
apply (see details on page 121).
Opportunity
The maximum annual bonus opportunity under this Policy is 225% of
fixed pay.
The normal target bonus opportunity for the CEO is 150% of fixed pay,
and for the CFO is 120% of fixed pay. This results in normal maximums
of 225% and 180% respectively.
Achievement of threshold performance results in a payout of 0% of the
maximum opportunity.
Performance Share Plan (PSP)
Purpose and link to strategy
Incentivises delivery of long-term financial, strategic and operational
objectives of the Company and aligns the experience of shareholders
and the Executive Directors. Rewards performance of the Executive
Directors while controlling costs due to pre-determined performance
measures and a maximum outcome. Also acts as a retention tool given
PSP awards vest after three years.
Operation
Under the PSP, the Executive Directors are granted rights to receive free
shares on vesting (awards) which normally vest after three years, to the
extent performance conditions (see performance measures section on
the right) are achieved. Upon vesting, the Executive Directors have an
additional two-year retention period (during which shares cannot be
sold) to ensure there is a five-year duration between the grant of the
award and release of the shares.
Claw-back, malus, recovery, ultimate remedy and discretion provisions
apply (see details on page 121).
Opportunity
The maximum annual grant available under this Policy is 400% of
fixed pay.
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. 0% of the award will vest
for below threshold performance. The amount payable for threshold
performance will be disclosed for each metric in the relevant directors’
remuneration report.
Dividend equivalents may be earned (in cash or additional shares) on
the award when and to the extent that the award vests. Dividends or
dividend equivalents will also be payable in respect of dividends paid
during the retention period.
Performance measures
The business performance multiplier is based on a range of business
metrics set by the Committee on an annual basis to ensure that they
are appropriately stretching for the delivery of threshold, target and
maximum performance. These performance measures may include
underlying sales growth (USG), underlying operating profit (UOP)
growth (adjusted for restructuring costs for the Executive Directors)
and free cash flow (FCF), along with any other measures chosen by the
Committee, as appropriate. The Committee also sets the weightings of
the respective metrics on an annual basis.
The Committee has discretion to adjust the formulaic outcome of the
business performance multiplier, if it believes this better reflects the
underlying performance of Unilever. In any event, the overall business
performance multiplier will not exceed 150%. The use of any discretion
will be fully disclosed in the Directors’ remuneration report for the year
to which discretion relates.
The Committee may introduce non-financial measures in the future,
subject to a minimum of 70% of targets being financial in nature.
Performance is normally measured over the financial year.
Supporting information
There are no changes relative to the previous Remuneration Policy.
Performance measures for 2024 have been updated to replace
underlying operating margin (UOM) with UOP growth (adjusted for
restructuring costs for the Executive Directors).
The proposed changes to measures are to ensure we use the most
strategically aligned measures, see page 123.
Performance measures
The Committee sets performance measures for each PSP award. These
will be tested over the three financial years starting with the financial
year in which the award is granted.
The performance measures for the PSP grants in 2024 will be: USG (25%),
relative total shareholder return (TSR) (30%), average underlying return
on invested capital (ROIC) (30%), and Sustainability Progress Index (SPI)
(15%). The Committee retains the discretion to change these measures
and/or weighting for future grants, based on strategic priorities for
Unilever at that time.
The Committee will ensure that the targets set are appropriately
rigorous for the delivery of threshold, target and maximum
performance.
The Committee retains the discretion to adjust the formulaic outcome
of these performance measures to reflect its assessment of the
underlying long-term performance. The use of any discretion will be
fully disclosed and explained in the Directors’ remuneration report for
the year to which discretion relates.
Supporting information
There are no changes relative to the previous Remuneration Policy.
Performance measures for 2024 have been updated to replace %
Business Winning with USG and cumulative FCF with relative TSR.
The proposed changes to measures are to ensure we use the most
strategically aligned measures, see page 123.
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Claw-back, malus, recovery, ultimate remedy and discretion
Claw-back: Claw-back is the recovery of payments made under the annual bonus (including deferred bonus shares) or vested
Long-Term Incentive Plan (LTIP) awards. The Committee may decide to apply claw-back for up to three years from the payment
of bonus awards, and up to two years from vesting or the start of any retention period (which ever is later) for the LTIP awards,
in the event of:
■ a significant downward restatement of the financial results of Unilever;
■ error in calculation or misleading data; or
■ corporate failure.
Claw-back may apply to all or part of a participant’s payment or award and may be effected, among other means, by reducing
outstanding awards, or requiring the return of the net value of vested awards to Unilever.
Malus: Malus is the adjustment of bonus, unvested deferred bonus awards or unvested LTIP awards. The Committee may apply
malus to reduce an award or determine that it will not vest or only vest in part. Malus applies to deferred bonus awards during
the three-year deferral period and to unvested LTIP awards during the vesting period and retention period, in the event of:
■ a significant downward restatement of the financial results of Unilever;
■ gross misconduct or gross negligence;
■ material breach of Unilever’s Code of Business Principles or any of the Unilever Code Policies;
■ breach of restrictive covenants by which the individual has agreed to be bound, or conduct by the individual which results in
significant losses or serious reputation damage to Unilever; and
■ error in calculation or misleading data or corporate failure.
The annual bonus will also be subject to malus on the same grounds as apply for deferred bonus awards and unvested LTIP
awards. This power is an addition to the normal discretion to adjust awards and the additional sustainability test outlined in
the policy table.
Recovery: Recovery applies to payments of variable remuneration which have been made in error as a result of a required
accounting restatement.
The Committee may require repayment of any amount of erroneously awarded variable remuneration in the event Unilever is
required to prepare an accounting restatement due to material non-compliance with a financial reporting requirement under
securities law in the United States. Any recovery will be in accordance with the Unilever Recovery Policy.
Ultimate remedy: LTIP awards are subject to ultimate remedy. Upon vesting of an award, the Committee shall have the
discretionary power to adjust the value of the award if the award, in the Committee’s opinion taking all circumstances into
account, produces an unfair result. In exercising this discretion, the Committee may take into account Unilever’s performance
against non-financial measures.
These powers are in addition to the normal discretion to adjust awards.
Ultimate remedy/malus and claw-back will not apply to an award which has been exchanged following a change of control and
claw-back will not apply where an award vests on a change of control.
Committee discretion to amend targets/measures: For LTIP awards and annual bonus, the Committee may change a
performance measure or target (including replacing a measure) in accordance with the award’s terms or if anything happens
which causes the Committee reasonably to consider it appropriate to do so. The Committee may also adjust the number or class
of shares subject to MCIP, PSP and deferred bonus awards if certain corporate events (e.g. rights issues) occur.
The Committee will continue to review targets on all unvested awards in the event of any material acquisitions or disposals
that were not included in the financial plan, or were not anticipated at the time of target setting. The Committee may make
adjustments if deemed appropriate to ensure that all targets remain relevant and equally stretching in light of any M&A activity,
other corporate events, or any other event that the Committee considers to be material, that was not foreseen at the time of
target setting.
Legacy arrangements
For the duration of this New Remuneration Policy, entitlements arising before the adoption of this New Remuneration Policy will
continue to be honoured in line with the approved remuneration policy under which they were granted, or their contractual
terms.
Awards granted under a previous remuneration policy will continue to operate under the terms of that policy and the relevant
plan rules. Further details of the terms of the awards made are included in the Directors’ remuneration reports for their
respective years. This provision will cease to apply once all of these awards have vested, been exercised or been forfeited as
appropriate, as per the relevant policy and plan rules. Additional details are set out below.
The Committee reserves the right to make any remuneration payments and payments for loss of office (including exercising any
relevant discretions) notwithstanding that they are not in line with the New Remuneration Policy where the terms of the payment
were agreed before the New Remuneration Policy came into effect or at a time when the relevant individual was not a Director of
Unilever and, in the opinion of the Committee, the payment was not in consideration for the individual becoming a Director of
Unilever. For these purposes, ‘payments’ include the Committee satisfying awards of variable remuneration and, in relation to an
award over shares, the terms of the payment are ‘agreed’ at the time the award is granted.
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Remuneration scenarios: our emphasis on performance-related pay
It is Unilever’s policy that the total remuneration package for the Executive Directors should be competitive with other global
companies and that a significant proportion should be performance related.
For the remuneration scenarios below, the maximum and target pay opportunities have been chosen to be consistent with
the current levels for the Executive Directors. In reviewing the appropriate level of pay opportunity for the Executive Directors, the
Committee considers internal and external comparators. Although pay is not driven by benchmarking, the Committee is aware
that pay needs to be within a reasonable range of competitive practice. The Committee notes that total target pay is slightly
below median for the CEO and incoming CFO for the 2024 benchmark group proposed by the Committee(a).
The Committee typically reviews, on at least an annual basis, the impact of different performance scenarios on the potential
reward opportunity and payouts to be received by the Executive Directors and the alignment of these with the returns that might
be received by shareholders. The Committee believes that the level of remuneration that can be delivered in the various
scenarios is appropriate for the level of performance delivered and the value that would be delivered to shareholders. The charts
below show hypothetical values of the remuneration package for the Executive Directors in the first full year of the New
Remuneration Policy under below threshold, target and maximum performance scenarios.
Details of fixed elements of remuneration for CEO and CFO and assumptions for scenario charts
Fixed remuneration
Assumptions as follows (for actual Executive Director pay details, please see the Directors’
Remuneration Report below):
■ Fixed pay for CEO effective from 1 January 2024 = €1,850,000.
■ Fixed pay for CFO effective from 1 January 2024 = €1,175,000.
■ Benefits assumed to be around €310,000 for CEO and €300,000 for CFO.
Variable remuneration
Below threshold
On target
Maximum
Maximum with 50% share price increase
Notes to variable remuneration
No 2024 annual bonus payout and no vesting
under the PSP.
Target payout of the 2024 annual bonus (150% of
fixed pay for the CEO and 120% of fixed pay for the
CFO). 50% of the bonus would be deferred for
three years.
Target vesting of 2024 awards under the PSP
(200% of fixed pay for the CEO and 160% of fixed
pay for the CFO).
Maximum payout of the 2024 annual bonus (225%
of fixed pay for the CEO and 180% of fixed pay for
the CFO). 50% of the bonus would be deferred for
three years.
Maximum vesting under 2024 awards under the
PSP (400% of fixed pay for the CEO and 320% of
fixed pay for the CFO).
As per maximum above, and in addition shows the
impact of a share price increase of 50% from the
date of grant to the date of vesting of the PSP
award.
Dividends, dividend equivalents and (except as
described above) share price movements are
ignored for the purposes of the illustrations
above.
(a)
Proposed remuneration peer group for 2024 includes Anheuser-Busch InBev, Beiersdorf, British American Tobacco, Coca-Cola, Colgate-Palmolive, Danone, Diageo,
Haleon, Heineken, Henkel, Kimberly-Clark, Kraft Heinz, L’Oréal, LVMH, Mondelēz, Nestlé, PepsiCo, Pernod Ricard, Procter and Gamble, and Reckitt Benckiser.
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Approach to target setting
Performance measures are selected to align with Unilever’s short-term performance targets and long-term business strategy
objectives. Unilever’s primary business objective is to create value in a sustainable way. Performance measures focus
management on the delivery of a combination of top-line revenue growth and bottom-line profit growth that Unilever believes
will build shareholder value over the longer term and that will benefit all of our stakeholders.
The measures chosen for the incentives will support the delivery of this objective, with distinct measures for each of the short-
and longer-term incentive programmes.
The Committee sets performance targets for incentive plans, taking into account internal budgets, business priorities and
external forecasts so that the targets are sufficiently stretching. Good performance results in target payout while maximum
payout is only achieved for delivering exceptional performance.
The following sets out the performance measures for short- and long-term incentive plans to be awarded in 2024, as well as the
business performance and the behaviours that they drive.
2024 performance measures and the link to strategy
Incentive plan
Performance measure
Link to strategy
Short-term: Annual Bonus Underlying sales growth (USG) at constant FX
rates (40%)
Clear, simple and well-understood measure supporting
the achievement of Unilever’s growth ambition.
Underlying operating profit (UOP) growth at
current FX rates (30%) (adjusted for restructuring
costs for annual bonus for the Executive Directors)
Provides a focus on absolute profitability as an indicator of
driving shareholder value.
Free cash flow (FCF) at current FX rates (30%)
Provides clear focus on the achievement of Unilever’s cash
generation ambition.
Long-term: PSP
Underlying sales growth (USG) at constant FX
rates (25%)
The primary driver of value creation in our multi-year
financial growth model.
Relative total shareholder return (TSR) versus a
bespoke peer group(a) (30%)
Average underlying return on invested capital
(ROIC) (30%)
Unilever Sustainability Progress Index (SPI) (15%)
USG is the principal growth metric in the long-term
incentive programme as delivering consistently higher
growth will be a key unlocker of shareholder value. While
the USG measure in the annual bonus ensures focus on in-
year delivery, the PSP measure focuses on cumulative and
sustained importance. To avoid a dependency or focus on
a single metric, the weightings have been rebalanced.
Aligns remuneration with shareholders' experience and
allows us to measure relative performance. The proposed
vesting schedule is in line with UK norms, with threshold
vesting (50% of par) for median performance (Unilever
ranked 10th), rising to maximum vesting (200% of par) for
upper quartile performance (Unilever ranked 5th)
Supports disciplined investment of capital within the
business and encourages acquisitions which create long-
term value (an especially relevant measure for members
of the Unilever Leadership Executive (ULE) who make
investment decisions).
Unilever remains committed to demonstrating that
our purpose-led, future-fit strategy drives superior
performance, which protects our shareholders, people,
consumers, customers, suppliers and business partners,
and planet and society. To ensure focused progress on
key areas in relation to SPI, the Corporate Responsibility
Committee and Compensation Committee agree a
number of key performance indicators (KPIs) to assess
progress towards sustainability goals (see page 131).
These KPIs illustrate how Unilever aims to address a
number of its principal risks such as climate change and
plastic packaging (see our risks on page 72 and 73).
For the 2024 PSP award, progress will be measured
against one social and three environmental KPIs and
targets. We are moving from annualised SPI targets,
disclosed retrospectively, to SPI targets set over a
three-year period and disclosed prospectively, to align
with the other PSP performance measures.
(a)
The proposed TSR peer group for 2024 includes Beiersdorf, Church & Dwight, Coca-Cola, Colgate-Palmolive, Danone, Estée Lauder, General Mills, Haleon, Henkel,
Kenvue, Kimberly-Clark, Kraft Heinz, L’Oréal, Mondelēz, Nestlé, PepsiCo, Procter and Gamble, and Reckitt Benckiser.
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Application beyond the Board
Remuneration arrangements are determined throughout the Group based on the same principle: that reward should support
our business strategy and should be sufficient to attract and retain high-performing individuals without paying more than is
necessary. Unilever is a global organisation with employees at a number of different levels of seniority and in a number of
different countries and, while this principle underpins all reward arrangements, the way it is implemented varies by geography
and level.
Strategic Business Objectives (SBOs) form an additional performance measure for annual bonus for ULE members, resulting in
weightings of 40% USG, 20% UOP growth, 20% FCF and 20% SBOs for 2024. Also, for Business Group (BG) Presidents on the ULE,
annual bonus is assessed on 75% BG performance and 25% Unilever Group performance.
In principle, all our managers participate in the same Unilever annual bonus scheme with generally the same performance
measures and structure. Senior managers participate in the long-term PSP plan with a restricted share plan being operated for
lower levels of management. Wherever possible, all other employees have the opportunity to participate in the global share
purchase plan called ‘SHARES’, which is offered in more than 100 countries.
Through these initiatives, we continue to encourage all our employees to adopt an owner’s mindset with the goal of achieving
our growth ambition, so they can share in the future long-term success of Unilever.
Stakeholders’ considerations
Guided by our purpose-led and future-fit business model, the Committee has applied a multi-stakeholder approach in
reviewing the current reward framework in view of the 2024 policy renewal. The Committee has therefore engaged with
various stakeholders, both internally and externally as set out below.
Consideration of conditions elsewhere in the Group
When determining the pay of the Executive Directors, the Committee considers the pay arrangements for other employees
in the Group, including considering the average global pay review budget for the management population, to ensure that
remuneration arrangements for the Executive Directors remain reasonable. Unilever takes the views of its employees seriously
and on an ongoing basis we conduct the ‘Rate-My-Reward’ survey to gauge the views of employees on the different parts of
their reward package.
In establishing its reward framework, Unilever sought feedback from all management-level employees on the current
remuneration structure of fixed pay, benefits, annual bonus and PSP. Where appropriate, we have also engaged with employee
representative groups.
Fairness in the workplace is a core pillar of our sustainability goals and incorporates our Framework for Fair Compensation.
As part of our Framework’s living wage element, we are committed to pay a living wage to all our direct employees, which we
achieved in 2020.
The Committee already upholds its obligation under Section 172 of the UK Companies Act 2006 (see pages 91 to 92) to consider
the impact of what we do on our multiple stakeholders. These considerations shape the way the Committee looks at pay and
sets pay rates for our Executive and Non-Executive Directors relative to our wider workforce. We will continue to advance these
initiatives over the years ahead to enhance the livelihoods of all our employees. For more information visit: www.unilever.com/
planet-and-society
Consideration of shareholder views
The Committee takes the views of shareholders seriously. We maintain an open and regular dialogue with our shareholders
on remuneration matters, including consulting with our largest investors and shareholder representative bodies, when we are
considering making material changes to our remuneration policy. Accordingly, shareholders have been consulted extensively
and their views have been influential in shaping this New Remuneration Policy. Their feedback informed our proposals in relation
to the composition of our remuneration and TSR benchmarking peer groups and the performance measures and weightings for
annual bonus and PSP, as well as our decision to leave the fundamental structure and quantum of our Remuneration Policy
unchanged.
Minimum shareholding requirement
The remuneration arrangements applicable to our Executive Directors require them to build and retain a personal shareholding
in Unilever (within five years from the date of appointment with extra time granted if requirements increase significantly) to align
their interests with those of Unilever’s long-term shareholders. The current requirement is 500% fixed pay for the CEO and 400%
fixed pay for the CFO. All shares beneficially owned and any awards not subject to performance conditions (but, for example,
subject to retention or deferral periods) count towards the shareholding requirement (on an estimated net of tax basis if tax is
expected to be payable). Incoming Executive Directors will be required to retain all shares vesting from any share awards (net of
any sales to cover tax) until their minimum shareholding requirements have been met in full.
Any Executive Director who leaves employment is required to maintain 100% of their minimum shareholding requirement for
two years after leaving. These shares will be held in the Company nominee vested accounts. If the leaver has not yet met
their shareholding requirements on departure, they will be required to retain the shares they do own up to these limits. This
requirement can be waived in certain exceptional personal circumstances (e.g. death, disability, ill health).
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Remuneration Policy for new hires
Area
Overall
Fixed pay
Benefits
Incentive awards
Buy-out awards
Policy and operation
The Committee will pay new Executive Directors in accordance with the approved remuneration policy
and all its elements as set out above. The terms of service contracts will not overall be more generous
than those of the current CEO and CFO summarised below in the ‘service contracts’ paragraph. The
ongoing annual remuneration arrangements for new Executive Directors will therefore comprise fixed
pay, benefits, annual bonus and PSP. For internal promotions, any variable remuneration element
awarded in respect of a prior role may be paid out according to its original terms.
Fixed pay would be set at an appropriate level to attract and retain Executive Directors of the required
calibre, in line with our remuneration policy.
Benefits provision would be in line with the approved relevant remuneration policy. Where
appropriate, the Executive Director may also receive relocation benefits or other benefits reflective
of normal market practice in the territory in which the Executive Director is employed. In addition, the
Committee may agree that Unilever will pay certain allowances linked to repatriation on termination
of employment.
Incentive awards would be made under the annual bonus and PSP in line with the relevant
remuneration policy and off-cycle PSP awards may be made on joining for the year of joining. All
incentive awards are subject to the normal maximum as set out in the relevant remuneration policy,
excluding any buy-out awards (see below).
The Committee may grant awards to compensate Executive Directors hired from outside Unilever
for any awards they lose by leaving previous employers broadly on a like-for-like basis. Incoming
Executive Directors will be required to retain all shares vesting from any share awards until their
minimum shareholding requirements have been met in full.
If a buy-out award is required, the Committee would aim to reflect the nature, timing, and value of
awards forgone in any replacement awards. Awards may be made in cash, shares or any other method
as deemed appropriate by the Committee. Where possible, share awards will be replaced with share
awards. Where performance measures applied to the forfeited awards, performance measures will be
applied to the replacement award or the award size will be discounted accordingly. In establishing the
appropriate value of any buy-out, the Committee would also take into account the value of the other
elements of the new remuneration package. The Committee would aim to minimise the cost to
Unilever, although buy-out awards are not subject to a formal maximum. Any awards would be
broadly no more valuable than those being replaced.
Service contracts
Policy in relation to Executive Director service contracts and payments in the event of loss of office
Service contracts and notice period Current Executive Directors’ service contracts are not for a fixed duration but are terminable upon
notice (12 months’ notice from Unilever, six months’ notice from the Executive Director), and are
available for shareholders to view at the AGM or on request from the Group Secretary. Starting dates
of the service contracts for the current CEO and CFO:
■ CEO: 1 June 2023 (signed on 29 January 2023); and
■ CFO: 1 January 2024 (signed on 24 October 2023).
Termination payments
A payment in lieu of notice can be made, to the value of no more than 12 months’ fixed pay and other
benefits (unless dictated by applicable law).
Other elements
■ The Executive Directors may, at the discretion of the Board, remain eligible to receive an annual
bonus for the financial year in which they cease employment. Such annual bonus will be determined
by the Committee taking into account time in employment and performance.
■ Treatment of share awards is as set out in the section on leaver provisions below.
■ Any outstanding all-employee share arrangements will be treated in accordance with HMRC-
approved terms.
■ Other payments, such as legal or other professional fees, repatriation or relocation costs and/or
outplacement fees, may be paid if it is considered appropriate. Additional payments may be
permitted at the proposal of the Committee if the Committee considers not allowing such a
payment would be manifestly unreasonable given the circumstances.
■ The Committee reserves the discretion to approve gifts to Executive Directors who are retiring or
who are considered by the Board to be otherwise leaving in good standing (e.g. those leaving
office for any reason other than termination by Unilever or in the context of misconduct). If the
value of any gift for any one Executive Director exceeds £5,000, it will be disclosed in the relevant
Directors’ remuneration report. Where a tax liability is incurred on any such a gift, the Committee
has the discretion to approve the payment of such liability on behalf of the Executive Director in
addition to the value of the gift.
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Leaver provisions in share plan rules
PSP awards
Leavers in other
circumstances
Change of control
Awards will normally lapse upon
termination.
Awards will vest based on
performance at the time of the
change of control and the Board,
on the proposal of the Committee,
have the discretion to pro-rate
for time.
Alternatively, Executive Directors
may be required to exchange the
awards for equivalent awards over
shares in the acquiring company.
The retention period of a PSP
award will end on a change
of control.
‘Good leavers’ as determined
by the Committee in
accordance with the plan
rules*
Awards will normally vest
following the end of the original
performance period, taking into
account performance and (unless
the Board on the proposal of the
Committee determine otherwise)
pro-rated for time in employment.
Alternatively, the Board may
determine that awards shall
vest upon termination based on
performance at that time and
pro-rated for time in employment
(unless the Board on the proposal
of the Committee determine
otherwise). If an Executive Director
dies or leaves due to ill health,
injury or disability, awards will
vest at the time of death or leaving
at the target level of vesting (in
case of death pro-rated for time
in employment if the Director had
previously left as a good leaver).
Deferred bonus awards
Unvested deferred bonus awards will continue in effect and vest on
the normal timescale unless the Executive Director is terminated for
misconduct or breach of the terms of their employment, unless the
Committee decides otherwise.
Unvested deferred bonus awards
vest in full.
* An Executive Director will usually be treated as a good leaver if they leave due to ill health, injury or disability, retirement with Unilever’s agreement, redundancy, or
death in service. The Board may decide to treat an Executive Director who leaves in other circumstances as a good leaver. An Executive Director will not be treated as
a good leaver if they choose to leave for another job elsewhere unless the Board determines otherwise, if they are summarily dismissed or leave because of concerns
about performance. In deciding whether or not to treat an Executive Director as a good leaver, the Board will have regard to their performance in the role.
If Unilever is affected by a demerger, special distribution or other transaction which may affect the value of awards, the Committee may allow PSP awards and/or
deferred bonus awards to vest early over such number of shares as it shall determine (to the extent any performance measures have been met) and awards may be
pro-rated to reflect the acceleration of vesting at the Committee’s discretion.
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Non-Executive Directors
Key aspects of Unilever’s 2024 fee policy for the Non-Executive Directors
Approach to setting fees
The Non-Executive Directors receive annual fees from Unilever. The Board determine Non-Executive
Director fee levels, which are limited to the aggregate amount permitted by the Company’s articles of
association, as approved by shareholders from time to time (which is currently €5 million per year).
Operation
Unilever’s policy is to set fees at a level which is sufficient to attract, motivate and retain high-class talent
of the calibre required to direct the strategy of the business without paying more than necessary. The fees
are set taking into account:
■ the commitment and contribution expected by the Group;
■ fee levels paid in other global companies; and
■ that fees are paid in cash.
Unilever applies a modular fee structure for the Non-Executive Directors to ensure we fairly reflect the
roles and responsibilities of chair and committee membership. Our basic philosophy is to pay the Chair
an all- inclusive fee. Other Board members receive a basic fee and additional fees for being Senior
Independent Director and chairing or membership of various committees. The Board may decide to pay
fees in any other currency based on such foreign exchange rates as the Board shall determine, provided
total Non-Executive Director fees stay within the annual limits as approved by shareholders from time
to time. The 2024 fee structure can be found in the Directors’ Remuneration Report on page 145. The fee
structure may vary from year to year within the terms of this Remuneration Policy.
Fees are normally reviewed annually but may be reviewed less frequently.
Additional allowances are made available to the Non-Executive Directors where appropriate, to reflect
any additional time commitment or duties.
Other items
The Non-Executive Directors are encouraged to build up a personal shareholding of at least 100% of their
total annual fees over the five years from appointment.
The Non-Executive Directors are not entitled to participate in any of the Group’s incentive plans.
All reasonable travel and other expenses incurred by the Non-Executive Directors in the course of
performing their duties are considered to be business expenses and are reimbursed together with any tax
payable. The Non-Executive Directors also receive expenses relating to the attendance of the Director’s
spouse or partner, when they are invited by Unilever. Other benefits or additional payments may be
provided in the future if, in the view of the Board, this is considered appropriate. Such benefits and/or
payments would be within the total annual limits as approved by shareholders as described above.
The Committee reserves the discretion to approve gifts to Non-Executive Directors who are retiring or who
are considered by the Board to be otherwise leaving in good standing (e.g. those leaving office for any
reason other than termination by Unilever or in the context of misconduct). If the value of any gift for any
one Non-Executive Director exceeds £5,000, it will be disclosed in the relevant Directors’ remuneration
report. Where a tax liability is incurred on any such gift, the Committee has the discretion to approve the
payment of such liability on behalf of the Non-Executive Director in addition to the value of the gift.
Remuneration Policy for new Non-Executive Director hires
In the event of hiring a new Non-Executive Director, the Committee will align the remuneration package with the New
Remuneration Policy as set out above.
Non-Executive Directors’ letters of appointment
The terms of engagement of the Non-Executive Directors are set out in letters of appointment which each Non-Executive Director
signs upon appointment. The Non-Executive Directors are currently appointed for a one-year term, subject to satisfactory
performance, re-nomination at the discretion of the Board on the recommendation of the Nominating and Corporate
Governance Committee and re-election at forthcoming annual shareholder meetings. It is Unilever’s expectation that all
Non-Executive Directors serve for a minimum of three years. The letters of appointment allow for Unilever to terminate a Non-
Executive Director’s appointment in cases of gross misconduct, failure to perform their duties competently, conduct bringing
Unilever into disrepute, bankruptcy or where the Non-Executive Director is prevented from occupying such a position by law.
The letters do not contain provision for notice periods or compensation if the Non-Executive Directors’ appointments are
terminated by Unilever. The Non-Executive Directors may terminate their engagement upon three months’ notice. Except in
exceptional circumstances, the Board will not propose Non-Executive Directors for re-nomination when nine years have elapsed
since the date of their appointment. Letters of appointment are available for inspection on request from the Group Secretary.
In considering appointments to the Board, the Directors and Unilever give due consideration to the time commitment required
to fulfil the role appropriately.
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Committee members and attendance
Andrea Jung Chair
Nils Andersen
Judith Hartmann (member since 3 May 2023)
Ruby Lu (member until 3 May 2023)
Ian Meakins (member since 1 December 2023)
Nelson Peltz
Attendance
6/6
6/6
2/2
4/4
0/0
6/6
This table shows the membership of the Compensation
Committee together with their attendance at meetings during
2023. Attendance is expressed as the number of meetings
attended out of the number eligible to attend.
The Committee is comprised of five Non-Executive Directors,
including Andrea Jung as the Chair. Ruby Lu stepped down
from the Committee at the AGM in May 2023 and was replaced
by Judith Hartmann. Ian Meakins joined the Committee on
1 December 2023, although there were not any Committee
meetings between then and 31 December 2023. Ian attended
a Committee meeting in November 2023 to observe as part of
his onboarding. Nils Andersen and Judith Hartmann will step
down from the Committee when they retire from Unilever's
Board at the AGM in May 2024.
Other attendees at Committee meetings in 2023 included the
CEO, Chief Legal Officer & Group Secretary, Chief Counsel
Executive Compensation & Employment, Chief Employment
Law Counsel, Chief People & Transformation Officer, Head of
Expertise & Innovation, Chief R&D Officer, Chief Sustainability
Officer, Global Head of Sustainable Business Performance &
Reporting, Global Head of Sustainability Compass & Markets,
Deputy Chief Financial Officer & Controller, and advisers to the
Committee (see below).
No individual Executive Director was present when their own
remuneration was being determined to ensure there was no
conflict of interest. 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.
Role of the Committee
The Committee reviews and makes a proposal to the Board
on the remuneration of the Executive and Non-Executive
Directors. It also has responsibility for the design and terms of
Executive and all employee share-based incentive plans and
the remuneration policy for the ULE and senior managers. The
Committee is also involved in the performance evaluation and
remuneration of the ULE.
The Committee's terms of reference are contained within
'The Governance of Unilever' which is available on our website.
As part of the Board evaluation carried out in 2023, the Board
evaluated the performance of the Committee. The Committee
also carried out an assessment of its own performance in
2023. Overall, the Committee members concluded that the
Committee is performing effectively.
Activities of the Committee
During 2023, the Committee met six times and its activities
included:
■ determining the 2022 annual bonus outcome;
■ determining the vesting of the MCIP awards for the CEO,
CFO and the ULE;
■ consultation with investors in respect of the directors'
remuneration report vote at the 2023 AGM and renewal of
the Directors' Remuneration Policy;
■ considering and approving the proposed New Remuneration
Policy;
■ setting the 2023 annual bonus and Performance Share Plan
(PSP) 2023-2025 performance measures and targets;
■ setting fixed pay for the CEO and CFO;
■ tracking external developments and assessing their impact
on Unilever’s Remuneration Policy and its implementation,
in particular in the context of geopolitical tensions, inflation,
and regulatory requirements;
■ retirement of CFO and CFO succession planning;
■ approving introduction of a Recovery Policy to comply with
New York Stock Exchange listing requirements;
■ reviewing pay gap data;
■ considering progress on the living wage commitment that
is now extended to the wider supply chain; and
■ assessing SPI performance outcomes and setting measures
and targets along with the Corporate Responsibility
Committee (CRC).
Advisers
While it is the Committee’s responsibility to exercise
independent judgement, the Committee requests 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 LLP (PwC) was
appointed by the Committee to provide independent advice
on various matters it considered. During 2023, the wider PwC
network firms have also provided other tax and consultancy
services to Unilever including tax compliance and other tax-
related services, cyber security services, internal audit advice,
secondees, third-party risk and compliance advice, and
merger and acquisition 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 at
www.remunerationconsultantsgroup.com (Code of Conduct:
Executive Remuneration Consulting).
The Committee is satisfied that the advice of the PwC
engagement partner and team, which provide remuneration
advice to the Committee, was objective and independent. They
do not have connections with Unilever 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 2023 were £277,557. 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.
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Annual report on remuneration
This section sets out how the Remuneration Policy (which
was approved by shareholders at the AGM on 5 May 2021
and is available on our website) was implemented in 2023.
The Remuneration Policy operated as intended in 2023 in
terms of company performance, quantum and application of
discretion, as set out in the Chair letter on page 116. Changes
to the implementation of the policy from 2024 are set out in
the proposed New Remuneration Policy on pages 119 to 127
and will be implemented if it receives shareholder approval
at the 2024 AGM.
Unilever's remuneration arrangements are aligned to its
culture of rewarding performance through annual bonus and
long-term incentive performance measures and remuneration
is determined throughout Unilever based on the same
principle as for the Executive Directors, as set out in the
Remuneration Policy. Remuneration is controlled with pay at
risk determined according to pre-determined performance
measures with a maximum outcome. This results in
predictability in the management of risks and costs. Executive
remuneration is proportionate given the financial size and
complexity of Unilever as determined through benchmarking
with our peers. Unilever's arrangements provide for clarity and
simplicity by consisting of fixed pay, benefits, annual bonus
and long-term incentives, which are transparently detailed
in the Remuneration Policy and the relevant directors'
remuneration report.
Implementation of the Remuneration Policy
for Executive Directors
If approved by shareholders, Unilever's proposed New
Remuneration Policy, as set out below, will be implemented
with effect from the 2024 AGM. If the proposed New
Remuneration Policy is not approved, Unilever's existing
Remuneration Policy will continue to apply.
Alan Jope is treated as CEO from 1 January to 30 June 2023
and Hein Schumacher is treated as CEO from 1 June to
31 December 2023, given he performed the role of CEO
Designate from 1 June 2023 and became CEO on 1 July 2023.
Remuneration for the CFO for 2023 refers to Graeme Pitkethly.
Please see page 144 for remuneration details for Fernando
Fernandez as the incoming CFO.
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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 118.
Implementation in 2023
Planned for 2024
Annual Bonus
Purpose and link to strategy
■ CEO (Alan Jope): €1,560,780 (effective 1 January 2023)
■ CEO (Hein Schumacher): €1,850,000 (pro rata from 1 June 2023)
■ CFO (Graeme Pitkethly): €1,246,262 (effective 1 January 2023)
Effective from 1 January 2024:
■ CEO (Hein Schumacher): €1,850,000 (no change)
■ CFO (Fernando Fernandez): €1,175,000 (reduction of 5.72% compared to Graeme Pitkethly)
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.
50% of the net annual bonus is deferred into shares or share awards to link to long-term performance.
At a glance
■ 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.
■ Requirement to defer 50% net annual bonus into shares, which vest after 3 years.
■ The annual bonus is subject to claw-back, malus, recovery, ultimate remedy and discretion provisions, as set
Implementation in 2023
Planned for 2024
out in the Remuneration Policy.
Implemented in line with the Remuneration Policy:
■ Underlying sales growth: 50%
■ Underlying operating margin improvement: 25%
■ Free cash flow: 25%
Under the proposed New Remuneration Policy:
■ Underlying sales growth: 40%
■ Underlying operating profit growth adjusted for restructuring costs: 30%
■ Free cash flow: 30%
Long-Term Incentive: Performance Share Plan (PSP)
Purpose and link to strategy
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
■ PSP awards normally vest after three years, to the extent performance conditions are achieved.
■ 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.
■ The PSP is subject to claw-back, malus, recovery, ultimate remedy and discretion provisions, as set out in the
Implementation in 2023
Planned for 2024
Remuneration Policy.
Implemented in line with the Remuneration Policy:
■ % Business winning: 25%
■ Cumulative free cash flow: 25%
■ Underlying return on invested capital: 25%
■ Sustainability Progress Index: 25%
Under the proposed New Remuneration Policy:
■ Underlying sales growth: 25%
■ Relative total shareholder return versus bespoke peer group(a): 30%
■ Underlying return on invested capital: 30%
■ Sustainability Progress Index: 15%
(a)
The proposed TSR peer group for 2024 includes Beiersdorf, Church & Dwight, Coca-Cola, Colgate-Palmolive, Danone, Estée Lauder, General Mills, Haleon, Henkel,
Kenvue, Kimberly-Clark, Kraft Heinz, L’Oréal, Mondelēz, Nestlé, PepsiCo, Procter and Gamble, and Reckitt Benckiser.
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Elements of remuneration continued
Planned for 2024
The performance conditions and target ranges for 2024 awards under the PSP will be as follows:
PSP 2024 – 2026 awards
Underlying sales growth(a)
Relative total shareholder
return(a)
Underlying return on invested
capital (average)
Sustainability progress index
(Committee assessment of SPI
progress)
Weighting
Threshold
Max
25%
30%
30%
15%
3%
50%
6%
200%
10th (median)
50%
5th (upper quartile)
200%
15.5%
0%
0%
0%
17.5%
200%
200%
200%
PSP awards (based on target performance) to be made on 8 March 2024 as follows:
■ CEO 200% Fixed Pay: €3,700,000.
■ CFO 160% Fixed Pay: €1,880,000.
USG is the primary driver of value creation in our multi-year financial growth model. As such, the Committee
believes that the target range of a threshold of 3% and a maximum of 6% to be appropriate. The Committee
have set the payout for threshold at 50% of par for USG to reflect the level of stretch required, and that no
payout is considered appropriate for performance below this level.
Relative TSR aligns remuneration with shareholders' experience and allows us to measure relative performance.
The proposed vesting schedule is in line with UK norms, with threshold vesting (50% of par) for median
performance (Unilever ranked 10th), rising to maximum vesting (200% of par) for upper quartile performance
(Unilever ranked 5th). The TSR peer group consists of: Beiersdorf, Church & Dwight, Coca-Cola, Colgate-
Palmolive, Danone, Estée Lauder, General Mills, Haleon, Henkel, Kenvue, Kimberly-Clark, Kraft Heinz, L’Oréal,
Mondelēz, Nestlé, PepsiCo, Procter and Gamble, and Reckitt Benckiser.
Underlying 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. Underlying ROIC will be calculated over a three-year average. The target
range of a threshold of 15.5% and maximum of 17.5% expresses our commitment to deliver underlying ROIC at a
level of mid to high teens, whilst continuing to reshape our portfolio through acquisitions and disposals.
The SPI is an assessment made jointly by the CRC and the Committee. The 2024-26 SPI will be evaluated on
progress against four core metrics, rather than the eight metrics used for the previous PSP schemes. Targets
will be set for a three-year period and disclosed prospectively. KPIs will be subject to external review, or internal
review where this is not possible. Each KPI will be subject to formulaic assessment, whilst retaining the ability
to make a rounded assessment of overall progress. The SPI KPIs for the 2024-2026 PSP will be as follows with
a threshold of 0% and maximum of 200%:
(a) Climate: The percentage change in greenhouse gas emissions from energy and refrigerant use in our
operations, in comparison to the same period in 2015. Target: 80% (threshold 79%, maximum 81%).
(b) Plastics: The percentage change in the total tonnes of virgin plastics used in the packaging for our
products, in comparison to the same period in 2019. Target: 30% (threshold 28%, maximum 32%).
(c) Nature: The total hectares of land, forests, and oceans (as measured by ocean floor area) that Unilever
programmes help protect and/or regenerate. Target: 1 million hectares (threshold 900,000 hectares,
maximum 1.1 million hectares).
(d) Living wage: the percentage of our procurement spend which is with suppliers who have signed the Living
Wage Promise. Target: 50% (threshold 45%, maximum 55%).
For in-flight PSP schemes (PSP 2022-2024 and PSP 2023-2025), there will continue to be annual SPI KPIs and
targets with outcomes based on in-year results. The overall outcome will be an average of each annual score,
and disclosed in the directors' remuneration reports for 2024 and 2025 as applicable.
(a)
There is zero payout below threshold.
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.
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Claw-back, malus, recovery, ultimate remedy and discretion
Variable remuneration is subject to claw-back, malus, recovery, ultimate remedy and discretion, as explained in the
Remuneration Policy.
In 2023, the Committee did not seek to exercise any of these rights (nor was it required to) in relation to the variable
remuneration of current or former Executive Directors or members of the ULE.
Single figure of remuneration and implementation of the Remuneration Policy in 2023
for Executive Directors (Audited)
The table below shows a single figure of remuneration for each of our Executive Directors for the years 2022 and 2023, where
applicable. Note, Alan Jope is treated as CEO from 1 January to 30 June 2023 and Hein Schumacher is treated as CEO from 1 June
to 31 December 2023, given he performed the role of CEO Designate from 1 June 2023 and became CEO on 1 July 2023. Where
one single figure of remuneration is required for the CEO for 2023, for example for pay ratio comparison, the total single figure
for Alan Jope and Hein Schumacher, as set out below, are totalled together.
Hein Schumacher CEO
(€’000)
Proportion
of Fixed
and
Variable
Rem
2023 (1
June to 31
December)
Proportion
of Fixed
and
Variable
Rem
2023 (1
January to
30 June)
780
44
824
35.6%
38.0%
1,346
—
—
—
1,079
311
1,390
1,862
—
—
648
Alan Jope CEO (€’000)
Graeme Pitkethly CFO (€’000)
Proportion
of Fixed
and
Variable
Rem
30.8%
2022
1,561
102
1,663
3,114
618
—
—
Proportion
of Fixed
and
Variable
Rem
24.8%
2023
1,246
63
1,309
1,720
1,107
1,150
Proportion
of Fixed
and
Variable
Rem
32.1%
2022
1,176
48
1,223
1,876
708
—
—
2,510
64.4%
1,346
62.0%
3,732
69.2%
3,977
75.2%
2,585
67.9%
3,900
2,170
5,395
5,286
3,808
(A) Total fixed pay(a)
(B) Other benefits(b)
Fixed pay & benefits
subtotal
(C) Annual bonus(c)
(D) LTI: MCIP match shares(d)
(D) LTI: PSP(e)
(D) LTI: Buy-out awards(f)
Variable Remuneration
subtotal
Total Remuneration
(A+B+C+D)(g)
(a)
(b)
(c)
Fixed pay for Alan Jope was not increased in 2023 due to his announcement to retire from employment on 31 December 2023. Alan's fixed pay is from 1 January to
30 June 2023 and fixed pay after this date is set out in the payments on loss of office table on page 144. Hein Schumacher's fixed pay was set at €1,850,000 on
appointment as CEO. Hein's fixed pay is from 1 June to 31 December 2023. CFO pay for Graeme Pitkethly was increased by 6% from 1 January 2023.
Alan Jope's benefits are from 1 January to 30 June 2023 and benefits after this date are set out in the payments on loss of office table on page 144. Hein Schumacher's
benefits are from 1 June to 31 December 2023 and include relocation, as detailed on page 133.
In line with the Remuneration Policy, 50% of the 2023 net annual bonus will be deferred into Unilever shares that must be held for a period of three years. Alan Jope's
annual bonus is from 1 January to 30 June 2023. Hein Schumacher's annual bonus is from 1 June to 31 December 2023.
(d) Data for 2023 includes 2020-2023 MCIP match shares, which vested on 15 February 2024 for Graeme Pitkethly. Alan Jope's 2020-2023 MCIP match shares, which vested
on 15 February 2024, are shown in the payments on loss of office table on page 144. Hein Schumacher was not eligible for 2020-2023 MCIP match shares as he was
appointed on 1 June 2023.
(e) Data for 2023 includes the first vesting of the PSP for 2021-2023 for Graeme Pitkethly, which takes place on or around 7 May 2024. The share price is based on the
average for Q4 2023 of £38.69 and translated into euros using the average FX rate for Q4 2023 of €1 = £0.8668. Alan Jope's PSP 2021-2023, which vests on or around
7 May 2024, is shown in the payment on loss of office table on page 144. Hein Schumacher is not eligible for PSP 2021-2023 as he was appointed on 1 June 2023.
Data for 2023 includes the long-term incentive buy-out award for Hein Schumacher, as disclosed in the 2022 directors' remuneration report and detailed on page 140,
which vests on or around 7 May 2024. The share price is based on the average for Q4 2023 of £38.69 and translated into euros using the average FX rate for Q4 2023
of €1 = £0.8668 and totals €417,161 (rounded). This figure also includes the cash buy-out award for Hein Schumacher of €230,572 (rounded), as disclosed in the 2022
directors' remuneration report, which vested on 15 February 2024 and detailed on page 140.
Total remuneration for CEO for 2023 is €6,070,000 rounded (total single figure of remuneration for Alan Jope and Hein Schumacher for 2023 totalled together).
(f)
(g)
Unless stated otherwise, amounts for 2023 have been translated into euros using the average exchange rate over 2023
(€1 = £0.8700), excluding amounts in respect of MCIP, which have been translated into euros using the exchange rates at the
vesting date at 15 February 2024 (€1 = 0.8539 and €1 = $1.0729).
Amounts for 2022 have been translated into euros using the average exchange rate over 2022 (€1 = £0.8510), excluding amounts
in respect of MCIP, which have been translated into euros using the exchange rates at the vesting date on 9 February 2023
(€1 = £0.8879 and €1 = $1.0733).
We do not grant our Executive Directors any personal loans or guarantees.
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Elements of single figure remuneration 2023
(A) Fixed pay (Audited)
Fixed pay set in euros and paid in 2023: CEO – €1,859,557 (€780,390 for Alan Jope 1 January to 30 June 2023 and €1,079,167 for
Hein Schumacher 1 June to 31 December 2023), CFO – €1,246,262.
Fixed pay for Alan Jope after he stepped down as CEO is set out in the payments on loss of office table on page 144.
(B) Other benefits (Audited)
Figures for the CEO are pro-rated for Alan Jope (1 January to 30 June 2023) and Hein Schumacher (1 June to 31 December 2023),
except for relocation costs for Hein Schumacher, which are included in full.
Benefits for Alan Jope after he stepped down as CEO are set out in the payments on loss of office table on page 144.
For 2023, this comprises:
Medical insurance cover, actual tax return preparation costs and legal fees
Provision of death-in-service benefits and administration
Relocation(b)
Total(c)
Hein Schumacher
CEO(€)(a)
Alan Jope
CEO(€)(a)
Graeme Pitkethly
CFO(€)(a)
2023
7,174
11,000
292,492
310,666
2023
35,846
8,000
—
43,846
2023
49,959
13,000
—
62,959
(a)
(b)
(c)
The numbers in this table are translated where necessary using the average exchange rate over 2023 of €1 = £0.8700.
As disclosed in the 2022 directors' remuneration report, Hein Schumacher is eligible for relocation support in respect of his move to the UK up to 1 June 2025. This is
a reduced benefit from Unilever's usual International Mobility arrangements. If Hein leaves Unilever before 1 June 2025, the Committee may claw back some or all of
the relocation allowance.
Total benefits for CEO for 2023 is €354,512 (total benefits for Alan Jope and Hein Schumacher for 2023 totalled together).
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(C) Annual bonus (Audited)
Annual bonus 2023 actual outcomes:
Alan Jope CEO pro rata for 1 January to 30 June 2023 – €1,346,173 (which is 77% of maximum, 173% of fixed pay as at
31 December 2023 pro rated).
Hein Schumacher CEO pro rata for 1 June to 31 December 2023 – €1,861,563 (which is 77% of maximum, 173% of fixed pay as at
31 December 2023 pro rated).
Combined annual bonus for CEO for 2023 is €3,207,736 which is the total of Alan Jope's and Hein Schumacher's annual bonus,
as set out above.
CFO – €1,719,841 (which is 77% of maximum, 138% of fixed pay as at 31 December 2023).
Alan Jope
Hein Schumacher
Graeme Pitkethly
50% of the net annual bonus earned is deferred into shares (€356,736 for Alan Jope, €511,930 for Hein Schumacher and €455,758
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.
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Performance: Annual Bonus (Audited)
Discretion was applied to adjust the formulaic outcome down to 115% for all eligible management employees including the
Executive Directors, as described in the Committee Chair's letter on page 116, along with further details of the annual bonus
outcome.
(D) Long-Term Incentive (Audited)
2023 Outcomes: MCIP
This includes MCIP match shares (operated under the Unilever Share Plan 2017) granted to Alan Jope and Graeme Pitkethly
on 24 April 2020, based on performance in the four-year period to 31 December 2023, which vested on 15 February 2024.
The values included in the single figure table and payments on loss of office table for 2023 are calculated by multiplying the
number of shares granted (including additional shares in respect of accrued dividends through to 31 December 2023) by the
level of vesting (% of target award) and the share price on the date of vesting (PLC £39.81 and PLC EUR €46.55), translated into
euros using the exchange rate on the date of vesting (€1 = £0.8539).
Performance against targets:
Performance: MCIP 2020-2023 (Audited)
(a) Underlying earnings per share growth excludes the benefit from share buyback of €3bn in 2021. 2022 share buyback of €1.5bn was executed to return ekaterra Tea
Business proceeds, hence considered. Similarly, €1.5bn share buyback in 2023 has been included and contributed 1.1% to underlying earnings per share growth.
Discretion was applied to adjust the formulaic outcome down to 87% (i.e. 44% of maximum) for the Executive Directors, as
described in the Committee Chair's letter on page 116, along with further details of the MCIP outcome. Further detail on the SPI
outcome is set out on pages 136 to 137.
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2023 Outcomes: PSP (Audited)
This includes PSP shares (operated under the Unilever Share Plan 2017) granted to Alan Jope and Graeme Pitkethly on 7 May
2021 and the long-term incentive buy-out award (operated under the Unilever Share Plan 2017) granted to Hein Schumacher on
1 June 2023, which vests on or around 7 May 2024 based on performance in the three-year period to 31 December 2023.
The values included in the single figure table and payment on loss of office for 2023 are calculated by multiplying the number of
shares granted (including additional shares in respect of accrued dividends through to 31 December 2023) by the level of vesting
(% of target award) and the average share price over Q4 2023 (PLC £38.69), translated into euros using the average exchange
rate over Q4 2023 (€1 = £0.8668).
Performance against targets:
Performance: PSP 2021-2023 (Audited)
Discretion was applied to adjust the formulaic outcome down to 63% (i.e. 32% of maximum) for the Executive Directors, as
described in the Committee Chair's letter on page 117, along with further details of the PSP outcome. Further detail on the
SPI outcome is set out below.
Outcome of SPI for MCIP cycle 2020-2023 and PSP 2021-2023 (Unaudited):
The SPI is an assessment of the business’s sustainability performance by the CRC and the Committee that captures quantitative
and qualitative elements. The CRC and the Committee agree on an SPI achievement level against the SPI metrics, taking into
account performance across all the targets in each of the eight sustainability pillars. Please note the changes to SPI for
performance periods from 1 January 2024, as set out on page 131.
The 2023 SPI performance is set out on page 137. The SPI index for the MCIP and PSP performance period is calculated by taking a
simple average and is set out at the bottom of the table for MCIP 2020-2023 and PSP 2021-2023. From 2022, the SPI indicators are
based on progress made against Unilever's sustainability goals, as 2021 marked the final year of reporting against the Unilever
Sustainable Living Plan (USLP). Therefore, the performance years 2020 and 2021 for MCIP 2020-2023 and performance year 2021
for PSP 2021-2023 is based on the USLP and the outcome for the remaining performance years is based on Unilever sustainability
goals. For the first time, SPI 2023 includes two metrics (Positive Nutrition and Health & Wellbeing) that are evaluated on ‘in-year’
progress i.e. progress in 2023, rather than year-in-arrears.
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The average SPI outcome for MCIP 2020-2023 and PSP 2021-2023 is set out at the bottom of the table and in note (b).
Sustainability
pillar
Sustainability target
KPI
Sustainability priority area: Improve the health of the planet
Climate
action
Replace fossil-fuel-derived
carbon with renewable or
recycled carbon in all our
cleaning and laundry product
formations by 2030
The total number of suppliers with
whom we have signed agreements
to develop renewable or recycled
carbon surfactants from 1 January to
31 December 2022
Protect and
regenerate
nature
Deforestation-free supply
chain in palm oil, soy, paper
and board, tea and cocoa
by 2023
Waste-free
world
25% recycled plastic by 2025
The percentage of palm oil, soy, paper and
board, tea and cocoa that is purchased
or contracted from low-risk sources of
deforestation by 31 December 2022, based
on contracts in place by 1 October 2022
for palm oil, and purchases made from
1 October to 31 December 2022 for soy,
paper and board, tea and cocoa
Total tonnes of recycled plastic
purchased as a percentage of total
tonnes of plastic packaging used
in products sold from 1 January to
31 December 2022
2022/23 target
Judgement(a)
SPI 2023
SPI 2022
2022/23
actuals 2021 actuals
2
Achieved
2
2
85%
Achieved
88%
81%
22%
Under-
achieved
21%
19%
Sustainability priority area: Improve people's health, confidence and wellbeing
Positive
nutrition
Health &
wellbeing
€1.5 billion annual sales per
annum by 2025 from plant-
based products in categories
whose products are
traditionally using animal-
derived ingredients
Total sales (euros) from plant-based
products in categories whose products
are traditionally using animal-derived
ingredients from 1 January to
31 December 2023
Taking 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 by brand
communications and initiatives that
help improve health and wellbeing,
and help advance equity and inclusion
from 1 January to 31 December 2023
€1.25bn
Under-
achieved
€1.23bn
€242m
750m people
Under-
achieved
638m
people
686m
people
Sustainability priority area: Contribute to a fairer and more socially inclusive world
Equity,
diversity &
inclusion
Spend €2 billion annually with
diverse businesses worldwide
by 2025
Raise living
standards
Ensure that everyone who
directly provides goods and
services to Unilever will earn
at least a living wage or
income by 2030
Future of
work
Reskill or upskill our
employees with future-fit
skills by 2025
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 from
1 January to 31 December 2022
The estimated total monetary value of
Dedicated Collaborative Manufacturing
contracts signed with a requirement to
pay a living wage from 1 January 2021
to 31 December 2022, expressed as
a percentage of the estimated total
monetary value of all unexpired
Dedicated Collaborative Manufacturing
contracts
% of employees with a future-fit skills set
from 1 January to 31 December 2022
Annual SPI
outcome
Average SPI
outcome
for MCIP
2020-2023(b)
Average SPI
outcome
for PSP
2021-2023(b)
€657m
Over-
achieved
€818m
€445m
80%
Over-
achieved
90%†
78%
15%
Achieved
15%
7%
125%
115%
124%
122%
(a)
(b)
Judgement of the Committee and CRC.
SPI outcomes for the years 2020 and 2021 were based on the USLP and are set out in detail on page 92 of the Annual Report and Accounts 2021. SPI 2020 outcome
(based on 2019 actuals) was 130%, SPI 2021 outcome (based on 2020 actuals) was 125% and SPI 2022 outcome (based on 2021 actuals) was 125% (as above), making
an average SPI outcome for MCIP 2020-2023 of 124% (rounded) and for PSP 2021-2023 of 122% (rounded).
† This metric was subject to independent limited assurance by PwC in 2023. For PwC's 2023 Limited Assurance report and the 2023 Unilever Basis of Preparation for
assured metrics see Independent Assurance in the Sustainability Reporting Centre on unilever.com.
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Share price growth MCIP 2020–2023 (Audited)
(a)
(b)
(c)
(d)
(e)
(f)
The conditional number of shares awarded (including decimals) at the share price on the award date at target performance.
The business performance ratio applied to the original conditional share award (including decimals) at the share price on the award date.
The dividends accrued on the original conditional share award (including decimals) at the share price on the award date.
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. The value attributable to share price growth over the vesting period is -€30,859 for the CFO
(using exchange rate on day of vesting of €1 = £0.8539).
The final value of the award on the vesting date using the exchange rate on the day of vesting of €1 = £0.8539. The actual number of vested shares can be found
on page 142.
Share price growth for Alan Jope's MCIP 2020-2023 can be found in the payments on loss of office table on page 144.
Share price growth PSP 2021-2023 (Audited)
(a)
(b)
(c)
(d)
(e)
(f)
The conditional number of shares awarded (including decimals) at the share price on the award date at target performance.
The business performance ratio applied to the original conditional share award (including decimals) at the share price on the award date.
The dividends accrued up to 31 December 2023 on the original conditional share award (including decimals) at the share price on the award date.
The nominal movement in share price between the award date and Q4 2023 average share price applied to the original conditional share award plus accrued
dividends (including decimals) up to 31 December 2023 multiplied by the business performance ratio. The value attributable to share price growth is -€120,257 for the
CFO (using Q4 2023 average exchange rate of €1 = £0.8668).
The final value of the award using Q4 2023 average share price of £38.69 and Q4 2023 average exchange rate of €1 = £0.8668. The actual number of vested shares will
be reported in the 2024 directors' remuneration report.
Share price growth for Alan Jope's PSP 2021-2023 can be found in the payments on loss of office table on page 144. Hein Schumacher's cash buy-out award had an
original value of €233,962, dividends of €4,458 and share price growth of -€7,848 resulting in an award of €230,572 (rounded) on vesting (using exchange rate on day
of vesting of €1 = £0.8539). Share price growth for Hein Schumacher's long-term buy-out award is detailed below.
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Value of long-term incentive buy-out award vesting for Hein Schumacher (Audited)
Based on the performance outcome of 63% of target, share price using Q4 2023 average share price of £38.69 and Q4 2023
average exchange rate of €1 = £0.8668, and dividends accrued up to 31 December 2023 of the value of €8,300, the final value of
the award is €417,161 and share price growth is -€26,732. The actual number of vested shares will be reported in the 2024
directors' remuneration report.
Scheme interests awarded in the year (Audited)
PSP share awards made in 2023
Basis of award(a)
The following numbers of performance shares were awarded on 10 March 2023 (vesting on or around 12 February
2026), except for Hein Schumacher, which were awarded on 1 June 2023 and vesting on or around 1 June 2026:
CEO (Alan Jope): PLC – 11,354 CEO (Hein Schumacher): PLC – 68,135
CFO: PLC – 43,516
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.
Maximum face value
of awards(b)
CEO (Alan Jope): €1,062,048 CEO (Hein Schumacher): €6,293,557
CFO: €4,070,550
Threshold vesting
(% of target award)
Performance period
Four equally weighted long-term performance measures. 0% of the target award vests for threshold
performance.
1 January 2023 – 31 December 2025 (with a requirement to hold vested shares for a further two-year
retention period).
Details of performance
measures
Performance measures:
PSP 2023 – 2025 awards
Weighting
Threshold
Max
Competitiveness: % business winning(c)
Cumulative free cash flow
(current FX)
Underlying return on invested capital
(exit year %)
Sustainability progress index (Committee
assessment of SPI progress)
25%
25%
25%
25%
45%
0%
€15.5bn
0%
14%
0%
0%
0%
60%
200%
€21.5bn
200%
18%
200%
200%
200%
200%
(a)
(b)
(c)
The 2023-2025 PSP award for Alan Jope and Hein Schumacher is pro-rated to reflect their time in service over the performance period.
Face values are calculated by multiplying the number of shares granted on 10 March 2023 or 1 June 2023 (including decimals) by the share price on that day of PLC
£40.69 or PLC £40.18 respectively, assuming maximum performance and therefore maximum vesting of 200% and then translating into euros using an average
exchange rate over 2023 of €1 = £0.8700 (rounded).
Competitiveness measured by % Business Winning was 37% on a Moving Annual Total basis as per 31 December 2023. See the Chair Letter on page 116 for more
information on % Business Winning.
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Annual bonus deferral share awards made in 2023
Basis of award(a)
The following numbers of annual bonus deferral shares were awarded on 22 March 2023:
CEO (Alan Jope): PLC – 17,283
CFO: PLC – 10,416
Annual bonus deferral shares accrue dividends, which are reinvested.
Face value of awards(b)
CEO (Alan Jope): €834,858
CFO: €503,146
Deferral period
22 March 2023 – 22 March 2026.
Details of performance
measures
No performance measures.
(a) Hein Schumacher did not receive an annual bonus deferral award in 2023 as he did not receive an annual bonus for 2022.
(b)
Face values are calculated by multiplying the number of shares granted on 22 March 2023 (including decimals) by the share price on that day of PLC £42.03 and then
translated into euros using an average exchange rate over 2023 of €1 = £0.8700 (rounded).
Long-term incentive buy-out awards made in 2023
Basis of award(a)
The following numbers of long-term incentive buy-out shares were awarded on 1 June 2023 (vesting on or around
7 May 2024):
CEO (Hein Schumacher): PLC – 14,559
Maximum vesting results in 120% 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.
Face value of awards(b)
CEO (Hein Schumacher): €826,667
Threshold vesting
(% of target award)
Four equally weighted long-term performance measures. 0% of the target award vests for threshold performance.
Performance period
1 January 2021 – 31 December 2023 (also conditional upon continued employment on the date of vesting).
Details of performance
measures
Same performance measures and targets as for PSP 2021-2023, as set out on page 136.
(a) As disclosed in the 2022 directors' remuneration report, to replace the 2021-2023 cash long-term incentive that Hein forfeited from his previous employment, he was
given a share award with grant value of €697,500 that will vest on or around 7 May 2024, subject to the conditions set out above and capped at a maximum of 120%
of performance outcome. The final vesting of this award has been determined as 63% of target as disclosed on page 136.
(b) Face values are calculated by multiplying the number of shares granted on 1 June 2023 (including decimals) by the 5-day average share price prior to 1 June 2023
of PLC £41.17, assuming maximum performance and therefore maximum vesting of 120% and then translated into euros using an average exchange rate over 2023
of €1 = £0.8700 (rounded).
Cash buy-out awards made in 2023
Basis of award(a)
The following numbers of cash buy-out shares were awarded on 1 June 2023 (vested on 15 February 2024):
CEO (Hein Schumacher): PLC – 4,853
Restricted shares accrue dividends, which are reinvested.
Face value of awards(b)
CEO (Hein Schumacher): €229,630
Conditions
Conditional upon continued employment on the date of vesting.
Details of performance
measures
No performance measures.
(a)
(b)
As disclosed in the 2022 directors' remuneration report, to replace the 2023 cash bonus that Hein forfeited from his previous employment, he was given a share award
with grant value of €232,500 that vested on 15 February 2024.
Face values are calculated by multiplying the number of shares granted on 1 June 2023 (including decimals) by the 5-day average share price prior to 1 June 2023
of PLC £41.17 and then translated into euros using an average exchange rate over 2023 of €1 = £0.8700 (rounded).
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Minimum shareholding requirement and Executive Director share interests
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. If Executive Directors fail to achieve 100% of the shareholding requirement
by the relevant time, they are not permitted to sell any Unilever shares and Unilever retains the right to block the sale of their
shares until the required level of shareholding has been obtained.
The table below shows the Executive Directors’ share ownership against the minimum shareholding requirements as at
31 December 2023 and the interest in PLC ordinary shares of the Executive Directors and their connected persons as at
31 December 2023.
When calculating an Executive Director’s personal shareholding, the following methodology is used:
■ fixed pay at the date of measurement;
■ shares in PLC will qualify provided they are personally owned by the Executive Director, by a member of their immediate family
or by certain corporate bodies, trusts or partnerships, as required by law from time to time (each a ‘connected person’);
■ shares purchased under the legacy MCIP, whether from the annual bonus or otherwise, will qualify as from the moment of
purchase as these are held in the individual’s name and are not subject to further restrictions;
■ shares or entitlements to shares that are subject only to the Executive Director remaining in employment will qualify on a net
of tax basis (including deferred bonus awards);
■ shares awarded on a conditional basis will not qualify until the moment of vesting (i.e. once the precise number of shares is
fixed after the vesting period 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.
Executive Directors are 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 employment. 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
2023)
Have guidelines
been met (as at
31 December
2023)
Actual share
ownership as a %
of fixed pay (as
at 31 December
2023)(a)
CEO: Alan Jope
CEO: Hein
Schumacher(c)
CFO: Graeme Pitkethly
500%
500%
400%
Yes
No
Yes
901%
13%
811%
Shares held as at
1 January 2023
Shares held as at
31 December 2023(b)
PLC
55,271
—
206,108
PLC ADS
237,881
—
PLC
79,608
5,491
229,128
PLC ADS
238,362
—
—
(a)
(b)
(c)
Calculated based on the minimum shareholding requirements and methodology set out above and the headline fixed pay for the CEOs and CFO as at 31 December
2023 (€1,560,780 for the CEO (Alan Jope), €1,850,000 for the CEO (Hein Schumacher) and €1,246,262 for the CFO).
PLC shares are ordinary 31/9p shares. Includes annual bonus deferral shares dividend accrual, which is reinvested.
Hein Schumacher was appointed on 1 June 2023 and acquired shares after his appointment. In addition, his first share vesting took place on 15 February 2024, which
is why his shareholding as at 31 December 2023 is 13%. Hein has five years from the date of his appointment to achieve his personal shareholding requirement.
During the period between 1 January and 22 February 2024, the following changes in interests have occurred:
■ Graeme Pitkethly purchased 6 PLC shares under the Unilever PLC ShareBuy Plan: 3 on 9 January 2024 at a share price of £38.34,
and a further 3 on 8 February 2024 at a share price of £40.14; and
■ as detailed on page 135 for Alan Jope and Graeme Pitkethly and page 140 for Hein Schumacher, on 15 February 2024:
■ Alan Jope acquired 20,924 PLC EUR shares following the vesting of his 2020 MCIP award;
■ Hein Schumacher acquired 2,621 PLC GBP shares following the vesting of his cash buy-out award; and
■ Graeme Pitkethly acquired 12,581 PLC GBP shares following the vesting of his 2020 MCIP award.
Effective as of 1 January 2024, Fernando Fernandez was appointed as CFO replacing Graeme Pitkethly, who remained as CFO
until 31 December 2023. As at 22 February 2024, Fernando Fernandez holds 84,496 PLC EUR shares and 190,072 PLC GBP shares.
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 22 February 2024, 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 (except Nelson Peltz who owns 1.5% of the PLC issued share capital including via Trian Fund Management
as a connected person). All shareholdings in the table above are beneficial. On page 99, the full share capital of PLC has been
described. Pages 190 and 191 set out how many shares Unilever held to satisfy the awards under the share plans.
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Information in relation to outstanding share incentive awards (Audited)
As at 31 December 2023, Alan Jope held awards over a total of 207,643 shares which are subject to performance conditions
and a total of 35,046 shares which are not subject to performance conditions, Hein Schumacher held awards over a total of
84,270 shares which are subject to performance conditions and a total of 4,946 shares which are not subject to performance
conditions, and Graeme Pitkethly held awards over a total of 162,796 shares which are subject to performance conditions and
a total of 21,121 shares which are not subject to performance conditions. There are no awards of shares in the form of options.
Annual bonus deferral shares (Audited)
The following bonus deferral shares were outstanding at 31 December 2023 under the Unilever Share Plan 2017:
Alan Jope
Graeme Pitkethly
Balance of
bonus deferral
shares at 1
January
2023(a)(b)
Share type
Bonus deferral
shares granted
in 2023(c)
Price at award
Bonus deferral
shares with
restrictions
removed
Balance of
bonus deferral
shares at 31
December
2023(d)
PLC
PLC
17,763
10,705
17,283
10,416
£42.03
£42.03
—
—
35,046
21,121
(a)
Alan Jope: This includes a grant of 5,743 of PLC shares made on 7 May 2021 (vesting on or around 7 May 2024), and a grant of 12,020 PLC shares on 22 March 2022
(vesting on or around 22 March 2025).
(b) Graeme Pitkethly: This includes a grant of 3,461 of PLC shares made on 7 May 2021 (vesting on or around 7 May 2024), and a grant of 7,244 PLC shares on 22 March
(c)
(d)
2022 (vesting on or around 22 March 2025).
Grant made on 22 March 2023 and vesting on or around 22 March 2026.
Annual bonus deferral shares accrue dividends, which are included in the share ownership table above where applicable. Hein Schumacher does not have any
outstanding annual bonus deferral shares as at 31 December 2023 as he was appointed on 1 June 2023.
PSP (Audited)
The following conditional shares were outstanding at 31 December 2023 under the Unilever Share Plan 2017 and are subject to
performance conditions:
Balance of
conditional
shares at 1
January 2023
No. of
shares (a)
(b)
Share
type
Conditional
shares
awarded
in 2023
Performance
period
1 January
2023 to
31 December
2025(c)
Dividend
shares
accrued
during the
year(d)
Price at
award
Alan Jope
PLC 145,054
11,354
£40.69
5,857
Hein
Schumacher
Graeme
Pitkethly
PLC
—
68,135
£40.18
1,298
PLC 87,414
43,516
£40.69
4,580
Balance of
conditional shares
at 31 December 2023
Vested in
2023(e)
Price at
vesting
—
—
—
£—
£—
£—
Additional
shares
earned in
2023 Shares lapsed
No. of shares
—
—
—
—
—
—
162,265
69,433
135,510
(a)
Alan Jope: This includes a grant of 61,233 of PLC shares made on 7 May 2021 (vesting on or around 7 May 2024), a grant of 77,427 PLC shares made on 11 March 2022
(vesting on or around 13 February 2025), and 6,394 PLC shares from reinvested dividends accrued in prior years in respect of awards.
(b) Graeme Pitkethly: This includes a grant of 36,901 of PLC shares made on 7 May 2021 (vesting on or around 7 May 2024), a grant of 46,660 PLC shares made on
11 March 2022 (vesting on or around 13 February 2025), and 3,853 PLC shares from reinvested dividends accrued in prior years in respect of awards.
Alan Jope and Graeme Pitkethly: These grants were made on 10 March 2023 (vesting on or around 12 February 2026). Hein Schumacher: This grant was made on
1 June 2023 (vesting on or around 1 June 2026).
Reflects reinvested dividend equivalents accrued during 2023, subject to the same performance conditions as the underlying PSP shares.
The first vest will take place on or around 7 May 2024.
(c)
(d)
(e)
MCIP (Audited)
The following conditional shares vested during 2023 or were outstanding at 31 December 2023 under the Unilever Share Plan 2017:
Balance of
conditional
shares at 1
January 2023
Share
type
PLC
PLC
No. of shares
(a) (b)
62,754
48,154
Dividend
shares
accrued
during the
year(c)
1,637
1,002
Balance of conditional shares at 31 December 2023
Vested in
2023(d)
13,309
15,309
Price at
vesting
Additional
shares earned
in 2023(e)
Shares lapsed No. of shares(f)
€46.47
£41.09
—
—
5,704
6,561
45,378
27,286
Alan Jope
Graeme Pitkethly
(a)
Alan Jope: This includes a grant of 16,668 PLC shares on 23 April 2019 (vested on 9 February 2023) and a grant of 39,594 PLC shares on 24 April 2020 (vested on
15 February 2024) and 6,492 PLC shares from reinvested dividends accrued in prior years in respect of awards.
(b) Graeme Pitkethly: This includes a grant of 19,196 PLC shares on 23 April 2019 (vested on 9 February 2023) and a grant of 23,795 PLC shares on 24 April 2020
(vested on 15 February 2024), and 5,163 PLC shares from reinvested dividends accrued in prior years in respect of awards.
Reflects reinvested dividend equivalents accrued during 2023 and subject to the same performance conditions as the underlying matching shares.
The 23 April 2019 grant vested on 9 February 2023 at 70% for both Alan Jope and Graeme Pitkethly.
This includes any additional shares earned and accrued dividends as a result of a business performance multiplier on vesting above 100%.
Hein Schumacher does not have any outstanding MCIP shares as at 31 December 2023 as he was appointed on 1 June 2023.
(c)
(d)
(e)
(f)
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FINANCIAL STATEMENTS
Directors' Remuneration Report
Long-term incentive buy-out award (Audited)
The following conditional shares were outstanding at 31 December 2023 under the Unilever Share Plan 2017 and are subject to
performance conditions:
Balance of
conditional
shares at 1
January 2023
Share
type
No. of
shares
Conditional
shares
awarded
in 2023
Performance
period
1 January
2021 to
31 December
2023(a)
Dividend
shares
accrued
during the
year(b)
Price at
award
Vested in
2023
Price at
vesting
Additional
shares
earned in
2023 Shares lapsed
No. of shares
Balance of
conditional shares
at 31 December 2023
Hein
Schumacher
PLC —
14,559
£41.17
278
—
£—
—
—
14,837
(a)
(b)
This grant was made on 1 June 2023 (vesting on or around 7 May 2024). The final vesting of this award has been determined as 63% of target as disclosed on page 136.
Reflects reinvested dividend equivalents accrued during 2023, subject to the same performance conditions as the underlying long-term incentive buy-out shares.
Cash buy-out award (Audited)
The following conditional shares were outstanding at 31 December 2023 under the Unilever Share Plan 2017:
Balance of
conditional
shares at 1
January 2023
Balance of
conditional shares
at 31 December 2023
Share
type
No. of
shares
Conditional
shares
awarded
in 2023(a)
Dividend
shares
accrued
during the
year(b)
Price at
award
Vested in
2023
Price at
vesting
Additional
shares
earned in
2023 Shares lapsed
No. of shares
Hein
Schumacher
PLC —
4,853
£41.17
93
—
£—
—
—
4,946
(a)
(b)
This grant was made on 1 June 2023 (vested on 15 February 2024).
Reflects dividend equivalents accrued during 2023.
Executive Directors' service contracts
Starting dates of our Executive Directors’ service contracts:
■ Alan Jope: 1 January 2019 (signed on 16 December 2020);
■ Hein Schumacher: 1 June 2023(a) (signed on 29 January 2023);
■ Graeme Pitkethly: 1 October 2015 (signed on 16 December 2015); and
■ Fernando Fernandez: 1 January 2024 (signed 24 October 2023).
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.
(a) Note: Hein Schumacher began employment with Unilever on 1 June 2023 as CEO Designate and Executive Director and became CEO on 1 July 2023.
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FINANCIAL STATEMENTS
Directors' Remuneration Report
Payments to former Directors (Audited)
The table below shows the 2023 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 Directors' remuneration report.
Benefits(a)
Total remuneration
(a)
This includes tax preparation fees.
Paul Polman
(€'000)
30
30
There have been no other payments to former Directors during the year.
Payments for loss of office (Audited)
Alan Jope was CEO from 1 January to 30 June 2023 and retired from employment with the Company on 31 December 2023. The
table below shows the payments for loss of office to Alan in respect of his role as a Director from 1 July to 31 December 2023, in
accordance with arrangements made with him, as disclosed in the 2022 Directors' remuneration report. As he was employed for
the entirety of the performance periods, the Committee determined that his 2020-2023 MCIP and 2021-2023 PSP awards would
vest in full, subject to performance outcomes, as outlined on pages 135 and 136.
Fixed pay(a)
Benefits(b)
LTI: MCIP match shares(c)
LTI: PSP performance shares(d)
Total remuneration
Alan Jope
(€'000)
780
75
1,838
1,909
4,602
(a)
(b)
(c)
Alan Jope's fixed pay from 1 July to 31 December 2023 (being the end of his contractual notice period). Alan's fixed pay from 1 January to 30 June 2023 is set out in the
single figure table on page 132.
Alan Jope's benefits from 1 July to 31 December 2023 and includes tax preparation fees, medical insurance cover and death-in-service benefits. Alan's benefits from
1 January to 30 June 2023 are set out in the single figure table on page 132.
Data for 2023 includes 2020-2023 MCIP match shares, which vested on 15 February 2024 for Alan Jope, as set out on page 135. Alan Jope's MCIP award had an original
value of €1,792,420, performance of -€233,015 dividends of €227,800 and share price growth of €50,335 resulting in an award of €1,837,541 (rounded) on vesting.
(d) Data for 2023 includes the first vesting of the PSP for 2021-2023 for Alan Jope, which takes place on or around 7 May 2024, as set out on page 136. The share price is
based on the average for Q4 2023 of £38.69 and translated into euros using the average FX rate for Q4 2023 of €1 = £0.8668. Alan Jope's PSP award had an original
value of €3,018,513, performance of -€1,116,850, dividends of €206,865 up to 31 December 2023 and share price growth of -€199,553 resulting in an award of
€1,908,975 (rounded) on vesting. The actual number of vested shares will be reported in the 2024 Directors' remuneration report.
Alan Jope received a retirement gift worth £7,950 (€9,138 rounded), which is disclosed in accordance with the Directors'
Remuneration Policy for retirement gifts worth over £5,000.
There have been no other payments for loss of office during the year.
Unless stated otherwise, amounts for 2023 have been translated into euros using the average exchange rate over 2023
(€1 = £0.8700), excluding amounts in respect of MCIP, which have been translated into euros using the exchange rates at the
vesting date at 15 February 2024 (€1 = £0.8539 and €1 = $1.0729).
Appointment arrangements for Fernando Fernandez
Fernando Fernandez commenced the role of CFO on 1 January 2024, replacing Graeme Pitkethly who will cease employment on
31 May 2024. The Compensation Committee approved the remuneration package, as described in this section, which came into
effect from 1 January 2024. His remuneration package is in accordance with the approved Remuneration Policy.
Fernando's fixed pay has been set at €1,175,000 per annum. Fernando is eligible to receive a discretionary annual bonus with
target opportunity set at 120% of fixed pay (maximum 180% fixed pay). 50% of any net annual bonus will be deferred into
Unilever shares for three years. Further details on the annual bonus (including performance measures) are set out on page 130.
From 1 January 2024, Fernando is also eligible for an annual PSP award of 160% of fixed pay at target (320% fixed pay maximum)
that will vest to the extent performance conditions are achieved, followed by an additional two-year holding period. Further
details on the PSP 2024-2026, including performance conditions, are set out on page 131.
Fernando will receive benefits under the approved Remuneration Policy, including tax preparation fees, medical insurance cover
and death-in-service benefits. He will also receive a relocation allowance in 2024 and 2025 to support his move to the UK (plus
housing costs for up to six months). If Fernando leaves Unilever within 24 months of his appointment as CFO, the Committee may
claw-back some or all of the relocation allowance.
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FINANCIAL STATEMENTS
Directors' Remuneration Report
Leaving arrangements for Graeme Pitkethly
Graeme Pitkethly stepped down as CFO and Executive Director on 31 December 2023 and will retire from employment on
31 May 2024 (the 'Retirement Date'). Until the Retirement Date, Graeme will remain an employee of Unilever.
On this basis, and in accordance with his service agreement and our Remuneration Policy, Graeme:
■ will continue to receive fixed pay up to the Retirement Date;
■ remains eligible to receive a discretionary bonus of up to 180% fixed pay in respect of the 2023 financial year (as detailed on
page 134) with 50% of the net annual bonus deferred into shares with a three-year holding period in accordance with the
Remuneration Policy;
■ remains eligible for vesting of his 2020-2023 MCIP and 2021-2023 PSP awards, as outlined on pages 135 and 136;
■ will be treated as a good leaver on retirement under the PSP long-term share incentive plans, meaning that his outstanding
awards will remain capable of vesting in accordance with the rules of the relevant plan on its vesting date, subject to
Company performance. PSP awards will remain subject to a two-year post-vesting holding period and MCIP awards remain
subject to a one-year post-vesting holding period;
■ will continue to be eligible for vesting and release of any annual bonus deferral shares in accordance with their terms; and
■ will continue to receive contractual benefits through to the Retirement Date, including annual leave, medical insurance cover,
death-in-service benefits and tax return preparation services (in respect of all Unilever source income).
Details of all payments made to and received by Graeme will be disclosed on the Company’s website and in the Directors’
remuneration reports as required going forward.
Implementation of the Remuneration Policy for Non-Executive Directors (Audited)
As explained in the Chair letter on page 118, the Committee reviewed Non-Executive Director fees in January 2024 and
determined there would be no increase for 2024 given the fees are in line with market and the recent fee increase in 2023.
The Committee will continue to keep Non-Executive Director fees under regular review.
Non-Executive Director fees are set and paid in GBP. The table below outlines the current fee structure shown in our reporting
currency of EUR and GBP using the average exchange rate over 2023 of £1 = €1.1494 (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
2024
2023
Annual Fee €
Annual Fee £
Annual Fee €
Annual Fee £
€ 109,197
€ 758,629
£95,000
£660,000
€ 109,197
€ 758,629
£95,000
£660,000
€ 45,978
€ 17,242
€ 22,989
€ 22,989
€ 28,736
€ 34,483
€ 40,230
€ 40,230
€ 45,978
£40,000
£15,000
£20,000
£20,000
£25,000
£30,000
£35,000
£35,000
£40,000
€ 45,978
€ 17,242
€ 22,989
€ 22,989
€ 28,736
€ 34,483
€ 40,230
€ 40,230
€ 45,978
£40,000
£15,000
£20,000
£20,000
£25,000
£30,000
£35,000
£35,000
£40,000
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.
Unilever Annual Report and Accounts 2023
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FINANCIAL STATEMENTS
Directors' Remuneration Report
Single figure of remuneration in 2023 for Non-Executive Directors (Audited)
The table below shows a single figure of remuneration for each of our Non-Executive Directors, for the years 2022 and 2023.
Non-Executive Director
Nils Andersen(c)
Laura Cha(d)
Judith Hartmann(e)
Adrian Hennah(f)
Andrea Jung(g)
Susan Kilsby(h)
Ruby Lu(i)
Strive Masiyiwa(j)
Ian Meakins(k)
Youngme Moon(l)
Nelson Peltz(m)
John Rishton(n)
Hein Schumacher(o)
Feike Sijbesma(p)
Total
Fees(a)
€'000
Benefits(b)
€'000
2023
Total
remuneration
€'000
Fees(a)
€'000
Benefits(b)
€'000
2022
Total
remuneration
€'000
708
—
146
155
213
138
142
149
91
132
132
—
57
125
2,188
37
—
21
22
—
2
—
—
—
—
—
—
2
—
84
745
—
167
177
213
140
142
149
91
132
132
—
59
764
50
127
140
200
127
139
135
—
118
54
51
31
125
2,272
135
2,071
29
—
1
—
—
27
15
—
—
41
—
—
—
1
114
793
50
128
140
200
154
154
135
—
159
54
51
31
136
2,185
(a)
(b)
(c)
This includes fees received from Unilever for 2022 and 2023 respectively. Includes basic Non-Executive Director fee and committee chairship and/or membership.
Where relevant, amounts for 2022 have been translated into euros using the average exchange rate over 2022 (€1 = £0.8510). Amounts for 2023 have been translated
into euros using the average exchange rate over 2023 (€1 = £0.8700).
The only benefit received relates to travel by spouses or partners where they are invited by Unilever.
Chair, Chair of the Nominating and Corporate Governance Committee and member of the Compensation Committee. From 1 December 2023, member of the
Nominating and Corporate Governance Committee and Compensation Committee.
Retired from the Board at the May 2022 AGM.
Chair of the Audit Committee from 4 May 2022.
Vice Chair, Senior Independent Director, member of the Nominating and Corporate Governance Committee and Chair of the Compensation Committee.
(d)
(e) Member of the Audit Committee until 3 May 2023 and then Member of the Nominating and Corporate Governance Committee and Compensation Committee.
(f)
(g)
(h) Member of the Audit Committee.
(i) Member of the Compensation Committee and Nominating and Corporate Governance Committee until 3 May 2023 and then Member of the Audit Committee.
(j)
(k)
Chair of the Corporate Responsibility Committee.
Appointed to the Board from 1 September 2023 and Chair, Chair of the Nominating and Corporate Governance Committee and member of the Compensation
Committee from 1 December 2023.
(l) Member of the Corporate Responsibility Committee.
(m) Appointed to the Board and member of the Compensation Committee from 20 July 2022.
(n)
(o)
(p)
Retired from the Board at the May 2022 AGM.
Appointed to the Board and member of the Audit Committee from 4 October 2022 to 31 May 2023, following which he was appointed as an Executive Director.
Retired from the Board on 31 October 2023.
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.
146
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FINANCIAL STATEMENTS
Directors' Remuneration Report
Percentage change in remuneration of Non-Executive Directors (Audited)
The table below shows the five-year history of year-on-year percentage change for fees and other benefits for the Non-Executive
Directors who were Non-Executive Directors at any point during 2023 (with the exception of Hein Schumacher who is included in
the percentage change in remuneration of Executive Directors table on page 151). Please see page 151 for comparison of
percentage change in remuneration of PLC employees.
Non-Executive Director
Nils Andersen(b)
Laura Cha(c)
Judith Hartmann(d)
Adrian Hennah(e)
Andrea Jung(f)
Susan Kilsby(g)
Ruby Lu(h)
Strive Masiyiwa(i)
Ian Meakins(j)
Youngme Moon(k)
Nelson Peltz(l)
John Rishton(m)
Feike Sijbesma(n)
% change from
2022 to 2023
% change from
2021 to 2022
% change from
2020 to 2021
% change from
2019 to 2020
% change from
2018 to 2019
Total Remuneration(a)
-6.1
-100.0
30.5
26.4
6.5
-9.1
-7.8
10.4
—
-17.0
144.4
-100.0
-8.1
5.0
-63.5
1.6
566.7
11.1
22.2
569.6
0.7
—
20.5
—
-64.8
1.5
-3.0
2.3
-3.0
—
32.8
-3.0
—
-3.0
—
-21.4
—
-3.0
-3.0
253.9
10.8
-11.4
—
11.8
144.0
—
-0.9
—
-0.8
—
-10.9
-0.9
69.2
5.2
14.1
—
51.3
—
—
6.1
—
15.0
—
17.5
3.0
(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
(b)
mainly due to changes in committee chair or memberships, mid-year appointments, or retirement, fee increases as disclosed in applicable Directors’ remuneration
reports, travel costs and changes in the average sterling: euro exchange rates. 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 2020 or 2021 due to the Covid pandemic.
Chair, Chair of the Nominating and Corporate Governance Committee and member of the Compensation Committee. From 1 December 2023, member of the
Nominating and Corporate Governance Committee and Compensation Committee. Hence his % decrease from 2022 to 2023. He became Chair in November 2019,
hence the % increase from 2019 to 2020.
Laura Cha retired from the Board at the May 2022 AGM, hence the % decrease from 2022 to 2023.
(c)
(d) Member of the Audit Committee until 3 May 2023 and then Member of the Nominating and Corporate Governance Committee and Compensation Committee. Hence
the % increase from 2022 to 2023, in addition to spouse/partner travel costs.
Adrian Hennah was appointed to the Board with effect from 1 November 2021 and became Chair of the Audit Committee on 4 May 2022. The % increase from 2022 to
2023 relates to the fee increase for Non-Executive Directors in 2023 plus spouse/partner travel costs.
Andrea Jung was appointed 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. The % increase from 2022 to 2023 relates to the fee increase for Non-Executive Directors in 2023.
Susan Kilsby joined Unilever in August 2019, hence the % increase from 2019 – 2020. The % decrease from 2022 to 2023 relates to spouse/partner travel costs.
Ruby Lu was appointed to the Board from 1 November 2021, was a member of the Compensation Committee and Nominating and Corporate Governance Committee
until 3 May 2023 and then member of the Audit Committee. Hence the % decrease from 2022 to 2023, along with spouse/partner travel costs.
The % increase for Strive Masiyiwa from 2022 to 2023 relates to the fee increase for Non-Executive Directors in 2023.
Ian Meakins was appointed to the Board from 1 September 2023 and Chair, Chair of the Nominating and Corporate Governance Committee and member of the
Compensation Committee from 1 December 2023.
The % decrease for Youngme Moon from 2022 to 2023 relates to spouse/partner travel costs.
Nelson Peltz was appointed to the Board and became a member of the Compensation Committee from 20 July 2022, hence the % increase from 2022 to 2023.
John Rishton retired from the Board at the May 2022 AGM, hence the % decrease from 2022 to 2023.
Feike Sijbesma retired from the Board from 31 October 2023, hence the % decrease from 2022 to 2023.
(e)
(f)
(g)
(h)
(i)
(j)
(k)
(l)
(m)
(n)
Unilever Annual Report and Accounts 2023
147
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FINANCIAL STATEMENTS
Directors' Remuneration Report
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 2023 and Unilever
PLC ordinary shares as at 31 December 2023 of Non-Executive Directors and their connected persons. This is set against the
minimum shareholding recommendation. Note: Hein Schumacher is included in the Executive Directors' interest in shares
table on page 141.
There has been no change in these interests between 1 January 2024 and 22 February 2024.
Non-Executive Director
Nils Andersen
Judith Hartmann(a)
Adrian Hennah(a)
Andrea Jung(a)
Susan Kilsby(b)
Ruby Lu
Strive Masiyiwa(a)
Ian Meakins(c)
Youngme Moon(b)
Nelson Peltz(d)
Feike Sijbesma(e)
Share type
Shares held at
31 December
2023
Share type
PLC
PLC
PLC
PLC
PLC
PLC
PLC
PLC
PLC ADS
21,014
2,500
4,000
4,576
2,250
—
3,530
26,036
3,500
PLC
PLC
PLC
PLC
PLC
PLC
PLC
n/a
PLC ADS
Shares held at
1 January 2023
21,014
2,500
4,000
4,576
2,250
—
3,530
n/a
3,500
Actual share
ownership as a %
of NED fees
(as at 31
December 2023)
131
76
114
95
72
0
104
1,268
117
PLC
PLC
36,619,370
10,000
PLC
39,167,999
1,221,706
PLC
10,000
354
(a) Decrease in share ownership as a percentage of fee from 2022 to 2023 is due to increase in fee, as set out on page 147.
(b) Decrease in share ownership as a percentage of fee from 2022 to 2023 is due to increase in fees for Non-Executive Directors, as set out on page 145.
(c)
(d)
Appointed to the Board from 1 September 2023, hence the large share ownership as a percentage of fee for 2023.
Share ownership also includes shares held by Trian Fund Management as a connected person. Appointed to the Board from 20 July 2022, hence the large share
ownership as a percentage of fee for 2023.
Stepped down from the Board effective from 31 October 2023. Shares held as at 31 October 2023.
(e)
Non-Executive Directors' letters of appointment
All Non-Executive Directors were reappointed to the Board at the 2024 AGM.(a)
Non-Executive Director
Date first appointed to the Board
Effective date of current appointment(b)
Nils Andersen
Judith Hartmann
Adrian Hennah
Andrea Jung
Susan Kilsby
Ruby Lu
Strive Masiyiwa
Ian Meakins
Youngme Moon
Nelson Peltz
30 April 2015
30 April 2015
1 November 2021
3 May 2018
1 August 2019
1 November 2021
21 April 2016
1 September 2023
21 April 2016
20 July 2022
3 May 2023
3 May 2023
3 May 2023
3 May 2023
3 May 2023
3 May 2023
3 May 2023
1 September 2023
3 May 2023
3 May 2023
(a)
(b)
Except for Ian Meakins who was appointed to the Board with effect from 1 September 2023 and such appointment will be confirmed at the 2024 AGM.
The unexpired term for all Non-Executive Directors’ letters of appointment is the period up to the 2024 AGM, as they all, unless they are retiring, submit themselves for
annual reappointment.
148
Unilever Annual Report and Accounts 2023
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Directors' Remuneration Report
Other disclosures related to Directors' remuneration (Unaudited)
Unilever regularly looks at pay ratios throughout the Group, and the pay ratio between each work level (WL in the table below),
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 2023 (with equivalent
figures from 2022 included for comparison purposes). For the purposes of the CEO, the data is the total of fixed pay and variable
pay for Alan Jope and Hein Schumacher, as set out in the single figure table for Executive Directors on page 132. Figures for the
CFO are calculated using the applicable data for Graeme Pitkethly from the single figure table.
CEO/CFO Pay Ratio Comparison (split by fixed pay and benefits)/variable pay)
The year-on-year comparison reflects an increase in fixed pay for the Executive Directors in 2023 following a pay increase for
Graeme Pitkethly as CFO from 1 January 2023 and a higher fixed pay on the appointment of Hein Schumacher as CEO from 1 July
2023. Also, fixed pay for Alan Jope and Hein Schumacher are both counted for June 2023. Benefit costs increased for CEO due to
the inclusion of Hein Schumacher's relocation and a slight increase for the CFO due to higher benefit costs and legal fees. The
proportion of variable pay for CEO is lower in 2023 than 2022 because of the lower annual bonus outcome compared to 2022.
Also, Hein Schumacher is not eligible for MCIP 2020-2023 and PSP 2021-2023 as he was appointed on 1 June 2023. Therefore,
Hein's variable pay includes his buy-out share awards only and Alan Jope's MCIP and PSP awards are not included for the
purposes of the single figure table (as they are set out in the payment on loss of office table on page 144). Executive Directors
have a higher weighting on performance-related pay compared to other employees. 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 2022 have been translated using the average exchange rate over 2022 (€1 = £0.8510), and amounts
for 2023 have been translated using the average exchange rate over 2023 (€1 = £0.8700).
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 considered for the respective year;
■ 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; and
■ PSP values calculated at target for the relevant work level of employees, i.e. 50% of target bonus for WL2 employees; 100%
of target bonus for WL3-6 employees.
Fixed pay figures reflect all elements of pay (including allowances) and benefits paid in cash. The data disclosed excludes
employees who are not integrated into Unilever’s global reward structure and human resources information system.
Unilever Annual Report and Accounts 2023
149
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CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Directors' Remuneration Report
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. For the purposes of the CEO, the data is the total of fixed pay and variable pay for
Alan Jope and Hein Schumacher, as set out in the single figure table for Executive Directors on page 132, translated into sterling
using the average exchange rate over 2023 (£1 = €1.1494).
Year
Year ended 31 December 2023
Salary:
Pay and benefits:
Pay ratio (Option A):
Year ended 31 December 2022
Salary:
Year ended 31 December 2021
Salary:
Pay and benefits:
Pay ratio (Option A):
Year ended 31 December 2020
Salary:
Pay and benefits:
Pay ratio (Option A):
Pay and benefits:
Pay ratio (Option A):
Year ended 31 December 2019
Salary:
Pay and benefits:
Pay ratio (Option A):
25th percentile
£40,968
£52,551
100:1
£36,802
£49,868
Median
percentile
£49,224
£65,305
81:1
£44,478
£61,553
92:1
75:1
£34,560
£48,229
87:1
£34,298
£45,713
67:1
£38,510
£50,689
83:1
£42,668
£60,306
70:1
£41,010
£55,751
55:1
£45,154
£61,086
69:1
75th percentile
Mean pay ratio
£67,565
£103,527
51:1
£60,788
£93,612
49:1
£58,869
£90,335
47:1
£55,000
£80,670
38:1
£59,988
£87,982
48:1
66:1
63:1
63:1
50:1
51:1
Option A was used to calculate the pay and benefits 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 2023 (full-time equivalent), and the respective salary and pay and benefits figures for each quartile are set out
in the table above. Benefits for UK employees include any pension, but pension is excluded for Executive Directors as they are not
entitled to pension benefits under the Remuneration Policy. The data disclosed excludes employees who are not integrated into
Unilever’s global reward structure and human resources information system.
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 on page 149. 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.
The mean pay ratio has slightly increased in 2023 due to a higher fixed pay on the appointment of Hein Schumacher as CEO from
1 July 2023. Also, fixed pay and annual bonus for Alan Jope and Hein Schumacher are both counted for June 2023. Benefit costs
increased for CEO due to the inclusion of Hein Schumacher's relocation. The annual bonus outcome was higher in 2023 than
2022 and variable pay makes up a higher proportion of remuneration for the CEO compared to other employees. The pay,
reward and progression policies within Unilever are consistent as the Remuneration Policy is applicable across our 15,000+
managers throughout the whole business worldwide.
We are also 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 regulations require us to show
the percentages below based on employees of our PLC top company only, which forms a relatively small and unrepresentative
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 on page 149), these required figures are set out on page 151.
150
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FINANCIAL STATEMENTS
Directors' Remuneration Report
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 Alan Jope (CEO), Hein Schumacher (CEO), Graeme Pitkethly (CFO) and PLC’s employees (based on total full-time
equivalent total reward for the relevant financial year) pursuant to UK requirements. Figures for the Executive Directors are
calculated based on the single figure table on page 132 (1 January to 30 June 2023 for Alan Jope and 1 June to 31 December
2023 for Hein Schumacher). Remuneration for Hein Schumacher as CEO in 2023 is compared to remuneration he received as
a Non-Executive Director in 2022, which can be found on page 147.
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 146.
% change from 2022 to 2023
% change from 2021 to 2022(e)
% change from 2020 to 2021(e)
% change from 2019 to 2020(e)
% change from 2018 to 2019(e)
CEO: Alan Jope(a)
CEO: Hein Schumacher(b)
CFO(c)
PLC employees(d)
CEO
CFO
PLC employees
CEO
CFO
PLC employees
CEO
CFO
PLC employees
CEO
CFO
PLC employees
Fixed pay
-50.0 %
3480.6 %
6.0 %
0.2 %
1.8 %
1.7 %
-4.3 %
1.7 %
1.8 %
-19.3 %
4.0%
3.0%
1.7 %
-9.5%
4.2%
15.0%
Other benefits
(not including
pension)
-56.9 %
n/a
31.3 %
-12.1 %
34.2 %
2.1 %
7.4 %
35.7 %
23.7 %
-2.2 %
36.6%
40.7%
30.2%
-92.3%
4.8%
-5.2%
Bonus
-56.8 %
n/a
-8.3 %
-19.2 %
67.0 %
67.0 %
57.0 %
71.6 %
71.7 %
-10.6 %
-39.1%
-39.7%
-3.0%
-7.4%
7.9%
9.7%
(a)
(b)
(c)
(d)
(e)
The decrease in fixed pay, benefits and bonus for Alan Jope is because he stepped down as CEO on 30 June 2023 and therefore his remuneration in the single figure
table is pro-rated from 1 January to 30 June 2023. See page 144 for details of Alan Jope's remuneration from 1 July 2023.
The increase in fixed pay for Hein Schumacher is because he was appointed on 1 June 2023 and became CEO on 1 July 2023, whereas he was a Non-Executive Director
from 4 October 2022 to 31 May 2023. As a Non-Executive Director, Hein was not eligible for an annual bonus and did not receive any benefits in 2022. See page 146
for Non-Executive Director single figure of remuneration in 2022 and 2023 and page 147 for percentage change in remuneration of Non-Executive Directors.
The increase in fixed pay for the CFO in 2023 reflects a 6% pay increase awarded to Graeme Pitkethly from 1 January 2023, as disclosed in the 2022 Directors'
remuneration report. The increase in benefits is due to increased insurance premiums, legal fees and fluctuation in exchange rates. The decrease in annual bonus
reflects a performance outcome of 133% for 2022 compared to 115% for 2023.
For the PLC employees, fixed pay numbers 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 acting-up allowance, transport allowance, and fixed pay protection
allowance. The decrease in annual bonus reflects a performance outcome of 133% for 2022 compared to a bonus pool of 115% for 2023. Figures are also affected by
changes in the average sterling: euro exchange rates, as well as changes in the number of employees, including changes in ULE membership. The data disclosed
excludes employees who are not integrated into Unilever’s global reward structure and human resources information system.
Please see the relevant Directors' remuneration report for details of the percentage change in remuneration of Executive Directors from previous years.
Unilever Annual Report and Accounts 2023
151
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FINANCIAL STATEMENTS
Directors' Remuneration Report
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 represents 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 page194 for details).
Includes share buyback of €1,507m in 2023 and €1,509m in 2022.
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)(a)
Annual bonus award rates against
maximum opportunity
GSIP performance shares vesting rates
against maximum opportunity
MCIP matching shares vesting rates against
maximum opportunity
PSP performance shares vesting rates
against maximum opportunity
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
9,561
10,296
8,370
11,661
11,726
4,894
3,447
4,890
5,395
6,070
66%
92%
92%
100%
51%
55%
32%
54%
89%
77%
61%
49%
35%
74%
66%
60%
n/a
n/a
n/a
n/a
81%
65%
47%
99%
88%
n/a
42%
44%
35%
44%
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
32%
(a)
Based on combined single figure of remuneration for Alan Jope and Hein Schumacher, as set out on page 132.
152
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FINANCIAL STATEMENTS
Directors' Remuneration Report
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 95 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 2023, he
received an annual fee of €121,266 (£105,500) (2022: €115,404 (£98,208)) (of which 25% of his basic fee was delivered in Pearson
shares in accordance with Pearson’s remuneration policy) based on an average exchange rate over 2023 of €1 = £0.8700. Figures
for 2022 have been translated in euros based on an average exchange rate over 2022 of €1 = £0.8510.
Shareholder voting
Unilever remains committed to ongoing shareholder dialogue and takes an active interest in voting outcomes. In the event of a
substantial vote against a resolution in relation to Directors’ remuneration, Unilever would seek to understand the reasons for
any such vote and would set out in the following Annual Report and Accounts any actions in response to it, as we did in 2023
following the vote on the Directors' remuneration report at the AGM, as set out in the Chair letter on page 116. For more
information, see the remuneration section of our website.
The following table sets out actual voting in respect of this and the previous report:
Voting outcome
2022 Directors' Remuneration Report (2023 AGM)
(excluding the Directors' Remuneration Policy)
2021 Directors' Remuneration Policy (2021 AGM)
For
Against
Withheld
41.97%
93.51%
58.03%
82,534,318
6.49%
8,161,369
The Directors' Remuneration Report has been approved by the Board, and signed on its behalf by Maria Varsellona, Chief Legal
Officer and Group Secretary.
Unilever Annual Report and Accounts 2023
153
154
Unilever Annual Report and Accounts 2023
Financial Statements
156 Statement of Directors’ Responsibilities
157 KPMG LLP’s Independent Auditor’s Report
173 Consolidated Financial Statements Unilever Group
176 Notes to the Consolidated Financial Statements
227 Company Accounts Unilever PLC
230 Notes to the Company Accounts Unilever PLC
234 Group Companies
245 Shareholder information – Financial calendar
246 Additional Information for US Listing Purposes
Unilever Annual Report and Accounts 2023
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FINANCIAL STATEMENTS
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. In accordance with
Disclosure Guidance and Transparency Rule (“DTR”) 4.1.16R, the
financial statements will form part of the annual financial report
prepared under Disclosure Guidance and Transparency Rule (“DTR”)
4.1.17R and 4.1.18R. The auditor's report on these financial statements
provides no assurance over whether the annual financial report has
been prepared in accordance with those requirements. The Directors
are also 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 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, and 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
Under company law the directors must not approve the financial
statements unless they are satisfied that they give a true and fair view
of the state of affairs of the Group and parent Company and of the
Group’s profit or loss for that period.
Under applicable law and regulations, the directors are also
responsible for preparing a Strategic Report, Directors’ Report,
Directors’ Remuneration Report and Corporate Governance Statement
that complies with that law and those regulations.
Each of the Directors confirms that, to the best of his or her knowledge:
■ The Unilever Annual Report and Accounts 2023, 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 Management 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 84 to 85.
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 64. In addition, we describe in notes 15 to 18 on pages 203
to 218 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 79.
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 12 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 71 to 78 for a discussion of Unilever’s principal risk
factors and to pages 70 to 79 for commentary on the Group’s approach
to risk management and control.
156
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FINANCIAL STATEMENTS
KPMG LLP’s Independent Auditor’s Report
To the members of Unilever PLC
1. Our opinion is unmodified
In our opinion the financial statements:
■ give a true and fair view of the state of the Group’s and of the Parent Company’s affairs as at 31 December 2023, and of the Group’s and Parent
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.
What our opinion covers
We have audited the Group and Parent Company financial statements of Unilever PLC (“the Company”) for the year ended 31 December 2023
(FY23) included in the Unilever Annual Report and Accounts 2023, which comprise:
Group (Unilever PLC and its subsidiaries)
Parent Company (Unilever PLC)
■ Consolidated income statement
■ Consolidated statement of comprehensive income;
■ Consolidated statement of changes in equity;
■ Consolidated balance sheet;
■ Consolidated cash flow statement; and
■ Notes 1 to 27 to the consolidated financial statements, including the
■ Income statement,
■ Statement of comprehensive income;
■ Statement of changes in equity;
■ Balance sheet;
■ Statement of cash flows; and
■ Notes 1 to 15 to the Company Accounts, including the accounting
accounting information and policies in note 1.
information and policies.
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 and
matters included in this report are consistent with those discussed and included in our reporting to the Audit Committee (“AC”).
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.
2. Overview of our Audit
Key Audit Matters
Vs FY22
Revenue Recognition – Rebates
(Group)
Indirect tax contingent liabilities
in Brazil (Group)
Investments in subsidiaries
(PLC only)
↔
↔
↔
Item
4.1
4.2
4.3
Factors Driving our view
of risks
Following the conclusion of our FY22 audit,
and considering developments affecting the
Group since then, we have performed a risk
assessment for our FY23 audit.
FY23 continued to be a year marked by high
commodity and other input cost inflation
affecting many countries the Group operates
and sells in. Price increases and the impact on
volumes sold, together with the broader impact
on margin and operating profit were areas
considered during this risk assessment. We
continue to have a focus on revenue recognition
and the recognition of discounts (which is
netted against revenue) as a Key Audit Matter
(see 4.1 below).
We have not observed a change in the risk
associated with the Indirect tax contingent
liabilities in Brazil, as further discussed in
4.2 below.
The carrying amount of Investment in
subsidiaries held at cost in Unilever PLC's
accounts continues to be a material proportion
of its total company assets and hence
continues to be a Key Audit Matter for Unilever
PLC accounts only (see 4.3 below).
Unilever Annual Report and Accounts 2023
157
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FINANCIAL STATEMENTS
Independent Auditor's Report
2. Overview of our Audit (continued)
Audit Committee
Interaction
During the year, the Audit Committee (AC) met 8 times. KPMG are invited to attend all AC meetings and are provided
with an opportunity to meet with the AC in private sessions without the Executive Directors being present. For each
Key Audit Matter, we have set out communications with the AC in item 6, including matters that required particular
judgement for each.
The matters included in the Audit Committee Chair’s report on page 107 are materially consistent with our
observations of those meetings.
Total audit fee
Audit related fees (including interim review)
Other services
Non-audit fee as a % of total audit and audit
related fee %
Date first appointed
Uninterrupted audit tenure
Next financial period which requires a tender
Tenure of Group engagement partner
Average tenure of component signing partners
€23m*
*Total audit fee
includes 0.1m
related to non-
statutory audits
€0.8m
€0.5m
2%
14 May 2014
10 years
2034
3 years
3 years
Our Independence
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.
We have not performed any non-audit services
during FY23 or subsequently which are
prohibited by the FRC Ethical Standard.
Audit tenure
We were first appointed as auditor by the
shareholders for the year ended 31 December
2014. The period of total uninterrupted
engagement is for the 10 financial years ended
31 December 2023.
Following a competitive tender process
undertaken in FY22, the Board of Unilever
announced its intention to reappoint KPMG as
its external auditor for the financial year end
31 December 2024, subject to shareholder
approval at its 2024 Annual General Meeting.
The Group engagement partner is required to
rotate every 5 years. As these are the third set
of the Group’s financial statements signed by
Jonathan Mills, he will be required to rotate off
after the FY25 audit.
The average tenure of partners responsible for
component audits as set out in item 7 below is 3
years, with the shortest being 1 and the longest
being 7.
158
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FINANCIAL STATEMENTS
Independent Auditor's Report
2. Overview of our Audit (continued)
Materiality
(Item 6 below)
The scope of our work is influenced by our view
of materiality and our assessed risk of material
misstatement.
We have determined overall materiality for
the Group financial statements as a whole
at €450m (FY22: €380m) and for the Parent
Company financial statements as a whole at
£295m (FY22: £296m).
Consistent with FY22, we determined that
Group’s normalised profit before tax from
continuing operations (PBTCO) remains the
benchmark for the Group as it is most
appropriate and reflective of the business,
being a profit seeking company.
To reflect the Group’s normalised PBTCO,
we have normalised the profit before tax
benchmark by excluding the profit from the
sale of Suave brand and loss from sale of
Dollar Shave Club brand.
As such, we based our Group materiality on
Group’s normalised PBTCO of €8.9bn, of which it
represents 5.06% (FY22: 4.8%).
Materiality for the Parent Company financial
statements was determined with reference to a
benchmark of the Parent Company total assets
of which it represents 0.4% (FY22: 0.4%).
Consistent with FY22, we determined that total
assets remains the benchmark for the Parent
Company as it is most appropriate and
reflective of the business, being a holding
company.
Unilever Annual Report and Accounts 2023
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FINANCIAL STATEMENTS
Independent Auditor's Report
2. Overview of our Audit (continued)
Group scope
(Item 7 below)
We performed our risk assessment and
planning procedures to determine which of the
Group’s components are likely to include risks of
material misstatement to the Group financial
statements, the type of procedures to be
performed at these components and the extent
of involvement required from our component
auditors around the world.
Coverage of Group financial statements
We scoped:
■ 2 components (Hindustan Unilever Limited
(India) and Conopco, Inc. (United States of
America)) as individually financially
significant and subject to full scope audits;
■ 12 further components subject to full scope
audits, but not individually financially
significant;
■ 23 components subject to ‘audit of specific
account balance’ to obtain further audit
coverage.
Certain Group transactions originate in various
countries and are processed in the Group’s
operating centres in China, India, Mexico,
Philippines and Poland. We have established
audit teams to perform centralised testing on
behalf of our component teams in these
locations. We tested the relevant key controls
that operate in these operating centres. Other
procedures that were performed centrally are
set out in more detail in item 7 below.
In addition, we have performed Group level
analysis on the remaining components to
determine whether further risks of material
misstatement exist in those components.
We consider the scope of our audit, as
communicated to the Audit Committee, to be
an appropriate basis for our audit opinion.
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FINANCIAL STATEMENTS
Independent Auditor's Report
2. Overview of our Audit (continued)
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 pages 43 to 47 and in the CTAP and TCFD sections on pages 48 to
55.
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 identified goodwill and indefinite-life intangibles,
property, plant and equipment and defined benefit plan assets as balance sheet line items that could potentially
be significantly impacted. They have reviewed these line items in detail and concluded that the impact of climate
related risk is immaterial due to mitigation actions taken against those risks. Therefore, 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 2023.
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. The outcome of the impairment tests are not considered to be sensitive. 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.
3. Going concern, viability and principal risks and uncertainties
The Directors have prepared the financial statements on the going concern basis as they do not intend to liquidate the Group or the Parent
Company or to cease their operations, and as they have concluded that the Group’s and the Parent 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”).
Going concern
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:
■ Commodity inflation and pricing
■ Landing Pricing and Volume Sensitivity
Our conclusions
■ 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 Parent Company's ability to
continue as a going concern for the going concern period;.
We also considered realistic second order impacts, such as business
transformation and portfolio management failure 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 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.
■ We have nothing material to add or draw attention to in relation
to the directors’ statement on page 156 on the use of the going
concern basis of accounting with no material uncertainties that
may cast significant doubt over the Group and Parent
Company’s use of that basis for the going concern period, and
we found the going concern disclosure on page 177 and 230 to
be acceptable; and
■ The same statement under the Listing Rules set out on page 156
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
Parent Company will continue in operation.
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3. Going concern, viability and principal risks and uncertainties (continued)
Disclosures of emerging and principal risks and longer-term viability
Our reporting
We have nothing material to add or draw attention to in relation to
these disclosures.
We have concluded that these 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 Parent Company’s longer-term
viability.
Our responsibility
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 those procedures, we have nothing material to add or draw
attention to in relation to:
■ the directors’ confirmation within the Viability Statement on page 79 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 Risks 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 79
under the Listing Rules.
4. Key Audit matters
What we mean
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 include below the Key Audit Matters in decreasing order of audit significance, together with our key audit procedures to address those matters
and our results from those procedures. These matters were addressed, and our results are based on procedures undertaken, for the purpose of our
audit of the financial statements as a whole. We do not provide a separate opinion on these matters.
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4. Key Audit matters (continued)
4.1 Revenue recognition – Rebates (Group)
Financial Statement Elements
Our assessment of risk vs FY22
Our results
Off-invoice rebate accruals €4,822m
€4,557m
FY23
FY22
↔
Our assessment of the risk
is similar to FY22
FY23: Acceptable
FY22: Acceptable
Rebates fraud risk
Our response to the risk
Revenue is measured net of rebates, price reductions, incentives given
to customers, promotional couponing and trade communication costs
(together referred to as ‘’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 2023 (“rebate accrual”).
Therefore, there is a risk of revenue being materially misstated as a
result of incorrect calculation of the variable consideration.
Within revenue recognition we identified the off-invoice rebate accrual
as a Key Audit Matter, as in a number of markets the off-invoice 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 off-invoice rebate
accrual.
There is a risk that revenue may be materially overstated due to fraud
through manipulation of the off-invoice rebate accrual recognised
resulting from the pressure management may feel to achieve
performance targets.
Our procedures to address the risk included:
■ Risk Assessment: We assessed the accuracy of the Group’s off-
invoice accrual by comparing, for the Group’s relevant markets, the
prior year off-invoice accrual to actual spend incurred. Where we
identified significant differences, we instructed our component
audit teams to understand the business rationale. We analysed the
results of our comparison in aggregate and over time to identify
trends that could suggest management bias in their estimation.
■ Controls: 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 off-invoice rebate accrual and controls over rebate claims.
Where control deficiencies were identified, we identified and
evaluated and, where relevant, relied upon the compensating
controls.
■ Test of Detail: We tested a selection of recorded off-invoice rebate
accruals after 31 December 2023 and assessed whether the accrual
is recorded in the appropriate period.
■ Test of Detail: We tested a selection of payments made after
31 December 2023 and assessed whether the original accrual was
recorded in the appropriate period.
■ Journals: We critically assessed manual journals recorded to revenue
to identify unusual or irregular items and obtained underlying
documentation for those identified as unusual or irregular.
■ Evaluating Transparency: We evaluated the adequacy of the Group’s
disclosures in respect of rebate accrual.
Communications with the Unilever PLC’s Audit Committee
Our discussions with and reporting to the Audit Committee included:
■ Our approach to the audit of rebates including details of planned substantive procedures and the extent of our control reliance
■ A retrospective review on the prior year-end accruals in markets we considered contains higher risk
■ Our conclusions on the appropriateness of the methodology and value of the off-invoice rebate accrual as at year-end
Areas of particular auditor judgement
We did not identify any areas of particular auditor judgement.
Our results
The results of our testing were satisfactory (FY22: satisfactory) and we considered the rebate accrual disclosures to be acceptable (FY22:
acceptable).
Further information in the Annual Report and Accounts: See the Report of the Audit Committee on page 107 for details on how the Audit Committee
considered revenue recognition as an area of significant attention, page 180 for the accounting policy on revenue recognition, and note 2, 13 and
14 for the financial disclosures.
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4. Key Audit matters (continued)
4.2 Indirect tax contingent liabilities in Brazil (Group)
Financial Statement Elements
Our assessment of risk vs FY22
Our results
Contingent liabilities
disclosed (regarding
to a 2001 corporate
reorganisation)
FY23
FY22
€3,757m
€3,292m
↔
Our assessment of the risk
is similar to FY22
FY23: Acceptable
FY22: Acceptable
Taxation dispute outcome
Our response to the risk
The Group has reported contingent liabilities for indirect taxes relating
to disputes with the Brazilian authorities related to a 2001 corporate
reorganisation. The total amount of the tax assessments received in
respect of this matter is €3,757 million as of 31 December 2023. There
also remains the possibility of further material tax assessments related
to the same matter for periods not yet assessed.
We identified the evaluation of the 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. 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 judgement and specialised skills were required in
evaluating the possible future outcomes of investigations by the
authorities, for assessments received to ascertain if a liability exists
and in evaluating if the exposure of possible material tax assessments
related to the same matter for periods not yet assessed can be
estimated.
Our procedures to address the risk included:
■ Controls: We evaluated the design and tested the operating
effectiveness of certain internal controls related to the indirect tax
process including controls related to the assessment of the outcome
of investigations if a liability exists and around evaluating exposure
to possible material tax assessments for periods not yet assessed.
■ Our Tax Expertise: We involved local indirect tax professionals with
specialised skills and knowledge who assisted in:
■ assessing the appropriateness of the classification as contingent
liabilities compared to the nature of the exposures, applicable
regulations and related correspondence with the tax authorities;
and
■ assessing the confirmation received from the Group’s external
lawyers, considering any impact of legal precedent, case law and
any historical and recent judgements passed by the court
authorities which could impact likelihood of outflow of economic
resources.
■ Retrospective review: We inspected assessments received from tax
authorities and compared their consistency, occurrence and
amounts retrospectively over time to previous management
estimates made in the periods this matter was not yet assessed.
■ Evaluating Transparency: We evaluated the adequacy of the Group’s
disclosures in respect of indirect tax contingent liabilities in Brazil.
Communications with the Unilever PLC’s Audit Committee
Our discussions with and reporting to the Audit Committee included::
■ Our approach to the audit of the indirect tax contingent liabilities in Brazil including details of planned substantive procedures and the extent
of our control reliance
■ Our conclusions on the appropriateness of the in-year movements in the related contingent liabilities disclosures
■ The adequacy of the disclosure of the contingent liabilities disclosed related to the Brazil indirect tax dispute
Areas of particular auditor judgement
We identified the following as the areas of particular auditor judgement:
■ The assessment of the outcome of investigations by the authorities, if a liability exists and in making an estimate of any economic outflows.
Our results
The results of our testing were satisfactory (FY22: satisfactory) and we considered the Brazilian indirect tax contingent liability disclosures to be
acceptable (FY22: acceptable).
Further information in the Annual Report and Accounts: See the Report of the Audit Committee on page 107 for details on how the Audit Committee
considered indirect tax provisions and contingent liabilities as an area of significant attention, page 219 and 220 for the accounting policy on
provisions and contingent liabilities respectively, and note 19 and 20 for the financial disclosures.
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4.3 Investments and subsidiaries (Parent company only)
Financial Statement Elements
Our assessment of risk vs FY22
Our results
FY23
FY22
↔
Our assessment of the risk
is similar to FY22
FY23: Acceptable
FY22: Acceptable
Investments in subsidiaries €76,313m
€76,270m
Recoverability of parent company’s investments in subsidiaries
Our response to the risk
Low risk, high value
The carrying amount of the investments in subsidiaries held at cost less
impairment represent 98% (2022: 98%) of Unilever PLC total company
assets.
We do not consider the recoverability of these investments to be at a
high risk of significant misstatement, or to be subject to a significant
level of judgement. However, due to their materiality in the context of
the PLC Company Accounts, this is considered to be an area which
had significant effect on our overall audit strategy and allocation
of resources in planning and completing our audit of Unilever PLC.
We performed the tests below 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.
■ Assessing the group audit: We assessed the conclusions reached in
the Group impairment workings to the recoverability of Unilever PLC’s
investments in subsidiaries. We assessed whether the conclusions
reached gave rise to any indications of impairment which would be
appropriate in assessing the recoverability of parent company’s
investment in subsidiaries.
■ Our sector experience: We evaluated the current level of trading,
including identifying any indications of a downturn in activity
considering our knowledge of the Group and the industry.
■ Benchmarking assumptions: We challenged key assumptions used
in the impairment analyses of the Group’s Cash Generating Units by
benchmarking assumptions such as discount rates and growth rates
to external data points, using our own valuation specialist, and
performing sensitivity analysis.
Communications with the Unilever PLC’s Audit Committee
Our discussions with and reporting to the Audit Committee included:
■ Our approach to the audit of the recoverability of the parent company’s investments in subsidiaries including details of planned substantive
procedures and the extent of our control reliance
■ An assessment of indicators of impairment from the conclusion reached in the group impairment workings or company specific adjustments
Areas of particular auditor judgement
■ The assessment of the assumptions used in determining the recoverable value of the CGU to which the investments belong, and assessing
whether an impairment exists.
Our results
The results of our testing were satisfactory (FY22: satisfactory) and we found the carrying amount of the Unilever PLC investments in subsidiaries
with no impairments to be acceptable (FY22: acceptable).
Further information in the Annual Report and Accounts: See page 230 for the accounting policy on Investments in subsidiaries, and note 4 to the
Company Accounts for the financial disclosures.
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5. Our ability to detect irregularities, and our response
Fraud – Identifying and responding to risks of material misstatement due to fraud
Fraud risk assessment
Risk communications
Fraud risks
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 performance targets, we
performed procedures to address the risk of management override of controls and the risk of fraudulent revenue
recognition, in particular:
■ the risk that Group and component management may be in a position to make inappropriate accounting entries;
and
■ the risk that revenue is materially overstated due to fraud through manipulation of the off-invoice rebate accrual
recognised.
The fraud risk in relation to revenue recognition – rebates is included as a Key Audit Matter as per item 4.1.
Link to KAMs
Further detail in respect of fraud risks identified over the risk that revenue may be overstated due to fraud through
manipulation of the off-invoice rebate accrual is contained within the Key Audit Matter disclosures in item 4.1 of this
report.
Procedures to address
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 107.
We also performed procedures including:
■ Identifying manual journal entries to test for all in-scope components based on risk criteria, such as
management postings and timing being after the closure of the sales ledger, and comparing the identified
entries to supporting documentation.
■ Evaluating the business purpose of significant unusual transactions.
■ Assessing significant accounting estimates for bias.
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5. Our ability to detect irregularities, and our response (continued)
Laws and regulations – Identifying and responding to risks of material misstatement relating to compliance with laws
and regulations
Laws and regulations risk
assessment
Risk communications
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.
Direct laws context and
link to Audit
The potential effect of these laws and regulations on the financial statements varies considerably. 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. We assessed
the extent of compliance with these laws and regulations as part of our procedures on the related financial
statement items.
Most significant indirect
law/regulation areas
The Group is subject to many 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)
■ Compliance with sanctions (reflecting the Group’s dealings in various geographies with active sanctions)
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.
Link to KAMs
Laws and Regulations are linked to the Brazil Indirect Tax Key Audit Matter identified in item 4.2 of this report. Tax
legislation is noted as a law that directly affects the financial statements.
Indirect tax contingent liabilities in Brazil are disclosed in note 20 to the Group financial statements on page 220.
Context
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 fraud 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.
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6. Our determination of materiality
The scope of our audit was influenced by our application of materiality. We set quantitative thresholds and overlay qualitative considerations to
help us determine the scope of our audit and the nature, timing and extent of our procedures, and in evaluating the effect of misstatements, both
individually and in the aggregate, on the financial statements as a whole.
€450m
(FY22: €380m)
Materiality for the
Group Financial
Statements as a whole
What we mean
A quantitative reference for the purpose of planning and performing our audit.
Basis for determining materiality and judgements applied
Materiality for the Group financial statements as a whole was set at €450m (FY22: €380m). This was determined with
reference to a benchmark of Group’s normalised PBTCO.
Consistent with FY22, we determined that Group’s normalised PBTCO remains the main benchmark for the Group.
We consider profit before tax, excluding certain identified items, as a key indicator of performance and the basis for
earnings, and therefore the primary focus of a reasonable investor. We have inspected analyst consensus data and
other investor commentary for signals of alternate significant influencers of economic decisions. No revisions to our
calculation methodology resulted therefrom.
To reflect the Group’s normalised PBTCO, we have normalised the profit before tax benchmark by excluding the
one-off profit from the sale of the Suave brand and the one-off loss from the sale of Dollar Shave Club brand.
Our Group materiality of €450m was determined by applying a percentage to the Group's normalised PBTCO. When
using a benchmark of Group’s normalised PBTCO to determine overall materiality, KPMG’s approach for public
interest entities considers a guideline range of up to 5% of the measure. In setting Group materiality at planning, we
determined materiality using the forecast of Group’s normalised PBTCO. This represents 5.06% (FY22: 4.8%) of the
final Group’s normalised PBTCO value. We considered the materiality amount for the financial statements as a
whole and concluded that it remained appropriate.
Materiality for the Parent Company financial statements as a whole was set at £295m (FY22: £296m), determined
with reference to a benchmark of Parent Company total assets,of which it represents 0.4% (FY22: 0.4%).
€337m
(FY22: €285m)
Performance materiality
What we mean
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.
Basis for determining performance materiality and judgements applied
We have considered performance materiality at a level of 75% (FY22: 75%) of materiality for Group financial
statements as a whole to be appropriate.
The Parent Company performance materiality was set at £221m (FY22: £222m), which equates to 75% (FY22: 75%) of
materiality for the Parent Company financial statements as a whole.
We applied this percentage in our determination of performance materiality because we did not identify any
factors indicating an elevated level of risk.
€22m
(FY22: €20m)
Audit misstatement
posting threshold
What we mean
This is the amount below which identified misstatements are considered to be clearly trivial from a quantitative
point of view. We may become aware of misstatements below this threshold which could alter the nature, timing
and scope of our audit procedures, for example if we identify smaller misstatements which are indicators of fraud.
This is also the amount above which all misstatements identified are communicated to Unilever PLC’s Audit
Committee.
Basis for determining the audit misstatement posting threshold and judgements applied
We set our audit misstatement posting threshold at 5% (FY22: 5%) of our materiality for the Group financial
statements. We also report to the Audit Committee any other identified misstatements that warrant reporting on
qualitative grounds.
The overall materiality for the Group financial statements of €450m (FY22: €380m) compares as follows to the main financial statement caption
amounts:
Total Group Revenue
Group profit before tax
(normalised)
Total Group Assets
FY23
FY22
FY23
FY22
FY23
FY22
Financial statement
Caption
Group Materiality as %
of caption
€59,604m
€60,073m
€8,897m
€8,034m
€75,266m
€ 77,821m
0.75%
0.63%
5.06%
4.73%
0.60%
0.49%
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7. The scope of our Audit
Group scope
What we mean
How the Group audit team determined the procedures to be performed across the Group.
The Group operates through a significant number of legal entities and these form reporting components for Group
reporting purposes. These are primarily country based. In order to determine the work performed at the reporting
component level, we identified those components which we considered to be of individual financial significance,
those which were significant due to risk and those remaining components on which we required procedures to be
performed to provide us with the evidence we required in order to conclude on the group financial statements as a
whole.
We determined individually financially significant components as those contributing at least 10% (FY22: 10%) of
revenue. We selected revenue because these are the most representative of the relative size of the components. We
performed full scope audits on individually financially significant components, which contributed 27% (FY22: 26%) of
total Group revenue.
To provide sufficient coverage over the Group’s Key Audit Matters, we performed audits of 14 components (FY22: 14),
which are included within ‘Full scope audit’ below, as well as audit of one or more account balances, including
revenue, related accounts receivables and cash, at a further 23 components (FY22: 23), which are included within
‘Audit of one or more 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.
Scope
Full scope audit
Audit of one or
more account
balances
Total
Number of
components
14
(14)
23
(23)
37
(37)
Range of
materiality
applied
€6m – €352m
(€6m – €348m)
€2m – €200m
(€4m – €150m)
Group revenue
Total profits and
loses that made
up Group PBT
Group total
assets
54%
(53%)
23%
(23%)
77%
(76%)
32%
(54%)
38%
(17%)
70%
(71%)
71%
(70%)
10%
(10%)
81%
(80%)
The Group operates centralised operating centres that are relevant to our audit in India, Mexico, Poland, Philippines
and China. These operating centres 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. We
have also performed audit procedures centrally across the Group, in the following areas:
■ Consolidation of the financial information;
■ Testing of IT systems and configurations;
■ Journal entry analysis;
■ Using technology to perform a 4-way sales match over invoices (3-way invoice to order and delivery document,
plus on-invoice rebate deductions) to verify the accuracy and timeliness of revenue recorded;
■ For some components, using technology to perform a line-by-line analysis of the unwind of prior year rebate
accruals to retrospectively test accuracy and identify risks for some countries;
■ Indefinite life intangibles (trademarks) and goodwill impairment testing;
■ Items excluded from Group PBTCO;
■ Certain uncertain tax positions;
■ Actuarial assumptions to determine the Group’s Defined Benefit Obligations;
■ Climate considerations and impact on the financial statements.
The Group team communicated, to the component teams, the results of certain audit procedures performed
centrally but relevant to component teams.
In addition, we have performed Group level analysis on the remaining components to determine whether further
risks of material misstatement exist in those components.
None of the out-of-scope entities individually represented more than 2% total Group revenue or total Group assets,
or more than 5% of total profits and losses making up Group profit before taxation.
Impact of controls on our Group audit
Unilever relies on the effectiveness of internal controls over financial reporting at the Group level, in various shared
services centres (‘operating centres’) and at country level, and operates both automated and manual controls.
We identified a number of key finance IT systems relevant to our Group audit including the main ERP finance system,
the consolidation system, and other specific IT systems that support automated controls across the Group. The
majority of these finance IT systems are maintained centrally and are used by many of the 37 in scope components.
Our central IT auditors assisted us in evaluating general IT controls for these systems, as well as automated controls
and system generated reports relied upon by management in financial reporting. For finance IT systems, automated
controls and system generated reports maintained at country level, our country IT auditors assisted component
auditors in their evaluation.
Our central testing audit teams evaluated the design and operating effectiveness of key manual process level
controls in the Group’s central operating centres. Component auditors further evaluated the design and operating
effectiveness of key manual controls that operate at country level to address specific local financial reporting risks
that could impact the group audit opinion. This controls testing covered the key transactional processes of the
Group. Results from all testing were communicated to the group audit team and considered as part of our audit.
At the Group level, we evaluated the design and operating effectiveness of key controls in processes operated
centrally at the Group.
Unilever Annual Report and Accounts 2023
169
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FINANCIAL STATEMENTS
Independent Auditor's Report
7. The scope of our Audit (continued)
Impact of the above on our audit:
■ In the majority of audit areas, we relied on general IT controls, automated controls and manual controls in
determining our audit approach.
■ We identified some control deficiencies during the audit, however, for the majority of control deficiencies
identified, compensating controls were identified and evaluated and, where relevant, relied upon.
■ The control deficiencies identified did not lead to significant changes to our planned audit approach.
Scope of Parent Company audit
For the audit of the Unilever PLC company financial statements, the scope of the audit work performed was mainly
substantive due to its profile of being a holding company.
Group Audit team
oversight
What we mean
The extent of the Group audit team’s involvement in component audits.
As part of determining the scope and preparing our audit plan and strategy, the Group audit team held various
meetings with our component auditors across the world to discuss key audit risks and obtain input from component
teams.
Instructions
The Group audit team instructed component auditors as to the significant areas to be covered, including the
relevant risks detailed above and the information to be reported back.
The Group audit team allocated component’s materiality and approved the statutory materiality when components
used it for reporting purposes, having regard to the mix of size and risk profile of the components.
The group audit team also releases audit notices on a regular basis (as needed) to component audit teams to
provide continuous updates regarding the overall audit.
Virtual meetings and calls
The Group audit team held regular virtual meetings with the component auditors in key locations and majority of
the other locations in scope for group reporting. These meetings were held to understand the business, any updates
to the risk assessment and any issues and findings. 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.
Global conferences
The Group team hosted two virtual conferences in May and September 2023. These conferences emphasised key
areas of the group audit instructions and allowed for the sharing of risk assessment considerations and group
updates, and allowed the group team to enhance our understanding of the component audits and two-way
communication.
■ In May, the conference covered key group developments, the origins of risk and key messages regarding
independence, data analytics, controls and group team’s involvement with components.
■ In September, the Group audit team held a virtual conference to provide a further update on risk assessment, the
Group’s year-to-date results, reminders for controls reporting and an overview of data and analytics tools used in
the Unilever audit.
Site visits
The Group audit team visited the following component teams during the year:
■ Operating Centres: India, Mexico, Poland
■ Other component auditors: China, Egypt, Germany, India, Mexico, Poland, United Kingdom, United States and
Vietnam and conducted a virtual site visit to Argentina, Brazil, Canada, France, Indonesia, Netherlands, Nigeria,
Philippines, South Africa and Thailand.
Review of work papers
The Group audit team also inspected selections of the component team’s key work papers related to significant
risks and assessed the appropriateness of conclusions and consistencies between reported findings and work
performed.
We deem our oversight of component auditors was appropriate.
170
Unilever Annual Report and Accounts 2023
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Independent Auditor's Report
8. Other information in the Annual Report
The directors are responsible for the other information presented in the Annual Report 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.
All other information
Our responsibility
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.
Our reporting
Based solely on that work we have not
identified material misstatements or
inconsistencies in the other information.
Strategic report and Directors' report
Our responsibility and reporting
Based solely on our work on the other information described above we report to you as follows:
■ 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
Our responsibility
We are required to form an opinion as to whether the part of the Directors’ Remuneration Report to
be audited has been properly prepared in accordance with the Companies Act 2006.
Corporate Governance Disclosures
Our responsibility
We are required to perform procedures to identify whether there is a material inconsistency between
the financial statements and our audit knowledge, and:
■ 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.
Our reporting
In our opinion the part of the Directors’
Remuneration Report to be audited has
been properly prepared in accordance
with the Companies Act 2006.
Our reporting
Based on those procedures, we have
concluded that each of these disclosures
is materially consistent with the financial
statements and our audit knowledge.
We are also required to review the part of the 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.
Other matters on which we are required to report by exception
Our responsibility
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 Parent Company, or returns adequate for
Our reporting
We have nothing to report in these
respects.
our audit have not been received from branches not visited by us; or
■ the Parent Company financial statements 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.
Unilever Annual Report and Accounts 2023
171
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Independent Auditor's Report
9. Respective responsibilities
Directors’ responsibilities
As explained more fully in their statement set out on page 156, the directors are responsible for: the preparation of the financial statements
including being satisfied that they give a true and fair view; 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. In addition, the Directors are responsible for
assessing the Group and Parent 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 Parent 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.
The Company is required to include these financial statements in an annual financial report prepared under the Disclosure Guidance and
Transparency Rules (“DTR”) 4.1.17R and 4.1.18R. This auditor’s report provides no assurance over whether the annual financial report has been
prepared in accordance with those requirements.
10. The purpose of our Audit work and to whom we own 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
7 March 2024
172
Unilever Annual Report and Accounts 2023
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Consolidated Financial Statements
Unilever Group
Consolidated income statement
for the year ended 31 December
Turnover
Operating profit
which includes:
Gain on disposal of ekaterra
Gain on disposal of Suave
Net finance costs
Pensions and similar obligations
Finance income
Finance costs
Net monetary gain/(loss) arising from hyperinflationary economies
Share of net profit/(loss) of joint ventures and associates
Other income/(loss) from non-current investments and associates
Notes
2
2
21
21
5
1
11
Profit before taxation
Taxation
Net profit
Attributable to:
Non-controlling interests
Shareholders’ equity
Earnings per share
Basic earnings per share (€)
Diluted earnings per share (€)
€ million
2023
59,604
9,758
–
497
€ million
2022
60,073
10,755
2,303
–
(486)
(493)
110
442
(1,038)
(142)
231
(22)
9,339
6A
(2,199)
7,140
653
6,487
2.58
2.56
7
44
281
(818)
(157)
208
24
10,337
(2,068)
8,269
627
7,642
3.00
2.99
€ million
2021
52,444
8,702
–
–
(354)
(10)
147
(491)
(74)
191
91
8,556
(1,935)
6,621
572
6,049
2.33
2.32
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
6C
15B
15B
€ million
€ million
€ million
2023
7,140
2022
8,269
2021
6,621
(28)
(510)
(27)
(1,461)
5,114
524
4,590
36
(473)
(91)
614
8,355
507
7,848
166
1,734
279
1,177
9,977
749
9,228
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 177 to 226 which form an integral part of the consolidated financial statements.
Unilever Annual Report and Accounts 2023
173
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Consolidated Financial Statements Unilever Group
Consolidated statement of changes in equity
for the year ended 31 December
€ million
31 December 2020
Profit or loss for the period
Other comprehensive income, net of tax:
Equity instruments gains/(losses)
Cash flow hedges gains/(losses)
Remeasurements of defined benefit pension plans
Currency retranslation gains/(losses)
Total comprehensive income
Dividends on ordinary capital
Share capital reduction(a)
Repurchase of shares(b)
Movements in treasury shares(c)
Share-based payment credit(d)
Dividends paid to non-controlling interests
Hedging gain/(loss) transferred to non-financial assets
Other movements in equity(e)
31 December 2021
Hyperinflation restatement to 1 January 2022
Adjusted opening balance
Profit or loss for the period
Other comprehensive income, net of tax:
Equity instruments gains/(losses)
Cash flow hedges gains/(losses)
Remeasurements of defined benefit pension plans
Currency retranslation gains/(losses)(f)
Total comprehensive income
Dividends on ordinary capital
Repurchase of shares(b)
Movements in treasury shares(c)
Share-based payment credit(d)
Dividends paid to non-controlling interests
Hedging gain/(loss) transferred to non-financial assets
Other movements in equity(g)
31 December 2022
Profit or loss for the period
Other comprehensive income, net of tax:
Equity instruments gains/(losses)
Cash flow hedges gains/(losses)
Remeasurements of defined benefit pension plans
Currency retranslation gains/(losses)(h)
Total comprehensive income
Dividends on ordinary capital
Cancellation of treasury shares(i)
Repurchase of shares(b)
Movements in treasury shares(c)
Share-based payment credit(d)
Dividends paid to non-controlling interests
Hedging gain/(loss) transferred to non-financial assets
Other movements in equity
31 December 2023
Called
up share
capital
92
–
Share
premium
account
73,472
–
Unification
reserve
(73,364)
–
Other
Retained
reserves
profit
(7,482) 22,548
6,049
–
Total
15,266
6,049
Non-
controlling
interests
2,389
572
Total
equity
17,655
6,621
–
–
–
–
–
–
–
–
–
–
–
–
–
92
–
92
–
–
–
–
–
–
–
–
–
–
–
–
–
92
–
–
–
–
–
–
–
(20,626)
–
–
–
–
–
(2)
52,844
–
52,844
–
–
–
–
–
–
–
–
–
–
–
–
–
52,844
–
–
–
–
–
–
–
(4)
–
–
–
–
–
–
88
–
–
–
–
–
–
–
–
–
–
–
–
–
52,844
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
147
276
–
1,025
1,448
–
–
147
276
1,728
1,028
9,228
–
–
1,728
3
7,780
(4,458) (4,458)
–
(3,018)
95
–
–
(171)
(82)
20,626
–
(143)
161
–
–
231
(73,364) (9,210) 46,745
154
(9,210) 46,899
7,642
(73,364)
–
–
–
–
(3,018)
(48)
161
–
(171)
147
17,107
154
17,261
7,642
(1,509)
106
–
–
(126)
(258)
–
(137)
177
–
–
15
(73,364) (10,804) 50,253
6,487
–
–
45
(92)
(474)
727
7,848
–
–
(474)
487
7,655
(4,356) (4,356)
(1,509)
(31)
177
–
(126)
(243)
19,021
6,487
(27)
(27)
(508)
(1,335)
4,590
–
–
(508)
294
6,273
(4,327) (4,327)
(5,278)
–
45
(92)
–
240
193
–
(27)
(27)
–
(1,629)
(1,683)
–
5,282
(1,507)
75
–
–
117
2
–
(98)
212
–
–
17
(73,364) (8,518) 47,052
(1,507)
(23)
212
–
117
19
18,102
19
3
6
149
749
–
–
–
–
–
(503)
(3)
7
2,639
–
2,639
627
166
279
1,734
1,177
9,977
(4,458)
–
(3,018)
(48)
161
(503)
(174)
154
19,746
154
19,900
8,269
(9)
1
1
(113)
507
–
–
–
–
(572)
(1)
36
(91)
(473)
614
8,355
(4,356)
(1,509)
(31)
177
(572)
(127)
(136)
21,701
7,140
107
2,680
653
(1)
–
(2)
(28)
(27)
(510)
(126) (1,461)
5,114
524
(4,327)
–
–
–
(1,507)
–
(23)
–
212
–
(521)
(521)
117
–
(2)
(21)
20,764
2,662
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
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.
Repurchase of shares reflects the cost of acquiring ordinary shares as part of the share buyback programme announced on 29 April 2021 and 10 February 2022.
Includes purchases and sales of treasury shares, and 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.
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.
Includes a hyperinflation adjustment of €280 million and €82 million related to the Welly acquisition.
Includes a hyperinflation adjustment of €514 million in relation to Argentina and Turkey.
Includes the following items related to the acquisition of Nutrafol: €(269) million non-controlling interest purchase option in other reserves and €99 million non-
controlling interest recognised on acquisition.
Includes a hyperinflation adjustment of €308 million in relation to Argentina and Turkey.
During 2023, 112,746,434 PLC ordinary shares held as treasury shares were cancelled. The amount paid to repurchase these shares was initially recognised in other
reserves and is transferred to retained profit on cancellation.
174
Unilever Annual Report and Accounts 2023
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Consolidated Financial Statements Unilever Group
Consolidated balance sheet
for the year ended 31 December
Assets
Non-current assets
Goodwill
Intangible assets
Property, plant and equipment
Pension asset for funded schemes in surplus
Deferred tax assets
Financial assets
Other non-current assets
Current assets
Inventories
Trade and other current receivables
Current tax assets
Cash and cash equivalents
Other financial assets
Assets held for sale
Total assets
Liabilities
Current liabilities
Financial liabilities
Trade payables and other current liabilities
Current tax liabilities
Provisions
Liabilities held for sale
Non-current liabilities
Financial liabilities
Non-current tax liabilities
Pensions and post-retirement healthcare liabilities:
Funded schemes in deficit
Unfunded schemes
Provisions
Deferred tax liabilities
Other non-current liabilities
Total liabilities
Equity
Shareholders’ equity
Non-controlling interests
Total equity
Total liabilities and equity
Notes
€ million
2023
€ million
2022
9
9
10
4B
6B
17A
11
12
13
17A
17A
22
15C
14
19
22
15C
4B
4B
19
6B
14
21,109
18,357
10,707
3,781
1,113
1,386
911
21,609
18,880
10,770
4,260
1,049
1,154
942
57,364
58,664
5,119
5,775
427
4,159
1,731
691
17,902
75,266
5,087
16,857
851
537
175
5,931
7,056
381
4,326
1,435
28
19,157
77,821
5,775
18,023
877
748
4
23,507
25,427
24,535
384
351
1,029
563
3,995
138
30,995
54,502
18,102
2,662
20,764
75,266
23,713
94
613
1,078
550
4,375
270
30,693
56,120
19,021
2,680
21,701
77,821
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 177 to 226, which form an integral part of the consolidated financial statements.
These financial statements have been approved by the Directors and signed on their behalf by Fernando Fernandez.
F Fernandez on behalf of The Board of Directors
7 March 2024
Unilever Annual Report and Accounts 2023
175
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Consolidated Financial Statements Unilever Group
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
Acquisition of businesses and investments in joint ventures and associates
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 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
Notes
5
24
Cash and cash equivalents at the end of the year
17A
€ million
€ million
€ million
2023
7,140
2,199
2022
8,269
2,068
(209)
(232)
142
486
9,758
1,579
814
340
768
(294)
(281)
(185)
(433)
212
97
11,561
(2,135)
9,426
267
(243)
(1,502)
42
(704)
436
(533)
62
239
(358)
(2,294)
(4,363)
(899)
(570)
4,972
(3,905)
(394)
(1,507)
(527)
(7,193)
(61)
4,225
(119)
4,045
157
493
10,755
1,946
(422)
(1,398)
(1,852)
2,828
(119)
203
(2,335)
177
(116)
10,089
(2,807)
7,282
287
(253)
(1,456)
82
(979)
4,622
(170)
266
185
(131)
2,453
(4,329)
(744)
(545)
7,776
(8,440)
(518)
(1,509)
(581)
(8,890)
845
3,387
(7)
4,225
2021
6,621
1,935
(282)
74
354
8,702
1,763
(47)
(458)
(307)
718
(183)
(61)
23
161
(53)
10,305
(2,333)
7,972
148
(232)
(1,108)
101
(2,131)
43
(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
(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.
176
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FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements Unilever Group
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
2023 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.
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 the Companies Act 2006.
These financial statements are prepared under the historical cost
convention unless otherwise indicated.
Going concern
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. The Directors also consider the Group's overall
financial position, exposure to principal risks and future business forecasts.
We describe in notes 15 to 18 on pages 203 to 218 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. 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 177 to 226. The accounting policies
below are applied throughout the financial statements.
Foreign currencies
The consolidated financial statements are presented in euros. As at
31 December 2023, the functional currency of PLC was the 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.
As at 31 December 2023, the ordinary share capital of PLC was translated to
euro using the historical rate at the date the shares were issued (see note
15B on page 204).
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 and the Turkish economy was designated as hyperinflationary
from 1 July 2022. 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 or the Turkish lira. 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;
■ translation of income statement at the period-end foreign exchange
rate instead of an average rate; and
■ adjustment of the income statement to reflect the impact of inflation
and exchange rate movement on holding monetary assets and
liabilities in local currency.
The main effects on the Group consolidated financial statements for
2023 are:
€ million
Total assets increase/(reduction)
Turnover increase/(reduction)
Argentina Turkey Total
(205)
(440)
8
(197)
12
(428)
Operating profit increase/(reduction)
(112)
(12) (124)
Net monetary gain/(loss)
(203)
61
(142)
Unilever Annual Report and Accounts 2023
177
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FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements Unilever Group
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
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:
■ 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.
■ Impairment risk in Russia – in 2023 the Russian business contributed
approximately 1% of the Group's turnover and net profit, and as at
31 December 2023 had approximately €600 million of net assets.
While the potential impacts of the war remain uncertain, there is a
risk that the operations in Russia are unable to continue, leading to a
loss of turnover, profit and a write-down of assets.
The following judgements are those that management believe have the
most significant effect on the amounts recognised in the Group’s
financial statements:
■ 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 contributions or a combination of both.
Climate change
In preparing these consolidated financial statements we have
considered the impact of both physical and transition climate
change risks as well as our plans to mitigate against those risks on
the current valuation of our assets and liabilities. As detailed in the
TCFD disclosures on pages 48 to 55 of this report, we have identified
11 risks and opportunities that could in the future be material to our
business, for example carbon tax or land use regulations. Where
possible we have performed quantitative assessments of these risks
and opportunities based on various scenarios for the years 2030, 2039
and 2050. These potential financial impacts are based on high-level
quantitative assessments and do not include any assumptions on the
impact of actions that we would undertake to mitigate against these
climate-related risks. Therefore, these quantifications do not represent
any type of financial forecast and thus are not directly incorporated
into any projections of long-term cash flows.
To determine if there is a material impact on the financial reporting
judgements and estimates as of the reporting period, we have reviewed
each balance sheet line item and identified those line items that have
the potential to be significantly impacted by climate-related risks and
our plans to mitigate against these risks. Those line items that have the
potential to be significantly impacted have then been reviewed in detail
to confirm:
■ that the growth rates and projected cash flows, used in assessing
whether our goodwill and indefinite-life intangibles are impaired,
are consistent with our climate-related risk assumptions and the
actions we are taking to mitigate against those risks and
■ that the useful lives of our property, plant and equipment are
appropriate given the potential physical and obsolescence risks
associated with climate change and the actions we are taking to
mitigate against those risks.
In addition it should be noted that climate-related risks could affect
the financial position of our defined benefit pension plan assets. The
Trustees operate diversified investment strategies and are continuously
assessing investment risks. The Trustees consider climate risk as one of
the key investment risks and are continually evolving their investments
to lower the overall climate risk.
Based on these reviews, 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 2023. We have not identified any significant impact from
climate-related risks on the Group’s going concern assessment nor the
viability of the Group over the next three years.
For many years Unilever has placed sustainability at the centre of its
strategy and has been working on becoming a more sustainable
business. This has included implementing hundreds of actions to help
mitigate and adapt against climate-related risks. The costs and benefits
of such actions are embedded into the cost structures of the business
and are not separately identifiable. None of these actions have
significantly impacted the value of the Group's assets or their useful
lives and whilst there is still much to do, our aim is to continue to reduce
our exposure to climate-related risks without impacting the value of the
Group’s assets. However we recognise that the climate emergency is
deepening and government policies are likely to evolve as a result of
commitments to limit global warning to 1.5°C and thus we will continue
to carefully monitor potential implications on the valuations of our
assets and liabilities that could arise in future years.
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FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements Unilever Group
Accounting developments adopted by the Group
Recent accounting developments adopted by the Group
The Group applied for the first-time amendments to the following standards from 1 January 2023.
Applicable standard Key requirements
Impact on Group
IFRS 17 ‘Insurance
Contracts’
The standard introduces a new model for accounting for
insurance contracts.
IAS 12 ‘Income Taxes’
As of 23 May 2023, amendments to IAS 12 came into
effect relating to International Tax Reform – Pillar Two
Model Rules, whereby an entity shall disclose qualitative
and quantitative information about its exposure to Pillar
Two income taxes at the end of the reporting period. The
amendments also provide a temporary mandatory
exemption from deferred tax accounting for the top-up
tax, which is effective immediately.
We have reviewed existing arrangements and concluded
that IFRS 17 has no impact to the consolidated Group
financial statements.
As of 31 December 2023, we have applied the exemption
to not recognise any deferred tax relating to top-up tax
arising from the Pillar Two legislation.
We have disclosed the Group's potential exposure to
Pillar Two legislation in note 6.
All other standards or amendments to standards that have been issued by the IASB and were effective by 1 January 2023 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
The following standards have been released but are not yet adopted by the Group. Based on initial review the Group does not currently believe
adoption of the following standards/amendments will have a material impact on the consolidation results or financial position of the Group.
Applicable standard Key requirements or changes in accounting policy
Amendments to IAS 7 and
IFRS 7 – 'Supplier Finance
Arrangements'
The amendments introduce additional disclosure requirements for companies that enter into supplier finance
arrangements. The amendments require qualitative and quantitative information to be disclosed about those
arrangements.
Effective from the year
ended 31 December 2024.
Amendments to IAS 21 ‘The
Effects of Changes in
Foreign Exchange Rates’
Effective from the year
ended 31 December 2025
In August 2023, the International Accounting Standards Board (IASB) amended IAS 21 to clarify whether a currency
is exchangeable, and how to determine a spot rate if it is not.
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.
Unilever Annual Report and Accounts 2023
179
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FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements Unilever Group
2. Segment information
Segmental reporting
The Group's operating and reportable segments are the five Business Groups of Beauty & Wellbeing, Personal Care, Home Care, Nutrition
and Ice Cream. Prior to 2022, segmental reporting was done on the basis of three Divisions: Beauty & Personal Care, Home Care and Foods
& Refreshment. The comparative information has been reclassified to reflect the new reporting segments.
Beauty & Wellbeing ■ primarily sales of hair care (shampoo, conditioner, styling), skin care (face, hand and body moisturisers) and includes
Prestige Beauty and Health & Wellbeing.
Personal Care
■ primarily sales of skin cleansing (soap, shower), deodorant and oral care (toothpaste, toothbrush,
mouthwash) products.
Home Care
Nutrition
Ice Cream
Revenue
■ primarily sales of fabric care (washing powders and liquids, rinse conditioners) and a wide range of cleaning products.
■ primarily sales of scratch cooking aids (soups, bouillons, seasonings), dressings (mayonnaise, ketchup) and tea
products.
■ primarily ice cream 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 2023, 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. 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. Items are classified as non-underlying due to their nature and/or frequency of occurrence.
Our segments are comprised of similar product categories. 8 categories (2022: 8; 2021: 10) 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
Hair Care
Scratch Cooking Aids
Skin Cleansing
Deodorant
Skin Care
Dressings
Home & Hygiene
Tea*
Other
Segment
Home Care
Ice Cream
Beauty & Wellbeing
Nutrition
Personal Care
Personal Care
Beauty & Wellbeing
Nutrition
Home Care
Nutrition
* 2023 includes retained tea business. 2021 and 2022 includes ekaterra tea business as well as retained business.
2023
15%
13%
10%
10%
10%
9%
7%
7%
4%
2%
13%
2022
15%
13%
11%
10%
10%
8%
7%
6%
4%
3%
13%
2021
14%
13%
11%
10%
11%
7%
7%
6%
5%
5%
11%
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FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements Unilever Group
2. Segment information continued
The Group operating segment information is provided based on five product areas: Beauty & Wellbeing, Personal Care, Home Care, Nutrition and
Ice Cream.
Share of net profit/(loss) of joint ventures and associates
1
3
3
221
2023
Turnover
Operating profit
Non-underlying items(a)
Underlying operating profit
Significant non-cash charges:
Within underlying operating profit:
Depreciation and amortisation
Share-based compensation and other non-cash charges(b)
Within non-underlying items:
Impairment and other non-cash charges(c)
2022
Turnover
Operating profit
Non-underlying items(a)
Underlying operating profit
Significant non-cash charges:
Within underlying operating profit:
Depreciation and amortisation
Share-based compensation and other non-cash charges(b)
Within non-underlying items:
Impairment and other non-cash charges(c)
2021
Turnover
Operating profit
Non-underlying items(a)
Underlying operating profit
€ million
€ million
€ million
€ million
€ million
€ million
Notes
Beauty &
Wellbeing
Personal
Care
Home Care
Nutrition
Ice Cream
Total
12,466
13,829
12,181
13,204
7,924
59,604
3
2,209
2,957
1,419
2,413
122
(165)
77
47
2,331
2,792
1,496
2,460
760
92
852
3
9,758
173
9,931
231
257
73
328
87
279
64
283
89
431
47
1,578
360
(6)
4
(40)
(18)
(1)
(61)
12,250
13,636
12,401
13,898
7,888
60,073
3
2,154
2,264
1,064
4,497
138
415
280
(2,048)
2,292
2,679
1,344
2,449
776
143
919
4
10,755
(1,072)
9,683
208
282
43
350
55
327
36
349
51
417
33
1,725
218
49
259
152
87
60
607
10,138
11,763
10,572
13,104
6,867
52,444
3
2,135
2,336
1,294
2,104
102
169
123
421
2,237
2,505
1,417
2,525
833
119
952
4
8,702
934
9,636
191
Share of net profit/(loss) of joint ventures and associates
1
3
4
196
Share of net profit/(loss) of joint ventures and associates
4
6
7
170
Significant non-cash charges:
Within underlying operating profit:
Depreciation and amortisation
Share-based compensation and other non-cash charges(b)
Within non-underlying items:
Impairment and other non-cash charges(c)
256
46
368
56
304
44
413
69
405
34
1,746
249
1
12
12
17
16
58
(a) Non-underlying items include gain on disposal of group companies, impairment, restructuring costs, acquisition and disposal related costs and other one-off items
classified separately due to their nature and/or frequency of occurrence. Refer to note 3.
(b) Other non-cash charges within underlying operating profit include movements in provisions from underlying activities, excluding movements arising from
non-underlying activities.
(c) Other non-cash charges within non-underlying items includes movements in restructuring provisions and movements in certain legal provisions.
Unilever Annual Report and Accounts 2023
181
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FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements Unilever Group
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:
2023
Turnover
Non-current assets(a)
2022
Turnover
Non-current assets(a)
2021
Turnover
Non-current assets(a)
€ million
€ million
€ million
€ million
€ million
United
Kingdom
United
States
India
Others
Total
2,523
12,250
3,567
18,205
6,691
6,436
38,140
59,604
22,876
51,084
2,498
3,621
12,122
18,109
6,872
6,500
38,581
60,073
23,971
52,201
2,443
3,858
9,864
16,692
5,618
6,755
34,519
52,444
22,607
49,912
(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.
Asia Pacific Africa
The Americas(a)
Europe
Total
€ million
€ million
€ million
2023
26,234
21,531
11,839
59,604
2022
27,504
20,905
11,664
60,073
2021
24,264
16,844
11,336
52,444
(a)
Americas sales in North America were €13,130 million (2022: €13,000 million; 2021: €10,627 million) and in Latin America were €8,401 million (2022: €7,905 million; 2021:
€6,217 million).
The Group's turnover classified by markets is:
Emerging markets
Developed markets
€ million
2023
34,714
24,890
€ million
2022
35,324
24,749
€ million
2021
30,407
22,037
Transactions between the Unilever Group’s geographical regions are immaterial and are carried out on at arm’s length basis.
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FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements Unilever Group
3. Operating costs
Operating costs
Operating costs include cost of sales, brand and marketing investment, overheads and other items including gains and losses on business
disposals, acquisition and disposal-related costs, restructuring costs, impairments and other items within operating profit recognised separately
due to their nature and/or frequency.
(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.
(iv) Restructuring costs
Restructuring costs are charges associated with transformational activities planned by management that significantly change either the scope
of the business or the way it is conducted.
(v) Others
Others relates to those one-off costs that are classified separately due to their nature and/or frequency of occurrence.
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)
Gain on disposal of group companies(b)
Acquisition and disposal-related costs(c)
Restructuring costs(d)
Impairments(e)
Other(f)
Operating profit
€ million
2023
59,604
€ million
2022
60,073
(34,429)
(35,906)
(3,549)
(3,969)
(3,787)
(3,995)
€ million
2021
52,444
(30,259)
(3,313)
(3,678)
(25,084)
(26,360)
(21,799)
(1,827)
25,175
(1,764)
24,167
(1,469)
22,185
(15,244)
(14,484)
(12,549)
(8,546)
(6,698)
(949)
489
(242)
(499)
(1)
80
(7,821)
(6,663)
(908)
2,335
(50)
(777)
(221)
(215)
(6,873)
(5,676)
(847)
36
(332)
(632)
(17)
11
9,758
10,755
8,702
(a)
(b)
(c)
(d)
(e)
(f)
From 2022, research and development costs include patent costs. 2023 include patent costs of €29 million (2022: €28 million). 2021 has not been restated. Patent cost
in 2021 were €27 million.
2023 includes a gain of €497 million related to the disposal of Suave business in North America. 2022 includes a gain of €2,303 million related to the disposal of the
global tea business.
2023 includes a charge of €104 million for the revaluation of the minority interest liability of Nutrafol, €43 million relating to the disposal of Elida Beauty and
€10 million (2022: €42 million) relating to the disposal of the global tea business.
Restructuring costs are comprised of strategic organisational change programmes (including Compass), and transformational technology and supply chain projects.
2022 includes an impairment charge of €192 million relating to Dollar Shave Club.
2023 includes €28 million net release after utilisation to the provision (2022: €89 million charge) relating to a product recall and market withdrawal by The Laundress,
€107 million release (2022: €82 million charge) relating to legal provisions for ongoing competition investigations and €54 million charge (2022: €42 million charge)
relating to our businesses in Russia and Ukraine.
Exchange losses within operating costs in 2023 are €(249) million (2022: €(225) million; 2021: nil).
Unilever Annual Report and Accounts 2023
183
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements Unilever Group
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 (a)
Asia Pacific Africa
The Americas
Europe
(a)
Reduction in average number of employees is primarily driven by disposal of ekaterra in 2022.
Key management compensation
Salaries and short-term employee benefits
Share-based benefits(a)
Of which: Executive Directors
Other(b)
Non-Executive Directors’ fees
€ million
2023
€ million
2022
(5,722)
(5,857)
(591)
(348)
(212)
(587)
(396)
(177)
€ million
2021
(5,062)
(529)
(401)
(161)
(6,873)
(7,017)
(6,153)
‘000
2023
64
38
26
128
‘000
2022
73
38
27
138
‘000
2021
84
37
28
149
€ million
2023
€ million
2022
€ million
2021
(41)
(13)
(54)
(13)
(41)
(2)
(56)
(41)
(15)
(56)
(12)
(44)
(2)
(58)
(29)
(10)
(39)
(8)
(31)
(2)
(41)
Share-based benefits are expenses recognised for the period. Share-based benefits compensation on a vesting basis is €8 million (2022: €12 million; 2021: €6 million).
(a)
(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 ULE
members are pro-rated based on time actively spent in a ULE role. In addition to the above, €11 million was recognised in 2023 relating to members
of the ULE who have either left, or where it has been announced that they will leave during the year.
Details of the remuneration of Directors (including leaving arrangements) are given in the parts noted as audited in the Directors’ Remuneration
Report on pages 116 to 153.
184
Unilever Annual Report and Accounts 2023
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements Unilever Group
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, administration costs (other than
costs of managing plan assets), 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 surplus or deficit. 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) adjusted for irrecoverable surpluses.
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 82% of the defined benefit liabilities, are formally valued every year. Other material plans,
accounting for a further 14% 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 from October 2021, 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, closed to new entrants from
January 2014. 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.
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 diversified, such that the failure of any single investment should 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. However, the portfolio
leverage is relatively low. 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 2023
Other post-
employment
benefit plans
Defined benefit
pension plans
31 December 2022
Other post-
employment
benefit plans
Defined benefit
pension plans
4.4 %
2.8 %
3.4 %
2.6 %
2.8 %
n/a
5.9 %
n/a
2.9 %
n/a
n/a
5.5 %
4.6 %
2.8 %
3.3 %
2.4 %
2.6 %
n/a
5.9 %
n/a
3.0 %
n/a
n/a
5.1 %
For the most material other post-employment benefit plan in the US a higher initial level of medical cost inflation is assumed which falls from the
initial rate of 7% to the long-term rate of 5% after 8 years. Assumed healthcare cost trend rates have a significant effect on the amounts reported
for healthcare plans.
Unilever Annual Report and Accounts 2023
185
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements Unilever Group
4B. Pensions and similar obligations continued
For the UK and Netherlands pension plans, representing approximately 66% of all defined benefit pension liabilities, the assumptions used at 31
December 2023 and 2022 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
2023
4.7 %
3.0 %
3.6 %
2.8 %
2.8 %
21.5
23.1
22.4
24.2
2022
5.0%
3.1%
3.6%
2.9%
2.9%
21.8
23.6
22.9
24.8
2023
3.2%
2.1%
2.6%
2.1%
2.1%
21.9
24.1
23.9
26.1
2022
3.7%
2.2%
2.7%
2.2%
2.2%
21.8
24.0
23.8
26.0
Demographic assumptions, such as mortality rates, are set 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 2023 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 2022 actuarial
valuation. Future improvements in longevity have been allowed for in line with the core CMI 2022 Mortality Projections Model with a 1% p.a. long-
term improvement rate.
Netherlands: The Dutch Actuarial Society’s AG Prognosetafel 2022 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.
Income statement
The charge to the income statement comprises:
Charged to operating profit:
Defined benefit pension and other benefit plans:
Gross 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
2023
€ million
2022
€ million
2021
(128)
11
(14)
3
2
(222)
(348)
110
(238)
(186)
12
(11)
–
1
(212)
(396)
44
(352)
4A
5
Statement of comprehensive income
Amounts recognised in the statement of comprehensive income on the remeasurement of the surplus/(deficit).
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
2023
131
(6)
98
(552)
(416)
(745)
€ million
2022
(6,483)
(184)
(24)
6,914
(760)
(537)
186
Unilever Annual Report and Accounts 2023
(228)
13
(15)
18
1
(190)
(401)
(10)
(411)
€ million
2021
1,958
(17)
(4)
342
126
2,405
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements Unilever Group
4B. Pensions and similar obligations continued
Balance sheet
The assets, liabilities and surplus/(deficit) position of the pension and other post-employment benefit plans at the balance sheet date were:
Fair value of assets
Present value of liabilities
Computed surplus/(deficit)
Irrecoverable surplus(a)
Surplus/(deficit)
Of which in respect of:
Funded plans in surplus:
Liabilities
Assets
Aggregate surplus
Irrecoverable surplus(a)
Surplus/(deficit)
Funded plans in deficit:
Liabilities
Assets
Surplus/(deficit)
Unfunded plans:
Pension liability
€ million 2023
Other post-
employment
benefit plans
Pension plans
€ million 2022
Other post-
employment
benefit plans
Pension plans
20,174
(17,174)
3,000
(255)
2,745
(13,739)
17,775
4,036
(255)
3,781
(2,715)
2,399
(316)
4
(348)
(344)
–
(344)
–
–
–
–
–
(39)
4
(35)
19,361
(16,199)
3,162
(234)
2,928
(12,030)
16,524
4,494
(234)
4,260
(3,417)
2,837
(580)
6
(365)
(359)
–
(359)
–
–
–
–
–
(39)
6
(33)
(720)
(309)
(752)
(326)
(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.
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:
UK Netherlands
world
2023 Total
UK Netherlands
world
2022 Total
Rest of
€ million
Rest of
€ million
1 January fair value of assets
8,704
5,343
5,320
19,367
14,332
6,099
6,262
26,693
1 January irrecoverable surplus
–
–
(234)
(234)
–
–
(50)
(50)
1 January (after irrecoverable surplus)
8,704
5,343
5,086
19,133
14,332
6,099
6,212
26,643
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 (b)
Currency retranslation
–
–
(227)
–
432
50
–
–
146
–
194
9
11
(1)
11
(1)
1
–
–
–
11
–
12
–
212
131
(4,870)
(668)
(945)
(6,483)
(6)
(6)
233
348
859
407
–
264
66
–
66
8
(184)
(184)
166
229
496
303
(459)
(178)
(485)
(1,122)
(511)
(161)
(512)
(1,184)
–
179
–
–
371
(39)
371
140
–
(578)
(1)
–
(1)
110
(2)
(468)
31 December (after irrecoverable surplus)
8,679
5,514
5,730
19,923
8,704
5,343
5,086
19,133
31 December irrecoverable surplus
–
–
(255)
(255)
–
–
(234)
(234)
31 December fair value of assets
8,679
5,514
5,985
20,178
8,704
5,343
5,320
19,367
(a)
(b)
This includes the impact of interest on asset ceiling.
The majority of 'Other' during 2023 is explained by reclassification of India HUL and GSK Provident Funds from Defined Contribution to Defined Benefit reporting
adding €368 million to both assets and liabilities at year end 2023. The impact on the overall (deficit)/surplus is nil.
Unilever Annual Report and Accounts 2023
187
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements Unilever Group
4B. Pensions and similar obligations continued
Movements in liabilities during the year:
1 January
Gross 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(a)
Currency retranslation
31 December
Rest of
€ million
Rest of
€ million
UK Netherlands
world
2023 Total
UK Netherlands
world
2022 Total
(6,838)
(3,734)
(5,992)
(16,564)
(11,453)
(4,937)
(7,260)
(23,650)
(42)
(5)
–
–
–
–
–
–
(81)
(14)
(128)
(14)
3
3
3
3
(86)
(4)
–
–
–
–
–
–
(96)
(11)
(186)
(11)
–
1
–
1
(335)
(135)
(279)
(749)
(210)
(54)
(188)
(452)
104
–
(6)
98
1
(50)
25
(24)
(243)
(236)
(73)
(552)
4,196
1,527
1,191
6,914
(220)
459
–
(135)
(99)
178
–
–
(97)
(416)
(276)
(377)
(107)
(760)
485
1,122
(371)
(371)
181
46
511
–
479
161
–
–
512
15
(74)
1,184
15
405
(7,250)
(4,031)
(6,241)
(17,522)
(6,838)
(3,734)
(5,992)
(16,564)
(a)
The majority of 'Other' during 2023 is explained by reclassification of India HUL and GSK Provident Funds from Defined Contribution to Defined Benefit reporting
adding €368 million to both assets and liabilities at year end 2023. The impact on the overall (deficit)/surplus is nil.
Movements in (deficit)/surplus during the year:
1 January
Gross 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
2023 Total
UK Netherlands
world
2022 Total
1,866
1,609
(906)
2,569
2,879
1,162
(1,048)
2,993
(42)
(5)
(81)
(128)
(86)
(4)
–
–
–
–
–
–
–
–
11
(14)
3
2
11
(14)
3
2
1
–
–
–
–
–
–
–
(96)
11
(11)
–
1
(186)
12
(11)
–
1
(227)
146
212
131
(4,870)
(668)
(945)
(6,483)
–
–
(6)
(6)
–
(335)
(135)
(279)
(749)
(210)
432
104
194
233
–
(6)
859
98
264
1
–
(54)
66
(184)
(188)
166
(184)
(452)
496
(50)
25
(24)
(243)
(236)
(73)
(552)
4,196
1,527
1,191
6,914
(220)
(99)
(97)
(416)
(276)
(377)
(107)
50
–
–
44
9
–
–
–
348
407
–
–
–
–
66
–
–
142
186
(99)
8
–
(1)
–
229
–
14
36
(760)
303
–
13
(63)
1,429
1,483
(511)
2,401
1,866
1,609
(906)
2,569
(a)
This includes the impact of interest on asset ceiling.
The actual return on recognised plan assets during 2023 was €990 million, being €131 million of asset returns and €859 million of interest income
shown in the tables above (2022: €(5,987) 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
2023 Total
UK Netherlands
world
2022 Total
Rest of
€ million
Rest of
€ million
–
–
–
–
–
–
–
–
–
–
(234)
(234)
(7)
(6)
(8)
(7)
(6)
(8)
(255)
(255)
–
–
–
–
–
–
–
–
–
–
(50)
2
(184)
(2)
(234)
(50)
2
(184)
(2)
(234)
188
Unilever Annual Report and Accounts 2023
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements Unilever Group
4B. Pensions and similar obligations continued
The duration of the principal defined benefit plan liabilities (representing 96% of total pension liabilities and other post-employment benefit
liabilities) and the split of liabilities between different categories of plan participants are:
Duration (years)
Active members
Deferred members
Retired members
UK Netherlands
12
7%
31%
62%
14
7%
38%
55%
Rest of
world(a)
10
23%
14%
63%
2023 Total
0 to 22
12%
27%
61%
UK Netherlands
13
8%
31%
61%
15
8%
38%
54%
Rest of
world(a)
11
19%
14%
67%
2022 Total
4 to 18
11%
28%
61%
(a)
Rest of world numbers shown are weighted averages by liabilities.
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.
Total Pension Plans Assets
Equities Total
– Europe
– North America
– Other
Fixed Income Total
– Government bonds
– Investment grade corporate bonds
– Other Fixed Income
Derivatives
Private Equity
Property and Real Estate
Hedge Funds
Other
Other Pension Plans
Other Post-Employment Benefit Plans
Assets
UK Netherlands
8,679
224
43
133
48
6,640
4,773
791
1,076
(237)
559
674
136
683
–
–
5,514
1,095
171
670
254
3,521
1,461
620
1,440
145
95
321
–
337
–
–
€ million
31 December 2023
€ million
31 December 2022
Rest of
world
5,981
1,424
431
617
376
3,344
1,546
1,197
601
16
36
412
69
391
289
4
2023 Total
UK Netherlands
20,174
8,704
5,343
2,743
645
1,420
678
13,505
7,780
2,608
3,117
(76)
690
1,407
205
1,411
289
4
284
61
160
63
5,757
3,795
871
1,091
(333)
500
930
225
1,341
–
–
983
165
604
214
3,269
1,297
530
1,442
254
90
422
–
325
–
–
Rest of
world
5,314
1,363
440
594
329
2,696
1,215
905
576
18
40
387
76
317
417
6
2022 Total
19,361
2,630
666
1,358
606
11,722
6,307
2,306
3,109
(61)
630
1,739
301
1,983
417
6
Total Assets
8,679
5,514
5,985
20,178
8,704
5,343
5,320
19,367
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. Properties are primarily valued
by a professional third party valuer on an open market basis, as defined by the Royal Institute of Chartered Surveyors. 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 over 100% for
both interest rate and inflation for the UK plan and approximately 90% for interest rate and 20% for inflation for the Netherlands plan at year end.
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.
No Unilever securities were held at 31 December 2023. At 31 December 2022, €1 million (0.003% of total plan assets) of Unilever securities were held.
Property includes property occupied by Unilever amounting to €80 million and €77 million at 31 December 2023 and 2022 respectively.
The pension assets above exclude the assets in a Special Benefits Trust amounting to €33 million (2022: €39 million) to fund pension and similar
obligations in the US (see also note 17A on page 216).
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 0.5%
Increase by 1 year
Increase by 1.0%
Change in liabilities
UK
-6 %
4 %
4 %
n/a
Netherlands
-7 %
8 %
4 %
n/a
Total
-5 %
5 %
4 %
4 %
(a)
Long-term medical cost inflation only relates to post-retirement medical plans and its impact on these liabilities.
A decrease in each assumption would have a comparable 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 2023
189
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CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements Unilever Group
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
€ million
2024 Estimate
2023
€ million
2022
€ million
2021
70
225
110
405
291
222
116
629
176
212
127
515
286
190
108
584
(a)
The Group contributed a one-off contribution of $110 million into the US Pension Plan in 2023.
The Group is due to receive a partial refund of €115 million from the Netherlands Plan in 2024, per a formal agreement with the Plan allowing a return of surplus
provided specific funding conditions are satisfied.
Following conclusion of the 2022 triennial valuation of the UK pension fund, the Group, in agreement with the Trustees, implemented an updated Schedule of
Contributions. Deficit contributions to this fund will continue to be nil for the next few years.
The Group’s funding policy is to periodically review the contributions made to the plans while taking account of local 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 2023, 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 116 to 153 and those for key
management shown in note 4A on page 184. Non-Executive Directors do not participate in any of the share-based compensation plans.
The charge to income statement related to equity-settled share-based compensation plan is €212 million (2022: €177 million; 2021: €161 million).
Performance share plans
Performance share awards are made in respect of the Performance Share Plan (PSP). Awards for the Global Share Incentive Plan (GSIP) were last
made in February 2018 and vested in February 2021. Awards for MCIP were last made in 2020 and will vest in 2024. 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 116 to 153).
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 are underlying sales growth, underlying EPS growth, underlying return on
invested capital, sustainability progress index and for PSP are percentage business winning, free cash flow, underlying return on invested capital
and sustainability progress index. MCIP awards made will vest after 4 years, while PSP awards vest after 3 years.
A summary of the status of the Performance Share Plans as at 31 December 2023, 2022 and 2021 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
2023
Number
of shares
2022
Number
of shares
2021
Number
of shares
17,923,890
14,318,564
11,371,436
7,479,544
10,032,321
7,667,929
(2,021,439)
(3,101,598)
(3,425,232)
(2,052,057)
(3,325,397)
(1,295,569)
21,329,938
17,923,890
14,318,564
2023
2022
2021
€45.71
€41.56
€47.64
190
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CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements Unilever Group
4C. Share-based compensation plans continued
Additional information
At 31 December 2023, shares in PLC totalling 21,696,344 (2022: 18,842,270) were outstanding in respect of share-based compensation plans of PLC
and its subsidiaries, including North American plans.
At 31 December 2023, the employee share ownership trust held 1,361,032 (2022: 2,727,097) PLC shares and PLC and its subsidiaries held 36,903
(2022: 327,303) PLC shares which are held as treasury shares.
The book value of €207 million (2022: €282 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 2023 was €60 million
(2022: €144 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 2023 and 22 February 2024 (the latest practicable date for inclusion in this report), nil shares were granted, 5,851,739 shares
vested and 2,277,975 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
Pensions and similar obligations
€ million
€ million
€ million
Notes
4B
2023
(1,038)
(82)
(921)
(72)
37
86
(49)
442
110
2022
(818)
(44)
(673)
(72)
(29)
123
(152)
281
44
(486)
(493)
2021
(491)
(34)
(392)
(72)
7
(68)
75
147
(10)
(354)
(a)
(b)
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 €(16) million (2022: €(20) million) relating to unwinding of discount on deferred consideration for
acquisitions.
For further details of derivatives for which hedge accounting is not applied, please refer to note 16C.
Unilever Annual Report and Accounts 2023
191
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CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements Unilever Group
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
2023
€ million
2022
€ million
2021
(2,261)
9
(2,252)
(2,206)
(61)
(2,267)
22
7
24
53
153
28
18
199
(2,399)
245
(2,154)
189
15
15
219
(2,199)
(2,068)
(1,935)
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
Impact of disposals
Others
Effective tax rate
% 2023
25
% 2022
25
% 2021
23
(2)
2
1
1
(1)
(2)
–
24
(2)
2
1
1
–
(6)
(1)
20
(2)
2
1
1
(1)
–
(1)
23
(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 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.
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
excluding the related interest amounted to €820 million (2022: €822 million). This includes €434 million (2022: €374 million) related to the Horlicks
intangible amortisation in India.
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.
Pillar Two legislation has been enacted or substantively enacted in certain jurisdictions in which the Group operates and the legislation will be
effective for the Group’s financial year beginning 1 January 2024. We have performed an assessment of the Group’s potential exposure to Pillar Two
income taxes based on the most recent financial information available regarding the constituent entities in the Group. Based on the assessment,
the Pillar Two effective tax rates in most of the jurisdictions in which the Group operates are above 15%. However, there are a limited number of
jurisdictions where the transitional safe harbour relief is unlikely to apply and the Pillar Two effective tax rate is expected to be below 15%. We
estimate that the combined impact of the implementation by countries of qualified domestic minimum top-up taxes and the income inclusion rule
in the UK will be in the range of 0-0.2% increase to the Group ETR for 2024.
192
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FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements Unilever Group
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;
■ the initial recognition of assets or liabilities that affect neither accounting nor taxable profit; and
■ differences relating to investments in subsidiaries to the extent that it is probable that they will not reverse in the foreseeable future.
The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and
liabilities, using tax rates enacted, or substantively enacted, at the year end.
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset
can be utilised. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be realised.
€ million
€ million
€ million
€ million
€ million
€ million
€ million
€ million
Movements in 2023 and 2022
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)
As at 1
January
2023
(613)
741
(3,848)
(700)
231
(42)
36
194
237
(201)
639
(3,326)
Income
statement
(90)
103
(10)
47
(3)
0
(2)
30
(34)
30
(18)
53
As at 31
December
2023
As at 1
January 2022
Income
Statement
(514)
(654)
(44)
Other
189
(39)
805
726
(3,697)
(3,448)
(572)
234
(40)
23
246
189
(600)
172
(60)
2
166
295
12
135
(60)
100
(11)
6
18
161
81
6
2
(11)
22
(14)
5
(11)
391
(55)
(3)
(166)
(244)
610
580
(2,882)
(3,065)
42
56
199
As at 31
December
2022
(613)
741
Other
85
3
(535)
(3,848)
(40)
(41)
29
28
10
1
3
(700)
231
(42)
36
194
237
(201)
639
(460)
(3,326)
(a)
The deferred tax-other includes the recognition of an asset of €300 million (2022: €311 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 €1,313 million (2022: €1,352 million) and tax credits amounting to €832 million (2022:
€893 million) available for offset against future taxable profits. Deferred tax assets have not been recognised in respect of unused tax losses of
€602 million (2022: €668 million) and tax credits of €418 million (2022: €448 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, €168 million (2022: €196 million) have expiry dates, being
corporate income tax losses in the US, Korea and China which expire between now and 2042.
Where deferred tax assets have been recognised in respect of losses, the evidence considered includes the reason for the loss, potential planning
strategies to utilise the loss, including where permitted merger with other profitable entities and the availability of future taxable profits against
which the losses can be utilised. Profit forecasts used are consistent with those used in other areas of the business.
Deferred tax assets have not been recognised in respect of other deductible temporary differences of €515 million (2022: €269 million) as it is not
expected they will be utilised. Of these differences, €409 million (2022: €199 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 €2,610 million (2022: €2,420 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
€ million
€ million
€ million
€ million
€ million
€ million
Assets
2023
Assets
2022
Liabilities
2023
Liabilities
2022
Total 2023
Total 2022
199
503
51
195
489
105
(713)
(808)
(514)
(613)
302
252
805
741
(3,748)
(3,953)
(3,697)
(3,848)
(18)
(93)
(554)
(607)
(572)
(700)
201
188
33
43
234
(1)
–
84
94
1
–
51
102
(39)
(43)
(40)
23
162
95
36
143
135
23
246
189
231
(42)
36
194
237
(92)
(92)
(74)
(109)
(166)
(201)
92
103
518
536
610
639
1,113
1,049
(3,995)
(4,375)
(2,882)
(3,326)
Of which deferred tax to be recovered/(settled) after more than 12 months
756
700
(4,199)
(4,492)
(3,443)
(3,792)
Unilever Annual Report and Accounts 2023
193
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CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements Unilever Group
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 2023 and 2022
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. Earnings per share
€ million
€ million
€ million
€ million
€ million
€ million
Tax
(charge)/
credit
2023
Before tax
2023
After tax
2023
Before tax
2022
Tax
(charge)/
credit
2022
After tax
2022
(38)
(10)
10
(17)
(28)
(27)
(745)
235
(510)
31
(121)
(537)
(1,460)
(1)
(1,461)
547
5
30
64
67
(2,253)
227
(2,026)
(80)
166
36
(91)
(473)
614
86
The earnings per share calculations are based on the average number of share units representing the ordinary shares of PLC in issue during the
period, less the average number of shares held as treasury shares.
In calculating diluted earnings per share, a number of adjustments are made to the number of shares, principally, the exercise of share plans by
employees.
Earnings per share for total operations for the 12 months were as follows:
Basic earnings per share
Diluted earnings per share
Calculation of average number of share units
Average number of shares
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
Calculation of earnings
Net profit
Non-controlling interests
Net profit attributable to shareholders’ equity – used for basic and diluted earnings per share
8. Dividends on ordinary capital
€
2023
2.58
2.56
€
2022
3.00
2.99
€
2021
2.33
2.32
Millions of share units
2023
2,587.0
2022
2,629.2
(71.1)
(81.0)
2,515.9
16.5
2,532.4
2,548.2
11.6
2,559.8
2021
2,629.2
(29.3)
2,599.9
9.7
2,609.6
€ million
€ million
€ million
2023
7,140
(653)
6,487
2022
8,269
(627)
7,642
2021
6,621
(572)
6,049
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
€ million
2023
€ million
2022
(4,327)
(4,356)
€ million
2021
(4,458)
Four quarterly interim dividends were declared and paid during 2023, totalling £1.50 (2022: £1.45) per PLC ordinary share.
A quarterly dividend of €1,067 million (2022: €1,086 million) was declared on 8 February 2024, to be paid in March 2024; £0.36 per PLC ordinary share
(2022: £0.38). Total dividends declared in relation to 2023 were £1.48 (2022: £1.48) per PLC ordinary share.
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CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements Unilever Group
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 (CGUs) are created, and if not, is allocated to the Group’s CGUs, or groups of CGUs (GCGUs) in line with the structure detailed below. These
might not always be the same as the CGUs or GCGUs that include the assets and liabilities of the acquired business.
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.
Finite-life intangible assets mainly comprise software, patented and non-patented technology, know-how and customer lists. These assets are
amortised on a straight-line basis in the income statement over the period of their expected useful lives, or the period of legal rights if shorter.
None of the amortisation periods exceeds ten years.
Cash generating units
The Group’s assets are grouped into cash generating units (CGUs) which are the smallest identifiable group of assets that generates largely
independent cash inflows. The Group's CGUs are aligned with our organisation structure of Business Units and Global Business Units.
For impairment testing purposes, goodwill is allocated to groups of CGUs (GCGUs) which are based on the five Business Groups since the
synergies acquired through a business combination benefit a Business Group as a whole rather than a specific Business Unit or Global Business
Unit. Cash inflows relating to indefinite-life intangible assets are identifiable at Business Unit or Global Business Unit level and are therefore
allocated to individual CGUs.
Impairment review
The impairment test is performed by comparing the carrying value of the CGUs or GCGUs with their recoverable value. The recoverable value
is primarily based on value in use but also considers fair value less costs of disposal where relevant. Any impairment is charged to the income
statement as it arises.
€ million
Movements during 2023
Cost
1 January 2023
Additions through business combinations(a)
Disposal of businesses
Reclassification to held for sale
Additions
Disposals and other movements
Hyperinflationary adjustment
Currency retranslation
31 December 2023
Accumulated amortisation and impairment
1 January 2023
Amortisation/impairment for the year
Disposals and other movements
Currency retranslation
31 December 2023
Net book value 31 December 2023(b)
Goodwill
Indefinite-life
intangible assets
Finite-life intangible assets
Software
Other
Total
22,766
18,516
3,317
1,137
45,736
326
(56)
(65)
–
–
(173)
(532)
430
–
(467)
2
(2)
(12)
(500)
–
–
–
239
(71)
(5)
3
–
(7)
–
2
7
–
756
(63)
(532)
243
(66)
(190)
(15)
(1,044)
22,266
17,967
3,483
1,124
44,840
(1,157)
(350)
(2,730)
(1,010)
(5,247)
–
(1)
1
(1,157)
21,109
–
–
5
(187)
(41)
(228)
72
4
7
13
78
23
(345)
(2,841)
(1,031)
(5,374)
17,622
642
93
39,466
Unilever Annual Report and Accounts 2023
195
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CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements Unilever Group
9. Goodwill and intangible assets continued
€ million
Movements during 2022
Cost
1 January 2022
Additions through business combinations
Disposal of businesses
Reclassification to held for sale(c)
Additions
Disposals and other movements
Hyperinflationary adjustment
Currency retranslation
31 December 2022
Accumulated amortisation and impairment
1 January 2022
Amortisation/impairment for the year
Disposals and other movements
Currency retranslation
31 December 2022
Net book value 31 December 2022
Goodwill
Indefinite-life
intangible assets
Finite-life intangible assets
Software
Other
Total
21,489
585
(16)
–
–
–
116
592
17,681
603
(4)
(25)
–
(2)
17
246
3,189
1,114
–
(3)
(4)
251
(24)
–
(92)
–
–
–
2
(5)
–
26
43,473
1,188
(23)
(29)
253
(31)
133
772
22,766
18,516
3,317
1,137
45,736
(1,159)
–
1
1
(1,157)
21,609
(211)
(146)
(2,609)
(216)
–
7
32
63
(903)
(93)
5
(19)
(4,882)
(455)
38
52
(350)
(2,730)
(1,010)
(5,247)
18,166
587
127
40,489
(a)
Includes the provisional fair value of goodwill and intangibles for acquisitions made in 2023 as well as subsequent changes in the fair value of goodwill and
intangibles for the acquisitions made in 2022 where the initial acquisition accounting was provisional at the end of 2022. See note 21 for further details.
(b) Within indefinite-life intangible assets there are five existing brands that have a significant carrying value: Horlicks €2,640 million (2022: €2,759 million), Knorr €1,838
million (2022: €1,839 million), Paula's Choice €1,699 million (2022: €1,764 million), Carver Korea €1,370 million (2022: €1,456 million) and Hellmann’s €1,226 million
(2022: €1,261 million).
Goodwill and intangibles in relation to Elida Beauty amounting to €532 million were reclassified as held for sale.
(c)
Significant CGUs
The goodwill and indefinite-life assets held in the GCGUs and CGUs shown below are considered significant within the total carrying amounts of
goodwill and indefinite-life intangible as at 31 December 2023.
2023 GCGUs
2022 GCGUs
€ billion
Goodwill
€ billion
Goodwill
4.6
3.9
0.9
8.0
3.7
21.1
4.9
4.1
0.9
8.3
3.4
21.6
2023 CGUs
€ billion
2022 CGUs
€ billion
Indefinite- life
intangible assets
Indefinite- life
intangible assets
3.2
1.3
1.0
2.7
1.4
1.6
11.2
6.4
17.6
3.3
1.4
1.0
2.8
1.5
1.6
11.6
6.6
18.2
Beauty & Wellbeing
Personal Care
Home Care
Nutrition
Ice Cream
Total GCGUs
Nutrition South Asia
Nutrition Europe, ANZ & METU
Nutrition North America
Prestige
Beauty & Wellbeing North Asia
Health & Wellness
Total Significant CGUs
Others(a)
Total CGUs
(a)
Included within Others are individually insignificant amounts of intangible assets.
196
Unilever Annual Report and Accounts 2023
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements Unilever Group
9. Goodwill and intangible assets continued
Key assumptions
In performing our annual impairment testing, 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. Each GCGU's value in use is based on the aggregated value in use of the CGUs grouped under the
respective GCGU.
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 five years are based on past performance and on the Group’s three-year strategic plan, de-risked to ensure reasonability and extended to
years four and five. The Group's three-year strategic plan factors in initiatives we are undertaking to reduce carbon emissions in line with our CTAP
and impacts of climate change on our operational costs. The growth rates used in this exercise for GCGUs and significant CGUs are set out below:
For the year 2023
Group of CGUs
Longer-term sustainable growth rates
Average near-term nominal growth rates
Beauty &
Wellbeing
3%
6%
Personal Care
Home Care
Nutrition
Ice Cream
2%
4%
3%
3%
2%
3%
2%
6%
Significant CGUs
Longer-term sustainable growth rates
Average near-term nominal growth rates
Nutrition
South Asia
5%
5%
Nutrition
Europe, ANZ &
METU
Nutrition
North America
1%
1%
1%
4%
Prestige
2%
11%
Beauty &
Wellbeing
North Asia
2%
2%
Health &
Wellness
1%
12%
For the year 2022
Group of CGUs
Longer-term sustainable growth rates
Average near-term nominal growth rates
Beauty &
Wellbeing
3%
6%
Personal Care
Home Care
Nutrition
Ice Cream
3%
3%
4%
4%
3%
5%
3%
6%
Significant CGUs
Longer-term sustainable growth rates
Average near-term nominal growth rates
Nutrition
South Asia
Nutrition
Europe, ANZ &
METU
Nutrition
North America
7%
7%
2%
2%
2%
4%
Prestige
2%
11%
Beauty &
Wellbeing
North Asia Health & Wellness
4%
3%
2%
17%
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 growth projection and external forecasts for the relevant market.
In 2023, the projected cash flows are discounted using pre-tax discount rates. The discount rates are specific to each CGU and are determined
based on the weighted average cost of capital, including a market and country risk premium. Given the higher number of CGUs spread across
different markets, the CGU discount rates are in the range 8.4%–20.0% (2022: 7.4%–11.8%).
There are no reasonably possible changes in key assumptions that would cause the carrying amount of any 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 and useful lives are reviewed at least annually. The review of residual values and useful lives have taken into
consideration the impacts of climate change and the actions we undertake to mitigate and adapt against these climate-related risks and there
is no material impact on the income statement for this year. 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.
Unilever Annual Report and Accounts 2023
197
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements Unilever Group
10. Property, plant and equipment continued
Property, plant and equipment
Owned assets
Leased assets
Total
10A. Owned assets
Movements during 2023
Cost
1 January 2023
Additions through business combinations
Additions
Disposals and other movements
Hyperinflationary adjustment
Reclassification as held for sale
Currency retranslation
31 December 2023
Accumulated depreciation
1 January 2023
Depreciation charge for the year
Disposals and other movements
Hyperinflationary adjustment
Reclassification as held for sale
Currency retranslation
31 December 2023
Net book value 31 December 2023(a)
Includes capital expenditures for assets under construction
(a)
Includes €471 million of freehold land.
Notes
10A
10B
€ million
€ million
2023
9,377
1,330
10,707
2022
9,416
1,354
10,770
€ million
Land and
buildings
4,708
–
280
(96)
29
6
(256)
4,671
€ million
€ million
Plant and
equipment
15,108
1
1,222
(766)
(111)
(13)
(484)
Total
19,816
1
1,502
(862)
(82)
(7)
(740)
14,957
19,628
(1,599)
(116)
(8,801)
(10,400)
(833)
(949)
80
6
(6)
36
635
112
9
226
715
118
3
262
(1,599)
(8,652)
(10,251)
3,072
189
6,305
1,057
9,377
1,246
The Group has commitments to purchase property, plant and equipment of €583 million (2022: €356 million).
Movements during 2022
Cost
1 January 2022
Additions through business combinations
Additions
Disposals and other movements
Hyperinflationary adjustment
Reclassification as held for sale
Currency retranslation
31 December 2022
Accumulated depreciation
1 January 2022
Depreciation charge for the year
Disposals and other movements
Hyperinflationary adjustment
Reclassification as held for sale
Currency retranslation
31 December 2022
Net book value 31 December 2022(a)
Includes capital expenditures for assets under construction
(a)
Includes €504 million of freehold land.
198
Unilever Annual Report and Accounts 2023
€ million
Land and
buildings
4,266
0
391
(80)
152
(11)
(10)
€ million
€ million
Plant and
equipment
14,462
0
1,065
(858)
536
(56)
(41)
Total
18,728
0
1,456
(938)
688
(67)
(51)
4,708
15,108
19,816
(1,508)
(120)
66
(36)
6
(7)
(8,387)
(897)
762
(287)
18
(10)
(9,895)
(1,017)
828
(323)
24
(17)
(1,599)
(8,801)
(10,400)
3,109
104
6,307
960
9,416
1,064
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements Unilever Group
10B. Leased assets
Movements during 2023
Cost
1 January 2023
Additions through business combinations
Additions
Disposals and other movements
Hyperinflationary adjustment
Reclassification as held for sale
Currency retranslation
31 December 2023
Accumulated depreciation
1 January 2023
Depreciation charge for the year
Disposals and other movements
Reclassification as held for sale
Currency retranslation
31 December 2023
Net book value 31 December 2023
Movements during 2022
Cost
1 January 2022
Additions through business combinations
Additions
Disposals and other movements
Hyperinflationary adjustment
Reclassification as held for sale
Currency retranslation
31 December 2022
Accumulated depreciation
1 January 2022
Depreciation charge for the year
Disposals and other movements
Reclassification as held for sale
Currency retranslation
31 December 2022
Net book value 31 December 2022
€ million
€ million
Plant and
equipment
650
–
175
(216)
–
(3)
(23)
583
(371)
(109)
166
3
11
(300)
283
Total
3,305
2
540
(523)
(1)
(15)
(100)
3,208
(1,951)
(401)
411
12
51
(1,878)
1,330
€ million
€ million
€ million
Land and
buildings
2,655
2
365
(307)
(1)
(12)
(77)
2,625
(1,580)
(292)
245
9
40
(1,578)
1,047
€ million
Land and
buildings
2,667
–
281
Plant and
equipment
661
–
111
(303)
(108)
3
1
6
2,655
(1,461)
(322)
205
2
(4)
(1,580)
1,075
–
–
(14)
650
(353)
(118)
91
–
9
(371)
279
Total
3,328
–
392
(411)
3
1
(8)
3,305
(1,814)
(440)
296
2
5
(1,951)
1,354
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 €117 million (2022: €105 million) for short-term leases and €64 million (2022: €74
million) on leases for low-value assets.
During the year, the Group recognised income of €11 million (2022: €12 million) from sublet properties.
The total cash outflow relating to leases was €465 million (2022: €590 million).
Lease liabilities are shown in note 15 on pages 203 and 207.
Unilever Annual Report and Accounts 2023
199
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements Unilever Group
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.
Interest in net assets of joint ventures
Interest in net assets of associates
Long-term trade and other receivables(a)
Other non-current assets(b)
(a)
(b)
Including indirect tax receivables where we do not have the contractual right to receive payment within 12 months.
Includes direct tax assets, withholding tax assets, interest on tax assets, contingent assets and investment properties.
Movements during 2023 and 2022
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
€ million
2023
70
24
394
423
911
2022
65
19
520
338
942
€ million
2023
€ million
2022
65
10
(241)
235
1
70
19
8
(5)
(4)
6
24
37
3
(189)
213
1
65
23
6
(4)
(5)
(1)
19
(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 224.
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
200
Unilever Annual Report and Accounts 2023
€ million
€ million
2023
1,815
3,662
5,477
(358)
5,119
2022
2,062
4,248
6,310
(379)
5,931
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements Unilever Group
12. Inventories continued
Provision for inventories
1 January
Charge to income statement
Reduction/(releases)
Currency translations
Others(a)
31 December
€ million
€ million
2023
379
80
(63)
(32)
(6)
358
2022
308
164
(66)
(12)
(15)
379
(a) Others include the amount relating to the acquisition/disposal of businesses and transfers.
Inventories with a value of €173 million (2022: €189 million) are carried at net realisable value, this being lower than cost. During 2023, a total
expense of €413 million (2022: €407 million) was recognised in the income statement for inventory write-downs and losses.
13. Trade and other current receivables
Trade and other current receivables are initially recognised at fair value plus any directly attributable transaction costs. Subsequently, except for
derivatives (see note 16 on page 208), 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
2023
€ million
2022
4,023
516
1,236
5,775
4,544
969
1,543
7,056
Included within trade receivables are discounts due to our customers of €2,528 million (2022: €2,436 million). Other receivables comprise financial
assets of €256 million (2022: €317 million) and non-financial assets of €979 million (2022: €1,226 million). Financial assets include supplier and
customer deposits, employee advances and certain derivatives. Non-financial assets mainly consist of reclaimable sales tax of €581 million (2022:
€753 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
€ million
2023
3,522
401
67
90
141
4,221
(198)
4,023
2022
3,919
498
96
69
150
4,732
(188)
4,544
The total impairment provision includes €198 million (2022: €188 million) for current trade receivables, €11 million (2022: €22 million) for other
current receivables and €13 million (2022: €68 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
€ million
2023
278
34
(82)
(3)
(5)
222
2022
286
27
(44)
4
5
278
Unilever Annual Report and Accounts 2023
201
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements Unilever Group
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 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
2023
10,355
5,057
512
167
766
€ million
2022
11,100
5,232
626
78
987
16,857
18,023
105
5
28
138
141
102
27
270
Total trade payables and other liabilities
16,995
18,293
Included within trade payables and other liabilities are discounts due to our customers of €2,294 million (2022: €2,121 million).
Included within others are IT and consulting services.
Deferred consideration
At 31 December 2023, the total balance of deferred consideration for acquisitions is €172 million (2022: €180 million), which includes contingent
consideration of €157 million (2022: €164 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) until 2025, with a maximum
contractual amount of €681 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 2023 and 31 December 2022, all such liabilities were classified as trade payables.
In May 2023, the IASB issued the final amendments to IAS 7 and IFRS 7 which address the disclosure requirements to enhance the transparency
of supplier finance arrangements and their effects on a company’s liabilities, cash flows and exposure to liquidity risk. We will first make these
disclosures in the 2024 Annual Report and Accounts.
202
Unilever Annual Report and Accounts 2023
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements Unilever Group
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 190 and 191.
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 the income statement. Put options are initially recognised at the present value of the expected gross obligation, with
changes in value being recognised in the income statement. Other financial liabilities, which includes put options, are subsequently carried at
amortised cost, with the exception of:
■ financial liabilities which the Group has elected to measure at fair value through profit or loss;
■ derivative financial liabilities – see note 16 on page 208; and
■ contingent consideration recognised by an acquirer in a business combination to which IFRS 3 applies. Such contingent consideration is
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 interest rate swaps and foreign exchange contracts.
The Treasury department maintains a list of approved financial instruments. The use of any new instrument must be approved by the Chief
Financial Officer. The use of leveraged instruments is not permitted.
Unilever considers the following components of its balance sheet to be managed capital:
■ total equity – retained profit, other reserves, share capital, share premium, non-controlling interests (notes 15A and 15B);
■ short-term debt – current financial liabilities (note 15C); and
■ long-term debt – non-current financial liabilities (note 15C).
The Group manages its capital so as to safeguard its ability to continue as a going concern and to optimise returns to our shareholders through an
appropriate balance of debt and equity. The capital structure of the Group is based on management’s judgement of the appropriate balance of
key elements in order to meet its strategic and day-to-day needs. We consider the amount of capital in proportion to risk and manage the capital
structure in light of changes in economic conditions and the risk characteristics of the underlying assets.
Our current long-term credit rating is A+/A1 and our short-term credit rating is A1/P1. We aim to maintain a competitive balance sheet which we
consider to be the equivalent of a credit rating of at least A/A2 in the long term. This provides us with:
■ appropriate access to the debt and equity markets;
■ sufficient flexibility for acquisitions;
■ sufficient resilience against economic and financial uncertainty while ensuring ample liquidity; and
■ optimal weighted average cost of capital, given the above constraints.
Unilever monitors the qualitative and quantitative factors utilised by the rating agencies. This information is publicly available and is updated by
the credit rating agencies on a regular basis.
Unilever Annual Report and Accounts 2023
203
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CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements Unilever Group
15A. Share capital
Unilever PLC
PLC ordinary shares of 31/9 p each(a)
Unilever Group
Euro equivalent in millions(b)
£ million
£ million
2023
78.3
2022
81.8
€ million
€ million
88
92
(a)
(b)
At 31 December 2023, 2,516,597,338 (2022: 2,629,243,772) of PLC ordinary shares were in issue. During the year 100,000 new shares were issued and 112,746,434 shares
were cancelled.
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 Governance report on pages 80 to 101.
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 in note 27 on page 226.
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
Other movements in equity
31 December
Analysis of other reserves
Fair value reserves – see following table
Currency retranslation of group companies – see following table
Capital redemption reserve
Book value of treasury shares – see following table
Repurchase of shares
Cancellation of PLC shares
Other(a)
€ million
€ million
2023
6,221
2,004
(1,315)
(1,531)
6,636
1,147
937
2022
6,354
1,604
(1,258)
(1,152)
6,828
1,190
940
€ million
€ million
2023
(22)
2022
95
(2,115)
(2,146)
(437)
(1)
405
80
20
(454)
(3)
395
97
(4)
(2,048)
(2,115)
€ million
€ million
€ million
Total 2023
Total 2022
Total 2021
392
329
(7,432)
(5,803)
25
(207)
(6,034)
5,282
(544)
(8,518)
21
(282)
(4,527)
—
(542)
(10,804)
(9,210)
502
(6,043)
21
(388)
(3,018)
—
(284)
(a)
Relates primarily to options to purchase non-controlling interest in subsidiaries.
Unilever acquired 31,734,256 of its own shares (2022: 34,217,605) of its own shares through purchases on the stock exchanges during the year,
which includes the share buyback programme as explained in note 24. 112,746,434 of PLC ordinary shares were cancelled during the year and the
remaining shares were held as treasury shares as a separate component of other reserves.
At 31 December 2023, 1,361,032 shares were held by employee share ownership trust and 36,903 shares were held by other group companies in
connection with share-based compensation plans. The shares held by the employee share trust are shown as a deduction from other reserves. The
total number of treasury shares held in connection with share-based compensation plans at 31 December 2022 was 3,054,400 shares. (See note 4C
on pages 190 and 191).
204
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CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements Unilever Group
15B. Equity continued
Treasury shares – movements during the year
1 January
Repurchase of shares
Cancellation of PLC shares
Other purchases and utilisations
31 December
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
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
€ million
2023
(4,809)
(1,507)
5,282
75
2022
(3,406)
(1,509)
—
106
(959)
(4,809)
€ million
€ million
2023
(5,803)
(1,514)
(115)
(7,432)
2022
(6,043)
212
28
(5,803)
€ million
€ million
2023
329
(27)
(27)
117
392
2022
502
45
(92)
(126)
329
Refer to the consolidated statement of comprehensive income on page 173, the consolidated statement of changes in equity on page 174, and
note 6C on page 194.
Remeasurement of defined benefit pension plans, net of tax
1 January
Movement during the year
31 December
€ million
€ million
2023
330
(510)
(180)
2022
803
(473)
330
Refer to the consolidated statement of comprehensive income on page 173, the consolidated statement of changes in equity on page 174, note 4B
from pages 185 to 190 and note 6C on page 194.
Currency retranslation gains/(losses) – movements during the year
1 January
Currency retranslation during the year:
Other reserves
Retained profit
Non-controlling interest
31 December
€ million
€ million
2023
(5,883)
(1,629)
294
(126)
(7,344)
2022
(6,497)
240
487
(113)
(5,883)
Unilever Annual Report and Accounts 2023
205
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CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements Unilever Group
15C. Financial liabilities
Financial liabilities(a)
Bank loans and overdrafts(b)
Bonds and other loans
Lease liabilities
Derivatives
Other financial liabilities(c)
€ million
€ million
€ million
€ million
€ million
€ million
Current
2023
501
Non-
Current
2023
5
Total
2023
506
Current
2022
Non-
Current
2022
508
11
Total
2022
519
4,066
22,626
26,692
4,723
21,789
26,512
334
48
138
1,061
1,395
446
397
494
535
340
102
102
1,068
1,408
529
316
631
418
5,087
24,535
29,622
5,775
23,713
29,488
(a)
(b)
(c)
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.
Bank loans and overdrafts include €5 million (2022: €4 million) of secured liabilities.
Includes options and financial liabilities to acquire non-controlling interests in the US, Myanmar, India, Italy and Hong Kong, refer to note 21.
Reconciliation of liabilities arising from financing activities
Movements in 2023 and 2022
2023
Bank loans and overdrafts(a)
Bonds and other loans(a)
Lease liabilities(b)
Derivatives
Other financial liabilities(a)
Total
2022
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
Closing
balance at
31 December
€ million
€ million
€ million
€ million
€ million
€ million
€ million
(519)
(98)
(26,512)
(413)
(1,408)
399
(631)
(418)
–
–
(29,488)
(112)
(9)
(3)
12
–
(44)
(44)
130
403
55
7
19
614
–
(159)
–
130
(81)
(110)
(10)
(506)
(8)
(26,692)
(453)
(1,395)
–
(11)
(494)
(535)
(482)
(29,622)
(402)
(129)
(27,621)
1,343
(1,649)
546
(184)
(277)
–
4
(30,133)
1,764
–
–
–
–
–
–
29
(727)
12
–
490
–
(2)
(448)
17
(671)
108
150
(17)
(519)
3
(26,512)
(317)
(1,408)
3
(270)
(631)
(418)
(598)
(29,488)
(a)
(b)
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 €(14) million (2022: €9 million) represents cash movements in overdrafts that are not included in
financing cash flows.
Lease liabilities cash movement is included within capital element of lease payments in the consolidated cash flow statement. The difference of €5 million (2022: €28
million) represents gain or loss from termination and modification of lease contracts.
206
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CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements Unilever Group
15C. Financial liabilities continued – Analysis of bonds and other loans
€ million
Unilever PLC
1.375% Notes 2024 (£)
1.875% Notes 2029 (£)
1.500% Notes 2026 (£)
1.500% Notes 2039 (€)
2.125% Notes 2028 (£)(a)
Total PLC
Other group companies
The Netherlands
1.625% Notes 2033 (€)
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 (€)
0.500% Notes 2023 (€)
0.500% Notes 2024 (€)
1.250% Notes 2025 (€)
1.750% Notes 2030 (€)
1.250% Notes 2031 (€)(a)
2.250% Notes 2034 (€)(a)
0.750% Notes 2026 (€)(a)
1.750% Notes 2028 (€)
3.250% Notes 2031 (€)
3.500% Notes 2035 (€)
United States
5.900% Bonds 2032 (US $)
2.900% Notes 2027 (US $)
3.500% Notes 2028 (US $)
2.000% Notes 2026 (US $)
3.125% Notes 2023 (US $)
3.250% Notes 2024 (US $)
3.100% Notes 2025 (US $)
2.600% Notes 2024 (US $)
3.500% Bonds 2028 (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)
3.300% Notes 2029 (€)
3.400% Notes 2033 (€)
4.875% Notes 2028 (US $)
5.000% Notes 2033 (US $)
Commercial Paper (US $)
Other countries
Switzerland
Others
Total other group companies
Total bonds and other loans
Total 2023
Total 2022
288
286
575
647
320
2,116
794
746
698
697
649
649
645
–
599
–
–
500
1,000
996
576
786
475
645
495
496
897
897
716
629
–
452
450
451
449
315
267
214
83
762
453
368
–
452
576
640
549
694
630
714
1,465
282
281
563
646
300
2,072
794
745
698
696
649
648
644
600
599
500
500
498
999
995
539
735
458
645
–
–
932
930
742
651
516
468
467
468
465
327
276
221
86
790
473
368
469
469
598
644
–
–
–
–
2,057
6
1
24,576
26,692
81
–
24,440
26,512
(a)
Bonds includes €(378) million (2022: €(537)million) 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 2023
207
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements Unilever Group
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 2023 and 2022. 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
balances have been invested conservatively with low-risk counter-parties at maturities of primarily 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 2023, Unilever had undrawn revolving 364-day bilateral credit facilities in aggregate of $5,200 million and €2,600 million (2022:
$5,200 million and €2,550 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 2024.
208
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CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements Unilever Group
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
542
84
84
971
54
192
1,927
Derivative contracts – payments
(648)
(150)
(125)
(1,020)
(95)
(326)
(2,364)
Undiscounted cash flows
2023
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:
Foreign exchange derivatives:
Derivative contracts – receipts
Derivative contracts – payments
Commodity derivatives:
Derivative contracts – receipts
Derivative contracts – payments
Total
2022
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
€ million
€ million
€ million
€ million
€ million
€ million
€ 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
(524)
(1)
(1)
(1)
(1)
(3)
(531)
(506)
(4,650)
(3,599)
(2,480)
(2,643)
(4,092)
(14,028)
(31,492)
(26,692)
(407)
(138)
(16,113)
(168)
(316)
(352)
(63)
(5)
(260)
(50)
(193)
(153)
(362)
(1,691)
(1,395)
–
–
(2)
(542)
(535)
(23)
(16)
–
–
(4)
–
(26)
(16,245)
(16,245)
–
(173)
(172)
(22,000)
(4,336)
(2,814)
(2,853)
(4,250)
(14,421)
(50,674)
(45,545)
7,704
(7,806)
–
(22)
(230)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
7,704
(7,806)
–
(22)
(66)
(41)
(49)
(41)
(134)
(561)
(559)
(22,230)
(4,402)
(2,855)
(2,902)
(4,291)
(14,555)
(51,235)
(46,104)
(529)
(5)
–
–
–
(7)
(541)
(519)
(5,220)
(3,102)
(3,494)
(2,369)
(2,541)
(14,176)
(30,902)
(26,512)
(397)
(104)
(17,166)
(79)
(320)
(27)
(74)
(96)
(245)
(290)
(28)
(14)
(196)
(144)
(347)
(1,649)
(1,408)
–
–
–
(421)
(418)
(16)
(12)
(38)
(17,334)
(17,334)
–
–
–
(189)
(180)
(23,495)
(3,624)
(4,071)
(2,581)
(2,697)
(14,568)
(51,036)
(46,371)
(452)
(85)
(22)
(529)
(217)
(38)
Derivative contracts – receipts
59
59
59
59
55
249
540
Derivative contracts – payments
(106)
(159)
(142)
(133)
(114)
(483)
(1,137)
Foreign exchange derivatives:
Derivative contracts – receipts
Derivative contracts – payments
Commodity derivatives:
Derivative contracts – receipts
Derivative contracts – payments
8,244
(8,469)
–
(38)
(310)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
8,244
(8,469)
–
(38)
(100)
(83)
(74)
(59)
(234)
(860)
(784)
Total
(23,805)
(3,724)
(4,154)
(2,655)
(2,756)
(14,802)
(51,896)
(47,155)
The Group has sublet a small proportion of leased properties. Related future minimum sublease payments are €23 million (2022: €42 million).
Unilever Annual Report and Accounts 2023
209
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements Unilever Group
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
€ million
€ million
€ million
€ million
€ million
€ million
€ 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
2023
Foreign exchange cash inflows
Foreign exchange cash outflows
Interest rate swaps cash inflows
Interest rate swaps cash outflows
Commodity contracts cash inflows
Commodity contracts cash outflows
2022
Foreign exchange cash inflows
Foreign exchange cash outflows
2,807
(2,842)
526
(528)
8
(22)
3,100
(3,180)
Interest rate swaps cash inflows
564
502
Interest rate swaps cash outflows
(464)
(473)
Commodity contracts cash inflows
Commodity contracts cash outflows
6
(38)
–
–
(a)
See note 16C.
–
–
68
–
–
68
–
–
959
–
–
42
–
–
2,807
(2,842)
1,387
3,050
(68)
(68)
(978)
(55)
(1,387)
(3,084)
–
–
–
–
–
–
–
–
27
(13)
–
–
–
–
–
–
–
–
–
–
27
952
(13)
(923)
–
–
–
–
–
–
–
–
–
–
–
–
8
(22)
3,100
(3,180)
2,072
(1,886)
6
(38)
–
(6)
48
–
8
(22)
–
(48)
119
–
6
(38)
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 income statement 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).
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FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements Unilever Group
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.
Potential impact of risk
Management policy and
hedging strategy
Sensitivity to the risk
(i) Commodity price risk
The Group is exposed to the risk of changes in
commodity prices in relation to its purchase of
certain raw materials.
At 31 December 2023, the Group had hedged
its exposure to future commodity purchases
with commodity derivatives valued at
€342 million (2022: €576 million).
Hedges of future commodity purchases
resulted in cumulative losses of €79 million
(2022: gain of €197 million) being reclassified
to the income statement and losses of
€34 million (2022: gain of €103 million)
being recognised as a basis adjustment to
inventory purchased.
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.
A 10% increase in commodity prices as at
31 December 2023 would have led to
a €40 million gain on the commodity
derivatives in the cash flow hedge reserve
(2022: €58 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.
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 Business Operations Officer
(CBOO) or the Global Commodity Operating
Team which is chaired by the Chief
Procurement Officer.
(ii) Currency risk
Currency risk on sales, purchases and
borrowings
The Group manages currency exposures within
prescribed limits, mainly through the use of
forward foreign currency exchange contracts.
Because of Unilever’s global reach, it is subject
to the risk that changes in foreign currency
values impact the Group’s sales, purchases
and borrowings.
At 31 December 2023, the exposure to the
Group from companies holding financial
assets and liabilities other than in their
functional currency amounted to €254 million
(2022: €315 million).
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.
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 €25 million
loss in the income statement (2022:
€32 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.
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 €142 million
loss (2022: €99 million loss) in equity.
A 10% weakening of the same 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
2023
(951)
(372)
363
(97)
(136)
(42)
(181)
(1,416)
2022
(958)
(408)
764
(103)
(86)
(64)
(136)
(991)
* Euro exposure relates to group companies having
non-euro functional currencies.
Unilever Annual Report and Accounts 2023
211
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FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements Unilever Group
16B. Management of market risk continued
Potential impact of risk
Management policy and
hedging strategy
Sensitivity to the risk
Impact on equity – net investment hedges
A 10% strengthening of the euro against
other currencies would have led to
€260 million (2022: €280 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 €2,620
million negative retranslation effect (2022:
€2,370 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 2023 would have led to an
additional €77 million of additional finance
cost (2022: €85 million additional finance
costs).
A 1.0 percentage point decrease in floating
interest rates on a full-year basis would have
led to 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 2023 would have led to an
additional €7 million debit in equity from
derivatives in cash flow hedge relationships
(2022: €1 million credit).
A 1.0 percentage point decrease in interest
rates on a full-year basis would have led to
an additional €8 million credit in equity from
derivatives in cash flow hedge relationships
(2022: €1 million debit).
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 €13.0 billion (2022: €13.0 billion),
of which €9.0 billion (2022: €8.8 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 USD net
investment hedges with a nominal value of
€2.6 billion (2022: €2.8 billion) for USD.
At 31 December 2023, the net exposure of the
net investments in foreign currencies amounts
to €26.2 billion (2022: €23.7 billion).
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.
Treasury may decide on a case-by-case basis
to actively hedge the currency exposure from
net investment in foreign operations. 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 USD 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 fair value
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.
(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 2023, interest rates
were fixed on approximately 70% of the
expected financial liabilities (excluding lease
liabilities) for 2024, and 59% for 2025 (68% for
2023 and 59% for 2024 at 31 December 2022).
As at year end, the Group had the below
notional amount of interest rate derivatives
outstanding on which hedge accounting is
applied:
Cash flow hedge
Currency
EUR
USD
Fair value hedge
Currency
EUR
USD
GBP
€ million
€ million
2023
2,605
1,250
1,355
3,566
2,000
1,220
346
2022
1,923
–
1,923
3,606
2,000
1,267
339
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 2023 was 5.9% (2022: 1.2%).
(a)
See the weighted average amount of financial liabilities with fixed-rate interest shown in the following table.
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CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements Unilever Group
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:
Current financial liabilities
Non-current financial liabilities
Total financial liabilities
Less: lease liabilities
Financial liabilities (excluding lease liabilities)
Of which:
€ million
2023
(5,087)
(24,535)
(29,622)
(1,395)
28,227
€ million
2022
(5,775)
(23,713)
(29,488)
(1,408)
28,080
Fixed rate (weighted average amount of fixing for the following year)
(20,527)
(19,594)
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
€ million
€ million
€ million
€ million
€ million
€ million
31 December 2023
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 2022
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
Trade
and other
receivables
Current
financial
assets
Non-Current
financial
assets
Trade
payables
and other
liabilities
Current
financial
liabilities
Non-Current
financial
liabilities
–
22
–
7
–
–
–
8
–
–
–
–
(a)
37
–
–
–
–
–
37
37
Total assets
–
32
–
51
–
–
–
6
–
–
–
–
(a)
163
–
75
–
–
–
89
238
Total assets
–
–
–
–
–
75
–
–
–
75
149
–
–
–
–
–
51
–
–
–
51
378
–
(28)
–
(15)
–
–
–
(22)
–
–
–
(42) (a)
–
–
(6)
–
–
–
–
–
–
–
(425)
(21)
–
–
–
(65)
(48)
Total liabilities
(446)
(559)
–
(80)
–
(35)
–
–
–
(38)
–
–
–
(a)
(92)
(a)
(10)
–
–
–
–
–
–
–
–
–
(522)
(7)
–
–
–
(153)
(102)
Total liabilities
(529)
(784)
Total
–
(6)
(42)
29
(425)
48
–
(14)
–
(410)
(410)
–
(48)
(92)
169
(522)
119
–
(32)
–
(406)
(406)
(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.
Unilever Annual Report and Accounts 2023
213
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CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements Unilever Group
16C. Derivatives and hedging continued
Master netting or similar agreements
A number of legal entities within the Group enter into derivative transactions under International Swaps and Derivatives Association (ISDA) master
netting agreements. In general, under such agreements the amounts owed by each counter-party on a single day in respect of all transactions
outstanding in the same currency are aggregated into a single net amount that is payable by one party to the other. In certain circumstances,
such as when a credit event such as a default occurs, all outstanding transactions under the agreement are terminated, the termination value
is assessed and only a single net amount is payable in settlement of all transactions.
The ISDA agreements do not meet the criteria for offsetting the positive and negative values in the consolidated balance sheet. This is because the
Group does not have a legally enforceable right to offset recognised amounts against counterparties, as the right to offset is enforceable only
upon the occurrence of 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 2023
Derivative financial assets
As at 31 December 2022
Derivative financial assets
Related amounts not set
off in the balance sheet
€ million
€ million
€ million
€ million
€ million
€ 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
191
449
(42)
149
(122)
(6)
(71)
378
(272)
(81)
21
25
(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
€ million
€ million
€ million
€ million
€ 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
(601)
(855)
42
71
(559)
122
(784)
272
–
–
(437)
(512)
As at 31 December 2023
Derivative financial liabilities
As at 31 December 2022
Derivative financial liabilities
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FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements Unilever Group
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 the income statement.
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 the income statement. 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 the income statement. On derecognition, the cumulative gain or loss recognised in other comprehensive income
is reclassified from equity to the income statement. 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 the income statement.
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 the income statement. When a later event causes the
impairment losses to decrease, the reduction in impairment loss is also recognised in the income statement. Permanent impairment losses on
debt instruments classified as fair value through other comprehensive income are recognised in the income statement.
Unilever Annual Report and Accounts 2023
215
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CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements Unilever Group
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
considered to be the same as the carrying amount for 2023 and 2022. The Group’s cash resources and other financial assets are shown below.
€ million
€ million
€ million
€ million
€ million
€ million
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
Total
2022
2,553
1,743
30
4,326
Current Non-current
2023
2023
Total
2023
Current Non-current
2022
2022
2,862
1,181
116
4,159
961
151
37
582
1,731
5,890
–
–
–
–
2,862
1,181
116
4,159
2,553
1,743
30
4,326
–
–
–
–
454
1,415
772
232
1,004
458
609
–
407
407
75
399
1,386
1,386
112
981
3,117
7,276
238
425
1,435
5,761
51
464
1,154
1,154
289
889
2,589
6,915
(a)
(b)
(c)
(d)
(e)
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.
Short-term deposits typically have maturity of up to 3 months.
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 €227 million
(2022: €199 million).
Included within non-current financial assets at fair value through other comprehensive income are equity investments. 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 2023 of these
equity investments was €(39) million (2022: €41 million).
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 €33 million (2022:
€39 million), option to acquire non-controlling interest in subsidiaries of €31 million (2022: €41 million) and investments in 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 2022.
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
€ million
2023
4,159
(116)
2
–
2022
4,326
(101)
–
–
4,045
4,225
Approximately €0.9 billion (or 21%) 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. The
Group maintain access to global debt markets through an infrastructure of short-and long-term debt programmes. The Group 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 208 to 214.
The remaining €3.3 billion (or 79%) 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 €98 million (2022: €449 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.
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FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements Unilever Group
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 2023, the collateral held by Unilever under such arrangements amounted to €6
million (2022: €97 million), of which €6 million (2022: €81 million) was in cash, and nil in 2023 (2022: €16 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 risk 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
€ million
Fair value
Fair value
2023
2022
4,159
1,415
609
112
981
7,276
4,326
1,004
407
289
889
6,915
€ million
Carrying
amount
2023
4,159
1,415
609
112
981
7,276
(506)
(519)
(506)
(26,112)
(25,136)
(26,692)
(1,395)
(1,408)
(1,395)
(494)
(535)
(631)
(418)
(494)
(535)
€ million
Carrying
amount
2022
4,326
1,004
407
289
889
6,915
(519)
(26,512)
(1,408)
(631)
(418)
(29,042)
(28,112)
(29,622)
(29,488)
The fair value of financial assets and financial liabilities (excluding listed bonds) is considered to be the same as the carrying amount for 2023
and 2022. 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.
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FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements Unilever Group
18. Financial instruments fair value risk continued
For assets and liabilities which are carried at fair value, the classification of fair value calculations by category is summarised below:
€ million
€ million
€ million
€ million
€ million
€ million
Notes
Level 1
2023
Level 1
2022
Level 2
2023
Level 2
2022
Level 3
2023
Level 3
2022
€ million
Total fair
value
2023
€ million
Total fair
value
2022
Assets at fair value
Financial assets at fair value
through other comprehensive
income
Financial assets at fair value
through profit or loss:
Derivatives(a)
Other
Liabilities at fair value
Derivatives(b)
Contingent consideration
17A
163
5
4
3
442
399
609
407
16C
17A
–
582
16C
14
–
–
–
428
–
–
149
–
378
–
–
399
–
461
149
981
378
889
(559)
(784)
–
–
–
–
(157)
(164)
(559)
(157)
(784)
(164)
(a)
(b)
Includes €37 million (2022: €89 million) derivatives, reported within trade receivables, that hedge trading activities.
Includes €(65) million (2022: €(153) million) derivatives, reported within trade payables, that hedge trading activities.
There were no significant changes in classification of fair value of financial assets and financial liabilities since 31 December 2022. There were also
no significant movements between the fair value levels since 31 December 2022.
The impact in 2023 income statement due to Level 3 instruments is a loss of €(68) million (2022: gain of €11 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/(losses) recognised in income statement
Gains/(losses) recognised in other comprehensive income
Purchases and new issues
Sales and settlements*
31 December
€ million
€ million
2023
696
(68)
(8)
71
(7)
684
2022
748
11
55
94
(212)
696
* Includes nil 2023 (2022: €(157) million) movement due to derecognition of Unilever Ventures' equity interest in Nutrafol before business combination (refer to note 21 for
more details).
Significant unobservable inputs used in Level 3 fair values
Assets valued using Level 3 techniques include €584 million (2022: €623 million) relating to a number of unlisted investments within Unilever
Ventures companies, none of which are individually material; €161 million (2022: €122 million) of long-term cash receivables under life insurance
policies and €31 million (2022: €41 million) for option to acquire non-controlling interest. Valuation techniques used are specific to each asset and
liability, a change in one or more of the inputs to reasonably possible alternative assumptions would not change the value significantly for all
assets and liabilities.
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 2022.
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 €584 million (2022: €623 million) of investments within
Unilever Ventures companies.
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FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements Unilever Group
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 2023
1 January 2023
Additions through business combinations
Income statement:
Charges
Releases
Utilisation
Currency translation
31 December 2023
€ million
€ million
2023
537
563
1,100
2022
748
550
1,298
€ million
€ million
€ million
€ million
€ million
Restructuring
305
–
58
(40)
(147)
(1)
175
Legal
321
1
91
(110)
(37)
(25)
241
Brazil
indirect taxes
66
–
11
(2)
(9)
2
68
Other
606
–
209
(100)
(82)
(17)
616
Total
1,298
1
369
(252)
(275)
(41)
1,100
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 product 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 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 197 to 199.
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
€ million
Leases
Leases
€ million
Other
Commitments
€ million
Other
Commitments
2023
64
79
148
291
2022
64
91
164
319
2023
1,510
2,595
265
4,370
2022
1,806
2,020
231
4,057
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FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements Unilever Group
20. Commitments and contingent liabilities continued
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, with no other contingent liability being individually material.
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
Brazil tax
€ million
€ million
2023
3,757
40
174
983
4,954
575
5,529
2022
3,292
40
154
876
4,362
609
4,971
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 2023, 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 €3,757 million (2022:
€3,292 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, there remains the possibility of material tax assessments related to the same matters for periods not yet assessed.
We expect that tax litigation cases related to this matter may move from the Administrative to the Judicial Courts, although the exact timing is
uncertain. In such case, 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.
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 195
to 197.
Non-controlling interests are valued based on the proportion of net assets of the acquired company at the date of acquisition.
Transaction costs are expensed as incurred.
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.
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FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements Unilever Group
21. Acquisitions and disposals continued
2023
In 2023, the Group completed the business acquisitions and disposals as listed below. The net consideration for acquisitions in 2023 is €675 million
(2022: €811 million for acquisitions completed during that year). More information related to the 2023 acquisitions is provided below.
Deal completion date
Acquired/disposed business
10 January 2023
1 May 2023
1 August 2023
Acquired 51% of Zywie Ventures Private Limited ('OZiva'), a leading plant-based, and clean-label consumer
wellness brand focused on the need spaces such as Lifestyle Protein, Hair & Beauty Supplements and Women’s
health.
Sold Suave brand in North America to Yellow Wood Partners LLC. The Suave beauty and personal care brand
includes hair care, skin care, skin cleansing and deodorant products.
Acquired 100% of Yasso Holdings, Inc. ('Yasso'), a premium frozen Greek yogurt brand in the United States
offering a high-quality range of low-calorie yet indulgent products. The acquisition is aligned to the
premiumisation strategy of Unilever’s Ice Cream Business Group.
1 November 2023
Sold Dollar Shave Club to Nexus Capital Management LP.
On 1 May 2023, Unilever sold the North America Suave business to Yellow Wood Partners LLC for consideration of €592 million. A gain on disposal
of €497 million has been recognised (see note 3).
On 18 December 2023, Unilever announced that it has received a binding offer from Yellow Wood Partners LLC to acquire Elida Beauty. Elida Beauty
comprises more than 20 beauty and personal care brands including Q-Tips, Caress, Timotei and TIGI. Completion is expected by mid-2024.
On 22 December 2023, the Group announced it had signed an agreement to acquire K18, a premium biotech hair care brand in the US. The
transaction completed on 1 February 2024 and the provisional accounting for this transaction, including the valuation of assets and liabilities
acquired, is expected to be completed by H1 2024. This acquisition is another step towards the optimisation of Unilever’s portfolio into premium
segments.
2022
In 2022, the Group completed the business acquisitions and disposals as listed below. The net consideration for acquisitions in 2022 was €811
million. More information related to the 2022 acquisition is provided below.
Deal completion date
Acquired/disposed business
25 April 2022
29 April 2022
1 July 2022
7 July 2022
Nutrafol Acquisition
Sold S3, Royale Ambrée and Petit Cheri brands in Spain to Sensogreen Healthcare.
Sold Unilever Life, the direct-selling business in Thailand, to RS Group
Sold ekaterra (global tea business excluding India, Indonesia, Nepal and Ready to Drink) to CVC Capital
Partners. ekaterra includes brands such as Lipton, Brooke Bond and PG Tips. Further details are provided below.
Acquired a further 67% of Nutraceutical Wellness, Inc. (Nutrafol) bringing total investment to 80%, a producer
based in the US of hair growth solutions for men and women. The acquisition complements Unilever’s existing
Health & Wellbeing portfolio, bringing to market a science-led approach to hair wellness. Further details are
provided below.
On 7 July 2022, Unilever acquired a further 67% of the shares of Nutrafol, a US-based hair wellness company in which Unilever Ventures previously
held a minority stake (13%), to bring Unilever’s total equity interest to 80%. The fair value of Unilever Ventures' equity interest in Nutrafol before the
business combination amounted to €157 million, with a gain of €149 million recognised as Other Comprehensive Income prior to derecognition
of the investment. Strategically, Nutrafol expands our Health & Wellbeing portfolio, bringing to market a science-led approach to hair wellness
supported by digital-first capabilities. We believe Unilever’s capabilities and sustainability principles will allow us to protect the legacy of the brand
while strengthening it.
The total consideration paid for the 67% share of Nutrafol was €811 million, all of which was settled in cash on completion.
The fair value of net assets recognised on the balance sheet was €487 million. The main asset acquired was the brand intangible 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. The key assumptions in the brand valuation were revenue growth and discount rates. A deferred tax liability
primarily related to the brand intangibles estimated at €153 million was also recognised. As part of the acquisition, goodwill of €580 million was
recognised and was not deductible for tax purposes.
Effect on consolidated income statement
The acquisition deals completed in 2023 have contributed €82 million to the Group turnover and €18 million to the Group operating profit since the
date of acquisition. If the acquisition deals completed in 2023 had all taken place at the beginning of the year, Group turnover would have been
€59,709 million, and Group operating profit would have been €9,780 million. In 2022, the impact of acquisitions completed in the year was €174
million to Group turnover and €31 million to Group operating profit since the date of acquisition. If all of the acquisitions had taken place at the
beginning of 2022, Group turnover for 2022 would have been €60,206 million and Group operating profit would have been €10,772 million.
Unilever Annual Report and Accounts 2023
221
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FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements Unilever Group
21. Acquisitions and disposals continued
Effect on consolidated balance sheet
Acquisitions
The following table sets out the overall impact of acquisitions in 2023 as well as comparative years on the consolidated balance sheet. The
fair values currently used for opening balances are provisional. These balances remain provisional due to there being outstanding relevant
information in regard to facts and circumstances that existed as of the acquisition date and/or where valuation work is still ongoing.
€ million
€ million
€ million
Net assets acquired
Non-controlling interest
Goodwill
Total consideration
In 2023, the net assets acquired and total payment for acquisitions consists of:
2023
368
(20)
327
675
2022
487
(99)
580
968
Intangible assets
Other non-current assets
Trade and other receivables
Other current assets(a)
Non-current liabilities(b)
Current liabilities
Net assets acquired
Non-controlling interest
Goodwill(c)
Total consideration
Of which:
Cash consideration paid
Deferred consideration
2021
1,372
(14)
759
2,117
€ million
2023
430
4
25
56
(114)
(33)
368
(20)
327
675
652
23
(a) Other current assets include inventories of €18 million and cash and cash equivalents of €30 million.
(b) Non-current liabilities include deferred tax of €109 million.
(c)
Goodwill not deductible for tax purposes.
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 195 to 197.
Disposals
Total consideration for 2023 disposals is €578 million (2022: €4,606 million for disposals completed during that year). The following table sets out
the effect of disposals in 2023 and comparative year on the consolidated balance sheet. The results of disposed businesses are included in the
consolidated financial statements up until their date of disposal.
Goodwill and intangible assets(a)
Other non-current assets(b)
Current assets(c)
Liabilities(d)
Net assets sold
(Gain)/loss on recycling of currency retranslation on disposal
Profit/(loss) on sale attributable to Unilever
Consideration
Of which:
Cash
Cash balances of businesses sold
Non-cash items and deferred consideration
€ million
€ million
2023
56
55
108
(144)
75
14
489
578
472
5
101
2022
948
1,075
833
(649)
2,207
65
2,334
4,606
4,606
20
(20)
(a)
(b)
(c)
(d)
2023 mainly related to the disposal of Suave and Dollar Shave Club.
2023 includes PPE of €42 million and related to the disposal of Dollar Shave Club.
2023 includes inventories of €88 million related to the disposals of Suave and Dollar Shave Club and trade and other receivables of €8 million related to Dollar Shave
Club disposal.
2023 includes €123 million of trade payables.
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FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements Unilever Group
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.
On 18 December 2023, Unilever announced that it has received a binding offer from Yellow Wood Partners LLC to acquire Elida Beauty. Elida Beauty
comprises more than 20 beauty and personal care brands including Q-Tips, Caress, Timotei and TIGI. As a result, the assets and liabilities of Elida
Beauty have been classified as held for sale as at 31 December 2023 and the completion is expected by mid-2024. Following the classification of
assets and liabilities as held for sale, they are recognised as current on the balance sheet.
Property, plant and equipment held for sale(a)
Disposal groups held for sale
Non-current assets
Goodwill and intangibles
Property, plant and equipment
Other non-current assets
Current assets
Inventories
Trade and other receivables
Current tax assets
Cash and cash equivalents
Assets held for sale
Current liabilities
Trade payables and other current liabilities
Current tax liabilities
Financial liabilities due within one year
Non-current liabilities
Financial liabilities due after one year
Deferred tax liabilities
Liabilities held for sale
(a)
Includes manufacturing assets held for sale.
€ million
€ million
2023
Total
2
2022
Total
4
534
21
1
556
80
47
4
2
133
691
24
2
–
26
4
145
149
175
2
20
–
22
–
2
–
–
2
28
2
–
2
4
–
–
–
4
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FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements Unilever Group
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
€ million
2023
Total
1,144
134
99
111
219
19
2022
Total
1,158
134
78
33
226
22
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 and liquidated during 2023. Unilever had invested €65 million in Langholm II, and all outstanding
balances and commitments have been closed.
24. Share buyback
On 10 February 2022, we announced a share buyback programme of up to €3 billion to be completed over 2022 and 2023. During 2023, the Group
repurchased 31,734,256 (2022: 34,217,605) ordinary shares which are held by Unilever as treasury shares. Consideration paid in 2023 for the
repurchase of shares including transaction costs was €1,507 million (2022: €1,509 million) and was recognised in other reserves.
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FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements Unilever Group
25. Remuneration of auditors
Fees payable to the Group’s auditors for the audit of the consolidated and parent
company accounts of Unilever PLC
Fees payable to the Group’s auditors for the audit of accounts of subsidiaries of
Unilever PLC pursuant to legislation(a)(b)
Total statutory audit fees
Fees payable to the Group’s auditors for the audit of non-statutory
financial statements(c)
Audit-related assurance services(d)
Other taxation advisory services
Services relating to corporate finance transactions
Other assurance services(e)
All other non-audit services(d)
Total fees payable
€ million
2023
€ million
2022
€ million
2021
7
16
23
–
–
–
–
1
–
24
6
17
23
–
–
–
–
1
–
24
5
17
22
5
–
–
–
1
–
28
(a)
(b)
(c)
(d)
(e)
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.
Amount payable to KPMG in respect of services supplied to associated pension schemes was less than €1 million individually and in aggregate (2022: less than
€1 million individually and in aggregate; 2021: less than €1 million individually and in aggregate).
2021 includes €5 million for the audit of carve-out financial statements of ekaterra.
Amounts paid in relation to each type of service are less than €1 million individually and in aggregate (2022: less than €1 million and in aggregate; 2021: less than
€1 million and in aggregate).
2023, 2022 and 2021 include various services, each less than €1 million individually.
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 8 February 2024, Unilever announced a quarterly dividend with the 2023 fourth-quarter results of £0.3647 per PLC ordinary share. The total value
of the announced dividend is €1,067 million.
Debt issuance
On 15 February 2024, Unilever issued €600 million 3.25% fixed rate notes maturing in 2032 and €600 million 3.50% fixed rate notes maturing in 2037.
Brand acquisition
As disclosed elsewhere in this report, the acquisition of K18 completed on 1 February 2024.
Unilever Annual Report and Accounts 2023
225
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements Unilever Group
27. Significant subsidiaries
The following represents the significant subsidiaries of the Group at 31 December 2023, 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.
Shareholding %
100%
100%
61%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
62%
85%
100%
100%
100%
100%
100%
100%
100%
100%
99%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Country
Argentina
Australia
Bangladesh
Brazil
Canada
China
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
Wall's (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
Germany
India
Indonesia
Italy
Mexico
Netherlands
Netherlands
Netherlands
Netherlands
Netherlands
Netherlands
Pakistan
Philippines
Russia
Singapore
South Africa
Spain
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.
Mixhold B.V.
Unilever Finance Netherlands B.V.
Unilever IP Holdings B.V.
Unilever Nederland B.V.
Unilever Europe 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 Espana S.A.
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.
United States of America
The LIV Group, Inc.
Vietnam
Unilever Vietnam International Company Limited
See pages 234 to 244 for a complete list of subsidiary undertakings, associates and joint ventures.
226
Unilever Annual Report and Accounts 2023
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
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
Other expenses
Operating loss
Net finance costs
Finance income
Finance costs
Income from shares in group companies
Profit/(loss) on disposal 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
Total comprehensive income
Statement of cash flows
Notes
1
2
3
£ million
£ million
2023
82
82
(904)
(4)
(826)
(387)
77
(464)
5,598
—
4,385
184
4,569
£ million
2023
4,569
(3)
4,566
2022
211
211
(248)
(16)
(53)
(112)
37
(149)
3,237
(119)
2,953
35
2,988
£ million
2022
2,988
3
2,991
Unilever PLC does not have cash and cash equivalents. Instead, Unilever PLC has current accounts with Unilever UK Central Resources Limited and
Unilever Finance International AG. Unilever UK Central Resources Limited and Unilever Finance International AG make and collect payments on
behalf of Unilever PLC.
Unilever Annual Report and Accounts 2023
227
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Company Accounts Unilever PLC
Statement of changes in equity
£ million
£ million
£ million
£ million
£ million
£ million
Statement of changes in equity
1 January 2022
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
Repurchase of shares(a)
Other movements in treasury shares(b)
Other movements in equity
31 December 2022
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(d)
Repurchase of shares(a)
Cancellation of treasury shares(c)
Other movements in treasury shares(b)
Other movements in equity
31 December 2023
Called up
Share capital
82
–
–
–
–
–
–
–
82
–
–
–
–
–
–
(4)
–
–
78
Share
premium
account
47,125
–
–
–
–
–
–
–
47,125
–
–
–
–
–
–
–
–
–
Capital
redemption
reserve
Other
reserves
Retained
profit
Total equity
(2,794)
24,751
2,988
69,179
2,988
15
–
–
–
–
–
–
–
15
–
–
–
–
–
–
4
–
–
–
–
–
–
3
3
2,991
2,991
(3,704)
(3,704)
(1,295)
67
–
–
–
(12)
(4,022)
24,026
4,569
(1,295)
67
(12)
67,226
4,569
–
–
–
–
–
(1,311)
(3)
(3)
4,566
4,566
(3,777)
(3,777)
–
–
–
(1,311)
4,535
(4,535)
77
–
(22)
(4)
–
55
(4)
47,125
19
(721)
20,254
66,755
(a) During 2023, Unilever PLC repurchased 31,734,256 PLC ordinary shares (2022: 34,217,605). Consideration paid for the repurchase of these shares including transaction
(b)
(c)
costs was £1,311 million (2022: £1,295 million) which was initially recorded in other reserves.
At 31 December 2023, 1,361,032 (2022: 2,727,097) treasury shares are held at an employee share ownership trust.
During 2023, 112,746,434 ordinary shares held in treasury were cancelled pertaining to 2021, 2022 and up to June 2023. The amount paid to repurchase these shares
was initially recognised in other reserves and was transferred to retained profit on cancellation amounting to £4,535 million.
(d) During the year, 100,000 ordinary shares were issued at 3 1/9 pence per share amounting to £3,111.
228
Unilever Annual Report and Accounts 2023
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Company Accounts Unilever PLC
Balance sheet
as at 31 December
Assets
Non-current assets
Investments in subsidiaries
Other non-current assets
Deferred tax assets
Pension assets
Current assets
Trade and other current receivables
Other current assets
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
(a)
Restated following adoption of IFRS 17. See note 8 for further details.
£ million
Notes
2023
£ million
2022
Restated(a)
4
5
3
6
5
7
8
8
9
9
9
9
76,313
1,308
1
1
76,270
1,567
12
5
77,623
77,854
349
250
599
235
–
235
78,222
78,089
9,428
422
9,850
1,615
2
1,617
11,467
78
47,125
19
(721)
20,254
66,755
78,222
8,832
163
8,995
1,866
2
1,868
10,863
82
47,125
15
(4,022)
24,026
67,226
78,089
These financial statements have been approved by the Directors and signed on their behalf by Fernando Fernandez.
F Fernandez on behalf of The Board of Directors
7 March 2024
Unilever Annual Report and Accounts 2023
229
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Notes to the Company Accounts
Unilever PLC
Accounting information and policies
Basis of preparation
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 the 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. As PLC does not have cash and
cash equivalents, we are no longer presenting a separate statement
of cash flows.
Capital Redemption Reserve
The nominal value of shares cancelled is transferred from share capital
to the capital redemption reserve.
Critical accounting estimates and judgements
The preparation of financial statements requires management to make
judgements and estimates in the application of accounting policies
that affect the reported amounts of assets, liabilities, income and
expenses. Actual results may differ from these estimates. Estimates
and judgements are 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.
There are no judgements and estimates which management believe
have a significant effect on the amounts recognised in the PLC
Company Accounts.
Accounting policies
The accounting policies of PLC Company Accounts are the same as the
Unilever Group, refer to pages 177 to 179, 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.
The operating profit includes residual central group costs charged to
PLC from another group company, Unilever Europe Business Centre
B.V. (UEBC). These residual costs arise because central group costs are
incurred and charged out to group entities by UEBC, but some of these
are not able to be recovered by UEBC. These costs are recharged to PLC
as the ultimate parent entity of the Group.
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. IFRS 17
‘Insurance Contracts’ has been released and is mandatory for annual
reporting periods beginning on or after 1 January 2023. The standard
provides that wherein the issuer has explicitly asserted that it regards
financial guarantees as insurance contracts and has used accounting
applicable to insurance contracts, the issuer may choose to apply either
IFRS 17 or IAS 32, IFRS 7 and IFRS 9 to account for such guarantees.
Unilever has made an election to apply IAS 32, IFRS 7 and IFRS 9 and it
will be treated as a change in accounting policy, with restatement of
comparatives for the previous reporting period.
230
Unilever Annual Report and Accounts 2023
1. Turnover
Royalties (point in time)
Services (over time)
Turnover
£ million
£ million
2023
6
76
82
2022
104
107
211
2. Income from shares in group companies
Dividends received from shares in group
undertakings
3. Taxation
Current tax
Current year
Adjustments in respect of prior years
Deferred tax
Current year
Adjustments in respect of prior years
Tax (charge)/credit on profits on ordinary
activities
£ million
£ million
2023
2022
5,598
5,598
3,237
3,237
£ million
£ million
2023
2022
190
6
196
29
(41)
(12)
184
7
15
22
–
13
13
35
The current UK corporate tax rate is a blended rate of 23.5% (2022: 19%).
On 10 June 2021, the Finance Act 2021 received Royal Assent, confirming
that the UK rate of corporation tax increased from 19% to 25% from
1 April 2023. This has a consequential impact on the company's tax
charge. Deferred tax balances are measured at the tax rate to be
applied when temporary differences are expected to reverse in the
future.
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Notes to the Company Accounts Unilever PLC
Reconciliation of tax expense
Profit/(loss) for the year
Tax using the UK corporation tax rate of
23.5% (2022: 19%)
Tax effects of:
Income not subject to tax (primarily tax-
exempt dividends)
Non-deductible expenses
Effects of tax rates in foreign jurisdictions
Double tax relief
Permanent differences – other
(Under)/over provided in prior years
Total tax expense
1,316
(16)
(54)
2
2
(35)
184
615
3
(65)
–
15
28
35
The movement in deferred tax asset is as below:
Movement in 2023
Pensions and similar
obligations
Tax losses
Total deferred tax asset
(net)
As at 1
January
2023
Income
statement
Other
compre-
hensive
income
As at 31
December
2023
(1)
13
–
(12)
12
(12)
1
–
1
–
1
1
Movement in 2022
Pensions and similar
obligations
Tax losses
Total deferred tax asset
(net)
As at 1
January
2022
Income
statement
Other
compre-
hensive
income
As at 31
December
2022
–
–
–
–
13
13
(1)
–
(1)
(1)
13
12
£ million
£ million
2023
4,385
2022
2,953
(1,031)
(561)
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. Additionally, some investments benefit
from the synergies of multiple CGUs together. Management evaluates
on a case-to-case basis whether any impairment booked for the Group
impacts the carrying value of the investments. Based on the evaluation
for the current year, management has not determined any indicators of
impairment for investments.
5. Other non-current assets
Loans to group companies(b)
£ million
£ million
31 Dec 2023
31 Dec 2022
1,308
1,308
1,567
1,567
(b)
Loans to group companies are interest-bearing at market rates and are
unsecured and repayable on demand. During the year, a loan amounting to
£250 million was reclassed to other current assets based on the maturity date.
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.
6. Trade and other current receivables
Amounts due from group companies(c)
Taxation and social security
£ million
£ million
31 Dec 2023
31 Dec 2022
104
245
349
142
93
235
(c)
Amounts due from group companies are mainly interest-bearing amounts
that 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.
£ million
7. Trade payables and other current liabilities
Loans from group companies(d)
Amounts owed to group companies(d)
Taxation and social security
Accruals and deferred income
£ million
£ million
31 Dec 2023
31 Dec 2022
3,000
6,402
–
26
3,000
5,807
–
25
9,428
8,832
(d)
Amounts owed 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.
8. Financial liabilities
76,062
213
–
76,275
43
–
76,318
(5)
(5)
(5)
76,313
76,270
4. Investments in subsidiaries
Cost
At 1 January 2022
Additions(a) (Restated) *
Disposals
At 31 December 2022 (Restated) *
Additions(a)
Disposals
At 31 December 2023
Impairment losses
At 1 January 2022
At 31 December 2022
At 31 December 2023
Net book value at 31 December 2023
Net book value at 31 December 2022
* Restated following adoption of IFRS 17. See note 8 for further details.
Current
(a)
The additions to investment includes an amount of £163 million for 2022 and
£43 million for 2023. Refer to note 8 for further details.
Bonds and other loans
Other financial liabilities(e) (Restated)(f)
Investments include the subsidiary company Hindustan Unilever Limited
(HUL), with a cost of £2,197 million (2022: £2,197 million). The shares of
HUL are listed on the Bombay Stock Exchange and National Stock
Exchange and have a market value of £27,980 million (2022: £28,588
million) as at 31 December 2023. 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
Total Current
Non-current
Bonds and other loans
Derivatives
Total Non-current
Total
£ million
£ million
31 Dec 2023
31 Dec 2022
250
172
422
1,585
30
1,615
2,037
–
163
163
1,832
34
1,866
2,029
Unilever Annual Report and Accounts 2023
231
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Notes to the Company Accounts Unilever PLC
The fair value of the bonds at 31 December 2023 was £1,688 million
(2022: £1,597 million).
9C. Other reserves
Other reserves relate to treasury shares, shares held in trust and others.
Analysis of bonds and other loans
£250 million 1.375% Notes 2024
£250 million 1.875% Notes 2029
£500 million 1.500% Notes 2026
€650 million 1.500% Notes 2039
£300 million 2.125% Notes 2028(g)
£ million
£ million
31 Dec 2023
31 Dec 2022
250
248
498
561
278
250
247
498
572
265
1,835
1,832
(e) Other financial liabilities:
The Company has recognised the carrying value of financial guarantee
contracts of £172 million (2022: £163 million) in the financial statements.
The maximum exposure to credit risk of these guarantees is £31,952 million
(2022: £32,631 million) which could subsequently be recognised as a liability,
representing the maximum amount the Company could have to pay if the
financial guarantees were to be called upon.
These consist of guarantees relating to:
External debt:
■ The long-term debt issued by group companies such as Unilever Finance
Netherlands B.V. and Unilever Capital Corporation, which are on a joint and
several liability basis with Unilever United States, Inc.
■ Commercial paper issued by Unilever Finance Netherlands B.V. and Unilever
Capital Corporation under the USCP programme, which are on a joint and
several liability basis with Unilever United States, Inc.
■ Commercial paper issued by Unilever Finance Netherlands B.V. under the
multi-currency ECP programme; and
■ Certain borrowings and derivatives of the other group companies.
For the above external debt, the maximum exposure amount is £22,261
million (2022: £22,811 million) and fair value of guarantees recognised is £168
million (2022: £159 million).
Pension obligations:
■ Group companies' obligations to the UK and Netherlands pension funds and
of the group captive insurance company. The maximum exposure amount is
£9,691 million (2022: £9,820 million) and fair value of guarantees recognised is
£4 million (2022: £4 million).
(f)
(g)
Previous year balance has been restated following adoption of IFRS 17. See
note (e) above for further details.
The 2.125% note includes £(21) million (2022 : £(34) million) fair value
adjustment following the fair value hedge accounting of fixed-for-floating
interest rate swaps.
Treasury shares
1 January
Change during the year:
Repurchase of shares
Cancellation of shares bought back(h)
31 December
£ million
£ million
2023
2022
(3,876)
(2,581)
(1,311)
(1,295)
4,535
–
(652)
(3,876)
During 2023, as part of a share buyback programme, Unilever PLC
repurchased 31,734,256 ordinary shares which are held as treasury
shares. Consideration paid for the repurchase including transaction
costs was £1,311 million which is recorded within other reserves.
PLC holds 16,181,572 (31 December 2022: 97,193,750) of its own ordinary
shares. These are held as treasury shares within other reserves.
(h) During the year 2023, 112,746,434 treasury shares, which were acquired for
a value of £4,535 million in 2021, 2022 and up to June 2023, were cancelled.
Shares held in trust
1 January
Change during the year:
£ million
£ million
2023
(146)
2022
(213)
Other purchases and utilisations
31 December
77
67
(69)
(146)
PLC holds 1,361,032 (2022: 2,727,097) of its own ordinary shares via the
employee share ownership trust.
9D. Retained profit
1 January
Profit for the year(i) (j)
£ million
£ million
2023
2022
24,026
24,751
4,569
2,988
Other comprehensive income for the year
Cancellation of shares bought back(k)
(3)
(4,535)
3
–
9. Capital and funding
The Company’s capital and funding strategy is described in note 15
of the consolidated financial statements.
Other movements
Dividends paid(l)
31 December
(26)
(12)
(3,777)
(3,704)
20,254
24,026
9A. Called up share capital
During the current year, the company issued 100,000 shares amounting
to £3,111 and cancelled 112,746,434 shares amounting to £4 million.
The called up share capital amounting to £78 million at 31 December
2023 (31 December 2022: £82 million) consists of 2,516,597,338 (2022:
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.
9B. Share premium account
(i)
(j)
(k)
(l)
Profit for the year includes residual central group costs amounting to £778
million which are disclosed as part of Incurred costs in the income statement.
Residual costs of £172 million for 2021 and £322 million for 2022 have been
recognised in the current year in the P&L together with £284 million costs for
the current year. Further information is included within Accounting
information and policies.
Profit for the previous year included loss on disposal of intangible assets of
£119 million paid by the Company to Unilever IP Holdings B.V. Further to the IP
Swap transactions in 2021 and in line with the swap agreement, a true-up was
carried out to settle amounts with respect to certain IP that led to an unequal
transfer of IP assets between the companies.
During the year 2023, 112,746,434 treasury shares, which were acquired for a
value of £4,535 million in 2021, 2022 and up to June 2023, were cancelled.
Further details are given in note 8 to the consolidated financial statements on
page 194.
£ million
£ million
2023
2022
9E. Profit appropriation
1 January
47,125
47,125
Change during the year:
Issuance of ordinary shares
Decrease due to share capital reduction
31 December
–
–
–
–
47,125
47,125
Profit for the year(m) (n)
Dividends(o)
To profit retained
£ million
£ million
2023
4,569
2022
2,988
(2,813)
(2,783)
1,756
205
Share premium is the excess of the consideration received over the
nominal value of the shares issued.
(m) Profit for the year includes residual central group costs amounting to £778
million which are disclosed as part of Incurred costs in the income statement.
For further details, please refer to Accounting information and policies.
Profit for the previous year included loss on disposal of intangible assets of
£119 million paid by the Company to Unilever IP Holdings B.V. Further to the IP
Swap transactions in 2021 and in line with the swap agreement, a true-up was
carried out to settle amounts with respect to certain IP that led to an unequal
transfer of IP assets between the companies.
The dividend to be paid in March 2024 (see note 15) is not included in the 2023
dividend amount.
(n)
(o)
232
Unilever Annual Report and Accounts 2023
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Notes to the Company Accounts Unilever PLC
10. Treasury risk management
The Company is exposed to market risks from its use of financial
instruments, the management of which is described in note 16B on
pages 210 to 213 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 loans and amounts due
from or owed to the group companies, and bonds that are
denominated in other currencies. The Company's exposure for holding
monetary assets and liabilities in currencies other than its functional
currency is £13 million (2022: £36 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% change in the foreign currencies against the pound sterling. 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 £1 million gain
in the income statement (2022: £4 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 interest-bearing
loans and amounts due from or owed to the group companies,
commercial papers and bonds issued which are swapped to floating
rate. Increases in benchmark interest rates would increase the interest
income and interest cost.
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.
At 31 December 2023, the Company had £300 million (2022: £300
million) of outstanding fixed-to-float interest rate swaps on which fair
value hedge accounting is applied.
The following changes in the interest rates represent management's
assessment of the possible change in interest rates at the respective
year-ends:
The following related party transactions took place during the year
with subsidiaries:
Turnover
Royalties
Services
Others
£ million
£ million
2023
2022
6
76
104
107
Dividends received
Loans and related interest
Incurred costs and royalties paid
5,598
(380)
(904)
3,237
(79)
(248)
Information on guarantees given by PLC to group companies is given in
note 12 of the Company Accounts.
12. Contingent liabilities and financial commitments
Post the implementation of IFRS 17, there are no amounts to disclose.
Please see note 8 for further details for these liabilities, commitments
and guarantees.
There are also certain financial commitments which are not included in
the total amount of financial 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 $5,200 million and €2,600 million (2022: $5,200 million and
€2,550 million) for the group companies which remain undrawn as at
31 December 2023 and 2022;
■ 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) as well as certain global and regional contracts.
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
2023 would have led to an additional £87 million of finance cost (2022:
£79 million additional finance cost).
A 1.0 percentage point decrease in floating interest rate on a full-year
basis would have an equal but opposite effect.
13. 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.
11. 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.
14. Remuneration of Directors
Information about the remuneration of Directors is given in the tables
noted as audited in the Directors' Remuneration Report on pages 116 to
153. Information on key management compensation is provided in note
4A to the consolidated financial statements on page 184.
The following related party balances existed with group companies at
31 December.
15. Post-balance sheet events
Trading and other balances due from/(to)
subsidiaries
£ million
£ million
Dividend
31 Dec 2023
31 Dec 2022
(6,298)
(5,665)
On 8 February 2024, the Directors announced a dividend of £0.3647 per
PLC ordinary share. Dividends will be paid out of retained profit. The
dividend is payable on 22 March 2024 to shareholders registered at the
close of business on 23 February 2024.
Loans due from/(to) subsidiaries
(1,442)
(1,433)
Refer to notes 5, 6 and 7 for an explanation of these balances.
Functional currency
Effective from 1 January 2024, the functional currency of Unilever PLC
('PLC'), the Group’s ultimate parent company, has changed from sterling
to euro. This follows a review and subsequent change of the internal
debt of PLC, from sterling to euro, which triggered a formal evaluation
of PLC's functional currency in line with relevant accounting standards.
The change is applied prospectively.
Unilever Annual Report and Accounts 2023
233
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Group Companies
As at 31 December 2023
In accordance with Section 409 of the Companies Act 2006, a list of subsidiaries, partnerships, associates and joint ventures as at 31 December
2023 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 244. 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 244.
See page 226 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
Value
Share
Class
Note
Name of
Undertaking
Nominal
Value
Share
Class
Note
Algeria – Zone Industrielle Hassi Ameur Oran 31000
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.
ARS1.00
ARS1.00
ARS1.00
Argentina – Martín Güemes 24 Sur, San Juan, Provincia de San Juan
Helket S.A.
ARS1.00
Argentina – Juana Manso 205, 7mo. Piso, Ciudad Autónoma de Buenos Aires
Compre Ahora S.A.
ARS1.00
Argentina – Alferez Hipolito Bouchard 4191, Munro, Provincia de Buenos Aires
Urent S.A.
Argentina – Tucumán 1, 4th floor, City of Buenos Aires
Ulands S.A.
Australia – 219 North Rocks Road, North Rocks NSW 2151
Ben & Jerry’s Franchising Australia 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 – 111-115 Chandos Street, Crows Nest, NSW 2065
Dermalogica Holdings Pty Limited
Dermalogica Pty Limited
ARS1.00
ARS1.00
AUD1.00
AUD1.00
AUD1.00
AUD1.00
AUD2.7414
AUD1.00
AUD1.00
AUD1.00
AUD1.00
AUD2.00
Australia – Level 12, 60 Castlereagh Street, Sydney, New South Wales, 2000
Paula's Choice International Australia Pty Limited
AUD0.01
Australia – PO Box H237, Australia Square, NSW 1215
Brand Evangelists for Beauty Pty Ltd ∆ (68.03)
Austria – Jakov-Lind-Straße 5, 1020 Wien
Delico Handels GmbH
Unilever Austria GmbH
EUR36,336.42
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
Belgium – Industrielaan 9, 1070 Brussels
Unilever Belgium NV/SA
No Par Value
Bolivia – Av. Blanco Galindo, Km. 10.5, Cochabamba
Unilever Andina Bolivia S.A.
BOB100.00
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 – Rua Gomes de Carvalho, 1666, conjunto 161, 16ª andar, Bairro Vila
Olimpia, São Paulo, Zip Code 04547-006
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
1
1
1
1
1
1
1
1
1
2
3
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
5
5
5
234
Unilever Annual Report and Accounts 2023
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 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 (59.50)
No Par Value
Brazil – São Paulo, Estado de São Paulo na Rua Demóstenes nº 1072, Bairro
Campo Belo CEP 04614-010
Ole Franquia Limitada
BRL1.00
5
5
5
5
1
1
Brazil – Rua Gomes de Carvalho, 1666, conjunto 161, 5ª andar, locker 5D Bairro
Vila Olimpia, São Paulo, Zip Code 04547-006
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
BGN5,000.00
Cambodia – Morgan Tower Building, Level 15, No.
15F-8A/8B/9/10/11/12/13/14/15/16/17A, Street Sopheak Mongkul, Phum 14,
Sangkat Tonle Bassac, Khan Chamkarmon, Phnom Penh
Unilever (Cambodia) Limited
KHR20,000.00
5
1
1
1
Canada – c/o Austring, Fairman & Fekete, 3081, 3rd Avenue, Whitehorse, Yukon
Territory, Y1A 4Z7
Dermalogica (Canada) Limited
No Par Value
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
No Par Value
No Par Value
No Par Value
No Par Value
6
7
7
8
9
10
11
12
Canada – McCarthy Tetrault LLP, 745 Thurlow Street, Suite 2400, Vancouver, BC,
V6E 0C5
Hourglass Cosmetics Canada Limited
No Par Value
Canada – Suite 1700, Park Place, 666 Burrard Street, Vancouver BC, V6C 2X8
Elida Beauty Canada Inc.
USD0.01
Chile – Av. Las Condes, 11.000, comuna de Viatcura, Santiago
Unilever Chile Limitada
1
7
13
China – Room 1001, No. 398, Caoxi Road (N), Xuhui District, Shanghai,
200030
Blueair (Shanghai) Sales Co. Limited
CNY1.00
1
China – 1st Floor, No. 78 Binhai 2nd Road, Hangzhou Bay, New District, Ningbo
City, Zhejiang Province
Ningbo Hengjing Inspection Technology Co.,
Limited (67.71)
CNY1.00
1
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Group Companies
Name of
Undertaking
Nominal
Value
Share
Class
Note
Name of
Undertaking
Nominal
Value
Share
Class
Note
China – No. 78, Road II of Seaside Avenue, Cixi Economic and Technical
Development Zone, (Hangzhou Bay New Zone), Ningbo
UNILEVER RETAIL ČR, spol. s r.o. v likvidaci (in
liquidation)
CZK100,000.00
Qinyuan Group Co. Limited (67.71)
CNY1.00
China – Room 744, 9F, No. 583 Lingling Road, Xuhui District, Shanghai, 200030
Shanghai Qinyuan Environment Protection
Technology Co. Limited (67.71)
CNY1.00
China – No.33 North Fuquan Road, Changning District, Shanghai, 200335
Unilever (China) Investing Company
USD1.00
China – 88 Jinxiu Avenue, Hefei Economic and Technology Development Zone,
Anhui, 230601
Unilever (China) Limited
Unilever Services (Hefei) Co. Ltd.
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, Lihua 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
Wall`s (China) Co. Limited
USD1.00
China – No. 358, Xingci 1 Road, Hangzhou Bay, New District, Ningbo, 315336
Zhejiang Qinyuan Water Treatment Technology
Co. Limited (67.71)
CNY1.00
China – Room 326, 3rd Floor, Xinmao Building, 2 South Taizhong Road,
(Shanghai) Pilot Free Trade Zone
Uchieve Commerce (Shanghai) Co., Ltd.
CNY1.00
China – Floor 1, Building 2, No. 33, North Fuquan Road, Changning District,
Shanghai, 200335
Shanghai CarverKorea Limited
USD1.00
China- 2F, No. 10, Lane 255, Xiaotang Road, Fengxian District, Shanghai
Paula's Choice (Shanghai) Trading Co. Limited
CNY10,000,000
CNY10,000,000
China- Room 1436, No.1256 and 1258, Wanrong Road, Jingan District,
Shanghai
Paula's Choice (Shanghai) Technology Co. Limited
CNY1.00
China- Zibian 2105, No.63, Mingzhu Avenue (North), Conghua District,
Guangzhou City
Unilever (Guangzhou) Co. Limited
China – Room 407, No 1256&1258 Wan Rong Road, Shanghai
UPD China Limited
CNY1.00
CNY1.00
Colombia – Avenida Carrera 45, 108-27 Torre 3 Piso, 5Y 6 Bogotá D.C.
Unilever Andina Colombia Limitada
ULeX Colombia S.A.S.
COP100.00
COP100.00
1
1
1
1
1
1
1
1
1
1
1
1
8
9
1
1
1
1
1
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
Côte d'Ivoire – 01 BP 1751 Abidjan 01, Boulevard de Vridi
Unilever-Côte d'Ivoire (99.33)
XOF2,650.00
1
1
1
Côte 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
Croatia – Strojarska cesta 20, 10000 Zagreb
Unilever Hrvatska d.o.o.
HRK1.00
Cuba – Zona Especial de Desarrollo Mariel, Provincia Artemisa
1
1
Unilever Suchel, S.A. (60)
USD1,000.00
56
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.
CZK210,000.00
1
1
1
1
1
1
1
1
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
USD200.00
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)
Unilever Egypt for Shared Consultations Services
Egypt – Public Free Zone, Alexandria
EGP10.00
EGP10.00
Unilever Mashreq International Company
USD1,000.00
Egypt – 14 May Bridge, Sidi Gaber, Smouha – Alexandria
Unilever Mashreq Trading LLC (in liquidation)
Commercial United for Import and Export LLC
EGP1000.00
EGP1000.00
Egypt – 15 Sphinx Square, El-Mohandsin, Giza
Unilever Mashreq for Import and Export LLC
EGP100.00
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
1
1
5
5
1
1
1
1
England and Wales – Unilever House, 100 Victoria Embankment, London, EC4Y
0DY
Accantia Group Holdings (unlimited company)
Alberto-Culver (Europe) Limited
Alberto-Culver Group Limited
Alberto-Culver UK Holdings Limited
Alberto-Culver UK Products Limited
Associated Enterprises Limited°
CPC (UK) Pension Trust Limited
GroNext Technologies Limited
Hourglass Cosmetics UK Limited
Margarine Union (1930) Limited°
MBUK Trading Limited
Mixhold Investments Limited
ND4A Limited
TIGI Holdings Limited
Toni & Guy Products Limited°
UAC International Limited
UML Limited
Unidis Forty Nine Limited
Unilever AC Limited
Unilever Assam Estates 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 Group Limited°
Unilever South India Estates Limited°
GBP0.01
GBP1.00
GBP1.00
GBP1.00
GBP1.00
GBP5.00
GBP1.00
GBP1.00
GBP1.00
GBP1.00
GBP1.00
GBP1.00
GBP1.00
GBP1.00
GBP1.00
GBP1.00
GBP1.00
GBP0.001
GBP1.00
GBP1.00
GBP1.00
GBP1.00
GBP1.00
GBP1.00
GBP1.00
GBP1.00
GBP1.00
GBP0.25
GBP1.00
GBP1.00
1
1
1
1
1
14
1
16
1
1
1
18
68
69
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
15
Unilever Annual Report and Accounts 2023
235
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
England-Wales- C/O Bdo Llp 5 Temple Square, Temple Street, Liverpool, L2 5RH
Tigi Services France S.A.S. (99.99)
Group Companies
Name of
Undertaking
Unilever S.K. Holdings 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°
Nominal
Value
GBP1.00
GBP1.00
GBP1.00
GBP1.00
GBP1.00
GBP1.00
GBP1.00
GBP10.00
GBP1.00
GBP1.00
GBP1.00
GBP1.00
GBP1.00
Share
Class
Note
1
1
1
1
1
2
3
24
2
3
21
1
1
BBG Investments (France) Limited (in liquidation)
GBP1.00
Unilever Australia Investments Limited (in
liquidation)
Unilever Australia Partnership Limited (in
liquidation)
Unilever Australia Services Limited (in liquidation)
Unilever Innovations Limited (in liquidation)
GBP1.00
GBP1.00
GBP1.00
GBP0.10
1
1
1
1
1
England and Wales – The Manser Building, Thorncroft Manor, Thorncroft Drive,
Dorking Road, Leatherhead, Surrey, 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
GBP0.01
GBP1.00
1
4
4
1
1
1
England and Wales – 3 St James Road, Kingston Upon Thames, Surrey, KT1 2BA
Alberto-Culver Company (U.K.) Limited
Nature Delivered Limited
Marshfield Bakery Limited
TIGI International Limited
Unilever Pension Trust Limited
Unilever UK Limited
Unilever UK Pension Fund Trustees Limited
USF Nominees Limited
England and Wales – 1 More Place, London, SE1 2AF
Accantia Health and Beauty Limited (in
liquidation)
Unilever Bestfoods UK Limited (in liquidation)
GBP1.00
GBP0.001
GBP0.001
GBP0.001
GBP0.01
GBP1.00
GBP1.00
GBP1.00
GBP1.00
GBP1.00
GBP0.25
GBP1.00
1
1
79
84
1
1
1
1
1
1
1
1
Name of
Undertaking
(82.92)
Nominal
Value
Share
Class
Note
GBP1.00
63
Estonia – Harju maakond, Tallinn, Haabersti linnaosa, Paldiski mnt 96, 13522
Unilever Eesti Aktsiaselts
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)
Fralib Sourcing Unit S.A.S. (99.99)
Saphir 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)
Unilever Retail Operations France (99.99)
No Par Value
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
Germany – Neue Burg 1, 20457 Hamburg
DU Gesellschaft für Arbeitnehmerüberlassung
mbH (99.99)
Unilever Deutschland GmbH
Unilever Deutschland Holding GmbH
Unilever Deutschland Produktions GmbH & Co.
OHG
Unilever Deutschland Produktions Verwaltungs
GmbH
Unilever Deutschland Supply Chain Services
GmbH
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
4
1
1
1
4
1
1
1
1
1
1
1
1
1
EUR16.82
EUR1000.00
No Par Value
No Par Value
No Par Value
EUR1.00
No Par Value
No Par Value
No Par Value
EUR1.00
EUR1.00
EUR62.50
EUR1.00
EUR25,000.00
EUR28,340.00
EUR2.00
DEM50,000.00
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
EUR179,000.00
EUR51,150.00
EUR1.00
EUR138,150.00
EUR63,920.00
EUR100,000.00
EUR100.00
EUR24,900.00
EUR25,600.00
EUR1.00
EUR1.00
England and Wales –C/O Tmf Group, 13th Floor, One Angel Court, London, EC2R
7HJ
T2 Germany GmbH
Twenty Nine Capital Partners (General Partner)
Limited
Unilever Ventures Limited
Unilever Ventures General Partner Limited
GBP1.00
GBP1.00
GBP1.00
England and Wales – Port Sunlight, Wirral, Merseyside, CH62 4ZD
Unilever Global IP Limited°
GBP1.00
1
1
1
1
England and Wales – Suite 1, 7th Floor 50 Broadway, London, United Kingdom,
SW1H 0BL
Schafft GmbH
Germany – Langnesestraße 1, 64646 Heppenheim
Maizena Grundstücksverwaltung Gesellschaft mit
beschränkter Haftung & Co. offene
Handelsgesellschaft
Rizofoor Gesellschaft mit beschränkter Haftung
EUR15,350.00
Paula`s Choice UK Limited
GBP1.00
1
Germany – Rotebühlplatz 21, 70178 Stuttgart
England and Wales – 3rd Floor, 1 Ashley Road, Altrincham, Cheshire, WA14 2DT
TIGI Eurologistic GmbH
Brand Evangelists for Beauty Limited∆ (80.30)
(100)
(100)
(66.47)
GBP1.00
GBP1.00
GBP1.00
GBP1.00
2
58
86
71
TIGI Haircare GmbH
Germany – Wiesenstr. 21, 40549 Düsseldorf
Murad GmbH
Ren GmbH
236
Unilever Annual Report and Accounts 2023
1
1
1
1
1
1
1
1
1
1
35
79
17
25
1
1
1
30
1
31
ILS0.001
ILS0.0001
ILS0.10
ILS0.10
ILS0.10
ILS0.0002
ILS1.00
ILS0.0001
ILS1.00
ILS1.00
ILS1.00
ILS1.00
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Group Companies
Name of
Undertaking
Nominal
Value
Share
Class
Note
Name of
Undertaking
Germany – Zehdenicker Str. 110119, Berlin
PT Gerai Cepat Untung (88.19)
Nominal
Value
IDR100,000.00
Share
Class
Note
Paula’s Choice Germany GmbH
Ghana – Swanmill, Kwame Nkrumah Avenue, Accra
Millers Swanzy (Ghana) Limited (74.50)
GHC1.00
Ghana – Plot No. Ind/A/3A-4, Heavy Industrial Area, Tema, PO Box 721, Tema
Unilever Ghana PLC (74.50)
GHC0.0192
Greece – Kymis ave & 10, Seneka str. GR-145 64 Kifissia
Elais Unilever Hellas SA
Unilever Knorr SA
Unilever Logistics SA
EUR10.00
EUR10.00
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.
GT60.00
Haiti – 115, Rue Panamericaine, Estabissement Número 1, Petion Ville
Les Condiments Alimentaires, S.A. (61)
HTG1000.00
4
1
1
1
1
1
1
1
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 33rd Street, Zagros Street, Argentina Square, Tehran
Unilever Iran (Private Joint Stock Company) (99.99)
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
EUR1.26
EUR1.26
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
Honduras – Anillo Periférico 600 metros después de la colonia, Residencial, Las
Uvas contigua acceso de residencial Roble Oeste, Tegucigalpa M.D.C.
Israel – 52 Julius Simon Street, Haifa, 3296279
Bestfoods TAMI Holdings Ltd
Unilever de Centroamerica S.A.
HNL10.00
1
Israel Vegetable Oil Company Ltd
Hong Kong – Suite 1106-8, 11/F, Tai Yau Building, 181 Johnston Road, Wanchai
Unilever Israel Foods Ltd
Blueair Asia Limited
HKD0.10
Hong Kong – 6 Dai Fu Street, Tai Po Industrial Estate
Unilever Hong Kong Limited
Hong Kong-Suite 907, 9/F, Silvercord Tower 2, 30 Canton Road, Tsim Sha Tsui,
Kowloon
No Par Value
Hourglass Cosmetics Hong Kong Limited
HKD1.00
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
Hong Kong – Unit B, 17/F, United Centre, 95 Queensway, Admiralty
Paula's Choice Hong Kong Limited
HKD1.00
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
400099
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
INR10.00
INR1.00
INR10.00
INR10.00
INR10.00
INR10.00
INR1.00
INR1.00
INR10.00
INR10.00
INR1.00
Blueair 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
1
1
1
7
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
Unilever Israel Home and Personal Care Limited
Unilever Israel Marketing Ltd
Unilever Shefa Israel Ltd
Israel – Haharoshet 1, PO Box 2288, Akko, 2451704
Glidat Strauss Limited
Italy – Piazza Paleocapa 1/D, 10100, Torino
Gromart S.R.L.
EUR1,815,800.00
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.
Italy – Via Plava, 74 10135 Torino
Equilibra S.R.L. (75)
Armores Srl (75)
Syrio Srl (75)
EUR600,000.00
EUR10,000,000.00
EUR25,000,000.00
EUR1,000.00
EUR1.00
EUR1.00
EUR100,000
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.
Rafra Japan K.K.
JPY10,000,000.00
JPY100,000,001.00
JPY50,000,000.00
JPY20,000,000.00
Japan – Ark Hills Sengokuyama Mori Tower 28F, 1-9-10 Roppongi, Minato-ku,
Tokyo
UPD Japan K.K.
JPY 50,000.00
Jersey – 13 Castle Street, St Helier, Jersey, JE4 5UT
Unilever Chile Investments Limited
GBP1.00
1
1
1
1
1
1
1
1
1
1
1
1
1
1
7
1
1
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
1
1
1
Jordan – Ground floor- Office No.1, GH24 Building, Business Park, Development
Zone, Amman
Unilever Jordan for Marketing Services
JOD1000.00
Kazakhstan – Raimbek, Avenue 160 A, Office 401, Almaty
Unilever Kazakhstan LLP
1
4
Kenya – Commercial Street, Industrial Area, PO Box 30062-00100, Nairobi
Unilever Annual Report and Accounts 2023
237
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Group Companies
Name of
Undertaking
Unilever Kenya Limited°
Nominal
Value
KES20.00
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 – #1-313 #1-314, 48, Achasan-ro 17-gil, Seongdong-gu, Seoul
Paula's Choice Korea, Limited
KRW1.00
Share
Class
Note
1
1
7
1
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, Dolphin Building, 3rd Floor, 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
EUR3,620.25
Malawi – Room 33, Gateway Mall, Area 47, Lilongwe Malawi
Unilever South East Africa (Private) Limited
MWK2.00
Malaysia – Suite 2-1, Level 2, Vertical Corporate Tower B, Avenue 10, The
Vertical, Bangsar South City, No. 8, Jalan Kerinchi, 59200 Kuala Lumpur,
Wilayah Persekutuan
Paula's Choice Malaysia SEA Sdn. Bhd.
Unilever (Malaysia) Holdings Sdn. Bhd.
Unilever (Malaysia) Services Sdn. Bhd.
No Par Value
No Par Value
No Par Value
1
1
1
1
1
1
1
1
1
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.
Unilever Real Estate Mexico S.de R.L. de C.V.
4
4
4
4
Mexico – Fraccionamiento Parque Industrial Nexictoxus ADN2, Salinas Victoria,
Nuevo Leon, 65559
Unilever NA Sourcing West 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 – Plot No (40,41,47), Min Thate Hti Kyaw Swar Road, 39 Ward, Shwe
Pyi Thar Industrial Zone (2), Shwe Pyi Thar Township, Yangon Region, 11411
Unilever (Myanmar) Limited
Unilever (Myanmar) Services Limited
MMK11,129,679,6
00.00
MMK2,000,000.00
Myanmar – Lot No. 31, Bamaw Ahtwin Wun Street, Hlaing Thar Yar Industrial
Zone 3, Hlaing Thar Yar Township, Yangon, 11401.
Unilever EAC Myanmar Company Limited (60)
Nepal –Hetauda-3, Basamadi Makawnapur
MMK500,000,000,
000. 00
Unilever Nepal Limited (49.52)
NPR100.00
Netherlands – Weena 455, 3013 AL Rotterdam
Alberto-Culver Netherlands B.V.
Argentina Investments B.V.
BFO Holdings B.V.
Brazinvest B.V.
Chico-invest B.V.
Doma B.V.
Handelmaatschappij Noorda B.V.
Hourglass Cosmetics Europe B.V.
Unilever Foods & Refreshments Global B.V.
Itaho B.V.
Lipoma B.V.
EUR1.00
EUR1.00
EUR454.00
EUR1.00
EUR1.00
EUR455.00
NLG1,000.00
NLG1,000.00
EUR1.00
EUR453.78
EUR1.00
NLG1,000.00
4
1
1
1
1
1
1
1
2
3
1
1
1
1
1
1
1
1
1
1
238
Unilever Annual Report and Accounts 2023
Name of
Undertaking
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 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 IP Holdings B.V.
Unilever Indonesia Holding B.V.
Unilever Insurances N.V.
Unilever International Holdings B.V.°
Unilever Netherlands Retail Operations B.V.
Unilever Nederland Holdings B.V.
Unilever Nederland Services B.V.
Unilever PL Netherlands B.V.
Unilever Turkey Holdings B.V.
Unilever US Investments B.V.°
Unilever Ventures Holdings B.V.
Univest Company B.V.
UNUS Holding B.V.
Verenigde Zeepfabrieken B.V.
Wemado B.V.
Netherlands – Hofplein 19 3032 AC Rotterdam
Unilever Nederland B.V.
Netherlands – Valkweg 2 7447JL Hellendoorn
Ben en Jerry’s Hellendoorn B.V.
Netherlands – Markhek 5, 4824 AV Breda
De Korte Weg B.V.
Nominal
Value
EUR1.00
EUR1.00
EUR1.00
EUR1.00
EUR1.00
EUR1.00
NLG1,000.00
NLG1,000.00
EUR1.00
EUR1.00
NLG100.00
NLG1,000.00
NLG1,000.00
EUR454.00
NLG1,000.00
NLG1,000.00
NLG1,000.00
NLG1,000.00
EUR1.00
EUR1.00
EUR1.00
EUR1.00
EUR1,800.00
NLG1,000.00
EUR1.00
EUR454.00
EUR1.00
EUR1.00
EUR1.00
EUR1.00
EUR454.00
EUR1.00
EUR1.00
EUR454.00
EUR1.00
EUR1.00
EUR454.00
EUR460.00
EUR1.00
EUR1.00
EUR1.00
EUR453.79
EUR1.00
EUR0.10
EUR0.10
Non-voting†
NLG1,000.00
NLG1,000.00
EUR454.00
EUR453.78
EUR1.00
EUR1.00
Non-voting†
Netherlands – Bronland 14, 6708 WH Wageningen
Unilever Innovation Centre Wageningen B.V.
EUR460.00
Netherlands – Grote Koppel 7, 3813 AA Amersfoort
Paula's Choice Europe B.V.
EUR1.00
Share
Class
Note
1
1
1
2
3
26
1
27
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
2
3
1
1
1
1
1
26
1
1
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Group Companies
Name of
Undertaking
Nominal
Value
Share
Class
Note
Name of
Undertaking
Netherlands – Unilever House, 100 Victoria Embankment, London, EC4Y 0DY
(Registered Seat: Rotterdam)
Unilever Overseas Holdings B.V.
NLG1,000.00
New Zealand – Level 4, 103 Carlton Gore Rd, Newmarket, Auckland 1023
Ben & Jerry’s Franchising New Zealand Limited
No Par Value
Unilever New Zealand Limited
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)
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
1
1
1
1
1
1
1
1
1
1
(71.78)
PKR100.00
14
Delivery Hub (Private) Limited (64.13) (in
liquidation)
PKR10.00
Palestine – Ersal St. Awad Center, PO Box 3801, Al-Beireh, Ramallah
Unilever Market Development Company (in
liquidation)
Palestine – Jamil Center, Al-Beireh, Ramallah
JOD1.00
Unilever Agencies Limited (99) (in liquidation)
JOD1.00
1
1
1
Panama –PH Dream Plaza, piso 10 y 13, Provincia de Panamá, corregimiento de
Parque Lefevre, Costa del Este
Unilever Regional Services Panama S.A.
USD1.00
Panama – Santa María Business District, Torre Argos, Piso 6, Distrito de Juan
Diaz, 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. 402, Miraflores, Lima 18
Unilever Andina Perú S.A.
PEN1.00
1
1
1
1
Nominal
Value
ROL260.50
RON10.00
RON10.00
Share
Class
Note
1
1
1
Unilever South Central Europe S.A.
Romania – 121 Cernăuţi Street, Suceava 720089
Betty Ice SRL
Romania – Bvd. Republicii 291 camera 15 corp C6
Betty Ice Distributie SRL
Romania – 9-9A Dimitrie Pompei Blvd, Iride Business Park Buildings 5 and 6, 2nd
District, Bucuresti
Good People SA (75)
RON10.00
1
Russia – 644031, 205, 10 let Oktyabrya, Omsk
Inmarko-Trade LLC
RUB
1,000,000.00
Russia – 123022, Floor 7, Premise 19, Room 36, 13, Sergeya Makeeva Street,
Moscow
Unilever Rus LLC
RUB
28,847,390, 269.19
13
13
Russia – Tula region, Leninsky district, Ilyinskoye rural settlement, Varvarovka
village, Varvarovsky pass, Building 15-F, Room 406, Floor 3
Gourmand LLC
RUB10,000.00
4
Russia – St. Petersburg, 1 Progonnaya St., Building 1, Literature A, Room 2-H,
Floor 1, Office 114
Resheniya dlia Budushego LLC
RUB10,000.00
13
Rwanda – Sanlam Towers, PO Box 973, Kigali
Unilever Rwanda Limited
Saudi Arabia – PO Box 5694, Jeddah 21432
Binzagr Unilever LimitedX (49)
RWF 1,000
SAR1,000.00
Scotland – c/o Brodies LLP, Capital Square 58 Morrison Street, Edinburgh, EH3
8BP
Twenty Nine Capital Partners (SLP) Limited
Partnership∞
Unilever Ventures (SLP) General Partner Limited
GBP1.00
Unilever Ventures III (SLP) Limited Partnership∞
(14.098)
Serbia – Belgrade, Serbia, Omladinskih brigada 90b – Novi Beograd
1
1
4
1
4
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.
No Par Value
No Par Value
SGD1.00
No Par Value
Philippines – Linares Road, Gateway Business Park, General Trias, Cavite
Singapore – 201 Henderson Road, #07-25, Apex @ Henderson, 159545
Metrolab Industries, Inc.
PHP1.00
PHP10.00
7
22
Paula's Choice Singapore, SEA Pte. Ltd.
Slovakia – Karadzicova 10, 821 08 Bratislava
Philippines – 7th Floor, Bonifacio Stopover Corporate Center, 31st Street corner
2nd Avenue, Bonifacio Global City, Taguig City
Unilever Slovensko, spol. s. r.o.
SGD1.00
EUR1.00
Unilever Global Services, Inc.
Unilever Philippines, Inc.
PHP10.00
PHP50.00
Philippines – 11th Avenue, Corner 39th Street, Bonifacio Triangle, Bonifacio
Global City, Taguig City, Manila
Universal Philippines Body Care, Inc.
PHP100.00
Philippines – Manggahan Light Industrial Park, A. Rodriguez Avenue, Bo.
Manggahan, Pasig City
7
7
7
Unilever RFM Ice Cream, Inc. (50)
PHP1.00
PHP1.00
29
103
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.
PHP1.00
PLN50.00
PLN50.00
PLN10.00
Puerto Rico – Professional Services Park 997, San Roberto St., Suite 7, San Juan
Unilever de Puerto Rico, Inc°
USD100.00
Qatar – Almana & Partners WLL Building, Area No. 43, Al Mamoura, PO BOX 49
Unilever Qatar LLC
QAR1,000.00
Romania – Ploiesti, 291 Republicii Avenue, Prahova County
Unilever Romania S.A. (99.93)
ROL0.10
7
1
1
1
1
1
1
South Africa – 15 Nollsworth Crescent, Nollsworth Park, La Lucia Ridge Office
Estate, La Lucia, 4051
Unilever Market Development (Pty) Limited
Unilever South Africa (Pty) Limited
Unilever South Africa Holdings (Pty) Limited
ZAR1.00
ZAR2.00
ZAR1.00
ZAR1.00
ZAR1.00
South Africa – 4 Merchant Place, CNR Fredman Drive and Rivonia Road
Sandton, 2196
Aconcagua 14 Investments (RF) (Pty) Limited
ZAR1.00
South Africa – Oakhurst Office Park, 11-13 St Andrews Road, Parktown,
Johannesburg 2193
Dermalogica South Africa (Pty) Limited (60)
No Par Value
Spain – C/ Tecnología 19, 08840 Viladecans
Unilever Espana S.A.
EUR48.00
Spain – C/ Felipe del Río, 14 – 48940 Leioa
Unilever Foods Industrial Espana, S.L.U.
EUR600.00
Sri Lanka – 258 M Vincent Perera Mawatha, Colombo 14
Unilever Merchandising Private Limited
Ceytea (Private) Limited
Lever Brothers (Exports and Marketing) (Private)
Limited°
Maddema Trading Company (Private) Limited
No Par Value
No Par Value
No Par Value
No Par Value
Unilever Annual Report and Accounts 2023
239
13
1
1
1
1
1
1
1
1
1
2
3
1
1
1
1
1
1
1
1
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Group Companies
Name of
Undertaking
Premium Exports Ceylon (Private) Limited
R.O. Mennell & Co. (Ceylon) (Private) Limited
Unilever Ceylon Services (Private) Limited
Unilever Lanka Consumer Limited
Unilever Sri Lanka Limited°
Nominal
Value
No Par Value
No Par Value
No Par Value
No Par Value
No Par Value
Sudan – Property no. 125, block 2, Industrial Area, Kafuri District, Bahri, Kafori
Unilever Sudanese Investment Company
SDG10,000.00
Sweden – Box 1056, Svetsarvägen 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
SEK100.00
SEK100.00
SEK50.00
SEK100.00
SEK100.00
SEK1000.00
Nature Delivered Sweden AB
SEK1.00
Switzerland – Bahnhofstrasse 19, CH 8240 Thayngen
Knorr-Nährmittel Aktiengesellschaft
Unilever Schweiz GmbH
CHF1,000.00
CHF100,000.00
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
CHF1,000.00
CHF1,000.00
CHF1,000.00
CHF1,000.00
CHF1,000.00
CHF1,000.00
CHF1,000.00
CHF1,000.00
Switzerland – Hinterbergstr. 30, CH-6312 Steinhausen
Oswald Nahrungsmittel GmbH
CHF800,000.00
Taiwan – 15F, No. 39, Sec. 2, Dunhua S. Road, Da’an District, Taipei City
Unilever Taiwan Limited (99.92)
TWD10.00
Taiwan – 8 F-1 & 8F-2, No. 186, Sec. 1, Zhangmei Rd., Changhua City, Changhua
County 50062, Taiwan (R.O.C.)
Paula's Choice Taiwan Co., Limited
NTD27.000
Tanzania – Plot No. 4A, Nyerere Road, Dar Es Salaam, PO Box 40383
Unilever Tanzania Limited
Thailand – 161 Rama 9 Road, Huay Kwang, Bangkok 10310
Unilever Thai Holdings Limited
Unilever Thai Trading Limited
TZS20.00
THB100.00
THB100.00
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
Share
Class
Note
Name of
Undertaking
Nominal
Value
Share
Class
Note
Uganda – DFCU Towers, 5th Floor, Plot 26 Kyadondo Road, Industrial Area, PO
Box 3515, Kampala
Unilever Uganda Limited
UGX20.00
1
Ukraine – 04119, 27-T, Letter A, Dehtyarivska Str., Kyiv
Unilever Ukraine LLC
United Arab Emirates – PO Box 17053, Jebel Ali, Dubai
Severn Gulf FZCOX (50)
Unilever Gulf FZE
AED100,000.00
AED1,000,000.00
UAH
1,151,329,851
13
United Arab Emirates – Office No. 901 owned by Easa Saleh AlGurg LLC- Deira-
Riqqa AlBateeen
Unilever Binzagr Gulf General Trading LLCX (50)
AED1,000.00
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 States – 700 Sylvan Avenue, Englewood Cliffs, New Jersey 07632-3201
Alberto-Culver Company
Alberto-Culver International, Inc.
Alberto-Culver USA, Inc.
BC Cadence Holdings, Inc.
Ben & Jerry’s Gift Card, LLC
Conopco, Inc.
Kate Somerville Holdings, LLC
Kate Somerville Skincare LLC
Kensington & Sons, LLC
Kirei Intermediate Holdings, LLC
Living Proof, Inc.
Pantresse, Inc.
Skin Health Experts, LLC
St. Ives Laboratories, Inc.
The Laundress, LLC
TIGI Linea Corp
No Par Value
USD1.00
No Par Value
USD0.01
USD1.00
No Par Value
USD0.01
USD120.00
USD0.01
No Par Value
Unilever Bestfoods (Holdings) LLC
Unilever Capital Corporation
USD1.00
Unilever North America Supply Chain Company,
LLC
Unilever United States, Inc.
Unilever Ventures Advisory LLC
US Health & Wellbeing LLC
Yasso, Inc.
USD0.3333
USD73.50
No Par Value
USD0.01
Thailand – 12 A Floor Unit B1-B2, Office No. 1225, 989 Siam Piwat Tower, Rama I
Road, Pathumwan Sub-district, Pathumwan District, Bangkok 10330
United States – 1535 Beachey Pl Carson, CA 90746
Dermalogica, LLC
UPD (Thailand) Co. Limited
THB100.00
1
United States – 2121 Park Place, First Floor El Segundo, CA 90245
Thailand– 21/39 Soi Lardprao 15, Jompol Sub-district, Jatujak District, Bangkok
Murad LLC
Gronext Technologies (Thailand) 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. (99.78)
Unilever Maghreb Export S.A. (99.76)
Tunisia – Z.I. Voie Z4, Megrine Riadh, Tunis, 2014
UTIC Distribution S.A. (99.78)
TTD1.00
TND6.00
TND5.00
TND10.00
1
1
1
1
1
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
TRY0.01
1
1
United States – 1090 King Georges Post Road, Suite 505 Edison, NJ 08837
REN USA Inc.
United States – 125 S Clark, Suite 2000, Chicago, IL 60603
Blueair Inc.
No Par Value
No Par Value
United States – 2816 S. Kilbourne Avenue, Chicago IL 60624
Unilever Illinois Manufacturing, LLC
United States – 2900 W. Truman Boulevard, Jefferson City, MO 65109
Unilever Manufacturing (US), Inc.
No Par Value
United States – 40 Merritt Boulevard, Trumbull, CT 06611
Unilever Trumbull Holdings, Inc.
Unilever Trumbull Research Services, Inc.
USD1.00
USD1.00
United States – 60 Lake Street, Suite 3N, Burlington, VT 05401
Besan Besin Sanayi ve Ticaret AŞ (99.99)
Unilever Hizli Tuketim Urunleri Satis Pazarlama ve
Ticaret Anonim Sirketi (99.99)
TRY0.01
TRY1.00
1
1
Seventh Generation Canada, Inc.
Seventh Generation, Inc.
No Par Value
USD0.001
United States – 2711 Centerville Road, Suite 400, Wilmington, DE 19808
240
Unilever Annual Report and Accounts 2023
1
1
1
1
1
1
1
1
1
13
7
13
13
13
13
7
1
13
1
13
1
13
1
13
7
22
13
13
7
13
13
7
1
13
7
7
1
7
7
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Group Companies
Name of
Undertaking
Paula's Choice, Inc.
Nominal
Value
USD0.001
United States – 705 5th Avenue South, Suite 200, Seattle, WA 98104
Paula's Choice, LLC
United States – CTC 1209 Orange Street Wilmington, DE19801
Nirvana Holdco LLC (80)
Nirvana Intermediate LLC (80)
Nutraceutical Wellness, Inc. (80)
The Uncovery, LLC
Yasso Holdings, Inc.
United States – 3770-1/2 Selby Avenue, Los Angeles, CA 90034
Kingdom Animalia, LLC
United States – 11 Ranick Drive South, Amityville, NY 11701
Sundial Brands, LLC
Madam C.J. Walker Enterprises, LLC
Nyakio, LLC
United States – 415 Jackson St., Floor 2, San Francisco, CA 94111
Olly Public Benefit Corporation
USD0.00001
United States – 208 Utah Street, Suite 300, San Francisco, CA, 94103
Tatcha, LLC
United States – 777 S Aviation Blvd, El Segundo, CA 90245
The LIV Group, Inc.
No Par Value
13
United States – 4056 Del Rey Avenue, Marina Del Rey, CA 90292
SmartyPants, Inc.
USD0.00001
United States – 1169 Gorgas Avenue, Suite A, San Francisco, CA 94129
Welly Health PBC (51)
USD0.00001
7
7
Share
Class
Note
Name of
Undertaking
Nominal
Value
Share
Class
Note
7
13
7
7
7
13
7
13
13
13
13
7
4
Canada – 100 King Street West, 1 First Canadian Place, Suite 1600, Toronto ON
M5X 1G5
UPD Canada Inc.
No Par Value
Egypt – Borg El-Arab, Alexandria
Fine Foods Egypt SAE (in liquidation)
Egypt – Shooting Club, Dokki, Giza
United Beverages (in liquidation)
England and Wales – 1 More London Place, London, SE1 2AF
Unidis Twenty Six Limited (in liquidation)
Unidis Sixty Four Limited (in liquidation)
Lever Brothers Port Sunlight Limited (in
liquidation)
EGP10.00
EGP10.00
GBP1.00
GBP1.00
GBP1.00
England-Wales – C/O Bdo Llp 5 Temple Square, Temple Street, Liverpool, L2
5RH
TIGI Limited (in liquidation)
GBP1.00
7
1
1
1
1
1
1
England and Wales – Unilever House, 100 Victoria Embankment, London, EC4Y
0DY
Elida Beauty Limited
France – 20, rue des Deux Gares, 92500, Rueil-Malmaison
Elida Beauty France S.A.S. (99.99)
GBP1.00
EUR1.00
Ghana – Plot No. Ind/A/3A-4, Heavy Industrial Area, Tema, PO Box 721, Tema
Unilever Oleo Ghana Limited
Unilever Ghana Investments Limited (74.50)
GHC2.250
GHC10.00
1
1
1
1
Haiti – Port-au-Prince
Unilever Haiti S.A.
HTG500,000
56
India – Unilever House, B. D. Sawant Marg, Chakala, Andheri (E), Mumbai 400
099
USD0.00001
22
Hindustan Unilever Foundation (61.90)
INR10.00
1
United States – 30 Community Drive, South Burlington, Vermont 05403
Ben & Jerry’s Franchising, Inc.
Ben & Jerry’s Homemade, Inc.
USD1.00
USD1.00
United States – 1675 South Street, Suite B, City of Dover, DE 19901
Onnit Labs, Inc.
USD0.0001
7
7
7
United States – 8 The Green STE R, City of Dover, Kent County, Delaware, 19901
Brand Evangelists for Beauty Inc.∆ (68.03)
USD 0.01
23
United States – c/o The Corporation Trust Company, Trust Center, 1209 Orange
Street, Wilmington, Delaware, 19801, New Castle County
Cocotier, Inc.
Uruguay – Camino Carrasco 5975, Montevideo
Unilever Uruguay SCC S.A.
Uruguay – Luis Bonavita 1294, Montevideo
Unilever America Latina S.A.
USD0.001
UYU1.00
UYU1.00
7
1
1
Venezuela – Torre BOD, Piso 15, La Castellana, Caracas, Bolivarian Republic of
Venezuela
Ireland – Unit 50, The Swan Shopping Centre, Rathmines Road Lower, Dublin 6,
D06 V9K5
Demalogica (Skin Care) Ireland Limited
EUR1.00
1
Jamaica – White Marl Street, Spanish Town, PO Box 809, Parish Saint Catherine
Unilever Jamaica Limited
Kenya – Commercial Street, PO Box 40592-00100, Nairobi
Union East African Trust Limited
JMD1.00
KES20.00
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
United States – CTC 1209 Orange Street, Wilmington, DE19801
Elida Beauty US Corp
Elida Beauty US (IP) LLC
USD1.00
United States – 700 Sylvan Avenue, Englewood Cliffs, New Jersey 07632-3201
Unilever AC Canada Holding, Inc.
USD10.00
Unilever United States Foundation, Inc.
Unilever Andina Venezuela S.A.
Bs0.000001
1
Alberto-Culver (P.R.), Inc. (in liquidation)
No Par Value
Vietnam – Lot A2-3, Tay Bac Cu Chi Industry Zone, Tan An Hoi Ward, Cu Chi
District, Ho Chi Minh City
Chesebrough-Pond’s Manufacturing Company (in
liquidation)
No Par Value
Unilever Vietnam International Company Limited
VND863,104,820,0
00.00
13
ASSOCIATED UNDERTAKINGS
Vietnam – No.156, Nguyen Luong Bang Street, Tan Phu Ward, District 7, Ho Chi
Minh City
Unicorn Market Place Vietnam Company Limited
VND207,819,496,3
11
Zambia – Stand 2375, Corner Addis Ababa Drive & Great East Road, Show
Grounds, Lusaka
Unilever South East Africa Zambia Limited
ZMK2.00
ZMK2.00
Zambia – Ellis & Co, Lusaka, Lusaka Province
Chesebrough-Ponds (Private) Limited
Zimbabwe – 2 Stirling Road, Workington, Harare
Unilever – Zimbabwe (Pvt) Limited∆
ZWD0.002
SUBSIDIARY UNDERTAKINGS NOT INCLUDED IN THE CONSOLIDATION
Brazil – Av Das Nacoes Unidas, 14261 4º Andar Ala B, Vila Gertrudes, Cep
04792-000, Sao Paulo
13
34
1
1
1
Australia – Level 1, 569 Church Street, Richmond, VIC, 3121
SNDR PTY LTD∆◊ (72.98)
No Par Value
58
Australia – Floor 1, 101 Moray Street, South Melbourne, 3205
Straand Pty Ltd∆◊ (100)
(12.05)
No Par Value
No Par Value
107
109
Bahrain – Shop 61 – Building 866 – Road 3618 – Block 436 Alseef Manama
Unilever Bahrain Co. W.L.L. (49)
BHD50.00
Brazil – Avenue Engenheiro Luiz Carlos Berrini, 105, 16º andar, Ed. Berrini One,
Itaim Bibi, CEP 0471/001-00, City of São Paulo, State of São Paulo
Gallo Brasil Distribuição e comércio Limitada (55)
BRL1.00
Canada – Suite 300-171 West Esplanade, North Vancouver, British Columbia
Canada V7M 3K9
1
5
A&W Root Beer Beverages Canada Inc.◊ (40)
No Par Value
Canada – 229 Amesbury Gate, Bedford, Nova Scotia, B4B 0R8
The 7 Virtues Beauty Inc.∆◊ (64.29)
38
58
Unileverprev Sociedade De Previdencia Privada
No Par Value
13
Canada – PO Box 49130, 2900 – 595 Burrard Street, Vancouver BC V7X 1J5
Unilever Annual Report and Accounts 2023
241
1
1
1
1
13
1
13
1
1
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Group Companies
Name of
Undertaking
Dollar Shave Club Canada, Inc. (35)
Nominal
Value
CAD0.01
Cyprus – 2 Marcou Dracou Street, Engomi Industrial Estate, 2409 Nicosia
Unilever PMT Limited∆ (49)
EUR1.71
Share
Class
Note
7
3
England and Wales – 100 Victoria Embankment, Blackfriars, London, EC4Y 0DY
Name of
Undertaking
(6.54)
(8.75)
Nominal
Value
INR100.00
INR100.00
Share
Class
Note
65
106
India – 55 2nd Floor Community Centre, East of Kailash, New Delhi, East Delhi,
DL 110065
Dollar Shave Club Limited (35)
Uflexreward Holdings LimitedΔ (99.64)
Uflexreward LimitedΔ (99.64)
GBP1.00
GBP0.001
GBP0.001
England and Wales – Unit 1.8 & 1.9 The Shepherds Building, Charecroft Way,
London, W14 0EE
SCA Investments Holdings Limited∆◊ (15.61)
(25.19)
(3.63)
(5.31)
GBP0.001
GBP0.001
GBP0.001
1
1
35
40
41
42
Convosight Analytics Private Limited∆◊ (3.08)
(7.41)
(12.73)
(11.15)
INR1.00
INR1.00
INR 10.00
INR 10.00
India – Plot no. F-2109, RIICO Industrial Area, Ramchandra Pura, (Sitapura
Extension) Jaipur, Rajasthan 303905
Uprising Science Private Limited∆◊ (2.50)
(27.27)
INR10.00
INR100.00
GBP0.001
112
India –Plot No. D 5, Road No. 20, Marol MIDC, Andheri East, Mumbai City MH
400093
England and Wales – 2nd Floor, 5 Jubilee Place, Chelsea, London, SW3 3TD
Scentials Beautycare & Wellness Ltd∆◊ (63.43)
Trinny London Limited∆◊ (54.88)
(32.32)
GBP0.01
GBP0.01
43
77
(0.10)
India – 15 Ambika Nagar, Sector 4, Hiran Magri, Udaipur, Rajasthan, 313002
England and Wales – 127 North Milton Park, Abingdon, Oxfordshire OX14 4SA
Derma Goodness Private Limited∆◊ (0.2)
P2i Limited∆◊ (12.89)
(5.44)
(5.44)
(4.20)
(4.20)
(2.44)
(50)
GBP0.000001
GBP0.000001
GBP0.000001
GBP0.000001
GBP0.000001
GBP0.000001
GBP1.0000
1
44
46
52
50
102
80
England and Wales – Level 1 Brockbourne House, 77 Mount Ephraim, Tunbridge
Wells, Kent, TN4 8BS
Clean Beauty Co Ltd∆◊ (69.76)
(26.72)
GBP0.0001
GBP0.0001
97
58
England and Wales – C4 Lab Psc Building, Unilever R&D Port Sunlight, Quarry
Road East, Bebington, Wirral, CH63 3JW
Penhros Bio Limited◊ (32)
GBP1.00
1
England and Wales- C/O Bcs Windsor House, Station Court, Station Road,
Great Shelford, Cambridge, Cambridgeshire, England, CB22 5NE
VHSquared Limited◊ (in liquidation) (39.47)
(1.79)
(17.86)
GBP0.01
GBP0.01
1
44
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)
Henglein NRW GmbH◊ (50)
DEM250,000.00
Germany – Lauchaer Straße 1, 06647 An der Poststraße OT Klosterhaeseler
Henglein GmbH & Co. KG◊ (50)
DEM50,000.00
Germany – Neue Burg 1, 20457 Hamburg
Dollar Shave Club GmbH (in liquidation)(35)
EUR25,000.00
India – 1st & 2nd Floor, Kagalwala House, Plot No. 175, CST Road, Kalina,
Bandra Kurla, Santacruz East Mumbai, Mumbai 400098
1
1
1
4
1
4
1
1
1
Peel-Works Private Limited∆◊ (48.15)
(16.67)
(14.65)
INR30.00
INR30.00
INR30.00
63
70
32
India – 1st Floor Lodha, i-Think Techno Campus, A Wing, Chirak Nagar, Thane.
MH 400607
Pureplay Skin Sciences (India) Private Limited∆◊
(0.1)
(100)
(100)
INR10.00
INR100.00
INR100.00
75
73
64
242
Unilever Annual Report and Accounts 2023
(97.93)
India- Z -44, Panchasayar P -210-4-1, Panchasayar Kolkata WB 700094
Wellness Ville Private Limited∆◊ (0.01)
(92.11)
India – 28 B.T. Road, Cossipore Chiria, More Kolkata, WB 700002
Rabiko Lifestyle Private Limited ∆◊ (0.02)
(100.00)
India – A-2004, Floor-20, Plot-141, Phoenix Tower-A, S.B. Marg, Delisle Road,
Lower Parel West, Mumbai, 400013
Nutritionalab Private Limited (13.31)
INR10.00
India – Ground Floor, Plot No 57, Industrial Area Phase I, Chandigarh 160002
Zywie Ventures Private Limited (33.02)
INR10.00
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)(51)
IRR1,000,000.00
Ireland – 70 Sir John Rogersons Quay, Dublin 2
Pepsi Lipton International Limited∆
EUR1.00
EUR1.00
EUR1.00
EUR1.00
Israel – Kochav Yokneam Building, 4th Floor, PO Box 14, Yokneam Illit 20692
IB Ventures Limited∆ (99.74)
ILS1.00
14
Israel – Park Zvaim Industrial Area, Beit Shean / Correspondance:
PO Box 787, Beit Shean, 1171601
Dollar Shave Club Israel Limited (35)
Italy – Via Quercete, n.a. 81016, San Potito Sannitico (CE)
P2P S.r.l (50)
Luxembourg – 5 Heienhaff, L-1736 Senningerberg
Helpling Group Holding S.à r.l.∆◊ (98.57)
(2.34)
NIS0.10
EUR1.00
EUR1.00
EUR1.00
1
1
60
33
Mauritius – c/o Apex Fund Services (Mauritius) Ltd, 4th Floor, 19 Bank Street,
Cyber City, Ebene 72201
Capvent Asia Consumer Fund Limited∆ (40.40)
USD0.01
78
Oman – PO Box 1711, Ruwi, Postal code 112
Towell Unilever LLC (49)
OMR10.00
1
Philippines –11th Avenue Corner, 38th Street, Bonifacio Triangle, Bonifacio
Global City, Taguig City, Metro Manila
Sto Tomas Paco Land Corp∆◊ (40)
(40)
(40)
PHP1.00
PHP10.00
PHP20.00
7
46
44
Cavite Horizons Land, Inc.◊ (35.10)
PHP1.00
103
75
99
117
116
75
117
73
75
75
110
75
118
75
114
1
1
1
1
52
53
54
55
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Group Companies
Name of
Undertaking
Nominal
Value
Share
Class
Note
PHP10,000.00
46
Philippines – Manggahan Light Industrial Compound, A. Rodriguez Avenue, Bo.
Manggahan, Pasig City
WS Holdings Inc.∆◊
Selecta Walls Land Corp∆◊
PHP1.00
PHP1.00
PHP10.00
29
103
29
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)
Transportadora Central do Infante, Limitada (54)
EUR4,125,000
EUR550,000
EUR27,500
EUR27,000
Unilever Fima, Limitada (55)
EUR14,462,336.00
Victor Guedes – Industria e Comercio, S.A. (55)
Fima Dressings Unipessoal, Limitada (55)
Saudi Arabia – PO Box 22800, Jeddah 21416
EUR275,000
EUR27,500
Binzagr Unilever Distribution Company Limited
(49)
SAR1,000.00
Singapore – 3 Phillip Street, #14-05 Royal Group Building, 048693
YOU Private Limited∆◊ (33.33)
(33.56)
Singapore – 20A Tanjong Pagar Road, 088443
ESQA Corp Pte Ltd∆◊ (60)
Sweden – Sturegatan 38, Stockholm, 11436
SachaJuan Haircare AB∆◊ (69.5)
SEK1.00
United Arab Emirates – PO Box 49, Dubai
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 Registered Agents Solutions, Inc., 838 Walker Road Suite
21-2, Dover, Kent, DE, 19904
Beauty Bakerie Cosmetics Brand Inc.∆◊ (50.05)
(16.24)
(24.88)
USD0.001
USD0.001
USD0.001
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
USD0.0001
USD0.0001
United States – 700 Sylvan Avenue, Englewood Cliffs, New Jersey 07632-3201
Pepsi Lipton Tea Partnership (50)
Food Service Direct Logistics, LLC (40)
1
5
5
1
5
1
5
1
76
45
73
9
1
1
43
71
93
7
55
58
4
13
Name of
Undertaking
(17.83)
(17.83)
Nominal
Value
USD0.0001
USD0.0001
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)
Outliers, Inc.∆◊ (58.77)
(31.35)
Perelel, Inc.∆◊(64.71)
(73.18)
True Botanicals, Inc.∆◊ (51.23)
Yati Inc.∆◊ (4.00)
(100.00)
USD0.00001
USD0.001
USD0.001
USD 0.00001
USD 0.00001
USD0.0001
USD0.00001
USD0.00001
Share
Class
Note
55
58
98
6
100
62
113
97
44
62
115
47
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
44
United States – c/o The Corporation Trust Company, Trust Center, 1209 Orange
Street, Wilmington, Delaware, 19801. New Castle County
Koco Life LLC∆◊(26.19)
(41.15)
New Voices Fund LP◊ (32.90)
Keli Network, Inc.∆◊ (28.24)
104
105
4
88
USD0.0001
United States – c/o A registered agent, Inc, 8 The Green, Ste A, Dover, Kent, DE,
19901
Clean Beauty for All, Inc.∆◊ (22.09)
(41.99)
(62.35)
(67.85)
USD0.0001
USD0.0001
USD0.0001
USD0.0001
United States – United Corporate Services, Inc., 800 North State Street Suite
304, Dover, Kent, DE, 19901
UOMA Beauty Inc.∆◊ (25)
(70.96)
(49.88)
United States –National Registered Agents Inc, 1209 Orange Street,
Wilmington, New Castle, Delaware 19801
Mealogic, Inc.∆◊ (37.5)
United States – 13335 Maxella Ave. Marina del Rey, CA 90292
Dollar Shave Club, Inc. (35)
USD0.001
62
95
51
96
62
95
51
58
13
Unilever Annual Report and Accounts 2023
243
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Group Companies
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: Common Stock, 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 Preference, 45: Series B1 CCPS, 46: B Preference, 47: Series A-5, 48: Series C-2 Preferred, 49: A-4 Com, 50: D Preference, 51: Series A-3 Preferred, 52: C Preference, 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 A-1
Preferred, 63: Series B-2 Preference, 64: Pre Series B CCPS, 65: Series B CCPS, 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 CCPS, 74: Series A2 CPPS, 75: Equity, 76: Series B CCPS, 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:
Not in use, 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: CCPS,100: Series A Preferred Stock, 101: Ordinary Preferred, 102: E Preference, 103: Common
A, 104: Series D-5 Preferred, 105: Series D-6 Preferred, 106: Series C CCPS, 107: Series Seed Convertible Preferred, 108: Series C-E Preferred, 109: Series Seed 2 Convertible
Preferred Shares, 110: Seed CCPS, 111: Series Seed Preferred Shares, 112: M-Ordinary, 113: Series A-9 Preferred, 114: Series Seed CCPS, 115: Series A-1, 116: Pre-Series B
CCCPS, 117: Series A CCCPS, 118: Series Seed A CCPS
O 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, 18.32% is directly held and the remainder of 81.68% 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 Sanayi ve Ticaret A.Ş. and Unilever Sanayi 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.
X Binzagr Unilever Limited, Severn Gulf FZCO, Unilever Binzagr Gulf General Trading LLC, Unilever Home and Personal Care Products Manufacturing LLC 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, Aland Islands, Albania, Americas, Andorra, Angola,
Anguilla, Antigua and Barbuda, Armenia, Aruba, Azerbaijan, Bahamas, Barbados, Belize, Benin, Bhutan, Bonaire, Sint Eustatius & Saba, Bosnia and Herzegovina, Botswana,
British Virgin Islands, Brunei Darussalam, Burkina Faso, Burundi, Cameroon, Cape Verde, Cayman Islands, Central African Republic, Chad, Christmas Island, Cocos (Keeling)
Islands, Comoros, Congo, Cook Islands, Curacao, Democratic Republic of Congo, Dominica, Equatorial Guinea, Eritrea, Faroe Islands, Federated States of Micronesia, Fiji,
French Guiana, French Polynesia, Gabon, Gambia, Georgia, Gibraltar, Greenland, Grenada, Guam, Guernsey, Guinea, Guinea-Bissau, Guyana, Heard Island and McDonald
Islands, Iceland, Iraq, Kiribati, Kosovo, Kuwait, Kyrgyzstan, Lebanon, Lesotho, Liberia, Libya, Liechtenstein, Luxembourg, Macao, Macedonia, Madagascar, Maldives, Mali,
Malta, Marshall Islands, Mauritania, Mauritius, Monaco, Mongolia, Montenegro, Montserrat, Namibia, Nauru, New Caledonia, Niue, Norfolk Island, Northern Ireland, Palau,
Papua New Guinea, Saint Kitts and Nevis, Saint Lucia, Saint Martin (French part), Saint Vincent and the Grenadines, Samoa, San Marino, Senegal, Seychelles, Sierra Leone,
Sint Maarten (Dutch part), Slovenia, Solomon Islands, Somalia, South Sudan, Suriname, Swaziland, Tajikistan, Timor Leste, Togo, Tokelau, Tonga, Turkmenistan, Tuvalu,
Uzbekistan, Vanuatu and Yemen.
The Unilever Group has established branches in Azerbaijan, Belarus, Bosnia-Herzegovina, Burkina Faso, Côte d'Ivoire, Cuba, Jordan, Kazakhstan, Lebanon, Northern
Ireland, the Philippines, Saudi Arabia, Turkey, UAE and the UK.
244
Unilever Annual Report and Accounts 2023
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Shareholder information
Financial calendar
Annual general meeting
Date
Voting and Registration date
Quarterly dividends
Quarterly dividend announced
with the Q4 2023 results
Quarterly dividend announced
with the Q1 2024 results
Quarterly dividend announced
with the Q2 2024 results
Quarterly dividend announced
with the Q3 2024 results
1 May 2024
29 April 2024
Announcement date
Ex-dividend date
for ordinary shares
Ex-dividend
date for ADSs
Record date
Payment date
8 February 2024
22 February 2024
22 February 2024
23 February 2024
22 March 2024
25 April 2024
16 May 2024
16 May 2024
17 May 2024
7 June 2024
25 July 2024
8 August 2024
9 August 2024
9 August 2024
6 September 2024
24 October 2024
7 November 2024
8 November 2024
8 November 2024
6 December 2024
Contact details
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 can email us at
shareholder.services@unilever.com
Shareholder Services
UK
Computershare Investor Services PLC
The Pavilions
Bridgwater Road
Bristol BS99 6ZZ
Telephone +44 (0) 370 600 3977
Website
FAQ and Contact Form
www.investorcentre.co.uk
www.investorcentre.co.uk/
contactus
The Netherlands
ABN AMRO Bank N.V.
Gustav Mahlerlaan 10
1082 PP Amsterdam
Telephone +31 (0) 20 628 6070
Email
US
corporate.broking@nl.abnamro.com
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
Email
db@astfinancial.com
Website
Shareholders are encouraged to visit our website which has a wealth
of information about Unilever.
There is a section on our website designed specifically for investors. It
includes detailed coverage of the Unilever share price, our quarterly
and annual results, performance charts, financial news and investor
relations speeches and presentations. It also includes details of the
conference and investor/analyst presentations.
You can also view the Unilever Annual Report and Accounts 2023
(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
References to information on websites in this document are included as
an aid to their location and such information is not incorporated in, and
does not form part of, this document. Any website URL is included as
text only and is not an active link.
Publications
Copies of the Unilever Annual Report and Accounts 2023 (and the
Additional Information for US Listing Purposes) and the Annual Report
on Form 20-F 2023 can be accessed directly or ordered via the website.
www.unilever.com/investorrelations
Unilever Annual Report and Accounts 2023
The Unilever Annual Report and Accounts 2023 (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
Unilever’s quarterly results announcements are in English with figures
in euros.
Unilever Annual Report and Accounts 2023
245
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Additional information for
US listing purposes
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
B.
C.
D.
Capitalisation and Indebtedness
Reasons for the offer and use of proceeds
Risk factors
Item 4
Information on the Company
n/a
n/a
n/a
n/a
71-78
History and development of the company
6-55, 88,177-179, 196-199, 219-222, 245, 250
Business overview
Organisational structure
Property, plant and equipment
Item 4A
Unresolved Staff Comments
Item 5
Operating and Financial Review and Prospects
2-5, 10-33, 38-47, 70-78, 180-182, 250
88, 226, 234-244
197-199, 250
n/a
Operating results
Liquidity and capital resources
10-13, 56-64, 72-78, 208-213
58-59, 77, 79, 156, 176, 197-199, 203, 206-220
Research and development, patents and licences, etc.
3, 14-33, 38, 40-45, 183, 250
A.
B.
C.
D.
A.
B.
C.
D.
E.
2, 6-33, 71
n/a
84-87, 248
116-153, 184-191
84-97, 102-118, 248
2, 67, 184, 248
129-153, 190-191, 248
n/a
100, 249
224, 249
n/a
157-233, 245, 249, 255
225
88,100, 249, 253-254
n/a
100, 249
n/a
n/a
n/a
Trend information
Critical accounting estimates
Item 6
Directors, Senior Management and Employees
A.
B.
C.
D.
E.
F.
Directors and senior management
Compensation
Board practices
Employees
Share ownership
Disclosure of a registrant's actions to recover
erroneously awarded compensation
Item 7
Major Shareholders and Related Party Transactions
A.
B.
C.
Major shareholders
Related party transactions
Interest of experts and counsel
Item 8
Financial Information
A.
B.
Consolidated statements and other financial information
Significant changes
Item 9
The Offer and Listing
A.
B.
C.
D.
E.
F.
Offer and listing details
Plan of distribution
Markets
Selling shareholders
Dilution
Expenses of the issue
246
Unilever Annual Report and Accounts 2023
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Additional information for US listings purpose
Item 10
Additional Information
A.
B.
C.
D.
E.
F.
G.
H.
I.
J.
Share capital
Articles of association
Material contracts
Exchange controls
Taxation
Dividends and paying agents
Statement by experts
Documents on display
Subsidiary information
Annual security report to security holders
n/a
95-100,141, 253
250
250
251-252
n/a
n/a
245, 250
n/a
n/a
Item 11
Quantitative and Qualitative Disclosures About Market Risk
201-218, 256
Item 12
Description of Securities Other than Equity Securities
A.
B.
C.
D.
Description of debt securities
Description of warrants and rights
Description of other securities
American Depository Shares
Item 13
Defaults, Dividend Arrearages and Delinquencies
A.
B.
Defaults
Dividend arrearages and delinquencies
Item 14
Material Modifications to the Rights of Security Holders and Use of Proceeds
Item 15
Controls and Procedures
A.
B
C
D
Disclosure Controls and Procedures
Annual report on Internal Control
Attestation Report
Changes in Internal Control over Financial
Reporting
Item 16
Reserved
Item 16A.
Audit Committee Financial Expert
Item 16B.
Code of Ethics
Item 16C.
Principal Accountant Fees and Services
Item 16D.
Exemptions from The Listing Standards for Audit Committees
Item 16E.
Purchases of Equity Securities by The Issuer and Affiliated
Purchasers
Item 16F.
Change in Registrant’s Certifying Accountant
Item 16G.
Corporate Governance
Item 16H. Mine Safety Disclosures
Item 16I.
Disclosure Regarding foreign Jurisdictions that Prevent
Inspections
Item 16J.
Insider Trading Policies
Item 16K.
Cybersecurity
Item 17
Financial Statements
Item 18
Financial Statements
n/a
n/a
n/a
253
253
253
n/a
101
254
254
n/a
108
100-101, 113-114
108-111, 255
n/a
99, 224, 254
n/a
100-101
n/a
n/a
n/a
251
156-244
156-244
Item 19
Exhibits Please refer to the Exhibit list located immediately following the signature page for this document as filed with the SEC.
Unilever Annual Report and Accounts 2023
247
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Additional information for US listings purpose
Directors, senior management and employees
Employees
The average number of employees for the last three years is provided in note 4A on page 184. The average number of employees during 2023
included 129 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 22 February 2024 (the latest practicable date for
inclusion in this report), awards for 331,195 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 29 November 2022 to authorise the issue of newly issued
Unilever Ordinary Shares under the Plan. 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 12 December 2022.
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. As mentioned on page 141, Nelson Peltz, a Non-Executive Director, is the
Chief Executive and founding partner of Trian Fund Management, LP, which held interests in approximately 1.5% of Unilever’s issued share capital
as at 22 February 2024.
248
Unilever Annual Report and Accounts 2023
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Additional information for US listings purpose
Major shareholders and related party transactions
Major shareholders
The voting rights of the significant shareholders of the Company are the same as for other holders of the class of share held by such significant
shareholders.
The principal trading market upon which the Company's ordinary shares are listed is the London Stock Exchange. The Company's ordinary shares
are also listed and traded on Euronext Amsterdam.
In the United States, Unilever 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 22 February 2024 (the latest practicable date for inclusion in this report), there were 1,878 registered holders of Unilever PLC American
Depositary Receipts in the United States. We estimate that approximately 40% of the Company’s ordinary shares (including shares underlying
Unilever PLC American Depositary Receipts) were held in the United States in 2023.
If you are a shareholder of the Company, your interest is in a UK legal entity, your dividends will be paid in pound sterling (converted into US dollars
if you have Unilever PLC American Depositary Receipts) and you may be subject to UK tax.
To Unilever’s knowledge, the Company is not owned or controlled, directly or indirectly, by another corporation, any foreign government or by any
other legal or natural person, severally or jointly. The Company is not aware of any arrangements the operation of which may at any subsequent
date result in a change of control of the Company.
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 2024 up to
22 February 2024 (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)
2023
2022
2021
2020
2019
£1.48
$1.86
£1.50
$1.86
£1.48
$1.77
£1.45
$1.80
£1.46
$2.00
£1.48
$2.03
£1.48
$1.91
£1.45
$1.85
£1.43
$1.83
£1.42
$1.82
Unilever Annual Report and Accounts 2023
249
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Additional information for US listings purpose
Material contracts
At the date of this Annual Report on Form 20-F, 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.
Unilever Annual Report on Form 20-F 2023
Filed with the SEC on the SEC’s website. Printed copies are available,
free of charge, upon request to Unilever PLC, Investor Relations
department, 100 Victoria Embankment, London, EC4Y 0DY
United Kingdom.
Documents on display in the United States
Unilever files and furnishes reports and information with the United
States SEC. Certain of our reports and other information that we file or
furnish to the SEC are also available to the public over the internet on
the SEC’s website.
2022 compared to 2021 Financial Performance
We have not included a discussion of year-over-year comparisons
between 2022 and 2021 in this Annual Report on Form 20-F. This
discussion can be found in “Group Financial Review”, “Business Group
Review”, Planet & Society”, “Financial Performance” and “Financial
Statements” in our annual report on Form 20-F for the year ended
31 December 2022 filed with the SEC on 13 March 2023.
Other information on the Company
Innovation, Research and Development
We have over 20,000 patents protecting the discoveries and
breakthroughs that our global team of 5,000 world-leading experts
produce. We have invested around €900m in R&D in each of the last
three years.
We strive to create superior products, consumer-relevant innovation
and help ensure efficiency and resilience in supply. Technology and
consumers sit at the heart of our approach to innovation. We are
building digital and automated technology into our innovation centres.
For example, our UK Materials Innovation Factory has the highest
concentration of robots doing material chemistry in the world. It delivers
more accurate data many times faster than traditional methods. We
run virtual tests and scenarios to optimise products before the lab and
scale up stage, bringing efficiency and cutting time to market. Our new
Agile Innovation hubs, including in Shanghai, China, use real time
consumer data to develop new insights, then rapidly develop
prototypes to test via eCommerce in a matter of days. This provides
rapid and efficient, on-trend innovation.
We are investing in real science behind our focus areas. For example,
our world-leading research and partnerships on the microbiome, where
we have more than 100 patents. This is unlocking significant benefits
and is leading to new scientific insights and product innovations, such
as biome-friendly skin care products and superior, probiotic cleaning
products for the home.
R&D also underpins our sustainability goals, helping to power our move
away from petrochemicals, stop plastic pollution and ensuring we
source ingredients in a sustainable way. Science, technology and
innovation are required behind these goals, from renewable materials,
to new bio-based ingredients, to next generation packaging materials.
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 improve people’s health,
confidence, and wellbeing, while taking care to reduce our impact on
the planet. We are constantly evolving alongside our consumers’ ever-
changing lives and tastes, and to remain at the cutting-edge of science
and technology.
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Unilever Annual Report and Accounts 2023
Raw materials
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 2023, economic volatility and inflationary and cost of living pressures
continued. We experienced net material inflation of around €1.8bn with
lower net material inflation in the second half of the year. We more than
mitigated the effect of such net material inflation through increased
productivity, price and mix of our products.
Seasonality
Certain of our businesses, such as ice cream, are subject to significant
seasonal fluctuations in sales. However, Unilever operates globally
in many different markets and product categories, and no individual
element of seasonality is likely to be material to the results of the
Group as a whole.
Intellectual property
We have a large portfolio of patents and trademarks, and we conduct
some of our operations under licences that are based on patents or
trademarks owned or controlled by others. We are not dependent on
any one patent or group of patents. We use all appropriate efforts to
protect our brands and technology.
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 2023, sales in
Iran were significantly less than 0.5 per cent of Unilever’s worldwide
turnover. During the year, this non-US subsidiary had approximately
€3,273,897 in gross revenues and less than €1,442,981 in net profits
attributable to the sale of personal care and home care products to
entities affiliated with the Government of Iran. The entities were the
Shahrvand Group and the Najm Khavarmianeh shopping mall. Income,
payroll and other taxes, duties and fees (including for utilities) were
payable to the Government of Iran and affiliated entities and
significantly less than 0.5 per cent of our total raw material purchases
were indirectly related to the Government of Iran in connection with our
operations. These two suppliers were Jovein Agriculture Industry J.S.C
and Amlah Madani Iran, which supplied raw materials used in personal
care and home care products, including soap, shampoo and laundry
products. 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.
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.
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CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Additional information for US listings purpose
Cyber Security risk management and strategy
Risk management and strategy
Unilever recognises the importance of cybersecurity and takes a
risk-based approach to the defence and resiliency of critical assets,
business operations, technology and data:
■ Unilever has an established Cyber Security Risk Management
Framework aligned to industry-standard methodologies and control
frameworks. We promote a company-wide culture of cybersecurity
awareness and vigilance and provide regular reporting on the
cybersecurity risk posture of the organisation to operational and
business leaders, leadership executives and key non-executives, in
order to influence and promote continuous improvement of our risk
posture. The Cyber Security Risk Management approach is aligned
to Unilever’s risk management framework, with cybersecurity risk
forming a central part of the principal risk "Systems and Information"
on page 75;
■ Unilever has an established framework of Cyber Security Policies
and Standards which are in alignment to cybersecurity industry
frameworks. These apply to employees, third parties, contractors,
data and technology across Unilever. Unilever Cyber Security Policies
and Standards are subject to periodic review and modifications
based on any changes in risk;
■ A Cyber Security team dedicated to risk assurance, and the Internal
Audit team conducting independent enterprise-wide risk
reassurance, assess and report on the risk posture of our key systems,
services, data, and operations. The scope and frequency of the
evaluations are risk-based, with output used to influence and
promote continuous improvement of Unilever’s resilience posture, as
well as provide insights to the governance of cyber risk by the Audit
Committee. The Cyber Security Assurance team is composed of
internal and external expertise, including penetration testing services
and a bug bounty program;
■ Unilever’s Cyber Security function drives continuous improvement
initiatives, leveraging people, processes and technology, to address
emerging risks. We also conduct resilience planning and recovery
testing, aiming to bolster preparedness for cybersecurity incidents;
and
■ Whilst Unilever’s cyber risk management activities are aimed at
reducing the likelihood of a material cybersecurity incident
happening, they cannot guarantee a material event will not occur.
Should a material event occur, Unilever has a set of established and
rehearsed incident response procedures. These set out a structured,
phased, tiered response for the full incident lifecycle, including
coordination with other corporate functions and relevant senior
leaders (see below). Our procedures are designed to detect and
respond in a timely manner to abnormal cyber activity in order to
minimise business impact – for example by supporting rapid recovery
of services and/or operations, enabling legal and regulatory
obligations, or reducing reputational impact.
Our internal Cyber Security function is a global team of experienced
professionals, with a multi-channeled talent pipeline, who carry various
and multiple industry credentials, led by a seasoned, multi-industry
experienced Chief Information Security Officer (CISO). Our internal team
is complemented by the expertise and specialised knowledge of a
range of external partners and providers. These external providers add
support across select capabilities, all in alignment with cybersecurity
industry good practice frameworks.
While we have and regularly continue to experience cyber-attacks,
no known cybersecurity incidents have occurred that have, or are
reasonably expected to, materially affect Unilever.
Governance
Cybersecurity risk is a component of Unilever's "Systems and
Information" principal risk, reflecting the importance and priority given
by the Board of Directors to this risk. The Audit Committee is central
to the Board's oversight of cybersecurity risk at Unilever. Cybersecurity
has continued to be an area of regular focus for the Audit Committee
in 2023.
Management provides cybersecurity briefings to the Audit Committee
on a regular (typically quarterly) basis, covering a range of topics
including:
■ Status of ongoing cybersecurity controls and risk posture, and
continuous improvement initiatives
■ Operational metrics, and reports and learnings, as applicable,
from any cybersecurity events
■ Education on our cybersecurity risk management frameworks,
and regulatory trends and requirements
■ Ongoing awareness of external threat landscape and trends.
The Audit Committee’s role in cybersecurity risk oversight is further
supported by our Internal Audit function which provides independent
re-assurance of the effectiveness of Management’s cybersecurity risk
handling including internal controls systems.
Ownership of cybersecurity risk at Unilever sits with the Chief Financial
Officer (CFO) and the Chief Business Operations Officer (CBOO), who
are members of Unilever's executive leadership team. They receive
regular, routine cybersecurity briefings as well as ad hoc updates, as
needed. The broader executive leadership team members are informed
of the cybersecurity risk posture of Unilever and participate in periodic
education and awareness sessions.
The Chief Enterprise Technology Officer (CETO) and the Chief
Information Security Officer (CISO) support the CFO and CBOO by
monitoring and advising on Unilever's cybersecurity risk. Outputs from
the cybersecurity risk management process, threat detection capability,
vulnerability lifecycle management, and assurance and re-assurance
activities drive enterprise-wide visibility and reporting of company
performance on cybersecurity risk posture, influencing and prioritising
continuous risk mitigation activities across the enterprise.
To make transparent and track the continuous risk mitigation activities
across the enterprise, a council of senior individuals and executives
meet regularly and are the membership of the Information Protection
Council (IPC). This Council has expertise in cybersecurity, information
technology, enterprise risk, privacy, legal, physical security, and internal
audit. The IPC actively reviews enterprise-wide cybersecurity risk
management prioritisation, progress and initiatives, providing key
operational unlocks and risk prioritisation decisions. These senior
individuals have significant experience and expertise across multiple
industries, with specialty expertise in developing and executing
cybersecurity strategy, driving digital transformation, managing
information technology, overseeing and embedding data protection
and data privacy good practices, embedment and oversight of financial
controls, and operating within complex regulatory and compliance
environments. The members of the IPC then drive, as appropriate to
their role and responsibilities, first and second line of defence risk
reduction activities, providing a whole-of-Unilever approach to the
governance of cybersecurity risk, embedment of cybersecurity controls,
assurance of those controls and risk posture, and independent re-
assurance of our cybersecurity risk posture.
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
Unilever Annual Report and Accounts 2023
251
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Additional information for US listings purpose
with respect to the appropriate US Federal Income Tax treatment of any
distribution received from us.
or, in the case of a shareholder who performs independent personal
services, pertain to a fixed base situated in the United Kingdom.
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
If you are a US person generally you 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 your adjusted tax basis in
the shares or ADSs, in each case as determined in US dollars. You should
consult your 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 your
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
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Unilever Annual Report and Accounts 2023
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.
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.
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
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Additional information for US listings purpose
providers that have made an election under section 97A(1) of the
Finance Act 1986 which has been approved by HMRC, 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').
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.
US backup withholding and information reporting
Payments of dividends and other proceeds with respect to ordinary
shares or ADSs by a US (or US connected) paying agent or a US (or US
connected) intermediary 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 may subject you 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.
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:
■ Issuance of ADSs: up to US 5¢ per ADS issued.
■ Cancellation of ADSs: up to US 5¢ per ADS cancelled.
■ Processing of dividend and other cash distributions not made
pursuant to a cancellation or withdrawal: up to US 5¢ per ADS held.
An ADS holder will also be responsible for paying certain fees and
expenses incurred by the depositary bank and certain taxes and
governmental charges such as:
■ fees for the transfer and registration of shares charged by the
registrar and transfer agent for the shares in the United Kingdom
(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.
Depositary payments – fiscal year 2023
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 2023, PLC received $5,274,810 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.
Articles of association
Lapse of distributions
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 claimed. 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.
Unilever Annual Report and Accounts 2023
253
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Additional information for US listings purpose
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.
Required majorities
Resolutions are usually adopted at the Company's General Meetings by
an absolute majority of votes cast, unless there are other requirements
under the applicable laws or the Company's Articles. For example, there
are special requirements for resolutions relating to the alteration of the
Articles of Association and the liquidation of the Company. A proposal
to alter the Articles of the Company can be made either by the
Company's Board or by requisition of shareholders in accordance with
the UK Companies Act 2006. Unless expressly specified to the contrary in
the Company's Articles, the Company's Articles may be amended by a
special resolution. The Company's Articles can be found on our website.
Purchases of equity securities
Share purchases during 2023
Please also refer to the ‘Shares’ section on page 99.
In 2023 31,734,256 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.
The following table shows details of such purchases of shares made by the Company during 2023:
2023
January
February
March
April
May
June
July
August
September
October
November
December
Total Number of Shares
purchased
Average Price Paid Per Share
(GBP)
Total Number of Shares
Purchased as Part of Publicly
Announced Plans or Programs
Maxium Number (or
Approximate Dollar Value)
of Shares that May Yet be
Purchased Under
the Plans or Programs
–
–
4,475,280
2,835,489
6,611,950
1,629,965
–
–
6,276,933
9,904,639
–
–
–
–
41.76
43.28
42.25
40.37
–
–
40.69
39.69
–
–
–
–
4,475,280
7,310,769
13,922,719
15,552,684
–
–
21,829,617
31,734,256
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Between 31 December 2023 and 22 February 2024 (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 2023, and has concluded that such
internal control over financial reporting is effective. Management’s assessment and conclusion excludes Zywie Ventures Private Limited (“OZiva”)
and Yasso Holdings, Inc., as they were acquired on 10 January 2023 and 1 August 2023, respectively. These entities are included in our 2023
consolidated financial statements, and together they constituted 1.09% of our total assets as at 31 December 2023 (of which 92% represented
goodwill and intangible assets acquired) and 0.14% of total turnover for the year ended 31 December 2023; and
■ KPMG LLP, who have audited the consolidated financial statements of the Group for the year ended 31 December 2023, have also audited the
effectiveness of internal control over financial reporting as at 31 December 2023 and have issued an attestation report on internal control over
financial reporting.
254
Unilever Annual Report and Accounts 2023
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Additional information for US listings purpose
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)(c)
Tax fees(d)
All other fees(d)
€ million
€ million
€ million
2023
23
1
–
–
2022
23
1
–
–
2021
22
6
–
–
(a)
(b)
(c)
(d)
Amount payable to KPMG in respect of services supplied to associated pension schemes was less than €1 million individually and in aggregate (2022: less than
€1 million individually and in aggregate; 2021: 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.
2021 includes audit of carve-out financial statements of ekaterra (€5 million).
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 (2022: less than €1 million,
2021: less than €1 million).
Guarantor statements
On 26 July 2023, Unilever Finance Netherlands B.V. and Unilever Capital Corporation (UCC) filed a US Shelf registration, which was unconditionally
and fully guaranteed by Unilever PLC (PLC) and Unilever United States, Inc. (UNUS).
In relation to the US Shelf registration, US$11.2 billion of Notes were outstanding at 31 December 2023 (2022: US$10.75 billion; 2021: US$12.1 billion)
with coupons ranging from 0.626% to 5.900%. These Notes are repayable between 7 March 2024 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.
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 of
regulation S-X, 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 2023
255
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, concerning the financial condition, results of operations and businesses of the Unilever Group (the ‘Group’).
All statements other than statements of historical fact are, or may deemed to be, forward-looking statements. Words such as ‘will’, ‘aim’, ‘expects’,
‘anticipates’, ‘intends’, ‘looks’, ‘believes’, ‘vision’, ‘ambition’, ‘target’, ‘goal’, ‘plan’, ‘potential’, ‘work towards’, ‘may’, ‘milestone’, ‘objectives’,
‘outlook’, ‘probably’, ‘project’, ‘risk’, ‘seek’, ‘continue’, ‘projected’, ‘estimate’, ‘achieve’ 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 Group’s emissions reduction targets and other climate change related
matters (including actions, potential impacts and risks associated therewith). Forward-looking statements can be made in writing but also may be
made verbally by directors, officers and employees of the Group (including during management presentations) in connection with this document.
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. All forward-looking statements
contained in this document are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Readers
should not place undue reliance on forward-looking statements.
Because these forward-looking statements involve known and unknown risks and uncertainties, a number of which may be beyond the Group's
control, 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 from those
expressed in the forward-looking statements included in this document 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 Unilever's 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. Also see "Our Principal Risks" on pages 70-78 for additional risks and
further discussion.
The forward-looking statements are based on our beliefs, assumptions and expectations of our future performance, taking into account
all information currently available to us. Forward-looking statements are not predictions of future events. These beliefs, assumptions, and
expectations can change as a result of many possible events or factors, not all of which are known to us. If a change occurs, our business,
financial condition, liquidity and results of operations may vary materially from those expressed in our forward-looking statements.
The 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. New risks and uncertainties arise over time, and it is not possible for us to predict those events or how they may affect us. In
addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual
results to differ materially from those contained in any forward-looking statements.
This document also contains data on the Group’s Scope 1, 2 and 3 emissions. Some of this data is based on estimates, assumptions and
uncertainties. Scope 1 and 2 emissions data relates to emissions from the Group’s own activities and supplied heat, power and cooling and is
generally easier for the Group to gather than Scope 3 emissions data. Scope 3 emissions relate to other organisations’ emissions and is therefore
subject to a range of additional uncertainties, including that: data used to model lifecycle footprints is typically industry-standard data or
estimates rather than relating to individual suppliers; and lifecycle models such as the Group’s cover many but not all products and markets.
In addition, international standards and protocols relating to Scope 1, 2, and 3 emissions calculations and categorisations also continue to
evolve, as do accepted norms regarding terminology such as carbon neutral and net zero which may affect the emissions data the Group reports.
As Scope 3 emissions data improves, shifting over time from generic modelled data to more specific data, the data reported in this document is
likely to evolve.
Throughout this report, we include non-GAAP financial measures to explain the performance of our business, including underlying sales growth,
underlying volume growth, underlying price growth, not-underlying items, underlying operating profit, underlying operating margin, underlying
earnings per share, underlying effective tax rate, constant underlying earnings per share, free cash flow, cash conversion, underlying return on
assets, net debt and underlying return on invested capital. Such non-GAAP financial measures are defined in "Additional financial disclosures" and
a reconciliation of these measures to their most directly comparable GAAP financial measures are included within "Additional financial
disclosures." See pages 59-64.
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 2023.
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 2023 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 2023 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 2023.
About this Annual Report
Unilever Annual Report and Accounts 2023
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 'Company', the ‘Group’, ‘we’, ‘our’ and ‘us’ refer to the
Unilever Group.
Our Strategic Report, pages 1 to 79, 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 2023.
The Strategic Report has been approved by the Board and signed on
its behalf by Maria Varsellona – Chief Legal Officer and Group
Secretary.
Our Governance Report, pages 80 to 153, contains detailed corporate
governance information, our Committee reports and how we
remunerate our Directors.
The Governance Report comprises our Directors' Report and our
Directors' Remuneration Report, each of which have been approved by
the PLC Board and signed on its behalf by Maria Varsellona – Chief
Legal Officer and Group Secretary.
Pages 1 to 37 and 56 to 79 of the Strategic Report together with the
Governance Report serve as the Management Report for the purposes
of Disclosure Guidance and Transparency Rule 4.1.8R.
Our Financial Statements and Notes are on pages 155 to 233.
Pages 1 to 245 constitute the Unilever Annual Report and Accounts
2023, which we may also refer to as ‘this Annual Report and Accounts’
throughout this document.
Pages 246 to 255 are included as Additional Information for US Listing
Purposes.
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Unilever please visit our website:
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Unilever PLC
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