Unilever PLC 6-K, filed Jan 30, 2020
Unilever PLC (UL)
6-K
2020-01-30
For: 2020-01-30
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Added on
April 09, 2026
About this 6-K
Unilever PLC filed this 6-K on January 30, 2020.
FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
REPORT OF FOREIGN ISSUER
Pursuant to Rule 13a-16 or 15d-16
of the Securities Exchange Act of 1934
For the
month of January, 2020
UNILEVER
PLC
(Translation
of registrant's name into English)
UNILEVER HOUSE, BLACKFRIARS, LONDON, ENGLAND
(Address
of principal executive offices)
Indicate
by check mark whether the registrant files or will file annual
reports
under
cover Form 20-F or Form 40-F.
Form
20-F..X.. Form 40-F
Indicate
by check mark if the registrant is submitting the Form 6-K in
paper
as
permitted by Regulation S-T Rule 101(b)(1):_____
Indicate
by check mark if the registrant is submitting the Form 6-K in
paper
as
permitted by Regulation S-T Rule 101(b)(7):_____
Indicate
by check mark whether the registrant by furnishing the
information
contained
in this Form is also thereby furnishing the information to
the
Commission
pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
1934.
Yes
No .X..
If
"Yes" is marked, indicate below the file number assigned to the
registrant
in
connection with Rule 12g3-2(b): 82- _______
Exhibit
99 attached hereto is incorporated herein by reference.
Signatures
Pursuant
to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
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UNILEVER
PLC
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/S/ R SOTAMAA
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BY R SOTAMAA
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CHIEF LEGAL OFFICER AND GROUP SECRETARY
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Date:
30 January, 2020
EXHIBIT INDEX
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EXHIBIT
NUMBER
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EXHIBIT
DESCRIPTION
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99
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Notice
to London Stock Exchange dated 30
January 2020
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Final Results
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Exhibit
99
2019 FULL YEAR RESULTS
Performance highlights (unaudited)
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Underlying performance
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GAAP measures
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vs 2018
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vs 2018
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Full
Year
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Underlying
sales growth (USG)(a)
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2.9%
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Turnover
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€52.0bn
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2.0%
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Underlying
operating margin(b)
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19.1%
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50bps
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Operating
margin(b)
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16.8%
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(800)bps
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Underlying
earnings per share(b)
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€2.55
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8.1%
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Diluted
earnings per share(b)
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€2.14
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(38.4)%
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Free
cash flow(b)
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€6.1bn
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€0.7bn
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Net
profit(b)
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€6.0bn
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(38.4)%
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Fourth
Quarter
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USG(a)
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1.5%
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Turnover
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€12.6bn
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4.0%
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Quarterly
dividend payable in March 2020 €0.4104 per share
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(a)
Price
growth in excess of 26% per year in hyperinflationary economies is
not included in these amounts. See page 29 for more
details.
(b)
2018 numbers have
been restated following adoption of IFRS16. See note 1 and note 9
for more details.
Full year highlights
●
Underlying sales
growth of 2.9% with 1.2% volume and 1.6% price
●
Underlying
operating margin increased 50bps with 30bps from gross
margin
●
Turnover increased
2.0% with a positive impact from currency and a negative impact
from the spreads disposal
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Operating margin
and net profit decreased due to the €4.3 billion prior year
gain from the spreads disposal
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Free cash flow up
€0.7 billion to €6.1 billion, helped by higher
underlying operating profit which grew by €0.5
billion
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Return on invested
capital was 19.2%, up from 18.1% in the prior year
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Underlying earnings
per share up 8.1% including a positive impact of 2.3% from
currency
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Alan
Jope: Chief Executive Officer statement
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“In 2019 we delivered underlying sales growth of 2.9%,
balanced between price and volume, a further year of good margin
and earnings progression, and strong free cash flow. We saw strong
growth from emerging markets and our Home Care division. Overall
growth was slightly below our guided range for the year due to the
slowdown we saw in the fourth quarter.
We are now stepping up execution against our fundamental drivers of
growth. These are to: increase penetration by improving brand
awareness and availability; implement a more impactful innovation
programme; improve our performance in faster growing channels;
drive purpose into all our brands; and fuel growth through cost
savings.
We are continuing to evaluate our portfolio and have initiated a
strategic review of our global tea business.
In 2020, our underlying sales growth is expected to be in the lower
half of the multi-year 3-5% range and will be second-half weighted.
While we expect an improvement from the fourth quarter of 2019 into
the first half of 2020, first half underlying sales growth will be
below 3%. The impact of the coronavirus outbreak is unknown at this
time. As we near the completion of our three-year strategic plan,
we expect continued improvement in underlying operating margin and
another year of strong free cash flow, remaining on track for our
2020 goals.”
30
January 2020
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FULL
YEAR OPERATIONAL REVIEW: DIVISIONS
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Fourth
Quarter 2019
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Full
Year 2019
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||||||||
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(unaudited)
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Turnover
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USG*
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UVG
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UPG*
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Turnover
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USG*
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UVG
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UPG*
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Change
in underlying operating margin
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€bn
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%
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%
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%
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€bn
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%
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%
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%
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bps
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Unilever
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12.6
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1.5
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1.1
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0.4
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52.0
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2.9
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1.2
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1.6
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50
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Beauty & Personal Care
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5.6
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0.5
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1.3
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(0.8)
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21.9
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2.6
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1.7
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0.9
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70
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Home Care
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2.7
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3.7
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3.0
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0.7
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10.8
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6.1
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2.9
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3.1
7%1%
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150
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Foods & Refreshment
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4.3
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1.4
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(0.5)
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1.9
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19.3
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1.5
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(0.2)
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1.7
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(20)
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* Wherever referenced in this announcement, USG and
UPG do not include price growth in excess of 26% per year in
hyperinflationary economies. See pages 6 and
29.
Our markets: There has been a significant slowdown during
2019 in South Asia and we have seen some market softening in China.
While parts of Latin America have been volatile, we have seen signs
of improvement in Brazil. South East Asian markets maintained good
growth while developed markets, in particular Europe, remained
challenging.
Unilever overall performance: Underlying sales grew 2.9% with 1.2% from volume
and 1.6% from price. Growth was led by a strong performance in Home
Care. Emerging markets grew 5.3%, driven by performance in
Asia/AMET/RUB, despite a slow end to the year in West Africa, South
Asia and the Middle East. Latin America returned to growth while
Africa declined. Developed markets declined with Europe lapping a
very strong ice cream season from the previous year. In the fourth
quarter, price growth decelerated, driven by price reductions in
India, significantly lower inflation in Turkey and increased
promotional spend in Europe.
Turnover increased by 2.0% which included a positive 1.5% impact of
currency related items and a negative net acquisitions and
disposals impact of 2.3%, mainly driven by the disposal of
spreads.
Underlying operating margin improved by 50bps to 19.1%. The
improvement was driven by 30bps of gross margin, a result of our 5S
savings programme and positive mix while overheads contributed
20bps. We continued our zero-based-budgeting and change programmes,
which are ensuring we transform our organisation to be future-fit.
Brand and marketing investment as a percentage of turnover was flat
and in constant currencies investment increased €70 million,
excluding spreads, with increased spend in the second half.
Constant underlying earnings per share increased 5.8% and
underlying earnings per share increased 8.1%, including a positive
impact of 2.3% from currencies. We delivered free cash flow of
€6.1 billion and improved our cash conversion.
Beauty & Personal Care
Beauty & Personal Care underlying sales grew 2.6%, with 1.7%
from volume and 0.9% from price.
Deodorants delivered broad-based growth, supported by double digit
growth from Dove. We saw good performance from our
Rexona
Clinical range, with patented
anti-perspirant technology to better serve consumer needs, as well
as Dove’s
zero aluminium range. Growth in skin
cleansing was held back by price reductions as a result of lower
commodity costs. Dove’s
growth was supported by
microbiome-friendly innovations. Growth was weak in hair care with
high competitive intensity in the growth hotspot of the US. In
China there was continued pressure from local players. In skin
care, Pond’s
and Vaseline continued to perform well, with on-trend
innovations such as Pond’s Glow Up cream. We
expanded into white space markets with
our Simple brand, which is now in 30 markets, including
Turkey and the Gulf region. Oral care grew slightly and natural
variants such as charcoal, aloe and clove drove growth in
Smile. Prestige brands continued to deliver double
digit growth, with strong performances from brands such as
Dermalogica,
Hourglass and
Living
Proof. We added to our prestige
portfolio by acquiring Garancia, a French derma-cosmetic brand, and
Tatcha, a modern skincare brand rooted in classical
Kyoto rituals.
Underlying operating margin increased by 70bps reflecting lower
overheads and brand and marketing efficiencies as a result of our
zero-based-budgeting programme.
Home Care
Home Care underlying sales again grew strongly delivering 6.1%,
with 2.9% from volume and 3.1% from price.
Home and hygiene performed well, benefiting from our cleaner
choices products such as Cif surface sprays with natural cleaning ingredients.
Hand dish wash saw continued growth momentum, with good performance
from Sunlight with recycled packaging, as well as white space
launches in Brazil under Brilhante and in China under Omo. Format premiumisation, in particular liquids and
capsules, continues to be a growth driver in fabric solutions.
Laundry brand Seventh
Generation, based on renewable
plant-based ingredients, grew strongly. In fabric sensations,
performance was supported by ongoing market development driven
growth in India, where we also launched premium detergent
brand Love
& Care. In China we
successfully launched Love Home &
Planet.
Underlying operating margin increased by 150bps driven by gross
margin improvements together with lower overheads.
Foods & Refreshment
Foods and Refreshment underlying sales grew 1.5%, with volumes down
0.2% and pricing of 1.7%.
Ice cream grew, however volumes declined due to a strong comparator
from a particularly good European summer in the prior year. Growth
was supported by plant based and ‘better for you’
offerings, including Magnum vegan and Ben & Jerry’s
lighter Moophoria variants. Tea saw
price-led growth, however volumes declined due to subdued consumer
demand for black tea in developed markets. We continued to focus on
the growing segments of premium black tea, black tea in emerging
markets and fruit and herbal variants, with our premium herbal
brand Pukka performing well. In dressings, Hellmann’s
grew, with the US business returning
to growth in the second half of the year. The Hellmann’s
vegan mayonnaise variant is now on
shelves in over 20 countries while Sir Kensington’s
premium ranges of mayonnaise and salad
dressings have now more than doubled in size since the acquisition.
Price-led growth in savoury was supported by Knorr’s
portfolio in scratch cooking and the
launch of snacking ranges which address the convenience
trend. Knorr launched the “Future 50 Foods” report
in partnership with the WWF, highlighting the next generation of
plant-based foods that can boost nutritional value whilst reducing
environmental impact. Newly-acquired brand The Vegetarian Butcher
entered a partnership with Burger
King® to offer the Rebel Whopper® across 25 countries in
Europe.
Underlying operating margin decreased by 20bps driven by a
reduction in gross margin.
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FULL
YEAR OPERATIONAL REVIEW: GEOGRAPHICAL AREA
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Fourth
Quarter 2019
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Full
Year 2019
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|||||||
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(unaudited)
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Turnover
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USG*
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UVG
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UPG*
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Turnover
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USG*
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UVG
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UPG*
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Change in underlying operating margin
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€bn
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%
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%
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%
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€bn
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%
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%
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%
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bps
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Unilever
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12.6
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1.5
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1.1
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0.4
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52.0
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2.9
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1.2
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1.6
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50
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Asia/AMET/RUB
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5.8
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2.1
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1.9
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0.2
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24.1
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5.0
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2.7
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2.3
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90
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The Americas
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4.2
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2.0
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(0.4)
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2.5
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16.5
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2.4
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(0.2)
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2.6
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170
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Europe
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2.6
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(0.8)
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1.5
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(2.3)
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11.4
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(0.6)
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0.3
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(0.9)
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(170)
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Fourth
Quarter 2019
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Full
Year 2019
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||||||
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(unaudited)
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Turnover
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USG*
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UVG
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UPG*
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Turnover
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USG*
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UVG
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UPG*
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€bn
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%
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%
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%
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€bn
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%
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%
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%
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Emerging markets
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7.5
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2.8
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1.5
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1.3
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31.0
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5.3
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2.2
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3.1
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Developed markets
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5.1
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(0.6)
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0.4
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(1.0)
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21.0
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(0.5)
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(0.1)
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(0.4)
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North America
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2.4
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0.6
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(0.2)
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0.8
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9.4
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0.3
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(0.4)
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0.7
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Latin America
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1.8
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3.8
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(0.8)
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4.6
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7.1
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5.1
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-
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5.1
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* Wherever referenced in this announcement, USG and
UPG do not include price growth in excess of 26% per year in
hyperinflationary economies. See pages 6 and
29.
Asia/AMET/RUB
Underlying sales grew 5.0% with 2.7% from volume and 2.3% from
price. Turkey saw volume growth despite double digit price growth
and India performed well in a slowing market. South East Asia grew
well, driven by the Philippines, Indonesia and Vietnam. In North
Asia, our Chinese business grew high single digits, benefiting from
double digit growth in Home Care and successful innovations such as
the extension of Clear Men into skin cleansing. Africa declined due to
distributor stock resets in Ghana and Nigeria.
Underlying operating margin improved 90bps driven by an improvement
in gross margin and further helped by efficiencies in brand and
marketing investment.
The Americas
Underling sales growth in Latin America was 5.1%, driven entirely
by price, with strong price and some volume growth in our Brazilian
business which grew well in a difficult but improving environment.
Growth in Brazil was helped by innovations such as
concentrated Omo Perfect Wash in Home Care and Rexona Clinical Protection in deodorants. In Argentina,
although conditions remained hyperinflationary, the volume decline
slowed through the year. Mexico grew across all divisions with good
performance in Foods & Refreshment.
North America grew modestly with positive price growth while
volumes declined. Continued momentum in deodorants, especially
in Dove, was offset by competitive pressures in hair care
where Suave and TRESemmé
declined. In Home Care
Seventh
Generation performed well.
Underlying sales in dressings were broadly flat, helped by a return
to competitive growth in the second half.
Underlying operating margin improved by 170bps supported by a
reduction in overheads together with an improvement in gross margin
and efficiencies in brand and marketing investment.
Europe
Underlying sales growth declined 0.6% with volume growth of 0.3%
and price down 0.9%. Sales were impacted by decline in ice cream
following two years of hot summers. Central and Eastern Europe as
well as Italy grew across all divisions while France, Germany and
the UK & Ireland declined in difficult and often deflationary
retail environments.
Underlying operating margin reduced by 170bps driven by gross
margin which was impacted by negative pricing.
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ADDITIONAL
COMMENTARY ON THE FINANCIAL STATEMENTS – FULL YEAR
|
Net
finance costs increased by €19 million to €627 million
in 2019. Cost of financing net borrowings was €14 million
higher than 2018 driven by an increase in debt and longer term
financing, which was partially offset by increased finance income
due to cash held in higher interest countries. In addition,
exchange rate losses on cash balances in Zimbabwe and interest on
Brazil tax provisions were offset by a tax credit in Brazil. The
pensions financing charge was €30 million, an increase of
€5 million. The interest rate on average net debt decreased
to 2.5% from 2.6% in the prior year.
The
underlying effective tax rate was 25.5%, a small reduction versus
25.7% in the prior year. The effective tax rate was 27.9% in 2019
versus a prior year rate of 21.1% which included a significant
benefit from the disposal of our spreads business.
Joint ventures, associates and other income from non-current
investments
Net
profit from joint ventures and associates contributed €176
million compared with €185 million in 2018. The reduction was
mainly due to the Portugal portion of the profit on disposal of our
spreads business in the prior year. This was partially offset by a
growth in profits from the Pepsi Lipton joint venture. Other income
from non-current investments was zero compared to €22 million
in the prior year, driven by fair value adjustments in Unilever
Venture investments and a negative currency impact.
Earnings per share
Underlying
earnings per share increased by 8.1% to €2.55 after a
positive currency impact of 2.3%. Constant underlying earnings per
share increased by 5.8%, mainly driven by underlying sales growth
and an improved underlying operating margin. There was a negative
impact from the disposal of our spreads business of 2.8%, offset by
a 2.6% benefit from our 2018 share buyback programme.
Diluted
earnings per share were down 38.4% at €2.14. The prior year
included a €4.3 billion gain on the disposal of the spreads
business.
Free cash flow
Free
cash flow was €6.1 billion in 2019, up from €5.4
billion in the prior year. The increase was driven by higher
underlying operating profit and a €0.8 billion improvement in
changes in working capital, where the prior year was impacted by
the disposal of our spreads business.
Net debt
Closing
net debt was €23.1 billion compared to €22.6 billion as
at 31 December 2018 with a net increase related to acquisitions and
disposals of €1.1 billion and negative currency impact of
€0.8 billion, part offset by improved free cash flow. The net
debt to underlying EBITDA ratio was 1.9x as at 31 December 2019
versus 2.0x in the prior year.
Pensions
Pension
liability net of assets reduced to €0.2 billion at year end
from €0.9 billion as at 31 December 2018. The decrease was
driven by good investment returns on pension assets which were
partially offset by higher liabilities as discount rates
decreased.
Return on invested capital
Return
on invested capital was 19.2%, up from 18.1% in the prior year. The
increase was driven by higher underlying operating profit which
more than offset the impact of higher goodwill and
intangibles.
Finance and liquidity
In
2019, we issued the following bonds:
●
4
June 2019: €650 million fixed rate notes at 1.5% due June
2039 and £500 million fixed rate notes at 1.5% due July
2026
●
3
September 2019: Dual-tranche $1.35 billion bond, comprising of
fixed rate notes of $500 million at 2.6% due May 2024 with the same
terms (other than the price to public and issue date) as the $500
million 2.6% fixed rate notes issued in May 2017, and $850 million
at 2.125% due September 2029
In
February 2019 $750 million 4.8% bonds matured and were repaid. In
March 2019, $750 million 2.2% fixed
rate notes matured and were repaid.
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COMPETITION INVESTIGATIONS
|
As
previously disclosed, along with other consumer products companies
and retail customers, Unilever is involved in a number of ongoing
investigations and cases by national competition authorities,
including those within Italy, Greece and South Africa. These
proceedings and investigations are at various stages and concern a
variety of product markets. Where appropriate, provisions are made
and contingent liabilities disclosed in relation to such
matters.
Ongoing
compliance with competition laws is of key importance to Unilever.
It is Unilever’s policy to co-operate fully with competition
authorities whenever questions or issues arise. In addition the
Group continues to reinforce and enhance its internal competition
law training and compliance programme on an ongoing
basis.
| NON-GAAP MEASURES |
Certain
discussions and analyses set out in this announcement 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,
ability to retire debt and invest in new business opportunities.
Our management uses these financial measures, along with the most
directly comparable GAAP financial measures, in evaluating our
operating performance and value creation. Non-GAAP financial
measures should not be considered in isolation from, or as a
substitute for, financial information presented in compliance with
GAAP. Wherever appropriate and practical, we provide
reconciliations to relevant GAAP measures.
Unilever
uses ‘constant rate’, and ‘underlying’
measures primarily for internal performance analysis and targeting
purposes. We present certain items, percentages and movements,
using constant exchange rates, which exclude the impact of
fluctuations in foreign currency exchange rates. We calculate
constant currency values by translating both the current and the
prior period local currency amounts using the prior year average
exchange rates into euro, except for the local currency of entities
that operate in hyperinflationary economies. These currencies are
translated into euros using the prior year closing exchange rate
before the application of IAS 29. The table below shows exchange
rate movements in our key markets.
|
|
Annual
Average rate in 2019
|
Annual
Average rate in 2018
|
|
Brazilian Real (€1 = BRL)
|
4.367
|
4.282
|
|
Chinese Yuan (€1 = CNY)
|
7.725
|
7.807
|
|
Indian Rupee (€1 = INR)
|
78.812
|
80.730
|
|
Indonesia Rupiah (€1 = IDR)
|
15863
|
16831
|
|
Philippine Peso (€1 = PHP)
|
58.112
|
62.379
|
|
UK Pound Sterling (€1 = GBP)
|
0.880
|
0.884
|
|
US Dollar (€1 = US $)
|
1.120
|
1.185
|
MESURES (continued)NON-GAAP MEASURES (continued)
Underlying sales growth (USG)
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.
Previously,
USG was calculated on a different basis. See page 29 for more
details.
The
reconciliation of changes in the GAAP measure turnover to USG is
provided in notes 3 and 4.
Underlying price growth (UPG)
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 measures
and the related turnover GAAP measure are set out in notes 3 and
4.
Underlying volume growth (UVG)
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. The measures
and the related turnover GAAP measure are set out in notes 3 and
4.
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 one-off items within operating profit.
●
Non-underlying items not in operating profit
but within net profit are: significant and unusual items in
net finance cost, monetary gain/(loss) arising from
hyperinflationary economies, share of profit/(loss) of joint
ventures and associates and taxation.
●
Non-underlying items are both
non-underlying items within operating profit and those
non-underlying items not in operating profit but within net
profit.
Underlying operating profit (UOP) and underlying operating margin
(UOM)
Underlying operating profit and underlying operating margin mean
operating profit and operating margin before the impact of
non-underlying items within operating profit. Underlying operating
profit represents our measure of segment profit or loss as it is
the primary measure used for making decisions about allocating
resources and assessing performance of the segments. The
reconciliation of operating profit to underlying operating profit
is as follows:
|
€ million
|
Full
Year
|
|
|
(unaudited)
|
2019
|
2018
Restated(a)
|
|
Operating profit
|
8,708
|
12,639
|
|
Non-underlying items within operating profit (see note
2)
|
1,239
|
(3,176)
|
|
Underlying operating profit
|
9,947
|
9,463
|
|
Turnover
|
51,980
|
50,982
|
|
Operating margin (%)
|
16.8%
|
24.8%
|
|
Underlying operating margin (%)
|
19.1%
|
18.6%
|
(a) Restated following adoption of IFRS 16. See note 1 and
note 9.
Underlying earnings before interest, taxation, depreciation and
amortisation (UEBITDA)
Underlying
earnings before interest, taxation, depreciation and amortisation
means operating profit before the impact of depreciation,
amortisation and non-underlying items within operating profit. We
use UEBITDA in assessing our leverage level, which is expressed as
net debt / UEBITDA. The reconciliation of operating profit to
UEBITDA is as follows:
|
€ million
|
Full
Year
|
|
|
(unaudited)
|
2019
|
2018
Restated(a)
|
|
Operating profit
|
8,708
|
12,639
|
|
Depreciation and amortisation
|
1,964
|
2,008
|
|
Non-underlying items within operating profit
|
1,239
|
(3,176)
|
|
Underlying earnings before interest, taxes, depreciation and
amortisation (UEBITDA)
|
11,911
|
11,471
|
(a) Restated following adoption of IFRS 16. See note 1 and
note 9.
Underlying effective tax rate
The
underlying effective tax rate is calculated by dividing taxation
excluding the tax impact of non-underlying items by profit before
tax excluding the impact of non-underlying items and share of net
profit/(loss) of joint ventures and associates. This measure
reflects the underlying tax rate in relation to profit before tax
excluding non-underlying items before tax and share of net
profit/(loss) of joint ventures and associates. Tax impact on
non-underlying items within operating profit is the sum of the tax
on each non-underlying item, based on the applicable country tax
rates and tax treatment. This is shown in the following table:
MEASURES
(continued)
|
€ million
|
Full
Year
|
|
|
(unaudited)
|
2019
|
2018
Restated(a)
|
|
Taxation
|
2,263
|
2,572
|
|
Tax impact of:
|
|
|
|
Non-underlying items within operating
profit(b)
|
309
|
(259)
|
|
Non-underlying items not in operating profit but
within net profit(b)
|
(196)
|
(29)
|
|
Taxation before tax impact of non-underlying
items
|
2,376
|
2,284
|
|
Profit before taxation
|
8,289
|
12,360
|
|
Non-underlying items within operating profit before
tax(b)
|
1,239
|
(3,176)
|
|
Non-underlying items not in operating profit but within net
profit before tax(c)
|
(32)
|
(122)
|
|
Share of net profit/(loss) of joint ventures and
associates
|
(176)
|
(185)
|
|
Profit before tax excluding non-underlying items before tax and
share of net profit/(loss) of joint ventures and
associates
|
9,320
|
8,877
|
|
Underlying effective tax rate
|
25.5%
|
25.7%
|
(a)
Restated following
adoption of IFRS 16. See note 1 and note 9.
(b)
See
note 2.
(c)
Excludes €3 million (2018: €32 million) gain on
disposal of spreads business by the joint venture in Portugal which
is included in the share of net profit/(loss) of joint ventures and
associates line. Including the gain, total non-underlying items not
in operating profit but within net profit before tax is €35
million (2018: €154 million). See note 2.
Underlying earnings per share (EPS)
Underlying
earnings per share (underlying EPS) is calculated as underlying
profit attributable to shareholders’ equity divided by the
diluted combined average number of share units. In calculating
underlying profit attributable to shareholders’ equity, net
profit attributable to shareholders’ equity is adjusted to
eliminate the post-tax impact of non-underlying items. This measure
reflects the underlying earnings for each share unit of the Group.
Refer to note 6 on page 21 for reconciliation of net profit
attributable to shareholders’ equity to underlying profit
attributable to shareholders’ equity.
Constant
underlying EPS
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 share unit of the Group in constant exchange
rates.
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:
|
€ million
|
Full
Year
|
|
|
(unaudited)
|
2019
|
2018
Restated(a)
|
|
Underlying profit attributable to shareholders’ equity
(see note 6)
|
6,688
|
6,345
|
|
Impact of translation from current to constant exchange rates
and translational
|
|
|
|
hedges
|
13
|
46
|
|
Impact of price growth in excess of 26% per year in
hyperinflationary economies
|
(108)
|
(10)
|
|
Constant underlying earnings attributable to
shareholders’ equity
|
6,593
|
6,381
|
|
Diluted combined average number of share units (millions of
units)
|
2,626.7
|
2,694.8
|
|
Constant underlying EPS (€)
|
2.51
|
2.37
|
(a) Restated following adoption of IFRS 16. See note 1 and
note 9.
Free cash flow (FCF)
Within
the Unilever Group, 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 net profit to FCF is as follows:
|
€ million
|
Full
Year
|
|
|
(unaudited)
|
2019
|
2018
Restated(a)
|
|
Net profit
|
6,026
|
9,788
|
|
Taxation
|
2,263
|
2,572
|
|
Share
of net profit of joint ventures/associates and other income from
non-current investments
|
(176)
|
(207)
|
|
Net monetary gain arising from hyperinflationary
economies
|
(32)
|
(122)
|
|
Net finance costs
|
627
|
608
|
|
Operating profit
|
8,708
|
12,639
|
|
Depreciation, amortisation and impairment
|
1,982
|
2,216
|
|
Changes in working capital
|
(9)
|
(793)
|
|
Pensions and similar obligations less payments
|
(260)
|
(128)
|
|
Provisions less payments
|
7
|
55
|
|
Elimination of (profits)/losses on disposals
|
60
|
(4,313)
|
|
Non-cash charge for share-based compensation
|
151
|
196
|
|
Other adjustments
|
2
|
(260)
|
|
Cash flow from operating activities
|
10,641
|
9,612
|
|
Income tax paid
|
(2,532)
|
(2,294)
|
|
Net capital expenditure
|
(1,429)
|
(1,424)
|
|
Net interest paid
|
(548)
|
(461)
|
|
Free cash flow
|
6,132
|
5,433
|
|
Net cash flow (used in)/from investing
activities
|
(2,237)
|
4,644
|
|
Net cash flow (used in)/from financing
activities
|
(4,667)
|
(12,113)
|
(a) Restated following adoption of IFRS 16. See note 1 and
note 9.
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.
Prior to this quarter, all financial asset derivatives were current
financial assets and so reduced net debt. Following a recent review
we now also have financial asset derivatives that are non-current
in nature. As all of these derivatives relate to financial
liabilities, we continue to exclude them for the purposes of our
net debt calculation and have expanded our definition to reflect
this.
Net debt is now 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.
The reconciliation of total financial liabilities to net debt is as
follows:
|
€ million
|
As
at
|
As
at
|
|
|
31
December
|
31
December
|
|
(unaudited)
|
2019
|
2018
Restated(a)
|
|
Total financial liabilities
|
(28,257)
|
(26,738)
|
|
Current
financial liabilities
|
(4,691)
|
(3,613)
|
|
Non-current
financial liabilities
|
(23,566)
|
(23,125)
|
|
Cash and cash equivalents as per balance sheet
|
4,185
|
3,230
|
|
Cash
and cash equivalents as per cash flow statement
|
4,116
|
3,090
|
|
Add
bank overdrafts deducted therein
|
69
|
140
|
|
Less
cash and cash equivalents classified as held for sale
|
-
|
-
|
|
Other current financial assets
|
907
|
874
|
|
Non-current financial asset derivatives that relate to financial
liabilities
|
114
|
-
|
|
Net debt
|
(23,051)
|
(22,634)
|
(a) Restated following adoption of IFRS 16. See note 1 and
note 9.
Return on invested capital (ROIC)
Return
on invested capital (ROIC) is a measure of the return generated on
capital invested by the Group. The measure provides a guide rail
for long-term value creation and encourages compounding
reinvestment within the business and discipline around acquisitions
with low returns and long payback. ROIC is calculated as underlying
operating profit after tax divided by the annual average of:
goodwill, intangible assets, property, plant and equipment, net
assets held for sale, inventories, trade and other current
receivables, and trade payables and other current
liabilities.
|
€ million
|
Full
Year
|
|
|
(unaudited)
|
2019
|
2018
Restated(a)
|
|
Underlying operating profit before
tax(b)
|
9,947
|
9,463
|
|
Tax on underlying operating
profit(c)
|
(2,536)
|
(2,432)
|
|
Underlying operating profit after tax
|
7,411
|
7,031
|
|
Goodwill
|
18,067
|
17,341
|
|
Intangible
assets
|
12,962
|
12,152
|
|
Property,
plant and equipment
|
12,062
|
12,088
|
|
Net
assets held for sale
|
81
|
108
|
|
Inventories
|
4,164
|
4,301
|
|
Trade
and other current receivables
|
6,695
|
6,482
|
|
Trade
payables and other current liabilities
|
(14,768)
|
(14,457)
|
|
Period-end
invested capital
|
39,263
|
38,015
|
|
Average invested capital for the period
|
38,639
|
38,749
|
|
Return on invested capital
|
19.2%
|
18.1%
|
(a) Restated following adoption of IFRS 16. See note 1 and
note 9.
(b) See reconciliation of operating profit to
underlying operating profit on page 7.
(c) Tax
on underlying operating profit is calculated as underlying
operating profit before tax multiplied by the underlying effective
tax rate of 25.5% (2018: 25.7%) which is shown on page
8.
|
CAUTIONARY
STATEMENT
|
This
announcement may contain forward-looking statements, including
‘forward-looking statements’ within the meaning of the
United States Private Securities Litigation Reform Act of 1995.
Words such as ‘will’, ‘aim’,
‘expects’, ‘anticipates’,
‘intends’, ‘looks’, ‘believes’,
‘vision’, or the negative of these terms and other
similar expressions of future performance or results, and their
negatives, are intended to identify such forward-looking
statements. These forward-looking statements are based upon current
expectations and assumptions regarding anticipated developments and
other factors affecting the Unilever Group (the
‘Group’). They are not historical facts, nor are they
guarantees of future performance.
Because
these forward-looking statements involve risks and uncertainties,
there are important factors that could cause actual results to
differ materially from those expressed or implied by these
forward-looking statements. Among other risks and uncertainties,
the material or principal factors which could cause actual results
to differ materially are: Unilever’s global brands not
meeting consumer preferences; Unilever’s ability to innovate
and remain competitive; Unilever’s investment choices in its
portfolio management; inability to find sustainable solutions to
support long-term growth including to plastic packaging; the effect
of climate change on Unilever’s business; significant changes
or deterioration in customer relationships; the recruitment and
retention of talented employees; disruptions in our supply chain
and distribution; increases or volatility in the cost of raw
materials and commodities; the production of safe and high quality
products; secure and reliable IT infrastructure; execution of
acquisitions, divestitures and business transformation projects;
economic, social and political risks and natural disasters;
financial risks; failure to meet high and ethical standards; and
managing regulatory, tax and legal matters. These forward looking
statements speak only as of the date of this announcement. Except
as required by any applicable law or regulation, the Group
expressly disclaims any obligation or undertaking to release
publicly any updates or revisions to any forward-looking statements
contained herein to reflect any change in the Group’s
expectations with regard thereto or any change in events,
conditions or circumstances on which any such statement is based.
Further details of potential risks and uncertainties affecting the
Group are described in the Group’s filings with the London
Stock Exchange, Euronext Amsterdam and the US Securities and
Exchange Commission, including in the Annual Report on Form 20-F
2018 and the Unilever Annual Report and Accounts 2018.
|
ENQUIRIES
|
|
Media: Media Relations Team
|
Investors: Investor Relations Team
|
|
|||
|
UK
or
NL
or
|
+44 78
2527 3767
+44 77
7999 9683
+31 10
217 4844
+31 61
500 8293
|
lucila.zambrano@unilever.com
JSibun@tulchangroup.com
els-de.bruin@unilever.com
Fleur-van.Bruggen@unilever.com
|
+44 20
7822 6830
|
investor.relations@unilever.com
|
|
There
will be a web cast of the results presentation available
at:
www.unilever.com/investor-relations/results-and-presentations/latest-results
|
INCOME
STATEMENT
|
(unaudited)
|
€ million
|
Full
Year
|
|||
|
|
2019
|
2018
Restated(a)
|
Increase/
|
|
|
(Decrease)
|
||||
|
Current
|
Constant
|
|||
|
rates
|
rates
|
|||
|
|
|
|
|
|
|
Turnover
|
51,980
|
50,982
|
2.0%
|
2.7%
|
|
|
|
|
|
|
|
Operating profit
|
8,708
|
12,639
|
(31.1)%
|
(31.4)%
|
|
|
|
|
|
|
|
Which
includes non-underlying items credits/(charges) of
|
(1,239)
|
3,176
|
|
|
|
|
|
|
|
|
|
Net finance costs
|
(627)
|
(608)
|
|
|
|
Finance
income
|
224
|
135
|
|
|
|
Finance
costs
|
(821)
|
(718)
|
|
|
|
Pensions
and similar obligations
|
(30)
|
(25)
|
|
|
|
|
|
|
|
|
|
Net monetary gain/(loss) arising from hyperinflationary
economies
|
32
|
122
|
|
|
|
|
|
|
|
|
|
Share of net profit/(loss) of joint ventures and
associates
|
176
|
185
|
|
|
|
Which
includes non-underlying item credits/(charges) of
|
3
|
32
|
|
|
|
Other income/(loss) from non-current investments and
associates
|
-
|
22
|
|
|
|
|
|
|
|
|
|
Profit before taxation
|
8,289
|
12,360
|
(32.9)%
|
(32.5)%
|
|
|
|
|
|
|
|
Taxation
|
(2,263)
|
(2,572)
|
|
|
|
Which
includes tax impact of non-underlying items of
|
113
|
(288)
|
|
|
|
|
|
|
|
|
|
Net profit
|
6,026
|
9,788
|
(38.4)%
|
(37.9)%
|
|
|
|
|
|
|
|
Attributable to:
|
|
|
|
|
|
Non-controlling
interests
|
401
|
419
|
|
|
|
Shareholders’
equity
|
5,625
|
9,369
|
(40.0)%
|
(39.3)%
|
|
Combined
earnings per share
|
|
|
|
|
|
Basic earnings per share (euros)
|
2.15
|
3.49
|
(38.4)%
|
(37.7)%
|
|
Diluted earnings per share (euros)
|
2.14
|
3.48
|
(38.4)%
|
(37.7)%
|
(a) Restated following adoption of IFRS 16. See note 1 and
note 9.
|
STATEMENT OF COMPREHENSIVE INCOME
|
(unaudited)
|
€ million
|
Full
Year
|
|
|
|
2019
|
2018
Restated(a)
|
|
|
|
|
|
Net profit
|
6,026
|
9,788
|
|
|
|
|
|
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
|
29
|
51
|
|
Remeasurement
of defined benefit pension plans
|
353
|
(328)
|
|
Items that may be reclassified subsequently to profit or
loss, net of tax:
|
|
|
|
Gains/(losses)
on cash flow hedges
|
176
|
(55)
|
|
Currency
retranslation gains/(losses)
|
(15)
|
(839)
|
|
|
|
|
|
Total comprehensive income
|
6,569
|
8,617
|
|
|
|
|
|
Attributable to:
|
|
|
|
Non-controlling
interests
|
407
|
407
|
|
Shareholders’
equity
|
6,162
|
8,210
|
(a) Restated following
adoption of IFRS 16. See note 1 and note 9.
|
STATEMENT
OF CHANGES IN EQUITY
|
(unaudited)
|
€ million
|
Called
up share capital
|
Share
premium account
|
Other
reserves
|
Retained
profit
|
Total
|
Non-
controlling interest
|
Total
equity
|
|
1
January - 2019
|
|
|
|
|
|
|
|
|
1
January 2019 as previously reported
|
464
|
129
|
(15,286)
|
26,265
|
11,572
|
720
|
12,292
|
|
IFRS 16
restatement(a)
|
-
|
-
|
68
|
(243)
|
(175)
|
-
|
(175)
|
|
Impact
of adopting IFRIC 23(a)
|
-
|
-
|
-
|
(38)
|
(38)
|
-
|
(38)
|
|
1
January 2019 after restatement
|
464
|
129
|
(15,218)
|
25,984
|
11,359
|
720
|
12,079
|
|
Profit
or loss for the period
|
-
|
-
|
-
|
5,625
|
5,625
|
401
|
6,026
|
|
Other
comprehensive income, net of tax:
|
|
|
|
|
|
|
|
|
Gains/(losses)
on:
|
|
|
|
|
|
|
|
|
Equity
instruments
|
-
|
-
|
25
|
-
|
25
|
4
|
29
|
|
Cash
flow hedges
|
-
|
-
|
176
|
-
|
176
|
-
|
176
|
|
Remeasurements of
defined benefit pension plans
|
-
|
-
|
-
|
352
|
352
|
1
|
353
|
|
Currency
retranslation gains/(losses)
|
-
|
-
|
(18)
|
2
|
(16)
|
1
|
(15)
|
|
Total
comprehensive income
|
-
|
-
|
183
|
5,979
|
6,162
|
407
|
6,569
|
|
Dividends
on ordinary capital
|
-
|
-
|
-
|
(4,223)
|
(4,223)
|
-
|
(4,223)
|
|
Cancellation
of treasury shares(b)
|
(44)
|
-
|
9,416
|
(9,372)
|
-
|
-
|
-
|
|
Other
movements in treasury shares(c)
|
-
|
-
|
64
|
(231)
|
(167)
|
-
|
(167)
|
|
Share-based
payment credit(d)
|
-
|
-
|
-
|
151
|
151
|
-
|
151
|
|
Dividends
paid to non-controlling interests
|
-
|
-
|
-
|
-
|
-
|
(435)
|
(435)
|
|
Currency
retranslation gains/(losses) net of tax
|
-
|
5
|
-
|
-
|
5
|
-
|
5
|
|
Hedging
gain/(loss) transferred to non-financial assets
|
-
|
-
|
32
|
-
|
32
|
-
|
32
|
|
Other
movements in equity
|
-
|
-
|
(51)
|
(76)
|
(127)
|
2
|
(125)
|
|
31 December 2019
|
420
|
134
|
(5,574)
|
18,212
|
13,192
|
694
|
13,886
|
|
1
January - 2018
|
|
|
|
|
|
|
|
|
1
January 2018 as previously reported
|
484
|
130
|
(13,633)
|
27,041
|
14,022
|
758
|
14,780
|
|
IFRS 16
restatement(a)
|
-
|
-
|
46
|
(235)
|
(189)
|
-
|
(189)
|
|
1
January 2018 after restatement
|
484
|
130
|
(13,587)
|
26,806
|
13,833
|
758
|
14,591
|
|
Profit
or loss for the period
|
-
|
-
|
-
|
9,369
|
9,369
|
419
|
9,788
|
|
Other
comprehensive income, net of tax:
|
|
|
|
|
|
|
|
|
Gains/(losses)
on:
|
|
|
|
|
|
|
|
|
Equity
instruments
|
-
|
-
|
51
|
-
|
51
|
-
|
51
|
|
Cash
flow hedges
|
-
|
-
|
(56)
|
-
|
(56)
|
1
|
(55)
|
|
Remeasurements of
defined benefit pension plans
|
-
|
-
|
-
|
(330)
|
(330)
|
2
|
(328)
|
|
Currency
retranslation gains/(losses)
|
-
|
-
|
(814)
|
(10)
|
(824)
|
(15)
|
(839)
|
|
Total
comprehensive income
|
-
|
-
|
(819)
|
9,029
|
8,210
|
407
|
8,617
|
|
Dividends
on ordinary capital
|
-
|
-
|
-
|
(4,081)
|
(4,081)
|
-
|
(4,081)
|
|
Repurchase
of shares(e)
|
-
|
-
|
(6,020)
|
-
|
(6,020)
|
-
|
(6,020)
|
|
Cancellation
of treasury shares (b)
|
(20)
|
-
|
5,069
|
(5,049)
|
-
|
-
|
-
|
|
Other
movements in treasury shares(c)
|
-
|
-
|
(8)
|
(245)
|
(253)
|
-
|
(253)
|
|
Share-based
payment credit(d)
|
-
|
-
|
-
|
196
|
196
|
-
|
196
|
|
Dividends
paid to non-controlling interests
|
-
|
-
|
-
|
-
|
-
|
(342)
|
(342)
|
|
Currency
retranslation gains/(losses) net of tax
|
-
|
(1)
|
-
|
-
|
(1)
|
-
|
(1)
|
|
Hedging
gain/(loss) transferred to non-financial assets
|
-
|
-
|
71
|
-
|
71
|
-
|
71
|
|
Other
movements in equity(f)
|
-
|
-
|
76
|
(634)
|
(558)
|
(103)
|
(661)
|
|
31 December 2018
|
464
|
129
|
(15,218)
|
26,022
|
11,397
|
720
|
12,117
|
(a)
For more details
refer note 1 and note 9.
(b)
During 2019
254,012,896 (2018: nil) NV ordinary shares and 18,660,634 (2018:
122,965,077) PLC ordinary shares were cancelled. The amount paid to
repurchase these shares was initially recognised in other reserves
and is transferred to retained profit on cancellation.
(c)
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.
(d)
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.
(e)
Repurchase of
shares reflects the cost of acquiring ordinary shares as part of
the share buyback programmes announced on 19 April
2018.
(f)
2018 includes a
€662 million paid for purchase of the non-controlling
interest in Unilever South Africa from Remgro.
|
BALANCE
SHEET
|
(unaudited)
|
€ million
|
As
at
31
December
2019
|
As
at
31
December
2018
Restated(a)
|
As
at
1
January
2018
Restated(a)
|
|
|
|||
|
Non-current assets
|
|
|
|
|
Goodwill
|
18,067
|
17,341
|
16,881
|
|
Intangible assets
|
12,962
|
12,152
|
11,520
|
|
Property, plant and equipment
|
12,062
|
12,088
|
12,270
|
|
Pension asset for funded schemes in surplus
|
2,422
|
1,728
|
2,173
|
|
Deferred tax assets
|
1,336
|
1,152
|
1,118
|
|
Financial assets
|
874
|
642
|
675
|
|
Other non-current assets
|
653
|
530
|
441
|
|
|
48,376
|
45,633
|
45,078
|
|
Current assets
|
|
|
|
|
Inventories
|
4,164
|
4,301
|
3,962
|
|
Trade and other current receivables
|
6,695
|
6,482
|
5,219
|
|
Current tax assets
|
397
|
472
|
488
|
|
Cash and cash equivalents
|
4,185
|
3,230
|
3,317
|
|
Other financial assets
|
907
|
874
|
770
|
|
Assets held for sale
|
82
|
119
|
3,224
|
|
|
16,430
|
15,478
|
16,980
|
|
|
|
|
|
|
Total assets
|
64,806
|
61,111
|
62,058
|
|
Current liabilities
|
|
|
|
|
Financial liabilities
|
4,691
|
3,613
|
8,378
|
|
Trade payables and other current liabilities
|
14,768
|
14,457
|
13,426
|
|
Current tax liabilities
|
898
|
1,445
|
1,088
|
|
Provisions
|
620
|
624
|
525
|
|
Liabilities held for sale
|
1
|
11
|
170
|
|
|
20,978
|
20,150
|
23,587
|
|
Non-current liabilities
|
|
|
|
|
Financial liabilities
|
23,566
|
23,125
|
18,039
|
|
Non-current tax liabilities
|
182
|
174
|
118
|
|
Pensions and post-retirement healthcare
liabilities:
|
|
|
|
|
Funded schemes in
deficit
|
1,157
|
1,209
|
1,225
|
|
Unfunded
schemes
|
1,461
|
1,393
|
1,509
|
|
Provisions
|
664
|
697
|
794
|
|
Deferred tax liabilities
|
2,573
|
1,900
|
1,888
|
|
Other non-current liabilities
|
339
|
346
|
700
|
|
|
29,942
|
28,844
|
24,273
|
|
|
|
|
|
|
Total liabilities
|
50,920
|
48,994
|
47,860
|
|
Equity
|
|
|
|
|
Shareholders’ equity
|
13,192
|
11,397
|
13,440
|
|
Non-controlling interests
|
694
|
720
|
758
|
|
Total equity
|
13,886
|
12,117
|
14,198
|
|
|
|
|
|
|
Total liabilities and equity
|
64,806
|
61,111
|
62,058
|
(a) Restated following adoption of IFRS 16. See note 1
and note 9.
|
CASH
FLOW STATEMENT
|
(unaudited)
|
€ million
|
Full
Year
|
|
|
|
2019
|
2018
Restated(a)
|
|
Net profit
|
6,026
|
9,788
|
|
Taxation
|
2,263
|
2,572
|
|
Share
of net profit of joint ventures/associates and other (income)/loss
from non-current investments and associates
|
(176)
|
(207)
|
|
Net monetary (gain)/loss arising from hyperinflationary
economies
|
(32)
|
(122)
|
|
Net finance costs
|
627
|
608
|
|
Operating profit
|
8,708
|
12,639
|
|
Depreciation, amortisation and impairment
|
1,982
|
2,216
|
|
Changes in working capital
|
(9)
|
(793)
|
|
Pensions and similar obligations less payments
|
(260)
|
(128)
|
|
Provisions less payments
|
7
|
55
|
|
Elimination of (profits)/losses on disposals
|
60
|
(4,313)
|
|
Non-cash charge for share-based compensation
|
151
|
196
|
|
Other adjustments(b)
|
2
|
(260)
|
|
Cash flow from operating activities
|
10,641
|
9,612
|
|
Income tax paid
|
(2,532)
|
(2,294)
|
|
Net cash flow from operating activities
|
8,109
|
7,318
|
|
Interest received
|
146
|
110
|
|
Net capital expenditure
|
(1,429)
|
(1,424)
|
|
Other acquisitions and disposals
|
(945)
|
5,757
|
|
Other investing activities
|
(9)
|
201
|
|
|
|
|
|
Net cash flow (used in)/from investing
activities
|
(2,237)
|
4,644
|
|
Dividends paid on ordinary share capital
|
(4,209)
|
(4,066)
|
|
Interest paid
|
(694)
|
(571)
|
|
Change in financial liabilities
|
901
|
(506)
|
|
Repurchase of shares
|
-
|
(6,020)
|
|
Other movements on treasury shares
|
(201)
|
(257)
|
|
Other financing activities
|
(464)
|
(693)
|
|
|
|
|
|
Net cash flow (used in)/from financing
activities
|
(4,667)
|
(12,113)
|
|
|
|
|
|
|
|
|
|
Net increase/(decrease) in cash and cash
equivalents
|
1,205
|
(151)
|
|
Cash and cash equivalents at the beginning of the
period
|
3,090
|
3,169
|
|
|
|
|
|
Effect of foreign exchange rate changes
|
(179)
|
72
|
|
|
|
|
|
Cash and cash equivalents at the end of the
period
|
4,116
|
3,090
|
(a)Restated following adoption of IFRS 16. See note 1 and
note 9.
(b) 2018 includes a non-cash credit of €277
million from early settlement of contingent consideration relating
to Blueair.
| NOTES TO THE CONDENSED FINANCIAL STATEMENTS |
(unaudited)
| 1 ACCOUNTING INFORMATION AND POLICIES |
Except
as set out below the accounting policies and methods of computation
are consistent with the year ended 31 December 2018. The condensed
preliminary financial statements are based on International
Financial Reporting Standards (IFRS) as adopted by the EU and IFRS
as issued by the International Accounting Standards
Board.
The
condensed financial statements are shown at current exchange rates,
while percentage year-on-year changes are shown at both current and
constant exchange rates to facilitate comparison. The income
statement on page 13, the statement of comprehensive income on page
13, the statement of changes in equity on page 14 and the cash flow
statement on page 16 are translated at exchange rates current in
each period. The balance sheet on page 15 is translated at
period-end rates of exchange.
The
condensed financial statements attached do not constitute the full
financial statements within the meaning of Section 434 of the UK
Companies Act 2006, which will be finalised and delivered to the
Registrar of Companies in due course. Full accounts for Unilever
for the year ended 31 December 2018 have been delivered to the
Registrar of Companies; the auditors’ reports on these
accounts were unqualified, did not include a reference to any
matters by way of emphasis and did not contain a statement under
Section 498 (2) or Section 498 (3) of the UK Companies Act
2006.
New accounting standards
IFRS 16
‘Leases’
The
Group has adopted IFRS 16 which replaced existing lease guidance
including IAS 17 ‘Leases’, IFRIC 4 ‘Determining
whether an arrangement contains a lease’, SIC-15
‘Operating leases - incentives’ and SIC-27
‘Evaluating the substance of transactions involving the legal
form of a lease’. The standard changes the recognition,
measurement, presentation and disclosure of leases. At the
commencement of a lease, lease payments (lease liability) and an
asset representing the right to use the asset during the lease term
(right-of-use asset) are recorded on the balance sheet. The
right-of-use asset is then depreciated on a straight-line basis and
interest expense recognised on the lease liability in the income
statement over the lease term.
The
standard has no impact on the actual cash flows of the group.
However, as the standard requires the capitalisation, and
subsequent depreciation of costs that are expensed as paid, the
disclosures of cash flows within the cash flow statement are
impacted. The amounts previously expensed as operating cash
outflows are instead capitalised and presented as financing cash
outflows. The Group has restated 2018 numbers for the impact of
IFRS 16. Refer to note 9 for the restatement impact of IFRS 16 on
the financial statements and segment information.
IFRIC 23
‘Uncertainty
Over Income Tax Treatments’
On 1
January 2019 the Group adopted IFRIC 23. The Interpretation
addresses the accounting for income taxes when tax treatments
involve uncertainty that affects the application of IAS 12 Income
Taxes.
The Group applies judgement in identifying uncertainties over
income tax treatments and has considered its uncertain tax
provisions in line with this new criteria. The Group has elected to
recognise the cumulative impact within opening retained
earnings.
| 2 SIGNIFICANT ITEMS WITHIN THE INCOME STATEMENT |
Non-underlying items
Non-underlying
items are costs and revenues relating to gains and losses on
business disposals, acquisition and disposal-related costs,
restructuring costs, impairments and one-off items within operating
profit, and other significant and unusual items within net profit
but outside of operating profit, which we collectively term
non-underlying items, due to their nature and/or frequency of
occurrence. These items are significant in terms of nature and/or
amount and are relevant to an understanding of our financial
performance.
Restructuring
costs are charges associated with activities planned by management
that significantly change either the scope of the business or the
manner in which it is conducted.
|
€ million
|
Full
Year
|
|
|
|
2019
|
2018
|
|
Acquisition and disposal-related
costs(a)
|
(132)
|
76
|
|
Gain/(loss) on disposal of group
companies(b)
|
70
|
4,331
|
|
Restructuring costs(c)
|
(1,159)
|
(914)
|
|
Impairments(d)
|
(18)
|
(208)
|
|
One-off items(e)
|
-
|
(109)
|
|
Non-underlying
items within operating profit before tax
|
(1,239)
|
3,176
|
|
|
|
|
|
Tax
on non-underlying items within operating profit
|
309
|
(259)
|
|
Non-underlying
items within operating profit after tax
|
(930)
|
2,917
|
|
|
|
|
|
Share
of gain on disposal of spreads business in Portugal JV
|
3
|
32
|
|
Net
monetary gain arising from hyperinflationary economies
|
32
|
122
|
|
Non-underlying
items not in operating profit but within net profit before
tax
|
35
|
154
|
|
|
|
|
|
Tax
impact of non-underlying items not in operating profit but within
net profit:
|
|
|
|
Impact
of US tax reform
|
-
|
(29)
|
|
Taxes
related to the reorganisation of our European business
|
(175)
|
-
|
|
Hyperinflation
adjustment for Argentina deferred tax
|
(21)
|
-
|
|
Non-underlying
items not in operating profit but within net profit after
tax
|
(161)
|
125
|
|
|
|
|
|
Non-underlying items after tax(f)
|
(1,091)
|
3,042
|
|
|
|
|
|
Attributable to:
|
|
|
|
Non-controlling
interests
|
(28)
|
18
|
|
Shareholders’
equity
|
(1,063)
|
3,024
|
(a)
2018
includes a credit of €277 million from early settlement of
contingent consideration relating to Blueair.
(b)
2019
includes a gain of €57 million relating to the disposal of
Alsa. 2018 gain of €4,331 million relates to disposals of our
spreads businesses.
(c)
Restructuring
costs are comprised of various supply chain optimisation projects
and organisational change programmes across markets all of which
have been further accelerated during 2019.
(d)
2019
includes a charge of €18 million relating to an impairment of
goodwill for a local business classified to held for sale. 2018
includes a charge of €208 million relating to impairment of
Blueair intangible asset.
(e)
2018
includes a charge of €98 million for litigation matters
comprised of €48 million for UK pension obligations and
€50 million for legal cases in relation to investigations by
national competition authorities including one within
Greece.
(f)
Non-underlying
items after tax is calculated as non-underlying items within
operating profit after tax plus non-underlying items not in
operating profit but within net profit after tax.
|
3
SEGMENT INFORMATION – DIVISIONS
|
|
Fourth Quarter
|
Beauty
&
Personal
Care
|
Home
Care
|
Foods
& Refreshment
|
Total
|
|
Turnover (€ million)
|
|
|
|
|
|
2018
|
5,353
|
2,589
|
4,208
|
12,150
|
|
2019
|
5,588
|
2,724
|
4,326
|
12,638
|
|
Change
(%)
|
4.4
|
5.2
|
2.8
|
4.0
|
|
Impact of:
|
|
|
|
|
|
Acquisitions
(%)
|
1.4
|
0.5
|
0.4
|
0.8
|
|
Disposals
(%)
|
-
|
-
|
(0.8)
|
(0.3)
|
|
Currency-related items (%), of which:
|
2.5
|
1.0
|
1.8
|
2.0
|
|
Exchange rates changes (%)
|
1.7
|
0.4
|
(8.9)
|
(2.4)
|
|
Extreme price growth in hyperinflationary markets* (%)
|
0.8
|
0.6
|
11.7
|
4.5
|
|
Underlying sales
growth (%)
|
0.5
|
3.7
|
1.4
|
1.5
|
|
Price* (%)
|
(0.8)
|
0.7
|
1.9
|
0.4
|
|
Volume
(%)
|
1.3
|
3.0
|
(0.5)
|
1.1
|
|
Full Year
|
Beauty
&
Personal
Care
|
Home
Care
|
Foods
& Refreshment
|
Total
|
|
Turnover (€ million)
|
|
|
|
|
|
2018
|
20,624
|
10,131
|
20,227
|
50,982
|
|
2019
|
21,868
|
10,825
|
19,287
|
51,980
|
|
Change
(%)
|
6.0
|
6.9
|
(4.6)
|
2.0
|
|
Impact of:
|
|
|
|
|
|
Acquisitions
(%)
|
0.9
|
0.3
|
0.6
|
0.7
|
|
Disposals
(%)
|
-
|
-
|
(7.5)
|
(3.0)
|
|
Currency-related items (%), of which:
|
2.4
|
0.4
|
1.0
|
1.5
|
|
Exchange rate changes (%)
|
1.7
|
(0.3)
|
(3.5)
|
(0.7)
|
|
Extreme price growth in hyperinflationary markets* (%)
|
0.6
|
0.7
|
4.7
|
2.2
|
|
Underlying sales growth
(%)
|
2.6
|
6.1
|
1.5
|
2.9
|
|
Price* (%)
|
0.9
|
3.1
|
1.7
|
1.6
|
|
Volume
(%)
|
1.7
|
2.9
|
(0.2)
|
1.2
|
|
|
|
|
|
|
|
Operating profit
(€ million)
|
|
|
|
|
|
2018(a)
|
4,165
|
1,187
|
7,287
|
12,639
|
|
2019
|
4,520
|
1,377
|
2,811
|
8,708
|
|
Underlying operating
profit (€
million)
|
|
|
|
|
|
2018(a)
|
4,543
|
1,344
|
3,576
|
9,463
|
|
2019
|
4,960
|
1,605
|
3,382
|
9,947
|
|
Operating margin
(%)
|
|
|
|
|
|
2018(a)
|
20.2
|
11.7
|
36.0
|
24.8
|
|
2019
|
20.7
|
12.7
|
14.6
|
16.8
|
|
Underlying operating
margin (%)
|
|
|
|
|
|
2018(a)
|
22.0
|
13.3
|
17.7
|
18.6
|
|
2019
|
22.7
|
14.8
|
17.5
|
19.1
|
(a)
Restated
following adoption of IFRS 16. See note 1 and note 9.
*
Underlying price growth in excess of 26% per year in
hyperinflationary economies has been excluded when calculating the
price growth in the tables above, and an equal and opposite amount
is shown as extreme price growth in hyperinflationary
markets.
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.
Underlying
operating profit represents our measure of segment profit or loss
as it is the primary measure used for the purpose of making
decisions about allocating resources and assessing performance of
segments. Underlying operating margin is calculated as underlying
operating profit divided by turnover.
|
4
SEGMENT INFORMATION – GEOGRAPHICAL AREA
|
|
Fourth Quarter
|
Asia /
AMET /
RUB
|
The
Americas
|
Europe
|
Total
|
|
Turnover (€ million)
|
|
|
|
|
|
2018
|
5,541
|
4,019
|
2,590
|
12,150
|
|
2019
|
5,866
|
4,181
|
2,591
|
12,638
|
|
Change
(%)
|
5.9
|
4.0
|
-
|
4.0
|
|
Impact of:
|
|
|
|
|
|
Acquisitions
(%)
|
0.1
|
1.5
|
1.2
|
0.8
|
|
Disposals
(%)
|
(0.1)
|
(0.1)
|
(1.0)
|
(0.3)
|
|
Currency-related items (%), of which:
|
3.7
|
0.5
|
0.6
|
2.0
|
|
Exchange rates changes (%)
|
3.7
|
(11.6)
|
0.6
|
(2.4)
|
|
Extreme price growth in hyperinflationary markets* (%)
|
-
|
13.7
|
-
|
4.5
|
|
Underlying sales growth
(%)
|
2.1
|
2.0
|
(0.8)
|
1.5
|
|
Price* (%)
|
0.2
|
2.5
|
(2.3)
|
0.4
|
|
Volume
(%)
|
1.9
|
(0.4)
|
1.5
|
1.1
|
|
|
|
|
|
|
|
Full Year
|
Asia /
AMET /
RUB
|
The
Americas
|
Europe
|
Total
|
|
Turnover (€ million)
|
|
|
|
|
|
2018
|
22,868
|
16,020
|
12,094
|
50,982
|
|
2019
|
24,129
|
16,482
|
11,369
|
51,980
|
|
Change
(%)
|
5.5
|
2.9
|
(6.0)
|
2.0
|
|
Impact of:
|
|
|
|
|
|
Acquisitions
(%)
|
-
|
1.0
|
1.4
|
0.7
|
|
Disposals
(%)
|
(1.2)
|
(2.6)
|
(6.8)
|
(3.0)
|
|
Currency- related items (%), of which:
|
1.7
|
2.1
|
0.1
|
1.5
|
|
Exchange rates changes (%)
|
1.7
|
(4.5)
|
0.1
|
(0.7)
|
|
Extreme price growth in hyperinflationary markets* (%)
|
-
|
6.9
|
-
|
2.2
|
|
Underlying sales growth
(%)
|
5.0
|
2.4
|
(0.6)
|
2.9
|
|
Price* (%)
|
2.3
|
2.6
|
(0.9)
|
1.6
|
|
Volume
(%)
|
2.7
|
(0.2)
|
0.3
|
1.2
|
|
|
|
|
|
|
|
Operating profit
(€ million)
|
|
|
|
|
|
2018(a)
|
4,824
|
3,621
|
4,194
|
12,639
|
|
2019
|
4,418
|
2,683
|
1,607
|
8,708
|
|
Underlying operating
profit (€
million)
|
|
|
|
|
|
2018(a)
|
4,387
|
2,729
|
2,347
|
9,463
|
|
2019
|
4,857
|
3,078
|
2,012
|
9,947
|
|
Operating margin
(%)
|
|
|
|
|
|
2018(a)
|
21.1
|
22.6
|
34.7
|
24.8
|
|
2019
|
18.3
|
16.3
|
14.1
|
16.8
|
|
Underlying operating
margin (%)
|
|
|
|
|
|
2018(a)
|
19.2
|
17.0
|
19.4
|
18.6
|
|
2019
|
20.1
|
18.7
|
17.7
|
19.1
|
(a)
Restated
following adoption of IFRS 16. See note 1 and note 9.
* Underlying price growth in excess of 26% per year
in hyperinflationary economies has been excluded when calculating
the price growth in the tables above, and an equal and opposite
amount is shown as extreme price growth in hyperinflationary
markets.
|
5
TAXATION
|
The
effective tax rate for 2019 is 27.9%, compared with the 2018 rate
of 21.1% which included a benefit from the disposal of our spreads
business.
|
€ million
|
Full
Year 2019
|
Full
Year 2018
Restated(a)
|
||||
|
|
Before
tax
|
Tax
(charge)/ credit
|
After
tax
|
Before
tax
|
Tax
(charge)/ credit
|
After
tax
|
|
Gains/(losses)
on:
|
|
|
|
|
|
|
|
Equity
instruments at fair value through other
|
|
|
|
|
|
|
|
comprehensive
income
|
35
|
(6)
|
29
|
51
|
-
|
51
|
|
Cash
flow hedges
|
198
|
(22)
|
176
|
(70)
|
15
|
(55)
|
|
Remeasurements
of defined benefit pension plans
|
381
|
(28)
|
353
|
(437)
|
109
|
(328)
|
|
Currency
retranslation gains/(losses)
|
6
|
(21)
|
(15)
|
(847)
|
8
|
(839)
|
|
Other comprehensive income
|
620
|
(77)
|
543
|
(1,303)
|
132
|
(1,171)
|
(a) Restated following adoption of IFRS 16. See note 1
and note 9.
|
6
COMBINED EARNINGS PER SHARE
|
The
combined earnings per share calculations are based on the average
number of share units representing the combined ordinary shares of
NV and PLC in issue during the period, less the average number of
shares held as treasury shares.
In
calculating diluted earnings per share and underlying earnings per
share, a number of adjustments are made to the number of shares,
principally the exercise of share options by
employees.
Earnings
per share for total operations for the twelve months were
calculated as follows:
|
|
2019
|
2018
Restated(a)
|
|
Combined EPS – Basic
|
|
|
|
Net profit attributable to shareholders’ equity
(€ million)
|
5,625
|
9,369
|
|
Average number of combined share units (millions of
units)
|
2,616.8
|
2,683.3
|
|
Combined EPS – basic (€)
|
2.15
|
3.49
|
|
|
|
|
|
Combined EPS – Diluted
|
|
|
|
Net profit attributable to shareholders’ equity
(€ million)
|
5,625
|
9,369
|
|
Adjusted average number of combined share units (millions of
units)
|
2,626.7
|
2,694.8
|
|
Combined EPS – diluted (€)
|
2.14
|
3.48
|
|
|
|
|
|
Underlying EPS
|
|
|
|
Net profit attributable to shareholders’ equity
(€ million)
|
5,625
|
9,369
|
|
Post tax impact of non-underlying items attributable to
shareholders’ equity (see note 2)
|
1,063
|
(3,024)
|
|
Underlying profit attributable to shareholders’
equity
|
6,688
|
6,345
|
|
Adjusted average number of combined share units (millions of
units)
|
2,626.7
|
2,694.8
|
|
Underlying EPS – diluted (€)
|
2.55
|
2.35
|
(a) Restated following adoption
of IFRS 16. See note 1 and note 9.
In
calculating underlying earnings per share, net profit attributable
to shareholders’ equity is adjusted to eliminate the post-tax
impact of non-underlying items.
During
the period the following movements in shares have taken
place:
|
|
|
Millions
|
|
Number of shares at 31 December 2018 (net of treasury
shares)
|
|
2,614.2
|
|
Net movements in shares under incentive schemes
|
|
2.6
|
|
Number of shares at 31 December 2019
|
|
2,616.8
|
|
7
ACQUISITIONS AND DISPOSALS
|
In 2019, the Group completed the business acquisitions and
disposals as listed below. In each case 100% of the businesses were
acquired unless stated otherwise. Total consideration for 2019
acquisitions is €1,167 million (2018: €1,194 million
for acquisitions completed during that year). Total consideration
for 2019 disposals is €169 million (2018: €7,590
million for disposals completed during that year).
|
Deal
completion date
|
Acquired/Disposed
business
|
|
28
January 2019
|
Acquired
the Laundress, a global premium eco-friendly laundry care business
in the US. The acquisition expands our portfolio into the premium
home care market.
|
|
5
February 2019
|
Acquired
Graze, the leading healthy snacking business in the UK. The
acquisition accelerates our presence in the healthy snacking and
out of home markets.
|
|
1
March 2019
|
Sold
the global Alsa baking and dessert business to Dr.
Oetker.
|
|
5
April 2019
|
Acquired
Garancia, a derma-cosmetic business in France. The acquisition
strengthens our prestige portfolio in the pharmacy
channel.
|
|
21
May 2019
|
Acquired
Olly Nutrition, a US based vitamins, minerals and supplements
business that accelerates our presence and competitiveness in the
wellness market.
|
|
28
June 2019
|
Acquired
Fluocaril and Parogencyl oral care businesses in France and Spain.
The acquisition complements our existing oral care portfolio and
strengthens our distribution in the European pharmacy
channel.
|
|
26
July 2019
|
Acquired
95% of Tatcha, a leading prestige skin care business in the US.
Tatcha is a modern skin care brand with a focus on natural
ingredients, product experience, premium design and packaging
quality.
|
|
30
August 2019
|
Acquired
Astrix, a personal and home care business in Bolivia that further
strengthens our local market competitiveness.
|
|
1
October 2019
|
Acquired
70% of Lenor, a premium skin care business based in Japan. The
acquisition expands our portfolio into Japanese beauty, premium
face and derma care in Japan and China.
|
|
1
October 2019
|
Acquired
75% of FruFru, a healthy food business in Romania which accelerates
our local presence and competitiveness in the healthy food
market.
|
As previously announced, in December 2018 the Group signed an
agreement to acquire the health food drinks portfolio of
GlaxoSmithKline in India, Bangladesh and 20 other predominantly
Asian markets primarily to acquire the Horlicks and Boost brands.
The deal is now expected to complete during the first half of 2020.
The consideration is payable via a combination of €642
million cash and shares of Hindustan Unilever Limited. Based
on the share price of Hindustan Unilever Limited and exchange rates
at 31 December 2019, the total consideration for the acquisition
was valued at approximately €5,086 million
|
8 FINANCIAL
INSTRUMENTS
|
The
Group’s Treasury function aims to protect the Group’s
financial investments, while maximising returns. The fair value of
financial assets is the same as the carrying amount for 2019 and
2018. The Group’s cash resources and other financial assets
are shown below.
|
€ million
|
31
December 2019
|
31
December 2018
|
||||
|
Current
|
Non-current
|
Total
|
Current
|
Non-current
|
Total
|
|
|
Cash
and cash equivalents
|
|
|
|
|
|
|
|
Cash at
bank and in hand
|
2,457
|
-
|
2,457
|
2,174
|
-
|
2,174
|
|
Short-term deposits
with maturity of less than three months
|
1,693
|
-
|
1,693
|
1,024
|
-
|
1,024
|
|
Other
cash equivalents
|
35
|
-
|
35
|
32
|
-
|
32
|
|
|
4,185
|
-
|
4,185
|
3,230
|
-
|
3,230
|
|
|
|
|
|
|
|
|
|
Other financial assets
|
|
|
|
|
|
|
|
Financial assets at
amortised cost(b)
|
578
|
220
|
798
|
382
|
247
|
629
|
|
Financial assets at
fair value through other comprehensive income(c)
|
-
|
266
|
266
|
154
|
175
|
329
|
|
Financial assets at
fair value through profit or loss:
|
|
|
|
|
|
|
|
Derivatives that
relate to financial liabilities
|
20
|
114
|
134
|
194
|
-
|
194
|
|
Other(d)
|
309
|
274
|
583
|
144
|
220
|
364
|
|
|
907
|
874
|
1,781
|
874
|
642
|
1,516
|
|
Total financial assets(a)
|
5,092
|
874
|
5,966
|
4,104
|
642
|
4,746
|
(a)
Financial
assets exclude trade and other current receivables.
(b)
Current
financial assets at amortised cost include short term deposits with
banks with maturities longer than three months and loans to joint
venture entities. Non-current financial assets at amortised cost
include judicial deposit of €136 million (2018: €128
million) and investment in bonds of €56 million (2018:
€93 million).
(c)
Included
within non-current financial assets at fair value through other
comprehensive income are equity investments of €244 million
(2018: €148 million).
(d)
Included
within current financial assets at fair value through profit or
loss are highly liquid debt mutual funds. 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 and
investments in a number of companies and financial institutions in
North America, North Asia, South Asia and Europe.
The
Group is exposed to the risks of changes in fair value of its
financial assets and liabilities. The following tables summarise
the fair values and carrying amounts of financial instruments and
the fair value calculations by category.
|
€ million
|
Fair
value
|
Carrying
amount
|
||
|
As at
31 December 2019
|
As at
31 December 2018
Restated(a)
|
As at
31 December 2019
|
As at
31 December 2018
Restated(a)
|
|
|
Financial assets
|
|
|
|
|
|
Cash
and cash equivalents
|
4,185
|
3,230
|
4,185
|
3,230
|
|
Financial assets at
amortised cost
|
798
|
629
|
798
|
629
|
|
Financial assets at
fair value through other comprehensive income
|
266
|
329
|
266
|
329
|
|
Financial assets at
fair value through profit and loss:
|
|
|
|
|
|
Derivatives that
relate to financial liabilities
|
134
|
194
|
134
|
194
|
|
Other
|
583
|
364
|
583
|
364
|
|
|
5,966
|
4,746
|
5,966
|
4,746
|
|
Financial liabilities
|
|
|
|
|
|
Bank
loans and overdrafts
|
(853)
|
(816)
|
(853)
|
(814)
|
|
Bonds
and other loans
|
(26,525)
|
(23,691)
|
(25,032)
|
(23,391)
|
|
Lease
liabilities
|
(1,919)
|
(1,981)
|
(1,919)
|
(1,981)
|
|
Derivatives
|
(270)
|
(402)
|
(270)
|
(402)
|
|
Other
financial liabilities
|
(183)
|
(150)
|
(183)
|
(150)
|
|
|
(29,750)
|
(27,040)
|
(28,257)
|
(26,738)
|
(a) Restated following adoption of IFRS 16. See note 1
and note 9.
|
€
million
|
Level
1
|
Level
2
|
Level
3
|
Level
1
|
Level
2
|
Level
3
|
|
|
As at
31 December 2019
|
As at
31 December 2018
|
||||
|
Assets at fair value
|
|
|
|
|
|
|
|
Financial
assets at fair value through other comprehensive
income
|
7
|
4
|
255
|
160
|
5
|
164
|
|
Financial
assets at fair value through profit or loss:
|
|
|
|
|
|
|
|
Derivatives(a)
|
-
|
208
|
-
|
-
|
276
|
-
|
|
Other
|
311
|
-
|
272
|
145
|
-
|
219
|
|
Liabilities at fair value
|
|
|
|
|
|
|
|
Derivatives(b)
|
-
|
(326)
|
-
|
-
|
(542)
|
-
|
|
Contingent
consideration
|
-
|
-
|
(154)
|
-
|
-
|
(142)
|
(a)
Includes €74 million (2018: €82 million) derivatives,
reported within trade receivables, that hedge trading
activities.
(b) Includes €(56) million (2018: € (140)
million) derivatives, reported within trade creditors, that hedge
trading activities.
There were no significant changes in classification of fair value
of financial assets and financial liabilities since 31 December
2018. There were also no significant movements between the fair
value hierarchy classifications since 31 December
2018.
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.
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 2018.
|
9
RESTATEMENT IMPACT OF IFRS 16
|
Upon adoption of IFRS 16, the Group has recognised leases on the
balance sheet with a right-of-use asset and related lease
liability. Refer to note 1 for a summary of accounting for leases
under the new standard. The Group has restated all prior periods
for the impact of IFRS 16 in line with the ‘full
retrospective approach’. The Group has chosen not to
recognise short-term leases, which are those less than 12 months,
and leases of low-value assets on the balance sheet.
Financial statement impact
The
below tables summarise the impact of adopting IFRS 16 on the
Group’s consolidated financial statements. Only restated
lines have been included in the tables below:
(a)
Balance
sheet
The
Group recognised right-of-use assets on the balance sheet
representing the right to use of the underlying assets from the
lease contracts. Current and non-current lease liabilities were
also recognised for the present value of the lease payments due
under the lease contracts. Deferred tax adjustments are due to
temporary timing differences arising from the recognition of
right-of-use assets and lease liabilities. Shareholder’s
equity has been restated to reflect the cumulative impact of IFRS
16 on retained earnings and currency translation adjustment as a
result of IFRS 16 restatement of foreign subsidiaries.
|
€ million
|
As at
31 December 2018
|
||
|
|
As
previously reported
|
Adjustments
for IFRS 16
|
Restated
|
|
Property,
plant and equipment
|
10,347
|
1,741
|
12,088
|
|
Deferred
tax assets
|
1,117
|
35
|
1,152
|
|
Other
non-current assets
|
648
|
(118)
|
530
|
|
Trade
and other current receivables
|
6,485
|
(3)
|
6,482
|
|
Total assets
|
59,456
|
1,655
|
61,111
|
|
|
|
|
|
|
Current
financial liabilities
|
3,235
|
378
|
3,613
|
|
Non-current
financial liabilities
|
21,650
|
1,475
|
23,125
|
|
Deferred
tax liability
|
1,923
|
(23)
|
1,900
|
|
Total liabilities
|
47,164
|
1,830
|
48,994
|
|
Income Statement (€ mill
|
|
|
|
|
Other
reserves
|
(15,286)
|
68
|
(15,218)
|
|
Retained
profit
|
26,265
|
(243)
|
26,022
|
|
Total equity
|
12,292
|
(175)
|
12,117
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and equity
|
59,456
|
1,655
|
61,111
|
Only
impacted lines and key sub-totals are presented in the table
above.
(b)
Income
statement and statement of comprehensive income
Operating profit has been restated to remove operating lease
payments previously recognised and to recognise depreciation
expense on the right-of-use assets that are now recognised on the
balance sheet. Interest expense on lease liabilities has been
recognised within finance costs. Adjustments to taxation are due to
the change in profit before taxation. Currency translation
gains/losses have also been restated to reflect the foreign
exchange impact of IFRS 16 on subsidiaries that do not have a euro
functional currency.
|
€ million
|
Full
Year 2018
|
||
|
|
As
previously reported
|
Adjustments
for IFRS 16
|
Restated
|
|
Income statement
|
|
|
|
|
Operating
profit
|
12,535
|
104
|
12,639
|
|
Finance
costs
|
(591)
|
(127)
|
(718)
|
|
Profit
before taxation
|
12,383
|
(23)
|
12,360
|
|
Taxation
|
(2,575)
|
3
|
(2,572)
|
|
Net
profit
|
9,808
|
(20)
|
9,788
|
|
Attributable
to: Shareholder’s equity
|
9,389
|
(20)
|
9,369
|
|
Statement of comprehensive income
|
|
|
|
|
|
Net
profit
|
9,808
|
(20)
|
9,788
|
|
|
Currency
retranslation gains/(losses)
|
(861)
|
22
|
(839)
|
|
|
Total
comprehensive income
|
8,615
|
2
|
8,617
|
|
|
Attributable
to: Shareholder’s equity
|
8,208
|
2
|
8,210
|
|
Only
impacted lines and key sub-totals are presented in the table
above.
(c)
Cash
flow statement
There is no impact on overall cash flows on the Group from the
adoption of IFRS 16. However, cash outflows for lease payments have
been reclassified from cash flows from operating activities to cash
flows used in financing activities.
|
€ million
|
Full
Year 2018
|
||
|
As
previously reported
|
Adjustments
for IFRS 16
|
Restated
|
|
|
Cash flow statement
|
|||
|
Net
profit
|
9,808
|
(20)
|
9,788
|
|
Taxation
|
2,575
|
(3)
|
2,572
|
|
Net
finance costs
|
481
|
127
|
608
|
|
Operating
profit
|
12,535
|
104
|
12,639
|
|
Depreciation,
amortisation and impairment
|
1,747
|
469
|
2,216
|
|
Elimination
of (profits)/losses on disposals
|
(4,299)
|
(14)
|
(4,313)
|
|
Other
adjustments
|
(266)
|
6
|
(260)
|
|
Net cash flow from operating activities
|
6,753
|
565
|
7,318
|
|
Interest
paid
|
(477)
|
(94)
|
(571)
|
|
Change
in financial liabilities / Capital element of finance lease rental
payments
|
(10)
|
10
|
-
|
|
Capital
element of lease payments
|
-
|
(481)
|
(481)
|
|
Net cash flow (used in) / from financing activities
|
(11,548)
|
(565)
|
(12,113)
|
Only
impacted lines and key sub-totals are presented in the table
above.
(d)
Impact
on earnings per share
Basic and diluted earnings per share have been restated to reflect
the restated net profit attributable to shareholders’ equity
as per the income statement.
|
|
Full
Year 2018
|
|
|
|
As
previously reported
|
Restated
|
|
Combined EPS – Basic
|
|
|
|
Net
profit attributable to shareholders’ equity (€
million)
|
9,389
|
9,369
|
|
|
|
|
|
Average
number of combined share units (millions of units)
|
2,683.3
|
2,683.3
|
|
|
|
|
|
Combined
EPS – basic (€)
|
3.50
|
3.49
|
|
|
|
|
|
Combined EPS – Diluted
|
|
|
|
Net
profit attributable to shareholders’ equity (€
million)
|
9,389
|
9,369
|
|
|
|
|
|
Adjusted
average number of combined share units (millions of
units)
|
2,694.8
|
2,694.8
|
|
|
|
|
|
Combined
EPS – diluted (€)
|
3.48
|
3.48
|
(e)
Impact
on segment information
Segment information for the Group’s divisions and
geographical areas has been restated. Operating profit, underlying
operating profit, operating margin and underlying operating margin
have been restated to reflect the impact of IFRS 16 adoption on the
income statement for the year ended 31 December 2018 as
follows:
|
Full Year 2018
|
Beauty
& Personal
Care
|
Home
Care
|
Foods
& Refreshment
|
Total
|
|
Operating profit (€ million)
|
|
|
|
|
|
2018 as
previously reported
|
4,130
|
1,160
|
7,245
|
12,535
|
|
Adjustments for
IFRS 16
|
35
|
27
|
42
|
104
|
|
2018
after restatement
|
4,165
|
1,187
|
7,287
|
12,639
|
|
Underlying operating profit (€ million)
|
|
|
|
|
|
2018 as
previously reported
|
4,508
|
1,317
|
3,534
|
9,359
|
|
Adjustments for
IFRS 16
|
35
|
27
|
42
|
104
|
|
2018
after restatement
|
4,543
|
1,344
|
3,576
|
9,463
|
|
Operating margin (%)
|
|
|
|
|
|
2018 as
previously reported
|
20.0
|
11.5
|
35.8
|
24.6
|
|
2018
after restatement
|
20.2
|
11.7
|
36.0
|
24.8
|
|
Underlying operating margin (%)
|
|
|
|
|
|
2018 as
previously reported
|
21.9
|
13.0
|
17.5
|
18.4
|
|
2018
after restatement
|
22.0
|
13.3
|
17.7
|
18.6
|
|
Full Year 2018
|
Asia/AMET/
RUB
|
The
Americas
|
Europe
|
Total
|
|
Operating profit (€ million)
|
|
|
|
|
|
2018 as
previously reported
|
4,777
|
3,586
|
4,172
|
12,535
|
|
Adjustments for
IFRS 16
|
47
|
35
|
22
|
104
|
|
2018
after restatement
|
4,824
|
3,621
|
4,194
|
12,639
|
|
Underlying operating profit (€ million)
|
|
|
|
|
|
2018 as
previously reported
|
4,340
|
2,694
|
2,325
|
9,359
|
|
Adjustments for
IFRS 16
|
47
|
35
|
22
|
104
|
|
2018
after restatement
|
4,387
|
2,729
|
2,347
|
9,463
|
|
Operating margin (%)
|
|
|
|
|
|
2018 as
previously reported
|
20.9
|
22.4
|
34.5
|
24.6
|
|
2018
after restatement
|
21.1
|
22.6
|
34.7
|
24.8
|
|
Underlying operating margin (%)
|
|
|
|
|
|
2018 as
previously reported
|
19.0
|
16.8
|
19.2
|
18.4
|
|
2018
after restatement
|
19.2
|
17.0
|
19.4
|
18.6
|
|
10
DIVIDENDS
|
The
Boards have declared a quarterly interim dividend for Q4 2019 at
the following rates which are equivalent in value at the rate of
exchange applied under the terms of the Equalisation Agreement
between the two companies:
Per
Unilever N.V. ordinary share: €
0.4104
Per
Unilever PLC ordinary share: £
0.3472
Per
Unilever N.V. New York share: US$
0.4517
Per
Unilever PLC American Depositary Receipt: US$
0.4517
The
quarterly interim dividends have been determined in euros and
converted into equivalent sterling and US dollar amounts using
exchange rates issued by WM/Reuters on 28 January
2020.
US
dollar cheques for the quarterly interim dividend will be mailed on
18 March 2020 to holders of record at the close of business on 21
February 2020. In the case of the NV New York shares, Netherlands
withholding tax will be deducted.
The
quarterly dividend calendar for the remainder of 2020 will be as
follows:
|
|
Announcement
Date
|
Ex-Dividend
Date
|
Record
Date
|
Payment
Date
|
|
Q4 2019
Dividend
|
30
January 2020
|
20
February 2020
|
21
February 2020
|
18
March 2020
|
|
|
|
|
|
|
|
Q1 2020
Dividend
|
23
April 2020
|
14 May
2020
|
15 May
2020
|
4 June
2020
|
|
|
|
|
|
|
|
Q2 2020
Dividend
|
23 July
2020
|
6
August 2020
|
7
August 2020
|
9
September 2020
|
|
|
|
|
|
|
|
Q3 2020
Dividend
|
22
October 2020
|
5
November 2020
|
6
November 2020
|
2
December 2020
|
|
11
EVENTS AFTER THE BALANCE SHEET DATE
|
There were no material post balance sheet events other than those
mentioned elsewhere in this report.
TREATMENT OF HYPERINFLATIONARY ECONOMIES IN UNDERLYING SALES
GROWTH
Previously
underlying sales growth (USG) excluded all price growth from
countries where the impact of consumer price inflation (CPI) rates
had escalated to extreme levels. There were two countries where we
had determined extreme levels of CPI existed. Price growth in
Venezuela was excluded from USG since Q4 2017 and price growth in
Argentina was excluded from USG since Q3 2018. This approach was
adopted for Argentina in 2018 as it was considered that
hyperinflationary conditions would only exist for a short while and
thus all price movements would be related to
hyperinflation.
Following
a review during 2019, we now consider that hyperinflationary
conditions are likely to persist for some time and thus price
growth will represent both hyperinflationary price growth and
normal pricing actions. As a result, our definition of USG has been
updated to include price growth in markets deemed to be
hyperinflationary economies, up to a maximum of 26% per year
(equivalent to approximately 2% per month compounded). 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.
The
change is intended to ensure our reporting provides a more
realistic representation of underlying performance. Price increases
in hyperinflationary economies reflect normal pricing actions that
relate to fluctuations in demand, changes in commodity and other
operating costs and tactical steps to drive competitiveness, in
addition to the exceptional pricing actions taken to respond to
hyperinflationary conditions. The new USG definition aims to
include these normal pricing actions but excludes the exceptional
pricing actions that give rise to the extreme impact that results
from hyperinflation.
Also,
as a consequence of this change, we are providing a breakdown of
the impact of currency-related items on turnover. Whilst previously
the devaluation of the currency and all price growth in
hyperinflationary economies were grouped under “exchange
rate” (now called “currency-related items”), we
are now breaking this down between:
●
exchange rate
changes (including the devaluation of hyperinflationary
currencies); and
●
extreme price
growth in hyperinflationary economies (i.e. price growth that is
not included in underlying price growth).
The
table below show the impact of this change on USG, UPG and
currency-related items on the previously reported
numbers.
Underlying
sales growth and underlying price growth (%)
|
(unaudited)
|
2018
|
2017
|
||||||
|
|
Beauty
& Personal Care
|
Foods
& Refresh-ment
|
Home
Care
|
Total
|
Beauty
& Personal Care
|
Foods
& Refresh-ment
|
Home
Care
|
Total
|
|
Previously
reported
|
|
|
|
|
|
|
|
|
|
Underlying sales
growth
|
3.1
|
2.0
|
4.2
|
2.9
|
2.9
|
2.7
|
4.4
|
3.1
|
|
Underlying price
growth
|
0.6
|
0.7
|
1.9
|
0.9
|
1.5
|
3.0
|
2.3
|
2.3
|
|
Restated
|
|
|
|
|
|
|
|
|
|
Underlying sales
growth
|
3.4
|
2.2
|
4.7
|
3.2
|
2.9
|
2.1
|
4.4
|
2.8
|
|
Underlying price
growth
|
0.9
|
0.9
|
2.4
|
1.2
|
1.5
|
2.3
|
2.3
|
2.0
|
Currency related changes (%)
|
(unaudited)
|
2018
|
2017
|
||||||
|
|
Beauty
& Personal Care
|
Foods
& Refresh-ment
|
Home
Care
|
Total
|
Beauty
& Personal Care
|
Foods
& Refresh-ment
|
Home
Care
|
Total
|
|
Previously
reported
|
|
|
|
|
|
|
|
|
|
Currency related
items
|
(7.0)
|
(5.6)
|
(8.3)
|
(6.7)
|
(1.9)
|
(2.4)
|
(1.7)
|
(2.1)
|
|
Of
which:
|
|
|
|
|
|
|
|
|
|
Exchange rate
changes
|
|
|
|
|
|
|
|
|
|
Extreme
price growth in
|
|
|
|
|
|
|
|
|
|
hyperinflationary
markets
|
|
|
|
|
|
|
|
|
|
Restated
|
|
|
|
|
|
|
|
|
|
Currency related
items
|
(7.2)
|
(5.8)
|
(8.8)
|
(7.0)
|
(1.9)
|
(1.8)
|
(1.7)
|
(1.8)
|
|
Of
which:
|
|
|
|
|
|
|
|
|
|
Exchange rate
changes
|
(8.1)
|
(47.4)
|
(9.1)
|
(29.4)
|
(1.9)
|
(4.3)
|
(1.7)
|
(2.8)
|
|
Extreme
price growth in
|
|
|
|
|
|
|
|
|
|
hyperinflationary
markets
|
1.0
|
79.1
|
0.4
|
31.7
|
-
|
2.5
|
-
|
1.1
|