Unilever PLC 6-K, filed Feb 4, 2021
Unilever PLC (UL)
6-K
2021-02-04
For: 2021-02-04
View Original
Added on
April 09, 2026
About this 6-K
Unilever PLC filed this 6-K on February 4, 2021.
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 February, 2021
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:
04 February, 2021
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 04
February 2021
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Final Results
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Exhibit
99
2020 FULL YEAR RESULTS
Performance highlights (unaudited)
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Underlying performance
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GAAP measures
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vs 2019
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vs 2019
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Full
Year
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Underlying
sales growth (USG)
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1.9%
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Turnover
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€50.7bn
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(2.4)%
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Underlying
operating profit
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€9.4bn
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(5.8)%
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Operating
profit
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€8.3bn
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(4.6)%
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Underlying
operating margin
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18.5%
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(60)bps
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Operating
margin
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16.4%
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(40)bps
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Underlying
earnings per share
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€2.48
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(2.4)%
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Diluted
earnings per share
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€2.12
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(0.9)%
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Free
cash flow
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€7.7bn
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€1.5bn
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Net
profit
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€6.1bn
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0.8%
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Fourth Quarter
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USG
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3.5%
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Turnover
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€12.1bn
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(4.2)%
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Quarterly
dividend payable in March 2021 €0.4268 per
share*
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* See note 10 for more information on dividends.
Full year highlights
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Underlying sales
growth of 1.9%, with 1.6% volume and 0.3% price
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Turnover decreased
2.4%, primarily driven by a negative impact of 5.4% from currency
related items
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Underlying
operating profit decreased 5.8%, but increased by 0.7% at constant
exchange rates
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Underlying earnings
per share decreased 2.4%, but increased 4.1% at constant exchange
rates
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Diluted earnings
per share of €2.12
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Free cash flow up
€1.5 billion to €7.7 billion, reflecting our objective
to protect cash
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Dividend maintained
through the year and increased in the fourth quarter by 4% to
€0.4268 per share
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Unified the group
legal structure under a single parent company
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Alan
Jope: Chief Executive Officer statement
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“In a volatile and unpredictable year, we have demonstrated
Unilever’s resilience and agility through the Covid-19
pandemic. I would like to thank the Unilever team, whose dedication
and hard work has delivered a strong set of results under the most difficult of
circumstances.
Early in the year, we refocused the business on competitive growth,
and the delivery of profit and cash as the best way to maximise
value. We have delivered a step change in operational excellence
through our focus on the fundamentals of growth. As a result, we
are winning market share in over 60% of our business in the last
quarter, on the basis of measurable markets. The business also
generated underlying operating profit of €9.4 billion and
free cash flow of €7.7 billion, an increase of €1.5
billion.
We progressed our strategic agenda, building on our existing
sustainability commitments with ambitious new targets and actions,
most recently with our plans to help build a more equitable and
inclusive society. We completed the unification of our legal
structure under a single parent company and we continue to work on
separating out the tea business as we evolve our
portfolio.
Today we are setting out our plans to drive long term growth
through the strategic choices we are making and outlining our
multi-year financial framework. While volatility and
unpredictability will continue throughout 2021, we begin the year
in good shape and are confident in our ability to adapt to a
rapidly changing environment.”
4
February 2021
As one of the world’s largest consumer goods businesses,
Unilever serves consumers through our purposeful brands. Our vision
is to be the global leader in sustainable business. We will
demonstrate how our purpose-led future fit business model drives
superior performance, consistently delivering financial results in
the top third of our industry.
Our differentiating strengths
Unilever’s success over the last 130 years and its future
success are shaped by the strengths that give us competitive
advantage. We have a powerful portfolio of leading category and
brand positions, with 2.5 billion people using our products every
day. We have a strong presence in the markets that will drive
global growth in the years ahead and our global leadership in
sustainability and commitment to sustainable business is widely
recognised.
Our strategic choices
We have made five strategic choices that we believe will support
our future growth and help us realise the potential of the
business.
1.
Develop our portfolio into
high growth spaces, positioning
Unilever in the categories that will drive future growth. This will
be our guiding strategy behind the choices we make for organic
investment and for our acquisitions and
disposals.
2.
Win with our
brands as a force for good, powered by purpose and
innovation. Purpose-led
brands have been at the heart of Unilever throughout our history
and purpose continues to dominate our thinking and our portfolio
today as it becomes even more relevant to consumers. We will
underpin our focus on purpose with differentiated science and
technology that ensures our brands and products have superior
quality and efficacy.
3.
Accelerate in the USA, India
and China and leverage our emerging markets strength.
Unilever has strong brand and category
leadership positions in the USA, India and China, with around 35%
of our turnover coming from those three countries alone, and we
believe we can bring sharper focus in those geographies and build
even stronger positions. There is also significant opportunity
beyond these markets and we will continue to build on our strong
operating businesses in the world’s fastest growing
economies.
4.
Lead in the channels of the
future. Position our business
for success in the channels of the future, focusing particularly on
e-commerce and digitising the distributed trade, underpinned by
advanced shopper insight as the consumer and customer landscape
continues to evolve.
5.
Build a purpose-led,
future-fit organisation and growth culture. Driving growth through capacity, capability and
culture, while continuing to generate fuel for
growth.
Multi-year financial framework
We will deliver long term value creation by continuing to evolve
our portfolio and driving earnings growth, a strong cash flow and a
growing dividend.
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Underlying
sales growth ahead of our markets, delivering USG in the range of
3% to 5%
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Profit
growth ahead of sales growth, on a comparable basis
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Sustained
strong cash flow over the long term
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Savings
of €2 billion per annum from our well-established ‘Fuel
for Growth’ savings programmes
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Restructuring
investment of around €1 billion for 2021 and 2022; lower
thereafter
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ROIC
in the mid-to-high teens
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Net
Debt to Underlying EBITDA at around 2x
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FULL
YEAR OPERATIONAL REVIEW: DIVISIONS
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Fourth
Quarter 2020
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Full
Year 2020
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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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12.1
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3.5
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3.3
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0.2
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50.7
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1.9
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1.6
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0.3
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(60)
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Beauty
& Personal Care
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5.2
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1.5
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1.2
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0.3
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21.1
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1.2
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1.2
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-
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(100)
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Home
Care
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2.5
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4.7
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6.2
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(1.4)
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10.5
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4.5
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5.1
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(0.6)
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(30)
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Foods
& Refreshment
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4.4
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5.4
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4.3
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1.0
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19.1
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1.3
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0.1
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1.1
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(50)
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Our markets: The operating
environment in our markets has been volatile since the Covid-19
pandemic began in early 2020. In the fourth quarter, we continued
to see changes in consumer behaviour and channel dynamics.
Strict lock-downs in China and India
led to market declines in the first and second quarters
respectively, with both markets subsequently returning to growth
during the year. China has normalised in many categories, while
economic activity in India picked up particularly in the final
quarter. In North America and Europe, elevated demand for food
consumed at home has continued to drive market growth, whilst
consumer usage of most beauty and personal care categories remains
subdued. In Latin America markets were broadly flat for the year
and several South East Asian markets
contracted.
Unilever overall performance: We focused on driving competitive growth through
execution against our five growth fundamentals, responding with
agility to changing dynamics driven by the pandemic, and delivered
a step up in competitive performance.
For the full year we grew underlying sales by 1.9%, with volumes
growing 1.6% and 0.3% from price. In the fourth quarter underlying
sales growth was 3.5%, with volumes of 3.3% and 0.2% from
price. Growth was driven by
hand and home hygiene products, laundry and in-home food and
refreshments. Food solutions and out of home ice cream sales
declined, impacted by channel closures. As people stayed at home
and had fewer opportunities to socialise, they spent less time on
personal grooming which impacted sales in much of the Beauty and
Personal Care business, except for hygiene products where demand
was high. Category demand patterns varied throughout the year and
by market, driven by the differing status of lock-down
restrictions. E-commerce grew
by 61%, as we captured demand in online channels, and is now 9% of
Unilever.
Emerging markets grew 1.2% as China and India returned to growth,
after strict lock-downs in the first half of the year. China
returned to growth in the second quarter as restrictions were
eased, delivering high single digit growth in the second half.
Latin America grew mid-single digit and Indonesia grew slightly,
though declined in the final quarter. Developed markets grew 2.9%,
led by strength in North American in-home foods. Europe declined
for the full year, but grew in the final quarter.
Turnover decreased 2.4%, including a positive impact of 1.2% from
acquisitions net of disposals and a negative impact of 5.4% from
currency movements.
Underlying operating profit was €9.4 billion, a decrease of
5.8% including a negative impact from currency of 6.5%. Underlying
operating margin decreased by 60bps. Gross margin reduced by 50bps,
including a negative impact of 90bps from
additional costs needed to adapt and run our supply chain and
adverse mix from Covid-19. While brand and marketing investment was
conserved in the first half during the early lock-down periods, we
invested strongly behind our brands in the second half and, for the
full year, brand and marketing investment was up €160 million
at constant exchange rates. Overheads increased by 10bps,
reflecting adverse currency mix and turnover
growth.
We delivered free cash flow of €7.7 billion, an increase of
€1.5 billion driven by favourable working capital
movement, as we increased focus on receivables and re-phased
capital expenditure in light of Covid-19.
Beauty & Personal Care
Beauty & Personal Care underlying sales grew 1.2% driven by
volume, with flat price. Skin cleansing saw mid-teens volume-led
growth for the year, driven by the important role of hand hygiene
in combatting the spread of Covid-19. Our Lifebuoy hygiene brand grew by over 50%, launching ‘H
is for Handwashing’ an educational campaign to teach children
the importance of handwashing with soap. Lock-downs and restricted
living in our markets led to lower demand for skin care, deodorants
and hair care, which each saw volume and price declines, most
significantly in the second quarter. Skin care declined high-single
digit and deodorants declined mid-single digit. In hair care,
growth in wash and care partially offset a decline in styling
products, leading to a low-single digit decline overall. Oral care
grew with price growth more than offsetting negative volumes driven
by supply disruption related to lock-downs in key markets in the
second quarter. Our Prestige Beauty business was impacted by door
closures in the health and beauty channel, but achieved a shift to
over 50% e-commerce, overall declining low-single
digit.
Underlying operating margin in Beauty & Personal Care declined
by 100bps, with a reduction in gross margin driven by adverse mix
and additional costs related to Covid-19. This was partially offset
by a reduction in brand and marketing investment, as we conserved
spend during lock-down periods, before significantly stepping up
investment in the second half.
Home Care
Home Care underlying sales grew 4.5%, with 5.1% from volume and
negative pricing of 0.6%. Our home and hygiene brands
delivered high-teens volume-led underlying sales growth. Demand for
products with germ-killing and antibacterial benefits has been
elevated throughout the year. Domestos grew over 25% as we launched
the brand in China and introduced spray and wipe formats. Our
living hygiene range of local brands grew over 50%, led by
Lysoform’s educational
campaigns in Italy. Within the fabric category, fabric solutions
declined slightly, driven by lower consumer prices as we passed on
some of the benefits of reduced commodity costs in the second half
of the year. Capsules and liquids
continued to grow. Low-single digit growth in fabric sensations was
led by Indonesia and by Turkey, where our relaunched
Snuggle
(Yumos) brand performed
well.
Underlying
operating margin in Home Care declined by 30bps, driven by
increased brand and marketing investment as we invested strongly
behind our brands in the second half of the year. Overheads and
gross margin improved, helped by lower material costs, despite
Covid-19 related costs and negative price.
Foods & Refreshment
Foods & Refreshment underlying sales grew 1.3%, with 0.1% from
volume and 1.1% from price. Our retail foods business grew double
digit, as restricted living led to more in-home eating occasions
for consumers. Food solutions declined by 30% as out of home
channels remained closed for much of the year. Hellmann’s
grew high-single digit, supported by
its Stay In(spired) campaign, and our plant-based brand
The Vegetarian
Butcher grew over 70%. Despite
significant decline in the out of home business due to channel
closures, ice cream grew slightly overall as we rapidly shifted
resources towards the in-home business. Ben and Jerry’s
performed strongly, teaming up with
Netflix on its new ‘Netflix and Chill’d’ variant.
Tea grew low single digit.
Underlying operating margin in Foods & Refreshment declined by
50bps. The decline was driven by lower gross margin, due to adverse
mix impacts from out of home channel closures, costs related to
Covid-19 and higher commodity costs in the second half of the
year.
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FULL
YEAR OPERATIONAL REVIEW: GEOGRAPHICAL AREA
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Fourth
Quarter 2020
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Full
Year 2020
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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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12.1
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3.5
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3.3
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0.2
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50.7
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1.9
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1.6
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0.3
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(60)
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Asia/AMET/RUB
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5.6
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2.6
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2.1
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0.5
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23.4
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0.4
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-
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0.4
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(70)
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The
Americas
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3.9
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6.5
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6.0
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0.5
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16.1
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6.2
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5.1
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1.1
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(20)
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Europe
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2.6
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0.8
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1.8
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(1.1)
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11.2
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(1.0)
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0.2
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(1.2)
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(120)
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Fourth
Quarter 2020
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Full
Year 2020
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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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7.0
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3.5
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2.5
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1.0
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29.3
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1.2
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0.2
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1.0
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Developed
markets
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5.1
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3.6
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4.6
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(1.0)
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21.4
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2.9
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3.7
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(0.8)
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North
America
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2.4
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7.1
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8.5
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(1.3)
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10.1
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7.7
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8.1
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(0.4)
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Latin
America
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1.5
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5.8
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2.8
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2.9
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6.0
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4.1
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0.9
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3.2
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Asia/AMET/RUB
Underlying sales grew 0.4% with flat volume and 0.4% from
price. Volumes were impacted by
lock-downs imposed across the region, particularly in China and
India. Restrictions were put in place in China from January, with
growth declining sharply in the first quarter. China returned to
growth in the second quarter as restrictions were eased, with
low-single digit underlying sales growth for the full year and
high-single digit in the fourth quarter. India declined low-single
digit, with a high-single digit decline for the first half related
to lock-down restrictions partially offset by a return to growth in
the third quarter and further acceleration to high-single digit
growth at the end of the year. In South East Asia, Indonesia
declined slightly in the fourth quarter although grew slightly over
the year, whilst the Philippines and Thailand declined. Turkey saw
growth in both volume and price, driven by Home Care and ice
cream.
Underlying operating margin declined by 70bps driven by negative
gross margin due to adverse mix and costs related to Covid-19. This
was partially offset by lower brand and marketing investment as we
conserved spend through lock-down periods in the first half of the
year, before significantly stepping up investment in the second
half.
The Americas
Underlying
sales growth in North America was 7.7% with 8.1% from volume and
negative pricing of 0.4%. There was a negative impact of 2.4% from
our food solutions and Prestige Beauty businesses which were
impacted by channel closures. Growth was driven by strong consumer
demand for in-home foods and ice cream, as well as hygiene
products. Foods & Refreshment excluding food solutions grew
16.1%, with strong performances from Knorr, Hellmann’s and Ben & Jerry’s.
Latin America grew 4.1% with volume growth of 0.9% and positive
pricing of 3.2%. Brazil grew low-single digit for both the
full year and fourth quarter, with underlying volume and price
growth. Demand was stimulated for part of the year by emergency pandemic cash payouts to citizens,
which reduced during the fourth quarter. Home and personal care
categories drove volume growth in Argentina, with
Rexona’s
clinical aerosol deodorants offering
performing well, while Mexico declined low-single
digit.
Underlying operating margin declined by 20bps. A decline in gross
margin from high material inflation as Latin American currencies
devalued, was partially offset by lower overheads.
Europe
Underlying
sales declined 1.0% with positive volumes of 0.2% and a decline of
1.2% from price, although growth
returned in the final quarter. A continued deflationary
retail environment drove price declines. Positive volumes were
driven by Home Care, as hygiene products saw double digit growth
across most markets. Ice cream sales declined, with out of home
sales impacted by lock-downs and reduced tourism, particularly in
Southern Europe. The UK grew mid-single digit, benefiting from
increased demand for in home eating and Home Care products, which
more than offset negatively impacted categories.
Underlying operating margin reduced by 120bps driven by gross
margin which was impacted by negative pricing and adverse
mix.
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ADDITIONAL COMMENTARY ON THE FINANCIAL STATEMENTS – FULL
YEAR
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Finance costs and tax
Net
finance costs decreased €122 million to €505 million in
2020. The decrease was largely driven by lower cost of debt and
interest on tax credits in Brazil. This was partially offset by a
decrease in income on cash as interest rates fell. The interest
rate on average net debt fell to 2.2% from 2.5% in the prior
year.
The
underlying effective tax rate was 23.0% compared with 25.5% in
2019. The decrease was primarily driven by structural reductions in
Indian and Indonesian tax rates; tax settlements and other one-off
benefits; and replacement of Indian distribution tax with a
dividend withholding tax. The effective tax rate was 24.6% compared
with 27.9% in 2019.
Joint ventures, associates and other income from non-current
investments
Net
profit from joint ventures and associates was €175 million,
consistent with the prior year. Other income from non-current
investments was €3 million.
Earnings per share
Underlying
earnings per share decreased to €2.48, including a negative
impact of 6.5% from currency. Constant underlying earnings per
share increased by 4.1%. The increase was mainly driven by
operating performance, lower tax and finance costs, partially
offset by an increase in profit attributable to minority interests
following the Horlicks acquisition in India.
Diluted
earnings per share were down 0.9% at €2.12.
Free cash flow
Free
cash flow was €7.7 billion in 2020 compared to €6.1
billion in the prior year. The improvement was led by favourable
working capital movements, as we increased our focus on
receivables. Capital expenditure declined following re-phased
investment in light of Covid-19, and there was a reduction in cash
tax paid partly driven by tax on disposal of Spreads in the prior
year.
Net debt
Closing
net debt was €20.9 billion compared to €23.1 billion as
at 31 December 2019 driven by higher free cash flow and currency
impact. Net debt to underlying EBITDA was 1.8x as at 31 December
2020 versus 1.9x in the prior year.
Pensions
Pension
assets net of liabilities were in surplus of €0.3 billion at
31 December 2020 versus a deficit of €0.2 billion at the end
of 2019. Strong positive investment performance was offset by an
increase in liabilities as interest rates fell over the year. There
were refinements in assumption methodologies to reflect changes
being made more generally by corporates and their advisers in
setting discount rates and future inflation rates, specifically in
the UK, which resulted in a €0.9 billion lower
liability.
Return on invested capital
Return
on invested capital was 18.0%, compared to 19.2% in the prior year.
This reflects higher goodwill and intangible assets from the
Horlicks acquisition and lower underlying operating profit after
tax.
Finance and liquidity
In 2020, we issued the following bonds:
●
25
March 2020: €1,000 million fixed rate notes at 1.25% due
March 2025, and €1,000 million fixed rate notes at 1.75% due
March 2030
●
14
September 2020: $500 million fixed rate notes at 0.375% due
September 2023, and $500 million fixed rate notes at 1.375% due
September 2030
In April 2020, €300 million 0.0% fixed rate notes matured and
were repaid. In May 2020, $800 million 1.8% fixed rate notes and
$150 million 5.15% fixed rate notes matured and were repaid. In
July 2020, $500 million 2.1% fixed rate notes matured and were
repaid. In August 2020, €750 million 1.75% fixed rate notes
matured and were repaid. In October 2020, a make-whole call was
exercised for $550 million 1.375% fixed rate notes due July 2021
and the notes were fully repaid.
As at 31 December 2020 Unilever had undrawn revolving 364-day
bilateral credit facilities in aggregate of $7,965 million with a
364-day term out.
|
COMPETITION
INVESTIGATIONS
|
As previously disclosed, Unilever is involved in a number of
ongoing investigations and cases by national competition
authorities, including those within Italy, Greece, South Africa and
Turkey. 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 2020
|
Annual
Average rate in 2019
|
|
Brazilian
Real (€1 = BRL)
|
5.781
|
4.367
|
|
Chinese
Yuan (€1 = CNY)
|
7.862
|
7.725
|
|
Indian
Rupee (€1 = INR)
|
84.100
|
78.812
|
|
Indonesia
Rupiah (€1 = IDR)
|
16557
|
15863
|
|
Philippine
Peso (€1 = PHP)
|
56.447
|
58.112
|
|
UK
Pound Sterling (€1 = GBP)
|
0.888
|
0.880
|
|
US
Dollar (€1 = US $)
|
1.135
|
1.120
|
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. 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 other items within operating profit classified here
due to their nature and frequency.
●
Non-underlying items not in operating profit
but within net profit are: net monetary gain/(loss) arising
from hyperinflationary economies and significant and unusual items
in net finance cost, share of profit/(loss) of joint ventures and
associates and taxation.
●
Non-underlying items are: both
non-underlying items within operating profit and those
non-underlying items not in operating profit but within net
profit.
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)
|
2020
|
2019
|
|
Operating profit
|
8,303
|
8,708
|
|
Non-underlying
items within operating profit (see note 2)
|
1,064
|
1,239
|
|
Underlying operating profit
|
9,367
|
9,947
|
|
Turnover
|
50,724
|
51,980
|
|
Operating
margin (%)
|
16.4%
|
16.8%
|
|
Underlying
operating margin (%)
|
18.5%
|
19.1%
|
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)
|
2020
|
2019
|
|
Operating profit
|
8,303
|
8,708
|
|
Depreciation
and amortisation
|
2,018
|
1,964
|
|
Non-underlying
items within operating profit
|
1,064
|
1,239
|
|
Underlying earnings before interest, taxes, depreciation and
amortisation (UEBITDA)
|
11,385
|
11,911
|
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:
ME
|
€ million
|
Full
Year
|
|
|
(unaudited)
|
2020
|
2019
|
|
Taxation
|
1,923
|
2,263
|
|
Tax
impact of:
|
|
|
|
Non-underlying items within operating
profit(a)
|
272
|
309
|
|
Non-underlying items not in operating profit but
within net profit(a)
|
(146)
|
(196)
|
|
Taxation before tax impact of non-underlying items
|
2,049
|
2,376
|
|
Profit
before taxation
|
7,996
|
8,289
|
|
Non-underlying items within operating profit
before tax(a)
|
1,064
|
1,239
|
|
Non-underlying items not in operating profit but
within net profit before tax(b)
|
36
|
(32)
|
|
Share
of net (profit)/loss of joint ventures and associates
|
(175)
|
(176)
|
|
Profit before tax excluding non-underlying items before tax and
share of net profit/(loss) of joint ventures and
associates
|
8,921
|
9,320
|
|
Underlying effective tax rate
|
23.0%
|
25.5%
|
(a)
See
note 2.
(b)
2019
excludes €3 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 in 2019 was €35 million. See note
2.
Underlying earnings per share
Underlying
earnings per share (underlying EPS) is calculated as underlying
profit attributable to shareholders’ equity divided by the
diluted average number of ordinary shares. In calculating
underlying profit attributable to shareholders’ equity, net
profit attributable to shareholders’ equity is adjusted to
eliminate the post-tax impact of non-underlying items. This measure
reflects the underlying earnings for each share unit of the Group.
Refer to note 6 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 shares. 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)
|
2020
|
2019
|
|
Underlying
profit attributable to shareholders’ equity (see note
6)
|
6,532
|
6,688
|
|
Impact
of translation from current to constant exchange rates and
translational
|
|
|
|
hedges
|
472
|
2
|
|
Impact of price growth in excess of 26% per year
in hyperinflationary economies
|
(31)
|
-
|
|
Constant
underlying earnings attributable to shareholders’
equity
|
6,973
|
6,690
|
|
Diluted
average number of share units (millions of units)
|
2,629.8
|
2,626.7
|
|
Constant
underlying EPS (€)
|
2.65
|
2.55
|
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. Net debt is
defined as the excess of total financial liabilities, excluding
trade payables and other current liabilities, over cash, cash
equivalents and other current financial assets, excluding trade and
other current receivables, and non-current financial asset
derivatives that relate to financial liabilities.
The reconciliation of total financial liabilities to net debt is as
follows:
|
€ million
|
As
at
|
As
at
|
|
(unaudited)
|
31
December
|
31
December
|
|
2020
|
2019
|
|
|
Total financial liabilities
|
(27,305)
|
(28,257)
|
|
Current
financial liabilities
|
(4,461)
|
(4,691)
|
|
Non-current
financial liabilities
|
(22,844)
|
(23,566)
|
|
Cash and cash equivalents as per balance sheet
|
5,548
|
4,185
|
|
Cash
and cash equivalents as per cash flow statement
|
5,475
|
4,116
|
|
Add
bank overdrafts deducted therein
|
73
|
69
|
|
Other current financial assets
|
808
|
907
|
|
Non-current financial asset derivatives that relate to financial
liabilities
|
21
|
114
|
|
Net debt
|
(20,928)
|
(23,051)
|
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.-GAAP MEASURES
(continued)
The
reconciliation of cash flow from operating activities to FCF is as
follows:
|
€ million
|
Full
Year
|
|
|
(unaudited)
|
2020
|
2019
|
|
Cash flow from operating activities
|
10,933
|
10,641
|
|
Income
tax paid
|
(1,875)
|
(2,532)
|
|
Net
capital expenditure
|
(932)
|
(1,429)
|
|
Net
interest paid
|
(455)
|
(548)
|
|
Free cash flow
|
7,671
|
6,132
|
|
Net
cash flow (used in)/from investing activities
|
(1,481)
|
(2,237)
|
|
Net
cash flow (used in)/from financing activities
|
(5,804)
|
(4,667)
|
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 guard 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)
|
2020
|
2019
|
|
Operating
profit
|
8,303
|
8,708
|
|
Non-underlying
items within operating profit (see note 2)
|
1,064
|
1,239
|
|
Underlying
operating profit before tax
|
9,367
|
9,947
|
|
Tax on underlying operating
profit(a)
|
(2,154)
|
(2,536)
|
|
Underlying operating profit after tax
|
7,213
|
7,411
|
|
Goodwill
|
18,942
|
18,067
|
|
Intangible
assets
|
15,999
|
12,962
|
|
Property,
plant and equipment
|
10,558
|
12,062
|
|
Net
assets held for sale
|
27
|
81
|
|
Inventories
|
4,462
|
4,164
|
|
Trade
and other current receivables
|
4,939
|
6,695
|
|
Trade
payables and other current liabilities
|
(14,132)
|
(14,768)
|
|
Period-end
invested capital
|
40,795
|
39,263
|
|
Average invested capital for the period
|
40,029
|
38,639
|
|
Return on invested capital
|
18.0%
|
19.2%
|
(a)
Tax on underlying
operating profit is calculated as underlying operating profit
before tax multiplied by the underlying effective tax rate of 23.0%
(2019: 25.5%) which is shown on page 9.
|
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; the effect of climate change on
Unilever’s business; Unilever's ability to find sustainable
solutions to its plastic packaging; significant changes or
deterioration in customer relationships; the recruitment and
retention of talented employees; disruptions in our supply chain
and distribution; increases or volatility in the cost of raw
materials and commodities; the production of safe and high quality
products; secure and reliable IT infrastructure; execution of
acquisitions, divestitures and business transformation projects;
economic, social and political risks and natural disasters;
financial risks; failure to meet high and ethical standards; and
managing regulatory, tax and legal matters. A
number of these risks have increased as a result of the current
Covid-19 pandemic. These forward-looking statements speak only as
of the date of this document. Except as required by any applicable
law or regulation, the Group expressly disclaims any obligation or
undertaking to release publicly any updates or revisions to any
forward-looking statements contained herein to reflect any change
in the Group’s expectations with regard thereto or any change
in events, conditions or circumstances on which any such statement
is based. Further details of potential risks and uncertainties
affecting the Group are described in the Group’s filings with
the London Stock Exchange, Euronext Amsterdam and the US Securities
and Exchange Commission, including in the Annual Report on Form
20-F 2019 and the Unilever Annual Report and Accounts
2019.
|
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 62
375 8385
|
lucila.zambrano@unilever.com
JSibun@tulchangroup.com
els-de.bruin@unilever.com
marlous-den.bieman@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
|
|||
|
|
2020
|
2019
|
Increase/
|
|
|
(Decrease)
|
||||
|
Current
|
Constant
|
|||
|
rates
|
rates
|
|||
|
|
|
|
|
|
|
Turnover
|
50,724
|
51,980
|
(2.4)%
|
3.5%
|
|
|
|
|
|
|
|
Operating profit
|
8,303
|
8,708
|
(4.6)%
|
2.2%
|
|
|
|
|
|
|
|
Which
includes non-underlying items credits/(charges) of
|
(1,064)
|
(1,239)
|
|
|
|
|
|
|
|
|
|
Net finance costs
|
(505)
|
(627)
|
|
|
|
Pensions
and similar obligations
|
(9)
|
(30)
|
|
|
|
Finance
income
|
232
|
224
|
|
|
|
Finance
costs
|
(728)
|
(821)
|
|
|
|
|
|
|
|
|
|
Which
includes non-underlying costs of
|
(56)
|
-
|
|
|
|
|
|
|
|
|
|
Non-underlying item net monetary gain/(loss) arising
from
|
|
|
|
|
|
hyperinflationary economies
|
20
|
32
|
|
|
|
|
|
|
|
|
|
Share of net profit/(loss) of joint ventures and
associates
|
175
|
176
|
|
|
|
Which
includes non-underlying item credits/(charges) of
|
-
|
3
|
|
|
|
Other income/(loss) from non-current investments and
associates
|
3
|
-
|
|
|
|
|
|
|
|
|
|
Profit before taxation
|
7,996
|
8,289
|
(3.5)%
|
3.9%
|
|
|
|
|
|
|
|
Taxation
|
(1,923)
|
(2,263)
|
|
|
|
Which
includes tax impact of non-underlying items of
|
126
|
113
|
|
|
|
|
|
|
|
|
|
Net profit
|
6,073
|
6,026
|
0.8%
|
7.6%
|
|
|
|
|
|
|
|
Attributable to:
|
|
|
|
|
|
Non-controlling
interests
|
492
|
401
|
|
|
|
Shareholders’
equity
|
5,581
|
5,625
|
(0.8)%
|
6.1%
|
|
|
|
|
|
|
|
Combined
earnings per share
|
|
|
|
|
|
Basic earnings per share (euros)
|
2.13
|
2.15
|
(0.9)%
|
5.9%
|
|
Diluted earnings per share (euros)
|
2.12
|
2.14
|
(0.9)%
|
5.9%
|
|
STATEMENT
OF COMPREHENSIVE INCOME
|
(unaudited)
|
€ million
|
Full
Year
|
|
|
|
2020
|
2019
|
|
|
|
|
|
Net profit
|
6,073
|
6,026
|
|
|
|
|
|
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
|
78
|
29
|
|
Remeasurement
of defined benefit pension plans
|
215
|
353
|
|
Items that may be reclassified subsequently to profit or
loss, net of tax:
|
|
|
|
Gains/(losses)
on cash flow hedges
|
60
|
176
|
|
Currency
retranslation gains/(losses)
|
(2,590)
|
(15)
|
|
|
|
|
|
Total comprehensive income
|
3,836
|
6,569
|
|
|
|
|
|
Attributable to:
|
|
|
|
Non-controlling
interests
|
286
|
407
|
|
Shareholders’
equity
|
3,550
|
6,162
|
|
STATEMENT
OF CHANGES IN EQUITY
|
(unaudited)
|
€ million
|
Called
up share capital
|
Share
premium account
|
Unification
reserve
|
Other
reserves
|
Retained
profit
|
Total
|
Non-
controlling interest
|
Total
equity
|
|
1
January 2019
|
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(a)
|
(44)
|
-
|
-
|
9,416
|
(9,372)
|
-
|
-
|
-
|
|
Other
movements in treasury shares(b)
|
-
|
-
|
-
|
64
|
(231)
|
(167)
|
-
|
(167)
|
|
Share-based
payment credit(c)
|
-
|
-
|
-
|
-
|
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
|
|
Profit
or loss for the period
|
-
|
-
|
-
|
-
|
5,581
|
5,581
|
492
|
6,073
|
|
Other
comprehensive income, net of tax:
|
|
|
|
|
|
|
|
|
|
Gains/(losses)
on:
|
|
|
|
|
|
|
|
|
|
Equity
instruments
|
-
|
-
|
-
|
68
|
-
|
68
|
10
|
78
|
|
Cash
flow hedges
|
-
|
-
|
-
|
62
|
-
|
62
|
(2)
|
60
|
|
Remeasurements of
defined benefit pension plans
|
-
|
-
|
-
|
-
|
217
|
217
|
(2)
|
215
|
|
Currency
retranslation gains/(losses)
|
-
|
-
|
-
|
(2,356)
|
(22)
|
(2,378)
|
(212)
|
(2,590)
|
|
Total
comprehensive income
|
-
|
-
|
-
|
(2,226)
|
5,776
|
3,550
|
286
|
3,836
|
|
Dividends
on ordinary capital
|
-
|
-
|
-
|
-
|
(4,300)
|
(4,300)
|
-
|
(4,300)
|
|
Issue
of PLC ordinary shares as part of Unification(d)
|
51
|
-
|
-
|
-
|
(51)
|
-
|
-
|
-
|
|
Cancellation
of NV ordinary shares as part of Unification(d)
|
(233)
|
(20)
|
-
|
-
|
253
|
-
|
-
|
-
|
|
Other
effects of Unification(e)
|
(146)
|
73,364
|
(73,364)
|
132
|
14
|
-
|
-
|
-
|
|
Movements
in treasury shares(b)
|
-
|
-
|
-
|
220
|
(158)
|
62
|
-
|
62
|
|
Share-based
payment credit(c)
|
-
|
-
|
-
|
-
|
108
|
108
|
-
|
108
|
|
Dividends
paid to non-controlling interests
|
-
|
-
|
-
|
-
|
-
|
-
|
(559)
|
(559)
|
|
Currency
retranslation gains/(losses) net of tax
|
-
|
(6)
|
-
|
-
|
-
|
(6)
|
-
|
(6)
|
|
Hedging
gain/(loss) transferred to non-financial assets
|
-
|
-
|
-
|
10
|
-
|
10
|
2
|
12
|
|
Net
gain arising from Horlicks acquisition(f)
|
-
|
-
|
-
|
-
|
2,930
|
2,930
|
1,918
|
4,848
|
|
Other
movements in equity(g)
|
-
|
-
|
-
|
(44)
|
(236)
|
(280)
|
48
|
(232)
|
|
31 December 2020
|
92
|
73,472
|
(73,364)
|
(7,482)
|
22,548
|
15,266
|
2,389
|
17,655
|
(a)
During 2019
254,012,896 NV ordinary shares and 18,660,634 PLC ordinary shares
were cancelled. The amount paid to repurchase these shares was
initially recognised in other reserves and is transferred to
retained profit on cancellation.
(b)
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.
(c)
The share-based
payment credit relates to the non-cash charge recorded against
operating profit in respect of the fair value of share options and
awards granted to employees.
(d)
As part of
Unification (see note 1 for further details), the shareholders of
NV were issued new PLC ordinary shares, and all NV shares in issue
were cancelled. The net impact is recognized in retained
profit.
(e)
Includes the reduction of PLC's share capital following the cessation of
the Equalisation Agreement. Prior to Unification, a conversion rate
of £1= €5.143
was used in accordance with the Equalisation Agreement to translate
PLC’s share capital. Following Unification, PLC's share
capital has been translated using the exchange rate at the date of
Unification. To reflect the legal share capital of the PLC company,
an increase to share premium of €73,364 million and a debit
unification reserve for the same amount have been recorded as there
is no change in the net assets of the group. This debit is not a
loss as a matter of law.
(f)
Consideration for
the Main Horlicks Acquisition included the issuance of shares in a
group subsidiary, Hindustan Unilever Limited, which resulted in a
net gain being recognised within equity. See note 8 for further
details.
(g)
Includes €163
million paid for purchase of the non-controlling interest in
Unilever Malaysia.
|
BALANCE
SHEET
|
(unaudited)
|
€ million
|
As
at
31
December
2020
|
As
at
31
December
2019
|
|
|
||
|
Non-current assets
|
|
|
|
Goodwill
|
18,942
|
18,067
|
|
Intangible
assets
|
15,999
|
12,962
|
|
Property,
plant and equipment
|
10,558
|
12,062
|
|
Pension
asset for funded schemes in surplus
|
2,722
|
2,422
|
|
Deferred
tax assets
|
1,474
|
1,336
|
|
Financial
assets
|
876
|
874
|
|
Other
non-current assets
|
931
|
653
|
|
|
51,502
|
48,376
|
|
Current assets
|
|
|
|
Inventories
|
4,462
|
4,164
|
|
Trade
and other current receivables
|
4,939
|
6,695
|
|
Current
tax assets
|
372
|
397
|
|
Cash
and cash equivalents
|
5,548
|
4,185
|
|
Other
financial assets
|
808
|
907
|
|
Assets
held for sale
|
28
|
82
|
|
|
16,157
|
16,430
|
|
|
|
|
|
Total assets
|
67,659
|
64,806
|
|
Current liabilities
|
|
|
|
Financial
liabilities
|
4,461
|
4,691
|
|
Trade
payables and other current liabilities
|
14,132
|
14,768
|
|
Current
tax liabilities
|
1,451
|
898
|
|
Provisions
|
547
|
620
|
|
Liabilities
held for sale
|
1
|
1
|
|
|
20,592
|
20,978
|
|
Non-current liabilities
|
|
|
|
Financial
liabilities
|
22,844
|
23,566
|
|
Non-current
tax liabilities
|
149
|
182
|
|
Pensions
and post-retirement healthcare liabilities:
|
|
|
|
Funded
schemes in deficit
|
1,109
|
1,157
|
|
Unfunded
schemes
|
1,326
|
1,461
|
|
Provisions
|
583
|
664
|
|
Deferred
tax liabilities
|
3,166
|
2,573
|
|
Other
non-current liabilities
|
235
|
339
|
|
|
29,412
|
29,942
|
|
|
|
|
|
Total liabilities
|
50,004
|
50,920
|
|
Equity
|
|
|
|
Shareholders’
equity
|
15,266
|
13,192
|
|
Non-controlling
interests
|
2,389
|
694
|
|
Total equity
|
17,655
|
13,886
|
|
|
|
|
|
Total liabilities and equity
|
67,659
|
64,806
|
|
CASH
FLOW STATEMENT
|
(unaudited)
|
€ million
|
Full
Year
|
|
|
|
2020
|
2019
|
|
Net
profit
|
6,073
|
6,026
|
|
Taxation
|
1,923
|
2,263
|
|
Share
of net (profit)/loss of joint ventures/associates and other
(income)/loss from non-current investments and
associates
|
(178)
|
(176)
|
|
Net
monetary (gain)/loss arising from hyperinflationary
economies
|
(20)
|
(32)
|
|
Net
finance costs
|
505
|
627
|
|
Operating profit
|
8,303
|
8,708
|
|
Depreciation,
amortisation and impairment
|
2,018
|
1,982
|
|
Changes
in working capital
|
680
|
(9)
|
|
Pensions
and similar obligations less payments
|
(182)
|
(260)
|
|
Provisions
less payments
|
(53)
|
7
|
|
Elimination
of (profits)/losses on disposals
|
60
|
60
|
|
Non-cash
charge for share-based compensation
|
108
|
151
|
|
Other
adjustments
|
(1)
|
2
|
|
Cash flow from operating activities
|
10,933
|
10,641
|
|
Income
tax paid
|
(1,875)
|
(2,532)
|
|
Net cash flow from operating activities
|
9,058
|
8,109
|
|
Interest
received
|
169
|
146
|
|
Net
capital expenditure
|
(932)
|
(1,429)
|
|
Other
acquisitions and disposals
|
(1,387)
|
(945)
|
|
Other
investing activities
|
669
|
(9)
|
|
|
|
|
|
Net cash flow (used in)/from investing activities
|
(1,481)
|
(2,237)
|
|
Dividends
paid on ordinary share capital
|
(4,279)
|
(4,209)
|
|
Interest
paid
|
(624)
|
(694)
|
|
Change
in financial liabilities
|
(181)
|
901
|
|
Other
movements on treasury shares
|
-
|
(201)
|
|
Other
financing activities
|
(720)
|
(464)
|
|
|
|
|
|
Net cash flow (used in)/from financing activities
|
(5,804)
|
(4,667)
|
|
|
|
|
|
|
|
|
|
Net increase/(decrease) in cash and cash equivalents
|
1,773
|
1,205
|
|
Cash and cash equivalents at the beginning of the
period
|
4,116
|
3,090
|
|
|
|
|
|
Effect
of foreign exchange rate changes
|
(414)
|
(179)
|
|
|
|
|
|
Cash and cash equivalents at the end of the period
|
5,475
|
4,116
|
|
NOTES
TO THE CONDENSED FINANCIAL STATEMENTS
|
(unaudited)
|
1 ACCOUNTING INFORMATION AND POLICIES
|
The
accounting policies adopted are the same as those which were
applied for the previous financial year, except as set out below.
The condensed preliminary financial statements are based on
international accounting standards in conformity with the
requirements of the Companies Act 2006, international financial
reporting standards (IFRS) adopted pursuant to Regulation (EC) No
1606/2002 as it applies in the European Union 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 2019 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.
Unification
On 29
November 2020, the Group reorganised under Unilever PLC
(“PLC”) as its single parent company. This
reorganisation is referred to as “Unification” in the
condensed financial statements.
Prior
to 29 November 2020, the Group operated with two parent companies,
Unilever N.V. (“NV”) and Unilever PLC
(“PLC”), who together with the group companies operated
as a single economic entity. NV and PLC had the same Directors and
were linked by a series of agreements, including an Equalisation
Agreement, which were designed so that the positions of the
shareholders of both companies were as closely as possible as if
they held shares in a single company. NV and PLC together formed a
single reporting entity for the purposes of presenting consolidated
financial statements and group companies included in the
consolidation included those companies controlled by NV or
PLC.
Following
Unification, all group companies are now controlled solely by PLC.
There is no change to the companies included in the group as a
result of Unification, other than NV ceasing to exist.
Unification
was implemented through a Cross-Border Merger, as a result of which
(i) PLC acquired all of the assets, liabilities and legal
relationships of NV by universal succession of title; (ii) NV was
dissolved; and (iii) PLC issued and allotted shares in its capital
to former NV shareholders, except for a very small number of NV
shareholders that chose to receive cash instead of PLC shares. The
shareholders of NV received one new PLC share in exchange for each
NV share held, consistent with the 1 to 1 equalisation ratio as set
out in the Equalisation Agreement.
The
transfer of assets and liabilities from NV to PLC that occurred as
part of the Cross-Border Merger was within the Group so there is no
revaluation of these assets and liabilities in the consolidated
financial statements. The only impact to the consolidated balance
sheet from Unification is within equity due to the cancellation of
NV shares and issuance of PLC shares.
Basis of consolidation
Group
companies included in the consolidated financial statements for
2020 are PLC and all subsidiary undertakings, which are those
entities controlled by PLC. Control exists when the Group has the
power to direct the activities of an entity so as to affect the
return on investment.
Due to
the operational and contractual arrangements referred to above,
prior to Unification NV and PLC formed a single reporting entity
for the purposes of presenting consolidated financial statements.
Accordingly, group companies included in the comparative
information provided in the consolidated financial statements, for
2019, are PLC and NV and those companies controlled by NV or PLC
during those years.
The net
assets and results of acquired businesses are included in the
consolidated financial statements from their respective dates of
acquisition, being the date on which the Group obtains control. As
noted above, Unification did not cause the acquisition by the Group
of any new business. All companies controlled by NV before
Unification are included in the group consolidation for the year
ending 31 December 2020 and they were already group companies prior
to Unification.
Intra-group
transactions and balances are eliminated.
New accounting standards
Interest Rate Benchmark Reform - Amendments to IFRS 9, IAS 39 and
IFRS 7
The
Group has adopted the amendments that modify specific hedge
accounting requirements to allow entities to continue to forecast
future cash flows assuming that the interest rate benchmark will
continue despite ongoing reviews of interest rate benchmark reform.
As a result, there is no requirement for an entity to discontinue
hedge relationships or to reassess the economic relationships
between hedged items and hedging instruments as a result of the
uncertainties of the interest rate benchmark reform. The Group does
not have material derivatives that refer to an interest rate
benchmark so these amendments do not have a material impact on
Unilever.
|
2 SIGNIFICANT ITEMS WITHIN THE INCOME STATEMENT
|
Non-underlying items
These
include non-underlying items within operating profit and
non-underlying items not in operating profit but within net
profit:
●
Non-underlying items within operating
profit are gains or losses on business disposals,
acquisition and disposal related costs, restructuring costs,
impairment and other items within operating profit classified here
due to their nature and frequency.
●
Non-underlying items not in operating profit
but within net profit are net monetary gain/(loss) arising
from hyperinflationary economies and significant and unusual items
in net finance cost, share of profit/(loss) of joint ventures and
associates and taxation.
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
|
|
|
|
2020
|
2019
|
|
Acquisition
and disposal-related credits/(costs)
|
(69)
|
(132)
|
|
Gain/(loss) on disposal of group
companies(a)
|
8
|
70
|
|
Restructuring costs(b)
|
(916)
|
(1,159)
|
|
Impairments(c)
|
-
|
(18)
|
|
Other(d)
|
(87)
|
-
|
|
Non-underlying
items within operating profit before tax
|
(1,064)
|
(1,239)
|
|
|
|
|
|
Tax
on non-underlying items within operating profit
|
272
|
309
|
|
Non-underlying
items within operating profit after tax
|
(792)
|
(930)
|
|
|
|
|
|
Share
of gain on disposal of spreads business in Portugal joint
venture
|
-
|
3
|
|
Interest
related to the UK tax audit of intangible income and centralised
services
|
(56)
|
-
|
|
Net
monetary gain arising from hyperinflationary economies
|
20
|
32
|
|
Non-underlying
items not in operating profit but within net profit before
tax
|
(36)
|
35
|
|
|
|
|
|
Tax
impact of non-underlying items not in operating profit but within
net profit:
|
|
|
|
Taxes
related to share buyback as part of Unification
|
(30)
|
-
|
|
Taxes
related to the UK tax audit of intangible income and centralised
services
|
(53)
|
-
|
|
Taxes
related to the reorganisation of our European business
|
(58)
|
(175)
|
|
Hyperinflation
adjustment for Argentina deferred tax
|
(5)
|
(21)
|
|
Non-underlying
items not in operating profit but within net profit after
tax
|
(182)
|
(161)
|
|
|
|
|
|
Non-underlying items after tax(e)
|
(974)
|
(1,091)
|
|
|
|
|
|
Attributable to:
|
|
|
|
Non-controlling
interests
|
(23)
|
(28)
|
|
Shareholders’
equity
|
(951)
|
(1,063)
|
(a)
2020
gain relates to a laundry bar business disposal. 2019 includes a
gain of €57 million relating to the disposal of
Alsa.
(b)
Restructuring
costs are comprised of various supply chain optimisation projects
and organisational change programmes across markets.
(c)
2019
includes a charge of €18 million relating to an impairment of
goodwill for a local business classified to held for
sale.
(d)
2020
includes a charge of €87 million for litigation matters in
relation to investigations by national competition authorities
including those within Turkey and France.
(e)
Non-underlying
items after tax is calculated as non-underlying items within
operating profit after tax plus non-underlying items not in
operating profit but within net profit after tax.
|
3 SEGMENT INFORMATION – DIVISIONS
|
|
Fourth Quarter
|
Beauty
&
Personal
Care
|
Home
Care
|
Foods
& Refreshment
|
Total
|
|
Turnover (€ million)
|
|
|
|
|
|
2019
|
5,588
|
2,724
|
4,326
|
12,638
|
|
2020
|
5,176
|
2,547
|
4,379
|
12,102
|
|
Change
(%)
|
(7.4)
|
(6.5)
|
1.2
|
(4.2)
|
|
Impact of:
|
|
|
|
|
|
Acquisitions
(%)
|
0.8
|
-
|
3.8
|
1.7
|
|
Disposals
(%)
|
-
|
(0.3)
|
(0.4)
|
(0.2)
|
|
Currency-related items (%), of which:
|
(9.5)
|
(10.5)
|
(7.1)
|
(8.7)
|
|
Exchange rates changes (%)
|
(9.6)
|
(10.7)
|
(8.1)
|
(9.2)
|
|
Extreme price growth in hyperinflationary markets* (%)
|
0.1
|
0.3
|
1.0
|
0.5
|
|
Underlying sales
growth (%)
|
1.5
|
4.7
|
5.4
|
3.5
|
|
Price* (%)
|
0.3
|
(1.4)
|
1.0
|
0.2
|
|
Volume
(%)
|
1.2
|
6.2
|
4.3
|
3.3
|
|
Full Year
|
Beauty
&
Personal
Care
|
Home
Care
|
Foods
& Refreshment
|
Total
|
|
Turnover (€ million)
|
|
|
|
|
|
2019
|
21,868
|
10,825
|
19,287
|
51,980
|
|
2020
|
21,124
|
10,460
|
19,140
|
50,724
|
|
Change
(%)
|
(3.4)
|
(3.4)
|
(0.8)
|
(2.4)
|
|
Impact of:
|
|
|
|
|
|
Acquisitions
(%)
|
0.9
|
0.2
|
2.7
|
1.4
|
|
Disposals
(%)
|
-
|
(0.2)
|
(0.4)
|
(0.2)
|
|
Currency-related items (%), of which:
|
(5.4)
|
(7.5)
|
(4.2)
|
(5.4)
|
|
Exchange rate changes (%)
|
(5.6)
|
(7.8)
|
(4.6)
|
(5.7)
|
|
Extreme price growth in hyperinflationary markets* (%)
|
0.2
|
0.3
|
0.5
|
0.3
|
|
Underlying sales growth
(%)
|
1.2
|
4.5
|
1.3
|
1.9
|
|
Price* (%)
|
-
|
(0.6)
|
1.1
|
0.3
|
|
Volume
(%)
|
1.2
|
5.1
|
0.1
|
1.6
|
|
|
|
|
|
|
|
Operating profit
(€ million)
|
|
|
|
|
|
2019
|
4,520
|
1,377
|
2,811
|
8,708
|
|
2020
|
4,311
|
1,243
|
2,749
|
8,303
|
|
Underlying operating
profit (€
million)
|
|
|
|
|
|
2019
|
4,960
|
1,605
|
3,382
|
9,947
|
|
2020
|
4,591
|
1,519
|
3,257
|
9,367
|
|
Operating margin
(%)
|
|
|
|
|
|
2019
|
20.7
|
12.7
|
14.6
|
16.8
|
|
2020
|
20.4
|
11.9
|
14.4
|
16.4
|
|
Underlying operating
margin (%)
|
|
|
|
|
|
2019
|
22.7
|
14.8
|
17.5
|
19.1
|
|
2020
|
21.7
|
14.5
|
17.0
|
18.5
|
*
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)
|
|
|
|
|
|
2019
|
5,866
|
4,181
|
2,591
|
12,638
|
|
2020
|
5,649
|
3,884
|
2,569
|
12,102
|
|
Change
(%)
|
(3.7)
|
(7.1)
|
(0.8)
|
(4.2)
|
|
Impact of:
|
|
|
|
|
|
Acquisitions
(%)
|
3.0
|
1.0
|
-
|
1.7
|
|
Disposals
(%)
|
(0.2)
|
(0.3)
|
(0.1)
|
(0.2)
|
|
Currency-related items (%), of which:
|
(8.6)
|
(13.5)
|
(1.5)
|
(8.7)
|
|
Exchange rates changes (%)
|
(8.8)
|
(14.3)
|
(1.5)
|
(9.2)
|
|
Extreme price growth in hyperinflationary markets* (%)
|
0.3
|
1.0
|
-
|
0.5
|
|
Underlying sales growth
(%)
|
2.6
|
6.5
|
0.8
|
3.5
|
|
Price* (%)
|
0.5
|
0.5
|
(1.1)
|
0.2
|
|
Volume
(%)
|
2.1
|
6.0
|
1.8
|
3.3
|
|
|
|
|
|
|
|
Full Year
|
Asia /
AMET /
RUB
|
The
Americas
|
Europe
|
Total
|
|
Turnover (€ million)
|
|
|
|
|
|
2019
|
24,129
|
16,482
|
11,369
|
51,980
|
|
2020
|
23,440
|
16,080
|
11,204
|
50,724
|
|
Change
(%)
|
(2.9)
|
(2.4)
|
(1.5)
|
(2.4)
|
|
Impact of:
|
|
|
|
|
|
Acquisitions
(%)
|
2.2
|
1.0
|
0.3
|
1.4
|
|
Disposals
(%)
|
(0.1)
|
(0.2)
|
(0.2)
|
(0.2)
|
|
Currency- related items (%), of which:
|
(5.1)
|
(8.9)
|
(0.5)
|
(5.4)
|
|
Exchange rates changes (%)
|
(5.3)
|
(9.5)
|
(0.5)
|
(5.7)
|
|
Extreme price growth in hyperinflationary markets* (%)
|
0.2
|
0.7
|
-
|
0.3
|
|
Underlying sales growth
(%)
|
0.4
|
6.2
|
(1.0)
|
1.9
|
|
Price* (%)
|
0.4
|
1.1
|
(1.2)
|
0.3
|
|
Volume
(%)
|
-
|
5.1
|
0.2
|
1.6
|
|
|
|
|
|
|
|
Operating profit
(€ million)
|
|
|
|
|
|
2019
|
4,418
|
2,683
|
1,607
|
8,708
|
|
2020
|
4,137
|
2,723
|
1,443
|
8,303
|
|
Underlying operating
profit (€
million)
|
|
|
|
|
|
2019
|
4,857
|
3,078
|
2,012
|
9,947
|
|
2020
|
4,546
|
2,973
|
1,848
|
9,367
|
|
Operating margin
(%)
|
|
|
|
|
|
2019
|
18.3
|
16.3
|
14.1
|
16.8
|
|
2020
|
17.6
|
16.9
|
12.9
|
16.4
|
|
Underlying operating
margin (%)
|
|
|
|
|
|
2019
|
20.1
|
18.7
|
17.7
|
19.1
|
|
2020
|
19.4
|
18.5
|
16.5
|
18.5
|
* 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 2020 is 24.6%, compared with the 2019 rate
of 27.9%. The decrease was primarily driven by structural
reductions in Indian and Indonesian tax rates; tax settlements and
other one-off benefits; and replacement of Indian distribution tax
with a dividend withholding tax.
Tax
effects of components of other comprehensive income were as
follows:
|
€ million
|
Full
Year 2020
|
Full
Year 2019
|
||||
|
|
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
|
77
|
1
|
78
|
35
|
(6)
|
29
|
|
Cash
flow hedges
|
87
|
(27)
|
60
|
198
|
(22)
|
176
|
|
Remeasurements
of defined benefit pension plans
|
250
|
(35)
|
215
|
381
|
(28)
|
353
|
|
Currency
retranslation gains/(losses)
|
(2,646)
|
56
|
(2,590)
|
6
|
(21)
|
(15)
|
|
Other comprehensive income
|
(2,232)
|
(5)
|
(2,237)
|
620
|
(77)
|
543
|
|
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 plans by employees.
Earnings
per share for total operations for the twelve months were
calculated as follows:
|
|
2020
|
2019
|
|
Combined EPS – Basic
|
|
|
|
Net profit attributable to shareholders’ equity
(€ million)
|
5,581
|
5,625
|
|
Average number of shares (millions of share
units)(a)
|
2,620.3
|
2,616.8
|
|
Combined EPS – basic (€)
|
2.13
|
2.15
|
|
|
|
|
|
Combined EPS – Diluted
|
|
|
|
Net profit attributable to shareholders’ equity
(€ million)
|
5,581
|
5,625
|
|
Adjusted average number of shares (millions of share
units)(a)
|
2,629.8
|
2,626.7
|
|
Combined EPS – diluted (€)
|
2.12
|
2.14
|
|
|
|
|
|
Underlying EPS
|
|
|
|
Net profit attributable to shareholders’ equity
(€ million)
|
5,581
|
5,625
|
|
Post tax impact of non-underlying items attributable to
shareholders’ equity (see note 2)
|
951
|
1,063
|
|
Underlying profit attributable to shareholders’
equity
|
6,532
|
6,688
|
|
Adjusted average number of shares (millions of share
units)(a)
|
2,629.8
|
2,626.7
|
|
Underlying EPS – diluted (€)
|
2.48
|
2.55
|
(a)
In
the calculation of the weighted average number of share units, NV
shares are included only for the period they were issued, until 29
November 2020. Following Unification (see note 1 for more
information on Unification), all NV shares were cancelled and the
shareholders of NV were issued PLC ordinary shares on a 1:1 ratio.
Accordingly, there is no significant impact on the calculation of
average number of share units.
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 2019 (net of treasury
shares)
|
|
2,616.8
|
|
Net movements in shares under incentive schemes
|
|
5.2
|
|
Number of shares at 31 December 2020
|
|
2,622.0
|
|
7 ORDINARY SHARE CAPITAL
|
Following
implementation of Unification (see note 1 for more information on
Unification), PLC is now the single parent company of the Unilever
Group. Under the terms of Unification, all the NV ordinary shares
were cancelled and NV shareholders received one new PLC ordinary
share in exchange for each NV share owned. Unification resulted in
the issue of 1,460,713,122 new PLC ordinary shares. As at 31
December 2020 2,629,243,772 PLC ordinary shares were in issue and
no NV ordinary shares were in issue.
|
8 ACQUISITIONS AND DISPOSALS
|
In 2020 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 2020 acquisitions
is €6,337 million (2019: €1,167 million for
acquisitions completed during that year). Total consideration for
2020 disposals is €35 million (2019: €169 million for
disposals completed during that year).
|
Deal
completion date
|
Acquired/Disposed
business
|
|
1
April 2020
|
Acquired
the health food drinks business of GlaxoSmithKline plc in India and
20 other predominantly Asian markets (“the Main Horlicks
Acquisition”). The acquisition added leading brands such as
Horlicks and Boost in certain markets, increasing Unilever’s
presence in functional nutrition. As a significant acquisition for
the Group, further details are disclosed below.
|
|
25
June 2020
|
Acquired
Vwash, a leading intimate hygiene business in India. The
acquisition complements our beauty and personal care portfolio and
increase our presence in fast-growing segments in
India.
|
|
30
June 2020
|
The
Group acquired 82% of GlaxoSmithKline Bangladesh Limited, a health
food drink business in Bangladesh. The Bangladesh Horlicks
Acquisition was a separate transaction to the Main Horlicks
Acquisition.
|
|
15
July 2020
|
Sold
the ice cream business in Chile to Carozzi.
|
|
1
October 2020
|
Acquired
Liquid IV, a US-based health-science nutrition and wellness
company, known for its portfolio of electrolyte drink mixes that
enhance rapid hydration. This acquisition increases our presence in
functional nutrition.
|
|
23
December 2020
|
Acquired
SmartyPants Vitamins, a vitamin, mineral and supplement company
based in the US. The acquisition complements Unilever’s
existing portfolio in functional nutrition.
|
The Main Horlicks Acquisition
The
Main Horlicks Acquisition was composed of the following related
transactions on 1 April 2020:
●
Hindustan Unilever
Limited (HUL), a subsidiary of the Group, obtained control of the
business of GlaxoSmithKline Consumer Healthcare Limited (GSKCH) via
an all equity merger under which 4.39 shares of HUL were allotted
for every share of GSKCH;
●
HUL purchased the
Horlicks intellectual property rights, being mainly legal rights to
the Horlicks brand (the ‘HFD IP’) for India and
Unilever N.V. and Unilever PLC purchased the HFD IP outside of
India and Bangladesh (subsequently the Bangladesh HFD IP was
acquired by Unilever PLC in a separate transaction);
and
●
Unilever Foods
(Malaysia) Sdn Bhd and Unilever Asia Pacific Limited (Singapore)
purchased the Horlicks commercial operations of GSK in 20 other
predominantly Asian markets (“Local Distribution
Assets”).
The
total consideration paid was €5,294 million comprised of
€449 million in cash and €4,845 million in shares of
Hindustan Unilever Limited valued based on the share price of HUL
on the completion date and the exchange rate on the same date
(83.05 INR/€). The provisional fair value of net assets for
the acquisition that is recognised on the balance sheet is
€3,204 million. Balances are provisional as we are finalising
our review of the asset valuations. More information related to
each major class of assets and liabilities acquired is provided on
page 23.
At the
date of acquisition we expected around €1.3 billion of the
goodwill to be deductible for tax purposes. While we believe there
is a legal basis to claim the Horlicks goodwill as tax deductible,
we note that the Indian Budget on 1 February 2021 includes a
proposal to exclude goodwill from the definition of tax depreciable
assets effective 1 April 2020. If enacted this would have no
material impact on the income statement.
The
gross contractual value of trade and other receivables as at the
dates of acquisition amounted to €77 million which is
expected to be fully recoverable.
Within
the acquired net assets, contingent liabilities amounting to
€123 million in respect of ongoing litigation against
GlaxoSmithKline Consumer Healthcare Limited have been recognised
based on management’s estimate of the values of exposures and
their assessment of the probability of the related claims being
settled by the Group. The contingent liabilities mainly relate to
direct and indirect tax disputes with the Indian tax authorities.
There are several matters being disputed and in each case we
believe that the likelihood that the Indian tax authorities will
ultimately prevail is no higher than moderate, however we expect
that most of these disputes will not be resolved for several years.
Contingent assets of €73 million are also recognised,
measured on the same basis, for the Group’s right to future
indemnification by GlaxoSmithKline Pte Limited and Horlicks Limited
in relation to certain claims.
Impact of dilution of Group interest in Hindustan Unilever
Limited
The
acquisition of GSKCH by HUL was settled through the issue of 184.6
million new shares of Hindustan Unilever Limited and so resulted in
dilution of Unilever’s interest in Hindustan Unilever Limited
from 67.2% to 61.9%. The table below shows the impact of the
decrease in shareholding on the equity attributable to shareholders
of the Group.
|
|
€
million
|
|
67.2% share of HUL’s net assets acquired before acquisition
of GSKCH
|
718
|
|
61.9% share of HUL’s net assets acquired after acquisition of
GSKCH
|
661
|
|
Loss recognised in equity due to dilution
|
(57)
|
|
Gain arising from proportionate share of GSKCH’s net assets
acquired
|
3,001
|
|
Net gain arising from the Main Horlicks Acquisition recognized in
equity
|
2,944
|
Acquisition-related
costs of €42 million have been recorded within non-underlying
items in the consolidated income statement for 2020 (2019:
€12 million). Total costs relating to the issuance of shares
amounting to €5 million have been recognised against equity
by Hindustan Unilever Limited.
The
Main Horlicks Acquisition contributed €415 million to Group
turnover and €119 million to Group operating profit since the
acquisition date. If the acquisition had taken place at the
beginning of the year, Group turnover would have been €50,867
million and Group operating profit would have been €8,342
million.
Impact of all acquisitions
The
overall impact of the Main Horlicks Acquisition and the other
acquisitions on the consolidated income statement and consolidated
balance sheet is as follows:
Effect on consolidated income statement
The
acquisition deals completed in 2020 have contributed €476
million to Group revenue and €124 million to Group operating
profit since the relevant acquisition dates. If the acquisition
deals completed in 2020 had all taken place at the beginning of the
year, Group revenue would have been €51,116 million and Group
operating profit would have been €8,371 million.
Effect on consolidated balance sheet
The
following table summarises the consideration and net assets
acquired for the Group’s Main Horlicks Acquisition and other
acquisitions. The fair values currently used for opening balances
of all acquisitions made in 2020 are provisional. Balances remain
provisional due to missing relevant information about facts and
circumstances that existed as of the acquisition date and where
valuation or review work is still ongoing.
|
|
Main
Horlicks Acquisition
€
million
|
Other
acquisitions
€
million
|
Total
2020
€
million
|
|
Intangible assets
|
3,345
|
737
|
4,082
|
|
Other non-current assets
|
249
|
35
|
284
|
|
Trade and other receivables
|
77
|
26
|
103
|
|
Other current assets(a)
|
560
|
95
|
655
|
|
Non-current liabilities(b)
|
(905)
|
(202)
|
(1,107)
|
|
Current liabilities
|
(122)
|
(38)
|
(160)
|
|
Net assets acquired
|
3,204
|
653
|
3,857
|
|
Non-controlling interest
|
-
|
(27)
|
(27)
|
|
Goodwill
|
2,090
|
417
|
2,507
|
|
Exchange rate gain/(loss) on cash flow hedges
|
-
|
-
|
-
|
|
Total consideration
|
5,294
|
1,043
|
6,337
|
|
Of which:
|
|
|
|
|
Consideration
paid
|
5,294
|
1,019
|
6,313
|
|
Deferred
consideration
|
-
|
24
|
24
|
(a)
Other
current assets include financial assets of €463 million and
cash of €36 million related to the Main Horlicks
Acquisition.
(b)
Non-current
liabilities include deferred tax of €746 million related to
the Main Horlicks Acquisition.
No material contingent liabilities were acquired in the other
acquisitions described above.
|
9 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 2020 and
2019. The Group’s cash resources and other financial assets
are shown below.
|
€ million
|
31
December 2020
|
31
December 2019
|
||||
|
Current
|
Non-current
|
Total
|
Current
|
Non-current
|
Total
|
|
|
Cash
and cash equivalents
|
|
|
|
|
|
|
|
Cash at
bank and in hand
|
2,764
|
-
|
2,764
|
2,457
|
-
|
2,457
|
|
Short-term
deposits(a)
|
2,764
|
-
|
2,764
|
1,693
|
-
|
1,693
|
|
Other
cash equivalents
|
20
|
-
|
20
|
35
|
-
|
35
|
|
|
5,548
|
-
|
5,548
|
4,185
|
-
|
4,185
|
|
|
|
|
|
|
|
|
|
Other financial assets
|
|
|
|
|
|
|
|
Financial assets at
amortised cost(b)
|
468
|
138
|
606
|
578
|
220
|
798
|
|
Financial assets at
fair value through other comprehensive income(c)
|
9
|
361
|
370
|
-
|
266
|
266
|
|
Financial assets at
fair value through profit or loss:
|
|
|
|
|
|
|
|
Derivatives
|
59
|
21
|
80
|
20
|
114
|
134
|
|
Other(d)
|
272
|
356
|
628
|
309
|
274
|
583
|
|
|
808
|
876
|
1,684
|
907
|
874
|
1,781
|
|
Total financial assets(e)
|
6,356
|
876
|
7,232
|
5,092
|
874
|
5,966
|
(a)
Short-term
deposits typically have maturity of up to 3 months.
(b)
Current
financial assets at amortised cost include short term deposits with
banks with maturities longer than three months excluding deposits
which are part of a recognised cash management process and loans to
joint venture entities. Non-current financial assets at amortised
cost include judicial deposits of €101 million (2019:
€136 million).
(c)
Included
within non-current financial assets at fair value through other
comprehensive income are equity investments of €356
million
(2019:
€244 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, option
over non-controlling interest in a subsidiary in Hong Kong and
investments in a number of companies and financial institutions in
North America, North Asia, South Asia and Europe.
(e)
Financial
assets exclude trade and other current receivables.
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 2020
|
As at
31 December 2019
|
As at
31 December 2020
|
As at
31 December 2019
|
|
|
Financial assets
|
|
|
|
|
|
Cash
and cash equivalents
|
5,548
|
4,185
|
5,548
|
4,185
|
|
Financial assets at
amortised cost
|
606
|
798
|
606
|
798
|
|
Financial assets at
fair value through other comprehensive income
|
370
|
266
|
370
|
266
|
|
Financial assets at
fair value through profit and loss:
|
|
|
|
|
|
Derivatives
|
80
|
134
|
80
|
134
|
|
Other
|
628
|
583
|
628
|
583
|
|
|
7,232
|
5,966
|
7,232
|
5,966
|
|
Financial liabilities
|
|
|
|
|
|
Bank
loans and overdrafts
|
(411)
|
(853)
|
(411)
|
(853)
|
|
Bonds
and other loans
|
(26,936)
|
(26,525)
|
(24,585)
|
(25,032)
|
|
Lease
liabilities
|
(1,771)
|
(1,919)
|
(1,771)
|
(1,919)
|
|
Derivatives
|
(315)
|
(270)
|
(315)
|
(270)
|
|
Other
financial liabilities
|
(223)
|
(183)
|
(223)
|
(183)
|
|
|
(29,656)
|
(29,750)
|
(27,305)
|
(28,257)
|
|
€
million
|
Level
1
|
Level
2
|
Level
3
|
Level
1
|
Level
2
|
Level
3
|
|
|
As at
31 December 2020
|
As at
31 December 2019
|
||||
|
Assets at fair value
|
|
|
|
|
|
|
|
Financial
assets at fair value through other comprehensive
income
|
5
|
3
|
362
|
7
|
4
|
255
|
|
Financial
assets at fair value through profit or loss:
|
|
|
|
|
|
|
|
Derivatives(a)
|
-
|
158
|
-
|
-
|
208
|
-
|
|
Other
|
300
|
-
|
328
|
311
|
-
|
272
|
|
Liabilities at fair value
|
|
|
|
|
|
|
|
Derivatives(b)
|
-
|
(418)
|
-
|
-
|
(326)
|
-
|
|
Contingent
consideration
|
-
|
-
|
(140)
|
-
|
-
|
(154)
|
(a)
Includes
€78 million (2019: €74 million) derivatives, reported
within trade receivables, that hedge trading
activities.
(b)
Includes
€(103) million (2019: €(56) 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
2019. There were also no significant movements between the fair
value hierarchy classifications since 31 December
2019.
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 2019.
|
10 DIVIDENDS
|
The
Board has declared a quarterly interim dividend for Q4 2020 of
£0.3760 per Unilever PLC ordinary share or €0.4268 per
Unilever PLC ordinary share at the applicable exchange rate issued
by WM/Reuters on 2 February 2021.
The
following amounts will be paid in respect of this quarterly interim
dividend on the relevant payment date:
Per
Unilever PLC ordinary share (traded on the London Stock
Exchange): £ 0.3760
Per
Unilever PLC ordinary share (traded on Euronext in
Amsterdam): € 0.4268
Per
Unilever PLC American Depositary
Receipt: US$ 0.5139
The
euro and US dollar amounts above have been determined using the
applicable exchange rates issued by WM/Reuters on
2
February 2021.
US
dollar cheques for the quarterly interim dividend will be mailed on
17 March 2021 to holders of record at the close of business on 26
February 2021.
The
quarterly dividend calendar for the remainder of 2021 will be as
follows:
|
|
Announcement
Date
|
Ex-Dividend
Date
|
Record
Date
|
Payment
Date
|
|
Q4 2020
Dividend
|
4
February 2021
|
25
February 2021
|
26
February 2021
|
17
March 2021
|
|
|
|
|
|
|
|
Q1 2021
Dividend
|
29
April 2021
|
20 May
2021
|
21 May
2021
|
10 June
2021
|
|
|
|
|
|
|
|
Q2 2021
Dividend
|
22 July
2021
|
5
August 2021
|
6
August 2021
|
8
September 2021
|
|
|
|
|
|
|
|
Q3 2021
Dividend
|
21
October 2021
|
4
November 2021
|
5
November 2021
|
1
December 2021
|
|
11 EVENTS AFTER THE BALANCE SHEET DATE
|
There were no material post balance sheet events other than those
mentioned elsewhere in this report.