DISCLAIMERNOTES TO THE ANNUAL REPORT AND ACCOUNTSThis PDF version of the Unilever Annual Report and Accounts 2013 is an exact copy of theprinted document provided to Unilever’s shareholders.Certain sections of the Unilever Annual Report and Accounts 2013 have been audited.These are on pages 90 to 135, 137 to 141, 143 to 145, and those parts noted as audited withinthe Directors’ Remuneration Report on pages 73 to 81.The maintenance and integrity of the Unilever website is the responsibility of the Directors; thework carried out by the auditors does not involve consideration of these matters. Accordingly,the auditors accept no responsibility for any changes that may have occurred to the financialstatements since they were initially placed on the website.Legislation in the United Kingdom and the Netherlands governing the preparation anddissemination of financial statements may differ from legislation in other jurisdictions.DISCLAIMERExcept where you are a shareholder, this material is provided for information purposes onlyand is not, in particular, intended to confer any legal rights on you.This Annual Report and Accounts does not constitute an invitation to invest in Unilever shares.Any decisions you make in reliance on this information are solely your responsibility.The information is given as of the dates specified, is not updated, and any forward-lookingstatements are made subject to the reservations specified on the final page of the Report.Unilever accepts no responsibility for any information on other websites that may be accessedfrom this site by hyperlinks.
UNILEVERANNUAL REPORT AND ACCOUNTS 2013PROJECT SUNLIGHT:HELPING TO CREATEA BRIGHTER FUTUREMaking sustainable living commonplaceWe believe there has never been a better time to create a betterfuture for our children. A world where no child goes to bed hungry,where every home has clean drinking water and where preventablediseases become a thing of the past. Project Sunlight bringstogether the work of our brands to help as many people as possibletake small sustainable steps that add up to building a world whereeveryone lives well and within the natural limits of the planet.Get involved at:www.projectsunlight.comUNILEVER N.V.Weena 455, PO Box 7603000 DK RotterdamThe NetherlandsT 31 (0)10 217 4000F 31 (0)10 217 4798Commercial Register RotterdamNumber: 24051830UNILEVER PLC100 Victoria EmbankmentLondon EC4Y 0DYUnited KingdomT 44 (0)20 7822 5252F 44 (0)20 7822 5951UNILEVER PLCREGISTERED OFFICEUnilever PLCPort SunlightWirralMerseyside CH62 4ZDUnited KingdomRegistered in England and WalesCompany Number: 41424For further information on oursocial, economic and environmentalperformance, please visit our website:WWW.UNILEVER.COMANNUAL REPORT AND ACCOUNTS 2013MAKING SUSTAINABLELIVING COMMONPLACE
OUR PURPOSE TO MAKESUSTAINABLE LIVINGCOMMONPLACEWe work to create a better future every day, with brands and servicesthat help people feel good, look good and get more out of life.Our first priority is to our consumers – then customers, employees,suppliers and communities. When we fulfil our responsibilities tothem, we believe that our shareholders will be rewarded.CAUTIONARY STATEMENTUNILEVER SUSTAINABLE LIVING PLAN (USLP)Our Annual Report and Accounts 2013 will be complemented by the online UnileverSustainable Living Report for 2013 to be published in April 2014. This will detailperformance against our USLP targets for the period 1 January to 31 December 2013except where indicated otherwise. The online report will also cover the scope of ourassurance programme and a wealth of information on our approach to running aresponsible business.See www.unilever.com/sustainable-livingOTHER INFORMATIONThe brand names shown in this report are trademarks owned by or licensedto companies within the Unilever Group. This report contains certain statementsthat are neither reported financial results nor other historical information. Thesestatements are forward-looking statements, including within the meaning of theUnited States Private Securities Litigation Reform Act of 1995. Actual results maydiffer materially from those disclosed in our forward-looking statements. For adescription of factors that could affect future results, reference should be madeto the full ‘Cautionary statement’ on the inside back cover and to the sectionentitled ‘Risks’ on pages 34 to 39.For information about our non-GAAP measures, see pages 32 and 33. In thisreport we make reference to Unilever’s and other third-party websites, andto social media sites. Information on websites and/or social media sites isnot incorporated herein and does not form part of this document. This reportcomprises regulated information within the meaning of sections 1:1 and5:25c of the Act on Financial Supervision (“Wet op het financieel toezicht(Wft)”) in the Netherlands.This document may contain forward-looking statements, including ‘forward-looking statements’ within the meaning of the United States Private SecuritiesLitigation Reform Act of 1995. Words such as ‘will’, ‘aim’, ‘expects’, ‘anticipates’, ‘intends’, ‘looks’, ‘believes’, ‘vision’, or the negative of these terms and othersimilar expressions of future performance or results, and their negatives, are intended to identify such forward-looking statements. These forward-lookingstatements are based upon current expectations and assumptions regarding anticipated developments and other factors affecting the Group. They arenot 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 materiallyfrom those expressed or implied by these forward-looking statements. Among other risks and uncertainties, the material or principal factors which causeactual results to differ materially are: Unilever’s global brands not meeting consumer preferences; Unilever’s ability to innovate and remain competitive;Unilever’s investment choices in its portfolio management; inability to find sustainable solutions to support long-term growth; customer relationships; therecruitment and retention of talented employees; disruptions in our supply chain; the cost of raw materials and commodities; the production of safe and highquality products; secure and reliable IT infrastructure; successful execution of acquisitions, divestitures and business transformation projects; economic andpolitical risks and natural disasters; financial risks; failure to meet high and ethical standards; and managing regulatory, tax and legal matters. Furtherdetails of potential risks and uncertainties affecting the Group are described in the Group’s filings with the London Stock Exchange, Euronext Amsterdam andthe US Securities and Exchange Commission, including in the Group’s Annual Report on Form 20-F for the year ended 31 December 2013 and the Annual Reportand Accounts 2013. These forward-looking statements speak only as of the date of this document. Except as required by any applicable law or regulation, theGroup expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein toreflect any change in the Group’s expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.This document is not prepared in accordance with US GAAP and should not therefore be relied upon by readers as such. The Group’s Annual Reporton Form 20-F for 2013 is separately filed with the US Securities and Exchange Commission and is available on our corporate website www.unilever.com.Any information on or linked from our or third-party websites is not incorporated by reference into this document or the Annual Report on Form 20-F.In addition, a printed copy of the Annual Report on Form 20-F is available, free of charge, upon request to Unilever, Investor Relations Department,100 Victoria Embankment, London EC4Y 0DY, United Kingdom.Designed and produced by Unilever Communications in conjunction with Addison Group at www.addison-group.net.Photography by Samuel Olusegun Ajayi, Oliver Edwards, Igor Emmerich, Philip Gatward, Joseph Marcantonio, Chris Moyse, Gandhi Prabowo, Elise Romany,Rian Ardi Wakito, Jessie Watford, Yan Zhen, Na Lata (Brazil), The Edge Picture Company, The Pack Shot Company and from the Unilever image library andcontent hub.Printed at Pureprint Group, ISO 14001. FSC certified and CarbonNeutral .This document forms part of the Unilever Annual Report and Accounts 2013 suite of documents and is printed on Amadeus 100% Recycled Silk and Offset.These papers have been exclusively supplied by Denmaur Independent Papers which has offset the carbon produced by the production and delivery of themto the printer.These papers are 100% recycled and manufactured using de-inked post-consumer waste. All of the pulp is bleached using an elemental chlorine free process(ECF). Printed in the UK by Pureprint using its alcofree and pureprint environmental printing technology. Vegetable inks were used throughout. Pureprint isa CarbonNeutral company. Both the manufacturing mill and the printer are registered to the Environmental Management System ISO 14001 and are ForestStewardship Council (FSC) chain-of-custody certified.If you have finished with this document and no longer wish to retain it, please pass it on to other interested readers or dispose of it in your recycled paper waste.Thank you.
CONTENTSOUR VISION DOUBLETHE SIZE OF THE BUSINESS,WHILST REDUCING OURENVIRONMENTAL FOOTPRINTAND INCREASING OURPOSITIVE SOCIAL IMPACTWe will lead for responsible growth, inspiring people to take smalleveryday actions that will add up to a big difference.We will grow by winning shares and building markets everywhere.POSITIVESOCIAL IMPACTDOUBLE THEBUSINESSStrategic report2 Unilever at a glance4 Chairman’s statement6 Chief Executive Officer’s review8 Our business model10 Our brands14 Our people18 Our operations22 Unilever Sustainable Living Plan26 Financial review 201334 RisksGovernance40 Biographies42 Corporate governance53 Report of the Audit Committee56 Report of the CorporateResponsibility Committee58 Report of the Nominating andCorporate Governance Committee60 Directors’ Remuneration ReportFinancial statements85 Statement of Directors’responsibilities86 Independent auditors’ reports90 Consolidated income statement90 Consolidated statement ofcomprehensive income91 Consolidated statement of changesin equity92 Consolidated balance sheet93 Consolidated cash flow statement94 Notes to the consolidated financialstatements136 Company accountsShareholder information146 Financial calendar146 Contact details147 Website147 Share registration147 Publications148 IndexREDUCEENVIRONMENTALFOOTPRINTUnilever Annual Report and Accounts 2013Strategic report1
UNILEVERAT A GLANCEWHO WE AREUnilever is one of the world’s leadingfast-moving consumer goods companies.Our products are sold in over 190countries and, on any given day, 2 billionconsumers worldwide use them. We ownsome of the best known and best lovedbrands, from long-established nameslike Dove, Sunlight, Knorr and Lipton tonew innovations such as Pureit, ourunique in-home water purifier. We arepassionate about them and proud of theway they help people get more out of life.WHAT WE DOWe build our brands and develop ourproducts through extensive consumerinsight, relentless innovation, andcrystal-clear design and marketing.This is a powerful blend that helps usexcite and inspire customers andconsumers in established and emergingmarkets in every corner of the globe. Weare committed to making sustainableliving commonplace and work to developnew ways of doing business that willreduce our environmental footprint andincrease our positive social impact.OPERATIONAL HIGHLIGHTSIn 2013 we again demonstrated the progresswe are making in transforming Unilever intoa sustainable growth company. Turnoverwas 49.8 billion, down 3.0% with a negativeimpact from foreign exchange of 5.9% andnet acquisitions and disposals of 1.1%.Underlying sales grew 4.3%. Gross marginrose 1.1 percentage points driven by bettermix, margin accretive innovations andsavings. Despite higher spend onadvertising and promotions, core operatingmargin rose by 0.4 percentage points.TURNOVERTOTAL DIVIDEND PER SHARE 7972013Turnover down 3.0% with underlying salesgrowth offset by currency movements.2Strategic report Underlying sales growth of 4.3% waswell balanced with volume 2.5% andprice 1.8%. Emerging markets, now 57% of ourbusiness, grew underlying sales by8.7% but were flat in current currency. Developed markets reported negativeunderlying sales growth for the year of1.3%, with Europe down 1.1% and NorthAmerica 1.5%. 0.782009 0.822010 0.882011 0.952012Dividends increased 10% in 2013. 1.052013
OUR KEY PERFORMANCE INDICATORSdiversity and employee engagement are being reported for thefirst time. In 2012, we also reported against four other key nonfinancial indicators which are no longer reported as KPIs but areincorporated into the reporting against our Unilever SustainableLiving Plan (USLP) commitments on pages 22 and 23. They willcontinue to be included in our online Unilever Sustainable LivingReport for 2013 to be published in April 2014.We report our performance against the four key financial and sixkey non-financial performance indicators below. Our financial KPIsare described in the Financial review starting on page 26 and ournon-financial KPIs are on pages 14, 16 and 20. Total recordableaccident frequency rate and the three manufacturing KPIs werereported in 2012, while the two people-related KPIs coveringFINANCIALUNDERLYING SALESGROWTHCORE OPERATINGMARGINUNDERLYING VOLUMEGROWTHFREE CASH FLOW20132013201320132012: 6.9%2012: 13.7%‡2012: 3.4%2012: 4.3 billion4.3%14.1%Underlying sales growth over fiveyears has