Ir Unilever AR12 Tcm72-348646

8/13/2019 Ir Unilever AR12 Tcm72-348646

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DISLAIMER

Notes to the Annual Report and Accounts

Ths PDF verson of the Unlever Annual Report and Accounts 2012 s an exact copy of the

document provded to Unlevers shareholders

ertan sectons of the Unlever Annual Report and Accounts 2012 have been audted

These are on pages 86 to 131, 133 to 136, 139 to 141, and those parts noted as audted wthnthe Drectors Remuneraton Report on pages 77 to 81

The mantenance and ntegrty of the Unlever webste s the responsblty of the Drectors the

work carred out by the audtors does not nvolve consderaton of these matters Accordngly,

the audtors accept no responsblty for any changes that may have occurred to the fnancal

statements snce they were ntally placed on the webste

Legslaton n the Unted Kngdom and the Netherlands governng the preparaton and

dssemnaton of fnancal statements may dffer from legslaton n other ursdctons

Dsclamer

Except where you are a shareholder, ths materal s provded for nformaton purposes only

and s not, n partcular, ntended to confer any legal rghts on you

Ths Annual Report and Accounts does not consttute an nvtaton to nvest n Unlever shares

Any decsons you make n relance on ths nformaton are solely your responsblty

The nformaton s gven as of the dates specfed, s not updated, and any forward-lookng

statements are made subect to the reservatons specfed on the fnal page of the Report

Unlever accepts no responsblty for any nformaton on other webstes that may be accessed

from ths ste by hyperlnks


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ANNUAL REPORTAND AOUNTS 2012

MAKIN

SUSTAINABLE LIVINOMMONPLAE


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BEN & JERRYSMakes great ce creamwhle supportngsupplers aroundthe world through tscommtment to achevngFartrade certfcatonfor every flavour bythe end of 2013

DOVEHelps women torealse ther personalpotental for beauty andencourages men to takebetter care of themselvesby engagng them wthproducts that delversuperor care

OUR PURPOSETO MAKE SUSTAINABLELIVIN OMMONPLAEWe work to create a better future every day, wth

brands and servces that help people feel good,look good and get more out of lfe

Our frst prorty s to our consumers thencustomers, employees, supplers and communtesWhen we fulfl our responsbltes to them, webeleve that our shareholders wll be rewarded

PUREITImproves lves byprovdng peoplewth safe, affordabledrnkng water wheresupples are of poorqualty, wthout theneed for gas, electrctyor a pressursedwater supply

OUR BRANDS IN ATIONUNILEVER OWNS SOME OF THE WORLDS BEST KNOWN AND BEST LOVED BRANDSTO FIND OUT MORE O TO WWWUNILEVEROM/BRANDS-IN-ATION

KNORRProvdes great tastng,nutrtous meals forfamles every day whlefundng sustanabltyproects for supplersand smallholderfarmers through ts1 mllon SustanabltyPartnershp Fund

OMO/PERSILIs concentratng lquddetergents, to delvertough stan-removngperformance, whle usngless water and energyn manufacture andtransportaton

ABOUTUNILEVER

EXAMPLES OF OURPURPOSE DRIVEN BRANDS


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Our Annual Reportand Accounts 2012 s

complemented by

1) The Unlever SustanableLvng Plan Progress Report

2012, a prnted report outlnngperformance aganst our

USLP targets for the perod

1 January-31 December 2012, to bepublshed n Aprl 2013 and

2) The onlne Unlever SustanableLvng Report for 2012, whch covers

our USLP targets, the scope of ourassurance programme and a wealth of

nformaton on our approach to runnnga responsble busness

See wwwunlevercom/sustanable-lvng

Other nformatonThe brand names shown n ths report are trademarks owned by or

lcensed to companes wthn the Unlever roup Ths documentcontans certan statements that are nether reported fnancal results

nor other hstorcal nformaton These statements are forward-lookngstatements, ncludng wthn the meanng of the Unted States Prvate

Securtes Ltgaton Reform Act of 1995 Actual results may dffer materallyfrom those dsclosed n our forward-lookng statements For a descrpton of

factors that could affect future results, reference should be made to the full

autonary statement on the nsde back cover and to the secton enttled Rskson pages 36 to 41 For nformaton about our non-AAP measures, see pages 34and 35 In our report we make reference to Unlevers and other thrd-party

webstes, and to socal meda stes Informaton on webstes and/or socal meda stess not ncorporated heren and does not form part of ths document Ths Annual Report

comprses regulated nformaton wthn the meanng of sectons 11 and 525c of the Acton Fnancal Supervson (Wet op het fnanceel toezcht (Wft)) n the Netherlands

1Report of the DrectorsAbout Unlever

ABOUT UNILEVER OVERNANE FINANIAL STATEMENTS SHAREHOLDER INFORMATION

2 harmans statement

4 hef Executve Offcers revew

6 Operatonal hghlghts

8 Our ompass strategy

9 Our busness model

10 Unlever Sustanable Lvng Plan

12 Wnnng wth brands and nnovaton

16 Wnnng n the market place

20 Wnnng through contnuous mprovement

24 Wnnng wth people

28 Fnancal revew 2012

36 Rsks

42 Bographes

44 orporate governance

56 Report of the Audt ommttee

58 Report of the orporate

Responsblty ommttee

60 Report of the Nomnatng and

orporate overnance ommttee

62 Drectors Remuneraton Report

83 Statement of Drectors responsblte s

84 Audtors reports

86 onsoldated ncome statement

87 onsoldated statement of

comprehensve ncome

87 onsoldated statement of changes

n equty

88 onsoldated balance sheet

89 onsoldated cash flow statement

90 Notes to the consoldated

fnancal statements

132 ompany accounts

144 Fnancal calendar

144 ontact detals

145 Webste

145 Share regstraton

145 Publcatons

148 Index


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2012 has been another strong yearfor Unlever, buldng further on thegood performance n 2011 Desptea challengng economc envronment,the roup contnued to grow abovets markets, delverng strong top andbottom lne results The transformatonof Unlever to a sustanable growthcompany s well on trackUnlevers sustaned performancen these dffcult markets s testamentto the strength and clarty of the UnleverSustanable Lvng Plan (USLP) and the

ompass strategy developed by PaulPolman and hs management teamThe USLP s provdng the roup wth annsprng and hghly dfferentated growthmodel, whch s drvng performance,energsng employees and ncreasnglybeng recognsed externally as a standardfor responsble busness The Boards havebeen mpressed agan ths year by theways n whch the strategy s beng broughtto lfe n dfferent parts of the roup, and

the above average results versus our peergroup s testmony to ths

Mantanng good governanceood governance s essental for thelong-term success of the roup, andI am pleased to ntroduce our orporateovernance report on pages 44 to 81,whch sets out how Unlever conductsts operatons n accordance wthnternatonally accepted prncples of goodcorporate governance We are very alertto the current envronment around theremuneraton arrangements for Executve

Drectors and we reman commtted tolnkng pay to the longer-term obectvesof Unlever and, n turn, the longer-termnterests of shareholders We set out moredetals on our approach n our DrectorsRemuneraton Report on pages 62 to 81

Strengthenng the BoardsA key role for the Boards s to provdeadequately for ther successon, and I amvery pleased that Laura ha, Mary Ma and

John Rshton have agreed to on usand are beng proposed for electon at theAMs n 2013 Unlever contnues to appontdrectors based on ther wde-rangngexperence, backgrounds, sklls, knowledgeand nsght, and I am confdent that thesethree drectors wll further strengthen thedversty of gender and experence alreadyon the Boards and mprove t furtherAddtonal nformaton on these drectorsand the successon plannng processundertaken s gven n the orporateovernance report and ther bographeswll be ncluded n the 2013 AM Notces

whch wll be avalable on our webste atwwwunlevercom/agmfrom 2 Aprl 2013Sunl Bhart Mttal wll not offer hmself forre-electon at the 2013 AMs I would lke tothank Sunl for hs contrbuton to Unleveras a Non-Executve Drector

We are commtted to contnung to mprovedversty at Board level and I am pleasedthat already 25% of Drectors on yourBoards are women Last year we stated

2 Kees StormVce-harman & SenorIndependent Drector

6 Ann FudgeNon-Executve Drector

10 Hxona NyasuluNon-Executve Drector

4 Jean-Marc Huthef Fnancal Offcer

8 Byron roteNon-Executve Drector

12 Paul WalshNon-Executve Drector

3 Paul Polmanhef Executve Offcer

7 harles oldenNon-Executve Drector

11 Sr Malcolm RfkndNon-Executve Drector

5 Louse FrescoNon-Executve Drector

9 Sunl B MttalNon-Executve Drector

2 UnleverAnnual Report and Accounts 2012Report of the DrectorsAbout Unlever

HAIRMANSSTATEMENT

BOARD OF DIRETORS

2 3 4 5

8 9 10 11


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our am to ncrease that percentage, andthe ntroducton of these Non-ExecutveDrectors, should they be elected, wllacheve ths

Board evaluatonFollowng the external evaluaton n 2011,our nternal process ths year suggestedmnor recommendatons to the operatonof the Boards and confrmed that nomaor modfcatons were requred Theprocess concluded that overall the Boardscontnued to operate n an effectve mannerMore nformaton on prevous evaluatons

and ths years agreed actons s foundwthn the orporate overnance report

Shareholder return2012 has been yet another relable yearunder our dvdend polcy Unleversconsstent mprovement n profts hasenabled us to pay a steady ncrease ndvdends year on year The full-yeardvdend n 2012 rose to 0954 an8% ncrease from 2011

Fnally, on behalf of the Boards, I wouldlke to extend my sncere thanks to all ofUnlevers 173,000 employees across theworld They have delvered exceptonalresults n df fcult economc condtonswhle at the same tme renforcngUnlevers growng reputaton as abusness commtted to sustanableand equtable growth

Mchael Treschowharman

The Unlever roupUnlever NV (NV) s a publc lmted company regstered n the Netherlands It has lstngs of shares anddepostary recepts for shares on Euronext Amsterdam and of New York Regstry Shares on the New York StockExchange Unlever PL (PL) s a publc lmted company regstered n England and Wales It has shares lstedon the London Stock Exchange and, as Amercan Depostary Recepts, on the New York Stock Exchange

The two parent companes, NV and PL, together wth ther group companes, operate as a sngle economc entty(the Unlever roup, also referred to as Unlever or the roup) NV and PL and ther group companes, regardlessof legal ownershp, consttute a sngle reportng entty for the purposes of presentng consoldated fnancalstatements Accordngly, the accounts of the Unlever roup are presented by both NV and PL as ther respectveconsoldated fnancal statements The same people st on the Boards of NV and PL and other off cers are offcersof both companes Any references to the Board n ths document mean the Boards of NV and PL

Names are lsted n alphabetcal order wth the excepton of the harman, Vce-harman, hef Executve Offcerand hef Fnancal Offcer

For Drectors bographes,please see page 42

1 Mchael Treschowharman

Further delvery aganst ourompass strategy, wth sustanablegrowth despte challengng markets

Successon plannng leadng to theproposal of three new Non-ExecutveDrectors at the 2013 AMs

A consstent dvdend that contnuesto provde a good return toshareholders

3UnleverAnnual Report and Accounts 2012 Report of the DrectorsAbout Unlever


2012 HIHLIHTS

6 7

1

12


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1 Paul Polmanhef Executve Offcer

Unlever transformaton on track

Our predcton that 2012 would be anotherchallengng year for the global economyturned out to be accurate We sawcontnued volatlty n the worlds markets

resultng n commodty cost rsessgnfcantly n excess of expectatonsThe threat of the worlds largest economygong over a fscal clff and the eurocrss added uncertanty and undermnedfragle consumer confdence

Overall t s a b-polar economc world one of sluggsh growth n most developedmarkets contrasted by stll relatvelyhealthy consumpton and growth nemergng markets

Smultaneously we are facng challengesto the worlds socal and envronmental

equlbrum rowng ssues of nequaltyand rsng levels of unemployment especally among young people placeadded strans on socal coheson But thebggest challenge s the contnung threatto planetary boundares, resultng nextreme weather patterns and growngresource constrants These have anncreasng mpact on our busness

Volatlty and uncertanty the new normalWe reman convnced that busnessesthat both address the drect concerns ofctzens and the needs of the envronment

wll prosper over the long term ompanesneed to show leadershp to rebuld ctzenstrust currently at an all tme low Thsthnkng les at the heart of the UnleverSustanable Lvng Plan (USLP) and ourompass vson of doublng the busnesswhle reducng our envronmental footprntand ncreasng our postve socal mpactAs t becomes embedded, there s growngevdence that t s also acceleratng ourgrowth It certanly contrbuted to anotherstrong year for Unlever n 2012

Strong busness performance n 2012Turnover ncreased by 105%, takngUnlever through the 50 bllon barrer,a sgnfcant mlestone to becomng an80 bllon company We have grown bynearly 30% n ust four years rowth wasbroad based across all our markets andcategores and hgh qualty, wth a goodbalance of prce and volume Emergngmarkets contnued to be the prme engne,growng for the second consecutve yearby more than 11% and now accountng for55% of total busness

rowth was ahead of our markets, wthapproxmately 60% of the busness ganngshare Personal are and Home areshowed double dgt growth, n lne wthour strategc prortes

Despte commodty cost ncreases of over15 bllon, and the heavy nvestmentsmade n supportng our brands, growthwas proftable, wth 03% mprovementn core operatng margn to 138%

Hgh mpact nnovatons, rolled outglobally at speed, contnue to be keygrowth drvers Wth the addton ofMagnum and Sunslk last year, we nowhave 14 brands wth sales of more than1 bllon a year, and these brandsaccounted for almost 50% of Unleversgrowth n 2012 We delvered on ourwhte space market strategy too Thelaunch of TRESemm n Brazl last yearwas one of Unlevers most successfulever, addng almost 150 mllonn turnover

We contnue to strengthen our portfolo,

thanks to strategc acqustons snce 2011n Personal are ncludng Sara Lee,Alberto ulver and Kalna n Russa and dsposal of several slower-growngbusnesses, notably n Foods Thscombnaton added over 1% to turnovergrowth n 2012

The delvery of the ompass strategyand the embeddng of the USLP are notonly beneftng ctzens and communtesbut also shareholders who have seen aTotal Shareholder Return (TSR) of closeto 100% over the past four years

The year aheadWe expect 2013 and beyond to be asdffcult and challengng We beleve thsfurther valdates our ompass strategywth the USLP at ts heart Re-establshngtrust wth ctzens and meetng the needs ofsocety wll be the keys to ongong successOur brands should be a force for good naddressng global challenges be t accessto water, hygene and santaton orsustanable and nutrtous food

For example, the Lfebuoy handwashngcampagns target one of the bggestkllers of chldren under fve darrhoeaDomestos s helpng mprove santatonn some of the most mpovershed partsof the world through a combnaton ofeducatonal programmes and smply thebuldng of tolets Puret s brngng safedrnkng water to an ncreasng numberof people Dove s addressng one of thebggest ssues facng adolescent grlsaround the world, self-esteem Throughour sustanable sourcng programmes,Ranforest Allance certfcaton of Lptontea and Knorrs Sustanablty PartnershpFund, we are helpng to mprove thelvelhoods of farmers and helpng toguarantee future supples As our ambtonsare hgh, workng n partnershp wth otherss key to delvery

UnleverAnnual Report and Accounts 20124

HIEFEXEUTIVE

OFFIERSREVIEW

1


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2 Doug Ballehef Human Resources Offcer

3 Davd Blanchardhef ategory Research& Development Offcer

4 Professo r enevve Bergerhef Scence Offcer

5 Kevn HavelockRefreshment

6 Jean-Marc Huthef Fnancal Offcer

7 Alan JopeNorth Asa

8 Kees KruythoffNorth Amerca

9 Dave LewsPersonal are

10 Harsh Manwanhef Operatng Offcer

11 Antone de Sant-AffrqueFoods

12 Per Lug Sgsmondhef Supply han Offcer

13 Rtva Sotamaahef Legal Offcer

14 Keth Weedhef Marketng andommuncaton Offcer

15 Jan Zdervel dEurope

Board member

For ULE bographes,please see page 43

Our evolvng busness modelWth scale comes responsblty sowe must contnue to play a leadershprole n seekng solutons for globaltransformatonal ssues lke clmatechange, food securty and povertyallevaton Ths s why I agreed to onthe UN Secretary enerals Hgh LevelPanel to revew the post-2015 Mllennum

Development oalsOur approach s ganng wdespreadexternal recognton We were agan

named sector leader n the Dow JonesSustanablty Indexes for the 14thconsecutve year lsted as the worldsffth most desred company to work forby LnkedIn and recognsed for our workon dversty by The atalyst organsatonWe are proud now to be seen as thepreferred employer n many of the keymarkets n whch we operate

We are on track to become a sustanablegrowth company But ths would not bepossble wthout the dedcaton and hard

work of our 173,000 colleagues and manypartners around the world They aredemonstratng the power of purpose,makng Unlever agan ft to wn

Warm regards

Paul Polmanhef Executve Offcer

Our busness modelOur ompass strategy wth theUSLP at ts heart contrbuted toanother strong year for Unlever

50 bllonWe added nearly 5 bllonof turnover n 2012, pushngthrough the 50 bllon markn the process

Drvng growthEmergng markets now accountfor 55% of our busness

1 bllon brandsWe have 14 brands wth salesof more than 1 bllon a year

Busness wth purposeRe-establshng trust wthctzens and meetng the needsof socety wll be the keys toongong success



UNILEVER LEADERSHIP EXEUTIVE (ULE)

2012 HIHLIHTS

2

5

8

11

14

3

6

9

12

15

4

7

10

13


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In 2012, we contnued to make good progressn the transformaton of Unlever to a sustanablegrowth company We exceeded 50 bllon turnover,wth all regons and categores contrbutng togrowth Despte further cost ncreases and volatlecommodty markets, our gross margn rose by 01percentage ponts and our core operatng margnby 03 percentage ponts, reflectng the dscplnedmplementaton of our strategy

Turnover is up 10.5% at 51.3 billion with netacquisitions contributing 1.1% and currencychanges 2.2%

Underlying sales growth of 6.9% is well balancedbetween volume +3.4% and price +3.3%

Emerging markets grew underlying salesby 11.4%, now representing 55% of turnover

Basis of reporting: our accounting policies are in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union (EU) and as issuedby the International Accounting Standards Board (IASB), as well as United Kingdom and Dutch law. Certain measures used in our reporting are not defined under IFRS orother generally accepted accounting principles. For further information about these measures, and the reasons why we believe they are important for an understandingof the performance of the business, please refer to our commentary on non-GAAP measures on pages 34 and 35.

* Further details of our key financial indicator s can be found in our Financial review starting on page 28. These key non-financial indic ators form part of the Unilever Sustainable Living Plan. 2012 data is preliminary. Some of these KPIs will be independently assured in 2013.

See our Unilever Sustainable Living Plan: Progress Report 2012 and our online Unilever Sustainable Living Report for 2012 at www.unilever.com/sustainable-living,to be published in April 2013.

Measured January-September 2012. In 2012 we moved to full volume-based (tonnes sold) reporting for this target. This number is not comparable to previously reportednumbers measured by product (stock keeping unit).

NAMET refers to North Africa, Middle East and Turkey; AMET refers to Africa, Middle East and Turkey; and RUB refers to Russia, Ukraine and Belarus.

69%2011 65%

71mllon2011 345 mllon

385kg2011 496kg

34%2011 16%

80%

2011 See below

100%2011 64%

138%2011 135%

9997kg2011 11831kg

48,0002011 45,000

43bllon2011 31 bllon

223m32011 240m3

1162011 127 per 1mhours worked

per 1mhours worked

UNDERLYINSALES ROWTH

HEALTH AND HYIENEPeople reached wth Lfebuoyhandwashng programmes

WASTE

Total waste per tonneof producton

UNDERLYIN VOLUMEROWTH

NUTRITIONPortfolo by volume meetng saltlevels equvalent to 5g per day

SUSTAINABLE SOURIN

Palm ol purchases fromsustanable sources

ORE OPERATINMARIN

REENHOUSE ASESO2from energy per tonneof producton

BETTER LIVELIHOODS

Number of Shakt entrepreneurs(cumulatve snce 2010)

FREE ASH FLOW

WATERWater per tonne of producton

PEOPLE

Total recordable accdentfrequency rate


OPERATIONALHIHLIHTS

KEY FINANIAL INDIATORS*

KEY NONFINANIAL INDIATORS


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Turnover 18.1 billion Underlying sales

growth 10.0%

Underlying volumegrowth 6.5%

Market shares increasedacross geographies, withstrong gains in LatinAmerica, NAMET & RUBand North America; drivenby haircare, deodorantsand skin cleansing


growth 10.3% Underlying volume

growth 6.2% Market share gains

were driven by powerfulperformance in nearly allour markets; in laundryin particular in Europe,China and South Africa

Asa/AMET/RUB

Turnover 20.4 billion Underlying sales growth 10.6% Underlying volume growth 5.7%

The Amercas Turnover 17.1 billion Underlying sales growth 7.9% Underlying volume growth 3.1%

Europe Turnover 13.9 billion Underlying sales growth 0.8% Underlying volume growth 0.9%


growth 1.8%

Underlying volumegrowth (0.9)%

Market shares were downslightly, reflecting a mixedperformance with volumegains in dressings, offsetby declines in savoury andvolume share stabilisationin spreads


growth 6.3% Underlying volume

growth 2.4% Market shares were

slightly down overall,reflecting price aggressivecompetition in ice creamin developed markets

On any gven day

2 bllonconsumers worldwde usea Unlever product

Around

173,000employees at the end of 2012

Turnover of

51 bllonfor 2012

Products sold n over

190countres worldwde


7Report of the DrectorsAbout UnileverUnleverAnnual Report and Accounts 2012

OUR ATEORIES

OUR EORAPHIAL AREAS

PERSONAL ARE

HOME ARE

FOR MORE WWWUNILEVEROM/

INVESTORRELATIONS

FOODS

REFRESHMENT


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OUR VISIONDOUBLE THESIZE OF THE BUSINESS, WHILSTREDUIN OUR ENVIRONMENTALFOOTPRINT AND INREASIN

OUR POSITIVE SOIAL IMPATWe wll lead for responsble growth, nsprng people totake small everyday actons that wll add up to a bg dfference

We wll grow by wnnng shares and buldng markets everywhere

We wrote n our 2011 Annual Report andAccounts that the volatlty and uncertantyfacng the world was the new normal and

would last for the medum term Nothngthat happened n 2012 has led us to revseths vew f anythng t has confrmed t Theongong pressures economc, socal andenvronmental frame our approach to ourbusness strategy and our busness model

Our ompass Wnnng wth pllars

Winning with brands and innovation

Winning in the market place

Winning through continuousimprovement

Winning with people

We call our busness strategy documentthe ompass, snce t sets out a constantpath for Unlever for the long term Frst

developed n 2009, t was sharpened n 2012but ts core elements remaned the sameThe ompass sets out our ambtous Vsonand Purpose, and defnes four Wnnngwth pllars wthn the busness that wllhelp us acheve both The eagle-eyedreader wll have spotted that our statementof Purpose s also the ttle for our AnnualReport and Accounts ths year We reporton progress under each of the four Wnnngwth pllars on pages 12 to 27

The ompass gves lfe to ourdetermnaton to buld a sustanablebusness for the long term and to fnd

new ways to operate that do not ust takefrom socety and the envronment Thss captured n the Unlever SustanableLvng Plan (USLP) whch s descrbedn more detal on pages 10 and 11

UnleverAnnual Report and Accounts 20128 Report of the Drectors About Unlever

OUR OMPASSSTRATEY

OUR OMPASS


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Our brandsStrong brands and nnovatonare central to our ambton todouble n sze We are nvestngn brand equty, fndng and

strengthenng the connectonsbetween consumers and theproducts they buy Where equtys strong, we are leveragng t creatng effcences by focusngon fewer, bgger proects thatenhance margns And we areseekng superor productswhch consumers wll prefer,drvng proftable growth

Proftable volume growthProftable volume growth s the bass of thevrtuous crcle of growth Stronger brandsand nnovaton are the key drvers behnd tonsstently strong volume growth buldsbrand equty as we reach more consumers,more often

ost leverage + effcencyProftable volume growth allowsus to optmse the utlsaton of ournfrastructure and spread fxed costsover a larger number of unts produced,reducng the average cost per untIt mproves our proftablty and allowsus to nvest n the busness

Innovaton + marketng nvestmentLower costs and mproved effcencyenable us to strengthen our busnessfurther New and mproved productsare the result of nvestment n R&Dand, together wth effectve marketng,strengthen our brand equty Ths resultsn proftable volume growth, self-perpetuatng the vrtuous crcle of growth

Our operatonsOn any gven day 2 bllonconsumers use our productsand we want to reach manymore, by developng nnovatve

products that address dfferentconsumer needs at dfferentprce ponts To do ths we useour global scale to help delversustanable, proftable growthby seekng to add value atevery step n the value chanby enhancng product qualtyand customer servce, androllng out nnovatons fasteracross all markets

Our peopleSustanable, proftable growthcan only be acheved wth therght people workng n anorgansaton that s ft to wn,

wth a culture n whchperformance s algned wthvalues We are ncreasnglyan agle and dverse busnesswth people motvated by donggood whle dong well Weare buldng capablty andleadershp among our peopleand attractng some of the besttalent n the market place

Sustanable lvngFor us, sustanable, equtablegrowth s the only acceptablebusness model Busnessneeds to be a regeneratve

force n the system that gvest lfe For example, by reducngwaste, we create effcencesand reduce costs, helpngto mprove margns whlereducng rsk Meanwhle,lookng at more sustanableways of developng products,sourcng and manufacturngopens up opportuntes fornnovaton whle mprovngthe lvelhoods of our supplers

Our busness models desgned to delversustanable growth Forus, sustanablty s ntegralto how we do busness In aworld where temperatures

are rsng, water s scarce,energy s expensve, santatons poor n many areas, andfood supples are uncertanand expensve, we have botha duty and an opportunty toaddress these ssues n theway we do busness

The nputs to the model, lkethose of all maor packagedgoods manufacturers, arethreefold brands people andoperatons These map drectlyon to our ompass Wnnng

wth pllars both contnuousmprovement and the marketplace pllars support theoperatons strand of the model

The df ferentator n our busnessmodel s our USLP and the goalof sustanable lvng

The outputs of the model arethreefold sustaned growthlower envronmental mpactand postve socal mpactThese algn drectly wthour Vson statement

The dagram below representsour vrtuous crcle of growthIt summarses, smply, how wederve proft from the applcatonof our busness model



OURBUSINESS

MODEL

A VIRTUOUS IRLE OF ROWTH


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Wth 7 bllon people on our planet,the earths resources can be stranedThs means sustanable, equtable growths the only acceptable model of growthfor our busness We beleve growth andsustanablty are not n conflct In fact,

n our experence, sustanablty drvesgrowth By focusng on sustanablelvng needs, we can buld brands wth asgnfcant purpose By reducng waste, wecreate effcences and reduce costs, whchhelps to mprove our margns And we havefound that once we start lookng at productdevelopment, sourcng and manufacturngthrough a sustanablty lens, t opens upgreat opportuntes for nnovaton

Our Unlever Sustanable Lvng Plan(USLP) sets out to decouple our growthfrom our envronmental mpact, whleat the same tme ncreasng our postvesocal mpact Our USLP has three bggoals that by 2020 wll enable us to

Help more than a bllon people tomprove ther health and well-beng

Halve the envronmental footprntof our products

Source 100% of our agrculturalraw materals sustanably and enhancethe lvelhoods of people across ourvalue chan

Underpnnng these goals are sevencommtments supported by around 50targets spannng our socal, envronmentaland economc performance across thevalue chan from the sourcng of rawmaterals all the way through to the use

of our products n the home

In the second year of our USLP, we madesteady progress across our commtmentsOur USLP s ambtous and we have muchmore to do We contnue to strve to delverour stretchng goals

Our commtment s to halvethe waste assocated wththe dsposal of our products

by 2020^

OUR WASTE IMPATHAS REDUEDBY AROUND 7%SINE 2010

By 2020 we wll source100% of our agrculturalraw materals sustanably

AROUND ONE THIRDSUSTAINABLY SOUREDBY END 2012

By 2020 we wll engage wthat least 500,000 smallholderfarmers and 75,000

small-scale dstrbutorsn our supply network

48,000 SHAKTI SMALL-SALE DISTRIBUTORSBY END 2012

^ Our env ronmental targets are expressed on a per consumer use bass, usng a lfecycle approach Th s means a sngleuse, porton or servng of a product

2012 fgures are prelmnary They wll be fnalsed n the Unlever Sustanable Lvng Plan Progres s Report 2012, to bepublshed n Aprl 2013

Measured January-September 2012 In 2012 we moved to full volume-bas ed (tonnes sold) reportng for ths commtmentThs number s not comparable to prevously reported numbers measured by product (stock keepng unt)

Measured July 2011-June 2012, compared to January-December 2010+

In seven water-sc arce countres representng around half the worlds populaton

By 2020 we wll enhance the lvelhoodsof hundreds of thousands of peopleas we grow our busness




5 WASTE 6 SUSTAINABLESOURIN

7 BETTERLIVELIHOODS

ENHANIN

LIVELIHOODS

SEE OUR UNILEVERSUSTAINABLE LIVINPLAN PRORESSREPORT 2012, TOBE PUBLISHED INAPRIL 2013, FOR

FURTHER DETAIL


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WINNIN WITHBRANDS AND

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Strong brands and nnovaton wll playcentral roles n our ambton to doublethe sze of our busness We are nvestngheavly n the equty of our brands,seekng to fnd the connectons betweenconsumers and the products they buy,

and so to strengthen them Wherewe have strong brand equty, we areleveragng t creatng effcences byfocusng on fewer, bgger proects thatenhance margns And we are mprovngour brands, developng superor productswhch consumers wll prefer, drvngproftable growth

Buldng brand equtes

The strength of our busness les nbrands that consumers love to buy and use

As we nvest greater and greater effort nunderstandng consumers relatonshpswth our products, we ncreasngly fndthey are lookng for brands that make adfference n ther lves and to ther worldSo to make our brands stronger, we wantto draw out the ways n whch our productsresonate wth consumers and createbrands wth purpose

Brands wth purposeFew ssues could gve more purpose to ourwork than santaton over 2,000 chldrende every day from darrhoea, whch slnked to, among other thngs, a lack of

clean tolets for more than 2 bllon peopleworldwde Our Domestos brand workswth local entrepreneurs n countreswhere access to santaton s lmted,helpng them set up small busnesseswhch source, sell and mantan hygenctolet facltes It s one of the many waysn whch our Domestos brand s supportnga campagn to mprove santaton formllons of people In keepng wth Unlevertradton, t s dong well by dong goodOverall, Domestos sales grew by morethan 9% n 2012

Smlarly, our Brush Day and Nghtcampagn, whch encourages parentsand chldren to adopt good brushng habts,connects our famly health oral carebrands, led by Sgnal, to the dental healthof mllons Brush Day and Nght reached49 mllon people over 2010-2012 and hashelped our Sgnal brand grow by 22%snce 2008

Sustanable marketng

Understandng the role of brandsn peoples lves also helps us targetmarketng efforts where they are mostmeanngful For example, n South Afrcawe have offered free Wonderbags tocustomers of Shoprte stores whenthey buy three 200g packs of UnleversRaah curry powder The Wonderbags a remarkable advance n sustanablecookng an nexpensve heat retentoncooker that reduces fuel consumptonby half, reduces smoke from cookngfres and helps food retan ts taste,nutrton and texture Run n partnershpwth Shoprte and Natural Balance (the

manufacturers of the Wonderbag), thsnnovatve scheme has helped 400,000consumers to save sgnfcantly on therfuel blls

49 mllonpeople reached by our Brush Day andNght oral care campagn over 2010-2012

WINNIN IN BRAZIL

Brazlan consumers care about ther har and,nspred by the salons and har professonals thatare a part of natonal lfe, are prepared to trade upfor a new product they beleve n

We saw a great opportunty n the market for theTRESemm brand and, n November 2011, we madeone of our most successful product launches ever,backed by a campagn that communcated wthconsumers across every maor medum and channel,wth a partcular emphass on the nternet Frombeng unknown n Brazl, TRESemm s now oneof the countrys leadng har brands n hypermarketsand drugstore chans

THE FRUITS OF

ROWTHParents buy Kssanketchups and amsbecause they are madefrom fresh frut andvegetables and chldreneat them becausethey taste great Byemphassng the naturalngredents of ts productsand mprovng taste andtexture, Kssan hasestablshed a strongmarket share postonn Inda

WORLD TOILET DAY

More than 2 bllon peopleworldwde lack accessto clean tolets a publchealth rsk whch we arecampagnng to solveIn November 2012, ourDomestos brand and ourpartner, the World ToletOrganzaton, openedthe worlds frst toletacademes n Vetnam,the frst stage n a globalprogramme to tran localentrepreneurs to set uphygenc tolet busnesses

OUR BRANDS IN ATIONTO FIND OUT MORE O TOWWWUNILEVEROM/BRANDS-IN-ATION

DOMESTOS IS SUPPORTINA AMPAIN TO IMPROVESANITATION FOR MILLIONSOF PEOPLE



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onsumers as brand ambassadorsWord of mouth has always played anmportant role n communcatng thebenefts of our products Parent tochld, sblng to sblng, neghbour toneghbour a good word from a trusted

source s a hgh endorsement for anyproduct Now, n the dgtal age, mllonsof consumers from nearly every geographyand demographc are connected n a gantconversaton n whch the brands theylove play an mportant part By creatngbrands that have meanng and purposefor consumers, we are harnessng thatconnectvty and enablng consumersto become our brands ambassadors

Part of the success of our Dove SelfEsteem Proect, whch encourageswomen and grls to develop a postverelatonshp wth beauty, has been an

ncreased wllngness among consumersto spread the brands affrmatve messageResearch by Mllward Brown shows thatamong women n the US who are awareof the Dove Self Esteem Proect, 62%would recommend the Dove brand toothers thats 16% more than amongthose who are not aware of the proect

Leverage bgger brands

Once we have dentfed brands wth aclear purpose n consumers lves, we can

have the greatest mpact by concentratngour efforts on a selected number of keybrands and leveragng the benefts ofscale Were makng greater nvestmentsn fewer, bgger proects and focusngon margn growth

Makng a mark wth consumersBgger marketng campagns whchcan operate through multple meda areachevng what we call meda cut-throughwhen a campagn remans memorabledespte the many competng clams onconsumers attenton Our Drt s ood(D) brands, whch nclude Omo and Persl,

re-launched n multple markets n 2012wth a powerful mx of tradtonal and dgtaladvertsng, reassurng parents that therchldren can learn through healthy, messyplay because of our products toughstan-removng performance Fve keymarkets have already grown market shareas a result and more D re-launchesare planned for 2013Drvng down costsNegotatng larger advertsng andpromoton deals also allows for greatereconomes of scale, especally wherecampagns can be adapted for dfferent

regons and countres Margns can befurther ncreased when bgger proectsallow other savngs for example, n waste

Innovatng wth ambtonIn 2012 we took mportant steps to algnR&D wthn our category organsatonThs allows for an ntegrated productnnovaton funnel from dea throughto market, nformed at every step byconsumer beneft and value Our sxmaor laboratores across the world arecomplemented by a network of regonalcentres that gve us the strength to delvernnovatons globally and apply regonalvarants that consumers value

At the same tme as strengthenngR&D wthn our categores, we contnueto look to the future through a core groupof scentfc experts These are chargedwth uncoverng breakthrough scentfcdevelopments and provdng thoughtleadershp and connectons wth theexternal world to fuel our future categoryR&D programmes further

As part of the UnleverSustanable Lvng Plan, we setourselves the target of ensurngthat our chldrens ce creams wouldcontan 110 klocalores or fewer perservng by the end of 2014 We are ntroducngthe Specally for Kds logo on Max andPaddlepop branded ce creams to reflectour commtment to products whch combnefun tastes, textures, shapes and colours, andcomply wth ths target so chldren can enoythem as part of a balanced det and actvelfestyle By the end of 2012, more than 80%of our chldrens ce creams had met our target

More at wwwunlevercom/heartbrand

14 UnleverAnnual Report and Accounts 2012

WINNIN WITH BRANDS AND INNOVATIONcontnued

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ncludes a range of salon-qualty dryshampoos desgned to reuvenate harwthout a sngle drop of water good forthe envronment as well as helpng growour busness Alongsde TRESemms rapdlaunch, we ntroduced more than 80 new

or renewed products n Brazl, ncludngtwo new Dove varants and re-launchesof the Seda and lear ranges, resultngn substantal gans n a vtal market

Wn consumer preference

By makng superor products wthbenefts people apprecate, wencreasngly wn consumer preferencefor premum brands where added values greatest Premumsaton, nnovaton

and dfferentaton wll be essental fwe are to grow faster than our markets

Superorty you can feelThe team behnd every product n everycategory of our busness s set a cleartarget for mprovement we want all ourbrands to be superor to the compettonAt present, our global ProductBenchmarkng Programme showsthat 96% of our products n scope areconsdered equal to, or better than, ourkey compettors And where we have

made advances n product performance,we are ncreasngly able to tell consumershow they wll beneft

When we mproved the Sunlght handdshwash brand, for nstance, we had

thought carefully about the bllons ofhours spent every day across the worldwashng dshes, and the benefts thatcould come from a dshwash thatdegreases dshes faster and moreeasly We made sure our marketngcommuncated these mprovements, wththe result that we converted mllons ofhouseholds to Sunlght, doublng turnoverfor the dshwash brand n sx years

Qualty worth payng forAs well as drvng volume growth,superor products can command premumprces, ensurng that growth s proftable

All around the world, we are offerngproducts for whch consumers are wllngto trade up, wth a correspondng rse nadded value In Russa, for example, welaunched the arte dOr ce cream rangen December 2011 The arte dOr productswere made to premum recpes andmarketed accordngly creatng addtonalvalue per servng In ust over sx months,arte dOr sales grew proftably to representsome 25% of the premum segment

Some

25%of premum segment n Russa achevedby arte dOr n ust over sx monthsfrom launch

In 2012 we were market leader n lqud laundrydetergent sales n emergng markets, ncreasngour market share by over 10 percentage pontssnce 2010 onsumers are ncreasnglyconvnced of the benefts of lquds lke Omoand Surf whch not only offer a better wash

experence but, especally when concentrated,create lower greenhouse gas emssons n ther

manufacture and dstrbuton than powdersAnd lquds are good for our busness greatperformance combned wth premum prces andlower materal and transport costs, especallyfor concentrates, mean hgher gross margns

More at wwwunlevercom/omo

IN 2012 WE WEREMARKET LEADERIN LIQUID LAUNDRYDETERENT SALES INEMERIN MARKETS,WITH MARKET SHAREOF OVER 25%

Focusng nnovaton on fewer, bggerproects n the future wll allow R&Dbreakthroughs to be translated ntomany markets n a short tmeframeFor example, an nnovatve methodof cool blendng spreads s set to

transform our spreads brands (such asBecel) by reducng total fat and saturatedfats by around 25%, whch dfferentatesther nutrtonal profle even more frombutter whle stll delverng great taste

And ths year we made great advancesamong consumers n the perceved qualtyof Lpton Yellow Label tea, by ntroducnga new process of cold-pressng someof the freshest tea leaves and addngthe essence back nto conventonaldred leaves Already launched througha celebrty-backed campagn n Russa,whch saw retal sales grow by 26% n

12 months, ths new technology wll berolled out n another 18 countres n 2013

Wnnng market shareBg, fast, ambtous proects can havesgnfcant results, provded they areattuned to consumer needs When welaunched the TRESemm brand nto oneof the worlds largest har markets, Brazl,t became one of the leadng har brandsn both hypermarkets and drugstore chanswthn fve months TRESemm s avalablen a number of other countres and also



LAUNDRY LIQUIDS BETTER FOR ONSUMERS,USTOMERS, BUSINESS AND ENVIRONMENT


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There are 2 bllon consumers who useour products on any gven day and wewant to reach many more We do thsby addressng dfferent consumer needswth relevant nnovatons at dfferentprce ponts, rollng them out fast

across all markets, and ncreasng theavalablty and vsblty of our productsthrough our growng Perfect Storesprogramme At the heart of our wnnngn the market place strategy s a desre toacheve growth n the most cost-effectveand sustanable way

Reachng more consumers

Market development s a key drverof our growth and bult around the

followng approach reachng up (encouragng more

affluent consumers to use ourpremum brands)

reachng down (offerng value productsfor consumers on lower ncomes nemergng and developed markets) and

reachng wde (beng frst and fast totake our brands nto what we call whtespaces, namely new geographes lkeentral Afrca and Myanmar, emergngconsumer segments lke malegroomng, and new channels lkee-commerce)

PremumsatonBy 2020, 18 bllon more consumers,manly from emergng markets, wll moveup the ladder and become more affluentReachng up s therefore a crtcal growthopportunty for us

Durng 2012, we contnued to focus onbuldng our premum portfolo acrosscategores to delver growth and bettermargns For example, n January 2012,we launched the Dove har range n thePhlppnes, and t became the markets

number three brand n ust sx monthsSmlarly, n May we launched the learbrand nto the US, the largest harcaremarket n the world, proof that we cangrow through premum brands ndeveloped markets too

Its not ust n Personal are that we aredrvng premumsaton Magnum, ourpremum ce cream brand, s growngfaster than the category average andbecame a 1 bllon brand n 2012You can now buy Magnum n more than40 countres, ncludng the Phlppnes,Pakstan and Thaland, followng the 2012

roll-out of the brand n these countres

Offerng affordable brandsThere reman many less affluentconsumers n emergng markets whocan beneft from our affordable brandsHowever, reachng down s not smplyabout expandng nto these marketst s also about offerng affordableproducts to shoppers strugglng n tougheconomc condtons across Europe andthe US Ths year, for example, 46 mllonpeople n the US used food stamps

5 mllonPerfect Stores across 75 markets

119 mllonpeople reached wth Lfebuoyhandwashng programmes snce 2010

A PERFET WAY TO SHOPMakng our products easy for shoppers to fnd and

buy s at the heart of our Perfect Stores programmewhch went from strength to strength n 2012 Howdo we do t By translatng the marketng knowledgeand expertse weve ganed from buldng our brandsnto mprovng the experence for shoppers n-storeA better shoppng experence leads to mproved salesgrowth, as shoppers purchase our products morefrequently The programme has led us to developour understandng of what works n dfferent channelsand store formats, and also encouraged us to developa range of new IT systems to facltate measurementof key parameters, thats mprovng the way we dobusness and helpng us stand out from the competton

DOVE FLIES INTOTHE PHILIPPINES

In 2012, the Dove harrange was ntroducednto the Phlppnesas a premum harcarebrand Its launch ncludedpost-wash products lkecondtoners andtreatments Wthn sxmonths, the Dove harrange had become thenumber three brandn the market and weacheved our hghestshare of the harcaremarket for a decade

WASH THOSEERMS RIHT OUT

OF MY HANDSOn 15 October 2012,people n 42 countrestook part n Lfebuoysffth lobal HandwashngDay Each year, over200 mllon people hearabout t through the medaWe am to change thebehavour of 1 bllonpeople across Asa, Afrcaand Latn Amerca by 2015and reduce darrhoea andrespratory dsease

OUR USTOMERSTO FIND OUT HOW WE WORK WITH USTOMERS SO OUR PRODUTS REAHSHOPPERS O TO WWWUNILEVEROM/SUSTAINABLE-LIVIN/USTOMERS-SUPPLIERS



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Local ewels are offerng good value toconsumers and our busness Respondngswftly to the economc crss n reece,n less than sx months from developmentwe launched Elas, a new value-for-moneyfood brand, whch offers consumers a

hgh qualty product range postoned forlower ncomes

And ts not ust new or local brandsIn 1894, Wllam Lever launched anaffordable soap called Lfebuoy Today,buldng on ts legacy, the global soapbrand s helpng to rase hygenestandards n emergng markets throughthe Unlever Sustanable Lvng Plan(USLP) Lfebuoy has reached 119 mllonpeople wth handwashng programmessnce 2010, whle helpng the brandexperence double dgt growth n thelast three years

rowng n whte spacesWe are contnung to fll whte spaces,takng our brands nto new marketsand expandng nto emergng consumersegments, to create new growthopportuntes Today, people can buyDove and Axe products n more than 70countres f n more than 60, followng tsexpanson nto hna and Mexco n 2012Knorr Jelly Boullon n almost 40 and learn more than 40, after ts successful 2012launch n the US, Australa and anada

In 2012, we successfully ntegrated twoacqustons, Kalna, the Russan personalcare company, and Alberto ulver, theglobal har and skncare company, and bothare now experencng double dgt growth

In November 2011, the TRESemm brandwas launched nto Brazl ust sx monthsafter the Alberto ulver acquston wascompleted We have snce launched thebrand n Indonesa, Inda, Thaland andthe Phlppnes, provng our organsatonalcapablty to roll out a brand wth speedand aglty Moreover, t demonstratesour ablty to transform an acquston ntoa growth opportunty by swftly launchngts brands nto new terrtores

We are also lookng to reach wdeby acceleratng our presence throughthree mportant channels whch have

all demonstrated hgh growth for us n2012 drug stores e-commerce andout of home (sellng for consumersconsumpton away from home) In drugstores, for example, we recorded ourhghest underlyng sales growth of11% n 2012 n ths channel

Leveragng entre value chan

Reachng more consumers s alsoabout partnerng wth our retalers to

encourage shoppers to buy our brandsso that we can grow sustanably togetheracross the value chan We estmatethat 68% of our greenhouse gas mpactcomes from consumers usng ourproducts, so we help customers engagewth shoppers and consumers to adoptmore sustanable lfestyles

The economc crss n reece has ledconsumers to swtch to cheaper, local brandsUsng our trusted brand, Elas (named afterthe goddess of olve ol), we created a rangeof value-for-money food products to tapnto consumer needs Our supply chan,customer, fnance, sales and marketng teamscollaborated swftly to develop and launch wthn sx months eght new economyproducts from olve ol to mayonnase Atlaunch, the range was stocked n promotonaldsplays to boost awareness and encouragepeople to buy The new Elas range s one ofthe fastest growng recent launches n reece

More at wwwunlevergr/elas

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For the last three years, we have workedon A Better Future Begns at Home,a ont shopper programme wth retalerTesco, to encourage sustanable behavourIt combnes advce wth promotonsaround our brands, all carryng a strong

sustanablty message By rewardngshoppers for makng more sustanablechoces, t s educatng them n how smallactons can make a bg dfference bothto the envronment and to ther walletSo far the programme has beenmplemented n nne markets from theUK to hna As well as growng our sales,t has delvered benefts rangng fromconsumers recyclng more to peopleplantng trees n the local communty

Takng care of our customersWe beleve that customer satsfactons the sngle most mportant measure of

success for us n ths area And customersare more satsfed wth us than everIn 2012, Unlever was named supplerof the year n the drug store channel,n Boots and Superdrug (UK), Rte Ad (US),Shoppers DrugMart (anada) andFarmacas Benavdes (Mexco) Meanwhle,n emergng markets n Asa, Afrca andthe Mddle East, we were rated the numberone suppler n seven markets In Brazl andArgentna, our most mportant markets nLatn Amerca, we are frequently evaluatedn the top three, whle n the UK Unleverwas named suppler of the year by almostall our customers

Fast, flawless executon

As well as workng wth our customers onont ntatves, we are also workng wth

them to help drve sales of our productsthrough our Perfect Stores programmeThs s a repeatable model whch ensuresthe rght products are avalable n storesand are marketed clearly to shoppersPlot studes n Inda and Argentna showthat outlets enrolled for the PerfectStores programme grow on average4% more than other outlets

In 2012, we supported the developmentof another 2 mllon Perfect Stores andextended our programme to more than30 new markets Ths means that at theend of 2012 we had 5 mllon Perfect

Stores n 75 markets and we am tohave 20 mllon Next, we wll roll out

the next generaton of the programme,Perfect Store 20, amed at mprovngthe way we market our brands toshoppers, mprovng shelf stand-outand ensurng we gve shoppers morereasons to choose our brands n-store

Improvng the retal experenceMeanwhle, were helpng our customersmprove the retal experence n PerfectStores usng hand-held technologyand the power of analytcs, suggestngsalesmen for store-specfc orders andpromotons, plus tps on dsplays Wealso empowered thousands of our Shaktentrepreneurs wth moble phones to booksales orders We wll contnue to nnovateand grow sustanably wth our customers,whether theyre a small-scale dstrbutorn rural Inda or a global retaler

11%growth through drug stores

Rated

No 1suppler across seven markets n Asa,Afrca and the Mddle East

Almost 80,000 entrepreneurs, ncludng48,000 women, n over 135,000 vllages acrossInda have now oned our rural sellng operaton,Shakt We mproved the progr amme n 2012 bypart fundng moble phones for a number ofthese sales people, equppng them wth a smpleapplcaton to drve sales Ths low cost but veryeffectve moble technology helps them sell the

rght products, savng tme durng sales callswhle ncreasng sales and earnngs Shakt sust one example of the progress we are makngtowards our USLP goal of mprovng thelvelhoods of people across our value chan

More at wwwunlevercom/sustanable-lvng




RININ THE

SALES IN INDIA


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IMPROVEMENT


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Our contnuous mprovement programmeams to delver sustanable, proftablegrowth by seekng to add value at everystep n the value chan by enhancngproduct qualty and customer servce,and rollng out nnovatons faster Ths

approach, combned wth our global scale,generates sgnfcant savngs that wenvest back nto our brands and factoresto fuel growth and fulfl our ambtonto reach more consumers Its alsohelpng us create new ways to source,manufacture and delver our productsmore sustanably

Leveragng entre value chan

By workng across the entre valuechan from sourcng, manufacturng

and logstcs through to nnovaton,advertsng and promotons, and prcng we can use our global scale to addvalue, reach new markets and meetour sustanablty targetsWorkng wth global scale and local agltyOur procurement organsaton now buysthe maorty of all materals and servcescentrally some 35 bllon n 2012Ths scale mproves our buyng effcencyand has made a consderable contrbutontowards our 14 bllon supply chansavngs, double what we saved n 2007

When t comes to producton, ourphlosophy of desgn once, deployeverywhere, enables us to maxmseour global scale Ths ensures ourworld-class manufacturng network ofover 250 factores delvers hgher qualtyproducts and faster global nnovatonroll-outs In 2012, we also ncreasedcross-border sourcng by nvestng nlarge regonal or global manufacturngbases, makng better use of our captal

Our global logstcs network transportsour fnshed goods over 15 bllonklometres each year Ths scale enables

us to have global and regonal dstrbutonhubs, mprovng operatonal effcency

sgnfcantly and reducng vehcleklometres by 175 mllon over the nextthree years n Europe alone cuttng costsand emssons whle mprovng servce

Drvng return on marketng and

captal nvestmentompletng the value chan pcture,we focused on gettng the best returnon marketng nvestment for every brandn every category, spendng 68 bllonon advertsng and promoton n 2012We revewed our approach to marketngthrough our raftng Brands for Lfeprogramme, placng an emphass onlearnng through contnuous mprovementBy focusng on creatng fewer but betteradvertsements, and usng them n moreplaces, we drove down advertsngproducton and fees globally, reducngour overall spend by over 41 mllon Our

return on marketng nvestment delveredover 175 mllon n savngs n 2012, vtalto fund our marketng programmes

14 bllonn supply chan savngs n 2012

39%of all tea sourced comes from farmscertfed by the Ranforest Allance

TAKIN PALM OIL IN HANDIn 2012, three years ahead of schedule, we succeeded

n sourcng 100% of our palm ol sustanably Wereone of the largest buyers n the world, purchasngsome 3% of the total volume produced

Importantly, ths s ust the begnnng We also wantto know exactly where t comes from, so were nowamng to purchase entrely from traceable certfedsources by 2020, whch means well be able to trackevery tonne back to the certfed plantaton where twas grown Well be helped n ths by our 69 mllonnvestment n a new palm kernel ol processng plantn Indonesa, whch wll brng us closer to the sourceWe are also actvely consderng smlar ont venturenvestments n processng crude palm ol dervatvesn South East Asa, Inda and West Afr ca

TIME FOR TEAAs part of our plan to

source tea sustanably,for the last sx years weveworked wth the Kenya TeaDevelopment Agency toeducate ts smallholderfarmers about sustanablecultvaton and RanforestAllance certfcatonAnd ts workng manycertfed tea farmers arenow achevng hgher yeldslobally our programmeshave contrbuted totranng 450,000smallholder farmers

SUPPLIER OFTHE YEAR

In the UK, our supplychan dramatcallymproved customerservce through closercustomer collaboraton,a new plannng processand a more responsvesourcng networkWe were named the topmult-category supplern the Advantage roupSurvey and suppler ofthe year by the maorretalers ncludng Asda,Sansburys and Boots

OUR SUPPLIERSTO FIND OUT HOW WE PARTNER WITH SUPPLIERS TO MEET ONSUMERSAND USTOMERS NEEDS O TO WWWUNILEVEROM/ABOUTUS/SUPPLIER





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Local relevance wth low-costbusness modelsOne of Unlevers partcular strengthss our ablty to combne global scalewth locally talored solutons We havedentfed several levers to mprove our

gross margn over the long term, oneof whch s the applcaton of low-costbusness models to parts of the busnesssuch as laundry We expect a sgnfcantproftablty uplft once these measuresare mplemented, enablng us to nvestback nto the busness, mantanng andacceleratng the momentum of thevrtuous crcle of growth

Workng n partnershp wth our supplersOur scale also helps us to meet ourambtous targets for sustanable sourcngIn 2012, we sourced around one thrd ofall agrcultural raw materals sustanably,

ncludng 100% of our palm ol, our largestagrcultural raw materal, three yearsahead of schedule Elsewhere, 39% ofall the tea we source comes from farmscertfed by the Ranforest AllanceSourcng sustanably means that farmerscan mprove ther lvng condtons andearn an ncome they can lve on It alsohelps mantan and mprove sol fertlty,enhance water qualty and avalablty,and protect bodversty

However, we cannot acheve oursustanable growth agenda alone Wework n partnershp wth our supplers to

support the growth and nnovaton we needThrough our Partner to Wn programme,we work wth more than 150 strategcsupplers by sharng strateges and growthplans Ths enables us to buld capactyand create new technologes Our supplersare also key to generatng new deas andare partnerng wth us on over 65% of thedelverables n our medum and long-termnnovaton proects

Improvng eco-effcencyWe are also focusng on mprovngsustanablty n our manufacturngnetwork Thanks to programmes toreduce, reuse, recycle and recover,over half our manufacturng stes nowsend zero non-hazardous waste to landfllWe sourced 26% of our energy used nmanufacturng from renewables, andreduced our O2emssons from energy by838,000 tonnes n the perod 2008 to 2012These efforts have contrbuted towards therecognton by the Dow Jones SustanabltyIndexes, whch named Unlever a globalsuper-sector leader n 2012

Reachng more consumers

To meet our growth ambton we needto reach more consumers We contnue

to work hard to ensure our products arealways avalable wherever the consumers shoppng

To reach dfferent knds of consumers wehave developed segmented supply chansacross categores, portfolos, geographesand channels to delver the rght servceat the rght cost For example, n Indonesa,Ponds s a premum brand thats oftensold by small specalst retalers wth lttlespace to showcase the entre range and asa result they have a tendency to run out ofstock Followng a successful tral, we nowoffer a daly delvery servce, extendng the

roll-out to reater Jakarta experencngsales growth of more than 80%

We have been ncreasng on-shelfavalablty (OSA), gettng more productsmore quckly on to shelves In 2012, storesn our OSA programme reduced emptyshelves by 13%

In 2012, our customers rated us hgherthan ever before Accordng to the globalAdvantage roup Survey, we mproved n70% of our key markets and are n the topthrd n ten out of 14 of our key markets

We are also workng hard to ncreaseproduct qualty reducng both complants

and ncdents onsumer complantswere down by 29% n 2012 versus 2009,whle product ncdents were down by75% In addton, we are makng anddesgnng better products In 2012, 57%of our products scored hgher than our

compettors n blnd tests, comparedto ust 21% n 2009

Fast, flawless executon

Our ablty to delver qualty products,nnovate, and make better decsonsquckly s crtcal to our sustanablegrowth agenda For example, we havealmost halved the tme t takes to launchkey nnovatons nto the market placeNew capabltes and centralsed

processes are makng t possble toalmost halve the tme t takes to buld newfactores Unlevers lobal EngneerngServces uses cooke cutter templates forfactores, desgn and supplers, helpng usto delver consstent hgh qualty productswherever n the world they are made, aswell as mprovng our speed to market

We are also nvestng for growth andare buldng world-class factores,enablng us to cater to the substantalvolume growth so far As well asncreasng capacty and flexblty,our new plants create compettveness

through manufacturng excellenceand by usng sustanable technologes

Over half of our 252 manufacturng stes acrossthe world, from osta Rca to Japan, send nonon-hazardous waste to landfll, up from 74 atthe start of the year 100% of our stes send zerowaste to landfll n 18 countres, the equvalent ofremovng over 1 mllon household bns of wasteevery year Ths has been acheved by elmnatng

waste n the factores We also reduced, reused,recycled and recovered waste For example, nRussa, Unlever recycles tea bags to make anmalbeddng or wallpaper

More at wwwunlevercom/sustanable-lvng


WINNIN THROUH ONTINUOUS IMPROVEMENT contnued

ZERO WASTETO LANDFILL


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I AM EXITEDTO SEE THETEA PIKERSUSIN MYDESIN INTHE FIELD

Samwel Nyagucha,

tea pcker, Kenya

UnleverAnnual Report and Accounts 2012Report of the DrectorsAbout Unlever24

WINNINWITH PEOPLE


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Sustanable, proftable growth canonly be acheved f the rght people areworkng n an organsaton that s ft town, underpnned by a culture n whchperformance s always algned wthvalues We are ncreasngly an agle,

flexble and dverse busness wth peoplewho are motvated by dong good whledong well We are buldng capabltyand leadershp among our people andwe are attractng some of the best talentn the market place

apablty and leadershp

To double the sze of our busness, we needto support the talented people we already

employ so they can be the best they can beWe also need to attract the best people nthe market place

Employer of choceThs year, we were voted the numberone FM (fast-movng consumer goods)employer of choce among graduatesn 20 countres Potental employees nmarkets as dverse as Russa and Vetnam,Brazl and Bangladesh, or Indonesaand the UK thnk that we are the mostattractve employer n our sector

We acheved ths top rankng n several

countres for the very frst tme, ncludngMexco, ermany and Span whle nInda we were employer of choce, not

ust n our sector, but across the entreemployment market

We are leveragng our partnershp wthOne Young World, an annual global summtwhere young ambassadors collaborateon proects to change the world for thebetter Ths year t allowed us to ntroduceUnlever and ts commtment to makngsustanablty commonplace to 1,200delegates from 183 countres

Employer brandWe have focused on ensurng thatour standng as an employer whatwe call our employer brand has ourcommtment to sustanablty at thecore We have bult an employer brand

development tool whch leverages bestpractce, and adapted our recrutmentmodels to reach the best people whereverthey are n the world

Our dgtal presence s a vtal factor nths Sustaned nvestment and nnovatonn our socal meda nteractons haveseen us become the hghest ranked FMcompany on LnkedIns global InDemandndex Our Facebook global careers pagehas attracted more than 110,000 lkes,wth the hghest numbers n Inda, Brazl,Egypt and Indonesa of any global careerspage It s the second largest Facebook

page dedcated to careers

No 1FM employer of choceamong graduates n

20countres

BASKETS OF INENUITY

Each year, we recognse a number of employees asUnlever heroes for work that brngs our values tolfe (see page 26) Samwel Nyagucha was pckng teaon our Kapten estate n Kenya when he saw a way tomake pckers work more effcent Inspred by basketshed seen on other estates, he desgned a new pckngbasket whch keeps the tea fresh and s lght and easyto carry, allowng the pcker to work more effcently

In 2012, 6,500 baskets made to Samwels desgn weredstrbuted across our tea plantatons n Kenya andthey were ntroduced n Unlever Tea Tanzana

REAHIN

TOMORROWSLEADERS DIITALLYWe went from 40,000followers on LnkedInto 235,000 n ten months and we are stllexplorng the potentalof socal networks as away to engage wth futureemployees Recrutscan now reach us throughTwtter and Facebook aswell as LnkedIn andwe have seen an ncreasen career page vsts

DIVERSITY

REONISEDWe are proud wnnersof the prestgous2013 atalyst Award,honourng exceptonalbusness ntatves forwomen n the workplaceWe were recognsedfor acceleratng theadvancement of hgh-potental women,and leveragng culturaldversty and multnatonalexpertse to promotea culture of ncluson

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Leadershp for the futureWe are commtted to the growth ofour people throughout ther careers,and to ensurng that leadershp skllsn partcular are developed at everylevel of management Our new Four

Acres Learnng and Leadershp entren Sngapore, scheduled to open nmd-2013, s physcal proof of thscommtment Lke our long-standng FourAcres entre n Kngston, UK, the facltywll run a global currculum to drveexcellence and commtment to leadershpdevelopment and sustanablty

We now have programmes for exstngand future leaders at all levels Theseare desgned n a blended approach ofleaders teachng leaders, senor executvesponsorshp, academc rgour andapplcaton through ob experence,

mentors and coaches

A dverse busness for a dverse worldTwo bllon people use our products everyday and, f we are to meet ther needs, weneed to reflect ther dversty n our ownworkplaces Through better recrutment,

famly-frendly workng condtons,a culture of accountablty, and ntatveslke employee networks and mentorng,our busness s becomng ncreasnglygender-balanced By the end of 2012,41% of our management headcount were

women, compared to 39% at the end of2011 After a decade of steady mprovement,achevng an ncrease of more than 1%n a sngle year shows progress but werecognse there s stll a long way to go

We are workng hard to mprove furtherand t s encouragng that we have recevedexternal recognton for our efforts Forexample, we were awarded the prestgous2013 atalyst Award awarded ompanyof the Year n the Vodafone EuropeanDversty Awards 2012 named TopEmployer by workngmumscouk wnnersof Japanese magazne Toyo Kezas Female

Management Appontment Award for 2012named among the 2012 Workng Mother100 Best ompanes n the US and ourUS busness was gven a 100% ratng nthe Human Rghts ampagns orporateEqualty Index

Values andperformance culture

Ours has always been a busness based

on values We am to ensure that ntegrty,responsblty, respect and poneerngsprt underpn our actvtes In the lasttwo years we have found new ways toexpress those values through the UnleverSustanable Lvng Plan (USLP)

Engaged employeesWe have been encouraged by what ourpeople are tellng us about our cultureOur lobal People Survey (PS) measuresthe level of engagement of all employeesOver 114,000 elgble employees partcpatedn the 2012 survey, representng an 87%response rate Our engagement score of

75%, up from 73% n the 2010 PS, s nown lne wth the scores of hgh-performngemployers n our class

Other key aspects of the survey alsoshowed good progress scores rose by5% for people management, and by 4% forperformance culture, bas for acton anddversty We beleve that the USLP and ourvalues are sgnfcant factors n keepngemployees fully engaged n our busness and therefore drvng performance

Everyday heroesOur values are exemplfed every day

by thousands of employees, wthout whomour busness could not meet ts ambtonsfor sustanable growth But even amdstall ths good work, some actons standout Ths year we honoured sx employeesnomnated by ther colleagues as Unleverheroes one of the ways n whch werecognse sgnfcant contrbutons tosocety and our busness

In 2011, we began work on the UnleverFour Acres Learnng and Leadershp entren Sngapore The faclty s on course to openn md-2013, and wll provde learnng andcapablty development from our new globalcurrculum, desgned to ensure that our peoplehave the sklls to meet our growth ambtons

Four Acres Sngapore has accommodatonfor 55 students and ncludes t wo flexbletranng rooms, a teachng amphtheatreand a mult-purpose hall for up to 200 people

More at wwwunlevercom/developng-and-engagng-our-people

26 Report of the DrectorsAbout Unlever UnleverAnnual Report and Accounts 2012

WINNIN WITH PEOPLE contnued

FOUR ARES

SINAPORE


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Our 2012 heroes nclude people such asSamwel Nyagucha (pctured on page 24),a tea pcker on the Kapten estate n Kenya,whose ntatve has transformed theworkng lfe of colleagues on hs plantatonKoray Kezer, a customer development

manager n Turkey, who spent nghtssleepng n hs car whle he helpedcustomers and colleagues affected bya 72 magntude earthquake n the Vanregon last year and Abdullah Toseef,who used scrap materals to mplement awater conservaton proect whch s savng28 mllon ltres of fresh water each yearat the Rahm Yar Khan factory n Pakstan,where Abdullah s assstant manager

Agle flexble dverseorgansaton

We have substantally mproved thestructure of our busness over severalyears, amng to create an agle, flexbleand dverse organsaton that can meetthe needs of consumers all over the world

Dynamc structure for dynamc marketsWe are already seeng results fromchangng our approach to the globalmarket place Where we formerlydealt wth 22 geographcal sub-enttes,we now dvde our busness betweeneght markets, sx of whch are prmarly

made up of developng economesThs streamlned structure has allowedus to focus sharply on growth, partcularlyn emergng markets We can nowre-allocate resources quckly betweenmarkets, share best practce more easlyand concentrate our efforts on a largernumber of bgger proects

Safety a core valueEnsurng the safety and well-beng of our people and ofcontractors, supplers and vstors s ntegral to our busnessOur ambton s to record zero accdents We focus contnuously

on mprovng safety through the postve behavour of ourpeople, the desgn of our plants, facltes and products, and bymplementng safe systems and procedures throughout Unlever

A key measure of our progress, set out n the USLP, s the totalrecordable accdent frequency rate, whch counts all employeeworkplace accdents except those requrng only smple frstad treatment Ths year our total recordable accdent frequencyrate was down by 9%compared wth 2011

2012 data s prelmnary Some of our KPIs wll be ndependently assured n 2013See our onlne Unlever Sustanable Lvng Report for 2012 at wwwunlevercom/sustanable-lvng, to be publshed n Aprl 2013

We enhanced our standng as an employer bydevelopng the Employer Brand DevelopmentWheel, puttng potental employees at theheart of our thnkng Ths repeatable model,used n every market, s desgned to exceedexpectatons and beat the compettonFor example, our Future Leaders Programmeallows young graduates to take on realchallenges lke shapng the messagng behndLfebuoys handwashng campagn, brngnghygene benefts to mllons of people andcontrbutng to the brands consstent salesgrowth over the past fve years

More at wwwunlevercom/careers

75%Our employee engagement score,now n lne wth hgh-performng

employers n our class

110,000lkes of our Facebook global careerspage wthn sx months of launch


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EMPLOYER OF HOIEAREERS WITH PURPOSE


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The vrtuous crcle of growth contnues to work for usWe delvered consstent and strong top-lne growth, well-balanced between volume and prce and mproved coreoperatng margn

Delverng consstent top lne growthand mproved proftablty

Strong underlyng sales growth, led by sold volume growthrowth of our markets remaned postve n 2012 Ths was prmarly drven by strong growth nemergng markets whch grew n volume and value terms, whle developed markets remaned largelyunchanged due to contnued weak consumer confdence n Western Europe and North Amerca

Despte the challengng envronment, we have delvered strong underlyng sales growth of69% (2011 65%) We accelerated volume growth to 34% (2011 16%), well balanced wth a 33%contrbuton from prce (2011 48%) All of our categores and each of our three geographcal areasreported postve growth

As n the pror year, emergng markets were the key growth drvers wth underlyng sales up 114%We acheved double-dgt growth n many countres, ncludng Indonesa, hna, Brazl and VetnamIn developed markets we managed to grow the busness despte dffcult markets our underlyngsales were up 16%, splt equally between volume and prce

Our focus on bgger and better nnovaton, rolled out faster to more markets s a key drver behndour performance The rollout of our brands to new markets, ncludng the more recently acquredbrands, such as the launch of TRESemm n Brazl also contrbuted strongly

Amongst our categores, Home are and Personal are grew ahead of the markets, up 103% and100% respectvely resultng n sold market share gans In Home are, we outperformed marketgrowth n laundry and household cleanng In Personal are, our har care busness garnered marketshares around the world, and skn care as well as deodorants reflected the success of nnovatons

In Foods, underlyng sales growth of 18% reflects a mxed performance, beneftng from the rollout

of new products and our marketng campagns to ntroduce new uses of our products to consumersAt the same tme, declnng markets n our spreads busness and the mpact of prce rses we tookn 2011 to counter sharply ncreased raw materal costs mpacted growth momentum

63% underlyng sales growth n Refreshment reflects the contnued success of the global rolloutof our ce cream brands and nnovatons, as well as mproved growth momentum n tea, especallyn emergng markets

Sold progress n core operatng margnDespte further ncreases n nput costs and adverse currency changes, gross margn mprovedby 01% to 400% at constant exchange rates, reflectng dscplned cost management and ourncreased focus on mprovng gross margn consstently

ore operatng margn was up 03% to 138%, drven by the progress n gross margn, contnuedsavngs programmes and lower expenses for restructurng Advertsng and promotonal expensesncreased by 470 mllon, at constant exchange rates

Strong free cash flow generatonFree cash flow of 43 bllon was up by 12 bllon, drven by hgher operatng proft andmprovement n workng captal management

onsstent management focus has resulted n negatve workng captal for 13 consecutve quarterswth further progress n all ts components nventores, trade recevables and trade payables

Net captal expendture of 21 bllon was n lne wth last year, at 42% of turnover, reflectngnvestment n the capacty requred for our growng busness


FINANIALREVIEW 2012


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Fnancal overvew 2012

onsoldated ncome statement(hghlghts) for the year ended 31 December

2012 2011 % change

Turnover ( mllon) 51,324 46,467 105%Operatng proft ( mllon) 6,989 6,433 9%ore operatng proft* ( mllon) 7,062 6,289 12%Proft before tax ( mllon) 6,683 6,245 7%Net proft ( mllon) 4,948 4,623 7%Dluted earnngs per share () 154 146 5%

ore earnngs per share* () 157 141 11%

Turnover at 513 bllon ncreased 105%, ncludng a postvempact from foregn exchange of 22% and acqustons net ofdsposals of 11% Underlyng sales growth ncreased to 69%,well balanced between volume growth of 34% and prcecontrbutons of 33% As n the pror year, emergng marketsgrew strongly, wth underlyng sales up 114% and nowrepresentng 55% of total turnover

Operatng proft was 70 bllon, compared wth 64 bllon n2011, up 9% The ncrease was drven by hgher gross proft andmproved cost dscplne ore operatng proft was 71 bllon,up 12% from 63 bllon n 2011, reflectng the addtonal mpactof lower one-off credts wthn non-core tems

The cost of fnancng net borrowngs was 390 mllon, 58 mllonless than n 2011 The average level of net debt ncreased by07 bllon to 89 bllon, reflectng the full-year mpact offnancng pror year acqustons such as Alberto ulver Theaverage nterest rate was 35% on debt and 29% on cash depostsThe pensons fnancng cost was a charge of 7 mllon, comparedto a 71 mllon credt n 2011

The effectve tax rate was 264% compared wth 265% n 2011

Net proft from ont ventures and assocates, together wth otherncome from non-current nvestments, contrbuted 91 mllon n2012, compared to 189 mllon n the pror year Assets related tobusnesses sold n prevous years recorded postve adustments

to far value n 2011, whlst smlar but unrelated assets werempared n 2012

Fully dluted earnngs per share were 154, up 5% from 146n the pror year Hgher operatng proft was the key drver wthlower profts from busness dsposals and one-off tems, partallyoffset by hgher mnorty nterests and penson costs and a lowercontrbuton from non-current nvestments ore earnngs pershare were 157, up 11% from 141 n 2011, reflectng theaddtonal mpact of lower one-off credts wthn non-core tems

We have presented some parts of the fnancalrevew wthn other sectons of ths Annual Report

and Accounts, ncludng the fnancal statementssecton We beleve ths ntegrated approach provdesa better flow of nformaton and avods duplcaton

Key performance ndcators*

2012 2011 2010

Underlyng sales growth (%) 69 65 41Underlyng volume growth (%) 34 16 58ore operatng margn (%) 138 135 136Free cash flow ( mllon) 4,333 3,075 3,365

We report our performance aganst four key fnancal ndcators underlyng sales growth underlyng volume growth core operatng margn and free cash flow

The performance of the KPIs s descrbed on page 28, on ths pageand wthn the segmental commentares on pages 30 to 31 TheKPIs are descrbed on pages 34 to 35 The non-fnancal KPIs aredescrbed on pages 6 and 27

Acqustons and dsposalsOn 30 July 2012 the roup announced a defntve agreement tosell ts North Amerca frozen meals busness to onAgra Foods,Inc for a total cash consderaton of US$265 mllon The deal wascompleted on 19 August 2012 All other acqustons or dsposalsdurng the year were not materal

Further detals of acqustons and dsposals durng 2011 and 2012can be found n note 21 on pages 126 and 127

*ertan measures used n our reportng are notdefned under IFRS For further nformaton about

these measures, please refer to the commentaryon non-AAP measures on pages 34 to 35




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Personal are

2012 2011%

hange

Turnover ( mllon) 18,097 15,471 170Operatng proft ( mllon) 2,928 2,536 155

ore operatng margn (%) 171 176 (05)

Underlyng sales growth (%) 100 82Underlyng volume growth (%) 65 42Effect of prce changes (%) 33 38

Key developments Personal are grew strongly agan n 2012, wth market

outperformng growth spurred by nnovaton and the rolloutof our brands n new markets, complemented by a strongcontrbuton of the recently acqured brands

Underlyng sales growth of 100% was drven by both hghervolumes and a postve prce contrbuton Market sharesncreased, beneftng from gans n all geographes andstrong performance n the harcare, deodorants and skn

cleansng categores ore operatng margn was down 05%, reflectng contnuednvestments n buldng beauty capabltes and nfrastructure

Refreshment

2012 2011%

hange

Turnover ( mllon) 9,726 8,804 105Operatng proft ( mllon) 911 723 260

ore operatng margn (%) 94 77 17


Key developments Performance n Refreshment mproved n growth momentum

as well as proftablty Underlyng sales growth of 63%reflects good contrbuton from volume growth and from prcechanges ore operatng margn mproved by 17% Ths wasdrven by hgher gross margn, strong savngs programmesand cost dscplne

In ce cream, growth momentum was drven by powerfulperformance n Latn Amerca, Asa, North Amerca andEurope and benefted from nnovaton behnd our globalbrands such as Magnum, whch s now a brand wth salesn excess of 1 bllon

In tea, nnovaton mproved growth momentum n partcular

n emergng markets, such as Russa, Araba and Inda

Foods

2012 2011%

hange

Turnover ( mllon) 14,444 13,986 33Operatng proft ( mllon) 2,605 2,693 (33)

ore operatng margn (%) 175 175

Underlyng sales growth (%) 18 49Underlyng volume growth (%) (09) (12)Effect of prce changes (%) 27 62

Key developments Underlyng sales growth n Foods was 18% Volume growth

was slghtly negatve, contnung to reflect the mpact ofa contractng spreads market and the prce rses we tookn 2011 to counter sgnfcant ncreases n nput prces

rowth was supported by the rollout of nnovatons suchas Knorr Jelly Boullon and Knorr Bakng Bags, as well assold results delvered by our Food Solutons busness

ore operatng margn was flat wth lower gross margn,

reflectng the mpact of hgher commodty costs, offsetby mproved cost dscplne and savngs delvery

Home are

2012 2011%

hange

Turnover ( mllon) 9,057 8,206 104Operatng proft ( mllon) 545 481 133



Key developments Home are delvered a strong performance wth underlyng

sales growth of 103%, ahead of market growth and balancedbetween volume growth of 62% and prce changescontrbutng 39%

We mproved value market shares n our laundry busnessacross geographes and n partcular n a number of hghlycompettve markets such as UK, France, hna and SouthAfrca on the back of contnued nnovaton and the rolloutof our brands

Household care growth was equally supported by the rolloutof new and mproved products, drvng strong growthmomentum for our global brands Domestos, f and Sunlght

ore operatng margn was up by 05%, beneftng fromsuccessful new busness models


FINANIAL REVIEW 2012contnued


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Asa/AMET/RUB

2012 2011

%

hange




Key developments Strong underlyng sales growth of 106% contnued at a smlar

level as the pror year wth an even stronger volume componentof 57%, despte a hgher base and some softness n economcgrowth n the regon Innovaton and the rollout of our brandsnto new markets supported the growth momentum, whchresulted n double-dgt growth n a number of countres,ncludng Indonesa, hna, Thaland and Inda

ans n value market share were prmarly drven by thePersonal are and Home are categores, on the back ofstrong sustaned momentum n harcare, deodorants andhousehold care Foods value shares were slghtly down

ore operatng margn was up 11%, beneftng from mprovedgross margn and cost dscplne

The Amercas

2012 2011

%

hange



Underlyng sales growth (%) 79 63

U

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