Disclaimer Notes to the Annual Report and Accounts This PDF Version Of
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Disclaimer Notes to the Annual Report and Accounts This PDF version of the Unilever Annual Report and Accounts 2008 is an exact copy of the document provided to Unilever’s shareholders. Certain sections of the Unilever Annual Report and Accounts 2008 have been audited. Sections that have been audited are set out on pages 81 to 136, 140 to 141, 143 to 145 and 148 to 150. The auditable part of the report of the Remuneration Committee as set out on page 60 has also been audited. The maintenance and integrity of the Unilever website is the responsibility of the Directors; the work carried out by the auditors does not involve consideration of these matters. Accordingly, the auditors accept no responsibility for any changes that may have occurred to the financial statements since they were initially placed on the website. Legislation in the United Kingdom and the Netherlands governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions. Disclaimer Except where you are a shareholder, this material is provided for information purposes only and 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-looking statements 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 accessed from this site by hyperlinks. Unilever Annual Report and Accounts 2008 Annual Report and Accounts 2008 Adding Vitality to Life Unilever N.V. Weena 455, PO Box 760 3000 DK Rotterdam The Netherlands T +31 (0)10 217 4000 F +31 (0)10 217 4798 Commercial Register Rotterdam Number: 24051830 Unilever PLC Unilever House 100 Victoria Embankment London EC4Y 0DY United Kingdom T +44 (0)20 7822 5252 F +44 (0)20 7822 5951 Unilever PLC registered office Unilever PLC Port Sunlight Wirral Merseyside CH62 4ZD United Kingdom Registered in England and Wales Company Number: 41424 www.unilever.com Contents Report of the Directors Adding Vitality to Life 1 Our highlights 2 Our brands and operations Unilever’s mission is to add Vitality to Life. 4 Chairman’s statement We meet everyday needs for nutrition, 6 Chief Executive Officer’s review 8 Unilever Executive hygiene and personal care with brands 9 Vitality that help people feel good, look good and 18 Board of Directors get more out of life. 20 About Unilever 20 Our business and our strategy 20 Key indicators The Unilever Group 21 Organisation 22 Operating environment Unilever N.V. (NV) is a public limited company registered in the 22 Resources Netherlands, which has listings of shares and depositary receipts for shares on Euronext Amsterdam and of New York Registry 24 Laws and regulation Shares on the New York Stock Exchange. 25 Outlook and risks 29 Performance review Unilever PLC (PLC) is a public limited company registered in 35 Financial Review England and Wales which has shares listed on the London Stock 44 Corporate governance Exchange and, as American Depositary Receipts, on the New York Stock Exchange. 59 Report of the Nomination Committee 60 Report of the Remuneration Committee The two parent companies, NV and PLC, together with their 74 Report of the Audit Committee group companies, operate as a single economic entity (the 75 Report of the Corporate Responsibility Unilever Group, also referred to as Unilever or the Group). and Reputation Committee NV and PLC and their group companies constitute a single reporting entity for the purposes of presenting consolidated accounts. Accordingly, the accounts of the Unilever Group Financial statements are presented by both NV and PLC as their respective consolidated accounts. 78 Statement of Directors’ responsibilities 79 Auditors’ reports Basis of reporting 81 Consolidated income statement Our accounting policies are based on International Financial Reporting Standards (IFRS) as adopted by the European Union 81 Consolidated statement of recognised (EU), and on United Kingdom and Dutch law. They are also in income and expense accordance with IFRS as issued by the International Accounting 82 Consolidated balance sheet Standards Board (IASB). Certain measures used in our reporting 83 Consolidated cash flow statement are not defined under IFRS or other generally accepted 84 Notes to the consolidated accounts accounting principles. For further information about these measures, and the reasons why we believe they are important 137 Financial record for an understanding of the performance of the business, 140 Principal group companies and please refer to the Performance Review on page 29 and the non-current investments Financial Review on page 35. 142 Company accounts The brand names shown in this report are trademarks owned by or licensed to companies within the Unilever Group. Shareholder information Exchange rates 153 Analysis of shareholding Details of key exchange rates used in preparation of these 154 Exchange controls affecting accounts are given on page 139, together with Noon Buying security holders Rates in New York for the equivalent dates. 155 Nature of the trading market Forward-looking statements 157 Dividend record This document contains certain statements that are neither 158 Financial calendar reported financial results nor other historical information. These 158 Contact details statements are forward-looking statements, including within 159 Website the meaning of the United States Private Securities Litigation 159 Publications Reform Act of 1995. For a description of factors that could affect future results, reference should be made to the full 159 Share registration ‘Cautionary statement’ on the inside back cover. 160 Index Our highlights Financial 7.4% underlying sales growth Turnover (€ million) Operating margin (%) 2008 40 523 2008 17.7 2007 40 187 2007 13.1 • Ungeared free cash flow of €3.2 billion • Profits on disposals of €2.2 billion pre-tax • Return on invested capital of 15.7% • Total shareholder return ranking 9th out of 21 • Earnings per share of €1.79, including €0.36 net benefit from disposals and restructuring • Total dividend increased to €0.77 per Ordinary €0.16 share of NV and 60.74p per 1 Ordinary 3 /9p share of PLC Social 22 000 products have had their nutritional profile assessed Total recordable accident frequency • 1 9 % reduction rate per 100 000 hours* in total recordable 2008 0.21 accident frequency 2007 0.26 rate in 2008* * 2008 data are preliminary data. They will be • independentlyThree quarters assured of and the reported food in products the in our R&D pipeline bring specific nutritional or health benefits online Sustainable Development Report 2008 • at 16 www.unilever.com/sustainability million school meals delivered to 76 000 children in 2008 through our partnership with the World Food Programme • Four million children reached by Signal / Pepsodent / Close Up toothpaste brands through school-based oral health programmes in 2008 • 120 million people reached by Lifebuoy brand’s handwashing programme in India since 2002 Environmental 10 years as sector leader of the Dow Jones Sustainability Indexes CO2 from energy per tonne Water per tonne of Total waste per tonne of production (kg)* production (m3)* of production (kg)* 2008 146.77 2008 2.96 2008 7.89 2007 149.18 2007 3.05 2007 7.56 * 2008 data are preliminary data. They will be independently* Preliminary assured figures and for reported 2008: these in * Preliminary figures for 2008: these • the20 online 1 5 : the Sustainable year by Development which we Report are 2008committed at figures www.unilever.com/sustainability will to be sourcing audited in all April palm 2009 oil from certified figures will besustainable audited in April sources 2009 • c. 50% of the tea we sell in Western Europe is grown on Rainforest Alliance Certified™ farms • 3 9 % reduction in CO2 emissions per tonne of production over the period 1995-2008* * 2008 data is preliminary. It will be independently assured and reported in our online Sustainable Development Report 2008 at www.unilever.com/sustainability Unilever Annual Report and Accounts 2008 1 Report of the Directors Our brands and operations Our strong portfolio of foods, home and personal care brands is trusted by consumers the world over. 13 of our brands achieve annual sales of €1 billion or more. Our top 25 brands account for over 70% of our sales. Operational achievements Regional highlights • Strong broad-based underlying sales growth of 7.4% Turnover by region Underlying sales growth across categories € million (contribution to Group %) % • More competitive cost base: €1.1 billion savings from supply chain and organisational efficiencies 1.3 12 853 14 471 • Increased investment behind our brands (32%) (36%) • Portfolio reshaped through disposals, including North 6.5 American laundry, Boursin, Lawry’s and Bertolli olive oil 13 199 • Portfolio strengthened through the acquisition of Inmarko ice 14.2 (32%) cream in Russia and the planned acquisition of the TIGI hair salon brands • Named International Supplier of the Year by Tesco for the Western Europe third year running The Americas Asia, Africa and Central & Eastern Europe 2 Unilever Annual Report and Accounts 2008 Our €1 billion brands* • Axe/Lynx • Blue Band • Dove • Flora/Becel • Heartbrand ice creams • Hellmann’s • Knorr • Lipton • Lux • Omo • Rexona • Sunsilk