Increasing Competitiveness

Prudential Back to School Conference, Boston September 8, 2005

Rudy Markham Ralph Kugler Chief Financial President, Home and Officer Personal Care

0 Rudy Markham Chief Financial Officer

Good morning, ladies and gentlemen. I am pleased to be here in Boston, presenting at one of the year’s major investor events. Since Unilever was last here, two years ago, our performance has disappointed but I am glad to be able to say that we have begun to put this right. Indeed, while it is still early days, the first encouraging signs of progress are evident in the first half year results.

I am not going to repeat the detailed description of the areas where we needed to increase our competitiveness, which we went into at some length at the start of this year. The simple fact was that we had started to lose market share. While the share losses were small, they were an indication of the need for action. So in September last year we drew a line in the sand and changed the priorities for the remainder of the year to support growth. This was followed by the announcement of a simplification of our organisation structure, capitalising on the simpler business that we have created over the past 5 years.

With me today is my Board colleague, Ralph Kugler, President of Home and Personal Care, who sits with me on the new executive team. Ralph will tell you about how we are changing and how this will translate into improved market place performance.

1 Safe Harbour Statement

This presentation may contain forward-looking statements, including ‘forward-looking statements’ within the meaning of the United States Private Securities Litigation Reform Act of 1995. These forward-looking statements are based upon current expectations and assumptions regarding anticipated developments and other factors affecting the Group. They are not historical facts, nor are they guarantees of future performance. Because these forward-looking statements involve risks and uncertainties, there are important factors that could cause actual results to differ materially from those expressed or implied by these forward-looking statements. Further details of potential risks and uncertainties affecting the Group are described in the Group’s filings with the London Stock Exchange, Euronext Amsterdam and the US Securities and Exchange Commission, including the Annual Report & Accounts on Form 20-F. These forward-looking statements speak only as of the date of this presentation.

As usual, we will take the safe harbour statement shown here as read – it is included in the slides to this presentation which are available on our web site.

I have said that over the past 5 years we have created a simpler business, so let’s first take a look at what this means.

2 Unilever’s Strong Portfolio

Unilever’s World Category Positions Our $1bn brands

Savoury & Dressings Spreads Weight Management Tea Ice Cream

Frozen Foods #1 in Europe

Laundry #1 in D&E Household Care Focus on 2 brands Daily Hair Care #1 in D&E Skin Deodorants Focus on country Number 1 Oral Care strongholds Number 2 Number 3 or less Source: Euromonitor, Unilever estimates

We operate in 12 categories. We are global leaders in 7 of these, while in 3 of the others we have leading positions in our main markets.

We manage these categories through a portfolio of brands which is now much more focussed.

We have some 200+ brand positions - a huge reduction on 5 years ago. These include global brands, like Dove, Lux, Lipton and Hellmann’s and local jewels, like Suave here in the US. 13 of these brands have sales of over 1 billion dollars.

3 Scale and Geographic Reach 2004 Turnover: € 39.1 billion, US$48.4 billion

Europe: 43%

The Americas: 32% Asia/Africa: 25%

35% in Developing and Emerging markets (all countries except W Europe, US, Canada, Australia & Japan)

Total sales last year were close to 50 billion dollars. We have a very broad reach across the developed world. In the US alone we now have a business of some 10 billion dollars and are starting to use that scale by going to market as one company for the first time.

But probably the most striking feature is that a little over 35% of our business, or 17 billion dollars of sales, is in developing and emerging markets. The purchasing power of these countries continues to grow and indeed is expected to overtake that of the developed countries for the first time next year. By 2010, nearly 90% of the world’s population will be located there.

We have been established in most of these markets for a long time – in a number of cases for over 70 years. From a strong base, our sales here have grown organically at an average of about 8% p.a. over the last 15 years – and did so again in the first half of 2005 – equivalent to well over a billion dollars of additional annual sales. It is also profitable growth, with an average operating margin of around 14%.

Overall, then, a strong portfolio of brands with excellent scale and geographic reach - but we hadn’t been delivering the top line growth we knew Unilever was capable of.

4 2005 Priorities

z Regain momentum in Western Europe z Drive successes harder - Build on strengths in Developing & Emerging markets - Build on strengths in Personal Care - Key Vitality launches z Cost savings to help fund increased competitiveness z Implement new organisation and keep market focus

So these were the priorities we set out at the beginning of this year.

Starting with Western Europe. This was the major drag on growth in 2004 and we are determined to regain momentum there.

5 2005 Priorities

z Regain momentum in Western Europe

z Drive successes harder - Build on strengths in Developing & Emerging markets - Build on strengths in Personal Care - Key Vitality launches

z Cost savings to help fund increased competitiveness

z Implement new organisation and keep market focus

Markets across Western Europe are broadly flat. After a few years of weak economic growth consumers are more value conscious than ever. This does not mean they do not want brands – but they do want value for their money. They are as attracted as ever to brands that can meet their individual aspirations with added functional benefits and provide an emotional connection. But….these must be convincing and worth the price, otherwise they will buy a private label product instead. This has proved fertile ground for the growth of hard discounters, particularly in countries where there has not been a strong value focus from established national retailers. Thus in Germany hard discounters now have a market share of about 40%. By contrast, in the UK their share has been held to only 5%, at least in part because the major established chains, and Tesco in particular, have played a greater role in emphasising value for money – in a way perhaps similar to the role that Wal.Mart plays in the US. The major retail chains have clearly recognised the threat from hard discounters and have been responding. Indeed, it is largely this which has held back pricing and thus overall growth in Western Europe over the past couple of years. Against this background, we are placing increased emphasis on understanding the different ways that shoppers, our consumers, choose to make their purchases so that we can tailor our offerings accordingly. This helps us to work with both the established retailers and with discounters, who are each looking to define their own unique market positioning. We can help them do this with in-store brand activation designed to their needs and in some cases with specific product formats. Beyond this, we are increasing our competitiveness to ensure that our brands do offer real value. This is a more general theme for us.

6 Increasing Competitiveness

Innovation Winning With Customers

Marketing Pricing Investment

Improvement in market share trend

This chart shows the 4 key elements of competitiveness: Innovation, winning with customers – by which we mean retailers, marketing investment and pricing.

Importantly these elements must all work together to drive market share. It is rare that the answer to a struggling brand’s problems is simply to cut the price. Similarly, a great innovation can be lost without the supportive partnership of retailers. And simply throwing money into the market in the form of advertising is not in itself the route to profitable growth.

There are plenty of great examples in Unilever when these elements do all come together in a winning formula. We know how to do it. But there have also been a number of cases where we have not executed well enough across all of them.

We have also not always been quick enough to recognise a successful innovation in one part of the world and build on it elsewhere. This has been true in both Foods and Home and Personal Care, from heart health margarines to hair care.

So the next key priority is to drive our successes harder.

7 2005 Priorities

Firstly in developing and emerging markets, to capitalise on the strong base there, from Brazil to South Africa all the way to India and Indonesia. Again, it is the combination of excellent innovation and brand activation which is the key.

Secondly, in Personal Care. We have grown over many years in high single digits. This is faster than the market growth and reflects the strength of our brands. Brands like Degree, Ponds, Axe, Suave and, of course, Dove. There is no reason why we should not continue to grow faster than the market: across much of the world, competition is still relatively fragmented. Our growth did fall back in 2004 but is now returning well.

Thirdly, by bringing to market new products inspired by the theme of Vitality which is now the driving force behind our innovation programmes across both Foods and Home and Personal Care categories.

8 Vitality Innovation

Heart Health

Knorr Vie

Breyers Double Churned Power of Tea Light Ice Cream Ragu Organic

A clear example of this is the introduction of Knorr Vie – ‘smoothie’- style drinks in a small bottle which provide half the daily recommended intake of fruit and vegetables. They have already been launched in four European markets and more will follow. You’ll find some outside this room, near the Ben and Jerry’s cabinet, and if you haven’t already tried one I would encourage you to do so !

You can see it also in the further development of our heart health brands. In Europe, the successful pro.activ range continues to extend, while here in the US we have started to transform the under- developed Promise brand into the successful European Flora/Becel mix.

Other examples are Lipton tea with the AOX antioxidant seal, Ragu Organic, and the launch of Breyers Light ‘double churned’ Ice Cream.

But Vitality is also a powerful theme that goes well beyond ‘health and wellness’ in Foods and Ralph will show you some great examples of Vitality in action in Home and Personal Care.

9 2005 Priorities

To help fund the actions we are taking to improve competitiveness, we are driving cost efficiency.

This encompasses an ongoing global buying programme, further simplification of the supply chain, and reductions in overheads as we de-layer the organisation and integrate our Foods and Home and Personal Care businesses around the world.

And to reinforce the execution of these priorities we are implementing a new organisation. This is being done in a professional and disciplined way to ensure that we keep, and indeed increase, our market focus.

Let me try and give a flavour of how this is working.

10 New Organisation

• Simpler, faster, more accountable • Proximity to market, Prioritisation of resource, Performance focus

CEO Patrick Cescau President Europe Kees van der Graaf President Chief Officer HPC Finance President Ralph Kugler Rudy Markham Americas John Rice President Chief Officer President Foods Human Resources Asia / Africa Vindi Banga Sandy Ogg Harish Manwani

Regions Categories Functions Clear, distinct and complementary roles

Here is the new top team. This single executive group replaces three bodies in the old organisation: an executive committee and two divisions. It means faster decisions and action and greater accountability. Importantly, it is also much closer to the market and is focussed on delivery. It is accountable to a board made up mainly of independent non-executive directors, with a non-executive chairman. Reporting to Patrick Cescau are three regions, two categories and two functions. This executive sets strategy and determines priorities across countries and categories. We meet every month to review the market place performance and execution and make adjustments to priorities and resource allocation where necessary. The regions are responsible for deploying the brands and innovations effectively. They manage the business on the ground and are focussed on winning with customers. The regions deliver the growth today and the profit and cash flow – value creation. The categories are responsible for brand development, innovation and for the brand and category strategies. They are located around the world – in global technology centres, regional innovation centres and alongside local business managers. They deliver the growth and profit of ‘tomorrow’ and thus sustainable value creation. Sandy Ogg and I are responsible for building functional excellence in HR and finance. We have benchmarked ourselves against the best in terms of cost efficiency and capabilities and our objective is to raise the bar on both. So, we have simplified the structure at the top and have unambiguous allocation of responsibilities throughout the organisation. A key element of the overall organisational change is the move to ‘One Unilever’, announced last July.

11 One Unilever Leveraging Unilever’s scale

z Integration of HPC and Foods operations

z Single face to customers and suppliers

z Shared services, outsourcing

z De-layered management

€700 m p.a. savings by end 2006 Further opportunities beyond 2006

In each country where this is not yet the case, we are integrating our HPC and Foods operations. This brings two important benefits: Firstly, by presenting a single face to customers. Recent industry consolidation has revived the question of whether scale, across different categories, matters, or if it is enough to be leader in just one or two ? We believe that both are important. New product introductions, promotions, shelf space management and pricing are discussed at a category level. But there is another level of the partnership – which covers overall supply chain efficiency and looks at changing shopper patterns and responses to growth of alternative formats. Particularly interestingly for us, and an area where we are leading the way in the US, is our ability to bring real shopper insight not just for a particular category, but across the store. The second major benefit is in lower overheads costs – by moving to a single management structure in each country and shared services, usually from a regional centre. We expect savings of €700m per year, or nearly two percentage points of sales, by the end of 2006. There will be a reduction of 15% in the top two levels of management this year and we expect to reduce the top 3 levels by between a quarter and a third by the end of next year. This level of change clearly needs to be well planned and executed to minimise disruption – but we have plenty of experience in this. We also already have some well-proven examples of the benefits of acting as one. In Canada we moved to a single company in 2000. From being ranked as two mid- tier suppliers by the retail industry, we are now ranked in the top tier, while we have moved from no growth to an average of 4% over the past 4 years and with sharply improved margins. Along with the changes in organisation, Patrick has taken steps to improve the alignment of incentives with our financial and business priorities, as illustrated in this next chart

12 Alignment

Incentives aligned with financial and business objectives

Long-term incentive plans Financial objectives

Total Shareholder Return (3 year rolling) Top Third Restricted stock grant conditional on 3 year performance: • Ungeared Free Cash Flow €25-30 bn by 2010 • Underlying sales growth

Annual bonus Maintain, or grow, market share Business unit sales growth Economic Value Added ROIC improvement Business priority objectives

There are two long-term incentive schemes. The first, for top management, supports our over-arching ambition of top third total shareholder return.

The second replaces the old stock option programme and is available to a broader base of managers. It is a restricted stock grant, conditional on performance over 3 years on two metrics: cash flow and underlying sales growth. The vesting condition on ungeared free cash flow is consistent with our longer term objective of delivering €25-30 billion in the six years to 2010. The internal underlying sales growth targets reflect the fact that top line growth is essential to long term value creation. We intend to maintain, or increase, our share in markets which have longer term volume driven growth rates of between 2 and 4% per year.

Finally, there is a shorter term annual bonus available to all managers. Half of this is based on performance of the particular business unit in terms of sales growth and Economic Value Added. Our measure of Economic Value Added is the prime profit metric we use in the business and is well aligned with our objective of a progressive improvement in ROIC to 2010.

The other half of the short term bonus is based on delivery of specific objectives which are driven off the business priorities set by the Unilever Executive –which might be, for example, market share in a particularly category in a particular country for a growth priority.

At this point I will hand over to Ralph who can bring the changes to life with some very real examples, and I will then conclude with a quick summary of progress in the first half year.

13 Ralph Kugler President Home and Personal Care

14 Organized to Win

world class brand mixes The Role of the Categories

brought to market brilliantly The Role of the Regions

working seamlessly and interdependently together

As Unilever, we are intent on building on our historic strength of deep roots across the world, but exploiting the advantages of scale and scope where these add value.

As Rudy has already shown, the new organisation focuses on clearly differentiated tasks for the categories and regions, with clear accountability for results, and strong interdependence between the two. I plan to show you how we will use this to grow through winning brands and to illustrate it with 3 examples.

It also allows us to capitalise on our unique heritage in a way that is clearly different from our major competitors.

15 Strong Stable of HPC Brands

Dove

Lux Omo Sunsilk Skip Rexona Surf Pond’s Radiant Axe

Suave Snuggle

Vaseline Comfort Lifebuoy Cif Clear Domestos Signal

Close-Up

We will do this with strong brands which are leaders in their segments with distinctive and insightful positioning, underpinned by unique technology, and supported by great communication. For example, our brand focus exercise identified about 2 dozen global HPC brands capable of working across borders, as it was clear that we need to deploy the full force of Unilever’s scale across all capabilities - just as some of our global competitors are rolling out their proven brands, even into the geographies that had traditionally been our own preserve such as Asia and South America. Brand focus has left us with a strong stable of brands but history had bequeathed something of a ‘patchwork quilt’ in that some brands were strong in some countries, and different ones strong in others.

16 The Challenge

“Multi-local and multi-national” a competitive differentiator …

…But how to deploy global scale without losing the benefit of deep local roots ? our destination today

“mindlessly “hopelessly global” local”

Our strategy is to build on our historic strength based on deep roots in local markets, but exploiting the advantages of scale and scope. This is about getting the right balance between “hopelessly local” and “mindlessly global” in a way that is clearly different from our major competitors . Certainly it capitalises on our unique heritage. In one way or another all multinational companies are wrestling with this new marketing challenge - how much to globalise, how much to tailor to local tastes. How to deploy powerful distinctive brand ideas with global appeal across markets at different stages of development, different histories different cultures and different incomes?

The potential growth from the successful extension into new territories is substantial.

17 Axe Effect - Now in the US

Axe, one of our fastest growing brands, is a good illustration of what I mean. For reasons that no doubt seemed good at the time, Axe was never extended into the United States. We finally launched in 2002, - an early example of our strategy to more aggressively extend our strongest properties into virgin territory.

The innovation came from Europe and Latin America where Axe was already highly successful, whilst the US company focused on brilliant activation in the market and with local consumers.

18 Taking the Axe Effect Global

2001 2005 AMET 3% Asia AMET 6% 3% North America 14%

Lat Am Asia 26% 9% Europe 47% Europe 65% LatAm 27%

Share of Axe turnover by region

Entirely incremental business for us, and a contributory factor to Axe’s continued double digit global growth, every year.

19 Axe Value Share US

Deodorant 12

4 Dollar Share Bodywash ( total market ) 2

3 002 005 EST 2 200 2004 2 T LA

The results in the US have been spectacular - with both Deodorant and Body-wash quickly taking leadership of the male segment of their respective categories.

Terrific idea. First class pack design and advertising. And ample proof that big ideas can travel. Notwithstanding the fact that in the US there existed neither any significant aerosol market, nor a fragranced bodyspray sector, we’ve built strong, leading positions.

20 A Heritage of Fragmentation

Let’s look at another example of how deploying our global scale is beginning to pay dividends. This time in the laundry business, and our biggest brand, Omo.

Through its varied history of local launches and relaunches over the years, Omo had become highly fragmented, with different positions and liveries around the world. This is how we built our leadership in many countries, but it also made it almost impossible to simplify and focus our R&D and marketing programmes.

21 A Universally Relevant Idea

Through an exhaustive programme of consumer research, we have identified a brand positioning that builds on the root strengths of many of these different market positions.

Our global and Brazilian teams have together developed a new brand idea, which research and in-market experience has shown to be powerfully resonant in many different geographies. This brand idea has come to be known as “Dirt is Good”, and it exemplifies Vitality, the joie de vivre, that underpins Unilever brands.

22 A Unifying Factor

…for brands with local independent heritage...

This idea has acted as a unifying factor for brands that come from a diverse heritage, which had had a bewildering complexity in terms of packaging, formulation, brand names, and advertising.

Pragmatism must be balanced with respect for consumer preference - and this has almost always meant that brand names have not been changed – nor even the iconic colour green of Rinso in Indonesia! But in all other respects, these brands are the same.

23 Driving Local Alignment

1997 2001 2003 2005 2007

Pack Idea Innovation 360º Suppliers Identity

The “Dirt is Good” brand idea has allowed us to drive global alignment across all aspects of the marketing mix, - not just packaging, but also suppliers, new ideas, innovation and in the way the brand is experienced by consumers.

This alignment has also been a powerful force for simplification

24 2006

A single cornerstone position...

…working globally

For the first time ever, we have one global laundry brand, with one common proposition and a unified programme.

This means that - notwithstanding our heritage, and differing brand names, our leading laundry brands can stand up to the large global competitive brands on equal terms….

25 A New Global Competitor

… rather than fighting the competition as a fleet of tugs.

We can now put our best laundry talent globally to work on one brand with one development programme, and the opportunity to deploy ideas quickly from one region to another.

Given our heritage, however, you would expect us to execute it in a way that is tailored to local reality and tastes.

Take a look at this film from Latin America.

26 Advertising: “Dirt is Good” Brand Roll Out

- “No Mum” (Latin America)

27 Brand Activation

‘Sport Wave’ 360º - Brazil Pilot 2005

…bigger, replicable with unrivalled stature...

One of the advantages of behaving as a $2bio brand is that you can command to your advantage the type of global talent that smaller brands cannot deploy.

Like the world’s finest footballer (and by that I mean the ‘beautiful game’, with the round ball, played with the proper rules…)

And not just Ronaldinho, but even his mum!

And locally, our companies have been able to take this big idea and execute it more powerfully because now they are really focussing on how to activate brands in the market.

28 Advertising:

- “Ronaldinho” (Brazil) x 2 - “Ronaldinho” (Spain) x 1

29 Enhancing Performance

External Panel Attribute Data

100 “Removes any type of stains”

80 Any Omo

Omo Multiação 60

40 Omo Progress Brilhante Ariel 20 Ace Omo Cores Minerva Bold Campeiro Surf 0 Pop J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D 2002 2003 2004

This advertising idea, although powerfully emotional - has been shown in our regular tracking also to drive strong performance attributes. In fact they have never been higher.

This shows consumers perception of Omo’s stain removal in Brazil.

30 Enhancing Performance

External Panel Attribute Data

100 “Leaves clothes whiter”

80 Any Omo

Omo Multiação 60

Omo Progress Brilhante Ariel 20 Ace Omo Cores Minerva Bold Campeiro Surf 0 J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D Pop 2002 2003 2004

…. and this one shows which brands consumers believe to leave clothes whiter . This strong brand idea is driving key brand attributes higher.

31 Turkey Q4 05

Our new structure enables faster. Here is an example from Turkey.

32 Advertising:

- Omo “Basketball” (Turkey)

33 Business Results

Market Share - Turkey

“Dirt is Good” Launch 30

OMO 21 ALO ARIEL

Jan/Feb.2002 Jul/Aug.2002 Jan/Feb.2003 Jul/Aug.2003 Jan/Feb.2004 Jul/Aug.2004 Jan/Feb.2005

Just as in Brazil, Dirt is Good drove brand share growth, and won back market leadership in Turkey that we had lost during 2003.

34 But it is not only with our historically fragmented portfolios that the new organisation is having an impact. Dove, possibly our most global brand, is also benefiting from our new-found capability to deploy our best brand and advertising ideas around the world more effectively and more quickly.

35 New Dove Organization

Personal Care Group VP

Category SVP Category SVP Global Brand VP Category SVP Category VP Deodorants Skin Dove Hair Oral

Global VP Global VP Global VP Dove Dove Dove Skin Hair Deo

Interfacing with regions

Previously the management of the brand had been in the hands of 6 separate regional teams, coordinated by the global brand director. Underneath the apparent uniformity of the brand there was room for considerable regional variation. Sometimes this was driven by genuine consumer differences. Sometimes, but not always ... Under the new organization, the brand is the executive responsibility of the global Senior Vice President, and this has immediately resulted in significant changes in the management of the brand.

This small team leads and co-ordinates Dove development which continue to be done in our regional centres.

36 A Clear Strategy

Dove Mission To make more women feel beautiful everyday. By widening today’s stereotypical view of beauty and by inspiring women to take great care of themselves.

The Dove brand mission, well aligned with the company’s Vitality mission, is “to make more women feel beautiful everyday, by widening today’s stereotypical view of beauty and by inspiring women to take great care of themselves.”

37 Before the New Organization

Massive success in Europe in 2004: Dove Firming

This was best expressed in the launch of Dove Firming Cream, developed in Europe, through this iconic advertising campaign, which celebrated real women as they are – not the artificially slim ideal that most models represent.

The campaign was so daring, fresh and so in tune with the spirit of the age that it garnered quite unprecedented PR coverage, and exceptional popular appeal amongst women.

38 Newspapers, magazines and TV programmes all picked up the story of Dove, in tune with real women.

39 These pictures give you an idea of how strong the popular appeal of this campaign was in Europe over the last 12 months. This is the front cover of the London Times weekend magazine. The campaign was featured as the leading article under their own initiative.

40 And a film was made just for Wal*Mart, using their own staff.

41 Algemeen Dagblad 16 March 2004

And this is an example from the Netherlands.

But it wasn’t just a PR success - sales of our body cream range in Europe increased by more than 80%.

Notwithstanding this success, North America, Lat Am and Asia initially proposed reasons why the campaign would not be suitable for them.

This debate slowed down the rollout of our campaign. The point I want to make is that with our new organization, brand management is sufficiently expert, focused and now empowered to make the appropriate call in these instances.

Dove Firming grew by 400% in 2004.

Is now a category 40+ €M x-category business in Europe.

Free PR generated was worth 9 €M in the top 4 countries in Europe.

42 One Year Later

Rolled out in Latin America

One year later, the campaign has been rolled out across the world with the same spectacular level of impact. Note that we still tailor the communication as appropriate - but use local consumer insight to adjust for real cultural differences..

43 One Year Later

Rolled out in North America

…here is the US version.

44 One Year Later

Rolled out in Asia

So we have rolled out this big idea in less than a year worldwide - and the campaign is having the same success as it did in Europe last year.

45 Dove Performance

Turnover - Cumulative to June 2005

600 1500 1400 550 1300 +12% 500 +18% 1200 450 1100 400 1000 +3% 900 350 800 300 700 250 +7% 600 500 200 +27% 400 150 300 +22% 100 200 50 100 0 0 Total North Am Europe Asia Latin Am Africa & ME

Most important of all is the impact in the market place. Our largest personal care brand is growing this year by 12% with no new category launch or geographic extensions -faster than last year.

Most impressive of all, it is growing in high double digits in North America where it has been on the market for more than 50 years. Conclusive proof that inspirational management of brand equity and appropriate innovation with excellent in store activation can drive dynamic growth in even our most venerable brands!

And the growth is not slowing down….

46 Organized for Success

z Vitality is in tune with consumers

z Strong brand ideas work globally

z Fast roll out maximises the opportunity

z Unilever’s new organisation is enabling this to happen - now

So the changes I have described really make a difference. W have an enviable portfolio of strong brands, with many leadership positions. In the recent past, we have constrained our success, with a fragmented regional approach to brand development, which has slowed down the roll out of big ideas, and divided our resource over too many projects.

Our innovation programme, based on brands that exemplify Vitality, and enabled by the changes I’ve described, are all really making a difference.

With faster roll-out of proven successes, quickly, we are already seeing the results – and in a way that can combine big global insights with relevant local cultural differences.

Thank you. Now back to Rudy.

47 Rudy Markham Chief Financial Officer

Thanks, Ralph.

Let me give you a brief update on progress, starting with sales.

48 Progress on Growth

Q4 ‘04 Q1 ‘05 Q2 ‘05

Turnover +0.6% +2.3% +1.4%

Like-for-like growth* +1% +2% +3.3%

• Market shares stabilised • Volume based • Strong growth in Developing & Emerging markets • Solid growth in North America • But … Europe remains weak

* organic sales growth, at constant exchange rates, days adjusted

It has been encouraging to see a trend of improving like-for-like growth: from 1% to 2% to 3.3% over the last three quarters - clear evidence that the steps we took to start to increase competitiveness from the fourth quarter of last year are gaining traction.

Market shares have been stabilised since the start of the year and are starting to tick up in a number of places – though in aggregate they are still a little lower than a year ago.

D&E markets have returned to strong growth, 8% like-for-like in the first half, and 10% in the second quarter. This was broad based across both Home and Personal Care and Foods and by region and by country. Of our top 15 developing and emerging markets, every one grew by at least 7% in the second quarter, while 11 of them grew in double digits.

Like-for-like growth in North America has been solid in the first half at around 2 to 2.5% despite a sharp decline in Slim.Fast.

However we have not yet turned the corner in Western Europe. We are no longer losing share overall, but neither have we regained, in aggregate, the share we lost during 2004. As a result like-for-like sales declined by around 2% in the first half year. This is clearly an area where we still have more to do to improve competitiveness as I described earlier.

Turning to profitability in the first half.

49 Profitability - H1 ‘05

Operating Margin 13.7% (140)bps - underlying* (50)bps * before Slim.Fast write-down, restructuring and profits on disposals

Savings and improved mix largely offset higher input costs and increased marketing investment

EPS (6)% - before Slim.Fast write-down +6%

The operating margin was 140 basis lower than last year which included a write-down of intangibles on the Slim.Fast brand equivalent to 180 basis points. At the same time, the reported margin benefited from lower restructuring charges and higher profits on disposals. Without these, the underlying margin trend would have been a decline of about 50 basis points.

This reflects the effect of increased market investment and higher input costs, largely offset by the benefits of savings programmes and an improved mix.

Reported earnings per share were 6% down in the first half, but increased by 6% before the impact of the Slim.Fast write-down.

50 Summary of Progress

z Three quarters of improving growth

z Increasing competitiveness

z Driving cost efficiency

z Implementing new organisation

z Maintaining control

Encouraging signs of progress… but still more work to do

So, I hope we have given you some insight into the change underway in Unilever. There are encouraging signs of progress in the market place. Three quarters of improving growth tell us that we are starting to see the benefits of the steps already taken, ahead of the organisational changes, to improve competitiveness. Looking forward to the second half, the effect of the higher oil price and continued marketing investment will put increased pressure on margins. With this in mind, we are driving hard on cost efficiency. The savings from moving to ‘One Unilever’ will increasingly contribute to this in the second half and through into 2006. We have a competitive balance sheet, and plan to maintain this. So far this year we have been using surplus cash to replenish treasury stock used for a preference share conversion earlier in the year. We have already announced that once we have completed this replenishment we plan to buy back up to €500m of shares in the remaining months of 2005. A new organisation structure has been set up throughout the business. Within this overall structure we are executing the move to One Unilever, country by country, in a disciplined way to maintain control, minimise disruption and ensure that we keep, and indeed increase, focus on the market. So, in summary: early days, and encouraging progress but we still have a lot to do. Thank you, and with that we will move to questions.

51 Increasing Competitiveness

Prudential Back to School Conference, Boston September 8, 2005

Rudy Markham Ralph Kugler Chief Financial President, Home and Officer Personal Care