Disclaimer This is a PDF version of the Unilever Annual Report and Accounts 2020 and is an exact copy of the printed document provided to Unilever’s shareholders. Certain sections of the Unilever Annual Report and Accounts 2020 have been audited. These are on pages 112 to 167, and those parts noted as audited within the Directors’ Remuneration Report on pages 90 to 99. 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. 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Purpose-led, future-fit Unilever Annual Report and Accounts 2020 In this report Strategic Report How our Compass strategy is delivering value for our stakeholders Introduction Our strategy Our stakeholders Performance review 2 At a glance 8 Our strategy 14 Stakeholder review 34 Our performance 4 Chairman’s introduction 12 Our business model 16 Our people 36 Financial review 6 Chief Executive Officer’s 20 Consumers 44 Our risks Q&A 24 Customers 51 Sustainability deep-dives: 26 Suppliers & business climate change and partners plastic 28 Planet & society 60 Non-financial 32 Shareholders information statement Governance Report Financial Statements How we’re running a responsible Our full financial results and and effective business notes for the year 61 Corporate Governance 104 Statement of Directors’ responsibilities 70 Report of the Audit Committee 105 Independent Auditor’s Report 72 Report of the Corporate Responsibility Committee 112 Consolidated financial statements 74 Report of the Nominating and Corporate 116 Notes to the consolidated financial statements Governance Committee 168 Unilever PLC Company Accounts and notes 76 Directors’ Remuneration Report 184 Group Companies 191 Shareholder information 192 Index 193 Additional Information for US Listing Purposes Online You can find more information about Unilever online at Unilever Annual Report and Accounts 2020 This document is made up of the Strategic Report, the Governance Report, www.unilever.com the Financial Statements and Notes, and Additional Information for US Listing Purposes. For further information on our sustainability performance The Unilever Group consists of Unilever PLC (PLC) together with the companies it controls. The terms ‘Unilever’, the ‘Group’, ‘we’, ‘our’ and ‘us’ refer to the Unilever Group. www.unilever.com/planet-and-society Our Strategic Report, pages 1 to 60, contains information about us, how we create value and how we run our business. It includes our strategy, business The Unilever Annual Report and Accounts 2020 (and the model and key performance indicators, as well as our approach to sustainability and risk. The Strategic Report is only part of the Annual Report and Accounts Additional Information for US Listing Purposes) along with 2020. The Strategic Report has been approved by the Board and signed on their other relevant documents can be downloaded at behalf by Ritva Sotamaa – Group Secretary. Our Governance Report, pages 61 to 103, contains detailed corporate www.unilever.com/investor-relations/annual-report-and- governance information, our Committee reports and how we remunerate accounts our Directors. Our Financial Statements and Notes are on pages 104 to 183. Pages 1 to 192 constitute the Unilever Annual Report and Accounts 2020, which we may also refer to as ‘this Annual Report and Accounts’ throughout this document. The Directors’ Report of PLC on pages 61 to 75, 104 (Statement of Directors’ responsibilities), 134 (Dividends on ordinary capital), 149 to 155 (Treasury Risk Management), 176 (Post balance sheet events) and 190 (Branch disclosure) has been approved by the PLC Board and signed on its behalf by Ritva Sotamaa – Group Secretary. Pages 193 to 203 are included as Additional Information for US Listing Purposes. The events of 2020 have tested the world in ways few anticipated. They also tested the resilience of our business – our people, our operations, our financial strength. While this has not been an easy year, it’s made us a stronger business, better prepared for a fast-changing world. We believe that the world needs businesses like Unilever more than ever. We have responded with speed and agility to protect lives and livelihoods, while growing our business. Driving a progressive agenda on issues like climate, social inequality and the future of work. And serving consumers through our purposeful brands, which are more relevant than ever. Above all, this year has strengthened our commitment to being the global leader in sustainable business, and to showing that our purpose-led, future-fit business model delivers superior performance. 2 Unilever Annual Report and Accounts 2020 At a glance As one of the world’s largest consumer goods companies, we’re driven by our purpose to make sustainable living commonplace. A truly global business Strong brands with purpose Our brands are available in over 190 countries Our 400+ brands help people feel good, look good and get more out of life Read more about our brands and consumers 58% on pages 20 to 23 of turnover in emerging markets Around 14 of the top 50 25m consumer goods brands(b) retail outlets in our distribution chain 13 2.5bn brands with turnover people use our of over €1 billion products every day(a) Our financial highlights Turnover Underlying sales Dividends paid growth(c) €51bn 1.9% €4.3bn 2019: €52bn 2019: 2.9% 2019: €4.2bn 2018: €51bn 2018: 3.2% 2018: €4.1bn Underlying operating Operating margin Free cash flow(c) margin(c) 18.5% 16.4% €7.7bn 2019: 19.1% 2019: 16.8% 2019: €6.1bn 2018: 18.6% 2018: 24.8% 2018: €5.4bn (a) Based on a detailed study carried out in 2016. (b) Based on market penetration and consumer interactions (Kantar Brand Footprint report). (c) Free cash flow, underlying operating margin and underlying sales growth are non-GAAP measures. For further information about these measures, and the reasons why we believe they are important for an understanding of the performance of the business, please refer to our commentary on non-GAAP measures on page 39. Unilever Annual Report and Accounts 2020 3 Powered by our people Using our scale for good REPORT STRATEGIC Our purposeful and inclusive culture We have an ambitious sustainability agenda attracts the best talent in our markets which is delivering significant impact Read more about our people Read more about the planet & on pages 16 to 19 society on pages 28 to 31 50/50 gender balance in management (female/male)(d) 100% renewable grid electricity globally 67% of agricultural 149,000 raw materials sustainably sourced employees 1.3bn 93% people helped to improve their of our leaders are local health and hygiene since 2010 Read more about our Divisions Our three Divisions on pages 20 to 23 Beauty & Personal Care Foods & Refreshment Home Care What we stand for: What we stand for: What we stand for: To be the most people- and planet- To be a world-class force Making people’s homes a better positive beauty business in the world. for good in food. world, and our world a better home. Our largest categories: Our largest categories: Our largest categories: Deodorants, Hair care, Skin care, Ice cream, Savoury, Fabric solutions, Skin cleansing Dressings, Tea Home and hygiene A selection of our brands: A selection of our brands: A selection of our brands: Axe, Clear, Dove, Lifebuoy, Lux, Ben & Jerry’s, Breyers, Brooke Bond, Cif, Dirt is Good (Omo, Persil), Pond’s, Rexona, Signal, Suave, Heart (Wall’s), Hellmann’s, Knorr, Domestos, Seventh Generation, Sunsilk, TRESemmé, Vaseline Lipton, Magnum, The Vegetarian Sunlight Butcher, Unilever Food Solutions €21.1bn turnover €19.1bn turnover €10.5bn turnover 41% of total turnover 38% of total turnover 21% of total turnover 52% of total operating profit 33% of total operating profit 15% of total operating profit (d) Based on a total management population of 15,161 Unilever employees. 4 Unilever Annual Report and Accounts 2020 Chairman’s introduction Nils Andersen reflects on a challenging year and the key actions taken to ensure Unilever remains resilient. Covid-19 cast a dark shadow over the whole of 2020 and on Remuneration behalf of the Board let me start by saying that our thoughts During the second half of 2020, we consulted on our proposed go out to all those who have suffered from the effects of this new Directors’ Remuneration Policy which we propose to terrible pandemic. Equally, we remain deeply thankful to change at the Annual General Meeting in 2021 when our all those front-line workers – including in our own business current policy comes to the end of its three year term. – who have worked tirelessly to help keep others safe and our economies moving forward. Despite the inevitable Subject to shareholder approval, the key change we are and widespread disruption to Unilever’s own business, proposing to our Remuneration Policy is to replace the the Group responded with commendable resilience and current Management Co-Investment Plan (MCIP) with a new ingenuity, delivering a good set of results in very challenging Performance Share Plan (PSP) entirely delinked from the circumstances.