EX-99.1 2 d586975dex991.htm EX-99.1

EX-99.1

Exhibit 99.1

2013 FIRST HALF YEAR RESULTS

PROFITABLE GROWTH MOMENTUM SUSTAINED IN TOUGHER MARKETS

First half highlights

• Underlying sales growth 5.0% with emerging markets up 10.3%

• Underlying volume growth 2.6% and pricing up 2.3%

• Turnover up 0.4% at €25.5 billion with currency (3.2)% and disposals (1.1)%

• Core operating margin up 40bps to 14.0% driven by gross margin up 120bps

• Core earnings per share up 4% to €0.76; free cash flow of €1.3 billion

• Hindustan Unilever stake increased to 67%

Paul Polman: Chief Executive Officer statement

“This set of results clearly demonstrates that the transformation of Unilever to a sustainable growth company is fully on track. The strong Home Care and Personal Care performance is particularly pleasing given increased competitive pressure. The underlying performance of our Foods and Refreshment categories is starting to improve, with strong growth from the relaunched Lipton Yellow Label and the continuing success of Knorr jelly bouillons and baking bags. Innovation remains the key driver of growth with examples such as compressed deodorants, Vaseline Spray & Go and Magnum 5 kisses. And there is more to come: our innovation pipeline is robust which will be vital as we navigate the slowdown in many parts of the world.

Our focus on gross margin is also starting to bear fruit: we are delivering more profitable innovations, improving mix and continuing to apply a rigorous approach to supply chain costs and savings. But there is no room for complacency: we are well aware that past success is no guarantee of future success. The tougher economic environment and reinvigorated competition require us to set the bar higher on innovation and to increase investment behind our brands. At the same time we need to continue to take costs out of the system to help finance this investment.

The Unilever Sustainable Living Plan gives us a strong purpose-driven business model. Our emerging markets footprint and strong innovation pipeline gives us confidence that we will continue to grow competitively. We remain focused on achieving another year of profitable volume growth ahead of our markets, steady and sustainable core operating margin improvement and strong cash flow.”

Key Financials (unaudited) Current Rates		First Half 2013
Underlying Sales Growth(*)			5.0%
Turnover		€	25.5bn				+0.4	%
Operating Profit		€	3.9bn				+14	%
Net Profit		€	2.7bn				+13	%
Core earnings per share(*)		€	0.76				+4	%
Diluted earnings per share		€	0.83				+14	%
Quarterly dividend payable in September 2013        €0.269 per share

(*) Underlying sales growth and core earnings per share are non-GAAP measures (see pages 6 and 7).

OPERATIONAL REVIEW: CATEGORIES

		First Half 2013
(unaudited)		Turnover				USG				UVG				UPG				Change in core operating margin
		€bn				%				%				%				bps
Unilever Total			25.5				5.0				2.6				2.3				40
Personal Care			9.1				8.0				5.8				2.1				20
Foods			6.8				0.2				(1.0	)			1.2				(30	)
Refreshment			5.1				2.1				(1.1	)			3.2				90
Home Care			4.6				9.8				6.4				3.2				170

Our markets: Growth is slowing in emerging markets, as macro-economic headwinds influence consumer behaviour. Within this overall trend we see a mixed picture across the major countries reflecting different local circumstances. Developed markets remain sluggish with little sign of any recovery in North America or Europe.

Unilever performance: Unilever delivered solid growth in the first half, led by emerging markets which continued to grow at 10.3% with a good balance between volume and price. Developed markets declined by (1.6)% in the first half, with both negative price and volume. All categories grew globally with strong growth from Home Care and Personal Care. Refreshment was held back by the impact of adverse weather conditions on the ice cream business. In Foods, the good growth of Knorr and Hellmann’s was offset by a decline in spreads.

Gross margin increased by 120bps to 41.0% at constant exchange rates, primarily due to the mix benefit of higher margin products and continued discipline around savings programmes. Core operating margin, up 40bps at 14.0%, also reflected higher advertising and promotions investment behind our brands.

Personal Care

Hair performed well despite highly competitive markets. Dove benefited from the rollout of Dove Repair Expertise and Men+Care hair. TRESemmé also delivered broad-based growth, underpinned by the Keratin Smooth range and good progress in new markets. Sunsilk grew on the back of the successful essential oils variant in Indonesia and a new conditioners range in Turkey. Clear continued to make good progress.

Skin cleansing continued to deliver robust growth reflecting the success of the improved Dove Nutrium Moisture shower range and Dove Men+Care. Vaseline growth accelerated, helped by the successful launch of the Spray & Go moisturiser. Pond’s Flawless White BB is being rolled out to new markets after the successful launch in Thailand and Pond’s Men has been rolled out to Indonesia.

Deodorants growth was driven by the continuing success of compressed deodorants, Axe Apollo and the Rexona ‘Do More’ campaign. Oral care performed well despite increased competitive intensity with the rollout of the Expert Protection range to Zhong Hua in China and good momentum behind Pepsodent 1-2-3.

Core operating margin in the first half was up 20bps, driven by higher gross margin.

Foods

Savoury growth accelerated as Knorr benefited from the continuing success of jelly bouillons, now extended to a meal maker range introduced in Russia, and baking bags which are doing particularly well in Latin America. Knorr also performed well in North America with the successful ‘what’s for dinner tonight’ campaign driving growth in Canada. We continue to build consumption in emerging markets, for example in Nigeria where we see the benefit of improvements we have made to the product quality of our powdered bouillons.

Dressings continued to deliver consistent growth with the notable success of the Hellmann’s 100^th birthday celebrations and the Hellmann’s Real Whipped variant in the United States. Spreads performance improved as the first half progressed but lower sales reflected the underlying weakness of the market and high levels of competitor pricing activity. We continue to introduce better tasting products and the Becel Gold variant is progressing in line with expectations.

Core operating margin was down 30bps with higher gross margin offset by increased advertising and promotions.

Refreshment

Growth in leaf tea continued to improve with the Lipton brand delivering strong growth in the Middle East and Turkey helped by the introduction of the new better-tasting Lipton Yellow label. The Brooke Bond Red Label relaunch highlighting the health benefits of tea performed well in South Asia. The Ades soy drink brand is now recovering after the negative impact of a product recall.

2

Ice cream grew globally despite poor weather in Europe and the US, reflecting the fact that we are no longer so dependent on the European summer. Magnum innovations such as Magnum Pink and Black, ‘5 kisses’ and the new pints format in Europe are doing well. Cornetto has been relaunched in China and Europe and Ben & Jerry’s growth was driven by new flavours such as Peanut Butter Me Up.

Core operating margin was up 90bps with higher gross margins underpinned by improved mix and cost savings.

Home Care

Laundry delivered broad-based growth driven by a strong innovation programme. Our premium laundry liquid technology was launched in India and Sri Lanka and Omo with wash boosters, giving outstanding cleaning even on a quick wash, was rolled out to Turkey and Vietnam. Omo with a touch of Comfort was launched in China whilst Comfort anti-bacterial was launched in Thailand.

Household care grew well helped by the launch of Cif and Domestos in Brazil. In dishwash, a Sunlight anti-bacterial range was launched in India and Indonesia and a Svelto eco refill pack was launched in Italy, providing environmental benefits and attracting more users through a more affordable format.

Core operating margin was up 170bps with stronger gross margins partly offset by higher advertising and promotions.

OPERATIONAL REVIEW: GEOGRAPHICAL AREA

		First Half 2013
(unaudited)		Turnover				USG				UVG				UPG				Change in core operating margin
		€bn				%				%				%				bps
Unilever Total			25.5				5.0				2.6				2.3				40
Asia/AMET/RUB			10.4				9.2				5.6				3.4				50
The Americas			8.4				5.6				1.9				3.6				40
Europe			6.7				(1.9	)			(0.8	)			(1.1	)			30

Asia/AMET/RUB

The strong sales growth in the first half was driven by healthy volume growth. We saw particularly good performances in Indonesia, Vietnam, Pakistan and China. Africa also delivered good growth despite increased levels of competitive activity and Australia grew despite difficult markets. In Russia, the Kalina brands continue to perform well.

Core operating margin in the first half increased by 50bps driven by increased gross margin, partially offset by higher advertising and promotions and higher overheads against a low prior year comparator.

The Americas

Latin America delivered another strong performance of double digit growth with a good balance between volume and price whilst North America declined by (0.9)%. In US hair care our share is up but sales were held back by trade stock movements while at the same time we saw higher sales in Brazil ahead of a forthcoming SAP system change.

Core operating margin was up 40bps with higher gross margin partly offset by increased advertising and promotions.

Europe

We continue to see that highly price-conscious consumers are reluctant to spend unless products offer good value for money. Trading in the southern countries remains depressed but we saw improving growth in Central Europe.

Core operating margin was up 30bps driven by higher gross margins, which reflected strong savings programmes.

3

ADDITIONAL COMMENTARY ON THE FINANCIAL STATEMENTS – FIRST HALF 2013

Finance costs and tax

The cost of financing net borrowings in the first half 2013 was €215 million versus €201 million in 2012. The average level of net debt reduced whilst interest rate movements were marginally unfavourable: the average interest rate on borrowings was 3.8% and the average return on cash deposits was 3.0%. Pensions financing, restated for the impact of the revision to the accounting standard IAS19, was a debit of €71 million versus a debit of €74 million in the prior year.

The effective tax rate was 27.1%, higher than 26.1% in 2012 due to the impact of business disposals. Our longer term expectation for the tax rate remains around 26%.

Joint ventures, associates and other income from non-current investments

Net profit from joint ventures and associates, together with other income from non-current investments contributed €53 million compared with €49 million in 2012. The improvement was mainly due to the low prior year comparator which contained the impairment of warrants associated with the disposal of the US laundry business. The share of profits from joint ventures was lower by €8 million primarily due to higher investment behind the Lipton ready-to-drink tea brand.

Earnings per share

Core earnings per share in the first half was up 4% to €0.76. This improvement was driven by the growth in core operating profit partially offset by negative foreign exchange movements. In constant currency, core earnings per share increased by 7%. This measure excludes the impact of business disposals, acquisition and disposal related costs, impairments and other one-off items.

Fully diluted earnings per share for the first half was up 14% at €0.83, including the profit on disposal of the Skippy brand.

Pensions

The net pension deficit was €2.4 billion at the end of June 2013 versus €3.3 billion as at 31 December 2012, all numbers re-stated for the revisions to IAS19. The reduction in the net pensions deficit reflects the impact of investment returns and cash contributions offset by a higher interest cost on liabilities.

Disposals

Business disposals contributed €371million to non-core profits versus €10 million in the first half 2012. This primarily relates to the disposal of the Skippy brand.

Acquisitions and disposal related costs amounted to €55 million, against €48 million in the first half 2012.

Free cash flow

Free cash flow was €1.3 billion versus €1.5 billion in 2012. The reduction is due to higher working capital which is measured against a strong performance in the prior year. Capital expenditure was also lower than the prior year due to the phasing of projects.

Net debt

Closing net debt was €11.6 billion versus €7.4 billion as at 31 December 2012. The main factor driving the increase was the impact of the voluntary open offer to acquire additional shares in Hindustan Unilever Limited. At 30 June 2012 a financial liability of €3.8 billion is recorded on the balance sheet which represents the maximum number of shares that could have been purchased under the offer. Subsequent to the period end, on 18 July 2013, Unilever acquired 14.8% of the total shareholding which was less than the maximum commitment and no adjustment has been made in the first half 2013 results to reflect this in accordance with IFRS. If we were to adjust for the actual impact of this transaction, the effect would have been to reduce net debt to €9.9 billion.

Finance and liquidity

During the first half the following bonds matured and were repaid: (i) US $450 million 3.125% and (ii) €750 million 4.875%.

4

COMPETITION INVESTIGATIONS

As previously disclosed, along with other consumer products companies and/or retail customers, Unilever is involved in a number of ongoing investigations by national competition authorities. These proceedings and investigations are at various stages and concern a variety of product markets. Despite recent developments in some of these markets, it is too early in the regulatory process to determine conclusively the outcome of these matters or to reliably measure our exposure. We continue to monitor developments and will make provisions as appropriate.

Ongoing compliance with competition laws is of key importance to Unilever. It is Unilever’s policy to co-operate fully with competition authorities whenever questions or issues arise. In addition the Group continues to reinforce and enhance its internal competition law compliance programme on an ongoing basis.

PRINCIPAL RISK FACTORS

On pages 36 to 40 of our 2012 Report and Accounts and pages 4 to 7 of our Form 20-F for the year ended 31 December 2012 we set out our assessment of the principal risk issues that would face the business through 2013 under the headings: consumer preference; competition; portfolio management; sustainability; customer relationships; people; supply chain; systems and information; business transformation; external economic and political risks, and natural disasters; financial; ethical and legal, regulatory and other risks. In our view, the nature and potential impact of such risks remain essentially unchanged as regards our performance over the second half of 2013.

5

NON-GAAP MEASURES

In our financial reporting we use certain measures that are not recognised under IFRS or other generally accepted accounting principles (GAAP). We do this because we believe that these measures are useful to investors and other users of our financial statements in helping them to understand underlying business performance. Wherever we use such measures, we make clear that these are not intended as a substitute for recognised GAAP measures. Wherever appropriate and practical, we provide reconciliations to relevant GAAP measures. Unilever uses ‘constant rate’ ‘underlying’ and ‘core’ measures primarily for internal performance analysis and targeting purposes. The non-GAAP measures which we apply in our reporting are set out below.

Underlying sales growth (USG)

“Underlying Sales Growth” or “USG” refers to the increase in turnover for the period, excluding any change in turnover resulting from acquisitions, disposals and changes in currency. Acquisitions and disposals are excluded from USG for a period of 12 calendar months from the applicable closing date. Turnover from acquired brands that are launched in countries where they were not previously sold is included in USG as such turnover is more attributable to our existing sales and distribution network than the acquisition itself. The reconciliation of USG to changes in the GAAP measure turnover is provided in notes 4 and 5.

Underlying volume growth (UVG)

“Underlying Volume Growth” or “UVG” is part of USG and means, for the applicable period, the increase in turnover in such period calculated as the sum of (1) the increase in turnover attributable to the volume of products sold; and (2) the increase in turnover attributable to the composition of products sold during such period. UVG therefore excludes any impact to USG due to changes in prices. The relationship between the two measures is set out in notes 4 and 5.

Free cash flow (FCF)

Within the Unilever Group, free cash flow (FCF) is defined as cash flow from operating activities, less income taxes paid, net capital expenditures and net interest payments and preference dividends paid. It does not represent residual cash flows entirely available for discretionary purposes; for example, the repayment of principal amounts borrowed is not deducted from FCF. Free cash flow reflects an additional way of viewing our liquidity that we believe is useful to investors because it represents cash flows that could be used for distribution of dividends, repayment of debt or to fund our strategic initiatives, including acquisitions, if any.

The reconciliation of FCF to group operating activities is as follows:

€ million		First Half
(unaudited)		2013				2012
Cash flow from operating activities (see cash flow statement on page 12)			2,999				3,340
Income tax paid			(894	)			(801	)
Net capital expenditure			(632	)			(826	)
Net interest and preference dividends paid			(173	)			(176	)
Free cash flow			1,300				1,537
Net cash flow (used in)/from investing activities			(798	)			157
Net cash flow (used in)/from financing activities			(354	)			(1,648	)

6

NON-GAAP MEASURES (continued)

Core operating profit (COP), core operating margin (COM) and non-core items

COP and COM means operating profit and operating margin, respectively, before the impact of business disposals, acquisition and disposal related costs, impairments and other one-off items, which we collectively term non-core items, due to their nature and frequency of occurrence. The reconciliation of core operating profit to operating profit is as follows:

€ million		First Half
(unaudited)		2013				2012
Operating profit			3,892				3,423
Non-core items (see note 2)			(316	)			38
Core operating profit			3,576				3,461
Turnover			25,500				25,398
Operating margin (%)			15.3				13.5
Core operating margin (%)			14.0				13.6

Core EPS

The Group also refers to core earnings per share (core EPS). In calculating core earnings, net profit attributable to shareholders’ equity is adjusted to eliminate the post tax impact of non-core items. Refer to note 2 on page 14 for reconciliation of core earnings to net profit attributable to shareholders’ equity.

Net debt

Net debt is defined as the excess of total financial liabilities, excluding trade and other payables, over cash, cash equivalents and current financial assets, excluding trade and other receivables. It is a measure that provides valuable additional information on the summary presentation of the Group’s net financial liabilities and is a measure in common use elsewhere.

The reconciliation of net debt to the GAAP measure total financial liabilities is as follows:

€ million (unaudited)		As at 30 June 2013				As at 31 December 2012				As at 30 June 2012
Total financial liabilities			(15,907	)			(10,221	)			(13,812	)
Current financial liabilities:
Liabilities related to acquisition of non-controlling interests(a)			(4,034	)			–				–
Other current financial liabilities			(5,065	)			(2,656	)			(6,564	)
Non-current financial liabilities			(6,808	)			(7,565	)			(7,248	)
Cash and cash equivalents as per balance sheet			3,467				2,465				4,097
Cash and cash equivalents as per cash flow statement			3,204				2,217				3,766
Add bank overdrafts deducted therein			263				248				331
Other financial assets			804				401				564
Net debt			(11,636	)			(7,355	)			(9,151	)

(a) Included in liabilities related to acquisition of non-controlling interests is €3,754 million relating to acquisition of shares in Hindustan Unilever (see note 10) and other non-controlling interests totalling €280 million.

7

CAUTIONARY STATEMENT

This announcement may contain forward-looking statements, including ‘forward-looking statements’ within the meaning of the United States Private Securities Litigation Reform Act of 1995. Words such as ‘will’, ‘aim’, ‘expects’, ‘anticipates’, ‘intends’, ‘looks’, ‘believes’, ‘vision’, or the negative of these terms and other similar expressions of future performance or results, and their negatives, are intended to identify such forward-looking statements. These forward-looking statements are based upon current expectations and assumptions regarding anticipated developments and other factors affecting the Unilever group (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. Among other risks and uncertainties, the material or principal factors which could cause actual results to differ materially are: Unilever’s global brands not meeting consumer preferences; increasing competitive pressures; Unilever’s investment choices in its portfolio management; inability to find sustainable solutions to support long-term growth; customer relationships; the recruitment and retention of talented employees; disruptions in our supply chain; the cost of raw materials and commodities; secure and reliable IT infrastructure; successful execution of acquisitions, divestitures and business transformation projects; economic and political risks and natural disasters; the debt crisis in Europe; financial risks; failure to meet high product safety and ethical standards; and managing regulatory, tax and legal matters. Further details of potential risks and uncertainties affecting the Group are described in the Group’s filings with the London Stock Exchange, NYSE Euronext in Amsterdam and the US Securities and Exchange Commission, including the Group’s Annual Report on Form 20-F for the year ended 31 December 2012 and Annual Report and Accounts 2012. These forward-looking statements speak only as of the date of this announcement. Except as required by any applicable law or regulation, the Group expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Group’s expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.

ENQUIRIES

Media: Media Relations Team				Investors: Investor Relations Team
UK +44 20 7822 6719		trevor.gorin@unilever.com		+44 20 7822 6830		investor.relations@unilever.com
NL +31 10 217 4844		flip.dotsch@unilever.com

8

INCOME STATEMENT

(unaudited)

€ million		First Half
		2013				2012 (Restated)				Increase/ (Decrease)
										Current rates				Constant rates
Turnover			25,500				25,398				0.4	%			3.8	%
Operating profit			3,892				3,423				14	%			18	%
After (charging)/crediting non-core items			316				(38	)
Net finance costs			(286	)			(275	)
Finance income			55				82
Finance costs			(270	)			(283	)
Pensions and similar obligations			(71	)			(74	)
Share of net profit/(loss) of joint ventures and associates			52				60
Other income/(loss) from non-current investments			1				(11	)
Profit before taxation			3,659				3,197				14	%			18	%
Taxation			(977	)			(818	)
Net profit			2,682				2,379				13	%			17	%
Attributable to:
Non-controlling interests			253				254
Shareholders’ equity			2,429				2,125				14	%			19	%
Combined earnings per share
Basic earnings per share (euros)			0.86				0.75				14	%			18	%
Diluted earnings per share (euros)			0.83				0.73				14	%			18	%

STATEMENT OF COMPREHENSIVE INCOME

(unaudited)

€ million		First Half
		2013				2012 (Restated)
Net profit			2,682				2,379
Other comprehensive income
Items that will not be reclassified to profit or loss:
Actuarial gains/(losses) on pension schemes net of tax			526				(661	)
Items that may be reclassified subsequently to profit or loss:
Currency retranslation gains/(losses) net of tax			(162	)			(204	)
Fair value gains/(losses) on financial instruments net of tax			93				(69	)
Total comprehensive income			3,139				1,445
Attributable to:
Non-controlling interests			217				242
Shareholders’ equity			2,922				1,203

9

STATEMENT OF CHANGES IN EQUITY

(unaudited)

€ million		Called up share capital				Share premium account				Other reserves				Retained profit				Total				Non- controlling interest				Total equity
First half – 2013
1 January 2013 (restated)			484				140				(6,196	)			20,964				15,392				557				15,949
Profit or loss for the period			–				–				–				2,429				2,429				253				2,682
Other comprehensive income net of tax
Fair value gains/(losses) on financial instruments			–				–				93				–				–				–				93
Actuarial gains/(losses) on pension schemes			–				–				–				526				526				–				526
Currency retranslation gains/(losses)			–				–				(45	)			(81	)			(126	)			(36	)			(162	)
Total comprehensive income			–				–				48				2,874				2,922				217				3,139
Dividends on ordinary capital			–				–				–				(1,449	)			(1,449	)			–				(1,449	)
Movements in treasury stock(a)			–				–				98				(70	)			28				–				28
Share-based payment credit(b)			–				–				–				135				135				–				135
Dividends paid to non-controlling interests			–				–				–				–				–				(105	)			(105	)
Currency retranslation gains/(losses) net of tax			–				(5	)			–				–				(5	)			(4	)			(9	)
Other movements in equity			–				–				–				(4,141	)			(4,141	)			(230	)			(4,371	)
30 June 2013			484				135				(6,050	)			18,313				12,882				435				13,317
First half – 2012
1 January 2012 (restated)			484				137				(6,004	)			19,874				14,491				628				15,119
Profit or loss for the period			–				–				–				2,125				2,125				254				2,379
Other comprehensive income net of tax
Fair value gains/(losses) on financial instruments			–				–				(69	)			–				(69	)			–				(69	)
Actuarial gains/(losses) on pension schemes			–				–				–				(661	)			(661	)			–				(661	)
Currency retranslation gains/(losses)			–				–				(142	)			(50	)			(192	)			(12	)			(204	)
Total comprehensive income			–				–				(211	)			1,414				1,203				242				1,445
Dividends on ordinary capital			–				–				–				(1,323	)			(1,323	)			–				(1,323	)
Movements in treasury stock(a)			–				–				135				(104	)			31				–				31
Share-based payment credit(b)			–				–				–				66				66				–				66
Dividends paid to non-controlling interests			–				–				–				–				–				(99	)			(99	)
Currency retranslation gains/(losses) net of tax			–				4				–				–				4				(3	)			1
Other movements in equity			–				–				–				(35	)			(35	)			(54	)			(89	)
30 June 2012			484				141				(6,080	)			19,892				14,437				714				15,151

(a) Includes purchases and sales of treasury stock, and transfer from treasury stock to retained profit of share-settled schemes arising from prior years and differences between exercise and grant price of share options.

(b) The share-based payment credit relates to the reversal of the non-cash charge recorded against operating profit in respect of the fair value of share options and awards granted to employees.

10

BALANCE SHEET

(unaudited)

€ million		As at 30 June 2013				As at 31 December 2012 (Restated)				As at 30 June 2012 (Restated)
Non-current assets
Goodwill			14,483				14,619				15,012
Intangible assets			7,047				7,099				7,249
Property, plant and equipment			9,221				9,445				9,113
Pension asset for funded schemes in surplus			757				758				668
Deferred tax assets			986				1,050				316
Financial assets			527				535				574
Other non-current assets			581				536				562
			33,602				34,042				33,494
Current assets
Inventories			4,490				4,436				5,003
Trade and other current receivables			6,414				4,436				5,462
Current tax assets			268				217				702
Cash and cash equivalents			3,467				2,465				4,097
Other financial assets			804				401				564
Non-current assets held for sale			49				192				143
			15,492				12,147				15,971
Total assets			49,094				46,189				49,465
Current liabilities
Financial liabilities			9,099				2,656				6,564
Trade payables and other current liabilities			12,211				11,668				11,977
Current tax liabilities			1,371				1,129				1,474
Provisions			327				361				352
Liabilities associated with assets held for sale			1				1				–
			23,009				15,815				20,367
Non-current liabilities
Financial liabilities			6,808				7,565				7,248
Non-current tax liabilities			1				100				188
Pensions and post-retirement healthcare liabilities:
Funded schemes in deficit			1,496				2,060				2,484
Unfunded schemes			1,666				2,040				1,981
Provisions			931				846				962
Deferred tax liabilities			1,510				1,414				742
Other non-current liabilities			356				400				342
			12,768				14,425				13,947
Total liabilities			35,777				30,240				34,314
Equity
Shareholders’ equity			12,883				15,392				14,437
Non-controlling interests			434				557				714
Total equity			13,317				15,949				15,151
Total liabilities and equity			49,094				46,189				49,465

11

CASH FLOW STATEMENT

(unaudited)

		First Half
€ million		2013				2012 (Restated)
Net profit			2,682				2,379
Taxation			977				818
Share of net profit of joint ventures/associates and other income from non-current investments			(53	)			(49	)
Net finance costs			286				275
Operating profit			3,892				3,423
Depreciation, amortisation and impairment			583				582
Changes in working capital			(1,004	)			(488	)
Pensions and similar obligations less payments			(246	)			(157	)
Provisions less payments			43				38
Elimination of (profits)/losses on disposals			(372	)			(128	)
Non-cash charge for share-based compensation			121				66
Other adjustments			(18	)			4
Cash flow from operating activities			2,999				3,340
Income tax paid			(894	)			(801	)
Net cash flow from operating activities			2,105				2,539
Interest received			48				81
Net capital expenditure			(632	)			(826	)
Financial assets related to acquisition of non-controlling interest (see note 10)			(423	)			–
Other acquisitions and disposals			520				(94	)
Other investing activities			(311	)			996
Net cash flow (used in)/from investing activities			(798	)			157
Dividends paid on ordinary share capital			(1,449	)			(1,324	)
Interest and preference dividends paid			(221	)			(257	)
Acquisition of non-controlling interest			(335	)			–
Change in financial liabilities			1,728				(13	)
Other movements on treasury stock			28				31
Other financing activities			(105	)			(85	)
Net cash flow (used in)/from financing activities			(354	)			(1,648	)
Net increase/(decrease) in cash and cash equivalents			953				1,048
Cash and cash equivalents at the beginning of the period			2,217				2,978
Effect of foreign exchange rate changes			34				(260	)
Cash and cash equivalents at the end of the period			3,204				3,766

12

NOTES TO THE FINANCIAL STATEMENTS

(unaudited)

1 ACCOUNTING INFORMATION AND POLICIES

The accounting policies and methods of computation are in compliance with IAS 34 ‘Interim Financial Reporting’ and except as set out below are consistent with the year ended 31 December 2012. The condensed interim financial statements are based on International Financial Reporting Standards (IFRS) as adopted by the EU and IFRS as issued by the International Accounting Standards Board.

After making appropriate enquiries, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the half year financial statements.

The condensed interim financial statements are shown at current exchange rates, while percentage year-on-year changes are shown at both current and constant exchange rates to facilitate comparison. The income statement on page 9, the statement of comprehensive income on page 9, the statement of changes in equity on page 10 and the cash flow statement on page 12 are translated at exchange rates current in each period. The balance sheet on page 11 is translated at period-end rates of exchange.

The condensed interim financial statements attached do not constitute the full financial statements within the meaning of Section 434 of the UK Companies Act 2006. Full accounts for Unilever for the year ended 31 December 2012 have been delivered to the Registrar of Companies. The auditors’ reports on these accounts were unqualified and did not contain a statement under Section 498 (2) or Section 498 (3) of the UK Companies Act 2006.

Recent accounting developments

With effect from 1 January 2013 we have implemented IAS 19 (Revised) ‘Employee Benefits’, amendments to IAS 1 ‘Presentation of Items of Other Comprehensive Income’, IFRS 10 ‘Consolidated Financial Statements’, IFRS 11 ‘Joint Arrangements’, IFRS 12 ‘Disclosure of Interests in Other Entities’ and IFRS 13 ‘Fair Value Measurement’.

IAS 19 (Revised) ‘Employee Benefits’ changes disclosure requirements and restricts the accounting options available for defined benefit pension plans. The return on pension plan assets and finance charge have been replaced by a net interest expense, calculated by applying the liability discount rate to the net defined benefit asset or liability. Administration costs by pension funds will now be recognised as an expense when the administration services are performed. The changes resulted in an increase in operating expenses of €7 million for the 6 months to 30 June 2013 (€6 million for the 6 months to 30 June 2012), an increase in finance cost of €102 million (2012: €69 million) and a reduction in net defined benefit liability of €198 million in the restated comparative opening balance sheet as at 1 January 2012, with a corresponding increase in actuarial gains or losses on pension schemes before tax.

Amendments to IAS 1 ‘Presentation of Items of Other Comprehensive Income’ require items of other comprehensive income that may be reclassified to profit or loss to be presented separately from items that will never be reclassified. The statement of comprehensive income has been revised accordingly.

IFRS 10 ‘Consolidated financial statements’ replaces previous guidance on control and consolidation. The impact on the Group is not material.

IFRS 11 ‘Joint Arrangements’ requires joint arrangements to be accounted for as a joint operation or as a joint venture depending on the rights and obligations of each party to the arrangement. The impact on the Group is not material.

IFRS 12 ‘Disclosure of Interests in Other Entities’ requires enhanced disclosures of the nature, risks and financial effects associated with the Group’s interests in subsidiaries, associates, joint arrangements and unconsolidated structured entities. The impact on the Group is not material.

IFRS 13 ‘Fair Value Measurement’ explains how to measure fair value and enhances fair value disclosures. The standard does not significantly change the measurement of fair value but codifies it in one place. The impact on the Group is not material.

13

NOTES TO THE FINANCIAL STATEMENTS

(unaudited)

2 SIGNIFICANT ITEMS WITHIN THE INCOME STATEMENT

In our income statement reporting we disclose the total value of non-core items that arise within operating profit. These are costs and revenues relating to business disposals, acquisition and disposal related costs, impairments and other one-off items, which we collectively term non-core items, due to their nature and frequency of occurrence.

		First Half
€ million		2013				2012 (Restated)
Acquisition and disposal related costs			(55	)			(48	)
Gain/(loss) on disposal of group companies			371				10
Impairments and other one-of items			–				–
Non-core items before tax			316				(38	)
Tax impact of non-core items			(123	)			11
Non-core items after tax			193				(27	)
Attributable to:
Non-controlling interests			–				–
Shareholders’ equity			193				(27	)

The following table shows the impact of non-core items on profit attributable to shareholders.

		First Half
€ million		2013				2012 (Restated)
Net profit attributable to shareholders’ equity			2,429				2,125
Post tax impact of non-core items			(193	)			27
Core profit attributable to shareholders’ equity			2,236				2,152

3 TAXATION

The effective tax rate for the first half was 27.1% compared to 26.1% in 2012. The tax rate is calculated by dividing the tax charge by pre-tax profit excluding the contribution of joint ventures and associates.

Tax effects of components of other comprehensive income were as follows:

		First Half 2013												First Half 2012 (Restated)
€ million		Before tax				Tax (charge)/ credit				After tax				Before tax				Tax (charge)/ credit				After tax
Fair value gains/(losses) on financial instruments			104				(11	)			93				(74	)			5				(69	)
Actuarial gains/(losses) on pension schemes			697				(171	)			526				(853	)			192				(661	)
Currency retranslation gains/(losses)			(168	)			6				(162	)			(208	)			4				(204	)
Other comprehensive income			633				(176	)			457				(1,135	)			201				(934	)

14

NOTES TO THE FINANCIAL STATEMENTS

(unaudited)

4 SEGMENT INFORMATION – CATEGORIES

First Half		Personal Care				Foods				Refreshment				Home Care				Total
Turnover (€ million)
2012			8,715				7,131				5,174				4,378				25,398
2013			9,053				6,753				5,085				4,609				25,500
Change (%)			3.9				(5.3	)			(1.7	)			5.3				0.4
Impact of:
Exchange rates (%)			(3.6	)			(1.9	)			(3.6	)			(4.0	)			(3.2	)
Acquisitions (%)			–				–				–				–				–
Disposals (%)			(0.2	)			(3.7	)			(0.1	)			(0.1	)			(1.1	)
Underlying sales growth (%)			8.0				0.2				2.1				9.8				5.0
Price (%)			2.1				1.2				3.2				3.2				2.3
Volume (%)			5.8				(1.0	)			(1.1	)			6.4				2.6
Operating profit (€ million)
2012 (restated)			1,405				1,262				538				218				3,423
2013			1,496				1,520				575				301				3,892
Core operating profit (€ million)
2012 (restated)			1,447				1,262				538				214				3,461
2013			1,523				1,175				576				302				3,576
Operating margin (%)
2012 (restated)			16.1				17.7				10.4				5.0				13.5
2013			16.5				22.5				11.3				6.5				15.3
Core operating margin (%)
2012 (restated)			16.6				17.7				10.4				4.9				13.6
2013			16.8				17.4				11.3				6.6				14.0

Turnover growth is made up of distinct individual growth components namely underlying sales, currency impact, acquisitions and disposals. Turnover growth is arrived at by multiplying these individual components on a compounded basis as there is a currency impact on each of the other components. Accordingly, turnover growth is more than just the sum of the individual components.

Core operating profit represents our measure of segment profit or loss as it is the primary measure used for the purpose of making decisions about allocating resources and assessing performance of segments. Core operating profit is calculated as turnover multiplied by core operating margin.

15

NOTES TO THE FINANCIAL STATEMENTS

(unaudited)

5 SEGMENT INFORMATION – GEOGRAPHICAL AREA

First Half		Asia / AMET / RUB				The Americas				Europe				Total
Turnover (€ million)
2012			9,977				8,479				6,942				25,398
2013			10,405				8,355				6,740				25,500
Change (%)			4.3				(1.5	)			(2.9	)			0.4
Impact of:
Exchange rate (%)			(4.4	)			(4.0	)			(0.5	)			(3.2	)
Acquisitions (%)			–				–				–				–
Disposals (%)			(0.1	)			(2.8	)			(0.6	)			(1.1	)
Underlying sales growth (%)			9.2				5.6				(1.9	)			5.0
Price (%)			3.4				3.6				(1.1	)			2.3
Volume (%)			5.6				1.9				(0.8	)			2.6
Operating profit (€ million)
2012 (restated)			1,337				1,114				972				3,423
2013			1,509				1,406				977				3,892
Core operating profit (€ million)
2012 (restated)			1,341				1,147				973				3,461
2013			1,445				1,164				967				3,576
Operating margin (%)
2012 (restated)			13.4				13.1				14.0				13.5
2013			14.5				16.8				14.5				15.3
Core operating margin (%)
2012 (restated)			13.4				13.5				14.0				13.6
2013			13.9				13.9				14.3				14.0

16

NOTES TO THE FINANCIAL STATEMENTS

(unaudited)

5 SEGMENT INFORMATION – GEOGRAPHICAL AREA (continued)

Additional geographical information

		First Half 2013																First Half 2012
		Turnover				USG				UVG				UPG				Turnover				USG				UVG				UPG
		€m				%				%				%				€m				%				%				%
Unilever Total			25,500				5.0				2.6				2.3				25,398				7.0				2.8				4.1
Developed markets			10,933				(1.6	)			(0.8	)			(0.8	)			11,550				1.9				(0.1	)			2.0
Emerging markets			14,567				10.3				5.5				4.6				13,848				11.4				5.4				5.8
		First Half 2013																First Half 2012
		Turnover				USG				UVG				UPG				Turnover				USG				UVG				UPG
		€m				%				%				%				€m				%				%				%
The Americas			8,355				5.6				1.9				3.6				8,479				7.7				2.0				5.6
North America			4,142				(0.9	)			(1.0	)			0.1				4,471				4.1				(0.5	)			4.6
Latin America			4,213				12.6				5.1				7.2				4,008				11.6				4.7				6.6

6 COMBINED EARNINGS PER SHARE

The combined earnings per share calculations are based on the average number of share units representing the combined ordinary shares of NV and PLC in issue during the period, less the average number of shares held as treasury stock.

In calculating diluted earnings per share and core earnings per share, a number of adjustments are made to the number of shares, principally: (i) conversion into PLC ordinary shares in the year 2038 of shares in a group company under the arrangements for the variation of the Leverhulme Trust and (ii) the exercise of share options by employees.

Earnings per share for total operations for the six months were calculated as follows:

		2013				2012 (Restated)
Combined EPS – Basic
Net profit attributable to shareholders’ equity (€ million)			2,429				2,125
Average number of combined share units (millions of units)			2,836.8				2,826.9
Combined EPS – basic (€)			0.86				0.75
Combined EPS – Diluted
Net profit attributable to shareholders’ equity (€ million)			2,429				2,125
Adjusted average number of combined share units (millions of units)			2,925.6				2,916.8
Combined EPS – diluted (€)			0.83				0.73
Core EPS
Core profit attributable to shareholders’ equity (see note 2) (€ million)			2,236				2,152
Adjusted average number of combined share units (millions of units)			2,925.6				2,916.8
Core EPS – diluted (€)			0.76				0.74

In calculating core earnings per share, net profit attributable to shareholders’ equity is adjusted to eliminate the post tax impact of business disposals, acquisition and disposals and related costs, impairments, and other one-off items.

17

NOTES TO THE FINANCIAL STATEMENTS

(unaudited)

6 COMBINED EARNINGS PER SHARE (continued)

During the period the following movements in shares have taken place:

		Millions
Number of shares at 31 December 2012 (net of treasury stock)			2,831.8
Net movements in shares under incentive schemes			7.1
Number of shares at 30 June 2013			2,838.9

7 ACQUISITIONS AND DISPOSALS

On 3 January 2013 the Group announced that it has signed a definitive agreement to sell its global Skippy business to Hormel Foods for a total cash consideration of approximately US$700 million. The transaction completed on 31 January 2013 (excluding the portion operated out of China, which remains subject to regulatory approval and is expected to close later this year).

8 FINANCIAL INSTRUMENTS

The Group is exposed to the risks of changes in fair value of its financial assets and liabilities. The following table summarises the fair values and carrying amounts of financial instruments.

		Fair value												Carrying amount
€ million		As at 30 June 2013				As at 31 December 2012				As at 30 June 2012				As at 30 June 2013				As at 31 December 2012				As at 30 June 2012
Financial assets
Cash and cash equivalents			3,467				2,465				4,097				3,467				2,465				4,097
Held-to-maturity investments			49				29				30				49				29				30
Loans and receivables			325				3				83				325				3				83
Available-for-sale financial assets			711				687				725				711				687				725
Financial assets related to acquisition of non-controlling interest (see note 10)			420				–				–				420				–				–
Financial assets at fair value through profit and loss:
Derivatives			218				170				256				218				170				256
Other			28				47				44				28				47				44
			5,218				3,401				5,235				5,218				3,401				5,235
Financial liabilities
Preference shares			(120	)			(112	)			(109	)			(68	)			(68	)			(68	)
Bank loans and overdrafts			(1,210	)			(1,347	)			(1,831	)			(1,210	)			(1,346	)			(1,831	)
Bonds and other loans			(10,903	)			(9,458	)			(12,582	)			(10,232	)			(8,479	)			(11,502	)
Liabilities related to acquisition of non-controlling interests(a)			(4,034	)			–				–				(4,034	)			–				–
Finance lease creditors			(226	)			(233	)			(238	)			(203	)			(202	)			(208	)
Derivatives			(160	)			(126	)			(203	)			(160	)			(126	)			(203	)
			(16,653	)			(11,276	)			(14,963	)			(15,907	)			(10,221	)			(13,812	)

(a) Included in liabilities related to acquisition of non-controlling interests is €3,754 million relating to acquisition of shares in Hindustan Unilever (see note 10) and other non-controlling interests totalling €280 million.

The fair value of trade receivables and payables is considered to be equal to the carrying amount of these items due to their short-term nature.

There were no significant changes in classification of fair value of financial assets and financial liabilities during the period.

Calculation of fair values

The fair values of the financial assets and liabilities are defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Methods and assumptions used to estimate the fair values are consistent with those used in the year ended 31 December 2012.

18

NOTES TO THE FINANCIAL STATEMENTS

(unaudited)

9 DIVIDENDS

The Boards have declared quarterly interim dividend for Q1 2013 and Q2 2013 at the following rates which are equivalent in value at the rate of exchange applied under the terms of the Equalisation Agreement between the two companies:

		Q1 2013				Q2 2013
Per Unilever N.V. ordinary share		€	0.2690			€	0.2690
Per Unilever PLC ordinary share		£	0.2291			£	0.2312
Per Unilever N.V. New York share		US$	0.3494			US$	0.3545
Per Unilever PLC American Depositary Receipt		US$	0.3494			US$	0.3545

The quarterly dividend calendar for the remainder of 2013 will be as follows:

		Announcement Date		Ex-Dividend Date		Record Date		Payment Date
Quarterly dividend – for Q2 2013		25 July 2013		7 August 2013		9 August 2013		11 September 2013
Quarterly dividend – for Q3 2013		24 October 2013		6 November 2013		8 November 2013		11 December 2013

US dollar cheques for the quarterly interim dividend will be mailed on 10 September 2013 to holders of record at the close of business on 9 August 2013. In the case of the NV New York shares, Netherlands withholding tax will be deducted.

10 INCREASE IN STAKE IN HINDUSTAN UNILEVER

On 30 April 2013, the Group announced the proposed acquisition of up to 487,004,772 fully paid-up equity shares in Hindustan Unilever Limited (representing up to 22.52% of the total shareholding) for a consideration of 600 INR per share. The offer period opened on 21 June 2013 and closed on 4 July 2013.

On 30 April 2013, INR 29 billion was deposited into an escrow account for the purpose of buying Hindustan Unilever Limited shares and was restricted for any other purpose. As at 30 June 2013 the funds were still held in escrow and €420 million is included within ‘Trade and other receivables’ on the balance sheet. The cash flow statement includes a €423 million cash outflow in ‘acquisition of non-controlling interests’ within investing activities, reflecting the deposit of funds into escrow.

At 30 June 2013, a financial liability of INR 292 billion (€3,754 million) is held on the balance sheet in relation to the Hindustan Unilever Limited share purchase. This represents the maximum number of shares that could have been purchased multiplied by the offer price. The relevant percentage of the non-controlling interest in Hindustan Unilever Limited within equity (€189 million) is shown as attributable to shareholders and the remainder (€3,565 million) is recorded in retained earnings.

Subsequent to the half year, on 18 July 2013 Unilever paid INR 192 billion for 319,563,398 shares in Hindustan Unilever Limited (representing 14.78% of the total shareholding). As a result, the relevant percentage of the non-controlling interest in Hindustan Unilever Limited within equity that will be shown as attributable to shareholders is €128 million and the amount recorded in retained earnings will be €2,387 million (using 30 June 2013 exchange rates). These amounts are lower than those recorded at 30 June 2013 as the offer was not fully taken up and the first half 2013 results are not retrospectively amended to reflect this event after the balance sheet date.

11 EVENTS AFTER THE BALANCE SHEET DATE

On 12 August 2013, Unilever announced that it has signed an agreement for the sale of its Wish-Bone and Western dressings brands to Pinnacle Foods Inc. for a total cash consideration of approximately $580 million, subject to regulatory approval.

19

NOTES TO THE FINANCIAL STATEMENTS

(unaudited)

12 GUARANTOR STATEMENTS

On 01 November 2011, NV and Unilever Capital Corporation (UCC) filed a US Shelf registration, which is unconditionally and fully guaranteed, jointly and severally, by NV, PLC and Unilever United States, Inc. (UNUS). This superseded the previous NV and UCC US Shelf registration filed on 18 November 2008, which is unconditionally and fully guaranteed, jointly and severally, by NV, PLC and UNUS. Of the US Shelf registration, US $5.0 billion of Notes were outstanding at 30 June 2013 (2012: $4.0 billion, 2011: US $4.0 billion, 2010: US $2.5 billion) with coupons ranging from 0.45% to 5.9%. These Notes are repayable between 15 February 2014 and 15 November 2032.

Provided below are the income statements, cash flow statements and balance sheets of each of the companies discussed above, together with the income statement, cash flow statement and balance sheet of non-guarantor subsidiaries. These have been prepared under the historical cost convention, and, aside from the basis of accounting for investments at net asset value (equity accounting), comply in all material respects with International Financial Reporting Standards. The financial information in respect of NV, PLC and UNUS has been prepared with all subsidiaries accounted for on an equity basis. Information on NV and PLC is shown collectively as Unilever parent entities. UCC and UNUS are each indirectly 100% owned by the Unilever parent entities (as defined below). The financial information in respect of the non-guarantor subsidiaries has been prepared on a consolidated basis.

€ million
Income Statement Six months ended 30 June 2013		Unilever Capital Corporation subsidiary issuer				Unilever(a) parent entities				Unilever United States  Inc. subsidiary guarantor				Non-guarantor subsidiaries				Eliminations				Unilever Group
Turnover			–				–				–				25,500				–				25,500
Operating profit			–				345				1				3,546				–				3,892
Finance income			–				–				–				55				–				55
Finance costs			(75	)			(58	)			–				(137	)			–				(270	)
Pensions and similar obligations			–				(2	)			(14	)			(55	)			–				(71	)
Intercompany finance income/(costs)			75				23				(81	)			(17	)			–				–
Dividends			–				12				–				(12	)			–				–
Share of net profit/(loss) of joint ventures and associates			–				–				–				52				–				52
Other income from non-current investments			–				–				–				1				–				1
Profit before taxation			–				320				(94	)			3,433				–				3,659
Taxation			–				(103	)			(282	)			(592	)			–				(977	)
Net profit			–				217				(376	)			2,841				–				2,682
Equity earnings of subsidiaries			–				2,465				818				–				(3,283	)			–
Net profit			–				2,682				442				2,841				(3,283	)			2,682
Attributed to:
Non-controlling interests			–				–				–				253				–				253
Shareholders’ equity			–				2,682				442				2,588				(3,283	)			2,429

^(a)  The term ‘Unilever parent entities’ refers to Unilever N.V. and Unilever PLC. Though Unilever N.V. and Unilever PLC are separate legal entities, with different shareholder constituencies and separate stock exchange listings, they operate as nearly as practicable as a single economic entity. Debt securities issued by entities in Unilever Group are fully and unconditionally guaranteed by both Unilever N.V. and Unilever PLC.

20

NOTES TO THE FINANCIAL STATEMENTS

(unaudited)

12 GUARANTOR STATEMENTS (continued)

€ million
Income Statement Six months ended 30 June 2012 (Restated)		Unilever Capital Corporation subsidiary issuer				Unilever(a) parent entities				Unilever United States  Inc. subsidiary guarantor				Non- guarantor subsidiaries				Eliminations				Unilever Group
Turnover			–				–				–				25,398				–				25,398
Operating profit			–				76				(8	)			3,355				–				3,423
Finance income			–				–				–				82				–				82
Finance costs			(75	)			(87	)			–				(121	)			–				(283	)
Pensions and similar obligations			–				(2	)			(9	)			(63	)			–				(74	)
Intercompany finance income/(costs)			75				15				(57	)			(33	)			–				–
Dividends			–				4				676				(680	)			–				–
Share of net profit/(loss) of joint ventures and associates			–				–				–				60				–				60
Other income from non-current investments			–				–				–				(11	)			–				(11	)
Profit before taxation			–				6				602				2,589				–				3,197
Taxation			–				98				(109	)			(807	)			–				(818	)
Net profit			–				104				493				1,782				–				2,379
Equity earnings of subsidiaries			–				2,275				415				–				(2,690	)			–
Net profit			–				2,379				908				1,782				(2,690	)			2,379
Attributed to:
Non-controlling interests			–				–				–				254				–				254
Shareholders’ equity			–				2,379				908				1,528				(2,690	)			2,125

^(a)  The term ‘Unilever parent entities’ refers to Unilever N.V. and Unilever PLC. Though Unilever N.V. and Unilever PLC are separate legal entities, with different shareholder constituencies and separate stock exchange listings, they operate as nearly as practicable as a single economic entity. Debt securities issued by entities in Unilever Group are fully and unconditionally guaranteed by both Unilever N.V. and Unilever PLC.

21

NOTES TO THE FINANCIAL STATEMENTS

(unaudited)

12 GUARANTOR STATEMENTS (continued)

€ million
Balance Sheet As at 30 June 2013		Unilever Capital Corporation subsidiary issuer				Unilever(a) parent entities				Unilever United States  Inc. subsidiary guarantor				Non-guarantor subsidiaries				Eliminations				Unilever Group
Non-current assets
Goodwill and intangible assets			–				1,286				–				20,244				–				21,530
Property, plant and equipment			–				–				–				9,221				–				9,221
Pension asset for funded schemes in surplus			–				–				–				757				–				757
Deferred tax assets			–				108				232				646				–				986
Financial assets			–				–				1				526				–				527
Other non-current assets			–				–				6				575				–				581
Amounts due from group companies			7,785				–				–				–				(7,785	)			–
Net assets of subsidiaries (equity accounted)			–				38,983				16,634				(17,981	)			(37,636	)			–
			7,785				40,377				16,873				13,988				(45,421	)			33,602
Current assets
Inventories			–				–				–				4,490				–				4,490
Amounts due from group companies			–				4,351				1,863				(6,214	)			–				–
Trade and other current receivables			–				596				12				5,806				–				6,414
Current tax assets			–				–				–				268				–				268
Other financial assets			–				–				–				804				–				804
Cash and cash equivalents			–				374				–				3,093				–				3,467
Non-current assets held for sale			–				–				–				49				–				49
			–				5,321				1,875				8,296				–				15,492
Total assets			7,785				45,698				18,748				22,284				(45,421	)			49,094
Current liabilities
Financial liabilities			1,875				2,485				4				4,735				–				9,099
Amounts due to group companies			2,354				27,985				–				(30,339	)			–				–
Trade payables and other current liabilities			43				192				31				11,945				–				12,211
Current tax liabilities			–				30				208				1,133				–				1,371
Provisions			–				26				–				301				–				327
Liabilities associated with assets held for sale			–				–				–				1				–				1
			4,272				30,718				243				(12,224	)			–				23,009
Non-current liabilities
Financial liabilities			3,231				1,950				–				1,627				–				6,808
Amounts due to group companies			–				–				7,809				(24	)			(7,785	)			–
Pension and post-retirement healthcare liabilities:
Funded schemes in deficit			–				1				230				1,265				–				1,496
Unfunded schemes			–				107				548				1,011				–				1,666
Provisions			–				12				–				919				–				931
Deferred tax liabilities			–				17				–				1,493				–				1,510
Other non-current liabilities			–				10				(1	)			348				–				357
			3,231				2,097				8,586				6,639				(7,785	)			12,768
Total liabilities			7,503				32,815				8,829				(5,585	)			(7,785	)			35,777
Shareholders’ equity
Called up share capital			–				484				–				–				–				484
Share premium account			–				134				942				(942	)			–				134
Other reserves			7				(6,048	)			(665	)			(1,781	)			2,439				(6,048	)
Retained profit			275				18,313				9,642				30,158				(40,075	)			18,313
Total shareholders’ equity			282				12,883				9,919				27,435				(37,636	)			12,883
Non-controlling interests			–				–				–				434				–				434
Total equity			282				12,883				9,919				27,869				(37,636	)			13,317
Total liabilities and equity			7,785				45,698				18,748				22,284				(45,421	)			49,094

^(a)  The term ‘Unilever parent entities’ refers to Unilever N.V. and Unilever PLC. Though Unilever N.V. and Unilever PLC are separate legal entities, with different shareholder constituencies and separate stock exchange listings, they operate as nearly as practicable as a single economic entity. Debt securities issued by entities in Unilever Group are fully and unconditionally guaranteed by both Unilever N.V. and Unilever PLC.

22

NOTES TO THE FINANCIAL STATEMENTS

(unaudited)

12 GUARANTOR STATEMENTS (continued)

€ million
Balance Sheet As at 31 December 2012 (Restated)		Unilever Capital Corporation subsidiary issuer				Unilever(a) parent entities				Unilever United States  Inc. subsidiary guarantor				Non-guarantor subsidiaries				Eliminations				Unilever Group
Non-current assets
Goodwill and intangible assets			–				1,330				–				20,388				–				21,718
Property, plant and equipment			–				–				–				9,445				–				9,445
Pension asset for funded schemes in surplus			–				–				–				758				–				758
Deferred tax assets			–				103				263				684				–				1,050
Financial assets			–				–				1				534				–				535
Other non-current assets			–				–				7				529				–				536
Amounts due from group companies			6,642				–				–				(26	)			(6,616	)			–
Net assets of subsidiaries (equity accounted)			–				40,627				15,710				(17,981	)			(38,356	)			–
			6,642				42,060				15,981				14,331				(44,972	)			34,042
Current assets
Inventories			–				–				–				4,436				–				4,436
Amounts due from group companies			–				5,050				2,087				(7,137	)			–				–
Trade and other current receivables			–				80				12				4,344				–				4,436
Current tax assets			–				287				98				(168	)			–				217
Other financial assets			–				–				–				401				–				401
Cash and cash equivalents			–				3				–				2,462				–				2,465
Non-current assets held for sale			–				–				–				192				–				192
			–				5,420				2,197				4,530				–				12,147
Total assets			6,642				47,480				18,178				18,861				(44,972	)			46,189
Current liabilities
Financial liabilities			691				1,250				3				712				–				2,656
Amounts due to group companies			1,859				28,132				–				(29,991	)			–				–
Trade payables and other current liabilities			46				181				33				11,408				–				11,668
Current tax liabilities			–				304				–				825				–				1,129
Provisions			–				34				–				327				–				361
Liabilities associated with assets held for sale			–				–				–				1				–				1
			2,596				29,901				36				(16,718	)			–				15,815
Non-current liabilities
Financial liabilities			3,766				2,058				–				1,741				–				7,565
Amounts due to group companies			–				–				6,701				(85	)			(6,616	)			–
Pension and post-retirement healthcare liabilities:
Funded schemes in deficit			–				2				204				1,854				–				2,060
Unfunded schemes			–				110				580				1,350				–				2,040
Provisions			–				12				1				833				–				846
Deferred tax liabilities			–				–				–				1,414				–				1,414
Other non-current liabilities			–				5				81				414				–				500
			3,766				2,187				7,567				7,521				(6,616	)			14,425
Total liabilities			6,362				32,088				7,603				(9,197	)			(6,616	)			30,240
Shareholders’ equity
Called up share capital			–				484				–				–				–				484
Share premium account			–				140				942				(942	)			–				140
Other reserves			5				(6,196	)			(612	)			(1,695	)			2,302				(6,196	)
Retained Profit			275				20,964				10,245				30,138				(40,658	)			20,964
			280				15,392				10,575				27,501				(38,356	)			15,392
Non-controlling interests			–				–				–				557				–				557
Total equity			280				15,392				10,575				28,058				(38,356	)			15,949
Total liabilities and equity			6,642				47,480				18,178				18,861				(44,972	)			46,189

^(a)  The term ‘Unilever parent entities’ refers to Unilever N.V. and Unilever PLC. Though Unilever N.V. and Unilever PLC are separate legal entities, with different shareholder constituencies and separate stock exchange listings, they operate as nearly as practicable as a single economic entity. Debt securities issued by entities in Unilever Group are fully and unconditionally guaranteed by both Unilever N.V. and Unilever PLC.

23

NOTES TO THE FINANCIAL STATEMENTS

(unaudited)

12 GUARANTOR STATEMENTS (continued)

€ million
Cash flow statement Six months ended 30 June 2013		Unilever Capital Corporation subsidiary issuer				Unilever(a) parent entities				Unilever United States  Inc. subsidiary guarantor				Non-guarantor subsidiaries				Eliminations				Unilever Group
Cash flow from operating activities			–				65				70				2,864				–				2,999
Income tax paid			–				(76	)			(143	)			(675	)			–				(894	)
Net cash flow from operating activities			–				(11	)			(73	)			2,189				–				2,105
Interest received			–				–				–				48				–				48
Net capital expenditure			–				(2	)			–				(630	)			–				(632	)
Acquisitions and disposals			–				(414	)			–				511				–				97
Other investing activities			(1,011	)			(480	)			238				(69	)			1,011				(311	)
Net cash flow from /(used in) investing activities			(1,011	)			(896	)			238				(140	)			1,011				(798	)
Dividends paid on ordinary share capital			–				(1,440	)			(1,092	)			1,083				–				(1,449	)
Interest and preference dividends paid			(78	)			(52	)			–				(91	)			–				(221	)
Acquisition of non-controlling interests			–				–				–				(335	)			–				(335	)
Change in borrowing and finance leases			623				1,206				–				(101	)			–				1,728
Other movement in treasury stocks			–				115				(24	)			(63	)			–				28
Other finance activities			465				1,454				949				(1,962	)			(1,011	)			(105	)
Net cash flow from/(used in) financing activities			1,010				1,283				(167	)			(1,469	)			(1,011	)			(354	)
Net increase/(decrease) in cash and cash equivalents			(1	)			376				(2	)			580				–				953
Cash and cash equivalents at the beginning of the year			–				3				(3	)			2,217				–				2,217
Effect of foreign exchange rate changes			1				(5	)			1				37				–				34
Cash and cash equivalents at the end of the year			–				374				(4	)			2,834				–				3,204

^(a)  The term ‘Unilever parent entities’ refers to Unilever N.V. and Unilever PLC. Though Unilever N.V. and Unilever PLC are separate legal entities, with different shareholder constituencies and separate stock exchange listings, they operate as nearly as practicable as a single economic entity. Debt securities issued by entities in Unilever Group are fully and unconditionally guaranteed by both Unilever N.V. and Unilever PLC.

24

NOTES TO THE FINANCIAL STATEMENTS

(unaudited)

12 GUARANTOR STATEMENTS (continued)

€ million
Cash flow statement Six months ended 30 June 2012 (Restated)		Unilever Capital Corporation subsidiary issuer				Unilever(a) parent entities				Unilever United States  Inc. subsidiary guarantor				Non-guarantor subsidiaries				Eliminations				Unilever Group
Cash flow from operating activities			–				(128	)			(19	)			3,487				–				3,340
Income tax paid			–				(45	)			(92	)			(664	)			–				(801	)
Net cash flow from operating activities			–				(173	)			(111	)			2,823				–				2,539
Interest received			–				18				–				63				–				81
Net capital expenditure			–				(134	)			–				(692	)			–				(826	)
Acquisitions and disposals			–				–				–				(94	)			–				(94	)
Other investing activities			(696	)			2,247				390				(1,631	)			686				996
Net cash flow from /(used in) investing activities			(696	)			2,131				390				(2,354	)			686				157
Dividends paid on ordinary share capital			–				(1,328	)			(917	)			921				–				(1,324	)
Interest and preference dividends paid			(70	)			(94	)			–				(93	)			–				(257	)
Change in borrowing and finance leases			701				65				–				(779	)			–				(13	)
Other movement on treasury stock			–				122				(50	)			(41	)			–				31
Other finance activities			65				(712	)			686				562				(686	)			(85	)
Net cash flow from/(used in) financing activities			696				(1,947	)			(281	)			570				(686	)			(1,648	)
Net increase/(decrease) in cash and cash equivalents			–				11				(2	)			1,039				–				1,048
Cash and cash equivalents at the beginning of the year			–				1				(2	)			2,979				–				2,978
Effect of foreign exchange rate changes			–				(8	)			–				(252	)			–				(260	)
Cash and cash equivalents at the end of the year			–				4				(4	)			3,766				–				3,766

^(a)  The term ‘Unilever parent entities’ refers to Unilever N.V. and Unilever PLC. Though Unilever N.V. and Unilever PLC are separate legal entities, with different shareholder constituencies and separate stock exchange listings, they operate as nearly as practicable as a single economic entity. Debt securities issued by entities in Unilever Group are fully and unconditionally guaranteed by both Unilever N.V. and Unilever PLC.

25