Unilever (UL) 6-KFinal Results

FORM 6-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

REPORT OF FOREIGN ISSUER

 

 

Pursuant to Rule 13a-16 or 15d-16

of the Securities Exchange Act of 1934

 

 

Dated February 08, 2024

 

Commission File Number: 001-04546

 

UNILEVER PLC

(Translation of registrant's name into English)

 

UNILEVER HOUSE, BLACKFRIARS, LONDON, ENGLAND

(Address of principal executive offices)

 

Indicate by check mark whether the registrant files or will file annual reports

under cover Form 20-F or Form 40-F.

 

Form 20-F..X.. Form 40-F 

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper

as permitted by Regulation S-T Rule 101(b)(1):_____

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper

as permitted by Regulation S-T Rule 101(b)(7):_____

 

Indicate by check mark whether the registrant by furnishing the information

contained in this Form is also thereby furnishing the information to the

Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

 

Yes   No .X..

 

If "Yes" is marked, indicate below the file number assigned to the registrant

in connection with Rule 12g3-2(b): 82- _______

 

  

Exhibit 99 attached hereto is incorporated herein by reference.

 

 

 

 

 

Signatures

 

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 

 

 

Date: 08 February, 2024

 

 

 

  EXHIBIT INDEX

  ------------------------

 

 

 

 Exhibit 99

 

 

 

Financial and operational highlights

 

 

 

 

 

 

 

 

 

 

 

 

Chief Executive Officer statement

 

"Today's results show an improving financial performance, with the return to volume growth and margins rebuilding. However, our competitiveness remains disappointing and overall performance needs to improve. We are working to address this by improving our execution to unlock Unilever's full potential.

 

In October, we set out a Growth Action Plan focused on three priorities: delivering higher-quality growth, stepping up productivity and simplicity, and adopting a strong performance focus.

 

The new leadership team has embedded the action plan at pace. We have increased investment behind our 30 Power Brands, accelerated portfolio transformation, and are driving a sharper performance focus with clear and stretching targets across the whole organisation.

 

We are at the early stages of this work and there is much to do but we are moving with speed and urgency to transform Unilever into a consistently higher performing business."

 

Hein Schumacher

 

 

 

 

We expect underlying sales growth (USG) for 2024 to be within our multi-year range of 3% to 5%, with more balance between volume and price.

 

We anticipate a modest improvement in underlying operating margin for the full year. We will deliver this through gross margin expansion, driven by a step-up in productivity and net material inflation back to more normal levels.

 

 

 

 

In October 2023, we set out a Growth Action Plan to drive improved performance and competitiveness. During the fourth quarter, we moved at pace to embed it across the business.

 

The plan is divided into three elements but is underpinned by one simple premise: the need to do fewer things, better, with greater impact. The operational impacts will build throughout 2024.

 

 

 

 

 

 

 

 

 

 

 

 

 

We are announcing today that our Chief People & Transformation Officer Nitin Paranjpe has decided to retire from Unilever later this year. Nitin has had a distinguished 37-year career with Unilever, including as CEO of Hindustan Unilever, President Home Care, President Foods & Refreshment and Chief Operating Officer of Unilever. We are pleased to announce the appointment of Mairéad Nayager as our new Chief People Officer, effective 1 June. Mairéad is currently Chief Human Resources Officer (CHRO) of Haleon PLC, having previously served as CHRO of Diageo PLC between 2015 and 2022.

 

 

 

 

 

Performance

 

Underlying sales growth in the full year was 7.0%, with positive volumes of 0.2% and 6.8% from price. Growth from the 30 Power Brands was accretive at 8.6%. Beauty & Wellbeing and Personal Care delivered strong volume growth throughout the year and Home Care returned to positive volume growth in the second half. Volume growth for the Group accelerated to 1.8% in the fourth quarter, with 3.9% volume growth from the 30 Power Brands.

 

Underlying price growth decelerated from 10.7% in the first quarter to 2.8% in the fourth quarter, reflecting lower net material inflation in the second half. Nutrition and Ice Cream faced the highest input cost inflation in 2023 which translated into higher pricing.

 

The percentage of our business winning market share* on a rolling 12 month-basis was disappointing at 37%. This poor performance reflects share losses to private label in Europe, consumer shifts to super-premium segments in North America where we currently under index and a significant reduction of unprofitable SKUs globally. Our competitiveness is not good enough and we are moving quickly to address it.

 

Beauty & Wellbeing grew underlying sales by 8.3%, with strong volume growth of 4.4%. Prestige Beauty and Health & Wellbeing continued to grow double-digit and now account for a quarter of Beauty & Wellbeing's turnover. Personal Care grew underlying sales 8.9%, with 3.2% from volume and 5.5% from price, led by strong sales growth of Deodorants. Home Care grew underlying sales 5.9%, driven by 6.8% from price and (0.9)% from volume, with positive volumes in emerging markets offset by a double-digit decline in Europe. Nutrition grew underlying sales 7.7%, with 10.1% from price and volumes down (2.2)% as we responded to higher input costs and a challenging European market. Ice Cream's underlying sales growth was disappointing at 2.3%, with price growth of 8.8% and a volume decline of (6.0)%, reflecting the impact of downtrading in the in-home channels.

 

Emerging markets (58% of Group turnover) grew underlying sales 8.5%, with 1.6% from volume and 6.9% from price. Latin America, Turkey and Africa delivered double-digit growth. India grew mid-single digit led by volume, with lower input costs that led to negative pricing in the fourth quarter. Sales in China grew low-single digit led by volume while the market recovery continued to be uneven and slower than expected. Growth in South East Asia was impacted by a sales decline in Indonesia in the fourth quarter as consumers avoided the brands of multinational companies in response to the geopolitical situation in the Middle East.

 

Underlying sales in developed markets (42% of Group turnover) grew 4.8% in the full year with 6.7% from price and (1.8)% from volume. North America delivered strong growth of 5.8% with 2.5% from volume and 3.3% from price, with continued double-digit underlying sales growth in Prestige Beauty and Health & Wellbeing. Volume growth in North America accelerated throughout the year leading to volume growth of 6.3% in the fourth quarter.  In Europe, underlying sales growth was 4.1%, driven by 12.8% from price given its higher exposure to categories with significant cost inflation, and a volume decline of (7.7)%.

 

Turnover was €59.6 billion, down (0.8)% versus the prior year, including (5.7)% adverse foreign exchange translation and (1.7)% from disposals net of acquisitions. Underlying operating profit was €9.9 billion, up 2.6% versus the prior year. Underlying operating margin increased 60bps to 16.7%. We improved gross margin by 200bps to 42.2% with an improvement of 330bps in the second half. We more than mitigated net material inflation of around €1.8 billion through improved productivity, price and mix while stepping up brand and marketing investment by €0.7 billion, a 130bps increase as a percentage of turnover. Overheads increased by 10bps, as we continued to invest in the expansion of our Prestige Beauty and Health & Wellbeing businesses.

 

Capital allocation

 

We continue to reshape the portfolio, allocating capital to premium segments through selective bolt-on acquisitions and divesting lower-growth businesses while balancing investment in the business and shareholder returns.

 

Adding to our portfolio of premium brands, we announced the acquisitions of Yasso Holdings, Inc., a premium frozen Greek yogurt brand in the United States, which completed on 1 August, and K18, a premium biotech haircare brand, which completed on 1 February 2024.

 

We announced three disposals during the year: the Suave beauty and personal care brand in North America, which completed on 1 May; Dollar Shave Club, which completed on 1 November; and Elida Beauty, which comprises more than 20 personal care brands. It is expected to complete by mid-2024.

 

In 2023, we returned €5.9 billion to shareholders through dividends and share buybacks. We completed the final two €750 million tranches of our €3 billion share buyback programme. The quarterly interim dividend for the Fourth Quarter is maintained at €0.4268.

 

Reflecting the Group's continued strong cash generation, the Board has approved a share buyback programme of up to €1.5 billion to be conducted during 2024, which we expect to commence in the second quarter.

 

 

*Competitiveness % Business Winning measures the aggregate turnover of the portfolio components (country/category cells) gaining value market share as a % of the total turnover measured by market data. As such, it assesses what percentage of our revenue is being generated in areas where we are gaining market share

 

 

 

 

Following the release of this trading statement on 8 February 2024 at 7:00 AM (UK time), there will be a webcast at 8:00 AM available on the website www.unilever.com/investor-relations/results-and-presentations/latest-results.

 

A replay of the webcast and the slides of the presentation will be made available after the live meeting.

 

 

 

 

 

Beauty & Wellbeing delivered a strong full year performance, with underlying sales up 8.3%, balanced between volume at 4.4% and price at 3.8%. Volume growth accelerated through the year to 6.3% in the fourth quarter, with good volumes in Hair Care and very strong volumes in Health & Wellbeing.

 

The full year performance reflects continued strong growth in Prestige Beauty and Health & Wellbeing, which now account for a quarter of Beauty & Wellbeing's turnover, as well as successful relaunches of some of our core Hair Care and Skin Care brands. The relaunches were powered by our science and technology capabilities and were supported by increased investment across our key markets to elevate their superiority credentials.

 

 

 

 

Underlying operating margin was flat with gross margin improvement reinvested in marketing and overheads.

 

 

 

Personal Care grew underlying sales 8.9% for the year, with growth balanced between price and volume, underpinned by continued strength in Deodorants. In the fourth quarter all three categories drove positive volumes.

 

Personal Care's full year growth was led by its Power Brands and science-backed innovations. These innovations offer functional benefits but also deliver enhanced health, hygiene, and superior skin cleansing. Personal Care supported these innovations with a step-up in marketing investment, including strategic sponsorships such as our first sponsorship deal with FIFA.

 

 

 

 

 

Underlying operating margin increased by 60bps, driven by a strong gross margin improvement that was partly re-invested in increased brand and marketing investment.

 

 

 

Home Care grew underlying sales 5.9% for the full year, with 6.8% from price and (0.9)% from volume. Volumes were positive in the second half, with a sharp price growth deceleration in emerging markets reflecting commodity cost deflation.

 

In Home Care we stepped up investments in brand and marketing and R&D to drive unmissable superiority of our biggest brands and deliver innovations that enhance the efficacy and sustainability of our products.

 

 

 

 

Underlying operating margin increased by 150bps driven by the strong gross margin improvement and a step-up in brand and marketing investment.

 

 

 

 

 

 

 

 

Functional Nutrition returned to growth while growing penetration and market share through its core proposition for kids as well as premium innovation tailored for women and people with diabetes.

 

Underlying operating margin increased by 100bps, driven by gross margin improvement which funded an increase in brand and marketing investment.

 

 

 

 

Ice Cream grew underlying sales by 2.3%, with 8.8% from price and (6.0)% from volume. Volumes were impacted throughout the year by high price elasticities with consumers downtrading to value formats and less favourable summer weather versus last year, mainly in Europe. In the fourth quarter, price growth slowed significantly after double-digit price growth in the first half of the year.

 

 

 

 

Underlying operating margin declined 90bps, driven by lower gross margin as a result of continued cost inflation and volume deleverage outstripping pricing, while brand and marketing investment increased.

 

 

 

 

 

Underlying sales growth was 6.5% with price growth of 5.3% and volume growth of 1.1%.

 

India grew mid-single digit through balanced price and volume growth. Sales were flat in the fourth quarter as pricing turned negative, mainly driven by price reductions in Fabric Cleaning and Skin Cleansing bars as a result of commodity movements. We are focused on driving competitive volume growth while pricing is expected to remain marginally negative if current commodity prices persist.

 

China grew low single-digit in a deflationary market with low consumer confidence. Growth was driven by a strong performance in Unilever Food Solutions and growth in Beauty & Wellbeing, while Home Care, Personal Care and Ice Cream declined.

 

In Indonesia, sales declined double-digit in the fourth quarter as consumers avoided the brands of multinational companies in response to the geopolitical situation in the Middle East. We have since seen some improvement to customer and consumer uptake in January. Growth in the Philippines was broad-based with a mix of price and volume growth while Thailand and Vietnam saw mid-single and low-single digit growth respectively, led by price.

 

Turkey delivered double-digit volume growth in a hyperinflationary environment with all Business Groups growing volumes.

 

Africa grew double-digit driven by price as volume growth turned positive in the second half.

 

 

 

Underlying sales growth was 4.1% with price at 12.8% and volume at (7.7)%.

 

Price growth remained elevated in all Business Groups to at least partially recover the impact from high input cost inflation. Personal Care and Beauty & Wellbeing delivered strong growth with slightly positive volume. Nutrition grew mid-single digit, while growth in Ice Cream and Home Care was muted due to double-digit volume declines. Private label gained share across most categories as consumer looked for value propositions in a high inflation environment.

 

Price-led growth was broad-based across most of the region. Eastern Europe and the United Kingdom grew underlying sales strongly, while France declined.

 

 

 

 

 

Finance costs and tax

 

Net finance costs reduced by €7 million to €486 million in 2023. This was driven by higher interest income across several markets and a higher interest credit from pensions, which more than offset the higher cost of debt on bonds and commercial paper. Net finance costs were 2.1% on average net debt. For 2024, we expect net finance costs to be between 2.5% to 3% on average net debt. This reflects the impact of refinancing maturing debt at higher rates, and lower finance income and pension credits versus 2023.

 

The underlying effective tax rate for 2023 increased to 25.6% (2022: 24.1%), due to a number of factors including an increase in non-deductible interest and irrecoverable withholding tax, as well as lower benefits from tax settlements and other one-off items. Our guidance for the underlying effective tax rate remains around 25%. The effective rate was 24.1% and included a benefit related to the disposal of the Dollar Shave Club. This compares with 20.4% in the prior year, which included a significant favourable impact related to the disposal of the global tea business which benefited from the participation exemption in the Netherlands.

 

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

 

Net profit from joint ventures and associates increased €23 million to €231 million, largely driven by the Pepsi-Lipton JVs. Other income from non-current investments was €(22) million, versus €24 million in the prior year.

 

Earnings per share

 

Underlying earnings per share increased 1.4% to €2.60, including (9.6)% of adverse currency. Constant underlying earnings per share increased by 11.0%, reflecting a strong operational performance. The reduction in the average number of shares as a result of the share buyback programme contributed 1.1%. Diluted earnings per share of €2.56 decreased by 14.2% versus the prior year that included the €2.3 billion profit on disposal for the Tea business.

 

Free cash flow

 

We delivered strong cash conversion of 111%. Free cash flow increased €1.9 billion to €7.1 billion (2022: €5.2 billion). This increase was largely driven by higher underlying operating profit, significantly improved working capital, and included €0.4 billion linked to a tax refund in India.

 

Underlying return on invested capital

 

Underlying return on invested capital improved to 16.2% (2022: 16.0%). This reflected the working capital improvement that reduced total invested capital.

 

Net debt

 

Closing net debt was €23.7 billion in line with 31 December 2022. Capital returns of €4.4 billion in dividends and €1.5 billion in share buyback to PLC shareholders, as well as net spend on acquisition and disposal activity, were fully funded by the free cash flow delivery of €7.1 billion. Net debt to underlying EBITDA was 2.1x as at 31 December 2023, in line with the prior year and our guidance of around 2x.

 

Pensions

 

Pension assets net of liabilities were in surplus of €2.4 billion at 31 December 2023 versus a surplus of €2.6 billion at the end of 2022. The decrease was primarily driven by reductions in interest rates increasing liabilities more than assets.

 

Financial implications and impairment risk in Russia

 

Our Russia business employs approximately 3,000 people in Russia and in 2023 the business represented around 1% of the Group's turnover and net profit. As at 31 December 2023, our Russia business had net assets of around €600 million, including four factories. During 2023 we reviewed our position and concluded that the containment actions we put in place at the beginning of the war minimise our economic contribution to the Russian state.

 

We will continue to review and disclose the financial implications from the conflict. While the potential impacts remain uncertain, there remains a risk that our operations in Russia are unable to continue, leading to loss of turnover, profit and a write-down of assets.

 

Share buyback programme

 

On 18 October 2023, we completed the fourth and final €750 million tranche of our share buyback programme of up to €3 billion, initiated on 10 February 2022. The total consideration paid for the repurchase of 16,181,572 shares is recorded within other reserves and the shares are held by Unilever as treasury shares. Under the first three tranches of the programme, a total of 49,770,289 ordinary Unilever PLC shares were purchased, and subsequently cancelled on 2 August 2023.

 

Reflecting the Group's continued strong cash generation and anticipated proceeds from the sale of Elida Beauty, the Board has approved a share buyback programme of up to €1.5 billion to be conducted during 2024, which we expect to commence in the second quarter.

 

Finance and liquidity

 

In 2023, the following notes matured and were repaid:

 

 

The following notes were issued:

 

 

On 31 December 2023, Unilever had undrawn revolving 364-day bilateral credit facilities in aggregate of $5,200 million and €2,600 million with a 364-day term out.

 

 

 

 

As previously disclosed, Unilever is involved in a number of ongoing investigations by national competition authorities. These proceedings and investigations are at different stages and concern different product markets. Where appropriate, provisions are made and contingent liabilities disclosed in relation to such matters.

 

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. At the same time, we are vigorously defending Unilever when we feel that allegations are unwarranted. The Group continues to reinforce and enhance its internal competition law compliance programme on an ongoing basis.

 

 

 

Effective from 1 January 2024, the functional currency of Unilever PLC ("PLC"), the Group's ultimate parent company, has changed from Sterling to Euro. This follows a review and subsequent change of the internal debt of PLC, from Sterling to Euro, which triggered a formal evaluation of PLCs functional currency in line with relevant accounting standards. The change is applied prospectively. There is no change to the stock listing currency of the Group and future dividends will continue to be paid in Sterling, Euro, and US dollar depending on the location of the exchange where shares are traded. There is no impact on the presentation of the Group results nor will there be any restatement to the Group financial statements as a result of this change.

 

 

 

 

Certain discussions and analyses set out in this announcement include measures which are not defined by generally accepted accounting principles (GAAP) such as IFRS. We believe this information, along with comparable GAAP measurements, is useful to investors because it provides a basis for measuring our operating performance, ability to retire debt and invest in new business opportunities. Our management uses these financial measures, along with the most directly comparable GAAP financial measures, in evaluating our operating performance and value creation. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information presented in compliance with GAAP. Wherever appropriate and practical, we provide reconciliations to relevant GAAP measures.

 

Unilever uses 'constant rate', and 'underlying' measures primarily for internal performance analysis and targeting purposes. We present certain items, percentages and movements, using constant exchange rates, which exclude the impact of fluctuations in foreign currency exchange rates. We calculate constant currency values by translating both the current and the prior period local currency amounts using the prior year average exchange rates into euro, except for the local currency of entities that operate in hyperinflationary economies. These currencies are translated into euros using the prior year closing exchange rate before the application of IAS 29. The table below shows exchange rate movements in our key markets.

 

 

Underlying sales growth (USG)

 

Underlying sales growth (USG) refers to the increase in turnover for the period, excluding any change in turnover resulting from acquisitions, disposals, changes in currency and price growth in excess of 26% in hyperinflationary economies. Inflation of 26% per year compounded over three years is one of the key indicators within IAS 29 to assess whether an economy is deemed to be hyperinflationary. We believe this measure provides valuable additional information on the underlying sales performance of the business and is a key measure used internally. The impact of acquisitions and disposals (A&D) is 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 changes in the GAAP measure turnover to USG is provided in notes 3 and 4.

 

Underlying price growth (UPG)

 

Underlying price growth (UPG) is part of USG and means, for the applicable period, the increase in turnover attributable to changes in prices during the period. UPG therefore excludes the impact to USG due to (i) the volume of products sold; and (ii) the composition of products sold during the period. In determining changes in price, we exclude the impact of price growth in excess of 26% per year in hyperinflationary economies as explained in USG above. The measures and the related turnover GAAP measure are set out in notes 3 and 4.

 

Underlying volume growth (UVG)

 

Underlying volume growth (UVG) is part of USG and means, for the applicable period, the increase in turnover in such period calculated as the sum of (i) the increase in turnover attributable to the volume of products sold; and (ii) the increase in turnover attributable to the composition of products sold during such period. UVG therefore excludes any impact on USG due to changes in prices. The measures and the related turnover GAAP measure are set out in notes 3 and 4.

 

Non-underlying items

 

Several non-GAAP measures are adjusted to exclude items defined as non-underlying due to their nature and/or frequency of occurrence.

 

 

 

 

Underlying operating profit (UOP) and underlying operating margin (UOM)

 

 

 

Underlying effective tax rate

 

The underlying effective tax rate is calculated by dividing taxation excluding the tax impact of non-underlying items by profit before tax excluding the impact of non-underlying items and share of net (profit)/loss of joint ventures and associates. This measure reflects the underlying tax rate in relation to profit before tax excluding non-underlying items before tax and share of net profit/(loss) of joint ventures and associates. Tax impact on non-underlying items within operating profit is the sum of the tax on each non-underlying item, based on the applicable country tax rates and tax treatment. This is shown in the following table:

 

Underlying earnings per share

 

Underlying earnings per share (underlying EPS) is calculated as underlying profit attributable to shareholders' equity divided by the diluted average number of ordinary shares. In calculating underlying profit attributable to shareholders' equity, net profit attributable to shareholders' equity is adjusted to eliminate the post-tax impact of non-underlying items. This measure reflects the underlying earnings for each share unit of the Group. Refer to note 6 for reconciliation of net profit attributable to shareholders' equity to underlying profit attributable to shareholders' equity.

 

Constant underlying EPS

 

Constant underlying earnings per share (constant underlying EPS) is calculated as underlying profit attributable to shareholders' equity at constant exchange rates and excluding the impact of both translational hedges and price growth in excess of 26% per year in hyperinflationary economies divided by the diluted average number of ordinary shares. This measure reflects the underlying earnings for each share unit of the Group in constant exchange rates.

 

The reconciliation of underlying profit attributable to shareholders' equity to constant underlying earnings attributable to shareholders' equity and the calculation of constant underlying EPS is as follows:

 

 

Net debt

 

Net debt 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. Net debt is defined as the excess of total financial liabilities, excluding trade payables and other current liabilities, over cash, cash equivalents and other current financial assets, excluding trade and other current receivables, and non-current financial asset derivatives that relate to financial liabilities.

 

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

 

 

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 expenditure and net interest payments. 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. FCF 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 cash flow from operating activities to FCF is as follows:

 

Cash conversion

 

Unilever defines cash conversion as free cash flow excluding tax on disposal as a proportion of net profit, excluding P&L on disposal and income from JV, associates and non-current investments. This reflects our ability to convert profit to cash.

 

 

Underlying return on invested capital (ROIC)

 

Underlying return on invested capital (ROIC) is a measure of the return generated on capital invested by the Group. The measure provides a guard rail for long-term value creation and encourages compounding reinvestment within the business and discipline around acquisitions with low returns and long payback. Underlying ROIC is calculated as underlying operating profit after tax divided by the annual average of: goodwill, intangible assets, property, plant and equipment, net assets held for sale, inventories, trade and other current receivables, and trade payables and other current liabilities.

 

 

 

 

 

 

 

This announcement may contain forward-looking statements within the meaning of the securities laws of certain jurisdictions, including 'forward-looking statements' within the meaning of the United States Private Securities Litigation Reform Act of 1995. Words and terminology such as 'will', 'aim', 'expects', 'anticipates', 'intends', 'looks', 'believes', 'vision', 'will continue', 'should', 'would be', 'seeks', 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. Forward-looking statements also include, but are not limited to, statements and information regarding the Unilever Group's (the 'Group') emissions reduction targets and other climate change related matters (including actions, potential impacts and risks associated therewith). These forward-looking statements appear in a number of places throughout this document and are based upon the intentions, beliefs, current expectations and assumptions regarding anticipated developments and other factors affecting the Group. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. They are not historical facts, nor are they guarantees of future performance or outcomes.

 

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. In addition, even if the results are consistent with the forward-looking statements contained in this announcement, those results may not be indicative of results in subsequent periods. 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; Unilever's ability to innovate and remain competitive; Unilever's investment choices in its portfolio management; the effect of climate change on Unilever's business; Unilever's ability to find sustainable solutions to its plastic packaging; significant changes or deterioration in customer relationships; the recruitment and retention of talented employees; disruptions in our supply chain and distribution; increases or volatility in the cost of raw materials and commodities; the production of safe and high quality products; secure and reliable IT infrastructure; execution of acquisitions, divestitures and business transformation projects; economic, social and political risks and natural disasters; financial risks; failure to meet high and ethical standards; and managing regulatory, tax and legal matters. A number of these risks have increased as a result of the Russia/Ukraine war. These forward-looking statements speak only as of the date of this document. Except as required by any applicable law or regulation, the Group expressly disclaims any intention or 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. All subsequent written and oral forward-looking statements attributable to either the Group or to persons acting on its behalf are expressly qualified in their entirety by the cautionary statements referred to above. 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 in the Annual Report on Form 20-F 2022 and the Unilever Annual Report and Accounts 2022.

 

 

 

 

 

 

 

 

 

 

 

 

(b)  Repurchase of shares reflects the cost of acquiring ordinary shares as part of the share buyback program announced on 10 February 2022.

 

(c)   Includes purchases and sales of treasury shares, other than the share buyback programme and the transfer from treasury shares to retained profit of share-settled schemes arising from prior years and differences between purchase and grant price of share awards.

 

 

 

(f)   Includes a hyperinflation adjustment of €308 million in relation to Argentina and Turkey.

 

(g)  During 2023, 112,746,434 PLC ordinary shares held as treasury shares were cancelled. The amount paid to repurchase these shares was initially recognised in other reserves and is transferred to retained profit on cancellation.

 

 

 

 

 

 

(unaudited)

 

Except as set out below the accounting policies and methods of computation are consistent with the year ended 31 December 2022. In conformity with the requirements of the Companies Act 2006, the condensed consolidated preliminary financial statements have been prepared based on the International Financial Reporting Standards (IFRS) as issued by the International Accounting Standard Board (IASB) and UK-adopted international accounting standards.

 

 

The condensed consolidated financial statements attached do not constitute the full financial statements within the meaning of Section 434 of the UK Companies Act 2006, which will be finalised and delivered to the Registrar of Companies in due course. Full accounts for Unilever for the year ended 31 December 2022 have been delivered to the Registrar of Companies; the auditors' reports on these accounts were unqualified, did not include a reference to any matters by way of emphasis and did not contain a statement under Section 498 (2) or Section 498 (3) of the UK Companies Act 2006.

 

New accounting standards

 

On 1 January 2023, the Group adopted IFRS 17 'Insurance Contracts'. The standard introduces a new model for accounting for insurance contracts. We have reviewed existing arrangements and concluded that IFRS 17 does not impact the condensed consolidated financial statements.

 

On 23 May 2023, amendments to IAS 12 'Income Taxes' came into effect relating to International Tax Reform (Pillar Two). These amendments clarify when an entity shall disclose qualitative and quantitative information about its exposure to Pillar Two income taxes. Effective immediately, the amendments also provide a temporary mandatory exemption from deferred tax accounting. There is no impact on the condensed consolidated financial statements.

 

All other new standards or amendments issued by the IASB and UK Endorsement Board that are effective or not yet effective, are either not applicable or not material to the Group.

 

 

Non-underlying items

 

These include non-underlying items within operating profit and non-underlying items not in operating profit but within net profit:

 

 

 

Restructuring costs are charges associated with activities planned by management that significantly change either the scope of the business or the manner in which it is conducted.

 

 

 

 

 

 

 

*Underlying price growth in excess of 26% per year in hyperinflationary economies has been excluded when calculating the price growth in the tables above, and an equal and opposite amount is shown as extreme price growth in hyperinflationary markets.

 

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.

 

Underlying 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. Underlying operating margin is calculated as underlying operating profit divided by turnover.

 

 

 

The effective tax rate for 2023 is 24.1% compared with 20.4% in 2022. The increase is primarily driven by the  favourable impact of the ekaterra Tea disposal which benefited from the participation exemption in the Netherlands in 2022. The increase was partially offset by a benefit related to the disposal of Dollar Shave Club in 2023.

 

 

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

 

In calculating diluted earnings per share and underlying earnings per share, a number of adjustments are made to the number of shares, principally the exercise of share plans by employees.

 

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

 

 

In calculating underlying earnings per share, net profit attributable to shareholders' equity is adjusted to eliminate the post-tax impact of non-underlying items.

 

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

 

 

In 2023, the Group completed the business acquisitions and disposals as listed below. The net consideration for acquisitions in 2023 is €675 million (2022: €811 million for acquisitions completed during that year).

 

 

On 1 May 2023, Unilever sold the North America Suave business to Yellow Wood Partners LLC for consideration of €592 million. A gain on disposal of €497 million has been recognised as a non-underlying item (see note 2).

 

On 18 December 2023, Unilever announced that it has received a binding offer from Yellow Wood Partners LLC to acquire Elida Beauty. Elida Beauty comprises more than 20 beauty and personal care brands including Q-Tips, Caress, Timotei and Tigi. Completion is expected by mid-2024.

 

On 22 December 2023, the Group announced it had signed an agreement to acquire K18, a premium biotech haircare brand in the US. The transaction completed on 1 February 2024 and the provisional accounting for this transaction, including the valuation of assets and liabilities acquired, is expected to be completed by H1 2024. This acquisition is another step towards the optimisation of Unilever's portfolio into premium segments.

 

Acquisitions

 

Effect on consolidated income statement

 

The acquisition deals completed in 2023 have contributed €82 million to the Group turnover and €18 million to the Group operating profit since the date of acquisition. If the acquisition deals completed in 2023 had all taken place at the beginning of the year, Group turnover would have been €59,709 million, and Group operating profit would have been €9,780 million.

 

Effect on consolidated balance sheet

 

 

The following table summarises the consideration and net assets acquired in 2023. The fair values currently used for opening balances are provisional. These balances remain provisional due to there being outstanding relevant information in regard to facts and circumstances that existed as of the acquisition date and/or where valuation work is still ongoing.

 

(a)  Other current assets include inventories of €18 million and cash and cash equivalents of €30 million.

 

(b)  Non-current liabilities include deferred tax of €109 million.

 

Disposals

 

 

Total consideration for 2023 disposals is €578 million (2022: €4,606 million for disposals completed during that year). The following table sets out the effect of the disposals in 2023 and comparative year on the consolidated balance sheet. The results of disposed businesses are included in the consolidated financial statements up until their date of disposal.

 

 

(a)  2023 mainly related to the disposals of Suave and Dollar Shave Club.

 

(b)  2023 includes property, plant and equipment of €42 million mainly related to the disposal of Dollar Shave Club.

 

(c)   2023 includes inventories of €88 million related to the disposals of Suave and Dollar Shave Club.

 

(d)  2023 includes €123 million of trade payables.

 

 

On 10 February 2022, we announced a share buyback programme of up to €3 billion to be completed over 2022 and 2023. During 2023, the Group repurchased 31,734,256 ordinary shares which were held by Unilever as treasury shares. Consideration paid for the repurchase of shares including transaction costs was €1,507 million and was recognised in other reserves.

 

The Group's Treasury function aims to protect the Group's financial investments, while maximising returns. The fair value of financial assets is the same as the carrying amount for 2023 and 2022. The Group's cash resources and

 

 

other financial assets are shown below.

 

 

 

 

 

 

and investments in financial institutions in North America, North Asia, South Asia and Europe.

 

 

The Group is exposed to the risks of changes in fair value of its financial assets and liabilities. The following tables summarise the fair values and carrying amounts of financial instruments and the fair value calculations by category.

 

 

For assets and liabilities which are carried at fair value, the classification of fair value calculations by category is summarised below:

 

 

 

 

There were no significant changes in classification of fair value of financial assets and financial liabilities since 31 December 2022. There were also no significant movements between the fair value hierarchy classifications since 31 December 2022.

 

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. The fair value of financial assets and financial liabilities (excluding listed bonds) is considered to be same as the carrying amount for 2023 and 2022.

 

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 2022.

 

On 18 December 2023, Unilever announced that it has received a binding offer from Yellow Wood Partners LLC to acquire Elida Beauty. Elida Beauty comprises more than 20 beauty and personal care brands including Q-Tips, Caress, Timotei and Tigi. As a result, the assets and liabilities of Elida Beauty have been classified as held for sale as at 31 December 2023. Following the classification of assets and liabilities as held for sale, they are recognised as current on the balance sheet.

 

 

 

The Board has declared a quarterly interim dividend for Q4 2023 of £0.3647 per Unilever PLC ordinary share or €0.4268 per Unilever PLC ordinary share at the applicable exchange rate issued by WM/Reuters on 6 February 2024.

 

The following amounts will be paid in respect of this quarterly interim dividend on the relevant payment date:

 

 

The euro and US dollar amounts above have been determined using the applicable exchange rates issued by WM/Reuters on 6 February 2024.

 

US dollar cheques for the quarterly interim dividend will be mailed on 22 March 2024 to holders of record at the close of business on 23 February 2024.

 

The quarterly dividend calendar for the remainder of 2024 will be as follows:

 

 

 

As disclosed elsewhere in this report, the acquisition of K18 completed on 1 February 2024.