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Annual Report and Accounts 2017 Highlights


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Our responsible long-term compounding growth model, based on continuously high levels of re-investment, has served Unilever well for many years. 2017 saw a continuation of this trend.

Underlying sales excluding spreads grew 3.5% (3.1% including spreads), representing a good performance in largely subdued markets. Growth was broad-based, across all our categories, and of good quality, supported by high levels of brand and marketing investment.

There was excellent progress on absolute profitability and on underlying operating margin, helped by strong delivery against the key savings and efficiency programmes behind our Connected for Growth (C4G) change programme. Two-thirds of the more than €2 billion of savings generated in 2017 were re-invested behind growing our brands in line with our long-term model. The increase in underlying operating profit also contributed to a record free cash flow delivery at €5.4 billion.

We also moved decisively to reshape our portfolio in anticipation of changing consumer trends and to help maximise new and burgeoning growth opportunities. Over the last three years, we have made or announced 22 acquisitions. Eleven of these came in 2017. Having announced earlier in the year the intention to divest our spreads business, 2017 also ended with the announcement of the sale of the business to KKR for €6.825 billion on a cash-free, debt-free basis.

Delivering sustainable value creation means investing for the long term, which is why the Unilever Sustainable Living Plan (USLP) is at the heart of our business model and Vision.

By the end of 2017, amongst a wide range of other achievements, we had helped more than 601 million people improve their health and hygiene; we had enabled 1.6 million small-scale retailers and 716,000 smallholder farmers to access initiatives aiming to increase their incomes or improve their agricultural practices; and we had sourced 56% of our agricultural raw materials sustainably. Our actions on the USLP continue to drive value for Unilever – generating more growth, lower costs, less risk and more trust in the business – and support the delivery of the United Nations Sustainable Development Goals.

Our Annual Report and Accounts provides further detail on our performance during the year and how our business model is delivering accelerated returns for shareholders and long-term value for our stakeholders.


Financial performance

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Group results data

turnover growth

Turnover growth averaged 1.0% over five years

1.9% 2017
(1.0%) 2016
10.0% 2015

underlying sales growth*

Underlying sales growth averaged 3.6% over five years

3.1%^ 2017
3.7% 2016
4.1% 2015

underlying volume growth*

Underlying volume growth averaged 1.5% over five years

0.8% 2017
0.9% 2016
2.1% 2015

Operating margin

Operating margin averaged 15.4% over five years

16.5% 2017
14.8% 2016
14.1% 2015

Underlying operating margin*

Underlying operating margin has steadily increased over five years from 15.1% to 17.5%

17.5% 2017
16.4% 2016
15.6% 2015

Free Cash Flow*

Unilever has generated free cash flow of €22.0 billion over five years

€5.4bn 2017
€4.8bn 2016
€4.8bn 2015

Personal care data

Turnover

€20.7bn 2017
€20.2bn 2016
€20.1bn 2015

Turnover growth

2.6% 2017
0.5% 2016
13.2% 2015

Underlying sales growth

2.9%^ 2017
4.2% 2016
4.1% 2015

Operating margin

19.8% 2017
18.4% 2016
18.1% 2015

Underlying operating margin

21.1% 2017
20.0% 2016
19.7% 2015

Home care data

Turnover

€10.6bn 2017
€10.0bn 2016
€10.2bn 2015

Turnover growth

5.6% 2017
(1.5%) 2016
10.9% 2015

Underlying sales growth

4.4%^ 2017
4.9% 2016
5.9% 2015

Operating margin

10.8% 2017
9.5% 2016
7.3% 2015

Underlying operating margin

12.2% 2017
10.9% 2016
8.4% 2015

Foods data

Turnover

€12.5bn 2017
€12.5bn 2016
€12.9bn 2015

Turnover growth

(0.1%) 2017
(3.1%) 2016
4.5% 2015

Underlying sales growth

1.0%^ 2017
2.1% 2016
1.5% 2015

Operating margin

18.2% 2017
17.4% 2016
17.8% 2015

Underlying operating margin

19.7% 2017
19.1% 2016
19.1% 2015

Refreshment data

Turnover

€9.9bn 2017
€10.0bn 2016
€10.1bn 2015

Turnover growth

(0.8%) 2017
(1.1%) 2016
10.3% 2015

Underlying sales growth

4.9%^ 2017
3.5% 2016
5.4% 2015

Operating margin

13.5% 2017
9.7% 2016
8.3% 2015

Underlying operating margin

12.7% 2017
11.1% 2016
10.2% 2015

*Key Financial Indicators.

^Wherever referenced in our annual report, 2017 underlying sales growth does not include Q4 price growth in Venezuela. See pages 22 to 23 of our annual report on non-GAAP measures for more details.

Underlying sales growth, underlying volume growth, underlying operating margin and free cash flow are non-GAAP measures. In order to provide a clear picture of our performance against the objectives set out in our strategic review we report underlying operating margin, which excludes restructuring costs, in place of the previously reported core operating margin. For further information about these measures, and the reasons why we believe they are important for an understanding of the performance of the business, please refer to our commentary on non-GAAP measures on page 22 of our annual report.


Unilever Sustainable Living Plan

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Improving Health & Well-being

big goal: By 2020 we will help more than a billion people take action to improve their health and well-being.

Learn more about Improving Health & Well-being

Health & hygiene

Target: By 2020 we will help more than a billion people to improve their health and hygiene. This will help reduce the incidence of life-threatening diseases like diarrhoea.

601 million 2017
538 millionΦ 2016
482 million 2015

Nutrition

Target: By 2020 we will double the proportion of our portfolio that meets the highest nutritional standards, based on globally recognised dietary guidelines. This will help hundreds of millions of people to achieve a healthier diet.

39% 2017
35% 2016
34% 2015

Reducing Environmental Impact

big goal: By 2030 our goal is to halve the environmental footprint of the making and use of our products as we grow our business.

Learn more about Reducing Environmental Impact

Greenhouse gases

Target: Halve the greenhouse gas impact of our products across the lifecycle by 2030 (greenhouse gas impact per consumer use).

9% 2017
8% 2016
7%Θ 2015

Target: By 2020 CO2 emissions from energy from our factories will be at or below 2008 levels despite significantly higher volumes (reduction in CO2 from energy per tonne of production since 2008). **+

(47%) 2017
(43%)Φ 2016
(39%) 2015

Water

Target: Halve the water associated with the consumer use of our products by 2020 (water impact per consumer use).

(2%) 2017
(7%) 2016
(1%) 2015

Target: By 2020 water abstraction by our global factory network will be at or below 2008 levels despite significantly higher volumes (reduction in water abstraction per tonne of production since 2008). **

(39%) 2017
(37%)Φ 2016
(37%) 2015

Waste

Target: Halve the waste associated with the disposal of our products by 2020 (waste impact per consumer use).

(29%) 2017
(28%)Φ 2016
(26%)Θ 2015

Target: By 2020 total waste sent for disposal will be at or below 2008 levels despite significantly higher volumes (reduction in total waste per tonne of production since 2008). **

(98%) 2017
(96%)Φ 2016
(97%) 2015

Sustainable sourcing

Target: By 2020 we will source 100% of our agricultural raw materials sustainably (% of tonnes purchased).

56% 2017
51% 2016
60%^ 2015

Enhancing Livelihoods

big goal: By 2020 we will enhance the livelihoods of millions of people as we grow our business.

Learn more about Enhancing Livelihoods

Fairness in the workplace

Target: By 2020 we will advance human rights across our operations and extended supply chain, by:

  • Sourcing 100% of procurement spend from suppliers meeting the mandatory requirements of the Responsible Sourcing Policy (% of spend of suppliers meeting the Policy)

55% 2017
- 2016
- 2015

  • Reducing workplace injuries and accidents (Total Recordable Frequency Rate of workplace accidents per million hours worked). **

0.89 2017
1.01Φ 2016
1.12 2015

OPPORTUNITIES FOR WOMEN

Target: By 2020 we will empower 5 million women, by:

1,259,000◊ж 2017
920,000 2016
806,000 2015

  • Promoting safety for women in communities where we operate

7,000 2017
7,000 2016
6,000 2015

  • Enhancing access to training and skills (number of women)

1,175,000 2017
836,000 2016
730,000 2015

  • Expanding opportunities in our value chain (number of women)

77,000 2017
77,000 2016
70,000 2015

  • Building a gender-balance organisation with a focus on management (% of managers that are women) **

47% 2017
46% 2016
45% 2015

Inclusive Business

Target: By 2020 we will have a positive impact on the lives of 5.5 million people by:

  • Enabling small-scale retailers to access initiatives aiming to improve their income (number of small-scale retailers)

1.6 millionж 2017
1.5 million 2016
1.8 million 2015

  • Enabling smallholder farmers to access initiatives aiming to improve their agricultural practices

716,000◊ж 2017
650,000 2016
600,000 2015

Baseline 2010 unless otherwise stated.
**Key Non-Financial Indicators.
◊ PricewaterhouseCoopers (PwC) assured in 2017. For details and 2017 basis of preparation see www.unilever.com/ara2017/downloads.
Φ PricewaterhouseCooopers (PwC) assured in 2016. For details and 2016 basis of preparation see the reports and publications archive.
∆ PricewaterhouseCooopers (PwC) assured in 2015. For details and 2015 basis of preparation see the reports and publications archive.
Θ Greenhouse Gases was assured as a 6% increase in 2015 by PwC. This was restated to 7% in 2016 as we revised our 2010 baseline with updated product data. Waste was assured as a 29% reduction in 2015 by PwC. This was restated to 26% in 2016 as we revised our 2010 baseline with updated recycling data.
‡ During the year we have amended how we assess compliance with the Responsible Sourcing Policy, hence prior year numbers are not comparable. See page 14 of our annual report for further details.
ж Around 370,000 women have accessed initiatives under both the Inclusive Business and the Opportunities for Women pillars in 2017.
( ) In the table above, brackets around numbers indicate a negative trend which, for environmental metrics, represents a reduction in impact.
+ Target approved by the Science Based Targets Initiative.
^ See page 13 of our annual report for more information.

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