Annual Report and Accounts 2016 Highlights


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2016 was another year of solid progress and achievement for Unilever. Guided by our model of consistent, competitive, profitable and responsible growth, we once again out-performed our markets, with 60% of the business gaining share.

We believe that this model of consistency, particularly at times of uncertainty, is in the best long-term interests of Unilever and a good indication of a robust strategy. Good quality top and bottom line growth has now been delivered over the last eight years, a rare achievement in today’s volatile and unpredictable markets and a clear sign of the progress we have made.

The relevance and importance of the Unilever Sustainable Living Plan (USLP) in driving a responsible business model, and in helping to accelerate the growth and profitability of Unilever, was demonstrated again in 2016. The alignment of our USLP objectives to the 17 Global Goals for Sustainable Development, set out by the United Nations to eradicate poverty in a sustainable and equitable way by 2030, further highlights the relevance of our approach in helping to address some of today’s most urgent global challenges.


Performance

The benefits that our vision and strategy deliver translate into performance for shareholders and society at large.

Financial performance

Growing the business: Group

Turnover growth

Year Figure
2016 (1.0)%
2015 10.0%

Operating margin

Year Figure
2016 14.8%
2015 14.1%

Underlying sales growth*

Year Figure
2016 3.7%
2015 4.1%

Underlying sales growth averaged 4.4% over five years.

Underlying volume growth*

Year Figure
2016 0.9%
2015 2.1%

Underlying volume growth averaged 2.0% over five years.

Core operating margin*

Year Figure
2016 15.3%
2015 14.8%

Core operating margin has steadily increased over five years from 13.7% to 15.3%.

Free cash flow*

Year Figure
2016 €4.8 billion
2015 € 4.8 billion

Unilever has generated free cash flow of €20.9 billion over five years.

Growing the business: Categories

Personal Care

Turnover

Year Figure
€20.2 billion
2015 €20.1 billion

Turnover growth

Year Figure
0.5%
2015 13.2%

Underlying sales growth

Year Figure
4.2%
2015 4.1%

Operating margin

Year Figure
18.4%
2015 18.1%

Core operating margin

Year Figure
19.1%
2015 18.9%

Foods

Turnover

Year Figure
€12.5 billion
2015 €12.9 billion

Turnover growth

Year Figure
(3.1)%
2015 4.5%

Underlying sales growth

Year Figure
2.1%
2015 1.5%

Operating margin

Year Figure
17.4%
2015 17.8%

Core operating margin

Year Figure
17.9%
2015 18.2%

Home care

Turnover

Year Figure
€10.0 billion
2015 €10.2 billion

Turnover growth

Year Figure
(1.5)%
2015 10.9%

Underlying sales growth

Year Figure
4.9%
2015 5.9%

Operating margin

Year Figure
9.5%
2015 7.3%

Core operating margin

Year Figure
9.7%
2015 7.6%

Refreshment

Turnover

Year Figure
€10.0 billion
2015 €10.1 billion

Turnover growth

Year Figure
(1.1)%
2015 10.3%

Underlying sales growth

Year Figure
3.5%
2015 5.4%

Operating margin

Year Figure
9.7%
2015 8.3%

Core operating margin

Year Figure
9.9%
2015 9.4%

* Key Financial Indicators.

Underlying sales growth, underlying volume growth, core operating margin and free cash flow are non-GAAP measures. For further information about these measures, and the reasons why we believe they are important for an understanding of the performance of the business, please refer to our commentary on non-GAAP measures on pages 26 to 28 of our Annual Report.


Unilever Sustainable Living Plan

Improving Health & Well-being

By 2020 we will help more than a billion people take action to improve their health and 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.

Performance

538 million

Around 538 million people reached by end 2016 through our programmes on handwashing, safe drinking water, oral health, sanitation and self-esteem.

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.

Performance

35%

35% of our portfolio by volume met the highest nutritional standards in 2016, based on globally recognised dietary guidelines.

Reducing Environmental Impact

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

Greenhouse gases

Target

Halve the greenhouse gas impact of our products across the lifecycle by 2030.

Performance

Our operations

83.52kg

We produced 83.52kg CO2 from energy per tonne of manufacturing production (2015: 88.49kg).**◊Φ

Our products' lifecycle

+8%

Our greenhouse gas impact per consumer use has increased by around 8% since 2010.

Water

Target

Halve the water associated with the consumer use of our products by 2020.

Performance

Our operations

1.85m3

We used 1.85m3 water per tonne of manufacturing production
(2015: 1.88m3)**◊Φ.

Our products in use

-7%

Our water impact per consumer use has reduced by around 7% since 2010.θ

Waste

Target

Halve the waste associated with the disposal of our products by 2020.

Performance

Our operations

0.35kg

We sent for disposal 0.35kg of total waste per tonne of manufacturing production (2015: 0.26kg).**◊Φ

Our products at disposal

-28%

Our waste impact per consumer use has reduced by around 28% since 2010.◊θ

Sustainable sourcing

Target

By 2020 we will source 100% of our agricultural raw materials sustainably.

Performance

51%

51% of our agricultural raw materials sustainably sourced by end of 2016 (2015: 60%)Ψ. This includes 48% as physical sustainable sources (2015: 39%) and 3% in the form of certificates used mainly in soy and sugar (2015: 3%). In 2016, we stopped buying GreenPalm certificates (2015: 18%). See Society (page 18 in our annual report) for an explanation.

Enhancing Livelihoods

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

Fairness in the workplace

Target

By 2020 we will advance human rights across our operations and extended supply chain.

Performance

67%

67% of procurement spend through suppliers meeting mandatory requirements of our Responsible Sourcing Policy.

We continued to embed human rights with a focus on our eight salient human rights issues which are documented in our 2015 Human Rights Report.

1.01

Our Total Recordable Frequency Rate for 2016 was 1.01 per million hours worked (2015: 1.12).**◊Φ

76%

Engagement score among 6,228 employees surveyed in 2016 was 76% (2015: 77%).**‡

Opportunities for women

Target

By 2020 we will empower 5 million women.

Performance

920,000

We enabled around 920,000 women to access initiatives aiming to promote their safety, develop their skills and expand their opportunities.*

46%

The percentage of persons of each sex who were Unilever managers was 54% male and 46% female (2015: 55% male and 45% female).**

Inclusive business

Target

By 2020 we will have a positive impact on the lives of 5.5 million people.

Performance

In 2016 we enabled around 650,000 smallholder farmers and 1.5 million small-scale retailers to access initiatives aiming to improve their agricultural practices or increase their incomes.жΦ

** Key Non-Financial Indicators.

◊ PricewaterhouseCoopers (PwC) assured. For details and the basis of preparation see further downloads below.

Φ Measured 1 October – 30 September.

‡ Full Global People Survey not undertaken in 2015. Comparator is for full survey among managers in 2014.

ж Around 300,000 women have accessed initiatives under both the Inclusive Business and the Opportunities for Women pillars in 2016.

Θ The 2010 baseline has been restated by a reduction of 0.2g CO2 per consumer use for Greenhouse Gases and a reduction of 0.04g per consumer use for Waste.

Ψ In 2016 had we continued to buy GreenPalm certificates our overall sustainable sourcing performance in 2016 would have been 66%.

For more details see www.unilever.com/sustainable-living

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