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Annual Report and Accounts 2018 Highlights


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Widespread economic and geopolitical uncertainty meant that the global business environment remained challenging in 2018. Currency depreciation in a number of key markets fuelled inflationary pressures and dampened consumer demand, while input costs rose steadily on the back of escalating commodity prices.

Against this backdrop, Unilever delivered a solid performance. Underlying sales grew by 3.1%, excluding the recently divested spreads business (2.9% including spreads). Growth was profitable, bringing our underlying operating margin to 18.4%, up 90 basis points, which also drove a healthy free cash flow of €5 billion for the year.

Importantly, the overall shape and quality of the performance was encouraging. We achieved a good balance of price and volume growth. Growth was broad-based, across each of our three global Divisions – Beauty & Personal Care, Home Care and Foods & Refreshment. Our continuing margin progression was underpinned by well-embedded savings and efficiency programmes, and an improving mix from underlying sales growth in Beauty & Personal Care.

Inspired by the Unilever Sustainable Living Plan, we also saw our brands with the most distinct and well-articulated social and environmental purpose grow significantly faster than our other brands.

The results in 2018 re-affirm the enduring strength of Unilever’s brands and the growing resilience of our organisational model, as well as underlining Unilever’s ability to deliver consistent top and bottom line performance even in very challenging conditions. Nevertheless, we are determined to step up the proportion of our business that is winning market share as part of moving our sales growth more consistently into the middle of our multi-year 3-5% targeted range.

Our Annual Report and Accounts provides further detail on our performance during the year and how our business model is delivering strong returns for shareholders and a more sustainable way of doing business for the benefit of all our stakeholders.


Financial performance

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Group results data

turnover growth

Turnover growth averaged 0.6% over five years

(5.1%) 2018
1.9% 2017
(1.0)% 2016

underlying sales growth*

Underlying sales growth averaged 3.3% over five years

2.9%^ 2018
3.1%^ 2017
3.7% 2016

underlying volume growth*

Underlying volume growth averaged 1.3% over five years

1.9% 2018
0.8% 2017
0.9% 2016

Operating margin

Operating margin averaged 17.3% over five years

24.6% 2018
16.5% 2017
14.8% 2016

Underlying operating margin*

Underlying operating margin has steadily increased over five years from 15.5% to 18.4%

18.4% 2018
17.5% 2017
16.4% 2016

Free Cash Flow*

Unilever has generated free cash flow of €23.0 billion over five years

€5.0bn 2018
€5.4bn 2017
€4.8bn 2016

Personal care data

Turnover

€20.6bn 2018
€20.7bn 2017
€20.2bn 2016

Turnover growth

(0.3%) 2018
2.6% 2017
0.5% 2016

Underlying sales growth

3.1%^ 2018
2.9%^ 2017
4.2% 2016

Operating margin

20.0% 2018
19.8% 2017
18.4% 2016

Underlying operating margin

21.9% 2018
21.1% 2017
20.0% 2016

Home care data

Turnover

€20.2bn 2018
€22.4bn 2017
€22.5bn 2016

Turnover growth

(9.9%) 2018
(0.4%) 2017
(2.2%) 2016

Underlying sales growth

2.0%^ 2018
2.7%^ 2017
2.7% 2016

Operating margin

35.8% 2018
16.1% 2017
14.0% 2016

Underlying operating margin

17.5% 2018
16.7% 2017
15.6% 2016

Foods data

Turnover

€10.1bn 2018
€10.6bn 2017
€10.0bn 2016

Turnover growth

(4.2%) 2018
5.6% 2017
(1.5%) 2016

Underlying sales growth

4.2%^ 2018
4.4%^ 2017
4.9% 2016

Operating margin

11.5% 2018
10.8% 2017
9.5% 2016

Underlying operating margin

13.0% 2018
12.2% 2017
10.9% 2016

*Key Financial Indicators.

^ Wherever referenced in this document, 2018 underlying sales growth does not include price growth in Venezuela for the whole of 2018 and in Argentina from July 2018. 2017 underlying sales growth does not include Q4 price growth in Venezuela. See pages 23 and 24 of our Annual Report and Accounts 2018 on non-GAAP measures for more details.

◊ The Group has revised its operating segments to align with the new structure under which the business is managed. Beginning 2018, operating segment information is provided based on three product areas: Beauty & Personal Care, Foods & Refreshment and Home Care.

Underlying sales growth, underlying volume growth, underlying 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 page 23 of our Annual Report and Accounts 2018.


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.

653 million 2018
601 million 2017
538 millionΦ 2016

Nutrition

Target: By 2020 we will double (ie up to 60%) 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.

48% 2018
39% 2017
35% 2016

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 (from the sourcing of the raw materials to the greenhouse gas emissions linked to people using our products) by 2030 (greenhouse gas impact per consumer use).+

6%Θ 2018
9% 2017
8% 2016

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).**

70.46 2018
76.77 2017
83.52Ф 2016

Water

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

(2%)Θ 2018
(2%) 2017
(7%) 2016

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).**

1.67 2018
1.80 2017
1.85Ф 2016

Waste

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

(31%)†Θ 2018
(29%) 2017
(28%)Ф 2016

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).**

0.20 2018
0.18 2017
0.35Ф 2016

Sustainable sourcing

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

56% 2018
56% 2017
51% 2016

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).

61%‡† 2018
55%ఠ2017
- 2016

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

0.69 2018
0.89 2017
1.01Ф 2016

OPPORTUNITIES FOR WOMEN

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

  • Promoting safety for women in communities where we operate.
  • Enhancing access to training and skills (number of women).
  • Expanding opportunities in our value chain (number of women).
1.85 million †ж 2018
1.26 million 2017
0.92 million 2016
  • Building a gender-balance organisation with a focus on management (% of managers that are women) **
49% 2018
47% 2017
46% 2016

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)

1.73 millionж 2018
1.60 million 2017
1.53 million 2016

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

0.75 millionж 2018
0.72 million 2017
0.65 million 2016

Baseline 2010 unless otherwise stated.
** Key Non-Financial Indicators.
† PricewaterhouseCoopers assured in 2018. For details and 2018 basis of preparation see www.unilever.com/ara2018/downloads.
∞ PricewaterhouseCoopers assured in 2017. For details and 2017 basis of preparation see the reports and publications archive.
Ф PricewaterhouseCoopers assured in 2016. For details and 2016 basis of preparation see the reports and publications archive.
‡ During 2017 and 2018 we amended how we assessed compliance with the Responsible Sourcing Policy, hence year-on-year data is not comparable.
ж Around 490,000 women have accessed initiatives under both the Inclusive Business and the Opportunities for Women pillars in 2018.
( ) 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.
Θ The spreads business was sold in mid-2018 and is excluded from the performance measure (including the baseline) to ensure alignment with the existing business structure.

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