TIDMULVR

RNS Number : 6838T

Unilever PLC

26 July 2022

2022 FIRST HALF YEAR RESULTS

 
DELIVERING CONSISTENCY IN CHALLENGING CONDITIONS 
 

Performance highlights (unaudited)

 
                 Underlying performance                                           GAAP measures 
                                            vs 2021                                                     vs 2021 
==============  ====================  ===================  ==============  ==================== 
First Half 
Underlying 
 sales growth 
 (USG)                                               8.1%  Turnover                   EUR29.6bn                  14.9% 
Underlying 
 operating                                                 Operating 
 profit                     EUR5.0bn                 4.1%  profit                      EUR4.5bn                   1.7% 
Underlying 
 operating                                                 Operating 
 margin                        17.0%             (180)bps  margin                         15.2%               (200)bps 
Underlying                                                 Diluted 
 earnings                                                  earnings per 
 per share                   EUR1.34                 1.0%  share                        EUR1.13                 (4.7%) 
==============  ====================  ===================  ==============  ==================== 
Second Quarter 
USG                                                  8.8%  Turnover                   EUR15.8bn                  17.5% 
==============  ====================  ===================  ==============  ==================== 
                                                                                                         EUR0.4268 per 
Quarterly dividend payable in September 2022                                                                     share 
=========================================================================  =========================================== 
 

First half highlights

   --      Underlying sales growth of 8.1%, with 9.8% price and (1.6)% volume 
   --      Turnover increased 14.9%, including a currency impact of 5.6% 
   --      Underlying operating margin of 17.0%, a decrease of 180bps driven by input cost inflation 
   --      Underlying earnings per share up 1.0%, including a currency impact of 4.9% 
   --      The billion+ Euro brands, accounting for more than 50% of Group turnover, grew 9.4% 

-- EUR750 million share buyback tranche completed on 22 July, intention to launch second tranche in third quarter

 
Alan Jope: Chief Executive Officer statement 
 

"Unilever has delivered a first half performance which builds on our momentum of 2021, despite the challenges of high inflation and slower global growth. Underlying sales growth of 8.1% was driven by strong pricing to mitigate input cost inflation, which, as expected, had some impact on volume. We are now raising our sales guidance for the year. Underlying operating margin was on track at 17% for the first half.

We have made further progress against our strategic priorities. We are maintaining strong investment in our brands, supporting 9.4% underlying sales growth in our billion+ Euro brands. eCommerce sales now represent 14% of turnover, up from 6% in 2019. Of our three priority markets, the USA and India again grew strongly, while sales in China were affected by the lockdowns in the second quarter. We continue to reshape our portfolio, completing the sale of the global tea business ekaterra, and the acquisition of Nutrafol, a leading provider of hair wellness products. Prestige Beauty and Health & Wellbeing, now 4% of Group turnover, again grew double-digit.

Our simpler, more category-focused organisation came into effect as planned on 1 July. This major change to Unilever's operating model is an important further step that will underpin the delivery of consistent growth, which remains our first priority. The challenges of inflation persist and the global macroeconomic outlook is uncertain, but we remain intensely focused on operational excellence and delivery in 2022 and beyond."

26 July 2022

 
OUTLOOK 
 

Our guidance for underlying sales growth in 2022 was previously at the top end of a range of 4.5% to 6.5%. We now expect underlying sales growth to be above that range, driven by price with some further pressure on volume.

We expect net material inflation for the year to remain high at around EUR4.6 billion with our forecast for the second half largely unchanged at around EUR2.6 billion. We will continue to invest in the health of our brands. In the first half, we increased absolute brand and marketing investment, and we will again invest competitively in marketing, R&D and capital expenditure in the second half. Our full year underlying operating margin expectation remains at 16%, which is within our guided range of 16% to 17%.

The medium-term macroeconomic and cost inflation outlooks are uncertain and volatile, but delivering growth remains our first priority. Against this backdrop, we continue to expect to improve margin in 2023 and 2024, through pricing, mix and savings.

 
FIRST HALF OPERATIONAL REVIEW 
 

Our market context : High input cost inflation has been widespread across our markets, and it is expected to remain elevated in the second half. While Covid-19 restrictions have been eased in most markets, the lockdown in China affected consumers particularly in the second quarter.

In the majority of markets in which we operate, market growth was driven by price which had an impact on market volumes. Food service and out-of-home ice cream channels benefitted in markets which reopened after lockdowns in the prior year, although tourism has not yet returned to pre-Covid levels.

Unilever overall performance : Underlying sales growth in the first half was 8.1% with 9.8% from price and (1.6)% from volume. Growth was broad-based across all Divisions. Price has sequentially stepped up over the past two quarters, reaching 11.2% in the second quarter, which had, as expected, some negative impact on volume. This was more pronounced in Home Care, which was particularly exposed to rising input costs and took the highest pricing action, leading to underlying sales growth of 10.7%. Beauty & Personal Care grew 7.5%, driven by price and continued strong growth in Prestige Beauty and Health & Wellbeing, which is Unilever's vitamins, minerals and supplements business. Foods & Refreshment grew 7.3% with slightly negative volume at (0.9)%, although volumes were flat excluding ekaterra. Ice cream out-of-home and Unilever Food Solutions showed strong double-digit growth in the first half, compensating for lower growth of in-home ice cream.

Emerging markets grew by 10.0% with a 12.1% contribution from price and volume at (1.8)%, including an estimated adverse impact of around 70bps from the lockdowns in China. Pricing in Latin America was strong at 19.1% with volumes contracting by (4.8)%. South Asia grew strongly through both price and volume. Turkey delivered double-digit volume growth by managing dynamically through a high inflation environment. Developed markets increased by 5.5%, with 6.7% from price and (1.2)% from volume. North America grew 8.7%, helped by strong performances of dressings and our businesses in high growth areas such as Health & Wellbeing.

Turnover increased 14.9% to EUR29.6 billion, which included a currency impact of 5.6% and 0.6% from acquisitions net of disposals. Underlying operating profit was EUR5.0 billion, up 4.1% versus the prior year. Underlying operating margin declined by 180bps to 17.0%. Gross margin decreased by 210bps which reflected the very high inflation in input costs that was only partially mitigated by the strong pricing action and savings delivery. Brand and marketing investment was stepped up by EUR0.2 billion in constant exchange rates, which equated to a 40bps contribution to margin. Overheads increased by 10bps largely due to increased investment in business models with a higher overheads structure.

We completed the announced sale of our global tea business, ekaterra, on 1 July 2022. On 7 July, we completed the acquisition of a majority stake in Nutrafol, a leading provider of hair wellness products, which had been announced on 30 May 2022.

On 23 March, we commenced the first tranche of EUR750 million of the share buyback programme of up to EUR3 billion. As at 30 June, total consideration for the repurchase of shares was EUR648 million. This tranche completed on 22 July. It is our intention to launch a second EUR750 million tranche of our planned share buyback during the third quarter of 2022. This will be confirmed with a launch announcement in due course.

In January 2022, we announced a new, simpler, more category-focused operating model for Unilever organised around five Business Groups and a technology-driven backbone, Unilever Business Operations. The reorganisation is on schedule with the new structure in place on 1 July. We expect it to be achieved within existing restructuring plans, and to generate around EUR600 million of cost savings over two years, with the majority in 2023.

 
FIRST HALF OPERATIONAL REVIEW: DIVISIONS 
 
 
                             Second Quarter 2022                    First Half 2022 
                         Turnover  USG    UVG   UPG   Turnover  USG    UVG   UPG       Change 
                                                                                    in underlying 
                                                                                      operating 
      (unaudited)                                                                      margin 
=======================  ========                     ========  ====  =====  ====  ============== 
                          EURbn     %      %     %     EURbn     %      %     %         bps 
=======================  ========  ====  =====  ====  ========  ====  =====  ====  ============== 
Unilever                   15.8    8.8   (2.1)  11.2    29.6    8.1   (1.6)  9.8       (180) 
=======================  ========  ====  =====  ====  ========  ====  =====  ====  ============== 
   Beauty & Personal 
    Care                   6.4     8.0   (2.3)  10.5    12.2    7.5   (1.3)  9.0       (180) 
   Home Care               3.1     12.2  (3.8)  16.6    6.0     10.7  (3.4)  14.5      (200) 
   Foods & Refreshment     6.3     8.1   (1.2)  9.4     11.4    7.3   (0.9)  8.3       (170) 
=======================  ========  ====  =====  ====  ========  ====  =====  ====  ============== 
 

Beauty & Personal Care

Beauty & Personal Care underlying sales grew 7.5% with 9.0% from price and (1.3)% from volume. Strong price increases landed across most categories, and were particularly pronounced in Latin America, South Asia and Turkey.

Deodorants delivered double-digit growth, helped by continued premiumisation and strong innovations, such as the 72-hour protection technology launched with Rexona. Skin care grew low single-digit on the back of a strong prior year base, with strong growth of Pond's in India partially offset by a decline in China. Skin cleansing returned to growth, with Dove landing strong pricing and flat volume supported by the launch of premium innovations in North America. Overall skin cleansing volumes declined mid single-digit, particularly affected by the pricing in Europe and South Asia. Hair care grew mid single-digit, driven by India and North America, partially offset by declines in North Asia and Europe. Mid single-digit growth in oral care was driven by a strong performance in Indonesia with modest growth elsewhere. Prestige Beauty continued its double-digit growth momentum with Tatcha successfully launching in the United Kingdom and expanding in premium channels in China.

Underlying operating margin decreased 180bps as gross margin declined as a result of high input cost inflation.

Home Care

Home Care underlying sales grew 10.7% with 14.5% from price and (3.4)% from volume. Double-digit pricing landed across most geographies in response to very high increases in raw material costs.

Fabric cleaning continued its momentum, posting strong double-digit growth with marginal volume decline. The growth was broad-based across all formats, with strong contributions from OMO and Radiant. South Asia and Turkey achieved double-digit pricing and positive volumes, supported by the continuous development of the liquids market. Fabric enhancers grew mid single-digit with accelerated performance in the second quarter. Comfort continued its growth momentum in Brazil and China but faced declining markets in South-East Asia and Europe. Home & hygiene grew low single-digit with double-digit pricing offset by volume declines across most geographies. Household cleaner volumes declined as a result of a slowdown in consumers' disinfecting habits, while dishwash sales grew driven by India and South-East Asia.

Underlying operating margin declined 200bps driven by a substantial gross margin reduction partially offset by lower brand and marketing investment.

Foods & Refreshment

Foods & Refreshment underlying sales grew 7.3% with 8.3% from price and (0.9)% from volume. Pricing was broad-based and particularly high in dressings given the input cost increases.

Ice cream underlying sales grew high single-digit driven by strong growth in the out-of-home business which landed double-digit price and volume growth. Magnum and Cornetto continued their growth momentum supported by new variant innovations, while ice cream suffered from supply issues in the United States. In-home sales were slightly up, although volumes declined in Europe and North America where markets contracted as a result of some post-Covid channel switching by consumers.

Foods also grew high single-digit with slightly negative volumes. Unilever Food Solutions, our food service business, landed strong double-digit growth and achieved sales above pre-Covid levels despite the severe China lockdown impact in the second quarter. In-home foods grew high single-digit driven by high pricing and marginally negative volumes, on the back of a strong comparator. Hellmann's delivered double-digit, price-driven growth, which was supported by its global purpose campaign "Turn nothing into something".

Underlying operating margin decreased 170bps predominantly driven by lower gross margin.

 
FIRST HALF OPERATIONAL REVIEW: GEOGRAPHICAL AREA 
 
 
                       Second Quarter 2022                    First Half 2022 
                   Turnover  USG    UVG   UPG   Turnover  USG    UVG   UPG       Change 
                                                                              in underlying 
                                                                                operating 
   (unaudited)                                                                   margin 
=================  ========                     ========  ====  =====  ====  ============== 
                    EURbn     %      %     %     EURbn     %      %     %         bps 
=================  ========  ====  =====  ====  ========  ====  =====  ==== 
Unilever             15.8    8.8   (2.1)  11.2    29.6    8.1   (1.6)  9.8       (180) 
=================  ========  ====  =====  ====  ========  ====  =====  ==== 
   Asia/AMET/RUB     7.1     9.0   (2.6)  11.9    13.7    9.0   (1.1)  10.2       (90) 
   The Americas      5.4     11.7  (1.7)  13.6    9.9     10.4  (1.4)  11.9      (200) 
   Europe            3.3     4.6   (1.8)  6.5     6.0     2.9   (2.9)  6.0       (320) 
=================  ========  ====  =====  ====  ========  ====  =====  ==== 
 
 
                        Second Quarter 2022            First Half 2022 
   (unaudited)      Turnover  USG    UVG   UPG   Turnover  USG    UVG   UPG 
==================                               ========  ====  =====  ==== 
                     EURbn     %      %     %     EURbn     %      %     % 
==================  ========  ====  =====  ====  ========  ====  ===== 
Emerging markets      9.1     10.5  (3.1)  14.0    17.4    10.0  (1.8)  12.1 
Developed markets     6.7     6.6   (0.9)  7.6     12.2    5.5   (1.2)  6.7 
==================  ========  ====  =====  ====  ========  ====  ===== 
North America         3.4     8.9   (0.5)  9.4     6.2     8.7    0.6   8.1 
Latin America         2.0     16.8  (4.0)  21.7    3.7     13.4  (4.8)  19.1 
==================  ========  ====  =====  ====  ========  ====  ===== 
 

Asia/AMET/RUB

Underlying sales grew 9.0% with 10.2% from price and (1.1)% from volume. China declined low single-digit with the strong start of the year being reversed in the second quarter due to the Covid lockdowns that particularly impacted Unilever Food Solutions and Beauty & Personal Care. South Asia continued its growth momentum with strong pricing and positive volumes. Growth accelerated in the second quarter, driven by the performance of Home Care and hair care. Indonesia grew high single-digit, after another quarter of price-driven growth, supported by strong performance of oral care, deodorants and scratch cooking aids, but overall volumes were still down, most notably in Home Care. Vietnam landed high pricing and positive volumes across all categories. We have announced that we will no longer invest in Russia, but we will continue providing the local population with basic products. Our Russian business represented around 1% of turnover and had a minor negative impact on the growth of the Group. Turkey posted very strong, broad-based growth across all categories, driven by both price and volume. In line with our treatment of other hyperinflationary countries, the underlying price growth in Turkey was capped from the second quarter.

Underlying operating margin declined 90bps as a result of lower gross margin due to higher input costs. This was partially offset by the turnover leverage benefit on brand and marketing investment as well as overheads.

The Americas

Underlying sales growth in North America was 8.7%, with 8.1% from price and 0.6% from volume. Double-digit growth in Beauty & Personal Care was driven by strong performance in deodorants and Health & Wellbeing, including high growth from Liquid IV. Prestige Beauty also continued its growth momentum, helped by consumers returning to the offline channels. Foods & Refreshment grew high single-digit, boosted by strong sales in dressings and out-of-home ice cream. Customer service challenges persisted in the second quarter, largely due to labour availability.

Latin America delivered underlying sales growth of 13.4%, with 19.1% from price and (4.8)% from volume. All Divisions delivered double-digit growth. In the context of high double-digit pricing, volumes declined in Brazil, Mexico and Chile, while volumes held up in Argentina.

Underlying operating margin decreased by 200bps primarily driven by lower gross margin and higher overheads.

Europe

Underlying sales grew 2.9% with price of 6.0% and (2.9)% from volume. Growth sequentially improved in the second quarter, helped by out-of-home ice cream sales as the channel re-opened. Unilever Food Solutions also posted strong double-digit growth with sales exceeding pre-Covid levels, driven by extended distribution and price growth. The United Kingdom, France and Germany posted low single-digit growth with pricing largely offset by volume declines.

Underlying operating margin declined 320bps driven largely by lower gross margin as higher input costs outweighed pricing.

 
ADDITIONAL COMMENTARY ON THE FINANCIAL STATEMENTS - FIRST HALF 2022 
 

Finance costs and tax

Net finance costs increased by EUR74 million to EUR227 million in the first half of 2022. The increase was largely driven by a higher cost of debt on bonds and commercial papers as well as higher other interest costs. This was partially offset by an increase in finance income from higher cash balances and positive rate variances. The interest rate on average net debt increased to 1.9% from 1.4% in the prior year.

The underlying effective tax rate for H1 2022 increased to 24.4% from 21.9% in H1 2021 due to changes in profit mix and the lapping of favourable one-offs in the prior year. The effective tax rate for H1 2022 was 26.8% compared with 22.7% in H1 2021. The 2022 figure included tax costs related to the separation of the ekaterra business.

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

Net profit from joint ventures and associates was EUR97 million, compared with EUR91 million in 2021. Other income from non-current investments was EUR27 million, slightly down versus prior year.

Earnings per share

Underlying earnings per share increased by 1.0%, including a positive impact of 4.9% from currency. Constant underlying earnings per share decreased by 3.9%. The decline was mainly driven by lower margin, higher tax and finance costs, partially offset by turnover growth and a reduction in the number of shares. Diluted earnings per share decreased 4.7% to EUR1.13.

Restructuring costs

Restructuring costs in the first half increased to EUR359 million, compared to EUR306 million in the prior year. For the full year, we expect restructuring costs of around EUR1 billion, including those linked to the implementation of the new operating model. From 2023, restructuring costs are anticipated to be around 1% of Group turnover.

Free cash flow

Free cash flow in the first half of 2022 was EUR2.2 billion, down from the EUR2.4 billion delivered in the first half of 2021. This decrease was due to higher cash tax and increased capital expenditure, partially offset by improved operating profit and working capital.

Net debt

Closing net debt increased to EUR27.1 billion compared with EUR25.5 billion at 31 December 2021. The increase was driven by dividends paid, the share buyback programme and an adverse currency impact, partially offset by free cash flow delivery.

Pensions

Pension assets net of liabilities were in surplus of EUR5.0 billion at the end of June 2022 versus EUR3.0 billion as at 31 December 2021. The increase was primarily driven by lower liabilities as a result of increased interest rates in the European Union, the United Kingdom and the United States. This was partially offset by investment losses on pension assets reflecting the declines in equity and bond markets in the first half.

Finance and liquidity

During the first half, the following notes matured and were repaid:

   --      February: EUR750 million 0.50% fixed rate notes, GBP350 million 1.125% fixed rate notes 
   --      March: $500 million 3.00% fixed rate notes 
   --      May: $850 million 2.20% fixed rate notes 

The following notes were issued:

-- February: EUR500 million 0.75% fixed rate notes due February 2026, EUR650 million 1.25% fixed rate notes due February 2031, GBP300 million 2.125% fixed rate notes due February 2028

-- May: EUR650 million 1.75% fixed rate notes due November 2028; EUR850 million 2.25% fixed rate notes due May 2034

On 30 June 2022, Unilever had undrawn revolving 364-day bilateral credit facilities in aggregate of $7,215 million and EUR750 million with a 364-day term out.

Share buyback programme

On 10 February 2022, we announced a share buyback programme of up to EUR3 billion to be completed over 2022 and 2023. On 23 March 2022, we announced we would commence the first tranche of this buyback programme for an aggregate market value equivalent to EUR750 million. As at 30 June 2022, Unilever had repurchased 15,508,723 ordinary shares. Total consideration for the repurchase of shares was EUR648 million which is recorded within other reserves. The first tranche for an aggregate market value of EUR750 million completed on 22 July 2022. Between 23 March 2022 and 22 July 2022, a total of 17,802,472 Unilever PLC ordinary shares were purchased.

 
COMPETITION INVESTIGATIONS 
 

As previously disclosed, Unilever is involved in a number of ongoing investigations by national competition authorities, including those of France, Portugal and South Africa. These proceedings and investigations are at various stages and concern a variety of 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. In addition, the Group continues to reinforce and enhance its internal competition law training and compliance programme on an ongoing basis.

 
NON-GAAP MEASURES 
 

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.

 
                                      First half            First half 
                                        average               average 
                                        rate in               rate in 
                                         2022                  2021 
=============================== 
Brazilian Real (EUR1 = BRL)                     5.538                 6.492 
Chinese Yuan (EUR1 = CNY)                       7.083                 7.800 
Indian Rupee (EUR1 = INR)                      83.337                88.365 
Indonesia Rupiah (EUR1 = IDR)                   15798                 17231 
Philippine Peso (EUR1 = PHP)                   56.969                58.153 
UK Pound Sterling (EUR1 = GBP)                  0.842                 0.868 
US Dollar (EUR1 = US $)                         1.094                 1.206 
===============================  ==================== 
 

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 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.

-- Non-underlying items within operating profit are: gains or losses on business disposals, acquisition and disposal related costs, restructuring costs, impairments and other items within operating profit classified here due to their nature and frequency.

-- Non-underlying items not in operating profit but within net profit are: net monetary gain/(loss) arising from hyperinflationary economies and significant and unusual items in net finance cost, share of profit/(loss) of joint ventures and associates and taxation.

-- Non-underlying items are: both non-underlying items within operating profit and those non-underlying items not in operating profit but within net profit.

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

Underlying operating profit and underlying operating margin mean operating profit and operating margin before the impact of non-underlying items within operating profit. Underlying operating profit represents our measure of segment profit or loss as it is the primary measure used for making decisions about allocating resources and assessing performance of the segments. The reconciliation of operating profit to underlying operating profit is as follows:

 
EUR million                                                              First Half 
(unaudited)                                                      2022                  2021 
======================================================= 
Operating profit                                                        4,500                 4,426 
Non-underlying items within operating profit (see note 
 2)                                                                       544                   421 
=======================================================  ==================== 
Underlying operating profit                                             5,044                 4,847 
=======================================================  ==================== 
Turnover                                                               29,623                25,791 
Operating margin (%)                                                     15.2                  17.2 
Underlying operating margin (%)                                          17.0                  18.8 
=======================================================  ==================== 
 

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:

 
EUR million                                                                 First Half 
(unaudited)                                                          2022                2021 
============================================================ 
Taxation                                                                   1,143                 972 
Tax impact of: 
   Non-underlying items within operating profit(a)                           102                  97 
   Non-underlying items not in operating profit but within 
    net profit(a)                                                           (63)                (34) 
============================================================  ================== 
Taxation before tax impact of non-underlying items                         1,182               1,035 
============================================================  ================== 
Profit before taxation                                                     4,359               4,369 
Non-underlying items within operating profit before 
 tax(a)                                                                      544                 421 
Non-underlying items not in operating profit but within 
 net profit before tax(a)                                                     38                  29 
Share of net (profit)/loss of joint ventures and associates                 (97)                (91) 
============================================================  ================== 
Profit before tax excluding non-underlying items before 
 tax and share of net profit/(loss) of joint ventures 
 and associates                                                            4,844               4,728 
============================================================  ================== 
Underlying effective tax rate                                              24.4%               21.9% 
============================================================  ================== 
 

(a) Refer to note 2 for further details on these items.

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:

 
EUR million                                                              First Half 
(unaudited)                             2022                                     2021 
==================================== 
Underlying profit attributable to 
 shareholders' equity 
 (see note 6)                            3,440                                                                   3,488 
Impact of translation from current 
 to constant exchange 
 rates and translational hedges           (92)                                                                       8 
Impact of price growth in excess of       (66)                                                                       - 
26% per year in 
hyperinflationary economies 
====================================  ======== 
Constant underlying earnings 
 attributable to shareholders' 
 equity                                  3,282                                                                   3,496 
====================================  ======== 
Diluted average number of share 
 units (millions)                      2,566.2                                                                 2,627.2 
====================================  ======== 
Constant underlying EPS (EUR)             1.28                                                                    1.33 
====================================  ======== 
 

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:

 
EUR million              As at                  As at 31                                         As at 
                         30 June                December                                         30 June 
                          2022                    2021                                            2021 
(unaudited) 
=============== 
Total financial 
 liabilities                   (33,961)                (30,133)                                                                (27,542) 
   Current 
    financial 
    liabilities                 (9,032)                 (7,252)                                                                 (6,720) 
   Non-current 
    financial 
    liabilities                (24,929)                (22,881)                                                                (20,822) 
Cash and cash 
 equivalents as 
 per balance 
 sheet                            5,411                   3,415                                                                   4,182 
   Cash and 
    cash 
    equivalents 
    as per cash 
    flow 
    statement                     5,274                   3,387                                                                   4,072 
   Add: bank 
    overdrafts 
    deducted 
    therein                         157                     106                                                                     110 
   Less: cash                      (20)                    (78)                                                                       - 
   and cash 
   equivalents 
   held for 
   sale(a) 
Other current 
 financial 
 assets                           1,435                   1,156                                                                     885 
Non-current 
 financial 
 asset 
 derivatives 
 that 
 relate to 
 financial 
 liabilities                         60                      52                                                                      33 
===============  ======================  ====================== 
Net debt                       (27,055)                (25,510)                                                                (22,442) 
===============  ======================  ====================== 
 

(a) Cash and cash equivalents held for sale of EUR20 million are net of bank overdrafts of EUR6 million.

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:

 
EUR million                                                         First Half 
(unaudited)                                                 2022                  2021 
================================================== 
Cash flow from operating activities                                4,344                 3,961 
Income tax paid                                                  (1,295)                 (917) 
Net capital expenditure                                            (593)                 (386) 
Net interest paid                                                  (217)                 (227) 
==================================================  ==================== 
Free cash flow                                                     2,239                 2,431 
==================================================  ==================== 
Net cash flow (used in)/from investing activities                  (432)                 (570) 
Net cash flow (used in)/from financing activities                  (924)               (4,097) 
==================================================  ==================== 
 
 
OTHER INFORMATION 
 

This document represents Unilever's half-yearly report for the purposes of the Disclosure and Transparency Rules (DTR) issued by the UK Financial Conduct Authority (DTR 4.2) and the Dutch Act on Financial Supervision, section 5:25d (8)/(9) (Half-yearly financial reports). In this context: (i) the condensed set of financial statements can be found on pages 11 to 23; (ii) pages 2 to 10 comprise the interim management report; and (iii) the Directors' responsibility statement can be found on page 23. This half-yearly report has not been reviewed in accordance with ISRE 2410 by our external auditors. No material related party transactions have taken place in the first six months of the year.

 
EXTERNAL AUDIT TER 
 

The Board of Unilever announces its intention to reappoint KPMG as its external auditor for the financial year end 31 December 2024, subject to shareholder approval at its 2024 Annual General Meeting.

This follows an extensive competitive tender process, which was overseen by the Company's Audit Committee. The selection to re-appoint KPMG was unanimously recommended by the Committee and has been approved by the Unilever Board.

Adrian Hennah, Chair of the Audit Committee, commented "We conducted a thorough and competitive tender process. Our decision to re-appoint KPMG was based on their strong performance during the tender process across a comprehensive set of criteria and our satisfaction with their effectiveness as our current auditor. We would also like to extend our thanks to all firms who participated in the thorough tender process."

 
PRINCIPAL RISK FACTORS 
 

On pages 46 to 50 of our 2021 Annual Report and Accounts we set out our assessment of the principal risk issues that would face the business under the headings: brand preference; portfolio management; climate change; plastic packaging; customer; talent; supply chain; safe and high quality products; systems and information; business transformation; economic and political instability; treasury and tax; ethical; and legal and regulatory. In our view, the nature and potential impact of such risks remain essentially unchanged as regards our performance over the second half of 2022.

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. 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 are based upon current expectations and assumptions regarding anticipated developments and other factors affecting the Group. 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. 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.

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.

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 2021 and the Unilever Annual Report and Accounts 2021.

 
ENQUIRIES 
 
 
Media : Media Relations Team                           Investors: Investor Relations 
                                                        Team 
     +44 78 2527                                       +44 20 7822 
UK    3767            lucila.zambrano@unilever.com      6830        investor.relations@unilever.com 
or   +44 77 7999 
      9683            JSibun@tulchangroup.com 
NL   +31 10 217 4844  els-de.bruin@unilever.com 
or   +31 62 375 8385  marlous-den.bieman@unilever.com 
 

There will be a web cast of the results presentation available at:

www.unilever.com/investor-relations/results-and-presentations/latest-results

 
CONSOLIDATED INCOME STATEMENT 
 

(unaudited)

 
EUR million                                                        First Half 
                                   2022                    2021                            Increase/ 
                                                                                           (Decrease) 
=========================  ===================== 
                                                                                 Current               Constant 
                                                                                  rates                  rates 
=========================  =====================                          =====================  ===================== 
 
Turnover                                  29,623                  25,791                  14.9%                  10.2% 
 
Operating profit                           4,500                   4,426                   1.7%                 (1.8%) 
 
   Which includes 
    non-underlying items 
    credits/(charges) of                   (544)                   (421) 
 
Net finance costs                          (227)                   (153) 
   Finance income                            105                      68 
   Finance costs                           (354)                   (216) 
   Pensions and similar 
    obligations                               22                     (5) 
 
Non-underlying item net 
 monetary gain/(loss) 
 arising from 
 hyperinflationary 
 economies                                  (38)                    (29) 
 
Share of net 
 profit/(loss) of joint 
 ventures and associates                      97                      91 
Other income/(loss) from 
 non-current 
 investments and 
 associates                                   27                      34 
 
Profit before taxation                     4,359                   4,369                 (0.2%)                 (3.4%) 
 
Taxation                                 (1,143)                   (972) 
   Which includes tax 
    impact of 
    non-underlying 
    items of                                  39                      63 
 
Net profit                                 3,216                   3,397                 (5.3%)                 (7.9%) 
 
Attributable to: 
=========================  =====================  ======================  ===================== 
   Non-controlling 
    interests                                311                     276 
   Shareholders' equity                    2,905                   3,121                 (6.9%)                 (9.1%) 
=========================  =====================  ======================  ===================== 
 
  Combined earnings per 
          share 
                           =====================  ======================  =====================  ===================== 
Basic earnings per share 
 (euros)                                    1.14                    1.19                 (4.7%)                 (6.9%) 
Diluted earnings per 
 share (euros)                              1.13                    1.19                 (4.7%)                 (7.0%) 
=========================  =====================  ======================  ===================== 
 
 
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 
 

(unaudited)

 
EUR million                                                                  Half Year 
                                                                    2022                   2021 
==========================================================  ===================== 
 
Net profit                                                                  3,216                  3,397 
 
Other comprehensive income 
  Items that will not be reclassified to profit or loss, 
   net of tax: 
 
    Gains/(losses) on equity instruments measured at fair 
     value through other comprehensive income                                  52                     55 
    Remeasurement of defined benefit pension plans(a)                       1,463                    968 
  Items that may be reclassified subsequently to profit 
   or loss, net of tax: 
    Gains/(losses) on cash flow hedges                                         51                    137 
    Currency retranslation gains/(losses)(b)                                1,309                    617 
 
Total comprehensive income                                                  6,091                  5,174 
==========================================================  ===================== 
 
Attributable to: 
    Non-controlling interests                                                 384                    299 
    Shareholders' equity                                                    5,707                  4,875 
==========================================================  ===================== 
 

(a) Remeasurement of defined benefit pension plans in 2022 is due to a significant decrease in liabilities as interest rates continued to rise, more than offsetting the reduction in asset values.

(b) 2022 gain is primarily due to strengthening of the US Dollar, Brazilian Real and Indian Rupee against the Euro. In 2021 the gain was largely due to strengthening of the US Dollar, British Pound, Brazilian Real and Indian Rupee against the Euro.

 
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 
 

(unaudited)

 
EUR million                          Called                                       Share                                           Unification                                           Other                                        Retained                                    Total                                             Non-                                   Total 
                                    up share                                      premium                                            reserve                                           reserves                                       profit                                                                                    controlling                               equity 
                                     capital                                      account                                                                                                                                                                                                                                        interest 
================= 
First half - 2022 
================= 
1 January 2022                                             92                                        52,844                                                (73,364)                                       (9,210)                                        46,745                                  17,107                                                     2,639               19,746 
                   ==========================================  ============================================  ======================================================  ============================================  ============================================  ======================================  ======================================================== 
Profit or loss 
 for the 
 period                                                     -                                             -                                                       -                                             -                                         2,905                                   2,905                                                       311                3,216 
Other 
comprehensive 
income, 
net of tax: 
  Gains/(losses) 
  on: 
    Equity 
     instruments                                            -                                             -                                                       -                                            44                                             -                                      44                                                         8                   52 
    Cash flow 
     hedges                                                 -                                             -                                                       -                                            48                                             -                                      48                                                         3                   51 
  Remeasurements 
   of defined 
   benefit 
   pension plans                                            -                                             -                                                       -                                             -                                         1,462                                   1,462                                                         1                1,463 
  Currency 
   retranslation 
   gains/(losses)                                           -                                             -                                                       -                                         1,240                                             8                                   1,248                                                        61                1,309 
                   ==========================================  ============================================  ======================================================  ============================================  ============================================  ======================================  ======================================================== 
Total 
 comprehensive 
 income                                                     -                                             -                                                       -                                         1,332                                         4,375                                   5,707                                                       384                6,091 
Dividends on 
ordinary 
capital                                                     -                                             -                                                       -                                             -                                       (2,195)                                 (2,195)                                                         -              (2,195) 
Repurchase of 
shares(a)                                                   -                                             -                                                       -                                         (648)                                             -                                   (648)                                                         -                (648) 
Other movements 
in treasury 
shares(b)                                                   -                                             -                                                       -                                            99                                         (107)                                     (8)                                                         -                  (8) 
Share-based 
payment credit(c)                                           -                                             -                                                       -                                             -                                            93                                      93                                                         -                   93 
Dividends paid to 
 non-controlling 
 interests                                                  -                                             -                                                       -                                             -                                             -                                       -                                                     (309)                (309) 
Hedging 
 gain/(loss) 
 transferred 
 to non-financial 
 assets                                                     -                                             -                                                       -                                         (133)                                             -                                   (133)                                                       (3)                (136) 
Other movements 
 in equity(d)                                               -                                             -                                                       -                                             2                                           216                                     218                                                        14                  232 
=================  ==========================================  ============================================  ======================================================  ============================================  ============================================  ======================================  ======================================================== 
30 June 2022                                               92                                        52,844                                                (73,364)                                       (8,558)                                        49,127                                  20,141                                                     2,725               22,866 
=================  ==========================================  ============================================  ======================================================  ============================================  ============================================  ======================================  ======================================================== 
 
First half - 2021 
================= 
1 January 2021 as 
 previously 
 reported                                                  92                                        73,472                                                (73,364)                                       (7,482)                                        22,548                                  15,266                                                     2,389               17,655 
                   ==========================================  ============================================  ======================================================  ============================================  ============================================  ======================================  ======================================================== 
Profit or loss 
 for the 
 period                                                     -                                             -                                                       -                                             -                                         3,121                                   3,121                                                       276                3,397 
Other 
comprehensive 
income, 
net of tax: 
  Gains/(losses) 
  on: 
    Equity 
    instruments                                             -                                             -                                                       -                                            67                                             -                                      67                                                      (12)                   55 
    Cash flow 
    hedges                                                  -                                             -                                                       -                                           136                                             -                                     136                                                         1                  137 
  Remeasurements 
  of defined 
  benefit pension 
  plans                                                     -                                             -                                                       -                                             -                                           968                                     968                                                         -                  968 
  Currency 
   retranslation 
   gains/(losses)                                           -                                             -                                                       -                                           576                                             7                                     583                                                        34                  617 
                   ==========================================  ============================================  ======================================================  ============================================  ============================================  ======================================  ======================================================== 
Total 
 comprehensive 
 income                                                     -                                             -                                                       -                                           779                                         4,096                                   4,875                                                       299                5,174 
Dividends on 
ordinary 
capital                                                     -                                             -                                                       -                                             -                                       (2,252)                                 (2,252)                                                         -              (2,252) 
Share capital 
reduction(e)                                                                                       (20,626)                                                       -                                             -                                        20,626                                       -                                                         -                    - 
Repurchase of 
shares(a)                                                   -                                             -                                                       -                                         (897)                                             -                                   (897)                                                         -                (897) 
Other movements 
in treasury 
shares(b)                                                   -                                             -                                                       -                                            78                                         (101)                                    (23)                                                         -                 (23) 
Share-based 
payment credit(c)                                           -                                             -                                                       -                                             -                                            82                                      82                                                         -                   82 
Dividends paid to 
 non-controlling 
 interests                                                  -                                             -                                                       -                                             -                                             -                                       -                                                     (258)                (258) 
Currency 
retranslation 
gains/(losses) 
net of 
tax                                                         -                                           (3)                                                       -                                             -                                             -                                     (3)                                                         -                  (3) 
Hedging 
gain/(loss) 
transferred 
to non-financial 
assets                                                      -                                             -                                                       -                                          (89)                                             -                                    (89)                                                       (1)                 (90) 
Other movements 
 in equity(d)                                               -                                             -                                                       -                                          (83)                                           140                                      57                                                        14                   71 
=================  ==========================================  ============================================  ======================================================  ============================================  ============================================  ======================================  ======================================================== 
 30 June 2021                                              92                                        52,843                                                (73,364)                                       (7,694)                                        45,139                                  17,016                                                     2,443               19,459 
=================  ==========================================  ============================================  ======================================================  ============================================  ============================================  ======================================  ======================================================== 
 

(a) Repurchase of shares reflects the cost of acquiring ordinary shares as part of the share buyback programmes announced on 29 April 2021 and 10 February 2022.

(b) 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.

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

(d) The 2022 movement consists primarily of a hyperinflation adjustment of EUR235 million. 2021 includes a hyperinflation adjustment of EUR137 million and EUR83 million related to the Welly acquisition.

(e) Share premium has been adjusted to reflect the legal share capital of the PLC company, which reduced by GBP18,400 million following court approval on 15 June 2021.

 
   CONSOLIDATED BALANCE SHEET 
 

(unaudited)

 
EUR million                                                As at                  As at                  As at 
                                                          30 June              31 December              30 June 
                                                            2022                   2021                   2021 
 
Non-current assets 
 
Goodwill                                                          21,571                 20,330                 19,239 
Intangible assets                                                 18,935                 18,261                 16,064 
Property, plant and equipment                                     10,733                 10,347                 10,521 
Pension asset for funded schemes in surplus                        6,581                  5,119                  4,017 
Deferred tax assets                                                1,559                  1,465                  1,320 
Financial assets                                                   1,286                  1,198                    960 
Other non-current assets                                           1,023                    974                  1,032 
                                                   =====================  ===================== 
                                                                  61,688                 57,694                 53,153 
                                                   =====================  ===================== 
Current assets 
 
Inventories                                                        5,893                  4,683                  4,766 
Trade and other current receivables                                7,309                  5,422                  6,478 
Current tax assets                                                   324                    324                    272 
Cash and cash equivalents                                          5,411                  3,415                  4,182 
Other financial assets                                             1,435                  1,156                    885 
Assets held for sale                                               2,832                  2,401                    828 
                                                   =====================  ===================== 
                                                                  23,204                 17,401                 17,411 
                                                   =====================  ===================== 
 
Total assets                                                      84,892                 75,095                 70,564 
=================================================  =====================  ===================== 
 
Current liabilities 
 
Financial liabilities                                              9,032                  7,252                  6,720 
Trade payables and other current liabilities                      17,151                 14,861                 14,799 
Current tax liabilities                                            1,327                  1,365                  1,597 
Provisions                                                           640                    480                    514 
Liabilities held for sale                                            788                    820                    158 
                                                   =====================  ===================== 
                                                                  28,938                 24,778                 23,788 
                                                   =====================  ===================== 
Non-current liabilities 
 
Financial liabilities                                             24,929                 22,881                 20,822 
Non-current tax liabilities                                          163                    148                    143 
Pensions and post-retirement healthcare 
liabilities: 
   Funded schemes in deficit                                         362                    831                    832 
   Unfunded schemes                                                1,189                  1,295                  1,298 
Provisions                                                           621                    611                    592 
Deferred tax liabilities                                           5,523                  4,530                  3,361 
Other non-current liabilities                                        301                    275                    269 
                                                   =====================  ===================== 
                                                                  33,088                 30,571                 27,317 
                                                   =====================  ===================== 
 
Total liabilities                                                 62,026                 55,349                 51,105 
                                                   =====================  ===================== 
 
Equity 
Shareholders' equity                                              20,141                 17,107                 17,016 
Non-controlling interests                                          2,725                  2,639                  2,443 
                                                   =====================  ===================== 
Total equity                                                      22,866                 19,746                 19,459 
                                                   =====================  ===================== 
 
Total liabilities and equity                                      84,892                 75,095                 70,564 
=================================================  =====================  ===================== 
 
 
CONSOLIDATED CASH FLOW STATEMENT 
 

( unaudited)

 
EUR million                                                      First Half 
                               2022                                             2021 
==================== 
 
Net profit                              3,216                                                                    3,397 
Taxation                                1,143                                                                      972 
Share of net 
 (profit)/loss of 
 joint 
 ventures/associates 
 and other 
 (income)/loss from 
 non-current 
 investments 
 and associates                         (124)                                                                    (125) 
Net monetary 
 (gain)/loss arising 
 from 
 hyperinflationary 
 economies                                 38                                                                       29 
Net finance costs                         227                                                                      153 
                      ======================= 
Operating profit                        4,500                                                                    4,426 
                      ======================= 
 
Depreciation, 
 amortisation and 
 impairment                               842                                                                      860 
Changes in working 
 capital                              (1,116)                                                                  (1,233) 
Pensions and similar 
 obligations less 
 payments                                (49)                                                                    (126) 
Provisions less 
 payments                                 135                                                                     (29) 
Elimination of                                                                                                       - 
(profits)/losses on 
disposals                                (28) 
Non-cash charge for 
 share-based 
 compensation                              93                                                                       82 
Other adjustments                        (33)                                                                     (19) 
                      ======================= 
Cash flow from 
 operating 
 activities                             4,344                                                                    3,961 
                      ======================= 
 
Income tax paid                       (1,295)                                                                    (917) 
 
Net cash flow from 
 operating 
 activities                             3,049                                                                    3,044 
====================  ======================= 
 
Interest received                         106                                                                       61 
Net capital 
 expenditure                            (593)                                                                    (386) 
Other acquisitions 
 and disposals                              2                                                                    (275) 
Other investing 
 activities                                53                                                                       30 
 
Net cash flow (used 
 in)/from investing 
 activities                             (432)                                                                    (570) 
====================  ======================= 
 
Dividends paid on 
 ordinary share 
 capital                              (2,176)                                                                  (2,277) 
Interest paid                           (323)                                                                    (288) 
Change in financial 
 liabilities                            2,500                                                                    (430) 
Repurchase of shares                    (648)                                                                    (845) 
Other financing 
 activities                             (277)                                                                    (257) 
 
Net cash flow (used 
 in)/from financing 
 activities                             (924)                                                                  (4,097) 
====================  ======================= 
 
 
Net 
 increase/(decrease) 
 in cash and cash 
 equivalents                            1,693                                                                  (1,623) 
====================  ======================= 
 
Cash and cash 
 equivalents at the 
 beginning of the 
 period                                 3,387                                                                    5,475 
 
Effect of foreign 
 exchange rate 
 changes                                  194                                                                      220 
 
Cash and cash 
 equivalents at the 
 end of the period                      5,274                                                                    4,072 
====================  ======================= 
 
 
NOTES TO THE CONDENSED FINANCIAL STATEMENTS 
 

(unaudited)

 
1 ACCOUNTING INFORMATION AND POLICIES 
 

The condensed interim financial statements are prepared in accordance with IAS 34 'Interim Financial Reporting' as issued by the International Accounting Standard Board (IASB), as adopted for use in the UK and are consistent with the year ended 31 December 2021.

Management have produced forecasts which have been modelled for different plausible scenarios. These scenarios confirm the Group is able to generate profits and cash in the year ended 31 December 2022 and beyond. As a result, the Directors have a reasonable expectation that the Group has adequate resources to meet its obligations as they fall due for a period of at least 12 months from the date of signing these financial statements. 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 consolidated income statement on page 11, the consolidated statement of comprehensive income on page 11, the consolidated statement of changes in equity on page 12 and the consolidated cash flow statement on page 14 are translated at exchange rates current in each period. The consolidated balance sheet on page 13 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. The comparative figures for the financial year ended 31 December 2021 are not Unilever PLC's statutory accounts for that financial year. Those accounts of Unilever for the year ended 31 December 2021 have been reported on by the Group's auditor and delivered to the Registrar of Companies. The report of the auditor on these accounts was (i) unqualified, (ii) did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report, and (iii) did not contain a statement under section 498 (2) or (3) of the UK Companies Act 2006.

Change in reporting segments

In January 2022, the Group announced a new, simpler, more category focused operating model which came into effect on 1 July 2022. This model is structured around five Business Groups: Beauty & Wellbeing, Personal Care, Home Care, Nutrition, and Ice Cream. Each Business Group will be fully responsible for their strategy, growth, and profit delivery globally.

From 1 July 2022 our segmental information will be based on the five Business Groups as this reflects how the Group's performance will be monitored and managed going forward.

 
2 SIGNIFICANT ITEMS WITHIN THE INCOME STATEMENT 
 

Non-underlying items

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

-- Non-underlying items within operating profit are gains or losses on business disposals, acquisition and disposal related costs, restructuring costs, impairment and other items within operating profit classified here due to their nature and frequency.

-- Non-underlying items not in operating profit but within net profit are net monetary gain/(loss) arising from hyperinflationary economies and significant and unusual items in net finance cost, share of profit/(loss) of joint ventures and associates and taxation.

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.

 
EUR million                                                                               First Half 
                                                        2022                                                                     2021 
=====================  ======================================================================= 
   Acquisition and 
    disposal-related 
    credits/(costs)                                                                       (87)                                                                    (122) 
   Gain/(loss) on 
    disposal of group 
    companies                                                                               21                                                                        7 
   Restructuring 
    costs                                                                                (359)                                                                    (306) 
   Impairments                                                                             (4)                                                                        - 
   Other(a)                                                                              (115)                                                                        - 
                       ======================================================================= 
Non-underlying items 
 within operating 
 profit before 
 tax                                                                                     (544)                                                                    (421) 
 
Tax on non-underlying 
 items within 
 operating profit                                                                          102                                                                       97 
                       ======================================================================= 
Non-underlying items 
 within operating 
 profit after 
 tax                                                                                     (442)                                                                    (324) 
=====================  ======================================================================= 
 
   Net monetary 
    gain/(loss) 
    arising from 
    hyperinflationary 
    economies                                                                             (38)                                                                     (29) 
                       ======================================================================= 
Non-underlying items 
 not in operating 
 profit but within 
 net profit before 
 tax                                                                                      (38)                                                                     (29) 
 
Tax impact of 
non-underlying items 
not in operating 
profit but within net 
profit: 
   Taxes related to 
    the UK tax audit 
    of intangible 
    income 
    and centralised 
    services                                                                                 -                                                                      (6) 
   Taxes related to                                                                                                                                                   - 
   the separation of 
   ekaterra                                                                               (39) 
   Hyperinflation 
    adjustment for 
    Argentina 
    deferred tax                                                                          (24)                                                                     (28) 
                       ======================================================================= 
Non-underlying items 
 not in operating 
 profit but within 
 net profit after tax                                                                    (101)                                                                     (63) 
=====================  ======================================================================= 
 
Non-underlying items 
 after tax(b)                                                                            (543)                                                                    (387) 
=====================  ======================================================================= 
 
Attributable to: 
=====================  ======================================================================= 
   Non-controlling 
    interests                                                                              (8)                                                                     (20) 
   Shareholders' 
    equity                                                                               (535)                                                                    (367) 
=====================  ======================================================================= 
 

(a) Comprised of EUR40 million of asset write-downs relating to our businesses in Russia and Ukraine and EUR75 million relating to legal provisions for ongoing competition investigations.

(b) Non-underlying items after tax is calculated as non-underlying items within operating profit after tax plus non-underlying items not in operating profit but within net profit after tax.

 
3 SEGMENT INFORMATION - DIVISIONS 
 
 
     Second Quarter             Beauty &                              Home                                            Foods &                              Total 
                                Personal                              Care                                           Refreshment 
                                  Care 
Turnover (EUR million) 
   2021                                  5,367                                             2,575                                             5,509                13,451 
   2022                                  6,419                                             3,092                                             6,299                15,810 
Change (%)                                19.6                                              20.1                                              14.3                  17.5 
Impact of: 
   Acquisitions (%)                        1.6                                                 -                                                 -                   0.6 
   Disposals (%)                         (0.1)                                                 -                                             (0.2)                 (0.1) 
   Currency-related 
    items (%), of which:                   9.1                                               7.0                                               6.0                   7.5 
      Exchange rates 
       changes (%)                         8.2                                               4.9                                               4.6                   6.1 
      Extreme price 
       growth in 
       hyperinflationary 
       markets* (%)                        0.8                                               2.0                                               1.4                   1.3 
Underlying sales growth 
 (%)                                       8.0                                              12.2                                               8.1                   8.8 
========================  ====================  ================================================  ================================================ 
   Price* (%)                             10.5                                              16.6                                               9.4                  11.2 
   Volume (%)                            (2.3)                                             (3.8)                                             (1.2)                 (2.1) 
========================  ====================  ================================================  ================================================ 
 
 
       First Half               Beauty &                               Home                               Foods &                 Total 
                                 Personal                              Care                             Refreshment 
                                   Care 
Turnover (EUR million) 
   2021                                  10,407                                             5,182                 10,202                 25,791 
   2022                                  12,176                                             6,024                 11,423                 29,623 
Change (%)                                 17.0                                              16.2                   12.0                   14.9 
Impact of: 
   Acquisitions (%)                         1.6                                                 -                    0.2                    0.7 
   Disposals (%)                            0.0                                                 -                  (0.2)                  (0.1) 
   Currency-related 
    items (%), of which:                    7.1                                               5.0                    4.4                    5.6 
      Exchange rate 
       changes (%)                          6.5                                               3.7                    3.5                    4.7 
      Extreme price 
       growth in 
       hyperinflationary 
       markets* (%)                         0.6                                               1.3                    0.9                    0.8 
Underlying sales growth 
 (%)                                        7.5                                              10.7                    7.3                    8.1 
========================  =====================  ================================================  ===================== 
   Price* (%)                               9.0                                              14.5                    8.3                    9.8 
   Volume (%)                             (1.3)                                             (3.4)                  (0.9)                  (1.6) 
========================  =====================  ================================================  ===================== 
 
Operating profit (EUR 
million) 
   2021                                   2,089                                               655                  1,682                  4,426 
   2022                                   2,169                                               609                  1,722                  4,500 
 
Underlying operating 
profit (EUR 
million) 
   2021                                   2,215                                               727                  1,905                  4,847 
   2022                                   2,378                                               723                  1,943                  5,044 
 
Operating margin (%) 
   2021                                    20.1                                              12.6                   16.5                   17.2 
   2022                                    17.8                                              10.1                   15.1                   15.2 
 
Underlying operating 
margin (%) 
   2021                                    21.3                                              14.0                   18.7                   18.8 
   2022                                    19.5                                              12.0                   17.0                   17.0 
========================  =====================  ================================================  ===================== 
 

* 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.

 
4 SEGMENT INFORMATION - GEOGRAPHICAL AREA 
 
 
 
     Second Quarter              Asia /                               The                                              Europe                              Total 
                                 AMET /                             Americas 
                                   RUB 
 
 
Turnover (EUR million) 
   2021                                  6,081                                             4,216                                             3,154                13,451 
   2022                                  7,061                                             5,414                                             3,335                15,810 
Change (%)                                16.1                                              28.4                                               5.8                  17.5 
Impact of: 
   Acquisitions (%)                        0.2                                               1.3                                               0.6                   0.6 
   Disposals (%)                         (0.2)                                                 -                                             (0.1)                 (0.1) 
   Currency-related 
    items (%), of which:                   6.6                                              13.5                                               0.5                   7.5 
      Exchange rates 
       changes (%)                         4.9                                              11.7                                               0.5                   6.1 
      Extreme price                        1.6                                               1.6                                                 -                   1.3 
      growth in 
      hyperinflationary 
      markets* (%) 
Underlying sales growth 
 (%)                                       9.0                                              11.7                                               4.6                   8.8 
========================  ====================  ================================================  ================================================ 
   Price* (%)                             11.9                                              13.6                                               6.5                  11.2 
   Volume (%)                            (2.6)                                             (1.7)                                             (1.8)                 (2.1) 
========================  ====================  ================================================  ================================================ 
 
 
 
       First Half                Asia /                               The                                              Europe                              Total 
                                 AMET /                             Americas 
                                   RUB 
 
 
Turnover (EUR million) 
   2021                                 12,040                                             8,022                                             5,729                25,791 
   2022                                 13,700                                             9,941                                             5,982                29,623 
Change (%)                                13.8                                              23.9                                               4.4                  14.9 
Impact of: 
   Acquisitions (%)                        0.3                                               1.4                                               0.7                   0.7 
   Disposals (%)                         (0.2)                                                 -                                             (0.1)                 (0.1) 
   Currency- related 
    items (%), of which:                   4.2                                              10.8                                               0.9                   5.6 
      Exchange rates 
       changes (%)                         3.3                                               9.3                                               0.9                   4.7 
      Extreme price                        0.9                                               1.4                                                 -                   0.8 
      growth in 
      hyperinflationary 
      markets* (%) 
Underlying sales growth 
 (%)                                       9.0                                              10.4                                               2.9                   8.1 
========================  ====================  ================================================  ================================================ 
   Price* (%)                             10.2                                              11.9                                               6.0                   9.8 
   Volume (%)                            (1.1)                                             (1.4)                                             (2.9)                 (1.6) 
========================  ====================  ================================================  ================================================ 
 
Operating profit (EUR 
million) 
   2021                                  2,289                                             1,303                                               834                 4,426 
   2022                                  2,442                                             1,443                                               615                 4,500 
Underlying operating 
profit (EUR 
million) 
   2021                                  2,413                                             1,429                                             1,005                 4,847 
   2022                                  2,615                                             1,575                                               854                 5,044 
Operating margin (%) 
   2021                                   19.0                                              16.2                                              14.6                  17.2 
   2022                                   17.8                                              14.5                                              10.3                  15.2 
Underlying operating 
margin (%) 
   2021                                   20.0                                              17.8                                              17.5                  18.8 
   2022                                   19.1                                              15.8                                              14.3                  17.0 
========================  ====================  ================================================  ================================================ 
 

* 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.

 
5 TAXATION 
 

The effective tax rate for the first half was 26.8% compared to 22.7% in 2021. 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:

 
EUR million                           First Half 2022                                        First Half 2021 
 
                        Before              Tax              After             Before              Tax              After 
                          tax            (charge)/             tax               tax            (charge)/             tax 
                                           credit                                                 credit 
=================  ================                                       ================  =================  ================ 
 
Gains/(losses) 
on: 
   Equity 
    instruments 
    at fair value 
    through other 
    comprehensive 
    income                       49                  3                52                56                (1)                55 
   Cash flow 
    hedges                       26                 25                51               143                (6)               137 
Remeasurements of 
 defined benefit 
 pension plans(a)             2,037              (574)             1,463             1,404              (436)               968 
Currency 
 retranslation 
 gains/(losses)               1,317                (8)             1,309               653               (36)               617 
=================  ================  =================  ================  ================  ================= 
Other 
 comprehensive 
 income                       3,429              (554)             2,875             2,256              (479)             1,777 
=================  ================  =================  ================  ================  ================= 
 

(a) Remeasurement of defined benefit pension plans in 2022 is due to a significant decrease in liabilities as interest rates continued to rise, more than offsetting the reduction in asset values.

 
6 EARNINGS PER SHARE 
 

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 six months were calculated as follows:

 
                                                                2022                    2021 
===================================================== 
EPS - Basic 
=====================================================  ======================  ====================== 
Net profit attributable to shareholders' equity (EUR 
 million)                                                               2,905                   3,121 
Average number of shares (millions of share units)                    2,557.3                 2,618.7 
EPS - basic (EUR)                                                        1.14                    1.19 
=====================================================  ====================== 
 
 
EPS - Diluted 
                                                       ====================== 
Net profit attributable to shareholders' equity (EUR 
 million)                                                               2,905                   3,121 
Diluted average number of share units (millions)                      2,566.2                 2,627.2 
EPS - diluted (EUR)                                                      1.13                    1.19 
=====================================================  ====================== 
 
 
Underlying EPS 
                                                         ====================== 
Net profit attributable to shareholders' equity (EUR 
 million)                                                                 2,905                   3,121 
Post tax impact of non-underlying items attributable 
 to shareholders' equity (see note 2)                                       535                     367 
                                                         ====================== 
Underlying profit attributable to shareholders' equity                    3,440                   3,488 
Diluted average number of share units (millions)                        2,566.2                 2,627.2 
Underlying EPS - diluted (EUR)                                             1.34                    1.33 
=======================================================  ====================== 
 

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:

 
                                                                       Millions 
============================================================== 
Number of shares at 31 December 2021 (net of treasury shares)                  2,561.0 
-------------------------------------------------------------- 
Shares repurchased under the share buyback programme                            (15.5) 
Net movement in shares under incentive schemes                                     2.0 
============================================================== 
Number of shares at 30 June 2022                                               2,547.5 
============================================================== 
 
 
7 SHARE BUYBACK PROGRAMME 
 

On 10 February 2022 we announced our intention to start a share buyback programme of up to EUR3 billion to be completed over 2022 and 2023. On 23 March 2022 we announced we would commence the first tranche of this buyback programme for an aggregate market value equivalent to EUR750 million. As at 30 June 2022 the Group had repurchased 15,508,723 ordinary shares. Total consideration for the repurchase of shares was EUR648 million which is recorded within other reserves. The first tranche for an aggregate market value of EUR750 million completed on 22 July 2022. Between 23 March 2022 and 22 July 2022, a total of 17,802,472 Unilever PLC ordinary shares were purchased.

 
8 FINANCIAL INSTRUMENTS 
 

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 2022 and 2021. The Group's cash resources and other financial assets are shown below.

 
EUR million                                                   30 June 2022                                                                        31 December 2021                                                          30 June 2021 
================== 
                                     Current                                  Non-current                    Total        Current                    Non-current                    Total         Current                    Non-current                    Total 
==================  =========================================                                                          =============  =========================================  ============  =============  =========================================  ============ 
Cash and cash 
equivalents 
   Cash at bank 
    and in hand                                         2,730                                          -        2,730          2,505                                          -         2,505          2,625                                          -         2,625 
   Short-term                                                                                          -                                                                      -                                                                       - 
   deposits(a)                                          2,481                                                   2,481            811                                                      811          1,411                                                    1,411 
   Other cash                                                                                          -                                                                      -                                                                       - 
   equivalents                                            200                                                     200             99                                                       99            146                                                      146 
                    =========================================  =========================================  ===========  =============  =========================================  ============  =============  ========================================= 
                                                        5,411                                          -        5,411          3,415                                          -         3,415          4,182                                          -         4,182 
                    =========================================  =========================================  ===========  =============  =========================================  ============  =============  ========================================= 
 
Other financial 
assets 
   Financial 
    assets at 
    amortised 
    cost(b)                                               756                                        220          976            750                                        208           958            514                                        148           662 
   Financial 
    assets at fair 
    value through 
    other 
    comprehensive 
    income(c)                                               -                                        547          547              1                                        526           527              9                                        413           422 
   Financial 
   assets at fair 
   value through 
   profit 
   or loss: 
      Derivatives 
       that relate 
       to 
       financial 
       liabilities                                        264                                         60          324             76                                         52           128             40                                         32            72 
      Other(d)                                            415                                        459          874            329                                        412           741            322                                        367           689 
                    =========================================  =========================================  ===========  =============  =========================================  ============  =============  ========================================= 
                                                        1,435                                      1,286        2,721          1,156                                      1,198         2,354            885                                        960         1,845 
                    =========================================  =========================================  ===========  =============  =========================================  ============  =============  ========================================= 
Total financial 
 assets(e)                                              6,846                                      1,286        8,132          4,571                                      1,198         5,769          5,067                                        960         6,027 
==================  =========================================  =========================================  ===========  =============  =========================================  ============  =============  ========================================= 
 
   (a)       Short-term deposits typically have a maturity of up to 3 months. 

(b) Current financial assets at amortised cost include short term deposits with banks with maturities longer than three months excluding deposits which are part of a recognised cash management process and loans to joint venture entities. Non-current financial assets at amortised cost include judicial deposits of EUR195 million (31 December 2021: EUR157 million, 30 June 2021: EUR107 million).

(c) Included within non-current financial assets at fair value through other comprehensive income are equity investments of EUR540 million (31 December 2021: EUR521 million, 30 June 2021: EUR408 million).

(d) Other Financial assets at fair value through profit or loss include money market funds, marketable securities, other capital market instruments and investments in companies and financial institutions in North America, North Asia, South Asia and Europe.

   (e)      Financial assets exclude trade and other current receivables. 

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.

 
EUR million                               Fair value                                   Carrying amount 
====================== 
                            As at           As at           As at           As at           As at           As at 
                            30 June       31 December       30 June         30 June       31 December       30 June 
                             2022            2021            2021            2022            2021            2021 
======================                                                  ==============  ==============  ============== 
Financial assets 
Cash and cash 
 equivalents                     5,411           3,415           4,182           5,411           3,415           4,182 
Financial assets at 
 amortised 
 cost                              976             958             662             976             958             662 
Financial assets at 
 fair value 
 through other 
 comprehensive income              547             527             422             547             527             422 
Financial assets at 
fair value 
through profit and 
loss: 
   Derivatives                     324             128              72             324             128              72 
   Other                           874             741             689             874             741             689 
                        ==============  ==============  ==============  ==============  ============== 
                                 8,132           5,769           6,027           8,132           5,769           6,027 
Financial liabilities 
Bank loans and 
 overdrafts                      (540)           (402)           (593)           (540)           (402)           (593) 
Bonds and other loans         (30,089)        (29,133)        (26,587)        (31,007)        (27,621)        (24,683) 
Lease liabilities              (1,585)         (1,649)         (1,694)         (1,585)         (1,649)         (1,694) 
Derivatives                      (548)           (184)           (224)           (548)           (184)           (224) 
Other financial 
 liabilities                     (281)           (277)           (348)           (281)           (277)           (348) 
                        ==============  ==============  ==============  ==============  ============== 
                              (33,043)        (31,645)        (29,446)        (33,961)        (30,133)        (27,542) 
======================  ==============  ==============  ==============  ==============  ============== 
 
 
EUR million                      Level                                  Level                                  Level                                   Level                                     Level                                     Level                                     Level                                     Level                                     Level 
                                   1                                      2                                      3                                        1                                         2                                         3                                         1                                         2                                         3 
                                                                 As at 30 June 2022                                                                                                        As at 31 December                                                                                                             As at 30 June 2021 
                                                                                                                                                                                                  2021 
===============  ===================================================================================================================  ============================================================================================================================ 
Assets at fair 
value 
Financial 
 assets at fair 
 value through 
 other 
 comprehensive 
 income                                             11                                      3                                    533                                         6                                         3                                       518                                         7                                         3                                       412 
Financial 
assets at 
fair value 
through profit 
or loss: 
Derivatives(a)                                       -                                    505                                      -                                         -                                       289                                         -                                         -                                       187                                         - 
Other                                              420                                      -                                    454                                       331                                         -                                       410                                       323                                         -                                       366 
Liabilities at 
fair 
value 
Derivatives(b)                                       -                                  (729)                                      -                                         -                                     (235)                                         -                                         -                                     (311)                                         - 
Contingent 
 consideration                                       -                                      -                                  (175)                                         -                                         -                                     (180)                                         -                                         -                                     (159) 
===============  =====================================  =====================================  =====================================  ========================================  ========================================  ========================================  ========================================  ======================================== 
 

(a) Includes EUR181 million (31 December 2021: EUR161 million, 30 June 2021: EUR115 million) of derivatives reported within trade receivables that hedge trading activities.

(b) Includes EUR181 million (31 December 2021: EUR51 million, 30 June 2021: EUR87 million) of derivatives reported within trade payables that hedge trading activities.

There were no significant changes in classification of fair value of financial assets and financial liabilities since 31 December 2021. There were also no significant movements between the fair value hierarchy classifications since 31 December 2021.

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.

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 2021.

 
9 ASSETS AND LIABILITIES HELD FOR SALE 
 

On 18 November 2021, Unilever announced that it had entered into an agreement to sell its global tea business, ekaterra, to CVC Capital Partners Fund VIII. This deal was completed on 1 July 2022 for consideration of EUR4.7 billion which is subject to final working capital adjustments. As a result, the assets and liabilities of ekaterra remain classified as held for sale as at 30 June 2022.

Following the classification of assets and liabilities as held for sale, they are recognised as current on the balance sheet.

 
                                                  30 June                                                                  30 June                                          30 June                31 December 
                                                    2022                                                                     2022                                             2022                     2021 
                                                                                                                                                                                                      Total 
                                                  ekaterra                                                                  Others                                           Total 
Property, plant 
 and equipment 
 held 
 for sale                                                                               -                                                                        2                        2                        2 
 
Non-Current 
assets 
Goodwill and 
 intangible 
 assets                                                                               927                                                                        2                      929                      901 
Property, plant 
 and equipment                                                                        471                                                                       22                      493                      447 
Deferred tax                                                                          609                                                                        -                      609                      329 
assets 
Other                                                                                  26                                                                        -                       26                       25 
non-current 
assets 
                  =======================================================================  =======================================================================  ======================= 
                                                                                    2,033                                                                       24                    2,057                    1,702 
                  =======================================================================  =======================================================================  ======================= 
Current assets 
Inventories                                                                           337                                                                        -                      337                      258 
Trade and other                                                                       392                                                                        -                      392                      336 
receivables 
Current tax                                                                            13                                                                        -                       13                       11 
assets 
Cash and cash                                                                          26                                                                        -                       26                       90 
equivalents 
Other current                                                                           5                                                                        -                        5                        2 
assets 
                  =======================================================================  =======================================================================  ======================= 
                                                                                      773                                                                        -                      773                      697 
                  =======================================================================  =======================================================================  ======================= 
Assets held for 
 sale                                                                               2,806                                                                       26                    2,832                    2,401 
                  =======================================================================  =======================================================================  ======================= 
 
Current 
 liabilities 
Trade payables                                                                        646                                                                        -                      646                      652 
 and other 
 current 
 liabilities 
Current tax                                                                             9                                                                        -                        9                        9 
 liabilities 
Financial                                                                              31                                                                        -                       31                       49 
 liabilities 
Provisions                                                                             13                                                                        -                       13                        8 
                  =======================================================================  =======================================================================  ======================= 
                                                                                      699                                                                        -                      699                      718 
                  =======================================================================  =======================================================================  ======================= 
Non-Current 
 liabilities 
Pensions and                                                                           12                                                                        -                       12                       12 
 post-retirement 
 healthcare 
 liabilities 
Financial                                                                              29                                                                        -                       29                       31 
 Liabilities 
Other                                                                                   1                                                                        -                        1                        2 
 non-current 
 liabilities 
Deferred tax                                                                           47                                                                        -                       47                       57 
 liabilities 
                  =======================================================================  =======================================================================  ======================= 
                                                                                       89                                                                        -                       89                      102 
                  =======================================================================  =======================================================================  =======================  ======================= 
Liabilities held                                                                      788                                                                        -                      788                      820 
 for sale 
----------------  =======================================================================  =======================================================================  ======================= 
 

On disposal of an asset or disposal group, the associated currency translation difference, including amounts previously reported within equity, is reclassified to the income statement as part of the gain or loss on disposal. This is estimated to be a EUR63 million loss.

 
10 DIVIDENDS 
 

The Board has declared a quarterly interim dividend for Q2 2022 of GBP0.3633 per Unilever PLC ordinary share or EUR0.4268 per Unilever PLC ordinary share at the applicable exchange rate issued by WM/Reuters on 22 July 2022.

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

 
Per Unilever PLC ordinary share (traded on the        GBP 0.3633 
 London Stock Exchange): 
Per Unilever PLC ordinary share (traded on Euronext 
 in Amsterdam):                                       EUR 0.4268 
Per Unilever PLC American Depositary Receipt:         US$ 0.4343 
 

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

22 July 2022.

US dollar cheques for the quarterly interim dividend will be mailed on 1 September 2022 to holders of record at the close of business on 5 August 2022.

The quarterly dividend calendar for the remainder of 2022 will be as follows:

 
                  Announcement   Ex-Dividend    Record Date   Payment Date 
                      Date           Date 
                                                              1 September 
Q2 2022 Dividend  26 July 2022  4 August 2022  5 August 2022      2022 
 
                   27 October    17 November    18 November    9 December 
Q3 2022 Dividend      2022           2022           2022          2022 
================  ============  =============  ============= 
 
 
11 EVENTS AFTER THE BALANCE SHEET DATE 
 

There were no material post balance sheet events other than those mentioned elsewhere in this report.

 
DIRECTORS' RESPONSIBILITY STATEMENT 
 

The Directors declare that, to the best of their knowledge:

-- this condensed set of interim financial statements, which have been prepared in accordance with IAS 34 'Interim Financial Reporting', as issued by the International Accounting Standard Board and endorsed and adopted by the UK and the EU gives a true and fair view of the assets, liabilities, financial position and profit or loss of Unilever; and

-- the interim management report gives a fair review of the information required pursuant to regulations 4.2.7 and 4.2.8 of the Disclosure and Transparency Rules (DTR) issued by the UK Financial Conduct Authority and section 5:25d (8)/(9) of the Dutch Act on Financial Supervision (Wet op het financieel toezicht).

Unilever's Directors are listed in the Annual Report and Accounts for 2021.

Details of all current Directors are available on our website at www.unilever.com

By order of the Board

   Alan Jope                                                     Graeme Pitkethly 
   Chief Executive Officer                                 Chief Financial Officer 

26 July 2022

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