false2021-06-300000217410--12-312021Q2The 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. 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. Repurchase of shares reflects the cost of acquiring ordinary shares as part of the share buyback programmes announced on 29 April 2021.2021 includes a hyperinflation adjustment of €137 million and €83 million related to the Welly acquisition. 2020 includes €163 million paid for purchase of the non-controlling interest in Unilever Malaysia. Remeasurement of defined benefit pension plans in 2021 is driven by positive investment returns and increase in interest rates.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.Includes €115 million (31 December 2020: €78 million, 30 June 2020: €103 million) derivatives, reported within trade receivables, that hedge trading activities. Includes €(87) million (31 December 2020: € (103) million, 30 June 2020: €(111) million) derivatives, reported within trade payables, that hedge trading activities. 2021 gain is primarily due to strengthening of the US Dollar, British Pound, Brazilian Real and Indian Rupee against the Euro. 2020 loss is due to weakening of the Brazilian Real, Mexican Peso, Indian Rupee, South Korean Won and Russian Ruble against the Euro. Consideration for the Main Horlicks Acquisition included the issuance of shares in a group subsidiary, Hindustan Unilever Limited, which resulted in a net gain being recognised within equity. 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.Short-term deposits typically have maturity of up to 3 months. 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 €107 million (31 December 2020: €101 million, 30 June 2020: €94 million). Included within non-current financial assets at fair value through other comprehensive income are equity investments of €408 million (31 December 2020: €356 million, 30 June 2020: €284 million). Current other financial assets at fair value through profit or loss include A- or higher rated money and capital market instruments. Included within non-current financial assets at fair value through profit or loss are assets in a trust to fund benefit obligations in the US, an option over non-controlling interest in a subsidiary in Hong Kong and investments in a number of companies and financial institutions in North America, North Asia, South Asia and Europe. Financial assets exclude trade and other current receivables. 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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 
FORM 6-K
 
 
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
OF THE SECURITIES EXCHANGE ACT OF 1934
For the month of August, 2021
Commission File
Number: 001-04546
 
 
UNILEVER PLC
(Translation of registrant’s name into English)
 
 
UNILEVER HOUSE, BLACKFRIARS, LONDON, ENGLAND
(Address of principal executive office)
 
 
Indicate by check mark whether the registrant files or will file annual reports
under cover of Form 20-F or Form 40-F.
Form
20-F  ☒            Form
40-F  ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper
as permitted by Regulation S-T Rule 101(b)(1):  ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper
as permitted by Regulation S-T Rule 101(b)(7):  ☐
 
 
 

Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
  UNILEVER PLC
 
/S/ R SOTAMAA
BY   R SOTAMAA
  CHIEF LEGAL OFFICER AND GROUP SECRETARY
Date:
5
August 2021

2021 FIRST HALF YEAR RESULTS
Performance highlights
(unaudited)
 
Underlying performance
   
GAAP measures
 
          
vs 2020
              
vs 2020
 
First Half
                                     
Underlying sales growth (USG)
             5.4   Turnover    25.8bn       0.3
Underlying operating margin
     18.8     (100 )bps    Operating margin      17.2     (100 )bps 
Underlying earnings per share
   1.33       (2.0 )%    Diluted earnings per share    1.19       (5.0 )% 
       
Quarterly dividend payable in September 2021
 
                 €0.4268 per share  
First half highlights
 
   
Underlying sales growth of 5.4%, with 4.0% volume and 1.3% price. Price growth stepped up in Q2
 
   
Turnover increased 0.3% including a positive impact of 1.4% from acquisitions net of disposals and negative impact of 6.1% from currency related items
 
   
Underlying operating margin of 18.8%, a decrease of 100bps driven by investment behind our brands and input cost inflation
 
   
Underlying earnings per share down 2.0%, including a negative impact of 6.3% from currency
 
   
Free cash flow of €2.4 billion, compared to €2.9 billion in the first half of 2020
 
   
Quarterly shareholder dividend of €0.4268 per share and share buyback programme of up to €3 billion underway
Alan Jope: Chief Executive Officer statement
“Unilever has delivered a strong first half, with underlying sales growth of 5.4% driven by our continued focus on operational excellence.
We are making good progress against the strategic choices outlined earlier this year, including the development of our portfolio into high growth spaces. Prestige Beauty and Functional Nutrition grew strongly and we recently announced the acquisition of digitally-native skin care brand Paula’s Choice. The operational separation of our Tea business is substantially complete. Our ecommerce business grew 50% and the channel now represents 11% of sales.
Competitive growth is our priority, and we are confident that we will deliver underlying sales growth in 2021 well within our multi-year framework of
3-5%,
despite more challenging comparators in the second half. We have seen further cost inflation emerge through the second quarter. Cost volatility and the timing of landing price actions create a higher than normal range of likely year end margin outcomes. We are managing this dynamically and expect to maintain underlying operating margin for 2021 around flat.”
22 July 2021

FIRST HALF OPERATIONAL REVIEW: DIVISIONS
 
     First Half 2021  
(unaudited)
   Turnover      USG      UVG      UPG     Change in
underlying
operating
margin
 
     €bn        %        %        %       bps  
Unilever
  
 
25.8
 
  
 
5.4
 
  
 
4.0
 
  
 
1.3
 
 
 
(100
Beauty & Personal Care
     10.4        3.3        1.8        1.4       (220
Home Care
     5.2        4.5        4.8        (0.3     (130
Foods & Refreshment
     10.2        8.1        5.8        2.1       60  
Our markets:
The operating environment across our markets has seen some improvements but remains volatile. Restrictions on daily life continue around the world, impacting channel dynamics, sales mix and consumer behaviour. Although renewed restrictions in India impacted the market in the second quarter, they were less severe than in the same period last year. In China, normalisation has continued, but market growth is still below
pre-Covid-19
levels. The North America and Europe markets declined in the second quarter as we lapped the surge in demand for
in-home
food and hygiene products in the same period of 2020. In difficult macroeconomic conditions, markets are growing in Latin America but market conditions in South East Asia remain challenging. In Indonesia, large parts of the country have entered lock-down following a sharp rise in
Covid-19
cases.
Unilever overall performance:
We continue to be guided by our five strategic choices:
 
   
develop our portfolio into higher growth spaces;
 
   
win with our brands as a force for good, powered by purpose and innovation;
 
   
accelerate in the USA, India and China and leverage our emerging markets strength;
 
   
lead in the channels of the future; and
 
   
build a
purpose-led,
future-fit
organisation and growth culture.
These strategic choices and our sharp focus on operational excellence have delivered first half underlying sales growth of 5.4%, with volume growth of 4.0% and 1.3% from price.
Emerging markets grew 8.3%, driven by continued recovery in China and strong performance in South Asia, both growing double digit. Performance in South East Asia was mixed, with Indonesia declining high single digit. Latin America grew high single digit, led by price growth. Developed markets grew 1.5%, as North America and Europe each grew low single digit. In North America, food solutions and Prestige Beauty contributed to growth as the out of home eating and health and beauty channels reopened. We saw a relative decline in food consumed at home and flat growth in hygiene products, as we lapped the spike in demand in the prior year. In Europe, volume growth was supported by a recovery in out of home ice cream. Price declined in Europe as we lapped a period of lower promotional intensity in some markets. Ecommerce grew 50% and is now 11% of sales.
Turnover increased 0.3% including a positive impact of 1.4% from acquisitions net of disposals and negative impact of 6.1% from currency related items.
We continue to develop our portfolio into higher growth spaces. In Prestige Beauty we signed an agreement in June to acquire the leading
digital-led
skin care brand
Paula’s Choice
, which has pioneered jargon-free science, high performing ingredients and cruelty-free products. Underlying sales in functional nutrition grew double digit, which includes vitamins, minerals & supplements brands
OLLY
and
Equilibra
and, for the second quarter, our South Asian nutrition brands
Horlicks
and
Boost
.
The operational separation of our tea business is substantially complete and is due to conclude in October 2021. We are now focused on the next phase for this business, which we expect to be either an IPO, sale or partnership. This business generated revenues of around €2 billion in 2020 and excludes our hot tea businesses in India and Indonesia and our partnership interests in
ready-to-drink
tea.
As we announced in April, a number of smaller beauty and personal care brands have been separated with a dedicated management team under the name Elida Beauty. The brands include
Q-Tips
,
Caress
,
Tigi
,
Timotei
,
Impulse
and
Monsavon
with combined revenues of around €0.6 billion in 2020. We are exploring options for these brands with a focus on maximising value creation.
Underlying operating margin declined by 100bps to 18.8%. After conserving spend at the peak of the global pandemic in the prior year we have stepped up investment in our brands and marketing campaigns, increasing spend by 80bps. Gross margin was 60bps lower, impacted by an increase in raw material, packaging and distribution costs globally. There was a slightly negative incremental impact on gross margin in the first half from adverse mix related to
Covid-19.
Overheads improved by 40bps. Productivity programmes and ongoing
Covid-19
related savings in areas like travel and facilities continued.
 
2

Beauty & Personal Care
Beauty and Personal Care underlying sales grew 3.3% with 1.8% from volume and 1.4% from price, helped by increased personal care consumption occasions as living restrictions were eased in some of our markets.
Skin care grew double digit and deodorants returned to growth. In skin care
Vaseline
and
Ponds
each grew double digit. We launched
Dove’s
refillable deodorant innovation in the USA, one of many
Dove
projects exploring sustainable packaging solutions. Skin cleansing declined as we lapped the sharp increase in demand in the prior year related to
Covid-19.
Hair grew
mid-single
digit. Wash and care and styling both grew and we saw good growth in China, India and Brazil. Premium brand
Shea Moisture
grew double digit in the USA. Oral care grew
mid-single
digit, led by volume from South Asia and Africa.
Closeup’s
freshness innovation is driving growth in Brazil. Our Prestige Beauty brands grew double digit, with higher
in-store
footfall. We increased pricing in response to commodity inflation across categories, particularly in Latin America and South Asia. Turnover declined 1.9% including 2.2% contribution from acquisitions and an adverse 7.1% currency related impact.
Underlying operating margin declined 220bps as we stepped up brand and marketing investment compared to the prior year and as gross margin declined as a result of high cost inflation.
Home Care
Home Care underlying sales grew 4.5% with 4.8% from volume and negative price of 0.3%.
Fabric cleaning grew
mid-single
digit driven by recovery in India and
price-led
growth in Brazil. In Latin America growth was helped by our
Omo
dilutable laundry liquid innovation, which launched in 2020. Fabric enhancers grew
mid-single
digit led by China, where our
Comfort
fragrance boosters innovation with dual-colour beads and luxury-inspired fragrances performed well. Home & hygiene declined low single digit. There was good growth in dishwash in emerging markets, whilst household cleaners declined as we lapped a prior year spike in growth. We expanded our
Lifebuoy
brand into home hygiene products in the UK and Germany, launching the new Botanitech range of cleaning products with naturally-derived ingredients.
Price declined overall as we lapped a period of lower promotional intensity in some markets and as the impact of rising input costs was more muted in fabric cleaning through the first half. Pricing was slightly positive in the second quarter as we started to take pricing action in markets including Brazil and Turkey to respond to rising input costs. Turnover declined 2.7% including adverse impacts of 0.2% and 6.8% from disposals and currency movements respectively.
Underlying operating margin declined 130bps as we increased brand and marketing investment compared to the prior year. Gross margin declined as a result of high cost inflation, whilst overheads decreased.
Foods & Refreshment
Foods and Refreshment underlying sales grew 8.1% with 5.8% from volume and 2.1% from price.
Ice cream sales grew across both in home and out of home products, with double digit performances in Turkey, China and India. Out of home ice cream in Europe grew double digit as living restrictions began to ease, although sales have not returned to
pre-Covid-19
levels.
Magnum
and
Ben and Jerry’s
both grew double digit.
Magnum
launched the Miley in Layers campaign with Miley Cyrus.
Ben and Jerry’s
has seen innovation success with its ‘Topped’ product range, with larger chunks and unique patterns and layers.
Food solutions grew double digit. Sales in China were above
pre-Covid-19
levels, however in most other markets turnover has not yet recovered to 2019 levels as out of home channel restrictions remained in place.
In-home
foods grew low single digit even as we lapped a spike in demand in the prior year.
Knorr
and
Hellmanns’s
grew double digit led by volume with campaigns such as Make Taste Not Waste in
Hellmann’s
and the rollout of innovations such as
Knorr’s
flavour rich, low salt bouillon. We took pricing action across food and ice cream to counter rising input costs. Turnover increased 4.4% including 1.4% contribution from acquisitions and disposals and an adverse 4.8% currency related impact.
Tea grew high single digit through both price and volume, with growth in North America, Turkey, Europe and India. Price was driven by India, following significant raw material inflation.
Underlying operating margin increased 60bps. There was an increase in brand marketing investment and a decrease in overheads as we benefitted from turnover leverage.
 
     First Half 2021  
(unaudited)
   Turnover      USG      UVG      UPG     Change in
underlying
operating
margin
 
     €bn      %      %      %     bps  
Unilever
  
 
25.8
 
  
 
5.4
 
  
 
4.0
 
  
 
1.3
 
 
 
(100
Asia/AMET/RUB
     12.1        7.7        6.4        1.2       (30
The Americas
     8.0        5.1        1.7        3.3       (190
Europe
     5.7        1.1        2.2        (1.1     (130
 
3

     First Half 2021  
(unaudited)
   Turnover      USG      UVG      UPG  
     €bn      %      %      %  
Developed markets
     10.8        1.5        1.4        0.2  
Emerging markets
     15.0        8.3        5.9        2.2  
  
 
 
    
 
 
    
 
 
    
 
 
 
North America
     5.1        2.6        1.0        1.6  
Latin America
     2.9        9.5        3.1        6.3  
Asia/AMET/RUB
Underlying sales grew 7.7% with 6.4% from volume and 1.2% from price. South Asia grew double digit as we lapped a period of strict lock-down measures in India in the prior year, although growth slowed from the first to the second quarter as regional restrictions were put in place. We increased prices across categories in response to commodity inflation. China grew double digit, with broad based growth across divisions and a recovery to
pre-Covid-19
turnover levels in our food solutions business. In Turkey double digit growth was balanced between price and volume, helped by strong ice cream performance. Indonesia declined high single digit in difficult market conditions, whilst Thailand grew
mid-single
digit as we lapped a period of heavy decline in the second quarter of 2020. Turnover increased 2.0% including 1.4% contribution from acquisitions and an adverse 6.6% currency related impact.
Underlying operating margin declined 30bps as a result of increased brand and marketing investment compared to the prior year, and a lower gross margin due to higher input costs. This was mostly offset by lower overheads due to turnover leverage.    .
The Americas
Underlying sales growth in North America was 2.6%, with 1.6% from price and 1.0% from volume. Our food solutions and Prestige Beauty businesses grew double digit as channels reopened.
In-home
foods declined low single digit as we lapped a period of surge demand and beauty and personal care saw low single digit growth. Underlying price growth was delivered across all divisions.
Latin America delivered underlying sales growth of 9.5%, with 6.3% from price and 3.1% from volume. Growth was balanced across all divisions. We took strong pricing action in response to high commodity inflation and currency devaluation. Brazil grew double digit and Mexico grew
mid-single
digit, both led by price. Argentina delivered
mid-single
digit volume growth. Turnover decreased 2.5% including 2.6% favourable contribution from acquisitions and disposals and an adverse 9.6% from currency related impact.
Underlying operating margin decreased by 190bps with greater brand and marketing investment compared to the prior year and a lower gross margin due to higher input costs. The input costs were partially offset through pricing particularly in Latin America. There was a benefit in overheads.
Europe
Underlying sales grew 1.1% with volume of 2.2% and negative pricing of 1.1%. Volume growth was led by a recovery in out of home ice cream, particularly in Italy and Spain, as the channel started to
re-open.
Food solutions returned to growth, as out of home eating outlets reopened. The UK and Germany sales declined as we lapped a spike in growth in 2020. Price declined and we lapped a period of lower promotional intensity in some markets. Turnover increased 0.9% including an adverse 0.3% impact from disposals and a favourable 0.1% contribution from currency movements.
Underlying operating margin declined 130bps driven by lower gross margin as high levels of input cost inflation outweighed pricing in a challenging retail environment. We increased brand and marketing investment compared to the prior year.
 
4

ADDITIONAL COMMENTARY ON THE FINANCIAL STATEMENTS – FIRST HALF 2021
Finance costs and tax
Net finance costs decreased by €96 million to €153 million in the first half of 2021. The decrease was largely driven by a lower cost of debt and a
one-off
foreign exchange gain. This was partially offset by lower interest income driven by interest on tax credits in Brazil in the prior year. The interest rate on average net debt decreased to 1.4% from 2.0% in 2020.
The underlying effective tax rate for H1 2021 decreased to 21.9% from 22.6% in H1 2020 due to favourable tax audit settlements and provision releases, as well as the restatement of deferred tax balances for changes in tax rates. The effective tax rate for H1 2021 was 22.7% compared with 22.3% in H1 2020.
Joint ventures, associates and other income from
non-current
investments
Net profit from joint ventures and associates was €91 million, consistent with the prior year. Other income from
non-current
investments was €34 million.
Earnings per share
Underlying earnings per share decreased by 2.0%, including a negative impact of 6.3% from currency. Constant underlying earnings per share increased by 4.3%. The increase was mainly driven by underlying sales growth, lower tax and finance costs, partially offset by an increase in profit attributable to minority interests following the Horlicks acquisition in India. Diluted earnings per share decreased 5.0% at €1.19.
Free cash flow
Free cash flow in the first half of 2021 was €2.4 billion, down from the €2.9 billion delivered in the first half of 2020. This was primarily a result of lower operating profit. We have maintained the enhanced working capital discipline that improved our free cash flow in 2020 at the start of the pandemic.
Net debt
Closing net debt increased to €22.4 billion compared with €20.9 billion at 31 December 2020. The increase was driven by dividends paid and our share buyback programme, partially offset by free cash flow delivery.
Pensions
Pension assets net of liabilities were in surplus of €1.9 billion at the end of June 2021 versus €0.3 billion as at 31 December 2020. The increase was driven by positive investment returns on pension assets, and lower liabilities as interest rates increased.
Finance and liquidity
In February 2021 $1,000 million 4.25% fixed rate notes matured and were repaid. In March 2021 $400 million 2.75% fixed rate notes matured and were repaid.
On 30 June 2021 Unilever had undrawn revolving
364-day
bilateral credit facilities of $7,965 million in aggregate with a
364-day
term out.
Share buyback programme
On 29 April 2021 we announced our intention to start a share buyback programme of up to €3 billion. On 6 May 2021 we announced we would commence the first tranche of this buyback programme for an aggregate market value equivalent to €1.5 billion. As at 30 June 2021 the Group had repurchased 17,973,091 ordinary shares. Total consideration for the repurchase of shares was €0.9 billion which is recorded within other reserves. The first tranche for an aggregate market value of €1.5 billion will end on or before 27 August 2021.
Capital Reduction
On 15 June 2021 the UK court approved a capital reduction of £18.4 billion (€20.6 billion). The impact of this was to transfer €20.6 billion from share premium to retained earnings.
 
5

COMPETITION INVESTIGATIONS
As previously disclosed, Unilever is involved in a number of ongoing investigations and cases by national competition authorities, including those within Italy, Greece, South Africa and Turkey. 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 average
rate in 2021
     First half average
rate in 2020
 
Brazilian Real (€1 = BRL)
     6.492        5.323  
Chinese Yuan (€1 = CNY)
     7.800        7.743  
Indian Rupee (€1 = INR)
     88.365        81.535  
Indonesia Rupiah (€1 = IDR)
     17231        16055  
Philippine Peso (€1 = PHP)
     58.153        55.823  
UK Pound Sterling (€1 = GBP)
     0.868        0.873  
US Dollar (€1 = US $)
     1.206        1.102  
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.
 
6

NON-GAAP MEASURES
(continued)
 
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:
 
€ million
   First Half  
(unaudited)
   2021      2020  
Operating profit
  
 
4,426
 
  
 
4,672
 
Non-underlying
items within operating profit (see note 2)
     421        412  
  
 
 
    
 
 
 
Underlying operating profit
  
 
4,847
 
  
 
5,084
 
  
 
 
    
 
 
 
Turnover
     25,791        25,714  
Operating margin (%)
     17.2        18.2  
Underlying operating margin (%)
     18.8        19.8  
  
 
 
    
 
 
 
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:
 
€ million
   First Half  
(unaudited)
   2021     2020  
Taxation
     972       991  
Tax impact:
                
Non-underlying
items within operating profit
(a)
     97       109  
Non-underlying
items not in operating profit but within net profit
(a)
     (34     (7
    
 
 
   
 
 
 
Taxation before tax impact of
non-underlying
items
  
 
1,035
 
 
 
1,093
 
    
 
 
   
 
 
 
Profit before taxation
     4,369       4,533  
Non-underlying
items within operating profit before tax
(a)
     421       412  
Non-underlying
items not in operating profit but within net profit before tax
(a)
     29       (21
Share of net (profit)/loss of joint ventures and associates
     (91     (89
    
 
 
   
 
 
 
Profit before tax excluding
non-underlying
items before tax and share of net profit/(loss) of joint ventures and associates
     4,728       4,835  
    
 
 
   
 
 
 
Underlying effective tax rate
  
 
21.9
 
 
22.6
    
 
 
   
 
 
 
 
(a)
Refer to note 2 for further details on these items.
 
7

NON-GAAP MEASURES (continued)
 
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:
 
€ million
   First Half  
(unaudited)
   2021      2020  
Underlying profit attributable to shareholders’ equity (see note 6)
     3,488        3,559  
Impact of translation from current to constant exchange rates and translational hedges
     133        (103
Impact of price growth in excess of 26% per year in hyperinflationary economies
     (16      —    
    
 
 
    
 
 
 
Constant underlying earnings attributable to shareholders’ equity
     3,605        3,456  
    
 
 
    
 
 
 
Diluted average number of share units (millions of units)
     2,627.2        2,627.2  
    
 
 
    
 
 
 
Constant underlying EPS (€)
     1.37        1.32  
    
 
 
    
 
 
 
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:
 
€ million
   As at
30 June
2021
     As at
31 December
2020
     As at
30 June
2020
 
(unaudited)
Total financial liabilities
  
 
(27,542
  
 
(27,305
  
 
(28,805
Current financial liabilities
     (6,720      (4,461      (4,792
Non-current
financial liabilities
     (20,822      (22,844      (24,013
Cash and cash equivalents as per balance sheet
  
 
4,182
 
  
 
5,548
 
  
 
4,855
 
Cash and cash equivalents as per cash flow statement
     4,072        5,475        4,722  
Add bank overdrafts deducted therein
     110        73        133  
Other current financial assets
  
 
885
 
  
 
808
 
  
 
1,100
 
Non-current
financial assets derivatives that relate to financial liabilities
  
 
33
 
  
 
21
 
  
 
96
 
    
 
 
    
 
 
    
 
 
 
Net debt
  
 
(22,442
  
 
(20,928
  
 
(22,754
    
 
 
    
 
 
    
 
 
 
 
8

NON-GAAP MEASURES (continued)
 
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:
 
€ million
   First Half  
(unaudited)
   2021      2020  
Cash flow from operating activities
  
 
3,961
 
  
 
4,427
 
Income tax paid
     (917      (899
Net capital expenditure
     (386      (422
Net interest paid
     (227      (256
  
 
 
    
 
 
 
Free cash flow
  
 
2,431
 
  
 
2,850
 
  
 
 
    
 
 
 
Net cash flow (used in)/from investing activities
     (570      (581
Net cash flow (used in)/from financing activities
     (4,097      (2,088
  
 
 
    
 
 
 
GUARANTOR INFORMATION
On 13 August 2020, Unilever N.V. (NV) and Unilever Capital Corporation (UCC) filed a US Shelf registration, which was unconditionally and fully guaranteed, jointly and severally, by NV, Unilever PLC (PLC) and Unilever United States, Inc. (UNUS) and that updated the NV and UCC US Shelf registration filed on 27 July 2017, which was unconditionally and fully guaranteed, jointly and severally, by NV, PLC and UNUS.
As a result of Unification, PLC assumed NV’s liabilities in relation to debt issued under the US shelf registration programme. UCC and UNUS are each indirectly 100% owned by PLC and consolidated in the financial statements of the Unilever Group. In relation to the US Shelf registration, US$10.1 billion of Notes were outstanding at 30 June 2021 (2020: US$11.6 billion; 2019: US$11.0 billion) with coupons ranging from 0.375% to 5.900%. These Notes are repayable between 7 March 2022 and 15 November 2032.
All debt securities issued by UCC are senior, unsecured, and unsubordinated and are fully and unconditionally guaranteed, on a joint and several basis, by PLC and UNUS.
In March 2020, the SEC amended Rule
3-10
of Regulation
S-X
and created Rule
13-01
to simplify disclosure requirements related to certain registered securities, which we have adopted effective immediately. As noted above UCC and UNUS are 100% subsidiaries of Unilever PLC and are consolidated in the financial statements of the Unilever Group. In addition, there are no material assets in the guarantor entities apart from intercompany investments and balances. Therefore, as allowed under Rule
13-01,
we have excluded the summarised information for each issuer and guarantor.
The guarantees provide that, in case of the failure of the relevant issuer to punctually make payment of any principal, premium or interest, each guarantor agrees to ensure such payment is made when due whether at the stated maturity or by declaration of acceleration, call for redemption or otherwise. The guarantees also provide that the Trustee shall be paid any and all amounts due to it under the guarantee upon which the debt securities are endorsed.
PRINCIPAL RISK FACTORS
On pages 46 to 50 of our 2020 Annual Report and Accounts on Form
20-F
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 2021.
 
9

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. These forward-looking statements are based upon current expectations and assumptions regarding anticipated developments and other factors affecting the Unilever Group (the ‘Group’). They are not historical facts, nor are they guarantees of future performance.
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. A number of these risks have increased as a result of the current
Covid-19
pandemic. These forward-looking statements speak only as of the date of this document. Except as required by any applicable law or regulation, the Group expressly disclaims any 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
2020 and the Unilever Annual Report and Accounts 2020 available on our corporate website.
ENQUIRIES
 
Media:
Media Relations Team
  
Investors:
Investor Relations Team
UK   +44 78 2527 3767  
lucila.zambrano@unilever.com
   +44 20 7822 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
 
10

CONSOLIDATED INCOME STATEMENT
(unaudited)
 
     First Half  
                   Increase/
(Decrease)
 
€ million
   2021      2020      Current
rates
    Constant
rates
 
Turnover
  
 
25,791
 
  
 
25,714
 
  
 
0.3
 
 
7.1
Operating profit
  
 
4,426
 
  
 
4,672
 
  
 
(5.3
)% 
 
 
2.6
Which includes
non-underlying
items credits/(charges) of
     (421      (412                 
Net finance costs
  
 
(153
  
 
(249
                
Finance income
     68        139                   
Finance costs
     (216      (378                 
Pensions and similar obligations
     (5      (10                 
Non-underlying
item net monetary gain/(loss) arising from hyperinflationary economies
  
 
(29
  
 
21
 
                
Share of net profit/(loss) of joint ventures and associates
  
 
91
 
  
 
89
 
                
Other income/(loss) from
non-current
investments and associates
  
 
34
 
  
 
—  
 
                
Profit before taxation
  
 
4,369
 
  
 
4,533
 
  
 
(3.6
)% 
 
 
5.2
Taxation
  
 
(972
  
 
(991
                
Which includes tax impact of
non-underlying
items of
     63        102                   
Net profit
  
 
3,397
 
  
 
3,542
 
  
 
(4.1
)% 
 
 
5.3
Attributable to:
                                  
    
 
 
    
 
 
    
 
 
   
 
 
 
Non-controlling
interests
     276        258                   
Shareholders’ equity
     3,121        3,284        (5.0 )%      4.4
    
 
 
    
 
 
    
 
 
   
 
 
 
 
Combined earnings per share
      
Basic earnings per share (euros)
     1.19        1.25        (5.0 )%      4.4
Diluted earnings per share (euros)
     1.19        1.25        (5.0 )%      4.4
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(unaudited)
 
     First Half  
€ million
   2021      2020  
Net profit
  
 
3,397
 
  
 
3,542
 
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
     55        20  
Remeasurements of defined benefit pension plans
(a)
     968        (201
Items that may be reclassified subsequently to profit or loss, net of tax:
                 
Gains/(losses) on cash flow hedges
     137        43  
Currency retranslation gains/(losses)
(b)
     617        (1,481
    
 
 
    
 
 
 
Total comprehensive income
  
 
5,174
 
  
 
1,923
 
    
 
 
    
 
 
 
Attributable to:
                 
Non-controlling
interests
     299        177  
Shareholders’ equity
     4,875        1,746  
    
 
 
    
 
 
 
 
(a)
Remeasurement of defined benefit pension plans in 2021 is driven by positive investment returns and increase in interest rates.
(b)
2021 gain is primarily due to strengthening of the US Dollar, British Pound, Brazilian Real and Indian Rupee against the Euro. 2020 loss is due to weakening of the Brazilian Real, Mexican Peso, Indian Rupee, South Korean Won and Russian Ruble against the Euro.
 
11

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
(unaudited)
 
€ million
   Called up
share
capital
     Share
premium
account
    Unification
reserve
    Other
reserves
    Retained
profit
    Total     Non-controlling
interest
    Total
equity
 
First half – 2021
                                                                 
1 January 2021
     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
(a)
              (20,626     —         —         20,626       —         —         —    
Repurchase of shares
(b)
     —          —         —         (897     —         (897     —         (897
Other movements in treasury shares
(c)
     —          —         —         78       (101     (23     —         (23
Share-based payment credit
(d)
     —          —         —         —         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
asset
s
     —          —         —         (89     —         (89     (1     (90
Other movements in equity
(e)
     —          —         —         (83     140       57       14       71  
    
 
 
    
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
 
30 June 2021
  
 
92
 
  
 
52,843
 
 
 
(73,364
 
 
(7,694
 
 
45,139
 
 
 
17,016
 
 
 
2,443
 
 
 
19,459
 
    
 
 
    
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
 
                 
First half – 2020
                                                                 
1 January 2020 as previously reported
     420        134       —         (5,574     18,212       13,192       694       13,886  
    
 
 
    
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
 
Profit or loss for the period
     —          —         —         —         3,284       3,284       258       3,542  
Other comprehensive income, net of tax:
                                                                 
Gains/(losses) on:
                                                                 
Equity instruments
     —          —         —         16       —         16       4       20  
Cash flow hedges
     —          —         —         46       —         46       (3     43  
Remeasurements of defined benefit pension plans
     —          —         —         —         (200     (200     (1     (201
Currency retranslation gains/(losses)
     —          —         —         (1,387     (13     (1,400     (81     (1,481
    
 
 
    
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
 
Total comprehensive income
     —          —         —         (1,325     3,071       1,746       177       1,923  
Dividends on ordinary capital
     —          —         —         —         (2,149     (2,149     —         (2,149
Other movements in treasury shares
(c)
     —          —         —         190       (126     64       —         64  
Share-based payment credit
(d)
     —          —         —         —         74       74       —         74  
Dividends paid to
non-controlling
interests
     —          —         —         —         —         —         (210     (210
Currency retranslation gains/(losses) net of tax
     —          (7     —         —         —         (7     —         (7
Hedging gain/(loss) transferred to
non-financial
asset
s
     —          —         —         —         —         —         1       1  
Net gain arising from Horlicks acquisition
(f)
     —          —         —         —         2,930       2,930       1,918       4,848  
Other movements in equity
(e)
     —          —         —         —         (211     (211     5       (206
    
 
 
    
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
 
30 June 2020
  
 
420
 
  
 
127
 
 
 
—  
 
 
 
(6,709
 
 
21,801
 
 
 
15,639
 
 
 
2,585
 
 
 
18,224
 
    
 
 
    
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
 
 
(a)
Share premium has been adjusted to reflect the legal share capital of the PLC company, which reduced by £18,400 million following court approval on 15 June 2021.
(b)
Repurchase of shares reflects the cost of acquiring ordinary shares as part of the share buyback programmes announced on 29 April 2021.
(c)
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.
(d)
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.
(e)
2021 includes a hyperinflation adjustment of €137 million and €83 million related to the Welly acquisition. 2020 includes €163 million paid for purchase of the
non-controlling
interest in Unilever Malaysia.
(f)
Consideration for the Main Horlicks Acquisition included the issuance of shares in a group subsidiary, Hindustan Unilever Limited, which resulted in a net gain being recognised within equity.
 
12

CONSOLIDATED BALANCE SHEET
(unaudited)
 
€ million
   As at
30 June
2021
     As at
31 December
2020
     As at 30
June
2020
 
Non-current
assets
                          
Goodwill
     19,239        18,942        19,675  
Intangible assets
     16,064        15,999        16,049  
Property, plant and equipment
     10,521        10,558        11,374  
Pension asset for funded schemes in surplus
     4,017        2,722        2,296  
Deferred tax assets
     1,320        1,474        1,325  
Financial assets
     960        876        815  
Other
non-current
assets
     1,032        931        896  
    
 
 
    
 
 
    
 
 
 
    
 
53,153
 
  
 
51,502
 
  
 
52,430
 
    
 
 
    
 
 
    
 
 
 
Current assets
                          
Inventories
     4,766        4,462        4,646  
Trade and other current receivables
     6,478        4,939        6,955  
Current tax assets
     272        372        336  
Cash and cash equivalents
     4,182        5,548        4,855  
Other financial assets
     885        808        1,100  
Assets held for sale
     828        28        56  
    
 
 
    
 
 
    
 
 
 
    
 
17,411
 
  
 
16,157
 
  
 
17,948
 
    
 
 
    
 
 
    
 
 
 
Total assets
  
 
70,564
 
  
 
67,659
 
  
 
70,378
 
    
 
 
    
 
 
    
 
 
 
Current liabilities
                          
Financial liabilities
     6,720        4,461        4,792  
Trade payables and other current liabilities
     14,799        14,132        14,602  
Current tax liabilities
     1,597        1,451        1,051  
Provisions
     514        547        530  
Liabilities held for sale
     158        1        1  
    
 
 
    
 
 
    
 
 
 
    
 
23,788
 
  
 
20,592
 
  
 
20,976
 
    
 
 
    
 
 
    
 
 
 
Non-current
liabilities
                          
Financial liabilities
     20,822        22,844        24,013  
Non-current
tax liabilities
     143        149        289  
Pensions and post-retirement healthcare liabilities:
                          
Funded schemes in deficit
     832        1,109        1,275  
Unfunded schemes
     1,298        1,326        1,426  
Provisions
     592        583        642  
Deferred tax liabilities
     3,361        3,166        3,276  
Other
non-current
liabilities
     269        235        257  
    
 
 
    
 
 
    
 
 
 
    
 
27,317
 
  
 
29,412
 
  
 
31,178
 
    
 
 
    
 
 
    
 
 
 
Total liabilities
  
 
51,105
 
  
 
50,004
 
  
 
52,154
 
    
 
 
    
 
 
    
 
 
 
Equity
                          
Shareholders’ equity
     17,016        15,266        15,639  
Non-controlling
interests
     2,443        2,389        2,585  
    
 
 
    
 
 
    
 
 
 
Total equity
  
 
19,459
 
  
 
17,655
 
  
 
18,224
 
    
 
 
    
 
 
    
 
 
 
Total liabilities and equity
  
 
70,564
 
  
 
67,659
 
  
 
70,378
 
    
 
 
    
 
 
    
 
 
 
 
13

CONSOLIDATED CASH FLOW STATEMENT
(unaudited)
 
     First Half  
€ million
   2021     2020  
Net profit
     3,397       3,542  
Taxation
     972       991  
Share of net (profit)/loss of joint ventures/associates and other (income)/loss from
non-current
investments and associates
     (125     (89
Net monetary (gain)/loss arising from hyperinflationary economies
     29       (21
Net finance costs
     153       249  
    
 
 
   
 
 
 
Operating profit
  
 
4,426
 
 
 
4,672
 
    
 
 
   
 
 
 
Depreciation, amortisation and impairment
     860       987  
Changes in working capital
     (1,233     (1,215
Pensions and similar obligations less payments
     (126     (79
Provisions less payments
     (29     (66
Elimination of (profits)/losses on disposals
     —         45  
Non-cash
charge for share-based compensation
     82       74  
Other adjustments
     (19     9  
    
 
 
   
 
 
 
Cash flow from operating activities
  
 
3,961
 
 
 
4,427
 
    
 
 
   
 
 
 
Income tax paid
     (917     (899
    
 
 
   
 
 
 
Net cash flow from operating activities
  
 
3,044
 
 
 
3,528
 
    
 
 
   
 
 
 
Interest received
     61       80  
Net capital expenditure
     (386     (422
Other acquisitions and disposals
     (275     (623
Other investing activities
     30       384  
    
 
 
   
 
 
 
Net cash flow (used in)/from investing activities
  
 
(570
 
 
(581
    
 
 
   
 
 
 
Dividends paid on ordinary share capital
     (2,277     (2,120
Interest paid
     (288     (336
Change in financial liabilitie
s
     (430     602  
Repurchase of shares
     (845     —    
Other financing activities
     (257     (234
    
 
 
   
 
 
 
Net cash flow (used in)/from financing activities
  
 
(4,097
 
 
(2,088
    
 
 
   
 
 
 
Net increase/(decrease) in cash and cash equivalents
  
 
(1,623
 
 
859
 
    
 
 
   
 
 
 
Cash and cash equivalents at the beginning of the period
  
 
5,475
 
 
 
4,116
 
Effect of foreign exchange rate changes
     220       (253
    
 
 
   
 
 
 
Cash and cash equivalents at the end of the period
  
 
4,072
 
 
 
4,722
 
    
 
 
   
 
 
 
 
14

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 by the EU (Regulation (EC) No 1606/2002) and as adopted for use in the UK and except as set out below are consistent with the year ended 31 December 2020.
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 2021 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 2020 are not Unilever PLC’s statutory accounts for that financial year. Those accounts of Unilever for the year ended 31 December 2020 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.
During Q4 2020 the Group reorganised under Unilever PLC (“PLC”) as its single parent company, a process which we referred to as ‘Unification’. Prior to Unification the Group operated with two parent companies, Unilever N.V. (“NV”) and Unilever PLC (“PLC”), who together with the group companies operated as a single economic entity. Under the terms of Unification, all the NV ordinary shares were cancelled and NV shareholders received one new PLC ordinary share in exchange for each NV share owned. Unification resulted in the issue of 1,460,713,122 new PLC ordinary shares. As at 30 June 2021 2,629,243,772 (December 2020: 2,629,243,772) PLC ordinary shares were in issue and no NV ordinary shares were in issue (December 2020: nil).
Prior to Unification NV and PLC formed a single reporting entity for the purposes of presenting consolidated financial statements. Accordingly, group companies included in the comparative information provided in the condensed interim financial statements are PLC and NV and those companies controlled by NV or PLC.
Refer to note 1 to our 2020 consolidated financial statements for more details on Unification.
Recent accounting developments
The Interest Rate Benchmark Reform Amendments Phase 2 (Amendments to IFRS 9, IAS 39 and IFRS 7) apply for the first time in 2021. We do not have significant derivatives that refer to an interest rate benchmark so these amendments do not have a significant impact on the interim condensed consolidated financial statements of the Group. The Group has not early adopted any standard, interpretation or amendment that has been issued but is not yet effective.
 
15

NOTES TO THE CONDENSED FINANCIAL STATEMENTS
(unaudited)
 
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 with 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.
 
     First Half  
€ million
   2021      2020  
Acquisition and disposal-related credit/(costs)
     (122      (27
Gain/(loss) on disposal of group companies
     7        6  
Restructuring costs
     (306      (391
    
 
 
    
 
 
 
Non-underlying
items within operating profit before tax
     (421      (412
     
Tax on
non-underlying
items within operating profit
     97        109  
    
 
 
    
 
 
 
Non-underlying
items within operating profit after tax
     (324      (303
    
 
 
    
 
 
 
     
Net monetary gain/(loss) arising from hyperinflationary economies
     (29      21  
    
 
 
    
 
 
 
Non-underlying
items not in operating profit but within net profit before tax
     (29      21  
     
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      —    
Hyperinflation adjustment for Argentina deferred tax
     (28      (7
    
 
 
    
 
 
 
Non-underlying
items not in operating profit but within net profit after tax
     (63      14  
    
 
 
    
 
 
 
Non-underlying
items after tax
(a)
     (387      (289
    
 
 
    
 
 
 
     
Attributable to:
                 
    
 
 
    
 
 
 
Non-controlling
interests
     (20      (14
Shareholders’ equity
     (367      (275
    
 
 
    
 
 
 
 
(a)
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.
 
16

NOTES TO THE CONDENSED FINANCIAL STATEMENTS
(unaudited)
 
3    SEGMENT INFORMATION – DIVISIONS
 
First Half
   Beauty &
Personal
Care
     Home
Care
     Foods &
Refreshment
     Total  
Turnover
(€ million)
                                   
2020
     10,610        5,328        9,776        25,714  
2021
     10,407        5,182        10,202        25,791  
Change (%)
     (1.9      (2.7      4.4        0.3  
Impact of:
                                   
Acquisitions (%)
     2.2        —          1.6        1.5  
Disposals (%)
     —          (0.2      (0.2      (0.1
Currency-related items (%), of which:
     (7.1      (6.8      (4.8      (6.1
Exchange rates changes (%)
     (7.3      (6.9      (5.0      (6.3
Extreme price growth in hyperinflationary markets* (%)
     0.2        0.2        0.2        0.2  
         
Underlying sales growth
(%)
  
 
3.3
 
  
 
4.5
 
  
 
8.1
 
  
 
5.4
 
    
 
 
    
 
 
    
 
 
    
 
 
 
Price
*
(%)
     1.4        (0.3      2.1        1.3  
Volume (%)
     1.8        4.8        5.8        4.0  
    
 
 
    
 
 
    
 
 
    
 
 
 
         
Operating profit
(€ million)
                                   
2020
     2,403        744        1,525        4,672  
2021
     2,089        655        1,682        4,426  
         
Underlying operating profit
(€ million)
                                   
2020
     2,495        817        1,772        5,084  
2021
     2,215        727        1,905        4,847  
         
Operating margin
(%)
                                   
2020
     22.6        14.0        15.6        18.2  
2021
     20.1        12.6        16.5        17.2  
         
Underlying operating margin
(%)
                                   
2020
     23.5        15.3        18.1        19.8  
2021
     21.3        14.0        18.7        18.8  
    
 
 
    
 
 
    
 
 
    
 
 
 
 
*
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.
 
17

NOTES TO THE CONDENSED FINANCIAL STATEMENTS
(unaudited)
 
4    SEGMENT INFORMATION – GEOGRAPHICAL AREA
 
First Half
   Asia /
AMET /
RUB
     The
Americas
     Europe      Total  
Turnover
(€ million)
                                   
2020
     11,807        8,227        5,680        25,714  
2021
     12,040        8,022        5,729        25,791  
Change (%)
     2.0        (2.5      0.9        0.3  
Impact of:
                                   
Acquisitions (%)
     1.4        2.8        —          1.5  
Disposals (%)
     —          (0.2      (0.3      (0.1
Currency-related items (%), of which:
     (6.6      (9.6      0.1        (6.1
Exchange rates changes (%)
     (6.7      (9.9      0.1        (6.3
Extreme price growth in hyperinflationary markets* (%)
     0.1        0.4        —          0.2  
Underlying sales growth
(%)
  
 
7.7
 
  
 
5.1
 
  
 
1.1
 
  
 
5.4
 
    
 
 
    
 
 
    
 
 
    
 
 
 
Price
*
(%)
     1.2        3.3        (1.1      1.3  
Volume (%)
     6.4        1.7        2.2        4.0  
    
 
 
    
 
 
    
 
 
    
 
 
 
         
Operating profit
(€ million)
                                   
2020
     2,265        1,532        875        4,672  
2021
     2,289        1,303        834        4,426  
         
Underlying operating profit
(€ million)
                                   
2020
     2,394        1,622        1,068        5,084  
2021
     2,413        1,429        1,005        4,847  
         
Operating margin
(%)
                                   
2020
     19.2        18.6        15.4        18.2  
2021
     19.0        16.2        14.6        17.2  
         
Underlying operating margin
(%)
                                   
2020
     20.3        19.7        18.8        19.8  
2021
     20.0        17.8        17.5        18.8  
    
 
 
    
 
 
    
 
 
    
 
 
 
 
*
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.
 
18

NOTES TO THE CONDENSED FINANCIAL STATEMENTS
(unaudited)
 
5    TAXATION
The effective tax rate for the first half was 22.7% compared to 22.3% in 2020. 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:
 
 
     First Half 2021      First Half 2020  
€ million
   Before
tax
     Tax
(charge)/
credit
    After
tax
     Before
tax
    Tax
(charge)/
credit
    After
tax
 
Gains/(losses) on
                                                  
Equity instruments at fair value through other comprehensive incom
e
     56        (1     55        19       1       20  
Cash flow hedges
     143        (6     137        71       (28     43  
Remeasurements of defined benefit pension plans
(a)
     1,404        (436     968        (242     41       (201
Currency retranslation gains/(losses)
     653        (36     617        (1,516     35       (1,481
    
 
 
    
 
 
   
 
 
    
 
 
   
 
 
   
 
 
 
Other comprehensive income
  
 
2,256
 
  
 
(479
 
 
1,777
 
  
 
(1,668
 
 
49
 
 
 
(1,619
    
 
 
    
 
 
   
 
 
    
 
 
   
 
 
   
 
 
 
 
  (a)
Remeasurement of defined benefit pension plans in 2021 is driven by positive investment returns and increase in interest rates.
6    COMBINED EARNINGS PER SHARE
The combined earnings per share calculations are based on the average number of share units representing the combined ordinary shares of NV and 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:
 
     2021      2020  
Combined EPS – Basic
                 
Net profit attributable to shareholders’ equity (€ million)
     3,121        3,284  
Average number of share units (millions of units)
     2,618.7        2,619.0  
Combined EPS – basic (€)
     1.19        1.25  
     
Combined EPS – Diluted
                 
Net profit attributable to shareholders’ equity (€ million)
     3,121        3,284  
Adjusted average number of share units (millions of units)
     2,627.2        2,627.2  
Combined EPS – diluted (€)
     1.19        1.25  
     
Underlying EPS
                 
Net profit attributable to shareholder’s equity (€ million)
     3,121        3,284  
Post tax impact of
non-underlying
items attributable to shareholders’ equity (see note 2)
     367        275  
    
 
 
    
 
 
 
Underlying profit attributable to shareholders’ equity (€ million)
     3,488        3,559  
Adjusted average number of share units (millions of units)
     2,627.2        2,627.2  
Underlying EPS – diluted (€)
     1.33        1.35  
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 2020 (net of treasury shares)
     2,622.0  
Shares repurchased under the share buyback programme
     (18.0
Net movement in shares under incentive schemes
     1.7  
    
 
 
 
Number of shares at 30 June 2021
     2,605.7  
    
 
 
 
 
19

NOTES TO THE CONDENSED FINANCIAL STATEMENTS
(unaudited)
 
7    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 2021 and 2020. The Group’s cash resources and other financial assets are shown below.
 
     30 June 2021      31 December 2020      30 June 2020  
€ million
   Current      Non-
current
     Total      Current      Non-
current
     Total      Current      Non-
current
     Total  
Cash and cash equivalents
                                                                                
Cash at bank and in hand
     2,625               2,625        2,764               2,764        2,672               2,672  
Short-term deposits
(a)
     1,411               1,411        2,764               2,764        2,176               2,176  
Other cash equivalents
     146               146        20               20        7               7  
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
 
    
 
4,182
 
  
 
 
  
 
4,182
 
  
 
5,548
 
  
 
 
  
 
5,548
 
  
 
4,855
 
  
 
 
  
 
4,855
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
 
Other financial assets
                                                                                
Financial assets at amortised cost
(b)
     514        148        662        468        138        606        774        129        903  
Financial assets at fair value through other comprehensive income
(c)
     9        413        422        9        361        370               304        304  
Financial assets at fair value through profit or loss:
                                                                                
Derivatives that relate to financial liabilities
     40        32        72        59        21        80        69        96        165  
Other
(d)
     322        367        689        272        356        628        257        286        543  
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
 
    
 
885
 
  
 
960
 
  
 
1,845
 
  
 
808
 
  
 
876
 
  
 
1,684
 
  
 
1,100
 
  
 
815
 
  
 
1,915
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
 
Total financial assets
(e)
  
 
5,067
 
  
 
960
 
  
 
6,027
 
  
 
6,356
 
  
 
876
 
  
 
7,232
 
  
 
5,955
 
  
 
815
 
  
 
6,770
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
 
 
(a)
Short-term deposits typically have 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 €
107
 million (31 December 2020: €
101
 million, 30 June 2020: €
94
million).
(c)
Included within
non-current
financial assets at fair value through other comprehensive income are equity investments of €
408
 million (31 December 2020: €
356
 million, 30 June 2020: €
284
million).
(d)
Current other financial assets at fair value through profit or loss include
A-
or higher rated money and capital market instruments. Included within
non-current
financial assets at fair value through profit or loss are assets in a trust to fund benefit obligations in the US, an option over
non-controlling
interest in a subsidiary in Hong Kong and investments in a number of 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.
 
     Fair value     Carrying amount  
€ million
   As at 30
June
2021
    As at 31
December
2020
    As at 30
June
2020
    As at 30
June
2021
    As at 31
December
2020
    As at 30
June
2020
 
Financial assets
                                                
Cash and cash equivalents
     4,182       5,548       4,855       4,182       5,548       4,855  
Financial assets at amortised cost
     662       606       903       662       606       903  
Financial assets at fair value through other comprehensive income
     422       370       304       422       370       304  
Financial assets at fair value through profit and loss:
                                                
Derivatives
     72       80       165       72       80       165  
Other
     689       628       543       689       628       543  
    
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
 
    
 
6,027
 
 
 
7,232
 
 
 
6,770
 
 
 
6,027
 
 
 
7,232
 
 
 
6,770
 
Financial liabilities