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DISCLAIMERThis PDF is a section of the Unilever Annual Report and Accounts 2015. It doesnot contain sufficient information to allow a full understanding of the results ofthe Unilever Group and the state of affairs of Unilever N.V., Unilever PLC or theUnilever Group. For further information the Unilever Annual Report and Accounts2015 should be consulted.Certain sections of the Unilever Annual Report and Accounts 2015 have beenaudited. These are on pages 90 to 159, and those parts noted as audited withinthe Directors’ Remuneration Report on pages 66 to 83.The maintenance and integrity of the Unilever website is the responsibility of theDirectors; the work carried out by the auditors does not involve consideration ofthese matters. Accordingly, the auditors accept no responsibility for any changesthat may have occurred to the financial statements since they were initially placedon the website.Legislation in the United Kingdom and the Netherlands governing the preparationand dissemination of financial statements may differ from legislation in otherjurisdictions.Except where you are a shareholder, this material is provided for informationpurposes only and is not, in particular, intended to confer any legal rights on you.The Annual Report and Accounts does not constitute an invitation to invest inUnilever shares. Any decisions you make in reliance on this information are solelyyour responsibility.The information is given as of the dates specified, is not updated, and anyforward-looking statements are made subject to the reservations specifiedin the cautionary statement on the inside back cover of this PDF.Unilever accepts no responsibility for any information on other websites that maybe accessed from this site by hyperlinks.
MAKINGSUSTAINABLE LIVINGCOMMONPLACEANNUAL REPORTAND ACCOUNTS 2015STRATEGIC REPORT
LIFEBUOYHANDWASHING PROGRAMMEWE AIM TO IMPROVE HEALTH AND HYGIENEFOR 1 BILLION PEOPLE AROUND THE WORLD,THROUGH BRANDS SUCH AS LIFEBUOY. UR HANDWASHING PROGRAMME IS THEOWORLD’S LARGEST, THANKS IN PART TOFUNDING FROM OUR EXTERNAL PARTNERS.21The campaign was rolledout in 21 countries.337 millionAlmost 337 million people havebeen reached by the Lifebuoyhandwashing programme sinceit started.LIFEBUOY – HELP A CHILD REACH 5The campaign teaches children the benefits ofwashing their hands at key times of the day, helpingto reduce killer diseases such as diarrhoea, andsaving lives at scale. In 2015 the campaign focusedon hand hygiene during the crucial first 28 days afterbirth (the neo-natal period), the biggest barrier tochildren reaching five.
OUR PURPOSEUNILEVER HAS A SIMPLE BUT CLEARPURPOSE – TO MAKE SUSTAINABLELIVING COMMONPLACE. WE BELIEVETHIS IS THE BEST LONG-TERM WAY FOROUR BUSINESS TO GROW.Our distinct Purpose and our operational expertiseacross our business model will help realise our visionof accelerating growth in the business, while reducingour environmental footprint and increasing our positivesocial impact.Our Purpose and vision are ambitious but are consistentwith the changing attitudes and expectations of consumers.Our unswerving commitment to sustainable living isincreasingly delivering both more trust from consumersand a strong business for shareholders with lower risks andconsistent, competitive and profitable long-term growth.OUR ANNUAL REPORT ANDACCOUNTS 2015 IS IN TWO PARTS:POTENTIAL FOR CHANGEEvery year 6 million childrendie before the age of five. Hygiene,particularly handwashing withsoap, is one of the most costeffective ways to prevent thesedeaths. Watch and share ourlatest film ‘Chamki’ by directorAnand Ghandi, revealing theemotional truth behind ourcampaign. www.youtube.com/helpachildreach5.OUR STRATEGIC REPORTThe Strategic Report contains informationabout us, how we create value and how we runour business. It includes our strategy, businessmodel, markets and Key Performance Indicators,as well as our approach to sustainability and risk.GOVERNANCE AND FINANCIAL REPORTThe Governance and Financial Report containsdetailed corporate governance information,how we mitigate risk, our Committee reportsand how we remunerate our Directors, plus ourFinancial Statements and Notes.ONLINEYou can find more information about Unileveronline at www.unilever.com. For furtherinformation on the Unilever Sustainable LivingPlan (USLP) visit www.unilever.com/sustainableliving. Our Strategic Report and Governanceand Financial Report, along with otherrelevant documents, can be downloadedat www.unilever.com/ara2015/downloads.Unilever Annual Report and Accounts 2015CONTENTSAbout us 2Chairman’s statement 4Chief Executive Officer’s review 6Our markets 10Our strategic focus 12A business model thatcreates value 14Our performance 16Delivering value for ourstakeholders 18–– Our consumers 20–– Society 24–– Our people 28–– Our shareholders 32–– Financial review 2015 35Our principal risks 40Summary remuneration report 42Shareholder information 44This Strategic Report has been approvedby the Boards and signed on their behalfby Tonia Lovell – Group Secretary.Strategic Report1
ABOUT USTWO BILLION PEOPLE USEUNILEVER PRODUCTS EVERYDAY TO FEEL GOOD, LOOK GOODAND GET MORE OUT OF LIFE.13 1 BILLIONBRANDSOUR CATEGORIESAND BRANDSOur Personal Care, Foods, Home Careand Refreshment categories each containa portfolio of brands that aim to deliverconsistent, competitive, profitableand responsible growth supported byinvestment in innovation and marketing.123456We have 13 brands with sales of 1 billion or above and a growing numberof Sustainable Living brands, such as Doveand Knorr, that deliver strong social orenvironmental benefits.We actively manage our portfolio andin 2015 added a Prestige skin care rangein Personal Care through acquisition, andfocused some of our Foods brands in a newBaking, Cooking and Spreads business.13 1 BILLION unsilkSurfStrategic Report7Unilever Annual Report and Accounts 2015
2BILLIONCONSUMERS USEOUR PRODUCTSEVERY DAY8WHERE WE OPERATE9101112Unilever operates in more than 190countries and is present in seven out often households globally. Some geographiesare new, others we have been in for morethan 100 years. Although we operate in somemarkets that are volatile, with specific risks,our size and scale provide risk diversificationand consistency of returns over the longterm. Our scale means we can takeadvantage of global manufacturing anddistribution, providing efficiencies of scaleand driving down costs.13190WE OPERATEIN MORE THAN190 COUNTRIESUnilever Annual Report and Accounts 2015Strategic Report3
CHAIRMAN’S STATEMENTCONTINUING TO DELIVER SUSTAINABLELONG-TERM GROWTH FOR SHAREHOLDERS.OVERVIEWDespite another year of tough economicconditions, 2015 once again saw the deliveryof consistent, competitive, profitable andresponsible growth, a trend that has nowbeen firmly established at Unilever.Over my tenure Unilever has undergonesignificant change. The portfolio strategyhas been sharpened and adapted in orderto increase Unilever’s presence in fastergrowing and more profitable segments ofthe market. Innovations have been madebigger and stronger and many more brandshave been introduced successfully into newmarkets, most recently in 2015 with thelaunch of Lux in the Philippines.The step-up in performance that hasfollowed these changes has been foundedon a much clearer operating model anda streamlining of the organisationalstructure, which together have helped togenerate the funds for growth while alsoresulting in significantly higher levels ofoperational discipline and service delivery.Increased investments have been made inplant, product quality and informationtechnology in order to modernise Unilever’sessential infrastructure and supportgrowth over the longer term.The introduction of an inspiring mission in2010 in the form of the Unilever SustainableLiving Plan (USLP) has contributed tobusiness success, with Unilever’sSustainable Living brands growing at afaster rate than the rest of the Group.Employee engagement has also risensteadily since the introduction of the USLPand Unilever is now regularly recognisedas one of the world’s most admired andsought-after employers.The Boards were pleased in 2015 tosee Unilever further its commitment tosustainable and equitable growth under theUSLP by becoming the first ever companyto publish a detailed, stand-alone HumanRights report under the framework setdown by the UN Guiding Principles onBusiness and Human Rights.A key element in the enhanced performanceof the Group over this period has been asteady improvement in the strength anddepth of Unilever’s senior management.Leadership development, talentmanagement and succession planninghave all been prioritised in pursuit of thisobjective and I have been pleased4Strategic Reportthroughout my chairmanship to engagethe Boards fully and actively in this process.In 2015 we were once again reassured bythe robustness of the process and by thepipeline of talent available inside Unilever.A similar emphasis has been given to thediversity of talent – and in particular togender balance – again, with great results.The proportion of women occupyingmanagement grades now stands at 45%of the total, the highest figure in Unilever’shistory and up from 38% just five yearsago. I am also proud to say that Unilevercontinues to lead the way among its peersat Board level, with the proportion of femaleNon-Executive Directors in 2015 exceeding50% for the first time.ENGAGEMENTThroughout my chairmanship, the Boardshave looked to engage fully across theGroup and that was the case again in 2015.We were pleased for example to spend timeat Unilever’s state-of-the-art R&D facility inTrumbull, US where we saw at first-handthe high-quality innovations beingdeveloped for the Personal Care category.Whilst in the US, a number of Directorsalso visited Silicon Valley to meet with someof Unilever’s global partners and to seehow we are anticipating trends and usingtechnology to better connect withconsumers. The Boards also spent timein Brussels engaging with European Union(EU) policy-makers on how to make theEU a more attractive and competitiveenvironment in which to do business.Over the years I have looked to engagefrequently and openly with Unilever’sshareholder base and that was repeatedin 2015. I met once again with principalshareholders in Europe and the US anddiscussed with them issues related tostrategy and governance. I was alsodelighted to visit the Philippines andSingapore as part of Unilever’s annualinvestor conference, where investors wereable to see some of the factors behind thestrength and success of Unilever’soperations in South East Asia.I was also pleased to meet with individualshareholders at our AGMs in April 2015.These were held for the first time atUnilever’s offices in the Netherlands andthe UK. Following the success andsimplicity of hosting the AGMs in-house,we will use the same venues again this year.Information on the AGMs can be foundwithin the NV and PLC AGM Notices whichwill be published in March 2016.EVALUATIONFollowing the external Board evaluationin 2014, we used a simplified internalevaluation this year. Whilst we concludedthat overall the Boards continue to operatein an effective manner, in this VUCA (volatile,uncertain, complex and ambiguous) worldwe set the bar even higher for ourselvesfor 2016 in relation to the knowledge wemust acquire as a Board and the riskassessments we must conclude.Each Board Committee also performedits own self-evaluation again and agreedon areas to enhance its effectivenessfurther and these are described withineach Committee report.BOARD COMPOSITION ANDSUCCESSIONDuring my tenure as your Chairman,we have sought to find people withrelevant skills and experience to make adifference to the Boards’ discussions. Ourthorough processes identified three newNon-Executive Directors in 2015 and I wasdelighted to welcome Nils Andersen,Vittorio Colao and Judith Hartmann duringthe year. They have further strengthenedthe digital expertise, financial and industryexperience of the Boards. Ann Fudgebecame the Vice-Chairman and SeniorIndependent Director following KeesStorm’s retirement at the 2015 AGMs.LOOKING AHEADEven though the tough trading conditionsare likely to remain for some time to come,the Boards have full confidence in thestrategy Unilever is following and in thehigh calibre of its executive leadership andmanagement team. The progress Unileverhas made over recent years leaves it wellplaced to go on delivering consistent topand bottom line growth. On behalf of theBoards I would like to thank all ofUnilever’s 169,000 employees for theirefforts, energy and the successes that youwill read about in this Strategic Report.Michael TreschowChairmanUnilever Annual Report and Accounts 2015
BOARD OF DIRECTORS1.Michael TreschowChairman2.Ann FudgeVice-Chairman and SeniorIndependent Director3.Paul PolmanChief Executive Officer4.Graeme Pitkethly ΛChief Financial Officer5.Nils AndersenNon-Executive Director6.Laura ChaNon-Executive Director7.Vittorio ColaoNon-Executive Director8.Professor Louise FrescoNon-Executive Director9.Judith HartmannNon-Executive Director123456789101112131410. Mary MaNon-Executive Director11. Hixonia NyasuluNon-Executive Director12. John RishtonNon-Executive Director13. Feike SijbesmaNon-Executive Director14. Tonia LovellΛGroup Secretary Graeme Pitkethly will beproposed for election as anExecutive Director at the2016 AGMs.Λ Not a Board member. For Directors’ biographies,please see page 58 ofthe Governance andFinancial Report. For more information onBoard evaluation and shareholderengagement, see pages 46and 49 of the Governance andFinancial Report. Committeereports can be found on pages60 to 83 of the Governance andFinancial Report.Unilever Annual Report and Accounts 2015Strategic Report5
CHIEF EXECUTIVE OFFICER’S REVIEWUNILEVER COMPLETED YET ANOTHER YEAROF GROWTH AHEAD OF ITS MARKETS IN2015 AND CONTINUED TO
This PDF is a section of the Unilever Annual Report and Accounts 2015. It does not contain sufficient information to allow a full understanding of the results of the Unilever Group and the state of affairs of Unilever N.V., Unilever PLC or the Unilever Group. For further information the Unilever Annual Report and Accounts 2015 should be consulted.
