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Unilever announces Final Results 2013

LONDON, UNITED KINGDOM and ROTTERDAM, THE NETHERLANDS -- (Marketwired) -- 01/21/14 --




                2013 FULL YEAR AND FOURTH QUARTER RESULTS

                       GOOD PROGRESS IN TOUGH MARKETS


Full year highlights

- Turnover down (3.0)% to EUR49.8 billion with foreign exchange (5.9)%
and net acquisitions & disposals (1.1)%

- Underlying sales growth 4.3% with volume 2.5% and price 1.8%

- Emerging markets underlying sales growth 8.7% with volume 4.8%

- Core operating margin up 40bps at 14.1% driven by gross margin up
110bps

- Advertising and promotions up 50bps an increase of around EUR460
million at constant currency

- Free cash flow of EUR3.9billion; core earnings per share up 3% to
EUR1.58


Fourth quarter highlights

- Underlying sales growth 4.1% with volume 2.7% and price 1.4%

- Emerging markets underlying sales growth 8.4% with volume 5.3%


         Paul Polman: Chief Executive Officer statement"2013 provides
further evidence of the progress we are making in
transforming Unilever into a sustainable growth company. We have
delivered another year of consistent underlying sales growth and margin
expansion coupled with strong cash flow. This has been achieved despite
significant economic headwinds and highly competitive markets and
reflects the benefits of strong margin accretive innovations and active
cost management.

Looking forward, we anticipate ongoing volatility in the external
environment and are positioning Unilever accordingly. Although the
investments we have made over the last five years ensure that we are
well placed, we are determined to make Unilever even more agile and to
fund further growth opportunities by driving out complexity and cost.

Once again, we remain focused on delivering profitable volume growth
ahead of our markets, steady and sustainable core operating margin
improvement and strong cash flow."


Key Financials (unaudited)
                                          Full Year 2013
Current Rates

Underlying Sales Growth (*)                      4.3%

Turnover                                 EUR49.8bn    -3.0%

Operating Profit                          EUR7.5bn      +8%

Net Profit                                EUR5.3bn      +9%

Core earnings per share (*)                EUR1.58      +3%

Diluted earnings per share                 EUR1.66     +11%

Quarterly dividend payable in March 2014 EUR0.269 per share

(*) Underlying sales growth and core earnings per share are non-GAAP
measures (see pages 5 and 6). 21
January 2014


                  OPERATIONAL REVIEW CATEGORIES

            Fourth Quarter 2013      Full Year 2013

                                                            Change in
(unaudited) Turnover USG   UVG   UPG Turnover USG UVG   UPG   core
                                                            operating
                                                              margin

            EURbn      %     %     %   EURbn    %   %     %    bps

Unilever    11.8     4.1   2.7   1.4    49.8  4.3  2.5  1.8    40
Total

Personal     4.5     7.3   6.1   1.2    18.1  7.3  5.5  1.7    80
Care

Foods        3.5     1.0   0.6   0.4    13.4  0.3 (0.6) 0.9    20

Refreshment  1.7    (1.2) (4.3)  3.3     9.4  1.1 (1.8) 2.9   (20)

Home Care    2.1     6.5   4.7   1.8     8.9  8.0  5.7  2.1    60

Our markets: Growth continued to slow in emerging markets as a result
of the impact of economic uncertainty and currency depreciation on
consumer demand. Developed markets remained weak with little sign of
any overall improvement despite the more positive macro-economic
indicators in recent months.

Unilever overall performance: We delivered another quarter of growth
ahead of our markets. Our business in emerging markets grew 8.4% driven
by underlying volume growth of 5.3%. In developed markets we declined
(1.7)% and within this both Personal Care and Home Care reported
growth.

For the full year gross margin increased 110bps to 41.2% at constant
exchange rates. This reflected the impact of margin accretive
innovation, disposal of low gross margin businesses and disciplined
savings programmes. Advertising and promotions expenditure was up 50
bps, an increase of around EUR460m, as we invested to build our brands
for the long term. Overheads increased by 20bps primarily due to
favourable one-off items in the prior year. Core operating margin was
up 40bps at 14.1%.

Personal Care

Hair care growth in the quarter was underpinned by strong performances
from our global brands Dove, TRESemme, Sunsilk and Clear. TRESemme
benefited from launches into countries such as India and Indonesia as
well as the success of the Keratin Smooth product range. Dove Repair
Expertise is now in more than 50 markets, Toni&Guy was launched into
the United States and Lux hair was relaunched in Japan and China with
good initial results.

Skin cleansing growth highlights included Dove Nutrium Moisture shower
gels, including the Purely Pampering range, Lifebuoy Clini-Care10
coupled with handwashing market development activities and the launch
of Lux Fine Fragrance body wash. In skin care Vaseline Spray and Go
continued to grow strongly and Dove was driven by the Dove Men+Care
face range and the new Dove facial cleansing range with DEFI technology
launched in Japan. Pond's BB+ cream made good progress whilst the
Pond's Men range in Indonesia and Thailand is leading the development
of the male segment of the market.

Deodorants grew ahead of our markets supported by the success of the
Rexona Do:More campaign and the MotionSense technology now available in
both male and female versions. Axe Apollo established itself as a very
successful variant and compressed deodorants have driven growth ahead
of the market whilst delivering significant environmental benefits.
Oral care saw the continuation of the successful Brush Day and Night
campaign, which is now in 15 countries, and successful innovations such
as Pepsodent Germicheck+ and Zhong Hua Porcelain White.

Full year core operating margin was up 80bps entirely driven by higher
gross margin.

Foods

Although spreads sales were down in the quarter, we have seen an
improvement in performance throughout the year. We saw a positive
response to the Rama with Butter in Germany, Bertolli melange in
Belgium, the relaunch of Flora in the UK and the Simply Delicious clean
label variants of Country Crock and I can't believe it's not Butter in
the United States. Nevertheless, spreads sales overall were down due to
declining margarine markets. Dressings grew on the back of market
development activities.

Savoury growth was driven by cooking products with Knorr jelly bouillon
steadily building penetration and baking bags doing particularly well
in Latin America with a range of new flavour variants being extended to
Mexico in the quarter. A new vitamin-A enhanced bouillon was launched
in Vietnam and the successful What's for Dinner? market development
campaign was rolled out to Belgium and the Netherlands and has now been
deployed in seven markets. The performance of soups and sauces in
developed markets was weak.

Full year core operating margin was up 20bps supported by increased
gross margin partially offset by higher advertising and promotions.

Refreshment

Refreshment underlying sales declined in the quarter mainly due to ice
cream in North America where we continued to see the impact of the
withdrawal of some low margin products and high levels of low-priced
competition. Elsewhere we saw a good start to the summer ice cream
season in southern hemisphere markets such as Brazil, helped by the
relaunch of our Kibon take home ice cream range and introduction of
Fruttare Mousse.

Tea continued to grow driven by our recent innovations such as the
improved tasting Lipton Yellow Label tea-bags with our patented tea
essence technology. Lipton K-Cups were successfully launched in the
United States and the Brooke Bond brand continued to drive growth in
India. Ades soy drinks performance remained a significant drag on sales
after the product recall earlier in the year but the Soy Force relaunch
started to re-build consumer demand.

Full year core operating margin was down 20bps. Although gross margin
increased, it was impacted by the Ades recall and was insufficient to
offset higher advertising and promotions and overheads.

Home Care

Laundry growth in the quarter was volume-driven, both in fabric
cleaners and fabric conditioners. New concentrated Small & Mighty
liquid detergents with an improved formulation and innovative pack are
now available in 5 markets and Omo with a touch of Comfort
Super-Sensorial range has been successfully launched in Vietnam. Fabric
conditioners growth has been supported by the continued success of the
Aromatherapy range in South East Asia.

Household care grew double digits in the quarter helped by white space
launches such as Cif and Domestos in Brazil and the continued strong
momentum of the dishwash brands. Innovations such as Cif ultrafast
sprays, Domestos Longer Lasting Germ Kill and Sunlight Power of 100
Lemons all contributed to the growth.

Full year core operating margin was up 60bps with higher gross margin
partially offset by higher advertising and promotions.

              OPERATIONAL REVIEW GEOGRAPHICAL AREA


            Fourth Quarter 2013      Full Year 2013

                                                             Change in
(unaudited) Turnover USG   UVG  UPG  Turnover USG   UVG UPG     core
                                                             operating
                                                               margin

            EURbn      %     %    %    EURbn    %     %   %     bps

Unilever    11.8     4.1   2.7  1.4     49.8   4.3   2.5  1.8   40
Total

Asia/AMET/   4.7     6.6   4.4  2.1     20.1   7.8   5.0  2.6   20
RUB

The          3.9     5.2   2.0  3.2     16.2   4.6   1.0  3.5   10
Americas

Europe       3.2    (1.3)  0.9 (2.2)    13.5  (1.1)  0.4 (1.5)  70


Asia/AMET/RUB

Growth improved in quarter four versus quarter three despite slowing
market growth in many countries. We saw a step up in growth in Russia

,
Turkey, China and Indonesia. Australia rounded off the year with a
fourth successive quarter of growth. Growth in other countries such as
Vietnam, Thailand and South Africa remained below historical run rates
as a result of the weaker markets.

Full year core operating margin was up 20bps driven by a significant
improvement in gross margin partially offset by increased advertising
and promotions. Overheads were higher due to the one-off benefit from
property sales in 2012.

The Americas

Latin America finished the year strongly with double digit underlying
sales growth in quarter four underpinned by volume growth. The
implementation of the new information system in Brazil was successfully
completed. North America declined in weak markets mainly due to lower
volumes in spreads and ice cream but Personal Care continued to grow
ahead of the market building on a high comparator in the same period in
2012.

Full year core operating margin was up 10bps with increased gross
margin partially offset by higher advertising and promotions and
overheads.

Europe

Our markets in Europe remain flat with the early signs of stabilisation
in southern Europe offset by slowing growth in northern Europe. Sales
performance, whilst negative, was competitive. Declines in spreads
weighed on performance in Germany and the Netherlands but the United
Kingdom delivered the twenty fifth successive quarter of growth.

Full year core operating margin was up 70bps driven by higher gross
margin and lower overheads which primarily reflect the results of
restructuring activities.

   ADDITIONAL COMMENTARY ON THE FINANCIAL STATEMENTS - FULL YEAR

Finance costs and tax

The cost of financing net borrowings in 2013 was EUR397 million versus
EUR390 million in 2012. The average level of net debt increased
following the acquisition of additional shares in Hindustan Unilever
Limited whilst interest rate movements were favourable. The average
interest rate on borrowings was 3.3% and the average return on cash
deposits was 2.9%. Pensions financing, restated for the impact of the
revision to the accounting standard IAS 19, was a debit of EUR133
million versus a debit of EUR145 million in the prior year.

The effective tax rate was 26.4%, the same as 2012. Our longer term
expectation for the tax rate remains around 26%.

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

Net profit from joint ventures and associates was broadly stable at
EUR113 million despite higher investment behind the Lipton
ready-to-drink tea brand. Income from non-current investments was
higher by EUR28 million, mainly due to the low prior year comparator
which contained an impairment of warrants associated with the disposal
of the US laundry business.

Earnings per share

Core earnings per share increased by 3% to EUR1.58 for the full year,
driven by the growth in core operating margin, partially offset by
negative foreign exchange movements. In constant currency core earnings
per share increased by 10.6%. This measure excludes the impact of
business disposals, acquisition and disposal related costs, impairments
and other one-off items.

Fully diluted earnings per share for the full year was up 11% at
EUR1.66. This included the profits on disposal of the Skippy and Wish-
Bone brands partly offset by a provision for competition
investigations.

Pensions

The net pension deficit was EUR2.0 billion at the end of December 2013
versus EUR3.3 billion as at 31 December 2012, all numbers restated for
the revisions to IAS 19. The reduction in the net pension deficit
reflects the impact of investment returns, in excess of the interest
cost on liabilities, and cash contributions.

Disposals

Business disposals contributed EUR733 million to non-core profits
versus EUR117 million for the full year 2012. This primarily relates to
the disposal of the Skippy and Wish-Bone brands.

Acquisitions and disposal related costs amounted to EUR112 million,
against EUR190 million in the full year 2012.

Free cash flow

Free cash flow was EUR3.9 billion, slightly lower than 2012. The
reduction is due to a lower inflow from working capital which is
measured against a strong performance in 2012 and currency headwinds.
Net capital expenditure was slightly lower than 2012 at 4.1% of
turnover.

Net debt

Closing net debt was EUR8.5 billion versus EUR7.4 billion as at
31 December 2012. The main factor driving the increase was the impact
of a EUR2.5 billion cash outflow to increase the Group's interest in
Hindustan Unilever Limited from 52.48% to 67.28%.

Finance and liquidity

During the year the following bonds matured and were repaid: (i) US
$450 million 3.125% and (ii) EUR750 million 4.875%. On 5 August 2013 we
issued a 7 year EUR750 million bond at 1.75% and on 6 September we
issued US $750 million 2.20% fixed rate notes due March 2019.

                    COMPETITION INVESTIGATIONS

As previously disclosed, along with other consumer products companies
and retail customers, Unilever is involved in a number of ongoing
investigations by national competition authorities. These proceedings
and investigations are at various stages and concern a variety of
product markets. In the second half of 2013 Unilever has recognised
provisions of EUR120 million related to these cases, disclosed within
non-core items.

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
compliance programme on an ongoing basis.

                      NON-GAAP MEASURES

In our financial reporting we use certain measures that are not
recognised under IFRS or other generally accepted accounting principles
(GAAP). We do this because we believe that these measures are useful to
investors and other users of our financial statements in helping them
to understand underlying business performance. Wherever we use such
measures, we make clear that these are not intended as a substitute for
recognised GAAP measures. Wherever appropriate and practical, we
provide reconciliations to relevant GAAP measures. Unilever uses'constant
rate''underlying' and 'core' measures primarily for internal
performance analysis and targeting purposes. The non-GAAP measures
which we apply in our reporting are set out below.

Underlying sales growth (USG)

Underlying Sales Growth or "USG" refers to the increase in turnover for
the period, excluding any change in turnover resulting from
acquisitions, disposals and changes in currency. Acquisitions
and disposals are 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 USG to changes in the GAAP measure turnover is
provided in notes 3 and 4.

Underlying volume growth (UVG)"Underlying Volume Growth" or "UVG" is part
of USG and means, for the
applicable period, the increase in turnover in such period calculated
as the sum of (1) the increase in turnover attributable to the volume
of products sold; and (2) the increase in turnover attributable to the
composition of products sold during such period. UVG therefore excludes
any impact to USG due to changes in prices. The relationship between
the two measures is set out in notes 3 and 4.

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
expenditures and net interest payments and preference dividends paid.
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. Free cash flow 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 FCF to net profit is as follows:



 EUR million                                             Full Year

 (unaudited)                                            2013    2012


Net profit                                              5,263   4,836

Taxation                                                1,851   1,697

Share of net profit of joint ventures/associates
 and other income
 from non-current investments                            (127)    (91)

Net finance costs                                         530     535

Operating profit                                        7,517   6,977


Depreciation, amortisation and impairment               1,151   1,199

Changes in working capital                                200     822

Pensions and similar obligations less payments           (383)   (369)

Provisions less payments                                  126     (43)

Elimination of (profits)/losses on disposals             (725)   (236)

Non-cash charge for share-based compensation              228     153

Other adjustments                                         (15)     13

Cash flow from operating activities                     8,099   8,516

Income tax paid                                        (1,805) (1,680)

Net capital expenditure                                (2,027) (2,143)

Net interest and preference dividends paid               (411)   (360)

Free cash flow                                          3,856   4,333

Net cash flow (used in)/from investing activities      (1,161)   (755)

Net cash flow (used in)/from financing activities      (5,390) (6,622)


Core operating profit (COP), core operating margin (COM) and non-core
items

COP and COM means operating profit and operating margin, respectively,
before the impact of business disposals, acquisition and disposal
related costs, impairments and other one-off items, which we
collectively term non-core items, due to their nature and frequency of
occurrence. The reconciliation of core operating profit to operating
profit is as follows:



 EUR million                  Full Year
(unaudited)                  2013     2012
                                   (Restated)

Operating profit            7,517    6,977

Non-core items (see note 2)  (501)      73


Core operating profit       7,016    7,050

Turnover                   49,797   51,324

Operating margin (%)         15.1     13.6

Core operating margin (%)    14.1     13.7


Core EPS

The Group also refers to core earnings per share (core EPS). In
calculating core earnings, net profit attributable to shareholders'
equity is adjusted to eliminate the post tax impact of non-core items.
Refer to note 2 on page 12 for reconciliation of core earnings to net
profit attributable to shareholders' equity.

Net debt

Net debt is defined as the excess of total financial liabilities,
excluding trade and other payables, over cash, cash equivalents and
current financial assets, excluding trade and other receivables. It 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.

The reconciliation of net debt to the GAAP measure total financial
liabilities is as follows:

EUR million                                         As at      As at
                                                      31         31
                                                   December   December
(unaudited)                                          2013       2012

Total financial liabilities                        (11,501)   (10,221)

 Current financial liabilities                      (4,010)    (2,656)

 Non-current financial liabilities                  (7,491)    (7,565)

Cash and cash equivalents as per balance sheet       2,285      2,465

 Cash and cash equivalents as per cash flow
 statement                                           2,044      2,217

 Add bank overdrafts deducted therein                  241        248

Other financial assets                                 760        401

Net debt                                            (8,456)    (7,355)


                      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; increasing competitive pressures; Unilever's investment
choices in its portfolio management; inability to find sustainable
solutions to support long-term growth; customer relationships; the
recruitment and retention of talented employees; disruptions in our
supply chain; the cost of raw materials and commodities; secure and
reliable IT infrastructure; successful execution of acquisitions,
divestitures and business transformation projects; economic and
political risks and natural disasters; the debt crisis in Europe;
financial risks; failure to meet high product safety and ethical
standards; and managing regulatory, tax and legal matters. Further
details of potential risks and uncertainties affecting the Group are
described in the Group's filings with the London Stock Exchange, NYSE
Euronext in Amsterdam and the US Securities and Exchange Commission,
including the Group's Annual Report on Form 20-F for the year ended 31
December 2012 and Annual Report and Accounts 2012. 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.

                            ENQUIRIES

Media: Media Relations Team
UK +44 20 7822 6719  trevor.gorin@unilever.com
NL +31 10 217 4844   flip.dotsch@unilever.com

Investors: Investor Relations Team
+44 20 7822 6830   investor.relations@unilever.com

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

www.unilever.com/ourcompany/investorcentre/results/quarterlyresults/default.asp


The web cast can also be viewed from the Unilever Investor Relations
app which you can download from:

http://itunes.apple.com/us/app/unilever-investor-centre-app/id483403509?mt=8&ign-mpt=uo%3D4


Click on, or paste the following link into your web browser, to view
the associated PDF document.
http://www.rns-pdf.londonstockexchange.com/rns/1090Y_1-2014-1-20.pdf





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