STRONG MOMENTUM: VOLUME GROWTH ACCELERATES TO 7.6%
First Quarter highlights
 Underlying volume growth 7.6%. Underlying sales growth also accelerated to 4.1%. Underlying price growth was (3.3)% reflecting pricing action taken in 2009; in-quarter pricing was stable.
 Underlying operating margin up 60bps driven by improved gross margins and lower overhead costs with advertising and promotions spend up by 220bps behind a strong innovation programme.
 Net cash flow from operating activities up by €666m with over €300m from improved management of working capital.
 Fully diluted earnings per share increased by 32%; 2nd quarterly dividend will be increased by 6.7% over Quarter 1 to €0.208 per share.

Chief Executive Officer
“We show strong momentum across all geographies with continued strengthening of our competitive position in line with our strategy. Growth was supported by the quickening pace of innovation and the introduction of brands such as Cif, Domestos, Lifebuoy and Lipton into new markets. Growth has been especially strong in emerging markets despite the heightened competitive activity. We have continued to invest more in advertising and promotions to build brand equities and support the rollout of our innovations.
The improvement in underlying operating margin shows the impact of extensive savings programmes, lower commodity costs, and the benefits of volume leverage.
We will face a tougher environment as the year progresses and thus it is more important than ever to stay focused on the consumer. Commodity costs will increase in the second half, economies remain sluggish and competitive
intensity will remain high. We will continue to focus on profitable volume growth, whilst delivering a steady and sustainable improvement in operating margin and strong cash flow. Importantly, we will be doing all of this while
continuing to improve our overall environmental footprint.”

Key Financials (unaudited)
Current rates First Quarter 2010
Turnover €10,143m 6.7%
Underlying sales growth* 4.1%
Operating profit €1,438m 17%
Net profit €1,055m 31%
Diluted Earnings per share €0.34 32%
Dividends: Second Quarterly Interim Dividend € 0.208 per share

(*) Underlying sales growth and underlying operating margin are non-GAAP measures, see note 2 on Page 11 for further explanation.

ADDITIONAL COMMENTARY ON THE FINANCIAL STATEMENTS
Restructuring
Restructuring in the quarter at €119m amounted to 120bps of Turnover. We continue to look for opportunities to accelerate restructuring to drive efficiency in this highly competitive environment. We now expect that full year
restructuring will most likely exceed the 50-100bps guidance given previously.

Finance costs and tax
The cost of financing net borrowings was €109 million, €29 million lower than last year. The interest rate on net borrowings was 6.5%, compared with 5.9% last year reflecting the impact of currencies and increased cash levels
earning low rates of interest. There was a small credit for pensions financing compared with a net charge of €45 million in the previous year.
The effective tax rate for the quarter was 24.5%, compared with 27.0% for 2009 primarily reflecting favourable prior year tax settlements.
Joint ventures, associates and other income from non-current investments
Net profit from joint ventures and associates, together with other income from non-current investments contributed €57 million compared to €39 million last year. The main factors behind the increase were the partial redemption of a portion of the preferred shares that had been held as consideration for the sale of Unilever’s US laundry business in 2008 and a fair value adjustment on the warrants in Johnson Diversey.

Earnings per share
Fully diluted earnings per share at €0.34 for the quarter were 32% higher than the same period in 2009. The principal driver was improved underlying profit, as well as lower pension costs, lower restructuring costs and a
lower tax rate.

Cash Flow and Net Debt
Net cash from operating activities at €588m was up €666m versus the prior year. This was mainly driven by an improved level of working capital which contributed €329m to the improved cash flow.
Capital expenditure increased by €121m as we invested in manufacturing capacities to support future growth in markets such as Russia, Indonesia, Vietnam, Mexico and South Africa.
Net Debt at €7.1 billion, was up from €6.4 billion as at 31st December 2009, reflecting the above and the move to quarterly interim dividends with the first payment made in March 2010.

Pensions
The net deficit in pension schemes was broadly stable at €2.7 billion reflecting lower discount rates only partially offset by higher asset values.

DIVIDEND
As agreed at the 2009 Annual General Meetings, Unilever moved to the payment of quarterly dividends with effect from 1 January 2010. The first quarterly interim dividend was paid in March 2010, and for the remainder of
2010, the quarterly interim dividends will be paid in June, September and December 2010.
The Boards have declared a quarterly interim dividend of €0.208. Further details, including amounts payable in sterling and US dollars are given in note 10 on page 15, together with the dividend timetable for the remainder of
2010.

COMPETITION INVESTIGATIONS
As previously reported, in June 2008 the European Commission initiated an investigation into potential competition law infringements in the European Union in relation to consumer detergents. Unilever has received a
number of requests for information from the European Commission regarding the investigation and has been subject to unannounced investigations at some of its premises. The investigation is ongoing although no statement of objections against Unilever has been issued to date. It is too early reliably to assess the ultimate resolution or estimate the fines which the Commission will seek to impose on Unilever as a result of this investigation. Therefore no provision has been made. However, substantial fines can be levied as a result of European Commission investigations. Fines imposed in other sectors for violations of competition rules have amounted to hundreds of millions of euros.
As previously reported, in December 2009 Unilever received separate statements of objection from the French competition authority and from the Italian competition authority in connection with investigations into certain
product markets in France and Italy respectively. In April 2010, Unilever received a statement of objections from the Dutch competition authority in relation to its investigation into certain product markets in The Netherlands.
An earlier decision by the Greek authority fining Unilever in relation to alleged restrictions on parallel trade within certain of its contracts with retailers in Greece is under appeal. Provisions have been made, to the extent
appropriate, in relation to these investigations and the fining decision.
In addition and as previously reported, Unilever is involved in a number of other ongoing investigations by national competition authorities. These include investigations in Belgium, France and Germany. These
investigations are at various stages and concern a variety of product markets. In several cases it is not clear that the authorities will seek to impose a fine on Unilever and in others it is too early to be able reasonably to assess
the level of fines which the authorities may seek to impose.
Following a February 2010 decision, a previously reported investigation by the Czech competition authority has been closed as regards Unilever.
It is Unilever’s policy to co-operate fully with the competition authorities in the context of all ongoing investigations. In addition, Unilever reinforces and enhances its internal competition law compliance procedures on an ongoing basis.