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28 Unilever Annual Report and Accounts 2010
Report of the Directors About Unilever
Financial review 2010 continued
Balance sheet
€ million € million
Goodwill and intangible assets
2010
18,278
2009
17,047
Other non-current assets 10,405 9,158
Current assets 12,484 10,811
Current liabilities (13,606) (11,599)
Total assets less current liabilities 27,561 25,417
Non-current liabilities 12,483 12,881
Shareholders’ equity 14,485 12,065
Non-controlling interest 593 471
Total capital employed
27,561 25,417
Goodwill and intangibles at 31 December 2010 were €1.2 billion
higher than in 2009, as a result of currency movements and the
Sara Lee acquisition, net of disposals, and the movements to
assets held for disposal. The increase in other non-current assets
is mainly due to currency and an increase in property, plant and
equipment to €7.9 billion compared to €6.6 billion in 2009.
Inventories were higher by €0.7 billion and trade and other
receivables were higher by €0.7 billion. Cash and cash equivalents
were €0.3 billion lower at €2.3 billion.
Current liabilities were €2.0 billion higher at €13.6 billion mainly
due to an increase in trade payables and currency movements.
Provisions remained at €0.4 billion.
The overall net liability for all pension arrangements was
€2.1 billion at the end of 2010, down from €2.6 billion at the end
of2009. Funded schemes showed an aggregate deficit of
€0.2 billion and unfunded arrangements a liability of €1.9 billion.
Thereduction in the overall balance sheet liability was due to
cash contributions made and good asset returns over the year
offset by the impact of lower corporate bond rates on the
calculation of pension liabilities.
Shareholders’ equity rose by €2.4 billion in the year. Net profit
added €4.2 billion, with currency and other movements adding
afurther €0.5 billion. Dividends paid in the year totalled
€2.3billion.
Unilever’s contractual obligations at the end of 2010 included
capital expenditure commitments, borrowings, lease
commitments and other commitments. A summary of certain
contractual obligations at 31 December 2010 is provided in the
table below. Further details are set out in the following notes to
the consolidated financial statements: note 10 on page 89,
note 14 on pages 94 and 95, and note 25 on page 115.
Contractual
obligations at 31
€ million
Total
December 2010
€ million € million
Due
within Due in
1 year 1-3 years
€ million
Due in
3-5 years
€
million
Due in
over
5 years
Long-term debt
Interest on financial
liabilities
Operating lease
obligations
(a)
Purchase obligations
Finance leases
Other long-term
commitments
8,003
2,907
1,600
610
357
2,344
958
344
364
493
31
688
2,611
572
500
68
49
1,085
2,017
385
344
26
45
453
2,417
1,606
392
23
232
118
Total
15,821 2,878 4,885 3,270 4,788
(a) For raw and packaging materials and finished goods.
Off-balance sheet arrangements
SIC interpretation 12 ‘Consolidation – Special Purpose Entities’
(SIC 12) requires that entities with which we have relationships
are considered for consolidation in the financial statements based
on relative sharing of economic risks and rewards rather than
based solely on share ownership and voting rights. We
periodically review our contractual arrangements with potential
special purpose entities (SPEs) as defined by SIC 12. The most
recent review has concluded that there are no significant SPE
relationships which are not already appropriately reflected in
the consolidated financial statements. Information concerning
guarantees given by the Group is stated in note 15 on page 99.
Cash flow
€ million € million € million
Net cash flow from
2010 2009 2008
operating activities 5,490 5,774 3,871
Net cash flow from/(used in)
investing activities (1,164) (1,263) 1,415
Net cash flow from/(used in)
financing activities (4,609) (4,301) (3,130)
Net increase/(decrease) in cash
and cash equivalents
(283) 210 2,156
Cash and cash equivalents reduced by €0.4 billion when
translated at average 2010 exchange rates. After recognising the
changes in exchange rates, amounts in the balance sheet at
31 December 2010 were €0.3 billion lower at €2.3 billion.
Net cash flow from operating activities of €5.5 billion was
€0.3 billion lower than in 2009. Cash flow from operating
activities increased €0.1 billion, reflecting higher operating profit
and lower pension payments. Further progress was made in
reducing working capital, building on the strong performance in
2009. Tax payments increased to €1.3 billion. Net capital
expenditure was €0.4 billion higher than in 2009. There was a
net cash outflow from acquisition and disposal activities, primarily
the acquisition of the Sara Lee brands and the disposal of the
Italian frozen foods business. The movement in financing
activities is explained by an increase in dividends paid, an increase
in treasury stock purchases, partially offset by lower net outflow
on third party borrowings.
At 31 December 2010, the net debt position was €6.7 billion, an
increase of €0.3 billion compared to 2009.