STAYING AHEAD OF THE GAME THROUGH INNOVATION; OPEN INNOVATION

DR JONATHAN HAGUE

VICE PRESIDENT OPEN INNOVATION

UNILEVER GLOBAL R&D

OUR COMPANY

EUROPE

● €13.6 BILLION

TURNOVER

● 2.6% UNDERLYING

VOLUME GROWTH

● 26% OF GROUP

TURNOVER

ASIA/AMET/RUB

● €22.4 BILLION TURNOVER

● 3.0% UNDERLYING VOLUME

GROWTH

● 42% OF GROUP TURNOVER

THE AMERICAS

● €17.3 BILLION

TURNOVER

● 0.4% UNDERLYING

VOLUME GROWTH

● 32% OF GROUP

TURNOVER

2015 TURNOVER = €53.3 BN

UNILEVER REACH

FAMOUS FOR MANY OF THE WORLD’S FAVOURITE BRANDS

MAKE SUSTAINABLE LIVING COMMONPLACE

OUR VISION TO DOUBLE THE SIZE

OF OUR BUSINESS,

WHILST REDUCING

OUR ENVIRONMENTAL

FOOTPRINT AND

INCREASING OUR

POSITIVE SOCIAL

IMPACT

POSITIVE SOCIAL IMPACT

DOUBLE THE

BUSINESS

REDUCE ENVIRONMENTAL

FOOTPRINT

3 BIG GOALS BY 2020 ● HELP MORE THAN

1 BILLION PEOPLE IMPROVE THEIR HEALTH & WELL-BEING

● HALVE ENVIRONMENTAL FOOTPRINT OF OUR PRODUCTS

● ENHANCE THE LIVELIHOODS OF MILLIONS OF PEOPLE

2x THE RATE OF

GROWTH

50% OF UNILEVER’S

GROWTH

MORE

PROFITABL

BRANDS WITH A POWERFUL PURPOSE ENJOY

SUSTAINABLE GROWTH

SUSTAINABLE

LIVING

BRANDS

SUSTAINABLE LIVING

PURPOSE

SUSTAINABLE LIVING

PRODUCTS

= +

SUSTAINABLE LIVING BRANDS HELP GROW OUR BUSINESS

238,000 WOMEN WITH

ACCESS TO TRAINING &

SKILLS

800,000 SMALLHOLDERS

HELPED & TRAINED

55% SUSTAINABLY

SOURCED

397 MILLION HELP TO IMPROVE HEALTH & HYGIENE

-2% WATER -12% WASTE

+4% GHG UNDERLYING

SALES GROWTH

+21%

MAKING PROGRESS 2010-2014

INNOVATION IN OUR COMPANY

INNOVATION IS IN THE HEART OF THE STRATEGY

INNOVATION GROWING THE CORE BUSINESS

Iron-fortified

Knorr Cubes

Lifebuoy with

Activ Naturol Shield

Dry Spray

Aerosol Deodorants

Cooking ingredients up

>50% in 5 yrs in

emerging

markets

15% growth in 2014 Launch in

US in 2015

35%

2013

INNOVATION DELIVERING RESULTS

Stronger Pipeline Bigger

innovations

More Benefits

2013 Now 2013 Now

+20% +30%

Incremental Turnover

In the funnel

Average project

size

45%

Now

% Projects using

New Technologies

75% of Innovations are Margin Accretive

OPEN INNOVATION

OUR CHALLENGE

POSITIVE SOCIAL IMPACT

DOUBLE THE

BUSINESS

REDUCE ENVIRONMENTAL

FOOTPRINT 2012 2013 2014

1450

1500

1550

1600

1650

1.8

2.3

2.8

2004 2006 2008 2010 2012 2014 2016

Unilever R&D Spend % Turnover

Ambition remains

High

R&D Spend falling

In Real Terms

Global R&D Spend up

- Biotech

- Advanced materials

- ICT

Global Gross R&D

($Bn)

*Source Battelle Global R&D forecast 2014

MAGNIFYING THE IMPACT OF R&D

Digital R&D

High Throughput

Modelling and

Simulation

Fit to win

Organization

Sharper Category

Innovation Choices

Partnership and Open

Innovation

OUR OPEN INNOVATION MANDATE

Strategic

Science

Group

Categories HC, PC, Foods, Refreshments

Program

Owners

Open

Innovation

Team

Drives

capabilities

Scouting / Technology Intelligence

Deal Architecture

Cross Unilever Strategic Partnerships

IP Agreements Processes and IT

Training

New Capabilities

OPEN INNOVATION IMPACT

30

50

70

90

2008 2010 2012 2014 2016

% Deliverables OI Enabled

OI Reliant 54%

Not Reliant

46%

0%

0%

Pipeline Incremental Turnover Reliant on Open Innovation

We have saturated our program

Open Innovation (as we define it) is fully embedded

Focus Now ; Simpler, Faster, More Networked, More Digital, More

Leverage, More Value

WHAT’S WORKED FOR R&D

Partner to Win Science Grid

Innovation Ports Site Ecosystems

PARTNER TO WIN - THE CO – CREATION MODEL Targeted Encapsulation

Unilever

IP on fabric

molecular surface

recognition

Partner

IP on Fragrance

Capsules

Fragrance Design

Winning high performing

fragrance encapsulates

SCIENCE GRID - THE MULTIPLIER EFFECT

World Leading > £ 200 M

Million Investment in

High Performance

Computing

Data Analytics

£ X M

Real world applications

Of In Silico First - € Billions

In potential value creation

Translational R&D

Computer Aided

Formulation

Unilever’s spend

accesses a

capability that is

multiple times our

investment

Commercial impact

In Unilever and to

UK PLC Is CRITICAL

to Hartree

Optimiser

Engines

Virtual

Engineering

Processing

Factory Line

Optimization

Virtual

Engineering

Packaging

SITE ECOSYSTEMS CO - INVESTMENT FOR SCALE

Centre for

Materials

Discovery

Micro

Biorefinery

High

Throughput

Formulation

Centre

Advanced

Manufacturing

Centre

Materials

Innovation

Factory

2016 Operational

Over £130 Million invested in Next Gen Capabilities by Unilever and

its Partners

Open Facilities – UK Government has contributed > £20 Million

WHAT’S NOT WORKED FOR R&D

Submissions Portal for unsolicited

product ideas

> 2,000 since launch

Nothing of substance

An Independent New Business

Unit Aimed at Radical /

Disruptive technology Innovation

Incubation Investment horizon too

long + uncertain

THE FOUNDRY

OUR PLATFORM FOR

COLLABORATING OUR FRAMEWORK FOR

EXPERIMENTATION ENABLING OUR BRANDS &

FUNCTIONS TO PIONEER

foundry.Unilever.com

@UnileverFoundry

COLLABORATING WITH INNOVATORS TO MAKE SUSTAINABLE LIVING COMMONPLACE

A framework for experimentation

Pitch – Pilot - Partner

The Brief The Pitch

The Pilot The Partnership

4500

+ applications

received

350+

mentors registered

25+

brands involved

$20m+

invested into pilots

100+ startups piloted

48+ start-ups being

scaled-up

Still at the beginning of the journey

THE LAST WORD ….

Foundry Overview film:

https://youtu.be/MpZGN3vu7wU

THERE’S NEVER BEEN A BETTER TIME TO CREATE A BRIGHTER FUTURE

THANK YOU