London/Rotterdam, 25 November 2016.
In our third quarter trading statement we advised that an indirect tax case in Brazil which had been determined in Unilever's favour in a prior judicial review would be heard in a higher court in the fourth quarter.
The case has now been heard and we have received an adverse judgement by the Brazilian judicial court. Whilst Unilever intends to appeal this ruling at the Brazilian Supreme Court, it now needs to either provide a guarantee to the Brazilian government or pay a judicial deposit to the court equating to the potential amount owing, within 30 days of the official court notification. Given any penalty payments are much reduced if a deposit is made, Unilever has decided to pay the judicial deposit of approximately €590m, which will be recognised as a non current financial asset and hence there will be no impact on reported Free Cash Flow.
As we still believe our case remains strong we are continuing to include this in our contingent liabilities and there is no charge to the P&L as a result of this latest judgement.
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Cautionary Statement/Safe Harbour
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