Unilever has been struggling with growth, and the British consumer goods giant on Tuesday announced a productivity program that will deliver savings of €800 million over the next three years.
The program includes eliminating 7,500 jobs globally, most of which will be office workers.
Meanwhile, Unilever will spin off its ice cream business, which includes five of the top 10 best-selling brands worldwide, including Wall's, Magnum and Ben & Jerry's.
“The cost savings will further offset the estimated operating dissynergies from the spin-off of the ice cream business. Increasing the net savings from the program beyond the synergies will provide the flexibility to accelerate growth investments behind our brands and research/development and support margin improvement over time.” press release.
headache
There are several options to spin off the ice cream division under consideration, with the possibility of a split and the creation of a new listed company. Unilever sold ice cream for €7.9 billion last year.
Bloomberg He points out that the ice cream business has long been a headache for Unilever, with controversies surrounding political stances at Ben & Jerry's. In December 2022, Unilever reached a settlement with the board of directors of the independent Ben & Jerry's company over licensing the brand in the Israeli-occupied West Bank.
The ice cream separation process begins immediately and is expected to be completed by the end of 2024.
Final size growth
The costs associated with Unilever's restructuring are estimated at approximately 1.2 percent of the group's turnover over the next three years. In 2023, sales will reach 59.6 billion euros.
In the fourth quarter of last year, group sales amounted to 14.2 billion euros. The overall growth of 4.7 percent compared to the same period of the previous year was 4.7 percent, which is slightly higher than expected after sales volumes rose for the first time since 2021. This rise came after consumers, in a period that witnessed the highest inflation rates in decades, resorted to… Extreme pressure. They changed from brands to more “private label” (store chains' own brands).
New CEO
In October last year, new CEO Hein Schumacher launched his plan to continue growing again, a plan that will focus on investments in the group's 30 largest brands, which account for about 75 percent of total revenues. These brands include Hellmann's mayonnaise and Domisto detergents.
Schumacher last year took over the key role from Alan Jopp after activist investor Nelson Peltz bought Unilever and joined the board in the wake of a failed bid to buy GlaxoSmithKline's consumer health division.
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