Thursday, April 11, 2024

Unilever reveals plans to split off Ice Cream business

Unilever has revealed steps to accelerate its Growth Action Plan (GAP) through the separation of its Ice Cream business and the launch of a productivity programme.

The business has five of the top 10 selling global ice cream brands including Wall’s, Magnum and Ben & Jerry’s.

It comes as Unilever looks to create a portfolio of brands that have more complementary operating models. “Ice Cream has a very different operating model,” Unilever noted, “and as a result the Board has decided that the separation of Ice Cream best serves the future growth of both Ice Cream and Unilever.”

Following separation, Unilever will operate four Business Groups across Beauty & Wellbeing, Personal Care, Home Care and Nutrition.

A demerger of Ice Cream is the most likely separation route, with full separation expected by the end of 2025.

In addition to the portfolio changes, Unilever intends to launch a comprehensive productivity programme anticipated to deliver total cost savings of around €800 million over the next three years, which it says will more than offset estimated operational dis-synergies from the separation of Ice Cream.

The programme is hoped to reduce complexity and duplication through technology-led interventions, process standardisation and operational centres of excellence to drive efficiencies.

The proposed changes are expected to impact around 7,500 predominantly office-based roles globally.

Ian Meakins, chair of Unilever, said: “The Board is determined to transform Unilever into a higher-growth, higher-margin business that will deliver consistently for all stakeholders. Improving our performance and sharpening our portfolio are key to delivering the improved results we believe Unilever can achieve.

“The separation of Ice Cream and the delivery of the productivity programme will help create a simpler, more focused, and higher performing Unilever. It will also create a world-leading ice cream business, with strong growth prospects and an exciting future as a standalone business.”

Hein Schumacher, CEO of Unilever, said: “Under the Growth Action Plan we have committed to do fewer things, better, and with greater impact. The changes we are announcing today will help us accelerate that plan, focusing our business and our resources on global or scalable brands where we can apply our leading innovation, technology and go-to-market capabilities across complementary operating models.

“Simplifying our portfolio and driving greater productivity will allow us to further unlock the potential of this business, supporting our ambition to position Unilever as a world-leading consumer goods company delivering strong, sustainable growth and enhanced profitability.

“We are committed to carrying out our productivity programme in consultation with employee representatives, and with respect and care for those of our people who are impacted.”

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