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Unilever is home to the world\u2019s most iconic ice cream brands, from Magnum to Ben & Jerry\u2019s.<\/p>\n
In a new overhaul, the company is spinning off its ice cream business, which delivered a \u20ac7.9 billion ($8.6 billion) turnover last year, into a separate unit to ramp up its performance amid activist investor pressure to streamline the business.<\/p>\n
London-headquartered Unilever announced that its ice cream unit, which includes five of the world\u2019s top 10 best-selling brands, \u201chas a very different operating model.\u201d That has prompted the company\u2019s board to separate it from the rest of the company, starting immediately.\u00a0<\/p>\n
The restructuring will be completed by the end of 2025, Unilever said in a statement Tuesday<\/a>.\u00a0\u00a0<\/p>\n \u201cAs a standalone, more focused business, Ice Cream\u2019s management team will have operational and financial flexibility to grow its business,\u201d Unilever said. A \u201cdemerger,\u201d possibly resulting in a newly listed company, was the most likely path for the soon-to-be separate unit.<\/p>\n That\u2019s not the only major change Unilever announced\u2014the company also plans to cut as many as 7,500 \u201coffice-based roles,\u201d as part of a productivity push. Media outlets have reported that a bulk of the jobs slashed will be in London. The company\u2019s total headcount is 128,000 globally<\/a>.<\/p>\n \u201cThe separation of Ice Cream and the delivery of the productivity programme will help create a simpler, more focused, and higher performing Unilever,\u201d Unilever\u2019s chair Ian Maekins said in a statement.\u00a0<\/p>\n The sweeping changes come within a year of Hein Schumacher taking over as CEO, who took on the top role to kickstart the company\u2019s lackluster performance. When Schumacher laid out his plans for Unilever\u2019s future to focus on its 30 strongest brands last year, investors didn\u2019t immediately receive them well<\/a>. However, Schumacher said his strategies were backed by activist investor Nelson Peltz, who joined Unilever\u2019s board in 2022<\/a>.\u00a0\u00a0<\/p>\n Peltz has been known for his aggressive turnaround asks and his interest in consumer-centric companies, including P&G and Disney<\/a>. He\u2019s been building his stake<\/a> at Unilever for a few years now, and has been among those adding pressure on the company to rework its strategy. Peltz\u2019s appointment at the London-based company was seen as a welcome nudge for Unilever to revamp its operations.\u00a0\u00a0\u00a0\u00a0\u00a0<\/p>\n The Dove soap and Marmite-maker has been criticized over the years for its awry GSK-Pfizer bid in 2022 under former CEO Alan Jope, as well as its inability to pull business\u2019s margins back up after the COVID-19 pandemic.\u00a0<\/p>\n The company\u2019s underlying sales growth was up 7% in 2023<\/a>, but Unilever reported a 0.8% revenue drop for that period. When the consumer goods giant announced its results last month, Schumacher said its \u201ccompetitiveness remains disappointing and overall performance needs to improve.\u201d<\/p>\n Unilever didn\u2019t immediately return Fortune<\/em>\u2019s request for comment.<\/p>\n Tuesday\u2019s announcement marks a sizable undertaking for Unilever as it brings its restructuring and simplifying plans to fruition. By separating its ice cream business, Unilever could achieve higher margins, the company said.\u00a0<\/p>\n For its part, some of Unilever\u2019s ice cream brands haven\u2019t been free of troubles. Ben & Jerry\u2019s has been vocal<\/a> in the past about its political stance by boycotting Israeli suppliers and pulling away from Israel-occupied territories. In January, Ben & Jerry\u2019s called for a \u201cpermanent and immediate ceasefire\u201d in Gaza<\/a>\u2014a stance that few consumer brands openly took, even if their sales were being hurt by the ongoing war between Israel and Hamas.\u00a0<\/p>\n British investing platform AJ Bell\u2019s Russ Mould said in a Tuesday note that one possible benefit of Unilever\u2019s separation of the ice cream business is \u201cit might quieten the \u2018go woke and go broke\u2019 noise.\u201d Mould said the approach looked sound even otherwise, and could bring the company closer to achieving some of its goals.<\/p>\n \u201cLess than a year into his tenure, CEO Hein Schumacher is certainly making his mark on the group,\u201d Mould said. Schumacher will ultimately be judged on his ability to revive the fortunes of the remaining \u2018simplified\u2019 operation. Job cuts and efficiency savings are straight out of the corporate turnaround playbook but that doesn\u2019t mean they are without any merit.<\/p>\n<\/div>\nUnilever pulling up<\/strong> its socks<\/h2>\n
Tubs of trouble<\/strong><\/h2>\n
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