Unilever to spin off ice cream brands

Unilever is planning to spin off its ice cream business, which includes the Wall’s, Cornetto, Ben & Jerry’s and Magnum brands.

Around 7,500 jobs will also be cut as part of the restructuring.

The board of directors is aiming to “do fewer things better” by focusing on a portfolio of brands within four categories: Beauty & Wellbeing, Personal Care, Home Care and Nutrition.

The Ice Cream division — which reported global sales of €7.9bn (£6.75bn) in 2023 — will operate as a standalone business, with full separation expected by the end of 2025.

Meanwhile, a three-year productivity programme will see the loss of 7,500 predominantly office-based roles across the company’s global operations in a move aimed at saving around €800m (£684m).

Unilever has a global workforce of 128,000, including 6,000 in the UK.

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

Meakins added that the separation of Ice Cream and delivery of the productivity programme will help create “a simpler, more focused and higher performing” group.

Unilever’s food and household goods brands include Comfort, Domestos, Dove, Hellmann’s, Knorr, Lux, Marmite and Vaseline.

Unilever warns of further price rises

Consumer goods giant Unilever said on Thursday that it will continue to increase prices on its household, personal care and food products this year to offset rising input costs.

Price rises are expected to ease in the second half of the year.

Reporting its full-year financial results, Unilever said that its underlying sales growth in 2022 accelerated to 9.0%, with price growth of 11.3% and volumes declining by 2.1% compared with the previous year.

Turnover was up 14.5% to EUR60.1bn, including a currency impact of 6.2% and a 1.0% decrease from disposals net of acquisitions.

Underlying operating profit amounted to EUR9.7bn, up 0.5%, while the underlying operating margin was down 230 basis points to 16.1%.

In 2023, Unilever forecasts that underlying sales growth will be “at least in the upper half” of its multi-year range of 3-5%.

“We will deliver only a modest improvement in underlying operating margin in the full year, as we plan for another year of increased investment, and with cost inflation remaining high, underlying operating margin will be around 16% in the first half,” the company added.

Unilever’s brands include Ben & Jerry’s, Comfort, Domestos, Dove, Hellmann’s, Knorr, Lux, Vaseline and Wall’s.

Unilever to restructure, cutting 1,500 jobs

Around 1,500 jobs are set to go at consumer goods group Unilever in a reorganisation of its business.

The company said the cuts to senior and junior management roles were the result of a simpler, more category-focused organisation. Shopfloor jobs in factories will not be affected.

Unilever’s brands include Domestos bleach and Dove soap, Ben & Jerry’s ice cream, Marmite and Hellman’s mayonnaise.

Moving away from its current matrix structure, Unilever will be organised around five distinct divisions: Beauty & Wellbeing, Personal Care, Home Care, Nutrition, and Ice Cream.

This will enable the business to be more responsive to consumer and channel trends, with clear accountability for delivery, said Unilever CEO Alan Jope.

The announcement came after details were apparently leaked on Monday evening, and followed Unilever’s failed £50bn bid for GlaxoSmithKline’s (GSK) consumer healthcare arm.

GSK had said that the offer “fundamentally undervalued” the business and Unilever refused to raise its bid.

Unilever defends £50bn approach for GSK’s consumer healthcare arm

Consumer goods group Unilever has indicated that it will continue to pursue a mega-merger with the health products business of GlaxoSmithKline (GSK).

GSK has already said that it is looking to divest the healthcare operation. However, it has so far rejected three offers from Unilever, including the latest £50bn approach.

The business — in which Pfizer holds a 32% stake — includes brands such as Aquafresh and Sensodyne toothpaste, Panadol pain relief and Centrum vitamins.

GSK said at the weekend that the offers from Unilever “fundamentally undervalued” the business and its prospects.

Unilever is looking to expand further into the health, beauty and hygiene sectors, and said on Monday that a deal would be a “strong strategic fit”.

Highlighting potential synergies in the oral care and vitamin supplements business, Unilever added: “The acquisition would create scale and a growth platform for the combined portfolio in the US, China and India, with further opportunities in other emerging markets.”

GSK’s share price rose by 5% on Monday morning, while Unilever’s shares were down 6%.