Chilling Changes: Unilever To Separate Iconic Ice Cream Brands In Strategic Shake-Up

Author: Shivani Kumaresan | March 19, 2024 06:16am

Consumer giant Unilever plc (NYSE:UL) plans to separate its Ice Cream business and focus on a portfolio of brands with strong positions in attractive categories with complementary operating models.

Ice Cream has a very different operating model, and as a result, the Board has decided that the separation of Ice Cream best serves the future growth.

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

The separation of Ice Cream will create a business, with brands that together delivered a turnover of €7.9 billion in 2023.

Following the demerger, Unilever will become simpler by operating four Business Groups across Beauty & Wellbeing, Personal Care, Home Care, and Nutrition. 

This will assist Unilever's management in accelerating the implementation of its Growth Action Plan (GAP), which was announced in October 2023.

The separation activities will begin immediately, with full separation expected by the end of 2025.

Also, Unilever intends to launch a productivity program, which is anticipated to deliver total cost savings of around €800 million over the next three years.

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

"The separation of Ice Cream and the delivery of the productivity programme will help create a simpler, more focused, and higher performing Unilever," said Chair Ian Meakins.

The total restructuring costs are expected to be around 1.2% of group turnover for the next three years.

Post separation, Unilever aims to deliver mid-single-digit underlying sales growth and modest margin improvement.

Price Action: UL shares are trading higher by 3.17% at $50.06 in premarket on the last check Tuesday.

Photo via Wikimedia Commons

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