UK – Unilever, a British multinational fast-moving consumer goods company has unveiled a strategic move to accelerate its Growth Action Plan (GAP) by announcing the separation of its Ice Cream division alongside the launch of a comprehensive productivity program.
This initiative aims to streamline operations and enhance focus on high-potential brands and categories.
The decision to separate the Ice Cream business stems from Unilever’s ambition to concentrate on a portfolio of exceptionally strong brands with leading positions in highly appealing categories.
Recognizing the distinct operational model of Ice Cream, the Unilever Board concluded that a separation would best serve the future interests of both Ice Cream and Unilever.
Following the separation, Unilever will transition into a more streamlined organization, operating across four core Business Groups encompassing Beauty & Wellbeing, Personal Care, Home Care, and Nutrition.
These groups are strategically aligned to leverage complementary routes to market, research and development, manufacturing, and distribution systems across global markets.
The move to separate Ice Cream is expected to facilitate the swift implementation of Unilever’s GAP, introduced in October 2023.
This initiative will focus on refining operations for sustained top-line growth, increased productivity, and a more robust performance culture.
Ice Cream, boasting a turnover of €7.9 billion in 2023 and home to globally recognized brands like Wall’s, Magnum, and Ben & Jerry’s, is poised to thrive under new leadership.
Operational enhancements including productivity improvements, product streamlining, and significant investments in innovation are already underway to drive stronger performance.
The separation is likely to take the form of a demerger, with Unilever exploring alternative separation routes to maximize shareholder value.
Separation activities will commence immediately, with completion expected by the end of 2025. Further details will be communicated in due course.
Meanwhile, Unilever is set to launch a comprehensive productivity program aimed at unlocking efficiencies and driving faster growth.
Anticipated to deliver approximately €800 million in total cost savings over the next three years, the program will offset operational dis-synergies from the separation.
These savings will fuel accelerated investments in brand development, research and development, and margin improvement initiatives.
However, the shifts will not come without their impact. Around 7,500 predominantly office-based roles globally are expected to be affected by the proposed changes, with restructuring costs estimated at around 1.2% of Group turnover for the next three years.
Ian Meakins, Chair of Unilever, expressed confidence in the transformative potential of these measures, emphasizing the commitment to delivering improved results for stakeholders.
In addition, Hein Schumacher, CEO of Unilever, highlighted the company’s dedication to driving sustainable growth and profitability through focused portfolio management and enhanced operational efficiency.
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