In a move to accelerate its Growth Action Plan (GAP), Unilever announced the separation of its Ice Cream division and the launch of a major productivity program. Through these measures, the company will increase its focus on its brand portfolio and more effectively apply its innovation, marketing, and go-to-market capabilities.
“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," Hein Schumacher, Chief Executive Officer, said. “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 program in consultation with employee representatives, and with respect and care for those of our people who are impacted."
Ice Cream has a very different operating model, and as a result, Unilever’s Board of Directors decided that the division's separation best serves the future growth of both Ice Cream and Unilever, a release explained.
Following separation, Unilever will become a simpler, more focused company, operating four Business Groups across Beauty and Wellbeing, Personal Care, Home Care, and Nutrition. These Business Groups have complementary routes to market and/or R&D, manufacturing, and distribution systems across both developed markets and Unilever’s extensive emerging markets footprint.
In addition to the portfolio changes, Unilever intends to launch a comprehensive productivity program, driving focus and faster growth through a leaner and more accountable organization enabled by investment in technology.
The productivity program is anticipated to deliver total cost savings of around €800 million ($868.9 million) over the next three years, more than offsetting estimated operational dis-synergies from the separation of Ice Cream.
“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,” Ian Meakins, Chair, commented. “The separation of Ice Cream and the delivery of the productivity program 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.”
To read more about these changes, click here.
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