Unilever To Separate Ice Cream, Launch Productivity Programme; To Cut 7,500 Jobs

(RTTNews) - Consumer goods major Unilever Plc. (ULVR.L, UL) announced Tuesday its plans to seperate Ice Cream division, and to launch a major productivity programme to drive faster growth and higher margin. The steps are part of its decision to accelerate its Growth Action Plan.

Ice Cream separation activity will begin immediately, with full separation expected by the end of 2025.

The proposed changes are expected to impact around 7,500 predominantly office-based roles globally. The total restructuring costs are now anticipated to be around 1.2% of Group turnover for the next three years, up from the around 1% of Group turnover previously communicated. These proposals will be subject to consultation.

The productivity programme is anticipated to deliver total cost savings of around 800 million euros over the next three years, more than offsetting estimated operational dis-synergies from the separation of Ice Cream.

The company said it needs to be increasingly focused on a portfolio of superior brands with strong positions that have complementary operating models, while Ice Cream has a very different operating model.

Following the planned separation, Unilever will become a simpler, more focused company, operating four Business Groups across Beauty & Wellbeing, Personal Care, Home Care and Nutrition.

Further, Ice Cream will be separated as a standalone, world-leading business with brands that together delivered turnover of 7.9 billion euros in 2023. Unilever said its Board is confident that the future growth potential of Ice Cream will be better delivered under a different ownership structure.

The Ice Cream business has five of the top 10 selling global ice cream brands including Wall's, Magnum and Ben & Jerry's, with exposure in both the in-home and out-of-home segments.

It is expected that after separating Ice Cream and implementing the productivity programme, Unilever will have a structurally higher margin. Post separation, Unilever aims to deliver mid-single digit underlying sales growth and modest margin improvement.