Unilever To Separate Spreads Business - Update

(RTTNews) - Anglo-Dutch consumer goods company Unilever Plc (UN, UL, ULVR.L), said Thursday it would separate its spreads division into a stand-alone company, as part of efforts to boost growth at the struggling division that makes brands such as Flora and Bertolli margarine.

In an investor presentation, Unilever's chief financial officer Jean-Marc Huët said the spreads division will have a separate management team, be able to set its own strategy and will report its own earnings. The new business does not include Hellmann's mayonnaise or Marmite sandwich spread.

The spreads division will operate in developed markets only and will be called Baking, Cooking & Spreading Co. The move to separate the business will would lead to more focus, short decision lines, freedom to take decisions, improved trade-offs, and the leverage from Unilever's scale, the company said.

The spreads business will be fully owned by Unilever with the new business expected to become operational by mid 2015.

The spreads division has been a drag on the company's earnings, as consumers, especially in the developed world, eat less bread nowadays and has cut down on the intake of margarine.

Spreads account for about 7 percent of Unilever's revenue and 27 percent of its foods turnover. In the nine months ended September, underlying sales in the spreads business fell 3.2 percent.

Unilever has been facing challenges such as price deflation in Europe, slowing markets, and less top-line growth, and has been trying to cut down its costs.

UL is trading at $42.12, up $0.14 or 0.33%, on a volume of 432k shares on the NYSE. In London, the stock closed at 2,682.00 pounds, up 6.00 pounds or 0.22%, on a volume of 3.6 million shares.