FX.co ★ Unilever To Separate Ice Cream, Launch Productivity Programme; To Cut 7,500 Jobs

Unilever Plc., a leading consumer goods company, announced its strategy to separate its Ice Cream division and introduce a significant productivity program to facilitate quicker growth and an increased profit margin. This move comes as part of the company's Growth Action Plan.

The process of separating the Ice Cream division will commence immediately, with a complete split expected by the end of 2025. This proposed restructuring will potentially impact approximately 7,500 roles, primarily office-based international positions. Total restructuring expenses over the next three years are now expected to be around 1.2% of the Group turnover, an increase from the estimated 1% previously.

The introduced productivity program is set to yield cost savings of nearly 800 million euros over the next three years, effectively compensating for the anticipated operational dis-synergies resulting from the Ice Cream division's separation. Unilever recognises the need to concentrate more on a superior brand portfolio with strong positions and complementary operating models, viewing the Ice Cream division as having a distinctly different model.

Post separation, Unilever plans to become a simplified, more focused organization, operating across four business groups - Beauty & Well-being, Personal Care, Home Care, and Nutrition.

The Ice Cream division will be transformed into a leading independent business, with brands that, in 2023, contributed a turnover of 7.9 billion euros. Unilever board is optimistic about the Ice Cream division's future growth potential under a different ownership structure. The business includes five of the top ten best-selling global ice cream brands – Wall's, Magnum, and Ben & Jerry's, spanning both in-home and out-of-home sectors.

Upon completing the separation of the Ice Cream division and the application of the productivity program, Unilever expects to have a higher structural margin. The company aims to achieve mid-single digit underlying sales growth with modest margin improvement post separation.