Food and Beverage Business
Finance

Unilever plans to spin off its ice cream business.

Unilever plans to spin off its ice cream business. Unilever Food and Beverage Business

Unilever has announced plans to separate its ice cream business from the company in order to create a more focused and operational entity. The world’s largest producer of ice cream will demerge the assets into a listed company, aiming to enhance operational and financial flexibility. The company stated that this separation will allow it to concentrate on its core businesses by focusing on brands with global reach and significant growth potential.

Furthermore, Unilever expects the separation to result in higher margins and mid-single-digit sales growth. The process of separating the business commences immediately, with completion targeted by the end of 2025. In addition to the business spin-off, Unilever has introduced a productivity program to cut costs by €800m by 2027. This restructuring is expected to impact 7,500 employees, primarily in office-based positions.

Hein Schumacher, CEO of Unilever, emphasized the company’s commitment to fewer, more impactful initiatives under the Growth Action Plan. The restructuring aims to simplify the portfolio, enhance productivity, and position Unilever as a leading consumer goods company.

Meanwhile, the ice cream segment currently contributes 13% of Unilever’s annual turnover. Despite a challenging year in 2023, with flat revenue growth, the company saw underlying sales growth in its ice cream business. Unilever is taking steps to address the cost structure of its ice cream unit and counter competition from other ice cream-focused players.

The decision to spin off the ice cream business aligns with Unilever’s strategy to streamline operations and create a higher-performing organization. This move is expected to result in a world-leading ice cream business with promising growth prospects. The company’s ongoing efforts to optimize its portfolio and productivity demonstrate its commitment to sustainable growth and profitability.

In conclusion, Unilever’s decision to separate its ice cream business reflects a strategic shift towards a more focused and operationally efficient organization. The planned spin-off will allow the company to unlock the potential of its core businesses while creating a standalone ice cream business with strong growth prospects. This move underscores Unilever’s commitment to delivering sustainable growth and enhancing profitability in the food and beverage industry.

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