Unilever: Sale of the ice cream division and objective of cost rationalization

Unilever, a global leader in consumer goods, continues to demonstrate its ability to grow and adapt in a rapidly changing environment. The company is implementing strategic initiatives to strengthen its core brands and streamline its operations.

Recent Financial Results

For the first quarter of 2024, Unilever reported underlying sales growth of 4.4%, with volumes increasing by 2.2%. Turnover reached 15 billion euros, marking an increase of 1.4% compared to the previous year, despite a negative impact of 2.0% due to currency fluctuations .

Development of Power Brands

Unilever's Power Brands, which represent 75% of its revenue, led this growth with an underlying sales increase of 6.1%. Brands such as Dove and Vaseline have seen remarkable performance through product innovations and expansions into new markets.

Strategic Initiatives

Unilever is continuing to spin off its ice cream segment, turning it into a standalone company that can better realize its growth potential under a different ownership structure. This separation aims to optimize performance and focus resources on the company's most promising brands.

At the same time, Unilever has launched a productivity program aimed at saving around 800 million euros over the next three years. This program includes technological interventions and process standardization to improve efficiency and reduce complexity of operations. The savings will fund additional investments in brands and research and development, while supporting margin improvements .

Sale of the Ice Cream Division

Unilever's ice cream division, which includes iconic brands such as Wall's, Magnum and Ben & Jerry's, will be spun off to form a standalone company. This division, which generated a turnover of 7.9 billion euros in 2023, has distinct characteristics, such as a supply chain specific to frozen products and marked seasonality. The separation will allow this new entity to better focus on its own growth strategies and optimization of operations.

The separation is expected to be in the form of a demerger or sale, providing operational and financial flexibility for the new company to grow and invest. This approach is part of Unilever's desire to simplify its portfolio and focus on its best-performing segments with the highest growth potential.

Outlook

Unilever maintains its underlying sales growth forecast of between 3% and 5% for 2024, with a slight improvement in underlying operating margins. The combination of the separation of the ice cream business and the productivity program should allow Unilever to focus more on its highest growth segments and strengthen its position as a global leader in consumer goods.

You will find in PJ a presentation file from Unilever.

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