London, England – Consumer goods giant Unilever announced a major restructuring plan that sent its shares soaring by 4.1% in early trading, reflecting investor optimism about the company’s future direction. The restructuring aims to simplify Unilever’s operations and focus on four distinct business divisions: beauty and wellbeing, personal care, home care, and nutrition. This move is part of Unilever’s strategy to streamline its operations and increase efficiency, with cost savings estimated at around 800 million euros ($868.3 million).
The decision to restructure comes under the leadership of CEO Hein Schumacher, who took over the reins of the company in July 2023. Unilever has been under pressure from investors to make changes as its share price has fluctuated, leading to a 6% decline over the past year. The plan to spin-off its ice cream division, which accounted for 13% of the company’s total revenues in 2023, aims to unlock value and allow the business to perform better as a standalone entity.
Investors and analysts are closely watching the restructuring efforts, with questions raised about the potential impact on Unilever’s overall performance. Chris Beckett, head of equity research at Quilter Cheviot, expressed skepticism about whether the demerger of the ice cream business would significantly alter the company’s growth trajectory. Previous moves, such as the sale of Unilever’s tea business, did not lead to a transformative impact, raising doubts about the long-term effects of the latest restructuring.
The Ben & Jerry’s brand, owned by Unilever, has also been a source of controversy for the company, with its stance on political issues drawing scrutiny. In 2023, Unilever faced legal challenges over the brand’s decision to stop selling ice cream in Israeli-occupied Palestinian territories. Despite these challenges, Unilever remains committed to its restructuring efforts and believes that the changes will position the company for long-term success. The completion of the restructuring plan is expected by the end of 2025, marking a significant milestone in Unilever’s evolution as a global consumer goods leader.