Unilever PLC on Tuesday said it plans to spin off its ice cream business and cut 7,500 jobs as it picks up the pace of its reorganisation plans.
Shares in Unilever rose 3.9% to 3,960.50 pence in London on Tuesday morning.
The owner of Marmite, Dove soaps and Domestos announced the move alongside proposals to accelerate its Growth Action Plan.
Unilever intends to launch a comprehensive productivity programme which it anticipated will deliver total cost savings of around €800 million over the next three years, more than offsetting estimated operational dis-synergies from spinning off the ice cream business.
The changes are expected to impact around 7,500 jobs, with total restructuring costs now anticipated to be around 1.2% of group turnover for the next three years, up from around 1% of turnover previously guided.
Chief Executive Hein Schumacher said: ‘Under the Growth Action Plan we have committed to do fewer things, better, and with greater impact. The changes we are announcing today will help us accelerate that plan, focusing our business and our resources on global or scalable brands.’
Unilever, which owns five of the top 10 selling global ice cream brands including Wall’s, Magnum and Ben & Jerry’s, said the separation of ice cream will assist in the implementation of the GAP.
It said it was confident that the future growth potential of ice cream will be better delivered under a different ownership structure, noting the business has distinct characteristics compared with Unilever’s other operating businesses.
Unilever said the separation of ice cream will create a world-leading business with brands that together delivered turnover of €7.9 billion in 2023.
A demerger is the most likely separation route, Unilever said, although other options will be considered to maximise returns for shareholders.
Full separation is expected by the end of 2025.
Following separation, Unilever said it will become a simpler, more focused company, operating four business groups across beauty & wellbeing, personal care, home care and nutrition.
‘Unilever should be increasingly focused on a portfolio of unmissably superior brands with strong positions in highly attractive categories that have complementary operating models,’ the company said in a statement.
After separating ice cream and implementing the productivity programme, Unilever said it aims to deliver mid-single digit underlying sales growth and modest margin improvement.
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