Unilever Splits its Ice Cream Division as Part of Cost Cutting Operations

Under the leadership of CEO Hein Schumacher, Unilever is embarking on a significant restructuring effort aimed at accelerating growth. As part of this initiative, the company announced job reductions, integral to its Growth Action Plan, to achieve €800 million in cost savings over the next three years.

One of the key decisions made by the Unilever Board is to streamline the company's portfolio by focusing on unmissably superior brands in highly attractive categories with complementary operating models. In line with this strategy, the Board has decided to separate its Ice Cream business to optimize future growth opportunities for both the Ice Cream division and Unilever as a whole.

The company stated that various options will be explored for the separation, with a demerger leading to creating a new publicly listed company being the most likely choice. Unilever's CEO indicated they are "open to options" regarding where the ice cream unit will be listed.

Unilever's Ice Cream business, which includes renowned brands such as Magnum and Ben & Jerry's, generated sales of €7.9 billion ($8.6 billion) in 2023. After separating the Ice Cream business and implementing its productivity program, Unilever anticipates achieving a "structurally higher" margin. Post-separation, the company forecasts mid-single-digit underlying sales growth and modest margin improvement.

The separation of the Ice Cream business is expected to enable Unilever's management to accelerate the implementation of its Growth Action Plan, which focuses on doing fewer things but better, driving consistent and stronger topline growth, enhancing productivity and simplicity, and fostering a performance-driven culture.

Moreover, Unilever highlighted that it has identified further opportunities for efficiency enhancement as part of its GAP initiative, which can now be expedited to drive greater operational effectiveness and growth.