Unilever to spin-off ice cream business

Unilever has announced plans to separate its ice cream business from the company.

In a statement, the Ben & Jerry’s manufacturer, which is the world’s largest producer of ice cream, said demerging the assets into a listed company was “the most likely separation route”.

Unilever said the separation would make the FMCG giant “a standalone, more focused business”, that will have more “operational and financial flexibility”.

However, the Magnum owner said it would look into alternatives to a demerger “to maximise returns for shareholders”, and that further details would be given “in due course”.

The ice cream unit has “a very different operating model”, compared to Unilever’s other units of Nutrition, Beauty & Wellbeing, Personal Care and Home Care, it said.

Focusing on four core businesses is expected to allow the company to grow more efficiently via “brands with global reach or significant potential to scale”.

The company said it expects to see higher margins, as well as sales growth in the mid-single digits.

The separation of the ice-cream business is to start with immediate effect, with the process to be complete by the end of 2025.

“We view the demerger of ice cream as a clear positive step towards making Unilever a faster growing company. Ice cream has clearly been dilutive,” analysts at Barclays wrote in a note to clients today.

Wider “productivity programme”

Alongside the business spin-off, the company also announced the launch of a “productivity programme”, which aims to cut costs by some €800m ($867.8m) between now and 2027.

The shake-up is expected to impact 7,500 employees at the company, with the majority of these being office-based positions.

Expenses from the business restructure will now make up around 1.2% of Unilever’s turnover for the next three years, it said.

Ice cream currently makes up 13% of Unilever’s annual turnover. The group booked €7.9bn in revenue from ice cream in 2023, up 0.5% on 2022.

The Cornetto maker’s underlying sales growth (USG) from ice cream was up 2.3% but volumes were down 6%.

Just Food