Unilever focuses on top brands, leadership reshuffle under new CEO

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Unilever focuses on top brands, leadership reshuffle under new CEO
Credit: © Reuters.

Unilever (LON: ULVR )'s incoming CEO Hein Schumacher has unveiled a recovery strategy aimed at reversing the company's recent underperformance, marked by a Q3 sales drop. The plan, which maintains the full-year outlook, includes a significant leadership reshuffle and a shift in focus towards the company's top 30 brands.

Schumacher, previously with a major European dairy cooperative, intends to enhance key brands like Hellmann's and Dove while avoiding large acquisitions. This strategic shift is in contrast to his predecessor Alan Jope's unsuccessful bid to acquire GSK Plc’s consumer health business.

The recovery strategy also involves increased marketing for Unilever's top 30 brands and selling off non-core products. The company has pledged to deliver top third shareholder returns and higher gross margins amidst challenges with inflation affecting market share.

As part of the leadership reshuffle, Fernando Fernandez, currently overseeing the beauty and wellbeing unit, will take over as CFO from Graeme Pitkethly starting January 1. The heads of nutrition and ice cream will exit due to continuous volume decline in their sectors.

In addition to these changes, Unilever plans to sell a majority stake in the underperforming subscription razor service, Dollar Shave Club, retaining only a 35% stake. The company's unsuccessful acquisition bid for Haleon Plc and the addition of activist board member Nelson Peltz have sparked speculation about potential divestment of its nutrition and ice cream units.

Despite the Q3 sales miss and volume dip, Unilever reported a 5.2% rise in quarterly underlying sales growth, in line with market consensus. The company also forecasts an above 5% sales growth for 2023 and sustained a quarterly dividend of 42.68 European cents.

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