Unilever: No Big Acquisitions, Foods and Ice Cream Are Keepers

Feb. 15, 2022
In announcing 2021 financials, CEO Alan Jope remains committed to food businesses.

"Let me be clear: Both Nutrition and Ice Cream are great businesses with strong brands that can thrive within Unilever."

Unilever CEO Alan Jope sounded convincing when he indicated its food businesses, now separating into Nutrition and Ice Cream business units, will remain parts of Unilever "for the foreseeable future." "We’ve been asked whether the new business groupings are the next step toward a disposal of the Nutrition or Ice Cream businesses," he said. In various ways, he answered no.

Jope spoke during a webcast announcing the diversified company's full-year 2021 results. Unilever had total sales of 52.4 billion euros ($59 billion), up 3.4% from 2020. Net profit was 6.6 billion euros ($7.5 billion), up 9%.

Following its aborted talks in January to acquire GSK's Consumer Health Business for $48 billion, Unilever said it's laying off 1,500 managers and reorganizing from three large business units to five, with foods and ice cream being separated. The company sold off former key food businesses, such as spreads and tea.

Foods & Refreshments (the former name of the combined food and ice cream businesses) accounted for 19.9 billion euros in 2021, up 5.6%, and that accounts for 38% of the business, just a hair behind Beauty & Personal Care; Home Care is smaller. North American sales in all product categories were 10.6 billion euros, up 3.4%. The U.S. remains its biggest single country-customer, at 9 billion euros.

Among the food brands, Jope noted Hellman's is growing at 11%, Ben & Jerry's and Magnum at 9% each and Knorr at 7%, all growing faster than the overall company.

Jope acknowledged that in financial disclosures during its brief pursuit of GSK's Consumer Health Business, he indicated Unilever would have to divest parts of its portfolio, mostly likely Foods & Refreshments, and most likely via a spinoff to shareholders. But "We do not intend to pursue any other major acquisitions in the foreseeable future. They are off our agenda."

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