We’re not performing warns new Unilever CEO as turnaround launched
The new chief of Unilever this morning launched a dramatic plan to turn around a business he admitted was underperforming.
Boss Hein Schumacher, who just took up the position this July, said that the Dove Soap to Ben & Jerry’s maker is not “reaching its potential” and productivity and returns have all “under-delivered”.
Schumacher, who joined from a Dutch dairy giant, took over from embattled CEO Alan Jope who walked at the start of the year.
Whilst City sources were caught off-guard by the Schumacher appointment, Unilever’s activist shareholder Nelson Peltz – who has been pushing for a radical turnaround plan – gave him the seal of approval having worked together at Heinz.
The task came into sharp focus again this morning with declines across its product categories on a year-on-year basis so far this year.
Beauty and Wellbeing fell by 4.9 per cent on last years figures to €3.1bn (£2.71bn) and ice cream sales tumbled 6.7 per cent to €2.2bn (£1.92bn).
Ice cream volumes were also impacted by customers choosing cheaper alternatives and wet weather conditions versus last year’s summer, particularly in Europe.
Guidance for the year remained unchanged, however.
As part of the turnaround plan, Unilever said it is aiming for between three to five per cent of underlying sales growth.
The company said it will do this by stepping up innovation and investment behind its 70 top performing brands.
Unilever’s share price was down over three per cent this morning as markers responded to the news.
Schumacher, said: “Unilever is a company with strong fundamentals: a portfolio of great brands used by 3.4 billion people each day, number one or two category positions across 80 per cent of its turnover, an unrivalled global footprint, and a team of talented people.”
“Despite these strengths, our performance in recent years has not matched our potential. The quality of our growth, productivity and returns have all under-delivered.”
He added: “Today we are setting out our action plan to close this gap. We will drive faster growth by stepping up innovation and investment behind our Power Brands; we will drive simplicity and productivity, leveraging the full strength of our operating model; and we will sharpen our performance culture through strong leadership and stretching goals.”