Ben & Jerry’s owner Unilever to spin off ice cream arm

LONDON (AFP): British consumer goods giant Unilever announced Tuesday that it will separate its ice cream unit, whose top-selling products include Ben & Jerry’s and Magnum, as a standalone business.

The company also unveiled a major overhaul which it said would “impact” around 7,500 mainly office-based jobs worldwide and save 800 million euros ($870 million) over the next three years.

“The separation of Unilever and Ice Cream in combination with the productivity programme will ensure that Unilever’s financial and management resources are focused on its strongest, global or scalable brands,” Unilever said in a statement.

“These will have the capability to drive category expansion and deliver accelerated, sustainable levels of growth and improved profitability.”

The ice cream unit has five of the 10 biggest global brands, including Wall’s brand Cornetto and Carte D’Or, with turnover of 7.9 billion euros in 2023 — although underlying sales growth was disappointing.

“A demerger of Ice Cream is the most likely separation route… Other options for separation will be considered to maximise returns for shareholders,” Unilever added Tuesday.

Spin-off activity will start immediately with full separation expected by the end of 2025.

Unilever added that its overhaul will see it focus on four divisions: Beauty & Wellbeing, Personal Care, Home Care, and Nutrition.

The multinational, which also produces Cif surface cleaner, Dove soap, Hellmann’s mayonnaise and Marmite yeast spread, predicted the move will improve its profit margins.

“The board believes that Unilever should be increasingly focused on a portfolio of unmissably superior brands with strong positions in highly attractive categories that have complementary operating models.”

It added: “After separating Ice Cream and implementing the productivity programme, Unilever will have a structurally higher margin.”

“Post separation, Unilever aims to deliver mid-single digit underlying sales growth and modest margin improvement.”

Unilever added that ice cream activity has “distinct characteristics” when compared with its other businesses.

“These include a supply chain and point of sale that support frozen goods, a different channel landscape, more seasonality, and greater capital intensity.”