Unilever’s new CEO lays out plans to simplify operations

LONDON (Reuters) -Unilever’s new chief executive Hein Schumacher on Thursday laid out plans to simplify the business and deliver faster growth after admitting it had underperformed in recent years.

The maker of Dove soap and Ben & Jerry’s ice cream met market expectations for third-quarter sales growth after raising prices at a slower rate, but failed to win back some shoppers who turned to cheaper products during a cost of living crisis.

Schumacher, who took up the role in July, said the company would now focus on 30 key brands which account for 70% of its sales. It will focus on improving its gross margin and not undertake any major or transformational acquisitions, he said.

“Our performance in recent years has not matched our potential. The quality of our growth, productivity and returns have all under-delivered,” Schumacher said.

Unilever (LON:) will now focus on faster growth, greater productivity and simplicity, he said.

Schumacher replaced Alan Jope who had a rocky final year at Unilever after a bungled attempt to buy GSK’s consumer healthcare business and billionaire activist investor Nelson Peltz joining the board. At the same time, the consumer goods industry has struggled for more than two years with soaring costs, as everything from sunflower oil and shipping to packaging and electricity became more expensive during the pandemic.

Unilever reported a 5.2% rise in underlying sales, meeting analysts’ average forecast, a company-provided consensus showed.

Underlying price growth for the third quarter was 5.8% while underlying volumes were down 0.6%. Prices increased at a faster pace than expected by analysts, who also forecast that volumes would rise for the first time in about two years.

The company also announced a senior executive shake-up, naming Fernando Fernandez, currently president of the beauty and wellbeing business, as its new chief financial officer.