After the failed takeover attempt by Kraft Heinz, Unilever committed to shaking up its business with a strategic review.
And now the FTSE 100-listed consumer goods giant has announced the outcome of that review: it’s kicking off a share buyback of €5bn (£4.3bn) this year, and will raise its dividend by 12 per cent. The firm said that reflected “increased confidence in the outlook for profit growth and cash generation”.
It is also reviewing its notable status as a dual-listed firm in two countries.
See ya spreads
Unilever has confirmed plans to sell its spreads business, which analysts think is worth around £6bn, so the likes of Flora and Stork will be off. The division was moved into a subsidiary business in December 2014.
Chief executive Paul Polman said: “After a long history in Unilever, we have decided that the future of the spreads business now lies outside the group. We will look to increase our strategic flexibility for further portfolio optimisation through a review of the dual-headed legal structure, with a view to simplifying it.”
Speaking on BBC’s Today programme, Polman said the unit had been declining “for the last 20 years”.
The company said it plans to combine foods and refreshment into one organisation to boost future growth and aid faster margin progression.
Polman said the company had developed a responsible investment-led growth model, well-equipped with global scale, that had led to “consistent, competitive, profitable and responsible growth and attractive returns for our shareholders”.
However, “the faster pace of change that we are seeing in our markets and competitive set” required Unilever to “set the bar higher”.