Feb 20, 2017
Unilever chief under pressure to deliver on reforms
To sharpen its performance, Unilever last year adopted three policies aimed at generating €1bn of savings by 2019, all with echoes of 3G's practices. First, Unilever has said it will target an improvement in its operating profit margin of 0.4-0.8 percentage points; second, it is aiming for underlying sales growth of 3-5 per cent - the actual growth rate last year was 3.7 per cent - and finally it has committed to increasing the rate at which it converts earnings to free cash flow to 90 per cent. If Unilever had to go further, he says it might consider selling more - or even all - of its foods businesses such as Hellmann's mayonnaise and Knorr stock cubes. "With Unilever looking even keener to exit its spreads business but with a spinout difficult with such a weak top line, might there be a deal to be done with Kraft Heinz for either spreads or spreads plus Hellmann's, or even the whole smorgasbord?". He adds: "The challenge for Unilever management now will be to deliver the recently announced strategy of improving margins and above-market growth."
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