Unilever plans to cut a further €1 billion in costs by the end of 2029 as it seeks to persuade investors that separating its food business will support faster growth. The consumer goods group announced the target on Tuesday, saying it would come from reducing remaining costs associated with the separation as well as organizational simplification, process redesign and technology initiatives.
The company is due to provide investors with more details at a meeting on Wednesday. It said it will adopt a “global strategy, local execution” model, with a lean central structure and local teams given greater responsibility for performance. Unilever also plans to prioritize faster-growing beauty and wellbeing brands and markets including India and the United States.
The new savings target follows Unilever’s achievement of an earlier goal, set in 2024, to generate €800 million in annual savings by the end of 2026.
Since taking over as chief executive, Fernando Fernandez has agreed to combine Unilever’s food division with seasoning maker McCormick in a $66 billion deal. The transaction, expected to close in the middle of next year, received a lukewarm response from investors when announced in March. Fernandez has since described the company that will remain as more agile and focused on beauty, personal care and home care.
Unilever said it expects its 2027 results to be in line with its medium-term targets: annual underlying sales growth of 4% to 6%, underlying volume growth of at least 2%, and a moderate improvement in underlying operating margin. RBC Capital Markets analysts said the sales and volume goals were challenging but broadly expected by the market.
Sources: Folha Mercado.