LONDON, Feb 12 (Reuters): Unilever CEO Hein Schumacher said billionaire activist and board member Nelson Peltz is "fully behind" a recently devised strategy to re-invigorate the company, even as some other investors remain sceptical after years of industry underperformance.
Schumacher told Reuters he wants Unilever, whose brands include Dove soap, Hellmann's condiments and Ben & Jerry's ice cream, to chart a "systematic" marketing strategy for its top brands.
The 52-year-old Dutchman also said he will not shy away from streamlining Unilever's 127,000 workforce.
His predecessor Alan Jope was criticized for allowing the group's brand portfolio to grow to around 400, leaving management with too little time to focus on its best performers.
Investors had also criticized Unilever for not recovering margins in the wake of the pandemic and, in some cases, for placing an unnecessary emphasis on sustainability. Fundsmith's Terry Smith, for instance, criticised Unilever for being "obsessed" with sustainability at the expense of performance.
When Unilever reported fourth quarter earnings last week, some investors and analysts criticized it for not regaining lost market share quickly enough and for letting margins slide.
Reports emerged in January 2022 that Peltz had been building a stake in Unilever through his Trian Partners investment fund, and he eventually took a seat on Unilever's board in July of that year. As of March 2023, the fund has a 1.45 per cent stake in Unilever, LSEG data shows.
By September 2022, Jope's departure was announced, with Schumacher eventually becoming CEO in July the following year. "Nelson came on the board (because) there was dissatisfaction with the performance," Schumacher said. "He saw an opportunity to buy at the share price where he thought there was potential."
Schumacher said Peltz's views are "very much in line" with Unilever's growth strategy. This involves investing more in its top 30 brands that represent more than 70 per cent of sales, supporting its innovation pipeline for the next few years and working towards a better operating discipline.
Unilever CEO pursuing strategic shift with Peltz's backing
FE Team | Published: February 13, 2024 00:29:49
Unilever CEO pursuing strategic shift with Peltz's backing
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