The chief executive of Unilever is stepping down with almost immediate effect after just 18 months at the helm of the consumer goods giant. Unilever told investors Hein Schumacher will step down as chief executive on 1 March, before departing the FTSE 100 firm for good at the end of May.
Analysts were stunned by the announcement as investors weighed what the Schumacher's departure would mean for Unilever's ongoing strategy and portfolio shake-up. Chief financial officer Fernando Fernandez will replace Schumacher as CEO, having originally joined Unilever in 1988 as a member of its finance team in Argentina.
Fernandez previously ran Unilever's beauty and wellbeing business, home to brands such as Sunsilk, Dove, and Vaseline, as well as the group's operations in Brazil, the Philippines, and Latin America. His promotion to the top job follows continued pressure from Unilever's investors to improve the company's performance and a warning last week that near-term market conditions were set to remain subdued.
Schumacher launched a 'productivity programme' to try and simplify operations and deliver around €800million in cost savings over three years while boosting margins and delivering faster growth. Departing: Hein Schumacher (pictured) will step down as Unilever's chief executive on 1 March.
Among the measures include about 7,500 job cuts and the demerger of Unilever's ice cream business, whose brands include Magnum, Cornetto, and Ben & Jerry's. Diana Radu, equity analyst at Morningstar, said the announcement was 'quite unexpected'. She added: 'There's nothing in the company's recent performance to warrant such a move—in fact, Unilever has delivered a strong 18-month period under his leadership, marked by greater focus and disciplined execution.'.
Chris Beckett, head of equity research at Quilter Cheviot, said a CEO departure in the middle of a strategy shake-up 'does not suggest things were going well behind the scenes or the business was firing on all cylinders'. He added: 'The last set of results suggested that turnaround had stalled somewhat, with weak guidance and sales growth only likely to improve as the company passes on higher commodity costs.
'Evidence of quick operational improvements are needed when you are embarking on a new strategy, and with new management. The change at the top of Unilever will not see a change in that strategy, which is positive, and guidance has been reiterated.'. Ian Meakins, chairman of Unilever, said Hein had 'put Unilever on a path to higher performance and the board is committed to accelerating its execution.'.
Schumacher left Dutch dairy giant Royal FrieslandCampina ahead of joining Unilever in 2023 after his predecessor, Alan Jope, retired amid massive investor criticism. Jope's tenure was marked by lacklustre sales and shareholder returns and a failed £50billion attempt to acquire GSK's consumer healthcare division.
Meakins said his replacement Ferdandez 'has a strong track record of performance and portfolio management, a love of brands and a profound knowledge of Unilever's operations'. He added: 'While the board is pleased with Unilever's performance in 2024, there is much further to go to deliver best-in-class results.'.
Unilever reported last week that its annual turnover increased by 1.9 per cent to €60.8billion last year on the back of strong underlying growth across all segments. Beauty and wellbeing revenues rose by 5.5 per cent to €13.2billion, while underlying sales of its personal care products expanded by 5.2 per cent.
Matt Britzman, senior equity analyst at Hargreaves Lansdown, said Fernandez's 'deep experience and a clear mandate to push change with urgency signal a bold move to accelerate the final stretch of Unilever's turnaround'. He added: 'With Fernandez poised to build on the groundwork already laid, this unexpected transition might be the spark that helps deliver a new version of Unilever that investors have long been waiting for.'.
Unilever shares were 1.85 per cent lower at £44 on Tuesday morning, but have still risen by approximately 10 per cent over the past year. Affiliate links: If you take out a product This is Money may earn a commission. These deals are chosen by our editorial team, as we think they are worth highlighting. This does not affect our editorial independence.
