Unilever is to sell its margarine business, including the Flora and I Can't Believe It's Not Butter brands, as part of its response to the failed takeover by USA rival Kraft Heinz.
The moves reflect "increased confidence in the outlook for profit growth and cash generation", Unilever said in a statement on its website on Thursday.
Unilever's London-listed shares, which have held onto the gains made by the Kraft bid as shareholders bet it would spur improved performance, closed up 1 percent at 39.78 pounds, while the FTSE 100 was down 0.3 percent. At 11.27 they were up 0.55% at €46.82.
Under a restructuring sparked by the rebuffed $143bn USA bid, the maker of Dove soap and Knorr soup set out an accelerated cost-saving plan, the sale of its Flora to Stork spreads business - where sales are declining - and a review of its dual-headed Anglo-Dutch structure. Get twice-daily updates on what the St. Louis business community is talking about.
"The reality of 21st century life is that people are more likely to grab breakfast "on the go" rather than sit around the table with a few slices of toast", said George Salmon, equity analyst at Hargreaves Lansdown (Frankfurt: DMB.F - news). Unilever said it's integrating food and refreshment businesses into a unit to be based in the Netherlands. Unilever plans to either sell or demerge the Spreads business. "[We have] confirmed that our model of long-term shareholder value creation has been successful and remains as valid as ever". Unilever now expects to make a 21% underlying.
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The group announced it would be speeding up its plan for cost saving, targeting an underlying operating margin of 20%, before its restructuring, by 2020, which is up from its 2016 figure of 15.3%.
Unilever announced plans to divest its spreads division, saying the "future of the spreads business now lies outside of group".
The blow came as WPP, the world's largest advertising company, was already contending with a slow start to 2017 and a weaker-than-expected growth forecast.
The company also said it would seek to buy back 5 billion euros, or about $5.3 billion, in stock.
"The recent review has shown us that it can add complexity to structural portfolio change", Pitkethly said. "We will support our business with a higher level of leverage, while retaining the benefits of a strong credit rating", he said. "This will enable us to enhance value for shareholders through increased capital returns, while maintaining operational and strategic flexibility".
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