Unilever to save €1 billion by 2029 as Fernandez pushes overhaul

What Unilever announced

Unilever said Tuesday it will carve out €1 billion from its cost base by the end of 2029 to support Fernando Fernandez's push to reshape the business. The plan centers on simplifying how the company runs and dealing with stranded costs arising from the planned merger of its food business with McCormick & Co., with the full plan set for Wednesday's capital markets day.

After the update, the stock narrowed earlier losses and was recently down 0.9% in London. Shares have been little changed since January. A spokesperson declined to go beyond the statement. Earlier this year, Unilever disclosed a plan to cut 7,500 roles as part of a broader restructuring; people familiar with the matter said additional reductions may not be outlined on Wednesday.

How the overhaul fits

Fernandez is steering the Anglo Dutch group toward being a focused home and personal care company, leaning into faster growing beauty and wellness lines such as Dove and pushing harder in markets like India and the US. Management said stepping away from foods would let it double down on its biggest brands while using artificial intelligence and other tech to roll out products and localized execution faster.

Unilever kept its targets intact, aiming for underlying sales to rise 4% to 6% a year with volumes up at least 2% annually. RBC's James Edwardes Jones called those goals "both challenging and underwhelming," noting they were already on the table and would still be tough to hit, especially on volumes.

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The food deal and structure changes

Unilever's decision to remove foods has stirred pushback. Some investors fear that, as a separate food company, flagship names such as Hellmann's and Knorr could be overshadowed within a bigger collection of assets. When the deal completes next year, Unilever holders are set to retain 65% of the food business, drawing criticism over the debt McCormick will assume and what that means for the unit's outlook.

The revamp also extends to leadership and reporting lines. The company said it will bring in an external hire to lead North America. It is reorganizing into three divisions, with Beauty and Personal Care encompassing brands ranging from Tatcha skin care through to Liquid IV, Home Care including brands like Cif, and an additional "other" segment. Unilever will also begin reporting across five regions, merging Latin America, Africa, Middle East and Turkey as a single zone set next to North America, Europe, India and Asia; previously it reported three regions, with the Americas split into two sub regions.

What to watch for your portfolio

Recent trading showed some strain. Last month, Unilever reported a drop in underlying sales in developed markets for the fiscal third quarter. Overall, the food category showed no growth, with US retail pressures - most acute in condiments - acting as the main drag. The bottom line: Fernandez is cutting costs to fund growth in beauty and home care while exiting foods, but delivery against volume goals and execution in the US will be the tell on whether this reshape lifts returns.

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