Specialist
Former VP at Unilever plc
Agenda
- Implications of the proposed unification of the Unilever (LON: ULVR) group’s legal structure as a single parent company
- Hypothetical spin-off/sale of Foods and Refreshment business unit and other M&A opportunities
- Growth strategy update on Beauty and Personal Care, Foods and Refreshment and Home Care, including emerging market priorities
- Recent leadership change and sustainability focus
Questions
1.
How would you contextualise Unilever’s announcement in June of a proposed unification of the group legal structure into a single-parent company in the UK, under Unilever plc? What would you assume was the rationale, and what improvements in strategic flexibility do you think the unification could yield? What portfolio evolution would you foresee?
2.
What is your sense of the magnitude of the cost of integration in the UK vs the equivalent move Unilever faced in the Netherlands a couple of years ago?
3.
What is your take on the speculation that the unification might lead to a separation of the Foods and Refreshment division from the HPC [home and personal care] business? How would you assess the likelihood of this happening in light of this unification?
4.
Do you think it would make sense to propose to sell the tea business, if Unilever were to consider a full spin-off of the rest of Foods and Refreshment in such a short period of time?
5.
How would you assess the hypothetical dis-synergies of Unilever spinning off Foods and Refreshment?
6.
What would be the strategic rationale for hypothetically splitting up the Foods and Refreshment and the HPC businesses? Is it just to create two simpler, cleaner businesses? Foods and refreshment seems to basically be run as a separate business unit today, under the new structure.
7.
What do you think are the strategic benefits for keeping the two businesses together under one Unilever group? Are there notable distribution synergies across the two businesses in emerging markets, for example?
8.
Unilever has often discussed the potential scope for savoury, or the Knorr brand, in emerging markets such as India, where the food business is relatively underdeveloped but Unilever has an enormous HPC presence. Can that HPC presence in markets such as India help roll out the savoury category for Unilever in this environment?
9.
You mentioned the possibility of creating superior shareholder value through a trade sale of the Foods and Refreshment division. Is there a potential acquirer you would have in mind for Foods and Refreshment? Kraft Heinz has expressed interest in the past for the whole business, but it is in a very different position today.
10.
Could you assess the likelihood of a transformational acquisition for Unilever in the HPC division? Colgate has been mooted as a target for many years, and more recently, the Reckitt hygiene and home business has been flagged as a potential acquisition. What are your thoughts on those options, and are there any other potential targets?
11.
Do you think the Reckitt home care categories could be quite complementary to Unilever’s in some sense, in that they tend to be in the smaller, more niche categories? Reckitt plays in stain removal in laundry, for example, whereas Unilever plays more in heavy-duty detergents and laundry.
12.
Do you think Henkel or Unilever would strategically gain more out of an acquisition of Reckitt in home care? Would Unilever have a benefit in bringing the emerging market distribution to the Reckitt portfolio?
13.
Unilever’s current acquisition strategy is bolting on disruptor consumer-on-trend emerging brands. Is that a strategy you expect Unilever to persist with? What other categories would it try to fill in that might be available?
14.
Unilever has a fairly full portfolio and broad geographic presence – should it not be organically addressing the white space or, as you described them, quiet space gaps, rather than through acquisitions?
15.
There was a lot of divestiture activity of smaller brands and predominantly in foods, particularly towards the end of Paul Polman’s tenure as CEO. Do you think there are other brands in the portfolio, perhaps in HPC as well, that Unilever could be looking to shed?
16.
Some press reports indicate that Unilever is considering scaling back some of its disposal of the tea business, compared to initial plans – it is considering keeping parts of the Indian and Indonesian businesses and perhaps retaining its stake in the Pepsi Lipton JV. What would you say is the rationale behind that?
17.
Does it make more sense to keep the tea business in India, given that Unilever bought the Horlicks business from GlaxoSmithKline Consumer Healthcare? Presumably there are some synergies between those two.
18.
How does Unilever approach strategic growth for the Beauty and Personal Care division, and where are its strengths and weaknesses? You referenced the beginning of a slowdown compared to past growth.
19.
You highlighted oral as a weaker segment within the Beauty and Personal Care portfolio. What about deodorants? They are often touted as the jewel in the crown of the Unilever portfolio, and it has a hugely dominant market share. Is there still white space opportunity for growth or improving mix?
20.
Unilever has made quite a lot of small, bolt-on acquisitions in the prestige segment within Beauty and Personal Care. How effectively can it compete with other prestige players such as L’Oréal and Estée Lauder?
21.
You referenced Home Care is an attractive growth category, and growth in that division accelerated quite dramatically even before the coronavirus pandemic boost, especially due to its high emerging-market presence. How would you assess Unilever’s Home Care growth strategy?
22.
Unilever’s Home Care margins are well below peers, and certainly well below beauty, but it has begun to recover. Is that recovery due to the investment into emerging markets? Can it be corrected in time, or can Unilever narrow the gap between it and its peers over time?
23.
Could you discuss the ice cream and dressings segment of Foods and Refreshment?
24.
You mentioned increasing competition and local players gaining traction in emerging markets as well as developed markets, with Halo Top. How would you assess Unilever’s corporate agility and ability to balance that global scale with that local market agility? Would you say Unilever has a competitive advantage there with programmes and initiatives such as Connected 4 Growth?
25.
What do you think the transition in leadership from Paul Polman to Alan Jope means for Unilever?
