Friday, April 07, 2017

Unilever Announces exit from the business of margarines

The anglo-Dutch giant consumer goods Unilever announced on Thursday (6/4) plans to get out of margarine, combine two of its major business units and boost returns for shareholders with a higher dividend and a share buyback program
The measures are the result of a strategic review and arise at a time when President Paul Polman tries to calm investors, after rejecting an offer of $143 billion acquisition by Kraft rival Heinz.
The company, which includes the brands Hellmann''s and Dove, said that the future of the business of margarines-where is owner of the Becel and Flora marks, among others-is now "out of the group" and will be sold or separated from the main operations.
Analysts estimate that the unit could be worth between 7 billion and 8 billion euros. Despite the slow growth, the drive is not just another business to Unilever. The company was formed in 1929 through a merger between the British SOAP maker Lever Brothers and the Dutch company margarine Unie, founded in 1872.
Food and drinks together Unilever also announced that will combine units of food and beverages, aiming to boost growth and reduce costs. Overall, the company said that the various initiatives will make it possible to reduce costs of 4 billion to 6 billion euros.
The company also announced that it intends to buy back up to 5 billion euros in shares this year and it will increase dividends at 12%. The latest Unilever share buyback occurred in 2007. His last special dividend was in 1999.
The goal of the company, after the restructuring, is to achieve an operating margin of 20% by 2020, compared to 16.4% in 2016.
The company has struggled to grow volumes in recent quarters, with price increases to increase revenue, something that Polman considers untenable.
In the bags, the price of Unilever retreated in the months prior to Kraft''s approach, due to a slower growth of sales in 2016, affected by problems in large markets such as India and Brazil. The company''s shares rise 1.15 percent in London on Thursday morning, to £ 39.85.
Supermercado Moderno - 06/04/2017
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