Unilever is spinning off its butter division into a separate standalone business as it dragged on the consumer giant’s growth.
Its spread brands, including Flora and Bertolli, will form a new division by the middle of 2015 run by a separate management team following a separate strategy, Unilever’s head of finance Jean-Marc Huet told investors this morning at a conference.
The new unit will be known as the “baking, cooking and spreading company", benefiting from more freedom while continuing to benefit from Unilever’s scale, in a bid to stabilise turnover and sustain strong cash flow.
The category contributes seven per cent of Unilever’s total turnover and accounts for 27 per cent of all the company’s food turnover. It generates a high amount of cash, with a core operating margin of 20 per cent compared to 14 per cent for the entire company, however growth has stalled as consumers eating habits change and the spreads market declines.
Unilever shares were up as much as two per cent in early trading.