Unilever beats analyst expectations but food spin-off costs up to €500m
Unilever beat analyst expectations to record nearly three per cent volume growth, despite a €500m hit from its food spin-off and falling revenue.
The FTSE 100 consumer goods giant said it will face between €400m and €500m (up to £433m) of “stranded costs” after it offloaded its food brands – including Marmite and Hellman’s – in a merger with US spice maker McCormick.
Unilever said: “We expect €400-500 million of stranded costs post the separation, which will be offset with savings over 2027 to 2029, incurring one-off restructuring costs of €500 million over that period.”
The merger created a $60bn food empire but Unilever has since faced investor discontent after shareholders were denied a vote in the deal.
Investors fume over no-vote merger
Chief executive Fernando Fernandez said on Thursday: “We continue to move at speed to build a simpler, sharper Unilever with a structurally higher growth profile and a brand portfolio fit for the future.”
But some shareholders in the blue-chip firm told Morning Wire they feel the megamerger “felt rushed” and should have been put to investors.
Jack Martin, portfolio manager at Oberon and a Unilever investor, said: “It’s not great if you’re a big fund and you own five per cent of the company, you’re the owner, you should have a say – that’s not ideal.”
Announcing the offloading of its food brands, which include Hellman’s and Marmite, Fernandez said in March the spin-off would help to slim down the sprawling group.
He said: “For Unilever, this transaction is another decisive step in sharpening our portfolio and accelerating our strategy towards high-growth categories.”
The merger will be complete by midway through next year at the latest, Unilever said.
Unilever revenue falls
The company saw revenue dip in the first three months of 2026 in its beauty and wellbeing (five per cent), home care (three per cent) and food (six per cent) arms, according to an update on Thursday.
Only its personal care brands saw revenue grow, by 0.6 per cent to €3.3bn, with overall group revenue falling by three per cent to €12.6bn.
But Unilever reported positive underlying sales growth across each of its categories, with home care notching six per cent growth while beauty and wellbeing saw a 3.6 per cent boost.
The firm notched overall volume growth of 2.9 per cent, exceeding analyst expectations.
Unilever’s share price inched up by 0.7 per cent on Thursday morning, to 4,247p, leaving the stock down 12 per cent in the year so far.
Duncan Ferris, an analyst at Freetrade, said: “The once highly diversified Unilever might have upset some by focusing on the bathroom cupboard rather than the kitchen pantry.
“But volume growth, along with buybacks and a dividend boost, could take the edge off investor anxiety.”
The chief executive said on Thursday: “Despite heightened macroeconomic uncertainty, […] we remain confident of delivering on our guidance for the year ahead.”
The food and consumer goods giant was formed in 1930 following a merger between Dutch margarine maker Unie and British soap producer Lever, and is headquartered in London.
Global investment firm KKR is considering a $10bn sale of Flora Food Group, the spreads maker it acquired from Unilever for 2017, according to the Financial Times
The New York based firm bought the group, then named Upfield, for $7.9bn, acquiring brands including Becel, Country Crock, and I Can’t Believe It’s Not Butter.