Unilever: Amsterdam chosen for primary ice cream listing in blow for London
Shares in Dove and Marmite maker Unilever have dipped despite an uptick in profit, with some additional concern as London will miss out on the primary listing of its ice cream arm.
Shares dipped more than seven per cent in early trades due to “exceptionally weak” guidance, analysts said.
“Unfortunately for Unilever… the market doesn’t tend to like a story of just about managing today in the hope for better fortunes in the year to come, and [its] valuation suggests [it] should be performing more consistently,” Chris Beckett, head of equity research at Quilter Cheviot said.
Turnover at the FTSE 100 consumer giant ticked up 1.9 per cent to €60.8bn (£50.71bn) in 2024, slightly above analysts’ expectations of a 1.6 per cent rise.
Sales grew by 4.2 per cent, largely driven by gains in the beauty and personal care markets while underlying operating profit grew 12.6 per cent to €11.2bn.
Unilever picks Amsterdam for Ben & Jerry’s float
Last year, the Bovril owner announced it would spin off its ice cream arm, Ben & Jerry’s, and cut around 7,500 jobs to simplify the business.
The separation of Ben & Jerry’s is on track to be completed by the end of 2025, and the simplification program is progressing ahead of plan, Unilever said. However, it has faced rising restructuring costs to the tune of €850m.
The business will be incorporated in the Netherlands and will continue to be headquartered in Amsterdam following a “full review”of separation options, although it will have a triple listing of New York, London and Amsterdam.
The decision is a blow to London, particularly as Chancellor Rachel Reeves met executives from Unilever in September last year for a a discussion on investment in the United Kingdom, capital markets and reforms, according to Reuters.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: “Unilever has roots in the Netherlands, having been founded through the merger of Dutch margarine maker Unie and the British Lever brothers.
“But given the perceived ‘dual nationality’ of Unilever, a decision to list in Amsterdam may still be seen as a setback for London, particularly given the recent exodus of firms from the City.
“But it still earns the stripe of a secondary listing as consolation, with Unilever opting for the triple ‘neopolitan’ flavour approach, with shares still set to be traded in London and New York as well as Amsterdam.’’
Commenting on Unilevers decision to choose Amsterdam instead of London to list its ice cream business, Andrew Griffith Shadow Business Secretary said: “This news is disappointing but sadly not a surprise.
“Business sentiment in the UK is colder than an ice cream chiller with our own ministers talking down the economy, Labour’s tax hikes and the threat of a return to 1970’s style employment rules.
“Conservative financial services reforms have got us back onto the pitch for new listings but to put balls in the net this government needs to change course.”
Productivity plan on track
Schumacher said the productivity plan was “helping to create a leaner and more accountable organisation”.
Underlying earnings per share grew 14.7 per cent to €2.98.
The results signal boss Hein Schumacher’s growth plan has begun to pay off after a challenging period in which the giant faced lower returns as shoppers tightened their belts amid the cost of living crisis.
Operating profit fell 3.7 per cent to €9.4bn due to the cost of implementing and accelerating the growth plan, Unilever said.
Schumacher added the results “reflect a year of significant activity” as the company focuses on “transforming Unilever into a consistently higher performing business”.
Unilever expects market growth, which slowed throughout 2024, to remain soft in the first half of 2025, with underlying sales growth at three to five per cent.
The company’s shares had so far responded well to Schumacher’s plan, with the share price up nearly 19 per cent in the last year and nearly five per cent in the last month.
Robinhood UK lead analyst Dan Lane said: “Throwing weight behind its core assets is exactly the strategy Unilever shareholders will be happy to see.
“The more focused, leaner strategy only went live at the start of the year so the market will need to be patient for now but it’s a big step in the right direction.
“We could see disposals of more non-core assets throughout 2025, especially in the Foods category, as the firm is likely to step up spending in its Beauty & Wellbeing portfolio – the recent Wild acquisition is a good example of the direction of travel.”