Unilever targets $1.12 billion savings in home, personal care pivot

Tue, November 3, 2026 at 6:06 PM UTC

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Nov 3 (Reuters) - Unilever will overhaul its operating model and cut €1 billion ($1.12 billion) in costs by the end of 2029, it said on Tuesday, as it sharpens its focus on home and personal care after splitting off its food business.

The consumer goods conglomerate has been simplifying its portfolio under CEO Fernando Fernandez, who was promoted to the top job from finance chief last year, to focus on beauty and personal care instead of its slow-growing food business.

Fernandez spun off the ice cream business last year and in March agreed a deal to merge Unilever's food division with US spice maker McCormick, expected to complete by mid-2027.

The savings, to be delivered through organizational simplification, process redesign and technology initiatives, will address costs rising from that deal. Unilever in March said it was expecting €400 million to €500 million of stranded costs.

"That leaves an additional €500 million to be put to work," said Will James, portfolio manager at Unilever investor Guinness Global Investors. "If you assume that (€500 million) drops through straight to the bottom line ... that's probably another 50 basis points on margins going forward, which is helpful."

The new operating model, which Unilever will implement progressively during 2027, will cluster the company's markets into six performance units led by regional presidents, with full profit-and-loss accountability.

The owner of brands including Dove soap, Vaseline, Persil and Hellmann's mayonnaise said it would then report across three categories — beauty & personal care, home care, and other.

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Unilever's shares, which are up marginally year-to-date, were down 0.9%.

REAFFIRMS MEDIUM-TERM TARGETS

Unilever reaffirmed its medium-term targets of 4-6% annual underlying sales growth by value, with volume growth of at least 2%, and said it expected to perform in line with that algorithm in 2027.

Unilever is likely being conservative and prudent, said James, adding he expected the company to "put a bit more meat on the bones" at an investor day on Wednesday.

Last week, Unilever reported underlying sales growth ahead of market estimates, driven by higher volumes but warned of price hikes due to a surge in costs linked to the Iran war.

"The key tomorrow is proving recent HPC (Home & Personal Care) momentum is repeatable and broad-based, and laying out the building blocks for post-Foods earnings," Barclays said in a note, adding that the savings programme was another positive.

($1 = 0.8937 euros)

(Reporting by Raechel Thankam Job in Bengaluru and Alexander Marrow in London, additional reporting by Yamini Kalia; Editing by Shilpi Majumdar, Susan Fenton and Emelia Sithole-Matarise)

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