As consumer giants struggle, Unilever rises above the pack

Shortly after taking over Unilever, Polman met with investors in London as well as also withdrew guidance to security analysts as well as also quarterly earnings, telling them, “My job is actually not to serve shareholders, yet to serve consumers as well as also our customers.” Of course, he believes that will in doing so, Unilever will indeed serve its shareholders better over the long-term. Unilever’s results in nine years back up Polman’s contention: Unilever’s stock value has grown 155 percent during his tenure. As he jokingly told CNBC’s Jim Cramer, “Our record is actually better than Warren Buffett’s in that will time frame.”

The joke, however, is actually also true.

Under Polman, Unilever has eschewed big acquisitions, the largest being the purchase of Alberto Culver. yet the company has transformed its portfolio by acquiring a series of smaller companies that will strengthened its sustainability offerings, e-commerce business, as well as also attractiveness to the millennials. Included among them are Dollar Shave Club, Seventh Generation, Sir Kensington’s, Talenti, Sundial, Living Proof, as well as also Schmidt’s Naturals.

Polman’s toughest test came in February, 2017, when Brazilian investment fund 3G Capital attempted a hostile takeover through its Kraft-Heinz Company (KHC), offering $143 billion for Unilever. 3G had the backing of Warren Buffett, as well as also had established itself as a fierce, unyielding acquirer. KHC offered a modest premium of only 18 percent as well as also planned to shift Unilever by its growth posture to 3G’s trademark “lean as well as also mean” mode, employing zero-based budgeting to cut costs 30 to 40 percent to improve earnings as well as also cash flow. As Polman noted wryly, “You can’t cut your way into prosperity or growth.”

Many analysts thought Unilever was a goner. Yet, Polman immediately swung into action, firmly rejecting the 3G offer, not even leaving the door open to negotiation for higher offers. Polman’s rebuttal was so fierce that will within 48 hours KHC withdrew its offer, as well as also has shown no further signs of renewing its attack. Nevertheless, Polman committed to a complete review of ways Unilever could improve shareholder value. Six weeks later he announced a 7-point plan to enhance value that will include spinning off Unilever’s legacy spreads business, improving operating margins by 16 percent to 20 percent, buying back 5 billion euros of stock, cutting costs by one more 2 billion euros, as well as also consolidating its foods as well as also refreshments business units into one. More recently, Unilever announced the idea will move its corporate headquarters by London to Rotterdam.

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