Unilever promises shareholder rewards

UNILEVER promised a multibillion-euro programme of shareholder rewards yesterday after a corporate rethink sparked by a takeover approach from Kraft Heinz, aiming to prove it can generate lucrative returns as an independent company.

Under a restructuring sparked by the rebuffed $143-billion (R1.9-trillion) offer by its US rival, the maker of Dove soap and Knorr soup set out an accelerated cost-saving plan, the sale of its Flora to Stork spreads business where sales are declining, and a review of its dual-headed Anglo-Dutch structure.

Unilever will also splash out ß5-billion (R73.6-billion) on a share buyback and raise its dividend 12% this year.

Unilever called the Kraft episode a “trigger moment” to assess its business, as the global packaged goods industry faces slowing growth and greater competition.

Some analysts had speculated it would split into two in a dramatic strategy reversal, but executives said the current strategy was working while needing to be speeded up.

“We need to accelerate our plans to unlock further value faster, and this was brought home to us by the events of February,” chief executive Paul Polman said.

“There is no doubt that . . . however opportunistic it [the Kraft approach] was, it did raise expectations.

“We are absolutely determined to use it as an opportunity to place Unilever on an even stronger footing.”