Unilever goes Scottish
AFTER ten good years as chief executive of Unilever, the departure of Paul Polman is certain to be framed by the harebrained plan to switch the group’s headquarters and share quote out of the FTSE100 in London to the financial backwater of Rotterdam.
The proposal left the impression that Unilever had been hijacked by a Dutchdominated board and would be safer from the attentions of activists away from Anglo-Saxon capitalism.
There will be relief among UK investors, who robustly opposed the Unilever plan, that the company is rebalancing in the opposite direction. Polman’s replacement is Scottish-born Unilever lifer Alan Jope who, alongside finance boss Graeme Pitkethly, will give the executive leadership of the £112bn Ben & Jerry’s-to-Dove outfit a North-of-the-Border flavour.
Significantly, Jope arrives in the top job from Unilever’s beauty and personal care arm, which operates from the headquarters at Blackfriars on the fringe of the City.
On the current trajectory, health and beauty will accelerate over the next decade to become 65pc to 75pc of revenues. Icecream and food, relatively, will be less important, with or without the £3bn takeover of Horlicks.
The erosion of trust between Unilever and big battalion investors as a result of the domicile fight is serious. Jope’s first task will be to re-engage with investors who were wounded by the proposed migration.
None of this should obscure Polman’s achievements. Other chief executives pay lip service to the broader role of corporations in advancing research, combating climate change and giving back to poorer societies in which they operate.
Polman walked the talk although he would have been better advised to be in the war room rather than at the United Nations when the battle over the share quote was at its peak. His greatest achievement will be seen as seeing off the debt-backed £115bn bid from Kraft-Heinz in 2017 when he showed steel too rarely seen among company bosses when the pound signs are flashing before their eyes from the promise of fat share options paying out.
Still, he hasn’t had to wait long for his £11.7m goodbye present. Under him, Unilever completed 50 acquisitions, disposed of the under-performing spreads division and drove the share price up 150pc against a 70pc rise in the FTSE 100. Impressive.
Latin escape
A TRIP to Buenos Aires for a session of the G20 major economies will seem like a welcome break from Brexit tumult for Philip Hammond and the Prime Minister.
Ahead of the sessions, the IMF issued a bearish survey noting that the world economy is slowing, financial conditions are tightening and asset prices tumbling. After the apocalyptic worst-case Brexit projections from the Bank of England and Treasury, the IMF offers global perspective.
The most important meeting will be between President Trump and China leader Xi Jinping tomorrow, with trade top of the agenda. Trump is derided at global gatherings for upsetting the trading order by taking on China. Truth is that the World Trade Organisation (WTO) has given Beijing a free pass since it joined in 2001.
It has allowed China to foster export growth with rigged exchange rates (too low), capital controls and banks directing resources at corporations under the thumb of the central committee. The result is China controls 25pc of world manufacturing. But it is not just China in Trump’s sights.
General Motors’ retreat has provoked him into thinking it is time to impose a 25pc tariff on German and Japanese car and parts exports to the US at a time when the German industry is suffering. The WTO will have its hands full. Oh, and by the way, the International Monetary Fund rates the threat of Italy’s debt troubles, US interest rates and global imbalances alongside Brexit. Not a pretty picture.
Travel fatigue
THOMAS Cook’s losses have reached scary levels. Debts are too high, bond prices signal trouble and the dividend has been axed along with 100 Co-op-branded travel shops bought just a few years ago.
That brings its shops down from 1,200 at peak to 600. Its boss, Peter Fankhauser, wants more holidaymakers to book online. That probably will mean more closures.
Bringing down the shutters is costly, so the pause button has been pushed for now.