Unilever’s Leadership Overhaul and Strategic Restructuring: A Bold Path to Earnings Growth and Shareholder Value?

Let’s cut to the chase: Unilever’s recent leadership shakeup and strategic overhaul under new CEO Fernando Fernandez are nothing short of a Hail Mary pass for a company that’s been stuck in the mud. But here’s the kicker—this isn’t just about slashing costs or spinning off underperforming assets. It’s about repositioning a 130-year-old consumer goods giant to compete in a world where agility and category dominance matter more than ever.

The Leadership Reset: Speed Over Mediocrity Fernandez, the former CFO, took the helm in March 2025 with a mandate to “refresh” Unilever’s top 200 leaders, axing up to 25% of them in a bid to eliminate “pockets of mediocrity” [2]. This isn’t just a personnel move—it’s a cultural reset. By replacing underperformers and shifting from a geography-led model to a category-led one, Fernandez is betting that sharper focus on high-growth areas like beauty and wellness will reignite growth. According to Bloomberg, this leadership overhaul is already paying dividends: Unilever’s underlying operating margin hit 18.4% in H1 2025, up from 16.5% in 2024 [1].

The Ice Cream Spin-Off: A Strategic Divestiture One of Fernandez’s boldest moves? Spinning off the €8.6 billion ice cream business into The Magnum Ice Cream Company (TMICC), set to finalize by mid-November 2025. Why? Because ice cream is a seasonal, logistics-heavy segment that’s a drag on Unilever’s core brands. As Reuters notes, this separation is expected to free up resources for premium segments like Beauty & Wellbeing, where Unilever has seen volume growth of 1.5% in H1 2025 [4]. The spin-off also adds €550 million in savings by year-end, pushing operating margins toward the 18.5% target [1].

Cost-Cutting That Works Let’s talk numbers. Unilever’s €800 million productivity program—driven by 7,500 job cuts and streamlined operations—has already delivered €650 million in savings ahead of schedule [1]. These aren’t just cost savings; they’re reinvestment fuel. The company is plowing these savings into brand-building in premium categories, which is why underlying sales grew 3.4% in H1 2025, with North America and Europe leading the charge [3]. Earnings per share (EPS) jumped 14.7% to €2.98, a direct result of gross margin expansion to 45.0% [2].

The Shareholder Value Equation But here’s the rub: Despite these gains, Unilever’s shares have dipped over 5% in 2025, as investors worry about the lack of a “stronger growth catalyst” [3]. That’s short-sighted. The restructuring is a multiyear play. By 2025, Unilever expects return on invested capital (ROIC) to hit 18.1%, up from 16.2% in 2024 [2]. The company also boosted its dividend by 3% and completed a €1.5 billion share buyback in H1 2025 [3]. These moves signal confidence in the turnaround.

The Long Game Fernandez’s strategy is clear: Cut the fat, focus on what works, and reward shareholders. The ice cream spin-off and category-led model are early wins, but the real test will be whether Unilever can sustain its 3–5% sales growth and hit an 18.9% operating margin by year-end [4]. If it does, this could be the catalyst investors have been waiting for.

Bottom line: Unilever’s restructuring isn’t just about survival—it’s about reinvention. For investors, the key is to look past the near-term volatility and focus on the long-term value being unlocked. If Fernandez can keep this ship on course, Unilever might just become a growth story again.

Source: [1] Unilever's Turnaround Strategy and Operational Restructuring [https://www.ainvest.com/news/unilever-turnaround-strategy-operational-restructuring-path-cost-efficiency-shareholder-2509/] [2] Unilever CEO Plans Shakeup of Top 200 Managers in Overhaul [https://www.bloomberg.com/news/articles/2025-09-03/unilever-ceo-plans-shakeup-of-top-200-managers-in-overhaul] [3] Unilever shares drop over 5% as 2025 outlook signals slow start [https://www.investing.com/news/stock-market-news/unilever-shares-drop-over-5-as-2025-outlook-signals-slow-start-3866574] [4] Unilever to review top 200 roles under turnaround strategy [https://www.reuters.com/business/world-at-work/unilever-review-top-200-roles-under-turnaround-strategy-2025-09-03/]