Categories
Audio Sources - Full Text Articles

Unilever names former Heinz exec Schumacher as CEO

2023-01-30T09:23:18Z

Unilever logo is pictured on a Dove soap box in this illustration taken on January 17, 2022. REUTERS/Dado Ruvic/Illustration/Files

Consumer goods giant Unilever on Monday appointed Hein Schumacher to replace Alan Jope as chief executive from July in a move that was welcomed by investors including board member and activist shareholder Nelson Peltz.

Schumacher, 51, joined Unilever in October last year as non-executive director and is currently the chief of Dutch dairy business FrieslandCampina.

He previously worked for food retailer Royal Ahold NV and for a decade at food producer H.J. Heinz in the United States, Europe and Asia.

His appointment marks the first time Unilever has given the top job to a non-Unilever executive since it poached Paul Polman from Nestle in 2008.

Unilever, One of the biggest consumer companies in the world with more than 400 brands ranging from detergent to ice cream, said in September said that Jope planned to retire at the end of 2023.

Billionaire activist investor Nelson Peltz, who heads investor Trian Partners, said he strongly supports Schumacher “as our new CEO and look(s) forward to working closely with him to drive significant sustainable stakeholder value.”

Peltz become a Unilever board member in July after it was revealed early last year that he had built a stake in the company.

“I first met Hein when I served as a director at the H.J. Heinz Company from 2006 to 2013 and was impressed by his leadership skills and business acumen,” Peltz said.

Peltz, through his Trian Fund, holds a nearly 1.5% stake in Unilever, making him the fourth largest shareholder, according to Refinitiv Eikon data.

Unilever shares were up 0.88% and among the top percentage gainers on a FTSE 100 (.FTSE) index down 0.2% as of 0912 GMT.

The move was also cheered by other investors and analysts, who have felt in recent years that Unilever needed an outsider’s touch.

“Positive that he’s an external appointment,” Jack Martin, a fund manager at Unilever shareholder Oberon Investments, said. “Good CV from what I read, hopefully provides the impetus the company requires.”

Unilever’s shares have underperformed European consumer staples and discretionary indices during CEO Jope’s tenure, which began in January 2019.

His failed bids for GlaxoSmithKline’s (GSK.L) consumer healthcare business last year lost him some good faith among investors, including influential British billionaire Terry Smith, owner of Fundsmith.

“It is good Schumacher has plenty of industry experience outside Unilever, particularly international,” said Tineke Frikee, a fund manager at Unilever shareholder Waverton Investment Management.

“I note though that his background is mainly in food, rather than beauty and personal care. This may lead the market to reduce the probability of a potential food spin-off.”

Unilever’s food business includes Ben & Jerry’s ice cream, Colman’s mustard, Hellman’s mayonnaise and Knorr stock cubes.

Some investors and analysts have speculated over the past year that Unilever might spin off what they feel is a weaker food business to focus on personal goods, beauty and home care.

“Why hire a food exec, if you are planning to sell the food business?” Bernstein analyst Bruno Monteyne said, adding that selling the food business “will always be on the cards, but I doubt that it is top priority in the short term.”

But Monteyne pointed out that some investors were hoping Unilever would name someone more well-established, globally.

“Investors we spoke to in recent weeks were hopeful for a more familiar name from a successful U.S.-based FMCG (fast-moving consumer goods) turnaround.”

Unilever had been considering internal and external candidates for the role.

Sources told Reuters in October that the candidates included finance chief Graeme Pitkethly, personal care division boss Fabian Garcia and Hanneke Faber, who heads the company’s nutrition group.