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Unilever outlines review-driven actions

06 April 2017 07:20

Consumer goods giant Unilever has outlined a string of actions and targets it will undertake after a review of the business, among them aiming for a 20% underlying operating margin, before restructuring, by 2020.

It also planned to raise its dividend by 12%, reflecting increased confidence in the outlook for profit growth and cash generation.

Unilever further added that it was establishing a net debt/EBITDA target of 2-times, and that it was launching a €5bn share buy-back this year.

Chairman Marijn Dekkers said the review had been detailed and comprehensive.

"It has confirmed that our model of long-term shareholder value creation has been successful and remains as valid as ever. The actions we are now going to take are fully supported by the board," he said.

Dekkers said these actions included reconfirming Unilever's commitment to a proven long-term model of compounding growth and sustainable value creation.

The progress already made with Connected 4 Growth allowed the company to accelerate the programme, along with targeting a 20% underlying operating margin, before restructuring, by 2020.

The Connected 4 Growth programme drove both growth and profitability. It included growing the core of Unilever's business through innovation, expanding in fast-growing segments and building in new channels.

The programme also drives greater efficiency in Unilever's cost base via Zero-Based Budgeting.

"We remain committed to continued growth ahead of our markets, supported by a total brand and marketing investment of around €30 billion over the next four years," the company said.

Unilever would also move to combine its Foods and Refreshment operations into one organisation, unlocking future growth and faster margin progression.

Active portfolio management would continue, including a a decision by the company to exit Spreads and a review of dual-headed legal structure with the objective of simplification and flexibility.

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