Unilever streamlines products, cuts jobs to confront world slowdown

Reuters

* Plans to continue tweaking portfolio with additions,subtractions

* Turnaround in spreads is long journey but shows earlysuccesses

* Targeting savings of 500 million euros next year

By Martinne Geller

LONDON, Dec 5 (Reuters) - Consumer products giant UnileverPlc aims to cut the number of individualproducts it sells by 30 percent by the end of 2014 to becomemore efficient and navigate a global economic slowdown it admitsit was slow to confront.

The Anglo-Dutch maker of Ben & Jerry's ice cream, Lipton teaand Dove soap also said on Thursday it is cutting about 2,000jobs and will continue to adjust its portfolio.

"The global economy has calibrated down about 1-1.5 percentand we probably should've done a better job seeing it coming,"said Unilever Chief Executive Officer Paul Polman in apresentation in London that was broadcast over the internet.

"We're using that opportunity to step up the performance anddrive new energy into the organization."

In October, Unilever posted slower sales growth for thethird quarter after demand was hurt by the devaluation of someemerging market currencies and aggressive promotions in theUnited States by rival Procter & Gamble Co.

"We lost our competitiveness," Polman said.

Unilever intends to save 500 million euros ($683million)next year, after cutting about 2,000 jobs this year,improving its supply chain and making various processes moreefficient.

DEALING WITH YOUR OWN DECK

Unilever is shifting more of its focus to its larger brands,including the 15 that each generate over 1 billion euros inannual revenue. Polman said it will continue to sell non-core,underperforming brands and buy attractive bolt-on brands whenpossible.

"The overall portfolio is perhaps not as robust yet as someof our competitors, but you have to deal with the deck of cardsyou've been given," Polman said.

Chief Financial Officer Jean-Marc Huet said most brands tobe sold will be from Unilever's food business, which includesKnorr soups and Hellmann's mayonnaise, rather than the personalcare side, which makes Radox soaps, Lux shampoo and Vaseline.

Last week, media reports said Ireland's Kerry Group was the leading bidder for Unilever's Peperami sausage business.

Recent deals include the divestments of Skippy peanut butterand Wishbone salad dressings.

IMPROVING THE SPREAD

Unilever is not just buying and selling brands. It isworking to improve its ailing spreads business, which hassuffered for years due in part to a consumer perception thatmargarine is less natural than butter.

"We are taking the bull by the horns," said Antoine deSaint-Affrique, president of Unilever's food business. "We areseeing green shoots ... but it's going to be a long-termjourney."

He declined to say whether there was a deadline for turningaround the business, or quantify the size of its current salesdeclines.

Unilever has launched new margarine products in Germany, theUnited States and Britain that highlight naturalness andhealthiness.

"After more than 15 years of share declines ... in the lastfew months, we're actually seeing our share at least go in theright direction," said Polman, noting that it was still veryearly days.

"Having said that, we will look at all options to be surethat it gets the return that this business deserves and we willbe very open-minded about that," he said.

Analysts have speculated about whether Unilever would sellthe spreads business, or separate the food business from thehigher-growth, higher-margin personal care business.

The company is also working to boost sales by focusing onhigher-growth markets in Africa and Latin America, new channelslike drug stores and convenience stores, and developing morepremium products.

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