The board of Unilever promoted CFO Fernando Fernandez to CEO. Fernanadez’s capacity to “drive change at speed” was praised by the Anglo-Dutch FMCG behemoth, suggesting that the board wants a quicker comeback.
After less than two years, Unilever Plc fired CEO Hein Schumacher, indicating that the board was dissatisfied with the rate of reform at the massive fast-moving consumer goods (FMCG) company. Fernando Fernandez, the Chief Financial Officer (CFO), was named the new CEO by the board. Fernanadez’s capacity to “drive change at speed” was praised by the Anglo-Dutch FMCG behemoth, suggesting that the board wants a quicker transition.
Fernando Fernandez will take over as CEO of Ben & Jerry’s ice cream and Hellmann’s mayonnaise on March 1. Unilever’s stock dropped as much as 3.4% on Tuesday as a result of Schumacher’s abrupt resignation. Since Schumacher took over, they have increased their profits by over 9%.
Following a board meeting on Monday, the management change was implemented. After more than 30 years with Unilever, the board decided that Fernandez was the best candidate to carry out the company’s plan. When Unilever gave activist investor Nelson Peltz a seat on the board in July 2023, investor trust was low, and Schumacher succeeded Alan Jope.
The Dutch executive promptly began a reorganization that included cost-cutting measures and planned to split off the company’s ice cream division. Following a period of high inflation, Schumacher made an effort to move away from price-led growth wherever possible and instead concentrate on increasing the number of goods sold. Investors are putting pressure on Unilever to turn things around, and the top management change comes just weeks after the company reported disappointing full-year earnings.
Unilever veteran Fernandez elevated to CEO; Here’s why
Since 1988, the 58-year-old Fernandez has worked for Unilever. He served as President of Latin America, CEO of Brazil, and President of the Beauty & Wellbeing division before taking on the position of CFO last year. The board of Unilever was impressed by his “decisive and results-oriented approach” and deep understanding of the company’s operations, according to chairman Ian Meakins.
“Unilever’s 2024 performance has pleased us, but we still have a long way to go to achieve best-in-class outcomes,” Meakins stated. Other products owned by Unilever include Pepsodent toothpaste, Knorr stock cubes, and Dove soap.
The firm stated that the board was dedicated to “further accelerating” Schumacher’s growth plan, and that its medium-term forecast or outlook for 2025 remained unaltered. Schumacher, who began working for Unilever in July 2023, will leave the company on May 31, 2025, after resigning as CEO in March.
In an email to Unilever employees obtained by Bloomberg, Schumacher stated, “I regret leaving Unilever earlier than anticipated.” Unilever stated that he is departing by mutual consent, adding, “I stand by my record and approach.” “We have made real progress, and I am proud of what we have accomplished in a short period of time,” Schumacher stated.
Analysts and investors praised Unilever’s choice of an outside candidate when Schumacher was appointed CEO. After years of poor performance, Schumacher restructured the company’s strategy and announced cost-cutting measures last year, including the separation of its ice cream division and the loss of thousands of jobs.
The 53-year-old Schumacher will be considered a “good leaver” and will keep receiving his fixed salary of 1.85 million euros ($1.94 million) until he quits the company. “He will get an undisclosed payment for the remainder of this notice period,” Unilever stated. While Unilever searches for a permanent replacement, Srinivas Phatak, who is now the company’s group controller and deputy CFO, will step in as acting CFO.
As Unilever spins off its ice cream arm, Fernandez will take charge. According to the firm, Amsterdam will be the primary listing location for the unit this month, with subsidiary listings in London and New York. Additionally, Unilever stated that profit should slightly rise in 2025 after reporting a 4% gain in group underlying sales in the fourth quarter, just missing guidance.
The 2020 COVID-19 pandemic, rising commodity costs, and an energy crisis following the Russia-Ukraine war have all contributed to a supply chain shortage in the consumer goods industry. Customers have reduced purchases by choosing less expensive solutions, and profit margins have been squeezed.
