Unilever targets €1 billion in savings by 2029 as it reshapes its business
Key Facts
Unilever said on November 3 that it is targeting €1 billion in productivity savings by the end of 2029, as it reshapes its operating model around more focused home and personal care businesses. Reuters reported that the plan combines a simpler organizational structure, process redesign and technology initiatives, alongside addressing costs related to the merger of its foods business with McCormick. The company said its goal is to “deliver €1 billion of productivity savings by the end of 2029.” The announcement comes as the group prepares to move to a model focused on beauty, personal care and home activities after reshaping its portfolio. The announced figure is therefore tied to the business reorganization and its associated transformation costs, rather than being a standalone cost-cutting target.
The savings include, according to Reuters, costs arising from the planned merger of the foods business with McCormick, as well as organizational simplification, process redesign and technology measures. The deal is expected to be completed by mid-2027, making its execution part of the broader transformation timeline extending to the end of 2029. Unilever materials say the separation of the foods business will leave expected stranded costs of between €400 million and €500 million. To offset these costs, the company plans to incur €500 million in one-off restructuring costs during the period from 2027 to 2029. These figures place the €1 billion savings target in a financial context that includes separation and restructuring costs, alongside a change in how the group is managed.
Unilever’s results will also be presented differently after the new operating model takes effect. The company said it will report across three categories: Beauty & Personal Care, Home Care and “Other.” This breakdown reflects the reorganization of reporting around the businesses that will remain in the group after the foods separation, and gives investors a new framework for tracking performance by category. The reclassification comes as the group focuses on personal care and home activities, while work proceeds on merging the foods business with McCormick. The plan thus links the portfolio reshaping with operational and financial changes and the way performance is disclosed. The deal is expected to be completed by mid-2027, while the savings target runs to the end of 2029.
The efficiency plan comes against the backdrop of strong operating performance in the third quarter of 2026. Unilever recorded underlying sales growth of 5.2%, comprising volume growth of 2.9% and a 2.3% increase in prices, and said the price increases were in response to higher commodity costs. Total sales reached €13.3 billion, up 6.7% year on year, which the company attributed to positive operating performance, net acquisitions and currency effects. Its Power Brands also delivered underlying sales growth of 5.8%, with volumes up 3.3%. In Beauty & Personal Care and Home Care, underlying sales growth was 7.0% and volumes rose 4.1%, highlighting the strength of the categories that have led growth in recent periods.
Chief Executive Fernando Fernandez said the company delivered “another quarter of competitive growth, led by continued strong volume performance and pricing to offset the impact of higher commodity costs.” Unilever added that emerging markets led growth in the third quarter, while performance in developed markets was affected by stronger comparatives and weaker market conditions, particularly in foods. After its performance in the first nine months, the company kept its 2026 underlying sales growth outlook within its multi-year range of 4% to 6%, with volume growth of at least 3%. It expects underlying sales growth of about 5% in the second half and a slight improvement in full-year underlying operating margin compared with the 20.0% recorded in 2025. In that year, underlying sales grew 3.5% and volumes 1.5%, while underlying operating margin increased by 60 basis points to 20.0%.
Unilever is scheduled to host an investor event on November 4, 2026, from 8:30 a.m. to 2:30 p.m. U.S. Eastern Time. The event follows the announcement of the savings target by one day, at a time when the operating model redesign coincides with the anticipated deal and the reclassification of reporting segments. The event provides a near-term opportunity for the company to present to investors, according to the group’s official calendar. In trading, Unilever shares listed under the ticker UL closed at $66.44 on November 2, 2026. This remains the closing price from the session before the announcement dated November 3, and does not describe the stock’s performance during the announcement session.