Shares in consumer defensive stock Unilever [ULVR] dipped 2.5% this morning on news of its new chief financial officer and a strategic plan to boost the company's fortunes.
In a statement to the markets, the British-Dutch multinational said beauty and wellbeing president Fernando Fernandez would take over as chief financial officer on January 1 2024. A wave of other executive turnover challenges also beckons, amid the confirmed departure of nutrition and ice cream divisional presidents Hanneke Faber and Matt Close, respectively.
As part of the executive overhaul, pPeter ter Kulve, currently president home care, will replace Close. Faber's replacement is yet to be announced.
At the time of writing shares are down 2.6% to £39.08.
In its earnings for the third quarter of 2023, Unilever said it had achieved 'solid' results, with underlying sales growth of 5.2%. It also said underlying price growth would continue to to moderate as inflation eases. However, turnover did decrease 3.8% to €15.2 billion (£13.2 billion).
The group has left its 2023 earnings guidance unchanged, and is still targeting underlying sales growth of more than 5%.
Chief executive Hein Schumacher admitted the company was underperforming, however.
"Unilever is a company with strong fundamentals: a portfolio of great brands used by 3.4 billion people each day, number one or two category positions across 80% of its turnover, an unrivalled global footprint, and a team of talented people," he said.
"Despite these strengths, our performance in recent years has not matched our potential. The quality of our growth, productivity and returns have all delivered.
"Today we are setting out our plans to close this gap."
As part of the proposed "action plan", Unilever will now focus primarily on 30 of its so-called "power brands", which represent more than 70% of its turnover. It has also put a halt to "major or transformational acquisitions," amid plans to offload the Dollar Shave Club brand, a business it bought in 2016 for $1 billion.
Charlie Huggins, manager of the quality shares portfolio at investment service Wealth Club, congratulated the company on "another drab quarter."
"This is another drab quarter from Unilever with underlying sales growth being entirely led by higher prices and volume declines accelerating in the quarter," he said.
"Europe was particularly weak, with volumes falling by over 10%, and the percentage of Unilever's business winner market share on a rolling 12-month basis fell to a disappointing 38%.
"From here it's all about the execution. Anyone can talk a good game with pretty PowerPoint slides, but actually doing it is quite another matter. Unilever's previous strategy updates promising greater agility, productivity and innovation didn't really deliver. This Action Plan feels like it has more substance, but the proof of the pudding will be in the eating."
We will update this story with Morningstar analysts' perspective as it arrives