Unilever trims the fat by selling off Slim-Fast
Thursday 24 April 2014
Unilever has signalled that it will sell its diet range Slim-Fast and pasta sauce brand Ragú in the US, which have long been considered possible candidates for disposal.
The company has been selling many of its brands lately including Peperami, which it offloaded in the past quarter. Unliever, which owns household names ranging from Marmite spread to Dove soaps paid £1.4bn for Slim-Fast in 2000 but, after a strong start, sales began to fall sharply from 2003 because of the impact of new fads such as the low-carbohydrate Atkins diet craze.
A sale of Slim-Fast would follow larger rival Nestlé’s recent disposal of its diet businesses. The Swiss company agreed in November to sell most of its Jenny Craig diet foods division.
Jean-Marc Huet, the chief financial officer at Unilever, said the brands were being “reviewed” – a usual signal for bidders to come knocking. Speculation of further disposals has been rife since Unilever sold brands like Peperami, which it considered were not a core part of its business.
The company beat City forecasts yesterday with first-quarter figures showing a 3.6 per cent sales rise. Demand for “personal care and home care” in the UK and Germany pushed sales growth “ahead of their respective markets.” it said. The Anglo-Dutch company reported improving conditions in southern Europe.
However, it revealed that growth had slowed from 4.1 per cent in the fourth quarter. Overall, underlying volumes increased by 1.9 per cent and turnover fell 6.3 per cent to €11.4bn (£9.5bn), largely because of currency issues.
Unilever, which also owns PG Tips tea and Magnum ice cream, warned that growth in emerging markets continued to slow, with sales up 6.6 per cent in the period. The chief executive, Paul Polman, said: “Emerging markets are currently passing through a period of slower demand and economic volatility but our strategy remains unchanged.”
Elsewhere, Premier Foods reported a 6.2 per cent fall in first-quarter sales, adding that its “power brands” including Mr Kipling cakes and Oxo stock cubes had fallen by 3.5 per cent.
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