New Delhi: Hindustan Unilever Ltd. (HUL) has decided to separate its ice cream business, Including popular brands like Kwality Wall’s, Cornetto, and Magnum. This decision comes after a detailed review by an independent committee set up in September 2023. The committee found that although the ice cream business is growing, it only makes up about 3% of HUL’s total revenue and needs investment to reach its full potential.
HUL’s board believes that by spinning off the ice cream division, the company can focus more on its core areas like beauty, foods, health, and wellbeing. The ice cream business runs on a different model with its own cold storage and delivery systems, which don’t align well with HUL’s other operations.
Rohit Jawa, HUL’s CEO, stated that the board will decide by December 2024 whether to sell or demerge the ice cream business. This decision also fits with Unilever PLC’s global plan to separate its ice cream units in different markets. HUL expects that this move will benefit shareholders and give the ice cream business the freedom to grow independently.
HUL has also done a valuation of the ice cream division to help guide future decisions. After the separation, HUL plans to build local capabilities to keep running the business since Unilever owns the rights to the ice cream brands.
This change comes as HUL faces mixed financial results. In the latest quarter, the company reported a net profit of ₹2,591 crore, a decrease from the previous year due to high costs and weak demand.
