Unilever’s Hein Schumacher steps down, CFO Fernando Fernandez to take over as CEO from March 1

Unilever Plc pushed out Chief Executive Officer Hein Schumacher after less than two years, signaling that the board wasn’t satisfied with the pace of restructuring at the consumer goods company.

The Anglo-Dutch maker of Dove soap and Ben & Jerry’s ice cream said company veteran Fernando Fernandez — currently chief financial officer — will take charge on March 1 and hailed his ability to “drive change at speed,” hinting that the board wants to push Unilever’s transformation even faster.

Schumacher took over from Alan Jope in July 2023, at a time investor confidence was low and after Unilever had granted activist investor Nelson Peltz a seat on the board. The Dutch executive quickly kicked off a shakeup that includes plans to spin off its ice-cream business and cut costs.

Schumacher has tried to shift away from price-led growth where possible after a period of high inflation, focusing on expanding the volume of products sold.

The former boss of dairy cooperative Royal FrieslandCampina also watered down Unilever’s “purpose” agenda. Jope and his predecessor, Paul Polman, had argued household products espousing a social mission — such as empowering body confidence or promoting hygiene — perform better than those without. It was derided by some investors, who wanted to see more sales growth.

Shares of Unilever fell 1.7% in London on Tuesday. They’ve risen 8% during the tenure of Schumacher, who will stay on at the company until May 31.

“I regret leaving Unilever earlier than anticipated,” Schumacher said in email to Unilever staff seen by Bloomberg. “I stand by my record and approach.”

Chairman Ian Meakins said the decision for Schumacher to leave was mutual and the board was impressed with Fernandez’s “decisive and results-oriented approach” and “profound knowledge of Unilever’s operations.”

“While the board is pleased with Unilever’s performance in 2024, there is much further to go to deliver best-in-class results,” Meakins said.

Fernandez joined Unilever in 1988 and has overseen some of the company’s best-performing markets, including in Brazil and the Philippines. He was also president of the Latin America division.

Unilever’s decision to appoint a company lifer echoes a similar move at rival Nestle SA, which ousted CEO Mark Schneider last year and replaced him with Laurent Freixe, who has been with the Swiss food company for nearly four decades.

Fernandez will be taking over with Unilever in the midst of spinning off its ice-cream arm. The company said this month it will list the unit primarily in Amsterdam, with London and New York getting secondary listings. Unilever also reported a 4% increase in group underlying sales in the fourth quarter, narrowly beating guidance, and said profit should improve modestly in 2025.

The results suggested the turnaround under Schumacher “had stalled somewhat, with weak guidance and sales growth only likely to improve as the company passes on higher commodity costs,” said Chris Beckett, head of equity research at Quilter Cheviot.

Unilever said Tuesday there is no change to its annual guidance.

“We met with Hein just over a week ago, and he seemed to us to be very much his normal ebullient self. We certainly didn’t see this coming,” said James Edwardes Jones, an analyst at RBC Capital Markets, who added that he was “gobsmacked” and “nonplussed” by the ejection of a CEO who was “universally” liked by investors.

“We wonder whether this is a victory for those Unilever insiders who resented the appointment of an external CEO and evidence of the old — and often dysfunctional — Unilever culture reasserting itself,” he said in a note to clients. “Fernando Fernandez, the incoming CEO, has been at Unilever for 37 years and might be a more acceptable change agent.”

Schumacher’s sudden departure after less than two years in the job hit Unilever’s shares, which fell as much as 3.4% on Tuesday. They had gained more than 9% since Schumacher took the helm.

Schumacher’s appointment and strategic changes had been welcomed by billionaire activist investor Nelson Peltz, who built a stake in the company in 2022.

Peltz, who is also on Unilever’s board, did not immediately respond to requests for comment sent to representatives at his Trian fund.

“We are gobsmacked at the news that Unilever’s very highly regarded CEO Hein Schumacher is to step down after a very successful 18 months in charge,” RBC Capital analyst James Edwardes Jones said in a note.

When Schumacher became CEO, analysts and investors had applauded Unilever’s decision to choose an external candidate as CEO.

“We conclude that it has to be something to do with his style of managing the company. We felt that the job needed an outsider, but maybe this was not the view of a meaningful proportion of Unilever’s employees,” Jones said.

Schumacher reset the group’s strategy to address years of underperformance and laid out cost cuts last year, including separating its ice cream division and cutting thousands of jobs.

But Chairman Ian Meakins said the Board was impressed by Fernandez’s “decisive and results-oriented approach”, and had given him the task of executing the growth strategy.

“While the Board is pleased with Unilever’s performance in 2024, there is much further to go to deliver best-in-class results,” Meakins said in a statement.

UBS analyst Guillaume Delmas said he believed that the board saw Fernandez as best equipped for the role as “execution is key” in the new phase of the company’s strategic journey. Delmas said Fernandez was well known in the investor community.

Fernandez, 58, has been with Unilever since 1988. Before he became CFO last year, he held a number of roles such as President Latin America and CEO Brazil.

“Difficult to see this any other way as a negative, as growth was slowing recently, and the market will worry that more disappointing news may come,” said Tineke Frikkee, a portfolio manager at Waverton Investment Management, a Unilever investor.

Frikkee said investors may know Fernandez from when he worked in Unilever’s personal care division.

Harsharan Mann in the Global Equities team at Aviva Investors, a Unilever shareholder, said: “We were surprised by the announcement but have a positive view of the CFO and are encouraged by the appointment. He is a 30-year veteran of the business who ran the Beauty and Wellbeing division very well.”

Unilever, which owns Hellmann’s mayonnaise, Dove soap and Ben & Jerry’s ice cream, said there was no change to its 2025 outlook or medium-term forecast and that the board was committed to “further accelerating” Schumacher’s growth plan.

Schumacher, who joined in July 2023, will step down as CEO in March and leave the company on May 31. He is leaving by mutual agreement, the company said.

“We have made real progress and I am proud of what we have achieved in a short period of time,” Schumacher said in a statement.

Schumacher, 53, will be treated as a “good leaver” and will continue to get his 1.85 million euros ($1.94 million) fixed pay until he leaves the business, the company said. He will then get an undisclosed payment for the remainder of this notice period, it said.

Srinivas Phatak, currently Unilever’s deputy chief financial officer and group controller, will become acting CFO, while the company looks for a permanent replacement.