{"id":37148,"date":"2026-03-23T13:53:11","date_gmt":"2026-03-23T13:53:11","guid":{"rendered":"https:\/\/www.europesays.com\/ch\/37148\/"},"modified":"2026-03-23T13:53:11","modified_gmt":"2026-03-23T13:53:11","slug":"unilevers-combining-foods-with-mccormick-would-boost-sales-growth-but-hit-margins-ubs-says","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/ch\/37148\/","title":{"rendered":"Unilever’s combining Foods with McCormick would boost sales growth but hit margins, UBS says"},"content":{"rendered":"

\"Unilever's Unilever’s combining Foods with McCormick would boost sales growth but hit margins, UBS says Proactive uses images sourced from Shutterstock <\/p>\n

Unilever PLC’s (LSE:ULVR)<\/a>\u00a0reported spin-off its Foods division into a combination with US spice group McCormick would boost the FTSE 100 company’s sales growth profile but dent its profitability, according to analysts at UBS.<\/p>\n

The bank calculates that separating Foods would strip out 26% of group revenues and 29% of operating profit, based on 2025 figures, while pushing the group’s underlying operating margin down by 0.8-1 percentage point.<\/p>\n

This would be\u00a0a meaningful hit, given that Foods is actually Unilever’s most profitable division, running at a 22.6% margin against a group average of 20%.<\/p>\n

The flip side is that Foods has been a persistent drag on sales volume growth, delivering flat underlying volume growth over the past eight years.<\/p>\n

Its removal would lift the group’s underlying sales growth by 20-40 basis points and volume growth by 70-90 basis points.<\/p>\n

UBS flagged the three key challenges with the transaction that it first raised last week<\/a> when rumours of the Foods spin-off were more woolly.<\/p>\n

Analyst Guillaume Delmas said the Foods arm is likely to attract a lower valuation than the rest of Unilever, given modest growth prospects and headwinds from the growing use of GLP-1 weight-loss drugs.<\/p>\n

He sees potential dis-synergies given shared distribution infrastructure with the rest of the group, and\u00a0adds that removing Foods would reduce Unilever’s exposure to higher-margin, lower-capital-intensity operations.<\/p>\n

UBS rates Unilever a ‘sell’ with a 4,440p price target.<\/p>\n","protected":false},"excerpt":{"rendered":"Unilever’s combining Foods with McCormick would boost sales growth but hit margins, UBS says Proactive uses images sourced…\n","protected":false},"author":2,"featured_media":37149,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[129],"tags":[21868,1629,536,2048,223,8923,21869],"class_list":{"0":"post-37148","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-ubs","8":"tag-combining-foods","9":"tag-growth-profile","10":"tag-operating-margin","11":"tag-sales-growth","12":"tag-ubs","13":"tag-unilever","14":"tag-volume-growth"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@ch\/116278827596093166","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/posts\/37148","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/comments?post=37148"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/posts\/37148\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/media\/37149"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/media?parent=37148"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/categories?post=37148"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/tags?post=37148"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}