HUL to separate ice cream business following independent valuation

New Delhi: Hindustan Unilever said it is separating its ice cream business, which owns brands such as Kwality Wall's, Cornetto and Magnum, and has done an independent valuation to have a fair idea.

The board of HUL on Wednesday decided to demerge the ice cream business, based on the recommendation of an independent committee, which was formed by the FMCG major in September this year.

The committee has said the ice cream business, which contributes 3% to HUL’s turnover, has a different operating model, including cold chain infrastructure, and a distinct channel landscape, which limits synergies with other businesses of the company.

During an earnings call, CFO Ritesh Tiwari confirmed that HUL has gone for an independent valuation of the ice cream business. However, he did not share details.

"Yes, we have done independent valuation. The board has reviewed the independent valuation of the business today, and that is one of the key inputs that will be added as we get into the separation mode going forward," he said.

He further said separation of the ice cream business would be through a "competitive process".

In a statement, HUL said this portfolio restructuring will enable it to "sharpen focus on the core business and further strengthen its play in trending demand spaces" such as Beauty, Foods, Health and Wellbeing.

"It will also enable the ice cream business to operate with greater flexibility and focus. With the aim of maximising value for all shareholders, the Board, based on the recommendations of the Independent Committee, will determine the mode of separation by the end of this year," it said.

Earlier this year, HUL's parent entity, Unilever PLC, had expressed its intention to separate its global ice cream business across jurisdictions.

For the financial year ending March 2024, HUL's revenue from the sale of products was Rs 59,579 crore.

In a separate filing, HUL informed that its Executive Director, Legal, Corporate Affairs and Company Secretary, Dev Bajpai, has requested for early retirement from the services by the end of this year.

The board has approved the appointment of Radhika Shah to succeed Bajpai, with effect from January 1, 2025.