Globally, Unilever’s decision to separate its ice cream business from the rest of the company has received a great deal of publicity, with the company citing ice cream’s ‘very different’ operating model as the reason for splitting.
Initial plans were for the demerger to be finalised by November 10 this year for all its markets, but in its latest demerger update published on October 21, the company announced that this would see a delay.
It stated that preparatory work is ‘on track’, and it was ‘confident’ of implementing the demerger in 2025, but no confirmed date has been announced yet.
In India, the demerger is primarily taking place between Hindustan Unilever Ltd (HUL) and Kwality Wall’s India) Ltd (KWIL) and also expected to be completed within this year.
“We expect to complete the demerger by December and anticipate having the new ice cream business listing up (as a separate business entity) by Q4FY2026, subject to the necessary regulatory approvals,” HUL CFO Rites Tiwari told the floor during the firm’s most recent investors’ meeting.
“The ice cream business has actually declined year-on-year as of the September 2025 quarter (Q2FY2025 for HUL) due to an extended monsoon season as well as GST changes in India – [all things considered], the demerger is expected to result in an improvement of 50 to 60 bps (0.5% to 0.6%) to our EBITDA margin moving forward.”
EBITDA measures a company’s profitability before accounting for items such as taxes, depreciation and interest.
As for the specific timeline for HUL to see this improvement reflected in profits, Tiwari stressed that this should be reflected in the next round of HUL financial results, barring any complications to the process.
“We expect the demerger to happen in the December quarter (Q3FY2025) if everything goes as per plan and with all regulatory approvals, so when HUL declares results for this quarter it will exclude Ice Cream [which] will be shown as a discontinued business,” he said.
“Ice Cream is roughly a 3+ percentage of our business which makes low single-digit [margins of profit] and even less than usual this year due to the monsoons – hence, we expect once we report results excluding ice cream, we should see this 50 to 60 bps improvement on an average annually.”
The HUL ice cream business is expected to be listed as a separate company by Q4FY2025, completing its demerger.
Unilever’s troubled ice cream category
HUL’s stance on the ice cream demerger is a firm one, and progress has been solid in the 10 months or so since the initial local announcement.
That said, this is by no means a guarantee of things actually being finalised this year: Head office Unilever itself had been preparing for the global ice cream demerger over some 18 months before announcing the abovementioned postponement, largely linked to IPO issues for its new ice cream business, The Magnum Ice Cream Company (TMICC), in the United States.
But the issues have continued to plague the ice cream business as a whole, including very public spats between Unilever and the Ben & Jerry’s brand, ranging from the latter suing Unilever over censorship issues, a campaign outright demanding a severing of ties which saw the latter’s co-founder Jerry Greenfield resign, and most recently Unilever blocking Ben & Jerry’s from launching of a pro-Gaza ice cream flavour.
Although there has been no sign of similar troubles with the local KWIL demerger in India, Unilever’s head office’s troubles are a clear sign that nothing is yet guaranteed at this point.
