Change at the Top Could Be Catalyst for Structural Change at Unilever As Jope Announces Retirement From CEO Role

Unilever announced that CEO Alan Jope intends to retire by the end of 2023 after what will have been five years in the top job. While this had not been expected, we do not find Jope's exit to be too surprising, coming as it does in the aftermath of the failed acquisition of GSK's consumer health division (now Haleon) and barbed criticism from shareholders including Fundsmith in recent months, while Trian Partners has taken a seat on the board. Jope has overseen a period of lackluster operating performance and the shares are materially unchanged since his assumption of the role in January 2019. We believe Unilever is a wide-moat business with modest valuation upside potential, but we think the incoming CEO will have to make significant changes to Unilever if the stock is to rerate to the multiples being awarded to consumer product businesses in more advantaged categories.