Unilever CEO Paul Polman. Picture: REUTERS
Unilever CEO Paul Polman. Picture: REUTERS

London — Unilever CEO Paul Polman, who has built his reputation on a softer approach to capitalism, showed he can get feisty, too.

His combative side was on display at an investor meeting on Thursday in New Jersey, where the Dutchman found himself confronted with tough questions on the balance of cost savings, margin improvement and sales growth. Polman shot back, defending his approach and raising his voice in the process, according to a recording of the event.

Polman said analysts were "pissing away" the possibility of higher shareholder returns by suggesting Unilever could spend more on growing its earnings through rising sales rather than through cutting costs.

Asked by one analyst if Unilever might want to raise its brand-marketing spending to seek more revenue growth at the expense of a bit of margin, Polman took issue with what he called an implied assumption that the company’s brand spending was not competitive.

"You’ve been telling us the margins were low for the first five years, and I’ve been telling you we have made investments to be able to get this company back on track and where it belongs to be," Polman said. "Here you are all saying ‘I want shareholder value, I want to drive it,’ and you’re pissing it away by not even asking us to give it. To me, that’s incomprehensible."

The CEO said there was "no brake" on efforts to raise volumes. "We are not doing anything on the volume side differently because we are promising you the margin," he said. "The margin is entirely coming from … something that you should demand, but nobody is demanding, which is very amazing to me."

Polman has been driving what he calls a more sustainable approach to doing business, from hand-washing initiatives in Africa to picking up niche brands with ecological cachet, arguing that that strategy ultimately would yield higher growth than staples from soap to mayonnaise.

Big food companies are facing demands by investors to cut costs and accelerate sales simultaneously as growth fades. Earlier in 2017, Nestle CEO Mark Schneider said many food and beverage companies were focused so much on cutting costs that they would undermine their growth prospects, challenging the mantra that has been driven by companies such as Kraft Heinz and Anheuser-Busch InBev.

"If we find opportunities to invest more or if we need to invest more, we will do it, there’s no question about that," Polman said at the investor event. "I want to be very clear on that."

The Dutch executive, who joined Unilever as CEO in January 2009, has pledged to save €6bn in a cost-cutting drive after rebuffing an unsolicited takeover bid from Kraft Heinz, known for its frugality, in February.

In November, Unilever’s board hired headhunting firm Egon Zehnder to cement its succession planning for Polman’s eventual departure, which is expected to be in about 18 months’ time, according to a person familiar with the situation.


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