Mr Niall FitzGerald, co-chairman of Unilever, is to retire from the Anglo-Dutch consumer products group at the end of September - three months before the end of the five-year "Path to Growth" restructuring he jointly headed.
He will be succeeded by Mr Patrick Cescau, head of Unilever's food business. Mr Kees van der Graaf, head of ice cream and frozen food in Europe, will take over from Mr Cescau.
Mr FitzGerald (58) will step down on September 30th after 37 years with Unilever and eight years in the co-chairman's seat.
He said his departure had been timed "in the interests of an orderly succession", enabling Mr Cescau to take on the role "in good time to carry our strategy to the next stage".
His departure will heighten speculation that Mr FitzGerald may become the next chairman of Reuters. Unilever announced his retirement at the same time as its results for 2003, which it described as a "difficult year, with growth of our leading brands below plan".
Under the Path to Growth restructuring, Unilever had been targeting 5-6 per cent sales growth by the end of 2004 for its leading brands. These range from Knorr packaged foods to Dove soap, and represent 93 per cent of the business.
Unilever had already admitted that it would be well short of this goal in 2003. Yesterday, it said annual sales growth for leading brands was 2.5 per cent.
It had warned last year that this figure would be below 3 per cent because of difficulties with several parts of the group, ranging from SlimFast - the meal replacement business that struggled as consumers opted to go on the Atkins diet instead - to its perfume arm. The 5-6 per cent sales target had become a millstone for the company, overshadowing early success in other parts of its growth strategy. The new strategy targets "consistent top-third total shareholder return within our peer group".
Between 2005 and 2010, Unilever said it expected to generate more than €30 billion of ungeared free cash flow and increase return on invested capital from 12.5 per cent in 2003 to "at least 17 per cent".
The company also raised the possibility of share buy-backs or some other way of returning capital to shareholders. It said the substantial net debt it took on buying Bestfoods was being reduced ahead of schedule, reaching €12.6 billion at the end of 2003. When it reaches about €10 billion, "surplus cash flow will be used to enhance shareholder return".
The company met its earnings target for the year. Earnings per share grew 11 per cent, in line with its target of low double-digit percentage growth.
For 2004, the company is to continue with its target of low double-digit percentage sales growth, increasing operating margins to more than 16 per cent. Sales of its top 400 brands are expected to show improved growth from 2003.
In 2000, the group set out its five-year Path to Growth plan to drive sales growth to 5-6 per cent for its 400 brands, low double-digit earnings growth and operating margins above 16 per cent by 2004.
Unilever stock has underperformed the FTSE 100 index by nearly 15 per cent over the past year, but has recovered from 483p in late October.
Irishman Mr FitzGerald joined Unilever in 1967 and became financial director in 1987. He served in the foods executive and as detergents co-ordinator before becoming chairman in 1996.
Outside the company, he is president of the Advertising Association, a member of the Council of the World Economic Forum and a non-executive director at Reuters. He was awarded an honorary knighthood (KBE) in the 2002 New Year's Honours. - (Financial Times Service /Reuters)
