Unilever surprised investors on Tuesday by ousting chief executive Hein Schumacher and replacing him with finance chief Fernando Fernandez, who will take over the tough task of reviving the consumer group’s performance.

Schumacher’s sudden departure after less than two years in the job hit Unilever’s shares, which fell as much as 3.4 per cent on Tuesday. They had gained more than 9 per cent since Schumacher took the helm.

The management change was made after a board meeting on Monday, a source familiar with the matter told Reuters.

The board concluded that Fernandez, who has been with Unilever for more than 30 years, was the right person to execute the company’s strategy, the source said.

Unilever, which gave no specific reason for the change, is facing pressure from investors to revitalise its fortunes and the top management upheaval comes just weeks after Unilever announced underwhelming full-year earnings.

The consumer goods industry has had a difficult couple of years coping with a supply chain crunch triggered by the Covid-19 pandemic, plus sky-high commodities prices and an energy crisis after Russia invaded Ukraine.

Profit margins have been squeezed and sales volumes hit by consumers switching to cheaper options.

Nestle CEO Mark Schneider was ousted last year after several quarters of weak sales volume growth.

Schumacher’s appointment and strategic changes had been welcomed by billionaire activist investor Nelson Peltz, who built a stake in the company in 2022 and sits on Unilever’s board. Peltz’s Trian Fund declined to comment on the change.

When Schumacher became CEO, analysts and investors had applauded Unilever’s decision to choose an external candidate as CEO.

“It has to be something to do with his style of managing the company. We felt that the job needed an outsider, but maybe this was not the view of a meaningful proportion of Unilever’s employees,” Jones said.

Schumacher reset the group’s strategy to address years of underperformance and laid out cost cuts last year, including separating its ice cream division and cutting thousands of jobs.

But chairman Ian Meakins said the Board was impressed by Fernandez’s “decisive and results-oriented approach”, and had given him the task of executing the growth strategy.

“There is much further to go to deliver best-in-class results,” Meakins said in a statement.

New man

Analysts and investors said that while the news was unexpected, Fernandez was a good choice to lead Unilever’s turnaround strategy.

UBS analyst Guillaume Delmas said he believed that the board saw Fernandez as best equipped for the role as “execution is key” in the new phase of the company’s strategic journey. Delmas said Fernandez was well known in the investor community.

Fernandez, 58, has been with Unilever since 1988.