Under the leadership of CEO Paul Polman, Unilever (UL -0.79%) has managed to drive its operating performance in the past five years by restructuring and simplifying its brand portfolio. Unilever seems to realize that it needs to focus on improving overall profitability, not just volume. Thus, it has exited several frozen food businesses to concentrate on growing the personal care segments. Moreover, it also aiming to have more efficient and lower-cost operations. Its global competitors, Procter & Gamble (PG -1.34%) and Colgate-Palmolive (CL -1.46%), also restructured their businesses to fuel their operating performance as well.

Divesting food businesses to focus on personal care segments
Unilever successfully divested its frozen food businesses in the past few years. As a part of a five-year program, the company targeted to reduce its number of the brands from 1,600 to only 400. In 2010, Unilever sold its Italian frozen foods business, which contained the Iglo and Bird Eye brands, for more than $1 billion.   In August of last year, the Bertolli & P.F Chang's Home Menu brands were sold to ConAgra Foods for around $267 million.  In the first quarter of this year, the company announced that it would divest its global Skippy peanut butter business to Hormel Foods to raise around $700 million.  Recently, the ownership of Wish-Bone and Western dressing brands has also been transferred from Unilever to Pinnacle Foods. With this deal, Unilever could get as much as $580 million in cash. 

Along with the food business divestment, Unilever turned its focus on the personal care segment. In the past three years, the company has brought the Sara Lee Personal Care business and Alberto Culver, the owner of famous hair care brands such as Motions and Soft & Beautiful. It also spent around €500 ($680) million to acquire 82% of the leading skin and hair care business in Russia, Concern Kalina.

With the acquisition of Concern Kalina, Unilever possesses several successful and authentic Russian brands such as Black Pearl, Pure Line, and Forest Balm, complementing its existing hair care and skin care. Paul Polman also stated clearly that he targeted personal care to drive the company's overall growth. The personal care business only accounted for 20% of the total sales 10 years ago, but it now represented more than 30% of the total revenue with strong positions in many developing markets.

Peers also made the right strategic moves
Procter & Gamble is also executing the brand restructuring plan to drive future operating performance. It currently has two global business units: beauty and grooming. CEO A.G. Lafley would like to expand those two business units into four units to focus on global baby, global beauty, global health and grooming, and global fabric and home care. Lafley believes that this more decentralized structure will speed up global brand expansion and product innovations to win with consumers. He also said that "sectors will also drive technical, commercial, financial, and organizational synergies to improve results." 

Colgate-Palmolive relies on acquisitions to strengthen the company's global leading position in the oral care industry. Recently, the company bought GABA Holding AG, the leading oral care company in Europe. GABA generated $300 million in sales in around 15 European countries, with more than $200 million sales coming from the oral care business. By taking control of GABA Holding, Colgate will benefit from GABA's strength and existing network connections with important European pharmacy channel and European dental community. 

My Foolish take
Unilever will continue to drive its overall profitability and enhance shareholders' value when it successfully realizes all of the potential synergies from its acquisitions. The company also expects to simplify its business further, reducing the number of SKUs it owns by as much as 30% by the end of 2014. By concentrating on the higher-growth and higher-profitability personal care segments, Unilever has a huge potential upside in the long run. Income investors should also feel comfortable as it offers quite a juicy dividend to shareholders with a yield of 3.70% and a reasonable payout ratio of 60%.