One of the first big moves by Kraft CEO Heinz Miguel Patricio since he took over the top position in July 2019 got the blessing of two of the food giant’s arguably most prominent board members.
On Tuesday, on the company’s long-awaited investor day, Patricio revealed that Kraft would sell part of its cheese business for $ 3.2 billion to France’s Groupe Lactalis. The sale – reflecting Patricio’s efforts to refocus investments on stronger brands, cut costs and reduce debt – will deliver Kraft grated cheese, cheese blocks, Breakstone cottage cheese and Cracker Barrel brand to Groupe Lactalis.
The First Trade told Yahoo Finance that Greg Abel and Tim Kenesey of Berkshire Hathaway, whose job is to protect Warren Buffett’s The 26% investment in the cheese maker is no longer under pressure – he argued the deal. “Data-reactid =” 22 “> Patricio told Yahoo Finance’s The First Trade that Greg Abel and Tim Kenesey of Berkshire Hathaway – whose job is to protect Warren Buffett’s 26% investment in cheese maker due to additional pressures supported the deal.
“Look Berkshire Hathaway has two board members, Greg Abel and Tim Kenesey, who are very active and very important board members. They provoke me, they inspire me. They give me their advice, which is what you would expect from great board members. So the relationship has been fantastic during these nearly 12 months that I have been leading the company. They supported this transaction. And they have supported me from the start. “
Not bad to have that kind of support. Shares of Kraft Heinz were up 2% on Tuesday in response to the deal.
The former marketing whiz of Anheuser-Busch officially took over as CEO of Kraft Heinz last year on July 4th. Undoubtedly, Patricio took a burning house for granted.
meet& nbsp; aggressive operating profit targets of supporter 3G Capital. The best talents have left the company. Buffett himself expressed disappointment with his investment – shares have declined approximately 60% since Kraft merged with Heinz in July 2015 (Buffett contributed to the merger). “Data-reactid =” 37 “> The company for years has been cutting investments in key brands to meet aggressive operating profit targets from supporter 3G Capital. Top talent have left the company. Buffett himself has expressed displeasure over the his investment: Shares have fallen roughly 60% since Kraft merged with Heinz in July 2015 (Buffett played a hand in the merger).
One of the last black eyes came in February 2019, when Kraft Heinz made a $ 15.4 billion devaluation on its natural cheese, Oscar Mayer cured meats and Canadian retail businesses.
But Patricio started to get some wins to his credit after a thorough and thorough analysis of the business. In addition to the new sale of the cheese business, Patricio outlined a much leaner business on Investor Day Tuesday. He promised to increase marketing by 30% in top brands and cut costs by $ 2 billion through 2024.
Investor Day should go a long way to start restoring confidence in Kraft Heinz’s future.
Meanwhile, the company’s profits and profits have gained favorable winds in the form of consumers eating more at home during the COVID-19 pandemic.
Kraft Heinz said third-quarter organic sales are expected to increase by a single-digit percentage, not too far off a 7.4% increase in the second quarter. Earnings adjusted before interest, taxes and depreciation are expected to improve by a high single-digit percentage in the third quarter.
Brian Sozzi is a general editor and co-host of The first exchange at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and so on LinkedIn.“data-reactid =” 43 “>Brian Sozzi is an editor-at-large and co-host of The first exchange at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and so on LinkedIn.
Twitter, Facebook, Instagram, Flipboard, SmartNews, LinkedIn, Youtube, is reddit.“data-reactid =” 57 “>Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, SmartNews, LinkedIn, Youtube, is reddit.