A week after Tyson Foods, Inc. completed its merger with The Hillshire Brands Company, Tyson president and CEO Donnie Smith told investors the process for combining the two companies is well underway.
"We're moving forward quickly with the integration and finding synergies, and we feel good about our ability to capture $225 million in synergies in the first year and $500 million by year three," Smith says. "The more we get into it, the better we feel."
Smith told investors at the annual Barclays Back-to-School Consumer Conference that as the companies come together, it will be important to keep the best aspects of both organizations intact. He especially wants to keep the spark that led to the brand-building, marketing, innovation, and product-development success at Hillshire. He says the Hillshire merger moves Tyson forward faster.
Dennis Leatherby, Tyson's executive vice president and chief financial officer, summarized the company's presentation by saying, "We're staying focused on our strategy. We're going to leverage our iconic brands and No. 1 market share positions to grow the Prepared Foods segment, and we've hit the ground running to capture synergies. If we do all these things well, the result will be reduced volatility and expanded operating margins."
Leatherby reiterated Tyson's fiscal 2014 earnings guidance of at least $2.78 per share, excluding costs or earnings associated with the Hillshire merger. He said the company expects the addition of Hillshire to be accretive to earnings in fiscal 2015 and substantially accretive thereafter. Leatherby said he expects at least 10 percent earnings per share growth in fiscal 2015. Tyson's fiscal 2014 year ends Sept. 27.