|Tyson CEO Donnie Smith says the company is moving quickly to capitalize on synergies gained from the company's merger with The Hillshire Brands Company.|
SPRINGDALE, Ark. – Tyson Foods, Inc. is on its way to leveraging synergies gained from its merger with The Hillshire Brands Company. Speaking at the Barclays Back-to-School Consumer Conference, Donnie Smith, CEO, told investors the integration of the two companies is well under way.
"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 said. "The more we get into it, the better we feel."
The merger of Tyson Foods and Hillshire Brands creates a single company with more than $40 billion in annual sales and a portfolio of popular brands such as Tyson, Wright, Jimmy Dean, Ball Park, State Fair and Hillshire Farm. The merger also is expected to generate savings of $225 million in fiscal 2015 and more than $500 million by fiscal 2017.
Dennis Leatherby, executive vice president and CFO, confirmed Tyson's fiscal 2014 earnings guidance of at least $2.78 per share, excluding costs or earnings associated with the Hillshire merger. He noted that the company expects the merger to be accretive to Tyson's earnings in fiscal 2015 and substantially accretive thereafter. The company should realize at least 10 percent earnings per share growth in fiscal 2015, Leatherby added. Tyson's fiscal 2014 year ends Sept. 27.
"We're staying focused on our strategy," he said. "We're going to leverage our iconic brands and #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."