By Robert van den Oever
AMSTERDAM--D.E Master Blenders 1753 (DE.AE) will start a
restructuring of its middle management as part of its drive to turn
around its coffee and tea business, which was recently spun off of
Sara Lee Corp. (SLE), its chief financial officer said Monday.
On Monday, trading in D.E Master Blenders officially started,
after three weeks of trading on an "as-if-and-when-issued" basis.
With the separation from its former parent company, D.E. Master
Blenders has also moved its head office from Utrecht to
Amsterdam.
The move symbolizes a change of culture that is necessary in the
company, said Chief Financial Officer Michel Cup at the sidelines
of the Euronext ceremony. The new top management has been put in
place, but now middle management needs to be reviewed, Mr. Cup
said. "We are in the middle of a turnaround," he added.
Under the ownership of Sara Lee, the coffee business lagged. "It
was managed on the basis of procedures, with many management
layers. We need to be more flexible, faster in decision making and
execution," Mr. Cup said.
That might require less people, but Mr. Cup didn't want to
disclose if a reorganization program is planned. "Implementing the
new culture means for our people: do I go along with the change or
not? Some will decide not to. In that way, you get natural
attrition."
Since D.E Master Blenders' listing June 12, the wealthy German
Reimann family, known from its investments in Reckitt-Benckiser
Group PLC (RBGPY, RB.LN) and Coty, has bought a 12.19% stake via
its Donata Holding. "They have informed us that they see it as a
financial investment and that they want to stay a minority
shareholder," Mr. Cup said.
Mr. Cup added he has received no signals from other parties who
may want to become substantial minority shareholders. Mr. Cup and
Chief Executive Michiel Herkemij did 17 days of investor roadshows
to explain the spinoff from Sara Lee and the future plans.
D.E Master Blenders wants to become the world's No. 2
coffee-and-tea maker. It is No. 3 with $4 billion in annual sales,
behind Nestle SA (NESN.VX) with $12 billion and Kraft Foods Inc.
(KFT) with $6 billion. The company aims to boost its profit margin
over the medium term to between 15% and 17%, from 14% in fiscal
2011. It is also targeting annual sales growth of 5% to 7%, having
generated 2.6 billion euros ($3.19 billion) in fiscal 2011.
At 1000 GMT, shares were down 1% at EUR9.70.
Write to Robert van den Oever at
robert.vandenoever@dowjones.com