Post ready to shatter the PowerBar mold

by Keith Nunes
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The PowerBar brand has had limited innovation, Post executives said.

ST. LOUIS — Post Holdings closed on its acquisition of the PowerBar and Musashi businesses from Nestle for approximately $550 million on Oct. 1. On Feb. 6, Rob Vitale, president and chief executive officer of Post Holdings, outlined some of his company’s plans for the PowerBar brand.

“PowerBar is a great brand but it has been neglected,” he said in a conference call with securities analysts to discuss the company’s first-quarter financial results. “It requires product investment and a restart of its overall marketing strategies. We are planning and implementing the required changes. F.Y. 15 will be an investment year for this brand, with our efforts benefiting financial results in F.Y. 16 and beyond.”

A key initiative, Mr. Vitale said, will be expanding the brand into other product categories. He noted that the nutrition bar category had changed and PowerBar did not keep up with the changes.

“It has stayed mostly a slab product with limited innovation,” he said. “We need to innovate around the brand. The brand has terrific equities, and we think can be extended beyond the bar into different forms like powders and shakes.

“So we think it needs to be proliferated. We think the marketing message needs to be refreshed. Obviously, it was a very small brand within the Nestle ownership, the Nestle portfolio. And we think it simply needs more attention and more focus.”

Following a series of acquisitions that not only include PowerBar, but also Michael’s Foods and Dakota Pasta Growers as well as the acquisition of MOM Brands, which was announced in January, Post Holdings management has a lot to focus on. For the first quarter of fiscal 2015, ended Dec. 31, 2014, post recorded a loss of $101.6 million. The loss grew compared with the same period of the previous year when Post Holdings lost $5 million.

As a result of its acquisition efforts, sales reflected the changes as they rose to $1,073.9 million during the quarter, a significant increase compared with the previous year when sales totaled $297 million.

Despite the company’s first-quarter performance, Jeff Zadoks, chief financial officer, reaffirmed Post’s adjusted EBITDA guidance of between $540 million and $580 million, excluding any contribution from MOM Brands.

“ … We expect progressive improvement in quarterly adjusted EBITDA throughout F.Y.15,” he said. “The expected sequential improvements are primarily driven by recovery of Dymatize, seasonality and cost management initiatives at Post Foods, and the timing of commodity cost decreases impacting operating results.”

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