NEW YORK (Reuters) - Beam Inc BEAM.N Chief Executive Matthew Shattock thinks the spotlight will be good for his newly independent alcoholic drinks company.
Hours before ending his first work week as head of a publicly traded U.S. company, Shattock, who hails from Somerset, England, told Reuters that the maker of Jim Beam bourbon and Sauza tequila should be able to make decisions more quickly and grow its business faster than it did as part of Fortune Brands.
“The ability to go out and chart our destiny as a stand-alone business ... I think that is going to be a different and even more positive driver for the performance of our company,” Shattock said in an interview.
He declined to give a specific earnings forecast, but said Beam’s long-term goal is high single-digit earnings growth. Other goals are to outperform the market in sales, have operating income grow faster than sales, and have earnings per share grow faster than operating income.
Shattock, whose favorite drink is Jim Beam Black either on the rocks or with ginger ale, has been the CEO of Beam since April 2009. Yet up until this week that business was part of the conglomerate Fortune Brands Inc. Fortune on Monday spun off its home goods unit, now called Fortune Brands Home & Security (FBHS.N), and changed its name to Beam.
But unlike the home goods business, which sells Moen faucets and Simonton windows, Beam has not adopted a poison pill to protect it from a hostile takeover, even though it is widely seen as an attractive target, especially for market leader Diageo (DGE.L), which lacks any big bourbon brands.
“The best defense we’ve got is performance,” said Shattock, whose company is the fourth-largest spirits maker behind Diageo, Pernod Ricard (PERP.PA) and privately held Bacardi.
Shattock said he was intent on running Beam independently and dismissed the market’s takeover chatter.
“There is constant speculation in this industry ... Since I’ve been here I think every week I’ve heard a different rumor, all of which have proven to be untrue,” said Shattock, who served as a tank troop commander in the British Army before spending 16 years at Unilever (ULVR.L) and six years at Cadbury, before it was bought by Kraft Foods Inc KFT.N.
When it comes to growth, Shattock said the first priority was to increase sales of its current brands, which also include Maker’s Mark bourbon, Courvoisier cognac and Cruzan rum.
After brand investment, Shattock said the company would weigh acquisitions and share buybacks. The company could also pursue more partnerships, such as the one whereby Coca-Cola Amatil (CCL.AX) distributes its products in Australia.
Shattock said Beam would continue focusing on new products, which currently account for about a quarter of the company’s growth.
Recent introductions include the cherry flavored bourbon Red Stag by Jim Beam, Pucker flavored vodkas and Courvoisier Rose, which is cognac blended with red wine grapes.
Shattock, who said his first drink was probably a beer after a rugby game, declined to elaborate on future new products, except to say that “the best innovation lives at the intersection of what is similar and what is different.”
Reporting by Martinne Geller; Editing by Richard Chang, Gary Hill and Bernard Orr