A2 Milk (ASX:A2M) share price in focus following update

More changes are happening at this embattled infant formula company…

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The A2 Milk Company Ltd (ASX: A2M) share price could be on the move on Monday.

This follows the announcement of key executive appointments this morning by the fresh milk and infant formula company.

Why is the a2 Milk share price one to watch?

This morning a2 Milk announced the appointment of two new members to the Executive Leadership Team. This follows the recent resignation of its Chief Executive – Asia Pacific, Peter Nathan.

Management notes that following these appointments the Asia Pacific division, which comprises the vast majority of its sales, will be reorganised into three business units to provide more dedicated focus on its key components. These will be the China domestic business, International export business, and Australia & New Zealand (ANZ) domestic business.

In respect to China, Xiao Li will be the Chief Executive of Greater China. Xiao Li will become a direct report to David Bortolussi, a2 Milk’s Managing Director and CEO. Li will also continue to be responsible for the company’s China label infant milk formula (IMF) and other domestic business.

The appointments

According to the release, Yohan Senaratne will join the company in the role of Executive General Manager – International, reporting to Mr Bortolussi. He will be responsible for leading the company’s cross-border export business, primarily focused on English label IMF products manufactured in New Zealand and sold into China, but also including liquid milk and other nutritional products.

The release notes that the International team will also be responsible for managing English label IMF products sold through all channels. This will be principally via the daigou/reseller and cross-border eCommerce (CBEC) channels.

Also joining the executive team is Kevin Bush in the new role of Executive General Manager of ANZ. In this role, Mr Bush will be responsible for leading the company’s business in ANZ with a focus on continuing to grow the liquid milk business in the near term as well as evolving its strategy to realise the full potential of the a2 Milk brand.

What now?

A2 Milk advised that collectively these leadership appointments and any related organisational changes are not expected to have a significant impact on the employee costs of the company.

But the changes may not stop there. Management explained that it also intends to review its external segment reporting considering these leadership changes and the pending acquisition of Mataura Valley Milk.

David Bortolussi commented said: “I am delighted to be able to elevate two of our high potential leaders, Xiao Li and Kevin Bush, to be direct reports to myself and for Kevin to join Xiao Li on our Executive Leadership Team demonstrating the depth of talent within the Company.”

“I am also pleased to be able to attract someone as talented as Yohan Senaratne to join our Company, who I am sure will challenge our thinking and execution and make a valuable contribution to our Executive Leadership Team over time. Together these appointments and organisational changes will provide more dedicated leadership and focus on key components of our business and improve execution going forward,” he concluded.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended A2 Milk. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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