Ramon Laguarta is a polyglot.
He speaks English, Spanish, Catalan, French, German and Greek. Come October, the Barcelona, Spain, native will start learning the language of corporate CEO and all that entails at one of the world's largest companies, as he takes the reins of PepsiCo Inc. (PEP) - Get Report from Indra Nooyi, who has been in the role for a dozen years.
Analysts, though, expect the transition to be smooth, as the board unanimously approved Laguarta's elevation to CEO, which will make him the sixth person to have the role. He will join Pepsi's board on Oct. 3, and Nooyi will stay on as company chairman until early 2019.
"In part [Laguarta] was chosen because of his global outlook (96% of the world's population lives outside the U.S.)," Pablo Zuanic, an analyst at Susquehanna Financial Group LLLP, wrote in a note on Monday, Aug. 6. Laguarta "aims to accelerate the company's overall growth, while achieving the company's goal of sales growth of nutritious products to outpace the rest of the portfolio by 2025. 'Innovation is going to be key.' In a recent presentation to staff, [Laguarta] said he hopes the company can grow at 5% vs. the current 2-2.5%."
In his own note Monday, Amit Sharma of BMO Capital Markets said, "We believe that the transition does not signal any changes in PEP's near-term strategic direction, particularly with respect to the likely separation of its snacks and beverages business in North America, given the timing of the announcement, PEP's recent share performance (+20% over last three months), and like-minded thinking of Mr. Laguarta."
PepsiCo could see some executive departures, Kevin Grundy of Jefferies & Co. wrote Monday, from those passed over.
"Hugh Johnston (56), comes to mind considering he had been given greater oversight for operations beyond his role as CFO (e.g., Quaker)." Grundy added, however, "PepsiCo has a deep bench, and we expect the upcoming CEO succession, and ability to handle any other potential departures, to be a relatively smooth process."
Share of PepsiCo closed up Monday to $117.38. The stock is down 1.8% in 2018.
Since September 2017, Laguarta, a 22-year-veteran of the company, has been PepsiCo president, overseeing global operations, corporate strategy, public policy and government affairs. Before that, Laguarta was CEO for Europe and sub-Saharan Africa, which included overseeing both mature and emerging markets, and, earlier, he was president of PepsiCo's Eastern Europe region. He also worked for Chupa Chups SA, a leading candy company in Spain.
In a Vimeo presentation, Laguarta outlined his vision for the company on Sept. 7, the day he became president, including growth, new products, sustainability and promoting women.
"All-in, we were encouraged that PEP once again chose to look internally for its CEO candidate and believe that the decision to promote illustrates PEP's strong bench of internal talent and long-term focus on succession planning," Wells Fargo Securities LLC analyst Bonnie Herzog wrote in a note on Monday.
All six of PepsiCo's CEOs since the company's creation in 1965 with the merger of Pepsi-Cola Co. and Frito-Lay Inc. have come from within the organization.
"As much as the departure of Ms. Nooyi is a loss for PepsiCo, she leaves behind a strong team and a clear vision. These should serve the company well in the years ahead," said GlobalData Retail managing director Neil Saunders on Monday. "Her successor, Ramon Laguarta is also well-versed in PepsiCo and has direct experience of areas such as corporate strategy and overseas expansion -- both of which will be vital to the firm's continued success."