Multiple (Pershing Square portfolio: MDLZ, APD, ZTS, QSR, CP, HHC, VRX, NOMD, HLF-short)
The three reasons
- 1
Mondelez EBIT margin of 13.1% is far below peers (Kraft Heinz 26.5%, Hershey 20.0%) and well short of 3G playbook results
- 2
Herbalife is a pyramid scheme whose top 1% captured 89% of earnings while 86% of members earned nothing
- 3
Despite Q1 2016 -25.6% hit from Valeant, long-term strategy compounded at 476% vs S&P 143% since 2004
Primary demands
- Mondelez: drive EBIT margin from 13% to optimized level well above 17-18% 2018 target via 3G-style ZBB, SKU reduction and procurement
- Air Products: continue Seifi Ghasemi transformation; complete Versum Materials spin-off and close 350bps margin gap vs Praxair
- Zoetis: execute $300mm cost reduction program; lift operating margins from 25% (2014) to ~34% by 2017
- Valeant: stabilize company post-collapse; install Joe Papa as CEO; file 10-K and resolve Philidor accounting
- Herbalife: force regulatory action and exposure of pyramid scheme structure
KPIs cited
Pattern membership
Where this document fits across the library's 12 rhetorical / structural patterns.
Notable slides (11)
Notes
Annual European LP investor meeting covering the full Pershing Square portfolio rather than a single activist campaign. Filename prefix '2016-02' is misleading; cover date is April 26, 2016. Structure: (1) YTD performance review after catastrophic Q1 2016 (-25.6%), (2) position-by-position portfolio update for MDLZ, APD, ZTS, QSR, CP, HHC, VRX, NOMD, (3) Herbalife short thesis refresh, (4) PSH closed-end fund update and NAV discussion, (5) team/Q&A. Tone shifts: analytical/educational for longs (especially Valeant damage-control narrative — Ackman joined board, Papa installed), adversarial for Herbalife (pyramid scheme language, CEO Johnson quoted verbatim on recruiting being the 'bloodstream'). Good specimen for the Mondelez peer-gap EBIT chart (p14) and the 3G/Heinz case study (p18) used to anchor operational upside. The Herbalife subsection is the cleanest contrarian argument in the deck — uses management's own 10-K language, invented-metric critique ('Active New Members'), and pyramid-collapsing KPIs. Campaign phase is 'follow_up' because every position is a years-old PS holding being re-underwritten, not introduced. Target company field is 'Multiple' by necessity.