From Treasury to M&A to Self-Employment with Johan Nystedt

Foreign.

Welcome to this week's Treasury Career Corner podcast where I interview treasury professionals about their treasury careers. Each and every week I talk to them about how they build their careers, where they are now, where they see both themselves and the treasury profession going to next. Let's get on with the show. In this week's show, delight to be joined by good old friend of mine, Johan Neisted, the founder and president of neistat in Enterprise Solutions llc. Well, the group itself provides advisory technology services to enterprise risk management clients. Prior to founding the firm, Johan was actually the SVP finance for RR Donnelly. We headed up M and A Investor relations and corporate fpa. Before that was where actually I met Johann over the odd beer or three or several. Anyway, move on. He was the chief Risk Officer, treasurer, head of IR at conagra Addition. He's had many other senior roles throughout the years. That's what we're going to deep dive in in a minute. But we're going to take Johan back to the dim, distant past. We'll then talk through his career where he and why he started up this, this firm and where it's going to go to. And then we'll, as always in each week's show we'll talk about the future particularly. I think that's very much linked to what Johan's doing as well. So I'll shut up. It's Johan's story. Over to you, sir. Take us back to the beginning of your career and how you discovered finance and then Treasury. Back to you, sir.

Well, thank you so much, Mike. I appreciate that. I actually started a capital campus in Europe, in Sweden, predominantly, even before I came to the United States quite some time ago. When I came over to the United States, I had the chance to work at Philip Morris nowadays Altria, which was exciting to me. I just finished my MBA from Stockton School of Economics. I came to the United States, I looked at this big business. They were in all sorts of interest in consumer pride areas beyond tobacco, they were heavily invested in food space, Miller Beer, they had a capital corporation, etc. So that really allowed me to go from the type of startup companies that I was engaged with in the 80s and 90s to go to the first conglomerate after that. So it was really a way to gain additional experience by going to some big businesses that I found to be very interesting. Then, Mike, from Philip Morris, you know, I went on to Kraft Foods. The reason for that was that I was heavily engaged in the Kraft Foods IPO while still being with Altria. This was back in 2001 or so. And on the heels of being engaged, being part of a core team working on the craft IPO in 2001, you know, later on, when the board, determined to spin off Kraft entirely from Altria, was asked by the team at CRAFT to join them to build and staff treasury for craft. Those were my first couple of steps after I came to the United States.

Okay. And Johan, did you know treasury then or was it all new to yourself or what was the background?

I didn't. So at Altria, I started to work in M and A. So I wasn't at the very beginning directly involved in Treasury M and A and strategic planning. But I joined treasury at Altria in 2001 or so. It was just a natural progression. They had the sense that it's good to kind of help to rotate people or move people along. And that was certainly very much appreciated by myself as well. You know, I always found it to be really helpful to become as broad as you can. I think for me it was always exciting to, you know, go from one area to the other area. And I think the companies where I've been working at, you know, certainly facilitated that as well for me. And that was really exciting.

And, you know, you then kicked into, you know, Treasury. Well, you know, a good move with Kraft Foods. Now I know the group. You know, the group. Some of our listeners may not know the group. If you can, you know, give people a bit of an insight because then that influenced the number of the things that you sort of took part in. You know, things like everything through to, you know, Cadbury's and various other bits. Tell us about Craft Foods and then we'll move on through gently into Levi and things like that.

Sounds good. So Kraft Foods is one of the biggest global food companies in the world. Back when I joined Kraft Foods, as I mentioned, it was. It was just being spun off by Altria, the previous owner. Prior to the spin off, there had already been an IPL where 20% or so of CRAFT was listed on the public market space. We put together before the spin, the capital structure of Kraft, you know, the death rate, credit ratings, et cetera, they had their own credit facility that we established. And then at the time of the actual spin, after the IPO in 2007, 2008, that's when Kraft became its standalone company. They operate in, you know, way over a hundred markets, campus around the world. They own all sorts of products in snacks to, you know, all sorts of food businesses. I was engaged in treasury and M and A for Kraft, so I Had a chance to be part of a number of divestitures, acquisitions. And I would say Kraft itself is kind of a product of a whole number of corporate development activity, inorganic activity in its past.

And then you made the move from. So that was based in Lovely, Illinois and you then made the move to Levi. How did that come about? And what a move that was. So talk us through.

It was a really interesting progression for me. So at the time, we are now somewhere in 2010, 2011 timeframe, Kraft had just acquired Cadbury, the UK chocolate here in a really interesting transaction. I think there's been a lot written about it. You know, I was in the midst of it. It was maybe not the friendly, friendliest acquisition of all times. There was a lot of reluctance I think from the Cadbury side and among public at large in the UK to kind of protect the crown jewel from, from Craft acquiring it. But it was a really interesting acquisition because of how complex it was. But once we had that done and the Cadbury was successfully acquired and the integration looked to be well on its way, you know, from a pure treasury perspective, you know, I felt a little bit like I was, you know, a little bit of twilling my thumbs because clearly Kraft was going to nurse its balance sheet for quite some time after this big acquisition of this fine UK company. So when I was approached by one of the recruiting firms about this treasurer job at Levi Strauss on the west coast and San Francisco, I thought, hey, that could be really exciting. I've been living on the east coast of the United States, I've been living in the middle of the United States. What about going to the west coast of the United States and experience California with my family? So that's what we did because it was again interesting. You know, I always thought it was important to push myself, I think important for anybody to push themselves out of their comfort zone. You know, Levi Strauss represented a totally different industry versus craft and food. It also allowed me for the first time to work for a below investment weight company. At the time, Levi's was rated single B, I believe. And that by itself was exciting because, you know, you really get more. I mean cash is king everywhere. But if you have a single B rating, I think your priorities shift a little bit. And they had a so called ABL revolving credit facility. It's an asset backed facility because of its credit rating. So that was exciting to learn more about. And also the fact that for Levi I had the chance to go beyond Treasury. I was a treasurer, but go beyond treasury to assume a couple of other finance hours as well. So those were the key drivers.

And you made that move before then making the move to ConAgra and again, so you went Midwest, straight across west coast and you did four, five years with Levi and then, you know, the Windy City dragged you back kicking and screaming. What, what happened?

Yeah, so you're correct. I was think I spent about five years with Levi Strauss from the west coast, you know, great. Five years, not only from a professional perspective, but also to live with my, my wife and kids on the west, on the west coast for a while. Certainly appreciated that. What kind of drew me back to the Midwest is that conagra. I found out that conagra Brands was going to move its headquarters from Omaha, Nebraska to Chicago. And I connected with the CFO there at the time. And I said, hey, I'm hearing that you guys are going to move your headquarters from Nebraska to Chicago. I've been in the food space in the past. I kind of like it when, you know, to be part of corporate restructurings and corporate initiatives because it tends to provide for a lot of good stuff to do and learn. So I contacted them, I think it was on Tuesday. By Friday, the same week, I had my interviews with that CFO and the CEO and a few others. And I was really excited about it because of the prospect of again being engaged in a little bit of corporate history for that company. So that drew me back to the Midwest.

Amazing. And again, I know ConAgra, we both do, and things like that. What was that like? And sort of again, from a Treasury perspective you've just mentioned there, and I think it's interesting, you had food groups and sort of commodities that sense then went through Levi, which is more apparel, and then back to food. What, what drew you back by the free lunches?

I actually kind of look to expand my industry experience. Everything else equal. You know, clearly going back to food was known territory from the industry perspective. And there were enough many exciting things about conagra even though back to the food space, that I still felt that this is going to be challenging, which is a good thing in particular when you move the headquarters. And it wasn't like all the functions moved. A lot of finance was still going to stay in Omaha, Nebraska, still is there today, as far as I know. So treasury, for example, the piece I oversaw, treasury investor relations and later on became the chief risk officer on top of that. But from a Treasury perspective, we definitely wanted to have the debt capital markets team. So the capital structure team in Chicago, we had some very, very strong Cash management teams, credit teams and insurance teams that stayed in Omaha. No reason to move them as it was working out really well. But we decided that we needed to have the investor relations functions in Chicago close to the CEO. So you know, providing an opportunity to really think about the different treasury and treasury related areas as well as investor relations and kind of think about what talent do we have, you know, where is it located now and where does it make the most sense to have it in the future. And that was a really exciting, exciting to go through and work pretty well.

For them and then bring us to the next move. And RR Donnelly. So you know that natural step, you know, food, apparel, food and then business communications and marketing. So you know, how did that come about? What was that and what was that like for you in A difference of Treasury? I know you and I spoke about this before and we've talked about over a beer and or two, what was it like moving from, you know, because I talked to someone the other day about how working in say FMCG or you know, a product you can touch and a lot of the companies have different ways of approaching it, but you're going to quite a different business stream, as it were.

Yeah, no, that is correct. It's a different business stream, it's a different industry. But even though, you know, as you work with a company case of R. Donnelley, I was a senior vice president of finance and my three main areas was M and A, heading up M and A heading up investor relations and heading up corporate fpa. Even though the way you do that and the outcome is industry dependent and dependent on the company, the company size, the credit ratings, all sorts of factors. The approach of getting to the right answer tends to be fairly similar. You know, for example, for treasury, right, it's really important to look at the capital structure. It's really important to see given the capital structure, what type of initiatives can you afford to conduct and what can you not afford to do. And if you want to do something but you don't really have either the debt budget for that or your debt constraint or your risk constraint, then I think the job of treasury folks is to then kind of help change the capital structure or help change the risk profile so that these initiatives are doable. Now that's going to depend a lot on the company itself and a lot on the credit ratings, et cetera, and what risk appetite a company has. But the approach of getting to the right answer tends to be be fairly similar. So for me it wasn't really much of an issue to go into a different space. I went from, you know, at Levi's as that business really turned around. You know, we went from single B Levi's to double B. Kind of starting to flirt with with investment grade. But at conagra was definitely investment grade but only was in the single B rating space. So again I could really fall back on my experiences from Levi Strauss and that capital structure in kind of creating the capital structure and supporting the capital structure for it only that was aligned with its strategic objectives.

And that was one of the things you led the sale of the group back in 2022, you know, what was that like for you in treasury terms? And you know, then. Then bring us more up to date.

If you like, just for full disclosure or only is the, you know at or it only I was not responsible directly for treasury, right the 3M&A SP&A& investor relations. But clearly to your point, you know, I worked extremely closely with the treasurer and all the folks in treasury because when you engage in the types of M and A activity that I was heading up, obviously you need to work closely, very, very closely with treasury both as it pertains to divestitures when you have, you know, cash coming in because you sell something as well as obviously acquisitions because now you give up cash to buy something. And you have to be aligned with the treasury team because we need to speak in a consistent fashion with rating agencies about the rating agency impacts. Especially at a company like R. Donnelly that is below investment grade. That was clearly very important. So yeah, I mean When I joined RR Donnelley back in 2000, 2019 before COVID I thought was a really interesting business because if you look at Art Donnelly, they spun off some of the IKEA businesses back at the tail end of 2016. And the art only today, the art only where I worked was really the Remain co after them spinning off some really significant businesses and really was more of a kind of an American quilt of different businesses. And that's what excited me about that M and A job was that it was pretty clear that in joining RR Donnelly on the MA side it was pretty obvious that a lot of work could be done and probably would be done. And that's exactly what it was. A lot of corporate development activity, a lot of acquisitions were looked at, a lot of divestitures that we closed on, which then culminated with the sale of the entirety of or what up until this year was a public company and selling it to private equity in a transaction that was really viewed by Wall street to be very value enhancing. And therefore provided gains for the shareholders, which was great.

And then your latest sort of venture. Can you bring us up today? You and I talked about it as well for the guys that are listening today. You know, some people might be thinking themselves, I wonder if I could do this or take it, because I know you've got a passion very much for what you're doing now. Bring. I'm not going to do it. You. I'll let you do it. Explain what you're doing now, why. And you know, where you see it.

Fitting my new business after, after the sale of, or only to private equity, you know, I thought, you know what I've been, I've been thinking about, I've been to trying, flirting with the idea of starting my own business now for quite some time, frankly, at the tail end of working at ConAgra, I started to really get ready to start my own business. Enterprise risk management has always been really, really exciting to me. That's why I was able to kind of become the chief risk officer at ConAgra, for example, because I kind of like the idea, you know, risk risk management has gone a long way. It's gone from, you know, what I call once upon a time enterprise list management list with an L, where you can put together a list about risks and you hope that once you present it to the board or senior management, you hope nobody's going to ask you any questions about it because you had no depth to it. To real enterprise risk management with an R, which is very much connected into the strategic initiatives of the business. Real, erm, goes way beyond just identifying and surveying and prioritizing risks. It's about creating really strong risk management action plans where you denote who's responsible for what and when should it happen and how are the different top risks connected to each other. To also extend to the concept of portfolio risk. And what I mean by that is that we measure the risk capacity. So risk capacity is when you look at the covenants, loan covenants or bond covenants, or you look at the restrictions imposed by the rating agencies to maintain the type of credit rating you want to maintain, you can fairly easily measure how much risk capacity do you have. And then you can, once you know the risk capacity given the ratings you're looking to stay within in terms of thresholds, then you can look at what risk am I actually taking. And I think the role of business is to take risk. No risk, no return, last time I checked. But it's also about not taking foolish risk. Don't take uncompensated risks or undercompensated risks, look at risk almost like debt, right? I mean debt is very near and dear to the heart of anybody in treasury because they tend to own cash and therefore they own debt. And debt and risk is kind of, kind of similar in a way. Not only are they both four letter words, but also debt is not necessarily a bad thing, right? I mean we incur debt to get liquidity or cash to invest behind initiatives. Risk is very, very similar. Risk is something that we also incur as we launch new initiatives. So we acquire businesses. We just need to make sure that we manage the risk, that we handle the risk, that we don't take too much of it. So risk is good. We just have to make sure that we control it. And that's what really drove me to start this business. Because I think today the concept of debt and cash, of course people get, and we speak about leverage and so forth and below investment grade, this investment grade. But I think risk still has a long ways to go and really deserves to be anchored into the strategic plan for businesses.

Well, again, that's, that's a nice segue. So in the future of treasury and you know, obviously we're very treasury focused. I know this is a wide arrayment with, you know, your, your venture, as it were. But why do you, you know, we'll link it to risk management but also think about the other things that are happening within Treasury. What are you thinking those treasurers out there need to be thinking about? What are you thinking? Goodness, guys, you the. And this is where you can help sort of thing. I don't want to make this a total sales pitch for yourself, but it can little bit of one. But explain to us again why this is important. You have had other guys, you know, way back when we had, when ESG was coming up and you know, the guys got into that, which is, you know, very evident. Why do you think this is so important?

Would you say A couple of thoughts. So one of the things that always impressed me with treasury and treasury professionals is that they are oftentimes called upon to go beyond the sign of treasury, to really be part of the whole finance function and sometimes support the entirety of the enterprise function. I think that's one of the really interesting aspects with treasury is that they are oftentimes entrusted to kind of go into new areas where there is no current obvious owner. And I think enterprise risk management is one of those areas. I mean clearly now where the pandemic and inflation supply chain disruptions, Enterprise risk management truly is at the forefront of a lot of people's minds right now. And I think for treasury folks, I think enterprise risk management really is a great opportunity to be able to take something on that are truly going to bring them to the table where strategic decisions are being made at company, where we're strategic plans are created because, erm, includes, you know, it's very much linked to the strategic plan in that, you know, traditionally strategic plans was about, you know, oh, we're going to have point projections or point estimators about, you know, the next three years, the next five years, this is going to be our profit. But what ERM does is to kind of firm that up a little bit by helping company to figure out the, the critical success factors, so called must believes, in order to make that strategic plan really happen. And also kind of inventories the interdependences of the different strategic initiatives and provides risk triggers that, hey, if the strategic plan was based on the assumption of inflation being 2% and now it's 7%, erm kind of outlies, lays out what, what other aspects one should look at that are connected with, for example, a certain inflation assumption. So it provides whoever manages the ERM with a chance to be more directly linked, I think, to strategic plans. I think that's one aspect of ERM that's interesting. Of course.

Well, let me jump in, I'm going to ask. So we have a number of listeners from the treasury assistant level through to global treasurer. So if I'm a Treasury assistant analyst listening today, you talk there and it's very high level. Erm, that's treasurer's responsibility. What, what, what connection do I have it on a day to day basis, you know, I'm doing my treasury dealing, you know, why is erm, of any significance to them or is it just something they're studying their exams later and maybe one day they'll touch on it. How would you describe that to them?

That's a great question. I think, you know, when you start out in, in finance, including treasury, you know, some of the really important key aspect is to try to get to know the business, because it's first when you get to know the business that you can become a business partner, right? And we talk about that a lot about, you know, treasury becoming more and more a strategic partner to the business. So getting to know the business is important. Getting to know the people, key people, is important too, especially to start out you need to kind of cultivate internal relationships as well as external relationships, and that's really important. And to then become this partner based on, you know, get, you know, having been able to understand the business a little bit and getting know people, you know, erm, enterprise risk management is a great tool to really add value because you know, if you know exactly what the next person knows and if all the, the focus size are the same, what are you adding? But if you embrace something as new and exciting as erm, and you just look at that little bit and try to provide that as your contribution to your business, as to how you can add value as a business partner to the business based on the business you learned, you looked at and the people you know, then you really have something to come with.

And then again I really want to try and you know, get under this for a more junior member of staff or treasury manager or something like that. I know that erm, it sort of encompasses things like cyber and you know, all these different risks to a business. How would you then. So you, they're dragging you in, they're saying actually can you explain erm, to our operations team or what they, you know, what they should, what effect it should have on them or what, what they need to be thinking about in their day to jobs. I know again you and I talked about this before. How would you sell it, present it? How would you explain to those, those guys that they need to keep in the back of their minds?

Would you say yeah, I think in its very simplest form, enterprise risk management is just to add the dimension of risk and uncertainty to the type of assessments or projections we tend to make. So for example, if you are implementing a new system, a new treasury management system, erm, could be taking a look at, well we're getting this new treasury management system together by being able to monitor and track cash much better, by being able to have better analytics about our debt. How did this allow us to take on, you know, since we're reducing the risk now because we have more insight in cash and the capital structure through our new TMS system, you know, what type of risk reduction does that provide? Just to go from, you know, plans, for example, and if you say okay, my budget for 2023 calls for me to make a profit $100 million and then the next year 24, 110. I mean at the simplest level what erm does is to say, okay, got it, we think we're going to make 100 and then 110. But what are the potential outcomes, other outcomes behind that? You know, I don't want to be geeky but you know, what's the distribution? What's the realm of the possible. And if there is a really important assumption, be it like you said in operations, maybe the plan is based on. On starting up another seven plants somewhere, or maybe it's based on the company being able to penetrate a new market somewhere. You know, then, then, then, erm, in its simplest form is just to have a sense as to, okay, I get it, this is what the strategic plan calls for. But what are the key assumptions to make that happen and what are the factors we should watch out for? Because if those critical success factors do not occur, the plan may be in danger. Right. So I think at any level, at the analyst level, the mature level, just to think about initiatives, not just like initiatives that are supposed to provide a certain profit on the road, but also kind of overlay the risk behind that and opportunities behind that to make projections, not just to be kind of point estimators, but just thinking about what are the risks and opportunities involved in the different initiatives. I think that is what erm, is at.

Was we. We not that far off the end of the show? Because we keep it to about half an hour, 40 minutes if we go. Johann, looking back over your career, we're going to put in the show notes, obviously your LinkedIn profile, because I think it'd be great for people to connect to you because, you know, this is exactly what they need to be thinking about, all this, erm, stuff coming through and everything else. But if you reflect back over that time and before we give your top tips, if you like, as you reflect, you know, what sort of advice would you give to some of the listeners today? Obviously this is the treasury career corner. You've had this amazing career so far in treasury and long may it continue. But what would you sort of push back to them and say, oh, you know, this is. These are the kind of decisions you guys need to make, or, you know, what sort of. Again, you moved Midwest or East Coastish right the way across west and back again, you weren't afraid to make that move. And I know that you and I have connected a number of times, but, you know, maybe it's that or what other, what other tips would you give to people?

Maybe, number one, I know it's oftentimes sad, but I think there's a lot of truth behind it. Stay hungry, get out of the comfort zone. In fact, as soon as you start to feel comfortable, it's probably time to, you know, either within the existing company or a new company, you know, do something new. I think we learn the most as humans when we are challenged and when we are outside our comfort zone. So that's number one, get out of the comfort zone. When you're there, then do something else, take some risk, try to get to a new job, position rotation inside the company or think about external opportunities. That's number one. Number two, I think it's sometimes forgotten by treasury people how great, how unique the treasury works is because it's one of the few areas in finance that truly can be quite external. Right. I mean how many areas of finance do you have where you have the chance of working with external stakeholders like debt holders, when you issue debt, you know, banks, when you work on cash management initiatives, credit rating agencies, you really have a lot of external interactions and the potential of a lot of external interactions in treasury and that is highly sought after in your organization. So if you want to become the strategic business partner just by virtue of you naturally likely having connections with the external community, that by itself is going to provide you quite a bit of value internally in your organization as well. And then lastly as I mentioned before, at any stage of your career, early on or later on really try to always understand, get to know the business and keep that up and tie connections with people, know the people and then be aware change is everywhere. The one thing that is not going to change is that change will continue to happen. So you know, be aware of that, try to contribute to it. Digital transformation, I think it's really important.

And would that be your wrap up or. I mean, you know, as I said I was to mean to be unfair there but we'll put your LinkedIn details in the show notes but as you reflect back on it or you know, think about, you know, some of the future is, you know, is there anything else that you know, you, you think, you know what. Yeah, this is what these guys listening today. You've heard a couple of the shows yourself before that, you know any final takeaways that they should have as well as those? Because I think they were great.

Yeah. Final takeaway would simply be, you know, I truly feel that enterprise risk management is the entry ticket into strategic discussions and being part of the room where, you know, being in the room where it happens, it's one of those tools you can use to really have the chance to be more involved in strategic decision making and I don't think you need to be at very top level in treasury to do that. I think erm, is going to be just like technology and you know, foundational Excel skills, whatever was in the past, it's going to be the Path in.

Yeah. Amazing. Well, as I say, I'll put Johan's details in the show notes. I know he's a great guy to have in your network and I can't wait to see him later on this year. Hopefully maybe AFP or maybe other bits as well. You know, it'll be across in Chicago as well. It's amazing to talk to you, sir, and yeah, just looking forward to it, really, really, you know, catching up and, and, and, and good luck with this new, new venture. I think you're, you're bound to do well because we know each other. I know you know how commercial you are and I think anybody, again, you want to sort of talk, erm, connect with you, Johan, he's definitely someone to have in your network. So, no, Amazing. Thank you, sir, and look forward to seeing you soon.

Thank you so much, Mike.

Hello, it's Mike here again. I hope you enjoyed this week's show. If you did, then maybe you want to follow the show or subscribe, depending on where you listen, whether that's itunes, Spotify or another great place to listen to the show from. It's totally free and means that you'll be the first to see each and every week when we release a new show. And maybe whilst you're there, you could even leave a quick review. Reviews and ratings are among the most important metrics for a podcast to effectively rank. And as you can probably appreciate, the podcast is a lot of hard work to produce. Every week. It'd be amazing. Just take, say, 20 seconds, leave a quick review of my amazing guests and their great career stories. We'd really appreciate it. Thanks very much and I can't wait to see you soon.

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