Milling & Baking News - March 24, 2009 - 13

Business

Strengths in General Mills results
despite decline in quarterly profit
MINNEAPOLIS - High input costs
and a difficult comparison to strong
year-ago results accounted for a 33%
decrease in earnings during the third
quarter at General Mills. Still, the
company experienced extraordinary
growth in several grain-based foods
categories and raised earnings guidance for the year.
For the quarter ended Feb. 22, General Mills had net earnings of $288.9
million, equal to 88c per share on the
common stock, which compared with
earnings of $430.1 million, equal to
$1.28 per share, during the same quarter of the previous year.
Net sales for the quarter were
$3,537.4 million, up 4% from $3,405.6
million during the same quarter of the
previous year.
Management's optimism
notwithstanding, the share
price of General Mills
tumbled 11% in New York
Stock Exchange trading
March 18.
"In the fourth quarter we
expect our input cost inflation will be well below our
estimated full-year inflation
rate of 9 per cent," said Ken
Powell, chairman and chief
executive officer. "The benefits of this lower input cost inflation
and an extra selling week this year will
contribute to strong segment operating
profit growth for the final quarter. The
operating environment is very challenging; however, our good performance
through the first nine months of fiscal
2009 has enabled us to modestly increase
our full-year earnings guidance."
General Mills has revised upward
its guidance for fiscal 2009 to a diluted

earnings per share range of $3.87 to
$3.89 per share, up from $3.83 to $3.87
per share and its initial guidance of
$3.78 to $3.83.
For the quarter, operating profit in
the U.S. Retail segment was $489.5 million, up 1% from $486.2 million during
the same quarter of the previous year.
Sales for the segment were $2,495.8
million, down 9% from $2,300.8 million during the same quarter of the
previous year.
In a March 18 conference call, Mr.
Powell identified several grain-based
lines performing especially well, beginning with Big G cereal. The Cheerios
franchise grew strongly as did Fiber
One and several child-oriented brands.

Grain-based strength
General Mills, Inc.
Sales growth in quarter ended Feb. 22
Pillsbury refrigerated dough
Betty Crocker dessert mixes
Bisquick
Gold Medal flour
Big G cereals
Frozen hot snacks
Frozen pizza

12%
13%
21%
38%
10%
27%
28%

Promising new products include Banana Nut Cheerios and a shredded variety of Fiber One.
Bolstered by a strong holiday baking
season, Pillsbury refrigerated dough
sales were up 12%, Betty Crocker baking mixes grew 13% and Bisquick was
up 21% on the success of Shake and
Pour pancake mix.
"Sales of Gold Medal flour grew 38%
in the quarter, as more people baked at
home," Mr. Powell said.

Imperial c.e.o. 'pleased with progress'
of Port Wentworth rebuild project
SUGAR LAND, TEXAS - Imperial Sugar Co. said it has spent approximately
$44 million of the estimated $200 million
to $220 million in construction costs related to the rebuilding of its Port Wentworth, Ga., refinery damaged in an explosion and fire in February 2008.
Imperial said its property insurance
policy provides coverage for construction replacement cost, as well as business interruption and certain payroll and
other costs. Through Feb. 28, the company said it had received $125 million of
14 / March 24, 2009

Milling & Baking News

advances under the property insurance
policy, which are not identified with any
specific coverage under the policy.
Imperial earlier said it expects to begin producing granulated bulk sugar at
the facility this spring and complete restoration of the packaging capabilities by
this fall.
"We are pleased with the progress of
the rebuild project," said John Sheptor,
president and chief executive officer.
"The foundation of the new silos was
completed in February and substantial

Other grain-based categories performing well included Totino's Pizza
Rolls and Pillsbury Savouries, up 27%,
and Totino's pizza, up 28%.
The International segment had an
operating profit of $48.9 million for the
quarter, down 6% from $52.2 million during the same quarter of the previous year.
Sales for the segment were $580 million,
down 5% from $612.8 million during the
same quarter of the previous year.
The Bakeries and Foodservice segment
had an operating profit of $21.9 million,
down 61% from $56.1 million during the
same quarter of the previous year. Sales
for the segment were $461.6 million,
down 6% from $492 million during the
same quarter of the previous year.
"The trend of consumers eating
more meals at home is challenging for
this division," Mr. Powell said.
He noted that the third quarter last
year included a major contribution
from grain merchandising with grain
prices hitting peak levels.
"When you exclude grain merchandising profits from both years, we're
posting 8% profit growth year to date
on the rest of our business," Mr. Powell said. "And we think that's a very
solid performance in the current industry environment."
For the nine months ended Feb.
22, the company had net earnings of
$945.6 million, equal to $2.84 per share,
down 15% from $1,109.5 million, equal
to $3.32 per share, during the same period of the previous year. Sales for the
nine months were $11,045.6 million,
up 9% from $10,181 million during the
same period of the previous year.
"We expect to finish the year on a
strong note," Mr. Powell said. "We intend to continue investing substantial
levels of consumer marketing support
behind our brands in order to help position our businesses for continuing
growth in fiscal 2010." MBN

portions of the structural steel, walls,
ceilings and floors for the packaging
and administrative buildings have been
erected. The new drying granulator for
the refinery has been installed and other
repairs to damaged areas are significantly advanced. All major equipment has
been ordered and is being expedited by
suppliers. Productive discussions with
representatives of our insurance companies continue, and an additional $15 million of advances were received in February. Our customers continue to be very
supportive and look forward, as we do,
to the Port Wentworth refinery coming
back on line." MBN
bakingbusiness.com / world-grain.com

http://www.bakingbusiness.com http://www.world-grain.com

Milling & Baking News - March 24, 2009

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