Milling & Baking News - May 15, 2012 - 30

Financial Results 

breakfast biscuits very successful. While pricing was a major contributor to the sales growth, Mr. Brearton said most of the price increases were carryovers from actions taken late in 2011 to offset higher raw materials costs. “Despite the higher pricing, vol/ mix was solid, with few puts and

takes,” he said. “The benefit of the Easter shift was essentially offset by product pruning of about 1 percentage point. Most of the pruning was in Oscar Mayer, food service, and Canada. In addition, vol/mix was negatively impacted by approximately 70 basis points from trade inventory reductions in U.S. Beverages.”

U.S. Beverages was the weakest sector in the first quarter, with sales down 14% as reported and 3.5% on an adjusted organic basis. Mr. Brearton attributed the weakness to timing issues he said will not undermine the segment’s prospects for the balance of the year. “So, what happened in beverages?” he asked. “Two factors. First, customers built Capri Sun inventories last year in advance of an announced January price increase. This trade load helped drive 15% growth in beverages in the fourth quarter. As a result, Capri Sun volume was soft in quarter one, as customers reduced stocks. And second, customers, anticipating possible price reductions in the second quarter, reduced inventories of Maxwell House coffee. The timing of marketing programs also impacted Maxwell House sales. These two factors affected both the top- and bottom-line performance of the beverage business in quarter one. However, sales at the cash register remains strong across the business. So we’re confident the beverages

will show solid top- and bottom-line growth for the full year.” In her remarks, Ms. Rosenfeld said chocolate was an area of strength with sales globally up 10%, buoyed by a double-digit gain in developing markets, especially Latin America (sales in Brazil were up almost 30%). The company’s “sole disappointment” in the quarter remained the gum and candy business. “Frankly, it’s taken us longer to change gum’s trajectory than we had anticipated, largely due to the sluggishness of the macro environment,” she said. MBN

Gruma majority net slides sharply in ﬁrst quarter
MONTERREY, MEXICO — Gruma S.A.B. de C.V. posted majority net income of 84 million pesos ($6,470,000) in the first quarter ended March 31, down sharply from 4,093 million pesos in the same period in fiscal 2011. Sales totaled 15,412 million pesos ($1,167 million), up 26% from 12,187 million pesos in the same period a year ago. The company said sales growth reflected price increases across most subsidiaries as well as 5% volume growth driven mainly by Gruma Corp. and GIMA. Operating income at Gruma Corp. totaled 272 million pesos ($20,953,000), down 12% from 309 million pesos in the first quarter of fiscal 2011. Net sales totaled 6,369 million pesos ($490,625,000), up 13% from 5,622 million pesos a year ago. Sales volume at Gruma Corp. grew 12%. “The increase (in sales volume) resulted from the acquisitions made during 2011 as well as from organic growth, especially at the European operations in connection with new and increased customer accounts, and launching of new products, among others,” Gruma said. Operating income at GIMSA totaled 294 million pesos ($22,651,000), down 29% from 417 million pesos in the same period a year ago. Net sales, meanwhile, totaled 4,273 million pesos ($329,182,000), up 35%. Sales volume at GIMSA increased 4% to 490,000 tonnes. Shares of Gruma S.A.B. de C.V., which traded as high as $11.85 per share on April 25 prior to the earnings release, fell 13% to as low as $10.30 per share on April 27. MBN
bakingbusiness.com / world-grain.com

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30 / May 15, 2012 Milling & Baking News

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Milling & Baking News - May 15, 2012

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