Milling & Baking News - May 26, 2015 - (Page 18)

Financial Results Investments a drag on Weston Foods first-quarter income TORONTO - Executives at George Weston Ltd. said earlier this year that significant investments in capital would have an adverse effect on operating income in its Weston Foods business during fiscal 2015. That outlook rang true in first-quarter results issued May 12. Operating income in the Weston Foods segment totaled C$41 million ($34 million) in the first quarter ended March 28, down 33% from C$61 million in the same period a year ago. Adjusted operating We're Didion. We've been in the corn business for more than 40 years. Leading food manufacturers our growing portfolio of value-added ingredients, we will be your partner to put food on America's table. (913) 484-3452 18 / May 26, 2015 Milling & Baking News income fell 14% to C$45 million ($37 million) from $52 million. Sales, meanwhile, increased 12% to C$504 million ($420 million) from C$449 million. "The quarter one results accordingly reflect lower operating income as a result of the investments that we are making," Pavi Binning, president of George Weston, said in a May 12 conference call with analysts. "In the quarter, we did benefit from volume growth and some pricing, but material and other input costs were also higher. Our outlook for Weston Foods for 2015 remains unchanged. "For the full year, Weston Foods expects a decline in adjusted operating income due to the costs associated with capital expenditure, investments in innovation and capabilities, and higher input costs, including the negative impact of foreign exchange. These costs will be partially offset by pricing, volume growth and productivity. On the comparable 52-week basis, management continues to expect the declines in adjusted operating income to be greater in the first half of the year than in the second half." While discussion of the first-quarter results was fairly brief, Mr. Binning did highlight a few areas of interest to the grain-based foods industry. "We are building a new cake facility in Indianapolis," Mr. Binning said. "There's a line that's going to be coming up in the next three or four weeks." The facility, which will be part of Maplehurst Bakeries, L.L.C., a division of Weston Foods, was expected to be operational in March 2015. Weston invested more than $77 million to renovate and equip the 180,000-square-foot facility in Lebanon, Ind. The facility will house the company's warehouse, distribution and manufacturing operations for its cake and cupcake products. "We're investing in crackers at our Front Royal (Va.) facility. I expect that to be up towards the end of the first quarter. And then also, we're investing in the cookies, and we just got some capacity that's up and running at our Kitchener (Ont.) facility, and also we're working on North Sioux City (S.D.). Different businesses, the capacity is coming on at different points in time, but it will be through the sort of from the second quarter onwards for the balance of the year." Overall, George Weston posted net earnings of C$167 million ($139 million), equal to C$1.23 per share on the common stock, up 39% from C$120 million, or 86c per share, in the same period a year ago. Sales increased 37% to C$10,409 million ($8,662 million). MBN /

Table of Contents for the Digital Edition of Milling & Baking News - May 26, 2015

Milling & Baking News - May 26, 2015
Ingredient Update - Winds of change blow through ingredient fundamentals
Stay true to the science, grains group tells guidelines committee
Late News - Campbell baking and snacking unit strong
Table of Contents
News Comment - Asia trade pact crucially important to farm sector
Editorial - Flour output data point to eating trends
Late News
Business - ConAgra Foods to close Wisconsin cookie plant
Mondelez considering changes at Chicago bakery
ADM to acquire Chinese sweetener business
Ardent Mills showcases capabilities with bakery, kitchen on wheels
General Mills wants more from the core of its business
Kellogg’s Bryant: Signs show that cereal trends are improving
Financial Results - Investments a drag on Weston Foods first-quarter income
Post Holdings embraces move to value-oriented R.-T.-E. cereal
Post consolidating cereal businesses
News Feature - Baking mix brand conquers challenges in gluten-free innovation
Exports and Trade Issues - Growth in China’s imports of U.S. agricultural goods slows…for now
People - Former Darden executive to president of Panera Bread
Steve Cooper joins Schwebel Baking as chief operating officer
William Fife, longtime A.S.B. and B.C.C. member, dies
IFIC survey again finds people seek whole grains, fiber
Washington - The unsettled G.M.O. world
Weather Outlook - U.S. Plains rain puts end to multi-year drought
Guidelines timeline
Education and Research - Global warming seen causing wheat yield declines
Supplier Innovations
Ingredient Market Trends - Winter wheat harvest under way
Ingredient Week
Marketplace Business Network
Ad Index

Milling & Baking News - May 26, 2015