Milling & Baking News Corporate Profiles - October 2011 - (Page 90)

Company Overview General Mills, Inc. Acquisition of Yoplait among fiscal 2011 highlights he return and rapid acceleration of cost inflation for various food ingredients and energy proved challenging for many food companies in 2011, but Minneapolis-based General Mills, Inc. was able to deliver 18% earnings growth during fiscal 2011, lifted by an increase in mark-tomarket valuation of certain commodity positions along with a net benefit from certain tax items. Full-year results also benefitted from a strong fourth quarter, in which higher sales helped to drive a 51% gain in earnings. Net income in the year ended May 29 totaled $1,798.3 million, equal to $2.80 per share on the common stock, up from $1,530.5 million, or $2.32 per share, in the same period a year ago. Net sales in the year rose 2% to $14,880.2 million from $14,635.6 million. “This past year represented a challenging operating environment for food manufacturers, as we experienced the return and rapid acceleration of cost inflation for various food ingredients and energy,” said Kendall Powell, chairman and chief executive officer. Despite a gain of 4% in the fourth quarter, operating profit within the company’s U.S. Retail segment fell 2% during fiscal 2011 to $2,347.9 million, bogged down by higher input costs. Net sales for the full year were down 0.4%, to $10,163.9 million. T Several events stood out as highlights for General Mills during fiscal 2011. First, in July the company completed its acquisition of Yoplait for approximately $1.2 billion. General Mills has licensed the Yoplait brand from Yoplait since 1977 and operates the Yoplait business in the United States. “The strength of the Yoplait brand, combined with our category knowledge and innovation capabilities, puts us in a position to be a leader in the global yogurt category,” said Chris O’Leary, executive vice-president and chief operating officer for international operations at General Mills. Then in September General Mills was recognized by the Grocery Manufacturers Association and its Associate Member Council with the 2011 C.P.G. Award for Innovation and Creativity. General Mills received its award for the development, launch and use of its oat hulls biomass burner. The biomass unit burns oat hulls left over from the milling process to produce about 90% of the steam needed to heat the plant and produce oat flour used in making Cheerios and other products. According to the G.M.A., the burner nearly eliminated the need for natural gas at the plant for steam and heat beginning in December 2010. Innovation also was center stage as part of the General Mills Worldwide Innovation Kendall Powell Network (G-WIN). General Mills said it attracted more than 1,000 registered innovators and more than 500 proposals during the web-based platform’s first year. Looking ahead to fiscal 2012, Mr. Powell said General Mills expects another year of good sales and earnings growth. “Our business plan assumes significantly higher costs for ingredients and energy — we’re estimating 2012 input cost inflation of 10% to 11%,” he said. “We expect our H.M.M. (holistic margin management) discipline of cost savings, mix management and price realization to largely — but not completely — offset this cost pressure. We believe the operating environment in many developed markets will remain challenging over the next 12 months.” CP F ast acts In July, General Mills completed its acquisition of Yoplait for approximately $1.2 billion. The company received an innovation award for the development, launch and use of its oat hulls biomass burner. Interest in G-WIN innovation platform continued to grow, with more than 1,000 registered innovators in the program’s ﬁrst year. 90 \ October 2011 Milling & Baking News • Food Business News • Baking & Snack • Meat & Poultry Corporate Proﬁles

Table of Contents for the Digital Edition of Milling & Baking News Corporate Profiles - October 2011

Milling & Baking News Corporate Profiles - October 2011