General Mills: achieves record-level results in 2010

Minneapolis / MN. (gm) General Mills Inc. reported strong results for the fourth quarter and full fiscal year ended May 30, 2010. On the last business day of the fiscal year, General Mills common stock split two for one. All per-share data in this release have been adjusted to reflect the stock split. Fiscal 2010 financial highlights:

• Fiscal 2010 included 52 weeks. The previous year included 53 weeks, with the extra week falling in the fourth quarter.
• Net sales for fiscal 2010 grew one percent.
• Segment operating profit rose eight percent.
• Diluted earnings per share (EPS) increased 18 percent to 2,24 USD.
• Excluding certain items affecting comparability, diluted earnings per share grew 16 percent to 2,30 USD, in line with the consensus of analyst estimates.

General Mills net sales in fiscal 2010 increased one percent to 14,8 billion USD. The contribution from volume (measured in pounds) matched prior-year levels, with the impact of one less week and the absence of divested product lines subtracting three points of growth. Price and mix contributed one point of net sales growth, and foreign currency translation had no meaningful impact on the net sales growth rate. Gross margin expanded to 39,7 percent; reflecting strong operating performance, effective cost-savings initiatives and supply-chain costs that were below prior-year levels. The company increased media expense by 24 percent in fiscal 2010. Including this investment, segment operating profit grew eight percent to 2,9 billion USD. Restructuring, impairment and other exit costs totalled 31 million USD pre-tax. Tax expense included a 35 million USD charge related to recent federal health care legislation. Net earnings grew 17 percent to 1,5 billion USD, including a net decline in mark-to-market valuation of certain commodity positions. Diluted earnings per share rose 18 percent to 2,24 USD. Earnings per share excluding mark-to-market effects and the tax charge related to health care reform would total 2,30 USD. This represents a 16 percent increase from 2009 earnings of 1,99 USD per share excluding items affecting comparability.

Chairman and Chief Executive Officer Ken Powell: «This was an exceptional year for our company. We achieved broad-based sales growth and expanded gross margin, which allowed us to invest at above-planned levels in media support and selling capabilities. And our 16 percent EPS increase significantly exceeded the high single-digit rate we target in our long-term growth model».

Bakeries + Foodservice Segment Results

Net sales for the Bakeries and Foodservice segment in fiscal 2010 totalled 1,8 billion USD. Pound volume subtracted eight points of net sales growth including the impact of divested product lines and one less week, which subtracted ten points of growth. Price and mix reduced net sales growth by six points, reflecting lower prices on certain commodity-indexed items. Segment operating profit increased 46 percent to 250 million USD. Successful efforts to emphasize higher-margin product lines and customer channels, lower supply chain costs, and productivity savings contributed to the strong earnings increase.

In the fourth quarter, Bakeries and Foodservice sales of 459 million USD were twelve percent below year-ago levels. Pound volume was down eight percent including the impact of divestitures and one less week, which subtracted twelve points of growth. Segment operating profit of 56 million USD was four percent below year-ago levels.

Info: General Mills achieves record-level results in fiscal 2010 – Company Sees Continuing Growth in Fiscal 2011 (complete press release).