US: General Mills ups FY earnings target after "good" H1
- Ups FY adjusted EPS target
- H1 profits increase
- New Brazilian business helps boost sales
General Mills claimed "good" H1 performance
General Mills has lifted its forecast for underlying annual earnings after reporting a "good" performance in the first half of the US group's financial year.
The Green Giant and Old El Paso owner today (19 December) refreshed its guidance for adjusted EPS for its current fiscal year. It now forecasts adjusted EPS will be US$2.65-2.67, excluding mark-to-market effects, a tax benefit, as well as restructuring and integration costs. The company's previous forecast was $2.65.
General Mills reported a 28% increase in first-half net earnings to $1.09bn. Segment operating profit was 8% higher at $1.73bn.
The higher profits came on the back of improved sales. Revenues were boosted by contributions from General Mills' new Brazilian business Yoki and its Yoplait business in Canada, where the company has attained the sales and distribution rights to the yoghurt.
Sales grew 5% to $8.93bn, with volumes contributing eight points to the increase.
Shares in General Mills were down 0.86% at $41.41 at 12:49 ET.
Click here to read General Mill's views on the prospects for its US cereal and yoghurt businesses.
|General Mills Reports Fiscal 2013 Second Quarter Results|
Company Updates Full-year Outlook
MINNEAPOLIS--(BUSINESS WIRE)--Dec. 19, 2012-- General Mills (NYSE: GIS) today reported results for the second quarter of fiscal 2013. Contributions from new businesses primarily reflect the first three months of consolidated operating results for the Yoki Alimentos business in Brazil and Yoplait Canada.
Fiscal 2013 Second Quarter Financial Summary
Net sales for the 13 weeks ended Nov. 25, 2012, grew 6 percent to $4.88 billion. Pound volume contributed 7 points of net sales growth, primarily reflecting the addition of Yoki and Yoplait Canada. Price realization and mix reduced the net sales growth rate by 1 point. Foreign currency exchange had no impact on the rate of net sales growth in the quarter. Gross margin was above year ago levels. Total marketing spending in the quarter was weighted toward in-store promotional support for established brands and new product introductions; advertising and media expense was below strong year-ago levels. Total segment operating profit increased 10 percent to$959 million (Please see Note 8 for reconciliation of this non-GAAP measure). Second-quarter net earnings attributable to General Mills grew to $542 million and diluted earnings per share increased to 82 cents. Adjusted diluted EPS, which excludes certain items affecting comparability (see Note 8 below), grew 13 percent to 86 cents.
Chairman and Chief Executive Officer Ken Powell said the second-quarter results reflected good performance by each of the company’s operating segments. “Our U.S. Retail segment posted gains in pound volume, net sales and operating profit. The Bakeries and Foodservice segment generated strong double-digit operating profit growth. And our International segment recorded good sales and profit growth for established businesses in addition to the incremental contributions from Yoki and Yoplait Canada.”
Products making the strongest contributions to net sales growth in the second quarter included new items such as Yoplait Greek and Greek 100 calorie yogurts, Nature Valley protein bars, Peanut Butter Multigrain Cheerios, Progresso Recipe Starters sauces and, in the United Kingdom, Nature Valley Sweet and Nutty bars. Established brands such as Lucky Charms and Chex cereals, Fiber One 90 calorie snack bars, Totino’s frozen snacks,Pillsbury refrigerated crescent rolls and, in China, Haagen Dazs mooncakes and other ice cream products also contributed strong sales gains.
Six-month Financial Summary
U.S. Retail Segment Results
Through the first six months of 2013, U.S. retail segment net sales increased 1 percent to $5.48 billion and segment operating profits increased 4 percent to $1.30 billion.
International Segment Results
Through the first six months of 2013, International segment net sales grew 22 percent to $2.47 billion, and segment operating profit increased 24 percent to $265 million.
Bakeries and Foodservice Segment Results
Through the first six months of 2013, Bakeries and Foodservice segment net sales declined 2 percent to $987 million, and segment operating profits increased 18 percent to $164 million.
Joint Venture Summary
This year’s second-quarter results included $3 million of restructuring expense related to actions taken in the previous fiscal year. Net interest expense declined to $76 million in the second quarter, reflecting changes in debt mix. The effective tax rate was 32.6 percent, compared to 33.3 percent a year earlier. Excluding certain items affecting comparability, the second quarter effective tax rate was 32.8 percent in 2013 and 33.7 percent in 2012. (Please see Note 8 for reconciliation of this non-GAAP measure).
Cash Flow Items
“As we move into the second half, the global operating environment remains challenging,” Powell said. “We are working to build on our good performance year-to-date. We’re launching a promising slate of new products in our core U.S. market. And we have strong levels of advertising and in-store merchandising planned to support new and existing products in markets worldwide.”
General Mills increased its guidance for fiscal 2013 adjusted diluted EPS to a range of $2.65 to $2.67, excluding mark-to-market effects, a net tax benefit recorded in the first quarter, and restructuring and integration costs.
General Mills will hold a briefing for investors today, December 19, 2012, beginning at 8:30 a.m. Eastern time. You may access the web cast from General Mills’ internet home page: generalmills.com.
Adjusted diluted EPS, total segment operating profit, international sales excluding foreign currency translation effects, and adjusted effective tax rate are each non-GAAP measures. Reconciliations of these measures to their relevant GAAP measures appear in Note 8 to the attached Consolidated Financial Statements.
Original source: General Mills
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