General Mills announced earnings today for the fourth quarter and for fiscal 2012, as well as plans and guidance for fiscal 2013.
“In fiscal 2012, we took strategic actions that increased our worldwide sales base and strengthened our portfolio,” said General Mills Chairman & CEO Ken Powell. “We sustained a high level of new product activity worldwide, and we made several acquisitions that expand our participation in fast-growing food categories.”
For fiscal 2013, General Mills has a strong line-up of new product innovation, and will focus on growing its business in both developed and emerging markets around the world. (Ken talks about our commitment to innovation, in this video interview.)
Ken said the company expects fiscal 2013 to be another year of good growth for General Mills, reflecting sales and profit increases from our base business along with contributions from newly acquired operations.
General Mills has announced six acquisitions over the past 18 months, by far the company’s most active period since the Pillsbury acquisition in 2001.
• Pasta Master, a producer of chilled Italian meals, pasta and sauces based in Australia.
• Mountain High, an all-natural yogurt in the U.S.
• Food Should Taste Good, a producer of all-natural snacks in the U.S.
• Parampara’s branded range of ready-to-cook spice and sauce mixes produced in India.
• A controlling interest (51 percent) in Yoplait International.
• And an agreement to purchase Yoki, a producer in several growing food categories in Brazil, including snacks (popcorn and snack nuts), convenient meals (side dishes, dry soups), basic foods (grains and beans), and seasonings. We expect this acquisition to close during the first half of this year.
These acquisitions will play a key role in General Mills’ continuing growth moving forward.
Ken talks about that, in this video interview.
As we outlined today during our investor call, we plan to accelerate growth in our existing businesses, but acquisitions remain part of General Mills’ growth plans.
“Our primary focus areas, with regard to acquisitions, are emerging markets and health and wellness,” said Don Mulligan, chief financial officer. “Economic and demographic trends clearly highlight the opportunity in emerging markets, with tens of millions of people joining the middle class in such markets each year. Globally, consumers also continue to look for foods that offer better health credentials, such as yogurt and better-for-you snacking. On-trend products with strong health credentials are a great fit for General Mills.”
General Mills’ International businesses posted strong growth in FY2012. While General Mills has greatly expanded and strengthened our international businesses over the past decade, Don sees acquisitions as an important tool to expand our presence. At the same time, the company continues to research exciting U.S. opportunities as well, like Food Should Taste Good.
Acquisitions can be geographically-focused, like General Mills’ recent announcement of plans to acquire Yoki in Brazil – which significantly increases our presence in that important market, or platform-focused, like Yoplait SAS – which expands our leadership in the attractive, rapidly growing fresh dairy category.
“Food Should Taste Good is a terrific example of expanding our play in the better-for-you snacking space, a rapidly growing segment for health seekers,” said Don. Acquisitions can help accelerate these efforts, he explained, with examples such as Mountain High yogurt and Lärabar already contributing to the company’s sales and earnings growth.