General Mills, Inc. (GIS)

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The Company is a global manufacturer and marketer of branded, packaged, consumer foods and operates in the consumer foods industry. It also supplies branded and unbranded food products to the foodservice and commercial baking industries.

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Avatar NetscribeConsGds (92.25) Submitted: 1/16/07 1:56 AM : Start Price: $54.56 GIS Score: 53.68

General Mills is one of the largest producers of packaged consumer foods and derives 70% of its revenue from U.S. retail division, while International division and Bakeries and food services generate 15% each. The company’s product portfolio includes major brand names like Pillsbury, Cheerios, Green Giant, Yoplait, Old El Paso, Betty Crocker, Chex, Häagen-Dazs, and Wheaties.

Consumer foods market is highly competitive with Kellogg leading the market share followed by General Mills. The market is influenced by efficient cost management and product innovation. General Mills’s joint venture with companies like Nestle, Haagen-Dazs, Co-op de Pau, and 8th Continent should help the company to be in a better position to optimize its cost through supply chain efficiencies.

The company’s top-line saw a growth of 5.3% for Q2’07 backed by increased unit volume and better price realization. General Mills wants to further amplify its sales by capitalizing on opportunities in new channels and international markets. Gross margins improved despite higher input costs, reflecting favorable product mix and efficient productivity.

General Mills plans to introduce 80 new products for the remaining of the fiscal, which should boost company’s revenue growth. To support this revenue growth the company is increasing its investment in marketing activities. Additionally, the company’s focus on higher margin businesses coupled with productivity initiatives to eliminate non-value added product attributes and optimum global sourcing should supplement its gross margin expansion plan.

Combination of top-line growth through launch of new products, and margin expansion supported by productivity should drive a sustainable shareholder return.

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Avatar NetscribeConsGds (92.25) Submitted: 5/07/07 7:11 AM

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General Mills is one of the largest players in packaged consumer food industry, where innovation plays a crucial role to sustain in the fiercely competitive environment. The company has already taken steps to improve its innovation spree by launching Worldwide Innovation Network (WIN). This launch will help the company to seek out external business partners to develop new food products and technologies to complement its existing brands and businesses.

The company witnessed a top-line growth of 6% during third quarter of 2007 primarily led by 5% increase in unit volume and 2% gain on improved product mix. Its U.S. Retail operations were up 5%, driven by volume growth across all divisions except Big G Cereals. Increase in trade promotion for International segment has yielded rich dividend to the company with sales growth of 15%, thanks to factors like increased volumes, higher pricing and favorable product mix. Gross margin improved by 80 basis points despite higher input costs, reflecting favorable product mix, pricing and productivity.

General Mills in a move to provide a boost to its U.K. business has acquired Saxby Bros, a chilled pastry company, during the third quarter of 2007. Additionally, the company has also completed the acquisition of Greece for $3 million. The company believes that it would be able to capitalize on the initiatives taken by them and consequently raised their fiscal 2007 diluted EPS guidance from $3.09-$3.13 to $3.14-$3.16. General Mills is also working to maintain its market share in the space by increasing advertising. These initiatives taken by General Mills should help them to outwit the market in the coming fiscal.

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General Mills, Inc. (GIS)

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