Milling & Baking News - August 25, 2009 - 29

Financial Results



Cargill earnings fall 16% in '09; still
second-best year in company's history
MINNEAPOLIS - Cargill earned
$3,330 million during fiscal year 2009,
a decline of 16% from the $3,950 million in earnings the company posted
during fiscal 2008. Sales for the year
declined 3% to $116,600 million compared with the previous year.
"The year was a tale of two halves,"
said Greg Page, chairman and chief
executive officer. "Cargill posted record results through November. In the
second half, earnings slowed considerably as the world economy contracted
for the first time in six decades. In the
end, the net effect was the second-best
year in our company's history."
Mr. Page credited Cargill's profitability to four factors.
"The company went into the downturn with a strong balance sheet," he
said. "We acted early to reduce costs
and decrease the use of debt and operating working capital. Our trading
teams anticipated price volatility correctly in both the run-up and the run
down in commodity values. We kept
the focus on being a reliable supplier

to our customers - helping them meet
the challenges of these difficult economic times."
For the fiscal year, earnings in the
company's Origination and Processing
business unit were moderately below
last year's record high. The Food Ingredients and Applications segment's
results also were down moderately.
The Agriculture Services business
finished the year just under the yearago levels. The Risk Management and
Financial segment incurred a loss but its
energy businesses posted record results.
The Industrial Segment pulled ahead of
last year due to a strong first half.
During the fourth quarter Cargill
earned $327 million, a decline of 69%
when compared with the same period of fiscal 2008 when the company
earned $1,050 million.
Mr. Page said Cargill expects the effects of the decline in world economic
growth to persist for some time.
"The path to economic recovery
may well be uneven, but Cargill remains optimistic," he said. MBN

Kraft sees strength in U.S. Snacks
results for second quarter of 2009
NORTHFIELD, ILL. - Operating income of the U.S. Snacks business of Kraft
Foods Inc. in the second quarter ended
June 30 was $205 million, down 8% from
$222 million in the second quarter last
year. Sales were $1,288 million, up
1.3% from $1,272 million.
Accounting for the $17 million decline in operating income was a $40 million drop in
realized gains on certain commodity hedging activities, the
company said.
"Excluding these prior year
gains, operating income increased as lower overhead and
marketing costs, favorable volume/mix and higher price levels more
than offset higher input costs," Kraft said.
Both higher prices and improved
volume/mix accounted for the 1.3%
gain in revenues. Cookie sales were
up 5% in the second quarter from last
year, with strong performances by the
company's top five brands - Oreo,
Chips Ahoy!, Ritz, Wheat Thins and
Triscuit. Holding sales back were declines for nuts and bars.
Other grain-based foods brands at
Kraft performed well in the second
quarter. DiGiorno pizza grew 20% or
bakingbusiness.com / world-grain.com

more, and new products, such as DiGiorno crispy flatbread pizza and DiGiorno and California Pizza Kitchen
flatbread melts sandwiches, helped fuel
growth in U.S. Convenient Meals.
U.S. Grocery business was
bolstered by double-digit volume growth in Kraft macaroni
and cheese.
Net income of Kraft Foods
Inc. in the second quarter ended
June 30 was $829 million, equal
to 56c per share on the common
stock, up 27% from $747 million,
or 44c per share, in the second
quarter of 2008. Net sales were
$10,162 million, down 6%.
For the six months ended June 30,
Kraft net income was $1,491 million,
or $1.01 per share, up 11% from $1,348
million, or 80c per share. Sales were
$19,558 million, down 6%.
Revising the outlook for 2009 earnings per share, the company issued
guidance of at least $1.93, up from $1.88.
"The investments we've made over
the past three years are driving solid
business momentum in a challenging
economic environment," said Irene
Rosenfeld, chairman and chief executive officer. MBN

FRESH GOODS +
QUALITY INGREDIENTS
= LOYAL CUSTOMERS

U
F

�

ith baking hours from 6:00 a.m. to 2:00
W
p.m., Arremony's Quality Bakery products
are available warm and fresh throughout
the day. Owner Philip Arremony describes
the Jewett City, Connecticut business as an
"Old World" style bakery that has maintained
its popular product line since its founding in
1960.
Phil has taken Arremony's Quality Bakery
services beyond those of a retail bakery. He
offers catering services, and plans to develop a
mail-order operation. Why not? He already
ships baked goods to the west coast and
Florida to satisfy former Jewett City residents.
In fact, some Arremony customers travel as
far as 50 miles to pick up their favorite baked
goods. They place their orders in advance in
order to schedule visits around Arremony's
two week summer shut down. What generates
such enthusiasm? For starters, Babka bread,
sweetened with golden raisins, Whoopie pies
(a cream filling between two chewy chocolate
cookies), chocolate chip cookies and date or
apricot filled shortbread cookies.
Phil, who grew up in the business and learned
the trade from his father Philip F. Arremony,
took over in 1996. Phil's son Ian has followed
his father into the business.
In Phil's view, a major challenge facing bakers
today is the nutritional awareness of today's
customers. "Using good, pure ingredients is
essential," he said. "Because customers
expect consistency in my products." For consistent results, Phil relies on International®
Bakers Services to flavor all of Arremony's
baked goods. Phil is particularly fond of the
Vanilla Crystals he adds to his "wonderfully
delicious" donut glaze.
If you want consistent quality, turn to
International® Bakers Services. Contact
us toll-free at (800) 345-7175, by fax at
(574) 287-7161, or in writing at 1902 North
Sheridan Ave., South Bend, Indiana 46628.
We have the flavors your customers deserve.
Milling & Baking News August 25, 2009 / 29

http://www.bakingbusiness.com http://www.world-grain.com

Milling & Baking News - August 25, 2009

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