Your SlideShare is downloading. ×
Research presentation[1]
Research presentation[1]
Research presentation[1]
Research presentation[1]
Research presentation[1]
Research presentation[1]
Research presentation[1]
Research presentation[1]
Research presentation[1]
Research presentation[1]
Research presentation[1]
Research presentation[1]
Research presentation[1]
Research presentation[1]
Research presentation[1]
Research presentation[1]
Research presentation[1]
Research presentation[1]
Research presentation[1]
Research presentation[1]
Research presentation[1]
Research presentation[1]
Research presentation[1]
Upcoming SlideShare
Loading in...5
×

Thanks for flagging this SlideShare!

Oops! An error has occurred.

×
Saving this for later? Get the SlideShare app to save on your phone or tablet. Read anywhere, anytime – even offline.
Text the download link to your phone
Standard text messaging rates apply

Research presentation[1]

662

Published on

Published in: Business, Economy & Finance
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total Views
662
On Slideshare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
Downloads
11
Comments
0
Likes
0
Embeds 0
No embeds

Report content
Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
No notes for slide
  • Largest player in food and beverage industry in North America James Kraft- 1903 Public 1924 National Dairy Phillip Morris 2000 – Nabisco Holdings 2001 – NYSE Sectors $1 billion Over 50 brands exceed $100 million
  • 160 countries – including US, Canada, Europe, Latin America, Asia Pacific, Africa, and Middle East
  • PROFITABILITY Declining IncreaseASSET MANAGEMENT Turnover Ratios- Poor asset management Generating less sales per asset Periods-- Longer to collect- Hold inventory longer-- Overall poor – showed improvement in the last year
  • DEBT USAGE TDR: 2009 decrease  good sign. DER: more aggressive Risky – volatile earningsLIQUIDITY Good financial strength
  • Transcript

    • 1. Research Findings on
      General Mills, Inc.
      and
      Kraft Foods, Inc.
      VSB 1005 – Business Dynamics
      By Andrew Bieler, Kathryn Cassavell, Marcelo Mazzocato and Michelle Phillips
    • 2. General Mills, Inc. (GIS)
    • 3. CompanyDescription
      US Retail of packaged food (76%), International sales and food service: total revenue of nearly $16bi
      Second largest food company in the cereal sector; owner of the Cheerios brand
      First factory: Gold Medal Flour in Minneapolis, in the 1860s
      Incorporated in 1928
      66 production facilities, 40 in the US
      Headquartered in Minneapolis, MN
      33,000 employees
      www.generalmills.com
    • 4. Company Description (cont.)
      Several leading and well-known brands
      Green Giant, Cheerios, Pillsbury, Betty Crocker, HaagenDazs, Nature Valley, Yoplait
    • 5. General Mills In the News
    • 6. General Mills Mum on
      Reports of Yoplait Purchase
      • U.S. foods group General Mills declined to comment on Sunday on a British newspaper report that it was mulling a bid for French yogurt maker Yoplait following a contract dispute.
      • 7. The Sunday Times said in an unsourced report that the maker of Cheerios cereal could pay 1 billion pounds ($1.56 billion) for unlisted Yoplait, whose products it distributes in the United States.
    • General Mills Invests in New
      Production Facility
      • The Minneapolis based General Mills announced their new $100 million investment into expansion of its Murfreesboro production facility.
      • 8. “I’m very pleased to have one of the world’s most respected food companies growing and thriving in Tennessee,” said Governor Bredesen. “This expansion is not just an endorsement of Tennessee’s business climate, but in the quality and productivity of the workforce in Murfreesboro.”
    • GM Managing Director Takes
      New Role
      • The managing director of General Mills' operations in the UK, Ireland and the Nordic region, has been elected president of UK industry body the Food and Drink Federation (FDF).
      • 9. Jim Moseley has held his role with General Mills since 1999 and for the past four years has served as vice and deputy president of the FDF and chair of its Food Safety and Scientific Steering Group
       
    • 10. Financial Analysis
      1. Profitability: recovery in margins. Efficiency gains forced by input prices. Increase in net margin, ROA and ROE in the past five years.
      2. Asset Management: high asset turnover ratios associated with high efficiency. Drop in average collection period. Short but constant inventory period. Periods are expected of the packaged food industry.
    • 11. Financial Analysis (Cont.)
      3. Debt: high debt ratios but showing drops in the past years. Analysts say D/E is expected to fall significantly in the next five years. This trend shows the company’s high levels of debt are manageable.
      4. Liquidity: ratios show an upward trend but still lower than industry average.
    • 12. Kraft Foods, Inc. (KFT)
    • 13. Company Description
      • #1 US Food Company, #2 worldwide (Hoover’s)
      • 14. Food industry
      • 15. 1903- James L. Kraft opened cheese business – Chicago, IL
      • 16. Sectors: snacks, beverages, cheese, convenience meals, packaged grocery products
    • Company Description (cont.)
      • Headquarters: Northfield, IL
      • 17. Incorporated in 2000
      • 18. 97,000 Employees
      • 19. Sell products – 160 countries
      • 20. Operations in 70 countries
    • Kraft in the News
      Kraft’s Cookie, Cracker Sales Crumble in U.S.
      July 26, 2010
      • Rosenfeld predicted a 9% to 11% increase in EPS after Cadbury
      • 21. Cookie sales down 4.6%
      • 22. Cracker sales down 3.8%
      • 23. Lost 1% of Market Share
    • Kraft Gets Boost From CadburyAugust 5, 2010
      Profits up 13%
      Revenues up 25%
      Gross margin up 2.4%
      Earnings up 11%.
      Cadbury strong in foreign markets
      Asia & Latin America
    • 24. Kraft Pushes Cadbury in ChinaAugust 13, 2010
      “Ms. Rosenfeld said in an interview this week that Kraft is placing ‘disproportionate focus’ on Asia-Pacific, mainly because of the strength of the Indian and Chinese consumer markets, in which the company expects to see ‘explosive growth’ in the future.”
    • 25. Financial Analysis
      1. PROFITABILITY
      • Downward trend for past 5 years, increase in 2009
      • 26. Improvement
      2. ASSET MANAGEMENT
      • Turnover ratios: decreasing trend over past 5 years, slight increase in 2008
      • 27. Collection and inventory periods: increasing trend over the past 5 years, decrease in 2008
      • 28. Corresponding trends for 2008
    • Financial Analysis(cont.)
      3. Debt Usage
      • Total Debt Ratio: increased over past 5 years, decrease in 2009  used more leverage trend
      • 29. Debt-Equity Ratio: decreased over past 5 years, increase in 2009 (2009 risky)
      4. Liquidity
      • Current and Quick Ratios: decreasing trend, increasing trend for past 2 years
      • 30. Positive sign
    • Stock Price AnalysisKraft vs. S&P 500
      2 Conclusions
      1. Krafthadlowerreturnsthantheoverallmarket
      Avg. ROR
      Kraft= 1.22%
      S&P 500= 2.14%
      2. Kraftislessriskythantheoverallmarket
      Standard Deviation
      Kraft= 16.52%
      S&P 500= 22.44%
    • 31. Stock Price AnalysisGM vs. S&P 500
      2 Conclusions
      1. GM hadhigherreturnsthantheoverallmarket
      Avg. ROR
      GM= 6.33%
      S&P 500= 2.14%
      2. GM islessriskythantheoverallmarket
      Standard Deviation
      GMKraft= 10.17%
      S&P 500= 22.44%
    • 32. GM Stock vs. Kraft Stock
      Kraft’s stock has been more volatile compared to the General Mills Stock. Just two years ago, Kraft experienced a substantial negative return of -14.60% while General Mills experienced a positive return of 9.49%.
    • 33. Stock Price AnalysisKraft vs. GM (ROR)
    • 34. COMPARISON
      GM is fairly valued but has a consistent ROR history. Good long-term investment.
      Kraft has great prospects in the short term, as efficiency and market reach improve due to the acquisition of Cadbury. Company undervalued in the NYSE. Good investment, especially in the short run.

    ×