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General Mills Reports Fiscal 2013 Second Quarter Results

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 SummaryThrough the first six months of fiscal 2013, General Mills sales grew 5 percent to $8.93 billion. Pound volume contributed 8 points of sales growth. Price realization and mix subtracted 2 points of net sales growth and foreign currency exchange reduced net sales growth by 1 point. Segment operating profit increased 8 percent to $1.73 billion. (Please see Note 8 for reconciliation of this non-GAAP measure.) Net earnings attributable to General Mills increased 28 percent to $1.09 billion and diluted EPS rose to $1.64, including a net increase in mark-to-market valuation of certain commodity positions. Adjusted diluted earnings per share totaled $1.52 in the first half of 2013, up 8 percent from $1.41 in last year’s first half (please see Note 8).

U.S. Retail Segment ResultsSecond-quarter net sales for General Mills U.S. Retail segment grew 2 percent to $2.98 billion, reflecting increased pound volume. The Snacks, Small Planet Foods and Meals divisions each recorded net sales gains and Frozen Foods net sales essentially matched prior-year levels. These results offset declines in net sales for the Yoplait, Big G, and Baking Products divisions. Advertising and media expense was 1 percent below strong year-ago levels that grew 6 percent. U.S. Retail segment operating profit rose 9 percent to $723 million.

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.

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