CHICAGO (Feb. 22, 2006) – At the Consumer Analyst Group of New York’s (CAGNY) annual conference today, Brenda C. Barnes, chairman and chief executive officer of Sara Lee Corporation (NYSE: SLE), and L.M. (Theo) de Kool, executive vice president and chief financial and administrative officer, reviewed the progress of the company’s transformation, which was announced one year ago.
With the first year of the transformation complete, Barnes highlighted the milestones reached on the company’s three pillars: organizing business operations around consumers, customers and geographic markets; achieving operational efficiency to fund growth; and focusing the portfolio.
“Just one year into implementing our plan, we are much closer to our goal of transforming Sara Lee into a world-class integrated operating company and we are confident that we have the right plan and the right people in place to get the job done,” said Barnes. “We are pleased with the tremendous progress we have made in the first year, especially organizing our company to be closer to our consumers and customers as well as taking the necessary portfolio actions, including divesting the direct selling, U.S. retail coffee and European branded apparel businesses, to better focus our company.”
Barnes underscored that Sara Lee is committed to growing the company’s sales by creating innovative, new products, such as Sara Lee Soft & Smooth whole-grain white bread, Jimmy Dean Skillets, Ambi Pur 3volution and Senseo cappuccino.
“As we move forward with the transformation, we will increase our focus on improving operational efficiency that will drive cost savings – an area where we already are making great strides – and more effective execution across our business,” added Barnes.
During his remarks, de Kool reported that the company anticipates sales growing at a compound annual rate of between 4 percent and 5 percent by fiscal 2010, which is when the company expects to complete the transformation. In addition, he said Sara Lee expects a 12 percent operating margin by fiscal 2010, driven by margin growth in all of the company’s business segments, especially North American retail meats, North American retail bakery and international bakery. De Kool added that the company generated $573 million in after-tax proceeds from business dispositions in the second quarter of fiscal 2006, ending Dec. 31, 2005.
“In addition to improving our operating results, we remain committed to returning value to Sara Lee shareholders by paying a healthy dividend, repurchasing shares and reducing debt,” said de Kool. “During the implementation of our transformation plan, we are confident that the company will generate the cash needed to support these commitments.”