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Sara Lee Project Proposal 2
- 1. Mike Brown Miles Fields Vernessa Hopkins Jian Xi Team Five Saint Joseph’s University Executive MBA S a r a L e e Multi National Company Project Project Proposal
- 2. Sara Lee Corporation engages in the manufacture and marketing of a range of branded packaged meat products, fresh and frozen bakery products, roast and ground coffee, and tea products worldwide. Sara Lee Overview
- 3. Background Information • Founded: 1939 by Charlie Lubin • Interim CEO: Marcel Smits • Headquarters: Downers Grove, IL • Employees: 33,000 • Sector: Consumer Goods • Industry: Processed Packaged Goods 2009 Key Financial • Ticker: SLE • Stock Price: 9.58 • Revenue: 12.8B • Net Income: 364M Sara Lee Overview Continued
- 4. 45% 55% 2 0 0 9 S a l e s International Buisness North American Business Sara Lee Overview Continued
- 5. O u r V i s i o n To be the first choice of consumers and customers around the world by bringing together innovative ideas, continuous improvement and people who make things happen. O u r V a l u e s Act with Integrity, Use Imagination, Be Inclusive, Work as a Team, and Have Passion to excel Mission and Values
- 6. SARA LEE CORP SLE Jun-07 Jun-08 Jun-09 SIZE Net Sales ($ Millions) $12,278 $13,212 $12,881 Net Income ($ Millions) $426 -$41 $364 Total Assets ($ Millions) $12,190 $10,830 $9,417 Total Employees (000) 52.400 44.000 41.000 PROFITABILITY ANALYSIS Sales/Sales 100.0% 100.0% 100.0% COGS/Sales 57.8% 58.6% 59.8% Gross Profit 42.2% 41.4% 40.2% SG&A/Sales 31.9% 30.2% 29.2% DUPONT ANALYSIS Return on Sales (ROS) 3.5% -0.3% 2.8% Assets Turnover 1.01 1.22 1.37 Return on Assets (ROA) 3.5% -0.4% 3.9% DFL (Assets/Equity) 4.662 3.853 4.625 Return on Equity 16.3% -1.5% 17.9% LIQUIDITY RATIOS Current Ratio 1.312 1.163 1.346 Quick Ratio 1.068 0.845 0.985 TURNOVER RATIOS Inventory turnover 6.753 6.346 7.494 Days of inventory 53 days 57 days 48 days Account Receivables turnover 9.394 8.861 9.670 Days of receivables 38 days 41 days 37 days Sales/Net Property Plant & Eq 5.020 5.245 5.467 Assets turnover 1.007 1.220 1.368 DEBT RATIOS Debt to Assets 78.5% 74.0% 78.4% Debt to Equity 366.2% 285.3% 362.5% Interest Coverage (EBIT/int exp) 3.0 5.3 5.8 SLE 7-Jun 8-Jun 9-Jun 10-Jul Net Sales ($ Millions) $12,278 $13,212 $12,881 $10,793 Financials continued
- 7. Financials continued $- $5.00 $10.00 $15.00 $20.00 $25.00 $0 $5,000 $10,000 $15,000 $20,000 $25,000 June, 2009 June, 2008 June, 2007 July, 2006 July, 2005 Net Sales vs. Share Price Net Sales Share Price
- 8. Nestle KRAFT FOODS TYSON FOODS General Mills Kellogg Company SARA LEE Hershey 103 B 45 B 28 B 14 B 12 B 10 B 5 B Competitor Comparison 47% 20% 13% 7% 6% 5% 2% Market Share Nestle KRAFT FOODS TYSON FOODS Competitive Analysis
- 9. 87% 13% International Bakery Western Europe Australia Sara Lee International 78% 16% 6% International Beverage Western & Central Europe Brazil 87% 13% International Bakery Western Europe Australia
- 10. Innovation Supply Chain Marketing Customer Management Core Functional Capabilities Business Units North America Retail North America Fresh Bakery North America Foodservice International Bakery International Beverage
- 11. R&D •The Kitchens of Sara Lee •Adjacent to corporate headquarter •Supports North America Innovations on food services and retail business Supply Chain and Manufacturing •Make products where they are sold •Focus on efficiency, safety and sustainability Corporate Shared Services •Financial and Accounting •Human Resources •IT Support Distribution Through: •Retail stores •Restaurants, warehouses, hospitals and other large institutions •Retail Bakery offers direct store delivery system Marketing & Sales •63% of Total Revenue (approx. $6.8 billion) Functional Value Chain North America North America Fresh Bakery North America Fresh Bakery North America Foodservice
- 12. Outsourced Services (to IBM) •Financial and Accounting •Information Technology •Indirect Procurement Global Supply Chain and Manufacturing •Make products where they are sold •Focus on efficiency, safety and sustainability Global Shared Services •Human Resources Global Distribution •Distribute to retail stores, warehouses, and restaurants through direct delivery system Global Marketing & Sales •Generate approx. 37% of revenue ($4 Billion) •Spread over 200 countries R&D •The Kitchens of Sara Lee •Adjacent to corporate headquarter •Supports North America Innovations on food services and retail business Functional Value Chain International Business Units International Beverage • International Bakery
- 13. Raw Materials Suppliers Manufacturing Plants Retail Channels • Meats • Wheat flour • Sugar • Green coffee beans • Third party suppliers • Independent farmers • 230 facilities • Processing plants • Warehouses • Distribution centers • Supermarkets • Warehouse clubs • Restaurants • Institutions Geographical Supply Chain
- 14. Geographical Supply Chain Business Segment •2010 •2009 •2008 North American Retail •26.0% •25.3% •23.8% North American Bakery •19.7% •20.2% •18.4% North American Food Service •17.3% •19.2% •19.9% International Beverage •29.7% •28.0% •29.4% International Bakery •7.3% •7.3% •8.5%
- 15. Geographical Supply Chain United States 29 Australia 10 United Kingdom 15 Germany 15 Spain 10 Netherlands 41 France 14 Sara Lee Subsidiaries and Locations Worldwide • 224 Subsidiaries Worldwide • 44 Countries • HQ Downers Grove, IL
Editor's Notes
- Sara Lee operation includes 5 business segments North American Retail and International Bakery generates more than 50% of the organization’s profits over the last three years. North American Retail sells a variety of packaged meat and frozen bakery products to retail customers in North America. North American Fresh Bakery sells a wide variety of fresh bakery products and specialty items to retail and institutional customers in North America North American Foodservice sells a variety of meat, bakery and beverage products to foodservice customers in North America. International Beverage sells coffee and tea products in various markets around the world, including Europe, Australia and Brazil. International Bakery sells a variety of bakery and dough products to retail and foodservice customers in Europe (primarily Spain and France) and Australia.
- Sara Lee subsidiaries Total of 224 subsidiaries worldwide which are located in 44 countries. 60% of Sara Lee’s subsidiaries are locate in 6 countries United States Spain United Kingdom The Netherlands (41) Germany France Australia