Sara Lee 2013 Annual Report Download - page 4

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2The Hillshire Brands Company
SOLID FISCAL 2013 PERFORMANCE
We took on an enormous amount of change in our initial year
and we’ve made real progress on our business, our team and our
culture. Our results were solid, as our strong businesses became
stronger and our soft spots have begun to move in the right direc-
tion. Our adjusted net sales of $3,920 million were up 0.4 percent
versus scal 2012. We saw a substantial increase in protability,
with adjusted operating income up 12.5 percent versus the
prior year, and adjusted diluted earnings per share of $1.72, an
18.6 percent increase over scal 2012. Our increased protability
was driven by significant commodity deflation and one-time
SG&A favorability – mostly in the first half of the year. When
those unexpected tailwinds are accounted for, the year came in
squarely in line with our original expectations.
Importantly, our brand-building and innovation investments
unmistakably strengthened our core brands – Jimmy Dean,
Ball Park, Hillshire Farm, Aidells, State Fair, and Gallo. We were able
to jumpstart our innovation program, as we now have a rebuilt
pipeline and a much more disciplined process. Just as important,
the team demonstrated a keen recognition that they needed to
deliver their cost savings targets. Not only were they able to
deliver, they also identied new eciency opportunities.
DRIVING GROWTH BEHIND
BRAND-BUILDING AND INNOVATION
In the marketplace, our overall consumption trends improved
meaningfully in fiscal 2013. Jimmy Dean, Ball Park, Gallo and
Aidells were standout performers. Hillshire Farm and State Fair
need additional attention, and we plan to focus on improving
the performance of these brands in scal 2014.
A major driver of our improving trends has been our increase in
marketing spending (MAP) to support innovation and brand strength.
Historically, we have under-invested in MAP, at a rate of about
LETTER TO STOCKHOLDERS
Our rst year as e Hillshire Brands Company
was fast-paced and productive. Armed with
market-leading brands, a talented team and
renewed energy, Hillshire Brands advanced our
objective of unleashing the full potential of the
enterprise. Our approach has been, and continues
to be, anchored in brand-building, innovation
and cost eciency. I feel good about our progress
and ability to create value for our shareholders.
I am also mindful that one year does not make a
great company, and that we have much more to
do. Last year our team got a taste of success and
going into scal 2014, we are hungry for more.