Mike Brown Miles Fields Vernessa Hopkins Jian Xi

Team FiveSaint Joseph’s University Executive MBA

S a r a L e e Multi National Company Project

Project Proposal

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

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

45%

55%

2 0 0 9 S a l e s

International Buisness North American Business

Sara Lee Overview Continued

O u r V i s i o nTo 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 sAct with Integrity, Use Imagination, Be Inclusive, Work as a Team, and Have Passion to excel

Mission and Values

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

Financials continued

June, 2009 June, 2008 June, 2007 July, 2006 July, 2005$0

$5,000

$10,000

$15,000

$20,000

$25,000

$-

$5.00

$10.00

$15.00

$20.00

$25.00

Net Sales vs. Share Price

Net SalesShare Price

Nestle KRAFT FOODS

TYSON FOODS

General Mills

Kellogg Company

SARA LEE Hershey

103 B

45 B

28 B14 B

12 B 10 B5 B

Competitor Comparison

47%

20%

13%

7%

6% 5% 2%

Market Share

Nestle KRAFT FOODSTYSON FOODS General MillsKellogg Company

SARA LEE

Hershey

Competitive Analysis

87%

13%

International Bakery

Western Europe

Australia

Sara Lee International

78%

16%

6%

International Beverage

Western & Central Europe

Brazil

Asian Pacific

87%

13%

International Bakery

Western EuropeAustralia

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

•

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

DistributionThrough:• 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

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

Raw Materials Suppliers ManufacturingPlants

RetailChannels

• 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

Geographical Supply ChainBusiness 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%

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

Questions

Thank You