2009 Media Releases

July 28, 2009

Deutsche Bank initiates coverage of Goodman Fielder Limited

Deutsche Bank has initiated coverage of food manufacturer Goodman Fielder Limited (ASX: GFF) with a Buy recommendation.

Research analyst Matthew Iser initiated coverage with an AUD1.65 twelve month price target.

Mr Iser said, “GFF is at the start of a positive earnings revision cycle with input cost tailwinds and a favourable retail price inflationary environment in which we expect GFF to grow its margins in the key baking division. With the combination of earnings upside and attractive valuation, we feel the perceived balance sheet issues have been overplayed by the market.”

According to Deutsche Bank research, the decline in wheat and transport costs coupled with the slowing growth rate of electricity and labour cost inputs should result in a 3-4% fall in bread loaf input costs and an EBIT margin enhancement in the baking division in 2H09 and FY10.

“In the medium term, we expect retailers and competition will force GFF to deal some margin enhancement from reduced wheat and transport costs back into price, marketing support or other terms. However we expect there will be a lag before this response occurs, so that overall, we see there is short term upside to estimates that is not built into the GFF share price.”

Goodman Fielder Limited is Australia’s largest listed food manufacturer with operations in Australia, New Zealand and the Asian pacific region. GFF’s key product categories include bread, spreads, milk and other dairy, salad dressings, pastry, cake mixes and commercial ingredients (oils and other raw materials).

For further information, please contact:

Michelle Chaperon (02) 8258 1311



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