General Mills, Inc. · NYSE:GIS
General Mills — Q2 2025 Earnings Presentation
48 slides from General Mills's earnings presentation, Dec 18, 2024
Slide 1: Fiscal 2025 Q2 Earnings
Fiscal 2025 Q2 Earnings December 18, 2024 General Mills Second-quarter Fiscal 2025 1
Slide 2: A Reminder on Forward-looking Statements
A Reminder on Forward-looking Statements This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are based on management’s current expectations and assumptions. These forward-looking statements are subject to certain risks
Slide 3: Jeff Harmening, Chairman and Chief Executive Officer
Jeff Harmening Chairman and Chief Executive Officer General Mills Second-quarter Fiscal 2025 3
Slide 4: Today's Key Messages
Today’s Key Messages • Drove Encouraging Improvement in Pound Volume and Market Share in First Half • Timing Benefits Amplified Growth in Q2; Expected to Reverse in Second Half • Revising F25 Guidance to Reflect Increased Investment to Drive Volume and Market Share Gains General Mills Second-quarter
Slide 5: Second-quarter and YTD Fiscal 2025 Performance
Second-quarter and YTD Fiscal 2025 Performance F25 Q2 F25 YTD Organic Net Sales¹ +1% Flat Adjusted Op. Profit² +7% +2% Adjusted Diluted EPS² +12% +6% Q2 includes a 1.5-point benefit to net sales and a 6-point benefit to adj. operating profit and adj. diluted EPS from timing-related items that are ex
Slide 6: Advancing Our Fiscal 2025 Priorities
Advancing Our Fiscal 2025 Priorities Accelerate Improve Competitiveness by 1 Organic Sales Delivering Remarkable Experiences Across Our Portfolio Generate HMM Cost Savings to Create Fuel 2 for Investment Offset Inflation and Accelerate Brand Investment Drive Strong Continue Robust Cash Conversion 3
Slide 7: Improving Market Share Performance Across the Enterprise
F25 Priority 1 Improving Market Share Performance Across the Enterprise with Pounds Improving Ahead of Retail Dollar Sales General Mills % Priority Business General Mills % Priority Business Holding or Growing Pound Share Holding or Growing Dollar Share 56% 38% 15% 16% F25 Q1 F25 Q2 F25 Q1 F25 Q2 •
Slide 8: Improved Competitiveness in North America Retail in Q2
F25 Priority 1 Improved Competitiveness in North America Retail in Q2 Broad-based Share Improvement % of Top 10 U.S. Retail Categories Holding or Growing Pound Share • Improved Pound and Dollar Share 58% 58% Trends in Q2 • Seven of Top Ten U.S. Categories Strengthened Retail Sales vs. Q1 11% F25 Q1
Slide 9: Improved Competitiveness Across N.A. Retail Leveraging the Remarkable Experience Framework
F25 Priority Improved Competitiveness Across N.A. Retail Leveraging the 1 Remarkable Experience Framework General Mills Second-quarter Fiscal 2025 9
Slide 10: Improving Value and Adding News to Strengthen Refrigerated Dough Performance
F24 Priority Improving Value and Adding News to Strengthen 1 Refrigerated Dough Performance Improving Expanding Accelerating Increasing Value Product News Cookie Momentum Brand Building $ Increasing Stepping Up Leveraging Increased Significantly Promotional Renovation News to Capacity and Innovation
Slide 11: Improved Competitiveness in North America Pet in Q2
F25 Priority 1 Improved Competitiveness in North America Pet in Q2 Pound Share vs. LY Building Momentum and Strengthening the Portfolio F24 Q3 F24 Q4 F25 Q1 F25 Q2 0.1 • Blue Buffalo Grew Pound Share and FLAT 0.0 Held Dollar Share in Q2 • Continued Strong Growth on Life -0.1 Protection Formula -0.2
Slide 12: North America Pet: Building Momentum and Strengthening the Portfolio
F25 Priority 1 North America Pet: Building Momentum and Strengthening the Portfolio General Mills Second-quarter Fiscal 2025 12
Slide 13: Continued Strong Competitiveness in North America Foodservice in Q2
F25 Priority Continued Strong Competitiveness in North America 1 Foodservice in Q2 Share Growth Across North America Foodservice Channels % of Priority Categories Holding or Growing Dollar Share • Category-leading Renovations on 71% Frozen Baked Goods • Driving K-12 Market 49% Growth with Nutritiona
Slide 14: Improved Competitiveness in International in Q2, though Headwinds in China
F25 Priority 1 Improved Competitiveness in International in Q2, though Continued Headwinds in China Improving Competitiveness Across International % of Priority Categories Holding or Growing Dollar Share • Net Sales Growth in Distributor Markets (accelerated vs. Q1) • Continued Positive Retail Sales
Slide 15: Create Fuel for Investment
F25 Priority 2 Create Fuel for Investment Maintaining Strong Adj. Op. Margin, Confidence in Delivering Ahead of Pre-pandemic Elevated HMM Savings in F25 Adj. Operating Profit Margin % General Mills HMM Cost Savings as % of COGS 6% 5% 16.9% Higher Long-term trend 4% 3% 3% F19 F25 Outlook F10 - F21 F2
Slide 16: Drive Strong Cash Generation
F25 Priority 3 Drive Strong Cash Generation Priorities Fiscal 2025 Plans CAPEX ~3.5% of Net Sales Dividend Growth 2% Dividend Increase as of Aug. 1, 2024 Near-term Focus on Executing Previously Announced Projects M&A Retain Flexibility for Bolt-on Acquisitions Share Repurchases ~3% Reduction to Aver
Slide 17: Updated Fiscal 2025 Financial Outlook
Updated Fiscal 2025 Financial Outlook Key Financial Metrics¹ Previous F25 Outlook Revised F25 Outlook Organic Net Sales Growth Flat to +1% Lower End of Range Adjusted Operating Profit Growth² -2% to Flat -4% to -2% Adjusted Diluted EPS Growth² -1 to +1% -3% to -1% Free Cash Flow Conversion 95%+ 95%+
Slide 18: Kofi Bruce, Chief Financial Officer
Kofi Bruce Chief Financial Officer General Mills Second-quarter Fiscal 2025 18
Slide 19: Second-quarter Fiscal 2025 Financial Results
Second-quarter Fiscal 2025 Financial Results Q2 Total General Mills $MM vs. LY Net Sales $5,240 +2% Organic Net Sales1 +1% Adjusted Operating Profit1 $1,064 +7%2 Adjusted Diluted EPS1 $1.40 +12%2 (1) Non-GAAP measures. See appendix for reconciliation (2) Growth rates in constant currency. Non-GAAP
Slide 20: Components of Second-quarter Net Sales Growth
Components of Second-quarter Net Sales Growth +1% Organic Net Sales1 +2 pts +2% Flat Flat -1 pt Organic Organic Foreign Acquisitions & Total Net Sales Volume Price / Mix Exchange Divestitures as Reported (1) Non-GAAP measure. General Mills Second-quarter Fiscal 2025 20
Slide 21: Second-quarter Fiscal 2025 North America Retail
Second-quarter Fiscal 2025 North America Retail North America Retail Q2 • Q2 organic net sales outpaced Nielsen-measured U.S. retail sales by ~2pts, due to an increase in retailer Organic Net Sales¹ +1% inventory (including later Thanksgiving timing) and Segment Op. Profit² Flat growth in non-measur
Slide 22: Second-quarter Fiscal 2025 North America Pet
Second-quarter Fiscal 2025 North America Pet North America Pet Q2 • Q2 organic net sales outpaced Nielsen-measured U.S. retail sales performance by ~4pts, reflecting a rebuild Organic Net Sales¹ +5% after retailer inventory reductions in Q2 of F23 and F24 Segment Op. Profit² +36% • Q2 net sales resu
Slide 23: Second-quarter Fiscal 2025 North America Foodservice
Second-quarter Fiscal 2025 North America Foodservice North America Foodservice Q2 • Q2 organic net sales driven by higher pound volume and positive price/mix Organic Net Sales¹ +8% Segment Op. Profit² +24% • Net sales driven by growth on breads, cereal, and frozen meals • Strong market share gains i
Slide 24: Second-quarter Fiscal 2025 International
Second-quarter Fiscal 2025 International International Q2 • Q2 net sales decline driven by China and Brazil, partially offset by growth in Distributor markets and Organic Net Sales¹ -3% Europe & Australia Segment Op. Profit² -45% • Share growth in Häagen-Dazs retail channels in Q2 • Q2 profit declin
Slide 25: Second-quarter Fiscal 2025 Joint Ventures
Second-quarter Fiscal 2025 Joint Ventures Q2 AFTER-TAX JV EARNINGS: $30MM, +23%¹ vs. LY Net Sales² Q2 • Q2 CPW net sales growth driven by Latin America, Cereal Partners Worldwide +2% partially offset by a decline in Europe Häagen-Dazs Japan +1% • Q2 HDJ net sales growth driven by handheld formats, p
Slide 26: Second-quarter Fiscal 2025 Margin Results
Second-quarter Fiscal 2025 Margin Results Adjusted Gross Margin1 Adjusted Operating Profit Margin1 (% of Net Sales) (% of Net Sales) 36.3% 20.3% 35.0% 19.3% Q2 F24 Q2 F25 Q2 F24 Q2 F25 • Q2 Adj. Gross Margin increase driven by HMM cost savings, partially offset by input cost inflation and unfavorabl
Slide 27: Second-quarter Fiscal 2025 Other Income Statement Items
Second-quarter Fiscal 2025 Other Income Statement Items • Adjusted Unallocated Corporate Expenses Decreased $23MM vs. LY • Net Interest Expense Increased $7MM vs. LY • Adjusted Effective Tax Rate 20.1%, -70bps vs. LY¹ • Average Diluted Shares Outstanding -4% vs. LY (1) Non-GAAP measure. See appendix
Slide 28: First-half Fiscal 2025 Financial Results
First-half Fiscal 2025 Financial Results 1H Total General Mills $MM vs. LY Net Sales $10,088 Flat Organic Net Sales1 Flat Adjusted Operating Profit1 $1,929 +2%2 Adjusted Diluted EPS1 $2.47 +6%2 (1) Non-GAAP measures. See appendix for reconciliation (2) Growth rates in constant currency. Non-GAAP me
Slide 29: First-half Fiscal 2025 Balance Sheet and Cash Flow
First-half Fiscal 2025 Balance Sheet and Cash Flow Operating Cash Flow ($ in Millions) Capital Investments $301MM $1,775 $1,496 Dividends Paid $676MM Net Share Repurchases F24 F25 $567MM General Mills Second-quarter Fiscal 2025 29
Slide 30: Updated Fiscal 2025 Key Assumptions
Updated Fiscal 2025 Key Assumptions • Incremental Promotional Investment to Deliver Improved Volume and Market Share • Annual HMM Cost Savings Now 5% of COGS • Annual Input Cost Inflation Now 4% of COGS • Expected Headwinds to Adj. Operating Profit in 2H: • Reversal of Q2 Timing Benefits (3pts) • In
Slide 31: Updated Fiscal 2025 Financial Outlook
Updated Fiscal 2025 Financial Outlook Key Financial Metrics¹ Previous F25 Outlook Revised F25 Outlook Organic Net Sales Growth Flat to +1% Lower End of Range Adjusted Operating Profit Growth² -2% to Flat -4% to -2% Adjusted Diluted EPS Growth² -1 to +1% -3% to -1% Free Cash Flow Conversion 95%+ 95%+
Slide 32: Today's Key Messages
Today’s Key Messages • Drove Encouraging Improvement in Pound Volume and Market Share in First Half • Timing Benefits Amplified Growth in Q2; Expected to Reverse in Second Half • Revising F25 Guidance to Reflect Increased Investment to Drive Volume and Market Share Gains General Mills Second-quarter
Slide 33: A Reminder on Non-GAAP Guidance
A Reminder on Non-GAAP Guidance Our fiscal 2025 outlook for organic net sales growth, constant-currency adjusted operating profit, adjusted diluted EPS, and free cash flow are non-GAAP financial measures that exclude, or have otherwise been adjusted for, items impacting comparability, including the
Slide 34: Appendix: Second-quarter Fiscal 2025 North America Retail Operating Unit Results
Appendix: Second-quarter Fiscal 2025 North America Retail Operating Unit Results Net Sales % vs. LY Operating Unit Q2 U.S. Morning Foods +4% U.S. Snacks +1% U.S. Meals & Baking Solutions -1% Canada -4% Canada Constant-currency¹ -4% (1) Net sales growth in constant currency. Non-GAAP measure. See app
Slide 35: Reconciliation of Q2 Fiscal 2025 Canada Constant-currency Net Sales Growth
Reconciliation of Second-quarter Fiscal 2025 Canada Operating Unit Constant-currency Net Sales Growth General Mills Second-quarter Fiscal 2025 35
Slide 36: Reconciliation of Second-quarter Fiscal 2025 Organic Net Sales Growth
Reconciliation of Second-quarter Fiscal 2025 Organic Net Sales Growth *Table may not foot due to rounding General Mills Second-quarter Fiscal 2025 36
Slide 37: Reconciliation of First-half Fiscal 2025 Organic Net Sales Growth
Reconciliation of First-half Fiscal 2025 Organic Net Sales Growth *Table may not foot due to rounding **See reconciliation of tax rate items for tax impact of individual items General Mills Second-quarter Fiscal 2025 37
Slide 38: Reconciliation of Q2 Adjusted Operating Profit Constant-currency Growth Rate
Reconciliation of Second-quarter Fiscal 2025 Adjusted Operating Profit Constant-currency Compound Growth Rate ($ in Millions) *Table may not foot due to rounding General Mills Second-quarter Fiscal 2025 38
Slide 39: Reconciliation of First-half Adjusted Operating Profit Constant-currency Growth
Reconciliation of First-half Fiscal 2025 Adjusted Operating Profit Constant-currency Growth Rate (Fiscal Years, $ in Millions) *Table may not foot due to rounding **See reconciliation of tax rate items for tax impact of individual items General Mills Second-quarter Fiscal 2025 39
Slide 40: Reconciliation of Q2 Adjusted Diluted EPS and Constant-currency Growth
Reconciliation of Second-quarter Fiscal 2025 Adjusted Diluted EPS and Related Constant-currency Growth Rates (Fiscal Years) *Table may not foot due to rounding **See reconciliation of tax rate items for tax impact of individual items General Mills Second-quarter Fiscal 2025 40
Slide 41: Reconciliation of First-half Adjusted Diluted EPS and Constant-currency Growth
Reconciliation of First-half Fiscal 2025 Adjusted Diluted EPS and Related Constant-currency Growth Rates (Fiscal Years) *Table may not foot due to rounding **See reconciliation of tax rate items for tax impact of individual items General Mills Second-quarter Fiscal 2025 41
Slide 42: Reconciliation of Fiscal 2019 Adjusted Operating Profit Margin
Reconciliation of Fiscal 2019 Adjusted Operating Profit Margin F19 Percentage of Net Sales Operating Profit as Reported 14.9% Mark-to-mark effects 0.2% Restructuring charges 0.5% Transaction and aquistion integration costs 0.1% Investment activity, net -0.1% Divestiture loss 0.2% Asset Impairment 1.
Slide 43: Reconciliation of Q2 Constant-currency Segment Operating Profit Growth
Reconciliation of Second-quarter Fiscal 2025 Constant-currency Segment Operating Profit Growth F25 Q2 Percentage Change in Impact of Foreign Percentage Change in Operating Operating Profit Currency Profit on Constant-Currency as Reported Exchange Basis North America Retail Flat Flat Flat Internation
Slide 44: Q2 Constant-currency After-tax Earnings from Joint Ventures Growth Rates
Second-quarter Fiscal 2025 Constant-currency After-tax Earnings from Joint Ventures Growth Rates *Table may not foot due to rounding General Mills Second-quarter Fiscal 2025 44
Slide 45: Reconciliation of Second-quarter Fiscal 2025 Adjusted Gross Margin
Reconciliation of Second-quarter Fiscal 2025 Adjusted Gross Margin Q2 F25 F24 Percent of Percent of Comparisons as a % of Net Sales Net Sales Net Sales Gross margin as reported (a) 36.9 % 34.4 % Restructuring charges - % 0.2 % Mark-to-market effects (0.6) % 0.5 % Project-related costs - % - % Adjust
Slide 46: Reconciliation of Q2 Adjusted Operating Profit Margin
Reconciliation of Second-quarter Fiscal 2025 Adjusted Operating Profit Margin ($ in Millions) *Table may not foot due to rounding General Mills Second-quarter Fiscal 2025 46
Slide 47: Reconciliation of Second-quarter Fiscal 2025 Adjusted Tax Rate
Reconciliation of Second-quarter Fiscal 2025 Adjusted Tax Rate ($ in Millions except Per Share Data) *Table may not foot due to rounding a) Earnings before income taxes and after-tax earnings from joint ventures General Mills Second-quarter Fiscal 2025 47
Slide 48: Reconciliation of First-half Fiscal 2025 Adjusted Tax Rate
Reconciliation of First-half Fiscal 2025 Adjusted Tax Rate ($ in Millions except Per Share Data) 1H F25 F24 In Millions Pretax Income Pretax Income (Except Per Share Data) Earnings (a) Taxes Earnings (a) Taxes As reported $ 1,688.9 $ 352.2 $ 1,544.1 $ 309.2 Transaction costs 8.9 2.0 0.6 - Restructur