General Mills, Inc. · NYSE:GIS
General Mills — Investor Day (July 2017)
75 slides from General Mills's investor day presentation, Jul 12, 2017
Slide 1: General Mills Investor Day
GENERAL MILLS I N V E S TO R DAY July 12, 2017
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, Chief Executive Officer
Jeff Harmening Chief Executive Officer
Slide 4: General Mills' Next Chapter Remains Grounded on the Consumer
General Mills’ Next Chapter Remains Grounded on the Consumer OUR PURPOSE We serve the world by making food people love OUR GOAL Create market-leading growth to deliver top-tier shareholder returns OUR STRATEGY Consumer First = Deeply understand the needs and lives of our consumers and respond quickl
Slide 5: Consumer Food Trends are Changing
Consumer Food Trends are Changing SNACKING TASTE, CONVENIENCE, WELLNESS & VALUE “To me, health and wellness means…” 65% 64% 62% Feeling good Being physically Leading a about myself fit balanced lifestyle Source: Mintel Snacking Motivations & Attitudes, March 2017 Source: The Hartman Group, Health +
Slide 6: Consumer Demographics are Changing
Consumer Demographics are Changing SMALLER HOUSEHOLDS EMERGING MIDDLE CLASS TECHNOLOGY % of 1 & 2 Person Projected GDP Rankings Mobile Broadband U.S. Households Subscriptions by Region (billions) 62% 57% 2010 2020 46% 1 U.S. China 2 China U.S. 3 Japan India 4 India Japan 5 Germany Russia 1970 1995 2
Slide 7: E-commerce is Changing the Global Channel Landscape
E-commerce is Changing the Global Channel Landscape E-COMMERCE F&B RETAIL SALES CUSTOMERS U.K. $5 Billion France South Korea $3 Billion $2 Billion United States $3 Billion Japan China $3 Billion $13 Billion Source: Kantar 2016 7
Slide 8: Prioritizing Five Global Growth Platforms
Prioritizing Five Global Growth Platforms 2016 PROJECTED GLOBAL CATEGORY RETAIL SALES 5-YR. CGR RTE Cereal $23 Billion +LSD Ice Cream $64 Billion +MSD Yogurt $84 Billion +HSD Convenient Meals $89 Billion +MSD Sweet & Savory Snacks $295 Billion +MSD Source: Euromonitor, Calendar 2016 8
Slide 9: Our Portfolio Segmentation
Our Portfolio Segmentation F17 NET SALES = $15.6 BILLION Growth Foundation North America Retail North America Retail Cereal Progresso Soup Snack Bars Pillsbury Refrigerated Dough Natural & Organic Betty Crocker Desserts Totino’s Others Old El Paso Yogurt 75% 25% Convenience Stores & Foodservice Conv
Slide 10: What's Different at General Mills
What’s Different at General Mills • New Global Organization Structure • New Leadership Team • Global Prioritization of our Biggest Growth Platforms • Increased Innovation and Brand Investment • More Stability = Improved Execution 10
Slide 11: A Talented and Diverse Leadership Team
A Talented and Diverse Leadership Team Jon Nudi Shawn O’Grady Bethany Quam Christina Law Olivier Faujour Ivan Pollard SVP; Group Group President, SVP; Group President, SVP; Group President, VP; President, SVP; Chief President, North Convenience Stores & Europe & Australia Asia & Latin America Dairy
Slide 12: Fiscal 2018 Growth Priorities
Fiscal 2018 Growth Priorities • Grow Cereal Globally (Including CPW) • Improve U.S. Yogurt Through Innovation • Invest in Differential Growth Opportunities − Häagen-Dazs − Snack Bars − Old El Paso − Natural & Organic • Manage Foundation Brands with Appropriate Investment 12
Slide 13: 1. Grow Cereal Globally
1. Grow Cereal Globally RTE Cereal Category Global Sales $23B 3-Yr. Projected Growth CGR +LSD • General Mills/CPW − #2 Global Market Share − 3 of Top 5 U.S. Cereal Brands − Strong Positions in Emerging Markets Source: Euromonitor, Nielsen and company estimates. 2016 Retail Sales and 2017-2020 Growth
Slide 14: 2. Improve U.S. Yogurt Through Innovation
2. Improve U.S. Yogurt Through Innovation • Innovation is Critical to U.S. Yogurt Category Development • F18 Focus: − Fundamental Innovation in New and Emerging Segments − Renovation on Core Lines 14
Slide 15: 3. Invest in Differential Growth Opportunities
3. Invest in Differential Growth Opportunities HÄAGEN-DAZS NATURAL & SNACK BARS OLD EL PASO ORGANIC 15
Slide 16: Häagen-Dazs is a Global Growth Opportunity
Häagen-Dazs is a Global Growth Opportunity Ice Cream Category Sales Outside North America $49B 3-Yr. Projected Growth CGR +MSD • Häagen-Dazs − A Leading Super-premium Ice Cream Brand − Strong Positions in Emerging Markets Source: Euromonitor, Nielsen and company estimates. 2016 Retail Sales and 2017
Slide 17: Snack Bars are a Global Growth Opportunity
Snack Bars are a Global Growth Opportunity Snack Bars Category Global Sales $7B 3-Yr. Projected Growth CGR +LSD • General Mills − Leading Global Brands − Strong Innovation Capabilities Source: Euromonitor, Nielsen and company estimates. 2016 Retail Sales and 2017-2020 Growth Projections. 17
Slide 18: Old El Paso is a Global Growth Opportunity
Old El Paso is a Global Growth Opportunity Mexican Foods Category Global Sales $3.5B 3-Yr. Projected Growth CGR +LSD • Old El Paso − #1 Global Mexican Foods Brand − Over 50% of Net Sales Outside of U.S. Source: Euromonitor, Nielsen and company estimates. 2016 Retail Sales and 2017-2020 Growth Projec
Slide 19: Natural & Organic is a Global Growth Opportunity
Natural & Organic is a Global Growth Opportunity Natural & Organic Food Industry North America Sales $41B 3-Yr. Projected Growth CGR +DD • General Mills − A Leading N&O Food Manufacturer − Broad Portfolio of 9 Brands − 17-Year History Operating in U.S. N&O Industry Source: SPINS and company estimate
Slide 20: 4. Manage Foundation Brands with Appropriate Investment
4. Manage Foundation Brands with Appropriate Investment HELPER REFRIGERATED DOUGH SOUP BAKING MIXES OWNED WEB PROPERTIES 20
Slide 21: Our Fiscal 2018 Targets
Our Fiscal 2018 Targets F17 BASE F18 GROWTH $15.6 Billion Net Sales -1% to -2%¹ $3.0 Billion Total Segment Flat to +1%² Operating Profit* 18.1% Adjusted Operating Higher Profit Margin* $3.08 Adjusted Diluted EPS* +1 to +2%² *Non-GAAP measure. See appendix for reconciliation. (1) Organic growth rate.
Slide 22: Today's Agenda
Today’s Agenda Opening Remarks Jeff Harmening North America Retail Plans Jon Nudi Convenience Stores & Foodservice Plans and E-commerce Capability Review Shawn O’Grady Q&A Discussion Europe & Australia Plans Bethany Quam Asia & Latin America Plans Christina Law JV Plans and Financial Summary Don Mul
Slide 23: Jon Nudi
Jon Nudi SVP; Group President, North America Retail
Slide 24: North America Retail Segment
North America Retail Segment F17 NET SALES BY OPERATING UNIT F17 NET SALES: $10.2 BILLION U.S. Yogurt Canada $0.9B & Other $1.1B F17 SEGMENT OPERATING PROFIT: $2.3 BILLION U.S. Meals U.S. Snacks & Baking $2.1B $3.9B U.S. Cereal $2.3B 24
Slide 25: U.S. Food and Beverage Categories Challenging
U.S. Food and Beverage Categories Challenging U.S. FOOD AND BEVERAGE RETAIL SALES GROWTH 2.2% 1.2% 0.2% -0.6% F16 - 1H F16 - 2H F17 - 1H F17 - 2H Units: +0.1% Flat Flat -1.3% Price: +2.1% +1.2% +0.2% +0.7% Source: Nielsen XAOC 25
Slide 26: North America Retail Fiscal 2018 Priorities
North America Retail Fiscal 2018 Priorities • Improve U.S. Cereal • Reshape U.S. Yogurt Portfolio • Differentially Grow Snack Bars, Hot Snacks and Mexican Foods • Drive Sustainable Profit Growth on Key Foundation Brands • Expand Our Natural & Organic Portfolio 26
Slide 27: General Mills Cereal Growth Drivers
General Mills Cereal Growth Drivers • Wellness News • Taste News and Innovation • Strong Consumer Support on Key Brands 27
Slide 28: Investing Behind Wellness News
Investing Behind Wellness News BIG G PORTFOLIO CAMPAIGN CHEERIOS “Ownable” Wellness News: Celebrating Cheerios’ Whole Grain, Gluten Free, Fiber Ingredients, Health Benefits, and Causes 28
Slide 29: Bringing Taste News to More Core Brands
Bringing Taste News to More Core Brands TOAST CRUNCH FRANCHISE LUCKY CHARMS CHEX REESE’S PUFFS 29
Slide 30: Increased Support on Core Cereal Brands
Increased Support on Core Cereal Brands 30
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Slide 32: Fundamental Innovation Drives U.S. Yogurt Growth
Fundamental Innovation Drives U.S. Yogurt Growth U.S. YOGURT CATEGORY RETAIL SALES ($ In Millions) • Innovation is Key to U.S. Yogurt Development • New Segments Drive Greek Growth Adult Health • We’re Focused on Kid Light Developing Fundamental Blended Innovation F92 F17 Source: Nielsen U.S. Food 32
Slide 33: Reshaping Our U.S. Yogurt Portfolio
Reshaping Our U.S. Yogurt Portfolio STRENGTHEN CORE MANAGE DECLINES GROW EMERGING SEGMENTS 33
Slide 34: Increased Media Support on Yoplait Original
Strengthen Core: Increased Media Support on Yoplait Original 34
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Slide 36: Strengthen Core: Expanding Snacking Occasions
Strengthen Core: Expanding Snacking Occasions New in 1H F18 The Perfect Snack for the Whole Family 36
Slide 37: Strengthen Core: Go-GURT News
Strengthen Core: Go-GURT News EASIER-TO-OPEN TUBES STAR WARS MOVIE TIE-IN 37
Slide 38: Emerging Segments: Organic Yogurt
Emerging Segments: Organic Yogurt ELEVATE WHOLE MILK MESSAGING DRIVE TRIAL REPEAT PURCHASE SCORES 44% 32% Avg. New Yogurt Product Liberté Source: Nielsen F17 38
Slide 39: Emerging Segments: Oui by Yoplait
Emerging Segments: Oui by Yoplait • Made with Whole Milk and Non-GMO Ingredients • Thick Texture and Remarkable Taste • Cultured in the Glass Jar • In-store Sampling to Drive Trial 39
Slide 40: Grow Snack Bars: Nature Valley
Grow Snack Bars: Nature Valley NEW IN 1H F18 U.S. CANADA 40
Slide 41: Nature Valley
Nature Valley “BE A POWERFUL FORCE” 41
Slide 42: Improve Performance on Fiber One
Improve Performance on Fiber One PERMISSIBLE TREATS CONSUMER SUPPORT 42
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Slide 44: Driving Strong Lärabar Growth
Driving Strong Lärabar Growth LÄRABAR U.S. RETAIL SALES NEW IN 1H F18 ($ In Millions) CGR = +29% +41% F15 F16 F17 Source: Nielsen XAOC 44
Slide 45: Continuing Growth on Totino's
Continuing Growth on Totino’s F18 INNOVATION MEDIA SUPPORT 45
Slide 46: Continuing Growth on Old El Paso
Continuing Growth on Old El Paso U.S. RETAIL SALES GROWTH F18 INNOVATION ($ in Millions) CGR = +3% +4% F15 F16 F17 Source: Nielson XAOC 46
Slide 47: Investing in Key Foundation Brands
Investing in Key Foundation Brands • “In the Zone” on Merchandising in Key Season • Targeted News to Drive Consumer Interest 47
Slide 48: Expanding Our Natural & Organic Portfolio
Expanding Our Natural & Organic Portfolio GENERAL MILLS NORTH AMERICA NATURAL & ORGANIC NET SALES ($ in Millions) $1.5 +13% Billion $1,070 $950 F16 Pro Forma F17 F20 Goal Note: F16 pro forma includes 12 months of EPIC. 48
Slide 49: Distribution Opportunities for Natural & Organic Portfolio
Distribution Opportunities for Natural & Organic Portfolio U.S. AVERAGE % ACV PER ITEM 38% 37% 33% 32% 22% 20% 15% 14% Lärabar Annie's Cascadian Muir Glen Food Mountain Liberté Immaculate Farm Should High Baking Taste Good Source: Q4 F17 Nielsen Grocery + Supercenters 49
Slide 50: Natural & Organic Growth Drivers in Fiscal 2018
Natural & Organic Growth Drivers in Fiscal 2018 MEDIA SUPPORT AND INNOVATION INNOVATION 50
Slide 51: North America Retail Summary
North America Retail Summary • Improve Topline Trends Through: − Continued Growth on N&O, Old El Paso, Totino’s Hot Snacks and Canada − Innovation Driving U.S. Yogurt Improvement − Better Seasonal Results on Soup and Refrigerated Dough − Improved Innovation, Consumer Support on U.S. Cereal • F18 Goa
Slide 52: Shawn O'Grady
Shawn O’Grady Group President, Convenience Stores & Foodservice; SVP, Global Revenue Development
Slide 53: Convenience Stores & Foodservice
CONVENIENCE STORES & FOODSERVICE
Slide 54: Restaurants, Convenience Stores, Healthcare
Restaurants Convenience Stores Healthcare K–12 Schools Colleges & Universities 54
Slide 55: Advantaged Business Model
Convenience Stores & Foodservice Advantaged Business Model LEVERAGE INNOVATE CREATE DEMAND GMI INVESTMENT OPERATOR FIRST WITH DIRECT SALES 55
Slide 56: Business Transformation Journey
Convenience Stores & Foodservice Business Transformation Journey F07 F12 F17 SALES $1.8B $2.0B $1.9B PROFIT MARGIN 8% 14% 21% 56
Slide 57: Focus Six Platforms Driving Segment Performance
Focus Six Platforms Driving Segment Performance SHARE RANK Total Foodservice Cereal Yogurt Snacks Cereal #1 Yogurt #1 Biscuits #1 Frozen Baking Mixes #2-3 Meals Mixes Biscuits K-12 Frozen Meals #1 Convenience Stores Snacks #2 Sources: Total US NPD SupplyTrack®, Nielsen AOD Foodservice pound share 12
Slide 58: Focus Six Platform Net Sales
Focus Six Platform Net Sales ($ in Millions) CGR = +4% F12 F13 F14 F15 F16 F17 58
Slide 59: Platform Innovation
Platform Innovation CEREAL YOGURT SNACKS 59
Slide 60: Foodservice Innovation
Foodservice Innovation SCHOOL YEAR 2016/2017 FROZEN MEALS YOGURT Annual Meals Served (millions) 30 PREMIUM SANDWICH BREAD 15 Breakfast Lunch Source: USDA Child Nutrition Tables 2016 60
Slide 61: Convenience Stores Innovation
Convenience Stores Innovation FRONT OF HOUSE BACK OF HOUSE Leveraging Innovation & Brands from NAR Leveraging Foodservice Expertise 61
Slide 62: Channel Growth Opportunities
Channel Growth Opportunities HEALTHCARE LODGING COMMERCIAL 62
Slide 63: Today's Convenience Stores & Foodservice Summary
Today’s Convenience Stores & Foodservice Summary • Continued Growth on Focus Six Platforms with Operator First Innovation & Renovation • Channel Growth Opportunities • Flour Index Pricing a Modest Benefit in F18 • F18 Goals: − Organic Net Sales*: +1 to +2% − Segment Operating Profit Margin: Higher *
Slide 64: E-Commerce
E-COMMERCE
Slide 65: Global E-commerce Landscape
Global E-commerce Landscape PERCENTAGE OF FOOD & BEVERAGE ONLINE SALES U.K. 7% France South Korea United States 5% 17% 1.5% Japan China 7% 4% Source: Kantar 2016 65
Slide 66: Market Landscape
Market Landscape EUROPE ASIA U.S. Delivery Pure Play Drive Brick & Mortar 66
Slide 67: General Mills Brands Play in Spearfishing and Full Basket
General Mills Brands Play in Spearfishing and Full Basket SPEARFISHING FULL BASKET • Single Items • Selling all Categories • Hard to Find • Big Brands Overindex • 1 - 2 Day Delivery • Future Growth is Here 67
Slide 68: U.S. Landscape
U.S. Landscape CONSUMER RETAILERS MANUFACTURERS Average Size of Consumer Purchase In Store $40 Online $150 Source: Nielsen and Willard Bishop. 68
Slide 69: Winning the First Basket
Winning the First Basket E-COMMERCE PROJECTION (Share of General Mills U.S. Food Net Sales) • Lead the Digital Shelf 5% • Advantaged Shopper Influence • Comprehensive Retailer Partnerships 1.5% F17 F20 Goal 69
Slide 70: Lead the Digital Shelf
Lead the Digital Shelf IN STORE ONLINE 70
Slide 71: Advantaged Shopper Influence
Advantaged Shopper Influence IN STORE ONLINE 71
Slide 72: Advantaged Shopper Influence
Advantaged Shopper Influence IN STORE ONLINE 72
Slide 73: Comprehensive Retailer Partnerships
Comprehensive Retailer Partnerships MARKET MARKET SHARE LEAD THE LEADERS INDEX FUTURE GENERAL MILLS DOLLAR SHARE (Index, In-store = 100) 120 100 In-store Online Source: Click & Collect retailers POS data 73
Slide 74: Mission Critical Globally
Mission Critical Globally • First Basket Capabilities • Real Time Advanced Analytics • Agile Supply Chain & Logistics • Localized Deployment 74
Slide 75: E-commerce Summary
E-commerce Summary • Global Imperative • Mission Critical • Positioned to Win 75