General Mills, Inc. · NYSE:GIS
General Mills — CAGNY 2021 Virtual Conference
44 slides from General Mills's conference presentation, Feb 16, 2021
Slide 1: General Mills CAGNY 2021
General Mills CAGNY 2021
Slide 2: A Reminder on Forward-Looking Statements
A R E M I N D E R O N F O R WA R D - L O O K I N G S TAT E M E N T S 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
Slide 3: Jeff Harmening, Chairman and CEO
JEFF HARMENING Chairman and CEO
Slide 4: Today's Key Messages
TO D AY ’ S K E Y M E S S A G E S B U I L D I N G on our sustained momentum E X E C U T I N G our Accelerate Strategy B U L L I S H on our prospects for generating profitable growth and superior shareholder returns CAGNY 2021 4
Slide 5: We've Been Winning
WE’VE BEEN WINNING Building Momentum Continued Strong Execution Pre-Pandemic Amid Pandemic 1H F21: Strengthened organic net 1 sales growth +8% Organic Net Sales Improved market share 2 Adjusted performance +13% Operating Profit Continued strong results 2 Adjusted on margins and cash +17% Diluted EPS
Slide 6: Our Accelerate Strategy
O U R A C C E L E R AT E S T R AT E G Y OUR PURPOSE Making Food the World Loves W H E R E T O P L AY Core Global Local Portfolio Markets Platforms Gems Reshaping HOW TO WIN Boldly Building Relentlessly Unleashing Being a Force Brands Innovating Our Scale for Good D R I V E L O N G - T E R M S H A R
Slide 7: Prioritizing 8 Core Markets
PRIORITIZING 8 CORE MARKETS WINNING IN NORTH AMERICA AS #1 PRIORITY WHERE TO P L AY HOW Core markets TO make up WIN 95% of total F20 Net Sales DRIVING VAL U E CAGNY 2021 7
Slide 8: Global Platforms
~45% G L O B A L P L AT F O R M S of F20 Net Sales INVE ASDT V IANNGT AI N G EADR EPAL S A TW FOI TRHM S W I T H WHERE HIGHESG TL OGBRAOLWGTRHO P WOTTHE PNOT ITAELN T I A L TO P L AY CEREAL PET ICE CREAM HOW TO WIN BARS MEXICAN DRIVING VAL U E CAGNY 2021 8
Slide 9: Local Gems
~35% LOCAL GEMS of F20 Net Sales AT T R A C T I V E L O C A L A N D WHERE REGIONAL GROWTH DRIVERS TO P L AY HOW TO WIN DRIVING VAL U E CAGNY 2021 9
Slide 10: Portfolio Reshaping
PORTFOLIO RESHAPING BUILDING ON OUR STRONG TRACK WHERE RECORD OF GROWTH-ENHANCING M&A TO P L AY Accretive Strategic Acquisitions Divestitures ✓ Growth accretive ✓ Targeting roughly 5% HOW of sales TO ✓ Bolt-on WIN ✓ Growth dilutive platforms with ✓ Present in our core markets lower ROI ✓ Existing or
Slide 11: Boldly Building Brands
B O L D LY B U I L D I N G B R A N D S MEETING CONSUMERS WHERE THEY ARE WITH WHERE PURPOSE-DRIVEN BRANDS TO P L AY HOW TO WIN DRIVING VAL U E CAGNY 2021 11
Slide 12: Relentlessly Innovating
R E L E N T L E S S LY I N N O VAT I N G C R E AT I N G N E W S O L U T I O N S T O R E A L C O N S U M E R P R O B L E M S WHERE TO P L AY Core Platform Internal Start-Up Accelerator Innovation HOW TO WIN 301 INC Investment Arm DRIVING VAL U E CAGNY 2021 12
Slide 13: Unleashing Our Scale
UNLEASHING OUR SCALE WHERE TO P L AY Enhancing Core Capabilities Across our Business HOW TO WIN Differentially Driving Holistic Margin Strategic Revenue Data & Analytics Management Management DRIVING VAL U E E-Commerce CAGNY 2021 13
Slide 14: Being a Force for Good
BEING A FORCE FOR GOOD WHERE TO P L AY Our Priorities Advancing Regenerating Improving Strengthening our inclusion among our PLANET FOOD security COMMUNITIES our PEOPLE HOW TO WIN CLIMATE COMMITMENTS By 2030: By 2050: Advance regenerative Reduce greenhouse Achieve net-zero agriculture on gas emissio
Slide 15: Accelerate Growth
A C C E L E R AT E G R O W T H WHERE TO P L AY Goal: Drive Top-Tier Shareholder Returns HOW TO WIN Sales Margin Cash Cash Growth Expansion Conversion Returns DR D RIIVVI INNGG VA V ALLUUEE CAGNY 2021 15
Slide 16: Ivan Pollard, Chief Marketing Officer
IVAN POLLARD Chief Marketing Officer
Slide 17: Our Beliefs About Brand Building
OUR BELIEFS ABOUT BRAND BUILDING Brands Big Ideas Execution Matter Count is Crucial CAGNY 2021 17
Slide 18: Our Playbook for Boldly Building Brands Is Evolving
O U R P L AY B O O K F O R B O L D LY B U I L D I N G B R A N D S I S E V O LV I N G Clear Brand Anatomies, Executing with a Built with Purpose New, Modern Playbook Connected Commerce Cultural Capital Compelling Creative Quantum Marketing Upskill marketers 3x the Speed Intelligent Investment Evoluti
Slide 19: The Size of Our Investment Is Increasing
THE SIZE OF OUR INVESTMENT IS INCREASING TOTAL MEDIA SPENDING +MSD +15% to +HSD YOY F19 F20 F21 Est. CAGNY 2021 19 $ in Millions
Slide 20: The Shape of Our Investment Is Evolving
THE SHAPE OF OUR I N V E S T M E N T I S E V O LV I N G FOLLOW THE CONSUMER AND USE THE BEST TOOL TO GET THE JOB DONE MIX OF MEDIA SPENDING Other Other TV TV Brand Digital Brand Digital E-Commerce E-Commerce F19 F21 Est. CAGNY 2021 20 Bars represent proportion of total media spend in each fiscal yea
Slide 21: The Creation of Connected Commerce: Box Tops for Education
T H E C R E AT I O N O F C O N N E C T E D C O M M E R C E : B O X TO P S F O R E D U C AT I O N ACTION IMPACT Digitized Box Tops Program PHYSICAL 2.7MM App Downloads >700MM Receipt Rows DIGITAL 81,000+ Schools CAGNY 2021 21
Slide 22: Leveraging Cultural Capital for Good: Wheaties
L E V E R A G I N G C U LT U R A L C A P I TA L F O R G O O D : W H E AT I E S ACTION IMPACT Featuring Influencers and their Causes +8% Retail Sales Growth #1 #6 Consumer Overall 1934 2019 2020 Goods Source: Wheaties Nielsen xAOC FYTD vs. LY through 1/2/21 CAGNY 2021 22 Source: Newsweek December 202
Slide 23: The Elevation of Compelling Creativity: Häagen-Dazs
T H E E L E VAT I O N O F C O M P E L L I N G C R E AT I V I T Y: H Ä A G E N - D A Z S ACTION IMPACT New Modern Campaign +DD Retail Sales Growth +0.3 pts Market Share Growth CAGNY 2021 23 Source: Häagen-Dazs Europe & Australia Nielsen/IRI June to August 2020 vs. LY
Slide 24: Kofi Bruce, Chief Financial Officer
KOFI BRUCE Chief Financial Officer
Slide 25: Accelerate Growth
A C C E L E R AT E G R O W T H Goal: Drive Top-Tier Shareholder Returns Sales Margin Cash Cash Growth Expansion Conversion Returns Organic Net Sales* Adj. Operating Profit* FCF Conversion* Cash Returns to +2 to +3% +MSD1 95%+ Shareholders ~80-90% Adj. Diluted EPS* +MSD to +HSD1 *Non-GAAP measures CA
Slide 26: Increasing Net Sales Growth Exposure With Portfolio Reshaping
INCREASING NET SALES GROWTH EXPOSURE WITH PORTFOLIO RESHAPING NET SALES GROWTH EXPOSURE +2 to +3% Existing Portfolio Portfolio Reshaping Impact Target Exposure CAGNY 2021 26
Slide 27: Margin Expansion to Support Adj. Operating Profit Growth
M A R G I N E X PA N S I O N TO S U P P O R T + M S D A D J . O P E R AT I N G P R O F I T G R O W T H Adj. Op. Profit Margin* Levers to (% of Net Sales) Expand Margins 17.3% 16.9% In Line 16.6% or Better HMM SRM F18 F19 F20 F21 Est. Data & Leveraging Analytics Global Scale CAGNY 2021 27 *Non-GAAP m
Slide 28: Excellent Cash Management Provides Balance Sheet Flexibility
EXCELLENT CASH MANAGEMENT PROVIDES BALANCE SHEET FLEXIBILITY (3-Year Rolling, $ in Billions) $8.0 $7.7 160% 150% $7.0 $6.0 $6.2 140% Delivering on $6.0 $5.7 130% Long-term FCF 127% 120% Conversion $5.0 110%Target ≥ 95% $4.0 108% 109% 100% 103% 90% $3.0 80% $2.0 70% F15-F17 F16-F18 F17-F19 F18-F20 Fr
Slide 29: Long-Term Capital Allocation Priorities
L O N G - T E R M C A P I TA L A L L O C AT I O N P R I O R I T I E S Achieved Target Leverage* Enables Execution on our of 3.0x in F21 Long-term Priorities 4.2x 3.9x • CAPEX ~4% of Net Sales 3.2x 2.9x • Grow Dividends with Earnings • Strategic M&A • Share Repurchases F18 F19 F20 Q2 F21 Pro Forma CA
Slide 30: Achieving Our Fiscal 2021 Priorities
ACHIEVING OUR FISCAL 2021 PRIORITIES Compete Effectively, 1 Compete Everywhere We Play Drive Efficiency to Fuel Fuel 2 Investments Investments in Brands and Capabilities Reduce Debt Leverage to 3 Reduce Increase Financial Flexibility CAGNY 2021 30
Slide 31: Reaffirming Second Half Fiscal 2021 Assumptions
REAFFIRMING SECOND HALF FISCAL 2021 ASSUMPTIONS Q3 GUIDANCE FULL-YEAR OUTLOOK • Organic Net Sales* Growth • Full-Year Adj. Operating Profit Roughly Similar to F21 Q2 Margin In Line or Better than F20 • Adj. Operating Profit Margin* In Line with Last Year CAGNY 2021 31 *Non-GAAP measures
Slide 32: Today's Key Messages
TO D AY ’ S K E Y M E S S A G E S B U I L D I N G on our sustained momentum E X E C U T I N G our Accelerate Strategy B U L L I S H on our prospects for generating profitable growth and superior shareholder returns CAGNY 2021 32
Slide 33: Our Accelerate Strategy
O U R A C C E L E R AT E S T R AT E G Y OUR PURPOSE Making Food the World Loves W H E R E T O P L AY Core Global Local Portfolio Markets Platforms Gems Reshaping HOW TO WIN Boldly Building Relentlessly Unleashing Being a Force Brands Innovating Our Scale for Good D R I V E L O N G - T E R M S H A R
Slide 34: General Mills CAGNY 2021
General Mills CAGNY 2021
Slide 35: A Reminder on Non-GAAP Guidance
A REMINDER ON NON-GAAP GUIDANCE Our outlook for organic net sales growth and adjusted operating profit margin are non-GAAP financial measures that exclude, or have otherwise been adjusted for, items impacting comparability, including the effect of foreign currency exchange rate fluctuations, acquisi
Slide 36: Reconciliation of Fiscal Organic Net Sales Growth
R E C O N C I L I AT I O N O F F I S C A L 2 0 2 1 O R G A N I C N E T S A L E S GROWTH (FISCAL YEAR) Organic Organic Organic Foreign Acquisitions Reported Net Volume Price/Mix Net Sales Exchange & Divestitures Sales Growth F21 Q2 4 pts 3 pts 7% - - 7% F21 1H 6 pts 3 pts 8% - - 8% CAGNY 2021 36 *Tab
Slide 37: Reconciliation of First Half Fiscal 2021 Adjusted Operating Profit Constant-Currency Growth Rate
R E C O N C I L I AT I O N O F F I R S T H A L F F I S C A L 2 0 2 1 A D J U S T E D O P E R AT I N G P R O F I T C O N S TA N T- C U R R E N C Y G R O W T H R AT E (FISCAL YEARS, $ IN MILLIONS) 1H 2021 2020 Change Operating profit as reported $ 1,770.3 $ 1,473.6 20 % Mark-to-market effects (62.3) (
Slide 38: Reconciliation of First Half Fiscal 2021 Adjusted Diluted EPS
R E C O N C I L I AT I O N O F F I R S T H A L F F I S C A L 2 0 2 1 A D J U S T E D D I L U T E D E P S A N D R E L AT E D C O N S TA N T - C U R R E N C Y G R O W T H R AT E S (FISCAL YEARS) 1H Per Share Data 2021 2020 Change Diluted earnings per share, as reported $ 2.14 $ 1.80 19 % Mark-to-marke
Slide 39: Reconciliation of Income Taxes on Adjusting Items
R E C O N C I L I AT I O N O F F I R S T H A L F F I S C A L 2 0 2 1 I N C O M E TA X E S O N A D J U S T I N G I T E M S (FISCAL YEARS, $ IN MILLIONS EXCEPT PER SHARE DATA) 1H 2021 2020 Pretax Income Pretax Income Earnings** Taxes Earnings** Taxes As reported $ 1,624.8 $ 360.2 $ 1,295.9 $ 222.7 Mar
Slide 40: Reconciliation of Adjusted Operating Profit Margin
R E C O N C I L I AT I O N O F A D J U S T E D O P E R AT I N G P R O F I T M A R G I N (FISCAL YEARS) Percent of Net Sales 2020 2020 2019 2018 Full-year Q3 Full-year Full-year Operating profit margin as reported 16.8 % 15.6 % 14.9 % 15.4 % Restructuring charges 0.3 0.3 0.5 0.5 Mark-to-market effect
Slide 41: Reconciliation of Free Cash Flow and Free Cash Flow Conversion
R E C O N C I L I AT I O N O F F R E E C A S H F L O W A N D F R E E C A S H FLOW CONVERSION (FISCAL YEARS, $ IN MILLIONS) Full-year 2020 2019 2018 2017 2016 2015 Net earnings, including earnings attributable to $2,211 $1,786 $2,163 $1,701 $1,737 $1,259 redeemable and noncontrolling interests Restru
Slide 42: Reconciliation of Net Debt-to-Adjusted EBITDA Ratio
R E C O N C I L I AT I O N O F N E T D E B T- T O - A D J U S T E D E B I T D A R AT I O Trailing 12 Months 2020 2019 2018** (FISCAL YEARS, $ IN MILLIONS) Ending 2021 Q2 Full-year Full-year Full-year Net earnings, including earnings attributable to redeemable and noncontrolling interests, as reporte
Slide 43: Reconciliation of Income Taxes on Adjusting Items
R E C O N C I L I AT I O N O F I N C O M E TA X E S O N A D J U S T I N G I T E M S (FISCAL YEARS, $ IN MILLIONS) Full-year 2020 2019 2018 2017 2016 2015 Pretax Income Pretax Income Pretax Income Pretax Income Pretax Income Pretax Income Earnings** Taxes Earnings** Taxes Earnings** Taxes Earnings**
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