General Mills, Inc. · NYSE:GIS
General Mills — 2022 CAGNY Virtual Conference
55 slides from General Mills's conference presentation, Feb 22, 2022
Slide 1: General Mills CAGNY 2022
y General Mills CAGNY 2022
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: Today's Key Messages
Executing Well and Advancing our Accelerate Strategy Today’s Key Reshaping our Portfolio and Messages Organization for Growth Better Geared for Profitable Growth and Strong Shareholder Returns SE CT I O N 1 : J EF F H A RMEN I NG : ACCE L E R AT E ST R AT E GY A N D R E S H A P I N G
Slide 4: Today's Agenda
Jeff Accelerate Strategy; Harmening Organization Reshaping Portfolio and Chairman and CEO Dana Advancing Our McNabb Strategic Priorities Chief Strategy & Growth Officer Today’s Agenda Kofi Bruce Shareholder Return Model and F22 Outlook Chief Financial Officer
Slide 5: Our Purpose, Where to Play, How to Win
Our Purpose Where to Play Core Markets Global Platforms Local Gems Portfolio Reshaping How to Win Boldly Building Relentlessly Unleashing our Scale Being a Force for Good Brands Innovating Driving Long-Term Shareholder Value Organic Net Sales* Adj. Operating Adj. Diluted EPS* Maintain Capital +2-3%
Slide 6: Prioritizing 8 Core Markets
PRO-FORMA F21 NET SALES* WHERE TO PLAY Prioritizing 8 Core Markets CORE MARKETS MAKE UP ~95% OF TOTAL F21 NET SALES *Pro-forma sales represent F21 reported net sales adjusted for portfolio reshaping activity, including the European Yogurt divestiture and the Pet Treat acquisition. SE CT I O N 1 : J
Slide 7: Global Platforms
Global Platforms Advantaged Platforms with Global Growth Potential Cereal Pet Ice Cream ~50% PRO-FORMA F21 NET SALES* Snack Bars Mexican Food *Pro-forma sales represent F21 reported net sales adjusted for portfolio reshaping activity, including the European Yogurt divestiture and the Pet Treat acqui
Slide 8: Local Gems
Local Gems Attractive Local and Regional Growth Drivers ~30% PRO-FORMA F21 NET SALES* *Pro-forma sales represent F21 reported net sales adjusted for portfolio reshaping activity, including the European Yogurt divestiture and the Pet Treat acquisition. SE CT I O N 1 : J EF F H A RMEN I NG : ACCE L E
Slide 9: How to Win
How to Win SE CT I O N 1 : J EF F H A RMEN I NG : ACCE L E R AT E ST R AT E GY A N D R E S H A P I N G
Slide 10: Portfolio Reshaping
Portfolio Reshaping Moved Aggressively to Reshape our Portfolio Turned over ~15% of our business since F18 Added 15% ~1 point of growth exposure since F18 SE CT I O N 1 : J EF F H A RMEN I NG : ACCE L E R AT E ST R AT E GY A N D R E S H A P I N G
Slide 11: Portfolio Reshaping: Growth-Enhancing M&A
Portfolio Reshaping Building on Our Strong Track Record of Growth-Enhancing M&A Divestitures Acquisitions SE CT I O N 1 : J EF F H A RMEN I NG : ACCE L E R AT E ST R AT E GY A N D R E S H A P I N G
Slide 12: Successfully Integrated Blue Buffalo
Successfully Integrated Blue Buffalo Since Acquisition: +10%1 +10MM 2 >1pt 3 +11%4 CGR CGR Net Sales Households Market Share Operating Profit 1 Blue Buffalo net sales, pro-forma Fiscal 2018 to LTM through Nov. 2021 2 NielsenIQ U.S. Homescan Panel, calendar 2017 to 2021 3 U.S. Market Share based on E
Slide 13: Remain Committed to Portfolio Reshaping
Remain Committed to Portfolio Reshaping Acquisition Criteria Divestiture Criteria Growth Accretive Growth-dilutive Platforms with Lower ROI Focused in Our Core Markets No Differentiated Competitive Advantage Existing or New Growth Platforms that Leverage Our Capabilities SE CT I O N 1 : J EF F H A R
Slide 14: Confident in Our Ability to Generate 2-3% Sales Growth
Confident in Our Ability to Generate 2-3% Sales Growth Net Sales +2 to +3% Growth = Exposure + F18 Portfolio Current Growth Exposure Reshaping Impact Growth Exposure SE CT I O N 1 : J EF F H A RMEN I NG : ACCE L E R AT E ST R AT E GY A N D R E S H A P I N G
Slide 15: Aligning Our Structure with Our Strategy
Aligning Our Structure with Our Strategy Old Segment Structure* New Segment Structure* Asia & Latin America International Europe & Australia Pet Pet North America North America Retail Retail Convenience North America (includes c-stores) Stores & Foodservice Foodservice *Pro-forma F21 Net Sales SE CT
Slide 16: Putting Accelerate into Motion
Putting Accelerate into Motion CT I O N 2 : DA N A MC N A BB : A DVA N CI N G O UR ST R AT E G I C P R I O R I T I E S SE CTI
Slide 17: Accelerated Business Momentum
General Mills Organic Net Sales Growth* Accelerated Business 4 to 5% 4% 4% Momentum F20 F21 F22 Target *Non-GAAP measure. See appendix for reconciliation. SE CTI CT I O N 2 : DA N A MC N A BB : A DVA N CI N G O UR ST R AT E G I C P R I O R I T I E S
Slide 18: Boldly Building Brands
Boldly Building Brands Connected to Execute Exceptional Driven by Data Consumer Culture Experiences CT I O N 2 : DA N A MC N A BB : A DVA N CI N G O UR ST R AT E G I C P R I O R I T I E S SE CTI
Slide 19: Heart Shaped O's
CONNECTED TO CONSUMER CULTURE Heart Shaped O’s SE CTI CT I O N 2 : DA N A MC N A BB : A DVA N CI N G O UR ST R AT E G I C P R I O R I T I E S
Slide 20: Loki Charms
CONNECTED TO CONSUMER CULTURE Loki Charms SE CTI CT I O N 2 : DA N A MC N A BB : A DVA N CI N G O UR ST R AT E G I C P R I O R I T I E S
Slide 21: Chloe Toast Crunch
CONNECTED TO CONSUMER CULTURE Chloe Toast Crunch SE CTI CT I O N 2 : DA N A MC N A BB : A DVA N CI N G O UR ST R AT E G I C P R I O R I T I E S
Slide 22: Remarkable Experience Framework
Remarkable Product Packaging Experience Framework $ Brand Love Omnichannel Value Availability SE CTI CT I O N 2 : DA N A MC N A BB : A DVA N CI N G O UR ST R AT E G I C P R I O R I T I E S
Slide 23: Execute Exceptional Experiences
EXECUTE EXCEPTIONAL EXPERIENCES SE CTI O N 2 : DA N A MC N A BB : A DVA N CI N G O UR ST R AT E G I C P R I O R I T I E S
Slide 24: Driven by Data
General Mills E-commerce Net Sales % 11% Driven by Data 4% E-commerce Net Sales More than Doubled YTD F19 YTD F22 SE CTI CT I O N 2 : DA N A MC N A BB : A DVA N CI N G O UR ST R AT E G I C P R I O R I T I E S
Slide 25: Developing 1:1 Relationships
Developing 1:1 Relationships Box Tops for Buddies by Häagen-Dazs Education Blue Buffalo Smart Shop CT I O N 2 : DA N A MC N A BB : A DVA N CI N G O UR ST R AT E G I C P R I O R I T I E S SE CTI
Slide 26: Connecting Our Platforms
Connecting Our Platforms CT I O N 2 : DA N A MC N A BB : A DVA N CI N G O UR ST R AT E G I C P R I O R I T I E S SE CTI
Slide 27: Driven by Data
DRIVEN BY DATA SE CTI CT I O N 2 : DA N A MC N A BB : A DVA N CI N G O UR ST R AT E G I C P R I O R I T I E S
Slide 28: Data-driven Marketing
Data-driven Marketing Dynamically Targeted Shoppable Optimize Ad Creative Messaging Media CT I O N 2 : DA N A MC N A BB : A DVA N CI N G O UR ST R AT E G I C P R I O R I T I E S SE CTI
Slide 29: Results on Pillsbury Refrigerated Dough
Results on Pillsbury Refrigerated Dough 4th >25% 1 ~5pts 2 +13% 2 Consecutive Year3 Retail Sales Household Penetration Buy Rate Market Share Gains 1 NielsenIQ xAOC 52 weeks ending 01/22/22 vs. 52wks ending 02/29/20. 2 NielsenIQ Total US All Outlet Panel 52 weeks ending 10/29/22 vs. 52wks ending 02/2
Slide 30: Relentlessly Innovating
Relentlessly Innovating Close In White Space Invest Acquire Core Platform Mergers & Innovation Acquisitions SE CT CTII O N 2 : DA N A MC N A BB : A DVA N CI N G O UR ST R AT E G I C P R I O R I T I E S
Slide 31: Leading Core Innovation
Leading Core Innovation SE CTI CT I O N 2 : DA N A MC N A BB : A DVA N CI N G O UR ST R AT E G I C P R I O R I T I E S
Slide 32: Blue Buffalo Innovation
Blue Buffalo Innovation Tastefuls Wet Cat Food Blue Buffalo Cat Wet Retail Sales1 % Chg vs. LY Launch 57% 42% 27% 25% 12% 13% 10% F21 Q1 F21 Q2 F21 Q3 F21 Q4 F22 Q1 F22 Q2 F22 Q3TD ¹GMI Custom Market including NielsenIQ xAOC plus select big box pet specialty retailers, FYTD ending 01/08/2022 . CT I
Slide 33: Disruptive Growth
Disruptive Growth SE CTI CT I O N 2 : DA N A MC N A BB : A DVA N CI N G O UR ST H OW WR E AT WEI LGLI CWPI N R I |OO RUR I T I EACC S E L E RATE STRATE GY
Slide 34: Unleashing Our Scale
Digital and Technology (D&T) Will Unlock Opportunities Across Our Business Unleashing Our Scale Marketing R&D $ Supply Sales HR Chain SE CTI CT I O N 2 : DA N A MC N A BB : A DVA N CI N G O UR ST R AT E G I C P R I O R I T I E S
Slide 35: Disruptive SRM Capability
Disruptive SRM Capability Growth General Mills Organic Price/Mix Data-driven Higher Faster Response 5% Greater Precision 2% F22 Q1 F22 Q2 F22 H2 SE CTI CT I O N 2 : DA N A MC N A BB : A DVA N CI N G O UR ST H OW WR E AT WEI LGLI CWPI N R I |OO RUR I T I EACC S E L E RATE STRATE GY
Slide 36: Being a Force For Good
Being a Force For Good Planet Food Security Communities People CT I O N 2 : DA N A MC N A BB : A DVA N CI N G O UR ST R AT E G I C P R I O R I T I E S SE CTI
Slide 37: Being a Force For Good: Recognition
Disruptive Being a Force Growth For Good External Recognition Internal Recognition General Mills Employee Engagement Scores 87% 83% 80% 75% F18 F19 F20 F21 SE CTI CT I O N 2 : DA N A MC N A BB : A DVA N CI N G O UR ST H OW WR E AT WEI LGLI CWPI N R I |OO RUR I T I EACC S E L E RATE STRATE GY
Slide 38: Drive Top-tier Shareholder Returns
Drive Top-tier Shareholder Returns Sales Growth Margin Expansion Cash Conversion Cash Returns 80-90% Cash Returns +2 to +3% Organic +MSD Adj. to Shareholders 95%+ FCF Conversion1 Net Sales1 Operating Profit2 +MSD to +HSD Adj. Diluted EPS2 $ $ $ 1 Non-GAAP measure. 2 Constant currency growth rate. No
Slide 39: Growing Sales
General Mills Organic Net Sales Growth +3% CGR* Growing Sales Delivering on Long-term Target +2 to +3% F18 F21 *Non-GAAP measure. See appendix for reconciliation. SE CTI O N 3 : KO F I BRU C E: SH A R E H O L D E R R E T UR N M O D E L & F2 2 O UT LO OK
Slide 40: Expanding Margins
General Mills Adj. Op. Profit Growth Expanding +6% CGR* Margins Delivering on Long-term Target +MSD% F18 F21 *Constant currency growth rate. Non-GAAP measure. See appendix for reconciliation. SE CTI O N 3 : KO F I BRU C E: SH A R E H O L D E R R E T UR N M O D E L & F2 2 O UT LO OK
Slide 41: Driving Earnings Growth
Driving General Mills Adj. Diluted EPS Growth Earnings +7% CGR* Growth Delivering on Long-term Target +MSD to +HSD% F18 F21 *Constant currency growth rate. Non-GAAP measure. See appendix for reconciliation. SE CTI O N 3 : KO F I BRU C E: SH A R E H O L D E R R E T UR N M O D E L & F2 2 O UT LO OK
Slide 42: Converting Earnings to Cash
Converting Earnings to Cash Delivering on General Mills Free Cash Flow* Long-term Target (3-Year Rolling, $ in Billions) $7.9 ≥95% $7.7 $6.2 $6.0 127% 120% 108% 109% F16-F18 F17-F19 F18-F20 F19-F21 Free Cash Flow Free Cash Flow Conversion* *Non-GAAP measures. See appendix for reconciliation. SE CTI
Slide 43: Strengthened Balance Sheet
Strengthened Balance Sheet Achieved Target Leverage of 3.0x in F21 4.2x 3.9x 3.2x 2.9x F18 F19 F20 F21 Net Debt to Trailing 12-Month Adjusted-EBITDA Ratio. Pro-forma Non-GAAP measure. See appendix for reconciliation. SE CTI O N 3 : KO F I BRU C E: SH A R E H O L D E R R E T UR N M O D E L & F2 2 O U
Slide 44: Capital Allocation Priorities
CAPEX ~4% of Net Sales Capital Grow Dividends with Earnings Allocation Priorities Strategic M&A Share Repurchases SE CTI CT I O N 3 : KO F I BRU C E: SH S H A R E H O L D E R R E T UR N M O D E L & F2 F 2 2 O UT LO OK
Slide 45: Generating Top-tier Shareholder Returns
Generating Top-tier Shareholder Returns Total Shareholder Return - F18 to F21 Total Shareholder Return - F22 YTD1 65% 11% 43% 2% GIS Peer Median2 GIS Peer Median2 ¹FYTD thru 2/1/2022. ²General Mills performance peer group. Please see F21 proxy statement for list of peer companies. SE CTI O N 3 : KO
Slide 46: Reaffirming Fiscal 2022 Outlook
Reaffirming Fiscal 2022 Outlook Key Financial Measures 1 F22 Outlook Organic Net Sales Growth +4 to +5% Adjusted Operating Profit Growth2 -4 to -1% Adjusted Diluted EPS Growth2 -2 to +1% Free Cash Flow Conversion ~95% 1 Non-GAAP measures. 2 Growth rates in constant currency. Non-GAAP measures. SE CT
Slide 47: Today's Key Messages
Executing Well and Advancing our Accelerate Strategy Today’s Key Reshaping our Portfolio and Messages Organization for Growth Better Geared for Profitable Growth and Strong Shareholder Returns
Slide 48: General Mills CAGNY 2022
y General Mills CAGNY 2022
Slide 49: A Reminder on Non-GAAP Guidance
A Reminder on Non-GAAP Guidance The company’s outlook for organic net sales growth, adjusted operating profit growth, adjusted diluted EPS growth, and free cash flow conversion are non-GAAP financial measures that exclude, or have otherwise been adjusted for, items impacting comparability, including
Slide 50: Reconciliation of Organic Net Sales Compound Growth Rates
Reconciliation of Organic Net Sales Compound Growth Rates (FISCAL YEARS) Full Year Reported Foreign Acquisitions Organic Net Net Sales 53rd Week Exchange & Divestitures Sales Growth Growth Total 2019 vs 2018 7% (2) pts 9 pts - 0% 2020 vs 2019 5% (1) pt - 2 pts 4% 2021 vs 2020 3% 1 pt - (2) pts 4% 3-
Slide 51: Reconciliation of Adjusted Operating Profit Compound Growth Rates
Reconciliation of Adjusted Operating Profit Compound Growth Rates (FISCAL YEARS, $ IN MILLIONS) Full-year 3-year 2021 2020 Change 2020 2019 Change 2019 2018 Change Ended F21 CGR Operating profit as reported $ 3,144.8 $ 2,953.9 6% $ 2,953.9 $ 2,515.9 17 % 2,515.9 $ 2,419.9 4% 9% Restructuring charges
Slide 52: Reconciliation of Adjusted Diluted EPS and Constant-currency Growth Rates
Reconciliation of Adjusted Diluted EPS and Related Constant-currency Growth Rates Fiscal Year 3-year Per Share Data 2021 2020 Change 2020 2019 Change 2019 2018 Change Ended F21 CGR Diluted earnings per share, as reported $ 3.78 $ 3.56 6 % $ 3.56 $ 2.90 23 % 2.90 $ 3.64 (20) % 1% Restructuring charge
Slide 53: Reconciliation of Free Cash Flow and Free Cash Flow Conversion
Reconciliation of Free Cash Flow and Free Cash Flow Conversion (FISCAL YEARS, $ IN MILLIONS) 2021 2020 2019 2018 2017 2016 Net earnings, including earnings attributable to redeemable and noncontrolling interests, as reported $ 2,346 $ 2,211 $ 1,786 $ 2,163 $ 1,701 $ 1,737 Restructuring charges** 137
Slide 54: Reconciliation of Net Debt-to-Adjusted EBITA Ratio
Reconciliation of Net Debt-to-Adjusted EBITA Ratio (FISCAL YEARS, $ IN MILLIONS) 2021 Full-year 2020 2019 2018** Net earnings, including earnings attributable to redeemable and noncontrolling interests, as reported $ 2,346.0 $ 2,210.8 $ 1,786.2 $ 2,284.4 Income taxes 629.1 480.5 367.8 104.3 Interest
Slide 55: Reconciliation of Income Taxes on Adjusting Items
Reconciliation of Income Taxes on Adjusting Items (FISCAL YEARS, $ IN MILLIONS) 2021 2020 2019 2018 2017 2016 Pretax Income Pretax Income Pretax Income Pretax Income Pretax Income Pretax Income Earnings** Taxes Earnings** Taxes Earnings** Taxes Earnings** Taxes Earnings** Taxes Earnings** Taxes As r