General Mills, Inc. · NYSE:GIS
General Mills — Shareholder Meeting (September 2014)
62 slides from General Mills's shareholder meeting presentation, Sep 23, 2014
Slide 1: 86th Annual Shareholders Meeting
86th Annual Shareholders Meeting Putting the Consumer First 7459-1
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: Fiscal 2014 Summary
Fiscal 2014 Summary • Recorded Good Progress Building Our Worldwide Food Businesses • Stock Price Appreciation + 17% Dividend Increase Created Double-digit Return to Shareholders • Net Sales and Operating Profit Results Fell Short of Targets 7459-3
Slide 4: U.S. Food & Beverage Growth Has Slowed
U.S. Food & Beverage Growth Has Slowed Total U.S. Food & Beverage $ Sales Growth 4.8% 3.3% 2.3% 1.5% F09-F11 Avg F12 F13 F14 Source: Nielsen XAOC 7459-4
Slide 5: Input Cost Inflationary, Driven by Global Demand
Input Cost Inflationary, Driven by Global Demand General Mills Input Cost Inflation +10% Avg: +4-5% +4% +4% +3% +3% F11 F12 F13 F14 F15 Plan Supply Chain costs including raw materials, energy, wages, benefits, handling costs. 7459-5
Slide 6: General Mills Fiscal 2014 Performance
General Mills Fiscal 2014 Performance Total Net Sales Financial Results $17.9 Billion (in Millions, except per share data) Net Sales $17,910 +1% Adjusted Segment $3,154 -2% Operating Profit* Int’l Segment $5.4B Net Earnings $1,824 -2% U.S. Retail $10.6B Diluted Earnings CS&F Per Share $2.83 +1% $1.9
Slide 7: Fiscal 2014 U.S. Retail Segment
Fiscal 2014 U.S. Retail Segment Net Sales: $10.6B, Flat vs. LY Operating Profit: $2.3B, -3% vs. LY Net Sales by Division % $MM Change Big G Cereals $2,345 +0% Baking Products 1,832 -1 Snacks 1,824 +6 Frozen Foods 1,526 -2 Meals 1,419 -4 Yoplait 1,312 -3 Small Planet Foods 348 +6 Table does not foot
Slide 8: Fiscal 2014 Convenience Stores & Foodservice Segment
Fiscal 2014 Convenience Stores & Foodservice Segment Net Sales: $1.9B, -2% vs. LY Operating Profit: $307MM, -2% vs. LY Six Priority Platforms (Fiscal 2014 Net Sales: +4%) • Cereal • Snacks • Yogurt • Biscuits • Baking Mixes • Frozen Breakfast 7459-8
Slide 9: Fiscal 2014 International Segment
Fiscal 2014 International Segment Net Sales: $5.4B; Constant-currency Growth +8%* Adjusted Operating Profit*: $535MM; Constant-currency Growth +10%* Net Sales by Region % Growth $MM Constant-currency* Europe $2,189 -4% Canada 1,195 +5 Latin America 1,020 +38 Asia / Pacific 982 +9 * Non-GAAP measure.
Slide 10: Fiscal 2014 Stock Price Appreciation
Fiscal 2014 Stock Price Appreciation S&P 500 Index +15% GIS +10% S&P Packaged Food Index +9% May May 2013 2014 Source: Bloomberg 7459-10
Slide 11: Growing Shareholder Dividends
Growing Shareholder Dividends Dividends per Share +17% $1.64 $1.55 $1.32 $1.22 $1.12 $0.96 F10 F11 F12 F13 F14 Current Annualized Rate 7459-11
Slide 12: A Long Record of Superior Returns to Shareholders
A Long Record of Superior Returns to Shareholders (Price Appreciation Plus Dividends, Compound Annual Growth) Fiscal Years General Mills S&P 500 1984 – 2014 +14% +12% 1994 – 2014 +11% +9% 2004 – 2014 +12% +8% 2009 – 2014 +20% +18% Source: Bloomberg 7459-12
Slide 13: Our Pension Performance
Our Pension Performance • Pension Plans Remain Healthy • Qualified Plan Fully Funded • Fiscal 2014 Return on Plan Assets +15% 7459-13
Slide 14: First Quarter 2015 Financial Summary
First Quarter 2015 Financial Summary ($ in Millions, Except per Share) Constant- currency $ % Change % Change* Net Sales $4,268 -2% -1% Segment Operating Profit* 690 -15 -15 Adjusted Diluted .61 -13 -13 Earnings Per Share* *Non-GAAP measure. See our website for reconciliation. 7459-14
Slide 15: Fiscal 2015 First Quarter Highlights
Fiscal 2015 First Quarter Highlights • International Constant-currency Net Sales* +6% • CS&F Net Sales and Operating Profit Growth • Improved Performance on U.S. Yogurt • Continued Share Growth on U.S. Cereal • Maintaining Strong Momentum on Snacks • Good Growth on Natural/Organic Products * Non-GAA
Slide 16: Expanding Our Natural & Organic Business
Expanding Our Natural & Organic Business 7226-16
Slide 17: Our Long-term Growth Model
Our Long-term Growth Model Compound Annual Growth Factor Growth Target Net Sales Low single-digit Segment Operating Profit Mid single-digit Adjusted Diluted Earnings per Share High single-digit Total Return to Shareholders Double-digit 7459-17
Slide 18: We're Focused on Growing Consumer Groups
We’re Focused on Growing Consumer Groups Emerging Markets Adults 55+ Millennials U.S. Multiculturals Expanding Middle Class 7459-18
Slide 19: Opportunity: Emerging Markets
Opportunity: Emerging Markets Middle Class Households in China, India, Brazil, Indonesia % Urbanized by 2020 (Millions) % Women Working by 2020 86% 384 71% 66% 63% 59% 56% 200 34% 26% 2010 2020 China Indonesia India Brazil Source: Euromonitor 2010 7459-19
Slide 20: Opportunity: Adults 55+
Opportunity: Adults 55+ • 25% of U.S. Population in 2010 • 30% of Population by 2020 • Strong Health Focus, Read Ingredient Labels Source: U.S. Census Bureau 7459-20
Slide 21: Opportunity: Millennials
Opportunity: Millennials • 20 to 37 Years Old • 77 Million U.S. Consumers • 63% of U.S. Moms by 2020 • Like Variety, Ethnic Flavors, Experimentation Source: U.S. Census Bureau 7459-21
Slide 22: Opportunity: U.S Multiculturals
Opportunity: U.S Multiculturals • 50% of Births Today • By 2060, 57% of U.S. Population • Hispanics Driving Growth Source: U.S. Census Bureau 7459-22
Slide 23: Our Business Portfolio is Built for Growth
Our Business Portfolio is Built for Growth RTE Cereal Baking Products, $3.9 Billion Dough, Vegetables, Other Snacks Super-premium $3.2 Billion Ice Cream $950 Million Convenient Meals Yogurt $2.8 Billion $3.0 Billion Fiscal 2014 Worldwide Net Sales*: $19.2 Billion * Non-GAAP measure. Includes $17.9 b
Slide 24: Consumers are Driving Growth in Our Categories
Consumers are Driving Growth in Our Categories Projected Global Category 2013 Retail Sales 5-Yr. CGR RTE Cereal $28 Billion +5% Ice Cream $77 Billion +7% Yogurt $80 Billion +9% Ready Meals $91 Billion +5% Sweet & Savory Snacks $305 Billion +6% Source: Euromonitor 2013 Sweet & Savory Snacks includes
Slide 25: Demographic Trends Favor Cereal
Demographic Trends Favor Cereal Cereal is Popular with Hispanic Cereal Growing Age Groups Consumption is High (Cereal Eatings per Capita) 23.1 126 92.3 22.7 89.7 103 96 84 Under Age Age Age F14 Penetration F14 Buy Rate 13 13-34 35-54 55+ Population Growth to 2020: General 8% 6% -2% 22% Hispanic Popu
Slide 26: General Mills Cereal Trends
General Mills Cereal Trends General Mills RTE Cereal Big G Cereal Net Sales Dollar Market Share ($ in Billions) $2.3 31.0 $1.9 29.7 F07 F08 F09 F10 F11 F12 F13 F14 F07 F08 F09 F10 F11 F12 F13 F14 Source: Nielsen All-outlet F07-F09, Nielsen XAOC F10-F14 7459-26
Slide 27: U.S. Cereal Renovation and Innovation
U.S. Cereal Renovation and Innovation Core Rennovation Gluten Free Protein Innovation 7459-27
Slide 28: Cereal Partners Worldwide
Cereal Partners Worldwide (Fiscal 2014) #1 Positions in Emerging Markets • Indonesia • Russia • Philippines • Chile Emerging • Malaysia • Saudi Arabia • Thailand • Poland Developed • Turkey • Romania Net Sales: $2.1 Billion Source: Nielsen latest 52 weeks available through April 2014 (Phillppines th
Slide 29: U.S. Yogurt: Finished Fiscal 2014 with Clear Momentum
U.S. Yogurt: Finished Fiscal 2014 with Clear Momentum Yoplait Dollar Share of Retail Sales Growth Greek Segment Original Style Yoplait (Fiscal 2014) (Fiscal 2014 vs LY) 11% 10% 10% 10% 10% 10% 12% 8.5% 9% 10% 6% 6% Cal 2% 2013 Cal Jan Feb Mar Apr May Q1 Cal Jan Feb Mar Apr May Q1 2013 F15 2013 F15 -
Slide 30: Bringing News to Our U.S. Yogurt Portfolio
Bringing News to Our U.S. Yogurt Portfolio Taste Performance on Established Yogurt Greek Varieties Product News ¹ Comparison based on a national taste test of Yoplait Greek 100 Strawberry yogurt and Chobani ® Simply 100 Strawberry yogurt ² Comparison based on a national taste test of Yoplait Greek B
Slide 31: New Yogurt Opportunity
New Yogurt Opportunity Go-GURT Yogurt in Happy Meals 7459-31
Slide 32: Leading Emergence of Greek Yogurt in Key Western European Markets
Leading Emergence of Greek Yogurt in Key Western European Markets UK France Q1 Fiscal 2015 Retail Sales Q1 Fiscal 2015 Retail Sales +7% +5% Source: IRI latest quarter ended July 2014 7459-32
Slide 33: Greater China Yoplait Launch
Greater China Yoplait Launch China Yogurt Category Sales (Calendar Years) $17B $8B • Consumer-first Launch Plan $4B • Plant Construction Underway 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Estimates Source: Euromonitor 2013 7459-33
Slide 34: Leading U.S. Grain Snack Growth
Leading U.S. Grain Snack Growth Nature Valley Snacks Fiber One Snacks Retail Sales Retail Sales ($ in Millions) ($ in Millions) CGR = +12% CGR = +14% $828 $416 F10 F11 F12 F13 F14 F10 F11 F12 F13 F14 Source: Nielsen XAOC 7459-34
Slide 35: New Snack Varieties
New Snack Varieties June Launches 2 Varieties 3 Varieties 2 Varieties 7459-35
Slide 36: Natural and Organic Snacks
Natural and Organic Snacks Q1 Fiscal 2015 Snacks Retail Sales +17% Source: Nielsen XAOC FYTD ended 8.23.14, SPINS FYTD ended 8.10.14 7459-36
Slide 37: Convenient Meals: Old El Paso Mexican Products
Convenient Meals: Old El Paso Mexican Products Europe U.S. 7459-37
Slide 38: Wanchai Ferry Frozen Meals in Greater China
Wanchai Ferry Frozen Meals in Greater China 7459-38
Slide 39: Yoki Meals in Brazil
Yoki Meals in Brazil 7459-39
Slide 40: Häagen-Dazs Ice Cream in Europe
Häagen-Dazs Ice Cream in Europe 7459-40
Slide 41: Häagen-Dazs in China
Häagen-Dazs in China Number of Shops 350+ 283 202 148 112 91 F10 F11 F12 F13 F14 F15 Plan 7459-41
Slide 42: COGS HMM Savings
COGS HMM Savings (Fiscal Years, $ in Millions) $4,000 >$400 $2,000 2010-2014 Cumulative 2015 Plan Cumulative 2010-2020 Savings Savings Goal 7459-42
Slide 43: HMM Has Helped Maintain Margins
HMM Has Helped Maintain Margins Gross Margin % of Sales 39.6% 40.0% 35.5% 35.6% 36.3% 36.1% 35.6% F08 F09 F10 F11 F12 F13 F14 7459-43
Slide 44: Additional Cost Savings Initiatives
Additional Cost Savings Initiatives • Project Boost – International Structure Review – Streamline International Market/Region Structure – Standardize and Centralize Key Processes via Global Business Solutions – $40 Million Savings Over Three Years Through Fiscal 2015 • Project Century - North Americ
Slide 45: Our Fiscal 2015 Growth Targets
Our Fiscal 2015 Growth Targets Fiscal 2015 Constant-currency Growth Net Sales +Mid Single-digit Adjusted Segment +Mid Single-digit Operating Profit Adjusted Diluted Earnings +High Single-digit per Share 7459-45
Slide 46: GENERAL MILLS Champions Awards
GENERAL MILLS y, — ” \ 9 SN oo ~~ Champions |/“/ Awards : 2014
Slide 47: Greek Yogurt in Europe
Greek Yogurt in Europe • Patrick Bresdin • Philippe Demonte • Severine Geoffroy • Alexandre Pillaud 7459-47
Slide 48: Manufacturing in Greater China
Manufacturing in Greater China • ZhiJun Guan • De Huang • Neo Wang • Van Wang • Yong Zhang 7459-48
Slide 49: “Festa Junina” Driving Growth in Brazil
“Festa Junina” Driving Growth in Brazil • Cassio De Lima • Erasmo Nuzzi • Wellington Pauperio • Alex Rodrigues • Wagner Tortelli 7459-49
Slide 50: Old El Paso
Old El Paso • Robert Clements • Anne Dao • Kevin Fussner • Maggie Harris • Krista Lorio • Dan Stangler 7459-50
Slide 51: Building Our Brands with Hispanic Consumers
Building Our Brands with Hispanic Consumers • Kevin Greer • Brian Kittelson • Gail Peterson • Giselle Restrepo • Howard Riebling • Eliana Wahnon 7459-51
Slide 52: Small Planet Foods “Save the Bees” Campaign
Small Planet Foods “Save the Bees” Campaign • Kelly Boyle • Esmer Cancino • Tom Rabaey • Taylor West 7459-52
Slide 53: 86th Annual Shareholders Meeting
86th Annual Shareholders Meeting Putting the Consumer First 7459-53
Slide 54: Additional Information Related to the Annie’s Transaction
Additional Information Related to the Annie’s Transaction This document and the description contained herein is neither an offer to purchase nor a solicitation of an offer to sell shares of Annie’s, Inc. A solicitation and an offer to buy shares of Annie’s, Inc. common stock is being made pursuant t
Slide 55: Reconciliation of Adjusted Segment Operating Profit
Reconciliation of Adjusted Segment Operating Profit (Fiscal Years, $ in Millions) Q4 Fiscal Year 2014 2013 2014 2013 U.S. Retail $501 $517 $2,312 $2,393 Adjusted International 146 140 535 515 Convenience Stores & Foodservice 86 75 307 315 Adjusted Segment Operating Profit $733 $733 $3,154 $3,223 Una
Slide 56: Reconciliation of Adjusted Diluted EPS
Reconciliation of Adjusted Diluted EPS (Fiscal Years) Q4 Fiscal Year 2014 2013 2014 2013 Diluted EPS $0.65 $0.55 $2.83 $2.79 Mark-to-market Effects (.01) .01 (.05) -- Divestiture Gain, net (.06) -- (.06) -- Restructuring -- -- .01 .02 Tax Item -- (.03) -- (.13) Acquisition Integration Costs -- -- --
Slide 57: Reconciliation of International Full Year Constant-currency Net Sales Growth
Reconciliation of International Full Year Constant-currency Net Sales Growth Fiscal 2014 % Change in Net Sales % Change in on a Constant- Net Sales Impact of Foreign currency Basis as Reported Currency Exchange Europe -1% 3 pts -4% Canada -1 -6 5 Asia/Pacific 9 -- 9 Latin America 16 -22 38 Total Int
Slide 58: Reconciliation of Full Year Adjusted International Segment Operating Profit
Reconciliation of Full Year Adjusted International Segment Operating Profit (Fiscal Years, $ in Millions) Fiscal Year 2014 2013 Change International Segment Operating Profit $473 $490 -4% Venezuela Currency Devaluation 62 25 Adjusted International Segment Operating Profit $535 $515 4% Add Back of Fo
Slide 59: Reconciliation of Total Segment Operating Profit
Reconciliation of Total Segment Operating Profit (Fiscal Years, $ in Millions) Q1 2015 2014 U.S. Retail $457 $612 International 146 126 Convenience Stores & Foodservice 87 74 Total Segment Operating Profit $690 $812 Unallocated Corporate Items 119 74 Restructuring, Impairment, and Other Exit Costs 1
Slide 60: Reconciliation of Adjusted Diluted EPS and Related Constant-currency Growth Rate
Reconciliation of Adjusted Diluted EPS and Related Constant-currency Growth Rate (Fiscal Years) Q1 2015 2014 Change Diluted EPS $0.55 $0.70 -21% Mark-to-market Effects .05 -- Restructuring .01 -- Adjusted Diluted EPS $0.61 $0.70 -13% Impact of Foreign Currency Exchange -- Adjusted Diluted EPS On a C
Slide 61: Reconciliation of International Constant-currency Net Sales Growth
Reconciliation of International Constant-currency Net Sales Growth (Fiscal Years) Q1 2015 % Change in % Change in Net Sales Net Sales Impact of Foreign on a Constant- as Reported Currency Exchange currency Basis Europe 9% 5 pts 4% Canada -6 -4 -2 Asia/Pacific 4 -- 4 Latin America -4 -24 20 Total Int
Slide 62: Reconciliation of Constant-currency Total Segment Operating Profit Growth
Reconciliation of Constant-currency Total Segment Operating Profit Growth (Fiscal Years) Q1 2015 % Change in % Change in Total Segment Total Segment Operating Profit Operating Profit Impact of Foreign on a Constant- as Reported Currency Exchange currency Basis Total Segment Operating Profit -15% --