General Mills, Inc. · NYSE:GIS
General Mills — CAGNY 2024 Conference
57 slides from General Mills's conference presentation, Feb 20, 2024
Slide 1: CAGNY 2024
CAGNY 2024 February 20, 2024 2024 CAGNY Conference
Slide 2: Jeff Harmening, Chairman and Chief Executive Officer
Jeff Harmening Chairman and Chief Executive Officer 2024 CAGNY Conference 2
Slide 3: 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 4: Key Messages
Key Messages • Our Accelerate strategy has driven strong results and returns for shareholders • We are navigating short-term headwinds, while investing to deliver long-term sustainable growth • General Mills is positioned to continue driving top-tier shareholder value 2024 CAGNY Conference 4
Slide 5: Agenda
Agenda Our Long-term Creating Accelerate Growth Shareholder Strategy Drivers Value 2024 CAGNY Conference 5
Slide 6: Making Food the World Loves
Making Food the World Loves for More than 150 Years $20 Billion Nine #1 ~34,000 Fiscal 2023 Billion Provider of Natural & Employees Net Sales Dollar Brands Organic Packaged Food Worldwide in the U.S.¹ FORBES 2023 America’s Best Large Employers Best Employers for New Grads World’s Top Companies for W
Slide 7: An Experienced Senior Leadership Team
An Experienced Senior Leadership Team 2024 CAGNY Conference 7
Slide 8: Our Accelerate Strategy
Our Accelerate Strategy Our Purpose Where to Core Global Local Portfolio Play Markets Platforms Gems Reshaping How to Boldly Building Relentlessly Unleashing Standing Win Brands Innovating Our Scale for Good Shareholder Organic Net Sales1 Adj. Op. Profit1 Adj. Diluted EPS1 Maintain Capital Value +2
Slide 9: Meeting Consumers' Varying Needs
Meeting Consumers’ Varying Needs Fiscal 2023 Net Sales Five Global Platforms ICE CREAM Cereal Pet Food Snack Bars URT SN G AC O Y KS ING BAK Mexican Food Ice Cream D OU G L REA H CE ET P FO T OD N I EN C O NVE S L M EA 2024 CAGNY Conference 9
Slide 10: Focused on Eight Core Markets
Focused on Eight Core Markets Fiscal 2023 Net Sales Eight Core Markets AL NOR TION TH RNA AM TE E IN RI CA 2024 CAGNY Conference 10
Slide 11: We've Been Reshaping Our Portfolio for Growth
We’ve Been Reshaping Our Portfolio for Growth Increased Growth Exposure by More than 1 Point Since Fiscal 2018 Turned Over Almost 20% of Our Business Since F18 Acquisitions ~20% Divestitures Europe 2024 CAGNY Conference 11
Slide 12: Our Accelerate Strategy is Driving Strong Results
Our Accelerate Strategy is Driving Strong Results Reaffirming 5-year Long-term Fiscal 2024 CGR3 Algorithm Guidance Organic Net Sales1 +5% -1% to Flat +2 to 3% Adj. Op. Profit2 +6% +4 to 5% +MSD% Adj. Diluted EPS2 +7% +4 to 5% +MSD to HSD% (1) Non-GAAP measure (2) Constant-currency growth rates. Non-
Slide 13: Navigating an Evolving Operating Environment
Navigating an Evolving Operating Environment Current Headwinds Emerging Tailwinds Value-seeking Behaviors Moderating Inflation Geopolitical Uncertainty Stabilizing Supply Chains Increasing U.S. Climate Volatility Consumer Confidence 2024 CAGNY Conference 13
Slide 14: Driving Long-term Sustainable Growth
Driving Long-term Sustainable Growth Boldly Building Relentlessly Unleashing Standing Brands Innovating Our Scale for Good 2024 CAGNY Conference 14
Slide 15: Long-term Mega Trends
Long-term “Mega Trends” Demographic Humanization Technology Climate Shifts of Pet Food Advancements Change 2024 CAGNY Conference 15
Slide 16: Investing in Bold Brand Building
Investing in Bold Brand Building Media Investment¹ ($ in Millions) +41% $810 $576 F18 F23 (1) Advertising and media expense (including production and communication costs) 2024 CAGNY Conference 16
Slide 17: General Mills Bold Brand Building Video
General Mills Bold Brand Building Video 2024 CAGNY Conference 17
Slide 18: Cheerios Hearts Campaign
Cheerios Hearts Campaign 2024 CAGNY Conference 18
Slide 19: Connecting to Consumers with Relevant Messages
Connecting to Consumers with Relevant Messages 2024 CAGNY Conference 19
Slide 20: Blue Buffalo's Ingredient Superiority
Blue Buffalo’s Ingredient Superiority Most Loved Natural # 1 Pet Food Brand Most Trusted Natural # 1 Pet Food Brand Most Recommended # 1 Brand by Pet Parents Source: General Mills brand equity study fiscal 2024 Q2 2024 CAGNY Conference 20
Slide 21: Blue Buffalo Life Protection Formula Advertising
Blue Buffalo Life Protection Formula Advertising 2024 CAGNY Conference 21
Slide 22: Restored Volume Growth
Life Protection Formula U.S. Dry Dog Food Retail Pound Growth1 Restored +HSD% Volume Growth on Life Protection Formula -MSD% Nov 4 Dec 2 Dec 30 Jan 27 2023 2023 2023 2024 (1) NIQ xAOC. Rolling 4-week LPF U.S. dry dog food pound volume, % vs. LY 2024 CAGNY Conference 22
Slide 23: Relentlessly Innovating
Relentlessly Innovating New Core Scaled Disruptive Products Expansion M&A Growth 2024 CAGNY Conference 23
Slide 24: Category-leading Innovation in Cereal
Category-leading Innovation in Cereal 2024 CAGNY Conference 24
Slide 25: Exciting Innovation in Snacking
Exciting Innovation in Snacking 2024 CAGNY Conference 25
Slide 26: Innovating Across Meal Occasions
Innovating Across Meal Occasions 2024 CAGNY Conference 26
Slide 27: Driving Humanization in Pet
Driving Humanization in Pet 2024 CAGNY Conference 27
Slide 28: Expanding Blue Buffalo to China
Expanding Blue Buffalo to China Large and Growing National Launch of Pet Food Category Blue Buffalo Wild Spirit China Dog and Cat Food Retail Sales1 ($ in Billions) +15% CGR $7.6 $3.8 2018 2023 (1) Euromonitor China Dog and Cat Food category retail sales value 2024 CAGNY Conference 28
Slide 29: Always On Portfolio Reshaping Capabilities
“Always On” Portfolio Reshaping Capabilities Scaled M&A Disruptive Growth Shareholder Value Creation Improved Growth Exposure Global Platforms, Core Markets 2024 CAGNY Conference 29
Slide 30: Unleashing Our Scale with Digital Capabilities
Unleashing Our Scale with Digital Capabilities Data-driven Supply Chain E-commerce Marketing Digitization 2024 CAGNY Conference 30
Slide 31: E-commerce: Superior Execution at the Digital Shelf
E-commerce: Superior Execution at the Digital Shelf Winning Search, Advantaged Content and Reviews Online Position Percent of U.S. Retail Sales from E-commerce1,2 Mid-teens% ~7% Food & General Beverage Mills (1) eMarketer 2023 U.S. Food and Beverage online sales as a percent of total retail sales (2
Slide 32: Data-driven Marketing: Creating Consumer Connections
Data-driven Marketing: Creating Consumer Connections Data-driven Targeting Personalized Content Optimized Incentives 16MM Improved Effectiveness Average Monthly Interactions 2024 CAGNY Conference 32
Slide 33: Nature Valley Data-driven Marketing
Nature Valley Data-driven Marketing 1. Data-driven Targeting 2. Personalized Content Buyers of Private Rapid Message Label Grain Bars Iteration +HSD% Lift in Ad Connect Incentives Effectiveness to Drive Purchase 4. Improved Effectiveness 3. Optimized Incentives 2024 CAGNY Conference 33
Slide 34: Supply Chain Digitization: Accelerating HMM Cost Savings
Supply Chain Digitization: Accelerating HMM Cost Savings Sourcing Manufacturing Logistics Predict and Manage Real-time Connected Disruptions Analytics Data 2024 CAGNY Conference 34
Slide 35: Standing for Good
Standing for Good Our 10 Standing Advancing Regenerative for Good Commitments Agriculture ~500,000 Acres Engaged in Regenerative Agriculture1 (1) As of fiscal 2023 2024 CAGNY Conference 35
Slide 36: Kofi Bruce, Chief Financial Officer
Kofi Bruce Chief Financial Officer 2024 CAGNY Conference 36
Slide 37: Four Levers to Drive Top-tier Shareholder Returns
Four Levers to Drive Top-tier Shareholder Returns Sales Margin Cash Cash Growth Expansion Conversion Returns Organic Net Sales¹ Adj. Operating Profit¹ FCF Conversion¹ Cash Returns to Shareholders +2 to 3% +MSD%² 95%+ ~80 to 90% Adj. Diluted EPS¹ +MSD to HSD%² (1) Non-GAAP measures (2) Constant-curre
Slide 38: Growing Sales
General Mills Organic Net Sales¹ +5% CGR¹ Growing Sales Exceeded Long-term Target of +2 to 3% F18 F23 (1) Non-GAAP measure. See appendix for reconciliation 2024 CAGNY Conference 38
Slide 39: Accelerated HMM Cost Savings Delivery
Accelerated HMM Cost Savings Delivery General Mills HMM Cost Savings as % of COGS 5% 4% ~4% of COGS 3% 3% F10 - F21 F22 F23 F24 Long-term Average Estimate Goal 2024 CAGNY Conference 39
Slide 40: Margin Progress Creates Capacity for Re-investment
Margin Progress Creates Capacity for Re-investment Gross Margin Roughly In Line Levers of Top-tier with Pre-pandemic Level Margin Management General Mills Adjusted Gross Margin¹ -0.3pts • Elevated HMM Cost Savings 34.5% 34.2% • Accelerated Removal of Disruption-related Costs • Strategic Revenue Mana
Slide 41: Growing Profit
General Mills Adjusted Operating Profit¹ +6% CGR¹ Growing Profit Delivered Long-term Target of +MSD% F18 F23 (1) Non-GAAP measure. Constant-currency growth rate. See appendix for reconciliation 2024 CAGNY Conference 41
Slide 42: Delivered Long-term Working Capital Improvement
Delivered Long-term Working Capital Improvement Core Working Capital1 ($ in Billions) Generated Nearly $1B in Cash Through Core Working Capital Reduction $0.6 $0.4 -$0.2 -$0.2 -$0.3 -$0.4 F18 F19 F20 F21 F22 F23 (1) Core Working Capital defined as accounts receivable plus inventories less accounts p
Slide 43: Converting Earnings to Cash
General Mills Free Cash Flow¹ (3-Year Rolling, $ in Billions) Converting $7.7 $7.9 $8.4 $7.3 Earnings $6.0 $6.2 to Cash 108% 109% 127% 120% 119% 98% Exceeded Long-term Target of 95%+ F16-F18 F17-F19 F18-F20 F19-F21 F20-F22 F21-F23 Free Cash Flow Free Cash Flow Conversion¹ (1) Non-GAAP measures. See
Slide 44: Long-term Capital Allocation Priorities
Long-term Capital Allocation Priorities Priorities Long-term Goal CAPEX ~4% of Net Sales Dividend Growth Grow Dividend with Earnings Strategic M&A Growth and Value-accretive M&A Share Repurchases ~1 to 2% Average Annual Reduction 2024 CAGNY Conference 44
Slide 45: Returned More than $10 Billion to Shareholders Since F18
Returned More than $10 Billion to Shareholders Since F18 Dividends Net Share Repurchases ($ per Share) ($ in Billions) $7.3 Billion $2.8 Billion Returned to Shareholders Returned to Shareholders $2.16 $1.2 $1.96 $0.5 F19-F21 Deleveraging Post- Blue Buffalo Acquisition F18 F19 F20 F21 F22 F23 F18¹ F1
Slide 46: Growing Earnings
General Mills Adjusted Diluted EPS¹ +7% CGR¹ Growing Earnings Delivered Long-term Target of +MSD to HSD% F18 F23 (1) Non-GAAP measure. Constant-currency growth rate. See appendix for reconciliation 2024 CAGNY Conference 46
Slide 47: Delivered Double-digit Annual Shareholder Return
Delivered Double-digit Annual Shareholder Return Total Shareholder Return Index (Stock Price Appreciation plus Dividends) 12% Compound Annual Return x175 x157 x100 Jan Jan Jan Jan Jan Jan 2019 2020 2021 2022 2023 2024 General Mills Food Peer Median¹ Source: FactSet. 5-year total shareholder return t
Slide 48: Key Messages
Key Messages • Our Accelerate strategy has driven strong results and returns for shareholders • We are navigating short-term headwinds, while investing to deliver long-term sustainable growth • General Mills is positioned to continue driving top-tier shareholder value 2024 CAGNY Conference 48
Slide 49: Appendix
Appendix 2024 CAGNY Conference 49
Slide 50: A Reminder on Non-GAAP Guidance
A Reminder on Non-GAAP Guidance Our fiscal 2024 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 51: Reconciliation of Organic Net Sales Compound Growth Rates
Reconciliation of Organic Net Sales Compound Growth Rates (Fiscal Years, Percent Change) Reported Net Foreign Acquisitions 53rd Organic Net Sales Growth Exchange & Divestitures Week Sales Growth 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% 20
Slide 52: Reconciliation of Adjusted Gross Margin
Reconciliation of Adjusted Gross Margin (Fiscal Years) 2023 2018 Percent of Percent of Net Sales Net Sales Gross margin as reported 32.6 % 34.5 % Mark-to-market effects 1.5 % (0.2) % Product recall, net 0.1 % - % Restructuring charges - % 0.1 % Project-related costs - % 0.1 % Adjusted gross margin 3
Slide 53: Reconciliation of Adjusted Operating Profit Constant-currency Growth Rates
Reconciliation of Adjusted Operating Profit Constant-currency Growth Rates (Fiscal Years, $ in Millions) 5-year 2023 2022 Change 2022 2021 Change 2021 2020 Change 2020 2019 Change 2019 2018 Change CGR Operating profit as reported $3,433.8 $3,475.8 (1)% $3,475.8 $3,144.8 11% $3,144.8 $2,953.9 6% $2,9
Slide 54: Reconciliation of Adjusted Diluted EPS and Related Constant-currency Growth Rates
Reconciliation of Adjusted Diluted EPS and Related Constant-currency Growth Rates (Fiscal Years, $ per Share) 5-year 2023 2022 Change 2022 2021 Change 2021 2020 Change 2020 2019 Change 2019 2018 Change CGR Diluted earnings per share, as reported $4.31 $4.42 (2)% $4.42 $3.78 17% $3.78 $3.56 6% $3.56
Slide 55: Reconciliation of Free Cash Flow and Free Cash Flow Conversion
Reconciliation of Free Cash Flow and Free Cash Flow Conversion (Fiscal Years, $ in Millions) 2023 2022 2021 2020 2019 2018 2017 2016 Net earnings, including earnings attributable to redeemable and noncontrolling interests, as reported $ 2,610 $ 2,735 $ 2,346 $ 2,211 $ 1,786 $ 2,163 $ 1,701 $ 1,737 D
Slide 56: Reconciliation of Net Debt-to-Adjusted EBITDA Ratio
Reconciliation of Net Debt-to-Adjusted EBITDA Ratio (Fiscal Year, $ in Millions) 2023 Total debt (a) $ 11,705.9 Cash 585.5 Net debt $ 11,120.4 Net earnings, including earnings attributable to redeemable and noncontrolling interests, as reported $ 2,609.6 Income taxes 612.2 Interest, net 382.1 Deprec
Slide 57: Reconciliation of Income Taxes on Adjusting Items
Reconciliation of Income Taxes on Adjusting Items (Fiscal Years, $ in Millions Except per Share Data) 2023 2022 2021 2020 2019 2018 Pretax Income Pretax Income Pretax Income Pretax Income Pretax Income Pretax Income Earnings** Taxes Earnings** Taxes Earnings** Taxes Earnings** Taxes Earnings** Taxes