General Mills, Inc. · NYSE:GIS
General Mills — Q4 2023 Earnings Presentation
42 slides from General Mills's earnings presentation, Jun 28, 2023
Slide 1: Fiscal 2024 Q3 Earnings
Fiscal 2024 Q3 Earnings March 20, 2024 General Mills Fiscal 2024 Third Quarter
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 our current expectations and assumptions. These forward-looking statements are subject to certain risks and unce
Slide 3: Jeff Harmening, Chairman and Chief Executive Officer
Jeff Harmening Chairman and Chief Executive Officer General Mills Fiscal 2024 Third Quarter
Slide 4: Today's Key Messages
Today’s Key Messages • Continuing to Navigate an Evolving Operating Environment, while Generating Industry-leading HMM Cost Savings • Strong Brand Building, Innovation, and In-store Execution Led to Improved Volume and Share Trends in Q3 • Reaffirming Full-year Fiscal 2024 Guidance General Mills Fis
Slide 5: Third-quarter and YTD Fiscal 2024 Performance
Third-quarter and YTD Fiscal 2024 Performance F24 Q3 F24 YTD Actual Actual Organic Net Sales1 -1% +1% Organic Pound Volume -2% -3% Adj. Operating Profit2 +14% +9% Adj. Diluted EPS2 +22% +11% 1) Non-GAAP measure. See appendix for reconciliation 2) Growth rates in constant currency. Non-GAAP measure
Slide 6: 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 General Mills Fiscal 2024 Third Quarter 6
Slide 7: Progressing Against Our Fiscal 2024 Priorities
Progressing Against Our Fiscal 2024 Priorities Continue to Leverage Advantaged Capabilities 1 Compete Effectively to Adapt to New Environment Improve Supply Chain Drive HMM Cost Savings and 2 Efficiency Reduce Disruption-related Costs Maintain Capital Invest in the Business, Return Cash 3 Allocation
Slide 8: Competing Effectively in North America Retail
F24 Priority 1 Competing Effectively in North America Retail Investing in Increasing Expanding Brand Building Innovation Distribution Pillsbury Big Bet +0.3pts Media Innovation Share of +DD% vs. LY +DD% vs. LY Distribution Source: F24 Q3 advertising and media expense Source: F24 YTD net sales vs. LY
Slide 9: Improving Share Trends in North America Retail
F24 Priority 1 Improving Share Trends in North America Retail Improving U.S. Building Momentum Market Share Trend in Key U.S. Categories F24 U.S. Retail % Priority Business Holding/Growing Share Cereal Grain Snacks 44% 16% Fruit Snacks Hot Snacks 5% 0% Q1 Q2 Dec Jan/Feb Salty Snacks Desserts Source:
Slide 10: Competing Effectively on Pet
F24 Priority 1 Competing Effectively on Pet Retail Sales Trends Retail Sales by Channel F24 Q3 Blue Buffalo Retail Sales vs. Last Year • Pound Volume and Share Growth on Life Protection Formula +MSD% • Improving Retail Sales Trends +LSD% on Wet Food • Activating a Marketing Refresh on Wilderness in
Slide 11: Competing Effectively in Foodservice and International
F24 Priority 1 Competing Effectively in Foodservice and International North America Foodservice International • Modest Growth in Away-from- • Net Sales Declines in China and home Traffic1 Brazil Partially Offset by Continued ✓ Restaurant Traffic Roughly Flat Growth in Europe & Australia ✓ Non-Restau
Slide 12: Improving Supply Chain Efficiency
F24 Priority 2 Improving Supply Chain Efficiency Decelerating but Accelerating HMM Optimizing Positive Inflation Cost Savings Inventory Levels General Mills Input Cost Inflation General Mills HMM Cost Savings General Mills Inventories (as % of COGS) (as % of COGS) ($ in Billions) 13% -16% vs. F23 Q4
Slide 13: Maintaining Capital Allocation Discipline
F24 Priority 3 Maintaining Capital Allocation Discipline Priorities Fiscal 2024 Outlook CAPEX Unchanged ~4% of Net Sales Dividend Growth Unchanged 9% Dividend Increase as of Aug. 1, 2023 M&A Unchanged Retain Flexibility for Strategic Acquisitions Share Repurchases Unchanged ~3% Reduction to Average
Slide 14: Kofi Bruce, Chief Financial Officer
Kofi Bruce Chief Financial Officer General Mills Fiscal 2024 Third Quarter 14
Slide 15: Third-quarter Fiscal 2024 Financial Results
Third-quarter Fiscal 2024 Financial Results Q3 Total General Mills $MM vs. LY Net Sales $5,099 -1% Organic Net Sales1 -1% Adjusted Operating Profit1 $914 +14%2 Adjusted Diluted EPS1 $1.17 +22%2 1) Non-GAAP measures. See appendix for reconciliation 2) Growth rates in constant currency. Non-GAAP mea
Slide 16: Components of Third-quarter Net Sales Growth
Components of Third-quarter Net Sales Growth -1% Organic Net Sales1 +2 pts Flat Flat -1% -2 pts Organic Organic Foreign Acquisitions & Total Net Sales Volume Price / Mix Exchange Divestitures As Reported 1) Non-GAAP measure May not foot due to rounding General Mills Fiscal 2024 Third Quarter 16
Slide 17: Third-quarter Fiscal 2024 North America Retail
Third-quarter Fiscal 2024 North America Retail North America Retail Q3 • Q3 organic net sales reflected positive price/mix offset by lower volume Organic Net Sales¹ Flat Segment Op. Profit² -4% • Q3 organic net sales outpaced Nielsen- measured U.S. retail sales by ~2 points • Net sales results inclu
Slide 18: Third-quarter Fiscal 2024 Pet
Third-quarter Fiscal 2024 Pet Pet Q3 • Q3 organic net sales driven by lower volume, partially offset by positive price/mix Organic Net Sales¹ -3% Segment Op. Profit² +25% • Net sales results reflected declines on treats and dry food, partially offset by growth on wet food • Q3 profit increase driven
Slide 19: Third-quarter Fiscal 2024 North America Foodservice
Third-quarter Fiscal 2024 North America Foodservice North America Foodservice Q3 • Q3 organic net sales growth driven by positive price/mix and a modest increase in volume Organic Net Sales¹ +1% Segment Op. Profit² -1% • Bakery flour index pricing was a 4-point headwind to net sales growth • Q3 prof
Slide 20: Third-quarter Fiscal 2024 International
Third-quarter Fiscal 2024 International International Q3 • Q3 organic net sales driven by lower volume Organic Net Sales¹ -3% • Net sales results included declines in China and Segment Op. Profit² -53% Brazil, partially offset by continued growth in Europe & Australia • Q3 profit decrease driven by
Slide 21: Third-quarter Fiscal 2024 Joint Ventures
Third-quarter Fiscal 2024 Joint Ventures Q3 AFTER-TAX JV EARNINGS: $18MM, +64%¹ vs. LY Net Sales² Q3 • Q3 CPW net sales growth driven by positive price/mix, partially offset by lower volume Cereal Partners Worldwide +11% Häagen-Dazs Japan -2% • Q3 HDJ net sales decline driven by the timing of new p
Slide 22: Third-quarter Fiscal 2024 Margin Results
Third-quarter Fiscal 2024 Margin Results Adjusted Gross Margin1 Adjusted Operating Profit Margin1 (% of Net Sales) (% of Net Sales) 33.9% 33.8% 34.0% 17.9% 15.7% F20 Q3 F23 Q3 F24 Q3 F23 Q3 F24 Q3 (Pre-pandemic) • Q3 Adj. Gross Margin increase driven by HMM cost savings and positive price/mix, parti
Slide 23: Third-quarter Fiscal 2024 Other Income Statement Items
Third-quarter Fiscal 2024 Other Income Statement Items • Adjusted Unallocated Corporate Expenses Decreased $140MM vs. LY • Net Interest Expense Increased $23MM vs. LY • Adjusted Effective Tax Rate 18.4%, -320bps vs. LY¹ • Average Diluted Shares Outstanding -4% vs. LY 1) Non-GAAP measure. See appendi
Slide 24: Nine-month Fiscal 2024 Financial Results
Nine-month Fiscal 2024 Financial Results NINE MONTHS Total General Mills $MM vs. LY Net Sales $15,143 +1% Organic Net Sales1 +1% Adjusted Operating Profit1 $2,803 +9%2 Adjusted Diluted EPS1 $3.51 +11%2 1) Non-GAAP measures. See appendix for reconciliation 2) Growth rates in constant currency. Non-G
Slide 25: Nine-month Fiscal 2024 Balance Sheet and Cash Flow
Nine-month Fiscal 2024 Balance Sheet and Cash Flow Operating Cash Flow Capital Investments ($ in Millions) $486MM $2,439 Dividends Paid $2,027 $1,028MM Net Share Repurchases F23 F24 $1,590MM General Mills Fiscal 2024 Third Quarter 25
Slide 26: Reaffirming Fiscal 2024 Financial Outlook
Reaffirming Fiscal 2024 Financial Outlook Key Financial Metrics¹ F24 Outlook Organic Net Sales Growth -1% to Flat Adjusted Operating Profit Growth² +4 to 5% Adjusted Diluted EPS Growth² +4 to 5% Free Cash Flow Conversion 95%+ F24 Q4 Considerations • Expect meaningful headwind from comparison against
Slide 27: Today's Key Messages
Today’s Key Messages • Continuing to Navigate an Evolving Operating Environment, while Generating Industry-leading HMM Cost Savings • Strong Brand Building, Innovation, and In-store Execution Led to Improved Volume and Share Trends in Q3 • Reaffirming Full-year Fiscal 2024 Guidance General Mills Fis
Slide 28: 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 29: Appendix: North America Retail Operating Unit Results
Appendix: Third-quarter Fiscal 2024 North America Retail Operating Unit Results Net Sales % vs. LY Operating Unit Q3 U.S. Morning Foods +2% Canada +8% Canada Constant-currency¹ +8% U.S. Meals & Baking Solutions -1% U.S. Snacks -2% 1) Net sales growth in constant currency. Non-GAAP measure. See appen
Slide 30: Reconciliation of Canada Operating Unit Constant-currency Net Sales Growth
Reconciliation of Third-quarter Fiscal 2024 Canada Operating Unit Constant-currency Net Sales Growth General Mills Fiscal 2024 Third Quarter 30
Slide 31: Reconciliation of Third-quarter Organic Net Sales Growth
Reconciliation of Third-quarter Fiscal 2024 Organic Net Sales Growth *Table may not foot due to rounding General Mills Fiscal 2024 Third Quarter 31
Slide 32: Reconciliation of Nine-month Organic Net Sales Growth
Reconciliation of Nine-month Fiscal 2024 Organic Net Sales Growth *Table may not foot due to rounding General Mills Fiscal 2024 Third Quarter 32
Slide 33: Reconciliation of Adjusted Operating Profit Constant-currency Growth Rate
Reconciliation of Third-quarter Fiscal 2024 Adjusted Operating Profit Constant-currency Growth Rate (Fiscal Years, $ in Millions) *Table may not foot due to rounding General Mills Fiscal 2024 Third Quarter 33
Slide 34: Reconciliation of Nine-month Adjusted Operating Profit Growth Rate
Reconciliation of Nine-month Fiscal 2024 Adjusted Operating Profit Constant-currency Growth Rate (Fiscal Years, $ in Millions) *Table may not foot due to rounding General Mills Fiscal 2024 Third Quarter 34
Slide 35: Reconciliation of Adjusted Diluted EPS and Constant-currency Growth Rate
Reconciliation of Third-quarter Fiscal 2024 Adjusted Diluted EPS and Related Constant-currency Growth Rate (Fiscal Years) *Table may not foot due to rounding **See reconciliation of tax rate items for tax impact of individual items General Mills Fiscal 2024 Third Quarter 35
Slide 36: Reconciliation of Nine-month Adjusted Diluted EPS Growth Rates
Reconciliation of Nine-month Fiscal 2024 Adjusted Diluted EPS and Related Constant-currency Growth Rates (Fiscal Years) *Table may not foot due to rounding **See reconciliation of tax rate items for tax impact of individual items General Mills Fiscal 2024 Third Quarter 36
Slide 37: Reconciliation of Constant-currency Segment Operating Profit Growth
Reconciliation of Third-quarter Fiscal 2024 Constant-currency Segment Operating Profit Growth *Table may not foot due to rounding General Mills Fiscal 2024 Third Quarter 37
Slide 38: Reconciliation of After-tax Earnings from Joint Ventures Growth Rates
Reconciliation of Third-quarter Fiscal 2024 Constant-currency After-tax Earnings from Joint Ventures Growth Rates *Table may not foot due to rounding General Mills Fiscal 2024 Third Quarter 38
Slide 39: Reconciliation of Adjusted Gross Margin
Reconciliation of Third-quarter Fiscal 2024 Adjusted Gross Margin (Fiscal Years) *Table may not foot due to rounding General Mills Fiscal 2024 Third Quarter 39
Slide 40: Reconciliation of Adjusted Operating Profit Margin
Reconciliation of Third-quarter Fiscal 2024 Adjusted Operating Profit Margin (Fiscal Years) *Table may not foot due to rounding General Mills Fiscal 2024 Third Quarter 40
Slide 41: Reconciliation of Third-quarter Adjusted Tax Rate
Reconciliation of Third-quarter Fiscal 2024 Adjusted Tax Rate (Fiscal Years, $ in Millions except Per Share Data) *Table may not foot due to rounding a) Earnings before income taxes and after-tax earnings from joint ventures General Mills Fiscal 2024 Third Quarter 41
Slide 42: Reconciliation of Nine-month Adjusted Tax Rate
Reconciliation of Nine-month Fiscal 2024 Adjusted Tax Rate (Fiscal Years, $ in Millions except Per Share Data) *Table may not foot due to rounding a) Earnings before income taxes and after-tax earnings from joint ventures General Mills Fiscal 2024 Third Quarter 42