Slide 1: General Mills Fiscal 2017 Second Quarter Results
General Mills Fiscal 2017 Second Quarter Results December 20, 2016
Slide 2: A Reminder on Forward-Looking Statements
| A Reminder on 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 and uncertainties that c
Slide 3: Second Quarter Fiscal 2017 Summary
Second Quarter Fiscal 2017 Summary | Ken Powell Chairman and Chief Executive Officer
Slide 4: Solid Margin Expansion and EPS Growth
¢ Solid Margin Expansion and EPS Growth * Topline Performance Remains Challenging ¢ Updating Full-year Expectations: — Adjusted Diluted EPS* and Adjusted Operating Profit Margin* Unchanged — Organic Net Sales* and Total Segment Operating Profit* Lowered — Free Cash Flow* Increased ¢ Announced New Gl
Slide 5: Financial Review
Second Quarter Fiscal 2017 Financial Review Don Mulligan iat Ein ~IHel Fi
Slide 6: Financial Summary
Second Quarter Fiscal 2017 Financial Summary Constant- Organic currency $ % Change % Change* % Change* Net Sales $4,112 -7% -4% Segment Operating Profit* 830 -] Flat Net Earnings Attributable to 482 -9 General Mills Diluted EPS $0.80 -8 Certain Items Affecting Comparability 0.05 Adjusted Diluted EPS
Slide 7: Components of Net Sales Growth
Second Quarter Fiscal 2017 Components of Net Sales Growth -7 pts Organic Volume Organic Net Sales* | = -4% I 1 I +3 pts I I I I i] 1 Flat 1 1 1 1 I 1 1 I Organic t Foreign Acquisitions / Price & Mix | Exchange Divestitures -7% Total Net Sales As Reported *Non-GAAP measure. 7 k
Slide 8: U.S. Retail Segment
Second Quarter Fiscal 2017 U.S. Retail Segment Net Sales Growth Snacks +1% Cereal -3 Baking Products -7 CRUNCHY Yogurt -17 re Meals -17 hire aa Total U.S. Retail -9% Organic Growth* -6%
Slide 9: Convenience Stores & Foodservice Segment
Second Quarter Fiscal 2017 Convenience Stores & SDeRSamice eSounent Net Sales Growth 6 Focus Platforms +2% Other -10 Total CS&F -4% Organic Growth* -4%
Slide 10: International Segment
Second Quarter Fiscal 2017 _........InternationalSegment Segment Operating Profit: $106MM, Constant-currency Growth -18%* vs. LY Constant-currency Net Sales Growth by Region* = Hoge Dax : ’ Asia / Pacific Flat Latin America -2% { a air j Europe -3 Canada -7 Total International -3% Organic Growth* -1
Slide 11: Joint Venture Results
Second Quarter Fiscal 2017 Joint Venture Results Cereal Partners Worldwide Haagen-Dazs Japan Net Sales: +3%** Net Sales: +21** "Non-GAAP measure. See appendix forreconciliation. ™*Growth rates in constant currency.
Slide 12: Margin Results
Second Quarter Fiscal 2017 Margin Results Adjusted Gross Margin* Adjusted Operating Profit Margin* (% of Net Sales) (% of Net Sales) F16é * Cost Savings Offsetting 36.8% 19.6% Input Cost Inflation 18.0% * Expect 2% Inflation for Full Year F17 F16é F17 *Non-GAAP measures. See appendix for reconciliat
Slide 13: Other Income Statement Items
3 Second Quarter Fiscal 2017 Other Income Statement Items * Restructuring & Project-related Charges of $53MM Pretax (Includes $24MM in Cost of Sales) « Unallocated Corporate Expense Decreased Excluding Certain Items « Net Interest Expense 2% Above Last Year « Adjusted Effective Tax Rate 32.4% vs 32.
Slide 14: First Half Fiscal 2017 Financial Summary
First Half Fiscal 2017 Financial Summary ($ in Millions, Except per Share) Constant- Organic currency $ % Change %Change* % Change* Net Sales $8,020 -7% -A% Segment Operating Profit* 1,618 -3 -2% Net Earnings Attributable to General Mills 891 -7 Diluted EPS $1.47 -6 Certain Items Affecting Comparabi
Slide 15: Core Working Capital
Core Working Capital ($ in Millions) Q2 F17 F16 % Change Accounts Receivable $1,383 $1,461 Inventories 1,526 1,455 Accounts Payable 1,938 1,704 Total Core Working Capital $971 $1,212 -20%
Slide 16: First Half Fiscal 2017 Cash Flow Highlights
First Half Fiscal 2017 Cash Flow Highlights 1H Operating Cash Flow $1,156 F1é ($ in Millions) ¢ Fixed Asset Investment = $318MM $988 * Dividends Paid = $576MM « Net Share Repurchases = $1,273MM F17
Slide 17: New Global Organization Structure
3 New Global Organization Structure * Reorganizing Into Four Business Groups: — North America Retail — Europe & Australia - Asia & Latin America — Convenience Stores & Foodservice ¢ Anticipate Eliminating 400 to 600 Positions Worldwide * Estimate Savings of $70 to $90 Million by F18 ¢ Intend to Repo
Slide 18: Significant Progress Streamlining Structure and Driving Cost Savings
Significant Progress Streamlining Structure and Driving Cost Savings Since Fiscal 2015 COGS HMM Savings (F15-F17) * Cumulative COGS HMM Savings = $1.2B Announced Projects (F15-F18) Announced Projects Cost Savings * Announced Closure of 11 Plants (gin aitena™ s700 « ~5,000 Positions Impacted $500 — I
Slide 19: Excellent Visibility to 20% Adjusted Operating Profit Margin Target
Excellent Visibility to 20% Adjusted Operating Profit Margin* Target Adjusted Operating Profit Margin* (% of Net Sales) 20% 16.8% F1é F18 Target Drivers of Margin Expansion
Slide 20: Modestly Improved Organic Net Sales Trends
¢ Modestly Improved Organic Net Sales Trends* vs. First Half * Significant Adjusted Operating Profit Margin* Expansion * Double-digit Growth in Adjusted Diluted EPS* « Accelerated Free Cash Flow* Growth él *Non-GAAP measure. 20
Slide 21: Fiscal 2017 vs. Fiscal 2016 Guidance
(Fiscal 2017 vs. Fiscal 2016) Organic Net Sales* Total Segment Operating Profit* Adjusted Operating Profit Margin* Interest Expense Tax Rate Excluding Items* Avg. Diluted Shares Outstanding Adjusted Diluted EPS* Free Cash Flow Prior Guidance -2% to Flat +6 to 8%! +150bps Flat +100bps Down | to 2% +6
Slide 22: Operating Highlights
Second Quarter Fiscal 2017 Operating Highlights | Jeff Harmening
Slide 23: F17 Second Quarter Segment Performance
F17 Second Quarter Segment Performance ¢ U.S. Retail Net Sales Slowed, Margins Expanded Significantly * CS&F Focus Six Platforms Returned to Growth * International Results Comparable to Last Quarter
Slide 24: Update on U.S. Food and Beverage Retail Sales
Update on U.S. Food and Beverage Retail Sales Food and Beverage Retail Sales Growth (% vs. LY) 2.3% 2.0% 1.3% 11% | | / | / | / | / | | | / 0.7% | f / al Q2 Q3 Q4 al J | | / | / / , -0.6% F16 / FI7 Units: Flat 0.2% 0.1% 0.1% 0.4% -0.4% él Price: 2.0% 21% 1.4% 1.0% 0.3% 0.2% Source: Nielsen XAOC thro
Slide 25: U.S. Retail Segment Summary
U.S. Retail Segment Summary * Categories Decelerated in Q2 * Our Results in Five Largest Categories Fell Short of Expectations: - Cereal, Yogurt, Snack Bars, Refrigerated Dough, Soup * Good Results in Other Categories: - Old El Paso Mexican Foods, Totino’s Hot Snacks, Natural & Organic » ° Adding Ta
Slide 26: F17 Second Quarter U.S. Cereal Performance
F17 Second Quarter U.S. Cereal Performance * Q2 Retail Sales: -3% * Consumer First News Working — Gluten Free Cheerios; No Artificial hy OBE, _ , Ingredients; Taste Renovation * Lower Levels of Marketing Pressure Source: Nielsen XAOC through 11.26.16 26
Slide 27: F17 Second Half Cereal Initiatives
NO 3 F17 Second Half Cereal Initiatives "WHOLE 1s GRAINL | Che 110 conse CAND Seat Souwces 0 ND Aioes™ Adding Consumer Support Improving Merchandising Launching January 2017 Execution ar
Slide 28: F17 Second Quarter U.S. Yogurt Performance
F17 Second Quarter U.S. Yogurt Performance * Q2 Retail Sales: -18% * Light and Greek Varieties Represent Majority of Decline * Category Softness Driven by Reduced Merchandising Effectiveness and Less Product News * Annie's and Liberté Building Momentum in Organic J Source: Nielsen XAOC through 11.26
Slide 29: F17 Second Half Yogurt Initiatives
ives itiat F17 Second Half Yogurt In: Second Half News First Half News Build on Snacking Higher Protein Organic Varieties GREEK 100 Protein Indulgence Kid Renovation
Slide 30: F17 Second Half Snack Bar Initiatives
F17 Second Half Snack Bar Initiatives Fiber One ME Fibor a= * ne Layered Chewy Bars Ae [EARABAR FRUITS + GREEN 4+ GREEN
Slide 31: Expand New Shelf Set, Optimize Easter Support
Expand New Shelf Set, Optimize Easter Support Adding Media Support Behind Antibiotic-free Chicken 31 }
Slide 32: Building on What's Working in Meals
Building on What’s Working in Meals (F17 Q2 Retail Sales Growth) Old El Paso Totino’s Hot Snacks pals Source: Nielsen XAOC through 11.26.16
Slide 33: Building on What's Working: Annie's
Building on What’s Working: Annie’s Annie’s F17 Q2 Retail Sales Growth: +46% Annie’s Annie’s Established Business Category Expansion nang ® H °Cocoa Bunnies Oatmeal Raisin Bunny Pasta wit Yummy cheese” F17 Q2 Retail Sales: Yogurt, Cereal, Soup, +20% vs. LY Baked Goods, Grain Snacks Source: Nielsen X
Slide 34: Keys to U.S. Retail Improvement in F17 Second Half
Keys to U.S. Retail Improvement in F17 Second Half * Optimize Levels of Support on Five Largest Categories * Invest in What's Working - Natural & Organic, Old El Paso, Totino’s Hot Snacks * Solid New Product Line-up * Continue to Drive Margin Expansion 3
Slide 35: Convenience Stores & Foodservice Highlights
Convenience Stores & Foodservice Highlights ai ae. Improved Performance in Q2 + Focus 6 Net Sales: +2% * Yogurt and Cereal Leading Growth Expect Stronger 2H * Continued Growth from Focus 6 Platforms * Reduced Headwind from Flour Index Pricing
Slide 36: F17 Second Quarter International Developed Markets Performance
F17 Second Quarter International Developed Markets Performance * Good Performance on Old El Paso in Canada * Declines on Yoplait in Europe * Wholesome Snacks and Hdagen-Dazs Growing in Europe
Slide 37: F17 Second Half
7 kasi F17 Second Half * Old El Paso Innovation in Europe * Haagen-Dazs Stick Bar Expansion * Yoplait Innovation in Europe and Canada * Growing our Natural & Organic Business in Canada
Slide 38: F17 Second Quarter China
F17 Second Quarter China
Slide 39: F17 Second Half Emerging Market News
F17 Second Half _Emerging MarketNews sy China
Slide 40: Summary
Second Quarter Fiscal 2017 Summary * Disciplined Approach to Topline Investments ¢ Adding Targeted Support to Strengthen Second Half * Solid Margin Expansion and EPS Growth ¢ Updating Full-year Growth Expectations 3
Slide 41: A Reminder on Non-GAAP Measures
A Reminder on Our fiscal 2017 outlook for organic net sales growth, constant-currency total segment operating profit and adjusted diluted EPS, and adjusted operating profit margin are non-GAAP financial measures that exclude, or have otherwise been adjusted for, items impacting comparability, includ
Slide 42: Reconciliation of Organic Net Sales Growth
Reconciliation of Second Quarter Fiscal 2017 Organic Net SalesGrowth ~~ (Fiscal Year) Q2 2017 ' ' Reported Organic Organic | Organic Foreign Acquisitions &! Net Sales Volume __Price/Mix | Net Sales Exchange _Divestitures_! Growth U.S. Retail (10) pts Apts : (6)% = (3) pts ‘ (9) % International (3) p
Slide 43: Reconciliation of Total Segment Operating Profit
Reconciliation of Second Quarter Fiscal 2017 Q2 2017 2016 7% Change U.S. Retail $615.4 $600.4 2% International 105.9 136.2 (22) Convenience Stores and Foodservice 109.1 102.8 6 Total Segment Operating Profit $830.4 $839.4 (1)% Unallocated Corporate Items 19.0 7d (73) Divestitures loss (gain) 13.5 (1
Slide 44: Reconciliation of Fiscal 2017 Constant-currency Segment Operating Profit
Reconciliation of Fiscal 2017 Constant-currency (Fiscal Year) 2017 Percentage Change Percentage Change _ Impact of in Total Segment in Total Segment Foreign Operating Profit ona Operating Profit as Currency Constant-currency Reported Exchange Basis Q2 (1) % (1) pt Flat 1H (3) % (1) pt (2) % Certain
Slide 45: Reconciliation of Adjusted Diluted EPS
Reconciliation of Second Quarter Fiscal 2017 Adjusted Diluted EPS and Related (Fiscal Years) Q2 Per Share Data 2017 2016 Change Diluted earnings per share, as reported Ss 0.80 $ 0.87 (8) % Mark-to-market effects* (0.03) (0.01) Divestitures loss (gain)* 0.01 (0.14) Restructuring charges* 0.05 0.08 Pr
Slide 46: Reconciliation of International Net Sales Growth
Reconciliation of Second Quarter Fiscal 2017 (Fiscal Year) Q2 2017 Impact of Percentage Change Foreign Percentage Change in in Net Sales Currency Net Sales ona as Reported Exchange _ Constant-currency Basis Europe (7) % (4) pts (3) % Canada (8) (1) (7) Asia/Pacific (3) (3) Flat Latin America 2 4 (2)
Slide 47: Reconciliation of Constant-currency International Segment Operating Profit Growth
Reconciliation of Second Quarter Fiscal 2017 Constant-currency International Segment Operating Profit Growth (Fiscal Year) 2017 Percentage Change _ Impact of Percentage Change in in International Foreign International Segment Segment Operating Currency Operating Profit ona Profit as Reported Exchang
Slide 48: Reconciliation of Second Quarter Constant-currency After-tax JV Earnings
Reconciliation of Second Quarter Constant-currency After-tax JV Earnings (Fiscal Year) Q2 Percentage Change in Impact of Percentage Change in After-tax Earnings from Foreign After-tax Earnings from Joint Joint Ventures Currency Ventures on a Constant- as Reported Exchange currency Basis FI7 28% 1 pt
Slide 49: Reconciliation of Adjusted Gross Margin
Reconciliation of Second Quarter Fiscal 2017 (Fiscal Years) Q2 2017 2016 7% of 7% of Net Sales Net Sales Gross margin as reported 37.0% 34.8% Mark-to-market effects (0.7) (0.2) Restructuring charges 0.3 0.5 Project-related costs 0.2 0.4 Adjusted gross margin 36.8% 35.5% 49
Slide 50: Reconciliation of Adjusted Operating Profit Margin
Reconciliation of Second Quarter Fiscal 2017 (Fiscal Years) Q2 2017 2016 Te of 7 of Net Sales Net Sales Operating profit as reported 18.7% 20.5% Mark-to-market effects (0.7) (0.2) Restructuring charges 1.0 12 Divestitures loss (gain) 0.3 (4.5) Project-related costs 0.3 0.3 Adjusted operating profit
Slide 51: Reconciliation of Tax Rate Excluding Items
Reconciliation of Second Quarter Fiscal 2017 Tax Rate Excluding Items (Fiscal Years, $ in Millions) Q2 2017 2016 Pretax Income Pretax Income Earnings* Taxes Earnings* Taxes As reported $693 $227 $832 $312 Mark-to-market effects (29) (11) (8) (3) | Restructuring charges 42 12 83 30 | Divestitures los
Slide 52: Reconciliation of Fiscal 2016 Tax Rate Excluding Items
Reconciliation of Fiscal 2016 Tax Rate Excluding Items (Fiscal Year, $ in Millions) Full Year 2016 Pretax Income Earnings* Taxes As reported $2,404 $755 Mark-to-market effects (63) (23) Restructuring charges 230 69 Divestitures(gain) (148) (82) Project-related costs 58 21 As adjusted $2,480 $740 Eff
Slide 53: Reconciliation of First Half Fiscal 2017 Organic Net Sales Growth
Reconciliation of First Half Fiscal 2017 Organic Net Sales Growth oo (Fiscal Year) 1H 2017 ' ' Reported Organic Organic | Organic Foreign Acquisitions &! Net Sales Volume _Price/Mix | Net Sales Exchange __Divestitures_! Growth U.S. Retail (9) pts 4pts ' (5)% = (3) pts ‘ (8) % International (3) pts 2
Slide 54: Reconciliation of First Half Fiscal 2017 Segment Operating Profit
Reconciliation of First Half Fiscal 2017 (Fiscal Years, $ in Millions) 1H 2017 2016 7. Change U.S. Retail $1,209.8 = $1,230.1 (2)% International 205.9 2532 (19) Convenience Stores and Foodservice 201.8 182.6 im Total Segment Operating Profit $1,617.5 = $1,665.9 (3)% Unallocated Corporate Items 101.4
Slide 55: Reconciliation of First Half Fiscal 2017 Adjusted Diluted EPS
3 Reconciliation of First Half Fiscal 2017 Adjusted Diluted EPS and Related (Fiscal Years) 1H Per Share Data 2017 2016 Change Diluted earnings per share, as reported Ss 1.47 § 1.56 (6) % Mark-to-market effects* (0.01) (0.01) Divestitures loss (gain)* 0.01 (0.14) Restructuring charges* 0.13 0.17 Proj
Slide 56: Reconciliation of First Half Fiscal 2017 Tax Rate Excluding Items
Reconciliation of First Half Fiscal 2017 Tax Rate Excluding Items (Fiscal Years, $ in Millions) 1H 2017 2016 Pretax Income Pretax Income Earnings* Taxes Earnings* Taxes As reported $1,265 $404 $1,440 $510 Mark-to-market effects (13) (5) (10) (4) | Restructuring charges 114 36 165 54 | Divestitures l
Slide 57: Reconciliation of Full Year Fiscal 2016 Adjusted Operating Profit Margin
Reconciliation of Full Year Fiscal 2016 Adjusted Operating Profit Margin (Fiscal Year) Full Year 2016 7 of Net Sales Operating profit as reported 16.3 % Mark-to-market effects (0.4) Divestitures (gain) (0.9) Restructuring charges 1.4 Project-related costs 0.4 Adjusted operating profit margin 16.8 %