General Mills, Inc. · NYSE:GIS
General Mills — Q1 2025 Earnings Presentation
40 slides from General Mills's earnings presentation, Sep 18, 2024
Slide 1: Fiscal 2025 Q1 Earnings
Fiscal 2025 Q1 Earnings September 18, 2024 General Mills First-quarter Fiscal 2025 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: Jeff Harmening, Chairman and Chief Executive Officer
Jeff Harmening Chairman and Chief Executive Officer General Mills First-quarter Fiscal 2025 3
Slide 4: Today's Key Messages
Today’s Key Messages • Progress on Competitiveness, with Improvement in Volume, Net Sales, and Market Share Trends in Q1 • Progress on Portfolio Reshaping, with Announcement of North America Yogurt Divestiture • Progress on Financial Targets; Reaffirming Full-year F25 Outlook General Mills First-qua
Slide 5: North America Yogurt Divestiture – Reshaping Our Portfolio for Growth
North America Yogurt Divestiture – Reshaping Our Portfolio for Growth • Aligned with Accelerate Strategy Acquisitions • Increases Topline Growth and Margin Profile of Remaining Portfolio ~30% • Sharpens Focus on Global Platforms and Local Gem Brands Divestitures • Nearly 30% of Net Sales Base Turned
Slide 6: North America Yogurt Divestiture – Financial Summary
North America Yogurt Divestiture – Financial Summary • Definitive agreements to sell North America Yogurt business to Lactalis and Sodiaal, two leading French dairy companies, for an aggregate $2.1B in cash • Proposed transactions expected to close in calendar 20251 • North American Yogurt business
Slide 7: First-quarter Fiscal 2025 Performance
First-quarter Fiscal 2025 Performance Organic Net Adjusted Op. Adjusted Diluted Volume Sales Growth¹ Profit Growth² EPS Growth² Flat -1% -4% -2% • Sequential improvement from F24 Q4 performance trends • Consistent with expectations for Q1 results to be below full-year F25 growth targets, reflecting
Slide 8: An Evolving Environment in Fiscal 2025
An Evolving Environment in Fiscal 2025 Value-seeking Behaviors Continued Inflation Supply Chain Stabilization General Mills First-quarter Fiscal 2025 8
Slide 9: Advancing Our Fiscal 2025 Priorities
Advancing Our Fiscal 2025 Priorities Accelerate Improve Competitiveness by 1 Organic Sales Delivering Remarkable Experiences Across Our Portfolio Generate HMM Cost Savings to Create Fuel 2 for Investment Offset Inflation and Accelerate Brand Investment Drive Strong Continue Robust Cash Conversion 3
Slide 10: Creating Remarkable Experiences
F25 Priority 1 Creating Remarkable Experiences Superior Package Brand Omnichannel Compelling Product Design Communication Execution Value Consumers’ Brand of Choice General Mills First-quarter Fiscal 2025 10
Slide 11: Delivering Remarkable Experiences Across Our Portfolio
F25 Priority 1 Delivering Remarkable Experiences Across Our Portfolio Product News and Remarkable Brand Compelling Value Innovation Communication General Mills First-quarter Fiscal 2025 11
Slide 12: Improved Competitiveness in North America Retail and Foodservice in Q1
1 Improved Competitiveness in North America Retail and F25 Priority North America Foodservice in Q1 Strengthened Market Share in Continued Growth in N.A. North America Retail Foodservice Channels • Share Trend Improvement vs. F24 • Drove Market Share Growth in Across Six of Top 10 U.S. Categories K-
Slide 13: Improved Competitiveness in North America Pet and International in Q1
1 Improved Competitiveness in North America Pet and F25 Priority International in Q1 Improved Market Share Trends International Stabilizing, Across North America Pet China Remains Challenged • Grew Share in Dry Feeding (~60% of • Share Growth in Europe & Australia Blue Buffalo Net Sales) • Encouragi
Slide 14: Create Fuel for Investment
F25 Priority 2 Create Fuel for Investment Advantaged Insights Elevated HMM Delivery in F25 General Mills HMM Cost Savings as % of COGS Leveraging our Digital Infrastructure to: • Manage Supply Chain Complexity 6% 4-5% Long-term trend • Reduce Finished Goods Waste 4% • Enable End-to-end Analytics 3%
Slide 15: Drive Strong Cash Generation
F25 Priority 3 Drive Strong Cash Generation Priorities Fiscal 2025 Plans CAPEX ~3.5% of Net Sales Dividend Growth 2% Dividend Increase as of Aug. 1, 2024 M&A Near-term Focus on Bolt-on Acquisitions Share Repurchases ~3% Reduction to Average Diluted Shares General Mills First-quarter Fiscal 2025 15
Slide 16: Reaffirming Fiscal 2025 Financial Outlook
Reaffirming Fiscal 2025 Financial Outlook Key Financial Metrics¹ F25 Outlook Organic Net Sales Growth Flat to +1% Adjusted Operating Profit Growth² -2% to Flat Adjusted Diluted EPS Growth² -1 to +1% Free Cash Flow Conversion 95%+ (1) Non-GAAP measures (2) Growth rates in constant currency. Non-GAAP
Slide 17: Kofi Bruce, Chief Financial Officer
Kofi Bruce Chief Financial Officer General Mills First-quarter Fiscal 2025 17
Slide 18: First-quarter Fiscal 2025 Financial Results
First-quarter Fiscal 2025 Financial Results Q1 Total General Mills $MM vs. LY Net Sales $4,848 -1% Organic Net Sales1 -1% Adjusted Operating Profit1 $865 -4%2 Adjusted Diluted EPS1 $1.07 -2%2 (1) Non-GAAP measures. See appendix for reconciliation (2) Growth rates in constant currency. Non-GAAP mea
Slide 19: Components of First-quarter Net Sales Growth
Components of First-quarter Net Sales Growth -1% Organic Net Sales1 Flat Flat Flat -1 pt -1% Organic Organic Foreign Acquisitions & Total Net Sales Volume Price / Mix Exchange Divestitures as Reported (1) Non-GAAP measure General Mills First-quarter Fiscal 2025 19
Slide 20: First-quarter Fiscal 2025 North America Retail
First-quarter Fiscal 2025 North America Retail North America Retail Q1 • Q1 net sales results driven by declines in U.S. Snacks and U.S. Morning Foods, partially offset by growth in Organic Net Sales¹ -2% Canada. U.S. Meals & Baking Solutions net sales were Segment Op. Profit² -6% flat vs. LY • Impr
Slide 21: First-quarter Fiscal 2025 North America Pet
First-quarter Fiscal 2025 North America Pet North America Pet Q1 • Q1 net sales results included -MSD% decline on treats and -LSD% decline on wet food, with dry food flat vs. LY Organic Net Sales¹ -1% Segment Op. Profit² +7% • Drove sequential improvement in retail sales and market share trends vs.
Slide 22: First-quarter Fiscal 2025 North America Foodservice
First-quarter Fiscal 2025 North America Foodservice • Q1 net sales results reflect growth on breads, snacks, North America Foodservice Q1 biscuits, and baking mixes, offset by declines on Organic Net Sales¹ Flat bakery flour and pizza crust Segment Op. Profit² +21% • Strong market share gains in K-1
Slide 23: First-quarter Fiscal 2025 International
First-quarter Fiscal 2025 International International Q1 • Q1 net sales decline driven by China, partially offset by growth in Europe & Australia and Distributor Organic Net Sales¹ -1% markets Segment Op. Profit² -64% • Reported results include Edgard & Cooper, a European natural pet food brand acqu
Slide 24: First-quarter Fiscal 2025 Joint Ventures
First-quarter Fiscal 2025 Joint Ventures Q1 AFTER-TAX JV EARNINGS: $19MM, -14%¹ vs. LY Net Sales² Q1 • Q1 CPW net sales growth led by Latin America Cereal Partners Worldwide +1% • Q1 HDJ net sales reflect growth on core cup and Häagen-Dazs Japan Flat handheld formats, offset by lower new product sal
Slide 25: First-quarter Fiscal 2025 Margin Results
First-quarter Fiscal 2025 Margin Results Adjusted Gross Margin1 Adjusted Operating Profit Margin1 (% of Net Sales) (% of Net Sales) 35.4% 35.4% 18.3% 17.8% F24 Q1 F25 Q1 F24 Q1 F25 Q1 • Q1 Adj. Gross Margin flat vs. LY, with benefits from strong HMM cost savings offset by input cost inflation and un
Slide 26: First-quarter Fiscal 2025 Other Income Statement Items
First-quarter Fiscal 2025 Other Income Statement Items • Adjusted Unallocated Corporate Expenses Decreased $27MM vs. LY • Net Interest Expense Increased $7MM vs. LY • Adjusted Effective Tax Rate 21.9%, +80bps vs. LY¹ • Average Diluted Shares Outstanding -5% vs. LY (1) Non-GAAP measure. See appendix
Slide 27: First-quarter Fiscal 2025 Balance Sheet and Cash Flow
First-quarter Fiscal 2025 Balance Sheet and Cash Flow Operating Cash Flow ($ in Millions) Capital Investments $624 = $140MM $378 Dividends Paid = $338MM Net Share Repurchases F24 Q1 F25 Q1 = $291MM General Mills First-quarter Fiscal 2025 27
Slide 28: Reaffirming Fiscal 2025 Financial Outlook
Reaffirming Fiscal 2025 Financial Outlook Key Financial Metrics¹ F25 Outlook Organic Net Sales Growth Flat to +1% Adjusted Operating Profit Growth² -2% to Flat Adjusted Diluted EPS Growth² -1 to +1% Free Cash Flow Conversion 95%+ (1) Non-GAAP measures (2) Growth rates in constant currency. Non-GAAP
Slide 29: Today's Key Messages
Today’s Key Messages • Progress on Competitiveness, with Improvement in Volume, Net Sales, and Market Share Trends in Q1 • Progress on Portfolio Reshaping, with Announcement of North America Yogurt Divestiture • Progress on Financial Targets; Reaffirming Full-year F25 Outlook General Mills First-qua
Slide 30: A Reminder on Non-GAAP Guidance
A Reminder on Non-GAAP Guidance Our fiscal 2025 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 31: Appendix: North America Retail Operating Unit Results
Appendix: First-quarter Fiscal 2025 North America Retail Operating Unit Results Net Sales % vs. LY Operating Unit Q1 U.S. Snacks -5% U.S. Morning Foods -3% U.S. Meals & Baking Solutions Flat Canada +3% Canada Constant-currency¹ +6% (1) Net sales growth in constant currency. Non-GAAP measure. See app
Slide 32: Reconciliation of Canada Operating Unit Constant-currency Net Sales Growth
Reconciliation of First-quarter Fiscal 2025 Canada Operating Unit Constant-currency Net Sales Growth *Table may not foot due to rounding General Mills First-quarter Fiscal 2025 32
Slide 33: Reconciliation of Organic Net Sales Growth
Reconciliation of First-quarter Fiscal 2025 Organic Net Sales Growth *Table may not foot due to rounding General Mills First-quarter Fiscal 2025 33
Slide 34: Reconciliation of Adj. Operating Profit and Constant-currency Growth Rate
Reconciliation of First-quarter Fiscal 2025 Adj. Operating Profit and Related Constant-currency Growth Rate ($ in Millions) *Table may not foot due to rounding General Mills First-quarter Fiscal 2025 34
Slide 35: Reconciliation of Adjusted Diluted EPS and Constant-currency Growth Rate
Reconciliation of First-quarter Fiscal 2025 Adjusted Diluted EPS and Related Constant-currency Growth Rate * Table may not food due to rounding ** See reconciliation of tax rate items for tax impact of individual items General Mills First-quarter Fiscal 2025 35
Slide 36: Reconciliation of Constant-currency Segment Operating Profit Growth
Reconciliation of First-quarter Fiscal 2025 Constant-currency Segment Operating Profit Growth *Table may not foot due to rounding General Mills First-quarter Fiscal 2025 36
Slide 37: Reconciliation of Constant-currency After-tax Earnings from Joint Ventures Growth
Reconciliation of First-quarter Fiscal 2025 Constant-currency After-tax Earnings from Joint Ventures Growth Rate *Table may not foot due to rounding General Mills First-quarter Fiscal 2025 37
Slide 38: Reconciliation of Adjusted Gross Margin
Reconciliation of First-quarter Fiscal 2025 Adjusted Gross Margin *Table may not foot due to rounding General Mills First-quarter Fiscal 2025 38
Slide 39: Reconciliation of Adjusted Operating Profit Margin
Reconciliation of First-quarter Fiscal 2025 Adjusted Operating Profit Margin *Table may not foot due to rounding General Mills First-quarter Fiscal 2025 39
Slide 40: Reconciliation of Adjusted Tax Rate
Reconciliation of First-quarter Fiscal 2025 Adjusted Tax Rate ($ 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 First-quarter Fiscal 2025 40