General Mills, Inc. · NYSE:GIS
General Mills — FY2015 Earnings Presentation
55 slides from General Mills's earnings presentation, Jul 1, 2015
Slide 1: General Mills Fiscal 2015 Review & 2016 Outlook
General Mills Fiscal 2015 Review & 2016 Outlook
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: Don Mulligan, Executive Vice President; Chief Financial Officer
Don Mulligan Executive Vice President; Chief Financial Officer
Slide 4: Fiscal 2015 Summary
Fiscal 2015 Summary « Mixed Performance Across Segments — Convenience Stores & Foodservice: Record Profit — International: Margin Expansion and Profit Growth in Constant Currency — U.S. Retail: Sales and Profit Results Below Last Year * Consumer-first Efforts Strengthened Performance in Second Half
Slide 5: Fourth Quarter Fiscal 2015 Financial Summary
Fourth Quarter Fiscal 2015 Financial Summary ($ in Millions, Except per Share) Constant- currency _S_ % Change Z Change* Net Sales $4,299 Flat +6% Segment Operating Profit* 800 +9% +18 Net Earnings Attributable to General Mills 187 -54 Diluted EPS $0.30 -54 Certain Items Affecting Comparability A5 A
Slide 6: Full Year Fiscal 2015 Financial Summary
Full Year Fiscal 2015 Financial Summary ($ in Millions, Except per Share) Constant- currency _S_ % Change Z Change* Net Sales $17,630 -2% +1% Segment Operating Profit* 31035 -4 -2 Net Earnings Attributable to General Mills 1,221 -33 Diluted EPS $1.97 -30 Certain Items Affecting Comparability 89 Adju
Slide 7: Fourth Quarter Fiscal 2015 Components of Net Sales Growth
Fourth Quarter Fiscal 2015 Components of Net Sales Growth (As Reported) +3pts +3pts Flat T 1 -6pts Price & Foreign Total Volume Mix Exchange Net Sales — (Fut Year: -Ipts +2pts -3pts -2pts 7989-7
Slide 8: Fiscal 2015 U.S. Retail Segment Net Sales Growth
Fiscal 2015 U.S. Retail Segment Net Sales Growth —_ Full Hil = =@3 Q4 | Year Snacks +3% +14% | +8% | +7% Yogurt +] +10 +9 +5 Cereal -7 Flat +3 -3 Meals -8 -2 +6 -4 Baking Products -6 -9 -2 -6 Total U.S. Retail 4% +1% | +5% | -1% 7989-8
Slide 9: U.S. Retail — Share Growth in Many Key Categories
U.S. Retail — Share Growth in Many Key Categories Fiscal 2015 Dollar Share Change Share vs. LY (bps) Grain Snacks 42.8% +168 Frozen Hot Snacks 25:8 +97 Yogurt 24.9 +88 RTE Cereal 31.3 +26 Frozen Pizza 9.4 +23 Refrig. Baked Goods 70.1 +16 RTS Soup 39.3 -28 Mexican Products* 16.8 -5] Fruit Snacks 46.4
Slide 10: Fiscal 2015 Convenience Stores & Foodservice Segment
Fiscal 2015 Convenience Stores & Foodservice Segment Net Sales Growth Q4 FI5 6 Focus Platforms +8% +9% Other Flat Flat Total CS&F +4% +4% 7989-10
Slide 11: Fiscal 2015 International Segment
Fiscal 2015 International Segment Constant-currency Net Sales Growth* Q4 FS Latin America +13% +17% Asia / Pacific +13 +5 Europe +7 +5 Canada +6 Flat Total International +9% +6% *Non-GAAP measure. See appendix for reconciliation. 7989-11
Slide 12: Adjusted Gross Margin Results
Adjusted Gross Margin* Results Q4 Fiscal Year 35.0% 35.7% 35.4% 34.7% +* Volume Deleverage Drove Annual Adjusted Gross Margin Decline ¢ Annual Input Cost Inflation was 2% F14 F15 F14 F1I5 *Non-GAAP measure. See appendix for reconciliation. 7989-12
Slide 13: Fiscal 2015 Segment Operating Profit
Fiscal 2015 Segment Operating Profit ($ in Millions) Constant- currency $ % Change % Change* Total Segment Operating Profit* $3,035 -4% -2% U.S. Retail 2,159 -7 International 523 -2 +9 Convenience Stores & Foodservice 353 +15 *Non-GAAP measure. See appendix for reconciliation. 7989-13
Slide 14: Fiscal 2015 Joint Venture Results
Fiscal 2015 Joint Venture Results F15 Constant-currency Net Sales Trend JV Earnings After Tax ($ in Millions, As Reported) $70 $84 CPW -2% HDJ +6% F14 F15 ¢ F15 Constant-currency JV Earnings After Tax Flat to Last Year 7989-14
Slide 15: Fiscal 2015 Other Income Statement Items
Fiscal 2015 Other Income Statement Items * Q4 Green Giant Intangible Asset Impairment of $260MM* * Restructuring & Project-related Costs of $357MM* Pretax (Includes $73MM in Cost of Sales) ¢ Unallocated Corporate Expense Decreased Excluding Certain Items « Interest Exoense $13MM Above Last Year * Q4
Slide 16: Core Working Capital
Core Working Capital ($ in Millions) Annual F15 F14 % Change Accounts Receivable $1,387 $1,484 Inventories 1,541 1,559 Accounts Payable 1,684 1,611 Total Core Working Capital: $1,244 $1,432 -13% 7989-16
Slide 17: Fiscal 2015 Cash Flow Highlights
Fiscal 2015 Cash Flow Highlights Operating Cash Flow Uses of Cash ($ in Millions) ¢ Fixed Asset Investment = $2,541 $2,543 $712MM * Dividends Paid = $1,018MM ¢ Share Repurchases = $1,162MM 7989-17
Slide 18: A Strong Track Record of Returning Cash to Shareholders
A Strong Track Record of Returning Cash to Shareholders Average Diluted Dividends per Share Shares Outstanding (Shares in Millions) CGR=+11% _ CGR = -2% . J $4.55 al 67 $1.12 $1.22 — il) lll F11 F12 $10B Cash Returned to Shareholders in Past Five Years 7989-18
Slide 19: Cost Savings Projects Update
Cost Savings Projects Update ¢ Project Century, Project Catalyst, and Policies & Practices Update: Accelerated Savings in Fiscal 2015; Maintaining Fiscal 2017 Savings Targets ¢ Project Compass: Streamlining International Organization Structure - Announced June 25h — One-time Charges $57-$62MM — $25-
Slide 20: Fixed Asset Investment
Fixed Asset Investment ($ in Millions) $840 $712 Project Century Project Century F16 Plan
Slide 21: Fiscal 2016 Guidance Summary
Fiscal 2016 Guidance Summary ($ in Millions, Except per Share) Fiscal Fiscal 2016 2015 (53wks) Growth (52wks) Net Sales $17,630 Flat! Adjusted Gross Margin* 34.7% Higher Media Expense $823 Down Slightly Total Segment Operating Profit* $3,035 +LSD' Interest Expense $315 -MSD Tax Rate Excluding Items*
Slide 22: Ken Powell, Chairman and CEO
Ken Powell Chairman and CEO
Slide 23: U.S. Retail Fiscal 2016 Priorities
U.S. Retail Fiscal 2016 Priorities * Grow Cereal ¢ Accelerate Yogurt and Snacks ¢ Drive Double-digit Growth on Natural & Organic Deliver Consumer-first Value on Key Brands
Slide 24: Leading U.S. Cereal Category Performance
Leading U.S. Cereal Category Performance General Mills RTE Cereal Dollar Market Share 31.3 FO7 FO8 FO? F10 Fll F12 F13 F14 F15 WS Sources: FO7-F09 Nielsen All Outlet; F10-F15 Nielsen XAOC 7989-2
Slide 25: U.S. Cereal Gluten Free News
U.S. Cereal Gluten Free News First Half Fiscal 2016 ¢ Same Oats as GF Cheerios ¢ No Reformulation 7989-25
Slide 26: U.S. Cereal Color & Flavor Renovation
U.S. Cereal Color & Flavor Renovation a Chocobate , oS poe ea y £ ao maids Eotoa | /LCK&- Sarr heer & hy : Cheeri¢ puits olden Cheerios cheerios =~? o sant mr a, Granams te Say ye oe = BMS as ° 2 iol ¢ 75% of Portfolio by January 2016 ¢ All General Mills Cereals by Calendar 2017 7989-26
Slide 27: U.S. Cereal Fiscal 2016 First Half Innovation
U.S. Cereal Fiscal 2016 First Half Innovation Granola Bites Muesli Oatmeal AAT TRL We 7989-27
Slide 28: Strong U.S. Yogurt Results in Fiscal 2015
Strong U.S. Yogurt Results in Fiscal 2015 Yoplait Retail Dollar Sales (% Change vs LY) 7% Source: NielsenXAOC = 7989-28
Slide 29: U.S. Yogurt Fiscal 2016 Growth Plans
U.S. Yogurt Fiscal 2016 Growth Plans Original Style Renovation Greek Innovation 7989-29
Slide 30: Leading U.S. Grain Snacks Growth
Leading U.S. Grain Snacks Growth General Mills Grain Snacks Dollar Share 41.1 42.8 t ¥ ‘ UT CRISP ea aig NUT CRISP FI5 Sources: F08 Nielsen All Outlet; F14-F15 Nielsen XAOC = 7759-50
Slide 31: U.S. Grain Snacks Fiscal 2016 Growth Plans
U.S. Grain Snacks Fiscal 2016 Growth Plans Renovation Innovation FIBER és CRUNCHY a; ne _ eee. 57 Cheesecake A 7989-31
Slide 32: Natural & Organic Finished Fiscal 2015 With Strong Momentum
Natural & Organic Finished Fiscal 2015 With Strong Momentum (Net Sales, $ in Millions) Q4 Q4 Fl4 FI5S Annie’s +++ Cascadian Farm + Larabar + Food Should Taste Good + Zrcopan | uml [eo = Muir Glen + Mountain High + Immaculate - Liberté + Tt N/O Portfolio $102 $198 9am | Includes Net Sales in U.S. Ret
Slide 33: Drive Double-digit Growth in Natural & Organic in Fiscal 2016
Drive Double-digit Growth in Natural & Organic in Fiscal 2016 Core Distribution Growth Soup Innovation 7989-33
Slide 34: Deliver Consumer-first Value on Key Brands
Deliver Consumer-first Value on Key Brands Betti eS Cioche A" 7989-34
Slide 35: Continued Strong Convenience Stores & Foodservice Growth
Continued Strong Convenience Stores & Foodservice Growth in Fiscal 2015 ($ in Millions) Focus 6 Platform Net Sales Seqment Operating Profit CGR = +5% —_ | CGR=+11% ——7 $353 $307 7 F15 FO8 F14 F15 Profit Margin: 8.6% 16.0% 17.7% 7989-35
Slide 36: Convenience Stores & Foodservice 2016 Product News
Convenience Stores & Foodservice 2016 Product News Cereal Yogurt OND cence ND Sericin sources ND Ais Frozen Breakfast 7989-36
Slide 37: International Segment
International Segment (Net Sales, Fiscal 2015) |) Developed Markets 63% © Emerging Markets 37% 7989-37
Slide 38: International Developed Markets Fiscal 2016 Growth Plans
International Developed Markets Fiscal 2016 Growth Plans Convenient Meals Haagen-Dazs ep | % 7989-38
Slide 39: International Emerging Markets Fiscal 2016 Growth Plans
International Emerging Markets Fiscal 2016 Growth Plans Brazil 7989-39
Slide 40: CPW Reaches a Milestone
CPW Reaches a Milestone 29 YEARS 1990-2015 Gest
Slide 41: CPW Consumer-first Innovation
CPW Consumer-first Innovation Gluten Free Simplicity Convenience 7989-41
Slide 42: General Mills Fiscal 2016 Summary
General Mills Fiscal 2016 Summary ¢« Expanding Our Consumer-first Focus to Generate Growth ¢ Investing In Core Renovation and Incremental Innovation ¢ Disciplined Cost Management Continued Emphasis on Shareholder Returns
Slide 43: Reconciliation of Fourth Quarter Constant-currency Net Sales Growth
Reconciliation of Fourth Quarter Constant-currency Net Sales Growth Europe Canada Asia/Pacific Latin America Total International Total Net Sales (Fiscal Year) Q4 2015 % Change in % Change in Net Sales Net Sales Impact of Foreign on a Constant- as Reported Currency Exchange currency Basis -12% -19 pt
Slide 44: Reconciliation of Full Year Constant-currency Net Sales Growth
Reconciliation of Full Year Constant-currency Net Sales Growth (Fiscal Year) Full Year 2015 % Change in % Change in Net Sales Net Sales Impact of Foreign on a Constant- as Reported Currency Exchange currency Basis Europe -3% -8 pts 5% Canada -8 -8 Flat Asia/Pacific 4 -] 5 Latin America -14 -31 17 To
Slide 45: Reconciliation of Fourth Quarter Total Segment Operating Profit
Reconciliation of Fourth Quarter Total Segment Operating Profit (Fiscal Years, $ in Millions) U.S. Retail International Convenience Stores & Foodservice Total Segment Operating Profit Unallocated Corporate Items Divestiture (gain) Restructuring, Impairment, and Other Exit Costs Operating Profit Q4 2
Slide 46: Reconciliation of Full Year Total Segment Operating Profit
Reconciliation of Full Year Total Segment Operating Profit (Fiscal Years, $ in Millions) Full Year 2015 2014 U.S. Retail $2,159 $2,312 International 523 535 Convenience Stores & Foodservice 353 307 Total Segment Operating Profit $3,035 $3,154 Unallocated Corporate Items 414 258 Divestiture (gain) --
Slide 47: Reconciliation of Fourth Quarter Constant-currency Segment Operating Profit Growth
Reconciliation of Fourth Quarter Constant-currency Total Segment Operating Profit Growth (Fiscal Year) Q4 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 P
Slide 48: Reconciliation of Full Year Constant-currency Segment Operating Profit Growth
Reconciliation of Full Year Constant-currency Total Segment Operating Profit Growth (Fiscal Year) Full Year 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
Slide 49: Reconciliation of Fourth Quarter Adjusted Diluted EPS
Reconciliation of Fourth Quarter Adjusted Diluted EPS and Related Constant-currency Growth Rate (Fiscal Years) Diluted EPS Mark-to-market Effects Intangible Asset Impairment Tax Item Divestiture (gain) Restructuring Costs Project-related Costs Venezuela Currency Devaluation Acquisition Integration C
Slide 50: Reconciliation of Full Year Adjusted Diluted EPS
Reconciliation of Full Year Adjusted Diluted EPS and Related Constant-currency Growth Rate (Fiscal Years) Full Year 2015 2014 Change Diluted EPS $1.97 $2.83 -30% Mark-to-market Effects 09 (.05) Intangible Asset Impairment .28 -- Tax Item ld -- Divestiture (gain) -- (.06) Restructuring Costs 85 01 Pr
Slide 51: Reconciliation of Full Year Constant-currency International Segment Operating Profit
Reconciliation of Full Year Constant-currency International Segment Operating Profit Growth (Fiscal Year) Full Year 2015 % Change in % Change in Segment Segment Operating Profit Operating Profit Impact of Foreign on a Constant- as Reported Currency Exchange currency Basis International Segment Opera
Slide 52: Reconciliation of Fourth Quarter Adjusted Gross Margin
Reconciliation of Fourth Quarter Adjusted Gross Margin (Fiscal Years, $ in Millions) 2015 2014 To of % of $ Net Sales $ Net Sales Net Sales $4,299 $4,284 Gross Margin as Reported 1,516 35.3% 1,482 34.6% Mark-to-market Effects (8) (6) Restructuring Charges 19 -- Project-related Costs 10 -- Venezuela
Slide 53: Reconciliation of Full Year Adjusted Gross Margin
Reconciliation of Full Year Adjusted Gross Margin (Fiscal Years, $ in Millions) 2015 2014 To of % of $ Net Sales $ Net Sales Net Sales $17,630 $17,910 Gross Margin as Reported 5,949 33.7% 6,370 35.6% Mark-to-market Effects 90 (48) Restructuring Charges 60 -- Project-related Costs 13 -- Venezuela Cur
Slide 54: Reconciliation of Full Year Constant-currency JV Earnings After Tax
Reconciliation of Full Year Constant-currency JV Earnings After Tax (Fiscal Year) Full Year 2015 % Change in % Change in After-tax Earnings After-tax Earnings From Joint Ventures From Joint Ventures Impact of Foreign on a Constant- as Reported Currency Exchange currency Basis Total Joint Ventures -6
Slide 55: Reconciliation of Tax Rate Excluding Items
Reconciliation of Tax Rate Excluding Items (Fiscal Years, $ in Millions) 2015 2014 Pre-tax Income Pre-tax Income Earnings* Taxes Earnings* Taxes As Reported $1,762 $587 $2,655 $883 Mark-to-market effects 90 83 (48) (18) Restructuring Charges 344 126 4 -- Project-related Costs 13 5 -- -- Venezuela Cu