General Mills, Inc. · NYSE:GIS
General Mills — Investor Day (July 2019)
56 slides from General Mills's investor day presentation, Jul 9, 2019
Slide 1: Fiscal 2020 Investor Day
Fiscal 2020 Investor Day July 9, 2019 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 Fiscal 2020 Investor Day July 9, 2019 3
Slide 4: Our Consumers Are at the Heart of Everything We Do
Our Consumers Are at the Heart of Everything We Do Our Purpose Our Goal Create market-leading growth to deliver top-tier shareholder returns Our Strategy Consumer First: Deeply understand the needs and lives of our consumers and respond quickly to give them what they want 4
Slide 5: Our Portfolio Today
Our Portfolio Today FISCAL 2019 NET SALES: $16.9 BILLION Pet Yogurt Cereal Asia & Latin 8% 15% 12% America 10% Pet Food 8% Regional Europe & 11% By By Snacks Australia Segment Platform and Meals 59% North 12% America “Accelerate” 25% Convenience Retail Snack Bars Stores & Ice Cream Foodservice Mexic
Slide 6: Eight $1B Brands Competing Around the World
Eight $1B Brands Competing Around the World Brands with $1B+ in retail sales Source: Nielsen and Euromonitor. 6
Slide 7: Delivered on Fiscal 2019
Delivered on Fiscal 2019 OUR F19 PRIORITIES OUR F19 RESULTS Net Sales Growth +9%¹ Grow the Core Organic Sales* Growth Flat Transition Adj. Operating Profit* Growth +10%¹ Blue Buffalo Adj. Diluted EPS* Growth +4%¹ Deliver Financial Commitments Free Cash Conversion* 115% *Non-GAAP measure. See appendi
Slide 8: Culture Matters More than Ever
Culture Matters More than Ever ADAPTING TO CHANGES IN CREATING A CULTURE OF INCREASING OUR SUSTAINABILITY THE MARKETPLACE BELONGING COMMITMENTS Consumer First Design New in F19 1 million acres of farmland by 2030 100% recyclable by design by 2030 See www.generalmills.com/responsibility for more info
Slide 9: Our Global Growth Framework
Our Global Growth Framework COMPETE 1 Effectively Across All Brands and All Geographies 2 ACCELERATE Our Differential Growth Platforms 3 RESHAPE the Portfolio for Growth 9
Slide 10: Innovation and Brand Building Will Drive Growth in F20
Innovation and Brand Building Will Drive Growth in F20 COMPELLING INNOVATION MODERN BRAND BUILDING 10
Slide 11: Global Capabilities Will Drive Growth in F20
Global Capabilities Will Drive Growth in F20 STRATEGIC REVENUE MANAGEMENT E-COMMERCE Optimal Price Mix Management Price Pack Promotion Architecture Optimization F19 Organic Price/Mix = +2pts F19 E-commerce Net Sales +33% vs LY 11
Slide 12: Focus Areas by Segment in F20
Focus Areas by Segment in F20 SEGMENT F20 FOCUS Improve topline while North America Retail maintaining strong margins Deliver balanced top and Convenience Stores & Foodservice bottom line growth Europe & Australia Drive topline growth consistent Asia & Latin America with F19 while improving margins
Slide 13: Our Fiscal 2020 Priorities
Our Fiscal 2020 Priorities 1 Accelerate Organic Sales Improve NAR while continuing to drive Pet growth Maintain 2 Strong Margins Fuel growth investments through HMM and SRM 3 Reduce Leverage Continue cash discipline and pay down debt 13
Slide 14: Our Fiscal 2020 Targets
Our Fiscal 2020 Targets F19 BASE F20 TARGET Organic Net Sales² +1 to +2% 3 $2.9 Billion¹ Adjusted Operating Profit² +2 to +4% 3 $3.22¹ Adjusted Diluted EPS² +3% to +5% Free Cash Flow Conversion² >95% (1) Non-GAAP measure. See appendix for reconciliation. (2) Non-GAAP measure. (3) Constant-currency g
Slide 15: Today's Agenda
Today’s Agenda Opening Remarks Jeff Harmening North America Retail Plans Jon Nudi Convenience Stores & Foodservice Plans Shawn O’Grady Q&A Discussion Blue Buffalo Plans Billy Bishop Europe & Australia Plans Bethany Quam Asia & Latin America Plans Sean Walker JV Plans and Financial Summary Don Mullig
Slide 16: Jon Nudi, Group President North America Retail
Jon Nudi Group President North America Retail Investor Day Fiscal 2020 July 9, 2019 16
Slide 17: North America Retail Key Messages
North America Retail Key Messages • Continued Retail Sales Improvement in F19 • Made Significant Progress on the Bottom-line • F20 Focus: Improve Topline Growth While Maintaining Margins 17
Slide 18: North America Retail Segment Overview
North America Retail Segment Overview F19 SERVE >95% NET SALES = $10B 25 CATEGORIES LEADING BRANDS HOUSEHOLDS U.S. Yogurt Canada U.S. Meals & Baking U.S. Snacks U.S. Cereal 18
Slide 19: General Mills U.S. Retail Sales Trend
General Mills U.S. Retail Sales Trend RETAIL SALES % VS. LY % +/- LY 2-Year Average 1.3% 0.3% -0.3% -0.2% -0.1% -0.3% 0.1% -1.2% -3.6% -4.9% -7.0% F17 F18-Q1 F18-Q2 F18-Q3 F18-Q4 F19-Q1 F19-Q2 F19-Q3 F19-Q4 Source: Nielsen xAOC 19
Slide 20: General Mills U.S. Retail Market Share Performance
General Mills U.S. Retail Market Share Performance F17 F18 F19 Cereal Bars Yogurt Refrigerated Dough Soup Hot Snacks Desserts Mexican Fruit Snacks Natural & Organic Top 10 Holding / Gaining Share 3 of 10 8 of 10 7 of 10 Source: Nielsen xAOC, dollar share 20 Natural & Organic includes Nielsen XAOC tr
Slide 21: North America Retail Fiscal 2020 Priorities
North America Retail Fiscal 2020 Priorities 1 Improve Organic Sales Growth • Maintain Momentum on U.S. Cereal • Improve U.S. Snacks and U.S. Yogurt • Compete Effectively Everywhere We Play 2 Manage Costs to Maintain Margins 21
Slide 22: Impactful Innovation
Impactful Innovation CONTINUE STRONG LEVELS OF NEW PRODUCT SALES CONTRIBUTION (% of North America Retail Net Sales) 5.5% 3.5% 1.5% F16 F17 F18 F19 F20 Target 22
Slide 23: Global Capabilities Will Drive Growth in F20
Global Capabilities Will Drive Growth in F20 STRATEGIC REVENUE MANAGEMENT E-COMMERCE LEADERSHIP Optimal Price Mix Management Price Pack Promotion Full Basket E-commerce Architecture Optimization Dollar Share Index = 118 Source: Nielsen, Retailer Data, and Internal Estimates 23
Slide 24: Modern Brand Building
Modern Brand Building 2) ase 4 App Store © BUY SCAN EARN
Slide 25: Leading U.S. Cereal Category Performance
Leading U.S. Cereal Category Performance CATEGORY LEADERSHIP CATEGORY PERFORMANCE IMPROVING (GENERAL MILLS U.S. CEREAL DOLLAR SHARE) (U.S. CEREAL CATEGORY DOLLAR SALES, % vs. LY) 31.9 -0.5% -0.5% -1.1% -1.0% 31.6 31.2 -1.8% -1.7% 31.1 30.9 -2.9% -2.8% -3.6% F15 F16 F17 F18 F19 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q
Slide 26: U.S. Cereal Growth Initiatives
U.S. Cereal Growth Initiatives HOLISTIC BRAND BUILDING Cheerios Reese’s Puffs Cinnamon Toast Crunch In-Store Events 26
Slide 27: U.S. Cereal Growth Initiatives
U.S. Cereal Growth Initiatives LAUNCH CATEGORY LEADING INNOVATION 27
Slide 28: Continue Improved Momentum in U.S. Yogurt
Continue Improved Momentum in U.S. Yogurt YOGURT CATEGORY: GROWTH YOGURT SALES IN NON-GREEK SEGMENT (General Mills U.S. Yogurt Retail Sales, % vs. LY) (U.S. Yogurt Retail Sales, $ in Millions, % vs. LY) F17 F18 F19 -2% -6% vs. LY +1% vs. LY -11% Greek Non-Greek -19% Share pts -3.8 -1.5 +0.1 vs. LY T
Slide 29: Drive Growth on the Core
Drive Growth on the Core NEW EQUITIES AND INCREASED BRAND INNOVATION “SIMPLE” OFFERINGS BUILDING SUPPORT 29
Slide 30: Lead Growth in Simply Better
Lead Growth in Simply Better GROW THE CORE AND REFORMULATED MODERNIZE EXPAND INTO DESSERTS YQ + PROTEIN DIGESTIVE HEALTH 30
Slide 31: U.S. Snacks
U.S. Snacks U.S. SNACKS OPERATING UNIT Net Sales, $ in Billions CGR = +3% -4% vs. LY $2.14 $2.06 $1.87 F13 F18 F19 31
Slide 32: Improve Nature Valley
Improve Nature Valley MAKING INNOVATION IMPROVING IN-STORE INCREASING BIGGER EXECUTION BRAND INVESTMENT 32
Slide 33: Fiber One and Protein One
Fiber One and Protein One PROTEIN BARS 33
Slide 34: Other U.S. Snack Bar Plans
Other U.S. Snack Bar Plans CONTINUE TO DRIVE TREAT BARS EXPANSION NUTRITION BAR PORTFOLIO 34
Slide 35: Fruit Snacks Positioned for Growth
Fruit Snacks Positioned for Growth BRAND BUILDING AND NEW EQUITIES EXPANDED AVAILABILITY 35
Slide 36: Natural & Organic Portfolio
Natural & Organic Portfolio LARGE & GROWING BUSINESS FOR GENERAL MILLS (Net Sales, $ in millions) CGR = +DD F00 F10 F15 F19 Second-largest U.S. Producer of Natural & Organic Packaged Food 36
Slide 37: Accelerate Annie's Growth
Accelerate Annie’s Growth TASTE-DRIVEN CHANNEL EXPANSION ADVANCING INNOVATION & NEWS & PACKAGING OUR MISSION FOR ALL OCCASIONS 37
Slide 38: Drive Growth Across the Rest of the Natural & Organic Portfolio
Drive Growth Across the Rest of the Natural & Organic Portfolio WIN WITH TASTE NEWS CEREAL & INNOVATION GROW MEAT SNACKING 38
Slide 39: Leading the Mexican Food Category
Leading the Mexican Food Category OLD EL PASO IS LEADING GROWTH (Retail Sales, $ in Millions) CGR = +5% +1.2pts Share $546 $476 F16 F19 Source: Nielsen xAOC 39
Slide 40: Continue to Drive Old El Paso Growth
Continue to Drive Old El Paso Growth WIN IN STORE YEAR-ROUND INSPIRATION INNOVATION 40
Slide 41: Other Meals & Baking Categories
Other Meals & Baking Categories SOUP REFRIGERATED HOT SNACKS DOUGH 41
Slide 42: Manage Costs to Maintain Margins
Manage Costs to Maintain Margins • Drive Positive Price/Mix with SRM • Continue High Levels of HMM 42
Slide 43: North America Retail Key Messages
North America Retail Key Messages • Continued Retail Sales Improvement in F19 • Made Significant Progress on the Bottom-line • F20 Focus: Improve Topline Growth While Maintaining Margins 43
Slide 44: Shawn O'Grady, Group President, Convenience Stores & Foodservice
Shawn O’Grady Group President, Convenience Stores & Foodservice; Chief Revenue Development Officer Fiscal 2020 Investor Day July 9, 2019 44
Slide 45: Convenience Stores & Foodservice Key Messages
Convenience Stores & Foodservice Key Messages • Grew Net Sales +LSD and Profit +HSD in F19 • Strong Growth Opportunity in Away-from-home Channels • News & Innovation on Focus Six to Drive Topline in F20 • Drive HMM and Mix to Maintain Margins 45
Slide 46: Convenience Stores & Foodservice
Convenience Stores & Foodservice OUR MISSION 46
Slide 47: Convenience Stores & Foodservice
Convenience Stores & Foodservice A LARGE MARKET OPPORTUNITY U.S. FOOD AND NON-ALCOHOLIC CHANNEL GROWTH BEVERAGE CONSUMER EXPENDITURES 2020 Est. 2019 Nominal Est. Sales Growth ($ in Billions) Total Foodservice $821 3.9% At-Home Away- 47% From- Commercial $534 4.0% Home 53% Non-Commercial $210 3.5% C-
Slide 48: Advantaged Business Model
Advantaged Business Model LEVERAGE GENERAL MILLS INNOVATE CREATE DEMAND INVESTMENT OPERATOR FIRST WITH DIRECT SALES 13 Points of Operating Profit Margin Expansion Since 2008 48
Slide 49: Focus Six Platforms
Focus Six Platforms Cereal Yogurt Snacks Frozen Frozen Frozen Biscuits Baked Goods Meals 49
Slide 50: Convenience Stores & Foodservice Fiscal 2020 Priorities
Convenience Stores & Foodservice Fiscal 2020 Priorities 1 Drive Topline Growth Across the Focus Six 2 Drive HMM and Mix to Maintain Margins 50
Slide 51: Cereal Innovation in Schools
Cereal Innovation in Schools LAUNCH 2 OUNCE EQUIVALENT GRAIN EXPAND GRANOLA IN BOWLPACK IN K-12 SCHOOLS COLLEGES & UNIVERSITIES 51
Slide 52: Yogurt News to Drive Usage
Yogurt News to Drive Usage BULK YOGURT NEWS & RECIPE IDEAS OUI DISTRIBUTION EXPANSION Made without gelatin Preferred taste & texture 52
Slide 53: Snacks Innovation Across Convenience Stores
Snacks Innovation Across Convenience Stores SALTY INNOVATION FRUIT SNACKS EXPANSION SNACK BARS 53
Slide 54: Accelerating Growth Across Baked Goods
Accelerating Growth Across Baked Goods ENHANCED OFFERINGS ADVANTAGED CUSTOM CAPABILITIES 54
Slide 55: Drive HMM and Mix to Maintain Margins
Drive HMM and Mix to Maintain Margins • Strong HMM Plans in F20: • Ingredient Savings • Optimize Logistics Network • Harmonize Formulas to Increase Production Capacity • Mix Benefits from Growth on Higher-margin Focus 6 55
Slide 56: Convenience Stores & Foodservice Summary
Convenience Stores & Foodservice Summary • Grew Net Sales +LSD and Profit +HSD in F19 • Strong Growth Opportunity in Away-from-home Channels • News & Innovation on Focus Six to Drive Topline in F20 • Drive HMM and Mix to Maintain Margins 56