Slide 1: Fiscal 2014 Review & 2015 Outlook
General Mills Fiscal 2014 Review & 2015 Outlook June 25, 2014 7221-1
Slide 2: 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 and uncertainties that could cause actua
Slide 3: 2014 Financial Review
2014 Financial Review Don Mulligan Executive Vice President; Chief Financial Officer 7221-3
Slide 4: Fiscal 2014 Summary
Fiscal 2014 Summary • Recorded Good Progress Building Our Worldwide Food Businesses • Returned More than $2.7 Billion in Cash to Shareholders • Net Sales and Operating Profit Results Were Disappointing 7221-4
Slide 5: Fourth Quarter Fiscal 2014 Financial Summary
Fourth Quarter Fiscal 2014 Financial Summary ($ in Millions, Except per Share) $ % Change Net Sales $4,284 -3% Adjusted Segment Operating Profit* 733 Flat Net Earnings Attributable to General Mills 405 +10 Diluted EPS $0.65 +18 Certain Items Affecting Comparability .02 Adjusted Diluted EPS* $0.67 +2
Slide 6: Components of Net Sales Growth
Fourth Quarter Fiscal 2014 Components of Net Sales Growth +1pt -2pts -2pts -3pts Foreign Price & Total Volume Exchange Mix Net Sales 7221-6
Slide 7: Net Sales Results by Segment
Fourth Quarter Fiscal 2014 Net Sales Results by Segment ($ in Millions) $ % Change Total Net Sales $4,284 -3% U.S. Retail 2,437 -1 International 1,339 -7 Constant Currency* -2 Convenience Stores & Foodservice 508 +1 * Non-GAAP Measure. See Appendix for Reconciliation. 7221-7
Slide 8: Adjusted Gross Margin Results
Adjusted Gross Margin* Results Q4 Fiscal Year 36.2% 35.1% 35.0% 35.4% • Annual Input Cost Inflation was 4% F13 F14 F13 F14 * Non-GAAP Measure. See Appendix for Reconciliation. 7221-8
Slide 9: Fiscal 2014 Financial Summary
Fiscal 2014 Financial Summary ($ in Millions, Except per Share) $ % Change Net Sales $17,910 +1% Adjusted Segment Operating Profit* 3,154 -2 Net Earnings Attributable to General Mills 1,824 -2 Diluted EPS $2.83 +1 Certain Items Affecting Comparability (.01) Adjusted Diluted EPS* $2.82 +4 * Non-GAAP
Slide 10: U.S. Retail Segment
Fiscal 2014 U.S. Retail Segment Net Sales: $10.6B, Flat vs. LY Operating Profit: $2.3B, -3% vs. LY Net Sales by Division % $MM Change Big G Cereals $2,345 +0% Baking Products 1,832 -1 Snacks 1,824 +6 Frozen Foods 1,526 -2 Meals 1,419 -4 Yoplait 1,312 -3 Small Planet Foods 348 +6 Table Does Not Foot
Slide 11: Convenience Stores & Foodservice Segment
Fiscal 2014 Convenience Stores & Foodservice Segment Net Sales: $1.9B, -2% vs. LY Operating Profit: $307MM, -2% vs. LY 6 Priority Platforms Net Sales Growth (F14 vs LY) 5% 4% Q4 F14 7221-11
Slide 12: International Segment
Fiscal 2014 International Segment Net Sales: $5.4B; Constant-currency Growth +8%* Adjusted Operating Profit*: $535MM; Constant-currency Growth +10%* Net Sales by Region % Growth $MM Constant-currency* Europe $2,189 -4% Canada 1,195 +5 Latin America 1,020 +38 Asia / Pacific 982 +9 * Non-GAAP Measure.
Slide 13: Joint Venture Summary
Fiscal 2014 Joint Venture Summary Constant-currency JV Earnings After Tax Net Sales Growth ($ in Millions, As Reported) • CPW Flat • HDJ +9% $99 $90 F13 F14 7221-13
Slide 14: Core Working Capital
Fiscal 2014 Core Working Capital ($ in Millions) Annual F14 F13 Accounts Receivable $1,484 $1,446 Inventories 1,559 1,546 Accounts Payable 1,611 1,423 F14 Core Working Capital -9% 7221-14
Slide 15: Operating Cash Flow
Fiscal 2014 Operating Cash Flow ($ in Millions) $2,926 • $664MM in Capital $2,541 Investments • Free Cash Flow* of $1.9B F13 F14 * Non-GAAP Measure. See Appendix for Reconciliation. 7221-15
Slide 16: Cash Returns to Shareholders
Fiscal 2014 Cash Returns to Shareholders Share Repurchases Dividends ($ in Millions) • 36MM Shares Repurchased $1,745 • Dividends per Share +17% $1,045 $983 $868 F13 F14 7221-16
Slide 17: Track Record of Cash Returns to Shareholders
A Strong Track Record of Cash Returns to Shareholders Average Diluted Dividends per Share Shares Outstanding (Shares in Millions) CGR = +13% CGR = -1% $1.55 683 665 667 666 $1.32 646 $1.22 $1.12 $0.96 F10 F11 F12 F13 F14 F10 F11 F12 F13 F14 7221-17
Slide 18: Total Shareholder Return
Double-digit Total Shareholder Return in Fiscal 2014 (Price Appreciation plus Reinvested Dividends) GIS +13% May 24, May 23, 2013 2014 Source: Capital IQ. 7221-18
Slide 19: Fiscal 2015 Plan – Key Assumptions
General Mills Fiscal 2015 Plan – Key Assumptions • Slow Improvement in Developed Market Industry Trends • Net Sales Growth Will Benefit from 53rd Week • Robust HMM Savings, Offsetting 3% Input Cost Inflation • Reinvesting Profit Benefit of Extra Week – Increased Consumer Marketing and Start-up Expen
Slide 20: Fiscal 2015 Pension Expense
Fiscal 2015 Pension Expense • No Change in Accounting Method • F14 Return on Plan Assets +15% • Qualified Plan Fully Funded • F15 Pension Expense Modestly Lower than F14 7221-20
Slide 21: Fiscal 2015 Guidance Summary
Fiscal 2015 Guidance Summary ($ in Millions, Except per Share) Fiscal Fiscal 2015 2014 Growth Net Sales $17,910 +MSD¹ Adjusted Gross Margin* 35.4% Higher Media Expense $870 Faster than Sales Adjusted Segment Operating Profit* $3,154 +MSD¹ Interest Expense $302 +HSD Tax Rate Excluding Items* 32.2% Co
Slide 22: 2015 Outlook
2015 Outlook Ken Powell Chairman of the Board; Chief Executive Officer 7221-22 22
Slide 23: U.S. Retail Segment Fiscal 2015 Guidance
U.S. Retail Segment Fiscal 2015 Guidance ($ in Millions) F14 F15 Growth Net Sales $10,605 +MSD Segment Operating Profit $2,312 +MSD 7221-23
Slide 24: U.S. Retail Leadership
U.S. Retail Leadership Jeff Harmening Juliana Chugg Michele Meyer Liz Nordlie Anton Vincent Frozen Foods Meals Small Planet Foods Snacks David Clark Jim Murphy Ann Simonds Yoplait Big G Cereals Baking Products 7221-24
Slide 25: U.S. Retail Fiscal 2015 Priorities
U.S. Retail Fiscal 2015 Priorities • Invest in Cereal for Growth • Return Yogurt to Growth • Accelerate Better-for-you Snacking • Sustain Momentum on Totino’s, Old El Paso, and Baking Products • Foster HMM 7221-25
Slide 26: U.S. Cereal Trends
U.S. Cereal Trends General Mills RTE Cereal Big G Cereal Net Sales Market Share ($ in Millions) 30.8 31.0 $2,351 $2,345 F10 F11 F12 F13 F14 F10 F11 F12 F13 F14 Source: Nielsen XAOC 7221-26
Slide 27: U.S. Cereal: News on Established Brands
U.S. Cereal: News on Established Brands Core Renovation Consumer-first Messaging 7221-27
Slide 28: U.S. Cereal: Protein Innovation
U.S. Cereal: Protein Innovation 7221-28
Slide 29: U.S. Cereal: Gluten-free Expansion
U.S. Cereal: Gluten-free Expansion Chex Franchise Retail Sales CGR = +10% F10 F11 F12 F13 F14 Source: Nielsen XAOC 7221-29
Slide 30: U.S. Cereal Summary
U.S. Cereal Summary ae h 10% om, a Cheerios y Lage ¥; an ge PETE ON Gee, -~ an 7221-90
Slide 31: U.S. Yogurt: Finished Fiscal 2014 with Clear Momentum
U.S. Yogurt: Finished Fiscal 2014 with Clear Momentum Yoplait Dollar Share of Retail Sales Growth Greek Segment Original Style Yoplait (Fiscal 2014) (F14 vs LY) 10% 10% 10% 10% 10% 10% 8.5% 9% 6% 6% 2% Cal 2013 Cal 2013 Jan Feb Mar Apr May Cal Jan Feb Mar Apr May 2013 F14 Retail Sales +41% F14 Retai
Slide 32: U.S. Yogurt 2015 Growth Plan
U.S. Yogurt 2015 Growth Plan Greek Yoplait Original Taste-off Yoplait Light Kid 7221-32
Slide 33: U.S. Retail: Accelerate Better-for-you Snacking
U.S. Retail: Accelerate Better-for-you Snacking 7221-33
Slide 34: More Fiscal 2015 First Half U.S. BFY Snacking Innovation
More Fiscal 2015 First Half U.S. BFY Snacking Innovation 7221-34
Slide 35: U.S. Retail: Building on Positive Momentum
U.S. Retail: Building on Positive Momentum Frozen Hot Snacks Mexican Aisle Baking Products 7221-35
Slide 36: Convenience Stores & Foodservice Fiscal 2015 Guidance
Convenience Stores & Foodservice Segment Fiscal 2015 Guidance ($ in Millions) F14 F15 Growth Net Sales $1,919 +MSD Segment Operating Profit $307 +HSD 7221-36
Slide 37: Convenience Stores & Foodservice 2015 Product News
Convenience Stores & Foodservice 2015 Product News 7221-37
Slide 38: International Segment Fiscal 2015 Guidance
International Segment Fiscal 2015 Guidance ($ in Millions) F15 Growth F14 Constant-currency Net Sales $5,386 +HSD Adj. Segment Operating Profit* $535 +HSD * Non-GAAP Measure. See Appendix for Reconciliation. 7221-38
Slide 39: Developed Markets News & Innovation
International Segment: Developed Markets News & Innovation Canada Europe 7221-39
Slide 40: Emerging Market Plans – Greater China
International Segment: Emerging Market Plans – Greater China 7221-40
Slide 41: Emerging Market Plans – Brazil
International Segment: Emerging Market Plans – Brazil 7221-41
Slide 42: Other Emerging Market Plans
Other Emerging Market Plans AMEA CPW 7221-42
Slide 43: General Mills Fiscal 2015 Summary
General Mills Fiscal 2015 Summary • Consumer-focused Innovation to Drive Growth • Strong Slate of Product News & Consumer Marketing Initiatives • Our HMM Focus and New Cost Reduction Efforts Will Provide Fuel for Investment • Continuing Emphasis on Shareholder Returns 7221-43
Slide 44: Reconciliation of Adjusted Segment Operating Profit
Reconciliation of Adjusted Segment Operating Profit (Fiscal Years, $ in Millions) Q4 YTD 2014 2013 2014 2013 U.S. Retail $501 $517 $2,312 $2,393 Adjusted International 146 140 535 515 Convenience Stores & Foodservice 86 75 307 315 Adjusted Segment Operating Profit $733 $733 $3,154 $3,223 Unallocated
Slide 45: Reconciliation of Adjusted Diluted EPS
Reconciliation of Adjusted Diluted EPS (Fiscal Years) Q4 YTD 2014 2013 2014 2013 Diluted EPS $0.65 $0.55 $2.83 $2.79 Mark-to-market Effects (.01) .01 (.05) -- Divestiture Gain, net (.06) -- (.06) -- Restructuring -- -- .01 .02 Tax Item -- (.03) -- (.13) Acquisition Integration Costs -- -- -- .01 Ven
Slide 46: Reconciliation of Q4 Constant-currency Net Sales Growth
Reconciliation of Q4 Constant-currency Net Sales Growth (Fiscal Years) Q4 2014 % Change in Net % Change in Sales Net Sales Impact of Foreign on a Constant- as Reported Currency Exchange currency Basis Europe -6% 4 pts -10% Canada -11 -7 -4 Asia/Pacific 3 -1 4 Latin America -12 -25 13 Total Internati
Slide 47: Reconciliation of Full Year Constant-currency Net Sales Growth
Reconciliation of Full Year Constant-currency Net Sales Growth YTD 2014 % Change in Net % Change in Sales Net Sales Impact of Foreign on a Constant- as Reported Currency Exchange currency Basis Europe -1% 3 pts -4% Canada -1 -6 5 Asia/Pacific 9 -- 9 Latin America 16 -22 38 Total International 4% -4
Slide 48: Reconciliation of Q4 Gross Margin
Reconciliation of Q4 Gross Margin (Fiscal Years, $ in Millions) Q4 2014 Q4 2013 % of % of $ Net Sales $ Net Sales Net Sales $4,284 $4,411 Gross Margin as Reported 1,482 34.6% 1,531 34.7% Mark-to-market Effects (6) 4 Venezuela Currency Devaluation 23 11 Adjusted Gross Margin $1,500 35.0% $1,546 35.1%
Slide 49: Reconciliation of Full Year Gross Margin
Reconciliation of Full Year Gross Margin (Fiscal Years, $ in Millions) YTD 2014 YTD 2013 % of % of $ Net Sales $ Net Sales Net Sales $17,910 $17,774 Gross Margin as Reported 6,370 35.6% 6,424 36.1% Mark-to-market Effects (48) (4) Venezuela Currency Devaluation 23 16 Adjusted Gross Margin $6,344 35.4
Slide 50: Reconciliation of Q4 Adjusted International Segment Operating Profit
Reconciliation of Q4 Adjusted International Segment Operating Profit (Fiscal Years, $ in Millions) Q4 2014 2013 International Segment Operating Profit $84 $129 Venezuela Currency Devaluation 62 11 Adjusted International Segment Operating Profit $146 $140 7221-50
Slide 51: Reconciliation of Full Year Adjusted International Segment Operating Profit
Reconciliation of Full Year Adjusted International Segment Operating Profit (Fiscal Years, $ in Millions) YTD 2014 2013 Change International Segment Operating Profit $473 $490 -4% Venezuela Currency Devaluation 62 25 Adjusted International Segment Operating Profit $535 $515 4% Add Back of Foreign Cu
Slide 52: Reconciliation of Free Cash Flow
Reconciliation of Free Cash Flow (Fiscal Years, $ in Millions) 2014 Net Cash Provided by Operating Activities, As Reported $2,541 Purchases of Land, Buildings, and Equipment (664) Free Cash Flow $1,878 Table does not foot due to rounding. 7221-52
Slide 53: Reconciliation of After-tax Earnings from Joint Ventures
Reconciliation of After-tax Earnings from Joint Ventures (Fiscal Years) YTD 2014 % Change in After-tax % Change in Earnings After-tax Earnings Impact of Foreign on a Constant- as Reported Currency Exchange currency Basis Total After-tax Earnings from Joint Ventures -9% -5 pts -4% 7221-53
Slide 54: Reconciliation of Effective Income Tax Rate
Reconciliation of Effective Income Tax Rate (Fiscal Years, $ in Millions) YTD 2014 YTD 2013 Pre-tax Income Pre-tax Income Earnings* Taxes Earnings* Taxes As Reported $2,655 $883 $2,535 $741 Mark-to-market effects (48) (18) (4) (2) Restructuring Costs 4 -- 19 3 Integration Costs -- -- 12 4 Tax Items