General Mills, Inc. · NYSE:GIS
General Mills — Q1 2024 Earnings Presentation
37 slides from General Mills's earnings presentation, Sep 20, 2023
Slide 1: Fiscal 2024 Q1 Earnings
Fiscal 2024 Q1 Earnings September 20, 2023 General Mills First-quarter Fiscal 2024 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 2024 3
Slide 4: Today's Key Messages
Today’s Key Messages • External Environment Continues to Evolve • Remain Focused on Executing Our F24 Priorities: 1. Continuing to Compete Effectively 2. Improving Our Supply Chain Efficiency 3. Maintaining Our Disciplined Approach to Capital Allocation • Reaffirming Full-year Guidance General Mills
Slide 5: First-quarter Fiscal 2024 Performance
First-quarter Fiscal 2024 Performance Organic Net Sales1 + 4% Adj. Operating Profit2 + 2% Adj. Diluted EPS2 - 1% (1) Non-GAAP measure. See appendix for reconciliation (2) Growth rates in constant currency. Non-GAAP measures. See appendix for reconciliation General Mills First-quarter Fiscal 2024 5
Slide 6: Progressing Against Our Fiscal 2024 Priorities
Progressing Against Our Fiscal 2024 Priorities Continue to Leverage Advantaged Capabilities 1 Compete Effectively to Adapt to New Environment Improve Supply Chain Drive HMM Cost Savings and 2 Efficiency Reduce Disruption-related Costs Maintain Capital Invest in the Business, Return Cash 3 Allocation
Slide 7: An Evolving Environment in Fiscal 2024
An Evolving Environment in Fiscal 2024 Resilient Yet Moderating Stabilizing Supply Increasingly Cautious Inflation Chain Consumer General Mills First-quarter Fiscal 2024 7
Slide 8: Competing Effectively in North America Retail
F24 Priority 1 Competing Effectively in North America Retail Evolving External Environment Strong Fundamentals & Advantaged Capabilities • U.S. At-home Food Growth Moderating, Excellent Execution Bold Brand Building & but Still Above Pre-pandemic Levels In Store & Online Relentless Innovation • Lapp
Slide 9: Competing Effectively in Pet
F24 Priority 1 Competing Effectively in Pet Evolving External Environment Adapting to Today’s Pet Parent Shopping Behaviors • Pet Category Retail Sales Moderating Reinforce Ingredient Superiority • Increased Value-seeking Behaviors: ✓ Value-oriented Products ✓ Value-oriented Channels ✓ Smaller Pack
Slide 10: Competing Effectively in Foodservice and International
F24 Priority 1 Competing Effectively in Foodservice and International North America Foodservice International • Away-from-home Traffic Up Modestly • Building on Positive Momentum with ✓ Restaurant Traffic ~Flat vs. Last Year Improved Service & Impactful Innovation ✓ Non-Restaurant Traffic Growing1 •
Slide 11: Improve Supply Chain Efficiency
F24 Priority 2 Improve Supply Chain Efficiency Improve Supply Chain Efficiency Improved Service Levels Return to Historic Levels of HMM General Mills North America Service Level General Mills HMM Cost Savings as % of COGS Mid-90’s Long-term goal 4% 4% 4% High-80’s 3% 3% Low-80’s F22 F23 Q1 F24 F10-F
Slide 12: Maintain Capital Allocation Discipline
F24 Priority 3 Maintain Capital Allocation Discipline Priorities Fiscal 2024 Plans ~4% of Net Sales; Prioritize Cost Savings CAPEX and Capacity for Constrained Platforms Dividend Growth 9% Dividend Increase as of Aug. 1, 2023 F23 Year-end Net Debt Leverage of 2.7x¹ M&A Provides Flexibility for Strat
Slide 13: Reaffirming Fiscal 2024 Financial Outlook
Reaffirming Fiscal 2024 Financial Outlook KEY FINANCIAL METRICS¹ F24 OUTLOOK Organic Net Sales Growth +3 to +4% Adjusted Operating Profit Growth² +4 to +6% Adjusted Diluted EPS Growth² +4 to +6% Free Cash Flow Conversion 95%+ (1) Non-GAAP measures. (2) Growth rates in constant currency. Non-GAAP mea
Slide 14: Kofi Bruce, Chief Financial Officer
Kofi Bruce Chief Financial Officer General Mills First-quarter Fiscal 2024 14
Slide 15: First-quarter Fiscal 2024 Financial Results
First-quarter Fiscal 2024 Financial Results Q1 TOTAL GENERAL MILLS $MM VS. LY Net Sales $4,905 +4% Organic Net Sales1 +4% Adjusted Operating Profit1 $899 +2%2 Adjusted Diluted EPS1 $1.09 -1%2 (1) Non-GAAP measures. See appendix for reconciliation (2) Growth rates in constant currency. Non-GAAP mea
Slide 16: Components of First-quarter Net Sales Growth
Components of First-quarter Net Sales Growth Organic Net Sales1 = +4% +7 pts +4 pts Flat Flat -2 pts Organic Organic Foreign Acquisitions & Total Net Sales Volume Price / Mix Exchange Divestitures As Reported (1) Non-GAAP measure. May not foot due to rounding General Mills First-quarter Fiscal 2024
Slide 17: First-quarter Fiscal 2024 North America Retail
First-quarter Fiscal 2024 North America Retail North America Retail Q1 • Q1 organic net sales growth driven by positive price/mix, partially offset by lower pound Organic Net Sales¹ +4% volume Segment Op Profit² +3% • Net sales growth across U.S. Snacks, U.S. Morning Foods, and Canada, partially off
Slide 18: First-quarter Fiscal 2024 North America Foodservice
First-quarter Fiscal 2024 North America Foodservice North America Foodservice Q1 • Q1 organic net sales growth driven by higher pound volume Organic Net Sales¹ +4% • Bakery flour index pricing a 6-point headwind Segment Op Profit² +10% to net sales growth • Q1 profit increase driven by positive pric
Slide 19: First-quarter Fiscal 2024 Pet
First-quarter Fiscal 2024 Pet Pet Q1 • Q1 organic net sales results include +MSD% on dry food, flat on wet food, and -DD% on treats Organic Net Sales¹ Flat • Short-term U.S. premium pet food category Segment Op Profit² -10% headwinds driven by greater value orientation and mobility for pet parents •
Slide 20: First-quarter Fiscal 2024 International
First-quarter Fiscal 2024 International International Q1 • Q1 organic net sales growth driven by Distributor markets, Europe & Australia, and Organic Net Sales¹ +9% China, partially offset by a decline in Brazil Segment Op Profit² +52% • Positive retail sales performance on global platforms: ice cre
Slide 21: First-quarter Fiscal 2024 Joint Ventures
First-quarter Fiscal 2024 Joint Ventures Q1 AFTER-TAX JV EARNINGS: $24MM, +19% VS. LY • Q1 CPW net sales growth driven by positive NET SALES¹ Q1 price/mix, partially offset by lower volume CPW +8% • Q1 HDJ net sales growth driven by positive HDJ +4% price/mix and strong innovation performance • Q1
Slide 22: First-quarter Fiscal 2024 Margin Results
First-quarter Fiscal 2024 Margin Results Adjusted Gross Margin1 Adjusted Operating Profit Margin1 (% of Net Sales) (% of Net Sales) 35.4% 18.7% 34.9% 18.3% Q1 F23 Q1 F24 Q1 F23 Q1 F24 • Q1 Adj. Gross Margin increase driven by positive price/mix, partially offset by higher input costs • Q1 Adj. Opera
Slide 23: First-quarter Fiscal 2024 Other Income Statement Items
First-quarter Fiscal 2024 Other Income Statement Items • Adjusted Unallocated Corporate Expenses Increased $12MM • Net Interest Expense Increased $29MM • Adjusted Effective Tax Rate 21.1%, +140bps vs. LY¹ • Average Diluted Shares Outstanding -2% vs. LY (1) Non-GAAP measure. See appendix for reconcil
Slide 24: First-quarter Fiscal 2024 Balance Sheet and Cash Flow
First-quarter Fiscal 2024 Balance Sheet and Cash Flow Operating Cash Flow ($ in Millions) • Capital Investments = $142MM $389 $378 • Dividends Paid = $348MM • Net Share Repurchases = $496MM F23 F24 General Mills First-quarter Fiscal 2024 24
Slide 25: Reaffirming Fiscal 2024 Financial Outlook
Reaffirming Fiscal 2024 Financial Outlook KEY FINANCIAL METRICS¹ F24 OUTLOOK Organic Net Sales Growth +3 to +4% Adjusted Operating Profit Growth² +4 to +6% Adjusted Diluted EPS Growth² +4 to +6% Free Cash Flow Conversion 95%+ (1) Non-GAAP measures (2) Growth rates in constant currency. Non-GAAP meas
Slide 26: Today's Key Messages
Today’s Key Messages • External Environment Continues to Evolve • Remain Focused on Executing Our F24 Priorities: 1. Continuing to Compete Effectively 2. Improving Our Supply Chain Efficiency 3. Maintaining Our Disciplined Approach to Capital Allocation • Reaffirming Full-year Guidance General Mills
Slide 27: A Reminder on Non-GAAP Guidance
A Reminder on Non-GAAP Guidance Our fiscal 2024 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 28: Appendix: Q1 Fiscal 2024 North America Retail Operating Unit Results
Appendix: First-quarter Fiscal 2024 North America Retail Operating Unit Results Net Sales % vs. LY Operating Unit Q1 U.S. Snacks +8% U.S. Morning Foods +3% Canada Flat Canada Constant-currency¹ +4% U.S. Meals & Baking Solutions -1% (1) Net sales growth in constant currency. Non-GAAP measure. See app
Slide 29: Reconciliation of Canada Operating Unit Constant-currency Net Sales Growth
Reconciliation of First-quarter Fiscal 2024 Canada Operating Unit Constant-currency Net Sales Growth General Mills First-quarter Fiscal 2024 29
Slide 30: Reconciliation of Organic Net Sales Growth
Reconciliation of First-quarter Fiscal 2024 Organic Net Sales Growth *Table may not foot due to rounding General Mills First-quarter Fiscal 2024 30
Slide 31: Reconciliation of Adjusted Operating Profit Constant-currency Growth Rate
Reconciliation of First-quarter Fiscal 2024 Adjusted Operating Profit Constant-currency Growth Rate (Fiscal Years, $ in Millions) *Table may not foot due to rounding General Mills First-quarter Fiscal 2024 31
Slide 32: Reconciliation of Adjusted Diluted EPS and Constant-currency Growth Rate
Reconciliation of First-quarter Fiscal 2024 Adjusted Diluted EPS and Related Constant-currency Growth Rate (Fiscal Years) *Table may not foot due to rounding **See reconciliation of tax rate items for tax impact of individual items General Mills First-quarter Fiscal 2024 32
Slide 33: Reconciliation of Fiscal 2023 Net Debt-to-Adjusted EBITDA
Reconciliation of Fiscal 2023 Net Debt-to-Adjusted EBITDA ($ in Millions) *Table may not foot due to rounding (a) Notes payable and long-term debt, including current portion General Mills First-quarter Fiscal 2024 33
Slide 34: Reconciliation of Constant-currency Segment Operating Profit Growth
Reconciliation of First-quarter Fiscal 2024 Constant-currency Segment Operating Profit Growth *Table may not foot due to rounding General Mills First-quarter Fiscal 2024 34
Slide 35: Reconciliation of Adjusted Gross Margin
Reconciliation of First-quarter Fiscal 2024 Adjusted Gross Margin (Fiscal Years) *Table may not foot due to rounding General Mills First-quarter Fiscal 2024 35
Slide 36: Reconciliation of Adjusted Operating Profit Margin
Reconciliation of First-quarter Fiscal 2024 Adjusted Operating Profit Margin (Fiscal Years) *Table may not foot due to rounding General Mills First-quarter Fiscal 2024 36
Slide 37: Reconciliation of Adjusted Tax Rate
Reconciliation of First-quarter Fiscal 2024 Adjusted Tax Rate (Fiscal Years, $ 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 2024 37