General Mills, Inc. · NYSE:GIS
General Mills — Q3 2023 Earnings Presentation
43 slides from General Mills's earnings presentation, Mar 23, 2023
Slide 1: Fiscal 2023 Q3 Earnings
Fiscal 2023 Q3 Earnings March 23, 2023 General Mills Third Quarter Fiscal 2023
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 Third Quarter Fiscal 2023 3
Slide 4: Today's Key Messages
Today’s Key Messages • Delivered Broad-based Topline Growth and Strong Bottom-line Results in Q3 • Continuing to Execute Well Against our Accelerate Strategy and F23 Priorities • Raising Full-year Guidance on Net Sales, Operating Profit, and EPS General Mills Third Quarter Fiscal 2023 4
Slide 5: Delivered Strong Performance in Q3
Delivered Strong Performance in Q3 Q3 YTD Organic Net Sales1 + 16% + 12% Adj. Operating Profit2 + 20% + 11% Adj. Diluted EPS2 + 17% + 14% (1) Non-GAAP measure. See appendix for reconciliation General Mills Third Quarter Fiscal 2023 (2) Growth rates in constant currency. Non-GAAP measures. See append
Slide 6: Broad-based Growth in Q3
Broad-based Growth in Q3 Organic Segment Net Sales¹ Op. Profit² North America Retail +18% +29% Pet +14% -7% North America Foodservice +19% +134% International +8% +27% (1) Non-GAAP measure. See appendix for reconciliation General Mills Third Quarter Fiscal 2023 (2) Growth rates in constant currency.
Slide 7: Environment Remains Dynamic in F23
Environment Remains Dynamic in F23 Continued Economic Volatility Continued Supply High Inflation Chain Disruptions General Mills Third Quarter Fiscal 2023 7
Slide 8: Continue to Drive our Accelerate Strategy in F23
Delivering on Our Fiscal 2023 Priorities Continue to Drive our Accelerate Strategy in F23 1 Continue to Compete Effectively 2 Continue to Invest for the Future 3 Continue to Reshape our Portfolio General Mills Third Quarter Fiscal 2023 8
Slide 9: Continuing to Compete Effectively in Q3
Continuing to Compete Effectively in Q3 Consistently Growing or Holding Share Market Share Gains in Majority of our Priority Businesses* Across Many Categories General Mills % Priority Business Holding/Growing Share 67% 70% 63% 64% Cereal* Ref. Dough Fruit Snacks 56%* (Global) (U.S.) (U.S.) Hot Snac
Slide 10: Investing for the Future in Brand Building
Investing for the Future in Brand Building Increased Media Investment Compelling Campaigns General Mills Media Spend ($ in Millions) +4% CGR +DD% F19 F22 F23 Target General Mills Third Quarter Fiscal 2023 10
Slide 11: Investing for the Future in Innovation
Investing for the Future in Innovation General Mills Third Quarter Fiscal 2023 11
Slide 12: Investing for the Future in Capabilities
Investing for the Future in Capabilities Connected Strategic Revenue Supply Chain Commerce Management Digitization Enabled by Digital & Technology General Mills Third Quarter Fiscal 2023 12
Slide 13: Investing for the Future in Standing for Good
Investing for the Future in Standing for Good 10 Key Commitments Championing Regeneration of Water Resources SUSTAINABLE GHG SOURCING EMISSIONS HUMAN REGENERATIVE RIGHTS AGRICULTURE RENEWABLE ELECTRICITY PACKAGING ANIMAL WELFARE WATER 16 Billion+ Gallons of Water FOOD ZERO WASTE Replenished¹ WASTE T
Slide 14: Kofi Bruce, Chief Financial Officer
Kofi Bruce Chief Financial Officer General Mills Third Quarter Fiscal 2023 14
Slide 15: Third Quarter Fiscal 2023 Financial Results
Third Quarter Fiscal 2023 Financial Results Q3 TOTAL GENERAL MILLS $MM VS. LY Net Sales $5,126 +13% Organic Net Sales1 +16% Adjusted Operating Profit1 $807 +20%2 Adjusted Diluted EPS1 $0.97 +17%2 (1) Non-GAAP measure. See appendix for reconciliation General Mills Third Quarter Fiscal 2023 (2) Consta
Slide 16: Components of Third Quarter Net Sales Growth
Components of Third Quarter Net Sales Growth Organic Net Sales1 +16% +16 pts +13 pts Flat -1 pt -2 pts Organic Organic Foreign Acquisitions & Total Net Sales Volume Price / Mix Exchange Divestitures As Reported (1) Non-GAAP measure General Mills Third Quarter Fiscal 2023 May not foot due to rounding
Slide 17: Third Quarter Fiscal 2023 North America Retail
Third Quarter Fiscal 2023 North America Retail Segment Results Segment Highlights North America Retail Q3 • Q3 organic net sales growth driven by positive price/mix in response to significant cost inflation Organic Net Sales¹ +18% Segment Op Profit² +29% • Broad-based growth across U.S. Meals & Baki
Slide 18: Third Quarter Fiscal 2023 Pet
Third Quarter Fiscal 2023 Pet Segment Results Segment Highlights Pet Q3 • Q3 organic net sales growth includes +DD growth in dry dog & cat food and +HSD growth in dog treats Organic Net Sales¹ +14% Segment Op Profit² -7% • Q3 net sales accelerated from Q2 trend due to improved customer service, incr
Slide 19: Third Quarter Fiscal 2023 North America Foodservice
Third Quarter Fiscal 2023 North America Foodservice Segment Results Segment Highlights North America Foodservice Q3 • Q3 organic net sales growth driven by positive price/mix, including a 1-point benefit from index Organic Net Sales¹ +19% pricing on bakery flour Segment Op Profit² +134% • Q3 profit
Slide 20: Third Quarter Fiscal 2023 International
Third Quarter Fiscal 2023 International Segment Results Segment Highlights International Q3 • Q3 organic net sales growth driven by broad-based growth in Europe & Australia, Distributor markets, Organic Net Sales¹ +8% Brazil, and China Segment Op Profit² +27% • Q3 profit growth driven by positive pr
Slide 21: Third Quarter Fiscal 2023 Joint Ventures
Third Quarter Fiscal 2023 Joint Ventures Q3 AFTER-TAX JV EARNINGS: $13MM VS $30MM LY Joint Venture Results Q3 Joint Venture Highlights NET SALES¹ Q3 • CPW and HDJ net sales growth driven by positive CPW +2% price/mix, partially offset by lower volume HDJ +1% • After-tax earnings decline driven by hi
Slide 22: Third Quarter Fiscal 2023 Margin Results
Third Quarter Fiscal 2023 Margin Results Adjusted Gross Margin1 Adj. Op. Profit Margin1 (% of Net Sales) (% of Net Sales) 33.8% 31.4% 34.4% 33.9% 15.7% 14.9% Q3 F22 Q3 F23 F19 4 Qtrs Ended Q3 Q3 F22 Q3 F23 F23 • Q3 Adj. Gross Margin increase driven by positive price/mix and HMM cost savings, partial
Slide 23: Third Quarter Fiscal 2023 Other Income Statement Items
Third Quarter Fiscal 2023 Other Income Statement Items • Adjusted Unallocated Corporate Expenses Increased $89MM • Net Interest Expense Increased $12MM • Adjusted Effective Tax Rate 21.6% vs. 21.0% LY¹ • Average Diluted Shares Outstanding -2% vs. LY General Mills Third Quarter Fiscal 2023 (1) Non-GA
Slide 24: Nine-month Fiscal 2023 Financial Results
Nine-month Fiscal 2023 Financial Results 9 MONTHS TOTAL GENERAL MILLS $MM VS. LY Net Sales $15,064 +7% Organic Net Sales1 +12% Adjusted Operating Profit1 $2,568 +11%2 Adjusted Diluted EPS1 $3.18 +14%2 (1) Non-GAAP measure. See appendix for reconciliation General Mills Third Quarter Fiscal 2023 (2) C
Slide 25: Nine-month Fiscal 2023 Balance Sheet and Cash Flow
Nine-month Fiscal 2023 Balance Sheet and Cash Flow Operating Cash Flow ($ IN MILLIONS) • Capital Investments = $351MM $2,228 $2,027 • Dividends Paid = $967MM • Net Shares Repurchased = $984MM F22 F23 General Mills Third Quarter Fiscal 2023 25
Slide 26: Raising Fiscal 2023 Financial Outlook
Raising Fiscal 2023 Financial Outlook PREVIOUS UPDATED KEY FINANCIAL METRICS* F23 OUTLOOK F23 OUTLOOK Organic Net Sales Growth ~+10% +10 to +11% Adjusted Operating Profit Growth† +6 to +7%1,2 +7 to +8%1,2 Adjusted Diluted EPS Growth† +7 to +8%1,2 +8 to +9%1,2 Free Cash Flow Conversion 90%+ 90%+ 1 In
Slide 27: Today's Key Messages
Today’s Key Messages • Delivered Broad-based Topline Growth and Strong Bottom-line Results in Q3 • Continuing to Execute Well Against our Accelerate Strategy and F23 Priorities • Raising Full-year Guidance on Net Sales, Operating Profit, and EPS General Mills Third Quarter Fiscal 2023 27
Slide 28: A Reminder on Non-GAAP Guidance
A Reminder on Non-GAAP Guidance Our fiscal 2023 outlook for organic net sales growth, adjusted operating profit growth, adjusted diluted EPS growth, and free cash flow conversion are non-GAAP financial measures that exclude, or have otherwise been adjusted for, items impacting comparability, includi
Slide 29: Appendix: Third Quarter Fiscal 2023 North America Retail Operating Results
Appendix: Third Quarter Fiscal 2023 North America Retail Operating Results NET SALES % VS. LY Operating Unit Q3 U.S. Snacks +19% U.S. Meals & Baking Solutions +22% U.S. Morning Foods +7% Canada +2% Canada Constant-currency¹ +8% General Mills Third Quarter Fiscal 2023 (1) Net sales growth in constant
Slide 30: Reconciliation of Q3 Canada Constant-Currency Net Sales Growth
Reconciliation of Third Quarter Fiscal 2023 Canada Operating Unit Constant-Currency Net Sales Growth General Mills Third Quarter Fiscal 2023 *Table may not foot due to rounding 30
Slide 31: Reconciliation of Third Quarter Fiscal 2023 Organic Net Sales Growth
Reconciliation of Third Quarter Fiscal 2023 Organic Net Sales Growth General Mills Third Quarter Fiscal 2023 *Table may not foot due to rounding 31
Slide 32: Reconciliation of Q3 Adjusted Operating Profit and Constant-currency Growth
Reconciliation of Third Quarter Fiscal 2023 Adjusted Operating Profit and Related Constant-currency Growth Rate General Mills Third Quarter Fiscal 2023 *Table may not foot due to rounding 32
Slide 33: Reconciliation of Q3 Adjusted Diluted EPS and Constant-currency Growth
Reconciliation of Third Quarter Fiscal 2023 Adjusted Diluted EPS and Related Constant-currency Growth Rates *Table may not foot due to rounding General Mills Third Quarter Fiscal 2023 **See reconciliation of tax rate items for tax impact of individual items 33
Slide 34: Reconciliation of Nine-month Fiscal 2023 Organic Net Sales Growth
Reconciliation of Nine-month Fiscal 2023 Organic Net Sales Growth General Mills Third Quarter Fiscal 2023 *Table may not foot due to rounding 34
Slide 35: Reconciliation of Nine-month Adjusted Operating Profit Growth
Reconciliation of Nine-month Fiscal 2023 Adjusted Operating Profit and Related Constant-currency Growth Rate General Mills Third Quarter Fiscal 2023 *Table may not foot due to rounding 35
Slide 36: Reconciliation of Nine-month Adjusted Diluted EPS Growth
Reconciliation of Nine-month Fiscal 2023 Adjusted Diluted EPS and Related Constant-currency Growth Rates *Table may not foot due to rounding General Mills Third Quarter Fiscal 2023 **See reconciliation of tax rate items for tax impact of individual items 36
Slide 37: Reconciliation of Q3 Constant-currency Segment Operating Profit Growth
Reconciliation of Third Quarter Fiscal 2023 Constant-currency Segment Operating Profit Growth General Mills Third Quarter Fiscal 2023 *Table may not foot due to rounding 37
Slide 38: Reconciliation of Third Quarter Fiscal 2023 Adjusted Gross Margin
Reconciliation of Third Quarter Fiscal 2023 Adjusted Gross Margin General Mills Third Quarter Fiscal 2023 *Table may not foot due to rounding 38
Slide 39: Reconciliation of Four Quarters Ended Q3 Fiscal 2023 Adjusted Gross Margin
Reconciliation of Four Quarters ended Third Quarter Fiscal 2023 Adjusted Gross Margin General Mills Third Quarter Fiscal 2023 *Table may not foot due to rounding 39
Slide 40: Reconciliation of Fiscal 2019 Adjusted Gross Margin
Reconciliation of Fiscal 2019 Adjusted Gross Margin General Mills Third Quarter Fiscal 2023 *Table may not foot due to rounding 40
Slide 41: Reconciliation of Q3 Adjusted Operating Profit Margin
Reconciliation of Third Quarter Fiscal 2023 Adjusted Operating Profit Margin General Mills Third Quarter Fiscal 2023 *Table may not foot due to rounding 41
Slide 42: Reconciliation of Third Quarter Fiscal 2023 Adjusted Tax Rates
Reconciliation of Third Quarter Fiscal 2023 Adjusted Tax Rates *Table may not foot due to rounding General Mills Third Quarter Fiscal 2023 **Earnings before income taxes and after-tax earnings from joint ventures 42
Slide 43: Reconciliation of Nine-month Fiscal 2023 Adjusted Tax Rates
Reconciliation of Nine-month Fiscal 2023 Adjusted Tax Rates *Table may not foot due to rounding General Mills Third Quarter Fiscal 2023 **Earnings before income taxes and after-tax earnings from joint ventures 43