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 and uncertainties that
could cause actual results to differ materially from the potential results discussed in the forwardlooking statements. In particular, our predictions about future net sales and earnings could be
affected by a variety of factors, including: competitive dynamics in the consumer foods industry and
the markets for our products, including new product introductions, advertising activities, pricing
actions and promotional activities of our competitors; economic conditions, including changes in
inflation rates, interest rates, tax rates, or the availability of capital; product development and
innovation; consumer acceptance of new products and product improvements; consumer reaction to
pricing actions and changes in promotion levels; acquisitions or dispositions of businesses or assets;
changes in capital structure; changes in the legal and regulatory environment, including labeling and
advertising regulations and litigation; impairments in the carrying value of goodwill, other intangible
assets, or other long-lived assets, or changes in the useful lives of other intangible assets; changes in
accounting standards and the impact of significant accounting estimates; product quality and safety
issues, including recalls and product liability; changes in consumer demand for our products;
effectiveness of advertising, marketing and promotional programs; changes in consumer behavior,
trends and preferences, including weight loss trends; consumer perception of health-related issues,
including obesity; consolidation in the retail environment; changes in purchasing and inventory levels
of significant customers; fluctuations in the cost and availability of supply chain resources, including
raw materials, packaging and energy; disruptions or inefficiencies in the supply chain; volatility in the
market value of derivatives used to manage price risk for certain commodities; benefit plan expenses
due to changes in plan asset values and discount rates used to determine plan liabilities; failure or
breach of our information technology systems; foreign economic conditions, including currency rate
fluctuations; and political unrest in foreign markets and economic uncertainty due to terrorism or war.
The company undertakes no obligation to publicly revise any forward-looking statements to reflect
any future events or circumstances.
7226-2
We’re Focused on
Growing Consumer Groups
Emerging Markets
Expanding Middle Class
Adults 55+
Millennials
U.S. Multiculturals
7226-4
Opportunity: Emerging Markets
Middle Class Households in
China, India, Brazil, Indonesia
% Urbanized by 2020
(Millions)
% Women Working by 2020
86%
384
71%
59%
66%
63%
56%
200
34%
26%
2010
Source: Euromonitor 2010
2020
China
Indonesia
India
Brazil
7226-5
Opportunity: Adults 55+
• 25% of U.S. Population
in 2010
• 30% of Population by 2020
• Strong Health Focus,
Read Ingredient Labels
Source: U.S. Census Bureau
7226-6
Opportunity: Millennials
• 20 to 37 Years Old
• 77 Million U.S. Consumers
• 63% of U.S. Moms by 2020
• Like Variety, Ethnic Flavors,
Experimentation
Source: U.S. Census Bureau
7226-7
Opportunity: U.S Multiculturals
• 50% of Births Today
• By 2060, 57% of
U.S. Population
• Hispanics Driving Growth
Source: U.S. Census Bureau
7226-8
Our Business Portfolio is Built for Growth
RTE Cereal
$3.9 Billion
Baking Products,
Dough, Vegetables,
Other
Snacks
Super-premium
Ice Cream
$3.2 Billion
$950 Million
Convenient
Meals
$2.8 Billion
Yogurt
$3.0 Billion
Fiscal 2014 Worldwide Net Sales*: $19.2 Billion
* Non-GAAP measure. Includes $17.9 billion consolidated net sales plus $1.3 billion proportionate share of joint venture net sales.
7226-9
Consumers are
Driving Growth in Our Categories
2013 Retail Sales
Projected
5-Yr. CGR
RTE Cereal
$28 Billion
+5%
Ice Cream
$77 Billion
+7%
Yogurt
$80 Billion
+9%
Ready Meals
$91 Billion
+5%
$305 Billion
+6%
Global Category
Sweet & Savory Snacks
Source: Euromonitor 2013
Sweet & Savory Snacks includes Bars, Salty, Fruit, Nuts, Dessert Mixes, Cakes, and Pastries
7226-10
We’re Participating in
Faster-growing International Markets
$ in Billions
Europe Region
35% Outside
U.S.*
$2.2
Canada
1.2
Asia/Pacific
1.0
Latin America
1.0
CPW 50% Share
1.0
HD Japan 50% Share
.2
$6.6
Fiscal 2014 Worldwide Net Sales*: $19.2 Billion
*Non-GAAP measure. Includes $17.9 billion consolidated net sales plus $1.3 billion proportionate share of joint venture net sales.
7226-11
Product Quality and
Development Capabilities
Fiscal 2014
New Products % Retail Sales*
4.8
4.0
3.1
2.7
2.0
1.7
1.2
Sources of
Protein
Quality
Assurance
Great Tasting
High Fiber
*Source: Nielsen-Total U.S. All Channels
Mainstream and
Gluten Free
7226-12
Supply Chain Capabilities
(Fiscal Years)
COGS HMM
$4 Billion
Sourcing
$2 Billion
>$400MM
2010-14
Cumulative
2015
Plan
Manufacturing
Logistics
2010-2020
Cumulative
Goal
7226-13
Direct Selling Capabilities
Across Retail Channels
• Sustain Strong Customer
Partnerships
• Be Everywhere Consumers Shop
• Drive Distribution and In-store
Merchandising
7226-14
Marketing Capabilities
U.S. Retail Media Investment
3% Digital
Fiscal 2005
20%
Digital
Fiscal 2015 Plan
7226-15
Our Fiscal 2015 Growth Targets
Fiscal 2015
Constant-currency
Growth
Fiscal 2014
Base
$17.9 Billion
Net Sales
+MSD
$3.2 Billion
Adj. Segment Operating Profit*
+MSD
$2.82
Adjusted Diluted EPS*
+HSD
* Non-GAAP measure. See appendix for reconciliation.
7226-16
Today’s Agenda
2015 Growth Plan Overview ……………………………………………… Ken Powell
U.S. Retail Priorities
………………………………………………… Jeff Harmening
Sales Capabilities ……………………………………………………… Shawn O’Grady
Q&A Discussion
Convenience Stores & Foodservice Priorities …………… Bethany Quam
International Priorities
Financial Priorities
………………………………………………… Chris O’Leary
………………………………………………………… Don Mulligan
Q&A Discussion
7226-17
Our U.S. Retail Business Today
Big G
$2.3 Billion
Small Planet
Foods
Baking
Products
$1.8 Billion
Snacks
$348 Million
$1.8 Billion
Yoplait
$1.3 Billion
Meals
$1.4 Billion
Frozen
Foods
$1.5 Billion
2014 U.S. Retail Net Sales: $10.6 Billion
7226-19
U.S. Retail Leadership
Jeff Harmening
Juliana Chugg
Frozen Foods
David Clark
Yoplait
Michele Meyer
Meals
Jim Murphy
Big G Cereals
Liz Nordlie
Small Planet Foods
Ann Simonds
Baking Products
Anton Vincent
Snacks
7226-20
U.S. Food & Beverage Trends
Total Food & Beverage
Growth Has Slowed
Branded Players Drive
Food & Beverage Growth
(F12-F14, 2-year CAGR)
4.8%
1.9%
3.3%
2.0%
1.5%
2.3%
1.5%
F09-F11
Avg
F12
F13
F14
Units
Flat
-0.7%
Flat
+0.1%
Price
+3.3%
+5.5%
+2.3%
+1.4%
Source: Nielsen XAOC; 2-year CAGR ended 6.07.14
Total
Food & Bev
Branded
Private
Label
Units
Flat
+0.4%
-0.5%
Price
+1.9%
+1.6%
+2.0%
7226-21
Our U.S. Retail Segment
Net Sales Performance
($ in Billions)
Operating
Margin
$10.5
$10.6
$10.6
$10.2
$10.2
F10
F11
F12
F13
F14
23%
23%
22%
22%
22%
7226-22
We are Leading Growth
in Many Categories
Fiscal 2014
Category
($ in Billions)
Grain Snacks
$3.2
Share
+/- LY
41.3%
3.8pts
Frozen Hot Snacks
2.1
24.4
1.0
Fruit Snacks
1.0
47.7
0.9
RTS Soup
1.9
39.5
0.7
Mexican Products*
2.7
17.4
0.5
Frozen Pizza
4.3
9.1
0.5
RTE Cereal
9.0
31.0
0.3
Refrig. Baked Goods
2.0
70.0
0.0
Dessert Mixes
1.8
39.7
-0.9
Dry Packaged Dinners
2.4
16.3
-1.8
Yogurt
7.2
24.1
-2.3
* Excludes snack aisle
Source: Nielsen XAOC
7226-23
3 Key Operating Principles
• Sharpen Our Consumer-first Focus
• Foster Our HMM Culture
• Execute Brilliantly
7226-24
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
• Deliver HMM
7226-25
Breakfast Trends
More Consumers Eating
Breakfast at Home
(% of Breakfast Occasions)
78
80
% of In-home/Carried Breakfasts Including:
RTE Cereal
9
At Home
RTE Cereal is the #1 Food
Consumed for Breakfast In-home
Away From
Home
F09
13
9
11
Skipped
28
Fruit
14
Eggs/Omelettes
13
Bread
13
Hot Cereal
8
Pancake/Waffle/Fr Tst
8
Bacon
4
Yogurt
4
Sausage
3
Sandwiches
3
Toaster Pastries
3
Bagels
3
F14
Source: The NPD Group's National Eating Trends®; 1st chart is 1 year ended Feb 2014, 2nd chart is 2 years ended Feb 2014
7226-26
Demographic Trends Favor Cereal
Cereal is Popular with
Growing Age Groups
Hispanic Cereal
Consumption is High
(Cereal Eatings per Capita)
92.3
126
103
96
22.7
23.1
89.7
84
Under
13
Population
Growth
to 2020:
8%
Age
13-34
Age
35-54
Age
55+
6%
-2%
22%
F14 Penetration
General
Population
Source: NPD data 3 years ended Feb 2014; U.S. Census projections April 2012; Nielsen Panel F14, Buy Rate in pounds
F14 Buy Rate
Hispanic
7226-27
Cereal Share of Voice Has Declined
(Advertising Spending Index; F11 = 100)
RTE Cereal
100
Alternative
In-home Breakfast Items
100
107
84
F11
F14
F11
Source: Nielsen Media Research; F14 figures are YTD April + May projected.
Alternative in-home breakfast items include yogurt, eggs, bacon, sausage, toaster pastries, bars, frozen breakfast, and others.
F14
7226-28
General Mills Cereal Trends
Big G Cereal Net Sales
General Mills RTE Cereal
Dollar Market Share
($ in Billions)
$2.3
31.0
$1.9
29.7
F07 F08 F09 F10 F11 F12 F13
Source: Nielsen All-outlet F07-F09, Nielsen XAOC F10-F14
F14
F07 F08 F09 F10 F11 F12 F13 F14
7226-29
U.S. Cereal: Core Renovation
7226-30
U.S. Cereal: Consumer-first Marketing
7226-31
Back to Basics on Yellow Box Cheerios
• 100% Whole Grain Oats
• 1 Gram of Sugar
• No Artificial Colors
• No Artificial Flavors
7226-32
Protein Innovation
7226-33
Expanding Our Gluten-free Platform
Chex Franchise Retail Sales
CGR = +10%
F10
Source: Nielsen XAOC
F11
F12
F13
F14
7226-34
The Power of Oats
7226-35
U.S. Yogurt:
Finished Fiscal 2014 with Clear Momentum
Yoplait Dollar Share of
Greek Segment
Retail Sales Growth
Original Style Yoplait
(Fiscal 2014)
(Fiscal 2014 vs LY)
8.5% 9%
10%
10% 10% 10% 10%
6%
Cal
2013
Cal
2013
Jan
Feb
Mar
Apr
F14 Retail Sales +41%
Source: Nielsen XAOC
May
Cal
2013
-6%
10%
6%
2%
Jan
Feb
Mar
Apr
May
F14 Retail Sales +2%
7226-36
Consumers Shop Across Yogurt Segments
Loyalty (Volume Share of Category Requirements)
40%
Kid
36%
Greek
Light
32%
31%
Adult Specialized Health
Regular
28%
20%
Large Size
Adult Beverage
Source: Nielsen Panel – All Outlet, 52 weeks ended 11.23.13
14%
7226-37
Lead Growth in Greek Segment
in Fiscal 2015
Taste-off Across America
¹ Comparison based on a national taste test of Yoplait Greek 100 Strawberry yogurt and Chobani ® Simply 100 Strawberry yogurt
² Comparison based on a national taste test of Yoplait Greek Blueberry yogurt and Chobani ® Blueberry fruit on the bottom yogurt
7226-38
Drive Established Yogurt Growth
7226-39
Better-for-you Snacks Portfolio
7226-40
Leading Grain Snack Growth
Nature Valley Snacks
Retail Sales
Fiber One Snacks
Retail Sales
($ in Millions)
($ in Millions)
CGR = +12%
CGR = +14%
$416
$828
F10
Source: Nielsen XAOC
F11
F12
F13
F14
F10
F11
F12
F13
F14
7226-41
New Snack Platforms
June Launches
2 Varieties
3 Varieties
2 Varieties
7226-42
Natural & Organic Snack Innovation
June Launches
4 Varieties
4 Varieties
7226-43
Sustaining Momentum
Frozen Hot Snacks
Totino’s Hot Snacks
Retail Sales
CGR = +4%
F10
Source: Nielsen XAOC
F11
F12
F13
F14
7226-44
Sustaining Momentum
Mexican Products
Old El Paso Share Gains
(F14 Dollar Share +/- LY)
+4.7
+1.3
Kits
Source: Nielsen XAOC
*Total Mexican is shelf-stable Mexican products ex-snack aisle
Shells
+0.4
+0.5
Seasoning
Total
Mexican*
7226-45
Other U.S. Retail News
Baking Products
Soup
7226-46
First Half Fiscal 2015
U.S. Retail Innovation
140+ New Items in 1H
7226-47
HMM Initiatives
U.S. Retail COGS HMM
(Index: F10 = 100)
102
F10
F11
F12
F13
F14
F15
Plan
7226-48
Increasing Media Spending in Fiscal 2015
U.S. Retail
Media Expense
+MSD
F14
F15 Plan
7226-49
U.S. Retail Summary
• Operating with a Consumer-first Mindset to
Drive MSD Net Sales Growth
• Cereal, Yogurt, and Better-for-you Snacks are
Top Priorities
• HMM Will Fund Consumer Investment and Help
Deliver MSD Profit Growth
7226-50
U.S. Retail Sales
2,000 Sales Employees
Frozen
Refrigerated
Expertise In 25 Categories
Dry
Across 3 Temperature States
Average 680 SKUs/Store
7226-52
U.S. Retail Sales Mission
Today’s Topics:
• Growth Across Channels
• Advantaged Merchandising
• Expanded Distribution
7226-53
Drive Growth on Key Products
7226-54
Retail Channel Food & Beverage Sales
Fiscal 2014 Total U.S. Retail Food & Beverage Sales = $655 Billion
(4-yr CGR = +4%)
$281
$129
$68
$62
$59
$23
4-yr CGR:
$15
$12
$7
Traditional
Grocery
Super
centers
Convenience
Stores
Club
Stores
Small
Format
Natural/
Organic
Mass
Merchandise
Small
Grocery
Online
+2%
+4%
+3%
+6%
+7%
+11%
+3%
+4%
+30%
Source: Kantar Retail, Nielsen scanner data, company estimates
7226-55
General Mills Growth Across Channels
(U.S. Retail Deliveries, 5-yr CGR)
+DD
+HSD
+MSD
+HSD
+MSD
+LSD
FLAT
Traditional
Grocery
Source: Internal delivery data
Super
centers
Mass
Merchandisers
Club
Stores
Natural/
Organic
Small
Format
Online
7226-56
Putting the Consumer First:
Club Channel
• General Mills Q4 F14 Sales
Growth +9%
• Strong Core Distribution;
F14 Distribution +4%
• Channel Over-indexes with
Healthful Foodies
Source: Internal delivery data; Nielsen scanner and panel data
7226-57
Putting the Consumer First:
Small Format Stores
• General Mills F14 Sales
Growth +8%
• Established Product
Distribution +6%
• Channel Over-indexes with
55+ Consumers
Source: Internal delivery data; Nielsen scanner and panel data
7226-58
Putting the Consumer First:
Natural/Organic Channel
• Distribution Gains for
Larabar, Cascadian Farm
• Channel Over-indexes with
Millennial Consumers
Source: Internal delivery data; Nielsen panel data
7226-59
Putting the Consumer First:
Online
• Leveraging Natural/
Organic Brands
• Driving Growth for
Larabar; 7% of Total Sales
• Channel Appeals to
Millennial Consumers
Source: Internal delivery data; Nielsen panel data
7226-60
Fiscal 2014 Merchandising Performance
Category Merchandising Dynamics
(Composite GIS Categories, F14)
Merch
Support
Lift
Merch Incremental
Volume
Volume
GIS vs.
Category:
Source: Nielsen
7226-61
Fiscal 2015 Key Merchandising Initiatives
• Focus on Largest, Most Responsive Categories
• Focus on Largest, Most Responsive Brands
• Leverage Brand Innovation and News
• Increase In-store Impact with Themed Events
7226-62
Themed Merchandising Events
7226-63
Distribution Expansion Across All Channels
Avg. # of General Mills SKUs in Stores
680
Snacks/Bars +9
645
630
610
F11
F12
Source: Nielsen scanner data; Total US – Grocery + Supercenter
F13
Cereal
+6
Yogurt
Even
F14
7226-64
Distribution Expansion:
Grain Snacks
• Shelf Set
Expand Section Size
• Product Variety
Optimized at 160 Items
• Merchandising
Focus on Largest Brands
7226-65
Distribution Expansion:
Grain Snacks
Category Size
vs. Distribution
Category Shelf Space
(Linear Feet of Space)
CGR = +8%
1.1%
0.9%
Share of
Share of Food
Food Dollars Distribution Points
Source: Nielsen Scanner and In-store audit data; Total U.S. – Grocery + Supercenter
F12
F13
F14
7226-66
Distribution Expansion:
Cereal
• Shelf Set
Power Brands/Navigation
• Product Variety
Optimized at 250 Items
• Merchandising
Focus on Largest Brands
7226-67
Distribution Expansion:
Cereal
GIS Cereal Distribution
31.0
Share of
Category Dollars
24.3
24.7
Share of
Distribution Points
Share of
Facings
Source: Nielsen XAOC (Dollar Share); Grocery + Supercenter (Distribution/Facings Share); 52 weeks ended 05.24.14
7226-68
Distribution Expansion:
Yogurt
• Shelf Set
Expand Section Size
• Product Variety
Balance Segment Mix
• Merchandising
Drive Sales Across Segments
7226-69
Distribution Expansion:
Yogurt
Consumer-driven Yogurt Shelf Set
Prem
Natural/
Organic
Greek
Regional
Retailer Brand
Fage
Traditional
National Brands
Chobani
Oikos
Yoplait
Retail
Brand
Yoplait
Light
Yoplait
Original
Adult
Bev
Kid
ASH
Dannon
Regional
• Consumers Shop Across Segments
• Align with Yogurt Consumer Demographics
7226-70
General Mills Yogurt Distribution Trend
Avg. # of GIS Yogurt SKUs in Distribution +/- LY
5
2
0
-4
-5
F13
Q1
F13
Q2
-5
-5
F13
Q4
F14
Q1
-6
F13
Q3
Source: Nielsen Scanner data; Total US – Grocery + Supercenter
F14
Q2
F14
Q3
F14
Q4
7226-71
Expand Distribution Across New Outlets
Hispanic
Natural/Organic
Online
7226-72
Building Capabilities
U.S. Retail Sales
2013 Kantar Rankings
Composite Score
28%
25%
24%
19%
18%
13%
11%
10%
7%
#1
P&G
#2
Unilever
#3
General
Mills
#4
Kraft
Foods
Group
#5
PepsiCo
#6
Nestle
#7
Kellogg
#8
CocaCola
6%
#9
#10
ConAgra KimberlyClark
#1 Best Sales Force/Customer Teams
#1 Best Supply Chain Management
Source: Kantar Retail PoweRanking 2013
7226-73
Outlook for Fiscal 2015
• Growth Across Channels
• Advantaged Merchandising
• Expanded Distribution
7226-74
K-12
Colleges & Universities
Foodservice Operators
Delivering General
Mills brands to over
1 MILLION
away from home
locations every year
Healthcare
Convenience Stores
A Large Market Opportunity
U.S. Food Expenditures
(2014 Estimate)
53%
At-home
47%
Away-fromhome
$1.3 Trillion
Source: Technomic
7226-77
Foodservice Industry Sales Trend
($ in Billions)
CGR = +2.5%
$562
$565
$579
2009
2010
2011
$602
$620
2012
2013
Calendar Years
Source: Technomic 2013
7226-78
General Mills
Convenience Stores & Foodservice
Net Sales Performance
($ in Millions)
$1,741
F10
$1,841
F11
$1,983
$1,959
$1,919
F12
F13
F14
7226-79
Building Our Brands in CS&F
Focus Six Platforms
(% of Total F14 Platform Sales)
Frozen
Breakfast
Biscuits
Snacks
Baking
Mixes
Yogurt
Cereal
F14 Net Sales
$875 Million
7226-80
CS&F Net Sales Performance
Focus Six Platforms
($ in Millions)
CGR = +4%
+2%
F10
+8%
+2%
F12
F13
+4%
+4%
F11
F14
7226-81
Innovating on Our Brands
7226-82
Strong Earnings Performance Over Time
CS&F
Segment Operating Profit
($ in Millions)
$307
$178
$132
Profit
Margin:
Note: F04 not restated to current classification
F04
F09
F14
7.5%
8.9%
16.0%
7226-83
Key Channels – Prospects for Growth
(Food and Non-alcoholic Beverage Channel Sales)
2013
Actual Sales
($ in Billions)
Total Foodservice
2014 Est.
Nominal
Growth
(vs. LY)
$621
3%
K-12 Schools
$18
2%
Colleges & Universities
$15
4%
$49
4%
Convenience Stores
Sources: C-Stores – IRI AllScan (packaged foods and non-alcoholic beverage categories only) 2014 growth estimates – Kantar
Foodservice – Technomic 2014
7226-84
K-12 Schools
Breakfast
12 Million U.S. Students
Eat School Breakfasts
Snacks
7226-85
Colleges & Universities
Gluten Free
22 Million College Students
Snacking
7226-86
Convenience Stores
General Mills
Snacks Sales in C-stores
CGR = +9%
F09
Source; IRI AllScan
F10
F11
F12
F13
F14
7226-87
Strengthening Our Positioning in C-stores
Sales Capabilities
New Segment:
Ready-to-eat Bakery
7226-88
New Business Opportunity
Go-GURT Yogurt
in Happy Meals
7226-89
CS&F Holistic Margin Management
• Increasing HMM Cost
Savings
COGS
Productivity
Admin
Processes
Mix
Management
• SKU Rationalization
HMM
Pricing
Consumer &
Trade Programs
• Mix Management
7226-90
CS&F Performance Outlook for Fiscal 2015
• MSD Sales Growth
– Solid Growth for Six Focus Platforms
• HSD Operating Profit Growth
• Continue Shaping Our Portfolio
• Putting the Consumer First with Our Brands and
Product Innovation Away From Home
7226-91
International Portfolio Evolution
(% Worldwide Net Sales from Outside the U.S.)
F04*
F14
23%
35%
Worldwide Net Sales**
Total General Mills:
Outside the U.S.:
$12.3B
$19.2B
$2.8B
$6.6B
* Fiscal 2004 not restated for current classifications.
** Non-GAAP measure. Includes proportionate share of JV net sales. See appendix for reconciliation.
7226-93
International Segment Overview
(Net Sales, Fiscal 2014)
Asia/Pacific
$1.0 Billion
Europe
Latin America
$2.2 Billion
$1.0 Billion
Canada
$1.2 Billion
Segment Total: $5.4 Billion
7226-94
Strong Growth Performance
International Segment
Net Sales
International Adjusted
Segment Operating Profit*
($ in Billions)
($ in Millions)
CGR = +16%
CGR = +17%
$5.2 $5.4
$515 $535
$430
$4.2
$2.9
$2.6 $2.7
F09
F10
F11
$239
F12
F13
* Non-GAAP measure. See appendix for reconciliation.
F14
F09
$291
$206
F10
F11
F12
F13
F14
7226-95
CPW Overview
(Fiscal 2014)
#1 Positions in
Emerging Markets
Emerging
Developed
•
•
•
•
•
Indonesia
Philippines
Malaysia
Thailand
Turkey
•
•
•
•
•
Russia
Chile
Saudi Arabia
Ukraine
Singapore
Net Sales: $2.1 Billion
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A Broad International Portfolio
Yogurt
$1.5 Billion
Snacks
$0.6 Billion
Superpremium
Ice Cream
RTE Cereal
82% of Net Sales
Across
5 Global Platforms
$1.3 Billion
$1.0 Billion
Convenient
Meals
$1.0 Billion
2014 Net Sales Outside U.S.*: $6.6 Billion
* Non-GAAP measure. Includes proportionate share of JV net sales. See appendix for reconciliation.
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Focusing on the Middle Class Consumer
Middle Class Households in
China, India, Brazil, Indonesia
(Millions)
384
200
2010
Source: Euromonitor 2010
2020
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International Segment
Fiscal 2015 Priorities
• Emerging Markets Lead Topline Growth
• Stable, Profitable Growth in Developed Markets
• Strong Execution
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Greater China Summary
Constant Currency Net Sales*
Our Portfolio in China
(% of F14 Net Sales)
CGR = +15%
+DD
Snacks
Wanchai
Ferry
F10
F11
F12
F13
F14
Häagen-Dazs
F15
Plan
* Actual net sales in local currency translated to USD at a fixed exchange rate.
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Greater China
Häagen-Dazs Fiscal 2015 Growth Plans
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Greater China
Wanchai Ferry Fiscal 2015 Growth Plans
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Greater China Yoplait Launch
China Yogurt Category Sales
(Calendar Years)
$17B
$8B
$4B
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Source: Euromonitor 2013
• Consumer-first Launch Plan
• Leveraging Sodiaal’s Global
Dairy Expertise
• Project on Schedule
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AMEA Summary
• F14 Net Sales: $285MM
• Major Markets: Middle East,
India, SE Asia, South Korea
• Emerging Middle Class Driving
Strong Packaged Food Growth
• Business Focus on Sweet
Snacking
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AMEA Fiscal 2015 Plans
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Latin America Summary
LATAM Region Net Sales
($ in Millions)
$1,020
+DD
$876
$405
F12
F13
F14
F15 Plan
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Brazil News: Festa Junina
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Yoki Snacks & Soccer
World Flavors
Argentina
Churrasco-flavored
Potato Chips
U.S.
Bacon-flavored
Peanuts
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Other First Half Fiscal 2015
Brazil News & Innovation
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First Half Fiscal 2015
Canada Innovation
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Leading Emergence of Greek Yogurt
in Key Western European Markets
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Europe Ice Cream & Meals
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CPW Developed Market Plans
Category Sales Growth
(Latest 52 Weeks % +/- LY)
UK/Ireland
France
Germany
-2
+1
Italy
-4
Spain
-4
Australia/New Zealand
-2
Total Developed Markets
Source: Nielsen, period ended April 2014
+3%
Flat
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CPW Emerging Market Plans
Category Sales Growth
(Latest 52 Weeks % +/- LY)
Mexico
Brazil
Source: Nielsen, period ended April 2014
-2%
+13
Russia
+5
Turkey
+7
South Africa
+6
Southeast Asia
+8
Total Emerging Markets
+4
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International HMM Expansion
International Segment
COGS HMM Savings
CGR = +17%
+DD
F10
F11
F12
F13
F14
F15
Plan
Dumpling Automation
Brazil Factory Re-engineering
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Consumer-first Marketing
International Segment
Media Spending
CGR = +6%
+DD
F10
F11
F12
F13
F14
F15
Plan
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International Leadership
Chris O’Leary
Gary Chu
Greater China
Dave Dudick
Canada
Olivier Faujour
Yoplait SBU
Dave Homer
CPW
Christina Law
AMEA
Jon Nudi
Europe/
Australasia
Norio Mase
HDJ
Becky O’Grady
Häagen-Dazs SBU
Sean Walker
Latin America
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International Summary
• Middle-class Consumer Focus Will Drive Strong
Sales Growth in Emerging Markets
• Stable, Profitable Growth from Developed
Markets
• Constant-currency Growth Targets:
– International Net Sales +HSD
– International Segment Operating Profit +HSD
– JV After-tax Earnings +HSD
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Input Costs Inflationary,
Driven by Global Demand
Input Cost Inflation
• F14 Inflation Was
Above Plan
+10%
• Dairy Was Key Driver
Avg: +4-5%
+4%
+4%
+3%
F11
F12
F13
+3%
F14
• F15 Estimate is +3%
• Starting the Year 40%
Covered for F15
F15 Plan
Supply chain costs including raw materials, energy, wages, benefits, handling costs.
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COGS HMM Savings
(Fiscal Years, $ in Millions)
$4,000
>$400
$2,000
2010-2014 Cumulative
Savings
2015 Plan
Cumulative 2010-2020
Savings Goal
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Ongoing Benefits from HMM
Adjusted Gross Margin*
(as a % of sales)
36.2
F13
SG&A Expense
Excluding Media and R&D*
(as a % of sales)
35.4
Higher
than F14
13.6
13.2
Flat
to Lower
F14
F15 Plan
F13
F14
F15 Plan
*Non-GAAP measure. See appendix for reconciliation.
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Core Working Capital Trend
Core Working Capital
($ in Millions)
Net Sales Trend
($ in Millions)
-19% Cum
F11
F12
F13
+20% Cum
F14
F11
F12
F13
F14
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Balance Sheet Strength
Fiscal Year
2001
2002
2014
Operating Cash Flow to Debt
22%
10%
29%
Fixed Charge Coverage
5.3x
2.5x
8.0x
Debt/EBITDA*
2.4x
6.8x
2.5x
Moody’s Rating
A3
Baa2
A3
Fiscal 2001 and 2002 not restated for current classifications.
*Non-GAAP measure. See appendix for reconciliation.
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Operating Cash Flow
($ in Millions)
$2,926
$2,541
$2,407
Higher
than F14
• OCF has Increased at
7% CGR last 5 Years
• OCF > $2.6 Billion/Year
on Average Since F12
F12
F13
F14
F15 Plan
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Fixed Asset Investment
($ in Millions)
F15 CapEx Plan
(% of Total Budget)
$676
$664
$700
$614
Growth
38%
Essential
41%
Cost
Savings
21%
F12
F13
F14
F15
Estimate
Key Projects:
- Yoplait China Plant
- Snack Bar Capacity
- F16 New Products
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Free Cash Flow Conversion*
125%
110%
F12
*Non-GAAP measure. See appendix for reconciliation.
F13
103%
100%+
F14
F15 Plan
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Consistently Growing Dividends
+17%
$1.55
$1.12
$1.22
$1.64
$1.32
$0.96
F10
F11
F12
F13
F14
Current
Annualized
Rate
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Share Repurchases
Average Diluted
Shares Outstanding
(in Millions)
CGR = -1%
683
665
667
666
646
-3 to -4%
F10
F11
F12
F13
Yoplait
Yoki
F14
F15 Plan
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Corporate Incentive Grid
Rating Metrics
25% Net Sales Growth
25% Segment Operating Profit Growth
25% Adjusted Diluted EPS Growth
25% Return on Avg. Total Capital Increase
Performance Ranges for Each Metric Based on Peer Company Results
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Return on Average Total Capital*
12.7%
12.0%
F12
F13
Yoplait
Yoki
*Non-GAAP measure. See appendix for reconciliation.
11.6%
F14
12.0%
Higher
than F14
F15 Plan
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Fiscal 2015 Guidance Summary
($ in Millions, Except per Share)
Fiscal
2014
Net Sales
$17,910
Adjusted Gross Margin*
Media Expense
Fiscal 2015
Growth
+MSD¹
35.4%
Higher
$870
Faster than Sales
Adjusted Segment Operating Profit* $3,154
+MSD¹
Interest Expense
$302
+HSD
32.2%
Comparable
Tax Rate Excluding Items*
JV Earnings After Tax
$90
Avg. Diluted Shares Outstanding
646
Adjusted Diluted EPS*
*Non-GAAP measure. See appendix for reconciliation. ¹Constant-currency growth rate
$2.82
+HSD¹
-3 to -4%
+HSD¹
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Strong Returns to Shareholders
(Price Appreciation Plus Dividends, Compound Annual Growth)
Fiscal Years
General Mills
S&P 500
1984 – 2014
+14%
+12%
1994 – 2014
+11%
+9%
2004 – 2014
+12%
+8%
2009 – 2014
+20%
+18%
Source: Bloomberg
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Today’s General Mills Summary
• Our #1 Priority in 2015 is Accelerating Topline Growth
• Our Key Strategy is to Put Consumers First
• U.S. Retail Focus – Cereal, Yogurt, Snacks
• U.S. Sales Focus – Channels, Merchandising, Distribution
• CS&F Focus – 6 Focus Platforms, Renewed Topline Growth
• International Focus – Accelerating Sales Growth in
Emerging Markets; Developed Market Progress
• Financial Summary – Growth Consistent with
Our Long-term Model, Strong Cash Returns
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Reconciliation of Total Net Sales,
Including Proportionate Share of JV Net Sales
(Fiscal Years, $ in Millions)
2014
2004
$12,523
$9,441
5,387
1,629
$17,910
$11,070
1,247
1,212
$19,157
$12,282
Total Net Sales Non-United States,
Including Proportionate Share of JV Net Sales
$6,634
$2,841
Percentage of Total Net Sales Non-United States,
Including Proportionate Share of JV Net Sales
34.6%
23.1%
Net Sales:
United States
Non-United States
Total Net Sales
Proportionate Share of JV Net Sales
Total Net Sales, Including
Proportionate Share of JV Net Sales
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Reconciliation of Adjusted
International Segment Operating Profit
(Fiscal Years, $ in Millions)
2014
2013
2012
2011
2010
2009
$473
$490
$430
$291
$192
$239
62
25
--
--
14
--
$535
$515
$430
$291
$206
$239
International Segment
Operating Profit
Venezuela Currency Devaluation
Adjusted International
Segment Operating Profit
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Reconciliation of
Adjusted Segment Operating Profit
(Fiscal Years, $ in Millions)
2014
2013
$2,312
$2,393
Adjusted International
535
515
Convenience Stores & Foodservice
307
315
$3,154
$3,223
Unallocated Corporate Items
196
326
Divestiture (Gain)
(66)
U.S. Retail
Adjusted Segment Operating Profit
Restructuring, Impairment, and
Other Exit Costs
Venezuela Currency Devaluation
Operating Profit
Table does not foot due to rounding.
--
4
20
62
25
$2,957
$2,852
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Reconciliation of
Adjusted Diluted EPS
(Fiscal Years)
2014
2013
$2.83
$2.79
Mark-to-market Effects
(.05)
--
Divestiture Gain, net
(.06)
--
.01
.02
Tax Item
--
(.13)
Acquisition Integration Costs
--
.01
.09
.03
$2.82
$2.72
Diluted EPS
Restructuring
Venezuela Currency Devaluation
Diluted EPS Excluding Certain
Items Affecting Comparability
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Reconciliation of Adjusted Gross Margin
(Fiscal Years, $ in Millions)
2014
% of
Net Sales
$
Net Sales
Gross Margin as Reported
Mark-to-market Effects
Venezuela Currency
Devaluation
Adjusted Gross Margin
Table does not foot due to rounding.
$17,910
6,370
2013
% of
Net Sales
$
$17,774
35.6%
6,424
(48)
(4)
23
16
$6,344
35.4%
$6,436
36.1%
36.2%
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Reconciliation of
SG&A Expense Excluding Media and R&D
(Fiscal Years, $ in Millions)
2014
$
Net Sales
SG&A Expense, As Reported
% of
Net Sales
$17,910
3,474
2013
$
$17,774
19.4%
3,552
Advertising and Media Expense
870
895
Research and Development Expense
244
238
SG&A Expense, Excluding Advertising &
Media and Research & Development Expense
Table does not foot due to rounding.
$2,361
% of
Net Sales
13.2%
$2,419
20.0%
13.6%
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Reconciliation of Free Cash Flow
(Fiscal Years, $ in Millions)
2014
2013
2012
Net Income
$1,824
$1,855
$1,567
Net Cash Provided by
Operating Activities, As Reported
$2,541
$2,926
$2,407
(664)
(614)
(676)
$1,878
$2,312
$1,731
102.9%
124.6%
110.5%
Purchases of Land, Buildings, and
Equipment
Free Cash Flow
Free Cash Flow Conversion
Table does not foot due to rounding.
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Reconciliation of
Return on Average Total Capital
($ in Millions)
Net Earnings, Including Earnings
Attributable to Redeemable and
Noncontrolling Interests
Interest, Net, After-tax
Earnings Before Interest, After-tax
Mark-to-market Effects
2014
Fiscal Year
2013
2012
$1,861
191
2,052
(30)
$1,892
201
2,094
(3)
$1,589
239
1,828
66
2011
Tax Items
Restructuring Costs
Acquisition Integration Costs
Divestiture Gain, Net
Venezuela Currency Devaluation
Earnings Before Interest, After-tax for
Return on Capital Calculation
-4
-(36)
58
(85)
16
9
-21
-64
10
---
$2,047
$2,051
$1,968
Current Portion of Long-term Debt
Notes Payable
Long-term Debt
Total Debt
Redeemable Interest
Noncontrolling Interests
Stockholders' Equity
Total Capital
Accumulated Other Comprehensive Loss
After-tax Earnings Adjustments (a)
$1,251
1,112
6,424
8,786
984
471
6,535
16,775
1,340
(209)
$1,443
600
5,926
7,969
968
456
6,672
16,065
1,585
(204)
$741
526
6,162
7,430
848
461
6,422
15,160
1,744
(162)
$1,031
311
5,542
6,885
-247
6,366
13,497
1,011
(301)
Adjusted Total Capital
$17,906
$17,446
$16,742
$14,207
Adjusted Average Total Capital
$17,676
$17,094
$15,475
12.0%
12.7%
Return on Average Total Capital
11.6%
(a) Sum of current year and previous year after-tax adjustments
Table does not foot due to rounding.
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Reconciliation of
Tax Rate Excluding Items
(Fiscal Years, $ in Millions)
2014
Pre-tax
Income
Earnings* Taxes
As Reported
$2,655
Mark-to-market effects
(48)
$883
(18)
2013
Pre-tax
Income
Earnings* Taxes
$2,535
(4)
$741
(2)
Restructuring Costs
4
--
19
3
Integration Costs
--
--
12
4
Tax Items
--
--
--
85
62
4
25
4
--
--
$2,587
$836
Venezuela Currency Devaluation
Divestiture (Gain)
As Adjusted
(66)
$2,607
(30)
$840
Effective Tax Rate:
As Reported
33.3%
29.2%
As Adjusted
32.2%
32.3%
* Earnings before income taxes and after-tax earnings from joint ventures.
Table does not foot due to rounding.
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Reconciliation of Fiscal 2001 and 2002
Debt to EBITDA
(Fiscal Years, $ in Millions)
Total Debt*
Net Earnings
Cumulative Effect of Change in
Accounting Principle
2002
2001
$9,439
$3,428
$458
$665
(3)
--
$461
$665
33
17
239
350
$667
$998
Interest, Net
416
206
Depreciation and Amortization
296
223
$1,379
$1,427
Earnings Before Cumulative Effect of
Change in Accounting Principle
Earnings from Joint Ventures
Income Taxes
Earnings Before Taxes and
Earnings From Joint Ventures
EBITDA
Debit to EBITDA
Fiscal 2001 and 2002 not restated for current classifications.
* Notes Payable and Long-term Debt, including current portion.
6.8x
2.4x
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Reconciliation of Fiscal 2014
Debt to EBITDA
(Fiscal Years, $ in Millions)
2014
Total Debt*
$8,786
Net Earnings, Including Earnings Attributable
To Redeemable and Noncontrolling Interests
$1,861
After-tax Earnings from Joint Ventures
Income Taxes
Earnings Before Income Taxes and
After-tax Earnings From Joint Ventures
Interest, Net
Operating Profit
Depreciation and Amortization
EBITDA
Debit to EBITDA
* Notes Payable and Long-term Debt, including current portion.
Table does not foot due to rounding.
90
883
$2,655
302
$2,957
585
$3,543
2.5x
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