General Mills Outlines “Accelerate” Growth Strategy at 2021 CAGNY Conference
February 16 2021 - 7:30AM
Business Wire
Reaffirms Third-Quarter and Full-Year Fiscal
2021 Guidance
At the Consumer Analyst Group of New York (CAGNY) 2021
Conference, General Mills (NYSE: GIS) outlined its Accelerate
strategy to deliver top-tier shareholder returns. The company also
reaffirmed its fiscal 2021 third-quarter and full-year financial
guidance, which was originally provided on December 17, 2020.
Accelerate Strategy
The Accelerate strategy defines the path for the next chapter of
General Mills growth, leveraging the company’s historical strengths
and deploying them in ways that are relevant for today’s consumer
and marketplace. The strategy guides the company’s choices on how
to win and where to play to drive profitable growth and top-tier
shareholder returns over the long term.
How to Win
The Accelerate strategy focuses on four pillars to create
competitive advantages and win:
- Boldly Building Brands by meeting consumers where they
are with purpose-driven brands, supported with increasing and
evolving media investment and a reinvented marketing playbook.
- Relentlessly Innovating by creating new solutions to
real consumer problems, leveraging greater speed to market on core
platform innovation and finding new areas of growth through
experimentation and in-market learning.
- Unleashing Scale to create competitive advantage by
investing in data and analytics to drive differential growth and
efficiency across the enterprise, and by enhancing core
capabilities including Holistic Margin Management, Strategic
Revenue Management, and E-commerce.
- Being a Force for Good by regenerating the planet,
improving food security, strengthening communities, and advancing
inclusion among the company’s people and through its brands.
Where to Play
The Accelerate strategy enhances the company’s ability to
generate profitable growth through geographic and product
prioritization and portfolio shaping:
- Prioritizing investment in eight Core Markets, including
the United States, Canada, France, the U.K., Australia, China,
Brazil, and India, where the company has scale and infrastructure
to drive profitable growth.
- Allocating outsized resources and investments in five Global
Platforms – Cereal, Pet Food, Ice Cream, Snack Bars, and
Mexican Food – representing approximately 45 percent of fiscal 2020
net sales. These global platforms are expected to lead the
company’s growth and drive favorable profit mix for the portfolio
in the future.
- Fueling growth in Local Gem brands, representing
approximately 35 percent of fiscal 2020 net sales, that have
attractive local growth potential, including Pillsbury, Annie’s,
Yoplait, Totino’s, Wanchai Ferry, Yoki, and Kitano, among
others.
- Reshaping the portfolio with strategic acquisitions and
divestitures.
Driving Value
The Accelerate strategy is expected to enable General Mills to
deliver mid- to high-single-digit constant-currency growth in
adjusted diluted earnings per share and top-tier shareholder
returns over the long term by:
- Generating organic net sales growth of 2 to 3 percent;
- Expanding margins to deliver mid-single-digit adjusted
operating profit growth in constant currency;
- Converting at least 95 percent of adjusted net earnings into
free cash flow; and
- Returning approximately 80 to 90 percent of free cash flow to
shareholders through dividends and share repurchases.
Reaffirming Second-Half Fiscal 2021
Guidance
General Mills reiterated its expectation that the COVID-19
pandemic will continue to drive elevated consumer demand for food
at home, relative to pre-pandemic levels, through the remainder of
fiscal 2021. In addition, the company reaffirmed its third-quarter
and full-year guidance:
- Third-Quarter Fiscal 2021: Organic net sales growth is
expected to be roughly similar to the second quarter’s growth rate
and adjusted operating profit margin is expected to be in line with
the prior-year third quarter.
- Full-Year Fiscal 2021: Adjusted operating profit margin
is expected to be in line or better than the previous year.
A webcast of the company’s pre-recorded CAGNY 2021 presentation
featuring Chairman and Chief Executive Officer Jeff Harmening,
Chief Marketing Officer Ivan Pollard, and Chief Financial Officer
Kofi Bruce will begin at 7:00 a.m. CT this morning. A replay of the
presentation and related materials will be made available on
General Mills’ Investor Relations website at
www.generalmills.com/investors.
About General Mills
General Mills is a leading global food company whose purpose is
to make food the world loves. Its brands include Cheerios, Annie's,
Yoplait, Nature Valley, Häagen-Dazs, Betty Crocker, Pillsbury, Old
El Paso, Wanchai Ferry, Yoki, BLUE and more. Headquartered in
Minneapolis, Minnesota, USA, General Mills generated fiscal 2020
net sales of U.S. $17.6 billion. In addition, General Mills’ share
of non-consolidated joint venture net sales totaled U.S. $1.0
billion.
Note on Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995
that are based on our current expectations and assumptions. These
forward-looking statements, including the statements under the
caption “Reaffirming Second-Half Fiscal 2021 Guidance,” are subject
to certain risks and uncertainties that could cause actual results
to differ materially from the potential results discussed in the
forward-looking statements. In particular, our predictions about
future net sales and earnings could be affected by a variety of
factors, including: the impact of the COVID-19 pandemic on our
business, suppliers, consumers, customers, and employees;
disruptions or inefficiencies in the supply chain, including any
impact of the COVID-19 pandemic; 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 tax legislation, 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;
effectiveness of restructuring and cost saving initiatives;
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 statement to
reflect any future events or circumstances.
Reminder on Non-GAAP Guidance
The Company’s outlook for organic net sales growth and adjusted
operating profit margin are non-GAAP financial measures that
exclude, or have otherwise been adjusted for, items impacting
comparability, including the effect of foreign currency exchange
rate fluctuations, acquisitions, divestitures, and a 53rd week,
when applicable. General Mills is not able to reconcile these
forward-looking non-GAAP financial measures to their most directly
comparable forward-looking GAAP financial measure without
unreasonable efforts because it is unable to predict with a
reasonable degree of certainty the actual impact of changes in
foreign currency exchange rates or the timing of acquisitions and
divestitures throughout fiscal 2021. The unavailable information
could have a significant impact on the Company’s fiscal 2021 GAAP
financial results.
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(analysts) Jeff Siemon: 763-764-2301 (media) Mollie Wulff:
763-764-6364
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