gis morgan stanley conference - november 2012 v18
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General MillsFiscal 2013 Update
Morgan StanleyConsumer Conference
November 14, 2012
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This presentation contains forward-looking statements within the meaning of the Private SecuritiesLitigation Reform Act of 1995 that are based on managementscurrent expectations and assumptions.
These forward-looking statements are subject to certain risks and uncertainties that could cause actualresults to differ materially from the potential results discussed in the forward-looking statements. Inparticular, 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 ourcompetitors; economic conditions, including changes in inflation rates, interest rates, tax rates, or theavailability of capital; product development and innovation; consumer acceptance of new products andproduct improvements; consumer reaction to pricing actions and changes in promotion levels; acquisitions
or dispositions of businesses or assets; changes in capital structure; changes in laws and regulations,including labeling and advertising regulations; impairments in the carrying value of goodwill, otherintangible 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 andsafety issues, including recalls and product liability; changes in consumer demand for our products;effectiveness of advertising, marketing and promotional programs; changes in consumer behavior, trendsand preferences, including weight loss trends; consumer perception of health-related issues, includingobesity; consolidation in the retail environment; changes in purchasing and inventory levels of significantcustomers; 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 ofderivatives used to manageprice risk for certain commodities; benefit plan expenses due to changes inplan asset values and discount rates used to determine plan liabilities; failure of our informationtechnology systems; foreign economic conditions, including currency rate fluctuations; and political unrestin foreign markets and economic uncertainty due to terrorism or war. The company undertakes noobligation to publicly revise any forward-looking statements to reflect any future events or circumstances.
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Fiscal 20131stQuarter Performance
Net Sales As Reported $4,051 +5%
Segment Operating Profit* $769 +6
International +56
Bakeries & Foodservice +10
Adjusted Diluted EPS* $.66 +3
* Non-GAAP Measure. See Appendix for Reconciliation.
($ in Millions, Except per Share)
$ % Change
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Fiscal 20132nd Quarter Update
Second Quarter Ends Nov. 25, Will ReportResults Dec. 19
Performance Consistent With Our Plans
Annual EPS Guidance Remains $2.65 Before ItemsAffecting Comparability*
* Non-GAAP Measure. Excludes Mark-to-market Effects, Tax Benefit, Restructuring Expense, and Integration Costs.
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U.S. Category Volume Trends ImprovingAs Pricing Moderates
-6%
-4% -5% -4%
-3%
-1%
+1%
-1%
Flat Flat
+8%
+6% +6% +6%+5%
+3%
+2% +1% +1% +1%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct
Unit Volume Pricing Source: Nielsen XAOC
Aggregate General Mills Categories
(Change vs. LY)
Calendar Year 2012
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U.S. Market Innovation
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The U.S. Yogurt Category TodaySegment Share
Source: Nielsen XAOC, Latest 52 Weeks Ended 10.27.12
Dollar Share by Segment
Greek32%
Light
17%
Regular
17%
Adult Bev.And Specialty
13%
Kid13%
Large-size8%
Adult Bev.And Specialty
15%
Light
20%
Regular19%Greek
19%
Kid19%
Large-size8%
Equivalent Units Share by Segment
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Yoplait GreekRecent Share Gains
Fiscal 2013
5.9 5.6 5.5
7.8
8.9
June July Aug Sep Oct
Yoplait Greek Dollar Share(Share of Greek Segment)
Source: Nielsen XAOC
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Improving Core Cup Trends
-20%
-15%
-10%
-5%
0%
5%
10%
15%
Jun Jul Aug Sep Oct
Unit Turns Per National Distribution PointRolling 12-week Average - Change vs. LY
Source: Nielsen XAOC
Fiscal 2013
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Seasonal Innovation from Yoplait
I usually don't write love letters to food
products but, I will trade my husband for
pumpkin pie light Yoplait!
-- Quote from a Yoplait consumer
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Regional Expansion -Libert
Expanding Now inSelect Markets
Coming in Januaryto ExistingCustomers
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Regional Expansion -Mountain High
Source: Nielsen XAOC
Fiscal 2013 ACV by Market
June Oct
New York 0 61
Boston 0 54Philadelphia 0 52
Pittsburg h 0 51
Washington D.C. 0 40
Baltimore 0 39
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General Mills U.S. Cereal Share
29.7
30.831.2 31.3
31.531.0
F08 F09 F10 F11 F12 F13 YTD
Dollar Market Share
Sources: F08-F12 Nielsen All Outlet; F13 Nielsen XAOC
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2013 Year-to-date Merchandising Activity
-9%-MSD
-LSD
+LSD
+MSD
+DD
GeneralMills
PrivateLabel
Malt-o-Meal Kellogg Post Quaker
Jun-Oct Merchandised Unit Volume
(Change vs. LY)
Source: Nielsen XAOC, Period Ended 10.27.12
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Cheerios Can Help Reduce Cholesterol
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CheeriosThe Categorys #1 Franchise
Source: Nielsen XAOC, Fiscal YTD Period Ended 10.27.12
13% of U.S. Cereal Category Sales
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Monsters CerealsStrong Halloween Performance
Sept-Oct Retail Sales +10%Source: Nielsen XAOC
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ChexHoliday Time is Party Mix Time
F10 F11 F12 L12
Retail Sales Growth
Source: Nielsen XAOC, Period Ended 10.27.12
CGR = +12%
($ in Millions)
Months
+13%
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Cascadian Farm Organic Cereals
F10 F11 F12 L12
Retail Sales Growth
Sources: Nielsen Period Ended 10.27.12 + SPINS Period Ended 9.29.12
CGR = +17%
($ in Millions)
Months
+14%
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ProgressoStrong Performance Over Time
Source: F08-F12 Nielsen All Outlet; L12 Months Nielsen XAOC, Period Ended 10.27.12
34.535.0 35.3
36.9
39.3 39.6
F08 F09 F10 F11 F12 L12
Progresso RTS Market Share
Months
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2.5%
8.5%
Oct FYTD
Category Progresso
Progresso2013 Innovation
Source: Nielsen XAOC, Period Ended 10.27.12
RTS Soup
2013 Retail Sales Growth(Change vs. LY)
FYTD Market Share +2.1 Points
Cooking SaucesNew Light Varieties
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27.829.3 30.0
30.8
34.836.6
F08 F09 F10 F11 F12 L12Months
U.S. Grain Snacks Performance
Sources: F08-F12 Nielsen All Outlet; L12 Months Nielsen XAOC, Period Ended 10.27.12
General Mills Market Share
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U.S. Grain Snacks Innovation
B k i & F d i
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Bakeries & FoodserviceSnacks Innovation
F08 F09 F10 F11 F12
Net Sales Growth
CGR = +10%
($ in Millions)
F13 Q1 Net Sales +11%
S k I ti
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Snacks InnovationLarabar
Source: Nielsen, Period Ended 10.27.11 + SPINS, Period Ended 9.29.12
F10 F11 F12 L12Months
CGR = +43%
Retail Sales Growth($ in Millions) 12 Minis
6 6
Fiscal YTD Market Share +0.3 Points
+25%
S k I ti
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Snacks InnovationFood Should Taste Good Chips
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U.S. 2013 Plan Summary
The Operating Environment Is Improving
We Have a High Level of Innovation and Brand-buildingSupport in Market
Expect Improving Sales Trends For Balance of 2013
International Segment
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International SegmentStrong Performance Over Time
$2.5 $2.6 $2.7 $2.9
$4.2
2008 2009 2010 2011 2012
Net Sales, As Reported
($ in Billions)
Fiscal Years
$248 $239
$192
$291
$430
2008 2009 2010 2011 2012
Operating Profit, As Reported
($ in Millions)
Fiscal Years
+68%+73%
S k I ti
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Snacks InnovationCanada
New Products
Health News
Fiscal YTD Market Share +3.3 Points Source: Nielsen, Period Ending 9.29.12
-3.3%
+9.3%
Fiscal YTD
Category General Mills
Grain Snacks
Fiscal YTD Retail Sales Growth(Change vs. LY)
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Canada Yogurt Update
Libert
YTD Market Share +2.1 PointsSource: Nielsen, Period Ending 9.29.12
Yoplait
Smooth Sales and Systems Cutover
Improving Sales Trends
Significant Innovation and Brand-building Investment in 2013
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Western EuropeYogurt Update
Sources: IRI, Period Ending Sept 2012
Category Yoplait
France
Fiscal YTD Retail Sales( % Change vs. LY)
Category Yoplait
UK
Flat
+4%
+6%
+4%
Western E rope Inno ation
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Western Europe InnovationUK Nature Valley
Nature Valley
Olympic Sponsorship
AdvertisingSampling
Merchandising
New Product Line
Fiscal YTD Retail Sales +29%
Launched in Oct
Source: IRI, Period Ended 10.13.12
W t E I ti
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Secret SensationsNew Flavor, New Markets
Fiscal YTD retail sales +15%
Western Europe InnovationHaagen-Dazs
Sources: Nielsen and IRI, Latest FYTD Period Available
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Greater China Overview
$550
F08 F09 F10 F11 F12 F13Goal
Constant Currency Sales*
CGR = +19%
($ in Millions)
*Estimated Net Sales Converting Local Currency Data at a Fixed Exchange Rate.
+DD
Greater China Innovation
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Greater China InnovationHagen-Dazs Mooncake
Sold Over 2 Million Boxes in 2012
F09 F10 F11 F12 F13
Constant Currency Sales*
CGR = +19%
($ in Millions)
*Estimated Net Sales Converting Local Currency Data at a Fixed Exchange Rate.
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Greater China Innovation
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Greater China InnovationHaagen-Dazs Retail
2013 Fiscal YTD Net Sales +DD
Greater China Innovation
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Greater China InnovationWanchai Ferry
Frozen Dim Sum
Frozen Noodles
Geographic Expansion
Product Expansion
Fiscal YTD Net Sales +HSD
2013 Business Highlights
Strong In-store Presence
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Yoki Alimentos in Brazil
2009-2011SalesKey Category CAGR
Popcorn +HSD
Snacks +DD
Basic Foods +DD
Seasonings +DD
Side Dishes +DD
Beverages +DD
84% Total Unaided Awareness 53%
87% Usage in past 6 months 72%
Source: Synovate Brand Equity Research, July 2011
G l Mill d Y ki
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Integration Activities Off to a Great Start!
Sharp Focus on Maintaining Business Momentum
Excellent Future Growth Prospects
General Mills and Yoki
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Fiscal 2013 International Summary
Innovation Driving Growth in Both Developed andEmerging Markets
Strong Performance on Base Business
Net Sales and Profit Contribution from Acquisitions
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Todays General Mills Update
First Quarter Results Modestly Ahead of Plans
Second Quarter Performance Meeting Our Expectations
Strong Innovation and Brand-building in Market
On Track to Deliver Full-Year 2013 Targets
Growth Prospects Consistent with Our Long-term Model
Beyond 2013
*Non-GAAP Measure
General Mills
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General MillsFiscal 2013 Update
Morgan StanleyConsumer Conference
November 14, 2012
Reconciliation of
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2012
U.S. Retail $575 $585
International 126 81
Bakeries & Foodservice 68 61
Segment Operating Profit $769 $727
Corporate Unallocated Expense(Income) (21) 88
Restructuring, Impairment andOther Exit Costs 9
Operating Profit $780 $639
2013
Reconciliation ofSegment Operating Profit
Q1
($ in Millions)
Reconciliation of
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Diluted EPS $0.82 $0.61
Mark-to-market Effects* (.07) .03
Restructuring .01
Tax Item (.10)
Diluted EPS Excluding $0.66 $0.64
Items Affecting Comparability**
Reconciliation ofNon-GAAP EPS to Diluted EPS
*Impact of Mark-to-market Valuation of Certain Commodity Positions.st
2013 2012
Q1