Le Lézard
Classified in: Business
Subjects: CCA, ERP, TDS

General Mills Outlines Keys To Consistent Growth At CAGNY


BOCA RATON, Fla., Feb. 20, 2018 /PRNewswire/ -- At the Consumer Analyst Group of New York (CAGNY) conference today, executives of General Mills (NYSE: GIS) outlined the company's approach to long-term shareholder value creation and its key priorities for returning to consistent topline growth.

General Mills Chairman and CEO Jeff Harmening reiterated the company's strategy for delivering value in the face of shifting consumer food values, changing competition across categories, and disruption within retail channels.  "We remain laser-focused on our Consumer First strategy.  By providing consumers what they want, we will create growth in this dynamic environment."

Harmening also described how the company is changing the way it operates to better compete in today's environment.  "The biggest change we are making at General Mills is to begin operating as a global company," Harmening continued.  "We've framed our strategies globally. We're connecting our teams globally. And we're viewing our business through a global lens that allows us to rapidly share the best ideas around the world."

Harmening outlined the company's three priorities for returning to consistent topline growth:

Don Mulligan, Chief Financial Officer, discussed the company's strong track record on the other components of its shareholder return model:  margin expansion, cash conversion, and cash returns.  "We've generated more than 200 basis points of adjusted operating margin expansion over the last two years, thanks to our Holistic Margin Management efforts and our incremental cost-savings initiatives," Mulligan said.  "Over the last five years, our disciplined focus on cash has enabled us to exceed our targets of 95 percent cash conversion and 90 percent cash returned to shareholders through dividends and share repurchases." 

Mulligan also provided an update on the company's full-year fiscal 2018 targets:

A live webcast of today's CAGNY presentation is scheduled to begin at 7:00 a.m. CST (8:00 a.m. EST).  Interested investors can access the webcast and presentation slides at www.generalmills.com/investors.  A replay of the webcast will be available on the company's website.

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 made by Mr. Harmening and Mr. Mulligan, 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: 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 reform 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; disruptions or inefficiencies in the supply chain; effectiveness of restructuring and cost savings 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. 

Our fiscal 2018 outlook for organic net sales growth, constant-currency total segment operating profit, adjusted operating profit margin, tax rate excluding items, 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 effect of foreign currency exchange rate fluctuations, restructuring charges and project-related costs, mark-to-market effects, unusual tax items, acquisitions, and divestitures.  We are not able to reconcile these forward-looking non-GAAP financial measures to their most directly comparable forward-looking GAAP financial measures without unreasonable efforts because we are unable to predict with a reasonable degree of certainty the impact of changes in foreign currency exchange rates and commodity prices or the timing or impact of restructuring actions, unusual tax items, acquisitions, and divestitures throughout fiscal 2018. The unavailable information could have a significant impact on our fiscal 2018 GAAP financial results.

For fiscal 2018, we currently expect:  foreign currency exchange rates (based on blend of forward and forecasted rates and hedge positions), acquisitions, and divestitures to increase net sales by approximately 1 percent; foreign currency exchange rates to increase total segment operating profit and adjusted diluted EPS growth by approximately 1 percent; total restructuring charges and project-related costs related to actions previously announced to total $40 million; and unusual tax items previously announced to total approximately $42 million of expense.

About General Mills

General Mills is a leading global food company that serves the world by making food people love. Its brands include Cheerios, Annie's, Yoplait, Nature Valley, Fiber One, Häagen-Dazs, Betty Crocker, Pillsbury, Old El Paso, Wanchai Ferry, Yoki and more. Headquartered in Minneapolis, Minnesota, USA, General Mills generated fiscal 2017 consolidated net sales of US $15.6 billion, as well as another US $1.0 billion from its proportionate share of joint-venture net sales.

General Mills is a leading global food company that serves the world by making food people love. Its brands include Cheerios, Annie's, Yoplait, Nature Valley, Fiber One, Haagen-Dazs, Betty Crocker, Pillsbury, Old El Paso, Wanchai Ferry, Yoki and more. Headquartered in Minneapolis, Minnesota, USA, General Mills generated fiscal 2016 consolidated net sales of US $16.6 billion, as well as another US $1.0 billion from its proportionate share of joint-venture net sales. (PRNewsfoto/General Mills)

 

SOURCE General Mills, Inc.


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