General Mills: Advances Accelerate Strategy

Minneapolis / MN. (gm) General Mills Inc. highlighted the company’s strong results as it continues advancing its Accelerate strategy to deliver profitable growth and top-tier shareholder returns. At the CAGNY 2023 Conference the company also raised its fiscal 2023 full-year financial guidance.

Accelerate Strategy Strengthens General Mills

Grounded in its purpose to make food the world loves, General Mills’ Accelerate strategy is centered on where to prioritize the company’s resources to drive top-tier shareholder returns. The company expects these strategic choices, including where to play and how to create competitive advantages and win, to result in long-term shareholder value creation.

Consistently Competing Effectively

The company’s improved competitiveness has been fueled by stronger brand building, more relevant innovation, and increased investments in growth initiatives. In its CAGNY presentation, the company spotlighted two businesses that remain key contributors to its long-term growth ambitions:

  • North America Retail: General Mills’ largest business in its largest core market has grown or held share in the majority of its priority businesses in each of the past five fiscal years. These results have been fueled by increased investment in brand building, exceptional innovation performance, and superior sales and supply chain execution. To meet the ever-changing environment, the segment will continue to invest in competitively advantaged and digitally enabled capabilities, including connected commerce, strategic revenue management, and supply chain digitization.
  • Pet Food: The company’s fastest-growing global platform has grown its distribution in the U.S. by four times and more than doubled its household penetration since General Mills entered the category via acquisition in 2018. The Blue Buffalo brand is well positioned for long-term continued growth as a leader in the humanization of pet feeding and treating. The brand will build on this position with broad-based news in the second half of fiscal 2023, including renovation and innovation on its Wilderness dry dog food line, a test of a new Fresh line of refrigerated Blue Buffalo dog food, innovation and brand-building news on its market-leading natural pet treats portfolio, and expansion of its fully renovated Tastefuls natural cat feeding line. The company also plans to expand its Blue Buffalo offerings in China and begin testing the brand in other international markets in fiscal 2024.

Reshaping the Portfolio

In recent years, General Mills’ significant actions to reshape its portfolio have been a key contributor to its improved growth performance and outlook. The company has turned over almost 20 percent of its portfolio since fiscal 2018, including the acquisitions of Blue Buffalo, Nudges, True Chews, and Top Chews pet treats, and TNT Crust, as well as the divestitures of European yogurt and dough and the North American Helper and Suddenly Salad main meals and side dishes business. This portfolio reshaping work has increased the company’s enterprise growth exposure by more than a full point.

Driving Value

By executing its Accelerate strategy, General Mills continues to expect to deliver top-tier shareholder returns over the long-term by generating a consistent balance of net sales growth, margin expansion, cash conversion, and cash return to shareholders. Total returns to General Mills shareholders have grown at a 20-percent compound rate over the past 3 years and at a double-digit compound rate over the past 5, 10, and 20 years, and have exceeded the company’s CPG peer median returns over each of those timeframes.

Raising Full-year Fiscal 2023 Guidance

As a result of its continued strong in-market performance, General Mills raised its full-year fiscal 2023 guidance. The company’s updated outlook now includes:

  • Organic net sales growth of approximately 10 percent;
  • Adjusted operating profit growth of 6 to 7 percent in constant currency;
  • Adjusted diluted EPS growth of 7 to 8 percent in constant currency; and
  • Free cash flow conversion of at least 90 percent of adjusted after-tax earnings.

With the consistent execution of its Accelerate strategy, General Mills is well-positioned to continue driving profitable growth and top-tier returns for its shareholders in the years to come.