General Mills: Outlines «Accelerate» Growth Strategy

Minneapolis / MN. (gm) At the Consumer Analyst Group of New York (CAGNY) 2021 Conference, General Mills Inc. 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.