General Mills: Reports Fiscal H1-2021 Results

Minneapolis / MN. (gm) General Mills Inc. reported results for the second quarter ended November 29, 2020. «We executed very well again in the second quarter, driving strong performance on the top and bottom lines,» said General Mills Chairman and Chief Executive Officer Jeff Harmening. «In this dynamic environment, I’m proud of the way we’re taking care of our people and serving our consumers with brands they love and trust. We strongly believe that the work we’re doing today to strengthen our brands and capabilities and deepen our connection with consumers will translate to profitable growth and shareholder value creation for the long term.»

Second Quarter Results Summary

  • Net sales increased 7 percent to USD 4.7 billion and organic net sales were also up 7 percent, reflecting broad-based market share gains amid elevated at-home food demand resulting from the Covid-19 pandemic.
  • Gross margin increased 100 basis points to 36.5 percent of net sales, driven by favorable net price realization and mix, lower mark-to-market expenses, and lower restructuring charges recorded in cost of sales, partially offset by higher input costs, including costs to secure incremental capacity, as well as the comparison to the prior-year period that included favorable manufacturing leverage. Adjusted gross margin increased 20 basis points to 35.5 percent of net sales, driven by favorable net price realization and mix, partially offset by higher input costs, including costs to secure incremental capacity, as well as the comparison to the prior-year period that included favorable manufacturing leverage.
  • Operating profit of USD 917 million was up 13 percent, primarily driven by higher gross profit dollars and a net gain on investment activity, partially offset by higher selling, general, and administrative (SG+A) expenses, including higher media investment. Operating profit margin of 19.4 percent increased 110 basis points. Constant-currency adjusted operating profit increased 6 percent, driven by higher adjusted gross profit dollars, partially offset by higher SG+A expenses, including higher media investment. Adjusted operating profit margin decreased 10 basis points to 18.3 percent.
  • Net earnings attributable to General Mills increased 19 percent to USD 688 million and diluted EPS increased 17 percent to USD 1.11, primarily reflecting higher operating profit, lower net interest expense, and higher after-tax earnings from joint ventures. Adjusted diluted EPS totaled USD 1.06, up 9 percent in constant currency, primarily driven by higher adjusted operating profit, lower net interest expense, and higher after-tax earnings from joint ventures.

Six Month Results Summary

  • Net sales increased 8 percent to USD 9.1 billion and organic net sales also increased 8 percent, reflecting positive pound volume and favorable net price realization and mix.
  • Gross margin increased 140 basis points to 36.5 percent of net sales, driven by favorable net price realization and mix, lower mark-to-market expenses, and lower restructuring charges recorded in cost of sales, partially offset by higher input costs. Adjusted gross margin increased 60 basis points to 35.9 percent of net sales, driven by favorable net price realization and mix, partially offset by higher input costs.
  • Operating profit of USD 1.8 billion increased 20 percent, primarily driven by higher gross profit dollars, partially offset by higher SG+A expenses, including higher media investment. Operating profit margin of 19.5 percent was up 200 basis points. Adjusted operating profit of USD 1.7 billion increased 13 percent in constant currency, driven by higher constant-currency adjusted gross profit dollars, partially offset by higher SG+A expenses, including higher media investment. Adjusted operating profit margin increased 90 basis points to 18.7 percent.
  • Net earnings attributable to General Mills increased 21 percent to USD 1.3 billion and diluted EPS of USD 2.14 increased 19 percent, primarily reflecting higher operating profit, lower net interest expense, and higher after-tax earnings from joint ventures, partially offset by a higher effective tax rate and higher average diluted shares outstanding. Adjusted diluted EPS of USD 2.06 was up 17 percent in constant currency, primarily driven by higher adjusted operating profit, higher after-tax earnings from joint ventures, and lower net interest expense, partially offset by higher average diluted shares outstanding and a higher adjusted effective tax rate.

For additional information please read General Mills’ PDF file below (71 KB).

20210102-GENERALMILLS-H1-2021
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