CFO reaffirms fiscal 2014 financial targets at Morgan Stanley Global Consumer Conference
This morning at the Morgan Stanley Global Consumer Conference in New York, Don Mulligan, executive vice president and CFO of General Mills, provided investors with an update on the company’s marketing and innovation plans and reaffirmed our key financial targets for the 2014 fiscal year.
“At General Mills, our fundamental goal is to generate healthy growth for our businesses and superior returns for our shareholders,” Don said in his opening remarks.
“As we finish the first half [of our fiscal year], General Mills is on track to meet our key fiscal 2014 targets – and we continue to expect adjusted diluted earnings per share in the range of $2.87 to $2.90,” he said.
General Mills will complete its second quarter of fiscal 2014 this Sunday, Nov. 24. The company will report its results for the second quarter on Dec. 18, 2013, at which time General Mills executives will provide a detailed financial update.
Today, Don provided several highlights from our businesses around the globe that illustrate why he has confidence in the company’s growth prospects for 2014 and beyond.
He spoke about our Holistic Margin Management (HMM) program, which is on track to achieve its goal of delivering $4 billion in cumulative cost of goods savings through HMM by 2020. “We reinvest HMM savings in our brands and capabilities, while still delivering strong earnings growth.” He noted the competitive advantage of continuing to invest in our sales force as a strategic capability, along with our on-going investments in new product R&D and consumer marketing.
A few of the examples he shared of how this investment in innovation and brand building is playing out for our U.S. Retail business this year include:
• Nature Valley Protein Granola cereal, which after only five months in market, is already among the top-turning granola items in a segment that is growing 17 percent year-to-date.
• Retail sales for the Chex franchise – including a new Vanilla Chex variety – are up another 6 percent year-to-date.
• Our Greek yogurt business, for which sales continue to significantly outpace the segment.
• Our successful Grain Snacks business, which includes the Nature Valley and Fiber One brands, has added nearly 4 points of market share year-to-date.
• Totino’s BOLD rolls, which are helping to drive year-to-date retail sales growth of almost 5 percent for this business.
• New Old El Paso Stand ‘N Stuff Soft Flour Tortillas have received a strong early response, helping to drive share gains for the category-leading Old El Paso brand year-to-date.
For our away-from-home business in the U.S., named Convenience Stores and Foodservice, Don reaffirmed that the segment is targeting mid single-digit operating profit growth for the year.
Outside of the U.S., Don noted that strategic acquisitions in recent years have “dramatically increased our international exposure. Fully one-third of our sales – more than $6 billion including our proportionate share of joint ventures – are now outside the U.S. in fast-growing, attractive categories,” he said.
General Mills’ five global platforms include ready-to-eat cereal, yogurt, convenient meals, wholesome snack bars, and super-premium ice cream.
Don gave an update on the Yoki business in Brazil, which General Mills acquired a little more than a year ago.
“One year in, we’re excited by the growth of our categories, and pleased with our business momentum,” he said. “The combination of Yoki and General Mills makes us the 15th largest food company in Brazil, significantly expanding our presence in this important market.”
He went on to note that, “In fiscal 2014, we expect we can generate $1 billion in net sales in the Latin America region with our leading share positions in growing categories.”
In China, General Mills is continuing to expand Häagen-Dazs geographically by opening more than 70 shops and expanding Häagen-Dazs’ retail presence in 28 new cities this fiscal year.
To give investors a taste of General Mills’ strong consumer advertising, Don shared three advertisements currently airing on TV – two in the U.S. and one in the UK.
You may recognize this spot for Honey Nut Cheerios, which we’ve showcased on A Taste of General Mills:
He also shared one of the new Fiber One commercials that began airing in August. For the inside scoop on the campaign, read this post originally published on A Taste of General Mills.
And last but not least, Don gave investors a peek at the “Simply Blissful Baking” campaign for Betty Crocker in the UK.
A webcast of Don’s presentation is available in the Investor section of GeneralMills.com through Nov. 29.
Editor’s Note: This post contains forward looking statements regarding future results. Please see our press release dated Nov. 20, 2013, for risk factors that could affect the results anticipated in these forward looking statements.