General Mills reports fiscal 2015 earnings
This morning General Mills released earnings results for the fourth quarter of fiscal 2015 and full year, which ended May 31, 2015.
Fiscal 2015 was a 53-week year, with the extra week falling in the fourth quarter. The full financial results are detailed in this press release.
In the fourth quarter, net sales of $4.3 billion essentially matched prior-year results. Excluding foreign currency exchange effects, sales grew 6 percent, including incremental contributions from Annie’s. Fourth quarter segment operating profit increased 13 percent. Results for the quarter included an asset impairment charge of $260 million, restructuring and project-related charges totaling $35 million and a discrete tax charge of $79 million.
This infographic provides a quick snapshot for the full fiscal year 2015 on a constant-currency basis.
Following the release of today’s results, Chairman and CEO Ken Powell, Chief Financial Officer Don Mulligan conducted a conference call with financial analysts.
Here are the top takeaways from that call.
Ken Powell: General Mills remains committed to following consumers to drive growth
“Where we embraced Consumer First in fiscal 2015, we saw our business respond – whether that’s with protein cereals in U.S. Retail, Yoplait yogurt in U.S. retail and foodservice channels, or Old El Paso dinner kits around the world. Our plan for 2016 is to expand our Consumer First efforts worldwide to generate sustainable topline growth,” said Ken.
“As we enter fiscal 2016, General Mills is keenly aware of our consumers’ changing food preferences and the impact those changes are having on our industry. We remain deeply committed to following the consumer, adapting to their evolving preferences and driving growth … We’ll do that by investing in significant core brand renovation across our portfolio, and by introducing a strong slate of meaningful innovation – all geared toward meeting consumers’ evolving food preferences.”
Recently announced renovation efforts include reducing sugar in Yoplait Original by 25 percent, making five varieties of Cheerios gluten free, and removing artificial colors and flavors from cereals – changes rooted in a deeper understanding of what our consumers are looking for today.
Ken also mentioned that this summer General Mills is launching a strong slate of new products including Nature Valley Toasted Oats Muesli, Yoplait Plenti greek yogurt, Food Should Taste Good Real Good Bars, and a new line of Annie’s soups in the U.S., Parampara Indian spice mixes in Europe, Yoki-branded ready-to-eat popcorn in Brazil, and Yoplait yogurts in China.
Don Mulligan: Business performance strengthened for U.S. Retail in the second half of the fiscal year
“Trends did improve in the second half, most notably for yogurt and cereal,” said Don. “Our U.S. Retail brands gained share in categories representing 65 percent of measured sales volume, including gains in the cereal, yogurt and grain snacks categories. But overall sales trends in many categories were weak, reflecting the impact of changing consumer food preferences.”
Ken noted four priorities to build on this momentum in U.S. Retail: to grow our cereal business, accelerate performance in better-for-you snacking, drive double digit growth on our natural and organic portfolio by leveraging the combination of Annie’s our heritage natural and organic brands, and to deliver value on select brands, like Helper and Totino’s pizza rolls, in a way that generates positive returns for our business.
Don Mulligan: Convenience & Foodservice delivered record segment operating profit in Fiscal 2015.
“Our Convenience Stores and Foodservice segment had an excellent year, with segment operating profit increasing 15 percent to reach a record high of $353 million,” said Don.
Consumer led innovation efforts helped generate 9 percent net sales growth for the segment’s six focus platforms, which include cereal, yogurt, snacks, frozen breakfast, biscuits and baking mixes.
In Fiscal 2016, the segment will launch Yoplait Smoothie Pro, a ready-to-serve smoothie solution for foodservice operators, and will continue its partnership with McDonald’s to offer Yoplait Go-Gurt in Happy Meals. In K-12 schools, we’ll be introducing new cream cheese-filled Pillsbury mini bagels.
Ken Powell: Europe was a bright spot for General Mills’ International business
Our International segment posted good margin expansion and profit growth in constant currency.
“Our International segment generated 6 percent constant-currency net sales growth in 2015,” said Ken. “We had a strong year in Europe, where constant-currency sales rose 5 percent. And today nearly 40 percent of the segment’s $5.1 billion dollars in net sales are generated in emerging markets, which represent an important long-term growth opportunity for our brands.”
Constant-currency net sales for Old El Paso grew mid single-digits in Canada and double digits in Europe in 2015. The company plans to build on that success by introducing its premium line of Restaurante dinner kits in Europe and flavor-blasted tortilla shells in Canada in Fiscal 2016.
General Mills executives to detail Fiscal 2016 plans on Investor Day
General Mills executives will detail the company’s plans for Fiscal 2016 and share more news about our line-up of new product innovation at its Investor Day event in Boston on July 14. A webcast of our Investor Day will be available on the Investors page of GeneralMills.com.
Miss today’s webcast? Listen to a replay here.
Editor’s note: This post contains non-GAAP financial information and forward looking statements regarding future results. Please see our press release dated July 1, 2015 for a reconciliation of these non-GAAP measures and for risk factors that could affect the results anticipated in these forward looking statements.
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