General Mills(GIS)2023-06-07 16:15Summary of General Mills, Inc. Conference Call Company Overview - Company: General Mills, Inc. (NYSE: GIS) - Event: Deutsche Bank - dbAccess Global Consumer Conference - Date: June 7, 2023 - Participants: Jeff Harmening (Chairman and CEO), Steve Powers (Deutsche Bank) Key Industry Insights - Current Market Conditions: General Mills reported double-digit growth in its categories, with a Nielsen growth rate of 11% in North America Retail for Q4, down from 14% in the previous six months, but still strong [4][5] - Market Share: The company has gained market share in over 60% of its categories for the past four years, with this year seeing about 70% [4] - Pricing Trends: There is a noted slowdown in pricing due to declining inflation, with a 23% inflation over the last two years. Pricing increases were implemented in March across most product lines [12][13][14] - Promotional Levels: Promotional frequency has decreased by 15% to 20% since before the pandemic, but is expected to increase as inflation diminishes [14][15] Strategic Priorities - Accelerate Strategy: The company emphasizes the importance of prioritization in its strategy, focusing on core categories, M&A opportunities, and ESG initiatives [22][23] - Productivity Focus: A return to productivity efforts, termed holistic margin management, is planned as supply chains normalize [7][10] - M&A Activity: General Mills is looking for acquisition opportunities and potential divestitures to shape its portfolio [6][23] Financial Performance - EBITDA Recovery: The company is experiencing a rapid recovery in EBITDA, which is expected to positively impact the business [11] - Investment in Innovation: Continued investment in consumer innovation and data analytics is planned, with a focus on maintaining profitability while expanding capabilities [25][26] Sustainability Initiatives - Standing for Good: General Mills has a long-standing commitment to sustainability, focusing on reducing greenhouse gas emissions, promoting regenerative agriculture, and minimizing plastic waste [28][30][31] - Consumer Engagement: The company's sustainability efforts resonate with consumers and employees, enhancing brand loyalty and employee retention [32] Business Segment Performance - North American Retail: Accounts for approximately 75% of sales, with solid growth but some pressure on volumes due to pricing [33] - Pet Food Segment: Blue Buffalo is expected to lead growth, with challenges in the wet pet food category due to consumer behavior changes [52][55] - Food Service Business: A $2 billion segment that has shown resilience, particularly in K-12 schools and colleges [61][63] - International Markets: Growth strategies have been adjusted, focusing on profitable categories and divesting non-core businesses [66][68] Future Outlook - Growth Projections: General Mills aims for a 2% to 3% growth rate in a normalized environment, with potential for additional growth through M&A [72][73] - Market Conditions: The company is prepared for a volatile environment but believes its agility will allow it to navigate challenges effectively [78] Conclusion - Investor Confidence: General Mills is committed to its Accelerate strategy, focusing on agility, innovation, and sustainability to drive future growth and shareholder value [77][78]