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7459-1
Putting the Consumer
First
86th Annual Shareholders
Meeting
September 23, 2014
7459-2
A Reminder on Forward-looking Statements
This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are based on management’s current expectations and assumptions. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from the potential results discussed in the forward-looking statements. In particular, our predictions about future net sales and earnings could be affected by a variety of factors, including: competitive dynamics in the consumer foods industry and the markets for our products, including new product introductions, advertising activities, pricing actions and promotional activities of our competitors; economic conditions, including changes in inflation rates, interest rates, tax rates, or the availability of capital; product development and innovation; consumer acceptance of new products and product improvements; consumer reaction to pricing actions and changes in promotion levels; acquisitions or dispositions of businesses or assets; changes in capital structure; changes in the legal and regulatory environment, including labeling and advertising regulations and litigation; impairments in the carrying value of goodwill, other intangible assets, or other long-lived assets, or changes in the useful lives of other intangible assets; changes in accounting standards and the impact of significant accounting estimates; product quality and safety issues, including recalls and product liability; changes in consumer demand for our products; effectiveness of advertising, marketing and promotional programs; changes in consumer behavior, trends and preferences, including weight loss trends; consumer perception of health-related issues, including obesity; consolidation in the retail environment; changes in purchasing and inventory levels of significant customers; fluctuations in the cost and availability of supply chain resources, including raw materials, packaging and energy; disruptions or inefficiencies in the supply chain; volatility in the market value of derivatives used to manage price risk for certain commodities; benefit plan expenses due to changes in plan asset values and discount rates used to determine plan liabilities; failure or breach of our information technology systems; foreign economic conditions, including currency rate fluctuations; and political unrest in foreign markets and economic uncertainty due to terrorism or war. The company undertakes no obligation to publicly revise any forward-looking statements to reflect any future events or circumstances.
7459-3
Fiscal 2014 Summary
• Recorded Good Progress Building Our Worldwide Food Businesses
• Stock Price Appreciation + 17% Dividend Increase Created Double-digit Return to Shareholders
• Net Sales and Operating Profit Results Fell Short of Targets
7459-4
U.S. Food & Beverage Growth Has Slowed
3.3%
4.8%
2.3%
1.5%
F09-F11 Avg F12 F13 F14
Total U.S. Food & Beverage $ Sales Growth
Source: Nielsen XAOC
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+4%
+10%
+3%
+4%
+3%
F11 F12 F13 F14 F15 Plan
Input Cost Inflationary, Driven by Global Demand
Avg: +4-5%
Supply Chain costs including raw materials, energy, wages, benefits, handling costs.
General Mills Input Cost Inflation
7459-6
General Mills Fiscal 2014 Performance
(in Millions, except per share data)
Net Sales $17,910 +1%
Adjusted Segment $3,154 -2%
Operating Profit*
Net Earnings $1,824 -2%
Diluted Earnings
Per Share $2.83 +1%
Adjusted Diluted
Earnings Per Share* $2.82 +4%
*Non-GAAP measure. See our website for reconciliation.
Total Net Sales $17.9 Billion
U.S. Retail $10.6B
Int’l Segment $5.4B
CS&F $1.9B
Financial Results
7459-7
Fiscal 2014 U.S. Retail Segment
Big G Cereals $2,345 +0%
Baking Products 1,832 -1
Snacks 1,824 +6
Frozen Foods 1,526 -2
Meals 1,419 -4
Yoplait 1,312 -3
Small Planet Foods 348 +6
Net Sales by Division
Net Sales: $10.6B, Flat vs. LY Operating Profit: $2.3B, -3% vs. LY
$MM %
Change
Table does not foot due to rounding.
7459-8
Fiscal 2014 Convenience Stores & Foodservice Segment
Net Sales: $1.9B, -2% vs. LY Operating Profit: $307MM, -2% vs. LY
• Cereal
• Snacks
• Yogurt
• Biscuits
• Baking Mixes
• Frozen Breakfast
Six Priority Platforms
(Fiscal 2014 Net Sales: +4%)
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Fiscal 2014 International Segment
Net Sales: $5.4B; Constant-currency Growth +8%*
Adjusted Operating Profit*: $535MM; Constant-currency Growth +10%*
Europe $2,189 -4%
Canada 1,195 +5
Latin America 1,020 +38
Asia / Pacific 982 +9
Net Sales by Region
* Non-GAAP measure. See our website for reconciliation.
$MM % Growth
Constant-currency*
7459-10
Fiscal 2014 Stock Price Appreciation
GIS +10%
S&P Packaged Food Index +9%
S&P 500 Index +15%
May 2013
May 2014
Source: Bloomberg
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Growing Shareholder Dividends
$0.96
$1.12 $1.22
$1.32
$1.55 $1.64
F10 F11 F12 F13 F14
Dividends per Share
Current
Annualized
Rate
+17%
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A Long Record of Superior Returns to Shareholders
1984 – 2014 +14% +12%
1994 – 2014 +11% +9%
2004 – 2014 +12% +8%
2009 – 2014 +20% +18%
(Price Appreciation Plus Dividends, Compound Annual Growth)
Source: Bloomberg
Fiscal Years General Mills S&P 500
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Our Pension Performance
• Pension Plans Remain Healthy
• Qualified Plan Fully Funded
• Fiscal 2014 Return on Plan Assets +15%
7459-14
First Quarter 2015 Financial Summary
Net Sales $4,268 -2% -1%
Segment Operating Profit* 690 -15 -15
Adjusted Diluted .61 -13 -13 Earnings Per Share*
*Non-GAAP measure. See our website for reconciliation.
$ % Change
Constant- currency
% Change*
($ in Millions, Except per Share)
7459-15
Fiscal 2015 First Quarter Highlights
• International Constant-currency Net Sales* +6%
• CS&F Net Sales and Operating Profit Growth
• Improved Performance on U.S. Yogurt
• Continued Share Growth on U.S. Cereal
• Maintaining Strong Momentum on Snacks
• Good Growth on Natural/Organic Products
* Non-GAAP measure. See our website for reconciliation.
7226-16
Expanding Our Natural & Organic Business
7459-17
Our Long-term Growth Model
Growth Factor
Net Sales
Segment Operating Profit
Adjusted Diluted Earnings per Share
Total Return to Shareholders
Growth Target
Low single-digit
Mid single-digit
High single-digit
Double-digit
Compound Annual
7459-18
We’re Focused on Growing Consumer Groups
U.S. Multiculturals Millennials Emerging Markets Expanding Middle Class
Adults 55+
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Opportunity: Emerging Markets
Source: Euromonitor 2010
Middle Class Households in China, India, Brazil, Indonesia
(Millions)
200
384
2010 2020
59% 63%
34%
86%
71%
56%
26%
66%
China Indonesia India Brazil
% Urbanized by 2020
% Women Working by 2020
7459-20
Opportunity: Adults 55+
• 25% of U.S. Population in 2010
• 30% of Population by 2020
• Strong Health Focus, Read Ingredient Labels
Source: U.S. Census Bureau
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Opportunity: Millennials
• 20 to 37 Years Old
• 77 Million U.S. Consumers
• 63% of U.S. Moms by 2020
• Like Variety, Ethnic Flavors, Experimentation
Source: U.S. Census Bureau
7459-22
Opportunity: U.S Multiculturals
• 50% of Births Today
• By 2060, 57% of U.S. Population
• Hispanics Driving Growth
Source: U.S. Census Bureau
7459-23
Our Business Portfolio is Built for Growth
* Non-GAAP measure. Includes $17.9 billion consolidated net sales plus $1.3 billion proportionate share of joint venture net sales.
Fiscal 2014 Worldwide Net Sales*: $19.2 Billion
Snacks $3.2 Billion
Yogurt $3.0 Billion
Convenient Meals
$2.8 Billion
RTE Cereal $3.9 Billion
Super-premium Ice Cream $950 Million
Baking Products, Dough, Vegetables,
Other
7459-24
Consumers are Driving Growth in Our Categories
Global Category 2013 Retail Sales Projected 5-Yr. CGR
Source: Euromonitor 2013 Sweet & Savory Snacks includes Bars, Salty, Fruit, Nuts, Dessert Mixes, Cakes, and Pastries
RTE Cereal $28 Billion +5%
Ice Cream $77 Billion +7%
Yogurt $80 Billion +9%
Ready Meals $91 Billion +5%
Sweet & Savory Snacks $305 Billion +6%
7459-25
Demographic Trends Favor Cereal
126
96
84
103
Under
13
Age
13-34
Age
35-54
Age
55+
Cereal is Popular with Growing Age Groups
Population Growth to 2020: 8% 6% -2% 22%
(Cereal Eatings per Capita)
Source: NPD data 3 years ended Feb 2014; U.S. Census projections April 2012; Nielsen Panel F14, Buy Rate in pounds
Hispanic Cereal Consumption is High
92.3
89.7
F14 Penetration
23.1 22.7
F14 Buy Rate
General Population
Hispanic
7459-26
General Mills Cereal Trends
F07 F08 F09 F10 F11 F12 F13 F14 F07 F08 F09 F10 F11 F12 F13 F14
29.7
31.0
Big G Cereal Net Sales
General Mills RTE Cereal
Dollar Market Share
($ in Billions)
$2.3
$1.9
Source: Nielsen All-outlet F07-F09, Nielsen XAOC F10-F14
7459-27
U.S. Cereal Renovation and Innovation
Core Rennovation
Protein Innovation Gluten Free
7459-28
Cereal Partners Worldwide
• Indonesia
• Philippines
• Malaysia
• Thailand
• Turkey
Emerging
Developed
Net Sales: $2.1 Billion
(Fiscal 2014)
• Russia
• Chile
• Saudi Arabia
• Poland
• Romania
#1 Positions in Emerging Markets
Source: Nielsen latest 52 weeks available through April 2014 (Phillppines through Dec. 2013)
7459-29
U.S. Yogurt: Finished Fiscal 2014 with Clear Momentum
Source: Nielsen XAOC
Yoplait Dollar Share of Greek Segment
Retail Sales Growth Original Style Yoplait
8.5% 9% 10% 10% 10% 10%
11%
Cal2013
Jan Feb Mar Apr May Q1F15
(Fiscal 2014)
-6%
2%
6%
10%
6%
10%
Cal2013
Jan Feb Mar Apr May Q1F15
(Fiscal 2014 vs LY)
Cal 2013
F14 Retail Sales +41% F14 Retail Sales +2%
12%
7459-30
Bringing News to Our U.S. Yogurt Portfolio
Taste Performance on
Greek Varieties
Established Yogurt
Product News
¹ Comparison based on a national taste test of Yoplait Greek 100 Strawberry yogurt and Chobani ® Simply 100 Strawberry yogurt ² Comparison based on a national taste test of Yoplait Greek Blueberry yogurt and Chobani ® Blueberry fruit on the bottom yogurt
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New Yogurt Opportunity
Go-GURT Yogurt in Happy Meals
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Leading Emergence of Greek Yogurt in Key Western European Markets
UK France
Q1 Fiscal 2015 Retail Sales
+7%
Q1 Fiscal 2015 Retail Sales
+5%
Source: IRI latest quarter ended July 2014
7459-33
Greater China Yoplait Launch
• Consumer-first Launch Plan
• Plant Construction Underway
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
China Yogurt Category Sales
$4B
$8B
$17B
Source: Euromonitor 2013
(Calendar Years)
Estimates
7459-34
Leading U.S. Grain Snack Growth
Source: Nielsen XAOC
F10 F11 F12 F13 F14
Nature Valley Snacks
Retail Sales ($ in Millions)
$828
F10 F11 F12 F13 F14
Fiber One Snacks
Retail Sales ($ in Millions)
$416
CGR = +12% CGR = +14%
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New Snack Varieties
2 Varieties
2 Varieties
3 Varieties
June Launches
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Natural and Organic Snacks
Q1 Fiscal 2015 Snacks
Retail Sales +17%
Source: Nielsen XAOC FYTD ended 8.23.14, SPINS FYTD ended 8.10.14
7459-37
Convenient Meals: Old El Paso Mexican Products
U.S. Europe
7459-38
Wanchai Ferry Frozen Meals in
Greater China
7459-39
Yoki Meals in Brazil
7459-40
Häagen-Dazs Ice Cream in Europe
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Häagen-Dazs in China
91 112
148
202
283
F10 F11 F12 F13 F14 F15Plan
Number of Shops
350+
7459-42
COGS HMM Savings
2010-2014 CumulativeSavings
2015 Plan Cumulative 2010-2020Savings Goal
(Fiscal Years, $ in Millions)
$2,000
$4,000
>$400
7459-43
HMM Has Helped Maintain Margins
35.5% 35.6%
39.6% 40.0%
36.3% 36.1% 35.6%
F08 F09 F10 F11 F12 F13 F14
Gross Margin % of Sales
7459-44
Additional Cost Savings Initiatives
• Project Boost – International Structure Review
– Streamline International Market/Region Structure
– Standardize and Centralize Key Processes via Global Business Solutions
– $40 Million Savings Over Three Years Through Fiscal 2015
• Project Century - North America Supply Chain Review
– Streamline and Simplify Supply Chain Network
– $100 Million Cumulative Savings by Fiscal 2017
• Further Reduce Overhead Costs by $40 Million in Fiscal 2015, Additional Savings in Fiscal 2016
7459-45
Our Fiscal 2015 Growth Targets
Net Sales +Mid Single-digit
Adjusted Segment +Mid Single-digit Operating Profit
Adjusted Diluted Earnings +High Single-digit per Share
Fiscal 2015 Constant-currency Growth
Champions
Awards
2014
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Greek Yogurt in Europe
• Patrick Bresdin
• Philippe Demonte
• Severine Geoffroy
• Alexandre Pillaud
7459-48
Manufacturing in Greater China
• ZhiJun Guan
• De Huang
• Neo Wang
• Van Wang
• Yong Zhang
7459-49
“Festa Junina” Driving Growth in Brazil
• Cassio De Lima
• Erasmo Nuzzi
• Wellington Pauperio
• Alex Rodrigues
• Wagner Tortelli
7459-50
Old El Paso
• Robert Clements
• Anne Dao
• Kevin Fussner
• Maggie Harris
• Krista Lorio
• Dan Stangler
7459-51
Building Our Brands with Hispanic Consumers
• Kevin Greer
• Brian Kittelson
• Gail Peterson
• Giselle Restrepo
• Howard Riebling
• Eliana Wahnon
7459-52
Small Planet Foods “Save the Bees” Campaign
• Kelly Boyle
• Esmer Cancino
• Tom Rabaey
• Taylor West
7459-53
86th Annual Shareholders
Meeting
Putting the Consumer First
7226-54
Additional Information Related to the Annie’s Transaction
This document and the description contained herein is neither an offer to purchase nor a solicitation of an offer to sell shares of Annie’s, Inc. A solicitation and an offer to buy shares of Annie’s, Inc. common stock is being made pursuant to an offer to purchase and related materials that General Mills and Sandy Acquisition Corporation, it’s wholly owned subsidiary, have filed with the Securities and Exchange Commission (the “SEC”). Annie’s has also filed with the SEC a Solicitation/Recommendation Statement on Schedule 14D-9 with respect to the tender offer. These documents contain important information about the tender offer and stockholders of Annie’s are urged to read them carefully. Stockholders of Annie’s may obtain a free copy of these documents and other documents filed by Annie’s, General Mills or Sandy Acquisition Corporation with the SEC at the website maintained by the SEC at www.sec.gov. In addition, stockholders may obtain a free copy of these documents by contacting MacKenzie Partners, Inc., the information agent for the tender offer, toll-free at 800-322-2885 (or at +1-212-929-5500 collect if you are located outside the U.S. and Canada) or by email to [email protected].
7459-55
Reconciliation of Adjusted Segment Operating Profit
2013
U.S. Retail $501 $517 $2,312 $2,393
Adjusted International 146 140 535 515
Convenience Stores & Foodservice 86 75 307 315
Adjusted Segment Operating Profit $733 $733 $3,154 $3,223
Unallocated Corporate Items 54 119 196 326
Divestiture (Gain) (66) -- (66) --
Restructuring, Impairment, and Other Exit Costs -- 2 4 20
Venezuela Currency Devaluation 62 11 62 25
Operating Profit $682 $601 $2,957 $2,852
2014
Q4
Table does not foot due to rounding.
(Fiscal Years, $ in Millions)
2013 2014
Fiscal Year
7459-56
Reconciliation of Adjusted Diluted EPS
Diluted EPS $0.65 $0.55 $2.83 $2.79
Mark-to-market Effects (.01) .01 (.05) --
Divestiture Gain, net (.06) -- (.06) --
Restructuring -- -- .01 .02
Tax Item -- (.03) -- (.13)
Acquisition Integration Costs -- -- -- .01
Venezuela Currency Devaluation .09 .01 .09 .03
Diluted EPS Excluding Certain $0.67 $0.54 $2.82 $2.72 Items Affecting Comparability
2014 2013
Q4
(Fiscal Years)
2014 2013
Fiscal Year
7459-57
Reconciliation of International Full Year Constant-currency Net Sales Growth
Europe -1% 3 pts -4%
Canada -1 -6 5
Asia/Pacific 9 -- 9
Latin America 16 -22 38
Total International 4% -4 pts 8%
Total Net Sales 1% -1 pt 2%
% Change in Net Sales on a Constant- currency Basis Impact of Foreign
Currency Exchange
% Change in Net Sales
as Reported
Fiscal 2014
7459-58
Reconciliation of Full Year Adjusted International Segment Operating Profit
2014
International Segment Operating Profit $473 $490 -4%
Venezuela Currency Devaluation 62 25
Adjusted International Segment Operating Profit $535 $515 4% Add Back of Foreign Currency Exchange 6% Adjusted Constant-currency International Segment Operating Profit Change 10%
Fiscal Year
(Fiscal Years, $ in Millions)
Change 2013
7226-59
Reconciliation of Total Segment Operating Profit
U.S. Retail $457 $612
International 146 126
Convenience Stores & Foodservice 87 74
Total Segment Operating Profit $690 $812
Unallocated Corporate Items 119 74
Restructuring, Impairment, and Other Exit Costs 14 3
Operating Profit $558 $735
(Fiscal Years, $ in Millions)
Table does not foot due to rounding.
2015 2014
Q1
7226-60
Reconciliation of Adjusted Diluted EPS and Related Constant-currency Growth Rate
Diluted EPS $0.55 $0.70 -21%
Mark-to-market Effects .05 --
Restructuring .01 --
Adjusted Diluted EPS $0.61 $0.70 -13%
Impact of Foreign Currency Exchange --
Adjusted Diluted EPS On a Constant-currency Basis -13%
(Fiscal Years)
2015 2014
Q1
Change
7226-61
Reconciliation of International Constant-currency Net Sales Growth
(Fiscal Years)
Europe 9% 5 pts 4%
Canada -6 -4 -2
Asia/Pacific 4 -- 4
Latin America -4 -24 20
Total International 2% -4 pts 6%
Total Net Sales -2% -1 pts -1%
% Change in Net Sales
on a Constant- currency Basis
Impact of Foreign Currency Exchange
% Change in Net Sales
as Reported
Q1 2015
7226-62
(Fiscal Years)
Total Segment Operating Profit -15% -- -15%
% Change in Total Segment
Operating Profit on a Constant- currency Basis
Impact of Foreign Currency Exchange
% Change in Total Segment Operating Profit
as Reported
Q1 2015
Reconciliation of Constant-currency Total Segment Operating Profit Growth
