General Mills

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General Mills
Annual Report 2012 Generating Balanced Growth

Generating Balanced Growth Our brands compete in large and growing food categories that are on-trend with consumer tastes around the world. We’re investing in our established brands while also developing new products. And we’re building our business in developed markets while increasing our presence in emerging markets worldwide. Our goal is to generate balanced, long-term growth.

General Mills at a Glance
U.S. Retail
Net Sales by Division
23% 20%

International
Net Sales by Region

10%

43%

$10.5 Billion
23% 20% 18% 15% 14% 8% 2% Big G Cereals Meals Pillsbury USA Snacks Yoplait USA Baking Products Small Planet Foods

2% 8% 18% 14%

$4.2 Billion
43% 24% 23% 10% Europe Asia/Pacific Canada Latin America

23%

15%

24%

Bakeries and Foodservice
Net Sales by Customer Type
30%

12%

Joint Ventures
Net Sales by Joint Venture
(not consolidated, proportionate share)

16%

$2.0 Billion
58% Bakeries & National Restaurant Accounts 30% Foodservice Distributors 12% Convenience Stores

$1.3 Billion
58% 84% Cereal Partners Worldwide (CPW) 16% Häagen-Dazs Japan (HDJ) 84%

Our Fiscal 2012 Financial Highlights
In millions, except per share and return on capital data 52 weeks ended May 27, 2012 52 weeks ended May 29, 2011

Change

Net Sales Segment Operating Profit a Net Earnings Attributable to General Mills Diluted Earnings per Share (EPS) Adjusted Diluted EPS, Excluding Certain Items Affecting Comparability b Return on Average Total Capital a Average Diluted Shares Outstanding Dividends per Share

$16,658 3,012 1,567 2.35 2.56 12.7% 667 $ 1.22

$14,880 2,946 1,798 2.70 2.48 13.8% 665 $ 1.12

+ 12% + 2 – 13 – 13 + 3 –110 basis pts. + 0 + 9

Net Sales
12 11 10 09 08

Dollars in millions 16,658 14,880 14,636 14,556 13,548

Segment Operating Profita
Dollars in millions 12 11 10 09 08 3,012 2,946 2,840 2,624 2,394

Adjusted Diluted Earnings per Shareb
Dollars 12 11 10 09 08
a

Return on Average Total Capitala
Percent 2.56 2.48 12 11 10 09 08 12.3 11.8 12.7 13.8 13.8

2.30 1.99 1.76

See page 85 for discussion of non-GAAP measures.

b Results exclude certain items affecting comparability. See page 85 for discussion of non-GAAP measures.

1

To our Shareholders
Ken Powell Chairman and Chief Executive Officer

I appreciate this opportunity to give you an update on General Mills’ recent business performance and our plans for continuing growth in the years ahead. Fiscal 2012 was characterized by the highest inputcost inflation that we’ve experienced in more than three decades. Our supply chain costs — primarily food ingredients and energy — rose more than 10 percent during the year ended May 27, 2012. This sharp inflation, roughly double the average annual inflation rate we use for long-term planning assumptions, restrained our earnings growth for the year. In addition, slow economic recovery kept many consumer budgets under pressure. In this environment, we took strategic actions that increased our worldwide sales base and strengthened our portfolio. In particular, we increased advertising and media investment on our base business, we sustained a high level of new product activity worldwide, and we made several acquisitions that expand our participation in fast-growing food categories and emerging markets around the globe. We also took restructuring actions designed to improve our organizational effectiveness and alignment on key growth strategies. General Mills’ net sales grew 12 percent in fiscal 2012 to reach $16.7 billion. The international Yoplait yogurt business that we acquired in July 2011 contributed 7 points of net sales growth, and sales for our base business grew 5 percent. Segment operating profit increased 2 percent to exceed $3 billion for the first time in company history. Profits grew at a slower rate than sales primarily due to the 2

higher input costs, the change in our...
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