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General Mills Provides Business Update at 2020 Barclays Global Consumer Staples Conference

September 08, 2020

MINNEAPOLIS--(BUSINESS WIRE)-- In conjunction with its participation at the 2020 Barclays Global Consumer Staples Conference, General Mills (NYSE: GIS) provided an update on its recent business performance and its progress against its three priorities for fiscal 2021.

As the COVID-19 pandemic continues, General Mills’ most important objectives remain the continued health and safety of its employees and the ongoing ability to serve consumers around the world. The company has adjusted its ways of working to minimize virus transmission, including implementing social distancing, mask use, and temperature screenings. To date, all General Mills manufacturing and distribution facilities have continued to operate without significant disruption related to COVID-19.

Through the initial months of its fiscal year, the company has made progress against each of its three priorities for fiscal 2021:

1) Compete Effectively, Everywhere We Play
General Mills continues to expect the largest factor impacting its fiscal 2021 performance will be the relative balance of at-home versus away-from-home consumer food demand. Year to date in fiscal 2021, at-home food demand has remained elevated relative to pre-pandemic levels, though it has moderated from the fourth quarter of fiscal 2020 in most of the company’s key markets around the world.

The company continues to compete effectively and win in the current environment, including year-to-date market share gains in the U.S. in retail and away-from-home channels. In addition, the company is gaining market share year to date in each of its largest international markets including Canada, France, the U.K., China, and Brazil. Retail inventory levels, which fell sharply in the early stages of the pandemic, saw modest replenishment in the first quarter of fiscal 2021. The company anticipates retail inventory levels will largely normalize by the end of fiscal 2021 as supply and demand equalize across its product platforms.

The combination of higher at-home food demand and General Mills’ top-tier supply chain, sales, and marketing execution has led to significant increases in household penetration for the company’s brands, including Cheerios, Pillsbury, Old El Paso, Progresso, Yoplait, Betty Crocker, and more. In the past six months, General Mills brands gained more household penetration than the leading branded competitor in 8 of the company’s top 10 U.S. categories.

2) Drive Efficiency to Fuel Investment
General Mills remains focused on its objective of delivering a full-year fiscal 2021 adjusted operating profit margin approximately in line with fiscal 2020 levels, with margin tailwinds from Holistic Margin Management savings and volume leverage offset by headwinds from input cost inflation, increased investment in brands and capabilities, higher costs to service elevated demand, and higher ongoing health and safety-related expenses. Strong fixed cost leverage is expected to result in adjusted operating profit margin expansion in the first quarter of fiscal 2021, while higher external supply chain costs and a more difficult prior-year comparison are expected to result in a decline in adjusted operating profit margin in the second quarter.

3) Reduce Leverage to Increase Financial Flexibility
Building on its strong track record of capital discipline and cash generation, General Mills remains on track to reduce its net-debt-to-adjusted-EBITDA ratio to below 3.2x in fiscal 2021.

As part of the company’s attendance at the 2020 Barclays Global Consumer Staples Conference, Kofi Bruce, Chief Financial Officer, and Jon Nudi, Group President, North America Retail, will participate in a webcasted fireside chat on Wednesday, September 9, 2020, at 12:20 p.m. Central time. In addition, General Mills plans to report results for its fiscal 2021 first quarter on Wednesday, September 23, 2020, and will webcast a question and answer session on those results at 7:30 a.m. Central time on that day. Interested parties can access the webcasts of the Barclays conference and the company’s discussion of its first-quarter results at www.generalmills.com/investors.

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are based on our 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: the impact of the coronavirus (COVID-19) pandemic on our business, suppliers, consumers, customers, and employees; disruptions or inefficiencies in the supply chain, including any impact of the coronavirus (COVID-19) pandemic; 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 tax legislation, 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; effectiveness of restructuring and cost saving initiatives; 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 statement to reflect any future events or circumstances.

About General Mills
General Mills is a leading global food company whose purpose is to make food the world loves. Its brands include Cheerios, Annie's, Yoplait, Nature Valley, Häagen-Dazs, Betty Crocker, Pillsbury, Old El Paso, Wanchai Ferry, Yoki, BLUE and more. Headquartered in Minneapolis, Minnesota, USA, General Mills generated fiscal 2020 net sales of U.S. $17.6 billion. In addition, General Mills’ share of non-consolidated joint venture net sales totaled U.S. $1.0 billion.

(analysts) Jeff Siemon: 763-764-2301

(media) Kelsey Roemhildt: 763-764-6364

Source: General Mills

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