General Mills enters fiscal 2019 ready for growth in key areas
General Mills has released results for its fourth quarter and full fiscal year ended May 27, which it says are in line with the company’s most recent fiscal 2018 outlook.
“Fiscal 2018 represented an important first step in returning our business to sustainable topline growth,” CEO Jeff Harmening said in a release.
“We made significant progress toward competing more effectively this year, with strong innovation, marketing, and in-store execution driving positive organic sales growth in each of our last three quarters.
“And we moved to reshape our portfolio for future growth with the acquisition of Blue Buffalo, a fast-growing, highly profitable business that is leading the transformation of the U.S. pet food category.”
Harmening said that while the company’s full-year profit results fell short of initial projections, it finished the year showing growth in sales, margins, profits and EPS in the fourth quarter.
“I’m pleased with the continued progress we’ve made in cash generation, with our free cash flow up nearly 30 per cent this year,” he said.
Harmening said entering fiscal 2019 the company will continue to follow its “Consumer First” strategy as well as to work on global growth priorities to build momentum.
“We are committed to competing effectively across all our brands and geographies, increasing investments to accelerate our differential growth platforms, and maximizing the growth opportunities for Blue Buffalo. We are also keenly focused on maintaining our efficiency in this more inflationary cost environment, and we have initiatives underway to help protect our profitability.”
General Mills said it continues to pursue its Consumer First strategy and execute against its three key global growth priorities:
- competing effectively on all brands and across all geographies through strong innovation, effective consumer marketing, and excellent in-store execution;
- accelerating growth on its four differential growth platforms including Häagen-Dazs ice cream, snack bars, Old El Paso Mexican food, and its portfolio of natural and organic food brands; and
- reshaping its portfolio through growth-enhancing transactions, including the recent acquisition of Blue Buffalo Pet Products, the leading brand in the fast-growing wholesome natural pet food category in the U.S.
The company said it also intends to pursue divestitures of growth-dilutive businesses to further reshape its portfolio. By focusing on these priorities, General Mills expects to generate consistent topline growth, which, when balanced with a disciplined focus on margin expansion, cash conversion, and cash returns, should create significant value for shareholders.
In its fourth quarter, net sales increase two per cent to $3.89 billion.
Organic net sales increased one per cent, primarily reflecting benefits from organic net price realization and mix across all four operating segments, partially offset by lower organic volume in the North America Retail, Europe and Australia, and Asia and Latin America segments.
The company’s operating profit totalled $561 million, down eight per cent from last year due to higher restructuring, impairment, and other exit costs.
Net earnings totalled $354 million, down 13 per cent from a year ago, reflecting lower operating profit and higher net interest expense, partially offset by a lower effective tax rate.
Net sales increased one per cent to $15.74 billion and organic net sales essentially matched year-ago levels.