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General Mills, Inc. (GIS)
February 19, 2013 8:00 am ET
Kendall J. Powell - Chairman and Chief Executive Officer
Ian R. Friendly - Executive Vice President and Chief Operating officer of Us Retail
Christopher D. O'Leary - Executive Vice President and Chief Operating officer of International
Donal Leo Mulligan - Chief Financial Officer and Executive Vice President
Kristen Smith Wenker - Vice President of Investor Relations
Kenneth Goldman - JP Morgan Chase & Co, Research Division
Alexia Howard - Sanford C. Bernstein & Co., LLC., Research Division
Robert Moskow - Crédit Suisse AG, Research Division
Bryan D. Spillane - BofA Merrill Lynch, Research Division
Christopher R. Growe - Stifel, Nicolaus & Co., Inc., Research Division
Eric R. Katzman - Deutsche Bank AG, Research Division
Previous Statements by GIS
» General Mills Management Discusses Q2 2013 Results - Earnings Call Transcript
» General Mills Management Discusses Q1 2013 Results - Earnings Call Transcript
» General Mills Management Discusses Q4 2012 Results - Earnings Call Transcript
Before I introduce General Mills, please join me in thanking them for this morning's breakfast and a special thanks for the local Mills sales team, which worked so hard to make it happen. And now without further ado, it is my pleasure to introduce General Mills to kick off our conference as is their tradition. I'm happy to turn the podium over to Ken Powell, Chairman and Chief Executive Officer. Ken will introduce his team and tell us about Mills' long-term growth strategy. Ken, welcome.
Kendall J. Powell
Thanks, Sally. Good morning to one and all. It is a pleasure to see everybody and to once again lead off this year's conference. So let me first introduce my General Mills colleagues. To my immediate left is Ian Friendly, Chief Operating Officer for our U.S. Retail business. Next to him is Chris O'Leary, Chief Operating Officer for our International operation. And then next is Don Mulligan, our Chief Financial Officer. At the far end is Kris Wenker, our Investor Relations Officer. And I also want to recognize Penny Leporte and Bob Houghton, also from Investor Relations for their work on this presentation and also on the terrific breakfast that we all just enjoyed.
I want to give you a quick reminder that our presentation this morning includes comments about the future that are based on our current views and assumptions. As noted on the slide behind me, numerous factors could cause our actual results to be different than our estimates.
Over the next 50 minutes or so, my colleagues and I will provide a detailed update on General Mills and our growth prospects. Here's a summary of our message to you today. We're completing a 2-year period of significant investments. Investments that have strengthened our business in our core U.S. market and investments that meaningfully expanded our base in international markets. Our focus now is on integrating the new operations and executing well across the entire company.
We see stronger growth in our immediate future. In December, we raised our earnings outlook for fiscal 2013 to a range of $2.65 to $2.67 per share. And in fiscal 2014, our plans call for high single-digit EPS growth, consistent with our long-term model. And we expect our sales and earnings growth, along with disciplined use of our strong cash flows, to result in superior returns to General Mills shareholders.
Let me quickly recap the key actions we focused on in recent years to position General Mills for continuing sustainable growth and return. In our core U.S. market, we've introduced an array of new food products. This is job 1 for a branded food company. It's up to us to generate the consumer sales that make our categories grow. So we focused on creating high-quality, great-tasting foods. And we put particular focus on ideas that appeal to the fastest-growing U.S. consumer groups, and these are older adults, the millennial generation and multicultural families. In total, products introduced in just the last 20 months have generated well over $1 billion in U.S. sales. This includes some real standouts such as Fiber One 90-calorie brownies and peanut butter multi-grain Cheerios.
We've invested strongly in our U.S. yogurt business. We've introduced a significant number of new items and product improvements in established segments of the market. And we've launched differentiated new items in the emerging Greek segment. Yogurt is a priority category for us in the U.S., and we're deeply committed to stewarding its growth for many years to come. Our sales trends are improving here. Ian will give you an update on our progress in just a few minutes.
We've invested to expand our U.S. organic and natural foods business. Our actions have included successful product innovation on existing lines and the acquisition last spring of Food Should Taste Good snacks. In total, our Small Planet Foods division is on track to generate net sales of more than $300 million this fiscal year. We're now a significant player in one of the U.S. food industry's fastest-growing segments.
Nearly half of all U.S. consumer food spending is on food eaten away from home, and we've been building our market share positions in this big and diverse industry. We've completed a substantial restructuring of this business. We've launched innovative new products. We've invested in a powerful direct-selling organization, now one of the top-rated sales teams in the foodservice industry according to Kantar. And profitability on this $2-billion business segment has more than doubled in recent years, as we focus on the most attractive customer channels and product categories.