General Mills CEO Jeff Harmening Says He Remains Confident Company Will 'Emerge From The Pandemic A Stronger Company'

July 2, 2020
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General Mills' away-from-home demand decreased while food at home had 'an unprecedented increase in demand.'

General Mills Reports Results for Fiscal 2020 and Outlines Fiscal 2021 Priorities

July 01, 2020 07:00 AM EDT/MINNEAPOLIS--()--General Mills (NYSE: GIS) today reported results for the fourth quarter and fiscal year ended May 31, 2020. Fiscal 2020 was a 53-week year, with the extra week falling in the fourth quarter.

“I’m proud of the way our organization has remained focused on serving the needs of our consumers and communities while protecting the health and safety of our employees throughout the COVID-19 pandemic,” said General Mills Chairman and Chief Executive Officer Jeff Harmening. “Amid significant challenge and change in the world around us, General Mills adapted and executed in fiscal 2020 to deliver outstanding financial results while fulfilling our purpose of making food the world loves. We’ve demonstrated extraordinary agility to meet the unprecedented increase in demand for food at home and to win across our categories.

“As we turn to fiscal 2021, we’ll maintain a sharp focus on the near-term opportunity to meet continued elevated demand while continuing to advance our long-term strategies by investing to build our brands, strengthen our innovation, and enhance our strategic capabilities. I remain confident that General Mills will emerge from the pandemic a stronger company.”

Responding to COVID-19

The COVID-19 pandemic has had a profound impact on consumer demand across the company’s major markets, including driving an unprecedented increase in demand for food at home and a corresponding decrease in away-from-home food demand resulting from efforts to reduce virus transmission. The company estimates that at-home food represented approximately 85 percent of its pre-pandemic worldwide net sales and away-from-home food represented the remaining 15 percent.

In the fourth quarter of fiscal 2020, elevated at-home food demand accelerated net sales growth in the North America Retail segment, where a significant share of net sales comes from categories that were most impacted by at-home eating, including meals, baking, and cereal. The impact of elevated at-home demand was less pronounced in the Europe & Australia segment, reflecting its lower proportion of net sales in those categories. The Pet segment experienced increased demand early in the fourth quarter from stock-up purchasing, which partially unwound by the end of the quarter. Lower away-from-home food demand reduced growth for the Convenience Stores & Foodservice and Asia & Latin America segments.

During the global pandemic, 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 implemented employee safety measures, based on guidance from the CDC and WHO, across all its supply chain facilities, including proper hygiene, 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.

The company has risen to meet the needs of its communities around the world during the pandemic, with a particular focus on food security. During the fourth quarter, General Mills contributed $10 million in monetary and food donations to organizations addressing hunger and food access.

In response to changing consumer and customer needs, General Mills has increased its agility and executed with excellence. The company has partnered with its customers to prioritize production of its most important products to increase capacity and maintain strong service levels and has adapted content on its food websites to encourage cooking education and drive stronger E-commerce sales. Additionally, the company has taken actions to reinforce its healthy liquidity position by refinancing short-term debt, and it has maintained its strong capital discipline, which helped contribute to a significant increase in free cash flow generation in fiscal 2020.

General Mills is focused on delivering superior execution during the COVID-19 situation while continuing to invest in its brands and capabilities to ensure it emerges from the pandemic a stronger company in a position to generate consistent, profitable growth and top-tier returns for its shareholders.

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