2. Reasons we like General Mills
● Market leaders
● Committed to innovation
● Committed to Shareholders

3. Company Background
-Sells products in over 100 countries
-General Mills was founded in 1928
-Currently the company holds more than 30 major brands
-History of innovative techniques: Shifting Consumer Demands
-Competitive Market Share

4. Company Background: Recent Events
-GIS bought Annie’s in 2014 to adapt to a
shifting demand.
-Green Giant Sale- $700+ million.
-A recent Recall, has some worried, but is
not to be feared
-Main competitor in the Cereal sector is
Kellogs

5. Sector Overview
The Packaged food industry is
estimated to grow 4.5% in the next
five years.
-

6. SWOT ANALYSIS
● Rising demand
● Industry growth rate
OPPORTUNITIES
● Net receivable is high
● Possible Lawsuits
WEAKNESS
● Highly fluctuating input
costs.
● Less preference for
processed foods
● Wide variety of
product lines
● Strong tradition of
dividends.
● International operations
● Decrease in expenses
● Increase in the ratio of
operating cash flow to
debt
STRENGTHS
THREATS

7. Porter’s 5
Buyer Power: Medium -- some switching costs, but few large retailers have power (Wal Mart)
Supplier Power: Medium -- contracts, raw materials are commodities
Barriers to New Entrants: High -- large start-up costs, high brand loyalty, distribution access
Threat of Substitutes: High -- generic brands, other options
Intensity of Competitive Rivalry: High -- many competitors, threat of substitutes, but GIS has good
standing

8. Historical Dividends
Regular dividends without interruption or
reduction for 117 years
Dividend growth at compound rate of 13%
over the past 5 years
Steady dividend yield of 2.5% - 3.3% over
the past 5 years
Payout ratio at 80.3%, average increase of
18.8% over 5 years

9. International Market Exposure
● 30% in international sales, up from 17%
in 2011, with 2.6% average 5 year
growth
● 60% in domestic sales
● Plans to expand further into international
markets, but should be at a steady pace

10. Risk Analysis
Highly competitive and changing
sector.
Input prices have proved volatile.
Interest rates- Low amount of non-
fixed rates.
Currency Fluctuations
Currency, Interest Rates, and
Inputs have been
financially hedged

11. Relative Valuation

12. Valuations
Correlated with our
portfolio at .3397
DCF @ 6.5%
12% upside

13. Investment Thesis
● Strong history of being market leaders in innovation
○ 150 new products last year
○ Beat Campbell’s to healthy soups
● We expect net sales growth to remain 2-4%
○ This serves as a solid foundation for company stability into the future
● Commitment to shareholder returns
○ Strong Dividends--117 years
○ Maintain dividend yield @ 2-3%
Recommendation:
Buy at Market Price

14. Q&A