Exhibit 99.1
FOR IMMEDIATE RELEASE
February 17, 2003
CONTACTS: (Media) Marybeth Thorsgaard 763-764-6364
-------- (Analysts) Kris Wenker 763-764-2607
GENERAL MILLS REAFFIRMS FISCAL 2003 EARNINGS OUTLOOK
COMPANY OUTLINES GROWTH GOALS FOR FISCAL 2004 THROUGH 2006
MINNEAPOLIS, MINN.---General Mills, Inc. (NYSE: GIS) In a presentation
to the Consumer Analyst Group of New York's investor conference today, General
Mills said its November 2001 acquisition of Pillsbury is contributing to strong
growth in the current fiscal year and significantly enhances the company's
longer-term growth prospects.
General Mills reaffirmed its financial outlook for the current fiscal
year, which ends May 25, 2003. Worldwide unit volume is targeted to increase 4
percent on a comparable basis (as if Pillsbury had been included for all of
fiscal 2002), and 2003 comparable net sales are forecast to grow approximately 6
percent. On an as-reported basis, unit volume and net sales are expected to show
strong double-digit growth in 2003.
The company reiterated its fiscal 2003 earnings guidance of between
$2.60 and $2.62 per share before unusual items. This represents growth of more
than 50 percent from the $1.70 per share earned before unusual items in fiscal
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2002. The company continues to estimate that unusual items expense, primarily
related to Pillsbury transaction and integration costs, will total approximately
$100 million pre-tax (17 cents per share) in 2003. This compares to unusual
items expense of $190 million pre-tax (35 cents per share) in fiscal 2002. Net
of unusual items, earnings per share are estimated to total between $2.43 and
$2.45 per share, representing growth of more than 80 percent from $1.34 in 2002.
Chairman and CEO Steve Sanger said, "General Mills' businesses have
posted solid growth through the first 8 months of 2003 and we are well on track
to deliver the strong sales and earnings increases we have targeted for the full
year."
The company said it remains comfortable with its earnings estimate for
the fiscal 2003 third quarter, ending Feb. 23, 2003, of 65 to 66 cents per share
before unusual items. General Mills plans to report its third-quarter results on
March 19, 2003.
Looking further ahead, General Mills outlined its key growth goals and
assumptions for the three-year period through fiscal 2006. Executive Vice
President and Chief Financial Officer Jim Lawrence said, "We expect to generate
strong organic volume and sales growth from our recently expanded business
portfolio, so we aren't counting on any growth from further acquisitions during
this three-year period. We expect to realize $125 million of additional cost
synergies from the Pillsbury acquisition in 2004, and $300 million in
supply-chain productivity over the next three years, which will drive operating
margin expansion. And we expect our joint-venture operations to contribute to
our after-tax earnings growth."
Lawrence said that some of the cash generated by the company's growing
operations would be used to pay down debt, consistent with the objective of
returning General Mills to the A-level debt ratings held prior to the Pillsbury
acquisition. Plans call for reducing total debt by approximately $2 billion by
the end of fiscal 2006. This planned debt reduction should lower General Mills'
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interest expense over the three-year period, benefiting earnings growth. The
three-year plan doesn't count on any significant share repurchases, which have
been a source of earnings-per-share growth for General Mills in recent years.
Using these assumptions, General Mills said it expects 2004 net sales
to grow at least 6 percent, fueled by strong planned levels of product
innovation and the benefit of a 53rd week in the fiscal period. The company
expressed comfort with the First Call consensus EPS estimate for 2004 of $3.00
per share. This would represent approximately 15 percent growth from the
guidance of $2.60 to $2.62 per share before unusual items the company has
provided for 2003.
For the three-year period through fiscal 2006, General Mills expects
net sales to grow at a compound annual rate of 5 to 6 percent. Diluted earnings
per share are expected to increase at a compound annual rate of at least 11
percent over the same three-year period.
"These targets rank at the upper end of published growth expectations
for our peer consumer products companies," Sanger noted, " but we feel they are
appropriate for General Mills, based on the strength of our new business
portfolio. We believe that achieving the growth goals we've outlined today will
result in superior returns to General Mills shareholders."
A WEBCAST OF GENERAL MILLS' PRESENTATION TO THE CONSUMER ANALYST GROUP OF NEW
YORK CONFERENCE IS AVAILABLE THROUGH FEBRUARY 24, 2003 ON THE INTERNET AT
GENERAL MILLS' CORPORATE HOME PAGE: www.generalmills.com.
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This press release contains forward-looking statements within the meaning of The
Private Securities Litigation Reform Act of 1995 that are based on management's
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 volume and earnings
could be affected by difficulties resulting from the Pillsbury acquisition, such
as integration problems; failure to achieve synergies; unanticipated
liabilities; inexperience in new business lines; and changes in the competitive
environment. Our future results also could be affected by a variety of
additional factors such as: competitive dynamics in the U.S. ready-to-eat cereal
market, including pricing and promotional spending levels by competitors; the
impact of competitive products and pricing; product development; actions of
competitors other than as described above; acquisitions or disposals of
businesses or assets; changes in capital structure; changes in laws and
regulations, including changes in accounting standards; customer demand;
effectiveness of advertising and marketing spending or programs; consumer
perception of health-related issues; economic conditions, including changes in
inflation rates or interest rates; fluctuation in the cost and availability of
supply chain resources, and foreign economic conditions, including currency rate
fluctuations. The company undertakes no obligations to publicly revise any
forward-looking statements to reflect future events or circumstances.
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