SINCE 1856

EQUITY RESEARCH REPORT

1
TABLE OF CONTENTS

1. About the company. .3

2. Analyst Rating .4

3. Analyst Suggestion .5

4. Business Segment .5

5. Revenue Classification for past three year .6

6. Earning Per Share .7

7. Dividend Per Share .7

8. Executive Overview .7

9. Business Risk .8

10.Competitive Advantages .9

11.SWOT Analysis .10

12.Financial Analysis .11

13.Valuation .12

14.Trade Comparable .15

15.Appendix

➢ Income Statement .16

➢ Balance Sheet .17

➢ Cash Flow Statement .18

➢ Discounting Cashflow .19

➢ Trading Comparable .20

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 1. ABOUT THE COMPANY
General Mills, Inc., is an American multinational
manufacturer and marketer of branded processed
consumer foods sold through retail stores. The
company was founded by Illinois Congressman Robert
Smithho leased power rights to flour mills operating
along the west side of Saint Anthony Fallsbanks of the
Mississippi River at Saint Anthony Falls in
Minneapolis, the company originally gained fame for
being a large flour miller. The company can trace its
history to the Minneapolis Milling Company,
incorporated in 1856.
It is headquartered in Golden Valley, Minnesota, a
suburb of Minneapolis
Today, the company markets many well-known North
American brands, including Gold Medal flour, Annie's
Homegrown, Lärabar, Cascadian Farm, Betty Crocker,
Yoplait, Nature Valley, Totino's.

Products:
Breakfast cereals under the General Mills name,
including Cheerios, Wheaties, Chex, Lucky Charms,
Trix, Cocoa Puffs and Count Chocula and the other
monster cereals.

MARKET PROFILE Operation in worldwide market

Closing price $ 67.00 ➢ General Mills has a strong global presence and
52-Week High/Low 90.89/60.33 operates in numerous countries worldwide. The
company generates a substantial portion of its revenue
Market Cap 38.869 B
from its international operations.
O/S Shares (in mn) 564.549 ➢ By tailoring its products to suit local tastes and
EV/Revenue 2.52 preferences, General Mills successfully expands its
market share and revenue in different regions.
EV/EBITDA 10.85 ➢ The company supplies its products to restaurants,
P/E 15.79 hotels, schools, hospitals, and other foodservice
establishments.
Insti. Holdings 80.65%
Insider Holdings 0.21%

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 The company price trend changes
as per the last 5 financial year
comparing with the S&P 500 Index
prices.

2. ANALYST RATING
At the time of Writing, General Mills Inc Traded at Prive value of $ 67. The
forecasted intrinsic Value or Enterprise Value Ranges from $66 - $131 per Share,
Which implies that there is a potential raise in the value during the long term and
due to certain variation during resent year the exit multiple is less than current
price. There is a expected upside of 53.43%. For this reason, I have issued
“BUY” rating for GIS. General Mills is working on their strength in the retail
market and bringing innovation in the pet section and having a constant growth
in the revenue which is the strong reasons for the rating.

Source: https://tinyurl.com/u94697tf

Click this link to view the google page.

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3. ANALYST SUGGESTIONS:
• The company is having a compounded annual growth rates of 3.97% as per
the consenses report from market screener compared with the forecasted
results upto 2026.
• The sales value of the company is having a growth in a constant rate but in
a smaller amount.
• Due to some certain reasons the previous Market trends of the company is
falling but the company is having the potential of growth in the future
period.
• The company has announced the innovation in the product and the pet
section which is increasing the sales in that section.

4.BUSINESS SEGMENTS:
General Mills Inc is currently working with the only one distinct ways,
i. North America Retail Segment
ii. International Segment
iii. Pet Segment
iv. North America Foodservice Segment

North America Retail Segment

The major product categories in North America Foodservice operating segment are ready-to-
eat cereals, snacks, refrigerated yogurt, frozen meals, unbaked and fully baked frozen dough
products, baking mixes, and bakery flour.

International Segment
International operating segment reflects retail and foodservice businesses outside of the United
States and Canada.

Pet Segment
Pet operating segment includes pet food products sold primarily in the United States and
Canada in national pet superstore chains, e-commerce retailers, grocery stores, regional pet
store chains, mass merchandisers, and veterinary clinics and hospitals

North America Foodservice Segment

Major product categories in our North America Foodservice operating segment are ready-to-
eat cereals, snacks, refrigerated yogurt, frozen meals, unbaked and fully baked frozen dough
products, baking mixes, and bakery flour.

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5.REVENUE CLASSIFICATION FOR PAST 3
YEAR:
The company main revenue is the north
American retail market where they
introduce many of there product in the retail
market which gives them with major
revenue.
In the year 2021 the segments are having a
growth rate of compared to 2020
North American retail:2%
Convenience stores & Foodservice: -4%
International segment: 9%
Pet: 2%
In the year 2022 the segments are having a
growth rate of compared to 2021
North American retail: 5%
Convenience stores & Foodservice: 6%
International segment: -9%
Pet: 30%
For this data we can see that the company is
having a drastic changes in the segment the
companies revenue from international segment
is reduced and eventually the pet segment is seen
with the increase in count.
In the year 2023 the segments are having a
growth rate of compared to 2022
North American retail: 9%
Convenience stores & Foodservice: 19%
International segment: -16%
Pet: 9%
By this I can say that the company is having
there operation in a profitable way and
looking for growth in long term and have a
positive organic growth for forecasting year.

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6. EARNING PER SHARE
Diluted EPS
5.00
As the net profit attributable to the share is
4.00
increasing in a constant rate year by year,
3.00
we can notice in the graph the constant rate
2.00
of rise in the Earning Per Share after
1.00
Dilution which has a constant return.
-
2019 2020 2021 2022 2023

dividend per share

2.2
7.DIVIDEND PER SHARE 2.1
2
The constant increase in the net profit is
1.9
the reason for the constant amount of 2021 2022 2023
dividend paid. 2021 2022 2023
dividend per share 2.02 2.04 2.16

8. EXECUTIVE OVERVIEW:
We work continuously to improve our core products and to create new products
that meet consumers’ evolving needs and preferences. In addition, we build the
equity of our brands over time with strong consumer-directed marketing,
innovative new products, and effective merchandising. We believe our brand-
building approach is the key to winning and sustaining leading share positions in
markets around the globe.
Our fundamental financial goal is to generate competitively differentiated returns
for our shareholders over the long term. We believe achieving that goal requires
us to generate a consistent balance of net sales growth, margin expansion, cash
conversion, and cash return to shareholders over time.
We are executing our Accelerate strategy to drive sustainable, profitable growth
and top-tier shareholder returns over the long term. The strategy focuses on four
pillars to create competitive advantages and win:
Boldly building brands, Relentlessly innovating, Unleashing our scale, and
Being a force for good.

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8. BUSINESS STRATEGY:
Our fundamental financial goal is to generate competitively differentiated returns
for our shareholders over the long term. We believe achieving that goal requires
us to generate a consistent balance of net sales growth, margin expansion, cash
conversion, and cash return to shareholders over time. Our long-term growth
objectives are to deliver the following performance on average over time:
• 2 to 3 percent annual growth in organic net sales;
• mid-single-digit annual growth in adjusted operating profit;
• mid- to high-single-digit annual growth in adjusted diluted earnings per share
(EPS);
• free cash flow conversion of at least 95 percent of adjusted net earnings after
tax
• cash return to shareholders of 80 to 90 percent of free cash flow, including an
attractive dividend yield.

9. BUSINESS RISK:
Business and Industry Risks
• The categories in which we participate are very competitive, and if we are
not able to compete effectively, our results of operations could be adversely
affected.
• We may be unable to maintain our profit margins in the face of a
consolidating retail environment.
• Price changes for the commodities we depend on for raw materials,
packaging, and energy may adversely affect our profitability.
• unable to anticipate changes in consumer preferences and trends, which
may result in decreased demand for our products.
Operating Risks
• If we are not efficient in our production, our profitability could suffer as a
result of the highly competitive environment in which we operate.
• Disruption of our supply chain could adversely affect our business.
• Business operations could be disrupted if our information technology
systems fail to perform adequately or are breached.
• Failure to successfully integrate acquisitions into our existing operations
could adversely affect our financial results.

8
Legal and Regulatory Risk
• Products become adulterated, misbranded, or mislabeled, we might need
to recall those items and may experience product liability claims if
consumers or their pets are injured.
• New regulations or regulatory-based claims could adversely affect our
business.
• Climate change and other sustainability matters could adversely affect our
business.

Financial and Economic Risk

• Volatility in the market value of derivatives we use to manage exposures
to fluctuations in commodity prices may cause volatility in our gross
margins and net earnings.
• Economic downturns could limit consumer demand for our products.

10. COMPETITIVE ADVANTAGE:

Strong Brand Portfolio:
General Mills boasts a diverse range of well-known and trusted brands. Some of
its iconic offerings include Cheerios, Pillsbury, Betty Crocker, Yoplait, and
Häagen-Dazs1. These established brands contribute to the company’s
competitive edge by fostering consumer loyalty and recognition.
Accelerate Strategy:
General Mills has been executing its Accelerate strategy, which focuses on four
key pillars:
• Boldly Building Brands: The company prioritizes core markets, global
platforms, and local gem brands with strong growth prospects.
• Relentless Innovation: General Mills continually seeks innovative
solutions to meet evolving consumer needs.
• Unleashing Scale: Leveraging its size and reach, the company optimizes
operations and distribution.
Revenue Streams:
General Mills generates revenue through various channels:
• Sales of Branded Consumer Packaged Goods (CPG): Their products
reach consumers through retail stores.

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 • International Operations: Expanding globally allows them to tap into
diverse markets.
• Foodservice and Commercial Sales: Supplying food to restaurants,
schools, and institutions.
• Licensing and Joint Ventures: Collaborations and licensing agreements.
• E-commerce and Direct-to-Consumer Sales: Capitalizing on online
platforms.

This Photo by Unknown Author is licensed

11. SWOT ANALYSIS:

STRENGHTS WEAKNESS

-Strong brand portfolio, rising demand -Potential areas for improvement.

for cereals, and penetration with smaller
retailer customers in the US.

OPPURTUNITIES THREATS
- Diversifying product lines (e.g., - Market Competiton and external
plant-based, organic, functional factor.
foods).

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12. FINANCIAL ANALYSIS:
• Revenue growth: Revenue
The revenue has been constantly 20,500.00
increasing, with 4.77% growth 20,000.00

USD in Millions
rates of from 2021 to 2022 and 19,500.00
19,000.00
5.80% from 2022 to 2023. 18,500.00
18,000.00
17,500.00
This indicates a positive trend in
17,000.00
revenue generation over upcoming 2021 2022 2023
year. Revenue 18,127.00 18,992.80 20,094.20

Gross profit • Gross Profit Margin:

6,600.00
USD in Millions

6,500.00 The gross margin in 2023 is 32%,

6,400.00
6,300.00
indicating the company's ability to
6,200.00 maintain profitability after accounting
6,100.00
2021 2022 2023 for the cost of goods sold.
Gross profit 6,275.60 6,425.40 6,484.80

• Operating Profit Margin:

operating profit
3600
USD in Millions

3400
The operating profit margin of 17% in 3200
2023 reflects that the company is 3000
efficient enough in managing 2800
operating expenses relative to 2600
2021 2022 2023
revenue. operating profit 2972.1 3499 3372.8

net profit • Net Profit Margin:

2,700.00 The operating profit margin of 13%
USD in MIllions

2,600.00 in 2023.
2,500.00
2,400.00 The net income has also shown
2,300.00 growth over the years, from $2378
2,200.00
2021 2022 2023
million in 2021 to $2601 million
net profit 2,378.20 2,441.40 2,601.20 2023.
Which shows that the company’s net profit id increasing year by year but at a
minimal rate hence there is comparatively less risk.

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Return on capital employed ROCE
(ROCE): 33%
The table is showing a drastic downward 32%
shift from 2022 to 2023 which means the 32%
company is efficiently using its capital 31%
resources to generate returns hence it may 31%
2021 2022 2023
create a negative sign. ROCE 32% 32% 31%

ROE Return on Equity (ROE):

27%
The company sees major variation
26%
25%
from the year 2021 to 2023, compared
24% to 2022 in 2023 the return is slightly
23% high which shows that the company is
22%
2021 2022 2023
taking steps to efficient use of
ROE 26% 24% 24%
shareholders investment to generate
revenue.

13. VALUATION’S:

Terminal Value and Growth Rate:

The terminal value, calculated using the Gordon Growth method, stands at
$76,295 million, with a long-term growth rate assumption of 2.0% (according to
American growth rate). This reflects the estimated value of the company's cash
flows beyond the explicit forecast period.

Enterprise Value:
The discounted cash flow (DCF) analysis yields an enterprise value of $89,122
million for operating business, representing the present value of expected future
cash flows.
Non-Operating Assets:
Non-operating assets, totalling $1,184 million, are added to the enterprise value
to account for assets that are not directly related to the core operating business.

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 Terminal value Gordon
Total Value of the Firm: growth
Long Term Growth Rate 2.0%
The total value of the firm, including
Terminal Value 93,514
both the operating business and non- Present Value of TV 76,295
operating assets, is estimated at $ DCF Value of Firm / Operating Business Enterprise Value 87,938
89,122 million. Add: Non Operating Assets 1,184
Debt and Cash: Total Value of Firm 89,122
Less: Gross Debt & Debt Equivalents 12,651
Gross debt and debt equivalents of Add: Cash 594
$12,651 million are subtracted from Less: Non Controling Interest 253
the total firm value, while cash DCF value of Common Equity 76,812
holdings of $ 594 million are added No. of shares o/s 587
back. This adjustment accounts for DCF value per share 131
the company's financial obligations
and available cash resources.
Minority Interest:
The value of the non-controlling Terminal Value Exit Multiple Method
interest that the company has in the LTM EV/EBITDA 9.4
books of account is $253 million. Terminal Year EBITDA 4,981
Terminal Value 47,042
Equity Value:
Present Value of TV 38,380
The DCF analysis results in a DCF Value of Firm / Operating Business Enterprise Value 50,023
common equity value of $ 76,812 Add: Non Operating Assets 1,184
million, representing the estimated Total Value of Firm 51,206
value attributable to common Less: Gross Debt & Debt Equivalents 12,651
shareholders. Add: Cash 594
Less: Non Controling Interest 253
Share Count: DCF value of Common Equity 38,896
No. of shares o/s-Diluted 587
With a total of 587 million shares
DCF value per share 66
outstanding, the DCF-derived value
per share for GIS is $ 131.

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 General Mills Inc WACC Calculation
(in USD million except per Share Data) ➢ WACC Sensitivity:
The sensitivity analysis below
Bottoms Up explores various WACC scenarios
1 beta
Cost of equity
ranging from 4% to 6%. This analysis
Particulars Notes Value allows for a comprehensive
Risk-free rate (%) 4.06% assessment of how changes in the
Beta 0.36 discount rate impact the valuation of
Equity market risk premium (%) 4.6% the company.
Cost of equity capital (%) 5.7%
➢ LTGR Scenarios:
Cost of debt Multiple LTGR scenarios are
Particulars Notes Value considered, ranging from 1% to 3%.
Debt borrowing rate (%) 5.5% These scenarios reflect different long-
Expected income tax rate (%) 27.0% term growth expectations for the
After-tax cost of debt (%) 4.0% company's cash flows.

Weighted average cost of capital

➢Valuation Flexibility:
Particulars Weight Particulars Cost Value By considering a wide range of
Debt (%) 23.2% Cost of debt (%) 4.0% 0.9% combinations of WACC and LTGR,
Equity (%) 76.8% Cost of equity (%) 5.7% 4.4% this analysis offers insights into the
WACC 5.3% flexibility of the company's valuation
under different financial
WACC
131 4.0% 4.25% 4.50% 4.75% 5.00% 5.25% 5.50% 5.75% 6.00%
assumptions.
1.00% 151.6 138.7 127.6 117.9 109.5 102.1 95.5 89.6 84.3 ➢ Risk Assessment:
1.25% 165.7 150.5 137.6 126.6 117.0 108.7 101.3 94.7 88.9
1.50% 182.6 164.5 149.4 136.6 125.6 116.2 107.8 100.5 94.0 The analysis underscores that
1.75% 203.2 181.2 163.2 148.2 135.6 124.7 115.3 107.0 99.7
fluctuations in WACC (Weighted
LTGR

2.00% 229.0 201.7 179.9 162.0 147.1 134.5 123.7 114.4 106.2
2.25% 262.1 227.3 200.2 178.5 160.8 146.0 133.5 122.8 113.5 Average Cost of Capital) and LTGR
2.50% 306.3 260.2 225.6 198.7 177.2 159.6 144.9 132.5 121.9
2.75% 368.2 304.1 258.3 224.0 197.3 175.9 158.4 143.9 131.5
(Long-Term Growth Rate) can have
3.00% 461.0 365.5 301.9 256.4 222.3 195.8 174.6 157.2 142.8 a notable impact on the projected
share value. Elevated WACC or
WACC
66 4.0% 4.25% 4.50% 4.75% 5.00% 5.25% 5.50% 5.75% 6.00%
diminished LTGR may heighten the
7.0x 52.3 51.8 51.2 50.6 50.0 49.5 48.9 48.4 47.9 perceived investment risk.
7.5x 56.0 55.4 54.7 54.1 53.5 53.0 52.4 51.8 51.2
8.0x 59.6 59.0 58.3 57.7 57.0 56.4 55.8 55.2 54.6 ➢ Investment Decision:
Exit Multiple

8.5x 63.2 62.6 61.9 61.2 60.6 59.9 59.2 58.6 58.0
9.0x 66.9 66.2 65.4 64.7 64.1 63.4 62.7 62.0 61.4 It is advisable for investors to
9.5x 70.5 69.8 69.0 68.3 67.6 66.8 66.1 65.4 64.7
10.0x 74.1 73.4 72.6 71.8 71.1 70.3 69.6 68.8 68.1
thoroughly evaluate their risk
10.5x 77.8 77.0 76.2 75.4 74.6 73.8 73.0 72.2 71.5 tolerance and market outlooks while
11.0x 81.4 80.6 79.7 78.9 78.1 77.2 76.4 75.6 74.9
considering this sensitivity analysis

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14. TRADING COMPRABLES:
Comparable company analysis is that similar companies provide an informative
point of reference that can be used to derive an estimated valuation of the target
company.
Some of the peer companies of General Mills Inc are, Kraft Heinz, Kellenova,
Conagra Brands, Mondelez, Hershey, Campbell Soup.

Metrics & price:

❖ EV/EBITDA- The target company’s
valuation range of per share value is between
$47.2 - $62.6.
❖ EV/EBIT- The target company’s valuation
Valuation Range
range of per share value is between $ 51.5- METRI CS
Lower Higher
$67.8. EV/EBI TDA 47.2 62.6
❖ EV/Sales- The target company’s valuation EV/EBI T 51.5 67.8
range of per share value is between $46.3 - EV/SALES 46.3 61.4
$61.4. P/E 59.6 72.8
❖ P/E- The target company’s valuation
range of per share value is between $59.6 -
$72.8
Investors should carefully evaluate these ranges and additional qualitative factors when
making investment decisions, keeping in mind the potential impact of market dynamics and
risk factors on the stock's price.

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 15. APPENDIX:

➢ INCOME STATEMENT:

(in USD millions)

Income Statement 12 months 12 months 12 months 12 months 12 months 6 months 6 months 12 months 12 months 12 months 12 months 12 months
May. 27, 2019 May. 27, 2020 May. 27, 2021 May. 27, 2022 May. 27, 2023 Nov.27,2023 May. 27, 2024 May. 27, 2024 May. 27,2025 May. 27, 2026 May. 27, 2027 May. 27, 2028

Net Operating Revenues - Reported 16,865.20 17,626.60 18,127.00 18,992.80 20,094.20 10,044.10 10273 20,317.02 21,415.32 22,582.28 23,822.92 25,142.66
Other Items 342.1 0 0 0 0 0 0 0 0 0 0 0
Net Operating Revenues - Normalised 17,207.30 17,626.60 18,127.00 18,992.80 20,094.20 10,044.10 10,272.92 20,317.02 21,415.32 22,582.28 23,822.92 25,142.66

Cost of Goods & Services Sold - Reported 11108.4 11496.7 11678.7 12590.6 13548.4 6507.7
Impact of Special Items 285 50.2 172.7 -23.2 61 0
Cost of Goods and Services Sold - Normalised 11393.4 11546.9 11851.4 12567.4 13609.4 6507.7 6,600.27 13,107.97 14,176.18 14,948.67 15,769.93 16,643.55
Cost of Goods and Services Sold (Other than Dep.) 10983.4 11195.6 11551 12123.3 13193.9 6246.2 6,388.50 12,634.70 13,729.75 14,477.91 15,273.31 16,119.42
Depreciation 410 351.3 300.4 444.1 415.5 261.5 211.8 473.3 446.43 470.75 496.62 524.13

Gross Profit - Normalised 5,813.90 6,079.70 6,275.60 6,425.40 6,484.80 3,536.40 3,672.66 7,209.06 7,239.14 7,633.61 8,052.99 8,499.11

Selling, General and Administrative Expense - Reported 2935.8 3151.6 3079.6 3147 3500.4 1669.8
Impact of Special Items 0 0 0 0 0 0
Selling, General and Administrative Expense - Normalised 2935.8 3151.6 3079.6 3147 3500.4 1669.8 1,783.75 3453.5 3,495.65 3,665.69 3,853.15 4,057.13
Selling, General & Admin Exp. (Excluding Amortisation Exp) 2,725.70 2,908.20 2,778.70 3,020.80 3,369.30 1,665.50 1,703.44 3368.9 3,441.05 3,628.56 3,827.91 4,039.97
Corporate Dep. - - - - - -
Amortisation 210.1 243.4 300.9 126.2 131.1 4.3 80.3 84.6 54.6 37.1 25.2 17.2

Other Cost and Expense, Operating - Reported (Divestitures

loss) 30 0 53.5 -194.1 -444.6 0
Impact of Special Items 275.1 24.4 170.4 -26.5 56.2 124.8
Other Cost and Expense, Operating - Normalised 305.1 24.4 223.9 -220.6 -388.4 124.8 127.64 252.4 2.24 2.36 2.49 2.63

Operating Income - Normalised 2,573.0 2,903.7 2,972.1 3,499.0 3,372.8 1,741.8 1,761.27 3503.1 3,741.25 3,965.57 4,197.35 4,439.35

Benefits plan non -service income 87.9 112.8 132.9 113.4 88.4 37.1
Impact of Special Items 285.00 154.30 181 -285.7 84.9 146.7
other Income 372.90 267.1 313.9 -172.3 173.3 183.8 0 183.8 0 0 0 0

Interest ,net 521.8 466.5 420.3 379.6 382.1 234.8 348.9 583.7 301.7 279.7 233.3 200.8

EBT- Normalised 2,424.10 2,704.30 2,865.70 2,947.10 3,164.00 1,690.80 1,412.40 3,103.20 3,439.51 3,685.90 3,964.02 4,238.54

Income Tax Expense-Reported 367.8 480.5 629.1 586.3 612.2 309.2

Impact of Special Items 159.8 78 -23.9 31.1 31.9 45
Income Tax Expense-Normalised 527.6 558.5 605.2 617.4 644.1 354.2 295.88 650.08 773.08 884.04 1,010.51 1,144.41

After tax Earnings from joint ventures 72 91.1 117.7 111.7 81.3 47.7 0 47.7 0

Net Income-Normalised 1,968.50 2,236.90 2,378.20 2,441.40 2,601.20 1,384.30 1,116.52 2,500.82 2,666.43 2,801.87 2,953.51 3,094.14

Share of noncontrolling interests-Reported 33.5 29.6 6.2 27.7 15.7 13.6

Impact of Special Items 0 0 0 0 0 0
Redeemable And noncontrolling interests-Normalised 33.5 29.6 6.2 27.7 15.7 13.6 10.97 24.57 26.79 28.15 29.68 31.09

Net Income attributable to shareholders of General Mills 1,935.00 2,207.30 2,372.00 2,413.70 2,585.50 1,370.70 1,105.55 2,476.25 2,639.64 2,773.71 2,923.83 3,063.05

Average Shares Outstanding( Assuming Dilution) 605.4 613.3 619.1 612.6 601.2 587.4 587.4 587.4 587.4 587.4 587.4 587.4

Diluted EPS 3.20 3.60 3.83 3.94 4.30 2.33 1.88 4.22 4.49 4.72 4.98 5.21

Average Share Outstanding 600.4 608.1 614.1 607.5 594.8 583.2 583.2 583.2 583.2 583.2 583.2 583.2
Basic EPS 3.22 3.63 3.86 3.97 4.35 2.35 1.90 4.25 4.53 4.76 5.01 5.25

Source 10 k Report of 2020 PG 57,96,19,106

10 k Report of 2022 PG10
57,96,19,106
k Report of 2023 & 10 q report of Q2 nov 23 Calculation

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 ➢ BALANCE SHEET:

(in USD millions)

Balance sheet as of : 12 months 12 months 12 months 12 months 12 months 6 months 6 months 12 months 12 months 12 months 12 months
May. 27, 2019 May. 27, 2020 May. 27, 2021 May. 27, 2022 May.27,2023 Nov. 27, 2023 May. 27, 2024 May. 27,2025 May. 27, 2026 May. 27, 2027 May. 27, 2028
ASSETS
Current assets
Cash and cash equivalents 450 1677.8 1505.2 569.4 585.5 593.8 1,709.08 2,408.84 1,998.54 2,142.29 2,116.83
Receivables 1679.7 1615.1 1638.5 1692.1 1683.2 1758.8 1,838.7 1,938.0 2,043.7 2,155.9 2,275.4
Inventories 1559.3 1426.3 1820.5 1867.3 2172 2166 1884.1 2047.4 2159.0 2277.6 2403.8
Prepaid expenses and other current assets 497.5 402.1 790.3 802.1 735.7 527 707.7 746.0 786.6 829.8 875.8
Asset held for sale 158.9
Total current assets 4186.5 5121.3 5754.5 5089.8 5176.4 5045.6 6139.6 7140.3 6987.8 7405.7 7671.8

Non Current Asset

Land, buildings, and equipment 3787.2 3580.6 3606.8 3393.8 3636.2 3598.9 4180.1 4182.9 4410.8 4653.1 4910.9
Goodwill 13995.8 13923.2 14062.4 14378.5 14511.2 14441.8 14441.8 14441.8 14441.8 14441.8 14441.8
Other intangible assets 7166.8 7095.8 7150.6 6999.9 6967.6 6963.3 6883.0 6828.4 6791.3 6766.0 6748.9
Other assets 974.9 1085.8 1267.6 1228.1 1160.3 1183.8 1183.8 1183.8 1183.8 1183.8 1183.8

Total asset 30111.2 30806.7 31841.9 31090.1 31451.7 31233.4 32828.3 33777.1 33815.5 34450.4 34957.1

LIABILITIES AND EQUITY

Current liabilities:
Accounts payable 2854.1 3247.7 3653.5 3982.3 4194.2 3824.4 3,798.6 4,128.8 4,354.7 4,594.9 4,850.2
Current portion of long-term debt 1396.5 2331.5 2463.8 1674.2 1709.1 1321 800.5 1680.1 1179.3 1400 0
Notes payable 1468.7 279 361.3 811.4 31.7 799.2
Other current liabilities 1367.8 1633.3 1787.2 1552 1600.7 1957.6 1957.6 1957.6 1957.6 1957.6 1957.6

Total current liabilities 7087.1 7491.5 8265.8 8019.9 7535.7 7902.2 6,556.7 7,766.5 7,491.6 7,952.5 6,807.8

Non Current Liabilities :

Long-term debt 11624.8 10929 9786.9 9134.8 9965.1 10530.5 10141.1 8461.0 7281.7 5881.7 5881.7
Deferred income taxes 2031 1947.1 2118.4 2218.3 2110.9 2026.6 2026.6 2026.6 2026.6 2026.6 2026.6
Other liabilities 1448.9 1545 1292.7 929.1 1140 1142.2 4635.1 4711.6 4792.9 4879.3 4971.3

Total liabilities 22191.8 21912.6 21463.8 20302.1 20751.7 21601.5 23359.5 22965.7 21592.8 20740.1 19687.4

Redeemable interest 551.7 544.6 604.9 - - - - - - - -

Stockholders’ equity:
Common stock, 754.6 shares issued, $0.10 par value 75.5 75.5 75.5 75.5 75.5 75.5 75.5 75.5 75.5 75.5 75.5
Additional paid-in capital 1386.7 1348.6 1365.5 1182.9 1222.4 1201.8 1,261.48 1,365.74 1,475.68 1,591.67 1,714.07
Retained earnings 14996.7 15982.1 17069.8 18532.6 19838.6 20080.9 19,847.18 21,058.74 22,331.85 23,673.86 25,079.77
Common stock in treasury, at cost, shares of 144.8 and 152.7 -6779 -6433.3 -6611.2 -7278.1 -8410 -9677.4 -9677.4 -9677.4 -9677.4 -9677.4 -9677.4
Accumulated other comprehensive loss -2625.4 -2914.4 -2429.2 -1970.5 -2276.9 -2302 -2302 -2302 -2302 -2302 -2302
Total stockholders’ equity 7054.5 8058.5 9470.4 10542.4 10449.6 9378.8 9204.8 10520.6 11903.6 13361.6 14889.9
Noncontrolling interests 313.2 291 302.8 245.6 250.4 253.1 264.07 290.86 319.01 348.69 379.78

Total equity 7367.7 8349.5 9773.2 10788 10700 9631.9 9468.82 10811.45 12222.65 13710.31 15269.72

Total liabilities and equity 30111.2 30806.7 31841.9 31090.1 31451.7 31233.4 32,828.29 33,777.14 33,815.48 34,450.41 34,957.13
Check - - - - - - - - - - -
Source 10K may 2020 Pg:58 10K may 2022 Pg:45 10K May 23 10Q Nov23 Pg11 Calculation

17
 ➢ CASH FLOW STATEMENT:

Cash Flow Statement 6 months 12 months 12 months 12 months 12 months

May. 27, 2024 May. 27,2025 May. 27, 2026 May. 27, 2027 May. 27, 2028

Cash From Operating Activities

Net Income 2,500.82 2666.43 2801.87 2953.51 3094.14

Depreciation and amortization 292.1 501.03 507.88 521.86 541.29
Share-based compensation expense 59.68 104.26 109.94 115.98 122.41
Change in assets and liabilities:
Trade accounts receivable -79.86 -99.39 -105.61 -112.28 -119.43
Inventories 281.86 -163.30 -111.57 -118.61 -126.18
Prepaid expenses and other current assets 180.71 38.26 40.65 43.22 45.97
Accounts payable and accrued expenses -25.83 330.22 225.93 240.13 255.38

Net Cash Provided by Operating Activities 3,209.46 3,377.51 3,469.09 3,643.81 3,813.58

Cash From Investing Activities

Capital Expenditure -723.27 -449.18 -698.69 -738.94 -781.90

Net Cash Used for Investing Activities -723.27 -449.18 -698.69 -738.94 -781.90

Cash From Financing Activities

Cash dividends paid -1339.3 -1,428.07 -1,500.61 -1,581.82 -1,657.14
Cash before Raising (Repayment) of Debt 1,146.91 1,500.26 1,269.80 1,323.05 1,374.54

Debt Raised 1677.47 0 0 0 0

Debt Repaid -1709.1 -800.5 -1680.1 -1179.3 -1400

Net Cash Provided by/(Used for) Financing Activities -1370.9 -2228.6 -3180.7 -2761.1 -3057.1

Net Increase/(Decrease) in Cash and Cash Equivalents 1,115.28 699.76 -410.30 143.75 -25.46
Cash and Cash Equivalents, Beginning of Year 593.8 1,709.08 2,408.84 1,998.54 2,142.29
Cash and Cash Equivalents, End of Period 1,709.08 2,408.84 1,998.54 2,142.29 2,116.83

Source Calculation

18
 ➢ DISCOUNTING CASH FLOW:

General Mills Inc DCF Valuation

(in USD million except per Share Data)
Valuation Date 27.Dec,2023
Latest Filing 27.Nov,2023
Choose Discounting Mid year 1
discounting

6 months 12 months 12 months 12 months 12 months

Date of cash flows May. 27, 2024 May. 27,2025 May. 27, 2026 May. 27, 2027 May. 27, 2028

EBIT 1,761 3,741 3,966 4,197 4,439

Tax Rate 20.9% 22.5% 24.0% 25.5% 27.0%
NOPAT 1,392 2,900 3,014 3,127 3,241
Add: Depreciation and amortisation 292 501 508 522 541
Add/Less: (Increase)/ Decrease in net working capital 357 106 49 52 56
Less: Capital expenditure (723) (449) (699) (739) (782)
Debt free cash flow (Free Cash Flows to Firm) 1,318 3,058 2,873 2,963 3,056
5.33% Discount rate (%)
Full Period or Partial Period 0.83 1.00 1.00 1.00 1.00
Discounting Period-Year End 0.42 1.42 2.42 3.42 4.42
Discounting Period-Mid Year 0.21 0.92 1.92 2.92 3.92
Present value factor- Year end discounting 0.98 0.93 0.88 0.84 0.79
Present value factor- Mid year discounting 0.99 0.95 0.91 0.86 0.82
Present value debt free cash flow 1,087 2,916 2,601 2,546 2,493

Present value for explicit period 11,642 explicit and implicit

93,514.41

93,514.41
Terminal value Gordon WACC
growth
Long Term Growth Rate 2.0%
131 4.0% 4.25% 4.50% 4.75% 5.00% 5.25% 5.50% 5.75% 6.00%
Terminal Value 93,514
Present Value of TV 76,295 1.00% 151.6 138.7 127.6 117.9 109.5 102.1 95.5 89.6 84.3
DCF Value of Firm / Operating Business Enterprise Value 87,938 1.25% 165.7 150.5 137.6 126.6 117.0 108.7 101.3 94.7 88.9
Add: Non Operating Assets 1,184 1.50% 182.6 164.5 149.4 136.6 125.6 116.2 107.8 100.5 94.0
Total Value of Firm 89,122 1.75% 203.2 181.2 163.2 148.2 135.6 124.7 115.3 107.0 99.7
Less: Gross Debt & Debt Equiv alents 12,651
LTGR

2.00% 229.0 201.7 179.9 162.0 147.1 134.5 123.7 114.4 106.2
Add: Cash 594
Less: Non Controling Interest 253 2.25% 262.1 227.3 200.2 178.5 160.8 146.0 133.5 122.8 113.5
DCF value of Common Equity 76,812 2.50% 306.3 260.2 225.6 198.7 177.2 159.6 144.9 132.5 121.9
No. of shares o/s 587 2.75% 368.2 304.1 258.3 224.0 197.3 175.9 158.4 143.9 131.5
DCF value per share 131 3.00% 461.0 365.5 301.9 256.4 222.3 195.8 174.6 157.2 142.8

Terminal Value Exit Multiple Method WACC

LTM EV/EBITDA 9.4
66 4.0% 4.25% 4.50% 4.75% 5.00% 5.25% 5.50% 5.75% 6.00%
Terminal Year EBITDA 4,981
Terminal Value 47,042 7.0x 52.3 51.8 51.2 50.6 50.0 49.5 48.9 48.4 47.9
Present Value of TV 38,380 7.5x 56.0 55.4 54.7 54.1 53.5 53.0 52.4 51.8 51.2
DCF Value of Firm / Operating Business Enterprise Value 50,023 8.0x 59.6 59.0 58.3 57.7 57.0 56.4 55.8 55.2 54.6
Exit Multiple

Add: Non Operating Assets 1,184

8.5x 63.2 62.6 61.9 61.2 60.6 59.9 59.2 58.6 58.0
Total Value of Firm 51,206
Less: Gross Debt & Debt Equiv alents 12,651 9.0x 66.9 66.2 65.4 64.7 64.1 63.4 62.7 62.0 61.4
Add: Cash 594 9.5x 70.5 69.8 69.0 68.3 67.6 66.8 66.1 65.4 64.7
Less: Non Controling Interest 253 10.0x 74.1 73.4 72.6 71.8 71.1 70.3 69.6 68.8 68.1
DCF value of Common Equity 38,896
10.5x 77.8 77.0 76.2 75.4 74.6 73.8 73.0 72.2 71.5
No. of shares o/s-Diluted 587
DCF value per share 66 11.0x 81.4 80.6 79.7 78.9 78.1 77.2 76.4 75.6 74.9

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 ➢ TRADING COMPARABLE ANALYSIS:

Name of Target Company General Mills Inc Median 1

Industry Multiple Range Implied EV-GeneralMills Debt Cash & Cash Implied Equity-GeneralMills Diluted Implied Per Share Value-GeneralMills
Metrics Lower Higher Lower Higher Minority Interest Total Debt Equivalent Eq Investments Lower Higher Shares O/S Lower Higher
10% 10%
LTM EV/EBITDA 4,004 10.08x 12.32x 40,347 49,313 253 12650.7 656.6 593.8 0 27,381 36,347 592 46.2 61.4
FY1 EV/EBITDA 4,153 9.97x 12.19x 41,418 50,622 253 12650.7 656.6 593.8 0 28,451 37,655 592 48.0 63.6
FY2 EV/EBITDA 4,266 9.59x 11.72x 40,921 50,015 253 12650.7 656.6 593.8 0 27,954 37,048 592 47.2 62.6

General Mills Valuation Range as per Trading Comps 47.2 62.6

Industry Multiple Range Implied EV-GeneralMills Debt Cash & Cash Implied Equity-GeneralMills Diluted Implied Per Share Value-GeneralMills
Metrics Lower Higher Lower Higher Minority Interest Total Debt Equivalent Eq Investments Lower Higher Shares O/S Lower Higher
10% 10%
LTM EV/EBIT 3,457 12.6x 15.4x 43,475 53,136 253 12650.7 656.6 593.8 0 30,509 40,170 592 51.5 67.8
FY1 EV/EBIT 3,586 12.2x 14.9x 43,819 53,556 253 12650.7 656.6 593.8 0 30,852 40,590 592 52.1 68.5
FY2 EV/EBIT 3,654 11.5x 14.0x 41,957 51,281 253 12650.7 656.6 593.8 0 28,991 38,315 592 49.0 64.7

General Mills Valuation Range as per Trading Comps 51.5 67.8

Industry Multiple Range Implied EV-GeneralMills Debt Cash & Cash Implied Equity-GeneralMills Diluted Implied Per Share Value-GeneralMills
Metrics Lower Higher Lower Higher Minority Interest Total Debt Equivalent Eq Investments Lower Higher Shares O/S Lower Higher
10% 10%
LTM EV/Sales 20,094 2.0x 2.4x 39,890.32 48,754.83 253 12650.7 656.6 593.8 0 26,924 35,788 592 45.5 60.4
FY1 EV/Sales 20,021 2.0x 2.5x 40,761.59 49,819.72 253 12650.7 656.6 593.8 0 27,795 36,853 592 46.9 62.2
FY2 EV/Sales 20,319 2.0x 2.4x 40,374.73 49,346.89 253 12650.7 656.6 593.8 0 27,408 36,380 592 46.3 61.4

General Mills Valuation Range as per Trading Comps 46.3 61.4

Industry Multiple Range Implied Per Share Value-GeneralMills

Metrics Lower Higher Lower Higher
10% 10%
FY1 P/E 4.18 14.47x 17.7x 60.5 73.9
FY2 P/E 4.48 13.1x 16.0x 58.7 71.7

General Mills Valuation Range as per Trading Comps 59.6 72.8

20