Good morning ladies and gentlemen, it is great to be here today, and it is my pleasure to see many faces here on a momentous occasion. I am glad to acknowledge people from different countries, organizations, and partners. After all, the launching of our new segment will not be meaningful without our partners and stakeholders in attendance. As the sales representative at General Mill, Cheerios, I, therefore, thank you for setting aside your other important issues to be with us here today to contribute and witness the inauguration of our new segments. As we meet here today at this hall full of sad stories with happy endings, it’s time we celebrate success and moments which has shaped our lives and our company by deepening our knowledge on business issues, expanding our horizons and also allowing us to network and create connections with others, who have allowed us to challenge ourselves in terms beliefs and also occasionally supported us as we struggle with anxiety and deep questions on how we can move forward with innovations.
I am saying that this hall is full of sad, painful, and happy stories because it is at this hall where our company usually makes tough decisions regarding investments. As we all know business is always filled with ups and downs and this hall is where we have been sharing with our shareholders the losses we have incurred every financial quarter and also at this hall is where we share happiness while tossing champagne glasses when the company rises into an occasion by making the much-desired profit. With our achievements in various fields of business, it’s now time for us to stand tall and commit ourselves to different sectors.
During my time at the university, we were challenged by our tutors to translate what we’ve learned in the classroom, in studios, laboratories, and all around the campus to change the world for the better. I am now glad to be part of General Mills, a company with a great team that believes in innovation and allows its employees to share their views and also an opportunity to develop their interests, thus promoting innovation and for sure changing the world for the better as my tutors urged us. We were subjected to many tests during our last days in college, including developing an individual project. This made our lives extremely stressful but little did we know that the tests and projects were preparing us for the competitive nature of the business environment, which required commitment and dedication, which sometimes turn to be chaotic and stressful.
The innovation and expansion of this company have been challenging and stressful, just like our final year exams but because of the supportive nature of its stakeholders am glad to say we have been able to sail through. Many of our stakeholders have been exposed to stress this year due to various occurrences, such as the global pandemic. These new environmental changes have prompted discussion on how the company will cope in the coming years. Indeed, it was a lesson learned for us, and we will continue engaging various stakeholders to ensure that in such events, our stakeholders, for instance, our clients, will receive the best services with less stress.
Allow me to give a brief history of the company and how our journey has been. Cheerios was founded in 1941 as Cheerio-Oats, and the name was changed to Cheerios in 1945. The name change occurred due to our dispute with our competitors who had the same brand with a similar name. Today, our company boasts various products but achieving this was not easy for our predecessors. To obtain the current brand lines, the company had conducted a lot of research, and over 500 formulas were tried during the initial testing process. About 10 shapes and sizes were also passed through the trials to obtain the ideal combinations that we use today. Our predecessors had an idea of producing our products in various shapes, including the stars, spheres, dumbbell shapes, and square shapes, but the “o” was picked for the products because of the ease of packaging. In 1976 we introduced Cinnamon Nut Cheerios to the market, but its production was halted a year after its introduction.
In 1979 after halting the production of the Cinnamon Nut, the company resorted to the production of Honey Nut Cheerios. It is still the best-selling variant of our original brands. Honey Nuts continue to be the best selling with about 1.8 million sales each year. Our campaign strategies have always been targeting kids. During the 1960s, our campaigns incorporated cartoons and other comic strips. These campaign strategies helped the company convince kids that cheerios were fun eating when watching their favorite cartoon shows and comic strips. For instance, our campaign Buzz the Bee was vital in convincing kids about the advantages of the Honey Nut Cheerios. Ladies and gentlemen, I am proud to say that Cheerios was the first company to partner with multinationals like Disney and other larger brands to cross-sell our products to them and sell their products with our brands. Some brands such as The Lone Ranger and other well-known children’s toys in the cheerio boxes
But I can’t end giving the brief information about the company without touching our current economic status and without giving a brief about our corporate social responsibility to the society. I will start by reporting the company’s economic status in 2020. Our total net sale for 2020 rose to 17.6 billion dollars and our operating profit increased by 17 percent, equivalent to 3 billion dollars. Our net cash provided by our operations accumulated to 3.7 billion dollars which represented a 166 percent conversion rate. This cash generation was then used to support our capital investments which accumulated 461 million dollars. Our company’s resulting free cash flow accumulated to 3.2 billion dollars at a conversion rate of 143percent. Through the profit that we made, we were able to return cash to our shareholders through dividends which accumulated to 1.2 billion dollars and reduced the company’s net debt by 1 billion dollars. As I said earlier, achieving all these sales sometimes is not as easy as many may think because business is always faced with many ups and downs. In 2020 despite all the massive sales we achieved, the company experienced a product recall that resulted in 19 million dollars in our International Green Giant business. We further incurred 18 million dollars in certain compensations.
As an energy reliance company, we are major contributors to global warming and other environmental issues. We can’t run away from being responsible for our contribution to social issues. As a company, we support the goals of the Paris agreements on climate change. In the second year in arrow, our company has taken part in reporting our climate-related financial disclosures, which are in line with the recommendations made by the task force on climate change. Currently, we admit that our emission levels at our production plants are partially aligned with company climate policy. Thus, we have developed plans and strategies to implement our climate policy to ensure compliance.
The company audit team has thoroughly analyzed the various options to eliminate carbon in our operations by 2030. In 2014, the work began to decarbonize the company operations as part of the company operational plans 2014. The company also targets to identify the nature-based projects that aim to remove carbon from the atmosphere that Cheerios plans to invest in to cater to its residual hard to lessen carbon emission and help the company achieve the net-zero status or the carbon-neutral status. As Cheerios, our offsetting carbon strategies will follow the guidelines provided by article 6 of the Paris agreement and align with government priorities and emerging policies and regulations, enabling us to build our commitment to prosperity to create socioeconomic opportunities for the locals. The company has also been working closely with the environmental non-governmental organization by supporting their efforts of ensuring environmental sustainability through sustainable utilization of resources.
The company is embarking on localization to further contribute to corporate social responsibility. The company has largely operated in America, Latin America, Asia, and Europe, which makes localization very important to the way the company operates. Through localization, the company has been able to build the skills of the local people, which has contributed immensely to improving the livelihoods of the locals, which has helped many educate their children and provide for their families. Through localization, the company has been able to roll out programs within the society. The company has prioritized hiring the local people where possible. Also, it has implemented a recruitment process that helps the company ensure that an inclusive pool of candidates is attracted to the company.
We could donate 1.3 million dollars to a No Kid Hungry campaign as part of our social responsibility. These donations are aimed to support kids who face hunger in the wake of the pandemic. Before the pandemic, about 1 out of 7 kids lived in hunger in America, and most of these kids were fully dependent on the free foods they would receive in schools. Currently, the number of kids who live in hunger has risen due to unemployment and new financial stressors due to the pandemic’s impact. Our donation towards the course targeted to support No Kids Hungary’s efforts to feed the kids who face hunger presently and in the future. Most of you in this hall, I know, are not aware of the No Kid Hungry program. This campaign aims to equip the communities with the resources to support kids and their families. This donation we have made should be known as part of our mission to increase access to nutrition. Our contribution towards societal wellness has enabled us to gain our clients’ trust. Also, it has helped us redeem ourselves whenever our reputation is at stake, and it is something we will continue to promote due to its benefits.
As an energy reliance company, we have thought about a range of areas in the energy sector to operate, thus the main goal of today’s assembly. Cheerios needs to diversify its operations and tap new environmentally friendly energy resources available in the energy sector. We are glad to introduce our new source in Cheerios, wind power, which targets to power our various plants. The idea of tapping wind to produce electric energy is not new and has been there for centuries.
The company targets to achieve this by tapping the natural energy from moving wind. The company board has received various reports from the task force, which were tasked with the role of identifying how this idea could be implemented, and we are proud to announce that we will expand our commitment to wind power by signing a virtual 15-year power purchase agreement with the roaring fork wind. This agreement will enable us to obtain 200 megawatts of clean and renewable energy from our ambitious plant, which is soon to be constructed at the Maverick Creek wind project, which is located in central Texas. The Roaring Fork Wind is an ambitious company and has partnered with other companies such as Steelhead Americas in a joint venture specializing in wind power development.
In many years, these companies will be responsible for developing the power plant, our second wind power agreement. This investment is one of the companies’ ambitious steps towards achieving the 28 percent reduction of the General Mills carbon footprint by 2025. This agreement will enable us to meet the climate agreement to which we are a party. With the construction of the new plant, the company will be able to utilize renewable energy equal to 100 percent of the electricity consumed at all our domestic facilities. This construction is also very important to the community around the area as it aims at employing 175 people in the clean energy sector.
Globally, there are many available options for providing green energy; however, cheerios prefer wind power, which has also been considered one of the cleanest means of electricity production and the most sustainable in the long run. For the company, it is the least expensive compared to most production methods that are currently available. The energy source is very important to us since it will protect the company from the fluctuating prices of oil and gas, and a complete future switch to environmentally friendly renewable energy sources.
There are a lot of negative impacts associated with the construction of windmills, which we cannot deny. The construction of windmills most results in the relocation of people from their ancestral homes, which is a hard decision for many as people lose land and livelihoods. It is important to say that we have conducted research and identified the benefits associated with the wind power plant’s construction and assessed the cost associated with the construction of the facility or other known as the cost-benefits analysis, which has led to the decision made of investing in wind power.
The company’s corporation with the United States government regarding the project has been positive. The United States government has assisted our team in acquiring data about the location and has provided us with independent advice, among other issues. Our honorable guest, our company, is committed to ensuring that the new energy source will be developed, considering sustainable wind power development within the frameworks of the United States government and other international bodies. The company will send a team of engineers to the site who will work closely with the government through the state department of energy, who will support the project so that the relocation of people and compensation process is conducted humanely. The rightful people will be compensated to avoid future court battles. We shall also work closely with the government throughout the design process to follow all the necessary steps. The mitigation measures for the risks associated with the project are put in place from a cumulative perspective.
As the company’s stakeholders, I urge you all to engage in a constructive discussion since we need active support from the people with a stake in this matter. We all need to make comments and suggestions which are constructive, which, in my opinion, will result in the arranging of opinions. May I take this opportunity to thank you all for attending this important occasion, thank the company management for organizing this important event, and send my gratitude to our development partners for their support towards achieving our goal. We must seize this opportunity to save our environment while diversifying our energy sources. Diversification is very important because there is a future possibility of facing out oil and gas production due to the development of environmentally friendly energy sources and the fluctuation of the oil prices by having a different source. The company will be able to continue with operations. I, therefore, wish you journey mercies as you will be traveling back home and a fruitful stay for those who will be remaining behind.
Thank you,
Sales Representative.
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