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Kellogg Company 9/9/2020
KELLOGG COMPANY | BARCLAYS 2020 1
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Emerging StrongerBarclays Global Consumer Staples Conference
Virtual
September 9, 2020
KELLOGG COMPANY | BARCLAYS CONFERENCE 2020 2
Agenda
Emerging StrongerSteve Cahillane
Chairman & CEO
Strengthening our e-CommerceMonica McGurkChief Growth Officer
Strengthening our Emerging MarketsAmit Banati
Chief Financial Officer
Kellogg Company 9/9/2020
KELLOGG COMPANY | BARCLAYS 2020 2
KELLOGG COMPANY | BARCLAYS CONFERENCE 2020
This presentation contains, or incorporates by reference, “forward-looking statements”, with projections concerning, among other things, the Company’s restructuring programs, the integration of acquired businesses, the Company’s strategy, and the Company’s sales, earnings, margin, operating profit, costs and expenditures, interest expense, tax rate, capital expenditure, dividends, cash flow, debt reduction, share repurchases, costs, charges, rates of return, brand building, ROIC, working capital, growth, new products, innovation, cost reduction projects, workforce reductions, savings, and competitive pressures. Forward looking statements include predictions of future results or activities and may contain the words “expects,” “believes,” “should,” “will,” “anticipates,” “projects,” “estimates,” “implies,” “can,” or words or phrases of similar meaning. The Company’s actual results or activities may differ materially from these predictions.
The Company’s actual results or activities may differ materially from these predictions. The Company’s future results could be affected by a variety of other factors, including uncertainty of the magnitude, duration, geographic reach, impact on the global economy and current and potential travel restrictions of the COVID-19 outbreak, the current, and uncertain future, impact of the COVID-19 outbreak on our business, growth, reputation, prospects, financial condition, operating results (including components of our financial results), and cash flows and liquidity, the expected benefits and costs of the divestiture of selected cookies, fruit and fruit flavored-snacks, pie crusts, and ice-cream cones businesses of the Company, the risk that disruptions from the divestiture will divert management's focus or harm the Company’s business, risks relating to any unforeseen changes to or effects on liabilities, future capital expenditures, revenues, expenses, earnings, synergies, indebtedness, financial condition, losses and future prospects, risks associated with the Company’s provision of transition services to the divested businesses post-closing, the ability to implement restructurings as planned, whether the expected amount of costs associated with restructurings will differ from forecasts, whether the Company will be able to realize the anticipated benefits from restructurings in the amounts and times expected, the ability to realize the anticipated benefits and synergies from business acquisitions in the amounts and at the times expected, the impact of competitive conditions, the effectiveness of pricing, advertising, and promotional programs; the success of innovation, renovation and new product introductions; the recoverability of the carrying value of goodwill and other intangibles, the success of productivity improvements and business transitions, commodity and energy prices, transportation costs, labor costs, disruptions or inefficiencies in supply chain, the availability of and interest rates on short-term and long-term financing, actual market performance of benefit plan trust investments, the levels of spending on systems initiatives, properties, business opportunities, integration of acquired businesses, and other general and administrative costs, changes in consumer behavior and preferences, the effect of U.S. and foreign economic conditions on items such as interest rates, statutory tax rates, currency conversion and availability, legal and regulatory factors including changes in food safety, advertising and labeling laws and regulations, the ultimate impact of product recalls; business disruption or other losses from war, terrorist acts or political unrest; and other risks and uncertainties.
Forward-looking statements speak only as of the date they were made, and the Company undertakes no obligation to update them publicly.
This presentation includes non‐GAAP financial measures. Please refer to the earnings press release, which is available on the Investor Relations page on the Company’s website, www.Kelloggcompany.com, for a reconciliation of these non‐GAAP financial measures to the most directly comparable GAAP financial measures. Managementbelieves that the use of such non-GAAP measures assists investors in understanding the underlying operating performance of the company and its segments.
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Forward-Looking Statements
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KELLOGG COMPANY | BARCLAYS CONFERENCE 2020
Emerging StrongerSteve Cahillane, Chairman & Chief Executive Officer
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Kellogg Company 9/9/2020
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Deploy For Growth Was Already Building Momentum
Good Progress in 2019: Entered 2020 With Momentum:
KELLOGG COMPANY | BARCLAYS CONFERENCE 2020 6
Pivoting to Balanced Financial Delivery
2014-2017
Project K &
ZBB
2018-2019
DeployFor
Growth
ReducedCost Structure
RestoredTop-LineGrowth
2020-Ongoing
DeployFor
Growth
Balance Top-Line Growth with
Profitability & Cash Flow
Kellogg Company 9/9/2020
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COVID Accelerates the Pivot to Balanced Delivery
2014-2017
Project K &
ZBB
2018-2019
DeployFor
Growth
ReducedCost Structure
RestoredTop-LineGrowth
2020-Ongoing
DeployFor
Growth
Balance Top-Line Growth with
Profitability & Cash Flow
COVID Crisis
Safety, Supply, Community,
Financial Flexibility
Consumer Reappraisal,Share Gains,E-Commerce
SustainBalancedDelivery
Ongoing
KELLOGG COMPANY | BARCLAYS CONFERENCE 2020 8
Executing Well Through the Crisis
Aiding Our CommunitiesKeeping Employees Safe Supplying Food to the World
Kellogg Company 9/9/2020
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COVID – Acceleration of Already Positive TrendNet Sales – Organic Growth *
* Organic net sales growth excludes the impact of foreign currency translation, acquisitions, divestitures, and changes in shipping days.
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COVID – Accentuation of Stronger PortfolioPie Chart is % of Total Net Sales in 2019; Bar Charts Represent Organic Net Sales Growth*
* Organic net sales growth excludes the impact of foreign currency translation, acquisitions, divestitures, and changes in shipping days.
Kellogg Company 9/9/2020
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Outsized First-Half Results
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Enhanced Financial Flexibility
* Cash flow: Defined as net cash provided by operating activities reduced by expenditures for property additions.
** Net Debt: Defined as the sum of long-term debt, current maturities of long-term debt, and notes payable, less cash, marketable securities and other cash equivalents.
Kellogg Company 9/9/2020
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Increased Competitiveness
Source: Nielsen, xAOC. Year-to-date and 13 weeks through 8/22/20 for the U.S., 7/25/20 for Canada, 7/11/20 for the U.K., and 8/22/20 for Australia.
Improving Share Performance in CerealChange in Share of Category Retail Sales, in Percentage Points, Versus Year Ago
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Strong Consumer Reappraisal
Source: Nielsen Panel, U.S.; Compares Household Penetration of the 52-week period ended 8/08/20 with the Household Penetration of the 52-week period ended 2/22/20
Increased Household Penetration During PandemicPercentage Point Change in 52-Week Household Penetration between 8/08/20 and 2/22/20
Kellogg Company 9/9/2020
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Strong 2H Commercial Activity
INNOVATION BRAND MESSAGING
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ADVISORY GROUP MEMBER
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Heart & Soul – Increasingly Important
Kellogg Company 9/9/2020
KELLOGG COMPANY | BARCLAYS 2020 9
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KELLOGG COMPANY | BARCLAYS CONFERENCE 2020
Strengthening our e-CommerceMonica McGurk, Chief Growth Officer
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✓ Recruited high performing digital talent
✓ Invested in digital tools & capabilities
✓ Launched digital training across functions
✓ Created global eCom strategy with local flexibility
Pre-COVID Digital Investments Paying Off
Kellogg Company 9/9/2020
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E-Commerce – We Were Ready for the Acceleration
Sources: Nielsen, 1010data, IRI, Retailer ePOS
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E-Commerce – Accelerated Growth in All Regions
Sources: Nielsen, 1010data, IRI, Retailer ePOS
Kellogg Company 9/9/2020
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E-Commerce – Penetration Above Market Averages
Kellogg Sales Through e-Commerce ChannelsEstimated Percent of Retail Sales, First Half 2020
Sources: Nielsen, 1010data, IRI, Retailer ePOS and IGD
KELLOGG COMPANY | BARCLAYS CONFERENCE 2020
E-Commerce – Gaining Share in Key Categories
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Kellogg Outperforming Category in >90% of eCom Business
Estimated Retail Sales Growth in e-Commerce Channels First Half 2020, in Percent, Versus Year Ago
Sources: Nielsen, 1010data, IRI, Retailer ePOS
Kellogg Company 9/9/2020
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Digital Strength – Positioned to Win in Future
▪ Powerful tool for household retention
▪ Driving important share gains across categories
▪ Accelerating in emerging markets
▪ New digital capabilities to support customers
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KELLOGG COMPANY | BARCLAYS CONFERENCE 2020
Strengthening our Emerging MarketsAmit Banati, Chief Financial Officer
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Kellogg Company 9/9/2020
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Emerging Markets – Key Growth Driver
Kellogg Emerging Markets SalesOrganic Net Sales Growth, in Percent
KELLOGG COMPANY | BARCLAYS CONFERENCE 2020 26
Emerging Markets – Diversified Footprint & Portfolio
Kellogg Emerging MarketsComposition of Net Sales, 1H 2020
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Emerging Markets – Expanding Affordable Offerings
Cereal: Snacks:
KELLOGG COMPANY | BARCLAYS CONFERENCE 2020 28
Scaling Up Across Africa
• Ground operations in Africa’s three largest economies
• Kellogg net sales in Africa were $0.1 billion in 2014…and are approaching $1.0 billion in 2020
Kellogg Company 9/9/2020
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Kellogg Africa – Strength of Portfolio
Broad food
portfolio serves
consumers
across price
tiers in Cereal,
Noodles, and
Snacks
KELLOGG COMPANY | BARCLAYS CONFERENCE 2020 30
Kellogg in Africa – Key Competitive Advantages
Strong brands Deep and efficient Route-to-Market
Backward integrated local supply chain
Strong local management
Kellogg Company 9/9/2020
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West Africa Partnership – Competitive “Moat”
Strong brands Deep and efficient Route-to-Market
Backward integrated local supply chain
Strong local management
• Cereal, pasta, noodles, and snacks plants
• Flexi-packaging facility
• Flour mill
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West Africa Partnership – Best-in-Class Distribution
Retailers: +500,000
Distributors: +4,000
Sub-Distributors(Market): +50,000
Consumer
Kellogg Company 9/9/2020
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KELLOGG COMPANY | BARCLAYS CONFERENCE 2020
Emerging StrongerSteve Cahillane, Chairman & Chief Executive Officer
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KELLOGG COMPANY | BARCLAYS CONFERENCE 2020 34
In Summary
➢ Good momentum going into 2020
➢ Executing well through the crisis
➢ Investing now for the long-term
➢ Emerging a stronger Company
Kellogg Company 9/9/2020
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Q&A
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