Forward Looking Statement - Kellogg'sinvestor.kelloggs.com/~/media/Files/K/.../2015/investor-day-2015/... · Kellogg Company November 20, 2015 1 ... November 20, 2015 Forward‐Looking

Kellogg Company November 20, 2015

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Kellogg Company | November 20, 2015

Forward‐Looking Statement

This presentation contains, or incorporates by reference, “forward‐looking statements” with projections concerning, among other things, the Company’s global growth and efficiency program (Project K), the integration of acquired businesses, the Company’s strategy, zero‐based budgeting, 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 future results could also be affected by a variety of factors, including the ability to implement Project K as planned, whether the expected amount of costs associated with Project K will differ from forecasts, whether the Company will be able to realize the anticipated benefits from Project K in the amounts and times expected, the ability to realize the anticipated benefits and synergies from the 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; 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 items.

Forward‐looking statements speak only as of the date they were made, and the Company undertakes no obligation to update them publicly.

Non‐GAAP Financial Measures. This presentation includes non‐GAAP financial measures. Please refer to the Appendices for a reconciliation of these non‐GAAP financial measures to the most directly comparable GAAP financial measures. Management believes that the use of such non‐GAAP measures assists investors in understanding the underlying operating performance of the company and its segments.

Strategy | 2


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Agenda

Strategy | 3

Strategy and Overview John Bryant, CEO

Financial Overview Ron Dissinger, CFO

U.S. Snacks Deanie Elsner, President, U.S. Snacks

U.S. Frozen Foods Andrew Loucks, President, U.S. Frozen Foods

U.S. Specialty Channels Wendy Davidson, President, U.S. Specialty Channels

Kashi David Denholm, CEO, Kashi Company

Europe Chris Hood, President, Kellogg Europe

Asia Pacific Amit Banati, President, Asia Pacific

Latin America Maria Fernanda Mejia, President, Kellogg Latin America

Summary John Bryant, CEO

Break

Lunch

North America Paul Norman, President, Kellogg North America

U.S. Morning Foods Craig Bahner, President, U.S. Morning Foods


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Committed to Profitable Growth

1. Transformational Changes

2. Talented Management Team

3. Strategy for Growth

4. Earnings Visibility

Strategy | 5


Transformation

U.S.Cereal

U.S. Convenience

InternationalCereal

U.S. Natural & Frozen

International Convenience

North America Retail Snacks

InternationalCereal

North AmericaFrozen & Specialty

Channels

International Snacks

2000 Net Sales ≈$6 billion

North AmericaRetail Cereal

2014 Net Sales ≈$14.6 billion

Strategy | 6


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Transformation

AcquiredPringles

Chinajoint

venture

Acquired Bisco Misr

Tolaram Africa joint venture, investment in

Multipro

Acquired MASS Food Group

2000 2012 2013 2014 2015

Entered biscuits, cookies, crackers with Keebler acquisition

AcquiredUnited Bakers Group in Russia

Strategy | 7


Management Team

Transformation

John BryantChairman of the Board &Chief Executive Officer,

Kellogg Company

Ron DissingerSenior Vice President,Kellogg Company

Chief Financial Officer

Paul NormanPresident,

North America

Amit BanatiPresident,Asia Pacific

Maria Fernanda MejiaPresident,

Latin America

Carol StewartPresident,Canada

Andrew LoucksPresident,

U.S. Frozen Foods

Chris HoodPresident,Europe

David DenholmChief Executive Officer,

Kashi

Craig BahnerPresident,

U.S. Morning Foods

Wendy DavidsonPresident,

U.S. Specialty Channels

Deanie ElsnerPresident,U.S. Snacks

Strategy | 8


5


Change Creates Significant Opportunity

MillennialsThe Next Billion Consumers in

Emerging Markets

New Science of Marketing

Food Anytime, Anywhere

Taste Is KingBlended Retail

RealityHealth, Wellness, & Transparency

Strategy | 9


The New Science of Marketing

Investment in Brand Building

2006 2014

4%

(a) FY 2014(b) As a percent of media spending, Kellogg North America

31%

Advertising, % of Net Sales(a)

8%

Total Brand Building

Strategy | 10

Kellogg – Digital Media(a)


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Health, Wellness, and Transparency

Investment in Innovation and Renovation

Multi‐year investment program: granolas, mueslis, packaging, and more

Built global category teams… and regional teams as well

Invested in the new Kashi business

Largest renovation plan in the company’s history

Strategy | 11


Kellogg Company Global Growth Strategy

Strategy | 12


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High‐frequency stores

Natural & Organic

Emerging Markets

Salty WholesomeRegional

Opportunities

E‐commerce

Developed Cereal

Consumption Opportunities

Win inBreakfast

Global Snacking Powerhouse

Double OurEmerging Market

Engine

Win Wherethe Shopper

Shops

Strategy – 2020 Vision

Asia/Africa

Developed‐market sales capabilities

Arabia/Russia Latin America

Strategy | 13


Win in Breakfast

Developed Cereal

Investing in our food

Brands that matter

Shopping experiences that inspire

Results improving

Strategy | 14


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Win in Breakfast

Natural and Organic#1 IN NATURAL & ORGANIC

by a wide margin29% category

share

KEY ENTRY POINT into Natural & Organic

26% enter through Kashi/BN

LEADING household penetration

≈9% HH penetration

NATURAL & ORGANIC granola is fastest growing

cereal category

12% Y‐O‐Y growth

BEAR NAKED #1 share ≈15% share

Retailers ADDING SPACE 12% growth in dedicated sets

Source: Nielsen Homescan Panel, TUS, 52‐week ending 10/3/15; Nielsen Scantrack, xAOC , 52‐week ending 10/17/15

Strategy | 15


Win in Breakfast


More than half of consumers believe that cereals are a great snack(c)

+30% of cereal is currently consumed outside of breakfast in the U.S.(a)

One‐third of out‐of‐breakfast consumption happens at / after dinner(b)

(a) Kellogg Demand Landscape, 2015; TCG analysis, 2015 (b) NPD Group, Consumption Study, 2014; (c) TCG Analysis, 2015

Strategy | 16


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Win in Breakfast

U.S. Cereal Consumption

‐3.8%

‐7.8%

‐2.2%

‐0.5%

‐3.1%

‐6.7%

‐1.1%

0.1%

2013 2014 2015 YTD Last 4‐Weeks

Kellogg – Cold Cereal Dollar Change Trends(a)

Total Kellogg's Kellogg's (less Kashi)

(a) Nielsen Scantrack, xAOC, full years, 2015 through week ending 10/3/15

Strategy | 17



Natural & Organic

Emerging markets


Opportunities

E‐commerce

Developed Cereal


Win inBreakfast



Engine


Shops


Asia/Africa



Strategy | 18


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Global Snacks Powerhouse

Pringles

Expansion into new regions

Improved economics

High‐single‐digit net sales(a) growth since the acquisition

(a) Currency‐neutral comparable net sales

Expanding the network

Strategy | 19



Wholesome Snacks

Significant investment in the food… everywhere

Huge opportunity for growth

Global business

Strategy | 20


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Regional Opportunities

1996 2015E

Consecutive Years of Growth19

Strategy | 21



Natural & Organic

Emerging Markets


Opportunities

E‐commerce

Developed Cereal


Win inBreakfast



Engine


Shops

Asia/Africa



Strategy | 22



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Double Our Emerging‐Market Business

Accelerate the Latin American business

Double the Asian business

Double the Arabian business

Transform the African business

Strategy | 23



Natural & Organic

Emerging Markets


Opportunities

E‐commerce

Developed Cereal


Win inBreakfast



Engine


Shops

Asia/Africa



Strategy | 24



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Win Where the Shopper Shops

Sales Capabilities in Developed Markets

Invested in the DSD network

Invested in warehouse sales capabilities

Driving growth in growth channels

Strategy | 25


High‐Frequency Stores


(a) High Frequency Stores (HFS) refers to a group of retail environments that share similar shopper missions, are visited multiple times a day/week, with a low outlay of cash at each visit. Data from Euromonitor

+30mStores Worldwide

+38%of Global Retail Sales

+70%of Snacks Sold in EMs

are in HFS

+50%of Breakfasts Sold in EM

are in HFS

Strategy | 26


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E‐Commerce

Online shoppers are brand loyal and spending is high

Online purchases are +25% incremental for Kellogg’s


Digital shelf exposure now influences 35% of U.S. in‐store sales

E‐Commerce is expected to account for half of grocery value growth over the next five years(a)

(a) Kantar Worldpanel report 2015; other data Kellogg estimates

Kellogg’s is one of the top five FMCG brands bought online in the highly‐developed U.K. market

Strategy | 27


Kellogg Company Strategy – Goals

Deliver top‐line growth

Drive efficiency and savings

Reinvest in the business

Execute financial model and drive strong shareholder returns

Strategy | 28


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Long‐Term Guidance

Comparable Net Sales(a)

Currency‐Neutral Comparable EPS(b)

Comparable Operating Profit(a)

+7% to 9%

+1% to 3%

+4% to 6%

Strategy | 29

(a) Excludes the impact of acquisitions, dispositions, currency translation, differences in the number of shipping days, mark‐to‐market adjustments, integration costs, costs related to Project K, and other items affecting comparability.

(b) Excludes the impact of currency translation, differences in the number of shipping days, mark‐to‐market adjustments, integration costs, costs related to Project K, and other items impacting comparability.


Confidence in 2016… and Beyond

1. Transformational Changes

2. Talented Management Team

3. Strategy for Growth

4. Earnings Visibility, and…

Strategy | 30


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Confidence in 2016… and Beyond

… Committed to Profitable Growth

Strategy | 31

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Forward Looking Statement - Kellogg'sinvestor.kelloggs.com/~/media/Files/K/.../2015/investor-day-2015/... · Kellogg Company November 20, 2015 1 ... November 20, 2015 Forward‐Looking