K Kellogg Co Sept 2018

Kellogg Company September 5, 2018
Real Changes,
Improving Performance
Kellogg Company
Barclays Global Consumer Staples Conference

Boston
September 5, 2018
Forward-Looking Statements
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 (including the exit from its Direct Story Delivery system) 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 benefits from our implementation of a more formal Revenue Growth Management discipline, 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;
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 items.
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. Management believes that the use of such non-GAAP measures assists investors in understanding the underlying operating
performance of the company and its segments.
BARCLAYS CONFERENCE I SEPTEMBER 5, 2018 2
1 of 19
What a Difference a Year Makes
 Transitioned to new management
 Launched Deploy For Growth strategy
 Completed most of Project K

restructuring, including transition out
of DSD
 Acquired RXBAR, increased West

Africa investment, consolidated
Multipro
 Ramped up Brand Building investment
Improving Performance
Net Sales, Organic Growth *
• Big brands back in growth
• Accelerated emerging-
markets growth
• Frozen Foods momentum
• Improved velocities in U.S.

Snacks
• Stabilized cereal in U.K.,

Australia, Canada
* Organic growth excludes the impact of acquisitions, dispositions, shipping-days differences, and foreign-currency translation.
2 of 19
Deploying for Growth Means Making Changes
Agenda
• Change in Portfolio & Footprint
• Change in How We Innovate
• Change in How We Build Brands
• Change in Our Growth Trajectory
3 of 19
Shaping a Growth Portfolio
CAGNY 2018 I DEPLOY FOR GROWTH 7
Shaping a Growth Portfolio

% of Total Net Sales; Organic-Basis Net Sales Growth
Long-Term Trajectory
4 of 19
Developed Markets Snacks – Strong Brands

Better Growth
for Biggest
Brands:
Investment
Support for
First Time in
Years:
Our Own
Challenger
Brands:
Developed Markets Cereal – Strong Brands
Big Brands
Back in
Growth:
Big Brands
Stabilizing:
Our Own
Challenger
Brands:
5 of 19
Developed Markets Frozen – Strong Brands
Emerging Markets – Building Scale & Growth

Kellogg Emerging Markets, Volume in Kilos
6 of 19
Emerging Markets – Strong Brands
Big Global
Brands:
Trusted
Kellogg
Masterbrand:
Expandable
Local Brands:
Emerging Markets – Now a Major Driver

Emerging Markets as % of Net Sales
Source: Management’s interpretation of data from company reports, and analysts’ published estimates; peers are large-cap, U.S.-based packaged food companies
7 of 19
Agenda
Changing How We Innovate
8 of 19
A Health & Wellness Heritage
Our Innovation Opportunity
• Mega-trends
• Fit for our Portfolio
• New approach
9 of 19
Emerging H&W Trends – Consumer Awareness
• High interest in fiber and plant

protein
• Plant-based diet getting

recognized for health,
environmental, and ethical
reasons
• High intuitive link between gut

and other bodily functions,
especially emotion
• Consumers already demand

what we can offer!
Emerging H&W Mega-Trand – Plant-Based Protein
• Specific protein needs now

understood
• New techniques to modify plant

protein profiles
• Novel fermentation and cellular

agricultural processes produce
unique protein and micro-
nutrient profiles
• Our portfolio and heritage is

plant-based foods!
BARCLAYS CONFERENCE I SEPTEMBER 5, 2018 Source: The Balanced Body Nutrition 20
10 of 19
Emerging H&W Mega-Trend – Microbiome
• Number of scientific-publication
references increasing
exponentially
• Increasing accessibility of gene

sequencing will continue to
increase awareness
• Human studies are underway
• We specialize in grains and

fiber! Source: PubMed.gov, Trilink Biotechnologies
New Approach – From Trend to Paradigm
Science:
Microbiome
Plant-based sustenance
Food: Model:
Culinary-inspired Rapid prototyping,
grainoliers iterative learners
11 of 19
Getting Ideas From New Sources
Renovating Existing Foods
12 of 19
Getting Food & Communication Right

Inner Strength: Digestive Health:
Daring to be Different
..
Hyper-Convenience
Next-Generation Natural
Digestive Wellness
13 of 19
Agenda
Building World Class Brands
14 of 19
Data & Analytics at the Center of What We Do

Better Advanced
Data Analytics
 First party database
 26 million consumers Real time
 Receipt / loyalty card integrated
purchase data consumer
response
 Program that identifies Weekly media /

individual consumers by device content
 Enables move from “One oprtimization
message for all” to “Right
message for each”
Shifting Media Mix, Influencing Consumer/Shopper
MEDIA % MIX
15 of 19
Extending Brand Building into eCommerce
Commercial
channel
Brand Test &

building Learn
Already Seeing Improved Results
RETURN ON INVESTMENT RETURN ON AD SPEND (BY DATA SET)
Source: Kellogg Nielsen Market Mix Model Source: Nielsen Catalina Services
COST PER AD IMPRESSION % QUALITY IMPRESSIONS
Source: Starcom Source: Moat
16 of 19
Creating Personalized Experiences
Creating Trial and Buzz
17 of 19
Contemporizing and Customizing our Content
Agenda
18 of 19
Moving Toward Sustainable Growth
Reduce Invest in Deliver

Cost Brands & Sustainable
Structure Capabilities Growth
• Brand Building & • Balanced Top-Line

• Complete Project K
Innovation Growth and Margin
• Sustain ZBB
• Pack Formats Expansion
• Commercial Execution
• Portfolio
In Summary
• Improving results
• Strengthened portfolio
• Enhanced capabilities
19 of 19

K Kellogg Co Sept 2018

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K Kellogg Co Sept 2018

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Kellogg Company September 5, 2018

Barclays Global Consumer Staples Conference

BARCLAYS CONFERENCE I SEPTEMBER 5, 2018 2

What a Difference a Year Makes

 Transitioned to new management

 Launched Deploy For Growth strategy

 Completed most of Project K

 Acquired RXBAR, increased West

 Ramped up Brand Building investment

BARCLAYS CONFERENCE I SEPTEMBER 5, 2018 3

• Big brands back in growth

• Frozen Foods momentum

• Improved velocities in U.S.

• Stabilized cereal in U.K.,

BARCLAYS CONFERENCE I SEPTEMBER 5, 2018 4

Deploying for Growth Means Making Changes

BARCLAYS CONFERENCE I SEPTEMBER 5, 2018 5

• Change in Portfolio & Footprint

• Change in How We Innovate

• Change in How We Build Brands

• Change in Our Growth Trajectory

BARCLAYS CONFERENCE I SEPTEMBER 5, 2018 6

Shaping a Growth Portfolio

CAGNY 2018 I DEPLOY FOR GROWTH 7

Shaping a Growth Portfolio

BARCLAYS CONFERENCE I SEPTEMBER 5, 2018 8

Developed Markets Snacks – Strong Brands

Developed Markets Cereal – Strong Brands

Developed Markets Frozen – Strong Brands

BARCLAYS CONFERENCE I SEPTEMBER 5, 2018 11

Emerging Markets – Building Scale & Growth

BARCLAYS CONFERENCE I SEPTEMBER 5, 2018 12

Emerging Markets – Strong Brands

BARCLAYS CONFERENCE I SEPTEMBER 5, 2018 13

Emerging Markets – Now a Major Driver

BARCLAYS CONFERENCE I SEPTEMBER 5, 2018 14

• Change in Portfolio & Footprint

• Change in How We Innovate

• Change in How We Build Brands

• Change in Our Growth Trajectory

BARCLAYS CONFERENCE I SEPTEMBER 5, 2018 15

Changing How We Innovate

BARCLAYS CONFERENCE I SEPTEMBER 5, 2018 16

A Health & Wellness Heritage

BARCLAYS CONFERENCE I SEPTEMBER 5, 2018 17

Our Innovation Opportunity

BARCLAYS CONFERENCE I SEPTEMBER 5, 2018 18

Emerging H&W Trends – Consumer Awareness

• High interest in fiber and plant

• Plant-based diet getting

• High intuitive link between gut

• Consumers already demand

BARCLAYS CONFERENCE I SEPTEMBER 5, 2018 19

Emerging H&W Mega-Trand – Plant-Based Protein

• Specific protein needs now

• New techniques to modify plant

• Novel fermentation and cellular

• Our portfolio and heritage is

BARCLAYS CONFERENCE I SEPTEMBER 5, 2018 Source: The Balanced Body Nutrition 20

Emerging H&W Mega-Trend – Microbiome

• Increasing accessibility of gene

• Human studies are underway

• We specialize in grains and

BARCLAYS CONFERENCE I SEPTEMBER 5, 2018 21