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 bud geting, 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 si milar 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. 2 BARCLAYS CONFERENCE I SEPTEMBER 5, 2018 1 of 19
Kellogg Company September 5, 2018 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 3 BARCLAYS CONFERENCE I SEPTEMBER 5, 2018 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. 4 BARCLAYS CONFERENCE I SEPTEMBER 5, 2018 2 of 19
Kellogg Company September 5, 2018 Deploying for Growth Means Making Changes 5 BARCLAYS CONFERENCE I SEPTEMBER 5, 2018 Agenda • Change in Portfolio & Footprint • Change in How We Innovate • Change in How We Build Brands • Change in Our Growth Trajectory 6 BARCLAYS CONFERENCE I SEPTEMBER 5, 2018 3 of 19
Kellogg Company September 5, 2018 Shaping a Growth Portfolio 7 CAGNY 2018 I DEPLOY FOR GROWTH Shaping a Growth Portfolio % of Total Net Sales; Organic-Basis Net Sales Growth Long-Term Trajectory 8 BARCLAYS CONFERENCE I SEPTEMBER 5, 2018 4 of 19
Kellogg Company September 5, 2018 Developed Markets Snacks – Strong Brands Better Growth for Biggest Brands: Investment Support for First Time in Years: Our Own Challenger Brands: 9 BARCLAYS CONFERENCE I SEPTEMBER 5, 2018 Developed Markets Cereal – Strong Brands Big Brands Back in Growth: Big Brands Stabilizing: Our Own Challenger Brands: 10 BARCLAYS CONFERENCE I SEPTEMBER 5, 2018 5 of 19
Kellogg Company September 5, 2018 Developed Markets Frozen – Strong Brands 11 BARCLAYS CONFERENCE I SEPTEMBER 5, 2018 Emerging Markets – Building Scale & Growth Kellogg Emerging Markets, Volume in Kilos 12 BARCLAYS CONFERENCE I SEPTEMBER 5, 2018 6 of 19
Kellogg Company September 5, 2018 Emerging Markets – Strong Brands Big Global Brands: Trusted Kellogg Masterbrand: Expandable Local Brands: 13 BARCLAYS CONFERENCE I SEPTEMBER 5, 2018 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 14 BARCLAYS CONFERENCE I SEPTEMBER 5, 2018 7 of 19
Kellogg Company September 5, 2018 Agenda • Change in Portfolio & Footprint • Change in How We Innovate • Change in How We Build Brands • Change in Our Growth Trajectory 15 BARCLAYS CONFERENCE I SEPTEMBER 5, 2018 Changing How We Innovate 16 BARCLAYS CONFERENCE I SEPTEMBER 5, 2018 8 of 19
Kellogg Company September 5, 2018 A Health & Wellness Heritage 17 BARCLAYS CONFERENCE I SEPTEMBER 5, 2018 Our Innovation Opportunity • Mega-trends • Fit for our Portfolio • New approach 18 BARCLAYS CONFERENCE I SEPTEMBER 5, 2018 9 of 19
Kellogg Company September 5, 2018 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! 19 BARCLAYS CONFERENCE I SEPTEMBER 5, 2018 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! 20 BARCLAYS CONFERENCE I SEPTEMBER 5, 2018 Source: The Balanced Body Nutrition 10 of 19
Kellogg Company September 5, 2018 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 21 BARCLAYS CONFERENCE I SEPTEMBER 5, 2018 New Approach – From Trend to Paradigm Science: Microbiome Plant-based sustenance Food: Model: Rapid prototyping, Culinary-inspired grainoliers iterative learners 22 BARCLAYS CONFERENCE I SEPTEMBER 5, 2018 11 of 19
Kellogg Company September 5, 2018 Getting Ideas From New Sources 23 BARCLAYS CONFERENCE I SEPTEMBER 5, 2018 Renovating Existing Foods 24 BARCLAYS CONFERENCE I SEPTEMBER 5, 2018 12 of 19
Kellogg Company September 5, 2018 Getting Food & Communication Right Inner Strength: Digestive Health: 25 BARCLAYS CONFERENCE I SEPTEMBER 5, 2018 Daring to be Different .. Hyper-Convenience Next-Generation Natural Digestive Wellness 26 BARCLAYS CONFERENCE I SEPTEMBER 5, 2018 13 of 19
Kellogg Company September 5, 2018 Agenda • Change in Portfolio & Footprint • Change in How We Innovate • Change in How We Build Brands • Change in Our Growth Trajectory 27 BARCLAYS CONFERENCE I SEPTEMBER 5, 2018 Building World Class Brands 28 BARCLAYS CONFERENCE I SEPTEMBER 5, 2018 14 of 19
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