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Forward-Looking Statements
This presentation contains, or incorporates by reference, forward-looking statements with projections concerning, among other things, the Companys
global growth and efficiency program (Project K), the integration of acquired businesses, the Companys strategy, zero-based budgeting, and the
Companys 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 Companys actual results or activities may differ materially from these predictions. The Companys 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 anticipated benefits from Revenue Growth Management, 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.
This presentation includes nonGAAP financial measures. Please refer to the Appendices for a reconciliation of these nonGAAP 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.
CAGNY 2017 2
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Kellogg Company February 21, 2017
CFO Transition
CAGNY 2017 3
Agenda
Closing Remarks
CAGNY 2017 4
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Kellogg Company February 21, 2017
CAGNY 2017 5
Win in Breakfast
Stabilize Grow
Core 4 Emerging
Developed Markets
Markets
CAGNY 2017 6
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Kellogg Company February 21, 2017
CAGNY 2017 7
Parati, 2017
Acquisitions
4.5%
Plus: CAGR
Joint Ventures 2013-2016
x-JVs and Parati
2012 2016
CAGNY 2017 8
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Kellogg Company February 21, 2017
CAGNY 2017 9
Margin Expansion
Currency-Neutral Comparable Basis, Operating Profit as % of Net Sales, Excluding Venezuela *
On-Trend Renovation
20.0%
Food Innovation
~18%
17.5%
+100+ bp Invest for ROI
15.4% New Marketing model
15.0% 14.4% Impact
12.5%
Price Revenue Growth
Realization Management
10.0%
2015 2016 2017E 2018E Ongoing
Productivity Project K
ZBB
CAGNY 2017 10
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Kellogg Company February 21, 2017
Agenda
Closing Remarks
CAGNY 2017 11
CAGNY 2017 12
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Kellogg Company February 21, 2017
Invest
Shift investment to highest ROI
with Impact
Operational
Build Capabilities
Excellence
CAGNY 2017 13
Portfolio Prioritization
Based on:
CAGNY 2017 14
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Kellogg Company February 21, 2017
CAGNY 2017 15
Drive
the Core Core 6 Cereal Growing Share
Share of U.S. RTEC Category
Core 6 Kelloggs Brands
22.9 Our improved
22.7
22.3
consumption
and share
performance
has been driven
by Core 6
brands
2014 2015 2016
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Kellogg Company February 21, 2017
Drive
the Core Core 6 Cereal More to Come in 2017
Shopping Experiences
Food That Rocks Brands That Matter
That Inspire
Innovate
New Advertising
Across All Core 6
Renovate
CAGNY 2017 17
Drive
the Core Pop-Tarts Sustained Growth
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Kellogg Company February 21, 2017
Drive
the Core
Eggo Returning to Growth
CAGNY 2017 * Nielsen, xAOC; retail sales 52 weeks ended 12/31/16; Q4 performance refers to 13 weeks ended 12/31/16. 19
Invest ~25% of
KNA sales
Strong growth
to Grow
High margins
Unique and
differentiated
Significant potential to
expand consumption
CAGNY 2017 20
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Kellogg Company February 21, 2017
Invest
to Grow Cheez-It Stronger Than Ever
CAGNY 2017 21
Invest
to Grow Pringles More to Grow
CAGNY 2017 22
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Kellogg Company February 21, 2017
Invest
to Grow Rice Krispies Treats Solid Momentum
+9% CAGR
Net Sales, 2013-2016
Invest in core
Channels and occasions
2013 2014 2015 2016
Capitalize on seasonal
and licensed opportunities
CAGNY 2017 23
Realize ~15% of
Significant potential
Potential KNA sales
but underperforming
Investing in food and
packaging
Sales decline near-term,
before returning to growth
CAGNY 2017 24
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Kellogg Company February 21, 2017
Realize
Potential Kashi Cereal in 2016, Snacks in 2017
Realize
Potential Special K Bars Refreshing Our Line-Up
CAGNY 2017 26
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Kellogg Company February 21, 2017
Leverage productivity
Manage for initiatives to improve margins
~20% of
Graduate brands to
higher-priority buckets
Rationalize where necessary
CAGNY 2017 27
CAGNY 2017 28
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Kellogg Company February 21, 2017
Invest
Shift investment to highest ROI
with Impact
Operational
Build Capabilities
Excellence
CAGNY 2017 29
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Kellogg Company February 21, 2017
Invest
Shift investment to highest ROI
with Impact
Operational
Build Capabilities
Excellence
CAGNY 2017 31
Productivity
Zero-Based Budgeting
CAGNY 2017 32
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Kellogg Company February 21, 2017
Summary
Portfolio prioritization
Prioritizing to Win: Investing for impact
Driving operational excellence
Margin expansion
Progress Already Evident:
Improved core brand performance
Exiting DSD
Transformation Continues:
Transforming U.S. Snacks
CAGNY 2017 33
Agenda
Closing Remarks
CAGNY 2017 34
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Kellogg Company February 21, 2017
Salty
Retail Sales*
$0.2 bn Crackers
Retail Sales*
each Bars $0.2 bn
each
Cookies
Retail Sales*
$0.5 bn
* Retail sales figures are from Nielsen, xAOC, with Cheez-It figures xAOC+Convenience; 52 weeks ended 12/31/2016
CAGNY 2017 35
CAGNY 2017 36
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Kellogg Company February 21, 2017
1. Margin Expansion
2. Inventory Management
3. Increased Growth
CAGNY 2017 37
1. DSD network
Infrastructure Intact Incentive plans
Manufacturing network
CAGNY 2017 38
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Kellogg Company February 21, 2017
Financial Impact
US Snacks
Operating Margin Expansion*
Increased Brand
Investment
Higher OP Margin
US Snacks Roadmap
CAGNY 2017 40
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Kellogg Company February 21, 2017
3.
CAGNY 2017 41
Dial-up
Digital
Expand into
Social/Mobile
CAGNY 2017 42
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Kellogg Company February 21, 2017
+1.2% 40%
20%
% NSV
0%
(3.2%) % Customers Growing
1H 2016 2H 2016 1H 2016 2H 2016
CAGNY 2017 * Number of customers recording NSV growth, based on % of Kelloggs U.S. Snacks net sales. 43
3.
Focus high margin, high velocity SKUs
Optimize Category Portfolios
CAGNY 2017 44
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Kellogg Company February 21, 2017
2.
Grow new margin enhanced portfolio
Stronger, Leaner Portfolio Higher-velocity shelf set
3.
Launch cross-category programs
Joint Business Partnership Partner of Choice for eCommerce
CAGNY 2017 45
Invest
to Grow Cheez-It Sustain Momentum
CAGNY 2017 46
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Kellogg Company February 21, 2017
Invest
to Grow Pringles Dial Up Growth
CAGNY 2017 47
Invest
to Grow Rice Krispies Treats Sustain Growth
CAGNY 2017 48
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Kellogg Company February 21, 2017
Realize
Potential Special K A New Portfolio
CAGNY 2017 49
Invest
to Grow
Drive
the Core
Keebler More Elves!
Masterbrand Campaign
across Categories in 2017
CAGNY 2017 50
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Kellogg Company February 21, 2017
Established
Tent-pole
Events
Pre-built
Shipper &
Modules
CAGNY 2017 51
Transforming Snacks
CAGNY 2017 52
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Kellogg Company February 21, 2017
Agenda
Closing Remarks
CAGNY 2017 53
In Summary
CAGNY 2017 54
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Kellogg Company February 21, 2017
Q&A
Q&A
55
Appendix
2016 2015
Reported operating margin 10.7% 8.1%
Mark-to-market -2.0% -3.3%
Project K and cost reduction activities -2.5% -2.4%
Other costs impacting comparability 0.0% 0.5%
Integration and transaction costs -0.1% -0.2%
Venezuela remeasurement -0.1% -0.9%
Comparable operating margin 15.4% 14.4%
Comparable operating margin excluding Venezuela 15.4% 14.4%
CAGNY 2017 56
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