Kellogg Company. April 28, Annual Shareowners Meeting April 28, Welcome Annual Shareowners Meeting Page 1 of 18

Transcription

1 2017 Annual Shareowners Meeting Welcome 2017 Annual Shareowners Meeting Page 1 of 18

2 Kellogg Company Thank You, Rogelio! Welcome, Rick! 2017 Annual Shareowners Meeting Page 2 of 18

3 CFO Transition Thanks, Ron! Welcome, Fareed! Honoring Active Duty Employees 2017 Annual Shareowners Meeting Page 3 of 18

4 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 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 Annual Shareowners Meeting Page 4 of 18

5 Agenda Creating Our Future Heart & Soul Q&A Food Industry Landscape 2017 Annual Shareowners Meeting Page 5 of 18

6 2020 Growth Strategy Win in Breakfast Stabilize Core Four Developed Markets Grow Emerging Markets 2017 Annual Shareowners Meeting Page 6 of 18

7 Capitalizing on Trends Kellogg s x Kawa Pop-Up Café in Sydney Pop-Tarts Café - NYC Bear Naked Custom Made Granola Venture Capital Fund 65 Gr-r-reat years 2017 Annual Shareowners Meeting Page 7 of 18

8 Global Snacks Powerhouse Increased snacking around the world US Snacks 2017 Annual Shareowners Meeting Page 8 of 18

9 Rice Krispies Treats year CAGR of ~ +7.6% Cheez-It Stronger Than Ever Share Leader in Crackers (2016) Over $1 Billion in U.S. Net Sales Consecutive Years of Growth year CAGR 6% Growth 2017 Annual Shareowners Meeting Page 9 of 18

10 International Snacks +8% CAGR Acquisition * Measured in kilos Emerging Markets Engine Kellogg Emerging-Markets Kilos Parati, 2017 Joint Ventures 4.5% CAGR x-jvs and Parati x-jvs and Parati 2017 Acquired Pringles Wilmar International joint venture Acquired Bisco Misr, Egyptian biscuits company Tolaram Africa joint venture Acquired Mass Food Group, leading Egyptian cereal company Acquired Parati, leading Brazilian biscuits, pasta and powder beverage company 2017 Annual Shareowners Meeting Page 10 of 18

11 Win Where the Shopper Shops High-Frequency Stores E-Commerce Route to Market Expanding distribution in emerging markets Local distributors Acquired capabilities and scale Winning Portfolio Winning wholesome snacks Increased small can availability Evolved cereal offer to win Digital Shelf Click & Collect Home Delivery Margin Expansion 20.0% 17.5% 15.4% bp ~18% On-Trend Food 15.0% 14.4% Invest for Impact 12.5% 10.0% E 2018E Currency-Neutral Comparable Basis, Operating Profit as % of Net Sales, Excluding Venezuela Productivity * See Appendix for reconciliation Annual Shareowners Meeting Page 11 of 18

12 Kellogg Company Daily Stock Price $90 $80 $70 $60 Share Price $71.49 On Apr. 26, 2017 $50 $40 4/26/12 4/26/17 50-Year Dividend History 2017 Annual Shareowners Meeting Page 12 of 18

13 A Company With a Heart and Soul Creating 3 Billion Better Days by 2025 Provided more than 1.9 billion servings to children and families in need around the world 2017 Annual Shareowners Meeting Page 13 of 18

14 2016 Heart and Soul Highlights Sourcing Responsibly; Conserving Natural Resources Improving Livelihoods of Farmers Palm Oil Scorecard Leader 9/9 Leadership Recognition 2016 Heart and Soul Highlights Workplace Awards Top Companies for Executive Women (2017) Top 50 Companies for Diversity (2016) Best Places to Work for LGBT Equality (2016) Best Companies for Diversity (2016) 2017 Annual Shareowners Meeting Page 14 of 18

15 2016 Heart and Soul Highlights Reputational Awards World s Most Admired Companies (2017) World s Most Ethical Companies (2017) World s Most Reputable Companies (2017) Best Global Brands (2017) Supporting Our Communities Companywide campaign total: $5.5 million Battle Creek campaign total: $2.6 million 2017 Annual Shareowners Meeting Page 15 of 18

16 In Summary We re creating our future and doing it the right way Q&A 2017 Annual Shareowners Meeting Page 16 of 18

17 2017 Annual Shareowners Meeting 2017 Annual Shareowners Meeting 2017 Annual Shareowners Meeting Page 17 of 18

18 Appendix Kellogg Company and Subsidiaries Reconciliation of Non-GAAP Amounts - Reported Operating Margin to Comparable Operating Margin excluding Venezuela Year ended 2016 and 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% 2017 Annual Shareowners Meeting Page 18 of 18