Welcome, Agenda & Disclaimers John Renwick VP Investor - PDF document

Kellogg Company May 2, 2019 May 2, 2019 KELLOGG COMPANY | Q1 2019 EARNINGS | MAY 2, 2019 Welcome, Agenda & Disclaimers John Renwick VP Investor Relations & Corporate Planning KELLOGG COMPANY | Q1 2019 EARNINGS | MAY 2, 2019 2 1 of 14

Kellogg Company May 2, 2019 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 expected benefits and costs of the divestiture of selected cookies, fruit and fruit flavored-snacks, pie crusts and ice cream cones businesses of the Company, the expected timing of the completion of the divestiture, the ability of the Company to complete the divestiture considering the various conditions to the completion of the divestiture, some of which are outside the Company’s control, including those conditions related to regulat ory approvals, the risk that disruptions from the divestiture will divert management's focus or harm the Company’s business, risks relating to any unforeseen changes to or effects on liabilities, future capital expenditures, revenues, expenses, earnings, synergies, indebtedness, financial condition, losses and future prospects, risks ass ociated with the Company’s provision of transition services to the divested businesses post-closing, the ability to implement restructurings as planned, whether the expected amount of costs associated with restructurings will differ from forecasts, whether the Company will be able to realize the anticipated benefits from restructurings in the amounts and times expected, the ability to realize the anticipated benefits and synergies from business 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. KELLOGG COMPANY | Q1 2019 EARNINGS | MAY 2, 2019 3 Overview Steve Cahillane Chairman & Chief Executive Officer KELLOGG COMPANY | Q1 2019 EARNINGS | MAY 2, 2019 4 2 of 14

Kellogg Company May 2, 2019 CFO Transition Thank you, Fareed! Congratulations, Amit! KELLOGG COMPANY | Q1 2019 EARNINGS | MAY 2, 2019 5 Q1: On Strategy • Strategic buyer • Divestiture of non- • Portfolio focus core businesses • Financial flexibility • Emerging-markets • Broadened portfolio • Expanded distribution expansion • Strong growth • Enhanced • North America reorganization • Global commercial resources structure and • Digital/e-commerce capabilities KELLOGG COMPANY | Q1 2019 EARNINGS | MAY 2, 2019 6 3 of 14

Kellogg Company May 2, 2019 Q1: On Plan • Momentum for • Pringles, Cheez-It , Rice Krispies Treats, Pop-Tarts • Mini-Wheats , Corn Flakes, Extra, Tresor revitalized brands • Restored pipeline • Innovation and revenue • Major launches growth management • Good start • Organic growth • RX recall • Shipment timing in U.S. cereal overcame headwinds • Q1 to Q2 timing of investment • On track for 1H and Year • Pre-divestiture KELLOGG COMPANY | Q1 2019 EARNINGS | MAY 2, 2019 7 Financial Results & Outlook Fareed Khan Chief Financial Officer KELLOGG COMPANY | Q1 2019 EARNINGS | MAY 2, 2019 8 4 of 14

Kellogg Company May 2, 2019 Q1 – Summary of Financial Results $ in Millions, % Change Versus Prior Year Vs. Q1 2019 Year Ago Net $3,522 +3.5% Reported • Organic growth, including positive price realization • Sales Multipro acquisition/consolidation $3,645 +7.2% Currency-Neutral * • Lapped year-ago favorability in factory costs Operating (25.4)% $381 • Reported Increased input-cost inflation Profit • Costs related to alternative pack formats (4.6)% Currency-Neutral Adjusted* $477 • Investments in capabilities Earnings • Lapped year-ago discrete tax benefit (35.4)% $0.82 Reported • Per Pension expense negatively affected by lower pension asset value at beginning of year Currency-Neutral Adjusted* $1.04 (15.4)% Share • Cash Q1 always the seasonally low quarter $(78) $(174) • Lower Net Income, and timing of tax Flow * payments within year * Please refer to Q1 2019 earnings press release tables for reconciliation of non-GAAP measures to the most directly comparable GAAP measure. KELLOGG COMPANY | Q1 2019 EARNINGS | MAY 2, 2019 9 Net Sales – Return to Organic Growth Net Sales Growth by Components* Year-over-year, % change • International growth • Consumption outpaced shipments in U.S. • RGM actions starting to take hold * Please refer to Q1 2019 earnings press release tables for reconciliation of non-GAAP measures to the most directly comparable GAAP measure. KELLOGG COMPANY | Q1 2019 EARNINGS | MAY 2, 2019 10 5 of 14

Kellogg Company May 2, 2019 Gross Profit Margin – Cost & Mix Impacts Gross Profit Margin* % of Net Sales, Currency-Neutral Adjusted Basis * Mechanical: ~(110) bp _ Multipro consolidation, May 2018 Growth-Related: ~(140) bp _ Adverse costs and mix shifts (pack formats, emerging markets) _ RX recall write-offs Ongoing: ~(90) bp _ Cost inflation and comparisons (transportation, energy, inputs) + Productivity savings * Please refer to Q1 2019 earnings press release tables for reconciliation of non-GAAP measures to the most directly comparable GAAP measure. KELLOGG COMPANY | Q1 2019 EARNINGS | MAY 2, 2019 11 Below-the-Line Items – Year-On-Year Headwinds $ in Millions, Versus Year Ago, Positive/(Negative), Currency-Neutral Adjusted Basis Q1 2019 Vs. Year Ago • Interest Expense Debt related to acquisition of increased stakes $(5) * in West Africa operations during Q2 2018 Lower pension asset values entering the year, • Other Income * $(9) following December 2018 financial markets’ decline; partially offset by other items • Year-Ago Tax Benefit $(44) Impact of lapping discrete tax benefit in Q1 2018 * Please refer to Q1 2019 earnings press release tables for reconciliation of non-GAAP measures to the most directly comparable GAAP measure. KELLOGG COMPANY | Q1 2019 EARNINGS | MAY 2, 2019 12 6 of 14

Kellogg Company May 2, 2019 Pending Divestiture – Announced April 1 st Businesses Being Sold: Businesses We Retain From 2001 Keebler Acquisition: Cookies Crackers Pie Crusts Ice Cream Fruit Snacks Cones KELLOGG COMPANY | Q1 2019 EARNINGS | MAY 2, 2019 13 Pending Divestiture – Near-Term Financial Impact $ in Millions As Announced on April 1: Impact Next Steps Proceeds • • • Late July close $1,300 sale price Divested net sales, profit, cash flow • • Transition Services Estimated net • Agreement proceeds $900-1,000 ~(5)% dilutive to 12- month EPS, more in * • Debt reduction 2019 than 2020 * Currency-neutral Adjusted basis. Please refer to Q1 2019 earnings press release tables for reconciliation of non-GAAP measures to the most directly comparable GAAP measure. KELLOGG COMPANY | Q1 2019 EARNINGS | MAY 2, 2019 14 7 of 14