Tim Mobsby, President – Kellogg Europe Kellogg Company – 11/12/09
Europe
Forward-Looking Statements This presentation contains, or incorporates by reference, “forward-looking statements” with projections concerning, among other things, the Company’s strategy, 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, brand building, ROIC, working capital, growth, new products, innovation, cost reduction projects, and competitive pressures. Forward-looking statements include predictions of future results or activities and may contain the words “expects,” “believes,” “should,” “will,” “will deliver,” “anticipates,” “projects,” “estimates,” 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 other factors, including competitive conditions and their impact; the effectiveness of pricing, advertising, and promotional spending programs; the success of productivity improvements and business transitions; the success of innovation and new product introductions; the recoverability of carrying amounts of goodwill and other intangibles; the availability of and interest rates on short-term financing; changes in consumer behavior and preferences; commodity and energy prices and labor costs; 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; U.S. and foreign economic conditions including interest rates, taxes and tariffs, and currency rate translations or unavailability; legal and regulatory factors; the ultimate impact of product recalls; the underlying price and volatility of the Company’s common stock and the impact of equity-based employee awards; business disruption or other losses from 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 publicly update them.
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Tim Mobsby, President – Kellogg Europe Kellogg Company – 11/12/09
Europe – Sustainable Growth
Net Sales 4-Year CAGR = 6% (a)
Per Capita Consumption
Core Core Developed Developed Markets: Markets:
U.K. U.K.
Core Core Developing Developing Markets: Markets:
Italy Italy Spain Spain
Emerging Emerging Markets: Markets:
Ireland Ireland
Russia Russia Turkey Turkey
> 5 Kilos > 1 Kilo > 250 grams
(a) Excludes the impact of foreign exchange and includes Russia.
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Tim Mobsby, President – Kellogg Europe Kellogg Company – 11/12/09
Kellogg U.K. Net Sales 4-Year CAGR = 6% (a)
RTEC and Snacks both growth businesses RTEC Snacks
(a) Excludes the impact of foreign exchange.
Kellogg U.K. – RTEC • > 2 times larger than nearest competitor 2009 2009
2005 2005
8% 8%
8% 8% 18% 18%
19% 19%
42% 42%
14% 14%
15% 15% 18% 18%
Kellogg
42% 42%
Competitor A
16% 16%
Competitor B
Private Label
All Others
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Tim Mobsby, President – Kellogg Europe Kellogg Company – 11/12/09
Powerful Brand Portfolio
• 6 of the top 10 brands, 4 of top 5 • Combined share 32.7% + 290 Basis Points (2004 – 2009)
Source: IRI, All Outlets, 52-weeks-ending 8/9/09
Kellogg U.K. – Future Growth Opportunities
• Aging population – 45+ highest per capital consumers of RTEC
• Trend to premium
• Extend RTEC Occasions – Convenience – Nutrition – Value
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Tim Mobsby, President – Kellogg Europe Kellogg Company – 11/12/09
Kellogg U.K. – Future Growth Opportunities
• Brand stretch and portability
• Leverage proven brands into U.K.
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Tim Mobsby, President – Kellogg Europe Kellogg Company – 11/12/09
Continental Western Europe – Sustainable Growth 4-Year Net Sales CAGR > 3% France France
Spain Spain
Italy Italy
Belgium Belgium Germany Germany
Switzerland Switzerland Austria Austria Luxemborg Luxemborg Sweden Sweden
Denmark Denmark
Greece Greece
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Tim Mobsby, President – Kellogg Europe Kellogg Company – 11/12/09
Continental Western Europe
More than just a growth business
• Source of ideas
• Proving ground for food
• Source of talent
Source of Ideas (France)
• #3 brand in category 3 years after launch • Teen and young adult profile • Distinctive food form and positioning • Above average margins
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Tim Mobsby, President – Kellogg Europe Kellogg Company – 11/12/09
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Tim Mobsby, President – Kellogg Europe Kellogg Company – 11/12/09
Kellogg Russia – United Bakers •• #1 #1 or or #2 #2 position position in in 33 scale scale categories categories
A Fantas Platfo tic rm
•• National National manufacturing manufacturing and and distribution distribution capabilities capabilities –– 66 plants plants –– 75% 75% ++ distribution distribution
St. Petersburg Pskov Moscow Vyazma
Gorokhovets
Crackers #1 35% sales
RTEC #2 23% sales
Voronezh Krasnodar
Tyumen
Cookies #2 42% sales
Kellogg Russia – United Bakers
Attractive Fast Growing Categories C EC R RTTE
rrss cckkee a a r r C C ess okkiie C Cooo
•• Growing Growing >> 20%+ 20%+ •• High level of High level of breakfast breakfast consumption consumption •• Opportunity Opportunity to to bridge bridge from from kasha kasha •• Growing Growing >> 30% 30% •• Emerging Emerging category category •• Moving Moving from from bulk bulk to to packaged packaged •• Large Large staple staple category, category, 97% 97% penetration penetration •• Moving Moving from from bulk bulk to to packaged packaged
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Tim Mobsby, President – Kellogg Europe Kellogg Company – 11/12/09
Kellogg Russia – Driving Growth • Evolving Portfolio Bulk Bulk
Packaged Packaged
Premium Premium packaged packaged
• Lyubyatovo brand (goodness of Russian grain)
RTEC RTEC
Cookies Cookies
Crackers Crackers
• Kellogg RTEC Launch
Lyubyatovo
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Tim Mobsby, President – Kellogg Europe Kellogg Company – 11/12/09
Summary – Kellogg Europe Building an even stronger Kellogg
RTEC
Cereal Snacks
Growing Growing on-trend on-trend categories categories
Leadership Leadership position position Powerful Powerful distinctive distinctive brands brands
Full of Opportunities
€ £ Strong Strong financials financials
Untapped Untapped markets markets
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