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Kellogg Company

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May 5, 2016

Kellogg Company2016 FIRST QUARTERFINANCIAL RESULTS

May 5, 2016

Forward‐Looking Statements

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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.

May 5, 2016 KELLOGG COMPANY | Q1 2016 EARNINGS

Kellogg Company

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May 5, 2016

Overview of First Quarter 2016

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*On a currency‐neutral comparable basis


• Operating profit and earnings exceeded our expectations

• Good underlying performance and share gains in U.S. Cereal business

• Net sales* performance expected to improve as the year progresses

Reported

$

Reported

Growth

Currency‐Neutral

Comparable Growth*

Currency‐Neutral

Comparable Growth

excl. VZ*

Net Sales $ 3,395 (4.5)% 6.6% (1.0)%

Operating Profit $ 438 14.0% 34.9% 1.7%

First Quarter 2016

Summary of Financial Results

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* Please refer to appendices for reconciliation of non‐GAAP measures to the most directly comparable GAAP measure.

($ in millions, except EPS)

Earnings Per Share (Comparable*) $0.97 (1)%


Earnings Per Share (Currency‐Neutral Comparable*) $1.33 +36%

Kellogg Company

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May 5, 2016

Net Sales Components

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(year‐over‐year, % change)First Quarter 2016


Q1 2015 Volume Price / Mix Project K / ShipDay Diff.

Acq. / Div. Currency Q1 2016

$3,556 M

+ 7.3%

(4.5)%

+0.4%

$3,395 M

(0.7)%

(11.7)%

Currency‐NeutralComparable Growth

+6.6%, (1)% ex. VZ+0.2%

Currency‐Neutral Comparable Gross Profit*

6


First Quarter 2016

38.0%Margin*

40.1%Margin*

2015 2016

First Quarter

$1.5b$1.4b


+ Pricing in Venezuela

‐ Continued investment in food

‐ Category/channel mix

+ On‐track to post improvement for year

Kellogg Company

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May 5, 2016

Operating Profit Performance by Region

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($ in millions, currency‐neutral comparable performance,* year‐over‐year % change )First Quarter 2016

North America

Europe

Latin America

Asia Pacific

$362

$70

$23

$17

8%

329%

(6)%

Net input deflation and savings from Project K and zero‐based budgeting

Driven by timing of investment to support commercial programs, offset by sales performance

Largely due to investment in capabilities and timing of transactional currency impact

Reported

Dollars

Currency‐Neutral

Comparable Growth*


1%

Driven by pricing in Venezuela


Operating Cash Flow (after capital expenditure)*

8


• First‐quarter cash flow of $(139) million

• Included ≈$145 million associated with a bond tender in the quarter

• Results in‐line with expectations and on‐track to deliver $1.1 billion for the full year

First Quarter 2016(millions)


Kellogg Company

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May 5, 2016

Core Working Capital (a)

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(12‐month rolling, as a percentage of sales)

(a) Internal Kellogg Metric: Period ending. Last 12 months’ average trade receivables and inventory, less 12 months’ average trade payables, divided by last 12 months’ sales.

7.6%7.3%

6.8%6.4%

6.2%5.6%

4Q 2014 1Q 2015 2Q 2015 3Q 2015 4Q 2015 1Q 2016


2016 Outlook – Guidance

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(a) 2016 guidance excludes the impact of currency translation, differences in the number of shipping days, mark‐to‐market adjustments, integration costs, costs related to Project K, Venezuela remeasurement, VIE deconsolidation, and other items that could affect comparability. Does include the impact of prior acquisitions and investment in JVs.


Guidance From

Q4 2015 Call

Current Guidance

Q1 2016

2015 Reported earnings per share $1.72 $1.72

Items affecting comparability 1.81 1.81

2015 Comparable earnings per share (EPS) $3.53 $3.53

EPS growth (+6‐8%) EPS growth (+13‐15%)

Currency‐neutral comparable 2016 EPS (a) $3.74 ‐ $3.81 $4.00 ‐ $4.07

Estimate for impact of currency, ex. VZ (≈0.06) (≈0.06)

(≈0.04) (≈0.30)

Total impact of currency (≈0.10) (≈0.36)

Comparable 2016 EPS $3.64 ‐ $3.71 $3.64 ‐ $3.71

Integration costs $(0.02) ‐ (0.03) $(0.02) ‐ (0.03)Up‐front costs $(0.40) ‐ (0.50) $(0.40) ‐ (0.50)

Estimate for impact of VZ currency

Kellogg Company

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May 5, 2016

2016 Outlook

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EPS(b)Currency‐Neutral Comparable

Operating Profit(a)Currency‐Neutral Comparable

Net Sales(a)Currency‐Neutral Comparable

+4‐6%

+11‐13%

$4.00 to $4.07

(a) 2016 guidance excludes the impact of acquisitions, dispositions, currency translation, differences in the number of shipping days, mark‐to‐market adjustments, integration costs, costs related to Project K, Venezuela remeasurement, VIE deconsolidation, and other items that could affect comparability.

(b) 2016 guidance excludes the impact of currency translation, differences in the number of shipping days, mark‐to‐market adjustments, integration costs, costs related to Project K, Venezuela remeasurement, and other items that could affect comparability. Does include the impact of prior acquisitions and investment in JVs.


Ex. Venezuela Incl. Venezuela

+0‐2%

+4‐6%

Introduction – North America

12May 5, 2016 KELLOGG COMPANY | Q1 2016 EARNINGS

Return to Profitable Growth

• Accelerate momentum behind advantaged brands in Cereal, Snacks, and Frozen

• Transform Veggie and unlock the full potential of Kashi Company

• Expand margins (while investing to grow) –Project K and ZBB

Kellogg Company

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May 5, 2016

U.S. Morning Foods


First Quarter 2016

Kellogg Core Six Brands and Overall Portfolio Driving Share Growth

Year‐Over‐Year Dollar Share Change(a)

0.5% 0.5%

0.2% 0.2%

FY 2015

Kellogg’s Brand(c)

Kellogg’s Core Six(b)

(a) AC Nielsen Scantrack, xAOC, week‐ending 04/02/2016; (b) Core 6 = Special K, FMW, Raisin Bran, Frosted Flakes, Foot Loops, Rice Krispies; (c) Kellogg excl. Kashi

Q1 2016

U.S. Snacks


First Quarter 2016

• Good growth in Big Three Cracker brands

• Continued good performance from Pringles

• Expect sequential improvement in sales across the balance of the year

Kellogg Company

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May 5, 2016

U.S. Specialty

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• Share gains in the Convenience channel

• K‐12 and on‐the‐go growth inFoodservice

• Distribution gains in Vending


First Quarter 2016

North America Other

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• Great new innovation launching in Frozen Food

• Performance of Kashi cerealimproved and great innovation launching

• Growth in Canadian Cereal and Wholesome Snacks businesses


First Quarter 2016

Kellogg Company

of 11

May 5, 2016

Summary – North America


• Accelerate momentum behind advantaged brands in Cereal, Snacks, and Frozen

• Transform Veggie and unlock the full potential of Kashi Company

• Expand margins (while investing to grow) –Project K and ZBB

Return to Profitable Growth

Europe

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• Continued strong growth in the Pringles business

• Growth in theWholesome Snack business

• New innovation and support planned in Cereal business


First Quarter 2016

Kellogg Company

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May 5, 2016

Latin America

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• Broad‐based share gains

• Strong performance of Snack business

• Challenging economic environment


First Quarter 2016

Asia Pacific

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• Good sales growth in Asia

• Pringles posted strong growth

• Our JVs continue to perform well


First Quarter 2016

Kellogg Company

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May 5, 2016

Summary

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• Good start to the year

• Progress on food improvements, Pringles expansion, sales capabilities, and savings initiatives

• Building momentum as the year progresses, as we expected


May 5, 2016

Kellogg CompanyFIRST QUARTER 2016 FINANCIAL RESULTS

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