Paul Norman, President – Kellogg International Kellogg...
11
1 Paul Norman, President – Kellogg International Kellogg Company – 11/12/09 Asia Pacific Asia Pacific Forward-Looking Statements 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. 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.
Transcript of Paul Norman, President – Kellogg International Kellogg...
1
Paul Norman, President – Kellogg International Kellogg Company – 11/12/09
Asia PacificAsia Pacific
Forward-Looking StatementsForward-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.
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.
2
Paul Norman, President – Kellogg International Kellogg Company – 11/12/09
2005 20082005 2008
Asia Pacific: Growth EngineAsia Pacific: Growth EngineNet SalesNet Sales
7% CAGR
Asia Pacific: Many Different CulturesAsia Pacific: Many Different Cultures
Sub-Equatorial AfricaSub-Equatorial Africa
North AsiaNorth Asia
SoutheastAsia
SoutheastAsia
IndiaIndia
ChinaChina
ANZANZ
3
Paul Norman, President – Kellogg International Kellogg Company – 11/12/09
Asia Pacific: Many Different Breakfast HabitsAsia Pacific: Many Different Breakfast Habits
Kids & TeensKids & Teens
FamilyFamily AdultsAdults
Addressed by a Strong Brand PortfolioAddressed by a Strong Brand Portfolio
4
Paul Norman, President – Kellogg International Kellogg Company – 11/12/09
South Africa South Africa
2004 20082004 2008
South Africa – Strong Growth Over TimeSouth Africa – Strong Growth Over Time
12% CAGR
Net SalesNet Sales
5
Paul Norman, President – Kellogg International Kellogg Company – 11/12/09
* LSM: Living Standards Measure – Socio-economic consumer profilingmetric in South Africa
LSM* 4-6LSM* 4-6 LSM* 7-10LSM* 7-10
South Africa – A Growing Middle Class WithGrowing Purchasing Power …South Africa – A Growing Middle Class WithGrowing Purchasing Power …
… And Changing Their Eating Habits… And Changing Their Eating Habits
6
Paul Norman, President – Kellogg International Kellogg Company – 11/12/09
South Africa – Kellogg’s Corn FlakesSouth Africa – Kellogg’s Corn Flakes
• 55 years in the market• Most preferred corn cereal brand
among South Africa moms (a)
• Strongest brand loyalty levels in RTEC category driven by (b)
– “Most popular”– “Helps provide necessary
nutrients”– “Is made from quality
ingredients”
• 55 years in the market• Most preferred corn cereal brand
among South Africa moms (a)
• Strongest brand loyalty levels in RTEC category driven by (b)
– “Most popular”– “Helps provide necessary
nutrients”– “Is made from quality
ingredients”
A trusted, aspirational brandA trusted, aspirational brand
(a) 8 out of 10 moms prefer KCF (TNS Omnibus, 2008)(b) Attribute statements – drivers of advantage (Millward Brown)
Evolving our Message to Better Serve Consumer NeedsEvolving our Message to Better Serve Consumer Needs
2005“Modern Mealies”
2005“Modern Mealies”
2007“Achievement and
Performance”
2007“Achievement and
Performance”
2009“Missing Nutrients”
2009“Missing Nutrients”
7
Paul Norman, President – Kellogg International Kellogg Company – 11/12/09
Results –Successful incremental penetration Results –Successful incremental penetration
2004 – 2008+ 1 Million
households
IndiaIndia
8
Paul Norman, President – Kellogg International Kellogg Company – 11/12/09
• Convenienceand nutrition
• Urbanization
• Disposable income
• Modern trade
• Convenienceand nutrition
• Urbanization
• Disposable income
• Modern trade
Key TrendsKey Trends
• Nutritious / convenient alternatives at breakfast andafter school
• Nutritious / convenient alternatives at breakfast andafter school
Strong PortfolioStrong Portfolio
Mental performance• “Iron shakti”
Mental performance• “Iron shakti”
Weight managementWeight management Chocolaty funChocolaty fun
9
Paul Norman, President – Kellogg International Kellogg Company – 11/12/09
2007 2008 20092007 2008 2009
DistributionDistribution
10 Rps10 Rps
Accessible and AvailableAccessible and Available
+50% CAGR
Points of Sale
Invest to GrowInvest to Grow
20072007 20082008 20092009
Brand Building InvestmentBrand Building Investment
+35% CAGR
10
Paul Norman, President – Kellogg International Kellogg Company – 11/12/09
Significant Brand Building InvestmentSignificant Brand Building Investment
4X4XPenetrationPenetration
High DD%High DD%SalesSales
Results – Kellogg IndiaResults – Kellogg India
... and still plenty of room to grow!... and still plenty of room to grow!
2005 – 20082005 – 2008
11
Paul Norman, President – Kellogg International Kellogg Company – 11/12/09
• Attractive growth categories
• “Leverage the Power of K”
• Selected acquisitions / JVs
• $1B Challenge “Fuel for Growth”
• Attractive growth categories
• “Leverage the Power of K”
• Selected acquisitions / JVs
• $1B Challenge “Fuel for Growth”
Summary – Kellogg InternationalSummary – Kellogg International
Building an even stronger KelloggBuilding an even stronger Kellogg
