Kellogg Company
November 20, 2015
Asia Pacific Represents an Exciting Growth Opportunity
• 4 billion people
• 70% of total global retail outlets
• One third of global GDP
• 7% of Kellogg’s business
Kellogg Company | November 20, 2015
Asia Pacific | 2
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Kellogg Company
November 20, 2015
CONSUMER
Asia Pacific Represents an Exciting Growth Opportunity
Socio-economic trends/
convenient foods
Growing middle class
High Frequency Stores /
Affordability / Price Points
Snacks, On-the-Go
& Customization
Exploding e-commerce
SHOPPER
70% of global CPG stores are in Asia Pacific,
multiple retail formats
Kids are
“Centre of the universe”
Kellogg Company | November 20, 2015
Asia Pacific | 3
We are Transforming the Region
• Strong leadership in place
• Balancing the portfolio
• Emerging markets,
Snacks driving growth
• Strategy in place
• Set to accelerate growth
Kellogg Company | November 20, 2015
Asia Pacific | 4
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Kellogg Company
November 20, 2015
Strong Team of Leaders with Deep Domain Experience
Amit Banati
President
Rebecca Boustead
Director Corporate
Comm. & Public
Affairs
Robert Chanmugam
Vice President
Finance
William De Kock
Senior Director
R&T
Shivendu Nadkarni Ramkumar Nedungadi Sangeeta Pendurkar Ankush Raisinghani
Managing Director
Managing Director
Managing Director
Vice President
AP Snacks
South East Asia
India
Human Resources
Yukari Inoue
Managing Director
Korea / Japan
Sunil Sethi
Vice President
Sales
Francois Joubert
Vice President
Supply Chain
Belinda Tumbers
Managing Director
ANZ
Shekar Khosla
Vice President
Marketing &
Innovation
Haiyan Wang
Managing Director
China
Kellogg Company | November 20, 2015
Gerald Mahinda
Managing Director
Sub-Saharan Africa
Padman Waran
General Counsel
Asia Pacific | 5
The Shape of the Region Has Transformed
Net Sales(a)
Australia /
ANZ
20%
ANZ
23%
New Zealand
20%
Asia /
ANZ
Sub-Saharan
50%
RestAfrica
of
AP 50%
50%ANZ 50%
Rest of AP
Asia / Sub-Saharan Africa
80%
80%
2011
2016
(a) Net sales on a pro-forma basis including joint ventures
Kellogg Company | November 20, 2015
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Kellogg Company
November 20, 2015
Emerging Markets, Snacks Driving Growth
Net Sales Growth(a)
+12.6%
+6.0%
+4.3%
+0.7%
2014
2015 Q3 YTD
Asia Pacific
Emerging Markets, Snacks
(a) Currency-neutral comparable net sales
Kellogg Company | November 20, 2015
Asia Pacific | 7
Achieving our Growth Potential
Global 2020 Growth Plan…
Win in Breakfast
Be a Global Snacking
Powerhouse
— Stabilize ANZ
— Double Pringles
— Accelerate EM Cereal
Category Development
— Stabilize ANZ
— Expand out-ofbreakfast consumption
Double our Emerging
Market Engine
— Double Asia, Triple
India
— Develop the
Wholesome Snacks
business in Asia / Africa
— Scale-up Africa
Win Where the
Shopper Shops
— Expand Reach in HFS
— Gain Share in Top 15
MT Customers
— Power Up e-Commerce
and Specialty
… coming to life in Kellogg Asia Pacific
Kellogg Company | November 20, 2015
Asia Pacific | 8
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Kellogg Company
November 20, 2015
We are Set to Accelerate Growth
MSD/HSD
Net Sales Growth(a)
Double the Asian
Business by 2020
LSD
Emerging
50%
Developed
50%
Scale Up
Africa
Emerging
75%
Double Asia/
Triple India
Double Snacks
Stabilize ANZ
Developed
25%
(a) Currency-neutral comparable net sales on a pro-forma basis including joint ventures / M&A
Kellogg Company | November 20, 2015
Asia Pacific | 9
Stabilize the Australia / New Zealand Business
Renovation
Innovation
Kellogg Company | November 20, 2015
Activation
Asia Pacific | 10
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Kellogg Company
November 20, 2015
Double the Size of the Snacks Business
Strengthen
the Brand
Expand
Consumption
• Commercial Innovation
• New Food (e.g. Tortilla)
• Renovation
• Snacking Price Points
• Brand Building
Win With
Shoppers
Wholesome
Snacks
• Emerging-Market
Expansion
• Emerging Market
Expansion
• Distribution Expansion
• Category Creation
• In-Store Execution
Ronnie Chua /
Shutterstock.com
Kellogg Company | November 20, 2015
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Accelerate Emerging-Market Cereal-Category Development
10 Step Category
Development Model
Kellogg Company | November 20, 2015
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Kellogg Company
November 20, 2015
Double the Size of the Asian Business
Japan / Korea
South East Asia
• Drive penetration & consumption
• Category development
• Parent-brand
• Distributor partnerships
• Explore M&A
Kellogg Company | November 20, 2015
Asia Pacific | 13
Double the Size of the Asian Business
China
• JV operational
• Category development
• Parent-brand
• Scale-up e-Commerce
Kellogg Company | November 20, 2015
Asia Pacific | 14
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Kellogg Company
November 20, 2015
Triple the Size of the Indian Business
Win Where the
Shopper Shops
Winning Portfolio
Investing in Capabilities
• Category development
• Expand distribution: depth and width
• Hots: oats, local grains
• Enhance MT shopper experience
• New occasions: on-the-go, lunchbox
• Speciality channels
• Parent-brand
• e-Commerce
• Setting up of emerging markets
breakfast R&D center
• Sricity plant
• “Soul of a start-up”
Kellogg Company | November 20, 2015
Asia Pacific | 15
Scale-Up the African Business
Tunisia
• Sub-Saharan Africa is a rapidly
growing emerging market
Algeria
Libya
Egypt
Mauritania
• Nigeria is the largest economy
in Sub-Saharan Africa
Mali
Niger
Chad
Burkina Faso
Sudan
Guinea
Nigeria
• Tolaram Group is among the top three food
companies in Nigeria and the fastest growing
Cote d’Ivoire
Equatorial
Guinea
• The creation of a joint venture between Kellogg Company
and Tolaram Africa to develop snacks and breakfast foods
for the West African market
• The acquisition of 50% of Multipro, a premier sales
and distribution company in Nigeria and Ghana
Ethiopia
Central
African Rep.
Dem.
Rep.
Congo
Kenya
Rwanda
Burundi
Tanzania
Angola
Zambia
Zimbabwe
Namibia
Botswana
6
Swaziland
Lesotho
South
Africa
Kellogg Company | November 20, 2015
Asia Pacific | 16
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Kellogg Company
November 20, 2015
Tolaram Africa
•
Top-3 Nigerian food company, largest packaged-breakfast business
– 60% value share of noodles category
– 70% of noodles consumed at breakfast
•
Exceptional performance
– ≈$700 million in sales
– Consistent double digit growth
•
Strong distribution in Nigeria and Ghana
– Unmatched reach, logistics capability
•
Dufil Prima
– Manufacturers and markets Indomie, Minimie and Power brands
– Vertical integration provides control and profitability
•
Multipro
– Sales and distribution for Dufil Prima, Arla Milk
– Freight and logistics (warehousing, trucks)
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Tolaram Africa – Unparalleled Presence
Kellogg Company | November 20, 2015
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Kellogg Company
November 20, 2015
Scale-Up the African Business
• Acquisition of 50% stake in Multipro
– 2015 estimated sales of ≈$700 million(a)
• Option to purchase a stake in Tolaram Africa
Foods (which owns 49% of Dufil Prima)
• Purchase price of ~$450 million
– ≈13x multiple of 2015’s expected EBITDA
• Creation of a 50:50 joint venture to develop
snacks and breakfast foods in West Africa,
and noodles in the rest of Africa
– Expect to create a ≈$100 million
business in the next 5 years
(a) Assumes exchange rate of 1 USD = 200 NGN
Kellogg Company | November 20, 2015
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Enabling the Growth
4 New Facilities
2 R&D Centers
Kellogg Company | November 20, 2015
Talent & Capability
Asia Pacific | 20
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Kellogg Company
November 20, 2015
We Are Set to Accelerate Growth
Net Sales Growth(a)
MSD/HSD
Double the Asian
Business by 2020
LSD
Emerging
75%
Double Asia/
Triple India
Emerging
50%
Developed
50%
Scale Up
Africa
Double Snacks
Stabilize ANZ
Developed
25%
(a) Currency-neutral comparable net sales on a pro-forma basis including joint ventures / M&A
Kellogg Company | November 20, 2015
Asia Pacific | 21
Summary – Asia Pacific
We are transforming the region
Significant organic growth
Enhanced by M&A
Scaling up Snacks, Asia, and Africa
More balanced, growth-oriented
portfolio
Committed to profitable growth
Kellogg Company | November 20, 2015
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