d5c41a25455d85722667b1b491700c4aabd8739ba6e3120215a1b57858a3ffbf

Kellanova, formerly known as Kellogg Company, is a global leader in the manufacture and marketing of snacks and convenience foods, operating in over 180 countries **[0001628280-24-005583_k-20231230.htm:2]** **[0001628280-24-005583_k-20231230.htm:50]**. The company produces a wide range of snacks, including crackers, savory snacks, toaster pastries, cereal bars, and bites, as well as convenience foods like ready-to-eat cereals, frozen waffles, veggie foods, and noodles **[0001628280-24-034156_k-20240629.htm:25]** **[0001628280-24-005583_k-20231230.htm:2]**. As the world's second-largest producer of crackers, Kellanova is also a leading producer of cereal, savory snacks, and frozen foods **[0001628280-24-005583_k-20231230.htm:132]**. The company operates through four geographic segments: North America, Europe, Latin America, and AMEA (Asia Middle East Africa), with North America being the largest contributor to net sales **[0001628280-24-044436_k-20240928.htm:29]** **[0001628280-24-005583_k-20231230.htm:132]**.

1. **Snacks** - Manufactures and markets a variety of snack products, including crackers, savory snacks, toaster pastries, cereal bars, and bites, making it the largest revenue contributor.
2. **Cereal** - Produces ready-to-eat cereals, catering to a wide range of consumer preferences and nutritional needs.
3. **Frozen Foods** - Offers a selection of frozen food products, including frozen waffles and veggie foods, providing convenient meal options.
4. **Noodles and Other Products** - Includes the production and sale of noodles and other convenience food items, expanding the company's diverse product portfolio.

20822991ae6b95cc255655dc0f008d7a58995dedf8a618ef4e2e39a2f29391d2

| Geographical Segment | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 |
|----------------------|---------|---------|---------|---------|---------|---------|---------|
| **North America** ($ million) | **2,388**    | **2,325**    | **2,329**    | N/A | **1,688**  **[0001628280-24-020015_k-20240330.htm:20]**  | **1,658**    | **1,673**    |
| **Europe** ($ million) | **604**    | **668**    | **616**    | N/A | **599**  **[0001628280-24-020015_k-20240330.htm:20]**  | **639**    | **660**    |
| **Latin America** ($ million) | **292**    | **336**    | **338**    | N/A | **314**  **[0001628280-24-020015_k-20240330.htm:20]**  | **333**    | **311**    |
| **AMEA (Asia Middle East Africa)** ($ million) | **770**    | **712**    | **657**    | N/A | **600**  **[0001628280-24-020015_k-20240330.htm:20]**  | **564**    | **590**    |

a9fb8325f0b288fbc50c0b4d8a58b7e991edae44212cc69167f21149cfe65ad0

| Product Segment | Q3 2024 | Q2 2024 | Q1 2024 | Q4 2023 | Q3 2023 | Q2 2023 | Q1 2023 | Q4 2022 |
|-----------------|---------|---------|---------|---------|---------|---------|---------|---------|
| **Snacks ($ million)** | **2,069**    | **2,069**  **[0001628280-24-034156_k-20240629.htm:24]**  | N/A | N/A | **2,040**  **[0001628280-23-037866_k-20230930.htm:24]**  | N/A | N/A | N/A |
| **Cereal ($ million)** | **690**  **[0001628280-24-044436_k-20240928.htm:29]**  | **689**  **[0001628280-24-034156_k-20240629.htm:24]**  | N/A | N/A | **1,368**  **[0001628280-23-037866_k-20230930.htm:24]**  | N/A | N/A | N/A |
| **Frozen ($ million)** | **276**  **[0001628280-24-044436_k-20240928.htm:29]**  | **262**  **[0001628280-24-034156_k-20240629.htm:24]**  | N/A | N/A | **281**  **[0001628280-23-037866_k-20230930.htm:24]**  | N/A | N/A | N/A |
| **Noodles and Other ($ million)** | **198**  **[0001628280-24-044436_k-20240928.htm:29]**  | **172**  **[0001628280-24-034156_k-20240629.htm:24]**  | N/A | N/A | **250**  **[0001628280-23-037866_k-20230930.htm:24]**  | N/A | N/A | N/A |

3897608490d1c4a52ea92329a55668f1256c2d04872c83a0ce1f7535c4f8fcff

14de7f289a00e81d9f29af007f86efbb1ca42aeeaee8c611cbdf8035c219c32e

1. Given that consumers are under significant pressure and your competitor has observed that price points above $4 lead to consumers exiting the category, do you agree that high price points are causing consumers to leave your categories, and how are you adjusting your price-pack architecture to address this issue?

2. With your gross margins improving as volumes remain constrained and retailers increasingly aware of vendors' margin growth, how are you balancing the drive to improve margins with feedback from retail partners concerned about pricing impacts on consumer affordability?

3. Are you seeing expected lifts from promotional activities now that you're returning to more normal levels of promotion off higher list prices, and how are these lifts compared to pre-pandemic levels in terms of effectiveness in driving volume?

4. Considering that many of your competitors and retailers are emphasizing the need for price investments to support consumers under pressure, why do you believe your business doesn't require additional price givebacks, and how confident are you that your current pricing strategy won't adversely affect volume and market share?

5. With European volumes under pressure due to decelerating pricing and economic challenges, how do you plan to drive growth and balance pricing and volume in this market, especially with upcoming innovations like the Cheez-It launch, and what is your outlook on trend improvements and exit rates in the region?

149710c89e25ee9a5954151b0f081b4c422a6e6afc7fd085a0558e29f9bdb5e7

Snacks

Cereal

Frozen

Noodles and Other

- U.S. Morning Foods

- U.S. Specialty

- North America Other

- Europe

- Latin America

- Asia Pacific

Total Revenue

d12905405ad59dcedd5ce6a1b7b4dad49c0bc4f4e777d10ca729acef243f408f

b80819059b95f158f1714137bdc70cbf8bac874314da954f91da2969dfbd5013

Adjustments for Non-Cash Items [USD, Millions]

Stock-Based Compensation [USD, Millions]

Changes in Working Capital [USD, Millions]

Capital Expenditures (CapEx) [USD, Millions]

Proceeds from / Repayments of Debt [USD, Millions]

Share Repurchases [USD, Millions]

Dividend Payments [USD, Millions]

Net Change in Cash [USD, Millions]

7b0b7db9243f92e1db594df52f0912e1340ebb68dc34f4410def887f3efd280c

a0e176b57aa60aece42585dce5a46c7777fe23ce95fa9dbe7a160ea59eb4ec7a

### Q2 2024 Earnings Call
- **Issued Period**: Q2 2024
- **Guided Period**: FY 2024
- **Guidance**:
  - **Net Sales**: Organic growth of about **3.5%** for the full year, excluding a currency translation headwind of about **7%**  **[K_3395655_4]** .
  - **Operating Profit**: Adjusted basis operating profit of **$1.85 billion to $1.9 billion**, with margin expansion reaching above **35%** for gross margin and about **14%** for operating margin  **[K_3395655_4]** .
  - **Earnings Per Share (EPS)**: Adjusted basis EPS of **$3.65 to $3.75**  **[K_3395655_5]** .
  - **Free Cash Flow**: Just above **$1 billion**  **[K_3395655_5]** .
  - **Effective Tax Rate**: Mid-**22%** range  **[K_3395655_5]** .

### Q1 2024 Earnings Call
- **Issued Period**: Q1 2024
- **Guided Period**: FY 2024
- **Guidance**:
  - **Net Sales**: Organic growth of **3% or better**, excluding a currency translation headwind of about **7%**  **[K_3382099_4]** .
  - **Operating Profit**: Adjusted basis operating profit of **$1.85 billion to $1.9 billion**, with a negative currency translation impact of **2% to 3%**  **[K_3382099_4]** .
  - **Operating Profit Margin**: Over **14%**  **[K_3382099_4]** .
  - **Earnings Per Share (EPS)**: Adjusted basis EPS of **$3.55 to $3.65**  **[K_3382099_4]** .
  - **Free Cash Flow**: Approximately **$1 billion**  **[K_3382099_5]** .

### Q4 2023 Earnings Call
- **Issued Period**: Q4 2023
- **Guided Period**: FY 2024
- **Guidance**:
  - **Operating Profit**: **$1.85 billion to $1.9 billion**, with a negative currency translation impact of approximately **2%**  **[K_3372435_5]** .
  - **Operating Margin**: **14%** in 2024, with a medium-term goal of **15% by 2026**  **[K_3372435_5]** .
  - **Earnings Per Share (EPS)**: Adjusted basis EPS of **$3.55 to $3.65**  **[K_3372435_5]** .
  - **Effective Tax Rate**: **23%**  **[K_3372435_5]** .
  - **Interest Expense**: About **$310 million**  **[K_3372435_5]** .
  - **Other Income**: Around **$50 million**  **[K_3372435_5]** .
  - **Free Cash Flow**: Approximately **$1 billion**  **[K_3372435_5]** .
  - **Net Sales Growth**: **3% or better**  **[K_3372435_4]** .

### Q3 2024 Earnings Call
- **Issued Period**: Q3 2024
- **Guided Period**: N/A
- **Guidance**: The documents do not contain information from the Q3 2024 earnings call, so the guidance metrics from that specific period are unavailable.

da43166aa9095d95a40c7824ee7f04259b635a1f427b8c5cc375b86111485646

| Name               | Position                                      | Start Date       | Short Bio                                                                                                                                                                                                                                                                                                                                                     |
|--------------------|-----------------------------------------------|------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Steven A. Cahillane| Chairman, President, and CEO                  | October 2017     | Steven A. Cahillane has been the **Chairman of the Board** since March 2018 and has served as **President and CEO** since October 2017. He previously held leadership roles at Nature’s Bounty Co. and The Coca-Cola Company  **[0001628280-24-005583_k-20231230.htm:10]** **[0000055067-24-000010_k-20240303.htm:16]** .                                                                                                                        |
| Amit Banati        | Vice Chairman and CFO                         | July 2019        | Amit Banati has been the **Vice Chairman and CFO** since July 2019 and was appointed Vice Chairman in January 2023. He joined Kellanova in March 2012 as President of Asia Pacific, later expanding his responsibilities to include the Middle East and Africa  **[0001628280-24-005583_k-20231230.htm:9]** **[0001628280-23-004299_k-20221231.htm:9]** .                                                                                       |
| Chris Hood         | Senior VP & President, Kellanova North America| N/A              | Chris Hood serves as the **Senior VP & President, Kellanova North America**. He will be retiring from the company in **April 2024**  **[0000055067-24-000010_k-20240303.htm:39]** **[0000055067-24-000007_k-20240223.htm:40]** .                                                                                                                                                                                                                   |
| David Lawlor       | Senior VP & President, Kellanova Europe       | July 2018        | David Lawlor is the **Senior VP & President of Kellanova Europe**. He began his career at Kellanova in 1991 and has held several senior roles, including General Manager of Kellogg Russia  **[0001628280-24-005583_k-20231230.htm:11]** **[0001628280-23-004299_k-20221231.htm:10]** .                                                                                                                                                           |
| Shumit Kapoor      | Senior VP & President, Kellanova AMEA         | July 2020        | Shumit Kapoor has been serving as the **Senior VP & President, Kellanova AMEA** since July 2020. Before joining Kellanova, he was the Regional President, Pet Nutrition, Asia Pacific for Mars Inc.  **[0001628280-24-005583_k-20231230.htm:11]** .                                                                                                                                                     |
| Gary Pilnick       | Former Vice Chairman and Chief Legal Officer  | N/A              | Gary Pilnick joined Kellogg Company in September 2000 and served in various roles until October 2023, when he became the CEO of WK Kellogg Co following the spin-off  **[0001628280-23-004299_k-20221231.htm:11]** **[0000055067-24-000007_k-20240223.htm:68]** .                                                                                                                                                                                  |
| Kurt D. Forche     | Vice President and Corporate Controller       | July 2018        | Kurt D. Forche is the **Vice President and Corporate Controller**. He joined Kellanova as an internal auditor in 1997 and has held various finance roles  **[0001628280-24-005583_k-20231230.htm:10]** **[0001628280-23-004299_k-20221231.htm:9]** .                                                                                                                                                                                             |
| Melissa A. Howell  | Senior VP, Global Human Services              | June 2016        | Melissa A. Howell has been serving as the **Senior VP, Global Human Services** since June 2016. Before joining Kellanova, she was the Chief Human Resources Officer for Wolverine  **[0001628280-24-005583_k-20231230.htm:10]** **[0001628280-23-004299_k-20221231.htm:10]** .                                                                                                                                                                    |
| Charisse Hughes    | Senior VP, Chief Growth Officer               | May 2023         | Charisse Hughes has been the **Senior VP, Chief Growth Officer** since May 2023. She joined Kellanova in 2020 as Chief Marketing Officer and has held various marketing and brand leadership roles  **[0001628280-24-005583_k-20231230.htm:10]** .                                                                                                                                                      |
| Nicolas Amaya      | Senior VP & President, Kellanova North America| February 1, 2024 | Nicolas Amaya is the **Senior VP & President of Kellanova North America**. He joined Kellanova in 2001 and has held various leadership roles in the U.S. and Latin America  **[0001628280-24-005583_k-20231230.htm:9]** .                                                                                                                                                                               |
| Kris Bahner        | Senior VP & Chief Global Corporate Affairs Officer | April 2023   | Kris Bahner is the **Senior VP & Chief Global Corporate Affairs Officer**. She joined Kellanova in 2006 and has over 30 years of experience in Corporate Affairs within the food industry  **[0001628280-24-005583_k-20231230.htm:9]** .                                                                                                                                                               |
| Rodrigo Lance      | Senior VP, Global Supply Chain                | March 2022       | Rodrigo Lance has been the **Senior VP, Global Supply Chain** since March 2022. He began his career at Kellanova in 1997 and has held various roles, including Plant Manager in multiple locations  **[0001628280-24-005583_k-20231230.htm:11]** **[0001628280-23-004299_k-20221231.htm:10]** .                                                                                                                                                   |
| Victor Marroquin   | Senior VP & President, Kellanova Latin America| February 2024    | Victor Marroquin was appointed as **Senior VP & President of Kellanova Latin America** in February 2024. He joined Kellanova in 1997 and has held various leadership positions across Latin America  **[0001628280-24-005583_k-20231230.htm:11]** .                                                                                                                                                     |
| John Min           | Senior VP and Chief Legal Officer             | October 2023     | John Min has been the **Senior VP and Chief Legal Officer** since October 2023. He joined Kellanova in 2010 and has worked in various areas, including food safety and regulatory compliance  **[0001628280-24-005583_k-20231230.htm:12]** .                                                                                                                                                           |

fc82e70aae8ac9fd9f373787b62eb6326d0f417b504018c89b6fae415fb8b4a2

| Program Details          | Program 1       |
|--------------------------|-----------------|
| Approval Date            | December 2022  **[0001628280-24-044436_k-20240928.htm:63]** **[0001628280-24-044436_k-20240928.htm:14]** **[0001628280-24-044436_k-20240928.htm:47]**  |
| End Date/Duration        | Through December 2025  **[0001628280-24-044436_k-20240928.htm:63]** **[0001628280-24-044436_k-20240928.htm:14]** **[0001628280-24-044436_k-20240928.htm:47]**  |
| Total additional amount  | **$1.5 billion**  **[0001628280-24-044436_k-20240928.htm:63]** **[0001628280-24-044436_k-20240928.htm:14]** **[0001628280-24-044436_k-20240928.htm:47]**  |
| Remaining authorization amount | **$1.3 billion** (as of 2024-09-28)  **[0001628280-24-044436_k-20240928.htm:63]** **[0001628280-24-044436_k-20240928.htm:14]** **[0001628280-24-044436_k-20240928.htm:47]**  |
| Details                  | For general corporate purposes and to offset issuances for employee benefit programs  **[0001628280-24-005583_k-20231230.htm:101]** **[0001628280-23-037866_k-20230930.htm:9]** **[0001628280-24-044436_k-20240928.htm:63]** **[0001628280-24-034156_k-20240629.htm:49]** **[0001628280-24-020015_k-20240330.htm:42]** **[0001628280-23-037866_k-20230930.htm:50]** **[0001628280-23-027251_k-20230701.htm:46]** **[0001628280-23-015761_k-20230401.htm:39]**  |

70621461b296bd2240db615d9e3e78c9bb7d9011af6f0bd57eb651311eee9463

| Name                        | Start Date | End Date | Reason for Change |
|-----------------------------|------------|----------|-------------------|
| PricewaterhouseCoopers LLP | 1937  **[0001628280-24-005583_k-20231230.htm:140]**    | Present  | Current auditor   |

7b94a32edbca18d16152c0365cde0d03d244de88983b2260055ec6f2759a7dfc

- **Currency devaluation in Nigeria is worse than expected**, negatively impacting sales growth and profitability in that region.  **[K_3382099_17]**
- **Volume declines in North America remain a headwind**, and profit growth in Q1 included one-time benefits that may not repeat in future quarters.  **[K_3382099_24]** **[K_3382099_18]** **[K_3382099_16]**
- **Private label brands are gaining share in key categories like crackers and potato chips**, potentially eroding Kellogg's market share.  **[K_3382099_12]**

62dbe7c52ee0e21ba883ebb655c198603d267b51eac26cf8cdbb0262bc8349c8

6310d26982acf5da38fd7ed90ecb8a6a18e2c8a90b08c1a2dad3e076138786d4

23794d91c53ae875c8e247d72561e35d9d06ee07c70c9e0dbcc977a6d161504a

- Total Revenue: $3,233 million (−18% YoY)  **[0001628280-24-044436_k-20240928.htm:29]**   
- Cereal Segment: $690 million (**−49%** YoY)  **[0001628280-24-044436_k-20240928.htm:29]**   
- Noodles & Other: $198 million (−21% YoY)  **[0001628280-24-044436_k-20240928.htm:29]**   
- North America: $1,673 million (−28% YoY)  **[0001628280-24-044436_k-20240928.htm:36]**   
- Europe: $660 million (+7% YoY)  **[0001628280-24-044436_k-20240928.htm:36]**   
- Net Income: $367 million (up from $27 million, **+1,259%** YoY)  **[0001628280-24-044436_k-20240928.htm:29]**   
- Diluted EPS: $1.05 (+33% YoY)  **[0001628280-24-044436_k-20240928.htm:29]**   

1748d246daee485d81477feafc40ce9aca854e33c0d9b58d0659ffc134e27840

08eb7c432d12676ac354fa1b795720eb63698a73c9275a46457b4db1e875a0bb

| Year | Amount Due (in millions) | Debt Type               | Interest Rate (%) | % of Total Debt                                                                 |
|----------|------------------------------|-----------------------------|-----------------------|------------------------------------------------------------------------------------|
| 2024     | $678                         | Current maturities of long-term debt | N/A                   | 11.6% = (678 / 5,853) * 100 **[0001628280-24-044436_k-20240928.htm:2]**                                               |
| 2024     | $124                         | Notes payable               | N/A                   | 2.1% = (124 / 5,853) * 100 **[0001628280-24-044436_k-20240928.htm:2]**                                               |
| 2025     | N/A                          | 1.250% Senior Notes         | 1.25                  | N/A **[0001628280-24-044436_k-20240928.htm:0]**                                                                      |
| 2029     | N/A                          | 0.500% Senior Notes         | 0.50                  | N/A **[0001628280-24-044436_k-20240928.htm:0]**                                                                      |
| 2033     | $400                         | 5.25% Notes                 | 5.25                  | 6.8% = (400 / 5,853) * 100 **[0001628280-24-044436_k-20240928.htm:47]**                                               |
| 2034     | €300                         | 3.75% Notes                 | 3.75                  | N/A **[0001628280-24-044436_k-20240928.htm:15]**                                                                      |
| 2054     | $300                         | 5.75% Notes                 | 5.75                  | 5.1% = (300 / 5,853) * 100 **[0001628280-24-044436_k-20240928.htm:15]**                                               |

3df66f2d6aa1c2580a95c7cd48a79c79987e59b986027c1c3def75b23b1ec458

d56cd3fa8f03abc0b04598ae4b8263b09bef121cd98ee1ac4e76bb2ac348631f

- **Volumes continue to lag despite strong revenue growth driven by pricing**, with management acknowledging that **elasticities have risen due to consecutive mid-teens price increases**, and that they returned to merchandising and innovation activity later than competitors. This may indicate **sustainability concerns over revenue growth without volume support**.  **[K_3365145_13]**
- **Weakness in U.S. sales**, with scanner data showing a **4.5% decline in U.S. measured channels**, suggesting that **North America is lagging** and the company relies heavily on international markets to meet growth targets. This raises concerns about the company's ability to achieve its long-term growth algorithm across all segments.  **[K_3365145_14]** **[K_3365145_12]**
- **Currency headwinds are expected to have a negative impact on top-line growth**, with management projecting **a 3% drag on net sales** in the fourth quarter due to foreign currency translation, similar to the third quarter. This continues to exert pressure on reported financial results.  **[K_3365145_27]** **[K_3365145_14]**

d72295ce5fcc9eb675467c3de7fb34ee66991b2ed3e92d4683e6a431c95c8df7

1. **Margin Outlook**  
   **Q:** What's your margin progression plan and confidence in targets?  
   **A:** We expect to improve our margins significantly, moving from a **12%** margin in 2023 to **14%** in 2024, aiming for **15%** by 2026. This confidence is driven by network optimization projects, growth in our top five brands—which comprise **50%** of sales and have higher margins—scale in emerging markets, and a return to full productivity in our supply chain.  **[K_3372435_23]** 

2. **Gross Margin Improvement**  
   **Q:** How are gross margins expected to evolve in 2024?  
   **A:** Gross margins have improved better than expected, reaching **34%** in Q4. We anticipate approaching **35%** in 2024. This improvement is driven by a well-performing supply chain, cost reductions, wraparound pricing benefits, and slightly deflationary input costs. We expect gross margin progress to be fairly balanced across the quarters.  **[K_3372435_18]** 

3. **Impact of Innovation on North America Sales**  
   **Q:** How will innovation and merchandising affect North America sales growth?  
   **A:** Returning to stronger innovation and merchandising throughout the year should drive low single-digit organic sales growth in North America. After a pullback in 2023, we're launching many more innovations across brands like Pringles, Cheez-It, Pop-Tarts, and Rice Krispies Treats. Momentum will grow cumulatively, becoming most notable in the third quarter, exiting the year with strong momentum.  **[K_3372435_11]** ,  **[K_3372435_21]** ,  **[K_3372435_22]** 

4. **Reorganization and Plant Closure**  
   **Q:** What's behind the reorganization in frozen and cereal businesses?  
   **A:** We're closing an underutilized plant in the UK and moving production to more efficient facilities, focusing on driving effectiveness and efficiency now that we have the bandwidth post-pandemic. These straightforward programs will contribute to cost savings and improved operations.  **[K_3372435_17]** 

5. **TSA Reimbursements and EBIT Growth**  
   **Q:** How do TSA reimbursements affect EBIT growth in 2024?  
   **A:** TSA reimbursements are about **$40–$50 million** per quarter in 2024, reflecting services we're providing to W.K. Kellogg Co. As these services conclude, both the costs and reimbursements will drop off. The year-over-year EBIT growth rate appears higher due to having four quarters of reimbursements in 2024 versus one in 2023, but it's mainly a timing effect from the spin-off.  **[K_3372435_24]** ,  **[K_3372435_25]** ,  **[K_3372435_27]** 

6. **FX Impact on Guidance**  
   **Q:** Does your operating profit guidance include currency headwinds?  
   **A:** Yes, our operating profit guidance includes a currency headwind of approximately **2%** at today's rates. This impact is built into the dollar numbers we've provided.  **[K_3372435_10]** ,  **[K_3372435_26]** 

7. **International Expansion of Cheez-It**  
   **Q:** What's the plan for expanding Cheez-It internationally?  
   **A:** We're launching Cheez-It in major European markets in the back half of the year, following successful launches in Canada, Brazil, and Mexico. While it's a long-term play not expected to materially impact top-line in the near term, we anticipate Cheez-It becoming a much bigger international brand over the next five years.  **[K_3372435_18]** 

2d7a4212f2432e1eb718cf3abe0bb7ab4eab5b1332b69f01139df46fd12d416c

- **$K is ahead of pace in the first 9 months of 2023** and is on track with its projections, indicating strong underlying business performance.  **[K_3365145_10]**
- The company expects **international growth to outpace the U.S. in the next quarter**, with **emerging markets** showing strong performance, offsetting any temporary lag in North America.  **[K_3365145_14]** **[K_3365145_12]**
- Management expresses **optimism for 2024**, with plans to return to full merchandising and ambitious innovation, particularly in North America, suggesting potential for improved performance and growth.  **[K_3365145_13]** **[K_3365145_12]**

b3d63dd9a604f08a86dc909d85813191873b208849cedbac4840b3c7a9d24965

1. **North America Volume Growth**  
   **Q:** What's driving North America's sustained volume improvement?  
   **A:** The volume growth in North America is driven by the return to full commercial activation, led by **Pringles**, with increased distribution and innovation back to pre-pandemic levels.  **[K_3395655_9]**  The company is also engaging in rational price promotion, similar to pre-pandemic activity.  **[K_3395655_9]** 

2. **European Outlook and Growth**  
   **Q:** How is Europe performing amidst volume pressures?  
   **A:** Despite a tough environment, Kellogg expects continued growth in Europe, led by snacks like **Pringles** and the upcoming **Cheez-It** launch in the UK.  **[K_3395655_10]**  Back-half plans include football sponsorships and activations that will accelerate growth in the third and fourth quarters.  **[K_3395655_10]** 

3. **Latin America Performance**  
   **Q:** How did Mexico and Brazil perform this quarter?  
   **A:** Latin America had a good quarter with growth in cereals and snacks.  **[K_3395655_12]**  **Mexico** achieved record cereal market shares, and **Pringles** performed well despite capacity constraints.  **[K_3395655_12]**  In **Brazil**, despite devastating floods, the underlying business remains strong, driven by **Pringles**.  **[K_3395655_12]** 

4. **Nigeria Volume Decline**  
   **Q:** What's the situation with Nigeria's volume declines?  
   **A:** In Nigeria, volumes declined in the **high teens** while price/mix increased over **40%** year-on-year due to price increases and currency devaluation.  **[K_3395655_16]**  The consumer is under strain, and elasticities are impacting volumes, but this is factored into forecasts with potential upside.  **[K_3395655_16]** 

5. **Gross Margins and Retailer Relations**  
   **Q:** How do you balance margin growth with retailer concerns?  
   **A:** Kellogg is improving gross margins through productivity and resolving prior bottlenecks.  **[K_3395655_19]**  They are increasing brand-building investments, which help retailers drive volume, aiming for mutual growth rather than focusing on margin share.  **[K_3395655_19]** 

6. **North America Pricing Strategy**  
   **Q:** Is price sensitivity affecting your North America portfolio?  
   **A:** Absolute price points are crucial as consumers face pressure.  **[K_3395655_13]**  Kellogg focuses on entry price points and price-pack architecture to meet consumer needs, especially for households under **$100,000** with kids.  **[K_3395655_13]** 

7. **Innovation Pipeline**  
   **Q:** Are you back to pre-pandemic innovation levels?  
   **A:** Innovation levels have returned to pre-pandemic levels and are expected to improve.  **[K_3395655_20]**  This includes launches like **Cheez-It** and **Pringles Mingles**, with more innovations planned for next year.  **[K_3395655_20]** 

8. **Competitive Investments**  
   **Q:** Do you expect returns amidst competitors' increased investments?  
   **A:** Kellogg sees the environment as rational and is confident in achieving returns similar to pre-pandemic levels.  **[K_3395655_22]**  They focus on brand building and innovation to meet consumer needs, maintaining confidence despite competitors' actions.  **[K_3395655_22]** 

9. **Inflation Outlook**  
   **Q:** Is inflation still neutral for the year?  
   **A:** There is no change in outlook; costs are neutral to slightly inflationary as expected.  **[K_3395655_18]**  Inflation is being managed, and costs are in line with projections.  **[K_3395655_18]** 

10. **Second Half Operating Profit**  
    **Q:** Any pressures affecting second-half operating profit?  
    **A:** Gross margin progression will moderate due to lapping prior benefits.  **[K_3395655_17]**  Bottlenecks and shortages are resolved, and brand-building investments will moderate compared to last year's ramp-up in the second half.  **[K_3395655_17]** 

11. **Promotional Activity Returns**  
    **Q:** How are promotional lifts trending?  
    **A:** Promotional lifts are improving as price discovery settles.  **[K_3395655_24]**  Investments are yielding better returns, and Kellogg expects returns similar to pre-pandemic levels in the back half and into next year.  **[K_3395655_24]** 

12. **Need for Price Investment**  
    **Q:** Why don't you need more price investment?  
    **A:** Kellogg feels confident in their current strategy, having raised guidance following a strong second quarter.  **[K_3395655_23]**  They believe they don't need additional pricing actions beyond what is already in place.  **[K_3395655_23]** 

13. **Measuring Consumption Growth**  
    **Q:** Will North America consumption return to growth?  
    **A:** Growth is expected in measured channels as investments in brands like **Cheez-It**, **Rice Krispies Treats**, **Pop-Tarts**, and **Eggo** roll out.  **[K_3395655_15]**  Non-measured channels like Canada and away-from-home are already showing strong growth.  **[K_3395655_15]** 

14. **Excluding Nigeria, Volume Growth**  
    **Q:** Do you expect volume growth excluding Nigeria?  
    **A:** Excluding Nigeria, Kellogg expects volume growth in most regions in the second half.  **[K_3395655_21]**  Nigeria is impacting volumes due to planned price increases and elasticities.  **[K_3395655_21]** 

15. **Pringles Mingles Launch**  
    **Q:** How meaningful is the Pringles Mingles launch?  
    **A:** **Pringles Mingles** is not expected to significantly impact this year's sales but is more focused on activation in the first quarter of next year.  **[K_3395655_14]**  The product tests extremely well, extending the Pringles brand outside the can.  **[K_3395655_14]** 

16. **Guidance Timing**  
    **Q:** Will you provide 2025 guidance next quarter?  
    **A:** Kellogg typically releases guidance during their February earnings report.  **[K_3395655_20]**  They will discuss innovations and plans for 2025 at that time.  **[K_3395655_20]** 

84d775db675ec487fcba2f876f621bb50198b82de4c2bb2a9e103e9791d218d6

- **Heightened price sensitivity among consumers, especially households under $100,000 income with kids, is leading to consumers exiting categories when price points exceed certain levels, potentially impacting sales**  **[K_3395655_13]** .
- **Competitors are increasing their investments and promotional activities in the back half of the year, which may pressure Kellanova's returns on investments and market share**  **[K_3395655_22]** .
- **Retailers are increasingly aware of vendors' gross margin growth amid constrained volumes, which could lead to pressure on Kellanova to lower prices or increase promotions, potentially impacting profitability**  **[K_3395655_19]** .

2e896bbebb4136d50e4aac86ac333ed1a23ed15ae64d195aa69ad615bc19730e

1. **2024 Long-Term Algorithm**  
   **Q:** Will you achieve long-term algorithm growth in 2024?  
   **A:** Management expects to be on their long-term algorithm growth rates in 2024, expressing confidence in meeting targets shared in August. Specific details will be provided in February after completing the budgeting process  **[K_3365145_9]** ,.  **[K_3365145_10]** 

2. **Volume Growth Outlook**  
   **Q:** Can we expect volume growth in 2024?  
   **A:** They anticipate a **gradual return to volume growth** in 2024, especially as they lap previous price increases and return to full merchandising and innovation activities.  **[K_3365145_16]** 

3. **North America Performance**  
   **Q:** Will North America meet the long-term algorithm next year?  
   **A:** While North America lagged due to a later return to merchandising and the spin-off, management is **optimistic about improved performance** in 2024 with a more ambitious innovation plan and return to quality merchandising activities.  **[K_3365145_12]** 

4. **Margin Improvement Sustainability**  
   **Q:** Are the margin improvements sustainable going forward?  
   **A:** Margin recovery is driven by **pricing offsetting inflation** and a **better-performing supply chain**. While margins are recovering faster than expected, specifics for 2024 will be provided after budgeting.  **[K_3365145_17]** 

5. **Impact of Pricing on Volumes**  
   **Q:** How is pricing affecting your volumes compared to peers?  
   **A:** Significant pricing actions led to expected **volume elasticity**. They returned to merchandising and innovation **later than competitors**, impacting volumes. There's **nothing structural** affecting performance, and they remain optimistic for 2024.  **[K_3365145_13]** 

6. **Currency-Neutral Targets Validity**  
   **Q:** Are the previous currency-neutral targets still valid?  
   **A:** They expect to be on long-term growth algorithms but will update absolute figures in February, considering currency impacts and completion of 2023 results  **[K_3365145_19]** ,.  **[K_3365145_20]** 

7. **AMEA Pricing and Currency Impact**  
   **Q:** How are currency headwinds affecting AMEA growth?  
   **A:** Pricing actions have been taken to cover devaluations, notably in Nigeria. Despite a lag between operating devaluation and official rates, the business continues to grow **double digits organically**, with volumes holding up despite pricing.  **[K_3365145_26]** 

8. **Capital Allocation and M&A**  
   **Q:** What's your stance on M&A given current leverage?  
   **A:** They prioritize investments in **organic growth opportunities**, especially capacity expansion for Pringles in emerging markets. They continue to evaluate M&A opportunities in **snacking** and **emerging markets** but emphasize a disciplined approach.  **[K_3365145_23]** 

bcbc5849164fc65176b6ef391f9725eb2fa3bd6aed3f00297f6b1157bda37e41

1. **Consumer Outlook and Volume Trends**  
   **Q:** Where will volume growth come from amid consumer pressure?  
   **A:** Despite a pressured consumer, we believe volume potential remains real as caloric consumption hasn't materially decreased.  **[K_3382099_20]**  By investing in our brands and full commercial activation, we're confident in capturing volume as consumers adjust to new price points and behaviors normalize.  **[K_3382099_20]** 

2. **Margin Improvement and Expectations**  
   **Q:** How will volume leverage and pricing impact margins?  
   **A:** Improved supply chain performance and volume leverage will contribute to gross margin expansion above **35%** this year, though not at Q1's rate.  **[K_3382099_26]**  While price/mix moderates, operational efficiencies and better volume trends support margin growth.  **[K_3382099_26]** 

3. **Supply Chain Performance**  
   **Q:** How is supply chain performance affecting results?  
   **A:** Our supply chain is performing at pre-pandemic high levels, improving service and enabling us to return to full merchandising activities, which boosts confidence in volume recovery.  **[K_3382099_25]** 

4. **Capital Allocation and M&A Outlook**  
   **Q:** Are you pursuing M&A given low leverage?  
   **A:** With a strong balance sheet and decreasing net debt, we have capacity for acquisitions that create shareholder value.  **[K_3382099_15]**  We're focused on snacks and open to opportunities both domestically and internationally, while also investing organically in brands like Pop-Tarts and expanding Pringles capacity.  **[K_3382099_15]** 

5. **TSA Impact on Earnings**  
   **Q:** What's the effect of TSA revenue on earnings?  
   **A:** TSA reimbursement was around **$45 million**, benefiting EBIT, with about **$35 million** impacting gross profit.  **[K_3382099_12]**  This will start decreasing in Q2 as we transition distribution centers, and will anniversary by Q4.  **[K_3382099_12]** 

6. **Guidance and Outlook**  
   **Q:** Given strong Q1, why no guidance raise?  
   **A:** It's only the first quarter, so uncertainties remain.  **[K_3382099_14]**  However, strong results allow us to reinvest more in areas like route-to-market, digital transformation, and brand building, setting up for exceptional performance without altering guidance yet.  **[K_3382099_14]** 

7. **Volume and Pricing Balance**  
   **Q:** Is volume improving at expense of pricing?  
   **A:** We're seeing better volume performance as we return to full merchandising and consumers adapt to price points.  **[K_3382099_23]**  We expect a better balance between volume and pricing, leading to gradual recovery and share improvements without significant price concessions.  **[K_3382099_23]** 

8. **Cheez-It International Expansion**  
   **Q:** What's the plan for Cheez-It overseas growth?  
   **A:** We're excited about Cheez-It's prospects internationally, with launches in Canada, Mexico, and Brazil, and upcoming in the U.K. this year.  **[K_3382099_27]**  We're building a market-by-market playbook to ensure successful expansion into 2025 and beyond.  **[K_3382099_27]** 

9. **Private Label Competition**  
   **Q:** How is private label impacting your categories?  
   **A:** We don't see meaningful moves in private label within our categories.  **[K_3382099_10]**  While there may be some movement in portable wholesome snacks, overall there's not much impact when analyzing the full data.  **[K_3382099_10]** 

10. **SNAP Benefits Impact**  
    **Q:** Will lapping SNAP reductions aid performance?  
    **A:** Yes, lapping the worst of SNAP benefit reductions and other pressures on lower-income consumers should lead to improving trends in the back half, aiding volume recovery.  **[K_3382099_11]** 

f742f6bd93b08d03aace4ea270d90a6a0bbdc37cd0ec1bd5a2e16a06c1f85d86

- **Negative industry trends are causing rising price elasticities, putting pressure on volume**, and it may take a "couple of quarters before these negative industry trends abate".  **[K_3372435_1]**
- **Weak U.S. retail performance**, with **"retail tracking data looks very, very weak in the U.S."**, and recovery is expected to be gradual throughout the year, with significant improvements not until the third quarter.  **[K_3372435_11]**
- **Heavy reliance on emerging markets**, especially in Africa, where **substantial pricing is needed to cover devaluating currency and shipments were unusually strong**, accounting for about "half of that [net sales growth] came from our Africa joint ventures".  **[K_3372435_3]**

f5cd94ef788e1743f0b5a48d08a130b594c080f839929c7c34e7db50733b54ad

- **Improving volume performance and market share in North America:** The company is experiencing better volume performance, driven by a return to full merchandising activity, reinvestments in brands, and share improvements in the marketplace. This gives them confidence for continued growth in the back half of the year.  **[K_3382099_23]** **[K_3382099_24]**
- **Successful international expansion of key brands:** Kellogg is excited about the international prospects for **Cheez-It**, with launches in **Canada, Mexico, Brazil**, and plans for a European launch, particularly in the **U.K.**, in **2024**. Initial research on product and positioning is very strong, indicating significant growth potential.  **[K_3382099_27]**
- **Strong balance sheet enabling strategic investments:** With decreasing net debt and leverage ratios, the company has the capacity to pursue **M&A opportunities** that create shareholder value. They are also investing in high-ROI organic growth initiatives, such as expanding **Pringles** capacity by building **two new factories** in Latin America and Asia.  **[K_3382099_15]**

a279b6dd59028f038b9f39560e66688bbc46189208602f3a23e393cf19180863

- **Improving volume growth across regions**, with North America and Latin America returning to positive volume growth in the second quarter. The company expects this trend to continue, driven by innovation launches and increased brand investment.  **[K_3395655_21]** **[K_3395655_15]**
- **Strong performance in emerging markets**, particularly in Mexico, where the company achieved **record cereal shares** and Pringles is performing extremely well despite being capacity constrained. Local sourcing in Mexico next year is expected to alleviate capacity constraints and drive further growth.  **[K_3395655_12]**
- **Rational pricing environment enabling focus on innovation and brand building**. The company reports that promotional investments are starting to yield better returns, and expects a good balance between price, mix, and volume in the second half. This strategic focus is anticipated to drive growth and margin expansion.  **[K_3395655_23]** **[K_3395655_24]** **[K_3395655_22]** **[K_3395655_11]**

a04bb67e58428b7d3de5a2599d92a78229ac1df931efea04d312c9d6457e7f83

Kellanova (K)

Financials