Kellanova

Good morning. Welcome to the Kellogg Company second quarter 2019 earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer period. If you would like to ask a question during this time, simply press star and the number one on your telephone keypad. Please limit yourself to one question during the Q&A session. Thank you. At this time, I will turn the call over to John Renwick, Vice President of Investor Relations and Corporate Planning for Kellogg Company. Mr. Renwick, you may begin your conference call.

Thank you, Gary, and good morning, everyone. Thank you for joining us today for our review of our second quarter 2019 results and an update of our full year 2019 outlook. I am joined this morning by Steve Cahillane, our Chairman and CEO, and Amit Binati, our Chief Financial Officer. Slide number three shows our usual forward-looking statements disclaimer. As you are aware, certain statements made today, such as projections for Kellogg Company's future performance, are forward-looking statements. Actual results could be materially different from those projected. For further information concerning factors that could cause these results to differ, please refer to this third slide of the presentation, as well as to our public SEC filings. A replay of today's conference call will be available by phone through Thursday, August 8th. The call will also be available via webcast, which will be archived for at least 90 days. As always, when referring to our results and outlook, unless otherwise noted, we will be referring to them on a currency neutral basis for net sales and on a currency neutral adjusted basis for operating profit and earnings per share. And now I'll turn it over to Steve.

Thanks, John, and good morning, everyone. In a business turnaround, there's nothing more important than being able to continuously report back to our shareholders that we are executing our strategy as planned and that we are delivering our results as planned, and that's exactly what I have the opportunity to do here today. There is no more compelling evidence of this than in our organic net sales growth, which is shown in slide number five. Ever since we pivoted in Q4 2017 from our cost reduction phase and into an invest for growth phase, we have been committed to and demonstrating a gradual improvement in organic net sales growth. This is absolutely critical for long-term profit growth. It has required heavy lifting. We had to exit DSD and free up resources. We had to revitalize brands through repositioning and investment. We had an innovation pipeline that had to be refilled. And we had to shift our portfolio to faster growth categories and markets. And it's working. Q2 was the purest example of this, with organic net sales growth of more than 2%. And it's not just that this is our best organic growth since 2016. or even since 2012 if you exclude the inflationary benefits of Venezuela in prior years, it's the fact that this growth was broad-based with all four regions in growth. It's the fact that our enhanced capabilities in revenue growth management are yielding improved price realization in a year of notably high cost inflation. It's the fact that our innovation launches are off to a great start. And it's the fact that we are holding or gaining share in more of our categories than before. And what may be a surprise to many of you, it's the fact that we can post this kind of growth for the total portfolio even in a quarter when our closely watched U.S. cereal business declined meaningfully amidst a pack-size harmonization. This organic net sales growth is the truest sign that we're making strong progress in deploy for growth. But it's not our only sign of progress in Q2. Slide number six shows some more elements that you should be aware of. First, we've continued to reshape our portfolio. Just this week, we closed on the divestiture of our cookies, fruit snacks, pie crusts, and ice cream cones businesses. It's never easy saying goodbye to colleagues, but these brands are going to a more suitable home, and Ferrero is truly a world-class organization. For us, the closing of this divestiture means we now have a portfolio that is more focused on our most advantaged brands and categories than with a better growth profile and higher profit margins. Meanwhile, we continue to expand in emerging markets, particularly through snacking, not only because of successful acquisitions and partnerships, but also from geographic and product line expansion. We posted another quarter of good growth in Russia. We grew double-digit again as we expand in West Africa and the Middle East, and we continue to grow strongly in Brazil, led by our parity business. Second, we've seen improved in-market performance in developed markets as well. In particular, we are pleased to see the momentum in key snacks brands that we knew we had to revitalize. We'll talk more about these later. Third, our improved innovation pipeline is bearing fruit. As we've told you, our net sales from newly launched products in 2019 will be the highest in at least four years. But more importantly, they're doing well, particularly on new food platforms like Cheese It Snapped. Fourth, we've continued to grow in on-the-go offerings. Remember, this was a key priority for us as we take advantage of this growing occasion. We had another strong quarter of consumption growth in key U.S. snacks categories, and we continue to use single serve to reach affordable price points in emerging markets. Fifth, we've realized price. As I mentioned, this was important in an environment where we are facing our highest cost inflation in years. But it also gives you a read on how much we've improved our capabilities in revenue growth management. And lastly, we've realigned our business. I touched on this earlier, but it bears repeating because this isn't easy. Extracting stranded costs requires a complete rearranging of organization and processes. and you should feel good that we are proactively and immediately addressing this. We also took the opportunity to restructure our European business. Both should add to the agility and speed we have been seeking to enhance. So, another eventful quarter with continued progress. The profit will follow, particularly as we get past the initial heaviest investments and as we start to surmount our accelerated cost inflation and challenging cost comparisons. but we're building for the long term, and we like where we're headed. With that, let me turn it over to our new CFO, Amit Bhanati, who will take you through our financial results and outlook in more detail. Amit? Thanks, Steve.