Kellanova

Good morning. Welcome to the Kellogg Company's fourth 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. Please note that this conference is being recorded, and at this time, I will turn the call over to John Renwick, Vice President of Investor Relations and Corporate Planning for the Kellogg Company. Mr. Renwick, you may begin your conference call.

Thank you, Gary. Good morning, and thank you for joining us today for a review of our fourth quarter and full year 2019 results, as well as our initial outlook for 2020. I am joined this morning by Steve Cahalan, our Chairman and CEO, and Amit Banati, 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 on Thursday, February 13th. 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. Additionally, please note that when we discuss the impact of last July's divestiture, we will be referring only to the absence of the divested businesses' net sales and profits. And now I'll turn it over to Steve.

Thanks, John, and good morning, everyone. 2019 is now in the books, and we're pleased with the progress we made. We stayed on strategy and on plan all year long, and we did what we said we would do right through Q4. And this was in spite of significant changes in investments made throughout the year, all aimed at building a solid foundation for steady, dependable financial delivery. The primary goal of 2019 was to return to organic finance net sales growth, and we did that. In fact, slide number five shows that we sustained our accelerated growth right through the fourth quarter. For the quarter and for the full year, this was our best organic net sales growth in several years. And this return to organic net sales growth is the strongest evidence that our Deploy for Growth strategy is working. We grew in all four quarters with full year growth in all four regions. We utilized revenue growth management to restore positive price realization in all regions. and we improved our in-market performance in key countries and categories. Even as we were delivering on our 2019 plans, we were busy driving important changes intended to build a foundation for the future. Some of these changes and investments are shown on slide number six. We significantly restructured our organization in 2019, starting with North America at the beginning of the year, followed by corporate and then the international regions. With reduced layers and fewer business unit silos, we can now assess resource allocation more holistically and make faster decisions. From a portfolio standpoint, we divested four businesses in a single transaction. This divestiture improves our portfolio's underlying growth rate and its profit margins, while enabling our organization to sharpen its focus on our core businesses. We also enhanced our financial flexibility by using the divestiture proceeds to pay down $1 billion of debt. And from an investment standpoint, we continue to expand and build scale in emerging markets. In addition to growing our existing businesses, we rapidly built up distribution of Kellogg noodles in Africa. We established local production of Pringles for the first time in Africa and Latin America, as well as noodles in Egypt and South Africa. and we shifted production of cereal in Brazil to a new, more efficient facility. There was some upfront capital and costs related to these moves, but they will facilitate profitable growth well into the future. All of these business and portfolio realignment actions were large and important, and they contribute greatly to the foundation we are building. It's also important that we delivered the results that we had guided to. Amit will go into more detail in a moment, but I want to emphasize that our return to dependability starts with doing what we said we do, and this includes delivering on our financial guidance. We plan to sustain this dependable performance in 2020, including a more balanced financial delivery. Again, Amit will walk you through the specifics in just a moment, but the key elements of this balanced plan are depicted on slide number seven. We plan to continue to grow our net sales organically in 2020 in the 1% to 2% range that we think is sustainable. It should feature a little more balance between volume and price mix, and again, it should be broad-based, and it should be led by our biggest, most differentiated brands. Second, we plan to improve our underlying profitability, swinging to operating profit growth, excluding the divestiture impact. We'll continue to gradually improve our gross profit margin as we continue to utilize revenue growth management, generate productivity savings in our supply chain, and complete the restoration of on-the-go margins. We'll also continue to manage our overhead tightly. Third, we will increase our investment behind our brands. Some of this increase is related to specific pullbacks we had to do in the first half of 2019 such as when we paused RX advertising during its supplier-related recall and paused investment in U.S. cereal as we harmonized pack sizes. And most of the increase is around new opportunities. For example, our launch of incognito ready-to-cook meat alternatives and our Pringles and Pop-Tarts commercials during the Super Bowl. In U.S. cereal, we're not just lapping the harmonization-related pullbacks, we're going all in on a comprehensive plan. And internationally, there are other promising product launches and expansions. These are all unique opportunities, and we are reinvesting the profit of a 53rd week this year to help offset this increase in investment. And finally, we'll continue to enhance our financial flexibility, not only by improving our cash flow, but also by using that cash flow after dividends for paying down debt. In short, we're planning for a more balanced delivery with prudent forecasts as we build a foundation for sustainable growth. So with that, let me turn it over to Amit, who will take you through our financial results and outlook in more detail. Amit?