Kellanova

Hello everyone and welcome to the Kellogg Company's fourth quarter 2021 earnings call. My name is Daisy and I'll be the operator for today's call. Please note all lines have been placed on mute ahead of the call to avoid any background noise. 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 now begin your conference call.

Thank you. Good morning, and thank you for joining us today for a review of our fourth quarter and full year 2021 results, as well as comments regarding our outlook for 2022. I'm joined this morning by Steve K. Helene, our Chairman and CEO, and Amit Banati, our Chief Financial Officer. Slide number three shows our 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 the third slide of this presentation, as well as to our public SEC filings. This is a particular note during the current COVID-19 pandemic and supply and labor disruptions, when the length and severity of these issues and resultant economic and business impacts are so difficult to predict. A recording of today's webcast and supporting documents will be archived for at least 90 days on the investor page of KelloggCompany.com. As always, when referring to our results in Outlook, unless otherwise noted, we will be referring to them on an organic 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. I think we can all agree that 2021 was yet another unprecedented year. In addition to lapping an unusually strong 2020, we managed through an operating environment that was more challenging than any other that we can remember. The pandemic persisted, requiring a sustained focus on employee safety, giving back to our communities, and working differently. Bottlenecks and shortages on everything from labor to materials to freight impeded supply across the global economy and created incremental costs and inefficiencies that were difficult to plan for. Finally, there was one more extreme challenge in 2021, the acceleration of cost inflation to levels the industry hadn't seen in a decade. Our particular situation was complicated further by a fire in one of our U.S. cereal plants, followed by a labor strike across all four U.S. cereal plants. The fire further strained our network and our ability to build inventory, which served to worsen the situation when we experienced the labor strike. We are pleased to have our team back to work. Strikes are painful for everyone, and not only did this strike affect our employees' lives, it also had a near-term financial impact on the company. It negatively impacted sales and profit in the fourth quarter of 2021, and it will have carryover cost impacts in quarter one 2022. It will also have sales impacts through the second quarter as we continue to rebuild inventories. In the end, though, we did what we believe was right for the business over the long term. Working through these challenges required extraordinary efforts by our employees, who clearly rose to the occasion. From safety precautions and volunteerism to incredible agility and creativity by our supply chain to the actions we took to help mitigate the profit impact of high costs, including productivity initiatives and revenue growth management actions, we executed well. The result was delivery of the 2021 guidance we had been raising or reaffirming since early in the year. even despite the labor strike extending well beyond what we had incorporated into our latest guidance. So we're in good condition as we head into 2022. Our international regions continue to demonstrate very strong momentum, each growing ahead of their long-term targets and featuring strong in-market performance and responsible price realization. In North America, our snacks and frozen businesses are showing momentum. with two-year compound annual growth and consumption led by leading world-class brands. The capabilities we enhanced in recent years are paying off. Our data and analytics capabilities are making our marketing dollars go further. Our e-commerce capabilities are sustaining momentum in that emerging channel. Our innovation pipeline is as strong as ever, and you can see how our capabilities around revenue growth management have improved just by looking at the strength of our price mix performance. Our cash flow remains strong. benefiting from discipline on restructuring outlays, prioritization of capital investment, and strong management of core working capital. Along with AD leverage balance sheet, this gives us financial flexibility, enabling us to increase the cash we return to share owners and keep our powder dry for potential M&A opportunities. We have some work to do. Economy-wide bottlenecks and shortages persist, and after our supply was further disrupted by the fire and strike, We are in the process of recovering production, inventory, and service levels, as well as commercial programs in that business. And as you'll hear in a moment, we are guiding toward another year of balanced growth, even as we take a prudent planning stance toward the current operating environment. Importantly, we remain on our strategy, Deploy for Balanced Growth, which is depicted on slide number seven. This strategy continues to keep us on our path for steady, balanced financial delivery. It is designed to accommodate evolving industry conditions, and it is working. And equally importantly, we remain committed to our values as a company. We don't merely strive to grow. We strive to grow the right way. Accordingly, we continue to make progress on better days, our ESG-oriented program. Just a few better days highlights from quarter four are shared on slide number eight. As you can see, we remain active in this area, both behind the scenes with donations and sustainability work, but also leveraging some of this good work in our commercial activation. Let me now turn it over to Amit so he can take you through our financial results and outlook in more detail.