KELLOGG COMPANY ANNOUNCES SEPARATION OF TWO COMPANIES AS NEXT STRONG STEPS IN PORTFOLIO TRANSFORMATION (2023)

• The company plans to split into three separate companies by merging the US, Canada and...Caribbeangrain and crop-based companies, which together accounted for around 20% of net sales in 2021
• The rest of the business, which represented approximately 80% of net sales in 2021, is focused on global snacks, international cereals and pastas andNorth Americafrozen breakfast
• This transaction represents another bold step in Kellogg's portfolio transformation to further enhance performance and value.
• The proposed separations create a greater strategic, operational and financial focus for each company and its stakeholders and will build on Kellogg's current momentum.

BATTLE CREEK, Michigan.,21. June 2022/PRNewswire/ --Kellogg Company (NYSE:K) announced today that its Board of Directors has approved a plan to separate its North American plant-based foods and grains businesses through tax-exempt spin-offs, creating three separate public companies, each best positioned to serve to exploit all the independent potential. The three companies whose names will be determined later would be the following:

• "Global Snacking Co.", with approx.$11.4 billion* In net sales, it will be the leader in snacks worldwide, cereals and pasta internationally, andNorth Americafrozen breakfast with iconic world-class brands and strong underlying growth momentum and profitability;
• "North America Cereal Co.", mit ca$2.4 billion* in net sales, will be a leading cereal company in the US,Have, YCaribbean, with a portfolio of iconic world-class brands and compelling investment opportunities and earnings growth; AND
• "Plant Co.", mito ca$340 million* in net sales, will be a leading and profitable 100% plant-based food company, anchored in theGranja MorningStarBrand, with a significant opportunity to capitalize on the category's strong long-term prospects through new investment.North AmericaPenetration and future international expansion.

“Kellogg has been on a successful transformation journey to improve performance and increase long-term shareholder value. That included the transformation of our portfolio, and today's announcement is the next step in that transformation."steve cahillane, Chairman and CEO of the Kellogg Company. "All of these companies have significant potential in their own right, and increased focus will allow them to better align their resources across their various strategic priorities in this new era of innovation and growth."

Strategic rationale

In recent years, the company has transformed its portfolio into a geographically expanded portfolio and has moved into growing businesses, particularly in the snack food categories. To achieve this, the company has directed resources and investments into growth categories and markets around the world, has made multiple acquisitions and partnerships in emerging markets, and has strengthened its snack food business through acquisitions, divestitures, and freeing up resources by exiting the company. direct delivery. The successful execution of these actions has expanded Kellogg's portfolio, resulting in a scaled global snack business and a significant presence in emerging markets, complemented by strong and profitable plant-based breakfast and grocery businesses. The result of these strategic actions has been improved growth in recent years, with sustained momentum through 2022.

After several years of transformation and improved results, the company believes the time is right to separate these businesses to allow them to pursue their unique strategic priorities.

As independent businesses, the three companies will be best positioned to:

• Focus on your different strategic priorities with financial goals that best suit your own markets and opportunities;
• Execute with greater agility and operational flexibility, and allow for more targeted allocation of capital and resources consistent with those strategic priorities;
• Get better prospects for profitable growth; AND
• Create distinctive corporate cultures rooted in the strong values ​​of the Kellogg Company and rewarding career paths for employees at each company.

The three companies being discussed under tentative names are:

Global Snacking Co.
The proposed separations will result in one Global Snacking Co., which is expected to further expand its leadership position in global snacks, international cereals and pastas.North Americafrozen breakfast categories by directing investment and capital to take advantage of their strong momentum for growth and profitability.

The three international regions of the Kellogg Company:Europa,Latin America, YPacific Asia,middle East, YAfrica("AMEA") - will remain almost entirely within Global Snacking Co.steve cahillaneremains Chairman and CEO of Global Snacking Co.

general description

• Global Snacking Co. had estimated 2021 net sales of$11.4 billion* and estimated EBITDA of approx.$2.0 billion* On an adjusted basis, based on preliminary allocation assumptions.
• Nearly 60% of net sales come from global snacks, which participate in growing categories and are led by iconic world-class brands, includingPringles, Cheez-It, Pop-Tarts, golosinas Rice Krispies de Kellogg's, Nutri-Grain,YRXBAR, among others.
• Less than a quarter of net sales come from cereals in international markets with world-class brands such asKellogg's, Frosties / Zucaritas, Special K, Tresor / Krave, Coco-Pops y Crunchy Nut,among others. By remaining with Global Snacking Co., this international cereal business provides scale, continuity and growth for the company.Europa,Latin America, and AMEA regions.
• About 10% of net sales come from pastaAfrica, a fast growing company.
• The rest, less than 10% of net sales, comes from frozen breakfasts and world classEcobrand
• geographically,North Americawill account for just under half of net sales, with emerging markets approximately 30% of net sales and international developed markets more than 20% of net sales.

panorama

• This company is expected to be a higher growth company than the current Kellogg company, with a more growth-oriented portfolio and backed by more focused resources and attention to branding, innovation and international expansion of world-class brands, as well as the creation of scale in emerging markets.
• This business is expected to increase profit margins through operating leverage, managing revenue growth, productivity and increasing scale in emerging markets.

North America Cereal Co.
The Company plans to spin off North America Cereal Co. as an independent company through a tax-free spin-off. North America Cereal Co. is a leading cereal company in the United States,Have, YCaribbean, with beloved brands, a legacy of innovation and more than a century of operating success. As an independent company, North America Cereal Co. will have greater strategic focus and operational flexibility, directing capital and resources to unlock growth, regain category market share, and restore and expand profit margins.

The proposed management team for North America Cereal Co. will be announced at a later date.

general description

• North America Cereal Co. had estimated 2021 net sales of$2.4 billion* and estimated EBITDA of approx.$250 million* On an adjusted basis, based on preliminary allocation assumptions.
• The business focuses on ready-to-eat cereals in the US,Have, YCaribbean.
• The North America Cereal Co. portfolio consists of iconic world-class brands such as:Kellogg's,Frosted Flakes, Froot Loops, Mini-Wheats, Special K, Raisin Bran, Rice Krispies, Corn Flakes, KashiYbare bear.

panorama

• In the near term, North America Cereal Co. will focus on restoring inventory, profit margins and stock positions following supply disruptions in 2021.
• Ultimately, it will pool resources and strengthen the company by improving its portfolio, operational capabilities, and productivity.
• This business is expected to generate stable net sales over time, with improved margins driving earnings growth, higher cash flow and higher return on invested capital.

plant company
The Company intends to separate Plant Co. as an independent company through a tax-free spin-off while it evaluates other strategic alternatives, including a possible sale.

Anchored by leadershipGranja MorningStarPlant Co. will be a profitable and unique plant-based food company. This company offers a full portfolio of plant-based offerings across multiple product segments and dining settings. Kellogg's has grownGranja MorningStarSince its acquisition over 20 years ago, the brand has continued to evolve and now has the highest share and household penetration in the frozen vegetarian/vegan category.

The proposed management team for Plant Co. will be announced at a later date.

general description

• Plant Co. had estimated 2021 net sales of$340 millionand estimated EBITDA of approx.50 million dollars* On an adjusted basis, based on preliminary allocation assumptions.
• The business is currently focused on the US,Have, YCaribbean.

panorama

• As an independent company, Plant Co. will have the opportunity to build on its strong foundation of growth and profitability and focus its resources and investments on capitalizing on strong category prospects through awareness building and market penetration.North Americaand expand internationally in the future.
• The company is expected to accelerate net income growth over time based on previously published portfolio segment assumptions.

*All net sales and EBITDA figures on an adjusted basis are based on the company's unaudited 2021 results, derived from internal management reports, further adjusted for brand and market divisions and preliminary cost and expense allocations , including corporate expenses; these numbers are refined prior to transactions. Please note the reconciliations of Adjusted EBITDA, a non-GAAP financial measure, to operating income reported in this news release.

Headquarters locations

North America Cereal Co. and Plant Co. will continue to be headquartered in North AmericaBattle Creek, Michigan. Global Snacking Co. will have two locations inBattle CreekYChicago, Illinois, based in Chicago. The headquarters of the three international regions of the Kellogg Company inEuropa,Latin Americaand AMEA will remain in their current locations.

Transaction details, time and future updates

The proposed spin-offs are intended to result in tax-free distributions of shares in North America Cereal Co. and Plant Co. to Kellogg Company shareholders. Shareholders would receive interests in the two spun-off entities pro rata of their interests in Kellogg as of the record date of each spin-off.

We expect the North America Cereal Co. spin-off to precede the Plant Co. spin-off, both of which are currently scheduled for late 2023. Transactions will be subject to customary conditions, including reviews and final approval by Kellogg's board of directors, receipt of a preliminary ruling from the Internal Revenue Service and relevant tax opinions regarding the tax exemption of transactions, the effectiveness of relevant filings with the US Securities and Exchange Commission, and the completion of the audited financial statements of the independent companies.

Capital structures, dividends, governance and other matters for each company will be announced at a later date. Management is committed to maintaining an investment grade rating for Global Snacking Co. post spin-offs. In addition, the Company expects to maintain a strong overall dividend and return on capital profile across all three businesses. The separate capital structure and dividend policies for each company are expected to be competitive relative to their relevant peer groups.

The Company will incur pre-tax expenses in connection with the completion of the transactions and the incorporation of the companies. In order to provide information about ongoing business results, the Company will disclose these initial costs and exclude them from its results on an adjusted basis in its external reports.

Goldman Sachs, together with Morgan Stanley & Co. LLC, is acting as lead financial advisor and Kirkland & Ellis LLP is acting as legal advisor.

The company will provide updates throughout the process leading up to transactions. A dedicated website with continuous information about the transaction is available atliberandonuestropotencial.com.

Conference Call / Webcast

Kellogg Company will host a conference call/webcast this morning to discuss the strategic rationale, timing of the transaction and the resulting companies,21. June 2022, in9:00 a.m. m., Eastern Daylight Time. The conference call and accompanying presentation slides will be webcast live athttp://investor.kelloggs.com. You can also find information about replay athttp://investor.kelloggs.com.

About the Kellogg Company

At the Kellogg Company (NYSE:K), our vision is a good and just world, where people are not just fed, but fulfilled. We create better days and a seat at the table for everyone through our trusted grocery brands. Our popular brands includePringles®,Cheez-It®,Especial K®,Kellogg's Frozen Flakes®,pop-tarts®,Kellogg's Corn Flakes®,Crispy rice®,Eco®,mini wheat®,Kashi®,RXBAR®,Granja MorningStar® and more. Net sales in 2021 were almost$14.2 billion, which mainly consists of snacks and ready meals such as muesli, frozen foods and pasta. As part of our Kellogg's®better daysESG, we address the interconnected issues of well-being, climate and food security, creating better days for 3 billion people by the end of 2030. Visit uswww.KelloggCompany.com.

forward-looking statements

This press release contains a number of forward-looking statements. Forward-looking statements are predictions of future results or activities and may contain the words "expect", "believe", "will", "may", "anticipate", "estimate", "project", "should" or words or phrases of similar meaning Significance including, but not limited to: the anticipated separation of the Company's North American grains and plant-based foods business, future operating and financial performance, product development, market position and business strategy. Viewers are cautioned not to place undue reliance on these forward-looking statements. By their nature, forward-looking statements address matters that are, to varying degrees, uncertain and involve risks, uncertainties and assumptions. If one or more of these risks or uncertainties materialize, or if underlying assumptions prove incorrect, actual results may differ materially from those expressed or anticipated in such forward-looking statements. The inclusion of such statements should not be taken as a representation that such plans, estimates or expectations will be achieved. Important factors that could cause actual results to differ materially from such plans, estimates or expectations include (1) the ability to consummate the transactions described above and to satisfy the attached conditions, (2) the ability of the separate companies to be successful each as a separate public company, (3) potential uncertainty while the transactions are pending, which could affect the company's financial performance, (4) the possibility that the transactions will not occur on schedule, or not be completed, (5) the possibility that transactions will not achieve anticipated benefits, (6) the possibility of disruption, including changes in existing business relationships, disputes, litigation, or unanticipated transaction-related costs, (7) anticipated uncertainty in performance of the Company or of the separate companies after the closing of the transactions, (8) efe adverse events of the announcement depending on the transactions on the market price of the Company's securities and/or the financial performance of the Company, (9) evolving regulatory, regulatory and tax regulations, (10) changes in general economic conditions and/or industry, (11) actions of third parties, including government agencies, and (12) other risk factors identified from time to time in the company's SEC filings, including the company's annual report on Form 10- K, quarterly periodic reports on Form 10-Q, current periodic reports on Form 8-K, and other documents filed with the SEC. Copies of these presentations are available online atwww.sec.gov,www.investor.kelloggs.comor upon request to the company. The above list of important factors is not exclusive. All forward-looking statements in this press release speak only as of the date of this press release. The Company does not undertake any obligation to update any forward-looking statement as a result of new information or future events or developments.

Non-GAAP Financial Measures

In this press release, we sometimes use information derived from consolidated financial data based on preliminary allocation assumptions related to spin-offs, but that is not presented in our financial statements prepared in accordance with generally accepted accounting principles (GAAP). Some of these dates are applicable under the US Securities and Exchange Commission as "Non-GAAP Financial Measures." These non-GAAP financial measures supplement our GAAP disclosures and should not be viewed as an alternative to GAAP measures. Our management team consistently uses a mix of GAAP and non-GAAP financial measures to evaluate business results, make decisions about the future direction of our business, and make resource allocation decisions, including performance bonuses. As a result, we believe that the presentation of both GAAP and non-GAAP financial measures provides investors with greater transparency about the financial measures used by our management team, particularly in connection with spin-offs, and enhances investors' understanding of our performance. underlying operating. and in its analysis of ongoing operating trends. For important information regarding these measures, please refer to the table under "Reconciliation of Non-GAAP Amounts: Reported Operating Income and Adjusted EBITDA" in this news release.

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THOSE Kellogg Company