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Kellogg Starts $45M North American Supply Chain Upgrade

September 17, 2021

On September 3, 2021, Kellogg started a reorganization plan for the North America supply chain network, designed to drive increased productivity. The implementation of the reorganization plan is subject to satisfaction of any collective bargaining obligations. No production facilities are expected to be closed as a result of this plan, which instead involves shifting production of various products to optimal lines across the Americas network. The
overall project is expected to be substantially completed by early 2024, with related productivity improvements commencing in 2023 that can help offset cost inflation and reinvest in our brands.

The overall project is expected to result in cumulative pretax charges of approximately $45 million. Cash costs are expected to be approximately $25 million. The Company currently anticipates employee-related costs totaling approximately $4 million, which will include severance and other termination benefits; and other cash costs totaling approximately $21 million, which will primarily consist of charges related to capital expenses. Non-cash costs are expected to be approximately $20 million and primarily consist of accelerated depreciation and asset write-offs.

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