Good morning. Welcome to the Kellogg Company's Fourth Quarter 2020 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session with publishing analysts. At this time, I will turn the call over to John Renwick, Vice President of Investor Relations and Corporate Planning for Kellogg Company. As a reminder, this call is being recorded. Mr. Renwick, you may begin your conference call.

Good morning and thank you for joining us today for a review of our four quarter and full year 2020 results as well as a discussion regarding our outlook for 2021. I'm joined this morning by Steve Cahillane, our Chairman and CEO; and Amit Banati, our Chief Financial Officer. Slide 3 shows our forward-looking statements disclaimer. And 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. This is of particular note during the current COVID-19 pandemic when the length and severity of the crisis 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 and 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 hope you and your families are holding up well in these turbulent times. Certainly, 2020 was an extraordinary year and I'm incredibly proud of how our organization responded to and executed during a business environment that was anything but business as usual. Keeping our employees safe remains job one and this has required investment and changes to the way we work. Supplying the marketplace with food required agility, contingency planning and creative ways to increase production. Not to mention the courage and dedication of our frontline workers. In aiding our communities a key element of our company's culture and legacy was accelerated during the crisis and it has been especially heartwarming to see our employees giving their time and effort to the cause. We also preserved and improved our financial flexibility. These have been our priorities during the crisis and we've been executing well against all of them. And even while having execute against crisis management priorities, we also over delivered on our financial commitments. We did our best to provide you with guidance during the year despite an uncertain environment. And I trust that transparency was helpful to you. We ended up raising that guidance twice during the year, ultimately hitting or exceeding that guidance with our quarter four and full year results even after absorbing $20 million in one-time costs related to redeeming debt late in the year. This is the kind of dependability we are striving for. We set out this year to return to balance financial growth, meaning balance between top-line growth, margin expansion and cash flow conversion. And sure enough through all the unusual impacts divestiture impact, COVID impacts, 53rd week, we did return to balance financial growth in 2020. Strong organic net sales growth even if you exclude a reasonable estimate for COVID net benefit and expansion in gross profit margin despite incremental COVID-related costs; growth and operating profit even despite losing about six percentage points from the mechanical impact of last year's divestiture; a better than expected increase in cash flow featuring a significantly improved conversion of net income; even excluding COVID net benefits we returned to balance financial growth in 2020 right on schedule. We executed very well in market. The pandemic presented us with a sampling event like none other and we saw increases in household penetration that outpaced most of our categories, giving us an excellent opportunity to communicate to and retain new and lapsed consumers. And we outgrew most of our categories holding or gaining share of categories representing more than 80% of our net sales in those measured markets. Our emerging markets are a key long-term growth driver for us and they represent over 20% of our net sales. In 2020 they were severely tested by pandemic related shutdowns, economic slowdowns, even social unrest and yet they delivered high single digit organic net sales growth for us in 2020, even accelerating from the prior two years growth rates. This is a real testament to our portfolio, our local supply chains and our experienced management teams in these markets. In short, the business performed very well in 2020 and we will take that momentum into 2021. Throughout the crisis, we have been working to ensure that there are lasting impacts from 2020 that should increase confidence in our ability to deliver consistent, dependable balanced growth over time. I'll discuss just a few of them here. One is communicating with new and lapsed households. Rather than giving up on A&P, we couldn't execute in the first half. We shifted that budget and investment to the second half, focusing on advertising to these new and lapsed users. And we've leveraged advanced data and analytics to target those households and occasions. This gives us our best opportunity to retain an expanded consumer base. We know that online shopping for food experienced a step change in 2020. Our triple digit growth in ecommerce sales was made possible by the brands in our portfolio and by our recent years investment in infrastructure and capabilities. This will continue to benefit us. We're investing in our supply chain. This includes sustaining enhanced safety protocols that carry with them higher costs. But the crisis also resulted in us increasing our supply chains agility and reducing complexity with the exiting of certain non-core product lines and tail SKUs. And it accelerated our expansion of capacity in areas that were already tight before this pandemic hit. This two will benefit us in 2021 and beyond. Enhanced financial flexibility is another lasting benefit. Improved cash flow generation and the prioritization of debt reduction resulted in deleveraging our balance sheet faster than we had anticipated. As Amit will discuss in a moment, this financial flexibility puts us in a position to resume dividend increases and share repurchases earlier than previously planned, returning more cash to share owners. And lastly, we remained solidly on track for consistent balanced growth. Even amidst the crisis, our focus was on what is best for sustainable growth. In addition to sustaining our solid top-line growth, we have organizational focus on improving gross profit margin, increasing the return on our brand building investment and discipline on overhead. There will be noise and uncertainty around the pandemic and its impacts. But in the spirit of transparency, we will continue to provide you guidance on our planning stance today. Our guidance for 2021 indicates balanced growth on a two year basis, attempting to smooth out 2020s unusual events and to ensure that we remain on our balanced trajectory. So with that, let me turn it over to Amit, who will take you through our financial results and outlook in more detail.

Thanks, Steve. Good morning, everyone. In a year of unprecedented uncertainty, we consistently kept you apprised of our planning stance, raising our guidance twice during the year. And as shown on Slide number nine, we ultimately achieved or exceeded that guidance with the results we announced today. This improving outlook across the year reflected the impact of elevated at home consumption, of course, but it also reflected the strength of our underlying business and our return to balance growth. Let's first review our 2020 results, which are summarized on Slide number 10. As I mentioned, our results for the first quarter came in better than expected, organic net sales growth moderated to 2.5% in quarter four, slightly better than we had forecast and finished the year with 6% growth as guided. Currency neutral adjusted basis operating profit increased slightly year-on-year in the fourth quarter, which was better than we had forecast for a quarter with double-digit, brand building investment, incremental COVID costs and higher performance based compensation. We finished the year with currency neutral adjusted basis, operating profit growth of 3.5%, which is higher than our guidance and includes roughly 6% negative impact from the absence of businesses we divested in 2019. Currency neutral adjusted basis earnings per share declined year-on-year in quarter four owing to a higher tax rate and shares outstanding as well as absorbing $20 million of non-recurring costs related to our debt redemption we executed in December as part of our effort to deleverage our balance sheet. For the year, our earnings per share grew 2.5% which excludes roughly 5% negative impact from the absence of divested businesses. Finally, our cash flow of nearly $1.5 billion was much higher than projected, featuring higher earnings and a higher conversion of those net earnings. In all, a strong performance and the kind of balanced financial delivery we aimed for. Let's take a look at these metrics in more detail. We'll start with net sales growth on Slide number 11. On organic basis, net sales growth decelerated, as expected in quarter four, coming in at 2.5%. A few factors to point out, at home consumption growth rates around the world remain elevated, not decelerating as much as expected. Away from home declines remained in double digits, though not moderating as much as expected. We experienced adverse timing of shipments in certain categories in the U.S. relative to that sustained consumption growth and we experienced the business specific headwinds that we had anticipated, such as school closings in Northern Africa and October's civil unrest in Nigeria. Nevertheless, we saw organic growth in all four regions, again, in quarter four. Outside of organic basis growth, we saw adverse currency translation moderate from earlier in the year, reflecting the weakening of the U.S. dollar, since quarter three. And this year, our quarter four included an extra week, something we have every six fiscal year. For the full year, our organic net sales growth was 6%, featuring growth in both volume and price mix and with growth in all four regions and all four major category group, Snacks, Cereal, Frozen, and Noodles and other. A reasonable estimate for the net COVID impact, after its various puts and takes would suggest that it contributed about half of this organic net sales growth in 2020 putting our underlying growth at a very strong rate. Rounding out net sales growth for 2020, we roughly lost five percentage points from the absence of businesses, we had divested back in July 2019. Currency translation was offset by the impact of having the extra week in our fourth quarter. Now let's turn our discussion to profit margins with Slide number 12. As we've discussed, as we entered 2020, our goal was to stabilize gross profit margin, which would require offsetting a natural mix shift towards emerging markets, including our distributor business in Africa. We ended up doing better than that even as that mix shift continues. Specifically, our gross profit margin improved by 60 basis points year-on-year as operating leverage, revenue growth management and productivity initiatives more than offset the impact of more than $60 million of incremental direct COVID related costs. In the fourth quarter, gross margin leveled out because of shipment turning in the U.S. and some incremental costs, particularly in Latin America. But we are pleased with how we performed on this metric in 2020. Our operating profit margin also improved in 2020 but its quarter-by-quarter performance was greatly affected by the timing in our investment in advertising and consumer promotion. Recall that we postponed some advertising and a significant amount of consumer promotions during the first half. When sponsored events were canceled and the industry's focus was on getting food onto shelves. As you know, we decided to put that default spending to work in the second half, primarily in advertising, aimed at building brand equity and retaining household penetration. The result was double-digit increases year-on-year in A&P during quarter three and quarter four as increased advertising more than offset decreased consumer promotions. For total A&P, we finished 2020 right on our budget with a mid-single digit increase year-on-year. That brings us to cash flow and the balance sheet on Slide number 13. Cash flow came in higher than anticipated throughout the year, a combination of our increased operating profits and reduced restructuring outlays along with good working capital management. The result was a significant improvement in our conversion ratio of net income into cash flow. As you know our priority for cash flow during 2019 and 2020, was to reduce our debt leverage after several years of acquisitions and restructuring outlays. This became all the more important as we entered an uncertain economic environment amidst the pandemic. Our stronger than expected cash flow allowed us to reduce debt faster than planned, right up to the $1.2 billion of debt we retired in December. This reduction in debt leverage gives us the financial flexibility to return more cash to share owners, as I'll discuss in just a moment. So let's now turn our attention to 2021 starting with Slide number 14. In forecasting our P&L for 2021, we ensured that we remained on track for steady balanced growth. Obviously, though, 2020 is an unusual base year to say the least. Not only did it have an extra shipping week in quarter four, but the pandemic created unusually high sales and operating leverage, especially in the first half and it also resulted in investment being shifted to the second half. Our stance was to plan for two year growth that keeps us on our strategic plan. Specifically, we planned around assumptions that result in two-year growth in organic net sales growth that is more than 2%; gross profit margin expansion on a two-year basis; and two-year growth in currency neutral operating profit of 3% to 4% excluding of divested businesses results from the 2019 base. Obviously, we've made planning assumptions around COVID, which are as follows. Underlying at home demand remains relatively elevated, but lapse unusual surges in quarter one and quarter two. Away from home demand remains depressed though moderating over the course of the year and emerging markets remaining growth though restrained by challenging macro conditions. But as you can see by the red bars on the slide, our underlying base business, excluding the divestiture COVID and the 53rd week, is expected to post another year of net sales and operating profit growth. And on a two-year basis, which effectively ignores the noise of 2020, we remain right on our strategic plan through 2021 and would call for similar balanced performance in 2022. Slide number 15 puts our 2021 guidance all together. Organic net sales are expected to be down about 1% year-on-year, reflecting the difficult comps in the first half. On a two-year compound annual growth though this translates to roughly 2.5% in line with a strategic plan I mentioned earlier. Adjusted operating profits on a currency neutral basis is projected to be down roughly 2% year-on-year, reflecting difficult comps in the first half related to last year's outsized operating leverage and delayed brand investment. On a two-year CAGR and excluding divested businesses from the 2019 base, this translates into roughly 3% to 4% growth in line with our strategic plan. Adjusted earnings per share on a currency neutral basis is expected to increase by approximately 1% year-on-year, aided by a decrease in interest expense caused by reduced debt and by lapping last year's debt redemption costs. On a two-year basis, excluding the impact of the divestiture from 2019 this implies about a 4% to 5% CAGR. Cash Flow is projected to be about $1.1 billion coming off 2020s exceptional $1.5 billion, but still significantly higher than 2019s cash flow of $600 million, which really was about 900 million when excluding the net of the divested businesses cash flow less the divestiture related tax and other outlays. This 2021 forecast is based on the earnings outlook and some timing of payments, such as performance based compensation accrued in 2020 but paid in 2021. Turning to Slide number 16, we entered 2021 in very solid financial condition. We had growth momentum across our region, as evidenced by consumption and share trends. We did not pull back on brand investment in 2020. So our brands are in good health. We benefited from strength and capabilities in digital data and analytics and ecommerce and we are well on our way to expanding capacity, where it's tight. We've improved our ability to convert income into cash flow and we deleveraged our balance sheet for increased financial flexibility. The combination of this improved business condition and enhanced financial flexibility enabled us to review share repurchases this year, after having refrained from them since quarter 1, 2019. In addition, we are increasing our quarterly dividend rate starting in quarter two. This means returning more cash to share owners and it reflects our confidence in the business. In summary, in 2020, we returned to balance growth between top-line margins, bottom-line and cash flow. We are confident that 2021 will be a continuation of this balanced growth, even if 2020s COVID impact and 53rd week create some noise on a one year basis. And with that, let me turn it back to Steve for a review of each of our major businesses.

Thanks, Amit. Let's begin with North America in Slide number 18. North America's organic net sales growth decelerated as expected in quarter four but in a different way than we projected. Consumption growth in retail channels decelerated only modestly, as another wave of the pandemic set in. However, related to this was less moderation of declines in a way from home channels and on-the-go products. In addition, we did experience some unexpected shipment timing in quarter four, which likely resulted in trade inventory decreases in certain categories in the U.S., notably crackers, cereal and affordable wholesome snacks. We don't think this is anything other than timing between quarters some of which should come back in quarter one. From a financial standpoint, the quarter and year featured balanced growth. On an organic basis, which excludes the impact of 2019s divestiture, but also 2020s 53rd week, Kellogg North America delivered 5% net sales growth in 2020, with both volume and price mix contributing. Meanwhile, we expanded the region's gross profit margin and grew operating profit even while increasing brand building investment to ensure we are retaining new households and adding to our brands long-term equity. No question it was a very strong year for Kellogg North America. Importantly, we saw growth across our category groups in 2020 as shown on Slide number 19. In each of these category groups, there were headwinds in the form of sharply lower away from home occasions and outlets as well as reduced on-the-go occasions. The good news is that elevated at home demand and a consumer preference for brands accelerated our retail channel growth in each of these category groups. This is a tribute to the strength of our brands, but also to the agility and execution of our team. Innovation launches were impeded but we still launched successes like jumbo snacks and cereal, expanded into new segments like we did with Incogmeato in alternatives and built on the runaway success of Cheez-It Snap'd. Marketing programs had to be postponed early in the year. So we revised our commercial plan, we shifted more of our brand building into advertising and we put to work in the second half the investment dollars we couldn't execute in the first half. Ecommerce growth accelerated throughout the industry in 2020 and our recent years investments and capability building paid off in the form of triple-digit growth in 2020. The result was more than 3% organic net sales growth for our largest business snacks, despite a lack of on-the-go occasions to go with notably strong 7% growth in cereal and 8% growth in Frozen, all despite declines in away from home channels. More important is our performance in market depicted on Slide number 20. As you can see, we held our gains share in four of our six primary categories in 2020, including in quarter four. Even in the two categories where we didn't outpace the category, we grew consumption at a double-digit rate. And this overall performance came despite running up against capacity on certain foods and despite having a sizable business and the types of on-the-go foods and pack formats that have declined during the pandemic. In cereal, we executed less promotional activity for Frosted Flakes in quarter four as we caught up on supply which held us back late in the year. But we're pleased with our overall consumption growth in 2020 and particularly by the responsiveness of key brands to new messaging, such as Mini-Wheats, Raisin Bran and Special K and to resume media support such as Apple Jacks and Corn Pops. In snacks, our share gain in crackers came from Cheez-It growth in both the base business and from the Snap'd innovations impressive year two performances. Pringles growth accelerated as the year progressed, gaining share in quarter four behind the strength of its standard size can and core four flavors. We grew consumption in a declining portable wholesome snacks category led by sustained momentum in Pop-Tarts, and Rice Krispies treats, as well as the resurgence of Nutri-Grain backed by its first media campaign in several years. In Frozen, Eggo continued to well outpace its Frozen from the griddle category. And in veggie foods, MorningStar Farms tested the bounds of capacity and growing consumption nearly 26% and it narrowed its gap to the surging category in quarter four as we increased its production. So clearly, we are competing well across our categories. A potentially lasting impact is the household penetration. We gained as shown on Slide number 21. With the exception of portable wholesome snacks, a category affected by reduced on-the-go occasions during the pandemic, we gained penetration in all of our categories. In fact, we outperformed our categories in this area in all but the Frozen veggie foods category, where we face capacity limitations and the entrance of new players. This increased penetration is promising for future growth and a big reason we elected to reinvest in our brands in the second half. Equally important is the fact that our velocities have increased across all our categories. As shown on Slide number 22, our velocities were already above those of almost all of our primary categories going into the year and they improved further in 2020. This is a very good sign regarding the health of our brands. In summary, North America enters 2021 in very good condition. Good in market fundamentals, well invested brands, momentum in ecommerce, a proven agility amidst very uncertain conditions, and better than expected financial performance. As we look to 2021, we will continue to relieve capacity constraints while continuing to invest in communicating to incremental households and resuming a full flight of innovation. While comparisons get a little distortive, especially between March and August, the results should be sustained in market momentum. Now let's discuss our international businesses starting with Europe on Slide number 24. For Kellogg Europe, quarter four was our 13th consecutive quarter of organic net sales growth. A resurgence in COVID cases and restrictions, reaccelerated cereal categories across the region and we gained share overall by outpacing the category in four of our top five markets. This was led by a particularly impressive performance in the U.K., and by some of our biggest brands in the region, like Crunchy Nut, Tresor and Extra. Importantly, our snacks business returned to growth in quarter four. Recall that in quarter two and quarter three, we'd experienced softness in snack shipments related to COVID and difficult economic conditions in markets like Russia, and then a canceled Euro Cup soccer tournament made it more difficult to lap previous year's enormously successful Pringles summer marketing programs. During quarter four, our Pringles business rebounded nicely. And we finished 2020 with a collective share gain in our top eight markets led by each of our top three markets, the U.K., Germany and Russia. From a financial perspective, it was a strong year for Kellogg Europe, even amidst disruptions and costs related to COVID. In addition to the strong 5% organic net sales growth, our gross profit margin improved, allowing us to increase brand investment and still deliver strong operating profit growth, even excluding the 53rd week. So Europe enters 2021 with good momentum. Our snacks business is on the upswing and we have exciting innovation planned for Pringles including a line of sizzling hot flavors and our commercial plan includes exciting activation around gaming and the rescheduled Euro Cup soccer tournament. While cereal categories will likely decelerate as COVID passes and mobility increases, we are actively investing to retain new households gained. We have a great commercial plan, including a multi-brand campaign around wellbeing the launch of a Strawberry Cocoa Puffs and a strong digital activation around key brands like Crunchy Nut, Extra and Tresor just to name a few. Russia and Central and Eastern Europe remain promising opportunities for expansion even amidst the challenging environment presented by COVID and economic slowdown. We look to reaccelerate growth in this business in 2021. Let's turn to Latin America in Slide number 26. We had another strong quarter in this region. Its quarter four profit decline had been expected owing to some one-off costs related to Mexico labeling regulations and a significant year-on-year increase in brand building. What was impressive was its ability to sustain very strong top-line growth amidst challenging conditions and delivered double-digit operating profit growth for the year. Cereal category growth rates in the region continued to decelerate but remained at elevated levels. We outpaced the category in key markets including Mexico, Puerto Rico, Central America and Argentina. The result was strong net sales growth for cereal across all of our sub regions. Our snacks business saw improvement again in quarter four, accelerating our net sales growth in Latin America, even as these categories remain under pressure amidst COVID and economic softness. Pringles posted strong consumption growth and share performance led by Mexico and by Brazil, which continues to benefit from local production in a new strategic distributor. Also in Brazil, our Parati business continues to gain share in cookies and powder drinks. So Kellogg, Latin America has momentum going into 2021. Snacks growth should be led by continued momentum in Pringles, which is in a good position to build on its expansion in Brazil and adding to our snacks offerings, we've just launched Cheez-It in that market. In cereal, we assume continued deceleration in the pandemic related consumption growth and we continue to navigate through Mexico's regulatory environment. Nevertheless, we have good plans in place and aim to continue to outpace our categories. And we'll finish with a discussion about EMEA shown on Slide number 28. As we told you a few months ago, our business in this region faced two primary headwinds in the form of civil unrest that disrupted all commerce in Nigeria during the last couple of weeks of October and school closings in Northern Africa, which effectively canceled a sizable biscuits business for us in quarter four. Together, these likely expect about five percentage points off EMEAs Q4 net sales growth. But behind these known disruptions, we continued positive performance. We continue to grow our noodles and other business in Africa and the Middle East, with momentum sustained through the fourth quarter and full year net sales approaching a billion dollars. This gives our portfolio a low price point staple with terrific opportunity for continued growth. In cereal, we continued to outpace category growth in the regions behind effective commercial programs, led by strong share performance in markets ranging from Australia and Korea to India and South Africa. Pringles net sales grew on the strength of double-digit consumption growth in quarter four, outpacing the category overall in the region, with notable share gains in markets like Australia, Korea and South Africa. It was the rest of our snacks business that felt the brunt of the net sales headwinds I mentioned earlier, resulting in the overall snacks decline you see on this slide. Financially, it was a quarter of good balance growth, net sales growth, improved gross profit margin and growth in operating profit even with a significant year-on-year increase in brand building investment. The quarter finishes what was another impressive year for EMEA, especially given the environment. Like our other regions, EMEA has experienced elevated cereal consumption, giving us the opportunity to retain consumers with the right messaging and innovation while continuing to expand penetration in emerging markets. While other parts of our snacks businesses were interrupted by various COVID impacts, Pringles continues to show good momentum heading into the New Year and we continued to grow our business in Africa and the Middle East, with noodles giving us a third growth engine to go along with cereal and snacks. Let's wrap up with a brief summary on Slide number 31. In a year unlike any other, we are proud of the way our organization rallied to execute through unprecedented and challenging conditions. First, we've managed well through crisis. We've kept each other safe, supplying the marketplace with food and aiding our communities. The crisis is not over and we will continue to focus on these areas. Second, we improved our competitive positions in 2020. We expanded household penetration by more than our categories, grew consumption across key markets, brands and retail channels notably in ecommerce, we held our gains share in categories that represent nearly 85% of our company's net sales in those measured markets. And we increased our brand investment for the year, even after some of it had to be delayed during the first half. Third, we sustained strong growth in emerging markets in spite of challenging conditions. In fact, we accelerated our growth in these markets. This is a credit to our experienced management teams, our diversified geographic footprint, our local supply chains and the breadth of our portfolio. Fourth, we delivered better than expected financial results. We twice raised our full year outlook and ultimately delivered on that guidance. We accelerated our organic net sales growth even without COVID and in a nod to balanced delivery, we expanded our gross profit margin in spite of incremental COVID costs and ongoing mix shifts towards emerging markets. We delivered operating profit growth and EPS growth even despite the impact of last year's major divestiture. And finally, we improved our financial flexibility. We generated stronger than expected cash flow, allowing us to pay down debt faster than anticipated. So we enter 2021, a stronger company. Our outlook keeps us on a two year trajectory that is right on our strategic plan. We have a strong commercial plan that builds on the increased consumer communication of 2020 and returns to broader activation and a more complete innovation launch calendar, all aimed at retaining households and continuing to improve our share across categories. We continue to invest in capacities that will enable us to catch up to demand and because of our improved financial flexibility, we are returning to share buybacks and dividend increases earlier than anticipated. Our goal is sustained balance between top-line and cash flow growth and we are on firmer footing now more than ever. I'd like to really thank our employees for their hard work and dedication. And with that, we'll now open it up for your questions.

We will now begin the question-and-answer session with publishing analysts. [Operator Instructions] Our first question comes from Eric Larson with Seaport Global Securities.

Congratulations on a good year, Steve. What I'd really like to focus on is kind of your guidance for organic sales growth. Obviously, there were a lot of twists and takes, in the year, but obviously, you're going to have some sort of resurgence in things like your European soccer program with Pringles. It seems like your comps in some cases are easier, despite the fact that obviously North America have benefited from, at home consumption increases. But can you give us a little more clarity on the away from home side and why that may or may not be stronger?

There's a lot of puts and takes when you think about 2021 guidance versus 2020, which is why we keep going back to 2019, ex-divestiture and talking about that as kind of a pretty relevant base year and looking at a two-year CAGR. Because when you look at areas like away from home, which will recover and on-the-go consumption, which will recover, that's going to offset some deceleration that we're seeing, but because you're not going to have another surge in March and elevated demands like April and May, it's going to remain elevated versus 2019 but not at the same levels as 2021. Getting back to away from home, the reason we think that will recover slightly more slowly for us is because we over index and travel leisure, areas like that, which we think will recover more slowly, travel won't come back quite as quickly as perhaps, people going to the office and being on-the-go. So lots of puts and takes in terms of what's going to happen by brand, by category by geography. And the biggest COVID impacts that we saw were clearly North America, Europe, very proud of what the team did in Europe in pivoting away from the Euro soccer championship and towards gaming, we do think that soccer will come -- we're hopeful that soccer will come back in some ways in 2021. So there's a lot in the guidance, but what we have really done is try COVID impacts in 2020, as we think about 2021, look at the 2019 base and put together winning plans, by category, by geography, by brand that gets us exactly to where we are today, when we talk about the 2021 guidance and rolls up into the net sales operating profit, EPS that we that we talked about. So I don't know Amit, if you want to add anything to that.

No. I think, like you said, Steve, our focus, at least from a planning stance was to look at it from a two year standpoint. And if you kind of look at the two year CAGRs, they are of off a growth standpoint, 2.5% on the top-line 3% to 4% on the bottom-line, and then on the EPS 4% to 5%.

Okay. A quick follow up, marketing spend as a percent of sales for this year. Are you reinvesting more in sales, or is it going to be more in line with sales?

No, we're going to be pretty flattish. So we've talked about brand building, being exactly where we think it needs to be overall. And we like where we are. We like the way we were positioned, as we said, in the last call, that we would keep our brand building pretty much at budget in 2020, which meant a big shift from the first half to the second half, for what are now obvious reasons. So we'll smooth that out in 2021. But we know we don't need a big resurgence, we like where we are in terms of investing in our brands. We'd like the way we're exiting this year, with the equity that we built in the brand and the money that we spent behind the brands. Now you look across our categories and what we've done, with all of our big brands, we feel very good about where we are.

The next question is from Alexia Howard with Bernstein.

You mentioned the pullback in promotional activity on frosted flakes. I imagine that might have contributed to some of the share declines that we're seeing more recently in the U.S. cereal category. When does that get overcome? When do the capacity constraint? And what do you expect to see improved share trends performance, over the next few months? Thank you and I'll pass it on.

We were capacity constrained as we exited the year, nobody anticipated obviously, the type of year that cereal would have, no category grew nearly 9%, slowed down a little bit in the second half, but still five, six percentage growth. So we work very hard all year to keep up with demand and keep our service levels as high as we possibly could. And we ended the year with a flat share performance slipped a little in the fourth quarter, as you noted, almost all of that slippage was due to Frosted Flakes, where, because of capacity, we had to back away from promotions, you can see that in the syndicated data, down 20% in incremental sales, because we couldn't execute against the mission Tiger program and we wanted to keep our service levels, where retailers deserve them to be. So we didn't give up promotional slots. And nearly all of our share declined in the fourth quarter was due to Frosted Flakes. Now as we enter 2021, we continue to build against capacity, we continue to make good improvements. And we continue to be very optimistic as we go through the first half of this year, we're going to get better and better in terms of that capacity. And therefore, we'll get better and better in terms of our sheer performance.

The next question is from Robert Moskow with Credit Suisse.

Amit, I'd like to ask about your inflation exposure in 2021. What kind of a step up do you expect in cost inflation? And to what extent do your hedges protect you? And then actually, I do have a question about the two year metrics here. A lot of your peers are saying that the COVID benefits are allowing them to outperform their two-year targets, your guidance implies that you're on track. Is there any reason why you wouldn't step things up in your 2021 outlook to reflect above trends given velocity is higher than you thought and household penetration is higher than you thought?

Okay. So let me start with the first question on commodities. I think we closed out 2020 with input cost inflation in the mid-single digits. And this was mostly offset by the productivity all the way through quarter four. I think we have seen green and energy markets rebound sharply in recent months, just on near term supply, demand and other factors. I think from our exchange traded commodity standpoint, we are well hedged through the first half of 2021 and roughly around 70% level of hedging coverage for the year. So I think, in terms of total inflation for 2021, we expect that to be higher than what we've experienced in 2020 but still in the mid-single digit rates. And I think we'd be looking to offset that with our usual productivity programs, with revenue growth management. And overall, as we've guided, we'd expect our gross margin to be up on a two-year basis, obviously, in this in 2020, our gross margin was up 60 basis points. And on a two-year basis, we'd still expect gross margins to be up and from a '21 standpoint, we'd be aiming for our gross margins to be stable.

And then, the two-year?

Steve, you want to talk two-year?

Yes. So Robert, as we looked at it, we aim to do better, right, but there's a lot of uncertainty. And recall, we returned to grow through a deploy for growth strategy. So it gets us back to where we said we would be and where we wanted to be based on our strategic planning stance. It could be better in retail, it could be better in certain categories, it could be slightly worse in a way from home depending on how that recovery happens. So we think it's a prudent planning stance but as we always say, we aim to do better and hopefully we will.

The next question is from Chris Growe with Stifel.

I had two quick questions here and a bit of follow-ons in each case. The first one just is in relation to the surge in sales that we saw and you to help to find that Amit in terms of 2020 from COVID. Have you and looking for like a high level viewpoint here but like how much of those incremental sales or share you gained some categories do you start to hold on to? So that was my first question. The second one was in related to that, as we look across a number of year categories, there were some areas where you had clear market share gains through the year, really through the year, but especially in the fourth quarter, and we have seen market share losses in particular in the U.S., and I'm looking mostly measured channels here, some market share losses there. So I wanted to just kind of bring that back around to that concept about keeping marketing flat this year. In areas where you've had some share pressure, do you need to increase your marketing and press is part of the plan in 2021?

Yes, Chris. So I'll start first, as we've said, in the past, our goal is to always gain share. And so we finished the year globally with holding or gaining share in over 80% of our category, country combinations, where there's measured data, so we feel good about that. In terms of the U.S., in particular, which you referenced, I did talk about the U.S. Rtech, where we held share for the full year, but we lost 50 basis points a share in the fourth quarter much of that due to capacity limitations that we had which I already mentioned. And so, our plan for 2021, we think in Rtech in ready to eat cereal is a winning plan. But if I look at some of the other categories for the full year and even the fourth quarter, if you look at the U.S. snacks business in and crackers, we gained share for the full year and we gained share in the fourth quarter. So we gained 50 basis points of cracker share in the fourth quarter in salty, which the category was explosive in the full year, gained about 12.5 of volume, we were up 11. So, based on our size, down ever so slightly but in the fourth quarter actually, we performed nearly 15% growth against the category of 10%. So we actually even did better in salty, our Pringles business. If I look at the portable wholesome snacks category, obviously a lot of on-the-go, so a category that was under pressure. For the full year and the fourth quarter, we had tremendous share performances. So we gained 250 basis points a share for the full year, 390 basis points in the fourth quarter, and that was great performance by Pop-Tarts, Rice Krispies treats, Nutri-Grain returned to growth in the fourth quarter. And then, if I look at Frozen, from the Griddle or Eggo business, obviously, terrific year, again, some capacity limitations for us but we gained 150 basis points of share in the fourth quarter, which was better than our -- is online with our full year performance. And then finally, on the vegan, which has got a lot of attention, because it's an explosive growth category. We were capacity constrained again there because nobody planned for the type of explosive growth. But we were up for the full year 24%, which wasn't enough to gain share, we lost, one basis point a share. But in the fourth quarter, we did better. We cut that share decline more than in half, we lost 40 basis points and we're up 20%. So that's a pretty good performance there. So in the categories where we didn't gain share, we were still growing double digits is another way to look at it. So that's why we like where our brand building is, we think it's been very, very productive. We measure every ROI by brand by category. And we think we entered 2021 with a lot of good momentum in our brands, in our categories and a good outlook for share performance in 2021.

Our next question is from Michael Lavery with Piper Sandler.

I was just wondering if you could touch on some of the thinking around guidance a little bit. It's pretty specific to not have a range for a full year with this amount of uncertainty. And so I guess maybe two parts. One is, what are some of your assumptions around things like lapping 2Q '20, the timing of buybacks what are some of the key moving parts and how you're thinking about them? Or I guess the other part of it is, you gave the progression of your guidance last year, you raised it a few times, is this more, kind of like how we should think about the low end of a guidance range with something above this? Just put that all in context for us please?

Yes, Michael, thanks. I'll start and turn it over to Amit as well. We've tried to be transparent as best as we possibly could, in an unprecedented environment, right. And so this guidance, I would say, is the best that we can do. And it's down the middle of the fairway. So, it could be better, it could have more challenges depending on how things recover and what happens in emerging markets. But we feel and don't -- we don't want to be falsely precise. And say, we know exactly what's going to happen in these uncertain times. But we want to maintain our transparency, we want to share with you what our planning stances are in terms of what we think will recover, how it will recover, and how our brands category, country combinations will perform. And again, we triangulate it, we look back at 2020 actual, what we had planned for 2020, pre-COVID, a 2019 base year ex the divestiture what our strategic planning intentions were and therefore what we wanted to accomplish in 2021 and what we thought we could accomplish in 2021. And those are the points that we landed on. And so again, trying to be transparent and trying to hit it down the middle of the fairway, I'd say is kind of the way I'd characterize the guidance. Amit, do you want to add any?

No. I think Steve; you've covered it, on the clock. It's in line with our internal plans. And I talked about underlying at home demand remaining elevated. But no question, we will have to lap last year's surges, particularly in March. And it's interesting, as we've gone into further lockdowns, we haven't seen that panic buying that we saw in March. So that's something that we'll have to lap. On away from home, we've assumed that, it is moderate. But over the course of the year and sitting here today they still remain depressed. So that's the assumption. And then from emerging market standpoint, we had a relatively strong year in 2020. So we're continuing to plan on growth in emerging markets. But we've been cautious and prudent in terms of the macro conditions in emerging markets. So I think those are some of the assumptions and the way we've approached the guidance.

Okay. That's very helpful. Thanks. Can I sneak in a quick follow up on MorningStar capacity? Do you know when you would get relief for that there?

We're catching up right now. So we're in good shape. The Incogmeato launch continues to go forward. We're adding chick flavors to that, we got some great innovations around chicken. And so we feel good about where the capacity is right now relative to the demand.

The next question is from Rob Dickerson with Jefferies.

I guess, kind of first question around your operating profit dollars, then also for cash flow dollars, if I looked at kind of where that might come in, or where they came in 2020, where it might come in '21. Frankly, it's not that much different then we saw, let's say 35 years ago and I realized a number of moving pieces. So, Steve a big piece of this strategic playbook has been reinvesting for growth that's the theme and you're getting there. Gross profit margin still better but we obviously haven't seen a lot of operating profit margin, which can obviously help your free cash flow grow over time. If we step way back, how do you think about getting that free cash flow piece to grow, the gross margin is good, the investment is good, doing all the right things. But name of the game is to get more cash in the business to kind of how do you kind of right size that as you think forward a few years? Then, I have a quick follow up. Thanks.

Yes, thanks. I'll start and Amit has got definitely some things to add there. But I'd start by reminding you obviously, the divestiture, big divestiture. So when you look back and look at the numbers and say cash flow, or overall I think you said, absolute OP dollars, there's going to be a big difference because of that divestiture. And if I think about, where we finish the year, so organic net sales of plus 6%, Forex neutral adjusted OP of 3.5%, Forex adjusted EPS of 2.3% and a cash flow of 1.5 billion. That's a terrific year, I think under any set of circumstances and based on the guidance that we gave in 2021, to your question around cash, it's substantially better than the 2019 performance. And remember, there's some outflows of cash that happened whether it be incentives, whether it be other release of accruals that were accrued for in 2020. And the cash will actually outflow in 2021, which is why I think it's, again, useful to look at a two year comparison on everything, including the cash flow performance, which continues to get better. And so as we exit this year, that's why we're very confident that as a company from a top-line through a balanced bottom-line delivery standpoint, we are a much stronger company. And we come out of this pandemic and we enter 2021 in a much stronger position from a balance sheet perspective and from a top-line potential perspective as well. Amit, do you want to build on that?

Well, I think, from a two-year standpoint you're looking at organic growth, 2.5% on the top-line and then EPS growth at around 4% to 5%. And then the cash flow conversion, we've had an exceptional year of cash flow conversion in 2020, now to 100%. I think in 2021, there are some timing differences. So, some of the accruals will be paid out in 2021. But our conversion, even in 2021, we're targeting, in the mid 70s to 80% conversion. And then, if you adjust for the pension income that runs through our P&L, that's about 15% adjustment, it gets us to go high 90s. So, I think from an overall standpoint it's balanced. In 2020, we demonstrated, we delivered balanced delivery and certainly the guidance for 2021 calls for that for another year of that.

And then, just quickly on Incogmeato. Obviously, I think you're either somewhat past the upfront trial phase seems like we've got [indiscernible] distribution, good trial, as you think forward, let's say next nine months, as we kind of near the grilling season. I'm assuming there'll be some pent up demand for consumers to get back outside to do that. Is there anything strategically that -- you can do to just further kind of drive increased household penetration? And I just ask, given, obviously, all the incremental competition that already exists within the retail channel? Thanks.

Yes. So Rob, I'd start by just reminding all of us that Incogmeato launched during the pandemic, so very difficult time to launch. But having said that, we're happy with where we are. And it also remind us that it is a sub-brand of MorningStar Farms. And MorningStar Farms finished the year with 25% consumption growth. So hardly a brand that's been disrupted but clearly a brand that is doing very, very well, despite some of the capacity constraints that I mentioned. Having said that, we did launch Incogmeato, we're up to about a 4 point share. When we look at our velocities relative to some of the smaller players, we're exceeding those velocities. When we look at the velocities compared to early MorningStar Farm launches at the same stage. We're ahead of those velocities as well. And as I said, we've got these chicken offerings, including Disney royalty chicken offerings that are coming to the fore right now. So we feel very good about where the whole MorningStar Farms performance is. And we continue to innovate around MorningStar Farms, but also Incogmeato, we're bullish about this and 25% consumption growth is pretty good.

We are at the end of time. If you do have follow up questions, please do not hesitate to call and thank you everyone for your interest and time this morning.

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.