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Sep 26, 2020
Kellanova Q3 2020 Earnings Report
Kellogg Company reported better-than-expected financial results and solid in-market performance across all four regions, leading to an increased full-year outlook amidst an uncertain business environment.
Key Takeaways
Kellogg Company reported a nearly 2% increase in net sales, driven by strong organic growth and elevated demand for at-home consumption during the COVID-19 pandemic. The company raised its full-year financial guidance due to better-than-expected results in the third quarter.
Kellogg continued to execute well against its priorities during the global COVID-19 pandemic.
Net sales growth was led by emerging markets and strong consumption in key developed markets.
Significant increases in brand investment around the world aimed at further strengthening competitive positions.
Strong cash generation enabled the Company to continue to enhance financial flexibility.
Kellanova
Kellanova
Kellanova Revenue by Segment
Kellanova Revenue by Geographic Location
Revenue by Segment
North America Revenue
CapyFin.comEurope Revenue
CapyFin.comLatin America Revenue
CapyFin.comAMEA Revenue
CapyFin.comRevenue by Geographic Location
North America Revenue
CapyFin.comEurope Revenue
CapyFin.comLatin America Revenue
CapyFin.comAMEA Revenue
CapyFin.com Forward Guidance
Kellogg Company raised its full-year financial guidance on the strength of its third quarter results.
Positive Outlook
- Organic net sales growth is now expected to finish 2020 at approximately 6% year on year, up from previous guidance of approximately 5%.
- Currency-neutral adjusted operating profit growth is now projected to grow approximately 2% year on year, an improvement from previous guidance of a decline of approximately (1)%, and still weighed down by the absence of businesses divested in July, 2019.
- Currency-neutral adjusted earnings per share for the full year is now estimated to increase by approximately 2% year on year, an improvement from previous guidance of a decline of about (1)%, and still weighed down by the absence of businesses divested in July, 2019.
- Net cash provided by operating activities is now expected to finish 2020 at $1.8 to $1.9 billion, well above the previous guidance range of $1.5-1.6 billion, with capital expenditure of approximately $0.5 billion.
- Cash flow is now expected to finish 2020 at $1.3 to $1.4 billion, a significant improvement from the previous guidance of approximately $1.0 billion.
Challenges Ahead
- Excluded from this guidance are any significant supply chain or other prolonged market disruptions related to the pandemic or global economy.
- Guidance for operating profit excludes the impact of costs related to restructuring programs, mark-to-market adjustments, multi-employer pension plan withdrawal liabilities, and other items that could affect comparability, and foreign currency translation.
- Guidance for earnings per share excludes the impact of costs related to restructuring programs, mark-to-market adjustments , multi-employer pension plan withdrawal liabilities, the gain on the divestiture of selected cookies fruit snacks, pie crusts, and ice cream cone businesses, and other items that could affect comparability, and foreign currency translation.
- We are unable to reasonably estimate the potential full-year financial impact of mark-to-market adjustments because these impacts are dependent on future changes in market conditions (interest rates, return on assets, and commodity prices).
- Similarly, because of volatility in foreign exchange rates and shifts in country mix of our international earnings, we are unable to reasonably estimate the potential full-year financial impact of foreign currency translation.
Revenue & Expenses
Visualization of income flow from segment revenue to net income