USA — American multinational food manufacturing company Kellogg has managed to hit its financial guidance for 2021 despite its operations being disrupted by a 12-week strike.
Fourth-quarter sales were also up beating Wall Street estimates as product prices offset pressure from reduced demand for its snacks and cereals.
In the 12 months ended Jan. 1, Kellogg’s net income was US$1.49 billion, up 19% from US$1.25 billion in 2020.
Net sales for the Battle Creek, Michigan, United States headquartered company also rose 2.9% to US$14.2 billion from US$13.8 billion.
For the year, organic net sales were up 3.5%, adjusted operating profit fell 1.9% and adjusted earnings per share were up 1.3%.
The breakfast cereal maker noted that each of the metrics met or was better than the company’s guidance.
“Facing significant cost inflation, worldwide bottlenecks and shortages, and even a labor strike at all of our US cereal facilities in the fourth quarter, the team executed with agility to deliver another year of on-guidance results,” said Steven A. Cahillane, chairman and chief executive officer of Kellogg.
North America Underperforms
Results would have been far better in 2021 but for struggles experienced in the North American market.
Operating profit in North America was US$1.33 billion, down 10% from a year earlier. By contrast, operating profit was up 16% in Europe, 13% in Latin America, and 22% in Asia, the Middle East, and Africa.
Despite its lackluster performance, North America still accounted for 76% of the company’s operating profit (which totaled US$1.75 billion) and 59% of sales.
Strike impact lingers on
The strike took a toll on the company’s business in the second half of 2021 and was the topic of considerable discussion during the conference call.
In its initial guidance for 2022, Kellogg projected growth “in spite of continued economy-wide supply challenges, the residual impact of the US cereal labor strike and fire and further acceleration in cost inflation.”
For the year, Kellogg is projecting net sales growth of about 3%, driven by price/mix growth rather than volume; adjusted operating profit growth between 1% and 2%; and adjusted earnings per share growth of 1% to 2%.
Kellogg India gets new MD
Earlier, Kellogg India Pvt. Ltd announced the appointment of Prashant Peres as managing director for its India and South Asia markets.
Peres succeeds Mohit Anand who has been elevated to the role of general manager, snacks portfolio, for Kellogg AMEA region—Asia Pacic, Middle East and Africa, based in Singapore.
He assumed the new role in January and will be based out of the company’s Mumbai office.
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