Kellogg has reported year-on-year sales growth of 4.2% for its fourth quarter of 2018, and 5.4% for the year as a whole, as the cereal company’s recovery under CEO Steven A. Cahillane continues.
Net sales for the year to 30 December were $13.55 billion – up from $12.85 billion last year – while operating profit rose almost 23% to reach $1.71 billion. For the fourth quarter, net sales grew to $3.32 billion, though there was a fall in operating profit, down to $326 million.
The strong performance continues the recovery that Kellogg has made since Steven Cahillane replaced John Bryant in October 2017.
Two years ago, the company had just rounded off 2016 with a disappointing fourth quarter that returned $98 million in operating profit from total quarterly sales of $3.1 billion, having just registered the 14th of what would become 16 consecutive quarters of year-on-year decline in net sales.
Cahillane took on the position of CEO the following October, meaning 2018 was his first full year in charge; the Battle Creek-based firm has recorded growth in every quarter since.
Commenting on Kellogg’s latest results, Cahillane said: “2018 was an important year for us, in which we pivoted to growth after successfully reducing our cost structure in recent years.
“We launched Deploy for Growth, a strategy that gives us clarity on priorities, and has us taking decisive actions to return our company to sustainable top-line growth.
“We still have a lot of work to do, but we have made great strides toward reshaping our portfolio toward growth, revitalising key brands, and developing capabilities. Our stabilisation of a declining net sales trend and our improved in-market performance around the world are clear signs of this progress. This investment and progress will be evident again in 2019, setting us on a path for sustainable, profitable growth over time.”
In particular, full-year profit grew 23% on the back of lower restructuring charges and the positive impact seen from Kellogg’s acquisition of protein bar brand Rxbar in October 2017 and the consolidation of Nigerian distributor Multipro in May 2018.
Decline in Kellogg’s US snacks and morning foods divisions was offset by robust growth in the ‘North America other’ segment, which includes Rxbar as well as US frozen foods, Kashi, and Kellogg’s Canadian business.
Kellogg’s Asia-Pacific unit increased sales by more than 60% in spite of adverse currency translation, while the company’s business in Europe recorded a near-5% increase in sales.
© FoodBev Media Ltd 2019