FDBusiness.com

Kellogg Company, the global breakfast cereals and snacks group, has reported a 7.2% drop in net sales to $13.5 billion for 2015 with operating profit up by 6.6% to $1.091 billion. However, on a currency neutral basis, full year net sales increased by 1.2% but comparable operating profit decreased by 2.3%, including a 3% negative impact from the re-basing of incentive compensation.

“Our results in 2015 met or exceeded our initial expectations. We saw good growth in many of our businesses, and importantly, trends continued to improve in the US Cereal business,” comments John Bryant, chairman and chief executive of Kellogg Company. “We’re very pleased with the foundation that we’ve built. We are committed to achieving our long-term goals for growth in 2016, supported by our increasing momentum and unprecedented productivity programs.”

Currency-neutral comparable net sales in Kellogg’s European business decreased by 0.6% for the full year but increased by 1.6% in the fourth quarter, reflecting excellent growth in the Snacks business, including Pringles.

Kellogg Company expects that, in 2016, it will achieve its long-term target for currency-neutral comparable net sales of between 1% and 3%, and its long-term target for currency-neutral comparable operating profit growth of between 4% and 6%. The company expects growth in currency-neutral comparable earnings per share of between 6% and 8%.

The company expects full-year cash flow to be approximately $1.1 billion and capital expenditure for 2016 to be between 4% and 5% of sales, including the impact of the cash required by Project K and an increase in capital spending equal to approximately 1% of sales to support the growth of the Pringles business.

Kellogg Company’s board of directors has approved a $1.5 billion share-repurchase program that will run through 2016 and 2017.