Kellogg Company has forecast a decrease in organic net sales for 2021, as demand declines relative to the “unusually strong, Covid-related growth” of the prior year.
The company recorded 6% growth in organic net sales in its 2020 full-year results but forecast a fall of about 1% for this year.
Reported net sales, which include the impact of divestiture and currency, were up 1.4% year-on-year to $13.77 billion, as elevated at-home demand sustained by the pandemic offset impacts from adverse currency translation and business divestitures in 2019.
Reported operating profit in 2020 increased by approximately 25.7% year-on-year to $1.76 billion, primarily due to a significant reduction in one-time charges. This compares to the 17.8% drop recorded in Kellogg’s last set of full-year results.
In North America, Kellogg saw an increase of approximately 5% in organic net sales as elevated at-home demand during the Covid-19 crisis more than offset declines in away-from-home channels.
On an organic basis, net sales in Europe increased by more than 5%, on the back of elevated demand for the company’s cereals during the pandemic.
Kellogg Asia Pacific, Middle East and Africa recorded an approximate 8% increase in organic net sales. The unit saw strong growth in cereal, noodles and Pringles, as well as across multiple markets.
On an organic basis, Kellogg Latin America saw the strongest growth in net sales, which were up approximately 12% on the previous year, with snacks, cereal and frozen foods all seeing growth. However, adverse currency translation meant that reported net sales saw a low-single-digit decline.
“The year 2020 was a year unlike any other, one in which the world faced unprecedented challenges,” said Steve Cahillane, Kellogg Company’s chairman and CEO.
“With the priorities of keeping our employees safe, supplying food to the marketplace and aiding our communities, we have managed well through the pandemic, while also delivering exceptional results.”
Cahillane continued: “We enter 2021 with solid momentum, and I remain confident that Kellogg will emerge from this pandemic a stronger company. We’ve enhanced capabilities, reached incremental households, invested in our supply chain and improved our financial flexibility. We are on sound footing for continued balanced financial delivery.”
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