Kellogg Company (NYSE:K) Q4 2014 Earnings Conference Call - Final Transcript

Feb 12, 2015 • 09:30 am ET


Kellogg Company (NYSE:K) Q4 2014 Earnings Conference Call - Final Transcript


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Good morning. Welcome to the Kellogg Company Full Year and Fourth Quarter 2014 earnings call. [Operator Instructions] Please note, this event is being recorded. Thank you.

At this time, I will turn the call over to Simon Burton, Vice President of Investor Relations for Kellogg Company. Mr. Burton, you may begin your conference call.

Simon Burton

Thanks Gary, and good morning and thank you everyone for joining us today for a review of our full year and fourth quarter 2014 results. I'm joined here by John Bryant, Chairman and CEO; and Ron Dissinger, Chief Financial Officer. The press release and slides that support our remarks this morning are posted on our website at

And as you are aware, certain statements made today such as projections for Kellogg Company's future performance, including earnings per share, net sales, margin, operating profit, interest expense, tax rate, cash flow, brand building, upfront costs, investments and inflation are forward-looking statements. Actual results could be materially different from those projected. For further information concerning factors that could cause these results to differ, please refer to the second slide of this presentation as well as to our public SEC filings.

As a reminder, a replay of today's conference call will be available by phone through Monday, February 16. The call will also be available via webcast, which will be archived for at least 90 days.Now I'll turn it over to John.

John Bryant

Thanks, Simon and thank you everyone for joining us. Today, we announced results for the fourth quarter and full year. Comparable full year sales were at the lower end of our guidance range. Our results for full year comparable operating profit was slightly lower than we had anticipated, primarily due to the decline in sales. And our results for full year comparable earnings per share were inline with our expectations, were also at the low end of the range.

Project K is on track and we've delivered savings inline with our guidance for 2014. The global business services initiative is going well and we've begun to reduce capacity in some regions and add capacity in others. Results from our labor strategy intend to drive a more competitive, sustainable cost structure have been mixed. We've seen good results in Europe and Australia, although we still have work to do in the U.S. As you know, Project K will provide us with a considerable amount of financial flexibility and we are continuing our investment in 2015.

We're at an important point as we enter 2015. After a disappointing 2014, we are building a platform for growth over the coming year. We will continue Project K. We are investing in our business and we expect to stabilize our top-line in 2015.

In providing guidance for 2015, we've recognized the critical task of returning the company to sustainable top line growth. We expect full year comparable net sales to be approximately flat, a significant improvement from the trends we saw in 2014. We were pleased with our performance in much of the