Kellogg Company (NYSE:K) Q4 2016 Earnings Conference Call - Preliminary Transcript

Feb 09, 2017 • 09:30 am ET


Kellogg Company (NYSE:K) Q4 2016 Earnings Conference Call - Preliminary Transcript


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Good morning. Welcome to the Kellogg company 2016 Fourth Quarter and Full Year Financial Results. All lines have been placed on mute to prevent any background noise. [Operator Instructions] After the speakers remarks, there will be a question and answer period. [Operator Instructions] Thank you. At this time, I will turn the call over to John Renwick, Vice President of investor relations and corporate planning for Kellogg company. Mr. Renwick may begin your conference call.

John Renwick

Thank you, Gary. Good morning. And thank you for joining us today for review of our fourth quarter 2016 results. I am joined this morning by John Bryant, Chairman and CEO who will give you an overview of our business results and priorities; Ron Dillinger chief financial officer who will walk you through our financial results in Outlook, and Paul Norman, president of North America, who will give you an update on our North America business. Slide 2 shows our usual forward looking statements disclaimer as you are aware, certain statements made today such as projections for Kellogg company's future performance, including earnings per share, net sales, profit margins, operating profit, interest expense, tax rate, cash flow, brand building upfront costs, investments and inflation, our 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 Tuesday, February 14. The call will also be available via webcast which will be archived for at least 90 days. And now we'll turn it over to John and slide number 3.

John Bryant

Thanks, John. And thank you everyone for joining us. Please turn the slide 3 and a quick summary of the quarter and year. Q4 results show sequential improvement as promised, which generated sequential improvement in its sales with currency neutral comparable growth in Q4 on top of Hugo growth, even excluding Venezuela. We saw sequential improvement in price mix, gained a flat after having been down the first half and providing evidence of revenue growth measurement starting to take hold. We saw improvement in our gross margin in Q4 as our saving stocks have said headwinds like adverse transactional currency and country mix. We saw sequential improvement in our operating profit margins and growth.

So it's coming in ahead of expectations and the high end of that guidance. We also came in higher than expectations and guidance on EPS and cash flow. Behind these results has continued progress against that 2020 growth plan, our 2016 priorities and our 2018 profit margin target. In the US, we collectively gain share in our core six year brands, we've steadily improved ourselves performance in US snacks, and we overhauled food and packaging in frozen and Kashi. We continue to expand Pringles globally. We grew in emerging markets, even as we added scale in these markets, to