With projected annual sales of nearly $8 billion, Kellogg Company is the world’s leading producer of cereal and a leading producer of convenience foods, including cookies, crackers, toaster pastries, cereal bars, frozen waffles, meat alternatives, pie crusts, and ice cream cones. Founded and headquartered in Battle Creek, Michigan, Kellogg manufactures products in 19 countries on six continents, and markets products in more than 160 countries around the world.
In 2000, Kellogg implemented a new growth strategy and, in March 2001, as a key part of the strategy, the company acquired Keebler Foods Company, the number two U.S. producer of cookies and crackers.
Kellogg’s brands include Kellogg’s®, Keebler®, Pop-Tarts®, Eggo®, Cheez-It®, Nutri-Grain®, Rice Krispies®, Special K®, Murray®, Austin®, Morningstar Farms®, Famous Amos®, Carr’s®, Plantation®, and Kashi®. Kellogg icons such as Tony the Tiger™, Snap! Crackle! Pop!™, and Ernie Keebler™ are among the most recognized characters in advertising. 
Le producteur de céréales pour petit déjeuner

BATTLE CREEK, Mich., April 27, 2006 /PRNewswire-FirstCall via COMTEX News Network/ -- Kellogg Company (NYSE: K) today reported continued strong sales and earnings growth. Both exceeded the Company's long-term internal growth targets and built on very strong growth posted in the first quarter of 2005. 

Reported net earnings for the quarter were $274.1 million, an 8% increase from last year's $254.7 million. Earnings were $0.68 per diluted share, an 11% increase from last year's $0.61 per share. This year's results built on very strong 15% growth in the comparable period of last year. The effect of including stock option expense in the quarter effectively lowered earnings by $0.03 per share; this effect was essentially offset by there being fewer up- front costs from cost-reduction initiatives than in the first quarter of last year. 

"The strong momentum we've built in recent years continued through the first quarter," said Jim Jenness, Kellogg's chairman and chief executive officer. "We exceeded our growth targets, made significant investment in our businesses, and overcame continued cost pressures. These results again demonstrate the strength and flexibility of our business model." 

Reported net sales in the quarter increased by 6% to $2.7 billion. Internal net sales growth, which excludes the effect of foreign-currency translation, was 7% and built on very strong growth of 6% in the first quarter of last year. 

Kellogg North America posted reported net sales growth of 9% and internal net sales growth of 8%, driven by strong growth in the Retail Cereal, Retail Snacks, and Frozen & Specialty Channels businesses. Retail Cereal posted internal sales growth of 6%, driven by innovation introduced in recent months and effective brand-building programs. The retail snacks segment of the business posted internal sales growth of 12% as a result of growth in cookies, crackers, wholesome snacks, and toaster pastries. In addition, all of the U.S. retail cereal and snack businesses gained category share in measured channels. In combination, the North America Frozen and Specialty Channels businesses posted internal sales growth of 5%, driven by strong growth in both the Food-Away-From-Home and frozen foods businesses. 

Kellogg International reported first quarter net sales growth of 1%, or 5% excluding the unfavorable effect of currency translation; this built on strong 5% growth in the first quarter of 2005. Latin America posted internal sales growth of 11%, even after posting strong 12% growth in the first quarter of last year; both the cereal and snacks businesses contributed to these strong results. Internal net sales in the European region increased by 5%, above the Company's long-term growth target of low single-digit growth; every business in the region posted increased sales. The Asia Pacific region posted an internal net sales decline of 1 percent. 

Reported operating profit was $472.5 million in the first quarter, an increase of 1% from the first quarter of last year; this growth built on strong 11% growth last year. Internal operating profit growth, which excludes the impact of foreign exchange and stock compensation, was 6% in the first quarter and built on 10% growth last year. This growth was achieved despite significant increases in investment in brand building and innovation. The Company continues to expect that up-front costs for the full year will be approximately $90 million, or an amount similar to last year's total, even though up-front costs in the first quarter were less than in the first quarter of last year. Internal operating profit growth for the full year is expected to meet the Company's long-term target of mid-single digit growth. 

Cash flow, defined as cash from operating activities less capital expenditures, was $101 million in the first quarter, as was anticipated in our plan. The decline from the first quarter of last year was primarily the result of timing: the improvement made in trade payables as a percentage of sales in the first quarter of this year was less than last year's improvement. This difference was the result of an unusually low payables balance at the start of 2005. Core working capital measured as a percentage of rolling twelve-month sales was an industry-leading 7% at the end of the first quarter of 2006, which represented an improvement of 20 basis points from the first quarter of last year. 

Kellogg Expresses Confidence and Increases Guidance for the Full Year 

Kellogg stated that it now expects full-year earnings to be in a range of $2.45-2.49 per share. This reflects the first quarter's strong results and the Company's confidence regarding the remainder of the year. The higher earnings range also includes approximately $0.15 of up-front costs and an increased estimate for stock option costs of $0.10 per share for the full year. The previous projection had been for these costs to equal $0.09 per share. Full-year cash flow is now expected to be in a range between $900 million and $975 million, an increase from previous expectations of $875 million to $975 million. In addition, the Company expects gross margin expansion. The Company also expects operating profit growth to equal or exceed sales growth for the full year. 

Mr. Jenness concluded, "We began the year with significant sales momentum. This momentum and our commitment to run the business for long-term growth, give us increased confidence that we will achieve our full-year targets. The strong performance we expect in 2006 is a testament to our continued commitment to delivering sustainable, dependable results."