Kellan's: Cereal producer and owner of the Pringles brand
Kellanova is an American multinational food products manufacturing and distribution company founded in 1906. In October last year, Kellogg's was split into two. The newly formed Kellan's retained, for example, the iconic Pringles brand of chips. We can expect quarterly results as early as August 1. While this will be a key point for the company, let's take a look at its business as a whole.
Kellan's focus is on manufacturing and selling a wide range of products, including cereals, crackers, and other similar products. Some of their most well-known brands include Corn Flakes, Rice Krispies, Frosted Flakes, Special K, Pringles, and more. The company is active in more than 180 markets worldwide.
One of the key aspects of Kellan's strategy is innovation and sustainability. The company invests in research and development of new products and technologies to offer healthier and more nutritious alternatives to its customers. Kellanova is also committed to reducing its environmental impact and promoting sustainability in all phases of its business, from sourcing raw materials to manufacturing and distribution.
Interesting factA: Kellanova was a pioneer in the field of marketing and advertising. The company was one of the first to use various forms of advertising campaigns, including giving away free samples and using attractive packaging to attract customers. This approach proved to be very successful and helped the company gain a dominant position in the breakfast cereal market.
Management
Steven A. Cahillane - CEO
Steve Cahillane joined Kellanova, formerly Kellogg Company, in October 2017 as President and CEO. He became Chairman of the Board in March 2018.
Prior to joining Kellogg's in 2014, Mr. Cahillane assumed the role of President and CEO of The Nature's Bounty Co. the largest global pure-play manufacturer, marketer and specialty retailer of health and wellness products. Prior to Nature's Bounty, Mr. Cahillane spent seven years at The Coca-Cola Company, most recently as President of Coca-Cola Americas. Prior to that, Mr. Cahillane spent eight years at AB lnBev, the world's largest brewing company.
Mr. Cahillane is a member of the Board of Trustees of Northwestern University, the Board of Directors of the Consumer Goods Forum, the Smithsonian National Board, the Colgate-Palmolive Board of Directors and a co-trustee of the W.K. Kellogg Foundation Trust.
Stephen holds a Bachelor of Arts degree in Political Science from Northwestern University and a Master of Business Administration degree from Harvard.
If you would like more personal information about the CEO himself, you can check out his Linkedinwhere he has detailed his professional accomplishments and educational background. He is also active there on an almost daily basis.
Industry/Specialization of the company
Cereals: One of Kellan's main specialties is breakfast cereals. Kellanova is known for a wide range of products that are popular all over the world. Some of the best known brands include Corn Flakes, Frosted Flakes, Rice Krispies and Special K.
Snacks and snacks. Pringles, one of their best-known brands, is popular worldwide for its crispy potato chips. Other notable products in this category are Nutri-Grain bars, which are rich in fiber and nutrients, and Cheez-It crackers, which offer a cheesy flavor.
Healthy eating and special diets: Kellan's also focuses on products designed for healthy eating and special diets. Special K, for example, is a brand aimed at people who want to control their weight or improve their overall health. The company invests in developing high-fiber, low-sugar and gluten-free variants to meet the needs of different diets and health requirements of consumers.
Innovation and Research: One of the key aspects of Kellan's specialty is its commitment to innovation and research. The company continuously invests in research and development of new products and technologies to offer innovative and quality food products.
Company profitability and cash
Shares of $K-0.1% are among those that tend to hold their value and pay a stable dividend. Therefore, we do not expect high percentage movements here. Even so, the company has managed to improve quite a bit in price per share over the past year. However, it is now not too far from the price at the beginning of the year.
The company's current market value is $19.43 billion. This is the value the company was at back in 2013, for example. It's down 30.6% from its 2016 peak. There are currently 23,000 people working for the company.
Although Kellan's company has had many years on the stock market and other changes, 15.85% of all shares remain privately held. The remaining 287.69 million shares are distributed to investors. The company's debt is $6.59 billion and the cash now held by management is $242 million.
In 2019, the company's revenue was $13.58 billion. Operating margins were at 7.07% at that time. This brought net income to $960 million. The next year, profit margins increased to 9.08%. Revenue grew to $13.77 billion and net profit was $1.25 billion. In 2021, revenue was $14.18 billion. Profit margin went above 10% to exactly 10.49%. The company earned $1.49 billion as a result. But for the last 2 years ,$K-0.1% has been struggling with lower sales and margins. The revenue was $12.65 in 2022 and $13.12 billion in 2023. The margins were 7.59 and 7.25%. Net income has come down to $960 million and $951 million last year from earlier highs.
The company sells its products on every continent in countless countries. But the largest share of its sales continues to come from its home United States. The U.S. generated $K-0.1% 6.28 billion in salesfor the company in 2023 . That's 47.85% of their total value last year. Europe was second with $2.46 billion followed by Asia, Africa and the Middle East with $1.67 billion in revenue. Latin America contributed 1.26 billion. Nigeria alone earned the company 8.48% or $1.11 billion in revenue.
The company earns the most from the "snacks" item which includes products from brands like Pringles. Small bars and snacks also fall under this category. This segment accounted for 61.77% of the total revenue value in 2023. Cereal sales generated $2.74 billion in revenue. Noodles added $1.19 billion. Frozen products came in last, responsible for 9.04% of last year's global revenue.
The company, as we've already noted, ranks mainly among the dividend-paying and stable titles. This also corresponds to its sales and earnings per share, which are not growing as much as those of the tech giants. Earnings per share were $3.51 in 2016. The company thus beat analysts' estimates by 1.5%. It continued to beat them through 2020. By 2018, it was able to continue to grow EPS. Its value got up to $4.05. Then came the decline and earnings per share ranged between $3.75 and $3.95 for the next four years. In 2023, the company's earnings per share were $3-0.1%.18. Estimates called for a high of 22.94% higher. But this year, the company is expected to return to growth, which should continue through 2027, where estimates go. In 3 years, EPS could get as high as $4.24.
It's been an even slightly calmer ride for earnings. In 2016, revenue was $13.01 billion. It was above estimates by 0.25%. It wasn't until 1029 that the company managed to stay above the market consensus. By 2019, revenue was up by slow organic growth to $13.58 billion. For the next three years, the company still managed to increase sales every year. Even the pandemic didn't spoil that trend for it. In 2020, sales were $13.77 billion. In 2022, the company reported an all-time high revenue figure of $15.31 billion. But last year, revenue fell from that figure to $13.12 billion. It came in 9.59% below estimates. In the coming years, revenue is expected to stay at the current level of around $13 billion. In 2027, revenue should reach and $13.46 billion.
Revenue from small snacks has come down from 2017 when it was $6.7 billion to last year's $8.11 billion. It's the highest ever from this segment. But cereal sales revenue has fallen by half. In 2017, cereal earned $5.27 billion. But last year, it was only $2.74 billion. Noodle sales have risen from $849 million in 2019 to $1.19 billion in 2023. Frozen food sales are up $70 million from 2017.
Operating expenses
The company's operating costs are down due to its business remaining the same with not as many extensive changes. In 2010, management needed $2.54 billion to operate one quarter. Over the next two years, this increased to $3.56 billion due to the expansion of operations around the world. Since then, however, there has been a long phase of cost cutting. This lasted until 2017. Here, the company was down to $2 billion and $796 million for one quarter. By 2021, management was then faced with only very slow expense growth to match revenue growth. In early 2021, the firm's $K-0.1% one quartercame out to $3.1 billion. Since then, however, expenses have declined greatly on average. In fact, each year's final quarter, companies spend only one-third of traditional spending over the year. In the most recent quarter, the company spent $2.8 billion.
Dividend
Kellan's $K-0.1% has been paying a dividend for a really long time. The first payout occurred back in 1977. The dividend at that time was $0.034 per share. From then on, the payout kept increasing until 1986, when the stock split at a 2/1 ratio. There were further stock splits in the same ratio in 1991 and 1997. The new dividend was USD 0,225.
Today, stockholders can look forward to a solid payout that continues to increase over time. But the company has made one exception. In 2026, it paid its highest dividend to date at 60 cents per share. But the very next quarter, the payout was back to 59 cents as before. Now stockholders are getting 56 cents for every share owned. The annual dividend yield is 3.94%.
