Kellogg said today (2 February) it had ended 2011 with a “strong” fourth quarter, in which profits jumped by a quarter, boosted by improved earnings in North America and Asia-Pacific.
The cereal giant reported a 25% jump in net earnings to US$232m for the last three months of 2011.
Operating profit was up 20.3% at $397m; Kellogg said “internal operating profit”, which excludes the impact of foreign exchange, increased 20.5%.
The company’s net sales increased 5.4% to $3bn, or by 6% when currency fluctuation was excluded from the results.
Underlying sales were up 6.7% in North America in the fourth quarter and increased 8.2% in Asia-Pacific. Kellogg’s internal operating profit improved in both regions.
However, its performance in Europe and Latin America was mixed. Lower sales input costs and “difficult” trading conditions in the UK meant the profits made by Kellogg’s European operations fell in the quarter.
Sales in Latin America increased but were not enough to arrest a decline in quarterly profits.
Over the year as a whole, Kellogg’s net earnings increased 2.4% to $1.2bn. Operating profit fell 0.7% to $2bn due to restructuring, salary and input costs. Internal operating profit fell 2.9%. However, net sales increased 6.5% to $13.2bn, or by 4.5% once foreign exchange was excluded from the results.
“In 2011 we started to build a foundation upon which we can grow,” president and CEO John Bryant said. “We are pleased to have again posted very strong revenue growth and we have continued to make the investments necessary for future growth. Without the impact of the compensation costs and the supply-chain investment, our underlying operating profit increased in line with the company’s long-term target of mid single-digit growth.”
He added: “We will further improve our supply chain in 2012, but, as importantly, we will also focus our efforts on increasing investment in brand building and launching even stronger innovation.”