K - Kellogg unveils financial outlook for Kellanova and WK Kellogg ahead of the business split
2023-08-09 07:48:46 ET
Kellogg Company ( NYSE: K ) said it remains on track to complete the previously announced separation of the company into two separate publicly-traded businesses during the fourth quarter of 2023. At that time Kellogg Company will separate into Kellanova and WK Kellogg Co (KLG), with existing Kellogg shareowners receiving shares in the new WK Kellogg Co.
Kellanova will feature a growth-oriented portfolio that is weighted toward snacks and emerging markets, and is led by highly differentiated brands with considerable opportunity for expansion. The new company projects net sales of approximately $13.4B to $13.6B and adjusted-basis EBITDA of approximately $2.25B to $2.3B in 2024. Kellanova expects to deliver long-term annual growth rates of 3-5% for net sales (organic basis), 5% to 7% for operating profit (currency neutral and adjusted basis), and 7% to 9% for earnings per share (currency neutral and adjusted basis), including in 2024 on a like-for-like basis excluding WK Kellogg Co.
The split will see the creation of WK Kellogg Co build on a foundation of iconic brands and a leading share position in North American cereal. WK Kellogg Co will focus and integrate its commercial execution and modernize its supply chain, which it expects will result in improved competitiveness, profitability, and cash flow. The financial projections are for WK Kellogg to generate net sales of approximately $2.7B and adjusted-basis EBITDA of approximately $255M to 265 million in 2024. Over the next three years, WK Kellogg Co expects to improve its adjusted-basis EBITDA margins by 500 basis points by the end of 2026, through supply chain modernization and a stable top-line trajectory.
Kellogg Company ( K ) is hosting an investor day event on Wednesday, during which management teams of Kellanova and WK Kellogg Co will meet with analysts and investors to unveil their respective strategies, capital structures, and financial outlooks, ahead of their planned separation during the fourth quarter of 2023.
Shares of Kellogg ( K ) are down 15.02% over the last 52 weeks amid general weakness for the packaged food sector.
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Kellogg unveils financial outlook for Kellanova and WK Kellogg ahead of the business split