Kellogg Says Remains On Track To Complete Plan To Separate Into Two Companies In Q4

(RTTNews) - Kellogg Co. (K) said that it remains on track to complete its plan to separate into two publicly traded companies in the fourth quarter of 2023. At that time Kellogg Company will separate into Kellanova (K) and WK Kellogg Co (KLG), with existing Kellogg shareowners receiving shares in the new WK Kellogg Co.

Kellogg said in June 2022 that its board approved a plan to pursue a separation of its North American cereal business or "WK Kellogg Co", through a tax-free spin-off.

In a statement released ahead of an investor day, Kellogg said Wednesday that Kellanova expects to deliver long-term annual growth rates of 3-5% for net sales on an organic basis; 5-7% for operating profit on a currency neutral and adjusted basis, and 7-9% for earnings per share on a currency neutral and adjusted basis, including in 2024 on a like-for-like basis excluding WK Kellogg Co.

In 2024, Kellanova expects to generate net sales of $13.4 billion - $13.6 billion and adjusted-basis operating profit of $1.85 billion - $1.90 billion. Kellanova projects adjusted-basis earnings of $3.55-3.65 per share. On a like-for-like basis that excludes WK Kellogg Co from the 2023 base, the estimates translate into year-on-year growth that is in line with Kellanova's long-term algorithm.

Kellogg said that WK Kellogg Co projects net sales of approximately $2.7 billion and adjusted-basis EBITDA of approximately $255 million - $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.