Kellanova (NYSE:K) Q4 2023 Earnings Conference Call February 8, 2024 9:30 AM ET

Company Participants

John Renwick – Vice President of Investor Relations and Corporate Planning

Steve Cahillane – Chairman, President and Chief Executive Officer

Amit Banati – Vice Chairman and Chief Financial Officer

Conference Call Participants

Chris Carey – Wells Fargo

Tom Palmer – Citi

Rob Dickerson – Jefferies

Max Gumport – BNP Paribas

Michael Lavery – Piper Sandler

Ken Goldman – JPMorgan

Operator

Good morning. Welcome to Kellanova's Fourth Quarter 2023 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session with publishing analysts.

At this time, I will turn the call over to John Renwick, Vice President of Investor Relations and Corporate Planning for Kellanova. Mr. Renwick, you may begin your conference call.

John Renwick

Thank you, operator. Good morning and thank you for joining us today for a review of our fourth quarter results and a discussion of our outlook for 2024. I'm joined this morning by Steve Cahillane, our Chairman, President and Chief Executive Officer; and Amit Banati, our Vice Chairman and Chief Financial Officer. Slide number 3 shows our forward-looking statements disclaimer. As you are aware, certain statements made today, such as projections for Kellanova's future performance, are forward-looking statements. Actual results could be materially different from those projected. For further information concerning factors that could cause these results to differ, please refer to the third slide of this presentation as well as to our public SEC filings.

A recording of today's webcast and supporting documents will be archived for at least 90 days on the Investor page of www.kellanova.com. As always, when referring to our results and outlook, unless otherwise noted, we will be referring to them on an organic basis for net sales and on a currency-neutral adjusted basis for operating profit and earnings per share. Included in our press release, our financial results for the fourth quarter 2023 as well as the first three quarters and full years of 2023 and 2022 recasting W.K. Kellogg Co in those periods as discontinued operations in accordance with applicable accounting guidelines. These recast financials will be the basis of comparison used in the year-on-year growth rates we provide today for all items except free cash flow, which was not recast.

Keep in mind that the accounting guidelines for discontinued operations are such that the recast financials for the periods prior to the spinoff include expenses related to providing transition services to WKKC such as warehousing and IT-related expenses, but they do not include the reimbursement for those expenses, which Kellanova is receiving from WKKC under a transition services agreement. For periods after the spin-off, that is from Q4 2023 on, both the expenses and the reimbursements will be included, which will impact year-on-year comparisons. This also creates a difference from the carve-out financials that you would have seen from WKKC as different accounting guidelines apply to carve-out financials.