Kellogg vs Nestle

Kellogg Company

Kellogg’s Company (“Kellogg’s”) was founded in 1906 and incorporated in Delaware in 1922. Kellogg’s is a publicly traded company on the New York Stock Exchange under the ticker symbol K. Kellogg’s is engaged in the manufacturing and marketing of ready-to-eat cereal and convenience foods. Kellogg’s manufactures these products in 20 countries and markets them in over 180 countries. Major brand names trademarked by Kellogg’s include: All-Bran, Apple Jacks, Cheez-It, Cocoa Krispies, Kellogg’s Corn Flakes, Corn Pops, Cracklin’ Oat Bran, Eggo, Froot Loops, Kellogg’s Frosted Flakes, Keebler, Frosted Mini-Wheats, Pringles, Pops, Kellogg’s Raisin Bran, Rice Krispies, and Rice Krispies Treats (Kellogg’s 10-K, 2014). Kellogg’s largest customer is Wal-Mart Stores, Inc. (“Wal-Mart”) which accounted for approximately 21 percent of consolidated net sales for the fiscal year ended 2014. As of January 3, 2015, Kellogg’s had approximately 29,790 employees (Kellogg’s 10-K, 2014).

Name of corporation: K – Kellogg Company

Date/period of the report: Fiscal Year End: January 3, 2015

Cash dividends per share: 2014 - $1.90 per Common Share; 2013 - $1.80 per Common Share

Current Ratio: 2014 – 0.77 2013 – 0.85

Common Stock Shares issued and outstanding: As of January 31, 2015, 356,571,864 shares of the common stock of the registrant were issued and outstanding. Common stock, $.25 par value, 1,000,000,000 shares authorized Issued: 420,125,937 shares in 2014 and 419,923,540 shares in 2013.

Debt to Equity vs Shareholder Equity Ratio: 2014 - 81.59% - 18.41%; 2013 – 77.09% - 22.91%

Pretax Net Profit Margin: 2014 – 5.66%; 2013 – 17.62%

Net Increase (Decrease) in cash and cash equivalents: (in millions) 2014 – Beginning $273; Ending $443; Change $170. 2013 – Beginning $281; Ending $273; Change $(8).

Audit Firm: PricewaterhouseCoopers LLP, an independent registered public accounting firm.

Did the auditors mention their review of “management’s report on internal control”? Yes, the effectiveness of Kellogg Co.’s internal control over financial reporting as of January 3, 2015 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm. “Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of January 3, 2015, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).”

Reference to “Cost”: Operating Expenses (Page 4 and 10). Cost was mentioned over 150 times in the Annual Report. Cost of Goods Sold (Page 18, 19, 22, 24, and many more).

Annual Report: http://investor.kelloggs.com/files/doc_financials/annual_reports/K_2014-Annual-Report_v001_q725z5.pdf

Nestlé

Nestlé S.A., headquartered in Vevey, Switzerland, was formed in 1905 by the merger of the Anglo-Swiss Milk Company, established in 1866 by brothers George Page and Charles Page, and Farine Lactée Henri Nestlé, founded in 1866 by Henri Nestlé. Nestlé is the largest multinational food and beverage company in the world measured by revenues. The company ranked #72 on the Fortune Global 500 in 2014. Nestlé’s products include baby food, bottled water, breakfast cereals, coffee and tea, confectionery, dairy products, ice cream, frozen food, pet foods, and snacks. Twenty-nine of Nestlé’s brands have annual sales of over US $1.1 billion, including Nespresso, Nescafé, Kit Kat, Smarties, Nesquik, Stouffer’s, Vittel, and Maggi. Nestlé has 447 factories, operates in 194 countries, and employs around 333,000 people.

Name of corporation: VTX: NESN – Nestlé

Date/period of the report: Fiscal Year End: December 31, 2014

Cash dividends per share: 2014 - $2.42 per Share; 2013 - $2.16 per Share

Current Ratio: 2014 – 1.03 2013 – 0.91

Common Stock Shares issued and outstanding: (in Millions) 2014 – Issued 3,224.8; Outstanding 3,168.4
2013 – Issued 3,224.8; Outstanding 3,189.6

Debt to Equity vs Shareholder Equity Ratio: 2014 – 47.45% - 52.55%; 2013 – 48.05% - 51.95%

Pretax Net Profit Margin: 2014 – 11.21%; 2013 – 13.50%

Net Increase (Decrease) in cash and cash equivalents: (in millions) 2014 – Beginning $6,415; Ending $7,448; Change $1,033. 2013 – Beginning $5,713; Ending $6,415; Change $702

Audit Firm: KPMG SA Geneva branch.

Did the auditors mention their review of “management’s report on internal control”? Yes. “In making those risk assessments, the auditor considers the internal control system relevant to the entity’s preparation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control system.” “In accordance with article 728a paragraph 1 item 3 CO and Swiss Auditing Standard 890, we confirm that an internal control system exists.”

Reference to “Cost”: Operating Expense (Page: 58, 77, 83, 89, and 127) Cost of Goods Sold (Page: 58 and 67). Cost was referenced over 98 times in the annual report.

Annual Report: http://www.nestle.com/asset-library/documents/library/documents/annual_reports/2014-annual-report-en.pdf