DBRS Confirms Kellogg Company Senior Unsecured Debt at A (low) and Commercial Paper rating at R-1 (low)

DBRS has today confirmed the long-term ratings of Kellogg Company (Kellogg, or the Company) and related entities at A (low) and the short-term ratings at R-1 (low). The trends remain Stable.

The current ratings continue to reflect Kellogg’s consistent record of growing organic sales, market share, cash flows and profits. Kellogg has an excellent portfolio of existing brands and continues to be successful in launching new products and brand extensions. The combination of improving geographic and product diversification has made Kellogg’s earnings more resilient to short-term economic fluctuations. In addition, Kellogg’s strong brands allow the company a measure of negotiating power when dealing with large retailers.

The Company has been consistently successful in developing enhanced production methods that aid in reducing costs. This has been critically important during recent periods where input inflation has exceeded the near-term opportunity for price increases. The cost-cutting focus has allowed Kellogg to maintain profitability despite inflationary pressures.

Credit metrics have stabilized recently after a consistent improvement over the previous several years, and are well placed within the parameters of the current rating category. Should Kellogg implement a more-aggressive financial policy in the future, ie., returning credit metrics to levels observed prior to last year’s upgrade, ratings could come under pressure.