McCORMICK REPORTS RECORD SALES GROWTH IN 2021 AND PROVIDES OUTLOOK FOR 2022

McCormick reported an 11% sales increase in the fourth quarter from the year-ago period, including a 1% favorable impact from currency. Sales from Cholula and FONA, acquired in November 2020 and December 2020, respectively, contributed 4% to the sales increase. Both the Consumer and Flavor Solutions segments delivered strong growth with contributions from higher volume and pricing, new products, and acquisitions. Consumer segment sales grew 10%, including a 1% favorable impact from currency, on top of 6% growth in the fourth quarter of 2020. Flavor Solutions segment sales increased 14%, including a 2% favorable impact from currency, on top of 3% growth in the fourth quarter of 2020.

Higher cost inflation, partially offset by pricing and cost savings led by the Company's Comprehensive Continuous Improvement (CCI) program, resulted in a decline in gross profit margin of 180 basis points, or 150 basis points excluding special charges. Operating income was $276 million in the fourth quarter of 2021 compared to $275 million in the year-ago period. This increase included $31 million of special charges versus $3 million in the fourth quarter of last year and $2 million of transaction and integration expenses related to the acquisitions of Cholula and FONA versus $12 million in the fourth quarter of last year. Excluding special charges, as well as transaction and integration costs, adjusted operating income grew 6%, with minimal impact from currency, to $309 million in the fourth quarter compared to $290 million in the year-ago period. This increase was driven by the favorable impact of higher sales and CCI-led cost savings, partially offset by the impact of higher cost inflation.

Earnings per share was $0.73 in the fourth quarter of 2021 compared to $0.74 in the fourth quarter of 2020. Special charges and transaction and integration expenses lowered earnings per share by $0.11 in the fourth quarter of 2021 and $0.05 in the fourth quarter of 2020. Excluding these impacts, adjusted earnings per share was $0.84 in the fourth quarter of 2021 compared to $0.79 in the year-ago period. This 6% increase in adjusted earnings per share was driven primarily by higher sales, partially offset by higher cost inflation.

Fiscal Year 2021 Results

McCormick reported a 13% sales increase in 2021 compared to 2020, including a 2% favorable impact from currency. Sales from Cholula and FONA contributed 4% to the sales increase. Consumer segment sales grew 9%, or 7% in constant currency, driven by consumers' sustained preference for cooking more at home, fueled by the Company's brand marketing, strong digital engagement and new products, as well as acquisition growth. Flavor Solutions segment sales increased 19%, or 16% in constant currency, driven by incremental sales from acquisitions and growth driven equally from packaged food and beverage companies, as well as restaurant and other food service customers.

Gross profit margin declined 160 basis points versus the year-ago period and adjusted gross profit margin, excluding special charges and transaction and integration expenses, declined 140 basis points. This decline was driven by higher cost inflation, partially offset by pricing and cost savings led by the Company's CCI program. Operating income was $1.02 billion in 2021 compared to $1.00 billion in the prior year. This increase was driven by higher sales partially offset by gross margin compression and strategic investment spending, as well as higher special charges and transaction and integration expenses. In fiscal 2021, the Company recognized $51 million of special charges versus $7 million in 2020 and $35 million of transaction and integration expenses related to the acquisitions of Cholula and FONA versus $12 million in 2020. Excluding special charges, as well as transaction and integration expenses, adjusted operating income grew 8% to $1.10 billion compared to $1.02 billion in the year-ago period, or 6% in constant currency.

Earnings per share was $2.80 in 2021 compared to $2.78 in the prior year. The net impact of special charges, transaction and integration expenses, including an unfavorable income tax expense impact from a discrete item related to the acquisition of FONA, and the gain on the sale of the Company's minority stake in Eastern Condiments Private Ltd (Eastern) lowered earnings per share by $0.25 in 2021. Special charges and transaction and integration expenses lowered earnings per share by $0.05 in 2020. Excluding these impacts, adjusted earnings per share grew 8% to $3.05 in 2021 compared to $2.83 in 2020, driven primarily by higher adjusted operating income. 

Net cash provided by operating activities was $828 million in 2021 compared to $1.04 billion in 2020. The decrease was primarily due to the higher use of cash associated with working capital, including higher inventory levels to support increased demand and mitigate supply and service issues, and the payment of transaction and integration costs. 

Fiscal Year 2022 Financial Outlook 

McCormick's broad and advantaged global flavor portfolio enables the Company to meet the rising demand for flavor around the world. The Company is capitalizing on the growing consumer interests in healthy and flavorful cooking, digital engagement, trusted brands, and purpose-minded practices.  McCormick is sustainably positioned to continue on its growth trajectory through its alignment with consumer trends, the breadth and reach of its portfolio, and its effective growth strategies.

In 2022, the Company expects to grow sales by 3% to 5% compared to 2021, which in constant currency is 4% to 6%. McCormick expects sales growth to be driven by brand marketing, new products, category management and differentiated customer engagement, as well as pricing actions, which in conjunction with cost savings, are expected to offset anticipated inflationary pressures.

Operating income in 2022 is expected to grow by 13% to 15% from $1.02 billion in 2021. The Company anticipates integration expenses related to the FONA acquisition of approximately $3 million in 2022. In addition, McCormick expects approximately $30 million of special charges in 2022 that relate to previously announced organization and streamlining actions. Excluding the impact of integration expenses as well as special charges in 2022 and 2021, adjusted operating income is expected to increase 7% to 9%, which in constant currency is 8% to 10%.  

McCormick projects 2022 earnings per share to be in the range of $3.07 to $3.12, compared to $2.80 of earnings per share in 2021. The Company expects integration expenses, as well as special charges, to lower earnings per share by $0.10 in 2022. Excluding these impacts, the Company projects 2022 adjusted earnings per share to be in the range of $3.17 to $3.22, compared to $3.05 of adjusted earnings per share in 2021, which represents an expected increase of 4% to 6%, or in constant currency 5% to 7%. This reflects strong operating growth, partially offset by a 3% headwind from an anticipated increase in the Company's projected adjusted effective tax rate. For fiscal 2022, the Company expects strong cash flow and anticipates returning a significant portion to shareholders through dividends.

Business Segment Results

Consumer Segment

Consumer segment sales increased 10% from the fourth quarter of 2020, which includes a 2% increase from the Cholula acquisition. In constant currency, sales increased 9% driven by the Americas and Asia/Pacific regions.

• Consumer sales in the Americas rose 13% compared to the fourth quarter of 2020, with minimal impact from currency. The increase included a 3% contribution from the Cholula acquisition and broad-based growth across the branded portfolio.
   
• Consumer sales in Europe, Middle East and Africa (EMEA) declined 5% compared to the year-ago period, with minimal impact from currency. Sales declined due to lapping substantially higher demand in the year-ago period.
   
• Consumer sales in the Asia/Pacific region increased 16% compared to the year-ago period, or 11% in constant currency. This increase was driven by the recovery of demand compared to the year-ago period for products related to away-from-home consumption, as well as higher sales of cooking at-home products across the region.

Consumer segment operating income, excluding special charges and transaction expenses, increased 14% to $250 million in the fourth quarter of 2021 compared to $221 million in the year-ago period. In constant currency, Consumer operating income increased 13%. Higher sales, CCI-led cost savings and a planned reduction in brand marketing more than offset higher cost inflation. 

Flavor Solutions Segment

Flavor Solutions segment sales increased 14% compared to the fourth quarter of 2020, with the FONA and Cholula acquisitions contributing 7% to the increase. In constant currency, sales increased 12% led by the Americas and EMEA regions.

• In the Americas, Flavor Solutions sales rose 14% from the year-ago period, or 13% in constant currency. The increase was driven by an 11% contribution from the FONA and Cholula acquisitions as well as continued growth with packaged food and beverage companies and higher sales to branded foodservice customers.
   
• Flavor Solutions sales in EMEA increased 19% compared to the fourth quarter of 2020, or 16% in constant currency. Strong growth with quick service restaurants and branded foodservice customers combined with higher sales to packaged food and beverage companies drove the increase.
   
• Flavor Solutions sales in the Asia/Pacific region grew 4% compared to the fourth quarter of 2020. In constant currency, sales increased 1%. This increase was driven by higher sales to quick service restaurants, partially impacted by the timing of customers' promotional activities.

Flavor Solutions segment operating income, excluding special charges and transaction expenses, declined 16% to $58 million in the fourth quarter of 2021 compared to $70 million in the year-ago period. In constant currency, Flavor Solutions operating income decreased 15% driven by higher cost inflation and unfavorable product mix with a partial offset from higher sales and CCI-led cost savings.

Non-GAAP Financial Measures

The tables below include financial measures of adjusted gross profit, adjusted gross profit margin, adjusted operating income, adjusted operating income margin, adjusted income tax expense, adjusted income tax rate, adjusted net income and adjusted diluted earnings per share. These represent non-GAAP financial measures which are prepared as a complement to our financial results prepared in accordance with United States generally accepted accounting principles. These financial measures exclude the impact, as applicable, of the following:

Special charges – In our consolidated income statement, we include a separate line item captioned "Special charges" in arriving at our consolidated operating income. Special charges consist of expenses associated with certain actions undertaken by the Company to reduce fixed costs, simplify or improve processes, and improve our competitiveness and are of such significance in terms of both up-front costs and organizational/structural impact to require advance approval by our Management Committee. Upon presentation of any such proposed action (including details with respect to estimated costs, which generally consist principally of employee severance and related benefits, together with ancillary costs associated with the action that may include a non-cash component or a component which relates to inventory adjustments that are included in cost of goods sold; impacted employees or operations; expected timing; and expected savings) to the Management Committee and the Committee's advance approval, expenses associated with the approved action are classified as special charges upon recognition and monitored on an ongoing basis through completion.

Transaction and integration expenses associated with the Cholula and FONA acquisitions – We exclude certain costs associated with our acquisitions of Cholula and FONA in November and December 2020, respectively, and their subsequent integration into the Company. Such costs, which we refer to as "Transaction and integration expenses", include transaction costs associated with each acquisition, as well as integration costs following the respective acquisition, including the impact of the acquisition date fair value adjustment for inventory, together with the impact of discrete tax items, if any, directly related to each acquisition.

Income from sale of unconsolidated operations – We exclude the gain realized upon our sale of an unconsolidated operation in March 2021. The sale of our 26% interest in Eastern Condiments Private Ltd resulted in a gain of $13.4 million, net of tax of $5.7 million. The gain is included in Income from unconsolidated operations in our consolidated income statement.

We believe that these non-GAAP financial measures are important. The exclusion of the items noted above provides additional information that enables enhanced comparisons to prior periods and, accordingly, facilitates the development of future projections and earnings growth prospects. This information is also used by management to measure the profitability of our ongoing operations and analyze our business performance and trends.

These non-GAAP financial measures may be considered in addition to results prepared in accordance with GAAP, but they should not be considered a substitute for, or superior to, GAAP results. In addition, these non-GAAP financial measures may not be comparable to similarly titled measures of other companies because other companies may not calculate them in the same manner that we do. We intend to continue to provide these non-GAAP financial measures as part of our future earnings discussions and, therefore, the inclusion of these non-GAAP financial measures will provide consistency in our financial reporting. A reconciliation of these non-GAAP financial measures to the related GAAP financial measures is provided below:

(in millions except per share data)	Three Months Ended				Year Ended
	11/30/2021		11/30/2020		11/30/2021		11/30/2020
Gross profit	$   702.9		$   660.7		$  2,494.6		$ 2,300.4
Impact of transaction and integration expenses included in cost of goods sold (1)	—		—		6.3		—
Impact of special charges included in cost of goods sold (2)	4.7		—		4.7		—
Adjusted gross profit	$   707.6		$   660.7		$  2,505.6		$ 2,300.4
Adjusted gross profit margin (3)	40.9 %		42.4 % Werbung Mehr Nachrichten zur McCormick (Non Voting) Aktie kostenlos abonnieren E-Mail-Adresse Bitte überprüfe deine die E-Mail-Adresse. Benachrichtigungen von ARIVA.DE (Mit der Bestellung akzeptierst du die Datenschutzhinweise) -1 Vielen Dank, dass du dich für unseren Newsletter angemeldet hast. Du erhältst in Kürze eine E-Mail mit einem Aktivierungslink. Hinweis: ARIVA.DE veröffentlicht in dieser Rubrik Analysen, Kolumnen und Nachrichten aus verschiedenen Quellen. Die ARIVA.DE AG ist nicht verantwortlich für Inhalte, die erkennbar von Dritten in den „News“-Bereich dieser Webseite eingestellt worden sind, und macht sich diese nicht zu Eigen. Diese Inhalte sind insbesondere durch eine entsprechende „von“-Kennzeichnung unterhalb der Artikelüberschrift und/oder durch den Link „Um den vollständigen Artikel zu lesen, klicken Sie bitte hier.“ erkennbar; verantwortlich für diese Inhalte ist allein der genannte Dritte. Andere Nutzer interessierten sich auch für folgende News 18.04.24 - PR Newswire BlackRock Sustainable American Income Trust Plc - Transaction in Own Shares 18.04.24 - PR Newswire Capital Gearing Trust Plc - Transaction in Own Shares 18.04.24 - PR Newswire Miton UK Microcap Trust Plc - Director/PDMR Shareholding Auf zur INVEST am 26.+ 27.04.2024    Foto: Landesmesse Stuttgart GmbH - Jetzt kostenloses Ticket sichern! weiterlesen» Anzeige wo-site-teaser-box-16688_site-teaser-box_2024-04-17_09%253A00%253A00_2024-04-22_09%253A00%253A59