McCormick posted an 11.9% increase in its full-year sales, with the acquired Frank’s and French’s brands contributing 8% to the rise.
For the 12 months to 30 November 2018, net sales were $5.41 billion, with new products also contributing to the increase.
Operating income was up 28.6% for the year to $903.3 million, driven by higher sales as well as decreases in charges and in transaction expenses from the acquisition of the Frank’s and French’s brands, which it bought in 2017.
However, growth slowed in McCormick’s fourth quarter, with net sales increasing by 0.5% to $1.5 billion.
In both the company’s flavour solutions segment and its consumer segment, fourth-quarter operating income, excluding special charges, transaction and integration expenses, decreased 3%. Higher freight costs and investments in brand marketing partially contributed to the decline.
McCormick CEO Lawrence Kurzius said: “The breadth and reach of our global flavour portfolio continues to meet the demand for flavour around the world and drive differentiated growth. In 2018, we delivered another year of record financial results through the successful execution of our strategies, including the completion of the Frank’s and French’s integration, and the engagement of our employees around the world.
“We delivered double-digit sales, adjusted operating income and adjusted earnings per share growth in 2018. Our sales growth and focus on profit realisation drove strong results across both our consumer and flavour solutions segments.
“In addition to our solid base business and new product growth in both segments, we benefited from incremental sales from our acquired Frank’s and French’s brands. We successfully completed the integration of these brands in 2018 and have created value, achieved synergies and obtained results according to our plan.”
He added: “The top-tier financial performance we delivered in 2018 was supported by our unwavering commitment to doing what’s right for people, our communities and the planet, providing us with solid momentum heading into 2019. We are continuing to capitalise on the global and growing consumer interests in healthy, flavourful eating, the source and quality of ingredients, and sustainable practices.”
In 2019, McCormick expects sales to grow compared to 2018 by between 1% and 3%, which will consist entirely of organic growth as the company has no incremental sales impact from acquisitions. It also expects to drive sales growth with new products, brand marketing and expanded distribution. Operating income in 2019 is expected to grow between 10% and 12%.
© FoodBev Media Ltd 2024