McCormick reports 12.7% rise in Q4 net earnings

US-based spices and seasonings manufacturer McCormick has reported that its net earnings for the fourth quarter of 2012 increased by 12.7% to $148.5m, compared to $131.7m in the same quarter in 2011, driven by strong sales growth in Europe, Middle East and Africa region, and a double-digit increase in consumer products sales in China.

The company’s net sales in the quarter ended 30 November increased by 3.1% to $1.14bn, compared to $1.11bn for the corresponding period in the fiscal 2011, due to pricing actions and acquisitions.

McCormick stated that it experienced a minor decline in sales in the Americas region due to supply chain disruptions and a slump in the Asia/Pacific industrial business.

For the full year 2012, net income increased by 8.9% to $407.8m, compared to $374.2m in 2011, while sales increased 9% to $4.01bn from $3.69bn a year earlier.

McCormick chairman, president and CEO Alan Wilson said that the company met its objectives for both sales growth and earnings per share in 2012, despite a challenging economic environment.

"Including the impact of acquisitions completed in 2011, we took our percentage of sales in emerging markets to 14% in 2012, up from 10% in 2011," Wilson said.

The company’s cost savings through Comprehensive Continuous Improvement (CCI) programme reached $56m.

Higher sales and the CCI programme enabled McCormick to achieve a 7% increase in operating income and a 9% increase in earnings per share.

For fiscal 2013, the company expects earnings per share of $3.15 to $3.23 and at least $45m in CCI cost savings.

McCormick, headquartered in Maryland, US, is a manufacturer, marketer and distributor of spices, herbs, and flavourings for retail, commercial and industrial markets.