US-based chewing gum firm Wrigley today posted full year growth in both operating profit and margins, thanks to international and developing market sales.
For the year ending 31 December 2007, the chewing gum company said operating profit was $963m, up 17 per cent from 2006. Wrigley attributed the growth to strong sales in Europe, the Middle East, Africa and India (EMEAI), and Asia.
In total, global sales climbed 15 per cent to a "new annual sales record" of $5.4bn.
According to Wrigley, these increases helped the company increase margins this year, an unusual result given the current commodity squeeze. Margins for the year were 52.3 per cent, a 0.3 percentage point increase compared to 2006.
"Given the challenging cost environment, we were pleased with the overall improvement in gross margins this year, following recent declines," stated Reuben Gamoran, senior vice president and chief financial officer. "We will continue to look for ways to offset margin pressure - resulting from higher input costs and new product activity - in order to maintain our strong gross margin position."
In celebration of crossing the $5bn sales barrier, the company also announced today plans to donate $5m to two charitable organisations - the International Youth Foundation and Conservation International (CI).
"Through these important programmes, we will create opportunities for our associates to get even more involved in local communities," said Duke Petrovich, Wrigley senior vice president and chief administrative officer.
In EMEAI, the company's largest region, operating profit increased 21 per cent to hit $710m while in Asia it went up by 15 per cent to $184m.
The depreciation of the US dollar helped boost Wrigley's sales in these areas because of favorable currency-exchange rates. The dollar fell 10 per cent against several currencies including the euro and the yen during the fourth quarter.
Net sales in the US were stagnant, resulting in a smaller profit increase of just three per cent in that region.
Total net sales for the fourth quarter rose $1.42bn, and operating profit went up 15 per cent.
The biggest increase was experienced in the EMEAI region, where net sales went up 31 per cent. Half of the jump was due to higher volumes, with double-digit gains across France, Germany, Poland, India and Russia.
In Asia, quarterly sales were up 23 per cent, with more than half of the increase attributed by the company to strong shipment growth in China.