Wrigley's sales break $4 billion barrier

By Peter Stiff

- Last updated on GMT

Related tags Cent Confectionery Chewing gum Sugar substitute Kraft

Wrigley, the world's largest manufacturer of chewing gum, yesterday
said sales grew by 14 per cent in 2005 to $4.2 billion (€3.5bn), a
company record.

The confectioner attributed the increases in sales and operating profit to a wider product offering and growth in new markets.

Increased sales are not surprising considering the booming global gum market, especially in sugar free segment.

The company's operating profits also grew eight per cent to $720.2 million.

Profit margins for 2005 rose to 54 per cent, up three per cent on the previous year.

Management said worldwide shipments had grown 16 per cent for the year, due to strong performances by its core brands and the contribution of the brands acquired from Kraft earlier in the year.

The acquisition of the various confectionery brands, including Altoids and Life Savers, from Kraft accounted for five per cent of the sales increase.

"The integration of the newest confectionery brands is going according to plan, and we will continue to invest in them as 2006 unfolds in order to lay the groundwork for their long-term growth and development,"​ said Ron Waters, chief operating officer.

North America sales increased 20 per cent over the year, with the acquired brands contributing 14 per cent to the growth.

Sales also increased in Europe and Asia.

Growth in Russia and Ukraine is credited for a European sales swell of eight per cent. The results were boosted by favourable currency exchange rates.

China leads the Asian region where sales grew by 26 per cent.

The company's year-end figures are curtailed by restructuring charges of $40 million of which the bulk were registered in the fourth quarter.

Operating profits for Wrigley's fourth quarter fell by 15 per cent, due to restructuring charges of $34 million.

However sales for the final quarter were $1.1 billion, an increase of 15 per cent

This increase was aided by acquired brands contributing 11 per cent of the sales growth.

In the US quarterly sales increased 37 per cent, again thanks to the newly acquired brands, which were responsible for three quarters of the sales growth.

In Europe shipments were up five per cent, attributed to growth in Central and Eastern Europe, particularly Russia.

Sales in Asia rose 16 per cent due to growth in China, Hong Kong and Vietnam.

Wrigley acquired several confectionery brands from Kraft in 2004 for $1.64 billion. Since then it has strived to extend the brands by launching new flavours.

At the start of 2006 the company launched eight new products in the US, three of which were extensions of the former Kraft brands.

Total US chewing gum sales, excluding Wal-Mart sales, stood at $944 million for 2005, up 23 per cent since 2002.

Sugar free gum is worth $730 million in the US, with sales increasing 54 per cent over the same period, according to figures from ACNielson.

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