Wrigley identifies key factors behind growth
highlight the key areas that it thinks will fuel future growth.
Company president Bill Wrigley, Jr identified a global sales and distribution network that spans more than 180 countries, a flexible and efficient global supply chain, strategic innovation driving product differentiation and an acquisition strategy that drives portfolio diversity.
"I think you'll agree that the Wrigley Company is extremely well positioned for future growth," he said.
Chief operating officer Ron Waters expanded on Wrigley's comments, highlighting the company's business performance in 2005.
"We took aim at an ambitious financial target, and we hit it, delivering record high volumes, sales and earnings," he said. These results were accomplished while "we boosted our core gum business, continued to expand our 'home grown' non-gum confections, completed the integration of the 2004 Joyco acquisition and closed the largest acquisition ever made by the company."
He said that the addition of new brands such as Altoids, Life Savers, Creme Savers and Sugus "dramatically accelerates our evolution as a confectionery company."
Wrigley's earnings per share grew 5 per cent to a record $2.29 in 2005, despite a $.12 per share charge for costs tied to the closure of two U.S. facilities as part of a restructuring of its North American production network that was announced last June. Excluding the restructuring charge, earnings per share were within the Company's stated long-term goal of 9 to 11 per cent.
Record sales of $4.2 billion - a 14 per cent increase over 2004 - resulted from a 9 per cent sales increase of Wrigley products and another 5 per cent increase coming from brands acquired in the Kraft transaction.
Waters said new products once again helped power the Company's success in 2005. They accounted for 17 per cent of net sales, including the launch of seventy-two new items last year (exclusive of the Kraft acquisition).
The innovations originated not only from the Company's main research and development team in the US, but also in satellite research functions in Spain, China and India that leverage Wrigley's knowledge of local consumers to create sales-generating flavours, formats and packaging.
Waters credited a nine per cent increase in gum sales in 2005 to strong performance of the company's three largest gum brands - Orbit, Extra and Doublemint - with innovations in flavours, packaging and format. Growth in the US in 2005 elevated Orbit to the number two gum brand in the US, trailing only Wrigley's Extra brand.
In terms of non-gum confections, the company's footprint is still relatively small. However, thanks to the Boomer, Solano and Pim Pom brands acquired from Joyco in 2004, the Altoids, Life Savers, Creme Savers and Sugus brands acquired from Kraft in 2005, and brand extensions such as Extra Mints and Doublemint Twins Mints, that footprint is growing and those products are becoming an important part of the global Wrigley portfolio.
"We believe we are on track with our long-term plan," said Wrigley. "And we are confident in the potential of these great brands to grow and add value."
