International acqusitions may be on the cards, Hershey
Hershey chief executive David West stated, at the manufacturer’s annual general meeting (AGM) on Tuesday, that the company still sees opportunity to grow abroad due to recent consolidation in the sector.
He also announced plans, at the gathering, for a strategic supply-chain assessment along with upgrades to Hershey facilities to bolster the company’s competitive edge.
“We must ensure that we continue to have a cost-effective, flexible supply chain that enables us to remain competitive in the global marketplace as we seek to meet the needs of our consumers and customers,” he stated.
West said that increasing capacity utilisation through modernising manufacturing capabilities would inform the bulk of new developments, but that no firm decisions have been taken, as of yet, in this regard.
Industry analysts claimed Hershey would face a tougher global competitive environment following Kraft’s recent acquisition of Cadbury but last month the US chocolate maker reported better-than-expected sales volumes.
And at the AGM the chocolate maker also reaffirmed the outlook that it provided last month, when it stated that 2010 net sales are expected to increase at least 6 per cent, including an approximate one point benefit from foreign currency exchange rates.
Hershey said it expects to achieve gross and adjusted income before interest and income taxes (EBIT) margin expansion that will result in a low-to-mid-teens increase in adjusted earnings per share-diluted on a percentage basis versus 2009.
Also in April, the company announced sales and earnings for the first quarter of 2010 were $1,407,843,000 compared with $1,236,031,000 for the first quarter of 2009.
It stated that reported net income for the first quarter of 2010 was $147,394,000 or $0.64 per share-diluted, compared with $75,894,000 or $0.33 per share-diluted for the comparable period of 2009.
According to the Wall Street Journal, both Moody's Investors Service and Standard & Poor's Rating Services recently raised their outlooks on Hershey to stable, citing improved operating performance.