News Home
Articles
reported its financial results for the fourth quarter and year ended December 31, 2009. The highlights include:Adjusted Operating Earnings decreased to 29,1 million CAD from 33,8 million CAD;
Basic EPS decreased to 0,59 CAD compared to 1,04 CAD last year;
Full year Adjusted Operating Earnings increased to 120,5 million CAD.
Note: Adjusted Operating Earnings are defined as earnings from operations before restructuring and other related costs and other income (expense). Adjusted Earnings per Share («Adjusted EPS») are defined as basic earnings per share adjusted for the impact of restructuring and other related costs, net of tax.
«As a company, our goal is to deliver higher levels of growth by expanding into new categories and markets», said Richard Lan, President and CEO. «The earnings decline in the fourth quarter reflects important investments in new products to drive growth. These included expanding our sweet goods with Cadbury(TM) Snack Cakes, and launching Dempster´s(R) OvenFresh(TM) ready-to-bake premium dinner breads. For the year 2009, we achieved solid earnings and margin recovery following the sharp commodity cost increases of the previous year. In 2010, we are continuing to place a strong emphasis on innovation to support our leading brands and market shares and investing in our plant network, such as construction of the new Ontario bakery, to increase scale and efficiency».
Financial Overview
Sales for the fourth quarter declined to 432,2 million CAD from 445,0 million CAD in the prior year, mainly due to unfavourable currency translation of the Company´s sales in the United Kingdom and United States as the Canadian Dollar (CAD) appreciated against the British Pound and US-Dollar compared to last year. Volume increases in the fresh and frozen North American bakeries and pasta business were offset by continued lower sales volume in the U.K. bakery operations and the fresh sandwiches business in Canada. Sales for the year were consistent at 1,7 billion CAD.Adjusted Operating Earnings in the quarter decreased to 29,1 million CAD from 33,8 million CAD but increased from 97,6 million CAD to 120,5 million CAD for the full year. The fourth quarter decline was mostly due to the timing of promotional activities, higher marketing and other expenses mostly in the Fresh Bakery segment. Additionally, a short-term increase in trade investment in the Canadian marketplace, the impact of currency changes and higher manufacturing costs in the U.K. bakery operations reduced earnings in the quarter. Lower commodity costs partly offset these increases. Reduced Adjusted Operating Earnings and lower other income contributed to lower net earnings, which declined from 26,5 million CAD (1,04 CAD per share) last year to 15,0 million CAD (0,59 CAD per share) in the fourth quarter of 2009. Net earnings for the full year increased from 64,9 million CAD (2,55 CAD per share) to 77,5 million CAD (3,05 CAD per share).
Business Segment Review - Fresh Bakery
Fresh bakery products, sweet goods, sandwiches, specialty fresh pasta, sauces.
Fourth quarter sales of 279,2 million CAD were consistent with last year as increased sales volumes in the fresh bakery and pasta businesses were offset by lower sales volume in the fresh sandwiches business.Adjusted Operating Earnings in the quarter decreased to 20,1 million CAD from 25,4 million CAD mostly due to increased promotional activities and higher marketing and other expenses. New product launches at the end of the third quarter of 2009, primarily the Dempster´s(R) OvenFresh(TM) line of white and multigrain fresh par-baked breads and Cadbury(TM) Snack Cakes, were supported by promotional and marketing campaigns in the fourth quarter which contributed to increase expenses compared to the prior year. Additionally, operating earnings were reduced by a short-term increase in trade investment in the Canadian marketplace. Partly offsetting these increases was the benefit of lower commodity costs. Adjusted Operating Earnings for the full year increased to 91,5 million CAD from 76,5 million CAD last year.
Business Segment Review - Frozen Bakery
North American and United Kingdom frozen bakery products; including frozen par-baked and specialty bakery products.
Sales declined to 152,9 million CAD from 165,8 million CAD last year, mainly driven by the impact of unfavourable currency translation of the Company´s sales in the U.K. and U.S. as the Canadian Dollar appreciated against the British pound and US-Dollar compared to the prior year. Sales volumes increased in the North American frozen bakeries due to the addition of new customers. However, improved volumes in North America were offset by lower volumes in the U.K. bakery operations due to a trade down in consumers' purchases from premium to staple products and less promotional activity compared to the prior year.Adjusted Operating Earnings in the quarter were 9,1 million CAD, slightly higher than last year. The benefits of lower raw material costs and timing of promotional activities were partly offset by increased supply chain investment in the U.K. bakery operations, and the impact of unfavorable currency translation of US-Dollar denominated sales. For the full year, Adjusted Operating Earnings increased to 29,0 million CAD from 21,1 million CAD last year.
