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What Drove McCormick’s Industrial Segment Sales?



Industrial segment marked record growth

McCormick & Company’s (MKC) industrial segment registered sales of ~$0.5 billion in fiscal 4Q17, which represents a YoY (year-over-year) growth of 24.6%. The segment recorded improved sales across all its three regions, with the EMEA (Europe, the Middle East, and Africa) and the Americas reporting stellar growth.

During the quarter, the segment’s volumes improved 4.9%, while pricing added 1.3% to its top-line growth. Acquisitions remained the key revenue driver for the segment’s sales and added 17.3% to the sales growth rate. Favorable currency rates further supplemented the segment’s growth by 1.1%.

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Industrial segment’s sales by region

McCormick’s industrial segment sales increased 24.5% in the Americas, driven by incremental sales from the RB Foods acquisition, which contributed ~19% to the region’s sales growth rate. The region marked increased demand for snack seasonings in the United States (SPY) and Mexico, while savory flavor products registered double-digit growth. The segment’s branded foods also continued to grow in the United States.

The segment’s sales in the EMEA region soared 32.6%, driven by incremental sales from the acquisition of Giotti and RB Foods. The acquisitions added 22% to the region’s top-line growth rate, primarily led by Giotti. The region marked increased sales for both packaged food manufacturing companies and fast food restaurants. However, the company’s planned exit from the low margin business remained a drag.

The segment’s sales in the Asia-Pacific region rose 12.8%, driven by an improved performance in China (FXI). New product launches and promotional products for fast food restaurants drove the segment’s sales in China.


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