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( BW)(CAMPBELL-SOUP-CO)(CBE) Final Results
Business Editors
UK REGULATORY NEWS
CAMDEN, N.J.--(BUSINESS WIRE)--Sept. 11, 2003--
Campbell Reports Fourth Quarter and Fiscal 2003 Results
Campbell Soup Company (NYSE:CPB) today reported diluted earnings per
share for the fourth quarter ended August 3, 2003 of $.18, compared to
$.13 recorded in the year-ago quarter. Earnings per share in the
year-ago quarter included amortization expense of approximately $.04,
since eliminated under SFAS No. 142, which the company adopted at the
start of fiscal 2003, and approximately $.01 for costs related to the
Australian manufacturing reconfiguration.
For the quarter, net sales increased 19 percent to $1,455 million. The
following factors drove the increase:
-- Volume and mix increased 6 percent
-- Price added 2 percent
-- Reduced promotional spending added 3 percent
-- Currency added 5 percent
-- Acquisitions contributed 3 percent
-- The fourth quarter included 14 weeks compared to 13 weeks in the
year-ago period, with the additional week accounting for
approximately 7 - 8 percentage points of the sales increase.
For the fourth quarter of fiscal 2003, wet soup shipments compared to
a year ago were up 7 percent in the U.S. and 3 percent outside the
U.S., resulting in a 6 percent increase worldwide. In the U.S.,
ready-to-serve shipments rose 29 percent, broth shipments increased 22
percent, and condensed soup shipments declined 5 percent.
Total marketing investment for the quarter increased 17 percent.
Currency and acquisitions accounted for 7 percentage points of the
increase.
Net earnings were $74 million versus $55 million a year earlier.
Earnings for the year-ago quarter included amortization expense of $14
million, since eliminated under SFAS No. 142, and $4 million for costs
related to the Australian manufacturing reconfiguration.
For the fiscal 2003 year, the company reported diluted earnings per
share, before the cumulative effect of the accounting change, of $1.52
compared to $1.28 for the prior year. Earnings per share for fiscal
2002 included amortization expense of approximately $.13 per share,
since eliminated under SFAS No. 142, and approximately $.03 per share
of costs related to the Australian manufacturing reconfiguration.
For the year, net sales increased 9 percent to $6,678 million. The
following factors drove the increase:
-- Volume and mix increased 3 percent
-- Price added 1 percent
-- Currency added 3 percent
-- Acquisitions contributed 2 percent
-- The fiscal year included 53 weeks compared to 52 weeks in the
prior year, with the additional week accounting for approximately
1 - 2 percentage points of the sales increase.
For fiscal year 2003, wet soup shipments compared to a year ago were
up 2 percent in the U.S. and 2 percent outside the U.S., resulting in
a 2 percent increase worldwide. In the U.S., ready-to-serve soup
shipments rose 8 percent, broth shipments increased 13 percent, and
condensed soup shipments declined 6 percent.
Total marketing investment was up 7 percent with currency and
acquisitions accounting for 5 percentage points of the increase.
Net earnings, before the cumulative effect of the accounting change
for fiscal 2003, were $626 million versus $525 million for the prior
year. Net earnings in fiscal 2002 included amortization expense of $54
million, since eliminated upon the adoption of SFAS No. 142, and costs
of $14 million related to the Australian manufacturing
reconfiguration.
In addition, the company reported cash flow from operations of $873
million compared with $1,017 million last year. The year-ago result
benefited from a significant reduction in working capital to record
low levels, which have been maintained in fiscal 2003. Capital
expenditures for fiscal 2003 were $283 million, slightly higher than
the $269 million of a year ago.
Douglas R. Conant, Campbell's President and Chief Executive Officer,
said, "We have now delivered two years of top-line growth and we are
positioned to build on this performance in fiscal 2004. Our results in
fiscal 2003 demonstrate that our investments in quality, new products
and packaging, and improved marketing are taking hold. In our North
America Soup business, we have continued to deliver strong growth in
our ready-to-serve soups and broths and we have laid the foundation
for more growth with the introduction of our 'M'm! M'm! Good! To Go'
convenience line. In our condensed soup business, we are taking steps
to profitably improve trends through continued product and packaging
improvements, the rollout of our innovative gravity fed shelving
system, and by focusing on those segments with the most competitive
advantages, including kids and cooking. We have just launched our new
advertising campaign, 'Make It Campbell's Instead,' which covers both
ready-to-serve and condensed varieties."
Conant continued, "In our North America Sauces and Beverages segment,
we are also seeing the positive impact of increased investments behind
such brands as 'Pace' Mexican sauces, 'Prego' pasta sauces and 'V8'
vegetable juices. In our Biscuits and Confectionery segment,
Pepperidge Farm and Arnotts delivered strong performances. We have
gained share in several of these businesses and we are continuing to
fill the innovation pipeline with convenient, on-trend products. As we
begin our new fiscal year, we are clearly a much more competitive
company, far better positioned to win with our customers and our
consumers. The table is set for stronger performance."
For fiscal year 2004, the company expects earnings per share to be
approximately $1.58. This fiscal 2004 projection includes
approximately $.03 for incremental pension and post-retirement medical
expense and reflects the company's continued commitment to maintaining
a significant level of marketing investment. In addition, fiscal 2003
had the benefit from the 53rd week of approximately $.02. For the
first quarter of fiscal year 2004, the company expects earnings to be
between $.48 - $.50 per share.
A summary of fiscal 2003 results by segment follows. For comparative
purposes, prior year business results have been adjusted to exclude
the amortization eliminated under SFAS No. 142.
North America Soup and Away From Home
Sales for North America Soup and Away From Home were $2,606 million, a
3 percent increase compared with a year ago. Operating earnings of
$632 million were flat compared to a year earlier. U.S. soup shipments
were up 2 percent over the prior year. Further details include:
-- Ready-to-serve soup shipments increased 8 percent behind the
launch of Campbell's "Soup At Hand" sippable soups and strong
shipment growth of "Campbell's Chunky" and "Campbell's Select"
soups.
-- New Campbell's "Soup At Hand" sippable soups finished the year
with strong results, as sales exceeded expectations. As previously
announced, Campbell is now shipping 7 new varieties of "Soup At
Hand" as part of its "M'm! M'm! Good! To Go" convenience platform.
-- Both "Campbell's Chunky" and "Campbell's Select" soups in
microwavable bowls are now shipping as part of the "M'm! M'm!
Good! To Go" convenience platform. Initial customer and consumer
acceptance behind this initiative have been strong.
-- Condensed soups declined 6 percent for the year. In the fourth
quarter, the company began shipping condensed soups with new
easy-open lids and improved chicken varieties.
-- "Swanson" broth shipments were up 13 percent as consumers
continued to respond to advertising and promotion supporting broth
as an everyday ingredient for cooking.
-- Away From Home soup sales were up with good growth in all soup
formats. Stockpot had an especially strong year. These results
were offset by volume reductions in low margin, non-soup products.
-- Canadian soup sales showed good growth, helped by the regional
introduction of new "Campbell's Gardennay" soups in aseptic
packages.
North America Sauces and Beverages
North America Sauces and Beverages sales were up 5 percent to $1,246
million and operating earnings increased 12 percent to $289 million.
These results were achieved behind strong gains in "Pace" Mexican
sauces, "V8" vegetable juices, "Campbell's" tomato juice and the
introduction of new "V8 Splash" Smoothies and "Pace Mexican
Creations." Additional highlights include:
-- "Prego" Hearty Meat Sauces were introduced during the fourth
quarter. Retail acceptance and initial consumer purchases have
been strong.
-- "Pace Mexican Creations" sauces are the largest single "Pace"
brand initiative since Campbell's acquisition of the company.
"Pace," the only brand of Mexican sauce advertising
coast-to-coast, is the market share leader west of the
Mississippi.
-- Consumer demand for "V8" vegetable juices continued to respond
favorably to advertising support in fiscal 2003. The "V8 Splash"
juice drink brand generated sales growth for the year behind the
successful introduction of "V8 Splash" Smoothies.
Biscuits and Confectionery
Sales for Biscuits and Confectionery increased 18 percent to $1,774
million compared to last year. The Snack Foods Limited acquisition in
Australia accounted for 8 percentage points of the sales increase and
currency contributed 4 percentage points.
Operating earnings increased 14 percent to $212 million, with currency
translation accounting for 4 percentage points of the growth.
Operating earnings included $1 million of costs related to the
Australian manufacturing reconfiguration compared to $20 million in
fiscal year 2002. In fiscal year 2003, the company recorded
transitional expenses of $10 million related to the closure of the
Pepperidge Farm bakery in Norwalk, CT and the startup expenses of the
new bakery in Bloomfield, CT. Additional details include:
-- Pepperidge Farm delivered strong sales performance in its cookies,
crackers and bakery segments. New "Goldfish" Colors crackers,
introduced in the first quarter of fiscal 2003, and Pepperidge
Farm Mini Distinctive cookie varieties, introduced in the fourth
quarter, have delivered strong sales.
-- At Arnotts, sales expanded on growth in core cookie lines and the
addition of Snack Foods Limited. Following the close of the fiscal
year, Arnotts signed an agreement to purchase three chocolate
biscuit brands, subject to regulatory approval. These brands are
expected to complement Arnotts existing biscuit business.
-- Godiva Chocolatier's worldwide sales grew despite an uncertain
global economic environment. In fiscal 2003, Godiva opened 25 new
stores worldwide while closing 15 unprofitable stores. Same stores
sales declined in North America, but rose in Japan and Europe.
International Soup and Sauces
International Soup and Sauces sales increased 14 percent to $1,052
million. Favorable currency translations and the acquisition of Erin
Foods accounted for the sales increase. Operating earnings increased 7
percent to $128 million, due primarily to favorable currency
translation, partially offset by $8 million in costs related to the
discontinuance of certain European co-packing contracts. Strong
performance of instant dry soups across Europe was offset by weakness
in the wet soup and sauces businesses in the UK, France and Germany.
Further details include:
-- The UK shortfall reflects declines in "Homepride" sauces and
"Campbell's" branded soups.
-- In Germany, a significant portion of the private-label soup
business is being discontinued. The dry soup brand, "Heisse
Tasse," performed strongly.
-- In France, volume declined in the fourth quarter, driven by
unusually warm weather conditions and aggressive competitive
pressures.
-- In Australia and Asia, both soups and sauces delivered solid top
and bottom line growth.
Conference Call
The company will host a conference call to discuss these results on
September 11, 2003 at 10:00 a.m. Eastern Standard Time. U.S.
participants may access the call at 1-888-730-9134 and non-U.S.
participants at 1-773-756-4630. Participants should call at least five
minutes prior to the starting time. The passcode is Campbell Soup
Company. The conference leader is Len Griehs. The call will also be
broadcast live over the Internet at http://www.campbellsoup.com and
can be accessed by clicking on the Webcast banner. A recording of the
call will be available approximately two hours after it is completed
through midnight September 16, 2003 at 1-800-967-7626 or
1-402-998-0917.
Forward-Looking Statements
This release contains "forward-looking statements" which reflect the
company's current expectations about its future plans and performance,
including statements concerning marketing investments, sales and
earnings. These forward-looking statements rely on a number of
assumptions and estimates which could be inaccurate and which are
subject to risks and uncertainties. Actual results could vary
materially from those anticipated or expressed in any forward-looking
statement made by the company. Please refer to the company's most
recent Form 10-K and subsequent filings for a further discussion of
these risks and uncertainties. The company disclaims any obligation or
intent to update the forward-looking statements in order to reflect
events or circumstances after the date of this release.
About Campbell Soup Company
Campbell Soup Company is a global manufacturer and marketer of high
quality soup, sauces, beverage, biscuits, confectionery and prepared
food products. The company owns a portfolio of more than 20
market-leading businesses each with more than $100 million in sales.
They include "Campbell's" soups worldwide, "Erasco" soups in Germany
and "Liebig" soups in France, "Pepperidge Farm" cookies and crackers,
"V8" vegetable juices, "V8 Splash" juice beverages, "Pace" Mexican
sauces, "Prego" pasta sauces, "Franco-American" canned pastas and
gravies, "Swanson" broths, "Homepride" sauces in the United Kingdom,
"Arnott's" biscuits in Australia and "Godiva" chocolates around the
world. The company also owns dry soup and sauce businesses in Europe
under the "Batchelors," "Oxo," "Lesieur," "Royco," "Liebig," "Heisse
Tasse," "Bla Band" and "McDonnells" brands. The company is ably
supported by 25,000 employees worldwide. For more information on the
company, visit Campbell's website on the Internet at
www.campbellsoup.com.
CONTACT: Jerry S. Buckley (Media)
(856) 342-6007
Leonard F. Griehs (Analysts)
(856) 342-6428
CAMPBELL SOUP COMPANY CONSOLIDATED
STATEMENTS OF EARNINGS
(millions, except per share amounts)
THREE MONTHS ENDED
------------------
August July
3, 2003 28, 2002
------------- -------------
Net sales $ 1,455 $ 1,223
------------- -------------
Costs and expenses
Cost of products sold 858 686
Selling, general and
administrative expenses 442 409
------------- -------------
Total costs and expenses 1,300 1,095
------------- -------------
Earnings before interest and taxes 155 128
Interest, net 45 44
------------- -------------
Earnings before taxes 110 84
Taxes on earnings 36 29
------------- -------------
Net earnings $ 74 $ 55
============= =============
Per share - basic
Net earnings $ .18 $ .13
============= =============
Dividends $ .1575 $ .1575
============= =============
Weighted average shares outstanding
- basic 411 411
============= =============
Per share - assuming dilution
Net earnings $ .18 $ .13
============= =============
Weighted average shares outstanding
- assuming dilution 411 411
============= =============
In the first quarter of fiscal 2003, the company adopted Statement of
Financial Accounting Standards No. 142 "Goodwill and Other Intangible
Assets." In accordance with the standard, the company discontinued the
amortization of goodwill and indefinite-lived intangible assets. Net
earnings for the quarter ended July 28, 2002 would have been $69 or
$.17 per diluted share had the provisions of the standard been adopted
at the beginning of the prior year.
The period ended August 3, 2003 had 14 weeks. The period ended July
28, 2002 had 13 weeks.
CAMPBELL SOUP COMPANY CONSOLIDATED
STATEMENTS OF EARNINGS
(millions, except per share amounts)
TWELVE MONTHS ENDED
-------------------
August July
3, 2003 28, 2002
------------- ------------
Net sales $ 6,678 $ 6,133
------------- ------------
Costs and expenses
Cost of products sold 3,805 3,443
Selling, general and
administrative expenses 1,768 1,705
Restructuring charge - 1
------------- ------------
Total costs and expenses 5,573 5,149
------------- ------------
Earnings before interest and taxes 1,105 984
Interest, net 181 186
------------- ------------
Earnings before taxes 924 798
Taxes on earnings 298 273
------------- ------------
Earnings before cumulative
effect of accounting change 626 525
Cumulative effect of accounting change 31 -
------------- ------------
Net earnings $ 595 $ 525
============= ============
Per share - basic
Earnings before cumulative
effect of accounting change $ 1.52 $ 1.28
Cumulative effect of accounting change (.08) -
------------- ------------
Net earnings $ 1.45 $ 1.28
============= ============
Dividends $ .63 $ .63
============= ============
Weighted average shares outstanding - basic 411 410
============= =============
Per share - assuming dilution
Earnings before cumulative
effect of accounting change $ 1.52 $ 1.28
Cumulative effect of accounting change (.08) -
------------- ------------
Net earnings $ 1.45 $ 1.28
============= ============
Weighted average shares outstanding
- assuming dilution 411 411
============= ============
In the first quarter of fiscal 2003, the company adopted Statement of
Financial Accounting Standards No. 142 "Goodwill and Other Intangible
Assets." In accordance with the standard, the company discontinued the
amortization of goodwill and indefinite-lived intangible assets. Net
earnings for the twelve months ended July 28, 2002 would have been
$579 or $1.41 per diluted share had the provisions of the standard
been adopted at the beginning of the prior year.
In connection with the adoption of this new standard, the company also
recognized a non-cash charge of $31 (net of a $17 tax benefit) as a
cumulative effect of accounting change for the write-down of goodwill
of one business unit in the first quarter of fiscal 2003.
Fiscal 2003 had 53 weeks. Fiscal 2002 had 52 weeks.
CAMPBELL SOUP COMPANY CONSOLIDATED
SUPPLEMENTAL SCHEDULE OF SALES AND EARNINGS
(millions, except per share amounts)
THREE MONTHS ENDED
------------------
August July Percent
Sales 3, 2003 28, 2002 Change
----- --------- --------- -------
Contributions:
North America Soup and Away
From Home $ 436 $ 390 12%
North America Sauces and
Beverages 326 274 19%
Biscuits and Confectionery 444 343 29%
International Soup and
Sauces 249 216 15%
--------- ---------
Total sales $1,455 $1,223 19%
========= =========
Earnings
--------
Contributions:
North America Soup and Away
From Home $ 71 $ 73 -3%
North America Sauces and
Beverages 69 61 13%
Biscuits and Confectionery 45 28 61%
International Soup and
Sauces 31 30 3%
--------- ---------
Total operating earnings 216 192 13%
Unallocated corporate expenses (61) (46)
--------- ---------
Earnings before interest
and taxes 155 146 6%
Interest, net (45) (44)
Taxes on earnings (36) (33)
--------- ---------
Net earnings $ 74 $ 69 7%
========= =========
Net earnings per share -
assuming dilution $ .18 $ .17 6%
========= =========
Results for the period ended July 28, 2002 have been restated to
reflect the pro forma impact of SFAS No. 142. Amortization expense of
$18 ($14 after tax) has been eliminated from the prior period results.
As reported net earnings for the prior period were $55 or $.13 per
share.
Earnings contributions from Biscuits and Confectionery include the
effect of costs associated with the Australian manufacturing
reconfiguration plan. In the fourth quarter of fiscal 2002, costs were
$6 pre-tax ($4 after tax).
The period ended August 3, 2003 had 14 weeks. The period ended July
28, 2002 had 13 weeks.
CAMPBELL SOUP COMPANY CONSOLIDATED
SUPPLEMENTAL SCHEDULE OF SALES AND EARNINGS
(millions, except per share amounts)
TWELVE MONTHS ENDED
-------------------
August July Percent
Sales 3, 2003 28, 2002 Change
----- --------- --------- -------
Contributions:
North America Soup and Away
From Home $ 2,606 $ 2,524 3%
North America Sauces and
Beverages 1,246 1,182 5%
Biscuits and Confectionery 1,774 1,507 18%
International Soup and
Sauces 1,052 920 14%
--------- ---------
Total sales $ 6,678 $ 6,133 9%
========= =========
Earnings
--------
Contributions:
North America Soup and Away
From Home $ 632 $ 634 0%
North America Sauces and
Beverages 289 257 12%
Biscuits and Confectionery 212 186 14%
International Soup and
Sauces 128 120 7%
--------- ---------
Total operating earnings 1,261 1,197 5%
Unallocated corporate expenses (156) (143)
--------- ---------
Earnings before interest and
taxes 1,105 1,054 5%
Interest, net (181) (186)
Taxes on earnings (298) (289)
--------- ---------
Earnings before cumulative
effect of accounting
change 626 579 8%
Cumulative effect of
accounting change (31) -
--------- ---------
Net earnings $ 595 $ 579 3%
========= =========
Net earnings per share before
cumulative effect of
accounting change
- assuming dilution $ 1.52 $ 1.41 8%
========= =========
Results for the period ended July 28, 2002 have been restated to
reflect the pro forma impact of SFAS No. 142. Amortization expense of
$70 ($54 after tax) has been eliminated from the prior period results.
As reported net earnings for the prior period were $525 or $1.28 per
share.
Earnings contributions from Biscuits and Confectionery include the
effect of costs associated with the Australian manufacturing
reconfiguration plan. In the twelve month period ended August 3, 2003,
costs were both $1 pre- and after tax. In the twelve month period
ended July 28, 2002, costs were $20 pre-tax ($14 after tax).
Fiscal 2003 had 53 weeks. Fiscal 2002 had 52 weeks.
CAMPBELL SOUP COMPANY CONSOLIDATED
BALANCE SHEETS
(millions)
August July
3, 2003 28, 2002
---------- ----------
Current assets $ 1,290 $ 1,199
Plant assets, net 1,843 1,684
Intangible assets, net 2,821 2,534
Other assets 251 304
---------- ----------
Total assets $ 6,205 $ 5,721
========== ==========
Current liabilities $ 2,783 $ 2,678
Long-term debt 2,249 2,449
Nonpension postretirement benefits 304 319
Other liabilities 482 389
Shareowners' equity (deficit) 387 (114)
---------- ----------
Total liabilities and shareowners' equity
(deficit) $ 6,205 $ 5,721
========== ==========
Total debt $ 3,528 $ 3,645
========== ==========
Cash and cash equivalents $ 32 $ 21
========== ==========
Certain reclassifications were made to prior year financial
statements.
Short Name: Campbell Soup Co.
Category Code: FR
Sequence Number: 00009675
Time of Receipt (offset from UTC): 20030911T114748+0100
--30--CF/ph* KO/uk
CONTACT: Campbell Soup Company
KEYWORD: NEW JERSEY UNITED KINGDOM INTERNATIONAL EUROPE
INDUSTRY KEYWORD: FOODS/BEVERAGES RETAIL EARNINGS
SOURCE: Campbell Soup Co
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