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The MD&A is organized as follows:
Page 15 Business Overview describes our global
operations, strategy, growth initiatives and segments.
Page 18 Results of Operation compares the financial
results for 2007 to 2006 and also compares financial results
for 2006 to 2005.
Page 22 Liquidity and Financial Condition supplies
information regarding our cash flow and financing.
Page 25 Acquisitions profiles a 2007 agreement to
acquire the Lawry’s business and our 2006 acquisition of
Simply Asia Foods.
Page 26 Restructuring Activities reviews our three-year
plan to improve margins.
Page 28 A graph showing Stock Price Performance, is
followed by our assessment of Market Risk Sensitivity, our Contractual Obligations and Commercial Commitments, the impact of Recently Issued Accounting
Pronouncements, our use of Critical Accounting
Estimates and Assumptions, and our comments regarding Forward-Looking Information.
The information in the charts and tables in the MD&A are
for
the years ended November 30. All dollars are in millions, except
per share data. Unless otherwise indicated, the results include the
impact of our restructuring activities for
all years presented.
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BUSINESS OVERVIEW
Business Description
McCormick is a global leader in the manufacture, marketing
and distribution of spices, herbs, seasonings and other flavors
to the entire food industry. Customers range from retail
outlets and food service providers to food manufacturers.
Founded in 1889 and built on a culture of Multiple
Management, we have approximately 7,500 employees.
Our major sales, distribution and production facilities are
located in North America and Europe. Additional facilities are
based in Mexico, Central America, Australia, China,
Singapore, Thailand and South Africa. In 2007, 41% of sales
were outside the United States.
We operate in two business segments, consumer and
industrial. Consistent with market conditions in each segment,
our consumer business has a higher overall profit margin
than our industrial business.
Across both segments, we have the customer base and
product breadth to participate in all types of eating occasions,
whether it is cooking at home, dining out, purchasing a quick
service meal or enjoying a snack.
A Sustainable Strategy
Our strategy – to improve margins, invest in our business
and increase sales and profits – has been behind our
success over the past 10 years and is our plan for growth in
the future.
During the past five years, this strategy has led to
average annual sales growth of 7% with acquisitions driving
approximately one quarter of the increase. Gross profit
margin has risen from 39.1% in 2002 to 40.9% in 2007 and
driven increases in operating income and net income.
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