McCormick & Co Inc (NYSE:MKC) Q3 2020 Earnings Conference Call - Final Transcript

Sep 29, 2020 • 08:00 am ET

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McCormick & Co Inc (NYSE:MKC) Q3 2020 Earnings Conference Call - Final Transcript

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Presentation
Executive
Mike Smith

5% to 7% increase, which, in constant currency, is a 6% to 8% increase.

In summary, we are projecting another strong year of underlying operating performance while doing as right, by first, protecting our employees and recognizing the contributions; second, by supporting our communities through relief efforts; and finally, by making supply chain and brand marketing investments to meet our expected growth into fiscal 2021. And while we are not providing guidance for next year, I want to note that we do expect constant currency organic sales growth in both our segments in 2021, as Lawrence mentioned earlier.

Additionally, I want to provide you a brief update on our ERP replacement program. We indicated in March that we were rephasing the timing of this program to focus on the challenging environment during the pandemic. We remain excited and committed to our global transformation initiative. While the environment is still challenging, we have continued to work on this program. The delay provided us an opportunity to do some re-planning, and as SAP has improved their product, our ramp-up will be on a new version with a broader suite of applications, allowing us to save an upgrade cycle as well. We have not completed our planning yet, but we do not anticipate any major go-lives in 2021. We will provide further updates on our ERP program on our earnings call in January.

Finally, I would also like to mention that yesterday our Board of Directors approved a 2-for-1 stock split, with one share of common stock for common stock non-voting to be issued for each like outstanding share. The additional shares will be distributed on November 30. Trading is expected to begin on a split-adjusted basis on December 1. The stock split reflects the confidence we have in our future and we believe it will provide greater liquidity and allow the stock to be more accessible to a broad range of investors.

I'd like to now turn it back to Lawrence for some closing remarks before we move to your questions.

Executive
Lawrence E. Kurzius

Thank you, Mike.

Now that Mike has shared our financial results and 2020 outlook in more detail, I'd like to recap the key takeaways as seen on slide 29. We've delivered outstanding year-to-date results during a period of great disruption, proving the strength of our business model, the value of our products and our capabilities as a company. Our foundation is solid and our strategies are effective. Our 2020 outlook reflects another year of strong operating performance of doing what is right for our employees and communities as well as making investments for the growth we expect in both segments next year. We're confident in our ability to perform in this dynamic environment and to continue delivering differentiated results and build long-term value.

And now I'd like to turn to your questions.