Tupperware Brands' CEO Discusses Q4 2011 Results - Earnings Call Transcript
Tupperware Brands Corporation (
)
Q4 2011 Earnings Conference Call
February 1, 2012 8:30 AM EST
Executives
Rick Goings – Chairman and CEO
Mike Poteshman – EVP and CFO
Analysts
Dara Mohsenian – Morgan Stanley
Olivia Tong – Bank of America Merrill Lynch
Mark Schwartz – SunTrust
Sofya Tsinis – JPMorgan
Linda Bolton Weiser – Caris
Gregg Hillman – First Wilshire Securities
Presentation
Operator
Good morning and welcome to Tupperware Corporation Fourth Quarter 2011 Earnings Conference Call.
I would now like to turn the call over to Rick Goings, Chairman and CEO of Tupperware Brands. Mr. Goings, please go ahead.
Rick Goings
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Tupperware Brands Corp. Q3 2009 Earnings Call Transcript
Thank you very much and good morning, everyone. I’m with Mike Poteshman and Teresa Burchfield. As all of you know some of our discussions will involve future outlook of the business, you know the drill. So I refer you to our position on forward-looking statements.
By the way, we know every earnings season puts significant time pressures on many of you, so we’re working to try to simplify how we do ours, and key to doing this is we believe, don’t be repetitious. So we’re going to eliminate everything we put in the release, we’re not going to talk about now. Therefore, what we’re going to try to do is give you brief comments from me, Mike, and then open it up to Q&A at that time. If this works, let us know. And at the same, if it doesn’t, let us know what’s more satisfying for you.
We were generally pleased with the overall business performance for this past year as the top line growth and our pre-tax ROS excluding items, it did meet our objectives and showed nice improvement over the previous year in a difficult global environment. We saw in this situation a number of pluses and a number of minuses for the fourth quarter. We were in our revenue range with the sales up 7% local currency and our $1.50 of diluted EPS without items was just under the high end of our $1.49 to $1.50 for a range. And after considering the FX, rates got 3% worse on us after we gave our guidance. This came by the way and was driven by impressive performance in many of our markets. These gains, importantly, more than offset the weakness in a handful of other markets.
Let me go through some of the pluses, the notables with strong gains. First, I’ve got to say Tupperware India with an incredible 66% sales increase in the quarter. And worth noting, that’s the pace they’ve been on for the full year. Tupperware Indonesia was up 47%, and China was up 24% in the quarter. So really in the pack room, these three markets set the tone. And let’s not forget the relative populations of these three countries. China is number one population wise, India is number two, and Indonesia is number four.
I think it’s interesting Archimedes said in the 2
nd
Century BC, “Give me a lever long enough and a fulcrum on which to place it and I'll move the world.” Well, for us in the Pacific Rim, the fulcrum for us is the business opportunity that our company offers and the power of our brand. The lever is really the size of the population, and more importantly, the growing middle class in China, India, and Indonesia. These three countries account for more than 40% of the world’s 7 billion population. So we’ve got a lot of runway left there. Also worth noting, we had double-digit increases in Malaysia, Singapore and in Korea. So Asia Pacific was terrific.
Couple of other markets with notable increases in the quarter were Tupperware Brazil. This country, by the way, is the fifth largest population in the world. Here we came in with a 61% sales increase. And very much like India, that’s been kind of our run rate in that area for the entire year. Tupperware Venezuela, up 41%, some of it pricing, but some of it real growth. And even Tupperware Mexico had strong results coming in, up 16%. Germany’s 10% growth – and I’ve got it, it’s notable, because it’s been years since we had a double-digit increase in our Germany. And it really showed that they’re applying and being very effective with the same kind of contemporization techniques that we utilized in France. So they’re on the grow. Strong gains also in Turkey, where we were up 33% and Italy where we grew 30%, very encouraging. And there were a number of our smaller markets also in this portfolio that recorded nice gains, including our Central Mediterranean countries which is really the Balkans, the Arab markets were amazingly up strong double digit, and we’re having the best year we have ever had in the history of average lien in South Africa.
Now, the overall performance – positive performance in these countries with solid growth was the growth of the sales force, packed by heightened focus on training. In light of this, I’m pointing out now that we’ve included in the first attachment to our release some details behind some unusual fluctuation in sales force performance indicators versus 2010, really to give you better understanding. And, by the way, we have a rather solid formulas in most of the established markets of the world for how we qualify total sales force and active sales force, as well as standards for how we purge the in-actives. However, a number of our businesses, particularly in emerging markets utilize a different kind of rhythm, and we’re prepared in Q&A to talk about that, but we gave you the notes.
The notables in the sales gains that I talked about of all those markets were partially offset by a handful of markets, and let me cover those, namely Tupperware South Africa, Tupperware Australia, Russia, the CIS, and Japan, also a couple of our Beauty businesses. And, by the way, just as the top performer countries of the world were driven by sales force size largely the absence of a sales force size advantage was the primary cause, but behind those that were laggards in the quarter, and let me comment on each of these.
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