McDonald´s: operating income increases 9 percent in FY 2010

Oak Brook / IL. (mdc) McDonald´s Corporation announced positive results for the fourth quarter and year ended December 31, 2010; fueled by strong comparable sales.

«Every day, more than 62 million customers around the world choose our restaurants for the McDonald´s experience – great tasting, high-quality food that´s affordable, convenient and served in a contemporary and inviting atmosphere. During 2010, we continued our efforts toward becoming our customers´ favorite place and way to eat and drink – and customers rewarded us by visiting our restaurants more often», said McDonald´s Chief Executive Officer Jim Skinner. «As a result, we generated strong sales and delivered profitable market share growth, along with higher global revenues, operating income and earnings per share. McDonald´s continued success demonstrates that our ‘Plan to Win’ works in any environment and has positioned us to continue our performance in 2011».

Full year 2010 highlights included:

• Global comparable sales increase of 5,0 percent with positive comparable sales across all geographic segments for every quarter.
• Consolidated revenues up six percent (five percent in constant currencies) to a record-high 24 billion USD.
• Combined operating margin increase of 90 basis points to 31,0 percent.
• Consolidated operating income increase of nine percent (nine percent in constant currencies) with the U.S. up seven percent, Europe up eight percent (twelve percent in constant currencies) and APMEA up 21 percent (eleven percent in constant currencies).
• Earnings per share of 4,58 USD; up eleven percent (eleven percent in constant currencies).
• Return of 5,1 billion USD to shareholders through share repurchases and dividends paid.

Fourth quarter highlights included:

• Global comparable sales increase of 5,0 percent; with the U.S. up 4,4 percent, Europe up 3,4 percent and APMEA up 5,5 percent.
• Consolidated revenues increased four percent (five percent in constant currencies).
• Earnings per share of 1,16 USD, up five percent (six percent in constant currencies).

North America: In the U.S., ongoing emphasis on driving customer traffic, menu innovation and compelling value delivered industry-leading comparable sales growth during the fourth quarter, despite December´s sales being dampened by inclement weather. During the quarter, the U.S. reinforced the Company´s dedication to value and variety by featuring Chicken McNuggets, McRib and the everyday affordability of the food and beverage options available across McDonald´s menu. The U.S. continued to build brand loyalty and enhanced the customer experience with the popular Monopoly promotion and the introduction of the Caramel Mocha to the successful McCafe line-up.

Europe: Europe´s comparable sales and guest counts increased for the quarter despite very severe weather, most notably in Germany and the U.K. during December. France and Russia led the segment´s fourth quarter operating income growth of two percent (nine percent in constant currencies). Europe´s focus on upgrading the customer experience through ongoing restaurant modernization, expanded drive-thru service and four-tier menu pricing contributed to the segment´s results.

APMEA: In the fourth quarter, Asia/Pacific, Middle East and Africa (APMEA) delivered strong comparable sales, led by Japan, Australia and China, and operating income growth of 18 percent (ten percent in constant currencies). Menu innovation, value initiatives and limited-time offers created excitement and drove consumer demand in this key growth region.

Skinner: «McDonald´s continues to operate from a position of strength. Our recurring cash flow and strong balance sheet allow us to invest appropriately in our business and return significant amounts of cash to our shareholders. In 2011, we plan to invest about 2,5 billion USD of capital – roughly half dedicated to opening approximately 1’100 new McDonald´s restaurants and the other half allocated to investing in our existing locations, including reimaging. Our results for 2010 reflect the power of our customer-centered initiatives, the fundamentals of our business model and the alignment between McDonald´s franchisees, suppliers and employees. I am confident that these strengths will endure and continue to deliver for our System and our shareholders over the long term. We are off to a good start in 2011 – our momentum is continuing in January with global comparable sales expected to increase four to five percent».