McDonald’s: 2008 was another year of strong results

Oak Brook / IL. (mdc) McDonald´s Corporation announced strong operating results for the fourth quarter and the year, driven by global comparable sales growth. «2008 was a strong year for McDonald´s», said Chief Executive Officer Jim Skinner. «Through our strategic focus on menu choice, food quality and value, the average number of customers served per day increased to more than 58 million in 2008. Comparable sales and guest counts were positive across all segments for every quarter, and the Company delivered double-digit growth in operating income for the fourth quarter and the year. These accomplishments validate the strength and resilience of McDonald´s plan to win». Full year 2008 highlights included:

• Global comparable sales increase of 6,9 percent, including U.S. 4,0 percent, Europe 8,5 percent, and Asia/Pacific, Middle East and Africa 9,0 percent.
• Growth in McDonald´s combined operating margin of 320 basis points to 27,4 percent, after adjusting for the impact of the 2007 Latin America transaction.
• Operating income increases in the U.S. eight percent, Europe 23 percent (17 percent in constant currencies) and Asia/Pacific, Middle East and Africa 33 percent (28 percent in constant currencies).
• Earnings per share from continuing operations of 3,76 USD, an increase of 16 percent (14 percent in constant currencies), after adjusting for the impact of the 2007 Latin America transaction.
• Return of 5,8 billion USD to shareholders through shares repurchased and dividends paid, including a 33 percent increase in the quarterly cash dividend to 0,50 USD per share for the fourth quarter – bringing the current annual dividend rate to 2,00 USD per share.

Fourth quarter highlights: Global comparable sales increase of 7,2 percent; fueled by the U.S. 5,0 percent, Europe 7,6 percent and Asia/Pacific, Middle East and Africa 10,0 percent. Consolidated operating income increase of eleven percent (20 percent in constant currencies). Earnings per share of 0,87 USD compared with earnings per share of 1,06 USD in fourth quarter 2007, which included a 2007 net benefit of 0,33 USD per share related to certain tax items.

McDonald´s U.S. delivered very strong results for the quarter and year by seizing opportunities in the key growth areas of chicken, breakfast, beverages and convenience. Throughout 2008, the U.S. built brand loyalty by reinforcing the Company´s dedication to value, convenience and menu variety with the addition of the Southern Style Chicken biscuit and sandwich, drive-thru enhancements to improve service and ongoing expansion of McCafe specialty coffees.

In Europe, ongoing efforts to strengthen brand relevance generated impressive fourth quarter and full year results. Full year comparable sales were positive in every European market as more customers enjoyed McDonald´s combination of seasonal and premium menu selections, compelling value options and inviting restaurants.

Asia/Pacific, Middle East and Africa posted robust comparable sales and operating income growth for the quarter and year. Strong results across the segment were driven by operations excellence and a sharp focus on breakfast, convenience and everyday affordability.

Jim Skinner: «Our disciplined approach to financial management continues to be an important component of McDonald´s success. We remain committed to enhancing shareholder value by investing capital prudently, optimizing our restaurant ownership mix and returning cash to shareholders. To date, we have returned 11,5 billion USD to shareholders through dividends and share repurchases toward our target of 15 billion USD to 17 billion USD for 2007 through 2009. For 2009, we plan to invest 2,1 billion USD of capital to open about 1’000 new McDonald´s restaurants and reinvest in our existing locations» (complete press release).