Tupperware Brands Corp. Q4 2009 Earnings Call Transcript

 |  About: Tupperware Brands Corporation (TUP)
by: SA Transcripts


Good day ladies and gentlemen. Welcome to today’s Tupperware Brands fourth quarter earnings conference call. As a reminder, today’s call is being recorded. I would now like to turn the conference over to your host Mr. Rick Goings, Chairman and CEO; please go ahead sir.

Rick Goings

Thank you very much. Good morning to everyone. I’m here with Mike our CFO; and Nikki Decker, our VP of Investor Relations. I know everybody knows the drill on forward-looking statements, so I’ll dispense from reading that. I just landed late last night from a week at Davos, by the way the pluses on that, it really was nice to see the difference in moves of global CEO’s, with regard to what they believe the road ahead is going to look like, with the exception banks CEOs.

The other thing I’d say was a real negative is I’ve seen a shift in powers. The US goes to this level of deficit that more and more of the talk of the power shift will be to China, but more about that later. I do believe that positions us well as a global company, not an American company, to have this de-capped into what’s going on in the rest of the world.

Tupperware Brands, I am pleased to say as we’re so much different of a company than we were when we spun it off in the mid 90s. Back then one country, Germany, represented a significant percentage of our profits, and that was a volatile position to be in. Today our portfolio has a balanced contribution from each of the regions, and many markets within those regions, including more than half our earnings from the developing world.

So many have asked me, “Why do you get so much from the developing markets of the world?” and I just say, “Do the math. One out of every five people in the world is from India” and if you take India, China and Indonesia, that’s about half the world’s population. So if there’s anything Mike and I think we got wrong after we did that Sara Lee acquisition, is our failure to understand how much growth in many of our other Tupperware markets there could be, even in relationship to established markets and compared with beauty, which is a crowded space.

As I said before, we expect to grow our emerging markets double-digit going forward. It’s still early days for us there with regard to market penetration. Since we are a global portfolio, we expect some cost in the future. For us to do this kind of top line growth, we don’t need to be hitting on all cylinders, and we can continue to progress. We weren’t hitting on all cylinders this past year.

We are certainly pleased with our growth rate for the last year, and forecasting an improvement, also in the return on sales, which would be an important factor in our growth and profitability in the future.

By the way, simply stated, I think our results validate these strategic transformations that we’ve been working on at this company for sometime. Reaching our 2009 earnings level, we have now achieved many of our objectives, and our focus for the future is to assure that we maintain this momentum, and that we maximize our growth from our international sales forces.

We continue by the way to see strength as we saw in this fourth quarter for the 10% increase; I bet you already saw that in the release. I think it speaks to the strength of our business model, and equally important the strength of our management teams on the ground. I started the week about 10 day ago with our Swiss management team, and ended it Sunday night with our Australian management team, and I just continued to be so impressed with these multi-local businesses and the strength of our leadership there.

All five of our Tupperware Brand segments had top-line currency growth in the quarter, and our emerging markets were at 20% established; we’re up 1% in local currency. Overall, the total sales force was up 6% as we ended the quarter, and we look to really continue to build off that sales force size advantage in 2010.

Let me make a few highlights regarding our established markets. I am going to first call your attention to France, which was a really standout with a record breaking sales of up 33% in the fourth quarter. That was on top of double-digit growth we saw the year before, at fourth quarter 2008. There again we have a strong management team in place and they are French, and we are making great use of our not only contemporized product line and party themes, but we’ve made great strides even with regard to contemporizing the sales force structure.

We understand that to attract new, young, many single and working women, we had to develop products that really suited her lifestyle. She doesn’t bake, she pretty much assembles, and what we’ve also come out with new products is accompanying cook books, and we are now a proud and continually leading seller of cook books in the entire country of France. We are also the largest direct selling company in France and what’s amazing about this is, this isn’t something startup this year, we’re going to celebrate our 50th anniversary there.

France importantly is serving as a template for other established markets, really to show them that despite their size, despite the number of years they’ve been in operation, there is always wide space for growth; and by the way, at the top of the list of markets, we want to replicate that our Germany, where we’ve already implemented some of those programs, the U.S.A. and Japan.

Worth noting within our established markets also is Tupperware Austria. Again, I was there the other day. There we increased local currency sale 17% in the quarter, and also the established market of Australia grew 11%. Again, both of these nearly 50 years we’ve been there, and I think the big key is the seasoned management team and the power of our brand.

Let me mention our large German business. It was down just slightly in the quarter, after being up a little in the third quarter. I am pleased to see though, if this was news week magazine, I would have one of those arrows pointing up with regard to our feelings for outlook there. We’re pleased to see that in the fourth quarter that we did add to our total sales force size in the quarter and even throughout this month, January, we’ve almost closed the gap with regard to the sales force size deficiency, and that’s the number one thing for growing our business.

In Germany, again many of the same initiatives that we implemented in France are at work there. We’re probably a year earlier in France than we were at Germany, and they really include raising the standards of the sales force, changing how we reward recruiting, growing the sales force, but it also adds important marketing issues with regard to targeting the product line and parties to the new woman in Germany.

In our established markets of North America, their local currency sales in Tupperware U.S. and Canada were down just 1% though. I must say, we stumbled in October, so I put this as entirely self inflicted with a marketing and promotional program that really didn’t provide the results we had planned or matched the most dynamic growing segment of our sales force, the Hispanics.

So we always feel bad when frankly we see a problem, a problem of our own making, but somebody once said to me “You don’t drown when you fall in the water, you drown if you stay there.” They’ve got that back on track; however starting the quarter with a down October, and October is a very strong month to set the tone for momentum; it really impacted our sales force size.

The good news is there were no big changes we need to make in the U.S. business. A couple of the specific things we are working on in this market to bring us better results are really getting that business to much more weekly activity drivers and better contact with the sales force. We’ve really seen this approach working within segments of our U.S. business, and particularly La Belle Province, the Quebec area of Canada.

Regarding BeautiControl; while still down, I am pleased to announce that last month, we finally launched a new compensation program that we’ve been working on two years, and as a footnote here, frankly it just took so much longer than it should have for us, but finally it’s been implemented and what it does is, it better focuses the sales force on recruiting and building teams of sellers. It also provides rewards for those to help them develop into leaders, and for those entering leadership levels of the business.

Feedback has been good. I think we are on the right track there. We got a solid management team, and frankly while it’s only February, I will be surely disappointed if we don’t see modest sales growth in BeautiControl this year, it’s a solid business.

Now, let me turn to emerging markets where we continue to see strong momentum. The emerging markets were up 20% in local currency, and they’re staying around half sales; this quarter was 51%. In addition to how well we run our businesses, I really believe the success is driven by the power of again, incredible management teams in each one of these markets that we spend so much time developing, the strong earning opportunity, and also the advantages our channel of distribution offers in those markets where there’s a less developed retail infrastructure.

In our emerging markets of Europe, Africa and Middle East, we saw another strong double-digit growth in markets like Russia, South Africa, Turkey. Our business by the way in South Africa grew its sales force significantly in the quarter, and the productivity also increased as consumers responded to great product offerings.

Also a little extra sunshine, we didn’t expect, but it is nice to see, our average Shlain business that we’ve been working on turning around, we acquire that from Sara Lee; it’s in South Africa. It also had double-digit sales increase in the quarter. So there was a turn, and it’s a nice trend in change there.

In Russia, our brand building efforts continue to pay off. I am going to be going there this next month. We were awarded by the way, The Countries Coveted Product of the Year Award. You know what’s great about seeing that too is we don’t advertise; we just were named in China as a mega brand; just named in India as a mega brand, and we don’t advertise. So I say bravo to the public relations that our Russia team are doing.

There in Russia too we increased our total and average active sales force to double percentages and we had an increase in our sales force productivity as well. By the way a side bar note, we felt a little blip for about six weeks in the second quarter. In Russia, they are not on the euro, and it was the impact that that was some in the ball fix as well, some of these currencies, and again it speaks to the flexibility of our business model to navigate through surprises in the marketplace and get it back on track fairly quickly; so a great year for Russia.

Our Asia Pacific emerging markets were up 27% in local currency, and we had double-digit increases in most of these businesses. China was an exception. Importantly though in China, we were able to return to year-over-year advantage in a number of preferred customers that we have there. These are the customers who almost go through membership like a Sam’s Club here, to our 2800 outlets.

We closed 2009 with about 2800. We lost about 100 outlets versus 2008, but it was a good learning year for us in China, and most of the issue in China really started at the beginning of the year as a result of weaker consumer orders from the other parts of the world to China. We’re seeing that stabilize though.

In Indonesia, I’m leaving next week for both Surabaya and Jakarta, an incredible woman meaning, the one that runs our company there. We’ve been there 19 years. We’re the largest direct sales company there, and we were up an astounding 87% in the quarter, and almost double the business in 2009 with a 95% increase in the sales force. Again, our management team there has successfully focused on the strategy, and set clear expectations on managers, distributors and career development.

I might say as a side bar there, Indonesia is the largest most in population in the world. Our President there is a woman, and there we’re beginning to see probably most effectively, this thing that some writers are talking about, and I heard it at Davos, called the Tupperware effect. That when you go in rather than Airlift Aid into area, when you go in, you recruit a woman, you microfinance her, you provide her with a mentor, a manager, and then you show her step-by-step, provide her the leadership guidance and direction, and then she takes success, she begins to earn money.

As she earns money, she gets confidence, and confidence equals influence, and such to have a halo effect at her family and with her children. We even talked about it in a number of Davos sections, “How do we do this in sub-Sahara, Africa, with many programs to try to rebuild infrastructures or build for the first time infrastructures of places, but without outside and Airlift programs.” So there really is something to this Tupperware effect.

Finally, let me highlight our Tupperware business in beauty and others. They performed well in the quarter. We had another strong quarter in Brazil, local currency sales up almost 60% this quarter, mostly due to higher volume, and we’ve got a lot of room to grow geographically in Brazil as well. We are about a tenth the size of Avon.

Our Tupperware Venezuela business had local currency sales up about 35% and a good increase, but to a large degree driven by what’s going on with pricing in that market. Mike will comment more in detail on Venezuela and what’s going on with currency there, but I want to highlight the fact that we took a long time ago proactive action in that market and we’re really managing our business in US dollars there.

We have two things we are focusing on: one, maintain the integrity and the focus and support to all our employees, and our associates there, who are trying to make a living in this rapidly declining economy, and at the same time, how we do it and make profits at Tupperware. So it takes a little more time, but we’ve learned how to navigate through such complex situations.

Looking over this last decade, we believe there’s a new and needed change toward risk and leverage. By the way I heard an incredible presentation. Our Controller here who I am looking at is Canadian, but the Canadian Prime Minister, if you follow what’s happened this last year, haven’t had a single bank failure, had no sub-prime issues, it’s like a different country compared to now below the boarder here, and I think it’s a living example of there’s a different attitude in the world now with regard to risk and leverage, and I want to comment on that with regard to us as a public company.

We don’t see a fundamental change in the way we’re going to manage our company. We are going to continue to work towards focusing our resources on growth, improve our profitability and cash flow, and we also believe that the heavy lifting and contemporizing our business models and products is largely complete. There’s always going to be work to do; we continue to try to get 25% of our sales from new products every single year; we continue to try to contemporize the party so it’s new and fresh, and it’s something people want to go to, and continue to work on having the right compensation program.

However with regard to risks, we believe now that you’ve got these baby boomers out there, who have had their network collapsing, we believe in strong cash flow, we’re going to continue to reduce our debt levels, and to have strong and improving return on sales. You’ll note that in 2009 we raised our dividend for the first time since we formed the company. Our net signals are confidence in our ability to throw off those kinds of money.

We also accelerated our share repurchase and those of you who we met with, you know that the primary reason for share repurchase is really to mitigate the impact of dilution. We believe that companies like Tupperware Brands with multiple platforms and multiple markets; now it’s not just Germany, now its markets around the world, now its many different currencies, many different governments, and we’re learning how to really navigate through all of those. It would have blend with not only emerging, but established.

On the things we’re most excited about right now in our established markets of the world, looking to what’s happened in Australia, looking to what’s happened in France, we’re getting a lot of our markets where we’ve been 35, 40, 45 years, have an incredible renewed optimism on ‘we can do that too.’

Anyway, I’ll come back to answer questions. Mike, I turn it over to you.

Mike Poteshman

Thank you, Rick. First, to give a bit more color to where we exceeded our fourth quarter guidance with our actual results; on the sales line, the two point higher local currency increased at 10% over the last year versus 8% at the high end of our guidance, came mainly in Europe and France and South Africa, where we had larger sales forces that we activated well, with our party seeming in the case of France and with our merchandizing in both markets.

On EPS, the high end of the guidance range was $1.03 with the upside to $1.22 we actually achieved coming from the contribution margin on the sales upside, along with incremental benefits from better working capital management in Europe, leading to less inventory write-offs and bad debt expenses. Also inline with our release a couple of weeks ago on Venezuela, we ended up recording in the quarter only $3.5 million in foreign exchange costs, and not the $8 million hit we had included in our outlook to convert cash at the parallel rate. This difference contributed $0.05 to the upside versus our guidance.

There was a $0.02 offset from a higher than foreseen tax rate, where in a full year basis we came in at 23.5%, versus our previous expectation of 23% for the full year. Versus last year as outlined in release and direct we increased sales in local currency, in all five of our segments with double digit increases in Europe, Asia Pacific and Beauty Others bringing us up to 10% in total, which together with the 10 point tailwind from better foreign exchange rates versus last year products ended up 20% over 2008 in dollars.

On fourth quarter earnings per share, excluding items we increased by $0.32 over 2008 to $1.22, also was about half of the increase are $0.15 coming from stronger foreign exchange rates. In addition we improved our segment profit return on sales excluding items in all five of our segments by more than 3.5 points overall, to 20.6%.

The improvement by our segments led to an almost four point improvement in pretax return on sales in the quarter, excluding items to 16.7% this year, from 12.8% last year.

On this key ratio, for the full year we improve to 12.1% or 2.5 points from 9.6% last year. Our higher tax rate in the quarter is at 25% this year excluding items versus 15.5% last year, compared to our year-over-year comparison in the quarter by $0.15.

We had a great quarter and year with our balance sheet and cash flow. Along with our higher net income in 2008, our inflow from hedging this year versus an outflow last year, our inflow from working capital even with our much higher fourth quarter sales led to our significant improvement in cash flow from operating activities, net of investing activities of $224 million this year, versus $92 million last year.

In terms of what we did with that cash, for the full year we reduced our term loans outstanding by $140 million, paid $55 million of dividend and repurchased $38 million of stocks beyond proceeds that see some option exercises. Including repurchases using those proceeds we bought back $77 million of shares in 2009, of which $50.6 million was in the fourth quarter.

Inline with what said in our earnings release about our board increasing our repurchase authorization from $150 million to $350 million, and extending its term until early 2015, we expect to continue to repurchase shares with option proceeds and cash generated by the business to keep our outstanding shares about even over this timeframe with the approximately $63 million shares we had outstanding at the end of 2009.

At the same time, with our cash flow generation we are looking to continue to reduce our dividend, our debt to total capital ratio until we get below 30%, which we currently expect to happen in 2011. This would bring our debt to EBITDA leverage below onetime. Going forward we also look at the possibility of raising our dividend payout ratio as a percentage of EPS excluding items. Right now on an annual basis we are at 32% in terms of a payout.

Turning to our outlook in the first quarter, as you saw in yesterday’s release, we are calling for a local currency sale increase of 8% to 10%, which together with the 9% bump from exchange rates, brings our outlook in dollars to an increase over 2009 in the quarter of 17% to 19%. The local currency increase is above our longer term guidance range of plus 6% to 8%. This range reflects our recent trends, where we were up 10% in local currency in the fourth quarter of 2009 and 9% in the third.

On earnings, our outlook for diluted earnings per share, excluding items is for the first quarter of 2010 to come in within the range of $0.55 to $0.60. This compares with $0.45 in the first quarter of 2009, and includes a 13% to 22% increase in local currency in pretax profit, a higher tax rate of 25% this year versus 22% last year, and a number of diluted shares consistent with how we ended 2009, but higher than the first quarter by about 3%. The higher tax rate and the higher number of shares, versus the comparison with 2009 will be about $0.02 each. Going the other way, better exchange rates have a positive $0.07 impact on the comparison.

For full year, our sales outlook is for a 6% to 8% increase in local currency, with a 1% benefit from better exchange rates bringing the dollar outlook to up 7% to 9%. It’s worth noting here that the FX comparison while giving us a 1% benefit overall is net of a negative 2% impact from using the parallel rate in Venezuela this year to report our results, versus the official rate we used last year.

There’s no change in the guidance we gave last October for the 2010 increase in local currency. This outlook includes local currency increases of 3% to 5% in Europe, and Tupperware North America, 10% to 12% in Asia Pacific and Beauty Other, and 5% to 7% in Beauty North America. Our diluted earnings per share outlook for the full year excluding items is $3.41 to $3.51.

At the high end, this guidance versus last year includes an increase in line with the higher local currency sales, along with an improvement in pretax return on sales to 12.9%, but the close to 1% increase in ROS over the last year, about 4/10 of a point is from not having in 2010 the $8.4 million of transaction foreign exchange expense we had for Venezuela, to convert cash generated by the business, and translate the year end balance sheet of the parallel rates.

This favorable impact on the comparison is about offset by a negative translation impact in using the parallel rate in 2010 versus the official rate in 2009 to report earnings in Venezuela. The overall benefit and our outlook on the full year 2010 versus 2009 from better foreign exchange rates is $0.05 versus $0.27 positive in our 2010 guidance given in October 2009, and $0.10 of the reduction is from our now using the parallel rate in Venezuela. The remainder primarily reflects the weakening since last October of the Euro versus the US dollar.

In comparing our current 2010 guidance range versus last October’s, you can think about it as having in essence gone up by what we beat the 2009 guidance, less weaker foreign currency leading aside Venezuela. We beat our October guidance in 2009 by $0.19, and currencies other than Venezuela have come down about $0.12, while we’re raising our 2010 guidance by about $0.08 to what we set in October.

Looking at our returns on sales by segment versus full year 2009, our outlook includes small improvements in Europe and Asia Pacific, decreases of half to one point in both of the North American segments reflecting investments to grow and activate our sales forces, and an increase of about three percentage points in Beauty Other to close to 10%, as we benefit from leveraging our higher volume and continuing to work on our value change in several of the businesses.

Our outlook is from allocated corporate expenses of about $50 million for the full year 2010 which is about in-line with 2009 actual, and for net interest expense of $27 million, which is a small reduction given our lower debt balance, but reflecting our less than 1% marginal interest rate. We continue to foresee a 25% income tax rate excluding items, and this is versus 23.5% in 2009 actual.

A couple of words now about the flow of our results by quarter; on sale, given the relatively slower start we had in 2009, given the externals where we were up in 1% in local currency on sales in the first quarter and 4% in the second, before getting the plus 9% in the third, and 10% in the fourth quarter of 2009, we concluded in our outlook relatively stronger growth early in the year. This is reflected in our 8% to 10% local currency sales growth forecast for the first quarter of 2010, versus our full year outlook for the 6% to 8% growth in local currency.

On earnings in contrast we had the $8.4 million of foreign exchange transactions expense for Venezuela last year, that will not recur in the second half, and our higher full year tax rate in 2010 versus 2009. Its hitting us mainly in the fist half, as its being impacted having more diluted shares as the stock price rose sharply in the back half of 2009. I noted the $0.02 impact each of these is having on our first quarter comparison with last year, and these items are reducing our first quarter EPS growth by close to 10%.

I’d also like to give you an update on resin; as expected, we had an estimated $7 million benefit in cost of sales from lower prices in looking at the fourth quarter of 2009 versus 2008, and this brought us to the full year benefit and at the previous outlook of $15 million. Our updated guidance for the full year impact of resin prices on the cost of sales comparison for 2010 versus 2009 is negative $7 million versus our previous outlook of negative $4 million.

From our quarterly flow perspective, we expect to still have a benefit year-over-year in the first quarter of 2010, and then expect the comparison to be negative for the remainder of the year. Our 2010 outlook for cash flow from operating activities, net of investing activities, is it will generate $200 million to $210 million, and this includes $60 million of capital spending.

Now with that, we’re going to turn the call over to questions.

Question-and-Answer Session


(Operator Instructions) Your first question comes from Olivia Tong - Bank of America.

Olivia Tong - Bank of America

I guess first question just on the margin expansion; you mentioned a couple of things, fixed costs leverage, promotional efficiencies, obviously raw materials, but what are you doing differently in promotions to get more leverage out of the spend that you’re doing?

Rick Goings

I’ll answer the part A of that, and Mike will get more granular on it, because he knows more about it than me. From a strategic standpoint let me tell you what’s happened. So much of this investment usually has to be in many of our markets on a promotional investment; on an average it’s about 18% worldwide.

I remember when we really had to dial-up that level in Germany ever since the reunification. We had to spend much more on recruiting, much more then on getting them active and sending them to go out. What we’re now starting to see in Germany is a good example of it. We had margin expansion this last year, because we were able to pull back on that promotional spending, and we keep looking at that in every single market on what do you need to spend it on.

Mike Poteshman

Yes exactly, and some of these moves we’ve made in the established markets to get better leverage has reflected the pay for performance that we’ve done; in terms of what you get paid for? When you recruit somebody, what does that recruit need to do? How do we run things from the leadership levels in our sales force? So that’s something we’re working on overtime as well.

So we mentioned in terms of the comparison in the fourth quarter, we had the leverage of the resin benefit $7 million in the quarter, which is not something that’s necessarily just to bring more sales, but it’s in the numbers. Last year we had the Beauty business, and Brazil continuing to operate, so that cost us a couple of million dollars when that occurred.

So as we straighten out some of these things in the segments where we have lower ROS, Beauty, although is the place where we started from the lowest, we’re able to get those thing sorted out, and we do see the benefit coming through.

Rick Goings

But Olivia, we always organically target at the country level and the segment level of 15% ROS. So when you will see markets, like for example our BeautiControl business, right now operating below 10%, but we are making an investment there. They are moving in the right direction. That will in fact play out for us, because that’s our target level as the absolute minimum in markets. What I’m happy to say is, we have many markets that to north of 20%.

A great lesson I learned during the 90s in Germany though, because we basically had a one trick pony supporting the company at that time, we let it get too high in Germany, up to the 40% level, which meant we weren’t reinvesting in Germany, but frankly we weren’t getting from anywhere else, but we learned that there’s a price to pay.

So I see it right now with the discipline in our Fuller business. We will not in our Fuller business in Mexico, let it go over 22%. When it heads into 23%, we find a way to invest in it, so it can strengthen quality, productivity, brand, etc., so that’s what’s a delicate balance.

Olivia Tong - Bank of America

But I guess my question is why on margins, why is a 50 basis point improvement year-over-year the right number. I mean you just did 250 basis points. I’m assuming you probably thought that you did the right level of investment for this year. Why is it that you can continue to invest, but still not grow margins or won’t promise a margin greater than that 50 basis points at this point?

Rick Goings

Yes Olivia, on the high end the ROS improvement is 800 or 900 basis points. So we are a little bit higher with that coming, including from not having this Venezuela charge. When we look at what we are investing in, it’s in some of the markets where things are going well and where that’s growing for newer, we do some incremental brandling type of investments, so that we can get the word out there more about our brand, and get more of a pull through our sales force, and we overtime then get to higher price point products in term of sales and continue to penetrate there. So there’s some of those kinds of things on the call at the offensive end.

Then in places where things aren’t going as well as we would like, then we need to invest some to better develop the sales force and get them active, and that’s why we talked about for 2010 guidance that our ROS in the North American segments could be lower than it was in 2009, and that’s reflecting things like what we are doing as we put in this new compensation plan or get the traction of the new compensation plan of BeautiControl and those types of things.

Olivia Tong - Bank of America

Then on BeautiControl actually, how should we be thinking about this business next year? I know you had mentioned that you think that you’ll grow the top line, but sales force actually decelerated, or it was an easier comp in the declines accelerated, but it looks like your margins got better. So it’s a little tough to sort of get your arms around what the expectations are going forward on that business?

Rick Goings

Yes, I agree with you too, but job one, what has happened at BeautiControl; they allowed the sales force to become too much low productive hobbyist in the business. So really they had to put a stick in the ground and say “hey we are going to have an appropriate sales kit. We do not want to recruit buyers, we want to recruit sellers,” and how that starts to then playoff is early on, slower recruiting, but better recruiting, and then you start to see productivity increases on it.

They didn’t drill a lot of money at recruiting at programs for not real recruits this last year. So again Olivia, I will be disappointed if you don’t see top line growth at BeautiControl this year, and expansion of our margins there.

Olivia Tong - Bank of America

Then if I could switch over to Europe, if I have my commentary correct, I think Mike you said plus three to five or currency sales growth for 2010; that’s a deceleration versus obviously a pretty tough 2009, and France sounds like it’s still doing well. The emerging markets are clearly performing quite strongly, and then Germany you had mentioned, that sales force is starting to right size, so why a deceleration in 2010 then?

Rick Goings

There are two things that I would add; first we have a very strong leadership there with Glenn Drake as our Group President, and Glenn and I spend a lot of time looking over the horizon, where this is going. You cannot count on this level of growth that we are seeing in some of these markets, as they continue to lap on an accelerated basis, and there I talk about the markets like France, the markets like Russia, Turkey, Sub-Sahara Africa.

I mean I don’t know if we’ve tripled our business Mike in the last three years or merely doubled it, but those are the kind of things that I think are for us managing our business. Do you want to see those happen; do you want to keep supporting it, fueling those kinds of things, yes, but you just can’t count on those kind of levels, and that causes you to sober some of your expectations. Those are what I would call hypermarkets. They are just doing great, there’s more room to grow there, but perhaps not at that level.

Mike Poteshman

Olivia, we hear what you’re saying, and clearly that growth is lower, particularly the one in the fourth quarter where we had 12% in local currency, which was fantastic. That’s what I would say as well, is when you look at the share, relatively less emerging markets present in Europe than in some of the other segment, and so we reap over time, until a greater share of that happens if that moderates through expectation.

I think it’s also fair to say when you look at our guidance, and we expect to be up 8% to 10% in the first quarter versus 6% to 8% for the year. Some of that difference is coming from Europe and we’re higher in the first quarter, in a sense that we are later in the year. So we will see how it goes, and to the extent we are able to continue on the really fast track in places that have been doing well and/or see the kind of turns that we want to have to Germany, then obviously that would come through, if we are able to do that.

Rick Goings

We’ve been working very hard. Glen and his team has a number of markets that I didn’t talk about, and they’re small, but together they all matter; the Netherlands, the Belgium, Spain, Portugal, Italy which was a drag and a bleeder in the past; we’ve been flat lined for the last five years in Italy. The Balkans has had its ups and downs. We’ve been not pleased with our Hungarian business, but now that’s starting to turn, and we haven’t got as much leverage for the time we’ve been there in Poland, which is a large population base.

So it’s a portfolio, and its many different countries, and they are multi local businesses at the end of the day. What we don’t want is our management teams establishing objectives that they don’t reach. We are a culture that believes in making your numbers. So I have a high level of confidence. I just put at 80% at the projections we’ve given for Europe, Africa and the Middle East. Could they glow by that? Yes. Could they have a market or two, major ones blow up? Yes; and when you kind of put all that together, it brings us at this range we’re talking about.


Your next question comes from Doug Lane - Jefferies.

Doug Lane - Jefferies

Rick, you just got back from Europe and you mentioned you called down the currency impact largely due to the weakening of the Euro versus the Dollar. What’s the mood over there about the euro and some of the debt issues?

Rick Goings

Well it’s interesting, because I was with him and he spoke, and Angela Merkel wasn’t there, and you know the two major economies over there are Germany and France. There is more talk about confidence in the Euro than there is the U.S. I mean I heard in certain meetings, we know debacle that’s going on in Greece right now, because there’s been no controls on budget, and I’m a political; I’m not a republican or democrat, I’m a European on this.

In more than one meeting had them talking about, that it’s a big mistake to have a President who’s never had a budget. You always seem to do better in the U.S. when you’ve had someone who was a governor before, who actually had a budget. So, I mean if you left the rooms I were in for seven days, you’d sit there and shot the dollar.

Doug Lane - Jefferies

Getting back to your business, China is a big potential market, but it continues to be weak. I think you said it was down low double digits in the quarter. Can you give us an update there and what you think China can do in 2010?

Rick Goings

There, I think the first issue for us was a macro issue. I mentioned during the first quarter last year, when our group President there mentioned to me he was in Shanghai, and he’s never seen a time when the whole Chinese fleet seemed to be in the harbor empty at one time.

Really, you had a trickle down effect in China this last year. There was fear there, and China keeping those factories running, so people have a different attitude with regard to death, so you saw a tightening of the spending early on. We saw it get better as the year went on.

We also in the previous year in 2008, we had a lot of distributors, we launched a cookware line and they really stocked up on it. Well timing couldn’t have been worse, for a high price item like cookware, to destock in an environment when consumers were worried about their income.

So it’s starting to clear out. They’re attitude over there is very steady. They’re doing a much more, I believe responsible in what I would call stimulus investment in China for the long view. So I’m an investor of China. One thing to look for us is we’ve got to have more outlets opening. When there’s pressure on consumer disposable income, you can’t drop a 100 outlets, and what we had Mike to 2800, and as consumers pulling back on spending, we expect to have a sales increase. So our guys there what they’re doing is working at opening work; secondly, better product propositions; and then thirdly, much more proactive.

When I lived and worked in Hong Kong, we used to see in Malaysia and Singapore, the old Singer sewing machine company, they would have these retail outlets that looked kind of like our outlets in China, but that isn’t where the bulk of sales came from. They would typically have 10 to 20 sales people who worked out of those outlets. We haven’t been proactive with that in the past, but we are now going in that direction.

So I feel very good. I mean, for us to be named a mega brand in China without advertising, it’s pretty impressive. I might add, there have been a number of companies in China, in direct sales, who’ve made huge investments. I am not going to name names, but they have yet to even have to pay taxes there, because they haven’t recovered their investment. We pay taxes in China, because I think our guys went in with a better business model.

Doug Lane - Jefferies

Just lastly in Venezuela, we talked about it a lot from a currency standpoint, and I get the math there, but can you talk about how your operations on the ground are being impacted. We’re reading about rolling blackouts, and talking about going after people who were taking price in there. How is go-to-market going to change in 2010 from 2009?

Rick Goings

One of the things that’s helpful Doug to us, is because we’re a global company and as I look around the table, every one of us, we all carry different passports, and we’ve lived through this in various markets. We had a meeting on this several weeks ago. The gloom doom way to look at what happens if you close a country down like this, Cuba, and then what you end up is, you notice there’s no foreign investment other than the former Soviet Union there, the cars are late 60s cars, that’s what starts to happen, but what happens right before that is the big money flees.

Last year there was a mass exodus of wealthy Venezuelans, and they’re living in Miami right now. They may have had the parallel rate, they may ahead have taken a haircut of 55% to 60%, but if you are wealthy in Venezuela, you’re still wealthy, but you’re living in Miami. So what happens is the trickle down effect of this, the entrepreneurs stop being entrepreneurs and more become government works. What do we sit there and do, in this kind of an environment?

Firstly, you try to source every one of the products, you understand what’s going on internally. People still need to eat, they still needed an enterprise. We tried to find ways to sources raw materials in that market. It happens to be good that they are a petrochemical producer. It’s very hard to get new molding machines in, because it’s hard to get them out then. So you almost act like it’s the old Berlin, where there’s a wall around it, and how do I operate in this kind of environment?

I’m going to go there in the next couple of months, but you keep putting your emphasis on growing the sales force. It’s a tougher environment, but it’s the environment she knows; get her the right kind of products. We’ll slow down with regard to new product introductions, and be more sensitive to price points there. Mike, would you add anything there?

Mike Poteshman

I think when you wrap it all together Doug, we’ve been running that business in dollars from a mentality point of view, in terms of what Rick was saying on how we source thing and so on, and so we have a good value chain locally and we look to continue to operate under it and we’ll see how it goes.

It’s not a big part of our numbers. In our release we talked about a couple of weeks ago, having $60 million sales and $12 million or so in profit, and that was at the old exchange rate. So that’s something like 65% less now. So it’s a nice business for us, our people there do a great job, and we want to continue to support them and run the business well, but that’s how it fits in with the overall context of the company.

Rick Goings

Doug, side bar on that; I get a bit of an economic historical tutorial. One of the groups, they were about a dozen; most were heads of state in this discussion. We discussed Venezuela very clearly, but we discuss the model of the U.S. depression, which is what everyone was concerned here. It was depression, but the Germans were worried about going back to the Wyoma Republic, the hyperinflation of it.

The general belief, that is if countries go to protectionism, which is what Chavez has done, that took a depression that would have been a three year depression, and localized. It made it a nine year depression, and it shared it with the rest of the world, and there’s a sensitivity on the heads of state. Let’s not let this happen anywhere else, because what you do is, you get like what you get in Cuba and Venezuela, and market comes down.


Your next question comes from Dara Mohsenian - Morgan Stanley.

Dara Mohsenian - Morgan Stanley

Mike, I just want to get more granular on the margin side in the quarter, and you had very strong DS&A leverage, and yet in the press release you talked about investing time branding and other sales enhancing investments. So I just want to see if maybe we can get a bit more of a break down on what drove the SG&A leverage in the quarter, how much of that was kind of pulling back on promotion, and how much put back behind the business.

Mike Poteshman

Well, if you look at it by segment, we were able to spend more effectively on promotions in Beauty and Tupperware North America. So that was part of the upside there versus last year. It was also an effect of depending on where we get the sales growth and so on. If we are selling to the sales force and paying commission directly as opposed to our distributors, then that hits our DS&A line and we’ve done relatively less growth in the North American business, as we were on a commission basis and so that shows the numbers as well.

I mentioned that we were able to have less bad debt expense in Europe, and that was not a huge effects, but that was in their in terms of helping the ROS in Europe and that was coming to the DS&A line as well. So those were really, when you look at the couple of points that we were better, some of the bigger drivers.

Dara Mohsenian - Morgan Stanley

Okay, and are those points more sustainable going forward or was it more isolated to Q4?

Mike Poteshman

Well, I think that the impact in the numbers are in and of itself probably sustainable. Not that they would continue to drive year-over-year comparison differences or benefits. I think when we talk overall or longer term about what we would be investing in 2010, that’s what we are talking about, brand building and some of the fast growing emerging markets, where frankly we already have a good ROS, but we have talked before about having an average for the whole company, a contribution margin of 40%, that’s if we are running status quo, and that’s what we are speaking to incrementally doing some brand building and so it is not a 40% drop through in the guidance.

Dara Mohsenian - Morgan Stanley

Then Rick, you increased your share repurchase program but it sounds like it’s mainly just designed to offset option [three]. So I guess what I am wondering is, if you truly believe your long term guidance, frankly your stock would seem like a good investment. So why not get even more aggressive, especially with the strong balance sheet?

Mike Poteshman

Getting more aggressive with the share repurchase?

Dara Mohsenian - Morgan Stanley


Mike Poteshman

That’s why I got tough with the number of our big investors. They said, “we’d rather you give us the money and let us pick the stocks.” We had 63 million share; you don’t want to get too thinly traded. I would rather see us get the debt to total cap down to a level that most think is ridiculously low, and then have the high class problem of how often do you raise dividends?

Dara Mohsenian - Morgan Stanley

Then last one Rick, that active sales force growth did decelerate a bit in the quarter, so can you just give us a bit of clarity, on if you think that will impact forward sales trends, and some perspective there.

Rick Goings

Yes, that’s the noise really under in some individual markets. Mike you have looked at that, haven’t you?

Mike Poteshman

Yes. We don’t think there’s a problem there. The biggest discrepancy if you want to characterize it like that is in Beauty Other, where we grew sales very well to double digits, but not on the active sales force; and there’s a few things that some of them have talked about before, but some of them haven’t.

In Argentina we raised our minimum order size and so we have sales force there, and that is having an effect on that kind of comparison, even though that’s the right thing to do and it works well for us in and of itself. We stopped running the beauty business in Brazil on the fourth quarter of last year, and that business is not performing well. So we weren’t getting leverage in terms of sales per active sales force number. So that was an impact there.

When we look at the overall segment, we’re seeing more of a shift towards Brazil, and Tupperware Venezuela, which has a higher average order size on the tougher side of our businesses, as opposed to the beauty side, and so just that mix shift is causing us to have relatively less active sellers showing versus the sales; and then the price increases in Venezuela because of the inflation there.

So, those are the kinds of things that were removed there and none of those are things that indicate to us that there’s any problem with how we’re running the business and what we can expect going forward.


Your next question comes from Mimi Noel - Sidoti & Co.

Mimi Noel - Sidoti & Co.

Just two quick questions from me; Rick generally speaking, I was look for a little bit of color on the average ticket, because as we came out of 2009, a lot of the focus was on 2010 and having a more sure macro economic backdrop, and there was concern that the sales force size might actually shrink, so we saw the opposite in the fourth quarter, and I’m just wondering, if the proper way to think about the sales force size versus the average ticker is more secular and more influenced by what’s going on at Tupperware, rather than the economic backdrop?

Rick Goings

Yes, it’s true. Firstly, one of the reasons that it’s hard to give you anything a that’s substance on a global level is if you take an average party if Russia, it will be about eight women, but the average party is USD 800. If you do the same party in Belgium, it’s $850, and also the kind of products are different.

So within countries we look at what’s the average party size, what’s the average unit. I’m finding that the more effective job, mainly that we do on differentiating products, the more we can mitigate the impact of what’s going on in the macro economic environment. For example, a hot new product in France right now called the micro steamer, it’s $150. Well they’ve got economic challenges in France, but this is the product that is so exciting; but our guys there on the ground really pay attention to that.

Mimi Noel - Sidoti & Co.

The last question I had, and perhaps it’s a little too early start kicking this one round, but looks like greater emphasis on cracking down on overseas tax breaks, could that affect you in anyway?

Rick Goings

First thing, I’d say we’re right now a U.S. company, but that was a wonderful presentation on the head of Barclays, that he said “The biggest positive impact in the last five years to the U.K. economy, was the U.S. Congress passing Sarbanes-Oxley, and they wanted tonight Sarbanes and Oxley, because it led to so many businesses abandoning the U.S.” You know I’m quite frank with regard to this. What’s our number here in the U.S. with regard to earnings as a percent of all?

Mike Poteshman

We’re over 90% outside the U.S.

Mimi Noel - Sidoti & Co.

Outside the U.S, so we’ve already looked into if this administration was punitive with regard to tax implications to us. As a company we would be domicile going to a different place, that’s as much as I can say.


Your next question comes from Jason Gere - RBC Capital Markets.

Jason Gere - RBC Capital Markets

Just a couple of questions, one just clarification; when you talk about FX, $0.05 versus the $0.27 prior, what type of spot rate are you using for the year or right now. I’m just trying to wonder if you’re using current rates or are you assuming that the dollar strengthens further.

Rick Goings

About 139 on the Euro right now…

Mike Poteshman

Yes, just under 140. We do that with the rates Jason, we don’t try and give our perspective on how that’s going to move.

Jason Gere - RBC Capital Markets

Just secondly, going on to Beauty North America and looking at the reps, and I know the active reps declined, but at the same point you were more profitable with your margins. So I was just wondering if you could talk about, are you being more constrictive when you look at productivity, you are being more constrictive with some of the reps at this point. How do you kind of measure that going forward, to make sure you get the right productive?

Rick Goings

It wasn’t so much restrictive, but that’s the right approach. It was a question of establishing standards, so that if somebody came in, they just wanted to buy a kit, we don’t do that, but that doesn’t mean you increase the kit price, but then you back her up with here’s what a good kit is, here is what training is, and here is the kind of mentoring that you get. What you generally get then is more productivity and the value chain improves.

Jason Gere - RBC Capital Markets

Then, I guess just one last question; what’s you outlook for the Tupperware North America margins 2010. It was 13% in ‘09, but you did a fantastic 18% in this fourth quarter, so I was just wondering what your outlook is going forward?

Mike Poteshman

On that one Jason, we said that we would probably be down a little bit, and that’s to invest to get our sales force back to growth.

Jason Gere - RBC Capital Markets

Down versus the fourth quarter or down year-over-year?

Mike Poteshman



Your next question comes from John Faucher - JP Morgan.

John Faucher - JP Morgan

Two quick questions hopefully, and I guess there’s been a little bit of volatility on the promo line and you discussed it today. I think as we look out over 2010, realizing the years as a little first half loaded from an organic revenue guidance standpoint, how should we view the incremental margins in terms of looking at that flowing through; is there a rule of thumb you have there?

Secondly, sort of a quick question, you’ve talked about the counter cyclicality of demand on the core Tupperware business, in terms of women looking to save money in tough economy times. How does that play out going forward, given the fact you guys seem a little more positive in terms of looking at the economy? Thanks.

Mike Poteshman

We do have a kind of a rule of thumb on average, that we have a contribution margin from our business of about 40%. So that would be for the next dollar without having to add a lot of capacity or do something else unusual.

When we look at how we’ve done our 2010 guidance, where we talked about half a point improvement in pretax ROS, in addition to this benefit of not having the Venezuela $8.4 million, that’s assuming we would with be investing something in the $25 million range in terms of profitability when you just do the math based on the numbers that we have given.

So that’s for these offensive types of investments for brand building, and other initiatives in the fast growing market, and then it’s also recognizing the places where we’re not doing as well as we like, but we’re going to need to invest to get our sales force back where we wanted it, both in term of the total numbers and the activation. That’s how we think about it overtime and that’s how it’s reflected in our 2010 guidance.

John Faucher - JP Morgan

Then sort of the counter cyclicality aspects?

Rick Goings

John, again as some bright people have said, the counter cyclicality of direct selling that we do better when there’s higher unemployment is really overblown. We’d rather the economies be better, because you have to throw so many of your resources when it is a tough economic environment at getting people active, at getting them trained, it’s harder to get people to parties, your party gifts have to be more, incentives to buy.

You really can more effectively in our value chain spend the money better, when there’s a strength in the economic environment. You will go to more up scale kind of products, and it isn’t so much push, as it is rewarding for them to go to higher levels of purchases at a party for example.

I happen to believe that for direct selling; it’s easier to equate the effect of this 18% promotional dollars, whether the promotion works or not during a better economic environment, rather than a negative economic environment, and I think our guys are better doing that.

John Faucher - JP Morgan

Okay, so taking the two questions together, it sounds as though you think actually the incremental margins theoretically as the economy gets better should move up then. So that 40% number could move higher over the next couple of years, as you get this little bit of tail-end.

Mike Poteshman

We clearly have said, when it’s all said and done, if you put it through the line press John, we’ve said, expect us to grow on our pretax operating margins year-after-year-after–year; and what we say, half a point a year; and that’s one of the areas it comes from.

Rick Goings

There’s another interesting thing John. You and I have had these kind of conversations about it, but many of the public accounting firms so we just cleared with PWC will do at the end of a quarter or year quality of earnings.

We kind of do a thing at the end the quarter that really would be more quality or energy expelled at the end of the quarter, and what I mean by that is, if you end a year or a quarter and you’re just absolutely wiped out, that our Group President’s just had to lean into the business to get it going, throw all your resources at it to make your numbers; I don’t like to run a company that way, because then what happens is, you’ve got a depleted sales management team, everybody wants to take a break, I’m out of gas, and then you pay the price at the beginning of the next time sector for it.

One of the things, we never talk about it in our earnings release, I have seen this very nice pattern this year, the year before etc, that more of our operating units are crossing the finish line not having to just do that final kick of everything to get across, which means they finished in December and they have a good January.

I was looking at Europe’s numbers, and Europe had a great fourth quarter, and yet I saw them pounded by record snows, where there was cancellation rates of 60% on parties, and markets like France, which has been such a heavy leader there, and I saw Glenn and the team navigate through January. They had the energy to do it, because they weren’t wiped out, so just a more anecdotal comment, but very important to the substance of our business.


Your next question comes from Andrew Sawyer - Goldman Sachs.

Andrew Sawyer - Goldman Sachs

I just had a quick one; with BeautiControl North America seeming to kind of recover at this point or you expect it to recover in 2010, you speak about having a portfolio that offsets areas were you have some hick-ups. If you had to handicap it for 2010 or looking at it for 2011 even, are there areas where you’re a little bit more anxious at the margin in places that could be future drags on the portfolio?

Rick Goings

Andrew I would tell you, in this year as we entered 2010, the number of markets that I was concerned with, that I would call red markets out there has shrunk, and there isn’t a single one of them where we haven’t implemented new management teams on the ground or the differentiated kind of strategies. If I have one market in the world that I haven’t seen it turn yet and I think we are doing the right things, it’s Japan. It’s hard to make things happen fast in Japan. I don’t know what you would add to it, Mike but that would head my list.

Mike Poteshman

Yes, I think that’s right, and Andrew we always got markets moving in both directions. Lately in the last few years there has been many more moving in the right direction and we just continue to work systemically on the ones that aren’t where we’d like.

I think we’ve done better and better at being able to take things across markets where it is working well and help our Group leaders really, and Rick and Simon teaching our R&Ds about how to do these things where we can really get the kind of results we want out of our businesses. So the availability to keep the good ones moving and the ones that aren’t quiet where we want them right now, to get these things moved across.

Rick Goings

Andrew a brief color on that, we don’t use the outside, they don’t like it, but we don’t use the outside, the McKenzie, DCG consulting groups here. What we do have is, we have an internal consulting team, and that we have recruited people that generally were in those positions for three to four years, then they’re promoted up through the business rather than somebody come in here who doesn’t know our business well.

Here with the head of our Investor Relations, Nikki Decker was on the team; that was her previous assignment. That team will go into a market and they’ll work on what do they need to work on? What matters, what doesn’t? What’s really going on? Germany, I believe Nikki was trying nine things that they needed to work on. That was last year; they did those implementations in March. They also went right about the same time into Italy.

By the way, both of these are very profitable, but we wanted to see them north of 20% profitable and we wanted top line growing as well. That team over the last two weeks has been in the Nordic markets where we have good businesses, but with what’s happening with the euro currencies up there, it really has been sluggish. They’re focused on also the Philippines, and they have been focused on Switzerland.

So we just don’t sit there and hope those things get better. Every one of those markets has a plan, and then every single month when we’re doing our monthly progress reviews, we say how are they moving on their plan to move to a better place? Forgive the long words, but it was an important question.


Your final question comes from Gregg Hillman - First Wilshire Securities Management.

Gregg Hillman - First Wilshire Securities Management

Rick could you talk about Asia Pacific, what the largest country is for starters in terms of sales?

Rick Goings

Yes, you heard me up there. Goodness, our largest probably still is Japan, isn’t it?

Mike Poteshman

Yes, the three biggest Greg are Australia, Japan and Indonesia now.

Gregg Hillman - First Wilshire Securities Management

So I think in your 10-K, for the last year Indonesia was not in there I believe. So that means Indonesia will be one of your top 10 markets now in the K when you file it?

Mike Poteshman

It will be on that list. I think Rick mentioned in his comments that we were up 95% on local currency sales, so it grew a lot.

Gregg Hillman - First Wilshire Securities Management

So if you said Venezuela earlier in the call was $60 million, that means Indonesia must be higher than $60 million?

Mike Poteshman

I’m not going to break those out Greg, but it was a wonderful attempt. By the way Greg, I’m seeing you’re looking at that; again I’m going to be in Indonesia, but here’s where these things are coming on so strong, because there’s such a wide space. Again our Indonesia business, Indonesia is the fourth largest population in the world, and I’ve never done a meeting, and I used to live and work Hong Kong outside of Jakarta, but we are moving through all of the islands and it’s been wonderful, but what I really was happy to see in Asia Pacific this year is India.

Nobody is really cracked India very effectively direct sales wise to my belief, and to see an India business up close to 40%, we really are now starting to get scale there, and that’s what happens. I’ll tell you what happened in Indonesia, in Indonesia the business got to a certain size, we did 18 months ago a Chairman summit there where we filled the place with not only women, but we asked her husband to come. It’s a Muslim culture, we wanted his support. Albeit we had simultaneous translation; it went out for about half a day then recognition, it exploded after that.

So I see that in Asia Pacific, I’m looking here at China, India, Indonesia, very good business in Korea. They did a good job this last year, but our big fix and what I was talking to Andrew about is, we’ve got to get these Japanese businesses fixed.

Gregg Hillman - First Wilshire Securities Management

You don’t have any multilevel type incentive structures in any of the Asian countries. It’s all just direct selling or recruiting distributors underneath it; there was no royalty overrides?

Mike Poteshman

A tiny one in one of our Japanese business, our nature care business there, but ours generally isn’t a multilevel. In our business in Malaysia, we will have multilevel compensation, but not a multilevel selling.

For example; Amway multilevel selling or Herbalife etc, means I recruit people to become distributors and they just become users of the product. That’s your sales force, where your customer is your sales force on that.

On a Malaysian business has multiple levels of compensation, but there are real customers. Our major reason, you and I have talked about this individually Greg is, those models, multilevel selling models are particularly volatile, because you never have a sales force that’s really, this is their career.

Gregg Hillman - First Wilshire Securities Management

Then Rick just one final question, you said you got a product award in Russia, what product was that for?

Rick Goings

That was a whole line, the exact whole line. The same in India and the same in China; it was the brand and all the products we sale.

Gregg Hillman - First Wilshire Securities Management

Including your cooking items and storage containers?

Rick Goings


Gregg Hillman - First Wilshire Securities Management

Just going back to India, I guess India is still not in the top 10, it wasn’t in the K last year. How long do you think it will take India really to get going and get up to a level of Indonesia?

Mike Poteshman

I need to do the math, but we’re getting to a very significant base right now, that you to compound 40% on that in a couple of years.


It appears there are no further questions at this time. Mr. Goings, I’d like to turn the conference back over to you for any additional or closing remarks.

Rick Goings

I’ll be brief guys. I was asking Nikki across the table here, and I said “Nikki why would you tell people to buy Tupperware today?” and then she wrote this strong company financials. I mean really the top line growth, it’s from all segments right now; the cash flow, the reduced debt levels, and our improving ROS.

Secondly, we’re willing to grow. We have a lot of white space in all of these emerging markets and you do the cadgers on12% to 14% growth, but increasingly there’s such a renewed enthusiasm about these established markets of the world, and a wonderful competition for them to be the next established markets of the world.

Third, diversification of sales; no longer can we have one market or one currency during the year for us, so we’re sort of so diversified; and lastly I’d say our multiple. I think we’re in the mid teens in a brand that’s known everywhere.

So thank you everybody for your time; and again I guess the last thing I would say is, if there was a difference in our trends in January, we’re already into through January, we already have visibility through the first couple of weeks of February, and if we didn’t have a high level of confidence in the direction we are giving you and what we’ve already booked in this time for 2010, you would have gotten a different signal. Thank you.


That concludes today’s presentation. Thank you for your participation.

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