Chocolate manufacturer The Hershey Company has increased its investment in enterprise resource planning.
To remember: this company is the largest producer of quality chocolate in North America, a leading snack manufacturer in the United States and a world leader in chocolate and non-chocolate confectionery products.
Hershey markets, sells and distributes its products under more than 90 brands in approximately 80 countries around the world.
While its net sales increased at a year-over-year rate of 7.2% in 2023, to $11.165 billion, its net earnings rose 13.2%, to $1.862 billion.
The company is in the process of a multi-year implementation of a new global enterprise resource planning (ERP) system, which replaces its existing operational and financial systems.
What is the function of the ERP system? It is designed to accurately maintain the company’s financial records, improve operational functionality and provide timely information to the management team related to the operation of the business.
During the third quarter of 2022, Hershey completed the implementation of an operating segment that is included in its International segment.
In July 2023, the company completed the transition to the new ERP system as a consolidated ledger.
Hershey
During October 2023, completed the implementation of its new ERP system in the North American Salty Snacks segment.
Hershey updates its internal controls to reflect changes in financial reporting business processes affected by this implementation.
In addition, the company acquired certain assets that provide additional manufacturing capacity from Weaver Popcorn Manufacturing.
The company’s primary uses of cash for investing purposes relate to purchases of property, plant and equipment and capitalized software, as well as business acquisitions, partially offset by proceeds from sales of property, plant and equipment.
Technology
How much does the company invest? It uses cash of $1.2 billion for investing activities in 2023, compared with $0.8 billion in 2022, with the increase in cash spending driven by increased investments in capabilities and technology, as well as a higher level of acquisition activity.
Capital expenditures, including capitalized software, primarily to support its ERP system implementation, capacity expansion, innovation and cost savings, were $771.1 million in 2023, $519.5 million in 2022 and $495.9 million in 2021.
