Heinz posts record sales result, cashes in on “at-home” trend

Posted by Daniel Palmer on 29th May 2009

Food manufacturer Heinz reported record sales and profit last night, with organic sales rising by 5.5% during Fiscal 2009 on the back of continued growth in emerging markets and acceleration of the consumer trend toward at-home eating.”Heinz delivered record sales and profit in Fiscal 2009 despite the difficult global environment,” William Johnson, Chairman, President and CEO of Heinz, noted. “Heinz brands around the world performed well, benefitting from the growing trend of at-home dining.”

Sales in Emerging Markets grew by 15.7%, propelled by double-digit organic sales growth in India, Indonesia, Latin America, Poland and baby food in China.

“Emerging Markets are a key driver of long-term growth for Heinz and they remain on target to generate 20% of our total sales by 2013,” Mr Johnson said.

Asia Pacific resilient

The maker of market leading baked beans and ketchup products performance in the Asia/Pacific region failed to match that of emerging markets, but an increase of 4.7% in organic sales was robust. Increased prices (6.1%) led the growth in sales, due primarily to increases in sardines and ABC sauces and syrup in Indonesia and improved pricing across almost all categories in Australia and New Zealand, the company advised. A volume decline of 1.4% failed to offset the benefit of higher prices. However, the strength of the US dollar in the first three quarters ensured a profit decline of 6.4% when translating sales into US dollar terms.

The company completed their acquisition of Golden Circle in the third-quarter along with the purchase of La Bonne Cuisine – a chilled dip business in New Zealand. These two acquisitions increased sales 6.8%, Heinz said.

Outlook

Mr Johnson is confident that the company can continue to post record results, forecasting sales growth of 4-6% as supermarket sales remain strong.

“Heinz is well positioned for future growth, with strong category-leading brands and core businesses that continue to perform well in this changing environment,” he said. “We expect to deliver solid EPS and sales growth on a constant currency basis in Fiscal 2010, however, our reported results will likely be affected by unprecedented currency volatility.”