Heinz CFO Highlights Company Strategy
Mr. Winkleblack said that today's Heinz is building on a focused foundation of three core food categories that comprise 96 percent of the Company's sales and which are growing at healthy rates around the world.
07/09/07 Speaking at the Lehman Brothers "Back-To-School" Consumer Conference in Boston, H. J. Heinz Company Executive Vice President and Chief Financial Officer Art Winkleblack has highlighted the Company's strong momentum and four key growth strategies for Fiscal 2008 and beyond.
Mr. Winkleblack said that today's Heinz is building on a focused foundation of three core food categories that comprise 96 percent of the Company's sales and which are growing at healthy rates around the world. They are: Ketchup & Sauces; Meals & Snacks; and Infant Nutrition. He pointed out that Heinz's top 15 brands, including the $3 billion-plus, Heinz brand, generate about 70 percent of the Company's total sales.
"Given our strength in the first quarter, and our strong plans for the balance of the year, we believe that we are well positioned to deliver excellent results. This includes our expectation of achieving the upper end of our EPS range for FY08, despite a difficult commodity cost environment, and a number of new initiatives in which we are investing," Mr. Winkleblack said.
On August 24, Heinz reported first quarter sales growth of 9 percent; operating income growth of 15 percent; and EPS growth of 9 percent, and affirmed that the Company is on track to achieve the upper end of its Fiscal 2008 EPS range of $2.54 to $2.60.
Mr. Winkleblack outlined the four key strategies the Company is executing to sustain its growth:
1. Consumer-driven innovation;
2. Increased investment in consumer marketing;
3. Continued strong growth in emerging markets; and
4. Targeted acquisitions in the Company's core food categories
"Essential to our growth is the Company's ability to hit the 'sweet spot' - where great taste, convenience and health converge. Capitalizing on the health and wellness trend is a key strategy for Heinz. We are providing consumers with many healthy options to suit their tastes and lifestyles on a daily basis," Mr. Winkleblack said.
Mr. Winkleblack emphasized the strength of Heinz's international portfolio, which represents 60 percent of total Company sales. He also discussed the growing importance of emerging markets to Heinz's success. These markets, which include Russia, Indonesia, China, India, Poland and Latin America, have doubled their contribution to the Company's overall sales mix from 5 percent in Fiscal 2002 to 10 percent in Fiscal 2007.
"With sales in these markets totaling nearly $1 billion, we are well ahead of many of our American food company peers in terms of brands, infrastructure, people and capabilities. Importantly, emerging market growth accelerated in the first quarter of this year, up 15 percent," Mr. Winkleblack said.
