Heinz Expect to Meet 4% Sales Target

20/09/07 Speaking at the Bank of America Conference in San Francisco, H. J. Heinz Company Chairman, President and CEO William R. Johnson highlighted the Company's accelerated sales and profit momentum and its growth strategies focusing on healthy eating trends and fast-growing emerging markets.

"As the original 'Pure Food' Company, Heinz is uniquely positioned to take advantage of consumer demand for healthier eating options. Our portfolio is centered on nutrient-rich tomatoes, potatoes and beans, and our growing baby food, Weight Watchers, and Smart Ones brands are squarely in the Health and Wellness sweet spot," Johnson said.

Discussing the fast growing emerging markets, Johnson noted, "Russia, India, China, Indonesia, Poland, along with our growing Heinz brand in Latin America, represented about ten percent of total Company sales in Fiscal 2007, more than double our position five years ago, and they contributed almost thirty percent of our top-line sales growth."

Commenting on the full year, Mr. Johnson noted, "Given our momentum, the strength of the first quarter, and aggressive plans for the balance of the year, we expect to over-deliver our original sales target of 4 percent and achieve the upper end of our EPS range of $2.54 to $2.60 in Fiscal 2008."

Mr. Johnson highlighted the four key pillars of the Company's growth strategy that Heinz is executing to sustain its accelerated momentum:

1. Grow the Core Portfolio through insight-driven innovation centered on the three key attributes consumers care about most: Taste, Health and Convenience;

2. Accelerate Growth in Emerging Markets where the Company is uniquely positioned;

3. Strengthen and Leverage Heinz's Global Scale through four company-wide initiatives on Health & Wellness, Supply Chain, Customers, and Capabilities; and importantly

4. Make Talent an Advantage by building managerial bench strength -- attracting, developing and retaining the highest-caliber people in the packaged goods industry.

Commenting on the performance Johnson said, "The strong growth of our top fifteen brands, together with a proven pipeline of innovation and a rigorous focus on cost reduction, has helped us surpass many of the targets established in our Superior Value and Growth Plan first communicated in June of 2006. We achieved exceptional sales, profit and EPS results in Fiscal 2007, the first year of our plan, and I am pleased to say that this momentum has continued into the first quarter of Fiscal 2008. Our first quarter results were highlighted by nine percent top-line growth, operating income growth of fifteen percent, even after a double-digit increase in marketing investment, and EPS growth of nine percent, despite a significantly higher tax rate year-over-year and unprecedented commodity inflation."

"Heinz has developed a significant catalogue of consumer insights in each of our markets which we have leveraged with double-digit increases in R&D over the past four years. As a result, we have a robust new product pipeline across the Heinz world. We successfully introduced more than one hundred new products last year and will introduce well over two hundred new consumer-validated innovations around the globe this year," he added.

"Underwriting our investments in growth and helping to offset the significant increases in commodity costs affecting our industry has been our ability to drive global pricing and productivity. Led by North America, and more recently Europe, we have improved net pricing over the last several years by focusing on more efficient trade spending, which has been reduced as a percentage of sales by approximately 300 basis points. We expect accelerated input inflation in Fiscal 2008 driven by continued escalation in oil prices and the soaring demand for corn as a result of government policies promoting ethanol as a fuel additive. We have successfully navigated this unprecedented cost environment, and I am optimistic about continued pricing opportunities and productivity gains," Johnson noted.