Heinz Reports Higher Quarterly Profit, Attributed to Growth in Emerging Markets
Net income was $284.7 million, or 88 cents per share, in the third quarter ended on Jan. 25, up from $273.8 million, or 84 cents per share, a year earlier. Emerging Markets delivered 19.8% organic sales growth and accounted for more than 20% of total Company sales.
Feb 20 2012 --- H.J. Heinz Company reported third-quarter sales growth of 7.2%, led by dynamic growth in Emerging Markets and higher Global Ketchup sales.
Net income was $284.7 million, or 88 cents per share, in the third quarter ended on Jan. 25, up from $273.8 million, or 84 cents per share, a year earlier. Emerging Markets delivered 19.8% organic sales growth and accounted for more than 20% of total Company sales.
Heinz Chairman, President and CEO William R. Johnson said: “Heinz delivered sales growth of more than 7% and higher EPS in the third quarter while continuing to invest in marketing, new capabilities and productivity initiatives that will make the Company even more competitive in a rapidly changing world.”
Emerging Markets were the biggest growth driver in the quarter as they delivered organic sales growth of 19.8% (39.7% reported) and generated more than 20% of the Company’s total sales in the quarter. The organic growth was fueled by strong performances in the Heinz and Master brands in China, the Heinz brand in Russia and Latin America, Complan nutritional beverages in India and ABC sauces and drinks in Indonesia. Heinz’s acquisition of Quero brand tomato-based sauces, ketchup and vegetables in Brazil drove an additional 3.6% increase in total Company sales in the third quarter.
Global Ketchup sales grew 8.8% organically (8.6% reported) driven by growth in Latin America and in U.S. Foodservice, which was aided by the continued successful expansion of Heinz Dip & Squeeze Ketchup, an innovative dual-function product that delivers more ketchup than traditional packets. Heinz delivered record market shares across Continental Europe, Mexico and Canada.
The Company’s Top 15 brands delivered organic sales growth of 5.9%, (10.6% reported) fueled by growth in the Heinz, Master and ABC brands. Marketing increased 10% year-to-date as Heinz focuses on driving innovation and growth in its core brands.
Overall, the Company's global portfolio delivered organic sales growth of 4.6%, reflecting a 4.2% increase in net pricing and 0.4% growth in volume. Acquisitions, net of divestitures, increased reported sales by 2.9%. Unfavorable foreign exchange translation rates decreased sales by 0.4%.
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