HJ Heinz reaffirmed its 2009 earnings guidance on Wednesday (18 February) and said it will focus on core products, rather than experiment with new ideas.
Addressing analysts at the Consumer Analyst Group of New York (CAGNY) conference, Heinz CEO William Johnson said the company was on target to meet its financial goals and reaffirmed guidance of US$2.87 to $2.91, which represented a 9% to 11% increase from fiscal 2008.
Johnson said that continuing to increase the Heinz dividend, which has increased in each of the last six years, remains a “top priority”.
The CEO emphasised the company’s theme of the 5 C’s: ‘Consumer, Costs, Commodities, Currency and Cash’, and said that Heinz continues to focus on the company’s core brands.
“Going forward, our innovation will be focused more on well-tested ideas, as well as breakthrough ideas like Ore-Ida Steam n’ Mash. Now is the time to emphasize core products and categories, and avoid experimentation,” Johnson said.
He also added that Heinz continues to grow its presence in emerging markets, such as Poland, Indonesia, India, China and Russia, with the percentage of total sales derived from emerging markets having increased from 11% to 15% over the last two years.
During the presentation, Johnson told analysts of the company’s decision to replace the pickle on the Heinz Ketchup label with a tomato, which has promoted the introduction of websites by consumers such as; ‘Save the Pickle’.
The company said it is reducing costs through Project Keystone and plans to reduce packaging costs by 15% and improve productivity through the implementation of “enterprise-wide processes and systems” that will improve the company’s cost metrics.
The company said it would not provide any guidance for fiscal 2010.
“The current global economic environment, particularly as it pertains to currency and commodities, remains too volatile and unpredictable to make reliable forecasts this far in advance. What I can say at this point is that we expect positive top and bottom-line growth on a constant currency basis,” Johnson said.