just-food presents the key metrics from company financials in bitesize format, with analyst insight and social media comment alongside graphs illustrating a business’ historical performance to give you an easy-to-read digest of the numbers you need to know.

Kraft Heinz to invest big after FY sales fall flat

US food giant Kraft Heinz is planning to spend big after expressing disappointment with its full year 2017 results.

Although income was up, sales were marginally down on a year-on-year basis.

CEO Bernardo Hees said: “There’s no question that our financial performance in 2017 did not reflect our progress or potential.

“We made significant improvements in many of our businesses, and were able to accelerate some important business investments at the end of the year. This, together with benefits from the US Tax Cuts and Jobs Act and additional investments in our capabilities, should help further advantage our brands and grow our business in 2018 and beyond.”

The company said it would be “accelerating key business initiatives” including pumping around US$300m into strategic investments, to build capabilities, people and brands, and more than $800m into capital expenditures, partly, to build capacity.

– Net sales down 0.9% at US$26.23bn

– EBIT up 10.1% at $5.53bn

– Net income up 201.9% at $10.99bn

John Baumgartner, a senior analyst at Wells Fargo, said: “EBITDA pressure is a negative surprise: Top line softness is disappointing but US shipments respectable vs. low expectations. The larger issue is the margin pressure and far weaker EBITDA contribution given anticipated cost savings realisation. We presume that freight had an impact, as well as reinvestment, but it’s little consolation for a market still seeking renewed margin growth acceleration in the absence of M&A news.”

Campbell Soup Co. H1 sales drop on lower volumes

Campbell Soup Co. reported a drop in first-half organic sales due to lower volumes. However, it noted a positive impact on revenues from its acquisition of Pacific Foods, which, along with the contribution from US tax reforms, prompted the food giant to raise its full-year outlook.

– First-half sales to 28 January fell 1% to US$4.34bn – organics sales drop 2%
(Second-quarter sales also decline 2%)

– EBIT declines 1% to $655m

– Adjusted EBIT down 10% at $819m

Chief executive Denise Morrison said: “This was a disappointing quarter, driven by continued challenges in U.S. soup and Campbell Fresh. The decline in organic sales was largely due to the performance of Americas Simple Meals and Beverages, where U.S. soup sales decreased by 7%.”

Campbell now sees 2018 sales either rising or falling 1%, compared to a range of minus 2% to flat previously. Adjusted EBIT expected to fall 7-5% versus a drop of 6-4%.

Campbell Soup Co. completes drawn out acquisition of Pacific Foods

Danone surfs WhiteWave synergies in its FY results

French dairy giant Danone has seen an increase in sales and a surge in income in its FY 2017 results, on a year-on-year basis.

It said that more than US$50m in synergies had been delivered in 2017 from its WhiteWave integration.

Emmanuel Faber: chairman and chief executive officer, said: “In 2017, Danone once again demonstrated the strength of its portfolio, the resilience of its business model and its ability to execute. Despite volatile food and beverage markets and rising input costs, we delivered very strong full-year results, with double-digit recurring earnings per share growth in line with our latest guidance. 

“We closed the year with an accelerated sales growth rate, outperforming the industry average, along with very strong margin improvement and free cash flow above EUR2bn (US$2.5bn). In addition to strong results delivery, 2017 has been a year of preparation and continued transformation with the on-boarding of WhiteWave, and the launch of our ambitious EUR1bn ‘Protein’ savings programme.” 

– Sales up 2.5% on a like-for like basis with New Danone at EUR24.67bn (US$30.91bn)

– Operating income up 27.7% at EUR2.92bn.

– Net income up 42.6% at EUR2.45bn.

Andrew Wood, a senior analyst at Sanford Bernstein, said: “Overall, FY 2017 like-for-like sales growth (+2.5%) was in-line with guidance for “moderate” growth; operating margin growth (+60bps, to 14.4%) was “sustained”; and EPS growth (+13%, or +14% ex FX) was “above +12%”. Danone beat consensus expectations on each of these metrics. Unfortunately, 2018 guidance for “further sales growth” and “improved” margin is broadly useless, although a commitment for double-digit EPS growth in constant FX is better. Before these results we estimated +3.8% organic sales growth, +80bps margin growth, and +12% underlying EPS growth.”

J.M. Smucker Q3 food sales fall; EPS outlook raised

Despite reporting “strong” third-quarter revenues, US-based J.M. Smucker saw sales fall in its consumer foods division primarily driven by its Crisco and Pillsbury brands. 

However, it raised its full-year estimate for adjusted earnings per share to $8.20-$8.3 from $7.75-$7.90 previously, although it expects sales to be “in the range of flat to down slightly”. 

– Net sales for quarter ended 31 January rise 1% to US$1.9bn

– Operating income falls 32% to $162.7m

Retail Consumer Foods division:

– Sales drop 1% to $511.6m

– Profit up 2% at $121.3m

Thursday 15 February

Nestle disappoints as organic growth continues to slow, profits fall

Swiss food giant Nestle reported another year of slowing growth and falling profits.

CEO Mark Schneider said: “Our 2017 organic sales growth was within the guided range but below our expectations, in particular due to weak sales development towards the end of the year. Sales growth in Europe and Asia was encouraging, while North America and Brazil continued to see a challenging environment.”

With respect to Nestle’s stake in cosmetics firm L’Oreal, the company said the board decided not to renew its shareholder agreement, which expires on 21 March, and added: “We do not intend to increase our stake in L’Oreal and are committed to maintaining our constructive relationship with the Bettencourt family.”

– Books full-year organic growth of 2.4% – real internal growth (RIG) up 1.6%

(In 2016, reported organic growth of 3.2% and RIG of 2.4%)

– Reported sales rise 0.4% to CHF89.8bn (US$97bn)

– Net profit drops 15.8% to CHF7.2bn

– EPS decline 15.8% to CHF2.32

– Underlying trading operating profit margin climbs a better-than-expected 50 basis points to 16.4% in constant currency terms

– Trading operating profit margin falls 60bps to 14.7% on a reported basis, in line with company’s expectations outlined in October

For 2018, Nestle sees organic sales growing between 2% and 4% and an improvement in the underlying trading operating margin in line with its 2020 target. Expects restructuring costs of around CHF700m. 

Andrew Wood, an analyst at Sanford Bernstein, commented on the results. “Nestle’s FY 2017 organic growth (+2.4%) is the 6th straight year of slowing growth and the lowest this century. We would hope this is the nadir. The Nestle turnaround under new CEO Schneider is still ‘work-in-progress.’ We had hoped for optimistic 2018 organic growth guidance (3-5%) so we are disappointed that management only indicated that growth would ‘improve’. Guidance for margins ‘on track for our 2020 target’ (17.5% to 18.5%) implies above +40bps growth and was as expected. Before this reporting we expected a good improvement in organic sales growth (+3.6%) which now looks optimistic. We also expected good margin growth (+45bps) and high single-digit EPS growth (+8%), and we would not expect major changes here.”

TreeHouse Foods records huge losses

TreeHouse Foods, the largest supplier of own-branded products to US grocers, saw its operating income loss increase by a huge 324.7% in calendar year 2017. Net income losses also increased despite a rise in sales.

CEO Sam Reed said: “Our cash flow delivery continues to be robust, and although our fourth quarter earnings were in line with our expectations, our operational results were disappointing. We are well positioned within the private label marketplace; however, it is imperative that we build a more effective and efficient foundation for private label customer engagement. Our infrastructure is unrivalled in our sector, and we continue to see opportunity to, over time, achieve consistent organic growth and margin expansion in parallel.”

– Net sales up 2.1% at US$6.30bn

– Operating loss increased by 324.7% to -$411.2m

– Net loss increased by 25.2% to -$286.2m

Pilgrim’s Pride on the up as it rides out logistical challenges

US chicken giant Pilgrim’s Pride has seen its operating income exceed US$1bn for the full year 2017 in its first annual results since it acquired UK poultry firm Moy Park for $1.3bn in September. Sales were up 9% on a year-on-year basis.

CEO Bill Lovette said: “We generated strong, well-balanced consolidated performance in 2017. Our US and Mexico operations were solid despite logistical challenges in Q4 due to the after-effects from natural events in Puerto Rico, Mexico and the US, while our newly acquired UK and continental Europe operations were consistent. 

“The performance once again demonstrated the strength and diversity of our portfolio of bird sizes, and is what fundamentally differentiates us from the competition, giving us the potential to reduce volatility and generate higher margins over time.”

– Net sales up 9% at US$10.76bn

– Operating income up 35.4% at $1.07bn

– Adjusted EBITDA up 34.8% at $1.39bn

GreenSpace Brands sees losses narrow as 9M sales surge

Canadian natural food products group GreenSpace Brands saw net revenues leap forward by 53.6% in the nine months to 31 December on a year-on-year basis. Net losses narrowed by 40.4%.

Commenting on its Q4 performance, the company said: “The year-on-year revenue growth of 62% experienced in the quarter in comparison to the same period in prior year was the result of growth across nearly the entire brand portfolio, with Love Child and Central Roast performing especially well.”

– Net revenue up 53.6% to CAD39.8m (US$31.9m)

– Net loss improves by 40.4% to CAD1.5m

– Adjusted EBITDA up 34.2% to CAD1.41m

Atria profits up on ‘healthy growth’ strategy

Finland-based meat producer Atria reported an increase in full-year sales and profits after continuing to implement its ‘healthy growth’ strategy and concentrating on achieving organic growth.

– Full-year sales rise 5.9% to EUR1.43bn (US$1.79bn)

– Consolidated EBIT climbs 28.6% to EUR40.9m

– EBIT ratio increases to 2.8% from 2.3%

Profit before tax up 36% at EUR35.5m

Agropur sales and income in positive territory

Canadian dairy cooperative Agropur saw sales increase by 7.7% in its fiscal year 2017 (to 1 November) on an equivalent basis to the prior period. This was partly due to higher cheese prices and higher volumes in the US and Canada.

CEO Robert Coallie said: “We are showing profitable growth on both sides of the border. We owe this success to our constant focus on innovation, our quest for efficiency, and the strength of our brands.”

– Sales up 7.7% to CAD6.4bn (US$5.1bn)

– Income from operations up 7.9% to CAD444.1m

– Net income CAD 174.9m

Profits tumble at Norway meat group Nortura

Norway-based meat co-op Nortura saw its earnings slide in 2017 despite an increase in revenue.

Nortura pointed to a series of factors for the decline in profits, including a move to wholesale-controlled distribution, an “imbalance” between production and demand, as well as the implementation of a new IT platform.

“This result is not in line with the ambitions we have. We are facing several major change processes that need large resources and we are now taking immediate action to rectify the course,” CEO Arne Kristian Kolberg said.

For the year to 31 December:

– Revenue reached NOK21.05bn (US$2.69bn), up from NOK20.57bn in 2016

– Operating profit of NOK153.5m, versus NOK546.1m

– Net profit stood at NOK44.6m, against NOK351.9m

Tuesday 13 February

PepsiCo’s Frito-Lay division outperforms group sales

Growth in PepsiCo’s Frito-Lay North American food division outperformed overall group sales in the year to 30 December, while its Quaker foods arm saw a decline in revenues.

– Group net revenue rises 1.2% to US$63.53bn from a year earlier – organic growth of 2.3%

– Operating profit climbs 7% to $10.51bn

– Net income drops 23% to $4.91bn

For 2018, the company expects organic revenue growth to be at least in line with 2017. 

Food division 2017 sales:

– Frito-Lay North America up 2% at $15.80bn – operating profit climbs 3.5% to $4.82bn

– Quaker Foods North America falls 2% to $2.5bn – operating profit down 2% at $642m

Says Frito-Lay positively impacted by productivity gains and incremental investments in previous year, partially offset by operating cost inflation, higher raw material costs and the extra reporting week in the previous year. 

Quaker Foods negatively impacted by operating cost inflation, the 53rd reporting week and restructuring charges. These impacts were partially offset by productivity gains, lower advertising and marketing expenses and prior-year incremental investments. 

Britannia Industries profits from distribution network push

Indian packaged foods business Britannia Industries has seen growth in sales and income in its Q3 results (ending December 2017) on a year-on-year basis.

Managing director Varun Berry said: “Our double digit domestic growth of 15% for the quarter is backed by a double digit volume growth on the back of investment in brands and widening our distribution network through focus on direct reach, rural and weak markets.”

– Revenue up 9% at INR25.67bn (US$399.5m)

– Operating income up 8.81% at INR26.1bn ($406.3m)

– Net profit up 19.6% at INR2.64bn ($41.1m)

Bell Food Group on the up after acquisitions 

Switzerland-based meat processor and convenience food specialist Bell Food Group reported growth in its 2017 financial year on the back of takeovers of Hilcona and Eisberg.

The company, which announced last month that it was taking over fellow Swiss food group Huegli, said it expects the relaxation in raw material prices seen in the second half of 2017 to continue in 2018, which will have a positive impact on margins. 

But it warned it will be challenged again in the coming year by the intense competition in the European retail markets. 

– Sales up 5.9% to CHF3.6bn (US$3.85bn)

– Net profit up by 5.9% to CHF106.5m

– EBIT up 5.3% to CHF149.7m

Wessanen profits surge on own brand sales 

Dutch healthy food group Wessanen reported a surge in full-year profits led by its own brands, while its private-label business witnessed “significant” declines.

– Annual revenue rises 9.8% to EUR625.8m (US$770.6m) from a year earlier

– EBITE climbs 30% to EUR53.5m

– EBIT up 42% at EUR48.7m

– Profit increases 57.9% to EUR36m

Chief executive Christophe Barnouin said: “In 2017 our own brands achieved 7.7% autonomous growth, many of them growing at double-digit rates. Our private label and distribution business declined significantly given our strategy to focus on own brands. We also further advanced in creating international brand and category leverage and synergies.”

For 2018, the company expects “continued strong growth” of its brands and a further reduction in private-label sales. 

Monday 12 February

RCL Foods sees boost to headline earnings per share

South African-based food company RCL Foods says it expects to see an improvement in earnings in the six months to 31 December after one-off items negatively affected its results are year earlier.

Final figures are due on 26 February.

– Expects headline earnings per share (HEPS) between 69.5 cents (up 46%) and 79 cents (up 66%)

– Earnings per share (EPS) seen at 72 cents (up 93.5%) to 79 cents (up 112%)

Says this year’s gains are due to one-off affects that hit its results a year earlier: An after-tax impairment of SAR102.7m; the recognition of a SAR37.4m after-tax provision for restructuring costs; and a foreign-exchange loss of SAR27.9m relating to the settlement of the Zam Chick and Zamhatch options.

– Excluding those one-off items, RCL sees HEPS between 69.5 cents (+26.1%) and 79 cents (+43.4%) when compared to the normalised HEPS of 55.1 cents for the corresponding period. 

– Similarly, expects EPS between 72 cents (+27.2%) and 79 cents (+39.6%) from normalised EPS of 56.6 cents a year earlier.

Raisio profits slip on challenges in UK confectionery

Finland-based food manufacturer Raisio reported a drop in full-year sales and said profits were hit due to the “challenges of the UK confectionery business”. 

The company said its divestment of the confectionery category in December 2017 was its first “strategic step towards its focus” on the core healthy foods segment, and it will now look to “growth through acquisitions that suit its core business”. 

For Raisio’s continuing operations:

– Sales fell 8.8% to EUR306.8m (US$376.4m)

– Comparable EBIT drops 2% to EUR37.8m

– Comparable EBITDA declines 1.9% to EUR45.9m

For discontinued operations:

– Sales fell 7.7% to EUR402.8m

– Comparable EBIT down 9.5% at EUR45.9m

– Comparable EBITDA climbs to EUR57m

Savola reverts to FY profit but sales fall

Savola reported a drop in full-year sales but the Saudi Arabia-based food manufacturer turned a net profit due to higher margins in retail, lower operating expenses, lower impairment costs and a reduction in zakat and tax payments.

– Net revenue for year to 31 December falls 9.5% to ZAR23.8bn (US$6.3bn)

– Posts net profit of SAR1.03bn versus SAR363.3m loss a year earlier

– Operating profit climbs to SAR800.5m compared to SAR472.6m

Armanino sees FY sales and profits rise

California’s Armanino Foods of Distinction reported higher sales and earnings for 2017 as its performance was lifted by growth in the US and a second-quarter rebound in Asia. 

The company, which manufactures and markets frozen Italian food products, saw sales leap forward 9% on a year-on-year basis. 

CEO Edmond Pera said: “We are extremely pleased with our record breaking results this quarter, and for the year ended. All of this was achieved under the backdrop of a major reconstruction project during most of 2017 which was completed on time and within budget.”

– Net sales up 9% at US$38.9m

– Income from continuing operations before taxes up 11% at $7.2m

– Net income up 20% at $5.1m

LT Foods improves over 9M

Indian rice producer LT Foods has seen sales and income improve over nine months in its fiscal 2018.

In the period to the end of December profits were up by 20% on a like-by-like basis compared to the equivalent period in 2016.

CEO Ashwani Kumar Arora said: “In last nine months, we have made substantial investment in making LT Foods a future ready organisation. In line with our vision, we have expanded our geographical reach, product portfolio and distribution network. The same is being reflected in our revenue growth of more than 9% and substantial increase in our net profits.”

– Revenue up 10% to INR2572m (crores) (US$386.6m)

– EBITDA up 5% to INR310m (crores) ($46.6m)

– Net profit up 20% to INR110m (crores) ($16.5m)