The Board of Directors of the H.J. Heinz Company (NYSE: HNZ) today unanimously elected William R. Johnson as Chairman, effective immediately. As only the fifth Chairman in Heinz's 131-year history, Mr. Johnson succeeds Anthony J.F. O'Reilly, who retired today, as previously announced, following the annual shareholders meeting held in Pittsburgh, Pa.

"I am greatly honored to be chosen Heinz's new chairman and to take up the standard carried so successfully by visionary leaders such as Tony O'Reilly and Henry J. Heinz," Mr. Johnson said. "Like them, I am committed to making Heinz the world's leading food company in terms of growth and performance, and I am grateful to Heinz's Board for its vote of confidence in our management team and global growth strategy."

In addition to his new responsibilities as Chairman, Mr. Johnson will continue to serve as President and Chief Executive Officer of the H.J. Heinz Company. He was named President and Chief Operating Officer in June 1996 and CEO on April 30, 1998. Dr. O'Reilly, who had been Heinz's Chairman since 1987, had also held the positions of President and CEO before Mr. Johnson.

"Tony leaves us a proud legacy, upon which we will continue to build as we open new markets and explore new growth opportunities around the world," Mr. Johnson told the shareholders at today's meeting. "I have greatly admired and respected Tony's accomplishments over the years and have enjoyed working with him. He transformed Heinz into a global food company and was one of the first truly global CEOs. His vision and energy were key to Heinz's development."

During a tribute at the annual meeting, Mr. Johnson showed a special commemorative video that highlighted Dr. O'Reilly's many accomplishments as sportsman, business statesman and philanthropist. Mr. Johnson then presented a gift to the outgoing Chairman of a rare and historic glass ketchup display bottle from the time of the company's Founder.

In his final remarks to Heinz shareholders as Chairman, Dr. O'Reilly called Heinz "a fine, sturdy, dedicated, well-directed company that knows what it wants, knows how to make it, knows who its customers are and can deliver earnings and volume growth to the market." Heinz's largest individual shareholder, Dr. O'Reilly recalled that he did not own a single share when he joined the company in 1969, but has been "well rewarded" by building his stock holdings over the years and "reinvesting everything I could back into the company."

He expressed his full confidence in Heinz's leadership, praising "consistent, loyal, tough, talented managers like Bill Johnson" and his senior management team, as well as "a host of others who testify to the fact that the company nurtures great talent and loyalty within its workforce."

Additionally, Dr. O'Reilly singled out several key achievements that would distinguish Heinz in the 21st Century, such as its "icon brands;" its foodservice business ("indisputably the finest in the world of all food companies"); its efficient global manufacturing capabilities; and its strong balance sheet.

"These things just don't happen by accident," Dr. O'Reilly observed. "They happen by planning and by people and by having the right product in the right place at the right time."

INCREASING SHAREHOLDER VALUE

Mr. Johnson's shareholder address focused on the "prime concern of Heinz management, today and in the future -- increasing shareholder value."

Heinz's CEO pointed to strong financial performance and credible growth strategies as two key pillars of shareholder value. "Heinz is doing well in both areas, positioning the company for sustained value in the future," he said.

Mr. Johnson cited the company's strong first quarter results, announced on September 6, which included an 8% increase in operating income and 11.5% increase in earnings per share, excluding special items and the impact of the sale of the Weight Watchers classroom business. He also pointed to a record gross profit margin for the period of 42.2%.

Furthermore, Mr. Johnson noted that the Board of Directors had approved an increase in the annual dividend on common stock from $1.47 per share to $1.57 per share -- Heinz's 33rd consecutive year of dividend increases. "Heinz's long history of increasing dividends is an excellent reminder of our company's reliable and consistent financial performance," he stated.

Mr. Johnson presented other indicators of Heinz's financial performance, including:
  • Compound EPS growth in excess of 10% per year since 1996;

  • A nearly 6-point increase in Gross Profit Margins in the most recent quarter, from 36.6% in Fiscal 1996 to 42.2%;

  • A 4-point improvement in Operating Margins over the past four years to 18.2% from 14.1%;

  • An increase in the Return on Invested Capital to 30.6% from 21% in Fiscal 1996;

  • An improvement in the Return on Equity to 54.4% from 25.5% four yearsago; and a

  • Reduction in the number or shares outstanding by nearly 6%.
"Our strong performance has successfully overcome the continuing challenge of the strong U.S. dollar," he said, noting that from Fiscal 1997 through Fiscal 2001, unfavorable currency exchange rates will have reduced Heinz sales by more than $1 billion and operating profits by $200 million -- or approximately $0.37 per share.

BRAND AND CATEGORY GROWTH

Continued success will flow from Heinz's ability to generate brand and category growth, Mr. Johnson maintained. He pointed to three dominant growth trends that Heinz is addressing: technology, globalization and innovation.

He pointed Heinz shareholders to dramatic and transformative innovations and growth initiatives that the company is launching in the current fiscal year, including:
  • Heinz EZ Squirt ketchup for kids;

  • The Trap Cap in retail ketchup to eliminate the "watery stuff" on the bun;

  • The Forever-Full Foodservice ketchup bottle with the non-removable cap;

  • New Boston Market HomeStyle Meals lines of frozen soups and chili bowls;

  • Ore-Ida's Stand-Up Resealable Packaging;

  • The StarKist tuna pouch;

  • Pounce Purr-Fections dual-texture cat treats; and

  • Farley's Simplifeed system for infant formula in the U.K.
BUILDING INTERNAL STRENGTH

Mr. Johnson explained the company's recent acquisitions and reorganization in terms of its growth and innovation strategy. "Our acquisition strategy is designed to give us the scale, the market presence and the know-how to gain marketing leverage against key global consumer trends," he said.

This strategy was the impetus for Heinz's acquisitions in Fiscal 2000, including:
  • Acquiring a 19.5% stake in the Hain Celestial Group, the premier organic food company;
  • Expansion of Heinz's rapidly growing foodservice business by acquiring Thermo Pac, Quality Chef and, in July, International DiverseFoods;

  • Acquisition of UB Frozen and Chilled Foods to significantly expand Heinz's fast-growing European frozen business; and

  • A joint venture with Nutri Asia, the Philippines' leading ketchup company, which opened a major new Asian market.
Heinz's CEO also cited the company's successful reorganization under Operation Excel and the rapid combination of Heinz's North American operations in Pittsburgh to "strengthen our focus, coordination and leverage in North America."

"As we unite this wealth of human resources and ideas, we are tapping the tremendous talent of our people through intensive employee development programs," he said.

Mr. Johnson also told shareholders Heinz is "leveraging the power of new technology" through significant investment in new Internet applications, in particular as a co-founder of a major electronic-commerce exchange, known as Transora. "Through Transora, we are purchasing a wide range of goods and services at substantially lower cost via the Internet," he stated.

"As fellow shareholders, we know that Heinz is greatly undervalued," Mr. Johnson said. "We are confident that we are on track to achieve our growth goals for Fiscal 2001, which will validate Heinz as a true industry leader."

Mr. Johnson concluded: "Our vision is to be the best food company in America, with a future marked by innovation, global expansion and new technology. Above all, we see greater value for our customers, our consumers, our employees and especially the shareholders of this great company."

This news release contains forward-looking statements regarding the company's future performance. These forward-looking statements are based on management's views and assumptions, and involve risks, uncertainties and other important factors that could cause actual results to differ materially from those expressed or implied in the forward-looking statements. These include, but are not limited to, sales, earnings and volume growth, competitive conditions, production costs, currency valuations, global economic and industry conditions, achieving cost savings programs, success of acquisitions and new product and packaging innovations, including the innovations listed above and other factors described in "Cautionary Statement Relevant to Forward-Looking Information" in the company's Form 10-K for the fiscal year ended May 3, 2000, as updated from time to time by the company in its subsequent filings with the Securities and Exchange Commission.

ABOUT HEINZ: With sales over US$9 billion, H.J. Heinz Company is one of the world's leading marketers of branded foods to supermarkets and away-from-home eating establishments. Its 50 companies operate in some 200 countries, offering more than 57 hundred varieties. Among the company's famous brands are Heinz, StarKist, Ore-Ida, 9-Lives, Weight Watchers, Wattie's, Plasmon, Farley's, Smart Ones, The Budget Gourmet, Linda McCartney, San Marco, Go Ahead!, Bagel Bites, John West, Petit Navire, Boston Market, Skippy, Kibbles 'n Bits, Pounce, Wagwells, Orlando, ABC, Olivine and Pudliszki. Information on Heinz is available at http://www.heinz.com.