US food giant Heinz has reported a 10% increase in first-quarter profits on the back of continued growth in emerging markets, which now account for a record share of turnover.
Heinz booked a 9.5% gain in net income from continuing operations to US$279m, excluding the impact of a productivity programme on its results a year ago, for the quarter to 29 July.
The ketchup maker said sales in emerging markets increased by 19.3% on an organic basis, pointing to growth in Indonesia, India and Brazil. Emerging markets account for 26% of revenues, Heinz said.
It cited “improved results” in the US, although operating income from its North America business fell year-on-year. Heinz also saw its operating income in Australia double after last year’s productivity programme, which led to plants being closed, and after moves to cut the number of SKUs on sale.
On a reported basis, group operating income was up 10.7% at $410m. Excluding the impact the productivity programme had on profits last year, operating income was “virtually flat” amid the impact of the strong US dollar.
The “unfavourable” foreign exchange rates meant reported sales fell 1.5% to $279m, although on an organic basis, sales were up 4.8%.