Growth in emerging markets drove profits at US food giant Heinz during its second quarter, the company revealed today (19 November).
Ketchup maker Heinz booked net income from continuing operations of US$251.4m for the three months to 27 October, an increase of 3.4% on the year. Reported net income was up 8.6%. Operating income was up 2.1% at $417m.
Reported net sales fell 1.2% to $2.61bn due to the impact of currency fluctuations, although on an organic basis, which excludes foreign exchange and M&A, sales grew 0.9%.
Heinz’s infant nutrition, ketchup and “nutritional” beverages businesses, combined with the impact of higher prices, particularly in Latin America drove a 10.2% increase in sales from emerging markets on an organic basis.
The company said all of its operating segments, aside from its US foodservice division, delivered organic sales growth during the quarter.
Heinz chairman, president and CEO Bill Johnson said: “Our strategy to accelerate growth in emerging markets is producing excellent results, especially in Asia, where Heinz is well-positioned with strong brands in growing economies that possess expanding numbers of new middle-class consumers. Emerging markets are driving our growth this year and are on track to generate at least 20% of the company’s total sales by 2013.”
Shares in the company were down 1% at 9:55 ET to $47.71 a share.
Click here for the full earnings statement from Heinz and click here for CEO Bill Johnson’s comments today on the potential for the company in China.
