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May 26, 2011

US: Heinz books record FY sales and profits

HJ Heinz today (26 May) reported its best-ever annual profits on the back of record full-year turnover, higher margins in Europe and double-digit sales growth in emerging markets.

By Dean Best

HJ Heinz today (26 May) reported its best-ever annual profits on the back of record full-year turnover, higher margins in Europe and double-digit sales growth in emerging markets.

The results came as Heinz also set out plans to improve its manufacturing efficiency and productivity, moves that will include the end of production at five factories.

The US food group booked net income of US$990m for the 12 months to 27 April, up 14.4% on the year. Operating income grew 5.7% to $1.65bn.

The ketchup maker’s gross margin was up 70 basis points due to “strong” margin improvement from its US foodservice and European operations.

Sales rose 2% to $10.7bn, with sales in emerging markets up 14.4% on an organic basis. Heinz cited “record” sales of its namesake baby food in China, ABC soy and chilli sauces in Indonesia and ketchup in Russia.

Chairman, president and CEO Bill Johnson pointed to the “excellent execution” of Heinz’s “long-term plan” for the results.

“Heinz delivered record sales, net income and cash flow in fiscal 2011, fuelled by accelerating growth in key emerging markets like China, India, Indonesia and Russia and value-enhancing innovation in our core portfolio of iconic brands,” Johnson said. “Through excellent execution of our long-term plan, Heinz enhanced its position as one of the best-performing global food companies while driving shareholder value and continued dividend growth.”

Heinz also raised its annualised dividend by 6.7% to $1.92 and upped its “long-term” target for earnings per share – at constant currencies – from growth of 6-9% to 7-10%.

Click here for the full release and click here for further insight from Heinz’s analyst day in Pittsburgh.

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