HJ Heinz Company has posted a sales increase of 6.7% to US$8.6bn for the 2006 financial year but EPS from continuing operations decreased $0.66 from the prior year.
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The company’s top ten brands grew 4.5% during the year, led by double-digit growth in its Smart Ones, Classico and TGIF brands. Operating income increased 3.2% over the prior year despite significant cost increases for fuel and commodities, the company said.
Heinz completed the sale of ten non-core assets resulting in cash proceeds of approximately $857m in 2006. Volume performance was strong in North America, Australia and in the Italian infant feeding business, partially offset by “softness” in frozen food category in the UK, the company said.
Heinz chairman, president and CEO William R Johnson said: “In Fiscal Year 2006, Heinz generated strong sales growth, operating profit and cash flow. Our achievements in the fourth quarter of FY 2006 included sales growth of 7.6%, led by double-digit growth in Smart Ones nutritional meals, Classico premium pasta sauces and Ore-Ida potatoes, and a 6.3% increase in operating income, excluding special charges, reflecting strong volume across all segments and recent acquisitions.
“We have good momentum going into Fiscal Year 2007 as we execute our plan to deliver superior value and growth.”
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By GlobalDataFor the fourth quarter of 2006, EPS at Heinz also fell, to $0.54 versus $0.59 in the prior year, but exceeded previous estimates, the company said. Fourth-quarter sales increased 7.6% to $2.4bn.
Net income during the three-month period was down to $167.9m compared to $206.5m last year, partially reflecting the write-down of the company’s Zimbabwe operations.
During the fourth quarter, Heinz completed the sales of its European Seafood business, its Tegel poultry business in New Zealand and several other smaller non-core businesses.
Heinz also received final regulatory clearance for its acquisition of the HP Foods Group, at the centre of a protested re-location from the UK to Holland.
