US food giant Heinz has raised its earnings forecast for the next two years after announcing a rise in full-year sales and profits today (29 May).
The ketchup maker has launched a plan for its fiscal years 2009/2010 that, it said, will drive earnings per share growth of 8-11% annually over the next two years. Previous earnings per guidance was growth of 7-9%.
Organic sales are expected to rise by 6% or more annually for the next two years, Heinz said, as the company benefits from increased investment on marketing and new product development.
Heinz said it plans to launch 400 new products between now and 2010 and spend an additional US$60m to $100m on marketing.
During fiscal 2008, sales grew 12% to $10.1bn, driven by 6.9% organic growth. Organic sales rose 7% in North America, 8% in Europe and 19% in emerging markets, the company said.
Sales of Heinz branded products increased 14%, Weight Watchers sales rose 26% and emerging markets saw sales increase 25%.
Sales were boosted by 200 new product launches during the year and a 15% increase in the group’s expenditure on marketing.
Operating income increased 8.5% to $1.6bn as the company benefited from increased volumes, improved pricing and productivity, as well as favourable currency exchange.
Full-year net income from continuing operations increased 7% to $845m.
“Heinz once again delivered exceptional financial results in FY08 as we significantly increased sales, profits and operating free cash flow,” said Bill Johnson, chairman, president and CEO.
“Not only did we meet or exceed virtually all the goals we set for the past two years, but we have raised our outlook for sales and profits in our new High-Performance Plan for FY2009/2010.”