Key highlights of Heinz’s 2Q15 results
- Heinz’s net sales fell 4.1%.
- Heinz’s organic net sales rose 5.9%, driven by higher pricing across all segments and SAP[1. Statutory accounting principles] implementation in the prior year.
- Organic adjusted EBITDA grew 16.3%, driven by increased sales and lower SG&A expenses.
- Heinz’s sales fell 4.1% due to a -9.4% impact from foreign exchange translation and a 0.6% reduction from the divestiture of a frozen food business in the United Kingdom.
- Higher pricing across all segments, primarily due to Latin America, caused an increase in the net price of 4.2%.
- Higher inventory stock at US retailers drove the volume increase of 1.7% in the first quarter of 2014 prior to the implementation of SAP, as well as raw material and packaging supply constraints in Venezuela.
What management had to say
Kraft Heinz CEO Bernardo Hees stated, “The Company is focused on the difficult and challenging process of integrating our two businesses. We have a lot of hard work ahead of us as we continue to design our new organization, always putting our consumers first. The company remains confident in its ability to deliver against its initial financial expectations for the merger of Kraft and Heinz, including its expectation to generate aggressive run-rate cost savings of $1.5 billion by the end of 2017, inclusive of savings from productivity and cost savings initiatives contemplated prior to the merger. As a matter of practice, however, Kraft Heinz does not expect to issue or update earnings guidance going forward.”
About Kraft Heinz
The Kraft Heinz Company is the third-largest food and beverage company in North America and the fifth-largest food and beverage company in the world, with eight $1 billion-plus brands.
The Company’s iconic brands include Kraft, Heinz, ABC, Capri Sun, Classico, Jell-O, Kool-Aid, Lunchables, Maxwell House, OreIda, OscarMayer, Philadelphia, Planters, Plasmon, Quero, Weight Watchers Smart Ones, and Velveeta.
Its comparables in the industry include General Mills (GIS), the J.M.Smucker (SJM), and Mondelez International (MDLZ), which recorded positive year-to-date returns of 11.18%, 7.95%, and 27.19%, respectively.