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Press release from Business Wire

Heinz Chairman Reviews the Company's Record Fiscal 2011 Results at Annual Meeting of Shareholders, Reaffirms Fiscal 2012 Outlook

Tuesday, August 30, 2011

Heinz Chairman Reviews the Company's Record Fiscal 2011 Results at Annual Meeting of Shareholders, Reaffirms Fiscal 2012 Outlook09:06 EDT Tuesday, August 30, 2011 PITTSBURGH (Business Wire) -- At the H.J. Heinz Company (NYSE:HNZ) Annual Meeting of Shareholders today, Chairman, President and CEO William R. Johnson said: “Fiscal 2011 marked yet another great year for Heinz as we delivered record sales, net income and operating free cash flow while completing key acquisitions in Brazil and China to accelerate our growth.” In his address to shareholders, Mr. Johnson also reaffirmed the Company's previously announced Fiscal 2012 outlook, saying: “For the full year, Heinz expects constant currency earnings in the range of $3.24 to $3.32 per share, excluding special charges of approximately 35 cents per share for a series of one-time strategic productivity investments. These one-time initiatives are designed to help drive sustainable growth, offset rising commodity costs and improve the efficiency of our global supply chain.” Charges for productivity initiatives include charges for workforce reductions, factory closures and other implementation costs taken in Fiscal 2012 to accelerate growth.Operating free cash flow is defined as cash from operations less capital expenditures net of proceeds from disposal of Property, Plant & Equipment. Also, constant currency as used in this press release is defined as the reported amount adjusted for translation (the effect of changes in average foreign exchange rates between the current period and the corresponding prior year) and the impact of current-year foreign currency translation hedges. Heinz reported its Fiscal 2012 first-quarter results on August 23, 2011. Commenting on those results at today's Annual Meeting in Pittsburgh, Mr. Johnson said: “We believe that our first-quarter results put Heinz on track to achieve our financial targets for the full year, despite the deteriorating U.S. economic environment and the challenge posed by escalating commodity costs and weak consumer confidence.” Mr. Johnson noted that Heinz in May increased its annualized common stock dividend for Fiscal 2012 by 12 cents to $1.92 per share. Commenting on the dividend, he said: “This increase of almost 7% reflects our strong performance and the Board's confidence in our plan to deliver sustainable growth. Heinz has now increased the dividend by almost 80% since Fiscal 2004 and returned more than $3.5 billion to shareholders through dividend payments during this period.” Mr. Johnson discussed two key acquisitions that Heinz completed in Fiscal 2011: Foodstar, the producer of Master® soy sauces and fermented bean curd in China; and Quero®, a Brazilian brand of tomato-based sauces, ketchup, condiments and vegetables, with annual sales of approximately $325 million. “Our recent acquisitions in Brazil and China are exceeding our expectations while providing exciting new platforms for future growth in a rapidly changing world,” Mr. Johnson told shareholders. “Quero is off to a strong start in Fiscal 2012 and we expect it to double our sales in Latin America this year as we invest behind the brand and expand to new categories and customers.” He added: “We expect Foodstar to boost our Company's total sales in China to around $350 million in Fiscal 2012 – but I see this as just the beginning.” Mr. Johnson also highlighted the global growth of ketchup: “Around the world, we see ketchup as one of the keys to growing our Core Portfolio. Our founder introduced Heinz Ketchup in 1876 right here in Pittsburgh and 135 years later, sales of our flagship product continue to grow.” He added: “Our ketchup franchise continues to benefit from innovations like Heinz Dip & Squeeze®, which we introduced last year after much anticipation. Sales of Dip & Squeeze to restaurants continue to expand but we are also very enthused about the retail launch of our new Dip & Squeeze ten-pack starting this month.” Mr. Johnson concluded his speech by thanking shareholders “for investing in Heinz, which is more focused than ever on strengthening our position as one of the best-performing companies in the packaged foods industry.” SAFE HARBOR PROVISIONS FOR FORWARD-LOOKING STATEMENTS: This press release and our other public pronouncements contain forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are generally identified by the words “will,” “expects,” “anticipates,” “believes,” “estimates” or similar expressions and include our expectations as to future revenue growth, earnings, capital expenditures and other spending, dividend policy, and planned credit rating, as well as anticipated reductions in spending. These forward-looking statements reflect management's view of future events and financial performance. These statements are subject to risks, uncertainties, assumptions and other important factors, many of which may be beyond Heinz's control, and could cause actual results to differ materially from those expressed or implied in these forward-looking statements. Factors that could cause actual results to differ from such statements include, but are not limited to: sales, volume, earnings, or cash flow growth, general economic, political, and industry conditions, including those that could impact consumer spending, competitive conditions, which affect, among other things, customer preferences and the pricing of products, production, and energy costs, competition from lower-priced private label brands, increases in the cost and restrictions on the availability of raw materials, including agricultural commodities and packaging materials, the ability to increase product prices in response, and the impact on profitability, the ability to identify and anticipate and respond through innovation to consumer trends, the need for product recalls, the ability to maintain favorable supplier and customer relationships, and the financial viability of those suppliers and customers, currency valuations and devaluations and interest rate fluctuations, changes in credit ratings, leverage, and economic conditions and the impact of these factors on our cost of borrowing and access to capital markets, our ability to effectuate our strategy, including our continued evaluation of potential opportunities, such as strategic acquisitions, joint ventures, divestitures, and other initiatives, our ability to identify, finance, and complete these transactions and other initiatives, and our ability to realize anticipated benefits from them, the ability to successfully complete cost reduction programs and increase productivity, the ability to effectively integrate acquired businesses, new products, packaging innovations, and product mix, the effectiveness of advertising, marketing, and promotional programs, supply chain efficiency, cash flow initiatives, risks inherent in litigation, including tax litigation, the ability to further penetrate and grow and the risk of doing business in international markets, particularly our emerging markets; economic or political instability in those markets, strikes, nationalization, and the performance of business in hyperinflationary environments, in each case such as Venezuela; and the uncertain global macroeconomic environment and sovereign debt issues, particularly in Europe, changes in estimates in critical accounting judgments and changes in laws and regulations, including tax laws, the success of tax planning strategies, the possibility of increased pension expense and contributions and other people-related costs, the potential adverse impact of natural disasters, such as flooding and crop failures, the ability to implement new information systems and potential disruptions due to failures in information technology systems, with regard to dividends, dividends must be declared by the Board of Directors and will be subject to certain legal requirements being met at the time of declaration, as well as our Board's view of our anticipated cash needs, and other factors described in “Risk Factors” and “Cautionary Statement Relevant to Forward-Looking Information” in the Company's Annual Report on Form 10-K for the fiscal year ended April 27, 2011 and reports on Forms 10-Q thereafter. The forward-looking statements are and will be based on management's then current views and assumptions regarding future events and speak only as of their dates. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by the securities laws. ABOUT HEINZ: H.J. Heinz Company, offering “Good Food Every Day”™ is one of the world's leading marketers and producers of healthy, convenient and affordable foods specializing in ketchup, sauces, meals, soups, snacks and infant nutrition. Heinz provides superior quality, taste and nutrition for all eating occasions whether in the home, restaurants, the office or “on-the-go.” Heinz is a global family of leading branded products, including Heinz® Ketchup, sauces, soups, beans, pasta and infant foods (representing over one third of Heinz's total sales), Ore-Ida® potato products, Weight Watchers® Smart Ones® entrees, T.G.I. Friday's® snacks, and Plasmon infant nutrition. Heinz is famous for its iconic brands on six continents, showcased by Heinz® Ketchup, The World's Favorite Ketchup®. H.J. Heinz CompanyMedia:Michael Mullen, 412-456-5751Michael.mullen@us.hjheinz.comorInvestors:Margaret Nollen, 412-456-1048