PITTSBURGH & CHICAGO--(BUSINESS WIRE)--The Kraft Heinz Company today reported first quarter 2016 financial results that reflected improved net sales performance and significant cost savings amid the ongoing integration of Kraft and Heinz.
“We've had a solid start to the year. Our savings are coming in faster than anticipated and we're performing better where it matters most, with our customers and consumers in the marketplace,” said Kraft Heinz CEO Bernardo Hees. “But we still have a lot of work ahead. Consumption trends in a number of our core categories remain challenging and we're entering a critical phase in our North American supply chain integration. As we implement our plans, we will keep our focus on profitable growth while continuing to put our consumers first.”
Q1 2016 Financial Summary
Net sales were $6.6 billion, down 3.8 percent versus pro forma net sales for the year-ago period, due to a negative 4.5 percentage point impact from currency and a negative 0.4 percentage point impact from divestitures. Organic Net Sales increased 1.1 percent versus the year-ago period. Pricing increased 0.3 percentage points despite deflation in key commodities in the United States and Canada(3), primarily dairy and coffee. Volume/mix increased 0.8 percentage points due to strong growth in condiments and sauces globally, Lunchables and P3, and United States foodservice that was partially offset by lower shipments of ready-to-drink beverages in the United States.
Adjusted EBITDA increased 21.3 percent versus the year-ago period to $2.0 billion, despite a negative 6.0 percentage point impact from currency, primarily due to gains from cost savings initiatives(4) and favorable pricing net of commodity costs. Adjusted EPS increased 37.7 percent versus the year-ago period to $0.73, primarily reflecting the growth in Adjusted EBITDA.
Q1 2016 Business Segment Highlights
United States
United States net sales were $4.7 billion, up 0.2 percent versus pro forma net sales for the year-ago period. Pricing increased 0.1 percentage points despite deflation in key commodities, primarily dairy and coffee. Volume/mix increased 0.1 percentage points, primarily reflecting gains from innovation in Lunchables and P3, whitespace expansion in foodservice and gains in coffee that were offset by lower shipments of ready-to-drink beverages, bacon and frozen nutritional meals.
United States Segment Adjusted EBITDA increased 32.9 percent versus the year-ago period to $1.5 billion, driven by gains from cost savings initiatives and favorable pricing net of commodity costs that were partially offset by volume declines in ready-to-drink beverages and frozen nutritional meals. Full report.
