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Kraft Heinz reports Q3 2023 results and new structure
The company behind Heinz Ketchup, Philadelphia and Oscar Mayer has reported an increase of 1% in its net sales against the same period one year ago, now reaching $6.6bn. This includes a negative impact of foreign currency and divestitures – 0.5% and -0.2 percent, respectively.
Meanwhile Kraft Heinz's organic net sales rose 1.7 percent, while price increased 7.1% versus the prior year period. Increases were predominately a result of list price hikes made in an effort to mitigate higher input costs.
Net income/(loss) fell by 41.7% during the assessed period to $254m, which has been attributed to higher non-cash impairment losses and tax prices in the current year period. However, these were said to be somewhat offset by higher adjusted EBITDA and unrealised gains on commodity hedges.
Commenting on the results, Kraft Heinz CEO and chair of the board, Miguel Patricio, said: “Our third quarter results were marked by net sales growth across each of our three core pillars: Foodservice, Emerging Markets, and U.S. Retail Grow Platforms.
“At the same time, we continue to improve productivity across the value chain, reinvesting gross efficiencies back into marketing, technology, and research & development. These investments remain a key part of our strategy as we build the business for continued success.”
“We laid out a series of action plans in the beginning of the year to drive market share and volume improvement, and I’m pleased to say we saw improvement throughout the quarter as our team executed against these plans. We will remain focused on our overall strategy to drive top-line profitable growth.”
In the third quarter, Kraft Heinz states it ‘hit a milestone in its transformation’, reaching its target net leverage of approximately 3.0x.
“A stronger balance sheet, along with advancements we have made across the business, gives us further conviction behind our strategy,” added Patricio.
Leadership shuffle and new international strategy
The company has also seen a new president join its North American zone. Pedro Navio has been named EVP & president, North America, and will succeed Carlos Abrams-Rivera who will assume the position of Kraft Heinz CEO.
Furthermore, to help drive international growth, the company plans to divide its international business into three zones. Recognising these markets require different sets of strategies and skills, the new structure aims to provide more focus and resource to optimise growth potential.
In conjunction with these changes to the international zone, Rafael Oliveira, current president of international markets, will take on an advisory role to support the new structure transition, departing the company in March 2024.
“Rafael has been with Kraft Heinz since 2014 in several top leadership roles and has been a critical part of our transformation,” said Patricio. “We are forever grateful for the immeasurable business and culture impact that he has made on the company and its people.”
All changes will be effective at the beginning of fiscal year 2024.
