US – The Kraft Heinz Company has reported fourth quarter and full year 2017 financial results, citing Q4 net sales increase of 0.3% and 0.6% decrease in its organic net sales.
The company also recorded a Q4 net income attributable to common shareholders increasing to US$8.0 billion, while Adjusted EBITDA increased 3.2% on a constant currency basis
The Q4 diluted EPS increased to US$6.52; while Adjusted EPS decreased to US$0.90 from US$0.91 the prior year.
“There’s no question that our financial performance in 2017 did not reflect our progress or potential,” said Kraft Heinz CEO Bernardo Hees.
“We made significant improvements in many of our businesses, and were able to accelerate some important business investments at the end of the year.
This, together with benefits from the U.S. Tax Cuts and Jobs Act and additional investments in our capabilities, should help further advantage our brands and grow our business in 2018 and beyond.”
“Since the HR-1 Tax Cuts and Jobs Act was signed into law, we have already taken actions and are accelerating key business initiatives,” said Kraft Heinz CFO David Knopf.
“This includes approximately US$300 million in strategic investments to build our capabilities, our people skills and our brands; more than US$800 million in capital expenditures to improve quality, safety and capacity; as well as US$1.3 billion to pre-fund our post-retirement benefit plans.”
Net sales were US$6.9 billion, up 0.3% versus the year-ago period, including a 0.9 percentage point benefit from currency.
Organic Net Sales decreased 0.6% versus the year-ago period, while the pricing increased 1.0 percentage points, driven by price increases in Rest of World markets and the United States.
Volume/mix decreased 1.6 percentage points, primarily due to lower shipments across several categories, particularly nuts, natural cheese and cold cuts in the United States as well as cheese and coffee in Canada.
This was partially offset by on-going growth in macaroni and cheese in the United States as well as strong growth from condiments and sauces in Europe, China and Indonesia.
Net income attributable to common shareholders increased to US$8.0 billion and diluted EPS increased to US$6.52, primarily reflecting benefits from U.S. Tax Reform.
Adjusted EBITDA increased 4.0% versus the year-ago period to US$2.0 billion, including a favorable 0.8 percentage point impact from currency.
Excluding the impact of currency, Adjusted EBITDA increased primarily due to gains from cost savings initiatives, lower overhead costs and favorable pricing, which was partially offset by higher input costs and lower volume/mix.
Adjusted EPS decreased 1.1% to US$0.90, mainly reflecting growth in Adjusted EBITDA that was more than offset by a higher effective tax rate versus the prior year period.