Kraft Heinz squeezes out savings to boost profit | Progresiv
Kraft Heinz has reported its fourth quarter and full year 2016 financial results that show how its cost-savings have lead to significant gains with more savings expected by the year-end. 
Following its merger in 2015, Kraft Heinz has been cutting back on expenses and on Wednesday it announced that it now expects to achieve 1.7 billion dollars in savings. General and administrative expenses fell back 21.3%, while during the fourth quarter the cost of products sold declined 6.8%.
The Company now expects its multi-year Integration Program to deliver 1.7 billion dollars in cumulative, pre-tax savings by the end of 2017, up from 1.5 billion dollars previously. The program is now forecast to result in 2.0 billion dollars of pre-tax costs, up from 1.9 billion dollars previously, and 1.3 billion dollars of capital expenditures, up from 1.1 billion dollars previously.
“We finished 2016 consistent with our expectations and with good momentum heading into 2017,” said Kraft Heinz CEO Bernardo Hees. “Looking forward, our objectives and opportunities are clear. But we need to sharpen our focus on profitable sales, and further improve our capabilities and execution to deliver another year of strong, sustainable growth in 2017.”
Net sales were 6.9 billion dollars, down 3.7 percent versus net sales for the year-ago period, including a negative 4.6 percentage point impact from a 53rd week of shipments in 2015 and an unfavorable 0.7 percentage point impact from currency.
Organic Net Sales increased 1.6 percent versus the year-ago period. Pricing decreased 0.1 percentage points as price increases to offset input cost inflation in Rest of World markets, primarily in Latin America, as well as gains in the United States were more than offset by the timing of promotional activities versus the prior year in Canada.
The company’s largest market is the US which posted a 3.1% retreat, while Europe fell 13.3% and Canada went down 2.4%, and the rest of the world declined 0.7%.
Overall, sales declined 3.7% to 6.86 billion dollars from 7.12 billion dollars. (www.foodingredientsfirst.com)
