Heinz Cs Shanghai Finalpdf

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September 22, 2009September 22, 2009

Accelerating Growth inAccelerating Growth inEmerging MarketsEmerging Markets

Credit Suisse 2Credit Suisse 2ndnd

Annual Emerging MarketsAnnual Emerging Markets

Consumer ConferenceConsumer Conference

Shanghai, ChinaShanghai, China



Margaret NollenMargaret Nollen

Vice President Investor RelationsH. J. Heinz Company

Vice President Investor RelationsH. J. Heinz Company





H.J. Heinz CompanyH.J. Heinz Company

– World-Class Iconic Brands

– Organic Growth(1)

in Core Business – Strong International Portfolio

– Profitable Emerging Markets Growth – Excellent Cash Flow Results and

Return to Shareholders – Experienced and Proven Global

Leadership Team


– Organic Growth(1)

in Core Business – Strong International Portfolio



Leadership Team

(1) Volume plus price



H.J. Heinz TransformationH.J. Heinz Transformation

– Shed non-core businesses and added to corecategories, geographies and brands

– Shed non-core businesses and added to corecategories, geographies and brands

– Enhancing process discipline

– Leveraging global scale

– Enhancing process discipline

– Leveraging global scale

– Enhanced trade spend management

– Implementing global SAP

– Enhanced trade spend management

– Implementing global SAP

PortfolioPortfolio

PeoplePeople

ProcessProcess

SystemsSystems

– Upgraded Talent

– Outwardly focused and internally collaborative

– Incenting the right performance

– Upgraded Talent

– Outwardly focused and internally collaborative

– Incenting the right performance



Targeted Portfolio ChangesTargeted Portfolio Changes

Acquisitions and Divestitures (Revenue $ Billion)Acquisitions and Divestitures (Revenue $ Billion)

2002 2003 2004 2005 2006 2007 2008 2009 Total

ClassicoClassicoDelimexDelimex

TGIFTGIF

U.S. SeafoodU.S. SeafoodU.S. Pet FoodU.S. Pet Food

HP/L&PHP/L&P

PetrosoyuzPetrosoyuz

Euro SeafoodEuro Seafood

TegelTegel

ChickenChicken

HAK VegetablesHAK Vegetables

$1.8B$1.8B

($3.2B)($3.2B)

$0.0$0.0

($3.5)($3.5)

$2.0$2.0

Golden CircleGolden Circle

FYFY



Developed Markets

– United States – United Kingdom

– Western Europe

– Italy – Australia/

New Zealand

– Canada

Developed Markets

– United States – United Kingdom

– Western Europe

– Italy – Australia/

New Zealand

– Canada

Emerging Markets

– Indonesia – Latin America

– India

– China – Russia

– Poland

– South Africa

Emerging Markets

– Indonesia – Latin America

– India

– China – Russia

– Poland

– South Africa

Categories

– Ketchup & Sauces – Meals & Snacks

– Infant/Nutrition

Categories

– Ketchup & Sauces – Meals & Snacks

– Infant/Nutrition

GeographiesGeographies

Focused PortfolioFocused Portfolio

96% of Sales96% of Sales 86% of Sales86% of Sales 14% of Sales14% of Sales

60% of Sales are International60% of Sales are InternationalBased on FY09 Full Year SalesBased on FY09 Full Year Sales



Well-Positioned inThree Core Categories

Well-Positioned inThree Core Categories

Ketchup and SaucesKetchup and Sauces Infant / NutritionInfant / NutritionMeals and SnacksMeals and Snacks

6% CAGR(1 )

42% o f Sales

(2 )6% CAGR(1 )

42% o f Sales

(2 )

9% CAGR(1)

11% o f Sales

(2)9% CAGR(1)

11% o f Sales

(2)

(1) 3-Year CAGR Based on FY09 Full Year Sales

(2) Based on FY09 Full Year Sales

Note: All financial information presented in these slides are from continuing operations, excluding special items, unless otherwise stated.

4% CAGR(1)

43% o f Sales

(2)4% CAGR(1)

43% o f Sales

(2)



Portfolio of Leading BrandsPortfolio of Leading Brands

~70% of Sales From Top 15 Brands~70% of Sales From Top 15 Brands



Health & WellnessHealth & Wellness

Infants andToddlers

ChildrenChildren’’ss

NutritionNutritionWeightWeight

ManagementManagementHealthHealth

ManagementManagement

Enables/ promotesreduction,

maintenance ofweight loss

Promotes generalhealth & wellness,

lifestyle preferences

Science InfluencedFood & Beverages

LifestyleLifestyle



Four Strategic PillarsFour Strategic Pillars

Grow theCore

Portfolio

Grow theCore

Portfolio

– Grow through health& wellness, taste,and convenience

– Leverage the science

of innovation – Continue to invest in

the business

– Execute strategicM&A




the business


MakeTalent an

Advantage

MakeTalent an

Advantage

– Right leadership

– Strengthen bench

– Excel at recruitment/ development

– Right incentives

– Optimize talentplacement






– Invest for double-digitsales & profit growth

– Leverageinfrastructure/Expanddistribution

– Win with globalcustomers/moderntrade

– Grow through health& wellness, taste,

and convenience – Leverage the science

of innovation







of innovation


AccelerateGrowth in

Emerging Markets

AccelerateGrowth in

Emerging Markets

Strengthenand LeverageGlobal Scale


– Innovation transfer

– Global procurement

– Global customers

– Global process design

– Wall-to-Wall SAP

– Productivity




– Global process design – Wall-to-Wall SAP

– Productivity



10,14810,071

9,002

8,643

FY06 FY07 FY08 FY09

2.10

2.38

2.63

2.90

FY06 FY07 FY08 FY09

880

895

878864

945

FY06 FY07 FY08 FY09

14.8%15.8%

16.8%

18.4%

FY06 FY07 FY08 FY09

Reported Results - FY06 to FY09Reported Results - FY06 to FY09

SalesSales --

$MM$MM EPSEPS

Operating Free Cash FlowOperating Free Cash Flow(2)(2)

--

$MM$MM After After --Tax ROICTax ROIC

Average OrganicGrowth 5.1%(4)

Average OrganicGrowth 5.1%(4)

CAGR+11.4%CAGR+11.4%

4 Year Average109% of Net Income(1)

4 Year Average109% of Net Income(1)

(3)

(1)(1)

+360BPS

+360BPS

(1) FY06 amounts are continuing operations, excluding special items

(2) Operating Free Cash Flow is cash from operations less capital expenditures net of proceeds from disposal of PP&E

(3) Excludes discretionary pension funding of $65 million

(4) Volume plus Price



Q1 FY10 ResultsQ1 FY10 Results

SalesSales Operating IncomeOperating Income EPSEPS

(1) Excludes currency translation impact of $233 million.(2) Excludes currency translation impact of $35 million and UK transaction impact of $13 million.(3) Excludes currency translation impact of $26 million, UK transaction impact of $10 million and the impact from currency translation hedges.(4) Cash from operations less capital expenditures net of proceeds from disposal of PP&E.

Versus Q1 FY09Versus Q1 FY09

Increased Operating Free Cash Flow(4) by $176 MillionIncreased Operating Free Cash Flow(4) by $176 Million

ReportedReported ConstantCurrency(1)

ConstantCurrency(1)


ConstantCurrency(2)


ConstantCurrency(3)

(4.5%)(4.5%)(6.7%)(6.7%) (6.9%)(6.9%)

4.5%4.5% 5.6%5.6%

9.7%9.7%

EPS of

$0.67

EPS of

$0.67



1.7%

5.2%

1.6%

-1.7%

8.1%

5.3%

3.7%4.2%

6.0%

7.3%

2.8%

0.8%

2.5%

8.6%

5.7%

10.2%

5.8%5.3%

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q

Flat (2)

(2)

17 Consecutive Quarters of Organic Sales Growth(1)17 Consecutive Quarters of Organic Sales Growth(1)


(2) Adjusted for approximate impact of 7% for the extra week in Q4 FY06 and one less week in Q4 FY07

(3) Not restated for discontinued operations

FY06 FY07 FY08 FY09

(3) (3)

FY10



Emerging Markets – A Key Strategic Pillar

Emerging Markets – A Key Strategic Pillar

Grow theCore

Portfolio

Grow theCore

Portfolio




the business





the business


MakeTalent an

Advantage

MakeTalent an

Advantage
















of innovation







of innovation


AccelerateGrowth in

Emerging Markets

AccelerateGrowth in

Emerging Markets






– Global process design

– Wall-to-Wall SAP

– Productivity




– Global process design – Wall-to-Wall SAP

– Productivity



GDP in Emerging MarketsRemains Strong

GDP in Emerging MarketsRemains Strong

Source: IMF, April dataset and July 8, 2009 updateSource: IMF, April dataset and July 8, 2009 update

Heinz Emerging Markets GDP GrowthHeinz Emerging Markets GDP GrowthGDP GrowthGDP Growth

6.5%

3.5%

1.5% 1.3%

8.5%

China India Indonesia Russia Poland

4.7%

0.6%

(3.8%)

1.5%

2009E GDP Growth2009E GDP Growth 2010E GDP Growth2010E GDP Growth

Avg.Developed

Avg.Emerging



Emerging Markets ApproachEmerging Markets Approach

“ Buy, Build and Grow” Strategy“ Buy, Build and Grow” Strategy

– Self-sustaining investmentAcquisitions to extend product line

– Self-sustaining investmentAcquisitions to extend product line

– Accelerate investment in marketing,fixed costs, and distribution

– Active acquisition approach

– Accelerate investment in marketing,fixed costs, and distribution

– Active acquisition approach

– Leverage existing Heinz resources

– Opportunistic acquisition approach

– Leverage existing Heinz resources

– Opportunistic acquisition approach

– Opportunistic acquisition approach – Opportunistic acquisition approachWhite SpaceWhite Space

NationalNational

CityCity

RegionalRegional



Growth in Emerging MarketsGrowth in Emerging Markets

% of Total Sales% of Total Sales

Targeting ~20% of Total Sales by 2013Targeting ~20% of Total Sales by 2013

FY05 FY06 FY07 FY08 FY09 Q1FY10

13%13%

14%14%

12%12%

11%11%

Full Year PerformanceFull Year Performance

16%16%

9%9%



Chris WarmothChris Warmoth

Executive Vice President, Heinz Asia / Pacific

H. J. Heinz Company

Executive Vice President, Heinz Asia / Pacific

H. J. Heinz Company



Emerging Markets By Category and Penetration

Emerging Markets By Category and Penetration

Infant /Infant /NutritionNutrition

Other Other

MealsMeals& Snacks& Snacks

KetchupKetchup& Sauces& Sauces

Top 6 MarketsTop 6 Markets

(each $100MM+)(each $100MM+)

Other Other

FY09 Net Sales

By Category

FY09 Net Sales

By Category

FY09 Net SalesFY09 Net Sales

~$1.4 Billion in FY09 Net Sales~$1.4 Billion in FY09 Net Sales



21

CategoriesCategories MarketsMarkets

Ketchup & Sauces,Ketchup & Sauces, Latin America, Russia,Latin America, Russia,

Infant Nutrition, MealsInfant Nutrition, Meals China, Middle EastChina, Middle EastKetchup & Sauces,Ketchup & Sauces, IndonesiaIndonesiaMeals, BeveragesMeals, Beverages

K&S, MealsK&S, Meals PolandPoland

ChildrenChildren’’s nutritions nutrition IndiaIndia

NutritionNutrition IndiaIndiaMeals, K&SMeals, K&S ChinaChina

Six Key BrandsSix Key Brands

~75% of Total Emerging Markets Sales~75% of Total Emerging Markets Sales

BrandsBrands

FY09 Net Sales



22

Strong Brand EquitiesStrong Brand Equities

Source: Millward Brown Brand Dynamics Study – 2007 and 2008.

HighHighLowLowLowLow

HighHigh

Presence % Relative to Category AveragePresence % Relative to Category Average

V o l t a

g e

V o l t a

g e ™ ™

Growing

Equity

Strong

Equity

Little

Equity

Declining

Equity

Russia - Baby Food

Russia - Ketchup

China - Baby Food

Poland Russia China India Indonesia

High Consumer Recognition and FamiliarityHigh Consumer Recognition and Familiarity



23

Success in Growing AcquisitionsSuccess in Growing Acquisitions

AdvantagedAdvantaged

local brandslocal brands

We acquire over timeWe acquire over timewhen the right targetwhen the right target

is availableis available Sept. 1994 through May 2005Sept. 1994 through May 2005

Sales Have Multiplied Up to Five Times Since AcquisitionSales Have Multiplied Up to Five Times Since AcquisitionFY09 Net Sales



24

Local Market ExecutionWith Global Support

Local Market ExecutionWith Global Support

Global Processes/Functional Expertise

Global Processes/

Functional Expertise Local ConsumersLocal ConsumersLocal

OrganizationsLocal

Organizations

DEVELOPED MARKETSDEVELOPED MARKETS

EMERGING MARKETSEMERGING MARKETS



25

Support Strong Brands

• Great consumer understanding,converted into

• Innovation, Advertising,Packaging, Sampling andPromotion

Support Strong Brands

• Great consumer understanding,converted into

• Innovation, Advertising,Packaging, Sampling andPromotion

Strategies for Winningwith Local Consumers

Strategies for Winningwith Local Consumers

Winning In-Store

• Broad distribution

• Right distributors• Key account management

• Use Foodservice channelto generate trial

Winning In-Store

• Broad distribution

• Right distributors• Key account management

• Use Foodservice channelto generate trial

Offer Attainable Pricing

• Precise positioning to

desired consumer class • Keep costs under control

• Quality products

Offer Attainable Pricing

• Precise positioning to

desired consumer class• Keep costs under control

• Quality products



26

Driving DistributionMarket by MarketDriving DistributionMarket by Market

100% handled by

distributors

100% handled by

distributors

Distribution MethodsDistribution Methods

100% own

distribution

100% own

distribution

Method is adjusted based on marketMethod is adjusted based on market

TypeType

ExamplesExamples

Distributors and

own distribution

Distributors and

own distribution

IndiaIndia RussiaRussia Java inIndonesiaJava inIndonesia



27

Emerging Markets PortfolioEmerging Markets Portfolio

PolandPolandPoland

ChinaChinaChina

RussiaRussiaRussia

IndonesiaIndonesiaIndonesiaIndiaIndiaIndia

Latin AmericaLatin AmericaLatin America



28

After ShoppingAfter ShoppingAfter Shopping

• New ideas

• Innovation

process • Effectivemessaging

• Word of Mouth

• New ideas

• Innovation

process

• Effectivemessaging

• Word of Mouth

• Available

• Visible

• Clear graphics

• Promotion/Display

• Price

• Available

• Visible

• Clear graphics

• Promotion/Display

• Price

• Meets/beatsexpectations

• Easy to use

• Clear instructions

• Stores well

• Meets/beatsexpectations

• Easy to use

• Clear instructions

• Stores well

Winning With Local ConsumersWinning With Local Consumers

While ShoppingWhile ShoppingWhile ShoppingBeforeShopping

BeforeBeforeShoppingShopping



29

ABC Ne

aring

$250 Mi l lion

in SalesABC

Nearing

$250 Mi l lion

in Sales

Indonesia

Most Developed Emerging Market for HeinzMost Developed Emerging Market for HeinzFY09 Net Sales



30

Soy Oyster Sauce Shrimp

Paste

Chili SauceSardines

ABC Master Brand Emphasis



31

ABC Ready to Drink BeveragesABC Ready to Drink Beverages



32

ABC SyrupsABC Syrups

SQUASH DELIGHT

• Improved taste

• Sell value relative to soft drinks

SQUASH DELIGHT

• Improved taste

• Sell value relative to soft drinks

SPECIAL GRADE

• Thicker than competition

• New flavors

SPECIAL GRADE

• Thicker than competition

• New flavors

Ramadan In-store ActivityRamadan In-store Activity



33

Latin AmericaLatin America

O ver

$300 Mi l l ion

in Sales

O ver

$300 Mi l l ion

in Sales

FY09 Net Sales



34

Mexico – Baby FoodMexico – Baby Food

• June-Sept: introduced 100% fruit andvegetable products

• New factory in Guadalajara

• Endorsed by Mexican Associationof Pediatrics

• June-Sept: introduced 100% fruit andvegetable products

• New factory in Guadalajara

• Endorsed by Mexican Associationof Pediatrics



35

Mexico – KetchupMexico – Ketchup

• 11.6% share in Ketchup – growing fast

• Introduced Chamula hot sauce

• 11.6% share in Ketchup – growing fast

• Introduced Chamula hot sauce

Source: Nielsen 12-week value share as of May 2009



36

IndiaIndia

O ver$15

0 Mi l l ion

in Sales

O ver$15

0 Mi l l ion

in Sales

FY09 Net Sales

C l i I diC l i I di



37BusFY05BusFY05

PTFY06PT

FY06GymFY07GymFY07

H. TomFY08

H. TomFY08

Saffron AlmondFY08

Saffron AlmondFY08

0

1000

2000

3000

4000

FY03 FY04 FY05 FY06 FY07 FY08 FY09

New Campaign StartsNew Campaign Starts

Business FlatBusiness Flat

~ 3 X i n 5

y e a r s

~ 3 X i n 5

y e a r s

1. Winning Complan Advertising Over the Years1. Winning Complan Advertising Over the Years

Complan in India:Sales Tripled in 5 Years

Complan in India:Sales Tripled in 5 Years

Complan

Net Sales (Local Currency)Complan

Net Sales (Local Currency)



38

Complan Re-LaunchesComplan Re-Launches

2.2.

Kesar Kesar

BadamBadam

(Saffron and Almond)(Saffron and Almond)

3.3. ReRe--launch behind clinicallylaunch behind clinically-- proven growth claimproven growth claim



39

Glucon D: IndiaGlucon D: India

Brand Line-upBrand Line-upBrand IdeaBrand Idea

Glucon-D Puts Back theEnergy Which the Sun and

‘Life’ Sucks Out of You

Glucon-D Puts Back theEnergy Which the Sun and

‘Life’ Sucks Out of You

VotedIndia’s mosttrusted coldbeverage in

EconomicTimes poll

Regular Regular OrangeOrange Lime-LemonLime-Lemon



40

RussiaRussia

Approac h i

ng

$200 M i l l i

on

in Sa lesAppro

ac h ing

$200 M i l l io

n

in Sa les

FY09 Net Sales

Wide Variety ofWid V i t f



41

Wide Variety of Russian Baby Foods

Wide Variety of Russian Baby Foods



42

16.2%

23.7%

2007 2009

Heinz Value Share Growth in RussiaHeinz Value Share Growth in Russia

Ketchup & SaucesKetchup & SaucesKetchup & Sauces

2.6%

28.4%

2007 2009

Infant Feeding -

BiscuitsInfant FeedingInfant Feeding --

BiscuitsBiscuits

17.5%

25.2%

2007 2009

Infant Feeding -

CerealsInfant FeedingInfant Feeding --

CerealsCereals

Source: A C Nielsen, Value Share for eight weeks ended May for Ketchup & Sauces, June for Infant FeedingSource: A C Nielsen, Value Share for eight weeks ended May for Ketchup & Sauces, June for Infant Feeding

Ketchup

and Sauces

#1 in Russia

Ketchup

and Sauces

#1 in Russ ia



43

Increasing Distribution in RussiaIncreasing Distribution in Russia

Source of population data: Russia State Statistics Bureau and management estimates

FY08 CoverageFY08 Coverage FY10 Planned CoverageFY10 Planned Coverage

PopulationPopulationReachedReached 25MM25MM 100MM+100MM+

Heinz Coverage



44

PolandPolandO ver

$150 Mi l lion

in Sales

O ver

$150 Mi l l ion

in Sales

FY09 Net SalesFY09 Net Sales



45

Pudliszki – a ‘Master’ BrandPudliszki – a ‘Master’ Brand

Polish Style Ready Meals

Canned LocalVegetables

Ketchups and Sauces

PastaSauces

TomatoPaste



46

StuffedCabbageStuffed

Cabbage

Insight: No time to cook the traditional dishesmy family like best and I’m skepticalabout the taste and quality of jars

Kitchen

Secrets

Concept:

Recipes from consumers for a

home-made taste

Insight: No time to cook the traditional dishesmy family like best and I’m skepticalabout the taste and quality of jars

Kitchen

Secrets

Concept:

Recipes from consumers for a

home-made taste

Polish Ready MealsPolish Ready Meals

Beef TripeBeef Tripe Sauerkraut andSausage

Sauerkraut andSausage

MeatballsMeatballs Beans inTomato Sauce

Beans inTomato Sauce

Beef GoulashBeef Goulash

z



47

ChinaChina

Long FongLong Fong

Baby

Food

Baby

Food~$150 M

i l l ion

in Sales~$150 M

i l l ion

in Sales

FY09 Net Sales

Long FongLong Fong



48

Long Fong Broad Range of Products

Long Fong Broad Range of Products

DumplingsDumplings

Hot PotsHot PotsSteam BreadSteam Bread

Rice BallsRice Balls

Dim SumDim Sum

Long FongLong Fong



49

Long Fong Product Price Tiering

Long Fong Product Price Tiering

DumplingDumpling

Rice BallRice Ball

Dim SumDim Sum

PremiumPremium MediumMedium MassMass

Hot PotHot Pot

SteamedBread

SteamedBread



50

Long Fong DistributionLong Fong Distribution

– Selling Directly and Through Distributors

– Methods of Distribution:

– Retail Direct – Retail Distributors

– Foodservice

– Export

– Direct Selling in Areas Where Heinz

Has Presence – Selling Through Distributors in

Smaller Cities

– Selling Directly and Through Distributors

– Methods of Distribution:

– Retail Direct – Retail Distributors

– Foodservice

– Export

– Direct Selling in Areas Where Heinz

Has Presence – Selling Through Distributors in

Smaller Cities

Reshaping Distribution System and Streamlining Product OfferingsReshaping Distribution System and Streamlining Product Offerings

China Infant FeedingChina Infant Feeding



51

PremiumPremium

China Infant FeedingUpgrade Base and Add Premium ItemsChina Infant FeedingUpgrade Base and Add Premium Items

“ Intelligence Many Many”“ Intelligence Many Many”ChewableChewable

New Premium SegmentNew Premium Segment

Base Re-LaunchBase Re-Launch

New Product,New Graphics,New Package

New Product,New Graphics,New Package

New!

Reposition as“Scientifically Formulated”

Reposition as“Scientifically Formulated”

Baby Food and SupplementsBaby Food and Supplements



52

Baby Food and SupplementsInnovation, Brand Strength Drive GrowthBaby Food and SupplementsInnovation, Brand Strength Drive Growth

ColostrumColostrum MilkmateMilkmateSupplements

1g nutrientsachet

Egg, Carrot and SpinachEgg, Carrot and Spinach

Baby Nutritional NoodlesBaby Nutritional Noodles

Using the Heinz Brand to Enter New CategoriesUsing the Heinz Brand to Enter New Categories

60 x 1gsachets

Taps Into Local AdultFood Habit

Taps Into Local Adult

Food Habit

3 Active

ImmuneProteins

3 Active

ImmuneProteins

Pre-biotic with3 Chinese

NaturalIngredients

For “Heatiness”

Pre-biotic with3 Chinese

NaturalIngredients

For “Heatiness”

Baby Food and SupplementsBaby Food and Supplements



53

Baby Food and Supplements Continuing Innovation

Baby Food and Supplements Continuing Innovation

Golden SleepFruit CrushNoodles

Teething RusksPremium VersionUpgradesUpgrades

Line ExtensionsLine Extensions New ProductsNew Products

Re-LaunchRe-LaunchFromHeinzItaly

FromHeinzItaly

Baby FoodBaby Food



54

Baby FoodDistributors Enable Market Penetration

Baby FoodDistributors Enable Market Penetration

22 FactoriesFactories

3030 Sales Offices / BranchesSales Offices / Branches

Factory

Sales office/branch

Covered city

FactoryFactory

Sales office/branchSales office/branch

Covered cityCovered city

• Strong Presence in Key and A/B Cities• Strengthening Distribution & Visibility in C/D Cities

Chinese Consumers:Chinese Consumers:



55

Chinese Consumers: Spending in the Downturn

Chinese Consumers: Spending in the Downturn

20%

30%

30%

30%

36%

36%

25%

36%

28%

45%

41%

25%

1H2009 2H2008

Look for better deals on loans, insurance, etc.

Cut down on out-of-home entertainment

Cut down on holidays / short breaks

Delay replacement of major household items

Spend less on new clothes

Switch to cheaper grocery brands

Look for better deals on loans, insurance, etc.

Cut down on out-of-home entertainment

Cut down on holidays / short breaks

Delay replacement of major household items

Spend less on new clothes

Switch to cheaper grocery brands

Stil l Saving; Cutting Back on Durable Goods and IntangiblesStil l Saving; Cutting Back on Durable Goods and Intangibles

Global Average

41%

Global Average

41%

Source: A.C. Nielsen, “What Makes Chinese Consumers Quietly Confident”, June 2009Source: A.C. Nielsen, “What Makes Chinese Consumers Quietly Confident”, June 2009

Chinese Consumer ConfidenceChinese Consumer Confidence



56

Chinese Consumer ConfidenceRelatively StableChinese Consumer ConfidenceRelatively Stable

105 106

98 95 96

89

95

50

60

70

80

90

100

110

2nd Half

'06

1st Half '07 2nd Half

'07

1st Half '08 2nd Half

'08

1st Qtr '09 2nd Qtr '09

% Change

▲1%

▼8%

▼3%

▲1% ▼7% ▲7%% Change

▲1%

▼8%

▼3%

▲1% ▼7% ▲7%

Chinese Consumer More Confident Than Other Countries

Source: A.C. Nielsen, “Where Are China’s Most Confident Consumers and Are They Ready to Spend?”, September 2009Source: A.C. Nielsen, “Where Are China’s Most Confident Consumers and Are They Ready to Spend?”, September 2009

GlobalGlobal

ChinaChina

Chi C T CChi C T C



57

Chinese Consumer Top ConcernsChinese Consumer Top Concerns

6%

14%

25%

29%

9%

14%

14%

17%

14%

8%BiggestConcern

2nd BiggestConcern

Job Security

The Economy

Work/Life Balance

Health

Increasing Food Prices

Job Security

The Economy

Work/Life Balance

Health

Increasing Food Prices

Job Security Largest Concern, Followed By the EconomyJob Security Largest Concern, Followed By the EconomySource: A.C. Nielsen, “What Makes Chinese Consumers Quietly Confident”, June 2009Source: A.C. Nielsen, “What Makes Chinese Consumers Quietly Confident”, June 2009

Heinz Core Emerging MarketsHeinz Core Emerging Markets



58Source: Euromonitor, World Fact Book, IMF

Heinz Core Emerging MarketsPoised for Growth

Heinz Core Emerging MarketsPoised for Growth

PopulationPopulation(millions)(millions)

GDP GrowthGDP Growth(07(07--11)11)

Packaged FoodPackaged FoodSpend ($/capita)Spend ($/capita)

Packaged Food SpendPackaged Food SpendGrowthGrowth(07(07--11)11)

RussiaRussia 140140 0.9%0.9% 424424 14.1%14.1%

IndiaIndia 1,1661,166 6.5%6.5% 1515 14.2%14.2%

ChinaChina 1,3391,339 8.8%8.8% 8484 8.3%8.3%

IndonesiaIndonesia 240240 4.1%4.1% 6565 11.9%11.9%

PolandPoland 3838 2.3%2.3% 565565 4.2%4.2%

Latin America*Latin America* 138138 0.4%0.4% 523523 11.7%11.7%

Total EmergingTotal Emerging 3,0613,061 4.8%4.8% 9898 10.2%10.2%

WorldWorld 6,7906,790 2.8%2.8% 272272 4.0%4.0%

*Venezuela and Mexico*Venezuela and Mexico

Emerging MarketsEmerging Markets



59

Emerging MarketsCategory Development

Emerging MarketsCategory Development

INDIAINDIA

RUSSIARUSSIA

CHINACHINA

INDONESIAINDONESIA

S th Af i M k t L dS th Af i M k t L d



60

South Africa – Market Leader South Africa – Market Leader

Puff Pastry and Pastry SnacksPuff Pastry and Pastry SnacksPuff Pastry and Pastry Snacks

PiesPiesPies

Canned SoupsCanned SoupsCanned Soups

SaucesSaucesSauces

Emerging MarketsEmerging Markets



61

Emerging Markets Key Take-Aways

Emerging Markets Key Take-Aways

1. At t r act iv e Por t f olio– Cat egor ies, count r ies, br ands

2. Clear St r at egy – Local mar k et execut ion

1. At t r act iv e Por t f olio– Cat egor ies, count r ies, br ands

2. Clear St r at egy – Local mar k et execut ion

3. Pro ven Capa bili t y to E xecu te

– Three winning momen ts

4. Real Momen tum and

Man y Addi tional

Oppor tuni ties

– Targe ting ~20 % o f To tal Sale

s in 2013

– Oppor tuni ties in core, ne w

ca tegories,

ne w mar ke ts

3. Pro ven Capa bili t y to E xecu te

– Three winning momen ts

4. Real Momen tum and Ma

n y Addi tional

Oppor tuni ties – Targe ting ~

20 % o f To tal Sales in 2013

– Oppor tuni ties in core, ne w

ca tegories,

ne w mar ke ts

H J H i CH J H i C



62

H.J. Heinz CompanyH.J. Heinz Company


– Organic Growth(1) in Core Business

– Strong International Portfolio



Leadership Team


– Organic Growth(1) in Core Business

– Strong International Portfolio



Leadership Team




63

Non GAAP Performance RatiosN GAAP P f R ti



64

Non-GAAP Performance RatiosNon-GAAP Performance Ratios

H. J. Heinz Company and SubsidiariesNon-GAAP Performance Ratios

The Company reports its financial results in accordance with accounting principles generally

accepted in the United States of America (“GAAP”). However, management believes that certainnon-GAAP performance measures and ratios, used in managing the business, may provide usersof this financial information with additional meaningful comparisons between current results andresults in prior periods. Non-GAAP financial measures should be viewed in addition to, and notas an alternative for, the Company’s reported results prepared in accordance with GAAP. Thefollowing table provides the calculation of the non-GAAP performance rations discussed in this

presentation.




65

o G e o a ce at os (continued)

Non GAAP Performance Ratios (continued)

(amounts in thousands)Reported Currency UK Currency Translation Constant Currency

Results Translation Transaction Hedges Results (1)

Net Sales $2,467,923 ($232,677) NA NA $2,700,600Gross Profit $874,147 ($79,479) ($13,335) NA $966,961Gross Profit Margin 35.4% 0.1% (0.5%) NA 35.8%Marketing $94,112 ($9,216) NA NA $103,328

SG&A $414,066 ($35,307) NA NA $449,373Operating Income $365,969 ($34,955) ($13,335) NA $414,259Net Interest/Other Expenses ($59,746) $1,498 NA ($4,579) ($56,665)NPBT $306,224 ($33,457) ($13,335) ($4,579) $357,595Net Income $219,092 ($26,262) ($9,602) ($2,805) $257,761Noncontrolling interest ($6,528) $21 NA NA ($6,549)H.J. Heinz Company Net Income $212,564 ($26,240) ($9,602) ($2,805) $251,211Diluted EPS $0.67 ($0.08) ($0.03) ($0.01) $0.79

Segment Operating Income:N.A. Consumer Products $184,205 ($4,618) NA NA $188,823Europe $125,641 ($20,787) ($13,335) NA $159,763Asia Pacific $53,264 ($10,041) NA NA $63,305US Foodservice $31,170 NA NA NA $31,170Rest of World $18,103 $490 NA NA $17,613

First Quarter ended July 29, 2009

(1) Excludes currency translation and UK transaction impact versus FY09 average rates as well as current year currency translation hedges.

H. J. Heinz Company

Constant Currency Results

The following tables reconcile the Company's reported results to constant currency results for both the current and prior year periods.

The constant currency changes presented during this presentation represent the change in this year's constant currency results versus theprior year constant currency results.




66

(continued)

Non GAAP Performance Ratios (continued)

(2) Excludes prior year translation hedges.

(3) Change is calculated by taking Q1 FY10 constant currency results versus the Q1 FY09 constant currency results.

(Totals may not add due to rounding)

(amounts in thousands)

Reported Currency Translation Constant Currency Constant Currency

Results Hedges Results (2) Change (3)

Net Sales $2,583,208 NA $2,583,208 4.5%Gross Profit $934,136 NA $934,136 3.5%Gross Profit Margin 36.2% NA 36.2% (0.4) ppMarketing $100,130 NA $100,130 3.2%SG&A $441,741 NA $441,741 1.7%Operating Income $392,264 NA $392,264 5.6%Net Interest/Other Expenses ($65,882) ($1,150) ($64,732) (12.5%)

NPBT $326,383 ($1,150) $327,533 9.2%Net Income $234,284 ($704) $234,988 9.7%Noncontrolling interest ($5,320) NA ($5,320) 23.1%H.J. Heinz Company Net Income $228,964 ($704) $229,668 9.4%Diluted EPS $0.72 $0.00 $0.72 9.7%

Segment Operating Income:

N.A. Consumer Products $168,108 NA $168,108 12.3%Europe $156,740 NA $156,740 1.9%Asia Pacific $66,519 NA $66,519 (4.8%)US Foodservice $24,940 NA $24,940 25.0%Rest of World $12,650 NA $12,650 39.2%

First Quarter ended July 30, 2008

Constant Currency Results (Continued)




67

(continued)

o G e o a ce at os (continued)

H. J. Heinz Company

Operating Free Cash Flow

(amounts in millions) July 29, 2009 July 30, 2008 FY 2010 FY 2009

Cash provided by/(used for) operating activities 168.9$ (13.9)$

Capital expenditures (48.7) (41.6)

Proceeds from disposals of property, plant and

equipment 0.6 0.7

Operating Free Cash Flow 120.8$ (54.9)$


First Quarter Ended




68

(continued)

(continued)

2006** 2007** 2008 Q109 Q209 Q309 Q409 2009 Q110

Total Heinz:

Volume 3.8% 0.7% 3.6% 5.0% (1.3%) (6.4%) (2.3%) (1.5%) (4.3%)Price (0.1%) 2.1% 3.3% 5.2% 7.1% 8.0% 7.5% 7.0% 6.0%Acquisition 5.6% 1.5% 0.6% 0.7% 1.2% 2.5% 3.3% 2.0% 3.1%Divestiture (1.2%) (3.1%) (0.8%) 0.0% (0.2%) (0.1%) (0.2%) (0.1%) (0.2%)Exchange (1.5%) 2.9% 5.1% 4.0% (3.3%) (11.4%) (13.9%) (6.6%) (9.0%)

Total Change in Net Sales 6.7% 4.1% 11.9% 14.9% 3.5% (7.5%) (5.6%) 0.8% (4.5%)

Total Organic Growth 3.7% 2.8% 6.9% 10.2% 5.8% 1.6% 5.2% 5.5% 1.7%

** Fiscal 2007 had one less week than Fiscal 2006


(Unaudited)

H. J. Heinz Company

Sales Variance Analysis

2006** 2007** 2008 Q109 Q209 Q309 Q409 2009 Q110

Total Heinz:

Volume 3.8% 0.7% 3.6% 5.0% (1.3%) (6.4%) (2.3%) (1.5%) (4.3%)

Price (0.1%) 2.1% 3.3% 5.2% 7.1% 8.0% 7.5% 7.0% 6.0%Acquisition 5.6% 1.5% 0.6% 0.7% 1.2% 2.5% 3.3% 2.0% 3.1%

Divestiture (1.2%) (3.1%) (0.8%) 0.0% (0.2%) (0.1%) (0.2%) (0.1%) (0.2%)Exchange (1.5%) 2.9% 5.1% 4.0% (3.3%) (11.4%) (13.9%) (6.6%) (9.0%)

Total Change in Net Sales 6.7% 4.1% 11.9% 14.9% 3.5% (7.5%) (5.6%) 0.8% (4.5%)

Total Organic Growth 3.7% 2.8% 6.9% 10.2% 5.8% 1.6% 5.2% 5.5% 1.7%

** Fiscal 2007 had one less week than Fiscal 2006


(Unaudited)

H. J. Heinz Company

Sales Variance Analysis




(continued)

(continued)

(In Millions) 2006* 2007 2008 2009 Q110

Cash Flows from Operating Activities

Net income 651.3$ 800.0$ 856.5$ 938.0$ 219.1$

Adjustments to reconcile net income tocash provided by operating activities:

Depreciation 227.5 233.4 250.8 241.3 61.3

Amortization 36.4 32.8 38.1 40.1 11.6

Deferred tax (benefit)/provision (57.7) 52.2 18.5 109.0 36.3

Other items, net 81.3 (4.6) (4.9) (225.2) (155.9)

Changes in current assets and liabilities,

excluding effects of acquisitions anddivestitures:

Receivables securitization facility - - - - 131.8

Receivables 115.6 11.0 (55.8) (10.9) 57.3

Inventories (47.4) (82.5) (133.6) 50.7 (29.7)Prepaid expenses and other currentassets 13.6 14.2 5.7 1.0 (28.2)

Accounts payable 56.5 56.5 89.2 (62.9) (73.7)

Accrued liabilities 57.4 (4.5) 28.3 24.6 (102.7)

Income taxes (59.5) (46.3) 95.6 61.2 41.7

Cash provided by operating activities 1,075.0 1,062.3 1,188.3 1,166.9 168.9

Investing activities:

Capital expenditures (230.6) (244.6) (301.6) (292.1) (48.7)

Proceeds from disposals of property,plant and equipment 19.4 60.7 8.5 5.4 0.6

Operating Free Cash Flow 863.8 878.4 895.2 880.2 120.8

(Unaudited)

H. J. Heinz Company

Consolidated Statements of Cash Flows

Documents

Heinz Cs Shanghai Finalpdf