Kraft Heinz has recorded a 4.8% rise in full-year net sales after a strong final quarter of at-home food consumption, yet witnessed a 30.7% drop in 2020 operating income.
The company posted net sales of $26.19 billion for 2020, compared to $24.98 billion the same time last year. In its fourth-quarter, net sales increased 6.2% to $6.94 billion due to sustained growth in retail, partially offset by ongoing weakness in foodservice.
Operating income for the full-year stood at $2.13 billion compared to $3.01 billion last year, representing a decline of 30.7%. However, operating income in Q4 increased 160.7% to $1.55 billion.
The results come on the same day as Kraft announced it will offload its Planters nut and snack business to Hormel Foods for $3.35 billion.
The owner of Heinz Ketchup and Philadelphia cream cheese reported full-year net sales of $19.2 billion for the US – its biggest market –representing a 7.6% increase. Its international market saw a 1.7% rise in net sales to $5.34 billion for the year, while its Canada unit fell by 12.8% to $1.64 billion.
“Our people’s unwavering commitment during this pandemic has been remarkable, and through it, our organisation has rediscovered its agility. This has accelerated our transformation and led to the strong performance we are reporting today,” said Kraft Heinz CEO Miguel Patricio.
Throughout 2020, Kraft Heinz benefitted from at-home consumption growth due in part to the Covid-19 pandemic. Meanwhile, the company says growth was partially offset by foodservice declines and negative impact from exiting the McCafé licensing agreement.
Patricio added: “We set our multi-year transformation plan this time last year. We exceeded that plan in 2020. We are increasingly confident that we will again exceed that plan in 2021. We have started the new year with our new operating model fully in place. We are well-prepared to meet the uncertainties of this dynamic environment, as well as the challenges facing the consumers we serve.”
For Q1 2021, Kraft expects flat-to-positive organic net sales growth and low-single-digit constant currency adjusted EBITDA growth, despite what it called an ‘exceptionally strong’ Q1 last year.
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