HJ Heinz Co F1Q08 (Qtr End 8/1/07) Earnings Call Transcript

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2007-09-17 10:07:54.0

Tags: H.J. Heinz Co.

Question-and-Answer Session

Operator

[Operator Instructions]. We will pause for just a moment to compile the Q&A roaster. Your first question comes from the Alexia Howard with Sanford Bernstein.

Alexia Howard - Sanford Bernstein & Co.

Hello guys.

Arthur B. Winkleblack - Chief Financial Officer and Executive Vice President

Hello, Alexia.

Alexia Howard - Sanford Bernstein & Co.

Good morning. Couple of quick questions. I noticed that? I mean Europe seems to be coming pretty more strongly at the moment and I was wondering whether you could speak to the prices as far as and also what’s happening with the U. K. pricing environment? It seems to me that’s reading a lot about the U. K. retail is getting a little bit tougher on pricing again and also wonder on the sales demand whether you are seeing weather having an impact on the soups and sauces of this business out there?

Arthur B. Winkleblack - Chief Financial Officer and Executive Vice President

Yes, good questions, Alexia. Overall Europe, we had some great top line growth in every major market, we had almost 6% organic growth. That was about 2.5% volume, pricing is about 3.5%, and that driven by the consumer marketing up about 40%, about half of the company increase, we’ve got strong new products as I mentioned. They were able to offset some tough commodity inflation. So, continued pricing is key to your point. G&A savings were very strong in Europe, so that’s certainly helped their results and really right now, the key is keeping up with demand from a supply standpoint. But in terms of the U. K. pricing, it is a difficult environment having said that, if you bring the innovation that consumers are willing to pay forward, we are finding that we are able to pass along appropriate price increases and its necessary given the commodity environment, I think you mentioned weather also, the weather did impact the sales in U. K. with soup benefiting from that, but on the flip side of it, our sauces business, you know was hurt by the weather as it came out. So net, net we are just very pleased with Europe and we believe that’s? that turnaround is setting and moving on.

Alexia Howard - Sanford Bernstein & Co.

All right. Thank you very much.

Operator

Your next question comes from Eric Katzman with Deutsche Bank.

Eric Katzman - Deutsche Bank

Hi, good morning everybody.

 

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