The Kraft Heinz Company · NASDAQ:KHC
The Kraft Heinz — Q2 2024 Earnings Presentation
27 slides from The Kraft Heinz's earnings presentation, Jul 31, 2024
Slide 1: Q2 2024 Business Update
July 31, 2024 Q2 2024 BUSINESS UPDATE
Slide 2: Forward-Looking Statements and Non-GAAP Financial Measures
FORWARD-LOOKING STATEMENTS JULY 31, 2024 This presentation contains a number of forward-looking statements as defined under U.S. federal securities laws, including, but not limited to, statements, estimates, and projections relating to our business and long-term strategy; our ambitions, goals, targe
Slide 3: Business & Strategy Update - CEO Carlos Abrams-Rivera
Q2 2024 Business Update Q2 2024 Business & Strategy Update Chief Executive Officer CARLOS ABRAMS-RIVERA
Slide 4: Consumer environment and strategy commitments
Q2 2024 Business Update • The consumer environment remains challenged, resulting in a more gradual top-line improvement now expected in the back half of the year. • We continue to unlock efficiencies to drive margin expansion, while at the same time generating increased profits and strong cash flow,
Slide 5: Unlocked Efficiencies Driving Margin Expansion
Unlocked Efficiencies Driving Margin Expansion Q2 2024 Business Update Adjusted Gross Adjusted Operating Organic Net Sales1 Adjusted EPS1 Total Kraft Heinz Profit Margin1 Income1 Q2 2024 $6.5B 35.5% $1.4B $0.78 Q2 vs PY (2.4%) +210bps +2.0% (1.3%) 1| Non-GAAP financial measure. See the accompanying
Slide 6: We Remain Confident and Committed to Our Strategy
We Remain Confident and Committed to Our Strategy Q2 2024 Business Update ACCELERATE UNLOCK REINVEST POWER PROFITABLE GROWTH EFFICIENCIES IN THE BUSINESS BRAND SUPERIORITY 6
Slide 7: Q2 Pressure Expected to Abate in Second Half of the Year
Q2 Pressure Expected to Abate in Second Half of the Year Q2 2024 Business Update Strategic Pillars Organic Net Sales1 Q2 ‘24 vs PY • Impact from the current U.S. consumer environment was N.A. Retail compounded by lower Lunchables sales and the exit of our bulk ACCELERATE (2.4%) vinegar business. • H
Slide 8: Lunchables and Temporary Plant Closure Impacting Volume/Mix in Q2
Lunchables and Temporary Plant Closure Impacting Volume/Mix in Q2 Q2 2024 Business Update Impact of plant closure and Lunchables Total Kraft Heinz Volume / Mix vs PY (2.5pp) (3.2pp) (0.9pp) Impact (4.4pp) from temporary (5.3pp) (5.4pp) plant closure and (7.0pp) Lunchables (3.4pp) Q1 '23 Q2 '23 Q3 '2
Slide 9: Gaining or Recovering Share Internationally
Gaining or Recovering Share Internationally Q2 2024 Business Update Gaining or Recovering Share Isolated Impacts Driving Pressure International Developed Retail Emerging Markets Retail U.S. Away from Home North America Retail Dollar Share1 vs PY Dollar Share1,3 vs PY Dollar Share2 vs PY Dollar Share
Slide 10: Investing to Drive Improvement Across our Portfolio of Iconic Brands
Investing to Drive Improvement Across our Portfolio of Iconic Brands Q2 2024 Business Update U.S. Retail Consumption Dollar Sales vs PY1 Last 13 Weeks Last 4 Weeks 1 As of 7.07.24 As of 7.07.24 Renovated Capri Sun shipping now, with 2x marketing to support trial. Rest of 2 Portfolio Deploying a comp
Slide 11: Efficiency Generation Enabling Continued Reinvestment in the Business
Efficiency Generation Enabling Continued Reinvestment in the Business Q2 2024 Business Update UNLOCK REINVEST EFFICIENCIES IN THE BUSINESS Unlocking efficiencies to drive margin expansion … to continue to fuel investments in SG&A while increasing investments in trade … and Capital Expenditures. Adju
Slide 12: Providing Value to Consumers through Innovation
Providing Value to Consumers through Innovation Q2 2024 Business Update Providing High-Quality, Convenient Solutions … Satisfying Changing Consumer Desires … … through 360CRISPTM, Delimex, and Taco Bell Cravings Kits. … by evolving our core offerings to stay relevant to consumer trends. Expanding Op
Slide 13: Our Innovation Pipeline is Gaining Momentum
Our Innovation Pipeline is Gaining Momentum … Q2 2024 Business Update Innovation as a % of Organic Net Sales1 (Does not include renovation) MEXICAN +60bps 2.4% 1.8% Exceeding expected distribution on Taco Bell Cravings Kits and Dips +34% DOLLAR CHANNEL OSCAR MAYER +47% 2 2023 2024 YTD Kraft Heinz YT
Slide 14: And We are Excited About What is Coming
… And We are Excited About What is Coming! Q2 2024 Business Update Capri Sun Renovation Shipping New Super MarioTM Shapes Launching Transformers Partnership Timed Now with 2X Media Support! Now in Major Retailers Nationwide with September Movie Premiere! 2X MEDIA SPEND ‘24 VS ‘23 First Innovation Ou
Slide 15: Investments Across Marketing and Technology are Also Paying Off
Investments Across Marketing and Technology are Also Paying Off Q2 2024 Business Update Global Heinz Brand Strategy Delivering Sustained Leading Digital Platform Transformation, Fueled Impact by Agile@Scale Creative Achieved Kantar’s Recognized at New digital Digital campaign Recognized by creation
Slide 16: Actively Responding to Challenges While Protecting Profitability & Investing in Growth
Actively Responding to Challenges While Protecting Profitability & Investing in Growth Q2 2024 Business Update 2024 Challenges Strategic Advancements Drivers of Growth Creating solutions for increased Preserving profitability, Accelerating innovation as a value-seeking behavior generating strong cas
Slide 17: Business & Strategy Update - CFO Andre Maciel
Q2 2024 Business Update Q2 2024 Business & Strategy Update Global Chief Financial Officer ANDRE MACIEL
Slide 18: Continuing our Disciplined Approach to Drive Sustainable, Long-Term Growth
Continuing our Disciplined Approach to Drive Sustainable, Long-Term Growth … Q2 2024 Business Update Organic Q2 24 vs Q2 23 Net Sales 1 Price Volume / Mix Total Kraft Heinz (2.4%) 1.0pp (3.4pp) • Continuing to manage our business in a disciplined manner that preserves our ability to drive sustainabl
Slide 19: While Preserving Our Ability to Generate Increased Profits
… While Preserving Our Ability to Generate Increased Profits Q2 2024 Business Update Adjusted Constant Currency Adjusted Operating Adj. Operating Operating Income Q2 24 vs Q2 23 Income 1 Currency Income 1 Margin1 Total Kraft Heinz 2.0% (0.7pp) 2.7% 21.3% • Expansion a result of unlocked efficiencies
Slide 20: Increasing Investments in Trade while Remaining Disciplined on Promotions
Increasing Investments in Trade while Remaining Disciplined on Promotions Q2 2024 Business Update Increasing Investments in Remaining Disciplined on Q2 ‘24 % U.S. Volume 1 Sold on Promotion1 Being mindful of the consumer situation • Volume sold on 2% promotion higher than prior year, but remains bel
Slide 21: End-to-End Efficiencies Generating Margin Expansion and Fueling Reinvestment
End-to-End Efficiencies Generating Margin Expansion and Fueling Reinvestment … Q2 2024 Business Update Supply Chain Efficiencies Adjusted Gross Profit Margin1 Investments in the Business Gross Efficiencies Increase in Spend (% COGS) +190bps YTD vs PY Best in 35.0% 4.0% Class 3.0% Marketing2 +9% 2.0%
Slide 22: While Improving Cash Flow and Funding Increased CapEx
… While Improving Cash Flow and Funding Increased CapEx Q2 2024 Business Update Free Cash Flow Conversion1 Capital Expenditures ($M) Adjusted EPS1 +6pp +7% (1.3%) 65% $543 $0.79 $0.78 59% $508 YTD '23 YTD '24 YTD '23 YTD '24 Q2 '23 Q2 '24 Primarily driven by an Increased investments in CapEx vs Q2 2
Slide 23: Strengthened Balance Sheet and Returning Capital to Stockholders
Strengthened Balance Sheet and Returning Capital to Stockholders Q2 2024 Business Update Capital Allocation in Place Competitive Target Leverage Ratio of Maintain Annual Dividend Approximately 3.0x Investment Grade Maintained Net Leverage Returning Incremental Capital Target of ~3.0x to Stockholders
Slide 24: Full Year 2024 Outlook
Full Year 2024 Outlook Q2 2024 Business Update 2024 FYE Outlook 2024 Considerations • Flat to slightly positive contribution from price throughout the year Organic Net Sales1 (2%) to 0% • FY24 impact from currency at current FX rates: ~(60bps) • Consumer environment delaying top-line recovery • Rais
Slide 25: Gradual Recovery Expected from Q2 to H2
Gradual Recovery Expected from Q2 to H2 Q2 2024 Business Update North America Global Emerging Drivers of Q2 to H2E Trajectory Retail Away From Home Markets Completed temporary plant maintenance Ramping up innovation, renovation, and marketing Expanding distribution through go-to-market and global ac
Slide 26: Business & Strategy Update - CEO Carlos Abrams-Rivera
Q2 2024 Business Update Q2 2024 Business & Strategy Update Chief Executive Officer CARLOS ABRAMS-RIVERA
Slide 27: Kraft Heinz Well Positioned Despite Short-Term Volatility
Kraft Heinz Well Positioned Despite Short-Term Volatility Q2 2024 Business Update • Leading iconic brands providing value across multiple price points and channels • Attractive categories that play in consumer spaces where we have the right to win • Agile@Scale organization unlocking end-to-end effi
The Kraft Heinz Company — Q2 2024 Earnings Presentation on 6ix