The Kraft Heinz Company · NASDAQ:KHC
The Kraft Heinz — Q3 2024 Earnings Presentation
30 slides from The Kraft Heinz's earnings presentation, Oct 30, 2024
Slide 1: Q3 2024 Business Update
October 30, 2024 Q3 2024 BUSINESS UPDATE
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS OCTOBER 30, 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, ta
Slide 3: Business & Strategy Update
Q3 2024 Business Update Q3 2024 Business & Strategy Update Chief Executive Officer CARLOS ABRAMS-RIVERA
Slide 4: Key takeaways: strategic pillars growing, strong cash flow, efficiencies
Q3 2024 Business Update • Two of our strategic pillars, Global Away From Home and Emerging Markets, grew and are gaining momentum, while we expect an elongated recovery in specific U.S. retail categories experiencing continued pressure. • We drove profitability and strong cash flow, while investing
Slide 5: Efficiencies Drove Margin Expansion and Strong Cash Flow Generation
Efficiencies Drove Margin Expansion and Strong Cash Flow Generation Q3 2024 Business Update Total Adjusted Gross Adjusted Year-to-Date Organic Net Sales1 Adjusted EPS1 Profit Margin1 Operating Income1 Free Cash Flow1 Kraft Heinz Q3 ‘24 $6.4B 34.3% $1.3B $0.75 $2.0B vs PY (2.2%) +30bps +1.4% +4.2% +9
Slide 6: We Remain Confident and Committed to Our Strategy
We Remain Confident and Committed to Our Strategy Q3 2024 Business Update UNLOCK REINVEST POWER ACCELERATE EFFICIENCIES IN THE BUSINESS BRAND SUPERIORITY PROFITABLE GROWTH 6
Slide 7: Top-Line Growth in Two Pillars, Global Away From Home and Emerging Markets
Top-Line Growth in Two Pillars, Global Away From Home and Emerging Markets Q3 2024 Business Update Strategic Pillars Organic Net Sales1 Q3 ‘24 vs PY N.A. Retail Lunchables decline weighs on top line, overshadowing ACCELERATE (4.5%) strong performance seen across iconic brands such as Philadelphia, O
Slide 8: Challenges Concentrated in Five Areas in North America Retail
Challenges Concentrated in Five Areas in North America Retail North America Retail N.A Retail ACCELERATE Total N.A. Retail Q3 Organic Net Sales1 (4.5%) (3.9%) Q3 ‘24 vs Q3 ‘23 Enablers for Growth Action Plan Brand Growth • Build a strong connection with System BGS consumers to drive conversion >80%
Slide 9: Pulling Forward Investments in our Enablers to Drive Improvement
Pulling Forward Investments in our Enablers to Drive Improvement North America Retail Action Plans in Place to Address Performance Initial Momentum Taking Hold Investing to expand category Connecting and engaging with Optimizing portfolio to better Strengthening value proposition to penetration in a
Slide 10: Continued Growth Across Several Brands in North America
With Continued Growth Across Several Brands in North America ACCELERATE N.A. Retail Accelerate Dollar Sales1 vs PY Dollar Sales1 vs PY Dollar Sales1 vs PY YTD 24 Q3 24 YTD 24 Q3 24 YTD 24 Q3 24 +9% +28% +4% +4% +23% +4% Optimized media investments; increased Increased marketing; improved supply Expa
Slide 11: Growing Global Away From Home Across Attractive Channels
Growing Global Away From Home Across Attractive Channels and Beyond Ketchup Global Away From Home Global Away From Home +1.8% Q3 Organic Net Sales1,2 Higher-Margin Channels Beyond Ketchup Go to Market Excellence Gaining share in non-commercial channels Increasing penetration across brands & categori
Slide 12: Growth in Emerging Markets Powered by Heinz and Go To Market Model
Growth in Emerging Markets Powered by Heinz and Go To Market Model Emerging Markets Emerging Markets +4.9% Q3 Organic Net Sales1,2 Power of Heinz in Emerging Markets Expanding Distribution through Go To Market Model Heinz Total Distribution Points4 Organic Net Sales1,3 Approximately +5% Q3 ‘24 vs Q3
Slide 13: Volume Trends Improving Compared to 2023
Volume Trends in Our Total Kraft Heinz Business are Improving Compared to 2023 Q3 2024 Business Update Impact of Lunchables Total Kraft Heinz Volume / Mix vs PY (2.9pp) (2.6pp) (3.2pp) (4.4pp) (5.3pp) (5.4pp) (0.5pp) (0.8pp) (7.0pp) (3.4pp) (3.4pp) Q1 '23 Q2 '23 Q3 '23 Q4 '23 Q1 '24 Q2 '24 Q3 '24 Pr
Slide 14: Investing in Marketing to Power Brands with Relevance and Agility
Investing in Marketing to Power Brands with Relevance and Agility Q3 2024 Business Update X “Pouch Panic” 560M Earned media impressions globally +156% Global Heinz Organic engagement vs. benchmark3 Organic Net Sales1,2 Approximately +4% EVERY SAUCE Q3 ‘24 vs Q3 ‘23 220M+ Earned media impressions 1.6
Slide 15: Providing Sustainable Value to Consumers through Benefits Worth Paying For
And Providing Sustainable Value to Consumers through Benefits Worth Paying For Q3 2024 Business Update Providing High-Quality, Convenient Solutions … Satisfying Changing Consumer Desires … … by feeding the entire family with delicious meals in minutes. … by evolving our core offerings to stay releva
Slide 16: Innovation Pipeline Gaining Momentum and Driving Results
Resulting in an Innovation Pipeline that is Gaining Momentum and Driving Results Q3 2024 Business Update Innovation as a % of Organic Net Sales1 (Does not include renovation) MEXICAN +100bps 2.8% 1.8% +1.1pp Dollar Share3 Q3 vs PY MAC & CHEESE 2 2023 2024 YTD Continuing to increase our innovation as
Slide 17: Proven Ability to Continue to Unlock Efficiencies
Proven Ability to Continue to Unlock Efficiencies, with Meaningful Runway Ahead Q3 2024 Business Update Unlocked Gross Efficiencies Much More to Capture $1.1B Unlocked to Date between 2023 and 2024 YTD $1.4B+ To Go from 2024 YTD to 2027E Further Efficiencies through Agile@Scale and by: Implementing
Slide 18: Actively Responding to Challenges, Protecting Profitability, Investing in Growth
Actively Responding to Challenges, Protecting Profitability, and Investing in Growth Q3 2024 Business Update 2024 Challenges Strategic Advancements Drivers of Growth Creating solutions for increased Preserving profitability, Continuing to sustainably value-seeking behavior generating strong cash flo
Slide 19: Business & Strategy Update
Q2 2024 Business Update Q3 2024 Business & Strategy Update Global Chief Financial Officer ANDRE MACIEL
Slide 20: Improving Trends across International; Pressure in Specific U.S. Retail Categories
Improving Trends across International; Pressure in Specific U.S. Retail Categories Q3 2024 Business Update Organic Q3 24 vs Q3 23 Net Sales 1 Price Volume / Mix Total Kraft Heinz (2.2%) 1.2pp (3.4pp) Top-line decline gradually improved versus Q2, with nearly half of the year-over-year decline coming
Slide 21: Protecting Profitability and Managing our Business in a Disciplined Manner
Protecting Profitability and Managing our Business in a Disciplined Manner Q3 2024 Business Update Adjusted Constant Currency Adjusted Operating Adj. Operating Operating Income Q3 24 vs Q3 23 Income 1 Currency Income 1 Margin1 Total Kraft Heinz 1.4% (0.2pp) 1.6% 20.8% Margin expansion a result of un
Slide 22: Increasing Investments in Trade while Generating Positive Returns on Promotions
Increasing Investments in Trade while Generating Positive Returns on Promotions Q3 2024 Business Update Increasing Investments in Remaining Disciplined on Q3 ‘24 % U.S. Volume 1 Sold on Promotion1 • Generating positive Being mindful of the consumer situation ROIs in the quarter 3% • Increased freque
Slide 23: Using a Combination of Initiatives to Drive Progress on Share Trends
Using a Combination of Initiatives to Drive Progress on Share Trends Q3 2024 Business Update Whipped Toppings Mac & Cheese Cups Frozen Potatoes Kids Single Serve Beverages Dollar Share1 vs PY Dollar Share1 vs PY Dollar Share1 vs PY Dollar Share1 vs PY +1.8pp +1.6pp 0.9pp 0.9pp +0.6pp (2.9pp) +0.1pp
Slide 24: Efficiencies are Generating Margin Expansion and Fueling Reinvestment
Efficiencies are Generating Margin Expansion and Fueling Reinvestment Q3 2024 Business Update Supply Chain Efficiencies Adjusted Gross Profit Margin1 Investments in the Business Gross Efficiencies Increase in Spend (% COGS) +130bps YTD vs PY 4.0% Best in Class 34.7% 3.0% Marketing2 +4% 2.0% 33.4% 1.
Slide 25: Exceeded Best-in-Class Productivity Levels for the Last Five Quarters
We Have Exceeded Best-in-Class Productivity Levels for the Last Five Quarters Q3 2024 Business Update Best in Class Productivity Gross Efficiencies 6.0% (% COGS) ✓ Integrated supply chain ✓ Enhanced digital capabilities ✓ Unwind 5.0% of pandemic related Best in Class: 4% inefficiencies 4.0% 3.0% Inc
Slide 26: Strong Cash Flow Continues to Fund Increased CapEx Investments
Our Strong Cash Flow Continues to Fund Increased CapEx Investments Q3 2024 Business Update Free Cash Flow Conversion1 Capital Expenditures Adjusted EPS1 (% of Net Sales) +7pp +10bps +4.2% 75% $0.75 68% 4.0% $0.72 3.9% YTD '23 YTD '24 YTD '23 YTD '24 Q3 '23 Q3 '24 Primarily driven by an Increased inv
Slide 27: Maintain a Strong Balance Sheet and Return Capital to Stockholders
While we Maintain a Strong Balance Sheet and Return Capital to Stockholders Q3 2024 Business Update Capital Allocation in Place Competitive Target Leverage Ratio of Maintain Annual Dividend Approximately 3.0x Investment Grade Maintained Net Leverage1 Returning Incremental Capital Target of ~3.0x to
Slide 28: Expecting to be at the Low End of our Previous Full Year Guidance Range
Expecting to be at the Low End of our Previous Full Year 2024 Guidance Range Q3 2024 Business Update 2024 FYE Outlook 2024 FYE Considerations • Positive contribution from price for FY24 Organic Net Sales1 (2%) to 0% • FY24 impact from currency at current FX rates: ~(60bps) Low End • FY24 ingredient
Slide 29: Business & Strategy Update
Q3 2024 Business Update Q3 2024 Business & Strategy Update Chief Executive Officer CARLOS ABRAMS-RIVERA
Slide 30: Key takeaways: strategic pillars growing, strong cash flow, efficiencies
Q3 2024 Business Update • Two of our strategic pillars, Global Away From Home and Emerging Markets, grew and are gaining momentum, while we expect an elongated recovery in specific U.S. retail categories experiencing continued pressure. • We drove profitability and strong cash flow, while investing
The Kraft Heinz Company — Q3 2024 Earnings Presentation on 6ix