The Kraft Heinz Company · NASDAQ:KHC
The Kraft Heinz — Q3 2020 Earnings Presentation
36 slides from The Kraft Heinz's earnings presentation, Oct 29, 2020
Slide 1: A New Model for Growth
INVESTOR DAY Q3 2020 2020 OCTOBER 29 A NEW MODEL EARNINGS CALL 2020 FOR GROWTH
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS Q3 2020 EARNINGS CALL 2 This presentation contains a number of forward-looking statements. Words competitiveness; the Company’s ability to successfully execute its strategic on these and other factors that could affect the Company's forward-looking such as “plan,” "believe
Slide 3: Today's Agenda
TODAY’S AGENDA Q3 2020 EARNINGS CALL 3 01 02 03 04 BUSINESS US ZONE FINANCIAL Q&A UPDATE REVIEW PERFORMANCE & OUTLOOK Miguel Patricio Carlos Abrams-Rivera Paulo Basilio Chief Executive Officer US Zone President Chief Financial Officer
Slide 4: Miguel Patricio, Chief Executive Officer
Q3 2020 EARNINGS CALL 4 MIGUEL PATRICIO CHIEF EXECUTIVE OFFICER
Slide 5: Performance to Date Is Making Us Confidently Optimistic
BUSINESS UPDATE Q3 2020 EARNINGS CALL 5 PERFORMANCE TO → Results reflect greater agility DATE IS MAKING US → Consumer priorities remain favorable CONFIDENTLY → Strategy from planning to action OPTIMISTIC → 2020, 2021 ahead of Strategic Plan
Slide 6: Foodservice and Retail Organic Net Sales Growth
BUSINESS UPDATE Q3 2020 EARNINGS CALL 6 United States Canada International Q1 Q2 Q3 Q1 Q2 Q3 Q1 Q2 Q3 +1.5pp +5.9pp Retail 15% +5.6pp 16% 12% 13% +5.9pp Organic Net Sales1 8% 5% 3% 8% 9% Growth Foodservice (12%) (3%) (21%) (16%) Organic Net Sales1 (25%) (5%) (46%) (45%) Growth (53%) Business Exit Bu
Slide 7: Improved Agility Is Sustaining Momentum as We Reset Our Base
BUSINESS UPDATE Q3 2020 EARNINGS CALL 7 Organic Net Sales1 Constant Currency Adjusted Improved Growth EBITDA1 Growth agility is H1 Q3 H1 Q3 sustaining +0.3pp momentum +1.2pp as we reset +7.2pp our base 6.9% 6.3% +5.7pp 13.6% 7.1% pp impact Incentive Business Exit Divestiture Business Exit from … Com
Slide 8: Growth Is Tracking With Our Strategy
BUSINESS UPDATE Q3 2020 EARNINGS CALL 8 YTD Net Sales Growth Emerging Market Growth is by Portfolio Role Organic Net Sales1 Growth tracking with 8% 9% 7% our strategy 7% 2% ↑ Grow ☀︎ Energize ⌅ Stabilize YTD Q3 % of 2020 Net Sales Growth Platform Role Net Sales Q3 vs. PY YTD vs PY Taste Elevation 28
Slide 9: Evolving Consumer Preferences
BUSINESS UPDATE Q3 2020 EARNINGS CALL 9 Evolving In-Home Occasions → (Re)discovering cooking at home and Commerce consumer → Redefining meal experiences → Reassessing the shopping trip, baskets and bundles preferences indicate Affordability → Value for money elevated → Pack-size → Good-Better-Best t
Slide 10: We Remain Excited for the Future of Kraft Heinz
BUSINESS UPDATE Q3 2020 EARNINGS CALL 10 Actions to PEOPLE WITH CONSUMER OPS PARTNER FUEL OUR PURPOSE PLATFORMS CENTER PROGRAM GROWTH date position Kraft Heinz to sustain gains New training & Adapting innovation Simplifying portfolio & SKU Flexible Reinvesting in brands, capacity, development mercha
Slide 11: Carlos Abrams-Rivera, US Zone President
Q3 2020 EARNINGS CALL 11 CARLOS ABRAMS- RIVERA US ZONE PRESIDENT
Slide 12: Agility Is Driving Sustained Momentum
U.S. ZONE REVIEW Q3 2020 EARNINGS CALL 12 Organic Net Sales1 Constant Currency Adjusted Agility is Growth EBITDA1 Growth driving H1 Q3 H1 Q3 sustained +1.3pp momentum +6.4pp +2.6pp 7.5% 7.4% 17.5% 12.2% pp impact Incentive Business Exit Divestiture Business Exit from … Compensation 1| Non-GAAP finan
Slide 13: Unlocking Agility to Leverage Our Scale
U.S. ZONE REVIEW Q3 2020 EARNINGS CALL 13 We are PEOPLE WITH CONSUMER OPS PARTNER FUEL OUR PURPOSE PLATFORMS CENTER PROGRAM GROWTH turning the corner from restructuring New structure fully operational, Focus through Delivering COGS Accelerated planning, Reinvesting in to execution fully staffed plat
Slide 14: We Have Market Share Momentum to Build Upon
U.S. ZONE REVIEW Q3 2020 EARNINGS CALL 14 We have Market Share Progression % of Business Growing Share As of September 26, 2020 market share L52 L26 L4 H1 Q3 Sep. momentum +38pp to build upon (0.1pp) 58% 41% (0.4pp) (0.5pp) 20% 36% 40% 49% % of Categories Gaining Share Source: Nielsen xAOC Data for
Slide 15: We Are Now Ramping Up Brand Support
U.S. ZONE REVIEW Q3 2020 EARNINGS CALL 15 We are now Rate of New Buyers Marketing Investment Repurchasing 2+ Times ramping up brand +40% +70% support to retain and 35% inspire new 18% consumers 24 Weeks Ending 24 Weeks Ending H2 2019 H1 2020 H2 2020 Aug 17, 2019 Aug 15, 2020 Non-Working Working Sour
Slide 16: Paulo Basilio, Chief Financial Officer
Q3 2020 EARNINGS CALL 16 PAULO BASILIO CHIEF FINANCIAL OFFICER
Slide 17: United States: Volume/Mix Benefited From Strong Growth
FINANCIAL PERFORMANCE & OUTLOOK: UNITED STATES Q3 2020 EARNINGS CALL 17 Organic Net Sales1 HIGHLIGHTS Price: 2.9pp Price: 4.0pp Vol/Mix: 4.6pp Vol/Mix: 3.4pp • Volume/mix benefited from strong growth across 7.5% 7.4% retail, e-commerce, and club channels • Higher price reflects reduction in certain
Slide 18: International: Balanced Growth Continued, Led by Taste Elevation
FINANCIAL PERFORMANCE & OUTLOOK: INTERNATIONAL Q3 2020 EARNINGS CALL 18 Organic Net Sales1 HIGHLIGHTS Price: 2.2pp Price: 2.1pp Vol/Mix: 3.5pp Vol/Mix: 2.5pp • Balanced growth continued, led by Taste Elevation 5.7% • Developed Markets: +1.6% Q3, +5.0% YTD 4.6% • Emerging Markets: +9.1% Q3, +6.7% YTD
Slide 19: Canada: Strong Retail Growth in Easy Meals Made Better
FINANCIAL PERFORMANCE & OUTLOOK: CANADA Q3 2020 EARNINGS CALL 19 Organic Net Sales1 HIGHLIGHTS Price: 0.1pp Price: 4.6pp Vol/Mix: 0.9pp Vol/Mix: (5.6)pp • Strong retail growth in Easy Meals Made Better and 1.0% Taste Elevation more than offset by the impact of McCafé exit and lower foodservice sales
Slide 20: Consolidated Summary
FINANCIAL PERFORMANCE & OUTLOOK: CONSOLIDATED SUMMARY Q3 2020 EARNINGS CALL 20 Net Sales → Strong vol/mix and Adjusted EPS1 → Q3 2020 included $6,441 favorable pricing $(0.12) impact offset business exit below EBITDA $6,076 $0.13 $0.70 → Pricing tailwind to $0.69 → Continue to fade from Q4 $(0.12) e
Slide 21: 2020 Expectations: Raising 2020 Outlook
FINANCIAL PERFORMANCE & OUTLOOK: 2020 EXPECTATIONS Q3 2020 EARNINGS CALL 21 RAISING 2020 OUTLOOK Organic Net Sales1 Adjusted EBITDA1 Free Cash Flow1 Q4 2020 Q4 2020 high-single-digit Expect ~100% Free Cash mid-single-digit growth Constant Currency growth Flow conversion FY 2020 FY 2020 high-single-d
Slide 22: 2021 Expectations and Objectives
FINANCIAL PERFORMANCE & OUTLOOK: 2021 EXPECTATIONS Q3 2020 EARNINGS CALL 22 2021 OBJECTIVES Organic Net Sales1 Adjusted EBITDA1 Free Cash Flow1 Retain DM Household Gains Accelerate Growth Maintain Strong Return of & Accelerate EM Growth Investments Cash to Shareholders Improve Trajectory from Delive
Slide 23: Q&A
INVESTOR DAY 2020 Q3 2020 EARNINGS CALL MIGUEL PATRICIO Q&A CHIEF EXECUTIVE OFFICER PAULO BASILIO CHIEF FINANCIAL OFFICER CARLOS ABRAMS-RIVERA US ZONE PRESIDENT
Slide 24: Appendix
Q3 2020 EARNINGS CALL APPENDIX
Slide 25: Non-GAAP Financial Measures
Appendix Q3 2020 EARNINGS CALL 25 Non-GAAP Financial Measures The non-GAAP financial measures provided should be viewed in addition to, and not as an alternative for, results prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) that are presen
Slide 26: Platform Net Sales Growth
Appendix Q3 2020 EARNINGS CALL 26 Net Sales Growth % of 2020 Platform Zone Role Net Sales1 Q3 vs. PY YTD vs PY Taste Elevation 28% +6% +5% ↑ Taste Elevation (ex-foodservice) 22% +20% +19% Easy Meals Made Better ↑ / ☀︎ 19% +10% +17% Real Food Snacking / ↑ 9% +4% +3% Fast Fresh Meals / ☀︎ 24% +8% +8%
Slide 27: Appendix
Appendix Q3 2020 EARNINGS CALL 27
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Appendix Q3 2020 EARNINGS CALL 28
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Appendix Q3 2020 EARNINGS CALL 29
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Appendix Q3 2020 EARNINGS CALL 30
Slide 31: Appendix
Appendix Q3 2020 EARNINGS CALL 31
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Appendix Q3 2020 EARNINGS CALL 32
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Appendix Q3 2020 EARNINGS CALL 34
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Appendix Q3 2020 EARNINGS CALL 35
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Appendix Q3 2020 EARNINGS CALL 36
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