The Kraft Heinz Company · NASDAQ:KHC
The Kraft Heinz — Q1 2022 Earnings Presentation
38 slides from The Kraft Heinz's earnings presentation, Apr 27, 2022
Slide 1: Q1 2022 Business Update
Q1 2022 BUSINESS UPDATE APRIL 27, 2022
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS APRIL 27,BUSINESS Q1 2022 2022 UPDATE 2 This presentation contains a number of forward-looking statements. Words such as "accelerate," "advance," "anticipate," "believe," "build," "deliver," "drive," "expand," "expect," "focus," "gain," "give," "grow," "improve," "intend,"
Slide 3: Q1 2022 Business Update - Miguel Patricio, CEO
Q1 2022 BUSINESS UPDATE Miguel Patricio Chief Executive Officer
Slide 4: Our transformation is gaining momentum
Q1 2022 BUSINESS UPDATE 4 Our transformation is gaining momentum Delivered an While And excellent navigating advancing start short-term long-term to the year turbulence strategy
Slide 5: Delivered strong Q1 performance
Q1 2022 BUSINESS UPDATE 5 Organic Net Sales1 Adjusted EBITDA1 Free Cash Flow1 Delivered strong Q1 performance +6.8% $1.3B $0.3B vs Q1 2021 Q1 2022 Q1 2022 +5.3% +2.4% 36% CAGR vs CAGR vs Q1 2019 Free Cash Flow1 Q1 2019 on Ongoing Business2 Conversion Price realization increasing Pricing and efficien
Slide 6: Three pillars of growth fuel top-line momentum
Q1 2022 BUSINESS UPDATE 6 Three pillars of growth fuel top-line momentum Consumer Platforms Foodservice Emerging Markets
Slide 7: Resilient growth across our consumer platforms
Q1 2022 BUSINESS UPDATE 7 Resilient US Zone Platform Growth growth Organic Net Sales1 across our % of CAGR Q1 Role Platform Products Zone2,3 vs. 20193 consumer Heinz Sauces, Taste Elevation platforms Dressings, Condiments Kraft Mac & Cheese, Easy Meals Made Better GROW Ore-Ida, Pasta Sauce 65% 7% Re
Slide 8: Foodservice growing and gaining market share
Q1 2022 BUSINESS UPDATE 8 Foodservice Foodservice Q1 2022 Growth 1 growing and United States International gaining market share +17% +2pp +30% +2pp vs 2021 vs industry2 vs 2021 vs industry2 Expanding QSR partnerships Driving the Heinz brand in Emerging Markets U.S. Jack in the Box Partnership Emergi
Slide 9: Emerging Markets growing sustainably
Q1 2022 BUSINESS UPDATE 9 Emerging Growing Sustainable Markets growing EM Organic 10% 37% Net Sales1: Q1 vs 2021 Organic Net Sales1 through Q1 vs 2021 sustainable >200% EM Business Currently Covered and repeatable by GTM Model Distribution Growth 30% (# Stores) vs 2018 Go-to-Market Model Organic Net
Slide 10: Advancing consumption and share recovery in the U.S.
Q1 2022 BUSINESS UPDATE 10 Advancing U.S. Organic Net Sales Growth: 1 7% consumption Q1 vs 2021 and share recovery in Organic Net Sales1 U.S. Retail Consumption2 Market Share2 the U.S. 9.3% Q4 2021 Q1 2022 2.9% (0.1pp) (0.3pp) (0.2pp) 3.6% (0.2pp) (0.2pp) (0.2pp) (0.5 pp) -0.6% (0.7 pp) -2.1% 0.1% S
Slide 11: Actively managing short-term challenges
Q1 2022 BUSINESS UPDATE 11 Actively managing Supply Chain Challenges short-term Leveraging scale to ensure challenges supply continuity Renovating products to improve Risk to availability flexibility, cost, and value proposition Unlocking efficiencies to continue investing in the business, mitigatin
Slide 12: Uniquely positioned to provide consumers additional value
Q1 2022 BUSINESS UPDATE 12 Uniquely Value Beyond Price positioned Anticipating consumer needs by elevating the importance of affordability to provide consumers Leveraging unique breadth of portfolio Tailoring approach to consumers by additional and occasion-based insights demand moment / shopping pr
Slide 13: Advancing Long-Term Strategy
Q1 2022 BUSINESS UPDATE Q1 2022 BUSINESS UPDATE ADVANCING LONG-TERM STRATEGY
Slide 14: Reimagining Food Production
Q1 2022 BUSINESS UPDATE 14 Building new capabilities Reimagining Food Production through partnerships to transform the business Leverage machine Set a new Grow Ore-Ida through learning and advanced standard for world-class innovation analytics to accelerate plant-based and technology, while innovati
Slide 15: Reinventing our Approach to Marketing
Q1 2022 BUSINESS UPDATE 15 Building new Reinventing our Approach to Marketing capabilities Moving at the Speed of Culture through Data partnerships to transform the business Robust 1st party database Insights Content • 32M consumer records Creation and growing Generation • 400+ attributes Proprietar
Slide 16: Earned Media at the Speed of Culture
Q1 2022 BUSINESS UPDATE 16 Reinventing Earned Media at the Speed of Culture our approach to marketing Velveeta Golden Cube Kraft Mac & Cheese x Netflix with increased Executed within 24-hours 2x more organic Twitter engagement focus on 100% positive/neutral sentiment 100% positive/neutral sentiment
Slide 17: Q1 2022 Financial Performance and Outlook
Q1 2022 FINANCIAL PERFORMANCE AND OUTLOOK Andre Maciel Global CFO
Slide 18: Organic Net Sales Growth
TOTAL KRAFT HEINZ Q1 2022 BUSINESS UPDATE 18 All three Net Sales Growth Organic Net Sales1 pillars of Q1 2022 vs 2021 growth across all growth consumer platforms driving Foodservice recovery Organic across all markets Net Sales1 9.0% Emerging markets -2.2% -5.5% -1.1% growing double-digits -11.2% Or
Slide 19: Pricing power and efficiency gains mitigating inflation
TOTAL KRAFT HEINZ Q1 2022 BUSINESS UPDATE 19 Pricing power and Adjusted EBITDA1 Q1 2022 vs 2021 strong (in millions) efficiency gains + mitigating + - inflationary - - - - + pressure 1 2 1 1| Non-GAAP financial measure. See Appendix to this presentation for more information, including GAAP to non-GA
Slide 20: Price realization taking hold
TOTAL KRAFT HEINZ Q1 2022 BUSINESS UPDATE 20 Price realization Gross Margin % Adjusted EPS1 Free Cash Flow1 Conversion taking hold, $0.72 34.4% expected to 31.9% $0.58 $0.60 65% 30.2% increase 36% throughout the year 11% Q1 2020 Q1 2021 Q1 2022 Q1 2020 Q1 2021 Q1 2022 Q1 2020 Q1 2021 Q1 2022 vs Q1 2
Slide 21: Financial flexibility continues to improve
TOTAL KRAFT HEINZ Q1 2022 BUSINESS UPDATE 21 Financial flexibility Patience and financial discipline Net Leverage1 continues to drove return to investment grade improve 4.5x 4.5x Impact from Record timing, positive outlook LTM divested Adjusted (S&P) 0.2x EBITDA2 3.6x 3.1x Strong balance sheet gives
Slide 22: Managing our cost basket
TOTAL KRAFT HEINZ Q1 2022 BUSINESS UPDATE 22 Managing our 2022 FY Inflation Outlook from Low Teens → Mid Teens cost basket Lowering exposure to more volatile commodities in our portfolio… to reduce risk FY 2021 Ongoing Business Depreciation & Other Packaging Commodities & Ingredients Logistics Manuf
Slide 23: Mitigating short-term challenges
TOTAL KRAFT HEINZ Q1 2022 BUSINESS UPDATE 23 Pricing to Protect Unlocking Mitigating Stronger Portfolio Adjusted EBITDA1 Efficiencies Short-term Dollars challenges $2B Q1 Price Realization Lower Private Label (in Organic Net Sales1) Exposure +9% 20% 17% 20% 2022E: >$0.4B 11% Additional Price 2021 An
Slide 24: 2022 Outlook
TOTAL KRAFT HEINZ Q1 2022 BUSINESS UPDATE 24 Net Sales Adjusted EBITDA1 2022 Outlook • Mid single-digit Organic • Between $5.8B to $6.0B, including reflects Net Sales1 growth 53rd week improved ▪ Foodservice channel share gains ▪ Inflation expected in mid-teens Organic Net ▪ Emerging Market expansio
Slide 25: No change to capital allocation priorities
TOTAL KRAFT HEINZ Q1 2022 BUSINESS UPDATE 25 No change to Invest for Growth Maintain Industry-Leading Capital Return capital allocation priorities, • Focused investments to accelerate • Ongoing commitment to current including growth and enhance long-term dividend commitment • Strong payout market po
Slide 26: Closing Commentary
CLOSING COMMENTARY Miguel Patricio Chief Executive Officer
Slide 27: Our transformation is gaining momentum
Q1 2022 BUSINESS UPDATE 27 Our transformation is gaining momentum Delivered a While And strong navigating advancing start short-term long-term to the year turbulence strategy
Slide 28: Appendix
APPENDIX Q1 2022 BUSINESS UPDATE 28
Slide 29: Non-GAAP Financial Measures
NON-GAAP FINANCIAL MEASURES Q1 2022 BUSINESS UPDATE 29 The non-GAAP financial measures provided in this presentation 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”).
Slide 30: Non-GAAP Financial Measures
NON—GAAP FINANCIAL MEASURES Q1 2022 BUSINESS UPDATE 30
Slide 31: Non-GAAP Financial Measures
NON—GAAP FINANCIAL MEASURES Q1 2022 BUSINESS UPDATE 31
Slide 32: Non-GAAP Financial Measures
NON—GAAP FINANCIAL MEASURES Q1 2022 BUSINESS UPDATE 32
Slide 33: Non-GAAP Financial Measures
NON—GAAP FINANCIAL MEASURES Q1 2022 BUSINESS UPDATE 33
Slide 34: Non-GAAP Financial Measures
NON—GAAP FINANCIAL MEASURES Q1 2022 BUSINESS UPDATE 34
Slide 35: Non-GAAP Financial Measures
NON—GAAP FINANCIAL MEASURES Q1 2022 BUSINESS UPDATE 35
Slide 36: Non-GAAP Financial Measures
NON—GAAP FINANCIAL MEASURES Q1 2022 BUSINESS UPDATE 36
Slide 37: Non-GAAP Financial Measures
NON—GAAP FINANCIAL MEASURES Q1 2022 BUSINESS UPDATE 37
Slide 38: Non-GAAP Financial Measures
NON—GAAP FINANCIAL MEASURES Q1 2022 BUSINESS UPDATE 38
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