The Kraft Heinz Company · NASDAQ:KHC
The Kraft Heinz — Q1 2021 Earnings Presentation
40 slides from The Kraft Heinz's earnings presentation, Apr 29, 2021
Slide 1: Q1 2021 Business Update
Q1 2021 BUSINESS UPDATE APRIL 29, 2021
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS Q1 2021 BUSINESS UPDATE 2 This presentation contains a number of forward-looking statements. Words such as “plan,” "believe," "anticipate," "reflect," "invest," "see," "make," "expect," "deliver," "drive," “improve,” “intend,” "assess," "remain," "evaluate," “establish,” “
Slide 3: Q1 2021 Business Update
Q1 2021 APRIL 29,BUSINESS 2021 UPDATE Q1 2021 BUSINESS UPDATE
Slide 4: We have begun 2021 with strong momentum across our brands and businesses
Q1 2021 BUSINESS UPDATE 4 We have begun 2021 with strong Solid start to the year… top line and momentum across 1 bottom line our brands and businesses Early 2021 plan wins positioning us 2 to accelerate our advantage Continuing to strengthen portfolio 3 while building financial flexibility
Slide 5: Solid start to the year, both top line and bottom line
TOTAL KRAFT HEINZ Q1 2021 BUSINESS UPDATE 5 Solid start to the year, both Constant Currency Organic Net Sales1 Adjusted EBITDA1 top line and bottom line 10.4% 9.7% 8.7% 2.5% Q1 vs. 2019 2 Q1 vs. 2020 Q1 vs. 2019 2 Q1 vs. 2020 1| Non-GAAP financial measure. See Appendix to this presentation for more
Slide 6: Our priority platforms and geographies continue to be our major growth engines
TOTAL KRAFT HEINZ Q1 2021 BUSINESS UPDATE 6 Q1 Organic Net Sales2 Our priority Q1 Net Sales Growth by Portfolio Role Growth vs. 2020 platforms and vs. 2020 vs. 20191 16% geographies (excl. continue to be ↑ Grow 4% 4% Foodservice) 12% our major ☀︎ Energize 4% 9% growth Total Emerging Markets engines
Slide 7: Driving a culture of creativity has never been more important
TOTAL KRAFT HEINZ Q1 2021 BUSINESS UPDATE 7 Driving a New program to Accelerate Creative Excellence culture of … surprise, delight, excite our consumers, as we move at the speed of culture creativity has never been more important at Kraft Heinz Consumer Platforms
Slide 8: Ops Center keeping net cost inflation to manageable levels
TOTAL KRAFT HEINZ Q1 2021 BUSINESS UPDATE 8 Ops Center Accelerating cost inflation remains manageable through a keeping combination of gross efficiencies and revenue management levers net cost inflation to Gross Cost Inflation manageable vs. Initial ̶ Cost pressures expected to build as Source level
Slide 9: Business Highlights
Q1 2021 BUSINESS UPDATE 9 BUSINESS HIGHLIGHTS
Slide 10: Strong 2021 start with balanced top- and bottom-line growth (United States)
UNITED STATES Q1 2021 BUSINESS UPDATE 10 Strong 2021 start with Constant Currency balanced top- Organic Net Sales1 Adjusted EBITDA1 and bottom- line growth 9.1% 12.4% 5.8% 2.5% Q1 vs. 2019 2 Q1 vs. 2020 Q1 vs. 2019 2 Q1 vs. 2020 1| Non-GAAP financial measure. See Appendix to this presentation for mo
Slide 11: Ramping up investments in equity-driven initiatives to drive consumer engagement
UNITED STATES Q1 2021 BUSINESS UPDATE 11 We are ramping Disruptive innovations Culturally relevant breakthrough campaigns up our investments in equity-driven Heinz flavor initiatives mash-ups to drive consumer engagement Philadelphia Velveeta viral social Heinz Cheesecake campaign Magic Every Day Cr
Slide 12: Continuing strong momentum with consumers
UNITED STATES Q1 2021 BUSINESS UPDATE 12 Continuing Total U.S. Household Penetration1 strong (Index Q1 2019 = 100) • Holding household penetration despite lapping significant momentum 104.5 104.5 panic buy in Q1 2020 with 100 consumers • Driving share growth in more categories Q1 2019 Q1 2020 Q1 202
Slide 13: New Partner Programs delivering wins across categories and channels
UNITED STATES Q1 2021 BUSINESS UPDATE 13 New Partner Programs JBPs driving better >90% Top retail customers with a delivering wins consumer-led programs joint business plan across and better execution agreement categories and channels “Definitely feel and see a different Kraft Heinz for the better…y
Slide 14: New Partner Programs delivering wins across categories and channels
UNITED STATES Q1 2021 BUSINESS UPDATE 14 New Partner Continued momentum in e-commerce, with largest Programs household penetration increase in Packaged Food1 delivering wins E-Commerce Household Penetration Change vs. Pre-COVID1 across 7.9% categories and channels 6.0% 6.0% 6.0% 6.0% 5.0% Kraft Hein
Slide 15: Agile Ops Center effectively managing disruptions while addressing capacity constraints
UNITED STATES Q1 2021 BUSINESS UPDATE 15 Our agile Agile response to U.S. Capacity expansion under way Ops Center is winter storm effectively % of Net Sales Constrained managing February Texas Storms disruptions, (20pp) while • Rapidly organized to triage situation continuing to • Mobilized end-to-e
Slide 16: Strong performance reflects strategy taking hold (International)
INTERNATIONAL Q1 2021 BUSINESS UPDATE 16 Strong performance Constant Currency reflects Organic Net Sales1 Adjusted EBITDA1 strategy taking 15.9% hold 10.2% 8.8% 2.7% Q1 vs. 2019 2 Q1 vs. 2020 Q1 vs. 2019 2 Q1 vs. 2020 1| Non-GAAP financial measure. See Appendix to this presentation for more informat
Slide 17: Strong momentum in priority platform: Taste Elevation
INTERNATIONAL Q1 2021 BUSINESS UPDATE 17 Starting 2021 with strong Q1 Net Sales for Retail Q1 Market Share1 momentum in Growth vs. 2020 Growth vs. 2020 our priority 1.1pp 19% Consumer Platform: Taste Elevation Taste Elevation Taste Elevation Countries holding or gaining 92% share in Taste Elevation1
Slide 18: Strong momentum in priority geographies: Emerging Markets
INTERNATIONAL Q1 2021 BUSINESS UPDATE 18 Starting 2021 Q1 Organic Net Sales1 Q1 Market Share2 Growth vs. 2020 Growth vs. 2020 with strong momentum in 16% 0.5pp our priority geographies: Emerging Markets Total Emerging Total Emerging Markets Markets +1.4pp Share2 Emerging market countries 75% holding
Slide 19: Financial Performance & Outlook
Q1 2021 BUSINESS UPDATE 19 FINANCIAL PERFORMANCE & OUTLOOK
Slide 20: Strong 2021 start with balanced top- and bottom-line growth (United States)
UNITED STATES Q1 2021 BUSINESS UPDATE 20 Organic Net Sales1 Q1 vs. 2020| Highlights Strong 2021 +1.6pp start with • Organic Net Sales growth driven by: balanced top- Price: Vol/Mix: 1.0pp 1.5pp + Retail inventory recovery versus prior year and bottom- 9.1% levels while consumption remained strong +
Slide 21: Solid Q1 performance as business momentum builds (Canada)
CANADA Q1 2021 BUSINESS UPDATE 21 Organic Net Sales1 Q1 vs. 2020| Highlights Solid Q1 performance as • Organic Net Sales growth reflects: business +5.0pp + Pricing gains in retail and foodservice channels momentum Price: 4.9pp + Retail inventory recovery more than offset Vol/Mix: (2.4)pp lower retai
Slide 22: Strong performance reflects strategy taking hold (International)
INTERNATIONAL Q1 2021 BUSINESS UPDATE 22 Organic Net Sales1 Q1 vs. 2020| Highlights Strong performance • Organic Net Sales growth driven by: reflects + Pricing in emerging and developed markets strategy taking 8.8% Price: Vol/Mix: 2.2pp 0.5pp + Developed market retail inventory recovery versus prior
Slide 23: Strong Q1 performance as broader benefits of our strategy take hold
TOTAL KRAFT HEINZ Q1 2021 BUSINESS UPDATE 23 Organic Net Sales1 → Inventory recovery, Adjusted EPS1 → Adjusted Strong Q1 sustained demand EBITDA1 growth performance as +1.5pp in retail channels, and pricing gains, and a lower effective tax rate broader benefits 8.7% Price: 1.5pp more than offset $0.
Slide 24: Investing to strengthen portfolio while building financial flexibility
TOTAL KRAFT HEINZ Q1 2021 BUSINESS UPDATE 24 Capital Expenditure Investing to $ millions $227 strengthen Focusing investments to $131 portfolio while support growth ~65% dedicated to capacity, we continue to replacement, or technology projects build financial Q1 2020 Q1 2021 flexibility Gross Debt $
Slide 25: Continue to expect durable gains versus pre-pandemic levels in Q2
TOTAL KRAFT HEINZ Q1 2021 BUSINESS UPDATE 25 Continue to Q2 2021 Organic Net Sales1 Q2 2021 Constant Currency expect durable Outlook2 Adjusted EBITDA1 Outlook2 gains versus pre-pandemic +1.3pp McCafé exit levels in Q2 +3.9pp Incentive compensation +1.4pp Canada cheese McCafé exit +2.3pp divestiture
Slide 26: Continue to expect 2021 financial results ahead of strategic plan
TOTAL KRAFT HEINZ Q1 2021 BUSINESS UPDATE 26 Continue to expect 2021 2020 2021 financial Reset Fully Deploy results ahead Foundation New Operating Model of our strategic plan Stronger-than-Plan $6.7B Performance + $6.1B At-Home Benefit 2021 2019 2020 Strategic Plan Adjusted Adjusted Adjusted EBITDA1
Slide 27: We have begun 2021 with strong momentum across our brands and businesses
Q1 2021 BUSINESS UPDATE 27 We have begun 2021 with strong Solid start to the year… top line and momentum across 1 bottom line our brands and businesses Early 2021 plan wins positioning us 2 to accelerate our advantage Continuing to strengthen portfolio 3 while building financial flexibility
Slide 28: Appendix
APPENDIX APRIL 29, 2021 Kraft Heinz,
Slide 29: Non-GAAP Financial Measures
NON-GAAP FINANCIAL MEASURES Q1 2021 BUSINESS UPDATE 29 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 presented in
Slide 30: Appendix
APPENDIX Q1 2021 BUSINESS UPDATE 30
Slide 31: Appendix
APPENDIX Q1 2021 BUSINESS UPDATE 31
Slide 32: Appendix
APPENDIX Q1 2021 BUSINESS UPDATE 32
Slide 33: Appendix
APPENDIX Q1 2021 BUSINESS UPDATE 33
Slide 34: Appendix
APPENDIX Q1 2021 BUSINESS UPDATE 34
Slide 35: Appendix
APPENDIX Q1 2021 BUSINESS UPDATE 35
Slide 36: Appendix
APPENDIX Q1 2021 BUSINESS UPDATE 36
Slide 37: Appendix
APPENDIX Q1 2021 BUSINESS UPDATE 37
Slide 38: Appendix
APPENDIX Q1 2021 BUSINESS UPDATE 38
Slide 39: Appendix
APPENDIX Q1 2021 BUSINESS UPDATE 39
Slide 40: Appendix
APPENDIX Q1 2021 BUSINESS UPDATE 40
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