The Kraft Heinz Company · NASDAQ:KHC
The Kraft Heinz — Q2 2020 Earnings Presentation
27 slides from The Kraft Heinz's earnings presentation, Jul 30, 2020
Slide 1: 2Q 2020 Update
KraftHeinz 2Q 2020 UPDATE JULY 30, 2020
Slide 2: Safe Harbor Statement
Safe Harbor Statement This webcast presentation contains a number of forward-looking statements. Words such as “plan,” "believe," "anticipate," "reflect," "invest," "make," "expect," "drive," “improve,” “intend,” "assess," "evaluate," “establish,” “focus,” “build,” “turn,” “expand,” “leverage,” "gro
Slide 3: Agenda for Today
Agenda for Today 1 2 3 Business 2Q’20 2020 Update Results Outlook Adapting to Stronger Raising our Consumer Needs… than Expected… Expectations… Leveraging Our New Even as We Solid Execution Operating Model Transform Our Keeps Us Cautiously Business Optimistic Insight into Our Transformation 3
Slide 4: Business Update
KraftHeinz 7 Business Update
Slide 5: Unprecedented Consumption Shifts… Successfully Learning Through the Journey
Business Update Unprecedented Consumption Shifts… United States Canada International Organic Net Sales1 6.4% 8.5% 6.7% 6.4% 6.9% 5.5% Growth Ex. McCafe +18% +16% +15% Retail +8% +10% +8% Performance2 May May May Q1 April + Q2 Q1 April + Q2 Q1 April + Q2 June June June Foodservice (3)% (12)% (5)% Per
Slide 6: Implementing, Leveraging Change… Emerging a Stronger Kraft Heinz
Business Update Implementing, Leveraging Change… Employees Consumers Customers Marketing Supply Chain • Focusing on • Actively modeling • Weekly insights, • Shifting dollars to • Driving greater health and safety multiple growth communication digital touchpoints throughput from scenarios with custom
Slide 7: U.S. Performance and Preparation
Business Update U.S. Performance and Preparation… What We've How We're Experienced Preparing • Optimizing our manufacturing capacity to meet • Implemented new U.S. structure to align the extraordinary demand organization to the strategy • Share negatively impacted by sustained, elevated • Designed n
Slide 8: U.S. Consumer Deep Dive… Household Penetration
Business Update U.S. Consumer Deep Dive… Household Penetration1 Repeat Rates New Buyer Demographic3 High 48% 89% 40% 10.6% 26.6% Household Small Large Size 65% 29.1% 21.5% Low Household Food & Beverage Avg. 16 Weeks Ending 16 Weeks Ending Income June 22, 2019 June 20, 2020 - 75% of our brands growin
Slide 9: 2Q'20 Results
KraftHeinz 2 20’20 Results
Slide 10: 2Q'20 Results In the United States
2Q’20 Results In the United States… Organic Net Sales1 Adjusted EBITDA1 Price: 2.3% Vol/Mix: 6.2% Price: 2.3% Vol/Mix: 5.2% +17.6% +8.5% +7.5% Growth Organic1 +12.2% Growth Organic1 Growth Growth Q2 2020 H1 2020 Q2 2020 H1 2020 • Volume/mix growth across most retail categories and • Q2 Adjusted EBIT
Slide 11: 2Q'20 Results In International
2Q’20 Results In International… Organic Net Sales1 Adjusted EBITDA1 Price: 2.2% +8.9% Price: 2.6% Vol/Mix: 4.0% +8.1% Vol/Mix: 2.9% Constant +6.2% Currency Constant +5.5% Growth Currency Organic1 Organic1 Growth Growth Growth Q2 2020 H1 2020 Q2 2020 H1 2020 • Q2 volume/mix driven by gains in condime
Slide 12: 2Q'20 Results In Canada
2Q’20 Results In Canada… Organic Net Sales1 Adjusted EBITDA1 +2.0% +2.0% Organic1 Organic1 +2.4% Growth Growth Price: 1.3% Price: (2.3)% Constant +(18.6)% Vol/Mix: 0.7% Vol/Mix: 4.3% Currency Constant Ex Divestiture Currency Growth Ex Divestiture Growth Q2 2020 H1 2020 Q2 2020 H1 2020 • Positive vol
Slide 13: 2Q'20 Consolidated Summary
2Q’20 Consolidated Summary Net Sales Adjusted EBITDA1 +7.4% +3.8% +13.6% +12.4% Organic Net Sales Excluding foreign growth driven by $217 currency and (2.1)% $465 strong retail (1.2)% divestiture, each $(127) (1.5)% $6,648 takeaway and $1,799 business segment $(18)) $(63) $6,406 $(96) at-home report
Slide 14: 2020 Outlook
KraftHeinz 3 2020 Outlook 14
Slide 15: 2020 Outlook: Raising Our Expectations
2020 Outlook Raising Our Expectations… Operations Growth Profitability Capital • Turnaround on Track • Expect H1 to Benefit Full Year • Upside for full year • Strengthening Balance Sheet - No pause in initiatives: - Cautiously optimistic on - H1 upside versus previous - Strengthened conservative bus
Slide 16: Thank You
KraftHeinz THANK YOU July 30, 2020
Slide 17: Appendix: Non-GAAP Financial Measures
Appendix 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 presented in this press release
Slide 18: Appendix: Condensed Consolidated Statements of Operations
5 kk £2? Appendix ‘Schedule 1 The Kraft Heinz Company (in millions, except per share (Unaudited For the Three Months Ended For the Six Months Ended June 27, 2020 June 29, 2019 June 27,2020 June 29, 2019 Cost of products sold 4,196 4,324 8,495, 8,272 Selling, general and administrative expenses, excl
Slide 19: Appendix: Reconciliation of Net Sales to Organic Net Sales
e Appendix Schedule 2 oof Net Saas Open Reconciliation of Net Sales to Net Sales For the Three Months Ended (dollars in millions) (Unaudited) ‘Acquisitions: Net Sales Divesttures '"éslse"* Price __Volume/ix United States $ 4917 $ — Ss — $ 4917 Canada 426 (15) _ 441 S664 S69) SS SET June 29, 2019 Uni
Slide 20: Appendix
e Appendix : | : i $ 9412 $ — $s — $ 9,412 g 787 21) I 1,010 = 218 i i 7.5% 0.0 pp 0.0 pp 75% 2.3 pp 5.2 pp g (22.1)% (2.2)pp (21.9) pp 20% (2.3)pp 4.3 pp KraftHeinz 20
Slide 21: Appendix: Reconciliation of Net Income to Adjusted EBITDA
> Appendix ‘Schedule 4 Reconciliation of Net Income saz) to Abjusted EBITDA (olsre ms tiions) (Unaudited) For the Three Months Ended For the Six Months Ended Interest expense Provision for/(benefit from) income taxes integration and restructuring © ancora)” Adjusted EBITDA ‘Segment Adjusted EBITDA:
Slide 22: Appendix: Adjusted EBITDA to Constant Currency Adjusted EBITDA
e Appendix Schedule 5 Reconciliation of Adjusted EBITDA te Consent Currency Adjusted EBITDA For the Three Months Ended (dollars in millions) (Unaudited) Constant ¢ Adjusted EBITDA Currency ‘Adjusted United States $ 1,478 $ — $ 1,478 International 12) 287 Canada 110 (3) 113 len len a len ee 2 June 29
Slide 23: Appendix: Constant Currency Adjusted EBITDA, Six Months
e Appendix The Kraft Heinz Company Reconciliation of Adjusted EBITDA to Constant Currency Adjusted EBITDA For the Six Months Ended (dollars in millions) (Unaudited) i ; 2,687 $ | o x g R 3 3 $ 3,214 $ len eo iS & June 29, 2019 i 8 2 General corporate expenses 134) _ (134) / f | 0.0 pp 8 wb xz : = g
Slide 24: Appendix: Reconciliation of Diluted EPS to Adjusted EPS
Schedule? KraftHeinz Appendix Reconciliation of Dited EPS EPS (Unaudited) For the Three Months Ended For the Six Months Ended June 27,2020 June 29,2019 June 27,2020 June 29, 2019 Diluted EPS S$ (135 $ O37 $ (1.04S 070 Integration and restructuring expenses = 0.01 = 0.02 Deal costs”? - - - 0.01 Unrea
Slide 25: Appendix: Condensed Consolidated Balance Sheets
e Appendix | i : Cash and cash equivalents $ 2812 $ 2.279 w Ky a 2,721 Other current assets g 618 Total current assets 8,776 8,097 8 2 2 ry 8 g Other non-current assets 2.241 2,100 LIABILITIES AND EQUITY Current portion of long-term debt 787 1,022 Accrued marketing 938 g Other current liabilities 2,
Slide 26: Appendix: Condensed Consolidated Statements of Cash Flow
Appendix ‘Schedule 9 The Kraft Heinz Company Condensed Consolidated Statements of Cash Flow {in millions) (Unaudited) For the Six Months Ended | (1271) $ g | | Equly award compensation expense 73 5 | Deferted income tax provisiombeneft) 488) HO benefit plan contributions (15) (13) Nonmonetary curren
Slide 27: Appendix: Reconciliation to Free Cash Flow
Appendix ‘Schedule 10. The Kraft Heinz Company Reconciaon of Net Cash Provided By/(Used for} ‘Operating Activities to Free Cash Flow (in millions} (Unaudited) For the Six Months Ended ‘June 27,2020 June 29, Net cash provided by/(used for) operating activities $ 2,216 $ Capital expenditures (258) (44
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