The Kraft Heinz Company · NASDAQ:KHC
The Kraft Heinz — Q4 2020 Earnings Presentation
41 slides from The Kraft Heinz's earnings presentation, Feb 11, 2021
Slide 1: Q4 2020 Business Update
Q4 2020 BUSINESS UPDATE Q4 2020 February 11 A NEW MODEL BUSINESS UPDATE 2021 FOR GROWTH
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS Q4 2020 BUSINESS UPDATE 2 This presentation contains a number of forward-looking statements. Words divestitures, joint ventures or other investments; the Company's ability to factors, as they may be amended from time to time, set forth in its filings such as “plan,” "belie
Slide 3: Investor Day
INVESTOR FEBRUARYDAY 11 2020 2021 Q4 2020 BUSINESS UPDATE
Slide 4: 2020 Performance Reflects the Power and Potential of Scale + Agility
OVERVIEW Q4 2020 BUSINESS UPDATE 4 2020 PERFORMANCE → Rapid progress in first year of REFLECTS THE transformation POWER AND → Stronger-than-anticipated results POTENTIAL OF continued in Q4 SCALE + AGILITY → Broad-based brand and business momentum heading into 2021 → Strong liquidity and agile portfo
Slide 5: We set specific goals in each aspect of our new operating model
OVERVIEW Q4 2020 BUSINESS UPDATE 5 We set specific Fully goals in each Reset Deploy New Transition Accelerate 2020 Foundation 2021 2022 2023 Growth aspect of our Operating to Growth new operating Model model for the first year of our PEOPLE WITH PURPOSE multi-year REJUVENATE talent, expertise and ES
Slide 6: We rediscovered agility in 2020, making strides in key areas
2020 HIGHLIGHTS Q4 2020 BUSINESS UPDATE 6 We rediscovered Top Quartile Forbes World’s Best Employers 2020 (unranked in 2018, 2019) agility in 2020, PEOPLE WITH 5pp Improvement in employee turnover1 making strides in PURPOSE key areas as we MSD% Reduction in waste, water, and energy use per ton respo
Slide 7: Priority consumer platforms and priority geographies led our growth
PLATFORM PERFORMANCE Q4 2020 BUSINESS UPDATE 7 2020 Net Sales Growth by Portfolio Role 2020 International Segment Priority Organic Net Sales1 Growth consumer ↑ Grow 6% 15% (ex. foodservice) platforms and 7% priority ☀︎ Energize 9% geographies led 3% Total 5% our growth Developed Emerging % of 2020 N
Slide 8: Financial Performance
FINANCIAL PERFORMANCE Q4 2020 BUSINESS UPDATE 8 Organic Net Sales1 → Strong retail sales Adjusted EPS1 → Growth was held Price: Vol/Mix: 3.1pp 3.4pp Price: Vol/Mix: 4.8pp 1.2pp growth, partially back by a +0.8pp offset by ~$(0.37) impact +1.4pp foodservice 11.1% below Adjusted 6.5% 6.0% declines and
Slide 9: Business Segment Performance
INVESTOR DAY 2020 Q4 2020 BUSINESS UPDATE BUSINESS SEGMENT PERFORMANCE
Slide 10: United States Review: Financial Performance
UNITED STATES REVIEW: FINANCIAL PERFORMANCE Q4 2020 BUSINESS UPDATE 10 HIGHLIGHTS Organic Net Sales1 • Q4 volume/mix performance reflected continued at- Price: 3.5pp Price: 5.2pp Vol/Mix: 4.1pp Vol/Mix: 2.8pp home consumption growth across all consumer platforms that was partially offset by the nega
Slide 11: We are rebuilding brand strength, with market share improving
UNITED STATES REVIEW: CONSUMER PLATFORMS Q4 2020 BUSINESS UPDATE 11 We are L52 Household Penetration Growth1 % of Net Sales Growing Market Share1 rebuilding brand by Platform strength, with +27pp market share Improvement improving and solid household 47% +0.9pp gains across 37% 20% priority consumer
Slide 12: We are fueling our growth through greater, more efficient marketing spend
UNITED STATES REVIEW: FUEL OUR GROWTH Q4 2020 BUSINESS UPDATE 12 We are fueling Media Investment Marketing Investment our growth 2019 vs 2020 2019 vs 2020 through greater, +24% +27% +18% more efficient (10)% marketing +40% +4% +11% +40% spend and reallocation of brand investments consistent with Dig
Slide 13: We are driving efficiency through simplification and waste reduction
UNITED STATES REVIEW: OPS CENTER Q4 2020 BUSINESS UPDATE 13 We are driving SKU Count Waste1 Customer Fill Rate efficiency through (16)% (25)% best-in-class simplification and waste reduction, but improving 90% service levels remains an opportunity 2019 2020 2019 2020 2019 2020 → Moving to simplify →
Slide 14: Canada Review: Financial Performance
CANADA REVIEW: FINANCIAL PERFORMANCE Q4 2020 BUSINESS UPDATE 14 HIGHLIGHTS Organic Net Sales1 Price: 2.2pp Price: 7.9pp • Excluding the negative impact of the McCafé business Vol/Mix: (2.3)pp Vol/Mix: (11.0)pp exit, Organic Net Sales growth was driven by positive pricing and retail gains in Grow pla
Slide 15: We are turning around Canada through platform-based prioritization
CANADA REVIEW: 2020 HIGHLIGHTS Q4 2020 BUSINESS UPDATE 15 We are turning Grow Portfolio Marketing + Selling Innovation around Canada 2020 Consumption Growth1 % of Net Sales Hazelnut Spread Market Share1 through +1.0pp +97bps 17.1% platform-based Share Growth prioritization, more marketing, and targe
Slide 16: International Review: Financial Performance
INTERNATIONAL REVIEW: FINANCIAL PERFORMANCE Q4 2020 BUSINESS UPDATE 16 Organic Net Sales1 HIGHLIGHTS • Q4 Organic Net Sales growth despite deceleration in Price: 2.1pp Price: 2.0pp Vol/Mix: 2.6pp Vol/Mix: (0.1)pp developed markets, as emerging markets sustained strong momentum • Q4 volume/mix driven
Slide 17: We are building momentum by accelerating key markets
INTERNATIONAL REVIEW: 2020 HIGHLIGHTS Q4 2020 BUSINESS UPDATE 17 We are building Accelerated Retail Net Sales Taste Elevation Share Growth2 Disproportionately momentum by Growth in Strategic Areas in Focus Markets Investing accelerating key markets, +1.1pp 3.3 3.5 extending 15% 15% Share Growth 61%
Slide 18: Financial Outlook
INVESTOR DAY 2020 Q4 2020 BUSINESS UPDATE FINANCIAL OUTLOOK
Slide 19: Financial Outlook
FINANCIAL OUTLOOK Q4 2020 BUSINESS UPDATE 19 Expect flat-to-positive Organic Net Sales1 growth and Fully Q1 2021 low-single-digit Constant Currency Adjusted EBITDA1 growth Reset Deploy New 2020 Foundation 2021 Operating → Q1 2020 included ~6–7pp Organic Net Sales, ~9–10pp Adjusted Model EBITDA contr
Slide 20: Financial Outlook: Net Leverage and Maturity Profile
FINANCIAL OUTLOOK Q4 2020 BUSINESS UPDATE 20 We are on track Key Stats Maturity Profile1 to consistently 3.4B maintain net leverage below 4.0x prior to any 3.7x Q4 2020 net leverage divestiture proceeds 14 years Weighted average maturity 1.4B 4.3% 1.0B 0.7B Weighted annual interest cost 95%+ 0.2B Fi
Slide 21: Agile Portfolio Management
INVESTOR DAY 2020 Q4 2020 BUSINESS UPDATE AGILE PORTFOLIO MANAGEMENT
Slide 22: Divesting our nuts business: Key Stats
AGILE PORTFOLIO MANAGEMENT Q4 2020 BUSINESS UPDATE 22 Divesting our Key Stats Brands Involved nuts business will be another ~$3.35B momentous Anticipated pre-tax proceeds step in our rapid transformation ~$1.1B Fiscal 2020 net sales of businesses sold ~15x Strategic Benefits 2020 standalone Adjusted
Slide 23: Divestitures accelerate strategy and enhance portfolio
AGILE PORTFOLIO MANAGEMENT Q4 2020 BUSINESS UPDATE 23 ✓ ✓ Accelerates Enhances Strategy Geographic Profile ✓+40bp uplift to ✓98% of divested businesses Natural Cheese historical Organic in developed markets Net Sales1 growth and Nuts divestitures will ✓ strengthen our Sharpens Focus on ✓ portfolio a
Slide 24: Divestiture proceeds will enable us to accelerate our transformation
AGILE PORTFOLIO MANAGEMENT Q4 2020 BUSINESS UPDATE 24 Divestiture Invest for Maintain Reduce net Agile portfolio proceeds will growth industry- leverage to management enable us to leading capital increase accelerate our return flexibility, transformation optionality through accretive investments and
Slide 25: 2020 Performance Reflects the Power and Potential of Scale + Agility
SUMMARY Q4 2020 BUSINESS UPDATE 25 2020 PERFORMANCE → Rapid progress in first year of REFLECTS THE transformation POWER AND → Stronger-than-anticipated results POTENTIAL OF continued in Q4 SCALE + AGILITY → Broad-based brand and business momentum heading into 2021 → Strong liquidity and agile portfo
Slide 26: Appendix
Q4 2020 BUSINESS UPDATE APPENDIX
Slide 27: Net Sales Growth by Platform
Appendix Q4 2020 BUSINESS UPDATE 27 Net Sales Growth % of 2020 Platform Zone Role Net Sales Q4 vs. PY FY vs PY Taste Elevation 27% +3% +3% ↑ Taste Elevation (ex. foodservice) 21% +14% +16% Easy Meals Made Better ↑ / ☀︎ 19% +10% +14% Real Food Snacking / ↑ 9% +10% +4% Fast Fresh Meals / ☀︎ 25% +13% +
Slide 28: Non-GAAP Financial Measures
Non-GAAP Financial Measures Q4 2020 BUSINESS UPDATE 28 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 29: Appendix
Appendix Q4 2020 BUSINESS UPDATE 29
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Appendix Q4 2020 BUSINESS UPDATE 30
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Appendix Q4 2020 BUSINESS UPDATE 31
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Appendix Q4 2020 BUSINESS UPDATE 32
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Appendix Q4 2020 BUSINESS UPDATE 33
Slide 34: Appendix
Appendix Q4 2020 BUSINESS UPDATE 34
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Appendix Q4 2020 BUSINESS UPDATE 35
Slide 36: Appendix
Appendix Q4 2020 BUSINESS UPDATE 36
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Appendix Q4 2020 BUSINESS UPDATE 37
Slide 38: Appendix
Appendix Q4 2020 BUSINESS UPDATE 38
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Appendix Q4 2020 BUSINESS UPDATE 39
Slide 40: Appendix
Appendix Q4 2020 BUSINESS UPDATE 40
Slide 41: Appendix
Appendix Q4 2020 BUSINESS UPDATE 41
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