The Kraft Heinz Company · NASDAQ:KHC
The Kraft Heinz — Q1 2024 Earnings Presentation
27 slides from The Kraft Heinz's earnings presentation, May 1, 2024
Slide 1: Q1 2024 Business Update
MAY 1, 2024 Q1 2024 BUSINESS UPDATE
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS MAY 1, 2024 This presentation contains a number of forward-looking statements as defined under U.S. federal securities laws, including, but not limited to, statements, estimates, and projections relating to our business and long-term strategy; our ambitions, goals, targets
Slide 3: Business & Strategy Update
Q1 2024 Business Update Q1 2024 Business & Strategy Update Chief Executive Officer CARLOS ABRAMS-RIVERA
Slide 4: Q1 consolidated results in line with expectations
Q1 2024 Business Update • With growth across our three strategic pillars and continued sequential volume recovery, Q1 consolidated results were in line with expectations. • We continue to execute our strategic agenda as we successfully unlock gross efficiencies, driving gross margin expansion and fu
Slide 5: Q1 Results in line with Expectations; Margin Expansion Driving Profit Growth
Q1 Results in line with Expectations; Margin Expansion Driving Profit Growth Q1 2024 Business Update Total Kraft Heinz ($ Millions) Q1 2024 Q1 vs PY Organic Net Sales1 $6,410 (0.5%) Adjusted Gross Profit Margin1 34.5% +170 bps Adjusted Operating Income1 $1,265 +1.7% Adjusted EPS1 $0.69 +1.5% Q1 Expe
Slide 6: Successfully Executing our Strategic Agenda to Deliver Consistent Profitable Growth
Successfully Executing our Strategic Agenda to Deliver Consistent Profitable Growth Q1 2024 Business Update UNLOCK REINVEST POWER DRIVE TOP LINE EFFICIENCIES IN THE BUSINESS SUPERIOR BRANDS Through our Growth Pillars Expanding Gross Margins Fueling Reinvestment With Brand Superiority & Innovation 6
Slide 7: Top Line Drivers Building Momentum
Top Line Drivers Building Momentum DRIVE TOP LINE 1 Three growing Organic Net Sales1 2 improving sequentially 3 deploying strategy outlined at CAGNY 4 Gaining or recovering across all segments 1| Non-GAAP financial measure. See the accompanying Non-GAAP Information and Reconciliations at ir.krafthei
Slide 8: Three Strategic Pillars Growing Organic Net Sales
Three Strategic Pillars Growing Organic Net Sales DRIVE TOP LINE Strategic Pillars Organic Net Sales1 Q1 ‘24 vs PY • Includes priority spaces Taste Elevation, Easy N.A. Retail Ready Meals and Substantial Snacking ACCELERATE Platforms +0.5% • Driving outsized top-line growth and generating higher gro
Slide 9: Volume Continues to Improve Sequentially
Volume Continues to Improve Sequentially DRIVE TOP LINE Volume / Mix vs PY (3.2pp) (4.4pp) (5.3pp) (5.4pp) (7.0pp) +120bps Q1 '23 Q2 '23 Q3 '23 Q4 '23 Q1 '24 Pricing Action, SNAP Reduction Supply Recovery, Increased Marketing, Joint Business Plan Execution and Innovation Ramp Up 9
Slide 10: Portfolio Roles Deploying Strategy Outlined at CAGNY
Portfolio Roles Deploying Strategy Outlined at CAGNY DRIVE TOP LINE Total Kraft Heinz Organic Net Sales1 growth driven by ACCELERATE platforms … ROLES ACCELERATE PROTECT BALANCE2 Taste Elevation Meats Desserts PLATFORMS Easy Ready Meals Cheese Hydration Substantial Snacking Coffee ORGANIC NET SALES1
Slide 11: Gaining or Improving Share Across All Segments
Gaining or Improving Share Across All Segments DRIVE TOP LINE North America Retail U.S. Away from Home International Developed Retail Emerging Markets Retail Dollar Share1 vs PY Dollar Share2 vs PY Dollar Share1 vs PY Dollar Share1,3 vs PY +60bps (0.7pp) (0.3pp) (1.2pp) (0.4pp) 0.9pp 0.4pp 0.4pp 0.3
Slide 12: Efficiency Generation Enabling Reinvestment in the Business
Efficiency Generation Enabling Reinvestment in the Business UNLOCK EFFICIENCIES UNLOCK REINVEST EFFICIENCIES IN THE BUSINESS Unlocking gross efficiencies to continue to … to fuel investments in SG&A and drive gross margin expansion … Capital Expenditures. Adjusted Gross Profit Margin1 Increase in Sp
Slide 13: On Track to Deliver $2 Billion of Net Sales from Innovation
On Track to Deliver $2 Billion of Net Sales1 from Innovation POWER SUPERIOR BRANDS Developing Technology-Driven Platforms … Evolving our Core Offerings … … with exclusive intellectual property like 360CRISPTM and HEINZ REMIX. … to meet changing consumers’ needs and grow Heinz beyond Ketchup. Expandi
Slide 14: Raising the Bar to Deliver for Our Customers and Consumers
Raising the Bar to Deliver for Our Customers and Consumers POWER SUPERIOR BRANDS Disruptive Brand Build an everlasting Set the standard for connection with our performance, taste, consumers sustainability, and nutrition Offer value that uniquely meets Drive consistent consumer and availability along
Slide 15: Kraft Heinz Well Positioned Despite Short Term Volatility
Kraft Heinz Well Positioned Despite Short Term Volatility Q1 2024 Business Update Short-Term Global consumer Moderating but Volume headwinds Industry softness Increased pressure remains pressured persistent inflation from SNAP reduction in Away From Home on supply chains Kraft Heinz Well Positioned
Slide 16: Enabled with a Structure That Supports our Strategy
Enabled with A Structure That Supports our Strategy Q1 2024 Business Update North America Global Growth Office PEDRO NAVIO Updated structure EVP & President, supports our strategy DIANA FROST North America Global Chief Growth Officer Europe and Pacific Developed Markets (EPDM) Global Growth and Omni
Slide 17: Business & Strategy Update
Q1 2024 Business Update Q1 2024 Business & Strategy Update Global Chief Financial Officer ANDRE MACIEL
Slide 18: Organic Net Sales in line with Expectations, with Sequential Volume Improvement
Organic Net Sales in line with Expectations, with Sequential Volume Improvement Q1 2024 Business Update Organic Q1 24 vs Q1 23 Net Sales 1 Price Volume / Mix Total Kraft Heinz (0.5%) 2.7pp (3.2pp) • Sequential volume improvement of ~120bps, from (4.4pp) in Q4 23 to (3.2pp) in Q1 24 • Remained discip
Slide 19: Adjusted Operating Margins Expanding 50bps, Driven by Efficiencies
Adjusted Operating Margins Expanding 50bps, Driven by Efficiencies Q1 2024 Business Update Adjusted Constant Currency Adjusted Operating Adj. Operating Operating Income Q1 24 vs Q1 23 Income 1 Currency Income 1 Margin1 Total Kraft Heinz 1.7% (0.5pp) 2.2% 19.7% • Expansion a result of unlocked effici
Slide 20: Continued Disciplined Approach to Pricing and Promotions
Continued Disciplined Approach to Pricing and Promotions Q1 2024 Business Update Disciplined on Disciplined on % FY24 Expected Price Implemented % U.S. Q1 Volume Sold on Promotion1 • Volume sold on Q1 ‘24 vs Q1 ‘192 North America promotion remains below 2019 levels Kraft Heinz International Develope
Slide 21: End-to-End Efficiencies Generating Margin Expansion and Fueling Reinvestment
End-to-End Efficiencies Generating Margin Expansion and Fueling Reinvestment … Q1 2024 Business Update Supply Chain Efficiencies Adjusted Gross Profit Margin1 Investments in the Business Gross Efficiencies Increase in Spend (% COGS) +170bps Q1 vs PY Best in 4.0% Class 34.5% 3.0% Marketing2 +13% 2.0%
Slide 22: While Improving Cash Flow and Profitability
… While Improving Cash Flow and Profitability Q1 2024 Business Update Free Cash Flow Conversion1 Capital Expenditures ($M) Adjusted EPS1 +30pp +10% +1.5% 56% $294 $0.69 $266 26% $0.68 Q1 '23 Q1 '24 Q1 '23 Q1 '24 Q1 '23 Q1 '24 Improvement driven by a 57% Increased investments in CapEx vs Q1 2023 redu
Slide 23: Strengthened Balance Sheet while Returning Capital to Stockholders
Strengthened Balance Sheet while Returning Capital to Stockholders Q1 2024 Business Update Capital Allocation in Place Competitive Target Leverage Ratio of Maintain Annual Dividend Approximately 3.0x Investment Grade Maintained Net Leverage Returning Incremental Capital Target of ~3.0x to Stockholde
Slide 24: Reaffirming Full Year 2024 Outlook
Reaffirming Full Year 2024 Outlook Q1 2024 Business Update 2024 FYE Outlook 2024 Considerations • Positive contribution from price throughout the year Organic Net Sales1 +0-2% • Volume inflection to positive growth expected in H2 • Expect to reach levels in line with our long-term algorithm by Q4 •
Slide 25: 2024 Outlook Considerations
2024 Outlook Considerations Q1 2024 Business Update Q2 2024 H2 2024 • North America Retail and Emerging Markets • North America Retail to benefit from fully lapping improve versus Q1 SNAP reduction and ramp up of innovation and renovation • Global Away From Home declines slightly due to: • Emerging
Slide 26: Business & Strategy Update
Q1 2024 Business Update Q1 2024 Business & Strategy Update Chief Executive Officer CARLOS ABRAMS-RIVERA
Slide 27: Q1 consolidated results in line with expectations
Q1 2024 Business Update • With growth across our three strategic pillars and continued sequential volume recovery, Q1 consolidated results were in line with expectations. • We continue to execute our strategic agenda as we successfully unlock gross efficiencies, driving gross margin expansion and fu
The Kraft Heinz Company — Q1 2024 Earnings Presentation on 6ix