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FOR IMMEDIATE RELEASE

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Wednesday, October 30, 2024 7:00 AM

Kraft Heinz Reports Third Quarter 2024 Results

Narrows Full Year Outlook for Organic Net Sales (1)(2) , Adjusted Operating Income (1)(2) , and Adjusted EPS (1)(2)

Third Quarter Highlights

  • Net sales decreased 2.8%; Organic Net Sales (1) decreased 2.2%
  • Gross profit margin increased 20 basis points to 34.2%; Adjusted Gross Profit Margin (1) increased 30 basis points to 34.3%
  • Operating income decreased 115.5%, driven by non-cash impairment losses of $1.4 billion; Adjusted Operating Income (1) increased 1.4%
  • Diluted EPS was $(0.24), down 214.3%; Adjusted EPS (1) was $0.75, up 4.2%
  • Year-to-date net cash provided by operating activities was $2.8 billion, up 6.7%; Free Cash Flow (1) was $2.0 billion, up 9.7%
  • Year-to-date return of capital to stockholders was $2.0 billion

The Kraft Heinz Company (Nasdaq: KHC) (“Kraft Heinz” or the “Company”) today reported financial results for the third quarter of 2024.

“In the third quarter, our top-line performance across two of our strategic pillars, Global Away From Home and Emerging Markets, grew in line with our expectations,” said Kraft Heinz CEO Carlos Abrams-Rivera. “As we look forward, we are expecting continued momentum in these two pillars. When we look at our U.S. Retail business, we are expecting more of an elongated recovery, driven by specific categories that continue to experience pressure.”

“We continue to make investments in marketing, research and development, and technology as we look to bring solutions to the table that both create value for our consumers and support future top-line growth. We are supporting these investments by our proven ability to sustainably unlock efficiencies and generate strong cash flow.”

Abrams-Rivera continued, “While a recovery is taking longer than originally anticipated, we are not losing sight of our long-term strategy. We remain confident in our ability to drive profitable growth, generate strong cash flow, and return capital to our stockholders.”

Net Sales

In millions

 

 

Net Sales

 

Organic Net Sales (1)

 

 

September 28,
2024

 

September 30,
2023

 

% Chg vs
PY

 

YoY Growth
Rate

 

Price

 

Volume/
Mix

For the Three Months Ended

 

 

 

 

 

 

 

 

 

North America

 

$

4,826

 

$

4,995

 

(3.4)%

 

(3.2)%

 

1.2 pp

 

(4.4) pp

International Developed Markets

 

 

882

 

 

883

 

(0.2)%

 

(1.8)%

 

(1.0) pp

 

(0.8) pp

Emerging Markets (a)

 

 

675

 

 

692

 

(2.4)%

 

4.9%

 

3.8 pp

 

1.1 pp

Kraft Heinz

 

$

6,383

 

$

6,570

 

(2.8)%

 

(2.2)%

 

1.2 pp

 

(3.4) pp

 

Net Sales

In millions

 

 

Net Sales

 

Organic Net Sales (1)

 

 

September 28,
2024

 

September 30,
2023

 

% Chg vs
PY

 

YoY Growth
Rate

 

Price

 

Volume/
Mix

For the Nine Months Ended

 

 

 

 

 

 

 

 

 

North America

 

$

14,575

 

$

14,959

 

(2.6)%

 

(2.5)%

 

1.6 pp

 

(4.1) pp

International Developed Markets

 

 

2,622

 

 

2,675

 

(2.0)%

 

(2.4)%

 

(0.1) pp

 

(2.3) pp

Emerging Markets (a)

 

 

2,073

 

 

2,146

 

(3.4)%

 

4.6%

 

3.3 pp

 

1.3 pp

Kraft Heinz

 

$

19,270

 

$

19,780

 

(2.6)%

 

(1.7)%

 

1.6 pp

 

(3.3) pp

(a)

Emerging Markets represents the aggregation of our West and East Emerging Markets (“WEEM”) and Asia Emerging Markets (“AEM”) operating segments.

 

Net Income/(Loss) and Diluted EPS

In millions, except per share data

 

 

For the Three Months Ended

 

For the Nine Months Ended

 

 

September 28,
2024

 

September 30,
2023

 

% Chg vs
PY

 

September 28,
2024

 

September 30,
2023

 

% Chg vs
PY

Gross profit

 

$

2,186

 

$

2,235

 

(2.2)%

 

$

6,723

 

$

6,609

 

1.7%

Operating income/(loss)

 

 

(101)

 

 

653

 

(115.5)%

 

 

1,723

 

 

3,272

 

(47.3)%

Net income/(loss)

 

 

(290)

 

 

254

 

(214.2)%

 

 

614

 

 

2,089

 

(70.6)%

Net income/(loss) attributable to common shareholders

 

 

(290)

 

 

262

 

(210.7)%

 

 

613

 

 

2,098

 

(70.8)%

Diluted EPS

 

$

(0.24)

 

$

0.21

 

(214.3)%

 

$

0.50

 

$

1.70

 

(70.6)%

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EPS (1)

 

 

0.75

 

 

0.72

 

4.2%

 

 

2.22

 

 

2.20

 

0.9%

Adjusted Operating Income (1)

 

$

1,330

 

$

1,312

 

1.4%

 

$

3,975

 

$

3,908

 

1.7%

Q3 2024 Financial Summary

  • Net sales decreased 2.8 percent versus the year-ago period to $6.4 billion, including a negative 0.4 percentage point impact from foreign currency and a negative 0.2 percentage point impact from divestitures. Organic Net Sales (1) decreased 2.2 percent versus the prior year period. Price increased 1.2 percentage points versus the prior year period, with increases in the North America and Emerging Markets segments partially offset by lower price in International Developed Markets. Favorable price was primarily due to pricing taken in certain categories to mitigate higher input costs. Volume/mix declined 3.4 percentage points versus the prior year period, with declines in the North America and International Developed Markets segments partially offset by volume/mix growth in Emerging Markets. Unfavorable volume/mix was primarily driven by continued shifts in consumer behavior due to economic uncertainty and a decline in Lunchables .
  • Operating Income decreased 115.5 percent versus the year-ago period to $(0.1) billion, as a result of non-cash impairment losses of $1.4 billion in the current year period. This impairment charge was due to an intangible asset impairment largely on the Lunchables brand and a goodwill impairment related to the Continental Europe reporting unit. Excluding the impact of these non-cash impairment losses, operating income increased $12 million due to factors noted in Adjusted Operating Income. Adjusted Operating Income (1) increased 1.4 percent versus the year-ago period to $1.3 billion, primarily driven by higher pricing, the beneficial impact from our efficiency initiatives mostly in procurement, and lower variable compensation expense. These factors more than offset unfavorable volume/mix, increased manufacturing expenses due in part to increased labor costs, and an unfavorable impact from foreign currency (0.2 pp).
  • Diluted EPS decreased 214.3 percent versus the prior year period to $(0.24), driven by non-cash impairment losses in the current year period. Adjusted EPS (1) was $0.75, up 4.2 percent versus the prior year period, primarily driven by higher Adjusted Operating Income, fewer shares outstanding, and lower taxes on adjusted earnings.
  • Year-to-date net cash provided by/(used for) operating activities was $2.8 billion, up 6.7 percent versus the year-ago period. This increase was primarily due to favorable changes in working capital driven by accounts payable and the lapping of prior year cash payments associated with the settlement of the consolidated securities class action lawsuit, which were partially offset by higher cash outflows from inventory and variable compensation in the 2024 period compared to the 2023 period. Further, net cash by operating activities was favorably impacted by increased Adjusted Operating Income. Free Cash Flow (1) was $2.0 billion, up 9.7 percent versus the prior year period, driven by the same net cash provided by/(used for) operating activities discussed above.
  • Capital Return: Year to date, the Company paid $1.5 billion in cash dividends and repurchased $538 million of common stock. Of the $538 million in share repurchases in 2024, $350 million were repurchased under the Company’s publicly announced share repurchase program and $188 million were purchased to offset the dilutive effect of equity-based compensation. As of Sept. 28, 2024, the Company had remaining authorization to repurchase approximately $2.4 billion of common stock under the publicly announced share repurchase program.

Outlook

For fiscal year 2024, the Company now expects:

  • Organic Net Sales (2) to be at the low end of the previous guidance range of down 2 percent to flat versus the prior year.
  • Adjusted Operating Income (2) growth to be at the low end of the previous guidance range of 1 to 3 percent versus the prior year. This also contemplates expected Adjusted Gross Profit Margin (1)(2) expansion at the lower end of the previous range of 75 to 125 basis points versus the prior year.
  • Adjusted EPS (2) growth to be at the low end of the previous guidance range of 1 to 3 percent, or in the range of $3.01 to $3.07. The Company expects an effective tax rate on Adjusted EPS to be approximately 21 percent. Additionally, the Company expects interest expense and other expense/(income) to be relatively flat versus the prior year. This guidance does not reflect any impact from future potential share repurchases.

End Notes

(1)

Organic Net Sales, Adjusted Gross Profit, Adjusted Gross Profit Margin, Adjusted Operating Income, Adjusted EPS, and Free Cash Flow are non-GAAP financial measures. Please see discussion of non-GAAP financial measures and the reconciliations at the end of this press release for more information.

 

(2)

Guidance for Organic Net Sales, Adjusted Gross Profit Margin, Adjusted Operating Income, and Adjusted EPS is provided on a non-GAAP basis only because certain information necessary to calculate the most comparable GAAP measure is unavailable due to the uncertainty and inherent difficulty of predicting the occurrence and the future financial statement impact of such items impacting comparability, including, but not limited to, the impact of currency, acquisitions and divestitures, divestiture-related license income, restructuring activities, deal costs, unrealized losses/(gains) on commodity hedges, impairment losses, certain non-ordinary course legal and regulatory matters, equity award compensation expense, nonmonetary currency devaluation, and debt prepayment and extinguishment (benefit)/costs, among other items. Therefore, as a result of the uncertainty and variability of the nature and amount of future adjustments, which could be significant, the Company is unable to provide a reconciliation of these measures without unreasonable effort.

Earnings Discussion and Webcast Information

A pre-recorded management discussion of The Kraft Heinz Company's third quarter 2024 earnings is available at ir.kraftheinzcompany.com . The Company will host a live question-and-answer session beginning today at 9:00 a.m. Eastern Daylight Time. A webcast of the session will be accessible at ir.kraftheinzcompany.com .

ABOUT THE KRAFT HEINZ COMPANY

We are driving transformation at The Kraft Heinz Company (Nasdaq: KHC), inspired by our Purpose, Let’s Make Life Delicious . Consumers are at the center of everything we do. With 2023 net sales of approximately $27 billion, we are committed to growing our iconic and emerging food and beverage brands on a global scale. We leverage our scale and agility to unleash the full power of Kraft Heinz across a portfolio of eight consumer-driven product platforms. As global citizens, we’re dedicated to making a sustainable, ethical impact while helping feed the world in healthy, responsible ways. Learn more about our journey by visiting www.kraftheinzcompany.com or following us on LinkedIn.

Forward-Looking Statements

This press release contains a number of forward-looking statements. Words such as “accelerate,” “anticipate,” “believe,” “commit,” “continue,” “expect,” “will,” “guidance,” and “outlook,” and variations of such words and similar future or conditional expressions are intended to identify forward-looking statements. Examples of forward-looking statements include, but are not limited to, statements regarding the Company's plans, impacts of accounting standards and guidance, growth, legal matters, taxes, costs and cost savings, impairments, dividends, expectations, investments, innovations, opportunities, capabilities, execution, initiatives, and pipeline. These forward-looking statements reflect management's current expectations and are not guarantees of future performance and are subject to a number of risks and uncertainties, many of which are difficult to predict and beyond the Company's control.

Important factors that may affect the Company's business and operations and that may cause actual results to differ materially from those in the forward-looking statements include, but are not limited to, operating in a highly competitive industry; the Company’s ability to correctly predict, identify, and interpret changes in consumer preferences and demand, to offer new products to meet those changes, and to respond to competitive innovation; changes in the retail landscape or the loss of key retail customers; changes in the Company's relationships with significant customers or suppliers, or in other business relationships; the Company’s ability to maintain, extend, and expand its reputation and brand image; the Company’s ability to leverage its brand value to compete against private label products; the Company’s ability to drive revenue growth in its key product categories or platforms, increase its market share, or add products that are in faster-growing and more profitable categories; product recalls or other product liability claims; climate change and legal or regulatory responses; the Company’s ability to identify, complete, or realize the benefits from strategic acquisitions, divestitures, alliances, joint ventures, or investments; the Company's ability to successfully execute its strategic initiatives; the impacts of the Company's international operations; the Company's ability to protect intellectual property rights; the Company’s ability to realize the anticipated benefits from prior or future streamlining actions to reduce fixed costs, simplify or improve processes, and improve its competitiveness; the influence of the Company's largest stockholder; the Company's level of indebtedness, as well as our ability to comply with covenants under our debt instruments; additional impairments of the carrying amounts of goodwill or other indefinite-lived intangible assets; foreign exchange rate fluctuations; volatility in commodity, energy, and other input costs; volatility in the market value of all or a portion of the commodity derivatives we use; compliance with laws and regulations and related legal claims or regulatory enforcement actions; failure to maintain an effective system of internal controls; a downgrade in the Company's credit rating; the impact of sales of the Company's common stock in the public market; the impact of the Company’s share repurchases or any change in the Company’s share repurchase activity; the Company’s ability to continue to pay a regular dividend and the amounts of any such dividends; disruptions in the global economy caused by geopolitical conflicts, unanticipated business disruptions and natural events in the locations in which the Company or the Company's customers, suppliers, distributors, or regulators operate; economic and political conditions in the United States and in various other nations where the Company does business (including inflationary pressures, instability in financial institutions, general economic slowdown, recession, or a potential U.S. federal government shutdown); changes in the Company's management team or other key personnel and the Company's ability to hire or retain key personnel or a highly skilled and diverse global workforce; our dependence on information technology and systems, including service interruptions, misappropriation of data, or breaches of security; increased pension, labor, and people-related expenses; changes in tax laws and interpretations and the final determination of tax audits, including transfer pricing matters, and any related litigation; volatility of capital markets and other macroeconomic factors; and other factors. For additional information on these and other factors that could affect the Company's forward-looking statements, see the Company's risk factors, as they may be amended from time to time, set forth in its filings with the Securities and Exchange Commission (“SEC”). The Company disclaims and does not undertake any obligation to update, revise, or withdraw any forward-looking statement in this press release, except as required by applicable law or regulation.

We use our investor relations website, ir.kraftheinzcompany.com , as a routine channel for distribution of important, and often material, information about Kraft Heinz, including quarterly and annual earnings results and presentations, press releases and other announcements, webcasts, analyst presentations, investor days, sustainability initiatives, financial information, and corporate governance practices, as well as archives of past presentations and events. We encourage you to follow our investor relations website in addition to our filings with the SEC to receive timely information about the Company. The information on our website is not part of this press release and shall not be deemed to be incorporated by reference into any filings we make with the SEC.

Non-GAAP Financial Measures

The non-GAAP financial measures provided in this press release 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”).

To supplement the financial information provided, the Company has presented Organic Net Sales, Adjusted Operating Income, Constant Currency Adjusted Operating Income, Adjusted Gross Profit, Adjusted Gross Profit Margin, Adjusted Net Income/(Loss), Adjusted EPS, Free Cash Flow, and Net Leverage which are considered non-GAAP financial measures. The non-GAAP financial measures presented may differ from similarly titled non-GAAP financial measures presented by other companies, and other companies may not define these non-GAAP financial measures in the same way. These measures are not substitutes for their comparable GAAP financial measures, such as net sales, net income/(loss), gross profit, diluted earnings per share (“EPS”), net cash provided by/(used for) operating activities, or other measures prescribed by GAAP, and there are limitations to using non-GAAP financial measures.

Management uses these non-GAAP financial measures to assist in comparing the Company’s performance on a consistent basis for purposes of business decision making by removing the impact of certain items that management believes do not directly reflect the Company’s underlying operations. The Company believes:

  • Organic Net Sales, Adjusted Operating Income, Constant Currency Adjusted Operating Income, Adjusted Gross Profit, Adjusted Gross Profit Margin, Adjusted Net Income/(Loss), and Adjusted EPS provide important comparability of underlying operating results, allowing investors and management to assess the Company’s operating performance on a consistent basis; and
  • Free Cash Flow and Net Leverage provide measures of the Company’s core operating performance, the cash-generating capabilities of the Company’s business operations, and are factors used in determining the Company’s borrowing capacity and the amount of cash available for debt repayments, dividends, acquisitions, share repurchases, and other corporate purposes.

Management believes that presenting the Company’s non-GAAP financial measures is useful to investors because it (i) provides investors with meaningful supplemental information regarding financial performance by excluding certain items, (ii) permits investors to view performance using the same tools that management uses to budget, make operating and strategic decisions, and evaluate historical performance, and (iii) otherwise provides supplemental information that may be useful to investors in evaluating the Company’s results. The Company believes that the presentation of these non-GAAP financial measures, when considered together with the corresponding GAAP financial measures and the reconciliations to those measures, provides investors with additional understanding of the factors and trends affecting the Company’s business than could be obtained absent these disclosures.

Definitions

Organic Net Sales is defined as net sales excluding, when they occur, the impact of currency, acquisitions and divestitures, and a 53rd week of shipments. The Company calculates the impact of currency on net sales by holding exchange rates constant at the previous year's exchange rate, with the exception of highly inflationary subsidiaries, for which the Company calculates the previous year's results using the current year's exchange rate.

Adjusted Operating Income is defined as operating income/(loss) excluding, when they occur, the impacts of restructuring activities, deal costs, unrealized gains/(losses) on commodity hedges (the unrealized gains and losses are recorded in general corporate expenses until realized; once realized, the gains and losses are recorded in the applicable segment’s operating results), impairment losses, and certain non-ordinary course legal and regulatory matters. The Company also presents Adjusted Operating Income on a constant currency basis ( Constant Currency Adjusted Operating Income ). The Company calculates the impact of currency on Adjusted Operating Income by holding exchange rates constant at the previous year's exchange rate, with the exception of highly inflationary subsidiaries, for which it calculates the previous year's results using the current year's exchange rate.

Adjusted Gross Profit, Adjusted Net Income/(Loss), and Adjusted EPS are defined as gross profit, net income/(loss), and diluted earnings per share, respectively, excluding, when they occur, the impacts of restructuring activities, deal costs, unrealized losses/(gains) on commodity hedges, impairment losses, certain non-ordinary course legal and regulatory matters, losses/(gains) on the sale of a business, other losses/(gains) related to acquisitions and divestitures (e.g., tax and hedging impacts), nonmonetary currency devaluation (e.g., remeasurement gains and losses), debt prepayment and extinguishment (benefit)/costs, and certain significant discrete income tax items (e.g., U.S. and non-U.S. tax reform), and including when they occur, adjustments to reflect preferred stock dividend payments on an accrual basis. Adjusted Gross Profit Margin is defined as Adjusted Gross Profit divided by net sales.

Net Leverage is defined as debt less cash, cash equivalents and short-term investments divided by Adjusted EBITDA. Adjusted EBITDA is defined as net income/(loss) from continuing operations before interest expense, other expense/(income), provision for/(benefit from) income taxes, and depreciation and amortization (excluding restructuring activities); in addition to these adjustments, the Company excludes, when they occur, the impacts of divestiture-related license income, restructuring activities, deal costs, unrealized losses/(gains) on commodity hedges, impairment losses, certain non-ordinary course legal and regulatory matters, and equity award compensation expense (excluding restructuring activities).

Free Cash Flow is defined as net cash provided by/(used for) operating activities less capital expenditures. The use of this non-GAAP measure does not imply or represent the residual cash flow for discretionary expenditures since the Company has certain non-discretionary obligations such as debt service that are not deducted from the measure.

 

Schedule 1

The Kraft Heinz Company

Condensed Consolidated Statements of Income

(in millions, except per share data)

(Unaudited)

 

For the Three Months Ended

 

For the Nine Months Ended

 

September 28,
2024

 

September 30,
2023

 

September 28,
2024

 

September 30,
2023

Net sales

$

6,383

 

$

6,570

 

$

19,270

 

$

19,780

Cost of products sold

 

4,197

 

 

4,335

 

 

12,547

 

 

13,171

Gross profit

 

2,186

 

 

2,235

 

 

6,723

 

 

6,609

Selling, general and administrative expenses, excluding impairment losses

 

859

 

 

920

 

 

2,718

 

 

2,675

Goodwill impairment losses

 

707

 

 

510

 

 

1,561

 

 

510

Intangible asset impairment losses

 

721

 

 

152

 

 

721

 

 

152

Selling, general and administrative expenses

 

2,287

 

 

1,582

 

 

5,000

 

 

3,337

Operating income/(loss)

 

(101)

 

 

653

 

 

1,723

 

 

3,272

Interest expense

 

230

 

 

228

 

 

685

 

 

683

Other expense/(income)

 

(48)

 

 

(35)

 

 

(56)

 

 

(94)

Income/(loss) before income taxes

 

(283)

 

 

460

 

 

1,094

 

 

2,683

Provision for/(benefit from) income taxes

 

7

 

 

206

 

 

480

 

 

594

Net income/(loss)

 

(290)

 

 

254

 

 

614

 

 

2,089

Net income/(loss) attributable to noncontrolling interest

 

 

 

(8)

 

 

1

 

 

(9)

Net income/(loss) attributable to common shareholders

$

(290)

 

$

262

 

$

613

 

$

2,098

 

 

 

 

 

 

 

 

Basic shares outstanding

 

1,210

 

 

1,229

 

 

1,212

 

 

1,228

Diluted shares outstanding

 

1,210

 

 

1,235

 

 

1,217

 

 

1,235

 

 

 

 

 

 

 

 

Per share data applicable to common shareholders:

 

 

 

 

 

 

 

Basic earnings/(loss) per share

$

(0.24)

 

$

0.21

 

$

0.51

 

$

1.71

Diluted earnings/(loss) per share

 

(0.24)

 

 

0.21

 

 

0.50

 

 

1.70

 

 

 

 

 

 

 

 

Schedule 2

The Kraft Heinz Company

Reconciliation of Net Sales to Organic Net Sales

For the Three Months Ended

(dollars in millions)

(Unaudited)

 

Net Sales

 

Currency

 

Acquisitions
and
Divestitures

 

Organic Net
Sales

 

Price

 

Volume/Mix

September 28, 2024

 

 

 

 

 

 

 

 

 

 

 

North America

$

4,826

 

$

(8)

 

$

 

$

4,834

 

 

 

 

International Developed Markets

 

882

 

 

15

 

 

 

 

867

 

 

 

 

Emerging Markets

 

675

 

 

(23)

 

 

 

 

698

 

 

 

 

Kraft Heinz

$

6,383

 

$

(16)

 

$

 

$

6,399

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

September 30, 2023

 

 

 

 

 

 

 

 

 

 

 

North America

$

4,995

 

$

 

$

 

$

4,995

 

 

 

 

International Developed Markets

 

883

 

 

 

 

 

 

883

 

 

 

 

Emerging Markets

 

692

 

 

11

 

 

16

 

 

665

 

 

 

 

Kraft Heinz

$

6,570

 

$

11

 

$

16

 

$

6,543

 

 

 

 

 

Year-over-year growth rates

 

 

 

 

 

 

 

 

 

 

 

North America

 

(3.4)%

 

(0.2) pp

 

0.0 pp

 

 

(3.2)%

 

1.2 pp

 

(4.4) pp

International Developed Markets

 

(0.2)%

 

1.6 pp

 

0.0 pp

 

 

(1.8)%

 

(1.0) pp

 

(0.8) pp

Emerging Markets

 

(2.4)%

 

(4.9) pp

 

(2.4) pp

 

 

4.9%

 

3.8 pp

 

1.1 pp

Kraft Heinz

 

(2.8)%

 

(0.4) pp

 

(0.2) pp

 

 

(2.2)%

 

1.2 pp

 

(3.4) pp

 

 

 

 

 

 

 

 

Schedule 3

The Kraft Heinz Company

Reconciliation of Net Sales to Organic Net Sales

For the Nine Months Ended

(dollars in millions)

(Unaudited)

 

Net Sales

 

Currency

 

Acquisitions
and
Divestitures

 

Organic Net
Sales

 

Price

 

Volume/Mix

September 28, 2024

 

 

 

 

 

 

 

 

 

 

 

North America

$

14,575

 

$

(15)

 

$

 

$

14,590

 

 

 

 

International Developed Markets

 

2,622

 

 

10

 

 

 

 

2,612

 

 

 

 

Emerging Markets (a)

$

2,073

 

$

(69)

 

$

12

 

$

2,130

 

 

 

 

Kraft Heinz

$

19,270

 

$

(74)

 

$

12

 

$

19,332

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

September 30, 2023

 

 

 

 

 

 

 

 

 

 

 

North America

$

14,959

 

$

 

$

 

$

14,959

 

 

 

 

International Developed Markets

 

2,675

 

 

 

 

 

 

2,675

 

 

 

 

Emerging Markets (a)

$

2,146

 

$

59

 

$

50

 

$

2,037

 

 

 

 

Kraft Heinz

$

19,780

 

$

59

 

$

50

 

$

19,671

 

 

 

 

 

Year-over-year growth rates

 

 

 

 

 

 

 

 

 

 

 

North America

 

(2.6)%

 

(0.1) pp

 

0.0 pp

 

 

(2.5)%

 

1.6 pp

 

(4.1) pp

International Developed Markets

 

(2.0)%

 

0.4 pp

 

0.0 pp

 

 

(2.4)%

 

(0.1) pp

 

(2.3) pp

Emerging Markets (a)

 

(3.4)%

 

(6.1) pp

 

(1.9) pp

 

 

4.6%

 

3.3 pp

 

1.3 pp

Kraft Heinz

 

(2.6)%

 

(0.7) pp

 

(0.2) pp

 

 

(1.7)%

 

1.6 pp

 

(3.3) pp

(a)

Emerging Markets represents the aggregation of our WEEM and AEM operating segments.

 

 

 

 

 

Schedule 4

The Kraft Heinz Company

Reconciliation of Operating Income/(Loss) to Adjusted Operating Income

(dollars in millions)

(Unaudited)

 

For the Three Months Ended

 

For the Nine Months Ended

 

September 28,
2024

 

September 30,
2023

 

September 28,
2024

 

September 30,
2023

Operating income/(loss)

$

(101)

 

$

653

 

 

1,723

 

 

3,272

Restructuring activities

 

 

 

45

 

 

 

 

25

Unrealized losses/(gains) on commodity hedges

 

3

 

 

(48)

 

 

(30)

 

 

(53)

Impairment losses

 

1,428

 

 

662

 

 

2,282

 

 

662

Certain non-ordinary course legal and regulatory matters

 

 

 

 

 

 

 

2

Adjusted Operating Income

$

1,330

 

$

1,312

 

$

3,975

 

$

3,908

 

 

 

 

 

 

 

 

Segment Adjusted Operating Income:

 

 

 

 

 

 

 

North America

$

1,237

 

$

1,245

 

$

3,793

 

$

3,701

International Developed Markets

 

135

 

 

129

 

 

397

 

 

376

Total Segment Adjusted Operating Income

 

1,372

 

 

1,374

 

 

4,190

 

 

4,077

Emerging Markets Segment Adjusted Operating Income (a)

 

84

 

 

88

 

 

232

 

 

286

General corporate expenses

 

(126)

 

 

(150)

 

 

(447)

 

 

(455)

Adjusted Operating Income

$

1,330

 

$

1,312

 

$

3,975

 

$

3,908

(a)

Segment Adjusted Operating Income for Emerging Markets, which represents the combination of our WEEM and AEM operating segments, is defined and presented consistently with the Segment Adjusted Operating Income of our reportable segments - North America and International Developed Markets.

 

 

 

 

 

Schedule 5

The Kraft Heinz Company

Reconciliation of Adjusted Operating Income to Constant Currency Adjusted Operating Income

For the Three Months Ended

(dollars in millions)

(Unaudited)

 

Adjusted Operating
Income

 

Currency

 

Constant Currency
Adjusted Operating
Income

September 28, 2024

 

 

 

 

 

North America

$

1,237

 

$

(3)

 

$

1,240

International Developed Markets

 

135

 

 

3

 

 

132

Emerging Markets

 

84

 

 

(1)

 

 

85

General corporate expenses

 

(126)

 

 

 

 

(126)

Kraft Heinz

$

1,330

 

$

(1)

 

$

1,331

 

 

 

 

 

 

September 30, 2023

 

 

 

 

 

North America

$

1,245

 

$

 

$

1,245

International Developed Markets

 

129

 

 

 

 

129

Emerging Markets

 

88

 

 

2

 

 

86

General corporate expenses

 

(150)

 

 

 

 

(150)

Kraft Heinz

$

1,312

 

$

2

 

$

1,310

 

Year-over-year growth rates

 

 

 

 

 

North America

 

(0.6)%

 

(0.2) pp

 

 

(0.4)%

International Developed Markets

 

4.2%

 

2.2 pp

 

 

2.0%

Emerging Markets

 

(4.5)%

 

(3.5) pp

 

 

(1.0)%

General corporate expenses

 

(15.9)%

 

0.3 pp

 

 

(16.2)%

Kraft Heinz

 

1.4%

 

(0.2) pp

 

 

1.6%

 

 

 

 

Schedule 6

The Kraft Heinz Company

Reconciliation of Adjusted Operating Income to Constant Currency Adjusted Operating Income

For the Nine Months Ended

(dollars in millions)

(Unaudited)

 

Adjusted Operating

Income

 

Currency

 

Constant Currency

Adjusted Operating

Income

September 28, 2024

 

 

 

 

 

North America

$

3,793

 

$

(4)

 

$

3,797

International Developed Markets

 

397

 

 

7

 

 

390

Emerging Markets

 

232

 

 

(9)

 

 

241

General corporate expenses

 

(447)

 

 

(1)

 

 

(446)

Kraft Heinz

$

3,975

 

$

(7)

 

$

3,982

 

 

 

 

 

 

September 30, 2023

 

 

 

 

 

North America

$

3,701

 

$

 

$

3,701

International Developed Markets

 

376

 

 

 

 

376

Emerging Markets

 

286

 

 

11

 

 

275

General corporate expenses

 

(455)

 

 

 

 

(455)

Kraft Heinz

$

3,908

 

$

11

 

$

3,897

 

Year-over-year growth rates

 

 

 

 

 

North America

 

2.5%

 

(0.1) pp

 

 

2.6%

International

 

5.6%

 

1.7 pp

 

 

3.9%

Emerging Markets

 

(19.0)%

 

(6.5) pp

 

 

(12.5)%

General corporate expenses

 

(1.8)%

 

0.3 pp

 

 

(2.1)%

Kraft Heinz

 

1.7%

 

(0.5) pp

 

 

2.2%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Schedule 7

The Kraft Heinz Company

Reconciliation of GAAP Results to Non-GAAP Results

(dollars in millions)

(Unaudited)

 

For the Three Months Ended

 

September 28, 2024

 

Gross
profit

 

Selling,
general
and
administrative
expenses

 

Operating
income/
(loss)

 

Interest
expense

 

Other
expense/
(income)

 

Income/
(loss)
before
income
taxes

 

Provision
for/
(benefit
from)
income
taxes

 

Net
income/
(loss)

 

Net
income/
(loss)
attributable
to
noncontrolling
interest

 

Net
income/
(loss)
attributable
to
common
shareholders

 

Diluted
EPS

GAAP Results

$

2,186

 

$

2,287

 

$

(101)

 

$

230

 

$

(48)

 

$

(283)

 

$

7

 

$

(290)

 

$

 

$

(290)

 

$

(0.24)

Items Affecting Comparability

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Restructuring activities

 

 

 

 

 

 

 

 

 

7

 

 

(7)

 

 

(2)

 

 

(5)

 

 

 

 

(5)

 

 

Unrealized losses/(gains) on commodity hedges

 

3

 

 

 

 

3

 

 

 

 

 

 

3

 

 

1

 

 

2

 

 

 

 

2

 

 

Impairment losses

 

 

 

(1,428)

 

 

1,428

 

 

 

 

 

 

1,428

 

 

229

 

 

1,199

 

 

 

 

1,199

 

 

0.99

Losses/(gains) on sale of business

 

 

 

 

 

 

 

 

 

 

 

 

 

(4)

 

 

4

 

 

 

 

4

 

 

Nonmonetary currency devaluation

 

 

 

 

 

 

 

 

 

(3)

 

 

3

 

 

 

 

3

 

 

 

 

3

 

 

Adjusted Non-GAAP Results

$

2,189

 

 

 

$

1,330

 

 

 

 

 

 

 

 

 

$

913

 

 

 

 

 

$

0.75

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Schedule 8

The Kraft Heinz Company

Reconciliation of GAAP Results to Non-GAAP Results

(dollars in millions)

(Unaudited)

 

For the Three Months Ended

 

September 30, 2023

 

Gross
profit

 

Selling,
general
and
administrative
expenses

 

Operating
income/
(loss)

 

Interest
expense

 

Other
expense/
(income)

 

Income/
(loss)
before
income
taxes

 

Provision
for/
(benefit
from)
income
taxes

 

Net
income/
(loss)

 

Net
income/
(loss)
attributable
to
noncontrolling
interest

 

Net
income/
(loss)
attributable
to
common
shareholders

 

Diluted
EPS

GAAP Results

$

2,235

 

$

1,582

 

$

653

 

$

228

 

$

(35)

 

$

460

 

$

206

 

$

254

 

$

(8)

 

$

262

 

$

0.21

Items Affecting Comparability

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Restructuring activities

 

44

 

 

(1)

 

 

45

 

 

 

 

 

 

45

 

 

8

 

 

37

 

 

 

 

37

 

 

0.03

Unrealized losses/(gains) on commodity hedges

 

(48)

 

 

 

 

(48)

 

 

 

 

 

 

(48)

 

 

(12)

 

 

(36)

 

 

 

 

(36)

 

 

(0.03)

Impairment losses

 

 

 

(662)

 

 

662

 

 

 

 

 

 

662

 

 

36

 

 

626

 

 

6

 

 

620

 

 

0.50

Nonmonetary currency devaluation

 

 

 

 

 

 

 

 

 

(9)

 

 

9

 

 

 

 

9

 

 

 

 

9

 

 

0.01

Adjusted Non-GAAP Results

$

2,231

 

 

 

$

1,312

 

 

 

 

 

 

 

 

 

$

890

 

 

 

 

 

$

0.72

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Schedule 9

The Kraft Heinz Company

Reconciliation of GAAP Results to Non-GAAP Results

(dollars in millions)

(Unaudited)

 

For the Nine Months Ended

 

September 28, 2024

 

Gross
profit

 

Selling,
general
and
administrative
expenses

 

Operating
income/
(loss)

 

Interest
expense

 

Other
expense/
(income)

 

Income/
(loss)
before
income
taxes

 

Provision
for/
(benefit
from)
income
taxes

 

Net
income/
(loss)

 

Net
income/
(loss)
attributable
to
noncontrolling
interest

 

Net
income/
(loss)
attributable
to
common
shareholders

 

Diluted
EPS

GAAP Results

$

6,723

 

$

5,000

 

$

1,723

 

$

685

 

$

(56)

 

$

1,094

 

$

480

 

$

614

 

$

1

 

$

613

 

$

0.50

Items Affecting Comparability

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Restructuring activities

 

2

 

 

2

 

 

 

 

 

 

8

 

 

(8)

 

 

(2)

 

 

(6)

 

 

 

 

(6)

 

 

Unrealized losses/(gains) on commodity hedges

 

(30)

 

 

 

 

(30)

 

 

 

 

 

 

(30)

 

 

(8)

 

 

(22)

 

 

 

 

(22)

 

 

(0.02)

Impairment losses

 

 

 

(2,282)

 

 

2,282

 

 

 

 

 

 

2,282

 

 

229

 

 

2,053

 

 

 

 

2,053

 

 

1.69

Losses/(gains) on sale of business

 

 

 

 

 

 

 

 

 

(78)

 

 

78

 

 

21

 

 

57

 

 

 

 

57

 

 

0.05

Nonmonetary currency devaluation

 

 

 

 

 

 

 

 

 

(7)

 

 

7

 

 

 

 

7

 

 

 

 

7

 

 

Adjusted Non-GAAP Results

$

6,695