Announces Leadership and Organizational
Changes
Narrows Full Year Outlook for Organic
Net Sales(1)(2)
Raises Full Year Outlook for Constant
Currency Adjusted EBITDA and Adjusted EPS(1)(2)
Third Quarter Highlights
- Net sales increased 1.0%; Organic Net Sales(1) increased
1.7%
- Gross profit margin increased 568 basis points to 34.0%;
Adjusted Gross Profit Margin(1) increased 396 basis points to
34.0%
- Net income decreased 41.7%; Adjusted EBITDA(1) increased
11.9%
- Diluted EPS was $0.21, down 40.0%; Adjusted EPS(1) was $0.72,
up 14.3%
- Reached target Net Leverage(1) ratio of approximately 3.0x,
with Net Leverage at 2.9x
The Kraft Heinz Company (Nasdaq: KHC) (“Kraft Heinz” or the
“Company”) today reported financial results for the third quarter
of 2023.
“Our third quarter results were marked by net sales growth
across each of our three core pillars: Foodservice, Emerging
Markets, and U.S. Retail Grow Platforms,” said Kraft Heinz CEO and
Chair of the Board Miguel Patricio. “At the same time, we continue
to improve productivity across the value chain, reinvesting gross
efficiencies back into marketing, technology, and research &
development. These investments remain a key part of our strategy as
we build the business for continued success.”
“We laid out a series of action plans in the beginning of the
year to drive market share and volume improvement, and I’m pleased
to say we saw improvement throughout the quarter as our team
executed against these plans. We will remain focused on our overall
strategy to drive top-line profitable growth.”
In the third quarter, Kraft Heinz hit a milestone in its
transformation - reaching its target Net Leverage of approximately
3.0x. “A stronger balance sheet, along with advancements we have
made across the business, gives us further conviction behind our
strategy,” said Patricio.
Net Sales
In millions
Net Sales
Organic Net Sales(1)
September 30,
2023
September 24,
2022
% Chg vs PY
YoY Growth Rate
Price
Volume/ Mix
For the Three Months Ended
North America
$
4,995
$
5,016
(0.4)%
(0.1)%
5.8 pp
(5.9) pp
International
1,575
1,489
5.7%
8.0%
11.6 pp
(3.6) pp
Kraft Heinz
$
6,570
$
6,505
1.0%
1.7%
7.1 pp
(5.4) pp
For the Nine Months Ended
North America
$
14,959
$
14,656
2.1%
2.5%
9.4 pp
(6.9) pp
International
4,821
4,448
8.4%
13.0%
15.7 pp
(2.7) pp
Kraft Heinz
$
19,780
$
19,104
3.5%
4.9%
10.8 pp
(5.9) pp
Net Income/(Loss) and Diluted
EPS
In millions, except per share
data
For the Three Months
Ended
For the Nine Months
Ended
September 30,
2023
September 24, 2022
% Chg vs PY
September 30, 2023
September 24, 2022
% Chg vs PY
Gross profit
$
2,235
$
1,843
21.2%
$
6,609
$
5,758
14.8%
Operating income/(loss)
653
751
(13.1)%
3,272
2,408
35.9%
Net income/(loss)
254
435
(41.7)%
2,089
1,481
41.0%
Net income/(loss) attributable to common
shareholders
262
432
(39.5)%
2,098
1,473
42.4%
Diluted EPS
$
0.21
$
0.35
(40.0)%
$
1.70
$
1.19
42.9%
Adjusted EPS(1)
0.72
0.63
14.3%
2.20
1.93
14.0%
Adjusted EBITDA(1)
$
1,565
$
1,398
11.9%
$
4,657
$
4,260
9.3%
Q3 2023 Financial Summary
- Net sales increased 1.0 percent versus the year-ago
period to $6.6 billion, including a negative 0.5 percentage point
impact from foreign currency and a negative 0.2 percentage point
impact from divestitures. Organic Net Sales(1) increased 1.7
percent versus the prior year period. Price increased 7.1
percentage points versus the prior year period, with increases in
both reportable segments that were primarily driven by list price
increases taken to mitigate higher input costs. Volume/mix declined
5.4 percentage points versus the prior year period, with declines
in both reportable segments that were primarily driven by
elasticity impacts from pricing actions.
- Net income/(loss) decreased 41.7 percent versus the
year-ago period to $254 million, primarily driven by higher
non-cash impairment losses in the current year period and higher
tax expenses in the current year period. These factors were
partially offset by higher Adjusted EBITDA versus the prior year
period and unrealized gains on commodity hedges in the current year
period compared to unrealized losses on commodity hedges in the
prior year period. Adjusted EBITDA(1) increased 11.9 percent
versus the year-ago period to $1.6 billion, primarily driven by
higher pricing and efficiency gains. These factors more than offset
higher supply chain costs (reflecting inflationary pressure in
manufacturing and procurement costs), unfavorable volume/mix,
investments in marketing, technology, and research and development,
increased commodity costs (including the impact of realized gains
and losses on commodity hedges), and an unfavorable impact from
foreign currency (1.0 pp).
- Diluted EPS was $0.21, down 40.0 percent versus the
prior year period, primarily driven by the net income/(loss)
factors discussed above. Adjusted EPS(1) was $0.72, up 14.3
percent versus the prior year period, primarily driven by higher
Adjusted EBITDA and favorable changes in other expense/(income).
These factors more than offset higher taxes on adjusted
earnings.
- Year-to-date net cash provided by operating activities
was $2.6 billion, up 72.8 percent versus the year-ago period. This
was driven by lower cash outflows for inventories primarily related
to stock rebuilding in the prior year, higher Adjusted EBITDA in
the current period, and lower cash outflows for tax payments driven
by taxes paid in 2022 related to the sale of certain assets in our
global cheese business and the licensing of certain trademarks.
These impacts were partially offset by unfavorable changes in
accounts payable, due in part to lower inventory purchase volume in
the current period compared to the prior year period, and cash
payments associated with the settlement of the consolidated
securities class action lawsuit. Year-to date Free Cash
Flow(1) was $1.8 billion, up 108.2 percent versus the prior
year period, driven by the same net cash provided by operating
activities as discussed above. This more than offset an increase in
capital expenditures in the current year.
Leadership and Organizational Changes
As part of its mission to accelerate profitable growth and to
lead the future of food, the Company has named its new President of
the North America Zone, elevated key roles to a global level, and
restructured its International Zone. These changes preserve the
Company’s local agility while leveraging support, expertise, and
resources from its scale.
First, Pedro Navio has been named EVP & President, North
America, and will succeed Carlos Abrams-Rivera who, as previously
announced, will serve as the Kraft Heinz CEO. Navio has been with
Kraft Heinz since 2017, and is currently President, Taste, Meals,
and Away From Home, in North America. Prior to Kraft Heinz, Navio
spent more than 15 years at Red Bull, most recently as CEO of Latin
America.
Second, the Company is establishing global leadership teams for
its Growth and Omnichannel functions. Investing in these
disciplines on a global level provides the structure and support to
leverage centralized expertise and resources. It also helps drive
growth and disruptive innovation across the business while
optimally servicing customers and consumers.
Lastly, to further drive international growth, the Company is
dividing its international business into three zones. Recognizing
these markets require different sets of strategies and skills, the
new structure provides the necessary focus and resources to
optimize growth potential.
- Europe and Pacific Developed Markets, which will include
Europe, Australia, New Zealand, Japan, and South Korea.
- West and East Emerging Markets, which will include
LATAM, Eastern Europe, and the Middle East.
- Asia Emerging Markets, which will include its Asia
businesses outside of Japan and South Korea.
In conjunction with these changes to the International Zone,
Rafael Oliveira, current President, International Markets, will
take on an advisory role to support the new structure transition
and will depart the Company in March of 2024. “Rafael has been with
Kraft Heinz since 2014 in several top leadership roles and has been
a critical part of our transformation,” said Patricio. “We are
forever grateful for the immeasurable business and culture impact
that he has made on the Company and its people.”
“We are proud that all these appointments are internal
elevations and reflect the quality of the talent and focus on
people development here at Kraft Heinz,” said Abrams-Rivera. “We
see the value of investing in the right structure to support our
growth plans, and I am confident that these are the leaders to take
Kraft Heinz to the next level.”
All changes will be effective at the beginning of fiscal year
2024.
Outlook
For fiscal year 2023, the Company expects:
- Organic Net Sales(2) growth of 4 to 6 percent versus the
prior year, closer to the lower end of the range at approximately
4%.
- Constant Currency Adjusted EBITDA(1)(2) growth of 5 to 7
percent versus the prior year, or 7 to 9 percent when excluding the
impact from lapping a 53rd week in 2022. This compares to the
previous expectation of 4 to 6 percent Constant Currency Adjusted
EBITDA growth. Adjusted Gross Profit Margin(1)(2) expansion is
expected to contribute to Constant Currency Adjusted EBITDA growth.
The Company now expects Adjusted Gross Profit Margin expansion of
200 to 250 basis points versus the prior year, compared to the
previous expectation of 150 to 200 basis points versus the prior
year. The current expectation for Adjusted Gross Profit Margin now
reflects mid-single-digit inflation for the full year, as compared
to the previous expectation of mid-to-high single-digit inflation
for the full year, with pricing and efficiencies continuing to
contribute to Adjusted Gross Profit Margin recovery.
- Adjusted EPS(2) to be in the range of $2.91 to $2.99,
compared to the previous range of $2.83 to $2.91. The current range
includes a negative impact of approximately $0.03 from expected
unfavorable changes in non-cash pension and post-retirement
benefits and a currency headwind of approximately $0.04 at current
foreign exchange rates. The expected 2023 year-over-year Adjusted
EPS change reflects a negative $0.06 impact from lapping a 53rd
week in 2022. Additionally, the Company now expects an effective
tax rate on Adjusted EPS to be in the range of 19 to 20
percent.
End Notes
(1)
Organic Net Sales, Adjusted EBITDA,
Constant Currency Adjusted EBITDA, Adjusted Gross Profit Margin,
Adjusted EPS, Free Cash Flow, and Net Leverage 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, Constant
Currency Adjusted EBITDA, Adjusted Gross Profit Margin, 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,
and equity award compensation expense, 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 2023 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 2022 net
sales of approximately $26 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 six 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,”
“build”, “commit,” “continue,” “expect,” “execute,” “invest,”
“maintain,” “reflect,” “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 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, including the ongoing conflict between Russia and
Ukraine; 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. 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.
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 EBITDA, Constant Currency
Adjusted EBITDA, 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 EBITDA, Constant Currency Adjusted
EBITDA, 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 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). The Company also presents
Adjusted EBITDA on a constant currency basis (Constant Currency
Adjusted EBITDA). The Company calculates the impact of currency
on Adjusted EBITDA 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.
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 30, 2023
September 24, 2022
September 30, 2023
September 24, 2022
Net sales
$
6,570
$
6,505
$
19,780
$
19,104
Cost of products sold
4,335
4,662
13,171
13,346
Gross profit
2,235
1,843
6,609
5,758
Selling, general and administrative
expenses, excluding impairment losses
920
798
2,675
2,437
Goodwill impairment losses
510
220
510
444
Intangible asset impairment losses
152
74
152
469
Selling, general and administrative
expenses
1,582
1,092
3,337
3,350
Operating income/(loss)
653
751
3,272
2,408
Interest expense
228
228
683
704
Other expense/(income)
(35)
(22)
(94)
(211)
Income/(loss) before income taxes
460
545
2,683
1,915
Provision for/(benefit from) income
taxes
206
110
594
434
Net income/(loss)
254
435
2,089
1,481
Net income/(loss) attributable to
noncontrolling interest
(8)
3
(9)
8
Net income/(loss) attributable to common
shareholders
$
262
$
432
$
2,098
$
1,473
Basic shares outstanding
1,229
1,227
1,228
1,226
Diluted shares outstanding
1,235
1,235
1,235
1,235
Per share data applicable to common
shareholders:
Basic earnings/(loss) per share
$
0.21
$
0.35
$
1.71
$
1.20
Diluted earnings/(loss) per share
0.21
0.35
1.70
1.19
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 30, 2023
North America
$
4,995
$
(14)
$
—
$
5,009
International
1,575
2
—
1,573
Kraft Heinz
$
6,570
$
(12)
$
—
$
6,582
September 24, 2022
North America
$
5,016
$
—
$
—
$
5,016
International
1,489
21
12
1,456
Kraft Heinz
$
6,505
$
21
$
12
$
6,472
Year-over-year growth rates
North America
(0.4)%
(0.3) pp
0.0 pp
(0.1)%
5.8 pp
(5.9) pp
International
5.7%
(1.5) pp
(0.8) pp
8.0%
11.6 pp
(3.6) pp
Kraft Heinz
1.0%
(0.5) pp
(0.2) pp
1.7%
7.1 pp
(5.4) 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 30, 2023
North America
$
14,959
$
(64)
$
—
$
15,023
International
4,821
(116)
34
4,903
Kraft Heinz
$
19,780
$
(180)
$
34
$
19,926
September 24, 2022
North America
$
14,656
$
—
$
—
$
14,656
International
4,448
57
53
4,338
Kraft Heinz
$
19,104
$
57
$
53
$
18,994
Year-over-year growth rates
North America
2.1%
(0.4) pp
0.0 pp
2.5%
9.4 pp
(6.9) pp
International
8.4%
(4.1) pp
(0.5) pp
13.0%
15.7 pp
(2.7) pp
Kraft Heinz
3.5%
(1.3) pp
(0.1) pp
4.9%
10.8 pp
(5.9) pp
Schedule 4
The Kraft Heinz Company
Reconciliation of Net
Income/(Loss) to Adjusted EBITDA
(dollars in millions)
(Unaudited)
For the Three Months
Ended
For the Nine Months
Ended
September 30, 2023
September 24, 2022
September 30, 2023
September 24, 2022
Net income/(loss)
$
254
$
435
$
2,089
$
1,481
Interest expense
228
228
683
704
Other expense/(income)
(35)
(22)
(94)
(211)
Provision for/(benefit from) income
taxes
206
110
594
434
Operating income/(loss)
653
751
3,272
2,408
Depreciation and amortization (excluding
restructuring activities)
234
227
680
676
Divestiture-related license income
(14)
(14)
(41)
(41)
Restructuring activities
45
8
25
38
Deal costs
—
—
—
8
Unrealized losses/(gains) on commodity
hedges
(48)
84
(53)
65
Impairment losses
662
314
662
999
Certain non-ordinary course legal and
regulatory matters
—
—
2
—
Equity award compensation expense
33
28
110
107
Adjusted EBITDA
$
1,565
$
1,398
$
4,657
$
4,260
Segment Adjusted EBITDA:
North America
$
1,390
$
1,213
$
4,108
$
3,734
International
259
243
804
733
General corporate expenses
(84)
(58)
(255)
(207)
Adjusted EBITDA
$
1,565
$
1,398
$
4,657
$
4,260
Schedule 5
The Kraft Heinz Company
Reconciliation of Adjusted EBITDA
to Constant Currency Adjusted EBITDA
For the Three Months Ended
(dollars in millions)
(Unaudited)
Adjusted EBITDA
Currency
Constant Currency Adjusted
EBITDA
September 30, 2023
North America
$
1,390
$
(3)
$
1,393
International
259
(4)
263
General corporate expenses
(84)
(1)
(83)
Kraft Heinz
$
1,565
$
(8)
$
1,573
September 24, 2022
North America
$
1,213
$
—
$
1,213
International
243
4
239
General corporate expenses
(58)
—
(58)
Kraft Heinz
$
1,398
$
4
$
1,394
Year-over-year growth rates
North America
14.6%
(0.3) pp
14.9%
International
6.8%
(3.4) pp
10.2%
General corporate expenses
46.2%
2.4 pp
43.8%
Kraft Heinz
11.9%
(1.0) pp
12.9%
Schedule 6
The Kraft Heinz Company
Reconciliation of Adjusted EBITDA
to Constant Currency Adjusted EBITDA
For the Nine Months Ended
(dollars in millions)
(Unaudited)
Adjusted EBITDA
Currency
Constant Currency Adjusted
EBITDA
September 30, 2023
North America
$
4,108
$
(13)
$
4,121
International
804
(28)
832
General corporate expenses
(255)
—
(255)
Kraft Heinz
$
4,657
$
(41)
$
4,698
September 24, 2022
North America
$
3,734
$
—
$
3,734
International
733
11
722
General corporate expenses
(207)
—
(207)
Kraft Heinz
$
4,260
$
11
$
4,249
Year-over-year growth rates
North America
10.0%
(0.4) pp
10.4%
International
9.7%
(5.5) pp
15.2%
General corporate expenses
23.3%
0.1 pp
23.2%
Kraft Heinz
9.3%
(1.3) pp
10.6%
Schedule 7
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
$
890
$
0.72
Schedule 8
The Kraft Heinz Company
Reconciliation of GAAP Results to
Non-GAAP Results
(dollars in millions)
(Unaudited)
For the Three Months
Ended
September 24, 2022
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
$
1,843
$
1,092
$
751
$
228
$
(22)
$
545
$
110
$
435
$
3
$
432
$
0.35
Items Affecting Comparability
Restructuring activities
5
(3)
8
—
1
7
1
6
—
6
0.01
Unrealized losses/(gains) on commodity
hedges
84
—
84
—
—
84
21
63
—
63
0.05
Impairment losses
20
(294)
314
—
—
314
24
290
—
290
0.23
Losses/(gains) on sale of business
—
—
—
—
—
—
7
(7)
—
(7)
(0.01)
Nonmonetary currency devaluation
—
—
—
—
(6)
6
—
6
—
6
0.01
Debt prepayment and extinguishment
(benefit)/costs
—
—
—
3
—
(3)
6
(9)
—
(9)
(0.01)
Adjusted Non-GAAP Results
$
1,952
$
784
$
0.63
Schedule 9
The Kraft Heinz Company
Reconciliation of GAAP Results to
Non-GAAP Results
(dollars in millions)
(Unaudited)
For the Nine 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
$
6,609
$
3,337
$
3,272
$
683
$
(94)
$
2,683
$
594
$
2,089
$
(9)
$
2,098
$
1.70
Items Affecting Comparability
Restructuring activities
44
19
25
—
(2)
27
5
22
—
22
0.02
Unrealized losses/(gains) on commodity
hedges
(53)
—
(53)
—
—
(53)
(13)
(40)
—
(40)
(0.03)
Impairment losses
—
(662)
662
—
—
662
36
626
6
620
0.50
Certain non-ordinary course legal and
regulatory matters
—
(2)
2
—
—
2
—
2
—
2
—
Losses/(gains) on sale of business
—
—
—
—
(2)
2
—
2
—
2
—
Nonmonetary currency devaluation
—
—
—
—
(27)
27
—
27
—
27
0.02
Certain significant discrete income tax
items
—
—
—
—
—
—
17
(17)
—
(17)
(0.01)
Adjusted Non-GAAP Results
$
6,600
$
2,711
$
2.20
Schedule 10
The Kraft Heinz Company
Reconciliation of GAAP Results to
Non-GAAP Results
(dollars in millions)
(Unaudited)
For the Nine Months
Ended
September 24, 2022
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
$
5,758
$
3,350
$
2,408
$
704
$
(211)
$
1,915
$
434
$
1,481
$
8
$
1,473
$
1.19
Items Affecting Comparability
Restructuring activities
15
(23)
38
—
1
37
9
28
—
28
0.02
Deal Costs
—
(8)
8
—
—
8
3
5
—
5
0.01
Unrealized losses/(gains) on commodity
hedges
65
—
65
—
—
65
16
49
—
49
0.04
Impairment losses
86
(913)
999
—
—
999
132
867
—
867
0.70
Losses/(gains) on sale of business
—
—
—
—
1
(1)
7
(8)
—
(8)
(0.01)
Other losses/(gains) related to
acquisitions and divestitures
—
—
—
—
38
(38)
(9)
(29)
—
(29)
(0.02)
Nonmonetary currency devaluation
—
—
—
—
(16)
16
—
16
—
16
0.01
Debt prepayment and extinguishment
(benefit)/costs
—
—
—
12
—
(12)
4
(16)
—
(16)
(0.01)
Adjusted Non-GAAP Results
$
5,924
$
2,393
$
1.93
Schedule 11
The Kraft Heinz Company
Adjusted Gross Profit Margin
(dollars in millions)
(Unaudited)
For the Three Months
Ended
For the Nine Months
Ended
September 30, 2023
September 24, 2022
September 30, 2023
September 24, 2022
Adjusted Gross Profit
$
2,231
$
1,952
$
6,600
$
5,924
Net sales
6,570
6,505
19,780
19,104
Adjusted Gross Profit Margin
34.0%
30.0%
33.4%
31.0%
Schedule 12
The Kraft Heinz Company
Key Drivers of Change in Adjusted
EPS
(Unaudited)
For the Three Months
Ended
September 30, 2023
September 24, 2022
$ Change
Key drivers of change in Adjusted EPS:
Results of operations(a)(b)
$
0.87
$
0.76
$
0.11
Interest expense
(0.15)
(0.15)
—
Other expense/(income)
0.03
0.02
0.01
Effective tax rate
(0.03)
—
(0.03)
Adjusted EPS
$
0.72
$
0.63
$
0.09
(a)
Includes non-cash amortization of
definite-lived intangible assets, which accounted for a negative
impact to Adjusted EPS from results of operations of $0.04 for the
three months ended September 30, 2023 and September 24, 2022.
(b)
Includes divestiture-related license
income, which accounted for a benefit to Adjusted EPS from results
of operations of $0.01 for the three months ended September 30,
2023 and September 24, 2022.
Schedule 13
The Kraft Heinz Company
Key Drivers of Change in Adjusted
EPS
(Unaudited)
For the Nine Months
Ended
September 30, 2023
September 24, 2022
$ Change
Key drivers of change in Adjusted EPS:
Results of operations(a)(b)
$
2.54
$
2.26
$
0.28
Results of divested operations
—
0.01
(0.01)
Interest expense
(0.44)
(0.46)
0.02
Other expense/(income)(c)
0.08
0.12
(0.04)
Effective tax rate
0.02
—
0.02
Adjusted EPS
$
2.20
$
1.93
$
0.27
(a)
Includes non-cash amortization of
definite-lived intangible assets, which accounted for a negative
impact to Adjusted EPS from results of operations of $0.12 for the
nine months ended September 30, 2023 and $0.13 for the nine months
ended September 24, 2022.
(b)
Includes divestiture-related license
income, which accounted for a benefit to Adjusted EPS from results
of operations of $0.03 for the nine months ended September 30, 2023
and September 24, 2022.
(c)
Includes non-cash amortization of prior
service credits, which accounted for a benefit to Adjusted EPS from
other expense/(income) of $0.01 for the nine months ended September
30, 2023 and September 24, 2022.
Schedule 14
The Kraft Heinz Company
Condensed Consolidated Balance
Sheets
(in millions, except per share
data)
(Unaudited)
September 30, 2023
December 31, 2022
ASSETS
Cash and cash equivalents
$
1,052
$
1,040
Trade receivables, net
2,103
2,120
Inventories
3,779
3,651
Prepaid expenses
245
240
Other current assets
654
842
Assets held for sale
5
4
Total current assets
7,838
7,897
Property, plant and equipment, net
6,813
6,740
Goodwill
30,310
30,833
Intangible assets, net
42,314
42,649
Other non-current assets
2,381
2,394
TOTAL ASSETS
$
89,656
$
90,513
LIABILITIES AND EQUITY
Commercial paper and other short-term
debt
$
—
$
6
Current portion of long-term debt
608
831
Trade payables
4,463
4,848
Accrued marketing
793
749
Interest payable
268
264
Other current liabilities
1,672
2,330
Total current liabilities
7,804
9,028
Long-term debt
19,270
19,233
Deferred income taxes
10,132
10,152
Accrued postemployment costs
143
144
Long-term deferred income
1,436
1,477
Other non-current liabilities
1,413
1,609
TOTAL LIABILITIES
40,198
41,643
Redeemable noncontrolling interest
24
40
Equity:
Common stock, $0.01 par value
12
12
Additional paid-in capital
52,004
51,834
Retained earnings/(deficit)
1,104
489
Accumulated other comprehensive
income/(losses)
(2,863)
(2,810)
Treasury stock, at cost
(981)
(847)
Total shareholders' equity
49,276
48,678
Noncontrolling interest
158
152
TOTAL EQUITY
49,434
48,830
TOTAL LIABILITIES AND EQUITY
$
89,656
$
90,513
Schedule 15
The Kraft Heinz Company
Condensed Consolidated Statements
of Cash Flows
(in millions)
(Unaudited)
For the Nine Months
Ended
September 30, 2023
September 24, 2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income/(loss)
$
2,089
$
1,481
Adjustments to reconcile net income/(loss)
to operating cash flows:
Depreciation and amortization
710
685
Amortization of postemployment benefit
plans prior service costs/(credits)
(10)
(11)
Divestiture-related license income
(41)
(41)
Equity award compensation expense
110
107
Deferred income tax
provision/(benefit)
(15)
(184)
Postemployment benefit plan
contributions
(18)
(14)
Goodwill and intangible asset impairment
losses
662
913
Nonmonetary currency devaluation
27
16
Loss/(gain) on sale of business
2
(1)
Loss/(gain) on extinguishment of debt
—
(12)
Other items, net
(44)
6
Changes in current assets and
liabilities:
Trade receivables
(16)
(208)
Inventories
(277)
(1,027)
Accounts payable
(221)
299
Other current assets
139
(136)
Other current liabilities
(477)
(356)
Net cash provided by/(used for) operating
activities
2,620
1,517
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures
(779)
(632)
Payments to acquire business, net of cash
acquired
—
(481)
Proceeds from sale of business, net of
cash disposed and working capital adjustments
—
(20)
Other investing activities, net
41
95
Net cash provided by/(used for) investing
activities
(738)
(1,038)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments of long-term debt
(823)
(1,157)
Proceeds from issuance of long-term
debt
657
—
Debt prepayment and extinguishment
(benefit)/costs
—
(17)
Proceeds from issuance of commercial
paper
—
228
Repayments of commercial paper
—
(228)
Dividends paid
(1,474)
(1,470)
Other financing activities, net
(176)
(167)
Net cash provided by/(used for) financing
activities
(1,816)
(2,811)
Effect of exchange rate changes on cash,
cash equivalents, and restricted cash
(53)
(116)
Cash, cash equivalents, and restricted
cash
Net increase/(decrease)
13
(2,448)
Balance at beginning of period
1,041
3,446
Balance at end of period
$
1,054
$
998
Schedule 16
The Kraft Heinz Company
Reconciliation of Net Cash
Provided By/(Used For) Operating Activities to Free Cash Flow
(in millions)
(Unaudited)
For the Nine Months
Ended
September 30, 2023
September 24, 2022
Net cash provided by/(used for) operating
activities
$
2,620
$
1,517
Capital expenditures
(779)
(632)
Free Cash Flow
$
1,841
$
885
Schedule 17
The Kraft Heinz Company
Reconciliation of Net
Income/(Loss) to Adjusted EBITDA
(dollars in millions)
(Unaudited)
For the Three Months
Ended
For the Twelve Months
Ended
December 31,
2022
April 1, 2023
July 1, 2023
September 30,
2023
September 30,
2023
Net income/(loss)
$
887
$
837
$
998
$
254
$
2,976
Interest expense
217
227
228
228
900
Other expense/(income)
(42)
(35)
(24)
(35)
(136)
Provision for/(benefit from) income
taxes
164
214
174
206
758
Operating income/(loss)
1,226
1,243
1,376
653
4,498
Depreciation and amortization (excluding
restructuring activities)
246
217
229
234
926
Divestiture-related license income
(15)
(13)
(14)
(14)
(56)
Restructuring activities
36
(10)
(10)
45
61
Deal costs
1
—
—
—
1
Unrealized losses/(gains) on commodity
hedges
(2)
11
(16)
(48)
(55)
Impairment losses
—
—
—
662
662
Certain non-ordinary course legal and
regulatory matters
210
1
1
—
212
Equity award compensation expense
41
31
46
33
151
Adjusted EBITDA
$
1,743
$
1,480
$
1,612
$
1,565
$
6,400
Current portion of long-term debt
608
Long-term debt
19,270
Less: Cash and cash equivalents
(1,052)
$
18,826
Net Leverage
2.9
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231101554479/en/
Alex Abraham (media) Alex.Abraham@kraftheinz.com
Anne-Marie Megela (investors) ir@kraftheinz.com
Kraft Heinz (NASDAQ:KHC)
過去 株価チャート
から 6 2024 まで 7 2024
Kraft Heinz (NASDAQ:KHC)
過去 株価チャート
から 7 2023 まで 7 2024