UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 17, 2024
The Kraft Heinz Co mpany
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) | ||||||
(Address of principal executive offices, including zip code)
(412 ) 456-5700
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
| Floating Rate Senior Notes due 2025 | KHC25 | The Nasdaq Stock Market LLC | ||||||
| 3.500% Senior Notes due 2029 | KHC29 | The Nasdaq Stock Market LLC | ||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 8.01. Other Events.
Change in Segments:
In the first quarter of 2024, The Kraft Heinz Company (the "Company") made changes to its internal reporting and reportable segments. The Company divided its International segment into three operating segments — Europe and Pacific Developed Markets (“International Developed Markets”), West and East Emerging Markets (“WEEM”), and Asia Emerging Markets (“AEM”) — to enable enhanced focus on the different strategies required for each of these regions as part of the Company's long-term strategic plan.
Subsequently, the Company manages its operating results through four operating segments. The Company has two reportable segments defined by geographic region: North America and International Developed Markets. The Company's two remaining operating segments, consisting of WEEM and AEM, are combined and disclosed as Emerging Markets. Prior to the reorganization of its segments in the first quarter of 2024, the Company managed and reported its operating results through two reportable segments defined by geographic region: North America and International.
Change in Measure of Segment Profitability:
In the first quarter of 2024, the Company's management reevaluated and changed the primary measure utilized to evaluate segment profitability from Segment Adjusted EBITDA to Segment Adjusted Operating Income. This change is expected to allow the Company's management to better evaluate segment performance in line with its long-term strategic plan. The Company's management evaluates segment performance based on several factors, including net sales, Organic Net Sales, and Segment Adjusted Operating Income. Organic Net Sales is a non-GAAP financial measure. See Non-GAAP Financial Measures in Exhibit 99.1 to this Current Report on Form 8-K for additional information.
The Company is providing supplemental historical segment financial information that conforms to the new reportable segment structure in Exhibit 99.1 hereto.
Item 9.01. Financial Statements and Exhibits.
(d) The following exhibit is furnished with this Current Report on Form 8-K.
| Exhibit No. | Description | |||||||
| 99.1 | ||||||||
| 104 | The cover page of The Kraft Heinz Company's Current Report on Form 8-K dated | |||||||
1
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| The Kraft Heinz Company | ||||||||
Date: | By: | /s/ Andre Maciel | ||||||
| Andre Maciel | ||||||||
| Executive Vice President and Global Chief Financial Officer | ||||||||
2
Exhibit 99.1
SUPPLEMENTAL HISTORICAL SEGMENT FINANCIAL INFORMATION AND SUPPLEMENTAL NON-GAAP FINANCIAL INFORMATION
Table of Contents
| Page No. | |||||
Unless the context otherwise requires, the terms “we,” “us,” “our,” “Kraft Heinz,” and the “Company” each refer to The Kraft Heinz Company and all of its consolidated subsidiaries. Unless the context otherwise requires, references to years and quarters contained herein pertain to our fiscal years and fiscal quarters.
Forward-Looking Statements
This supplemental information contains a number of forward-looking statements. Words such as “believe,” “evaluate,” “expect,” “grow,” “plan,” “reflect,” “will,” and variations of such words and similar future or conditional expressions are intended to identify forward-looking statements. These forward-looking statements include, but are not limited to, statements regarding our plans, impacts of accounting standards and guidance, growth, legal matters, taxes, costs and cost savings, impairments, and dividends. 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 our control.
Important factors that may affect our 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; our 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 our relationships with significant customers or suppliers, or in other business relationships; our ability to maintain, extend, and expand our reputation and brand image; our ability to leverage our brand value to compete against private label products; our ability to drive revenue growth in our key product categories or platforms, increase our 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; our ability to identify, complete, or realize the benefits from strategic acquisitions, divestitures, alliances, joint ventures, or investments; our ability to successfully execute our strategic initiatives; the impacts of our international operations; our ability to protect intellectual property rights; our ability to realize the anticipated benefits from prior or future streamlining actions to reduce fixed costs, simplify or improve processes, and improve our competitiveness; the influence of our largest stockholder; our 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 our credit rating; the impact of sales of our common stock in the public market; the impact of our share repurchases or any change in our share repurchase activity; our 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 we or our customers, suppliers, distributors, or regulators operate; economic and political conditions in the United States and various other nations where we do business (including inflationary pressures, instability in financial institutions, general economic slowdown, recession, or a potential U.S. federal government shutdown); changes in our management team or other key personnel and our 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 our forward-looking statements, see Item 1A, Risk Factors, in our Annual Report on Form 10-K for the year ended December 30, 2023. We disclaim and do not undertake any obligation to update, revise, or withdraw any forward-looking statement in this supplemental information, except as required by applicable law or regulation.
1
Introduction
Background:
In the first quarter of 2024, we reorganized our segments and management changed the primary measure utilized to evaluate segment performance. For informational purposes only, we have provided this supplemental information to present the effects of these changes to certain previously disclosed financial information, including certain unaudited information related to our results of operations by segment and non-GAAP financial measures, as well as to present the new segment profitability measure for the years ended December 30, 2023, December 31, 2022, and December 25, 2021, as well as each of the quarters ended December 30, 2023, September 30, 2023, July 1, 2023, and April 1, 2023. These changes had no impact on our condensed consolidated financial statements for any of the periods presented in our Quarterly Reports on Form 10-Q or our consolidated financial statements for any of the periods presented in our Annual Report on Form 10-K for the year ended December 30, 2023 filed on February 15, 2024 (“2023 Form 10-K”).
The following unaudited financial information is based on our historical financial statements after giving effect to the segment reorganization and the change in the measure of segment profitability in the first quarter of 2024. You should read this supplemental information together with our audited consolidated financial statements and related Notes to Consolidated Financial Statements in our 2023 Form 10-K. The financial information contained in this supplemental information is not indicative of future or annual results.
Change in Segments:
As previously described in our 2023 Form 10-K, prior to the reorganization of our segments in the first quarter of 2024, we managed and reported our operating results through two reportable segments defined by geographic region: North America and International.
In the first quarter of 2024, our internal reporting and reportable segments changed. We divided our International segment into three operating segments — Europe and Pacific Developed Markets (“International Developed Markets”), West and East Emerging Markets (“WEEM”), and Asia Emerging Markets (“AEM”) — to enable enhanced focus on the different strategies required for each of these regions as part of our long-term strategic plan.
Subsequently, we manage our operating results through four operating segments. We have two reportable segments defined by geographic region: North America and International Developed Markets. Our two remaining operating segments, consisting of WEEM and AEM, are combined and disclosed as Emerging Markets.
Change in Measure of Segment Profitability:
In the first quarter of 2024, following changes to our segments, management reevaluated and changed the primary measure utilized to evaluate segment profitability from Segment Adjusted EBITDA to Segment Adjusted Operating Income. This change is expected to allow management to better evaluate segment performance in line with our long-term strategic plan. Management evaluates segment performance based on several factors, including net sales, Organic Net Sales, and Segment Adjusted Operating Income. Organic Net Sales is a non-GAAP financial measure. See the Non-GAAP Financial Measures section for additional information.
As part of the segment reorganization, management reallocated certain corporate expenses previously reported within our International segment to general corporate expenses. This reflects management’s approach to centrally manage these expenses. We have reflected this reallocation in all historical periods presented.
Results of Operations by Segment
In this supplemental information, in addition to results prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”), we disclose certain non-GAAP financial measures. These non-GAAP financial measures assist management in comparing our 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 our underlying operations. See the Non-GAAP Financial Measures section for additional information and reconciliations from GAAP financial measures.
2
Management evaluates segment performance based on several factors, including net sales, Organic Net Sales, and Segment Adjusted Operating Income. Organic Net Sales is a non-GAAP financial measure. See the Non-GAAP Financial Measures section for additional information. Segment 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. Segment Adjusted Operating Income for Emerging Markets, which represents the aggregation 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. Segment Adjusted Operating Income is a financial measure that can assist management and investors in comparing our performance on a consistent basis by removing the impact of certain items that management believes do not directly reflect our underlying operations. Management also uses Segment Adjusted Operating Income to allocate resources.
2023 Compared to 2022 | 2022 Compared to 2021 | ||||||||||||||||||||||
| For the Year Ended | |||||||||||||||||||||||
| December 30, 2023 | December 31, 2022 | December 31, 2022 | December 25, 2021 | ||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||
| North America | |||||||||||||||||||||||
| Net sales | $ | 20,126 | $ | 20,340 | $ | 20,340 | $ | 20,351 | |||||||||||||||
Organic Net Sales(a) | 20,191 | 19,983 | 20,050 | 18,361 | |||||||||||||||||||
| Segment Adjusted Operating Income | 5,050 | 4,735 | 4,735 | 4,953 | |||||||||||||||||||
| International Developed Markets | |||||||||||||||||||||||
| Net sales | 3,623 | 3,401 | 3,401 | 3,405 | |||||||||||||||||||
Organic Net Sales(a) | 3,631 | 3,315 | 3,655 | 3,350 | |||||||||||||||||||
| Segment Adjusted Operating Income | 522 | 522 | 522 | 642 | |||||||||||||||||||
Emerging Markets(b) | |||||||||||||||||||||||
| Net sales | 2,891 | 2,744 | 2,744 | 2,286 | |||||||||||||||||||
Organic Net Sales(a) | 2,952 | 2,591 | 2,544 | 2,206 | |||||||||||||||||||
| Segment Adjusted Operating Income | 376 | 319 | 319 | 286 | |||||||||||||||||||
(a) Organic Net Sales is a non-GAAP financial measure. See the Non-GAAP Financial Measures section for more information.
(b) Emerging Markets represents the aggregation of our WEEM and AEM operating segments.
| For the Three Months Ended | |||||||||||||||||||||||
| December 30, 2023 | September 30, 2023 | July 1, 2023 | April 1, 2023 | ||||||||||||||||||||
| North America | |||||||||||||||||||||||
| Net sales | $ | 5,167 | $ | 4,995 | $ | 5,079 | $ | 4,885 | |||||||||||||||
Organic Net Sales(a) | 5,168 | 5,009 | 5,103 | 4,911 | |||||||||||||||||||
| Segment Adjusted Operating Income | 1,349 | 1,245 | 1,247 | 1,209 | |||||||||||||||||||
| International Developed Markets | |||||||||||||||||||||||
| Net sales | 948 | 883 | 932 | 860 | |||||||||||||||||||
Organic Net Sales(a) | 912 | 852 | 948 | 919 | |||||||||||||||||||
| Segment Adjusted Operating Income | 146 | 129 | 140 | 107 | |||||||||||||||||||
Emerging Markets(b) | |||||||||||||||||||||||
| Net sales | 745 | 692 | 710 | 744 | |||||||||||||||||||
Organic Net Sales(a) | 768 | 721 | 726 | 737 | |||||||||||||||||||
| Segment Adjusted Operating Income | 90 | 88 | 97 | 101 | |||||||||||||||||||
(a) Organic Net Sales is a non-GAAP financial measure. See the Non-GAAP Financial Measures section for more information.
(b) Emerging Markets represents the aggregation of our WEEM and AEM operating segments.
3
Non-GAAP Financial Measures
The non-GAAP financial measures we provide in this supplemental information should be viewed in addition to, and not as an alternative for, results prepared in accordance with GAAP.
To supplement the GAAP financial information provided, we have presented Organic Net Sales, Adjusted Operating Income, and Constant Currency Adjusted Operating Income, 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, operating income/(loss), 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 our 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 our underlying operations. We believe that Organic Net Sales, Adjusted Operating Income, and Constant Currency Adjusted Operating Income provide important comparability of underlying operating results, allowing investors and management to assess the Company’s operating performance on a consistent basis. Management believes that presenting our non-GAAP financial measures (i.e., Organic Net Sales, Adjusted Operating Income, and Constant Currency Adjusted Operating Income) 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 our results. We believe 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 our business than could be obtained absent these disclosures.
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. We calculate 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 we calculate 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. We also present Adjusted Operating Income on a constant currency basis. We calculate 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 we calculate the previous year’s results using the current year’s exchange rate.
4
The Kraft Heinz Company
Reconciliation of Net Sales to Organic Net Sales
For the Year Ended
(dollars in millions)
(Unaudited)
| Net Sales | Currency | Acquisitions and Divestitures | 53rd Week | Organic Net Sales | |||||||||||||||||||||||||
December 30, 2023 | |||||||||||||||||||||||||||||
| North America | $ | 20,126 | $ | (65) | $ | — | $ | — | $ | 20,191 | |||||||||||||||||||
| International Developed Markets | 3,623 | (15) | 7 | — | 3,631 | ||||||||||||||||||||||||
| Emerging Markets | 2,891 | (88) | 27 | — | 2,952 | ||||||||||||||||||||||||
| Kraft Heinz | $ | 26,640 | $ | (168) | $ | 34 | $ | — | $ | 26,774 | |||||||||||||||||||
December 31, 2022 | |||||||||||||||||||||||||||||
| North America | $ | 20,340 | $ | — | $ | — | $ | 357 | $ | 19,983 | |||||||||||||||||||
| International Developed Markets | 3,401 | — | 30 | 56 | 3,315 | ||||||||||||||||||||||||
| Emerging Markets | 2,744 | 82 | 30 | 41 | 2,591 | ||||||||||||||||||||||||
| Kraft Heinz | $ | 26,485 | $ | 82 | $ | 60 | $ | 454 | $ | 25,889 | |||||||||||||||||||
| Year-over-year growth rates | |||||||||||||||||||||||||||||
| North America | (1.0) | % | (0.3) pp | 0.0 pp | (1.7) pp | 1.0 | % | ||||||||||||||||||||||
| International Developed Markets | 6.5 | % | (0.5) pp | (0.7) pp | (1.8) pp | 9.5 | % | ||||||||||||||||||||||
| Emerging Markets | 5.4 | % | (6.6) pp | (0.2) pp | (1.7) pp | 13.9 | % | ||||||||||||||||||||||
| Kraft Heinz | 0.6 | % | (0.9) pp | (0.1) pp | (1.8) pp | 3.4 | % | ||||||||||||||||||||||
5
The Kraft Heinz Company
Reconciliation of Net Sales to Organic Net Sales
For the Year Ended
(dollars in millions)
(Unaudited)
| Net Sales | Currency | Acquisitions and Divestitures | 53rd Week | Organic Net Sales | |||||||||||||||||||||||||
December 31, 2022 | |||||||||||||||||||||||||||||
| North America | $ | 20,340 | $ | (67) | $ | — | $ | 357 | $ | 20,050 | |||||||||||||||||||
| International Developed Markets | 3,401 | (385) | 75 | 56 | 3,655 | ||||||||||||||||||||||||
| Emerging Markets | 2,744 | (45) | 204 | 41 | 2,544 | ||||||||||||||||||||||||
| Kraft Heinz | $ | 26,485 | $ | (497) | $ | 279 | $ | 454 | $ | 26,249 | |||||||||||||||||||
December 25, 2021 | |||||||||||||||||||||||||||||
| North America | $ | 20,351 | $ | — | $ | 1,990 | $ | — | $ | 18,361 | |||||||||||||||||||
| International Developed Markets | 3,405 | — | 55 | — | 3,350 | ||||||||||||||||||||||||
| Emerging Markets | 2,286 | 26 | 54 | — | 2,206 | ||||||||||||||||||||||||
| Kraft Heinz | $ | 26,042 | $ | 26 | $ | 2,099 | $ | — | $ | 23,917 | |||||||||||||||||||
| Year-over-year growth rates | |||||||||||||||||||||||||||||
| North America | (0.1) | % | (0.4) pp | (10.8) pp | 1.9 pp | 9.2 | % | ||||||||||||||||||||||
| International Developed Markets | (0.1) | % | (11.3) pp | 0.4 pp | 1.7 pp | 9.1 | % | ||||||||||||||||||||||
| Emerging Markets | 20.0 | % | (3.4) pp | 6.2 pp | 1.8 pp | 15.4 | % | ||||||||||||||||||||||
| Kraft Heinz | 1.7 | % | (2.0) pp | (8.0) pp | 1.9 pp | 9.8 | % | ||||||||||||||||||||||
6
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 | 53rd Week | Organic Net Sales | |||||||||||||||||||||||||
December 30, 2023 | |||||||||||||||||||||||||||||
| North America | $ | 5,167 | $ | (1) | $ | — | $ | — | $ | 5,168 | |||||||||||||||||||
| International Developed Markets | 948 | 36 | — | — | 912 | ||||||||||||||||||||||||
| Emerging Markets | 745 | (23) | — | — | 768 | ||||||||||||||||||||||||
| Kraft Heinz | $ | 6,860 | $ | 12 | $ | — | $ | — | $ | 6,848 | |||||||||||||||||||
December 31, 2022 | |||||||||||||||||||||||||||||
| North America | $ | 5,684 | $ | — | $ | — | $ | 357 | $ | 5,327 | |||||||||||||||||||
| International Developed Markets | 946 | — | 6 | 56 | 884 | ||||||||||||||||||||||||
| Emerging Markets | 751 | 25 | 1 | 41 | 684 | ||||||||||||||||||||||||
| Kraft Heinz | $ | 7,381 | $ | 25 | $ | 7 | $ | 454 | $ | 6,895 | |||||||||||||||||||
| Year-over-year growth rates | |||||||||||||||||||||||||||||
| North America | (9.1) | % | 0.0 pp | 0.0 pp | (6.1) pp | (3.0) | % | ||||||||||||||||||||||
| International Developed Markets | 0.1 | % | 3.8 pp | (0.6) pp | (6.2) pp | 3.1 | % | ||||||||||||||||||||||
| Emerging Markets | (0.7) | % | (6.6) pp | (0.1) pp | (6.3) pp | 12.3 | % | ||||||||||||||||||||||
| Kraft Heinz | (7.1) | % | (0.2) pp | (0.1) pp | (6.1) pp | (0.7) | % | ||||||||||||||||||||||
7
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 | ||||||||||||||||||||
September 30, 2023 | |||||||||||||||||||||||
| North America | $ | 4,995 | $ | (14) | $ | — | $ | 5,009 | |||||||||||||||
| International Developed Markets | 883 | 31 | — | 852 | |||||||||||||||||||
| Emerging Markets | 692 | (29) | — | 721 | |||||||||||||||||||
| Kraft Heinz | $ | 6,570 | $ | (12) | $ | — | $ | 6,582 | |||||||||||||||
| September 24, 2022 | |||||||||||||||||||||||
| North America | $ | 5,016 | $ | — | $ | — | $ | 5,016 | |||||||||||||||
| International Developed Markets | 805 | — | 4 | 801 | |||||||||||||||||||
| Emerging Markets | 684 | 21 | 8 | 655 | |||||||||||||||||||
| 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) | % | |||||||||||||||||
| International Developed Markets | 9.7 | % | 3.8 pp | (0.6) pp | 6.5 | % | |||||||||||||||||
| Emerging Markets | 1.0 | % | (7.6) pp | (1.3) pp | 9.9 | % | |||||||||||||||||
| Kraft Heinz | 1.0 | % | (0.5) pp | (0.2) pp | 1.7 | % | |||||||||||||||||
8
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 | ||||||||||||||||||||
July 1, 2023 | |||||||||||||||||||||||
| North America | $ | 5,079 | $ | (24) | $ | — | $ | 5,103 | |||||||||||||||
| International Developed Markets | 932 | (16) | — | 948 | |||||||||||||||||||
| Emerging Markets | 710 | (24) | 8 | 726 | |||||||||||||||||||
| Kraft Heinz | $ | 6,721 | $ | (64) | $ | 8 | $ | 6,777 | |||||||||||||||
| June 25, 2022 | |||||||||||||||||||||||
| North America | $ | 5,039 | $ | — | $ | — | $ | 5,039 | |||||||||||||||
| International Developed Markets | 831 | — | 6 | 825 | |||||||||||||||||||
| Emerging Markets | 684 | 20 | 10 | 654 | |||||||||||||||||||
| Kraft Heinz | $ | 6,554 | $ | 20 | $ | 16 | $ | 6,518 | |||||||||||||||
| Year-over-year growth rates | |||||||||||||||||||||||
| North America | 0.8 | % | (0.5) pp | 0.0 pp | 1.3 | % | |||||||||||||||||
| International Developed Markets | 12.2 | % | (1.9) pp | (0.9) pp | 15.0 | % | |||||||||||||||||
| Emerging Markets | 3.9 | % | (6.7) pp | (0.4) pp | 11.0 | % | |||||||||||||||||
| Kraft Heinz | 2.6 | % | (1.2) pp | (0.2) pp | 4.0 | % | |||||||||||||||||
9
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 | ||||||||||||||||||||
April 1, 2023 | |||||||||||||||||||||||
| North America | $ | 4,885 | $ | (26) | $ | — | $ | 4,911 | |||||||||||||||
| International Developed Markets | 860 | (66) | 7 | 919 | |||||||||||||||||||
| Emerging Markets | 744 | (12) | 19 | 737 | |||||||||||||||||||
| Kraft Heinz | $ | 6,489 | $ | (104) | $ | 26 | $ | 6,567 | |||||||||||||||
| March 26, 2022 | |||||||||||||||||||||||
| North America | $ | 4,601 | $ | — | $ | — | $ | 4,601 | |||||||||||||||
| International Developed Markets | 819 | — | 14 | 805 | |||||||||||||||||||
| Emerging Markets | 625 | 16 | 11 | 598 | |||||||||||||||||||
| Kraft Heinz | $ | 6,045 | $ | 16 | $ | 25 | $ | 6,004 | |||||||||||||||
| Year-over-year growth rates | |||||||||||||||||||||||
| North America | 6.2 | % | (0.5) pp | 0.0 pp | 6.7 | % | |||||||||||||||||
| International Developed Markets | 5.0 | % | (8.0) pp | (1.1) pp | 14.1 | % | |||||||||||||||||
| Emerging Markets | 19.0 | % | (5.3) pp | 0.8 pp | 23.5 | % | |||||||||||||||||
| Kraft Heinz | 7.3 | % | (2.1) pp | 0.0 pp | 9.4 | % | |||||||||||||||||
10
The Kraft Heinz Company
Reconciliation of Operating Income/(Loss) to Adjusted Operating Income
For the Year Ended
(dollars in millions)
(Unaudited)
| December 30, 2023 | December 31, 2022 | December 25, 2021 | |||||||||||||||
| Operating income/(loss) | $ | 4,572 | $ | 3,634 | $ | 3,460 | |||||||||||
| Restructuring activities | 60 | 74 | 84 | ||||||||||||||
| Deal costs | — | 9 | 11 | ||||||||||||||
| Unrealized losses/(gains) on commodity hedges | 1 | 63 | 17 | ||||||||||||||
| Impairment losses | 662 | 999 | 1,634 | ||||||||||||||
| Certain non-ordinary course legal and regulatory matters | 2 | 210 | 62 | ||||||||||||||
| Adjusted Operating Income | $ | 5,297 | $ | 4,989 | $ | 5,268 | |||||||||||
11
The Kraft Heinz Company
Reconciliation of Operating Income/(Loss) to Adjusted Operating Income
For the Three Months Ended
(dollars in millions)
(Unaudited)
| December 30, 2023 | September 30, 2023 | July 1, 2023 | April 1, 2023 | ||||||||||||||||||||
| Operating income/(loss) | $ | 1,300 | $ | 653 | $ | 1,376 | $ | 1,243 | |||||||||||||||
| Restructuring activities | 35 | 45 | (10) | (10) | |||||||||||||||||||
| Unrealized losses/(gains) on commodity hedges | 54 | (48) | (16) | 11 | |||||||||||||||||||
| Impairment losses | — | 662 | — | — | |||||||||||||||||||
| Certain non-ordinary course legal and regulatory matters | — | — | 1 | 1 | |||||||||||||||||||
| Adjusted Operating Income | $ | 1,389 | $ | 1,312 | $ | 1,351 | $ | 1,245 | |||||||||||||||
12
The Kraft Heinz Company
Reconciliation of Operating Income/(Loss) to Adjusted Operating Income
For the Three Months Ended
(dollars in millions)
(Unaudited)
| December 31, 2022 | September 24, 2022 | June 25, 2022 | March 26, 2022 | ||||||||||||||||||||
| Operating income/(loss) | $ | 1,226 | $ | 751 | $ | 542 | $ | 1,115 | |||||||||||||||
| Restructuring activities | 36 | 8 | 11 | 19 | |||||||||||||||||||
| Deal costs | 1 | — | — | 8 | |||||||||||||||||||
| Unrealized losses/(gains) on commodity hedges | (2) | 84 | 73 | (92) | |||||||||||||||||||
| Impairment losses | — | 314 | 630 | 55 | |||||||||||||||||||
| Certain non-ordinary course legal and regulatory matters | 210 | — | — | — | |||||||||||||||||||
| Adjusted Operating Income | $ | 1,471 | $ | 1,157 | $ | 1,256 | $ | 1,105 | |||||||||||||||
13
The Kraft Heinz Company
Reconciliation of Adjusted Operating Income to
Constant Currency Adjusted Operating Income
For the Year Ended
(dollars in millions)
(Unaudited)
| Adjusted Operating Income | Currency | Constant Currency Adjusted Operating Income | |||||||||||||||
December 30, 2023 | |||||||||||||||||
| North America | $ | 5,050 | $ | (14) | $ | 5,064 | |||||||||||
| International Developed Markets | 522 | — | 522 | ||||||||||||||
| Emerging Markets | 376 | (25) | 401 | ||||||||||||||
| General corporate expenses | (651) | (3) | (648) | ||||||||||||||
| Kraft Heinz | $ | 5,297 | $ | (42) | $ | 5,339 | |||||||||||
December 31, 2022 | |||||||||||||||||
| North America | $ | 4,735 | $ | — | $ | 4,735 | |||||||||||
| International Developed Markets | 522 | — | 522 | ||||||||||||||
| Emerging Markets | 319 | 16 | 303 | ||||||||||||||
| General corporate expenses | (587) | — | (587) | ||||||||||||||
| Kraft Heinz | $ | 4,989 | $ | 16 | $ | 4,973 | |||||||||||
| Year-over-year growth rates | |||||||||||||||||
| North America | 6.7 | % | (0.3) pp | 7.0 | % | ||||||||||||
| International Developed Markets | — | % | (0.1) pp | 0.1 | % | ||||||||||||
| Emerging Markets | 17.6 | % | (14.1) pp | 31.7 | % | ||||||||||||
| General corporate expenses | 11.0 | % | 0.5 pp | 10.5 | % | ||||||||||||
| Kraft Heinz | 6.2 | % | (1.2) pp | 7.4 | % | ||||||||||||
14
The Kraft Heinz Company
Reconciliation of Adjusted Operating Income to
Constant Currency Adjusted Operating Income
For the Year Ended
(dollars in millions)
(Unaudited)
| Adjusted Operating Income | Currency | Constant Currency Adjusted Operating Income | |||||||||||||||
December 31, 2022 | |||||||||||||||||
| North America | $ | 4,735 | $ | (14) | $ | 4,749 | |||||||||||
| International Developed Markets | 522 | (78) | 600 | ||||||||||||||
| Emerging Markets | 319 | (5) | 324 | ||||||||||||||
| General corporate expenses | (587) | 20 | (607) | ||||||||||||||
| Kraft Heinz | $ | 4,989 | $ | (77) | $ | 5,066 | |||||||||||
December 25, 2021 | |||||||||||||||||
| North America | $ | 4,953 | $ | — | $ | 4,953 | |||||||||||
| International Developed Markets | 642 | — | 642 | ||||||||||||||
| Emerging Markets | 286 | 5 | 281 | ||||||||||||||
| General corporate expenses | (613) | — | (613) | ||||||||||||||
| Kraft Heinz | $ | 5,268 | $ | 5 | $ | 5,263 | |||||||||||
| Year-over-year growth rates | |||||||||||||||||
| North America | (4.4) | % | (0.3) pp | (4.1) | % | ||||||||||||
| International Developed Markets | (18.7) | % | (12.2) pp | (6.5) | % | ||||||||||||
| Emerging Markets | 11.7 | % | (3.6) pp | 15.3 | % | ||||||||||||
| General corporate expenses | (4.3) | % | (3.3) pp | (1.0) | % | ||||||||||||
| Kraft Heinz | (5.3) | % | (1.6) pp | (3.7) | % | ||||||||||||
15
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 | |||||||||||||||
| December 30, 2023 | |||||||||||||||||
| North America | $ | 1,349 | $ | — | $ | 1,349 | |||||||||||
| International Developed Markets | 146 | 9 | 137 | ||||||||||||||
| Emerging Markets | 90 | (6) | 96 | ||||||||||||||
| General corporate expenses | (196) | (3) | (193) | ||||||||||||||
| Kraft Heinz | $ | 1,389 | $ | — | $ | 1,389 | |||||||||||
| December 31, 2022 | |||||||||||||||||
| North America | $ | 1,409 | $ | — | $ | 1,409 | |||||||||||
| International Developed Markets | 154 | — | 154 | ||||||||||||||
| Emerging Markets | 96 | 5 | 91 | ||||||||||||||
| General corporate expenses | (188) | — | (188) | ||||||||||||||
| Kraft Heinz | $ | 1,471 | $ | 5 | $ | 1,466 | |||||||||||
| Year-over-year growth rates | |||||||||||||||||
| North America | (4.2) | % | 0.0 pp | (4.2) | % | ||||||||||||
| International Developed Markets | (4.9) | % | 5.9 pp | (10.8) | % | ||||||||||||
| Emerging Markets | (7.6) | % | (12.0) pp | 4.4 | % | ||||||||||||
| General corporate expenses | 4.4 | % | 1.5 pp | 2.9 | % | ||||||||||||
| Kraft Heinz | (5.6) | % | (0.3) pp | (5.3) | % | ||||||||||||
16
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 30, 2023 | |||||||||||||||||
| North America | $ | 1,245 | $ | (4) | $ | 1,249 | |||||||||||
| International Developed Markets | 129 | 8 | 121 | ||||||||||||||
| Emerging Markets | 88 | (10) | 98 | ||||||||||||||
| General corporate expenses | (150) | (3) | (147) | ||||||||||||||
| Kraft Heinz | $ | 1,312 | $ | (9) | $ | 1,321 | |||||||||||
| September 24, 2022 | |||||||||||||||||
| North America | $ | 1,077 | $ | — | $ | 1,077 | |||||||||||
| International Developed Markets | 113 | — | 113 | ||||||||||||||
| Emerging Markets | 75 | 4 | 71 | ||||||||||||||
| General corporate expenses | (108) | — | (108) | ||||||||||||||
| Kraft Heinz | $ | 1,157 | $ | 4 | $ | 1,153 | |||||||||||
| Year-over-year growth rates | |||||||||||||||||
| North America | 15.6 | % | (0.4) pp | 16.0 | % | ||||||||||||
| International Developed Markets | 14.6 | % | 7.1 pp | 7.5 | % | ||||||||||||
| Emerging Markets | 17.2 | % | (20.5) pp | 37.7 | % | ||||||||||||
| General corporate expenses | 38.9 | % | 2.8 pp | 36.1 | % | ||||||||||||
| Kraft Heinz | 13.5 | % | (1.1) pp | 14.6 | % | ||||||||||||
17
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 | |||||||||||||||
| July 1, 2023 | |||||||||||||||||
| North America | $ | 1,247 | $ | (5) | $ | 1,252 | |||||||||||
| International Developed Markets | 140 | (2) | 142 | ||||||||||||||
| Emerging Markets | 97 | (7) | 104 | ||||||||||||||
| General corporate expenses | (133) | (1) | (132) | ||||||||||||||
| Kraft Heinz | $ | 1,351 | $ | (15) | $ | 1,366 | |||||||||||
| June 25, 2022 | |||||||||||||||||
| North America | $ | 1,207 | $ | — | $ | 1,207 | |||||||||||
| International Developed Markets | 127 | — | 127 | ||||||||||||||
| Emerging Markets | 75 | 5 | 70 | ||||||||||||||
| General corporate expenses | (153) | — | (153) | ||||||||||||||
| Kraft Heinz | $ | 1,256 | $ | 5 | $ | 1,251 | |||||||||||
| Year-over-year growth rates | |||||||||||||||||
| North America | 3.4 | % | (0.4) pp | 3.8 | % | ||||||||||||
| International Developed Markets | 9.8 | % | (2.2) pp | 12.0 | % | ||||||||||||
| Emerging Markets | 30.7 | % | (16.4) pp | 47.1 | % | ||||||||||||
| General corporate expenses | (13.2) | % | 0.0 pp | (13.2) | % | ||||||||||||
| Kraft Heinz | 7.7 | % | (1.4) pp | 9.1 | % | ||||||||||||
18
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 | |||||||||||||||
| April 1, 2023 | |||||||||||||||||
| North America | $ | 1,209 | $ | (5) | $ | 1,214 | |||||||||||
| International Developed Markets | 107 | (15) | 122 | ||||||||||||||
| Emerging Markets | 101 | (2) | 103 | ||||||||||||||
| General corporate expenses | (172) | 4 | (176) | ||||||||||||||
| Kraft Heinz | $ | 1,245 | $ | (18) | $ | 1,263 | |||||||||||
| March 26, 2022 | |||||||||||||||||
| North America | $ | 1,042 | $ | — | $ | 1,042 | |||||||||||
| International Developed Markets | 128 | — | 128 | ||||||||||||||
| Emerging Markets | 73 | 2 | 71 | ||||||||||||||
| General corporate expenses | (138) | — | (138) | ||||||||||||||
| Kraft Heinz | $ | 1,105 | $ | 2 | $ | 1,103 | |||||||||||
| Year-over-year growth rates | |||||||||||||||||
| North America | 16.0 | % | (0.5) pp | 16.5 | % | ||||||||||||
| International Developed Markets | (16.8) | % | (11.7) pp | (5.1) | % | ||||||||||||
| Emerging Markets | 38.2 | % | (7.3) pp | 45.5 | % | ||||||||||||
| General corporate expenses | 24.7 | % | (2.2) pp | 26.9 | % | ||||||||||||
| Kraft Heinz | 12.6 | % | (1.9) pp | 14.5 | % | ||||||||||||
19