Kraft Heinz (KHC) Maintains FY23 EPS Guidance

The Kraft Heinz Company (Nasdaq: KHC) (“Kraft Heinz” or the “Company”) will today discuss progress the Company is making against its strategic transformation plan and long-term growth algorithm at the 2023 Consumer Analyst Group of New York (CAGNY) Conference.

Miguel Patricio, CEO and Board Chair; Carlos Abrams-Rivera, EVP & President, North America; Rafa Oliveira, EVP & President, International Markets; and Andre Maciel, EVP & Global CFO, will discuss how the Company is accelerating profitable growth and driving innovation to deliver stockholder value over the long term.

“We entered the final stage of our transformation in 2022, with a focus on enhancing our Agile@Scale capabilities through partnerships with technology giants and cutting-edge innovators,” said Patricio. “We’ve made incredible progress in developing best-in-class systems across the Company, and through our refreshed product portfolio and improved financial flexibility, I am more confident than ever in our ability to drive sustainable growth and, ultimately, to lead the future of food.”

The Company will detail how it expects to increase Organic Net Sales growth, with approximately one third growth coming from each of the three pillars – U.S. Retail in the North America Zone, Global Foodservice, and Emerging Markets in the International Zone – and its focus on GROW platforms, especially Taste Elevation and Easy Meals Made Better.

Pillars of Growth

The Company will provide several examples of how it is renovating its iconic brands, delivering innovation, leading with disruptive marketing, and optimizing sales execution.

“U.S. Retail is a must-win for us,” said Abrams-Rivera. “We’ve breathed new life into our brands through renovation, and we must now innovate to meet future needs of consumers. We’re approaching product innovation in an entirely new way, including a new internal/external partnership ecosystem to drive speed, capability, and scale. As we play at the intersection of food and technology, we see the opportunity for $2 billion in incremental net sales from innovation in North America Retail from 2023 to 2027.”

The Company will also share how it expects Foodservice to be a global engine for growth. New quick-service restaurant (QSR) wins and incremental sales from new channels like schools are expected to help Foodservice grow sales and capture market share in North America at a compounded annual growth rate of approximately 5%. In the International Zone, global QSR partnerships and the Chef-Led Foodservice Sales Model are expected to spark an approximately 10% net sales compounded annual growth rate over the next four years.

Within Emerging Markets in the International Zone, the Company will outline significant growth opportunities it sees as it targets to grow net sales at a 13% compounded annual growth rate. Kraft Heinz will also provide updates on its Go-to-Market Model, a bespoke service model designed to help the Company enter new markets, which has proven to help accelerate growth where it has been implemented.

“We believe our focus on Taste Elevation and Emerging Markets will allow us to grow and gain market share in the International Zone,” said Oliveira. “We plan to extend and expand our Go-to-Market Model to increase our presence in the fastest growing markets and to drive innovation beyond ketchup for the Heinz brand to accelerate global growth.”

Long Term Financial Profile

In 2022, Kraft Heinz announced that it was increasing its long-term growth algorithm. At CAGNY, the Company will provide more insights on how it will achieve its long-term growth targets, which are affirmed at:

• Organic Net Sales(1) growth of 2% to 3%
• Adjusted EBITDA(1) growth of 4% to 6%
• Adjusted EPS(1) growth of 6% to 8%
• with Free Cash Flow Conversion(1) at approximately 100%.

“We aim to deliver strong stockholder returns, driven by better operational performance as well as an attractive dividend,” said Maciel. “As we continue to deliver with consistency, we believe we can benefit from multiple expansion.”

The Company will update and increase its gross efficiency target to $2.5 billion.

2023 Outlook

As announced in the fourth quarter and full year 2022 earnings, the Company will reiterate its expectation to deliver 2023 Organic Net Sales(1)(2) growth of 4% to 6% versus 2022. Constant Currency Adjusted EBITDA(1)(2) growth from 2022 to 2023 is still expected to range between 2% to 4%, or 4% to 6% when excluding the impact from the 53rd week in 2022.

The Company continues to anticipate high single-digit inflation for the year, with pricing and gross efficiencies contributing to Adjusted Gross Profit Margin(1)(2) recovery. Adjusted Gross Profit Margin expansion is still expected to fund incremental investments across technology, marketing, and people.

Adjusted EPS(1)(2) is still expected to be $2.67 to $2.75, which includes approximately a $0.04 negative impact from expected unfavorable changes in non-cash pension and post-retirement benefits, and a $0.04 currency headwind at current foreign exchange rates. The expected 2023 year-over-year Adjusted EPS performance reflects a negative $0.06 impact from lapping the 53rd week in 2022.

The Company now expects Free Cash Flow Conversion(1)(2) to be approximately 80% in 2023.

End Notes

Webcast Information

A prepared presentation at the CAGNY conference will begin at 11 a.m. Eastern Standard Time today and will be available at ir.kraftheinzcompany.com. A replay will also be accessible after the event 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 and Twitter.

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