The Kraft Heinz Company (Nasdaq: KHC) (“Kraft Heinz” or the “Company”) today announced that the Board of Directors approved a share repurchase program authorizing the Company to repurchase up to $3 billion of the Company’s outstanding shares of common stock through December 26, 2026.

Under the share repurchase program, the Company intends to repurchase shares with excess cash after allocations for disciplined capital spending, including investments to support organic growth in key areas of its business, payment of an attractive dividend, maintaining a targeted Net Leverage1 of approximately 3.0x, and evaluation of strategic opportunities, including acquisitions, divestitures, and partnerships.

“In the third quarter, we hit a milestone in our transformation — reaching our targeted Net Leverage1 of approximately 3.0x. A stronger balance sheet, along with advancements we have made across the business, gives us further conviction behind our strategy and the belief that company shares are an attractive investment opportunity,” said Kraft Heinz CEO and Chair of the Board Miguel Patricio. “As such, we are in a position of strength to round out our capital allocation policy. Our Board authorized a $3 billion share repurchase program over the next three years, allowing us to provide further value to our stockholders while underscoring our commitment to delivering profitable growth and driving strong returns.”

In determining the amount of capital to allocate to share repurchases, the Company takes into account, among other things, its historical and expected business performance and cash and liquidity position, as well as global economic and market conditions and the market price of the Company’s common stock. The timing, manner, price, and amount of any repurchases under the share repurchase program are determined by the Company in its discretion. Purchases may be effected through open market transactions, privately negotiated transactions, transactions structured through investment banking institutions, or other means. The Company is not obligated to repurchase any specific number of shares and the program may be modified, suspended, or discontinued at any time. The share repurchase program will be in addition to the Company’s share repurchases to offset the dilutive effect of equity-based compensation.

End Note

(1) Net Leverage is a non-GAAP financial measure. Please see discussion of non-GAAP financial measures and reconciliations at the end of this press release for more information.

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, including statements relating to the Company’s plans regarding share repurchases. Words such as “account,” “allow,” “believe,” “evaluate,” “intend,” “invest,” “provide,” “support,” “will,” and variations of such words and similar future or conditional expressions are intended to identify forward-looking statements. These forward-looking statements are subject to a number of risks and uncertainties, many of which are difficult to predict and beyond Kraft Heinz's control, which could cause actual results to differ materially from those indicated in the forward-looking statements. Those factors include, but are not limited to, the Company’s ability to implement its plans regarding share repurchases and the payment of dividends and/or to return value to stockholders, changes in the market price of the Company’s common stock, global economic and market conditions, alternative investment opportunities, and the risk factors set forth in the Company’s filings with the Securities and Exchange Commission, including the Company's most recently filed Annual Report on Form 10-K and subsequent reports on Forms 10-Q and 8-K. Kraft Heinz 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 Adjusted EBITDA 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 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 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:

  • Adjusted EBITDA provides important comparability of underlying operating results, allowing investors and management to assess the Company’s operating performance on a consistent basis; and
  • Net Leverage provides a measure of the Company’s core operating performance, the cash-generating capabilities of the Company’s business operations, and is one factor used in determining 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

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).

Net Leverage is defined as debt, less cash, cash equivalents and short-term investments divided by Adjusted EBITDA.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

Alex Abraham (media) Alex.Abraham@kraftheinz.com

Anne-Marie Megela (investors) ir@kraftheinz.com

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