Provides Full Year 2025 Outlook
Full Year Highlights
- Net sales decreased 3.0%; Organic Net Sales(1) decreased
2.1%
- Gross profit margin increased 120 basis points to 34.7%;
Adjusted Gross Profit Margin(1) increased 100 basis points to
34.7%
- Operating income decreased 63.2%, driven by non-cash impairment
losses of $3.7 billion; Adjusted Operating Income(1) increased
1.2%
- Diluted EPS was $2.26, down 2.2%; Adjusted EPS(1) was $3.06, up
2.7%
- Net cash provided by operating activities was $4.2 billion, up
5.2%; Free Cash Flow(1) was $3.2 billion, up 6.6%
- Return of capital to stockholders was $2.7 billion
Fourth Quarter Highlights
- Net sales decreased 4.1%; Organic Net Sales decreased 3.1%
- Gross profit margin increased 30 basis points to 34.1%;
Adjusted Gross Profit Margin decreased 40 basis points to
34.4%
- Operating income decreased 103.1%, driven by non-cash
impairment losses of $1.4 billion; Adjusted Operating Income
decreased 0.3%
- Diluted EPS was $1.76, up 188.5%; Adjusted EPS was $0.84, up
7.7%
The Kraft Heinz Company (Nasdaq: KHC) (“Kraft Heinz” or the
“Company”) today reported financial results for the fourth quarter
and full year 2024.
“Although 2024 was a challenging year with our top line results
coming in below our expectations, we remained disciplined in
protecting profitability while driving industry-leading margins,
generating strong cash flow, and returning $2.7 billion in capital
to stockholders,” said Kraft Heinz CEO Carlos Abrams-Rivera.
“As we enter 2025, our focus remains on executing with
excellence against our strategic pillars, where we know we have the
right to win. We will leverage initiatives already set in motion,
heading into the year with momentum across product innovation, our
Brand Growth System to drive brand superiority, Away From Home new
client wins, and incremental distribution points across Emerging
Markets. Importantly, we are committed to making the necessary
investments to drive top line improvement, while remaining
disciplined.”
Abrams-Rivera concluded, “While we have much more work to do, I
am confident in our strategy, our people, and our unique
ownership-centric culture to drive consistent long-term profitable
growth.”
Net Sales
In millions
Net Sales
Organic Net Sales(1)
December 28,
2024
December 30,
2023
% Chg vs
PY
YoY Growth
Rate
Price
Volume/Mix
For the Three Months Ended
North America
$
4,968
$
5,167
(3.9)%
(3.6)%
0.9 pp
(4.5) pp
International Developed Markets
913
948
(3.6)%
(4.0)%
0.0 pp
(4.0) pp
Emerging Markets(a)
695
745
(6.8)%
2.2%
4.2 pp
(2.0) pp
Kraft Heinz
$
6,576
$
6,860
(4.1)%
(3.1)%
1.0 pp
(4.1) pp
For the Year Ended
North America
$
19,543
$
20,126
(2.9)%
(2.8)%
1.4 pp
(4.2) pp
International Developed Markets
3,535
3,623
(2.4)%
(2.8)%
0.0 pp
(2.8) pp
Emerging Markets(a)
2,768
2,891
(4.3)%
4.0%
3.5 pp
0.5 pp
Kraft Heinz
$
25,846
$
26,640
(3.0)%
(2.1)%
1.4 pp
(3.5) pp
(a) Emerging Markets represents the
aggregation of our WEEM and AEM operating segments.
Net Income/(Loss) and Diluted
EPS
In millions, except per share
data
For the Three Months
Ended
For the Year Ended
December 28,
2024
December 30,
2023
% Chg vs
PY
December 28,
2024
December 30,
2023
% Chg vs
PY
Gross profit
$
2,245
$
2,317
(3.1)%
$
8,968
$
8,926
0.5%
Operating income/(loss)
(40)
1,300
(103.1)%
1,683
4,572
(63.2)%
Net income/(loss)
2,132
757
181.7%
2,746
2,846
(3.5)%
Net income/(loss) attributable to common
shareholders
2,131
757
181.5%
2,744
2,855
(3.9)%
Diluted EPS
$
1.76
$
0.61
188.5%
$
2.26
$
2.31
(2.2)%
Adjusted EPS(1)
0.84
0.78
7.7%
3.06
2.98
2.7%
Adjusted Operating Income(1)
$
1,385
$
1,389
(0.3)%
$
5,360
$
5,297
1.2%
FY 2024 Financial Summary
- Net Sales decreased 3.0 percent versus the year-ago
period to $25.8 billion, including an unfavorable 0.7 percentage
point impact from foreign currency, and a negative 0.2 percentage
point impact from divestitures. Organic Net Sales(1)
decreased 2.1 percent versus the prior year period. Price increased
1.4 percentage points versus the prior year period, with increases
in the North America and Emerging Markets segments, while
International Developed Markets was flat. Favorable price was
primarily due to pricing taken in certain categories to mitigate
higher input costs. Volume/mix declined 3.5 percentage points
versus the prior year period, with declines in North America and
International Developed Markets, partially offset by volume/mix
growth in Emerging Markets. Unfavorable volume/mix was primarily
driven by continued shifts in consumer behavior due to economic
uncertainty and a decline in Lunchables.
- Operating income/(loss) decreased 63.2 percent versus
the year-ago period to $1.7 billion as a result of non-cash
impairment losses that were $3.0 billion higher in the current year
period. The remaining change to operating income/(loss) was an
increase of $118 million due to factors noted in Adjusted Operating
Income. Adjusted Operating Income(1) increased 1.2 percent
versus the year-ago period to $5.4 billion, primarily driven by
higher pricing, lower variable compensation expense, and the
beneficial impact from our efficiency initiatives, primarily in
procurement and logistics. These factors more than offset
unfavorable volume/mix, increased manufacturing expenses due, in
part, to increased labor costs, increased SG&A due to
investments in technology, and an unfavorable impact from foreign
currency (0.4 pp).
- Diluted EPS was $2.26, down 2.2 percent versus the prior
year period, primarily driven by higher non-cash impairment losses
in the current year period. This more than offset a favorable
impact from the tax rate in the current period, driven by the
recognition of a $3.0 billion non-U.S. deferred tax asset and
associated valuation allowance of $0.6 billion related to the
transfer of certain business operations to a wholly-owned
subsidiary in the Netherlands. Adjusted EPS(1) was $3.06, up
2.7 percent versus the prior year period, primarily driven by
higher Adjusted Operating Income, fewer shares outstanding, and
favorable changes in other expense/(income), which more than offset
higher taxes on adjusted earnings.
- Net cash provided by/(used for) operating activities was
$4.2 billion, up 5.2 percent versus the year-ago period. The
increase was primarily due to lapping the prior year cash payments
associated with the settlement of the consolidated securities class
action lawsuit and the current year conversion of certain assets
related to the U.S. postretirement medical plan to cash, which were
partially offset by higher cash outflows for variable compensation
in the 2024 period compared to the 2023 period and increased cash
taxes. Free Cash Flow(1) was $3.2 billion, up 6.6 percent
versus the prior year period driven by the same net cash provided
by/(used for) operating activities discussed above.
- Capital Return: In fiscal year 2024, the Company paid
$1.9 billion in cash dividends and repurchased $988 million of
common stock. Of the $988 million in share repurchases in 2024,
$800 million were repurchased under the Company’s publicly
announced share repurchase program and $188 million were purchased
to offset the dilutive effect of equity-based compensation. As of
Dec. 29, 2024, the Company had remaining authorization to
repurchase approximately $1.9 billion of common stock under the
publicly announced share repurchase program.
Q4 2024 Financial Summary
- Net sales decreased 4.1 percent versus the year-ago
period to $6.6 billion, including a negative 0.8 percentage point
impact from foreign currency, and a negative 0.2 percentage point
impact from divestitures. Organic Net Sales(1) decreased 3.1
percent versus the prior year period. Price increased 1.0
percentage points versus the prior year period, driven by increases
in the North America and Emerging Markets segments, with flat
pricing in International Developed Markets. Favorable price was
primarily due to pricing taken in certain categories to mitigate
higher input costs. Volume/mix declined 4.1 percentage points
versus the prior year period, with declines in each reportable
segment. Unfavorable volume/mix was primarily driven by continued
shifts in consumer behavior due to economic uncertainty and a
decline in U.S. Away From Home.
- Operating Income decreased 103.1 percent versus the
year-ago period to $(40) million as a result of non-cash impairment
losses of $1.4 billion in the current year period. This impairment
charge was largely due to an intangible asset impairment on the
Oscar Mayer brand. The remaining change to operating income/(loss)
was an increase of $47 million driven by higher unrealized losses
on commodity hedges in the prior year. Adjusted Operating
Income(1) decreased 0.3 percent versus the year-ago period to
$1.4 billion, primarily driven by unfavorable volume/mix, increased
expenses in procurement and manufacturing due, in part, to
increased labor costs, and an unfavorable impact from foreign
currency (0.2 pp). These factors were partially offset by lower
variable compensation expense, higher pricing, and the beneficial
impact from our efficiency initiatives, primarily in
procurement.
- Diluted EPS was $1.76, up 188.5 percent versus the prior
year period, primarily driven by the recognition of a $3.0 billion
non-U.S. deferred tax asset and associated valuation allowance of
$0.6 billion related to the transfer of certain business operations
to a wholly-owned subsidiary in the Netherlands. Adjusted
EPS(1) was $0.84, up 7.7 percent versus the prior year period,
primarily driven by lower taxes on adjusted earnings and fewer
shares outstanding.
Outlook
For fiscal year 2025, the Company expects:
- Organic Net Sales(1)(2) flat to down 2.5 percent versus
the prior year. The Company expects sequential improvement in
Organic Net Sales throughout each quarter in 2025, with a flat to
slightly positive contribution from price throughout the year.
- Constant Currency Adjusted Operating Income(1)(2) down 1
percent to down 4 percent versus the prior year. This includes the
impact of lapping lower variable compensation in 2024, which is an
approximate 210 basis point headwind. This also contemplates an
Adjusted Gross Profit Margin(1)(2) that is expected to be flat to
slightly expand versus the prior year.
- Adjusted EPS(1)(2) in the range of $2.63 to $2.74. The
Company expects an effective tax rate on Adjusted EPS to be
approximately 26 percent, which reflects an approximate $0.23 cent
headwind year-over-year. This increase in the effective tax rate is
primarily driven by the impact of several countries enacting the
global minimum tax regulations, partially offset by the annual
benefit related to the transfer of certain business operations
completed in the fourth quarter of 2024. Additionally, the Company
expects interest expense to be approximately $900 million and other
expense/(income) to be approximately ($140) million for the full
year. This guidance does not reflect any impact from future
potential share repurchases.
- Free Cash Flow(1)(2) flat versus the prior year, with
Free Cash Flow Conversion(1)(2) of approximately 95 percent. This
is driven by working capital efficiencies and lower cash outflows
for variable compensation, partially offset by a higher cash tax
primarily driven by the impact of several countries enacting the
global minimum tax regulations.
End Notes
(1)
Organic Net Sales, Adjusted Gross
Profit, Adjusted Gross Profit Margin, Adjusted Operating Income,
Constant Currency Adjusted Operating Income, Adjusted EBITDA,
Adjusted EPS, Free Cash Flow, Free Cash Flow Conversion, 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,
Adjusted Gross Profit Margin, Constant Currency Adjusted Operating
Income, Adjusted EPS, Free Cash Flow, and Free Cash Flow Conversion
is provided on a non-GAAP basis only because certain information
necessary to calculate the most comparable GAAP measure is
unavailable due to the uncertainty and inherent difficulty of
predicting the occurrence and the future financial statement impact
of such items impacting comparability, including, but not limited
to, the impact of currency, acquisitions and divestitures,
divestiture-related license income, restructuring activities, deal
costs, unrealized losses/(gains) on commodity hedges, impairment
losses, certain non-ordinary course legal and regulatory matters,
equity award compensation expense, nonmonetary currency
devaluation, and debt prepayment and extinguishment
(benefit)/costs, among other items. Therefore, as a result of the
uncertainty and variability of the nature and amount of future
adjustments, which could be significant, the Company is unable to
provide a reconciliation of these measures without unreasonable
effort.
Earnings Discussion and Webcast Information
A pre-recorded management discussion of The Kraft Heinz
Company's fourth quarter and full year 2024 earnings is available
at ir.kraftheinzcompany.com. The
Company will host a live question and answer session beginning
today at 9:00 a.m. Eastern Standard 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 2024 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 eight consumer-driven product
platforms. As global citizens, we’re dedicated to making a
sustainable, ethical impact while helping feed the world in
healthy, responsible ways. Learn more about our journey by visiting
www.kraftheinzcompany.com or following us on LinkedIn.
Forward-Looking Statements
This press release contains a number of forward-looking
statements. Words such as “accelerate,” “anticipate,” “believe,”
“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 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 Gross Profit, Adjusted
Gross Profit Margin, Adjusted Operating Income, Constant Currency
Adjusted Operating Income, Adjusted EBITDA, 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 Gross Profit, Adjusted Gross Profit
Margin, Adjusted Operating Income, Constant Currency Adjusted
Operating Income, Adjusted EBITDA, 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 a measure of the
Company’s core operating performance, the cash-generating
capabilities of the Company’s business operations, and are factors
used in determining the Company’s borrowing capacity and the amount
of cash available for debt repayments, dividends, acquisitions,
share repurchases, and other corporate purposes.
Management believes that presenting the Company’s non-GAAP
financial measures is useful to investors because it (i) provides
investors with meaningful supplemental information regarding
financial performance by excluding certain items, (ii) permits
investors to view performance using the same tools that management
uses to budget, make operating and strategic decisions, and
evaluate historical performance, and (iii) otherwise provides
supplemental information that may be useful to investors in
evaluating the Company’s results. The Company believes that the
presentation of these non-GAAP financial measures, when considered
together with the corresponding GAAP financial measures and the
reconciliations to those measures, provides investors with
additional understanding of the factors and trends affecting the
Company’s business than could be obtained absent these
disclosures.
Definitions
Organic Net Sales is defined as net sales excluding, when
they occur, the impact of currency, acquisitions and divestitures,
and a 53rd week of shipments. The Company calculates the impact of
currency on net sales by holding exchange rates constant at the
previous year's exchange rate, with the exception of highly
inflationary subsidiaries, for which the Company calculates the
previous year's results using the current year's exchange rate.
Adjusted Operating Income is defined as operating
income/(loss) excluding, when they occur, the impacts of
restructuring activities, deal costs, unrealized gains/(losses) on
commodity hedges (the unrealized gains and losses are recorded in
general corporate expenses until realized; once realized, the gains
and losses are recorded in the applicable segment’s operating
results), impairment losses, and certain non-ordinary course legal
and regulatory matters. The Company also presents Adjusted
Operating Income on a constant currency basis (Constant Currency
Adjusted Operating Income). The Company calculates the impact
of currency on Adjusted Operating Income by holding exchange rates
constant at the previous year's exchange rate, with the exception
of highly inflationary subsidiaries, for which it calculates the
previous year's results using the current year's exchange rate.
Adjusted Gross Profit, Adjusted Net Income/(Loss), and
Adjusted EPS are defined as gross profit, net income/(loss),
and diluted earnings per share, respectively, excluding, when they
occur, the impacts of restructuring activities, deal costs,
unrealized losses/(gains) on commodity hedges, impairment losses,
certain non-ordinary course legal and regulatory matters,
losses/(gains) on the sale of a business, other losses/(gains)
related to acquisitions and divestitures (e.g., tax and hedging
impacts), nonmonetary currency devaluation (e.g., remeasurement
gains and losses), debt prepayment and extinguishment
(benefit)/costs, and certain significant discrete income tax items,
and including when they occur, adjustments to reflect preferred
stock dividend payments on an accrual basis. Adjusted Gross
Profit Margin is defined as Adjusted Gross Profit divided by
net sales.
Net Leverage is defined as debt less cash, cash
equivalents and short-term investments divided by Adjusted EBITDA.
Adjusted EBITDA is defined as net income/(loss) from
continuing operations before interest expense, other
expense/(income), provision for/(benefit from) income taxes, and
depreciation and amortization (excluding restructuring activities);
in addition to these adjustments, the Company excludes, when they
occur, the impacts of divestiture-related license income,
restructuring activities, deal costs, unrealized losses/(gains) on
commodity hedges, impairment losses, certain non-ordinary course
legal and regulatory matters, and equity award compensation expense
(excluding restructuring activities).
Free Cash Flow is defined as net cash provided by/(used
for) operating activities less capital expenditures. The use of
this non-GAAP measure does not imply or represent the residual cash
flow for discretionary expenditures since the Company has certain
non-discretionary obligations such as debt service that are not
deducted from the measure.
Schedule
1
The Kraft Heinz Company
Consolidated Statements of
Income
(in millions, except per share
data)
(Unaudited)
For the Three Months
Ended
For the Year Ended
December 28,
2024
December 30,
2023
December 28,
2024
December 30,
2023
Net sales
$
6,576
$
6,860
$
25,846
$
26,640
Cost of products sold
4,331
4,543
16,878
17,714
Gross profit
2,245
2,317
8,968
8,926
Selling, general and administrative
expenses, excluding impairment losses
898
1,017
3,616
3,692
Goodwill impairment losses
77
—
1,638
510
Intangible asset impairment losses
1,310
—
2,031
152
Selling, general and administrative
expenses
2,285
1,017
7,285
4,354
Operating income/(loss)
(40)
1,300
1,683
4,572
Interest expense
227
229
912
912
Other expense/(income)
(29)
121
(85)
27
Income/(loss) before income taxes
(238)
950
856
3,633
Provision for/(benefit from) income
taxes
(2,370)
193
(1,890)
787
Net income/(loss)
2,132
757
2,746
2,846
Net income/(loss) attributable to
noncontrolling interest
1
—
2
(9)
Net income/(loss) attributable to common
shareholders
$
2,131
$
757
$
2,744
$
2,855
Basic shares outstanding
1,203
1,225
1,210
1,227
Diluted shares outstanding
1,207
1,232
1,215
1,235
Per share data applicable to common
shareholders:
Basic earnings/(loss) per share
$
1.77
$
0.62
$
2.27
$
2.33
Diluted earnings/(loss) per share
1.76
0.61
2.26
2.31
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
December 28, 2024
North America
$
4,968
$
(12)
$
—
$
4,980
International Developed Markets
913
3
—
910
Emerging Markets(a)
695
(32)
—
727
Kraft Heinz
$
6,576
$
(41)
$
—
$
6,617
December 30, 2023
North America
$
5,167
$
—
$
—
$
5,167
International Developed Markets
948
—
—
948
Emerging Markets(a)
745
16
18
711
Kraft Heinz
$
6,860
$
16
$
18
$
6,826
Year-over-year growth rates
North America
(3.9)%
(0.3) pp
0.0 pp
(3.6)%
0.9 pp
(4.5) pp
International Developed Markets
(3.6)%
0.4 pp
0.0 pp
(4.0)%
0.0 pp
(4.0) pp
Emerging Markets(a)
(6.8)%
(6.5) pp
(2.5) pp
2.2%
4.2 pp
(2.0) pp
Kraft Heinz
(4.1)%
(0.8) pp
(0.2) pp
(3.1)%
1.0 pp
(4.1) pp
(a) Emerging Markets represents the
aggregation of our WEEM and AEM operating segments.
Schedule
3
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
Organic Net
Sales
Price
Volume/Mix
December 28, 2024
North America
$
19,543
$
(27)
$
—
$
19,570
International Developed Markets
3,535
13
—
3,522
Emerging Markets
2,768
(101)
12
2,857
Kraft Heinz
$
25,846
$
(115)
$
12
$
25,949
December 30, 2023
North America
$
20,126
$
—
$
—
$
20,126
International Developed Markets
3,623
—
—
3,623
Emerging Markets
2,891
77
67
2,747
Kraft Heinz
$
26,640
$
77
$
67
$
26,496
Year-over-year growth rates
North America
(2.9)%
(0.1) pp
0.0 pp
(2.8)%
1.4 pp
(4.2) pp
International Developed Markets
(2.4)%
0.4 pp
0.0 pp
(2.8)%
0.0 pp
(2.8) pp
Emerging Markets
(4.3)%
(6.2) pp
(2.1) pp
4.0%
3.5 pp
0.5 pp
Kraft Heinz
(3.0)%
(0.7) pp
(0.2) pp
(2.1)%
1.4 pp
(3.5) pp
Schedule
4
The Kraft Heinz Company
Reconciliation of Operating
Income/(Loss) to Adjusted Operating Income
(dollars in millions)
(Unaudited)
For the Three Months
Ended
For the Year Ended
December 28,
2024
December 30,
2023
December 28,
2024
December 30,
2023
Operating income/(loss)
(40)
1,300
1,683
4,572
Restructuring activities
27
35
27
60
Unrealized losses/(gains) on commodity
hedges
11
54
(19)
1
Impairment losses
1,387
—
3,669
662
Certain non-ordinary course legal and
regulatory matters
—
—
—
2
Adjusted Operating Income
$
1,385
$
1,389
$
5,360
$
5,297
Segment Adjusted Operating Income:
North America
$
1,318
$
1,349
$
5,111
$
5,050
International Developed Markets
140
146
537
522
Total Segment Adjusted Operating
Income
1,458
1,495
5,648
5,572
Emerging Markets
89
90
321
376
General corporate expenses
(162)
(196)
(609)
(651)
Adjusted Operating Income
$
1,385
$
1,389
$
5,360
$
5,297
Schedule
5
The Kraft Heinz Company
Reconciliation of Adjusted
Operating Income to Constant Currency Adjusted Operating Income
For the Three Months Ended
(dollars in millions)
(Unaudited)
Adjusted Operating
Income
Currency
Constant Currency
Adjusted Operating
Income
December 28, 2024
North America
$
1,318
$
(2)
$
1,320
International Developed Markets
140
2
138
Emerging Markets
89
(1)
90
General corporate expenses
(162)
1
(163)
Kraft Heinz
$
1,385
$
—
$
1,385
December 30, 2023
North America
$
1,349
$
—
$
1,349
International Developed Markets
146
—
146
Emerging Markets
90
3
87
General corporate expenses
(196)
—
(196)
Kraft Heinz
$
1,389
$
3
$
1,386
Year-over-year growth rates
North America
(2.3)%
(0.2) pp
(2.1)%
International Developed Markets
(3.8)%
1.8 pp
(5.6)%
Emerging Markets
(0.8)%
(4.3) pp
3.5%
General corporate expenses
(17.2)%
(0.5) pp
(16.7)%
Kraft Heinz
(0.3)%
(0.2) pp
(0.1)%
Schedule
6
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 28, 2024
North America
$
5,111
$
(6)
$
5,117
International Developed Markets
537
9
528
Emerging Markets
321
(10)
331
General corporate expenses
(609)
—
(609)
Kraft Heinz
$
5,360
$
(7)
$
5,367
December 30, 2023
North America
$
5,050
$
—
$
5,050
International Developed Markets
522
—
522
Emerging Markets
376
13
363
General corporate expenses
(651)
—
(651)
Kraft Heinz
$
5,297
$
13
$
5,284
Year-over-year growth rates
North America
1.2%
(0.1) pp
1.3%
International Developed Markets
3.0%
1.8 pp
1.2%
Emerging Markets
(14.7)%
(6.1) pp
(8.6)%
General corporate expenses
(6.4)%
0.1 pp
(6.5)%
Kraft Heinz
1.2%
(0.4) pp
1.6%
Schedule
7
The Kraft Heinz Company
Reconciliation of GAAP Results to
Non-GAAP Results
(dollars in millions)
(Unaudited)
For the Three Months
Ended
December 28, 2024
Gross
profit
Selling,
general
and
administrative
expenses
Operating
income/
(loss)
Interest
expense
Other
expense/
(income)
Income/
(loss)
before
income
taxes
Provision
for/
(benefit
from)
income
taxes
Net
income/
(loss)
Net
income/
(loss)
attributable
to
noncontrolling
interest
Net
income/
(loss)
attributable
to
common
shareholders
Diluted
EPS
GAAP Results
$
2,245
$
2,285
$
(40)
$
227
$
(29)
$
(238)
$
(2,370)
$
2,132
$
1
$
2,131
$
1.76
Items Affecting Comparability
Restructuring activities
6
(21)
27
—
(1)
28
4
24
—
24
0.02
Unrealized losses/(gains) on commodity
hedges
11
—
11
—
—
11
4
7
—
7
0.01
Impairment losses
—
(1,387)
1,387
—
—
1,387
304
1,083
—
1,083
0.90
Losses/(gains) on sale of business
—
—
—
—
(3)
3
—
3
—
3
—
Nonmonetary currency devaluation
—
—
—
—
(9)
9
—
9
—
9
0.01
Certain significant discrete income tax
items
—
—
—
—
—
—
2,239
(2,239)
—
(2,239)
(1.86)
Adjusted Non-GAAP Results
$
2,262
$
1,385
$
1,019
$
0.84
Schedule
8
The Kraft Heinz Company
Reconciliation of GAAP Results to
Non-GAAP Results
(dollars in millions)
(Unaudited)
For the Three Months
Ended
December 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
$
2,317
$
1,017
$
1,300
$
229
$
121
$
950
$
193
$
757
$
—
$
757
$
0.61
Items Affecting Comparability
Restructuring activities
13
(22)
35
—
(163)
198
29
169
—
169
0.14
Unrealized losses/(gains) on commodity
hedges
54
—
54
—
—
54
13
41
—
41
0.03
Losses/(gains) on sale of business
—
—
—
—
5
(5)
(1)
(4)
—
(4)
—
Nonmonetary currency devaluation
—
—
—
—
(1)
1
—
1
—
1
—
Adjusted Non-GAAP Results
$
2,384
$
1,389
$
964
$
0.78
Schedule
9
The Kraft Heinz Company
Reconciliation of GAAP Results to
Non-GAAP Results
(dollars in millions)
(Unaudited)
For the Year Ended
December 28, 2024
Gross
profit
Selling,
general
and
administrative
expenses
Operating
income/
(loss)
Interest
expense
Other
expense/
(income)
Income/
(loss)
before
income
taxes
Provision
for/
(benefit
from)
income
taxes
Net
income/
(loss)
Net
income/
(loss)
attributable
to
noncontrolling
interest
Net
income/
(loss)
attributable
to
common
shareholders
Diluted
EPS
GAAP Results
$
8,968
$
7,285
$
1,683
$
912
$
(85)
$
856
$
(1,890)
$
2,746
$
2
$
2,744
$
2.26
Items Affecting Comparability
Restructuring activities
8
(19)
27
—
7
20
2
18
—
18
0.01
Unrealized losses/(gains) on commodity
hedges
(19)
—
(19)
—
—
(19)
(4)
(15)
—
(15)
(0.01)
Impairment losses
—
(3,669)
3,669
—
—
3,669
533
3,136
—
3,136
2.58
Losses/(gains) on sale of business
—
—
—
—
(81)
81
21
60
—
60
0.05
Nonmonetary currency devaluation
—
—
—
—
(16)
16
—
16
—
16
0.01
Certain significant discrete income tax
items
—
—
—
—
—
—
2,239
(2,239)
—
(2,239)
(1.84)
Adjusted Non-GAAP Results
$
8,957
$
5,360
$
3,722
$
3.06
Schedule
10
The Kraft Heinz Company
Reconciliation of GAAP Results to
Non-GAAP Results
(dollars in millions)
(Unaudited)
For the Year Ended
December 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
$
8,926
$
4,354
$
4,572
$
912
$
27
$
3,633
$
787
$
2,846
$
(9)
$
2,855
$
2.31
Items Affecting Comparability
Restructuring activities
57
(3)
60
—
(165)
225
32
193
—
193
0.16
Unrealized losses/(gains) on commodity
hedges
1
—
1
—
—
1
—
1
—
1
—
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
—
—
—
—
4
(4)
(1)
(3)
—
(3)
—
Nonmonetary currency devaluation
—
—
—
—
(28)
28
—
28
—
28
0.02
Certain significant discrete income tax
items
—
—
—
—
—
—
17
(17)
—
(17)
(0.01)
Adjusted Non-GAAP Results
$
8,984
$
5,297
$
3,676
$
2.98
Schedule
11
The Kraft Heinz Company
Adjusted Gross Profit Margin
(dollars in millions)
(Unaudited)
For the Three Months
Ended
For the Year Ended
December 28,
2024
December 30,
2023
December 28,
2024
December 30,
2023
Adjusted Gross Profit
$
2,262
$
2,384
$
8,957
$
8,984
Net sales
6,576
$
6,860
25,846
26,640
Adjusted Gross Profit Margin
34.4%
34.8%
34.7%
33.7%
Schedule
12
The Kraft Heinz Company
Key Drivers of Change in Adjusted
EPS
(Unaudited)
For the Three Months
Ended
December 28,
2024
December 30,
2023
$ Change
Key drivers of change in Adjusted EPS:
Results of operations(a)(b)
$
0.90
$
0.90
$
—
Interest expense
(0.15)
(0.15)
—
Other expense/(income)
0.03
0.03
—
Effective tax rate
0.04
—
0.04
Effect of share repurchases
0.02
—
0.02
Adjusted EPS
$
0.84
$
0.78
$
0.06
(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 December 28, 2024 and December 30, 2023.
(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 December
28, 2024 and December 30, 2023.
Schedule
13
The Kraft Heinz Company
Key Drivers of Change in Adjusted
EPS
(Unaudited)
For the Year Ended
December 28,
2024
December 30,
2023
$ Change
Key drivers of change in Adjusted EPS:
Results of operations(a)(b)
$
3.52
$
3.48
$
0.04
Interest expense
(0.60)
(0.60)
—
Other expense/(income)(c)
0.11
0.10
0.01
Effective tax rate
(0.01)
—
(0.01)
Effective of share repurchases
0.04
—
0.04
Adjusted EPS
$
3.06
$
2.98
$
0.08
(a)
Includes non-cash amortization of
definite-lived intangible assets, which accounted for a negative
impact to Adjusted EPS from results of operations of $0.17 for the
year ended December 28, 2024 and $0.16 for the year ended December
30, 2023.
(b)
Includes divestiture-related
license income, which accounted for a benefit to Adjusted EPS from
results of operations of $0.04 for the years ended December 28,
2024 and December 30, 2023.
(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 years ended
December 28, 2024 and December 30, 2023.
Schedule
14
The Kraft Heinz Company
Consolidated Balance Sheets
(in millions, except per share
data)
(Unaudited)
December 28, 2024
December 30, 2023
ASSETS
Cash and cash equivalents
$
1,334
$
1,400
Trade receivables, net
2,147
2,112
Inventories
3,376
3,614
Prepaid expenses
215
234
Other current assets
583
569
Total current assets
7,655
7,929
Property, plant and equipment, net
7,152
7,122
Goodwill
28,673
30,459
Intangible assets, net
40,099
42,448
Other non-current assets
4,708
2,381
TOTAL ASSETS
$
88,287
$
90,339
LIABILITIES AND EQUITY
Current portion of long-term debt
654
638
Accounts payable
4,188
4,627
Accrued marketing
697
733
Interest payable
263
258
Other current liabilities
1,451
1,781
Total current liabilities
7,253
8,037
Long-term debt
19,215
19,394
Deferred income taxes
9,679
10,201
Accrued postemployment costs
135
143
Long-term deferred income
1,374
1,424
Other non-current liabilities
1,306
1,418
TOTAL LIABILITIES
38,962
40,617
Redeemable noncontrolling interest
6
34
Equity:
Common stock, $0.01 par value
12
12
Additional paid-in capital
52,135
52,037
Retained earnings
2,171
1,367
Accumulated other comprehensive
income/(losses)
(2,915)
(2,604)
Treasury stock, at cost
(2,218)
(1,286)
Total shareholders' equity
49,185
49,526
Noncontrolling interest
134
162
TOTAL EQUITY
49,319
49,688
TOTAL LIABILITIES AND EQUITY
$
88,287
$
90,339
Schedule
15
The Kraft Heinz Company
Consolidated Statements of Cash
Flows
(in millions)
(Unaudited)
For the Year Ended
December 28,
2024
December 30,
2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income/(loss)
$
2,746
$
2,846
Adjustments to reconcile net income/(loss)
to operating cash flows:
Depreciation and amortization
948
961
Divestiture-related license income
(54)
(54)
Equity award compensation expense
109
141
Deferred income tax
provision/(benefit)
(2,857)
17
Postemployment benefit plan asset
transfers/(contributions)
161
(22)
Goodwill and intangible asset impairment
losses
3,669
662
Nonmonetary currency devaluation
16
28
Loss/(gain) on sale of business
81
(4)
Other items, net
(46)
207
Changes in current assets and
liabilities:
Trade receivables
(139)
18
Inventories
(6)
(106)
Accounts payable
(308)
(295)
Other current assets
(38)
139
Other current liabilities
(98)
(562)
Net cash provided by/(used for) operating
activities
4,184
3,976
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures
(1,024)
(1,013)
Payments to acquire business, net of cash
acquired
—
—
Payments to acquire intangible assets
(140)
—
Settlement of net investment hedges
75
31
Proceeds from sale of business, net of
cash disposed and working capital adjustments
8
—
Other investing activities, net
58
66
Net cash provided by/(used for) investing
activities
(1,023)
(916)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments of long-term debt
(618)
(848)
Proceeds from issuance of long-term
debt
594
657
Proceeds from issuance of commercial
paper
—
150
Repayments of commercial paper
—
(150)
Repurchases of common stock
(988)
(455)
Dividends paid
(1,931)
(1,965)
Other financing activities, net
(65)
(67)
Net cash provided by/(used for) financing
activities
(3,008)
(2,678)
Effect of exchange rate changes on cash,
cash equivalents, and restricted cash
(71)
(19)
Cash, cash equivalents, and restricted
cash
Net increase/(decrease)
82
363
Balance at beginning of period
1,404
1,041
Balance at end of period
$
1,486
$
1,404
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 Year Ended
December 28, 2024
December 30, 2023
Net cash provided by/(used for) operating
activities
$
4,184
$
3,976
Capital expenditures
(1,024)
(1,013)
Free Cash Flow
$
3,160
$
2,963
Adjusted Net Income/(Loss)
$
3,722
$
3,676
Free Cash Flow Conversion
85%
81%
Schedule
17
The Kraft Heinz Company
Reconciliation of Net
Income/(Loss) to Adjusted EBITDA
(dollars in millions)
(Unaudited)
For the Twelve
Months Ended
December 28, 2024
Net income/(loss)
$
2,746
Interest expense
912
Other expense/(income)
(85)
Provision for/(benefit from) income
taxes
(1,890)
Operating income/(loss)
1,683
Depreciation and amortization (excluding
restructuring activities)
948
Divestiture-related license income
(54)
Restructuring activities
27
Unrealized losses/(gains) on commodity
hedges
(19)
Impairment losses
3,669
Equity award compensation expense
109
Adjusted EBITDA
$
6,363
Current portion of long-term debt
$
654
Long-term debt
19,215
Less: Cash and cash equivalents
(1,334)
$
18,535
Net Leverage
2.9
View source
version on businesswire.com: https://www.businesswire.com/news/home/20250212663676/en/
Alex Abraham (media) Alex.Abraham@kraftheinz.com
Anne-Marie Megela (investors)
Anne-Marie.Megela@kraftheinz.com
Kraft Heinz (NASDAQ:KHC)
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