Q2 2017 Update
August 3, 2017
Safe Harbor Statement
This webcast presentation contains a number of forward-looking statements. Words such as “build,” “gain,” “drive,” “invest,” “grow,”
“execute,” “enable,” “continue,” “expect,” “opportunity,” “deliver,” “strengthen,” “leverage,” “ramp up,” “will,” and variations of such
words and similar expressions are intended to identify forward-looking statements. Examples of forward-looking statements include, but are
not limited to, statements regarding Kraft Heinz’s plans, integration, savings, investments, execution, growth, leverage, innovation, credit
rating, brands and efficiencies. These forward-looking statements 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 Kraft Heinz’s control. Important factors that affect Kraft Heinz’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, increased competition; Kraft Heinz’s ability to maintain, extend and expand its reputation and brand image; Kraft Heinz’s
ability to differentiate its products from other brands; the consolidation of retail customers; Kraft Heinz’s ability to predict, identify and
interpret changes in consumer preferences and demand; Kraft Heinz’s ability to drive revenue growth in its key product categories, increase
its market share, or add products; an impairment of the carrying value of goodwill or other indefinite-lived intangible assets; volatility in
commodity, energy and other input costs; changes in Kraft Heinz’s management team or other key personnel; Kraft Heinz’s inability to
realize the anticipated benefits from its cost savings initiatives; changes in relationships with significant customers and suppliers; execution
of Kraft Heinz’s international expansion strategy; changes in laws and regulations; legal claims or other regulatory enforcement actions;
product recalls or product liability claims; unanticipated business disruptions; failure to successfully integrate the business and operations of
Kraft Heinz in the expected time frame; Kraft Heinz’s ability to complete or realize the benefits from potential and completed acquisitions,
alliances, divestitures or joint ventures; economic and political conditions in the nations in which Kraft Heinz operates; the volatility of
capital markets; increased pension, labor and people-related expenses; volatility in the market value of all or a portion of the derivatives
Kraft Heinz uses; exchange rate fluctuations; risks associated with information technology and systems, including service interruptions,
misappropriation of data or breaches of security; Kraft Heinz’s inability to protect intellectual property rights; impacts of natural events in
the locations in which Kraft Heinz or its customers, suppliers or regulators operate; Kraft Heinz’s indebtedness and ability to pay such
indebtedness; tax law changes or interpretations; and other factors. For additional information on these and other factors that could affect
Kraft Heinz’s forward-looking statements, see Kraft Heinz’s risk factors, as they may be amended from time to time, set forth in its filings
with the Securities and Exchange Commission, including our most recently filed Annual Report on Form 10-K. Kraft Heinz disclaims and does
not undertake any obligation to update or revise any forward-looking statement in this presentation, except as required by applicable law or
regulation.
Non-GAAP Measures
This webcast presentation also includes non-GAAP financial measures, including Organic Net Sales, Adjusted EBITDA and Adjusted EPS. These
non-GAAP financial measures should not be considered replacements for, and should be read together with, the most comparable 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. For more information, including
a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures, please refer to the
Appendix of this presentation.
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1
2017 Mid-Year Update
Profitable
Sales Growth
• Building momentum
• Big Bet innovation, whitespace gains delivering
• Significant go-to-market investments in place
Best in Class
Margins
• Achieved $1.45bn cumulative savings since
inception of Integration Program
• Continue to improve business execution
Superior Return
of Capital with
Strong Balance
Sheet
• Repaid $2bn of debt in Q2
• Increased quarterly dividend 4.2% to $0.625
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2
Q2 and First Half Financial Summary
Q2 2017 vs. Q2 2016 Growth
• Sequentially better organic net sales
15.3%
• Pricing sequentially lower due to
1.9%
(0.9%)
Organic Net Sales*
Price:
(0.4%)
Vol/mix: (0.5%)
Constant Currency
Adjusted EBITDA*
Adjusted EPS*
promotional timing in U.S. and Canada
• Constant Currency Adjusted EBITDA
growth driven by cost savings initiatives(1)
H1 2017 vs. H1 2016 Growth
15.2%
(1.8%)
(0.2%)
Organic Net Sales*
Constant Currency
Adjusted EBITDA*
Price:
0.3%
Vol/mix: (2.1%)
growth driven by vol/mix improvements
in U.S., Canada and Europe
 Gains partially offset by higher input
costs, lower net sales and investments in
growth initiatives
• Adjusted EPS growth driven by Preferred
Stock refinancing and discrete tax
favorability
Adjusted EPS*
(1) Cost savings initiatives include the Company's integration, restructuring and ongoing productivity efforts.
* Non-GAAP financial measure. See Appendix to this presentation for more information, including GAAP to Non-GAAP reconciliations.
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3
U.S. Update
• Sequential improvement in Q2
 Better leveraging Kraft Heinz scale at retail
 Consumption gains driven by Big Bets
 Majority of share challenge resides in natural cheese, cold cuts and salad
dressings
• Solid progress on key initiatives
 Deploying new capabilities
 Completed ~70% of Footprint-related production line start-ups through Q2
• Expect H2 organic growth sequentially better than Q2
 Further leverage scale for better in-store activity
 Strong pipeline of innovation, renovation and communication
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United States: Q2 and First Half Results
Q2 2017 vs. Q2 2016 Growth
• Sequential vol/mix improvement driven
3.2%
by Easter shift and gains in frozen, mac &
cheese and condiments
Segment Adjusted EBITDA
 Select distribution losses in cheese and
meats as well as lower shipments in
foodservice remained a headwind in Q2
(1.2%)
Organic Net Sales*
Price:
(0.4%)
Vol/mix: (0.8%)
• Lower Q2 pricing reflected timing of
trade promotion recognition in prior year
H1 2017 vs. H1 2016 Growth
0.9%
(2.4%)
Organic Net Sales*
Price:
0.1%
Vol/mix: (2.5%)
 More than offset price increases in
cheese
• Segment Adjusted EBITDA growth and
margin improvement driven by cost
savings initiatives
Segment Adjusted EBITDA
 Unfavorable key commodity(1) costs,
particularly cheese and coffee, continued
to hold back gains in Q2
(1) The Company's key commodities in the United States and Canada are dairy, meat, coffee and nuts.
* Non-GAAP financial measure. See Appendix to this presentation for more information, including GAAP to Non-GAAP reconciliations.
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5
Canada: Q2 and First Half Results
Q2 2017 vs. Q2 2016 Growth
• Q2 vol/mix gains reflected resumption
2.3%
(3.1%)
Organic Net Sales*
Price:
(3.7%)
Vol/mix: 0.6%
Constant Currency
Segment Adjusted EBITDA
of normal retail activity during quarter,
as well as strong growth in condiments
and sauces
 Growth held back by discontinuation of
select cheese products at retail
• Lower Q2 pricing reflected timing of
promotional activity versus prior year
H1 2017 vs. H1 2016 Growth
(8.3%)
(7.0%)
Organic Net Sales*
Constant Currency
Segment Adjusted EBITDA
Price:
(2.5%)
Vol/mix: (5.8%)
• Q2 Constant Currency Segment Adjusted
EBITDA growth and margin gains
primarily reflect ongoing cost savings
more than offsetting impact of lower
pricing
* Non-GAAP financial measure. See Appendix to this presentation for more information, including GAAP to Non-GAAP reconciliations.
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6
Europe: Q2 and First Half Results
Q2 2017 vs. Q2 2016 Growth
• Strong currency headwinds continued
into Q2
(0.8%)
(2.4%)
• Vol/mix improvement driven by strong
consumption gains in condiments and
sauces, as well as foodservice
Organic Net Sales*
Price:
(1.6%)
Vol/mix: 0.8%
Constant Currency
Segment Adjusted EBITDA
H1 2017 vs. H1 2016 Growth
• Pricing primarily reflected promotional
timing in UK and trade investments to
address competitive activity in Italy infant
nutrition
• Constant Currency Segment Adjusted
0.7%
(0.5%)
Organic Net Sales*
Price:
(1.1%)
Vol/mix: 0.6%
EBITDA decline reflected higher input
costs in local currency and lower pricing,
partly offset by cost savings
Constant Currency
Segment Adjusted EBITDA
* Non-GAAP financial measure. See Appendix to this presentation for more information, including GAAP to Non-GAAP reconciliations.
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7
Rest of World: Q2 and First Half Results
Q2 2017 vs. Q2 2016 Growth
• Q2 vol/mix decline driven by GST-related
3.0%
(8.6%)
Organic Net Sales*
Price:
3.7%
Vol/mix: (0.7%)
Constant Currency
Segment Adjusted EBITDA
H1 2017 vs. H1 2016 Growth
5.4%
impacts in India, holiday-related
shipment timing in Indonesia and
distributor network realignment
• Favorable pricing driven by input costrelated price increases, primarily in Latin
America
• Q2 Constant Currency Segment Adjusted
EBITDA performance reflected vol/mix
decline, increased business investments
to support growth, as well as higher input
costs in local currency
(8.8%)
Organic Net Sales*
Price:
Vol/mix:
4.3%
1.1%
Constant Currency
Segment Adjusted EBITDA
* Non-GAAP financial measure. See Appendix to this presentation for more information, including GAAP to Non-GAAP reconciliations.
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8
Outlook
• Expect sequentially better organic growth in H2 vs Q2
 Fueled by strong pipeline of marketing, go-to-market, product quality
 Canada retail recovery and grocery innovation
 Accelerated growth in AMEA and Latin America
• Still targeting $1.7bn cumulative Integration Program savings,
net of inflation and business investments, by end of 2017
 Combination of savings ramp and cost phasing likely to mean less
incremental savings in Q3 versus prior year, more in Q4
• Strong H2 EPS growth from Net Sales, Adjusted EBITDA gains
 Adjusted EBITDA gains primarily driven by Integration savings, ROW growth
 Expect full-year 2017 effective tax rate between 29% and 30%
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Appendix
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Appendix
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Appendix
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Appendix
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Appendix
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Appendix
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Appendix
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Appendix
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Appendix
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Appendix
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