Kraft Heinz : Second Quarter 2021 Pre-Recorded Management Discussion

Second Quarter 2021 Earnings Prepared Management Remarks | 08/04/21

Second Quarter 2021 Earnings Prepared Management Remarks

August 4, 2021

Please view these remarks in conjunction with our Q2 2021 earnings release, Q2 2021 Form 8-K and GAAP/non-GAAP reconciliations that can be found on our website at https://ir.kraftheinzcompany.com/under SEC Filings, or via the following link: https://ir.kraftheinzcompany.com/sec-filings

We also invite you to listen to our live question-and-answer webcast with Miguel Patricio (Chief Executive Officer), Paulo Basilio (Global Chief Financial Officer), Carlos Abrams-Rivera (U.S. Zone President), and Rafael Oliveira (International Zone President), which will begin today at 9:00 a.m. Eastern Daylight Time and will also be available on https://ir.kraftheinzcompany.com/.

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Second Quarter 2021 Earnings Prepared Management Remarks | 08/04/21

Slide 1

CHRIS JAKUBIK, HEAD OF GLOBAL INVESTOR RELATIONS, THE KRAFT HEINZ COMPANY

Hello. This is Chris Jakubik, Head of Global Investor Relations at The Kraft Heinz Company - and welcome to our second-quarter 2021 business update.

Slide 2

During our review, we will make some forward-looking statements that are based on how we see things today.

Actual results may differ due to risks and uncertainties and these are discussed in our earnings release and our filings with the SEC.

We will also discuss some non-GAAP financial measures during these remarks. These non-GAAP financial measures should not be considered a replacement for, and should be read together with, GAAP results. And you can find the GAAP to non-GAAP reconciliations within our earnings release and the supplemental materials posted at ir.kraftheinzcompany.com.

Slide 3

Today, our Chief Executive Officer, Miguel Patricio, will provide an update on our overall business performance. Carlos Abrams-Rivera will review business performance in the U.S. segment. Rafa Oliveira will discuss business performance in our International segment. And then Paulo Basilio, our Global Chief Financial Officer, will provide an overall financial review and our near-term outlook.

We have also scheduled a separate, live question-and-answer session with analysts.

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Second Quarter 2021 Earnings Prepared Management Remarks | 08/04/21

You can access our earnings release, supplemental materials, and audio of our question-and-answer session at ir.kraftheinzcompany.com. A replay of the question-and-answer session will be available following the event through the same website.

With that, I will turn it over to Miguel.

Slide 4

MIGUEL PATRICIO, CHIEF EXECUTIVE OFFICER, THE KRAFT HEINZ COMPANY

Thank you, Chris.

With the first half of 2021 now behind us, not only are we are gaining more visibility into our post-pandemic world, we are in a better position to assess our fundamental progress as a company since the pandemic took hold.

So I would like to start our review with some higher-level observations on where I believe we are as a company and how we are preparing ourselves for the future.

First and foremost, I am very happy and very proud that our Kraft Heinz team is displaying and building the power of scale with agility.

The starts and pauses to the reopening of economies around the world and challenges such as inflation and supply chain disruptions that are coming with it are a difficult aspect of our current reality.

Despite this, we believe our Q2 results serve as a good indication that we are, in fact, driving sustainable gains with our consumers and in our P&L versus pre- pandemic levels.

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Second Quarter 2021 Earnings Prepared Management Remarks | 08/04/21

We are driving our transformation agenda forward fueled by investments in our people, brands, and capabilities, all while driving efficiencies and maintaining industry-leading profitability.

And we continue to strengthen our portfolio, improve our financial flexibility, and position ourselves to take accretive actions to accelerate our transformation.

Slide 5

From a financial perspective, we have talked about 2019 being an important measuring stick for our progress. Progress against our strategy and transformation, but also from a pre- versus post-pandemic world.

In that context, we see resilient growth on both our top and bottom lines.

In the second quarter, we maintained the lion's share of extraordinary gains we had in 2020. As a result, Organic Net Sales grew 5% versus the same period in 2019. Our bottom line also remained strong, with Constant Currency Adjusted EBITDA up 5.5% versus Q2 2019, despite a number of headwinds.

And based on our performance to date, we expect to deliver a stronger 2021 than we projected when we provided our initial outlook in February.

Slide 6

Even more encouraging, our growth is coming from areas where we have made investments, consistent with the new strategy we launched last year.

We are realizing a strong mix improvement in our higher margin Grow platforms, especially in our global Taste Elevation platform.

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Second Quarter 2021 Earnings Prepared Management Remarks | 08/04/21

We are capturing new business in emerging markets where we have significant whitespace opportunities. Our progress in these markets is accelerating and their contribution to the total company continues to grow.

By channel, I would also note that …

• our retail business has remained well above pre-pandemic levels;
• and our foodservice business is showing a relatively quick rebound, as we outperform the broader channel in the United States and many other markets where we operate.

And while our strategic investments are beginning to drive our results, it's still early in our transformation, which makes us optimistic about how our priorities and initiatives can fuel our momentum going forward.

Slide 7

In the past, we have talked about our need and my passion for modernizing our connections with consumers through stronger and more creative marketing.

This is happening and we have more on the way.

Through the first half of the year, we have strongly increased our marketing spend versus the first half of 2019 and we remain on track with our planned increases for the rest of the year.

Within this spend, we will put more dollars behind working media, digital channels, and high-performing priority brands and platforms.

We are also starting to see the culture of creativity we want to build showing through with more consumer-led, more culturally relevant campaigns, and this includes external industry recognition with our teams winning 6 Cannes Lions awards this year, while being shortlisted for 17 other awards.

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