Kraft Heinz Co [KHC] Conference call transcript for 2022 q1
2022-04-27 11:40:11
Fiscal: 2022 q1
Operator: Ladies and gentlemen, thank you for standing by, and welcome to the Kraft Heinz Company Frst Quarter Results Question-and-Answer Session. I'd now like to turn the call over to your host, Chris Jakubik. You may begin.
Chris Jakubik: Thank you, and hello, everyone. This is Chris Jakubik, Head of Global Investor Relations at the Kraft Heinz Company, and welcome to our Q&A session for our first quarter 2022 business update. During our remarks today, 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 they are discussed in our earnings release and our filings with the SEC. We will also discuss some non-GAAP financial measures today during the call, and 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. Before we begin, I'm going to hand it over to our CEO, Miguel Patricio, for a few quick opening comments.
Miguel Patricio: Well, thank you, Chris. I would just like to start by sharing how proud I am of our people, and the truly transformational work they continue to deliver for our company. We've seen 2 years of a lot of disruption, and they continue to successfully address the short-term challenges, at the same time that we are building the long-term advantage of our company and our brands. Our teams delivered a strong start for the year, both on top line and bottom line. We remain on strategy with the strongest growth coming from our priority platforms, brands, channels and markets. We are effectively managing our inflation, improving our supply constraints, while continuing to gain incremental efficiencies. We continue to make progress, building and deploying initiatives to accelerate our advantages in areas like becoming more agile, becoming much more creative in marketing, developing joint business plans between retail and foodservice and capacity unlocks in our Grow and Energize platforms. As you are now seeing, we are doing this through strategic partnerships with technology clients and cutting-edge innovators to accelerate our transformation and redefine best-in-class across our value chain. It is a very exciting time for Kraft Heinz and I don't think we could be better equipped to build on our momentum through what promises to remain a very challenging environment. With that, well, let's take your questions.
Operator: [Operator Instructions] Our first question comes from Andrew Lazar with Barclays.
Operator: Our next question comes from David Palmer with Evercore ISI.
Operator: Our next question comes from Bryan Spillane with Bank of America.
Operator: Our next question comes from Jason English with Goldman Sachs.
Operator: Our next question comes from Ken Goldman with JPMorgan.
Operator: Our next question comes from Robert Moskow of Credit Suisse.
Operator: Our last question comes from Chris Growe with Stifel.
Miguel Patricio: I opened today's call saying that it's a very exciting time to be at Kraft Heinz, and let me tell you why we think that way. First, we are very proud because we've been able to navigate through all the uncertainties over the last 2 years, at the same time that we are building a much better tomorrow. And that's not easy in moments like this. We are a very company -- in a very different company today. We are much more growth-oriented. We have improved our portfolio mix, and today, just the platforms where we are working, and we have focused, Taste Elevation is about 30% of our business today. It's big and growing, and profitable. And just to put it in perspective, it's bigger and more profitable than McCormick, just to give you an example. We have consistent double-digit net sales growth in emerging markets. Our business in foodservice is strong and growing. And we are investing more in marketing in our brands and doing a much better job, so really, the profile in terms of growth is very different. From an efficiency standpoint, I think that we are in a much better place, not only because of the $2 billion that we talked about 3 years ago, when we delivered last year and the previous year on gross savings and supply, but efficiencies across the board, I mean, from marketing to distribution and these partnerships now with technology companies that will help us accelerate these efficiencies. Finally, I think that we have a very different situation from a financial flexibility standpoint. With the discipline we had in the last 2 years, put us back in investment grade, and in a record time, just in 2 years. And going forward, we will continue generating free cash flow conversion at a rate of 100%, and we'll look to acquire business and capabilities that can be much more powerful when combined with the scale of our portfolio. All is, of course, with a lot of discipline in pricing. So that's why it's exciting to be at this moment working at Kraft Heinz. Thank you.
Andre Maciel: Thank you, Chris. Thank you, Chris. You're pretty good.
Operator: Ladies and gentlemen, this does conclude today's presentation. You may now disconnect, and have a wonderful day.
