The Kraft Heinz Company Q3 FY2025 earnings call

• Progress in Q3 with modest top-line recovery vs first half, but operating environment remains challenging. - Updated 2025 outlook due to macro trends. - On track to separate into 2 independent companies in second half of 2026. - Taste Elevation recovery is slower than anticipated with 70% revenue gaining market share but elongated recovery. - Increased promotional investment around $300 million in U.S., $80 million-ish in media marketing, R&D investments, and incremental headcount in commercial-related functions. - Emerging Markets outside Indonesia showing strong growth, with Heinz brand up 13% YTD. - Playbook for separation working, focusing on unlocking shareholder value with 2 focused companies.

Taste Elevation has been improving meaningfully, with 70% of revenue now gaining market share. In Emerging Markets, outside of Indonesia, trends are encouraging; the Heinz brand in emerging markets is up 13% year-to-date. Indonesia is a ~$0.5 billion business, facing challenges due to softening demand from declining consumer sentiment. Emerging Markets excluding Indonesia is growing, demonstrating progress in growth and improvement.

• 2025 profit revision due to lower U.S. consumption, elongated Taste Elevation recovery, incremental inflation in Meat and Coffee, and Q3 supply chain one-offs. - 2025 promotional investment ~$300M in U.S., $80M+ in media marketing. - Q4 revenue outlook with revenue worse than Q3, impacted by inventory phasing and lower consumption. - Emerging Markets mid-single-digit growth guidance, with focus on Global Taste Elevation to return to growth in 2026 and North American Grocery to ensure stable cash flows into 2026.

• Challenging operating environment with worsening consumer sentiment. - Elongated recovery of Taste Elevation. - Incremental inflation in Meat and Coffee with competitive dynamics affecting pricing. - Supply chain issues in Q3 that impacted results. - Challenges in Indonesia due to softening demand and consumer sentiment. - Inventory phasing and soft consumption in the U.S. affecting Q4 performance.

Q: In light of weaker consumer sentiment, how much of the '25 profit revision is due to more aggressive spending vs costs/volume deleverage?

A: Profit revision not linked to incremental investments beyond prior communication; due to lower U.S. consumption, elongated Taste Elevation recovery, incremental inflation, and Q3 supply chain one-offs. We are increasing promotional, marketing, R&D, and headcount investments but don't think more price will yield results.

Q: Any thought on pivot for Kraft Heinz regarding spin?

A: We spent months with board to ensure unlocking shareholder value with 2 focused companies. Playbook working, we'll continue evaluating for shareholder value, targeting both companies to be investment grade with net debt at reasonable levels.

Q: On Emerging Markets, how big is Indonesia and what's Q4 outlook ex-Indonesia?

A: Indonesia is ~$0.5 billion business. Q4 Emerging Markets mid-single-digit growth guidance assumes improvement ex-Indonesia with Indonesia having challenges but actions being taken to correct.

Q: Pro forma performance of Global Taste Elevation vs North American Grocery in Q3 and Q4 outlook?

A: Both companies pro forma declined low single digits in Q3. Global Taste Elevation trajectory improving, expected to continue in Q4. North American Grocery had improved trends in Q3 but still declined, priority is stable cash flows into 2026.

Q: Promotional environment in U.S. retail and changes for '26?

A: Promotions concentrated around key holidays. We focus on household penetration with investments, assessing different tactics for next year including cross-merchandising, bundling, e-commerce events to improve returns.