How did Kraft Heinz perform in fiscal 2023?

Net sales rose 0.6% to $26.64 billion, and Organic Net Sales increased 3.4%. Net income increased 20.2% to $2.85 billion, diluted EPS was $2.31, and Adjusted EPS was $2.98, up 7.2%. Adjusted EBITDA reached $6.31 billion, up 5.1%.

Why did fourth-quarter results decline?

Q4 net sales fell 7.1%, including a negative 6.1 percentage point impact from a 53rd week in the prior year. Organic Net Sales decreased 0.7%, with volume/mix down 4.4 percentage points due to elasticity from pricing actions and industry headwinds, particularly reduced SNAP benefits in the United States. Higher supply chain costs, increased SG&A investments, and unfavorable volume/mix also weighed on Adjusted EBITDA, which fell 5.3%.

What is the company's outlook for 2024?

Kraft Heinz expects Organic Net Sales growth of 0 to 2%, with positive price contribution throughout the year and volumes inflecting positive in the second half. It expects Adjusted Operating Income growth of 2 to 4% and Adjusted EPS growth of 1 to 3%, or $3.01 to $3.07. The outlook does not include additional share buybacks in 2024.

How did the company return capital to shareholders in 2023?

In fiscal 2023, the company paid $1,965 million in cash dividends and repurchased $455 million of common stock. On November 27, 2023, the Board approved a program to repurchase up to $3.0 billion of common stock through December 26, 2026, with $2.7 billion remaining as of December 30, 2023.

What drove the increase in cash from operations?

Net cash provided by operating activities was $3.98 billion, up 61.0%, primarily due to lower inventory cash outflows (which related to stock rebuilding in the prior year), lower tax payments tied to 2022 asset sales and trademark licensing, higher Adjusted EBITDA, and lower interest payments. These were partially offset by cash payments for the settlement of the consolidated securities class action lawsuit.

KHC 8-K: Earnings & Results

01—Abstract

Summary

Summary of the 8-K filed February 14, 2024. Cited figures are marked; the original filing is the authoritative source.

The Kraft Heinz Company reported fourth quarter and full year 2023 results on February 14, 2024, as described in a press release furnished as Exhibit 99.1.

For fiscal year 2023, net sales rose 0.6% to $26.64 billion^a, including a negative 1.8 percentage point impact from a 53rd week in the prior year. Organic Net Sales increased 3.4%, driven by price increases of 8.9 percentage points, partly offset by volume/mix declines of 5.5 percentage points. Net income increased 20.2% to $2.85 billion (net income attributable to common shareholders $2,855 million), and diluted EPS was $2.31, up 20.9%.

Adjusted EPS was $2.98^b, up 7.2%, and Adjusted EBITDA was $6.31 billion, up 5.1%. Free Cash Flow was $2.96 billion, and the company ended 2023 at its target Net Leverage of approximately 3.0x. The fourth quarter was weaker.

Net sales fell 7.1% to $6.86 billion^c, with Organic Net Sales down 0.7%, and volume/mix declined 4.4 percentage points amid consumer pressure, including the reduction of SNAP benefits in the United States. Diluted EPS was $0.61, down 15.3%, and Adjusted EPS was $0.78, down 8.2%. The fourth-quarter results included a 6.9 percentage point negative impact from a 53rd week in the prior year period, and a $162 million non-cash charge tied to the settlement of a U.K. defined benefit pension plan.

For fiscal 2024, the company guided to Organic Net Sales growth of 0 to 2%, Adjusted Operating Income growth of 2 to 4%, and Adjusted EPS growth of 1 to 3%, or $3.01 to $3.07^d. The outlook does not include additional share buybacks. The company also noted that it announced a $3.0 billion share repurchase program on November 27, 2023, with $2.7 billion remaining as of December 30, 2023.

02—Key points

Key Highlights

FY2023 net sales rose 0.6% to $26.64 billion; Organic Net Sales increased 3.4%, with price up 8.9 percentage points and volume/mix down 5.5 percentage points.
FY2023 diluted EPS was $2.31, up 20.9%; Adjusted EPS was $2.98, up 7.2%.
FY2023 Adjusted EBITDA was $6.31 billion, up 5.1%, and Free Cash Flow was $2.96 billion.
Q4 2023 net sales fell 7.1% to $6.86 billion, with Organic Net Sales down 0.7%; Q4 diluted EPS was $0.61, down 15.3%.
Q4 2023 net income included non-cash charges related to the $162 million settlement of a U.K. defined benefit pension plan.
FY2024 guidance: Organic Net Sales growth of 0 to 2%, Adjusted Operating Income growth of 2 to 4%, and Adjusted EPS of $3.01 to $3.07.
Ended 2023 at target Net Leverage of approximately 3.0x; a $3.0 billion share repurchase program was announced November 27, 2023, with $2.7 billion remaining.

03—Questions

Frequently Asked Questions

How did Kraft Heinz perform in fiscal 2023?
Net sales rose 0.6% to $26.64 billion, and Organic Net Sales increased 3.4%. Net income increased 20.2% to $2.85 billion, diluted EPS was $2.31, and Adjusted EPS was $2.98, up 7.2%. Adjusted EBITDA reached $6.31 billion, up 5.1%.
Why did fourth-quarter results decline?
Q4 net sales fell 7.1%, including a negative 6.1 percentage point impact from a 53rd week in the prior year. Organic Net Sales decreased 0.7%, with volume/mix down 4.4 percentage points due to elasticity from pricing actions and industry headwinds, particularly reduced SNAP benefits in the United States. Higher supply chain costs, increased SG&A investments, and unfavorable volume/mix also weighed on Adjusted EBITDA, which fell 5.3%.
What is the company's outlook for 2024?
Kraft Heinz expects Organic Net Sales growth of 0 to 2%, with positive price contribution throughout the year and volumes inflecting positive in the second half. It expects Adjusted Operating Income growth of 2 to 4% and Adjusted EPS growth of 1 to 3%, or $3.01 to $3.07. The outlook does not include additional share buybacks in 2024.
How did the company return capital to shareholders in 2023?
In fiscal 2023, the company paid $1,965 million in cash dividends and repurchased $455 million of common stock. On November 27, 2023, the Board approved a program to repurchase up to $3.0 billion of common stock through December 26, 2026, with $2.7 billion remaining as of December 30, 2023.
What drove the increase in cash from operations?
Net cash provided by operating activities was $3.98 billion, up 61.0%, primarily due to lower inventory cash outflows (which related to stock rebuilding in the prior year), lower tax payments tied to 2022 asset sales and trademark licensing, higher Adjusted EBITDA, and lower interest payments. These were partially offset by cash payments for the settlement of the consolidated securities class action lawsuit.

04—Continue

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