Q4 2024 Kraft Heinz Co Earnings Call - Pre-Recorded

February 12, 2025

During the following remarks, we will make forward looking statements regarding our expectations for the future including related to our business plans and expectations strategy efforts in investments and related timing and expected impacts.

Operator: He's closely tied to rewards.

Carlos Abrams: This demonstrates the effectiveness of our compensation model in aligning pay with results. Our adjusted operating income growth, along with share repurchases, led to adjusted EPA growth of 2.7%. Finally, free cash flow came in at approximately $3.2 billion, an increase of 6.6% versus the prior year.

This demonstrates the effectiveness of our compensation model in aligning with results.

Other adjusted operating income growth along with share repurchases led to adjusted EPS growth of two 7%.

These statements are based on how we see things today and actual results may differ materially due to risks and uncertainties.

Carlos Abrams-Rivera: Finally, free cash flow came in at approximately $3.2 billion, an increase of 6.6% versus the prior year. Moving to the details of our performance across the three strategic pillars. In our accelerated platforms in North America retail, organic net sales declined 2.9%. This was primarily driven by weakening trends in three specific brands and the planned exit of our unprofitable bulk vinegar business. This overshadowed strong performances across our Ore-Ida, Taco Bell, Philadelphia, and Heinz brands, which together make up about 40% of sales in US retail accelerate. In global away from home, organic net sales declined 0.6%. Growth in international away from home was more than offset by a decline in the US. This decline was driven primarily by two planned business exits for margin-diluted businesses, a temporary plant closure in Q2, and softer traffic trends relative to 2023.

Finally, free cash flow came in at approximately $3.2 billion, an increase of 6.6% versus the prior year. Moving to the details of our performance across the three strategic pillars. In our accelerated platforms in North America retail, organic net sales declined 2.9%. This was primarily driven by weakening trends in three specific brands and the planned exit of our unprofitable bulk vinegar business. This overshadowed strong performances across our Ore-Ida, Taco Bell, Philadelphia, and Heinz brands, which together make up about 40% of sales in US retail accelerate. In global away from home, organic net sales declined 0.6%. Growth in international away from home was more than offset by a decline in the US. This decline was driven primarily by two planned business exits for margin-diluted businesses, a temporary plant closure in Q2, and softer traffic trends relative to 2023.

Finally free cash flow came in at approximately $3 2 billion.

Please see the cautionary statements and risk factors contained in today's earnings release, which accompanies these remarks as well as our most recent 10-K.

An increase of six 6% versus the prior year.

Yeah.

Carlos Abrams: Moving to the details of our performance across the three strategic pillars. In our accelerated platforms in North America retail, organic net sales declined 2.9 percent. This was primarily driven by weakening trends in three specific brands and the planned exit of our unprofitable bulk vinegar business. This overshadowed strong performances across our Arriva, Taco Bell, Philadelphia, and Heinz brand, which together make up about 40% of sales in U.S. retail accelerates. In global away from home, organic net sales declined 0.6%. growth in international away from home was more than offset by a decline in the U.S. This decline was driven primarily by two planned business exits for margin-deluded businesses, a temporary planned closure in the second quarter, and softer traffic trends relative to 2023.

Moving to the details of our performance across the three strategic pillars.

10-Q, and 8-K filings for more information regarding these risks and uncertainties.

In our accelerate platforms in North America retail organic net sales declined two 9%. This was primarily driven by weakening trends in three specific brands and the planned exit of unprofitable bulk vinegar business.

Additionally, we will refer to non-GAAP financial measures, which exclude certain items from our financial results reported in accordance with GAAP.

Please refer to today's earnings release, and our non-GAAP information that accompanying these remarks, which are available on our website at IR Dot Kraft Heinz company Dot Com under news and events for a discussion of our non-GAAP financial measures and reconciliations to the comparable GAAP financial measures.

This overshadowed strong performances across our either Taco Bell, Philadelphia, and Heinz brand, which together make up about 40% of sales in U S retail accelerate.

In global away from home organic net sales declined 6%.

Speaker Change: Today, our Chief Executive Officer, Carlos Abrams Rivera, who will provide an update on our overall business performance.

Growth in international and away from home was more than offset by a decline in the U S.

This decline was driven primarily by two planned business exit for margin dilutive businesses, a temporary plant closure in the second quarter and softer traffic trends relative to 2023.

Speaker Change: And Andre Marcio, our global Chief Financial Officer, who will provide a financial review of the fourth quarter and will discuss our 2025 outlook.

Carlos Abrams-Rivera: In the fourth quarter, global away from home came in below our expectations. To improve our performance in 2025, we are committed to providing additional value to our customers. We will be increasing our investment in trade alongside our marketing initiative. Through our premium loyalty program, Heinz Verify, we will provide customers with access to bundles, traffic-driving promotions, and our state-of-the-art culinary portfolio and equipment. Turning to emerging markets, we grew 4% versus full year 2023, driven by both price and volume mix. Excluding pressures experienced in Brazil and China, the rest of emerging markets grew double digits in line with our long-term algorithm. In the fourth quarter, emerging markets' organic net sales came in below our expectations, driven primarily by performance in China, where consumer confidence continues to remain soft.

In the fourth quarter, global away from home came in below our expectations. To improve our performance in 2025, we are committed to providing additional value to our customers. We will be increasing our investment in trade alongside our marketing initiative. Through our premium loyalty program, Heinz Verify, we will provide customers with access to bundles, traffic-driving promotions, and our state-of-the-art culinary portfolio and equipment. Turning to emerging markets, we grew 4% versus full year 2023, driven by both price and volume mix. Excluding pressures experienced in Brazil and China, the rest of emerging markets grew double digits in line with our long-term algorithm. In the fourth quarter, emerging markets' organic net sales came in below our expectations, driven primarily by performance in China, where consumer confidence continues to remain soft.

Carlos Abrams: in the fourth quarter, global away from home came in below our expectations.

In the fourth quarter global away from home came in below expectations.

Speaker Change: We are also scheduled a separate live question and answer session with analysts.

Carlos Abrams: To improve our performance in 2025, we are committed to providing additional value to our customers. We will be increasing our investment in trade alongside our marketing initiatives. And through our premium loyalty program, Heinz Verify, we will provide customers with access to bundles, traffic driving promotions, and our state-of-the-art culinary portfolio and equipment. Turning to emerging markets, we grew 4% versus full year 2023, driven by both price and volume mix. Excluding precious experiences in Brazil and China, the rest of emerging markets grew double digits in line with our long-term algorithm. In the fourth quarter, emerging markets regarding net sales came in below our expectations, driven primarily by performance in China, where consumer confidence continues to remain soft.

To improve our performance in 2025, we are committed to providing additional value to our customers, we will be increasing our investment in trade alongside our marketing initiative.

Speaker Change: You can access our question and answer session at IR Dot Kraft Heinz company Dot com.

Speaker Change: A replay will also be available following the event through the same website.

And through our premium loyalty program Heinz verify we will provide customers with access to bundled traffic driving promotions and our state of the art culinary portfolio and equipment.

Speaker Change: With that I will turn it over to Carlos.

Carlos: Thank you Anne Marie and thank you all for joining US today I would like to start with a big Thank you to the Kraft Heinz team for working tirelessly in what proved to be a challenging year for <unk>.

Turning to emerging markets, we grew 4% versus full year 2023, driven by both price and volume mix.

Speaker Change: And for the industry.

Speaker Change: Together, we maintain our focus on building and investing for the future. We have demonstrated our ability to be efficient cash generators, delivering both industry, leading gross margins and strong free cash flow.

Excluding pressures experienced in Brazil, and China, the rest of emerging markets grew double digits in line with our long term algorithm.

In the fourth quarter emerging markets are growing net sales came in below our expectations driven primarily by performance in China, where consumer confidence continues to remain soft.

Speaker Change: We have delivered efficiencies to fuel investments that are driving meaningful product renovation and innovation and enhancing our marketing capabilities all of which are helping us build brands superiority.

Carlos Abrams-Rivera: As a result, we saw more than anticipated inventory de-loading as retail customers and distributors are reducing working capital and costs. Now, going a bit deeper into our North America retail business, last quarter, we discussed a couple of core categories that are driving year-over-year top-line pressure, including Lunchables, Kraft Mayonnaise, Kraft Mac and Cheese, and Capri Sun. Across each of these brands, we have kicked off the Brand Growth System, running deep forensic-like assessment that will uncover the most meaningful opportunities to drive brand superiority. We are confident that the Brand Growth System will make a meaningful difference because we have already seen its success in action. In 2024, we ran pilots on Philadelphia cream cheese and Heinz in the UK. On Philadelphia, we captured wide space in growing channels with 13% growth in club.

As a result, we saw more than anticipated inventory de-loading as retail customers and distributors are reducing working capital and costs. Now, going a bit deeper into our North America retail business, last quarter, we discussed a couple of core categories that are driving year-over-year top-line pressure, including Lunchables, Kraft Mayonnaise, Kraft Mac and Cheese, and Capri Sun. Across each of these brands, we have kicked off the Brand Growth System, running deep forensic-like assessment that will uncover the most meaningful opportunities to drive brand superiority. We are confident that the Brand Growth System will make a meaningful difference because we have already seen its success in action. In 2024, we ran pilots on Philadelphia cream cheese and Heinz in the UK. On Philadelphia, we captured wide space in growing channels with 13% growth in club.

Carlos Abrams: As a result, we saw more than anticipated inventory deloading as retail customers and distributors are reducing working capital and costs.

As a result, we saw more than anticipated inventory de loading as retail customers and distributors.

Speaker Change: And despite a weaker macroeconomic backdrop.

Reducing working capital and cost.

Speaker Change: Turn meaningful capital to our stockholders in 2024.

Now going a bit deeper into our North America retail business.

Carlos Abrams: Now, going a bit deeper into our North America retail business. Last quarter, we discussed a couple of core categories that are driving year-over-year top-line pressure, including Lunchables, Kraft Mayonnaise, Kraft Mac and Cheese, and Capri Sun. Across each of these brands, we have kicked off the brand growth system, running deep, forensic-like assessments that will uncover the most meaningful opportunities to drive brand superiority. We are confident that the brand growth system will make a meaningful difference because we have already seen its success in action. In 2024, we ran pilots on Philadelphia cream cheese and Heinz in the UK.

Speaker Change: $2 7 billion returned through our dividend, which offers the highest yielding food and share buybacks.

Last quarter, we discussed a couple of core categories that are driving year over year topline pressure, including Lunchables, <unk>, Kraft Mac and cheese and Capri Sun.

Speaker Change: As we look ahead to 2025, we remain confident in our strategy.

Across each of these brands, we have kick up the brand growth system running deep forensic leg assessment that will cover the most meaningful opportunities drive brands' superiority.

Speaker Change: By building upon the advancements made in 2024 and executing with excellence.

Speaker Change: Anticipating improvements each quarter in our topline performance.

Speaker Change: This will be driven by growth in emerging markets and global away from home with you had retail benefits from actions. We are taking to further implement our brand growth system.

We are confident that the brand grow system will make a meaningful difference because we have already seen it took assessing action in 2024, we run pilots on Philadelphia cream cheese and Heinz in the UK.

Speaker Change: And we will do this while preserving profitability something we have proven we know how to do well.

Carlos Abrams: On Philadelphia, we captured wide space in growing channels with 13% growth in club. And on Heinz ketchup in the UK, we grew volume share by 2.3 percentage points, a category we haven't grown share in five years. We are now scaling this approach across these four brands with dedicated Agile pods already in place for each. And importantly, we are committed to making necessary investments in the products and marketing to close those gaps. In parallel to starting the brand growth system, the initial actions we have taken are showing early signs of traction as we're investing in the products to drive superiority.

<unk> recapture why space in growing channels with 13% growth in club and on Heinz ketchup in the UK. We grew volume share by two three percentage points a category, we have grown share in five years.

Carlos Abrams-Rivera: On Heinz Ketchup in the UK, we grew volume share by 2.3 percentage points, a category we haven't grown share in five years. We are now scaling this approach across these four brands with dedicated agile pods already in place for each. Importantly, we are committed to making necessary investments in the products and marketing to close those gaps. In parallel to starting the Brand Growth System, the initial actions we have taken are showing early signs of traction as we're investing in the products to drive superiority. On Lunchables, we are strengthening the core and expanding the occasions. Take, for example, our recent launch of Spicy Nacho, which is 17% incremental to the meal combos category, driven by increases in both buy rate and consumption.

On Heinz Ketchup in the UK, we grew volume share by 2.3 percentage points, a category we haven't grown share in five years. We are now scaling this approach across these four brands with dedicated agile pods already in place for each. Importantly, we are committed to making necessary investments in the products and marketing to close those gaps. In parallel to starting the Brand Growth System, the initial actions we have taken are showing early signs of traction as we're investing in the products to drive superiority. On Lunchables, we are strengthening the core and expanding the occasions. Take, for example, our recent launch of Spicy Nacho, which is 17% incremental to the meal combos category, driven by increases in both buy rate and consumption.

Speaker Change: With that let us turn to our 2020 for full year results.

Speaker Change: Organic net sales declined two 1% versus the prior year.

Speaker Change: Length of our strategic pillars. This was driven by the growth in emerging markets, which was more than offset by declines in North America retail and away from home in the U S.

We are now scaling this approach across this Ford brands with dedicated agile pods already in play to reach and importantly, we are committed to making the necessary investments in the products and marketing to close those gaps.

Speaker Change: Despite the topline pressure, we generated 100 basis points of adjusted gross profit margin expansion versus 2023.

In parallel to starting their brand growth system. The initial actions. We have taken are showing early signs of traction as we're investing in the products to drive superiority.

Speaker Change: This was due in part to the capabilities, we have built over the years, including investments in technologies that are driving efficiencies across areas like revenue management manufacturing and logistics. These.

On Lunchables, we are strengthening the core and expanding the locations.

Carlos Abrams: On launchables, we are strengthening the core and expanding the locations. Take, for example, our recent launch of Spicy Nacho, which is 17% incremental to the meal combos category, driven by increases in both buy rate and consumption. We also continue to renovate as part of our ongoing commitment to deliver exceptional quality, including upgrades to our cookies and crackers to meet evolving tastes. In our mayonnaise business, we are strengthening our value proposition to re-engage with last users and to attract new ones. We are bringing new flavors, including pickle mayo, which has successfully rolled out in the U.S.

Speaker Change: These efforts enable us to deliver nearly $750 million in growth efficiencies.

For example, our recent launch of spicy Nacho, which is 17% incremental to the meal combos category driven by increases in both by rate and consumption. We also continue to renovate as part of our ongoing commitment to deliver exceptional quality, including upgrades to our cookies and crackers to meet evolve.

Carlos Abrams-Rivera: We also continue to renovate as part of our ongoing commitment to deliver exceptional quality, including upgrades to our cookies and crackers to meet evolving tastes. In our mayonnaise business, we are strengthening our value proposition to re-engage with loyal users and to attract new ones. We are bringing new flavors, including Pickle Mayo, which has successfully rolled out in the US. We're taking this flavor expansion strategy globally, launching new flavors in countries including Canada, Australia, the UK, and the Middle East. In addition to our flavor strategy, we are delighting consumers with better-for-you options through our Primal Kitchen brand. For Kraft Mac & Cheese, we are connecting and engaging with families and younger consumers. We are doing this through the new bold flavors like Ranch and Jalapeño, better-for-you options, new pack sizes, and unpacked partnerships.

We also continue to renovate as part of our ongoing commitment to deliver exceptional quality, including upgrades to our cookies and crackers to meet evolving tastes. In our mayonnaise business, we are strengthening our value proposition to re-engage with loyal users and to attract new ones. We are bringing new flavors, including Pickle Mayo, which has successfully rolled out in the US. We're taking this flavor expansion strategy globally, launching new flavors in countries including Canada, Australia, the UK, and the Middle East. In addition to our flavor strategy, we are delighting consumers with better-for-you options through our Primal Kitchen brand. For Kraft Mac & Cheese, we are connecting and engaging with families and younger consumers. We are doing this through the new bold flavors like Ranch and Jalapeño, better-for-you options, new pack sizes, and unpacked partnerships.

Speaker Change: Portion of which was reinvested in our brands.

Speaker Change: We remain committed to a disciplined approach to investing ensuring that our resources are driving sustainable long term volume growth.

Speaker Change: Our gross margin expansion in addition to a benefit from lower variable incentive compensation for the year contributed to adjusted operating income growth of one 2%.

The taste.

In EMEA business, we are strengthening our value proposition to reengage with lapsed users and to attract new ones, we are bringing new flavors, including <unk>, which has successfully rollout in the U S and we're taking this flavor expansion strategy globally, launching new flavors in countries, including Canada.

Speaker Change: The reduction in variable incentive compensation reflects our culture of meritocracy, where performance is closely tied to rewards.

Carlos Abrams: And we're taking this flavor expansion strategy globally, launching new flavors in countries including Canada, Australia, the UK, and the Middle East. In addition to our flavor strategy, we are delighting consumers with better-for-you options through our Primal Kitchen brand. For Kraft Mac and Cheese, we are connecting and engaging with families and younger consumers. We are doing this through the new bold flavors like Ranch and Jalapeno. Better for you options, new pack sizes and unpacked partnerships. And we are seeing momentum here with a 1% point improvement in the year-over-year sales trend. And finally, on Capri Sun. I am very excited that we have generated a five percentage point improvement in year-over-year sales.

Speaker Change: This demonstrates the effectiveness of our compensation model in aligning with results.

Australia, the UK and the middle East.

In addition to our flavor strategy, we are delighting consumers with better for you options through our primal kitchen brand.

Speaker Change: Our adjusted operating income growth along with share repurchases led to adjusted EPS growth of two 7%.

For Kraft Mac and cheese, we are connecting and engaging with families and younger consumers. We are doing this through the new bold flavors like Ranjan Hal opinion, better for you options, new pack sizes, and low impact partnerships and we are seeing momentum here with a one percentage point improvement in the.

Speaker Change: Finally free cash flow came in at approximately $3 2 billion, an increase of six 6% versus the prior year.

Carlos Abrams-Rivera: We are seeing momentum here with a 1 percentage point improvement in the year-over-year sales trends. And finally, on Capri Sun, I am very excited that we have generated a 5 percentage point improvement in year-over-year sales. We invested in the product innovation to win on taste, and now we're bringing value to consumers through innovation, including a new 64-ounce multi-serve and our single-serve bottles. Our accelerated platforms represent the most attractive spaces within our portfolio, where we have the highest right to win, and in turn, where we have been prioritizing our investments. This prioritization has contributed to growth across several of our iconic brands, including Philadelphia, Heinz Ketchup, Ore-Ida, and Taco Bell. As I mentioned earlier, Philadelphia is one of the brands we piloted in our Brand Growth System in 2024.

We are seeing momentum here with a 1 percentage point improvement in the year-over-year sales trends. And finally, on Capri Sun, I am very excited that we have generated a 5 percentage point improvement in year-over-year sales. We invested in the product innovation to win on taste, and now we're bringing value to consumers through innovation, including a new 64-ounce multi-serve and our single-serve bottles. Our accelerated platforms represent the most attractive spaces within our portfolio, where we have the highest right to win, and in turn, where we have been prioritizing our investments. This prioritization has contributed to growth across several of our iconic brands, including Philadelphia, Heinz Ketchup, Ore-Ida, and Taco Bell. As I mentioned earlier, Philadelphia is one of the brands we piloted in our Brand Growth System in 2024.

Speaker Change: Yeah.

Speaker Change: Moving to the details of our performance across the three strategic pillars.

Speaker Change: In our accelerate platforms in North America retail organic net sales declined two 9%. This was primarily driven by weakening trends in three specific brands and the planned exit of unprofitable bulk vinegar business.

Year over year sales trends.

And finally on Capri Sun.

Speaker Change: Hi, I'm very excited that we have generated a five percentage point improvement in year over year sales, we invest during the product innovation to win on taste and now we're bringing value to consumer through innovation, including a new 64 ounce multi serve and our single serve bottles.

Carlos Abrams: We invested in the product innovation to win on taste, and now we're bringing value to consumers through innovation, including a new 64-ounce multi-serve and our single-serve bottle.

Speaker Change: This overshadowed strong performances across our either Taco Bell, Philadelphia, and Heinz brand, which together make up about 40% of sales in U S retail accelerate.

Speaker Change: Our accelerate platforms represent the most attractive spaces within our portfolio, where we have the highest right to win and in turn we have been prioritizing our investments.

Carlos Abrams: Our Accelerate platforms represent the most attractive pages within our portfolio, where we have the highest right to win, and in turn, where we have been prioritizing our investment. This prioritization has contributed to growth across several of our iconic brands, including Philadelphia, Heinz Ketchup, Ore-Ida, and Taco Bell. As I mentioned earlier, Philadelphia is one of the brands we piloted in our brand growth system in 2024. We uncovered opportunities to attract under-indexed audiences, to expand distribution in wide-space channels, and to highlight the versatility of cream cheese across new usage occasions. Our initial learnings and actions are yielding results, with 2% dollar growth sales despite lapping private label out of stocks in 2023.

Speaker Change: In global away from home organic net sales declined 6%.

Speaker Change: Growth in international away from home was more than offset by a decline in the U S.

Speaker Change: This prioritization has contributed to growth across several of our iconic brands, including Philadelphia, Heinz Ketchup arrived and Taco Bell.

Speaker Change: This decline was driven primarily by two planned business exit from margin dilutive businesses, a temporary plant closure in the second quarter and softer traffic trends relative to 2023.

Speaker Change: As I mentioned earlier Philadelphia is one of the brands, we piloted in our brand growth system in 2024.

Carlos Abrams-Rivera: We uncovered opportunities to attract under-indexed audiences, to expand distribution in white space channels, and to highlight the versatility of cream cheese across new user occasions. Our initial learnings and actions are yielding results, with 2% dollar gross sales despite lapping private label out-of-stocks in 2023. Heinz Ketchup grew dollar sales 2% versus 2023. This was driven by impactful marketing campaigns and by increasing distribution from innovation. We have innovated across formats and flavors to deliver on consumer desires, including the successful launch of our Pickle Ketchup, which has been 50% incremental to the flavor ketchup category, and we are now expanding it to four continents. On Ore-Ida, we have been able to meet the strong consumer demand for our products, which in turn enabled us to increase investments in marketing and promotions. This contributed to dollar sale growth of 8% in 2024.

We uncovered opportunities to attract under-indexed audiences, to expand distribution in white space channels, and to highlight the versatility of cream cheese across new user occasions. Our initial learnings and actions are yielding results, with 2% dollar gross sales despite lapping private label out-of-stocks in 2023. Heinz Ketchup grew dollar sales 2% versus 2023. This was driven by impactful marketing campaigns and by increasing distribution from innovation. We have innovated across formats and flavors to deliver on consumer desires, including the successful launch of our Pickle Ketchup, which has been 50% incremental to the flavor ketchup category, and we are now expanding it to four continents. On Ore-Ida, we have been able to meet the strong consumer demand for our products, which in turn enabled us to increase investments in marketing and promotions. This contributed to dollar sale growth of 8% in 2024.

Speaker Change: In the fourth quarter global away from home came in below expectations.

Speaker Change: Jim covered opportunities to attract under index audiences to expand distribution and wide space channel and to highlight the versatility of cream cheese across new use occasions.

Speaker Change: To improve our performance in 2025, we are committed to providing additional value to our customers, we will be increasing our investment in trade alongside our marketing initiative.

Speaker Change: Our initial learnings and actions are yielding results with 2% dollar gross sales despite lapping private label out of stocks in 2023.

Speaker Change: And through our premium loyalty program Heinz verify we will provide customers with access to bundled traffic driving promotions and our state of the art culinary portfolio and equipment.

Speaker Change: And Heinz Ketchup grew dollar sales, 2% versus 2023.

Carlos Abrams: and Heinz Ketchup grew dollar sales 2% versus 2023. This was driven by impactful marketing campaigns and by increasing distribution from innovation. We have innovated across formats and flavors to deliver on consumer desires, including the successful launch of our pickle ketchup, which has been 50 percent incremental to the flavor ketchup category. And we are now expanding it to four continents. On Horida, we have been able to meet the strong consumer demand for our products, which in turn enabled us to increase investments in marketing and promotion. This contributed to dollar sale growth of 8% in 2024. Lastly, Taco Bell had a great year, growing 24% versus 2023.

Speaker Change: This was driven by impactful marketing campaigns and by increasing distribution from innovation.

Speaker Change: Turning to emerging markets, we grew 4% versus full year 2023, driven by both price and volume mix excluding.

Speaker Change: We have innovated across formats and flavors to deliver on consumer desires, including the successful launch of our pickle catch up which has been 50% incremental to the flavor ketchup category and we have now expanded it to four continents.

Speaker Change: Excluding pressures experienced in Brazil, and China, the rest of emerging markets grew double digits in line with our long term algorithm.

Speaker Change: In the fourth quarter emerging markets regarding net sales came in below our expectations driven primarily by performance in China, where consumer confidence continues to remain soft.

Speaker Change: Encore, either we have being able to meet the strong consumer demand for our products, which in turn enabled us to increase investments in marketing and promotions.

Speaker Change: This contributed to dollar sales growth of 8% in 2024.

Carlos Abrams-Rivera: Lastly, Taco Bell had a great year, growing 24% versus 2023. This was driven by expanded distribution and share gains on both existing products and innovation, as we doubled down on the fast-growing Mexican cuisine category, growing at a pace of 4.5%. Turning to our next strategic pillar, global away from home. Despite the decline in our top-line growth, we are seeing wins across each key area of our strategy, growing in higher margin channels, increasing penetration beyond ketchup, and go-to-market excellence. In the US, we gained 70 basis points of share and grew sales mid-single digits for the full year across higher margin, non-commercial channels. This includes wins in entertainment and travel. Earlier this year, we announced a new multi-year partnership with the Chicago Cubs, where Heinz has been named the official condiment of Wrigley Field. This included incremental distribution on Heinz Ketchup, Mustard, Relish, and more.

Lastly, Taco Bell had a great year, growing 24% versus 2023. This was driven by expanded distribution and share gains on both existing products and innovation, as we doubled down on the fast-growing Mexican cuisine category, growing at a pace of 4.5%. Turning to our next strategic pillar, global away from home. Despite the decline in our top-line growth, we are seeing wins across each key area of our strategy, growing in higher margin channels, increasing penetration beyond ketchup, and go-to-market excellence. In the US, we gained 70 basis points of share and grew sales mid-single digits for the full year across higher margin, non-commercial channels. This includes wins in entertainment and travel. Earlier this year, we announced a new multi-year partnership with the Chicago Cubs, where Heinz has been named the official condiment of Wrigley Field. This included incremental distribution on Heinz Ketchup, Mustard, Relish, and more.

Speaker Change: As a result, we saw more than anticipated inventory de loading as retail customers and distributors are reducing working capital and cost.

Speaker Change: Lastly, Taco Bell had a great year growing 24% versus 2023.

Speaker Change: Now going a bit deeper into our North America retail business.

Carlos Abrams: This was driven by expanded distribution and shared gains on both existing products and innovation. as we've doubled down on the fast-growing Mexican cuisine category, growing at a pace of 4.5%.

Speaker Change: This was driven by expanded distribution and share gains on both existing products and innovation as.

Speaker Change: Last quarter, we discussed a couple of core categories that are driving year over year topline pressure, including Lunchables, <unk>, Kraft Mac and cheese and Capri Sun.

Speaker Change: As we double down on the fast growing Mexican cuisine category growing at a pace of four 5%.

Speaker Change: Turning to our next strategic pillar global away from home. Despite a decline in our topline growth we are seeing wins across each key area of our strategy growing the higher margin channels, increasing penetration beyond ketchup and go to market excellence.

Across each of these brands, we have kick up the brand growth system running deep forensic like assessment that will cover the most meaningful opportunities drive brands' superiority.

Carlos Abrams: Turning to our next strategic pillar, global away from home. Despite the decline in our top line growth, we are seeing wins across each key area of our strategy, growing in higher margin channels, increasing penetration beyond catch up and go to market action. In the U.S., we gain 70 basis points of share and group sales mid-single digits for the full year across higher margins, non-commercial channels. This includes Weinstein Entertainment and travel. Earlier this year, we announced a new multi-year partnership with the Chicago Cubs, where Heinz has been named the official condiment of Wrigley Field. This included incremental distribution on Heinz ketchup, mustard, relish, and more.

Speaker Change: We are confident that the brand grow system will make a meaningful difference because we have already seen success in action in 2024, we run pilots from Philadelphia cream cheese and Heinz in the UK.

Speaker Change: In the U S. We gained 70 basis points of share and grew sales mid single digits for the full year across higher margin noncommercial channels.

Speaker Change: <unk> recapture why space in growing channels with 13% growth in club and on highest catch up in the UK. We grew volume share by two three percentage points a category, we have grown share in five years.

This includes wincing entertainment and travel.

Speaker Change: Earlier this year, we announced a new multi year partnership with the Chicago Cubs were high has been named the official <unk> of Wrigley field.

Carlos Abrams-Rivera: I am also excited to share that we have signed a new contract with Hilton Hotels, making Kraft Heinz the preferred vendor for sauces and condiments globally. This presents a large opportunity for us, and we are excited for the doors it unlocks, partnering with Hilton to leverage their worldwide presence in over 130 countries to drive growth. We also continue to expand beyond ketchup. I just mentioned our partnership with the Chicago Cubs. This is one example where fans can also enjoy Kraft Mac and Cheese, Philadelphia, and Primal Kitchen throughout the ballpark. And more recently, we further increased our penetration of Philadelphia cream cheese in away from home with Dunkin'. In US away from home, we grew Philadelphia cream cheese high single digits in 2024.

I am also excited to share that we have signed a new contract with Hilton Hotels, making Kraft Heinz the preferred vendor for sauces and condiments globally. This presents a large opportunity for us, and we are excited for the doors it unlocks, partnering with Hilton to leverage their worldwide presence in over 130 countries to drive growth. We also continue to expand beyond ketchup. I just mentioned our partnership with the Chicago Cubs. This is one example where fans can also enjoy Kraft Mac and Cheese, Philadelphia, and Primal Kitchen throughout the ballpark. And more recently, we further increased our penetration of Philadelphia cream cheese in away from home with Dunkin'. In US away from home, we grew Philadelphia cream cheese high single digits in 2024.

Speaker Change: This included incremental distribution on Heinz ketchup mustard relish and more.

Speaker Change: We are now scaling this approach across this Ford brands with dedicated agile pods already in play to reach and importantly, we are committed to making the necessary investments in the products and marketing to close those gaps.

Carlos Abrams: I am also excited to share that we have signed a new contract with Hilton Hotels, making Kraft Heinz the preferred vendor for sauces and condiments globally. This presents a large opportunity for us, and we are excited for the doors it unlocks. partnering with Hilton to leverage their worldwide presence in over 130 countries to drive growth. We also continue to expand beyond ketchup. I just mentioned our partnership with the Chicago Cubs. This is one example where fans can also enjoy Kraft Mac and Cheese, Philadelphia, and Primal Kitchen throughout the ballpark. And more recently, we further increased our penetration of Philadelphia cream cheese in away from home with Dunkin.

Speaker Change: I am also excited to share that we have signed a new contract with Hilton hotels, making kraft Heinz that preferred vendor for sauces and condiments globally.

Speaker Change: This presents a large opportunity for us and we are excited for the doors. It unlocks partnering with Hilton to leverage the worldwide presence in over 130 countries to drive growth.

Speaker Change: In parallel to starting the brand grow system. The initial actions. We have taken are showing early signs of traction as we're investing in the products to drive superiority.

Speaker Change: We also continued to expand beyond ketchup I've just mentioned our partnership with the Chicago Cubs. This is one example, where fans can also enjoy kraft Mac and cheese, Philadelphia and primal kitchen throughout the ballpark.

Speaker Change: On Lunchables, we are strengthening the core and expanding the locations take for example, our recent launch of spicy Nacho, which is 17% incremental to the meal combos category driven by increases in both by rate and consumption. We also continued to renovate as part of our ongoing commitment to deliver except.

Speaker Change: More recently, we further increase our penetration that we have elfa cream cheese in away from home with Duncan.

Carlos Abrams: In U.S. away from home, we grew Philadelphia cream cheese high single digits in 2024. And we are focused on go-to-market action. leveraging our proven model to not only gain distribution in retail within emerging markets where we have solid coverage, but also expanding the model into away from home channel. In 2024, we grew total distribution points in emerging markets away from home by 21%. As you can see, our Away From Home team has been busy this year, and I'm happy to report that for 2025, we've already locked in 75% of the expected sales from new clients.

Speaker Change: In U S away from home, we grew Philadelphia cream cheese high single digits in 2024.

Speaker Change: Our quality, including upgrades to our cookies and crackers to meet evolving taste.

Carlos Abrams-Rivera: We are focused on go-to-market excellence, leveraging our proven model to not only gain distribution in retail within emerging markets, where we have solid coverage, but also expanding the model into away from home channel. In 2024, we grew total distribution points in emerging markets away from home by 21%. As you can see, our away from home team has been busy this year, and I'm happy to report that for 2025, we have already locked in 75% of the expected sales from new clients wins. Looking at emerging markets, we grew organic net sales both in Q4 and the full year. While this growth was lower than we originally anticipated due to pressures in Brazil, and China, the rest of emerging markets grew double digits, a testament that our strategy is working.

We are focused on go-to-market excellence, leveraging our proven model to not only gain distribution in retail within emerging markets, where we have solid coverage, but also expanding the model into away from home channel. In 2024, we grew total distribution points in emerging markets away from home by 21%. As you can see, our away from home team has been busy this year, and I'm happy to report that for 2025, we have already locked in 75% of the expected sales from new clients wins. Looking at emerging markets, we grew organic net sales both in Q4 and the full year. While this growth was lower than we originally anticipated due to pressures in Brazil, and China, the rest of emerging markets grew double digits, a testament that our strategy is working.

Speaker Change: And we are focused on go to market excellence, leveraging our proven model to not only gained distribution in retail we think emerging markets, where we have solid coverage, but also expanding the model to away from home channel.

Speaker Change: In EMEA business, we are strengthening our value proposition to reengage with lapsed users and to attract new ones, we are bringing new flavors, including <unk>, which has successfully rollout in the U S and we're taking this flavor expansion strategy globally, launching new flavors in countries, including Canada.

Speaker Change: In 2024, we grew total distribution points in emerging markets away from home by 21%.

Speaker Change: Corollary of the UK and the Middle East.

Speaker Change: As you can see our away from home team has been busy this year and I'm happy to report that for 2025, we have already locked in 75% of the expected sales from new client wins.

Speaker Change: In addition to our flavor strategy, we are delighting consumers with better for you options through our primal kitchen brand.

Speaker Change: For Kraft Mac and cheese, we are connecting and engaging with families and younger consumers. We are doing this through the new bold flavors like ranch and jalapeno better for you options, new pack sizes and low impact partnerships and we are seeing momentum here with a one percentage point improvement in the <unk>.

Speaker Change: Looking at emerging markets, we grew organic net sales both in the fourth quarter and the full year. While this growth was lower than we originally anticipated due to pressures in Brazil, and China. The rest of emerging markets grew double digits, a testament that our strategy is working.

Carlos Abrams: Looking at emerging markets, we grew organic net sales both in the fourth quarter and the full year. While this growth was lower than we originally anticipated due to pressures in Brazil and China, the rest of emerging markets grew double digits, a testament that our strategy is working. Our growth drivers in emerging markets are twofold, leveraging the strong brand equity of our Heinz brand and expanding distribution through our go-to-market model. We grew Heinz Organic Net sales in emerging markets approximately 8% in 2024. Heinz is our largest brand globally, and it represents over $1 billion in sales in emerging markets, accounting for roughly 40% of total sales in the zone.

Carlos Abrams-Rivera: Our growth drivers in emerging markets are twofold: leveraging the strong brand equity of our Heinz brand and expanding distribution through our go-to-market model. We grew Heinz organic net sales in emerging markets approximately 8% in 2024. Heinz is our largest brand globally, and it represents over $1 billion in sales in emerging markets, accounting for roughly 40% of total sales in the zone. We also continue to expand distribution through our go-to-market model. We increased total distribution points by 17% in 2024 and plan to further increase by an additional 40,000 points of distribution in 2025. This sets us up well for accelerated growth. As we look to 2025, marketing and innovation will be key enablers of our growth. Let's dive into both.

Our growth drivers in emerging markets are twofold: leveraging the strong brand equity of our Heinz brand and expanding distribution through our go-to-market model. We grew Heinz organic net sales in emerging markets approximately 8% in 2024. Heinz is our largest brand globally, and it represents over $1 billion in sales in emerging markets, accounting for roughly 40% of total sales in the zone. We also continue to expand distribution through our go-to-market model. We increased total distribution points by 17% in 2024 and plan to further increase by an additional 40,000 points of distribution in 2025. This sets us up well for accelerated growth. As we look to 2025, marketing and innovation will be key enablers of our growth. Let's dive into both.

Speaker Change: Year over year sales trends.

Speaker Change: And finally on Capri Sun.

Speaker Change: Our growth drivers in emerging markets are twofold, leveraging the strong brand equity of our Heinz brand and expanding distribution through our go to market model.

Speaker Change: Hi, I'm very excited that we have generated a five percentage point improvement in year over year sales, we invest during the broke innovation to win on taste and now we're bringing value to consumer through innovation, including a new 64 ounce multi serve and our single serve bottles.

Speaker Change: We grew highest organic net sales in emerging markets approximately 8% in 2024.

Speaker Change: <unk> is our largest brand globally and 80% of a $1 billion in sales in emerging markets accounting for roughly 40% of total sales in the zone.

Speaker Change: Our accelerate platforms represent the most attractive spaces within our portfolio, where we have the highest right to win and in turn we have been prioritizing our investments did.

Carlos Abrams: We also continue to expand distribution through our go-to-market model. We increased total distribution points by 17% in 2024 and plan to further increase by an addition of 40,000 points of distribution in 2025.

Speaker Change: We also continued to expand distribution through our go to market model, we increased total distribution points by 17% in 2024 and plan to further increase by an additional 40000 points of distribution in 2025.

Speaker Change: This prioritization has contributed to growth across several of our iconic brands, including Philadelphia, Heinz Ketchup arrived and Taco Bell.

Speaker Change: As I mentioned earlier Philadelphia is one of the brands, we piloted in our brand growth system in 2024.

Speaker Change: This sets us up well for accelerated growth.

Carlos Abrams: This sets us up well for accelerated growth. As we look to 2025, marketing innovation will be key enablers of our growth. Let's dive into both. First, on the marketing front, we continue to make meaningful advancements in talent, tools, and capabilities by building an ecosystem that fuels brand relevance and creative action. A key driver of this success is our in-house agency, The Kitchen, which we launched four years ago to unlock creativity and deliver breakthrough ideas at the speed of culture. Since its launch, the kitchen has garnered external recognition, earning numerous awards for the In-House Agency of the Year.

Speaker Change: As we look to 2025 marketing innovation will be key enablers of our growth, let's dive into both.

Speaker Change: Covered opportunities to attract under index audiences to expand distribution and wide space channel and to highlight the versatility of cream cheese across new usage occasions.

Carlos Abrams-Rivera: First, on the marketing front, we continue to make meaningful advancements in talent, tools, and capabilities by building an ecosystem that fuels brand relevance and creative excellence. A key driver of this success is our in-house agency, The Kitchen, which we launched four years ago to unlock creativity and deliver breakthrough ideas at the speed of culture. Since its launch, The Kitchen has garnered external recognition, earning numerous awards for the in-house agency of the year. I am thrilled to share that our marketing team has been pushing the boundaries of innovation and creativity in the partnership space. We're not just talking about any partnership. We are talking about game-changing, culture-shifting collaborations that are redefining the marketing landscape. For example, we finally got Mustard on the Beat with our electric flying collaboration with the award-winning producer Mustard, which dropped during the biggest night in music, the Grammys.

First, on the marketing front, we continue to make meaningful advancements in talent, tools, and capabilities by building an ecosystem that fuels brand relevance and creative excellence. A key driver of this success is our in-house agency, The Kitchen, which we launched four years ago to unlock creativity and deliver breakthrough ideas at the speed of culture. Since its launch, The Kitchen has garnered external recognition, earning numerous awards for the in-house agency of the year. I am thrilled to share that our marketing team has been pushing the boundaries of innovation and creativity in the partnership space. We're not just talking about any partnership. We are talking about game-changing, culture-shifting collaborations that are redefining the marketing landscape. For example, we finally got Mustard on the Beat with our electric flying collaboration with the award-winning producer Mustard, which dropped during the biggest night in music, the Grammys.

Speaker Change: First on the marketing front, we continue to make meaningful advancements in talent tools aimed capabilities by building an ecosystem that fueled brand relevance and creative excellence.

Speaker Change: Our initial learnings and actions are yielding results with 2% dollar gross sales despite lapping private label out of stocks in 2023.

Speaker Change: Key driver of this success is our in House agency the kitchen.

Speaker Change: And Heinz Ketchup grew dollar sales, 2% versus 2023.

Speaker Change: Which we launched four years ago to unlock creativity and deliver breakthrough ideas at the speed of culture.

Speaker Change: This was driven by impactful marketing campaigns and by increasing distribution from innovation.

Speaker Change: Since its launch the kitchen has gone into external recognition, earning numerous awards for the in House agency of the year.

Speaker Change: We have innovated across formats and flavors to deliver on consumer desires, including the successful launch of our pickle catch up which has been 50% incremental to the flavor catch up category and we have now expanded it to four continents.

Carlos Abrams: I am thrilled to share that our marketing team has been pushing the boundaries of innovation and creativity in the partnership space. We're not just talking about any partnership. We are talking about game-changing, culture-shifting collaborations that are redefined in the marketing landscape. For example, we finally got mustard on the beach with the Elevator Climbing collaboration with the award-winning producer Mustard, which dropped during the biggest night in music, the Grammys. And if that wasn't enough, we also brought our beloved brands to life in Instacart's first-ever Super Bowl campaign, featuring the iconic Heinz Wiener dogs, the Kool-Aid Man, and the Oscar Mayer Wiener Mobile.

Speaker Change: I am thrilled to share that our marketing team has been pushing the boundaries of innovation and creativity in the partnership space.

Speaker Change: We're not just talking about any partnership we are talking about game changing culture of shifting collaborations that are redefining the marketing landscape.

Speaker Change: On the either we have been able to meet the strong consumer demand for our products, which in turn enabled us to increase investments in marketing and promotions.

Speaker Change: For example, we finally got muster on the beat with the electronic filing in collaboration with the award winning producer Monster, which dropped during the biggest 90 music Grammys.

Speaker Change: This contributed to dollar sales growth of 8% in 2024.

Carlos Abrams-Rivera: And if that wasn't enough, we also brought our beloved brands to life in Instacart's first-ever Super Bowl campaign, featuring the iconic Heinz Wiener Dogs, the Kool-Aid Man, and the Oscar Mayer Wienermobile. It was a moment that will go down in marketing history. These partnerships aren't just about generating buzz. They're about creating unforgettable experiences that leave a lasting impact on our consumers. And I couldn't be prouder of our team for their dedication to truly creating marketing that excites. Our Brand Growth System is another critical component of our creative ecosystem, providing a systematic and repeatable framework that complements our disruptive marketing and innovation efforts to drive brand superiority. You have heard that about the early success we've had with Heinz Ketchup in the UK and Philadelphia Cream Cheese in the US. Now, with this pilot complete, we are ready to scale.

And if that wasn't enough, we also brought our beloved brands to life in Instacart's first-ever Super Bowl campaign, featuring the iconic Heinz Wiener Dogs, the Kool-Aid Man, and the Oscar Mayer Wienermobile. It was a moment that will go down in marketing history. These partnerships aren't just about generating buzz. They're about creating unforgettable experiences that leave a lasting impact on our consumers. And I couldn't be prouder of our team for their dedication to truly creating marketing that excites. Our Brand Growth System is another critical component of our creative ecosystem, providing a systematic and repeatable framework that complements our disruptive marketing and innovation efforts to drive brand superiority. You have heard that about the early success we've had with Heinz Ketchup in the UK and Philadelphia Cream Cheese in the US. Now, with this pilot complete, we are ready to scale.

Speaker Change: Lastly, Taco Bell had a great year growing 24% versus 2023.

Speaker Change: And if that wasn't enough. We also brought our global brands to Lliving into cars first ever Super Bowl campaign, featuring the iconic Heinz Wiener dogs, the Cooley men and the <unk> mobile.

Speaker Change: This was driven by expanded distribution and share gains on both existing products and innovation as.

Speaker Change: As we double down on the fast growing Mexican cuisine category growing at a pace of four 5%.

Carlos Abrams: It was a moment that will go down in marketing history. These partnerships aren't just about generating buzz. They're about creating unforgettable experiences that leave a lasting impact on our consumers. And I couldn't be prouder of our team for their dedication to truly creating marketing that excites.

Speaker Change: It was a moment that will go down in market history.

Speaker Change: These partnerships I'm, just about generating buzz, thereby creating AUM forgettable experiences that will leave a lasting impact on our consumers.

Speaker Change: And I couldnt be prouder of our team for their dedication to truly creating marketing that excites.

Speaker Change: Our brand growth system is another critical component of our creative ecosystem, providing a systematic and repeatable framework that complements our disruptive marketing and innovation efforts to drive brand superiority.

Carlos Abrams: Our brand growth system is another critical component of our creative ecosystem, providing a systematic and repeatable framework that complements our disruptive marketing and innovation efforts to drive brand superiority. You have heard about the early success we've had with Heinz Ketchup in the UK and Philadelphia cream cheese in the US. Now, with this pilot complete, we are ready to scale.

Speaker Change: In the U S. We gained 70 basis points of share and group sales mid single digits for the full year across higher margin noncommercial channels.

Speaker Change: This includes wincing entertainment and travel.

Speaker Change: You have heard that about the early success, we've had with Heinz ketchup in the UK and Philadelphia cream cheese in the U S. Now with this trial is complete we are ready to scale more on that as we get into kind of next week.

Speaker Change: Earlier this year, we announced a new multi year partnership with the Chicago Cubs were high has been named the official <unk> of Wrigley field.

Carlos Abrams-Rivera: More on that as we get into Candy next week. Turning to innovation, our strategy is working. We have significantly increased innovation as a percentage of our Organic Net Sales from 1.6% in 2022 to 2.9% in 2024. We are focused on creating and providing consumers with products that are worth paying for, whether that be through our cuisine and flavor exploration, high-quality convenience solutions, or expanding options and functionality through unique benefits. As part of our Mexican food strategy, we have expanded our Taco Bell partnership, providing our consumers with restaurant-quality experiences at home. In 2024, this led to dollar sales growth of 24%, and we increased market share by nearly a point. As consumers are looking for bolder, more exciting flavors, we are leveraging a flavor-focused expansion strategy in mac and cheese.

More on that as we get into Candy next week. Turning to innovation, our strategy is working. We have significantly increased innovation as a percentage of our Organic Net Sales from 1.6% in 2022 to 2.9% in 2024. We are focused on creating and providing consumers with products that are worth paying for, whether that be through our cuisine and flavor exploration, high-quality convenience solutions, or expanding options and functionality through unique benefits. As part of our Mexican food strategy, we have expanded our Taco Bell partnership, providing our consumers with restaurant-quality experiences at home. In 2024, this led to dollar sales growth of 24%, and we increased market share by nearly a point. As consumers are looking for bolder, more exciting flavors, we are leveraging a flavor-focused expansion strategy in mac and cheese.

Carlos Abrams: More on that as we get into Candy next week. Turning to innovation. Our strategy is working. We have significantly increased innovation as a percentage of our organic net sales from 1.6% in 2022 to 2.9% in 2024. We are focused on creating and providing consumers with products that are worth paying for, whether that be through our cuisine and flavor exploration, high quality, convenient solutions, or expanding options and functionality through unique benefits. As part of our Mexican food strategy, we have expanded our Taco Bell partnership, providing our consumers with restaurant-quality experiences at home. In 2024, this led to dollar sales growth of 24%, and we increased market share by nearly a point.

Speaker Change: This included incremental distribution on Heinz ketchup mustard relic and more.

Speaker Change: Turning to innovation our strategy is working.

Speaker Change: I am also excited to share that we have signed a new contract with Hilton hotels, making kraft Heinz that preferred vendor for sauces and condiments globally.

Speaker Change: We have significantly increased innovation as a percent of our organic net sales from one 6% in 2022 to two 9% in 2024, we are focused on creating and providing consumers with <unk> that are worth paying for whether that be through our cucina flavor exploration high quality convenient solutions.

Speaker Change: We're expanding options and functionality through unique benefits.

Speaker Change: As part of our Mexican put strategy, we have expanded our Taco Bell partnership providing our consumers with restaurant quality experiences at home.

Speaker Change: More recently, we further increase our penetration of Philadelphia cream cheese in away from home with Duncan.

Speaker Change: In 2024, this led to door sales growth of 24% and we increased market share by nearly a point.

Speaker Change: In U S away from home, we grew Philadelphia cream cheese high single digits in 2024.

Speaker Change: Our consumers are looking for Boulder more exciting flavors, we are leveraging our flavor focused expansion strategies Mac and cheese base.

Carlos Abrams: As consumers are looking for bolder, more exciting flavors, we are leveraging a flavor-focused expansion strategy in mac and cheese. Based on market and social media trends, we are creating buzzworthy moments by launching limited-time offerings to drive excitement and deliver unexpected new flavors to market in record time. This includes our most recent everything bagel Kraft Mac and Cheese lunch, which is sold out in just one day online at one of our largest retails. After 150 years leveraging our extensive agricultural heritage and tomato expertise, we launched the first Heinz plastic cells in the UK a couple years ago.

Carlos Abrams-Rivera: Based on market and social media trends, we are creating buzzworthy moments by launching limited-time offerings to drive excitement and deliver unexpected new flavors to market in record time. This includes our most recent everything bagel Kraft Mac & Cheese launch, which sold out in just one day online at one of our largest retailers. After 150 years, leveraging our extensive agricultural heritage and tomato expertise, we launched the first Heinz Pasta Sauce in the UK a couple of years ago. Now, we continue to introduce new recipes, disrupting and driving excitement in the pasta sauce category, making superior quality ingredients and delayed food trends accessible to all pasta lovers. It's working with dollar sales growth of 45% in 2024.

Based on market and social media trends, we are creating buzzworthy moments by launching limited-time offerings to drive excitement and deliver unexpected new flavors to market in record time. This includes our most recent everything bagel Kraft Mac & Cheese launch, which sold out in just one day online at one of our largest retailers. After 150 years, leveraging our extensive agricultural heritage and tomato expertise, we launched the first Heinz Pasta Sauce in the UK a couple of years ago. Now, we continue to introduce new recipes, disrupting and driving excitement in the pasta sauce category, making superior quality ingredients and delayed food trends accessible to all pasta lovers. It's working with dollar sales growth of 45% in 2024.

Speaker Change: Based on market and social media trends, we are creating buzzworthy moment by Lunching limited time offerings to drive excitement and delivered unexpected new flavors to market in record time.

Speaker Change: In 2024, we grew total distribution pointing emerging markets away from home by 21%.

Speaker Change: This includes our most recent everything bagel, Kraft Mac and cheese launch with its sold out in just one day online at one of our largest retailers.

Speaker Change: As you can see our away from home team has been busy this year and I'm happy to report that for 2025, we have already locked in 75% of the expected sales from new client wins.

Speaker Change: After 150 years, leveraging our extensive agricultural heritage and tomato expertise, we launched the first highest master sells in the U K a couple of years ago.

Speaker Change: Looking at emerging markets, we grew organic net sales both in the fourth quarter and the full year.

Carlos Abrams: Now, we continue to introduce new recipes, disrupting and driving excitement in the pasta sauce category, making superior quality ingredients and the latest food trends accessible to all pasta lovers. And it's working, with dollar sales growth of 45% in 2024. And by leveraging a global Heinz team that was established last year, we are quickly scaling what works, expanding Heinz pasta sauce into other countries, including Brazil, Chile, and across Europe. And we are delivering deliciousness and convenience through a 360 crisp platform, pushing the boundaries of what frozen food can deliver. This patent technology provides convenience and quality, creating crispy products like those on the stove in a matter of minutes in the microwave.

Speaker Change: Now, we continue to introduce new recipes, disrupting and driving excitement in the pasta sauce category.

Speaker Change: While this growth was lower than we originally anticipated due to pressures in Brazil, and China. The rest of emerging markets grew double digits, a testament that our strategy is working.

Making superior quality ingredients and the latest food trends accessible to all pasta lovers.

Carlos Abrams-Rivera: By leveraging a global Heinz team that was established last year, we are quickly scaling what works, expanding Heinz pasta sauce into other countries, including Brazil, Chile, and across Europe. We are delivering deliciousness and convenience through a 360CRISP platform, pushing the boundaries of what frozen food can deliver. This patent technology provides convenience and quality, creating crispy products like those on the stove in a matter of minutes in the microwave. Deli Mex Quesadillas marked our first launch on the brand in over five years, and they are now available in over 20,000 stores as we continue to expand distribution. We entered 2025 with strong momentum on the innovation front, and we will continue to double down on innovation that worked well in 2024. In fact, over 75% of innovation sales in 2025 are expected to come from proven innovation already launched.

By leveraging a global Heinz team that was established last year, we are quickly scaling what works, expanding Heinz pasta sauce into other countries, including Brazil, Chile, and across Europe. We are delivering deliciousness and convenience through a 360CRISP platform, pushing the boundaries of what frozen food can deliver. This patent technology provides convenience and quality, creating crispy products like those on the stove in a matter of minutes in the microwave. Deli Mex Quesadillas marked our first launch on the brand in over five years, and they are now available in over 20,000 stores as we continue to expand distribution. We entered 2025 with strong momentum on the innovation front, and we will continue to double down on innovation that worked well in 2024. In fact, over 75% of innovation sales in 2025 are expected to come from proven innovation already launched.

Speaker Change: Working with dollar sales growth of 45% in 2024 and.

Speaker Change: Our growth drivers in emerging markets are twofold, leveraging the strong brand equity of our high end brands and expanding distribution through our go to market model.

Speaker Change: And by leveraging our global Heinz team that was established last year, we have quickly scaling well works expanding highest fastest starting to other countries, including Brazil, Chile and across Europe.

Speaker Change: We grew highest organic net sales in emerging markets approximately 8% in 2020 for Heinz is our largest brand globally and it represents over $1 billion in sales in emerging markets accounting for roughly 40% of total sales in the zone.

Speaker Change: And we are delivering deliciousness and convenience through a 360 <unk> platform pushing the boundaries of west processed fruit can deliver.

Speaker Change: This patent technology provides convenience and quality, creating crispy product like dose on the stove in a matter of minutes in the microwave.

Speaker Change: We also continued to expand distribution through our go to market model, we increased total distribution points by 17% in 2024.

Carlos Abrams: Deli-Mex Quesadillas marked our first launch on the brand in over five years, and they are now available in over 20,000 stores as we continue to expand distribution. We entered 2025 with strong momentum on the innovation front, and we will continue to double down innovation that worked well in 2024. In fact, over 75% of innovation sales in 2025 are expected to come from proven innovation already launched.

Speaker Change: Daily Mexican <unk> marked our first launch on the brand in over five years and they are now available in over 20000 stores and we continue to expand distribution.

Speaker Change: We plan to further increase by an additional 40000 points of distribution in 2025.

Speaker Change: We entered 2025 with strong momentum on the innovation front and we will continue to double down innovation that worked well in 2024 in fact over 75% of innovation sales in 2025 are expected to come from proven innovation already launch.

Speaker Change: This sets us up well for accelerated growth.

Speaker Change: As we look to 2025 marketing innovation will be key enablers of our growth, let's dive into both.

Carlos Abrams-Rivera: Plus, we have an exciting array of launches ready for 2025, focused on our core brand. With that, let me hand it over to Andre to provide more details on our fourth quarter financial results and to discuss our 2025 outlook. Thank you, Carlos. In the fourth quarter, organic net sales declined 3.1% for total Kraft Heinz, with price up 1 percentage point and volume mix down 4.1 percentage points. In North America, organic net sales declined 3.6%, with growth in our Canada business offset by lower sales in both US retail and away from home. In our international developed markets, organic net sales declined 4%. This was driven by volume pressures due to customer negotiations in Europe and declines in non-core categories. In emerging markets, organic net sales was up 2.2%.

Plus, we have an exciting array of launches ready for 2025, focused on our core brand. With that, let me hand it over to Andre to provide more details on our fourth quarter financial results and to discuss our 2025 outlook.

Speaker Change: First on the marketing front, we continue to make meaningful advancements in talent tools aimed capabilities by building an ecosystem, the fuel's brand relevance and creative excellence.

Carlos Abrams: Plus, we have an exciting array of launches ready for 2025 focused on our core brands.

Speaker Change: We have an exciting array of lunches ready for 'twenty to 'twenty five focus on our core brand.

Speaker Change: With that let me hand, it over to Andre to provide more details on our fourth quarter financial results and to discuss our 2025 outlook.

Andre Maciel: With that, let me hand it over to Andre to provide more details on our fourth quarter financial results and to discuss our 2025 outlook. Thank you, Carlos. In the fourth quarter, organic net sales declined 3.1% for total Kraft Heinz with price up one percentage point and volume mix down 4.1 percentage points. In North America, organic net sales declined 3.6%, with growth in our Canada business offset by lower sales in both U.S. retail and away from home.

Speaker Change: A key driver of this success is our in House agency, the kitchen, which we launched four years ago to unlock creativity and deliver breakthrough ideas at the speed of culture.

Andrew Maciel: Thank you, Carlos. In the fourth quarter, organic net sales declined 3.1% for total Kraft Heinz, with price up 1 percentage point and volume mix down 4.1 percentage points. In North America, organic net sales declined 3.6%, with growth in our Canada business offset by lower sales in both US retail and away from home. In our international developed markets, organic net sales declined 4%. This was driven by volume pressures due to customer negotiations in Europe and declines in non-core categories. In emerging markets, organic net sales was up 2.2%.

Andre: Thank you Carlos.

Speaker Change: Since its launch the kitchen has gone to external recognition, earning numerous awards for the in House agency of the year.

Andre: In the fourth quarter organic net sales declined three 1% for total Kraft Heinz with price up one percentage point and volume mix down four one percentage points.

Speaker Change: I am thrilled to share that our marketing team has been pushing the boundaries of innovation and creativity in the partnership space.

Andre: In North America organic net sales declined three 6% with growth in our Canada business offset by lower sales in both U S retail and away from home.

Speaker Change: We're not just talking about any partnership we are talking about game changing culture of shifting collaborations that are redefining the marketing landscape for.

Speaker Change: For example, we finally got muster on the beat with our electronic filing in collaboration with the award winning producer mustard, which dropped during the biggest 90 music Grammys and if that wasn't enough. We also brought our beloved brands to lliving into cars first ever Super Bowl campaign, featuring the iconic Heinz Wiener dogs the cooler.

Andre: In our international developed markets organic net sales declined 5%.

Andre Maciel: In our international developed markets, organic net sales decline far. This was driven by volume pressures due to customer negotiations in Europe and declines in non-core categories. In emerging markets, organic net sales was up 2.2%. Results were impacted by Brazil, driven primarily by volume elasticity linked to price taken in commodity categories, and China, where we continue to experience industry support.

Andre: This was driven by volume pressures due to customer negotiations in Europe and declines in non core categories.

Andre: And emerging markets organic net sales was up two 2%.

Carlos Abrams-Rivera: Results were impacted by Brazil, driven primarily by volume elasticity linked to price taking in commodity categories, and China, where we continue to experience industry softness. The rest of emerging markets grew the top line double digits in the fourth quarter, with particularly strong growth in the Middle East and Turkey. Turning to the next slide, total Kraft Heinz adjusted operating income declined 0.3%, driven by declines in each of our zones, primarily due to lower sales. Our adjusted operating income margin increased 80 basis points, a result of lower variable compensation and unlocked efficiencies. Lower variable compensation was a benefit to adjusted operating income across each of our zones. In North America, adjusted operating income declined 2.3% versus the prior year, with declining sales more than offsetting productivity gains.

Results were impacted by Brazil, driven primarily by volume elasticity linked to price taking in commodity categories, and China, where we continue to experience industry softness. The rest of emerging markets grew the top line double digits in the fourth quarter, with particularly strong growth in the Middle East and Turkey. Turning to the next slide, total Kraft Heinz adjusted operating income declined 0.3%, driven by declines in each of our zones, primarily due to lower sales. Our adjusted operating income margin increased 80 basis points, a result of lower variable compensation and unlocked efficiencies. Lower variable compensation was a benefit to adjusted operating income across each of our zones. In North America, adjusted operating income declined 2.3% versus the prior year, with declining sales more than offsetting productivity gains.

Speaker Change: <unk> and the <unk> mobile it was a moment that will go down in market history.

Andre: Results were impacted by Brazil, driven primarily by volume elasticity of linkage coal price taken in commodity categories, and China, where we continue to experience industry softness.

Speaker Change: This partnerships I'm, just about generating buzz, thereby creating one forgettable experiences that will leave a lasting impact on our consumers.

Andre Maciel: The rest of emerging markets brewed the top line double digits in the fourth quarter, with particularly strong growth in the Middle East and Turkey.

Andre: The rest of the emerging markets grew the top line double digits in the fourth quarter with particularly strong growth in the middle East and Turkey.

Speaker Change: And I couldnt be prouder of our team for their dedication to truly creating marketing that excites.

Andre: Turning to the next slide total Kraft Heinz adjusted operating income declined <unk> three.

Andre Maciel: Turning to the next slide, total Kraft Heinz adjusted operating income declined 0.3%. driven by declines in each of our zones, primarily due to lower sales. Our adjusted operating income margin increased 80 basis points. a result of lower variable compensation and unlocked... Lower variable compensation was a benefit to adjusted operating income across each of our zones. In North America, adjusted operating income declined 2.3% versus the prior year. with declining sales, more than offsetting. International Development Markets, Adjusted Operating Income 3.8 primarily driven by the declining sales and incremental inflation partially offset by operational efficiency. In emerging markets, while adjusted operating income declined 0.8%, on a constant currency basis we grew 3.5%.

Andre: <unk>, 3%.

Andre: Driven by declines in each of our zones, primarily due to lower sales.

Speaker Change: <unk> heard that about the early success, we've had with Heinz ketchup in the UK and Philadelphia cream cheese in the U S. Now with this pilot complete we are ready to scale more on that as we get into kind of next week.

Andre: Our adjusted operating income margin increased 80 basis points.

Andre: Results of lower variable compensation and unlocked efficiencies.

Andre: Lower variable compensation was a benefit to adjusted operating income across each of our results.

Speaker Change: Turning to innovation, our strategy is working well.

Andre: In North America, adjusted operating income declined two 3% versus the prior year, we have declining sales more than offsetting further <unk>.

Speaker Change: We have significantly increased innovation as a percent of our organic net sales from one 6% in 2022 to two 9% in 2024.

Carlos Abrams-Rivera: In international developed markets, adjusted operating income decreased 3.8%, primarily driven by the declining sales and incremental inflation, partially offset by operational efficiencies. In emerging markets, while adjusted operating income declined 0.8% on a constant currency basis, we grew 3.5%, and adjusted operating income margin expanded by 70 basis points. This growth and margin expansion was driven by lapping elevated investments in go-to-market, primarily in Latin. As we think about improving overall competitiveness in the market, we are leveraging a combination of strategies. We are focused on growing our base volumes in a sustainable way. This includes through consumer-driven innovation, portfolio renovation, marketing that matters, as well as selectively investing in price. In the fourth quarter, our percent of volume sold on promotion was down 2% versus the prior year. This was primarily driven by lapping dynamics.

In international developed markets, adjusted operating income decreased 3.8%, primarily driven by the declining sales and incremental inflation, partially offset by operational efficiencies. In emerging markets, while adjusted operating income declined 0.8% on a constant currency basis, we grew 3.5%, and adjusted operating income margin expanded by 70 basis points. This growth and margin expansion was driven by lapping elevated investments in go-to-market, primarily in Latin. As we think about improving overall competitiveness in the market, we are leveraging a combination of strategies. We are focused on growing our base volumes in a sustainable way. This includes through consumer-driven innovation, portfolio renovation, marketing that matters, as well as selectively investing in price. In the fourth quarter, our percent of volume sold on promotion was down 2% versus the prior year. This was primarily driven by lapping dynamics.

We are focused on creating and providing consumers with brothers that are worth paying for whether that be through our cucina flavor exploration high quality convenient solutions or expanding options and functionality through unique benefits.

Andre: In international developed markets adjusted operating income decreased three 8%.

Andre: Primarily driven by the declining sales and incremental inflation, partially offset by operational efficiencies.

As part of our Mexican food strategy, we have expanded our Taco Bell partnership, providing our consumers with restaurant quality experience to their home.

Andre: In emerging markets, while adjusted operating income declined 0.8% on a constant currency basis, we grew three 5% and adjusted operating income margin expanded by 70 basis points.

Speaker Change: In 2024, this led to door sales growth of 24% and we increased market share by nearly a point.

Andre Maciel: an adjusted operating income margin expanded by 70 basis points. This growth and margin expansion was driven by lapping elevated investments in go-to-market, primarily in Latam.

Andre: These growth and margin expansion was driven by lapping elevated investments in go to market primarily in Latam.

Speaker Change: Our consumers are looking for Boulder more exciting flavors, we are leveraging our flavor focus expansion strategy and Mac and cheese.

Speaker Change: Based on market and social media trends, we are creating buzzworthy moment by launching limited time offerings to drive excitement and delivered unexpected new flavors to market in record time.

Andre: As we think about improving overall competitiveness in the market, we are leveraging a combination of strategies.

Andre Maciel: As we think about improving overall competitiveness in the market, we are leveraging a combination of strategies. We are focused on growing our base volumes in a sustainable way. This includes through consumer-driven innovation, portfolio renovation, marketing that matters, as well as selectively investing. In the fourth quarter, our percent of volume sold on promotion was down 2% versus the prior year. This was primarily driven by a lapping dynamic.

Andre: We are focused on growing our base volumes in a sustainable way.

Speaker Change: This includes our most recent everything bagel, Kraft Mac and cheese launch, which sold out in just one day online at one of our largest retailers.

Andre: Using fluids through consumer driven innovation portfolio renovation marketing that matters as well as selectively investing in price.

Speaker Change: After 150 years, leveraging our extensive agricultural heritage and tomato expertise, we launched the first <unk> in the U K a couple of years ago.

Andre: In the fourth quarter our percent of volumes sold on promotion was down 2% versus the prior year.

Speaker Change: Now, we continue to introduce new recipes, disrupting and driving excitement in the pasta sauce category.

Carlos Abrams-Rivera: In Q4 2023, we were investing more in promotions on Ore-Ida as we were coming back from service issues, and in Philadelphia, we are lapping private label out of stocks. As we continue to balance long-term profitability, our volume sold on promotion was 5% below levels that of 2019. Looking to 2025, we are planning an increased level of investment in price. Remaining mindful of the consumer situation, we plan to make investments to adjust price gaps in selected categories, primarily across the four key brands Carlos discussed, and in our US away-from-home. While we'll be investing more, we are also taking actions to ensure we generate positive returns. We have additional opportunities identified for 2025 to remove non-effective events that were not driving top or bottom line in 2024.

In Q4 2023, we were investing more in promotions on Ore-Ida as we were coming back from service issues, and in Philadelphia, we are lapping private label out of stocks. As we continue to balance long-term profitability, our volume sold on promotion was 5% below levels that of 2019. Looking to 2025, we are planning an increased level of investment in price. Remaining mindful of the consumer situation, we plan to make investments to adjust price gaps in selected categories, primarily across the four key brands Carlos discussed, and in our US away-from-home. While we'll be investing more, we are also taking actions to ensure we generate positive returns. We have additional opportunities identified for 2025 to remove non-effective events that were not driving top or bottom line in 2024.

Andre: This was primarily driven by lapping dynamics.

Andre: In the fourth quarter of 2023.

Andre Maciel: For more information, please visit www.FEMA.gov. As we continue to balance long-term profitability, our volume sold on promotion was 5% below levels that of 2019.

Speaker Change: <unk> superior quality ingredients and the latest food trends accessible to all pasta lovers and he's working with dollar sales growth of 45% in 2024 and.

Andre: We're investing more in promotions on a rider as we were coming back from service issues in Philadelphia, We are lapping private label out of stocks.

Speaker Change: And by leveraging our global highest team that was established last year. We are quickly scaling well works expanding highest passed the sourcing to other countries, including Brazil, Chile and across Europe.

Andre: As we continue to balance long term profitability, our volume sold on promotion was 5% below levels that of 2019.

Andre: Look into 2025, we are planning an increased level of investment in price.

Andre Maciel: Look into 2035. We are planning an increased level of investment in price. remaining mindful of the consumer situation, we plan to make investments to adjust price gaps in selected categories. primarily across the four key brands Carlos discussed, heading now US away from home. While we will be investing more, we are also taking actions to ensure we generate positive returns. we have additional opportunities identified for 2025 to remove non-effective events that were not driving top or bottom line in 2024. And we know that promotions without product improvement and marketing will not get us to where we need to be.

Speaker Change: And we are delivering deliciousness and convenience through a 360, Chris platform pushing the boundaries of what processed food can deliver.

Andre: <unk> mindful of the consumer situation, we plan to make investments to adjust price gaps in selected categories.

Speaker Change: This patent technology provides convenience and quality, creating christy products like those on the stove in a matter of minutes in the microwave.

Carlos: Primarily across the four key brands Carlos discussed, adding U S away from home.

Speaker Change: Daily Mexican <unk> marked our first launch on the brand in over five years and they are now available in over 20000 stores and we continued to expand distribution.

Carlos: Why are we will be investing more we have also taken actions to ensure we generate positive returns.

Carlos: We have additional opportunities identified for 2035 to remove no effects of events that we're not driving top and bottom line in 2034.

Speaker Change: We entered 2025 with strong momentum on the innovation front and we will continue to double down on innovation that worked well in 2024 in fact over 75% of innovation sales in 2025 are expected to come from proving innovation already launch plus we have an exciting array of <unk>.

Carlos Abrams-Rivera: We know that promotions without product improvement and marketing will not get us to where we need to be. Moving down the P&L, we continue to generate margin expansion through end-to-end efficiencies. This helps us to not only offset inflation, but it also enables us to invest in the business to support long-term growth. In 2024, we generated nearly 4.5% of gross efficiencies as a percentage of cost of goods sold. This exceeds the target we had for the year, and we are well on our way to achieving our goal of $2.5 billion in efficiencies by 2027. With $1.3 billion unlocked to date, we have significant runway ahead to capture at least $1.2 billion more.

We know that promotions without product improvement and marketing will not get us to where we need to be. Moving down the P&L, we continue to generate margin expansion through end-to-end efficiencies. This helps us to not only offset inflation, but it also enables us to invest in the business to support long-term growth. In 2024, we generated nearly 4.5% of gross efficiencies as a percentage of cost of goods sold. This exceeds the target we had for the year, and we are well on our way to achieving our goal of $2.5 billion in efficiencies by 2027. With $1.3 billion unlocked to date, we have significant runway ahead to capture at least $1.2 billion more.

Carlos: And we know that promotions without product improvements and marketing, we will not get us to where we need to be.

Carlos: Moving down the P&L, we continue to generate margin expansion through end to end efficiencies.

Andre Maciel: Moving down the P&L, we continue to generate margin expansion through end-to-end help us to not only offset inflation, but it also enables us to invest in the business to support long-term growth.

Speaker Change: <unk> ready for 2025 focus on our core brands.

Carlos: These help us to not only offset inflation, but it also enables us to invest in the business to support long term growth.

Speaker Change: With that let me hand, it over to Andre to provide more details on our fourth quarter financial results and to discuss our 2025 outlook.

Carlos: In 2024.

Andre Maciel: 2034. We generated nearly 4.5% of gross efficiencies as a percentage of cost of goods sold. This exceeds the target we had for the year, and we are well on our way to achieving our goal of $2.5 billion in efficiencies by 2027. With $1.3 billion dollars on lock to date, we have a significant runway ahead to capture at least $1.2 billion dollars more. Through Agile at Scale, we have plans for further advancements, including but not limited to automation and network optimization in our supply chain, sourcing excellence within procurement, and maintaining a disciplined execution and continuous improvement mindset.

Speaker Change: Thank you Carlos.

Carlos: We generated nearly four 5% of gross efficiencies as a percentage of cost of goods sold.

Speaker Change: In the fourth quarter organic net sales declined three 1% for total Kraft Heinz with price up one percentage point and volume mix down four one percentage points.

Carlos: This exceeded the targets we had for the year and we are well on our way to achieving our goal of $2 $5 billion in efficiencies by 2027.

Speaker Change: In North America organic net sales declined three 6% with growth in our Canada business offset by lower sales in both U S retail and away from home.

Carlos: With $1 $3 billion unlocked to date, we have significant runway ahead to capture at least $1 $2 billion Mark.

Carlos Abrams-Rivera: Through Agile at Scale, we have plans for further advancements, including but not limited to automation and network optimization in our supply chain, sourcing excellence within procurement, and maintaining a disciplined execution and continuous improvement mindset. These efficiencies helped generate 100 basis points of Adjusted Gross Profit Margin expansion in 2024 and provided us with the flexibility to increase investments. We exited 2024 with marketing as a percent of net sales at 4.5% and R&D as a percent of net sales at 0.6%. On the marketing front, we are approaching optimal levels and are shifting more focus in 2025 on unlocking additional value from our marketing spend through data-driven improvements to ROIs. We have plans in place that will optimize marketing mix across brands and media types to ensure our dollars are working hard for our brands.

Through Agile at Scale, we have plans for further advancements, including but not limited to automation and network optimization in our supply chain, sourcing excellence within procurement, and maintaining a disciplined execution and continuous improvement mindset. These efficiencies helped generate 100 basis points of Adjusted Gross Profit Margin expansion in 2024 and provided us with the flexibility to increase investments. We exited 2024 with marketing as a percent of net sales at 4.5% and R&D as a percent of net sales at 0.6%. On the marketing front, we are approaching optimal levels and are shifting more focus in 2025 on unlocking additional value from our marketing spend through data-driven improvements to ROIs. We have plans in place that will optimize marketing mix across brands and media types to ensure our dollars are working hard for our brands.

Speaker Change: In our international developed markets organic net sales declined 5%.

Carlos: Throughout China at scale.

Carlos: Plans for further advancements, including but not limited to automation and network optimization in our supply chain sourcing excellence within procurement and maintaining a disciplined execution and continuous improvement mindset.

Speaker Change: This was driven by volume pressures due to customer negotiations in Europe and declines in non core categories.

Speaker Change: And emerging markets organic net sales was up two 2%.

Carlos: These efficiencies helped generate hundreds basis points of adjusted gross profit margin expansion in 2024 and.

Andre Maciel: These efficiencies helped generate 100 basis points of a just-across-profit margin expansion in 2024 and provided us with the flexibility to increase investment. We exit the 2024 with marketing as a percent of net sales at 4.5%, and R&D as a percent of net sales at 0.6%. On the marketing front, we are approaching optimal levels and are shifting more focus in 2025 on unlocking additional value from our marketing spend through data-driven improvements to ROI. We have plans in place that will optimize marketing mix across brands and media types to ensure our dollars are working hard for our brand.

Results were impacted by Brazil, driven primarily by volume of less do you still think that your price taken in commodity categories, and China, where we continue to experience industry softness.

Carlos: And provided us with the flexibility to increase investments.

The rest of our emerging markets grew the top line double digits in the fourth quarter with particularly strong growth in the middle East and Turkey.

Carlos: We exited 2020, Florida with marketing as a percent of net sales at four 5% and R&D as a percent of net sales at 0.6%.

Speaker Change: Turning to the next slide total Kraft Heinz adjusted operating income declined <unk> three.

Carlos: On the marketing front, we are approaching optimal levels and are shifting more focus in 2035 on unlocking additional value from our marketing spend.

Speaker Change: <unk>, 3%.

Speaker Change: Driven by declines in each of our zones, primarily due to lower sales.

Speaker Change: Our adjusted operating income margin increased 80 basis points.

Carlos: Data driven improvements to rois.

Carlos: We have plans in place that will optimize marketing mix across brands and media types to ensure our dollars are working hard for our plants.

Speaker Change: Results of lower variable compensation and unlocked efficiencies.

Speaker Change: Lower variable compensation was a benefit to adjusted operating income across each of our results.

Carlos Abrams-Rivera: On R&D, we expect to further increase our investments to support future innovation and are targeting levels closer to 1% of net sales. Turning to cash flow, we generated full-year Free Cash Flow conversion of 85%, a 4 percentage point increase versus the prior year. This was primarily driven by the conversion of certain surplus plan assets related to the US post-retirement medical plan to cash, as well as improved working capital. At the same time, we continue to increase investments for growth, with full-year CapEx increasing to 4% of net sales, up 100 basis points from the prior year. In terms of Adjusted EPS, we grew 7.7%, or $0.06, versus the fourth quarter of 2023. This was driven by positive impacts from a lower effective tax rate and share repurchases.

On R&D, we expect to further increase our investments to support future innovation and are targeting levels closer to 1% of net sales. Turning to cash flow, we generated full-year Free Cash Flow conversion of 85%, a 4 percentage point increase versus the prior year. This was primarily driven by the conversion of certain surplus plan assets related to the US post-retirement medical plan to cash, as well as improved working capital. At the same time, we continue to increase investments for growth, with full-year CapEx increasing to 4% of net sales, up 100 basis points from the prior year. In terms of Adjusted EPS, we grew 7.7%, or $0.06, versus the fourth quarter of 2023. This was driven by positive impacts from a lower effective tax rate and share repurchases.

Carlos: On R&D, we expect to further increase our investments to support future innovation and are targeting levels closer to 1% of net sales.

Andre Maciel: On R&D, we expect to further increase our investments to support future innovation and our targeting levels closer to 1% of net sales.

Speaker Change: In North America, adjusted operating income declined two 3% versus the prior year, we have declining sales more than offsetting further <unk>.

Carlos: Turning to cash flow.

Andre Maciel: third intro Kash We generated 4-year free cash flow conversion of 85%, a 4% point increase versus the prior year. This was primarily driven by the conversion of certain surplus plan assets related to the US post-retirement medical plan to cash, as well as improved working capital. At the same time, we continue to increase investments for growth. with full year capex increasing to 4% of net sales up to any basis points from the prior. In terms of adjusted EPS, we grew 7.7%, or $0.06, versus the fourth quarter of 2020. These were driven by positive impacts from a lower effective tax rate and share repurchase.

Speaker Change: In international developed markets adjusted operating income decreased three 8%.

Carlos: Generated full year free cash flow conversion of 85%, a four percentage point increase versus the prior year.

Speaker Change: Primarily driven by the declining sales and incremental inflation, partially offset by operational efficiencies.

Carlos: This was primarily driven by the conversion of certain surplus assets relate that should the U S post retirement medical plan to cash as well as improved working capital.

Speaker Change: In emerging markets, while adjusted operating income declined 0.8% on a constant currency basis, we grew three 5% and adjusted operating income margin expanded by 70 basis points.

Carlos: At the same time, we continue to increase the vast months for growth.

Carlos: Full year Capex increased two 4% of net sales up 20 basis points from the prior year.

Speaker Change: These growth and margin expansion was driven by lapping elevated investments in go to market primarily in Latam.

Carlos: In terms of adjusted EPS, we grew seven 7% or six vessels.

Carlos: Versus the fourth quarter of 2023.

Speaker Change: As we think about improving overall competitiveness in the market, we are leveraging a combination of strategies.

Carlos: This was driven by positive impact from a lower effective tax rate and share repurchases.

Carlos Abrams-Rivera: Keep in mind, our adjusted EPS does exclude an impairment charge of $1.4 billion that was recognized in the quarter, which was more than offset by a $2.4 billion tax benefit. This tax benefit is related to the transfer of certain business operations that was completed in Q4 2024. The transfer was part of our planning for the changes in the international tax environment and also allowed us to achieve greater operational synergies. In accordance with GAAP, the P&L benefit from the transfer of certain business operations had to be recorded in Q4 2024 when the transfer was completed. On a cash tax basis, however, the benefit is recognized annually starting 2025 and going forward for the next 20 years. As a result, we expect a 500 basis points step-up in our P&L tax rate starting 2025.

Keep in mind, our adjusted EPS does exclude an impairment charge of $1.4 billion that was recognized in the quarter, which was more than offset by a $2.4 billion tax benefit. This tax benefit is related to the transfer of certain business operations that was completed in Q4 2024. The transfer was part of our planning for the changes in the international tax environment and also allowed us to achieve greater operational synergies. In accordance with GAAP, the P&L benefit from the transfer of certain business operations had to be recorded in Q4 2024 when the transfer was completed. On a cash tax basis, however, the benefit is recognized annually starting 2025 and going forward for the next 20 years. As a result, we expect a 500 basis points step-up in our P&L tax rate starting 2025.

Speaker Change: We are focused on growing our base volumes in a sustainable way.

Carlos: Keeping in mind, our adjusted EPS does exclude an impairment charge of $1 $4 billion that was recognized in the quarter, which was more than offset by a $2 4 billion dollar tax benefits.

Andre Maciel: Keep in mind, our adjusted EPS does exclude an impairment charge of $1.4 billion that was recognized in the quarter, which was more than offset by a $2.4 billion tax benefit. This tax benefit is related to the transfer of certain business operations that was completed in the fourth quarter of 2024. The transfer was part of our planning for the changes in the international tax environment and also allowed us to achieve greater operational synergy. in accordance with GAP. The P&L benefit from the transfer of certain business operations had to be recorded in the fourth quarter of 2024 when the transfer was completed.

Speaker Change: Using fluids through consumer driven innovation portfolio renovation marketing that matters as well as selectively investing in price.

Carlos: This tax benefit is related to the transfer of certain business operations.

Speaker Change: In the fourth quarter our percent of volumes sold on promotion was down 2% versus the prior year.

Carlos: It's completed in the fourth quarter of 2024.

Speaker Change: This was primarily driven by lapping dynamics.

Carlos: The transfer was part of our planning for the changes in the international tax environment and also allows us to achieve greater operational synergies.

Speaker Change: In the fourth quarter of 2023.

Speaker Change: We're investing more in promotions on a rider as we were coming back from service issues and Philadelphia, we are lapping private label out of stocks.

Carlos: In accordance with GAAP.

Carlos: The P&L benefits from the transfer of certain business operations had to be recorded in the fourth quarter of 2024, when the transfer it was completed.

Speaker Change: As we continue to balance long term profitability, our volume sold on promotion was 5% below levels that of 2019.

Carlos: On a cash tax basis. However, the benefit is recognized annually, starting 2025 and going forward for the next 20 years.

Andre Maciel: On a cash-tax basis, however, the benefit is recognized annually starting 2025 and going forward for the next 20 years. As a result, we expect a 500 PIP to step up in our P&L tax rate starting 2025. However, we only expect a 200 to 300 BPS step up in our cash tax rate.

Speaker Change: Look into 2025, we are planning an increased level of investment in price.

Speaker Change: <unk> mindful of the consumer situation, we potentially making investments to adjust price gaps in selected categories.

Carlos: As a result, we expect the 500 bps of step up in our P&L tax rate starting 2025.

Carlos Abrams-Rivera: However, we only expect a 200 to 300 basis points step-up in our cash tax rate. We continue to maintain a strong balance sheet while returning capital to stockholders. In 2024, we maintain our net leverage target of three times, ending the year at 2.9 times. We believe this is a good level that provides us with optionality. We also return approximately $2.7 billion to stockholders, $1.9 billion to our competitive dividend with a yield that exceeds 5%, and $800 million through our share repurchase program. This leaves about $1.9 billion remaining against our $3 billion authorization. As a reminder, our share repurchase program is non-programmatic, a function of excess cash, and takes into consideration the macroeconomic environment. Now, turning to our full-year 2025 outlook, we are expecting organic net sales in the range of down 2.5% to flat.

However, we only expect a 200 to 300 basis points step-up in our cash tax rate. We continue to maintain a strong balance sheet while returning capital to stockholders. In 2024, we maintain our net leverage target of three times, ending the year at 2.9 times. We believe this is a good level that provides us with optionality. We also return approximately $2.7 billion to stockholders, $1.9 billion to our competitive dividend with a yield that exceeds 5%, and $800 million through our share repurchase program. This leaves about $1.9 billion remaining against our $3 billion authorization. As a reminder, our share repurchase program is non-programmatic, a function of excess cash, and takes into consideration the macroeconomic environment. Now, turning to our full-year 2025 outlook, we are expecting organic net sales in the range of down 2.5% to flat.

Carlos: Primarily across the four key brands Carlos discussed, adding U S away from home.

Carlos: However, we only expect a two to 300 bps to step up in our cash tax rate.

Carlos: Why are we will be investing more we have also taken actions to ensure we generate positive returns.

Carlos: And we continue to maintain a strong balance sheet, while returning capital to stockholders.

Andre Maciel: and we continue to maintain a strong balance. while returning capital to stock. In 2024, we maintain our net leverage target of 3 times, ending the year at 2.9 times. We believe this is a good level that provides us with optionality. We also return approximately $2.7 billion to stockholders. $1.9 billion to our competitive dividend with a yield that exceeds 5%. and $800 million through our Shari Purchase Program. This leaves about $1.9 billion remaining against our $3 billion authorization.

Carlos: We have additional opportunities identified for 2035 to remove no effects of events that we're not driving top and bottom line in 2034.

Carlos: In 2024, we maintained our net leverage target of three times ending the year at two nine times.

Carlos: And we know that promotions without product improvements and marketing, we will not get us to where we need to be.

Carlos: We believe this is a good level of debt provides us with optionality.

Carlos: We also returned approximately $2 $7 billion to stockholders.

Carlos: Moving down the P&L, we continue to generate margin expansion through end to end efficiencies.

Carlos: One $9 billion through our competitive dividend yield that exceeds 5%.

Carlos: These help us to not only offset inflation, but it also enables us to invest in the business to support long term growth.

Carlos: And $800 million through our share repurchase program.

Carlos: In 2034.

Carlos: This leaves about $1 $9 billion remaining against our $3 billion authorization.

Carlos: We generated nearly four 5% of gross efficiencies as a percentage of cost of goods sold.

Carlos: As a reminder, our share repurchase program is not programmatic a function of excess cash and takes into consideration the macro economic environment.

Andre Maciel: As a reminder, our share repurchase program is non-programmatic, a function of excess cash, and takes into consideration the macroeconomic environment.

Carlos: This exceeded the targets we had for the year and we are well on our way to achieving our goal of $2 $5 billion in efficiencies by 2027.

Carlos: With $1 $3 billion unlocked to date, we have significant runway ahead to capture at least $1 $2 billion Mark.

Carlos: Now turning to our full year 2025 outlook.

Andre Maciel: Now turn to our full year 2025 output. We are expecting organic net sales in the range of down 2.5% This includes full-year growth in our emerging markets and global away-from-home pillars. with an elongated recovery expected in U.S. retail challenge category. We expect organic net sales in the first quarter to come in lower relative to the fourth quarter of 2024. This is driven primarily by an approximate 100 basis point headwind for total Kraft-Heinz due to an Easter Shower. As a result, we expect to see lighter sales in the first quarter with an offset in the second quarter.

Carlos: We're expecting organic net sales in the range of down two 5% flat.

Carlos Abrams-Rivera: This includes full-year growth in our emerging markets and global away from home pillars, with an elongated recovery expected in US retail challenged categories. We expect organic net sales in Q1 to come in lower relative to Q4 2024. This is driven primarily by an approximate 100 basis point headwind for total Kraft Heinz due to an Easter shift. As a result, we expect to see lighter sales in Q1, with an offset in Q2. Q2 should also benefit from lapping pressures on Lunchables performance, and the temporary plant closure in Q2 2024, as well as increased investments in price and product. We then expect H2 to gradually improve from Q2. Constant currency adjusted operating income is expected to be down 4% to down 1%.

This includes full-year growth in our emerging markets and global away from home pillars, with an elongated recovery expected in US retail challenged categories. We expect organic net sales in Q1 to come in lower relative to Q4 2024. This is driven primarily by an approximate 100 basis point headwind for total Kraft Heinz due to an Easter shift. As a result, we expect to see lighter sales in Q1, with an offset in Q2. Q2 should also benefit from lapping pressures on Lunchables performance, and the temporary plant closure in Q2 2024, as well as increased investments in price and product. We then expect H2 to gradually improve from Q2. Constant currency adjusted operating income is expected to be down 4% to down 1%.

Carlos: Throughout China at scale.

Carlos: This includes full year growth in our emerging markets and global away from home pillars, We've a Netherlands gate that recovery expected in U S retail challenge to categories.

Carlos: We expect organic net sales in the first quarter, two coming lower relative to the fourth quarter of 2024.

Carlos: These efficiencies helped generate hundreds basis points of adjusted gross profit margin expansion in 2024 and.

Carlos: This is driven primarily by an approximate 100 basis point headwind for total Kraft Heinz due to an Easter shift.

Carlos: And provided us with the flexibility to increase investments.

Carlos: We exited 2020, Florida with marketing as a percent of net sales at four 5% and R&D as a percent of net sales at 0.6%.

Carlos: As a result, we expect to see lighter sales in the first quarter, we have an offset in the second quarter.

Carlos: On the marketing front, we are approaching optimal levels and are shifting more focus in 2075 on unlocking additional value from our marketing spend.

Carlos: The second quarter should also benefit from lapping pressures of lunch bowls for farmers and the temporary plant closure in the second quarter of 2024.

Andre Maciel: The second quarter should also benefit from lapping pressures on launchables' performance and the temporary plant closure in the second quarter of 2024. as well as increased investments in price and product. We then expect the second half to gradually improve from the second quarter. Constant Currency Adjusted Operating Income is expected to be down 4% This includes the impact of lapping lower variable compensation in 2024, which is an approximate 210 basis point headwind at the midpoint of our guidance. Please also contemplate an adjusted gross profit margin that is flat to slightly positive year-over-year. driven by our gross efficiencies that are mostly offset by incremental investments in price and product.

Carlos: Data driven improvements to rois.

Carlos: As well as increased investments in price and product.

Carlos: We have plans in place that will optimize marketing mix across brands and media types to ensure our dollars are working hard for our plants.

Carlos: We then expect the second half to gradually improve from the second quarter.

Carlos: Constant currency adjusted operating income is expected to be down 5%.

Carlos: On R&D, we expect to further increase our investments to support future innovation and are targeting levels closer to 1% of net sales.

Carlos Abrams-Rivera: This includes the impact of lapping lower variable compensation in 2024, which is an approximate 210 basis points headwind at the midpoint of our guidance. This also contemplates an Adjusted Gross Profit Margin that is flat to slightly positive year over year, driven by our gross efficiencies that are mostly offset by incremental investments in price and product. We expect Adjusted EPS to be in the range of $2.63 to 2.74. This reflects a $0.07 headwind versus the prior year from lower variable incentive compensation in 2024. Our Adjusted EPS expectation also contemplates an effective tax rate of approximately 26%, which is a $0.23 headwind on Adjusted EPS year over year. The step-up in our effective P&L tax rate is primarily related to the dynamics I noted earlier. As a reminder, this outlook does not reflect any impact from future potential share repurchases.

This includes the impact of lapping lower variable compensation in 2024, which is an approximate 210 basis points headwind at the midpoint of our guidance. This also contemplates an Adjusted Gross Profit Margin that is flat to slightly positive year over year, driven by our gross efficiencies that are mostly offset by incremental investments in price and product. We expect Adjusted EPS to be in the range of $2.63 to 2.74. This reflects a $0.07 headwind versus the prior year from lower variable incentive compensation in 2024. Our Adjusted EPS expectation also contemplates an effective tax rate of approximately 26%, which is a $0.23 headwind on Adjusted EPS year over year. The step-up in our effective P&L tax rate is primarily related to the dynamics I noted earlier. As a reminder, this outlook does not reflect any impact from future potential share repurchases.

Carlos: So down 1%.

Carlos: This includes the impact of lapping lower variable compensation in 2024, which is an approximate 210 basis point headwind at the midpoint of our guidance.

Carlos: Turning to cash flow.

Carlos: Generated full year free cash flow conversion of 85%, a four percentage point increase versus the prior year.

Carlos: This also contemplates an adjusted gross profit margin that is flat to slightly positive year over year.

Carlos: This was primarily driven by the conversion of certain surplus assets relate that should the U S post retirement medical plan to cash as well as improved working capital.

Carlos: Driven by our gross efficiencies that are mostly offset by incremental investments in price and product.

Carlos: At the same time, we continue to increase the vast months for growth.

Carlos: We expect adjusted EPS to be in the range of $2 63 to.

Andre Maciel: We expect adjusted EPS to be in the range of $2.63 to $2.74. This reflects a $0.07 headwind versus the prior year from lower variable incentive compensation in 2024. Our adjusted EPS expectation also contemplates an effective tax rate of approximately $26,000. which is a 23 cent headwind on adjusted EPS year over year. to step up in our effective P&L tax rate. primarily related to the dynamics I noted.

Carlos: Full year Capex increased two 4% of net sales up 20 basis points from the prior year.

Carlos: $2.74.

Carlos: This reflects a 7% headwind versus the prior year from lower variable incentive compensation in 2024.

Carlos: In terms of adjusted EPS, we grew seven 7% or six vessels.

Carlos: Versus the fourth quarter of 2023.

Carlos: Our adjusted EPS expectation also contemplates an effective tax rate of approximately 26%.

Carlos: This was driven by positive impact from a lower effective tax rate and share repurchases.

Carlos: Which is up 23% headwind on adjusted EPS year over year.

Carlos: Keeping in mind, our adjusted EPS does exclude an impairment charge of $1 $4 billion that was recognized in the quarter, which was more than offset by a $2 4 billion dollar tax benefits.

Carlos: The step up in our effective tax rate is primarily related to the dynamics I noted earlier.

Carlos: This tax benefit is related to the transfer of certain business operations.

Carlos: As a reminder.

Andre Maciel: As a reminder, This outlook does not reflect any impact from future potential share repurchase.

Carlos: This outlook does not reflect any impact from future potential share repurchases.

Carlos: It's completed in the fourth quarter of 2024.

Carlos Abrams-Rivera: From a free cash flow perspective, we expect 2025 to be flat versus prior year, with free cash flow conversion of approximately 95%. This is driven by working capital efficiencies and lower cash outflows for variable compensation, partially offset by the net cash impact of a higher tax rate. We also want to acknowledge that the macroeconomic landscape remains uncertain, particularly as it relates to potential tariffs, food regulations, changes to SNAP, and foreign exchange headwinds. Our current outlook does not contemplate significant worsening of these macroeconomic pressures. With that, I will pass it back to Carlos for some closing comments. Thank you, Andre. At Kraft Heinz, we're acting with urgency, building upon our proven ability to unlock efficiencies, benefiting from 2024 foundational accomplishments in our strategic pillars, and investing for the now and the near to support the next. We have established our ability to be an efficient operator.

From a free cash flow perspective, we expect 2025 to be flat versus prior year, with free cash flow conversion of approximately 95%. This is driven by working capital efficiencies and lower cash outflows for variable compensation, partially offset by the net cash impact of a higher tax rate. We also want to acknowledge that the macroeconomic landscape remains uncertain, particularly as it relates to potential tariffs, food regulations, changes to SNAP, and foreign exchange headwinds. Our current outlook does not contemplate significant worsening of these macroeconomic pressures. With that, I will pass it back to Carlos for some closing comments.

Carlos: The transfer was part of our planning for the changes in the international tax environment and also allows us to achieve greater operational synergies.

Carlos: From a free cash flow perspective, we expect 2035 to be flat versus prior year.

Andre Maciel: From a free cash flow perspective. we expect 2025 to be flat versus priority. free cash flow conversion of approximately 95%. This is driven by working capital efficiencies and lower cash outflows for variable compensation, partially offset by the net cash impact of a higher tax rate.

Carlos: With free cash flow conversion of approximately 95%.

Carlos: In accordance with GAAP.

Carlos: The P&L benefits from the transfer of certain business operations had to be recorded in the fourth quarter of 2024, when the transfer it was completed.

Carlos: This is driven by working capital efficiencies and lower cash outflows for variable compensation, partially offset by the net cash impact of a higher tax rate.

Carlos: On a cash tax basis. However, the benefit is recognized annually, starting 2025 and going forward for the next 20 years.

Carlos: We also want truck knowledge that the macroeconomic landscape remains uncertain.

Andre Maciel: We also want to acknowledge that the macroeconomic landscape remains uncertain. Particularly as it relates to potential tariffs, food regulations, changes to SNAP, and foreign exchange headway. Our current outlook does not contemplate significant worsening of this macroeconomic pressure.

Carlos: Particularly as it relates to potential tariffs food regulations.

Carlos: As a result, we expect the 500 bps of step up in our P&L tax rate starting 2025.

Carlos: Nap and foreign exchange headwinds.

Carlos: Our current outlook does not contemplate significant worsening of this macroeconomic pressures.

Carlos: However, we only expect a two to 300 bps to step up in our cash tax rates.

Carlos Abrams-Rivera: Thank you, Andre. At Kraft Heinz, we're acting with urgency, building upon our proven ability to unlock efficiencies, benefiting from 2024 foundational accomplishments in our strategic pillars, and investing for the now and the near to support the next. We have established our ability to be an efficient operator.

Carlos: With that.

Carlos Abrams: With that, I'll pass it back to Carlos for some closing comments.

Carlos: Pass it back to Carlos for some closing comments.

Carlos: And we continue to maintain a strong balance sheet, while returning capital to stockholders.

Carlos: Thank you Andrea.

Carlos Abrams: Thank you, Andre. At Kraft Heinz, we're acting with urgency. building upon our proven ability to unlock efficiencies, benefiting from 2024 foundational accomplishments in our strategic pillars, and investing for the now and the near to support the next. We have established our ability to be an efficient operator. Through the capabilities we have developed, due in large part to our agile ways of working, we are generating best-in-class efficiencies with $1.3 billion captured to date, with line-of-sight to an additional $1.2 billion. These deficiencies, along with working capital improvements, have led to an increase in free cash flow conversion from 81% in 2023 to 85% in 2024, with expectations to increase to approximately 95% in 2025.

Carlos: At Kraft Heinz we're acting with urgency.

Carlos: In 2024, we maintained our net leverage target of three times ending the year at two nine times.

Carlos: Building upon our proven ability to unlock efficiencies benefiting from 2024 foundational accomplishments in our strategic pillars and investing for the now and the near to support the next week.

Carlos: We believe this is a good level of debt provides us with optionality.

Carlos Abrams-Rivera: Through the capabilities we have developed, due in large part to our agile ways of working, we are generating best-in-class efficiencies, with $1.3 billion captured to date, with line of sight to an additional $1.2 billion. These efficiencies, along with working capital improvements, have led to an increase in free cash flow conversion from 81% in 2023 to 85% in 2024, with expectations to increase to approximately 95% in 2025. Last year, our teams were busy laying a solid foundation for 2025. Our top-line improvements in the year will be driven by building upon the momentum of strategic growth drivers, leveraging initiatives already set in motion. Earlier, I talked about a couple of our successful innovation launches across Heinz, Mac & Cheese, and our Mexican strategy. As we think about 2025, over 75% of the forecasted sales from innovation will come from launches already proved out.

Through the capabilities we have developed, due in large part to our agile ways of working, we are generating best-in-class efficiencies, with $1.3 billion captured to date, with line of sight to an additional $1.2 billion. These efficiencies, along with working capital improvements, have led to an increase in free cash flow conversion from 81% in 2023 to 85% in 2024, with expectations to increase to approximately 95% in 2025. Last year, our teams were busy laying a solid foundation for 2025. Our top-line improvements in the year will be driven by building upon the momentum of strategic growth drivers, leveraging initiatives already set in motion. Earlier, I talked about a couple of our successful innovation launches across Heinz, Mac & Cheese, and our Mexican strategy. As we think about 2025, over 75% of the forecasted sales from innovation will come from launches already proved out.

Carlos: We also returned approximately $2 $7 billion to stockholders.

Carlos: We have established our ability to be an efficient operator.

Carlos: Through the capabilities, we have developed due in large part of our agile ways of working we are generating best in class efficiencies with $1 3 billion captured to date with line of sight to an additional $1 2 billion.

Carlos: One $9 billion through our competitive dividend yield that exceeds 5%.

Carlos: And $800 million through our share repurchase program.

Carlos: This leaves about $1 $9 billion remaining against our $3 billion authorization.

Carlos: This efficiencies along with working capital improvements have led to an increase in free cash flow conversion from 81% in 2023% to 85% in 2024 with expectations to increase to approximately 95% in 2025.

Carlos: As a reminder, our share repurchase program is not programmatic a function of excess cash and takes into consideration the macro economic environment.

Carlos Abrams: Last year, our teams were busy laying a solid foundation for 2025. Our top line improvements in the year will be driven by building upon the momentum of strategic growth drivers. Leveraging initiatives already set in motion. Earlier I talked about a couple of our successful innovation launches across Heinz, mac and cheese, and our Mexican strategy. As we think about 2025, over 75% of the forecasted sale from innovation will come from launches already proved out. Being away from home, I am excited to enter the year with 75% of expected sales from new customers wins already locked in.

Carlos: Last year, our teams were busy laying a solid foundation for 2025.

Carlos: Now turning to our full year 2025 outlook.

Carlos: Our top line improvements in the year will be driven by building upon the momentum our strategic growth drivers leveraging initiatives already set in motion.

Carlos: We're expecting organic net sales in the range of down two 5% flat.

Carlos: This includes full year growth in our emerging markets and global away from home pillars, We've a Netherlands gate that recovery expected in U S retail challenge to categories.

Carlos: Earlier, I talked about a couple of our successful innovation launches across highs Mac and cheese and a Mexican strategy.

Carlos: How do we think about 2025 over 75% in the forecast of sale from innovation will come from launches already prove out.

Carlos: We expect organic net sales in the first quarter, two coming lower relative to the fourth quarter of 2024.

Carlos Abrams-Rivera: In Away from Home, I am excited to enter the year with 75% of expected sales from new customers' wins already locked in, and a strong line of sight to additional customer wins as we progress throughout the year. In emerging markets, we will continue to execute against our go-to-market model in both retail and away from home, building upon continued distribution gains. With significant white space and a proven plan in emerging markets, we have meaningful opportunities to continue to grow. What really excites me is we completed two successful pilots of our brand growth system. Although it's still early, we are seeing promising initial results across Philadelphia and Heinz in the UK. In 2025, we will be investing for the now and near to support the next.

In Away from Home, I am excited to enter the year with 75% of expected sales from new customers' wins already locked in, and a strong line of sight to additional customer wins as we progress throughout the year. In emerging markets, we will continue to execute against our go-to-market model in both retail and away from home, building upon continued distribution gains. With significant white space and a proven plan in emerging markets, we have meaningful opportunities to continue to grow. What really excites me is we completed two successful pilots of our brand growth system. Although it's still early, we are seeing promising initial results across Philadelphia and Heinz in the UK. In 2025, we will be investing for the now and near to support the next.

Carlos: Being away from home I am excited to enter the year with 75% of expected sales from new customers wins already locked in.

Carlos: This is driven primarily by an approximate 100 basis point headwind for total Kraft Heinz due to an Easter shift.

Carlos Abrams: and a strong line of sight to additional customer wins as we progress throughout the year. In emerging markets, we will continue to execute against our go-to-market model in both retail and away-from-home, building upon continued distribution gains. With significant white space and a proven plan in emerging markets, we have meaningful opportunities to continue to grow.

Carlos: And a strong line of sight to additional customer wins as we progress throughout the year.

Carlos: As a result, we expect to see lighter sales in the first quarter, we have an offset in the second quarter.

Carlos: In emerging markets, we will continue to execute against our go to market model in both retail and away from home building. Upon continued distribution gains with significant wide space and our proven planning emerging markets, we have meaningful opportunities to continue to grow.

Carlos: The second quarter should also benefit from lapping pressures of Lunchables for farmers and the temporary plant closure in the second quarter of 2024.

Carlos Abrams: And what really excites me is we completed two successful pilots of a brand growth system. Although it's still early, we are seeing promising initial results across Philadelphia and Heinz in the UK. And in 2025, we will be investing for the now and near to support the next. We are scaling a brand growth system, utilizing agile scale ways to work and to grow our core must win brand. This deep, forensic-like assessment of our brands uncovers meaningful opportunities to invest in the product, ensuring that we are driving superiority on all fronts, delivering on consumer desires, and creating marketing that resonates with consumers.

Carlos: And what really excites me is we completed two successful pilot of our brand growth system. Although still early we have seen promising initial results across Philadelphia and highest in the U K.

Carlos: As well as increased investments in price and product.

Carlos: We then expect the second half to gradually improve from the second quarter.

Carlos: And in 2025, we will be investing for the now and the year to support the next.

Carlos Abrams-Rivera: We are scaling our Brand Growth System, utilizing agile at scale ways to work and to grow our core must-win brands. This deep forensic-like assessment of our brands uncovers meaningful opportunities to invest in the product, ensuring that we are driving superiority on all fronts, delivering on consumer desires, and creating marketing that resonates with consumers. Importantly, we are dedicated to making these investments while protecting profits. We're also honing in on our sales capabilities, ensuring our products are available and visible wherever, whenever, and however a consumer wants. This includes strengthening our capabilities across our go-to-market model and joint business planning to drive further distribution and reach. All of this combined, along with our highest employee engagement yet, being named a great place to work in 22 countries, including in the US for the first time, gives me excitement headed into 2025.

We are scaling our Brand Growth System, utilizing agile at scale ways to work and to grow our core must-win brands. This deep forensic-like assessment of our brands uncovers meaningful opportunities to invest in the product, ensuring that we are driving superiority on all fronts, delivering on consumer desires, and creating marketing that resonates with consumers. Importantly, we are dedicated to making these investments while protecting profits. We're also honing in on our sales capabilities, ensuring our products are available and visible wherever, whenever, and however a consumer wants. This includes strengthening our capabilities across our go-to-market model and joint business planning to drive further distribution and reach. All of this combined, along with our highest employee engagement yet, being named a great place to work in 22 countries, including in the US for the first time, gives me excitement headed into 2025.

Carlos: Constant currency adjusted operating income is expected to be down 5%.

Carlos: We are scaling our brand growth system utilizing ideal a scaled way to working to grow our core must win brands.

Carlos: To down 1%.

Carlos: This includes the impact of lapping lower variable compensation in 2024, which is an approximate 210 basis point headwind at the midpoint of our guidance.

This deep forensic like assessment of our brands on cover meaningful opportunities to invest in the product ensuring that we are driving superiority on all fronts, delivering a consumer desires and creating marketing that resonates with consumers and.

Carlos: This also contemplates an adjusted gross profit margin that is flat to slightly positive year over year.

Carlos Abrams: And importantly, we are dedicated to making these investments while protecting the profits. We're also honing in on our sales capabilities, ensuring our products are available and visible wherever, whenever, and however our consumers want. This includes strengthening our capabilities across our go-to-market model and joint business planning to drive further distribution and reach.

Carlos: And importantly, we are dedicated to making these investments while protecting profits.

Carlos: Driven by our gross efficiencies that are mostly offset by incremental investments in price and product.

Carlos: We're also honing in on where our sales capabilities, ensuring our products are available and visible wherever whenever and however, our consumers once.

Carlos: We expect adjusted EPS to be in the range of $2 63 to.

Carlos: This includes strengthening our capabilities across our go to market model and joint business planning to drive further distribution and reach.

Carlos: $2.74.

Carlos: This reflects a 7% headwind versus the prior year from lower variable incentive compensation in 2024.

Carlos: All of this combined along with our highest employee engagement yet be name a great place to work in 22 countries, including in the U S. For the first time gives me excitement heading into 2025.

Carlos Abrams: All of this combined, along with the highest employee engagement yet, being named a great place to work in 22 countries, including in the U.S. for the first time, gives me excitement headed into 2025. I know we got some work ahead of us to really drive growth. But I got to tell you, I am feeling pretty optimistic about the momentum we have built. We're making strides, and that's something to be excited about. As we look to the year ahead, I'm confident that we got the right strategy in place. We'll keep innovating, we'll stay focused, and we'll keep driving towards our goals.

Carlos: Our adjusted EPS expectation also contemplates an effective tax rate of approximately 26%.

Carlos Abrams-Rivera: I know we got some work ahead of us to really drive growth. But I got to tell you, I am feeling pretty optimistic about the momentum we have built. We're making strides, and that's something to be excited about. As we look to the year ahead, I'm confident that we got the right strategy in place. We'll keep innovating, we'll stay focused, and we'll keep driving towards our goals. Together, I'm excited to see what we can achieve. Thank you for your time and interest in Kraft Heinz.

I know we got some work ahead of us to really drive growth. But I got to tell you, I am feeling pretty optimistic about the momentum we have built. We're making strides, and that's something to be excited about. As we look to the year ahead, I'm confident that we got the right strategy in place. We'll keep innovating, we'll stay focused, and we'll keep driving towards our goals. Together, I'm excited to see what we can achieve. Thank you for your time and interest in Kraft Heinz.

Carlos: Which is up 23% headwind on adjusted EPS year over year.

Carlos: I know we've got some work ahead of us to really drive growth.

Carlos: I can I'll tell you I am feeling pretty optimistic about the momentum we have built we're making strides and thats something to be excited about as we look to the year ahead and confident that we got the right strategy in place we will keep innovating, we'll stay focused and we will keep driving towards our goals together I'm excited to see what we can achieve.

Carlos: The step up in our effective tax rate is primarily related to the dynamics I noted earlier.

Carlos: As a reminder.

Carlos: This outlook does not reflect any impact from future potential share repurchases.

Carlos Abrams: Together, I'm excited to see what we can achieve.

Carlos Abrams: Thank you for your time and interest in Kraft Heinz.

Carlos: Thank you for your time and interest in Kraft Heinz.

Carlos: From a free cash flow perspective, we expect 2035 to be flat versus prior year.

Carlos: With free cash flow conversion of approximately 95%.

Carlos: This is driven by working capital efficiencies and lower cash outflows for variable compensation, partially offset by the net cash impact of a higher tax rate.

Carlos: We also want truck knowledge that the macroeconomic landscape remains uncertain.

Carlos: Particularly as it relates to potential tariffs food regulations.

Carlos: Nap and foreign exchange headwinds.

Carlos: Our current outlook does not contemplate significant worsening of this macroeconomic pressures.

Carlos: With that.

Carlos: Pass it back to Carlos for some closing comments.

Carlos: Thank you Andrea.

Carlos: At Kraft Heinz we're acting with urgency.

Building upon our proven ability to unlock efficiencies benefiting from 2024 foundational accomplishments in our strategic pillars and investing for the now and the year to support the next week.

Carlos: We have established our ability to be an efficient operator.

Last year, our teams were busy laying a solid foundation for 2025.

Carlos: Our top line improvements in the year will be driven by building upon the momentum for strategic growth drivers leveraging initiatives already set in motion.

Carlos: Earlier, I talked about a couple of our successful innovation launches across highs Mac and cheese and a Mexican strategy.

Carlos: As we think about 2025 over 75% in the forecast of sale from innovation will come from launches already prove out.

Carlos: Being away from home I am excited to enter the year with 75% of expected sales from new customers wins already locked in.

Carlos: And a strong line of sight to additional customer wins as we progress throughout the year.

Carlos: And what really excites me is we completed two successful pilot of our brand growth system. Although it's still early we have seen promising initial results across Philadelphia and highest in the U K.

Carlos: And in 2025, we will be investing for the now and the year to support the next.

Carlos: We are scaling our brand growth system utilizing ideal scale ways to work and to grow our core must win brands.

Carlos: This deep forensic like assessment of our brands on cover meaningful opportunities to invest in the product ensuring that we are driving superiority on all fronts delivering on consumer desires and creating marketing that restaurant is with consumers.

Carlos: And importantly, we are dedicated to making these investments while protecting profits.

Carlos: We're also honing in on where our sales capabilities, ensuring our products are available and visible wherever whenever and however, our consumers once.

Carlos: This includes strengthening our capabilities across our go to market model and joint business planning to drive further distribution and reach.

Carlos: I know we've got some work ahead of us to really drive growth.

Carlos: What I can tell you I am feeling pretty optimistic about the momentum we have built we're making strides and thats something to be excited about as we look to the year ahead and compound that we got the right strategy in place we will keep innovating, we'll stay focused and we will keep driving towards our goals.

Carlos: Together I am excited to see what we can achieve thank you for your time and interest in Kraft Heinz.

Q4 2024 Kraft Heinz Co Earnings Call - Pre-Recorded

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