Q2 2025 Kraft Heinz Co Earnings Call - Pre-Recorded

July 30, 2025

Business update.

Carlos Abrams-Rivera: We recognize that the microenvironment remains volatile. Consumers are looking for value, whether that be through price or product benefits, and we're delivering. Our investments are paying off, providing value and driving brand and product superiority that is resonating with consumers, with our brand growth systems as the foundation. And importantly, as we continue to make these investments, we are generating strong cash flow, maintaining a target net leverage ratio, and returning capital to stockholders. As we look to the future, I am confident that we have the right elements in place to drive long-term profitable growth.

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

Those are looking for value whether that be through price or product benefits and we are delivering.

Our investments are paying off providing value in driving brand and product superiority that is resonating with consumers with our brand growth systems After foundation and.

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

And importantly, as we continue to make these investments we are generating strong cash flow, maintaining a target net leverage ratio and returning capital to stockholders.

Carlos Abrams-Rivera: Importantly, as we continue to make these investments, we are generating strong cash flow, maintaining our target net leverage ratio, and returning capital to stockholders. As we look to the future, I am confident that we have the right elements in place to drive long-term profitable growth. Now, moving into the details of our second quarter results, organic net sales declined 2% versus the prior year, an improvement when looking at our first quarter results, which were down 4.7%. As expected, we experienced gross margin and bottom-line pressure, with gross efficiencies and price more than offset by higher inflation and trade investments in the quarter. On the cash side, we continue to deliver very strong results. We generated $1.5 billion of free cash flow year-to-date, nearly 30% above prior year levels. All in all, the second quarter played out in line with our expectations. Our strategic priorities remain unchanged.

Importantly, as we continue to make these investments, we are generating strong cash flow, maintaining our target net leverage ratio, and returning capital to stockholders. As we look to the future, I am confident that we have the right elements in place to drive long-term profitable growth. Now, moving into the details of our second quarter results, organic net sales declined 2% versus the prior year, an improvement when looking at our first quarter results, which were down 4.7%. As expected, we experienced gross margin and bottom-line pressure, with gross efficiencies and price more than offset by higher inflation and trade investments in the quarter. On the cash side, we continue to deliver very strong results. We generated $1.5 billion of free cash flow year-to-date, nearly 30% above prior year levels. All in all, the second quarter played out in line with our expectations. Our strategic priorities remain unchanged.

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

As we look to the future I am confident that we have the right elements in place to drive long term profitable growth.

And 8-K filings for more information regarding these risks and uncertainties.

Now moving into the details of our second quarter results organic net sales declined 2% versus the prior year an improvement when looking at our first quarter results, which were down four 7%.

Carlos Abrams-Rivera: Now, moving into the details of our second quarter results. Organized sales declined 2% versus the prior year, an improvement when looking at our first quarter results, which were down 4.7%. As expected, we experience gross margin and bottom line pressure, with gross efficiencies and price more than offset by higher inflation and trade investments in the quarter. On the cash side, we continue to deliver very strong results. We generated $1.5 billion of free cash flow year-to-date, nearly 30% above prior year level. All in all, the second quarter played out in line with our expectations. Our strategic priorities remain unchanged.

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 the 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.

As expected, we experienced gross margin and bottomline pressure with gross efficiencies and price more than offset by higher inflation and trade investments in the quarter.

On the cash side, we continued to deliver very strong results, we generated $1 $5 billion of free cash flow year to date, nearly 30% above prior year levels. All in all the second quarter played out in line with our expectations.

Today, our Chief Executive Officer, Carlos Abrams Rivera will provide an update on our overall business performance and Andre <unk>, Our Chief Global Financial Officer, who will provide a financial review of the second quarter results and will discuss our 2025 outlook. We've also scheduled a separate live question and answer session.

Our strategic priorities remain unchanged, we are focused on driving long term growth and value creation, we continue to unlock efficiencies to reinvest in the business all to power brand and product superiority and ultimately accelerate profitable growth across our strategic pillars.

Carlos Abrams-Rivera: We are focused on driving long-term growth and value creation. We continue to unlock efficiencies to reinvest in the business, all to power brand and product superiority and ultimately accelerate profitable growth across our strategic pillars. Now, let's take a look at our results through the lens of these strategic pillars. Our prioritized investments in our North America retail accelerator platforms are starting to yield results, with underlying sales improving in 14 categories relative to Q1. Year-over-year, strong growth in Philadelphia and Primal Kitchen brands was more than offset by declines in Lunchables, while improving sequentially in frozen snacks. Global away-from-home organic net sales declined 1.9%. We delivered growth in international away-from-home for the 17th straight quarter, while the overall US away-from-home industry continues to face pressure due to traffic headwinds.

We are focused on driving long-term growth and value creation. We continue to unlock efficiencies to reinvest in the business, all to power brand and product superiority and ultimately accelerate profitable growth across our strategic pillars. Now, let's take a look at our results through the lens of these strategic pillars. Our prioritized investments in our North America retail accelerator platforms are starting to yield results, with underlying sales improving in 14 categories relative to Q1. Year-over-year, strong growth in Philadelphia and Primal Kitchen brands was more than offset by declines in Lunchables, while improving sequentially in frozen snacks. Global away-from-home organic net sales declined 1.9%. We delivered growth in international away-from-home for the 17th straight quarter, while the overall US away-from-home industry continues to face pressure due to traffic headwinds.

With analyst you can access our question and answer session IR Dot Kraft Heinz company Dot Com a replay will also be available following the event through the same website with that I will turn it over to Carlos.

Now, let's take a look at our result of the length of this strategic pillars.

Thank you Anne Marie and thank you all for joining us.

Carlos Abrams-Rivera: Now, let's take a look at our results through the lens of this strategic pillar. Our prioritizing investments in our North America retail accelerator platforms are starting to yield results, with underlying sales improved in 14 categories relative to the first quarter. Year over year, strong growth in Philadelphia and Primal Kitchen brands was more than offset by declines in launchables, while improving sequentially and processing. Global away from home organic net sales declined 1.9%. We delivered growth in international away-from-home for the 17th straight quarter. While the overall U.S. away-from-home industry continues to face pressure due to traffic headwinds.

<unk> will continue to play a vital role families' lives as we navigate the complexities of the current market landscape, our commitment to delivering superior affordable and accessible products is unwavering.

Our prioritizing investments in our North America retail accelerate platforms are starting to yield results with underlying sales improved 14 categories relative to the first quarter year over year strong growth in Philadelphia, and Primal kitchen brands was more than offset by declines in lunchables while.

Whether it is a family dinner a backyard barbecue a quick snack on the goal our brands are at the center of creative moments that matter.

Improvement sequentially and process next.

Our second quarter performance reflects this dedication from process improvements to investments in our manufacturing capabilities. We are working tirelessly to ensure that our portfolio evolve to meet the changing needs of our consumers.

Global away from home organic net sales declined one 9% we delivered growth in international away from home for the 17th straight quarter.

While the overall U S away from home industry continues to face pressure due to traffic headwinds.

As we look to the future we remain focused on driving long term growth, while maintaining the financial discipline that has always been and will continue to be part of DNA of our company.

Looking ahead, we continue to expect growth in our international business, where we are not contemplating an improvement in the U S industry for the rest of 2025.

Carlos Abrams-Rivera: Looking ahead, we continue to expect growth in our international business, but we are not contemplating an improvement in the U.S. industry for the rest of 2025. In turning to emerging markets, our top-line growth has continued to strengthen, with an acceleration from 3.9% in the first quarter to 7.6% in this quarter. This was primarily driven by double-digit growth in LATAM and Middle Eastern Africa regions. Emerging markets continue to be a bright spot in our portfolio as we progress further towards our own algorithm pace of double digit growth.

Carlos Abrams-Rivera: Looking ahead, we continue to expect growth in our international business, but we are not contemplating an improvement in the US industry for the rest of 2025. Turning to emerging markets, our top-line growth has continued to strengthen, with an acceleration from 3.9% in the first quarter to 7.6% in this quarter. This was primarily driven by double-digit growth in LatAm, Middle East, and Africa regions. Emerging markets continue to be a bright spot in our portfolio as we progress further towards our own algorithm pace of double-digit growth. Now, let's dive into our North America retail business, where our Brand Growth System is gaining momentum. This systematic and repeatable data-driven methodology is a critical component in our creative ecosystem, and it is strengthening our disruptive marketing and innovation efforts to drive brand superiority.

Looking ahead, we continue to expect growth in our international business, but we are not contemplating an improvement in the US industry for the rest of 2025. Turning to emerging markets, our top-line growth has continued to strengthen, with an acceleration from 3.9% in the first quarter to 7.6% in this quarter. This was primarily driven by double-digit growth in LatAm, Middle East, and Africa regions. Emerging markets continue to be a bright spot in our portfolio as we progress further towards our own algorithm pace of double-digit growth. Now, let's dive into our North America retail business, where our Brand Growth System is gaining momentum. This systematic and repeatable data-driven methodology is a critical component in our creative ecosystem, and it is strengthening our disruptive marketing and innovation efforts to drive brand superiority.

I am pleased to report that our second quarter results came in line with our expectations and demonstrated an improvement in year over year top line performance.

Turning to emerging markets, our topline growth has continued to strengthen with an acceleration from three 9% in the first quarter to seven 6% in this quarter.

We are progressing across key areas of our business as our investments get implemented including our focused brands in North America retail emerging markets and expanding our footprint in away from home.

This was primarily driven by double digit growth in Latam and middle Eastern Africa regions emerging markets continued to be a bright spot in our portfolio as we progress further towards our own algorithm pace of double digit growth.

We are pleased with the momentum we are building, giving us the confidence to reiterate our 2025 full year outlook.

Now, let's dive into our North America retail business, where our brand growth system is gaining momentum. This systematic and repeatable driver driven methodology is a critical component in our creative ecosystem.

Carlos Abrams-Rivera: Now let's dive into our North America retail business. where our brand growth system is gaining momentum. This systematic and repeatable data-driven methodology is a critical component in our creative ecosystem. And we are strengthening our disruptive marketing and innovation efforts to drive brand superiority. In 2025, our brand growth system is on track to reach 40% sales coverage by year end, which is an increase of 30% points compared to 2024. We prioritize resources to drive improvements across four focused brands in North America, Capri Sun, Lunchables, Kraft Mayonnaise, and Kraft Mac and Cheese. And we are starting to see progress reflected in our results, with sequential improvements relative to the first quarter across each of these four brands.

We recognize that the macro environment remains volatile consumers are looking for value whether that be through price or product benefits and we are delivering our investments are paying off providing value in driving brand and product superiority that is resonating with consumers with our brand growth system.

Munis and strengthening our disruptive marketing and innovation efforts to drive brand superiority.

In 2025, our brand gross system is on track to reach 40% sales coverage by year end, which is an increase of 30% points compared to 2024.

Carlos Abrams-Rivera: In 2025, our brand growth system is on track to reach 40% sales coverage by year-end, which is an increase of 30 percentage points compared to 2024. We prioritize resources to drive improvements across four focus brands in North America: Capri Sun, Lunchables, Kraft Mayonnaise, and Kraft Mac and Cheese. We are starting to see progress reflected in our results, with sequential improvements relative to Q1 across each of these four brands. Starting with Capri Sun, dollar sales have improved by 10 percentage points relative to Q1, growing by over 6% in Q2. We have achieved superior taste, expanded our reach into new channels and households, and improved brand resonance through product-focused creative and by capturing culturally relevant moments. These results give me confidence in our ability to replicate this methodology across our brands to drive further top-line performance.

In 2025, our brand growth system is on track to reach 40% sales coverage by year-end, which is an increase of 30 percentage points compared to 2024. We prioritize resources to drive improvements across four focus brands in North America: Capri Sun, Lunchables, Kraft Mayonnaise, and Kraft Mac and Cheese. We are starting to see progress reflected in our results, with sequential improvements relative to Q1 across each of these four brands. Starting with Capri Sun, dollar sales have improved by 10 percentage points relative to Q1, growing by over 6% in Q2. We have achieved superior taste, expanded our reach into new channels and households, and improved brand resonance through product-focused creative and by capturing culturally relevant moments. These results give me confidence in our ability to replicate this methodology across our brands to drive further top-line performance.

<unk> After foundation.

And importantly, as we continue to make these investments we are generating strong cash flow, maintaining a target net leverage ratio and returning capital to stockholders.

We prioritize resources to driving improvements across four focus brand in North America.

As we look to the future I am confident that we have the right elements in place to drive long term profitable growth.

Your son, Lunchables craft, mayonnaise, and Kraft Mac and cheese, and we are starting to see progress reflected in our results with sequential improvements relative to the first quarter across each of this four brands.

Now moving into the details of our second quarter results organic net sales declined 2% versus the prior year an improvement when looking at our first quarter results, which were down four 7%.

Starting with Capri Sun dollar sales have improved by 10 percentage points relative to the first quarter growing by over 6% in Q2, we.

Carlos Abrams-Rivera: Starting with Capri Sun, dollar sales have improved by 10 percentage points relative to the first quarter, growing by over 6% in Q2. We have achieved superior taste, expanded our reach into new channels and households, and improved brand resonance through product-focused creative and by capturing culturally relevant moments. These results give me confidence in our ability to replicate this methodology across our brands to drive further top-line performance. In launchables, we saw a nine percentage point improvement in dollar sales relative to the first quarter through relevant innovation, enhanced product offerings, and our largest launchable fall season campaign ever.

As expected, we experienced gross margin and bottomline pressure with growth efficiencies and price more than offset by higher inflation and trade investments in the quarter.

We have achieved superior taste expanded our reach into new channels on households, and improved brand resonate through parlak focus creative and by capturing culturally relevant moments.

This results give me confidence in our ability to replicate this methodology across our brands to drive further top line performance.

In Lunchables, we saw a nine percentage point improvement in dealer sales relative to the first quarter through relevant innovation enhanced product offerings, and our largest launch ever fall season campaign ever.

Carlos Abrams-Rivera: In Lunchables, we saw a 9 percentage points improvement in dollar sales relative to Q1 through relevant innovation, enhanced product offerings, and our largest Lunchables fall season campaign ever. We are proving our commitment to both maintaining our number one market share position and to expanding the category. Our recent launch of Lunchables Peanut Butter and Jelly is a great example of this innovation. The new product gives kids the freedom to enjoy a peanut butter and jelly just the way they like it. By bringing innovative solutions to the category, we are driving excitement for both our consumers and our customers. Moving on to Kraft Mayo, where dollar sales improved by 7 percentage points in Q2. Building on this great taste, we are investing in packaging, price, and product-focused creative to drive further improvement.

In Lunchables, we saw a 9 percentage points improvement in dollar sales relative to Q1 through relevant innovation, enhanced product offerings, and our largest Lunchables fall season campaign ever. We are proving our commitment to both maintaining our number one market share position and to expanding the category. Our recent launch of Lunchables Peanut Butter and Jelly is a great example of this innovation. The new product gives kids the freedom to enjoy a peanut butter and jelly just the way they like it. By bringing innovative solutions to the category, we are driving excitement for both our consumers and our customers. Moving on to Kraft Mayo, where dollar sales improved by 7 percentage points in Q2. Building on this great taste, we are investing in packaging, price, and product-focused creative to drive further improvement.

We are proving our commitment to both maintaining our number one market share position and to expand in the category.

Carlos Abrams-Rivera: We are proving our commitment to both maintaining our number one market share position and to expanding the capital. Our recent launch of Lunchables peanut butter and jelly is a great example of this innovation. The new product gives kids the freedom to enjoy a peanut butter and jelly just the way they like it. By bringing innovative solutions to the category, we are driving excitement for both our consumers and our customers. Moving on to Kraft Mayo, where dollar sales improved by seven percentage points in the second quarter. Building on its great taste, we are investing in packaging, price, and product focus creatives to drive further improvement.

Our recent launch of Lunchables peanut butter and jelly is a great example of this innovation.

The new product gives kids the freedom to enjoy a peanut butter and jelly just the way they like it.

Now, let's take a look at our result of the length of this strategic pillars.

By bringing innovative solutions to the category, we are deriving excitement for both our consumers and our customers.

Moving on to craft menu with dollar sales improved by seven percentage points in the second quarter building on these great taste, we are investing in packaging price and product focused creative to drive further improvement and after applying the insights from our brand gross system we are using.

Proving sequentially and process next.

Global away from home organic net sales declined one 9% we delivered growth in international away from home for the 17th straight quarter.

Carlos Abrams-Rivera: And after applying insights from a brand growth system, we are using a targeted regional approach to put our presence in the places where we matter the most during the most relevant key systems. And finally, Kraft Mac and Cheese. We increased sales by one percentage point versus the prior quarter, with several initiatives hitting the market in the second half to build upon these improvements.

Carlos Abrams-Rivera: And after applying insights from our Brand Growth System, we are using a targeted regional approach to push our presence in the places where we matter the most during the most relevant key seasons. And finally, Kraft Mac and Cheese. We increased sales by 1 percentage point versus the prior quarter, with several initiatives hitting the market in the second half to build upon these improvements. We are doing three things to drive growth. First, our new flavors line is specifically designed to attract younger consumers by giving them the bold adventure of flavors they crave. Second, we revamped our packaging to proudly highlight the fact that Kraft Mac and Cheese has been made with no artificial flavors, no preservatives, and no dyes since 2016. And third, recognizing that value is a top priority for our consumers, we introduced value offerings that provide affordable options for families.

And after applying insights from our Brand Growth System, we are using a targeted regional approach to push our presence in the places where we matter the most during the most relevant key seasons. And finally, Kraft Mac and Cheese. We increased sales by 1 percentage point versus the prior quarter, with several initiatives hitting the market in the second half to build upon these improvements. We are doing three things to drive growth. First, our new flavors line is specifically designed to attract younger consumers by giving them the bold adventure of flavors they crave. Second, we revamped our packaging to proudly highlight the fact that Kraft Mac and Cheese has been made with no artificial flavors, no preservatives, and no dyes since 2016. And third, recognizing that value is a top priority for our consumers, we introduced value offerings that provide affordable options for families.

Target a regional approach to push our presence in the places where we might have the most during the most relevant key thesis.

While the overall U S away from home industry continues to face pressure due to traffic headwinds.

And finally, Kraft Mac and cheese, we increased sales by one percentage point versus the prior quarter with several initiatives hitting the market in the second half to build upon these improvements we're doing three things to drive growth.

Looking ahead, we continue to expect growth in our international business, while we are not contemplating an improvement in the U S industry for the rest of 2025.

Carlos Abrams-Rivera: We are doing three things to drive. First, our new flavors line is specifically designed to attract younger consumers by giving them the bold adventure of flavors they crave. Second, we revamped our packaging to proudly highlight the fact that Kraft Mac and Cheese has been made with no artificial flavors, no preservatives, and no dyes since 2016. And third, recognizing that value is a top priority for our consumers, we introduced value offerings that provide affordable options for families. We are headed in the right direction, and positioned for even a better second half as an additional actions plans are set to take effect.

First our new flavors line is specifically designed to attract younger consumers by giving them the bold adventure of flavors they trace.

Turning to emerging markets. Our top line growth has continued to strengthen with an acceleration from three 9% in the first quarter to seven 6% in this quarter.

We've revamped our packaging to proudly highlight the fact that Kraft Mac and cheese has been made with no artificial flavors no pressure, but it and no di's since 2016.

This was primarily driven by double digit growth in Latam and middle Eastern Africa regions.

Merchant market continued to be a bright spot in our portfolio as we progress further towards our own algorithm pace of double digit growth.

And third recognizing the value is a top priority for our consumers, we introduced value offerings that provide affordable options for families.

We are heading the right direction and position for even a better second half, adding additional actions plans are set to take effect.

Carlos Abrams-Rivera: We are heading in the right direction and positioned for even a better second half as additional action plans are set to take effect. The powerful combination of our brand growth system and agile ways of working are fueling improvements across our US retail business and creating a repeatable model that can be successfully applied across all brands in our portfolio. Within taste elevation in North America, we are seeing growth across important brands and categories. As consumers increasingly prioritize protein in their diets, they're turning to our high-quality premium condiments to elevate the flavor and enjoyment of the protein-rich foods. This trend is driving meaningful growth for our brands, with steaks up 5% and Worcestershire sauce up 17%, as we have great products that enhance protein no matter what type consumers choose. Even in today's environment, where conversation centers around value, we are also seeing consumers prioritize better-for-you options.

We are heading in the right direction and positioned for even a better second half as additional action plans are set to take effect. The powerful combination of our brand growth system and agile ways of working are fueling improvements across our US retail business and creating a repeatable model that can be successfully applied across all brands in our portfolio. Within taste elevation in North America, we are seeing growth across important brands and categories. As consumers increasingly prioritize protein in their diets, they're turning to our high-quality premium condiments to elevate the flavor and enjoyment of the protein-rich foods. This trend is driving meaningful growth for our brands, with steaks up 5% and Worcestershire sauce up 17%, as we have great products that enhance protein no matter what type consumers choose. Even in today's environment, where conversation centers around value, we are also seeing consumers prioritize better-for-you options.

The powerful combination of our brand gross system and agile ways of working are fueling improvements across our U S retail business and creating a repeatable model that can be successfully apply across all brands in our portfolio.

Carlos Abrams-Rivera: The powerful combination of our brand growth system and agile ways of working are fueling improvements across our U.S. retail business and creating a repeatable model that can be successfully applied across all brands in our portfolio. We've seen taste elevation in North America. We are seeing growth across important brands and categories. As consumers increasingly prioritize protein in their diets, they're turning to our high-quality premium condiments to elevate the flavor and enjoyment of the protein-rich foods. This trend is driving meaningful growth for our brands, which takes us up 5% and worships us up 17%, as we have great products that enhance protein no matter what type consumers choose.

Ammunition, strengthening our disruptive marketing and innovation efforts to drive brand superiority.

In 2025, our brand growth system is on track to reach 40% sales coverage by year end, which is an increase of 30% points compared to 2024.

We think take TV in North America, we're seeing growth across important brands and categories.

Humorous increasingly prioritized protein in their diets. They are turning to a high quality premium on them is to elevate the flavor and enjoyment of the protein rich foods.

<unk> prioritized resources to drive improvements across four focused brand in North America, Capri Sun, Lunchables craft, mayonnaise, and Kraft Mac and cheese and we are starting to see progress reflected in our results with sequential improvements relative to the first quarter across each of this four brands.

This trend is driving meaningful growth for our brands, which takes us up 5% and warehouses sauce up 17% as we have great products that enhance protein no matter what type of consumers choose.

Starting with Capri Sun dollar sales have improved by 10 percentage points relative to the first quarter growing by over 6% in Q2.

Even in today's environment, where conversations centers around value. We are also seeing consumers prioritize better for you options. We haven't gone array of great tasting affordable products that consumers, who are looking for healthier more sustainable choices can enjoy.

Carlos Abrams-Rivera: Even in today's environment, where conversation centers around value, we are also seeing consumers prioritize better-for-you options. We have an array of great-hitting, affordable products that consumers who are looking for healthier, more sustainable choices can enjoy. Two leading examples of this, Heinz Simple Tomato Ketchup and our Primal Kitchen portfolio grew an impressive 17% and 24% respectively in the second quarter.

We have achieved superior taste expanded our reach into new channels and households, and improve brand resonate through parallel focus creative and by capturing culturally relevant moments.

Carlos Abrams-Rivera: We have an array of great tasting, affordable products that consumers who are looking for healthier, more sustainable choices can enjoy. Two leading examples of this: Heinz Simply Tomato Ketchup and our Primal Kitchen portfolio grew an impressive 17% and 24% respectively in the second quarter. Building on this success, I am incredibly proud that our company led the way in committing to remove artificial color from our US portfolio by the end of 2027. With 90% of our US portfolio already free of artificial colors, we are going even further to ensure we deliver on our promise to provide nutritious, affordable, and delicious food that meets the evolving needs of consumers. This move is a testament to our company's dedication to innovation, exceptional quality, and unparalleled consumer satisfaction. Let's shift our focus to our next strategic pillar, global Away-From-Home.

We have an array of great tasting, affordable products that consumers who are looking for healthier, more sustainable choices can enjoy. Two leading examples of this: Heinz Simply Tomato Ketchup and our Primal Kitchen portfolio grew an impressive 17% and 24% respectively in the second quarter. Building on this success, I am incredibly proud that our company led the way in committing to remove artificial color from our US portfolio by the end of 2027. With 90% of our US portfolio already free of artificial colors, we are going even further to ensure we deliver on our promise to provide nutritious, affordable, and delicious food that meets the evolving needs of consumers. This move is a testament to our company's dedication to innovation, exceptional quality, and unparalleled consumer satisfaction. Let's shift our focus to our next strategic pillar, global Away-From-Home.

Two leading examples of this highest filter tomato ketchup and primal kitchen portfolio grew an impressive 17 and 24% respectively in the second quarter.

These results give me confidence in our ability to replicate this methodology across our brands to drive further top line performance.

In Lunchables, we saw a nine percentage point improvement in dollar sales relative to the first quarter through relevant innovation enhanced product offerings, and our largest launch ever fall season campaign ever.

Building on the success I am incredibly proud of our company led the way in committing to remove artificial colors from our U S portfolio by the end of 2027.

Carlos Abrams-Rivera: Building on this success, I am incredibly proud that our company led the way in committing to remove artificial color from our U.S. portfolio by the end of 2027. With 90% of our U.S. portfolio already free of artificial colors, we are going even further to ensure we deliver on our promise to provide nutritious, affordable, and delicious food that meets the evolving needs of consumers. This move is a testament to our company's dedication to innovation, exceptional quality, and unparalleled consumer satisfaction.

We are proving our commitment to both maintaining our number one market share position and to expand in the category.

With 90% of our U S portfolio already free of artificial colors, we're going even further to ensure we deliver on our promise to provide nutritious affordable and delicious food there.

Our recent launch of <unk> peanut butter and jelly is a great example of this innovation.

The new product gives kids the freedom to enjoy a peanut butter and jelly just the way they like it.

<unk> needs of consumers.

This move is a testament to our company's dedication to innovation exceptional quality.

By bringing innovative solutions to the category, we are deriving excitement for both our consumers and our customers.

Consumer satisfaction.

Let's shift our focus to our next strategic pillar global away from home.

Moving on to Kraft Mayo with dollar sales improved by seven percentage points in the second quarter.

Carlos Abrams-Rivera: Let's shift our focus to our next strategic pillar, global away from home. I am encouraged by the progress we're making across key elements of our strategy, notably our ability to maintain share in the U.S. in the midst of a challenging environment. While there is still room for improvement and we are not yet where we aspire to be, I am optimistic about our potential for growth. We are growing in higher margin channels, where we have concentrated our efforts to drive both growth and profitability, recently adding entertainment to Life Nation as a new customer. we continue to expand beyond ketchup through both distribution and innovative.

I'm encouraged by the progress, we're making across key elements of our strategy, notably our ability to maintain share in the U S. In the midst of a challenging environment.

Carlos Abrams-Rivera: I am encouraged by the progress we're making across key elements of our strategy, notably our ability to maintain share in the US in the midst of a challenging environment. While there is still room for improvement and we are not yet where we aspire to be, I am optimistic about our potential for growth. We are growing in higher margin channels where we have concentrated our efforts to drive both growth and profitability, recently adding Live Nation as a new customer. We continue to expand beyond ketchup through both distribution and innovative offerings. After taking the internet by storm earlier this year, Heinz and award-winning music producer Mustard are teaming up once again with this summer's hottest drop, an unbelievably delicious Heinz Chipotle Honey Mustard. Fans can try this exclusive launch at Buffalo Wild Wings locations across the country before the sauce becomes available at retailers nationwide.

I am encouraged by the progress we're making across key elements of our strategy, notably our ability to maintain share in the US in the midst of a challenging environment. While there is still room for improvement and we are not yet where we aspire to be, I am optimistic about our potential for growth. We are growing in higher margin channels where we have concentrated our efforts to drive both growth and profitability, recently adding Live Nation as a new customer. We continue to expand beyond ketchup through both distribution and innovative offerings. After taking the internet by storm earlier this year, Heinz and award-winning music producer Mustard are teaming up once again with this summer's hottest drop, an unbelievably delicious Heinz Chipotle Honey Mustard. Fans can try this exclusive launch at Buffalo Wild Wings locations across the country before the sauce becomes available at retailers nationwide.

Building on these great taste, we are investing in packaging price and product focused creative to drive further improvement and after applying the insights from our brand growth system. We are using a targeted regional approach to push our presence in the places where we might have the most during the most relevant key seasons.

While there is still room for improvement and we're not yet where we aspire to be I am optimistic about our potential for growth.

We are growing and higher margin channels, where we have concentrated our efforts to drive both growth and profitability recently, adding entertainment live nation as a new customer.

We continue to expand the young catch up through both distribution and innovative offerings. After taking the internet by storm earlier this year highs and award winning new to produce a mustard.

First our new flavors line is specifically designed to attract younger consumers by giving them the bold adventure of flavors they trace.

Carlos Abrams-Rivera: After taking the internet by storm earlier this year, Heinz and award-winning music producer Mustard are teaming up once again with this summer's hottest drop, an unbelievably delicious Heinz Chipotle Honey Mustard. Fans can try this exclusive launch at Buffalo Wild Wings locations across the country before the sauce becomes available at retailers nationwide. brought to market in only four months. This launch not only marked the first national innovation for Heinz Muster in nearly a decade, but is also the brand's first ever co-created innovation in the US.

Our team once again with this summer's hottest dropped.

Second we have revamped our packaging to proudly highlight the fact that Kraft Mac and cheese has been made with no artificial flavors no pressure, but and no di's since 2016.

And unbelievably delicious high supported honey mustard.

Fans can trade as exclusive launch of Buffalo Wild wings locations across the country before the SaaS becomes available our retailers nationwide.

And third recognizing the value is a top priority for our consumers, we introduced value offerings that provide affordable options for families.

Brought to market in only four months this launch not only mark the first national innovation for highest muster in nearly a decade, but is also the brand's first ever co created innovation in the U S.

Carlos Abrams-Rivera: Brought to market in only four months, this launch not only marks the first national innovation for Heinz mustard in nearly a decade, but it is also the brand's first-ever co-created innovation in the US. And finally, our efforts to expand distribution and drive growth are also paying off in other areas. In the second quarter, we grew organic net sales in emerging markets away from home by nearly 10%, a testament to the success of our go-to-market model and the power of the Heinz brand. In the US, we are expanding our Heinz Verified program as part of our ongoing efforts to support the restaurant industry. With 84% of survey participants stating that they would prefer a restaurant that serves Heinz ketchup, we are helping our customers tap into this opportunity.

Brought to market in only four months, this launch not only marks the first national innovation for Heinz mustard in nearly a decade, but it is also the brand's first-ever co-created innovation in the US. And finally, our efforts to expand distribution and drive growth are also paying off in other areas. In the second quarter, we grew organic net sales in emerging markets away from home by nearly 10%, a testament to the success of our go-to-market model and the power of the Heinz brand. In the US, we are expanding our Heinz Verified program as part of our ongoing efforts to support the restaurant industry. With 84% of survey participants stating that they would prefer a restaurant that serves Heinz ketchup, we are helping our customers tap into this opportunity.

We are heading the right direction and position for even a better second half I think additional actions plans are set to take effect.

And finally, our efforts to expand distribution and drive growth are also paying off in other areas in.

Carlos Abrams-Rivera: And finally, our efforts to expand retribution and drive growth are also paying off in other areas. In the second quarter, we grew organic net sales in emerging markets away from home by nearly 10%. a testament to the success of the go-to-market model and the power of the Heinz brand. In the U.S., we are expanding our Heinz Verify program as part of our ongoing efforts to support the restaurant industry. With 84% of survey participants stating that they would prefer a restaurant that serves Heinz ketchup, we are helping our customers tap into this opportunity. By becoming Heinz Verified, restaurants gain exclusive access to a suite of benefits that unlock growth, including promotions, consumer insights, first access to innovation, and a prestigious badge that enhances credibility and boosts traffic.

Powerful combination of our brand grow system and agile ways of working are fueling improvements across our U S retail business and creating a repeatable model that can be successfully apply across all brands in our portfolio.

In the second quarter, we grew organic net sales in emerging markets away from home by nearly 10%.

Asked them into a success of our go to market model and the power of the highest brand.

We see taped elevation in North America, we are seeing growth across important brands and categories as consumers increasingly prioritize protein in their diets. They are turning to a high quality premium on them is to elevate the flavor and enjoyment of the protein which routes.

In the U S. We are expanding our highest verify program as part of our ongoing efforts to support the restaurant industry.

With 84% of survey participants, stating that they would prefer a restaurant deserves Heinz ketchup.

Helping our customers tap into this opportunity by becoming time verified restrooms gained exclusive access to a suite of benefits that unlock growth, including promotions consumer insights first access to innovation and a prestigious bench that enhances grid, the beauty and booth traffic.

This trend is driving meaningful growth for our brands, which takes us up 5% and worship the sauce up 17% as we have great products that enhance protein no matter what type of consumers choose.

Carlos Abrams-Rivera: By becoming Heinz Verified, restaurants gain exclusive access to a suite of benefits that unlock growth, including promotions, consumer insights, first access to innovation, and a prestigious badge that enhances credibility and boosts traffic. Our partnership with Uber Eats has already yielded results, with participating Heinz Verified customers experiencing a 14% lift in orders, and nearly half of those coming from first-time customers. This showcased the unique value that only Heinz can deliver. Our final strategic pillar, emerging markets, generated yet another quarter of growth, increasing top line by nearly 8%. We are well on our way to reaching our long-term algorithm pace of multi-digit growth by the end of the year. We are driving profitable growth in emerging markets through both price and volume mix, while at the same time expanding margins substantially, achieving our highest adjusted operating income margin ever.

By becoming Heinz Verified, restaurants gain exclusive access to a suite of benefits that unlock growth, including promotions, consumer insights, first access to innovation, and a prestigious badge that enhances credibility and boosts traffic. Our partnership with Uber Eats has already yielded results, with participating Heinz Verified customers experiencing a 14% lift in orders, and nearly half of those coming from first-time customers. This showcased the unique value that only Heinz can deliver. Our final strategic pillar, emerging markets, generated yet another quarter of growth, increasing top line by nearly 8%. We are well on our way to reaching our long-term algorithm pace of multi-digit growth by the end of the year. We are driving profitable growth in emerging markets through both price and volume mix, while at the same time expanding margins substantially, achieving our highest adjusted operating income margin ever.

Even in today's environment, where conversations centers around value. We are also seeing consumers prioritize better for you options. We have an array of great tasting affordable products that consumers, who are looking for healthier more sustainable choices can enjoy.

Our partnership with Uber eats has already yielded results with participating hind verified customers experiencing a 14% lift in orders.

Carlos Abrams-Rivera: Our partnership with Uber Eats has already yielded results, with participating Heinz Verified customers experiencing a 14% lift in orders, and nearly half of those coming from first-time customers. This showcases the unique value that only Heinz can deliver.

And nearly half of those coming from first time customers.

Two leading examples of this highest filter tomato ketchup and primal kitchen portfolio grew an impressive 17 and 24% respectively in the second quarter.

This showcase the unique value that only heinz can deliver.

Our final strategic pillar emerging markets generated yet another quarter of growth increasing top line by nearly 8% and we are well on our way to reaching our long term arguably don't pace.

Carlos Abrams-Rivera: Our final strategic pillar, emerging markets, generated yet another quarter of growth, increasing top line by nearly 8%. And we are well on our way to reaching our long-term algorithm pace of strategic growth by the end of the year. We are driving profitable growth in emerging markets through both price and volume mix, while at the same time, expanding margins substantially, achieving our highest adjusted operating income margin ever. And that growth stemmed from leveraging the strengths of our Heinz brand, which grew an impressive 18% in the quarter, as well as expanding distribution through a repeatable go-to-market model.

Building on the success I am incredibly proud of our company led the way in committing to remove artificial colors from our U S portfolio by the end of 2027.

Growth by the end of the year.

We are driving profitable growth in emerging markets through both price and volume mix, while at the same time expanding margins substantially achieving our highest adjusted operating income margin ever.

With 90% of our U S portfolio already free of artificial colors, we're going even further to ensure we deliver on our promise to provide nutritious affordable and delicious food that means.

Broadly the needs of consumers.

And that growth came from leveraging the strength of our highest brand, which grew an impressive 18% in the quarter as well as expanded distribution through our repeatable go to market model.

Carlos Abrams-Rivera: And that growth stemmed from leveraging the strengths of our Heinz brand, which grew an impressive 18% in the quarter, as well as expanding distribution through our repeatable go-to-market model. Heinz is our global anchor, with over $1 billion in sales in emerging markets alone. With our unmatched tomato expertise, we have successfully expanded into new and growing categories, from sauces and condiments to meals, and to markets from Latin America to the Middle East to Asia. And we continue to expand distribution through our go-to-market model, adding approximately 6,000 distribution points compared to Q2 2024. This is why I'm confident that emerging markets and the Heinz brand are well-positioned for continued long-term success. We are fueling our growth engine with two powerful drivers: innovation and marketing. By focusing on delivering superior products, we are creating new innovative opportunities for our brands.

And that growth stemmed from leveraging the strengths of our Heinz brand, which grew an impressive 18% in the quarter, as well as expanding distribution through our repeatable go-to-market model. Heinz is our global anchor, with over $1 billion in sales in emerging markets alone. With our unmatched tomato expertise, we have successfully expanded into new and growing categories, from sauces and condiments to meals, and to markets from Latin America to the Middle East to Asia. And we continue to expand distribution through our go-to-market model, adding approximately 6,000 distribution points compared to Q2 2024. This is why I'm confident that emerging markets and the Heinz brand are well-positioned for continued long-term success. We are fueling our growth engine with two powerful drivers: innovation and marketing. By focusing on delivering superior products, we are creating new innovative opportunities for our brands.

This move is a testament to our company's dedication to innovation exceptional quality.

While consumer satisfaction.

Let's shift our focus to our next strategic pillar global away from home.

Hi, This is a global anchor with over $1 billion in sales in emerging markets alone.

Carlos Abrams-Rivera: Heinz is our global anchor, with over $1 billion in sales in emerging markets alone. With our unmatched tomato expertise, we have successfully expanded into new and growing categories, from sauces and condiments to meals, and to markets, from Latin America to the Middle East to Asia. And we continue to expand distribution through our go-to-market model, adding approximately 6,000 distribution points compared to the second quarter of 2024. This is why I'm confident that emerging markets and the Heinz brand are well positioned for continued long-term success.

Im encouraged by the progress, we're making across key elements of our strategy, notably our ability to maintain share in the U S. In the midst of a challenging environment.

Our unmatched tomato expertise, we have successfully expanded into new and growing categories from sauces, and condiments to meals and to market from Latin America to the middle East to Asia and.

While there is still room for improvement and we are not yet where we aspire to be I am optimistic about our potential for growth.

And we continue to expand distribution through our go to market model, adding approximately 6000 distribution points compare to second quarter of 2024.

We are growing and higher margin channels, where we have concentrated our efforts to drive both growth and profitability recently, adding entertainment live nation as a new customer.

This is why im confident that emerging markets and the <unk> brands are well positioned for continued long term success.

We continued to expand the young catch up through both distribution and innovative offerings after taking the internet by storm earlier this year.

We are fueling our growth engine with two powerful drivers innovation and marketing by focusing on delivering superior products, we are creating new innovative opportunity for our brands. Our Mexican food strategy is a great example, allowing fans to recreate the Taco Bell restaurant experience in their own kitchens.

Carlos Abrams-Rivera: We are fueling our growth engine with two powerful drivers, innovation and marketing. By focusing on delivering superior products, we are creating new innovative opportunities for our brand. Our Mexican food strategy is a great example, allowing fans to recreate the Taco Bell restaurant experience in their own kitchen. Recently, our Canadian team executed a best-in-class launch with national distribution achieved in less than two months, and our 2025 four-year sales target achieved in only four months. In Canada, Taco Bell has already garnered over 20% market share of the Mexican category, and in the U.S., we are seeing a second year of double-digit growth.

<unk> an award winning new to producer mustard are teaming up once again with this summer's hottest dropped an unbelievably delicious high supported honey mustard.

Carlos Abrams-Rivera: Our Mexican food strategy is a great example, allowing fans to recreate the Taco Bell restaurant experience in their own kitchens. Recently, our Canadian team executed a best-in-class launch with national distribution achieved in less than two months, and our 2025 full-year sales target achieved in only four months. In Canada, Taco Bell has already garnered over 20% market share of the Mexican category, and in the US, we are seeing a second year of double-digit growth. We're also expanding into new locations and channels, as well as growing categories. The early success of our single-serve Capri Sun bottle is encouraging. Initial sales continue to beat expectations in both velocities and distribution. For over a century, Heinz has been growing the world's best tomatoes, and the brand's versatility has proven to be a recipe for success.

Our Mexican food strategy is a great example, allowing fans to recreate the Taco Bell restaurant experience in their own kitchens. Recently, our Canadian team executed a best-in-class launch with national distribution achieved in less than two months, and our 2025 full-year sales target achieved in only four months. In Canada, Taco Bell has already garnered over 20% market share of the Mexican category, and in the US, we are seeing a second year of double-digit growth. We're also expanding into new locations and channels, as well as growing categories. The early success of our single-serve Capri Sun bottle is encouraging. Initial sales continue to beat expectations in both velocities and distribution. For over a century, Heinz has been growing the world's best tomatoes, and the brand's versatility has proven to be a recipe for success.

Fans can trade is exclusive launch of Buffalo Wild wings locations across the country before the SaaS becomes available our retailers nationwide.

Recently, our Canadian team executed a best in class launch with National distribution achieved in less than two months and our 2025 full year sales target achieving only four months.

In Canada tackle Bill has already garnered over 20% market share of the Mexican category.

In the U S. We are seeing a second year of double digit growth.

And finally, our efforts to expand distribution and drive growth are also paying off in other areas.

We're also expanding into new occasions, and channels as well as growing categories. The early success of our single serve Capri Sun bottle is encouraging initial sales continue to beat expectations in both velocity and distribution.

Carlos Abrams-Rivera: We're also expanding into new locations and channels, as well as growing categories. The early success of our single-serve Capri Sun bottle is encouraging. Initial sales continue to beat expectations in both velocities and distribution. For over a century, Heinz has been growing the world's best tomatoes, and the brand's versatility has proven to be a recipe for success. With a reputation for superior taste and quality that transcends categories, from protein to size to pasta, we are leveraging these trends to drive growth globally. In the UK, Heinz Pasta Sauce sales have increased by over 20% year-to-date, and we are now expanding to over 8 countries, bringing our rival tomato expertise to new markets.

In the second quarter, we grew organic net sales in emerging markets away from home by nearly 10%.

Test them into a success of our go to market model and the power of the highest brand.

In the U S. We are expanding our highest verify program as part of our ongoing effort to support the restaurant industry.

For over a century Heinz has been growing the world Best Tomatoes, and the brand's versatility has proven to be a recipe for success.

With 84% of survey participants, stating that they would prefer a restaurant deserves Heinz ketchup, we're helping our customers tap into this opportunity by becoming kind verified restaurants gained exclusive access to a suite the benefits that own love growth, including promotions consumer insights.

With a reputation for superior taste and quality that transcends categories from protein to size. The pasta. We are leveraging this strength to drive growth globally in the U K highest pasta sauce sales have increased by over 20% year to date and we are now expanding to over eight countries, bringing our.

Carlos Abrams-Rivera: With a reputation for superior taste and quality that transcends categories, from protein to size to pasta, we are leveraging this strength to drive growth globally. In the UK, Heinz pasta sauce sales have increased by over 20% year-to-date, and we are now expanding to over eight countries, bringing our rival tomato expertise to new markets. We know that in today's environment, consumers want to enjoy the same great taste with better-for-you ingredients. That is why we created Heinz TK Zero, with zero added sugar and salt, and the same irresistible taste consumers know and love. After launching in over 10 countries, our recent renovation in the UK has just hit the shelf. With a new formula, graphics, and creative campaign, we are giving consumers even more reasons to choose Heinz.

With a reputation for superior taste and quality that transcends categories, from protein to size to pasta, we are leveraging this strength to drive growth globally. In the UK, Heinz pasta sauce sales have increased by over 20% year-to-date, and we are now expanding to over eight countries, bringing our rival tomato expertise to new markets. We know that in today's environment, consumers want to enjoy the same great taste with better-for-you ingredients. That is why we created Heinz TK Zero, with zero added sugar and salt, and the same irresistible taste consumers know and love. After launching in over 10 countries, our recent renovation in the UK has just hit the shelf. With a new formula, graphics, and creative campaign, we are giving consumers even more reasons to choose Heinz.

<unk> access to innovation and a prestigious bands that enhances grid, the beauty and booth traffic.

Arrival tomato expertise to new markets.

We know that in today's environment.

Carlos Abrams-Rivera: We know that in today's environment, consumers want to enjoy that same great taste with better-for-you ingredients. That is why we created Heinz TK0, with zero added sugar and salt, and the same irresistible taste consumers know and love. After launching in over 10 countries, our recent renovation in the UK has just hit the With a new formula, graphics, and creative campaign, we are giving consumers even more reasons to choose Heinz.

Our partnership with Uber eats has already yielded results with participating hind verified customers experiencing a 14% lift in orders.

Consumers want to enjoy the same great taste with better for you ingredients that is why we created highest tk's euro.

Zero added sugar and salt and the same irresistible taste consumers know and love.

And nearly half of those coming from first time customers.

This showcase the unique value that only heinz can deliver.

After launching in over 10 countries our leasing the renovation in the UK has just hit the shelf with a new formula graphics and creative campaign, we are giving consumers even more reasons to choose highs.

Our final strategic pillar emerging markets generated yet another quarter of growth increasing top line by nearly 8%.

To support our brands will not only making a big step up in marketing dollars. We are also transforming our approach to drive growth and build brands that resonate with consumers we.

And we are well on our way to reaching our long term arguably them paid.

Carlos Abrams-Rivera: To support our brands, we're not only making a big step up in marketing dollars, we are also transforming our approach to drive growth and build brands that resonate with consumers. We are investing behind product focus created that celebrates our great tasting products and unleashes the power of our brands. Let's face it, if our product is not the hero of our story, we're not telling the right story. So, we have created a playbook that helps us get it right every time. It is all about crafting creative that makes your mouth water, ensures our brand stands up, and reminds consumers of all the moments when our products are the perfect fit.

Carlos Abrams-Rivera: To support our brands, we're not only making a big step up in marketing dollars, we are also transforming our approach to drive growth and build brands that resonate with consumers. We are investing behind product focus, creating that celebrates our great tasting products and unleashes the power of our brands. Let's face it, if our product is not the heart of our story, we're not telling the right story. So we have created a playbook that helps us get it right every time. It is all about crafting creative that makes your mouth water, ensures our brand stands out, and reminds consumers of all the moments when our products are the perfect fit. We're also bringing our brands to life in a way that resonates, and our Oscar Mayer Winnie 500 event was a great example.

To support our brands, we're not only making a big step up in marketing dollars, we are also transforming our approach to drive growth and build brands that resonate with consumers. We are investing behind product focus, creating that celebrates our great tasting products and unleashes the power of our brands. Let's face it, if our product is not the heart of our story, we're not telling the right story. So we have created a playbook that helps us get it right every time. It is all about crafting creative that makes your mouth water, ensures our brand stands out, and reminds consumers of all the moments when our products are the perfect fit. We're also bringing our brands to life in a way that resonates, and our Oscar Mayer Winnie 500 event was a great example.

The growth by the end of the year.

We are investing behind product focus created the celebrates our great tasting products and unleashes the power of our brands, let's face it if our product is not the head of our story, we're not telling the right story. So we have created a playbook that help us getting to right every time.

And that growth stemmed from leveraging the strengths of our highest brand, which grew an impressive 18% in the quarter as well expanded distribution through our repeatable go to market model.

It is all about crafting created a mixture meltwater ensures our brands stands out and remains consumer of all the moments when our products are the perfect fit.

Hi, This is a global anchor with over $1 billion in sales in emerging markets alone.

We're also bringing our brands to life in a way that resonates and Akamai. We need 500 event was a great example, we partnered with the Indianapolis 500, and created an experience that generated unprecedented media coverage with over 6 billion earned impressions and 1 million livestream viewers.

On match tomato expertise, we have successfully expanded into new and growing categories from sauces, and condiments to meals and to market from Latin America to the middle East to Asia.

Carlos Abrams-Rivera: We're also bringing our brands to life in a way that resonates and our Oscar Mayer Weenie 500 event was a great experience. We partnered with the Indianapolis 500 and created an experience that generated unprecedented media coverage with over 6 billion earned impressions and 1 million live stream viewers. It was a huge win for us and it has opened lots of possibilities for future activation.

Carlos Abrams-Rivera: We partnered with the Indianapolis 500 and created an experience that generated unprecedented media coverage, with over 6 billion earned impressions and 1 million livestream viewers. It was a huge win for us, and it has opened lots of possibilities for future activations. And finally, we are leveraging the scale of our portfolio to make a bigger impact during key must-win moments like the upcoming back-to-school season. We know kids love our brands, and we want to make them a part of their daily routine. Across some of our most beloved brands, including Lunchables, Capri Sun, Kraft Mac and Cheese, and Jell-O, we are increasing our media investment by 75%. By bundling several of our favorite brands, we are providing consumers with convenient solutions for any occasion. Before I hand it off to Andre, I would like to emphasize that there are so many great things happening at Kraft Heinz.

We partnered with the Indianapolis 500 and created an experience that generated unprecedented media coverage, with over 6 billion earned impressions and 1 million livestream viewers. It was a huge win for us, and it has opened lots of possibilities for future activations. And finally, we are leveraging the scale of our portfolio to make a bigger impact during key must-win moments like the upcoming back-to-school season. We know kids love our brands, and we want to make them a part of their daily routine. Across some of our most beloved brands, including Lunchables, Capri Sun, Kraft Mac and Cheese, and Jell-O, we are increasing our media investment by 75%. By bundling several of our favorite brands, we are providing consumers with convenient solutions for any occasion. Before I hand it off to Andre, I would like to emphasize that there are so many great things happening at Kraft Heinz.

And we continue to expand distribution through our go to market model, adding approximately 6000 distribution points compare to second quarter of 2024.

It was a huge win for us and he has opened lots of possibilities for future Activations.

This is why im confident that emerging market and the <unk> brands are well positioned for continued long term success.

And finally, we are leveraging the scale of our portfolio to make a bigger impact during key must win moments like the upcoming back to school season, We know kids love our brands and we want to make them a part of the daily routine across some of our most delivered brands, including Lunchables Capri Sun, Kraft Mac, <unk> cheese and yellow.

Carlos Abrams-Rivera: And finally, we are leveraging the scale of our portfolio to make a bigger impact during key must-win moments, like the upcoming back-to-school season. We know kids love our brands, and we want to make them a part of their daily routine. Across some of our most beloved brands, including Lunchables, Capri Sun, Kraft Mac and Cheese, and Jell-O, we are increasing our media investment by 75%. By bundling several of our favorite brands, we are providing consumers with convenient solutions for any occasion.

We are increasing our media investment by 75% by bundling several of our favorite brands, we are providing consumers with convenient solutions. We're in the location.

Recently, our Canadian team executed a best in class launch with National distribution achieved in less than two months and our 2025 full year sales target achieving only four months.

Before I hand, it off to Andrew I would like to emphasize that there are so many great things happening at Kraft Heinz Hi, I'm proud of our progress and the investments, we're making to celebrate our great tasting products and iconic brands.

Carlos Abrams-Rivera: Before I hand it off to Andrew, I would like to emphasize that there are so many great things happening at Kraft Heinz. I am proud of our progress and the investments we're making to celebrate our great tasting products and iconic brands.

Carlos Abrams-Rivera: I am proud of our progress and the investments we're making to celebrate our great tasting products and iconic brands. With that, let me hand it over to Andre to provide more details on our financial results and to discuss our 2025 outlook. Thank you, Carlos. In the second quarter, organic net sales declined 2% for total Kraft Heinz, with price up 0.7 percentage points and volume mix down 2.7 percentage points. In North America, organic net sales declined 3.2%, with growth in our Canada business offset by lower sales in the US. This includes a benefit of 120 basis points driven by the timing of Easter. In our international developed markets, organic net sales declined 2.2%. This was largely driven by sales declines in the UK, primarily driven from pressure in the ambient foods category. In emerging markets, organic net sales were up 7.6%.

I am proud of our progress and the investments we're making to celebrate our great tasting products and iconic brands. With that, let me hand it over to Andre to provide more details on our financial results and to discuss our 2025 outlook.

In Canada tackle Bill has already garnered over 20% market share of the Mexican category and in the U S. We are seeing a second year of double digit growth.

With that let me hand, it over 200 to provide more details on our financial results and to discuss our 2025 outlook.

Andre Maciel: With that, let me hand it over to Andrew to provide more details on our financial results and to discuss our 2025 outlook. Thank you, Carlos. In the second quarter, organic net sales declined 2% for total Kraft Heinz. with price up 0.7 percentage points. volume mix down 2.7 percentage points. North America, organic net sales declined 3.2 percent. with growth in our Canada business offset by lower sales in the U.S.

Thank you Carlos in.

Andre Maciel: Thank you, Carlos. In the second quarter, organic net sales declined 2% for total Kraft Heinz, with price up 0.7 percentage points and volume mix down 2.7 percentage points. In North America, organic net sales declined 3.2%, with growth in our Canada business offset by lower sales in the US. This includes a benefit of 120 basis points driven by the timing of Easter. In our international developed markets, organic net sales declined 2.2%. This was largely driven by sales declines in the UK, primarily driven from pressure in the ambient foods category. In emerging markets, organic net sales were up 7.6%.

In the second quarter organic net sales declined 2% for total Kraft Heinz.

With price up 0.7 percentage points.

For over a century Heinz has been growing the world Best Tomatoes, and the brand's versatility has proven to be a recipe for success.

Volume mix down two seven percentage points.

North America organic net sales declined three 2%.

With a reputation for superior taste and quality that transcends categories from protein to size to pasta. We are leveraging this strength to drive growth globally in the UK highest pasta sauce sales have increased by over 20% year to date and we are now expanding to over eight countries, bringing our.

Growth in our Canada business offset by lower sales in the U S.

This includes a benefit of 120 basis points driven by the timing of Easter.

Andre Maciel: This includes a benefit of 120 basis points given by the timing of. In our international developed markets, organic net sales declined 2.2%. This was largely driven by sales declines in the UK, primarily driven from pressure in the ambient news category. Emerging markets, organic net sales were up 7.6%. Results were driven by both price and volume growth, with double-digit growth in LATAM and Middle East and Africa regions. According to the next slide, total Kraft Heinz adjusted operating income declined 7.5% and our adjusted operating income margin decreased 120 basis points. In North America, adjusted operating income declined 12.5% versus the prior year.

In our international developed markets.

<unk> net sales declined two 2%.

Rivaled tomato expertise to new markets.

This was largely driven by sales declines in the U K, primarily driven from Asher and the ambient music category.

We know that in today's environment.

Consumers want to enjoy the same great taste with better for you ingredients that is why we created highest teekay zero.

The emerging markets organic sales were up seven 6%.

Zero sugar and salt and the same irresistible taste consumers know and love.

Results were driven by both price and volume growth.

Carlos Abrams-Rivera: Results were driven by both price and volume growth, with double-digit growth in LatAm and Middle East and Africa regions. Turning to the next slide, total Kraft Heinz adjusted operating income declined 7.5%, and our adjusted operating income margin decreased 120 basis points. In North America, adjusted operating income declined 12.5% versus the prior year. This was primarily driven by commodity inflation as well as volume declines, which more than offset productivity gains. In international developed markets, adjusted operating income increased 8.2%, and adjusted operating income margin expanded by 100 basis points, mainly due to a combination of effects, productivity savings, and disciplined fixed cost management. In emerging markets, adjusted operating income increased 52.3%, and adjusted operating income margin expanded by 440 basis points. This growth and margin expansion was driven by improvement in Brazil, a mixed benefit as Heinz growth accelerated, and productivity savings.

Results were driven by both price and volume growth, with double-digit growth in LatAm and Middle East and Africa regions. Turning to the next slide, total Kraft Heinz adjusted operating income declined 7.5%, and our adjusted operating income margin decreased 120 basis points. In North America, adjusted operating income declined 12.5% versus the prior year. This was primarily driven by commodity inflation as well as volume declines, which more than offset productivity gains. In international developed markets, adjusted operating income increased 8.2%, and adjusted operating income margin expanded by 100 basis points, mainly due to a combination of effects, productivity savings, and disciplined fixed cost management. In emerging markets, adjusted operating income increased 52.3%, and adjusted operating income margin expanded by 440 basis points. This growth and margin expansion was driven by improvement in Brazil, a mixed benefit as Heinz growth accelerated, and productivity savings.

After launching in over 10 countries. Our recent renovation in the UK has just hit the shelf with a new formula graphics and creative campaign, we are giving consumers even more reasons to choose highs.

Double digit growth in Latam, and Middle East and Africa regions.

Turning to the next slide.

Kraft Heinz adjusted operating income declined seven 5% and our adjusted operating income margin decreased 110 20 basis points.

To support our brands will not only making a big step up in marketing dollars. We are also transforming our approach to drive growth and build brands that resonate with consumers.

In North America, adjusted operating income declined 12, 5% versus the prior year.

We are investing behind product focus created the celebrates our great tasting products and unleashes the power of our brands, let's face it if our product is not the head of our story, we are not telling the right story. So we have created a playbook that help us getting to right every time.

This was primarily driven by commodity inflation as well as volume declines.

Andre Maciel: This was primarily driven by commodity inflation as well as volume decline.

Which more than offset productivity gains.

Andre Maciel: more than a set productivity. In international developed markets, adjusted operating income increased 8.2% and adjusted operating income margin expanded by 100 basis points. mainly due to a combination of effects, productivity savings, and disciplined fixed cost management. In the emerging markets, adjusted operating income increased 52.3 percent and adjusted operating income margin expanded by 440 basis points. This growth and margin expansion was driven by improvement in Brazil, a mixed benefit of Heinz growth accelerated, and productivity savings.

International developed markets.

Adjusted operating income increased eight 2% and adjusted operating income margin expanded by 100 basis points.

It is all about crafting created a mixture meltwater ensures our brand stand up and remains consumer of all the moments when our products are the perfect fit.

Mainly due to a combination of FX productivity savings and disciplined fixed cost management.

We're also bringing our brands to life in a way that resonates and our <unk> 500 event was a great example, we partnered with the Indianapolis 500, and create an experience that generated unprecedented media coverage with over 6 billion earned impressions and 1 million livestream viewers.

In emerging markets adjusted operating income increased 52, 3% and adjusted operating income margin expanded by 440 basis points.

This growth and margin expansion was driven by improvement in Brazil.

It was a huge win for us and he has opened lots of possibilities for future Activations.

Mixed benefit as highest growth accelerated and productivity savings.

And finally, we are leveraging the scale of our portfolio to make a bigger impact during key mass win moments like the upcoming back to school season, We know kids love our brands and we want to make them a part of the daily routine across some of our most beloved brands, including Lunchables Capri Sun, Kraft Mac and cheese in Gela.

As we navigate the current consumer landscape and macroeconomic conditions, our focus remains on delivering value to our consumers.

Andre Maciel: As we navigate the current consumer landscape and macroeconomic conditions, our focus remains on delivering value to our consumers. funded by Unlocking Efficiencies and Optimizing Our Marketing Spend. We are investing in price and supporting our Consistent with our previous expectations, we are increasing our investment in price in 2025. These investments are focused on re-establishing optimal price gaps, increasing trial across renovated products, including Lunchables and Kraft Mac and Cheese. driving distribution gains in away from home, including through our Heinz Verified Loyalty Program. and invest in these strategic areas to drive momentum. It includes ORIDA, where we see solid traction through our national programming, growing the average number of items carried across 30.

Carlos Abrams-Rivera: As we navigate the current consumer landscape and macroeconomic conditions, our focus remains on delivering value to our consumers. Funded by unlocking efficiencies and optimizing our marketing spend, we are investing in price and supporting our brands. Consistent with our previous expectations, we are increasing our investment in price in 2025. These investments are focused on reestablishing optimal price gaps, increasing trial across renovated products, including Lunchables and Kraft Mac and Cheese, driving distribution gains away from home, including through our Heinz Verified loyalty program, and investing in strategic areas to drive momentum. This includes Ore-Ida, where we see solid traction through our national programming, growing the average number of items carried across 30 customers. In addition to increasing our investments in price, we are also increasing investments in marketing, product, R&D, e-commerce, and our sales force in emerging markets.

As we navigate the current consumer landscape and macroeconomic conditions, our focus remains on delivering value to our consumers. Funded by unlocking efficiencies and optimizing our marketing spend, we are investing in price and supporting our brands. Consistent with our previous expectations, we are increasing our investment in price in 2025. These investments are focused on reestablishing optimal price gaps, increasing trial across renovated products, including Lunchables and Kraft Mac and Cheese, driving distribution gains away from home, including through our Heinz Verified loyalty program, and investing in strategic areas to drive momentum. This includes Ore-Ida, where we see solid traction through our national programming, growing the average number of items carried across 30 customers. In addition to increasing our investments in price, we are also increasing investments in marketing, product, R&D, e-commerce, and our sales force in emerging markets.

Funded by unlocking efficiencies and optimizing our marketing spend we are investing in price and supporting our brands.

We are increasing our media investment by 75% by bundling several of our favorite brands, we are providing consumers with convenient solutions. We're in the location.

Consistent with our previous expectations, we are increasing our investment in price in 2025.

These investments are focused on establishing optimal price gaps increasing trial across our innovator products, including Lunchables and Kraft Mac and cheese.

Before I hand, it off to Andrew I would like to emphasize that there are so many great things happening at Kraft Heinz I am proud of our progress and the investments, we're making to celebrate our great tasting products and iconic brands.

Driving distribution gains in away from home, including through our highest verified loyalty program.

And investing in strategic areas to drive momentum.

With that let me hand, it over to Andrew to provide more details on our financial results and to discuss our 2025 outlook.

It includes a rider.

We see solid traction through our national programming growing the average number of items carried across 30 customers.

Thank you Carlos in.

In the second quarter organic net sales declined 2% for total Kraft Heinz.

In addition to increasing our investments in price.

Andre Maciel: In addition to increasing our investments in price, we are also increasing investments in marketing, product, R&D, e-commerce, and our sales force in emerging markets. We expect marketing as a percentage of sales to be at least 4.8%. We anticipate mid-year spend will increase at least 20%. and his incremental spend will be heavily concentrated in North America in the second half of the year. We are also targeting a double-digit increase in returns on net spend by optimizing our media mix and brand allocation.

With price up 0.7 percentage points.

Also increasing investments in marketing product R&D E Commerce, and our sales force in emerging markets.

Volume mix down two seven percentage points.

North America organic net sales declined three 2%.

We expect marketing as a percentage of sales to be at least four 8%.

Carlos Abrams-Rivera: We expect marketing as a percentage of sales to be at least 4.8%. We anticipate media spend will increase at least 20%, and this incremental spend will be heavily concentrated in North America in the second half of the year. We are also targeting a double-digit increase in returns on that spend by optimizing our media mix and brand allocation. We expect these investments will drive a gradual long-term improvement in our top line trends. Our productivity savings are not only enabling us to make the investments I just discussed, but they are also helping us to mitigate inflationary headwinds. Year-to-date, we have generated 4.1% of gross efficiencies as a percentage of cost of goods sold, exceeding the 3.5% goal we had for the year.

We expect marketing as a percentage of sales to be at least 4.8%. We anticipate media spend will increase at least 20%, and this incremental spend will be heavily concentrated in North America in the second half of the year. We are also targeting a double-digit increase in returns on that spend by optimizing our media mix and brand allocation. We expect these investments will drive a gradual long-term improvement in our top line trends. Our productivity savings are not only enabling us to make the investments I just discussed, but they are also helping us to mitigate inflationary headwinds. Year-to-date, we have generated 4.1% of gross efficiencies as a percentage of cost of goods sold, exceeding the 3.5% goal we had for the year.

We have growth in our Canada business offset by lower sales in the U S.

We anticipate mid to expand or increase at least 20%.

This includes a benefit of 120 basis points driven by the timing of Easter.

And this incremental spend will be heavily concentrated in north America in the second half update here.

In our international developed markets.

We are also targeting a double digit increasing returns on that spend by optimizing our media mix and brand location.

<unk> net sales declined two 2%.

This was largely driven by sales declines in the U K.

Mainly driven from Asher and the ambient news category.

We expect that these investments will drive a gradual long term improvement in our top line trends.

Andre Maciel: I expect these investments will drive a gradual, long-term improvement in our top line. Our productivity savings are not only enabling us to make the investments I just discussed, but they're also helping us to mitigate inflationary hazards. year to date, we have generated 4.1% of gross efficiencies as a percentage of cost of goods sold. exceeding the 3.5% goal we have for the year. This achievement marks the fourth consecutive year we are on track to exceed our long-term algorithm of 3%. testament to our team's commitment to continuous improvement.

And emerging markets organic sales were up seven 6%.

Our productivity savings are not only enabling us to make the investments I just discussed, but they're also helping us to mitigate inflationary headwinds.

Results were driven by both price and volume growth.

With double digit growth in Latam and Middle East and Africa regions.

Year to date, we have generated all point to 1% of gross efficiencies as a percentage of cost of goods sold.

Turning to the next slide.

Total Kraft Heinz adjusted operating income declined seven 5% and our adjusted operating income margin decreased 120 basis points.

Exceeding the three 5% goal we have for the year.

This achievement marks the fourth consecutive year, we are on track to exceed our long term algorithm of 3%.

Carlos Abrams-Rivera: This achievement marks the fourth consecutive year we are on track to exceed our long-term algorithm of 3%, a testament to our team's commitment to continuous improvement. Our investments in technology, particularly in AI, have transformed our ways of working. From improving demand forecasting to optimizing factory floor processes, we are driving end-to-end improvement. With $2 billion in efficiencies projected through 2025, we are confident that we will achieve our goal of $2.5 billion by 2027, which will further solidify our position as a leader in operational excellence. Moving to Adjusted Gross Profit Margin, it came in a bit better than expected, declining 140 basis points in Q2. The decline was driven by increased commodity cost inflation, which more than offset the benefit from gross efficiencies.

This achievement marks the fourth consecutive year we are on track to exceed our long-term algorithm of 3%, a testament to our team's commitment to continuous improvement. Our investments in technology, particularly in AI, have transformed our ways of working. From improving demand forecasting to optimizing factory floor processes, we are driving end-to-end improvement. With $2 billion in efficiencies projected through 2025, we are confident that we will achieve our goal of $2.5 billion by 2027, which will further solidify our position as a leader in operational excellence. Moving to Adjusted Gross Profit Margin, it came in a bit better than expected, declining 140 basis points in Q2. The decline was driven by increased commodity cost inflation, which more than offset the benefit from gross efficiencies.

In North America, adjusted operating income declined 12, 5% versus the prior year.

Our testament to our team's commitment to continuous improvement.

This was primarily driven by commodity inflation as well as volume declines.

Our investments in technology.

Andre Maciel: Our investments in technology. particularly in AI have transformed our ways of working. From improving demand forecasting to optimizing factory floor processes, we are driving end-to-end improvements. And with $2 billion in efficiencies projected through 2025, we are confident that we will achieve our goal of $2.5 billion by 2027. which will further solidify our position as a leader in operational action.

<unk> more than offset productivity gains.

Particularly NII have transformed our ways of working.

International developed markets adjusted operating income increased eight 2% and adjusted operating income margin expanded by 100 basis points.

Improving demand forecasting to optimize a factory floor processes, we are driving end to end improvement.

And with $2 billion in efficiencies projected through 2025, we.

Due to a combination of FX.

Savings and disciplined fixed cost management.

We are confident that we will achieve our goal of $2 $5 billion by 2027.

In emerging markets adjusted operating income increased 52, 3% and adjusted operating income margin expanded by 440 basis points.

Would you further solidify our position as a leader in operational excellence.

Moving to adjusted gross profit margin it.

This growth and margin expansion was driven by improvement in Brazil, a mixed benefit of highest growth accelerated and productivity savings.

Andre Maciel: moving to a just-across-profit margin, it came in a bit better than expected. declining 140 basis points in the second quarter. The decline was driven by increased commodity cost inflation, which more than offset the benefit from gross economy. This was better than anticipated due to the timing of additional inflation and trade investments that were expected in the second quarter that are now expected to hit in the third quarter. We continue to demonstrate our strong ability to generate attractive cash flow with year-to-date free cash flow of $1.5 billion. Our year-to-date free cash flow conversion was 96%. up over 30 percentage points versus the prior.

It came in a bit better than expected <expletive>.

Declining 140 basis points in the second quarter.

The decline was driven by increased commodity cost inflation.

As we navigate the current consumer landscape and macroeconomic conditions, our focus remains on delivering value to our consumers.

Which more than offset the benefit from gross efficiencies.

This was better than anticipated due to the timing of additional inflation.

Carlos Abrams-Rivera: This was better than anticipated due to the timing of additional inflation and trade investments that were expected in the second quarter, that are now expected to hit in the third quarter. We continue to demonstrate our strong ability to generate attractive cash flow, with year-to-date free cash flow of $1.5 billion. Our year-to-date free cash flow conversion was 96%, up over 30 percentage points versus the prior year. This was primarily driven by improvements in working capital and other cash management initiatives. In terms of adjusted EPS, we declined 11.5%, or $0.09, versus the second quarter of 2024. This was driven by negative impacts from results of operations and a higher effective tax rate, partially offset by a favorable impact from share repurchase. In the second quarter, we also recognized an approximate $9.3 billion impairment charge.

This was better than anticipated due to the timing of additional inflation and trade investments that were expected in the second quarter, that are now expected to hit in the third quarter. We continue to demonstrate our strong ability to generate attractive cash flow, with year-to-date free cash flow of $1.5 billion. Our year-to-date free cash flow conversion was 96%, up over 30 percentage points versus the prior year. This was primarily driven by improvements in working capital and other cash management initiatives. In terms of adjusted EPS, we declined 11.5%, or $0.09, versus the second quarter of 2024. This was driven by negative impacts from results of operations and a higher effective tax rate, partially offset by a favorable impact from share repurchase. In the second quarter, we also recognized an approximate $9.3 billion impairment charge.

Funded by unlocking efficiencies and optimizing our marketing spend we are investing in price and supporting our brands.

Investments that were expected in the second quarter that are now expected to hit in the third quarter.

Consistent with our previous expectations, we are increasing our investment in price in 2025.

We continue to demonstrate our strong ability to generate attractive cash flow with year to date free cash flow of $1 5 billion.

These investments are focused on reestablishing optimal price gaps increasing trial across our innovator products, including Lunchables and Kraft Mac and cheese.

Our year to date free cash flow conversion was 96%.

Driving distribution gains in away from home, including through our highest verified loyalty program.

Up over 30 percentage points versus the prior year.

This was primarily driven by improvements in working capital and other cash management initiatives.

And investing in strategic areas to drive momentum.

Andre Maciel: And this was primarily driven by improvements in working capital and other cash management initiatives. In terms of adjusted EPS declined 11.5% or 9%. first of the second quarter of 2020. This was driven by negative impact from results of operations and a higher effective tax rate. partially upset by a favorable impact from share report.

This includes a rider.

We see solid traction through our national programming growing the average number of items carried across 30 customers.

In terms of adjusted EPS.

Klein 11, 5% on <unk> versus the second quarter of 2024.

In addition to increasing our investments in price.

This was driven by negative impact from results of operations and a higher effective tax rate.

Also increased investments in marketing product R&D E Commerce, and our sales force in emerging markets.

Partially offset by a favorable impact from share repurchase.

We expect marketing as a percentage of sales to be at least four 8%.

In the second quarter, we also recognized an approximate $9 3 billion impairment charge.

Andre Maciel: In the second quarter, we also recognized an approximate $9.3 billion impairment chart. impairment was driven by a sustained decline in our share price and market capitalization. We have been able to provide consistent cash generation as well as significantly reduce our net leverage ratio, positioning ourselves to better navigate this uncertain environment.

We anticipate media spend increase at least 20%.

And this incremental spend will be heavily concentrated in north America in the second half of the year.

This impairment was driven by a sustained decline in our share price and market capitalization.

Carlos Abrams-Rivera: This impairment was driven by a sustained decline in our share price and market capitalization. We have been able to provide consistent cash generation as well as significantly reduce our net leverage ratio, positioning ourselves to better navigate this uncertain environment. Our healthy balance sheet and strong cash flow generation provide us with financial stability and flexibility. We continue to be excellent stewards of capital. By taking a disciplined approach to financial management, we have created optionality for capital allocation. We will maintain our competitive annual dividend, target net leverage ratio of 3x, and investment-grade status. On top of that, our priorities remain the same. We will invest in organic growth, actively manage our portfolio, and return incremental capital to our stockholders. We recently announced an agreement to sell our infant and specialty food business in Italy.

This impairment was driven by a sustained decline in our share price and market capitalization. We have been able to provide consistent cash generation as well as significantly reduce our net leverage ratio, positioning ourselves to better navigate this uncertain environment. Our healthy balance sheet and strong cash flow generation provide us with financial stability and flexibility. We continue to be excellent stewards of capital. By taking a disciplined approach to financial management, we have created optionality for capital allocation. We will maintain our competitive annual dividend, target net leverage ratio of 3x, and investment-grade status. On top of that, our priorities remain the same. We will invest in organic growth, actively manage our portfolio, and return incremental capital to our stockholders. We recently announced an agreement to sell our infant and specialty food business in Italy.

We are also targeting a double digit increasing returns on that spend by optimizing our media mix and brand on location.

We have been able to provide consistent cash generation as well as significantly reduced our net leverage ratio.

<unk> ourselves to better navigate this uncertain environment.

We expect that these investments will drive a gradual long term improvement in our top line trends.

Our healthy balance sheet and strong cash flow generation provides us with financial stability and flexibility.

Andre Maciel: for Healthy, Balanced... and strong cash flow generation provide us with financial stability and flexibility. We continue to be excellent stewards of capital. By taking a disciplined approach to financial management, we have created optionality for capital. We will maintain our competitive annual dividend, target net leverage ratio of three times, and investment grade stats. On top of that, our priorities remain the same. We will invest in organic growth, actively manage our portfolio, and return incremental capital to our stockholders.

Our productivity savings are not only enabling us to make the investments I just discussed, but they're also helping us to mitigate inflationary headwinds.

We continue to be excellent stewards of capital.

<unk> taken a disciplined approach to financial management, we have created optionality for capital allocation.

Year to date, we have generated 41% of gross efficiencies as a percentage of cost of goods sold.

We will maintain our competitive annual dividend target net leverage ratio of three times and investment grade status.

Exceeding the three 5% goal we have for the year.

This achievement marks the fourth consecutive year, we are on track to exceed our long term algorithm of 3%.

On top of that our priorities remain the same.

We will invest in organic growth actively manage our portfolio and return incremental capital to our stockholders.

A testament to our team's commitment to continuous improvement.

Our investments in technology, particularly NII.

We recently announced an agreement to sell our infant and specialty food business in Italy.

Andre Maciel: We recently announced an agreement to sell our infant and specialty food business in Italy. Transaction is consistent with our strategy to drive profitable growth through our Accelerate platforms throughout the region.

Armed our ways of working.

From improving demand forecasting to optimize a factory floor processes, we are driving end to end improvement.

This transaction is consistent with our strategy to drive profitable growth through our accelerate platforms throughout Europe.

Carlos Abrams-Rivera: This transaction is consistent with our strategy to drive profitable growth through our accelerate platforms throughout Europe, enabling us to fuel investments in core growth areas. Our balance sheet remains strong, with Net Leverage Ratio at our target of approximately three times. Year-to-date, we returned nearly $1.4 billion in capital to stockholders. Of the $1.4 billion returned to stockholders, nearly $1 billion was through our competitive dividend, with a yield that exceeds 5.5%, and approximately $400 million through our share repurchase program. Currently, we have about $1.5 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 reiterating our guidance for the year. We continue to expect Organic Net Sales in the range of -1.5% to -3.5%.

This transaction is consistent with our strategy to drive profitable growth through our accelerate platforms throughout Europe, enabling us to fuel investments in core growth areas. Our balance sheet remains strong, with Net Leverage Ratio at our target of approximately three times. Year-to-date, we returned nearly $1.4 billion in capital to stockholders. Of the $1.4 billion returned to stockholders, nearly $1 billion was through our competitive dividend, with a yield that exceeds 5.5%, and approximately $400 million through our share repurchase program. Currently, we have about $1.5 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 reiterating our guidance for the year. We continue to expect Organic Net Sales in the range of -1.5% to -3.5%.

And with $2 billion in efficiencies projected through 2025, we.

And as you feel investments in our growth areas.

Andre Maciel: enabling us to fuel investments in car growth. Our balance sheet remains strong. met the leverage at our target ratio of approximately three times. near to date, we return nearly $1.4 billion in capital to stock. The $1.4 billion return to stockholders, nearly $1 billion worth through our competitive dividend with a yield that exceeds 5.5 percent. and approximately $400 million through our share repurchase program. Currently, we have about $1.5 billion dollars remaining against our $3 billion dollar authorization.

We are confident that we will achieve our goal of $2 $5 billion by 2027.

Our balance sheet remains strong.

Net leverage at our target ratio of approximately three times.

Which will further solidify our position as a leader in operational excellence.

And year to date, we returned nearly $1 4 billion in capital to stockholders.

Moving to adjusted gross profit margin.

It came in a bit better than expected.

The $1 4 billion return to stockholders.

Declining 140 basis points in the second quarter.

Nearly $1 billion or through our competitive dividend.

The decline was driven by increased commodity cost inflation, which.

We value that exceeds five 5%.

Which more than offset the benefit from gross efficiencies.

And approximately $400 million through our share repurchase program.

This was better than anticipated due to the timing of additional inflation.

Currently we have about $1 5 billion remaining against our $3 billion authorization.

Investments that were expected in the second quarter that are now expected to hit in the third quarter.

As a reminder, our share repurchase program is non programmatic.

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

Function of excess cash and takes into consideration the macroeconomic environment.

We continue to demonstrate our strong ability to generate attractive cash flow with year to date free cash flow of $1 5 billion.

Now turning to our full year 2025 outlook.

Andre Maciel: Now turn to our full year 2025 outline. We are reiterating our guidance for the We continue to expect organic net sales in the range of down 1.5% to down 3.5%. contemplates growth in emerging markets, which is expected to reach a double-digit pace by year-end.

We are reiterating our guidance for the year.

Our year to date free cash flow conversion was 96%.

We continue to expect organic net sales in the range of down one 5% to down three 5%.

Up over 30 percentage points versus the prior year.

This was primarily driven by improvements in working capital and other cash management initiatives.

This contemplates growth in emerging markets, which is expected to reach a double digit pace by year end.

Carlos Abrams-Rivera: This contemplates growth in emerging markets, which is expected to reach a double-digit pace by year-end. It also reflects exiting the year with relatively flat top-line performance in global Away-From-Home and continued improvement in US retail challenge categories. For constant currency adjusted operating income, we continue to expect a decline of 5% to 10%. This includes impact from inflation and tariffs. The wider range reflects a larger degree of uncertainty given the macroeconomic environment. It also reflects varying levels of potential returns on investments and the timing of those returns. Lastly, the range provides us with some flexibility to dial in on incremental investments as deemed appropriate. Our constant currency adjusted operating income expectations include the impact of lapping lower variable compensation 2024, which is an approximate 150 basis point headwind.

This contemplates growth in emerging markets, which is expected to reach a double-digit pace by year-end. It also reflects exiting the year with relatively flat top-line performance in global Away-From-Home and continued improvement in US retail challenge categories. For constant currency adjusted operating income, we continue to expect a decline of 5% to 10%. This includes impact from inflation and tariffs. The wider range reflects a larger degree of uncertainty given the macroeconomic environment. It also reflects varying levels of potential returns on investments and the timing of those returns. Lastly, the range provides us with some flexibility to dial in on incremental investments as deemed appropriate. Our constant currency adjusted operating income expectations include the impact of lapping lower variable compensation 2024, which is an approximate 150 basis point headwind.

In terms of adjusted EPS.

It also reflects exiting the year with relatively flat topline performance in global away from home and continued improvement in U S retail challenge categories.

Andre Maciel: It also reflects exiting the year with relatively flat upline performance in global away from home and continued improvement in U.S. retail challenge category. for Constant Currency Adjusted Operating Income. continue to expect a decline of 5% to 10%. includes impact from inflation and tariffs.

Klein 11, 5% on <unk> versus the second quarter of 2024.

This was driven by a negative impact from results of operations and a higher effective tax rate.

For constant currency adjusted operating income.

We continue to expect a decline of 5% to 10%.

Partially offset by a favorable impact from share repurchase.

This includes the impact from inflation and tariffs.

In the second quarter, we also recognized an approximate $9 3 billion impairment charge.

The wider range reflects a larger degree of uncertainty given the macroeconomic environment.

Andre Maciel: The wider range reflects a larger degree of uncertainty given the macroeconomic environment. It also reflects the varying levels of potential returns on investments and the timing of those returns. Lastly, the range providers with some flexibility to dial in on incremental investments as deemed appropriate. Our constant current adjusted operating income expectations include the impact of lapping lower variable compensation 2024. which is an approximate 150 basis point head. It also contemplates and adjusts a gross profit margin. towards the lower end of down 25 to 75 basis point year over year, driven by inflation and incremental investments in price and product, partially offset by our gross efficiencies, tariff mitigating efforts, and additional price.

This impairment was driven by a sustained decline in our share price and market capitalization.

It also reflects for varying levels of potential returns on the investments and the timing of those returns.

Lastly.

We have been able to provide consistent cash generation as well as significantly reduced our net leverage ratio.

The range provides us with some flexibility to dialing on incremental investments as deemed appropriate.

<unk> ourselves to better navigate this uncertain environment.

Our constant currency adjusted operating income expectations include the impact of lapping lower variable compensation in 2024.

Our healthy balance sheet and strong cash flow generation provides us with financial stability and flexibility.

Which is an approximate 150 basis point headwind.

We continue to be excellent stewards of capital.

It also contemplate on adjusted gross profit margin towards the lower end of down 25% to 75 basis points year over year.

Carlos Abrams-Rivera: It also contemplates an adjusted gross profit margin towards the lower end of down 25 to 75 basis points year-over-year, driven by inflation and incremental investments in price and product, partially offset by our gross efficiencies, tariff mitigation efforts, and additional pricing. We continue to expect adjusted EPS to be in the range of $2.51 to 2.67. Our adjusted EPS expectation contemplates an effective tax rate of approximately 26%, which is a 23% headwind on adjusted EPS year-over-year. From a free cash flow perspective, we expect 2025 to be flat versus prior year, with free cash flow conversion of at least 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. As is customary, our outlook does not reflect any impact from future potential share repurchases.

It also contemplates an adjusted gross profit margin towards the lower end of down 25 to 75 basis points year-over-year, driven by inflation and incremental investments in price and product, partially offset by our gross efficiencies, tariff mitigation efforts, and additional pricing. We continue to expect adjusted EPS to be in the range of $2.51 to 2.67. Our adjusted EPS expectation contemplates an effective tax rate of approximately 26%, which is a 23% headwind on adjusted EPS year-over-year. From a free cash flow perspective, we expect 2025 to be flat versus prior year, with free cash flow conversion of at least 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. As is customary, our outlook does not reflect any impact from future potential share repurchases.

<unk> taken a disciplined approach to financial management, we have created optionality for capital allocation.

Driven by inflation and incremental investments in price and product, partially offset by our gross efficiencies mitigating the efforts and additional pricing.

We will maintain our competitive annual dividend target net leverage ratio of three times and investment grade status.

On top of that our priorities remain the same.

We continue to expect adjusted EPS to be in the range of $2 51 to $2 six to seven.

Andre Maciel: We continue to expect adjusted EPS to be in the range of $2.51 to $2.67. Our adjusted EPS expectation contemplates an effective tax rate of approximately 26%. which is a 23 cent headwind on adjusted EPS year over year.

We will invest in organic growth actively manage our portfolio and to return incremental capital to our stockholders.

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

We recently announced an agreement to sell our infant and specialty food business in Italy.

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

This transaction is consistent with our strategy to drive profitable growth through our accelerate platforms throughout Europe.

From a free cash flow perspective, we expect 2025 to be flat versus prior year.

Andre Maciel: From a free cash flow perspective, we expect 2025 to be flat versus prior year. free cash flow conversion of at least 95%. driven by working capital efficiencies and lower cash outflows for variable compensation. partially upset by the net cash impact of a higher tax.

Naval and asked to fuel investments in our growth areas.

With free cash flow conversion of at least 95%.

Our balance sheet remains strong.

This is driven by working capital efficiencies and lower cash outflows for variable compensation.

Net leverage at our target ratio of approximately three times.

Partially offset by the net cash impact of a higher tax rate.

And year to date, we returned nearly $1 4 billion in capital to stockholders.

As is customary our outlook does not reflect any impact from future potential share repurchase.

Andre Maciel: As is customary, our outlook does not reflect an impact from future potential share reports.

The $1 4 billion return to stockholders, nearly $1 billion or through our competitive dividend.

Looking specifically at the third quarter.

Mr. Neil that exceeds five 5%.

Andre Maciel: looking specifically at the third quarter. Expect year-over-year organic net sales to be in the range of down one to two percent. These reflect an improvement in our underlying business. that is offset by the approximate 100 basis point year-over-year benefit from the timing of Easter we had in the second quarter. We expect our year-over-year adjusted gross profit margin in the third quarter to be comparable to the down 140 basis points we saw in the second quarter. As I mentioned earlier, some incremental inflation and promotions that were originally expected in the second quarter are now hitting in the third quarter.

Carlos Abrams-Rivera: Looking specifically at the third quarter, we expect year-over-year organic net sales to be in the range of down 1% to 2%. This reflects an improvement in our underlying business that is offset by the approximate 100 basis points year-over-year benefit from the timing of Easter we had in the second quarter. We expect our year-over-year adjusted gross profit margin in the third quarter to be comparable to the down 140 basis points we saw in the second quarter. As I mentioned earlier, some incremental inflation and promotions that were originally expected in the second quarter are now hitting in the third quarter. We have a significant amount of investment in SG&A in the third quarter, primarily in marketing, as well as in product, R&D, e-commerce, and our sales force in emerging markets. Our full year outlook gives us flexibility to increase spending further into Q4 as we deem appropriate.

Looking specifically at the third quarter, we expect year-over-year organic net sales to be in the range of down 1% to 2%. This reflects an improvement in our underlying business that is offset by the approximate 100 basis points year-over-year benefit from the timing of Easter we had in the second quarter. We expect our year-over-year adjusted gross profit margin in the third quarter to be comparable to the down 140 basis points we saw in the second quarter. As I mentioned earlier, some incremental inflation and promotions that were originally expected in the second quarter are now hitting in the third quarter. We have a significant amount of investment in SG&A in the third quarter, primarily in marketing, as well as in product, R&D, e-commerce, and our sales force in emerging markets. Our full year outlook gives us flexibility to increase spending further into Q4 as we deem appropriate.

We expect year over year organic net sales to be in the range of down 1% to 2%.

And approximately $400 million through our share repurchase program.

Currently we have about $1 5 billion remaining against our $3 billion authorization.

This reflects an improvement in our underlying business.

That is offset by the approximate 100 basis points year over year benefit from the timing of Easter we had in the second quarter.

As a reminder, our share repurchase program is non programmatic.

Function of excess cash and takes into consideration the macroeconomic environment.

We expect our year over year adjusted gross profit margin in the third quarter to be comparable to the down 140 basis points, we saw in the second quarter.

Now turning to our full year 2025 outlook.

We are reiterating our guidance for the year.

We continue to expect organic net sales in the range of down one 5% to down three 5%.

As I mentioned earlier, some incremental inflation and promotions that were originally expected in the second quarter are now hitting in the third quarter.

This contemplates growth in emerging markets, which is expected to reach a double digit pace by year end.

We have a significant amount of investment in SG&A in the third quarter.

Andre Maciel: We have a significant amount of investment in SG&A in the third quarter. primarily marketing, as well as in product, R&D, e-commerce, and our sales force in emerging markets. Our full-year outlook gives us flexibility to increase spending further into Q4 as we deem appropriate. This anticipated adjusted gross profit margin and year-over-year increase in SG&A lead us to an expected mid-to-high team decline in adjusted operating income versus the prior year in the third quarter.

It also reflects exiting the year with relatively flat top line performance in global away from home and continued improvement in U S retail challenge categories.

Merrily marketing as well as product R&D E Commerce, and our sales force in emerging markets.

Our full year outlook give us flexibility to increase spending further into Q4 as we deem appropriate.

For constant currency adjusted operating income.

We continue to expect a decline of 5% to 10%.

These anticipated adjusted gross profit margin and year over year increase in SG&A leaders to an expected mid to high teens decline in adjusted operating income versus the prior year.

Carlos Abrams-Rivera: This anticipated adjusted gross profit margin and year-over-year increase in SG&A lead us to an expected mid-to-high teen decline in adjusted operating income versus the prior year in Q3. With that, I will pass it back to Carlos for some closing comments. Thank you, Andre. I am proud that we are delivering value through superior, affordable, and accessible products to our consumers. We are executing our commitments by accelerating growth in emerging markets, improving across focus brands in North America retail, and continuing to unlock efficiencies and generating cash, something we know how to do well. We are stepping up investment to drive long-term top-line growth, building on the momentum delivered on the first half of the year. Thank you for joining us and for your interest in Kraft Heinz.

This anticipated adjusted gross profit margin and year-over-year increase in SG&A lead us to an expected mid-to-high teen decline in adjusted operating income versus the prior year in Q3. With that, I will pass it back to Carlos for some closing comments.

This includes impact from inflation and tariffs.

The wider range reflects a larger degree of uncertainty given the macroeconomic environment.

Third quarter.

With that our pass it back to Carlos for some closing comments.

It also reflects some varying levels of potential returns on investments and the timing of those returns.

Carlos Abrams-Rivera: With that, I will pass it back to Carlos for some closing comments. Thank you, Andre. I am proud that we are delivering value through superior, affordable, and accessible products to our consumers. We are executing our commitments by accelerating growth in emerging markets, improving across focus brands in North America retail, and continuing to unlock efficiencies and generating cash, something we know how to do well. We are stepping up investment to drive long-term top-line growth, building on the momentum delivered on the first half of the year.

Carlos Abrams-Rivera: Thank you, Andre. I am proud that we are delivering value through superior, affordable, and accessible products to our consumers. We are executing our commitments by accelerating growth in emerging markets, improving across focus brands in North America retail, and continuing to unlock efficiencies and generating cash, something we know how to do well. We are stepping up investment to drive long-term top-line growth, building on the momentum delivered on the first half of the year. Thank you for joining us and for your interest in Kraft Heinz.

Thank you Andrea I am proud that we are delivering value through superior.

Lastly.

The range provides us with some flexibility to dialing on incremental investments as deemed appropriate.

Portable and accessible products to our consumers we are executing on our commitments by accelerating growth in emerging markets improving across focused brand in North America retail and continuing to look efficiencies and generating cash something we know how to do well.

Our constant currency adjusted operating income expectations include the impact of lapping lower variable compensation in 2024.

Which is an approximate 150 basis point headwind.

We are stepping up investment to drive long term top line growth building on the momentum delivered in the first half of the year. Thank you for joining us and for your interest in Kraft Heinz.

It also contemplate on adjusted gross profit margin.

Carlos Abrams-Rivera: Thank you for joining us and for your interest in Kraft Heinz.

Towards the lower end of down 25 to 75 basis points year over year.

Driven by inflation and incremental investments in price and product, partially offset by a gross efficiencies that will mitigate on their efforts and additional pricing.

We continue to expect adjusted EPS to be in the range of $2 51 to $2 six to seven.

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

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

From a free cash flow perspective, we expect 2025 to be flat versus prior year.

With free cash flow conversion of at least 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.

As is customary our outlook does not reflect any impact from future potential share repurchase.

Looking specifically at the third quarter.

We expect year over year organic net sales to be in the range of down 1% to 2%.

This reflects an improvement in our underlying business.

That is offset by the approximate 100 basis points year over year benefit from the timing of Easter we had in the second quarter.

We expect our year over year adjusted gross profit margin in the third quarter to be comparable to the down 140 basis points, we saw in the second quarter.

As I mentioned earlier, some incremental inflation and promotions that were originally expected in the second quarter are now hitting in the third quarter.

We have a significant amount of investment in SG&A in the third quarter.

Merrily marketing as well as product R&D ecommerce and our sales force in emerging markets.

Our full year outlook give us flexibility to increase spending further into Q4 as we deem appropriate.

These anticipated adjusted gross profit margin and year over year increase in SG&A lead us to an expected mid to high teen decline in adjusted operating income versus the prior year.

Third quarter.

With that our pass it back to Carlos for some closing comments.

Thank you Andrea I am proud that we are delivering value through superior affordable and accessible products to our consumers. We are executing on our commitments by accelerating growth in emerging markets improving across focused brand in North America retail and continuing to look efficiencies in general.

Cash something we know how to do well we.

We are stepping up investment to drive long term top line growth building on the momentum deliver on the first half of the year. Thank you for joining us and for your interest in Kraft Heinz.

Q2 2025 Kraft Heinz Co Earnings Call - Pre-Recorded

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