VANCOUVER, CANADA – Ballard Power Systems (NASDAQ: BLDP; TSX: BLDP) today announced consolidated financial results for the second quarter ended June 30, 2022. All amounts are in U.S. dollars unless otherwise noted and have been prepared in accordance with International Financial Reporting Standards (IFRS).
“We continue to see policy momentum across the globe to support our vision of decreasing our planet’s emissions. We believe our product offering will make a meaningful impact on the energy transition by enabling our customers with zero emission solutions. This vision is at the forefront of our continued innovation and investment in our business and product offering”, said Mr. Randy MacEwen, President and CEO.
Mr. MacEwen remarked, “In the second quarter, our revenue was $20.9 million, and we secured new orders totaling $12.3 million, driven primarily by stationary power generation and repeat bus customers. We saw continued gross margin compression in the quarter and anticipate continued pressure throughout 2022, but we are confident in our plan to expand margins in the mid- to long-term as we transition to commercial scale production. We ended the quarter with a strong cash balance of $1 billion, which continues to support our technology development programs and other strategic growth initiatives.”
“We are encouraged by our continued progress with platform customers as they advance commercialization of zero-emissions fuel cell solutions in a variety of attractive applications and markets. The European bus market is an example of the growing scale of fuel-cell solutions, with public transport operators in Cologne, Germany and West Midlands, UK announcing plans to deploy additional hydrogen fuel cell bus fleets of 100 and over 120, respectively.”
“Given the challenging macro-economic outlook, we have decreased our planned investments in 2022. As a result, we are revising our total operating expense and capital expenditure guidance downwards from $140 to $160 million to $130 to $150 million, and $40 to $60 million to $30 to $50 million, respectively,” Mr. MacEwen stated. “Notwithstanding the current macro-economic context, we remain confident on the long-term opportunities for hydrogen and fuel cells. We see converging trends driving the energy transition, including net-zero ambitions, low-cost renewable energy, and energy security. At Ballard, we are well positioned with leading fuel cell technology, strong customer and partner relationships, and a solid balance sheet.”
Q2 2022 Financial Highlights
(all comparisons are to Q2 2021 unless otherwise noted)
Total revenue was $20.9 million in the quarter, down 16% year-over-year.
Power Products revenue of $13.5 million decreased 14%, driven by lower shipments of fuel cell products.
Heavy-Duty revenues of $10.7 million decreased by a nominal amount.
Stationary Power Generation revenues of $2.0 million decreased 28% as a result of lower sales of stationary power generation fuel cell modules, stacks, products and service revenues.
Material Handling revenues of $0.8 million decreased 58%, primarily as a result of lower shipments to Plug Power.
Technology Solutions revenue of $7.4 million decreased 20% due primarily to decreased amounts earned on the Weichai Ballard JV and Audi programs.
Gross margin was (11)% in the quarter, a decrease of 26-points, driven by a combination of a shift to lower overall product margin and service revenue mix including the impacts of pricing strategy, higher fixed overhead costs, higher warranty provisions and adjustments, increase in supply costs, and inventory adjustments.
Total Operating Expenses and Cash Operating Costs3 were $38.5 million and $32.1 million in the quarter, respectively, an increase of 58% and 59%, respectively. Increases were driven primarily by higher expenditure on research, technology and product development activities. Costs were also higher as a result of increased general and administrative expenses.
Adjusted EBITDA3 was ($35.0) million, compared to ($19.7) million in Q2 2021, primarily a result of the decrease in gross margin and increase in Cash Operating Costs.
Ballard received approximately $12.3 million of new orders in Q2, and delivered orders valued at $20.9 million, resulting in an Order Backlog of approximately $91.2 million at end-Q2.
The 12-month Order Book was $61.4 million at end-Q2, a decrease of $4.3 million from the end of Q1 2022.
Order Backlog ($M)
Order Backlog at End-Q1 2022
Orders Received in Q2 2022
Orders Delivered in Q2 2022
Order Backlog at End-Q2 2022
Total Fuel Cell Products & Services
$99.8
$12.3
$20.9
$91.2
2022 Outlook
Ballard is revising its 2022 Total Operating Expense4 and Capital Expenditure5 guidance downwards as follows:
2022
Previous Guidance
Revised Guidance
Total Operating Expense4
$140 – $160 million
$130 – $150 million
Capital Expenditure5
$40 – $60 million
$30 – $50 million
Q2 2022 Financial Summary
For a more detailed discussion of Ballard Power Systems’ second quarter 2022 results, please see the company’s financial statements and management’s discussion & analysis, which are available at www.ballard.com/investors, www.sedar.com and www.sec.gov/edgar.shtml.
Conference Call
Ballard will hold a conference call on Wednesday, August 10, 2022 at 8:00 a.m. Pacific Time (11:00 a.m. Eastern Time) to review second quarter 2022 operating results. The live call can be accessed by dialing +1.604.638.5340. Alternatively, a live audio and webcast can be accessed through a link on Ballard’s homepage (www.ballard.com). Following the call, the audio webcast and presentation materials will be archived in the ‘Earnings, Interviews & Presentations’ area of the ‘Investors’ section of Ballard’s website (www.ballard.com/investors).
About Ballard Power Systems
Ballard Power Systems’ (NASDAQ: BLDP; TSX: BLDP) vision is to deliver fuel cell power for a sustainable planet. Ballard zero-emission PEM fuel cells are enabling electrification of mobility, including buses, commercial trucks, trains, marine vessels, and stationary power. To learn more about Ballard, please visit www.ballard.com.
Important Cautions Regarding Forward-Looking Statements
This release contains forward-looking statements concerning the hydrogen economy and markets for our products and the effects of governmental regulations on such markets, expected revenues, operating expenses, capital expenditures, corporate development activities, impacts of investments in manufacturing and R&D capabilities and market growth, and our carbon emissions goals. These forward-looking statements reflect Ballard’s current expectations as contemplated under section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Any such statements are based on Ballard’s assumptions relating to its financial forecasts and expectations regarding its product development efforts, manufacturing capacity, and market demand. For a detailed discussion of the factors and assumptions that these statements are based upon, and factors that could cause our actual results or outcomes to differ materially, please refer to Ballard’s most recent management discussion & analysis. Other risks and uncertainties that may cause Ballard’s actual results to be materially different include general economic and regulatory changes, detrimental reliance on third parties, successfully achieving our business plans and achieving and sustaining profitability. For a detailed discussion of these and other risk factors that could affect Ballard’s future performance, please refer to Ballard’s most recent Annual Information Form. These forward-looking statements are provided to enable external stakeholders to understand Ballard’s expectations as at the date of this release and may not be appropriate for other purposes. Readers should not place undue reliance on these statements and Ballard assumes no obligation to update or release any revisions to them, other than as required under applicable legislation.
Further Information
Kate Charlton +1.604.453.3939, or
Endnotes
1 We report our results in the single operating segment of Fuel Cell Products and Services. Our Fuel Cell Products and Services segment consists of the sale and service of PEM fuel cell products for our power product markets of Heavy Duty Motive (consisting of bus, truck, rail and marine applications), Material Handling and Stationary Power Generation, as well as the delivery of Technology Solutions, including engineering services, technology transfer and the license and sale of our extensive intellectual property portfolio and fundamental knowledge for a variety of fuel cell applications.
2 The UAV market has been classified as a discontinued operation in our third quarter of 2020 consolidated condensed financial statements. As such, the assets of the UAV market have been classified as assets held for sale as of September 30, 2020. Furthermore, the historic operating results of the UAV market for 2020 have been removed from continuing operating results and are instead presented separately in the statement of comprehensive income as income from discontinued operations.
3 Note that Cash Operating Costs, EBITDA, and Adjusted EBITDA are non-GAAP measures. Non-GAAP measures do not have any standardized meaning prescribed by GAAP and therefore are unlikely to be comparable to similar measures presented by other companies. Ballard believes that Cash Operating Costs, EBITDA, and Adjusted EBITDA assist investors in assessing Ballard’s operating performance. These measures should be used in addition to, and not as a substitute for, net income (loss), cash flows and other measures of financial performance and liquidity reported in accordance with GAAP. For a reconciliation of Cash Operating Costs, EBITDA, and Adjusted EBITDA to the Consolidated Financial Statements, please refer to the tables below.
Cash Operating Costs measures operating expenses excluding stock-based compensation expense, depreciation and amortization, impairment losses or recoveries on trade receivables, restructuring charges, acquisition related costs, the impact of unrealized gains or losses on foreign exchange contracts, and financing charges. EBITDA measures net loss from continuing operations excluding finance expense, income taxes, depreciation of property, plant and equipment, and amortization of intangible assets. Adjusted EBITDA adjusts EBITDA for stock-based compensation expense, transactional gains and losses, asset impairment charges, finance and other income, the impact of unrealized gains or losses on foreign exchange contracts, and acquisition related costs.
4 Total Operating Expenses refer to the measure reported in accordance with IFRS.
5 Capital Expenditure is defined as Additions to property, plant and equipment and Investment in other intangible assets as disclosed in the Consolidated Statements of Cash Flows
Disclaimer This document contains forward-looking statements which are based on the current estimates and assumptions made by the assembly team of SiLLC. Forward-looking statements are characterized by the use of words such as expect, intend, plan, predict, assume, believe, estimate, anticipate, forecast and similar formulations. Such statements are not to be understood as in any way guaranteeing that those expectations will turn out to be accurate. Future performance and the results actually achieved by SiLLC and its affiliated groups depend on a number of risks and uncertainties and may therefore differ materially from the forward-looking statements. Many of these factors are outside SiLLC‘s control and cannot be accurately estimated in advance, such as the future economic environment and the actions of competitors and others involved in the marketplace. SiLLC neither plans nor undertakes to update forward-looking statements.
All transaction are carrying out by SiLLC, a private portfolio management assembly. This document is not an offer of securities for sale or investment advisory services. This document contains general information only and is not intended to represent general or specific investment advice. Past performance is not a reliable indicator of future results and targets are not guaranteed.Certain statements and forecasted data are based on current expectations, current market and economic conditions, estimates, projections, opinions and beliefs of SiLLC and/or its members. Due to various risks and uncertainties, actual results may differ materially from those reflected or contemplated in such forward-looking statements or in any of the case studies or forecasts. All references to SiLLC’s advisory activities relates to SiLLC International.
According to the final, unaudited half-year figures, the Deutsche Rohstoff Group generated sales of EUR 72.2 million, EBITDA of EUR 64.0 million and consolidated net income of EUR 32.5 million in the first half of the year.
Net profit EUR 32.5 million/Equity up by EUR 44.6 million/Operating cash flow at EUR 62,6 million
Mannheim. According to the final, unaudited half-year figures, the Deutsche Rohstoff Group generated sales of EUR 72.2 million (previous year EUR 38.8 million), EBITDA of EUR 64.0 million (previous year EUR 39.9 million) and consolidated net income of EUR 32.5 million (previous year EUR 17.5 million) in the first half of the year. Operating cash flow from oil production in the USA and income from the investment portfolio amounted to EUR 62,6 million (previous year EUR 36.8 million).
The very good half-year result also has a positive impact on the Group’s balance sheet. Cash and cash equivalents* increased to around EUR 79.8 million as of 30 June 2022. Net debt** has fallen to EUR 54.5 million. At the end of 2021, it had still amounted to EUR 84.1 million. Equity of EUR 124.7 million is EUR 44.6 million higher than equity at 31 December 2021. The equity ratio at the half-year point was 36.9 percent (31 December 2021: 30.2 percent).
Assuming an average oil price of USD 92 per barrel from April to December 2022, the company expects sales of around EUR 140 to 150 million and EBITDA of EUR 120 to 130 million as part of this increased price scenario. If the oil price averages around USD 85 during this period, revenues of EUR 130 to 140 million and EBITDA of around EUR 110 to 120 million are expected. The full guidance is available at https://rohstoff.de/en/guidance/.
The four US-subsidiaries produced an average of 9,386 BOE per day in the first half of the year (previous year 7,801 BOE per day), for a total production of 1,689,532 BOE (previous year 1,412,019 BOE). Crude oil accounted for 930,658 barrels (previous year 660,682 barrels), with natural gas and condensates accounting for the remainder. All volumes represent the Group’s net share. Cub Creek plans to commence a drilling program in Wyoming in the fourth quarter, and in addition, the production start of the Oxy Joint Venture in Wyoming will be another operational highlight.
The share and bond portfolio, in particular the sale of a portion of Northern Oil & Gas shares, also had a positive impact on consolidated net income of EUR 6.2 million. Further income of EUR 2.2 million resulted from the development of the EUR/USD exchange rate in the first half of the year.
The half-year report of Deutsche Rohstoff will be available shortly here.
The Management Board of Deutsche Rohstoff AG will hold a Web-Call (in German) on the first half-year results on Thursday, 11 August 2022 at 10:30 a.m. Interested investors can register for the call here.
Mannheim, 10 August 2022
* The definition of “cash and cash equivalents” was expanded to include trade receivables and payables: Cash, securities held as fixed and current assets and trade receivables, less trade payables.
** Net debt: Bond and bank liabilities less cash and cash equivalents.
Deutsche Rohstoff identifies, develops and disposes of attractive raw material deposits in North America, Australia and Europe. The focus is on the development of oil and gas deposits in the USA. Metals such as gold and tungsten round off the portfolio. Further information at www.rohstoff.de
************************
Disclaimer All transaction are carrying out by SiLLC, a private portfolio management assembly. This document is not an offer of securities for sale or investment advisory services. This document contains general information only and is not intended to represent general or specific investment advice. Past performance is not a reliable indicator of future results and targets are not guaranteed. Certain statements and forecasted data are based on current expectations, current market and economic conditions, estimates, projections, opinions and beliefs of SiLLC and/or its members. Due to various risks and uncertainties, actual results may differ materially from those reflected or contemplated in such forward-looking statements or in any of the case studies or forecasts. All references to SiLLC’s advisory activities relates to SiLLC Assembly International.
Provides Full Year 2023 Outlook for Organic Net Sales(1)(2), Adjusted EBITDA(1)(2), and Adjusted EPS(1)(2)
Fourth Quarter Highlights
Net sales increased 10.0%, with Organic Net Sales(1) growth of 10.4%.
Net income/(loss) increased 447.9%. Adjusted EBITDA(1) increased 8.6%.
Diluted EPS was $0.72, up 442.9%. Adjusted EPS(1) was $0.85, up 7.6%.
PITTSBURGH & CHICAGO–The Kraft Heinz Company (Nasdaq: KHC) (“Kraft Heinz” or the “Company”) today reported financial results for the fourth quarter and full year 2022.
“2022 was an incredible year for Kraft Heinz, delivering strong results and ending the fourth quarter with solid momentum that positions us well for 2023,” said Kraft Heinz CEO and Chair of the Board Miguel Patricio. “We continue to see strength driven by our key growth pillars, while at the same time prioritizing investments in our brands and delivering on efficiencies.”
“The results were even more impressive considering the difficult operating environment, with record levels of inflation and supply chain disruptions, to which our teams responded with agility. I am very proud of the entire Kraft Heinz team for a strong year, while continuing to execute on our long-term strategy. We are confident that all the work we’ve done thus far positions us well to accelerate profitable growth and generate attractive returns for our stockholders.”
Net Sales In millions
Net Sales
Organic Net Sales(1)
December 31, 2022
December 25, 2021
% Chg vs PY
YoY Growth Rate
Price
Volume/ Mix
For the Three Months Ended
North America
$
5,684
$
5,208
9.1%
9.2%
14.2 pp
(5.0) pp
International
1,697
1,501
13.1%
14.3%
18.5 pp
(4.2) pp
Kraft Heinz
$
7,381
$
6,709
10.0%
10.4%
15.2 pp
(4.8) pp
For the Year Ended
North America
$
20,340
$
20,351
(0.1)%
9.2%
13.0 pp
(3.8) pp
International
6,145
5,691
8.0%
11.6%
13.5 pp
(1.9) pp
Kraft Heinz
$
26,485
$
26,042
1.7%
9.8%
13.2 pp
(3.4) pp
Net Income/(Loss) and Diluted EPS
In millions, except per share data
For the Three Months Ended
For the Year Ended
December 31, 2022
December 25, 2021
% Chg vs PY
December 31, 2022
December 25, 2021
% Chg vs PY
Gross profit
$
2,364
$
2,162
9.3%
$
8,122
$
8,682
(6.5)%
Operating income/(loss)
1,226
(20)
6,517.7%
3,634
3,460
5.0%
Net income/(loss)
887
(255)
447.9%
2,368
1,024
131.3%
Net income/(loss) attributable to common shareholders
890
(257)
447.2%
2,363
1,012
133.4%
Diluted EPS
$
0.72
$
(0.21)
442.9%
$
1.91
$
0.82
132.9%
Adjusted EPS(1)
0.85
0.79
7.6%
2.78
2.93
(5.1)%
Adjusted EBITDA(1)
$
1,743
$
1,606
8.6%
$
6,003
$
6,371
(5.8)%
Q4 2022 Financial Summary
Net sales increased 10.0 percent versus the year-ago period to $7.4 billion, including a positive 7.1 percentage point impact from a 53rd week, a negative 4.6 percentage point impact from divestitures and acquisitions, and a negative 2.9 percentage point impact from currency. Organic Net Sales increased 10.4 percent versus the prior year period. Price increased 15.2 percentage points versus the prior year period, with increases in both reportable segments primarily driven by price increases to mitigate rising input costs. Volume/mix declined 4.8 percentage points versus the prior year period, with declines in both reportable segments that were primarily driven by supply constraints and elasticity impacts from pricing actions.
Net income/(loss) increased 447.9 percent versus the year-ago period to $887 million, primarily driven by non-cash impairment losses in the prior year period, lower interest expense primarily due to debt extinguishment costs in the prior year period, and higher Adjusted EBITDA versus the prior year period. These factors were partially offset by higher tax expense, an accrual related to the previously disclosed securities class action lawsuit, and unfavorable changes in other expense/(income). Adjusted EBITDA increased 8.6 percent versus the year-ago period to $1.7 billion, including a positive 7.4 percentage point impact from a 53rd week, a negative 4.9 percentage point impact from divestitures and acquisitions, and a negative 2.1 percentage point impact from currency. The remaining year-over-year increase in Adjusted EBITDA is a result of higher pricing and efficiency gains that more than offset higher supply chain costs (reflecting inflationary pressure in procurement, logistics, and manufacturing costs), higher commodity costs (mainly in dairy, packaging materials, energy, and soybean and vegetable oils), as well as unfavorable volume/mix.
Diluted EPS was $0.72, up 442.9% versus the prior year period, driven by the net income/(loss) factors discussed above. Adjusted EPS(1) was $0.85, up 7.6 percent versus the prior year period, primarily driven by results of ongoing operations, a 53rd week, and lower interest expense versus the prior year period. These factors were partially offset by a negative $0.05 impact from divestitures and unfavorable changes in other expense/(income).
FY 2022 Financial Summary
Net Sales increased 1.7 percent versus the year-ago period to $26.5 billion, including a negative 8.0 percentage point impact from divestitures and acquisitions, a negative 2.0 percentage point impact from currency, and a positive 1.9 percentage point impact from a 53rd week. Organic Net Sales increased 9.8 percent versus the prior year period. Price increased 13.2 percentage points versus the prior year period, with increases in both reportable segments primarily driven by price increases to mitigate rising input costs. Volume/mix declined 3.4 percentage points versus the prior year period, with declines in both reportable segments that were primarily driven by supply constraints and elasticity impacts from pricing actions.
Net income/(loss) increased 131.3 percent versus the year-ago period to $2.4 billion, driven by lower interest expense primarily due to debt extinguishment costs in the prior year period and lower non-cash impairment losses in the current year period. These factors were partially offset by lower Adjusted EBITDA versus the prior year period and an accrual related to the previously disclosed securities class action lawsuit. Adjusted EBITDA decreased 5.8 percent versus the year-ago period to $6.0 billion, including a negative 6.1 percentage point impact from divestitures and acquisitions, a negative 1.3 percentage point impact from currency, and a positive 1.9 percentage point impact from a 53rd week. The remaining year-over-year decrease in Adjusted EBITDA is primarily a result of higher supply chain costs (reflecting inflationary pressure in procurement, logistics, and manufacturing costs), higher commodity costs (mainly in dairy, packaging materials, soybean and vegetable oils, energy, and meat), and unfavorable volume/mix. These impacts were offset by higher pricing and efficiency gains.
Diluted EPS was $1.91, up 132.9 percent versus the prior year period, primarily driven by the net income/(loss) factors discussed above. Adjusted EPS was $2.78, down 5.1 percent versus the prior year period, primarily driven by a negative $0.26 impact from divestitures, higher taxes on adjusted earnings, and unfavorable changes in other expense/(income). These factors were partially offset by lower interest expense and a 53rd week.
Year-to-date net cash provided by operating activities was $2.5 billion, down 54.0 percent versus the year-ago period, primarily driven by one-time proceeds from the sale of licenses in connection with the Cheese Transaction in the prior year period, higher cash outflows for inventories primarily related to stock rebuilding, increased input costs, and the acceleration of payments to suppliers attributed to the wind-down of existing product financing arrangements, and lower Adjusted EBITDA. These impacts were partially offset by lower cash outflows for interest, primarily due to prior year reduction of long-term debt. Year-to date Free Cash Flow(1) was $1.6 billion, down 65.2 percent versus the comparable prior year period due to the same drivers of net cash provided by operating activities.
Outlook
The Company expects 2023 Organic Net Sales(1)(2) growth of 4 to 6 percent versus 2022. Constant Currency Adjusted EBITDA(1)(2) growth from 2022 to 2023 is expected to range between 2 to 4 percent, or 4 to 6 percent when excluding the impact from the 53rd week in 2022.
The Company anticipates high single-digit inflation for the year, with pricing and gross efficiencies contributing to Adjusted Gross Profit Margin(1)(2) recovery. Adjusted Gross Profit Margin expansion is expected to fund incremental investments across technology, marketing, and people.
Adjusted EPS(1)(2) is expected to be $2.67 to $2.75, which includes approximately a $0.04 negative impact from expected unfavorable changes in non-cash pension and post-retirement benefits, and a $0.04 currency headwind at current foreign exchange rates. The expected 2023 year-over-year Adjusted EPS performance reflects a negative $0.06 impact from lapping the 53rd week in 2022.
End Notes
(1)
Organic Net Sales, Adjusted EBITDA, Constant Currency Adjusted EBITDA, Adjusted EPS, Adjusted Gross Profit Margin and Free Cash Flow are non-GAAP financial measures. Please see discussion of non-GAAP financial measures and the reconciliations at the end of this press release for more information.
(2)
Guidance for Organic Net Sales, Constant Currency Adjusted EBITDA, Adjusted EPS, and Adjusted Gross Margin is provided on a non-GAAP basis only because certain information necessary to calculate the most comparable GAAP measure is unavailable due to the uncertainty and inherent difficulty of predicting the occurrence and the future financial statement impact of such items impacting comparability, including, but not limited to, the impact of currency, acquisitions and divestitures, divestiture-related license income, restructuring activities, deal costs, unrealized losses/(gains) on commodity hedges, impairment losses, certain non-ordinary course legal and regulatory matters, equity award compensation expense, nonmonetary currency devaluation, and debt prepayment and extinguishment (benefit)/costs, among other items. Therefore, as a result of the uncertainty and variability of the nature and amount of future adjustments, which could be significant, the Company is unable to provide a reconciliation of these measures without unreasonable effort.
Earnings Discussion and Webcast Information
A pre-recorded management discussion of The Kraft Heinz Company’s fourth quarter and full year 2022 earnings is available at ir.kraftheinzcompany.com. The Company will host a live question and answer session beginning today at 9:00 a.m. Eastern Standard Time. A webcast of the session will be accessible at ir.kraftheinzcompany.com.
ABOUT THE KRAFT HEINZ COMPANY
We are driving transformation at The Kraft Heinz Company (Nasdaq: KHC), inspired by our Purpose, Let’s Make Life Delicious. Consumers are at the center of everything we do. With 2022 net sales of approximately $26 billion, we are committed to growing our iconic and emerging food and beverage brands on a global scale. We leverage our scale and agility to unleash the full power of Kraft Heinz across a portfolio of six consumer-driven product platforms. As global citizens, we’re dedicated to making a sustainable, ethical impact while helping feed the world in healthy, responsible ways. Learn more about our journey by visiting www.kraftheinzcompany.com or following us on LinkedIn and Twitter.
Forward-Looking Statements
This press release contains a number of forward-looking statements. Words such as “provide,” “deliver,’ “see,” “drive,” “accelerate,” “execute,” “generate,” “anticipate,” “believe,” “continue,” “could,” “expect,” “plan,” “will,” “guidance,” and “outlook,” and variations of such words and similar future or conditional expressions are intended to identify forward-looking statements. Examples of forward-looking statements include, but are not limited to, statements regarding the Company’s plans, impacts of accounting standards and guidance, growth, legal matters, taxes, costs and cost savings, impairments, dividends, expectations, investments, innovations, opportunities, capabilities, execution, initiatives, and pipeline. These forward-looking statements reflect management’s current expectations and are not guarantees of future performance and are subject to a number of risks and uncertainties, many of which are difficult to predict and beyond the Company’s control.
Important factors that may affect the Company’s business and operations and that may cause actual results to differ materially from those in the forward-looking statements include, but are not limited to, operating in a highly competitive industry; the Company’s ability to correctly predict, identify, and interpret changes in consumer preferences and demand, to offer new products to meet those changes, and to respond to competitive innovation; changes in the retail landscape or the loss of key retail customers; changes in the Company’s relationships with significant customers or suppliers, or in other business relationships; the Company’s ability to maintain, extend, and expand its reputation and brand image; the Company’s ability to leverage its brand value to compete against private label products; the Company’s ability to drive revenue growth in its key product categories or platforms, increase its market share, or add products that are in faster-growing and more profitable categories; product recalls or other product liability claims; climate change and legal or regulatory responses; the Company’s ability to identify, complete, or realize the benefits from strategic acquisitions, divestitures, alliances, joint ventures, or investments; the Company’s ability to successfully execute its strategic initiatives; the impacts of the Company’s international operations; the Company’s ability to protect intellectual property rights; the Company’s ability to realize the anticipated benefits from prior or future streamlining actions to reduce fixed costs, simplify or improve processes, and improve its competitiveness; the influence of the Company’s largest stockholder; the Company’s level of indebtedness, as well as our ability to comply with covenants under our debt instruments; additional impairments of the carrying amounts of goodwill or other indefinite-lived intangible assets; foreign exchange rate fluctuations; volatility in commodity, energy, and other input costs; volatility in the market value of all or a portion of the commodity derivatives we use; compliance with laws and regulations and related legal claims or regulatory enforcement actions; failure to maintain an effective system of internal controls; a downgrade in the Company’s credit rating; the impact of sales of the Company’s common stock in the public market; the Company’s ability to continue to pay a regular dividend and the amounts of any such dividends; disruptions in the global economy caused by geopolitical conflicts, including the ongoing conflict between Russia and Ukraine; unanticipated business disruptions and natural events in the locations in which the Company or the Company’s customers, suppliers, distributors, or regulators operate; economic and political conditions in the United States and in various other nations where the Company does business (including inflationary pressures, general economic slowdown, or recession); changes in the Company’s management team or other key personnel and the Company’s ability to hire or retain key personnel or a highly skilled and diverse global workforce; our dependence on information technology and systems, including service interruptions, misappropriation of data, or breaches of security; increased pension, labor, and people-related expenses; changes in tax laws and interpretations; volatility of capital markets and other macroeconomic factors; and other factors. For additional information on these and other factors that could affect the Company’s forward-looking statements, see the Company’s risk factors, as they may be amended from time to time, set forth in its filings with the Securities and Exchange Commission. The Company disclaims and does not undertake any obligation to update, revise, or withdraw any forward-looking statement in this press release, except as required by applicable law or regulation.
Non-GAAP Financial Measures
The non-GAAP financial measures provided in this press release should be viewed in addition to, and not as an alternative for, results prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).
To supplement the financial information provided, the Company has presented Organic Net Sales, Adjusted EBITDA, Constant Currency Adjusted EBITDA, Adjusted EPS, Free Cash Flow, Adjusted Gross Profit, and Adjusted Net Income/(Loss), which are considered non-GAAP financial measures. The non-GAAP financial measures presented may differ from similarly titled non-GAAP financial measures presented by other companies, and other companies may not define these non-GAAP financial measures in the same way. These measures are not substitutes for their comparable GAAP financial measures, such as net sales, net income/(loss), gross profit, diluted earnings per share (“EPS”), net cash provided by/(used for) operating activities, or other measures prescribed by GAAP, and there are limitations to using non-GAAP financial measures.
Management uses these non-GAAP financial measures to assist in comparing the Company’s performance on a consistent basis for purposes of business decision making by removing the impact of certain items that management believes do not directly reflect the Company’s underlying operations. The Company believes:
Organic Net Sales, Adjusted EBITDA, Constant Currency Adjusted EBITDA, Adjusted Gross Profit, Adjusted Net Income/(Loss), and Adjusted EPS provide important comparability of underlying operating results, allowing investors and management to assess the Company’s operating performance on a consistent basis; and
Free Cash Flow provides a measure of the Company’s core operating performance, the cash-generating capabilities of the Company’s business operations, and is one factor used in determining the amount of cash available for debt repayments, dividends, acquisitions, share repurchases, and other corporate purposes.
Management believes that presenting the Company’s non-GAAP financial measures is useful to investors because it (i) provides investors with meaningful supplemental information regarding financial performance by excluding certain items, (ii) permits investors to view performance using the same tools that management uses to budget, make operating and strategic decisions, and evaluate historical performance, and (iii) otherwise provides supplemental information that may be useful to investors in evaluating the Company’s results. The Company believes that the presentation of these non-GAAP financial measures, when considered together with the corresponding GAAP financial measures and the reconciliations to those measures, provides investors with additional understanding of the factors and trends affecting the Company’s business than could be obtained absent these disclosures.
Definitions
Organic Net Sales is defined as net sales excluding, when they occur, the impact of currency, acquisitions and divestitures, and a 53rd week of shipments. The Company calculates the impact of currency on net sales by holding exchange rates constant at the previous year’s exchange rate, with the exception of highly inflationary subsidiaries, for which the Company calculates the previous year’s results using the current year’s exchange rate.
Adjusted EBITDA is defined as net income/(loss) from continuing operations before interest expense, other expense/(income), provision for/(benefit from) income taxes, and depreciation and amortization (excluding restructuring activities); in addition to these adjustments, the Company excludes, when they occur, the impacts of divestiture-related license income (e.g., income related to the sale of licenses in connection with the Cheese Transaction), restructuring activities, deal costs, unrealized losses/(gains) on commodity hedges, impairment losses, certain non-ordinary course legal and regulatory matters, and equity award compensation expense (excluding restructuring activities). The Company also presents Adjusted EBITDA on a constant currency basis (Constant Currency Adjusted EBITDA). The Company calculates the impact of currency on Adjusted EBITDA by holding exchange rates constant at the previous year’s exchange rate, with the exception of highly inflationary subsidiaries, for which it calculates the previous year’s results using the current year’s exchange rate.
Adjusted Gross Profit, Adjusted Net Income/(Loss), and Adjusted EPS are defined as gross profit, net income/(loss), and diluted earnings per share, respectively, excluding, when they occur, the impacts of restructuring activities, deal costs, unrealized losses/(gains) on commodity hedges, impairment losses, certain non-ordinary course legal and regulatory matters, losses/(gains) on the sale of a business, other losses/(gains) related to acquisitions and divestitures (e.g., tax and hedging impacts), nonmonetary currency devaluation (e.g., remeasurement gains and losses), debt prepayment and extinguishment (benefit)/costs, and certain significant discrete income tax items (e.g., U.S. and non-U.S. tax reform), and including when they occur, adjustments to reflect preferred stock dividend payments on an accrual basis.
Free Cash Flow is defined as net cash provided by/(used for) operating activities less capital expenditures. The use of this non-GAAP measure does not imply or represent the residual cash flow for discretionary expenditures since the Company has certain non-discretionary obligations such as debt service that are not deducted from the measure.
Schedule 1
The Kraft Heinz Company
Consolidated Statements of Income
(in millions, except per share data)
(Unaudited)
For the Three Months Ended
For the Year Ended
December 31, 2022
December 25, 2021
December 31, 2022
December 25, 2021
Net sales
$
7,381
$
6,709
$
26,485
$
26,042
Cost of products sold
5,017
4,547
18,363
17,360
Gross profit
2,364
2,162
8,122
8,682
Selling, general and administrative expenses, excluding impairment losses
1,138
891
3,575
3,588
Goodwill impairment losses
—
53
444
318
Intangible asset impairment losses
—
1,238
469
1,316
Selling, general and administrative expenses
1,138
2,182
4,488
5,222
Operating income/(loss)
1,226
(20)
3,634
3,460
Interest expense
217
604
921
2,047
Other expense/(income)
(42)
(104)
(253)
(295)
Income/(loss) before income taxes
1,051
(520)
2,966
1,708
Provision for/(benefit from) income taxes
164
(265)
598
684
Net income/(loss)
887
(255)
2,368
1,024
Net income/(loss) attributable to noncontrolling interest
(3)
2
5
12
Net income/(loss) attributable to common shareholders
$
890
$
(257)
$
2,363
$
1,012
Basic shares outstanding
1,226
1,225
1,226
1,224
Diluted shares outstanding
1,233
1,225
1,235
1,236
Per share data applicable to common shareholders:
Basic earnings/(loss) per share
$
0.73
$
(0.21)
$
1.93
$
0.83
Diluted earnings/(loss) per share
0.72
(0.21)
1.91
0.82
Schedule 2
The Kraft Heinz Company
Reconciliation of Net Sales to Organic Net Sales
For the Three Months Ended
(dollars in millions)
(Unaudited)
Net Sales
Currency
Acquisitions and Divestitures
53rd Week
Organic Net Sales
Price
Volume/Mix
December 31, 2022
North America
$
5,684
$
(35)
$
—
$
357
$
5,362
International
1,697
(143)
71
97
1,672
Kraft Heinz
$
7,381
$
(178)
$
71
$
454
$
7,034
December 25, 2021
North America
$
5,208
$
—
$
297
$
—
$
4,911
International
1,501
12
26
—
1,463
Kraft Heinz
$
6,709
$
12
$
323
$
—
$
6,374
Year-over-year growth rates
North America
9.1%
(0.7) pp
(6.6) pp
7.2 pp
9.2%
14.2 pp
(5.0) pp
International
13.1%
(10.5) pp
2.6 pp
6.7 pp
14.3%
18.5 pp
(4.2) pp
Kraft Heinz
10.0%
(2.9) pp
(4.6) pp
7.1 pp
10.4%
15.2 pp
(4.8) pp
Schedule 3
The Kraft Heinz Company
Reconciliation of Net Sales to Organic Net Sales
For the Year Ended
(dollars in millions)
(Unaudited)
Net Sales
Currency
Acquisitions and Divestitures
53rd Week
Organic Net Sales
Price
Volume/Mix
December 31, 2022
North America
$
20,340
$
(67)
$
—
$
357
$
20,050
International
6,145
(430)
279
97
6,199
Kraft Heinz
$
26,485
$
(497)
$
279
$
454
$
26,249
December 25, 2021
North America
$
20,351
$
—
$
1,990
$
—
$
18,361
International
5,691
26
109
—
5,556
Kraft Heinz
$
26,042
$
26
$
2,099
$
—
$
23,917
Year-over-year growth rates
North America
(0.1)%
(0.4) pp
(10.8) pp
1.9 pp
9.2%
13.0 pp
(3.8) pp
International
8.0%
(8.1) pp
2.8 pp
1.7 pp
11.6%
13.5 pp
(1.9) pp
Kraft Heinz
1.7%
(2.0) pp
(8.0) pp
1.9 pp
9.8%
13.2 pp
(3.4) pp
Schedule 4
The Kraft Heinz Company
Reconciliation of Net Income/(Loss) to Adjusted EBITDA
(dollars in millions)
(Unaudited)
For the Three Months Ended
For the Year Ended
December 31, 2022
December 25, 2021
December 31, 2022
December 25, 2021
Net income/(loss)
$
887
$
(255)
$
2,368
$
1,024
Interest expense
217
604
921
2,047
Other expense/(income)
(42)
(104)
(253)
(295)
Provision for/(benefit from) income taxes
164
(265)
598
684
Operating income/(loss)
1,226
(20)
3,634
3,460
Depreciation and amortization (excluding restructuring activities)
246
233
922
910
Divestiture-related license income
(15)
(4)
(56)
(4)
Restructuring activities
36
32
74
84
Deal costs
1
3
9
11
Unrealized losses/(gains) on commodity hedges
(2)
29
63
17
Impairment losses
—
1,291
999
1,634
Certain non-ordinary course legal and regulatory matters
210
—
210
62
Equity award compensation expense
41
42
148
197
Adjusted EBITDA
$
1,743
$
1,606
$
6,003
$
6,371
Segment Adjusted EBITDA:
North America
$
1,550
$
1,445
$
5,284
$
5,576
International
284
245
1,017
1,066
General corporate expenses
(91)
(84)
(298)
(271)
Adjusted EBITDA
$
1,743
$
1,606
$
6,003
$
6,371
Schedule 5
The Kraft Heinz Company
Reconciliation of Adjusted EBITDA to Constant Currency Adjusted EBITDA
For the Three Months Ended
(dollars in millions)
(Unaudited)
Adjusted EBITDA
Currency
Constant Currency Adjusted EBITDA
December 31, 2022
North America
$
1,550
$
(8)
$
1,558
International
284
(26)
310
General corporate expenses
(91)
2
(93)
Kraft Heinz
$
1,743
$
(32)
$
1,775
December 25, 2021
North America
$
1,445
$
—
$
1,445
International
245
2
243
General corporate expenses
(84)
—
(84)
Kraft Heinz
$
1,606
$
2
$
1,604
Year-over-year growth rates
North America
7.3%
(0.5) pp
7.8%
International
16.0%
(12.0) pp
28.0%
General corporate expenses
8.3%
(3.2) pp
11.5%
Kraft Heinz
8.6%
(2.1) pp
10.7%
Schedule 6
The Kraft Heinz Company
Reconciliation of Adjusted EBITDA to Constant Currency Adjusted EBITDA
For the Year Ended
(dollars in millions)
(Unaudited)
Adjusted EBITDA
Currency
Constant Currency Adjusted EBITDA
December 31, 2022
North America
$
5,284
$
(14)
$
5,298
International
1,017
(71)
1,088
General corporate expenses
(298)
9
(307)
Kraft Heinz
$
6,003
$
(76)
$
6,079
December 25, 2021
North America
$
5,576
$
—
$
5,576
International
1,066
6
1,060
General corporate expenses
(271)
—
(271)
Kraft Heinz
$
6,371
$
6
$
6,365
Year-over-year growth rates
North America
(5.2)%
(0.2) pp
(5.0)%
International
(4.6)%
(7.2) pp
2.6%
General corporate expenses
9.8%
(3.5) pp
13.3%
Kraft Heinz
(5.8)%
(1.3) pp
(4.5)%
Schedule 7
The Kraft Heinz Company
Reconciliation of GAAP Results to Non-GAAP Results
(dollars in millions)
(Unaudited)
For the Three Months Ended
December 31, 2022
Gross profit
Selling, general and administrative expenses
Operating income/ (loss)
Interest expense
Other expense/ (income)
Income/ (loss) before income taxes
Provision for/ (benefit from) income taxes
Net income/(loss)
Net income/(loss) attributable to noncontrolling interest
Net income/(loss) attributable to common shareholders
Diluted EPS
GAAP Results
$
2,364
$
1,138
$
1,226
$
217
$
(42)
$
1,051
$
164
$
887
$
(3)
$
890
$
0.72
Items Affecting Comparability
Restructuring activities
12
(24)
36
—
(1)
37
9
28
—
28
0.02
Deal Costs
—
(1)
1
—
—
1
1
—
—
—
—
Unrealized losses/(gains) on commodity hedges
(2)
—
(2)
—
—
(2)
(1)
(1)
—
(1)
—
Certain non-ordinary course legal and regulatory matters
—
(210)
210
—
—
210
49
161
—
161
0.13
Losses/(gains) on sale of business
—
—
—
—
24
(24)
(15)
(9)
—
(9)
(0.01)
Nonmonetary currency devaluation
—
—
—
—
(1)
1
—
1
—
1
—
Debt prepayment and extinguishment (benefit)/costs
—
—
—
26
—
(26)
(7)
(19)
—
(19)
(0.01)
Adjusted Non-GAAP Results
$
2,374
$
1,048
$
0.85
Schedule 8
The Kraft Heinz Company
Reconciliation of GAAP Results to Non-GAAP Results
(dollars in millions)
(Unaudited)
For the Three Months Ended
December 25, 2021
Gross profit
Selling, general and administrative expenses
Operating income/ (loss)
Interest expense
Other expense/ (income)
Income/ (loss) before income taxes
Provision for/ (benefit from) income taxes
Net income/(loss)
Net income/(loss) attributable to noncontrolling interest
Net income/(loss) attributable to common shareholders
Diluted EPS
GAAP Results
$
2,162
$
2,182
$
(20)
$
604
$
(104)
$
(520)
$
(265)
$
(255)
$
2
$
(257)
$
(0.21)
Items Affecting Comparability
Restructuring activities
9
(22)
31
—
(1)
32
8
24
—
24
0.02
Deal Costs
—
(3)
3
—
—
3
1
2
—
2
—
Unrealized losses/(gains) on commodity hedges
29
—
29
—
—
29
7
22
—
22
0.02
Impairment losses
—
(1,291)
1,291
—
—
1,291
290
1,001
—
1,001
0.81
Losses/(gains) on sale of business
—
—
—
—
33
(33)
66
(99)
—
(99)
(0.08)
Nonmonetary currency devaluation
—
—
—
—
4
(4)
—
(4)
—
(4)
—
Debt prepayment and extinguishment (benefit)/costs
—
—
—
(346)
—
346
68
278
—
278
0.23
Adjusted Non-GAAP Results
$
2,200
$
969
$
0.79
Schedule 9
The Kraft Heinz Company
Reconciliation of GAAP Results to Non-GAAP Results
(dollars in millions)
(Unaudited)
For the Year Ended
December 31, 2022
Gross profit
Selling, general and administrative expenses
Operating income/ (loss)
Interest expense
Other expense/ (income)
Income/ (loss) before income taxes
Provision for/ (benefit from) income taxes
Net income/(loss)
Net income/(loss) attributable to noncontrolling interest
Net income/(loss) attributable to common shareholders
Diluted EPS
GAAP Results
$
8,122
$
4,488
$
3,634
$
921
$
(253)
$
2,966
$
598
$
2,368
$
5
$
2,363
$
1.91
Items Affecting Comparability
Restructuring activities
27
(47)
74
—
—
74
18
56
—
56
0.05
Deal Costs
—
(9)
9
—
—
9
4
5
—
5
—
Unrealized losses/(gains) on commodity hedges
63
—
63
—
—
63
15
48
—
48
0.04
Impairment losses
86
(913)
999
—
—
999
132
867
—
867
0.70
Certain non-ordinary course legal and regulatory matters
—
(210)
210
—
—
210
49
161
—
161
0.13
Losses/(gains) on sale of business
—
—
—
—
25
(25)
(8)
(17)
—
(17)
(0.01)
Other losses/(gains) related to acquisitions and divestitures
—
—
—
—
38
(38)
(9)
(29)
—
(29)
(0.02)
Nonmonetary currency devaluation
—
—
—
—
(17)
17
—
17
—
17
0.01
Debt prepayment and extinguishment (benefit)/costs
—
—
—
38
—
(38)
(3)
(35)
—
(35)
(0.03)
Adjusted Non-GAAP Results
$
8,298
$
3,441
$
2.78
Schedule 10
The Kraft Heinz Company
Reconciliation of GAAP Results to Non-GAAP Results
(dollars in millions)
(Unaudited)
For the Year Ended
December 25, 2021
Gross profit
Selling, general and administrative expenses
Operating income/ (loss)
Interest expense
Other expense/ (income)
Income/ (loss) before income taxes
Provision for/ (benefit from) income taxes
Net income/(loss)
Net income/(loss) attributable to noncontrolling interest
Net income/(loss) attributable to common shareholders
Diluted EPS
GAAP Results
$
8,682
$
5,222
$
3,460
$
2,047
$
(295)
$
1,708
$
684
$
1,024
$
12
$
1,012
$
0.82
Items Affecting Comparability
Restructuring activities
13
(70)
83
—
(1)
84
20
64
—
64
0.05
Deal Costs
—
(11)
11
—
—
11
7
4
—
4
—
Unrealized losses/(gains) on commodity hedges
17
—
17
—
—
17
4
13
—
13
0.01
Impairment losses
—
(1,634)
1,634
—
—
1,634
310
1,324
—
1,324
1.07
Certain non-ordinary course legal and regulatory matters
—
(62)
62
—
—
62
—
62
—
62
0.05
Losses/(gains) on sale of business
—
—
—
—
44
(44)
(225)
181
—
181
0.15
Debt prepayment and extinguishment (benefit)/costs
—
—
—
(917)
—
917
189
728
—
728
0.59
Certain significant discrete income tax items
—
—
—
—
—
—
(235)
235
—
235
0.19
Adjusted Non-GAAP Results
$
8,712
$
3,635
$
2.93
Schedule 11
The Kraft Heinz Company
Key Drivers of Change in Adjusted EPS
(Unaudited)
For the Three Months Ended
December 31, 2022
December 25, 2021
$ Change
Key drivers of change in Adjusted EPS:
Results of operations(a)(b)
$
0.95
$
0.87
$
0.08
Results of divested operations
—
0.05
(0.05)
53rd week
0.06
—
0.06
Interest expense
(0.16)
(0.18)
0.02
Other expense/(income)
0.02
0.05
(0.03)
Effective tax rate
(0.01)
—
(0.01)
Effect of dilutive equity awards(c)
(0.01)
—
(0.01)
Adjusted EPS
$
0.85
$
0.79
$
0.06
(a)
Includes non-cash amortization of definite-lived intangible assets, which accounted for a negative impact to Adjusted EPS from results of operations of $0.05 for the three months ended December 31, 2022 and $0.04 for the three months ended December 25, 2021.
(b)
Includes divestiture-related license income, which accounted for a benefit to Adjusted EPS from results of operations of $0.01 for the three months ended December 31, 2022.
(c)
Represents the impact of excluding the dilutive equity awards for the three months ended December 25, 2021, as their inclusion would have had an anti-dilutive effect on EPS due to net losses attributable to common shareholders for the same period.
Schedule 12
The Kraft Heinz Company
Key Drivers of Change in Adjusted EPS
(Unaudited)
For the Year Ended
December 31, 2022
December 25, 2021
$ Change
Key drivers of change in Adjusted EPS:
Results of operations(a)(b)
$
3.26
$
3.25
$
0.01
Results of divested operations
0.01
0.27
(0.26)
53rd week
0.06
—
0.06
Interest expense
(0.63)
(0.76)
0.13
Other expense/(income)(c)
0.14
0.17
(0.03)
Effective tax rate
(0.06)
—
(0.06)
Adjusted EPS
$
2.78
$
2.93
$
(0.15)
(a)
Includes non-cash amortization of definite-lived intangible assets, which accounted for a negative impact to Adjusted EPS from results of operations of $0.18 in 2022 and $0.16 in 2021.
(b)
Includes divestiture-related license income, which accounted for a benefit to Adjusted EPS from results of operations of $0.04 in 2022.
(c)
Includes non-cash amortization of prior service credits, which accounted for a benefit to Adjusted EPS from other expense/(income) of $0.01 in 2022 and 2021.
Schedule 13
The Kraft Heinz Company
Consolidated Balance Sheets
(in millions, except per share data)
(Unaudited)
December 31, 2022
December 25, 2021
ASSETS
Cash and cash equivalents
$
1,040
$
3,445
Trade receivables, net
2,120
1,957
Inventories
3,651
2,729
Prepaid expenses
240
136
Other current assets
842
716
Assets held for sale
4
11
Total current assets
7,897
8,994
Property, plant and equipment, net
6,740
6,806
Goodwill
30,833
31,296
Intangible assets, net
42,649
43,542
Other non-current assets
2,394
2,756
TOTAL ASSETS
$
90,513
$
93,394
LIABILITIES AND EQUITY
Commercial paper and other short-term debt
$
6
$
14
Current portion of long-term debt
831
740
Trade payables
4,848
4,753
Accrued marketing
749
804
Interest payable
264
268
Income taxes payable
136
541
Other current liabilities
2,194
1,944
Total current liabilities
9,028
9,064
Long-term debt
19,233
21,061
Deferred income taxes
10,152
10,536
Accrued postemployment costs
144
205
Long-term deferred income
1,477
1,534
Other non-current liabilities
1,609
1,542
TOTAL LIABILITIES
41,643
43,942
Redeemable noncontrolling interest
40
4
Equity:
Common stock, $0.01 par value
12
12
Additional paid-in capital
51,834
53,379
Retained earnings/(deficit)
489
(1,682)
Accumulated other comprehensive income/(losses)
(2,810)
(1,824)
Treasury stock, at cost
(847)
(587)
Total shareholders’ equity
48,678
49,298
Noncontrolling interest
152
150
TOTAL EQUITY
48,830
49,448
TOTAL LIABILITIES AND EQUITY
$
90,513
$
93,394
Schedule 14
The Kraft Heinz Company
Consolidated Statements of Cash Flows
(in millions)
(Unaudited)
For the Year Ended
December 31, 2022
December 25, 2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income/(loss)
$
2,368
$
1,024
Adjustments to reconcile net income/(loss) to operating cash flows:
Depreciation and amortization
933
910
Amortization of postemployment benefit plans prior service costs/(credits)
(14)
(7)
Divestiture-related license income
(56)
(4)
Equity award compensation expense
148
197
Deferred income tax provision/(benefit)
(278)
(1,042)
Postemployment benefit plan contributions
(23)
(27)
Goodwill and intangible asset impairment losses
913
1,634
Nonmonetary currency devaluation
17
—
Loss/(gain) on sale of business
(25)
(44)
Proceeds from sale of license
—
1,587
Loss/(gain) on extinguishment of debt
(38)
917
Other items, net
7
(187)
Changes in current assets and liabilities:
Trade receivables
(228)
87
Inventories
(1,121)
(144)
Accounts payable
152
408
Other current assets
(314)
(32)
Other current liabilities
28
87
Net cash provided by/(used for) operating activities
2,469
5,364
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures
(916)
(905)
Payments to acquire business, net of cash acquired
(481)
(74)
Settlement of net investment hedges
208
(28)
Proceeds from sale of business, net of cash disposed and working capital adjustments
88
5,014
Other investing activities, net
10
31
Net cash provided by/(used for) investing activities
(1,091)
4,038
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments of long-term debt
(1,465)
(6,202)
Debt prepayment and extinguishment benefit/(costs)
10
(924)
Proceeds from issuance of commercial paper
228
—
Repayments of commercial paper
(228)
—
Dividends paid
(1,960)
(1,959)
Other financing activities, net
(299)
(259)
Net cash provided by/(used for) financing activities
(3,714)
(9,344)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash
(69)
(30)
Cash, cash equivalents, and restricted cash
Net increase/(decrease)
(2,405)
28
Balance at beginning of period
3,446
3,418
Balance at end of period
$
1,041
$
3,446
Schedule 15
The Kraft Heinz Company
Reconciliation of Net Cash Provided By/(Used for) Operating Activities to Free Cash Flow
(in millions)
(Unaudited)
For the Year Ended
December 31, 2022
December 25, 2021
Net cash provided by/(used for) operating activities
$
2,469
$
5,364
Capital expenditures
(916)
(905)
Free Cash Flow
$
1,553
$
4,459
Contacts
Alex Abraham (media)
Anne-Marie Megela (investors)
************************
Disclaimer All transaction are carrying out by SiLLC, a private portfolio management assembly. This document is not an offer of securities for sale or investment advisory services. This document contains general information only and is not intended to represent general or specific investment advice. Past performance is not a reliable indicator of future results and targets are not guaranteed. Certain statements and forecasted data are based on current expectations, current market and economic conditions, estimates, projections, opinions and beliefs of SiLLC and/or its members. Due to various risks and uncertainties, actual results may differ materially from those reflected or contemplated in such forward-looking statements or in any of the case studies or forecasts. All references to SiLLC’s advisory activities relates to SiLLC Assembly International.
We use cookies on our website to give you the most relevant experience by remembering your preferences and repeat visits. By clicking “Accept”, you consent to the use of ALL the cookies.
This website uses cookies to improve your experience while you navigate through the website. Out of these cookies, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may have an effect on your browsing experience.
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.
