Greetings, and welcome to The Kraft Heinz Business Update Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I'll now turn the conference over to your host, Ms. Anne-Marie Megela, Head of Global Investor Relations. Thank you. You may begin. Thank you, and welcome everyone. During today's call, we will make forward-looking statements regarding the proposed separation, including in relation to the timing and structure of separation, the characteristics of the separated businesses, and the expected benefits of the separation. These statements are based on how we see things today, and the actual results may differ materially due to risk and uncertainties. Please see the cautionary statements and risk factors contained in today's earnings release, which accompanies this call, as well as our most recent 10-K, 10-Q, and 8-K filings for more information regarding these risks and uncertainties. Additionally, we may 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 available on our website at ir.kraftheinzcompany.com under news and events for a discussion of our non-GAAP financial measures and reconciliations to the comparable GAAP financial measures. I will now hand it over to our Chief Executive Officer, Carlos Abrams-Rivera, for opening comments. Thank you, Anne-Marie, and welcome everyone. Today, we announce an exciting milestone for The Kraft Heinz and the next step in our transformation journey, separating into two scale-focused companies, each better positioned to compete and win in today's environment. Following a thorough evaluation of potential strategic transactions, we have determined that separating into two standalone companies offers the most compelling opportunity to gain focus, improve performance, and unlock long-term value for all Kraft Heinz shareholders. The Global Taste Elevation Company will be a global leader in taste elevation and shelf-stable meals. It will be positioned to drive leading growth with iconic brands and local jewels across attractive categories and geographies. The North American Grocery Company will be a scaled portfolio of North America staples and is expected to generate substantial, reliable free cash flow through operational efficiency across stable growth categories and beloved brands. The separation will provide both companies with more strategic, operational, and geographic focus, enabling us to dedicate the right level of attention and resources to all areas of business, allowing each respective brand portfolio to reach its full potential. Reduced operational complexity drives further efficiencies and industry-leading margins. Customized capital allocation based on the strategic ambition of each company accelerates performance and retains financial flexibility to consider strategic transactions. We expect the separation to be completed in the second half of 2026. In connection with the strategic review and the Board's unanimous decision to separate, Miguel Patricio will become our Executive Chairman. He will work closely with me to prepare the organization for the separation while our leadership team and I run and transform the business. Miguel has joined us today along with Andre Maciel to answer your questions. With that, operator, let's open the call for questions. Thank you. If you'd like to ask your question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. To allow for as many questions as possible, we ask that you each keep to one question and one follow-up. Thank you. Our first question comes from the line of Andrew Lazar with Barclays. Please proceed with your question. Great, thanks so much. Good morning, everybody. Morning, buddy. I realize it might be a bit early to get too specific, but I'm curious maybe what top-line growth profile do you envision for each company, and what assumption does that embed for the average category growth in which each of the two entities will play? Maybe, Andre, if you want to start that. Sure. Thanks for the question, Andrew. Look, as you said, it's early to talk about expectations for each one of the companies and that obviously will come later down the process. What I can tell you is if you look historically on the industry growth in the U.S., in the categories we play, typically, growth is around 2%. The taste elevation categories typically grow a little bit more, 50bps- 100 bps, and the other categories grow a little bit less. That's one indication. If you look at our current long-term growth algorithm, 2%- 3%, one percentage point of growth comes from the North America accelerate. As you noted, part of the accelerate platforms will be part of the North American Grocery Company. If we were to translate that into both companies today, you'll see the Global Taste Elevation Company in the upper range of our current long-term growth algorithm and the North American Grocery Company at very low single-digit growth. Great. Very helpful. Thank you. I guess, more broadly, separations like these, as we know, can be time-consuming and costly with respect to the synergies and sort of standalone public company costs and whatnot. I guess, what is it that sort of pushed the board and management, you know, over the edge, so to speak, to sort of go ahead with this plan? Was it any sort of change in maybe external industry factors that you see as sort of like different than maybe historically in the industry or more Kraft Heinz Company specific or sort of both? Thanks so much. Let me take that, Andrew. Let me reframe that a little bit. Let me go back to May. At that time, you know, we announced that our board was conducting the strategic review that we have been doing for a number of months to make sure that we find ways in which we can unlock that value within the company. As a company, the reality is that we have made strong progress in our strategy, but the complexity of our business has impacted that ability to realize the full strength of our brands and operations. You know, as part of the conclusion of this process, we strongly believe that the sharpened strategic operational focus of both companies now will be able to drive stronger performance and sustain that performance over time. The way we see it, this is the right thing to do for The Kraft Heinz. This is the right thing to do for our shareholders, and this is the right opportunity for us now to kind of repaint a new future for our company. Thank you. Great, thanks so much. Thank you. Our next question comes from the line of Peter Galbo with Bank of America. Please proceed with your question. Hey, good morning, Carlos and Andre. Thanks for taking the question. Morning, Peter. Morning. I wanted to maybe dive a little bit more into what drove the decision to keep Kraft Mac & Cheese with Global Taste Elevation Company. I think it was probably the one, you know, major brand that isn't going with North American Grocery Company that maybe doesn't fit. Maybe you can just help us understand kind of what drove that decision from either a scale perspective, a manufacturing perspective, anything additional detail-wise. Thank you, Peter. If you go back to the strategy we laid out in CACNED in February of 2024, at that time, we were very clear that we saw this group of platforms that were part of our accelerated platform. If you remember, Kraft Mac & Cheese was part of that accelerated platform. It's a place in which the category over the last five years has been growing about 3% CAGR. Today, we have about 70% market share, and it has very attractive margins. As I speak to you today, none of that has changed. For us, as we look at the opportunity of how do we think about those companies, it definitely fits to what we want to try to do with the Global Taste Elevation Company and allows us to then make sure that both across a U.S. business with Kraft Mac & Cheese and Kraft Dinners in Canada allows us to continue to drive the momentum that we have built over the years. I think for us, it's always been about being thoughtful about what is the right perimeter that fits into the strategic intent of each of the separate companies. Thanks for your question, Peter. Thanks, Carlos. Maybe, Andre, as a follow-up, you can help us understand the building blocks on the $300 million of dis-synergies that you called out. I think if I go back to the merger when the company was put together, obviously, the synergy target was much higher. The fact that the dis-synergies are that much lower, maybe you can help frame that for us as well. Thanks very much. Sure. The $300 million is roughly a third COGS. Within this COGS, the majority is logistics because there is very minimal manufacturing overlap between the companies, like very, very minimal. A third is COGS, a third is IT costs, and a third is other SG&A, from which about half of this third is sales and marketing, which I think will be welcome in any circumstance. The other half is about duplication of corporate functions. When you compare to, I think it's not a good comparison, the synergies that we had at the time of the merger, the synergies, because you have to remind that we are a very efficient operator. We always found a way to manage the company with a lot less layers or have leadership closer to the business. We operate with larger spans of control. We eliminate costs that don't help with the long-term needs of the business. We really operate in a very efficient manner. That's why this comparison is not really, I think, apple to apple. Got it. Thanks very much, guys. Thank you. Our next question comes from the line of David Palmer with Evercore ISI. Please proceed with your question. Thanks. Another question I would expect to get this morning is just basically the breakup by growth. Right now, we're seeing, it looks like roughly in the scanner data that the taste elevation side has maybe 3% or 4% down sales and consumption trends. I'm wondering if you had to define maybe some of the temporary, hopefully temporary reasons for that or things that you'll be focusing on to get this new growth to your side of the business going, that would be helpful. Thanks. David, thanks for the question. Let me go back to kind of the strategic intent of what we have for each of these companies. If you think about the global taste elevation, the business that is within those categories has been globally growing for the last five years. If you think about that, that growth actually since 2019 is about 5%. In the U.S., that growth is about 3% since 2010. These are businesses that historically have had attractive growth. While in the last 12 months, we have seen challenges in the U.S., particularly as consumers are trading down due to the historic low consumer sentiment, the reality is that these are very much strong and growing categories for a long period of time that give us the confidence of how we're going to move forward. I should also emphasize the fact that you have heard me say that we have been driving a huge amount of investing through our brand growth systems disproportionately to the taste elevation business, disproportionately to the U.S., to make sure that we are, in fact, driving the growth of those potential businesses. In fact, if you look at a North America business, 85% of the market that we've been investing in and product investments have been going to those accelerated platforms in North America. For us, we continue to be able to invest behind those. We believe in those. We believe we have the right to win. What you see from us is continue to drive that investment. I think as we go forward and we create a Global Taste Elevation Company, it allows us to have even greater focus to further investments not only in the marketing but also in the capabilities necessary to continue to drive growth up to the future. The only thing I'll add, if we look at this particular part of the perimeter, we grew consumption in eight out of the last 10 years in this segment. The exception being the year after the pandemic that obviously everyone went down and then last year when we started to see the effects of the consumer environment. Otherwise, this business has been very resilient and we have a very steady level of growth. Thanks for the question, David. Thank you. Thank you. Our next question comes from the line of Tom Palmer with JPMorgan. Please proceed with your question. Good morning, and thanks for the questions. I wanted to ask, just on the $6.3 billion EBITDA in 2024, you gave a helpful split between the two segments. I think for 2025, guidance would suggest something more in the $6 billion EBITDA range. When bridging 2024 into 2025, is one of the businesses facing disproportionate profit pressure this year? Any help on what that split might look like for this year. Thanks. It's very evenly split, so you can consider the reduction pretty much being half and half. Okay. Thanks for that. Carlos, I wondered about your decision to stay with the North American Grocery Company versus Global Taste Elevation Company. Just any color on the decision-making process there. Thank you. I am very, very humble and appreciative for the support that I have received from the Board of Directors and, frankly, for all the colleagues here at The Kraft Heinz. I'm very excited about the fact that I continue to contribute to this company in many different ways as we go forward. Let me also remind you that I will continue to be CEO of The Kraft Heinz through this process that we don't expect to finish until late in the second half of 2026. As we go forward, what I'm very excited about is, you know, if you know a little bit about my career, I actually began my corporate career working in the Oscar Mayer business. I think these are brands that, through my experience at Kraft Foods, I have helped shape. I think the fact that these are brands that I can continue to help shape into the future and continue to see its potential and continue to be able to now make strategic investments behind them, it is certainly an exciting time for what I think we can accomplish after a separation. In the meantime, I'll tell you, my focus continues to be on making The Kraft Heinz the best company possible and continue to drive on our results and our commitments as we go through this process as well. Thank you for your question. Carlos, would you allow me to add something on that? Please, Miguel. This is Miguel Patricio speaking, now the Executive Chairman for The Kraft Heinz Company. I think this is a great proof for the market and for our people internally that this split is not between a good company and a bad company. This split is about two great companies with great brands and great possibilities. It's really a split thinking that focus will help us tremendously. Today, operating with 56 different categories, we have to make and define priorities when we are taking decisions. By dividing this company in two, I think that we are going to give the attention that part of this portfolio is not having, is not getting right now. We picked Carlos for his knowledge, his experience in the American business. I have to tell you that he was very excited. His answer was, "Oh, I love that part of the business." I think there's an immense potential. I believe that with focus, I can do it. We are all excited with that possibility. Thank you, Miguel. Appreciate your words. Thank you. Our next question comes from the line of Chris Carey with Wells Fargo Securities. Please proceed with your question. Hi, everyone. Morning, Chris. In the slide presentation, I think it's slide 19, there is under steps to complete, there's a bullet around finalizing the capital structure, including reallocation of debt. In the prepared remarks, it says that the obligation of the debt will go to taste elevation or it will be refinanced. I'm just trying to square the two statements. Can you just give us a bit of context on how you see the capital structures of the two split businesses? I have more of a strategic follow-up. Thanks for the question. In that same page, we make it clear that we are targeting both companies should be investment-grade. We will be working with the rating agencies as well to ensure that we allocate that and give a capital structure that both companies will be set up for success, and both companies have flexibility to deploy cash in different ways. Okay. I think that's a, we'll get more detail in the coming months. Just more of a strict. I think that already gives some good indication. I think by saying that we're targeting both companies to be investment-grade, that should give you a decent sense of the amount of debt that each entity could eventually have. Okay. Fair enough. I just have more of a strategic question. I think the original merger a decade ago was predicated on the concept of scale. What we're hearing this morning is perhaps there was a bit too much scale or too much complexity, and yet the combined entity or the separated entities, you'd like to maintain a level of scale. Clearly, scale is important, but in the right level of scale, if you will. How do you find the right balance of, well, we've got the appropriate size, but we're not too big? Can you give us a bit more sense of how that decision came to be today? Thanks so much. Yeah. I'm happy to speak to that because, as you can imagine, it's a topic that was thoroughly thought through. What I'll tell you is, in your premise, which I agree with, scale does matter. We were intentional in making sure that we preserve the scale in those geographic situations, markets that we are competing in. That's number one. Number two, what I will say is, scale by itself is not enough. I think we need to be thoughtful and intentional of having a purpose with that scale. I think what you see today as we are separating the announcement, separating the two companies, it gives us that opportunity. It gives the opportunity to be intentionally focused on how we actually think about that scale. This sense of us creating a Global Taste Elevation Company that is focused, you know, 75% focused on, you know, essentially sausage and spread, a company like North American Grocery, which is essentially one geographic kind of, you know, location, that actually allows us to make sure that we have that level of focus now as we go forward. At the same time, maintaining a level of scale that I think is important to compete in this marketplace. It is a taking kind of what is intentionally a better strategy and now deploying in a way that I think is helpful for us to compete into the future. Thanks for your question. Thank you. Thank you. Our next question comes from the line of John Baumgartner with Mizuho Securities. Please proceed with your question. Good morning. Thanks for the question. I'm wondering if you can speak to future cost efficiencies. Andre, as you've noted, the underlying SG&A is already very efficient, but the business, as it is now, is in the early stages of next steps. Back office consolidation, you're adding some headcount and marketing resources at the same time. To what extent does this split sort of reduce the opportunities for incremental cost savings relative to remaining as The Kraft Heinz? Do you give up opportunities for future savings given how this portfolio is split across categories, channels, geographies? I'm also curious, in the dis-synergy guidance you provided, that $300 million, to what extent does that also include costs required to rebuild or build out marketing and retail resources where, again, maybe splitting in two, you're giving up some efficiencies? Thank you. Thanks for the question, John. First, could you repeat the beginning of the question again? I think it was a bit too long and I think there are two or three elements there. Sure. The first question was, to what extent does this split sort of reduce the opportunities for incremental savings that you may have relative to staying as The Kraft Heinz? Are you giving up future cost savings given how the portfolio is being split? Secondly, in that dis-synergy guidance of $300 million, to what extent does that also incorporate marketing resources, trade resources that have to be rebuilt that you're also sort of sacrificing in the split? Okay. The first part of the question is, it should not preclude us from continuing to pursue savings. Remember, on the COGS side, if anything, that should help us to deliver more COGS savings because there will be a lot more focus today from our supply chain leadership on different trends of the business. I think actually that should contribute to more efficiencies over time. On the SG&A front, we still have a lot of opportunities to increase the scope of our shared services organization, and nothing should change in that regard. We should continue to pursue those so that there is more to come on that front. Regarding the $300 million, as I mentioned before, there is a portion of that which is to add sales and marketing headcount, which will be welcome in any scenario. I think as we are deploying the brand growth system, we have been saying that marketing now is our number one priority. Adding more headcount will help in the future with having more people that can help translate into better top line. We don't have, in this $300 million, more marketing dollars. We have more marketing headcount, but not marketing dollars. As Carlos Abrams-Rivera mentioned a few minutes ago, we have been adding more marketing dollars and investing in the product as needed. As we continue to deploy the brand growth system, if you see opportunities to do so, we will be agnostic of the separation. Let me add to the first part of your question, John, which is this idea of, I think, as we go forward, if you think about what we have been able to do for the last few years, which is we have deployed agile scale against our biggest priorities that have unlocked a huge amount of efficiencies. I think as we go forward, it would only allow us to actually focus further on also making sure we have the right capabilities internally to deploy those efficiencies across both companies. That idea of us embedding agile scale as part of our DNA of our company will continue even as we think about the separation of the two companies. Thank you for your question. Thanks, Carlos. Thanks, Andre. Thank you. Our next question comes from the line of Robert Mosca with TD Cowen. Please proceed with your question. Hi. Thanks for the question. The margin structure of Global Taste Elevation is a lot higher than North American Grocery, and it's, you know, in the high 20s, so it's high in general. Where's the opportunity for more margin expansion ahead between these two? Is there a bigger opportunity in Grocery than in Elevation? Maybe you can put in context, you know, how have the margins changed over time in these two? Has one been going down and one been going up, or is it pretty similar? Thanks. Thanks for the question, Rob. On the first question, if you take all factors combined, you'll probably see more opportunity on margin expansion on the North American Grocery Company than in the Global Taste Elevation Company. Remember that we have a significant opportunity on Global Taste Elevation to continue to expand into away-from-home and emerging markets. Those have, on average, a lower margin than our taste elevation margins in the U.S. There is a mix component here. On the other hand, there is still opportunity a lot in COGS. There are a number of things that we are working even to further improve our margins on the emerging markets, which we can talk about on other occasions. Regarding the trajectory of margins, we have seen in the last five years that there was a relevant margin expansion on the Global Taste Elevation Company. In the North American Grocery Company, it has been mixed. Parts of it depend on the commodity cycle as well, right? Now we are in a commodity cycle where the commodities are quite high, which typically compresses margin. If you were to isolate the effect of the commodity cycle, you would see as well parts of the North America business expanding margin. Remember that when we established the balanced portfolio, it was a lot about rebuilding the profitability in some cases, like meats being probably the most relevant one. There are a lot of opportunities on the productivity front on COGS that we have been capturing. That's what I'll tell you. Thank you, Andre. Thank you. Our next question comes from the line of Alexia Howard with Bernstein. Please proceed with your question. Good morning, everyone. Can I, first of all, ask about the opportunities for food service expansion for the North American Grocery Company? I think those were mentioned in the prepared remarks. Specifically, which brands, which channels, where do you see that opportunity from here? Yeah. Alexia, thanks for the question. What I'll say is, today, when you look at a total company, the reality is that when you do the parental analysis of the business, we tend to focus on our away-from-home business in those sauces businesses because those are places that we historically have had a greater presence, and we have had greater capabilities to drive that growth in away-from-home. I think as we go forward, the reality is that there is a huge opportunity in not only away-from-home, but in other channels, convenience, and so forth in the North American grocery that until now we haven't been able to put the right level of resources and capabilities to drive that business forward. I see that as a great place for us to think about as a wide space that can potentially look at how else we can take, you know, some of those love brands into new spaces now into the future. I'm very excited about it can be. I think we are just going to be scratching the surface of what the potential of us taking into new spaces now. Thank you. You mentioned in the prepared remarks. I'm sorry. Go ahead. You mentioned in the prepared remarks that the North American Grocery Company is also expected to have the capital structure that will allow them to consider strategic transactions. I presume that includes acquisitions. That seems to fly in the face of the focus motivation for the split. What kind of transactions would you be looking for? How would that square with this idea that you're separating the two companies today? For us, Alexia, the important thing is, as Andre said earlier, for us, first of all, to aim to be, you know, where the credit rating, credit investment grade. That was important for us to be able to make sure that we have the flexibility of transactions in either way. I would say anything we would do would be consistent with what we just said today, which is any changes in transactions will be with the focus on how do we actually drive further focus. I mentioned in an earlier question that I actually believe that scale does matter, but that scale has to be linked to focus. To the extent that there are areas that can help us drive further focus, that could be a transaction that would also be interesting for us to entertain in the future. Thank you. I'll pass it on. Thank you. Thank you. Our next question comes from the line of Max Gumport with BNP Paribas. Please proceed with your question. Thanks for the question. Carlos, with regard to the North American Grocery, you described it as operating in stable growth categories and with beloved brands. I think it's fair to say that the volume situation over the last several years had painted a very different picture. I want to get a better sense for what are your top priorities to get organic sales growth back on track for this business. How does being a separate company unlock those priorities and those initiatives? What do you see as the biggest challenges that you will be facing when you're running this standalone company? Thanks very much. There are a number of questions that I'm sure we'll have plenty of time for us to discuss into the future. Let me just give you a little bit of a high-level view of how I see the North American Grocery Company. First of all, it has $3 billion brands. They have a 90% household penetration. In fact, 75% of the sales are coming from market-leading brands that either have number one or number two positions in the category. These are attractive brands, highly relevant with consumers in a place that actually we believe that we can continue to drive improved performance. I think that combined with that, I want to make sure you also know that one of the things that we also distinguish ourselves as a company is that we are very much an efficient operator. I think you should expect us to continue to drive that level of efficiency and continue to drive high operating margins as we think about the future. In terms of areas of continued focus, I'll give you a couple of things that I see. Earlier this year, we talked about how we have deployed the brand growth system against some of our areas that we felt require a level of focus, a Preshown Lunchables. Also, those businesses that are going to be in North American Grocery Company are actually driving now growth for the last few weeks. I think it is a testament to the fact that when we make the right investments, that we put the right support and focus, it actually yields the kind of positive results that we want to see. I think the company will be very much excited about what the future will be as we continue to also drive that level of focus and intention behind those businesses. I mentioned earlier to the question from Alexia, the reality is that there are places and in channels that we haven't quite pursued with the level of focus that we would need. I think away-from-home is a perfect example for us that as a company, it certainly is producing the kind of results we want. If I just look at it from the lens of the North American Grocery, there clearly is an opportunity for us to continue to expand on that. There are a lot of exciting things ahead. I think that we'll have an opportunity for us to talk about priorities and how do we think about continuing to drive this business forward. Thanks for the question. Great, thanks very much. Operator, we have time for one more question. Thank you. Our final question this morning comes from the line of Scott Marks with Jefferies. Please proceed with your question. Good morning. Thanks so much for taking the questions. I wanted to ask about innovation across these two portfolios. There have been some questions across the broader industry about innovation and driving some exciting new products for consumers to generate incremental engagement given the current backdrop. I am wondering if you can share your thoughts around innovation capabilities across these two different businesses, what you think they need that's either similar or different, and how you think about prioritizing that. Thanks for the question. For me, I think that one of the critical things that we have done as a company is making sure that as we deploy the brand growth system, it allows us to identify with a larger frame of reference, spaces in which we can take our brands to drive new innovation. As we see today in the company, we have doubled the rate of innovation over the last three years, and we feel good about that. I think there's a lot more that we can do. I think that as we think the way we think about innovation, and I think maybe something that externally may not see as much, is that innovation in both the things that we are going to be driving new to the marketplace, like we're doing right now with things like Lunchables, PB&J, like we're doing with our Taco Bell meals that continue to drive double-digit growth in the marketplace, that we are now expanding into new geographies, that we're doing with our Heinz business and how we're taking now to other spaces in adjacency categories like pasta sauce. All those things are, yes, part of innovation, but another part of the innovation equation is the renovation that we're doing in our business. When you think about our Mac and Cheese business, in which we are now deploying the best formula we have ever had, that we are making sure that our products continue to have reduction on sugars, reduction on sodium across our portfolio, that also is part of the renovation that drives us to have a better component of innovative solutions to consumers. From the consumer lens, the idea that we're bringing new things to the world and making the products a lot better is part of how we're thinking about innovation. You will see that as we go into two separate companies, it will give us the opportunity to actually further invest in both of those in a way that actually allows us to capture even further growth into the future. Thanks for the question, Scott. Appreciate it. Thank you, Operator. Appreciate all the questions today. Thank you. This concludes our question and answer session, and thus concludes our call today. We thank you for your interest and participation. You may now disconnect your lines.