Analysis of Reportable Segments
Kraft Heinz Co. operates in 4 segments: United States; Canada; Europe, Middle East, and Africa (EMEA); and Latin America and Asia Pacific (APAC).
Segment Profit Margin
Kraft Heinz Co., profit margin by reportable segment
| Dec 28, 2019 | Dec 29, 2018 | Dec 30, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| United States | 27.08% | 28.79% | 32.22% | 31.10% | — |
| Canada | 25.88% | 27.98% | 29.21% | 27.45% | — |
| Europe, Middle East, and Africa (EMEA) | 25.91% | 26.64% | 26.03% | 28.65% | — |
| Latin America and Asia Pacific (APAC) | 13.02% | 19.51% | 19.13% | 21.10% | — |
Based on: 10-K (reporting date: 2019-12-28), 10-K (reporting date: 2018-12-29), 10-K (reporting date: 2017-12-30), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
The annual reportable segment profit margin data reveal several distinct trends across the geographic markets from 2016 to 2019. Missing data for 2015 prevent analysis for that initial year.
- United States
- The profit margin in the United States shows a declining trend over the observed four-year span. Starting at 31.1% in 2016, it increased slightly to 32.22% in 2017, then decreased to 28.79% in 2018 and further declined to 27.08% in 2019. This indicates a reduction in profitability within this segment, particularly notable after 2017.
- Canada
- Canada's segment profit margin follows a similar downward trajectory. Beginning at 27.45% in 2016, it rose to 29.21% in 2017 but then dropped to 27.98% in 2018 and more steeply to 25.88% by 2019. This pattern mirrors the U.S. segment with moderate fluctuations but an overall decrease in margin by the end of the period.
- Europe, Middle East, and Africa (EMEA)
- The EMEA region exhibits a consistent decline in profit margin across the four years. Starting at 28.65% in 2016, the margin declined to 26.03% in 2017, slightly increased to 26.64% in 2018, and then decreased again to 25.91% in 2019. Although the margin remains relatively steady compared to other regions, a gradual downward pressure is evident.
- Latin America and Asia Pacific (APAC)
- The most significant decline is visible in the Latin America and Asia Pacific region. The profit margin fell from 21.1% in 2016 to 19.13% in 2017, remained roughly steady at 19.51% in 2018, and then sharply dropped to 13.02% in 2019. This steep decline in 2019 suggests challenges affecting profitability more acutely than in other regions.
Overall, the data demonstrate a widespread decrease in segment profit margins across all regions, with the United States and Canada showing moderate but consistent declines, EMEA exhibiting slight fluctuations with a downward tendency, and Latin America and Asia Pacific experiencing the most pronounced erosion of profitability, particularly in the final year reported. This trend may indicate increasing cost pressures, competitive challenges, or other operational factors impacting profit margins across these geographical segments.
Segment Profit Margin: United States
Kraft Heinz Co.; United States; segment profit margin calculation
| Dec 28, 2019 | Dec 29, 2018 | Dec 30, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Adjusted EBITDA | 4,809) | 5,218) | 5,873) | 5,744) | —) |
| Net sales | 17,756) | 18,122) | 18,230) | 18,469) | —) |
| Segment Profitability Ratio | |||||
| Segment profit margin1 | 27.08% | 28.79% | 32.22% | 31.10% | — |
Based on: 10-K (reporting date: 2019-12-28), 10-K (reporting date: 2018-12-29), 10-K (reporting date: 2017-12-30), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
1 2019 Calculation
Segment profit margin = 100 × Adjusted EBITDA ÷ Net sales
= 100 × 4,809 ÷ 17,756 = 27.08%
The segment data over the period from 2016 to 2019 reveals several notable trends in profitability and sales performance.
- Adjusted EBITDA
- After an increase from 5744 million US dollars in 2016 to 5873 million in 2017, the adjusted EBITDA declined in the subsequent years, falling to 5218 million in 2018 and further reducing to 4809 million by 2019. This represents a noticeable contraction in earnings before interest, taxes, depreciation, and amortization in the last two years of the period.
- Net Sales
- Net sales showed a gradual decline over the reported years, decreasing from 18,469 million US dollars in 2016 to 17,756 million in 2019. This downward trend suggests a consistent reduction in revenue generation from the segment.
- Segment Profit Margin
- The segment profit margin initially improved from 31.1% in 2016 to 32.22% in 2017, indicating enhanced profitability relative to sales. However, this margin experienced a decline thereafter, falling to 28.79% in 2018 and further to 27.08% in 2019. This diminishing margin reflects decreasing efficiency or increased costs impacting profitability despite modest sales declines.
In summary, the segment exhibited a peak in performance around 2017 with the highest adjusted EBITDA and profit margin, followed by a consistent downturn through 2018 and 2019. The simultaneous decrease in net sales and profit margins suggests pressure on both revenue volumes and cost management, leading to overall reduced segment profitability.
Segment Profit Margin: Canada
Kraft Heinz Co.; Canada; segment profit margin calculation
| Dec 28, 2019 | Dec 29, 2018 | Dec 30, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Adjusted EBITDA | 487) | 608) | 636) | 632) | —) |
| Net sales | 1,882) | 2,173) | 2,177) | 2,302) | —) |
| Segment Profitability Ratio | |||||
| Segment profit margin1 | 25.88% | 27.98% | 29.21% | 27.45% | — |
Based on: 10-K (reporting date: 2019-12-28), 10-K (reporting date: 2018-12-29), 10-K (reporting date: 2017-12-30), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
1 2019 Calculation
Segment profit margin = 100 × Adjusted EBITDA ÷ Net sales
= 100 × 487 ÷ 1,882 = 25.88%
The analyzed data reveals several trends regarding financial performance over the five-year period from 2015 to 2019.
- Adjusted EBITDA
- Adjusted EBITDA displays a fluctuating pattern, starting at a reported value of 632 million USD in 2016, slightly increasing to 636 million USD in 2017, followed by a decline to 608 million USD in 2018, and a more pronounced decrease to 487 million USD in 2019. This indicates a weakening in earnings before interest, taxes, depreciation, and amortization in the latter years examined.
- Net Sales
- Net sales show a downward trend over the given timeframe, peaking at 2302 million USD in 2016 and then steadily declining each subsequent year to 2177 million USD in 2017, 2173 million USD in 2018, and 1882 million USD in 2019. The consistent decrease points to reduced sales volume or pricing pressure in the Canadian segment.
- Segment Profit Margin
- The segment profit margin experienced some variation but generally trended downward in recent years. It started at 27.45% in 2016, rose to 29.21% in 2017, then dropped to 27.98% in 2018, and further declined to 25.88% in 2019. Despite a mid-period improvement, the overall decrease in margin suggests increasing costs or reduced profitability per unit of sales towards the end of the period.
In summary, the data depicts a period characterized by declining sales and profitability in the Canada segment, with adjusted EBITDA contracting more sharply in the latter years. Although there was a brief increase in segment profit margin in 2017, the subsequent declines highlight operational or market challenges impacting financial performance.
Segment Profit Margin: Europe, Middle East, and Africa (EMEA)
Kraft Heinz Co.; Europe, Middle East, and Africa (EMEA); segment profit margin calculation
| Dec 28, 2019 | Dec 29, 2018 | Dec 30, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Adjusted EBITDA | 661) | 724) | 673) | 741) | —) |
| Net sales | 2,551) | 2,718) | 2,585) | 2,586) | —) |
| Segment Profitability Ratio | |||||
| Segment profit margin1 | 25.91% | 26.64% | 26.03% | 28.65% | — |
Based on: 10-K (reporting date: 2019-12-28), 10-K (reporting date: 2018-12-29), 10-K (reporting date: 2017-12-30), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
1 2019 Calculation
Segment profit margin = 100 × Adjusted EBITDA ÷ Net sales
= 100 × 661 ÷ 2,551 = 25.91%
- Adjusted EBITDA
- The Adjusted EBITDA exhibited fluctuations across the reported periods. It increased significantly from an unreported figure in 2015 to 741 million US dollars in 2016, then declined to 673 million in 2017. Following this, there was a recovery to 724 million in 2018, but the value decreased again to 661 million in 2019. This pattern indicates volatility in operational profitability within the region over the years.
- Net Sales
- Net sales showed relative stability with minor variations throughout the reported years. After an unknown amount in 2015, sales were steady at 2,586 million US dollars in 2016 and remained almost unchanged at 2,585 million in 2017. There was an increase to 2,718 million in 2018, followed by a decline to 2,551 million in 2019. These movements suggest a generally stable revenue stream with a peak in 2018 before a slight reduction the following year.
- Segment Profit Margin
- The segment profit margin demonstrated a downward trend overall during the period. Starting at 28.65% in 2016, it reduced to 26.03% in 2017, slightly rebounded to 26.64% in 2018, then decreased again to 25.91% in 2019. This indicates decreasing profitability efficiency relative to sales in the Europe, Middle East, and Africa segment, despite some recovery attempts in the middle of the period.
Segment Profit Margin: Latin America and Asia Pacific (APAC)
Kraft Heinz Co.; Latin America and Asia Pacific (APAC); segment profit margin calculation
| Dec 28, 2019 | Dec 29, 2018 | Dec 30, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Adjusted EBITDA | 363) | 635) | 590) | 621) | —) |
| Net sales | 2,788) | 3,255) | 3,084) | 2,943) | —) |
| Segment Profitability Ratio | |||||
| Segment profit margin1 | 13.02% | 19.51% | 19.13% | 21.10% | — |
Based on: 10-K (reporting date: 2019-12-28), 10-K (reporting date: 2018-12-29), 10-K (reporting date: 2017-12-30), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
1 2019 Calculation
Segment profit margin = 100 × Adjusted EBITDA ÷ Net sales
= 100 × 363 ÷ 2,788 = 13.02%
The data reveals notable fluctuations in key financial metrics for the Latin America and Asia Pacific segment over the five-year period ending in 2019.
- Net Sales
- Net sales exhibited a generally upward trend from 2016 through 2018, increasing from 2,943 million USD in 2016 to a peak of 3,255 million USD in 2018. However, this trend reversed in 2019 with sales declining to 2,788 million USD, representing a notable decrease from the prior year.
- Adjusted EBITDA
- There was a similar pattern observed in adjusted EBITDA. Starting at 621 million USD in 2016, adjusted EBITDA declined slightly to 590 million USD in 2017, then recovered to 635 million USD in 2018. In 2019, however, adjusted EBITDA experienced a sharp decline to 363 million USD, reflecting a significant contraction in profitability.
- Segment Profit Margin
- The segment profit margin followed a downward trend throughout the period. It started at 21.1% in 2016 and decreased to 19.13% in 2017, with a minor uptick to 19.51% in 2018. By 2019, the margin dropped substantially to 13.02%, indicating reduced efficiency or rising costs relative to sales.
Overall, while the segment demonstrated growth in sales and earnings through 2018, the decline in 2019 marks a period of financial challenge. The decreasing profit margin, alongside the significant drop in both sales and adjusted EBITDA in the final year, may suggest operational pressures or adverse market conditions impacting the segment's performance.
Segment Capital Expenditures to Depreciation
Kraft Heinz Co., capital expenditures to depreciation by reportable segment
| Dec 28, 2019 | Dec 29, 2018 | Dec 30, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| United States | 0.65 | 0.62 | 1.16 | 0.87 | — |
| Canada | 0.77 | 0.54 | 0.88 | 0.54 | — |
| Europe, Middle East, and Africa (EMEA) | 1.25 | 1.22 | 1.28 | 1.32 | — |
| Latin America and Asia Pacific (APAC) | 1.20 | 1.98 | 1.88 | 1.14 | — |
Based on: 10-K (reporting date: 2019-12-28), 10-K (reporting date: 2018-12-29), 10-K (reporting date: 2017-12-30), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
The analysis of the segment capital expenditures to depreciation ratios over the periods from December 31, 2015, to December 28, 2019, reveals varying trends across different geographical regions.
- United States
- The ratio increased from 0.87 in 2016 to a peak of 1.16 in 2017, indicating higher capital expenditures relative to depreciation during that year. Subsequently, there was a notable decline to 0.62 in 2018, which slightly recovered to 0.65 in 2019. This suggests a reduction in investment intensity after 2017, with a modest stabilization towards the end of the period.
- Canada
- The capital expenditures to depreciation ratio showed a pattern of fluctuation. Starting at 0.54 in 2016, it increased to 0.88 in 2017, followed by a decline to 0.54 in 2018 and a recovery to 0.77 in 2019. This indicates alternating periods of increased and decreased investment relative to asset depreciation.
- Europe, Middle East, and Africa (EMEA)
- This region exhibited relatively high and stable ratios throughout the period. The ratio peaked at 1.32 in 2016, then slightly decreased but remained above 1.2 in both 2017 and 2019, and at 1.22 in 2018. The trend demonstrates sustained capital expenditures exceeding depreciation, suggesting ongoing investment in fixed assets.
- Latin America and Asia Pacific (APAC)
- The ratio started at 1.14 in 2016, surged to a high of 1.88 in 2017, and reached its maximum at 1.98 in 2018. However, there was a considerable decline in 2019 to 1.2. This pattern reflects intensified investment activity peaking in 2018, followed by a reduction, though still maintaining a level above depreciation.
Overall, the data indicate that the EMEA region consistently maintained capital expenditures exceeding depreciation, reflecting sustained asset growth. The APAC region showed a strong investment surge before a recent decrease. Both the United States and Canada displayed more volatile patterns, with capital expenditures generally fluctuating but often falling below or close to depreciation levels in later years. These trends might imply differing strategic priorities and investment cycles across regions.
Segment Capital Expenditures to Depreciation: United States
Kraft Heinz Co.; United States; segment capital expenditures to depreciation calculation
| Dec 28, 2019 | Dec 29, 2018 | Dec 30, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Capital expenditures | 393) | 388) | 764) | 843) | —) |
| Depreciation and amortization expense | 609) | 626) | 658) | 966) | —) |
| Segment Financial Ratio | |||||
| Segment capital expenditures to depreciation1 | 0.65 | 0.62 | 1.16 | 0.87 | — |
Based on: 10-K (reporting date: 2019-12-28), 10-K (reporting date: 2018-12-29), 10-K (reporting date: 2017-12-30), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
1 2019 Calculation
Segment capital expenditures to depreciation = Capital expenditures ÷ Depreciation and amortization expense
= 393 ÷ 609 = 0.65
- Capital Expenditures
- Capital expenditures show a significant decrease over the analyzed periods. From US$843 million in 2016, spending declined to US$764 million in 2017, followed by a sharp reduction to US$388 million in 2018 and a slight increase to US$393 million in 2019. This trend indicates a significant reduction in investment activities in recent years compared to earlier data.
- Depreciation and Amortization Expense
- Depreciation and amortization expenses exhibit a consistent declining pattern. Starting at US$966 million in 2016, these expenses decreased to US$658 million in 2017, and further declined to US$626 million in 2018. By 2019, the expense had reduced further to US$609 million. This steady reduction may reflect aging assets, changes in capital assets composition, or adjustments to amortization schedules.
- Segment Capital Expenditures to Depreciation Ratio
- The ratio of capital expenditures to depreciation demonstrates variability during the period. It was 0.87 in 2016, increased to 1.16 in 2017, suggesting higher investment relative to asset depreciation in that year. However, the ratio dropped notably to 0.62 in 2018 and remained relatively stable at 0.65 in 2019, indicating capital expenditures were substantially lower than depreciation expenses in the latter years. This suggests a possible trend of underinvestment relative to asset wear and tear, which could impact future asset base and operational capacity.
Segment Capital Expenditures to Depreciation: Canada
Kraft Heinz Co.; Canada; segment capital expenditures to depreciation calculation
| Dec 28, 2019 | Dec 29, 2018 | Dec 30, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Capital expenditures | 27) | 21) | 42) | 30) | —) |
| Depreciation and amortization expense | 35) | 39) | 48) | 56) | —) |
| Segment Financial Ratio | |||||
| Segment capital expenditures to depreciation1 | 0.77 | 0.54 | 0.88 | 0.54 | — |
Based on: 10-K (reporting date: 2019-12-28), 10-K (reporting date: 2018-12-29), 10-K (reporting date: 2017-12-30), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
1 2019 Calculation
Segment capital expenditures to depreciation = Capital expenditures ÷ Depreciation and amortization expense
= 27 ÷ 35 = 0.77
The data reveals several key trends in capital expenditures and depreciation for the Canada reportable segment over the period from December 31, 2015, to December 28, 2019.
- Capital Expenditures
- Capital expenditures fluctuated over the analyzed years, starting at 30 million US dollars in 2016, rising to a peak of 42 million in 2017, then declining sharply to 21 million in 2018, before increasing moderately to 27 million in 2019. This pattern suggests variability in investment activity, with no consistent upward or downward trend.
- Depreciation and Amortization Expense
- Depreciation and amortization expenses demonstrated a steady decline throughout the period. Beginning at 56 million in 2016, these expenses decreased to 48 million in 2017, followed by further reductions to 39 million and 35 million in 2018 and 2019, respectively. The consistent downward trend indicates a gradual reduction in amortizable asset base or changes in asset valuation methods.
- Segment Capital Expenditures to Depreciation Ratio
- The ratio of capital expenditures to depreciation, representing the level of reinvestment relative to asset consumption, exhibited significant variability. It increased from 0.54 in 2016 to a high of 0.88 in 2017, declined back to 0.54 in 2018, and rose again to 0.77 in 2019. These fluctuations suggest inconsistent reinvestment strategies relative to asset depreciation across the reported years.
In summary, the segment's capital expenditures showed an inconsistent pattern, peaking in 2017 and dipping subsequently, while depreciation expenses consistently declined over the five-year span. The reinvestment ratio's variability highlights fluctuating capital renewal intensity relative to asset decay, indicating potential changes in operational priorities or asset management strategies during this period.
Segment Capital Expenditures to Depreciation: Europe, Middle East, and Africa (EMEA)
Kraft Heinz Co.; Europe, Middle East, and Africa (EMEA); segment capital expenditures to depreciation calculation
| Dec 28, 2019 | Dec 29, 2018 | Dec 30, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Capital expenditures | 134) | 124) | 127) | 115) | —) |
| Depreciation and amortization expense | 107) | 102) | 99) | 87) | —) |
| Segment Financial Ratio | |||||
| Segment capital expenditures to depreciation1 | 1.25 | 1.22 | 1.28 | 1.32 | — |
Based on: 10-K (reporting date: 2019-12-28), 10-K (reporting date: 2018-12-29), 10-K (reporting date: 2017-12-30), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
1 2019 Calculation
Segment capital expenditures to depreciation = Capital expenditures ÷ Depreciation and amortization expense
= 134 ÷ 107 = 1.25
The financial data for the Europe, Middle East, and Africa (EMEA) segment over the five-year period reveals noteworthy trends in capital expenditures and depreciation and amortization expenses. Both metrics exhibit a general upward trajectory, indicating ongoing investment and asset consumption within the segment.
- Capital Expenditures
- Capital expenditures increased from $115 million in 2016 to $134 million in 2019. This steady rise suggests a consistent allocation of resources toward acquiring or upgrading physical assets.
- Depreciation and Amortization Expense
- Depreciation and amortization expenses grew from $87 million in 2016 to $107 million in 2019, reflecting the amortization of prior capital investments and the aging of existing assets.
- Segment Capital Expenditures to Depreciation Ratio
- The ratio started at 1.32 in 2016 and declined to 1.25 by 2019. Despite the slight decrease, the ratio consistently remained above 1.0, which implies that the segment's capital expenditures generally outpaced depreciation, indicating potential growth or asset base maintenance.
Overall, the upward trends in both capital expenditures and depreciation indicate that the EMEA segment is actively maintaining and possibly expanding its asset base, although the modest decline in the capital expenditures to depreciation ratio warrants monitoring for any potential changes in investment intensity relative to asset depreciation.
Segment Capital Expenditures to Depreciation: Latin America and Asia Pacific (APAC)
Kraft Heinz Co.; Latin America and Asia Pacific (APAC); segment capital expenditures to depreciation calculation
| Dec 28, 2019 | Dec 29, 2018 | Dec 30, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Capital expenditures | 149) | 236) | 184) | 96) | —) |
| Depreciation and amortization expense | 124) | 119) | 98) | 84) | —) |
| Segment Financial Ratio | |||||
| Segment capital expenditures to depreciation1 | 1.20 | 1.98 | 1.88 | 1.14 | — |
Based on: 10-K (reporting date: 2019-12-28), 10-K (reporting date: 2018-12-29), 10-K (reporting date: 2017-12-30), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
1 2019 Calculation
Segment capital expenditures to depreciation = Capital expenditures ÷ Depreciation and amortization expense
= 149 ÷ 124 = 1.20
The data for the Latin America and Asia Pacific (APAC) segment over the period from 2015 to 2019 reveals several notable trends in capital expenditures, depreciation and amortization expenses, as well as the ratio of capital expenditures to depreciation.
- Capital Expenditures
- Capital expenditures experienced a generally increasing trend from 2016 to 2018, rising from 96 million US dollars in 2016 to a peak of 236 million US dollars in 2018. However, in 2019, capital expenditures declined to 149 million US dollars, which represents a significant reduction compared to the previous year but still remains above the 2016 level.
- Depreciation and Amortization Expense
- Depreciation and amortization expenses showed a steady increase over the four-year period from 2016 through 2019. Starting at 84 million US dollars in 2016, the expense increased moderately each year, reaching 124 million US dollars in 2019. This consistent upward trend indicates ongoing capital asset usage and consumption within the segment.
- Segment Capital Expenditures to Depreciation Ratio
- The ratio of capital expenditures to depreciation exhibited an overall upward trajectory from 2016 to 2018, increasing from 1.14 to 1.98, suggesting that investment in capital assets outpaced the depreciation expense, indicating an expansion or upgrade of fixed assets in that period. In 2019, however, the ratio decreased sharply to 1.2, indicating a relative reduction in capital expenditures compared to the depreciation expense, which could suggest a slowdown or more conservative approach to investment during that year.
In summary, the segment showed growth in capital investments up until 2018, supported by rising capital expenditures surpassing depreciation. The decline in capital expenditures in 2019 alongside continued increases in depreciation points to a possible phase of consolidation or cautious investment strategy following a period of significant capital asset additions.
Net sales
Kraft Heinz Co., net sales by reportable segment
US$ in millions
| Dec 28, 2019 | Dec 29, 2018 | Dec 30, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| United States | 17,756) | 18,122) | 18,230) | 18,469) | —) |
| Canada | 1,882) | 2,173) | 2,177) | 2,302) | —) |
| Europe, Middle East, and Africa (EMEA) | 2,551) | 2,718) | 2,585) | 2,586) | —) |
| Latin America and Asia Pacific (APAC) | 2,788) | 3,255) | 3,084) | 2,943) | —) |
| Total | 24,977) | 26,268) | 26,076) | 26,300) | —) |
Based on: 10-K (reporting date: 2019-12-28), 10-K (reporting date: 2018-12-29), 10-K (reporting date: 2017-12-30), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
- United States
- The net sales in the United States show a declining trend over the analyzed period. Starting at 18,469 million USD in 2016, sales slightly decreased each year, reaching 17,756 million USD by 2019. This consistent decrease suggests a gradual reduction in sales within the domestic market.
- Canada
- Sales in Canada also experienced a downward trajectory. From 2,302 million USD in 2016, revenues decreased steadily each year, culminating in 1,882 million USD in 2019. The decline is more pronounced compared to the United States, indicating possible challenges in this regional market or a decrease in consumer demand.
- Europe, Middle East, and Africa (EMEA)
- The EMEA region exhibited relatively stable net sales with minor fluctuations. Sales were 2,586 million USD in 2016, remained nearly flat through 2017, increased to 2,718 million USD in 2018, and declined slightly to 2,551 million USD in 2019. Overall, this region maintained steady performance without significant growth or decline.
- Latin America and Asia Pacific (APAC)
- The Latin America and Asia Pacific segment showed growth initially, increasing from 2,943 million USD in 2016 to 3,255 million USD in 2018. However, there was a notable decrease to 2,788 million USD in 2019, which may reflect market volatility or operational challenges in this region in the final year of the period.
- Total
- Total net sales followed a similar downward trend as the largest segment, the United States. After a minor decrease from 26,300 million USD in 2016 to 26,076 million USD in 2017 and a slight increase to 26,268 million USD in 2018, total sales dropped more substantially to 24,977 million USD in 2019. This overall decline underscores the impact of reduced sales in key markets on the total revenue.
Adjusted EBITDA
Kraft Heinz Co., adjusted ebitda by reportable segment
US$ in millions
| Dec 28, 2019 | Dec 29, 2018 | Dec 30, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| United States | 4,809) | 5,218) | 5,873) | 5,744) | —) |
| Canada | 487) | 608) | 636) | 632) | —) |
| Europe, Middle East, and Africa (EMEA) | 661) | 724) | 673) | 741) | —) |
| Latin America and Asia Pacific (APAC) | 363) | 635) | 590) | 621) | —) |
| Total | 6,320) | 7,185) | 7,772) | 7,738) | —) |
Based on: 10-K (reporting date: 2019-12-28), 10-K (reporting date: 2018-12-29), 10-K (reporting date: 2017-12-30), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
The adjusted EBITDA data for various reportable segments from 2015 to 2019 shows distinct trends in each geographic region as well as in the overall total.
- United States
- Adjusted EBITDA increased modestly from 5,744 million USD in 2016 to 5,873 million USD in 2017, representing a period of growth. However, this was followed by a decline in subsequent years to 5,218 million USD in 2018 and further down to 4,809 million USD in 2019, indicating a downward trend in profitability in this segment over the last two reported years.
- Canada
- Canada’s adjusted EBITDA remained relatively stable between 2016 and 2017 at approximately 632-636 million USD, but then experienced a gradual decline to 608 million USD in 2018 and a notable drop to 487 million USD in 2019, pointing to decreased earnings in this region.
- Europe, Middle East, and Africa (EMEA)
- The EMEA segment showed some variability, with EBITDA decreasing from 741 million USD in 2016 to 673 million USD in 2017, then recovering to 724 million USD in 2018, before slightly decreasing again to 661 million USD in 2019. Overall, this segment experienced fluctuations but ended slightly lower than the 2016 level.
- Latin America and Asia Pacific (APAC)
- This segment exhibited a downward trajectory, with EBITDA reducing from 621 million USD in 2016 to 590 million USD in 2017, then partially recovering to 635 million USD in 2018, followed by a sharp decline to 363 million USD in 2019. The large decrease in 2019 suggests significant challenges or reduced profitability in this region.
- Total Adjusted EBITDA
- Total adjusted EBITDA showed a rising trend from 7,738 million USD in 2016 to a peak of 7,772 million USD in 2017. However, a decline ensued in the following years with totals falling to 7,185 million USD in 2018 and notably down to 6,320 million USD in 2019. This overall decrease aligns with the regional trends, particularly driven by substantial decreases in the United States, Canada, and Latin America/APAC.
In summary, the data indicates an overall peak in adjusted EBITDA around 2017, with subsequent declines across most regions, notably in the United States and Latin America/APAC by 2019. Fluctuations in the EMEA segment were less pronounced, though still negative on balance. The total adjusted EBITDA reflects these regional patterns, illustrating a downward trend in profitability over the last two years of the data.
Depreciation and amortization expense
Kraft Heinz Co., depreciation and amortization expense by reportable segment
US$ in millions
| Dec 28, 2019 | Dec 29, 2018 | Dec 30, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| United States | 609) | 626) | 658) | 966) | —) |
| Canada | 35) | 39) | 48) | 56) | —) |
| Europe, Middle East, and Africa (EMEA) | 107) | 102) | 99) | 87) | —) |
| Latin America and Asia Pacific (APAC) | 124) | 119) | 98) | 84) | —) |
| General corporate expenses | 119) | 97) | 128) | 144) | —) |
| Total | 994) | 983) | 1,031) | 1,337) | —) |
Based on: 10-K (reporting date: 2019-12-28), 10-K (reporting date: 2018-12-29), 10-K (reporting date: 2017-12-30), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
- General Trend Overview
- The depreciation and amortization expenses across the reported segments show a general decline from 2016 to 2019, with a slight increase observed in 2019 compared to 2018. The total expense dropped significantly from 1,337 million US dollars in 2016 to 983 million US dollars in 2018, before marginally rising to 994 million US dollars in 2019.
- United States Segment
- The United States segment exhibits a consistent downward trend in depreciation and amortization expenses throughout the period, decreasing from 966 million US dollars in 2016 to 609 million US dollars in 2019. This represents a notable reduction, suggesting possible asset disposals, fully amortized assets, or efficiency gains in asset usage within this market.
- Canada Segment
- Depreciation and amortization expenses in the Canada segment also trend downward over the years. Starting at 56 million US dollars in 2016, the expense steadily decreased to 35 million US dollars by 2019. This consistent decline may indicate reduced capital investments or accelerated amortization schedules in the Canadian operations.
- Europe, Middle East, and Africa (EMEA) Segment
- Unlike the US and Canada regions, the EMEA segment displays a gradual increase in depreciation and amortization expenses. From 87 million US dollars in 2016, the value rises steadily to 107 million US dollars in 2019. This upward trend may reflect ongoing capital investments or acquisitions within the EMEA region.
- Latin America and Asia Pacific (APAC) Segment
- Similarly, the Latin America and Asia Pacific segment shows a consistent increase in expense figures, from 84 million US dollars in 2016 to 124 million US dollars in 2019. This suggests expansion or increased investment in these markets, consistent with business growth or asset base augmentation.
- General Corporate Expenses
- General corporate depreciation and amortization expenses fluctuate over the period. After an initial decline from 144 million US dollars in 2016 to 97 million US dollars in 2018, there is a noticeable uptick to 119 million US dollars in 2019. This volatility might be associated with changes in corporate-level asset management or restructuring activities.
- Summary
- The overall pattern illustrates a shift in depreciation and amortization expense allocation, with declines in the North American markets (United States and Canada) contrasted by increases in the EMEA and APAC regions. This disparity may reflect strategic geographical focus changes, asset base rebalancing, or differing investment cycles across regions. The total depreciation and amortization expenses decreased considerably between 2016 and 2018, followed by stabilization in 2019, highlighting a period of asset base adjustment or optimization.
Capital expenditures
Kraft Heinz Co., capital expenditures by reportable segment
US$ in millions
| Dec 28, 2019 | Dec 29, 2018 | Dec 30, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| United States | 393) | 388) | 764) | 843) | —) |
| Canada | 27) | 21) | 42) | 30) | —) |
| Europe, Middle East, and Africa (EMEA) | 134) | 124) | 127) | 115) | —) |
| Latin America and Asia Pacific (APAC) | 149) | 236) | 184) | 96) | —) |
| General corporate expenses | 65) | 57) | 77) | 163) | —) |
| Total | 768) | 826) | 1,194) | 1,247) | —) |
Based on: 10-K (reporting date: 2019-12-28), 10-K (reporting date: 2018-12-29), 10-K (reporting date: 2017-12-30), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
- United States
- The capital expenditures in the United States exhibit a clear downward trend over the period from 2016 to 2019. Starting at 843 million US dollars in 2016, the amount decreased steadily each year to reach 393 million US dollars by 2019. This represents a significant reduction in investment within this segment, suggesting potential shifts in strategic priorities or optimization efforts.
- Canada
- In Canada, capital expenditures fluctuate with moderate variations. After an initial value of 30 million US dollars in 2016, expenditures rose to 42 million in 2017 before declining to 21 million in 2018. There is a slight recovery in 2019 to 27 million US dollars. Despite these fluctuations, overall investment remains relatively low compared to other regions.
- Europe, Middle East, and Africa (EMEA)
- Capital expenditures in the EMEA region remain relatively stable throughout the observed period, ranging between 115 million and 134 million US dollars. The values show slight increases and minor decreases but overall indicate consistent investment levels without significant volatility or trend shifts.
- Latin America and Asia Pacific (APAC)
- The Latin America and APAC region experienced a notable increase in capital expenditures from 96 million US dollars in 2016 to a peak of 236 million in 2018, indicating a period of intensified investment. However, this surge is followed by a substantial decline to 149 million in 2019, suggesting a scaling back of expenditures after the peak year.
- General Corporate Expenses
- General corporate expenses related to capital expenditures demonstrate a downward trend from 163 million US dollars in 2016 to 57 million in 2018. There is a slight increase to 65 million in 2019, but overall, these expenses have been reduced significantly over the four-year span.
- Total Capital Expenditures
- Total capital expenditures across all segments show a pronounced decrease over the four years. Beginning at 1,247 million US dollars in 2016, the total dropped steadily to 768 million US dollars by 2019. This decline highlights a broad reduction in investment activities on a company-wide scale.