Kraft Heinz Q2 2022 Earnings Call Transcript

Presentation

[Operator]

Good day and thank you for standing by. Welcome to The Kraft Heinz Company second quarter results conference call. [Operator Instructions]

I would now like to hand the conference over to your speaker today, Anne-Marie Megela. Please go ahead.

[Anne-Marie Megela, Head of Global Investor Relations at Kraft Heinz]

Thank you and hello, everyone. This is Anne-Marie Megela, Head of Global Investor Relations at The Kraft Heinz Company, and welcome to our Q&A session for our second quarter 2022 business update. During our remarks today, we will make some forward-looking statements that are based on how we see things today. Actual results may differ due to risks and uncertainties, and these are discussed in our earnings release and our filings with the SEC. We will also discuss some non-GAAP financial measures today during the call, and these non-GAAP financial measures should not be considered a replacement for and should be read together with GAAP results. And you can find the GAAP to non-GAAP reconciliations within our earnings release and the supplemental materials posted at ir.kraftheinzcompany.com.

Before we begin, I'm going to hand it over to our CEO, Miguel Patricio, for a few quick opening remarks.

[Miguel Patricio, Chief Executive Officer and Chair of the Board of Directors at Kraft Heinz]

Well, thank you, Anne-Marie, and thank you, everyone, for joining us today. I wanted to acknowledge the fact that we are living under a lot of uncertainty in what regards to the external world. And in that sense, I want to thank my team and to congratulate my team for delivering another quarter of very solid results. Of course, we are mindful of the current inflationary environment and how it affects our consumers and our customers. But we continue to develop solutions that benefit our consumers and our retailers. Our relationships with retailers continue to strengthen, and we have improved inventory and service levels so we can have now more optionality to execute more mutually strategic programs.

Well, with that, we are happy to take your questions.

Questions and Answers

[Operator]

[Operator Instructions] And our first question will come from Bryan Spillane from Bank of America. And your line is now open.

[Bryan Spillane, Analyst at Bank of America]

All right, thank you operator. Good morning, everyone. I had just one clarification question and then a second question. The first one, just as a clarification. Andre, in the slide deck, I think it's Slide 27, where you talk about -- there's a portion or a section in there about gross margin, and it shows gross margin at 30.3%. I just want to make sure, that is not adjusted, right? So that's just your gross margin. And I think, as we did in the adjusted gross margin calculation, it was like 31.5%. So I just wanted to clarify that, that margin that you're -- that you put in the slide deck is reported, not adjusted?

[Andre Maciel, Executive Vice President and Global Chief Financial Officer at Kraft Heinz]

Bryan, thanks for the question. Very good, by the way. So yes, you're right. So this is the GAAP gross margin. So to get to adjusted, we will need to increase this number by 110 basis points due to the change of unrealized hedge on commodities, okay? And in fact, if we adjust for that, our margin in Q2 is pretty much in line with the margin in Q1. And if you go back to the prior year, you would see an expansion of margin if it were not for the dilutive impact of repricing to offset inflation.

[Bryan Spillane, Analyst at Bank of America]

Okay. And then my question is just in the prepared remarks, Miguel, you talked a little bit about, I think, there still being supply chain pressures in the back half of the year and -- or currently, I suppose. And if I recall in last year, where part of what happened in the U.S. was you had some supply chain issues and they affected service levels, especially around the holiday. I guess, does the guidance assume that there's still going to be some pressure there and that you won't be fully merchandised for the holidays? Or are we -- are you in a position where you can be more fully sort of supplied and merchandised at the holidays in the U.S.?

[Miguel Patricio, Chief Executive Officer and Chair of the Board of Directors at Kraft Heinz]

Okay. Bryan, I think that since your question is addressing world of U.S., I will pass it to Carlos.

[Carlos Abrams-Rivera, Executive Vice President and President, North America Zone at Kraft Heinz]

Thank you, Miguel. Yes, I think -- first of all, thank you for your question. The reality is that we have continued to improve our production and our service levels as you saw in the presentation. And now that we are approaching kind of the low 90s in terms of service in Q2, it's going to allow us to continue to focus on driving the right kind of levels of both service and inventory with our retailers. So for us, it's important to see the continued progression that we have, and we don't anticipate that actually going against us as we go forward. In fact, what we're going to continue to see as we go into Q3 and Q4 is the continued expansion of our service and as a result, a continued improvement in terms of our performance. We saw that in Q2, where in fact, we have been able to kind of unlock opportunities within, for example, brands like Philadelphia or Heinz Ketchup, both of which had record shares, in fact, highest share they ever had in both of those businesses. So I think as we go forward, we're only going to continue to improve our position.

[Operator]

And we'll take our next question from Ken Goldman from JPMorgan. Your line is open.

[Ken Goldman, Analyst at JPMorgan Chase & Co.]

Hi, everybody. Thank you. You mentioned in the prepared remarks that you have the optionality now to execute more, I think, you called it mutually strategic programs with retailers. Now that your service levels are in a better place, I just wanted to clarify, number one, is there any major difference between a mutually strategic program and just a really good promotion that's more than just a discount? Maybe it's just something more in depth or creative than usual promotion. I just wanted to kind of clarify that definition. And the second part of that is, I wanted to ask if you're confident that these programs, if you do implement them that they're being driven from a position of strength, right, whereby you're doing them because you're able to versus maybe from a position where you're doing it because the consumer in a position of weakness themselves is demanding it.

[Miguel Patricio, Chief Executive Officer and Chair of the Board of Directors at Kraft Heinz]

Okay. Ken, I'll give you two examples of these programs that -- because we have now much better service levels we can have. So I'll give you two examples. One is what we call the Art of the Burger. It has been a very successful program, especially now during summertime, when people barbecue more and when we can put together our sauces, our cheese together with the buns of supermarket chains. It has been very good and very well accepted by our customers. I'll give you another example in a moment like this that we are exploring value propositions together with customers. I'll give you an example of grilled cheese. You can have a grilled cheese for less than $1. And we do programs with our customers, putting together our cheese, our mayo and with their bread as well, right? So these are just two examples of bringing value -- a value proposition, and the customers are receiving this extremely well. And this is bringing a little bit of creativity that we have never used, thinking about value or bringing the value of our products together with the customers.

[Ken Goldman, Analyst at JPMorgan Chase & Co.]

And then the second part -- doing this, I guess, from a position where you feel it's from strength rather than maybe because the consumer is demanding it a little bit. I just wanted to make sure about that. Maybe you answered that a little bit with the second part of that, talking about the value proposition promos, but just curious for your thoughts there.

[Andre Maciel, Executive Vice President and Global Chief Financial Officer at Kraft Heinz]

I'm not -- the other thing I would say here, Ken, this is Andre speaking, is we continue to have very productive conversations with our customers in a way that makes sense for both parties.

[Miguel Patricio, Chief Executive Officer and Chair of the Board of Directors at Kraft Heinz]

Yes. Sure, it's from a position of strength. I will say, we feel very positive about it. We are excited with the momentum that we have with our customers and with our consumers.

[Ken Goldman, Analyst at JPMorgan Chase & Co.]

Understood. Thanks very much.

[Operator]

And we'll take our next question from Andrew Lazar from Barclays. Your line is open.

[Andrew Lazar, Analyst at Barclays]

Thanks very much. In the slide deck, you provided a breakdown of categories that are sort of more and less sensitive to price gaps with private label. I think 15% of sales are in categories that are more sensitive where gaps are increasing. And I'm just curious, how do you approach these businesses in terms of balancing share and profitability? Do you take the necessary price to protect profit and deal with the short-term pressure on share or protect share and sort of take the short-term profit hit? And you talk about another 25% that are sensitive to private-label gaps but currently stable. And I guess if those were to expand from here, I guess, what gives you confidence you can manage this bigger segment in the context of your sort of growth algorithm?

[Carlos Abrams-Rivera, Executive Vice President and President, North America Zone at Kraft Heinz]

Well, let me start it, I think, answer the question specifically to the U.S. So I'll take a shot. I think for us, the reality is that even as we think about those businesses, there may be, as you saw, a very small part of our portfolio that is more exposed to private label. One of the things that we're actually doing is working differently in terms of how we're offering consumer solutions in a moment in which they are looking for different choices across the spectrum of economic development of consumers. So one of the things we're actually looking at is how we actually allow consumers to stay in our iconic brands because of the number of ranges of our products across our pricing ladder. Whether that is -- and let me give you an example, something like Oscar Mayer in which we have from natural to deli fresh to the original Oscar Mayer.

That allows consumers actually for -- to have an option in which to actually stay within our brands knowing that over the last couple of years, we've actually been renovating many of our iconic brands and investing behind it. So we have improved the quality. We have improved the renovation of those brands in a way now that makes our brands even more valuable to consumers. And frankly, we're seeing that already play out. We see that, for example, in a product like Kraft Mac & Cheese portfolio, in which we also have that kind of full array of products across pricing ladder that in Q2, you saw us gaining share as well. So for us, it's about being strategic about how we think about leveraging the entire portfolio that we have in a way that allows us to continue to offer consumers different approaches in terms of options.

[Miguel Patricio, Chief Executive Officer and Chair of the Board of Directors at Kraft Heinz]

And it's really category by category, right? So even in the 15% where the prices are expanding, the stories are very different. Like in sandwich cheese, similar to cold cuts, we do have a very good price ladder. We have the Velveeta slices, the flour, in fact, even priced at or below private label. We have the Kraft Singles and we have the Deluxe. And we're actually getting share in the last several months, so it's working quite well for us. In Ore-Ida, for example, we have the partnership with Simplot that is now starting. And that will unlock a lot of capacity later in the year, which will allow us to start to promote more this brand, which we haven't been able to do in a consistent manner for years. So it's really category by category. We monitor this very close and it makes sense that we are doing something that makes sense for both top and bottom line.

[Operator]

And our next question will come from Chris Growe from Stifel. And your line is now open.

[Chris Growe, Analyst at Stifel Nicolaus]

Can you hear me now?

[Operator]

Yes, sir.

[Chris Growe, Analyst at Stifel Nicolaus]

I just had a quick question for you, if I could, around the revenue growth in the quarter outpacing consumption. I was just curious how much of that was foodservice strength, for example, and maybe the nonmeasured channels versus actual inventory rebuilding. I think this kind of fits with an earlier question around do you see product availability as a constraint for the third and fourth quarter performance in the second half or is that behind us now is what I'm ultimately trying to get to.

[Andre Maciel, Executive Vice President and Global Chief Financial Officer at Kraft Heinz]

I think it's a combination of the sectors. So foodservice, as you have seen in our presentation, is growing north of 20%. So -- and that represents roughly 30% of our total revenue. In nonmeasured channels in the U.S., we have been doing very well in club and dollar, actually been gaining share year-to-date in those two channels because we were already prepared for a gradual shift toward those channels. And we had thought it was more pronounced in Q1, in fact, in Q2 it was very minor. So I think it's more atypical for the first 2. Regarding service levels, as you have seen, we are still in the low 90s, where the ideal level is in the high 90s. So we still have work to do.

Obviously, that's the average of the portfolio. Some categories are in great shape, back to the historical appropriate levels of services. Some others still working through it. And even if you look at on-shelf availability, we are much closer to the historical levels. So before, if you think about on-shelf availability, you were going to see in the industry like 93, 94. We are now in the 91, 92. So we're getting there but still some room to grow.

[Chris Growe, Analyst at Stifel Nicolaus]

And would there still be some continued inventory build you'd expect at retail as you improve your service levels?

[Andre Maciel, Executive Vice President and Global Chief Financial Officer at Kraft Heinz]

We might. Obviously, we cannot comment on how -- we don't know how we're going to measure the inventories moving forward. If you were to look capacity historical levels, yes, there could be some room for further inventory buildup.

[Operator]

And our next question will come from Steve Powers from Deutsche Bank. Your line is now.

[Steve Powers, Analyst at Deutsche Bank Aktiengesellschaft]

Yes. Hey, good morning.

[Miguel Patricio, Chief Executive Officer and Chair of the Board of Directors at Kraft Heinz]

Good morning. Thanks.

[Steve Powers, Analyst at Deutsche Bank Aktiengesellschaft]

You talked about your outlook contemplating greater price elasticity negatively impacting volume and mix, I guess, over the balance of the year. Is there a way for you to help us think through the P&L impacts of lower volumes at this point? Clearly, there are many other moving parts. But all else equal, if volumes are to move lower in places where you anticipate, how material is that on margins in terms of fixed cost deleverage per unit sold? I'm just -- I'm really asking just how fixed versus variable the cost structure is at this point.

[Andre Maciel, Executive Vice President and Global Chief Financial Officer at Kraft Heinz]

You talked about your outlook contemplating greater price elasticity negatively impacting volume and mix, I guess, over the balance of the year. Is there a way for you to help us think through the P&L impacts of lower volumes at this point? Clearly, there are many other moving parts. But all else equal, if volumes are to move lower in places where you anticipate, how material is that on margins in terms of fixed cost deleverage per unit sold? I'm just -- I'm really asking just how fixed versus variable the cost structure is at this point.

[Steve Powers, Analyst at Deutsche Bank Aktiengesellschaft]

Okay. Great. And if I could, you gave some good color on the cost outlook for the remainder of '22. I guess I'm just curious how you see, if possible, early positioning looking out to '23. I guess on the one hand, you mentioned costs hopefully peaking and maybe starting to receive in some cases. But on the other hand, we're still obviously a lot higher year-over-year. And you presumably have some hedges rolling into the year that will roll off both on commodities and currency. So just maybe a little bit of color, if you have any, on early positioning, visibility on constant currency looking out to the first part of '23.

[Carlos Abrams-Rivera, Executive Vice President and President, North America Zone at Kraft Heinz]

As you can tell, there's still a lot of volatility out there. Yes, the costs have received it. They are still very high, but we are working with different scenarios for next year, but we need to talk about that. You can see that we have been taking like price throughout the year that we wanted to have a carryover effect into next year, especially in the first half of the year. So that will help, but early to tell.

[Operator]

Our next question will come from Robert Moskow from Credit Suisse. Your line is now open.

[Robert Moskow, Analyst at Credit Suisse Group]

Hi, thanks. Your income statement shows losses on your derivative hedges in 2Q. I imagine that commodity inputs are now falling. And if that's right, should we assume at some point that this necessitates more counts in your thing on any specific products? And then a quick follow-up.

[Andre Maciel, Executive Vice President and Global Chief Financial Officer at Kraft Heinz]

Yes. So thanks for the question. So a couple of things. First, maybe to answer the prior question is I need to refer you bit to this one. We typically price on what -- on market changes, not on our hedged position, right? So it's important you know that. I hope this is clear. We price based on what we're seeing out in the market, not based on what our internal pricing hedgings are. But the second thing is regarding this effect, what you see in the P&L is the change in the unrealized hedge on commodities, okay? So it doesn't mean that the hedge is positive or negative. It just means that there was a change period over period. So we're still having hedge gains. We had hedge gains in both Q1 and Q2. But because part of that materialized, we see this negative effect on the realized portion. But again, the important thing is we look at the market prices, and that's how we make our price decisions.

[Robert Moskow, Analyst at Credit Suisse Group]

Maybe I'll follow up. My follow-up is, I think you did ship above retail consumption in 2Q. And I think you said that you'd be refilling shelves in 2Q. Can you give us any number as to how much that might have been just in 2Q?

[Andre Maciel, Executive Vice President and Global Chief Financial Officer at Kraft Heinz]

The inventory effect in Q2 is very small. So yes, the 2Q is a very small number. And again, we can't -- we don't know how delis are going to manage their inventories. If you were to look at the levels pre-pandemic, net-net, we still have room to grow our inventory retailers. And our shelf availability, as I said before, is still a little below the historical level, which might give further indication that this is a possibility.

[Robert Moskow, Analyst at Credit Suisse Group]

Yes. Andre, I get it. But you also said you're producing above your sales. So I don't know, is it a material amount? Or are you just -- it is. And are you refilling your own inventory then rather than retailers? Or...

[Andre Maciel, Executive Vice President and Global Chief Financial Officer at Kraft Heinz]

Yes. We are now refilling our own inventory because essentially we are going to receive historical levels. And eventually, this will go to the retailers. I don't know, Carlos, do you want to add something else?

[Carlos Abrams-Rivera, Executive Vice President and President, North America Zone at Kraft Heinz]

Yes. I mean I would say if you look at the presentation and the fact that we are able to provide service from the low 80s to the low 90s, it's a result of us being able to actually leverage our entire supply chain in a way that now with the right inventory levels in many of our categories that we can provide that service. At the same time, as Andre said, we're still in the low 90s. So there is opportunity for us to continue to drive down to the high 90s by pushing the right level of inventories internally so that we can actually be able to better service our customers.

[Operator]

And we'll take our next question from Alexia Howard from AllianceBernstein.

[Alexia Howard, Analyst at AllianceBernstein]

Thank you and good morning everyone. Can I ask about the comments you made in your prepared remarks about the international zone and the expansion of distribution points? It seems as though in the go-to-market areas, there's been a very material expansion of distribution points in some of those emerging markets. How do you ensure that you've got the critical mass in those new outlets to make money? I don't know whether you can give us data on how profitable you are in some of those regions. But we've seen some other companies kind of dig themselves a profit hole as they're trying to do that expansion. And I just want to find out how you're making sure that you've got guardrails on that expansion.

[Miguel Patricio, Chief Executive Officer and Chair of the Board of Directors at Kraft Heinz]

Rafael, it's over to you.

[Rafael Oliveira, International Zone President at Kraft Heinz]

Yes. No, Alexia, thanks for the question. I mean to be honest with you, we are extremely proud and happy with what's happening with our go-to-market model because it's a very comprehensive model that it actually starts by analyzing. It starts by where we can make money. So it starts by looking at the gross profit of each individual either channel or submarket, let's say, traditional modern trade depending on the region in multiple countries like you -- as you just mentioned. If you beat Brazil where we started, Russia, China, they are very vast countries so they have -- the profitability that you can achieve in different regions and different channels is significant -- can be significantly different. So we start by analyzing that, following through all the way to how we're going to execute the store. So it's a very comprehensive model of very detailed analytics with execution. So as you saw and you alluded to on the slides, we started this model in '18 in Brazil, copied -- adapted and copied to Russia, then to China.

And now we are scaling up to -- by the end of the year, we expect to have 75% of our markets into this go-to-market model. And the numbers -- the result speaks for itself. So everywhere that we implemented the model, the growth has been significantly above the other emerging markets that are also growing. So we will continue to roll that out. It's a model that, again, requires a lot of analytics to be profitable, but at the same time, a lot of discipline on execution to kind of keep expanding in those regions and still have a lot of distribution to the game.

[Andre Maciel, Executive Vice President and Global Chief Financial Officer at Kraft Heinz]

On the profitability side, which is obviously very important, right, we want to make sure that we don't put a lot of people out there and we cannot have a payback on that. We're also very disciplined on it. So to give an example, in Brazil, we have about, I don't know, one million points of sales that we could hypothetically serve. We are still in the 130,000, 140,000. So -- and part of that is because the limits of our scale, right? So that's very important. We are halfway exploring alternatives, potential partnerships to actually increase the penetration in some markets. So maybe there will be more to come in the future. But yes, profitability is also an important consideration.

[Miguel Patricio, Chief Executive Officer and Chair of the Board of Directors at Kraft Heinz]

Since we are talking about Brazil, I think that now with the acquisition of Hemmer that is very strong in the South and Heinz is very strong in the Southeast, this gives us even a bigger opportunity to expand our distribution and the strength of our brands. We are really now with great scale in Brazil that we are very happy with how this acquisition is going and the plans that we have in place for the business there.

[Operator]

And we'll take our last question from David Palmer with Evercore ISI. Your line is open.

[David Palmer, Analyst at Evercore ISI]

Thanks. In your prepared remarks about gross margins, you talked about the fact that you're protecting profit dollars and not margin and that, that was causing 450 basis points of decline, and that math makes sense. But I'm sure there's more going on underneath the surface with regard to gross margins. Supply chain, I'm sure was a friction cost. And maybe there's some timing with regard to pricing versus input. So anything that you would call out that was also a factor in gross margins that we can be thinking about even into '23 as a comparison?

[Andre Maciel, Executive Vice President and Global Chief Financial Officer at Kraft Heinz]

Thanks for the question. Look, this is by far the highest impact. But other than the lead that you have, the growth efficiency -- remember that you have the $2 billion that we have communicated and that we are on track to deliver. We delivered the first two years in line with the expectation. And year 3, which is now, we continue to be on track. So that certainly continues. Mix, its effect is relatively small. It's now in the quarter slightly positive as we continue to accelerate the growth platforms where we have higher margins. But the number in the quarter is not significant. So really, in this quarter, it's about the dilutive effects. But again, moving forward, we should expect to continue to deliver the growth efficiencies. And as we continue to price at inflation and the inflation events start to ease, that might put us in a better position for us to continue to recover the margin.

[David Palmer, Analyst at Evercore ISI]

And then on foodservice, the -- very impressive growth there. The over 20% growth in North America does imply some things happening there, some big market share wins. What's driving that? And is that sustainable? And I guess you're just citing that the big global QSRs as the momentum driver for international. And that does sound sustainable in your view?

[Andre Maciel, Executive Vice President and Global Chief Financial Officer at Kraft Heinz]

Thanks for the question. I think there are two things. One thing that I want to highlight that was not in the prepared remarks that our foodservice now in Q2 is 14% higher than Q2 in 2019, which is really remarkable. We -- there is a component of price, right? We've been pricing that channel consistent to what we've been doing in retail. So price also has a lot to do with the growth that you are seeing in Q2. But the volume continues to grow as we expand distribution market share in the -- where we have the information in developed markets in North America, Europe and Central. Regarding QSR strategies, I'll let Rafa talk a little bit to what we are doing on the international zone.

[Miguel Patricio, Chief Executive Officer and Chair of the Board of Directors at Kraft Heinz]

But before Rafa talks about the international zone, I just want to say that -- since you, Andre, compared with '19. In '19, foodservice was -- is a very transactional area for the company, was not really strategic and was a small part of the company that we didn't put a lot of attention. I think we have a great team today with a lot of ambition and really looking at this channel as a critical strategic channel that generates penetration of our brands across the globe. If we are having great momentum in emerging markets, in part, it's because our consumers are getting in touch with our brands in foodservice. So that's a very different change in mindset. And as a consequence, the team changed, yes, I think entirely since '19. Rafael, please?

[Rafael Oliveira, International Zone President at Kraft Heinz]

Yes. The only thing I would complement, I mean, to build on, on what Miguel said, we have a -- say here, we use the model we define for foodservice. We call -- we own the chef, own the kitchen, own the customer. And that reflects the investments we made on chefs because chefs are extremely important, especially on QSR, global QSRs, as you alluded, because that's how you develop recipes or LTO, limited-time offers, with those customers. And this is the door into developing -- into innovating products for them to put in their stores. So we've invested on this capability, and this is paying off big time because then you develop a relationship with those customers.

That takes you to a different level. That allows you to innovate, to price better, to get out of commodity competition. And with that, we continue to use the channel as well to build the brand, I mean, in terms of impressions, a fantastic channel to build brand impressions. So foodservice is a core pillar for our growth both across international but in the U.S. as well. And Carlos can complement that. But we've been very successful with this model of investing on chefs and parting with the customers on product development.

[Carlos Abrams-Rivera, Executive Vice President and President, North America Zone at Kraft Heinz]

Yes. I would say, Rafa, the only thing I would add here is just the fact that the model that we have, we're also looking at it at a global basis. So the same concept of us being able to kind of -- as Miguel and Rafa pointed out, leveraging our points of distribution in away from home in order for us to kind of build our iconic brands in retail. That type of virtuous cycle is something we're going to continue, and we see that paying up for us. At the same time, over the last couple of years, the only -- we reorganized ourselves and focused our team in being -- having kind of the right expertise and capabilities with foodservice, but we have also simplified our portfolio quite a bit. I can tell you that since the last two years, we have reduced the number of SKUs in the U.S. foodservice by app.

So that allows us to actually pivot to the things that really matter to our customers in a way that they can help with both in terms of providing great service and great value in away from home. And with that, let me pass it over to Miguel for some closing remarks.

[Miguel Patricio, Chief Executive Officer and Chair of the Board of Directors at Kraft Heinz]

Okay. Well, thank you all for your questions today. As you are seeing, we are a company in the midst of a transformation. We are proud of what we've done so far, very proud. But each day, we continue to improve and to evolve. And we are just getting started. We have so many opportunities ahead of us, and we are all very excited about what's to come. Thank you very much, and thank you for the continued interest in Kraft Heinz.

[Operator]

[Operator Closing Remarks]

Participants

Corporate Executives

• Anne-Marie Megela, Head of Global Investor Relations
• Miguel Patricio, Chief Executive Officer and Chair of the Board of Directors
• Andre Maciel, Executive Vice President and Global Chief Financial Officer
• Carlos Abrams-Rivera, Executive Vice President and President, North America Zone
• Rafael Oliveira, International Zone President

Analysts

• Bryan Spillane, Bank of America Co.
• Ken Goldman, JPMorgan Chase & Co.
• Andrew Lazar, Barclays PLC
• Chris Growe, Stifel Nicolaus
• Steve Powers, Deutsche Bank Aktiengesellschaft
• Robert Moskow, Credit Suisse Group AG
• Alexia Howard, AllianceBernstein
• David Palmer, Evercore ISI