Mondelez International, Inc. · NASDAQ:MDLZ
Mondelez International — CAGNY Conference 2014
45 slides from Mondelez International's conference presentation, Feb 18, 2014
Slide 1: CAGNY Conference
CAGNY Conference February 18, 2014 Exhibit 99.2 Mondelez International
Slide 2: Irene Rosenfeld Chairman and CEO
Irene Rosenfeld Chairman and CEO
Slide 3: Mondelez International
Mondelez International oad
Slide 4: Agenda
Agenda Long-term growth algorithm and targets Margin improvement and capital allocation Sustaining growth and margin expansion in North America
Slide 5: A global snacks powerhouse
A global snacks powerhouse $35 billion revenues in 2013 75% in fast-growing snacks Category leadership Favorite snacks brands Proven innovation platforms Advantaged geographic footprint
Slide 6: Snacking is a $1.2 trillion global market
Snacking is a $1.2 trillion global market In between meals As a replacement for a meal Source: Euromonitor
Slide 7: Three broad reasons why people snack
Three broad reasons why people snack % of MDLZ Portfolio ~25% ~60% ~15% MY MIND & REFRESH
Slide 8: Snacks are growth categories around the world
Snacks are growth categories around the world Well-aligned with consumer trends Expandable consumption Growth with GDP in emerging markets Higher margins
Slide 9: Near-term global category growth rates have slowed
Category 2011 2012 2013 Near-term global category growth rates have slowed, but expected to return to historical levels Biscuits 7.3% 7.4% 5.5% Chocolate 5.9% 6.0% 5.3% Gum 2.0% 0.1% 0.7% 6.4% 6.2% 4.5% Total Snacks 6.1% 5.9% 4.7% Powdered Beverages 9.7% 11.5% 10.6% Coffee 12.3% 7.2% (1.9)% Total Gl
Slide 10: We are a leader in our categories
# 1 # 1 # 1 # 1 # 1 # 1 # 1 # 2 # 1 # 1 # 1 # 1 # 2 # 2 # 2 # 1 # 1 # 1 # 2 # 2 # 2 # 2 # 2 # 2 # 1 # 2 # 1 # 2 # 1 # 1 North America Europe Global Market Share Latin America Asia Pacific Eastern Europe Middle East & Africa # 3 -- -- # 3 -- -- -- -- # 3 # 3 # 3 # 3 18% 15% 30% 7% 11% 16% Source: Eur
Slide 11: Driving market share gains across our portfolio
Driving market share gains across our portfolio % Revenues Gaining or Holding Share (1) by Category Chocolate ~80% Biscuits ~70% Gum & Candy ~50% Beverages, ~65% Cheese & Grocery (1) Defined as percentage of revenues in key markets for the category with share either increasing or flat versus the sam
Slide 12: Power Brands and innovation platforms driving growth
Power Brands 59% Other Brands 41% Power Brands and innovation platforms driving growth Power Brands growing ~2x company rate – Significantly higher gross margins ~13% of total revenue from new products Based on 2013 Revenue
Slide 13: Large, growing emerging markets footprint
Emerging Markets 39% Developed Markets 61% Large, growing emerging markets footprint Revenue +9% in 2013 Expected to comprise ~45% of total revenue by 2016 Based on 2013 Revenue
Slide 14: Well-positioned for growth and value creation
Organic Net Revenue Growth: At or Above Category Growth Adjusted Operating Income Growth: High Single Digit Adjusted EPS Growth: Double Digit Well-positioned for growth and value creation Long-Term Targets Fast growing categories Category leadership Power Brands & innovation platforms Emerging marke
Slide 15: Dave Brearton CFO
Dave Brearton CF O
Slide 16: Supply Chain Reinvention priorities and financial goals
1 2 3 4 5 Priorities 3 Year Financial Goals Supply Chain Reinvention driving gross margin improvement Step change leadership talent & capabilities Transform global manufacturing platforms Redesign the supply chain network Drive productivity programs to fuel growth Improve cash management $3B Gross P
Slide 17: Making significant progress in SCR initiative
1 4 5 2 3 Making significant progress in SCR initiative Talent & Capabilities Changed 40 of 115 key roles Strengthened L6S capabilities Gross Productivity of 4.5% Net Productivity of 2.5% Productivity Significantly reduced cash cycle Cash Management Manufacturing Platforms New biscuit, chocolate and
Slide 18: Targeting Fit for Purpose overheads
9.2% 1.3% Advertising & Consumer Promotions 13.6% 0.6% Selling MG&A & Other Invest for Growth Fit for Purpose Targeting “Fit for Purpose” overheads (1) Reported SG&A as a % of net revenues was 24.6% in FY 2013. See GAAP to Non-GAAP reconciliation at the end of this presentation 2013 SMG&A Expense as
Slide 19: Zero-Based Budgeting will accelerate cost reductions
– – Zero-Based Budgeting will accelerate cost reductions Savings will drive margin improvement and fuel growth investments Using to identify and capture sustainable cost savings opportunities – Retain balance between top- and bottom-line goals – Improve efficiency and effectiveness Aligned leadershi
Slide 20: Driving double-digit Adjusted EPS growth
Driving double-digit Adjusted EPS growth Primarily driven by high single-digit Adjusted Operating Income growth Modest increases in absolute debt and interest expense Tax rate of ~20% for the next few years, gradually increasing to mid-20s
Slide 21: Strong Free Cash Flow
Strong Free Cash Flow ($ in billions) Net Cash Provided by Operating Activities excluding items and Restructuring Program (1) $4.1 (3) Capital Expenditures (ex Restructuring Program) (1.5) % of Net Revenues 4.4% 2012-14 Restructuring Program (0.3) $2.3 (3) FY 13 FY 14E Combined & 2014 $4.1+ ~(2.0) 5
Slide 22: Disciplined capital deployment based on returns
Disciplined capital deployment based on returns Reinvest in the business to drive top-tier growth Capex ~5% of Net Revenue Route-to-Market/A&C investments in emerging markets Tack-on M&A, especially in emerging markets Return of capital to shareholders Dividend increased 8% in 2013 $7.7B share buyba
Slide 23: Well-positioned for growth and value creation
Organic Net Revenue Growth: At or Above Category Growth Adjusted Operating Income Growth: High Single Digit Adjusted EPS Growth: Double Digit Well-positioned for growth and value creation Long-Term Targets Fast growing categories Category leadership Power Brands & innovation platforms Emerging marke
Slide 24: Mark Clouse President, North America
Mark Clouse President, North America
Slide 25: A North American snacks powerhouse
#1 #2 #1 #1 #2 #1 #1 #2 77% 17% 5% A North American snacks powerhouse ~$6B ~$1B -- #3 2013 Net Revenue: $7B Other 1% Source: ACNielsen Chocolate Candy & Cough Biscuits Gum
Slide 26: Significant progress towards goals, roadmap in place
Sustainable Revenue Growth Transform Margins World Class Team Significant progress towards goals, roadmap in place Objective Goal 2013 Results Roadmap Power Brands & Platforms Sales Execution & DSD “At or Above Category” Organic NR +2.9% (1) (1) Reported net revenues increased 1.3% for FY 2013. See
Slide 27: Power Brands focused on snacking needs
Power Brands focused on snacking needs
Slide 28: Power Brand focus driving acceleration and turnaround
Power Brand focus driving acceleration and turnaround
Slide 29: Innovation is creating incremental usage
Innovation is creating incremental usage MY MIND & REFRESH
Slide 30: Sales strength pulls it all together
Right Pricing & Promotion Right Assortment Right Space Right Category Configuration Right Location for Products Right Displays & Shopper Solutions Sales strength pulls it all together
Slide 31: DSD is critical to winning in store
DSD is critical to winning in store Displays are the best source of incremental sales Multiple touch points drive impulse purchases
Slide 32: Significant margin opportunity in supply chain
Significant margin opportunity in supply chain Manufacturing Majority of existing production lines are 60+ years old Many existing bakeries are sub-scale Logistics Too many distribution centers Sub-optimal locations
Slide 33: Network redesign underway
OPTIMIZED DISTRIBUTION MODEL Network redesign underway STREAMLINE & REINVEST GROWTH PLANT FOR AMERICAS
Slide 34: Salinas on track for Doors Open in Q4 2014
Salinas on track for “Doors Open” in Q4 2014 GROWTH PLANT FOR AMERICAS New capacity for Power Brands Advantaged assets at advantaged costs Fully integrated site To open with 5 lines; expandable to 14 lines World-class technology Logistic optimization for Mexico hub
Slide 35: Streamlining current footprint
Streamlining current footprint Completed closure of Lakeshore Bakery, Toronto 550 positions affected Announced closure of Philadelphia Bakery 350 positions affected with closure by early Upgrading North American asset base Installing 16 new lines Streamline subscale facilities Upgrading assets and s
Slide 36: Optimizing distribution infrastructure
Optimizing distribution infrastructure Eliminating 4 distribution centers by Q3 2014 Enables inventory reductions and service improvements 3 already exited 5% reduction in warehouse costs Transportation efficiencies & effectiveness Improved geographic footprint Ship direct to branches Service improv
Slide 37: Creating a Fit for Purpose organization
Streamline & Simplify Cost Savings & Culture Prioritized Capability Development Creating a Fit for Purpose organization Streamline category responsibility Integrate Canada, eliminate redundancy Focus P&L on categories Harmonize & simplify portfolio Lower cost structure and mindset Zero-Based Budgeti
Slide 38: Plans in place to deliver margin goal
Plans in place to deliver margin goal Adjusted Segment Operating Income Margin (1) 13.8% 14.9% 18% to 21% (1) Reported Segment Operating Income margin was 11.3% in FY 2012 and 12.7% in FY 2013. See GAAP to Non-GAAP reconciliation at the end of this presentation.
Slide 39: Well-positioned for growth and value creation
Well-positioned for growth and value creation Sustainable revenue growth Significant margin improvement Double-digit Adjusted EPS growth Strong cash flow Consistent top-tier financial performance over the long term
Slide 40: Mondelez International
Mondelez International oad
Slide 41: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation As Reported/ Revised (GAAP) Impact of Divestitures (1) Impact of Currency Organic (Non-GAAP) North America 6,991 $ (39) $ $ 6,987 $ 6,903 $ (110) $ - $ 6,793 $ % Change 1.3% 1.0 pp 0.6pp 2.9% (1) Net Revenues to Organic Net Revenues For the Twelve Months Ended Decembe
Slide 42: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation As Reported/ Revised (GAAP) Integration Program and other Acquisition Integration costs (1) Spin-Off Costs and Related Adjustments (2) 2012-2014 Restructuring Program Costs (3) Benefit from Indemnification Resolution (4) Operating Income from Divestitures Gains on Acq
Slide 43: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation As Reported/ Recorded (GAAP) Integration Program and other Acquisition Integration costs (3) Spin-Off Costs and Related Adjustments (4) 2012-2014 Restructuring Program Costs (5) Benefit from Indemnification Resolution (6) Impact from Divestitures Acquisition- related
Slide 44: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Net Cash Provided by Operating Activities (GAAP) 6,410 $ Items Cash impact of the resolution of the Starbucks arbitration (1) (2,616) Cash payments for accrued interest and other related fees associated with debt tendered as of December 18, 2013. (2) Restructuring Pro
Slide 45: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Net Cash Provided by Operating Activities (GAAP) 6,410 $ Capital Expenditures (1,622) Free Cash Flow (Non-GAAP) 4,788 $ Items Cash impact of the resolution of the Starbucks arbitration (1) (2,616) Cash payments for accrued interest and other related fees associated wi