Mondelez International, Inc. · NASDAQ:MDLZ
Mondelez International — FY2017 Earnings Presentation
29 slides from Mondelez International's earnings presentation, Jan 31, 2018
Slide 1: Full-Year & Q4 2017 Results
Full-Year & Q4 2017 Results January 31, 2018
Slide 2: Forward-looking statements
Forward-looking statements This presentation contains a number of forward-looking statements. Words, and variations of words, such as “will,” “expect,” “could,” “likely,” “plan,” “believe,” “estimate,” “potential,” “positioned,” “drive,” “deliver,” “commitment,” “guidance,” “target,” “outlook” and s
Slide 3: Strong 2017 Margin and Earnings Performance
Strong 2017 Margin and Earnings Performance Organic Net Adjusted Operating Adjusted EPS Return of Capital Revenue Growth Income Margin Growth Q4 2.4% 15.9% +21% ~$0.7B Includes 60 bps benefit + 180 bps @ cst fx from lapping India demonetization 2017 0.9% 16.3% +15% ~$3.4B Includes (40) bps impact +
Slide 4: Three CEO Priorities
Three CEO Priorities • Get to know our business and meet consumers, customers, colleagues • Execute our 2018 business plan with excellence • Lead comprehensive review to develop long-term strategic framework 4
Slide 5: 2018 Financial Targets
2018 Financial Targets Organic Net Adjusted Operating Adjusted EPS Revenue Growth Income Margin Growth +1-2% ~17% Double Digit @ cst fx 5
Slide 6: Power Brands and Emerging Markets Drove Growth
Power Brands and Emerging Markets Drove Growth Q4 Organic Net Q4 2017 Revenue Growth +2.4% Power Brands 3.7% 2.1% Pricing: +210 bps Vol/Mix: +30 bps Emerging Markets 6.3% 3.6% 2017 Organic Net Developed Markets 0.3% (0.8)% Revenue Growth +0.9% eCommerce1 ~40% 40%+ Pricing: +150 bps Vol/Mix: (60) bps
Slide 7: Good Organic Net Revenue Growth in 3 of 4 Regions
Good Organic Net Revenue Growth in 3 of 4 Regions Europe AMEA Latin America North America Q4 1.4% 6.9% 5.5% (0.8)% 2017 1.3% 2.7% 3.5% (2.4)% 7
Slide 8: Continued Strong Adjusted OI Margin Expansion
Continued Strong Adjusted OI Margin Expansion Full-Year Q4 +180bps +600bps 16.3% 15.0% 15.9% 12.7% 14.1% 11.6% 10.3% 2013 2014 2015 2016 2017 Q416 Q417 +600bps of margin growth over past 4 years +180bps of expansion driven by overhead reduction in Q4 2017 expansion of +130bps driven by signifi
Slide 9: Regional Adjusted OI Margins Driven by SG&A Savings
Regional Adjusted OI Margins Driven by SG&A Savings Europe AMEA Latin America North America 19.7% 20.2% 20.1% 18.1% 15.5% 13.1% 12.9% Adjusted 11.7% Operating Income +160 bps +140 bps +260 bps (10) bps Margin 2016 2017 2016 2017 2016 2017 2016 2017 9
Slide 10: 2017 Snacks Category Performance
2017 Snacks Category Performance 2017 (incl. malware impact) Snacks Category Growth1 Organic Net Gaining/ Revenue Holding 3.4% Growth Share2 Total Snacks 1.3% ~40% 2.3% 2.1% Biscuits 0.8% ~30% Chocolate 5.0% ~65% Gum & Candy (4.9)% ~15% 2015 2016 2017 1. Category growth based on available Nielsen Gl
Slide 11: Double-Digit Adjusted EPS Growth
Double-Digit Adjusted EPS Growth FY Adjusted EPS Q4 Adjusted EPS 2016 Adjusted EPS $1.86 2016 Adjusted EPS $0.44 Operating Income $0.17 Operating Income $0.05 Shares $0.05 Shares $0.01 Taxes ($0.05) Taxes -- Interest Expense $0.08 Interest Expense $0.02 Equity Income (JVs) $0.02 Equity Income (JVs)
Slide 12: Returning Significant Capital to Shareholders
Returning Significant Capital to Shareholders Cumulative Capital Return in $ Billions 20 $18.2 Returned $18B+ billion since spin 18 16 $14.8 $5.2 Increased repurchase authorization by $6B, 14 12 $11.1 $4.0 extending expiration date to Dec 31, 2020 10 $2.9 8 Targeting dividend growth in excess
Slide 13: U.S. Tax Reform Implications
U.S. Tax Reform Implications Estimated Impact on Q4 2017 Results Ongoing Impact on Effective Tax Rate • Net $59 million benefit, including: • Impacts to future effective tax rate: o One-time, non-cash benefit of $1.3 billion to P&L o Lower tax rate on U.S. earnings due to re-measurement of U.S. net
Slide 14: Keurig Dr Pepper Merger Creates Additional Value for MDLZ
Keurig Dr Pepper Merger Creates Additional Value for MDLZ Key Transaction Details Iconic Brands Across Beverages • 24.2% KGM stake becomes 13-14% in new entity • MDLZ will retain 2 board seats • Expect accretion in first full year… while providing a significant increase in dividends • Maintain accou
Slide 15: 2018 Outlook
2018 Outlook 2018 Outlook1 Organic Net Revenue growth 1-2% Adj. Operating Income margin Approx. 17% Adj. EPS growth (cst FX) Double-Digit Free Cash Flow ~$2.8 billion Other Financial Metrics Currency Impact on Adjusted EPS2 $0.12 benefit Interest Expense, Net <$400 million Adjusted Effective Tax Rat
Slide 16: Summary
Summary • Delivered strong margin expansion and double-digit earnings growth • Improved H2 top-line results, but results still below our expectations • Balanced top-line outlook for 2018 with sequential improvement • Engaged in fresh look at business and strategic review… will provide more details l
Slide 17: Average FX Rates for Key Countries
Average FX Rates for Key Countries Source: XE.com Full Year 20171 January 25th Rate 2 Impact vs 2017 Argentine Peso 16.56 / $US 19.57 / $US Australian Dollar US$0.77 / AUD US$0.81 / AUD Brazilian Real 3.19 / $US 3.19 / $US Canadian Dollar US$0.77 / CAD US$0.81 / CAD Chinese Yuan 6.76 / $US 6.37 / $U
Slide 18: Outlook
Outlook Our outlook for 2018 Organic Net Revenue growth, Adjusted Operating Income margin, Adjusted EPS growth on a constant currency basis, Adjusted Effective Tax Rate and Free Cash Flow are non-GAAP financial measures that exclude or otherwise adjust for items impacting comparability of financial
Slide 19: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations Net Revenues to Organic Net Revenue (in millions of U.S. dollars) (Unaudited) Latin North Mondelēz America AMEA Europe America International For the Three Months Ended December 31, 2017 Reported (GAAP) $ 900 $ 1,449 $ 2,816 $ 1,801 $ 6,966 Divestitures - (4) (2) - (6
Slide 20: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations Net Revenues to Organic Net Revenue (in millions of U.S. dollars) (Unaudited) Power Non-Power Mondelēz Emerging Developed Mondelēz Brands Brands International Markets Markets International For the Three Months Ended December 31, 2017 Reported (GAAP) $ 5,129 $ 1,837 $
Slide 21: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations Net Revenues to Organic Net Revenue (in millions of U.S. dollars) (Unaudited) For the Three For the Three For the Six Months Ended Months Ended Months Ended September 30, December 31, December 31, 2017 Reported (GAAP) $ 6,530 $ 6,966 $ 13,496 Divestitures (18) (6) (2
Slide 22: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations Gross Profit/Operating Income To Adjusted Gross Profit/Operating Income (in millions of U.S. dollars) (Unaudited) For the Three Months Ended December 31, 2017 Gross Operating Net Gross Profit Operating Income Revenues Profit Margin Income Margin Reported (GAAP) $ 6,9
Slide 23: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations Gross Profit/Operating Income To Adjusted Gross Profit/Operating Income (in millions of U.S. dollars) (Unaudited) For the Twelve Months Ended December 31, 2017 Gross Operating Net Gross Profit Operating Income Revenues Profit Margin Income Margin Reported (GAAP) $ 25
Slide 24: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations Operating Income To Adjusted Operating Income (in millions of U.S. dollars) (Unaudited) For the Twelve Months Ended For the Twelve Months Ended For the Twelve Months Ended December 31, 2013 December 31, 2014 December 31, 2015 Operating Operating Operating Net Operati
Slide 25: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations Segment Data (in millions of U.S. dollars) (Unaudited) For the Twelve Months Ended December 31, 2017 Unrealized G/(L) on General Amortization Latin North Hedging Corporate of Other Mondelēz America AMEA Europe America Activities Expenses Intangibles Items Internation
Slide 26: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations Net Revenues to Organic Net Revenues by Consumer Sector (in millions of U.S. dollars) (Unaudited) Gum & Total Cheese & Mondelēz Biscuits Chocolate Candy Snacks Beverage Grocery International For the Twelve Months Ended December 31, 2017 Reported (GAAP) $ 10,772 $ 8,0
Slide 27: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations Diluted EPS to Adjusted EPS (Unaudited) For the Three Months Ended December 31, 2017 2016 $ Change % Change Diluted EPS attributable to Mondelēz International (GAAP) $ 0.53 $ 0.06 $ 0.47 783.3 % 2014-2018 Restructuring Program costs 0.11 0.15 (0.04) Intangible asset
Slide 28: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations Diluted EPS to Adjusted EPS (Unaudited) For the Twelve Months Ended December 31, 2017 2016 $ Change % Change Diluted EPS attributable to Mondelēz International (GAAP) $ 1.91 $ 1.05 $ 0.86 81.9 % 2014-2018 Restructuring Program costs 0.39 0.51 (0.12) Acquisition integ
Slide 29: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations Net Cash Provided by Operating Activities to Free Cash Flow (in millions of U.S. dollars) (Unaudited) For the Twelve Months Ended December 31, 2017 Net Cash Provided by Operating Activities (GAAP) $ 2,593 Capital Expenditures (1,014) Free Cash Flow (Non-GAAP) $ 1,579
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