Mondelez International, Inc. · NASDAQ:MDLZ
Mondelez International — Investor Presentation (August 2013)
44 slides from Mondelez International's investor presentation, Aug 27, 2013
Slide 1: Mondelez International
Exhibit 99.1 Mondelez International August 2013 0
Slide 2: Forward-looking statements
Forward-looking statements This presentation contains a number of forward-looking statements. The words “will,” “expect,” “outlook,” “guidance,” “drive,” “commitment,” “accelerate,” “improve,” “implied,” “increase,” “deliver,” “growth,” and similar expressions are intended to identify our forward-lo
Slide 3: Creating significant value for shareholders
Creating significant value for shareholders Fix Successfully turned around Kraft Foods by strengthening brand 2006–2009 equities and rewiring the organization Strategically repositioned the company to concentrate on the core Focus categories, priority markets and Power Brands to drive top-tier 2007–
Slide 4: In 2006, Kraft was facing significant challenges …
In 2006, Kraft was facing significant challenges … Portfolio “harvested” over time and misaligned with consumer and growth trends Concentrated Poor Operating Unfocused Portfolio(1) in Low-Growth Markets(1) Fundamentals Developing Markets, Oceania, North Asia 13% Weak brand equities Grocery with limi
Slide 5: ... which drove margin declines and share losses
... which drove margin declines and share losses Deteriorating financial performance ... ... and share losses Gross Margin (ex. items)(1) OI Margin (ex. items)(1) % Rev. Gaining / Holding Share(2) (410)bps (570)bps 40.3% 39.2% 21.0% 37.1% 36.1% 36.2% 19.1% 16.5% 15.3% 15.3% 26% 2002 2003 2004 2005 2
Slide 6: Fixed the base – 2006 to 2009
Fixed the base – 2006 to 2009 Strengthened Rejuvenated Financial Brand Equities Rewired Organization Performance Organic Revenue Growth (1) Improved product quality Upgraded management talent 4%+ 4.5% – ~2/3 revenue preferred vs. – 80% of top leaders new to ~44% in 2006 company / position Developed
Slide 7: Focused the portfolio – 2007 to 2010
Focused the portfolio – 2007 to 2010 % Revenue from % Revenue from Immediate % Revenue from Snacks Developing Markets Consumption Channel 50% 28% ~20% 29% 13% ~10% (1) (2) (1) (2) (2) (2) 2006 2010 2006 2010 2006 2010 Divestitures Acquisitions Multiple to LTM EBITDA 12.9x(3) 14.9x 13.0x 13.2x (1) As
Slide 8: Created a virtuous cycle of growth in each region …
Created a virtuous cycle of growth in each region … Focus on Power Brands & Priority Markets Expand Reinvest Gross Margin in Growth Leverage Overheads 7
Slide 9: … Driving superior performance – 2010-2012
… Driving superior performance – 2010-2012 Revenue performance exceeded that of peers Outperformed peer margins in a period of unprecedented commodity inflation Drove EPS growth over 550 bps above peer average Organic Revenue Growth (1) Adjusted OI Margin (1) Adjusted EPS Growth (1) Increased margin
Slide 10: Underlying strength at both MDLZ and KRFT
Underlying strength at both MDLZ and KRFT MDLZ organic growth near peers, with dramatic outperformance on margins KRFT organic growth above peers, with margins constant vs. peer decline Organic Revenue Growth(1) Adjusted OI Margin(1) 7.0% 11.5% 12.2% 120bps 6.0% 11.0% 4.1% 4.6% 5.2% (120)bps (2) (2)
Slide 11: Separated to focus on distinct strategic priorities
Separated to focus on distinct strategic priorities Mondelez International – 2011 Kraft Foods Group – 2011 Net Revenues of $36bn Net Revenues of $19bn North America 19% North Developing Markets America 44% Europe 100% 37% Cheese & ~75% Snacks U.S. Grocery Convenient 10% Meals 18% U.S. Biscuits Groce
Slide 12: Strong performance and separation unlocked value … resulting in superior TSR
Strong performance and separation unlocked value … resulting in superior TSR (To June 30, 2013) Since Spin Announcement (August 4, 2011) 3-Year 5-Year 98% 85% 86% 57% 46% 39% MDLZ+KRFT Peer Avg MDLZ+KRFT Peer Avg MDLZ+KRFT Peer Avg Source: FactSet. Note: Peer set includes Campbell, Coca-Cola, ConAgr
Slide 13: Mondelez International is well-positioned for success
Mondelez International is well-positioned for success Advantaged Fast- Favorite Geographic Growing Snacks Footprint Categories Brands Proven Strong World-Class Innovation Routes-to- Talent & Platforms Market Capabilities 12
Slide 14: Virtuous cycle provides framework to achieve long-term targets ...
Virtuous cycle provides framework to achieve long-term targets ... Long-Term Targets Focus on Power Brands & Priority Markets Organic Net 5%-7% Revenue Growth Reinvest Expand Operating High Single- in Gross Growth Margin Income Growth Digit (cst. FX) Operating Double-Digit EPS Growth (cst. FX) Lever
Slide 15: ... that are top-tier in the food industry
... that are top-tier in the food industry Long-Term Targets Revenue EPS “Double- 5-7% Digit” Hershey 5-7% Hershey 8-10% (1) Coca-Cola 5-6% ConAgra 7-9% Nestlé 5-6% Kellogg 7-9% “At Least “High Single- Danone Coca-Cola Digit” 5%” “Mid Single- “High Single- PepsiCo General Mills Digit” Digit” “High S
Slide 16: Top-tier, long-term revenue growth target supported by advantaged portfolio
Top-tier, long-term revenue growth target supported by advantaged portfolio By Category By Geography Low-to-mid Ch./Groc. single digit Gum & Candy Emerging Double digit growth Markets growth Beverages 5% - 7% Mid-to-high Chocolate Organic Growth Low-to-mid single digit Developed single digit growth
Slide 17: Significant operating income growth driven by margin expansion
Significant operating income growth driven by margin expansion Strong track record of margin gains 250 bps of opportunity from gross margin expansion Adjusted Operating Income Margin (1) +50bps excluding restructuring 14% -16% 12.2% 11.5% 11.0% 9.2% 9.6% 2008 2009 2010 2011 2012 LT Target 16 (1) See
Slide 18: Focused strategy to drive base margin expansion
Focused strategy to drive base margin expansion Europe North America 2012 Adj. OI Margin (1) 13.0% 13.9% Target OI Margin 13%–16% 18%–21% Opportunity +250bps +500bps Key Drivers: Product Focus Drive Power Brands and Drive Power Brands and product mix product mix Supply Chain Upgrade certain Cadbury
Slide 19: H1 provides solid foundation for strong performance in H2 and 2014
H1 provides solid foundation for strong performance in H2 and 2014 Strong underlying fundamentals in H1 – High-quality revenue growth fueled by strong vol / mix – 60% of revenue gained / held share – Power Brands up 8% – Strong growth in Biscuits (+8%)(1) and Chocolate (+6%)(1) – Emerging Markets up
Slide 20: Maintained 2013 outlook based on strong H2
Maintained 2013 outlook based on strong H2 Actual Implied Outlook H1’13(1) H2’13 FY’13 Organic Revenue Growth 3.8% ~6% Low end of 5-7% Adjusted OI Margin 10.8% ~13% ~12% Adjusted Effective Tax Rate 5.8% 16-20% 12-14% Adjusted EPS $0.71 $0.84-$0.89 $1.55-$1.60 % vs PY – Cst Fx 14-18%(2) (1) See GAAP
Slide 21: Accelerating investments in 2013 enables significant margin expansion in 2014
Accelerating investments in 2013 enables significant margin expansion in 2014 Adjusted Operating Income Margin ~(10) bps +60 to (50) to +60 to (10) to +90 bps (70) bps +90 bps (20) bps High 12s (1) (10) to 12.2% (20) bps ~12% 2012 Base Emerging Ongoing 2013 Base Emerging Ongoing 2014 Margin Markets
Slide 22: Disciplined capital deployment
Disciplined capital deployment Solid Balance Sheet – Total Debt Steady ROIC Improvement (1) Targeting improvement +120bps of +30-50bps $19.4bn 9.1% per annum $18.1bn 8.4% 7.9% 7.0% Net Debt $15 - $16bn Dec. 2012 Jun. 2013 2010 2011 2012 2012 9mo KFT MDLZ Investment-grade with access to CP Strong imp
Slide 23: Significant increase in return of capital to shareholders …
Significant increase in return of capital to shareholders … Priorities for Use of Free Cash Flow 1 Reinvest in the business to drive top-tier growth 2 Tack-on M&A, especially in emerging markets 3 Return of capital to shareholders – Significantly increasing share repurchase authorization from $1.2B
Slide 24: … Consistent with long-standing commitment
… Consistent with long-standing commitment Cumulative Return of Capital 2006-2013E ($bn) (cash dividends plus share repurchases) $20.3 $18.4 $16.3 6.7 $14.3 5.7 $12.3 5.7 $10.6 5.7 $8.2 5.7 5.7 12.6 13.6 5.0 10.6 $2.8 8.5 6.6 1.3 4.9 3.2 1.6 2006 2007 2008 2009 2010 2011 2012 2013E Cash Dividends Sh
Slide 25: Committed to delivering top-tier performance
Committed to delivering top-tier performance Mondele- z International is a unique, global consumer staples company with an advantaged footprint in emerging markets, strong positions in fast-growing snacking categories and iconic Power Brands Management has a strong record of delivering TSR well abov
Slide 26: Mondelez International
Mondelez International aad
Slide 27: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Kraft Foods Inc. Gross Profit/Operating Income and Related Margins ($ in millions except percentages) (Unaudited) Gain on As Separation Restructuring Asset Loss on Sale Redemption of (Gain)/Loss on Excluding Reported Integration Program Program Impairment of Food Unit
Slide 28: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Kraft Foods Inc. Net Revenues to Organic Net Revenue Growth (percentages) (Unaudited) Impact of As Reported Divestitures / Impact of Impact of Organic (GAAP) Other Acquisitions Currency (Non-GAAP) For the Twelve Months Ended: December 31, 2007 8.6% (0.6)pp 0.8pp 3.1pp
Slide 29: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Kraft Foods Inc. Operating Income Growth (percentages) (Unaudited) Gain on As Separation Restructuring Asset Loss on Sale Redemption of (Gain)/Loss on Excluding Reported Integration Program Program Impairment of Food United Biscuits Divestitures, Items (Non- (1) (2) (
Slide 30: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Kraft Foods Inc. Operating Income Growth (percentages) (Unaudited) Gain on As Restructuring Asset Redemption of (Gain)/Loss on Excluding Reported Integration Program Impairment United Biscuits Divestitures, Items (Non- (GAAP) costs (1) costs (3) costs investment net G
Slide 31: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Kraft Foods Inc. Free Cash Flow as a Percentage of Net Earnings ($ in millions) (Unaudited) For the Twelve Months Ended December 31, 2006 2009 Net Cash Provided by Operating Activities (GAAP) $ 3,720 $ 5,084 Capital Expenditures (1,169) (1,330) Free Cash Flow (Non-GAA
Slide 32: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Kraft Foods Inc. Net Revenues to Organic Net Revenues ($ in millions, except percentages) (Unaudited) For the Years Ended December 31, 2010 2009 $ Change % Change Organic Net Revenues (Non-GAAP) $ 39,874 $ 38,645 $ 1,229 3.2% Impact of divestitures 21 109 (88) (0.3)pp
Slide 33: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Kraft Foods Inc. Reported to Adjusted Operating Income Margin ($ in millions, except percentages) (Unaudited) As Integration Restructuring Acquisition- Loss on Reported Program Spin-Off Program Related Impact of Divestitures, As Adjusted (GAAP) Costs (1) Costs (2) Cos
Slide 34: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Kraft Foods Inc. Diluted EPS to Adjusted EPS (Unaudited) For the Years Ended December 31, 2010 2009 % Change Adjusted EPS $ 2.01 $ 1.86 8.1 % Integration Program costs and other acquisition integration costs (1) (0.29) (0.01) Acquisition-related costs (2) and financin
Slide 35: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Mondelez International Net Revenues to Organic Net Revenues ($ in millions, except percentages) (Unaudited) For the Years Ended December 31, 2010 2009 $ Change % Change Organic Net Revenues (Non-GAAP) $ 22,369 $ 21,486 $ 883 4.1% Impact of foreign currency (223) - (22
Slide 36: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Mondelez International Reported to Adjusted Operating Income Margin ($ in millions, except percentages) (Unaudited) Integration Program Costs and other Spin-Off As acquisition Costs and Restructuring Acquisition- (Gain)/Loss on Revised integration related Program Rela
Slide 37: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation - International Mondelez Reported to Adjusted Operating Income Margin ($ in millions, except percentages) (Unaudited) 2012-2014 Integration Spin-Off Costs Restructuring As Revised Program and related Program Impact of As Adjusted (GAAP) Costs (1) adjustments (2) Costs
Slide 38: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Kraft Foods Group Net Revenues to Organic Net Revenues ($ in millions, except percentages) (Unaudited) For the Years Ended December 31, 2010 2009 $ Change % Change Organic Net Revenues (Non-GAAP) $ 17,589 $ 17,248 $ 341 2.0% Impact of divestitures(1) 14 30 (16) (0.1)p
Slide 39: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Kraft Foods Group Reported to Adjusted Operating Income Margin ($ in millions, except percentages) (Unaudited) As Restructuring Loss on Reported Program Impact of Divestitures, As Adjusted (GAAP) Costs (1) Divestitures (2) net (Non-GAAP) For the TwelveMonthsEndedDecem
Slide 40: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Mondelez International Segment Operating Income To Adjusted Segment Operating Income For the Twelve Months Ended December 31, 2012 ($ in millions, except percentages) (Unaudited) 2012-2014 Integration Spin-Off Costs Restructuring As Revised Program and Related Program
Slide 41: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Mondelez International Net Revenues to Organic Net Revenues by Consumer Sector For the Six Months Ended June 30, ($ in millions, except percentages) (Unaudited) % Change As Reported/ Revised Impact of Impact of Impact of Organic As Reported Organic (GAAP) Divestitures
Slide 42: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Mondelez- International Operating Income Margin To Adjusted Operating Income Margin For the Six Months Ended June 30, 2013 ($ in millions, except percentages) (Unaudited) Integration Program and Gains on As other 2012-2014 acquisition Reported/ acquisition Spin-Off Co
Slide 43: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Mondelez International Effective Tax Rate To Adjusted Effective Tax Rate For the Six Months Ended June 30, 2013 ($ in millions, except percentages) (Unaudited) Integration Program and Gains on other 2012-2014 acquisition acquisition Restructuring Net Earnings and As R
Slide 44: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Mondelez International Diluted EPS to Adjusted EPS (Unaudited) Diluted EPS Diluted EPS Attributable to Mondelez International for the Six Months Ended June 30, 2012 (GAAP) $ 1.03 Discontinued operations, net of income taxes 0.57 Diluted EPS Attributable to Mondelez In
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