Mondelez International, Inc. · NASDAQ:MDLZ
Mondelez International — Barclays Global Consumer Staples Conference 2016
59 slides from Mondelez International's conference presentation, Sep 7, 2016
Slide 1: Barclays Global Consumer Staples Conference
Barclays Global Consumer Staples Conference September 7, 2016 Exhibit 99.2
Slide 2: Brian Gladden, EVP and Chief Financial Officer
Brian Gladden EVP and Chief Financial Officer
Slide 3: Forward-looking statements
This presentation contains a number of forward-looking statements. Words, and variations of words, such as “will,” “expect,” “may,” “would,” “aim,” “believe,” “likely,” “plan,” “estimate,” “deliver,” “position,” “potential,” “opportunity,” “target,” “outlook” and similar expressions are intended to
Slide 4: No Longer Pursuing Hershey
Sound strategic and financial rationale for complementary businesses with significant synergies Made a full and fair offer that we believe would have added considerable value for both sets of shareowners Confident in our attractive stand-alone growth and margin expansion prospects No Longer Pursuing
Slide 5: Agenda
1 2 3 4 Agenda Strategic Overview Compelling Financial Framework & Total Return Strong Confidence in Long-term Margin Targets Growth Capabilities and Initiatives
Slide 6: Global Snacking Leader with Focused Portfolio and Advantaged Platform
Notes: Data reflects 2015 Adjusted Net Revenues See GAAP to Non-GAAP reconciliations at the end of this presentation $27B Revenue 165 Countries Served 7 Brands With $1B+ Sales Global Snacking Leader with Focused Portfolio and Advantaged Platform
Slide 7: Compelling Total Return Framework
Compelling Total Return Framework Long-term Growth Targets + Share Repurchase Dividends TSR % Since Spin2 Through August 31, 2016 Adjusted EPS Growth: Double Digit1 Organic Net Revenue Growth: At or Above Category Growth Adjusted Operating Income Growth: High Single Digit1 Constant-currency basis So
Slide 8: Strategies Driving Transformation Agenda
Focus Portfolio Reduce Costs Invest for Growth Coffee Transaction Bolt-On Acquisitions SKU Rat. & Pruning Supply Chain Reinvention Lower Overheads Contemporize the Core Address Key White Spaces E-Commerce & RTM ~85% of Revenue from Snacks Margin Expansion & Investment Fuel Sustainable Revenue & Shar
Slide 9: Progress on Transformation
See GAAP to Non-GAAP reconciliations at the end of this presentation 3-Year Period through 2016E Constant-currency basis Key Priorities Achievements Increasing Focus on Power Brands Investing in Additional A&C Spend Improving Net Productivity 3.4% Organic Net Revenue growth H1 20161 80%+ of investme
Slide 10: Continued Progress Toward Margin Target
Continued Progress Toward Margin Target Adjusted Operating Income Margin1 17%-18% 15.2% See GAAP to Non-GAAP reconciliations at the end of this presentation ~700 bps increase
Slide 11: Confident in Delivering Margin Targets
Embedded Middle Stages Early Stages Indirect cost packages delivering 30% to 65% spending reductions over three years Built consistent tools & capabilities to sustain savings Expanding scope of program Supply Chain Reinvention Zero Based Budgeting Shared Services Key Activities and Results Progress
Slide 12: Building Foundation for Strong Recurring FCF
Declining Cap Ex Requirements Cash Restructuring (In $B) Improving Working Capital (CCC in Days) Expanding margins, lower capex, strong CCC performance, declining restructuring and favorable tax rates provide an attractive model for FCF generation On track to deliver FY16 FCF outlook of $1.4B+ Furth
Slide 13: Prioritizing Capital Return
$3.8 $6.5 $11.1 $12.9 Committed to capital return to shareholders Returned $13B of capital since spin; including $1.8B in H1 2016 Buybacks have reduced share count by ~15% since spin Increased dividend by 12%, announced in Q2; committed to 30%1+ payout Cumulative Capital Return in Billions Based on
Slide 14: Disciplined Capital Allocation Based on Returns
Disciplined Capital Allocation Based on Returns Brand support and route-to-market expansion Strong net productivity Overhead reductions Reinvest to Drive Top-Tier Growth Primarily focused on bolt-on transactions in key categories & emerging markets Opportunistically consider strategic assets in a di
Slide 15: Daniel Myers, EVP, Integrated Supply Chain
Daniel Myers EVP, Integrated Supply Chain
Slide 16: Three Goals. Five Priorities. We Delivered.
Three Year Financial Goals 2013-2015 $3B Gross Productivity Cost Savings $1.5B Net Productivity Cost Savings $1B Cash Flow Priorities Step change leadership talent, capability and engagement Innovative global platforms & network transformation Consumer & Customer Driven Supply Chain Drive productivi
Slide 17: World Class Executing with Excellence
Key Metrics 2013 2015 H1 2016 2018E Lines of the Future 0 35 ~50 ~70 Power Brands on Advantaged Assets ~15% ~25% ~50% ~70% SKUs ~74k ~30k ~25k Suppliers ~100k ~60k ~42k 2.5% 2.8% 1.8% 3.5+% Net Productivity1 (% COGS) 1. 2012-2015 net productivity amounts include Venezuela World Class Executing with
Slide 18: Progressing to Best in Class Cash Management
Cash Conversion Cycle (in days) Based on balances as of year-end Progressing to Best in Class Cash Management Delivered $1.5B+ over the past 2 years1 1. Time period measures from December 31, 2013 to December 31, 2015
Slide 19: Continuing to Drive Cash Management
Payables Target CCC of -20 days by 2018 Continuing to Drive Cash Management Inventory Receivables
Slide 20: Innovative Global Platforms & Network Transformation
Innovative Global Platforms & Network Transformation Closed / Sold Streamlined Greenfields / Brownfields 2016E 27 70 12 JDE 12 - - Total Estimate 39 70 12 Manufacturing Network Transformation Activities October 2012 to December 2016 Oreo Thins – Following China success, rapid expansion across 3 cont
Slide 21: Skarbimierz, Poland
Skarbimierz, Poland
Slide 22: Opava, Czech Republic
a > ame Mondeléz, fest Opava, Czech Republic
Slide 23: Puebla, Mexico
Puebla, Mexico Mondeler. Bead Oe |
Slide 24: Sri City, India
Sri City, India
Slide 25: Insert Video
Insert Video Mondeléz, Beam Os .
Slide 26: Consumer & Customer Driven Supply Chain
6_81 Consumer & Customer Driven Supply Chain eCommerce Responsive customer driven supply chain Supply chain capability for rapid eCommerce growth Focused capabilities Price Pack Architecture Increase accessibility via low price point small formats Maximize packaging platforms to expand occasions Gro
Slide 27: Integrated Lean Six Sigma Procurement Transformation
6_81 Integrated Lean Six Sigma Procurement Transformation Simplicity Stepping Up Productivity Delivery
Slide 28: Room to Keep Fueling Savings Beyond 2018
Room to Keep Fueling Savings Beyond 2018 242 Gold Award Lines (World class efficiency) 18 Platinum Award Sites (All lines reach Gold status) MDLZ Global Efficiency % 64% 72% +80%
Slide 29: Simplifying Our Supply Chain and Leveraging Scale
Simplifying Our Supply Chain and Leveraging Scale 40-90% Simplification Achieved Sugar suppliers down 41% Flavor specs down 70% AP packaging suppliers down 50% NA Freight suppliers down 58% Spend Managed # Suppliers Gross Productivity DPO ~100% ~60% Reduction >5% >100 Days 4 3 2 1 Today Results Benc
Slide 30: 2016 Global Award Winner Procurement Transformation
2016 Global Award Winner Procurement Transformation
Slide 31: We Delivered. And We'll Continue to Deliver.
We Delivered. And We’ll Continue to Deliver.
Slide 32: Tim Cofer, EVP and Chief Growth Officer
Tim Cofer EVP and Chief Growth Officer
Slide 33: Global Snacking Leader with Iconic Brands
Power Brands Global Leadership Attractive Markets #1 Developed Markets ~65% of NR #2 #2 Emerging Markets ~35% of NR #1 Global Regional Global leadership rankings based on Euromonitor 2015. Developed & EM References based on 2015 Adjusted Revenues. See GAAP to Non GAAP reconciliation at the end of th
Slide 34: Challenging Environment
Our Categories have slowed over the last few years… …particularly in Emerging Markets, due to macroeconomic headwinds MDLZ growth modest, but Power Brand focus working GDP slowdown Deep recession and political turmoil GDP contraction driven by oil prices Low growth environment Challenging Environmen
Slide 35: Growth Strategy Addresses Rapidly Changing World
Key Power Shifts Increasing Emphasis on Well-Being Evolving Retail Landscape Time Compression Growing Income Gap Digital Revolution 1 2 3 4 5 Growth Strategy Addresses Rapidly Changing World
Slide 36: Three Strategies to Drive Accelerated Growth
Fill Key White Spaces Expand into areas where we are not present today Contemporize Our Core Better connect our portfolio to today’s consumer Fill Key White Spaces Expand into new need states and geographies Drive Selling and Channel Ubiquity Ensure our brands are available whenever and wherever con
Slide 37: Contemporizing Our Core
Fearless Marketing Well-Being Snacking New Occasions Contemporizing Our Core
Slide 38: Fearless Marketing: Wonderfilled Digital Music
Fearless Marketing: Wonderfilled Digital Music Digital Music Platform Collaboration with local music stars from Malaysia, Indonesia, Philippines 32 million views on local TV and YouTube Oreo revenue in Southeast Asia increased mid-teens
Slide 39: Fearless Marketing: Content Monetization
Fearless Marketing: Content Monetization 12 million views of the live show, digital streams, YouTube, Facebook videos Nearly 1 billion impressions in more than 1,000 media outlets Significant improvement in velocity, distribution & share since the campaign started Heaven Sent
Slide 40: Fearless Marketing: Cadbury Joy Across Channels
Fearless Marketing: Cadbury Joy Across Channels Omni Channel Joy “Tastes like this feels” among Top 5 most-watched videos on YouTube in UK Customized Facebook posts reached targeted audiences “Cadvent” experiential activation generated mid-teens Christmas sales growth Commuters Parents with kids Stu
Slide 41: Re-inventing Well-Being Snacking
2020 MDLZ targets Sat Fat (10)% Sodium (10)% Wholegrain +25% 2020 targets for key brands No High-Fructose Corn Syrup Non GMO No artificials Well-Being marketing Brand narrative Ingredients origin Sustainability Enhance Permissibility of Current Portfolio 70% of innovation against Well-Being Drive We
Slide 42: Core Acceleration Plans Are Working
UK India Russia H1 2016 Results Organic Net Revenue Growth Mid Single Digit High Single Digit Double Digit Market Share 1.5pp 0.2pp 0.9pp Adjusted Gross Profit Margin Note: Market Share data is from Nielsen, June 2016 Year to Date Core Acceleration Plans Are Working
Slide 43: Transforming Our Portfolio to Address Key White Spaces
Well- Being Premium Affordable Consumer White Space Geographic Expansion 2 1 South-East Asia BRICs Africa Transforming Our Portfolio to Address Key White Spaces
Slide 44: Category Expansion in New Geographies
Aspirational and differentiated brand Premium quality, alpine milk credentials Strong local sales and production Leverage MDLZ Biscuits leadership and Gum successful launch $200MM snacking leader Successful Kinh-Do integration Strong share gain in Biscuits & Soft Cakes Significant growth potential i
Slide 45: Entering the U.S.: The World's Largest Chocolate Market
America’s favorite cookie paired with European iconic Chocolate Disruptive cross-category innovation Proven success in other markets Entering the U.S.: The World’s Largest Chocolate Market Green & Black’s Oreo Chocolate Premium with ethically sourced cocoa High-quality, simple ingredients No artific
Slide 46: Building $1B+ eCommerce Snacking Platform
Building Capabilities & Infrastructure Accelerating Business Momentum Assortment, price, content, search, traffic Dedicated team, external talent H1 2016 net revenue 30%+ growth; further acceleration in H2 and 2017 Powerful joint-business plan partnerships Building $1B+ eCommerce Snacking Platform
Slide 47: Driving Power Brand Growth Where We Have Invested
Mid Single Digit High Single Digit High Single Digit Mid Single Digit High Single Digit Mid Single Digit H1 2016 Organic Net Revenue Growth YTD Market Share growing / holding in ~65% of revenues Share performance based on available Nielsen Global Data through August 31, 2016 for measured channels in
Slide 48: Why MDLZ
Advantaged platform with global footprint, focused portfolio and iconic brands Strong track record of driving cost savings and margin expansion Focused growth strategy: Contemporize Portfolio Fill in Key White Spaces Drive Sales & Channel Ubiquity Improving cash flow generation and opportunity for s
Slide 49: Mondelēz International
Mondelez International ad International
Slide 50: Definitions of the Company's Non-GAAP Financial Measures
Definitions of the Company’s Non-GAAP Financial Measures The company’s non-GAAP financial measures and corresponding metrics reflect how the company evaluates its operating results currently and provide improved comparability of operating results. As new events or circumstances arise, these definiti
Slide 51: Outlook
Outlook The company’s outlook for Adjusted Operating Income margin and Free Cash Flow excluding items are non-GAAP financial measures that exclude or otherwise adjust for items impacting comparability of financial results such as the impact of changes in foreign currency exchange rates, restructurin
Slide 52: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations
Slide 53: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations
Slide 54: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations
Slide 55: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations
Slide 56: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations
Slide 57: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations
Slide 58: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations
Slide 59: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations
Mondelez International — Barclays Global Consumer Staples Conference 2016 on 6ix