Mondelēz International Remains Confident of Achieving Long-term Growth
Mondelēz International, the US-based global snacking giant, has reported a 12.5% decrease in net revenue to $25.923 billion for 2016, driven by the coffee business transactions, deconsolidation of the company’s Venezuelan operations and currency headwinds. However, organic net revenue increased 1.3%. Reported operating income decreased by 71.1% to $2.569 billion but adjusted operating income rose by 13.3% to $3.953 billion.
Mondelēz International is a world leader in biscuits, chocolate, gum, candy and powdered beverages, featuring global ‘Power Brands’ such as Oreo and belVita biscuits; Cadbury Dairy Milk and Milka chocolate; and Trident gum.
Operating income margin was 9.9%, down 20.1 percentage points, driven by the prior-year gain on the coffee business transactions, partially offset by the prior year loss on the Venezuela deconsolidation. Adjusted operating income margin expanded 230 basis points to 15.3%. These results reflect continued reductions in overhead costs and supply chain productivity savings.
The company returned $3.7 billion of capital to shareholders through share repurchases and dividends during the year.
“We continue to make solid progress toward our near-term margin targets, while investing for long-term growth,” says Irene Rosenfeld, chairman and chief executive of Mondelēz International. “Despite significant economic disruptions, political uncertainties and slower global category growth, we remain confident in and committed to our balanced strategy for both top- and bottom-line growth. Throughout the year, we continued to sharpen the focus of our portfolio, increase Power Brand investments and modernize our supply chain. These actions, together with our excellent cost discipline, position us well to deliver strong operating leverage that will drive sustainable value creation for our shareholders.”
Mondelēz International expects organic net revenue to increase at least 1% in 2017 and adjusted operating income margin in the mid-16 percent range. The company also expects double-digit adjusted EPS growth on a constant-currency basis. The company estimates currency translation would reduce net revenue growth by approximately 1% and adjusted EPS by approximately $0.03.
The company remains committed to its 2018 adjusted operating income margin target of 17% to 18%.
