01—Abstract
Summary
Summary of the 10-K filed March 1, 2007. Cited figures are marked; the original filing is the authoritative source.
Mondelez International, Inc. (formerly Kraft Foods Inc.) filed its 2006 10-K report on February 28, 2007.
The report details the company's operations for the fiscal year ended December 31, 2006. A significant event discussed is the impending spin-off of Kraft Foods Inc. from its parent company, Altria Group, Inc., which was planned for March 30, 2007. This separation aimed to establish Kraft as an independent, publicly traded entity.
The company reported robust net revenues and discussed its segment performance across North America and International markets, highlighting strengths in segments like "North America Cheese & Foodservice" and "North America Convenient Meals." The report also detailed ongoing restructuring efforts initiated in 2004, which aimed to improve cost structure and operational efficiency, involving facility closures and workforce reductions. Commodity costs, particularly for energy and coffee, were noted as rising challenges, impacting profitability.
02—Key points
Key Highlights
- Impending spin-off from Altria Group, Inc. planned for March 30, 2007, to create an independent Kraft Foods Inc.
- Net revenues for the fiscal year ended December 31, 2006, were $34.4 billion, a slight increase from the previous year.
- Operating income was $4.5 billion, impacted by restructuring charges and asset impairments.
- The company incurred significant restructuring charges of $673 million in 2006 as part of a multi-year program aimed at cost reduction and efficiency improvements.
- Acquisition of United Biscuits' Spanish and Portuguese operations and Nabisco trademarks in Europe for approximately $1.1 billion.
- Divestiture of several non-core businesses, including rice and pet snacks brands, contributing to portfolio optimization.
- Increased commodity costs, notably for energy and coffee, presenting a challenge to margins, partially offset by price increases and cost savings.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2006, Mondelez International, Inc. kept $0.09.
- Revenue$33.02B100.0%
- Cost of revenue−$21.19B64.2%
- Gross profit$11.83B35.8%
- Operating costs−$7.67B23.2%
- Operating income$4.16B12.6%
- Interest, other & tax−$1.10B3.3%
- Net income$3.06B9.3%
Where FY2006 revenue went
$33.02B- Cost of revenue: $21.19B, 64% of revenue
- SG&A: $7.03B, 21% of revenue
- Net income: $3.06B, 9.3% of revenue
- Other operating costs: $638.0M, 1.9% of revenue
- Interest, other & tax: $1.10B, 3.3% of revenue
Kept 9.3% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2006filed March 1, 200705—Questions
Frequently Asked Questions
What is the significance of the planned spin-off from Altria Group, Inc. for investors?
The planned spin-off, expected in March 2007, will establish Kraft Foods Inc. as an independent entity. This allows investors to evaluate the company's performance and strategy on a standalone basis, free from the influence and reporting structures of its former parent, Altria Group, Inc.
What were the major financial and operational drivers for Kraft Foods in 2006?
Key financial drivers included a slight increase in net revenues to $34.4 billion and operating income of $4.5 billion. Operationally, the company pursued a significant restructuring program, acquired parts of United Biscuits, and divested non-core assets. Rising commodity costs, especially for coffee and energy, were a notable challenge impacting profitability.
How did the company manage rising commodity costs?
Kraft Foods addressed rising commodity costs, particularly for energy and coffee, through a combination of strategies. These included implementing price increases on certain products, focusing on cost savings through its restructuring program, and utilizing hedging techniques to mitigate some of the impact of price fluctuations on key raw materials.
What is the company's approach to acquisitions and divestitures?
The company pursues a disciplined approach to acquisitions and divestitures as part of its growth strategy. In 2006, this included the acquisition of United Biscuits' European operations and the divestiture of several brands like rice and pet snacks, aiming to strengthen its portfolio and focus on core, high-potential businesses.
06—Continue