01—Abstract
Summary
Summary of the 10-K filed February 25, 2013. Cited figures are marked; the original filing is the authoritative source.
Mondelēz International, Inc. (MDLZ) has filed its 2012 10-K report, detailing its performance following a significant corporate restructuring.
A key event was the spin-off of its North American grocery operations into Kraft Foods Group, Inc. on October 1, 2012, positioning Mondelēz as a "Global Snacks Powerhouse" focused on its core snack brands. The company reported net revenues of $35.0 billiona for 2012, with organic net revenues showing a more robust growth of 4.4%, excluding currency impacts and divestitures. Financially, the company incurred substantial one-time Spin-Off Costs of $1,053 million in 2012.
Operating EPS showed slight growth of 0.7% to $1.39b. The company's strategy is centered around leveraging its "Power Brands," such as Oreo and Cadbury, expanding in "Priority Markets," and driving efficiency. Key challenges and considerations for investors include managing commodity price volatility, intense competition, and adapting to evolving consumer preferences, particularly in health and wellness.
Despite the complexities of the spin-off and restructuring programs, Mondelēz International maintained investment-grade credit ratings. The company is strategically focused on growing its global snacks portfolio, particularly in emerging markets, while continuing to invest in innovation and brand strength.
02—Key points
Key Highlights
- Completion of the Spin-Off of Kraft Foods Group on October 1, 2012, transforming Mondelēz into a focused global snacks company.
- Reported Net Revenues of $35.0 billion for 2012, with Organic Net Revenues growing 4.4% on a constant currency basis, excluding divestitures and accounting calendar changes.
- Incurred significant one-time Spin-Off Costs of $1,053 million in 2012, impacting reported earnings.
- Operating EPS grew 0.7% to $1.39 in 2012, indicating resilience despite restructuring.
- Strategic focus on "Power Brands" (e.g., Oreo, Cadbury) and "Priority Markets" to drive growth.
- Significant exposure to commodity price volatility and foreign currency fluctuations, with 82.9% of 2012 net revenues generated outside the U.S.
- Ongoing investments in research and development ($462 million in 2012) and marketing to support brand image and product innovation.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2012, Mondelez International, Inc. kept $0.09.
- Revenue$35.02B100.0%
- Cost of revenue−$21.94B62.7%
- Gross profit$13.08B37.3%
- Operating costs−$9.44B27.0%
- Operating income$3.64B10.4%
- Interest, other & tax−$570.0M1.6%
- Net income$3.07B8.8%
Where FY2012 revenue went
$35.02B- Cost of revenue: $21.94B, 63% of revenue
- SG&A: $9.18B, 26% of revenue
- Net income: $3.07B, 8.8% of revenue
- R&D: $462.0M, 1.3% of revenue
- Interest, other & tax: $570.0M, 1.6% of revenue
Kept 8.8% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2012filed February 25, 2013Financial Statements
FY2012 against FY2011
| Line item | FY2012FY2011 | Change |
|---|---|---|
| Revenue | $35.02B$35.81B | −2.2% |
| Cost of Revenue | $21.94B$22.71B | −3.4% |
| Gross Profit | $13.08B$13.10B | −0.2% |
| R&D Expenses | $462.00M$511.00M | −9.6% |
| SG&A Expenses | $9.18B$9.38B | −2.2% |
| Operating Income | $3.64B$3.50B | +4.0% |
| Interest Expense | $1.18B-$1.38B | +185.1% |
| Net Income | $3.07B$3.55B | −13.7% |
| EPS (Basic) | $1.73$2.01 | −13.9% |
| EPS (Diluted) | $1.71$2.01 | −14.9% |
| Shares Outstanding (Basic) | 1.78B1.76B | +0.7% |
| Shares Outstanding (Diluted) | 1.79B1.77B | +1.0% |
05—Questions
Frequently Asked Questions
What was the main corporate event for Mondelēz International in 2012?
The most significant corporate event was the spin-off of its North American grocery business, Kraft Foods Group, Inc., on October 1, 2012. This separation allowed Mondelēz International to focus on its global snacks business.
How did the spin-off impact the company's financial results?
The spin-off resulted in significant one-time "Spin-Off Costs" of $1,053 million in 2012. The results of Kraft Foods Group were presented as discontinued operations for all periods presented in the filing.
What is Mondelēz International's primary business focus after the spin-off?
Following the spin-off, Mondelēz International repositioned itself as a 'Global Snacks Powerhouse,' focusing on its portfolio of iconic snack brands, including biscuits, chocolate, gum & candy, and beverages, with a strong presence in emerging markets.
What are the key risks mentioned in the report for investors to consider?
Key risks highlighted include intense competition in the food and snacking industries, volatility in commodity and input prices, the need to maintain and expand brand image, the impact of retailer consolidation, foreign currency exchange rate fluctuations, and the challenge of adapting to changing consumer preferences, particularly concerning health and wellness trends.
06—Continue