10-KPeriod: FY2014

Mondelez International, Inc. Annual Report, Year Ended Dec 31, 2014

Filed February 20, 2015For Securities:MDLZ

Summary

Mondelez International, Inc.'s 2014 Form 10-K highlights a period of strategic focus and operational restructuring. The company reported net revenues of $34.2 billion, a slight decrease from the previous year, primarily due to unfavorable currency translations, but saw organic net revenue growth of 2.4%. This growth was driven by higher net pricing across most segments, which helped offset unfavorable volume/mix, particularly in Europe and Asia Pacific. Key initiatives for the year included the announcement of a significant coffee business combination and the launch of a new $3.5 billion restructuring program (2014-2018) aimed at reducing operating costs. The company also continued its share repurchase program, returning capital to shareholders. While reporting a decrease in diluted EPS attributable to Mondelēz International, largely due to a one-time significant item in the prior year, adjusted EPS showed a strong increase of 14.3%, signaling underlying operational improvements and efficiency gains. The company faced headwinds from currency devaluations in emerging markets like Venezuela, impacting profitability in those regions.

Financial Highlights

53 data points
Beta

Revenue

$34.24B

36.8% Gross Margin

Net Income

$2.18B

6.4% Net Margin

EPS (Diluted)

$1.28

Total Assets

$66.77B

Free Cash Flow

$1.92B

Financial Statements
Beta
Revenue$34.24B
Cost of Revenue$21.65B
Gross Profit$12.60B
R&D Expenses$455.00M
SG&A Expenses$8.46B
Operating Income$3.24B
Interest Expense$778.00M
Net Income$2.18B
EPS (Basic)$1.29
EPS (Diluted)$1.28
Shares Outstanding (Basic)1.69B
Shares Outstanding (Diluted)1.71B

Key Highlights

  • 1Net revenues of $34.2 billion with a 2.4% increase in Organic Net Revenue, driven by price increases.
  • 2Launch of a $3.5 billion restructuring program (2014-2018) to reduce operating costs by at least $1.5 billion annually by 2018.
  • 3Announced agreement to combine coffee business (excluding France) with D.E Master Blenders 1753 B.V., expected to result in cash proceeds and a 49% equity interest in a new entity.
  • 4Adjusted EPS increased by 14.3% to $1.76, showing improved operational performance.
  • 5Significant impact from currency devaluations, particularly in Venezuela, Argentina, and Russia, affecting reported revenues and segment operating income.
  • 6Continued share repurchases, demonstrating commitment to returning capital to shareholders.
  • 7Recognition of $57 million in impairment charges for two trademarks in 2014, attributed to lower-than-expected product growth.

Frequently Asked Questions

In 2014, Mondelez International reported net revenues of $34.2 billion, a 3.0% decrease from 2013, largely due to unfavorable currency translations. However, Organic Net Revenue, which excludes currency impacts, divestitures, and other items, increased by 2.4% to $36.0 billion. Diluted EPS attributable to Mondelēz International decreased to $1.28 from $2.19 in 2013. Adjusted EPS, a non-GAAP measure, increased by 14.3% to $1.76.

Key strategic initiatives include the launch of the 2014-2018 Restructuring Program, aimed at reducing operating costs by at least $1.5 billion annually by 2018, and the planned combination of its coffee business (outside of France) with D.E Master Blenders 1753 B.V., which is expected to close in 2015. The company also focuses on 'Transforming Snacking,' 'Revolutionizing Selling,' and 'Driving Efficiency to Fuel Growth'.

Mondelez International faced significant challenges related to currency devaluations, particularly in emerging markets such as Venezuela, Argentina, and Russia, which negatively impacted reported revenues and profitability in those regions. Additionally, the company experienced unfavorable volume/mix in several key markets, notably Europe and Asia Pacific, and faced increased input costs for commodities like cocoa and dairy. The company also identified a material weakness in its internal control over financial reporting related to income tax accounting.

The company continued its share repurchase program, repurchasing $1.9 billion of common stock in 2014 and maintaining $3.1 billion in remaining repurchase capacity as of year-end. Dividends declared per share increased to $0.58 in 2014 from $0.54 in 2013, demonstrating a commitment to returning value to shareholders. The company also managed its debt, with a total debt of $16.7 billion at year-end 2014, down from $17.1 billion in 2013, and a debt-to-capitalization ratio of 0.38.