10-KPeriod: FY2015

Mondelez International, Inc. Annual Report, Year Ended Dec 31, 2015

Filed February 19, 2016For Securities:MDLZ

Summary

Mondelez International, Inc. (MDLZ) reported significant strategic changes and financial results for the fiscal year ending December 31, 2015. The company completed a major transaction by combining its global coffee businesses with D.E Master Blenders 1753 B.V. to form Jacobs Douwe Egberts (JDE), retaining a significant equity interest. This move allowed Mondelez to sharpen its focus on its core global snacking portfolio, which includes iconic brands like Oreo and Cadbury. Financially, the company's net revenues saw a decrease of 13.5% to $29.6 billion, largely due to unfavorable currency translation effects and the deconsolidation of its coffee business. However, Organic Net Revenue showed growth of 3.7%, indicating underlying business strength. Diluted Earnings Per Share (EPS) saw a substantial increase to $4.44, primarily driven by a significant gain from the coffee business transaction. The company also continued its share repurchase program, demonstrating a commitment to returning capital to shareholders.

Financial Highlights

54 data points
Beta

Revenue

$29.64B

38.8% Gross Margin

Net Income

$7.27B

24.5% Net Margin

EPS (Diluted)

$4.44

Total Assets

$62.84B

Free Cash Flow

$2.21B

Financial Statements
Beta
Revenue$29.64B
Cost of Revenue$18.12B
Gross Profit$11.51B
R&D Expenses$409.00M
SG&A Expenses$7.58B
Operating Income$8.90B
Interest Expense$609.00M
Net Income$7.27B
EPS (Basic)$4.49
EPS (Diluted)$4.44
Shares Outstanding (Basic)1.62B
Shares Outstanding (Diluted)1.64B

Key Highlights

  • 1Deconsolidation of global coffee business into Jacobs Douwe Egberts (JDE), retaining a 43.5% equity interest, which resulted in a significant pre-tax gain of $6.8 billion.
  • 2Organic Net Revenue grew by 3.7%, demonstrating underlying business resilience despite a 13.5% reported net revenue decrease (to $29.6 billion) primarily due to currency headwinds and the coffee business divestiture.
  • 3Diluted EPS attributable to Mondelēz International increased substantially to $4.44, largely influenced by the coffee business transaction gain.
  • 4The company continued its transformation agenda, focusing on its global snacking portfolio and Power Brands.
  • 5Significant share repurchases continued, with $3.6 billion in shares bought back in 2015 under an expanded program.
  • 6Deconsolidation of Venezuelan operations due to loss of control and currency inexchangeability resulted in a pre-tax loss of $778 million.
  • 7Restructuring charges related to the 2014-2018 program totaled $711 million in 2015, aimed at cost structure improvements.

Frequently Asked Questions

Mondelez International's most significant strategic move in 2015 was the combination of its global coffee businesses with D.E Master Blenders 1753 B.V. to form Jacobs Douwe Egberts (JDE). While the coffee business was deconsolidated, the company retained a substantial equity interest in JDE, allowing it to focus more intensely on its core global snacking portfolio.

Currency fluctuations, particularly the strengthening of the U.S. dollar against various global currencies, had a material negative impact on Mondelez International's reported net revenues and operating income. For 2015, unfavorable currency translation reduced net revenues by approximately $3.8 billion, or 12.6 percentage points.

Mondelez International deconsolidated its Venezuelan operations at the end of 2015 due to a loss of control and lack of currency exchangeability. This action resulted in a significant pre-tax loss of $778 million, reflecting the impairment of its investment and receivables in the country, and means Venezuela's results will no longer be included in consolidated financial statements going forward.

In 2015, Mondelez International continued its commitment to returning capital to shareholders through share repurchases, buying back $3.6 billion worth of its common stock under an expanded program. The company also continued to pay dividends, with declared dividends of $0.64 per share for the year, reflecting a 13% increase in the quarterly dividend approved in July 2015.