01—Abstract
Summary
Summary of the 10-K filed February 19, 2016. Cited figures are marked; the original filing is the authoritative source.
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 billiona, 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 $4.44b, 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.
02—Key points
Key Highlights
- Deconsolidation 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.
- Organic 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.
- Diluted EPS attributable to Mondelēz International increased substantially to $4.44, largely influenced by the coffee business transaction gain.
- The company continued its transformation agenda, focusing on its global snacking portfolio and Power Brands.
- Significant share repurchases continued, with $3.6 billion in shares bought back in 2015 under an expanded program.
- Deconsolidation of Venezuelan operations due to loss of control and currency inexchangeability resulted in a pre-tax loss of $778 million.
- Restructuring charges related to the 2014-2018 program totaled $711 million in 2015, aimed at cost structure improvements.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2015, Mondelez International, Inc. kept $0.25.
- Revenue$29.64B100.0%
- Cost of revenue−$18.12B61.2%
- Gross profit$11.51B38.8%
- Operating costs−$2.62B8.8%
- Operating income$8.90B30.0%
- Interest, other & tax−$1.63B5.5%
- Net income$7.27B24.5%
04—Financials
Financial Highlights
Figures from 10-KFY2015filed February 19, 2016Financial Statements
FY2015 against FY2014
| Line item | FY2015FY2014 | Change |
|---|---|---|
| Revenue | $29.64B$34.24B | −13.5% |
| Cost of Revenue | $18.12B$21.65B | −16.3% |
| Gross Profit | $11.51B$12.60B | −8.6% |
| R&D Expenses | $409.00M$455.00M | −10.1% |
| SG&A Expenses | $7.58B$8.46B | −10.4% |
| Operating Income | $8.90B$3.24B | +174.4% |
| Interest Expense | $609.00M$778.00M | −21.7% |
| Net Income | $7.27B$2.18B | +232.7% |
| EPS (Basic) | $4.49$1.29 | +248.1% |
| EPS (Diluted) | $4.44$1.28 | +246.9% |
| Shares Outstanding (Basic) | 1.62B1.69B | −4.3% |
| Shares Outstanding (Diluted) | 1.64B1.71B | −4.2% |
05—Questions
Frequently Asked Questions
What was the primary strategic move made by Mondelez in 2015?
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.
How did currency fluctuations impact the company's financial results?
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.
What is the significance of the Venezuela deconsolidation?
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.
How did the company manage its capital and shareholder returns in 2015?
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.
06—Continue