01—Abstract
Summary
Summary of the 10-K filed February 24, 2017. Cited figures are marked; the original filing is the authoritative source.
Mondelez International reported a significant decrease in net revenues and earnings for 2016 compared to 2015, primarily due to the deconsolidation of its global coffee business, unfavorable currency movements, and the deconsolidation of its Venezuelan operations.
Despite the reported revenue decline, the company highlighted an increase in Organic Net Revenue and Adjusted Earnings Per Share (EPS), indicating underlying business resilience. The company's strategy focuses on growing its 'Power Brands' and expanding its reach globally, with a continued emphasis on optimizing its cost structure through initiatives like its 2014-2018 Restructuring Program. Key strategic priorities include investing in brand portfolio innovation and digital channels to adapt to changing consumer preferences towards healthier and more convenient snacking options.
The company's financial health remains supported by strong operating cash flows and a robust revolving credit facility. Investors should note the significant impact of strategic divestitures and acquisitions, particularly the coffee business transactions, on the year-over-year financial comparisons. The company reiterated its commitment to delivering long-term shareholder value through profitable growth and disciplined capital allocation, including share repurchases and dividends.
02—Key points
Key Highlights
- Net revenues decreased by 12.5% to $25.9 billion in 2016, impacted by significant business changes and currency headwinds.
- Organic Net Revenue, a non-GAAP measure excluding certain items, increased by 1.3% in 2016, demonstrating underlying business growth.
- Adjusted EPS (non-GAAP) increased by 19.8% to $1.94 in 2016, reflecting improved profitability on an adjusted basis.
- The company continued its 2014-2018 Restructuring Program, incurring $1.1 billion in charges in 2016, aimed at optimizing cost structure and supply chain.
- Significant events impacting comparability included the deconsolidation of the global coffee business and Venezuelan operations, and currency translation impacts.
- Mondelez International returned $10.8 billion to shareholders through share repurchases ($2.6 billion in 2016) and dividends ($1.1 billion in 2016) during the year.
- The company maintained a strong liquidity position, with $1.7 billion in cash and cash equivalents and $4.5 billion in available credit facilities at year-end 2016.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2016, Mondelez International, Inc. kept $0.06.
- Revenue$25.92B100.0%
- Cost of revenue−$15.82B61.0%
- Gross profit$10.10B39.0%
- Operating costs−$7.55B29.1%
- Operating income$2.55B9.9%
- Interest, other & tax−$919.0M3.5%
- Net income$1.64B6.3%
Where FY2016 revenue went
$25.92B- Cost of revenue: $15.79B, 61% of revenue
- SG&A: $6.55B, 25% of revenue
- Net income: $1.64B, 6.3% of revenue
- R&D: $376.0M, 1.5% of revenue
- Other operating costs: $652.0M, 2.5% of revenue
- Interest, other & tax: $919.0M, 3.5% of revenue
Kept 6.3% as net incomeNet income $1.64B · 6.3%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2016filed February 24, 2017Financial Statements
FY2016 against FY2015
| Line item | FY2016FY2015 | Change |
|---|---|---|
| Revenue | $25.92B$29.64B | −12.5% |
| Cost of Revenue | $15.79B$18.12B | −12.9% |
| Gross Profit | $10.10B$11.51B | −12.2% |
| R&D Expenses | $376.00M$409.00M | −8.1% |
| SG&A Expenses | $6.55B$7.58B | −13.6% |
| Operating Income | $2.55B$8.90B | −71.3% |
| Interest Expense | $515.00M$609.00M | −15.4% |
| Net Income | $1.64B$7.27B | −77.5% |
| EPS (Basic) | $1.05$4.49 | −76.6% |
| EPS (Diluted) | $1.04$4.44 | −76.6% |
| Shares Outstanding (Basic) | 1.56B1.62B | −3.8% |
| Shares Outstanding (Diluted) | 1.57B1.64B | −3.9% |
05—Questions
Frequently Asked Questions
What were the main factors impacting Mondelez International's financial performance in 2016?
The main factors impacting Mondelez International's 2016 financial performance were the deconsolidation of its global coffee business, the deconsolidation of its Venezuelan operations, unfavorable currency exchange rate movements, and the ongoing costs associated with its restructuring program. While reported net revenues and earnings decreased significantly, the company highlighted growth in Organic Net Revenue and Adjusted EPS, indicating underlying operational improvements.
How did the company's restructuring program progress in 2016?
In 2016, Mondelez International incurred $1.1 billion in restructuring and related implementation costs as part of its 2014-2018 Restructuring Program. This program is focused on optimizing the company's cost structure and supply chain network, with the majority of charges expected to be completed by year-end 2018.
What is the company's strategy for future growth?
Mondelez International's growth strategy revolves around accelerating its core snacks business by expanding its 'Power Brands' globally and innovating in product offerings to meet evolving consumer preferences for healthier and more convenient snacking. The company is also investing in its e-commerce platform and digital marketing channels.
How did the company manage its financial resources and return capital to shareholders in 2016?
In 2016, Mondelez International generated strong operating cash flows and maintained a solid liquidity position with significant cash reserves and an available credit facility. The company returned capital to shareholders through share repurchases totaling $2.6 billion and dividends amounting to $1.1 billion.
06—Continue