01—Abstract
Summary
Summary of the 10-K filed February 7, 2020. Cited figures are marked; the original filing is the authoritative source.
Mondelez International, Inc. reported stable net revenues of $25.9 billiona for the fiscal year ended December 31, 2019, demonstrating resilience in a competitive global snack market.
The company's strategic focus on consumer-centric growth, operational excellence, and a winning culture is a key driver for its performance. While overall net revenues remained flat compared to the previous year, Organic Net Revenue saw a healthy increase of 4.1%b, indicating growth from ongoing business activities excluding currency fluctuations, acquisitions, and divestitures. This period saw the company continue to invest in its brands and operational efficiency, including modernizing its R&D facilities.
Despite facing challenges like unfavorable currency translations and the impact of divestitures, Mondelez International demonstrated solid financial footing. The company also emphasized its commitment to sustainability and mindful snacking, aligning with evolving consumer preferences.
Key financial metrics, such as diluted EPS, saw an increase, supported by operational gains and tax reforms. The company's strong operational cash flow and ongoing share repurchase program underscore its financial health and commitment to shareholder value.
02—Key points
Key Highlights
- Net revenues remained stable at $25.9 billion, with a 4.1% increase in Organic Net Revenue, reflecting underlying business growth.
- The company is executing a three-pronged strategy: accelerating consumer-centric growth, driving operational excellence, and creating a winning growth culture.
- Significant investment in modernizing global R&D facilities to support innovation.
- Diluted EPS increased by 16.2% to $2.65, driven by operational gains and positive impacts from Swiss tax reform.
- The company continued its share repurchase program, repurchasing approximately $1.5 billion of common stock in 2019.
- Commitment to sustainability is evident through goals for reduced environmental impact and expansion of sustainable sourcing programs like Cocoa Life.
- Geographic diversification: 74.4% of net revenues were generated outside the United States.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2019, Mondelez International, Inc. kept $0.15.
- Revenue$25.87B100.0%
- Cost of revenue−$15.53B60.0%
- Gross profit$10.34B40.0%
- Operating costs−$6.49B25.1%
- Operating income$3.84B14.9%
- Interest, other & tax$86.0M0.3%
- Net income$3.93B15.2%
Where FY2019 revenue went
$25.87B- Cost of revenue: $15.53B, 60% of revenue
- SG&A: $6.14B, 24% of revenue
- Operating income: $3.84B, 15% of revenue
- R&D: $351.0M, 1.4% of revenue
Kept 15% as operating income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2019filed February 7, 2020Financial Statements
FY2019 against FY2018
| Line item | FY2019FY2018 | Change |
|---|---|---|
| Revenue | $25.87B$25.94B | −0.3% |
| Cost of Revenue | $15.53B$15.59B | −0.4% |
| Gross Profit | $10.34B$10.35B | −0.1% |
| R&D Expenses | $351.00M$362.00M | −3.0% |
| SG&A Expenses | $6.14B$6.47B | −5.2% |
| Operating Income | $3.84B$3.31B | +16.0% |
| Interest Expense | $484.00M$462.00M | +4.8% |
| Net Income | $3.93B$3.32B | +18.5% |
| EPS (Basic) | $2.72$2.25 | +20.9% |
| EPS (Diluted) | $2.69$2.23 | +20.6% |
| Shares Outstanding (Basic) | 1.45B1.47B | −1.8% |
| Shares Outstanding (Diluted) | 1.46B1.49B | −1.9% |
05—Questions
Frequently Asked Questions
What was Mondelez International's financial performance in 2019?
In the fiscal year ended December 31, 2019, Mondelez International reported net revenues of $25.9 billion, which was largely stable compared to the prior year. However, Organic Net Revenue increased by 4.1% to $26.9 billion, indicating underlying business growth. Diluted Earnings Per Share (EPS) attributable to Mondelēz International increased by 16.2% to $2.65, boosted by operational improvements and the impact of tax reforms.
What are the company's main strategic priorities?
Mondelez International's strategy focuses on three key priorities: accelerating consumer-centric growth by meeting evolving consumer snacking needs; driving operational excellence through cost discipline and efficiency improvements in its supply chain and sales efforts; and creating a winning growth culture by becoming more agile, digital, and locally focused.
How did the company manage costs and expenses in 2019?
The company focused on managing costs through its 'Simplify to Grow' program, aimed at reducing operating costs in its supply chain and overhead. They also addressed higher input costs through pricing actions and hedging strategies. Selling, general, and administrative expenses saw a decrease due to various factors, including favorable currency impacts and lower restructuring program costs, though route-to-market investments and higher advertising/promotion costs led to an underlying increase.
What are the key risks identified by the company?
Mondelez International highlighted several key risks, including intense competition in the food and snacking industry, the need to adapt to changing consumer preferences and distribution channels (like e-commerce), protecting and enhancing brand reputation, risks associated with global operations (currency fluctuations, geopolitical events), commodity price volatility, cybersecurity threats, and regulatory changes.
06—Continue