Summary
Mondelez International, Inc. (MDLZ), formerly Kraft Foods Inc., reported strong net revenue growth for the second quarter and first six months of 2011, driven by a combination of increased pricing and favorable volume/mix, alongside currency tailwinds. The company's integration of the Cadbury acquisition continues to progress, with ongoing efforts to realize significant cost savings and revenue synergies. Despite overall revenue increases, investors should note the impact of increased input costs, particularly for commodities like dairy, coffee, and grains, which pressured margins. The company also addressed a significant legal dispute with Starbucks regarding their retail coffee agreement, the outcome of which is pending arbitration. Looking ahead, Mondelez announced a strategic intention to split into two independent public companies, focusing on a global snacks business and a North American grocery business, a move expected to unlock further value.
Financial Highlights
49 data points| Revenue | $9.16B |
| Cost of Revenue | $9.01B |
| Gross Profit | $3.31B |
| SG&A Expenses | $3.01B |
| Operating Income | $1.81B |
| Net Income | $976.00M |
| EPS (Basic) | $0.55 |
| EPS (Diluted) | $0.55 |
| Shares Outstanding (Basic) | 1.76B |
| Shares Outstanding (Diluted) | 1.77B |
Key Highlights
- 1Net revenues increased by 13.3% to $13.9 billion for the second quarter and 12.2% to $26.5 billion for the first six months of 2011, driven by organic growth and favorable foreign currency impacts.
- 2Operating income saw a 6.2% increase to $1.8 billion for the second quarter and a substantial 18.7% increase to $3.5 billion for the first six months, reflecting pricing power and cost management.
- 3Diluted EPS from continuing operations rose to $0.55 for the second quarter and $1.01 for the first six months, showing improvement in core business profitability.
- 4The company incurred significant integration charges related to the Cadbury acquisition, totaling $240 million for the first six months of 2011, as it works towards achieving at least $750 million in annual cost savings.
- 5Inventories increased to $6.4 billion as of June 30, 2011, up from $5.3 billion at the end of 2010, indicating potential supply chain build-up or increased product costs.
- 6Goodwill and intangible assets remain substantial at $39.1 billion and $26.5 billion respectively, largely due to acquisitions like Cadbury.
- 7Mondelez announced plans to split into two independent companies: a global snacks business and a North American grocery business, via a tax-free spin-off, targeting completion before year-end 2012.