What is the impact of the Venezuelan currency devaluation on Mondelēz's results?

The devaluation of the Venezuelan bolivar in February 2013 resulted in a $54 million unfavorable foreign currency charge related to the devaluation of net monetary assets, and an additional $7 million in translation impacts. This significantly impacted the Latin America segment's operating income, contributing to a 43.6% decrease in segment operating income for the quarter.

What are the primary drivers behind the decrease in Net Earnings?

The decrease in net earnings is primarily attributed to unfavorable foreign currency movements, notably the Venezuelan bolivar devaluation, and significant one-time costs. These include ongoing Spin-Off costs, 2012-2014 Restructuring Program charges, and Integration Program costs related to past acquisitions and business separations. The comparative period in 2012 also benefited from a $480 million gain from discontinued operations.

How is the company managing commodity price volatility and input cost increases?

The company is addressing higher commodity costs, which increased primarily due to packaging material and grain/oil costs in the first quarter of 2013, through a combination of higher pricing, efforts to reduce manufacturing costs via an end-to-end cost management program, and overhead cost control. They expect these measures to continue to be employed.

What is the significance of the 'Organic Net Revenues' growth compared to reported net revenue growth?

Organic Net Revenues grew by 3.8% while reported net revenues only grew by 0.9%. This highlights the company's underlying sales momentum, as Organic Net Revenues exclude the negative impacts of foreign currency fluctuations and divestitures, as well as the positive impact of acquisitions. The difference underscores the significant headwinds from currency and portfolio changes during the quarter.

MDLZ 10-Q Quarterly Report Q1 FY2013 — Revenue, Net Income, EPS

Summary

Mondelez International, Inc. (MDLZ) reported net revenues of $8.74 billion for the first quarter of 2013, a slight increase of 0.9% compared to the prior year. However, the company experienced a 30.1% decrease in net earnings attributable to Mondelēz International, falling to $568 million from $813 million in the same period last year. This was primarily driven by significant unfavorable foreign currency impacts, particularly the devaluation of the Venezuelan bolivar, and ongoing restructuring and integration costs. Despite the earnings decline, the company saw positive growth in "Organic Net Revenues" (a non-GAAP measure excluding currency impacts, acquisitions, and divestitures) of 3.8%, indicating underlying business strength. Operating income saw a decline of 7.6%, impacted by various one-time costs, including ongoing restructuring and integration programs stemming from past acquisitions and the spin-off of Kraft Foods Group. The company also incurred a $54 million charge related to the devaluation of the Venezuelan bolivar. Management highlighted progress in underlying operational performance, with "Operating EPS" (a non-GAAP measure excluding certain costs) increasing by 9.7%. Investors should note the impact of currency fluctuations and the continued investment in restructuring and integration activities as key factors influencing the near-term financial results.

Financial Highlights

51 data points

Beta

Revenue

$8.74B

0.4% Gross Margin

Net Income

$536.00M

0.1% Net Margin

EPS (Diluted)

$0.30

Total Assets

$73.30B

Cash & Equivalents

$2.76B

Free Cash Flow

-$620.00M

Financial Statements

Beta

Revenue	$8.74B
Cost of Revenue	$5.50B
Gross Profit	$3.24B
SG&A Expenses	$2.33B
Operating Income	$834.00M
Net Income	$536.00M
EPS (Basic)	$0.30
EPS (Diluted)	$0.30
Shares Outstanding (Basic)	1.78B
Shares Outstanding (Diluted)	1.80B

Key Highlights

1Net revenues increased by 0.9% to $8.74 billion, while Organic Net Revenues grew by 3.8%, demonstrating underlying sales momentum.
2Net earnings attributable to Mondelēz International decreased by 30.1% to $568 million, impacted by currency headwinds and one-time charges.
3Operating income declined by 7.6% to $834 million, reflecting significant charges related to restructuring, integration, and a $54 million foreign currency charge from Venezuela.
4Diluted EPS attributable to Mondelēz International decreased by 30.4% to $0.32.
5The company acquired a biscuit operation in Morocco for $155 million, recognizing a preliminary $22 million gain on the remeasurement of its previously-held equity interest.
6Significant ongoing restructuring and integration costs are impacting short-term profitability, with $40 million in restructuring charges and $21 million in integration charges recognized in the quarter.
7The company raised its 2013 Operating EPS outlook to $1.55 - $1.60, citing benefits from discrete tax items.

Mondelez International, Inc. Quarterly Report for Q1 Ended Mar 31, 2013

Summary

Financial Highlights

Key Highlights

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