Mondelez International, Inc. Quarterly Report for Q2 Ended Jun 30, 2017

Summary

Mondelez International reported a 5.0% decrease in net revenues to $6.0 billion for the second quarter of 2017, and a 2.8% decrease to $12.4 billion for the first six months, impacted by unfavorable currency movements and a significant malware incident that disrupted sales and operations. Despite the revenue challenges, the company saw an increase in Diluted EPS, which rose 10.3% to $0.32 for the quarter and 14.1% to $0.73 for the six-month period. Adjusted EPS also showed positive growth, increasing 11.6% to $0.48 in the second quarter and 9.8% to $1.01 for the six months, demonstrating the company's ability to manage costs and improve profitability even amidst operational disruptions. The company incurred incremental expenses of $7.1 million due to the malware incident, which is expected to continue impacting results in the second half of 2017. The company also continued to execute its 2014-2018 Restructuring Program, focusing on cost optimization. Management remains confident in the company's liquidity and ability to fund operations, capital expenditures, and shareholder returns through operating cash flow and existing credit facilities.

Key Highlights

• 1Net revenues decreased by 5.0% to $5.99 billion for the three months ended June 30, 2017, and by 2.8% to $12.4 billion for the six months ended June 30, 2017, primarily due to unfavorable currency and the impact of a significant malware incident.
• 2Diluted Earnings Per Share (EPS) increased to $0.32 for the second quarter and $0.73 for the six months, up from $0.29 and $0.64 respectively in the prior year periods.
• 3Adjusted EPS, a non-GAAP measure, saw significant growth, rising 11.6% to $0.48 for the second quarter and 9.8% to $1.01 for the six months, indicating improved underlying profitability.
• 4The company reported a negative impact of 2.3% on net revenue growth and 2.4% on Organic Net Revenue growth in the second quarter due to a global malware incident, which also incurred incremental expenses of $7.1 million.
• 5Operating income increased slightly by 0.5% to $641 million for the quarter, and by 8.9% to $1.48 billion for the six months, supported by cost management and favorable pricing.
• 6The company continues to execute its $5.7 billion 2014-2018 Restructuring Program, with $2.9 billion incurred as of June 30, 2017, aimed at reducing operating costs.
• 7Total debt stood at $18.8 billion as of June 30, 2017, with a debt-to-capitalization ratio of 0.42, indicating a stable capital structure.

Frequently Asked Questions