10-QPeriod: Q1 FY2019

Mondelez International, Inc. Quarterly Report for Q1 Ended Mar 31, 2019

Filed May 1, 2019For Securities:MDLZ

Summary

Mondelez International, Inc. reported net revenues of $6.538 billion for the first quarter of 2019, a decrease of 3.4% compared to the same period in the prior year, primarily due to unfavorable currency translation. However, on an organic basis, which excludes currency impacts and acquisitions/divestitures, net revenue grew by 3.7%, driven by higher net pricing and favorable volume/mix. Diluted Earnings Per Share (EPS) attributable to Mondelēz International decreased by 10.0% to $0.63. Despite the GAAP decline, Adjusted EPS (a non-GAAP measure) increased by 3.2% to $0.65, and on a constant currency basis, it grew by 12.7% to $0.71, reflecting operational improvements and lower shares outstanding. The company's strategic priorities for accelerating consumer-centric growth and driving operational excellence appear to be progressing, as indicated by the organic growth and adjusted EPS performance.

Financial Highlights

54 data points
Beta

Revenue

$6.54B

39.7% Gross Margin

Net Income

$967.00M

14.8% Net Margin

EPS (Diluted)

$0.66

Total Assets

$64.16B

Cash & Equivalents

$1.54B

Free Cash Flow

$200.00M

Financial Statements
Beta
Revenue$6.54B
Cost of Revenue$3.94B
Gross Profit$2.59B
SG&A Expenses$1.49B
Operating Income$1.04B
Interest Expense$123.00M
Net Income$967.00M
EPS (Basic)$0.67
EPS (Diluted)$0.66
Shares Outstanding (Basic)1.45B
Shares Outstanding (Diluted)1.46B

Key Highlights

  • 1Net revenues decreased 3.4% to $6.538 billion, impacted by unfavorable currency translation.
  • 2Organic Net Revenue increased 3.7% to $7.016 billion, driven by higher net pricing and favorable volume/mix.
  • 3Diluted EPS attributable to Mondelēz International decreased 10.0% to $0.63.
  • 4Adjusted EPS (non-GAAP) increased 3.2% to $0.65, and on a constant currency basis, it increased 12.7% to $0.71.
  • 5The company adopted the new lease accounting standard (ASC 842) on January 1, 2019, resulting in the recognition of lease-related assets and liabilities.
  • 6The Simplify to Grow Program is ongoing, with $20 million in restructuring charges incurred in the first quarter of 2019.
  • 7Mondelez repurchased approximately $0.7 billion of its common stock in the first quarter of 2019.

Frequently Asked Questions

The primary driver for the decrease in reported net revenues was unfavorable currency translation, as the U.S. dollar strengthened against several currencies in which Mondelēz operates.

On an organic basis, which excludes the impact of currency fluctuations, acquisitions, and divestitures, net revenue increased by 3.7%, driven by higher net pricing and a favorable volume/mix.

The 'Simplify to Grow Program' is ongoing and has been extended through 2022. In the first quarter of 2019, the company incurred $20 million in restructuring charges related to this program, with a total of $5.4 billion in program charges expected over its life.

The adoption of the new lease accounting standard (ASC 842) on January 1, 2019, resulted in the recognition of $710 million in lease-related assets and $730 million in lease-related liabilities on the balance sheet. The transition method elected did not have a material impact on retained earnings.