8-KFinancial EventsRegulation FDExhibits & Filings

Mondelez International, Inc. 8-K Report, Exit or Disposal Costs (Sep 7, 2018)

Filed September 7, 2018For Securities:MDLZ

Summary

Mondelez International, Inc. (MDLZ) announced significant updates to its ongoing restructuring program, now named the "Simplify to Grow Program." The company's Board of Directors approved an extension of this program through 2022, coupled with an increase in its total estimated one-time costs by $1.3 billion to $5.4 billion. This revised total includes $4.1 billion in cash costs and $1.3 billion in non-cash costs. Additionally, capital expenditures supporting the program have been increased by $700 million, bringing the total to $2.3 billion, which is already factored into prior capital expenditure expectations. The "Simplify to Grow Program," initially launched in 2014, aims to reduce operating costs within the supply chain and overhead. It encompasses severance, asset disposals, and manufacturing/procurement-related one-time expenses. Mondelez intends to reinvest a portion of the cost savings to fuel net revenue and earnings growth, positioning the company for future expansion. This announcement was made in conjunction with an investor day presentation, details of which were provided via a press release furnished on September 7, 2018.

Key Highlights

  • 1Mondelez has extended its "Simplify to Grow" restructuring program through 2022.
  • 2The program's estimated one-time costs have increased by $1.3 billion, totaling $5.4 billion (with $4.1 billion cash and $1.3 billion non-cash).
  • 3Capital expenditures related to the program have been increased by $700 million to $2.3 billion.
  • 4The program targets reductions in supply chain and overhead operating costs.
  • 5Cost savings from the program are intended to be partially reinvested to drive revenue and earnings growth.
  • 6The announcement was made in conjunction with an investor day presentation and accompanying press release.

Frequently Asked Questions

The "Simplify to Grow Program" is Mondelez's ongoing initiative, started in 2014, to reduce operating costs in its supply chain and overhead. The Board approved extending it through 2022 and increasing its budget by $1.3 billion to $5.4 billion due to the program's success in driving cost reductions and its strategic importance in positioning the company for future growth and transformational changes. A portion of the savings will be reinvested to drive revenue and earnings growth.

The total one-time costs for the program have risen to $5.4 billion, comprising $4.1 billion in cash costs and $1.3 billion in non-cash costs. Investors should monitor how these costs impact near-term profitability and track the realization of expected cost savings and reinvestment benefits.

Capital expenditures related to the program have increased by $700 million to a total of $2.3 billion. This is intended to support the restructuring efforts and future growth. Importantly, this increase is already incorporated within the company's previously communicated expectations for future capital spending, suggesting it's part of their ongoing investment strategy rather than a completely new outlay.

The filing references a press release issued on September 7, 2018, related to an investor day presentation. This suggests the company was providing further details and forward-looking statements about its strategy, including the "Simplify to Grow Program," to investors. The information shared is not considered officially "filed" for liability purposes but provides insight into management's strategic direction and outlook.