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.