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| file | filename |
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| EX-99.1 - KRAFT FOODS INC. PRESS RELEASE, DATED SEPTEMBER 7, 2012 - Mondelez International, Inc. | d408113dex991.htm |
| 8-K - FORM 8-K - Mondelez International, Inc. | d408113d8k.htm |
 The
New Kraft Foods Group September 7, 2012
Investor Day
Exhibit 99.2 |
 Chris Jakubik
Vice President, Investor Relations |
 3
Forward-Looking Statements
This
presentation
contains
a
number
of
forward-looking
statements.
The
words
“plan,”
“drive,”
“build,”
“focus,”
“manage,”
“can,”
“will,”
“expect”
and similar expressions are intended to identify our forward-looking
statements. Examples of forward-looking statements include, but are not
limited to, statements regarding our strategic plans, financial
targets and long-term guidance, including revenue and operating income growth, margins, EPS and
market
share;
our
future
dividends;
our
restructuring
costs;
our
opportunities
to
improve
profitability
and
generate
cash; our plans to provide ongoing guidance; and our expectations and goals for
efficiency and productivity, resource allocation, reinvestment in our
business, input cost management, sales execution, cash management, free cash
flow, innovation and employee recruitment, compensation and investment. These forward-looking
statements involve risks and uncertainties, many of which are beyond our control,
and important factors that could cause actual results to differ materially
from those indicated in the forward-looking statements include, but are
not limited to, increased competition; continued consumer weakness and weakness in economic conditions;
our ability to differentiate our products from retailer and economy brands; our
ability to maintain our reputation and brand image; continued volatility of,
and sharp increases in, commodity and other input costs; pricing actions;
increased costs of sales; regulatory or legal changes, restrictions or actions;
unanticipated expenses and business disruptions; product recalls and product
liability claims; unexpected safety or manufacturing issues; our
indebtedness and our ability to pay our indebtedness; our inability to protect our
intellectual property rights; and tax law changes. For additional
information on these and other factors that could affect our forward-looking
statements, see our risk factors, as they may be amended from time to time, set
forth in our filings with the SEC, including
our
Registration
Statement
on
Form
10.
We
disclaim
and
do
not
undertake
any
obligation
to
update
or
revise any forward-looking statement in this presentation, except as required
by applicable law or regulation. |
 4
The New Kraft Foods Group
Who we are
What we’ll do
What to expect
Meet our team |
 John
Cahill Executive Chairman |
 6
1966
1972
1975
1983
1988
1979
1965
1777
Our Heritage and Our Legacy Lie with Our Iconic Brands
Source: Kraft Foods Archives
1780
1862
1870
1880
1899
1903
1905
1906
1927
1928
1930
1933
1937
1954
1959
1957
1982
2004
2011
1889
1896
1883
1897
1892
1800
1900
1700
2000 |
 7
We have Unparalleled Strength with Our Portfolio
Household penetration 98% in U.S., 99% in Canada
10 brands with more than $500MM in 2011 annual sales
Another 17 brands with 2011 annual sales over $100MM
Average of 2x the share of the nearest branded competitor
Source: Kraft Foods Group, Nielsen |
 8
We are the 4th Largest Player in North American Food
and Beverages
Food & Beverage Net Revenue ($B)
North America, Latest Fiscal Year
(1) Per Kraft Foods Group Form 10 filing
(2) Estimates
(3) U.S. figures
Source: Public disclosures in press releases or SEC filings, Kraft Foods Group
analysis as of August 30, 2012 |
 9
A Huge Opportunity to Improve Profitability
Average
16.6%
Adjusted Operating Income Margin
(1)
North America, Latest Fiscal Year
(3)
(4)
9
(2)
(1) Reported Operating Income Margin for the 12 months ended December 31, 2011 was 15.7%.
See GAAP to Non-GAAP reconciliation at the end of the presentation. (2)
Excludes PepsiCo Americas Beverages business (21.3% with PAB business); (3) includes Corporate Expenses; (4) ex-Post Cereal business
Note: Adjusted Operating Income Margins exclude Corp Allocations (unless otherwise noted) and are on
an “ex one-time items” basis Source: Public disclosures in press releases or SEC
filings, Kraft Foods Group analysis as of August 30, 2012 |
 10
An Experienced and Diverse Team with the Right Skills
CEO: 23 years Johnson & Johnson, 3 years private equity
Leadership Team
–
Evenly split between proven Kraft personnel and external hires
–
195 years of combined Kraft experience
–
350 years of combined CPG/Industry experience
–
Drawing experience from other venerable CPG companies including Procter
& Gamble, Swift & Company, Fonterra Brands, PepsiCo, S.C. Johnson
Board expertise covering consumer products, retail, supply chain,
international, social media |
 11
Our Mission
Make Kraft North American
Food & Beverage Company
Best Investment in the Industry
Profitable
Top-Line
Growth
Consistent
Bottom-Line
Growth
Superior
Dividend
Payout |
 Tony Vernon
Chief Executive Officer |
 13
The New Kraft Foods Group
Who we are
What we’ll do
What to expect
Meet our team |
 “Post Office”
culture
20-70-10 performance model
Limited investment in people
and training
Best recruiter and developer of
industry talent
“Peanut-butter spread”
resource
allocation
Strategic resource allocation based
on margin, materiality, momentum
Inconsistent innovation
Best-in-class innovation
High-cost producer
Lowest-cost producer leveraging
best brands and scale
High overheads
Leanest overheads
Cash as output
of business model
Cash as lifeblood
of business model
The Journey of a $19 Billion Startup
To
To
From
14 |
 We’ve Made Good Progress…
(1)
Reported
net
revenue
growth
was
3.8%,
reported
operating
income
growth
was
1.2%,
reported
operating
income
margin
change
was
(0.4)pp,
all
on
a
trailing
four
quarter
basis
ending
June 30, 2012, see GAAP to Non-GAAP reconciliation at the end of the
presentation; (2) Estimated; (3) Total Company Source:
Public
disclosures
in
press
releases
or
SEC
filings,
Kraft
Foods
Group
analysis
as
of
August
30,
2012;
Peer Company financials based on North America operating segments only.
Peer Comparison –
Trailing 4 Quarters
Vol/Mix
Price
Organic
Revenue
Growth
Adjusted
Operating
Inc Growth
Margin
Change
Kraft Foods Group
(1)
(1.3)pp
6.2 pp
4.9 %
6.3 %
0.4 pp
Center-of-Store Peers
Campbell
(3.6)
2.3
(1.3)
(3.8)
(0.5)
Heinz
(1.5)
2.4
0.9
(2.4)
(0.3)
ConAgra
(2.8)
4.8
2.0
(1.6)
(0.8)
Kellogg
(1.0)
5.0
4.0
0.1
(0.7)
General Mills
(4.7)
8.7
4.0
(2.8)
(1.4)
Smuckers
(4.0)
13.3
9.4
(0.5)
(2.7)
Center-of-Store Average
(3.1)pp
6.3 pp
3.2 %
(1.9)%
(0.9)pp
Nestle
2.0
(2)
PepsiCo
(0.8)
4.3
3.5
3.4
(0.3)
Hormel
(3.2)
5.3
2.1
(4.1)
(0.7)
Hershey
(0.6)
(2)
6.6
(2)
6.0
(2)
12.5
(3)
1.0
(3)
Total Peer Average
(2.4)pp
5.4 pp
3.0 %
0.7 %
(0.7)pp
15 |
 16
…
Despite an Operating Environment that Promises to
Remain the Most Difficult in a Generation
The North American food and beverage market is large, highly profitable
but mature and slow growing
A
weak
economy
with
relatively
high
commodity
volatility
is
the
“new normal”
Private label has achieved a sustained increase across the market since
the 2008 recession
Mutual dependence with our largest retail food customers
Several major demographic shifts and changing consumer preferences
are transforming the market |
 17
Redefine
Efficiency
Turbocharge
Our Iconic
Brands
Execute with
Excellence
Make Our
People Our
Competitive
Edge
Our Plan will Sustain Our Momentum and Take Our
Performance to the Next Level |
 Make
Our People Our
Competitive
Edge
Our Plan
Aggressively compensate for performance
Invest in our people
Create a lean, horizontal organization
Redefine
Efficiency
Turbocharge
Our Iconic
Brands
Execute with
Excellence
18 |
 19
Aggressively Compensate for Performance
Increasing variable component in compensation programs
Adopting 20/70/10 performance model
Driving broader, deeper stock compensation and ownership
We’ll put more of our pay “at risk”
Make Our
People Our
Competitive
Edge |
 20
Invest in Our People
Building Talent Acquisition, University Relations
as a competitive advantage
Establishing integrated succession planning process to
develop next generation of general managers
Creating
“Kraft
University”
to
assemble
world-class
capabilities
Our next generation managers will lead the industry
Make Our
People Our
Competitive
Edge |
 21
Invest in Our People
ISC
Academy
Marketing
Academy
Leadership Development/Management/Diversity & Inclusion
Leadership Development/Management/Diversity & Inclusion
Accreditation required for all managers
Accreditation required for all managers
Sales
Academy
RDQ&I
Academy
Functional
Academies
Business Skill Building:
Business Skill Building:
Cash
Cash
Management,
Management,
Organizational
Organizational
Agility,
Agility,
Compliance,
Compliance,
New
New
Hire,
Hire,
etc.
etc.
Make Our
People Our
Competitive
Edge
21
•
Intro to Marketing
& CIS
•
Marketing/CIS
Fundamentals
•
Advanced
Marketing & CIS
•
Innovation & New
Products
•
Intro to Sales
•
Sales
Fundamentals
•
Advanced Sales
•
Intro to RDQ&I
•
RDQ&I
Fundamentals
•
Advanced
RDQ&I
•
Finance/Business
Acumen
•
Information
Systems
•
Corporate Affairs
& Legal
•
Human Resources
•
Intro to Supply
Chain
•
Supply Chain
Fundamentals
•
Advanced Supply
Chain
•
Procurement
Excellence
Kraft University |
 22
Create a Lean, Horizontal Organization
Revamping organizational structure to become nimble
and non-hierarchical
Pushing accountability down to the right levels
Transforming headquarters
We’re changing how we work and where we work
Make Our
People Our
Competitive
Edge |
 Redefine
Efficiency
Turbocharge
Our Iconic
Brands
Our Plan
Strategically allocate resources
Leverage our leading sales capability
Relentlessly focus on cash generation
Make Our
People Our
Competitive
Edge
Execute with
Excellence
23 |
 24
Strategically Allocate Resources
Each of our brands can deliver outstanding returns…
but not all need the same resources to reach their potential
24
Execute with
Excellence |
 Strategically Allocate Resources
We’ve already begun to make progress re-allocating
advertising spend within businesses
% of A&C spend on Power Brands
A&C as % of NR (2012E)
Power Brands currently include Lunchables, Planters, Velveeta Shells &
Cheese, Capri Sun, Jell-O, Philadelphia, Kraft Macaroni & Cheese, Kool-Aid, Miracle
Whip,
Snacking
Cheese,
MiO,
and
Gevalia
Execute with
Excellence
CAGR
12.7%
25 |
 Vernon_BTS_MainStream Reel.wmv |
 Strategically Allocate Resources
Leveraged non-traditional vehicles to create buzz
Focused on strategic partnerships
Tactically innovated to expand category, generate in-store excitement
We’ve
managed
and
marketed
our
“jewels”
more
entrepreneurially
2011 Net
Revenue
Growth
7%
10%
9%
Execute with
Excellence
27 |
 Vernon_BTS_Entrepreneurial Reel v2.wmv |
 Strategically Allocate Resources
Our leadership team now will evaluate the collective
needs of our brands and franchises
Margin, Materiality, Momentum
Power Brands
Jewels
Price Protect
Fix
Execute with
Excellence
29 |
 Strategically Allocate Resources
We will strategically allocate a broad set of key
resources to brands and franchises
Margin, Materiality,
Momentum
Brand Building
Low Cost
Advertising
Growth R&D & Capex
Brand Management & Sales
Resources
Productivity R&D & Capex
Supply Chain & Procurement
Resources
Overhead Reductions
Higher
Lower
Lower
Higher
Execute with
Excellence
30 |
 31
Leverage Our Leading Sales Capability
Kantar 2011 Power Rankings
Key Sales Force Attributes
Rank
Best Sales Force
#1
Best Shopper Marketing
#2
Best Supply Chain Management
#2
Most Helpful Shopper Insights
#2
2011 Overall Rankings
Partnering with Acosta will make us even stronger
Execute with
Excellence
8.1
8.1
10.5
12.8
13.2
22.6
28.4
32.7
Kelloggs
ConAgra
Coke
Unilever
Nestle
PepsiCo
General Mills
KFG |
 Leverage Our Leading Sales Capability
Employing a relentless focus on ROI
Bringing world-class category leadership to Center Store
Building strong, sustainable relationships with our customers
Several initiatives will generate higher returns on our
investment in sales
Execute with
Excellence
32 |
 33
Relentlessly Focus on Cash Generation
Building free-cash flow, return-on-capital metrics and
targets into business-unit plans
Appointed
a
“Cash
Czar,”
establish
monthly
cash
reviews
by
leadership team
Institutionalizing disciplined business-process execution
and education
We’re putting the tools and processes in place to make
cash “king”
at Kraft
Execute with
Excellence |
 Our
Plan Delight the changing consumer
Drive “premium-ness”
through innovation platforms
Differentiate with world-class marketing
34
Make Our
People Our
Competitive
Edge
Execute with
Excellence
Turbocharge
Our Iconic
Brands
Redefine
Efficiency |
 35
Delight the Changing Consumer
We can delight the consumers more ways, on more brands, in
more places than any competitor
Beverages
Cheese
Enhancers
Convenient
Meals
Desserts
& Snacks
35
Turbocharge
Our Iconic
Brands |
 Delight the Changing Consumer
Good, Better, Best
Delivering the right product at the right price points
Ready-to-Drink Beverages
Cold Cuts
Sandwich Cheese
Convenient Meals
$1.79
$2.49
$2.99
$1.99
$2.99
$3.99
$1.99
$2.99
$3.99
$0.99
$1.99
$3.49
Turbocharge
Our Iconic
Brands
36 |
 37
Delight the Changing Consumer
Economically challenged consumer segment
Dollar stores, drug stores, club
Targeted price points for alternate channels
Turbocharge
Our Iconic
Brands |
 Drive
“Premium-ness”
Through
Innovation
Platforms
Liquid Concentrates
Lunchables “With”
Premium/One Cup
Convenient Meals
“Aging Up”
Capri Sun
Jell-O Reinvention
Fresh Take
Oscar Mayer Selects
Turbocharge
Our Iconic
Brands
38 |
 Drive
“Premium-ness” Through Innovation
Platforms
Health & Wellness
% Revenue from Products
That Meet “Better Choices”
Criteria
Improved Nutritional Profiles
Beneficial Ingredients
Simplification
Sodium Reduction
Fruits & Vegetables
Vitamin Fortified
No Artificial Colors, Preservatives, “Road to Real”
39
Turbocharge
Our Iconic
Brands |
 Differentiate with World-Class Marketing
Advertising as % of Net Revenue
Latest Fiscal Year
Average 4.5%
KFG
65% of
peer avg
Note: Advertising spend excludes Consumer Promotion spend
Source: Company SEC filings, Nielsen 2011 ad spend/US x AOC, Kraft Foods Group
analysis We must do a better job supporting our brands
Turbocharge
Our Iconic
Brands
40 |
 Differentiate with World-Class Marketing
2011 Net Revenue Growth
Where we’ve spent, it’s had an impact
Turbocharge
Our Iconic
Brands
41
20%
11%
10%
9%
8%
7% |
 Differentiate with World-Class Marketing
U.S. Hispanic Population
(MM)
KFG Hispanic A&C Index
(2011=100)
Hispanic marketing is a huge opportunity
Our portfolio of family brands are advantaged
with Latina moms
We have underspent in media and at point of purchase
Will be major focus in new Kraft
Turbocharge
Our Iconic
Brands
22
35
51
59
1990
2000
2010
2015E
100
100
250
350
400
2011
2012E
2013E
2014E
2015E
42 |
 Vernon_BTS_HispanicReel.wmv |
 Our
Plan Drive industry-leading productivity
Realize lowest-cost overheads
44
Make Our
People Our
Competitive
Edge
Execute with
Excellence
Turbocharge
Our Iconic
Brands
Redefine
Efficiency |
 Drive
Industry-Leading Productivity Lean Six Sigma
Strategic-sourcing initiatives
Maintenance optimization
Simplification across supply chain
Business-process excellence
Manage labor-cost inflation
Streamline and optimize manufacturing networks
Raise the return bar for business investments
We’re pulling all the levers of productivity to ensure
we drop more to the bottom line
Redefine
Efficiency
45 |
 Drive
Industry-Leading Productivity We are targeting at least 2.5% net
productivity Productivity as a % of COGS
Redefine
Efficiency
1.5%
~2.5%
At least
2.5%
2011
2012E
2013+E
46 |
 47
Realize Lowest-Cost Overheads
“Clean sheet”
approach to purge complex legacy
structures, practices
–
Business decisions driven by commercial units
–
Small HQ with efficient shared-service model
–
Corporate function cost structures to live up to best-in-class external
benchmarks Moving to standardize backroom business systems
Savings expected to more than offset dis-synergies from becoming an independent
public company
We’re targeting best-in-class overhead costs
47 |
 Our
Mission Redefine
Efficiency
Turbocharge
Our Iconic
Brands
Make Our
People Our
Competitive
Edge
Make Kraft North American
Food & Beverage Company
48
Execute with
Excellence |
 Tim
McLevish Chief Financial Officer |
 The
New Kraft Foods Group Who we are
What we’ll do
What to expect
Meet our team
50 |
 51
We have All the Ingredients for Success
A portfolio of the greatest brands in food & beverage
Scale to achieve lowest delivered product costs and lowest
overheads
Strong and diverse management team
Operational and financial momentum |
 52
But Our Financial Targets Must Reflect Several Realities
A volatile commodity-price environment is here to stay
We must reinvest to deliver sustainable growth
We
put
dollars
in
shareholders’
pockets…
not
growth
rates,
not
margins |
 53
A Volatile Commodity-Price Environment is Here to Stay
KFG Commodity Price Index (2012E = 100%)
Year
Note: The index measures a basket of 23 commodities weighted to Kraft Foods Group
volumes. Price multiplied by quantity equals total cost. This index holds
quantity fixed at expected 2012 volumes and measures the theoretical effect on
total cost due to changes in only price. Price is spot price only and does not
include any effect from hedging.
50
60
70
80
90
100
110
00
01
02
03
04
05
06
07
08
09
10
11
12 |
 54
We Must Reinvest to Deliver Sustainable Growth
Many levers to deliver at least 2.5% net productivity
Further opportunity from negative overhead growth (NOG) in the
near-term, zero overhead growth (ZOG) long-term
Need to be competitive and sustainable on several fronts
–
People
–
Brand building
–
Innovation |
 55
We Put Dollars in Shareholders’
Pockets…
Not Growth
Rates, Not Margins
Inconsistent commitment
Key cultural priority
Revenue growth and OI margin
focus
Balanced emphasis on both P&L and
Balance Sheet
No capital charges
ROIC focus from strategic to
operating decisions
Functional silos, metrics
and incentives
End-to-end metrics
Information and reports
Decision tools that create bias for
action
To
To
From |
 56
Our Long-Term Growth Algorithm is Built to Last
(1) Market defined as the North American Food & Beverage market
(2) Free Cash Flow = Cash Flow from Operations, less Capital Expenditures
Metric
Long-Term Target
Organic Revenue
Profitable
growth at or above market growth
(1)
Operating Income
Consistent
mid-single-digit growth
EPS
Consistent mid-to-high, single-digit growth
Free Cash Flow
(2)
At least
85% of Net Income
Dividends
Consistent
mid-single-digit growth |
 How We
Think about Other Drivers Driver
Expectation
Advertising Spend
We expect to hit our Long-Term Targets for consistent growth in
Operating Income dollars and Earnings Per Share even as we increase
our share of voice
Market Share
We expect to deliver profitable growth at or above market growth*
Operating Income Margins
We
put
dollars
in
shareholders’
pockets,
not
margins
Delivering against the targets we’ve laid out should lead to margin
expansion
Restructuring Spend
No “ex items”
reporting
2013 spin-off and restructuring related costs of ~$240 million to fall to
~$125 million of annual spending on cost-savings initiatives
thereafter ROIC
We’re driving a return discipline down to lowest levels of our
organization
ROIC will expand moving forward…
more to come
*Market defined as the North American Food & Beverage market
57 |
 58
Our Ongoing Guidance Policy Will Help Us Focus on
Sustainable Long-Term Shareholder Value
Our long-term growth algorithm is our ongoing expectation
–
No point estimates on annual or quarterly P&L line items
We will provide quantitative assessments
–
Material events (e.g., extraordinary pruning, acquisitions, etc.)
–
Financial
implications
of
significant
decisions
(e.g.,
change
in
pension
accounting)
We will provide qualitative assessments
–
Business trends
–
Competitive dynamics
–
Material actions taken or decisions made |
 59
We Recognize that Using Our 2012 Reported Financials Will
Make Projecting Future Results Difficult
Expect solid top-line and underlying profit growth, consistent with previous
KFT guidance
Q1-Q3 presentation based on Form 10 requirements
–
Carve-out financials below revenue reflect ParentCo charges
–
Pro-forma interest based on assumed rate, excluding seasonal needs
Q4 presentation will reflect standalone results
–
Potential headwind from required, spin-related pension revaluation
Later-than-usual filing of Q4/FY 2012 results
Exceptional need for specific 2013 guidance |
 60
2013 Guidance: Continued Momentum, Clean Base
Organic revenue growth in line with market growth
–
Including pruning impact of ~(1)pp
Productivity, overhead savings to drive ~$2.60 GAAP EPS
–
Interest expense ~$520MM
–
Tax rate ~35%
–
Includes restructuring costs of ~$240MM or $0.26 per share versus expected ongoing
costs of ~$125MM or $0.14 per share per annum
“Typical”
seasonality of quarterly sales and earnings
–
Normally generate ~48% of earnings in H1, ~52% in H2
Free Cash Flow ~70% of GAAP net income
–
Below long-term target of at least 85% due to fifth tax payment in 2013
We expect to recommend an annual dividend of $2.00 per share
|
 Our
Debt Profile is Relatively Fixed at an Average Rate of 5% and No Maturities
Until June 2015 ($ Millions)
$1,400
$1,000
$900
$900
$2,000
$896
$900
$2,000
Debt Maturity Profile
Source: Kraft Foods Group Form 10 filing
61
2013
2014
2015
2017
2018
2020
2022
2039
2040
2042 |
 62
Priorities for Free Cash Flow
Fund a highly competitive dividend
Reinvest in the
business
Acquisitions that quickly
achieve EPS accretion and an
IRR > risk-adjusted hurdle rate
Share
repurchase |
 63
Profitable
Top-Line
Growth
Consistent
Bottom-Line
Growth
Superior
Dividend
Payout
We are Well-Positioned to Deliver Predictable Returns
|
 Tony Vernon
Chief Executive Officer |
 Our
Mission THE
Innovator
THE
Strongest Portfolio
THE
Lowest Cost Producer
Make Kraft North American
Food & Beverage Company
Best Investment in the Industry
65 |
 The
New Kraft Foods Group Who we are
What we’ll do
What to expect
Meet our team
66 |
 67
Our Team
Deanie Elsner
EVP and
President,
Beverages
George Zoghbi
EVP and
President,
Cheese & Dairy
Michael Osanloo
EVP and
President,
Grocery
Nick Meriggioli
EVP and
President,
Oscar Mayer
Dino Bianco
EVP and President,
National
Businesses and
Marketing Services
*Effective when the spin-off occurs |
 68
Our Team
Chuck Davis
EVP, Research,
Development, Quality and
Innovation
Robert Gorski
EVP, Integrated
Supply Chain
Tom Corley
EVP and President
US Sales
Tom Sampson
EVP, Business
Transformation
*Effective when the spin-off occurs |
 69
Our Team
Kim Rucker
EVP, Corporate &
Legal Affairs,
General Counsel and
Corporate Secretary
Diane Johnson May
EVP, Human Resources
Sam Rovit
EVP, Strategy
President, Planters
*Effective when the spin-off occurs
Tim McLevish
EVP and Chief
Financial Officer |
 |
 GAAP
to Non-GAAP Reconciliation Reported
(GAAP)
Unrealized
G/(L) on
Hedging
Activities
Headquarter
Pension
Expense
General
Corporate
Expenses
Adjusted
Operating
Income
(Non-GAAP)
Net Revenue
18,655
$
-
$
-
$
-
$
18,655
$
Operating Income
2,923
(63)
(155)
(55)
3,196
Operating Income Margin
15.7%
17.1%
Kraft Foods Group, Inc.
Operating Income to Adjusted Operating Income
For the Twelve Months Ended December 31, 2011
($ in millions, except percentages) (Unaudited)
71 |
 GAAP
to Non-GAAP Reconciliation 72
Reported
(GAAP)
Impact of
Divestitures
Impact of
the 53rd
Week of
Shipments
Impact of
Currency
Organic
(Non-GAAP)
Reported
(GAAP)
Organic
(Non-GAAP)
Vol / Mix
Pricing
June 30, 2012
4,786
$
-
$
-
$
25
$
4,811
$
0.9%
1.5%
(1.4)pp
2.9pp
June 30, 2011
4,741
-
-
-
4,741
March 31, 2012
4,453
-
-
6
4,459
1.1%
3.4%
(2.6)pp
6.0pp
March 31, 2011
4,405
(91)
-
-
4,314
December 31, 2011
5,035
-
(225)
4
4,814
9.2%
8.1%
(0.2)pp
8.3pp
December 31, 2010
4,611
(159)
-
-
4,452
September 30, 2011
4,474
-
-
(33)
4,441
4.1%
6.6%
(0.8)pp
7.4pp
September 30, 2010
4,297
(130)
-
-
4,167
Trailing four quarter average
3.8%
4.9%
(1.3)pp
6.2pp
Organic Growth Drivers
Percent Change
Kraft Foods Group, Inc.
Net Revenue to Organic Net Revenue
For the Three Months Ended,
($ in millions, except percentages) (Unaudited)
Note: Reported net revenues include intercompany sales with Kraft ParentCo subsidiaries which
were $54 million for the six months ended June 30, 2012 and $100 million for the twelve
months ended December 31, 2011. |
 GAAP
to Non-GAAP Reconciliation Reported
(GAAP)
Restructuring
Costs
Unrealized
G/(L) on
Hedging
Activities
Headquarter
Pension
Expense
General
Corporate
Expenses
Adjusted
Operating
Income
(Non-GAAP)
June 30, 2012
2,963
$
(116)
$
(26)
$
(194)
$
(40)
$
3,339
$
June 30, 2011
2,929
-
15
(146)
(81)
3,141
Trailing four quarter growth
1.2%
6.3%
Kraft Foods Group, Inc.
Operating Income to Adjusted Operating Income
For the Trailing Four Quarters Ended,
($ in millions, except percentages) (Unaudited)
73 |
 GAAP
to Non-GAAP Reconciliation Reported
(GAAP)
Restructuring
Costs
Unrealized
G/(L) on
Hedging
Activities
Headquarter
Pension
Expense
General
Corporate
Expenses
Adjusted
Operating
Income
Margin
(Non-GAAP)
June 30, 2012
15.8%
(0.6)pp
(0.2)pp
(1.0)pp
(0.2)pp
17.8%
June 30, 2011
16.2%
0.0pp
0.1pp
(0.8)pp
(0.5)pp
17.4%
Trailing four quarter margin growth
(0.4)pp
0.4pp
Kraft Foods Group, Inc.
Operating Income Margin to Adjusted Operating Income Margin
For the Trailing Four Quarters Ended,
(Unaudited)
74 |