Attached files
| file | filename |
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| EX-99.1 - EX-99.1 - Mondelez International, Inc. | d488866dex991.htm |
| 8-K - FORM 8-K - Mondelez International, Inc. | d488866d8k.htm |
 Exhibit 99.2
Mondelez International
CAGNY Conference
February 19, 2013 |
 Forward-looking statements
2
This slide presentation contains a number of forward-looking statements. The words
“deliver,” “accelerating,” “leverage,” “drive,”
“expand,” “create,” “expect,” “opportunity,” “achievable,” and “increase”
and similar expressions are intended to identify our forward-looking statements. Examples of
our forward-looking statements include, but are not limited to, sustainable profitable
growth; H2 2013 growth; long runway for growth; Power Brands; innovation platforms; Hot Zone
penetration; Traditional Trade coverage; Next Wave markets; long-term growth target; Free
Cash Flow; use of capital; balance sheet; and ROIC. 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 in the forward-looking
statements include, but are not limited to, increased competition, pricing actions, continued
volatility in commodity costs, continued weak economic conditions, risks from operating
globally 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 most recently filed Annual
Report on Form 10-K and subsequent reports on Forms 10-Q and 8-K. We disclaim
and do not undertake any obligation to update or revise any forward-looking statement in
this slide presentation, except as required by applicable law or regulation. |
 Irene
Rosenfeld Chairman & CEO |
 Ingredients in place for sustainable,
profitable growth
4
Advantaged
Geographic
Footprint
Fast-
Growing
Categories
Favorite
Snacks
Brands
Strong
Routes-to-
Market
Proven
Innovation
Platforms
World-Class
Talent &
Capabilities |
 We are
a global snacks powerhouse… 5
$35 Billion
in 2012 Revenues
(1)
Biscuits includes salted/other snacks
Nearly 75% of revenues
in fast-growing snacks
categories
Beverages provide multi-
region scale, attractive growth
and strong margins
Biscuits
(1)
32%
Chocolate
27%
Gum & Candy
15%
Beverages
17%
Cheese &
Grocery
9% |
 18%
…
and a leader in our categories
6
North
North
America
America
Europe
Europe
Global
Global
Market
Market
Share
Share
Latin
Latin
America
America
Asia
Asia
Pacific
Pacific
Eastern
Eastern
Europe
Europe
Middle East
Middle East
& Africa
& Africa
15%
30%
7%
11%
16%
Source: Euromonitor market share
Biscuits
Chocolate
Gum
Candy
Coffee
Powdered Beverages |
 We
offer many of the world’s favorite brands |
 Advantaged geographic footprint
Large, growing developing
markets footprint
Strong positions in North
America and Europe
$35 Billion
in 2012 Revenues
8
Europe
39%
North
America
20%
Latin
America
15%
EEMEA
11%
Asia Pacific
15%
Based on 2013 Reporting Segments
*
*
In December 2012, we announced a reorganization of our management and reporting
structure following the Spin-Off of Kraft Foods Group. Beginning in
2013, our operations, management and operating segments will reflect: Asia Pacific;
Eastern Europe, Middle East & Africa (“EEMEA”); Europe; Latin America
and North America. Accordingly, we will begin reporting on our new
segment structure during the first quarter of 2013, including all historical periods we present. For
purposes of this presentation the above pie chart reflects this structure based on
our 2012 Net Revenues. |
 Track
record of strong performance 9
O/H % of NR
(60) bps
Reinvest in
Growth
Power Brands +8%
Organic NR +4.4%
(1)
+50 bps
(2)
A&C % of NR
+60 bps
Focus on
Power Brands
Expand Gross
Margin
Leverage
Overheads
Note: All figures based on FY 2012 results.
1)
Reported net revenues decreased (2.2)% for FY 2012. See GAAP
to Non-GAAP reconciliation at the end of the presentation. 2)
Reflects Adjusted Gross Margin. Reported gross profit margin
increased 70 bps. See GAAP to Non-GAAP reconciliation at the
end of the presentation.
|
 Led
the peer group in margin performance over the past two years
Basis
Points
Increase
in
Operating
Income
Margin
2010
to
2012
(1)
(3)
+110 bps
100
(100)
(400)
(2)
(200)
MDLZ
HSY
ULVR
NESN
HNZ
CL
BN
PG
CPB
GIS
PEP
K
KO
+70
+40
1)
Operating Income Margins exclude certain items as defined by the individual companies as sourced from
their respective company reports.
2)
Reflects Adjusted Operating Income Margin which excludes Integration Program costs, 2012-2014
Restructuring Program costs, Spin-Off Costs, Spin-Off-related pension adjustment,
operating income from divestitures and gains & losses from divestitures, net. Reported Operating Income Margin was 7.9% in FY 2010; 9.8% in 2011; and 10.4%
in FY 2012. See GAAP to Non-GAAP reconciliation at the end of this presentation. 3)
Through 1H 2012.
|
 Successfully integrated Cadbury
11
($ in billions)
~$0.8
~$0.6
~$0.2
Cost Synergies
(Cumulative P&L Impact)
Revenue Synergies
~$0.1
~$0.4
~$0.7
~$1.0
~105% of
$750MM
Target |
 Growth
accelerating in H2 2013 H2 2012
Growth tempered by:
Lower coffee pricing
Capacity constraints
Missteps in Brazil,
Russia and Canada
H1 2013
Lower coffee pricing
and capacity constraints
continue
Improvement in Brazil,
Russia and Canada
H2 2013
Cycle lower coffee
pricing
New capacity on-stream
12
FY 2013
Organic Revenue
growth at
low end of
5%-7% range |
 Leverage fast-growing categories
Drive Power Brands and advantaged global
innovation platforms
Expand distribution
Capitalize on numerous white space opportunities
We have a long runway for growth
13 |
 Powdered Beverages
Category growth remains robust…
14
Source: Euromonitor 2009-2011 actual and 2012 estimates
Category
MLDZ
Market Position
Global Category CAGR
(2009-2012)
+6%
+6%
+5%
+10%
+7%
Chocolate
Biscuits
Gum & Candy
Coffee |
 …
driven by income growth in developing markets
15
GDP per Capita
GDP per Capita
Consumption vs. GDP per Capita
Source: Euromonitor 2011
Chocolate
Biscuits
0
2
4
6
8
10
12
$0
$20
$40
$60
$80
$100
0
2
4
6
8
10
12
$0
$20
$40
$60
$80
$100 |
 Leverage Power Brands to drive top-tier growth
16
Capitalize on
Strengths in
Existing Markets
Seize White Space
Opportunities
Drive growth in Europe
Expanding into other developing
markets in 2013
$1B in revenues in developing markets,
up 20% in 2012
Leverage successful U.S. experience,
up 6% in 2012 |
 Roll-out innovation platforms globally
17
2012
2013
Launch
Early 2012
UK
Ireland
Germany
France
Sweden
Norway
Belgium
Austria
Brazil
Argentina
Russia
S. Africa
Canada
Poland |
 Increase Hot Zone penetration in Modern Trade
18
Hot
Zone
Presence
in
MDLZ Covered Outlets
2013E
Increase
’13E vs. ’11
% Outlets
Covered ’13E
1,800
+300
59%
6,200
+3,100
62%
56,700
+34,400
52% |
 Significant opportunity to expand Traditional
Trade coverage
19
274,000
+18,000
32%
1,000,000
+298,000
14%
450,000
+348,000
20%
MDLZ Coverage of
Traditional Trade Outlets
2013E
Increase
’13E vs. ’11
% Outlets
Covered ’13E |
 Initiated white space launches in India and China
20
Significant current market presence |
 Significant white space opportunities in Next
Wave markets
21
Significant current market presence |
 Long-term growth target is achievable
22
Double Digit
Growth
Low-to-Mid
Single Digit
Growth
$35B
EU
NA
LA
AP
EEMEA
By Geography
$35B
Low-to-Mid
Single Digit
Growth
Mid-to-High
Single Digit
Growth
Chocolate
Biscuits
Gum &
Candy
Beverages
Ch./Groc.
By Category
5% -
7%
Organic Growth |
 Well-positioned for sustainable, profitable growth
23
Advantaged geographic footprint
Portfolio of iconic brands
Virtuous cycle in full swing
Long runway of future growth opportunities |
 Dave
Brearton EVP and CFO |
 Generating cash to fund growth and drive
solid returns
25
Delivering solid Free Cash Flow
Prioritizing uses of Free Cash Flow
Focusing on Return on Invested Capital |
 Expect
strong Free Cash Flow generation over next 2 years
26
Combined
2013 and 2014
Cash from Operating Activities
~ $8.0
Capital Expenditure
(excl. Restructuring Program)
~ 4.0
Free Cash Flow, Pre-Restructuring
~ 4.0
2012-2014 Restructuring Program,
cash impact
~ 1.0
Dividends @ $0.52 per share
~ 2.0
Cash Available for Deployment
~ $1.0 |
 Priorities for use of Free Cash Flow
Disciplined Capital Deployment
27
Reinvest in the business to drive top-tier growth
Tack-on M&A, especially in Developing Markets
Return
of
capital
to
shareholders
–
dividends
and
share repurchases
Pay down debt to preserve balance sheet flexibility
2
1
3
4 |
 Stepping-up capital investments to support growth
28
Capital
Expenditures
as
Percentage
of
Net
Revenue
5%+
3.9%
3.8%
3.8%
Long-Term
Rate
4%
-
5% |
 Expanding capacity in developing markets
New Plants
Plant Expansions
Multi-Category
Multi-Category
Multi-Category
Multi-Category
Multi-Category
Biscuits
Gum
Biscuits
Gum
Biscuits
Biscuits
Chocolate
Chocolate
Chocolate
29 |
 Returning capital to shareholders
30
Dividends
Modest dividend
increasing over time
Minimum payout ratio of
30% of net earnings
Share Repurchases
Later this year will seek
multi-year authorization
to offset dilution |
 Preserve balance sheet flexibility
31
$19.4
~$17.5
Maintain investment-grade rating
with A2/P2 CP access
Use cash-on-hand to pay off
$1.8B of notes due 1H 2013
Possible further debt pay down to
build additional flexibility
Net Debt
~$15
Dec. 2012
Mid-2013 |
 ROIC
improvement will be driven by earnings growth and disciplined capital
deployment 32
ROIC currently at 7%
–
Total invested capital of $47B at December 31, 2012
ROIC to improve 30-50 bps per annum
–
Double-digit EPS growth
–
Tight management of working capital and capex
–
Return of capital to shareholders |
 Well-positioned for sustainable, profitable growth
33
Advantaged geographic footprint
Portfolio of iconic brands
Virtuous cycle in full swing
Long runway of future growth opportunities
Generate strong cash flow
•
•
•
•
• |
 34 |
 GAAP
to Non-GAAP Reconciliation 35
(1)
Includes
the
impacts
of
accounting
calendar
changes
and
the
53
rd
week
of
shipments
in
2011.
As
Restated
(GAAP)
Impact of
Divestitures
Impact of
Integration
Program
Impact of
Accounting
Calendar
Changes
(1)
Impact of
Currency
Organic
(Non-GAAP)
As
Restated
(GAAP)
Organic
(Non-GAAP)
2012
Mondelez International
35,015
$
(244)
$
-
$
-
$
1,576
$
36,347
$
(2.2)%
4.4%
2011
Mondelez International
35,810
$
(316)
$
1
$
(679)
$
-
$
34,816
$
Net Revenues to Organic Net Revenues
For the Twelve Months Ended December 31,
($ in millions, except percentages) (Unaudited)
% Change |
 GAAP
to Non-GAAP Reconciliation 36
(1)
Includes
the
impacts
of
accounting
calendar
changes
and
the
53
rd
week
of
shipments
in
2011.
As Restated
(GAAP)
Impact of
Divestitures
Impact of
Integration
Program
Impact of
Accounting
Calendar
Changes
(1)
Impact of
Currency
Organic
(Non-GAAP)
As
Restated
(GAAP)
Organic
(Non-GAAP)
17,194
$
(157)
$
-
$
-
$
841
$
17,878
$
(0.9)%
6.2%
17,353
$
(176)
$
-
$
(349)
$
-
$
16,828
$
Net Revenues to Organic Net Revenues
For the Six Months Ended June 30,
($ in millions, except percentages) (Unaudited)
% Change
2012
2011
Mondelez International
Mondelez International |
 GAAP
to Non-GAAP Reconciliation 37
(1)
costs
associated
with
the
acquisition.
For
the
twelve
months
ended
December
31,
2012,
$28
million
was
recorded
in
Cost
of
Sales
and
$112
million
was
recorded in Selling, General and Administrative expenses.
(2)
Spin-Off Costs represent non-recurring transaction and transition costs
associated with preparing the businesses for independent operations consisting primarily
of financial advisory fees, legal fees, accounting fees, tax services and
information systems infrastructure duplication, and financing and related costs to redistribute
to the pension adjustment defined as the estimated benefit plan expense based on
market conditions and benefit plan assumptions as of January 1, 2012,
associated with certain benefit plan obligations transferred to Kraft Foods Group
in the Spin-Off. (3)
Restructuring Program costs represent non-recurring restructuring and related
implementation costs reflecting primarily severance, asset disposals and other
manufacturing related non-recurring costs.
(4)
Reflects divestitures that occured in 2012.
Gross
Profit/Operating
Income
To
Adjusted
Gross
Profit/Operating
Income
For the Twelve Months Ended December 31,
($ in millions, except percentages) (Unaudited)
As
Restated
(GAAP)
Integration
Program
costs
(1)
Acquisition-
Related
costs
Spin-Off Costs
and Related
Adjustments
(2)
2012 - 2014
Restructuring
Program costs
(3)
Operating
Income from
Divested
Businesses
(4)
G/(L) on
Divestitures,
net
Adjusted
(Non-GAAP)
13,076
$
28
$
-
$
33
$
2
$
(71)
$
-
$
13,068
$
37.3%
37.6%
3,637
$
140
$
1
$
512
$
110
$
(58)
$
(107)
$
4,235
$
10.4%
12.2%
2012
Gross Profit
Gross Profit Margin
Operating Income
Operating Income Margin
Mondelez International
Integration
Program
costs
are
defined
as
the
costs
associated
with
combining
the
Mondelez
International
and
Cadbury
businesses,
and are separate from those
debt
and
secure
investment
grade
ratings
for
both
the
Kraft
Foods
Group
Business
and
the Mondelez
International
Business.
Spin-Off
related
adjustments refers |
 GAAP
to Non-GAAP Reconciliation 38
As Restated
(GAAP)
Integration
Program
costs
(1)
Spin-Off Costs
and Related
Adjustments
(2)
Operating
Income from
Divested
Businesses
(3)
Adjusted
(Non-GAAP)
Mondelez International
Gross Profit
13,100
$
110
$
43
$
(83)
$
13,170
$
Gross Profit Margin
36.6%
37.1%
Operating Income
3,498
$
521
$
137
$
(59)
$
4,097
$
Operating Income Margin
9.8%
11.5%
(1)
Integration
Program
costs
are
defined
as
the
costs
associated
with
combining
the
Mondelez
International
and
Cadbury
businesses,
and
are separate from those costs associated with the acquisition. For the
twelve months ended December 31, 2011, $1 million was recorded in Revenue,
$109 million was recorded in Cost of Sales and $411 million was recorded in Selling, General and Administrative expenses.
(2)
Spin-Off Costs represent non-recurring transaction and transition costs
associated with preparing the businesses for independent operations
consisting primarily of financial advisory fees, legal fees, accounting fees, tax
services and information systems infrastructure duplication, and
financing
and
related
costs
to
redistribute
debt
and
secure
investment
grade
ratings
for
both
the
Kraft
Foods
Group
Business
and
the
Mondelez
International
Business.
Spin-Off
related
adjustments
refers
to
the
pension
adjustment
defined
as
the
estimated
benefit
plan
expense based on market conditions and benefit plan assumptions as of January 1,
2012, associated with certain benefit plan obligations transferred to Kraft
Foods Group in the Spin-Off. (3)
Reflects divestitures that occured in 2012.
Gross
Profit/Operating
Income
To
Adjusted
Gross
Profit/Operating
Income
For the Twelve Months Ended December 31,
($ in millions, except percentages) (Unaudited)
2011 |
 39
GAAP to Non-GAAP Reconciliation
As Restated
(GAAP)
Integration
Program
costs
(1)
Spin-Off Costs
and Related
Adjustments
(2)
Operating
Income from
Divested
Businesses
(3)
Adjusted
(Non-GAAP)
Mondelez International
Gross Profit
11,872
$
49
$
99
$
(109)
$
11,911
$
Gross Profit Margin
37.7%
38.3%
Operating Income
2,496
$
646
$
364
$
(56)
$
3,450
$
Operating Income Margin
7.9%
11.1%
(1)
Integration
Program
costs
are
defined
as
the
costs
associated
with
combining
the
Mondelez
International
and
Cadbury
businesses,
and are separate from those costs associated with the acquisition. For the
twelve months ended December 31, 2010, $1 million was recorded in Revenue,
$48 million was recorded in Cost of Sales and $597 million was recorded in Selling, General and Administrative
expenses.
(2)
Spin-Off Costs represent non-recurring transaction and transition costs
associated with preparing the businesses for independent operations
consisting primarily of financial advisory fees, legal fees, accounting fees, tax
services and information systems infrastructure duplication, and
financing
and
related
costs
to
redistribute
debt
and
secure
investment
grade
ratings
for
both
the
Kraft
Foods
Group
Business
and
the
Mondelez
International
Business.
Spin-Off
related
adjustments
refers
to
the
pension
adjustment
defined
as
the
estimated
benefit
plan expense based on market conditions and benefit plan assumptions as of January
1, 2012, associated with certain benefit plan obligations transferred to
Kraft Foods Group in the Spin-Off. (3)
Reflects divestitures that occured in 2010 and 2012.
Gross
Profit/Operating
Income
To
Adjusted
Gross
Profit/Operating
Income
For the Twelve Months Ended December 31,
($ in millions, except percentages) (Unaudited)
2010 |
 As
Reported
Integration
Program
Costs
(1)
Spin-Off
Costs
(2)
2012-2014
Restructuring
Program Costs
(3)
Acquisition-
Related Costs
Spin-Off
Pension
Adjustment
(2)
Spin-Off
Interest
Adjustment
(2)
Operating
Income from
Divested
Businesses
Gain on
Divestitures,
net
As
Adjusted
Net revenues
35,015
$
-
$
-
$
-
$
-
$
-
$
-
$
(244)
$
-
$
34,771
$
Cost of sales
21,939
(28)
-
(2)
-
(33)
-
(173)
-
21,703
Gross profit
13,076
28
-
2
-
(33)
-
(71)
-
13,068
Gross profit margin
37.3%
37.6%
Selling, general and administrative expenses
9,176
(112)
(444)
(7)
(1)
(35)
-
(13)
-
8,564
153
-
-
(101)
-
-
-
-
-
52
(107)
-
-
-
-
-
-
-
107
-
Amortization of intangibles
217
-
-
-
-
-
-
-
-
217
Operating income
3,637
140
444
110
1
68
-
(58)
(107)
4,235
Operating income margin
10.4%
12.2%
1,863
-
(609)
-
-
-
(161)
-
-
1,093
Earnings from continuing operations before income taxes
1,774
140
1,053
110
1
68
161
(58)
(107)
3,142
Provision for income taxes
207
6
347
40
-
26
60
(13)
(48)
625
Effective tax rate
11.7%
19.9%
Earnings from continuing operations
1,567
$
134
$
706
$
70
$
1
$
42
$
101
$
(45)
$
(59)
$
2,517
$
Noncontrolling interest
27
-
-
-
-
-
-
-
-
27
1,540
$
134
$
706
$
70
$
1
$
42
$
101
$
(45)
$
(59)
$
2,490
$
Per share data:
-
Continuing operations
0.86
$
0.08
$
0.39
$
0.04
$
-
$
0.02
$
0.06
$
(0.03)
$
(0.03)
$
1.39
$
Average shares outstanding:
Diluted
1,789
Condensed Consolidated Statements of Earnings
(Gains) / losses on divestitures, net
Interest and other expense, net
Reported to Adjusted
For the Twelve Months Ended December 31, 2012
(in millions of dollars, except per share data) (Unaudited)
Asset impairment and exit costs
40
GAAP to Non-GAAP Reconciliation
Net
earnings
attributable
to
Mondele
z
International
-
Diluted
earnings
per
share
attributable
to
Mondele
z
International:
-
(1)
(2)
Spin-Off Costs represent non-recurring transaction and transition costs
associated with preparing the businesses for independent operations consisting primarily of financial advisory fees, legal fees,
accounting fees, tax services and information systems infrastructure duplication,
and financing and related costs to redistribute debt and secure investment grade ratings for both the Kraft Foods Group
plan
assumptions
as
of
January
1,
2012,
associated
with
certain
benefit
plan
obligations
transferred
to
Kraft
Foods
Group
in
the
Spin-Off.
Integration
Program
costs
are
defined
as
the
costs
associated
with
combining
the
Mondele
z
International
and
Cadbury
businesses,
and
are
separate
from
those
costs
associated
with
the
acquisition.
ez
-
-
Restructuring
Program
costs
represent
non-recurring
restructuring
and
related
implementation
costs
reflecting
primarily
severance,
asset
disposals
and
other
manufacturing
related
non-recurring
costs.
(3)
Business
and
the
Mondel
International
Business.
Spin-Off
related
adjustments
refers
to
the
pension
adjustment
defined
as
the
estimated
benefit
plan
expense
based
on
market
conditions
and
benefit |
 Net
earnings
attributable
to
Mondele
z
International
GAAP to Non-GAAP Reconciliation
41
-
As Reported
Integration
Program Costs
(1)
Spin-Off
Costs
(2)
Spin-Off
Pension
Adjustment
(2)
Spin-Off
Interest
Adjustment
(2)
Operating
Income from
Divested
Businesses
As Adjusted
Net revenues
35,810
$
1
$
-
$
-
$
-
$
(316)
$
35,495
$
Cost of sales
22,710
(109)
-
(43)
-
(233)
22,325
Gross profit
13,100
110
-
43
-
(83)
13,170
Gross profit margin
36.6%
37.1%
Selling, general and administrative expenses
9,382
(411)
(46)
(48)
-
(24)
8,853
(5)
-
-
-
-
-
(5)
-
-
-
-
-
-
-
Amortization of intangibles
225
-
-
-
-
-
225
Operating income
3,498
521
46
91
-
(59)
4,097
Operating income margin
9.8%
11.5%
1,618
-
-
-
(310)
-
1,308
Earnings from continuing operations before income taxes
1,880
521
46
91
310
(59)
2,789
Provision for income taxes
143
24
13
34
117
(14)
317
Effective tax rate
7.6%
11.4%
Earnings from continuing operations
1,737
$
497
$
33
$
57
$
193
$
(45)
$
2,472
$
Noncontrolling interest
20
-
-
-
-
-
20
1,717
$
497
$
33
$
57
$
193
$
(45)
$
2,452
$
Per share data:
Diluted
earnings
per
share
attributable
to
Mondele
z
International:
-
Continuing operations
0.97
$
0.28
$
0.02
$
0.03
$
0.11
$
(0.03)
$
1.38
$
Average shares outstanding:
Diluted
1,772
(1)
(2)
Spin-Off Costs represent non-recurring transaction and transition costs
associated with preparing the businesses for independent operations consisting primarily of financial advisory fees, legal fees,
accounting fees, tax services and information systems infrastructure duplication,
and financing and related costs to redistribute debt and secure investment grade ratings for both the Kraft Foods Group
plan
assumptions
as
of
January
1,
2012,
associated
with
certain
benefit
plan
obligations
transferred
to
Kraft
Foods
Group
in
the
Spin-Off.
Condensed Consolidated Statements of Earnings
(Gains) / losses on divestitures, net
Interest and other expense, net
Reported to Adjusted
For the Twelve Months Ended December 31, 2011
(in millions of dollars, except per share data) (Unaudited)
Asset impairment and exit costs
-
Integration
Program
costs
are
defined
as
the
costs
associated
with
combining
the
Mondele
z
International
and
Cadbury
businesses,
and
are
separate
from
those
costs
associated
with
the
acquisition.
Business
and
the
Mondele
z
International
Business.
Spin-Off
related
adjustments
refers
to
the
pension
adjustment
defined
as
the
estimated
benefit
plan
expense
based
on
market
conditions
and
benefit
-
- |