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Actionable news in MDLZ: Mondelez International, Inc.,

Mondelez: Mondelēz International Reports Q3 Results;

The following excerpt is from the company's SEC filing.

Reaffirms 2015 Outlook and 2016 Margin Target

Company Names Mark Clouse as Chief Commercial Officer,

Tim Cofer as Chief Growth Officer

DEERFIELD, Ill. October 28, 2015 Mondelēz International, Inc. (NASDAQ: MDLZ) today reported its third quarter 2015 results, reflecting continued strong Adjusted Operating Income

margin expansion and solid Organic Net Revenue

growth. Adjusted EPS

was flat versus the prior year on a constant-currency basis due to dilution related to the companys recently created coffee joint venture.

We delivered strong margin expansion in the third quarter by progressing our transformation agenda in a volatile and challenging macroeconomic environment, said Irene Rosenfeld, Chairman and CEO. Were continuing to aggressively reduce costs to expand margins and provide the fuel for incremental investments behind our Power Brands and route-to-market capabilities to drive sustainable revenue growth and improve market shares. As a result, we remain confident in our ability to deliver our 2015 outlook and our 2016 Adjusted Operating Income margin target of 15 to 16 percent, while continuing to return significant capital to our shareholders.

On a reported basis, net revenues were $6.8 billion, down 17.8 percent, including a negative 13.6 percentage point impact from currency and a negative 9.3 percentage points from the coffee business transactions. Operating income was $7.8 billion, up 815 percent, including a $7.1 billion pre-tax gain from the coffee transaction. Diluted EPS was $4.46, up $3.93.

Net Revenue

$ in millions


Net Revenues

Organic Net Revenue Growth

Q3 2015



Quarter 3

Latin America

Asia Pacific

Eastern Europe, Middle East & Africa

North America

Emerging Markets

Developed Markets

September Year-to-Date

Sept YTD




Third Quarter Commentary

Organic Net Revenue increased 3.7 percent, as the company raised prices to recover currency-driven input cost inflation. Volume/mix was unfavorable, largely due to price elasticity as well as a 70 basis point headwind resulting from strategic decisions to exit certain low-margin product lines. Power Brands

grew 5.1 percent. Organic Net Revenue from emerging markets

was up 10.3 percent, while developed markets

decreased 0.5 percent.

Operating Income and Diluted EPS

(Rpt Fx)

(Cst Fx)

Gross Profit

Gross Profit Margin

Operating Income Margin

Net Earnings

Adjusted Gross Profit

margin was 39.1 percent, up 180 basis points. The improvement was driven by strong net productivity partially offset by a negative 40 basis point impact from a mark-to-market adjustment associated with commodities and currency hedging.

Adjusted Operating Income margin expanded 170 basis points to 14.1 percent. The company significantly stepped up advertising and consumer support, especially behind its Power Brands, and continued to reduce overhead costs as a percent of revenue.

Adjusted EPS was flat to prior year on a constant-currency basis as the companys strong operating performance was offset by dilution related to the recently created coffee joint venture as well as cycling an unusually low effective tax rate in the prior-year quarter.

Return of Capital

Through the first nine months, the company repurchased $3.1 billion of its common stock at an average price of $38.69 per share and paid $736 million in dividends.

The company reaffirmed its outlook for 2015, as described below, as well as its Adjusted Operating Income margin target for 2016 of 15 percent to 16 percent.


Revenue Growth

2015: 3%+

2015 : ~14% excluding (20)-(30) basis points of stranded overhead costs

2015: Double-digit growth on a constant currency basis

Free Cash Flow

excluding items

2015: ~$1.0 billion

In addition, the company estimates foreign exchange translation to reduce 2015 net revenue growth by approximately 13 percentage points

and Adjusted EPS by approximately $0.33

due to the strengthening of the U.S. dollar versus other currencies.

Consolidating Focus on Cost Savings, Growth and Commercial Execution

Mondelēz International also announced today that it has named Mark Clouse, 47, to the newly created position of Chief Commercial Officer (CCO), and Tim Cofer, 46, as Chief Growth Officer (CGO), as the company continues to sharpen its focus on cost savings, growth and commercial execution. These changes become effective in January 2016.

Weve seen great benefit in consolidating our cost agenda under our CFO and our growth agenda under our Chief Growth Officer, Rosenfeld said. We now have the same opportunity to sharpen our global commercial execution by creating this new Chief Commercial Officer position. Brian Gladden, Tim Cofer and Mark Clouse, together with our region presidents, Daniel Myers and our Integrated Supply Chain teams, will work hand in hand to advance our transformation agenda and accelerate growth on both our top and bottom lines.

In his role as CCO, Clouse, who currently serves as CGO, will oversee the companys commercial execution with oversight of all five geographic regions as well as the global sales function. This new role is designed to simplify and accelerate day-to-day P&L decision-making and trade-offs while focusing investments in areas that will best drive profitable growth.

Cofer, who currently serves as Executive Vice President and President, Asia Pacific and EEMEA, is a 23-year veteran of the company and has successfully led large commercial operations in four different regions around the world. As CGO, he will oversee the development of next generation

innovation platforms and new business opportunities that will accelerate future growth. Corporate strategy, global categories and global marketing, as well as research, development and quality will report to him.

Mark and Tim are very talented senior executives who are well-positioned to take on these new enterprise roles, Rosenfeld continued. Their strong operating experience in emerging and developed markets, combined with a deep understanding of our categories, will enable us to continue to deliver sustainable, profitable growth and top-tier returns to our shareholders.

Concurrent with these changes, the company announced that Maurizio Brusadelli will assume the role of President of Asia Pacific; Dave Brearton, EVP, Strategic Initiatives, will retire at year-end; and Tracey Belcourt, EVP, Strategy, will leave the organization.

Conference Call

Mondelēz International will host a conference call for investors with accompanying slides to review its results at 10 a.m. ET today. Investors and analysts may participate via phone by calling 1-800-322-9079 from the United States and 1-973-582-2717 from other locations. Access to a live audio webcast with accompanying slides and a replay of the event will be available at

. The company will be live tweeting from the event at

About Mondelēz International

Mondelēz International, Inc. (NASDAQ: MDLZ) is a global snacking powerhouse, with pro forma 2014 revenue of more than $30 billion. Creating delicious moments of joy in 165 countries, Mondelēz International is a world leader in biscuits, chocolate, gum, candy and powdered beverages, with billion-dollar brands such as



Cadbury, Cadbury Dairy Milk



gum and

powdered beverages. Mondelēz International is a proud member of the Standard and Poors 500, NASDAQ 100 and Dow Jones Sustainability Index. Visit

or follow us on Twitter at

End Notes

Organic Net Revenue, Adjusted Operating Income, Adjusted EPS, Adjusted Gross Profit and Free Cash Flow excluding items are non-GAAP financial measures. Please see discussion of non-GAAP financial measures at the end of this press release for more information.

Power Brands include some of the companys largest global and regional brands, such as

Chips Ahoy!





candy; and

powdered beverages.

Emerging markets consist of the Latin America and Eastern Europe, Middle East and Africa regions in their entirety; the Asia Pacific region, excluding Australia, New Zealand and Japan;

and the following countries from the Europe region: Poland, Czech Republic, Slovak Republic, Hungary, Bulgaria, Romania, the Baltics and the East Adriatic countries.

Developed markets include the entire North America region, the Europe region excluding the countries included in the emerging markets definition, and Australia, New Zealand and Japan from the Asia Pacific region.

Net earnings attributable to Mondelēz International.

Currency estimate is based on published rates from Oanda on October 26, 2015.

Forward-Looking Statements

This press release contains a number of forward-looking statements. Words, and variations of words, such as will, expect, believe, would, estimate, anticipate, deliver, positioned, target, outlook and similar expressions are intended to identify our forward-looking statements, including, but not limited to, statements about: our future performance, including our future revenue growth, earnings per share, margins and cash flow; currency and the effect of foreign exchange translation on our results of operations; the costs of, timing of expenditures under and completion of our restructuring program; startup challenges related to the coffee joint venture and the consideration we receive and gain we recognize on the coffee business transactions; market share; stranded overhead costs; and our Outlook, including 2015 Organic Net Revenue growth, Adjusted Operating Income margin, Adjusted EPS and Free Cash Flow excluding items. These forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond our control, which could cause our actual results to differ materially from those indicated in our forward-looking statements. Such factors include, but are not limited to, risks from operating globally including in emerging markets; changes in currency exchange rates, controls and restrictions; continued volatility of commodity and other input costs; weakness in economic conditions; weakness in consumer spending; pricing actions; unanticipated disruptions to our business; competition; the restructuring program and our other transformation initiatives not yielding the anticipated benefits; changes in the assumptions on which the restructuring program is based; and tax law changes. Please also 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. Mondelēz International disclaims and does not undertake any obligation to update or revise any forward-looking statement in this press release, except as required by applicable law or regulation.

Mondelēz International, Inc. and Subsidiaries

Reconciliation of GAAP and Non-GAAP Financial Measures


The company reports its financial results in accordance with accounting principles generally accepted in the United States (GAAP or referred to herein as Reported). However, management believes that certain non-GAAP financial measures should be considered when assessing the companys ongoing performance to provide more complete information on the factors and trends affecting the companys business. Management also uses these non-GAAP financial measures in making financial, operating and planning decisions and in evaluating the companys performance. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, the companys Reported results prepared in accordance with GAAP. In addition, the non-GAAP measures the company uses may differ from non-GAAP measures used by other companies. Because GAAP financial measures on a forward-looking basis are neither accessible nor deemed to be significantly different from the non-GAAP financial measures, and reconciling information is not available without unreasonable effort, the company has not provided that information with regard to the non-GAAP financial measures in the companys outlook.


The companys non-GAAP financial measures and corresponding metrics reflect how the company evaluates its operating results currently and provide improved comparability of operating results. As new events or circumstances arise, these definitions could change over time:

Organic Net Revenue is defined as net revenues excluding the impacts of acquisitions, divestitures

, the historical coffee business

, Integration Program costs, accounting calendar changes and currency rate fluctuations. The company also evaluates Organic Net Revenue growth from emerging markets and its Power Brands.

Adjusted Gross Profit is defined as gross profit excluding the 2012-2014 Restructuring Program, the 2014-2018 Restructuring Program, the Integration Program and other acquisition integration costs, incremental costs associated with the coffee business transactions, the operating results of divestitures

and the historical coffee business operating results

. The company also evaluates growth in the companys Adjusted Gross Profit on a constant currency basis.

Adjusted Operating Income and Adjusted Segment Operating Income are defined as operating income (or segment operating income) excluding the impacts of Spin-Off Costs, the 2012-2014 Restructuring Program, the 2014-2018 Restructuring Program, the Integration Program and other acquisition integration costs, the remeasurement of net monetary assets in Venezuela, the benefit from the Cadbury acquisition-related indemnification resolution, incremental costs associated with the coffee...