Mondelēz International Delivers on Key Financial and Strategic Commitments
Mondelēz International has reported a 0.2% rise in net revenue to $25.938 billion for 2018 despite the impact of currency and divestitures. Organic net revenue increased by 2.4%. Operating income decreased by 4.3% to $3.312 billion and margin decreased 60 basis points to 12.8%, driven primarily by the impact from pension participation changes in North America and lapping the prior-year gain on a divestiture and prior-year benefit of an indirect tax matter. Adjusted operating income increased $257 million at constant currency and margin increased 60 basis points to 16.7% due primarily to adjusted gross margin expansion.
The US-base global snacking group returned $3.4 billion of capital to shareholders through $2 billion in share repurchases and $1.4 billion in dividends in 2018.
“Our fourth quarter and full-year 2018 results demonstrate the power of our brands, the strength of our global footprint and the potential of our strategic plan,” says Dirk Van de Put (pictured), chairman and chief executive of Mondelēz International. “We delivered on our key financial and strategic commitments for the year, including solid top-line and bottom-line growth and strong cash flow generation. In 2019, we will continue to progress against our new strategy, which includes new investments to drive organic revenue growth and operational excellence across the organization.”
Key strategic initiatives during the year included the launch of a new approach to marketing including more balanced investment across both global and local brands to fully leverage the company’s portfolio and category-leading positions, and the development of a more locally-oriented commercial structure to drive greater consumer focus, improve speed and reduce complexity.
Mondelēz International has expanded its research, development and quality capabilities to drive innovation, including a new technical center in India and additional investment in a state-of-the-art facility in Poland. The group has announced the divestiture of a non-core cheese business in the Middle East and Africa to increase its focus on snacking.
Looking ahead, Mondelēz International expects organic net revenue growth to be between 2% and 3% and adjusted EPS growth of 3-5% on a constant currency basis. The company continues to expect free cash flow of approximately $2.8 billion.
