Deerfield / IL. (mdlz) Mondelēz International reported its first quarter 2018 results. «We had a good start to the year with improving top-line momentum and continued progress in margin expansion driven by strength in Europe and AMEA», said Dirk Van de Put, Chairman and CEO. «We continue to see encouraging snacking category growth trends, especially in emerging markets. We remain focused on executing our 2018 plan while making good progress developing our long-term strategic framework».
Net Revenue
| USD in millions | Reported Net Revenues | Organic Net Revenue Growth | |||||||||||||
| Change | |||||||||||||||
| Q1 2018 | versus PY | Q1 2018 | Vol/Mix | Pricing | |||||||||||
| Latin America | USD | 891 | (2.1)% | 2.2% | (4.0)pp | 6.2 pp | |||||||||
| Asia, Middle East + Africa | 1,542 | 3.4 | 3.6 | 2.5 | 1.1 | ||||||||||
| Europe | 2,706 | 14.4 | 4.7 | 5.6 | (0.9) | ||||||||||
| North America | 1,626 | (1.3) | (1.8) | (1.3) | (0.5) | ||||||||||
| Mondelēz International | USD | 6,765 | 5.5 % | 2.4 % | 1.7 pp | 0.7 pp | |||||||||
| Emerging Markets | USD | 2,584 | 7.6% | 5.5% | |||||||||||
| Developed Markets | 4,181 | 4.2 | 0.4 | ||||||||||||
| Power Brands | USD | 5,137 | 8.2% | 2.8% | |||||||||||
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Operating Income and Diluted EPS
| USD in millions | Reported | Adjusted | |||||||||||||||
| Q1 2018 | versus PY (Rpt Fx) | Q1 2018 | versus PY (Rpt Fx) | versus PY (Cst Fx) | |||||||||||||
| Gross Profit | USD | 2,849 | 13.1 | % | USD | 2,666 | 4.8 | % | (0.5 | )% | |||||||
| Gross Profit Margin | 42.1 | % | 2.8 pp | 39.4 | % | (1.1)pp | |||||||||||
| Operating Income | USD | 1,224 | 48.4 | % | USD | 1,133 | 9.7 | % | 3.0 | % | |||||||
| Operating Income Margin | 18.1 | % | 5.2 pp | 16.7 | % | 0.2 pp | |||||||||||
| Net Earnings | USD | 938 | 48.9 | % | USD | 928 | 15.4 | % | 6.5 | % | |||||||
| Diluted EPS | USD | 0.62 | 51.2 | % | USD | 0.62 | 19.2 | % | 9.6 | % | |||||||
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- Net revenues increased 5.5 percent, driven by currency tailwinds. Organic Net Revenue increased 2.4 percent, with growth in all regions except North America.
- Gross profit margin was 42.1 percent, an increase of 280 basis points driven primarily by a favorable impact from currency and commodity hedging activities. Adjusted Gross Profit margin was 39.4 percent, a decrease of 110 basis points, driven by unfavorable mix, higher commodity costs and freight inflation.
- Operating income margin was 18.1 percent, up 520 basis points, driven primarily by a favorable impact from currency and commodity hedging activities and lower 2014-2018 Restructuring Program costs. Adjusted Operating Income margin increased 20 basis points to 16.7 percent due to reductions in selling, general + administrative costs and supply chain productivity savings, mostly offset by higher input costs and freight inflation.
- Diluted EPS was USD 0.62, up 51 percent, driven primarily by a favorable impact from currency and commodity hedging activities and favorable year-over-year currency translation.
- Adjusted EPS was USD 0.62 and grew 9.6 percent on a constant-currency basis, driven primarily by favorability on interest and fewer shares outstanding.
- Capital Return: The company repurchased approximately USD 500 million of its common stock and paid approximately USD 300 million in cash dividends.
2018 Outlook
Mondelēz International provides guidance on a non-GAAP basis, as the company cannot predict some elements that are included in reported GAAP results, including the impact of foreign exchange. Refer to the Outlook section in the discussion of non-GAAP financial measures below for more details.
The company maintains its full year 2018 outlook of Organic Net Revenue growth of 1 to 2 percent, Adjusted Operating Income margin of approximately 17 percent and double-digit Adjusted EPS growth on a constant-currency basis. The company estimates currency translation would increase net revenue growth by approximately 2 percent3 and Adjusted EPS by approximately USD 0.063. In addition, the company continues to expect Free Cash Flow1 of approximately USD 2.8 billion.
