There are signs that Mondelēz International is beginning to stabilise after it reported full-year revenue for 2017 just 0.1% lower than the year before, thanks in part to a robust fourth quarter in which it also welcomed a new CEO.
For the year, Mondelēz turned over $25.9 billion, spurred on by strong growth in its Latin America segment. Operating income was 36.5% higher at $3.5 billion.
The results are as good as growth for the chocolate giant, which has not seen an increase in its annual turnover since 2013 and is struggling with a near-$10 billion drop in group revenue over the last five years.
Its 2017 results were also characterised by a 38.9% improvement in gross profit margin and a 12.1% increase in operating margin.
Mondelēz chief financial officer Brian Gladden said: “We are pleased with the solid results for 2017. We delivered a strong year of margin expansion and earnings growth, marking significant progress from four years ago. Our improved top-line performance was fuelled by our ‘power brands’ and favourable trends in emerging markets.”
Mondelēz – the owner of brands like Cadbury, Oreo and Milka – has also reported fourth-quarter revenue of $6.97 billion – up 2.9% on the previous year.
Dirk van de Put, who was announced as the company’s next CEO in August, took over from Irene Rosenfeld in November. Rosenfeld will remain with the company until the end of March in the position of chairman, before retiring from the company after more than a decade.
Van de Put said: “I’m very excited about the opportunities ahead to create value at Mondelēz International. We have strong foundational pillars in place, and we enter the year with improving momentum in our business. Our 2018 plan reflects an emphasis on execution, ongoing improvements in top-line growth and continuing actions to expand margins.
“As we develop our long-term strategic plan for sustainable growth, we’re focused on how we can optimise and accelerate our strengths to create more moments of joy for our consumers, customers, communities, colleagues and shareholders.”
In its fourth quarter, Mondelēz saw growth in year-on-year revenue across three of its four reporting regions; North America, which returned 0.6% less than the fourth quarter of 2016, was the only region to report a decline. Across the entire business, organic net revenue grew for both the fourth quarter and the full year – by 2.4% and 0.9% respectively.
For the final quarter, revenue grew 5% year on year in Europe; 4.2% in Latin America; and 2.6% in Asia, the Middle East and Africa.
Since October, the business has announced changes to its manufacturing operation in Australia and New Zealand, appointed Glen Walter as the head of its North American business, and reaffirmed its confidence in the role that India will play in helping it deliver $1 billion in online sales by 2020.
The company is also an investor in Keurig Green Mountain, which announced plans to acquire Dr Pepper Snapple this week in a deal that will create a coffee and soda giant.
However Mondelēz, which expects its 24% stake in Keurig to translate into a 13-14% stake in Keurig Dr Pepper, has said that it does not intend to invest fresh capital into the new venture.
© FoodBev Media Ltd 2020
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