Food Business News - August 7, 2018 - 16

DEERFIELD, ILL. - The relative strength of
the global economy was reflected in
Mondelez International's second-quarter
results for fiscal 2018. In both developed
and emerging markets, the company
experienced sales growth of 3.3% and
0.2%, respectively. Tamping down
greater emerging market revenue gains
was an 11-day trucker strike in Brazil
that disrupted the flow of products from
reaching the market.
"We remain encouraged by industry


trends," said Dirk Van de Put, chairman
and chief executive officer, during a
July 25 conference call with securities
analysts. "Snacking growth is improving
globally, and our categories are up about
3%. It's particularly encouraging to see
that this growth was coming from both
developed and emerging markets.
"As you know, we have a broad
geographic footprint and generate a significant majority of our revenue outside
of North America. In the majority of
countries around the world, we have a
leading position in the highly attractive
snacking category as we have a stable of
iconic global and local brands."
Mondelez's net income during the
second quarter ended June 30 was $323
million, equal to 22c per share on the common stock, down from the same period
of the previous year when the company
earned $498 million, or 33c per share.

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Mondelez's innovation
strategy focuses on starting
small, experimenting and
bringing successful products
to scale.


Global tailwinds propel
Mondelez's second-quarter results

Sales for the quarter rose to $6,112
million from $5,986 million.
A line item affecting net income
during the quarter was a rise in selling,
general and administrative expenses to
$1,904 million from $1,455 million the
year prior.
In Mondelez's two largest markets,
North America and Europe, the company
performed well. In North America, net
sales rose 6.5% to $1,675 million. The lapping of a malware attack that occurred
during fiscal 2017 and disrupted Mondelez's supply chain was one reason for the
quarterly improvement.
"Recent innovations like Oreo
Thin Bites and Ritz Crisp & Thins have
performed well," Mr. Van de Put said.
"Our new innovation strategy is to start
small, experiment and bring brands to
scale based on what we learn in the local
In Europe, sales rose 6.1% to $2,303
"...We delivered another solid quarter with strong volume growth," Mr. Van
de Put said. "Our biscuit business delivered strong volume growth across most
of Western Europe, including Germany,
France, Italy and Spain. Our chocolate
brands, Milka, Toblerone and Côte d'Or,
also performed well. And chocobakery,
which includes Milka and Cadbury biscuits, continued its momentum.
Management raised its full year
2018 outlook for organic net revenue
growth to the high end of the previous
range of 1% to 2%.
"We're encouraged by the category
growth trends as well as our own revenue growth on a year-to-date basis," said
Brian T. Gladden, chief financial officer.
"Both of these measures are better than
our initial expectations coming into the
year. On the other side, we see Brazil,
which represents about 6% of our revenue, as more challenging than expected.
"Looking ahead, I'd remind you that
the comparisons in the second half are
more challenging given category growth
comparisons and the positive prior year impact of malware-related shipments. With
respect to our adjusted margin, adjusted
e.p.s. and free cash flow commitments, we
are maintaining outlook for the year." FBN
August 7, 2018


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