Mondelez International, Inc. reported solid first quarter 2014 results. Separately, the company announced that it intends to combine its coffee portfolio with D.E Master Blenders 1753 B.V.'s coffee business to create the world's leading pure-play coffee company. Upon closing, Mondelez International will receive after-tax cash proceeds of approximately $5 billion and a 49 percent interest in the new company.
In the first quarter, the company delivered organic net revenue growth in line with expectations, strong adjusted operating income margin improvement and double-digit growth in both adjusted operating income and adjusted earnings per share (EPS) on a constant currency basis.
On a reported basis, net revenues were $8.6 billion, down 1.2 percent, and operating income was $843 million, up 1.1 percent. Diluted EPS was $0.09, including a negative 18 cents from the loss on debt extinguishment and a negative 9 cents from the remeasurement of net monetary assets in Venezuela.
Organic net revenue increased 2.8 percent, including a negative 0.6 percentage point impact from lower coffee revenues, reflecting the pass-through of lower green coffee costs. Overall, pricing was up 2.5 percentage points, as the company increased prices across most non-coffee categories in every region. Volume/mix was up slightly despite these higher prices. The 0.4 percentage point headwind from Easter shifting to the second quarter was lower than expected. Market share performance was strong, with over 60 percent of revenues gaining or holding share. Full report.
