Mondelez International Reports Q2 Results, Net Revenue Decreased 17.7 Percent

DEERFIELD, Ill., July 27, 2016 (GLOBE NEWSWIRE) -- Mondelēz International, Inc. reported its second quarter 2016 results.

Second Quarter Commentary

• Net revenue decreased 17.7 percent, driven by the deconsolidation of the coffee business, currency headwinds and deconsolidation of the company’s Venezuela operations.  Organic Net Revenue increased 1.5 percent, driven by pricing to recover currency-driven input costs in inflationary markets and continued improvement in overall volume/mix trends. 
• Gross profit margin was 39.9 percent, a decrease of 10 basis points, driven primarily by the negative impact from deconsolidation of the coffee business. Adjusted Gross Profit¹ margin was 40.1 percent, flat to prior year.  Strong net productivity was offset by currency driven inflation in excess of pricing and a 60 basis-point impact from mark-to-market adjustments associated with commodity and currency hedging.
• Operating income margin was 10.1 percent, down 90 basis points, driven by divestiture-related costs, Restructuring Program costs and the deconsolidation of the company’s Venezuela operations. Adjusted Operating Income margin expanded 210 basis points to 15.2 percent. These results reflect continued reductions in overhead costs, driven by the ongoing benefits from zero-based budgeting.
• Diluted EPS was $0.29, up $0.04 or 16.0 percent. The absence of costs from last year’s coffee business transactions had a favorable impact, which was partially offset by divestiture-related and Restructuring Program costs.  
• Adjusted EPS was $0.44 and grew 4.5 percent on a constant-currency basis, driven primarily by Adjusted Operating Income improvement largely offset by coffee dilution.
• The company returned approximately $1.8 billion to shareholders through share repurchases and cash dividends through the first half of the year. 

“Despite a challenging macro environment, our strong execution and first-half performance give us confidence in delivering our 2016 outlook and 2018 margin targets,” said Irene Rosenfeld, Chairman and CEO. “While our reported margin results reflect the negative impact from the loss of revenue from our coffee joint venture and Venezuela deconsolidation, we continue to drive strong margin expansion on an adjusted basis. Our ongoing focus on operational efficiency enables us to invest for sustainable, profitable growth in our Power Brands, white-space expansion and sales capabilities.  This is evidenced by our upcoming launch of Milka chocolate in China, a $2.8 billion market with significant growth potential, and our substantial investment in e-commerce.” Full report.