First Quarter Highlights
CHICAGO, April 27, 2023 (GLOBE NEWSWIRE) -- Mondelēz International, Inc. (Nasdaq: MDLZ) today reported its first quarter 2023 results.
“We delivered a strong start to the year, with double-digit net revenue and profit dollar growth in our first quarter, as we continued to execute against our long-term strategy. These results were driven by ongoing pricing execution to offset cost inflation and solid volume growth,” said Dirk Van de Put, Chairman and Chief Executive Officer. “We saw broad-based demand across both developed and emerging markets, as consumers around the world continue to prioritize our chocolate, biscuits, and baked snacks categories and brands. We also continued to make significant progress against our portfolio reshaping initiatives, reducing our coffee equity stakes, while driving strong top- and bottom-line synergies from recently acquired assets, including Clif Bar. Our dedicated people remain focused on accelerating and compounding growth through significant investments in our brands, talent and capabilities, while advancing our sustainability initiatives. Given our strong Q1 performance, we are raising our net revenue and earnings outlook for the year.”
Net Revenue
$ in millions | ReportedNet Revenues | Organic Net Revenue Growth | ||||||||||
Q1 2023 | % Chgvs PY | Q1 2023 | Vol/Mix | Pricing | ||||||||
Quarter 1 | ||||||||||||
Latin America | $ | 1,211 | 46.6 | % | 39.0 | % | 7.4 pp | 31.6 pp | ||||
Asia, Middle East & Africa | 1,939 | 3.9 | 13.8 | 5.8 pp | 8.0 | |||||||
Europe | 3,307 | 12.7 | 18.9 | 1.0 pp | 17.9 | |||||||
North America | 2,709 | 26.8 | 17.3 | 2.3 pp | 15.0 | |||||||
Mondelēz International | $ | 9,166 | 18.1 | % | 19.4 | % | 3.2 pp | 16.2 pp | ||||
Emerging Markets | $ | 3,598 | 21.4 | % | 25.2 | % | 4.5 pp | 20.7 pp | ||||
Developed Markets | $ | 5,568 | 16.0 | % | 15.8 | % | 2.4 pp | 13.4 pp |
Operating Income and Diluted EPS
$ in millions, except per share data | Reported | Adjusted | ||||||||||||||
Q1 2023 | vs PY(Rpt Fx) | Q1 2023 | vs PY(Rpt Fx) | vs PY(Cst Fx) | ||||||||||||
Quarter 1 | ||||||||||||||||
Gross Profit | $ | 3,446 | 15.5 | % | $ | 3,399 | 13.0 | % | 18.2 | % | ||||||
Gross Profit Margin | 37.6 | % | (0.8) pp | 37.1 | % | (1.7) pp | ||||||||||
Operating Income | $ | 1,505 | 37.6 | % | $ | 1,581 | 14.8 | % | 20.7 | % | ||||||
Operating Income Margin | 16.4 | % | 2.3 pp | 17.2 | % | (0.6) pp | ||||||||||
Net Earnings 2 | $ | 2,081 | 143.4 | % | $ | 1,227 | 8.4 | % | 15.5 | % | ||||||
Diluted EPS | $ | 1.52 | 149.2 | % | $ | 0.89 | 9.9 | % | 17.3 | % |
First Quarter Commentary
2023 Outlook
Mondelēz International provides its outlook 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.
For 2023, the company is updating its 2023 fiscal outlook and now expects 10+ percent Organic Net Revenue growth versus the prior outlook of 5 to 7 percent, which reflects the strength of its year-to-date performance. The company's expectation for Adjusted EPS growth on a constant currency basis is now 10+ percent versus the prior outlook of high single digits. The company's Free Cash Flow outlook remains at $3.3+ billion. The company estimates currency translation would decrease 2023 net revenue growth by approximately 2 percent4 with a negative $0.09 impact to Adjusted EPS4.
Outlook is provided in the context of greater than usual volatility as a result of COVID-19 and geopolitical uncertainty.
Conference Call
Mondelēz International will host a conference call for investors with accompanying slides to review its results at 5 p.m. ET today. A listen-only webcast will be provided at www.mondelezinternational.com. An archive of the webcast will be available on the company’s web site.
About Mondelēz International
Mondelēz International, Inc. (Nasdaq: MDLZ) empowers people to snack right in over 150 countries around the world. With 2022 net revenues of approximately $31 billion, MDLZ is leading the future of snacking with iconic global and local brands such as Oreo, Ritz, LU, Clif Bar and Tate's Bake Shop biscuits and baked snacks, as well as Cadbury Dairy Milk, Milka and Toblerone chocolate. Mondelēz International is a proud member of the Standard and Poor’s 500, Nasdaq 100 and Dow Jones Sustainability Index. Visit www.mondelezinternational.com or follow the company on Twitter at www.twitter.com/MDLZ.
End Notes
Additional Definitions
Emerging markets consist of the Latin America region in its entirety; the Asia, Middle East and Africa region excluding Australia, New Zealand and Japan; and the following countries from the Europe region: Russia, Ukraine, Türkiye, Kazakhstan, Georgia, Poland, Czech Republic, Slovak Republic, Hungary, Bulgaria, Romania, the Baltics and the East Adriatic countries.
Developed markets include the entire North America region, the Europe region excluding the countries included in the emerging markets definition, and Australia, New Zealand and Japan from the Asia, Middle East and Africa region.
Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws, including any projections of earnings, revenue or other financial items; any statements of the plans, strategies and objectives of management, including for future operations, capital expenditures or share repurchases; any statements concerning proposed new products, services, or developments; any statements regarding future economic conditions or performance; any statements of belief or expectation; and any statements of assumptions underlying any of the foregoing or other future events. Forward-looking statements may include, among others, the words, and variations of words, “will,” “may,” “expect,” “would,” “could,” “might,” “intend,” “plan,” “believe,” “likely,” “estimate,” “anticipate,” “objective,” “predict,” “project,” “drive,” “seek,” “aim,” “target,” “potential,” “commitment,” “outlook,” “continue” or any other similar words.
Although we believe that the expectations reflected in any of our forward-looking statements are reasonable, actual results or outcomes could differ materially from those projected or assumed in any of our forward-looking statements. Our future financial condition and results of operations, as well as any forward-looking statements, are subject to change and to inherent risks and uncertainties, many of which are beyond our control. Important factors that could cause our actual results or performance to differ materially from those contained in or implied by our forward-looking statements include, but are not limited to, the following:
There may be other factors not presently known to us or which we currently consider to be immaterial that could cause our actual results to differ materially from those projected in any forward-looking statements we make. We disclaim and do not undertake any obligation to update or revise any forward-looking statement in this press release except as required by applicable law or regulation. In addition, historical, current and forward-looking sustainability-related statements may be based on standards for measuring progress that are still developing, internal controls and processes that continue to evolve, and assumptions that are subject to change in the future.
Schedule 1 | ||||||||
Mondelēz International, Inc. and Subsidiaries | ||||||||
Condensed Consolidated Statements of Earnings | ||||||||
(in millions of U.S. dollars and shares, except per share data) | ||||||||
(Unaudited) | ||||||||
For the Three Months Ended March 31, | ||||||||
2023 | 2022 | |||||||
Net revenues | $ | 9,166 | $ | 7,764 | ||||
Cost of sales | 5,720 | 4,781 | ||||||
Gross profit | 3,446 | 2,983 | ||||||
Gross profit margin | 37.6% | 38.4% | ||||||
Selling, general and administrative expenses | 1,855 | 1,693 | ||||||
Asset impairment and exit costs | 47 | 164 | ||||||
Amortization of intangible assets | 39 | 32 | ||||||
Operating income | 1,505 | 1,094 | ||||||
Operating income margin | 16.4% | 14.1% | ||||||
Benefit plan non-service income | (19 | ) | (33 | ) | ||||
Interest and other expense, net | 95 | 168 | ||||||
Gain on marketable securities | (796 | ) | - | |||||
Earnings before income taxes | 2,225 | 959 | ||||||
Income tax provision | (658 | ) | (210 | ) | ||||
Effective tax rate | 29.6% | 21.9% | ||||||
Gain/(loss) on equity method investment transactions | 487 | (5 | ) | |||||
Equity method investment net earnings | 35 | 117 | ||||||
Net earnings | 2,089 | 861 | ||||||
Noncontrolling interest earnings | (8 | ) | (6 | ) | ||||
Net earnings attributable to Mondelēz International | $ | 2,081 | $ | 855 | ||||
Per share data: | ||||||||
Basic earnings per share attributable to Mondelēz International | $ | 1.52 | $ | 0.62 | ||||
Diluted earnings per share attributable to Mondelēz International | $ | 1.52 | $ | 0.61 | ||||
Average shares outstanding: | ||||||||
Basic | 1,366 | 1,389 | ||||||
Diluted | 1,373 | 1,398 |
Schedule 2 | ||||||||||||||
Mondelēz International, Inc. and Subsidiaries | ||||||||||||||
Condensed Consolidated Balance Sheets | ||||||||||||||
(in millions of U.S. dollars) | ||||||||||||||
(Unaudited) | ||||||||||||||
March 31, | December 31, | |||||||||||||
2023 | 2022 | |||||||||||||
ASSETS | ||||||||||||||
Cash and cash equivalents | $ | 1,917 | $ | 1,923 | ||||||||||
Trade receivables | 3,502 | 3,088 | ||||||||||||
Other receivables | 810 | 819 | ||||||||||||
Inventories, net | 3,627 | 3,381 | ||||||||||||
Other current assets | 2,815 | 880 | ||||||||||||
Total current assets | 12,671 | 10,091 | ||||||||||||
Property, plant and equipment, net | 9,131 | 9,020 | ||||||||||||
Operating lease right of use assets | 657 | 660 | ||||||||||||
Goodwill | 23,604 | 23,450 | ||||||||||||
Intangible assets, net | 19,810 | 19,710 | ||||||||||||
Prepaid pension assets | 1,065 | 1,016 | ||||||||||||
Deferred income taxes | 451 | 473 | ||||||||||||
Equity method investments | 3,397 | 4,879 | ||||||||||||
Other assets | 2,000 | 1,862 | ||||||||||||
TOTAL ASSETS | $ | 72,786 | $ | 71,161 | ||||||||||
LIABILITIES | ||||||||||||||
Short-term borrowings | $ | 2,461 | $ | 2,299 | ||||||||||
Current portion of long-term debt | 1,185 | 383 | ||||||||||||
Accounts payable | 7,885 | 7,562 | ||||||||||||
Accrued marketing | 2,668 | 2,370 | ||||||||||||
Accrued employment costs | 785 | 949 | ||||||||||||
Other current liabilities | 3,547 | 3,168 | ||||||||||||
Total current liabilities | 18,531 | 16,731 | ||||||||||||
Long-term debt | 18,556 | 20,251 | ||||||||||||
Long-term operating lease liabilities | 508 | 514 | ||||||||||||
Deferred income taxes | 3,648 | 3,437 | ||||||||||||
Accrued pension costs | 387 | 403 | ||||||||||||
Accrued postretirement health care costs | 214 | 217 | ||||||||||||
Other liabilities | 2,668 | 2,688 | ||||||||||||
TOTAL LIABILITIES | 44,512 | 44,241 | ||||||||||||
EQUITY | ||||||||||||||
Common Stock | - | - | ||||||||||||
Additional paid-in capital | 32,112 | 32,143 | ||||||||||||
Retained earnings | 33,040 | 31,481 | ||||||||||||
Accumulated other comprehensive losses | (10,814 | ) | (10,947 | ) | ||||||||||
Treasury stock | (26,110 | ) | (25,794 | ) | ||||||||||
Total Mondelēz International Shareholders' Equity | 28,228 | 26,883 | ||||||||||||
Noncontrolling interest | 46 | 37 | ||||||||||||
TOTAL EQUITY | 28,274 | 26,920 | ||||||||||||
TOTAL LIABILITIES AND EQUITY | $ | 72,786 | $ | 71,161 | ||||||||||
March 31, | December 31, | |||||||||||||
2023 | 2022 | Incr/(Decr) | ||||||||||||
Short-term borrowings | $ | 2,461 | $ | 2,299 | $ | 162 | ||||||||
Current portion of long-term debt | 1,185 | 383 | 802 | |||||||||||
Long-term debt | 18,556 | 20,251 | (1,695 | ) | ||||||||||
Total Debt | 22,202 | 22,933 | (731 | ) | ||||||||||
Cash and cash equivalents | 1,917 | 1,923 | (6 | ) | ||||||||||
Net Debt (1) | $ | 20,285 | $ | 21,010 | $ | (725 | ) | |||||||
(1) Net debt is defined as total debt, which includes short-term borrowings, current portion of long-term debt and long-term debt, less cash and cash equivalents. |
Schedule 3 | ||||||||||
Mondelēz International, Inc. and Subsidiaries | ||||||||||
Condensed Consolidated Statements of Cash Flows | ||||||||||
(in millions of U.S. dollars) | ||||||||||
(Unaudited) | ||||||||||
For the Three Months Ended March 31, | ||||||||||
2023 | 2022 | |||||||||
CASH PROVIDED BY/(USED IN) OPERATING ACTIVITIES | ||||||||||
Net earnings | $ | 2,089 | $ | 861 | ||||||
Adjustments to reconcile net earnings to operating cash flows: | ||||||||||
Depreciation and amortization | 303 | 275 | ||||||||
Stock-based compensation expense | 38 | 24 | ||||||||
Deferred income tax provision/(benefit) | 199 | (70 | ) | |||||||
Asset impairments and accelerated depreciation | 18 | 155 | ||||||||
Loss on early extinguishment of debt | - | 38 | ||||||||
(Gain)/loss on equity method investment transactions | (487 | ) | 5 | |||||||
Equity method investment net earnings | (35 | ) | (117 | ) | ||||||
Distributions from equity method investments | 102 | 107 | ||||||||
Unrealized gain on derivative contracts | (67 | ) | (13 | ) | ||||||
Unrealized gain on marketable securities | (787 | ) | - | |||||||
Non-cash items, net | 25 | - | ||||||||
Change in assets and liabilities, net of acquisitions and divestitures: | ||||||||||
Receivables, net | (590 | ) | (517 | ) | ||||||
Inventories, net | (232 | ) | (81 | ) | ||||||
Accounts payable | 216 | 397 | ||||||||
Other current assets | (137 | ) | (104 | ) | ||||||
Other current liabilities | 517 | 230 | ||||||||
Change in pension and postretirement assets and liabilities, net | (49 | ) | (59 | ) | ||||||
Net cash provided by operating activities | 1,123 | 1,131 | ||||||||
CASH PROVIDED BY/(USED IN) INVESTING ACTIVITIES | ||||||||||
Capital expenditures | (223 | ) | (167 | ) | ||||||
Acquisitions, net of cash received | 1 | (1,418 | ) | |||||||
Proceeds from divestitures including equity method investments | 1,034 | 66 | ||||||||
(Payments)/proceeds from investments and derivative settlements | (176 | ) | 78 | |||||||
Net cash provided by/(used in) investing activities | 636 | (1,441 | ) | |||||||
CASH PROVIDED BY/(USED IN) FINANCING ACTIVITIES | ||||||||||
Net issuances/(repayments) of short-term borrowings | 156 | 217 | ||||||||
Long-term debt proceeds | - | 1,991 | ||||||||
Long-term debt repayments | (1,036 | ) | (2,306 | ) | ||||||
Repurchases of Common Stock | (399 | ) | (751 | ) | ||||||
Dividends paid | (529 | ) | (491 | ) | ||||||
Other | 51 | 60 | ||||||||
Net cash provided by/(used in) financing activities | (1,757 | ) | (1,280 | ) | ||||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (11 | ) | (10 | ) | ||||||
Cash, Cash Equivalents and Restricted Cash | ||||||||||
(Decrease) / increase | (9 | ) | (1,600 | ) | ||||||
Balance at beginning of period | 1,948 | 3,553 | ||||||||
Balance at end of period | $ | 1,939 | $ | 1,953 | ||||||
Mondelēz International, Inc. and SubsidiariesReconciliation of GAAP and Non-GAAP Financial Measures(Unaudited)
The company reports its financial results in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). However, management believes that also presenting certain non-GAAP financial measures provides additional information to facilitate the comparison of the company’s historical operating results and trends in its underlying operating results, and provides additional transparency on how the company evaluates its business. Management uses these non-GAAP financial measures in making financial, operating and planning decisions and in evaluating the company’s performance. The company also believes that presenting these measures allows investors to view its performance using the same measures that the company uses in evaluating its financial and business performance and trends.
The company considers quantitative and qualitative factors in assessing whether to adjust for the impact of items that may be significant or that could affect an understanding of its ongoing financial and business performance and trends. The adjustments generally fall within the following categories: acquisition & divestiture activities, gains and losses on intangible asset sales and non-cash impairments, major program restructuring activities, constant currency and related adjustments, major program financing and hedging activities and other major items affecting comparability of operating results. See below for a description of adjustments to the company’s U.S. GAAP financial measures included herein.
Non-GAAP information should be considered as supplemental in nature and is not meant to be considered in isolation or as a substitute for the related financial information prepared in accordance with U.S. GAAP. In addition, the company’s non-GAAP financial measures may not be the same as or comparable to similar non-GAAP measures presented by other companies.
DEFINITIONS OF THE COMPANY’S NON-GAAP FINANCIAL MEASURESThe company’s non-GAAP financial measures and corresponding metrics reflect how the company evaluates its operating results currently and provide improved comparability of operating results. As new events or circumstances arise, these definitions could change. When these definitions change, the company provides the updated definitions and presents the related non-GAAP historical results on a comparable basis. When items no longer impact the company’s current or future presentation of non-GAAP operating results, the company removes these items from its non-GAAP definitions. In the first quarter of 2023, the company added to the non-GAAP definition for divestitures the inclusion of changes from equity method investment accounting to accounting for equity interests with readily determinable fair values (“marketable securities”). In addition, we added to the non-GAAP definitions the exclusion of gains or losses associated with marketable securities.
See the attached schedules for supplemental financial data and corresponding reconciliations of the non-GAAP financial measures referred to above to the most comparable U.S. GAAP financial measures for the three months ended March 31, 2023 and March 31, 2022. See Items Impacting Comparability of Operating Results below for more information about the items referenced in these definitions that specifically impacted the company’s results.
SEGMENT OPERATING INCOMEThe company uses segment operating income to evaluate segment performance and allocate resources. The company believes it is appropriate to disclose this measure to help investors analyze segment performance and trends. Segment operating income excludes unrealized gains and losses on hedging activities (which are a component of cost of sales), general corporate expenses (which are a component of selling, general and administrative expenses), amortization of intangibles, gains and losses on divestitures and acquisition-related costs (which are a component of selling, general and administrative expenses) in all periods presented. The company excludes these items from segment operating income in order to provide better transparency of its segment operating results. Furthermore, the company centrally manages benefit plan non-service income and interest and other expense, net. Accordingly, the company does not present these items by segment because they are excluded from the segment profitability measure that management reviews.
ITEMS IMPACTING COMPARABILITY OF OPERATING RESULTSThe following information is provided to give qualitative and quantitative information related to items impacting comparability of operating results. The company identifies these based on how management views the company’s business; makes financial, operating and planning decisions; and evaluates the company’s ongoing performance. In addition, the company discloses the impact of changes in currency exchange rates on the company’s financial results in order to reflect results on a constant currency basis.
Divestitures, Divestiture-related costs and Gains/(losses) on divestituresDivestitures include completed sales of businesses, exits of major product lines upon completion of a sale or licensing agreement. the partial or full sale of an equity method investment and changes from equity method investment accounting to accounting for marketable securities. As the company records its share of JDE Peet’s ongoing earnings on a one-quarter lag basis, any JDE Peet’s ownership reductions are reflected as divestitures within the company's non-GAAP results the following quarter. Divestiture-related costs, which includes costs incurred in relation to the preparation and completion (including one-time costs such as severance related to elimination of stranded costs) for the company's divestitures as defined above, also includes costs incurred associated with the company's publicly-announced processes to sell businesses.
Acquisitions, Acquisition-related costs and Acquisition integration costs and contingent consideration adjustmentsAcquisition-related costs, which includes transaction costs such as third party advisor, investment banking and legal fees, also includes one-time compensation expense related to the buyout of non-vested employee stock ownership plan shares and realized gains or losses from hedging activities associated with acquisition funds. Acquisition integration costs and contingent consideration adjustments include one-time costs related to the integration of acquisitions as well as any adjustments made to the fair market value of contingent compensation liabilities that have been previously booked for earn-outs related to acquisitions that do not relate to employee compensation expense. The company excludes these items to better facilitate comparisons of its underlying operating performance across periods.
On November 1, 2022, the company acquired 100% of the equity of Grupo Bimbo's confectionery business, Ricolino, located primarily in Mexico. The acquisition of Ricolino builds on our continued prioritization of fast-growing snacking segments in key geographies. The acquisition added incremental net revenues of $171 million and operating income of $9 million during the three months ended March 31, 2023. In addition, the company incurred acquisition integration costs of $6 million in the three months ended March 31, 2023.
On August 1, 2022, the company acquired 100% of the equity of Clif Bar & Company (“Clif Bar”), a leading U.S. maker of nutritious energy bars with organic ingredients. The acquisition expands our global snacks bar business and complements our refrigerated snacking and performance nutrition bar portfolios. The acquisition added incremental net revenues of $218 million and operating income of $35 million during the three months ended March 31, 2023. In addition, the company incurred acquisition integration costs and contingent consideration adjustments of $39 million in the three months ended March 31, 2023. These acquisition integration costs include an increase to the contingent consideration liability due to changes to underlying assumptions.
On January 3, 2022, the company acquired 100% of the equity of Chipita Global S.A. (“Chipita”), a leading croissants and baked snacks company in the Central and Eastern European markets. The acquisition of Chipita offers a strategic complement to the company's existing portfolio and advances its strategy to become the global leader in broader snacking. The company incurred acquisition-related costs of $21 million in the three months ended March 31, 2022. The company also incurred acquisition integration costs of $6 million in the three months ended March 31, 2023, and $35 million in the three months ended March 31, 2022.
Simplify to Grow ProgramThe primary objective of the Simplify to Grow Program is to reduce the company’s operating cost structure in both its supply chain and overhead costs. The program covers severance as well as asset disposals and other manufacturing and procurement-related one-time costs.
Restructuring costsThe company recorded restructuring charges of $30 million in the three months ended March 31, 2023 and $11 million in the three months ended March 31, 2022 This activity was recorded within asset impairment and exit costs and benefit plan non-service income. These charges were for severance and related costs, non-cash asset write-downs (including accelerated depreciation and asset impairments) and other adjustments, including any gains on sale of restructuring program assets.
Implementation costsImplementation costs primarily relate to reorganizing the company’s operations and facilities in connection with its supply chain reinvention program and other identified productivity and cost saving initiatives. The costs include incremental expenses related to the closure of facilities, costs to terminate certain contracts and the simplification of the company’s information systems. The company recorded implementation costs of $5 million in the three months ended March 31, 2023 and $20 million in the three months ended March 31, 2022.
Intangible asset impairment chargesDuring the first quarter of 2022, the company recorded a $78 million intangible asset impairment charge in AMEA related to one local biscuit brand sold in select markets in AMEA and Europe.
Mark-to-market impacts from commodity and currency derivative contractsThe company excludes unrealized gains and losses (mark-to-market impacts) from outstanding commodity and forecasted currency and equity method investment transaction derivative contracts from its non-GAAP earnings measures. The mark-to-market impacts of commodity and forecasted currency transaction derivatives are excluded until such time that the related exposures impact the company's operating results. Since the company purchases commodity and forecasted currency transaction contracts to mitigate price volatility primarily for inventory requirements in future periods, the company makes this adjustment to remove the volatility of these future inventory purchases on current operating results to facilitate comparisons of its underlying operating performance across periods. The company excludes equity method investment derivative contract settlements as they represent protection of value for future divestitures. The company recorded net unrealized gains on commodity, forecasted currency and equity method transaction derivatives of $48 million in the three months March 31, 2023, and $28 million in the three months ended March 31, 2022.
Remeasurement of net monetary positionThe company translates the results of operations of its subsidiaries from multiple currencies using average exchange rates during each period and translate balance sheet accounts using exchange rates at the end of each period. The company records currency translation adjustments as a component of equity (except for highly inflationary currencies) and realized exchange gains and losses on transactions in earnings.
Highly inflationary accounting is triggered when a country’s three-year cumulative inflation rate exceeds 100%. It requires the remeasurement of financial statements of subsidiaries in the country, from the functional currency of the subsidiary to our U.S. dollar reporting currency, with currency remeasurement gains or losses recorded in earnings. At this time, within the company's consolidated entities, Argentina and Türkiye are accounted for as highly inflationary economies. For Argentina, the company recorded remeasurement losses of $11 million in the three months, months ended March 31, 2023 and $5 million in the three months ended March 31, 2022 related to the revaluation of the Argentinean peso denominated net monetary position over these periods. For Türkiye, the company recorded remeasurement loss of $1 million in the three months ended March 31, 2023 related to the revaluation of the Turkish lira denominated net monetary position over these periods. The company recorded these charges for Argentina and Türkiye within selling, general and administrative expenses.
Impact from pension participation changesThe impact from pension participation changes represent the charges incurred when employee groups are withdrawn from multiemployer pension plans and other changes in employee group pension plan participation. The company excludes these charges from its non-GAAP results because those amounts do not reflect the company’s ongoing pension obligations.
On July 11, 2019, the company received an undiscounted withdrawal liability assessment related to the company's completewithdrawal from the Bakery and Confectionery Union and Industry International Pension Fund totaling $526 million and requiring pro-rata monthly payments over 20 years. The company began making monthly payments during the third quarter of 2019. In connection with the discounted long-term liability, the company recorded accreted interest of $3 million in the three months ended March 31, 2023 and $3 million in the three months March 31, 2022 within interest and other expense, net. As of March 31, 2023, the remaining discounted withdrawal liability was $340 million, with $15 million recorded in other current liabilities and $325 million recorded in long-term other liabilities.
Incremental costs due to the war in UkraineIn February 2022, Russia began a military invasion of Ukraine and the company closed its operations and facilities in Ukraine. In March 2022, the company's two Ukrainian manufacturing facilities in Trostyanets and Vyshhorod were significantly damaged. During the first quarter of 2022, the company evaluated and impaired these and other assets. The company recorded $143 million of total expenses ($145 million after-tax) incurred as a direct result of the war. The company reversed $22 million during the remainder of 2022 and $3 million during the first quarter of 2023 of previously recorded charges primarily as a result of higher than expected collection of trade receivables and inventory recoveries. The company continues to make targeted repairs on both our plants and have partially reopened and restarted limited production in both plants.
Loss on debt extinguishment and related expensesOn March 18, 2022, the company completed a tender offer and redeemed long-term U.S. dollar denominated notes totaling $987 million. The company recorded a $129 million loss on debt extinguishment and related expenses within interest and other expense, net, consisting of $38 million paid in excess of carrying value of the debt and from recognizing unamortized discounts and deferred financing costs in earnings and $91 million in unamortized forward starting swap losses in earnings at the time of the debt extinguishment.
Gains and losses on equity method investment transactions and marketable securitiesKeurig Dr Pepper transactionsOn March 2, 2023, the company sold approximately 30 million shares of Keurig Dr Pepper Inc. (Nasdaq: "KDP"), which reduced the company's ownership interest by 2.1%, from 5.3% to 3.2% of the total outstanding shares. The company received approximately $1.0 billion in proceeds and recorded a pre-tax gain of $493 million (or $366 million after tax) on this sale during the first quarter of 2023. This reduction in ownership, to below 5% of the outstanding shares of KDP, resulted in a change of accounting for the company's KDP investment, from equity method investment accounting to accounting for equity interests with readily determinable fair values ("marketable securities") as the company no longer has significant influence over KDP. These marketable securities are measured at fair value based on quoted prices in active markets for identical assets (Level 1). On March 2, 2023, the date the company changed from equity method accounting for this investment, the company recorded unrealized gains for marketable securities of $755 million (or $562 million after tax). The company recorded an additional unrealized gain of $32 million (or $24 million after tax) during the first quarter, for a total unrealized gain of $787 million (or $586 million after tax) during the first quarter of 2023.
Due to the change in accounting for the company's KDP investment, from equity method investment accounting to accounting as marketable securities, the company has treated the historical equity method earnings from both the shares sold and the remaining 3.2% ownership interest as a divestiture under the definitions of our non-GAAP financial measures. Therefore, the company has removed the equity method investment net earnings for KDP from its non-GAAP financial results for all historical periods presented to facilitate comparison of results.
Equity method investee itemsWithin Adjusted EPS, the company’s equity method investment net earnings exclude its proportionate share of its equity method investees’ significant operating and non-operating items, such as acquisition and divestiture-related costs, restructuring program costs and initial impacts from enacted tax law changes.
Constant currencyManagement evaluates the operating performance of the company and its international subsidiaries on a constant currency basis. The company determines its constant currency operating results by dividing or multiplying, as appropriate, the current period local currency operating results by the currency exchange rates used to translate the company’s financial statements in the comparable prior-year period to determine what the current-period U.S. dollar operating results would have been if the currency exchange rate had not changed from the comparable prior-year period.
OUTLOOKThe company’s outlook for 2023 Organic Net Revenue growth, Adjusted EPS growth on a constant currency basis and Free Cash Flow are non-GAAP financial measures that exclude or otherwise adjust for items impacting comparability of financial results such as the impact of changes in currency exchange rates, restructuring activities, acquisitions and divestitures. The company is not able to reconcile its projected Organic Net Revenue growth to its projected reported net revenue growth for the full-year 2023 because the company is unable to predict during this period the impact from potential acquisitions or divestitures, as well as the impact of currency translation due to the unpredictability of future changes in currency exchange rates, which could be material as a significant portion of the company’s operations are outside the U.S. The company is not able to reconcile its projected Adjusted EPS growth on a constant currency basis to its projected reported diluted EPS growth for the full-year 2023 because the company is unable to predict during this period the timing of its restructuring program costs, mark-to-market impacts from commodity and forecasted currency transaction derivative contracts and impacts from potential acquisitions or divestitures as well as the impact of currency translation due to the unpredictability of future changes in currency exchange rates, which could be material as a significant portion of the company’s operations are outside the U.S. The company is not able to reconcile its projected Free Cash Flow to its projected net cash from operating activities for the full-year 2023 because the company is unable to predict during this period the timing and amount of capital expenditures impacting cash flow. Therefore, because of the uncertainty and variability of the nature and amount of future adjustments, which could be significant, the company is unable to provide a reconciliation of these measures without unreasonable effort.
Schedule 4a | |||||||||||||||||||
Mondelēz International, Inc. and Subsidiaries | |||||||||||||||||||
Reconciliation of GAAP to Non-GAAP Measures | |||||||||||||||||||
Net Revenues | |||||||||||||||||||
(in millions of U.S. dollars) | |||||||||||||||||||
(Unaudited) | |||||||||||||||||||
Latin America | AMEA | Europe | North America | Mondelēz International | |||||||||||||||
For the Three Months Ended March 31, 2023 | |||||||||||||||||||
Reported (GAAP) | $ | 1,211 | $ | 1,939 | $ | 3,307 | $ | 2,709 | $ | 9,166 | |||||||||
Acquisitions | (156 | ) | - | - | (218 | ) | (374 | ) | |||||||||||
Currency | 81 | 186 | 183 | 15 | 465 | ||||||||||||||
Organic (Non-GAAP) | $ | 1,136 | $ | 2,125 | $ | 3,490 | $ | 2,506 | $ | 9,257 | |||||||||
For the Three Months Ended March 31, 2022 | |||||||||||||||||||
Reported (GAAP) | $ | 826 | $ | 1,867 | $ | 2,935 | $ | 2,136 | $ | 7,764 | |||||||||
Divestitures | (9 | ) | - | - | - | (9 | ) | ||||||||||||
Organic (Non-GAAP) | $ | 817 | $ | 1,867 | $ | 2,935 | $ | 2,136 | $ | 7,755 | |||||||||
% Change | |||||||||||||||||||
Reported (GAAP) | 46.6 | % | 3.9 | % | 12.7 | % | 26.8 | % | 18.1 | % | |||||||||
Divestitures | 1.6 pp | - pp | - pp | - pp | 0.1 pp | ||||||||||||||
Acquisitions | (19.1 | ) | - | - | (10.2 | ) | (4.8 | ) | |||||||||||
Currency | 9.9 | 9.9 | 6.2 | 0.7 | 6.0 | ||||||||||||||
Organic (Non-GAAP) | 39.0 | % | 13.8 | % | 18.9 | % | 17.3 | % | 19.4 | % | |||||||||
Vol/Mix | 7.4 pp | 5.8 pp | 1.0 pp | 2.3 pp | 3.2 pp | ||||||||||||||
Pricing | 31.6 | 8.0 | 17.9 | 15.0 | 16.2 |
Schedule 4b | |||||||||||
Mondelēz International, Inc. and Subsidiaries | |||||||||||
Reconciliation of GAAP to Non-GAAP Measures | |||||||||||
Net Revenues - Markets | |||||||||||
(in millions of U.S. dollars) | |||||||||||
(Unaudited) | |||||||||||
Emerging Markets | Developed Markets | Mondelēz International | |||||||||
For the Three Months Ended March 31, 2023 | |||||||||||
Reported (GAAP) | $ | 3,598 | $ | 5,568 | $ | 9,166 | |||||
Acquisitions | (156 | ) | (218 | ) | (374 | ) | |||||
Currency | 258 | 207 | 465 | ||||||||
Organic (Non-GAAP) | $ | 3,700 | $ | 5,557 | $ | 9,257 | |||||
For the Three Months Ended March 31, 2022 | |||||||||||
Reported (GAAP) | $ | 2,964 | $ | 4,800 | $ | 7,764 | |||||
Divestitures | (9 | ) | - | (9 | ) | ||||||
Organic (Non-GAAP) | $ | 2,955 | $ | 4,800 | $ | 7,755 | |||||
% Change | |||||||||||
Reported (GAAP) | 21.4 | % | 16.0 | % | 18.1 | % | |||||
Divestitures | 0.4 pp | - pp | 0.1 pp | ||||||||
Acquisitions | (5.3 | ) | (4.5 | ) | (4.8 | ) | |||||
Currency | 8.7 | 4.3 | 6.0 | ||||||||
Organic (Non-GAAP) | 25.2 | % | 15.8 | % | 19.4 | % | |||||
Vol/Mix | 4.5 pp | 2.4 pp | 3.2 pp | ||||||||
Pricing | 20.7 | 13.4 | 16.2 |
Schedule 5 | |||||||||||||||||
Mondelēz International, Inc. and Subsidiaries | |||||||||||||||||
Reconciliation of GAAP to Non-GAAP Measures | |||||||||||||||||
Gross Profit / Operating Income | |||||||||||||||||
(in millions of U.S. dollars) | |||||||||||||||||
(Unaudited) | |||||||||||||||||
For the Three Months Ended March 31, 2023 | |||||||||||||||||
Net Revenues | Gross Profit | Gross Profit Margin | Operating Income | Operating Income Margin | |||||||||||||
Reported (GAAP) | $ | 9,166 | $ | 3,446 | 37.6 | % | $ | 1,505 | 16.4 | % | |||||||
Simplify to Grow Program | - | 1 | 35 | ||||||||||||||
Mark-to-market (gains)/losses from derivatives | - | (49 | ) | (49 | ) | ||||||||||||
Acquisition integration costs and contingent consideration adjustments | - | 3 | 51 | ||||||||||||||
Divestiture-related costs | - | - | 30 | ||||||||||||||
Incremental costs due to war in Ukraine | - | (2 | ) | (3 | ) | ||||||||||||
Remeasurement of net monetary position | - | - | 12 | ||||||||||||||
Adjusted (Non-GAAP) | $ | 9,166 | $ | 3,399 | 37.1 | % | $ | 1,581 | 17.2 | % | |||||||
Currency | 155 | 81 | |||||||||||||||
Adjusted @ Constant FX (Non-GAAP) | $ | 3,554 | $ | 1,662 | |||||||||||||
For the Three Months Ended March 31, 2022 | |||||||||||||||||
Net Revenues | Gross Profit | Gross Profit Margin | Operating Income | Operating Income Margin | |||||||||||||
Reported (GAAP) | $ | 7,764 | $ | 2,983 | 38.4 | % | $ | 1,094 | 14.1 | % | |||||||
Simplify to Grow Program | - | 10 | 31 | ||||||||||||||
Intangible asset impairment charges | - | - | 78 | ||||||||||||||
Mark-to-market (gains)/losses from derivatives | - | (28 | ) | (27 | ) | ||||||||||||
Acquisition integration costs and contingent consideration adjustments | - | - | 32 | ||||||||||||||
Acquisition-related costs | - | - | 21 | ||||||||||||||
Divestiture-related costs | - | 1 | 1 | ||||||||||||||
Operating income from divestiture | (9 | ) | (3 | ) | (1 | ) | |||||||||||
Incremental costs due to war in Ukraine | - | 44 | 143 | ||||||||||||||
Remeasurement of net monetary position | - | - | 5 | ||||||||||||||
Adjusted (Non-GAAP) | $ | 7,755 | $ | 3,007 | 38.8 | % | $ | 1,377 | 17.8 | % | |||||||
Gross Profit | Operating Income | ||||||||||||||||
$ Change - Reported (GAAP) | $ | 463 | $ | 411 | |||||||||||||
$ Change - Adjusted (Non-GAAP) | 392 | 204 | |||||||||||||||
$ Change - Adjusted @ Constant FX (Non-GAAP) | 547 | 285 | |||||||||||||||
% Change - Reported (GAAP) | 15.5 | % | 37.6 | % | |||||||||||||
% Change - Adjusted (Non-GAAP) | 13.0 | % | 14.8 | % | |||||||||||||
% Change - Adjusted @ Constant FX (Non-GAAP) | 18.2 | % | 20.7 | % | |||||||||||||
Schedule 6 | |||||||||||||||||||||||||||||||||||||||||||||
Mondelēz International, Inc. and Subsidiaries | |||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of GAAP to Non-GAAP Measures | |||||||||||||||||||||||||||||||||||||||||||||
Net Earnings and Tax Rate | |||||||||||||||||||||||||||||||||||||||||||||
(in millions of U.S. dollars and shares, except per share data) | |||||||||||||||||||||||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||||||||||||||||||||||
For the Three Months Ended March 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||
Operating Income | Benefit plan non-service expense / (income) | Interest and other expense, net | Marketable securities (gains)/losses | Earnings before income taxes | Income taxes (1) | Effective tax rate | Gain on equity method investment transactions | Equity method investment net losses / (earnings) | Non-controlling interest earnings | Net Earnings attributable to Mondelēz International | Diluted EPS attributable to Mondelēz International | ||||||||||||||||||||||||||||||||||
Reported (GAAP) | $ | 1,505 | $ | (19 | ) | $ | 95 | $ | (796 | ) | $ | 2,225 | $ | 658 | 29.6 | % | $ | (487 | ) | $ | (35 | ) | $ | 8 | $ | 2,081 | $ | 1.52 | |||||||||||||||||
Simplify to Grow Program | 35 | - | - | - | 35 | 6 | - | - | - | 29 | 0.02 | ||||||||||||||||||||||||||||||||||
Mark-to-market (gains)/losses from derivatives | (49 | ) | - | (3 | ) | - | (46 | ) | (8 | ) | 2 | - | - | (40 | ) | (0.03 | ) | ||||||||||||||||||||||||||||
Acquisition integration costs and contingent consideration adjustments | 51 | - | - | - | 51 | 13 | - | - | - | 38 | 0.03 | ||||||||||||||||||||||||||||||||||
Divestiture-related costs | 30 | - | - | - | 30 | 4 | - | - | - | 26 | 0.02 | ||||||||||||||||||||||||||||||||||
Net earnings from divestitures | - | - | - | - | - | (4 | ) | - | 24 | - | (20 | ) | (0.02 | ) | |||||||||||||||||||||||||||||||
Incremental costs due to war in Ukraine | (3 | ) | - | - | - | (3 | ) | - | - | - | - | (3 | ) | - | |||||||||||||||||||||||||||||||
Remeasurement of net monetary position | 12 | - | - | - | 12 | - | - | - | - | 12 | 0.01 | ||||||||||||||||||||||||||||||||||
Impact from pension participation changes | - | - | (3 | ) | - | 3 | 1 | - | - | - | 2 | - | |||||||||||||||||||||||||||||||||
Gain on marketable securities | - | - | - | 787 | (787 | ) | (201 | ) | - | - | - | (586 | ) | (0.43 | ) | ||||||||||||||||||||||||||||||
Gain on equity method investment transactions | - | - | - | - | - | (125 | ) | 485 | - | - | (360 | ) | (0.26 | ) | |||||||||||||||||||||||||||||||
Equity method investee items | - | - | - | - | - | - | - | (48 | ) | - | 48 | 0.03 | |||||||||||||||||||||||||||||||||
Adjusted (Non-GAAP) | $ | 1,581 | $ | (19 | ) | $ | 89 | $ | (9 | ) | $ | 1,520 | $ | 344 | 22.6 | % | $ | - | $ | (59 | ) | $ | 8 | $ | 1,227 | $ | 0.89 | ||||||||||||||||||
Currency | 81 | 0.06 | |||||||||||||||||||||||||||||||||||||||||||
Adjusted @ Constant FX (Non-GAAP) | $ | 1,308 | $ | 0.95 | |||||||||||||||||||||||||||||||||||||||||
Diluted Average Shares Outstanding | 1,373 | ||||||||||||||||||||||||||||||||||||||||||||
For the Three Months Ended March 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||
Operating Income | Benefit plan non-service expense / (income) | Interest and other expense, net | Marketable securities (gains)/losses | Earnings before income taxes | Income taxes (1) | Effective tax rate | Loss on equity method investment transactions | Equity method investment net losses / (earnings) | Non-controlling interest earnings | Net Earnings attributable to Mondelēz International | Diluted EPS attributable to Mondelēz International | ||||||||||||||||||||||||||||||||||
Reported (GAAP) | $ | 1,094 | $ | (33 | ) | $ | 168 | $ | - | $ | 959 | $ | 210 | 21.9 | % | $ | 5 | $ | (117 | ) | $ | 6 | $ | 855 | $ | 0.61 | |||||||||||||||||||
Simplify to Grow Program | 31 | - | - | - | 31 | 7 | - | - | - | 24 | 0.02 | ||||||||||||||||||||||||||||||||||
Intangible asset impairment charges | 78 | - | - | - | 78 | 19 | - | - | - | 59 | 0.04 | ||||||||||||||||||||||||||||||||||
Mark-to-market (gains)/losses from derivatives | (27 | ) | - | 1 | - | (28 | ) | 5 | - | - | - | (33 | ) | (0.02 | ) | ||||||||||||||||||||||||||||||
Acquisition integration costs and contingent consideration adjustments | 32 | - | (3 | ) | - | 35 | 50 | - | - | - | (15 | ) | (0.01 | ) | |||||||||||||||||||||||||||||||
Acquisition-related costs | 21 | - | - | - | 21 | 1 | - | - | - | 20 | 0.02 | ||||||||||||||||||||||||||||||||||
Divestiture-related costs | 1 | - | - | - | 1 | - | - | - | - | 1 | - | ||||||||||||||||||||||||||||||||||
Net earnings from divestitures | (1 | ) | - | - | - | (1 | ) | (10 | ) | - | 53 | - | (44 | ) | (0.03 | ) | |||||||||||||||||||||||||||||
Incremental costs due to war in Ukraine | 143 | - | - | - | 143 | (2 | ) | - | - | - | 145 | 0.11 | |||||||||||||||||||||||||||||||||
Remeasurement of net monetary position | 5 | - | - | - | 5 | - | - | - | - | 5 | - | ||||||||||||||||||||||||||||||||||
Impact from pension participation changes | - | - | (3 | ) | - | 3 | 1 | - | - | - | 2 | - | |||||||||||||||||||||||||||||||||
Loss on debt extinguishment and related expenses | - | - | (129 | ) | - | 129 | 31 | - | - | - | 98 | 0.07 | |||||||||||||||||||||||||||||||||
Loss on equity method investment transactions | - | - | - | - | - | - | (5 | ) | - | - | 5 | - | |||||||||||||||||||||||||||||||||
Equity method investee items | - | - | - | - | - | - | - | (10 | ) | - | 10 | - | |||||||||||||||||||||||||||||||||
Adjusted (Non-GAAP) | $ | 1,377 | $ | (33 | ) | $ | 34 | $ | - | $ | 1,376 | $ | 312 | 22.7 | % | $ | - | $ | (74 | ) | $ | 6 | $ | 1,132 | $ | 0.81 | |||||||||||||||||||
Diluted Average Shares Outstanding | 1,398 | ||||||||||||||||||||||||||||||||||||||||||||
(1) Taxes were computed for each of the items excluded from the company’s GAAP results based on the facts and tax assumptions associated with each item. |
Schedule 7 | ||||||||||||||
Mondelēz International, Inc. and Subsidiaries | ||||||||||||||
Reconciliation of GAAP to Non-GAAP Measures | ||||||||||||||
Diluted EPS | ||||||||||||||
(Unaudited) | ||||||||||||||
For the Three Months Ended March 31, | ||||||||||||||
2023 | 2022 | $ Change | % Change | |||||||||||
Diluted EPS attributable to Mondelēz International (GAAP) | $ | 1.52 | $ | 0.61 | $ | 0.91 | 149.2 | % | ||||||
Simplify to Grow Program | 0.02 | 0.02 | - | |||||||||||
Intangible asset impairment charges | - | 0.04 | (0.04 | ) | ||||||||||
Mark-to-market (gains)/losses from derivatives | (0.03 | ) | (0.02 | ) | (0.01 | ) | ||||||||
Acquisition integration costs and contingent consideration adjustments | 0.03 | (0.01 | ) | 0.04 | ||||||||||
Acquisition-related costs | - | 0.02 | (0.02 | ) | ||||||||||
Divestiture-related costs | 0.02 | - | 0.02 | |||||||||||
Net earnings from divestitures | (0.02 | ) | (0.03 | ) | 0.01 | |||||||||
Incremental costs due to war in Ukraine | - | 0.11 | (0.11 | ) | ||||||||||
Remeasurement of net monetary position | 0.01 | - | 0.01 | |||||||||||
Loss on debt extinguishment and related expenses | - | 0.07 | (0.07 | ) | ||||||||||
Gain on marketable securities | (0.43 | ) | - | (0.43 | ) | |||||||||
Gain on equity method investment transactions | (0.26 | ) | - | (0.26 | ) | |||||||||
Equity method investee items | 0.03 | - | 0.03 | |||||||||||
Adjusted EPS (Non-GAAP) | $ | 0.89 | $ | 0.81 | $ | 0.08 | 9.9 | % | ||||||
Impact of unfavorable currency | 0.06 | - | 0.06 | |||||||||||
Adjusted EPS @ Constant FX (Non-GAAP) | $ | 0.95 | $ | 0.81 | $ | 0.14 | 17.3 | % | ||||||
Adjusted EPS @ Constant FX - Key Drivers | ||||||||||||||
Increase in operations | $ | 0.13 | ||||||||||||
Impact from acquisitions | 0.02 | |||||||||||||
Change in benefit plan non-service income | (0.01 | ) | ||||||||||||
Change in interest and other expense, net | (0.03 | ) | ||||||||||||
Dividend income from marketable securities | 0.01 | |||||||||||||
Change in equity method investment net earnings | (0.01 | ) | ||||||||||||
Change in income taxes | 0.01 | |||||||||||||
Change in shares outstanding | 0.02 | |||||||||||||
$ | 0.14 | |||||||||||||
Schedule 8 | |||||||||||||||||||||||||||||||||||
Mondelēz International, Inc. and Subsidiaries | |||||||||||||||||||||||||||||||||||
Reconciliation of GAAP to Non-GAAP Measures | |||||||||||||||||||||||||||||||||||
Segment Data | |||||||||||||||||||||||||||||||||||
(in millions of U.S. dollars) | |||||||||||||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||||||||||||
For the Three Months Ended March 31, 2023 | |||||||||||||||||||||||||||||||||||
Latin America | AMEA | Europe | North America | Unrealized G/(L) on Hedging Activities | General Corporate Expenses | Amortization of Intangibles | Other Items | Mondelēz International | |||||||||||||||||||||||||||
Net Revenue | |||||||||||||||||||||||||||||||||||
Reported (GAAP) | $ | 1,211 | $ | 1,939 | $ | 3,307 | $ | 2,709 | $ | - | $ | - | $ | - | $ | - | $ | 9,166 | |||||||||||||||||
Divestitures | - | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||
Adjusted (Non-GAAP) | $ | 1,211 | $ | 1,939 | $ | 3,307 | $ | 2,709 | $ | - | $ | - | $ | - | $ | - | $ | 9,166 | |||||||||||||||||
Operating Income | |||||||||||||||||||||||||||||||||||
Reported (GAAP) | $ | 139 | $ | 360 | $ | 507 | $ | 566 | $ | 49 | $ | (77 | ) | $ | (39 | ) | $ | - | $ | 1,505 | |||||||||||||||
Simplify to Grow Program | - | 1 | 30 | (1 | ) | - | 5 | - | - | 35 | |||||||||||||||||||||||||
Mark-to-market (gains)/losses from derivatives | - | - | - | - | (49 | ) | - | - | - | (49 | ) | ||||||||||||||||||||||||
Acquisition integration costs and contingent consideration adjustments | 6 | - | 6 | 38 | - | 1 | - | - | 51 | ||||||||||||||||||||||||||
Divestiture-related costs | - | - | 26 | 3 | - | 1 | - | - | 30 | ||||||||||||||||||||||||||
Incremental costs due to war in Ukraine | - | - | (3 | ) | - | - | - | - | - | (3 | ) | ||||||||||||||||||||||||
Remeasurement of net monetary position | 11 | - | 1 | - | - | - | - | - | 12 | ||||||||||||||||||||||||||
Adjusted (Non-GAAP) | $ | 156 | $ | 361 | $ | 567 | $ | 606 | $ | - | $ | (70 | ) | $ | (39 | ) | $ | - | $ | 1,581 | |||||||||||||||
Currency | 3 | 47 | 32 | 3 | - | (4 | ) | - | - | 81 | |||||||||||||||||||||||||
Adjusted @ Constant FX (Non-GAAP) | $ | 159 | $ | 408 | $ | 599 | $ | 609 | $ | - | $ | (74 | ) | $ | (39 | ) | $ | - | $ | 1,662 | |||||||||||||||
$ Change - Reported (GAAP) | $ | 36 | $ | 88 | $ | 130 | $ | 148 | n/m | $ | (27 | ) | $ | (7 | ) | n/m | $ | 411 | |||||||||||||||||
$ Change - Adjusted (Non-GAAP) | 48 | 8 | 8 | 173 | n/m | (26 | ) | (7 | ) | n/m | 204 | ||||||||||||||||||||||||
$ Change - Adjusted @ Constant FX (Non-GAAP) | 51 | 55 | 40 | 176 | n/m | (30 | ) | (7 | ) | n/m | 285 | ||||||||||||||||||||||||
% Change - Reported (GAAP) | 35.0 | % | 32.4 | % | 34.5 | % | 35.4 | % | n/m | (54.0 | )% | (21.9 | )% | n/m | 37.6 | % | |||||||||||||||||||
% Change - Adjusted (Non-GAAP) | 44.4 | % | 2.3 | % | 1.4 | % | 40.0 | % | n/m | (59.1 | )% | (21.9 | )% | n/m | 14.8 | % | |||||||||||||||||||
% Change - Adjusted @ Constant FX (Non-GAAP) | 47.2 | % | 15.6 | % | 7.2 | % | 40.6 | % | n/m | (68.2 | )% | (21.9 | )% | n/m | 20.7 | % | |||||||||||||||||||
Operating Income Margin | |||||||||||||||||||||||||||||||||||
Reported % | 11.5 | % | 18.6 | % | 15.3 | % | 20.9 | % | 16.4 | % | |||||||||||||||||||||||||
Reported pp change | (1.0)pp | 4.0 pp | 2.5 pp | 1.3 pp | 2.3 pp | ||||||||||||||||||||||||||||||
Adjusted % | 12.9 | % | 18.6 | % | 17.1 | % | 22.4 | % | 17.2 | % | |||||||||||||||||||||||||
Adjusted pp change | (0.3)pp | (0.3)pp | (1.9)pp | 2.1 pp | (0.6)pp | ||||||||||||||||||||||||||||||
For the Three Months Ended March 31, 2022 | |||||||||||||||||||||||||||||||||||
Latin America | AMEA | Europe | North America | Unrealized G/(L) on Hedging Activities | General Corporate Expenses | Amortization of Intangibles | Other Items | Mondelēz International | |||||||||||||||||||||||||||
Net Revenue | |||||||||||||||||||||||||||||||||||
Reported (GAAP) | $ | 826 | $ | 1,867 | $ | 2,935 | $ | 2,136 | $ | - | $ | - | $ | - | $ | - | $ | 7,764 | |||||||||||||||||
Divestitures | (9 | ) | - | - | - | - | - | - | - | (9 | ) | ||||||||||||||||||||||||
Adjusted (Non-GAAP) | $ | 817 | $ | 1,867 | $ | 2,935 | $ | 2,136 | $ | - | $ | - | $ | - | $ | - | $ | 7,755 | |||||||||||||||||
Operating Income | |||||||||||||||||||||||||||||||||||
Reported (GAAP) | $ | 103 | $ | 272 | $ | 377 | $ | 418 | $ | 27 | $ | (50 | ) | $ | (32 | ) | $ | (21 | ) | $ | 1,094 | ||||||||||||||
Simplify to Grow Program | - | 3 | 7 | 15 | - | 6 | - | - | 31 | ||||||||||||||||||||||||||
Intangible asset impairment charges | - | 78 | - | - | - | - | - | - | 78 | ||||||||||||||||||||||||||
Mark-to-market (gains)/losses from derivatives | - | - | - | - | (27 | ) | - | - | - | (27 | ) | ||||||||||||||||||||||||
Acquisition integration costs and contingent consideration adjustments | - | - | 32 | - | - | - | - | - | 32 | ||||||||||||||||||||||||||
Acquisition-related costs | - | - | - | - | - | - | - | 21 | 21 | ||||||||||||||||||||||||||
Divestiture-related costs | 1 | - | - | - | - | - | - | - | 1 | ||||||||||||||||||||||||||
Operating income from divestitures | (1 | ) | - | - | - | - | - | - | - | (1 | ) | ||||||||||||||||||||||||
Incremental costs due to war in Ukraine | - | - | 143 | - | - | - | - | - | 143 | ||||||||||||||||||||||||||
Remeasurement of net monetary position | 5 | - | - | - | - | - | - | - | 5 | ||||||||||||||||||||||||||
Adjusted (Non-GAAP) | $ | 108 | $ | 353 | $ | 559 | $ | 433 | $ | - | $ | (44 | ) | $ | (32 | ) | $ | - | $ | 1,377 | |||||||||||||||
Operating Income Margin | |||||||||||||||||||||||||||||||||||
Reported % | 12.5 | % | 14.6 | % | 12.8 | % | 19.6 | % | 14.1 | % | |||||||||||||||||||||||||
Adjusted % | 13.2 | % | 18.9 | % | 19.0 | % | 20.3 | % | 17.8 | % |
Schedule 9 | |||||||||||
Mondelēz International, Inc. and Subsidiaries | |||||||||||
Reconciliation of GAAP to Non-GAAP Measures | |||||||||||
Net Cash Provided by Operating Activities to Free Cash Flow | |||||||||||
(in millions of U.S. dollars) | |||||||||||
(Unaudited) | |||||||||||
For the Three Months | |||||||||||
Ended March 31, | |||||||||||
2023 | 2022 | $ Change | |||||||||
Net Cash Provided by Operating Activities (GAAP) | $ | 1,123 | $ | 1,131 | $ | (8 | ) | ||||
Capital Expenditures | (223 | ) | (167 | ) | (56 | ) | |||||
Free Cash Flow (Non-GAAP) | $ | 900 | $ | 964 | $ | (64 | ) | ||||
Contacts: | Tracey Noe (Media) | Shep Dunlap (Investors) | ||||
1-847-943-5678 | 1-847-943-5454 | |||||
news@mdlz.com | ir@mdlz.com |