Power Brands Boost Profits for Mondelēz International

Mondelēz International has reported its third quarter 2017 results, showing important growth in many sectors driven by “power brands” like Oreo, Milka, Cadbury and Trident Gum.

“We’re pleased with our improving revenue growth, driven by the strength of our Power Brands, continued momentum in emerging markets and Europe,” said Irene Rosenfeld, Chairman and CEO. “We posted another quarter of strong expansion in operating income margin and earnings. We’re making good progress on many of our key strategic initiatives and remain confident in our ability to deliver long-term, sustainable growth on both the top and bottom lines.”

Mondelēz International presented that its net revenues increased by 2.1%, driven by organic net revenue growth and currency tailwinds. Organic net revenue increased by 2.8%, driven by the continued strength of “power brands” as well as strong performance in Europe and emerging markets. The company has also realized an estimated net positive impact of 60 basis points from delayed shipments that moved to the third quarter as the company recovered from a malware incident.

Gross profit margin was 39.1 %, an increase of 20 basis points, driven primarily by lower Restructuring Program implementation costs and favorable mark-to-market comparisons, partially offset by malware-related expenses. Adjusted gross profit margin was 39.5 %, a decrease of 60 basis points, driven by higher input costs and select trade investments in some key markets, partially offset by continued net productivity gains.

Operating income margin was 18.1%, up 710 basis points, driven primarily by the gain on divestiture, the benefit from resolution of a Brazilian indirect tax matter and lower restructuring program costs. Adjusted operating income margin increased 130 basis points to 16.9 %, due primarily to lower overhead costs driven by continued cost reduction efforts.

As an outlook for 2017, the company now expects organic net revenue growth to be approximately 1% given the larger than expected impact from the malware incident.