The FINANCIAL — At the Consumer Analyst Group of New York (CAGNY) conference on February 16, executives of Mondelēz International detailed the company’s strategy to deliver top-tier returns to shareholders.
“I’m proud of our progress over the past couple of years and confident that over the long term, we have the strategy and portfolio to deliver best-in-class growth and margin improvement, while also returning significant cash to our shareholders,” said Irene Rosenfeld, Chairman and CEO.
Rosenfeld highlighted the company’s value-creation algorithm, which is built on two key pillars — growth and margin expansion. “By building our Power Brands, driving innovation platforms and expanding our distribution capabilities, we’re able to leverage our advantaged platform to grow revenue at or above the rates of our categories. At the same time, we’ll focus on expanding margins and delivering strong EPS growth by continuing to reduce our supply chain and overhead costs.”
Mondelēz International’s 2016 framework builds on its strong year-end momentum. Specifically, the company will price to protect gross margin and offset inflation, distort investments to its higher-growth, higher-margin Power Brands and enhance revenue mix by eliminating low-margin SKUs and optimizing trade spending.
In addition, the company’s 2016 outlook reflects the current challenging external conditions, which feature slower economic and snacks category growth, as well as a volatile commodity-cost and currency environment.
During today’s presentation, the company provided an estimate for 2016 Free Cash Flow1 excluding items of $1.4 billion. In addition, the company affirmed other elements of its 2016 outlook, including:
2016 Organic Net Revenue1 growth of at least 2 percent
2016 Adjusted Operating Income1 margin of 15 to 16 percent
2018 Adjusted Operating Income1 margin of 17 to 18 percent
2016 Double-digit Adjusted EPS1 growth at constant currency