Upcoming AWS Coverage on Hershey Co. Post-Earnings Results

LONDON, UK / ACCESSWIRE / February 24, 2017 / Active Wall St. announces its post-earnings coverage on Mondelez International, Inc. (NASDAQ: MDLZ). The Company posted its financial results for the fourth and full year fiscal 2016 (FY16) on February 07, 2017. The world's second-largest confectionary Company reported a marginal increase in its top-line which was impacted by the India's demonetization and a strong US Dollar. Register with us now for your free membership at:

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One of Mondelez International's competitors within the Confectioners space, The Hershey Co. (NYSE: HSY), reported on February 03, 2017, its Q4 ended December 31, 2016, financial results. AWS will be initiating a research report on Hershey in the coming days.

Today, AWS is promoting its earnings coverage on MDLZ; touching on HSY. Get our free coverage by signing up to:

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Earnings Reviewed

For the three months ended December 31, 2016, Mondelez reported net revenue of $6.77 billion, down 8.1% from revenue of $7.36 billion in Q4 2015, driven by the Venezuela deconsolidation and currency headwinds. Mondelez' organic net revenue increased 0.6%, tempered by a negative impact of 60 basis points from. The Company's revenue numbers came in below market estimates of $6.90 billion. Mondelez' FY16 net revenues totaled $25.92 billion, down 12.5% on a y-o-y basis.

For Q4 2016, Mondelez's gross profit margin was 38.2%, down 30 basis points as compared to the year ago period gross margin of 38.5, driven primarily by the net negative change in mark-to-market impacts from commodity and currency derivative contracts, and partially offset by the impact from the prior year's Venezuela deconsolidation. For FY16, gross profit margin was 39.1%, an increase of 30 basis points on a y-o-y basis. For Q4 2016, Mondelez's operating income margin was 7.5%, up 15.1%, reflecting the prior year's Venezuela deconsolidation loss. Adjusted operating income margin expanded 110 basis points to 14.4%.

For Q4 2016, met income attributable to Mondelez was $93 million, or $0.06 per share, compared to a loss of $729 million, or $0.45 per share, a year earlier. Diluted EPS was $0.06, up 113%, driven by the impact from the prior year's loss on the Venezuela deconsolidation. The Company's adjusted EPS was $0.47 and grew 12% on a constant-currency basis, driven primarily by operating gains. The Company's adjusted earnings missed analysts' consensus of $0.49 per share.

Revenue Details

In North America, Mondelez generated revenue of $1.81 billion, down 0.6% on a y-o-y basis. The region delivered FY16 adjusted Operating income (OI) margin expansion of 190 basis points, primarily driven by continued overhead reductions and strong net productivity.

Mondelez' s European region delivered strong margin growth for FY16, with adjusted OI margin up 220 basis points to 18.3%, primarily driven by productivity and lower overheads. Europe's organic net revenue continued to be positive, up 0.7% for both FY16 and Q4 2016 with $9.76 billion and $1.81 respectively, primarily driven by volume mix.

In EMEA, Mondelez' FY16 adjusted OI margins grew 230 basis points to 12.1%, driven by reduced overheads and solid productivity. Organic revenue increased 0.5% for the year, with growth in Australia, China, and Southeast Asia. The Company's Q4 2016 organic revenue declined 1.2% to $1.41 billion, including the impact from India's demonetization, which was an approximate $40 million headwind across all categories.

In Latin America, the Company's adjusted OI margin increased 220 basis points to approximately 13% for FY16, primarily driven by lower overheads, including VAT-related settlements, as well as targeted pullbacks in A&C. Latin America's organic net revenue increased approximately 5% for FY16 at $3.40 billion.

Mondelez's Chocolate product category grew 2%, driven by solid results in Germany, the UK, and Australia. The Company stated that approximately 60% of its Chocolate revenue grew or held share. For FY16, Mondelez's Gum and Candy category was slightly negative. Solid performance in Mexico Gum and US Candy were among the highlights. The Company stated that about half of its revenue in this category gained or held share.

Balance Sheet & Cash Flow

During Q4 2016, Mondelez repurchased more than $800 million of its common stock and paid approximately $300 million in cash dividends. The Company returned $3.7 billion of capital to shareholders through share repurchases and dividends in FY16, representing more than 220% of its net earnings. Mondelez generated approximately $1.6 billion of free cash flow in FY16, which exceeded its outlook.

On February 03, 2017, Mondelez's Board of Directors declared a regular quarterly dividend of $0.19 per share of Class A common stock. This dividend is payable on April 13, 2017, to shareholders of record as of March 31, 2017.

2014-2018 Restructuring Program

On May 06, 2014, Mondelez's Board of Directors approved a $3.5 billion restructuring program, comprised of approximately $2.5 billion in cash costs and $1 billion in non-cash costs, and up to $2.2 billion of capital expenditures. On August 31, 2016, the Company's Board of Directors approved a reallocation within the program of $600 million of previously approved capital expenditures to be spent on restructuring program cash costs, resulting in $3.1 billion of cash costs to be expensed and up to $1.6 billion of capital expenditures. The primary objective of the 2014-2018 Restructuring Program is to reduce the Company's operating cost structure in both supply chain and overhead costs. Since inception, the Company has incurred total restructuring and related implementation charges of $2.5 billion related to the 2014-2018 Restructuring Program. Mondelez has incurred the majority of the program's charges through 2016 and expects to complete the program by year-end 2018.

Outlook

For FY17, Mondelez expects organic net revenue to increase at least 1% and adjusted operating income margin in the mid-16% range. The Company also expects double-digit adjusted EPS growth on a constant-currency basis. The Company remains committed to its 2018 adjusted operating income margin target of 17% to 18%.

Stock Performance

At the closing bell, on Thursday, February 23, 2017, Mondelez International's stock rose slightly by 0.54%, ending the trading session at $44.89. A total volume of 6.27 million shares were traded at the end of the day. In the last six months and previous twelve months, shares of the Company have advanced 4.79% and 12.03%, respectively. Moreover, the stock gained 1.26% since the start of the year. The Company's shares are trading at a PE ratio of 42.59 and have a dividend yield of 1.69%.

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