EX-99.2 3 d37217dex992.htm EX-99.2

Barclays Global Consumer Staples Conference September 10, 2015 Exhibit 99.2

Brian Gladden EVP and Chief Financial Officer

Forward-looking statements 3 This presentation contains a number of forward-looking statements. Words, and variations of words, such as “will,” “expect,” “intend,” “believe,” “estimate,” “anticipate,” “plan,” “deliver,” “drive,” “prospect,” “potential,” “opportunity,” “target,” “outlook” and similar expressions are intended to identify our forward-looking statements, including, but not limited to, statements about: our future performance, including our future revenue growth, earnings per share, operating income, margins and cash flow; our supply chain transformation; overheads and overhead cost reduction initiatives; productivity; shared services capability; our investments and the results of those investments; A&C spending; market growth and changing consumption patterns; innovation; opportunities for growth in our portfolio; our well-being portfolio and goals; growth in and revenues from e-commerce; execution of our strategy; prospects for the coffee transaction and acquisitions; share repurchases; shareholder returns; and our Outlook, including 2015 Organic Net Revenue growth and 2015 and 2016 Adjusted Operating Income margin. These forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond our control, which could cause our actual results to differ materially from those indicated in our forward-looking statements. Such factors include, but are not limited to, risks from operating globally and in emerging markets; changes in currency exchange rates, controls and restrictions; continued volatility of commodity and other input costs; weakness in economic conditions; weakness in consumer spending or demand; changes in consumer preferences; pricing actions; unanticipated disruptions to our business; competition; our global workforce; the restructuring program and our other transformation initiatives not yielding the anticipated benefits; changes in the assumptions on which the restructuring program is based; and tax law changes. Please also see our risk factors, as they may be amended from time to time, set forth in our filings with the SEC, including our most recently filed Annual Report on Form 10-K. Mondel z International disclaims and does not undertake any obligation to update or revise any forward-looking statement in this presentation, except as required by applicable law or regulation.

Strategies driving transformation agenda 4 Reduce Costs Supply Chain Reinvention Lower Overheads Margin Expansion & Investment Fuel Invest for Growth Step-Up A&C Investments Fill In Consumer Spaces Sustainable Growth Over the Long Term Focus Portfolio Coffee Transaction Bolt-On Acquisitions ~85% of Revenue from Snacks

Driving sustainable top- and bottom-line growth to deliver top-tier shareholder returns 5 Gain / hold market share Allocate resources to highest return opportunities Accelerate expansion of Power Brands & innovation platforms across key markets Expand into White Spaces Invest in Power Brands, innovation platforms, sales capabilities and routes to market Leverage operating model to drive speed & scale Leverage consumer and customer insights Deliver strong net productivity Produce Power Brands on advantaged assets Build best-in-class manufacturing footprint Leverage Zero-Based Budgeting tools Migrate toward shared services Simplify organization model Top-Tier Shareholder Returns Drive Revenue Growth Expand Gross Margin Reduce Overheads Invest for Growth

Long-term targets unchanged 6 Long-Term Targets Adjusted EPS Growth: Double Digit 1 Organic Net Revenue Growth: At or Above Category Growth Adjusted Operating Income Growth: High Single Digit 1 1. Constant currency.

Strong total shareholder returns Source: FactSet 1. Effective date of the spin-off of the North America grocery business. 2. S&P 500 Consumer Stapes Sector Index. 7 -2.1% -0.8% 17.5% S&P 500 MDLZ S&P 500 Consumer Staples 2 YTD August 31, 2015 46.4% 41.7% 59.5% S&P 500 S&P 500 Consumer Staples 2 MDLZ Since Oct. 1, 2012 1

Returned $9.7 billion since the spin 8 2.7 4.6 6.8 0.5 1.5 2.4 2.9 2012 2013 2014 YTD June 2015 $0.5 $4.2 $7.0 $9.7 Cumulative Cash Returned to Shareholders ($ billions) 1 1. Since October 1, 2012, the effective date of the spin-off of North American grocery business. Cash dividends Share repurchases $6.9B share buyback authorization remaining through 2018

Reaffirming 2015 growth outlook 9 1. Global category growth based on available Nielsen Global Data through June 2015 for measured channels in key markets where the company competes. The company has adjusted the global category growth calculation to reflect current rather than average H1 2014 currency rates for the hyperinflationary markets of Venezuela and Argentina in order to better represent underlying category growth for the total portfolio. Absent the adjustment in the calculation, for H1 2015 global category growth would have been 4.8% for Total Snacks. Snacks categories include the combined biscuits, chocolate, gum and candy categories. 2. Pro forma adjusted items include the coffee business transaction. See Form 8-K dated July 30, 2015, and GAAP to Non-GAAP reconciliations at the end of this presentation. PF 2014 2 PF 2015E 2 3%+ Organic Net Revenue Growth $30.5B Snacks Categories Growth 1 2014 H1 2015 3.9% 4.5%

Reaffirming margin targets 10 Adjusted Operating Income Margin 1. Pro forma adjusted items include: (a) coffee business transaction and (b) reclassification of joint venture equity earnings from operating income to equity method investment earnings. See Form 8-K dated July 30, 2015 and the GAAP to Non-GAAP reconciliations at the end of this presentation. 2. Excludes stranded cost impact of (20) to (30) basis points. 12.0% PF 2013 PF 2014 PF 2015E 2016E 11.0% 1 1 1 ~14% 2 15%-16% Beyond 2016, opportunity to drive continued margin expansion and fund growth

Delivering world-class productivity levels 1.8% 2.5% 2.8% 2012 2013 2014 2015E-2018E 11 Note: Net productivity levels for 2011 through H1 2015 include results from the company’s global coffee business that was combined with D.E Master Blenders 1753 on July 2, 2015, to create Jacobs Douwe Egberts. 3%+ 3.2% in H1 2015 Net Productivity as Percent of Cost of Goods Sold

Building a best-in-class plant footprint Closed / Sold Streamlined Greenfields / Brownfields Completed 19 31 1 JDE 12 - - In Process - 16 13 Total 31 47 14 12 Manufacturing Network Transformation Activities January 2012 to August 2015

~40 “Lines of the Future” by year-end 13 Biscuits Chocolate Gum Powdered Beverages 17 5 2 2 ~40 on-stream by year-end 2015 Lines On-Stream 1 Locations 26 1. As of August 31, 2015.

30%+ cost savings / ton 2x output of current North American assets 20%+ cost savings / ton Flexibility to produce wide range of package sizes 20%+ cost savings / ton Significantly reduced manufacturing time Lines of the Future driving savings 14

Significantly reducing overhead costs Overheads as % of Net Revenue PF 2013 2016E Identify and capture sustainable cost reductions with zero-based budgeting approach (ZBB) Three key initiatives: Indirect costs People costs and organizational model Shared services Further reductions targeted beyond 2016 Savings driving margin improvement and fueling growth investments 15

Indirect cost progress ahead of plans & increasing/accelerating targets Cost Package 2015 Status Targeted Reduction Update 1. Travel + 50%+ Accelerate progress & reset targets 2. Facilities 50%+ Expanded scope & reset targets 3. Contractors & Consultants + 70%+ Hit ‘18 target in ‘15 … reset target 4. Perquisite Vehicles 40% On track … reset policies 5. Company Vehicles + 40% Consolidated program & 1 vendor 6. Business Events + 50%+ Accelerate progress & reset targets 7. Legal Services 30% On track … targeting best-in-class level 8. Financial Services 30% On track … targeting best-in-class level 9. Information Systems + 40% Exceeding ’15 targets … accelerate 10. Learning & Development + 30% Exceeding ‘15 targets … accelerate 11. Sales Support tbd tbd New package … set targets for ’16 12. Marketing Support tbd tbd New package … set targets for ‘16 16

Global Shared Services – driving process effectiveness and scale benefits Finance 40%+ of activities in scope ~50% average cost savings for in-scope ~150 separate process migrations over 3 years 17 FP&A, accounting, overhead management and supply chain finance ~50% Function % Activities in Scope Selected Key Activities Human Resources Payroll and HR administrative support ~40% Order Management Order-to-cash and collections ~40% Sourcing Indirect spend purchases and accounts payable ~30% Sales Sales back office and operational support ~20%

Cost reduction programs driving margin expansion and fueling growth 18 Delivering supply chain and overhead cost savings faster than expected, while also finding new opportunities Cost savings fueling both margin expansion and increased growth investments On track to deliver 2015 and 2016 Adjusted Operating Income margin targets

Mark Clouse EVP and Chief Growth Officer

Growth plan built on strong foundation of world’s favorite snacks brands … 20 ~70% of H1 2015 Revenue 1 1. Excludes coffee.

… global category leadership North America Europe Global Latin America Asia Pacific Eastern Europe Middle East & Africa -- Source: Euromonitor 2014 Biscuits Chocolate Gum Candy 21

… and an advantaged geographic footprint Developed Markets 61% Emerging Markets 39% Pro Forma 2014 Revenue of $30.5B (excluding coffee) 22

Executing two strategies to drive long-term growth 23 Accelerate Base Business Growth Fill In Key Consumer Spaces

Stepping up investments in base business in proven areas 24 Increase A&C investments to optimal levels Shift A&C to high ROI digital and social media outlets Leverage Price Pack Architecture Launch proven platforms into White Spaces Accelerate Base Business Growth

Increasing A&C behind Power Brands to drive highest returns and improve share of voice 25 A&C as % Net Revenue 2014 2018E Emerging Markets Developed Markets Emerging Markets Developed Markets 8%+ 10%+ SOV / SOM 1 in Key Markets Increasing Total A&C Support Especially in Emerging Markets Improving Share of Voice in Key Markets 2015E 2018E Biscuits Chocolate Gum Candy 1. SOV / SOM = Share of Voice divided by Share of Market. Source: SMG/Carat. Power Brands % 80%+ ~90%

Shifting support to high ROI digital and social media outlets 26 Digital as % Total Media Spend 2014 2018E 15%+ ~30% Digital and social media ROI ~2x traditional media

Leveraging Price Pack Architecture to increase penetration and expand reach Maximize Platforms to Expand Occasions Grow Category and Share with Family Packs Increase Accessibility with Small Formats at Low Price Points Traditional Trade Single Serve (e.g., 6 piece) Gifting Tin Bite-size bag Multi-pack Minis To-Go Cup Minis Family Size Regular Family Size 27

Opportunities to accelerate innovation expansion globally 28 USA Canada UK Germany Australia Brazil Russia India China Selected Biscuit Platform Opportunities Chocobakery

Global roll out of chocolate tablet innovation is a great example of proven platform expansion 29 $0.5B+ revenue platform today; targeting $1.0B+ revenue platform by 2020 Already present in 57 countries Margin accretive to chocolate portfolio Aligned playbook and global menu cards for all launches Leveraging advantaged assets Category model driving faster deployment

Opportunities to enter category White Spaces 30 Biscuits Gum & Candy Chocolate Selected Category White Space Opportunities Brazil Russia India China Egypt Indonesia Mexico Nigeria Saudi Arabia South Africa Turkey Vietnam

Macro trends shaping snacking global behavior & creating growth opportunities 31 Fill In Key Consumer Spaces Emphasis on Well-Being Time Compression Shift of Income Distribution

32 Well-Being is the biggest opportunity to accelerate growth Drive Well-Being focus through existing portfolio and innovation Simplify and enhance existing portfolio Focus innovation on consumer Well-Being needs Targeting 50% of revenue in Well-Being snacks by 2020

Simplify and enhance existing portfolio 33 1. Goals and results versus 2012 baseline. Three ingredients: whole wheat, Canola oil and natural flavors No artificial colors Sodium <170 mg/serving today (11% reduction) 100% whole grains Thinner, crispier formats New simplified graphics with front-of-pack labeling 2020 Goals 1 Reduce saturated fat 10% Reduce sodium 10% Increase whole grains 25% Simplify ingredients Remove artificial colors and flavors Execute front-of-pack calorie labeling globally

Greater focus on Well-Being innovation already impacting portfolio ~$40MM of revenue 1 Acquired in 2015, developing global expansion plans 34 1. 2014 revenue. 2. 2014 revenue for childrens’ wholesome platform, which includes Barni, Ourson and Teddy Grahams. ~$300MM of revenue 2 Playful treat, made with only wholesome, simple ingredients $600MM+ of revenue 1 Combines convenience and taste with proprietary energy bundle

35 E-commerce is changing the way consumers are buying our brands Develop and build an industry-leading e-commerce snacks business Optimize existing platforms in e-commerce Build advantaged next-generation portfolio $1B revenue opportunity by 2020

Buy Now enabled media in 25 countries and with 130 retailers Global e-commerce team established Forming strong partnerships with global e-commerce retail leaders Optimize existing platforms in e-commerce 36

Build advantaged next-generation portfolio Holiday Gifting Specialty Brand Expansion Custom Experiences / Personalization Licensed Products 37

38 Broadening portfolio to meet growing consumer cohorts Expand portfolio to include more Aspirant and Premium offerings Access to Power Brands for Aspirants Increase focus on Premium segments Strengthen Category Growth and Shares

Expand portfolio to include more Aspirant and Premium offerings Aspirants Middle Class Upper Middle Class Affluent % of 2020 Households 1 ~20% 25%+ ~20% ~5% Focus 1. Reflects percentage of global households. The balance of remaining households typically do not buy branded products Source: Euromonitor; Company Analysis 39 Affordable Formats of Power Brands Strengthen Premium and More Special Brands

Already executing strategies to drive strong Organic Net Revenue growth 40 2015E Long-Term Growth Target Fill In Key Consumer Spaces 3%+ At or above category growth Accelerate Base Business Growth

Driving sustainable top- and bottom-line growth to deliver top-tier shareholder returns 41 Top-Tier Shareholder Returns Drive Revenue Growth Expand Gross Margin Reduce Overheads Invest for Growth

42 * * * *

GAAP to Non-GAAP Reconciliations 43 Net Revenues Gross Profit Gross Profit Margin Operating Income Operating Income Margin Reported (GAAP) 15,423 $ 6,007 $ 38.9% 1,652 $ 10.7% 2012-2014 Restructuring Program costs - - (3) 2014-2018 Restructuring Program costs - 12 406 Integration Program and other acquisition integration costs - - 1 Remeasurement of net monetary assets in Venezuela - - 11 Costs associated with the coffee business transaction - 3 185 Operating income from divestiture - - (5) Gain on divestiture - - (13) Acquisition-related costs - - 2 Rounding - - 1 Adjusted (Non-GAAP) 15,423 $ 6,022 $ 39.0% 2,237 $ 14.5% Reclassification of coffee business (1,627) (673) (342) Reclassification of equity method investment earnings - - (51) Pro Forma Adjusted (Non-GAAP) 13,796 $ 5,349 $ 38.8% 1,844 $ 13.4% Currency 715 271 Pro Forma Adjusted @ Constant FX (Non-GAAP) 6,064 $ 2,115 $ Net Revenues Gross Profit Gross Profit Margin Operating Income Operating Income Margin Reported (GAAP) 17,077 $ 6,309 $ 36.9% 1,800 $ 10.5% Spin-Off Costs - - 19 2012-2014 Restructuring Program costs - 6 139 2014-2018 Restructuring Program costs - - 10 Integration Program and other acquisition integration costs - - (2) Remeasurement of net monetary assets in Venezuela - - 142 Costs associated with the coffee business transaction - - 5 Operating income from divestiture - - (3) Adjusted (Non-GAAP) 17,077 $ 6,315 $ 37.0% 2,110 $ 12.4% Reclassification of coffee business (1,858) (750) (310) Reclassification of equity method investment earnings - - (57) Pro Forma Adjusted (Non-GAAP) 15,219 $ 5,565 $ 36.6% 1,743 $ 11.5% Gross Profit Operating Income % Change - Reported (GAAP) (4.8)% (8.2)% % Change - Adjusted (Non-GAAP) (4.6)% 6.0 % % Change - Pro Forma Adjusted (Non-GAAP) (3.9)% 5.8 % % Change - Pro Forma Adjusted @ Constant FX (Non-GAAP) 9.0 % 21.3 % For the Six Months Ended June 30, 2014 Gross Profit/Operating Income to Pro Forma Adjusted Gross Profit/Operating Income (in millions of U.S. dollars) (Unaudited) For the Six Months Ended June 30, 2015

GAAP to Non-GAAP Reconciliations 44 Net Revenues Operating Income Operating Income Margin Reported (GAAP) 34,244 $ 3,242 $ 9.5% Spin-Off Costs - 35 2012-2014 Restructuring Program costs - 459 2014-2018 Restructuring Program costs - 381 Integration Program and other acquisition integration costs - (4) Remeasurement of net monetary assets in Venezuela - 167 Costs associated with the coffee business transaction - 77 Operating income from divestiture - (8) Acquisition-related costs - 2 Intangible asset impairment charges - 57 Adjusted (Non-GAAP) 34,244 $ 4,408 $ 12.9% Reclassification of coffee business (3,776) (646) Reclassification of equity method investment earnings - (104) Pro Forma Adjusted (Non-GAAP) 30,468 $ 3,658 $ 12.0% Net Revenues Operating Income Operating Income Margin Reported (GAAP) 35,299 $ 3,971 $ 11.2% Spin-Off Costs - 62 2012-2014 Restructuring Program costs - 330 Integration Program and other acquisition integration costs - 220 Benefit from indemnification resolution - (336) Remeasurement of net monetary assets in Venezuela - 54 Gains on acquisition and divestitures, net - (30) Impact from divestitures (70) (12) Acquisition-related costs - 2 Adjusted (Non-GAAP) 35,229 $ 4,261 $ 12.1% Reclassification of coffee business (3,904) (700) Reclassification of equity method investment earnings - (101) Pro Forma Adjusted (Non-GAAP) 31,325 $ 3,460 $ 11.0% For the Twelve Months Ended December 31, 2013 For the Twelve Months Ended December 31, 2014 Pro Forma Adjusted Net Revenue / Operating Income Net Revenue / Operating Income to (in millions of U.S. dollars) (Unaudited)