Mondelez International to Focus on Power Brands as Philadelphia Sale Imminent

17 Feb 2016 --- Mondelez International chief executive Irene Rosenfeld has underscored the company’s focus on investing on its top-selling brands, as speculation mounts that it is to sell off its Philadelphia cream cheese brand in Europe.

Reports suggest that Mondelez International, the company spun out of Kraft’s snacks food business in 2012, has sounded out investor appetite for a sale of its cheese and grocery unit which includes its Philadelphia brand and Italian processed cheese Sottilette in a $3 billion sell off.

Mondelez International is said to be working with US banks JP Morgan and Goldman Sachs on the sale, which could take place as early as next month.

The rights in the US to Philadelphia are owned by Kraft, which merged with rival food company Heinz last year.

Possible buyers for the unit include the French dairy group Lactalis, along with private equity firms including Carlyle and Advent International.

Mondelez International has refused to comment on the proposed sale which first emerged last year.

A sale would mean that the company could focus on its fast-growing snack business, which includes power brands such as Milka, Cadbury’s Dairy Milk and Oreo.

Speaking to analysts, Rosenfeld said: “By building our Power Brands, driving innovation platforms and expanding our distribution capabilities, we’re able to leverage our advantaged platform to grow revenues at or above the rates of our categories.”

As well as focusing on its Power Brands, the company said it would ditch low-margin SKUs in stores as well as reducing its supply chain and overhead costs.

Rosenfeld also underlined the company’s outlook for 2016, which she said reflects volatile commodity costs and challenging external conditions.

The 2016 outlook includes
• 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