Mondelez International Working with “Urgency” to Counter Political Uncertainties

08 Feb 2017 --- Political uncertainties, economic disruptions and slowing growth were flagged up as concerns for Oreo-maker Mondelez International which has reported an 8.1 percent fall in revenues in the quarter to $6.77bn.

Profits and sales were undermined by the comparative strength of the dollar to other currencies, such as the euro and sterling, in the three months ending December 31,
which hit the value of sales outside of the US. 

Mondelez, the maker of Cadbury chocolate and Trident chewing gum, makes around 75 percent of its sales outside of the US.

Its overall quarterly sales figure of $6.77bn was below analysts’ forecasts of $6.89bn.

In Europe, its biggest market, sales were $2.68bn in the period, down 4.7 percent on the year, while sales were down 0.6 percent to $1.81bn in North America. 

In Latin America, sales were down 31 percent to $864m and down 3.8 percent to $1.41bn in Asia, Middle East & Africa.

"We continue to make solid progress toward our near-term margin targets, while investing for long-term growth," said Irene Rosenfeld, Chairman and CEO. 

"Despite significant economic disruptions, political uncertainties and slower global category growth, we remain confident in and committed to our balanced strategy for both top- and bottom-line growth."

"Throughout the year, we continued to sharpen the focus of our portfolio, increase Power Brand investments and modernize our supply chain. These actions, together with our excellent cost discipline, position us well to deliver strong operating leverage that will drive sustainable value creation for our shareholders."

According to the Financial Times, Rosenfeld said major disruptions to financial markets, like India scrapping the majority of its cash in circulation, were of significant 
concern for companies such as Mondelez.

She said: "The impacts from these events are being felt across many companies and industries and we are not immune. We’re working with a sense of urgency to deal with these realities to control what we can and create contingencies for what we can’t."

A fresh concern for Mondelez could be the presidency of Donald Trump and if he fulfils on his pledge to protect US businesses, particularly as Mondelez makes the bulk of its sales outsdside of the US.

Net earnings at Mondelez were $93 million compared with a loss the year previous of $729 million, which was down to deconsolidating its business in Venezuela.

Last month, Mondelez International increased the price of some of its products to offset the weaker sterling and higher commodity costs.