US: Mondelez ups snacks focus in restructuring drive
Mondelez International said today (6 May) that it has zeroed-in on its snack business as it booked an increase in first-quarter earnings.
The group struck a deal that will see it combine its coffee portfolio with Master Blenders in a move that will create the "world's leading" pure-play coffee group. Mondelez said it will receive post-tax proceeds of around US$5bn and a 49% stake in the new entity.
Following the deal, snacks will generate around 85% of Mondelez's net revenue, the company said.
Mondelez also announced plans to reduce operating costs to "best in class" levels. The company launched a restructuring programme that it said will deliver annualised cost savings of US$1.5bn by 2018. Mondelez said that it will invest $3.5bn in lowering costs. Previously, the company had said it intended to expand margins by 15-16% by 2016.
"The strategic and cost-reduction actions we announced today underscore our determination to become a leaner, more focused and more nimble global snacking powerhouse," said Irene Rosenfeld, chairman and CEO.
On a reported basis, first-quarter net revenues were $8.6bn, down 1.2%. Operating income was $843m, up 1.1%.
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