Mondelez International improved its third quarter profit performance as price increases and a focus on margin management helped offset lower sales in the period.
The Cadbury owner booked a 17.8% drop in reported sales, which fell to US$6.85bn in the three months to 30 September. The drop included a 13.6% hit from negative currency movements and the contribution last year from Mondelez's coffee business. Organic sales, however, rose 3.7% on the back of higher pricing, which was up 7.4% and more than offset the negative impact of volume mix, which trimmed 3.7% off the result.
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The company said operating income was $7.8bn, up 815%, including a $7.1bn pre-tax gain from the spin-off of its coffee business. On an adjusted basis, operating income rose 3.7% to $965m. During the year, Mondelez has focused on lowering its costs to increase investment behind power brands and step up shareholder returns. Adjusted operating income margin expanded 170 basis points during the third quarter to 14.1%.
"We delivered strong margin expansion in the third quarter by progressing our transformation agenda in a volatile and challenging macro economic environment," said chairman and CEO Irene Rosenfeld. "We're continuing to aggressively reduce costs to expand margins and provide the fuel for incremental investments behind our power brands and route-to-market capabilities to drive sustainable revenue growth and improve market shares."
Net earnings, including the gain from the coffee transaction, totalled $7.26bn, a jump of 708%.
Mondelez reaffirmed its full-year guidance. "We remain confident in our ability to deliver our 2015 outlook and our 2016 adjusted operating income margin target of 15-16%, while continuing to return significant capital to our shareholders," Rosenfeld said.
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