Mondelēz International Inc. – maker of “power brands” like Oreo, Chips Ahoy!, Ritz, Cadbury Dairy Milk and Trident gum – is boosting its profitability by putting the consumer “at the center of everything we do,” says CEO Dirk Van de Put, who took the top post in November.
The Deerfield, Ill.-based company’s first quarter net income rose nearly 50%, to $938 million, or 62 cents per share, beating Wall Street expectations. The company, which sells products in about 160 countries, is benefitting from “encouraging” snacking category growth trends, especially in emerging markets, with total net revenues rising 5.5%, to $6.76 billion.
“I’m pleased to say that 2018 is off to a good start,” Van de Put said on the company’s earnings call with analysts. “We have improving top line momentum, as well as continued margin and EPS expansion.”
As the company continues to improve operations after a significant restructuring during the tenure of its former CEO, Irene Rosenfeld, Mondelēz is “moving in the right direction” — thanks to advantages that give it a leg up on its competitors, he said.
“First, we have a strong stable of iconic brands,” Van de Put said. “Second, our geographic footprint is favorably balanced with about three-quarters of our revenues coming from outside of North America. And third, we maintain leading positions in snacking, where global category growth trends are improving. With these powerful assets, I remain confident that our company is well positioned to succeed.”
The key to unlocking more value for shareholders, he said, entails first becoming a truly customer-centric company – understanding more clearly when and why consumers snack and how Mondelēz can best deliver on those needs.
Secondly, the company “must execute with excellence every day,” building on the company’s significant margin improvement through restructuring. “These two simple mandates are critical to delivering our 2018 plan,” Van de Put said. “And they will underpin the strategic framework to deliver further sustainable growth over the long term.”
The company remains on target to complete a strategic review of operations by the end of this summer, and analysts say that may include plans for expansion by introducing new products as well as making more acquisitions.
Already Mondelēz has already struck one M&A deal under Van de Put, this month announcing plans to buy premium cookie maker Tate’s Bake Shop in Long Island, N.Y. for about $500 million.
“With a unique and authentic brand and truly delicious products, this acquisition gives us an attractive entry point into the fast growing premium cookie segment,”Van de Put said.
Last month the new CEO became chairman of Mondelēz’s board of directors. Van de Put joined the company after serving as president and CEO of McCain Foods Ltd., a $9.1 billion CAD ($7.3 billion USD) privately held Canadian company that is the largest marketer and manufacturer of frozen french fries, potato specialties and appetizers with sales in more than 160 countries.
Dirk Van de Put, CEO, Mondelēz International, Inc.
Headquarters: Deerfield, IL
Education: Ghent University (Belgium), University of Antwerp (Belgium)
First joined company: 2017
Key positions before joining company: President & CEO McCain Foods Limited; Global OTC Division President, Novartis Inc.
Named CEO: 2017