8-K: Mondelz International Recasts Historical Financials Following JDE Peets Share Sale

Mondelz International updates its historical non-GAAP financial results to reflect the divestiture of its remaining shares in JDE Peets to JAB Holdings Company.

Summary

• Mondelz International has released a report detailing the retrospective impact of the sale of its remaining 85.9 million shares in JDE Peets (JDEP) to JAB Holdings Company.
• The sale, completed in the fourth quarter of 2024, involved selling shares at a price of $25.10 per share, totaling approximately $2.2 billion ($2.4 billion).
• As Mondelz no longer holds an equity method investment in JDEP as of the end of 2024, the sale is considered a divestiture starting with the fourth quarter ended December 31, 2024.
• Historical non-GAAP financial results have been recast to reflect the impact of this sale, with the equity method investment net earnings results related to JDEP removed from Adjusted EPS for all historical periods presented.
• The company believes this recasting provides additional information to facilitate comparisons of historical operating results and identify trends.
• U.S. GAAP results, which include historical equity method investment net earnings from JDEP, will not change from the prior presentation.
• Recast amounts are provided for the first three quarters and nine months of 2024, all quarters of 2023 and 2022, and the years ended December 31, 2023, and 2022.
• The financial schedules in Exhibit 99.1 contain reconciliations for the recast non-GAAP financial results for Adjusted EPS.
• Schedule 1 provides reconciliations of the differences between reported (GAAP) financial measures and the recast Adjusted (non-GAAP) financial measures.
• Schedule 2 provides reconciliations between reported Diluted EPS (GAAP) and the recast Adjusted EPS (non-GAAP) for comparative periods.

Sentiment

Score: 7

Explanation: The document is primarily factual and related to accounting adjustments. The sentiment is neutral to slightly positive due to the increased transparency provided by the recast financials.

Positives

• The recasting of historical non-GAAP financial results provides additional transparency and facilitates comparisons of historical operating results.
• The company believes the recasting helps identify trends in underlying operating results.
• The sale of JDEP shares generated approximately $2.2 billion ($2.4 billion) in proceeds.

Future Outlook

The company expects the ERP System Implementation program to be completed by year-end 2028.

Management Comments

• Mondelz International believes the non-GAAP financial information is useful to investors as it provides additional information to facilitate comparisons of historical operating results, identify trends in underlying operating results, and provide additional insight and transparency on how they evaluate their business.

Industry Context

This announcement reflects a strategic shift in Mondelz International's portfolio, moving away from equity investments in coffee businesses to focus on its core snacking categories. This is in line with other large food and beverage companies that are streamlining their operations and focusing on high-growth areas.

Comparison to Industry Standards

• Many companies use non-GAAP measures to provide a clearer picture of their operating performance by excluding certain items that may distort the underlying trends.
• The specific adjustments made by Mondelz, such as excluding acquisition-related costs and divestiture impacts, are common practices among multinational corporations.
• Comparable companies like Nestle, PepsiCo, and Unilever also report non-GAAP measures to help investors better understand their financial results.

Stakeholder Impact

• Shareholders will benefit from the increased transparency and comparability of historical financial results.
• The sale of JDEP shares provides Mondelz with additional capital that can be used for strategic investments or share repurchases.

Key Dates