Mondelēz International's CEO Presents at Barclays Capital Back to School Conference - (Transcript)

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Mondelēz International, Inc. (NASDAQ:MDLZ) Barclays Capital Back to School Conference September 3, 2013 9:00 AM ET


Irene Rosenfeld - Chairman and CEO

Daniel Myers - EVP, Integrated Supply Chain

Dave Brearton - EVP and CFO



We’re very happy to have Mondelēz International with us here to kick things off. As a housekeeping note, Mondelēz is leaving some extra time in the room here for Q&A, but will not be hosting a breakout session. As you all know Mondelēz is pursuing a strategy of reducing cost and develop markets, stepping up investments in emerging markets, while targeting operating margins of 14% to 16% within the next five years, compared to 12% in 2012. Here to update us is Irene Rosenfeld, Chairman and CEO of Mondelēz, Irene thanks very much for being here.

Irene Rosenfeld

Good morning to all of you. Before we begin please take note of our safe harbor statement. As you know today's remarks include forward-looking statements and non-GAAP financial measures. You can find the GAAP to non-GAAP reconciliations posted on our website. With that let's dive in.

As I stood on this stage a year ago we have all the ingredients in place for success. We have an advantaged geographic footprint with 40% of our revenues in emerging markets. 75% of our revenue comes from fast large growing snacks categories. We have an unrivalled portfolio, a beloved power brand and proven global innovation platforms. We have strong routes-to-market, with significant barriers to entry. And finally, we have world class talent including a deep bench of experienced leaders.

What's more, in each of our regions we have embedded a virtuous cycle, which serves as a framework to deliver top tier performance over the long-term, including 5% to 7% organic revenue growth, high single-digit growth in operating income, double-digit EPS growth and strong cash flow to invest in the future and return capital to shareholders. In February, we outlined the one way of growth opportunities ahead of us. We believe that our 5% to 7% long-term target is clearly achievable, whether you look at our portfolio by geography or by category mix.

That said, we realized the growth is slowing in many of our key countries and categories. But keep in mind that even when the emerging markets slowed down we're still growing 3 to 4 times the rate of the developed markets.

And while our categories in aggregate excluding volatile coffee prices have slowed from around 6% to about 5% year-to-date, snacking growth is still much faster than most food categories. But there is no question that the operating environment is becoming more challenging. So we remain focused on winning within our categories by sustaining and building our share positions, by leveraging power brands and proven innovation platforms as we as expanding our sales and distribution capabilities. At the same time, we're expanding margins through an intense focus on cost savings and productivity.

We have a track record of expanding margins. Since 2008, we have delivered an increase of 300 basis points, largely through overhead reductions. We intend to steadily drive another 300 basis points over the next five years to hit the 14% to 16% target that we discussed in May. Strong top-line growth together with this margin expansion will be the primary drivers behind our commitments to deliver double-digit EPS gains.

In our emerging markets, we’re already delivering top tier margins. So that means North America and Europe would drive the base margin expansion. In North America, we're targeting high teens or about 500 basis points higher than where we are today. Given the size of this gap and the fact that it's largely a gross margin issue, we have initially anticipated it would take us until 2017 to make up this difference. However, with the recently announced Greenfield biscuit facility in Mexico, we now expect to deliver that 500 point improvement by 2016.

In Europe, we're targeting the upper end of the mid-teens tier range. We are about 250 basis points higher than where we are to-date. Like North America this gap is largely in gross margin. We also expect to reach that goal by 2016. To do so, we expect to deliver an average of 60 to 90 basis points of base operating margin gains annually over the next three years.

As we outlined in May, in 2013, our significant base margin expansion will be offset by two things; we're prudently investing to fuel growth in emerging markets and we're beginning to fund ongoing restructuring efforts to improve our cost structure. This balancing of the top and bottom-lines driving margin gains in the short-term while making high return investments for the long-term underpins our financial targets. As a result, we expect OI margin will be about 12% this year, in 2014 though we expect OI margin to increase to the high 12s. Within five years we expect to achieve tier average margins or 14% to 16% or 14.5% to 16.5% excluding restructuring. The rate of increase may vary year-to-year based on investment opportunities, expected returns and the pace of our cost savings. But as with North America if we can get there quicker we will.

So how are we going to deliver the significant improvement in base margins? It’s largely through initiatives that we’re implementing right now in our supply chain. As you’ll hear in a moment, we intend to deliver a $1 billion a year in gross productivity savings. These savings will be the primary driver of our 60 to 90 basis point improvement in OI margins in each of the next three years. Daniel Myers, who leads our Integrated Supply Chain is joining us today to describe the initiatives now underway to deliver those savings as well as to generate incremental cash. Daniel comes to us after a 33 year very successful career at Procter & Gamble where he served in a variety of roles across all areas of engineering, plant management and supply chain functions.

So with that let me turn it over to Daniel.

Daniel Myers

Thanks, Irene, and good morning. It’s a real privilege to share with you the great work, the 70,000 men and women are doing in the supply chain, in 80 countries serving 165 markets around the world. Now probably company had made progress on margins before I joined two years ago, we were well aware that significant opportunity remained. We knew that improvements in our supply chain could drive higher margins, increased productivity and generate more cash to reinvest in growth. In fact, that was the mandates I was given when I joined Mondelēz.

So we launched a major program that we call “Quest to be the Best” to reinvent our supply chain and create a demonstrable competitive advantage. We broadly deployed the key elements of this program beginning in early 2012. We identified five priorities to deliver a world-class supply chain. First, step change the leadership talent and accelerate building key capabilities in our people. Second, transform our global manufacturing platforms. Thirdly, resign and restructure our supply chain network. Fourth, drive productivity improvements through Lean Six Sigma, procurement transformation and simplicity to provide fuel for growth. And finally to improve free cash flow.

We’ve identified the benefits of approximately $3 billion in gross productivity savings, $1.5 billion in net savings and $1 billion in incremental cash over the next three years. If you do some quick math, $1 billion in gross productivity is about 4.5% of our cost of goods sold. What’s more, we now have rigorous processes in place to translate more of the gross savings to net productivity after the planned investments and (conflation) to deliver a little over 2% of cost.

This $1.5 billion in net savings translate into 60 basis points of annual improvement in gross margin. Let me take you through each of these priorities and explain how we will drive the savings. The first, you need to understand our starting point, which is a supply chain that’s been built through a long series of acquisitions starting with Jacobs Suchard which Goddess and to chocolate and Nabisco which marked our entry into biscuits.

Over the last few years, we’ve accelerated integrating LU biscuits and Cadbury. These businesses greatly expanded our operations in Europe and in emerging markets. And of course last year we spun off our North America grocery operation to become Mondelēz International. As a result, our supply chain network today is fragmented, it is complex and inefficient. While we’ve made progress in recent years, we still have meaningful improvements, opportunities ahead.

Our portfolio has over 74,000 skews and our average revenue per skew is only about one third of the leading CPG companies. In Europe alone, we have a scattered base of more than 4,000 suppliers. A number of our 170 plants around the world are old subscale facilities that require significant ongoing investment to maintain. In Europe, only about 15% of our 70 plants are A-rated, and in North America about 60% of our manufacturing lines are over 40 years old. In addition, many of these lines are subscale. In many locations we have very high labor cost with significant variations within and across countries within a region. All of this makes it very difficult to deliver consistent service levels at benchmark cost.

In many plants, we have low capacity utilizations on some products while being short on others especially our growth platforms. So, the question becomes, how do we fix it? In the last 12 months, we’ve put the right people in the right places including 30 vice presidents and director levels staffing changes. These leaders have diverse backgrounds and a combination of experience in both emerging and developed markets. Each has worked in multiple countries around the world. Our vice president and director team now includes members with significant experience from more than a dozen leading CPG companies.

Importantly, we’ve broken down the silos of the different functions required to operate the supply chain. From procurement, manufacturing to engineering to customer service and logistics, in its place, we built a truly end-to-end integrated organization focused on delivering back demonstrable competitive advantage. Lastly, I’d say all-the-time look through a window then in a mirror. (Thus) focus externally to benchmark and learn from best in class performance across any industry anywhere it’s what is driving us.

Our second priority is to transform our manufacturing platforms. We start by documenting the best practices in use today not only internally but also looking at all key suppliers around the world then we redesigned the platform to be modular. This allows us to quickly install and modify lines to optimize current operation and launch innovation. We identified breakthroughs in production processes and equipment design that enabled us to step change operational performance. We leveraged low cost suppliers to standardize and source the necessary equipment while protecting the intellectual property.

Finally, we installed and qualified lead pilot lines to demonstrate and optimize performance of the integrated new design to enable a cost effective and fast global rollout. Now as we’re building state of the art manufacturing lines, we’re retiring the older inefficient ones. Now, we’ve started about 18 months ago as we worked to standardize operations after the spinoff of our North America business, we began with an “Imagine if…” slide, like this one for Oreo. Imagine if we could install new lines with 30% less capital, deliver $10 million in operating savings per line and 500 basis points in gross margin improvement.

We wanted to be able to install new capacity in one-third of the time using a modular format focused on 7 days start-up and using a Lego building block design, we do the engineering design once for the line or the building and for all facilities, so imagine what happens. We built it. Now let me say that again, we imagined it, we have funded it, and we built it. These new platforms are becoming the basis for the reinvention of our supply chain.

As you can see in this schematic, the physical footprint of our new Oreo lines takes about half the space as before. What’s more, these new lines have doubled the capacity of many of our current production lines and they require fewer people to operate. And it’s not just about Oreo. We’re expanding this line of the future work to all of our biscuit power brands. We are executing similar transformations for chocolates and gums. In the next 36 months, we plan to install more than 60 production lines using these breakthroughs.

So, we’re redesigning our manufacturing platforms. What about the rest of the network? Every region is modeling a redesign of the supply chain. Looking at what our footprint must be in 2016 and in 2020, we’re leveraging expertise and proven fact that this both internal and external resources with us to deliver breakthrough. We start by focusing on the capacity we need to support the growth that means setting up large scale operations that can double or triple our revenue per plant. We’re putting our platforms in strategic locations on where our consumers will be in the future. That allows our procurement teams to collocate and collaborate more effectively with suppliers to drive down cost.

And we are optimizing outbound logistics focusing on direct shipments from plants to minimize touches, streamline service and improved inventory levels. Now all of this is predicated on our ability to simplify, standardize and create scale. The end point is this: a wining portfolio with the capacity to grow, having our power brands produced on advantaged assets in advantaged locations at advantaged cost and dramatically improved investment returns.

As I said, we are evaluating supply network design across all of the regions and the investments to deliver (our growth) will be considerable. Our total capacity must increase about 25% over the next three years. To get there, we are planning to build eight new flagship plants including the recently announced facilities in Southern India and Northern Mexico. In subject to discussions with unions and work councils, we also consolidate a number of subscale facilities. This will change our footprint considerably. This year in fact we have already announced a dozen plants and distribution centers that will be closed around the globe.

By 2020, we expect to build another five Greenfield sites and double capacity at 16 existing strategic sites while consolidating other subscale plants and distribution centers. Over this period, we expect our volumes produced on low cost global advantaged assets will go from about 15% to-date to about half by 2016 and 80% by 2020. What’s more, our net revenue will approach world-class levels across the food industry, increasing by about 50% in three years and 250% by the end of the decade.

Now, let me give you a specific example of what one of these flagship facilities will look like. As you know, we have recently announced the construction of a new biscuit plant in Mexico. This facility will open in the second half of 2014. It will be dramatically different from the average operations of our plants around the world today. Instead of a typical footprint of 15 to 25 acres, this site has a 125. It’s adjacent to two major railroad lines and major highways that serve Mexico and the rest of the Americas.

Most of our plants to date are not co-located with the supplier base or with the distribution centers that here we have worked with the government to reserve 250 acres for use by strategic suppliers. We’ll also have a distribution center onsite to enable to direct shipments to customers. This plant will require only about one-third of the staff to produce the same capacity as one of our older facilities to date and it will be certified with stringent lead environmental buildings standards. This is a design of the future, advantaged platforms and advantaged locations with real scale; leveraging supplier partnerships and optimize streamline logistics.

As we build our network, we are also stepping up productivity through three critical programs; Integrated Lean Six Sigma, Procurement Transformation and Simplicity. We started our Lean Six Sigma journey about four years ago and we continue to accelerate efforts. In fact, over the past two years, we delivered, more than $400 million of conversion productivity savings largely driven from Lean Six Sigma work by integrating the best practices from Six Sigma, high performance work systems, total productive maintenance and Lean manufacturing were focused on delivering best in class reliability and efficiency. And we have made tremendous progress building these capabilities. We have hired top Lean Six Sigma executives from industry leading experience to run our program. 450 of our plant leaders are now trained in Lean Six Sigma tools and best practices, we have more than 300 certified black belts in place and 2,000 trained green belts around the company building great process capability to eliminate loses and deliver savings.

Let me give an example of how we are applying the Lean Six Sigma capabilities. Today, we have identified 14 plants as lead sites to become world class manufacturing hubs and over the last nine months we have seen great through performance. The lead lines in these plants are delivering an average a 15% more capacity and saving about a $1 million per line. With success flag staff, we are planning to triple the number of sites by the start of next year and we expect to expand these best practices to more than 100 facilities by 2015.

(Inaudible) like these will be key enablers of our productivity efforts to deliver best-in-class reliability and best-in-class efficiency.

Now, we have dramatically transformed our procurement organization too. In the first phase which we began in 2009 we focused on better leveraging our scale to deliver greater value, especially on key commodities, in the next phase we're focused on simplifying what we buy. We're shifting our resources from local or regional to enterprise wide spin towers.

We're also developing stronger more strategic partnerships with fewer suppliers. Let me give you an example of their transformation in our procurement work. In Latin America, we were spending about $50 million on flavors alone on our Tang powdered beverage business, we had more than 400 flavor specifications and we were working with 22 different suppliers, about half of which were non-core.

As you can imagine a very fragmented, complex and inefficient situation. So what did we do? We first identified which flavors were most preferred by consumers, then we partnered with a single supplier to architect a winning product assortment. Working with a strategic supplier we developed exclusive technology to deliver bigger, better flavors, an 80% reduction in specifications. As a result, we reduced costs by 20%. We delivered $10 million in incremental cash, all by developing superior products.

Changes like these enable us to reduce costs, but also increase our speed and innovation to the market. The lead pilot for our simplicity program has been our European biscuit category. We started by reviewing our portfolio of brands in product forms against the needs of consumers and retail customers. Now by really zeroing in on key consumer needs we can simplify product formats, packages and recipes.

This enables us to eliminate skews, reduce complexity and deliver preferred products with stream line technology on fewer production lines. For example, when we acquired the LU biscuit business, it had over 4000 skews in Europe. By applying simplification tools that number will fall to 2500 by 2016.

We expect to see meaningful reduction in format, technology and production lines too. This initiative is expected to reduce the complexity of our biscuit operations in Europe by 60%. That will deliver about $100 million in savings and enhance biscuit gross margin in Europe alone by 300 basis points by 2016. We're leveraging this great work and implementing similar simplification programs right now, both in chocolate category in Europe and in biscuits across North America.

Our fifth priority is improving cash management, by addressing all the levers of the cash conversion cycle. Day sales outstanding, inventory levels and payment terms with suppliers. Now we delivered a $400 million step up in free cash flow at the end of last year. Because of the separation of the company however this wasn't visible to investors. But that momentum gives us great confidence going forward.

We expect to deliver incremental cash of $1 billion over the next three years. So to sum it up, our integrated supply chain organization is squarely focused on five priorities that will lower costs and create a competitive advantage for the company. We're already executing great plans in each of these and aggressively exploring ways to drive lower savings even faster. As a result, I'm confident that our quest to be the best will be realized as we enhance gross margins and deliver $3 billion in gross productivity savings, $1.5 billion in net productivity, and a $1 billion in cash over the next three years. Now let me turn it to Dave to show you how it all comes together.

Dave Brearton

Thanks, Daniel. As Daniel said, we expect to deliver significant productivity savings in each of the next three years. These savings will be the primary driver of our improvement in base line margins. On average, we expect the 500 million of net savings will add around 60 basis points of margins after reflecting the impact of long term pricing.

In addition, improved product mix and overhead leverage will also drive margin gains. As you know, we distort our investments towards a power brand which typically have gross margins that are a 100, 200 basis points above our other brands. As power brands become a larger share of our total revenue, mix improves.

On overhead, we will continue to drive overhead savings in our developed markets as well as corporate. So as revenue increases we'll benefit from leverage. While some of this improvement may be reinvested to support future growth, together they should contribute an additional 30 basis points or so to margin. This is why we're confident in our base margin improvement targets and why we anticipate getting the top into that range next year, when we expect OI margins to reach the high 12s.

So, to wrap up, we’re well positioned for success. We have an advantaged geographic footprint, strong positions in fast-growing snacks categories and an enviable portfolio of iconic brands and innovation platforms. Our virtuous cycle provides the framework to deliver top-tier revenue and EPS growth and it underpins our ability to return cash to shareholders.

As Daniel has stated, we have a detail program to create a world class integrated supply chain that will drive significant base margin expansion and generate strong cash flow. Finally, our 2013 outlook remains the same. Our second half revenue growth will be strong and comfortably within our 5% to 7% range. However, coffee is a bigger wildcard than we expected even a month ago. But remember, coffee is a pass-through category and does not affect our EPS delivery.

And well, I’m not here to give 2014 outlook, we’ll exit the year with solid mix growth, increasing market share and strong momentum behind our power brands.

We’d now be happy to take your questions.

Question-And-Answer Session

Unidentified Analyst

You accelerated your cost program today in North America specifically. What did you see differently that allows you to do that and more importantly is there opportunity or you see further opportunity to accelerate it further whether that be North America or Europe going forward?

Daniel Myers

Well Andrew, as you know we are playing the land that we were wanting for the new site in Mexico, the new platforms, so we going into that site. Now that we have that firmed up, we’re actually made all plans possible to bring forward the construction, startup to that site so that comes online much quicker. It clearly is a breakthrough that’s happening. I will also say we dramatically improved the performance of our current sites across North America.

We’ve got a great leadership team in place in the supply chain now leading that effort. So it’s really that combination. All we plan to do as I said is keep driving the savings higher and trying to get this (entire) transformation done quicker. And as the plans play out and get firmed up, we’ll do that in each and every one of them as they occur around the world.

Unidentified Analyst

Previously I think you targeted 13% margins overall by 2015, and 14% to 16% by 2017. With North America pushed forward by a year and in Europe I think unchanged, if I’m not mistaken, will you now reach that 14 to 15 potentially earlier whether be by 2016? And is there any change to 2015 as well?

Dave Brearton

I think we pulled forward North America by about a year; North America is 20% of our business so won’t make a dramatic change. But I would say clearly we have in our eyes the idea that we would like to get there as quickly as we can. So, if we’re able to get there quicker than the five years we’ve layout clearly we will.

Daniel here is trying to help as much as he can by accelerating as much of the savings programs as we can. But clearly we’ll try to get there as quickly as we can. The base margin expansion is in place, North American Europe the plans are in place. So, it’s going to come down to whether we can accelerate those and quickly what are the investment options in emerging market growth that may play out and whether those are better returns or not then simply (inaudible) cash the shareholders.

Irene Rosenfeld

I’ll just remind you that our savings that we’ve identified are predominantly in gross margin; it’s about network resets, it’s about reconfiguring supply change and that’s just takes a little bit longer. So, part of the timing has to do with just the reality, once we identify the opportunities, how fast we can go after them.

Unidentified Analyst

And as we’ve talked about your guidance, I would say (inaudible) of step up to sort of 6% plus organic revenue growth in the back half for the year. I guess we’re two months into the quarter now. You’re seeing more or less the type of acceleration that you would expect on the top line that is consistent with what you need to see in the back half of the year as you did mention also obviously (coffee prices) still downward pressure there. How should we think about that?

Dave Brearton

I think I’m okay into giving monthly guidance on our revenue. But we did updates on the risk profile today. I’d say most of what we saw over the first two months is what we expected. Coffee has been a bit of a wildcard; it has dropped since we’ve had spoke about months ago by about 10%; it closed about 12% last Friday.

So, that’s a bit of a wildcard and we’re looking for (all steps, to clear that things the) bigger challenge. I, again, reinforce that Coffee is pass-through category. So whatever happens to coffee, the OI and EPS delivery will be exactly in line what we said months ago.

Unidentified Analyst

Just obviously not only there is revenue (inaudible) accelerate pretty dramatically in the back half of the year to get where you want to be but markets certainly have to step up significantly. So, maybe can you just check off the list of the couple of biggest sort of movers that give you the comfort level and the ability that margins get where they need to so that they can be roughly flattish for this year on a whole.

Unidentified Company Representative

And I think the way to look at the margins is not really year-over-year this year because last year frankly was quite unusual. In the first half, our margins were down. That was really due to things like Venezuela devaluation and some of the onetime impacts in asset sales and things that happened in the first half last year.

We also did some of the emerging market investments in the first half. So that’s why the margin in the first half was down but I think our margin improved from quarter one to quarter two. We said a month ago we’d see that margin improve again in quarter three. Quarter four this year and years going forward will be the highest margin quarter. Last year it was not for a lot of reasons tied to the stand but typically that will be our highest margin quarter because we sell 10% to 15% more revenue and the leverage dropping through gives us a much better margin in the fourth quarter.

So you’re going see the margins progress over the year, quarter four will be the high point. The comparisons versus year ago are little bit difficult but I think we’re confident that today we’ll end up at that flat point.

Unidentified Analyst

Yes. I was just curious about the net productivity. You suggested that it was a net because it was flowing after core inflation issues and I think there was one other I remember. But what I am trying to get at is that you’re embedding assuming that you’re going to have roughly 200 basis point headwind from these other issues and it doesn’t sound like necessarily that there is a pricing offset to the core inflation issue. So could you just clarify kind of the price (core) inflation dynamic over time?

Dave Brearton

Yeah, I think the way we look at net productivity is when we Daniel is delivering 4.5% gross which I think would be world class in any industry frankly. Against that business investment so as you start up factories like you talked about there as you improve quality of our products, as you make packaging changes. These things tend to go against and wage inflation and other basic inflation that would happen in the factory. So the net is what we would expect to drop through.

Our pricing strategy is to cover commodities and Forex movements within our margin structure and we do price those away. But really what we’re looking at is that $500 million and our ability to over time, not every quarter but over time drop that through that drive the EPS delivery. For those who didn’t hear that is that core inflation includes commodities? Yes it does.

Unidentified Analyst

I had one question for David and one for Irene over here. David, in terms of the slides and the outlook that you provided today, how much of that is embedding lower commodity cost in 2014 or is that upside backward to flow (inaudible) occur in 2014?

David Brearton

The commodity cost assumptions that we’ve got we don’t make big predictions at commodity cost or assumption as we will price those away. And our commodity costs this year are slightly down, as you expect with coffee but it would have been more of an offset by currency movement.

So actually our net input cost between commodities and currency is slightly up and we saw that was in the low single digits. And I would expect as we look into next year it’ll be similar. Things like the Brazilian (Audio Gap) evaluation against the US dollar actually increases our local currency comps in those markets and that’s fully offset again in commodity benefits.

So I am not going to make big commodity predictions but we’re not expecting much different net year.

Unidentified Analyst

Right. So if I were to look at Andrew’s work where you’ll have lower commodity cost based on currency (Audio Gap) cost that’s not part of the plan you laid out today?

David Brearton

Assuming this year we’re up despite those lower commodity cost. Our input cost landed in local currency across the globe or up low single digits. I think that’s a reasonable assumption as we sit here going forward as well.

Unidentified Analyst

All right, thank you. And then Irene, I am shareholder today from here. It’s wonderful to see that you know such opportunity from what I guess say quickly paraphrase it is a set of our (NYSE:K) plans and too much complexity in the business. So there is lots of (opportunities) value for the shareholders sitting here today. But I guess I am a little bit confounded or confused because these would have been opportunities for shareholders four or five years ago where obviously you still had a very prominent role. And so why weren’t those realized back then for those shareholders?

Irene Rosenfeld

Those of you who have followed the company and the creation of the asset that we have today we feel terrific. We believe it’s an advantaged set of assets both from a brand, a footprint and a category standpoint. We’ve had a lot of heavy lifting to do over the last couple of years to get to that point.

So if you think about it in Europe for example, as Daniel alluded to, we moved to a category structure to enable us to capitalize on the opportunities across Europe in about 2007, 2008. We had the LU integration, we had the Cadbury integration. We’ve done a lot of heavy lifting; we didn’t split the company to actually enable some of the opportunities that we talked about here because the focus on these global categories is enabled by the fact that we now have a very focused portfolio 75% of it is in snacks. There is a lot of commonality from one geography to another and that’s what enabling us to go after it.

So we’ve now put the operation together. We feel quite pleased with the fact that we did that the wheels did not follow off we delivered some very significant synergies with the integrations. We’re now in a position to be able to operate this entity and capitalize on some of the efficiencies that Daniel described.

Unidentified Analyst


Irene Rosenfeld

I think that would be a fair way to describe it, yes.

Unidentified Company Representative

Okay, unfortunately I think we’ve got to cut it out there. We’re out of time. But please join me in thanking Mondelēz International for being here today.

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