Mondelez 2014 Annual Report Download - page 42

Table of Contents
Europe
2014 compared with 2013:
Net revenues decreased $147 million (1.0%), due to unfavorable volume/mix (2.3 pp), the impact of the prior year’s accounting
calendar change (0.2 pp) and the impact of divestitures (0.0 pp), partially offset by higher net pricing (1.3 pp) and favorable
currency (0.2 pp). Unfavorable volume/mix was driven by lower shipments across all categories. The decline was due to pricing-
related elasticity across the region and certain pricing-related customer disruptions. The accounting calendar change made in 2013
resulted in a year-over-year decrease in net revenues of $38 million. In addition, divestitures completed in 2013 resulted in an $11
million decline in net revenues. Higher net pricing was driven by chocolate and cheese & grocery, partially offset by lower net
pricing in all other categories, primarily biscuits and coffee. Favorable currency impacts primarily reflected the strength of the British
pound sterling relative to the U.S. dollar, partially offset by the strength of the U.S. dollar against the Swedish krona, the euro and
Norwegian krone.
Segment operating income increased $71 million (4.2%), due primarily to lower manufacturing costs, higher net pricing, lower
Integration Program costs (including the reversal of a prior-year accrual), lower advertising and consumer promotion costs and
lower other selling, general and administrative expenses (net of the unfavorable year-over-year impact from the 2013 gains on the
sales of property in the United Kingdom, Norway and Italy, and the benefit from a 2014 gain on a sale of property in the United
Kingdom). These favorable items were partially offset by higher raw material costs (primarily higher cocoa costs), costs incurred for
the 2014-2018 Restructuring Program, unfavorable volume mix, higher 2012-2014 Restructuring Program costs, costs associated
with the JDE coffee transactions, an intangible asset impairment charge related to a candy trademark and the year
-over-year
impact from last year’s accounting calendar change.
2013 compared with 2012:
Net revenues increased $242 million (1.8%), due to favorable volume/mix (3.2 pp), favorable currency (2.1 pp) and the impact of an
accounting calendar change (0.3 pp), partially offset by lower pricing (2.4 pp) and the impact of current and prior-year divestitures
(1.4 pp). Favorable volume/mix was driven by higher shipments in chocolate, biscuits and coffee, partially offset by lower shipments
in gum & candy and cheese & grocery. Favorable currency primarily reflected the strength of the euro, Swedish krona and Polish
zloty relative to the U.S. dollar, partially offset by the strength of the U.S. dollar relative to the British pound sterling. Lower net
pricing was driven primarily by lower coffee prices.
Segment operating income decreased $63 million (3.6%), due primarily to lower net pricing, higher 2012-2014 Restructuring
Program costs, the impact of current and prior-year divestitures and higher Integration Program costs (partially due to the reversal
of $45 million of charges due to the outcome of labor negotiations in April 2012). These unfavorable items were partially offset by
favorable volume/mix, lower manufacturing costs, favorable currency, lower other selling, general and administrative expenses
(including the impacts of gains on the sales of property in the United Kingdom, Norway and Italy and a $44 million reversal in 2012
of reserves carried over from the Cadbury acquisition in 2010 no longer required), lower advertising and consumer promotion costs,
the impact of an accounting calendar change and lower raw material costs (primarily coffee).
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For the Years Ended
December 31,
2014
2013
$ change
% change
(in millions)
Net revenues
$
13,912
$
14,059
$
(147
)
(1.0)%
Segment operating income
1,770
1,699
71
4.2%
For the Years Ended
December 31,
2013
2012
$ change
% change
(in millions)
Net revenues
$
14,059
$
13,817
$
242
1.8%
Segment operating income
1,699
1,762
(63
)
(3.6)%