Mondelez International, Inc. (NASDAQ:MDLZ) Q4 2014 Earnings Conference Call - Final Transcript
Feb 11, 2015 • 08:00 am ET
Good morning. And welcome to the Mondelez International Fourth Quarter 2014 Year-End Earnings Conference Call. Today's call is scheduled to last about one hour including remarks by Mondelez management and the question-and-answer session [Operator Instructions].
I'd now like to turn the call over to Mr. Dexter Congbalay, Vice President, Investor Relations for Mondelez International. Please go ahead, sir.
Good morning and thanks for joining us. With me are Irene Rosenfeld, our Chairman and CEO; and Brian Gladden, our CFO. Earlier today, we sent out our earnings release and today's slides, which are available on our website mondelezinternational.com. As you know, during this call, we'll make forward-looking statements about the Company's performance.
These statements are based on how we see things today. Actual results may differ materially due to risks and uncertainties. Please refer to the cautionary statements and risk factors contained in our 10-K and 10-Q filings for more details on our forward-looking statements. Some of today's prepared remarks include non-GAAP financial measures. You can find the GAAP to non-GAAP reconciliations within our earnings release and at the back of the slide presentation.
With that, I'll now turn the call over to Irene.
Thanks, Dexter, and good morning. In 2014 we delivered solid results, even as we faced headwinds in the broader environment. We have made good progress on our transformation agenda, especially in our supply chain and in overheads. Of course, we also announced our coffee joint venture, which we expect to close later this year. As we enter 2015, we will continue to focus on what we can control, reducing costs, pricing to protect profitability and driving Power Brands and innovation platforms in key markets.
In addition, we are taking some specific actions to exit lower margin revenues to improve our mix. Overall, I am quite confident in our ability to execute our plans, achieve our strategic objectives and continue to deliver solid returns to our shareholders. Turning to the specifics for 2014, we generated strong earnings growth and margin expansion in a challenging environment by driving record net productivity and aggressively reducing overheads.
On the topline, we delivered organic net revenue consistent with our latest outlook, as we raised prices to recover higher input costs and protect profitability, while continuing to invest in our growth platforms. Specifically, for the full year, organic net revenue was up 2.4%, adjusted operating income margin increased 80 basis points to 12.9%. That was in line with our guidance of about 13%, despite absorbing a 50 basis point headwind from the timing of mark-to-market accounting.
Adjusted EPS was a $1.76 for the year, up 23% on a constant currency basis and the source of this growth was high quality, driven mostly by operating gains. In light of a still challenging macroeconomic environment, consumer confidence and spending weakened in many of our key markets, while competition among food retailers was intense, especially in Europe.
We faced significantly higher prices for key commodities, like cocoa and coffee, and this inflation was magnified by local currency