Khawar

Zaman

Tila
Muhammad

Ahsen
Rafiqu
e

Sohail
Asghar

Ali
Raza

Mondelez

GDP worth $17.701

trillion
Foreign Investments are
$2.4 trillion
Consumer spending are
71%
Out of world top 500
companies 128
headquarters are in US
Household consumption
pattern is 5times larger
than Japan

Future predictions of
economy

GDP in next years

GDP

2015

2016

2017

2.3%-2.7%

2.3%-2.7%

2.0%-2.4%

Growth rate will be 3%

Inflation rate
Inflation rate

2015

2016

2017

0.6%-0.8%

1.7%-1.90%

1.8%-2%

Commodity prices related to company

Actual price $

Previous year
change

COCOA

2844.97

-6.14%

WHEAT

486

-31.40%

SUGAR

13.20

-26.09%

COFFEE

138.47

-31%

Industry
Analysis

NonFinancial
Analysis

Packaged food industry consist

of breakfast cereals, chilled
food, condiments, savory
snacks, dressings, chocolate,
and cheese.
Profitability of industry is
affected by the commodity
prices

The growth of sector is 3.7%

Industry is of worth $4.4 trillion

Key players who

are dominating
Global 50 packaged
food companies have
alone $558.9 billion in
revenues

Nestle

Pepsico

Mondelez
Kraft
foods

Their success is tied to

economic growth & consumer
income

China is expected to overtake

US in packaged food by
volume in 2015
Indias growth rate of
packaged food consumption
is increasing by 20 % & reach
the size of $20 billion by 2015

Grupo Bimbo is a mexican giant in packaged

acquired small companies in North America,
Latin America, Asia and two famous brands
in US (Sara Lee & Entenmanns)

Sweet & Savory snacks

and confectionery items
have sale of $125 billion
& $198 billion in 2014

The Cocoa price

increase will result in the
increase of prices of
chocolate products of
these companies

The fastest growing category in

packaged will be BABY FOOD will be
likely to grow by 7.8% by 2019
The larger companies in this sector is
acquiring small companies deal in
organic foods because they predicting
the future trends of organic food

Large disposable income & growing demand

for convenient ready to eat packaged food
The sea food & poultry packaged is expected
to reach $31.5 billion by 2017
The frozen packaged food market is
expected to $228,000 million by 2015

World canned
food market
expected to
reach $92,700
million by
2015

Packaged Foods
Estimated by 2017
billion $

Percentage change by
2017

Packaged food total

14,985.7

5.8%

Sweet & savory

snacks

1,066.2

7.2%

Soup & Pasta

549.5

5.2%

confectionery

324.8

10.3%

Snacks & bars

203.1

5.4%

Chocolate
confectionery

280.9

10.9%

Sugar Confectionery

43.8

6.8%

Mondelez acquired
LU
Cadbury was taken
by Mondelez in
2010
Pringles by
Kelloggs in 2012
Brookside foods
taken by Hersheys
in 2012

Mondelez

It was formed in 2012 as result of spinoff

of Kraft foods

World leader in sales of chocolate, Gum,

Biscuit, Candies, Coffee & powdered
beverages

Serving in 165 countries

Brands?

Kraft foods group Inc.

One of the Largest consumer packaged

food company in North America

Operations are only restricted to North

America

Brands like Jell-o, Maxwell House &

Velveeta

General Mills

Formed in 1866

Deals in cereals, Yogurt, baking, soup,

snacks & ice cream

Hershey Company

Formed in 1894

Largest chocolate producer in North

America as well as globally

Have more than 80 products, famous

are Hersheys Reese, Hershey Kisses &
Ice breaker

Kellogg

Founded in 1906

Worlds 2nd largest savory snack

business after General Mills

Frosted Flakes, Pop-Tart & Keebler

Financial Analysis

P/E ratio of industry

Current year

Future forecasted 5
yrs

Industry P/E

18.77x

15.1x

Mondelez

20.1x

11.7x

Kraft Food

17x

17.4x

General mills

16.5x

14.6x

Kersheys

25.8x

19.7x

Kellogg

15x

14.7x

Ratio Analysis Of Industry

2015( 1st Quarter)

2014

Quick ratio

0.22

0.265

Leverage ratio

2.73

1.66

Total debt to equity

1.56

0.81

Gross margin

34.16

19.02

Debt coverage

0.26

0.40

Other ratios

Price/Sales ratio
current

2014

1.99

Price/Book value
current

2014

6.57

3.425

Price/cashflow
current

2014

24.58

18.40

Company
Analysis

NonFinancial
Analysis

Deals in confectionery items

Famous brands like Cadbury, Oreo,
Trident etc

Sales
power brand

other brand

38%
62%

Position in world by category

products

North
america

europe

Latin
americ
a

Asia
pacific

Eastern
europe

Middle
east

global

Share

Biscuits

18%

Chocolate

15%

Gum

30%

Candy

7%

Coffee

11%

Powered
beverages

16%

Revenues from BRIC

1.
2.
.
1.
2.

Brazil
$+2 billion revenue
80% snacks, 15% beverages, 5%
cheese & grocery
Russia
$+1 billion revenue
70% snacks, 30 % powdered
beverages


1.
2.

.
1.
2.

India
$+0.7 billion revenue
80% snacks mostly chocolate, 20%
beverages(malt)
China
$0.8 billion revenue
80 % snacks mostly biscuits, 10%
beverages

Future plans of the company

Future plans of the company

Future plans of company

The company has been building a $190 million plant in Andhra

Financial Analysis

Price to earnin

2017

17.68

2016

19.28

2015

22.31

Dec,
2014

30.23

Sep,201
4

June,
2014

March,
2014

17.58

18.52

17.15

Dec, 2014

Sep, 2014

June, 2014

March, 2014

2.36

1.93

1.99

1.87

Price to sales

Dec,2014

Sep,2014

June,2014

March,2014

1.92

1.71

1.84

1.68

Dec, 2014

Sep, 2014

June, 2014

March, 2014

34.04

12.48

13.62

12.71

2014

2013

2012

2011

36.79%

37.14%

37.34%

36.58%

2014

2013

2012

2011

-2.99%

0.81%

-2.22%

13.72%

$34,244 million

$35,299

$35,015

$35,810

Ratio Analysis

Quick Ratio
Dec, 2014

Sep, 2014

June, 2014

March, 2014

0.12

0.12

0.14

0.16

Working capital Ratio

Dec, 2014

Sep, 2014

June, 2014

March, 2014

0.84

0.88

0.88

0.89

Debt to equity
Dec, 2014

Sep, 2014

June, 2014

March, 2014

0.6

0.58

0.57

0.6

Leverage ratio
Dec, 2014

Sep, 2014

June, 2014

March, 2014

1.4

1.27

1.25

1.31

Dividend payout
2014

2013

2012

4th quarter

$0.15

0.14

0.29

3rd quarter

0.14

0.13

0.29

2nd quarter

0.14

0.13

0.29

1st quarter

0.14

0.13

0.29

Earning per share

2017

2016

2015

2014

2013

2012

2.10

1.97

1.28

2.19

1.71

2017

2016

2015

37.12

38.56

44.03

Recommendations

economy
growth
which isis3%
economic
scenario
of rate
US market
very much favorable for the company
the inflation
economy
growth
rate which
rate which
2.4%isis3%
normal in the US economy as compared to th
economic
the inflation
scenario
rate
ofwhich
US market
2.4% is very
normal
much
in the
favorable
US economy
for theas
company
compared to th

Recommendations

Recommendations
negative trend in food inflation somehow shows good affect on the company

Recommendations
gradual increase in the disposable income will positively affect

Recommendations


1.
2.
.

current growth of the industry is 3.7%

investor will invest accordingly by
observing the growth rate
Mondelez should realize the growth
rate into their revenues in future
next market for the packaged food
industry should be the Brazil, china,
Russia & India

Recommendations

Recommendations

Recommendations
forecasted P/E for industry is 15.1x and