lez International Inc (MDLZ.O) sought on Tuesday to convince investors that it can increase profit margins in the coming years despite volatile emerging markets, days after a second activist investor disclosed a stake in the maker of Cadbury chocolate and Oreo cookies.Mondelez reported a string of disappointing quarterly results since it was split from Kraft Foods Group (KRFT.O) in October 2012. Investors have called on the company to slash costs as the packaged food industry struggles to offset tepid global demand, volatile emerging market economies and changing consumer tastes.
"We've had lots of help over the last few months. The most common feedback was the need to address the fact that our margins were lower than peers," Mondelez Chairman and Chief Executive Irene Rosenfeld said at the Consumer Analyst Group of New York (CAGNY) conference in Boca Raton, Florida.
Rosenfeld told Reuters that Mondelez had met with more than 100 investors between October and December 2013. She said the company has not spoken to Jana Partners, a hedge fund known to push for corporate change, which revealed on February 14 that it held 4.6 million shares in the company.
Mondelez on Tuesday repeated its forecast for improving operating margin to a range of 14 percent to 16 percent by 2016, up from 12 percent last year.
Executives said supply chain improvement would be the main driver of the company's margin improvement and that it had already downsized, closed or sold 30 plants to date.
"We will close the gaps by 2016," Rosenfeld said of her company's lagging margins.
To bolster that effort, she said, Mondelez has retained Accenture, the consulting firm, to implement a zero-based budgeting system, where business units need to justify all costs each year.
Accenture has a reputation for creating some of the food and beverage industry's most stringent cost-cutting plans, used by companies owned by 3G, the Brazilian investment firm that bought fast-food chain Burger King and ketchup maker Heinz.
Rosenfeld admitted that the changes will take work. "There's no question it requires a maniacal focus from the top."
Mondelez in January added activist investor Nelson Peltz to its board in a compromise agreement that ended his campaign to have PepsiCo Inc (PEP.N) acquire Mondelez. Analysts expected the influential investor to separately lobby each company to improve their results.
