Mondelez CEO Rosenfeld to Step Down -- 4th Update

By Annie Gasparro Features Dow Jones Newswires

Irene Rosenfeld is stepping down after 11 years as chief executive of Mondelez International Inc., as the snack giant faces pressure to improve sales and profitability amid an upheaval in the packaged food business.

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Ms. Rosenfeld struggled for years to draw more profit from Mondelez' broad portfolio of traditional snacks such as Oreos and Ritz crackers.

"In hindsight I think perhaps we could have gone after the costs a little faster," Ms. Rosenfeld said on Wednesday. "My regret is that we haven't fully realized the potential on the top line."

Now that work will fall to an outsider, Dirk Van de Put, head of Canada's privately held McCain Foods Ltd., who will take over for Ms. Rosenfeld in November. Ms. Rosenfeld, 64 years old, will continue as chair of the Mondelez board until she retires in March.

In an interview, Ms. Rosenfeld said she told Mondelez board members of her plans to retire about two years ago. "I didn't have a precise timeline, but I said that after about a decade is a good time to think about a transition," she said.

Mr. Van de Put, who has also worked for Danone SA, Coca-Cola Co. and Mars Inc., will be moving from a $7.3 billion maker of french fries and other potato products to a $66 billion conglomerate whose disparate brands stretch from Triscuits to Trident gum.

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"There's a real value in a fresh pair of eyes," Ms. Rosenfeld said, citing his experience at food companies on three continents, in both emerging and developed markets. Mondelez board members have been searching for Ms. Rosenfeld's successor since at least the spring.

Ms. Rosenfeld's retirement will shrink an already small pool of female chief executives of the biggest U.S. businesses. As of June, women held 28 of the CEO spots at S&P 500 companies, according to Catalyst, a research group, 5.6% of the total. Catalyst's tally reflects companies in that index as of January 2017. One woman cited among those 28 CEOs, Tegna Inc.'s Gracia Martore, retired in June. Her departure, and Ms. Rosenfeld's will decrease the total to 26.

Ms. Rosenfeld led Mondelez through several transformations. In 2010, she orchestrated the acquisition of British chocolate company Cadbury PLC for $19 billion. Two years later, she spun off Kraft, Oscar Mayer and other brands and renamed the remaining company Mondelez.

But the more focused company struggled to grow its stable of legacy brands, particularly in the face of economic turmoil in key emerging markets including China and Venezuela. "The single biggest factor was the change in the macro environment," Ms. Rosenfeld said.

Activist investors Nelson Peltz and William Ackman took big stakes in the company's stock and urged Mondelez to improve profit. Ms. Rosenfeld responded in part by cutting costs, closing or selling more than 40 factories. That helped boost the company's adjusted operating margin to 15.3% in 2016 from 12% in 2013. Mr. Peltz on Wednesday welcomed Mr. Van de Put's hiring and congratulated Ms. Rosenfeld on her efforts to improve profitability.

That work didn't entirely overcome broader headwinds facing food makers. Mondelez has faltered in volatile emerging markets and struggled to address consumer demands for fresher, healthier food.

Slowing sales have sparked consolidation and executive changes in the industry. Kraft in 2015 merged with H.J. Heinz Co. to form Kraft Heinz Co., which made a bid for Unilever PLC earlier this year. General Mills Inc., Hershey Co. and others have named new CEOs this year.

Mondelez sought to buy Hershey last year in a deal worth more than $25 billion. Ms. Rosenfeld walked away after Hershey rebuffed its advances.

In its second quarter, Mondelez delivered revenue of $5.9 billion and earnings of 48 cents a share. Analysts polled by Thomson Reuters expected 45 cents. Comparable sales in the quarter fell 2.7%, hurt by the impacts of a cyberattack. The company still expects to log 1% growth annually by that measure, with the help of new better-for-you food brands like Vea.

Shares in Mondelez, down 1.6% this year, were down less than 0.8% to $43.29 in morning trading.

Joann S. Lublin contributed to this article

Write to Annie Gasparro at annie.gasparro@wsj.com

(END) Dow Jones Newswires

August 02, 2017 11:40 ET (15:40 GMT)