Seven months after it was hit by a malware attack, Mondelez International Inc. says recovery is taking more time than expected, pressuring the company as demand for its products ticks up.
The cyberattack will continue to weigh on the company's supply chains in 2018, CEO and Director Dirk van de Put told analysts during a call to discuss the company's fiscal fourth-quarter and full-year 2017 earnings Jan. 31.
The attack, which targeted encrypted data related to Mondelez's distribution system, weighed on the company's fiscal-year 2017 organic net revenue growth by 40 basis points, according to a news release summarizing the company's results.
"While we are making progress, returning to normal service levels is taking longer than anticipated," van de Put said, adding that "it will take a few quarters to see consistent improvement" in the company's North American business.
The attack hit Mondelez and consumer goods maker Reckitt Benckiser Group plc — among many other companies — in June 2017. In August, Mondelez said organic net revenue growth for its fiscal second quarter was 2.4 percentage points lower as a result of the malware's disruptions to product shipments.
North America represented the company's highest-margin region in 2017, CFO and Executive Vice President Brian Gladden said during the call, adding that the company hopes to improve results on the continent in 2018.
The malware attack will continue to be a drag on the company as markets improve for its products, which include Ritz crackers and Philadelphia cream cheese. During the company's fiscal fourth quarter, organic sales of Mondelez's "power brands" — a group comprising the company's largest labels, including Oreo sandwich cookies and Trident chewing gum — grew 3.7%. Organic net revenue growth rose 2.4% for the quarter across the entire company.
"We've seen good overall consumption trends in that business that have put more pressure on the supply chain," Gladden told analysts.
