The Wall Street Journal - 31.07.2019

B2| Wednesday, July 31, 2019 *** THE WALL STREET JOURNAL.**

INDEX TO BUSINESSES

These indexes cite notable references to most parent companies and businesspeople in today’s edition. Articles on regional page inserts aren’t cited in these indexes.

A Activision Blizzard......B7 Alibaba Group.............B2 Allied Esports International.............B7 Alphabet.........A2,B1,B12 Altria Group................B5 Amazon.com .............A1,A2,A6,B1,B13 Apple.........A1,B2,B4,B13 B Bank of America.......B11 Bayer...........................B3 Beyond Meat.............B13 C Cadillac Fairview.........B6 Campbell Soup..........B13 Capital One Financial ........................A1,A6,B12 Coffee Day Enterprises .....................................B1 Comcast.......................B7 Crown Resorts............A9 D DoorDash.....................B3 Dragoneer Investment Group.........................B6 F Facebook................A2,B1 Flutter Entertainment ...................................A11 Ford Motor................B12

G General Motors.........B12 Goldman Sachs GroupB6 GrubHub......................B3 H Hershey.......................B2 Hill's Pet Nutrition.....B1 Huawei Technologies ............................... A2,B4 J Juul Labs.....................B5 K Kinder Morgan..........B13 Kleiner Perkins Caufield & Byers...................B13 Koninklijke Philips......B1 M Mastercard..................B5 McDonald's..................B3 Merck............B5,B12,B13 MGM Resorts International.............B7 Microsoft.............B5,B13 Mondelez International .....................................B2 Monsanto....................B3 N Nestle..........................B2 Newell Brands.............B1 Nike.............................B5 Nintendo......................B5

O Obvious Ventures Management...........B13 Opendoor Labs............B6 P Peloton Therapeutics.B5 Procter & Gamble ........................B1,B2,B12 R Realogy Holdings........B6 S Samsung Electronics..B4 Simon Property GroupB7 Slack Technologies.....B6 SN Technologies.......A13 SoftBank Vision Fund B6 Sony.............................B5 Sotheby's....................B5 Sprint..........................A3 Starbucks....................B3 T The Abraaj Group.....B11 T-Mobile US................A3 U Uber Technologies.B3,B6 Under Armour......B5,B12 Unilever.......................B2 W White Castle System.B3 X Xiaomi.........................A2

INDEX TO PEOPLE

BUSINESS & FINANCE

as well. The company said in 2017 that it was persuading more manufacturers to cut excess space and materials to save time and money on shipping. Companies need a consulting firm to certify that their packaging meets Amazon’s new standards. One consulting firm said about 15% of the packages it has tested needed to be redesigned. Amazon offered a $1 credit to producers for each item sold in packaging that met the new standard ahead of dead- line. Companies that haven’t complied by Aug. 1 will face a $1.99 surcharge on each item sold in packaging that runs afoul of the new standard. Brands that adopt more efficient packaging stand to ben- efit from lower shipping costs and Amazon does as well, said Mike Kuebler, technical direc- tor and packaging specialist at Smithers Pira.

Philips Norelco OneBlade cut packaging volume by 80% to comply.

STEPHANIE AARONSON/THE WALL STREET JOURNAL

nomic slowdown around the globe. Competition from startups and the increasing assortment of store-brand products is in- tense in many markets. Still, Procter & Gamble Co. reported strong sales growth for its latest quarter on Tuesday. Hershey Co. said a price increase helped results in the second quarter, and it now plans another increase cover- ing its chocolate bars. Nestlé SA and Unilever PLC, the maker of Hellmann’s mayonnaise and various ice- cream brands, both said organic sales rose in the first half of the year. Mondelez’s second-quarter organic sales increased 4.6%. In Europe, the company’s larg- est market, those sales increased 3.9%, aided in part by Easter-related sales. In the U.S. and Canada, organic sales rose 2.5% as the company raised prices, but volumes weakened. “The developed markets are showing an acceleration,”

Chief Executive Dirk Van de Put said in an interview. Like other food manufacturers, Mondelez also faces higher costs. Mr. Van de Put said it has raised prices in the U.S. as expenses for transpor- tation, packaging and ingredi- ents have risen.

Revenue at Mondelez dropped about 1% in the quarter from the year earlier pe- riod to $6.06 billion due to currency fluctuations. Revenue was slightly ahead of expectations from analysts, according to FactSet. The company reported gains from e-commerce sales channels and in emerg- ing markets. Mondelez has sought to

grow its Oreo business in China, where it worked with a unit of Alibaba Group Hold- ing Ltd. to introduce in March an augmented-reality game fo- cused on the cookies. In the U.S., the company rolled out an Oreo earlier this year with more filling. It has been developing new Cadbury bars and created a chocolate spread sold in India. The company has also been tweaking its portfolio, aiming to focus on snack products it believes have strong growth prospects. Earlier this month, the company completed its ac- quisition of a majority stake in a refrigerated protein bar product. In May, it sold its cheese business in the Middle East and Africa. Mondelez reported a profit of $807 million, or 55 cents a share, for the second quarter, up from $318 million, or 21 cents a share, the year earlier. The company’s adjusted profit of 57 cents a share was in line with expectations from analysts.

Cookies and milk-chocolate products helped to bolster Mondelez International Inc.’s sales in the second quarter, leading the snack maker to push up its forecast for the year. Mondelez said Tuesday that Oreo cookies and its Cadbury Dairy Milk offerings posted gains in the quarter, as did Nutter Butter cookies, one of its smaller brands in the U.S. Mondelez now expects organic revenue—a figure that strips out the effects of currency fluctuations, acquisi- tions and divestitures—to rise more than 3% this year, up from a prior outlook of a 2% to 3% increase. Shares rose about 1% in aftermarket trad- ing Tuesday. Food manufacturers and companies that make house- hold and personal items have been reporting higher organic sales, helped by consumers who continue to spend despite worries about a broader eco-

BYMICAHMAIDENBERG

Mondelez Raises Yearly Outlook

The snack maker’s revenue dropped about 1% in the second quarter from a year ago to $6.06 billion due to currency fluctuations.

LOIC VENANCE/AGENCE FRANCE-PRESSE/GETTY IMAGES

4.6% Increase in the company’s organic sales in the quarter

the retail giant’s platform, he expects Amazon to keep push- ing brands to change packaging and other aspects of their business in ways that are best suited to its own evolving strategy. Amazon has been trying to make packaging more efficient for more than a decade. Its ex- panding e-commerce footprint is consuming more cardboard and plastic packaging. Now, Amazon is trying to address consumer calls to cut back on waste while reducing excess weight and volume to generate savings on shipping

Continued from the prior page

Amazon

Sets Rules

On Boxes

ther misbehavior or make vic- tims whole. “That second one is out the window—no one is getting their information back,” Ms. Minow said. “As for the first one, you have to add another zero onto it to make it painful enough.” FTC Chairman Joe Simons called the $5 billion Facebook fine significant compared with prior U.S. and global privacy penalties. “The enormity of this penalty resets the base- line for privacy cases and serves as an important deter- rent for future order viola- tions,” he said in announcing the penalty. This spring, European antitrust regulators fined Google $1.7 billion amid allegations that the search engine pre- vented rivals’ ads from dis- playing on some web pages. The total amounts to 1.5% of Alphabet’s 2018 operating expenses, or less than a week’s worth. Alphabet reported holding

about $16.6 billion in cash and equivalents at the end of June, as well as $104.5 billion in marketable securities. In addition, a $5 billion fine imposed in July 2018 by the European Union’s antitrust regulator, which said Google had abused the dominance of its Android operating system to promote its search engine, was just under 17 days worth of operating expenses. And a June 2017 fine of $2.7 billion by EU antitrust regulators over Google’s comparison- shopping service was the equivalent of 12 days worth. An Alphabet spokeswoman declined to comment. This spring, Alphabet stressed its cooperation with European regulators and said it would let Android users in Europe choose which browser and search apps they use. At the time of the earlier European penalties, Alphabet said the decisions ignored competition between its An-

droid operating system and Apple ’s iOS and underesti- mated the value users get from its shopping ads. For both Facebook and Al- phabet, the penalties are smaller when measured against the total value of the companies, rather than annual operating expenses. Facebook’s recent fines combined amount to about 0.9% of the company’s recent market capitalization, which is $562.1 billion based on Tues- day’s closing share price, and just under 6% of its stockholders’ equity—a measure of cor- porate net worth that repre- sents the difference between a company’s assets and its liabil- ities. Alphabet’s $9.4 billion in EU fines equate to about 1.1% of its recent market capitalization, which is $860 billion based on Monday’s closing share price, and about 4.9% of its stockholders’ equity as of June 30.

had inadequately warned investors about misuse of user data, works out to just over a single day’s operating expenses. A fine over privacy viola- tions, imposed by the U.K.’s In- formation Commissioner’s Of- fice in October—valued then at $645,000—amounts to about 11 minutes of operating expenses. A Facebook spokeswoman declined to comment about the settlements, and the company agreed to settle the FTC and SEC investigations without ad- mitting or denying guilt. After the U.K. penalty, Facebook said it disagreed with some of the agency’s findings but acknowl- edged it should have done more to investigate and act on complaints years before. In a news release about the FTC settlement, Facebook de- scribed its handling of the privacy issues that gave rise to the FTC investigation as “a breach of trust between Face- book and the people who de- pend on us to protect their data.” Facebook has said other aspects of the settlement—in- cluding terms requiring the company to document and as- sess potential privacy risks and Chief Executive Mark Zuckerberg to certify that the company is meeting its privacy commitments—are more significant than the fine. “We have a responsibility to protect people’s privacy,” Mr. Zuckerberg said in a post last week on the company’s social- media platform. “We already work hard to live up to this responsibility, but now we’re go- ing to set a completely new standard for our industry.” Nell Minow, vice chair of ValueEdge Advisors, a corpo- rate-governance consulting firm for investors, noted that financial penalties typically are meant to discourage fur-

Big Fines

Cause

Little Pain Facebook fines as a share of the company's annual operating expenses...

Operating expenses

About 11 minutes

1.2daysto equal fine

...and Alphabet’s fines

Even large financial penalties can seem modest when compared with the finances of the huge companies on which they are imposed.

Reason

Operating expenses Note: Non-U.S. dollar values converted to U.S. dollars based on exchange rate when penalties were announced. Expense comparison is to nearest reported full-year results, averaged over 365 days a year, 24 hours a day. Sources: the companies(operatingexpenses);the agencies(fines)

Penalty date July 24, 2019 July 12, 2019 Oct. 24, 2018

Reason Privacy disclosures

Cambridge Analytica Privacy missteps

Amount $100 million $5 billion $645,000 SEC U.K. Information Commissioner Agency FTC

0.32% 16.17%

GDPR

About 4.5 hours

0.05%

—

59 days

Comparison shop

11.6 days

3.20%

Limit rival ads

5.6 days

1.54%

Agency French antitrust EU antitrust EU antitrust EU antitrust

Penalty date January 2019 March 2019 July 2018 June 2017

Android

Amount $56.8 million $1.7 billion $5.0 billion $2.7 billion

16.5 days

4.52%

A Abdel-Wadood, Mustafa ...................................B11 B Banga, Ajaypal............B5 Baumann, Werner.......B3 Brown, Ethan............B13 C Cruz, Shawn..............B12 D Drahi, Patrick..............B5 F Frisk, Patrik................B5 J Jia, Mo........................B4 K Kinahan, JJ................B12

L Liang, Howard.............B4 M Minow, Nell.................B2 Moeller, Jon................B1 N Naqvi, Arif.................B11 Nickl, Wolfgang..........B3 P Plank, Kevin................B5 Preston, Tom.............B12 Purdy, Andy.................B4 R Reddington, Matt.......B1 Reffkin, Robert...........B6 S Salisbury, Julian.........B6

Siddhartha, V.G...........B1 Simons, Joe................B2 Smith, Tad...................B5 Solomon, David...........B6 Stirewalt, Bryan.......B11 Stritch, Michael........B12 T Thompson, Paige........A1 W Walker, Lovell.............B7 Willard, Howard..........B5 V Van de Put, Dirk.........B2 Y Yu, Geoffrey..............B12 Z Zuckerberg, Mark.......B2

roughly three-quarters of its operating profit from chip sales. Following a series of re- cord profits in 2017 and 2018, Samsung saw its win- ning streak end late last year when demand from smart- phone makers and data- server companies fell, leading to lower memory-chip sales. To diversify beyond memory chips, Samsung said in

April it would invest $116 billion by 2030 in other semiconductor areas, seeking to tap into new growth driv- ers. Samsung said its display business received a one-time gain in mobile displays. Analysts have expected the company would receive compensation fees from Ap- ple, which uses some of Sam- sung’s flexible displays in some of its iPhones. On Tuesday, Apple reported iPhone sales had declined 12% for the three months ended June 29. Tokyo’s recent moves to slow shipments of certain chemicals to South Korea took effect July 4, so the financial impact won’t be felt until Samsung reports results for the current quarter.

Samsung

Earnings

Fall 53%

The Wall Street Journal - 31.07.2019

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