Good day and welcome to the Mondelēz International Second Quarter 2018 Earnings Conference Call. Today's call is scheduled to last about one hour, including remarks by the Mondelēz management and the question-and-answer session. I'd now like to turn the call over to Mr. Shep Dunlap, Vice President, Investor Relations for Mondelēz. Please go ahead sir.

Good afternoon and thanks for joining us. With me today are Dirk Van de Put, our Chairman and CEO; Brian Gladden, our outgoing CFO; and Luca Zaramella, our CFO beginning August 1. Earlier today, we sent out our press release and presentation slides, which are available on our website, mondelezinternational.com/investors. During this call, we'll make forward-looking statements about the company's performance. These statements are based on how we see things today. Actual results may differ materially due to risks and uncertainties. Please refer to the cautionary statements and risk factors contained in our 10-K and 10-Q filings for more details on our forward-looking statements. Some of today's prepared remarks include non-GAAP financial measures. Today, we'll be referencing our non-GAAP financial measures unless otherwise noted. You can find the GAAP to non-GAAP reconciliations within our earnings release and at the back of the slide presentation. And with that, I'll now turn the call over to Dirk.

Thank you, Shep. Good afternoon and thank you for joining us. We delivered a strong second quarter building on the momentum we saw in the first quarter. We generated solid topline growth, strong margin expansion and double-digit EPS growth. Organic net revenue grew 3.5% driven by both positive volume growth and solid pricing. This includes a positive impact from lapping last year's malware incident. Our growth was broad based across our regions and categories. This revenue growth translated into a strong bottom-line performance. Adjusted operating income grew more than 10%, and margin expanded to 16.7%, up 130 basis points. Adjusted EPS increased almost 15% at constant currency. We remain encouraged by industry trends. Snacking growth is improving globally and our categories are up above 3%. It's particularly encouraging to see that this growth was coming from both developed and emerging markets. As you know, we have a broad geographic footprint and generate a significant majority of our revenue outside of North America. In a majority of countries around the world, we have a leading position in the highly attractive snacking category as we have a stable of iconic global and local brands. Seeing our categories grow largely everywhere around the world gives me confidence in our ability to drive growth going forward. As I've said over the past eight months, the key to unlocking more value for our shareholders is based on two simple core concept: putting the consumer at the center of everything we do and executing with excellence every day. These concepts are fundamental to our strategy and our long-term growth framework which we will talk about in September. Now, I'd like to highlight a few areas that demonstrate strength and continued progress across our geographies and categories. Starting in Europe, we delivered another solid quarter with strong…

Thanks, Dirk, and good afternoon. We delivered solid topline and bottom line results in the second quarter. We continued to see positive momentum in most of our markets and posted broad-based revenue growth across regions and categories. Organic net revenue increased 3.5% driven in large part by volume growth and balanced pricing. This includes approximately 160 basis points relating to three factors: the positive effect of lapping last year's malware event, the negative impact of the Easter shift into the first quarter and the negative impact from the trucker strike in Brazil during this quarter. Similarly, for the first half, our organic net revenue growth was 2.9% including approximately 100 basis points from the previously mentioned items. Both developed and emerging markets continued to perform well for us during the quarter. Our developed markets were up 2.5% in the quarter while our strong emerging market footprint continued to deliver for us, with organic net revenues increasing 4.7% with positive volume growth. On a regional basis for the quarter, Europe's organic net revenue increased 2.8% and was volume driven. We continued to deliver strong results in the region with notable growth in key countries like Germany and Russia which both grew double digits in biscuits and chocolate. AMEA grew 1.7% driven by double-digit growth in India and solid growth in China. This strength was tempered by a weaker Ramadan season in the Middle East and soft results in Australia. Latin America grew 3.8% with mid-single-digit growth in Mexico and currency driven pricing in Argentina. This was partially offset by the impact of the trucker strike in Brazil that lasted 11 days during May and early June which resulted in shipping delays and lost consumption. North America increased 5.7% which reflects the lapping of last year's malware incident. Growth was driven by…

Thanks, Brian. Good afternoon, everyone. It's a great honor and privilege for me to be the next CFO of Mondelēz. I have a great belief in this company and I am excited to take on this role after over two decades of building my career working across the company. I've had the opportunity to see emerging and developed markets across Europe, Latin America as well as in North America in corporate. I'm happy to be working with Dirk and excited to enter the next phase of this company. I have personally learned a great deal from Brian and benefited from his leadership and counsel over the past few years, and I look forward to getting to know those on the call over the coming months and quarters. I'll now turn it over to Dirk for some closing comments.

Thanks, Luca. Thanks, Brian. In closing, while we continue to see some volatility across a few emerging markets, we feel very good about the progress we've made in both developed and developing markets. Our business in Europe continue to perform well, and while there is more work we need to do in North America, we are working hard to drive improvement in the region and seeing progress. Developing markets across AMEA and Latin America have mostly improved over the past several quarters except for Brazil, which is expected to remain challenging over the near term. I am encouraged by the momentum that we are seeing in the business and with the strong first half results. We're making good progress with our strategic review and are looking forward to sharing this work in early September. And with that, let's open the line for questions.

Your first question comes from the line of Bryan Spillane with Bank of America.

Hey. Good afternoon, everybody. And, Brian, I want to wish you all the best going forward. It's been a real pleasure working with you, and Luca looking forward to working with you as well.

Thanks, Brian.

Thank you, Brian.

So, I guess I have two questions relative to the revenue outlook balance of the year. First, I guess in North America, how much progress or how comfortable you feel now that you've got service levels back to the sort of levels that you'd expect going forward, meaning you've got back to full service levels? That is the first. And then, second, I guess, as we're looking over the balance of the year, I understand the Brazil piece is – it could be a little bit challenging. But it just seems like with the momentum in the category getting better and the momentum potentially set up for improvement in North America as we go forward that why not go above the high end of the range on the organic revenue growth guide?

Thank you, Bryan. I think you touched upon the two areas that, clearly, for the rest of the year require attention from our side. As it relates to North America, yes, we have made some progress. Our supply chain, which is one of the key things that we needed to work on and improve, has shown some good customer service results in the second quarter. And we're seeing some good momentum also from our DSD system. It remains, however, a system that still has a few old plants in there, which are a bit finicky, so we feel good, but we need to keep on confirming for the rest of year that we have things under control, so we're a bit cautious. At the same time, we do see an increasing momentum in the categories in North America and our share performance within that has been better in the sense that biscuits is accelerating and we have increased a little bit our share. And as it relates to gum, the category is doing better and our share decline has improved a little bit. So, yes, we are having a stronger topline. If you take out malware, we're now clearly in positive territory in North America. At the same time, for the remainder of the year, I would say that the comparisons are going to become more difficult because, as you will remember, the third quarter had a positive effect last year from malware, and just overall the comparisons become more difficult. So we feel good about our forecast for North America in the remainder of the year, and we want to see what next quarter brings us before thinking through if it should be higher.

Okay. Thank you.

Yeah. And maybe about the total company, clearly, we are encouraged by the evolution of the topline over the last three quarters and, as we said in the opening remarks, quite pleased about the fact that it is broad-based both in terms of categories and regions. Also pleased by the volume and price balance that we see. And in general, as you saw, we are improving our revenue outlook for the year. In totality for the company, though, we want to remain thoughtful about the second half. There are still some elements of volatility in emerging markets, like Brazil, as we said. North America, good progress, as we've said but improvement is going to be gradual. And in terms of comparison, we're lapping higher growth in the second part of last year and also malware was a positive effect specifically in Q3 last year.

Your next question comes from the line of Andrew Lazar with Barclays.

Good evening, everybody, and all the best to you, Brian.

Thanks, Andrew.

Wanted to follow up, Dirk, a little bit, I think you'd mentioned in the previous answer that the DSD system was starting to see some building momentum. And I'm just trying to get a sense of are there any, I guess, specific metrics that you can point to as of yet that sort of tell you that the company is starting to see maybe what could be a sort of sustainable or substantive advantage from having DSD vis-à-vis competitors that don't just because of all the malware issues? It seems that that's not obviously been able to be leveraged perhaps in a way that you'd like it to be over the last year.

Yes, Andrew. Well, of course, the best measure for us is our share performance that this – what will give us the clearest measure. We also, of course, look at our customer service and things like out-of-stocks and so on and that is clearly improving for us. And I think also the fact that we are much more clear on our communication about the fact that we do believe in DSD and we think it can be a differentiator for us, that has caused us to get more confident in our themes (25:51). If we go a little bit deeper, the things we typically look at is the number of displays that we have, what's going on with our share of shelf. And there we see a clear improvement and clear increases. So those are the different factors that we look at to be able to understand how DSD is doing for us.

Got it. Thank you for that. And then, Brian, gross margin came in quite a bit better than we had modeled. Is part of that just that, I guess, the more positive mix effect from a stronger developed market performance in this quarter partially because of lapping malware as opposed to anything else because it sequentially improved quite a bit in terms of the year-over-year improvement?

Yeah, Andrew. That's part of it. Up 60 basis points, we feel pretty good about it. And I think we've been saying it as we move through the year that we expected to see gross margins get a bit better and we still expect them to be up for the total year. I would say mix has been helpful. Net productivity and the supply chain execution actually was good in the quarter. Sequentially, we had commodities moving in the right direction. As we said we had hedges that we're rolling off, gave us access to lower priced cocoa. That was helpful sequentially. Dairy pricing, we've now pretty much got covered with pricing – or dairy increased inflation we have covered with pricing. And then volume leverage, I think, overall has contributed better absorption and better overall margin. So I think those are the key drivers. And as I said, we feel good about in the 70% commitment for the year that gross margins will still be up year-over-year, so good progress in the quarter.

Thank you.

Thanks, Andrew.

Thank you.

Your next question comes from the line of David Driscoll with Citi Research.

Hey. Thank you and good evening. I wanted to ask about the non-Power Brands. I think in the quarter, you guys – but correct me if my math – because you don't actually print this on the slides, but I think maybe growth of the non-Power Brands was maybe a little bit less than 1%. Dirk, now that you've been with the company for a while, can you give us some comments as to what you see is the role of these non-Power Brands? Should they be kind of flattish or low growth? And do you need to invest more in them to get them moving? And then just kind of the final point on this question is, if the answer is not positive to some of those then perhaps some of these should be divestiture candidates, as they would enhance the revenue growth on the residual business. I'd appreciate your thoughts.

Yes, David. I would say the – and this is a little piece of what we're looking for at the new strategy and we will talk more about it in September. But the way I look at it is we are a company that is composed of Power Brands, which are global brands that are clearly on trend and that are doing well and provides the majority of our growth. But we have also a number of other brands, largely local brands. And those you can indeed divide up in two categories. There's the ones that are quite lost that have potential. They can play in authenticity or a health and wellness role. And we probably have not invested enough in them. And that's one of the areas where we are trying to make the change. And then there is probably a number of them that are not as appealing and that really don't have a clear future. And yeah, we need to see what we need to do with those. You start to see already a little bit of that. Europe has started to shift some of their investments into some of those local brands and we're getting some good traction from that. So I don't think they're going to grow 3%, 4%. But to see them somewhere around 1%, maybe a little bit above that, on an ongoing basis, we would be quite happy if that is what these brands are going to do for us.

Thank you. And then one follow-up. On the emerging markets, I think if I read the data right, volumes were down. How concerning is this? And do you expect volume growth to be positive for the emerging markets in the second half?

I think when you look at that, take into consideration the fact that in those numbers, there are a couple of drivers, one is Argentina, where clearly we price according to inflation and there is a volume implication there. The other one that came into play in the quarter, it is in the Philippines where we had to price for a beverage tax. And the pricing we took was quite high. It was around about 100%, so there was a volume impact. But we are quite pleased to see the likes of China, India, and Russia actually growing volume. And so in general, I would say, as you strip out some of the outliers I've just mentioned, we feel quite good with the volume momentum we see even in developing markets.

And David, if you look at emerging in total, vol mix was positive, up 1% in the quarter.

Great. Thank you very much and, Brian, thanks for everything and good luck.

Thank you.

Your next question comes from the line of Jason English with Goldman Sachs. Jason English - Goldman Sachs & Co. LLC: Hey. Good evening, folks.

Hi, Jason.

Hi, Jason (31:19). Jason English - Goldman Sachs & Co. LLC: Hey, guys. I'll just echo the sentiment, Brian congratulations, and it's great to see you walk out on a high note with the company kind of humming overall.

Thank you. Jason English - Goldman Sachs & Co. LLC: In terms of the performance, it's great to see the sales accelerating. I know there's some noise in there. I think the disclosure in your slides, about 160 basis points of benefit this quarter on organic. Kind of dialing that back around 1.9%, I think for the quarter and for the year-to-date if we strip out that noise, which is relatively solid. But if we compare it to your end market growth of 3.1%, you're still lagging by around 100 basis points which is about where you've been lagging for the last few years. Yet you're showing your percentage of sales at least in snacks that are gaining or holding, materially improving 65%. We haven't seen that I think since maybe 2013. What's the disconnect with those two data points? Why is your market share number kind of getting better? I presume the answer is – because that 35% that's losing is substantial. And if so, what are some of the drags? And how should we think about their impact going forward?

Yeah, Jason. It's Brian. I'll take it. And as you think about it, I think we sort of got the math at about 70 basis points disconnect between category growth and higher growth. And there's really two drivers. We are net-net still in aggregate losing some share. It's mostly in Brazil, U.S. gum contributes, and those are probably the two biggest. And then there's – as we talked about in the first quarter, there's an inventory trade reduction that played out in the North America business. Those are the two biggest drivers that would explain the delta. I'd say we feel pretty good about the fact that the share performance almost everywhere else in the world is actually improving and I think we see this gap closing over time. Jason English - Goldman Sachs & Co. LLC: Very good. That's helpful. You mentioned Brazil. Maybe you can elaborate a little bit more on there because as we listen to various companies, the messaging is kind of all over the place. So I'm suggesting it's better today than last year. So I'm suggesting it's still really choppy. What are you guys seeing in the marketplace? You kind of sound as somewhat cautionary note. Is that driven more by end market growth, more by market share? Can you just give us some more context and color around that?

Yes. I would say first of all Brazil is important for us as it probably is for some other companies too. It's about 6% of our revenue. And we certainly see heightened volatility. You had the truckers strike in this quarter, which has kind of thrown off the quarter, probably had about a $20 million impact on the topline. We think that was lost consumption as the product was not in the store and the consumer really couldn't get to the store. We don't think in a category like snacking that is going to come back. So that's going to affect the rest of the year. You've probably seen that the exchange rate also has started to move that is giving us some volatility. And there's also some social and political unrest in Brazil. So on the short term for the rest of the year, we're sort of expecting that the consumer confidence and the consumer behavior will be affected. And so we expect more disruption and bit of a difficult time for the second half of the year. On top of that, we have – and maybe we've reported on this a few times, we're doing quite well in biscuits and in gum. But in the chocolate markets, we've had some heavy competitive pressure. So we're faced with that also. Longer term, I think, yes, the observation that Brazil is doing better that the GDP is improving. And I would say probably over the midterm, we are more positive about Brazil. But I wouldn't dare to say that the second half of the year will already bring us a much improved situation. Jason English - Goldman Sachs & Co. LLC: Understood. Thanks a lot guys. I'll pass it on.

Okay.

Thanks, Jason.

Your next question comes from the line of Robert Moskow with Credit Suisse. Robert Moskow - Credit Suisse Securities (USA) LLC: Hi. I guess I'll ask about the cocoa cost comment. You said that hedges rolled over, Brian, which was a benefit to gross margin in the second quarter. But we're all kind of looking at cocoa cost as being inflationary. I know you have hedges that protect you for a while and protect Mondelēz for a while. So what's the outlook for when the costs start to get higher instead of lower for the margin profile?

Yeah. Look, I think Rob it's moved around a little bit. I mean it's actually down a little recently. When you look at it in the scale of sort of a five-year cycle of where cocoa has been, it's actually pretty reasonably priced. And we feel okay with that and we've been locking in a little bit longer than we otherwise would given that dynamic. It's going to be slightly favorable for us in the second half of the year sequentially and year-over-year. And then first half of next year, it feels about the same based on what we have kind of in place already. So we're not really worried about where cocoa is. It hasn't moved a whole lot. I'd say dairy has come down a little bit. And if you look more broadly, not a whole lot of new changes to the commodity environment for us in terms of our key commodities. Crude oil has obviously moved up and that affects us in some parts of our supply chain. But we've got some long-term hedges in place there as well. So I mean as we said coming into the year, commodity's relatively benign year-over-year and I would say that's still the case. I would say, as you would have heard from several other companies, clearly, there is some building inflation pressure in some other parts of the supply chain. When you look at logistics and packaging and even labor costs around the world, I would say that's looking to be more inflationary as you move over the next couple of years. And that's something that as we look at the strat plan and start talking about how we plan the business, we're going to have to take into account. But as you look at 2018, I'd say relatively benign right now. Robert Moskow - Credit Suisse Securities (USA) LLC: Can I ask you to opine on weak inflation also in your last conference call here as CFO?

Going forward or what we're seeing right now? Robert Moskow - Credit Suisse Securities (USA) LLC: What you're seeing right now.

Not a big challenge for us. Robert Moskow - Credit Suisse Securities (USA) LLC: Not a big challenge. Okay. Best wishes, Brian. Great working with you.

Thanks a lot, Rob.

Your next question comes from the line of Chris Growe with Stifel. Christopher R. Growe - Stifel, Nicolaus & Co., Inc.: Hi. Good afternoon.

Hi, Chris. Christopher R. Growe - Stifel, Nicolaus & Co., Inc.: And Brian, I'll add my congratulations as well. Wish you all the best.

(38:31). Christopher R. Growe - Stifel, Nicolaus & Co., Inc.: I want to ask if I could – sure – about emerging markets and discussion before about volume being up in emerging markets. I'm curious if you took out Brazil, how much of weight was that on sales growth for the quarter? Emerging markets are still pretty solid, just a little below where they were in the first quarter. So I'm just trying to get a little sense of how that one market might've really distorted the data this quarter?

Yeah. I think Brazil, clearly, was impacted by the trucker strike. We feel quite good about majority of the emerging markets. You look at Russia, Russia grew quite highly about 15% in the quarter. So it was quite a good number. We are gaining share. The categories are doing well. India the same, volume driven growth. China, mid single-digit growth. So, in general, as we look at developing markets, I think we feel quite good. So I would say that excluding Brazil and the couple of other markets, namely some markets in the Middle East, all the rest grew solidly in Q2.

Yes. Christopher R. Growe - Stifel, Nicolaus & Co., Inc.: Okay. And just a quick question if I could in relation to, some of the SG&A related savings, some of the benefit coming through to the operating margin, are those cost saving driven? I guess related to that, I'm curious if you're – are you moving some of your advertising dollars up to promotional spending still into (39:53) something you've done earlier in the year. I'm just curious how that's playing out and where you're investing those dollars.

Yeah. I'd say two things. I mean we continue to work overheads and ZBB continues to deliver for us. We are reinvesting some dollars within overheads into some growth activities. And then A&C, I'd say A&C is down slightly in the quarter, and I'd say mostly timing related. As we've said, we expect the total year to be roughly flat with 2017, and we'll probably have some higher spending in the second half of the year. Christopher R. Growe - Stifel, Nicolaus & Co., Inc.: Okay. Thank you.

Thanks, Chris.

Your next question comes from the line of David Palmer with RBC.

Thanks. Good evening, and all the best, Brian.

Thanks, David.

Dirk, just a follow-up to your answer to Jason's question on Brazil. It sounded like the trucking strike hit your shelf presence and the comment was or at least part of this was that that would have a carryover impact to consumption, am I getting that right? And does that mean the trucking strike is hurting certain players, like Mondelēz, more than others, meaning this is having a carryover effect to market share rather than just a category or a consumer issue?

No, no. What I meant is that during those 11 days, the consumer bought less product because on one hand there was less product available, on the other hand, since it was a massive issue, consumers didn't get to the store. Since we're in snacking and in foods market, if they don't have their cookies for today, they won't eat them and they won't catch up going forward. They will still consume going forward. But those 11 days, we probably have lost for the year. But there's no ongoing effect of consumption for us.

Shouldn't be an impact in the second half at all.

Okay. Got it. Thank you. And then just a follow-up on the comments you made about the Middle East and the weaker Ramadan season weighing on the India results. How much of the slowdown in the quarter was a transitory issue and what is your general outlook for that region? Thanks.

Well, I would say that if I look at AMEA overall, all the signs are very positive. For the first half, AMEA is up 2.7%. We have very good growth in India with double-digit. We have China, mid-single digits. South East Asia is also growing quite solidly. So it really boils down to the Middle East and Australia. Middle East, it has declined double-digits because of the category softness and also some of the economic conditions. The Middle East has been a tough region for us. For a longer period of time, a lot of the subsidies are gone and some of the competitors didn't price and so on. So on top of that, we were cautious with our Ramadan season. And so we see some effect of that. Australia also declined. That was due to Easter phasing, some challenging market conditions and increased competitive activity. I'm expecting Australia to come back. The Middle East, the softer Ramadan of course will not continue. But it's still a region where clearly consumer confidence and consumer spending is affected at the moment.

And I think, David, we managed the Ramadan fairly well, I mean to the point where I don't see a carryover inventory challenge with how we manage through Ramadan. I think we were cautious coming into the season.

Got it. Thank you.

Your next question comes from the line of Steve Strycula with UBS.

Hi. Two questions for me. One is a clarification on going back over Brazil. It's very clear that the consumption – the lost consumption for 11 days. But what I'm trying to get a better feel for is are you commenting that as a result of that strike, was your loss broader consumer confidence loss in that region that is impairing maybe out the door consumption trends for the remainder of the year along with politics and on a local and regional basis? Can you just clarify, if there's any broader underlying trend change for the consumer?

Yeah. No, I wouldn't say that I see a bigger effect on consumer confidence or consumer spending going forward. We do have a little bit of a devaluation, so that will affect consumer prices in Brazil. But apart from that, I think we remain cautious, but we do not see any signs that consumer offtake is affected in a major way. Of course, you have the elections that are coming up which causes usually some volatility, especially in the run-up to the election. So that's why we are a – for all those reasons, we are a little bit cautious at the moment. But at this stage, we don't see an effect on the consumer offtake.

Got you. And then getting back to a question that Jason English asked, to get to that end market, 3% category growth rate over the medium to longer term, does that require dipping into maybe some lower margin pockets of growth, lower ASP products to really capture that runway? Or do you not view them as mutually exclusive and if you fix the U.S. and fix Brazil that you should be able to find that runway and still be able to expand margins simultaneously? Thank you.

Yes, yes. We don't see the – the first thing you mentioned, we don't necessarily see that as a must to get to that 3% growth. I think if we can get the U.S. closer to the market growth and the same in Brazil, we should be very close to the 3% market growth.

Thanks, Steve.

Thanks.

Your next question comes from the line of John Baumgartner with Wells Fargo.

Hi. Good afternoon and thanks for the question. Brian, I wanted to come back to margins for a second and specifically gum and candy. And actually remember, Cadbury became pretty aggressive in attacking the overheads there prior to the acquisition. And now after owning the business for almost a decade, I also think you've done quite a bit in terms of getting the systems in back offices where they need to be. So can you just talk a little bit about how the cost structure benchmarks in the G&C business, where you see the opportunities for further margin expansion going forward and how we just think about the drivers there?

Yeah. Look, John, I think the gum and candy business continues to be a very high margin business for us. And I think as we've looked at it over time, there are some elements of that business that have a higher cost structure. I mean it's a more intense go-to-market model. The route to market costs more. But as you think about the core gross margins of the business, it's still a very good business. And I think over time, as we've seen the growth slow and the category shrink in some cases, we have taken some costs out. And we've worked to try and maintain those margins. So, it is still a contributor to the P&L. It still drives very strong cash flow, and it's still a good margin business. And I think over time, we have continued to take more cost out, and it has benefited from a lot of the bigger cost reductions and G&A reductions that we've done across the whole company as well.

Going forward in terms of the SG&A, what are you seeing of the further opportunities there? I mean is it more on the outsourcing side with the sales function or...?

For the whole company, John?

Yeah, just gum and candy.

Yeah. Look I think that will be a topic that I know that Dirk and Luca and the team will talk to you about how we think about gum. It's still in some markets. It continues to be a pretty important element of our go-to-market capability and the scale that we have in those markets. So I think there's places where there are opportunities to grow. And as you know that business in the emerging markets, those guys continue to show growth for us. So continued growth in some of the emerging markets with high margins, that's a good thing. But you can expect to hear more about that I think in September with the team.

Great. Thanks, Brian. All the best.

All right. Thanks, John.

And at this time, we have time for one more question. The final question comes from Ken Zaslow with Bank of Montreal.

Hey. Good afternoon, everybody. Brian, best of luck to you and congratulations.

Thanks, Ken.

And my question is just kind of layering on the last question was can you talk about the anecdotes or what you're doing in Europe to actually enhance the margins because – is it a closure of facilities, is there a utilization rate that you're actually improving, is it simple sourcing? It seems like there still is plenty of opportunity in Europe. So you can give – I know you don't want to go forward, but can you give some anecdotes and some history of where we're going with this and some of the examples of what you're doing?

Yeah, Ken. Look, it's – I think much of the agenda in Europe has been what we've talked about on a global basis, right. So supply chain reinvention, building capacity and capability with lines of the future that have lower conversion costs and more efficiency, we've obviously done that and added capability in Europe. We've also closed down some facilities and that's contributed as well. They have been as you've seen sort of the best example of a place where we've seen volume growth that's given us leverage in the P&L and that's helped the margins as well. Everything we've done with shared services and G&A reductions, Europe has done that too. So I think it's the broader global agenda coupled with volume growth and a good starting point from a competitive standpoint has really helped that business to shine. And as we look at the margins in the Europe business, they compare incredibly well to other peer companies in Europe and the team has done a very good job with that.

I agree with you. And I guess my point more than anything else is as the margins have expanded to the level they have and as you said they are exceeding your peers but it doesn't sound like there's really a limit or a near-term limit to them. Is that a fair way of thinking that or is there a reduction or a deceleration of margin expansion opportunities?

Well, I think there's a fair portion of that that's been the transformation of the company has contributed. So with a restructuring driven program that's taken a lot of cost out, we're obviously going to be in a different phase of the transformation and not have nearly the supply chain reinvention opportunity in a place like Europe. So I think the volume growth will continue to be the big lever point for them. And if we can grow on what is a competitive cost structure, I think you'll see margin expansion in Europe going forward.

Great. I really appreciate. Thank you, guys.

Thanks.

Well, I think we've reached the end. Thank you for dialing in. And again, I would like to thank Brian, wish him all the best. It was great to have him here, and as you can imagine, he's had a big impact on the performance of this company over the last four years. And I'm, of course, welcoming Luca and he's looking forward to work with all of you, and thank you for investing in the company.

Thanks everyone.

Thank you.

Thank you. This concludes the Mondelēz International second quarter 2018 earnings conference call. You may now disconnect.