Mondelez International, Inc. Q4 FY2024 earnings call

Business Performance

• 2024 was strong with mid-single digit top line growth, strong earnings, and robust free cash flow. Reinvested in brands, distribution, and capabilities.

Strategic Initiatives

• Iconic brands (e.g., Oreo, Cadbury Dairy Milk) had successful activations. Expanded e-commerce, launched new price packs, and advanced portfolio reshaping (e.g., majority stake in Evirth).

Sustainability

• 90% cocoa sourced via Cocoa Life, reduced carbon emissions, 96% recyclable packaging, and focus on mindful snacking.

Market Insights

• North America: Biscuit brands regaining share; new price packs showing promise. Europe: Solid growth despite customer disruption; Q4 profit hit by cocoa cost ramp. Emerging Markets: Solid category growth; Mondelez share improving in biscuits and chocolate.

In 2024, Mondelez delivered organic net revenue growth of 4.3% and adjusted gross profit dollar growth of 5.1%. Product segments: Biscuits grew 1.7% for the year and 2.1% for the quarter; Chocolate grew 7.4% for the year and 8.9% for the quarter; Gum and Candy grew over 7% for the year and nearly 9% for the quarter. Regional performance: Europe grew 5.7% for the year and 7.4% for the quarter; North America grew 1.5% full year, Q4 0.4%; AMEA grew 6.2% year and 8.6% quarter; Latin America grew 4.6% year and 4.9% quarter. Revenue contribution: Brands like Oreo, Cadbury Dairy Milk, etc., contributed to growth across segments.

2025 Outlook

• Top line expected ~5%. Adjusted EPS expected to decline ~10% due to unprecedented cocoa costs (excluding JDE Peet's equity income). Plan includes robust RGM, marketing/sales execution, targeted cost savings, and hedging. Expect free cash flow ~$3 billion plus. Note potential 25% tariffs on U.S. imports from Mexico and Canada as a headwind.

2026 Outlook

• Goal is EPS growth, depending on cocoa price trends. If cocoa comes down, higher earnings upside; if elevated, more pricing needed.

• Cocoa Price Volatility: Elevated cocoa prices pressuring P&L, esp. in chocolate. - Economic/Political Uncertainty: Impact on consumer confidence, purchasing power, and market conditions. - Tariffs: Potential 25% tariffs on U.S. imports from Mexico and Canada creating additional headwinds.

Q: How has cocoa price volatility impacted strategy and European business?

A: Dirk discussed protecting chocolate category, managing pricing, and supporting brands. Europe has stable consumer confidence, solid category growth.

Q: North America biscuit category health and 2025 expectations?

A: Dirk noted softer category, but share gain, lower price points, and activations expected to drive volume growth in 2025.

Q: Cocoa price sustainability and earnings path?

A: Luca mentioned monitoring cocoa supply/demand, expecting eventual price decline, and plans to adjust pricing and P&L accordingly for EPS growth in 2026.

Q: Supply chain productivity program in 2025?

A: Dirk mentioned a ~4% gross productivity target for supply chain.

Q: Snack category shift due to health/GLP-1?

A: Dirk stated no significant shift in snacking due to health or GLP-1, with indulgent and healthy parts growing.

Q: EPS guidance and path back to high watermark?

A: Luca explained EPS expected decline in 2025, but commitment to EPS growth in 2026 depending on cocoa price and pricing actions.