Mondelez International, Inc. Q1 FY2025 earnings call

Business Update - Dirk Van De Put: - The company delivered solid first quarter results despite significant external volatility. Top line grew by 3.1% due to strong pricing execution in the chocolate business. Committed to the strategic agenda, focusing on controllables and staying agile in the macro environment. The chocolate strategy and cost savings program are on track. Iconic global brands like Oreo and Cadbury Dairy Milk are driving creative on-trend activations. Expanded distribution in emerging markets, achieved a top tier ranking on the Global Advantage survey. Made progress on sustainability, expanding Cocoa Life and reducing end-to-end carbon emissions. The chocolate strategy is on track with reconfigured portfolio, growing share, and innovating with new products. ### Financials - Luca Zaramella: - Q1 revenue grew by 3.1% with strong pricing in the chocolate business. Volume mix details included US trade destocking, Easter phasing, and package downsizing. Portfolio performance breakdown: Biscuits & Baked snacks, Chocolate, and Gum & Candy growth details. Regional performance: Europe, North America, AMEA, and Latin America growth and execution details. Cocoa insights: Prices remain elevated but spot and future curves have declined since the Q4 call. Outlook: '25 outlook for organic revenue, earnings per share, and free cash flow remains unchanged, with translation ForEx impacts changed and tariffs factored in, focusing on '26 with early positive results from the chocolate strategy.

Organic net revenue grew by 3.1%. Volume mix was down by 3.5 points due to elasticity, including factors like Easter phasing and retailer inventory destocking. Biscuits & Baked snacks had a 0.3% growth in the quarter, with brands like LU, 7DAYS, etc. showing growth but the US biscuits business being soft due to retailer de-stocking and lower consumer confidence. Chocolate grew by 10.1% with broad brand growth across global and local brands. Gum & Candy grew by 1%, driven by Gum in China and Mexico and both Gum & Candy in Western Andean. Regionally, Europe grew by 8.9%, North America declined by 3.6%, AMEA (Africa, Middle East, Asia) grew by 1.8%, and Latin America grew by 3.9%. Market share performance showed holding or gaining share in approximately 7% of the revenue base, with strength in both chocolate and biscuits.

Guidance - The '25 outlook for organic revenue, earnings per share, and free cash flow remains unchanged. Approximately 5% revenue growth is expected, reflecting successful pricing in Europe and softer demand in the US. Translation ForEx impacts have changed to no impact on net revenue and EPS for the year. Tariffs on some finished goods and ingredients in the US are factored into the earnings outlook. For '26, the focus is on maintaining a balanced P&L for '25, continuing a sound chocolate business, with early positive results from the chocolate strategy, expecting EPS growth for '26 and potentially reinvesting cocoa savings back into the business.

• External factors such as cocoa cost inflation, consumer confidence issues, and global macroeconomic uncertainty pose risks. Tariffs on some finished goods and ingredients in the US, although manageable, are a risk. Industry volume declines due to elasticities from inflation-driven pricing and outsizing activities, as well as non-chocolate players reformulating with alternative components, are risks.

Q: Andrew Lazar asked about trends in key regions.

A: Dirk Van De Put discussed mixed consumer sentiment, US consumer confidence decline, biscuit category performance in the US, European consumer stability, and emerging market performance.

Q: Kenneth Goldman asked about the strategy to mitigate cocoa inflation.

A: Dirk Van De Put talked about RGM, pricing, productivities, the balance of mitigation efforts, elasticity in line, and the need to stay agile.

Q: Peter Galbo asked about Easter timing shift and North America destocking.

A: Luca Zaramella and Dirk Van De Put discussed Easter pricing impact, elasticity expectations, North America destocking by channel, and driver details.

Q: Megan Clapp asked about US biscuits and profit dollar generation.

A: Luca Zaramella and Dirk Van De Put expanded on US biscuits performance, profit dollar generation drivers, and the cadence of the rest of the year.

Q: Christopher Carey asked about commodity procurement and reinvestment in chocolate.

A: Luca Zaramella discussed commodity procurement opportunities, reinvestment thoughts based on cocoa trends.

Q: David Palmer asked about US snacking market and emerging markets.

A: Dirk Van De Put talked about US snacking market factors, emerging market performance, and outlook