Mondelez International, Inc. (MDLZ) posted first-quarter 2025 results, with the top line increasing year over year but missing the Zacks Consensus Estimate. On the other hand, the bottom line declined year over year but beat the consensus mark.The company delivered solid results supported by effective execution of its growth strategy despite record-high cocoa cost inflation. Strong pricing, market share performance and resilient category strength globally reinforce confidence in the full-year outlook.Adjust ...

Q1 2025 RESULTS April 29, 2025 FORWARD-LOOKING STATEMENTS This presentation contains forward-looking statements. All statements other than statements of historical fact are "forward-looking statements" for purposes of federal and state securities laws. Words, and variations of words, such as "will," "may," "expect," "would," "could," "might," "intend," "plan," "believe," "likely," "estimate," "anticipate," "objective," "predict," "project," "drive," "seek," "aim," "target," "potential," "commitment," "outlo ...

Financial Data and Key Metrics Changes - The company reported a 3.1% growth in organic net revenue for Q1 2025, driven by strong pricing execution in the chocolate business despite significant cocoa input cost inflation [6][18] - Adjusted gross profit was significantly impacted by record cocoa costs, leading to an 18% decline in EPS on a constant currency basis [9][32] - Free cash flow for the quarter was $800 million, with a stock repurchase of $1.5 billion at an average price of $57.91 [9][33] Business Line Data and Key Metrics Changes - The chocolate segment grew by 10.1%, with significant growth across both developed and emerging markets, although volume mix was down 5.7% due to elasticities and trade destocking [22][24] - The biscuits and baked snacks category grew by 0.3%, with notable brands like Loo and Seven Days contributing to growth, but faced challenges in the U.S. due to retailer destocking [20][21] - Gum and candy grew by 1%, driven by performance in China and Mexico, but faced volume mix challenges in the U.S. [22] Market Data and Key Metrics Changes - North America experienced a revenue decline of 3.6%, primarily due to retailer destocking and softer consumer demand, particularly in the food and mass channel [26] - Europe saw an 8.9% growth in Q1, with strong execution in key countries like the UK, France, and Germany, benefiting from successful pricing execution and Easter season performance [24][25] - Emerging markets grew by 3.9%, with strong performance in Brazil and China, although India and Southeast Asia showed some softness [19][28] Company Strategy and Development Direction - The company remains committed to its strategic growth agenda, focusing on brand reinvestment, expanding distribution, and sustainability initiatives [11][14] - The chocolate strategy is on track, with a focus on offering a variety of pack sizes and maintaining entry-level pricing to drive consumption [15][16] - The company aims to navigate cocoa cost challenges while driving long-term category health and share gains [17][38] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the full-year outlook despite external volatility, highlighting strong pricing execution and category growth [6][7] - Consumer sentiment is mixed, with North America facing significant challenges due to inflation fears, while Europe shows stable consumer confidence [46][49] - The company expects to see an acceleration in top-line growth in Q2, driven by successful Easter activations and improved pricing strategies [60][62] Other Important Information - The company achieved a top-tier ranking in the global advantage survey for retailer partnerships and made significant progress in sustainability targets [13][14] - Cocoa prices remain elevated, but the company anticipates a small surplus for the year, with expectations of potential demand declines impacting future cocoa prices [33][34] Q&A Session Summary Question: Trends in key regions for the year ahead - Management noted strong pricing execution in Europe and share gains in emerging markets, while North America remains softer due to retail destocking [41][44] Question: Key considerations for North America and pricing in Europe - Management reaffirmed guidance for 2025, highlighting successful customer negotiations and strong pricing execution across markets [55][56] Question: Strategy to mitigate cocoa inflation - The company emphasized a balanced approach involving pricing, productivity, and RGM strategies, with ongoing monitoring of consumer reactions [67][68] Question: Insights on North American destocking - Destocking was primarily observed in food and mass channels, with DSD systems not fully mitigating the impact [88][89] Question: Profit dollar generation and future cadence - The company experienced better-than-expected profit dollar generation due to improved pricing and productivity, with manageable tariff impacts anticipated [93][96]

Group 1: Passive Income and Investment Opportunities - Generating passive income can lead to financial freedom and increased independence [1] - Investing in high-yield dividend stocks, particularly in the food and beverage industry, is a viable strategy for passive income [2] Group 2: Mondelez - Mondelez has a current dividend yield of 2.9%, which is more than double the S&P 500's yield of 1.4% [3] - The company owns iconic brands like Oreo and Cadbury, generating billions in revenue and free cash flow, supporting a 10.5% compound annual growth rate in dividends over the past five years [4] - Mondelez aims for organic revenue growth of 3% to 5% annually, supporting high-single-digit EPS growth, and has a strong balance sheet for acquisitions [5] Group 3: PepsiCo - PepsiCo offers a dividend payout of 4.1% and plans to increase it by 5% starting in June, marking 53 consecutive years of dividend growth [6] - The company has a diverse portfolio of brands, many generating over $1 billion in annual sales, with durable demand [7] - PepsiCo invests in product innovation and productivity, expecting 4% to 6% annual organic revenue growth and high-single-digit EPS growth, with a strong balance sheet for acquisitions [8] Group 4: Starbucks - Starbucks has a dividend yield of 2.9% and has increased its dividend for 14 consecutive years, with a 20% compound annual growth rate during that period [9] - The company sees potential to double its U.S. store footprint and expand internationally, with over 40,000 stores currently [9] - Starbucks aims to enhance sales growth and profitability by focusing on coffee and improving customer experience [10] Group 5: Industry Overview - The food and beverage sector is characterized by steadily rising revenue and cash flow, enabling companies to pay growing dividends [12] - Companies like Mondelez, PepsiCo, and Starbucks are highlighted as strong candidates for passive income due to their enticing and steadily increasing dividends [12]

Company Performance - Mondelez reported quarterly earnings of $0.74 per share, exceeding the Zacks Consensus Estimate of $0.65 per share, but down from $0.95 per share a year ago [1] - The earnings surprise for this quarter was 13.85%, while the previous quarter saw a surprise of -1.52% [2] - The company posted revenues of $9.31 billion for the quarter ended March 2025, slightly missing the Zacks Consensus Estimate by 0.21%, and showing a year-over-year increase from $9.29 billion [3] Stock Movement and Outlook - Mondelez shares have increased approximately 9% since the beginning of the year, contrasting with a -6% decline in the S&P 500 [4] - The company's earnings outlook is crucial for investors, with current consensus EPS estimates at $0.66 for the upcoming quarter and $2.90 for the current fiscal year [5][8] - The estimate revisions trend for Mondelez is currently favorable, resulting in a Zacks Rank 2 (Buy) for the stock, indicating expected outperformance in the near future [7] Industry Context - Mondelez operates within the Zacks Food - Miscellaneous industry, which is currently ranked in the top 34% of over 250 Zacks industries [9] - Historical data suggests that the top 50% of Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1 [9]

Financial Performance - Net revenues increased 0.2% to $9.3 billion in Q1 2025 compared to the same period in the prior year, driven by higher net pricing and incremental revenue from the acquisition of Evirth[126]. - Organic Net Revenue rose 3.1% to $9.6 billion in Q1 2025, attributed to higher net pricing, partially offset by unfavorable volume/mix[126]. - Diluted EPS attributable to Mondelēz International decreased 70.2% to $0.31 in Q1 2025, impacted by unfavorable mark-to-market changes and costs from the ERP System Implementation[126]. - Adjusted EPS fell 20.4% to $0.74 in Q1 2025, with a constant currency decrease of 18.3% to $0.76, driven by operating declines and higher interest expenses[126]. - Net revenues for the first quarter of 2025 increased by $23 million (0.2%) to $9,313 million, with Organic Net Revenue growth of $291 million (3.1%) to $9,556 million[131]. - Net earnings attributable to Mondelēz International were $402 million, a decrease of $1,010 million (71.5%), with diluted EPS at $0.31, down $0.73 (70.2%) from the previous year[143]. - Operating income decreased by $2,047 million (75.1%) to $680 million, with Adjusted Operating Income down $335 million (19.6%) to $1,375 million[134]. - Total segment operating income for the first quarter of 2025 was $680 million, a significant decrease of $2,047 million (75.1%) from $2,727 million in 2024[150]. Revenue Drivers - The acquisition of Evirth (Shanghai) Industrial Co., Ltd. was completed in Q4 2024, enhancing the company's presence in the cake and pastry market in China[121]. - The acquisition of Evirth on November 1, 2024, contributed an incremental $99 million in net revenues for the first quarter of 2025[132]. - Higher net pricing was observed across all regions except North America, driven by carryover pricing from 2024 and input cost-driven pricing actions[138]. - Unfavorable volume/mix was experienced across all regions, reflecting volume declines due to pricing elasticity impacts and category softness in North America[132]. - Latin America segment net revenues decreased by $116 million (8.8%) to $1,203 million, primarily due to unfavorable currency impacts and volume declines[152][153]. - AMEA segment net revenues increased by $66 million (3.4%) to $2,016 million, driven by an acquisition that contributed $99 million in net revenues[155][156]. - Europe segment net revenues rose by $182 million (5.4%) to $3,550 million, supported by higher net pricing[158][159]. - North America segment net revenues decreased by $109 million (4.1%) to $2,544 million, impacted by unfavorable volume/mix and currency translation[161][162]. Currency and Commodity Impact - In Q1 2025, unfavorable currency-related items impacted Organic Net Revenue by $342 million (3.7 pp) due to currency translation rate changes[119]. - Currency-related items negatively impacted net revenues by $342 million due to unfavorable currency translation rate changes[132]. - Commodity costs increased due to higher prices for cocoa, dairy, packaging, energy, and nuts, partially offset by lower sugar, grains, and edible oils costs[179]. - The company expects elevated cocoa costs in the near- and medium-term due to ongoing supply chain disruptions and higher commodity costs[182]. - The company utilizes hedging, higher pricing, and cost control to address commodity cost increases, but may not fully hedge against all cost fluctuations[183]. Operational Challenges - The company anticipates ongoing volatility in future snacks revenue growth due to macroeconomic uncertainties and inflationary pressures[111]. - The war in Ukraine has led to operational challenges, with Ukraine and Russia contributing 0.4% and 3.1% to consolidated net revenue, respectively, in Q1 2025[114]. - The company continues to monitor trade and regulatory uncertainties, particularly regarding tariffs that could significantly impact revenue and costs[112]. - Incremental costs related to the war in Ukraine, including asset impairments and higher allowances for uncollectible accounts, are isolated and excluded from operating results[9]. Capital and Expenditures - The company expects capital expenditures for 2025 to be up to $1.3 billion, focusing on modernizing manufacturing facilities and supporting productivity initiatives[170]. - Dividends paid in the first quarter of 2025 amounted to $623 million, an increase from $578 million in the same period of 2024[172]. - Total debt increased to $19.5 billion as of March 31, 2025, up from $17.7 billion at the end of 2024, with a debt-to-capitalization ratio of 0.43[176]. - The company generated $1,092 million in net cash from operating activities in the first quarter of 2025, down from $1,324 million in 2024[168][169]. Risk Management - The company faces risks from macroeconomic conditions, geopolitical uncertainties, and changes in consumer preferences that could affect performance[186]. - The company is primarily exposed to currency exchange rate, commodity price, and interest rate market risks, which are managed as part of its overall risk management program[195]. - Derivative instruments are utilized to reduce earnings fluctuations from volatility in currency exchange rates, commodity prices, and interest rates[196]. Non-GAAP Measures - Non-GAAP financial measures, such as Organic Net Revenue and Adjusted Operating Income, are used to evaluate business performance and trends[188]. - Organic Net Revenue excludes impacts from acquisitions, divestitures, and currency-related items, reflecting underlying business growth[191]. - Adjusted Operating Income excludes various impacts, including those from the Simplify to Grow Program and acquisition-related items, to provide comparability of operating results[191]. - The company evaluates its operating performance on a constant currency basis, excluding the effects of currency translation rate changes and extreme pricing increases in Argentina starting Q1 2024[4]. - Unrealized gains and losses from commodity and foreign currency derivative contracts are excluded from non-GAAP earnings measures to remove volatility from future inventory purchases[8]. - Gains and losses on partial or full sales of equity method investments are excluded from non-GAAP financial measures to better reflect underlying operations[15].

Financial Performance - Net revenues for Q1 2025 increased by 0.2%, with organic net revenue growth of 3.1% and a volume/mix decline of 3.5%[1] - Diluted EPS decreased by 70.2% to $0.31, while adjusted EPS was $0.74, reflecting an 18.3% decline on a constant currency basis[5] - Gross profit margin fell to 26.1%, down 2,500 basis points year-over-year, primarily due to increased raw material and transportation costs[7] - Operating income decreased by 75.1% to $680 million, with an operating income margin of 7.3%, down 2,210 basis points[5] - Net revenues for Q1 2025 were $9,313 million, a slight increase from $9,290 million in Q1 2024, representing a growth of 0.2%[23] - Gross profit decreased to $2,430 million in Q1 2025, with a gross profit margin of 26.1%, down from $4,750 million and 51.1% in Q1 2024[23] - Operating income fell to $680 million in Q1 2025, with an operating income margin of 7.3%, compared to $2,727 million and 29.4% in Q1 2024[23] - Net earnings attributable to Mondelēz International were $402 million in Q1 2025, a significant decline from $1,412 million in Q1 2024[23] - Basic earnings per share attributable to Mondelēz International decreased to $0.31 in Q1 2025 from $1.05 in Q1 2024[23] Shareholder Returns - The company returned $2.1 billion to shareholders through cash dividends and share repurchases in Q1 2025[8] Future Outlook - For 2025, the company expects organic net revenue growth of approximately 5% and adjusted EPS to decline by about 10% on a constant currency basis due to cocoa cost inflation[10] - Free cash flow for 2025 is projected to exceed $3 billion[10] - The outlook for 2025 does not account for potential tariff changes related to the USMCA[10] Assets and Liabilities - Total assets increased to $68,927 million as of March 31, 2025, compared to $68,497 million at the end of 2024[26] - Total liabilities rose to $43,104 million as of March 31, 2025, up from $41,539 million at the end of 2024[26] - Net debt increased to $17,977 million as of March 31, 2025, from $16,398 million at the end of 2024[26] Cash Flow - Net cash provided by operating activities was $1,092 million in Q1 2025, down from $1,324 million in Q1 2024[29] - The company reported a net cash used in financing activities of $704 million in Q1 2025, compared to $1,223 million in Q1 2024[29] - Net Cash Provided by Operating Activities decreased by $232 million from $1,324 million in 2024 to $1,092 million in 2025[77] - Free Cash Flow decreased by $210 million from $1,025 million in 2024 to $815 million in 2025[77] Strategic Initiatives - The company remains committed to its strategic agenda and aims to navigate the volatile operating environment effectively[3] - The Simplify to Grow Program, aimed at reducing supply chain and overhead costs, was completed in Q4 2024, with restructuring charges incurred during the process[47] - The ERP System Implementation program is ongoing, with expected completion by year-end 2028, involving significant incremental costs[52] - The Simplify to Grow program contributed to operational efficiencies, with a total impact of $53 million[72] Currency and Economic Impact - The company reported a significant impact from currency-related items, contributing $342 million to organic revenue growth[59] - The company reported a significant impact from currency-related items, totaling $27 million[70] - The company incurred incremental costs related to the war in Ukraine, including asset write-downs, but has resumed production at its Ukrainian facilities as of Q2 2024[51] - The company noted incremental costs due to the war in Ukraine, amounting to $1 million[72] - The company has excluded the impact of extreme pricing increases in Argentina (over 26% year-over-year) from its non-GAAP measures starting Q1 2024[57] - The company’s operations in highly inflationary economies, including Argentina, Türkiye, Egypt, and Nigeria, are accounted for separately to reflect their unique financial impacts[49] Adjusted Financial Metrics - Adjusted (Non-GAAP) gross profit for Q1 2025 was $3,110 million, with a gross margin of 33.4%, and adjusted operating income was $1,375 million, reflecting an operating margin of 14.8%[63] - Adjusted EPS (Non-GAAP) for Q1 2025 was $0.74, down 20.4% from $0.93 in Q1 2024[68] - Adjusted (Non-GAAP) net earnings for Q1 2025 were $1,375 million, with an effective tax rate of 23.6%[65] - The adjusted operating income for North America was $412 million, with a margin of 21.1%[72]

Core Insights - Mondelēz International reported a slight increase in net revenues of 0.2% for Q1 2025, with organic net revenue growth of 3.1%, but faced a decline in volume/mix of 3.5% [1][6] - The diluted EPS fell significantly by 70.2% to $0.31, while adjusted EPS decreased by 18.3% on a constant currency basis to $0.74 [1][5] - The company generated $1.1 billion in cash from operating activities and reported free cash flow of $0.8 billion, returning $2.1 billion to shareholders [1][6] Financial Performance - Net revenues for Q1 2025 were $9,313 million, showing a 0.2% increase compared to the previous year, with organic net revenue growth of 3.1% [4][20] - The gross profit decreased to $2,430 million, with a gross profit margin of 26.1%, down 25.0 percentage points year-over-year [5][20] - Operating income was reported at $680 million, reflecting a 75.1% decline, with an operating income margin of 7.3%, down 22.1 percentage points [5][20] Regional Performance - In Latin America, net revenues were $1,203 million, down 8.8%, while organic net revenue growth was 3.9% [4] - Asia, Middle East & Africa reported net revenues of $2,016 million, with a 3.4% increase and organic growth of 1.8% [4] - Europe saw net revenues of $3,550 million, up 5.4%, with organic growth of 8.9% [4] Strategic Outlook - The company reaffirmed its outlook for 2025, expecting organic net revenue growth of approximately 5% and a decline in adjusted EPS of about 10% on a constant currency basis due to cocoa cost inflation [8][51] - Free cash flow for 2025 is projected to exceed $3 billion, with no expected impact from currency translation on net revenue growth or adjusted EPS [8][51] Shareholder Returns - Mondelēz returned $2.1 billion to shareholders through cash dividends and share repurchases in the first quarter of 2025 [1][6] - The company continues to focus on delivering sustainable shareholder value while navigating a volatile operating environment [3][6]

Core Viewpoint - Mondelez (MDLZ) is expected to report quarterly earnings of $0.66 per share, reflecting a 30.5% decline year-over-year, while revenues are forecasted to increase by 0.4% to $9.33 billion [1] Earnings Estimates - Over the last 30 days, the consensus EPS estimate has been revised upward by 0.8%, indicating analysts' reassessment of their initial forecasts [2] - Changes in earnings estimates are crucial for predicting investor reactions to the stock, as empirical research shows a strong correlation between earnings estimate revisions and short-term stock performance [3] Revenue Projections - Analysts project 'Geographic Revenue- North America' to reach $2.57 billion, a decrease of 3% from the previous year [5] - 'Geographic Revenue- Europe' is estimated at $3.39 billion, reflecting a 0.7% increase year-over-year [5] - 'Geographic Revenue- AMEA' is expected to be $2.07 billion, indicating a 6.1% increase from the prior year [5] - 'Geographic Revenue- Latin America' is forecasted at $1.22 billion, showing a decline of 7.5% year-over-year [6] Operating Income Estimates - 'Operating Income- AMEA- Non-GAAP' is projected at $316.05 million, down from $412 million in the same quarter last year [6] - 'Operating Income- Europe- Non-GAAP' is estimated to be $372.28 million, compared to $641 million in the previous year [7] - 'Operating Income- North America- Non-GAAP' is expected to reach $503.38 million, down from $579 million year-over-year [7] - 'Operating Income- Latin America- Non-GAAP' is forecasted at $129.93 million, a decrease from $178 million in the same quarter last year [8] Stock Performance - Mondelez shares have increased by 1.6% over the past month, contrasting with a decline of 5.1% in the Zacks S&P 500 composite [9] - The company holds a Zacks Rank 3 (Hold), suggesting it is expected to perform in line with the overall market in the near future [9]

Group 1 - The RITZ Brand is launching a limited-edition product called "Sunkissed" Crackers, which features a crispy baked experience with a buttery, salty flavor [2][3] - The introduction of "Sunkissed" Crackers is part of a broader innovation strategy aimed at modernizing the RITZ brand to appeal to today's consumers [2] - To promote the new product, the RITZ Brand is hosting a Golden Summer Giveaway, offering a chance to win $50,000 to help consumers plan their summer vacations [2][3] Group 2 - The giveaway aims to encourage consumers to utilize their vacation days, as 46% of U.S. workers do not take all their paid time off [2][4] - The promotion runs from April 14, 2025, to August 31, 2025, and includes various summer-related prizes [5] - Mondelēz International, the parent company of the RITZ Brand, reported net revenues of approximately $36.4 billion in 2024, highlighting its strong position in the global snacking market [6]