Company and Industry Overview * **Company**: Mondelez International, Inc. (NASDAQ: MDLZ) * **Industry**: Consumer Staples, specifically chocolates, biscuits, and baked snacks Core Views and Arguments * **Long-term Strategy**: Mondelez remains committed to its long-term strategy of becoming the global leader in chocolates, biscuits, and baked snacks. This strategy focuses on growing iconic brands, leveraging geographical opportunities, and targeting premium segments within these categories. * **Consumer Behavior Shifts**: The company acknowledges shifts in consumer behavior due to COVID-19 and inflation, necessitating tactical adjustments to promotional techniques and cost management. * **Growth Outlook**: Mondelez expects strong growth over the next 5-10 years, driven by emerging markets and premium segments. The company aims to maintain or increase market share and deliver a reasonable financial performance in 2025, positioning itself for significant growth in 2026. Key Financials and Metrics * **Organic Net Sales Growth**: Mondelez reaffirmed its guidance for 3-5% year-over-year organic net sales growth, with acceleration expected in the second half of the year. * **Profitability**: The company reported material profit increases year-over-year, driven by favorable cocoa procurement and increased flexibility to activate promotions. * **Cocoa Inflation**: Mondelez expects cocoa prices to normalize in 2025, allowing for improved profitability in 2026. Strategic Initiatives * **Promotional Techniques**: Mondelez plans to adjust promotional techniques and RGM strategies to address consumer softness and ensure targeted investments. * **Cost Management**: The company aims to reduce costs through non-working media optimization, procurement initiatives, and negative overhead growth. * **Productivity**: Mondelez is focused on increasing productivity across various areas, including marketing, procurement, and supply chain. * **Emerging Markets**: The company is prioritizing emerging markets, particularly India, China, Brazil, and Mexico, for growth and expansion. * **Acquisitions**: Mondelez continues to pursue bolt-on acquisitions in core categories and adjacent markets, with a focus on adding scale and revenue synergies. Other Important Points * **Europe**: Mondelez successfully completed pricing discussions in Europe and is optimistic about the region's performance in the second half of the year. * **U.S. Biscuit Market**: The company is seeing signs of improvement in the U.S. biscuit market, with stabilization in volume growth and improving market share. * **Partnerships**: Mondelez's partnership with Coca-Cola for Oreo is expected to drive significant volume growth and enhance brand loyalty. * **Cakes and Pastries**: The company is excited about the cakes and pastries category, which offers significant growth opportunities and a natural extension of its biscuit business.

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Core Viewpoint - Mondelez International, Inc. has shown strong financial performance and attractive shareholder returns, leading to an upgrade in investment rating from neutral to buy [2][32]. Financial Performance - In Q2, Mondelez reported revenues of $8.34 billion, missing analyst expectations by $110.56 million and reflecting a year-over-year decline of approximately 2% [33]. - Despite the revenue decline, organic net revenue increased by about 2.5%, driven by strong pricing actions of 4.7%, partially offset by a decrease in volume/mix of -2.2% [37]. - The company achieved an EPS of $0.86, exceeding initial expectations [33]. Shareholder Returns - Mondelez has a strong history of returning value to shareholders, with 22 consecutive years of dividend payments and a recent announcement of an 11% increase in dividends per share [8][11]. - The company has returned significant amounts to shareholders through share buybacks, which, if considered as dividends, would imply an annual payout of approximately $3.48 per share [17]. Valuation - Using a dividend discount model, the fair value estimate for Mondelez's stock is $68 per share, slightly below the current share price of $70, not accounting for the positive impacts of share buybacks [16]. - The stock is trading at a premium compared to the sector median but is selling at a discount compared to its historical valuation figures [27][28]. Profitability and Margins - The gross margin has decreased by 590 basis points, and the operating margin has declined by 660 basis points, attributed to various one-off factors including currency and commodity hedging losses and higher integration costs [42]. - Despite the margin pressures, the company generated strong cash flow, sufficient to support dividends and share buybacks [43]. Market Performance - Emerging markets have shown larger growth compared to developed markets, contributing positively to the overall financial results [39]. - The company anticipates that potential decreases in interest rates may boost consumer confidence and demand for discretionary products, benefiting future sales [41].

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Core Viewpoint - Mondelez International is positioned as a safe-haven stock amid market volatility, with a focus on its resilient business model and potential for future growth [1][2]. Financial Performance - Mondelez reported a nearly 2% decline in revenue year-over-year for Q2, missing consensus estimates, but achieved 2.5% organic growth and maintained flat cash flow levels despite top-line weakness [5]. - Adjusted earnings rose by 25% compared to the previous year, significantly beating consensus estimates [5]. - The company has a dividend yield of 2.49%, with an annual dividend of $1.70 and a dividend payout ratio of 53.97% [3]. Investment Appeal - Mondelez's low beta of 0.5x indicates it is half as volatile as the S&P 500, making it an attractive option for risk-averse investors [2]. - The company has a strong track record of dividend increases, with 12 years of consistent growth, positioning it for Dividend Aristocrat status [3][4]. - Analysts have raised price targets for Mondelez, indicating a nearly 20% upside potential from current trading levels, with a consensus price target of $79 [6]. Market Dynamics - The current market environment is characterized by volatility, with a shift in policy expected to lead to easing economic conditions and a broader stock rally in the future [1]. - Mondelez's share count has decreased by 1.7% in Q2 and 1.4% in the first half of the year due to ongoing share repurchase programs, which are expected to continue [4].

Mondelez International, Inc. (MDLZ) reported second-quarter 2024 results, wherein the bottom line beat the Zacks Consensus Estimate while the top line missed the same. Also, earnings improved year over year.Robust bottom-line results and free cash flow generation can be attributed to effective pricing strategies, efficient cost management and impressive momentum in emerging markets. Despite a challenging and dynamic operating environment, management remained focused on executing the long-term growth strateg ...

Core Insights - Mondelez International reported second-quarter adjusted EPS of 86 cents, exceeding analyst expectations of 79 cents per share [1] - Quarterly sales amounted to $8.343 billion, falling short of the analyst consensus estimate of $8.454 billion [1] - The company raised its quarterly dividend by 11%, increasing from 42.5 cents to 47 cents per share [1] Financial Performance - The strong profitability and cash flow generation were attributed to strategic growth initiatives, brand reinvestment, price execution, and cost discipline [2] - Mondelez shares increased by 3.2%, trading at $69.20 following the earnings announcement [2] Analyst Ratings and Price Targets - Piper Sandler analyst Michael Lavery maintained an Overweight rating on Mondelez and raised the price target from $76 to $78 [3] - JP Morgan analyst Ken Goldman also maintained an Overweight rating, increasing the price target from $72 to $73 [3]

Financial Data and Key Metrics Changes - Organic net revenue grew by 2.5% in Q2 2024, with adjusted gross profit dollar growth of 11.3% and adjusted EPS increasing by 25% [7][20][26] - Free cash flow generation was strong, totaling $1.5 billion in the first half of the year, with an 11% increase in dividends announced [5][27] Business Line Data and Key Metrics Changes - Biscuits and baked snacks grew by 0.8% for the quarter, with brands like Oreo and Ritz gaining market share [21][23] - Chocolate segment grew by 5.6%, driven by strong performance in both developed and emerging markets, with Cadbury Dairy Milk and Milka showing significant growth [21][22] - Gum and candy grew by 2.9%, supported by momentum in key markets such as China and Brazil [22] Market Data and Key Metrics Changes - North America experienced a growth of 0.3%, with challenges in the biscuit category but improvements noted in brands like Chips Ahoy! [23][24] - Europe grew by 2.7%, with strong execution leading to share gains despite volume declines due to customer disruptions [23] - Emerging markets saw a revenue increase of 4.5%, with strong growth in China and Brazil, while India faced challenges due to food inflation [24][25] Company Strategy and Development Direction - The company is focused on long-term growth in chocolate, biscuits, and baked snacks, aiming for 90% of revenue from these core categories by 2030 [14][19] - A strategic partnership with Lotus Bakeries was announced to develop co-branded chocolate products and expand the biscuit business in India [18][19] - Continued investment in advertising and consumer engagement is emphasized, with innovative marketing campaigns planned for brands like Oreo [15][16] Management's Comments on Operating Environment and Future Outlook - Management noted a stabilizing consumer environment in North America, with inflation pressures easing and consumer confidence improving [32][33] - The outlook for Q3 and the second half of the year remains positive, with expectations for volume growth in Europe and North America [30][34] - Cocoa prices are anticipated to be a significant headwind in the second half, but the company is well-positioned to manage costs and maintain profitability [26][28] Other Important Information - The company is making progress on its sustainability agenda, aiming for net zero carbon by 2050, with a carbon-neutral biscuit manufacturing plant in China [17] - The ERP transition is being implemented over four years to minimize disruptions, with a focus on successful execution [40] Q&A Session Summary Question: Consumer situation in North America and need for price reset - Management indicated that while the category remains soft, it is stabilizing, and they do not foresee a full price reset but will focus on targeted promotions and smaller pack sizes [32][33] Question: Volume growth expectations and drivers - Management expects volume growth to return in Europe, driven by strong execution and upcoming consumer activities [34] Question: Impact of ERP transition - The ERP program will be rolled out in phases to minimize disruptions, with careful planning to ensure successful execution [40] Question: Long-term free cash flow guidance - Management indicated that free cash flow could exceed $4 billion on an ongoing basis, with current guidance at $3.5 billion for the year [42] Question: Cocoa pricing strategy - The company is securing cocoa positions for 2025 and expects a market correction, with a significant portion of their positions already covered [46][48] Question: Partnership with Biscoff - The partnership involves co-branding chocolate products and distributing Biscoff cookies in India, with potential for global expansion if successful [48]

Mondelez (MDLZ) reported $8.34 billion in revenue for the quarter ended June 2024, representing a year-over-year decline of 1.9%. EPS of $0.86 for the same period compares to $0.76 a year ago.The reported revenue compares to the Zacks Consensus Estimate of $8.39 billion, representing a surprise of -0.59%. The company delivered an EPS surprise of +10.26%, with the consensus EPS estimate being $0.78.While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how the ...