Mondelez International(MDLZ)2025-04-29 20:11Financial 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].