Mondelez International(MDLZ) - 2025 Q1 - Quarterly Results

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]