Mondelez International(MDLZ)2022-06-01 17:29Key Takeaways Company and Industry * Company: Mondelez International, Inc. (NASDAQ: MDLZ) * Industry: Food and Beverage, Snack Manufacturing Core Views and Arguments * Top Line Growth: Mondelez has achieved a 4.7% average organic sales growth since 2019, with biscuits and chocolate contributing significantly to this growth. * Portfolio Strategy: Mondelez aims to increase its presence in biscuits and chocolate, targeting a 90% to 10% split between these categories and the rest of the portfolio. * Acquisitions: Mondelez focuses on bolt-on acquisitions in biscuits, chocolate, and baked snacks, prioritizing health and wellness, premium, and digitally oriented models. * Disposal: Mondelez is exploring the disposal of its developed market Gum and Halls business, representing approximately $1 billion in revenue. * Cost Inflation: Mondelez expects double-digit inflation in 2022 and similar levels in 2023, driven primarily by energy costs and commodity prices. * Pricing: Mondelez plans to pass on the absolute amount of inflation into its P&L through pricing actions, with a focus on maintaining volume growth. * Sustainability: Mondelez has elevated sustainability as a key pillar of its strategy, focusing on reducing carbon footprint, improving supply chain sustainability, and enhancing human rights. Other Important Points * Incentive System: Mondelez's incentive system focuses on gross profit, market share, and volume growth, with a decentralized approach to compensation. * Advertising and Consumer Spend: Mondelez continues to invest in advertising and consumer spend, aiming to improve brand engagement and return on investment. * Baked Snacks: Mondelez sees significant growth opportunities in baked snacks, leveraging its existing manufacturing and distribution capabilities. * HFSS Regulations: Mondelez is adapting to the High Fat, Sugar, and Salt (HFSS) regulations in the UK, focusing on reformulating products and exploring new categories. * Sweeteners: Mondelez is investing in natural sweeteners and alternative sweetening technologies to reduce sugar content in its products. * Free Cash Flow: Mondelez expects free cash flow to improve over time, driven by working capital optimization and synergies from acquisitions. * Savory Snacks: Mondelez is exploring opportunities in savory snacks, particularly in countries like China where there is a growing demand for better nutrition.