Mondelez International(MDLZ)2021-09-09 16:47Summary of Mondelez International, Inc. Conference Call Company Overview - Company: Mondelez International, Inc. (NASDAQ:MDLZ) - Date: September 9, 2020 - Participants: Dirk Van De Put (Chairman and CEO), Luca Zaramella (CFO) Key Industry Insights - Sales Growth: Mondelez has experienced consistent sales growth, averaging over 4% for nine out of the last ten quarters, with the exception of Q2 2020 due to the pandemic [3][4] - Market Share: The company has gained substantial market share in the global biscuits and chocolate markets over the past three years [4] - Emerging Markets: Emerging markets have rebounded quickly post-pandemic, contributing positively to overall performance [5] Core Growth Strategies - Strengthening Core Brands: Focus on innovation, renovation, and investment in core brands has been a primary growth driver [6] - Oreo Market Potential: Oreo holds only 10% of the biscuit market in key regions like China and the U.S., indicating significant growth potential [7] - Channel Expansion: E-commerce and premium segments are identified as key areas for expansion [8] Financial Performance and Outlook - Profitability: Gross profit increased by 6% and EBIT by over 10% in the first half of the year, despite rising input costs [12] - Inflationary Pressures: Anticipated inflationary pressures, particularly in the U.S., will impact Q3 and Q4, but the company is confident in its pricing power and revenue growth management initiatives [11][14] - Free Cash Flow: Targeting over $3 billion in free cash flow, with a focus on capital allocation towards business investment, M&A, and dividends [16][19] M&A Strategy - Recent Acquisitions: The acquisitions of Give & Go and Chipita are aimed at expanding into the cakes and pastries segment, which is seen as a high-growth area [20][21] - Market Position: Post-acquisition, Mondelez expects to become the third-largest player in the cakes and pastries market, with significant revenue growth potential [25] Consumer Trends and Well-being Focus - Changing Consumer Preferences: The pandemic has shifted consumer behavior towards comfort and well-being, with increased demand for snacks [10] - Healthier Product Offerings: Mondelez aims to increase its portfolio of healthier products, targeting 20% of revenue from portion-controlled items by 2025 [39] Operational Challenges - Labor Issues: Ongoing strikes at U.S. manufacturing facilities have prompted the company to activate a business continuity plan to maintain production levels [31][32] - Negotiation Goals: The company is negotiating with unions to modernize contracts while ensuring competitive wages and benefits [33][34] Conclusion - Long-term Growth Confidence: Mondelez remains optimistic about its growth trajectory, with a focus on leveraging brand strength, expanding into new categories, and addressing consumer health trends [28][39]