Mondelez International(MDLZ)2024-10-29 23:32Financial Data and Key Metrics Changes - Organic net revenue grew by 5.4% in Q3 2024, with adjusted gross profit dollar growth of 11.2% [9][21] - Adjusted EPS increased by 28.6% in the quarter, with free cash flow generation of $2.5 billion year-to-date [9][26] - Developed markets revenue grew by 5.6%, while emerging markets revenue increased by 4.9% [21] Business Line Data and Key Metrics Changes - Biscuits and baked snacks grew by 3.3%, with strong performances from brands like Oreo and Ritz [22] - Chocolate category grew by 9.2%, with volume/mix down by 1.2% primarily due to challenges in Latin America [22] - Gum and candy grew by 5.6%, driven by strength in key markets like Brazil and the US [22] Market Data and Key Metrics Changes - North America saw a revenue growth of 3.7%, with significant contributions from brand activations and new price packs [24] - Europe experienced an 8.1% growth, with strong execution in key markets such as the UK and Germany [24] - Emerging markets showed stable consumer confidence, particularly in India, Brazil, and Mexico, despite challenges in China [12][24] Company Strategy and Development Direction - The company is focused on long-term growth strategies in core categories of chocolate, biscuits, and baked snacks, aiming for 90% of revenue from these categories by 2030 [13] - Recent acquisition of Evirth in China aims to expand presence in the cakes and pastries category, which is valued at approximately $14 billion [15][17] - Continued investment in marketing and brand building, including a collaboration between Oreo and Coca-Cola [13][18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the overall health of the business, with expectations for robust top-line growth into next year [35][36] - Cocoa cost pressures are anticipated, but management is focused on protecting key price points and maintaining brand loyalty [19][28] - The company expects to navigate short-term cocoa dynamics while positioning for long-term sustainable earnings growth [33][34] Other Important Information - The company has repurchased $1.2 billion in stock year-to-date and plans to continue opportunistic buybacks [26] - Cocoa costs are expected to normalize, with a positive outlook for supply in 2025 [27][32] Q&A Session Summary Question: Discussion on Q3 dynamics and chocolate strategy - Management highlighted strong top-line growth and positive volume mix, with plans to protect the health of the chocolate category while addressing cocoa challenges [35][36] Question: Insights on Q4 EPS guidance and implications for next year - Management noted that Q4 EPS is expected to be down year-over-year due to locked-in high cocoa costs, but sees this as an anomaly [37][38] Question: Factors driving North America's performance in snacking - Management attributed North America's performance to effective pricing strategies and consumer loyalty, particularly in the $3 to $4 price range [40][41] Question: Growth plans for cakes and pastries and market expansion - Management emphasized the significant growth potential in the cakes and pastries category, particularly in China, while considering future expansion opportunities [44][45] Question: Outlook for EPS growth in 2025 - Management indicated challenges for EPS growth in 2025 unless cocoa prices decline or elasticities improve, with clarity expected in early 2025 [46][47] Question: Commentary on Latin America and China market performance - Management expressed confidence in Latin America despite some volume declines, and noted optimism in China due to government stimulus policies [57][58]