Mondelez International(US:MDLZ)2025-10-28 22:02Financial Data and Key Metrics Changes - The company reported a decline in volume in North America by 4% compared to a 2.8% average year-to-date, indicating a slowdown in the market [20] - The guidance for Q4 implies a step up in organic net revenue growth of more than 4%, with an expected improvement in EBIT growth compared to the previous year [13][46] - Cocoa prices have been a significant factor, with a 30% price increase impacting the chocolate segment, but the company expects significant improvement moving forward [5][9] Business Line Data and Key Metrics Changes - In Europe, the biscuits, cakes, pastries, and meals business are performing well with share growth and volume mix growth, while the chocolate category is generally in line with expectations despite some pressure [5][6] - The U.S. biscuit category is facing challenges, with consumers focusing on essentials and shifting towards smaller packs and promotions [20][21] - Emerging markets showed a volume decline of 4.7%, primarily affected by Argentina's hyperinflation and economic conditions, but India and Brazil are performing better with mid-single-digit and double-digit growth respectively [39][41] Market Data and Key Metrics Changes - Consumer confidence in Europe remains stable, but the U.S. market is experiencing a decline in consumer spending and basket size, affecting overall sales [5][20] - Price elasticity in Europe is currently around 0.7 to 0.8, higher than the historical range of 0.4 to 0.5, indicating a need for price adjustments in certain product lines [8][34] - Emerging markets are showing varied performance, with China experiencing low single-digit growth and Argentina significantly impacting overall volume [40][41] Company Strategy and Development Direction - The company is focusing on optimizing pricing strategies and promotional effectiveness to drive growth, particularly in the U.S. market [12][24] - There is a clear strategy to invest in emerging markets and adjacencies like cakes and pastries, with a goal of high single-digit EPS growth for 2026 [15][29] - The company plans to enhance its supply chain efficiency and reduce costs through automation and better logistics management [48][50] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term growth potential despite current challenges, emphasizing the importance of adapting to consumer behavior and market conditions [15][68] - The company anticipates a rebound in Europe driven by seasonal activations and improved pricing strategies, while the U.S. market is expected to stabilize with better promotional strategies [46][48] - Cocoa prices are expected to be deflationary in 2026, which will positively impact margins and allow for further investments [15][14] Other Important Information - The company is implementing a multi-year North America supply chain program aimed at addressing cost structures and improving service levels [48][50] - There is a focus on health and wellness trends, with plans to expand product offerings in better-for-you segments [25][68] Q&A Session Summary Question: Insights on European market pricing and elasticity - Management noted that the current price elasticity in Europe is around 0.7 to 0.8, which is higher than expected, and adjustments are being made to better align with consumer acceptance [34][58] Question: U.S. market growth strategy - The company is focusing on optimizing pricing and promotional strategies to regain growth, with a shift towards value offerings and better-for-you products [20][68] Question: Future investments and spending - Management confirmed that Q4 plans for investments are locked in, with a focus on continuous brand support and activation at point of sale [71][72]