Mondelez International(US:MDLZ)2026-02-03 23:02Financial Data and Key Metrics Changes - The company is pleased with the momentum in emerging markets and has seen sequential improvements in developed markets, although not fully recovered [12] - The guidance for 2026 is cautious due to short-term pressures, particularly in the U.S. biscuit category, which is expected to remain subdued in the first half of the year [12][13] - The company anticipates a significant impact of $500 million in the first quarter due to inventory accounting adjustments [21] Business Line Data and Key Metrics Changes - The chocolate category has shown resilience despite price volatility, with successful execution of the chocolate strategy through pricing and revenue growth management [5][7] - In North America, the biscuit category has seen a volume decline of 4% in the last three months and 3% for the year 2025, indicating a challenging operating environment [26] - The company plans to invest more in brand awareness and improve frequency and quantity of purchases in North America [27] Market Data and Key Metrics Changes - Emerging markets are expected to continue growing, with high single-digit growth anticipated, while developed markets may decline in the low to mid-single digits [36] - The North American market is characterized by low consumer confidence and a shift towards value-seeking behavior among consumers [25] Company Strategy and Development Direction - The company aims to increase investments behind its brands, particularly in chocolate, to drive volume growth and improve profitability [8][54] - There is a focus on innovation and new product activations, particularly with successful collaborations like Biscoff [8][10] - The company is also modernizing its supply chain to improve efficiency and flexibility over the next 3-4 years [28] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the unexpected decline in cocoa prices and the potential for competitive reactions, emphasizing the need for flexibility in guidance [9][13] - The outlook for 2027 is optimistic, with expectations of improved margins in the chocolate business due to lower cocoa prices [9][54] - The company is cautious about the North American market, expecting volume declines to ease but not necessarily grow [48] Other Important Information - The company is investing in cocoa-growing regions outside of West Africa to diversify supply and reduce risks associated with crop diseases [68][70] - There is an expectation of lab-grown cocoa becoming more available, which could positively impact the supply chain [70] Q&A Session Summary Question: Insights on chocolate strategy and cocoa price impact - The company has executed well on its chocolate strategy, but higher elasticity in northern European markets has necessitated adjustments for 2026 [7][9] Question: Guidance and cocoa environment outlook - The guidance for 2026 is cautious due to recent cocoa dynamics, with a focus on maintaining pricing and managing costs [12][13] Question: North American market challenges - The company is adapting to consumer behavior changes in North America, focusing on value and brand penetration [25][27] Question: Advertising and investment levels - The company plans to significantly increase investments in advertising and promotions over the next two years [42] Question: Emerging markets performance - The performance in LATAM is mixed, with Argentina facing challenges while Brazil and Mexico show strong growth [43][44] Question: Volume trajectory expectations - The company expects volume growth primarily from EMEA and Latin America, with North America anticipated to stabilize rather than grow [48][49] Question: Long-term cocoa supply strategy - The company is diversifying cocoa supply sources to mitigate risks associated with reliance on traditional regions [68][70]