Mondelez International has released its Q2 2024 financial results, showcasing a robust performance despite various market challenges. The company’s Q2 results highlight significant growth in earnings per share (EPS) and steady expansion across multiple key markets.
Mondelez International Q2 2024 Report: Earnings and Revenue Overview
In the second quarter of 2024, Mondelez International reported an adjusted EPS of $0.86, which exceeded analysts’ expectations of $0.79. This marked a positive indicator of the company’s profitability and efficiency in managing costs and operations. However, the company’s revenue for the quarter was $8.34 billion, slightly below the anticipated $8.45 billion. This revenue shortfall was attributed to disruptions in the European market and economic pressures in the United States.
Regional Performance Breakdown
Emerging Markets:
Mondelez International experienced substantial growth in emerging markets, showcasing the company’s strategic emphasis on these regions. In China, strong growth was driven by advances in online and social commerce channels. Mondelez’s ability to adapt to digital platforms in China has proven beneficial in capturing a wider consumer base. In Brazil, the company noted an increase in elasticities, reflecting a resilient consumer and economic environment despite global market volatility. Additionally, Mexico showed a healthy economic backdrop with solid employment rates and consumer confidence contributing to positive performance.
In India, food inflation impacted lower and middle-income households, leading to a pullback in spending and a trend towards down-trading, particularly in the biscuit category. Despite these challenges, Mondelez International maintained an improving combined market share in biscuits and chocolate across these emerging markets.
Developed Markets:
The performance in developed markets presented a mixed picture. Europe reported a growth of 2.7%, driven by effective pricing strategies and strong in-store execution which led to market share gains in several key countries. This growth however was partially offset by volume declines due to customer disruptions while North America recorded modest growth at only 0.3%. The latter reflects North America’s strong comparative base from last year coupled with ongoing shifts among consumers toward lower-priced products . To address this shift ,the company introduced more core packs within popular brands such as Oreo Chips Ahoy!and Ritz priced between $3-4 starting Q4 .
Product Category Performance
Biscuits And Baked Snacks:
This segment showed a growth rate of 0 .8 % led by brands like Oreo Ritz etc., Despite some softness being experienced within US biscuit market recently implemented strategies targeted at reviving this category have begun yielding positive results early on. Mondelez International proactively increased distribution points while running targeted promotions aimed at enhancing brand loyalty among consumers .
Chocolate:
The chocolate segment saw robust growth amounting up-to five point six percent (5 .6 %) contribution came from both developed & emerging markets despite facing challenges such as rising cocoa prices.Mondelez International remains confident about long-term prospects for its chocolate business supported by strong brand portfolio coupled with strategic positioning within respective markets .
Strategic Initiatives And Marketing Efforts
To drive their initiatives forward Mondelez International has been actively pursuing various strategies aimed at maintaining & expanding its market share.A major area focus involves increasing access points across food clubs & convenience stores particularly found within Northern America.In order meet diverse needs arising from customers’ demands different pack sizes were introduced alongside targeted promotions meant maintain brand loyalty while driving value
Creative partnerships and activations that increase consumer participation are some of the key elements in Mondelez International’s marketing strategy. In collaboration with Lucasfilm, for example, this brand launched a special edition Star Wars cookie under its Oreo brand which has been very successful among consumers. The two versions of the limited-edition cookie can only be discovered by consumers after opening the pack to reveal their side. This creative strategy has increased sales significantly and strengthened the cultural relevance of Oreos.
Sustainability and Corporate Social Responsibility
Mondelez International is determined about sustainability as well as corporate social responsibility thus continuously working towards reducing its environmental impact while positively contributing to society. An important milestone within this context has been achieved when its biscuit manufacturing plant located at East Suzhou in China was awarded carbon neutrality certification status. The plant has reduced carbon emissions by 16,000 tons or equivalent to planting 7,000 trees for a hundred years. The company utilizes advanced technological solutions such as recycling residual heat and wastewater along with establishing solar photovoltaic systems for green electricity generation.
Towards achieving net-zero carbon emissions by 2050, Mondelez International has continued their structured roadmap that is scientifically proven indicating what needs to be done at every step while emphasizing sustainable practices throughout their operations.
Financial Insights and Long-Term Growth Strategy
CFO Luca Zaramella focused on financial aspects regarding Q2 results during his presentation. Organic net revenue growth in all regions were seen alongside strong profit dollar growth coupled with substantial reinvestment into working media which generated robust free cash flow generation capital return according to him said Luca Zaramella who’s CFO at Mondelez International Inc.. Revenue increased by 2.5%, despite facing EU customer disruption worth 1.3 points AMIA region boycott headwinds amounting up-to .40 basis points as reported; growing emerging markets led the charge with a +4% rise whilst developed ones trailed behind us only managing +1%.
The categories saw growth in the portfolio performance of Mondelez during Q2 this year where biscuits and baked snacks grew by 0.8%. Some brands that performed well include Oreo, Ritz, and 7Days among others while chocolate grew at a rate of five percent predominantly driven by Cadbury Dairy Milk Lacta Milka brands success gum candy also showed signs of life across several key markets including China Brazil Western India.
Market Share and Regional Performance
The company reported market share gains or retention across forty percent (40%) revenue base mainly attributed strength chocolate gum candy partially offset softer results U.S biscuit business accounting approximately twenty-five percent (25%) total revenues Europe strong pricing execution amid volume declines customer disruptions fueled growth North America saw modest +03% due lower priced product preferences however recent introductions affordable pack sizes Oreo Chips Ahoy! have shown early improvement AMIA region grew +42% driven large part China contributions
Strategic Partnerships and Future Outlook
Mondelez International has announced a strategic partnership with Lotus Bakeries, which includes two main components. First, the companies will develop and launch co-branded chocolate products combining the unique caramelized crispy Biscoff taste with Mondelez’s iconic chocolate brands like Cadbury and Milka. These products are expected to launch in Europe in early 2025. Second, Mondelez International will manufacture, market, distribute, and sell the Lotus Biscoff cookie brand in India starting in the second half of 2025.
This partnership is a key example of Mondelez International’s strategy to scale its sweet biscuit business in emerging markets while innovating its European chocolate business. The company continues to explore additional opportunities for mergers and acquisitions to support its growth strategy.
Mondelez International remains focused on its long-term growth strategy, which includes reinvesting in its brands, expanding distribution, driving mergers and acquisitions, and scaling sustainable snacking. The company aims to generate 90% of its revenue from its core categories of chocolate, biscuits, and baked snacks by 2030.
