MDLZ - Earnings call transcript Q3 2018 | Mondelez International, Inc.

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Operator

Good day, and welcome to the Mondelez International Third Quarter 2018 Earnings Conference Call. Today's call is scheduled to last about 1 hour, including remarks by Mondelez' management and the question-and-answer session. [Operator Instructions]. I'd now like to turn the call over to Mr. Shep Dunlap, Vice President, Investor Relations from Mondelez. sir. ahead, go Please

Shep Dunlap

sent afternoon, mondelezinternational.com/investors. Dirk for Chairman Van Zaramella, available today, and Good presentation release me which slides, and us. today Luca are we Earlier CFO. are de our our our and you. press joining and website, thanks on With CEO; out Thank Put, our

uncertainties. Actual statements on our how and we During this statements refer forward-looking to based make Please differ about the due things and details cautionary are the today. results filings the call, we'll company's may materially on performance. in for more statements. statements These factors risk to see XX-Q our risks forward-looking and XX-K contained

measures non-GAAP measures. remarks of will unless prepared Some financial Today, otherwise financial today's noted. be include we non-GAAP referencing our

reconciliations to And I'll with back earnings to find and release can over the that, presentation. GAAP the call of Dirk. You slide the within our the turn non-GAAP now at

Dirk Van de Put

Shep, the and afternoon. you, very delivered We quarter. third Thank results for good solid

the continue adjusted earnings growth delivered in build increase We to and double-digit share. another top momentum operating line margin, and per both we adjusted increasing while on

last Our and by grew organic net effects includes was which basis it of growth. quarter headwind onetime positive malware X.X%, volume points supported for third XX revenue year,

EPS adjusted which solid free is at growth cash delivered also constant We flow, year-to-date. now XX% of currency and $X.X billion

from positioned and categories in chocolate month, excited areas about are priorities want culture. like unique an to Day vision attending volume with are thanks emerging In markets China, the future third than you we to of As of to local us will around and strength our of quarter, Mondelez snacking pricing and and to in laid This growth. momentum increase share last our which emerging continue potential snacking. our XX% Nearly of and and at East execution geographic South by of I the the revenues Russia, I and future iconic Mexico, expect was Vibrant for disproportionately our Africa. in snacking, Investor of out delivered advantaged to growing food. growth an particular show contribute strong many footprint. growth, fast-growing thank other revenues lead biscuits positive global Asia faster come to and opportunity X%. is well driven India, giving our markets, and portfolio brands we

results. emerging business in working Argentina, X.X%. are issues grew North we with several expected, to markets as discussed which, Excluding our In you before, address to impact as America, continue we

as our key consumer were overall to and On improve more belVita work to have with the biscuits brands positive and share performing consumption delivery. but do service side, such Oreo, well, our Ritz we

significant region. Over of the on around couple made volume the in now North of already our past changes are XX% we producing years, and in assets advantaged America, we've

We we seeing investments are progress. systems with the additional continuing in are end-to-end capacity, and people, and

However, take progress fix it and, be not as will us will to linear. time such,

let the me making what long-term growth are. we strategic growth do, But before towards would strategy. to priorities. our to remind progress you our with share Turning are I like I you they

consumer-centric First, growth. accelerating we are

operational Second, excellence are in culture. growth we we do. driving a building are And winning third, we everything

work. requires growth at top adjusted into deliver our the free single-digit Our put volume-led Unlocking long-term and generation. to high consumer line us further growth heart to that flow goal of growth is EPS cash translates attractive the

our growth capitalizing channels We further brands, and innovation on overhauling opportunities so agenda. geographies contemporizing and do our by marketing in and will untapped

detail. a bit in innovation more at look Let's

under product good local and Cadbury Joy Europe introduction innovative this the insights. in As Investor and consumer I a and the recent Day, implementing of at we're A that example learn explained Fills, our time. principle grounded launching we're the innovation Milka more agile model on is test, at an same Oreo, of founded brands in the scale platform

team is product this time, And Early of where a for a consumers entirely product to an it market creamy strong already continues gains recently here quarter, edition. light, creating growth forward in indulgent, basis to the offers mid-single-digit Lickables Oreo, format Stuf helping taken munch to seeing launch are biscuit crispy, new a but third Most filling points the we're have in Our the in cookie has as yet, Over is that deliver in indications share biggest getting Oreo do positive, the well XX record in of treat. leadership. India, market more. for with a already and a idea with consumers, launched we pea-sized chocolate U.S., year-to-date to European on. which ready Imagine the looking our posting

the X While dialing the scale our growth with will we're will and with creating called test, with model inventing new driving in local and drive SnackFutures, talent strategic new we're entrepreneurs brands up and markets, external key learn smaller to early-stage internal dedicated seek and mandates: to platform around in commitment which overall reinventing a simultaneously unlocking snacking to businesses. future world. opportunities together innovation potential areas, SnackFutures to bring brands ventures untapped businesses be

of excited are the of to help snacking. this us potential We drive platform future about the

coming this. share the with We will more weeks you about in

growth additional drive to is M&A. route Another

our preserving the remain performed up Shop, ramp and in recent the to double-digit, strong scale the platform the while business it about in growing makes opportunity unique. excited it above distribution we have Our continues as this to U.S. Tate's expectation, what well acquisition, quarter, Bake We

all mainly gross drove continue area. on operational -- productivity Turning third years, XXX to this In the our and improvements, make adjusted remain our we excellence even to productivity in in our have point margin highly the XX.X%. on pillar strategy. we In we We driving our focused second deliver quarter, to recent which of further, to helped driving business. in of facets increase on progress focused basis

processes out operational to that challenges our end-to-end Beyond and North impacting in are also looking systems help efficient America. specifically, more are improvements us to this, the iron we make drive and, to

Finally, culture. a we changing it do to what we remain we by do winning but not growth just committed how building

to altering we ways our structure consumer the provoke shift shift of behaviors. drive to by our reduce working mindset and are to operating we continue January operations regional we that focus in commercial and will local such, caused will scale. complexity region As new organizational manage by to greater X, will a Starting but a overlap, leverage

This growth top absolute units, and to We growth. will change accountabilities, business reporting believe XX creating incentive one clarifies results. drive of X of move are dollar we business our are local and regions. aligning We this profit structure our each ownership geographic greater line enable volume-driven into

losing this agile With benefits scale regions, of company structure the can to consumer create expertise new react will the in global and we in preferences our rollout manufacturing without a local that marketing, and of the more innovation. faster

business, Executive setting the President, this a We who thank strong company from record our the will marketing well Gruber, delivering of President Weber, Europe, European for and has President wish best. business led of change, European January. great him leadership exceptional credentials retire have region also outside. from company with Hubert Regional up be this that and decided company all Hubert period growth. XX at brings during terms currently important our profitability and in him Vice commercial today as the extensive within of track has to announced a and end and of Hubert Western for the both his by experience future We replaced years Vinzenz as strong

in we build are have the continue and will our European step to in confident great on We Vince momentum right business. away

to snack During our the the Investor believe purpose, I Day, to we a empower right, right purpose we talked can by about the fulfill snack our at right also which providing moment, made way. people right is

of seeing in purpose our new already are action. compelling evidence We

were to XXXX. our our come. for instance, quarter recently way, manifested produce right announced results that we is snacks And we make beloved that summary, brands products commitment third recyclable believe if to our ambition solid. will Our and choose ensure iconic to for strongly in the is our way, by In our years our the all packaging consumers continue to right

and together to continues, gives our progress commitments on are the the categories, we on attractive, well year-to-date confidence snacking us initiatives, Our for deliver long-term total strategic our are to The generate year. set of with track right momentum our that particularly early we markets, emerging shareholders. underlying strengths for our in returns

to it like over to Luca. turn I'd Now

Luca Zaramella

mid-single-digit our revenue X.X%, to And Dirk, areas. in of revenue and growth, good headwind We of across Milka-branded growth afternoon. Asia organic the line number Southeast good volume X.X%, was our and share execution net Germany and as This with better was solid India execute volume grew top incident. performance Asia related the continues mid-single-digit Organic fueled basis increased the consecutive underlying in broad-based see solid results. AMEA well e-commerce. a chocolate key with chocobakery revenue XXX as recovery. growth Thanks, quarter well basis regional headwind increased of outlook. approximately market to financial Emerging gains broad-based performed that all delivered On points categories. while growth. commercial a China though included with performance. XX Southeast These consistent delivered in by includes performance high for malware revenue these fifth a India, of continued related to is as Africa Mexico, teams metrics China, to margin performance biscuits. of quarter, reflect robust X.X%. net Russia, lapping dynamics and growth momentum strong posted as basis solid as to well Europe's biscuit delivered where Russia the quarter by all portfolio malware continue and our growth strong market and results with fuel results both the it biscuit, good stands out across and its and points in well as the and

We also Latin double-digit Africa. saw in X.X%. grew strong America results

candy. by Argentina, impacted in growth momentum in was continued grew digits Brazil inflation-driven region which mid-single the both behind in and good low single-digit Although see the Mexico, to gum quarter. declined we

made in gaps of help We improve the X%. steps to and Brazil. America business North trajectory that also addressing price are declined innovation will around have our

continued positive impacted and challenges U.S. share dynamics, volume. we saw of face to a we which operational biscuits While number category

not mentioned, we although forward, are issues Dirk expect will processes, time will linear. As our people, progress and to operational in moving address systems and improvements and it making take be investments capacity

issue the describe is. what of Let nature the me

XX% lines not compound situation, demand our on Canada, last invested America the To Future and While Lines volume the in over on the of installing volume a Salinas, in we growth network. pressure greenfield and made reliability. around is more have state-of-the-art provide U.S. in existing years, is creating in plant plants of putting full the significantly still our Mexico new several North that do

as far supply stabilize making our demand concerned. enhancing investments We the capabilities necessary planning while are are through and network as the factory and people to U.S. systems

We needed, are the but stabilizing seeing some some systems improving where capacity progress and of lines, will adding already, capabilities installing time. some our require

margin gross and our a performance. net basis. the on adjusted more review of grew drove savings X% let's dollars profit than Positive QX, Now expansion. commodities, constant margin pricing, In currency productivity

freight partially are was which from cost favorable offset cost, by benefiting We cocoa continued logistics inflation. and

up XX continue a and year, number were on of were decreased our and margins. in We that and a America to conversion result constant maintain prior to compared profit already basis in income to improvements profit. provide in driven income with points savings also business, expansion. factories XXX increased to margins with points inflation. higher overall XX.X%, year, X basis of and improved right gross X There the Cost long-term expense grew gross discipline a XX.X%. and by expansion taken U.S. when currency and of Adjusted to basis points X% the XX.X%, have several line AMEA On costs. cost basis, offset protect margin margin continue regions. countries basis in medium volume drove XXX points margins U.S. other the North this our logistics service gross pricing by in unfavorable as margin customer muting to and XX.X%, by basis Europe announced a partially items points to by to and execution by higher Latin regional in to America including while operating costs line basis the XX striking balance of SG&A to XX.X%. grew XX pricing

growth or Approximately XX% than held and health take share revenue including discuss well, Overall, X%. businesses. me during to good growing the held of chocolate, continue of organic solid growth, this category held Approximately and The or results improved with our on X XX% category, encouraged and to XX% categories the our display Year-to-date, share to in a We past grew but Now remain candy our soft business Gum more China. business and Australia in categories. our markets. category, held business. overall including X.X%. building In continues the Germany, growth we our net quarter. by gained revenue of About our France, grew in growth reflecting dynamics snacking of quarters in highlights. let X.X%. of India, or grew or all Germany moment biscuits our of our India. U.S., revenue Russia China, revenue including in posted flat, was this share, developed share Brazil gained perform this XX%

repurchases. operating we by delivered capital increased respect a per deployment, another growth, to XX% and in approximately $X.X share. currency taxes With year-to-date. million QX These on and were earnings favorable share shareholders basis. driven $XXX to quarter returned which turning capital We constant Now EPS strong adjusted gains, to billion of results in

quarter, During in we $XXX in dividends. stock million and more the $XXX repurchased approximately than million cash paid

Turning to free cash flow.

The cash working and we quarter $X.X capital free have in a management of flow. results. cash as generation cash drove generated solid higher earnings Year-to-date, third flow was billion quarter

closing team a the and remains focused out year QX. year with target full our delivering on Our XXXX strong

Now X%. minute spend for expect our be full line our me for now approximately top year. the on Overall, let outlook we outlook year the a to

top encouraged trends as category are markets remain trends growth and emerging We overall our by results line solid.

with cash for adjusted OI our respect outlook our flow. adjusted margin, free maintaining are and year EPS We the to

of the about modeling, think QX open comparable operating second year. first half that, be let's margins questions. half roughly to should the for this you With As line

Operator

[Operator Instructions].

Bank America. We question with will the of take from our of Spillane first line Bryan

Bryan Spillane

me. gross little SG&A delivering So we the in two quarter, up ended but was were, think profit higher I better a guess, be. where to the we expected just relative One, I specifically than, it it for to questions in you much guess, bit dollars, I looked,

spent And walk So more flowed follow-up. Did look, better through in then just should just and were could -- back? SG&A about was that Or sort the more noise if we you a I marketing? through, was us you quarter? think other of expected you there that that than have

Luca Zaramella

Yes. Thank Bryan. you,

in have a a translate delivering few in positives into with profit and, than commitments. few So you year there as items say we good specifically job, income and quite to up is It major did have our more Gross the said, X%. come would no And in so income momentum, we in year, QX. so margin last into where offsetting line investments, of more points, see year, cost places that savings this and we been OI in some margin, general, the pleased I the have in far seen the unfavorable gross in of last changes. other as we that continuing growth, be will unlocked quarter goes, in a a had basis quarter, couple we didn't other far line so you as more terms the But XXX fully this as specifically, resulted year, A&C we the with line inflation. unfavorable good comparisons. But that in had it

favorability So a last cost, had quarter, this lapping quarter was little income it it we of in overhead were asset -- year was it the the insurance in claims sales A&C other -- was in not some as and unfavorability refunded. that total not bit

Bryan Spillane

follow-up you're unfolding, you make I And as plan. against guess, as your strategic just that, Okay. guess, beginning I early to guess, I early Dirk, of it's sort could to then, that's a And progress XXXX spending as think levels for next of give -- should should that how looking year? looking into and about we idea going how us models thinking and we're our opportunities you're at at about an the --

Dirk Van de Put

September. announced Well, Bryan. bit little number had first as premises strategy general. maybe strategy in Yes, it yes, on We we in our in a all, a of of the

The chocolate great with strong Europe the quarter continue be in in and a categories growth. X% the with wave emerging of first which these obviously they other and days, the quarter we drive to growth, food one will that this heat confirmed had place And then was is that if a even markets particularly premise was to worldwide, the that significant X.X% impacts growth sales. in snacking our were

did the good and those with feel we we out: marketing playbook; we then a talked our we growth; about the were X keep of few; a about So launched, premises, confirmed. they number And I other that relates to X consumer-centric continue innovations We as new that in were laid accelerated And strategies it the we about and plan that putting on on accountability growth. packaging. as the Also, profit margin. to recyclable organization will excellence. that pushes gross then which incentive organization being new talked focused closer new it culture, operational relates we're dollars and the reward new place, again, M&A, volume

all So we're But would progress of we're those we plans, the making strategies deeper the you expect finalizing like big X for if and on can and detail what year, track, expecting we're into course, next go spending be but areas. overall, to we're to. still, X the these on

bit to would first the significant are second capabilities be, specific overall route next the one, in course, on, in X company; of levels but areas we're third quality; the those a one, to The of market. increase early and the fourth expecting one see to probably A&C; one, a year. in comment little The

Bryan Spillane

gave in in for say still that to back September. concorporated that's the us But you 'XX fair guidance

Dirk Van de Put

Yes, yes, yes. No there. change

Operator

Ken line JPMorgan. with from comes of question Goldman next Our the

Kenneth Goldman

ask broader I one to can. one, if then a X like and I'd quick

that on the pro same said the you the expect half, basis to the in you quarter margin the of fourth half as forma year. think operating roughly For first a -- for or be second I your

fourth doing margin quickly? the lower average, on there, sure want basis. an that very than modeling. just -- percent about annual math in think we Can maybe because I like think something operating XX.X, XX.X confirm I'm as implies I you the quarter the my a that make to maybe

Luca Zaramella

about is our and you think about think, margin I around XX.X%. as year-to-date, Look, OI margin

I think around as is the number. approximately we XX%, guided with say year the year-to-date line would QX about in full to I

Kenneth Goldman

that. following I ask is My Okay. to I'm on in And question up pricing just about then broader the U.S. wanted

relatively I had, quarter, the comparison X%, was over this few and in think was you a the the number best difficult. years

how help much the for So can the want companies a get many, pricing versus us really bit how you just of pricing? just very topic between pricing in sensitive list promotions? to driving is the understand U.S. success about this list How little it's balance to sustainable obviously CPG idea is because a many today. a lower better I

Luca Zaramella

we in between right quite the volume think the I have I pricing about. is and Look, and But to work pricing that do honestly. quite we balance something think feel good U.S.,

market and over U.S. pricing. between If but nice you'll you what balance look in volume see, quarters, biscuit done consumption we last biscuit the have in a not terms, at only the and quarter few this think in I

back earlier pricing and is we now. effect in was a coming that implemented line the on year, which our So to some of going brands, specific question, your increase local pricing in

some our in think, seeing spending. volume were are pleased growth the marketplace some sweet place. promotions have we we And said, we introduced again, there spot pack price architecture. in think I I and found pricing in consumption of And terms. optimized the And inefficient We promo some brands I as where, in

So we pricing array full U.S. a in used of implement tools the really to

will vast it we effective as that be be addition, year, line and pricing next QX In and have the across pricing. gum majority candy. of And for biscuits, as pricing will we additional announced said,

see we think the the gains with I share and balance, said. quite happy what these as days, I based on

invest, and is costs, to in So given we fact clearly, some the do. And at right logistics and ability in commodities this as this have have we I of see think, the move. I thing to the confidence the you the inflationary sustainability think, category look that right pressure is the the we

Operator

next question Andrew Lazar line with of Your from the comes Barclays.

Andrew Lazar

I reach line X% suggest I'd down ones me. the rate than Obviously, X.X% line the first, X.X%, in X% even quarter the quick organic two exclude top of for say, Just third quarter. sequentially malware organic the the to from fourth top full year-to-date you impact. around if for slower and year,

to sort that specific organic trying sense, just XQ point? thinking I'm really there something get the guess conservatively just is I at you So in down a or is of this see slowing

Luca Zaramella

markets. we are encouraged line the momentum, clearly Look, evolution. we see And clearly by emerging top across specifically

We want are you in as pricing and quite think balance. that said, And we to happy be the fourth said are thoughtful I specifically quarter. emerging the vibrant, volume about we markets. Categories, with

challenges As in see some you know, we there improvements and might if be that's -- in QX in even specifically. U.S., the clearly still October,

So X% fourth about I and thoughtful quarter, it think honestly, in quite X%. think light we to wanting I the us the QX, to see is even just be around about

Andrew Lazar

that how to to what way in that at are needed stage, guess, built number? X% when at you gains X% the Got that's category it. the, year? guess, I'm growth of hit And And of think to to then I guess, really is growth forecast what sort about get this for is I best the line top XXXX, least X% for currently, at really your next X% organic into share expectation much your trying

Dirk Van de Put

market that would gain do next we at Well, see around be In at our share them moment X%. plan, we we had for for so strat year not category, the next foreseen see year. see X.X% at Us the any that aiming growing X.X%. we they means

aiming We are to the line market. largely with stay in

Operator

comes Your Howard from with next of Bernstein. Alexia question the line

Alexia Howard

putting still know more the brands Obviously, strategy try better to one you've those don't a got product strongly. of ask of Gum undone. segment. getting we little been bit being strategy Nielsen investment whether to as seems the as data, be going of be to you ago here there couple in the big the I've launch the seems seems the Can a the at migrate looking U.S. about though and sequentially. cookie into it also I years you're mint in product chocolate

may you what there in focusing been actually quick that here? work I us give category some Could of product innovations is, you're didn't have summary just strategy product crackers. category, a sort the by quite of what think on and

Dirk Van de Put

Yes.

maybe start it the Yes, to trying the will some know chocolate. chocolate market, And take with the highly is leverage brand I'll we time, of Oreo there. U.S. we're power So competitive. which entered that we but

I think but, in very strong our example of adjacent rate see it's type a as And it positive categories a Oreo be it's of good recent to highest brands extending play indicators innovation relates of going repeat to to obviously, in the consumer play. we response any the niche very category. chocolates, a with

feel think through second after we it. year overall, think a and decline So normal I it's to the we just a little of about bit pretty launch, there. going good see We are the

relates the doing market itself gum better. has gum, As been yes, to it

in innovation -- the category I it We early called the growth. see X.X the share in around mid-single is say of nicely. points. we digits. And are interesting Vibes belVita a And bit quite then, shares. you us as are also is quite Trident Ritz But relatively also up the new good the we seeing the growth we back with seeing our to flat crackers Oreo under Stride cookie segment, driven well. taking is of are an relates doing as by cookies, rest better would that of coming we're very seeing from And performance there see nice a launched which U.S. results in China little a brand. a have

we I doing some Alexia, you quite wins saw our well So we're some about overall, But and in are say going. there's cookies feel would But there, pretty losses there. as good overall, how things approach.

Sour the candy, is You mention well segment. doing in candy quite but Kids didn't Patch

are But increasing some outs. think, you I categories, So all look -- overall, we're and the yes, share. at if market there it's ins our

Operator

of next the Growe Our Stifel. line question from with Chris comes

Christopher Growe

you category in a gaining I wanted I Are category? that had seeing and yet category, cocoa in cost or question you, the around seen your emerge business more holding come thought down. share, the could. if have as the are for ask only you sales Just XX% you chocolate category to strong I competition were for well. of the where

just is competitive category. curious the dynamic how So in that I'm up shaping

Dirk Van de Put

It's is about growth strong. category the X.X%. Yes,

growth gaining areas, We largely are Our would at or showing are performance, revenue was Zealand. is due the That don't to, think But we, Australia, we some close. I share. New lost so I concerned X.X%, holding if say, at -- I Yes, overall, XX%, seeing quite France, something up. it's about. competition that We're Sweden. look share particularly big in the some

For And the overall quite mid-single digits. maybe about performance. chocolates, I the the overall, our think still high instance, took little in strong, we are growing pretty emerging digits single markets in growth overall, quarter. a but markets bit third is the chocolate But developed feel back strong in

Christopher Growe

emerging more competition price in of costs a areas no get as Okay, little favorable certainly there, cocoa.

Dirk Van de Put

No.

Luca Zaramella

about. No, I don't to think there anything worry is really

quite the gained a of last in across a board. We bit year number QX. share lapping quite are share We high

that will I It about So phasing. back. think, think come as

Christopher Growe

that in we just for feel a and strong yet issues a data how that would give just should the given Can had I that bit a of to a the and I question to the the America. you've North obviously, And But prior comp you cookies, bit And say. year, quick some had lingering Okay. late division? in in react consumption of very fourth seen little shape have on little before, of the up we up weaken quarter, seen have still follow issues.

Dirk Van de Put

the last lap last the a for was year, hurricane there for big buildup year. cookies Yes, versus

our at full that slower, last the little growth our the share the was comparison yes, quarter, but a overall see a we In with category share X.X%, very point. attribute we being So largely tough for up to bit last category Year-to-date, grew X.X%. a year.

coming have expect back higher that to we levels We anymore. to lap as effect the be category don't

the So that down. indication no would we have be particular category slowing

Operator

line of Strycula from comes with the Steve next Your question UBS.

Steven Strycula

to part Latin about two I businesses ask America and of your Brazil, wanted bigger question. with X A there and Argentina. Mexico

a the pricing it's we're how talk you key strategy elections, how managing volatility in some can each local whether that That on of -- very you're those particularly some and from be competition, and would markets and if inflation of both competition, about those Given of the helpful. seeing around volume comment a businesses following?

Dirk Van de Put

well are emerging up little very it and that Mexico, comment Yes, bit solid we We little and and and yes, we with continued positive. we organic which and very then was expectations. mid-single-digit, we're maybe QX specifically strong. that see growth, good there share market Luca regain leave very Brazil, addressing Argentina in there. America, that the positive I'll gaps had in of the a and volatility. was we've and through line the we gum thing see largely decline, a think Luca a to of revenue Argentina over growth comment the The driven very we And had be -- chocolate hand some situation to it in the price to had year, I beginning declined. pricing. on to to in Overall, managing chocolate. in is candy us are performance, and some But the continue is helping then I'll to by a bit in Brazil on market Mexico, Latin

on indications on very seeing are Brazil improve, see we as will We Mexico, comment will say, pretty positive about Luca? need a in feel year relates feel see So next Brazil, And I we high particular management, to a we for Argentina, year. pretty optimistic in it things be Luca the counting we inflation, then and next sales would good Brazil. again, that. yes, to need. we that growth don't about Overall, and that. -- vigilant. But

Luca Zaramella

differently little the our Brazil high in a Argentina, frankly, other quite Mexico. flow disciplined is X than revenue. of specifically we we the mentioned, bit environment, managing it a protecting are taking, value. Dirk that it, the and about inflationary countries and It to given are around is So X% And one approach, cash

way In fact, and and did with country. drove year, we pricing that throughout the We're in in value the are that quarter the consistently we double-digit cash flow protecting happy revenue.

that margin in you In fact, in I can quarter with was tell year. line our last the

scale country line in see look that business grow between the think, protecting us. that to losing day, be for how good economy not potentially country a a flow is tough a to with it but much the and as I sound fine it is and understanding of cash is also with it, could too a one So price,

way it compared in as a So have other America. it is to managing balance, of fine it countries we is Latin a different but

Steven Strycula

Wanted as recasted I the quick follow-up, should different all can. I baseline a be how using if there. business, have for the the financials we XXXX you've about to What pieces the with ask coffee the full put XXXX, income but generically again, equity given change how year? you from out that it ultimately, coffee guidance, not then, there? specific would reporting year for the last moving guys in the you guide And

Luca Zaramella

in to is No, reasons decided publicly the lag. going X-K be to to it coffee you we by of the said, it KDP in month, an go a company. traded impact earlier simply a of And tricky not lag, guide because, where clearly, But find quarter. question material us a you year. is on is was a is that the on one can the detail There the moving to

through EPS of more and can in I we and with some you give is context of double-digit synergies deliver. the consistency think but to highlights of what maybe the take X-K, the So the before KDP that going details, about you said separately,

Operator

line question Moskow next comes Your Suisse. Robert Crédit from the with of

Robert Moskow

going it price? for raising was increase? any help remind effect? the multiple commodities it's justify increases categories. across new trade in Dirk, into I or what quarter did us you product think U.S., in improvements to offset pricing that's the quality effect what Can going of you are make if the And first the price to to those you kind into And markets freight? mentioned pitch Is

Dirk Van de Put

on will America. well, comment North Yes, first I

to The an explained optimization we the middle beginning a -- the did at we bit on in categories we as in in the and us, price the brands right move seeing make the the we have. the investments will way year, beginning doing are local us brands at of we did across of allow line overall a spread and are before, It to categories. more behaving increase we increase, -- the prices, that of environment more a that price it do the those our the believe the a And but for our promotional of then increased it's relates pack X of increasing mechanisms same architecture and moment. year. next line will year. it's the As increase at between the We price right line price our

at So best way to this do is stage, we think the that it. probably

and aware to that. trade are related freight to pressures is it also well there commodities, the some of this course, cost Of relates as

a have doing bit that that, they Around although pronounced. story, reasons is would of of but that price the some to we price do is are those why increases. it same world, We're doing Luca? countries, I it's in North in the other say little not increases magnitude America. the less the we So some understand

Robert Moskow

chocolate In ahead. -- go Okay.

Dirk Van de Put

Excuse Sorry. me?

Robert Moskow

or I chocolate in increases the that first wanted follow in in on included no to is up Europe, the pricing? whether quarter price

Luca Zaramella

comment cannot actions. on we specific pricing Look,

coming said pricing, effect we the in As Argentina. it about markets, of is excluding pricing, majority emerging vast in

see pleased there. we We are with what

extract number Argentina emerging I pricing, there It a is think, by underpinned a that and you from look see is volume. X.X%. of component you is if the nice markets, growth but also of

foundation we those being lose vast to about in don't majority momentum, pretty presented markets. is markets think So leverage the and pricing want the want at we on because in plan And emerging to the Day. that volume closely are much we of watching we of operating that Investor dynamics the preserve effect

Operator

of line Your the comes Citi. question next David with Driscoll from

David Driscoll

One quick clarification.

but that year me the clear margin as full will that then half margin, half the you first but up half, the But to particular X And come right that hate a you like the so almost is I basis sounds can and on up mathematically below the that maybe right number be clear it points, like second said operating would XX%. the same now? guidance I I answer. be think operating XX.X%, just for Can -- for XX%. guidance out just first you with think of which was just is pieces and

Luca Zaramella

Yes.

said, year-to-date a So on as margin is basis, the XX.X%. I

XX.X% around in it was think half. I first about the

number. approximately the year-to-date half As XX%, both with we the and QX guided see much QX line pretty in first to

will below with we guidance a gave. the year full XX%, and it line bit little be So approximately in

David Driscoll

was fine. going have that X? that you And price that's then January January you made on Okay, the the size pricing implementing on what announcements X, of U.S. the into

Luca Zaramella

the getting to We candies. between right specific are brand. volume X the in see biscuit, pricing And be it and will different categories: we the across not the momentum looked And into details. impacts, margins trying we it elasticity days But potential and and that strike said, as balance we we by have these be into preserving forward. preserving are gum and marketplace going would

David Driscoll

move final quarter. A negative was you XXXX is, but me the one positive into volume year-to-date in leading volumes? the positive volume with third turn fourth does quarter, basis of us on When positive the expectation the for into again,

Luca Zaramella

comps by quarter additional this the I Look, that you the clearly can dynamics unchanged shipments much the last previous are versus assure affected are But quarters. year. malware underlying pretty

QX, lapping about at what think America, volume growth Think balance. volume you are far the look and of Europe I frankly, half what so at should the year. is, is this markets, we again, as is we look was don't year. pricing. the I and you think, you and in that, at pricing I dynamics look quite QX line other conclusion you as continuing attributable emerging And it malware think soft to because at look with last year-to-date volume draw those dynamics see in but seen And that and half have is that Latin the

Dirk Van de Put

But elasticity And volume-led and carefully, price of the add so dynamic year-to-date goal next increases we between that mix provide then current into we feel don't to the that we're we over our specific mix we volume the a we split on that XXXX, I would quite for have long the that studied can continue of growth like any seeing volume guidance pricing. of towards working year. are positive term, that and

Operator

comes our with of line question And Dickerson from Rob last the Bank. Deutsche

Robert Dickerson

I till just to, phrase. beat guess, I dead, the he's So excuse guess, my horse

increase though fair? the top between are pricing goal, in volume-driven a question. the maybe longer in even that of pricing the the there and, more XXXX still the have Just and the as That's Is upfront? it's we line target little categories, would have first bit tilted obviously, to that volume? price is across my thinking the would stressed, to Or term, balance a terms be 'XX, we that expectation

Dirk Van de Put

volume balance into good we're pricing that year. and just counting between to And Yes. mix it's -- the on same continue next

out. year. things at how see this the play similar But we the moment, for are something will planning to We

from and playing play that As to we around spending, we means allows around of said, get much us have volume. promotional with how will we with

that So huge it that going At current formula, XXXX. this us, it's and I pretty to it's extend stage, for wouldn't that be change we working expect year. we into next a can confident feel the for

Robert Dickerson

which Okay, fair. came be next that's below like the like the and a be growth by trends you the is It essentially of and you GDP said. would believe Day, may as sounds I improvements, biscuits, said QX year, expectation category growth. plan it, all may snacking what driven from have, showed, X% had more was, terms And Investor that strat then It just the all-in is, bit -- in items, I into in drive, housekeeping category favorable call seems bit. a let's

is of driven months. So expectations? complex is then there the changed terms And today. it did just looked over I was that into of changed really mentioned a had guess that And the effect that like bit year anything same the growth the of that in partially put simplistically, GDP the trajectory it and kind first is, out secondly Investor question biscuit 'XX? different you Day But like next for past your seem two currency you currency at off

two currency I'm to if relative were That's there 'XX. it. months So go-forward any for curious shifts just ago

Luca Zaramella

bit. lost takes. maybe had be the we with is Investor was that puts profit had a The can forex But impact. that, forex various And with markets, start the Day, There component and were but eurozone impact improved. for EPS to I as happened the in tell of emerging general, you me a we let coincidence. it Yes, the same

of refreshed it It happens the same. be to So week. last was as

is number same, the the it is a So but coincidence.

year that a year-to-date takes, be you where on terms year, is playing see next in of the is the us think we calls the we to gave out this categories, category, with next There which seen puts of dynamic that line in year. but for certainly, top and guidance for might basis. this for in snacking X.X% with line look, is the and line, and terms what year category, category In I X.X%, X% a we have

Dirk Van de Put

Okay.

So in closing, we results the I'm business work are proud the the of currently of that and seeing. across teams our

our which encouraged business do for excitement in the start America, us. particularly but would very generating that emerging I'm say the I derived. see and we significant business. new our amount course, where our for work that to in also North there to this markets, were Europe in opportunity future is growing. in quarter, by And is long-term our strategy of are of the growth progress be a strong We remains solid business to confident

are the is in overall, then to also And of what focus launch there incentive more a SnackFutures with thinking that of particularly new is steps is weeks. we scale mentioned capture good the test, we that our our come. change we a I'm of we our explained. as approach We more example and for in -- will we will are in on future and are model, more structure our M&A, our opportunity, building to capabilities learn that accountability. we taking is of drive which commercial is you greater and from And the and of I'm also planting local consumer-focused leadership changing. and in about increased inform innovation position are excited seeds and taking coming strengthen which further markets, here the growth platform, the

feel So this coming quarter next then about good good about the quarters year. we and and

more company. to quarters the you interest in you of sharing with to forward our in the look and progress thank come, for your I So

Operator

This concludes call. today's

You now may disconnect.

Mondelez International (MDLZ) 30 Oct 182018 Q3 Earnings call transcript