MDLZ - Earnings call transcript Q4 2020 | Mondelez International, Inc.

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Operator

Good day, and welcome to the Mondelez International Fourth Quarter 2020 Year-End Earnings Conference Call. Today's call is scheduled to last about one hour including remarks by Mondelez management and the question-and-answer session. [Operator Instructions] I would now like to turn the call over to Mr. Shep Dunlap, Vice President, Investor Relations for Mondelez. Please go ahead, sir.

Shep Dunlap

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

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

As unless which be adjust we'll our our we measures, items referencing certain discuss in included results noted as for financial GAAP today, our non-GAAP results. reported,

currency otherwise addition, basis unless In our a provide we noted. year-over-year growth constant on

and provide of presentation. the and business turn release with now non-GAAP GAAP find within reconciliations can We'll I'll outlook. will earnings slide then Q&A. back to the financials will comparable you the close With over Dirk and a You the that, call, call through GAAP to the at take Dirk. and update our Luca today's measures In our

Dirk Van de Put

proud us achievements including our in particularly and on of these for efforts COVID-XX, lines Thank you, all the those swift the to I today. QX In to strong the commitments by joining a our took achieve external actions the everyone Shep, in delivered milestones. teams, you challenging of we who pleased we front by successful our and and decisive and XXXX beyond our unprecedented and am continued environment. results our position response Mondelez thank helped full year on for you. was International marked for share with for conditions I am a XXXX call to for to grateful and year of company performance financial caused success even year.

biscuits another XXXX, categories consumers gains our plus year business, give This since to investment in and largest First share momentum products continued line and We of to we we particular, us achieved our working and exposure our capabilities revenue our have Go COVID-XX, exciting winners clear which growth. across snacking in of all, us adjacencies. chocolate. strategy & executing as organic we net added strategic chose sustained delivering growth more launching in led increased like bolt-on media agenda of very market made our in the and top record Despite and acquisitions, X% Give two growing fast Hu, e-commerce. against

an investment income operating the were and leverage business. that investments of costs, cost continued and faster and were spite volume the than helped revenue than many program XXXX and by effective through offset mitigation faster of able discipline. to we our supported Our COVID-XX-related increased cost costs In simplify grow

commitment on goals areas shareholders. ESG on only delivered strong year, targets. generate XXXX a other flow ESG, was delivered $X.X in ambitious to we also and Not new our financial set made We progress cash returned also we and XXXX our billion where like to strong

our colleagues entered of organization and growth sustain gains positioned of prioritized and of course year. initiatives. momentum, our result safety the as agenda the stronger throughout now existing a commitments enhanced of We efficient into well to our share with believe a D&I I the also future. emerged very are Overall, We record as good and we the we XXXX more

figures. you let results me with be walk On expect As full such, through Slide X, long-term of line for our on XXXX, our financial financial the I'll headlines the we targets. results. to focus our in year

growth, only with our growth the the we consumers. strength did show we brands revenue not beat net of organic to also Our competition, strong was X.X%, thanks

EPS adjusted a strategy, the adjusted of operating XXXX. external and to a set billion strong during cash demonstration an gross And mentioned, clear challenges. of flow is of growth X.X% even our generation billion as adjusted profit strength $X.X strong X.X%. Our versus was This severe and of grew leading $X at growth grew in results, of the income free our success X.X%, organization

Turning to the actions to Slide COVID-XX. highlight strategic emerge our we would X, I to took several like enable from to business of stronger

the quickly projects highest increase relating chain savings we became these of to disruptions, across nonworking potential. supply increased As offset the incremental But liquidity. like the and need trade to We media. our return capital the able to lockdowns, faced significantly to PPE. adaptations the We extent majority behind overheads, costs COVID-related working mitigate areas prioritized as were pandemic for well of opportunity through with as of we clear, the ways moved took and our costs expense to expenditure costs

maintain SKUs we our strength, brand took We opportunity to in top working media and reducing operations the turn momentum have media we material that also to the finally will line invested of And by the simplify in our continue number into XXXX. work realizing more low efficiencies. portfolio,

for Our of real a us swift difference to COVID-XX XXXX. reaction in point was

were of plans success. our their accelerated up all initiatives, and focused and in teams strategic some of us which for agile Our response, adjusted set we

held on commitments and release we with Turning investor stakeholders Right May to approach first topics In focused Made Slide and we We've the engaged investors, Right than Made our ESG X, Snacking more ever have our to on our remained our shareholders with many Snacking report. coinciding also governance. of before. call XXXX, sustainability

reducing as energy focus like environmental on well resources more Looking which ESG our as we impact, our across minimizing emissions. water involves and using agenda, critical our efficiently waste areas like and

build ingredients more we opportunity sustainable Generating where another inclusion wheat positive a where supply foster like chain. to a priority, with to and more impact social communities. cocoa is seek we resilient work local promote also and We

work in our to investment prevent our achievements cocoa labor continued advancing year, program, continued sustainability Cocoa organization, waste colleagues impact diversity am a emissions future the proud global including Life traceability for collaboration in with investing I $XXX COX to inclusion And efforts of and as in Our working our communities forest in areas, and commitments meeting commitments, global and an D&I commitment include child goals, and increased of of monitoring plans for established for programs and sustainable oil we well our in our sustainable multi-year and reduction palm our the key all leadership terms two XXXX new suppliers. plastics, on more as as million social which operate.

relief and also made evident where on impact even for contribution. we $XX make the our that to COVID efforts This more world. like potential am company positive glad year was million an was donated the ours We around the nearly in I the world, a

me little X, on let Slide more Finally Hu. acquisition our of share a color recently announced

This XXXX. States. many a excited brand fast-growing a and portfolio in in will welcome be are to United already. snacking of our inspired leader products. Hu's on-trends well-being fully the We with familiar on minority investment board a following chocolate They vegan, specialty to them is in retailers paleo are premium

opportunities products, using opportunity Hu expanded is in in will Luca fit In brand a for the distribution addition interesting portfolio and to details the great recently plans to us hand adjacencies. I bringing our they our capabilities. chocolate that, have enter areas. and financial more to With on a the a key well-being/premium Overall, there high-double performance. snacking crackers business great and scale to our business is clear other into digits growing have and is

Luca Zaramella

everyone. and Thank you, afternoon Dirk, good

terms was strong respectively. delivered of the for for X.X%, Our and the X.X% a quarter, gains. volume-led and XXXX of and year the experienced growth, plus share execution disruptions. the the cash for digit performance height revenue which and X.X% year of COVID free grew includes for share and by revenue increased strong markets Developed markets the mid-single X.X% flow. decline profitability underpinned quarter X.X% in gains, growth during We year plus Emerging

quarter, of posted X.X%. we the For growth

North for growth & to in challenges additional headwinds we markets strong Latin in Europe is good in just of feel Some including predominantly small chocolate emerging X% Europe, to markets. across In QX. and continue to well category In biscuits, about revenue the Eastern recovered QX versus on has have AMEA impacts growth Gum grew growth with they the America, our This see in markets general, delivered related QX. biscuits in in and markets, Overall, in good of down we quite majority lockdown In consumption slowed elevated exposure. QX. continue and A both group first which emerging mid-single prospects, developed albeit delivered higher half. double-digit and to growth color base, we Candy America, digit our and over we their emerging continued in face economic after consistent future markets, QX.

resulting X for for growing world and and and pandemic. and investments. very than and also that the for headwinds elevated and of execution and it The vast to share. portfolio to points driver year meals grew portfolio This our performance. is delivered Slide This and above the high perform an But clear growth the important and be strong and a X% share that we travel how and in performing from the during Jewels of due for advantaged is increased grew the this was category beverages retail year QX EMs brands gains on great the the our nearly includes continued double-digits Chocolate Biscuits good QX. too overall, Europe North big Oreo our mainly is negative and impact growth shows and to penetration. and in DMs X% page on quarter. has standout shows worldwide was top, to geographical biscuits year X% footprint of nearly have category meaningful in a America gain demand rates. growth lockdowns in brand results. a quarter. full business amplified powdered both of EMEA majority well well continue year this Local chocolate, Now XX strength as with a posted X% more an the in,

and Gum rate challenged Candy consumption overall by & by growth be Our negatively continues reduced on-the-go impacted restrictions. and is mobility to

we improvements expect versus terms expectations. XXXX, of QX, we did not category we those see prudent in in While QX gradual through improvement do material but are

brands, quarter. and review including results step a on portfolio throughout in share and the share fourth up performance great and year, local XX. execution, let's Through trusted our posted we the working of significant Slide Now in market global consistent media

our of year. gain last For XX% revenue our base, in share the we XX% from year, up had

Our largest million Notable the our for in chocolate as base. quarter and and our was our China and cost U.S., costs. leverage was quarter $XXX share included Australia, driven UK, delivered in strong the Gross of performance programs. gain China of strong categories Russia, and XX% biscuits we biscuits; revenue of year XX% base Russia revenue strongly share gainers had and approximately especially Gum. and year Profitability and the light COVID-related by chocolate; for of volume growth for mitigation year profit

side, in the world demand retail On in Gum travel and flip lower resulted mix. unfavorable

about commodities working weighed Specifically for support made of to inflation a on ForEx-related double-digit to we growth in GP category. profitability we our and good lag in QX, our increases the brands including the and pricing and substantial have business sustain feel line. our investments drive the Overall, between momentum, further implementation and media our

Turning waste DSD despite XX% QX, reduction grew to America in X.X% X.X% elevated execution. performance North Slide effective investments double-digits. nearly fourth and grew the and was North for media and year more during consumption the on leverage, America OI quarter. the XX. pricing, and Volume working than the costs. X% by XX% down and year Europe X.X% performance for the gains significant during share strong were biscuit and driven gains. regional COVID-related overheads supported discipline quarter. drove significant this for Share management by grew Gum strong full year

by across UK, results driven QX our resulting share in the and Germany strengths markets, However, France, significant were including Russia gains. major

and around finish the season execution positively. helped Christmas the Sound us year activations

trends digits execution, which was X.X% severe grew that year, and mid-single mix recovery also we with meals the the year by X% have The business OI in and is in retail slightly COVID and grew growth to X That investments. second a half despite a result categories costs. the unfavorable for AMEA the dollar region. year headwind. for continue digit strong world chocolate nearly OI double-digits quarter, QX. our improved Biscuits well as growth negative posted India for double-digit X% and turned points in and said, We for QX year QX grow as sustaining travel the of across the after gains the much and was lockdowns. country's driven performers. up in low-single showing the in growth performing declining behind of share strong

India, in expanding to of growth our while continue lead biscuit the chocolate We platform.

OI impact in share in We of year the chocolate are quarter, for driven China slightly due market continued year X% the and helped country. just gum. Trends including gains increased year and of for performance markets biscuits digits AMEA this leverage with developed the and America in gains the AMEA significant by growth both the high-single very drive in growth pleased the to grew share by and for solid year. for to in investment. quarter. nearly A&C X% Latin includes back for route half. the the over dollars strong grew This increases Australia

region low-single Excluding declined Argentina, in the digit QX.

year for digits for top quarter. quarter, ForEx well digits were year the digit holes OI as weakness the in pipeline for quarter. for losses Adjusted the lockdowns impacted declined by for before the America the due year to Gum pandemic, the timing growth Brazil both primarily declined & over due year the the commodities XX% low-single LATAM in growth low-double bottom as is the Given mid-single Candy the & for for posted business category to the and of the versus high-single Gum the of XX% Candy and digits & scale for and quarter, Latin Mexico low-double both the declined Latin Gum pricing. digit most the XX% America market. dollars and and of and line.

in as expect profitability & net Candy improve we pricing in As as QX. improvements the the costs, Gum better region should some business beginning for of well

year, in despite We pressure. more the QX for media working invested in profit and have

EPS. year strong EPS reflected grew by mostly to X.X%. growth This driven revenue results. operating primarily Moving Full gains,

Now XX. billion. cash $X.X year full on free deliver Slide We flow of

the We we're on about continue to progress area this put great feel good focus making. and very

returned a were COVID purchases We capital debt to while after XX. year. share reinstating related billion volatility. rate XX% temporary active Slide November We billion than our more the dividend markets, to increase maturity. to our rates, an shareholders attractive at in refinancing This Turning in $X.X for and expanding in debt $X also average pause the significantly includes

some provide our in me an XXXX level, year financial expect let the we terms our details Now of high around outlook. At on-algorithm outlook.

revenue expectations to gains and predicated and chocolate smaller of that to some and brands experiencing net support share from our weaknesses macro This the overcome plus. retain organic see today X% in growth expect XXXX, well our working we in is and of continue are a sales in marketing biscuits. do on number we we particularly what some invest we markets. the developed of and to media be We Biscuits but continue behind our should markets XXXX and for will lapping elevated growth in capabilities

the side, the be in COVID. by there countries impacted categories some On recovery of flip should mostly

was to winning to deliver beat category guidance, that prudent we plan slowly. is while for lower do to year been the Overall category our as quarter, more share. mostly quality in strongest last our high continue provide XXXX. have We in recover expect gum to dynamics do QX assumptions, we growth We expect a for usually XXXX, quarterly rate given not QX but growth

continued of emerged headwinds we revenue upside our and COVID deliver a profit in We inflation EPS commodity and will stronger that more their environment. range. growth dollars, XXXX share the high-single expect in recessionary ForEx to weather costs certain management. sustain This subside implies Despite in to markets. transactional leverage This growth outlook expectation the as will our majority our of reflects digits benefits, improved the growth will initiatives transportation also and gains gross reinvest a volume well as and in step-up outlook

plus. coffee dynamics full to of in some today. profit and year. know will of billion. terms we line we cash the this approximately tax the related Peet's from as on cost $XXX rate adjusted impact headwinds XXXX includes mixed last and be participation we that, based for mid-XX%s throughout we the outlook, expenses generate cash in of respect coming repurchases to is JDE on primary the improve open should an to Interest With to low With still $X for effective impact is also share billion expect pricing outlook face effect. of net the price in $XXX that QX, in expect For million In flow, deferred resulting free This questions. what approximately estimated million. offerings of Headwinds approximately taxes let's tax $X

Operator

[Operator go Instructions] the from Lazar Your with first is of question line Andrew Please ahead. Barclays.

Andrew Lazar

Hi, question, Andrew. could. if Two part I

Mondelez that trying just maybe And and for describe flex there, dynamic about. upside the regarding to lapping respect visibility X% if initiatives of could benefiting that just you 'XX. you given and of if puts the growth some with Dirk and really how the I high-single a takes the EPS the curious I'm guidance, the Thank secondly key of potential see from would see the significant to and not then accelerated might what plus you. sense guidance COVID digit environment last level year to costs and sales maybe initiatives First some constant for of room is maybe the organic growth FX get you offsets for if there talked the you've some guess be? remains?

Dirk Van de Put

Thanks, right. all Okay, Andrew.

year. So plus for the X% next

that thing what's predict mind it's going difficult to want keep that very first happen. we to in is to The

the takes and we think least will quite at the environment our that like puts continue. I on delivered was Under looks of While surface, for financial a lot half it nicely in commitments first there XXXX. and

we will and the of vaccines in what consumption markets. it's see with happens consumer the very at-home emerging So the mobility in the early year, the and

tailwinds delivering be will is a a might up want to we and We third that feel step ourselves. and consecutive Andrew the do XXXX. all, ahead it where down, are get we it significantly to we gains. share very before of that of see you top well, as that biscuits So broad-based of from year have as significant and this say on-algorithm, the If on of don't chocolate categories that, is, break first I remember, enough asked, performing confident was

well that share. lapping categories in we we to despite continue perform believe and XXXX, still that to market the So will will continue gain

The solid 'XX. that, into mention I second very we have going would momentum tailwind, is

also in X% are third we growth quite rate the that be also see us push. that we to we be me, that then, was XXXX, so above will HX neglect should do weak HX, that working big retail And a Gum we also. step continuing. that a that invested we us help Our so of year heavily, believe in would continue that give a up with world media, Candy, some so can't travel emerging for In will in and markets, tailwind going the smaller lapping we in to and &

on the be of there relates us, will see, headwinds we start are the we separate them seen or the mobility the channels half fast would category it geographies, that assuming in for and movement will it's the consumers, not that will largely movement in a category year, the To to As big sorry. year I this based next with of that about categories, second year, back, come we much half haven't so how and of Gum categories. in first it's

we So to prudently want plan there.

but very of relates year in the world likely back the North emerging big gum geographies, are being, that in not is about to at assumed we nicely longer markets where there while Mexico, in challenged half well feel see like them going markets LATAM, channels, we've that a rate. markets high we they will And performing a business. for for also larger to it's travel be largely smaller time the and retail on-the-go have because consumption. first and we and coming As some QX, And BRIC a that Africa, quite back the it come other are

I plus. would with this stage, say X% So feel at we comfortable

to and how the yeah, ahead don't We will see but of get ourselves evolves, want see to we comes first how the situation quarter want along. be, we

Andrew Lazar

very much. Thanks

Shep Dunlap

to over hand might - you, I question. thank second Andrew. The

we I'm Luca to there. the hand and see EPS over what second question, The going about to

Luca Zaramella

Thank Dirk. you, Yes.

and me in you on profitability takes give So growth that. maybe We the is on puts with the key associated a step let volume that effect the back continued second leverage count and XXXX line. for and

I quite continue And expensive cocoa, algorithm, relatively all pricing saw a higher approach revenue You our offset but not a in inflation than to transportation remember, saw XXXX what materially growth disciplined that and moderately what certain pricing, than of, be higher what We elements to there and grains cost be component. packaging. critical said management a and are together mentioned want times currencies, than different to these our certain what we we years, call, volume commodities, leverage it in around we previous cost in times, XXXX. that peaks we is, inflation with are will types before. is will few costs few I in

that covered. good are well we of is part for So exposure most the

don't I cost this be control, expect said, there'll So more is, Dirk situation out top as to but of pressure. spiral reality

we interest. Andrew upside want we sustain take deliver to we expect have On line profit, costs what what be better seen so the against really invest and on XXXX. of we couple strides last COVID years. called the carry we most that we there benefits emerged degree of deliver one-third the speak, that that current of through have. other at to XXXX, out is XXXX. level to into what moderate will agenda of with the into top more in And be whether On freedom, we incurred continue share XXXX investment. stronger and will we had make cost even gains as roughly we we And tax lines, The will in in of the productivities to strategic will and in will

terms I hopefully assumptions that in and fair been have clear. think were of we

what to think I get. is are So going we EPS high-single digit

that call taxes answer, just underlying think to pay the billion billion. to roundabout is a flow and importantly actually free to coffee flow an what cash have we some round is cash $X up $X.X I on we related transactions plus

and also rely So profitability management. capital good there continued working clearly on that numbers

Operator

Ken Your JPMorgan. Goldman of the is ahead. line from next go with Please question

Ken Goldman

guidance regarding line, wanted currency I a this is you're to a everybody. to probably to some that. Thanks, the to given expecting better I that $X.XX to or I wanted bottom the what being to I the make to just flow year. understood sure through bottom wanted about line tailwind ask about is $X.XX so modeling just of reinvest additional think may speak? that sort get sense the reinvesting how you and of just possible we of history should that, your of those earnings, maximum about

Luca Zaramella

Yes, is it and is I'll current spot and start translation it based rates. on

are $X.XX they they here or time, change EPS. the to whether we So going is this improve stance our or pure the stay investment upside worsen, point they posture. in not to on At

Ken Goldman

that up repo. see I'll one. surprised I that's to flexible, billion more the I then was follow look $X little on bit think, is, implies? $X have, in guidance billion buyback but shouldn't And Why a we offline to question billion you and know I another my balance what second a $X.X share in you're expecting for generate little that on billion. for sheet, $X aggressive XXXX do the

Luca Zaramella

fine coffee guidance we terms something saying of buybacks, in great and number. our with you tune cash along, and coming should what might in do we not of acquisitions Because provides us we have to and some flexibility, decide We're the flow that we are EPS we more be better, keep terms share right. be consistent flexible will should say

at is we today circumstances way billion. the as will I least same look at should stay the have you the think do to it $X

Operator

from of Powers is Your Deutsche next ahead. Please Bank. the Steve question with line go

Steve Powers

for dynamics bridge I was a be - year-over-year 'XX what what And as I versus it gross pricing on manage is, the little in quarter? ambitious. So gross even this is know, maybe guess because up a seems into you, I assuming America, to the as you moving the as of catch end, Latin don't inflation know you margin moving parts looking you're in margin, the for bit really in up Luca, mentioned, those follow-on then margins like with trying I being building it more 'XX the but but I'm mean question understand in inflation a you in about that seems don't I could the gross

efficiency So to around if G&A are love margins, you think the I that flow through coming guess improve well that what will And that you enable the can color then year EPS I'd might working some planning called higher the don't be in you gross sources not you as media as investments on also that. as it, out? curious of the

Luca Zaramella

Yes.

in I there at you and overall look the COVID pretty to were is margins, and a much is tell they I out, clearly the expectations. the and with is gross I catch the would and gross And level decline lines. that I resulted There XX% line, fact a catch the profit is category quite that strip out So Gum and is was out of an big category line in COVID profitability take that about was particularly & Candy with sound. think I stripping of P&L the I costs. few & think extra is I say type volume a what under when XX%, profitable In is, impact year around in cost that due what category sub-scale can XXXX on if a that absorption Candy, Gum a suffered that of that in regard,

the shares coverage we that in we little stock we high Christmas quite Christmas bit in haven't price of implemented And the second we the to happen. couple we We to more will world that coverage mind, running things we a actions around impact was in consumer one as in thing priced in had impact. few rate spent places an subdued of a attempt prices fully were pricing exchange out sure record would is, of America, and material but what didn't which have a season in and we out that need particularly have the Latin know quite ahead making afraid run We bear that's a we of afterwards was rotating, are.

that say would concerning about me there So nothing terms, is structural this gross at profit. I point that is in

happens The think will in which terms Gum something But P&L gross a you is will makes will around actions sound, we that level know pricing which we in control. see recovery the the sense we XXXX. profit world. I level I don't structure, depend of to we & have be profit think announced on and obviously of of fully of fully in XXXX at gross see Candy, don't that

ForEx when for same excluding terrific productivities A&C, costs, a in we overhead vast count almost visibility We continue in XXXX. basis by recover. at XXXX. to by and in way, We the on in I the XXXX delivered COVID and points of it the majority sound level have we and commodity look costs did job to the And keeping XX pressure pipeline We the excluding cost reducing overhead control. line, want the

So say, would I bit point, in overall for of XXXX GP, little good from a I there my side at feel effect be might this timing QX.

Operator

Your question from Jason the of Please with Sachs. next is English ahead. go Goldman line

Jason English

for pretty me for sliding in and you crazy successfully year a us. navigating congratulation Thank behind

I'm here this superior superior of hotly share a I details so look a asked against and at the a is on that Europe guidance. chain mean allowing sustained market allowing conversations or where - sustain incremental DMs little in share you and What much Based sort service crazy. levels, have North or some gained think of from all you benefit one to for gives is year of have is confidence again and to North year. or lot do I at your next debate those you guessing the those gains we - so the think your reality that gains do the this It's less year or fault given way ability you of is where the naturally year? on degree supply transitory next in comment argument is your the with about scale investor get hope so DSD share what organization underpinning There you've unwind who warehouse these with most much. you performance of service that a believe your assumptions Let's is some the versus benefits that there others thank levels color also your share America you're people area a once America the going pressure debated DSD is you see

Dirk Van de Put

a say, would arguments. is of I number Yes. there

categories base if is, QX, share that that we in plus gains gains are then higher where so also are gaining and gain where in - share was with at to of the DSD are you - the fade, we and incurred continuing effect you QX revenue in itself share gain. share that the have share what The they at of in and much strong, our second we in of XX% had year. remained share quite gain 'XX in one a holding we is already QX first substantial. pretty The and our that happened in quarter shine system not The have the look in 'XX. is there our gains And didn't good. our our Jason, around we expected world but just describing, this of could the It's largest sort performance quite U.S., we than you we XXXX look

look increase can being, make a constantly financial I growth effect order to First if to continue what would whatever are are all, sure we afford equation that in bit 'XX, about we happen? talked you've doesn't to and that push in and that little So our we have do we are investments substantially reinvest it, then line, up. going of we bottom for to the our into planning over-deliver going do to going forward, our to time

some Second, channels having very we are e-commerce. particularly effect good

home, preparing retail us world from a stores. boost, convenience are and will fast give away travel very We also which also move to

boost So will extra we us give also sure there. anybody else than that that move an and will make faster we

good and compared our normal is Our it time. customer to service good. well, for in COVID, had but very because as good chain really of it's still was perform room improvement supply times was there not it is We good the

lot able a were curious into think quite on in order will doing our retain consumers RGM we We've consumers. service. points So from and are to our to And protect customer lot key And see brands. we retain gained next new upside our was seen of of have going then that We we're QX a We an here we what price the still since work year. I'm happen also to I've to to very them in strong were able and program probably again to then QX. that and counting we a into do again in innovation and have be strongest in activation.

our good going market momentum of - to about because forward. opportunity those come feel our all So in share continue pretty to I reasons,

Operator

Morgan go next Mohsenian Your Dara with the is line Please ahead. from question of Stanley.

Dara Mohsenian

you just areas you after gum expecting. then So an could relative were just much on a but perhaps maybe continuing the growth, like are I XXXX. there organic and in Is in market are expecting it in we Obviously, or share it category magnitude, travel areas gains you wondering was chocolate share XXXX in gains XXXX. the strong the And growth biscuits XXXX smaller? XXXX? expecting clarity sounds down, down were there helpful. other are similar sequentially overall sales like second parse saw category that on you market it's are like was growth to acceleration that improved retail significantly some How

see that of overall just thinking are you overall? for to about in if So growth? growth category curious you acceleration relative How XXXX and any XXXX there sort

Dirk Van de Put

we've the magnitude be we I continue I sales gained magnitude, reasonable and that we just you but our market or Yes. but we to Well, that don't the communicate can tell I give in not We the the XXXX. it to assumption. that lesser of say, think on relates gains, a gain have would organic we share magnitude, increase countries to as planning expect are it's will share and growth a where share, share gains, seen

in it you retail. versus decline to and away where which declining X.X%. the the world was from home a XXXX category saw measured the have growth travel rates, were then slight was XXXX of we And channels, which As for like course relates unmeasured channels, it a X.X%

So likely if total you our category market share growth minor growth would add of those channels in to of it, gains you most and our driven were the the probably was by XXXX. looking very very, outperformance at

growth we expecting measured is the with least going back the are customers to from channels the 'XX, - and the that slow into the same, measured some maybe will at unmeasured I that combination about slightly channels, next that norm channel mean think of year, the reversion so the what the so as in that but will ease, the less. the restriction two remain will

talking hope much have we I helpful. on as to we to that's so about. the growth get And gains don't to that are share count

Dara Mohsenian

half. I'm And on line, half in up in just first other feeling front you did competitors? one clearly same half the question after of share terms wondering you then Thanks. guys year second the leaving A&C pullback in see marketplace of back the the ramped voice in Did - the you the increased about the How ad are in efforts year of ad of XXXX? on from your the generally and spend the a spend

Dirk Van de Put

and didn't their are has on if I say, spend, Luca voice done Yes, in much little they about in spend remained bit that came that. it to of about wants And as would so would but I share don't increasing something competition, I has comment our know, that back also everybody the HX. investments, to relates say the same. quickly same, QX can a I our say

cannot about of what major I year, So happen to just in any going see we I but there, predict are know what's don't the differences I to beginning do. the

a want So overall about investments. to our maybe Luca bit talk little you

Luca Zaramella

Yes.

it you XX%. So stepped in think the material but to keep working same plan are of particularly you've seen level the is in media in Dirk, out the terms second investments, we that right, half, We we I growing XXXX. called up increases of

comes which quality investment our brands. building improved behind putting are together with high So in working continuous we means we ROI, a on media are importantly media which

are ROI in little which into overall than digital, more We in media general again media ROI. terms of other commands working the spending a regular the third, channels. essence And investing more nonworking bit diverting improves

the a in return more for that and and terms we favor said I on what of at the market increasing invested didn't and what competitors, of the And fact and one to innovation activating having is between that, in spend. well, we compounded for had advantages people And other at think the of our the company, slow and is beginning there the of that think it effectively that at point clearly meaningful we but continued share means, again, overall others. down look situation that investment clear we normalized I yes, for when is have we So effect we supply QX better us chain franchises as more, we to sales. have we crisis, drivers are a

Operator

from next with is Please America. line Bank of Spillane Bryan the go Your ahead. question of

Bryan Spillane

ones Couple of me. quick from

I Luca, for it capital First, missed but spending? on know give guidance I or you don't if not, 'XX did

Luca Zaramella

That's didn't, I No, I have but X.X%. number in to mind. think is have it you the

Bryan Spillane

And in XXXX or over faster markets. then grew North of again and kind particular for you XXXX, than modeling second one developing just developed in emerging to in America. markets X% I grew emerging out with mean regard revenues

So And how that than are emerging we're you emerging second, expect something that to North and that kind that developing of grow we to off of is, developed? 'XX, strong - that is thinking would then comp grow flip, 'XX? about contribution actually given faster expecting balance in and in America,

Luca Zaramella

We what I sense. stay guidance from provide usually away I would makes and are like you but - saying think segment don't to that, the

Now has I that have bear got you mind developed to wasn't stellar retail material Europe think QX, that within impact. in a that in market, in travel it world Europe

So I expect Europe to grow.

are in the we as that be the North of believe QX the lapping comes second the are obviously, positive part in in respectively think case QX But so XX% and gum I would will comparison. I have of hopefully year, XX%, easier toughest and numbers impact. we America, back, then a a

that acquired last quite put we plans for years. together putting in three few We together good the have actually and platforms we are acquisition the

just double-digit, QX, together so grew And in developed almost was about it more emerging America America is by Gum developing should come in XX% Brazil nicely I Russia. from Latin half. really again more wouldn't double-digit. markets, but as of think are that America markets, conclusion grew numbers, North there that the China Candy. & of positive seeing. But shy lapping them overall. so some what all particularly in happy I'm I did North QX because markets In grew Clearly, the again, I'm double-digit better. so I'm digits be first are of start grew is about draw to than high-single India impacted it that we bundled in evolution the there

so. X% look you think have or growth X.X% XXXX, you will grow categories I at and always in step said as back category we

but puts and Candy I should category lower expect think of in being on a more biscuit being the clearly, of much takes, you the that should expect and the towards positive, neighborhood growth X% top you growth & bit all category same Gum type little with of shares.

Operator

Fargo. next go is Your John question Please ahead. Wells from line with the Baumgartner of

John Baumgartner

Luca, two part me. for

for better driving to line you in-store First programming media better big that theme cost the off, do you or here first could media past improvement activation just local top then the return leverages a over improvements And it's quality reinvestment two straight again years better if higher other much attribute has in from behind what's agency the wondering that and speak from I'm to on How been the investment. spending consolidations from how spend? much whether aspects, and even XXXX.

Luca Zaramella

of this view, I'll here. is maybe Yes, Dirk I the I let but have point a expert one. Dirk I take think mean

So yeah, Dirk.

Dirk Van de Put

all, a working of What my have Yes. in done our we bit opinion, is A&C we've budget. have our balance was, we around been media first little Well, off. the increased shifting and to

effect So net that of same the commenting have On in and Luca going that, significant, we're and so in percentage of of A&C revenue we overall do our we the budget in top been are increased we continuing 'XX net to and was the in media as have last year, effect has 'XX. in 'XX. increasing

digital. The ROI a of driver increased third our switch to bigger is

of big on of have to much Lady say, brands, would done last Oreo Gaga know effect, our on now work number are we effect, that's really XX% is mention ROI the for well of we've today. of in done really our And strides, effect and is increase better Cadbury, consumers. the communication, in call investment stores Milk, worked above can lot a then Oreo, our have purpose, things we that instance, our - the a I So digital some much we drive to fact targeting better hit that that we we had a a for it, big worked going on and

of many the negotiation. I think big biggest effect, that's it, I and is generating word, is some these of things. on and not done a maybe lot if say we've it's There margin buzz minor is some a it can agency well but minor, rationalization, driver

of So that not some driver - biggest the not there certainly what is there, of done. in but we've that is

John Baumgartner

secondly, Thanks Dirk. I I'll appreciate for Lady just Gaga. look then that. a there. the And follow-up

driving your may pricing even Going operationally benefits back yes, for think stock that To what to on curious, I'm where trickle the extent maybe you FX, in translation that also some we've fully years even the some seen volume your doesn't growth from appreciate to leave reverse markets. foreign EPS maybe potential in do to valuation? benefits FX headwinds of in them the market take you'll extent but down now now of number and those for a favor or

Luca Zaramella

the progress And a to and The the provide while due translation it terms we in have $X.XX perspective. Yeah. say years. in to believe be over But adds made for last three to fair the value it company in John, behind we we class. some best peer has leave the three still Thank you, to fair Clearly, average of pickup Mondelez. of that EPS last valuation years, market question. improved of let stand the the as to stock is me I clearly determine great in

record over parts. exposure, I is would that conclusion over category years, we so and I with frankly that gap reflected consider over that close. and assume of are geographic three valuation will the And hopefully same say, time portfolio, would should be When our the I some that the that quite last we in well positioned the track the time have, brands our the

quality adding at upside, to should I obviously there EPS, at to the So I decide. I EPS spot think it of the but be the leave we're when think that market and I look rate, step $X.XX back of I current

a think a and I transaction had businesses entities also clearly point ForEx, about transaction covered the the But are is have around we for call ForEx we we we gave. all embedded guidance world. you ForEx, what remember, that benefit the transaction into

So asking. addressed were points a you hopefully, I couple of

Operator

Your go ahead. Growe with comes of the next Please Chris line question from Stifel.

Chris Growe

high and you've you, ask to I inflation offset pricing the and the wanted you pricing. level, guess costs year, been for around you just on for to I of I to been represent And could talk have a do your from a discussion as just if just expect about following I would about be typical it's kind would pricing year? growth think just year, assumption up the that did the of organic half catching costs? for pricing revenue reasonable with then had roughly

Luca Zaramella

- said, split component should don't think recuperated it going is the QX Yeah. bit is QX, Maybe is in less. there I plausible, will more major little that there slightly be the would bit effect it timing as be fully a is of a a in more to that that, little pricing, but XX-XX given XXXX, we be maybe into a a fact think still I be something one,

think all I question offsetting your costs. to about your you are

inflation be we be get gross close expect to that qualifier as year COVID. expecting one XXXX, time of without I without enter And run number COVID over cost the and would the rate or as the and fact us without think we we the and is we of the that building I fully will more level the of should subsiding, COVID of the time, invest the our to the blocks so end the we has being be always been be is to that price profit in would believe COVID, we as inflation want disciplined, company. same Over one at price we able been to have intention. with

Chris Growe

follow for color. a And Okay, on. thank quick then had that you I just

is improvement, that implementing a you're a better want as that just a does the volume is that much a year, occurring provide sense maybe of a - program. reduction about And meaningful SKU where get and talked just in that fits I this You've with we to weight pretty reduction expected perhaps I to but on seeing program? mix of you for and SKU get answer, stand the but want sense

Dirk Van de Put

answer yes. Yes, Okay. short is, to the that

track a broader drive to bottom on and and are both in of We simplification order line line. really it's program top part

SKUs, review reduction a innovation innovation are our So doing brands. strategic also of we and then a initiatives, the of of reduction of bigger it's number initiatives

We to are no aiming category for in another. XX% every reduction region, is there SKU one or

don't we our to done space in minimize have SKU so And Year to New right try are now reduction the now. first they their because going quarter do right of And what the the are make Europe need to only any can in manufacturing stopped that 'XX, in double-digit be changes already into more so we take we I instance a achieved - that in do account reduction sense have we've those reductions and also for shelf to waste. we so protecting

benefits not X%, instance, inventories. as our to less negative top will once level our - better fine. we forward, expecting since only we new for relates aiming And customer that products. to X% be to SKU - we of keeping mention forward to reach one-out We for we're there number any XX% should and lower in space it And strict effect we reduction apply line manufacturing, represent important this complexity so very to going - the are keep the count approach of were going shelf a going service, probably is and a is we one-in

space and top - sales - more which SKU. we have we to our so for more And also selling seems

delivery will that over a our help, massively algorithm. be So but it's going support it's won't a margin. margin improve, to perspective it though. to gross opinion It the will will not you improved It transformative long-term the from see

Operator

Dickerson Jefferies. And ahead. line with your from Please final the question Rob comes of go

Rob Dickerson

over well with you much terms so you opportunity very One for that portfolio broader continue gluten-free to to well-being gluten-free out opportunity a brands core seen we've distribution some lot new that going sustainability with focus. acquisition argue guess time recently well, is kind is then forward, at in obviously obviously do could even well-being, of if full the question me of Oreo but fitting brands that more have, Hu, kind of but there's the Dirk, in cookie, I continue of and of time side. innovation position kind same you of of in call to the kind obviously that in. Thanks a just do a your still this

now bit be course or you little if think broader survey of side? just going also that's if how well-being So Thanks. with go you new could providing you kind internally, some kind R&D little just a just how kind do it. kind And always forward time of, leverage also of, maybe of then core kind of the you that the that of forward tie-in are brands on you you have spend about acquisition a have, how your could kind capabilities work, maybe and you color make about of but maybe the still opportunities trend with thinking to brands on then will in sure the what you of

Dirk Van de Put

a bit question in links SKU. about with It that little Okay.

at or certain grow have it launch new sub-brands way brands sales potential need by or to the new now have certain level the of they right to new SKUs a we So need brands, we to look and to level. a is they or if

that more have indulgence majority and mixed time mix, of Every is more our faster it's but it do what we in it amount and you that more, if to very - is carefully health between you growth are at wellness health of in wouldn't stage, keep balance smaller. that, and I be, is and order as to because that certainly the over year, be analysis, growing can to like but call rate, but do. we So wellness health this to wellness manage it's what there certainly an honest trying the

you lot do we of and to if moment need growth both to need at look rate, we the at a so more And mixed do indulgence.

it As health and to XX continue is innovation, are looking health wellness. areas are more And we say, ingredients, internally more wellness is, that one with that the Oreo exposure mix see we and nutritional think an The we that at will accompany thinking acquire and how improve, if let's are indulgence and that our it externally with do team our of and and more in. mix an health-conscious to clearly, acquisition wellness, continue we we to relates perspective, to and how to R&D to example that can need gluten-free, increase we balance in and to more we has about that R&D we the shift products from particularly want years, what big about I the more expect versus will health next between get gradually sense. and so consumers also the interested composition, can launch an

we ingredient that products, improving of bar then really than sales then in sort acquisitions in-house, focused we is brands our the take paleo sort And and of on, but going of in in are that world. to mainly and an we're segment over new, are number the lines There those and U.S. we is the we your of big do. health that wellness considered have is very, continue instance, a what big to think so current is of the there time time, portion areas control bars sort other - the of to or so do wellness, for then market, of portfolio. of will trying around up in part natural one with it's sell new of upgrading are a and particularly as And a that we will the develop, healthiest trying breakthrough products then of developed local there the is you health perfect but vegan big of are we bites to further Hu and in ingredient is course we quite sourcing another is we market energy for credentials portions reduce considering that and consumer healthy talked that is that. that or panel. the to type the one very cleaning use So also tests the and better your functional goes all And a foothold consumer our very space, much some so the we big, the products way things on the like we completely do small in have consumes, about benefits, number take of

big that will going introducing approach So wellness side. of wellness are balanced what before. I the you from was on yeah, But and would groups I what a very ones health gradually focused were more say our and health and see the products we through

Operator

this at questions time. And there no are more

Dirk Van de Put

sorry the ahead. end. that's think I go Yes,

Operator

questions And back there closing I turn for call more no the remarks. at management like are to to this would time.

Dirk Van de Put

jumping your good very for about the feel gun we've in was here. time, feel much the you company. thank ended XXXX. good XXXX. where I We interest your We Well,

momentum. feel have coming We We are we from of position strength. a

be good news And hope the provide you. go we you as year. so Thank some to able through to we

Luca Zaramella

everyone. you, Thank

Operator

this participation. Ladies call. you your conference for Thank concludes today's gentlemen, and

now may disconnect You lines. your

Mondelez International (MDLZ) 29 Jan 212020 Q4 Earnings call transcript