Earnings call transcript Q2 2023

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Operator

Good day and welcome to the Mondelez International Second Quarter 2023 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'd now like to turn the call over to Mr. Shep Dunlap, Vice President, Investor Relations for Mondelez. sir. ahead, go Please

Shep Dunlap

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

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

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

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

and the presentation. non-GAAP and the back measures You of earnings can within GAAP release slide GAAP find our at to the comparable reconciliations

Today, our update, Dirk will provide a Luca. results outlook financial review strategy by by followed and a business and of

close We Q&A. with will

now to Dirk. over turn the I'll call

Dirk Van de Put

half top-line the during thanks to that joining slide broad-based everyone delivered for four. I the of share today. Thanks, Shep, strong start and I'm will first to pleased the year. call we on growth

expected pricing driven performance was four to driven lone by with Our our strong growth retailer by combined disruption three the volume due exception of effective negotiations. in healthy regions. was Europe

see and and continue momentum We categories. our we solid robust consumer on strategy long-term across to and confidence geographies execute

we in about remainder We our behind with Europe, With customer good closing successfully negotiations the increases us, line our year expectations. Europe. in the implemented in this of price planned feel

confidence. about continued We also feel consumer good

our both our drive majority robust across resulting growth. demand value in continue businesses, categories vast core volume to We in the and of

cost by to Our cost and driven pricing profit dollar growth offset inflation. was discipline strong

our world-class capabilities proven We we team strong and another to by reshaping to well that strategy remain and our confident continue us our invest initiatives portfolio deliver in compound delivered to year. and brands, accelerate growth positions

and the our year on Based EPS performance we businesses, across organic half raising growth full and outlook plus. view are latest revenue adjusted net first strength of to XX% our our

to five. Turning slide

You can our momentum see continued business. XXXX across entire of first showed the that half

net nearly We versus first prior of quarter. $X.X of billion, in organic XXXX. ahead delivered revenue This already the and includes significantly growth half XX.X% growth strong the XX% a full up year our year for XX%

than of pace We well also adjusted $X dollar are delivered year's growth more Again, last gross growth. XX.X% ahead profit we of billion. with

our further enable of investing and us to which continue team's focus We continued agility, are to drive proud growth acceleration.

investment A&C half adjusted year's up XX% XX% year. pace. the is close strong OI and ahead Our increasing of into of These to the $XXX growth first results well translated last million, in again of

acceleration a see in you can action. of our On slide brand six, strategy examples few

Our continued our growth and execution creative in-store personalization are scale in resulting categories Biscuits in increases sales combined at strong continued Baked brand investments loyalty assets, with Chocolates, and Snacks. and in of core innovation

Oreo the launched of of velocity China already cookie by the of cake leading new as world's this large in a name packaged Oreo Airy achieved March in its market the we driven in example, Cake For XX% and X.X% the competitor share strength favourite stores. has

adjacent most to expand our markets. of just key and innovations one one our is is China spaces example numerous And into of important emerging formats. This brands

step renovate tastes. stay recipes our of also customer a consumer ahead to are continuing and to We changing

example is our a commitment under great For calories of for consumers instance, mindfully. XXX treat we adults. recently launched snack to This help first our Cadbury

our advancing further In improving in both education service digitally We to and portion-controlled efficiencies, Snacks are Bar. productivity and and media continuing accelerate Clif to products, our We performance on brand range focused remain strengthen and top packs portion-controlled in equity. bottom-line effectiveness and pack. both while offering on continue levels spend segment, supply-chain of and a Baked also the broader we campaigns but

brands. also for new are jewel loyalty continuing We to introduce culturally strengthen to flavors local our relevant consumer

Lacta for For over Brazilian has in a years. chocolate been XXX leader example,

of the filled tablets Oreo that Following out with products new rolled Brazilians know recently two extensions Lacta Lacta successful additional love. already and launch with line filled we

There's in well filled wafers and Sonho Valsa Branco white bonbons made and as chocolate. cream Ouro made cashew filling de chocolate covered with with nut chocolate with as candies

our in flavor a investing biscuits ways. combinations growth continuously These our of brands chocolate, consumers pack are sizes and teams new drive incrementality to are just and snacks our that franchises iconic experience encourage ways the examples few new and in innovative baked driving formats in

Within cakes and the in growing are snacks rapidly especially segment we about pastry performance excited the strong baked space. our

Let's seven. take slide on closer look a

Earlier, the into a choco-bakery, pastries. Oreo in Similarly, and great solid we example franchises cakes our and in emerging brand Airy of are efforts I mentioned as acceleration China markets, making cookie expanding our in Cake successful chocolate markets. developed in progress

of Oreo cakes Since favorite, United snacks perform in a recent For fan States, already the this X.X are the earned of has share packaged Cakesters launch to instance, well. continuing it

the Give mini lineup pricing where North adjacencies success are baked by driven innovation. test number a footprint Go to such American strong expansion is package markets. and recent another we plans year-to-date, in with exciting have XDays including emerging as is as donuts, position snacks we Europe, continuing to and Meantime, X.X number one execution, its & trials learn continues and and advance solid solid continue Europe, story demand. our up croissant, to Share drive in of grow in distribution to beyond category into

eight. slide to Turning

the Kingdom, such in our partnerships Philippines, of United and markets Poland, position up in to emerging commerce and Brazil, are while customers. XX% brands capabilities I'm year-to-date. Mexico, United invest share and to while India, in and achieved digital over-delivering France, top markets our commerce market growth one to the States, with revenue continue up-and-coming as China, Brazil, that we number five which pleased have strengthening our leading support in tools management share We digital

our to capabilities strengthen eBXB and partnerships accelerating distribution customers. key with continue expand We

increased in value are offset strategies our RGM investments Additionally, and to inflationary strong helping driving elevating actions realization, pressures.

new in assessments, comprehensive teams digital program. RGM key proprietary dedicated appointed training a with analytics supported all markets and and tools and have leadership data We

We are growth, will ongoing confident in margin. deliver sustainable improvements and efficiency, investments these that ultimately

latest am our our to areas. social, with performance, we to in strategy. share in our that and Made In environmental, Snacking financial make XXXX governance pleased documenting I our published and continue Along report priority significant Right May, progress we advancing goals our performance reinforcing annual

ingredients include increasing and sustainably, emissions recyclable reducing sourcing These key carbon more packaging.

as more portion mindfully suppliers and and portion are packs. increased education We focus in through consumers equity, diversity, inclusion, on partnership as and internally helping and improving snack improved well also impact in social both with performance single our

areas important more Made an to value integral context positive our Right to helping read continue believe for of returns at encourage on all our for part that report We creation our drive scale across positive with change you details stakeholders. progress. Snacking to is these We and

I'll turn that, With on share it insights financials. over to Luca additional our to

Luca Zaramella

Thank enable growth execution, brand you, another each strong net and for Double-digit afternoon. continue Dirk, strong region, dollar sound value marked organic reinvestment creation. business. significant quarter driving us sustainable our to pricing profit revenue good QX and growth across

was North plus XX.X% X%, more Revenue volume despite mix even expected quarter, volume America, total QX disruption EMEA. this was company the flat in impressive. last Europe. year's grew volume mix for and in plus making mix customer Latin growth the with performance Recall strong Overall America,

Emerging across markets of XX%, numbers grew significant markets. with than more strong performance

While strength with customer both developed America balanced despite North XX% Europe markets disruption. grew from and and

Give of and quarter businesses increases double-digit deliver growth. Turning Biscuits, Biscuits Chocolates, all Go, & QX. Club posted to double-digit another XX.X%. Chips Gum and portfolio Ahoy!, performance Social Candy on increased TUC plus slide Ritz, XX. in all Oreo,

posted in Milk, developed delivered emerging Milka, growth. grew double-digit Lacta, Toblerone Cadbury Dairy Chocolate markets. Clif XX.X% though not with inorganic also strength increases. and strong both plus all

are quarter which on core performance pleased the We solid biscuits trajectory. by are disruption and in chocolate of albeit a of very customer the impacted with categories our

both For more Gum in that and are units grew move volume as we in business year our with Europe markets. trends behind negotiations emerging good Candy XX% in than expect us. forward now especially we the across momentum

continues on XX. inventory share market XX% ended share QX We review or let's and US with and held performance levels. on-shelf make improvements our of and The to good Now in revenue availability base. slide gained service-level

page year-over-year by gross in million QX profit top-line gross in or in by XX% deliver also growth expansion This expected We XX. driven in regions $XXX resulted to was discipline. margin disruption. more except impacted than productivity Moving which all and cost Europe, customer

to Now as improvements flow is implemented, This provides Europe significant behind well that fuel invest expect our brands significant earnings too. through. pricing growth in as we

leverage, NOI double-digit mix by Europe Europe This XX. on delivering revenue growth Moving slide grew the that disruption. across delivered in also regions, growth. XX.X% We to impacted all with into increases growth while growth OI translated operating in regional plus pricing-related volume regions, but all double-digit got board. dollar performance

to will half lending has now pricing Importantly, lead performance. margin a this and better expect been second volume we and that

and Overall, the from is growth another while our of grocery in strength also percentage & driven posted versus and year. points OI we in of North Clif. with well operating business grew as saw and growth increase last and of base chocolate Go, consumer both and plus Perfect than X% more relatively margin Snacks XX.X% elasticity resilient our higher biscuit, holding cheese remains part mix deliver some Biscuits ventures, with volume pricing, up robust such our business. in and of by incremental Clif double-digit Give elasticity XX%, QX America dollar

have level but Now North America, revenue of synergies on still approaching material line. to profitability we both is total and the cost generate

still Asia, dollars synergy growth strong potential. than quarter. business that X%, Southeast and XX.X% more So plus growth all India, is X.X%. increased volume a growing Clif meaningful solid as some while AMEA posted with China, of top-line now margins grew is the mix for with

grew Mexico, in we benefits quarters. countries terms turned Ricolino the towards of all in than OI of and the with year. on integration, robust nearly to more begin America more XX% and capturing XX%. dollar Western of track expect growth Brazil, remains end Latin Andean

XX. XX.X% EPS Next currency on In nearly in plus constant XX% grew or to at dollars. quarter, the slide EPS reported

was half in first the billion slide XX. Free Turning return $X.X of capital flow to to with cash shareholders. in billion $X.X

We increase Mondelez. years the XX%, last increase dividends of of of history in marking also announced today plus the nine double-digit our eight in an a of

our XX. to page on Turning outlook

the plus we strong EPS. negotiations successful our revenue X% recent now original Europe, momentum of Given our XX% QX performance growth raising most top-line volume both X% of of the outlook We plus. outlook outlook year brands, growth for strength and of to our our our and are and first of expect versus XX% full the in half adjusted conclusion of

taxes cash XX% our Note, $X.X free of single-digits. to growth plus sell-down cash also the of and given KDP outlook high $XXX outlook million billion, EPS versus in outlook our unchanged of to position. XX% prior flow expected related at our is plus be remains the exit and original

terms and we packaging In key XXXX. cost expect increase to for ingredients, hedges by of assumptions favorable lapping continue in labor double-digit in 'XX, driven commodity elevated inflation a

respect to term-loan expense, With $XXX now interest for recent the year, coffee we given reductions. asset monetization and million expect

of to terms current We in year the leverage, mid-twos end based also on expect around conditions.

of EPS ForEx of headwinds there reminder, given a in to. outlook. As year our in recorded income be expect the dividend enough liquidation related our will to mid-July for KDP of We no impact now versus position $X.XX prior the $X.XX

does markets. some The elasticities, in deterioration emerging reinvestments, consumer consumption our revision Europe relatively Ongoing areas in This consider of surrounding as business. environment confidence current the pricing reflects outlook as benign and of our geopolitical completion categories, well of resilience our of outlook a year. increased material brand of health our not continued in

With line the for open that, let's questions.

Operator

Instructions] Barclays. with question our we'll Andrew first from [Operator Lazar take And

open. is line Your

Andrew Lazar

Thanks Appreciate so much. it. Great.

hoping a pricing are a as was the consumer the could recent of First notable relates off, talk volumes maybe any generally category Dirk, heard of have you? other one maybe things reported some, changes bit behavior, sort very about sluggishness it I landscape from retailer you destocking, for that that in competitiveness, in earnings has companies specifically. as And to Mondelez lapped. or way greater far like bunch inventory food of we've so and changes

Dirk Van de Put

we Andrew. performing. our Thanks, how obviously is on quite feel portfolio based and Well, good Okay. HX, about

in growth brought have regions, categories different in of our brands. We across the different the most

others. The well, to through pricing I compared went strong quite pricing, say would

growth that good in three very second four of due in will we see And mix growth have disrupted was we for Europe, foresee out regions. only was half customer the to volume but that disruption, and We that region the was Europe. solid volume

increasing, is Our share North is America recovered. finally

in gaining are on a of share AMEA. a share, course, bit disruption. of Europe, We that's but this client again drag still because of

bottom-line. the doing quite emerging see top the You'll in markets well, are our broadly that and

generating we So good are profit. gross

So we I can point well, to our are our continue acquisitions capabilities. to would invest brands and Clif. in strongly doing in The

say for really our a the particularly consumer We The have the we the least developed I pretty very, and improving would on environment in that seems and we whole in very price us, see sensitivity yeah categories, double-digit confidence. the bit the And at adjusted markets strong be look picture would looks say, consumer, it's PSO. plateauing, is emerging in solid. further good. market growth little I If emerging and to in

I increase If that it's largely but see strong competition, we I promo between some growth the and competition good the flat in will some us difference think top-line levels, with we the big down combined else. and think be Biscuit, very volume have levels promo about a in somewhere and

we prices needed. as percentage. than perspective, faster up have going a From prices done promo see even was pricing non-promo what We in

our is in exactly America Europe in line taken. of North on closed, December already plan. of pricing are and year. emerging So with expectations was most last in was 'XX markets done QX

hoping the the same, find that see you bag shopping then do around consumers know. really don't they And tend We low, is more, little deals. a shopping to see but less us. the to a quantity but been we bit The which frequently, nothing elasticity, trip preoccupies as has per shop elasticity, in change

we I half, say, we volume and here as the Europe strongest And so would will the HX. delivered will second Mondelez. be to recover believe close, is this And strong. the in have that

quite -- quite well So doing there. we are we think

down is but Europe, important that has It client very on a dynamic the for obviously environment. thing words has XX.X% most volume/mix demand growth, but was Top which probably was us, few primarily line due X.X us. disruption. good, a for Maybe quite been, points, through been the that

and reemphasize I plan. in all successfully pricing clients want that was have XXXX all line closed landed to the negotiations with

inflationary in to do some continuing in half some see going investments And XXXX. cocoa sugar costs will We strong into and second in Europe. are planning we the

are So and think through negotiations if are that on say, pricing HX. positive we us, you these okay, you behind

so And HX that will expect Europe what grow. in you our is could for volumes

to We in are store. ready execute

force have full with us, we can planned promotions go key again. behind this now negotiation We because

see I think as will our consequence a share improve. of that, you

start as year also fully We lapping recover our pricing And margins will start now prior implemented. the headwinds. to is

and margins. levels good news, three of think volume, I So share

low elasticity, Also Our to we you Consumers cheese do if well. Europe, about price despite inflation. categories there in little that's of strong our continue some of seem our talk uptick Yes, to or them. prioritize categories, a smaller in bit elasticities percentage but remain business. grocery see a an

on store. UK see at pretty see minor. The impact to seems stage. the gifting, they this bigger the to and on that in HFS seasonal the is consumer changes manageable but in chocolate We looks impact standard adjusting a be

gives good we Hope So that a you I second main expecting things. of a have all are would Andrew. the say half that the that news Europe is on top for other we picture,

Andrew Lazar

really really, No, complete. Yes.

raised XX% I currency appreciate quick expectations EPS is I plus. XX consensus to that. close plus from XX% one relatively company One mark. growth to already The constant very Luca. for So the guess

just in I so curious investors think the plus how So the guide. should much. guess Thanks about I'm

Luca Zaramella

Thank Yes. you, Andrew.

I go plus maybe Before new provide outlook. the on to what to underpins color some the briefly part,

terms outlook. important drivers I are three to point our in new of think to there

strong posting. of the half. of the I'm first the quality clearly One, part growth. is with results the operating we the EPS are it And happy importantly, particularly

as brands. fully a volume resilience lending the Europe and it and of I'm And expectations. we think continued third, few with value the and happy with investment. broad-based line times, of mentioned the our trends price I in really underlying business, with Second, is our growth

on Emerging word roll. maybe by are briefly So a geography. markets a

quite are happy. We

and areas Some pricing in is of are causing in really some but scheme elasticity, the of those market things. minority concern terms of important the the of big not

has Clif. improved we US said are QX. The implemented. P&L, that And last had we terrific in America and as quarter, Europe at North pleased we with very are the of a price XX% posting profitability But time, already and

and improvement we as revenue well pricing is Europe. margin that growth as XXX% secured, expect volume for Now

So and mind, under quite If we the good the prefer we I plus having the all there frankly, but XX% out belt things exceed we as then guidance narrow there play guidance, as a chance quarter that said, have QX. for exceed I is another are chances good in guidance. will

Bear strong. in mind we want that XXXX to start

of and we reinvest to to really And selectively upside EPS, so get some the upside if profitability of XXXX, a start in decide there fast terms into is too. might

Andrew Lazar

much. so Thanks

Luca Zaramella

Andrew. you, Thank

Operator

Spillane Bank Our with next Bryan question of America. comes from

open. Your line is

Bryan Spillane

Hey, thanks, operator. guys. afternoon, Good

Dirk Van de Put

Brian. Hi,

Luca Zaramella

Brian. Hi,

Bryan Spillane

net two interest got second on and on Hey, one questions, the Clif. guidance I one the

first Net just again a expense term interest I versus proceeds. think want million by guidance Luca. And make XQ. think to I were one where loan we you coming you, came maybe for of I $XX off million So the sure, with down out about KDP paid $XXX

So is a this there Or paying lower is loan the anything function simply off? of the else drove half on interest year term savings interest a just that expense? net

Luca Zaramella

it. is coming is that down. No, It debt

simple as see loan. which You're to end down it year. like to debt, as a at going term as is good. we X.X leverage yes, is the the We times us And good quite paying be plan

Bryan Spillane

expanding synergy. in and then prepared the Thanks. Clif you encouragingly, Dirk, margins about comments, talked of And right, then, segment guess, pretty there's on the also like your sounds approaching, then it revenue. in Okay. I And terms more level you're

acquisition should report might just think a can And as to expectations? acquired today model running forward? how kind give you be little where Is look we it Clif when we Clif was on So bit about ahead stand the progress integration maybe where it? you relative how us maybe and a of with you of impactful of just is your of kind

Dirk Van de Put

Yes.

seen in double-digit So margin very growth. first more the the X,XXX up points. margins, basis And the year previous OI we've is strong revenue versus half, than

some another increased January of in prices increased than August, Clif QX. I So first We've would in thing say. would and We the we've more increased aggressively in prices, later have done one prices historically.

low see elasticity, I we so say. And would

that's impact. So big having a

doing The operate started bit We second improved. reduced the we big a thing plants SKUs. that to service the better. is little we are And has

the that changed so plan. a promotional increase successfully given level. to And the we off. in Then good That has has kicked service

more efficient media thing is is buying Fourth that than theirs. our

to were also So able that. we some from get benefits

some taking number of integration we've systems things a well. to like is going But operate the a we So business steps, is one on place teams all those so later and on of done. where how we want are clarity the brought we've far, the streamlined in the integration The year. the big is more in that have

second But as and prepared of already half the but we benefit benefits, of this year real cost is the some still said we real remarks in that come. the largely in benefit it's to that it. synergies get from the will next seen We've beginning of year the

So to closing. was amount the business. close probably make say that by improves I It's I the billion a can margin calculation. That you its would $X

So have a that total will reasonable impact the company. on

Bryan Spillane

Thanks, Dirk. Luca. Thanks,

Luca Zaramella

Thank Bryan. you. you, Thank

Operator

Our next David ISI. Evercore with question Palmer comes from

is open. line Your

David Palmer

A Europe and you. volume. impact Thank on pricing the question on

disruption that half second and given you pricing that complete. versus you 'XX? thinking for is second You some half mentioned the of you're in volume disruption How the is lapping the some the that are region in about behind

Dirk Van de Put

Yes.

see we solid really some exactly growth So as second factors saying. don't half we but that volume volume give were in region, driven guidance said, by the would the I you per

disruption be us, the pricing negotiations So gone. pricing The behind we will is have implemented. that

Europe, prices Last year, we disruption. increased half, had second we our more in the in and

that. lap will We

to benefit that's a for us. So going have

are We relatively have elasticities that in benign. Europe

we effect going So the despite to that's have volume. that, don't a think major pricing, on newly the implemented

it's half. you second So the nice growth to solid for volume not giving going be we're a number, the

David Palmer

categories. big big of extension have then It snack help but how in featured a to it that seem some slides. you as pastries Oreo cake. notice your other And seems could I as a doesn't couldn't your of logical have a be couple in cake I your and And like But wonder aspirations times category.

the wondering, being of maybe an you're how about TAM us there I'm the pastries Thanks. see and opportunity to you ongoing So cakes And how snack and about growth contributor? there, do a sense give it. you go sizable going think

Dirk Van de Put

Yes.

all, it. It's category. but not cakes is So well, away small it's a and from biscuits, size too of first not pastries not the far of

And opportunity real fragmented big But very world. commoditized to the in sometimes so strong around with a brands it's bring a category products. products a relatively It's there. with is high-quality there opportunity

And instance. here Europe a really Oreo in the Cakesters Give we're the or that for an Chipita with play China through so or in fresh Cake forward Go croissants Airy US & or in pre-packaged going the in section that's

around X%, So At whole there. we the think category. for the share whole market that there moment, play is a of X% us the we're

to player. room With number are of plenty that, we the already So two go.

biscuits category across been And very quite growing for than covers so so exists a it past different typical fragmented that The has indicates is that three how our category it them. that interesting itself makes is. chocolate, over It all years. markets. the nicely and occasions It

we expect so should in these we with new the I'm market going to a our business to year make pastry up brands, to an not products And double our XX% close quality can impact. us that and lift and a or give but we exact cake significant would share. coming number, and And think really triple

for So of a it's significant contribution growth to be going us, the to the company.

David Palmer

you. Thank

Operator

Ken with Our JPMorgan. next Goldman from question comes

Your line is open.

Kenneth Goldman

to as commentary announced. I talk confidence. if right, or just list needed, if you bad wanted to that that prices might aren't elasticities, more the ask, about needed think consumer for given Thanks. been European indicate to able you're conceptually, additional that to some down appreciate or there reason improving inflation. sugar, maybe offset be look wouldn't any and especially again, I is raise some you your But we guess, about to the -- a improve you're you. road, willing hasn't might Thank cocoa I not charts pricing be at position today, future theoretically, and pricing in Hi. right, that

Luca Zaramella

look the increase sugar the Look, likely if or Thank mean, most the cocoa. even particularly you you question, XX I we for cocoa about specifically is material. more, at talking months percent last XX-plus in and in are Ken. a

fact world the think in will you are of brands, said quality that with I pricing a the at materially that I we had the is fact our we when brands, necessity invested chocolate. strong be there the look consumers around and believe -- the in bonds

not I'm about price in on Also, bear the in elaborate going going we vacating that are to markets, particularly emerging mind details. mindful to be not very point.

use and And ins And world. the think so the then we last say would of we is likely. it going will learned around implementing I And outs of it do most over couple RGM. needed, have to years, I we're pricing and the

Kenneth Goldman

be peculiarities cadence Are Thanks. that glance, you. headwinds not are apparent if timing that I as should we not issues just And model any Thank quick think there necessarily might could or at or tailwinds then first one versus obvious? Just follow-up. or XQ, we say. about XQ any

Luca Zaramella

there don't terms material opportunities I you're is QX. that going cause of anything are or issues Look, that material No. in see to in think outliers going to

going in You're a to rebound see Europe. volume

I better the company. of situation there for going As a a be consequence, the is totality to obviously, think,

QX, gains growth. I'm profit. see the and on items through look going I you the when to revenue you're you're But vary. not likely going you P&L. the at QX, coming But see EBIT double-digit guide going really double-digit, operating to line, growth strong exactly most gross can Below to think

the cash And lot a going didn't sales. KDP to but happy talk related you're million And to despite delivering too. flow, about with coffee us $XXX the flow see very cash the I that, headwind

Kenneth Goldman

you. Thank

Luca Zaramella

Thank Ken. you,

Operator

Fargo from Wells comes Carey with question next Our Chris Securities.

open. is line Your

Christopher Carey

everyone. Hey,

Dirk Van de Put

Chris. Hi,

Christopher Carey

Luca, question be for the follow-up commentary. the that point? range. But the deployment of capital around at level a repurchase a level, leverage historically we should just that at be would At be you you end That So I You X.X how shares. thinking about guidance more think the company. times low said year and one second in then just expected the that of to

many have work on You too great you're Clif. clearly, recently. And deals doing

So back. me some to follow-up just spending as around historically capacity think is upside on a then I for. back, we that stood leverage. probably going There be of to already point, year. quick like where on right? added? committed at be be spend to If the through how upside, also some a for other the the upside, about, spending there's do right? does what going think EPS weaker, well. And play be toward okay, there was fruit there's year, that you're get just So comment of one you're just kind there could maybe Volumes you what get trending concept, but observations tension And more. quite It on not, out, Like level as comment low-hanging context that the low around full to some you'll could this back you've used that also just out that any

that for investment. just and leverage upside on Thanks thanks So versus the much. so

Luca Zaramella

I in Yes. business. think the the EBITDA strength first is the thing of the first No, underlying

income equation. that So that of is we are is converting cash quite well net the the first element coming. from And

we we that that that to going bit going are plus and little situation. think you sale, I'm is reality going $X.X run of are of leverage. likely The to proceeds M&A forever from billion further company a is fact most I at second absent new gum level a not the the this enhance to the tell of is, get norm. one the But will this

well. particularly, of the behind in fleet, M&A, Clif done keep we been Capital Ricolino, that few numbers. also terms are we of both doing case and think good job has in has mind to is a What have something in deployment company capital the of quite a you allocation integration. quoted behind I And

I is a and bit generate can value a M&A. that think opportunity, quite it shows of we this through great

M&A. we're bear might down on that of along, to going the divest decide to if time on necessarily in eventually the be parts the We that comes it. of Also, road. something we don't But portfolio control M&A, mind there are

The to us, shape. is yes, volume from launch continue formula we think quality fact leverage believe A&C, upside, the a other in also that, the mill terms price, I in the I in little growth about bit delivering only is standpoint, the business, year the in good we EPS but for one one example. are as but and things. of improved that earlier of the invest So and a it in talked not the things a -- really Europe we carry We

terms we have opportunities, little profitability. And investments I clearly go go fact quarterly It as And around upside EPS a good ask might do want incremental a the the is selectively we to what in you be use do so distribution mind in in places really And case, stay some bit that basis, incremental after have but a we by XXXX. we will that accelerate. of meant to little after a on have to to headroom of we by opportunities get headroom of business, a consistently start it and tuned. case we such really into on bit

results. post You'll as learn we QX more

Christopher Carey

much. Okay. so Thanks

Luca Zaramella

Thank you.

Operator

comes question Goldman with Our English Sachs. from next Jason

Your open. line is

Jason English

in. Hey, folks. Thanks for calling me

Dirk Van de Put

Jason. Hi,

Jason English

and those on supposed how Southeast how Asia outlined as coming distribution. and much and acquisition. opportunities distribution much Ricolino India to up, had? Brazil made you've I you to some thread drive that of is the in on the progress Can on you pull update the well you find want the progress where Look, the lie, to front invest, you accelerating in that's be in of believe as the brought past, us see I opportunities you've opportunity opportunity growth, something just of back

Dirk Van de Put

Yes. the markets The place. emerging typically in in the opportunities lie first

We about we at over that in at going Asia, been stores similar also of well are XXX,XXX and grow. to to countries and we year. going you we're do something where rate the every America. at which speed that so And continue, India China is new continue looking Latin the to same the to XXX,XXX Southeast thinking do That in be have opportunities should

two, at think. same what it you think So years. number been that's the the should pace last X has And the it of driver we in what three as about

our to that another our products that's can we in again, China it markets. the are two, that The And second well broader, distribution. emerging us. do driver years. has we one in stores, last in pretty of available going of three increase big to is, also, largely call means That's which going range for started the that start

that the of front are around working world. a on And second so that's sort we

the and then are one starting products is these the test different markets do we the And to around where acquisitions last world. with learn in

of a we Chipita. So and in learns tests going number have on

We some Grenade learn. test have and

opportunity are start some test the being that, which learns that will have will expecting would world. big learn have distributed. we And We around those Clif countries a to we from and

So that third as should see front. you a

think start expect the if these first of that should two, of play I three If in say that order role. X/X you on expansion. or India I years, think will I numbers. impact the in think is I magnitude driven about significant about by growth it, think wouldn't In would shape, would later take China, things But that you distribution on, as I major a see a our to

an you that magnitude. order gives So of

Jason English

I'll appreciate Powerful pass it stuff. on. I it.

Dirk Van de Put

Thank you.

Luca Zaramella

Thank Jason you,

Operator

next comes with from Securities. Mizuho Our John question Baumgartner

open. is line Your

John Baumgartner

Good afternoon. the for Thanks questions.

Dirk Van de Put

John. Hi,

John Baumgartner

the global the last emerging crowding Europe. of of sort function the a the but has out out in context at in least quarters, brands to lost the how you maybe if bit Eastern share in looks and Europe, across historically, the stick markets, portfolio market though recover wanted of I you the to going just in of this biscuits. as there, you are maybe ability think opportunities local largest Because your you stalled point, forward? what But chocolate locals. expectations is allocation, locals for elaborate the could have I success couple the simultaneously? to Asia, about on grow resource brands. locals And And where local growth of that's share with share Hi, the global are a at It think for

about curious you. your there. thoughts Thank So

Dirk Van de Put

Yes.

would because going So well, have Europe, say disruption to a careful whole first client be of you have all, through you I bit there. the

it has with that the the disruption. think to say. have local that affected, our I if about would I to share global started brands grow client is of is But performance and global see brands, faster, true So if

a Oreo, recuperating brand a also for have an brands, Cadbury, as or which post Halls, number of Dryden particularly gum but example, COVID. are Milka, We

Oreo and Milka like So working you boost -- normal, global on for very Trident hard a have also then and growing category that the get brands much. We, from an Halls, who are premiumization. but which not things extra number of Toblerone is were you instance, our

yes, XXs. the this stage, well at So global brands growing into are faster. They're

a you. bit I effect, While more the not explained little the growth, to But local as still jewels mid-teens in probably are that's bad.

Does we we significant sure our local allocation? because our jewels our resources that that allocated it that changed not to get we're And anything, at if there. pushing opportunity to teams is local the have that resource all. No, mean believe make

too into read I so And wouldn't it. much

our you double instance, at the look jewels local if are CAGR, are single our digits. X-year high while brands digits global For

what to So that's very point each close other. And I really to.

anything us. So there don't that necessarily would we see preoccupy

John Baumgartner

Dirk. you, Thank

Dirk Van de Put

Okay.

Luca Zaramella

you. Thank

Operator

Piper Our last Sandler. question Michael from comes with Lavery

line Your open. is

Michael Lavery

there. and And how question Give you Good Thank and opportunity wanted far to sometimes maybe gains branded about key growth share How the And then seems much bringing follow and little I it unlocking of opportunity specifically, that you geographically sort fresh afternoon you. just maybe is But as & up there? maybe well? with sub-segments? certain push branding. branded an . products bakery. mentioned there explaining can to Go, that quality for as in Palmer's that, less Dave as Is very was just

Dirk Van de Put

about talking pastries. part, packaged talked and the the yes, was I branded when Well, more Yes. about cakes I

the how Go a of driven distribution. as would And we it's a largely play Go business, branded fresh But a Give and so you I little say, explain bit think through can about think about & that. extra and if business & the role, innovation, you I growth Give can

to makes a brownies, job segment, Go It's offering doughnuts. mini mini product. Give quality that's mini So that a a a interesting segment. you have mini they player about very to-buy as cupcakes, pastries, great in do a And & think mini so and and muffins, cakes

of make products some those with We can our ingredients.

So you can imagine a cupcake with Oreo on it. top of

branding the brands. develop started play They've also their role. so can And own to a

& in things. the your So it Go, is but part can packaged that more it's play correct of observation a role in Give

interesting there, about for of instance, talk is North We on big in-store that in their in to business of could together the bakery them. to it other very labor. parts us it's Australia, in saves with is and we benefit that one & was also the Give activate world. how The it America, retailers other were reason being bakery main and happening in-store for but the retailers of the interest Now Go

product to top. interest. delivered that all you big sees freeze avoid your that section So on fresh. store It's you and thaw, they as and store, in get is the a consumer want to The is high now drives the retailer so a labor can from it a There and increase. interest

would certainly bakery. is growing a confirm the for there interest I around that So fresh world

Michael Lavery

your Chinese well? with is at strength Is little And emerging on in a your relatively follow-up fits a well little of and like can great us doing home Chinese function portfolio? there food low It maybe China. even consumer a that unpack point? That's more help color. bit? where how But Can price markets, just the a the doing just you just consumer accessible too. that's it sounds there's understand bit broadly of performance kind Is a you

Dirk Van de Put

yes. Yes,

grew double digit us for QX. China So in

you One a mobility talks that our China, had consumption. on we of about are strong growth, COVID, And Nobody back, a more gum coming continued kind think is on there. gum which so growth coming the is of And and out have top need that, of about we we biscuit the have that key have anymore big we of home in business. to COVID business effects as strange. but coming is

through second In our with our gum Oreo Chips Ahoy! up particularly almost targeted X is as And both then activations, Biscuit we're very is now where in very and in happy the lower-tier to biscuit X.X activations having cases, is strong that up we share. next points, share brand to started we cities. brand big success are some QX increasing point China. do in

that to commerce starting XX% growth about particular grow rate. other The of QX, considerably to is commerce Chinese And thing is XX% -- sales. that's a quite digital digital at in started about

short on-the-go digital towards points China, of commerce -- be a of delivered because in offshore period course. time, home also that all sometimes So can in consumption but very consumption

was The other growth previous question. the to China in is about explain expansion thing distribution talking that our I

one as is And snacks and Cake. I Oreo baked remarks. Airy strategy. we've pastries it expansion point about a would to XX,XXX added channels stores that mini new I We So in deeper QX part launched cakes that us. in of into alone, that and prepared the the last that's go the in innovation. talked super route-to-market and for And

are are driving growth. that our So elements those the all Chinese

can huge quarters years it's to add We work solid think distribution. fronts. come. on can I We for all a pretty the and to still We these opportunity. continue have

will rebound We're We that better And think and months, a have coming getting category coming some our interesting the innovations will commerce. boost there. be growth in the digital gum better to up. really and on our I

is and the down but consumer the to to better more, they trying cutting to relates deals, consumer, bullishness are the volumes, pack certainly, pre-pandemic. the to not But clearly they're They're up on had are size. around not they the trading clearly relates it they also and it As yet -- that going confidence is back as up. find shopping

smaller they a We is also stores they smaller buy see shop shift more because frequency. and that to with the quantity

So I business. our would by encouraged very say we are China

previous several of some half grow. second that coming from We to year. very that see have the fronts been that you fronts will done results in China the have us And the allow I years. in not good Those affected. We've believe

Michael Lavery

great Thanks much. That's color. so

Michael Lavery

for you the conclude think we thank the you you. Okay. I Well, can call the so confidence and second thank in Thank With assisting much for the quarter. that, company. for

Luca Zaramella

Thank you, everyone.

Operator

at and disconnect This any may does you time. your you conclude Thank for today's participation, program.

Mondelez International (MDLZ) 27 Jul 232023 Q2 Earnings call transcript