MDLZ - Earnings call 4 2023 | Mondelez International, Inc.

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Operator

Good day, and welcome to the Mondelez International Fourth Quarter 2023 and Year-end Earnings Conference Call. Today's call is scheduled to last about 1 hour, including remarks by Mondelez management and the question-and-answer session. [Operator Instructions] I'd now like to turn the call over to Mr. Shep Dunlap, Senior Vice President, Investor Relations for Mondelez. Please go ahead, sir.

Shep Dunlap

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

our the this factors to company's These Q the details Please risks XX-K, we things and statements statements may contained results to how performance. today. on uncertainties. call, Actual statements. filings we'll cautionary based differ X-K During risk for forward-looking our see on about in statements make and are materially and refer due 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 of presentation. the release non-GAAP GAAP find within reconciliations can earnings slide back comparable the and You the GAAP to at measures our

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

We with will Q&A. close

the turn now call Dirk. I'll over to

Dirk Van de Put

Shep, and Slide to call the X. start joining I for will today. on Thanks, everyone thanks

strong best shareholder share share record our top and we dollar delivered line in improvements, ever pleased to growth with I'm growth, XXXX that continued return. year profit robust total

was performance Our double-digit pricing positive execution and growth. by top line driven strong volume/mix

ongoing We very gross leverage. for profit across consumers engaged discipline continued brands. as inflation volume also remain sound set delivered $X.X as and offset another record cost dollar through share the with billion snacking globe cost improvements pricing as well achieving We our to iconic growth

invest the and our leadership, on accelerate free driving track brands generating our billion. flow, we significantly strategy top To both and our global continued growth of capabilities, of lines. strong snacking multiyear in bottom cash We record continue to $X.X

our in people, beyond. our our of targets of well These to position shareholders. that our to billion achieve continued and and deepen capital XXXX record well financial especially proven great our proud investments $X increasing and the our especially our financial strength confidence brands, long-term strategy, returning results as nearly as results I'm us in

Slide to X. Turning

that top and bottom year a in see year continued can reinvestment on growth XXXX strong the You was lines substantial drive to ahead. with both the

Organic net revenue year. versus billion or prior XX.X% grew $X.X

that our categories. solid prioritize performance demonstrates brands volume/mix to and continuing in consumers continue Our

gross We $X.X growth also growth. business lapping to delivered sustained us record of significantly teams' years. dollar continued up in last investing XX.X%, which to focus We're commitment, of adjusted further several and profit our billion, the continue proud enables drive the

iconic customer billion, our which nation year. A&C into taste more translated XX%, both to investments versus our brands up of growth we results than loyalty consumer more nearly Accordingly, $X by global local than and These their markets. and XX% of increased to OI jewels, in prior the helping drive strong the represent

years. strong growth top of XX% grew EPS the past Adjusted on several in

remain All enable cycle sustainable and confident our gross local-first virtuous in will fueling to attractive told, that talent, our strong commercial execution growth. of increasing capabilities and we strong brands, delivering growth, profit continue us dollar investments

we share total I'm continue especially peers to our shareholder to in that outperform return. proud

group. X, our Slide on nearly X-year of TSR see can our you is the As peer average double

we long-term Our return their results fallen and stakeholders. people value has brands X-year while the return impressive, double-digit delivering right negative territory. continue with We evidence is view growth our peer for into as particularly Mondelez our that to strategy, average delivering the these right have

X. Slide to Switching

not XXXX it. but have gives that us strategy execution right in right confidence only performance to we growth the Our also deliver the

action. our of just strategy in a few highlights are Here

global achieved biggest and brands, $XX in revenues. billion than Milka Our global more OREO, Cadbury, net

core profitability. attractive our categories. XX% snacks because to through chocolate, for remain revenue our deliver categories these of biscuits accelerating and growth continue and track our focus We on these We offer core on baked categories

growth strategy. our We in also continue to make executing progress strong

stabilized, Our more market XXX,XXX channels. we to supply stores added chain U.S. and emerging has distribution than our have

reshaping Additionally, continue Ricolino. Bar integrated we XXXX, and to Clif portfolio strategy. In advance our we

bar are candy in of Mexican we snack presence harnessing chocolate the Now the power and segments. these strengthen to acquisitions and global the recent our

developed the completed important reinvestment providing capabilities. gum business brands, our also further another sale market We of for billion, talent our to of $X.X and advance source

On and Slide that with I'm in significant performance, we targets X, sustainability progress our our pleased made along financial to share towards XXXX. goals

First, used in critical is lift up through where our restore XX% cocoa cocoa and leadership signature chocolate more brand the sourced ingredients. to sustainably volume of the advance sourced Cocoa in works program, we people our Life, About continue landscapes grows. to our sourcing that cocoa

in We change. made our milestone also achieve to submitting XXXX important road an Targets by XXXX zero to climate progress We map Science-Based continued achieved helping in net to the initiative. by combat

continued right now More we light packaging advancing packaging designed Additionally, be recycled. XX% than our to our strategy. and is of

in wrapped active our lifestyles. snacks are investing continue fit towards revenue snacking that on clear snacks our XX% individually a ways to sustainable more make Mindful building snacks, their into just continuing healthy Portion also Portion These comes than We More that company. in are progress packaged recommendations few to more that Mindful Portion a snacking with or choices serving from empower is, of consumers sizes pack. Mindful highlights mindful of

integral published change Made for to data. part watch be you positive sellers. drive to believe our that scale will annual positive full Report, value our is in sustainability returns Right helping of April, encourage We creation view which with to continue year an our We at to Snacking

Turning to Slide X.

that we continue see many companies, can like through operating dynamic navigate to a You environment.

themes, rising shifting prices, few. a name We a to number inflation, just geopolitical cocoa near-term are continuing including challenges, and tracking consumer habits, around closely planning of

remain well we year. address and positioned a deliver are non-algorithm confident these can to that We we challenges,

right widely is Our as right very and our brands. the confidence have we rooted conviction well in right the as people strong, that loved strategy, execution the

see momentum continue our of key markets. We majority emerging the to in

our snacking our brands brands. prioritize To continue investments solid iconic increase Our consumers our and our are categories we in continue capabilities. momentum, remain resilient performance accelerating significantly that demonstrates and this continuing to volume/mix to

that emerging making in and our markets. are continue improved, expanding chain progress negotiations. our also in supply We pleased has developed on distribution we European both We're focus and U.S. substantially to pricing opportunities solid

to deliver strategy in and effectively we sustainable long-term growth And we in right while XXXX. confident expect real have overall, the focus robust both today's that volatile dollars on We navigate remain to to EPS constant continuing environment growth.

XXXX I'm conclusion, that to In reiterate pleased year. another was record

growth is attractive By we Our in on and widely portfolio that strong to core well we empowering reshaping chocolate, am beyond. investing years performance are and focus attractive continuing people, XXXX biscuits to driving to confident can strategy brands, our continue loved double-down of great positioned in categories come. snacks, I baked and operational for on in deliver focusing discipline, execution and our and our cost working,

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

Luca Zaramella

and Dirk, afternoon, you, Thank everyone. good

gum provide I important to market Before into get financial impact context results. the and it outlook, on our developed to some and our is related its results the divestiture XXXX

On call fully was I'll as million; Slide on and divestiture later color negative. about on plan how percentage while growth, the give outlook $XXX the revenue this to by points XX, you can impact see you EPS on the X.X to around that income. $X.XX. minus in the offset impact more relates we impacted of was

results, delivered contributing. with In XXXX, double-digit with Slide volume and growth, revenue starting both exceptional we to XX. Moving value

cycle. allows dollar on variable as virtual the to reinvest P&L gross most profit As we is protect and our saying, it keep important

grew Last substantial generation. billion, results year, earnings The be all allowing GP dollars robust strength and categories. these by seen cash strong $X.X and across reinvestments, of flow can regions

coming of the plus XX.X% with in growth growth points year, Revenue from X.X mix. was volume

For the a growth slight with mix. quarter, about in was volume XX% decline

XX.X% by key including the substantial India, year for grew the trends coming China, and Western Mexico XX.X% for from countries, quarter, with markets Emerging number and a Andean. of Brazil,

the plus robust both growth and the X.X% plus year from Europe. and grew markets for quarter, XX.X% for the U.S. Developed including

portfolio Moving to Slide on XX. performance

Also, both Our for double-digit well & continued superior chocolate delivered markets. perform emerging to year. in biscuits with and growth Candy Gum growth businesses the

the X.X% plus the and the with market. Biscuits X.X% and plus Give XX.X% the for emerging quarter. Club Ritz, of delivered Social. the XX.X% for the for and and including Chocolate strong growth significant Tate's, plus year brands Ahoy!, developed X.X% XX.X% for XXXX, A grew belVita, grew & and Volume/mix growth number year for by Go, up across for Chips both year OREO, quarter XDays, for Kraft, large was quarter. plus

also brands we for Western growth area, like local jewels, growth performed Côte China Global Dairy Key d'Or. Gum many more Cadbury well. quarter. Brazil, the Mexico, our all of and extraordinary Andean delivered Milk, the XX% Milka while strong Toblerone, & grew all the markets, than and Ricolino, year Lacta, delivered and and XX% for including Candy with including

base in XX% with XX. share Let's held both We and Slide biscuits. chocolate performance our review or of market results strong revenue gained share in on

standpoint, And we a see the pricing as years, played this both brand our of from investments, took strong a amount Given the role. and of a clearly couple accomplishment. last quality we in quantity

to was XX. execution for Turning despite plus performance volume/mix XX.X% for some impacted QX fluctuations continues was to but quarter. by as X.X% for profit negatively customer significant disruption XX.X% year quarter. Europe a to ForEx regional that on grew the against improve, functions the the protection QX. up plus cash Strong year volatility. in in dollars Slide and held on led for and plus in year the for the deposits positive plus Profit currency Underlying XX.X% Europe in 'XX

nicely in the despite increase EBIT A&C. up Excluding these headwinds, significant QX was in

and a release our the inventory for year, impacted while U.S. driven exceptionally gingerbread being profit. grew in pricing across QX year of the Give Go of volume almost XXXX. strong kits, was pricing, as broad-based increased. declines X.X% decision growth North America X.X% and softening strength channels of by Full an a full in & biscuit of In tight was grew against higher QX low Go Give in XX% holiday's declined and plus QX, plus advance compare result to & brands some volume/mix. solid by category, management

with Go Give continue be overall. to very & We happy

depletion early driven a results October. to QX were inventory to connected of building lower in ahead disruption transition by in potential consumption inventory retailers and system minimize Clif's bar

feel and levels, shipment inventory, current to investments, result, adjustments drive our inventory a we comfortable made As 'XX with to decline. programming along a with growth. driving year-over-year We

are confident investments for at of A&C. prospects plans, We're 'XX CAGNY. to expansion, you North sense and a growth substantial regarding activation in opportunities channels our these our in given we KDP's Overall, America, give better going strong

due strong volume. year the for XX.X% to plus increased pricing OI solid and America North

OR quarter, the X.X%. increased For by

grew for year-end X.X% strong quarter biscuit. and quarter. both for and for the by digits as single high the grew AMEA and chocolate for quarter India China driven double grew well. XX.X% year the the digits year

for the year, mid-single quarter. the both delivered Southeast and results and Australia grew year Asia for the digits strong

with that for performance since the we in impacted began As in brands in relates East not consumer part Western been on Southeast immune has QX, volume/mix from and Asia. and Middle pressure of the region war some an there it East been the sales Middle the have

colleagues We with around are regions. as the different supporting who NGOs impacted efforts humanitarian to the world in in partners working have in ways aid well been as

While predict annual XXXX top our stakeholders outlook. volatile increased a and bottom and difficult and basis, line these year growth. for continuing for quarter, the to are we situation in tracking XX.X% XX.X% the and and the the by planning strong working dynamics track with AMEA of OI go-forward for on record

America and strong good in and the was the done Argentina, strong beyond for work the LA justifying quarter, XX.X% for with Latin XX.X% by management and grew growth Ex our price for year volume/mix year Argentina. teams plus the growth XX.X% price the X.X% for quarter execution. for

year of another America of Strong the more grew for and continuation XX.X% these year the results. Latin quarter. Gum pricing strong XX% OI Candy drove and momentum volume/mix, for profitability. than plus delivered &

Page Turning XX. to

record-high of behind in we of dollar delivered gross a Europe. for capabilities million strong ForEx about and and increase beyond. This growth more has topline OI than growth that cost $XXX billion. strong dynamics dollar OI profit double-digit growth nearly XXXX QX, driven year, discussed and by was by protection ongoing strong saw impacted double-digit in I of strength we also In dollar reinvestment the enabled and discipline. U.S. the Other and fund profit gross driven For levels $X.X brands by

adjusted XX% $X.XX The currency. majority grew constant operating EPS by per Next, share, EPS reported gains. $X.XX contribution by Full this of EPS would EPS Adjusted on driven grew Slide we in ForEx gum. from including plus at despite XX. And of be beyond year currency growth XX.X%. vast was headwinds,

our plans could aim as we about 'XX, more stranded talk but removing as I'll possible. at much for cost

$X.X delivered We liquidation including of taxes for XX. Slide flow to full million Turning related cash our than of year, more impact free of the to stake. billion $XXX from the KDP cash the

strong full quite at ended sheet leverage as balance remains year Our X.Xx.

some and outlook our discuss to on Slide our moment of a key take me Let assumptions XX. planning

flow. year, revenue, earnings on cash current long-term we deliver for algorithm and the For expect to our

expect of pricing X% levels. organic range significant portfolio than expected to top with be to be net growth our certain as We algo line at the X% is upper Europe markets higher end as for in to revenue such historical

cash expect We flow free $X.X of plus. billion

we In terms and another a This 'XX. inflation by in inflation, for both expect in assumptions, well the significant costs. labor high as of increase as sugar is single-digit cocoa increases driven for uptick

earlier more than Europe other disruption we potentially This associated inflation any last As cases market, some customer QX with negotiation in than process expect our QX and price faces into is happening annual during year. process.

lines. top it QX So in be fact, in and margin from might more pronounced

years. all others, We brand similar also remain stance to the committed to several in the region this and our over substantial past last support

approximately expenses, terms we In interest $XXX million. of expect

from ForEx headwinds to of We related the are EPS for $X.XX year. impact expecting

taxes, around billion. ETR Shared of terms expect in expectations we $X an the mid-XXs. In are repurchases

our we XX. Page With 'XX $X.XX developed respect growth EPS, single-digit our our contribution from share, business. gum $X.XX expect adjusted reported per of includes EPS divested to the of base outlook high off to on Turning which

this by stranded impact removing We $X.XX eliminate all nearly expect to of costs.

already In in savings of progress cost realizing stranded good late XXXX. made fact, we by $X.XX

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

Operator

question comes Our Instructions] first [Operator Barclays. Andrew from Lazar,

Andrew Lazar

this a like got I it Dirk, key many the of you whether on markets. sense see bit other it just might out union saw in we you quarter. in as 'XX fourth more follow-up. Trying where seems bit get and the markets get or of be North still bit volume the the a might a across see And a same of could in to then key playing a a conversely, cadence And how in weakness state there's hoping strength similar I've different. performance how markets the your in be stage a this America at we of was

Dirk Van de Put

performance. across there's the Okay. we and that The Thank continue very is a Yes, categories, year, for year expect strength, our We growth full the across there you, Andrew. next is strong is regions, into that I we which mean portfolio across year. see broad-based the brands. solid to feel volume/mix

during performance very this started year. is America, year, the good across Europe, recuperate North we've but price AMEA, been had Our the effect end has gaining execution good. disruption Share been we strongly we to year share. the business. we the recovered. some at of

The billion a issues. very little continues the then business. in broadly, quite us comment growth, strong where gross reinvest there emerging significantly the some allowed on can strength and markets in are bit I $X.X year, which And short-term for has some we've got to profit

And cash growth real, so strong the EPS XX%; well. flow. doing are XX%; adjusted acquisitions

feel we XXXX. we So good as enter

the In more coming in pricing were America some have agreed. Europe, with where we're line already in, in agreed. year, but we last and We North is that's already majority

big role with continue a play we acquisitions, planning to strong activations. us. investments for to are brands, our We The with continue strong in

mention brands distribution the And have distribution around we our the adding maybe for that another is runway point of world. to

it 'XX. very feel and we was entering we So feel 'XX, strong a good

on mind. doesn't that particular mean there are Now issues are that no our that

would So and the first price certainly be need cocoa needed. our the one to as prices

were that But feeling elasticity are well the in at is is term, there prices year historical the for some while elasticity agreed. consumer some those positive, we or to, around we uptick We spots in get more covered short year below and the have see year but but mainly better negotiations need agreed, with Europe, the in consumer still said, to norms. Consumer, annual Like customer in is to last expected will where majority the Europe. in beginning we is are I disruption world. some have the is progress. and in are we we of line still we go. be in It that The

of And volume the then in will on which in don't maybe certain a few some in think we words instances. on the continue QX effects QX,

some has those brands. East, Middle have in there Western and some and tensions brands, of Western So some the on is that we effect

main U.S., as of part the range AMEA of in year, America of in Clif, America, volume/mix next in why that specific stopping beginning in systems we said then Go, but reason QX, comments, & the a fade the volume/mix, and And in you one-off particular And gradually, not expect expect to to continue would Luca North is North is good over very to because reasons, change as that that in the We expect. away. QX in the Give strong in the will the return year. it growth of

All I'm included outlook. about year that are full items these in our talking

the that have are mark this our negotiations we the Europe. to we so higher continue all Europe, go at the guide to the But how results That's we'll believe more going since own see for towards that And said, we probably see how this algo with 'XX, particularly have the at and should negotiations things go towards probably stage, we I in stage. side. question main we in

Andrew Lazar

follow-up of And Street to algorithm X% sales bit, I a quick given organic 'XX maybe this pricing Great. Luca you're above Dirk, some you that but covered a a for just and to taking. be X% growth for there expectation long-term for little was the bit the think little

So keep sales puts key as some and of to briefly maybe, the phasing could the aspect in us of maybe guidance the takes we you the growth walk through for mind think year it. Luca, about and

Luca Zaramella

start that our 'XX at mind, I look continuation Thank 'XX. that solid, drove guidance what of momentum you, into Andrew. we in 'XX, as saying is by would particularly for the and

share our can, our happy, performance. count said we I as categories. on We're remarks, resiliencies the of I so prepared on And in believe,

There in half. challenges us the A&C finally, that terms will that help top that particularly you we the And the investment forward. through some opportunities related in will still model of will is to line material think be unprecedented prepared for first we of both accretive I distribution us, remarks. I put line. share, acquisitions, continue are our And think, in the in see discussed bottom the that to and momentum

component than Composing is a key the seen this but average revenue bit pricing be potential clearly Europe. Its than in most will particularly, of have chocolate less of Pricing, in is customer contribute higher guidance, as little it 'XX, 'XX. presents to disruption we price plan. a a mentioned, One an in as pricing the will couple cocoa, And we year. is away of we contribution challenges.

of 'XX. it. And look is clearly, that and planned I cannot disruption. we the We said our half while in happen. Dirk it as I realize Europe, product to drive they is have it particularly, really going what secured is say Part to into of for also feel is control that we the significant than base point, positive, retailers. price we at this that, of said for But strong think customer don't is traffic and Having important more

prices that the competitors common will think positive feel quite couple we market frankly. that at fact in with So to this have I quite time, many to is point price, and

competitors, which because brands bit. unique, been is have for also and investing I are feel said, to quite but one second I as price, elasticity a our The better too, because have will we

good to with customer exclude contribution be for expect disruption. mildly year when the a actually we the We volume positive

is a there the revenue So which on will through successful, the be be if given push plan, a to and this in we customer wanted at reality side. we the And this little point likely, look, bit affect upside. we control disruption cautious level will don't most are time, we to

feel so And good. said, I we as

will the Latin momentum has acquired Europe, well. the to lineup business I into look we I challenges, the case, say finally, plans excluding despite plans, platforms, North be continues to we of is, continuation the as have good. disruption, good some want that And our I the very you say all of think underlying America, in good. a in at AMEA, doing to in customer Importantly, categories America want lot momentum XXXX. is of these if of and plus And the China are think and I the India continue. go

will year So I on obviously, play extent believe well for us, disruption. depending, of the customer out the

Operator

comes question next Goldman, Ken Our JPMorgan. from

Kenneth Goldman

I little a just wanted guidance. clarify about to bit EPS the

$X.XX, just above would not we from on and just be the of a but on it's off just about me, $X.XX think And if some will as you of a right, basis curious underlying think than we gives basis necessarily sort of base, That you exclude correct elimination algo if gum XXXX. a boost a of might please both maybe I'm that actually about like-for-like a the how versus bit stranded it algo it's the that's it? algo costs it confidence if what little -- year XXXX that accurate. little on what have. So much is you of bit give like-for-like the might above more and typically

Luca Zaramella

Yes. clear question, that we Thank was eliminate it you the We costs. sure all wanted Ken. for make to stranded trying the to are

I we cost, provides to fact said, excluding business, disruption, into have, to momentum good the as volume the guide really high from and wanted going customer so single-digit comes that confidence the we're leverage. base. And that, higher the The

that material cost We 'XX will XX% and into very a that that And Clearly, continue productivity. will of continue the the and we XX%, disciplined with the fact discipline will inflation will we but higher A&C high offset be eliminate off cost pricing it single see. going stranded allows to we manner, to are have, or say, algo, us high have digit this base. will increase I In to digits. another we all most single year, guide likely XX% double not a digit to in

we So the across across brands. continue the all investing regions, will all

good about we so And that. feel

finally, Remember, through of fruition. Ricolino, be will coming that synergies integration the there to

a in synergies both and And few cost XXXX. We are hopefully, that for live unlock revenue days. will going SAP literally with

Kenneth Goldman

a follow-up. quick then And

this little You XQ a disruption year. mentioned bit in more

it's and the of said, be sense it like quite there can bit early, little we quantitative to of would just the get just at of the is kind bottom this any With I forecast point realize, but of think about on completely perhaps. a any a some how think I helpful to impossible line impact the we more time way top understanding our at it's potentially magnitude about as quarter? the models in kind to

Luca Zaramella

Look, is as maybe algo. year a a bit have revenue, number at pacing, little look you the revenue we're below a full going I think QX to that the

in to see the I the happy X base nice most more because out likely going numbers be might QX. going that. hopefully to be the And terms volume/mix I you I X. further across total with tilted going a slightly you're go volume/mix, disruption. already think have excluding the customer believe to that regions in in be the in disruption, any of be to positive. versus is than of impacted and is relative number 'XX, the impact we negative can't But Europe

negotiations conversations retailers and have We with of the plans. are middle and in we

happen. We will have But how will time what a sense in tell might Europe. of we exactly land pricing

Operator

Your Bank next Bryan question of America. comes Spillane, from

Bryan Spillane

to back questions I guidance. fourth And quarter. of to getting It's the just One want a you in repurchased just year, share billion I also tie is couple bit quite of shares this actually. of have the $X repurchase a in. but

see. normally repurchases about share simply correctly. $X share your count a about if I make of I'm a drive just were the little thinking billion because would the want should 'XX, that lower to right? the more a down of it roughly count X% we timing think should the So sure so would bit more it be late, would than that than repurchases fiscal Just have share we impact on share or suggest, repo that

Luca Zaramella

I correctly, think about thinking you're yes. that

Bryan Spillane

have much high I looked. Because not right. to going that's to All operating square to would just quite think we as it's to need Okay. growth. be burden how of And as going it sort profit

Okay.

just question, second range It's I for of actions been outcomes, Argentina. could the Luca, if you a companies over taken. companies operating have about a this We've bit guess, there. seen earnings little then or And talk season topical

guidance? also minutes. a FX could So operations? that Argentina, if walk fielded into moderate? What's And touch just few local devaluation kind have on incorporated just maybe to over us the any driving if be you you bunch that last the the We question at on, all effect through so is does of what's guidance can the

Luca Zaramella

about for us is So around Argentina business. $XXX a million

We very the business the happy managed been has the over are years. way

And a for clear there. It's playbook. consistently Argentina protecting out the Argentina us has us able been growth. country. the that not top is in some we We we is generating share. not matters to for cash cash line have What and been It have about necessarily cash take also of have

of about Some talked have position. monetary companies the on net exposure

free monetary And have a position of the units. and net in we course go monetary But we down clear as over we Our net Argentina It the control. 'XX will the business Argentina by playbook. all is way, other flow position like incent cash incent generation. on not

place full as some going say that spike expect monetary be impact the old government to the in also fair operation. net been mechanism. any But It's have was is that those major to the due and very in price that. of control QX There to a And was don't little manageable, control position QX. I in we bit of a put in net monetary released, as have exposure

and and is price point protecting to team free are the Argentina. much as time, as at We the can they to in committed this scale the fully size of

So issues of I whatsoever in don't impairment. terms or see any

even than one year. has are higher at been parallel The there reported are than last already much rates devaluation. the obviously Clearly, higher official that market material that runs

becomes moot point into so Having guide said revenue we have growth we impact. organic it forward a likely XXXX. as that, to most you to going cap will growth Argentina for net And and ForEx

which the total. if guidance we and of gave forecasting offset in revenue of growth take the And do impact in you so X.X the each point should organic And terms net about that in around two is terms growth, the trick other. on Mondelez of your revenue,

Operator

Palmer Evercore. David from comes with question Next

David Palmer

for to there's often couple what that this what's A talk to seen and pretty for there taking from see for through biscuit as price XXXX business pricing than what year, your questions. -- the dynamic offset we like with you different wonder, in from going how a be what dollar is maybe you've would pricing, Europe impact pricing strategy players cocoa, about and given there happening there, the from then there from customer the so the consumer would reasonable the that the is to about. issues elasticity And in see you expectation think seem you're getting It would U.S., retailer I On you're there. cocoa? of your but see much some timing the example? pricing

Dirk Van de Put

we in trying of that reasonable the offsetting believe and impact, your dollar input impact that on dollar is offset sense not yes, Yes, we're the position. assumption to but a pricing which, percentage for we the are costs, our that is correct margin first we're seeing inflation

this cocoa of in fact the is year, are probably little expectation. deflation hazelnut the retailers explanation also that to situation not the not which in showing the seeing of bit but inflation, seeing a significant other an some their it think areas Europe or and I only explain that business, is are sugar

hopes has land chocolate, they a by that in now understand that be think so to we in we will that high happen good it way. I to have able

a within because going in reasonable. down very Europe everybody expect of in uptick price. chocolate. I little say on elasticity, year to particularly very a or keep there to trading as We the would an it the little maybe for low will As But elasticity category bit has relates prices in been row, is third up have a might

of a joint it's the all brands. movement So

limited to price shifting be of to there X.X% we've a with huge expect in XX% XX% different the volume. year Europe increase brands don't a What very chocolate no we seen is between consumers. in past differences effect So X on that in will strong of and

shows of strong very We that think it's And the loyalty. low. because so that elasticity driven that is brand

The their fact taste that distinct and and chocolate call very people tend taste do to very chocolate not has driving been strong consumers significant hard. tend We has private very U.K. brands of easy. with because favorite switch And profile then like major celebrate taste years very it the is country brand the the And taste We've we brand, a activation the will label recognize so they small. will people the the very stick which to seasonals their their next nation. in XXX of be of on will do chocolate. we that, Cadbury, Every year, a In investments, top of activations.

past and proved us our elasticity believe be that will in opinion in chocolate that we combined limited all to the have the So makes in Europe.

David Palmer

many that, quick growth points will expansion. say? follow-up. I if Distribution heard a sales would that distribution how the sales targets come you would your guess what how organic of a organic much a think I've And for to company. growth say But seems key had growth come driver, driver, be percentage you of from from to don't you

Dirk Van de Put

from our extra is very roughly, this. talking our talking starting give India, is expansion. to about through significant global growth we're you big a drive few to also still runway markets I'm for expect organic like in Well, The and probably now coming On drive about where of we this China numerical markets, probably, distribution, driven can of hard those places the about XX% we in assume X% distribution you in can numbers. quite but that you are Brazil, growth can of a basis,

biscuits now potential X.X the So instance, for India But or since million our million of added and Brazil. in XXXX, gum stores. X potential only are in X million million is China, of X in X stores business the we've in our China about million stores

we But go In million on X million, coverage, and can the outlets, so X in We X 'XX. million X sorry, India, it X indirect XXX,XXX are retail we that countries. of new different cover India. we've And stores million I in about XXX added within have deployed -- stores over is in XXX,XXX directly visi-coolers. million

and here you are percentages us. gave for the means this that what it doing forward. message rate, on run significant And years other the is going that I quite we can keep So the the

Operator

TD question next comes from Robert Our with Cowen. Moskow

Robert Moskow

in in distribution light I distributors of volatility fallen levels situations a consumption. actually LatAm. question. deloading at have you of inventory who extra to taking follow-up There's steps multinationals the retailers on had the or been monitor Are even into distribution

You're extra also steps just you're I'm expanding the if it wondering same distribution so at to well, time. taking monitor

Dirk Van de Put

Yes.

well needs aware be the expansion to that are monitored. distribution We very

we a much so is, what to this place because happen. direct mainly to connection how can distributors sell-in we're what use So we their what make direct in they system, the putting a replenishment connection store It's the per and is is. read sell

of doing that profitable monitor maintained. is expansion carefully. that some that we're whole the can can we slow where So it we in so and distribution the be very sure that go We the cities we setting make see system that up

in quite surprises have this had and done so so gone many I've But career, my far, no times I've had surprises. things far. we've smoothly. So

activation top around that They're these teams doing We heavy it. know we our with of are expansions think on the this. accompany distribution the very to usually what I world do. in cities

we that said, very And controlled with surprises this. I it. far, had so whatsoever, way like good of pretty have no feel we we've So doing a

Robert Moskow

or sales? tools distribution also that these follow-up retailers or to a some performance track monitor than on XX the think. and enable you've And they that. years more I to are reorder to to improved keep distributors Has In this? all ago better digitized Like, monitor were ability markets, of and monitor small order on the of tools promotions, introduced your

Dirk Van de Put

Yes.

We are still with experimental a phase that. in relatively

instance, this channels with We Latin big that experimenting in are, immediate in largely we coverage. have mainly America, for

don't presence, bars the would I order understand get directly to Yes, can say example, started there. would a would Brazil and we directly an much or that and as have at be helps retailer are we It the typically indirectly we us we But So say, moment. sells. something store I in have cover help monitoring going. in to tools how is those products that promotions. monitor our how the

to it Because or deliver new we will monitor I to it's monitor this distribution they is third-party our other we but distributors. about, how a order a works complementary talking this we, through system it. will the prefer is our evolving, distribution probably at use our to do normal will that through As was stage to tool way through app, then system, the and

monitoring distribution, not of the of new necessarily the usually source that's the So app for us.

Operator

Steve Our with Powers Deutsche next question Bank. comes from

Stephen Robert Powers

to $X.X based guidance, lower that implies $X.X-plus it flow conversion. past the you a level the plus you could guidance, conversion? to combined cash Or billion, If if a that's might the convey. or kind as should $X.X I so, Luca, cash anchor free billion we to see some I with cash intended ignoring I talk message you flow higher about of the think and just target, drags free of of cash think wanted conversion if maybe on And be XX% what the a on throw focusing towards the free free that. billion, but flow there's that kind the flow of EPS

Luca Zaramella

Thank the for you question, Steve.

cash have ventures payout income As free we net and into important joint of the conversion we think free not flow, to realize dividend XXX%. that flow that about it's the cash is the

And bit conversion. of so a factor little is a that you the as consider

obviously, a And The where are look I we other need slight Latin volume in are et tell like But we X we're point integrate put platforms more goes is in I we we the need you and uptick going it particularly, Same mean would CapEx, as at for to has places happy. OREO. one little at very years last India. in a Ricolino, we and to to America cetera. invest stellar, a like have over down been capacity. the bit you India,

HANA. one terms play expenses will capital other of for 'XX into that The in come is SAP

consider. another you have And element that's so to I think

like coffee, we what would deliver net which to in of around look, paid think, on for billion. I I about taxes $X is you 'XX, we the is number the focus

might there our so coming onetime some way. payment And

But so you terms And have we enough to are sure need reassure free headroom. cash we flow, in to we want happy. that make that of we very

have believe, conversion We a cycle. cash I best-in-class,

inventories the we overdue be board. so of disciplined down, generation to cash the flow the very across continue And good about company. feel lowering coming We are in terms and of

Stephen Robert Powers

Very of to going it America. is talk but a you North recovery the build? how fourth organic for about CAGNY, it to can the leverage some prospects you're And think going I little Is acceleration think we expect bit good. commercial a talk manifest this like, do you in more it do sounds Or growth some likely extent quickly to volume be and in as investments, at about like the slower that to quarter? guess, results sooner in you 'XX? you that the sounds should made you now,

Dirk Van de Put

Yes.

a think U.S. In increase, by we the one quarter, on price said in agreed end if at the a good and with in has were the the hand, which, fourth you been right year, of had I the beginning we there. think you year. the it way, it, about coming

Then system push in integration our the to side. So Clif need from had no changeover. volumes we

then we And Go our And the margins not Give to it manage us. bring & that selling very were and tightly. interesting for stopped about we we because holiday needed so inventory talked down the kits

at if of the So volume/mix those I exclude performance the quite in fact, good. look and in business, then the rest was, QX

year. QX is QX. So situation really away one-off we're a It performance a right in good in of expecting volume/mix next

not It's year. of growth So the North it's really going a we the feel volume be growth, America. in to be beginning going don't like in slowdown positive is but there necessarily to volume massive

slow to a we So that's are. where going be It's buildup. not

we we in We will that QX. without where had are continue exceptionals the

Operator

Bernstein. from last Alexia Our question Howard, comes

Alexia Howard

two So questions.

a disruption, I'm the feels us just innovation. like to give wondering on on all, likely innovation and pace can is very you of if pandemic the have It up Do then anticipate whether update of a the pick been to going status First last And a going the supply quick years. innovation forward. several hard over forward? pickup chain follow-up. with you it's do I

Dirk Van de Put

Yes.

We innovation. in way at are we a look change the going through of a bit

of eliminating innovation, time, gradually well, fact, that we over the of our we small packs business. half PPA think leads of flavors, have business. our overall, do world, to But and new shifting that projects, they so, innovation close projects are quite new in small don't our we Since the drive hundreds But probably can on because, RGM. have we much of projects. do and doing afford is of those to to business to bigger as business are our which focus sizes impact an around small a If we rhythm do about you

of first mainstream is, mention would I making that ones healthier all, products. the of so And our versions

will Sugar to, the efforts what I'm well. expand U.S. across China; you instance, or in so far to in Free we Gluten can continue doing seen So Free for Zero those OREO in that brands. referring you've Gluten And expect other OREO quite

then pastries. And push expect and in you us hard. quite And quite can there, we entering cakes significantly are to

pushing And so of tens the or OREO on of that dollars innovations China. see premium significant hard Cake per of potential millions all net country. OF revenue Cakesters And We're could are the the in you these have OREO Airy chocolates.

So have innovations our done big we instance, core we some for the chocolate on launched, tablet. pralines or Toblerone

potential, bigger we are and efforts work those. reshifting higher but more our innovations these towards that require are So

asking, if I do pick-up in I know Alexia, we what of were you would don't it pace a call So see innovation. the

will the I think innovation. our in more not better on driven innovation, by say. would the of I impact It's years. it's coming growth by increase innovation driven But

Alexia Howard

companies we've driven state Very North other being do been they've of American heard I of whether challenges by helpful. There's channel you some the the this finally, being shifting. in up America observations dynamic. And then can just are just follow There's I think the consumer down any wondering about I'm have vulnerability. that from consumer? trading.

Dirk Van de Put

everything saying you're is true. Yes,

the me from shift that in biggest consumer, can a showed quarter, little North the in I perspective, behavior mindset little a a say perspective, And relates confidence bit in the shift. the would bit. probably the as as explain years. a But it we've X.X seen. explain last from it fourth I from Let best a standpoint, America, the

to they're them. for sort times under, economy that they're ahead the are doing what they improve are reflecting expecting So and tension the better is of still but

light it's they when see frequency particularly they're elasticity so effect. is they promotion. And We are a not see buying to promotion, buyers waiting same react We that reduction what channels. more the an going to on see see the see waiting That's way sort for one in that then of little a So the We And buying bit number more more but with formats doing? the downsizing, we them effects seeing, U.S. and to shift have in of mechanical smaller e-commerce channels. SNAP go winning. those. we're buying We the They channels, we of club particularly of more.

group for consumers. income a we so see certain And less disposable of

expect gradually was I overall, But that we that, say, mindset because improve saying. that of I would change will that

expecting U.S. at are the better. to That's overall the a by volume the the consumer the goes expectations get to accelerate as on our we So bit little in moment. view year

Alexia Howard

I'll hand back Great. it to you.

Dirk Van de Put

Well, thank you.

the I question. was think that last

feel very we about a was It great good 'XX. said, we us. As year for

are We good entering 'XX with momentum.

I that see as we prepared despite think including we're strong a how that, the we're all And But at. Europe. think we for everything going there look seeing goes are said, ahead I that we client of for and year, is have those effects have issues it. some into that to year. We'll forecast to in our the disruption

think of first can the by. will algorithm a on higher side see how goes have we stage this we at bit But So to and to to forecast. we the wait our that have overall, little quarter year we

happy that Again, any you our through answer have and other questions thank IR you, would department. to

Luca Zaramella

Thank you, everyone.

Operator

today's program. you participation. conclude your for does This Thank

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Mondelez International (MDLZ) 30 Jan 242023 Q4 Earnings call transcript