10-QPeriod: Q2 FY2021

Mondelez International, Inc. Quarterly Report for Q2 Ended Jun 30, 2021

Filed July 27, 2021For Securities:MDLZ

Summary

Mondelez International, Inc. reported strong financial results for the second quarter and the first half of 2021, demonstrating significant recovery and growth compared to the pandemic-impacted periods of 2020. Net revenues increased by 12.4% in the second quarter and 10.0% year-to-date, driven by a combination of organic growth, favorable currency movements, and strategic acquisitions. The company's focus on its snacking portfolio and operational excellence has paid off, with notable performance across developed and emerging markets. The company's profitability also saw substantial improvement. Diluted Earnings Per Share (EPS) more than doubled in the second quarter and increased by 61.8% year-to-date. Adjusted EPS also showed robust growth, indicating operational efficiency beyond one-time items. The strong performance was supported by higher net pricing, favorable volume/mix, and effective cost management, though partially offset by increased input costs. Management highlighted the company's continued commitment to its strategic priorities and its resilience in navigating the evolving global economic landscape.

Financial Highlights

53 data points
Beta

Revenue

$6.64B

39.6% Gross Margin

Net Income

$1.08B

16.2% Net Margin

EPS (Diluted)

$0.76

Total Assets

$66.48B

Cash & Equivalents

$1.97B

Free Cash Flow

$683.00M

Financial Statements
Beta
Revenue$6.64B
Cost of Revenue$4.01B
Gross Profit$2.63B
SG&A Expenses$1.59B
Operating Income$872.00M
Interest Expense$90.00M
Net Income$1.08B
EPS (Basic)$0.77
EPS (Diluted)$0.76
Shares Outstanding (Basic)1.41B
Shares Outstanding (Diluted)1.42B

Key Highlights

  • 1Net revenues increased by 12.4% to $6.6 billion in Q2 2021 and by 10.0% to $13.9 billion in H1 2021, compared to the prior year, reflecting a strong recovery from pandemic impacts.
  • 2Diluted EPS attributable to Mondelēz International more than doubled in Q2 2021 to $0.76, and increased by 61.8% to $1.44 in H1 2021, indicating significant profit improvement.
  • 3Adjusted EPS, a key non-GAAP measure, grew by 8.2% in Q2 2021 to $0.66 and by 14.1% to $1.46 in H1 2021, demonstrating strong underlying operational performance.
  • 4Acquisitions, including Gourmet Food Holdings, Grenade, and Hu Master Holdings, contributed positively to net revenue growth, expanding the company's portfolio and market reach.
  • 5Favorable currency movements provided a tailwind, increasing net revenues and operating income, particularly due to the strength of currencies like the Euro and British Pound against the US Dollar.
  • 6The company repurchased approximately $1.5 billion of its common stock in the first six months of 2021, demonstrating a commitment to returning value to shareholders.
  • 7Segment operating income showed strong growth across most regions, with Latin America, AMEA, and Europe all reporting significant increases, highlighting broad-based regional performance improvements.

Frequently Asked Questions

The primary drivers for the increase in net revenues were a combination of strong organic growth, favorable currency translation effects, and contributions from recent acquisitions. The company also benefited from a partial recovery in out-of-home consumption businesses (like gum and candy, foodservice, and travel retail) and continued demand for in-home consumption snacks, compared to the pandemic-affected periods of 2020.

Mondelez International addressed increased input costs through a combination of strategies. These included higher net pricing across all regions, productivity initiatives within manufacturing, and favorable volume/mix. While input costs, particularly for raw materials and commodities, did increase, the company's pricing actions and operational efficiencies helped to mitigate their impact on overall profitability.

The equity method investments in KDP and JDE Peet's are significant. The company recognized substantial gains from the sale of KDP shares in the second quarter of 2021 ($502 million pre-tax gain) and previously in 2020. These investments also contribute to the company's net earnings through its share of investee profits and provide additional financial flexibility, with their combined fair value exceeding $7.3 billion as of June 30, 2021.

Recent acquisitions have positively contributed to Mondelez's performance. The acquisitions of Gourmet Food Holdings, Grenade, and Hu Master Holdings added incremental net revenues and expanded the company's presence in key categories and markets, such as premium biscuits and performance nutrition. These acquisitions are integrated into the company's reporting segments and contribute to overall revenue growth.