10-QPeriod: Q1 FY2022

Mondelez International, Inc. Quarterly Report for Q1 Ended Mar 31, 2022

Filed April 26, 2022For Securities:MDLZ

Summary

Mondelez International reported net revenues of $7.8 billion for the first quarter of 2022, a 7.3% increase year-over-year, driven by higher net pricing and favorable volume/mix, along with contributions from acquisitions. Organic Net Revenue, excluding currency impacts and acquisitions/divestitures, grew by a robust 8.6%, indicating strong underlying business performance. However, diluted Earnings Per Share (EPS) saw a decrease of 10.3% to $0.61, primarily impacted by incremental costs related to the war in Ukraine, unfavorable mark-to-market adjustments on derivatives, and intangible asset impairment charges. Despite the decline in reported EPS, Adjusted EPS rose by 6.3% to $0.84, reflecting the company's focus on core operational profitability.

Financial Highlights

53 data points
Beta

Revenue

$7.76B

38.4% Gross Margin

Net Income

$855.00M

11.0% Net Margin

EPS (Diluted)

$0.61

Total Assets

$67.99B

Cash & Equivalents

$1.95B

Free Cash Flow

$964.00M

Financial Statements
Beta
Revenue$7.76B
Cost of Revenue$4.78B
Gross Profit$2.98B
SG&A Expenses$1.69B
Operating Income$1.09B
Interest Expense$91.00M
Net Income$855.00M
EPS (Basic)$0.62
EPS (Diluted)$0.61
Shares Outstanding (Basic)1.39B
Shares Outstanding (Diluted)1.40B

Key Highlights

  • 1Net revenues increased by 7.3% to $7.8 billion, driven by pricing, volume/mix, and acquisitions.
  • 2Organic Net Revenue grew by 8.6%, demonstrating strong underlying business momentum.
  • 3Diluted EPS decreased by 10.3% to $0.61 due to war-related costs, derivative impacts, and impairments.
  • 4Adjusted EPS increased by 6.3% to $0.84, showcasing underlying operational strength.
  • 5The company completed the acquisition of Chipita S.A. for approximately $1.9 billion, expanding its European snack portfolio.
  • 6Significant charges of $143 million were incurred due to the war in Ukraine, impacting profitability.
  • 7Cash flow from operations increased to $1.13 billion, supported by improved working capital management and higher cash earnings.

Frequently Asked Questions

The war in Ukraine resulted in $143 million in direct charges during the first quarter of 2022. These charges included asset impairments for damaged facilities and inventory, increased allowances for uncollectible receivables, and committed compensation for employees. The company has ceased new capital investments and suspended advertising in Russia but continues operations there to support food supply continuity. The full extent of the impact remains uncertain due to the ongoing nature of the conflict.

Mondelez completed the acquisition of Chipita S.A. on January 3, 2022, for a total purchase price of approximately €1.7 billion ($1.9 billion). Chipita's operations contributed $169 million in incremental net revenues (on a constant currency basis) in the first quarter of 2022. The acquisition is expected to strategically complement Mondelez's existing snack portfolio and advance its goal of becoming a global leader in broader snacking.

Mondelez anticipates continued price volatility and a higher aggregate cost environment in the remainder of 2022. This is driven by factors such as the war in Ukraine, ongoing supply chain disruptions, rising energy costs, labor shortages, and adverse weather. The company is addressing these pressures through hedging, pricing actions, and productivity and cost-saving measures, but acknowledges that pricing actions may lag cost changes and hedging may not fully offset all increases.

Mondelez expects cash from operations, credit facilities, and authorized financing to provide sufficient liquidity for its needs. The company generated $1.1 billion in cash from operations in Q1 2022. It also recently issued $2 billion in long-term debt and refinanced approximately $2 billion of existing debt, ahead of anticipated rising interest rates. The company's debt-to-capitalization ratio remained stable at 0.41. Overall, management believes liquidity is strong.