10-QPeriod: Q3 FY2022

Mondelez International, Inc. Quarterly Report for Q3 Ended Sep 30, 2022

Filed November 1, 2022For Securities:MDLZ

Summary

Mondelēz International, Inc. (MDLZ) reported its third-quarter and year-to-date results for the period ending September 29, 2022. The company demonstrated revenue growth, driven by a combination of higher net pricing and favorable volume/mix, with Organic Net Revenue increasing by 12.1% in Q3 and 11.2% year-to-date. This growth was achieved despite significant inflationary pressures, supply chain disruptions, and the ongoing impact of the war in Ukraine, which together increased operating costs. Despite top-line growth, net earnings attributable to Mondelēz International and diluted EPS saw a substantial decrease year-over-year for both the quarter and year-to-date periods. This decline was primarily attributed to a significant increase in acquisition-related costs (including integration costs and contingent consideration adjustments), intangible asset impairment charges, and other one-time expenses. However, Adjusted EPS, which excludes these items, showed an increase, indicating resilience in the core operational performance.

Financial Highlights

53 data points
Beta

Revenue

$7.76B

33.7% Gross Margin

Net Income

$532.00M

6.9% Net Margin

EPS (Diluted)

$0.39

Total Assets

$68.04B

Cash & Equivalents

$2.19B

Free Cash Flow

$313.00M

Financial Statements
Beta
Revenue$7.76B
Cost of Revenue$5.15B
Gross Profit$2.61B
SG&A Expenses$1.88B
Operating Income$679.00M
Interest Expense$114.00M
Net Income$532.00M
EPS (Basic)$0.39
EPS (Diluted)$0.39
Shares Outstanding (Basic)1.37B
Shares Outstanding (Diluted)1.38B

Key Highlights

  • 1Net revenues increased by 8.1% to $7.8 billion in Q3 2022, and by 8.3% to $22.8 billion for the nine months ended September 30, 2022.
  • 2Organic Net Revenue grew by 12.1% in Q3 and 11.2% year-to-date, driven by higher net pricing and favorable volume/mix.
  • 3Diluted EPS attributable to Mondelēz International decreased significantly by 56.2% in Q3 and 33.9% year-to-date, primarily due to elevated acquisition-related costs and other one-time charges.
  • 4Adjusted EPS, a non-GAAP measure, increased by 5.7% in Q3 and 3.7% year-to-date, demonstrating underlying operational strength.
  • 5The company completed two significant acquisitions: Clif Bar & Company for $2.9 billion and Ricolino for $1.3 billion (subsequent to the reporting period).
  • 6The war in Ukraine continued to impact operations, with the company recording $143 million in charges in Q1 2022, though partial reversals occurred in Q2 and Q3.
  • 7Increased input costs, including raw materials and transportation, were a significant factor affecting operating income, partially offset by pricing actions.

Frequently Asked Questions

Revenue growth was driven by a combination of higher net pricing and a favorable volume/mix. Organic Net Revenue, which excludes currency impacts, acquisitions, and divestitures, increased by 12.1% year-over-year, reflecting the underlying performance of the business.

The decrease in Net Earnings and Diluted EPS was primarily due to substantial increases in acquisition-related costs, including integration costs and contingent consideration adjustments for recent acquisitions like Clif Bar and Chipita. Additionally, intangible asset impairment charges and other one-time expenses impacted the reported earnings.

The acquisitions of Clif Bar and Chipita contributed to revenue growth and expanded the company's portfolio. However, they also resulted in significant acquisition-related costs, including integration expenses and the recognition of contingent consideration, which negatively impacted reported Net Earnings and Diluted EPS. These costs are largely excluded when calculating Adjusted EPS.

Inflationary pressures led to higher input costs, such as raw materials and transportation, which put pressure on operating margins. The war in Ukraine also resulted in direct charges and continues to contribute to volatility in international supply chains and higher costs. The company is actively managing these challenges through pricing actions, cost controls, and operational adjustments.