10-QPeriod: Q3 FY2023

Mondelez International, Inc. Quarterly Report for Q3 Ended Sep 30, 2023

Filed November 1, 2023For Securities:MDLZ

Summary

Mondelez International, Inc. (MDLZ) reported strong top-line growth in its third quarter and first nine months of 2023, driven by a combination of higher net pricing, favorable volume/mix, and contributions from recent acquisitions (Ricolino and Clif Bar). Net revenues increased by 16.3% in the third quarter and 17.1% year-to-date. Organic Net Revenue, a key non-GAAP metric, also showed robust growth, indicating healthy underlying business performance. Profitability saw a significant year-over-year improvement, particularly in net earnings and diluted EPS, largely due to lapping prior-year acquisition-related costs and favorable mark-to-market impacts from derivatives. Adjusted EPS, which excludes one-time items, also demonstrated solid growth, reflecting the operational strength of the business. The company continues to navigate a challenging macroeconomic environment characterized by inflation and supply chain pressures, but its pricing strategies and operational efficiencies appear to be effectively mitigating these headwinds.

Financial Highlights

54 data points
Beta

Revenue

$9.03B

38.7% Gross Margin

Net Income

$984.00M

10.9% Net Margin

EPS (Diluted)

$0.72

Total Assets

$70.86B

Cash & Equivalents

$1.68B

Free Cash Flow

$892.00M

Financial Statements
Beta
Revenue$9.03B
Cost of Revenue$5.54B
Gross Profit$3.49B
SG&A Expenses$2.02B
Operating Income$1.38B
Interest Expense$134.00M
Net Income$984.00M
EPS (Basic)$0.72
EPS (Diluted)$0.72
Shares Outstanding (Basic)1.36B
Shares Outstanding (Diluted)1.37B

Key Highlights

  • 1Net revenues increased 16.3% to $9.0 billion in Q3 2023 and 17.1% to $26.7 billion for the first nine months of 2023, driven by pricing, volume/mix, and acquisitions.
  • 2Organic Net Revenue grew 15.7% in Q3 and 17.0% year-to-date, signaling strong underlying business momentum.
  • 3Diluted EPS surged 84.6% to $0.72 in Q3 and 89.6% to $2.92 year-to-date, boosted by favorable year-over-year comparisons and operational improvements.
  • 4Adjusted EPS (non-GAAP) increased 13.9% in Q3 to $0.82 and 13.4% year-to-date to $2.46, reflecting continued profitability growth excluding special items.
  • 5The company completed the sale of its developed market gum business in October 2023, which was previously classified as held for sale.
  • 6Acquisitions of Ricolino and Clif Bar continue to contribute positively to net revenues and operating income.
  • 7Mondelez International is actively managing inflationary pressures through pricing actions and cost control initiatives.

Frequently Asked Questions

The increase in net revenues was primarily driven by higher net pricing, favorable volume/mix across most categories and regions, and incremental revenue from the acquisitions of Ricolino and Clif Bar completed in 2022. Unfavorable currency translation partially offset the growth.

Mondelez International is employing a multi-faceted approach, including implementing higher net pricing, focusing on operational efficiencies and cost controls, and utilizing hedging strategies for certain commodities. The company's pricing actions are aimed at offsetting higher raw material, transportation, and labor costs.

The sale of the developed market gum business was completed on October 1, 2023. While the financial impact of this divestiture is reflected in the year-to-date results (as it was classified as held for sale), the company expects the proceeds to be utilized for general corporate purposes, contributing to financial flexibility. The narrative indicates the divestiture's impact on net revenues was minor and previously accounted for.

Diluted EPS saw a substantial increase of 84.6% in the third quarter and 89.6% year-to-date. This significant improvement was largely due to lapping prior-year acquisition-related costs, favorable year-over-year mark-to-market impacts from derivatives, and a gain on marketable securities. Adjusted EPS, which excludes these special items, also showed healthy growth, indicating underlying operational strength.