Mondelez's Q4 2024 Earnings Call: Unpacking Contradictions in Chocolate Strategy, Biscuit Health, and Cocoa Pricing

These are the key contradictions discussed in Mondelez International's latest 2024 Q4 earnings call, specifically including: Chocolate Strategy and Pricing, U.S. Biscuit Category Health, and Cocoa Pricing Strategy:



Strong Financial Performance in 2024:
- Mondelez International reported mid-single-digit top-line growth and balanced performance across developed and emerging markets, with positive volume mix in the second half of the year.
- The company delivered robust free cash flow of $3.5 billion and returned $4.7 billion to shareholders through buybacks and dividends.
- The growth was supported by ongoing cost discipline, sound pricing strategies, and investments in brands, distribution, and organizational capabilities.

Impact of Cocoa Cost Inflation:
- Mondelez faced significant cost pressures due to record cocoa input costs, impacting profits in the fourth quarter.
- The company is implementing a comprehensive chocolate strategy, including revenue growth management and targeted cost savings to navigate these challenges.
- Despite the cost pressures, Mondelez remains optimistic about its chocolate playbook and strategic growth initiatives.

Regional Performance and Shares:
- Emerging markets grew by 6.2% for the year and 6.7% for the quarter, with strong performance from key countries like China, Brazil, and India.
- In North America, biscuit category volume remained flat, but Mondelez recovered share, reaching a 1.3 percentage point volume mix improvement in Q4.
- The company's strategies included launching new price packs and brand activations, which improved consumer loyalty and market share.

Sustainability Efforts and Strategic Focus:
- Mondelez made progress in sustainability, with 90% of cocoa sourced sustainably and a 38% reduction in carbon emissions versus a 2018 baseline.
- The company continued to expand its digital channels, with e-commerce growing double-digits in 2024, and made strides in revenue growth management and portfolio reshaping.
- Mondelez continues to invest in its iconic brands and partner with local companies to drive growth in emerging markets.

Outlook and Strategic Planning:
- For 2025, Mondelez expects top-line growth of approximately 5%, with an anticipated adjusted EPS decline due to cocoa cost pressures.
- The company plans to maintain strong free cash flow and capitalize on its long-term growth strategy, focusing on operational execution and cost discipline.
- Mondelez is closely monitoring cocoa market dynamics and consumer behavior to adapt pricing strategies and optimize investments in its core categories.