The paragraph introduces the Mondelez International First Quarter 2025 Earnings Conference Call, indicating it will last about an hour and include presentations from the company's management and a Q&A session. The call is being led by Shep Dunlap, Senior Vice President of Investor Relations, who is joined by CEO Dirk Van de Put and CFO Luca Zaramella. They have released related press materials on their website and plan to discuss forward-looking statements subject to risks and uncertainties. The financial results will focus on non-GAAP measures and constant currency growth unless specified otherwise. Dirk Van de Put will present a business and strategy update, followed by Luca's financial results review and future outlook, concluding with a Q&A session. Dirk mentions they're pleased with the solid results for the first quarter, achieved despite external challenges.

The paragraph outlines the company's performance and strategic focus amidst economic challenges. The top line grew by 3.1% due to effective pricing in the chocolate sector, despite high cocoa costs. While volume mix declined by 3.5% due to elasticity and other onetime factors like Easter phasing and retailer inventory destocking, the company implemented plant activities and pricing strategies with minimal disruption. Despite these challenges, they reported $800 million in free cash flow. The snacking categories, particularly biscuits, showed resilience, although economic concerns and cost-of-living challenges in North America have impacted consumer behavior. The company remains confident in its strategic agenda, focusing on cost savings and effective execution.

The paragraph highlights Mondelez's strategic growth agenda and brand strength despite declining consumer confidence. Brands like Oreo and Cadbury Dairy Milk remain popular, supporting market share growth. Mondelez is reinforcing its market position through strategic investments, distribution expansion, and innovative collaborations. In particular, the Oreo collaboration with Post Malone and the Cadbury Dairy Milk partnership with Lotus Bakeries showcase creative initiatives that align with consumer trends. Emerging markets see solid growth, even as consumer confidence varies by country.

The paragraph highlights the company's expansion and sustainability efforts, including the addition of over 100,000 stores in emerging markets in Q1 and achieving a top tier ranking in the Global Advantage survey. The company published its annual Snacking Made Right report, showcasing progress in its sustainability strategy, meeting 2024 targets, and expanding the Cocoa Life program to source 91% of cocoa volume for its chocolate business. The company also reduced carbon emissions by 12% from the 2018 baseline and emphasizes the importance of sustainable business practices. The chocolate strategy is on track despite high cocoa costs, with a reconfigured portfolio to suit various snacking occasions.

The paragraph discusses the company's strategy of maintaining entry-level pricing to stimulate consumption while successfully implementing pricing changes in Europe with minimal disruption, leading to expected elasticity. The company has increased its market share in chocolate, up 0.4 points year-to-date, through innovation in flavors and formats. Iconic seasonal chocolates remain a consumer favorite. New products, such as co-branded tablets with unique flavors, are being introduced. The company is confident in its long-term success despite current cocoa cost challenges. Luca Zaramella then reports strong Q1 financials, noting solid revenue growth of 3.1% due to strong pricing, despite a 3.5% decline in volume mix from chocolate pricing elasticity and other factors. Developed markets grew 2.6% with a 3.3% volume mix decline due to retailer destocking and some elasticity.

The paragraph discusses the financial performance across various markets and product categories for a company. Total revenue growth in emerging markets was 3.9%, driven by strong results in Brazil, China, and parts of the Middle East and Africa, despite some softness in India and Southeast Asia. The biscuits and baked snacks segment grew slightly by 0.3%, with growth from brands like LU and 7DAYS, but faced challenges in the US due to retailer de-stocking and declining consumer confidence. The chocolate segment grew by 10.1% across markets, despite a volume mix drop due to elasticity and product strategies, with strong performance from brands such as Cadbury and Milka. Gum and candy saw a 1% growth, led by performance in China and Mexico. The company held or gained market share in 7% of its revenue base, particularly in chocolate and biscuits. Adjusted category growth is projected at 3%, expected to accelerate with additional chocolate pricing strategies.

In Q1, Europe experienced an 8.9% growth, driven by effective pricing execution amid cocoa inflation, a successful Easter season, and share gains, although volume declined due to expected elasticity levels. Operating income dropped 26% due to cocoa inflation. North America faced a 3.6% decline due to retailer destocking and weaker consumer demand, especially among lower-income households, despite share gains and stable total consumption. The introduction of new products and improved store execution are expected to boost performance. North America's operating income decreased 18% due to lower volume and cocoa inflation. Meanwhile, AMEA grew 1.8%, with strong performance in China led by Oreo, Chips Ahoy, and Stride, but India declined due to inflation and wage growth challenges.

In Q2, the India business is expected to improve due to targeted strategies and a favorable economic environment. Australia, New Zealand, and Japan experienced strong quarterly growth driven by Easter execution and pricing. AMEA's operating income fell by 8.3% due to increased cocoa prices, while Latin America saw a 3.9% growth despite a 2.5% decline in volume mix. Brazil and Mexico showed mixed results in various product categories. Latin America's operating income decreased by 12.4% because of cocoa inflation. Overall, Q1's volume mix declined by 3.5%, influenced by factors like US trade destocking and packaging downsizing. Gross profit dropped by 12%, offset by top-line growth and cost efficiency amid significant cocoa inflation, now factored into the annual outlook.

The paragraph discusses the company's financial performance and outlook. In Q1, EPS declined by 18% in constant currency, but the company delivered $800 million in free cash flow and repurchased $1.5 billion in stock. It notes changes in cocoa prices and the industry's shift away from cocoa due to high costs. Despite these changes, the company remains confident in its pricing strategy. The outlook for 2025 is unchanged, projecting approximately 5% revenue growth with stable inflation, interest, and tax costs. Currency impacts have shifted due to a weaker dollar, with no expected effect on net revenue and EPS from foreign exchange. Most US production aligns with USMCA compliance, minimizing tariff concerns.

The paragraph discusses the impact of tariffs on the company's sourcing of finished goods and ingredients, which are included in the current earnings outlook. The company plans to maintain a balanced profit and loss (P&L) statement in 2025 while strengthening its chocolate business for the long term. Despite fluctuations in cocoa prices, the company expects continued earnings per share (EPS) growth in 2026 and may reinvest savings into the business if cocoa prices improve. During the Q&A, Dirk Van De Put highlights the company's strong start to the year despite external challenges. Key positives include successful price increase negotiations in Europe and effective pricing and RGM activities in the chocolate business.

The paragraph discusses the impact of Easter on the company's performance, indicating strong results in markets like the UK and emerging markets such as China and Brazil, despite North America being the most affected. It highlights a mixed consumer sentiment due to global economic uncertainty, with significant declines in US consumer confidence driven by inflation fears. This situation is leading consumers to prioritize essentials over snacks, affecting the biscuit category less severely than other snack categories. There's a noted shift towards value-focused retail channels and pack sizes, with lower-income consumers opting for smaller packs and higher-income consumers for larger ones. Overall, the company remains optimistic about its full-year outlook.

The paragraph discusses trends in the snack category, highlighting a 1.5% decline in the biscuit category's value, though it fared better than other snacks. Cookies are performing better than crackers, and private label products gained market share due to the launch of affordable formats called "fresh stacks." In the U.S., consumer confidence is expected to remain low, whereas, in Europe, it's stable, though consumers are becoming more frugal and shifting to smaller packs and discount channels. Chocolate sales align with expectations despite price hikes. The European business is performing well with resilient consumer confidence, especially in France. In emerging markets, consumer confidence is weaker due to inflation and trade volatility, especially in China, though India shows stability and optimism.

The paragraph discusses the economic conditions in Brazil and Mexico, noting softer consumer trends due to economic uncertainty and inflation. The speaker is optimistic about stability in emerging markets and highlights gaining market share, emphasizing the need to remain agile and vigilant globally. Andrew Lazar asks for insights on North America and European pricing. Luca Zaramella affirms their 2025 guidance and mentions improved customer negotiations and robust pricing, especially in chocolate and biscuits. The Easter season was successful, with market gains in Brazil and Australia, and the biscuits category performing well outside North America.

The paragraph discusses the company's financial performance and strategic plans amidst various market challenges. It notes that while there have been some cost increases and consumer sentiment in the US has impacted certain categories, the biscuit category is performing better than others. Trade destocking significantly affected volume mix in the US, but this is considered a one-time impact. The company expects top-line and volume acceleration in Q2 and maintains flexibility to adapt to changes in the market. It plans to reinvest earnings upside into the business and maintain disciplined capital allocation, including stock buybacks. The conversation then shifts to addressing the strategy to mitigate cocoa inflation.

The paragraph discusses the company's multifaceted strategy focusing on productivity, revenue growth management (RGM), and pricing. The speaker, Dirk Van De Put, highlights their aggressive RGM strategy, which includes offering a range of product sizes to provide various price options for consumers. A successful activation for this strategy was Easter, with more initiatives planned for the year. Additionally, the company is introducing new and unique products to attract consumers, such as the Cadbury Biscoff product, which is their top-selling SKU in the UK. They plan to expand this product line into more markets and introduce further innovations under the Cadbury Biscoff and Milka Biscoff brands. The strategy also includes protecting key price points.

The paragraph discusses the company's recent pricing strategies in various markets, including maintaining low unit prices in India and not breaching thresholds in developed markets. The company has successfully completed pricing negotiations with clients, and consumers are already seeing these prices in several regions, though reactions vary. So far, consumer price elasticity is as expected, and the company has experienced growth in volume and market share. However, the company is cautious due to volatile macroeconomic conditions and the need to monitor diverse consumer reactions by region. Ultimately, they remain optimistic about the chocolate market, believing in continued consumer demand despite price increases.

The paragraph discusses the long-term outlook for the chocolate business, emphasizing strong brand loyalty and low cross-substitution, meaning consumers are unlikely to switch to other products for the same satisfaction. The company plans to take a long-term approach, focusing on reinvesting any gains into their chocolate business rather than seeking short-term profits. The future strategy will depend on cocoa prices, with potential adjustments through revenue growth management (RGM) if prices remain high. The conversation then shifts to Peter Galbo from Bank of America, who queries Luca Zaramella about Easter timing shifts in chocolate sales and suggests that chocolate demand elasticity might be more favorable than initially expected.

In the paragraph, Luca Zaramella discusses the favorable pricing situation in Q1 and anticipates further pricing impacts in Europe, Brazil, and India from April through June, which may influence elasticity expectations and revenue growth in Q2. He notes the strong performance of Easter sales, particularly in Europe, the UK, Brazil, and Australia, despite price increases. Zaramella hopes for minimal elasticity in key markets like Brazil and India by protecting key price points. Peter Galbo then inquires about destocking in North America, particularly given the company's use of a direct store delivery (DSD) system. Dirk Van De Put responds by stating that the destocking is primarily observed in food and mass channels, where retailers still maintain some stock and influence order levels.

In the paragraph, Megan Clapp from Morgan Stanley asks about the better-than-expected profit dollar generation in the quarter, noting a previous projection that profits would be more pressured in Q1 with improvement expected later. Luca Zaramella responds by explaining that the upside came from three main factors: slightly better-than-planned pricing excluding the US, enhanced productivity especially in procurement, and a positive impact from commodities. He clarifies that these factors provided a timing upside in Q1 but are not expected to have a significant impact in future quarters.

The paragraph discusses Mondelez's current financial situation, emphasizing the positive impact of obtaining commodities at favorable prices, which has increased margins. Although there is potential pressure from tariffs, the company deems the impact minimal and manageable. They are negotiating with suppliers to mitigate effects, with expected influence on Q4 results in North America. Percentage margins appear misleading due to increased chocolate pricing, but the focus is on profit per kilo. By effectively managing elasticities, Mondelez anticipates profitability growth into 2026. Megan Clapp then inquires about the US biscuit market, noting Mondelez's progress in market share despite softness in the US sector, and asks for further insights from Dirk.

In the paragraph, Dirk Van De Put discusses the current challenges faced by the consumer market due to economic uncertainty, leading consumers to prioritize essential food items over indulgent categories like personal care, alcohol, and snacks. He notes that while most snacking categories have seen a decline in volume, biscuits have performed relatively better. To address these challenges, the company is focusing on offering products at lower price points, below $3, and enhancing product activations and displays. Upcoming promotional strategies, such as a global campaign with Selena Gomez, are anticipated to boost interest and sales, similar to the success of a previous campaign with Post Malone.

The paragraph discusses the company's strategy in the biscuits category, focusing on pushing multi-packs to offer better value to consumers, which is proving successful. The company anticipates an improvement in volume growth in the second half of the year and is committed to controlling factors within their control to improve their business trajectory, especially in the US. Additionally, Luca Zaramella notes that the company has been able to procure commodities at more favorable rates than expected, particularly with minor commodities, and has locked in prices for the year. The company has also made strategic moves in the foreign exchange market, leveraging currency dynamics for future advantages.

The paragraph discusses the current state of the cocoa market and its impact on business strategy. Christopher Carey questions whether the company would reinvest in its chocolate business if cocoa prices decrease, considering this could improve profit margins. Luca Zaramella responds by analyzing the cocoa market fundamentals, noting a projected 10% increase in total supply compared to the previous year. However, he points out that demand, as indicated by grindings (a proxy for consumption), is down 3% to 4%. He suggests that the market is underestimating the demand impact, especially in the U.S., which is experiencing higher elasticity and volume pressure, including during occasions like Easter.

The paragraph discusses the impact of cocoa prices on a business's strategy for the chocolate category. It explains that categories using chocolate as a secondary ingredient are reformulating and downsizing. The company expects the demand side to positively affect future cocoa costs and aims to maintain expected elasticity and gross profit. If cocoa prices drop, the company sees opportunities to expand profits and reinvest in the business, especially in emerging markets. However, if cocoa prices remain high, they do not anticipate significant challenges going into 2026. The company has noticed that cocoa butter prices, which are more relevant to them than cocoa powder, are already declining for 2026. Regardless of cocoa price fluctuations, the company plans to implement non-regrettable actions through 2025 to position itself for growth in 2026.

The paragraph discusses the underperformance of the US snacking market compared to other global markets, attributing it largely to consumer uncertainty about the future, leading to more frugal behavior across various spending categories. Dirk Van De Put notes that nearly all snacking categories, except for yogurt, are down, reflecting broader caution among consumers. He also mentions a trend toward health and wellness in snacking, where products like yogurt, protein bars, gluten-free, and low-sugar options are performing better. These health-conscious choices, alongside low consumer confidence, are significant factors affecting the snacking market. David Palmer then asks for a follow-up on emerging markets.

In the discussed paragraph, Dirk Van De Put addresses the growth expectations for emerging markets in the coming year. He notes that China is expected to continue at high-single-digit growth, while India, which faced a drop due to pricing and market factors, is anticipated to rebound. Brazil showed mid-single-digit growth and may accelerate due to pricing and new activities. Mexico is improving despite challenges from the previous year, with notable progress in certain product lines. Overall, while total growth in emerging markets might not reach double digits, an acceleration in the second half of the year is expected.

The paragraph describes the conclusion of a meeting or conference call where participants discussed first quarter results, expressed optimism about the performance, and looked forward to the second quarter. Luca Zaramella thanked everyone, and the operator announced the end of the program, allowing participants to disconnect.

This summary was generated with AI and may contain some inaccuracies.