Financial Performance Overview
Mondelez International is responding to significant inflation in cocoa prices, projecting that this will reduce its adjusted earnings per share (EPS) by about 10% in fiscal 2025.
This forecast comes after a period of modest growth in revenue as the company adapted to the challenges of fiscal 2024.
For the fiscal year ending December 31, 2024, Mondelez reported a net income of $4.61 billion, which equates to $3.42 per share.
This marks a decline from the $4.96 billion, or $3.62 per share, recorded in the previous year.
However, it’s worth noting that the company performed better on an adjusted basis, with net earnings reaching $4.52 billion, or $3.36 per share, compared to $4.22 billion, or $3.08 per share, the year before.
Despite this improvement, they fell short of analysts’ expectations, which had forecasted adjusted EPS for 2024 at $3.43.
Dirk Van de Put, Mondelez’s chairman and CEO, reflected on 2024 as a year of significant accomplishments, citing balanced growth across both developed and emerging markets.
He emphasized that the company not only maintained healthy earnings but also generated substantial free cash flow.
Strategic investments in their brands and enhancements to distribution efforts were key to achieving positive volume and mix, particularly in the latter half of the year.
Quarterly Performance Highlights
The fourth quarter showcased a remarkable earnings surge, with net income climbing to $1.75 billion, or $1.30 per share—up from $950 million, or 70¢ per share, during the same quarter a year prior.
Nevertheless, when examining adjusted earnings, a decline occurred, with numbers falling to $868 million, or 65¢ per share—a drop from $1.12 billion, or 82¢ per share, year-over-year.
Analysts had anticipated adjusted earnings to be closer to 66¢ for this quarter.
In the face of ongoing inflationary challenges, Mondelez effectively managed costs, leading to notable growth in gross profit dollars.
This success showcases the company’s commitment to disciplined cost control and strategic pricing, which enables them to reinvest in core brands and enhance operational capacities.
Future Outlook and Strategies
As Mondelez looks ahead, it braces for the impact of soaring cocoa prices while striving to responsibly manage the health of its chocolate category.
The company aims to balance financial performance with the fluctuations of costs.
Chief Financial Officer Luca Zaramella noted that despite the volatility in cocoa markets, Mondelez has strategically positioned its procurement process with substantial protection and hedging.
For 2025, Mondelez has forecasted organic net revenue growth of around 5%, reflecting confidence in its long-term revenue trajectory.
The company reported a revenue of $36.44 billion for fiscal 2024, showing a modest increase from $36.02 billion the previous year.
This growth resulted from effective pricing strategies coupled with resilient consumer demand across multiple regions.
During the fourth quarter alone, net revenue rose by 3.1%, reaching $9.6 billion—demonstrating the strength inherent in Mondelez’s diverse portfolio.
The organic growth figures reveal the company’s adaptability, with increases across various markets even as some experienced revenue drops.
As Mondelez prepares for the upcoming year, it is dedicated to refining its pricing approaches and maintaining agility in response to cocoa market fluctuations.
Analysts suggest that improved margins may become more apparent throughout the year, thanks to decisive pricing measures and cost-saving initiatives set for 2025.
Zaramella expressed a hopeful outlook for Mondelez, noting that though cocoa prices may remain high for the time being, the company’s proactive strategies and thorough planning position it favorably for future success.
The belief is that as supply and demand reach a more manageable equilibrium, cocoa prices will stabilize, creating a brighter outlook for 2026 despite present market conditions.
As Mondelez progresses, it exemplifies resilience and adaptability, fostering confidence in its capacity to overcome challenges and capitalize on emerging opportunities.
Source: Foodbusinessnews