Mondelez International (MDLZ) Q3 2024 earnings summary

Executive summary

• Q3 2024 delivered strong top-line growth, with organic net revenue up 5.4% year-over-year, driven by positive volume/mix and pricing gains in both developed and emerging markets, despite headwinds such as Western brand boycotts and currency impacts.

• Adjusted EPS increased 28.6% to $0.99 in Q3, while reported EPS declined 12.5% to $0.63 due to mark-to-market losses and impairment charges.

• Free cash flow reached $2.5 billion year-to-date, supporting continued investment, shareholder returns, and business expansion.

• Announced acquisition of a majority stake in Evirth, a leading cakes and pastries manufacturer in China, expanding presence in a high-growth category.

• Sale of JDE Peet's shares for over $2.3 billion, with proceeds to be used for debt reduction, buybacks, and M&A; expected $0.08 EPS headwind for the full year.

Financial highlights

• Q3 organic net revenue grew 5.4% year-over-year; adjusted gross profit margin rose to 40.5% and adjusted operating income margin to 18.9%.

• Adjusted EPS rose 28.6% to $0.99 in Q3; year-to-date adjusted EPS up 23.0% at constant FX.

• Free cash flow reached $2.5 billion YTD, up $99 million year-over-year; share repurchases totaled $1.2 billion and dividends $1.7 billion YTD.

• Q3 net revenues were $9.2 billion (+1.9% YoY); Q3 operating income was $1.15 billion (-16.4% YoY); Q3 net earnings were $853 million (-13.3% YoY).

• Developed markets revenue up 5.6% with 1% volume mix growth; emerging markets revenue up 4.9% with a 1% volume mix decline.

Outlook and guidance

• 2024 organic net revenue growth expected at the upper end of 3–5%, with high single-digit adjusted EPS growth at constant FX.

• Free cash flow guidance raised to over $3.5 billion for FY24.

• Q4 and 2025 profits to be pressured by peak cocoa costs, with normalization expected in 2026; currency translation estimated to reduce 2024 net revenue growth by ~1.5% and adjusted EPS by $0.11.

• ERP system implementation to drive transformation through 2028, with most costs as operating expenses.

• Inflation in cost of goods sold expected in mid-single digits; ongoing volatility from inflation, supply constraints, and currency fluctuations.