Mondelēz International Q3 2026 Financial Results Webcast - MONDELEZ INTERNATIONAL INC

Financial Performance:

• Maintained full-year EPS and top-line growth outlooks, with strong EPS growth projected for 2027 driven by volume-led growth and productivity savings.
• Q3 delivered better-than-expected gross profit driven by operating leverage, supply chain productivity, and timing of lower cocoa costs; net income growth supported by strong volume mix.
• Revenue growth sustained across regions despite inflationary pressures, with Europe showing 1.6% positive volume mix growth (excluding 1% negative weather impact).
• North America posted solid organic sales growth driven by share gains and precise promotional tactics, while emerging markets (India, Brazil) delivered >20% growth.
• Deferred revenue and cash flow metrics not explicitly detailed, but strong gross profit delivery enabled reinvestment into Advertising, New Product Launches (ANP), and brand activations.

Guidance and Future Outlook:

• Reiterated confidence in strong EPS growth for 2027, assuming continued volume momentum and absorption of inflation in freight, fuel, and commodities (dairy, oil, packaging).
• 2027 growth strategy relies on emerging market expansion, European stabilization, and North American momentum; no specific revenue growth guidance provided for 2027 yet.
• Q4 expectations include continued volume mix growth and strong gross profit growth, with any upside reinvested back into the business.
• Full-year guidance maintained despite headwinds from Middle East conflict impacts on freight and inflationary costs.

Business Segments and Product Lines:

• Emerging Markets: India added 130,000 outlets YTD; Brazil now has >1M stores; China continues strong top-line and volume growth with long distribution runway.
• Europe: Positive volume mix of 1.6% across biscuits and chocolate; innovations like Biscoff and Milka Croissant performing well; pricing decisions from early in the year driving profit pool restoration.
• North America: Share gains in savory snacks and chocolate (Oreo Zero, Ritz Minis, Zbar); promotion strategy refined to reduce switching between promo and regular price; gum and candy (Trident) achieving record share and penetration.
• New Acquisitions: Acquired majority stake in "Undercover Snacks" (crispy quinoa, gluten-free, allergy-friendly); expected to close early 2027; operates as standalone unit within North American Ventures to capture "better-for-you" trends.
• Productivity: Accelerating supply chain productivity program to offset rising costs of raw materials and logistics.

Market and Competitive Landscape:

• Emerging Markets: Consumer confidence resilient in India and Latin America; China is softer but remains constructive; distribution universe is expanding (India, SE Asia, LatAm).
• Europe: Consumers cautious due to energy prices and cost of living; competitors acting rationally; Mondelez improving share dynamics through execution.
• North America: Consumer confidence soft due to energy/fuel prices; K-shaped economy benefiting higher-income households; peers are beginning to raise prices, validating Mondelez's disciplined approach.
• Commodities: Cocoa market fundamentals stronger than 2024; 2025/26 cycle expected to end with 500k ton surplus; 2026/27 projected 190k ton deficit absorbable by current inventories; prices range-bound.

Risks and Challenges:

• Inflation: Elevated inflation driven by conflict in the Middle East affecting freight and fuel; input cost inflation for dairy, oil, and packaging.
• Consumer Sentiment: Soft consumer confidence in North America; cautious spending in Europe due to cost of living; specific pressure in Brazil's chocolate segment and Argentina in Latin America.
• Weather: Unseasonably hot weather negatively impacted European growth by 1% in Q3.
• Macro Volatility: Increased macro volatility and potential El Niño effects impacting cocoa crop cycles.

Management Commentary and Tone:

• Tone is confident and execution-focused; management emphasizes discipline in pricing, promotion, and reinvestment.
• Derek Vandeput (CEO) highlighted resilience in emerging markets and strong execution in developed markets despite soft consumer sentiment.
• Luca Zaramella (COO) stressed the success of refined promotion tactics in North America and the strategic shift toward "better-for-you" snacks.
• Amit Banati (CFO) expressed confidence in delivering strong EPS in 2027 through volume growth and productivity, despite inflationary headwinds.

Analyst Questions and Answers:

• Barclays (Andrew Lazar): Asked about consumer state and 2027 visibility. Management confirmed emerging market strength, European volume mix improvement, and NA share gains; reiterated 2027 EPS confidence despite inflation.
• Bank of America (Peter Gallo): Inquired about NA pricing strategy and Europe's pricing impact. Management explained disciplined pricing in NA yielding share gains and clarified Europe's pricing was a strategic, sound decision to restore chocolate profit pools.
• U.S. Bank (Rob Dickerson): Asked about the Undercover acquisition and cocoa outlook. Management detailed the strategic fit for "better-for-you" demand and provided a bullish view on cocoa supply/demand fundamentals.
• Wells Fargo (Chris Carey): Asked about LatAm volume flattening and Q4 expectations. Management attributed LatAm softness to Argentina's pricing discipline and Brazil's chocolate portfolio adjustments; confirmed strong Q4 volume mix and gross profit.
• BNP (Max Gumport): Asked about gross profit drivers and distribution runway. Management cited volume growth, productivity, and cocoa timing; estimated ~25% remaining numeric distribution opportunity in key markets like India/China.
• J.P. Morgan (Tom Palmer): Asked about cost environment and M&A appetite. Management confirmed confidence in 2027 EPS despite cost pressures; clarified M&A strategy remains focused on bolt-ons (up to $1B) rather than large acquisitions.
• Bernstein (Alexia Howard): Asked about 2027 sales growth outlook. Management avoided specific sales guidance, emphasizing reinvestment to drive volume and stating pricing pressure in Europe may persist through next couple of quarters.

Other Key Points:

• Non-GAAP financial measures were referenced throughout the call.
• Forward-looking statements were cautioned regarding risks, uncertainties, and actual results.
• The company continues to prioritize "incrementality" in promotions and innovation over aggressive price cuts.
• Undercover Snacks will retain its founder/CEO and operate as a standalone unit, leveraging Mondelez's distribution and marketing expertise.