Mondelēz International Q3 2026 Financial Results Webcast - MONDELEZ INTERNATIONAL INC

Explicit Guidance:

• 2027 EPS Growth: Management maintains confidence in delivering "strong EPS growth" in 2027, driven by volume-led growth, productivity savings, and the absorption of inflationary headwinds in freight and commodities (cocoa, dairy, oil, packaging).
• FY2026 Outlook: Revenue and top-line guidance remains unchanged; EPS outlook is maintained for the current year despite absorbing costs related to the Middle East conflict.
• Q4 & Exit Run Rate: Expects continued positive volume-mix growth in Q4 and strong gross profit/operating income dollar growth; no specific quarterly numerical guidance provided, but confidence remains on the full-year trajectory.

Business-Segment Outlook:

• Emerging Markets: Viewed as a "strong engine" for volume and top-line growth; India and Latin America (Mexico, Brazil) remain constructive. India saw 130,000 new outlets YTD; Brazil exceeds 1 million stores. China has a "very long runway."
• Europe: Consumer confidence is "stable but cautious" due to energy prices. Positive volume mix growth of 1.6% expected to continue for the remainder of the year despite unseasonably hot weather impact (-1%) in Q3. Europe expected to show "increasing stabilization" in 2027.
• North America: Consumer confidence remains "soft" due to fuel/energy prices, with growth concentrated in higher-income households. Share gains are expected to continue in 2027 ("keep into BPNL") via promo discipline, under-indexed channel growth, and innovation (Oreo Zero, Ritz-Minis, Cleefight Protein). Savory biscuits and candy categories are "on a roll" with share gains.
• Latin America: Volume pressure attributed primarily to Argentina (managed for cash). Excluding Argentina, non-chocolate volume mix grew 4-5%. Brazil's chocolate business is "turning the corner" in volume mix as pricing impacts lap in 2027.
• Acquisition (Undercover Snacks): Majority stake acquired for "better-for-you" positioning; deal expected to close by early 2027. Expected to be incremental to the portfolio but "won't make a big difference in '27" regarding financial impact.

Market and Competitive Outlook:

• Pricing Strategy: In North America, promotions are becoming "more precise" with increased frequency and depth, driving incrementality. In Europe, pricing actions taken earlier in the year are being lapped, leading to potential negative pricing impacts in Q4 and early next year specifically for the chocolate category, though volume mix remains strong.
• Share Dynamics: Share improvements observed across Europe, North America, and South America; Europe expects broad-based positive volume mix.
• Commodity Outlook (Cocoa): Market fundamentals differ from the 2024 spike; 2025/26 expected to end with a 500,000-ton surplus. 2026/27 projected to show a deficit of ~190,000 tons due to weather (El Niño) and crop issues, but ample surplus inventory should absorb this. Cocoa prices remain "range bound."

Macro / Industry Outlook:

• Consumer Confidence: Divergent sentiment: Resilient in emerging markets (positive in India, solid in LATAM, softer but constructive in China); stable/cautious in Europe; soft in North America.
• Inflation & Costs: Concerns exist regarding inflation driven by Middle East conflict (freight) and general commodity inflation (dairy, oil, packaging, cocoa). Management expects to absorb these costs through productivity and selective pricing (PPA).
• Economic Structure: North America described as a "K-shaped economy" with growth driven by higher-income households.

Strategic Initiatives:

• Productivity: Accelerating supply chain and procurement productivity programs to offset inflation and drive 2027 earnings growth.
• Distribution Expansion: Continuing to increase distribution in emerging markets; estimated 25% "numeric distribution" runway remains in China, India, and Brazil.
• Innovation: Focus on "better-for-you" and "permissible indulgence" segments (e.g., Undercover Snacks, Oreo Zero, Cleefight Protein) to drive volume.
• M&A Strategy: Maintaining a "bolt-on" strategy targeting gaps in geography or category. Potential targets range from small acquisitions to "bolt-outs" in the $500M–$1B sales range.

Risks and Headwinds to Outlook:

• Geopolitical/Commodity Risks: Inflationary pressure from the conflict in the Middle East impacting freight costs; potential cocoa deficit in 2026/27 if El Niño impacts crop yields (though mitigated by current surplus).
• Macro Uncertainty: Weak consumer confidence and high energy prices in Europe and North America could dampen volume growth if not offset by price actions or promotions.
• Execution Risks: Success of 2027 guidance depends on the ability to maintain volume momentum and execute on productivity savings amidst volatile input costs.
• Pricing Risks: Negative pricing headwinds in Europe (chocolate) in the near term due to lapping higher prices from the prior year.

Management Tone on the Future:

• Confidence: High confidence in 2027 EPS growth despite macro volatility.
• Reinvestment: Commitment to reinvesting upside back into the business (ANC, innovation, emerging markets) rather than returning it to shareholders via buybacks/dividends in the short term.
• Strategic Focus: Emphasis on "execution," "discipline," and "incrementality" rather than aggressive pricing wars. Management views the current cost environment as manageable due to strong productivity levers.

Miscellaneous:

• Undercover Snacks Integration: Will operate as a standalone unit within North American Ventures, retaining original CEO (Diana Levy).
• Cocoa Surplus Context: Management notes industry coverage levels are at ~9 months, significantly stronger than the 2024 crisis levels.