Mondelēz International joins Unilever and Danone with strong Q3
The Cadbury chocolate owner posted net organic revenues up 5.4% to $9.2bn for the third quarter in an update today. Adjusted operating profits hiked up 21% to an admirable $1.7bn.
Although volume increases did contribute to higher figures, elevated net pricing in Q3 and year-to-date had added to the positive results.
Europe boasted the strongest organic sales rise of 8.1%, driven by a 7.6% pricing increase, with Asia, Middle East & Africa up 3.4%. North America, however, drooped 0.7%.
“Mondelēz beat consensus with organic growth of 5.4%,” said TD Cowen analysts. “Gross margin and op margin both beat significantly. This is good news, but it is unclear if it reflects the timing of cocoa cost inflation, which may not have fully flowed through,” analysts warned.
Mondelēz International Q4 predictionsWhile Mondelēz’s Q3 beat expectations, the business remained cautious of the market, specifically around geopolitical uncertainty, fluctuating consumer demand, inflationary pressures and supply constraints.
The business expected to face higher cocoa costs, as the market price for beans was up “significantly” year on year and would likely remain elevated for some time.
This contradicts CEO Dirk Van de Put’s and CFO Luca Zaramella’s earlier remarks about potential cocoa pricing positivity, as reported by FoodNavigator.
Cocoa prices had come down “quite a bit from most recent historical highs”, said Zaramella, who added there was belief this year’s crop in Africa was “going to be quite good”, with yields up around “20-25% from what happened last year”.
Despite warnings on cocoa pricing, Mondelēz remained positive overall and believed snacks revenue growth would be strong.
“We posted robust results for Q3, with accelerated top-line growth, strong earnings and attractive cash flow generation,” said Van de Put.
How will Mondelēz develop its business strategy into 2025?“These results were driven by our commitment to executing with excellence across our categories, markets and brands.”
Future focus would remain on tightening costs, accelerating the “core business” and strategically reshaping the Mondelēz International portfolio.
Part of the business’s strategy was to invest in bakery and pastries businesses, which it had done on a large scale with its acquisition of Chinese cakes and pastries firm Evirth earlier this year.
Such acquisitions and investments were core to its growth, as Snackfutures head Richie Gray told FoodNavigator ahead of the group’s investment in healthier doughnut brand Urban Legend.
Meanwhile, Unilever and Danone also posted higher than expected Q3 revenues last week, driven mostly by higher volume sales.
