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Originally a branch of Kraft Foods, the company now owns a multitude of famous food brands including Jello, Halls, Oreo, and Belvita. In May, Mondelez announced the purchase of Chipita SA, an Athens-based snacking company, for $2 billion.

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F500-2021-108-Mondelez International

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G500-Featured Image-Logo-2020

The global snacking giant spun off from Kraft Foods in 2012 and markets products in more than 150 countries. Associated brands include Cadbury, Oreo, and Chips Ahoy!

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Global business is back. After limping through a worldwide financial crisis and economic slowdown, the 500 largest companies ranked by revenues shattered all sorts of performance records in 2013: They racked up combined revenues of $31.1 trillion, up 2.5% from 2012, and profits soared 27% to nearly $2 trillion. China’s 95 companies (up from 89 last year) posted $5.8 trillion in revenues. The U.S. has four fewer companies on the list than last year but remains (for now) the country leader, with 128 corporations on the list—including No. 1 Wal-Mart Stores—reporting $8.6 trillion in revenues. 

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Chances are you have a Mondelez product in your pantry. The company (formerly known as Kraft Foods Inc.) sells a wide array of brands including Oreo, Ritz, Clif Bar, and Tate’s Bake Shop, as well as Cadbury Dairy Milk, Milka, and Toblerone chocolates. Its products are sold through supermarket chains, wholesalers, supercenters, gas stations, drugstores, and other outlets. Mondelez’s Mindful Snacking initiative aims to promote healthier eating habits through individually wrapped portions and mindful portion labeling.

Q2 2026

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Mondelēz International (MDLZ): Company Profile, Stock Price, News, Rankings

legacy

Mondelēz International

mondelēz international

Please standby. Your program is about to begin. Good day, and welcome to the Mondelez International First Quarter twenty twenty five Earnings Conference Call. Today's conference is scheduled to last about one hour, including remarks from By Mondelez management and the question and answer session. I would now like to turn the call over to Mr.

Shep Dunlap, Senior Vice President, Investor Relations for Mondelez. Please go ahead, sir.

Good afternoon, and thank you for joining us. With me today are Dirk Van de Put, our Chairman and CEO and Luca Zaramella, our CFO. Earlier today, we sent out our press release and presentation slides, which are available on our website. During this call, we'll make forward looking statements about the company's performance. These statements are based on how we see things today.

Actual results may differ materially due to risks and uncertainties. Please refer to the cautionary statements and risk factors contained in our 10 ks, Q and eight ks filings for more details on our forward looking statements. As we discuss our results today, unless noted as reported, we'll be referencing our non GAAP financial measures, which adjust for certain items included in our GAAP results. In addition, we provide our year over year growth on a constant currency basis unless otherwise noted. You can find the comparable GAAP measures and GAAP to non GAAP reconciliations within our earnings release and at the back of the slide presentation.

Today, Dirk will provide a business and strategy update, followed by a review of our financial results and outlook by Luca. We will close with Q and A. I'll now turn the call over to Dirk.

Thanks, Shep, and thanks to everyone for joining the call today. I will start on Slide four. I'm pleased to share that we delivered solid results for the first quarter, driven by sound execution despite significant external volatility. Our top line grew 3.1% behind strong pricing execution across our chocolate business due to unprecedented input costs for cocoa. We also delivered strong profit dollar generation and free cash flow.

These results along with solid category growth reinforce our continued confidence in our full year outlook. We remain committed to delivering against our strategic agenda, focusing on the controllables and staying agile in this challenging macro environment. We are continuing to execute with excellence against our chocolate strategy and our cost savings program. Both of these initiatives are on track and we'll provide additional color throughout today's call. Turning to slide five, you can see that organic net revenue grew 3.1%.

Volume mix was down 3.5 points due to elasticity, consistent with our expectations. We also implemented plant activities in our chocolate business. And a few one time factors also affected volume mix, which included Easter phasing and retailer inventory destocking, which Luca will describe in more detail later. Pricing execution related to cocoa inflation was strong. We have now implemented planned pricing across many key markets with minimal disruption.

We also saw a successful start to the Easter season. As expected, adjusted gross profit was significantly impacted by record cocoa costs and consequently this also affected our EPS. We also generated $800,000,000 in free cash flow in the quarter. On Slide six, you can see that consumers enduring preference for our snacking categories remains solid, despite continuing economic and political concerns in many markets. In North America, continued frustration with day to day pricing and cost of living challenges continues to drive value seeking behavior.

As a result, growth in the biscuit category is soft, but it continues to hold up better than many other snacking categories. Despite overall declining consumer confidence, loyalty to our strong brands like Oreo, Chips Ahoy and Ritz remains solid, and our investment in price pack architecture are helping to drive continued share gains. Meanwhile in Europe, consumer confidence and price elasticities remain stable. We continue to see solid category value growth in both biscuits and chocolates, and our brands continue to resonate with consumers. Elasticity also remains stable in emerging markets.

However, consumer confidence is soft in Brazil, Mexico, and China from economic uncertainty, while confidence in India remains solid. Overall, we're seeing solid category growth in both volume and value across our combined emerging markets. And Mondelez share is improving in both biscuits and chocolate. Turning to slide seven, it is important to reinforce that we're continuing to make progress against our strategic growth agenda, reinvesting in our brands, expanding distribution, strengthening our marketing and sales capabilities, and scaling our longstanding commitment to sustainability. Here are just a few highlights of our strategy in action.

Our iconic global brands, including Oreo and Cadbury Dairy Milk, continue to drive creative on trend activations that resonate strongly with consumers and help strengthen our strategic partnerships with retailers. For example, Oreo's collaboration with Post Malone marked the first time a pop culture figure was personally involved in building a recipe for Oreo nearly from scratch, resulting in our first ever Twisted Cream. Meanwhile in The UK, we rolled out our first of many chocolate collaborations resulting from the partnership with Lotus Bakeries. The Cadbury Dairy Milk Biscoff Bar featuring the signature Biscoff Taste and Crunch is only the beginning of our innovation platform, with our other chocolate brands rolling out similar Biscoff crumbles and flavors across Europe in the coming months. Along with these creative brand reinvestments, we continue to expand distribution around the world.

We added more than 100,000 stores in emerging markets in Q1. We also are making significant progress in strengthening our partnership with retailers around the world. For the first time in our history, we achieved a top tier ranking on the global advantage survey. Additionally, we continue to make strong progress towards building a more sustainable snacking company and delivered on all our 24 sustainability targets. Earlier this month, we published our animal snacking main rights report, providing stakeholders an in-depth view of our sustainability strategy, goals and performance data.

Among other highlights, we expanded Cocoa Life, our signature sustainability program, to source 91% of cocoa volume for our chocolate business. We also made meaningful strides in combating climate change, reducing end to end carbon emissions by 12% versus our 2018 baseline. We continue to believe that helping to drive positive change at scale across the communities our business touches is an integral part of value creation. Simply put, we believe that more sustainable businesses, and always will be, is good business. I encourage you to take a few minutes to review our report in more detail.

Before I turn the microphone over to Luca, I'd like to reinforce that our chocolate strategy remains on track and performance to date is broadly in line with our expectations. Our teams started planning for the challenges created by record cocoa input cost inflation more than a year ago, and we're confident that the robust clear strategy we built to navigate these conditions is paying off. We have reconfigured our chocolate portfolio to offer consumers an array of pack sizes appropriate for each snacking occasion, from bite sized treats offering a delicious taste of me time to family sizes designed for sharing with family and friends. At the same time, we continue to maintain entry level pricing to drive consumption. We also have successfully implemented most of our planned pricing in Europe with minimal customer disruption.

As a result, elasticity is in line with expectations. We're also growing share in chocolate across markets, up 0.4 points year to date. We continue to innovate with new flavors, formats, and brand activations. Year in and year out, consumers around the world show us that our iconic chocolates are an essential part of their seasonal celebrations like Valentine's Day and Easter. We're continuing to stay a step ahead of their changing taste with exciting new products, including the delicious co branded tablets I mentioned before, featuring the unique caramelized Biscoff flavor and crunch.

In short, we remain confident that our strong chocolate franchise is positioned for long term success. Our robust playbook is working and we remain convinced that it will enable us to not only navigate the current cocoa cost challenge, but more importantly to drive category health for the long term. And with that, I'll turn it over to Luca to share additional insights on our financials.

Thank you, Dirk, and good afternoon. Q1 marked another quarter of top line growth for our business, despite some external challenges and lower consumer confidence. For Q1, we delivered solid revenue growth, while profit dollar generation was better than expected. Free cash flow continued to be strong. Revenue grew 3.1% behind strong pricing execution across our chocolate business.

Volume mix was down 3.5% due to elasticity from chocolate pricing, transitory trade destocking with plant consumption in The U. S, planned downsizing activities in chocolate to protect price points, as well as some Easter phasing. Developed markets grew 2.6%, primarily due to strong pricing execution, with a volume mix decline of 3.3% on the back of retailer destocking and some chocolate elasticity. Total revenue for Emerging Markets grew 3.9 with a volume mix decline of 3.7%. EM results were driven by strength in Brazil, China and the majority of the Middle East and Africa businesses.

We experienced some softness in India and Southeast Asia. Moving to portfolio performance on slide 11. Biscuits and Baked Snacks grew 0.3% for the quarter. Brands delivering growth included Loo, Seven Days, Prince, Club Social, Perfect Snacks and Grenade. However, we saw softer than expected results in our U.

S. Biscuits business, driven by retailer destocking, which resulted in approximately 60 basis points volume headwind to the total company and two fifty basis points for total North American volumes. Additionally, our U. S. Biscuits business experienced lower consumption, driven by ongoing consumer confidence declines, resulting in lower frequency and value seeking behavior.

Chocolate grew by 10.1% with significant growth across both developed and emerging markets. Volume mix was down 5.7% driven by elasticities that were in line with our expectation, along with RGM and product outsourcing activities across the chocolate portfolio that accounted for almost three points of decline. Brand growth was broad based across global and local brands with Cabo Redery Milk, Milka, Lacta, Cot'or, Freya, Marabu and Yu all posting strong results. Gum and Candy grew 1%, driven by gum in China and Mexico, as well as both gum and candy in Western Andean. Volume mix was challenged because of trade destocking in The U.

S. As well as some issues in Mexico. Let's review market share performance on Slide 12. We held or gained share in approximately 7% of our revenue base with strength in both chocolate and biscuits. Category growth numbers are clearly underestimated because of chocolate Easter phasing versus last year.

A more normalized number would put total category growth at around 3%. Category growth is due to accelerate as more pricing for chocolate kicks in. Turning to regional performance on Slide 13. Europe grew 8.9% in Q1. Execution and growth were excellent in the quarter and several key countries including The UK, France and Germany delivered robust growth.

Pricing execution related to cocoa inflation was strong coupled with a successful start to the Easter season and share gains. Volume declines were driven by elasticity levels consistent with our expectation and NGM activities associated with our chocolate strategy. We have successfully landed chocolate pricing for the key alliances in line with our expectation. We can now focus on driving demand and expect positive developments in Europe for the remainder of the year. OI dollars were down approximately 26% due to unprecedented levels of cocoa inflation.

North America declined 3.6% due primarily to retailer destocking in The U. S. As well as softer consumer demand, most notably within the food and mass channel. This dynamic remains consistent with the overall market and is driven primarily by less frequency from lower income households. Given we gained share, our total consumption was pretty much flat.

We are continuing to sharpen our offers, such as recently introduced Fresh Tack, which have shown good momentum along with improving store execution and increased distribution to drive improved results as we move through the year. North America O I decreased by 18 due to lower volume and cocoa inflation from our Canadian chocolate business, but also for The U. S. Biscuits. EMEA grew 1.8% for the quarter.

China delivered another strong quarter with mid single digit volume led growth driven by focused initiatives around Oreo, Chips Ahoy and Stride. India declined high single digits lapping a strong prior year as overall consumption was challenged by inflationary pressures and wage growth. We do expect to improve the trajectory of the India business beginning in Q2 through targeted activation, distribution gains and an improving macro backdrop resulting from income tax relief and recently enacted interest rate cuts. Australia, New Zealand and Japan delivered another strong quarter with mid single digit top line growth due to strong Easter execution and pricing. EMEA Hawaii Dollars declined 8.3% due to materially higher cocoa prices that were partially offset by pricing and cost discipline.

Latin America grew 3.9% with solid pricing execution and a volume mix decline of 2.5%. Brazil posted mid single digit growth with strong chocolate and biscuits that was partially offset by weaker powdered beverage results. Mexico grew low single digits with broken biscuits, chocolate and gum, while Tandy was down. The Mexican economy is showing signs of slowing, which we are continuing to monitor and factor into our plans. Latin America OI declined 12.4% due largely to increased cocoa inflation.

Turning to Page 14 and a few notes on volume mix dynamics in Q1. Although overall volume mix was down 3.5%, it is important to separate what is one time or plan versus underlying. U. S. Trade destocking and seasonal phasing around Easter account for roughly 1.3 percentage points or roughly 40% of that decline, while package downsizing accounted for another point of lower volume.

On the flip side, EU customer disruption was lower than planned and last year, bringing us closer to an underlying decline of approximately 2%. We expect The U. S. Destocking dynamic to partially continue into Q2, while Easter phasing will be favorable next quarter. Turning to Page 15.

In Q1, we saw a decline of 12% in gross profit dollar terms. Solid top line growth and cost efficiency partially offset significant cocoa inflation. Our view of cocoa inflation is as changed for the remainder of the year and is embedded into our full year outlook. Next to EPS on Slide 16. Q1 EPS declined 18% in constant currency.

Turning to Slide 17 and cash flow and capital return. We delivered $800,000,000 of free cash flow for the quarter. We repurchased 1,500,000,000 in stock at an average price of 57.91 Before moving to our outlook, let me provide few thoughts on cocoa. Although cocoa prices remain quite elevated relative to historical averages, both spot rates and future curves have declined since our Q4 call. We continue to expect a small surplus for the year.

In addition, we continue to see volume declines from an industry perspective due to elasticities associated with inflation driven pricing and downsizing activities, while non chocolate players who traditionally use cocoa as an ingredient continue to reformulate with alternative components at a fraction of the cost. We believe at these levels, meaningful demand declines are expectable and will accelerate and that eventually will reflect on cocoa prices. Having said that, we remain confident in our pricing and our GM strategy and we'll continue to stay agile as the situation demands. Turning to our outlook on Slide '20. Our outlook for 2025 remains unchanged for organic revenue, earnings per share and free cash flow.

This includes approximately 5% revenue growth, which reflects successful customer negotiation and pricing in Europe, as well as a softer demand environment in The U. S. Most of our key assumptions remain consistent with what we shared with you on our last call. We are reaffirming inflation levels, interest and tax costs, as well as share repurchases. Translation Forex impacts have changed and we are now expecting no impact to net revenue and EPS from foreign currency for the year.

This reflects the dollar weakening against several currencies since our last call, including the Euro and Sterling. However, given dollar volatility, this could rapidly change. With respect to tariffs, the vast majority of U. S. Production is sourced from The U.

S. Or is USMCA compliant. However, there is some sourcing of finished goods and ingredients that are subject to tariffs as things stand today. Although not particularly large, these are incremental to our last call and have been factored into our current earning outlook. Before Q and A, a few words on 26.

We remain focused on running a balanced P and L for '25, while continuing to maintain a sound chocolate business and category for the long term. The early results have been positive as it relates to our chocolate strategy. We continue to invest behind our business while cost saving initiatives remain on target. It is early to provide specifics on 2026, but we still expect EPS growth for next year. Although Cocoa prices have come down recently, they remain elevated.

It is also important to note that if we do see further improvement in cocoa, we will likely reinvest a portion of that saving back into the business. With that, let's open the line for questions.

Thank you. We'll go first to Andrew Lazar with Barclays.

Great, thanks so much. Appreciate it. Maybe, Dirk, just to start it off, it'd be great to get maybe a bit more detail on sort of trends in some key regions as we think about sort of the year to go from here?

Yes. Thanks, Andrew. Well, I would say that, first of all, despite the changes that we see in the external environment that we feel pretty good about the start of the year and our results. I would note a few positives which will impact the rest of the year that happened during Q1. First of all, we had some major negotiations to do in Europe to announce the price increases and get approved approval for the price increases on our chocolate business.

And they passed virtually all of them with minimal disruption this year. Then if you look at how our chocolate business is doing, particularly in Europe, We the pricing is on track, as I just said. We have some very good activations. We've implemented a number of RGM activities. Easter came through quite well.

So Easter, we will see more in the Q2 results, but and Q1 was affected because of the Easter phasing, which was late this year. But we can already see that Easter will be very good for us. And for instance, know that we had some strong share gains in The U. K. Our emerging markets continue to perform well, particularly I would mention here China and Brazil.

And in times like this where the North American market is probably the most affected market, it's good to have this geographical diversification. And on top, we're gaining share in many markets around the world. Having said all that, I think the one thing that you've seen probably from many companies is that North America was clearly softer than what we would have expected. I think many people have talked about the retail destocking. We expect that, that will be less in Q2.

The biscuit category is soft. We see consumers switching to more essentials in grocery, snacking categories are suffering as a consequence of that. But biscuits overall compared to other snacking categories is doing better and on top of gaining share in the category. So we've got a number of good puts and takes in the quarter. We feel very good about our full year outlook.

If I look a little bit at what's going on around the world, I would say the consumer sentiment is quite mixed, and that's driven by overall global macroeconomic uncertainty. Probably where we saw the biggest effect on the consumer was in The U. S, where the consumer confidence declined sharply in Q1, it declined another 11% in April. That's all driven by inflation fears. People see their income slowing.

We see that the pressurized or the prioritizing of essentials, which is pressurizing snacking. We see a shift to value club and e com channels. We're seeing more promotional pressure. And largely, lower income consumers are shifting to smaller packs, while higher income consumers are shifting to larger packs for value. In the middle of all that, the biscuits category declined 1.5% in value, but it outperformed other snack categories, as said.

Cookies is doing better than crackers. Private label grew a little bit. We gained about 0.3 points of share. I think that was driven largely the fact that we launched a number of affordable formats, which we call Fresh Stacks, which are under $3 And we I think we are seeing that offering compelling value to consumers really matters at this stage. I have to say that I really do not expect to see a significant improvement in the consumers' confidence in the near term in The U.

S. That is. In Europe, I would say consumer confidence is in general stable. They are aware of the global trade volatility and it's impacting their purchasing behavior. They're probably switching to more frugal spending and also prioritizing essentials.

We see a bit more shopping frequency going to smaller pack sizes and also a shift in channels in Europe that is more to discounters and e commerce, and we see an increase in promotions. In the middle of all that, with the price increases we're implementing, chocolate is performing in line to expectations, I. E, the elasticities that we're seeing are in line, around 0.5. There was a Easter was later this year. So if you include that in Q2, I think we see we will see a nice Q2.

And Biscuit is performing well, particularly in France for us. So we feel pretty confident about our European business. We see resilient consumers. We landed the negotiations. We had a good Easter.

Biscuits are doing well. So we expect our European business to continue to do well. And on the emerging market, I would say the consumer is softer because they are suffering from inflation. They see the trade volatility. The Chinese consumer remains quite subdued, a twenty year low, I would say, but our business is doing well.

The Indian consumer is stable. There is more optimism this year. People see income growth, jobs. And then Brazil and Mexico, clearly, in both places, the consumer is softer, outspoken in Mexico than in Brazil, of course, because of the economic uncertainty and persistent inflation. I would say our categories in emerging markets are stable.

We have gained share, but we have to remain agile in all regions of the world. I would say so far so good, but it's still a long year and we will need to stay very vigilant about shifts that we see at the level of the consumer.

Great. That's really helpful detail. Thanks so much for that. And maybe Luca, just briefly, just key puts and takes to keep in mind for the year to go, particularly around North America and pricing in Europe. Thanks so much.

Yes. Hi, Andrew. So I think as far as 2025 guidance goes, I think for us, it's a great thing that we are reaffirming our plan. We feel quite good at this point in time. But as you said, there are puts and takes.

I think Dirk already mentioned among the positives, the customer negotiation, which I would say is a pure upside versus last year because last year, we had some disruption. This year, we don't. But in general, I would also say that pricing across the board, whether it is chocolate in developed and emerging markets or biscuits in emerging markets specifically, it is absolutely on track. And our RGM agenda is clearly improving the situation on elasticity in both chocolate in biscuit. As we said, elasticities are quite good at this point in time.

And so that's an assumption that is key for us to be able to deliver on and potentially over deliver on the top line in the years to go. Importantly, the Easter season was quite strong. Dirk mentioned Europe, but I'm happy to report that we gained meaningful share in Brazil and in Australia. And so we are very happy there. Biscuits is holding up well outside of North America.

We have positive volume mix in the category. And clearly, there are some cost upside versus our original plan. And as we mentioned, the overall tariffs is causing a small and manageable impact. So those are, I would say, the positives that we see continuing into the second part of the year in Q2 as well. And among the things that didn't play out as we planned, it is clearly the consumer sentiment in The U.

S. Impacting our categories. But biscuits as a category, despite being soft, is faring better than other snacks, and we are winning share. When you put both the market dynamics and the share, actually, our consumption in Q1 is likely down. So I think that given some of the numbers we have seen published by others, I think it is, in relatively speaking terms, a good thing.

Trade destocking is a onetime impact. You saw that it is meaningful. It is 2.5, three points of volume mix in The U. S. And we assume that is nonrecoverable in the years to go.

I think particularly as we enter into Q2, you will see an acceleration of top line and volume mix. And I think that's clearly to the testament of what the teams are doing. All considered, you might not expect anything differently at this point in time, but we are retaining some flexibility within the plan. So should things worsen in The U. S, I think we have what it takes to deliver both top and bottom line.

But also bear in mind that if we have earnings upside, we will be reinvesting in the business as we are trying to enter 26% from a stronger position. We remain disciplined on capital allocation. We will continue to buy back stock in a sensible manner. As you might have seen, we were active buyers in Q1 at what I believe are very compelling prices. So very happy on that front too.

We'll go next to Ken Goldman with JPMorgan.

Hi, thank you. I just wanted to ask about your strategy to mitigate cocoa inflation. It's obviously multifaceted, right, with productivity and RGM and of course pricing. And you touched on your success in these elements during your prepared remarks, but what I really wanted to dig in a little bit on is the balance between them ahead. And I guess the question in particular is, with pricing having gone, I don't want to say better than expected, but it sure seems like it and elasticity in line, is there a possibility you can maybe be a little bit less aggressive on RGM or maybe some other actions than you were planning?

Or is really the message just, hey, our overall mitigation efforts are going quite well and it's full steam ahead in all areas? Just wanted to get a better sense of all of those.

Yes, yes. Good question, Ken. So yes, you phrased it right. So our strategy basically was, of course, first of all, a great execution of what we designed. But we designed at the core a very aggressive RGM strategy, and that doesn't necessarily all mean all downsizing.

It means that we will offer a whole range of pack sizes to the consumers. And so the consumer suddenly has many more options as it relates to price points they would like to buy our products. And then we are trying to get some very strong activation. So Easter was the first step, but there's a number of others to come during the year. Easter, I would say, was a success.

That's the second leg of our chocolate strategy. And the third leg is to come up with new products, new and unique products that draw the consumer into the category. And the launch in this first quarter was the Cadbury Biscoff product that is at the moment our number one selling SKU in The UK. More is to come in that front, so we will launch in several more markets in the coming months that Biscoff varietal. And then later in the year, we will have a number of new innovations under that Cadbury Biscoff or Milka Biscoff franchise.

The other thing we are doing as part of that strategy is protect key price points. So if there is a low unit price point in India, for instance, we are maintaining that at INR 5 and 10. We are also very carefully making sure that we don't break any thresholds in developed markets. So the big question is what's going to happen once that all hits the market. Pricing has gone well in the sense that we finished the negotiations with our clients.

And we have implemented pricing, I. E, the consumer is seeing the pricing in a number of markets, but it's very early days. We see a little bit more in Scandinavia, for instance, or in The U. K, where we went ahead earlier with the pricing, but countries like Germany or France is now hitting the market. Australia did some at the end of last year, but is doing more in May.

So it's still to be seen what the reaction is going to be. What I can say so far from a consumer perspective is that the elasticity is around 0.5, which is exactly in line with what we would have expected. But we want to continue very closely. And we don't want to start saying, okay, this worked great. We will have to see how the consumer is reacting.

The good news of all of this is that we gained share in volume and value share overall. Our tablets are up, of course, double digits, as you can imagine with some of the pricing. And Easter, as I said, is very good. So the word that I would use is so far so good, but we are not done yet. We have a long road ahead.

The macro conditions are very volatile. As I said, the European consumer is stable at the moment, but that could change. And we still have to very carefully monitor the consumer reactions, which, by the way, are very different from country to country. And we need to sort of direct our reactions depending on what we see happening. On the long term, I think we're seeing the signs that we have that we believe in the chocolate market, which is that in the end, love chocolate.

They will probably grapple a little bit with the current price increases. But over the long term, I think the high penetration of chocolates will continue. I think we will continue to see very strong brand loyalty. We have the Taste of the Nation brands in many markets. I don't think consumer will walk away from that.

And there is very, very low cross substitution happening. If you don't have your chocolate, there is not really that many other products you can go to that give you the same satisfaction and indulgence, I would say. We also, as Luca mentioned, we want to take a long term approach here. So if we have any upside, we want to reinvest in particularly in our chocolate business. We don't want to take any shortcuts for short term gains.

We are very focused on the long term health of the category as well as our business. And it's all going to depend where cocoa goes in the rest of the year and where COCO will be next year. But if it stays at the high level it currently is, we might need to implement more RGM in the second half of the year or the beginning of next year. So agility is going to be key going forward, but so far so good as I said.

We'll go next to Peter Galbo with Bank of America.

Hey, guys. Good afternoon. Luca, thanks for the clarity on tariffs. I think one of the wire services maybe picked up your commentary wrong, so I appreciate the clarifications there. Luca, maybe just to start, I wanted to ask the slides you gave, I believe it's eleven and twelve that kind of show the Easter timing shift in chocolate.

I guess if we had accounted for that, it would even imply that maybe elasticity a bit better than you even planned for, just taking into account that shift. So I just wanted to understand if that's a fair way to think about it, given you had kind of a volume push out with the pricing you put in, maybe versus first glance that the elasticity in chocolate might actually more favorable than you had planned?

I think in Q1, it has been a little bit more favorable. Having said that, pricing that is getting into effect in Europe, Brazil, India is kicking in as of April, May, June. And that is the moment, I think, the we'll be able to tell you for sure that elasticities are in line with our expectations. So Easter was priced up compared to last year, but there is more pricing coming into effect into the P and L in Q2. And so you will see an acceleration of the revenue growth in Q2.

I can tell you that Easter year on year is a meaningful driver of growth for us. As I mentioned, we were quite happy despite the price increases that Easter volume held up well in three major countries, namely or in several countries, namely Europe with The U. K, a clear standout in terms of share, but also Brazil and Australia. So, so far, so good, would say, hopefully, we get positively surprised. It's important to say that in both big countries like Brazil and India, we are protecting key price points.

And so hopefully, the elasticity will be minimal also going forward.

Got it. Okay. That's helpful. And Dirk, maybe just as a follow-up, one question we got on the North America destocking, just given that you do operate a DSD system in The U. S, it would be, I guess, less common that we would expect that to happen.

So just curious if you can give more color either whether it's by channel, was it club where you're maybe in more of a warehouse model where the destocking is happening? Just any additional thoughts on kind of what the real driver is just relative to what we would maybe see historically? Thanks very much.

Yes. Yes. I would say we see it mostly in food and mass. Even if we have DSD there, the retailers still work with some stock in the back of the store and they have an influence on how they what the level is and they manage that through their order. So we have a benefit in the execution that we do DSD, but the ordering still is quite directed by the centralized approach.

So I would say it's more pronounced in food and mass, and DSD really doesn't help us because of the reasons that I just gave you.

We'll go next to Megan Klapp with Morgan Stanley.

Hey, good afternoon. Thanks so much. First question, Luca, I think you mentioned in your prepared remarks the profit dollar generation in the quarter was a bit better than you expected. So Part A, wondered if you could expand a bit on what drove that. And Part B, a bit related.

Last time on your fourth quarter call, I think you mentioned profit would be more pressured in 1Q with sequential improvement. Just wanted to clarify, is that still the case? It does seem like there's some incremental tariff costs. And while you mentioned not large, just want to see if it changes how we should think about the cadence of the rest of the year. Thank you.

Yes. Thank you for your question. The upside came essentially through three lines, I would say. There was a little bit of better pricing, excluding The U. S, where we you saw that pricing was slightly negative.

We had to reinvest some trade deals. But in general, pricing is a little bit better than what we had planned. So not an impact, I would say, in the quarters to come, but a little bit of an upside in Q1. The second element is productivities. We are delivering on our productivity, and we are ahead of schedule.

There was a comprehensive pipeline specifically around procurement related productivities. And I think the team has done a very good job in delivering those productivities ahead of schedule. Again, not a material upside in the quarters to come, but certainly a timing upside as we have accelerated the delivery. And the third element is a little bit on the commodity side. We were able to obtain some commodities at favorable prices, and that has resulted in some margin upside.

Mondelēz International (MDLZ) Q1 2025 Earnings Call Transcript

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