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    MDLZ
    Earnings call· Jun 2025(Q2 FY25)

    Mondelez International Q2 FY25 earnings call MDLZ

    Jul 29, 2025 Source

    Executive summary

    Mondelez Q2 FY25 — Strong Global Performance Offsets North America Weakness, Cocoa Outlook Improves

    Mondelez delivered a strong Q2 FY25, driven by robust performance in emerging markets and Europe, which helped offset continued softness in North America. The company's chocolate pricing strategies are yielding expected results, and the cocoa market shows signs of improvement for 2026. Management is implementing targeted pricing and productivity measures in North America, while maintaining its full-year outlook despite ongoing consumer anxiety and retailer adjustments.

    Highlights

    5

    • Q2 results were 'quite good' with good pricing and bottom line slightly better than expected.

    • Strong quarter in the rest of the world, with double-digit growth in emerging markets like Brazil, India, and Mexico.

    • Chocolate pricing and RGM actions playing out in line with expectations.

    • Biscuits business, excluding North America, is up a little bit more than 7% year-to-date.

    • Cocoa butter prices have come down dramatically versus last year, offering a material benefit.

    Concerns

    4

    • Continued weakness in North America, with biscuit category volume declining and projected to be down 3% in H2 FY25.

    • Unprecedented heat wave in Europe impacted chocolate volumes in June and July.

    • Consumer anxiety and focus on essential items in the U.S. due to uncertain outlook on personal finances, job expectations, and inflation.

    • Retailer destocking in North America impacted Q2, though expected to be resolved by Q3.

    Guidance & targets

    9
    CategoryTargetConfidence
    Full-year outlook
    maintained
    high materiality
    High
    North America biscuit category volume
    down 3%
    medium materiality
    High
    North America profitability
    rebound
    medium materiality
    Medium
    North America revenue
    go up
    medium materiality
    Medium
    North America bottom line
    go up
    medium materiality
    Medium
    Chocolate business gross profit dollars
    a number that I like
    medium materiality
    Medium
    North America brand investment
    increase
    medium materiality
    Medium
    Media investment
    increase
    medium materiality
    Medium
    Virtual cycle (volume growth, share growth, GP dollars, cash)
    reestablish
    medium materiality
    Medium

    Segment performance

    4
    SegmentRevenueYoYQoQMargin
    Europe
    Good quarter with strong share gains. Business is very resilient, and snacking continues to outpace food despite consumer frugality. Volumes were lower than expected in June and July due to a heatwave, but are recovering.
    Share gains: strong
    		————
    North America
    Difficult situation with consumer anxiety and focus on essential items. Soft biscuits category, performing better than other snacking categories but with declining volume. Retailer destocking impacted Q2, but Q3 is expected to be clean.
    Biscuits category volume: decliningShare: holding
    		————
    Emerging Markets
    Strong quarter with double-digit growth and sustained volume and value growth. Very good share gains in key markets. Consumer confidence is softer, leading to channel shifts into bulk and discount, and pack shifts.
    Volume and value growth: sustainedShare gains: very good in Brazil, India, Mexico
    		—double-digit——
    Biscuits (ex-North America)
    Year-to-date revenue growth for the biscuits business outside of North America.
    		—up a little bit more than 7%——

    Operational metrics

    11
    Cocoa grinding numbers
    down 7%, 8%YoY
    Q2 FY25

    Reflects a pressure point in terms of demand for cocoa.

    Cocoa price
    below GBP 5,000
    recent weeks

    Reached a low level a couple of weeks ago, which the company took advantage of.

    Cocoa butter price ratio
    halfvs. last year's 3-4
    current

    The ratio of cocoa butter price to overall cocoa prices has come down dramatically, offering a material benefit.

    GLP-1 penetration
    4%
    current

    The penetration of GLP-1 drugs in the adult population.

    GLP-1 calorie reduction
    11%
    current

    The reduction in calorie intake for individuals on GLP-1 drugs.

    GLP-1 usage duration
    9 months
    average

    Average duration consumers stay on GLP-1 drugs.

    GLP-1 effect on total calorie intake
    0.4%
    current

    The estimated overall effect of GLP-1 drugs on total calorie intake for the population.

    Share repurchase authorization
    $9 billion
    next 3 years

    Total share repurchase approval over the next three years.

    Share buyback average price
    below $60
    recent

    The average price at which the company has been buying back shares, considered compelling.

    Working media investment
    haven't increased much
    this year

    The company has protected working media but has not significantly increased it this year, unlike other years.

    Chocolate price increase
    30% to 50%
    last 2 years

    Cumulative price increase in the chocolate category over the last two years.

    Industry KPIs

    4
    MetricValueDetails
    Organic net revenue growthdouble-digit%
    Volume mix vs pricing decompositionflattish
    Elasticity consumer response commentaryvigilant
    Category growth benchmark channel shift datadown 3%%

    Risks & headwinds

    5
    North America consumer anxiety and weaknessH2 FY25 and FY26

    biscuit category volume declining; projected down 3% in H2 FY25

    Mitigation: Incremental, surgical pricing; boosting productivity; expanding into alternate channels (club, dollar, value).

    European heatwave impact on chocolate volumesQ2 FY25

    volumes lower than expected in June and July

    Mitigation: Weather becoming more collaborative; chocolate consumption coming up; vigilance on elasticity for H2.

    Retailer destocking in North AmericaQ2 FY25, expected clean in Q3 FY25

    impacted Q2

    Mitigation: Shifting pressure to alternate channels (value, e-commerce, discounters); Q3 expected to be clean.

    Cocoa price volatility and low industry stockongoing, particularly for 2026

    industry stock still low

    Mitigation: Took advantage of recent price drops; monitoring new crop data for 2026 hedging strategy; potential for material upside if supply outpaces demand.

    Potential future GLP-1 impact on snackingFY26 and beyond

    estimated 0.4% effect on total calorie intake for population

    Mitigation: In-depth analysis shows no real impact on current volumes; weakness driven by economic factors; no major increase in penetration expected.

    What to watch in Q3 FY25

    5

    Chocolate elasticity in Europe

    H2 FY25
    Currentvolumes lower than expected in June and July
    Targetvolume recovery and elasticity trends

    Why it matters

    To understand the true impact of pricing and RGM actions versus temporary weather effects on a key category.

    We are quite vigilant on chocolate elasticity for the second half of the year.

    Q&A highlights

    6

    Can you walk through key geographies for H2 and what actions are being taken in North America to accelerate growth given category weakness?

    Dirk highlighted global balance with strong international performance offsetting North America weakness, maintaining full-year outlook. Luca detailed incremental pricing, productivity boosts, and focus on alternate channels in North America, not expecting a category rebound.

    “We have not planned for a material rebound of the category in the rest of the year. So I want to reassure you that in the guidance we have given, we have reaffirmed there is no material improvement of the U.S. general sentiment.”

    asked by Andrew Lazar · answered by Luca Zaramella

    2 min read6 chapters

    Detailed Narrative

    01

    Global Performance Overview

    Mondelez reported 'quite good' Q2 results, characterized by effective pricing and better-than-expected bottom-line performance. The company highlighted a strong global balance, with robust performance in international markets offsetting continued weakness in North America. Chocolate pricing and revenue growth management (RGM) actions are progressing as anticipated, and the company is maintaining its full-year outlook.

    02

    Regional Dynamics

    Europe demonstrated resilience with strong share gains, despite a heatwave in June and July that temporarily impacted chocolate volumes. North America faced a more challenging environment due to consumer anxiety, inflation concerns, and a soft biscuit category with declining volumes. Emerging markets, including Brazil, India, and Mexico, were a significant growth engine, delivering double-digit growth and strong share gains, despite some consumer confidence softness.

    03

    North America Strategy and Outlook

    In North America, management does not anticipate a material category rebound for the remainder of the year, projecting biscuit category volumes to be down 3% in H2 FY25. To address this, the company is implementing incremental, surgical pricing actions, focusing on boosting productivity in H2, and expanding into alternate channels like club, dollar, and value stores where share gains are notable. Profitability and revenue are expected to improve in Q4 and H2, respectively.

    04

    Cocoa Market and Hedging

    Cocoa market fundamentals are improving, with grinding numbers down 7-8% and pod counts in West Africa being promising. Cocoa butter prices have dramatically decreased compared to last year, offering a material benefit. While industry stock levels remain low, the overall sentiment suggests cocoa prices will eventually come down. The company took advantage of recent price drops and is contemplating hedging strategies for 2026, with potential for material upside if supply outpaces demand.

    05

    GLP-1 Impact Assessment

    Mondelez conducted an in-depth analysis and found no real impact from GLP-1 drugs on its current volumes. The observed negative volume trends and shifts in consumer buying behavior are primarily attributed to economic factors. With GLP-1 penetration at about 4% of the adult population, an 11% calorie reduction, and an average 9-month usage duration, the overall effect on total calorie intake is estimated at a negligible 0.4%, and no significant increase in penetration is expected in 2026 or over the next decade.

    06

    Retailer Destocking

    Retailer destocking in North America, which impacted Q2, was attributed to retailers managing cash flow, a general slowdown in consumption, and anticipation of tariffs. Retailers increased imports of certain items and offset this by reducing inventory in others. The company expects Q3 to be 'clean' regarding retailer inventory, and is shifting focus to alternate channels to mitigate the impact of destocking.

    AI-generated summary of the company’s earnings call. Not investment advice.