Mondelēz International CEO: North America Saw 'Significant Increase In Consumer Demand For Our Snacks' In Last Month Of Q1

Mondelēz International Reports Q1 2020 Results

-- CHICAGO, Ill., April 28, 2020 (GLOBE NEWSWIRE) -- Mondelēz International, Inc. (NASDAQ: MDLZ) today reported its first quarter 2020 results.         

"We had a strong first quarter, with record market share gains, and executed very well in challenging circumstances, thanks to the dedication and commitment of our colleagues, especially those on the front line, who are working tirelessly to provide food to consumers around the world," said Dirk Van de Put, Chairman and Chief Executive Officer. "In the last month of the quarter, we saw a significant increase in consumer demand for our snacks in developed markets, particularly in North America, which more than offset a more challenging environment in several emerging markets.     

"Our priority at this time is to protect our colleagues and maintain business continuity in service of our customers and consumers around the world. We remain confident that with our dedicated people, our portfolio of trusted global and taste-of-the-nation local brands, our strong balance sheet, access to significant liquidity and our clear strategic priorities, we have everything we need to manage through this pandemic and emerge stronger on the other side."

Our priorities are clear in a volatile, COVID-19 environment

During this global crisis, our priorities are clear and informed by our values. Our first priority is to protect and support the safety and well-being of our employees. We have introduced strict health and safety protocols across our facilities and are providing enhanced benefits for front-line employees. We are supporting community partners advancing critical food stability and emergency relief efforts across the world with both cash donations and products. We have donated $20 million to date.

After colleagues and communities, our next priority is supply chain continuity, so we are focusing on the most important products for retailers and consumers to maintain good service levels. Through this uncertain time, we are exercising cost discipline and protecting cash by reducing non-critical spending. We have expanded our credit facilities and suspended our share repurchase program at this time.

We are intent on emerging from this crisis even stronger than before. We are accelerating a number of strategic initiatives and continuing to invest in our brands and capabilities to remain the preferred choice of our customers and consumers.

First Quarter Commentary

• Net revenues increased 2.6 percent driven by Organic Net Revenue growth of 6.4% offset by unfavorable currency impacts. As a result of COVID-19, growth rates accelerated in developed markets and slowed in emerging markets versus Q4 2019. Volume/mix was the largest driver of growth, while pricing contributed to growth at approximately the same level as the prior quarter. 
• Gross profit decreased $142 million and margin declined 320 basis points to 36.5 percent, due to mark-to-market losses from derivatives. Adjusted Gross Profit¹ increased $151 million at constant currency while Adjusted Growth Profit margin decreased 20 basis points to 39.6 percent primarily due to higher raw material costs in part due to unfavorable currency movements, and disruption caused by COVID-19. 
• Operating income decreased $180 million and margin was 12.8 percent, down 300 basis points primarily due to mark-to-market losses from currency and commodities derivatives. Adjusted Operating Income¹ increased $62 million at constant currency, and margin decreased 30 basis points to 16.5 percent driven primarily by the decline in Adjusted Gross Profit margin and higher marketing expenses, partially offset by pricing and overhead costs leverage. 
• Diluted EPS was $0.52, down 17.5%, primarily due to mark-to-market losses from derivatives and losses related to interest rate swaps. 
• Adjusted EPS was $0.69, up 10.8% versus prior year on a constant-currency basis driven by operating gains as well as higher JV income, share repurchases, lower taxes and higher benefit plan non-service income. 
• Capital Return: The company returned approximately $1.1 billion to shareholders in common stock repurchases and cash dividends. The company suspended its share repurchase program in March, providing flexibility and prioritizing cash and liquidity while managing the COVID-19 situation and response.

2020 Outlook

Due to the COVID-19 pandemic, visibility is limited at this time in a number of markets, so the company is temporarily withdrawing its full-year outlook. The company strategy and long-term algorithm remain unchanged.

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