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Mondelez International Inc Class A MDLZ

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Mondelez Bakes up Another Quarter of Solid Sales and Profit Gains; Shares Not Worth Snacking On

Erin Lash, CFA Sector Director

Analyst Note

| Erin Lash, CFA |

Rising COVID-19 case counts globally and inflationary headwinds have yet to deter Mondelez. As evidence, the firm chalked up more than 6% organic sales growth (3.4% on a two-year basis) and 30 basis points of adjusted operating margin expansion to 16.2% in its second fiscal quarter (reflecting volume leverage, stringent cost management, and higher prices). And even in the face of stepped-up raw material costs (qualitatively referenced), the firm continued to funnel resources behind its brands (with working media up double-digits over the year ago), and we think this spend to tout its value-added innovation is yielding improvement across its mix. Chocolate (more than 30% of sales) and biscuits (nearly half of sales) were again bright spots, posting nearly 13% and 3% underlying growth, respectively (or around 6% for each on a two-year stack basis). And although gum and candy eked out impressive marks (up 28% in the latest three-month period), our enthusiasm is tempered by the 33% downdraft in the year-ago period, plagued by languishing category dynamics in developed markets.

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Company Profile

Business Description

Mondelez has operated as an independent organization since its split from the former Kraft Foods North American grocery business in October 2012. The firm is a leading player in the global snack arena with a presence in the biscuit (48% of sales), chocolate (31%), gum/candy (10%), beverage (4%), and cheese and grocery (7%) aisles. Mondelez's portfolio includes well-known brands like Oreo, Chips Ahoy, Halls, Trident, and Cadbury, among others. The firm derives around one third of revenue from developing markets, nearly 40% from Europe, and the remainder from North America.

Contact
905 West Fulton Market, Suite 200
Chicago, IL, 60607
T +1 847 943-4000
Sector Consumer Defensive
Industry Confectioners
Most Recent Earnings Jun 30, 2021
Fiscal Year End Dec 31, 2021
Stock Type Slow Growth
Employees 79,000

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