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Mondelez International, Inc. (MDLZ) Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 organic net revenue grew 3.1% (+6.6 pp pricing, −3.5 pp volume/mix); reported revenue was $9.31B (+0.2% YoY). Adjusted EPS was $0.74 while diluted GAAP EPS fell to $0.31 as mark‑to‑market derivative losses compressed GAAP margins .
  • Versus estimates, adjusted EPS beat consensus ($0.74 vs $0.66*) while revenue was slightly below ($9.31B vs $9.34B*). Free cash flow was $0.82B and cash from operations $1.09B; capital returned was $2.1B .
  • Guidance reaffirmed: FY2025 organic net revenue ~5%, adjusted EPS ~−10% (constant FX), free cash flow $3+ billion. FX impact improved vs prior quarter: now “no impact” to 2025 revenue/EPS vs Q4 guidance for a −2.5% revenue headwind and −$0.12 EPS impact .
  • Management highlighted successful pricing execution in Europe with minimal disruption and Easter strength; U.S. biscuits saw retailer destocking and softer consumption, with elasticity broadly in line with expectations around ~0.4–0.5x .

Note: Values marked with * retrieved from S&P Global.

What Went Well and What Went Wrong

What Went Well

  • Strong pricing execution to offset cocoa inflation; elasticities were “in line” (~0.5x) and chocolate pricing landed across key markets in Europe with minimal disruption .
    Quote: “We have successfully implemented most of our planned pricing in Europe with minimal customer disruption... elasticity is in line with expectations.” — Dirk Van de Put .
  • Seasonal and share performance: “successful start to the Easter season” and share gains in chocolate; U.K. and Brazil stood out on Easter .
  • Robust cash generation and capital return: free cash flow $815M and $2.1B returned to shareholders in Q1 .
    Quote: “We delivered $800 million in free cash flow... We repurchased $1.5 billion in stock.” — Luca Zaramella .

What Went Wrong

  • GAAP margin compression from mark‑to‑market on commodity/currency derivatives: gross margin fell 2,500 bps to 26.1% and GAAP operating margin to 7.3%; diluted EPS down 70.2% YoY to $0.31 .
  • Volume/mix decline of −3.5 pp, driven by U.S. trade destocking, Easter phasing, and planned downsizing; North America revenues −4.1% YoY and organic −3.6% .
  • Elevated cocoa costs pressured adjusted margins and OI despite pricing; adjusted gross margin was 33.4% (−580 bps YoY) and adjusted operating margin 14.8% (−370 bps YoY) .

Financial Results

Revenue, EPS, and Estimates Comparison

MetricQ1 2024Q4 2024Q1 2025
Reported Revenue ($USD Billions)$9.29 $9.60 $9.31
Diluted EPS (GAAP) ($)$1.04 $1.30 $0.31
Adjusted EPS ($)$0.93 $0.65 $0.74
Revenue Consensus Mean ($USD Billions)*$9.16$9.66$9.34
Primary EPS Consensus Mean ($)*$0.888$0.654$0.659

Note: Values marked with * retrieved from S&P Global.

Margins (GAAP and Adjusted)

MetricQ1 2024Q4 2024Q1 2025
Gross Margin (GAAP, %)51.1% 38.6% 26.1%
Gross Margin (Adjusted, %)39.2% 31.5% 33.4%
Operating Margin (GAAP, %)29.4% 16.8% 7.3%
Operating Margin (Adjusted, %)18.5% 10.0% 14.8%

Growth and Mix (Organic Net Revenue)

MetricQ4 2024Q1 2025
Organic Net Revenue Growth (%)5.2% 3.1%
Volume/Mix (pp)+0.1 pp −3.5 pp
Pricing (pp)+5.1 pp +6.6 pp

Segment Breakdown (Q1 2025)

SegmentReported Revenue ($MM)Organic Growth (%)Vol/Mix (pp)Pricing (pp)
Latin America$1,203 3.9% −2.5 +6.4
Asia, Middle East & Africa$2,016 1.8% −3.0 +4.8
Europe$3,550 8.9% −4.5 +13.4
North America$2,544 −3.6% −3.1 −0.5
Emerging Markets$3,723 3.9% −3.7 +7.6
Developed Markets$5,590 2.6% −3.3 +5.9

KPIs

KPIQ1 2024Q1 2025
Cash from Operations ($USD Billions)$1.32 $1.09
Free Cash Flow ($USD Billions)$1.03 $0.82
Capital Returned ($USD Billions)—$2.10
Net Debt ($USD Billions)$16.40 (Dec 31, 2024) $17.98 (Mar 31, 2025)
Cash & Equivalents ($USD Billions)$1.35 (Dec 31, 2024) $1.56 (Mar 31, 2025)

Guidance Changes

MetricPeriodPrevious Guidance (as of Q4 2024)Current Guidance (Q1 2025)Change
Organic Net Revenue GrowthFY 2025~5% ~5% Maintained
Adjusted EPS (constant FX)FY 2025~−10% ~−10% Maintained
Free Cash FlowFY 2025$3+ billion $3+ billion Maintained
FX impact on revenue/EPSFY 2025Revenue −2.5% and EPS −$0.12 “No impact” to revenue/EPS currently estimated Raised (improved FX)
TariffsFY 2025Not reflected; uncertain and evolving Outlook does not reflect potential changes to USMCA-compliant trade ; mgmt notes small incremental tariffs now factored Clarified; small incremental cost noted

Earnings Call Themes & Trends

TopicQ3 2024 (Prior-2)Q4 2024 (Prior-1)Q1 2025 (Current)Trend
Cocoa inflation & mitigationMark‑to‑market headwinds; adjusted margins up; ERP costs noted Cocoa pipeline pressure in Q4; plan for multiple pricing waves, RGM, productivity Prices implemented in Europe; elasticities ~0.4–0.5; continued agility; confidence in strategy Stabilizing execution; elasticity manageable
Pricing execution (Europe)Solid growth; limited disruption Pricing led growth; H2 customer disruption earlier in year Pricing landed with minimal disruption; Easter strength Improving
U.S. biscuits & destockingN/A in Q3 call detailFresh packs launched; share improved; OI down on trade spend and legal settlement Retail destocking impacted volumes; category soft; value-seeking behavior Soft near-term; recovery targeted
Tariffs/macroGeopolitical/macro risks flagged Tariff uncertainty; not in outlook Small, manageable tariff impact factored; FX now neutral Neutral FX; minor tariff headwind
Supply chain productivityProductivity aiding gross profit and OI “Highest supply chain productivity program” targeted (~4% gross productivity) Lower manufacturing costs and overhead helped adjusted margins Executing productivity
Portfolio & M&A (Evirth)Agreed to acquire majority of Evirth Closed Evirth; incremental revenue/OI in Q4 Evirth contribution cited; strategy reaffirmed at CAGNY Integration progressing
Sustainability (Cocoa Life, emissions)N/AProgress highlighted; recyclable packaging Cocoa Life sourcing 91%; −12% end-to-end emissions vs baseline Advancing targets

Management Commentary

  • “We delivered solid Q1 2025 results in line with our expectations… while navigating unprecedented cocoa cost inflation.” — Dirk Van de Put .
  • “Our outlook for '25 remains unchanged… approximately 5% revenue growth… no impact to net revenue and EPS from foreign currency for the year.” — Luca Zaramella .
  • “We have successfully implemented most of our planned pricing in Europe with minimal customer disruption… elasticity is in line with expectations.” — Dirk Van de Put .
  • “U.S. trade destocking… accounted for roughly 1.3 percentage points… package downsizing accounted for another point.” — Luca Zaramella .
  • “We delivered $800 million of free cash flow… and were active buyers in Q1 at compelling prices.” — Luca Zaramella .

Q&A Highlights

  • Pricing/RGM balance: Management will continue robust RGM and protect key price points; elasticity tracking ~0.5x; Europe pricing largely landed .
  • U.S. biscuits: Soft category with destocking in food/mass channels; fresh packs and activations aimed at improving trajectory; share gains achieved .
  • Cocoa outlook: Elevated but expected to normalize over time; 2025 substantially hedged; multiple pricing waves planned; 2026 EPS growth expected regardless of cocoa path .
  • Tariffs/FX: Small, manageable tariff impacts factored; FX now expected to be neutral to revenue/EPS .
  • Productivity: Targeting ~4% gross productivity, unprecedented program for 2025 .

Estimates Context

  • Q1 2025: Adjusted EPS $0.74 vs consensus $0.659* (beat), revenue $9.31B vs consensus $9.34B* (slight miss). Number of estimates: EPS 19, revenue 15*.
  • Trajectory: Q4 2024 EPS $0.65 vs $0.654* (in-line); Q1 2024 EPS $0.93 vs $0.888* (beat).
  • Implications: Street models likely to revise mix assumptions (pricing vs volume) and adjusted margin cadence upward for Europe, while trimming U.S. biscuits volume in Q2 given destocking commentary .

Note: Values marked with * retrieved from S&P Global.

Q1 2025 Actual vs Consensus

MetricActualConsensus*Beat/Miss
Adjusted EPS ($)0.74 0.659Beat
Revenue ($USD Billions)9.31 9.34Miss (slight)

Note: Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

  • Pricing execution is working, especially in Europe, with elasticities manageable and minimal customer disruption; expect margin improvement sequentially as pricing flows through .
  • Near-term U.S. biscuits softness/destocking weighs on volumes; watch Q2 for partial destocking continuation and better Easter phasing, with fresh packs and promotions as catalysts .
  • Cocoa remains the central variable; 2025 largely hedged with multiple pricing waves planned. Management targets EPS growth in 2026 under both high and lower cocoa scenarios .
  • FX setup improved versus Q4 outlook (now neutral), reducing a prior headwind to revenue/EPS; minor tariff costs are incorporated and viewed as manageable .
  • Cash generation and capital returns remain robust ($815M FCF; $2.1B returned); balance sheet capacity intact despite net debt rising to $18.0B with higher short-term borrowings .
  • Watch for continued RGM, productivity and overhead discipline to support adjusted margins; adjusted gross and operating margins should improve vs Q4 as pricing lands .
  • Portfolio strategy (Evirth, cakes/pastries adjacency) supports medium-term growth optionality alongside core chocolate/biscuits franchises .

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