Mondelez International, Inc. (MDLZ) Q4 2024 Earnings Summary

Executive Summary

Q4 2024 delivered modest top-line growth but sharp non-GAAP margin compression: revenue rose 3.1% to $9.60B while Adjusted EPS fell 20.7% YoY to $0.65 as cocoa costs flowed through before price offsets; GAAP EPS rose to $1.30 on large mark‑to‑market derivative gains .
2025 outlook: Organic Net Revenue ~5%, Adjusted EPS down ~10% (cc) vs. $3.36 base, and $3B+ FCF as management navigates “unprecedented” cocoa inflation with multi‑wave pricing, RGM, and 4% supply chain productivity targets .
Segment picture: Europe and AMEA drove Q4 revenue growth; North America was flat; Adjusted OI margins compressed across regions on cocoa phasing; Europe Q4 OI dollars fell >40% per management .
Balance sheet and cash: FY24 FCF $3.52B; net debt $16.40B at year‑end; Board approved a new $9B repurchase authorization effective 1/1/25 and maintained $0.47 quarterly dividend (Dec-24) .
Stock narrative catalyst: the explicit ~10% EPS decline guide for 2025 and cocoa commentary (elasticity ~0.4–0.5x, potential additional pricing waves) set expectations for a back‑half improvement cadence and 2026 EPS growth resumption if cocoa stabilizes .

What Went Well and What Went Wrong

What Went Well
- Europe and AMEA delivered solid Q4 reported sales growth (+5.8% and +9.9%); company Organic growth +5.2% with pricing +5.1 pp, indicating resilient demand for core brands .
- GAAP margins benefited from sizable favorable mark‑to‑market on currency/commodity derivatives; GAAP gross margin expanded to 38.6% and GAAP OI margin to 16.8% in Q4 .
- Management prioritized long‑term brand health and laid out a clear 2025 plan: multi‑wave pricing, RGM, cost actions, and supply‑chain productivity (~4%) to navigate high cocoa; “we remain focused on executing…chocolate business playbook to navigate unprecedented cocoa cost inflation” (CEO) .
What Went Wrong
- Adjusted profitability deteriorated sharply in Q4 as cocoa costs flowed through ahead of price realization: Adjusted GP margin fell to 31.5% (−650 bps YoY), Adjusted OI margin to 10.0% (−510 bps YoY), and Adjusted EPS declined 20.7% YoY to $0.65 .
- Regionally, Adjusted OI margins compressed across all segments in Q4 (e.g., Europe −8.7 pp, AMEA −5.0 pp, NA −2.2 pp), reflecting cocoa phasing and higher trade spend ramp in NA .
- Currency translation was a material headwind: in Q4, −$242M to Organic Net Revenue (−2.6 pp) and −$0.04 to Adjusted EPS; FY24 EPS FX headwind −$0.12, partly offset by Argentina “extreme pricing” adjustment methodology .

Financial Results

Performance vs prior year and prior quarter (reported and non‑GAAP)

Metric	Q4 2023	Q3 2024	Q4 2024
Revenue ($B)	$9.31	$9.20	$9.60
GAAP Diluted EPS ($)	$0.70	$0.63	$1.30
Adjusted EPS ($)	$0.82	$0.99	$0.65
Gross Margin (GAAP)	37.3%	32.6%	38.6%
Adjusted Gross Margin	38.0%	40.5%	31.5%
Operating Margin (GAAP)	12.8%	12.5%	16.8%
Adjusted Operating Margin	15.1%	18.9%	10.0%
S&P Global Consensus	N/A – unavailable	N/A – unavailable	N/A – unavailable

Note: S&P Global consensus estimates were unavailable at the time of request, so we cannot quantify beat/miss vs estimates.

Segment revenue and growth – Q4 2024

Region	Revenue ($M)	Reported % YoY	Organic Growth %	Vol/Mix (pp)	Pricing (pp)
Latin America	$1,171	(7.2)%	4.9%	(1.5)	6.4
AMEA	$1,908	9.9%	8.6%	3.8	4.8
Europe	$3,744	5.8%	7.4%	(2.0)	9.4
North America	$2,781	0.1%	0.4%	1.3	(0.9)
Mondelez	$9,604	3.1%	5.2%	0.1	5.1

Selected KPIs and other items

KPI	Q4 2024	FY 2024
Organic Net Revenue growth	5.2%	4.3%
FX impact to Organic NR	−$242M (−2.6 pp)	−$710M (−2.0 pp)
FX impact to Adjusted EPS	−$0.04	−$0.12
Free Cash Flow ($M)	—	$3,523
Net Debt ($M)	—	$16,398 (12/31/24)

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Organic Net Revenue growth	FY 2025	—	≈5%	New
Adjusted EPS (cc)	FY 2025	—	≈−10% vs $3.36 base	New
Free Cash Flow	FY 2025	—	$3B+	New
Currency translation	FY 2025	—	≈−2.5% on revenue; ≈−$0.12 on Adj EPS	New
Inflation	FY 2025	—	Double‑digit, driven by cocoa & some labor	New
Interest expense	FY 2025	—	≈$350M	New
Adjusted effective tax rate	FY 2025	—	Mid‑20s; cash tax ≈2 pts lower	New
Share repurchases	FY 2025	—	≥$3B (flex higher)	New
Tariffs	FY 2025	—	Potential 25% US tariffs on MX/CA imports not in outlook	Disclosure

Capital allocation updates:

New $9B repurchase authorization (effective Jan 1, 2025–Dec 31, 2027) and regular $0.47 quarterly dividend declaration (Dec 2024) .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 & Q3 2024)	Q4 2024	Trend
Cocoa inflation & strategy	Q3: Tough to see 2025 EPS growth unless cocoa eases; multi‑wave pricing & RGM planned; hedging flexibility; chocolate margins to improve sequentially vs Q4’24 .	2025 guide: Adj EPS ≈−10% (cc); elasticity planning 0.4–0.5x; multiple pricing waves (2–3); 2026 EPS growth expected in both high and elevated cocoa scenarios .	Intensified caution; more explicit 2025 EPS decline and cadence.
Europe trajectory	Q3: Revenue +8.1%; profit supported by pricing; noted cocoa phasing; H1 disruption passed .	Q4: Good demand but sharp Q4 OI dollar decline (>40%) on cocoa ramp without offsets; pricing expected to catch up in 2025 .	Demand resilient; profitability pressured near‑term, recovery expected.
North America biscuits/RGM	Q3: Price‑pack architecture to $2.99–$3.99; volume starting to rebound; share gains in Oreo/Ritz .	Q4: Volume/mix +1.3 pp; OI down on higher trade spend and ramp costs; 2025: expect volume growth with lower price points and channel expansion .	Execution continuing; near‑term margin pressure, volume‑led plan.
Supply chain productivity	Q3: Cost actions and productivity highlighted; ERP program funded ($1.2B) .	Targeting ~4% gross productivity in 2025—the highest in recent years .	Stepped‑up savings to offset input inflation.
Technology/AI & ERP	Q2: Announced multi‑year ERP program .	Strategic AWS partnership to migrate ERP (SAP RISE) and enable AI capabilities .	Accelerating digital/ERP transformation.
Macro/FX & tariffs	Q3: FX a headwind; boycotts noted in certain EMs .	FX headwinds quantified for 2025; potential new 25% US tariffs on MX/CA imports not embedded in outlook .	Continued external headwinds, monitored in guidance.

Management Commentary

“Fiscal 2024 was another strong year… As we transition into 2025, we remain focused on executing against our long‑term growth strategy and delivering on our chocolate business playbook to navigate unprecedented cocoa cost inflation.” – CEO Dirk Van de Put .
“We expect an adjusted EPS decline this year, given the unprecedented levels of cocoa cost in our chocolate P&L… approximately 10% versus the base of $3.36 in 2024… We do expect EPS growth in 2026.” – CFO Luca Zaramella .
“Elasticities… current planning assumption for 2025 is… 0.4, 0.5x… we will have to take multiple price waves… 2 or 3 price increases… pricing waves that we'll take in the second part of the year depending on our view on 2026 cocoa levels.” – CFO .
“Typical targets… about a 4% gross productivity on our supply chain… we are planning to reach that in ’25.” – CEO .

Q&A Highlights

Cocoa outlook and pricing cadence: Management assumes elevated cocoa throughout 2025 with multiple pricing waves (2–3), and plans to remain agile based on crop/market signals; hedging structures are in place to protect upside while participating if prices fall .
Elasticity framework: Planning with ~0.4–0.5x elasticities (higher than 2024) but noted benign responses in initial pricing in Europe; protecting entry price points in EM and lower unit prices in DM to preserve penetration .
Europe profitability: Sharp Q4 OI decline due to cocoa pipeline costs without offsetting 2025 pricing/cost actions; expectation is sequential improvement through 2025 as price realization builds .
North America biscuits: Category is soft but MDLZ is seeing share gains; 2025 plan emphasizes lower price points, fresh/price‑pack architecture, and channel expansion; near‑term OI pressure from higher trade and ramp costs .
2026 setup: Management committed to EPS growth in 2026 under both high and moderating cocoa scenarios—either via further pricing or benefit from cocoa retrenchment .

Estimates Context

S&P Global consensus estimates for Q4 2024 (EPS, revenue, EBITDA) were unavailable at the time of request, so we cannot quantify beat/miss relative to Wall Street expectations. MDLZ reported Q4 revenue of $9.60B, GAAP EPS of $1.30, and Adjusted EPS of $0.65 as disclosed in company filings .

Key Takeaways for Investors

2025 will be an earnings reset year driven by cocoa: MDLZ guided Adjusted EPS down ~10% (cc) as cocoa phasing remains a headwind; multi‑wave pricing, RGM, and ~4% productivity are the levers to protect category health and seed 2026 recovery .
Expect a back‑half improvement cadence in 2025: Q1 most pressured while price realization builds through Q2–Q4; management expects sequential profit improvement as pricing and cost actions take hold .
Demand resilience intact: Q4 Organic growth +5.2% with pricing +5.1 pp, and positive volume/mix in several regions; AMEA and Europe led growth; North America holds volume via lower price points and new packs .
FX and policy risks remain: 2025 outlook embeds FX drags (≈−2.5% revenue, ≈−$0.12 EPS); potential US tariffs on Mexico/Canada imports are excluded and represent an incremental risk .
Capital return remains a support: $3B+ planned buybacks in 2025 within a new $9B authorization through 2027; dividend intact ($0.47/q declared in Dec‑24) .
Watch Europe and elasticity: Europe’s Q4 OI compression highlights near‑term vulnerability; monitor pricing acceptance (elasticity ~0.4–0.5x plan) and potential additional waves in 2H25 .
Medium‑term thesis: If cocoa stabilizes or retrenches, MDLZ is positioned for EPS reacceleration in 2026 given pricing carryover, cost programs, and volume resilience in biscuits and chocolate .

Appendix: Additional Details

Adjusted vs GAAP mechanics in Q4

Q4 GAAP results were lifted by large favorable mark‑to‑market gains on derivatives (+$700M in gross/operating lines), while Adjusted metrics strip these effects, revealing underlying cocoa pressure: Adjusted GP margin 31.5% (−650 bps) and Adjusted OI margin 10.0% (−510 bps) .

Currency/Argentina methodology

Reported Organic NR growth adjusts for “extreme pricing” in Argentina (>26% YoY pricing excluded) and for translation; Q4 net FX impact to Organic NR was −$242M (−2.6 pp) and to Adjusted EPS −$0.04 .

Technology & ERP

MDLZ designated AWS as strategic cloud provider, migrating ERP to SAP RISE on AWS to enhance reliability and enable AI capabilities (Dec‑2024 press release) .