The owner of Cadbury and Oreo, Mondelēz International, Inc. reported its first-quarter 2021 results.
Key financial metrics
- Net revenues increased 7.9 percent driven by Organic Net Revenue growth of 3.8 percent, favourable currency, and incremental sales from the company’s acquisitions of Give & Go and Hu. Volume and pricing drove Organic Net Revenue growth, partially offset by unfavorable mix.
- Gross profit increased $515 million, while gross profit margin increased 450 basis points to 41.0 percent, primarily driven by favourable year-over-year change in mark-to-market gains/losses from currency and commodity derivatives.
- Adjusted Gross Profit increased $134 million at constant currency, while Adjusted Gross Profit margin remained flat at 39.6 percent due to higher raw material costs and unfavourable product mix, offset by higher pricing and manufacturing productivity.
“Our first-quarter results demonstrate that we are emerging from the COVID-19 pandemic stronger, as we continue to build upon our track record of robust growth, profitability and cash generation,” said Dirk Van de Put, Chairman and Chief Executive Officer.
“We saw continued improvement across emerging markets, healthy demand in developed markets and another quarter of strong share performance. We remain squarely focused on accelerating growth by further strengthening our core brand and expanding our presence in high-growth channels, categories and adjacencies. Our strategy is working, and our business is better positioned than ever before.”
- Operating income increased $427 million and operating income margin was 17.7 percent, up 490 basis points primarily due to favourable year-over-year change in mark-to-market gains/losses from currency and commodity derivatives and higher Adjusted Operating Income1, partially offset by higher restructuring expenses. Adjusted Operating Income increased $142 million at constant currency, and Adjusted Operating Income margin increased 140 basis points to 17.9 percent primarily driven by lower overhead costs, partially offset by increased advertising and consumer promotions spend.
- Diluted EPS was $0.68, up 33.3 percent, primarily due to mark-to-market gains from derivatives versus losses in the prior year, lapping the prior-year loss on interest rate swaps and an increase in Adjusted EPS, partially offset by a loss on debt extinguishment, higher Simplify to Grow program costs and lapping the prior-year gain on equity method investment transactions.
- Adjusted EPS was $0.77, up 10.6 percent on a constant-currency basis driven by operating gains and share repurchases, partially offset by lower equity method investment earnings and higher taxes primarily due to changes in the company’s mix of earnings.
- Capital Return: The company returned $1.5 billion to shareholders in cash dividends and share repurchases.
2021 Outlook
Mondelēz International provides its outlook on a non-GAAP basis, as the company cannot predict some elements that are included in reported GAAP results, including the impact of foreign exchange. Refer to the Outlook section in the discussion of non-GAAP financial measures below for more details.
The company estimates currency translation would increase 2021 net revenue growth by approximately 2 percent with a positive $0.10 impact to Adjusted EPS3. Outlook is provided in the context of greater than usual volatility as a result of COVID-19. The company strategy and long-term algorithm remain unchanged.
Mondelēz International, Inc. (Nasdaq: MDLZ) empowers people to snack right in over 150 countries around the world. With 2020 net revenues of approximately $27 billion, MDLZ is leading the future of snacking with iconic global and local brands such as Oreo, belVita and LU biscuits; Cadbury Dairy Milk, Milka and Toblerone chocolate; Sour Patch Kids candy and Trident gum.
Mondelēz International is a proud member of the Standard and Poor’s 500, Nasdaq 100 and Dow Jones Sustainability Index.
