Mondelez net revenue slides 3.7% despite strong performance in emerging markets

USA – Mondelez International’s reported a 3.7% decline in net revenue despite strong performance from emerging markets which saw 5.4% growth in organic net revenues in the third quarter.

In emerging markets, growth was driven by strength in Russia, India, Mexico, China, Southeast Asia and Africa.

It reported revenues of US$6.30 billion and earnings per share of 62 cents and operating income margin was 11.7%, down 620 basis points.

Gross profit margin was 38.4%, down 60 basis points driven primarily by an unfavorable impact from currency and commodity hedging activities while adjusted gross profit registered significant growth as a result of higher pricing and productivity savings.

“We performed well in the third quarter,” said Dirk Van de Put, Chairman and CEO.

“We continue to see good momentum in emerging markets, underpinned by solid volume growth and strong execution.

We are beginning to deliver against our new long-term growth strategy by implementing a more agile innovation model and establishing a new commercial structure that will improve our consumer focus and drive greater local accountability, while igniting our global and local brand and innovation agendas.”

The chairman of the company said that it looks to unlock further growth by contemporizing the brand, capitalizing on untapped opportunities and overhaul its marketing and innovation agendas.

During the period, the company embarked on new product launches including Joy Fills, crispy, pea-sized biscuits launched in Europe under the Oreo, Cadbury and Milka brands.

In India, the executive said the Lickables product helped to deliver 90 basis points of chocolate share gains year to date while in the United States, the Oreo product posted mid-single digit growth in the third quarter.

For the year 2018, the company expects full year 2018 organic net revenue growth to be approximately 2%, operating income margin of approximately 17% and double-digit Adjusted EPS growth.

Mondelez has also made significant leadership changes; Vinzenz Gruber, currently President, Western Europe, will become EVP and President, Europe, succeeding Hubert Weber who will retire on January 31, 2019.

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