In an earnings call to investors after its Q3 2020 results showed net revenues increased 4.9% primarily driven by strong organic net revenue growth of 4.4%, the Oreo maker has forecast 2020 earnings to grow more than 5%.
Results at a glance
- Net revenues increased 4.9% primarily driven by strong Organic Net Revenue growth of 4.4%
- Year-to-date diluted EPS was $1.66, down 24.2%, lapping a prior-year benefit from Swiss tax reform; Year-to-date Adjusted EPS was $1.92, up 5.9% on a constant-currency basis
- Diluted EPS in the quarter was $0.78, down 20.4%, lapping a prior-year benefit from Swiss tax reform; Adjusted EPS in the quarter was $0.63, flat on a constant-currency basis
- Year-to-date cash provided by operating activities was $2.3 billion, up $0.4 billion versus prior year; Free Cash Flow was $1.7 billion, an increase of $0.5 billion versus prior year
- Returned $0.4 billion of capital to shareholders in the quarter through dividends
“Our execution was strong. We continue to accelerate our strategic initiatives and all of our regions were in growth. Our teams have been resilient and focused and we continued to prioritize safety during Q3, as we will for the remainder of the year,” said Van de Put.
“We continue to manage successfully through uncertainty and COVID-related challenges. And as a consequence, we are outperforming our categories, continuing to gain significant market share.
“Our largest categories, biscuits and chocolate, continue to perform well. Gum is still under significant pressures due to changes in consumer mobility and habits. And Candy, while initially under pressure, also improved. Meals and powdered beverages continue to do as well. Demand remained elevated in developed markets and we saw sequential improvement in emerging markets.”
Lockdowns
Van de Put told analysts and investors consumers were still snacking more at home than they did before the pandemic, but not as much as in March and April, when the first round of lockdowns began.
“In emerging markets, the majority of our markets grew in Q3, including key markets such as India, China, Brazil and Russia. But conditions do vary, and some markets are still challenged, particularly where our portfolio skews towards gum and candy or where our sales are mostly in the traditional trade, which is mainly in Latin America, the Middle East and Africa,” he said.
In Europe, where a second round of lockdowns has been announced in some countries, sales from convenience stores had improved, but travel retail and on-the-go purchases, a big part of sales in the region, continued to struggle.
Diversity and inclusion
Regarding Mondelēz International’s diversity and inclusion commitments, Van de Put said he was particularly pleased with the recent appointment of a New Global Chief Diversity and Inclusion officer Robert Perkins, brought in to drive an “even more inclusive culture at Mondelez”.
Sustainability
On sustainability, Van de Put said the company will continue to invest in creating a more sustainable supply chain for cocoa.
“We just unveiled a new Global Cocoa Technical Centre in Indonesia, which will support sustainable cocoa farming practices, and drive positive change for farmers and communities. And finally, we are developing the sustainable futures investment programme to amplify our impact in sustainability areas in our palm and cocoa growing communities.”