The Milka owner today reported a 17.7% drop in second quarter (Q2) net revenues to $6.3bn. Organic net revenues were up 1.5% in Q2.
Below category growth
Nielsen data showed the global biscuits, chocolate, gum & candy market grew 2.8%% up to June year-to-date, but Mondelēz grew 1.9% in these combined categories over the same period.
Mondelēz posted H1 organic net revenue grow of 1.8% in biscuits, 2.1% in chocolate and 1.8% in gum & candy.
Bringing Milka to China
The company announced plans to bring Milka to the Chinese market in September.
It says it sees "enormous potential" for growth in the Chinese chocolate category, a market led by Mars.
Mondelēz has been present in China for 30 years and in 2012 entered the gum market with its Stride brand. Its Chinese gum segment has grown to a $200m business after it introduced Trident to the market last year.
Europe sales flat
Mondelēz recorded reported net revenue declines in every region except North America in Q2. Reported net revenues were down 26.5% in its main region, Europe, while Latin American sales plummeted 32%.
Board appointment
Mondelēz last week appointed former PPG industries chairman and CEO Charles E. Bunch to its Board of Directors. Bunch, 66, joins 13 other directors at Mondelēz. Bunch is a former director at Heinz and currently serves on the Boards of ConocoPhillips, Marathon Petroleum and the PNC Financial Services Group.
But Mondēlez said organic revenue growth was up 8.8% in Latin America and down 0.1% in Europe.
Mondelēz’s net earnings were $471m in Q2, up 10.3% compared to Q2 2015.
Hershey bid and Cadbury Biscuits rumors
Earlier this month Mondelēz made a failed $23bn approach to acquire Hershey.
Hershey rejected the offer and said it provided “no basis for further discussion”.
Mondelēz later declined to comment on speculation that it had approached Burton’s Biscuits with a view to acquiring its Cadbury Biscuits license.
‘Challenging currency environment’
Mondelēz slightly revised its full year forecast from organic net revenue growth of at least 2% to approximately 2%.
It expects to deliver incremental earnings per share of $0.03 to $0.05 for the year. It said this would “effectively offset the impact from a more challenging currency environment, including the impact of the United Kingdom’s vote to exit the European Union”.
[CORRECTION - This article previous said Mondelēz was expected a 2% decline in organic net revenues. This was inaccurate. The company anticipates approximately 2% growth for the full year]