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A-Brands

Mondelēz Lifts Sales Outlook On Emerging Markets Boost

Mondelēz International Inc raised its annual sales forecast as price increases and strong demand from emerging markets helped the Oreo cookie maker beat estimates in the third quarter.

Demand for its biscuits and snacks has bounced back across China, India, Latin America and other emerging markets after tepid sales last year, when the economic toll of the pandemic dealt a sharp blow to consumer spending in those regions.

Net revenue from its emerging markets segment grew 12.9%, to $2.58 billion, in the third quarter, following a 3.1% fall last year.

Ramping Up Capacity

The chocolatier is now doubling down on those markets by increasing production lines to ramp up capacity rather than open new facilities, in an effort to save costs.

Like other packaged foods makers such as Campbell Soup Co and Conagra Brands Inc, Mondelēz has been raising product prices in recent months to contend with higher costs of ingredients such as sugar and wheat, as well as packaging, transportation and labor.

"Costs have moved higher in the second half of the year relative to the first half, and we expect inflation to persist in 2022," said chief executive officer Dirk Van de Put in a post-earnings call.

Read More: Thinking Beyond The Playbook – Mondelēz CEO On Navigating COVID-19

Revenue Outlook

Mondelēz now expects full-year organic net revenue growth of about 4.5%, compared with its prior forecast of an over 4% increase. Analysts on average were expecting 4.25%, according to IBES data from Refinitiv.

Net revenue for the third quarter ended 30 September rose 7.8% to $7.18 billion, surpassing estimates of $7.03 billion.

Excluding items, the Cadbury chocolate maker earned 70 cents per share on a constant currency basis, compared with expectations of 70 cents.

In October, Mondelēz commenced the testing of future-oriented snacking solutions developed by its SnackFutures Innovation Hub in German supermarkets.

News by Reuters, edited by ESM. For more A-Brands stories, click here. Click subscribe to sign up to ESM: European Supermarket Magazine.

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