Mondelēz Raises Outlook As Demand In Emerging Markets Bounce
Mondelēz International Inc has raised its full-year organic revenue forecast, encouraged by higher demand for its Oreo biscuits and Cadbury chocolates in emerging markets.
Demand for the group's biscuits and snacks has picked up across China, India, Russia and other emerging markets, which had struggled to pull in sales last year while pandemic-led curbs kept people at home.
Mondelēz is now doubling down on those markets by ramping up capacity and increasing production lines rather than opening new facilities, in an effort to save costs.
The company also left its full-year profit forecast unchanged as it faces rising costs in areas such as edible oils, packaging, transportation, and labour.
Shares in the Toblerone maker fell about 2% after market, even though the company forecast full-year organic net revenue growth of more than 4% versus its prior estimate for an over 3% increase.
Dirk Van de Put, chairman and chief executive officer, said, "We delivered another strong quarter of performance across all key metrics, including top-line, profitability and cash generation.
"We continue to see strength across the vast majority of our geographies, categories and brands as we remain intensely focused on consistent execution and reinvestment to further strengthen our position. We are confident that our strategy, long runway of clear growth drivers and advantaged enablers will continue to drive consistent and attractive growth and value generation over the long term."
In developed markets, meanwhile, remote work trends staying largely in place has helped Mondelēz as people continue to munch on its Cadbury chocolates and Chips Ahoy biscuits while they work.
Net revenue from the company's developed markets segment grew 8.9% to $4.35 billion in the second quarter ended 30 June, while the emerging markets unit brought in $2.29 billion, nearly 20% higher than last year.
Total net revenues rose 12.4% to $6.64 billion, beating analysts' average estimate of $6.42 billion, according to IBES data from Refinitiv.
In May of this year, Mondelēz collaborated with Mars UK, Nestlé, PepsiCo and Unilever to set up a £1 million fund to help make flexible plastic recycling economically viable for recyclers and easier for consumers in the UK.