Mondelēz International, Inc (NASDAQ: MDLZ) Q4 2025 Earnings Call dated Feb. 03, 2026
Corporate Participants:
Dirk Van De Put — Chair & Chief Executive Officer
Luca Zaramella — Executive Vice President, Chief Operating Officer and Chief Financial Officer
Analysts:
Andrew Lazar — Analyst
Peter Galbo — Analyst
Megan Alexander. Clapp — Analyst
Michael Lavery — Analyst
Chris Carey — Analyst
David Palmer — Analyst
Scott Marks — Analyst
Questions and Answers:
operator
Thank you for your continued patience. Your meeting will begin shortly. If you need assistance at any time, please press star zero and a member of our team will be happy to help you. Sa. Sam. Thank you for your continued patience. Your meeting will begin shortly. If you need assistance at any time, please press star zero. Any member of our team will be happy to help you. Please stand by. Your meeting is about to begin. Good afternoon and welcome to the Mondelez International 2025 fourth quarter and full year earnings question and answer session. Your lines have been placed on Listen only until it’s your turn to ask a question. In order to ask a question, please press the star key followed by the number one on your touchtone phone at any time to remove yourself from the queue, press star 2. On today’s call are Dirk Vandeput, Chairman and CEO Luca Zaramella, COO and CFO, and Shep Dunlap, SVP of Investor Relations. Earlier this afternoon, the Company posted a press release and prepared remarks, both of which are available on its website.
During this call, the Company will make forward looking statements about performance. These statements are based on how the Company sees things today. Actual results may differ materially due to risks and uncertainties. Please refer to the cautionary statements and risk factors contained in the company’s 10K, 10Q and 8K filings for more details on forward looking statements. As the Company discusses results today, unless noted as reported, it will be referencing non GAAP financial measures which adjust for certain items included in the Company’s GAAP results. In addition, the Company provides year over year growth on a constant currency basis.
Unless otherwise noted, you can find the comparable GAAP measures and GAAP to non GAAP reconciliations within the Company’s earning release and at the back of the slide presentation. We will now move to our first question. Our first question comes from the line of Andrew Lazar with Barclays. Please go ahead.
Andrew Lazar
Great. Thanks very much. Good afternoon, everybody. Hi, Andrew. Hey there, Derek. Maybe to start us off clearly significant interest in obviously the chocolate category and how the precipitous fall in cocoa could impact the dynamic. Where is Mondelez currently on its chocolate strategy? How does it play out from here, particularly as it relates to the potential for some price deflation in areas where obviously significant pricing has been taken.
Dirk Van De Put
Yep. Thank you, Andrew. I would start off by saying that if you look at 2025 and the overall chocolate market in the world, seeing the rather important price increases that took place, that the category overall has shown a lot of resilience, despite all the volatility in in that we had a playbook for our chocolate strategy which was largely to price list price or do revenue growth management largely through price pack architecture. And we’ve executed well against that chocolate playbook in 25. If you then look at the markets around the world, I think places like India, Brazil, Australia, South Africa, some of our bigger chocolate markets, we have done quite well.
And also in Europe, in about half of the markets things played out exactly as expected. However, I would say in the more northern markets in Europe, Germany, the Nordics, the uk we saw higher than expected elasticity and so we have to take adjustments in 26. We have learned that certain price points are very important and so we have adjusted already to put our products at the right price point. Some of the PPA worked, others didn’t, so we are adjusting also some of the PPA we have in the market. We are planning to increase our investments behind our brands because in this year our cocoa coverage is at a better cost than it was in 25.
So we are able to increase substantially investment behind our brands and we do that because we want to get back to the normal frequency and quantity of consumption that we’ve seen. Penetration hasn’t gone down, but the frequency and the quantity of consumption did. We are also investing in price, as I mentioned, to hit those right price points and as well in new ppa we’re going to push hard on innovation. We have the collaboration with Biscoff which was very successful in 25, but it really is going to go to the next level in 26. So I think we’ve got a very strong innovation agenda led by Biscoff with a number of other things in Europe and then we are going to have some important activations in store.
However, as you probably have seen in the last two weeks, suddenly the cocoa price has declined more than anybody would have expected. And this will have some short term pressures largely as it relates to probably have an industry or the larger players industry that already are covered for 26 at a higher price than the current market price price and this could maybe give us some unexpected competitive reactions. And so we want to build in some flexibility in our guidance because we don’t quite know how that is going to play out in the market in 26.
What is good in all of this is that cocoa now has returned to a level that is much more in line with the historic that we’ve seen and that bodes very well for 27. As I said, we’re already covered for 26. There’s not a lot we can do anymore, but 27 certainly will benefit from this. So we see our chocolate business in 27 increase its margin in a considerable way as it relates to 26. Like I said, we’re going to remain very agile. We’re going to do all the things that we said and then make sure we enter 27 with a lot of strength.
We are planning to go through a lot more detail on what our chocolate strategy is during the Cagny conference, so I would certainly invite everybody to come and listen to us there.
Andrew Lazar
Great. Really helpful. Hopefully you can arrange to get some of the Biscoff stuff down there as well. That’s just a personal favorite. And then Luca, maybe shifting gears over to the outlook maybe what’s your thought process on the guidance range and sort of investment flexibility that Dirk mentioned In light of the fall in Cocoa costs, what are your updated thoughts on sort of the Cocoa environment if you will, from here? Thanks so much.
Luca Zaramella
Thank you Andrew. So before commenting on the 26 guidance, maybe a brief comment about how we ended the year and I think as we said we are quite happy with our emerging markets momentum and quite frankly also happy because we saw sequential improvements in developed markets, albeit with we are not fully there yet on 26. The guiding principle of the guidance was to be prudent, particularly as we see some short term pressure points like in the US you know that the biscuits category is still subdued and you know the plan is that it will continue like that for the first half at least with some marginal improvements in the second half.
In Europe we have planned for a chocolate category that is stable after the meaningful prices that were taken. But we also planned for some disruption due to the usual customer negotiation process that takes place in the first part of the year. The main reason for the guidance range is that recent and sudden Cocoa dynamics might require some adjustments and flexibility depending on how competitions will react to those prices and where Cocoa eventually will stabilize. As we said, our pipeline cost for 26 is determined at this point in time and it is clearly at higher than current Cocoa spot.
So this is something that we hadn’t anticipated before and as we said it just happened in the last couple of years, couple of weeks. Our objectives are clear. We want to win with the consumers, we want to win in the marketplace and that one of the reasons why we are investing substantially behind our brands and hopefully the goal is to have improved volume trajectory particularly as we move through the year. On the phasing. Maybe just one word. I commented already on the customer disruption in Europe in the first part the of part of the year but on profit, given the way our inventory accounting works, we will face some headwinds.
And we mentioned that in the prepared remarks on Cocoa. I said it a few times and I believe fundamentally nothing has changed. If you look at supply and demand, the dynamics were clear well before the last couple of weeks. And so I believe what the market is recognizing now is maybe a little bit over overdue. Obviously we would have liked a little bit more of a balanced approach to the way down of Cocoa. It happened all of a sudden. But reality is that in our mind, Cocoa as it stands now is a fair representation of supply and demand.
And that’s why we believe this level is important for us to realize as we look at profitability, particularly going forward into 27 and beyond.
Andrew Lazar
Great, thanks so much.
Luca Zaramella
Thank you Andrew.
operator
Thank you. We’ll now move on to Peter Galba with Bank of America. Your line is now open.
Peter Galbo
Hey, good afternoon Dirk and Luca. Thanks for the questions. Luca, maybe if I can actually pick up on the comments you just made around some of the phasing more on the cost side. I know that you mentioned I think the lion’s share of it comes in in the first quarter, but maybe you can just talk us through a bit more the cost phasing on cocoa 326 and then maybe how we would think about the phasing on potential price investments in chocolate over the balance of the year.
Luca Zaramella
Thank you Peter. So fundamentally, maybe I’ll start with the top line because I think that’s a clear component of how we think about the planning 26. As you might imagine, at this level we are not going to price Cocoa further necessarily. But it is also important to know that our profit took quite a material hit in 2025. And so we were not certainly fully priced at the level of cocoa in 25. And albeit the pipeline cost is coming down in 26, we need to keep a level of pricing that is pretty much the same as we had in 25 in terms of costs.
The way our inventory accounting works is that we will have to adjust the level of inventory in the first day of the year to the actual pipeline cost that we see in 2026 versus how we exited the year in 2025. And that is a one time adjustment that takes place on the inventory and that is causing in the first two quarters, but predominantly in Q1, an impact that is half a billion dollar. And that gives you an idea of the dislocation of cost that we see throughout the two years. So in terms of top line, I would say in Chocolate Specifically flat pricing in terms of volume.
Some implications as there is disruption, as there is customer disruption in Europe. And in terms of cost, higher cost in the first half versus the second half. And so as we move through the year, I think you’re going to see a sequential improvement of volume and revenue. But most importantly in terms of EBIT phasing in all of these investments in ANC is equally spaced throughout the quarter. So no material changes. I would say quarter on quarter in absolute terms of our ANC investment.
Peter Galbo
Great, thanks for that. Luca and Dirk, Maybe to pivot to North America. I mean, I know it continues to kind of be a difficult operating environment. Volume trends are still a bit weak. There’s a view maybe that this is more K shape or cyclical tide versus structural. And maybe in the context of just one of your largest peers announcing price cuts today in the stacking category. We’d just love to get your perspective on the North American market, where you stand on that debate and again on the pricing front, kind of what the go forward actions might look like there. Thanks very much.
Dirk Van De Put
Okay, Peters. Well, first of all, I think the thing in North America is the consumer. The consumer confidence is near historic low. They’re worried about overall affordability. They are fed up with the price increases. They don’t feel good about their personal economic outlook. They doubt about job security. So what we are seeing is that the average shopping basket of the consumer in the US, whether you’re in the higher or in the lower social economic classes, has not increased for the last two, three years within that basket. They have spent more money on the basics, milk, meat, bread and so on.
And as a consequence snacking is being affected. And you can see that in all of the snacking categories. You talked about, the K shaped economy, there is clearly a group of consumers, the more wealthy consumers that do spend differently in the sense that you can see that things like premium and better for you are growing within the snacking markets also, some on the go. But the bulk of the consumers, they are really into value seeking. So what they do is they look for lower unit prices, they look for deals. If they have a bit more money, they will look for bulk packs or multi packs.
And they also shift channels from food and mass into value club and online. As you said, the biscuit category is showing soft volume the last three months. It’s down 4% in volume, 3% for the year 25. So overall we don’t necessarily see an immediate change as it relates to where the consumer is. And as a consequence we need to Adapt to these circumstances. So what do we do? We are going to invest more to drive awareness. We see the same as in chocolate in Europe. Penetration of our brands is not decreasing or sometimes just a little bit.
It’s largely the frequency and, and the quantity bought that is being affected. So we’re going to invest in improving that frequency and the quantity bought. We’re going to use PPA to address some of the affordability. We are expanding in some of these channels that I was mentioning. We are under indexed. So we are pushing harder and we are increasing our market share and we have offerings that are doing well. I’m thinking about a perfect bar which is a protein offer or a Dates, a premium biscuit or a Yule premium in chocolate or Builders bar in the cliff range which is also protein.
They are all doing well, growing double digits. So we’re going to push harder on those brands. And then lastly, I would say we are activating a supply chain program which is meant to run over the next three, four years. It’s largely to modernize our operations, but it also will improve our efficiency and our costs. It’ll give us more network flexibility. So overall I would say we are entering a year in North America. We are stronger in the sense that we will do more investments that we’ve understood better what works and what doesn’t work and, and that we have quite an extensive plan on things we want to do as it relates to pricing itself.
We started off 25 and were quite aggressive on promotions and on deals. Working on price, I have to say it didn’t give us a return on our investment. So in 2H25 we changed our strategy. We did a lot less promotion and pricing as a consequence, our price realization went up and I would say overall our P and L improved in North America, but we lost some market share because our volume performance wasn’t the same. But overall I would say that probably was better for us. So the way forward for us is better activations, interest the consumer more, make sure that they feel compelled to buy snacks, our snacks on every shopping trip.
But we don’t necessarily think that we need to decrease our prices to the magnitude that I heard from another company.
Peter Galbo
Great, thanks very much.
Luca Zaramella
Thank you, Peter.
operator
Thank you. We’ll now move on to Megan Clapp with Morgan Stanley. Your line is now open.
Megan Alexander. Clapp
Hi, good afternoon. Dirk Luga. Thanks so much. I wanted to just maybe Luca follow up on the answer to Pete’s first question just to make sure I fully understand kind of the message you’re talking about. Is there are a lot of moving parts with Cocoa and pricing. So when you talk about flat chocolate pricing in 26, that’s the expectation. Cocoa should be down, I think significantly. But should we think about the net price cost relationship embedded in the guide as roughly neutral to the year because of the inventory accounting and the elevated hedges flowing through, or is it still a net positive? I’m just trying to kind of understand the dynamics. Is the idea that if pricing can kind of stabilize in 26, cocoa resets lower in 27. So that’s really when the real profit recovery starts to show up?
Luca Zaramella
Yes. Thank you, Megan. The idea is to have a neutral to positive balance in chocolate specifically between cost and pricing. And albeit pricing is less, is not going to move much. As I said, there is an element of cost that was locked for 2026. So in general you should think about pricing network cost as slightly positive to neutral for chocolate. That’s the way we have prepared the plan.
Megan Alexander. Clapp
Okay, that’s super helpful, thank you. And then just to come back to the organic sales outlook. 0 to 2%. You’ve got some nice momentum in emerging markets. Think finished the year around high single digits. So is that the expectation for 2026 that emerging markets can kind of be in that high single digit range? And if so, I think mathematically would imply kind of developed markets decline in the low to mid single digit range. So is that math fair? And just any way to kind of think about the US versus Europe in.
Luca Zaramella
Relation to that the emerging markets will continue growing and hopefully they will do even better than what is embedded frankly in the guidance. We’re happy with the momentum we are seeing in both Latin America and emea. Now in both segments we have a meaningful presence in chocolate. And if you look at how much we price, that contribution is not going to be there for 2026. But on the flip side, there should be less elasticity. Now I would say say majority of the volume declines that you see, particularly in EMEA but also in Latin America, are due to ppa.
So the volume momentum is really there when you take out the EPA impact. The idea for 2026 is again to grow this market pretty much at the same level, but there will be a little bit less contribution from pricing and more contribution from volume mix.
Megan Alexander. Clapp
Okay, thanks Luca.
Luca Zaramella
Thank you, Megan.
operator
Thank you. We’ll now move on to Michael Lavery with Piper Sandler. Your line is now open.
Michael Lavery
Thank you. Yeah, you touched on the advertising spend as a tailwind in 4Q but you’ve talked about stepping up investments next Year. Can you give a sense of order of magnitude and would 2026 be basically back to normal? Is there any kind of push beyond that? How do we think about what kind of investment level you’ve got in store for the year?
Luca Zaramella
So Michael, if you look at the SGA line, it was clearly down year on year 24 on 24, one of the drivers there is continued overhead savings but we had to tap a little bit into ANC 2. We said many times that we didn’t touch the working media line but we touched the non working media predominantly. The idea is to continue with lower non working media but to clearly step up in the working part. And if you look over a couple of years between 24 and 26, we will more than recover what we had to pull back in 25 into the overall line.
On the other part of SGA, ergo the overheads part, we will continue with cost savings but we will have to step up a little bit the annual incentive plan. So all in all, the investments in AMC over two years, I think it’s going to be substantial. If you take 24 to 26, it’s up quite meaningfully.
Michael Lavery
Okay, that’s helpful. And just back to emerging markets. May we touch on that specifically? Maybe Latam, it’s down now a couple years from what can you do to grow volumes there? And can you give any sense maybe of what kind of assumptions would be baked into the guidance?
Luca Zaramella
Look, I think the simple answer there is that in Latam there is Argentina which went through quite a bit of economic turmoil and there were material issues in the country and on top of that debt, we decided to protect working capital and not to extend payment terms to anybody. And we did quite, I believe a good work in keeping the business in accordance to our operating principles that are protect cash in Argentina and bring the cash home. That’s what we did. When you strip out Argentina and you look around, clearly Brazil got a little bit impacted by elasticity in chocolate.
But Brazil is one of the best performing markets that we have, top and bottom line. They did an amazing job in terms of PPA and minimizing elasticity. We are growing quite well outside of chocolate. If you look at Mexico, there was a big comeback. The country is now in growth territory and doing fairly well. And so the two major markets in Latam are doing quite well. It is Argentina masking a little bit the performance of the region.
Michael Lavery
Okay, that’s helpful. Thanks so much.
operator
Thank you. We’ll now move on to Chris Carey with Wells Fargo Securities. Your line is now Open.
Chris Carey
Hi everyone. Thank you for the question. I wanted to start with this comment on the company’s goal to demonstrate significant volume trajectory change over the course of 2026. Can you help us understand regionally where that change might be occurring? Some of the key drivers, for example, the channel strategies that you have in North America, are those expected to be material European or comps in Europe get quite a bit easier into the back half of the year. You mentioned the piece with PPA impacting emerging market volumes, a touch and elasticity is getting better. Just give us a sense of what significant volume trajectory improvement looks like and contextualizing a bit where that’s coming from and why.
Dirk Van De Put
Yes, I mean if I go through the regions, we clearly expect EMEA overall, if you look at how we’re doing in India, in Australia, China coming back, so we see EMEA as being a big source of volume growth for us. So that’s certainly a region that where we will see some good performance. If it then look to Latin America. As Luca was saying there also we think that it’s going to be quite a good year for us. North America, as I was explaining, the consumer confidence isn’t there. The biscuit category is soft. We expect expect that the volume decline that you see in the category of 4% will ease.
But we are not exactly counting on volume growth in North America and then in Europe. What I expect there is that first of all in our other categories we had a pretty good year already in 25. We expect that to continue talking about biscuits, cakes and pastries and meals and in chocolate. The price increase as we discussed is going to ease. In fact, we are readjusting some of our pricing in certain markets. So all that we expect also will have a positive effect on volumes as compared to 25. So hopefully that gives you an idea where the volume growth is going to come from. The phasing during the year is as these different activities come to bear, we expect that gradually to be better and also the lapping effect will help us over the year.
Chris Carey
That’s great and I know it’s been broached a bit. But just to confirm, as we get into 2027 and really I’m asking, just because it was included in the prepared remarks, can you give us a sense of the investments that will have been lapped going into 2027, should we expect the media investment to be done in 26? The rebasing of media, the rebasing of comp. The investments into channel expansion strategies such that going into 2027 we’re really just thinking about an improved complexion of the top line gross margins getting a bit more life against a lower cocoa price and more operating leverage to sga or is there multi year investments that will be continuing to come into the model as we get into 2027? I realize we may get more information on this at Cagny, but again it was in the prepared remarks so I figured I’d get a bit more context on that. Thanks.
Dirk Van De Put
Yes. So as we explained, so in 26 we are taking a step forward and significantly increase our investments in working media as compared to 25. Taking into account at 25 we took a step down largely in non working media, but also a little bit in working media. For 27 we expect that we will do another step up in investments. We believe that we have to continue to invest in our brands. The opportunity is big and we want to drive volume growth because that needs to be the first base of growth for the company combined with hopefully over time a little bit of pricing.
So that’s our thinking as it relates to margins. We feel that overall from a commodity perspective that things will ease, particularly in cocoa. And so we can see a significant uplift in our chocolate margins in 27 which will be divided by reinvesting part of it and part flowing to the bottom line. And so we will. We are aiming for a strong EPS growth in 27, but at the same time we want to keep on investing in our brand. So we are not planning to flow everything to the bottom line if that would be the thing.
Chris Carey
Thank you all, appreciate it.
Luca Zaramella
Thank you.
operator
Thank you. And we’ll go next to David Palmer with Evercore. IFI your line is now open.
David Palmer
Thank you. Sort of a big picture question on European chocolate. In your division there. I wonder how are you thinking about the path to a profitability recovery there? To sort of a pre 25 levels that we saw for a few years. If you think that is even the norm, you know that where we saw profitability there and I wonder, with prices having come down, is 27 the beginning of a recovery and you know what, is there a path back to pre 25 levels of profitability and how do you think that would play out? And I have a follow up.
Luca Zaramella
So the idea, David, is to go back to the profit pool as it used to be and hopefully even a little bit better. Because remember, we really have growth opportunities even in Europe and quite frankly we still have to invest quite a bit of AMC and expand both in the developed part of Europe but also in the developing part of Europe. We still have plenty of opportunities in terms of price point, channel segment within chocolate. And our goal is to grow the chocolate business in Europe after the meaningful price increases we have taken in 25.
If Coco ranges at around 3,000, our goal is to get into 27 with a much improved situation and to really be able to get back to the all profit pool. And if we have to make some selective price investments, we will make them. I think if you look at the way the 26 plan is structured in Europe, there are more promotions, we are going to offer more value to some of the consumers. And all in all, I think while 26 can be a new base, 27 can really be a step change for our chocolate market overall around the world, including Europe.
David Palmer
Are there any sort of milestones this year that you’re going to be really watching for? Whether it’s perhaps how you see the retailer brand pricing works or your own price elasticity levels remaining better than a certain threshold? I mean, what are some things that you’re going to be looking for and that we could even look for in the data?
Luca Zaramella
It is potential competitive reaction, as we said a couple of times. Already.
David Palmer
Got it. Thank you.
operator
Thank you. We’ll now move on to Scott Marks with Jefferies. Your line is now open.
Scott Marks
Hey, good afternoon all. Thanks so much for taking our questions. First one for me, I don’t believe I’ve heard any discussion thus far about GLP1 and some of the more recent developments in that market, especially with some of the newer oral medications. So just wondering if you can share a bit about how you’re thinking about that and what you’re expecting on that front for this year and beyond.
Dirk Van De Put
Yes, well, we model it out every quarter basically based on the latest information. And we have noted the fact that the price of some of it has come down. We have noted that there is oral being approved. We’ve taken into account the estimates as it relates to that. And I have to say that up to our opinion that will not significantly change the estimates that we’ve had so far and the estimates we had so far. First of all, we do not see a short term impact on our business because there is a very modest adoption rate right now and also the calorie reduction is relatively benign that we see.
But if we expand 10 years and we take an adoption rate in the US which would be somewhere between 10 and 20%, and even then we do not see a significant effect on our overall business. We believe that over that period of time it could have a 0.5 to 1.5% effect on our overall volumes. So almost neglectable over a period of 10 years. So at this stage I can’t say that we feel that it is having a major impact on our business.
Scott Marks
Appreciate the color there. Maybe next question from me. You made some comments in the prepared remarks about continued investment in cocoa growing regions maybe outside of West Africa. Just wondering if you can share an update on some of those investments and how you’re thinking about those moving forward relative to kind of the traditional cocoa growing regions. Thanks.
Dirk Van De Put
Yes, I think it’s just better from an overall long term risk management perspective that we balance our supply of cocoa into different geographical regions. Those regions are largely Latin America mainly and also a little bit in Asia in places like India, Indonesia. In Latin America the countries that are stepping up are largely Ecuador and Brazil. Different farming models. In Brazil we see some large farms coming up and we are having long term agreements with them to supply us. And then in Ecuador it’s smaller farmers but who are getting together and we see those countries significantly increase their output.
And so over time that might not give the best cocoa price but we think the current price that we see should be sustainable. But it will significantly decrease the risk of events like a bad crop or a disease that affect the crop in a country that that is going to have a big impact on the overall cocoa market as we currently see whereby Ghana and Ivory coast have close to 60%, 65% of the global cocoa supply. The other one I would say that is worthwhile is that I think over time there will be more and more lab grown cocoa that will become available.
Not GMO but lab grown. And we think that there will be an interest from the European Commission and the US government to approve that sort of cocoa. Why? Because it has significant beneficial effect in the sense that all the negatives that surround the cocoa supply chain would not be there as it relates to climate and other social effects. So in that sense that’s also a direction that we are investing in and supporting. Appreciate it.
Scott Marks
Thanks. Pass it on.
Dirk Van De Put
Thank you. I think that was the last question for today. I would like to thank you for your attention. I would like to reiterate the fact that we will be going deeper in Cagny into the European chocolate situation and give you the details on how we planning to tackle it. We’ll also go deeper in our North American situation and what our plans are there and we will cover the emerging markets and of course our financial outlook. So we’re looking forward to see you there to spend some more time explaining our business to you. Thank you.
Luca Zaramella
Thank you, everyone.
operator
Thank you. This brings us to the end of today’s meeting. We appreciate your time and participation. You may now disconnect.