Higher pricing, strong volume drive Mondelēz revenues  

REUTERS/Michael Buholzer/File Photo

Mondelēz International has reported strong revenue growth in its first quarter 2022, driven my higher pricing and strong volume growth

The Cadbury and Oreo maker’s net revenues increased 7.3 per cent driven by organic net revenue growth of 8.6 per cent.

“We delivered strong top-line results in our first quarter, driven by higher pricing and strong volume growth. Our chocolate and biscuit businesses continue to power our virtuous cycle of attractive revenue growth, strong profitability and robust cash flow,” said Dirk Van de Put, chairman and chief executive officer.

“Demand remains strong across both developed and emerging markets, with all our regions posting growth.”

Mondelēz has also announced an agreement to acquire Ricolino, Mexico’s leading confectionery company with iconic brands and strong distribution capabilities, doubling the size of its Mexico business.

Van de Put said the company expects ‘elevated levels’ of input cost inflation to continue through the remainder of the year, adding that the business will be taking necessary actions to offset this dynamic, including a broader revenue growth management agenda, ongoing cost discipline, and further simplification within our business.

“We remain confident in our strategy and ability to create long-term value, while recognizing the need to stay agile to navigate the dynamic economic and geopolitical environment,” he said.

Gross profit increased $17 million to $2.98 billion (£2.38bn), while gross profit margin decreased 260 basis points to 38.4 per cent primarily driven by lower mark-to-market gains from derivatives, the decrease in adjusted gross profit margin and incremental costs incurred due to the war in Ukraine.

Adjusted Gross Profit increased $283 million at constant currency, while adjusted gross profit margin decreased 80 basis points to 38.8 per cent due to higher raw material and transportation costs and unfavorable mix, partially offset by pricing, productivity and volume leverage.

For 2022, the company now expects 4+ percent organic net revenue growth, which reflects the strength of its first quarter and higher pricing related to increased input costs. The company also now expects mid-to-high single digit adjusted EPS growth on a constant currency basis due to the current estimates of the loss of earnings from the war in Ukraine and material commodity cost increases due primarily to increases in energy costs.