Mondelez International has reported full-year net revenue of $28.72 billion (£21.48bn), an increase of 8 per cent from the previous year. Gross profits, on an adjusted basis, rose to $11.1bn, growing by 5.6 per cent.
However, the Cadbury and Oreo maker has seen its adjusted gross profit margin declining by 0.9 percentage points to 38.7 per cent. In the fourth quarter, when the chocolatier grappled with labor shortages and inflationary pressures, margin went down by two percentage points to 37.2 per cent. adjusted profit also declined in the fourth quarter, by 0.5 per cent to $2.84bn.
Packaged food makers have been struck by soaring shipping and labor expenses due to a strained supply chain, while surging demand for wheat, sugar and other commodities has driven up raw material costs, crimping margins across the sector.
Mondelez is also reeling from a six-week strike of about 1,000 workers at its US plants that took place in August, which coupled with elevated demand and persistent supply chain issues depleted the company’s inventories.
“We have entered 2022 with low stocks, and we are working to rebuild inventory levels, which takes time in this environment,” Mondelez Chief Financial Officer Luca Zaramella said on a call.
The company had stocked up on inventories ahead of the strike, helping it offset a revenue hit in the third quarter.
The food giant said it expects cost inflation to increase in high single digits compared with 2021. It also warned of an 8-cent hit to its full-year adjusted earnings per share from foreign currency translation, adding it would decrease net revenue growth by about 2.5 per cent.
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