Mondelez International (Nasdaq: MDLZ) announced its first quarter 2025 financial results on April 29, 2025, delivering a performance aligned with expectations despite facing unprecedented cocoa cost inflation challenges. This report, based on the company’s official 8-K filing released the same day, uncovers key financial insights and strategic commentary that emphasize Mondelez’s resilience and operational agility in a volatile market environment.
Net Revenues: $9.31 billion in Q1 2025, rising marginally by 0.2% compared to Q1 2024.
Organic Net Revenue Growth: 3.1%, driven primarily by pricing increases despite a volume/mix decline of 3.5 percentage points.
Diluted EPS: \(0.31 (declined 70.2%) and Adjusted EPS at \)0.74 (down 18.3% on constant currency basis).
Cash Flow: Operating activities generated \(1.1 billion, with free cash flow at \)0.8 billion.
Return of Capital: $2.1 billion returned to shareholders through dividends and share repurchases.
The results reflect financial data for Q1 ending March 31, 2025. Geographically, net revenues in key regions varied: Latin America faced an 8.8% decline, Asia, Middle East & Africa rose 3.4%, Europe increased by 5.4%, and North America decreased by 4.1% on a reported basis. Organic revenue grew 3.9% in emerging markets and 2.6% in developed markets.
The gross profit for Q1 2025 plummeted by \(2.32 billion (48.8%) to \)2.43 billion, with gross margins shrinking 25 percentage points to 26.1%, mainly due to negative mark-to-market impacts from commodity and currency derivatives and increased raw material and transportation costs. Operating income declined 75.1%, reflecting a \(2.05 billion drop to \)680 million and an operating margin compression from 29.4% to 7.3% compared to Q1 2024.
In addition to inflationary pressures, the company cited costs from its ERP System Implementation program and volatile commodity/currency derivative impacts as primary drivers for the financial performance dip. Adjusted operating income decreased 19.6% at reported foreign exchange and 18.0% on a constant currency basis.
Despite the earnings and margin pressure, Mondelez returned $2.1 billion to its shareholders, underscoring its commitment to capital stewardship. The company reaffirmed its 2025 full-year outlook of approximately 5% organic net revenue growth and forecasted an adjusted EPS decline of about 10% on a constant currency basis, attributing the EPS pressure to cocoa cost inflation.
These challenges and focus on inflation, supply chain productivity, and strategic investment echo themes from Mondelez’s prior earnings calls, where management emphasized agility in pricing strategies and ongoing efficiency programs to combat cost inflation and sustain growth.
The decline in operating income margin from approximately 18.6% in FY 2024 to 7.3% in Q1 2025 (GAAP margin for Q1 was 7.3%) is a significant contraction, signaling material pressure on profitability.
Net debt increased by \(1.58 billion compared to December 31, 2024, reflecting \)19.54 billion total debt offset by $1.56 billion in cash and equivalents.
Mondelēz International’s Q1 2025 earnings showcase a company navigating complex macroeconomic pressures with strategic pricing and operational initiatives. While earnings and margins have taken a hit driven largely by commodity inflation, the company’s strong net revenues, cash flow generation, and shareholder returns highlight sustained resilience and a positive outlook for the year.
For full details and to review the original filing, access the official 8-K report here.
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