- Buoyed by strong growth in e-commerce, biscuits, chocolate and power brands, Mondelez International's net revenues and earnings posted solid results in the company's most recent quarterly earnings report. The Illinois-based snacking powerhouse reported $6.1 billion in revenues in its quarter — up 2.1% from a year ago — and nearly $12.9 billon so far in the year to date. That's an increase of 3.8% from last year.
- According to a short video displaying some of the earnings highlights, in terms of year to date organic net revenue for 2018, biscuits are up 4.3% to a total of $5.5 billion. Chocolate is up 4% to a total of $3.9 billion, from a year prior. Candy and gum posted more modest growth, up 0.6% to $1.8 billion.
- Slides presented with the presentation to investors on Wednesday evening showed 45% growth in e-commerce so far this year. On the earnings call, CEO Dirk Van de Put said he was glad to see such growth. "As I've said over the past eight months, the key to unlocking more value for our shareholders is based on two simple core concepts: putting the consumer at the center of everything we do and executing with excellence every day," he said, according to the call transcript.
Mondelez is in the midst of a massive company review, and Van de Put said both in the earnings release and the call transcript that there will be much to share about the direction the company is going when the results are shared in September. In the meantime, information in this earnings report was vague and results-oriented, with different statistics in different releases. While there doesn't seem to be any negative news in this report, the company's performance in specific products, brands and channels is a bit difficult to track down.
One of those areas that seemed to be glossed over is e-commerce. In 2015, Mondelez set an aggressive goal: increasing its e-commerce revenues from $100 million to $1 billion. While there was no specific reference to e-commerce in the report or in the earnings call transcript, the number in the slideshow speaks for itself. Earlier this year at the Consumer Analyst Group of New York conference, Van de Put said his company is on track to meet this goal. While the report doesn't reference revenues from the online channel, such a jump in growth indicates they are likely to be impressive.
Online channels provide a distinct opportunity for more sales of Mondelez's suite of "power brands," which are among the most popular in their segments. These include Oreo, Chips Ahoy, Ritz, Cadbury and Trident — well known and loved by consumers worldwide. Consumers online are likely to look for and recognize these brands and add them into their shopping carts as impulse purchases. In the latest quarter, the power brands truly lived up to their name, contributing $4.5 billion of the manufacturer's total revenue — almost 75%. In the earnings call, Van de Put noted these brands are doing well globally and are "clearly on trend."
Depending on how it is marketed and distributed, Mondelez's new acquisition Tate's Bake Shop could be joining the pantheon of power brands soon. Mondelez purchased the premium cookie brand for $500 million in May. Van de Put said on the earnings call that the new brand "expands our exposure to the fast growing premium cookie segment with an entrepreneurial theme that has created an authentic brand with truly delicious product." With the brand starting to appear in stores nationwide, consumers are getting a taste of the artisanal and more clean-label products. These give the company a deeper foothold in the cookie space, somewhere between Oreos and fresh bakery treats.
And although not part of the earnings report, Mondelez also stands to benefit from the recent Keurig Dr Pepper merger. Mondelez held a large amount of shares in a coffee brand owned by Keurig Green Mountain. After the merger, the snack manufacturer holds a 13.8% stake in the larger company, Van de Put said on the earnings call. This could give Mondelez keen insider knowledge if it ever wanted to pivot from snacks to drinks.
As Mondelez moves toward the future with comfortable growth, it remains to be seen what recommendations will be made in September. Van de Put hinted on the transcript that the company may use the analysis to divest the few brands it owns that are not "power brands."