Mondelez International, Inc.

Please stand by. Your program is about to begin. If you need assistance during your conference today, please press star zero. Good day and welcome to the Mondelez International First Quarter 2023 Earnings Conference Call. Today's call is scheduled to last about one hour, including remarks by Mondelez management and a question and answer session. In order to ask a question, please press the star key followed by the number 1 on your touchtone phone at any time during the call. I'd now like to turn the call over to Mr. Shep Dunlap, Vice President, Investor Relations for Mondelez. Please go ahead, sir.

Good afternoon, and thank you for joining us. With me today are Dirk Vandeput, our Chairman and CEO, and Luca Zaramella, our CFO. Earlier today, we sent out our press release and presentation slides, which are available on our website. During this call, we'll make forward-looking statements about the company's performance. These statements are based on how we see things today. Actual results may differ materially due to risks and uncertainties. Please refer to the cautionary statements and risk factors contained in our 10-K, Q, and 8-K filings for more details on our forward-looking statements. As we discuss our results today, unless noted as reported, we'll be referencing our non-GAAP financial measures, which adjust for certain items included in our GAAP results. In addition, we provide our 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 our Q1 2023 earnings release and at the back of the slide presentation. Today, Dirk will provide a business and strategy update, followed by a review of our financial results and outlook by LUCA. we will close with Q&A. I'll now turn the call over to Dirk.

Thanks, Shep, and thanks to everyone for joining the call today. I will start on slide four. I'm pleased to share that we are off to a record start in 2023 with very strong double-digit top-line growth in the first quarter, driven by effective pricing and ongoing volume growth. We continue to execute on our long-term strategy and we see robust momentum across geographies and categories. We delivered strong performance in both emerging and developed markets, and we successfully implemented circa 80% of our price increases in Europe. Our robust profit dollar growth was driven by volume leverage, cost discipline, and pricing to offset cost inflation. Our strategic decision to focus our portfolio on the attractive categories of chocolate, biscuits and baked snacks continues to bear fruit with consumers gravitating to those categories. We continue to invest in our brands, in our capabilities and our portfolio reshaping initiatives to accelerate and compound growth on both the top and bottom lines. We are confident that the strength of our brands, our proven strategy our continued investment, and especially our talented people position as well to deliver another strong year. Based on the strength of these Q1 results and our latest view across businesses, we are raising our revenue and adjusted earnings outlook to 10% plus for the year. Turning to slide five, you can see that the first quarter showed continued momentum across our entire business. Volume mix for the quarter was more than 3 percentage points, on pace with recent performance, demonstrating the continued strength and resiliency of our beloved brands and categories, even in an inflationary environment. We delivered organic net revenue growth of 1.5 billion versus prior year. At 19.4% growth, we delivered our best quarter ever, significantly ahead of our already strong 12% in full year 2022. We also delivered adjusted gross profit dollar growth of a half billion dollars. Again, we're well ahead of last year's pace with 18.2% growth. We're proud of our team's continued focus and agility, which enable us to continue investing to drive further growth acceleration with an ANC increase of 19% for the quarter. These results translated into strong adjusted OI growth of close to $300 million, up nearly 21% and again well ahead of last year's pace. We remain confident that our virtuous cycle of strong gross profit dollar growth, fueling local first commercial execution, increasing investment in our iconic brands, empowered by winning culture, will continue to consistently deliver attractive growth. On slide six, a few examples of our brand strategy in action. We continue to invest in our core categories of chocolate, biscuits, and baked snacks with strong creative assets, digital personalization at scale, new product launches, and great in-store execution. All this continues to strengthen our already strong brand loyalty. It is clear that we're playing in the right categories. With attractive growth in volume and dollars, combined with solid profitability characteristics. There is also significant headroom in both penetration and per capita consumption in developed and developing markets. We continue to expand the breadth and reach of our chocolate leadership in the attractive and growing Latin America region. For example, we recently launched our chocolate brand Milka into Colombia. Additionally, we launched two Milka ice cream products in Argentina in association with Froneri. We're excited about these opportunities to explore a new segment and reach more consumers while expanding one of our most iconic brands into a new consumption occasion. We hit another milestone in Binda Biscuits category as Chips Ahoy, a $1 billion brand, celebrates its 60th birthday. Our fifth largest brand globally, Chips Ahoy has delivered almost double-digit revenue growth annually since 2018, yielding positive results from our increased ANC spend during that time period. The brand's current key markets are the United States and China, where the business is on a $200 million run rate. But Chips Ahoy also has a sizable presence in Canada, Latin America, and Southeast Asia. We have exciting plans to further expand this franchise as we grow our leadership in both Core Biscuits and new Choco Bakery innovations around the world. Oreo continues to show strong momentum across markets as consumers continue to demonstrate that this iconic brand is truly the world's favorite cookie. Giving Go is a success story in our baked snacks line It grew strong double digits in Q1, driven by solid pricing execution, expansion into adjacency such as mini donuts, and strong category demand. These are just a few examples of our team's ongoing focus on delivering our growth and acceleration strategy as we continue to reinvest in and drive our very powerful brands. Now let's take a look at our chocolate strategy on slide seven. Tablets remain the centerpiece of our chocolate franchise. Mondelez accounts for more than one-third of this segment, more than three times the size of the number two player, and we continue to lead this segment year after year. 2023 is off to a very strong start, aided by the recent launch of our renovated Milka formulation, the creamiest, most tender Milka ever. combined with some strong local jewels. Our tablets business is up nearly half a point in market share, with particularly strong growth in Australia, Canada, Germany, and Brazil. We're also performing well in the incremental segments of seasonal and gifting chocolate products. We delivered a record selling for the Easter season across markets, with Milka celebrating its first ever Easter in Chile, Our Cadbury team executed another successful virtual Easter egg hunt, reaching more than 300,000 people in the United Kingdom, Ireland, and South Africa, making our seasonal products even more iconic. We also are growing in the premium chocolate space. For example, Toblerone volume is up more than 15% in Q1, fueled by its relaunch with updated on-trend positioning. We are further strengthening the Toblerone portfolio with additional offerings, including per liens and personalized gifting. Switching to slide 8. Solid execution against our integration playbook is delivering a strong start to the year for our recently acquired businesses. We are pleased that Cliff in Q1 posted double-digit revenue growth and grew profitability by more than 1,000 basis points. We're making strong operational improvements, focusing on enhancing service levels and improving supply chain efficiencies, and we successfully implemented two rounds of pricing. Additionally, we recently announced the consolidation of creative and advertising agencies under a single partner, which will accelerate productivity in our media spend while continuing to strengthen brand equity and loyalty. Similarly, our Ricolino business continues to demonstrate strong momentum in the fast-growing and strategically important Mexican market, and we are making solid progress on integration. Along with our financial performance, I'm pleased to share that we continue to make significant progress in our sustainability strategy. we firmly believe that helping to drive positive change at scale is an integral part of value creation with positive returns for all of our stakeholders. As you can see on slide nine, this quarter we announced the next chapter of Harmony, our European wheat sustainability program. With regenerative agriculture at its heart, this next chapter aims to mitigate climate change and reverse biodiversity losses while investing in research seeking to demonstrate that more sustainable wheat is also better quality meat. Created as the first program of its kind in 2008 with just a handful of farmers, the Harmony Program now collaborates with more than 1300 farmers across seven European countries. Our enhanced program will support these farmers in implementing a stronger charter of more sustainable farming practices, such as further diversifying crop rotation, protecting pollinators and other wildlife, and reducing pesticide use. Our goal is to grow 100% of the weed volume needed for our European biscuit production under our expanded Harmony Regenerative Charter by 2030. This is just one example of the way that we are fully integrating our sustainability agenda within our day-to-day business operations and growth strategy. I'm proud of Team Mondelez's continued progress in helping to make positive impact on critical environmental and social issues, while creating value for shareholders and other stakeholders. With that, I'll turn it over to Luca to share additional insights on our financials.