Mondelez International, Inc.

Good day and welcome to the Mondelez International second quarter 2023 earnings conference call. Today's call is scheduled to last about one hour, including remarks by Mondelez management and the question and answer session. In order to ask a question, please press the star key followed by the number one 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 Van de Putt, 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 10Q and 8K filings for more details, 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 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 delivered strong broad-based top-line growth during the first half of the year. Our strong performance was driven by effective pricing combined with healthy volume growth in three of our four regions. Europe was the lone exception due to expected disruption driven by retailer negotiation. We continue to execute on our long-term strategy, and we see robust momentum and solid consumer confidence across geographies and categories. We successfully implemented our planned price increases in Europe, closing our customer negotiations in line with expectations. With this behind us, we feel good about the remainder of the years in Europe. We also feel good about continued consumer confidence. We continue to drive robust demand in our core categories across the vast majority of our businesses, resulting in both value and volume growth. Our strong profit dollar growth was driven by cost discipline and pricing to offset costs. We continue to invest in our brands, capabilities, and portfolio reshaping initiatives to accelerate and compound growth, and we remain confident that our proven strategy, delivered by our world-class team, positions us well to deliver another strong year. Based on the strength of our first-half performance and our latest view across businesses, we are raising our full year organic net revenue and adjusted EPS growth outlook to 12% plus. Turning to slide five, you can see that the first half of 2023 showed continued momentum across our entire business. We delivered first half organic net revenue growth of 2.7 billion, up nearly 18% versus prior year, and significantly ahead of our already strong 12% in full year 2022. This includes a 15.8% growth for the quarter. We also delivered adjusted gross profit dollar growth of more than $1 billion. Again, we're well ahead of last year's pace with 18.9% growth. We're proud of our team's continued focus and agility, which enable us to continue investing to drive further growth accelerations. our ANC investment is increasing 18% in the first half of the year. These results translated into strong adjusted OI growth of close to $600 million, up 23%, and again, well ahead of last year's pace. On slide six, you can see a few examples of our brand acceleration strategy in action. Our continued investment in creative asset, personalization at scale, and innovation combined with strong in-store execution, are resulting in continued sales growth and brand loyalty increases in our core categories of chocolate, biscuits, and baked snacks. For example, in China, we launched Oreo Airy Cake in March. Driven by the strength of the Oreo name as the world's favorite cookie, this new packaged cake already has achieved a 3.5% market share and 80% of the velocity of its leading competitor in large stores. And China is one of our most important emerging markets. This is just one example of numerous innovations to expand our key brands into adjacent spaces and formats. We're also continuing to renovate our recipes to stay a step ahead of changing consumer and customer tastes. For instance, we recently launched our first under 100 calories Cadbury treats for adults. This is a great example of our commitment to help consumers snack mindfully. We are offering a broader range of portion control packs and products, but also our portion control education campaigns, both digitally and on pack. In the baked snack segment, we continue to accelerate both top and bottom line performance in Clif Bar. We remain focused on improving service levels and supply chain efficiencies while further advancing productivity and effectiveness in our media spend and continuing to strengthen brand equity. We're also continuing to introduce new culturally relevant flavors to strengthen consumer loyalty for our local jewel brands. For example, Lacta has been a leader in Brazilian chocolate for over 110 years. Following the successful launch of Lacta tablets filled with Oreo, We recently rolled out two new line extensions filled with additional Lacta products that Brazilians already know and love. There's Sonio de Valsa bonbons made with chocolate and cashew nut filling, as well as Ouro Branco candies made with wafers filled with chocolate cream and covered in white chocolate. These are just a few examples of the innovative ways our teams are driving growth in our iconic chocolate, biscuit, and baked snack franchises, continuously investing in new formats, pack sizes, and flavor combinations that drive incrementality and encourage consumers to experience our brands in new ways. Within the baked snack segment, we're especially excited about our strong performance in the rapidly growing cakes and pastries space. Let's take a closer look on slide seven. Earlier, I mentioned the Oreo Airy Cake in China as a great example of our brand acceleration efforts in emerging markets. Similarly, in developed markets, we're making solid progress in expanding our successful cookie and chocolate franchises into Choco Bakery, cakes, and pastries. For instance, in the United States, Oreo Cakesters are continuing to perform well. Since the recent launch of this fan favorite, it already has earned a 3.7 share of packaged snacks cakes. Giving Go is another solid success story in our North America baked snacks lineup, where we're continuing to drive distribution and innovation. Share is up half a point year-to-date, driven by solid pricing execution, expansion into adjacencies such as mini donuts, and strong category demands. Meantime, in Europe, Seven Days continues to advance its position as the number one packaged croissant, and we have exciting plans to continue to grow its footprint beyond Europe, including recent test and learn trials in a number of emerging markets. Turning to slide eight, we continue to invest in digital commerce and revenue growth management tools and capabilities to support our brands while strengthening our partnerships with leading customers. I'm pleased to share that we have achieved the number one market share position in digital commerce in our top five markets of the United States, China, United Kingdom, France and Brazil, while over-delivering in up-and-coming emerging markets such as India, Philippines, Brazil, Mexico and Poland, which are up 40% year-to-date. We continue accelerating eB2B capabilities to expand distribution and strengthen our partnerships with key customers. Additionally, our increased investments in elevating RGM strategies and actions are driving strong value realization, helping to offset inflationary pressures. We have appointed dedicated RGM leadership and teams in all key markets, supported with new proprietary data and analytics assessments, digital tools, and a comprehensive training program. We are confident that these ongoing investments will deliver sustainable improvements in growth, efficiency, and ultimately margin. Along with our financial performance, I'm pleased to share that we continue to make significant progress in advancing our environmental, social, and governance strategy. In May, we published our annual Snacking Made Right report, reinforcing our 2025 goals, and documenting our latest performance in priority areas. These include sourcing key ingredients more sustainably, reducing carbon emissions, and increasing recyclable packaging. We are also improving performance in social impact and diversity, equity, and inclusion, both internally and in partnership with our suppliers, as well as helping consumers snack more mindfully through improved portion education and increased focus on single portion packs. We continue to believe that helping to drive positive change at scale across these important areas is an integral part of value creation with positive returns for all our stakeholders. We encourage you to read our Snacking Made Right report for more details and context on our progress. With that, I'll turn it over to Luca to share additional insights on our financials.