Mondelez International, Inc.

Please stand by, your program is about to begin. If you need assistance during the conference today, please press star zero. Good day and welcome to the Mondelez International fourth quarter 2024 and full year 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 touch-tone phone at any time during the call. I now like to turn the call over to Mr. Shep Dunlap, Senior 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 Zarumella, 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, 10-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 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 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.

Thank you, Shep, and thanks to everyone for joining the call today. I will start on slide four. I'm pleased to share that 2024 was another strong year for Mondelez. We delivered balanced top line growth, strong earnings, and robust free cash flow generation while returning significant capital back to shareholders. Our top line grew mid single digit with balanced performance across both developed and emerging markets. And we delivered positive volume mix in the second half of the year with improved share performance. Despite continuing input cost inflation, we achieved gross profit dollar growth in the mid single digits, driven by ongoing cost discipline and sound pricing. This allowed us to continue to increase our investments in brands, distribution, and organizational capabilities. We also continued our track record of strong free cash flow, generating 3.5 billion, which includes our settlement with the EU Commission. We also continue to prioritize capital return, delivering 4.7 billion to shareholders through buybacks and dividends. And as we transition into 2025, we remain focused on executing with excellence against our long-term growth strategy. We are confident that our chocolate playbook will enable us to successfully navigate unprecedented COCO cost inflation. and we'll share additional color later in today's call. Perhaps most importantly, I remain convinced that Team Mondelez represents the very best people in the consumer packaged goods business, and I'm proud of our team for staying focused and agile in a challenging operating environment. With the right strategy, the right brands, the right geographic footprint, and the right people, I'm confident that we continue to be solidly positioned for attractive long-term growth. Turning to slide five, you can see that 2024 was a strong year on both the top and bottom lines, despite the impact of COCO cost phasing in the fourth quarter. Luca will provide some additional perspectives on our COCO cost strategy in a few minutes. We delivered organic net revenue growth of 4.3% and adjusted gross profit dollar growth of 5.1% for the year. Our volume mix results demonstrate that consumers continue to prioritize our brands and our categories. It is important to underscore that we continued reinvesting in our brands to drive faster growth. Our high single-digit investment increase in ANC continues to strengthen consumer and customer loyalty to our brands. Adjusted EPS grew 13% on top of strong growth in the past several years, and we delivered free cash flow of $3.5 billion. We remain confident that our commitment to executing with excellence while reinvesting in our strong brands, capabilities, and talent will enable us to continue delivering attractive long-term value for our stakeholders. On slide six, you can see that our continued confidence is grounded in evidence of consumers' enduring preference for snacking. All over the world, snacks remain an important part of people's lives, at home, at work or school, and on the go. We're proud that consumers continue to prioritize our strong brands, even in challenging times. In North America, consumer confidence has improved slightly following the US election, despite continuing concern about the economic outlook. While biscuit category volume remained relatively flat over the last three months, private label continues to decline, demonstrating that consumers remain loyal to their favorite brands and that our price-packed architecture initiatives are showing promising signs. As a result, Oreo, Chips Ahoy, and Ritz all are regaining share. Meanwhile, in Europe, consumer confidence and also price elasticities remain stable, despite ongoing uncertainty in the economic and political environment. We continue to see solid category value growth in both biscuits and chocolate, and our brands are steadily gaining share following disruption during the first half of the year. Elasticities also remain stable in emerging markets, with solid consumer confidence in India, Brazil, and Mexico amid continued softness in China. Overall, we're seeing solid category growth in both volume and value across our combined emerging markets. And Mondelez's share is improving in both biscuits and chocolate. Turning to slide seven, we're continuing to make progress against our strategic growth agenda, reinvesting in our brands, expanding distribution, strengthening our capabilities, and continuing to transform our portfolio. Here are just a few highlights of our strategy in action. Our iconic global brands, including Oreo and Cadbury Dairy Milk, executed award-winning activations that resonated strongly with consumers, driving incremental lifts. For example, Oreo's Space Dunk campaign And our innovative global collaboration with Coca-Cola helped strengthen partnerships with key retailers around the world. Similarly, Cadbury's year-long celebration of its 200th anniversary delivered groundbreaking creative and strong return on investment. Looking ahead, we're excited about the potential of our just-announced Oreo partnership with Post Malone. which will hit US store shelves later this week. Capturing the current cultural vibe, this limited edition features our first ever twisted cream. Along with these creative brand reinvestments, we continue to expand distribution around the world, which includes a special focus on accelerating digital channels. Our e-commerce business grew double digits in 2024, and we continue investing in new capabilities to accelerate our leadership in digital snacking. In fact, our next-year markets grew approximately 35% in 2024 as a result of our continued investments. We are also making significant progress on growing our revenue growth management capabilities. we launched new fresh stacks during Q4 across our largest U.S. brands, including Oreo, Rich, and Chips Ahoy. These new offerings provide products our consumers love in smaller, whole, fresh packs at an attractive everyday price. And in chocolate, we are launching an array of pack sizes at several new price points around the world. Additionally, we continue to advance our portfolio reshaping strategy. In 2024, we purchased a majority stake in Evert, the leader in China's fast-growing frozen-to-chill baked snacks category. We have worked with Evert for several years to develop, manufacture, market, and sell cakes and pastries featuring some of our iconic brands, including Oreo and Philadelphia. Our expanded partnerships enabled us to further accelerate growth through continuous innovation, leveraging the combination of our high-value brands with Evert's advanced R&D and technical expertise. We also liquidated our investment in JDP speeds, providing another important source of funding for reinvestment that can be used to buy our stock, as well as further advancing our brands talents, and capabilities. On slide eight, along with our financial performance and strategic growth priorities, I'm pleased to share that we made significant progress towards our sustainability objectives in 2024. First, we continue to advance our leadership in more sustainably sourcing critical ingredients. About 90% of the cocoa volume used in our chocolate brands now is sourced through Cocoa Life, our signature cocoa sourcing program, which works to lift up the people and restore landscapes where cocoa is grown. We also made continued progress in helping to combat climate change. We reduced carbon emissions across our manufacturing operations by about 38% versus our baseline in 2018. Additionally, we continued advancing our light and right packaging strategy. Approximately 96% of our packaging is recyclable. We also continue investing in ways to empower consumers to make more mindful snacking choices that fit into their healthy, active lifestyles. Approximately 80% of our snacks revenue comes from mindful portion snacks. That is snacks that are packaged in individually wrapped mindful portion serving sizes or with clear mindful portion recommendations on the pack. These are just a few preliminary highlights of our continuing progress towards building a more sustainable snacking company. We continue to believe that helping to drive positive change at scale is an integral part of value creation with positive returns for our stakeholders. We encourage you to watch our annual snacking made right report, which will be published in April to view our full year sustainability data. Turning to slide nine, I'd like to reinforce our conviction that Mondelez remains well positioned to navigate through a very dynamic operating environment Like many other companies, we are closely tracking and planning around several near-term themes, including variations in consumer confidence, foreign exchange volatility, potential changes in trade policy, and pricing negotiations, all against the backdrop of record cocoa prices. By focusing on our strengths and controlling our controllables, we're confident that we have the right strategy the right execution, and the right people to effectively navigate these headwinds. Our teams have undertaken extensive planning since last spring for the challenges created by record COCO input costs. We have a clear and sound strategy to navigate these conditions, which Luca will describe in more detail in a few minutes. At the same time, our categories remain resilient. and consumers continue to prioritize our iconic snacking brands. We remain committed to reinvesting in our brands and capabilities to continue accelerating this momentum. We also continue to focus on expanding distribution opportunities in both developed and emerging markets. And our disciplined approach to capital allocation gives us confidence that we will continue to generate strong free cash flow. In conclusion, I'm pleased to reiterate that 2024 was another strong year and that we are well positioned to continue driving attractive growth. While the road ahead will not be without challenges, our team is at its best when we are united and clear about what we need to do. By continuing to double down on our attractive core categories of chocolate, biscuits, and baked snacks, investing in our widely loved brands, focusing on operational execution and cost discipline and empowering our great people. I am confident that we can deliver strong performance for years to come. With that, I'll turn it over to Luca to share additional insights on our financials.