Mondelez International, Inc.

Good day and welcome to the Mondelez International 2025 Second Quarter Earnings Question and Answer Session. Your lines have been placed on listen only until it's your turn to ask a question. In order to ask a question, please press the star key followed by the number one on your touchtone phone at any time. To remove yourself from the queue, press the star and two keys. On today's call are Dirk van der Putt, Chairman and CEO, Luca Zaramella, CFO, and Shep Dunlap, SVP of Investor Relations. Earlier this afternoon, the company posted a press release and prepared remarks, both of which are available on its website. During this call, the company will make forward-looking statements about performance. These statements are based on how the company sees things today. Actual results may differ materially due to the risks and uncertainties. Please refer to the cautionary statements and risk factors contained in the company's 10-K, 10-Q, and 8-K filings for more details on forward-looking statements. As the company discusses results today, unless noted as reported, it will be referencing non-GAAP financial measures, which adjust for certain items included in the company's GAAP results. In addition, the company provides year-over-year growth on a constant currency basis unless otherwise noted. You can find the comparable gap measures and gap to non-gap reconciliation within the company's earnings release at the back of the slide presentation. We will now move to our first question. Our first question comes from Andrew Lazar with Barclays. Your line is now open. Please go ahead.

Great. Thanks very much, and thanks also for putting out the prepared remarks this time around. Very helpful. Dirk, it'd be great if maybe you could do a brief walkthrough of the key geographies and how you see it all playing out in the second half. And then Luca, given the additional weakness in North America, what incremental actions can the company take, whether they be on the cost side or maybe more importantly on the demand driving side, to accelerate growth there, even in the context of a weaker category? Thanks so much.

Thanks, Andrew. Yeah, maybe quickly. Overall, we think the The Q2 results are quite good. We had some good pricing. If you discount for the downsizing, we're flattish as it relates to volume mix. And our bottom line is slightly better than expected. I think what also is clear is that we have very good global balance in the sense that we see a continued weakness in North America. But we had a strong quarter in the rest of the world. And since our sales are well balanced between the different continents, that really helps us. The other one that's important for us is that chocolate and the significant pricing increases and RGM actions that we've done are playing out in line with expectations. So that's good. Our categories are showing continued strength. And we are maintaining our full year outlook. So overall, we feel good about the quarter. If I go a little bit around the world, maybe starting in Europe, a good quarter in Europe with good numbers, strong share gains. Clearly, the business is very resilient. The consumer is more confident in Europe, still quite fragile. and frugal spending, but snacking continues to outpace food. And overall, I would say we feel pretty good about our European business. Consumers are not exactly bullish, and they're focused on essentials, but they keep on buying our category, even despite the significant price increases that we had to do in chocolate. If I go to the U.S., A little bit more of a difficult situation there. There's a lot of consumer anxiety. They look at a quite uncertain outlook as it relates to their personal finances, job expectations, inflation. So they tend to focus more on essential items. The size of the basket is getting very important. Absolute price point. There's channel shifting going on. There's more promotions and some pack shifting, too. So overall, we see a pretty soft biscuits category, probably performing a little bit better than other snacking categories with holding share. But overall, the volume is declining. Switching to the emerging markets, we feel very good, double-digit growth. We have a sustained volume and volume growth. very good share gains in Brazil, in India, in Mexico. Consumer confidence is softer in these markets. They are worried about their personal finances, job security, inflation. So we see the same channel shifts, mainly into bulk and discount in places like China. We also see the fact shift. But emerging markets continue to be an attractive growth engine for us. And if you look at our four major markets, We feel good about China, India, Brazil. Mexico has been softer. But overall, I would say clearly a strength in this quarter in emerging markets.