Foodservice

Mondelez International posts Q4 2020 sales, earnings gains despite COVID-19

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January 29, 2021

Mondelez International reported 5.6% revenue growth from $6.91 billion in 2019's fourth quarter to $7.29 billion for the quarter ending Dec. 31, 2020, driven by organic net revenue growth of 3.2% and incremental sales from the company's acquisition of sweet goods provider Give & Go, according to an earnings report.

Volume and pricing drove organic net revenue growth in all four geographic regions — North America, Latin America, Europe and Asia/Middle East/Africa.

Organic net sales were in line with market expectations, according to Seeking Alpha, while operating margin at 16.3% of sales beat market expectations of 16.1%. Shares traded at $57.12 Thursday against a 52-week range of $40.99-$58.61.

"Our categories were resilient, with the exception of gum which represented 5% of our revenue in 2020," Dirk Van de Put, chairman and CEO, said in the release. "We moved quickly to mitigate incremental COVID related costs and delivered on our commitment to generate strong cash flow."

Operating income in the fourth quarter increased 26.8% ($243 million) to $1.149 million over 2019's fourth quarter and operating income margin was 15.7%, up 260 basis points primarily due to favorable change from the resolution of tax matters (a benefit in 2020 as compared to an expense in 2019), higher adjusted operating income, favorable year-over-year mark-to-market gains from currency and commodity derivatives and lower restructuring expenses.

Diluted EPS rose 60% from 50 cents in Q4 2019 to 80 cents, primarily due to a net gain on equity method transactions.

Adjusted earnings per share rose 8.2% on a constant currency basis to 67 cents, primarily driven by operating gains, favorable income taxes and higher equity investment net earnings.

Gross profit climbed 4.1% from $2.75 billion in Q4 2019 to $2.87 billion driven by higher adjusted gross profit and higher mark-to-market gains from currency and commodity derivatives.

The company returned $1.1 billion to shareholders in cash dividends and share repurchases, and resumed its share repurchase program in November after suspending it in March to provide flexibility while managing the COVID-19 situation and response.

For 2021, the company expects performance in line with its long-term growth algorithm of more than 3% organic net revenue growth, high single-digit percent adjusted EPS growth on a constant currency basis and free cash flow of more than $3 billion.

Guidance is provided in the context of greater than usual volatility as a result of COVID-19.

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