Mondelēz International results impacted by ongoing pandemic conditions
pic by Mike Mitchell
Mondelēz International has released its latest quarterly figures that have produced revenues of $5.9 billion, a dip of 2.5% which it attributed to unfavourable currency impacts, as well as ongoing uncertainty surrounding the coronavirus crisis, reports Neill Barston.
The global confectionery and snacks manufacturer’s gross profits were affected for the second quarter of 2020 standing at $2.3 billion, down 5.6% year-on-year, with its six-month figure for the year ending 30 June affected by a similar amount, with results of $4.8 billion, as the broader food and drink sector continues to mitigate against challenging covid-19 conditions.
As its results showed, Europe and the US remain the company’s two strongest international markets, followed by Latin America and Asia, Middle East and Africa – with the company remaining optimistic for renewed growth as it continues its response to a testing market environment.
The overall loss in net revenue for the quarter was offset to some degree by an improving picture in the US, recording revenues of $2.03 billion for the period, up 17% year-on-year, attributed to a wider trend for at-home snacking.
Earlier this year, the business withdrew its forecast for the remainder of the year on the basis of uncertainties surrounding the pandemic, with the business stating that its focus had been on maintaining the health and wellbeing of its employees, partners and consumers. This included notable releases in Germany and Austria for its Milka brand with its ‘cookie snax,’ as well as new launches within its Joyfills and Mikado chocolate product ranges.
This year, the company released its Snacking Made Right report, outlining its progress on major sustainability issues and encouraging responsible enjoyment of its chocolate and snacks ranges, which have continued to expand in its markets around the world.
As part of this, the business has focused a policy of reducing portion sizes as part of its key strategies – which has in turn prompted concerns over so-called ‘shrinkflation’ of product ranges. The issue has been a phenomenon observed widely across the confectionery and snacks markets over the past decade, with manufacturers often selecting it as an effective means of handling calorie, salt and sugar reduction over reformulation processes.
Dirk Van de Put, chairman and chief executive officer praised the efforts of the company’s staff in ensuring business continuity during testing conditions, believing that the company’s fortunes would improve as a result of collective efforts across the business.
He said: “We remain focused on the safety and well-being of our colleagues and communities at this time, while continuing to serve our customers in the exceptional circumstances caused by COVID-19. I am proud of how our teams have demonstrated their commitment to our customers and consumers by safely and efficiently maintaining business continuity. I am pleased with our second quarter performance given the challenging environment, with top-line performance driven by Developed Markets and strong share gains in all key markets. Our Emerging Markets performance improved throughout the quarter as store closures eased and consumers in many markets were increasingly able to access our products. While we expect continued volatility and uncertainty from COVID-19, I am confident that our strategy, investments, category fundamentals and execution will enable us to successfully navigate this crisis and emerge stronger.”