Mondelēz: Strength in Emerging Markets Drove Organic Sales

Currency headwinds limited growth

Mondelēz (MDLZ) posted net revenues of $6.54 billion, which fell short of analysts’ estimate of $6.55 billion and decreased 3.4% on a YoY (year-over-year) basis. However, the base business remained strong, which was reflected through a 3.7% increase in organic sales. Mondelēz’s first-quarter organic sales benefited from 2.0% growth in pricing and a 1.7% increase in volumes.

A strong performance in emerging markets and sustained growth in developed markets supported Mondelēz’s organic sales growth.

Hershey (HSY) had impressive organic sales growth in the first quarter. Hershey’s organic sales increased 2.0% due to volumes growth and improved pricing. However, currency volatility took a toll on Hershey’s net sales growth. Other major food companies have reported strong net sales growth.

Mondelēz: Strength in Emerging Markets Drove Organic Sales

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Conagra Brands (CAG), General Mills (GIS), Campbell Soup (CPB), and J.M. Smucker (SJM) had strong net sales growth due to their recent acquisitions.

Mondelēz’s sales by region

Mondelēz’s organic sales rose 8.4% in emerging markets due to continued growth in India, China, Mexico, Russia, Southeast Asia, and Africa. Organic sales in developed markets rose 0.8% due to the continued growth in Europe and improved performance in North America.

The organic sales in Europe rose 2.7% despite tough YoY comparisons due to healthy volumes growth for chocolate, biscuits, and candy. Asia, Middle East, Africa recorded 6.1% growth in organic sales due to strong volumes growth (+5.0%) and higher pricing (1.1%). India had stellar double-digit growth, while the sales rose by the mid-single digits in China.

The organic sales in Latin America increased 8.4% due to growth in Argentina, Mexico, and Brazil. North America registered a 0.5% increase in organic sales due to higher pricing. However, declines in gum and Halls remained a drag.


Mondelēz reaffirmed its sales guidance. The company expects organic sales to mark 2%–3% growth in 2019 due to balanced growth in the volumes, mix, and pricing. However, currency headwinds are expected to hurt the net sales growth rate.