Currency Impacts Hurt Mondelēz International Q1 Sales And Profits
Confectionery giant, Mondelēz International, saw its net revenues fall in the first quarter of 2019.
Net revenues declined 3.4%, driven by unfavourable currency impacts, while its Organic Net Revenue grew 3.7%, boosted by a balanced volume/mix and pricing.
The group’s gross profit fell by $256 million, and margin decreased 240 basis points to 39.7% due to the unfavourable year-over-year change in currency and commodity hedging activities.
On an adjusted basis, gross profit increased $121 million at constant currency, and margin increased 30 basis points to 39.7%, driven by operating leverage from volume growth, higher pricing and productivity, which was partially offset by input cost increases.
The group’s rate of growth in this quarter surpassed analysts expectations, as its Latin American business was boosted by higher pricing and increased demand for snacks and chocolates.
"Our strong start to the year demonstrates clear progress against our plans to accelerate volume-led growth by adopting a more consumer-centric and agile mindset,” said Dirk Van de Put, Chairman and CEO.
"We continue to see solid fundamentals in our categories and key markets, including good momentum in emerging markets.
“Our progress reinforces our confidence that the investments we are making behind our global and local brands, our sales capabilities and our innovation will deliver sustainable long-term growth and create value for our shareholders,” he concluded.
The company continues to expect Organic Net Revenue growth of between 2% and 3%, and an Adjusted EPS growth of 3% to 5% on a constant-currency basis.
It also added that it expects currency translation to negatively impact its net revenue growth by approximately 3%.
© 2019 Checkout – your source for the latest Irish retail news. Article by Aidan O’Sullivan. Click sign-up to subscribe to Checkout.