Business Context and Reporting Period
Company: Mondelez International, Inc.
Filing Type: Form 10-K (Annual Report)
Reporting Period: Fiscal year ended December 31, 2025
Business Overview: One of the world's largest snack companies, selling chocolate, biscuits, baked snacks, gum & candy, beverages, and cheese & grocery products in over 150 countries. Core brands include Oreo, Cadbury, Ritz, and Clif Bar. The company operates through four segments: Latin America, AMEA, Europe, and North America.
Key Financial Metrics
| Metric | 2025 | 2024 | Change |
|---|---|---|---|
| Net Revenues | $38.5 billion | $36.4 billion | +5.8% |
| Operating Income | $3.5 billion | $6.3 billion | -44.1% |
| Net Earnings (Attributable to Mondelez) | $2.5 billion | $4.6 billion | -46.8% |
| Diluted EPS | $1.89 | $3.42 | -44.7% |
| Adjusted EPS (Non-GAAP) | $2.92 | $3.35 | -12.8% |
| Operating Margin | 9.2% | 17.4% | -8.2 pp |
| Adjusted Operating Margin (Non-GAAP) | 13.2% | 16.2% | -3.0 pp |
| Operating Cash Flow | $4.5 billion | $4.9 billion | -8.1% |
| Total Debt | $21.2 billion | $17.7 billion | +19.8% |
| Cash and Cash Equivalents | $2.1 billion | $1.4 billion | +57.1% |
Material Changes vs. Prior Period
- Revenue Growth: Net revenues increased 5.8% driven by higher net pricing (+8.0%) and favorable currency-related items (+0.7%), partially offset by unfavorable volume/mix (-3.7%). Organic Net Revenue grew 4.3%.
- Profitability Decline: Operating income and Net Earnings dropped significantly (44% and 47% respectively). The primary driver was a $1.8 billion unfavorable year-over-year change in mark-to-market impacts from commodity and foreign currency derivatives (losses in 2025 vs. gains in 2024).
- Input Costs: Higher raw material costs, particularly cocoa, dairy, and packaging, increased operating costs. Management implemented pricing actions to mitigate these costs, which contributed to volume declines due to pricing elasticity.
- One-Time Items: The company recognized $336 million in pre-tax pension settlement losses related to buy-outs of U.S. and Canadian plans. Additionally, ERP System Implementation costs increased to $163 million.
- Investment Activity: The company sold its remaining stake in JDE Peet's in late 2024 and received a cash payment of $169 million in 2025 related to the Keurig Dr Pepper acquisition of JDE Peet's.
Guidance, Outlook, and Risks
- Outlook: Management expects cocoa costs to be lower in 2026 compared to 2025 but remains elevated relative to historical levels. Capital expenditures for 2026 are expected to be up to $1.5 billion, including ERP implementation costs.
- Strategic Priorities: Focus on accelerating consumer-centric growth, operational excellence, building a winning growth culture, and scaling sustainable snacking.
- Key Risks:
- Commodity Volatility: Soaring cocoa prices and supply constraints continue to pressure margins. Hedging strategies may not fully protect against cost increases.
- Geopolitical Uncertainty: Ongoing war in Ukraine and conflicts in the Middle East impact operations, supply chains, and currency volatility. Russia accounted for 3.7% of 2025 net revenues; Ukraine 0.4%.
- Trade and Tariffs: Higher U.S. tariffs on imported goods and retaliatory measures increase costs for finished products and inputs.
- Currency Fluctuations: Significant exposure to foreign exchange rates, particularly in emerging markets (Argentina, Turkey, Egypt, Nigeria) where highly inflationary accounting is applied.
- Consumer Demand: Pricing elasticity impacts have led to volume declines in Europe, Latin America, and AMEA, and soft consumption in North America.
Investor Verification Checklist
- Derivative Accounting: Verify the magnitude and nature of the $1.3 billion mark-to-market loss on derivatives and its impact on GAAP vs. Non-GAAP earnings.
- Cocoa Cost Trajectory: Assess the sustainability of current pricing strategies given the expectation of elevated cocoa costs in 2026 and potential volume erosion.
- Russia/Ukraine Exposure: Review the status of assets and operations in Russia and Ukraine, including potential impairment risks or deconsolidation scenarios.
- ERP Implementation: Monitor the $1.2 billion ERP System Implementation program for cost overruns and expected efficiency gains by 2028.
- Pension Obligations: Confirm the impact of recent pension plan buy-outs on future cash flow requirements and non-service income.
- Share Repurchases: Note the remaining $6.7 billion authorization under the $9.0 billion program approved in January 2025.