Mondelez’s 2022 revenue outlook has improved, but like others margins will be under pressure, says GlobalData

Following yesterday’s release of Mondelez’s figures for Q1, FY2022; Amira Freyer-Elgendy, consumer analyst at GlobalData, a leading data and analytics company, offers her view: “Mondelez has adjusted its 2022 forecasts based on mixed Q1 results, it is now expecting higher organic net revenue growth, but also predicting a lower adjusted Earnings Per Share (EPS) growth rate in light of reduced operating income margins. 2022 organic net revenue growth was estimated at +3%, but following a stronger Q1 of +8.6%, +4% is now expected.

“However, the forecast EPS growth has dropped from a high single-digit prediction to a mid-to-high single-digit estimation to reflect loss of earnings from the war in Ukraine and energy cost increases. This, alongside higher acquisition integration costs, has contributed to why across Q1 operating income decreased by $189 million and operating income margin dropped from 17.7% to 14.1 percent.

“A focus for the company was stepping up its presence in Latin America and specifically its key market Mexico Mondelez has announced that it will acquire Ricolino from Grupo Bimbo, Mexico’s leading confectionery company, doubling its business there and giving the company access to 2,100 direct store delivery routes reaching 440,000 traditional trade outlets. This is a strong addition to Mondelez’s portfolio that will expand its distribution network considerably. According to GlobalData, in 2020 Ricolino claimed 8.0% of Mexico’s confectionery market and would help grow Mondelez’s share in the country to 30% [Brand Insights Cube, Consumer Database]. The acquisition will result in rival Grupo Bimbo losing footing in the top 5 confectionery players ranking, and further cement Mondelez’s established top spot in Mexico.”