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Food giant Mondelez saw its sales in Europe drop in the second quarter, due to difficult negotiations with supermarkets. Not that the confectionery group will shed one tear over it: global net sales rose 17 % and forecasts for the second half of the year have been raised.
European dent in global star performance
Nothing can keep people away from their biscuits, not even sharply rising prices. Mondelez proved that once again with another strong quarter: worldwide net sales rose 17 % to 8.5 billion dollars (7.7 billion euros). However, the growth was almost entirely due to price increases averaging 15.8 %.
Volumes also rose in three of Mondelez’ four regions, but not in Europe: “as expected” there was a volume decline (- 4.3 %) in Europe following tough price negotiations with retailers, CEO Dirk Van de Put confirmed. At retailers such as Belgian Colruyt, Mondelez products disappeared from shelves for weeks at the beginning of May. Colruyt found the demanded price hikes “unjustifiable”, after which the manufacturer stopped deliveries. It was only in early June that an agreement was reached.
After the positive results for the start of the year, Mondelez is now raising its outlook for 2023. The FMCG giant said that “pricing is now 100 % certain” – as in: negotiations are behind us – and China is also proving to be another strong growth driver. Especially for Oreo and chewing gum, there is still a lot of potential in China. In the second half of the year, CFO Luca Zaramella expects both volume and turnover growth, while margins will also improve in Europe. Organic net sales are likely to grow more than 12 %, while net profit will fall about 2 %.
