DEERFIELD, ILL. — Having scored solid growth in 2019, executives of Mondelez International, Inc. expressed confidence the company is poised for sustainable growth in 2020 and beyond. The company’s North American division was a strong contributor to results last year.
Mondelez net income in the year ended Dec. 31, 2019, was $3,870 million, equal to $2.68 per share on the common stock, up 14% from $3,381 million, or $2.30 per share, in 2018. Sales were $25,868 million, essentially flat (down 0.3%) from $25,938 million the year before. Adjusted earnings per share were $2.47, up 8%. Sales growth was impeded by currency value swings, with the company’s organic net revenue growth during the year at 4.1%.
Investors were impressed by the Mondelez financial results and outlook. In early trading on the New York Stock Exchange Jan. 30, Mondelez shares surged $3.44 a share, or 6%, to $58.
Among major 2019 strategic initiatives highlighted by the company in its earnings announcements was its “global brands and local jewels” focus. Mondelez said global brands that already were strong enjoyed accelerated growth while the local jewels growth rates have been moved to “close to category levels.”
Offering guidance for 2020, Mondelez said the company’s financial performance is expected to fall in line with long-term growth objectives, including 3% or higher organic net revenue growth and a high-single-digit earnings-per-share growth percentage.
Offering insights into underlying assumptions regarding the guidance, Luca Zaramella, executive vice-president and chief financial officer, said the sales growth assumes overall 3% growth in the categories in which Mondelez operates with the company gaining some market share and with revenue also benefiting from higher pricing.
The company’s North American business was not a drag on Mondelez results in 2019, though company executives expressed opportunities for improvement in the future.
“Developed markets showed robust growth, with both Europe and North America performing well, delivering share gains and driving category growth,” said Dirk Van de Put, chief executive officer.
He said the North America supply chain, which had created challenges for the company in the past, “definitely showed significant improvement” in 2019.
Operating income in North America totaled $1,484 million in 2019, up 6% from $1,397 million in 2018. Net revenues were $7,108 million, up 3.2% from $6,885 million.
“North America grew 2.2% for the full year and more than 3% in Q4, driven by improved volumes,” Mr. Zaramella said. “We closed the year well and delivered strong share results in biscuit with growth in a number of key brands, including Oreo, Ritz and belVita.”
Other results cited by Mr. Zaramella shed positive light on the U.S. market. He said the company’s snacking businesses are growing, with total growth in 2019 of 3.6%.
The biscuit success in the United States was driven by improved execution on marketing and at point of sale. Also in the U.S. biscuit business, Mondelez drove “both value and volume growth through D.S.D.,” Mr. Zaramella said.