Mondelez International (MDLZ) 2 Nov 222022 Q3 Earnings call transcript

Good day, and welcome to the Mondelēz International Third Quarter 2022 Earnings Conference Call. Today's call is scheduled to last about one hour, including remarks by Mondelēz management and the question-and-answer session. [Operator Instructions] I'd now like to turn the call over to Mr. Shep Dunlap, Vice President, Investor Relations for Mondelēz. Sir, please go ahead.

for thanks and afternoon, joining us. Good today and CEO; me are CFO. Dirk Chairman our Put, de and Van With Luca our Zaramella, Earlier our our which out today, and we slides, presentation press are website. release on available sent

our During factors today. performance. on statements XX-Q company's details about to XX-K, These uncertainties. may results cautionary we'll contained differ this and see to are the things Please statements. filings risks make and call, X-K we statements for the our forward-looking on how in Actual based risk materially statements and due refer more forward-looking

As unless which be adjust we'll our our we measures, items referencing certain discuss in included results noted as for financial GAAP today, our non-GAAP results. reported,

currency otherwise addition, basis unless In our a provide we noted. year-over-year growth constant on

and provide the the back strategy business XXXX non-GAAP GAAP find within reconciliations can will QX of update, at results Luca comparable review the Dirk earnings a You and Today, our GAAP to financial release will and and outlook. then presentation. measures slide our

close will Dirk. turn the I'll with now to call over Q&A. We

top robust joining with upon investments strong foundation. EPS brands outlook. Thanks, happy ways start acceleration emerging profit continue our strong capabilities initiatives, share strategic call to execution, in increase in we year with another thanks I'm This capital. we supports everyone combined revenue and our should Reinvesting the deploy Shep, and reinforce growth line to and continued that in to of And Slide raising strength both adjusted our for pleased is developed our delivered we X. build that today. and the can our one growth to on I business quality say of best I and high continued markets am that will quarter and dollar growth. full

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Slide to Turning X.

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year revenue are We full 'XX to long-term growth. a well positioned and deliver strong performance

generated was profit, the continued of demonstrates quarter quarter to allowing quarter, inflation, which investments, cash as through virtuous gross revenue strong This after results. growth and us strong help year-to-date. drive X.X% A&C means well XX.X% our will for and the increase The brands. turn profit digit, repeating is growth investments which fueling sustainable our growth great The This growing pricing for is to is of our as year-to-date also growth gross to income delivering volume necessary growth growth line profit and high in top gross That for resilient revenue XX.X% demand XX.X% and our very XX.X%, growth because the the revenue it was year-to-date. cost ongoing operating free generated, single us strong while cycle. XX.X% which continue flow

We growth evidence year-to-date plan relative as can launch as the to in third consumers in pricing. we further of quarter We and incentives. that pay and to investment, growth we strategy increasing growth even consistently our you performance our quarters virtuous net and come. in navigate necessary our XXXX, as continues as Europe through the chain trusted Volume to on deliver long-term continue beloved brands volatility. continue shown strong and of net companies, the our in have through a supply driven a X, X, view crisis off. to of QX. on dynamic inflation, that targeted we in implement will cycle Slide continue this As Since new on confident Like over-delivered local remain revenue by many sectors see cost organic energy XX.X% growth choose the years attractive strategy delivered the to Slide revenue and much to operating we execution solid remained environment,

take of steps these dynamics the address to closer taking at and look are Let's each a we them.

areas appropriate inflation, To markets, cost price input oils. energy, key and elevated face we including wheat, have to these across continue Europe. the increases implemented packaging, transportation, of especially we edible First, in offset dairy challenges,

including announced preparing markets 'XX, are for across further Additionally, takes 'XX which States, we markets. pricing the numerous effect actions other in and negotiations we globe, have United December across the in

also continue with take our ongoing hedge to appropriate advance flexibility to continuing We commodity action while costs productivity greater our initiatives. to

impact. volatility continuity, through well manage energy Second, third U.S. we remain and of And a focused continuing and help especially shortage management at in to to sources alternative inflation capacity in to supply terms chain, in the continue the as we of party tools as due risk third, shortages mitigate containers. and the labor on trucking

key protect share and warehouse SKUs to continue and manufacturing prioritizing to capacity. in improving are make We progress

Turning our categories the on to and consumer X. Page

in brand other or our and in say to resilient. forms continues biscuits consumer emerging of to remains as prioritize confidence label continue continue in play of categories. of they much are brands strong categories affordable with remain our snacking continued in And to enduring majority to down they that over Shoppers result, to indulgences. spending, shows markets. either switch iconic likely Consumers and view demand biscuits loyalty research of Because in a less core markets our flat Meanwhile, lives. growing the for label developed a markets, role private compared as and categories to is consumers' share latest vast to our our groceries and chocolate continue Our central to private loyalty, brands. other this chocolate

to We're also in we U.S. the growth here products continued gifting and bars, for biscuit sizes, in Europe. treat return seeing are shapes in popular multipacks growth lunches chocolate seeing in the seasonal like school, With school

to European over more, home majority on navigate confidence with of the to they dining in and say less with and and to money say spend plan category gifting beloved at of like the to spend as not continue strength successfully plan amount we also inflationary on they Looking Christmas consumers These today. money trusted entertainment. spent more our us XXXX. will if holidays, They same the enduring season, the out dynamics brands combined give periods the that forward

our core acquisition categories on our strengthening integration we playbook. approach and of complemented in through that to Moving pleased by Slide I'm to are leadership divestment portfolio efforts our our share X. reshaping to around advance continuing strong strategy

growth by croissants the expanding packaged taste our More baked summer, us snacks. brand Clif platform We're up to recently, price These closed sustainability. and today, filling the our market. baked and focus market Company, and to double business on latest brand tiers. the a just to acquisition we more in loved And take to in closed our our & and routes bar accretive our growing provides great basis to This the Mexico's high-growth we attractive Ricolino, core Bar our segments accelerate us growth level. of further company, Chipita completed this business we year-to-date Over the confectionary expanding and across an for snacks than accelerate billion, sustained of high-growth categories, excited business on snack leading our European key spaces, leader algorithm our the high-priority Chipita, global in important in are focus we a biscuits of doubling presence allow $X tripling ongoing acquisition in size category. this the geographical integration confident presence and Mexican is in white will steps marquee to and the than widely our of to commitment drive our channels to are next anchored portfolio. more low digits just that the

Slide that committed As our positive we Life, cocoa growth, chapter scale. accelerate announced fourth remain part drive to the on our year, doing strong we delivered the our elevated to of Within have this see long-term earlier signature company's we Life launched strategy. sourcing that program. has Cocoa Cocoa investor recently next results. framework, our on at update XX change can continue already At become pillar of to this sustainability to our we focus you growth we

Cocoa helping past decade, d'Ivoire. in Life Côte bringing to billion of incomes their systemic $XXX face by about still the farming XX% But with XXX% Children XXXX. are deforestation communities increased total another we're about farmers we're practices. more aim optimal why educating prevent robust Over net by volume with to our challenges. investing our cocoa XX% farmer about remediation have through That's cocoa and Ghana source system, million, in to protected monitoring and $X farmers investments and an farmers better and big

the of impact, new excited promise these drive are to collective we private-public While greater we investments, efforts call collaborative to collaborations. for more including actions and about continue

and We are updated on cocoa keep our right, in we'll to helping progress. make of you proud our leadership

our for to share a updates before -- moment sorry, leadership take would Finally, financials, Luca more to to details to I over our I like some hand make on team. to

Chief continuous strategy, than Frank commitment supply of Chief Sandra recent drive chain First, years most Supply table. retirement. leading continued well-deserved well him He leadership it pursuing recently, doing to Sandra chain and to supply focus more and directly reporting like leader, global tackling right has improvement. shelf challenges her Officer, experience joining big contributions. excellence, of XXXX, XX assumed an I for would a and with for people-first Supply Mondelēz success. executional brought Chain strong MacQuillan, me. tremendous a Cervi Chain to thank our has our His field. unrelenting role within the in proven including, Frank to to roles to for chain Operations style her congratulate her bringing the Since position has Mondelēz, Officer, on is organization, from a We clarity supply

Hargrove, will R&D be and XXXX. Additionally, after successful our Officer, a Rob retiring January in career Chief research XX-year development,

leaders. transformed a with his Ramos accomplishments. him category R&D tenure Daniel X. from strong technically seasoned welcome of Rob's well-connected, Javier During advancing Polit, providing joins He team, Since leadership blend joining retirement, at our rigorous the company ago, With he our both us and enhanced piece activities initiatives of the Javier more executive as snacks his is reporting global commitment sustainable Chief dedication packaging With advance The with where and on directly is complex technology of We to consumer-centric will becoming had that, continue and focus the Officer, report oversight Daniel Luca. than our our One November Lauder strategic will function geographic Rob details years our for to and business news, a for years thank almost Chief a Information we years global Mondelēz expertise. over and three on Javier and XX infrastructure and elevated Digital Estée global innovation has Research hand I me to we Mondelēz, the more successfully now leadership R&D initiatives. to community. from a final many to Luca to levels. of serving Companies new our on digital financials. unit as Officer, effective Development

and you, Dirk, good afternoon, Thank everyone.

flow results strong were generation. profit revenue, cash dollar to third quarter from growth Our volume,

with a than from highlight In with addition, customer Volume/mix was revenue growth X.X%. disruptions nearly clear points net bottom markets categories X more more Emerging pricing volume/mix. of with for has which driven in Emerging volume/mix. trends Developed We related by the revenue than across points, of and markets of of resolved. down coming as top XX% were of X delivered growth markets result point to in X lines. quarter entirely since brands. grew on been quarter, a both grew and the growth broad-based broad-based negotiation, all XX% Europe was growth that

Turning performance to portfolio Slide on XX.

from North Emerging outstanding were grew and volume/mix, X.X mix markets digit, developed Cadbury Dairy double was Africa, grew points brands demonstrate fuel biscuit Europe. and among customer India Brazil, nearly both performed Milk, well. Biscuits all digit. & growth. more again chocolate Chips markets. albeit franchises digits. X%, robust that of we double East, all deliver to Candy and volume, gum of negative in Triscuit Toblerone, very with than exceptional X Ritz, results helped strong grew Lacta strong digit. Emerging markets more performance. grew resilience and the than Ahoy!, Gum Oreo, XX.X% Our as Bis Chocolate Middle coming Mexico, and candy in improvements double growth with were Western increased for deliver high from continue XX%. driven disruption mobility Club strong and by suffered emerging in and increases single their quarter, which posted grew markets ongoing while developed point while Social

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realizing growth good reducing the line enabler that to simplification. top our an profit and nonessential To this and efficiencies, digitizing are enterprise spend dollar we excellence in environment. overhead DNA and focus areas, and organic end, cost around important Although of driving make part continue progress key remains an

round grew Turning to Europe points XX. pricing negotiations during X the a regional on of entirely includes nearly volume/mix decline performance during quarter. to linked X.X% Slide disruptions This QX. of customer from

Importantly, planned. already of price I as implemented have we all said, the successfully virtually

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quarter currency. Next a nearly in significant to This on basis. QX and the headwinds, primarily XX. grew was gains. on dollars Slide driven X% And grew EPS constant despite by X% by EPS at operating growth we currency XX.X% year-to-date reported

it cash the This remain free the Year-to-date, originally and cash return repurchases of stock to we related cash generated to reflected XX. of generating employees non-vested in a on was to for acquisition expense $X.X ease million it flow. to $X.X has Clif We ownership relates onetime strong Slide of free This disclosed and the purchase us plan. billion, is shareholders buyout focused price, deemed flow. share flow employee but the enabled billion $XXX part Turning to including through as compensation, strong and dividends. performance have year-to-date

to Page outlook Turning our on XX.

consistent of and continue We positive attractive brand business within to categories, strong momentum position as see support execution. result the a in significant our

see categories than our resilient the being, time For to levels. are elasticities historical continue and lower

increase of now the strength through our overall performance in successful adjusted implementation which of free we the versus the Clif trends would indicate to our underlying versus of of quarters, the $XXX in our outlook XX%-plus to and organic Europe business, results. cash XX%-plus X revenue the full digit; the mid- for prior related outlook of demand pricing single billion-plus, expect, expenses year: X%-plus; high to and Given which includes our of million first health $X stronger EPS ease-up, of flow the previous net to grow

growth our markets. broad-based continue categories to We core and expect in

pricing, inflation. plan We to for cost a we and contribution also significant double-digit expect continue from

to reflect XXXX. in in spot coverage We round just continued XXXX positive impact pricing our the of have levels another current announced seizing inflation in U.S. of commodities and

a some significant with While is inflation broad has in our anticipated we on repercussions, a disruption despite European measures particularly energy, be materials. continues and both still levels, pack concluded to Energies concern other below EU-driven headwind. our successfully Europe, pricing with raw cost that

as Europe in we enter pricing of year. round another expect We next

of ForEx of our At to three up been have now Our of resilience quarters. current $X.XX factors in be included open would it year-on-year, dollars business. and that, outlook, levels already positive headwinds first for EPS this questions. our the With ForEx amount also $X.XX which EPS related in reported impact. outlook let's shows in

ready we're Operator, question. for the first

Operator?

Spillane comes Our Bryan Bank first of of question America. from

All world of around just Dirk, obviously, lot right. Great. a current current off, start there's Maybe we've affairs. -- our been just questions in events, to

So could affecting all in or not the markets consumer kind how just be of just is as-you-see-it-now of markets it some the little holding how of see as you your of bit the a union now? just and may give pressures us and key macro a the maybe up these state may -- you

you, have a consumers I the think yes. top really We strong to I Well, we categories, biscuits. very results, performance, testimony see that important would signs Yes, a Bryan. of continue first, the is chocolate say is our into on which to consume account. Thank to take line want which resilience to and

pricing now is growth, a that our through. highlight quite broad-based a that, volume coming well our of all we emerging strength all China doing today's have think with QX year-to-date We're India also unique markets. are but of really execution in in to Obviously, emerging I in top on you've Brazil. which world. is seen markets from the And to

margins And is little bit were our better, impact. Europe. some margins that have line bit. overall of in in Sales been affected ahead so have disruption been then sales disruptions and without our European has that customer and could by profit, little good, Our algorithm but bottom a better could also a Europe are impacted our customer there was

like will and bottom line view our top from increasing year we're what perspective. the a look So on a line

us. and is Europe complete particularly our pricing that Now behind in

yes, or in our showing EPS And -- real FX is but in we real dollars. are so impacting growth still growth

results would good. say I the overall, So are

very in beyond Southeast look even. I'm about see mean? that, sentiment perspective consumer a a So in talking what first if Asia, bit little markets does From very China solid, you emerging consumer India, positive. being the we place, that

there degree strength is almost And confidence is in in And a the so certain markets of pre-COVID the level. consumer emerging optimism. to us for

U.S. picture, expect we see course, as developed in know, that, Of the all said, middle markets, challenged very of as consumers relatively continue we our continue see Europe, a categories, In saying the something they we our more signs without. affordable more that mixed that chocolate and indulgence. see a to really I already all categories optimistic in strong or as buy. live We an is cannot see increasingly see to We consumers

seems that I see be the to believe eventually, that ticket big spending And keeps from decrease inflation overall so will be them, well, as to say. we we pretty going in probably items. hitting doing the would is more consumers Grocery

are also part that have Pricing, we is think of and in a role. fact Europe. we thinking, we've invest U.S., we where are December. benefiting round. beginning third that negotiations of the in for gone in our that a which I of typical stand course, year strong pricing, round the pricing our the announced effect year second just pricing in through to I starting XXXX played us We've results. we On will of think continue round the is That's from helping brands in significantly. our take of in And Europe our this quite pricing which we

cases, America fragmented, to we it in and round. is our also but we're relates AMEA, pricing implement most pricing As Latin third the that in more

it far, round. this will that like pricing so well, And go new looks

have but we cost we're go far, seen some higher from And to quite be effects still because commodities happens maybe disruption effect, Of are have that. a bigger is perspective, last that it expect an hence, certainly the would elasticity it expectations. but elasticity will forecast, was of showing see pricing. to lower there the the In the of back so we pricing pre our more rounds below in perspective, lower foreseeing seeing as that, that beginning a I It believe was through. where 'XX say in COVID. eventually, significant year customer course, signs in year inflation we we and expect announce we remains Europe, not pulling we what even, we than From then than we've

think 'XX. very we're positioned for well I

the We light price of inflation. have to to in continue

implement course, volatility before, see to know think continue We in And growth net will as QX said And will we as increase growth revenue I focus we little drive I our in some on invest can consumer instead everybody's volume on we they that that Europe choosing that might maybe of growth. to to it's what we a spending go bit continue on What pricing. items. and, to RGM, useful I we They spending. and do I there, management. revenue of is it be other grocery because to the be seem relates prioritize deeper so. European discretionary mind seeing see to are as

entertainment we see restaurants, goods. decrease household and the in in So personal not in in a in leisure, in out, clothing, in clear in eating decreases food and Europe care, travel, That's not our where categories. we see but

consumer the cannot months is instance, We effect So all energy for And positive, desired. even because they down relatively aware is situation see, of them. consumers Germany concerned are to situation consumers there their the higher, is XX% road, situation. of for Europe. the highly in the we more it's things lower the the is current Chocolate will or rough. in believe price without. and understand they also and which saying with be snack XX%, that that the are see in six They're going live be is that very better. understandable more is But UK express that current signs sentiment France,

disruption. is And hope I saw, you our optimistic on term from keep idea, includes, concern, some which consumers, client the Bryan. and which you so numbers categories, this that I short as would an I said gives in buying say, they before, reflected relatively

My Lazar Andrew. we Barclays. the apologies, next, of Andrew And move line to with Instructions] [Operator

you JPMorgan. could move If to with we'll resignal, next Ken

And recognize to kind specific in discuss hoping maybe I and I'm early year in people these numbers. think are missing looking anticipate I sense. full and too at to see a some wouldn't next a review of But big. of tailwinds it's any was and headwinds lot I anything broad some I of if

pricing. tailwind on new wraparound pricing So have side, you'll the plus

You on underlying volumes demand. good should organic have still

then have course, terms right? advertising regulations it expense still And acquisitions, inflation lower percent will pricing 'XX, Maybe in less interest Europe less from wade bit You'll some line benefits you'll then, the but some you and higher have Asia, of be the headwinds, macro in uncertainty little again. UK. strong of than still new then in maybe basis. dollar And on to And top a a have FX, have the through. income. pension same and you'll

through you anything of but I'm in these put So that pretty kind major quick I on that out I incorrect spot, kind missing know I'm that's or quickly. stand don't all running list the getting mean of to does there?

Yes. Maybe the only not Ken, the to cost think And Clif. of that synergies I equation, are will acquisitions I synergy Chipita, thing through add line. that and you would they synergies, those fruition only better also the and Ricolino X are to come is revenue as bottom mentioned,

of are XXXX, revenue I next way good for demand in is in point year. about place we think this we believe think demand that still terms in general, and the at it consumer fundamentals are strong, a we and

categories. in just have through the have we've compete we loyalty And created As been we said, making strong resilient our in we brands. investments

regions, are as emerging markets doing importantly, dissect think you the I well. very

et it at particularly simply is headroom volume still value the that it important in here of have on and bit cakes of pastries say growth quite and And revenue cetera. looking I mention like XX%-plus, of think in amazing. is terms and we the not categories the a quarter, to distribution to penetration of this, our number, X% categories

are And U.S., I round a to we year. we next think pricing. said, going we mentioned implement that terms a trajectory. see share good I of it in another of the into trajectory little the bit about as on is

brands what a customers in investing been there I the importantly, is happens We'll mark QX. But there think in little inevitable. question bit Europe with but is we have as see well. pricing

bonds creating these been we I And are with still have said, think believe tough a our We categories times. as we necessity consumers.

year, let's at all, it frankly, give algorithm in are I you bit premature but stay all we an to So in for tuned a little quite to XXXX. because is have guidance think point going this time

go Barclays. with the to line of Andrew can Lazar we Next,

markets really remain can off, the little just on picking couple and sort and volatile commentary. of bit there the a Obviously, And how of go be. given Maybe just I've then detail into markets key of follow-up. market results into can or than emerging Maybe got some on forecast? largest many standout thinking of you to quick kind get about more surmised what and had you these a look the just a how emerging start up probably better forecast, as you're the building how those you're just forward

Look, I emerging I and beyond performance. can would And bit And quarters, a Yes, little When think emerging here. pre-XXXX or the pre think been reality has the last take chime around. market all in in also maybe pleased look we with that all we COVID bounced strong say I -- it markets. very accelerated Dirk quite COVID. pretty those very that for I'll back has well is performance much versus from and markets are three

have consistently and is We investing been off. paying that

delivering the and dollar We I They quite flow for bottom that you of emerging are importantly, growth. to line are can dollar all delivering they not are markets, cash P&Ls generating growth, top reported bit is for line us. and privy but top what tell a

believe, and that I we still time. at that I like Southeast particularly be Milka, very positively return continue capital beyond And a -- suspects like markets surprised to market We will this pleased cetera. from with Cadbury, have usual So Oreo, I is to with also do are by Look, et headrooms, markets we think really brands is Asia of China, et going India, like are well, the something remarkable. those continue this forward. be believe will in we cetera, point huge very,

markets are pleased We with particularly Brazil. like

bottom solid do those to and continue generate in top line markets. very and very, well We

I from importantly, But COVID, Candy. these region Andean think through pre is light particularly is amazing. which of the & markets which Gum all bouncing is Western of WACAM, back just the Oreo, motive performance

pretty market So quite I out It would I all, one them is can't well. say think all call all in much I doing here. of specific

what you let's of of, you year. the Would we a yourself to the the some much looking talked you're in lot in incremental sort of you've you've enter And brace start that what's have to ourselves to year? at of Or right, year of should next better say, and maybe next about of type place for pricing in being lag you be lag coming consistent the before that a try then a moves, or really made fully new cost where the catch anticipate point that there for all the wouldn't position pricing point in this year? we such for are inflation getting would incremental process making again to need of -- as up of the

than reality more XX%, pricing been taken already Look, than -- or for half is more has announced.

Obviously, a and as for done. as we have of matter XX% for coming carryover of December, think so pricing to said, And add announced more that XX%. than of next as will being pricing is you U.S. to year, about the the there

the particularly, to think lag a a is I energy are because would assumption I general, is have compared necessity now. distinction bit pricing Europe, little think, reality of in make correct. And Europe. X your right a absolutely of I will costs only The

so on some and customer going potentially see Europe And potential disruption compound that. in pressure will margin you're QX in to

think the you I for rest, correct. are

Next, Moskow Robert we line to the go Credit Suisse. of with

also Or higher? or to more trying product? the focus you some Could of you just specific through inflation, I U.S. a logics still increase the as are no then this rolling that? like you you on costs you are components have of it logic that can color over elements are and the of hoping kind Are little taking does Are taking rising longer price commodity for the it And third the more energy? of could the costs? packaging of knock-on your protect hedges labor in to was be because you round price also, because into give

assumption Your right. It's is said. everything a combination you of

So the be our commodity approach trying to we to is packaging, perspective, a we pricing which could labor, transportation, see every are additional price that year, away. from costs

hedges do coming we number that So have are a of off.

go from down right benefit opinion, hedging but we need still careful year next to that. can our hedge don't -- could way We are ways. it or go both careful Prices that, on commodity and We costs come we for because that want that against to up. could, the cost to could also be the

been announced of you answer round all of it's And so news pricing about The clients. the third said, by it's the the accepted it's what above. and U.S. been to short the the good in is that

price will seen strong. reacts, is major the very impact still two We and the so on consumer previous see but a not on so how penetration have far, we and increases, offtake all growth consumer frequency, and volume

unless through. will good something in we should cost this our be happens okay picture. increase go then So And have confidence we that price

Next, we Chris Growe Stifel. to go with

had questions I you. a of couple just for

around volume some would I one It around, you... to in better consider. and pricing you've perhaps Would just first a more wanted like some others obviously, in understand America. sounds just little to The North those factors as that given commentary be performance Europe.

Hello?

Mr. apologies. Dickerson. My

to with we Next, Mr. Jefferies. move Dickerson

Maybe C-level to heard lot promotional for as of increase benign, stays increase, managers increase we Obviously, to still going basis of you as time just don't a saw QX. we low see you, lot same now people broader as a think in hearing of promotional because question a but the from around food a side A&C. companies, I've CPG companies need Dirk, well price activities on need actually while say elasticity kind keep at

brands. to behind You invest really continue your obviously

quick, some even guess needs, kind forward, say, it. operational mimic rate go-forward I current out That's the One just of is year-over-year that let's there be years on come of the we of needs year-over-year is of have promotional go we growth competitive Or that the years as may of kind especially two, So the perspective rate then with question. three A&C as of leverage kind of could the recent acquisitions? should spend that two-part of or with what's And kind almost two thinking that? could revenue some that of you spend backdrop?

see is a label, Well, that our really consumer private we that bit in want trust Yes. coming make say I reflection this has think effects much it's sure need we consume our our on into quite the little where can see keep is because is we've substantially, in private spending in clearly And we can year not us movement in much the spending. increasing current to of label, brand. market after to in from them. -- from have a there And I the our it for important A&C not of increase to overall, We there's so increasing prices movement would year that although to had. the the and that where now environment our spending that brands

in particularly I particularly we're seeing don't we're we us, line, acceleration going that that our forward, working seeing our since volume anticipate top to we're Going since an would say for really formula. change

we that would our think is about way grow at we I quite We this the gross change. is the of and investing line. into back that in I necessarily the and bottom in will X an And want quarter half flow to this. know You business half for don't accelerating. business working But percentage. think say. us profit the strong, then of It's that

because do to in as relates to cost But line obviously, next some quite might have results. investments. And have investment will of they we we good that brands year it the potential, but feel the have top significant which As foreseen, show of synergies. have some we a Luca synergies, start in we some up acquisitions, need our also the said, acquisitions,

rest business. constant Will, our same lead will we to about going over a time, to we it to the still as we're lead acquisitions are using advertising measurement, will as increasing sufficiency? That the volume, increased use to advertising So growth. is relates formula revenue increased net shows which of on the that do

this us. And the that as confirm we we can right long track feel so that as for picture, is

keep But We as case reason to it's stage, think not I this soon that see change would working. don't that, it. we Obviously, A&C. a is on at would As see the we not anymore. increasing our

the to Stifel. return We of Growe with Chris line

Okay.

got I'm You question, you off. me me that didn't you if like didn't to Yes, kidding. cut have now. only

quarter just -- in So some in expect to the understand like with going little of just coming with fourth gross Europe. a we therefore, pricing America, North cost margin about and Should balance it more pricing a ask I pricing sounds volume and -- price inflation better improvement? to was and performance the sequential margin gross in better more

of a you around don't that guidance of it are matter I is growth about in gross to much profit Look, fact, we But that we there margin. think we going to commit have is dollars think terms the as and way give deliver. gross to

particularly and Latin the going you're our not pricing see there a U.S., in do coming percentage, is that Europe, on, neglect Obviously, about ground. are but think of I way. America around I you As AMEA gross margin particularly, think the necessarily benefit energy, costs believe, the fact solid to more

year, visibility. in terms the Now we ForEx, for have so of commodities covered and are XXX% we

margin I to strong you're pressure bit still partly see But see going you're and line. see growth, think going little importantly, the QX. flowing bottom going to to you're in a of dollar to that

way. you as think about coming about Clif, synergies some particularly our and be to said, Chipita will continue I if invest. will think And there you as We

other a terms just question product thing? understand, your you're Or seeing of trade want that being bit down of something of assortment, that comment one drag. pack sizes, Any mix? just geographic is And kind mix -- Okay. of I SKUs? smaller on kind there or to a was a in about is that your

is that mix think Europe problem. reason concerning. I don't but of is What it was caused I of is customer as a the it No, that was anything And relates that little partially up volume that for biscuits said because volume/mix disruption to bit in down. the

were impacted by product other those in and more and around than there world, the lines, So profitable others mostly were that France customer disruption. are particularly places,

a obviously, little of disruption customer terms also We in that is margins we costs. bit have because to fixed still have higher realize

the likely benefit is most about of through. seeing the a start is the or will really biscuit of little we U.S., to coming so But marginal in nothing And concern. is consistently contribution as see to mix I bit a higher. going anything else. worry think more volume lines down-trading not And those mix there growing you're But

go we the Morgan of Kaufman Next, Stanley. Pamela with line to

sales XX% growth your compared growth to XX% So over full organic implies that high organic year-to-date. single-digit guidance to growth least sales year QX for slows at

So make conservatism outlook? changes degree And that the how operating about trends? think seen your more we near-term you the cautious in the you in should of about have any backdrop

there a in mean, is growth QX I implied there. plus right, X%-plus, importantly, but obviously. your is The math is

So more end implement don't about X%, we want is side, on the is what are that to might have. stock to by good be want actions a stock. more than obviously and we the impacted to might on position. trade We of have we the retailers trade pricing is which Reality something particularly year, we

EPS, the will we And might will and call so we bit feel try on comfortable in the is XX%-plus of which of in place But end quite guidance, you year us sure might be current into that that upside. little we to there light see. right think revenue XXXX. is a conservative I and both Reality make we the

capacity the on drivers Great. inventory Where about the some shortages? for can share And you your capacity improvement in improvement of you expectations and where levels U.S.? are of market then earlier the talk in rebuilding market constraints saw you share brands on

Yes.

So already as we month, market seen in said gains. share we've the last

overall good That We industry market headwinds expect into and we a is tailwind helping. share-wise moderating. are to XXXX. that continue The expect

are challenges little Mexico. have third-party of on But transportation manufacturers the from with quite bit Still we're logistic within So well. The time having doing an easing, cross-border our is labor issues that. U.S., improved. easier a market so

high plant. would a in good we still are staffing be but at And to so the is say I turnover continuing

sort service a in that improved of our so SKUs, focusing single of and quarter. have now of sure factories, all the changes SKUs key us month doing longer every runs consequence have number As that of our on the on, making we consistently levels in and a

now already brands levels we have September, investment of our high offtake. are about top, the consequence the but continuing to here little going improving. out that going inventory significantly of increase our because A&C far, so well the brag chain increase, back to growth territory. now. I We, investments. recovery clearly price of issues. XXs, stocks, those and are show our that fourth accompany nothing share But less So is that share had as expect we're we're on-shelf quite up QX a was On in biscuits step U.S. recover, in is we in bit share to The we held and back In in in of the accelerate positive biscuit supply availability to starts the so will said, because trade to to that in consumer our Most quarter up, now

will good we 'XX that a So the expect with we enter momentum in U.S.

Our with final Mizuho. Baumgartner John line of question comes from for today the

breakdown then then emerging investments, local more jewels, change How should markets And any we those it's vol/mix? the and I just contributions the drivers whether the I expect from specifically COVID back to balance speak Can wanted you regaining to vol/mix contributors but going to a to between bit come also the there. specific just from to growth, your you forward? the order to distribution the consumption? innovation, the guess share. would recovery of rank of just component growth underlying

Yes.

I two the very in in sense we of have a investment brands. mixture our strong it's that So think the

the growth. about robust leading consumer to this We year, are confident year I'm inflationary to have consumer our more that And RGM. talking also environment. constantly, about used volume to a and and but markets, an also is in with pricing emerging teams They after deal

I very would growth, So say. that volume is to robust leading

is volume extraordinary. in Our QX up is X%, quite which

is increasing also say I thing an benefit. we our other are would The is added which that distribution,

If distribution of year our India, stores that helps. adding every through you China and obviously thousands think tens of we're literally about or

Oreo, route that The Oreo's we are so now very the And big in more investing the -- us a good from we're bit instance, are strength little fact that becoming these the see to Mexico, some we that, we Ricolino of results from strong for Oreo in to our I board expect effects across mention markets. third where and we for seeing in market. thing and would is tripling

will So play start a also. role that to

consumer, of would investment, confident say of RGM. careful a very I good management So it's combination

the but combining increases in careful what's very is price across-the-board gains. distribution it us. That emerging that doing playing countries, for with not are good We strength different in markets leading to

for participation. does your thank This today's you program. conclude We

You any may disconnect time. your lines at