Mondelez 4Q14 Earnings Call Notes

Each week I read dozens of transcripts from earnings calls and presentations as part of my investment process. Below are some of the most important quotes about the economy and industry trends from the transcripts that I read this week. Full notes can be found here.

Consumer spending weakened in key markets

“In light of a still challenging macroeconomic environment, consumer confidence and spending weakened in many of our key markets, while competition among food retailers was intense, especially in Europe.”

Faced significant inflation

“We faced significantly higher prices for key commodities, like cocoa and coffee, and this inflation was magnified by local currency devaluation, especially late in the year.’

Oreo growth is strong

“Biscuits remained the strongest of our snacks categories, up about 5% worldwide and while the reset of our China business, held our revenue growth below that of the total category, we made good progress on our biscuits portfolio.

Oreo led the way. Globally it grew high single digits and exceeded $2.5 billion in sales, driven by new product innovations, such as Oreo Thins in China, as well as new package format, such as family size in the U.S.’

Currency will be an 11% headwind to revenue growth

“Now although it’s not part of organic growth, I’d like to provide some perspective on the potential impact of foreign currency translation on our revenue. Based on January 30th spot rates, we estimate currency would be about 11% — 11 percentage point headwind to our revenue growth.”

Obviously that’s a big number

“Obviously that’s a big number but remember that 80% of our revenue is based in markets where the currencies are not tied to the strengthening U.S. dollar. So, while we anticipate our reported revenue will decline due to the significant currency translation impact, we expect to deliver solid organic growth in a challenging macroeconomic environment.”