10-K: Mondelēz 2025 Earnings Decline Amid High Costs, Geopolitical Risks

Mondelēz International reports a significant drop in 2025 net earnings and EPS, driven by soaring input costs and unfavorable volume/mix, despite revenue growth.

Summary

• Net revenues increased by 5.8% to $38.5 billion in 2025, up from $36.4 billion in 2024.
• Organic Net Revenue grew by 4.3% to $37.9 billion in 2025, primarily due to higher net pricing.
• Net earnings attributable to Mondelēz International decreased by 46.8% to $2.451 billion in 2025, down from $4.611 billion in 2024.
• Diluted EPS decreased by 44.7% to $1.89 in 2025, compared to $3.42 in 2024.
• Adjusted EPS, a non-GAAP measure, decreased by 12.8% to $2.92 in 2025, from $3.35 in 2024.
• Operating income fell by 44.1% to $3.548 billion in 2025, from $6.345 billion in 2024.
• Adjusted Operating Income decreased by 13.9% to $5.074 billion in 2025, from $5.896 billion in 2024.
• The operating income margin decreased from 17.4% in 2024 to 9.2% in 2025, while the Adjusted Operating Income margin decreased from 16.2% to 13.2%.
• Higher net pricing was more than offset by increased input costs, particularly for cocoa, dairy, packaging, edible oils, and nuts, and unfavorable volume/mix.
• Unfavorable volume/mix was observed across all regions, reflecting pricing elasticity impacts and soft biscuit & baked snacks consumption in North America.
• The company incurred non-cash pre-tax settlement losses of $282 million and $54 million in 2025 related to U.S. and Canadian pension plan buy-outs, respectively.
• A $1.2 billion multi-year ERP System Implementation program was approved in July 2024, with spending continuing over the next three years and expected completion by year-end 2028.
• Mondelēz repurchased approximately $2.3 billion of Common Stock (around 40 million shares) in 2025, with $6.7 billion remaining under the $9.0 billion authorization through December 31, 2027.
• The quarterly cash dividend was increased by 6% to $0.50 per share, totaling $2.00 per common share on an annualized basis.
• Total debt increased to $21.2 billion at December 31, 2025, from $17.7 billion at December 31, 2024, with the debt-to-capitalization ratio rising to 0.45 from 0.40.
• Intangible asset impairment charges of $33 million were recognized in 2025, primarily related to biscuit and candy brands in Europe, AMEA, and Latin America.

Sentiment

Score: 4

Explanation: StockSavvy.ai views this as a challenging report, with significant declines in key profitability metrics (net earnings, EPS, operating income) despite revenue growth. While strategic initiatives and shareholder returns are present, the impact of high input costs and volume/mix issues indicates underlying operational pressures.

Positives

• Net revenues increased by 5.8% to $38.5 billion in 2025, demonstrating top-line growth.
• Organic Net Revenue grew by 4.3% in 2025, indicating underlying business growth driven by pricing actions.
• The company successfully acquired Evirth (Shanghai) Industrial Co., Ltd. in November 2024, expanding its cakes and pastries categories in China.
• A $9.0 billion share repurchase program was authorized, with $2.3 billion executed in 2025, returning capital to shareholders.
• The quarterly cash dividend was increased by 6% to $0.50 per share, reflecting confidence in future cash flows.
• The company received a $169 million cash payment from JAB Holding Company related to the KDP acquisition of JDEP in 2025.
• A gain of $332 million was recorded from the sale of remaining JDEP shares in Q4 2024.
• The company fully resumed production at its two manufacturing facilities in Ukraine in Q2 2024 after significant damage, showing operational resilience.
• No known material information security breaches occurred over the last three years, indicating effective cybersecurity measures.

Negatives

• Net earnings attributable to Mondelēz International decreased significantly by 46.8% to $2.451 billion in 2025.
• Diluted EPS decreased by 44.7% to $1.89 in 2025.
• Adjusted EPS decreased by 12.8% to $2.92 in 2025, and 14.6% on a constant currency basis.
• Operating income decreased by 44.1% to $3.548 billion, and Adjusted Operating Income decreased by 13.9%.
• Operating income margin declined from 17.4% to 9.2%, and Adjusted Operating Income margin declined from 16.2% to 13.2%.
• Higher input costs, particularly for cocoa, dairy, packaging, edible oils, and nuts, significantly impacted profitability.
• Unfavorable volume/mix was experienced across all regions due to pricing elasticity impacts and soft consumption in North America's biscuits & baked snacks category.
• Non-cash pre-tax settlement losses of $282 million and $54 million were recognized from U.S. and Canadian pension plan buy-outs.
• Total debt increased to $21.2 billion in 2025 from $17.7 billion in 2024, and the debt-to-capitalization ratio rose to 0.45 from 0.40.
• Intangible asset impairment charges of $33 million were recorded in 2025, and five brand intangibles have fair values less than 10% above book value, indicating potential future impairments.
• The war in Ukraine continues to pose risks, including potential temporary or permanent loss of assets in Russia (3.7% of 2025 net revenues) due to expropriation or further curtailment of operations.

Risks

• Weakness and/or volatility in macroeconomic conditions, including as a result of inflation (and related monetary policy actions by governments in response to inflation) and the instability of certain financial institutions.
• Risks from operating globally including geopolitical, trade, tariff and regulatory uncertainties affecting developed and emerging markets.
• Volatility of cocoa and other commodity input costs, ability to effectively hedge such costs and the availability of commodities.
• Geopolitical uncertainty, including the impact of ongoing or new developments in Ukraine and the Middle East, related current and future sanctions imposed by governments and other authorities and related impacts, including on business operations, employees, reputation, brands, financial condition and results of operations.
• Competition and response to channel shifts and pricing and other competitive pressures.
• Pricing actions and customer and consumer responses to such actions.
• Promotion and protection of reputation and brand image.
• Weakness in consumer spending and/or changes in consumer preferences and demand and ability to predict, identify, interpret and meet these changes.
• The outcome and effects of legal and tax proceedings and government investigations.
• Use of information technology and third party service providers, exposing the company to cybersecurity risks and other business disruptions.
• Unanticipated disruptions to business, such as malware incidents, cyberattacks or other security breaches, and supply, commodity, labor and transportation constraints.
• Ability to identify, complete, manage and realize the full extent of the benefits, cost savings, efficiencies and/or synergies presented by strategic acquisitions and other transactions as well as other strategic initiatives, such as the ERP System Implementation program.
• Investments and ownership interests in those investments.
• Restructuring actions and other transformation initiatives not yielding the anticipated benefits.
• Changes in the assumptions on which restructuring actions or other transformation initiatives are based.
• The impact of climate change on the supply chain and operations.
• Global or regional health pandemics or epidemics.
• Consolidation of retail customers and competition with retailer and other economy brands.
• Changes in relationships with customers, suppliers or distributors.
• Management of the workforce and shifts in labor availability or labor costs.
• Compliance with legal, regulatory, tax and benefit laws and related changes, claims or actions.
• Perceived or actual product quality issues or product recalls.
• Failure to maintain effective internal control over financial reporting or disclosure controls and procedures.
• Ability to protect intellectual property and intangible assets.
• Tax matters including changes in tax laws and rates, disagreements with taxing authorities and imposition of new taxes.
• Changes in currency exchange rates, controls and restrictions.
• Volatility of and access to capital or other markets, interest rates, the effectiveness of cash management programs and liquidity.
• Pension costs.
• Significant changes in valuation factors that may adversely affect impairment testing of goodwill and intangible assets.

Future Outlook

Mondelēz International anticipates ongoing volatility in the macroeconomic environment, consumer demand, and exchange rates. While expecting cocoa costs to be lower in 2026 compared to 2025, they are projected to remain elevated against historical levels in the nearand medium-term. The company plans to continue proactive management of its business, prioritizing employees and customers, and mitigating supply chain impacts. Capital expenditures for 2026 are expected to be up to $1.5 billion, including investments in the ERP System Implementation program and strategic priorities. The multi-year ERP system transformation is expected to be completed by year-end 2028.

Management Comments

• Our purpose is to empower people to snack right.
• Our goal is to lead the future of snacking around the world by offering the right snack, for the right moment, made the right way.
• We aim to deliver a broad range of delicious, high-quality snacks that nourish life's moments, made with sustainable ingredients and packaging.
• We believe the successful delivery of our strategic plan will drive consistent topand bottom-line growth and enable us to create long-term value for our shareholders.
• We continue to observe significant market and geopolitical uncertainty, fluctuating consumer demand, inflationary pressures, supply constraints, trade and regulatory uncertainty and exchange rate volatility.
• While we expect cocoa costs to be lower in 2026 compared to the current year, we expect to continue to face elevated cocoa costs as compared to historical levels in the nearand medium-term.
• Our overall outlook for future snacks revenue growth remains strong; however, we anticipate ongoing volatility.
• We have not ceased operations in Russia because we believe that we play a role in the continuity of the food supply.
• We believe our tax estimates are reasonable, if a taxing authority disagrees with the positions we have taken, we could face additional tax liabilities, including interest and penalties.

Industry Context

StockSavvy.ai notes that Mondelēz International's performance reflects broader industry trends of persistent inflation, particularly in commodity costs like cocoa, which has significantly impacted profitability across the food and beverage sector. The company's strategy to focus on core snacking categories (chocolate, biscuits, baked snacks) aligns with the growing global demand for convenient snack foods, especially in emerging markets. However, the observed pricing elasticity and unfavorable volume/mix suggest that consumers are becoming more sensitive to price increases, potentially shifting towards private label or lower-priced alternatives, a challenge faced by many established brands. The substantial investment in ERP systems and digital commerce indicates a strategic response to evolving retail channels and the increasing importance of technology in consumer engagement and operational efficiency, a common theme among industry leaders.

Comparison to Industry Standards

• Mondelēz's 5.8% net revenue growth in 2025 is competitive within the consumer staples sector, though specific peer comparisons would require detailed analysis of their respective reporting periods.
• The significant decline in net earnings (46.8%) and diluted EPS (44.7%) is notably worse than typical industry performance, indicating substantial headwinds or one-time charges impacting profitability.
• The Adjusted EPS decrease of 12.8% (14.6% constant currency) suggests that even after removing certain volatile items, core profitability faced considerable pressure, likely due to the higher input costs and volume/mix issues mentioned.
• The increase in total debt to $21.2 billion and the rise in debt-to-capitalization ratio to 0.45 could be higher than some more conservatively leveraged peers, potentially increasing financial risk.
• The company's dividend increase and share repurchase program are consistent with practices of mature, cash-generating consumer staples companies like PepsiCo, Inc. or The Coca-Cola Company, aiming to return value to shareholders despite profitability challenges.
• The intangible asset impairment charges, while not uncommon, highlight specific brand performance issues that may be more pronounced than some industry benchmarks, especially with five brands having fair value less than 10% above book value.

Management Changes

Corporate Governance

Legal Proceedings

• A class action lawsuit (Harry Ploss et al. v. Kraft Foods Group, Inc. and Mondelēz Global LLC) related to 2011 wheat futures contracts is ongoing, with motions to decertify the class and for summary judgment heard in March 2024 and currently under submission. Mondelēz expects to bear any monetary penalties.
• A purported personal injury lawsuit (Bryce Martinez vs. Kraft Heinz Co. Inc. et al.) was filed in December 2024, alleging certain food products are addictive and cause health problems. Mondelēz intends to vigorously defend itself.

Stakeholder Impact

• Shareholders: Experienced a significant decline in net earnings and EPS, but benefited from a 6% increase in quarterly dividends and a substantial share repurchase program ($2.3 billion in 2025).
• Employees: The company employs approximately 91,000 people globally, with ongoing investment in talent management, development, and a diverse, inclusive culture. Risks include labor shortages, increased turnover, and potential disruptions from labor unrest.
• Customers: Faced with pricing actions due to increased input costs, which led to unfavorable volume/mix due to pricing elasticity. Customer relationships are also impacted by retail consolidation and competition from private label brands.
• Suppliers: Subject to volatility in commodity prices (e.g., cocoa, dairy), supply chain disruptions, and geopolitical uncertainties, which can affect availability and cost of raw materials. The company uses hedging and cost control to manage these impacts.
• Creditors: Total debt increased to $21.2 billion, and the debt-to-capitalization ratio rose to 0.45, indicating increased leverage. However, the company maintains access to capital markets and revolving credit facilities.

Next Steps

• Continue to proactively manage the business in response to the evolving global economic environment, uncertainty, and business risks.
• Prioritize and support employees and customers, and mitigate impacts to the supply chain, operations, technology, and assets.
• Monitor supplemental guidance from the U.S. Treasury regarding the One Big Beautiful Bill Act (OBBBA) in 2026.
• Evaluate the impact of updated OECD global minimum tax model rules as they are incorporated into local tax legislation.
• Continue to evaluate the situation in Ukraine and Russia and the ability to control operating activities and comply with international sanctions.
• Monitor the performance of five brand intangibles whose fair value exceeded book value by less than 10% as of December 31, 2025, for potential future impairment.
• Expected capital expenditures of up to $1.5 billion in 2026, including for the ERP System Implementation program and strategic priorities.
• Continue implementation of the multi-year ERP System Implementation program, with expected completion by year-end 2028.
• Annual meeting of shareholders expected to be held on May 20, 2026.

Key Dates

Recommendation

While Mondelēz International demonstrated top-line revenue growth and committed to shareholder returns through dividends and share repurchases, the significant decline in net earnings, EPS, and operating income in 2025 is a major concern. This profitability erosion is primarily due to high input costs, unfavorable volume/mix from pricing elasticity, and one-time pension settlement losses. The company is addressing these challenges through strategic initiatives like the ERP system upgrade and continued focus on core categories, but the near-term outlook for cocoa costs remains elevated. Given the strong market position and ongoing strategic efforts, a 'hold' recommendation is appropriate, acknowledging the company's resilience and long-term potential while recognizing the current operational headwinds and profitability pressures.

Keywords

Snacks, Confectionery, Biscuits, Chocolate, Baked Snacks, Food & Beverage, Consumer Staples, Global Operations, SEC Filing, 10-K, Earnings Report, Financial Performance, Risk Factors, Sustainability, ESG, Supply Chain, Commodity Costs, Pricing Strategy, Acquisitions, Divestitures, Share Repurchase, Dividends, Debt, Cybersecurity, Geopolitical Risk, Inflation, Emerging Markets