Adjusted Gross Profit Dollar Growth: 11.6%, enabling continued business investment.
Adjusted EPS Growth: 16.3%.
Free Cash Flow Generation: $1 billion in Q1 2024.
Volume Mix: Varied. Emerging markets were flat due to political unrest and production slowdowns, while developed market volume mix was down 3.6%, impacted mostly by Europe customer disruption and U.S. biscuit market softness.
Total Revenue Growth in Emerging Markets: +8.3%.
Developed Markets Revenue Growth: 1.4%.
Future Guidance
Organic Net Revenue Growth: Expected at the upper end of the 3% to 5% range for 2024.
Inflation Expectation: High single-digit inflation projected for 2024.
Interest Expense: Approximately $300 million for the year.
EPS Headwinds from Forex: Expected to be $0.10.
Adjusted Effective Tax Rate: Expected in the mid-20s.
Share Repurchase: Planned at $2 billion for the year, with an opportunistic approach.
Trends, Market Conditions, Sentiment
Emerging Markets: Strong consumer confidence and low elasticity, with interest in premium offerings.
North America and Australia/New Zealand: Mixed consumer confidence, with pressurized lower-income consumers affecting frequency in categories.
Europe: Stable consumer confidence with the chocolate and biscuit categories holding better than the broader FMCG landscape.
Consumer Behavior: Sensitivity to absolute price points, driving preference for smaller pack sizes; increased loyalty to known brands.
Market Share: Gained in 40% of revenue base, with strength in chocolate and Gum & Candy offset by softer results in the U.S. biscuits business.
Cocoa Prices: Discussion on unprecedented levels but with strategies in place to navigate the volatility.
Operational Highlights: Investment in product innovation and distribution gains, particularly in emerging markets; focus on environmental and social sustainability.
Challenge in North America: Softness in the biscuit category, pressure from lower-income consumer groups.
Notable Quotes
”Consumer confidence remains strong and our categories remain resilient."
"We continue to invest significantly in our brands and capabilities, driving distribution gains and harnessing synergies from our recently acquired assets."
"We’re confident that we are well equipped to navigate relatively short-term headwind and that we’re structurally advantaged to accelerate long-term growth in this category."
"We are fully covered for 2024 and well protected heading into 2025."
"We believe there will eventually be a market adjustment."
"We remain encouraged by our activation plans in key products such as OREO, TDP expansion and growth channels as we move through the year."
"Our balance sheet also remains strong, as leverage ended at about 2.5x.”
