So welcome back everyone, to our fireside chat with Mondelēz International. I hope everyone had a really, really good productive day yesterday. I know it's a lot to process in a short period of time. We've got another pretty big day ahead of us today, so we're looking forward to it. With me today are Chairman and CEO, Dirk Van de Put, and CFO, Luca Zaramella. Welcome, gentlemen. Truly great to be back with you in person here in Boston. Just a reminder, there will not be a breakout for Mondelēz after this session. So maybe just to kick it off, I think a good place to start the company's recent second quarter earnings in July. Certainly at which you sounded very positive about the outlook for the rest of the year. I think perhaps, maybe somewhat surprisingly to a lot of people in the room, you know, spoke very encouragingly about the state of the consumer. You know, we're now a couple of months removed from that earnings call, so I was hoping you could maybe provide a sort of an update on the current landscape, as it relates to Mondelēz specifically, and maybe any changes one way or the other, that you're seeing in the consumer that are notable to you. Yeah. Well, we, of course, look at the consumer largely through the lens of our categories. In our case, chocolate and biscuits/baked snacks. And in those categories, we clearly see strength as it relates to the consumer. We don't really see their consumption go down. Volumes in our categories are flat to slightly positive. And we see a few changes as it relates to the buying pattern, in the sense that in certain areas and certain classes of consumers, they increase the frequency and reduce the amount that they're buying. So they tend to shop around a little bit more to more of the discount channels. But overall, we see our category as very resilient. If we then also look at what is the sentiment of the consumer and how do they feel, and we see in general there is a preoccupation, but an increasing positive feeling about where things are heading in Europe and in the U.S. In emerging markets, for a long period of time now, we have seen a relatively positive attitude of the consumer. Maybe something else to note, is the promotional pressure increasing? Yes, but not to an incredible degree. Is private labels increasing? Not that much. In biscuits over the last 2 years was about 1 point of market share. So private label in biscuits, about 10% of the market. And then in chocolate, it increased 0.2% of a 5% share that private label has. So we really don't see big changes in the consumer, and overall, a pretty positive attitude. They tell us they want to keep on buying our products. Our brands are still very high on their, on their list. So I know, I know it's a little bit different, but we can't tell that we see anything major happening with the consumer. Right. You know, also on the second quarter conference call, Mondelēz raised its 2023 constant currency EPS guidance to 12%+ year-over-year, implying, you know, at least there's likely some flex above sort of the 12% floor. You know, as you think about achieving sustainable long-term EPS growth beyond just this year, maybe talk us through how you think about the balance between sort of maximizing 2023 EPS growth, but also reinvesting some of that potential upside, you know, in longer term opportunities, white space, distribution, and such, that could set the company up for sustained growth further out, you know, as well as what maybe some of those key opportunities might be. Yes. We are very positive about the year, and, fundamentally, there are three things that made us increase guidance. The first, and most important, quite frankly, was the fact that, we ended the first half with a very positive momentum in the business overall. I was particularly pleased with the operating part of our EPS, which is, really an amazing number that the team achieved throughout, our businesses. The second thing is, the consumers and our brands. We see resilience, we see pricing sticking, and we see volume momentum. In fact, Europe was the only one that posted negative volume in Q2 because of the disruption we talked many times about. And the third one is, clearly Europe landing in a good place in terms of pricing. Then from that pricing being now established, you start seeing margins momentum. We are reinvesting that in the business, and we are going to deliver volume growth in the second part of the year across all the regions. So we feel quite good. The 12 is a floor, and as I said, that allows us to play with some flexibility where we want to invest. The situation in the U.S. and the supply chain is pretty much where it should be at this point in time. So we have stock availability, and we can push a little bit harder on advertising investments, and so we want to support our brands. We are not going to invest crazy money into promotions. We prefer investing in advertising. In emerging markets, we are going to invest in distribution initiatives and in advertising again. The idea is really to enter the year on twenty-four with great momentum across the board, which I think we could have by the end of the year. As I said, the initiatives are the same. They are intended to sustain our brands and give us sustainable competitive edge in the next year, particularly in light of the fact that we will have to take some additional pricing. It's a good segue, and the rise in some items like sugar and cocoa have been pretty well documented more recently. You know, understanding that you have different hedges set in different places, you know, that we're not necessarily privy to. I guess, how do we think about the potential need and timing of further pricing actions in across geographies to offset some of those inflated costs? And you've been very successful, obviously, in taking pricing that you've needed, even in markets that are difficult, you know, historically for that, for such as Europe. You know, what's the appetite, right, of the company to sort of continue to do that, if needed, if justified? What's been learned, I guess, through the recent two waves in Europe specifically, that might help inform those decisions as you go forward? I think as you said, we look at the cocoa price increases particularly, you see material increases. I mean, we are talking about a 50% over the last 12 months, 24 months. We have very good coverage. We are quite favorable to the market, and to start with 2023 costs pretty much for across all commodities have been locked. So I don't think there is gonna be any surprise from a cost standpoint into 2023. As far as 2024 goes, we are covered for a good part of 2024 already across all commodities, cocoa a little bit less, but we have good coverage, and importantly, that is favorable to market prices today. The way we look at this is, we will try to price at replacement cost, and we are gonna do it in a way that eases both retailers and consumers into new pricing, particularly in emerging markets, particularly for products that are low unit price, we will protect price point. In places like India, small unit price products are the way we recruit consumers for the future, and so we need to protect that. But we are blessed that we have a good portfolio across multiple price, price tiers, and we will be managing the mix across all the portfolio. On top of that, I think we have made big strides as a company, particularly in RGM, and so in places like Brazil, which is one of the best in class in terms of RGM, we have learned good lessons, and we will try again to protect critical price points and to optimize our mix. In terms of timing, I think, as I said, we are not necessarily pressed from a margin standpoint to price again, this year, but it is on a case by case, and as I said, we would like to price at replacement cost rather than passing on the favorability we were able to get through the wise coverage that we took. Okay. When we think about emerging markets, obviously it's been an incredible bright spot for Mondelēz over the last couple of years. The momentum continues apace, and it's certainly a major differentiator for Mondelēz as well, relative to many peers. It's an area that also tends or can be more volatile, of course, over time. Maybe you could provide a bit more color into what's been driving some of the recent success, particularly in the Latin America region, and some of the countries such as China and India, and maybe why you feel that performance sort of going forward this time can be maybe more sustainable. There's always going to be some level of volatility, obviously, but it feels like you've hit a point in some of these markets where maybe you've got better visibility into the sustainability of this type of growth, or you're at a new sort of level set, right, of growth in emerging markets. Mm-hmm. Yeah, I think, like you said, that is the way we look at it. I would say we have found a way to really drive our categories in the different countries around the world. We work on those price points that Luca was talking about, so we are hitting the right price points. We have a number of brands that are really taking off in the first place, Oreo, that we now really see taking hold across many markets around the world. We have constantly improved and sophisticated our distribution efforts. So not only is the existing distribution being made more sophisticated and giving us better returns, we're also expanding our distribution in several key markets like India. Every year, we keep on adding new stores. We keep on placing Oreo coolers. In China, we have a strategy of going into third-tier cities and expanding. The acquisition of Ricolino will triple our distribution points in Mexico. So I think it's a mixture between really understanding the consumer, the price points, connecting with them well to more sophisticated or more advanced advertising, and at the same time driving our distribution very hard. On distribution, specifically in China, you've been seeing really strong post-pandemic growth, largely led by biscuits and a recovery in the gum category. I guess, what sort of white space distribution opportunities still exist for Mondelēz in China, and how do you intend to go about capturing some of those, over time? I mean, if you think about it, we are still working on the third-tier cities. I think we are in sort of 1.5 million, the latest number, of stores. China probably offers us the opportunity to at least double the amount of stores there. We're adding around 100,000 stores -120,000 stores a year, so we still have years of runway there. Not only is it adding more stores, in the stores that we are present, we are adding SKUs now. So we start off with a limited number of SKUs. We make a city work from a distribution system. Once that is up and running and profitable, we start adding more SKUs and getting more turn by store. So we got those two fronts that we work. So we basically go back in the 3 million stores and add SKUs to them. So I think it's gonna be a perpetual motion, and as we get more sales, and we can afford to go deeper in the distribution, that will help us. Baked snacks is a sort of newer area for Mondelēz, and investors are sort of still getting up to speed on, I feel like. Maybe you can help remind everyone why you find that space, you know, globally, as compelling as you do in terms of size, growth, you know, ability of the company to scale it. And maybe, you know, what you look for specifically as you think about, you know, further baked snack acquisitions, or what works in that context for you and maybe what sorts of things don't work? You know, there's various assets that could be on the market at this stage, and just trying to get a sense of how you analyze what types of assets in that space work for you. Yeah. First of all, we see baked snacks as a natural extension of the biscuits market. Basically, softer biscuits, as if I can call it like that. It's made on the same equipment. It's usually sold in a shelf close to the biscuit. You can make a softer version of your biscuit. So for instance, we have a Petit Beurre in Europe, which is a hard biscuit, but you have the soft version, or we now have the OREO Cakesters, which is the soft version of an Oreo. So for us, it's a natural expansion, pretty normal that we will play in that space. It's a big market, so if you think about the biscuit market, it's about $110 billion. This is an $80 billion market, growing at about the same speed. Very fragmented. Biscuit is also fragmented, but we've got big local players around the world. This is even more fragmented, so there is an opportunity to consolidate. There's also a whole segment of cheaper, not so great products. We believe there's an opportunity to bring more value and a more premium approach to it, and that's really where we focused on. We're not looking to play into the, into the more economic versions of cakes and pastries. We want to bring added value, more sophisticated products, and brands to the space. So you have to think about an Oreo starting to play there, or a Milka in Europe, or Cadbury's already in there. And then we complement that with acquisitions of products and brands that we don't have and that are not our natural space. So Chipita in Europe is a packaged croissant, offering more a meal replacement than a snack. Present now in more than 20 countries, doing well everywhere. So clearly a product that has global opportunity. We can do it under the 7Days brand, which is their brand, or we sometimes do it under our brands. So we see global expansion and the opportunity to really offer something new to the consumer, different occasion also. Or Give & Go, which is more in the fresh bakery space, where consumers are drifting a little bit more than to the packaged shelf into the what they perceive as fresher. And there, I think there's a whole opportunity for cakes and pastries that's typically a space there. So the way we look at it is it needs to add something new to us. It needs to add value. It needs to be a step up from what's already available in the market. It needs to be a more sophisticated, high quality product at a higher price point with the right margins. That's sort of the way we judge this space. We don't want to be in cakes and pastries at lower margins versus the rest of our business. So that's how we look at it, and there are opportunities, but we probably are walking away from more opportunities than jumping on them. And we have, I mean, the mistakes that we've taken with our own brands have been very successful. So we have Airy Cake on Oreo in China and, Cakesters here on the Oreo in the U.S. Both are doing very well. Those are the two big Oreo countries for us, and that is a typical way of how you see, will see us attack that space. Thank you. Chocolate, obviously, a critical part of the portfolio. Number two global player, close to number one. Maybe something, you know, here in the U.S., we can sometimes lose sight of, like, giving a presence when the category is much more concentrated in other areas of the world, particularly Europe. Maybe you can talk about some of the key drivers of growth and progress, especially when it comes to gifting and seasonal or areas like premium, which I know are areas where you feel like there's still a lot more opportunity. Mm-hmm. Maybe Mondelēz hasn't been as active, maybe in the past couple of years as, as you'd like to be. Yeah. Yeah. Well, chocolate, first of all, is a very interesting category. It's a $120 billion category, growing about 7% over the last four years. I think in, in the whole world of indulgence, it takes a unique space. It is an indulgence that most consumers will not have a major problem with. They eat it in relatively smaller quantities, and it's sort of a daily indulgence that they are fine with. So if you look at snacking and you think about health and wellness, I think chocolate is quite unique in that space, a very interesting category to be in. It's also an elastic category, if I can say, in the sense that through gifting, through pralines, through seasonals, you can drive up the consumption of chocolate, and there is opportunities to extend, not only the base of consumers, but also, increase the amount of product they have in the shelf and in their homes. For us, there's kind of three ways to develop our presence there. The first one is where we are the biggest players. That's typically your tablet chocolates. That's our home ground. There's still a lot of opportunities there through sizing, through RGM, also through developing new types of products with, for instance, different fillings and so on, using also different brands. In general, I would say there is an opportunity to increase the per capita consumption of chocolate all around the world. The second big space, the first space is 25% of the chocolate market. The second big space is what we call seasonal gifting. So think Easter, think Christmas, think you're going to visit somebody, you wanna bring them a box of chocolate. That's a third of the market. We were underdeveloped about 10 years ago. We started to work very hard on this space. We're still catching up, but it's a huge area of growth for us, and every year we get more sophisticated and take more market share. So that's a big growth goal for us. And then the third space, which is about 20% of the market, is the premium space. The premium, as you see it in the grocery store. We have a number of brands that play there, Toblerone, Hu, Green & Black's, but I would say overall, it's an underdeveloped segment for us. So we are relaunching Toblerone with a significant increase in advertising. We're launching Toblerone Pralines, doing a major online effort. And so we are gonna push those brands that we have. We're working also quite strongly on Hu here in the U.S., but we remain open for acquisitions there and to reinforce our presence in the premium space. But the combination of the three, we think, will give us the momentum to become the leader in chocolate, and on top of that, drive the growth of the category. Oreo, obviously an iconic brand, one with a lot of emotional attachment for consumers, and one you have some, some pretty hefty goals for, even going forward, and I think particularly as it relates to expansion in emerging markets. Maybe you can walk us through a bit about what you think the opportunity is for Oreo, globally, and sort of what makes it such a unique product. Well, the opportunity for Oreo is very large, in my opinion. In our key markets, the U.S. and China, Oreo has reached 10% of the market, and we believe that once Oreo gets established, once we get the whole machinery of activation, innovation, communication, distribution, once we get that going, Oreo should have the potential to reach 10% of the market everywhere. So if you think about it, there's so many more countries left for us. The way we look at it is we count $100 million markets for Oreo. About 6 years ago, we had none. So today we have 6 countries, and we have another 4 countries or 5 countries that are gonna get there. 3 years ago, we were talking about Oreo reaching $100 million in China, now we're looking at Oreo looking—g oing for $300 million in India, $300 million in India. And so we seem to have found the key to develop Oreo around the world. The key is quite simple. It's a brand that has a unique positioning about staying playful. It is in the space where kids and their parents touch. It has a unique moment, which is when the kids comes from home, they get there, there's a whole ritual related to it, with the milk. We found a way to really connect Oreo to the things that are happening that consumers are interested in. So we found a way to connect the brand to those areas or moments that consumers really like, and that's working for us. We have done a lot of innovations. We do licensing, it's in ice cream. We have partners that we work with that develop the Oreo merchandise and so on. So I think we've found a way to really create a strong global brand. It's $4 billion last year, in 2022. It's gonna be $5 billion next year. And I mean, to my opinion, it is already the world's favorite cookie, but I would compare it to brands that have a much bigger $10 billion -$15 billion global presence. Oreo has the potential, it's just up to us to work it the right way. M&A has been, you've been pretty active over the last several years. Notable acquisitions, Clif, Ricolino, Chipita, along with the divestiture of developed market gum that's coming. So on the acquisition side, I guess, how's the integration of the acquired businesses progressing? What excites you most about the opportunities they present? And on the gum divestiture, when do we expect the close of that transaction? So maybe starting with gum, we are absolutely on track, and I would expect October, November as a closing date. The carve-out of the business is progressing well, and on the other side, Perfetti is ready to take the business off. We are gonna close it in Q4, as expected. The integration is doing okay across the board, I would say. Chipita was really seamlessly integrated into the European business model. It is part of the business. We have a dedicated organization on the marketing and sales side to make sure that we continue to progress the expansion of the brand. Clif, I think I quoted a few times the numbers that we are seeing for Clif. Growing double-digit, a little bit margin, but it is close to the average of the North American segment. We are about to put them into the SAP model, which will unlock cost synergies even further, and so there is a further way for us to get more synergies. Ricolino is a complex carve-out from Bimbo, and then it is a complex integration into our systems, but importantly, we will have to set up our own DSD system in terms of warehousing, distribution centers, et cetera. That integration is again progressing quite well. I think what is nice about all this integration, and I didn't mention even though I didn't mention Tate's as one example, which dates back to 2018, I think. What is nice about this business is, it is that they have contributed not only in terms of cost synergies, but they are now becoming into, in terms of growth and in terms of revenue synergies. So we are quite pleased. We have a clear playbook in terms of how we want to play across these businesses. They are, in general, what we call hybrid models. We integrate them partially into our systems to protect the essence of, of the brands, and then, we clearly try to get the benefit of purchasing power that Mondelēz provides. So cost synergies, in general, are important, and, I think overall we are on track, and I think you're gonna see the benefits of, Clif go a bit faster into next year. And, and equally, that will give us, material cost synergies for 2024. The balance sheet's in a very healthy state. Leverage is low. It'll be even lower after the close of the gum transaction. How are you thinking about prospective M&A moving forward? You know, are there certain categories or geographies that appeal to you more than others? And are there certain areas or geographies where, you know, perhaps the ability of the team to handle more, at least M&A on, at this time, might need a little more time, you know, to season what you've already done? Yeah. So, look, we're happy with the balance sheet where it is. We have a debt pool that is costing us a little bit north of 2% at this point, whose average maturity is more than 8.5 years. So we are in a good place in terms of that. We are not gonna touch that. We are not gonna lower that even further. It doesn't make any sense given the context of interest costs these days. We also have flexibility on other parts, which is the JDE stake, plus, you know, part of the portfolio that in Mondelēz are not necessarily core to us, and there are still a few. And so we have, like, the flexibility, and we believe organic position is really the way to go for Mondelēz. So we see, in a context where, you know, our categories are still growing and where we have plenty of opportunities, look, that's the number one opportunity we have. So we will stay on par to the course on that. We will continue to invest in the business. If an acquisition comes along, we will have most likely to take on temporarily more debt. But then, as I said, we have different avenues to optimize our balance sheet. We are not necessarily going to pile on countries and geographies that have acquisitions on the way. So you might imagine Mexico have their hands full in terms of an acquisition. I would argue even in the U.S., there is more to be done in terms of Clif and integration and what we call the ventures that are giving growth rate, et cetera, still have tremendous opportunities. So we will stay nimble. We are looking at a list of 30 assets -40 assets around the world that we call obsessions, and we are staying very close and seeing that those will materialize. You know, if they come along, we will play. Dirk, in your time at the helm, you've been much more balanced in your approach, and you've talked a lot about this between margin percentage and profit dollars, margin dollars. That's worked out really, really well. I get the sense there's still maybe not confusion, but I think investors are still trying to get comfortable, right, with that, you know, and this concept of moving away from just purely sort of margin rate. Can you talk a little bit about what led you to that sort of conclusion, you know, as you started and how that's played out, over time, and why that's so important in your mind? Yeah. Well, for me, in the first place, I tend to believe that what drives our business is the dollars we can invest. So I'm focused. If I need to develop Oreo or any other brand, I need to be able to invest a certain amount of dollars. So through the need of the fact that we need to invest dollars, not percentages, there is a need to generate X amount of dollars every day, every year, of gross profit dollars. We also wanna make sure that we flow sufficient of those dollars to the bottom line, because EPS is measured in dollars, not in percentages. So for me, it was never clear if everything that drives our decision-making is driven by the absolute dollars, why are we so obsessed with the percentages? The other thing that I noticed is that, because we had sort of a thinking that we needed to hit a certain percentage, we would walk away from certain opportunities because we didn't hit the right percentage. And so when I arrived, the company was not growing a lot, and it was clear that, this obsession with percentages led us to heavy cost-cutting and so on. And so, I said, "If I wanna liberate the teams to think differently and to start developing new opportunities, we need to shift the way they look at things." And so we started to say, "Try to add dollars and think about gross profit dollars in the first place." I think we are the only company that incentivizes on gross profit dollars in our peer group, and it's the biggest part of our incentive. The whole company is focused on how do we drive gross profit dollars. The idea originally was that we should add $400 million gross profit dollars every year to that line. That $200 million would go to the bottom line, and that $200 million would be reinvested in the business which would give us a high single digit to double digit increase of our advertising dollars, and at the same time, will, would also give us that high single digit EPS that, that we were looking for. The last two years, instead of $400 million, we've added over $1.2 billion to our gross profit line. So that is driven through the performance in EPS and also has increased significantly our investment in the business. So that's the way we think about it, and I think it really has opened up the thinking in the company. Now, to be clear, we do believe, if you think it through a little bit, that anything below 35% gross profit, especially if you start approaching 30% gross profit, then we monitor our business units around the world, there you need to start talking about percentage a little bit. So there is a framework within which you need to remain. And I would say, around 35, we start to pay attention. If you're approaching 30, you really need to, to do something about your percentage. That's the way we think about it. Well, managing your business clearly is among the best in the staples space, has been and continues to be. So what is it that sort of keeps you up at night at this point? I mean, obviously, it's a long list, I'm sure. But you know, top one or two, just things that you're sort of keeping your eye on, you know, keeping your finger on the pulse a little bit more closely, just to sort of, you know, assess whatever could change. Well, I can give my one or two, and maybe Luca has one or two. But, for me, it's a whole cycle of inflation. There's a lot of talk that inflation is coming down. We don't quite see that yet in the sense that the cost increases that we are expecting for next year are less, about half of what they were this year and the year before, but it's still an increase of our costs, and so we will have to price again, much less than we had to do this year, but we have to price. And so, so far, elasticity is good, volumes are good, but there's gonna be a moment that it starts to affect. So that keeps me up at night. How we're gonna pass those price increases? How we're gonna make sure that the volumes don't suffer? So far, I think we've done really well. We know that our categories help us, but that is the number one. The second one, I think, is we don't run a global supply chain. We produce largely in the different countries. But after the effect of Russia, now the whole discussions around China, we are heading towards a world where for a company like ours, how to manage our business in different parts of the world is becoming way more complex. And how to deal if a conflict arises, how to deal with that, those are big chunks of our business, and how to manage that and take the right position, that has become much more difficult. I don't know, Luca? I mean, nothing in addition to what Dirk said. I think for us, what is paramount is that we keep the business focused on the right things. What has driven results for us is consistency of execution and investment in the brand. It is driving the organization of what good looks like, both in terms of financial delivery, but also quality of the results. There is one thing that I'm a little bit obsessed about, which is continued progress in our strategic agenda, because the avenue of growth that we can open up in the next 5 years -10 years require some work today, for which work and results are not gonna be visible to the outside world. It is absolutely critical that we come to terms on what do we want to do, how do we want to pursue our, for instance, emerging market chocolate or emerging market biscuit. Those are huge opportunities that if we don't plant the seeds today, we are not gonna get the benefits in future. Okay. Maybe in the last minute or two, just sustainability, obviously an increasingly important topic for many fundamental investors. You recently added sustainability as one of your four core pillars. Maybe just provide a quick summary on the strategy and, and where the companies are making the most progress? Yeah. So we, we added it as a pillar because we want our teams to look through a sustainability filter in everything we do. At the same time, we feel that as a company, we need to focus on those areas where we are important and where we can make a difference. And so we've divided that up in, in three key focus area for the company. First of all, there's the, the carbon neutral approach. We, we are working towards that by 2050. That requires a number of changes in the company. We need to change all our ovens to electric ovens, all our boilers to electric ovens, assuming all the electric energy is green energy, and so on, electric vehicles. But it's, it's— Yeah, I would say it's a program that requires investment that's manageable. The second one is our supply chain, largely the front part of the supply chain, our ingredients, cocoa and wheat, which are two important streams, which have attached to them significant environmental impact. And so driving change in those two supply chains for us, since we are a big player, is quite critical. And then the third one is packaging. Since most of our packaging is flexible packaging, it's not the hard PET. The whole way of recycling and reusing is not as well developed. So we feel that we have a role to play there in making sure that the right infrastructure through the communities for collection or through recycling, sorry, the reworking effort, that we are a key player in that. So we will invest a little bit in some of the facilities there. But we try to be very concentrated on these two, three areas and make sure that we make progress there. Good. Well, we'll end it there. Thank you very much, Dirk and Luca, for being with us here today, and we appreciate it. Thank you, Andrew. Thank you, Andrew. Thank you. Of course. Thank you.