Perfect. All righty. If we could all find our seats, we'll kick off our next fireside chat with Mondelez. So good morning. Welcome back, everybody. I'm thrilled to welcome Mondelez International back to our conference, and with us this morning, our Chairman and CEO, Dirk Van de Put, and CFO, Luca Zaramella. Welcome, gentlemen. Hi. Thank you. Mondelez was actually the most requested company of all the companies here at this conference in terms of meeting, so there's a high level of interest. So, we'll jump right in. All right. Maybe, maybe, Dirk, we'll start with you. A lot of topics to cover, right? Including cocoa, U.S. biscuit trends, health of the consumer, but I want to start bigger picture. I think, you know, if we take a step back and you think back to the company's sort of strategic launch back in 2018, you've managed to deliver through lots of volatility, very consistent results, in line, at least, if not better, at times, with your long-term algorithm. Do the shifts the past year or so in consumer behavior and input cost volatility require sort of a different strategic approach now, or just more tactical moves as you work through it? The answer to that is it's both. If you look at the premise of the company, the premise of the company is that we want to be the global leader in chocolate, biscuits, and baked snacks. And if you look at those categories, those are appealing categories that have good growth, good value creation, particularly in emerging markets, the per capita is quite low. For us, as a company, we have some of the most iconic brands in those categories. We are getting better and better at growing those brands, establishing them around the world. We have geographical opportunities because we are not the number one in every category in every country, so we have big geographical growth. Within the categories, there's segments like premium that are growing, and when things turn, like today, these categories are quite resilient. So the premise of that we want to be the leader in those categories is still the same. The strategy of how we're going to do that is still the same. The runway of growth, I think, for the next five, 10 years is very good. So we don't see a reason to change our long-term strategy. We'll keep on doing what we're doing. If you look at the short term, there are some shifts, which if you look at what the consumer has gone through with COVID and the inflationary period, it's expected that there will be some reaction from the consumer. So we have to deal with it tactically, and I can explain a little bit what that means for us. But that doesn't mean for us that we are not already looking at 2026, and where do we as a company want to be in 2026. I would say we're confronted with two big things for next year. One is the consumer, and how long is this suppressed consumption pattern going to continue, and what do we do with it? Second, we have the cocoa inflation that is a temporary offset, but it's there, so from our perspective, the tactical things we need to do is probably adjust some of our promotional techniques, our RGM, where we think the consumer enters and stays into the category, play around with that. Make sure that we only invest where it matters and try to keep all our other costs under control and probably reduce them. So it's gonna be a frugal year, if I can call it like that. We'll keep on investing, and for us, winning at the end of 2025 means that our categories are growing and healthy, and we are basically the stewards of those categories, that our market share is the same or has increased, and that we deliver a reasonable financial year, and we are positioned for significant growth in 2026. Right. Got it. Thank you for that. Luca, I think it makes sense to dig into the company's recent second quarter earnings from late July a bit more, right? Where you reaffirm the upper end of your 3%-5% year-over-year organic net sales growth guidance. It implies organic revenue growth in the back half of the year will accelerate to more than double what you reported in the second quarter, and that improvement will need to be volume-based, given you expect the same year-over-year benefit from price in both halves. Maybe you can remind investors why you're still confident in being able to hit that target, as I know there are some, you know, clearly discrete dynamics involved. Yes. So I think when you look at the first half, the total top-line growth was around about 3.5%, with volume down around about 2%. Two key items in there that drove the volume decline year on year, and it is the European disruption and the EMEA boycott, and I think we are in a good place in terms of having implemented pricing now, particularly in Europe. Disruption is behind us, and so as you look at the second half, there are pretty much three key drivers that will drive the improved performance. The disruption in Europe being behind us, and happy to report after having seen now, July and August, that numbers are quite good in Europe, to testify the great job done by the European team, getting back on track and loading up promotions for back to school. Consumption is coming, and so I think Europe is really setting the stage for an improved and accelerated top-line growth in the second half. The second one is a recovery from the U.S. market softness that we saw in the first half, both in terms of market, but also in terms of share. We talked extensively about all the actions we are taking. The most recent numbers, in terms of category and share performance, are quite quite good, I would say, and encouraging. I think you all saw maybe the Oreo Coke promotion that is not in market yet. It will come in its full effect in September. And so we are fairly positive about the U.S., too. And the second thing, the third thing that I mentioned before in the earnings is the fact that Q4 last year specifically, we had some one-time impact particularly around the Give & Go business, where we sell these kits that are quite heavy, gingerbread type of kits that people use to make houses, et cetera, small houses. Those kits, we had to restage the business for profitability reasons, and so we discontinued some of the product lines, and now obviously that is in the base. So we feel quite good about the second half, and as I said, both July and August were solid numbers, and I think you will be pleased with the numbers you're gonna see in Q3. So we feel quite good. In terms of profitability, I think you saw the material profit increases that we had year on year. Now, part of it is clearly driven by the favorability related to how we procure cocoa in the first part of the year. But on the other side, that gives us a little bit of more flexibility to activate promotions where we see some consumer softness. Right. And if you haven't seen the Oreo Coca-Cola sort of collab or activation, the samples are in the back room there, where all the products are. Not in the market yet, so give it a shot. Dirk, let's return to Europe here. After having successfully completed another round of pricing, you noted in late July that you were seeing elasticities moving really only slightly higher, but remaining pretty modest overall. How are things progressing in Europe since then? And I ask more because, as you've mentioned, there will likely be the need for further pricing in the region in 2025 to help defray some of the cocoa cost inflation. Yeah. So, yeah, the pricing discussions in Europe are behind it. They came to a good end. So we're now fully at filling the pipeline and acting normally in the market. I would say the consumer around the world, the way I phrase it is, they're frustrated with the inflation, but they're optimistic about the future. In the U.S., I would say the frustration is much bigger than it is in Europe. I think the European consumer sees a little bit less inflation than the U.S. consumer, and the U.S. consumer tends to react more violently to these things, so we see less elasticity, we see a more optimistic view. Unemployment is low in Europe. They see good wage increases. Inflation is easing and starting to go down in some items. So overall, the consumer feeling is good. Mm-hmm. Second, as we look at our categories, in the U.S., we see some consumers getting in and out or out of the category. That's not the case in Europe. And so far so good, and as Luca was explaining, we're expecting a good second half. The new pricing is in the market about a month or two, I would say, and so far so good. Now, going forward, we will have to do more pricing. Mm. We're putting in chocolate. We're putting in place a number of mechanisms. First of all, we won't line price everything. We will launch some new items at different price points, so we will do what's called RGM. Mm. On top of that, when we do line pricing, we won't do it in one big shot. We will do in steps so that we can see how the consumer reaction is. We're putting in place very close, follow-up mechanisms that allow us to read right away what the reaction is going to be to those new prices. And probably the most important part is that in chocolate, historically, we've seen low elasticity. It's an affordable indulgence, getting more expensive, but still, most consumers don't want to give up, chocolate, on a regular basis. Particularly if it's an item that you used to pay EUR 2, now you're gonna pay EUR 3, let's say. That's still something they see as, as doable. We are pretty optimistic on what we will see as it relates to those price increases in chocolate, but we're putting anything and everything in place to make sure that we don't get surprised. Great. Luca, moving on to maybe one of the bigger areas of focus for investors, you've been pretty open and consistent around your expectation for a market correction in cocoa costs, with the catalyst being the main crop data, which we should be getting, I believe, in pretty short order, a couple of weeks. You know, as we sit here today, maybe you can share an update of your views on the topic, as well as some insight, you know, to the extent that you're able to provide, around how the company may have gone about sort of hedging for cocoa differently this year than it has in the past. I think regardless of where cocoa ends up, it's fair to assume you'll be facing a pretty material cocoa, you know, inflation headwind in 2025. What will your approach be to pricing? Dirk talked about this a little bit, such that you can best balance the need, right, to offset inflation, protect margins, with the need to maintain solid volume and share dynamics? So the good news is that cocoa came down quite a bit from the most recent historical highs. It held pretty much or even more. And so there is the market discounting the fact that the crop particularly in Africa is going to be quite good. We monitor consistently and very closely the crop evolution. We told you that the mid-crop was about to be good when there were a few weeks still to count for the crop to become available, and the crop had been good. The main crop is evolving quite well. Soil moisture and all indicators that we look at quite precisely, including obviously counting the pod on the trees, indicate that this is going to be a good crop up around about 20-25% from what happened last year. So the supply side seems to be good. Still, as you say, a few weeks to go, so we can't declare that the crop is gonna be good yet for sure, but all indicators are there. Market is seeing that. In fact, today, if you want to get a physical cocoa position in Q4, it is at low prices that we haven't seen in a while, and most likely, there is a further adjustment still to come when the crop really becomes available. In that context, clearly, we want some protection because we are already towards the end of twenty twenty-four, and so we have some coverage into twenty twenty-five in terms of cocoa. But anticipating a material reduction in cocoa prices, our approach to coverage has been really to get flexible structures that would allow us to participate in a material correction of the cocoa price if it had to happen. And so that is on the cost side. As I said many times, we will have visibility on the crop. I think that will shed some light into really what the cost of cocoa will be for twenty twenty-five, and we'll tell you more about our earnings in twenty five and how cocoa costs will evolve into twenty five in the Q3 earnings cycle. It is clear that we are not going to price regardless of our coverage, regardless of where cocoa will end up being, blindly left and right. We love the chocolate category. The chocolate category is one of the most loyal and resilient brand-driven categories. It is most likely the best snacking category you can think of, and our role is to make sure that we don't lose penetration and frequency. We will be very careful with pricing. We will protect key price points, particularly in emerging markets, the likes of India and Brazil. We still want to make our products available to consumers that have a specific coinage availability. On the other side, we will go, most likely with the most extensive RGM programs this company has ever seen, which means not necessarily lower grammage on some of the propositions, but proposing to consumers a full array of price points. So you will be able to find your Milka, your Cadbury, and you name all the brands that we have, at multiple price points, allowing people to really have something that is affordable on the go, but on the other side, something that might appeal to families in a sharing occasion. I think it's also important to say that there is what we call seasonal that is much less elastic, and so big events like Easter or Christmas or other events around the world are really conducive to us to really double down and making and protecting our share. So the goal is really to protect volume, to protect our share, and pricing is a little bit the degree of freedom. We will play with line pricing in a way that will allow us to optimize our top line first and foremost, because we believe cocoa eventually will come down regardless of our cost into twenty twenty-five. Great. Thank you. Luca, maybe staying with you. Separate from pricing, you also discussed additional productivity initiatives to help deal with the higher likely inflation in 2025. Can you talk a bit about what incremental moves you've made and how you keep from cutting into areas such as marketing and innovation? Yes, so we want to protect investments as we have always done. If you look at the quality of our P&L, consistently over the last few years, we have been increasing working media, but there are still parts of the P&L that we can optimize. Clearly, non-working media, we have circa 40% of our total marketing budget that is not working, and we are putting a tight lid on that and optimizing, and so getting productivities out of it. We are clearly looking at procurement initiatives, and so whether it is direct or indirect, we are tasking the organization with additional productivities. In supply chain, if we optimize the portfolio, we expect line efficiencies to stay the same, and so hopefully, we will deliver more productivity. And importantly, we will go for negative overhead growth into next year. Areas like advertising and support to our brands, or for that matter, digital investments or route to market, like India and China, are fully protected into the P&L. So this is not going to be ZBB. It's going to be a year where we will calibrate expenses in areas that are not as impactful in terms of driving top-line growth as we have never done in the last few years. Maybe we did it out of COVID, but we feel confident that that will provide also, on an ongoing basis, a much better P&L, as cocoa comes down and as we reap the benefits of all these actions that we're taking. These are non-regrettable actions. We are not going to touch the formulation of our products, and so you can still enjoy Milka and Cadbury and all the beloved brands that we have as they are today. We are not going to change cocoa content or anything because of this. Again, our goal is to keep chocolate intact as a category as we move forward. Great. Dirk, moving to North America, Mondelez is stepping up some promotional price points on more value-oriented brands, such as Chips Ahoy! But more importantly, with the consumer's definition of value having shifted, Mondelez is now also rolling out new package configurations, which should enable the company to hit sort of key absolute price points more in that $3-$4 range. So it's even consumers that are shopping with a fixed overall food budget should be able to include biscuits in their basket more frequently. On your recent earnings call, you mentioned, while still early, you were seeing some green shoots. We've seen some of that in the most recent data. How have things progressed since, and how much improvement is needed here to reach your annual overall corporate growth target for the year? Yeah. You phrased it well, Andrew. The consumer, particularly the lower socioeconomic class consumer, let's say family income below seventy-five thousand, has shifted their way of shopping, and they're now shopping towards an overall price for the basket. While in the past, they were really looking at the best price for that item, the overall price of the basket was not that important. We have adapted. This consumer is also shifting channels where they buy, and we're adapting to those changes with the things that you mentioned. What are we expecting to see? The first thing is that the biscuit categories, which is our main category, is stabilizing, and that is the case. We're seeing slight volume growth at the moment, nothing to get too excited about, but from negative volume growth, now it's flat to slightly positive. The second thing that we are looking for is what is happening to our market share. Our market share is improving. And then third, does that translate into positive volume growth for us in the second half of the year? And so far, after two months, that it is the case. So, as we have targets where North America needs to come to, the U.S. needs to come to in the second half, we are totally in line with those targets right now. So after two months, we feel pretty good of where we are. Great. And Dirk, you know, a big activation in the U.S. and beyond, right, is the partnership with Coca-Cola. Can you talk a bit about why you're excited about this activation, and what's important for investors to know about it? Yes. We are excited because it's the biggest activation we've ever done on Oreo, so and we already see it in the volume. It's gonna be double the volume of any other activation we've done so far. The reason why we do it on Oreo is that Oreo is a bit of a becoming or is a bit of a cultural icon of today's world. It's a playful brand that does quirky things always reflected into a unique cookie that goes with that activation. So, for instance, we've done a Star Wars Oreo or a Space Dunk Oreo. We've done Star Wars Oreos, sorry, and Space Dunk Oreo. Now there's the Coca-Cola Oreo and the Oreo flavored Coke Zero. So, it creates a buzz, these things. I mean, if you haven't had either item, I would strongly recommend. But when consumers can be part of that, they start to post it on social media, clients get excited. They give us more space, bigger space with our normal items. Doesn't only have to be the activated item. We get a lot of press around it. So the loyalty of our consumers, the interest of the brand goes up. We get new people into the brand that wanna taste this Coke-flavored Oreo. It makes sure that we keep on having this ongoing series of activations. So we have to come back with these things, but our team has been quite good in coming up with the new things. And overall, it builds up the overall stature of Oreo. What's also important this time is that, we've done a lot of these in the U.S. This is the first time we're doing a global activation, so it's in many countries around the world where we'll see these two products. Right. Dirk, shifting to emerging markets, you've set a target, I think, to add about three million new stores by 2030, which is about a 25% increase over 2023 levels. I think I have that right, but correct me if I'm wrong. I guess what will it take to make good on those gains, both in terms of time and incremental investment, and how do you think about prioritizing, you know, individual markets? Mm-hmm ... and what markets are likely to be prioritized? Mm-hmm. I don't know exactly what the number is that we- Mm ... that we said, but if I take 2023 as an example, we've added 600,000 stores to our distribution. The countries that are getting prioritized are the big emerging markets. So we talk about India, China, Brazil, and Mexico. If I go through it and to give you an idea of what's still possible for us, in China, we're now in 3 million stores. We've added last year about 120,000 new stores. That is a rhythm that we will continue. China, really, for us, is a universe of 6 million stores, so in half of the universe, adding, let's call it, 100,000 to 150,000 new stores every year. India is a universe of 9 million stores. We are now direct or indirect in about three million stores. We've added last year, 180,000 new stores. We've added 120,000 already in the first half of this year. So India, even a bigger opportunity for us to keep on growing. It is, it is profitable, so we sell well in those stores. In India, also, apart from getting into new stores, since we are mainly a chocolate player, we have to put what's called Visi coolers, which keep the chocolate refrigerated. So since 2019, we've placed about 700,000 of these, the Visi coolers that go on the counter in the convenience stores or in the traditional stores. The other one last year, which started to really motor, is Brazil. We've added 120,000 stores, and then the rest is in different emerging markets. That rhythm we continue to keep up, so we will add 3 million or more by 2030. Got it. The other thing I would say, those investments are into our algorithm. It's not like we had to do special investment last year, which we cannot repeat this year. No, we are building into our algorithm, and we are also building in for 2025, the investment in that expansion of distribution, plus the renewal of what could be necessary, for instance, in Visi coolers and so on. Right. You've also made some investments recently in Mexico, with Ricolino, adding some significant distribution capability. Maybe you can talk a little bit about the rationale behind that acquisition, how that integration's gone, and what you see in Mexico at the moment. Yeah. So in Mexico, we have a full spectrum, so we are a player in chocolate, we're a player in biscuit, we're in gum and candy. But historically, our business was largely gum and candy. And so with the acquisition of Ricolino, that put us in the chocolate, and we had started to launch our biscuit range into Mexico. Ricolino, the other big benefit of Ricolino is that they cover about 400,000 stores, which a lot more than we were covering traditionally. So suddenly, we have a universe of stores that is opening up for us, and we are actively rolling out now, particularly our biscuit range, Oreo, in the first place, but also Chips Ahoy, into those stores. So the overall strategy of why we did it and what it's supposed to do for us is working. The integration went well. There's many integrations that need to take place. The biggest one was opening. Because it was a carve-out out of Bimbo, Ricolino was opening over 100 new distribution centers, brand new, and activating those. That has gone well. Then we are integrating the routes, which we're doing at this stage. So they had routes, we had routes, we have to integrate it, and there was a system integration. The system integration was a little bit more difficult than we anticipated, so we had some hiccups in Q1. In Q2, because of the Mexican election, consumer in Mexico feels great because about 80% of the consumers are affected in one way or another by government subsidies. The minimum wage has doubled in recent years, so consumer feels really good, but during that election period, they stopped those subsidies, so consumer was really affected by that. So offtake went down a little bit, and we're now also starting to see a little bit of a reaction to pricing, so we have to adapt our pricing. So I would say 2024 is a so-and-so year as it relates to our performance. We have issues that we are dealing with, but overall, the premise of why we did it and what it's gonna deliver for us is still very intact. Got it. And Luca, maybe turn into capital allocation and M&A. And, you know, in light of the recent sort of Mars announcement, can you remind us and investors how to think about your M&A strategy? Has anything changed in this current environment or similar? It's very similar. We like, for, mostly bolt-ons acquisitions, of the likes we have done, in the last few years. If you think about Clif, if you think about Ricolino, if you think about Give and Go. The way we look at these is, in markets where we don't have enough scale, we are not necessarily obsessed by acquiring, biscuits, chocolate or baked snacks. In the case of Ricolino, for instance, there was a presence in a candy sector, but again, that would allow us to go and distribute, Oreo and to make Oreo much bigger in Mexico. So in these markets where we don't have enough scale, we are looking obviously at our core categories, but not necessarily. We are looking at adding scale and making sure that, again, we can get revenue synergies through our core categories. In markets where we are at scale, we are looking for assets that are chocolate, biscuits, and importantly, in cakes and pastry. We keep on being very excited about cakes and pastry. It is a massive category. It is a category that grows very fast. It is a category that allows branded products that we have in our portfolio to really thrive. And so that's really the focus. In terms of targets, I would say most of the targets we are looking at are privately owned, and so there is no perfect timing. We don't control timing. We have good relationships with the owners. I think you saw that we come up with structures where there are earn-outs and where we keep management and ownership in place just to guarantee continuity. I didn't mention as a category, we are looking at snack bars at this point in time. Between what we acquired through Clif and what we have with other brands like Grenade and Perfect Snacks, I think we have, in our set of brands, enough platforms that we could roll out geographically and expand, given that that category is nascent in many places, but it is still quite a big opportunity in our eyes. So nothing has really changed. I think the balance sheet is very strong. I remind that we still have our coffee stake, and then there are some categories that are non-snacks that we could potentially divest should an acquisition come to fruition. Dirk, Luca brought up cakes and pastries. I know that's an area that you are excited about globally. Can you talk a bit more about the assets that you currently have in that space, and what makes this such an attractive space as you see it? Yes, yes. I'll start with the space and then the assets. So, cakes and pastries, the way I try to explain it is, if you imagine the biscuit aisle, which is probably crackers and sweet biscuits, in Europe, particularly a little bit less in the U.S., across from that aisle, you will find a whole space with softer offerings, cakes and pastries offerings, basically. So it's a natural extension of the biscuit space. It's a space that's very fragmented. It's about $80 billion market, globally. Slightly smaller, but not a lot, than chocolate and biscuits. But in certain markets like China, where chocolate is $4 billion, biscuits is $8 billion, cakes and pastries is a $30 billion market. The other reason why it's interesting for us is that the brands we have in chocolate or biscuits have a natural right to play in that space, so it is a natural extension for us. Another reason, it's very fragmented, sometimes quite basic products. So for us to come in with high-value brands, with innovations that premiumize that category, gives us a right to play. So we're quite excited. It's a category that's growing well, in line with the biscuit category globally. Higher net revenue per kilo than biscuits. So these are all the reasons why we like this space. It's sort of a natural extension for us. How we want to play is what I explained with big brands, premiumized, going into what's most exciting in this category. So the items that we have, one is, it's called Chipita. It's a company that was based out of Greece, but it's largely sold at this stage in most Eastern European countries, but it has started to have presence in the Middle East, in Mexico, and so on. It's largely a packaged croissant. It's more of a meal replacement snack, mid-morning snack, with a coffee, at an acceptable price point. Very high penetration in middle class and lower social class consumers. The opportunity there is to innovate with some of our chocolate brands, have a higher distribution in the existing countries, and then extend worldwide. We're testing several countries around the world, but as I was saying, even before we bought the company, they were already having success in Mexico, in Malaysia, in Saudi Arabia. They're doing well in India. So we see this as an item that could go worldwide. The second interesting evolution in this space is, if you think about the in-store bakery in the U.S. or the bakeries in Europe, they are switching more and more to a freeze and thaw model, whereby they receive their cakes and pastries from a factory, frozen, and they thaw on the way over there, and then are presented as fresh to the consumer. That is very interesting for a retailer, because if they have to make it in store, that has a lot of labor related to it, a lot of waste, and so we will see a shift gradually over time towards that freeze and thaw approach. Give & Go, the company that we bought, was about a $400 million company four years ago. It's already a $700 million company now. It's the biggest player in this space in North America. We're in the same thing in croissants, brownies, biscuits, and so on. It's what you find into the bakery space. That is a high value-added, high net revenue per kilo segment that spikes the interest of the retailers. We've started to bring in our brands, Oreo and so on, and so we think that's gonna be a development space globally in cakes and pastries. Right. Maybe in the last minute, you've talked about it. It's obviously too early to talk about specific 2025 guidance. It's clearly too early to talk about 2026 guidance, but is the thinking that, you know, the goal is to sort of end up in 2026, sort of where you would have under what a normal cocoa environment, but the path there just may be a little different than typical, because next year you've got greater inflationary pressure, but in theory, if cocoa somewhat normalizes, potential for outsized growth in 2026. Am I thinking about that generally the right way? Yes, you are. The 2025 P&L for the non-chocolate part of the portfolio is going to be on algorithm or slightly ahead of our declared algorithm. I would say chocolate, as I said, will be managed for the long term, so retaining volume and share as much as possible, and importantly, making sure that that P&L is sustainable at the cocoa levels that we're gonna see going forward. Yeah. And so if we retain volume, if we play wisely and retain or gain share, I think a normalized level of cocoa will allow us to really have a very good 2026. And importantly, as I said, we are implementing cost measures- Yeah ... which eventually, with cocoa stabilizing and going down, will allow us to have more headroom within the P&L and, either do selective investment or drop it, the benefit, to the bottom line. But the reality is, if cocoa adjusts and we manage cocoa and chocolate as a P&L right in 2025, 2026 should be- Yeah - A very good year, and so you have to see, like, 2026 as, us being where we would've been- Mm-hmm ... absent the cocoa inflationary pressure. Great. Hey, can you give us an update on Clif? That was a big acquisition a few years ago. How is that going for you? Right. Why don't we do this, because we're right up against time. But Mondelēz is gonna do a breakout, so why don't we roll into the breakout right next door, and we can take that question in there, if that's okay? Please join me in thanking Dirk and Luca for being here today.