Balance Sheet Analysis

Balance Sheet Analysis

As of December 31, 2023, Mondelēz International reported total assets of $71.4 billion, a slight increase from $71.16 billion as of December 31, 2022. This relatively stable asset base reflects the company\’s steady state of operations and financial stability.

Among these assets, intangible assets (net) amounted to $19.8 billion, and goodwill was valued at $23.9 billion. Combined, these intangible components totaled $43.7 billion, representing a significant 61.2% of the company\’s total assets. This substantial figure highlights Mondelēz International\’s extensive history of acquisitions, as these intangible assets and goodwill typically arise from purchasing other companies and paying premiums over their book values. Such a high proportion of intangible assets can indicate that Mondelēz International has invested significantly in brands, patents, and customer relationships, which are critical for maintaining its competitive edge in the global market.

On the liquidity front, as of December 31, 2023, total current assets stood at $11.7 billion, whereas total current liabilities were $19 billion. This results in a current ratio of 0.61 times, which might initially suggest liquidity concerns, as it is below the generally acceptable threshold of 1. However, Mondelēz International\’s robust operating cash flows indicate that the company manages its short-term liabilities efficiently. The speed at which it collects receivables outpaces its payment cycle to suppliers, mitigating immediate liquidity risks.

The total liabilities of Mondelēz International were $43 billion as of December 31, 2023, yielding a debt ratio of 60%. This high debt ratio points to a significant leverage level, underscoring reliance on debt financing. Yet, this must be contextualized with the company\’s strong cash flow generation capabilities, which were $4.7 billion, $3.9 billion, and $4.1 billion over the past three years. This cash flow strength supports the company\’s ability to manage and service its debt effectively, even with a high leverage ratio.

Profitability Analysis

Mondelēz International\’s revenue trajectory has been positive over the past three years. The company reported revenues of $36 billion in 2023, a 14.3% increase from $31.5 billion in 2022. The previous year, 2022, saw a 9.8% increase from $28.7 billion in 2021. This consistent revenue growth reflects the company\’s ability to enhance its market share, possibly through strategic acquisitions, effective marketing strategies, and product innovations.

In terms of profitability, the company achieved a net income of $5 billion in 2023, a significant rise from $2.73 billion in 2022. This substantial increase indicates improved operational efficiency and possibly higher profit margins. In 2021, the net income was $4.3 billion, showing some volatility but generally upward profitability trends. These figures underscore the company\’s strong financial performance and ability to generate shareholder value.

Cash Flow Analysis

Examining the cash flow statements, Mondelēz International has demonstrated robust operational cash flow over the past three years. Net cash provided by operating activities was $4.7 billion in 2023, $3.9 billion in 2022, and $4.1 billion in 2021. These figures highlight the company\’s strong cash-generating ability from its core business operations.

Capital expenditures were relatively stable, with $1.1 billion in 2023, $906 million in 2022, and $965 million in 2021. This consistent investment in capital assets suggests ongoing efforts to maintain and expand operational capacity and efficiency.

Free cash flow, an important indicator of financial health, was $3.6 billion in 2023, $3 billion in 2022, and $4 billion in 2021. The strong free cash flow positions the company well for future investments, debt repayment, and potential shareholder returns through dividends or stock buybacks.

Mondelēz International’s Operating Performance for Q1 2024

For the first quarter of 2024, Mondelēz International reported revenue of $9.3 billion, slightly up from $9.17 billion in the same period in 2023. However, net earnings for Q1 2024 were $1.4 billion, a decrease from $2.1 billion in Q1 2023. This decline in net earnings may warrant further investigation to understand the underlying factors, such as increased costs, one-time expenses, or other operational challenges.

Conclusion

Mondelēz International\’s stock is currently priced at $68.53 per share, translating to a market capitalization of approximately $90.92 billion. Based on the analysis, we estimate a reasonable valuation to be around $40 billion, suggesting that the stock may be overvalued at its current price. This assessment takes into account the company\’s strong financial performance, significant intangible asset base, and robust cash flow generation, balanced against its high debt ratio and recent fluctuations in net earnings.

In summary, while Mondelēz International demonstrates strong financial and operational fundamentals, potential investors should consider the current valuation carefully, along with the company\’s debt levels and recent profit trends, before making investment decisions.

Disclaimer: The content is for reference only and does not constitute investment advice.

 

Introduction

Mondelēz International’s purpose is to empower people to snack right. We sell our products in over 150 countries around the world. We are one of the world’s largest snack companies with global net revenues of $36.0 billion and net earnings of $5.0 billion in 2023. Our core business is making and selling chocolate, biscuits and baked snacks. We also have additional businesses in adjacent, locally relevant categories including gum & candy, cheese & grocery and powdered beverages. Our portfolio includes iconic global and local brands such as Oreo, Ritz, LU, CLIF Bar and Tate’s Bake Shop biscuits and baked snacks, as well as Cadbury Dairy Milk, Milka and Toblerone chocolate.

 

 

 

 

Balance sheet analysis

Mondelēz International’s total assets were $71.4 billion and $71.16 billion as of December 31, 2023 and as of December 31, 2022, respectively.

 

As of December 31, 2023, intangible assets, net were $19.8 billion and goodwill was $23.9 billion. The amount of two combined account was $43.7 billion, accounting for 61.2% of total assets. The $43.7 billion is very huge, which mean that the company completed a lot of acquisitions in the past.

 

Total current assets were $11.7 billion and total current liabilities were $19 billion as of December 31, 2023.

The current ratio was 0.61 times, which is low, but the company’s liquidity is very good as the speed of collecting payments is much faster than the speed of paying suppliers.

 

Total liabilities were $43 billion as of December 31, 2023.

The debt ratio was 60% for 2023.

Actually, the debt ratio was very high, because the combined amount of goodwill and intangible assets accounted for a lager proportion of total assets.

The debt could be remained as Mondelēz International generated strong cash flow of $4.7 billion, $3.9 billion and $4.1 billion over the three years.

 

Profitability analysis

Mondelēz International’s revenue was $36 billion, $31.5 billion and $28.7 billion in 2023, 2022 and 2021, respectively.

The revenue in 2023 was up 14.3% year on year.

The revenue in 2022 was up 9.8% year on year.

Net income was $5 billion, $2.73 billion and $4.3 billion in 2023, 2022 and 2021, respectively.

 

Cash flow analysis

Net cash provided by operating activities was $4.7 billion, $3.9 billion and $4.1 billion in 2023, 2022 and 2021, respectively.

Capital expenditure was $1.1 billion, $906 million and $965 million in 2023, 2022 and 2021, respectively.

Free cash flow was $3.6 billion, $3 billion and $4 billion in 2023, 2022 and 2021,respectively.

 

Mondelēz International’s operating performance for Q1 2024

Mondelēz International’s revenue was $9.3 billion and $9.17 billion for the three months ended March 31, 2024 and the three months ended March 31, 2023.

Net earnings was $1.4 billion and $2.1 billion in Q1 2024 and Q1 2023, respectively.

 

Conclusion

Mondelēz International stock price is $68.53 billion per share, which is equivalent to $90.92 billion in market capitalization.

We reckon that the reasonable valuation is about $40 billion and Mondelēz International stock price is overvalued.

Disclaimer: The content is for reference only and does not constitute investment advice.

 

Introduction

Mondelēz International’s purpose is to empower people to snack right. We sell our products in over 150 countries around the world. We are one of the world’s largest snack companies with global net revenues of $36.0 billion and net earnings of $5.0 billion in 2023. Our core business is making and selling chocolate, biscuits and baked snacks. We also have additional businesses in adjacent, locally relevant categories including gum & candy, cheese & grocery and powdered beverages. Our portfolio includes iconic global and local brands such as Oreo, Ritz, LU, CLIF Bar and Tate’s Bake Shop biscuits and baked snacks, as well as Cadbury Dairy Milk, Milka and Toblerone chocolate.