Mondelez International

We assess multiple durable moat sources anchored in brands and scale. Intangible assets: very strong.

Oreo, Cadbury Dairy Milk, Milka, Toblerone, Ritz, LU and local jewels command premium shelf space and high awareness across regions; 2024 net revenues were 36.4 billion dollars with biscuits and baked snacks at 17.8 billion and chocolate at 11.2 billion, underscoring brand breadth and relevance.

Score 90. Cost advantages: global procurement, manufacturing footprint and productivity programs provide unit-cost benefits, visible in pre-shock gross margins and ability to price through inflation over 2022-2024; despite 2025 headwinds, structural scale remains.

Score 75. Switching costs: low in a strict sense, but habit formation, taste preferences and promotional ecosystems create behavioral stickiness; retailer planogram commitments add friction. Score 60. Network effects: minimal in classic sense.

Score 5. Efficient scale: category leadership and shelf economics deter local entrants and support advantaged trade terms; concentrated retail customers can pressure, but incumbency helps.

Score 70. Weighted blend (brand 45%, cost 25%, efficient scale 20%, switching 8%, network 2%) yields 84. Key erosion paths: sustained private-label trade-up if price gaps stay wide, retailer consolidation, regulatory sugar taxes, and prolonged commodity spikes that narrow branded price-value.

Evidence base: MDLZ 2024 Form 10-K category and regional data; 2025 Q3 and Q2 releases show pricing resilience despite volume softness.

Pricing power is above average for staples, grounded in brand equity and execution. 2025 saw multiple rounds of pricing to offset cocoa and freight, with organic revenue still positive, but elasticity rose in Europe and North America, and mix was unfavorable as consumers traded down.

Q3 2025 gross margin fell to 26.8% and operating margin to 7.6% due to cocoa shock, though management maintained positive organic growth and highlighted productivity and targeted investments. Longer term, we expect pricing to normalize with cocoa, restoring margins toward mid-cycle levels.

Risks: aggressive retailer pushback, private label in biscuits, and consumer sensitivity after two years of price increases. Evidence: Q3 2025 release and updates indicating 3.4% organic growth with volume/mix −4.6%, and press coverage of trimmed 2025 EPS outlook tied to cocoa.

The business sells small-ticket, high-frequency indulgences with recurring demand and broad geographic diversity. Revenue has compounded from 26.6 billion dollars in 2020 to 36.4 billion in 2024, aided by organic growth and bolt-on deals.

Cash generation is typically steady, but 2025 FCF is temporarily depressed by commodity and working-capital dynamics: FY24 FCF was about 3.5 billion, while YTD FCF through Q3 2025 was about 1.2 billion with a TTM near 2.2 billion. Management’s 2025 guidance was cut given cocoa, then modestly trimmed again in Q3, which we view as cyclical.

We also note exposure to FX and select country risks. Overall, predictability is high for a discretionary-staples category, albeit not visa-level tollbooth quality.

Liquidity and leverage remain acceptable for a large-cap staples issuer.

As of September 30, 2025, total debt was about 21.3 billion dollars, cash around 1.37 billion, and net debt about 20.0 billion; debt-to-capitalization was roughly 0.45. The company expects 2025 FCF of 3+ billion dollars in a stressed year and continues to run an investment-grade profile with staggered maturities and ample committed credit lines (including new 364-day and 5-year facilities executed in Q1 2025).

Leverage ticked up in 2025 due to working capital, hedging and capital returns. We see no solvency risk, but near-term cocoa volatility reduces cushion. Evidence: 2025 Q1 and Q3 10-Qs for debt, cash and facilities; 2024 10-K for maturity ladder.

Track record is solid. Strategy is to focus on core snacking categories, sharpen the portfolio and reinvest behind brands and capacity.

Executed acquisitions (Chipita, Ricolino, Clif) expanded growth adjacencies and geographies; developed-market gum was divested in 2023. In December 2024 the Board authorized a new 9 billion dollar buyback effective 2025-2027; about 31 million shares were repurchased in the first nine months of 2025 alongside a 6% dividend raise to 0.50 per quarter.

We like the discipline and timing historically, though 2025 buybacks while FCF is cyclically depressed and cocoa is peaking modestly constrain flexibility. Integration execution for Clif and Chipita remains an ongoing task. Evidence: buyback authorization release, Q1 and Q3 10-Q repurchase tables.

Management under the Chair/CEO has shifted the portfolio toward higher-return snacking, strengthened emerging-market presence and delivered multi-year organic growth with consistent capital returns.

Communication around the cocoa shock and 2025 guidance has been transparent, with increased emphasis on productivity and selective reinvestment for volume recovery.

Areas of concern include reputational risk and stakeholder criticism over continued operations in Russia and related boycotts in the Nordics, which present ongoing ESG and brand perception risks, and require careful governance. Overall execution is competent and owner-like on capital priorities, but the Russia stance tempers the score.

Evidence: company releases, 10-K, and reputable press coverage of the Russia situation.