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Date

Tuesday, Feb. 3, 2026 at 5 p.m. ET

Call participants

  • Chairman & Chief Executive Officer — Dirk Van de Put
  • Chief Financial Officer — Luca Zaramella
  • Vice President, Investor Relations — Shep Dunlap

Takeaways

  • Chocolate Pricing Strategy -- Management expects "flat pricing" for chocolate in 2026, supported by locked-in cocoa costs despite the recent sharp decline in spot cocoa prices.
  • Volume and Consumption Trends -- Penetration rates for key brands remain stable, but consumption frequency and quantity decreased across markets; initiatives are targeting restoration of typical consumption patterns.
  • Inventory Accounting Impact -- Chief Financial Officer Luca Zaramella said, “that is a one-time adjustment that takes place on the inventory, and that is causing in the first February, but predominantly in Q1, an impact that is at a billion dollars.”
  • Guidance Range Rationale -- The guidance range for 2026 incorporates "recent and sudden cocoa dynamics" and potential shifts in competitor behavior, creating near-term uncertainty.
  • Emerging Markets Outlook -- High single-digit growth was achieved in emerging markets in 2025; similar volume-driven momentum is embedded in 2026 guidance, with less pricing contribution expected.
  • North America Performance -- The U.S. biscuit category declined 4% in volume over the last three months and 3% for the year; management does not expect immediate turnaround in consumer sentiment or category volumes.
  • Advertising & Consumer Investment -- Annual A&C (advertising and consumer) investment is set to "substantially" increase from 2024 to 2026, with 2025 A&C spend having been down, largely due to reductions in nonworking media.
  • 2026 Organic Sales Guidance -- The company is guiding to 0%-2% organic sales growth for 2026, assuming emerging markets strength and anticipated developed market declines in low- to mid-single digits.
  • Profit Recovery Timing -- Profitability in chocolate is expected to materially improve in 2027 as lower cocoa input costs, already locked for 2026, begin to impact margins.
  • Long-Term Volume Risk from GLP-1 -- Dirk Van de Put said, “if we expand ten years and we take an adoption rate in The US, which would be somewhere between 10%-20%. And, even then, we do not see a significant effect on our overall business. We believe that over that period of time, it could have a 0.5% to 1.5% effect on our overall volumes.”
  • Strategic Cocoa Sourcing -- The company is diversifying cocoa sourcing with increased investments in Latin America and Asia, and exploring lab-grown cocoa as a future risk mitigation effort.
  • Supply Chain Modernization in North America -- A multi-year program to modernize operations and expand network flexibility is underway, expected to improve efficiency and costs.

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Risks

  • Chief Executive Officer Dirk Van de Put said, "we saw higher than expected elasticity" in Northern Europe, requiring pricing and pack adjustments for 2026.
  • Management highlighted "short-term pressures" from the sharp cocoa price decline, with potential for "unexpected competitive reactions."
  • Zaramella noted, "the biscuits category is still subdued" in the U.S, with plans for only "marginal improvements in the second half" of the year.
  • Initial 2026 profit in Europe faces "headwinds" due to inventory accounting, with "higher cost in the first half versus the second half."

Summary

Mondelez International (MDLZ +1.33%) leadership confirmed that chocolate pricing will remain unchanged for 2026, despite a recent, unprecedented drop in cocoa spot prices, due to prior hedging at higher cost levels. Inventory accounting will produce a notable one-time $1 billion expense in the first quarter, temporarily pressuring reported profitability. Management projects organic sales growth of 0%-2% for 2026, driven by steady emerging market volume expansion and anticipated declines in developed markets. Advertising and consumer investment will meaningfully increase over the 2024-2026 period, with spend focused on restoring consumption frequency and quantity rather than expanding brand penetration. Looking to 2027, executives anticipate lower input costs will facilitate a significant chocolate margin recovery as hedged cocoa prices reset, complemented by ongoing investment in brand support and innovation.

  • Volume growth in 2026 is expected to come primarily from AMEA and Latin America, with North America projected to stabilize rather than expand.
  • European chocolate margins are not expected to meaningfully recover until 2027, as management pointed to "selective price investments" and increased promotions in 2026 as foundational for a profit rebound the following year.
  • Planned step-up in working media spend is intended to drive volume as the first base of growth while only part of the anticipated margin benefits from cocoa cost normalization will flow to the bottom line, with the rest reinvested in the business.
  • Management does not foresee a major near- or long-term volume impact from GLP-1 adoption, estimating only a 0.5%-1.5% effect over a decade under a 10%-20% adoption scenario.

Industry glossary

  • PPA (Price Pack Architecture): Strategic adjustments to product pricing, package size, or format to align with consumer affordability and demand.
  • A&C (Advertising and Consumer): Expenditure category covering advertising and consumer activation investments.
  • AMEA: Asia, Middle East, and Africa operating segment within Mondelez International’s regional reporting structure.
  • GLP-1: Glucagon-like peptide-1 receptor agonists used for the treatment of diabetes and weight management; cited as a potential long-term impact on snack food consumption.
  • Working Media vs. Nonworking Media: "Working media" refers to advertising spend directly used for consumer-facing campaigns; "nonworking media" includes support and overhead marketing costs not directly reaching consumers.

Full Conference Call Transcript

Our first question comes from the line of Andrew Lazar with Barclays. Please go ahead.

Andrew Lazar: Great. Thanks very much. Good afternoon, everybody. Hi, Andrew. Hi. Hey there. Dirk, maybe to start us off, clearly, significant interest in, obviously, the chocolate category and how the precipitous fall in cocoa could impact the dynamic. Where is Mondelez currently on its chocolate strategy? How does it play out from here? Particularly as it relates to, you know, the potential for some price deflation in areas where obviously, significant pricing has been taken.

Dirk Van de Put: Yes. Thank you, Andrew. I would start off by saying that if you look at 2025, and the overall chocolate market in the world, it has shown a lot of resilience. Despite all the volatility and important price increases that took place, the category overall remained strong. We had a playbook for our chocolate strategy, which was largely to price list price, or do revenue growth management largely through price pack architecture. And we've executed well against that chocolate playbook in 2025. If you then look at the markets around the world, I think places like India, Brazil, Australia, South Africa, some of our bigger chocolate markets, have done quite well.

And also in Europe, in about half of the markets, things played out exactly as expected. However, I would say in the more northern markets in Europe, Germany, The Nordics, The UK, we saw higher than expected elasticity so we have to take adjustments in 2026. We have learned that certain price points are very important. So we have adjusted already to put our products at the right price point. Some of the PPA worked, others didn't. So we are adjusting also some of the PPA we have in the market. We are planning to increase our investments behind our brands because in this year, our cocoa coverage is at a better cost than it was in 2025.

So we are able to increase substantially investment behind our brands, and we do that because we want to get back to the normal frequency and quantity of consumption that we've seen. Penetration hasn't gone down, but the frequency and the quantity of consumption did. We are also investing in price. As I mentioned, to hit those right price points. And as well in new PPA. We're going to push hard on innovation. We have the collaboration with Biscoff, which was very successful in 2025, but it really is going to go to the next level in 2026. So I think we've got a very strong innovation agenda led by Biscoff with a number of other things in Europe.

And then we are going to have some important activations in store. However, as you probably have seen in the last two weeks, suddenly the cocoa price has declined more than anybody would have expected. And this will have some short-term pressures largely as it relates to probably having an industry or the largest players in the industry that they have already covered for 2026 at a higher price than the current market price. And this could maybe give us some unexpected competitive reactions. And so we want to build in some flexibility in our guidance because we don't quite know how that is going to play out in the market in 2026.

What is good in all of this is that cocoa now has returned to a level that is much more in line with the historic price that we've seen. And that bodes very well for 2027. As I said, we're already covered for 2026. There's not a lot we can do anymore, but 2027 certainly will benefit from this. So we see our chocolate business in 2027 increase its margin in a considerable way. As it relates to 2026, like I said, we're going to remain very agile. We're going to do all the things that we said and then make sure we enter 2027 with a lot of strength.

We are planning to go through a lot more detail on what our chocolate strategy is during the CAGNY conference, so I would certainly invite everybody to come and listen to us there.

Andrew Lazar: Great. Really helpful. Hopefully, arrange to get some of the Biscoff stuff down there as well. That's just a personal favorite. And then, Luca, maybe shifting gears over to the Outlook. Maybe what's your thought process on the guidance range and sort of investment flexibility that Dirk mentioned in light of the fall in cocoa costs. What are your updated thoughts on sort of the cocoa environment, if you will, from here? Thanks so much.

Luca Zaramella: Yeah. Thank you, Andrew. So before commenting on the 2026 guidance, maybe a brief comment about how we ended the year. And I think, as we said, we are quite happy with our market's momentum. And quite frankly, happy because we saw sequential improvement in developed markets, albeit we are not fully there yet. On 2026, the guiding principle of the guidance was to be prudent. Particularly as we see some short-term pressure points like in The US, you know that the biscuits category is still subdued, and, you know, the plan is that it will continue like that for the first half at least. With some marginal improvements in the second half.

In Europe, we have planned for a chocolate category that is stable after the meaningful prices that were taken. But we also planned for some disruption due to the usual customer negotiation process that takes place in the first part of the year. The main reason for the guidance range is that recent and sudden cocoa dynamics might require some flexibility. Depending on how competitions will react to those prices and where cocoa eventually will stabilize. As we said, our pipeline cost for 2026 is determined at this point in time. And it is clearly at a higher than the current cocoa spot. So this is something that we hadn't anticipated before.

And, as we said, it just happened in the last couple of weeks. Our objectives are clear. We want to win with the consumers. We want to win in the market and that's one of the reasons why we are investing such substantially behind our brands. And, hopefully, the goal is to have improved volume trajectory, particularly as we move through the year. On the phasing, maybe just one word. I commented already on the customer disruption in Europe in the first part of the year, but on profit, given the way our inventory accounting works, we will face some headwinds, and we mentioned that in the prepared remarks.

On cocoa, I said it a few times, and I believe fundamentally nothing has changed. If you look at supply and demand, the dynamics were clear well before the last couple of weeks. And so I believe what the market is recognizing now is maybe a little bit overdue. Obviously, we would have liked a little bit more of a balanced approach to the weigh down of cocoa. It happened all of a sudden. But reality is that, in our mind, cocoa as it stands now is a better representation of supply and demand. And that's why we believe this level is important for us to realize as we look at profitability particularly going forward into 2027 and beyond.

Andrew Lazar: Thanks so much.

Luca Zaramella: Thank you, Andrew.

Shep Dunlap: We'll now move on to Peter Galbo with Bank of America. Your line is now open.

Peter Galbo: Hey, good afternoon, Dirk and Luca. Thanks. Thanks for the questions. Luca, maybe if I can actually pick up on the comments you just made around some of the phasing more on the cost side. I know that you mentioned, I think the lion's share of it comes in the first quarter. So maybe you can just talk us through a bit more the cost phasing on cocoa through 2026. And then maybe how we would think about the phasing on potential price investments in chocolate over the balance of the year?

Luca Zaramella: Thank you, Peter. So fundamentally, maybe I'll start with the top line because I think that's a clear component of how we think about the plan in 2026. As you might imagine, at this level, we are not going to price cocoa further, but it is also important to know that our profit took quite a material hit in 2025. And so we were not certainly fully priced at the level of cocoa in 2025. And, albeit the pipeline cost is coming down in 2026, we need to keep a level of pricing that is pretty much the same as we have in 2025.

In terms of cost, the way our inventory accounting works is that we will have to adjust the level of inventory in the first day of the year to the actual pipeline cost that we see in 2026 versus how we exit the year in 2025. And that is a one-time adjustment that takes place on the inventory, and that is causing in the first February, but predominantly in Q1, an impact that is at a billion dollars. And that gives you an idea of the costs that we see throughout the two years.

So in terms of top line, I would say in chocolate specifically, flat pricing, in terms of volume, some implications as the risk of disruption, as there is customer disruption in Europe. And in terms of cost, higher cost in the first half versus the second half. And so as we move through the year, I think you're going to see a sequential improvement of volume and revenue, but most importantly, in terms of EBIT phasing. In all of these, investments in A and C is equally spaced throughout the quarter, so no material changes I would say, quarter on quarter in absolute terms. Of our AFC investment.

Peter Galbo: Great. Thanks for that, Luca. And, Dirk, maybe to pivot to North America. I mean, I know it continues to kind of be a difficult operating environment. You know, volume trends are still a bit weak. There's a view maybe that this is more k shape or cyclical tide versus structural and maybe in the context of just one of your largest peers announcing price cuts today in the snacking category, would just love to get your perspective on, you know, the North American market, where you stand on that debate, and, on the pricing front, kind of what the go forward actions might look like there? Thanks very much.

Dirk Van de Put: Okay, Peter. Well, first of all, think the thing in North America is the consumer. The consumer confidence is near historic low. They're worried about overall affordability. They are fed up with the price increases. They don't feel good about their personal economic outlook. They doubt about job security. So what we are seeing is that the average shopping basket of the consumer in The US, whether you're in the higher or in the lower, social economic classes, has not increased for the last two, three years. Within that basket, they have spent more money on the basics milk, meat, bread, and so on, and as a consequence, snacking is being affected.

And you can see that in all of the snacking categories. You talked about the k-shaped economy. There's clearly a group of consumers, more wealthy consumers, that do spend differently in the sense that you can see that things like premium and better for you are growing within the snacking markets, also some on the go. But the bulk of the consumers, they are really into value seeking. So what they do is they look for lower unit prices. They look for deals. If they have a bit more money, they will look for bulk packs or multipacks. And they also shift channels in from food and mass into value, club, and online.

As you said, the biscuit category is showing a soft volume. It was the last three months, it's down 4% in volume. Through 3% for the year, 2025. So overall, we don't necessarily see an immediate change as it relates to where the consumer is. As a consequence, we need to adapt to these circumstances. So what do we do? We are going to invest more to drive awareness. We see the same as in chocolate in Europe, and it Penetration of our brands is not decreasing, or sometimes just a little bit. It's largely the frequency and the quantity bought that is being affected. So we're going to invest in improving that frequency and the quantity bought.

We're going to use PPA to address some of the affordability. We are expanding in some of these channels that I was mentioning. We are under-indexed, so we are pushing harder, and we are increasing our market share. And we have offerings that are doing well. I'm thinking about the perfect bar, which is a protein offer. Or a dates of premium biscuit or a you premium in chocolate. Or builders bar in the cliff range, which is also protein. They are all doing well, growing double digits. So we're going to push harder on those brands.

And then lastly, I would say, we are activating a supply chain program, which is meant to run over the next three, four years. It's largely to modernize our operations, but it will improve our efficiency and our costs. It'll give us more network flexibility. So overall, I would say we are entering a year in North America. We are stronger in the sense that we will do more investments that we've understood better what works here, what doesn't work, and that we have quite an extensive plan on things we want to do. As it relates to pricing itself, we started off 2025 and we're quite aggressive on promotions and on deals, working on price.

I have to say, it didn't give us a return on our investment. So in 2025, we changed our strategy. We did a lot less promotion and pricing. As a consequence, our price realization went up. And I would say, overall, our P&L improved in North America. But we lost some market share because our volume performance wasn't the same. But overall, I would say that probably was better for us. So the way forward for us is better activations, interest the consumer more, make sure that they feel compelled to buy snacks, our snacks on every shopping trip, but we don't necessarily think that we need to decrease our prices to the magnitude that I heard from another company.

Peter Galbo: Great. Thanks very much.

Dirk Van de Put: Mhmm. Thank you, Peter.

Shep Dunlap: Thank you. We'll now move on to Megan Clapp with Morgan Stanley. Your line is now open.

Megan Clapp: Hi. Good afternoon, Dirk, Luca. Thanks so much. I wanted to just maybe, Luca, follow-up on the answer to Pete's first question just to make sure I fully understand kind of the message you're talking about as there are a lot of moving parts with cocoa and pricing. So when you talk about flat chocolate pricing in 2026, that's the expectation. Cocoa should be down, I think, significantly. But should we think about the net price cost relationship embedded in the guide as roughly neutral to the year? Of the inventory accounting and the, you know, the elevated hedges flowing through, or is it still a net positive? I'm just trying to kind of understand the dynamics there.

And then is the idea that if pricing can kind of stabilize in 2026, cocoa resets lower in 2027. So that's really when the real profit recovery starts to show up.

Luca Zaramella: Yeah. Thank you, Megan. The idea is to have a neutral to positive balance in chocolate specifically between cost and pricing and albeit pricing is not going to move much. As I said, there is an element of cost that was locked for 2026. So in general, you should think about pricing net of cost as slightly positive to neutral for chocolate. That's the way we have prepared the plan.

Megan Clapp: Okay. That's super helpful. Thank you.

Shep Dunlap: And then just to come back to the organic sales outlook, zero to 2%, you've got some nice momentum in emerging markets. I think finished the year around high single digits. So that the expectation for 2026 that emerging markets can kind of be on in that high single digit range. And if so, I think mathematically would imply kind of developed markets decline in the low to mid single digit range. So, you know, is that math fair and just any way to kind of think about The US versus Europe and relation to that?

Luca Zaramella: The emerging markets will continue growing and hopefully they will do even better than what is embedded quite frankly, in the guidance. We are happy with the momentum we are seeing in both America and EMEA now. Involve segments, have a meaningful presence in chocolate. And, if you look at how much we price, that contribution is not going to be there for 2026. But on the flip side, there should be less elasticity. Now I would say majority of the volume declines that you see, particularly in EMEA, but also in Latin America, are due to PPA. So the volume momentum is really there when you take out the PPA impact.

The idea for 2026 is, again, to grow this market pretty much at the same level, but there will be a little bit less contribution from pricing and more contribution from volume mix.

Megan Clapp: Okay. Thanks, Luca.

Luca Zaramella: Thank you, Megan.

Shep Dunlap: We'll now move on to Michael Lavery with Piper Sandler. Your line is now open.

Michael Lavery: Thank you. Yeah. You touched on the advertising spend as a tailwind in 4Q, but you've talked about stepping up investments next year. Can you give a sense of order of magnitude? And would next would 2026 be basically back to normal? Is there, you know, any kind of push beyond that? How do we just think about what kind of investment level you've got in store for the year?

Luca Zaramella: So, Michael, if you look at the A and A line, it was clearly down year on year 25% on 2024. One of the drivers there is continued overhead savings, but we had to tap a little bit into A&C too. We said many times that we didn't touch the working media line, but we touched the nonworking media predominantly. The idea is to continue with lower nonworking media but to clearly step up in the working part. And if you look over a couple of years, between 2024 and 2026, we will more than recover what we have to pull back in 2025 into the overall line.

On the other part of S and A, as of the overheads part, we will continue with cost savings, but we will have to step up a little bit the annual incentive plan. So all in all, the investment in A and C over two years, I think it's going to be substantial if you take 2024 to 2026. It's up quite meaningfully.

Michael Lavery: Okay. That's helpful. And just back to emerging markets, maybe touch on that specifically, maybe LatAm. It's down now a couple years. What can you do to grow volumes there? And can you give any sense maybe of what kind of assumptions would be baked into the guidance?

Luca Zaramella: Look. I think that the simple answer there is that in LatAm, there is Argentina, which went through quite a bit of country. And on top of that, economic turmoil, there were material issues in the we decided to protect working capital and not to extend payment terms to anybody. And we did quite, I believe, a good work in keeping the business. In accordance to our operating principles that are protect cash in Argentina and bring the cash home. That's what we did. When you strip out Argentina and you look around, Brazil got a little bit impacted by elasticity in chocolate. But Brazil is one of the best performing markets that we have top and bottom line.

They did an amazing job in terms of PPA and minimizing elasticity. We are growing quite well outside of chocolate. If you look at Mexico, there was a big comeback. The country is now in growth territory and doing fairly well. And so the two major markets in LatAm are doing quite well. It is Argentina masking a little bit the performance of the region.

Michael Lavery: Okay. That's helpful. Thanks so much.

Shep Dunlap: Thank you. We'll now move on to Chris Carey with Wells Fargo Securities. Your line is now open.

Chris Carey: Hi, everyone. Thank you for the question. I wanted to start with this comment on the company's goal to demonstrate the significant volume trajectory change over the course of 2026. Can you help us understand regionally where that change might be occurring? Some of the key drivers. For example, the channel strategies that you have in North America, are those expected to be material? European, comps in Europe get quite a bit easier into the back half of the year. You mentioned the piece with PPA impacting emerging market volumes a touch and elasticity is getting better. Just give us a sense of what significant volume trajectory improvement looks like and contextualizing a bit where that's coming from and why.

Dirk Van de Put: Yes. I mean, if I go through the regions, we clearly expect AMEA overall. If you look at how we're doing in India, in Australia, China, coming back. So we see EMEA as being a big source of volume growth for us. So that's certainly a region where we will see some good performance. If it then looks at Latin America, as Luca was saying, they're also we think that it's going to be quite a good year for us. North America, as I was explaining the consumer confidence there. The biscuit category is soft.

We expect that the volume decline that you see in the category of 4% will ease, but we are not exactly counting on volume growth in North America. Then in Europe, what I expect there is that the first of all, in our other categories, we had a pretty good year already in 2025. We expect that to continue, and I'm talking about biscuits, cakes, and pastries and meals. And in chocolate, the price increase as we discussed, is going to ease. In fact, we are readjusting some of our pricing in certain markets. So all that, we expect also will have a positive effect of volumes as compared to 2025.

So hopefully, that gives you an idea where the volume growth is going to come from. The phasing during the year is as these different activities come to bear. We expect that gradually to be better, and also the lapping effect will help us over the year.

Chris Carey: That's great. And I know it's been broached a bit, but just to confirm, as we get into 2027 and really I'm asking just because it was included in the prepared remarks. You give us a sense of the investments that will have been lapped going into 2027. Should we expect the media investment to be done in 2026, the rebasing of media, the rebasing of comp, the investments into channel expansion strategies such that going into 2027, we're really just thinking about an improved complexion of the top line gross margins, getting a bit more life against a lower cocoa, you know, price and more operating leverage to SG and A?

Or is there multiyear investments that will be continuing to come into the model as we get into 2027? I realize we may get more information on this at CAGNY, but, again, it was in the prepared remarks, so I figured I'd get a bit more context on that. Thanks.

Dirk Van de Put: Yeah. So as we explained, so in 2026 we are taking a step forward and significantly increase our investments in working media as compared to 2025, taking into account that 2025, we took a step down largely in nonworking media, but also a little bit in working media. For 2027, we expect that we will do another step up in investments. We believe that we have to continue to invest in our brands. The opportunity is big. And we want to drive volume growth because that needs to be the first base of growth for the company. Combined with, hopefully, over time, a little bit of pricing. So that's our thinking.

As it relates to margins, we feel that overall from a commodity perspective that things will ease, particularly in cocoa. And so we can see a significant uplift in our chocolate margins in 2027. Which will be divided by reinvesting part of it and part flowing to the bottom line. And so we are aiming for a strong EPS growth in 2027, but at the same time, we want to keep on investing in our brand. So we are not planning to flow everything to the bottom line if that would be the thing.

Chris Carey: Thank you all. Appreciate it.

Luca Zaramella: Thank you. Thank you.

Shep Dunlap: Thank you. And we'll go next to David Palmer with Evercore ISI. Your line is now open.

David Palmer: Thank you. Sort of a big picture question on European chocolate in your division there. I wonder, you know, how are you thinking about the path to a profitability recovery there to sort of a pre-2025 levels that we saw for a few years. If you think that is even the norm, you know, that we saw profitability there. And I wonder with prices having come down, is 2027 the beginning of a recovery? And, you know, what you know, is there a path back to pre-2025 levels of profitability? And how do you think that would play out? And I have a follow-up.

Luca Zaramella: So, the idea David, is to go back to the profit pool as it used to be. And hopefully, even a little bit better because remember, we really have growth opportunities even in Europe. And quite frankly, we still have to invest quite a bit of A&C and expand both in the developed part of Europe, but also in the developing part of Europe. We still have plenty of opportunities in terms of price points channels, segment within chocolate and our goal is to grow. The chocolate business in Europe after the meaningful price increases we have taken in 2025. If cocoa ranges at around 3,000, our goal is to get into 2027 with a much improved situation.

And to really be able to get back to the old profit pool. And if we have to make some selective price investments, we will make them. I think if you look at the way the 2026 plan is structured in Europe, there are more promotions. We are going to offer more value to some of the consumers. And all in all, I think while 2026 can be a new base, 2027 can really be a step change for our chocolate market overall around the world, including Europe.

David Palmer: Are there any sort of milestones this year that you're going to be really watching for, whether it's perhaps how you see the retailer brand pricing works or your own price elasticity levels remaining better than a certain threshold? I mean, what are some things that you're going to be looking for and that we could even look for in the data?

Luca Zaramella: It is potential competitive reaction. Let's we said a couple of times already.

David Palmer: Got it.

Shep Dunlap: Thank you. We'll now move on to Scott Marks with Jefferies. Your line is now open.

Scott Marks: Hey. Good afternoon, all. So much for taking our questions. First one for me. I don't believe I've heard any discussion thus far about GLP-1 and some of the more recent developments in that market, especially with some of the newer oral medications. Just wondering if you can share a bit about how you're thinking about that and what you're expecting on that front for this year and beyond. Thanks.

Dirk Van de Put: Yes. Well, we model it out every quarter, based on the latest information. And we have noted the fact that the price of some of it has come down. We have noted that there is oral being approved. We've taken into account the estimates as it relates to that. And I have to say that up to our opinion, that will not significantly change the estimates that we've had so far. So and the estimates we had so far, first of all, we do not see a short-term impact on our business. Because there is a very modest adoption rate right now and also the calorie reduction is relatively benign that we see.

But if we expand ten years and we take an adoption rate in The US, which would be somewhere between 10-20%. And, even then, we do not see a significant effect on our overall business. We believe that over that period of time, it could have a 0.5% to 1.5% effect on our overall volumes. So almost negligible over a period of ten years. So at this stage, I can't say that we feel that it is having a major impact on our business.

Scott Marks: Appreciate the color there. Maybe next question for me. You made some comments in the prepared remarks about continued investment in cocoa grown regions. Maybe outside of West Africa. Just wondering if you can share an update on some of those investments and how you're thinking about those moving forward relative to kind of the traditional cocoa growing regions? Thanks.

Dirk Van de Put: Yes. I think it's just better from an overall long-term risk management perspective that we balance our supply of cocoa into different geographical regions. Those regions are largely Latin America, mainly and also a little bit in Asia in places like India, Indonesia. In Latin America, the countries that are stepping up are largely Ecuador and Brazil. Different farming models. In Brazil, we see some large farms coming up, and we are having long-term agreements with them to supply us. And then in Ecuador, it's smaller farmers, but who are getting together. We see those countries significantly increase their output.

And so over time, that might not give the best cocoa price, but we think the current price that we see should be sustainable. But it will significantly decrease the risk of events like a bad crop or a disease that affect the crop in a country, that is going to have a big impact on the overall cocoa market. As we currently see whereby Ghana and Ivory Coast are close to 60-65% of the global cocoa supply. The other one I would say that is worthwhile is that I think over time, there will be more and more lab-grown cocoa that will become available. Not GMO. But lab-grown.

And we think that there will be an interest from the European Commission and then the US government to approve that sort of cocoa. Why? Because it has significant benefit effect in the sense that all the negatives that surround the cocoa supply chain would not be there as it relates to climate and other social effects. So in that sense, that's also direction that we are investing in and supporting.

Scott Marks: Appreciate it. Thanks. Pass it on.

Luca Zaramella: Thank you.

Dirk Van de Put: I think that was the last question for today. I would like to thank you for your attention. I would like to reiterate the fact that we will be going deeper in CAGNY into the European chocolate situation and give you the details on how we are planning to tackle it. We'll also go deeper in our North American situation and what our plans are there. And we will cover the emerging markets and, of course, our financial outlook. So we're looking forward to seeing you there to spend some more time explaining our business to you. Thank you.

Luca Zaramella: Thank you,

Shep Dunlap: Thank you. This brings us to the end of today's meeting. We appreciate your time and participation. You may now disconnect.