Good day, and welcome to the Mondelez International First Quarter 2022 Earnings Conference Call. Today's call is scheduled to last about one hour, including remarks by the Mondelez management and the question-and-answer session. I'd now like to turn the call over to Mr. Shep Dunlap, Vice President, Investor Relations for Mondelez. Please go ahead, sir.

Good afternoon, and thanks for joining us. With me today are Dirk Van de Put, our Chairman and CEO; and Luca Zaramella, our CFO. Earlier today, we sent out our press release and presentation slides, which are available on our website. During this call, we'll make forward-looking statements about the company's performance. These statements are based on how we see things today. Actual results may differ materially due to risks and uncertainties. Please refer to the cautionary statements and risk factors contained in our 10-K, Q and 8-K filings for more details on our forward-looking statements. As we discuss our results today, unless noted as reported, we'll be referencing our non-GAAP financial measures, which adjust for certain items included in our GAAP results. In addition, we provide our year-over-year growth on a constant currency basis, unless otherwise noted. You can find the comparable GAAP measures and GAAP to non-GAAP reconciliations within our earnings release and at the back of the slide presentation. In today's call, Dirk will provide a business and strategy update, then Luca will take you through our financial results and outlook. We will close with Q&A. Before turning it over to Dirk, a reminder that we have an investor update on May 10 and that will begin 9 Eastern, 8 Central where Dirk, Luca and other senior leaders will talk more about the evolution of our strategy. More details will be on our IR website soon. With that, I’ll turn the call over to Dirk.

Thank you Shep, and thanks to everyone for joining the call today. I will start on slide 4. I am pleased to share that we have delivered an excellent start to the year with robust volume growth, solid pricing, strong growth profit dollar growth and high cash delivery. Strong demand for snacks fueled broad-based growth all around the world, with the chocolate and biscuit categories continuing to demonstrate resilience and price elasticity remaining below historical levels. We also continue to effectively navigate a dynamic environment characterized by global input cost inflation, as well as lingering disruptions in the supply chain, labor and transportation. Throughout the quarter, we succeeded in mitigating these challenges through ongoing cost discipline and strategic pricing actions. At the same time, we continue to invest to support our brands, our distribution, our capabilities and acquisitions. We remain confident that the strength of our brands, our proven strategy and our continued investments position us well to deliver attractive, sustainable growth for the remainder of 2022 and beyond. It is especially important to note that we remain extremely confident in our people, the very best in the CPG industry. Each and every day, our makers and bakers around the world remain focused on delivering high-quality, great tasting snacks to enrich the lives of consumers. No matter how the external environment shifts from one quarter to the next, our diverse and dedicated teams continue to deliver the brands our consumers love. Turning to slide 5. You can see that our strategy is continuing to drive a virtuous cycle. The strength of our brands are continuously increasing investments and significant pricing actions, our sustaining top line momentum and solid profitability and position us well for another strong year in 2022. Our first quarter results show that we are off to a…

Thank you, Dirk, and good afternoon. Our first quarter performance was strong from top to bottom to cash flow. We delivered revenue growth of 8.6%, with nearly four points of that growth coming from volume mix. Emerging markets continue to show great strength, posting an increase of more than 16%, with strengths across all our major business units. Importantly, volume mix dropped nearly 10 points of this growth, with notable performances from Brazil India, China and Mexico. Developed markets grew 4.2% for the first quarter, with strength in both Europe and North America as demand remains strong. As for emerging markets, also, our developed market volume mix was positive, but pricing drove a good portion of that growth. Turning to our portfolio performance on slide 11. Chocolate and biscuits continue to demonstrate strong growth and drive our business. Gum and candy also increased significantly as many areas are at/or above pre-pandemic levels. Biscuits grew 6.7% for the quarter, with more than two points coming from volume mix. Similarly to Q4, emerging markets were a significant engine of growth in this category. Brazil, Mexico, India, Southeast Asia all grew double digit, while China posted high single-digit growth. Oreo, Chips Ahoy!, HU and Tae are among those brands that deliver double-digit increases. Chocolate grew more than 8% for the quarter, with increases in both developed and emerging markets. Both global and local brands grew well, including Cadbury, Dairy Milk, Milka, Tobleron, Lacta and Riz . Gum and candy continued to show improvement with growth of 27% related to mobility increases. China, Brazil and Mexico were among some of the larger gum businesses posting strong performances. Now let's review our market share performance on slide 12. We held or gained share in approximately 50% of our revenue base during the quarter, with approximately…

We'll take our first question from John Baumgartner of Mizuho Securities.

Good afternoon. Thanks for the question.

Hi.

Hi John.

Maybe, Dirk, just first starting off, just given the volatility we're seeing globally, wondering if you can offer a bit of the state of the union in terms of any notable call-outs across your geographies and categories?

Yes. Well, I would say if I would phrase in one -- phrase, it's a fast-changing and complex environment that our demand is strong, and our momentum is sustained. If I think about the complex environment, we all know about the geopolitical conflict. There's still some pockets of COVID, particularly in China at the moment, but also Southeast Asia. We are seeing absolutely record inflation. And the supply chain disruption is still there. So probably one of the more difficult periods that I have known in my career from an operational perspective. At the same time, the demand for our product is very strong. And if you look at the quarter, for instance, in chocolate, we grew our revenues by 8.1%, and that was accompanied also by very strong volume growth, which was 5.8%. And then in biscuits, our biggest category, we grew revenue by 6.7% and volume was 2.2%. All regions performed well. They're all growing 5% or more. We continue to invest in our brands. We did not pull back on our investments. So we are going to continue to do that this year because we are in a high pricing environment and we believe we need to keep our supporting our brands. And despite all that, we are delivering very good dollar profit growth. We have double digit -- strong double-digit OI growth, and that was driven by pricing RGM and the volume growth. If I look to emerging markets and developed markets, emerging markets continue to be a very strong growth engine for us, double-digit revenue growth, strong double-digit revenue growth in Q1 and also last year, accompanied by 10% volume growth. We have strength in China, India, Brazil. And as you know, we believe we still have plenty of opportunity in these markets as it…

Yeah. That's great. Thank you. And just as a follow-up, in terms of the Ricolino acquisition, you touched on it in your remarks a bit, but could you elaborate on the synergy opportunities. And any other elements that attract you to the business that may be less apparent to outsiders? I know Mexico is not a market that's seen a lot of discussion traditionally.

Yes. Well, for us, we consider it as a very high strategic fit for us to become a full snacking player. Mexico is a priority market for us. And our business there is largely in gum and in our meals business. And we are interested in becoming a bigger snacking player in Mexico plus the per capita consumption that we have. Roughly comparing to our other emerging markets, Mexico has potential for us, and we are very interested into the chocolate market also. Our biscuit business is developing, but could use some acceleration. So Ricolino offers us a strong route to market, combined with an already very strong presence in the market, particularly in confectionery and in chocolate. And that helps us to get to our ambition of about 15% to 20% market share in the biscuits and the chocolate market. And starting from their already strong position and combining that with our existing business, the two businesses are about the same size. This will mean for us that we are now 75% a snacking player, which is also very important for us. And what you might not have picked up, but which you can probably expect is that there will be a full integration. So there's a significant opportunity because of that full integration, for revenue and cost synergies, which would be accretive to our growth and margin in Mexico and Latin America. So maybe quickly a bit of the numbers on Ricolino, so about $500 million in net revenue. In the sugar confectionery and chocolate categories, they have about a 15% share in the combined categories, the number one in confection, number four in chocolate. The two categories together are about $3 billion in Mexico, and the growth of those categories are expected to be 7% for the next five years. And Ricolino, we expect because of their iconic local brands, we expect them to be above that, about 8%. You probably will not know any of the brands, but they're very known locally. What -- so we're interested in the categories there's in the brands. But then second, as I already mentioned, the route to market, 2,100 plus DSD routes reaching 440,000 mom-and-pop stores. That triples almost quadruples our route to market in Mexico. And, of course, we have a very strong modern trade presence ourselves where we can help Ricolino become stronger. What we also have to keep in mind is that they have a high-growth US business. They're the leader in confectionary in Hispanic markets in the US. And so we believe that there is an opportunity there to significantly increase that business. 10% of their sales are coming from the US Hispanic market. And as you know, the population in the US, the Hispanic population in the US is growing fast. We're also getting four excellent manufacturing facilities, which will help us produce the necessary products for the growth. So I think that gives you an idea, hopefully.

Yeah, that's great. Thanks Luca -- sorry Dirk. And just last one for Luca, if I could. Looking at the guide for 2022, stronger top line despite Ukraine, wider range for EPS. It sounds as though you've embedded a fair amount of uncertainty in the model. I know forecast announced was really tough. But how do we think about the puts and takes and maybe where might the outlook prove conservative in terms of modeling potential downside? Thank you.

Thank you, John. As I said in the prepared remarks, I think it is fair to say that we feel quite confident about 2022 being another good year, both in terms of top and bottom lines, despite the numerous challenges that are thrown at us. I think we've mentioned how vibrant chocolate and biscuit businesses are. And I think when you look at volume mix and the pricing that is kicking in, that is the testament really of the big investments we have been making over the last few years and the fact that our franchises are very strong. It is undeniable that the geopolitical environment is driving additional costs. And just to give you a reference, inflation is now expected to be double digit versus the high single digits we had originally estimated. And that will result in additional and multiple pricing waves across the board, across all our categories, quite frankly, since energy particularly has repercussions around a vast number of commodity classes. As we price away unprecedented inflation, clearly, the watch out is elasticity. And I want to make sure that you realize that we have planned for historical elasticity’s for the remainder part of the year. And so I wanted to be a little bit cautious in our forecast since at this point in time, we are not seeing that level elasticity. And I also want to make sure that we'll realize that by having invested materially in the last three years, our brands are as strong as they have ever been. So we certainly have an opportunity to do better on our revenue guidance. But again, quite frankly, if you slip out the Ukrainian impact, you realize that we are two points ahead of the original guidance on net revenue that we gave you at the beginning of the year. On the profit side, as we guided to high single-digit EPS, we had built into some cushion in our forecast. So we still have an opportunity to meet high single-digit EPS growth. But this situation is tighter than before because of the inflation and the Ukrainian related business losses, and those accounts for around about $0.13 of EPS. This is why we are now giving you a range to accommodate for further headwinds that might come our way. But in case of elasticity’s being more benign and more aligned to what we see today. And in the case of cost not worsening materially versus the double-digit inflation that I mentioned, high single-digit EPS is within reach. Obviously, we want to get to high single-digit EPS. And that's why, for instance, we are doubling down on cost initiatives. And there are streams within the company to ensure that on the productivity and cost control side, we do even better than we have been doing in the last few years. And so hopefully, if the situation doesn't worse and the elasticity’s are better high single digit would be within reach.

Thanks Luca. Thanks Dirk. Very helpful.

Thank you John.

Our next question is from Ken Goldman of JPMorgan.

Hi, thank you. And I hope that your employees and their families in Ukraine are safe and doing as well as they can under the circumstances. And I would back up what John was getting at, it does feel very low, 4% seems almost punitively low given 1Q strength. And I'm just -- my question, again, just to back up -- or my question would be just to back up what he was suggesting, if your pricing is going to accelerate, and it was almost 5% in the first quarter, and you're guiding to volumes being positive for the year, just mathematically, how do we get to 4%? It just feels like that's almost too low if pricing is going to be above 5% and volume is going to be positive. I just don't quite get how 4% is even in the cards if those two elements of guidance are there. I hope that makes sense.

I mean, from your logic, it really -- it makes sense. The point here though is; A, we have one point of headwind related to the Ukrainian business stoppage. You might imagine that in places like Russian, for instance, there are restrictions, both in terms of importing. And as we mentioned a few times, we have scaled back operations. So volume there is going to be negative as well. And on top of that, as we have multiple pricing waves, as I said, we have planned for higher elasticity than what we are seeing at the moment. If we get better elasticity’s and we implement pricing policy as we have done in the last few rounds, there is obviously an opportunity to go higher in terms of revenue. But I wanted to be cautious because, clearly, the situation is quite fluid. You might imagine that in some places, we are getting to price increases that are more than double digit, I would say -- not double digit, but in the 15-plus percent, that's the number we are talking about. And so elasticity remains to be seen at these levels, and I wanted to be cautious.

And just to clarify, though, that when you say that elasticity is being baked in at a higher level than today and back-to-normal levels, and you talk about Ukraine and Russia, and I understand there's some uncertainty in there, too. That is all baked into your estimate of volume hopefully being positive for the year, nonetheless, correct?

Yes. Yes, it is.

Okay. And then just one last quick one for me. As we think about the remaining quarters, are there any considerations we should have, Luca, in mind when modeling each quarter, whether in terms of top line comparisons that may not be obvious, whether hard or easy with the pace of inflation?

Look, the only one thing you have to bear in mind is that last year, in Q3, we had the strike impact in the US, which obviously affected some of the revenue phasing in the US. But besides that, the only one thing that you had to think is about sequential pricing being higher throughout the quarters.

Okay. Thanks so much.

Thank you Ken.

We'll take our next question from Andrew Lazar of Barclays.

Great. Thanks very much. I wanted to dig in a little bit on North America. Organic there was close to 8% in the quarter. And I think consumption or takeaway has been closer to maybe 4% or so. So I guess, given some of the supply chain issues that you're still dealing with, how have you been shipping so far ahead of consumption, and I guess, and also still losing market share in that market? I'm just trying to get a better handle on that.

Yes. Well, Andrew, we do have a number of businesses in North America, our ventures, which are not followed by Nielsen. So if we think about Give & Go, for instance, or even Perfect Bar. They don't have the same coverage as the rest of our business. You will also imagine that, we came out of the strike, and we had subsequent high demand that our inventory levels in the trade were not as high as we would like them to be. So the combination of those two factors give that difference between the 4% and the 8% that you were talking about.

Thanks for that. And then, Luca, maybe if we look at the difference between, let's say, high single-digit constant currency EPS growth in mid to high single digit, if that's how it turns out. Maybe could you just break out the -- I guess, there were three key buckets there. I think you said, $0.03 was due to Russia-Ukraine. It sounded like another maybe dime, if I'm hearing you right, on supply chain. And then what would the cost inflation piece be? Again, just trying to bridge from high single digit to whatever turns out to be potentially somewhere below that? Thank you very much.

It is another $0.10 of cost headwind as we -- as I said in -- to the reply to John, between the Ukrainian business laws and the revenue that came out of the plant last year in the Ukraine and the additional cost pressure driven by the Ukraine war I see another $0.10. And so between the two, it is $0.13 of EPS. Now, as I said, the high single digits, quite frankly, at this point, is predicated on elasticity. The elasticity’s are better than what we have baked into the forecast, it will be high single-digit EPS, if elasticity’s are more in line with historical levels of one plus, then I think we will have a little bit lower than high single-digit EPS growth.

And the supply chain piece, I didn't know if that was included in the $0.13 because you have those three buckets on that slide?

Yeah, it is all included in there.

Okay. Thanks very much.

Welcome.

We'll take our next question from Bryan Spillane of Bank of America.

Thanks operator, and good afternoon Dirk and Luca.

Hi Bryan.

So a couple of questions, quick ones, I hope. First is just maybe a follow-up to Ken Goldman's question about like phasing through the year. I think on slide 19, there's a comment in there that says you're expecting year-over-year profit dollar growth throughout 2022. So was that meant to be like each quarter? Is there any kind of variability in terms of, I guess, margin or profit growth per quarter? Just trying to understand if there's anything more behind that bullet?

No, don't read too much into that. Obviously, we are expecting OI dollar growth throughout the quarters. We have to see how cost evolves throughout the quarters because as I said, we have baked into the forecast, the current cost levels. We are pretty much well covered for commodities for the remainder of the year. So at this point, I would say, yes, that's the idea, depending, as I said a few times, on elasticity there might be some bumps in the road, but that's the plan at the moment.

Okay. And then the second one is just, Luca, how do we think about -- or how are you preparing for the potential for maybe like the inavailability of maybe some input costs or other resource -- inputs ingredients or other inputs. I guess, given there's going to be certainly scarcity of wheat, it looks like -- and maybe some other raw materials. Just is that a factor that has that been factored into your forecast? And just is there any risk associated with that as we go through the balance of the year?

The -- that is factored into the plan. I have to say, at this exact moment in time. Clearly, we are facing some shortages, but they have no been a material impact yet to the business. So the plan in terms we have is extra cost will get us the commodities we need. You might have heard about the palm oil issue in Indonesia. That one for us is not a material issue at this point in time. We are clearly monitoring the situation very closely. In terms of wheat, the wheat coming out of the Ukraine is mostly going into the Middle East and North Africa for us. As I said in the last call, the total wheat we procure for the company is $600 million, $700 million. So in the big scheme of things, we believe that in total, wheat is not going to be a material problem in terms of supply. It hasn't been yet, but we have to see how the crop evolves and what can still be sourced out of the Ukraine, particularly for our Middle East and North African business.

And just if I could follow up on that. If we're looking at maybe some of the petrochemical related, like, packaging, especially in Europe, given just all of the disruption in energy there. Is there any risk around just availability of packaging, especially in Europe?

We are facing some issues on specific items, but the issues are not broad-based. Paper and -- particularly in places like Asia, it is under a lot of pressure at this point. But again, in terms of supply, we have some issues here and there, but nothing that racks up to a material number for the company yet. And I hope it stays that that way.

Yeah. So do I. All right. Thanks Luca. Thanks Dirk.

Thank you.

Thanks.

Our next question is from Chris Growe of Stifel.

Hi. Good evening.

Hi Chris.

Hi. I just had two questions for you, if I could, please. So the first one, I'm just curious about just to dig a little bit more into the pricing, Europe was an area where I think you've talked before about some pricing coming into place after Easter, like in April. I just want to get a sense of that we should see that pick up in the second quarter. And that has historically been a very difficult area to get pricing. Is that an area where you think your pricing can offset inflation in -- broadly in Europe?

Yeah. So we've talked about the higher inflationary impact. We took pricing across all our markets in Q1, including Europe. So far, the demand for the category is pretty robust. But it's very likely that we will have to take another price increase in Europe. And in fact, we are going out to the clients right now. That probably is reflected on our forecast, and we're trying to be prudent there because that is not happening a lot in Europe that you have to do a second pricing. And so we will have to see what the reaction is, and we've taken a cautious approach on any potential effects that we could have from that. We do expect that we will be able in Europe and in most of our markets to already be pricing away most of the inflation of this year and then be ready at the beginning of next year to whatever gap exists with the cost picture for 2023 that we will also be able to do that pricing. So, that leads to what Luca was saying, a very significant pricing increases around the world. As we also were saying so far so good, elasticity has been quite low. But we -- the second area where we're trying to be very careful is planning for historical levels. For instance, I believe that at the end -- sorry, at the beginning of 2023, the basket for the US consumer will be up compared to the beginning of 2021 more than 20%. And so we forecast that the elasticity will go back to historical levels. Our categories have historically been very resilient. So, despite this high inflation, despite the high pricing, we know that our categories are pretty good. One of the things we're seeing, for instance, is that this -- the fact that everything is going up, not just food, consumers continue to prioritize grocery spending. It's more on personal items, floating, eating out, travel. Those are the items where they're trying to save. So, that also gives us confidence implement the pricing and continue with the volumes. But again, we're trying to be careful and cautious, and we will have to see how it goes. It's a very volatile environment at the moment.

Okay. Thank you for that. And I had just one quick follow-on. Did you give a level of inflation for the first quarter? I think we're looking at double-digit inflation now for the year. Does that pick up then as we go through the remaining quarters, or was the first quarter at that level? I'm just trying to get a sense of the gross margin. Does that get a little more challenging before it gets better before the pricing comes in place, or is that a function of inflation picking up here?

The level of inflation, it is higher in Q1 for obvious reasons because you know that last year, the inflation picked up materially towards the second part of the year. And it caught us a little bit by surprise, the level that we saw in the second part of the year. And obviously, the level of gross margin in Q1 is reflective of three key elements. One, it is the additional pricing. When you look, for instance, at the US business, you clearly see a level of revenue that is 8% with a modest volume mix impact, which means there is 8% pricing kicking in, in there. The second element is the fact that there is good volume growth in Q1 that provides leverage. And the third level is the protection in terms of hedges that we put in place in terms of commodities and ForEx. So, as you think about inflation going down in the remainder part of the year, it will go down year-on-year, but the level is still going to be higher in terms of absolute dollars, and we will have to price accordingly. The volume might not be as high as the 4% that you saw in Q1. And so that will have a play into the gross margin evolution over the quarter. So I think assuming that you're going to see an 80 basis point decline given all the pricing we are about to take might not be necessarily realistic. The goal that we have though is that we want to enter 2023 with the level of pricing at current commodity and ForEx cost that allows us to have a level of -- is more aligned to historical levels.

Okay. That’s very helpful. Thank you for your time.

Thank you Chris.

Our next question is from Jason English of Goldman Sachs.

Good evening folks. Thanks for slotting me in.

Hi Jason.

Hi Jason.

Hi. I guess a couple of quick questions. First, to follow-up on the next wave of pricing in Europe. Have you approached the trade yet? How is it going? Because I believe this is close to sort of on-charter territory to be pushing through multiple rounds, at least in Continental Europe in the course of one year.

Yeah, it's just brand new, so I cannot give you any feeling yet of where that stands. I think it's important to realize that within an extraordinary situation and that we will have all the necessary conversations with our trade partners and making sure that it's a win-win for everybody involved. But it's too early to give you an idea of where the negotiations will lead.

Got it. Okay. And the DSD route to Mexico that you're acquiring sound really interesting. Can you give us a little more color on what your current route to market is? And whether or not, I assume these are all company-owned, can you confirm that? And how long or should be -- I imagine we should expect, but how long do you think it will take for you to reroute the entire network to be able to get one route to market that you can efficiently maximize the loads of these trucks with?

Okay. So the DSD is an own system. The -- there are some contact points between the current beam of network and the Ricolino. So one of the things we will have to do is to carve out and create a little bit of additional infrastructure on our side, but nothing at this point, I would say that is worrisome. I feel quite good about the reach that Ricolino is going to have with 2,100 DSD route achieving 440,000 moms-and-pops, which is really where when you look at our biscuit business in Mexico, being at 5% share of total market, the opportunity lies. And on the other side, our Mexico sales complement, the strong model trade presence with our some modern trade presence what Ricolino has. And we feel like between revenue and cost synergies, this is going to be a material enhancement to the value of Mondelez. And so we are very, very excited. On top of that, the brands are very strong. And as Dirk said, particularly in the US, we see tremendous opportunities in pushing this brand through what is a cohort that is growing and has tremendous potential.

Yeah. Sounds compelling. Thank you. I’ll pass it on.

Thank you, Jason.

Our next question comes from Michael Lavery of Piper Sandler.

Thank you. Good evening.

Hi.

Hi.

Just was curious if you could dissect the volume mix a little bit and maybe help us understand if there's any notable mix shifts to keep in mind as we think about the volumes. Are you seeing down trading? Obviously, the elasticities have held up really well so far. But when you lump those together, we don't get as much a sense of the split. Can you give an idea a little bit of how that breaks out?

Look, in total for the company, the mix component is very, very neutral. It hasn't been a problem. It hasn't been an upside either. And the simple way you have to think about it is North America is one of the most profitable operations that we have. And as we address the question of Andrew Lazar, Dirk said that the new businesses that we acquired are up, while our biscuit business in terms of volume is still below last year. And one of the reasons why that this is, A, we are lapping, clearly, tremendous growth last year in terms of volume. But also, as I look closely to the numbers, the supply-related issues that we have are causing still quite a bit of volume track compared to what it could be otherwise. On the flip side, as you saw, gum is growing very, very healthily as a category gum can be, I think, 27%, and that number obviously is mix accretive. The other one that is mix accretive, it is about world travel retail, which is picking up nicely quarter-after-quarter, albeit it is not still at the level it is not yet at the level before the pandemic. So, these are the three key mix components, North America volume being down because of supply chain issues, gum being up and world travel retail being up all the rest in terms of mix, I would say, fairly neutral in its totality, and these three elements offset each other.

Okay, that's great. That's really helpful. And can I just follow-up on the buybacks. You still have a pretty elevated cash balance relative to historical levels. But even with the Ricolino deal, you're still expecting about $2 billion for this year. You've said you'll finance that deal with debt and cash. Is it a good portion of debt, or I guess just with $750 million of buybacks already in Q1, could there potentially be upside to that $2 billion number over the course of the year?

Look, let's stay tuned. The -- at this point, I feel that we have what it takes to be able to fund the $2 billion of buybacks. I'll provide a little bit more color around this at our Investor Day.

Okay, great. Thanks so much.

Thank you.

Our final question comes from Alexia Howard of Bernstein.

Good evening everyone.

Hey Alexia.

Hi Alexia.

I got a couple of questions. Firstly, on the emerging markets, the biggest pushbacks that I get at the moment is people concerned that as food prices escalate around the world, and the cost of basic food becomes a higher proportion of people's income in a lot of these low-income countries, that could choke off sales of more discretionary items like packaged snack food. How do you respond to that in terms of your confidence of sustained growth in the emerging markets in the face of that dynamic over the next year or so? And then I have a quick follow-up.

Yes. I think as I was saying before, what we're seeing at the moment, we see that in developed and in emerging markets, the shift that the consumer is making as they are being confronted with inflationary pressure are more into their discretionary spending into eating out, travel and so on. And we see that also in emerging markets where at this moment, there is food inflation, of course, but that we don't see a reduction in the basket of what they're buying. The second thing I would say is that the discretionary part of snacking is, I would argue, that, it's not so discretionary anymore with the modern consumers. Snacking is a big part of what they do. And for instance, in China, as people are going into lockdowns, we see an increase in salt biscuits happening because they considered it as a staple of their diet. And so I wouldn't just assume that snacks are discretionary. There are whole parts of snacking that are part of how consumers eat these days. And then three, I would say we also work very carefully and particularly in places like India or in Brazil, our RGM approach is very developed. They have a whole plan the – year-after-year are absorbing the different inflations that they see. And so the price increase might not be as direct as you would assume for the consumer. So because of those three elements, I think you continue to see very strong performance in our emerging markets. We – at this stage, we see no effect whatsoever of the price increases. And in fact, as I was saying, the volume increase has been 10%. So obviously, you can never say never, but so far so good.

Great. Thank you very much. And then just finally, any quick preview comments about the Investor Day next month. I know, you've just mentioned that there might be something around the share buybacks, but is there anything else that we should be expecting? And thank you very much for the question. I look forward to seeing you next month.

Sure. Alexia, this is Shep. A few things, I mean, look, I think this is more evolutionary in terms of the strategy and what you're going to hear, certainly going to get a deep dive especially with respect to biscuit and chocolate. And then you're going to hit a little bit more about capital allocation just in general in terms of how we're thinking about that. As well, I would expect to hear from some other folks on the team just in terms of our efforts around marketing, what we're doing with the sales organization and supply chain. So hopefully, we'll cover all bases. But to give you an idea, just in terms of where our heads are at as we look to accelerate going forward and give you some proof points to leverage off.

Great. Thank you very much. See you in a few weeks time.

Well, thank you, everybody. Thanks for your presence here. Obviously, looking forward to see all of you during our Investor Day on 10th of May, and see you then.

Thank you, everyone.

This does conclude today's Mondelez Corporation Q1 2022 Earnings Call. You may now disconnect, and everyone, have a great day.