Mondelez International, Inc. MDLZ has taken a bold step in its digital transformation journey by partnering with Amazon Web Services (“AWS”). The collaboration designates AWS as Mondelez’s primary cloud provider, with hundreds of workloads already migrated to its state-of-the-art cloud infrastructure. This strategic move is aimed at enhancing the company's agility, reliability and security while optimizing operations across its global business.

Mondelez Revolutionizing ERP and Driving Innovation

A cornerstone of this partnership is the migration of Mondelez’s enterprise resource planning (“ERP”) systems to SAP RISE powered by AWS. This cloud-based transformation promises improved performance and reliability while integrating advanced AI capabilities for actionable insights. These enhanced systems will strengthen Mondelez’s ability to make data-driven decisions, bolstering operational resiliency and efficiency.

In addition to modernizing the company’s ERP systems, Mondelez is utilizing AWS’s advanced cloud services to strengthen its internal platform engineering. By prioritizing automation, security and agility, the partnership is poised to foster innovation and advance the company’s strategic objectives. AWS plays a key role in enhancing the company’s cloud engineering capabilities and driving digital transformation throughout the organization.

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Sustainable and Future-Ready Partnership of MDLZ

AWS’s energy-efficient technologies and renewable energy practices align closely with Mondelez’s environmental priorities. By integrating cloud solutions that reduce energy consumption and minimize its carbon footprint, Mondelez not only improves operational efficiency but also supports the company’s sustainability goals.

This partnership highlights the company’s dedication to innovation and environmental responsibility. By harnessing the power of AWS’s technology, Mondelez has been transforming its operations to remain competitive in a rapidly changing global landscape. This strategic alignment ensures the company is equipped to drive growth, embrace sustainability and deliver value to its stakeholders well into the future.

Mondelez Approves $1.2 Billion ERP System Transformation

In July 2024, Mondelez’s board of directors approved a $1.2 billion investment for a multi-year ERP system transformation program. This initiative aims to upgrade the company's global ERP and supply-chain systems, with spending spread over five years and expected completion by 2028. A majority of the funding will cover operating expenses, including third-party consulting, direct labor and accelerated depreciation of existing SAP systems.

Other Factors of Mondelez

The company’s focus on reinvesting in its brands and capabilities, along with strategic portfolio reshaping, positions MDLZ for continued growth. By focusing on core categories like chocolate, biscuits and baked snacks, Mondelez is set for long-term success. Moreover, the company is catering to health-conscious consumers with snacking options that align with active lifestyles.

The company reported a solid 5.4% increase in organic net revenues in the third quarter of fiscal 2024, driven by favorable pricing and cost reductions. Key categories like chocolate saw a strong 9.2% growth year over year, showcasing the resilience of its core products. Looking ahead, Mondelez expects organic revenue growth of 3-5% for fiscal 2024, with high-single-digit adjusted earnings per share (EPS) growth. Strategic acquisitions, such as the recent purchase of Evirth in China, enhance Mondelez's market reach and strengthen its competitive position.

Despite its strengths, Mondelez's extensive global operations expose it to the risks of fluctuating foreign currency exchange rates. Currency fluctuations negatively impacted Mondelez’s revenues in the third quarter of fiscal 2024. This is expected to reduce net revenues by approximately 1.5% and adjusted EPS by about 11 cents for the full fiscal year.

Conclusion

Mondelez is firmly positioning itself for long-term success by embracing digital transformation through the company’s partnership with AWS and significant investments in upgrading its ERP systems. With a clear focus on core categories, operational efficiency and sustainability, the company is driving innovation and growth. As Mondelez continues to expand its market reach through strategic acquisitions and product innovations, the company remains well-equipped to navigate future challenges while delivering value to its stakeholders. In the past three months, this Zacks Rank #3 (Hold) stock has lost 18% compared with the industry’s 7.3% decline.

Key Picks

Here, we have highlighted three better-ranked stocks, namely Ingredion Incorporated INGR, BRF Brasil Foods SA BRFS and Freshpet Inc. FRPT.

Ingredion is an ingredients solutions provider specializing in nature-based sweeteners, starches and nutrition ingredients. The company currently sports a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

INGR delivered a trailing four-quarter earnings surprise of 9.5%, on average. The Zacks Consensus Estimate for INGR’s current financial-year earnings indicates growth of 12.4% from the year-ago number. 

BRF Brasil Foods, formerly Perdigao S.A., is a Brazil-based food company. It presently carries a Zacks Rank of 2 (Buy). BRFS delivered a trailing four-quarter average earnings surprise of 51.5%. The Zacks Consensus Estimate for BRF's current financial-year earnings and sales indicates growth of 260% and 14.7%, respectively, from the year-ago figures.

Freshpet Inc. manufactures and markets natural fresh foods, refrigerated meals and treats for dogs and cats in the United States and Canada. It has a Zacks Rank #2 at present. The Zacks Consensus Estimate for Freshpet’s current financial-year earnings and sales indicates growth of 228.6% and 27.3%, respectively, from the year-ago figures. FRPT delivered a trailing four-quarter average earnings surprise of 144.5%.

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