Mondelēz International Inc. (NASDAQ:MDLZ)

The analysis of the annual financial data reveals several key trends and changes in the goodwill and intangible assets of the company over the five-year period ending December 31, 2024.

Goodwill

The goodwill value shows a generally upward trend from 21,895 million US dollars in 2020 to a peak of 23,896 million in 2023. In 2024, there is a slight decline to 23,017 million, indicating a modest reduction after several years of growth.

Definite-life intangible assets, gross carrying amount

This asset category increased steadily from 2,907 million in 2020 to 3,354 million in 2022, followed by a slight decline in 2023 and 2024 to 3,322 million and 3,306 million respectively. The initial growth suggests continued investment or acquisition, while the later decrease may reflect disposals or revaluation adjustments.

Accumulated amortization

Accumulated amortization of definite-life intangible assets increased consistently from -1,917 million in 2020 to -2,228 million in 2024. The steady rise in amortization reflects the ongoing expense recognition associated with these assets over time.

Definite-life intangible assets, net carrying amount

The net carrying amount experienced a slight increase from 990 million in 2020 to 1,297 million in 2022, then declined to 1,167 million in 2023 and further to 1,078 million in 2024. This pattern indicates that despite initial growth in gross amounts, amortization and potential disposals have reduced net asset values in the later years.

Indefinite-life intangible assets

These assets displayed a fluctuating but generally increasing trend from 17,492 million in 2020 to 18,669 million in 2023, before decreasing to 17,770 million in 2024. This volatility might be due to periodic impairments or revaluations, alongside additions.

Intangible assets, net

The net intangible assets showed an overall increase from 18,482 million in 2020 to a high of 19,836 million in 2023, then a reduction to 18,848 million in 2024. This corresponds with the movements in definite- and indefinite-life assets net values.

Goodwill and intangible assets

This combined category reached its highest total in 2023 at 43,732 million, growing from 40,377 million in 2020. The value decreased in 2024 to 41,865 million, reflecting declines noted in both goodwill and intangible assets during that year.

Overall, the data indicates consistent growth in goodwill and intangible assets through 2023, followed by moderate declines in 2024. The amortization of definite-life intangible assets steadily increased, reducing net carrying amounts in recent years. The fluctuations in indefinite-life intangible assets suggest variable impairments or reevaluations affecting asset valuation. The combined goodwill and intangible assets reflect this overall pattern of growth with a recent contraction.

The analysis of the financial data reveals several notable trends in both reported and goodwill adjusted figures over the five-year period ending December 31, 2024.

Total Assets

Reported total assets show a fluctuating pattern, starting at US$67,810 million in 2020, slightly decreasing to US$67,092 million in 2021, before increasing to a peak of US$71,391 million in 2023, and then declining again to US$68,497 million in 2024. This indicates some volatility, with a net increase over the period but a recent downward movement in 2024.

Adjusted total assets, which exclude goodwill effects, consistently remain significantly lower than reported total assets and follow a similar but less pronounced trend. They start at US$45,915 million in 2020, decrease slightly in 2021, increase to US$47,711 million in 2022, then decline through 2023 and 2024 to reach US$45,480 million. This suggests asset adjustments related to goodwill significantly affect the reported figures and that the company’s core asset base, after adjustments, has remained relatively stable with minor fluctuations.

Shareholders’ Equity

Reported shareholders’ equity displays moderate volatility. The figure begins at US$27,578 million in 2020, rises modestly to US$28,269 million in 2021, declines to US$26,883 million in 2022, rebounds strongly to US$28,332 million in 2023, and then falls again to US$26,932 million in 2024. This pattern highlights some instability but no clear upward or downward trend over the observed period.

Adjusted shareholders’ equity, which excludes goodwill, is markedly lower and reveals a more pronounced downward trend. It initially increases from US$5,683 million in 2020 to US$6,291 million in 2021, but then sharply declines to US$3,433 million in 2022. Although there is a modest recovery in 2023 and a slight decrease in 2024, the adjusted equity remains substantially below earlier levels, indicating significant goodwill-related adjustments impacting equity value.

Overall, the data suggests that reported assets and equity have fluctuated over the period with some periods of increase and others of decline. The adjusted figures reveal more stability in assets but significant volatility and reduction in shareholders’ equity after goodwill adjustments, potentially pointing to impairments or revaluations that reduce net equity value. The disparity between reported and adjusted figures underscores the impact of goodwill accounting on the company’s reported financial position.

Reported Total Asset Turnover

The reported total asset turnover exhibits a steady upward trend over the five-year period, increasing from 0.39 in 2020 to 0.53 in 2024. This suggests improving efficiency in the utilization of assets to generate sales.

Adjusted Total Asset Turnover

When adjusted for goodwill, the total asset turnover follows a similar positive trajectory but at higher values, rising from 0.58 in 2020 to 0.80 in 2024. The adjustment accentuates the company's capability to leverage its assets more effectively over time.

Reported Financial Leverage

The reported financial leverage ratio shows minor fluctuations, declining slightly from 2.46 in 2020 to 2.37 in 2021, then increasing to 2.65 in 2022 before settling around 2.52 to 2.54 in the subsequent years. This indicates relatively stable leverage with no significant trend of deleveraging or increased risk from higher debt levels.

Adjusted Financial Leverage

The adjusted financial leverage, incorporating goodwill adjustments, demonstrates considerable variability and higher levels compared to the reported measure. Starting at 8.08 in 2020, it decreases to 7.17 in 2021, then surges to 13.90 in 2022, followed by reductions to 10.71 in 2023 and a slight rise to 11.62 in 2024. This volatility may reflect changes in goodwill valuations or debt structure impacting the adjusted leverage more significantly.

Reported Return on Equity (ROE)

The reported ROE shows moderate variation, increasing from 12.89% in 2020 to a peak of 17.50% in 2023 before slightly declining to 17.12% in 2024. This pattern indicates generally improved profitability relative to shareholders' equity with a minor dip at the end of the period.

Adjusted Return on Equity (ROE)

Adjustment for goodwill markedly amplifies ROE values, with a pronounced upward trend from 62.55% in 2020 to an exceptional 117.78% in 2024. This suggests substantially higher profitability when goodwill is excluded, possibly reflecting the high impact of intangible assets on equity.

Reported Return on Assets (ROA)

The reported ROA fluctuates more notably, increasing from 5.24% in 2020 to 6.41% in 2021, then dropping to 3.82% in 2022, followed by a rebound to 6.95% in 2023 and a slight decline to 6.73% in 2024. This variability could be indicative of changing operational efficiency or profitability across the years.

Adjusted Return on Assets (ROA)

Adjusted ROA values are consistently higher than reported ROA and show a similar pattern: growth from 7.74% in 2020 to 9.53% in 2021, a decrease to 5.69% in 2022, then an increase to 10.44% in 2023, ending at 10.14% in 2024. This reinforces the impact of goodwill adjustments and a stronger underlying asset profitability.

Total Assets

The reported total assets show a slight fluctuation over the five-year period, starting at 67,810 million US dollars in 2020, decreasing marginally to 67,092 million in 2021, then rising to a peak of 71,391 million in 2023 before declining again to 68,497 million in 2024. In contrast, the adjusted total assets, which presumably exclude goodwill or other adjustments, exhibit a similar pattern but at a consistently lower level. Adjusted assets declined from 45,915 million in 2020 to 45,114 million in 2021, increased to 47,711 million in 2022, slightly decreased to 47,495 million in 2023, and then dropped to 45,480 million in 2024.

Total Asset Turnover

There is a noticeable upward trend in both reported and adjusted total asset turnover ratios throughout the analyzed period. The reported total asset turnover increased steadily from 0.39 in 2020 to 0.53 in 2024, indicating improved efficiency in generating sales from the asset base. Similarly, the adjusted total asset turnover shows a higher magnitude and a more pronounced upward trajectory, climbing from 0.58 in 2020 to 0.80 in 2024. This suggests that when goodwill and other adjustments are excluded, the company's assets are being utilized increasingly effectively to generate revenue over the years.

Insights

The disparity between reported and adjusted total assets highlights the significant impact of goodwill or other intangible assets on the overall asset base. Despite fluctuations in total assets, the continuous improvement in asset turnover ratios reflects enhanced operational efficiency. The adjusted figures indicate a stronger growth in asset turnover, potentially signaling that the core business assets are generating more revenue, independent of intangible asset valuations. Overall, the data points to a positive trend in asset utilization despite some volatility in asset size.

The financial data reveals distinct trends in both reported and goodwill-adjusted figures over the five-year period from 2020 to 2024. The analysis highlights changes in total assets, shareholders’ equity, and financial leverage, providing insights into the company's evolving financial structure.

Total Assets

Reported total assets exhibit moderate fluctuation, starting at 67,810 million USD in 2020, dropping slightly to 67,092 million USD in 2021, then rising to a peak of 71,391 million USD in 2023 before declining to 68,497 million USD in 2024. This pattern suggests some volatility but relative stability overall.

Adjusted total assets, which likely exclude goodwill and other intangible assets, follow a similar trajectory but at a consistently lower level, starting at 45,915 million USD in 2020 and ending at 45,480 million USD in 2024. The peak in adjusted assets occurs in 2022 at 47,711 million USD, followed by a slight decline thereafter.

Shareholders’ Equity

Reported shareholders’ equity shows a generally stable pattern with slight fluctuations: it increases from 27,578 million USD in 2020 to 28,269 million USD in 2021, dips to 26,883 million USD in 2022, rises again to 28,332 million USD in 2023, and then declines to 26,932 million USD in 2024. This indicates minor fluctuations reflecting changes in retained earnings or other equity components.

Adjusted shareholders’ equity, however, displays greater variability and is substantially lower, starting at only 5,683 million USD in 2020 and reaching a low point of 3,433 million USD in 2022. It recovers partially to 4,436 million USD in 2023 but declines again to 3,915 million USD in 2024, suggesting significant adjustments related to goodwill substantially impact the equity base.

Financial Leverage

The reported financial leverage ratio remains relatively consistent, ranging between 2.37 and 2.65 over the period. After a decrease from 2.46 in 2020 to 2.37 in 2021, it increases to 2.65 in 2022 before falling to 2.52 in 2023 and slightly rising to 2.54 in 2024. This indicates stable leverage in terms of reported figures.

In stark contrast, the adjusted financial leverage ratio, which accounts for the removal of goodwill, is markedly higher and more volatile. Starting at 8.08 in 2020, it falls to 7.17 in 2021, then surges sharply to 13.9 in 2022. This peak is followed by a decline to 10.71 in 2023 and a slight increase to 11.62 in 2024. These elevated and fluctuating ratios suggest a heavier debt burden or lower equity base once goodwill is excluded.

In summary, the data indicates that the company's reported financial position appears relatively stable in terms of assets, equity, and leverage. However, adjustments for goodwill reveal a more conservative and potentially riskier financial profile, characterized by substantially lower equity and significantly higher leverage ratios. This contrast underscores the importance of goodwill in the reported figures and calls for careful consideration of the adjusted results when evaluating financial health and risk.

Shareholders’ Equity (Reported)

The reported total shareholders’ equity displayed minor fluctuations over the observed periods. It started at $27,578 million in 2020, slightly increased to $28,269 million in 2021, then declined to $26,883 million in 2022. The figure rebounded to $28,332 million in 2023 before decreasing again to $26,932 million in 2024. Overall, the reported equity showed no consistent upward or downward trend but rather modest variability around an approximate mean of $27,700 million.

Shareholders’ Equity (Adjusted for Goodwill)

The adjusted total shareholders’ equity, which likely excludes goodwill effects, exhibited a markedly different pattern. Beginning at $5,683 million in 2020, it rose to $6,291 million in 2021 before sharply declining to $3,433 million in 2022. Subsequently, it recovered to $4,436 million in 2023, only to drop slightly to $3,915 million in 2024. This dataset shows significant volatility and a general downward trend from the peak in 2021, reflecting substantial adjustments possibly related to goodwill impairments or revaluations over time.

Return on Equity (Reported)

The reported return on equity (ROE) indicates varying profitability relative to reported equity. It increased from 12.89% in 2020 to 15.21% in 2021, then dropped substantially to 10.11% in 2022. Following this, ROE rose sharply to 17.5% in 2023 and maintained a similar level of 17.12% in 2024. This pattern reflects an initial improvement in profitability, an intermediate decrease, and a strong recovery in the most recent years.

Return on Equity (Adjusted for Goodwill)

The adjusted ROE, calculated based on equity excluding goodwill, presents substantially higher and increasingly accelerating values compared to the reported ROE. Starting at an elevated 62.55% in 2020, it rose steadily to 68.35% in 2021 and further to 79.14% in 2022. The increase continued more dramatically to 111.79% in 2023 and 117.78% in 2024. This trend indicates significant increases in profitability relative to the adjusted equity base, underscoring the strong impact of excluding goodwill on performance metrics and suggesting that underlying operational returns have improved markedly or that goodwill adjustments have considerably reduced the equity base used in this calculation.

Total Assets

The reported total assets showed a slight decrease from 67,810 million US dollars in 2020 to 67,092 million in 2021, followed by an increase reaching a peak of 71,391 million in 2023. However, in 2024, the assets declined to 68,497 million. The adjusted total assets, which exclude goodwill effects, followed a similar pattern but at consistently lower values, starting at 45,915 million in 2020 and decreasing to 45,480 million by 2024, with moderate fluctuations in between.

Return on Assets (ROA)

The reported ROA exhibited some variability, increasing from 5.24% in 2020 to 6.41% in 2021, dipping significantly to 3.82% in 2022, and then recovering to higher levels of 6.95% in 2023 and slightly declining to 6.73% in 2024. The adjusted ROA, which reflects performance excluding goodwill, consistently remained higher than the reported ROA and followed a similar trend. It rose from 7.74% in 2020 to a peak of 10.44% in 2023, with a minor decline to 10.14% in 2024. This suggests that asset quality adjustments related to goodwill positively influence the perceived efficiency of asset utilization over the period.

General Observations

Overall, both reported and adjusted total assets demonstrated minor fluctuations with a peak around 2023 followed by a slight reduction in 2024. The ROA metrics indicate that the company experienced increased profitability relative to its assets in the earlier years, faced a downturn in 2022, and subsequently improved in 2023 and 2024. The adjusted figures, which presumably exclude goodwill, reveal higher returns, implying intangible asset adjustments have a material effect on asset-based profitability ratios.