Economic Value Added (EVA)
EVA is registered trademark of Stern Stewart.
Economic value added or economic profit is the difference between revenues and costs,where costs include not only expenses, but also cost of capital.
Economic Profit
Mondelēz International Inc., economic profit calculation
US$ in millions
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 NOPAT. See details »
2 Cost of capital. See details »
3 Invested capital. See details »
4 2024 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= 5,271 – 8.72% × 60,269 = 13
The financial data reflects varied performance trends for the company over the five-year period. Key financial indicators such as net operating profit after taxes (NOPAT), cost of capital, invested capital, and economic profit illustrate the operational and capital efficiency dynamics.
- Net Operating Profit After Taxes (NOPAT)
- The NOPAT shows fluctuation across the years. It increased from 3,858 million USD in 2020 to a peak of 4,733 million USD in 2021, indicating an improvement in operating profitability. However, there was a notable decline in 2022 to 3,016 million USD, suggesting challenges or higher costs impacting net operations. The value rebounded significantly in 2023 to 5,433 million USD but slightly decreased to 5,271 million USD in 2024, though it remained above previous early period levels. This pattern suggests some volatility but an overall trend toward recovering and improving profitability after a dip in 2022.
- Cost of Capital
- The cost of capital gradually increased from 8.37% in 2020 to a high of 8.97% in 2023, before slightly declining to 8.72% in 2024. This rising trend until 2023 implies a potentially higher risk or capital expense environment, which could affect investment decisions and valuation. The slight decrease in 2024 may indicate some stabilization of capital costs.
- Invested Capital
- Invested capital remained relatively stable, with modest fluctuations throughout the period. It slightly increased from 61,366 million USD in 2020 to 63,833 million USD in 2022, followed by declines in 2023 and 2024, reaching 60,269 million USD. This trend could reflect capital expenditure adjustments, divestitures, or strategic reallocations affecting the asset base without significant expansion.
- Economic Profit
- Economic profit, which factors in the cost of capital, was negative in all years except 2024. Starting at -1,280 million USD in 2020, the negative economic profit narrowed to -577 million USD in 2021 but then deteriorated sharply to -2,516 million USD in 2022. The metric improved significantly to -84 million USD in 2023 and turned positive to 13 million USD by 2024. This trend indicates that while the company struggled to generate returns above its capital costs in earlier years, it approached breakeven in 2023 and achieved a slight value creation in 2024, signaling improved capital efficiency and profitability relative to invested funds.
Overall, the company experienced fluctuations in profitability and capital efficiency, with signs of recovery and stabilization by the end of the examined period. The ability to convert invested capital into economic profit improved notably in the last two years, despite earlier challenges. The upward trend in cost of capital until 2023 could have pressured returns, but recent improvements suggest adapting strategies or market conditions have favored better financial performance.
Net Operating Profit after Taxes (NOPAT)
Mondelēz International Inc., NOPAT calculation
US$ in millions
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 Elimination of deferred tax expense. See details »
2 Addition of increase (decrease) in allowances for credit losses.
3 Addition of increase (decrease) in restructuring Program liability.
4 Addition of increase (decrease) in equity equivalents to net earnings attributable to Mondelēz International.
5 2024 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 795 × 5.50% = 44
6 2024 Calculation
Tax benefit of interest expense, debt = Adjusted interest expense, debt × Statutory income tax rate
= 552 × 21.00% = 116
7 Addition of after taxes interest expense to net earnings attributable to Mondelēz International.
- Net Earnings Attributable to Mondelēz International
- The net earnings demonstrated a fluctuating trend over the five-year period. Starting at 3,555 million US dollars in 2020, earnings increased notably to 4,300 million in 2021, showing significant growth. However, in 2022, there was a considerable decline to 2,717 million, representing a substantial decrease. The earnings then rose sharply in 2023 to reach 4,959 million, the highest point in the period under review, followed by a slight decline in 2024 to 4,611 million. Despite the fluctuations, the earnings in 2024 remained well above the 2020 level.
- Net Operating Profit After Taxes (NOPAT)
- The NOPAT exhibited a similar pattern to net earnings, evidencing growth from 3,858 million US dollars in 2020 to 4,733 million in 2021. There was a decline in 2022 to 3,016 million, although this was less pronounced than the drop in net earnings. In 2023, NOPAT increased sharply, reaching 5,433 million, the peak during the period. A marginal decrease to 5,271 million occurred in 2024, yet the level remained significantly higher compared to the start of the period.
- General Observations
- Both net earnings and NOPAT show a cyclical pattern with peaks in 2021 and 2023, and troughs in 2022. The recovery after 2022 is strong, indicating resilience and effective operational performance. The overall upward trend from 2020 to 2024 reflects improvement in profitability and operational efficiency, despite the mid-period dip. The differences in magnitude of the declines and recoveries between net earnings and NOPAT may suggest varying impacts of operational and non-operational factors on profitability.
Cash Operating Taxes
Mondelēz International Inc., cash operating taxes calculation
US$ in millions
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
- Provision for Income Taxes
- The provision for income taxes fluctuated over the five-year period. It decreased from 1224 million USD in 2020 to 865 million USD in 2022, indicating a downward trend during these years. However, the figure rose sharply to 1537 million USD in 2023, the highest level in the series, before slightly declining to 1469 million USD in 2024. This pattern suggests variable tax charges, possibly influenced by changes in profitability, tax regulations, or accounting estimates.
- Cash Operating Taxes
- Cash operating taxes demonstrated a generally volatile trend as well. Starting at 1387 million USD in 2020, there was a decline to 1003 million USD by 2022. Subsequently, the amount increased substantially to 1697 million USD in 2023, marking the peak in this timeframe. The value then decreased to 1328 million USD in 2024. This fluctuation may reflect differences in actual cash paid versus tax provisions, timing of payments, or underlying operational profitability.
Invested Capital
Mondelēz International Inc., invested capital calculation (financing approach)
US$ in millions
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 Addition of capitalized operating leases.
2 Elimination of deferred taxes from assets and liabilities. See details »
3 Addition of allowance for doubtful accounts receivable.
4 Addition of restructuring Program liability.
5 Addition of equity equivalents to total Mondelēz International shareholders’ equity.
6 Removal of accumulated other comprehensive income.
7 Subtraction of construction in progress.
- Total reported debt & leases
- The total reported debt and leases displayed a fluctuating trend over the given periods. It initially decreased from 20,706 million USD in 2020 to 20,145 million USD in 2021. However, it rose significantly to 23,613 million USD in 2022, indicating a marked increase in leverage or obligations during that year. Subsequently, the debt declined again to 20,110 million USD in 2023 and further decreased to 18,544 million USD in 2024, suggesting efforts to reduce debt levels after the peak in 2022.
- Total Mondelēz International shareholders’ equity
- Shareholders’ equity showed moderate variation but remained relatively stable throughout the years. An increase was observed from 27,578 million USD in 2020 to 28,269 million USD in 2021, followed by a decline to 26,883 million USD in 2022. Equity then recovered to 28,332 million USD in 2023 before a slight decrease to 26,932 million USD in 2024. These fluctuations may reflect changes in retained earnings, share repurchases, or other equity transactions.
- Invested capital
- Invested capital exhibited an overall stable pattern with some minor fluctuations. Starting at 61,366 million USD in 2020, it increased marginally to 61,560 million USD in 2021 and reached a peak of 63,833 million USD in 2022. However, it dropped to 61,495 million USD in 2023 and further declined to 60,269 million USD in 2024. This trend indicates that the company maintained a steady level of capital investment with slight adjustments possibly related to asset acquisitions or disposals and working capital changes.
Cost of Capital
Mondelēz International Inc., cost of capital calculations
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 74,287) | 74,287) | ÷ | 90,928) | = | 0.82 | 0.82 | × | 10.23% | = | 8.36% | ||
| Debt3 | 15,846) | 15,846) | ÷ | 90,928) | = | 0.17 | 0.17 | × | 2.38% × (1 – 21.00%) | = | 0.33% | ||
| Operating lease liability4 | 795) | 795) | ÷ | 90,928) | = | 0.01 | 0.01 | × | 5.50% × (1 – 21.00%) | = | 0.04% | ||
| Total: | 90,928) | 1.00 | 8.72% | ||||||||||
Based on: 10-K (reporting date: 2024-12-31).
1 US$ in millions
2 Equity. See details »
3 Debt. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 103,504) | 103,504) | ÷ | 121,712) | = | 0.85 | 0.85 | × | 10.23% | = | 8.70% | ||
| Debt3 | 17,506) | 17,506) | ÷ | 121,712) | = | 0.14 | 0.14 | × | 2.19% × (1 – 21.00%) | = | 0.25% | ||
| Operating lease liability4 | 702) | 702) | ÷ | 121,712) | = | 0.01 | 0.01 | × | 5.10% × (1 – 21.00%) | = | 0.02% | ||
| Total: | 121,712) | 1.00 | 8.97% | ||||||||||
Based on: 10-K (reporting date: 2023-12-31).
1 US$ in millions
2 Equity. See details »
3 Debt. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 89,856) | 89,856) | ÷ | 110,753) | = | 0.81 | 0.81 | × | 10.23% | = | 8.30% | ||
| Debt3 | 20,217) | 20,217) | ÷ | 110,753) | = | 0.18 | 0.18 | × | 2.40% × (1 – 21.00%) | = | 0.35% | ||
| Operating lease liability4 | 680) | 680) | ÷ | 110,753) | = | 0.01 | 0.01 | × | 4.20% × (1 – 21.00%) | = | 0.02% | ||
| Total: | 110,753) | 1.00 | 8.67% | ||||||||||
Based on: 10-K (reporting date: 2022-12-31).
1 US$ in millions
2 Equity. See details »
3 Debt. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 93,046) | 93,046) | ÷ | 113,928) | = | 0.82 | 0.82 | × | 10.23% | = | 8.35% | ||
| Debt3 | 20,249) | 20,249) | ÷ | 113,928) | = | 0.18 | 0.18 | × | 1.82% × (1 – 21.00%) | = | 0.26% | ||
| Operating lease liability4 | 633) | 633) | ÷ | 113,928) | = | 0.01 | 0.01 | × | 3.30% × (1 – 21.00%) | = | 0.01% | ||
| Total: | 113,928) | 1.00 | 8.62% | ||||||||||
Based on: 10-K (reporting date: 2021-12-31).
1 US$ in millions
2 Equity. See details »
3 Debt. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 79,375) | 79,375) | ÷ | 101,603) | = | 0.78 | 0.78 | × | 10.23% | = | 7.99% | ||
| Debt3 | 21,568) | 21,568) | ÷ | 101,603) | = | 0.21 | 0.21 | × | 2.17% × (1 – 21.00%) | = | 0.36% | ||
| Operating lease liability4 | 660) | 660) | ÷ | 101,603) | = | 0.01 | 0.01 | × | 3.20% × (1 – 21.00%) | = | 0.02% | ||
| Total: | 101,603) | 1.00 | 8.37% | ||||||||||
Based on: 10-K (reporting date: 2020-12-31).
1 US$ in millions
2 Equity. See details »
3 Debt. See details »
4 Operating lease liability. See details »
Economic Spread Ratio
Mondelēz International Inc., economic spread ratio calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Economic profit1 | 13) | (84) | (2,516) | (577) | (1,280) | |
| Invested capital2 | 60,269) | 61,495) | 63,833) | 61,560) | 61,366) | |
| Performance Ratio | ||||||
| Economic spread ratio3 | 0.02% | -0.14% | -3.94% | -0.94% | -2.09% | |
| Benchmarks | ||||||
| Economic Spread Ratio, Competitors4 | ||||||
| Coca-Cola Co. | 2.63% | 3.14% | 2.83% | 4.38% | 2.20% | |
| PepsiCo Inc. | 5.50% | 4.42% | 4.40% | 4.95% | 3.61% | |
| Philip Morris International Inc. | 8.14% | 8.77% | 11.72% | 25.90% | 19.58% | |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 Economic profit. See details »
2 Invested capital. See details »
3 2024 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × 13 ÷ 60,269 = 0.02%
4 Click competitor name to see calculations.
- Economic Profit
- The economic profit shows significant fluctuations over the analyzed period. It began with a substantial negative value of -1280 million US dollars at the end of 2020, improved in 2021 to -577 million, but then deteriorated sharply in 2022 to -2516 million. Following this steep decline, economic profit improved markedly over the subsequent two years, reaching a near break-even point at -84 million in 2023 and ultimately turning slightly positive at 13 million US dollars in 2024. This pattern indicates an initial period of loss that intensified before recovery efforts or operational changes led to increased profitability, culminating in a marginal positive economic profit.
- Invested Capital
- Invested capital remained relatively stable throughout the period, with minor fluctuations. Starting at 61,366 million US dollars in 2020, it increased slightly to 61,560 million in 2021, peaked at 63,833 million in 2022, and then declined in the following years to 61,495 million in 2023 and 60,269 million in 2024. The overall trend suggests that the company maintained a substantial capital base, with some reduction in the most recent years possibly reflecting asset disposals or optimized capital allocation.
- Economic Spread Ratio
- The economic spread ratio, which indicates the difference between return on invested capital and cost of capital, was negative throughout most of the analyzed timeframe, indicating returns were generally below the cost of capital. It improved from -2.09% in 2020 to -0.94% in 2021, but then worsened significantly to -3.94% in 2022. This was followed by a recovery toward zero, with values at -0.14% in 2023 and turning slightly positive to 0.02% in 2024. The improvement in this ratio over the last two years aligns with the recovery seen in economic profit, signaling enhanced value creation and operational efficiency.
Economic Profit Margin
Mondelēz International Inc., economic profit margin calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Economic profit1 | 13) | (84) | (2,516) | (577) | (1,280) | |
| Net revenues | 36,441) | 36,016) | 31,496) | 28,720) | 26,581) | |
| Performance Ratio | ||||||
| Economic profit margin2 | 0.04% | -0.23% | -7.99% | -2.01% | -4.81% | |
| Benchmarks | ||||||
| Economic Profit Margin, Competitors3 | ||||||
| Coca-Cola Co. | 4.86% | 5.73% | 5.25% | 9.10% | 5.05% | |
| PepsiCo Inc. | 4.59% | 3.63% | 3.54% | 4.35% | 3.60% | |
| Philip Morris International Inc. | 10.40% | 12.83% | 17.52% | 24.13% | 21.80% | |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 Economic profit. See details »
2 2024 Calculation
Economic profit margin = 100 × Economic profit ÷ Net revenues
= 100 × 13 ÷ 36,441 = 0.04%
3 Click competitor name to see calculations.
- Net Revenues
- The net revenues exhibit a consistent upward trend over the analyzed period. Starting from approximately 26.6 billion US dollars at the end of 2020, revenues increased steadily each year, reaching nearly 36.4 billion US dollars by the end of 2024. This represents significant growth, indicating successful top-line expansion throughout the period.
- Economic Profit
- Economic profit shows considerable volatility and a notable improvement trend towards the end of the period. Initially, economic profit was negative and declining, dropping to a low point of -2.516 billion US dollars in 2022. However, from 2023 onwards, there was a sharp recovery, with economic profit rising to a small positive figure of 13 million US dollars by the end of 2024. This suggests enhanced operational efficiency or profitability adjustments over these years.
- Economic Profit Margin
- The economic profit margin follows a pattern similar to economic profit, characterized by negative values throughout most of the period. The margin deteriorated to its lowest at -7.99% in 2022, indicating a period where the company was not generating economic value relative to its invested capital. Nevertheless, improvement is evident in the last two years, with the margin almost breaching neutrality in 2023 at -0.23%, and finally turning slightly positive at 0.04% by 2024. This transition from negative to positive margin is a key indicator of improving value creation.
- Overall Interpretation
- The data indicates robust revenue growth coupled with initial challenges in generating positive economic profit and margin, which peaked negatively in 2022. The subsequent recovery in both economic profit and margin suggests effective strategic actions to improve profitability and capital efficiency. By 2024, the slight positive economic profit and margin imply the company has started to generate economic value beyond its costs, signaling a potential shift to sustainable financial health.