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.
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Mondelēz International Inc. pages available for free this week:
- Income Statement
- Cash Flow Statement
- Analysis of Long-term (Investment) Activity Ratios
- Common Stock Valuation Ratios
- Enterprise Value (EV)
- Enterprise Value to EBITDA (EV/EBITDA)
- Capital Asset Pricing Model (CAPM)
- Net Profit Margin since 2005
- Return on Assets (ROA) since 2005
- Price to Sales (P/S) since 2005
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Economic Profit
Mondelēz International Inc., economic profit calculation
US$ in millions
| 12 months ended: | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|---|
| Net operating profit after taxes (NOPAT)1 | ||||||
| Cost of capital2 | ||||||
| Invested capital3 | ||||||
| Economic profit4 | ||||||
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
= – × =
The financial data reveals several notable trends in the company's performance and capital efficiency over the analyzed period.
- Net Operating Profit After Taxes (NOPAT)
- NOPAT showed a fluctuating pattern. It increased from 3,858 million USD in 2020 to a peak of 4,733 million USD in 2021, before falling sharply to 3,016 million USD in 2022. However, it recovered significantly in 2023 to 5,433 million USD and remained strong at 5,271 million USD in 2024. This indicates volatility in operating profitability with a strong rebound after 2022.
- Cost of Capital
- The cost of capital rose gradually from 8.41% in 2020 to 9.02% in 2023, reflecting increasing capital expenses or market risks. It slightly declined to 8.77% in 2024, suggesting a minor easing of financing costs or risk factors at the end of the period.
- Invested Capital
- The invested capital remained relatively stable overall but with moderate fluctuations. It started at 61,366 million USD in 2020, slightly increased to 63,833 million USD in 2022, and then decreased to 60,269 million USD by 2024. This trend points to a relatively consistent capital base with some retrenchment towards the end.
- Economic Profit
- Economic profit was negative throughout the period, illustrating that the company was not generating returns above its cost of capital. The deficit narrowed notably from a loss of 1,306 million USD in 2020 to only 13 million USD in 2024, but it also reflected volatility, including a significant dip to -2,544 million USD in 2022. The trend implies continuous challenges in value creation despite improvements in recent years.
Overall, while operating profits demonstrated considerable volatility with a recovery in the latter years, the company consistently faced challenges in exceeding its cost of capital, as indicated by persistent negative economic profits. The investment base remained relatively stable with a slight downward adjustment in the final year. The gradual increase in cost of capital could have imposed additional pressure on profitability metrics during this timeframe.
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
= × =
6 2024 Calculation
Tax benefit of interest expense, debt = Adjusted interest expense, debt × Statutory income tax rate
= × 21.00% =
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 | ÷ | = | × | = | |||||||||
| Debt3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
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 | ÷ | = | × | = | |||||||||
| Debt3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
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 | ÷ | = | × | = | |||||||||
| Debt3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
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 | ÷ | = | × | = | |||||||||
| Debt3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
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 | ÷ | = | × | = | |||||||||
| Debt3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
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 | ||||||
| Invested capital2 | ||||||
| Performance Ratio | ||||||
| Economic spread ratio3 | ||||||
| Benchmarks | ||||||
| Economic Spread Ratio, Competitors4 | ||||||
| Coca-Cola Co. | ||||||
| PepsiCo Inc. | ||||||
| Philip Morris International Inc. | ||||||
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 × ÷ =
4 Click competitor name to see calculations.
The financial data reveals several key trends regarding the company's economic profit, invested capital, and economic spread ratio over the five-year period ending December 31, 2024.
- Economic Profit
- Economic profit shows a generally negative pattern throughout the period, indicating that the company has been generating returns below its cost of capital. The loss narrowed significantly from -1,306 million USD in 2020 to -604 million USD in 2021 but then deteriorated sharply to -2,544 million USD in 2022. Following this low point, there was an improvement trend with economic profit losses reducing to -112 million USD in 2023 and further to -13 million USD in 2024, suggesting recovery efforts may be yielding results.
- Invested Capital
- The invested capital remained relatively stable over the period, rising slightly from 61,366 million USD in 2020 to a peak of 63,833 million USD in 2022. Afterward, it gradually declined to 60,269 million USD by the end of 2024. This indicates a moderate downsizing of capital investment or asset base in recent years, which may be part of strategic adjustments to improve capital efficiency.
- Economic Spread Ratio
- The economic spread ratio, representing the difference between return on invested capital and cost of capital, was consistently negative, reinforcing the observation that returns did not cover associated costs. The ratio improved from -2.13% in 2020 to -0.98% in 2021 but worsened markedly to -3.99% in 2022. Subsequently, the spread ratio showed a marked recovery, increasing to -0.18% in 2023 and further to -0.02% in 2024, approaching a break-even point.
In summary, the firm experienced considerable challenges impacting profitability and returns on capital during the middle of the analyzed period, particularly in 2022. However, there are clear signs of recovery in recent years, with economic profit losses narrowing and the economic spread ratio moving closer to zero. The relatively stable invested capital base combined with improving economic profitability metrics suggests that management's initiatives to enhance value creation may be effective, though continued monitoring is advised to confirm sustained positive trends.
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 | ||||||
| Net revenues | ||||||
| Performance Ratio | ||||||
| Economic profit margin2 | ||||||
| Benchmarks | ||||||
| Economic Profit Margin, Competitors3 | ||||||
| Coca-Cola Co. | ||||||
| PepsiCo Inc. | ||||||
| Philip Morris International Inc. | ||||||
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 × ÷ =
3 Click competitor name to see calculations.
- Net Revenues
- The net revenues demonstrated a consistent upward trend over the analyzed periods. Beginning at approximately 26.6 billion USD in 2020, revenues increased steadily each year, reaching over 36.4 billion USD by the end of 2024. This growth reflects a positive performance in sales or service income, indicating successful market activities or expansion during this timeframe.
- Economic Profit
- Economic profit exhibited significant fluctuations and a general trend toward reduction in losses over the years. In 2020, the economic profit was negative at around -1.3 billion USD, improving to about -604 million USD in 2021. However, a notable setback occurred in 2022 when economic profit sharply declined to approximately -2.54 billion USD. Following that, there was a pronounced recovery with losses narrowing dramatically to roughly -112 million USD in 2023 and further to nearly -13 million USD by the end of 2024. This pattern suggests volatility in profitability, with a marked recovery trend in the latter years.
- Economic Profit Margin
- The economic profit margin showed a trend consistent with economic profit values but on a relative scale. It started at a negative margin of about -4.91% in 2020, improving to -2.1% in 2021, indicating better value creation relative to revenue. The margin then deteriorated sharply to -8.08% in 2022, paralleling the sharp decline in economic profit. From 2023 onwards, the margin greatly improved, moving closer to zero with values of -0.31% and -0.04% in 2023 and 2024 respectively, reflecting a near breakeven performance in terms of economic profitability relative to sales.
- Summary
- Overall, the data indicate steady revenue growth coupled with fluctuating economic profitability. The sharp decline in economic profit and margin during 2022 suggests specific challenges impacting value creation despite increasing revenues. The subsequent recovery in profitability and margin in 2023 and 2024 points to effective measures or favorable conditions that improved economic efficiency and minimized losses. Continued attention to controlling costs and enhancing operational effectiveness appears critical to sustaining this positive trend going forward.