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 – 8.76% × 60,269 = -10
The analysis of the financial metrics over the span of five years reveals notable fluctuations in key performance indicators.
- Net Operating Profit After Taxes (NOPAT)
- The NOPAT experienced an overall upward trend from 2020 to 2024 with significant variability. Starting at $3,858 million in 2020, it increased to a peak of $5,433 million in 2023 before slightly declining to $5,271 million in 2024. The year 2022 marked a considerable dip to $3,016 million, indicating potential operational challenges or external factors impacting profitability during that period.
- Cost of Capital
- The cost of capital showed a gradual increase from 8.41% in 2020 to 9.01% in 2023, followed by a modest decrease to 8.76% in 2024. This trend suggests a rising hurdle rate for investments, possibly reflecting changes in market risk perceptions or financing conditions before easing slightly in the last year.
- Invested Capital
- Invested capital remained relatively stable throughout the period, fluctuating narrowly between approximately $60.3 billion and $63.8 billion. The highest level was recorded in 2022 at $63,833 million, with a subsequent decline reaching $60,269 million by 2024. This suggests a conservative approach to capital deployment or divestitures in the later years.
- Economic Profit
- Economic profit was consistently negative across all years, indicating that the company's returns did not exceed its cost of capital during the period under review. The deficit narrowed markedly from -$1,303 million in 2020 to -$10 million in 2024, with a notable exception in 2022 when the loss widened substantially to -$2,541 million. The near breakeven point in 2024 reflects improved efficiency or profitability relative to the cost of capital despite ongoing challenges.
In summary, the company displayed resilience with improved operational profit towards the end of the period, although economic profit remained negative, signaling that the returns, while growing, have yet to surpass the cost of capital sustainably. The temporary decline in 2022 highlights a period of difficulties that affected both profitability and value creation. Stability in invested capital suggests disciplined asset management, while the cost of capital trends underscore evolving financial conditions impacting investment returns.
Net Operating Profit after Taxes (NOPAT)
Mondelēz International Inc., NOPAT calculation
US$ 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 | × | 10.28% | = | 8.40% | ||
| 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 | 8.76% | ||||||||||
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 | × | 10.28% | = | 8.74% | ||
| 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 | 9.01% | ||||||||||
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 | × | 10.28% | = | 8.34% | ||
| 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 | 8.70% | ||||||||||
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 | × | 10.28% | = | 8.39% | ||
| 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 | 8.66% | ||||||||||
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 | × | 10.28% | = | 8.03% | ||
| 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 | 8.41% | ||||||||||
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 | (10) | (109) | (2,541) | (601) | (1,303) | |
| Invested capital2 | 60,269) | 61,495) | 63,833) | 61,560) | 61,366) | |
| Performance Ratio | ||||||
| Economic spread ratio3 | -0.02% | -0.18% | -3.98% | -0.98% | -2.12% | |
| Benchmarks | ||||||
| Economic Spread Ratio, Competitors4 | ||||||
| Coca-Cola Co. | 2.60% | 3.11% | 2.79% | 4.35% | 2.17% | |
| PepsiCo Inc. | 5.46% | 4.38% | 4.36% | 4.91% | 3.57% | |
| Philip Morris International Inc. | 8.10% | 8.74% | 11.68% | 25.85% | 19.54% | |
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 × -10 ÷ 60,269 = -0.02%
4 Click competitor name to see calculations.
- Economic Profit
- The economic profit displayed a highly volatile trend over the five-year period. It started at a significant negative value of -1303 million US dollars in 2020, improved substantially to -601 million in 2021, before sharply declining again to -2541 million in 2022. Following this peak negative value, economic profit improved markedly in 2023 to -109 million and further to -10 million in 2024, indicating a trend toward decreased losses and approaching breakeven.
- Invested Capital
- The invested capital remained relatively stable throughout the period, fluctuating within a narrow range. Starting at 61366 million US dollars in 2020, it saw a slight increase to 61560 million in 2021 and further to 63833 million in 2022. A minor decline followed, with invested capital reducing to 61495 million in 2023 and continuing to decrease marginally to 60269 million in 2024. This indicates consistent capital deployment with a slight retrenchment in the final years.
- Economic Spread Ratio
- The economic spread ratio mirrored the trends in economic profit, reflecting underperformance relative to the cost of capital. Starting at -2.12% in 2020, there was improvement to -0.98% in 2021, followed by a deterioration to -3.98% in 2022. From 2022 onward, the ratio improved significantly to -0.18% in 2023 and further to -0.02% in 2024, moving very close to zero. This suggests that while the company struggled to cover its capital costs, recent years showed meaningful progress toward more efficient capital utilization.
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 | (10) | (109) | (2,541) | (601) | (1,303) | |
| Net revenues | 36,441) | 36,016) | 31,496) | 28,720) | 26,581) | |
| Performance Ratio | ||||||
| Economic profit margin2 | -0.03% | -0.30% | -8.07% | -2.09% | -4.90% | |
| Benchmarks | ||||||
| Economic Profit Margin, Competitors3 | ||||||
| Coca-Cola Co. | 4.80% | 5.67% | 5.19% | 9.03% | 4.98% | |
| PepsiCo Inc. | 4.56% | 3.59% | 3.50% | 4.31% | 3.56% | |
| Philip Morris International Inc. | 10.34% | 12.78% | 17.46% | 24.09% | 21.76% | |
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 × -10 ÷ 36,441 = -0.03%
3 Click competitor name to see calculations.
- Net Revenues
- There is a consistent upward trend in net revenues over the period under review. Starting from $26,581 million, the figure increases steadily each year, reaching $36,441 million by the end of the latest period. This indicates a positive growth trajectory in sales or service income over the years.
- Economic Profit
- Economic profit shows significant fluctuations and overall improvement towards breakeven. The company experienced a loss of $1,303 million initially, which improved to a loss of $601 million in the subsequent period. However, in the following year, economic profit deteriorated sharply to a loss of $2,541 million. The next two years show considerable recovery, with losses reducing substantially to $109 million and $10 million respectively. This suggests that despite volatility, the company has been moving toward reducing value destruction.
- Economic Profit Margin
- The economic profit margin, expressed as a percentage, mirrors the trend observed in economic profit. Initially, the margin stood at -4.9%, improving to -2.09% the next year, then deteriorating to -8.07%. The final two periods show a marked recovery with margins nearing zero at -0.3% and -0.03%. This trend illustrates the company's efforts to improve operational efficiency and cost management but still reflects marginal negative returns on invested capital.
- Overall Analysis
- The data portrays a company with increasing revenue, which has not consistently translated into positive economic profit. Fluctuations in economic profit and its margin suggest challenges in maintaining profitability relative to capital employed. Nevertheless, the recent periods reflect a promising trend of narrowing losses, indicating potential stabilization and improved financial health if such trends continue.